Human Resource Management

HUMAN RESOURCE

MANAGEMENT

MCDONALD,S CORPORATION

Institute of Administrative SCIENCES

feburary 2, 08

Statement of Commitment
We as students of I.A.S. clarifies that all the information has been collected by
interviewing the Human Resource Manager of McDonald’s and there is no doubt about
its documentation.

. 1
Human Resource Management

SUBMITTED TO:

MISS Saima Asad

SUBMITTED BY:

Muhammd Farooq (MPA-29-M).

RABIA Imtiaz (MPA-05-M).

Muazzam Ali (MPA-49-M).

Rafia Khalid (MHRM--M).

CLASS:

Masters 2nd Semester (MORNING)

. 2
Human Resource Management

ACKNOWLEDGEMENT

“In the name of Almighty Allah, the most beneficent and merciful to the mankind.”

This project would not be possible without the encouragement and guidance of number of
people. We feel highly obliged and want to express our deepest gratitude to our respected teacher
Miss Saima Asad for her advice, help and guidance throughout this semester.

We would like to express our deepest gratitude to our parents and friends for their inspirations,
love and constant support.

. 3
Human Resource Management

EXECUTIVE SUMMARY

This project is about Mc Donald’s Pakistan, which is one of the largest and the best-known
global food service retailer with more than 30,000 restaurants in 121 countries serving 47 million
customers each day. First we have studied a brief history of the company worldwide. Then we
have introduced McDonalds Pakistan, the organizations strategies and its structure.

Basically, this project aims to have an overview of the McDonalds human resource management.
The different functions at the disposal of HR include provision of different laws for the
protection of employee’s rights. Strategies for the development of the organization, job analysis
for the hiring of new employees, personnel recruiting, employee testing and selection,
performance appraisal are also integral parts of HR.

These all functions are described in context of McDonalds Pakistan. This will help better
understanding the different processes involved in HR functionality.

. 4
Human Resource Management

Topic no
. 5
Human Resource Management

History and McDonald's has come a long way since Ray Kroc laid
down the foundation of the Company in 1954. Story goes that Ray Kroc
introduction
mortgaged his home and invested his entire life savings to become the
of exclusive distributor of a five-spindled milk shake maker called the

McDonald’s: Multimixer. Hearing about the McDonald's hamburger stand in California

running eight Multimixers at a time, he packed up his car and headed
West. Ray Kroc pitched the idea of opening up several restaurants to the
brothers Dick and Mac McDonald (hence the name), convinced that he
could sell eight of his Multimixers to each and every one.

McDonald's today is one of the largest and the best known global food
service retailer with more than 30,000 restaurants in 121 countries serving
47 million customers each day. McDonald’s serves less than one percent
of the world’s population. McDonald’s outstanding brand recognition,
experienced management, high quality food, advanced operational
systems and unique global infrastructure ensure a position that enables
them to capitalize on global opportunities.

. 6
Human Resource Management

McDonald's McDonald’s is part of the Lakson group of companies, a

leading business in Pakistan. McDonald’s first restaurant has opened its
Pakistan:
door to the people of Pakistan in September 1998 in Lahore. Karachi
opened its first restaurant after one week. There are now 18 restaurants in
four major cities of Pakistan: 7 in Karachi, I in Hyderabad, 9 in Lahore and
1 in Faisalabad since the company first opened its doors to the people of
Pakistan.
This launch was met with unprecedented enthusiasm form the citizens of
Lahore who are known for their liveliness, vigor and penchant for quality
food. Today millions of Pakistanis place their trust in McDonald’s to
provide them best quality food, quick service and value for money. World
famous French fries, Big Mac, Quarter Pounder, Chicken McNuggets and
egg McMuffin are not only kids' favorites but also lure in the customers of
all ages. McDonald’s is firmly committed to give back to the community
where it operates. They are happy to become involved because they
recognize that organizations have a role to play in helping communities to
work successfully.

World
1. Be the best employer for people in each community around the world.
Wide
2. Deliver optional excellence to customers in each restaurant.
Strategies: 3. Achieve enduring profitable growth by expanding the brand and
leveraging the strengths of McDonald’s system through innovation and
technology.

. 7
Human Resource Management

Mission “Don't worry about making money Love what you are doing and always put
the customer first…And success will be yours!”
Statement:

VISION: “Being the best means providing outstanding quality service and cleanliness
so that the company makes every customer in every restaurant happy.” To
achieve this mission Macdonald's is focused on three worldwide strategies:

1 Be the best employer for the people in each community around the
world.
2. Deliver optional excellence to the customers in each of the restaurants.
3. Achieve enduring profitable growth by expanding the brand and
leveraging the strengths of McDonald’s system through innovation and
technology.

Objective: “To satisfy the internal customers because they are the window to the
external customers.”

Structure: McDonald's are structured along functional lines. Their Chief Executive
oversees five major areas of activity:

1. Operations (equipment and franchising)

2. Development (property and construction)
3. Finance (supply chain and new product development)
4. Marketing (sales marketing)
5. Human Resources (customer services, personnel, hygiene and
safety).

. 8
Human Resource Management

McDonald’s
The structural hierarchy of McDonalds Pakistan is as follows
Structure:

• Trainee Business Manager:

The trainee business manager should have the right skills and
qualities, in order to operate Mc Donald’s.

• 2nd Assistant:
At this level the second assistant really begins to develop his/her
management skills and learns what goes into running a shift.

• 1st Assistant:
At this level the first assistant brings together operations and
management skills and gets grip with finance, human resource and
training.

• Restaurant Manager:
The restaurant manager has all responsibility for people, profitability
and every other aspect of running the restraint.

• Area Supervisor:
A team of restaurant managers looks to the area supervisor for
advice and guidance for everything from the recruitment of staff to
local marketing initiatives.

• Operations consultant:
As operations consultant is an experienced manager, he will be
involved in the long term planning for the restaurants.

• Operations manager:
Acting as a business consultant, the input of an operations manager
plays a major part in the performance of as many as 10 restaurants.

. 9
Human Resource Management

HRM in McDonald’s is divided in to five regions in the world, which are further
divided into sub regions. As this organization is internationally owned,
McDonald’s:
so all its decision is taken from the head office, but they are somehow
changed to suit the different cultural backgrounds of the region.
As an organization is known by its well groomed and intelligent staff at
to support and maintain its best quality at every level, So McDonald is
also very careful when hiring for an employee. For that reason, its HR
department is very efficiently working to make sure the best is hired.
Here 95%of the workforce is restaurant based while 5%of it is in the
official running of the organization.

Equal McDonalds is a responsible company, who believes on EEO laws and is

an equal opportunity employer committed to a diverse work
Employment
force. McDonalds might be a global business but it is made up
Opportunity of individuals, everyone of whom brings their own unique
Laws skills and qualities to the team. There is no limit to how far
you can progress here without gender discrimination.

Job Analysis: As HR activities grow in scope and complexity, many duties, such as
recruitment and selection, performance appraisals, training, discovering
unassigned duties are delegating to the HR department. But HR
specialist does not know the details of job as well as operating managers
do. Knowledge about job and their requirement must be collected
through a process known as job analysis.

. 10
Human Resource Management

Job Position : Assistant Manager - Marketing

Descriptio Vacancy Location: Mumbai
n
Candidate Profile:
MBA / PGDBA with specialization in Marketing must be willing to
travel. Must have 2-4 years of experience in the areas mentioned below
preferably from the retail industry.

Job description:
Identify priority restaurants, develop sales building plans and evaluate
results for priority restaurants, map business opportunities and
challenges for restaurant, event marketing, assist with the development
of mini-market marketing plans, provide input on marketing needs from
customer viewpoint, monitors the proper execution and impact of all
marketing activities.

Job Analysis
As job analysis is the process to understand the responsibilities of the
in job and in McDonald’s it is done in these different ways:
McDo Questionnaire
nald’s Employees fill questionnaires in every 2nd month to know the
performance of the restaurant so that information about duties,
:
responsibilities and activities of a job can be gathered.
Observation
Observation is also a way to gather the information about a job and to
achieve different satisfaction levels.

Once the firm has determined its staffing needs, it takes every possible
step to hire the best employees so as to fill the available positions.
The Hiring The hiring process has two components:

Process: • Recruitment.
• Selection

. 11
Human Resource Management

Levels of
At McDonald, Hiring is done at two levels:
Hiring:
• Trainee Managers.
• Crew Members.
The difference between both of these is that the training managers are
required to learn to smoothly manage the working of the outlet, so they
are trained accordingly.
Whereas the crewmembers have shifts for cleaning, counter service and
other restaurant jobs.

Recruitment is the process of generating a pool of qualified candidates

for a particular job. The firm announces the job’s availability to the
market and attracts qualified candidates to apply.

Recruitment: There are two types of recruitment. McDonald’s corporation fills its
positions by.

• Internal sources
• External sources
Types of
recruitment: Internal sources
Filling open positions with current employees are often best source of
candidates. At Macdonald’s job posting technique is used which means
it publicizes an open job to employees (often by literally posting it on
intranets and bulletin boards) and listing the job’ attributes like
qualification, work schedule and pay rates

. 12
Human Resource Management

External sources
Eternal sources used by McDonald’s are

Advertisement in Newspapers
Advertisements are done in all the leading papers so that every
eligible candidate can apply for the job.

Advertisement on Web Site

Sometimes advertisement is also done on website so that the opportunity
can’t be missed by anyone.
Internships
Sometimes students get jobs while doing internship in McDonald.

Selection:
At McDonald’s, people are the most important factor. They seek only
those people, who can think, feel, express themselves, learn, teach and
hence grow. Their growth is the company’s growth

Fresh People
McDonald’s provides thorough In-house training to fresh people
relatively inexperience people. Hiring people having no previous work
experience also helps them greatly in adjusting to the distinct culture of
the organization.

Justified Selection
The selection is entirely based on merit, which conform the selection
criteria without any bias towards gender, religion, race, color,
nationality, age.

. 13
Human Resource Management

Selection After advertising for the job in the papers or in any other way when

Process: applications are received, these steps are followed:

Screening of Applicants

After building a pool of candidate’s applications, short listing of selective

applications is done by the HR manager.

Written Test
The reason for the written test is to assess that whether the recruits are able
enough to fulfill the general practical requirements of the job. The HR
department designs and conducts the tests as and when hiring needs arises.

Initial Interview
The ONE to ONE structured interviews are conducted by Restaurant
Manager after the written test.

Aptitude Tests
These are those tests, which are done for the training managers.

Reference Checks
They are to make sure that references provided by the candidates are valid so
that no confusion remains.

Final Interview
Candidates who give the best results are called for the final interview. A
panel of five or six interviewers does interview.

. 14
Human Resource Management

Relocation

After final interview, it is decided which candidates to select for which

job to make sure who is the best so that the standard of
McDonald’s is maintained.

Training in
Training and development activities are supplemented with more
McDonald’s: traditional education and training courses by HR department,
universities and private trainers. As more companies expand their
international involvement, experience abroad will becomes an even
more important development activity. These are concerned with
assisting employees to develop up-to-date skills, knowledge and
abilities.
The employees in McDonald’, are provided with training to achieve.
high standards in the organization.
The training period for a crewmember is three months and for others it
is one month or 10-15 days.
Training involves :

Direct Training
This is that training which is given directly after the selection so that an
employee can understand the position he will be working for and its
responsibilities.

Training Abroad
Different programs are arranged so that other qualified people can train
employees at different levels abroad so that they can understand
different standards and can improve their own capabilities.

. 15
Human Resource Management

Methods of
The different methods of Training used by McDonald’s are :
Training
Orientation
This is a way of direct training which provides new employees with
basic background information they need to perform their job
satisfactorily.
New employees get a handbook:-
- Working hours
- Performance reviews
- Vacations
- Employee benefits
- Personnel policies
- Safety measures and regulations

The orientation is performed by the HRD Manager and the employees

are introduced to their supervisors. There is a different orientation
process for every type of employee. But the common orientation for all
the employees is McDonald's People Promise:
“We value you, your growth and your contributions.”

• On-the-Job Training
On-the-job training is to train a person to learn a job by actually doing it.
Every day, around the world; restaurant members receive on-the-job
training and coaching in skills and procedures essential to their work.

• Classroom Training
Classroom courses, developed and led by training experts, prepare
outstanding restaurant employees for advancement.

. 16
Human Resource Management

• Computer-Based Training:
A new computer-based training system is bringing interactive learning
experiences to crew members and managers right in the restaurants.

Levels of
Training: There are two levels of training at McDonald’s:

• Crew Member’s Training:

At McDonald's, training never stops. Crew members are trained
extensively on all food safety and food handling processes. Trainees
work while they learn the operational skills necessary for running each
of the 25 positions in restaurant - from front counter to the grill area.

• Manager’s Training:
McDonald's is dedicated to professional training and development. The
average McDonald's restaurant manager spends more than 2,000 hours
over four years in training of one kind or another. This is about the same
amount of time that a typical four-year college student spends in the
classroom.

Specific
Training • Floor Management Course (FMC):
The FMC is geared towards improving the trainee's ability to deliver
Courses
Q,S,C & V as a Floor Manager.

• Management Development Program (MDP):

The MDP series is designed to help you become the most effective
manager that you can be.

• Operations Consultant Course (OCC)

• Training Consultant Course (TCC)
. 17
 Human Resource Management

Performanc
It is a process by which the performance of an employee is evaluated.
e McDonald’s conducts performance review semi-annually. Some

Appraisals: standards are made and defined according to which the employees have
to perform. Then after 6 months all the employees are evaluated that
whether they come up to our standards or not. An OJE (on- job-
evaluation) is performed in order to evaluate the employees. If an
employee does not perform well then feedback is provided to them so
they can improve.

The appraisal process in McDonald’s includes PA forms for every

particular job which involves:
- International McDonald‘s standards.
- Assessing the employees’ actual performance relative to these
standards.
Providing feedback to the employees.

Levels of
There are four levels to evaluate the performance of employees:
Performanc
e • Out Standing
• Excellent
Appraisals:
• Good
• Need Improvement
After giving the total grade to the employee the appraiser writes down
about the strength and the areas needing improvement of the employee.

. 18
 Human Resource Management

Performance-based pay approach that is designed to increase output,

Incentives
based on the performance of individuals or groups. Incentives in
McDonald’s are given to employees on basis of performance.
Types of
Incentives
1. Cash Based
2. Non Cash Based

Cash Based Incentives

• Attendance Allowance
• Annual Allowance
• Medical Allowance
• Hard Soft Furnishing [HSF]:
Once in every year certain categories of
employees can furnish their houses with the
carpet, furniture, curtains etc at the McDonald’s
expense.
• Leave Fair Assistance [LFA]:
Once in two year managerial level employees are
allowed to choose any area for tourism in
Pakistan with family for 10 days.

Non Cash Based Incentives

• Crew of the Year
• Crew of the Month
• Branch of the Year
• Access to gift certificates
• Merchandise
• Free food

. 19
 Human Resource Management

Benefits When employee joins the McDonald's management team, he will

receive the following:
Profit Sharing:
Fully funded by McDonald's. Share in the profits of the most successful
quick service restaurant in the world.
Vacation:
Increased vacation time per years of service.
Leaves:
McDonald's employees can also apply and obtain a leave of up to two
months for personal reasons or to study for examinations or school
projects.
Company Car:
Restaurant managers are eligible for a company vehicle after only three
years of service.
Educational Assistance:
McDonald's offers an educational assistance program for its employees.
Social Activities:
Enjoy a variety of activities with his team which could include an
annual Convention, summer picnic or outing, Eid Party etc.
Uniform:
All the employees accept those working in the offices are given
uniforms.
Flexible hours:
The restaurant opens for business 18 hours a day and that means work at
McDonald's can fit into anyone's schedule. Schoolwork, family or
personal activities can be scheduled around working hours.

. 20
 Human Resource Management

Conclusion: The operative philosophy of the McDonald's system is based on the Quality,
Service, Cleaning and Value for 44 years. The company offers a standard
menu, although it develops in each culture special products that are adjusted
to the pleasure of the community. McDonald's is successful because it has a
system of corporate norms and individual opportunities, to all the Franchises
they are integrated in the same philosophy of values and clear expectations.
McDonald's guides all the actions according :
• to organizational values as working in team,
• to feel passion for the work always offering the best of themselves,

• to be committed with the partners and with the mission of the

company,
• to be entire in each one of the actions, to be leaders.

Recommenda
No doubt McDonald's is a huge giant size organization but it also need some
tions:
improvements which are

• McDonald's must start its services for customers as well as product.

• Job enlargement and job enrichment should be applied for retention
of employees.
• There should be more than one feedback session for improvement of
performance of employees.
• Recruitment must be conducted for higher posts also to select more
skilled persons.
• There should be proper and flexible arrangements for training of
managerial level employees.
• Job enlargement and job enrichment should be applied for retention
of employees.
• There should be more than one feedback session for improvement of
performance of employees.

. 21
Human Resource Management

QUESTIONNAIRE

• What are the specific strategies used by the organization?

• What is the role of HR department in McDonald’s Pakistan?
• Is there any provision of specific laws in McDonald’s?
• How is job analysis done in organization?
• From where you recruit your employees?
• What are the internal sources of recruitment here?
• What is the specific selection process in McDonald’s?
• Do the candidates have any significant idea of the selection process?
• Do you recruit through any agency?
• On which media you generally advertise?
• Do you recruit on internet?
• Do you follow merit policy or some reference?
• Do you recruit according to seasons?
• Do you have any orientation program?
• When the training need is felt here?
• What is the different training methods adopted in McDonald’s?
• Are there any specific training courses also offered?
• How the performance of an employee is evaluated?
• What is the appraisal levels adopted?
• Is the company satisfied with the work of employees?
• How many workers working in your organizations?
• Do you give any break to your employees during working time?
• Is smoking prohibited or allowed in your organization?
• Have you equal opportunity to manager and clerical staff?
• What is your policy for employees vacations and leaves?
• Do you have any morality program in your organization?
• Is there reward for the person, who do something for organization?

. 22