COMPENSATION MANAGEMENT AT McDonald

INTRODUCTION

The McDonald’s Corporation is one of the most successful global restaurant

chains around the world. They have used effective management and global expansion
strategies to enter new markets and gain a share of the foreign fast food
market.McDonald's is not just a burger company serving people; they are a people
company serving burgers. McDonald’s strategy of standardizing their products on its
preparation, techniques of presentation along with the adaptation strategy has created
a difference in McDonald’s as compared to that of its competitors.

McDonald

McDonald's success is built on the highest standards of quality, service and

cleanliness delivered to customers in each of its restaurants. Well-trained crew and
managers are the first step to achieving these standards. It is company policy to
provide career opportunities that allow employees to develop their full potential.  
McDonald's restaurant is structured as an independent business, with restaurant
management responsible for accounting, operations, inventory control, community
relations, training and human resources.

Vision:

"McDonald's vision is to be the world's best quick service restaurant

experience. Being the best means providing outstanding quality, service, cleanliness,
and value, so that we make every customer in every restaurant smile."

Mission:
• Be the best employer for our people in each community around the world
• Deliver operational excellence to our customers in each of our restaurants; and
• Achieve enduring profitable growth by expanding the brand and leveraging the
strengths of the McDonald's system through innovation and technology.
 McDonald’s began its journey in India in October 1996.
The average McDonald's restaurant employs as many as 40 people - from
crew to the restaurant manager. As of today, they employ close to 2,500 people in
India.McDonald’s has over 30,000 local restaurants in more than 120 countries 70
percent of our restaurants worldwide are owned and operated by independent, local
businessmen and businesswomen.

McDonald's recruit people through various means including advertisements,

campus interviews, people referrals, placement agencies, Internet etc. McDonald's
Training is a combination of on-floor and classroom training provided through our
Learning and Development Team with exposure to the various aspects of the
business.The applicant attends a first stage interview and is offered "On Job
Experience" (OJE). This is a 2-day assessment in a restaurant. Successful completion
at OJE will lead to a final interview, after which the manager decides whether or not
to hire the applicant
MCDONALDS ORGANISATION STRUCTURE:

McDonald’s Wages and Salary Administration:

McDonald’s is an equal opportunity employer. Rates of pay and conditions of

employment are established and granted without regard to race, color, religion, age,
gender, national origin, disability, or ancestry. However Average mcdonald's worker
salaries can vary greatly due to company, location, industry, experience and benefits

Most employees are paid by the hour and are referred to as 'crew members'.
Other “hourly-paid employees” who work alongside them include Training Squad
Members, Dining Area Host/esses, Party Entertainers, Administrative Assistants,
Security Co-ordinators, Maintenance Staff, Night Closers, Floor Managers and Shift
Running Floor Managers. These employees carry out more specific job functions and
to ensure the restaurant runs efficiently.

The remaining restaurant-based employees are salaried managers. There are

two types of managers each has a wage that reflect their responsibilities

“Swing”
“Salary”
 The manager with most seniority present during the working hours is
responsible for the entire store., Swing managers may represent the store in absence
of a Salary manager including work hour scheduling and task assignment. Only
Salary managers may distribute pay or deal with an employee’s pay .

Entry level positions (part and full time) start at minimum wage with
possibility of a raise every six months.If, at entry level, the candidate elects a “work
any time” work schedule.

Pay and Rewards

McDonald pay and rewards program follows a "pay for performance"
philosophy: The better employee results, the greater pay opportunities.

Base Pay

McDonald's maintains the competitiveness of base pay through an annual

review of both external market data and internal peer data. McDonald's has a
broadbanding compensation system. Broadbanding allows for flexibility in terms of
pay, movement and growth.

Monetary Incentives:
 The McDonald's Corporation Incentive Plan was established November 1,
1993.

The Plan shall be administered by the Compensation Committee of the Board

of Directors of the Company (the "Committee").

Incentive Pay

Incentive pay provides employees with the opportunity to earn competitive

total compensation when performance meets and exceeds goals. For McDonald's
corporate, division and region offices, the Target Incentive Plan (TIP) links employee
performance with the performance of the business they support.

TIP pays a bonus on top of employees' base salaries based on business

performance and their individual performance.

Long Term Incentives

Long term incentives are granted to eligible employees to both reward and
retain key employees who have shown sustained performance and can impact long-
term value creation at McDonald's.

Non- Monetary Incentives

McDonald's encourages employees through many effective ways. Except the
base pay, McDonald's establish competitive wage and promotion programs such as
the 'Employee of the Month.'

Recognition Programs

Recognition programs are designed to reward and recognize strong

performers. For McDonald's corporate, division and region offices, these include the
Presidents' Award and the Circle of Excellence Award .

Company Car Program

Company car program provides eligible employees with a company car for
both business and personal use. If eligible, employees can choose from a variety of
vehicles, depending on their level within the company. The program covers the cost
of insurance, maintenance and repair.

McDonald's
Employee Benefits
The following information highlights McDonald's benefits for Staff
e.g., home office, division or region office.McDonald's benefits program is designed
to attract, retain and engage talented people who will deliver strong performance and
help McDonald's to achieve their business goals and objectives.

Health and Protection

McDonald's offers three Preferred Provider Organization (PPO) medical plan

options McDonald's medical plans cover preventive care, including annual physical
exams for employees and their family members.

♥ Vision Supplement - Employees enrolled in McDonald's vision supplement

plan, are provided coverage for eyeglasses and contact lenses, and discounts
on Lasik laser vision correction surgery.
♥ Dental - Dental plan allows employees to see the dentist of their choice and
covers a wide range of dental services.
♥ Short and long-term disability -. Short term disability provides benefits if an
employee cannot work for more than 10 consecutive days. Long term
disability coverage replaces 60% of the employee's monthly base salary while
he or she is disabled.
♥ Employee and dependent life insurance - McDonald's provides basic life
insurance of two times the employee's base salary at no cost to the employee.
In addition, employees can purchase additional life insurance coverage for
themselves
♥ Accidental death and dismemberment insurance - AD&D covers
employees if they die or are seriously injured in an accident. McDonald's
provides AD&D coverage equal to two times the employee's base salary.
 ♥ Travel and business travel accident insurance - McDonald's provides travel
accident coverage of two times an employee's base salary at no cost to
employees for employees traveling on company business. Depending on the
employee's position, this coverage amount may vary.

Investing in Future

Taking care of employees current and future financial needs can be

challenging. That's why McDonald's offer the following savings and money
management programs:

Profit Sharing and Savings Plan

Profit Sharing and Savings Plan lets employees save from 1% to 50% of their
pay on a tax-deferred basis in the 401(k) feature of the plan. McDonald's matches
eligible employees' contributions with $3 for each $1 of the first 1% of pay they
contribute, and $1 for each $1 on the next 4% they contribute. Eligible employees
may also receive a discretionary profit sharing match of 0% to 4% based on the first
1% of pay they contribute. Employees are always 100% vested in their contributions
and the company matches.

Mc$ave

Mc$ave is a special money market fund for McDonald's employees. Money

put into Mc$ave is invested in the Prime Reserve Fund managed by T. Rowe Price.

MCDirect Shares

MCDirect Shares is a direct stock purchase plan that lets employees further
build ownership and reinvest dividends in the company.

Credit Union

All McDonald's employees can take advantage of a full range of services

available through the Corporate America Family Credit Union.
Financial Planning Services

This program gives employees access to professional financial planning

services through Ameriprise Financial.

Other Benefits:

Balancing work with life outside of it can be challenging. McDonald's

believes that it's important to strike the right balance. That's why McDonald's offer
many programs designed to help their employees maintain the right balance.

Vacation, Holidays

McDonald's offers paid vacation for corporate, region and division office
employees as well as Restaurant Management employees. The amount of vacation
time employees have available depends on how long they have worked at
McDonald's. In addition, McDonald's offers nine paid holidays (less for part-time
workers) for eligible employees.

Anniversary Splash

Eligible employees get an extra week of paid time off in the year when they
reach an anniversary “on the fives” – their five, fifteen, twenty-five or thirty-five year
anniversary.

Sabbatical Program

Eligible employees can take an eight-week sabbatical for every 10 years of

full-time continuous service with the company.

Short Fridays

From mid-May through mid-September, McDonald's corporate, division and

region offices' work hours begin a half hour early in order to end early (1:00) on
Fridays.
Leave of Absence

Employees may be faced with difficult situations that require them to take
time from work, McDonald's provides a leave of absence program with specific
policies regarding types of leave such as family and medical leave, adoption leave
and funeral leave.

Alternative Work Approach

To help corporate, division and regional office employees better balance their
work and personal life, they may be able to arrange an Alternative Work Approach.
There are two full-time options (flex time and compressed work week) and two part-
time options (part-time schedule and job sharing).

Adoption Assistance

McDonald's adoption assistance program helps employees afford the costs

associated with adopting a child under age 18. Employees are reimbursed for 80% of
eligible expenses, up to $2,500 per child.

Child Care

McDonald's has agreements with three national child care providers -

Childtime Learning Center, Knowledge Learning Corporation and La Petite Academy
- for a 10% discount on tuition for employees. (They do not offer discounted rates for
children under age 2.)

Educational Assistance

McDonald's educational assistance program helps support eligible employees

in their efforts to further their education. Employees can get reimbursed for 90% of
eligible expenses for grades "C" and above.

Matching Gift Program

Matching gifts program is designed to encourage employee support of not-for-

profit organizations. With this program, McDonald's matches employee gifts to
qualified educational, civic, cultural, health and youth organizations with one dollar
for every dollar contribute by the employee.

Employee Resource Connection

This program gives eligible employees access to a broad array of services that
help them manage many facets of their life outside the office, including: Concierge
services, financial services, legal services and counseling services.

International Fitness Club Network

Employees can receive discounts on new membership or other rewards for

existing membership at participating clubs nationwide, plus discounts on home fitness
equipment, and online health and fitness information.

Auto and Home Insurance Program

McDonald's employees can purchase auto and home insurance through the
MetLife Auto and Home Insurance Program. The MetLife Auto and Home Insurance
Program offers a McDonald's group rate plus other advantages.

BeyondWork

BeyondWork ,hoping to attract more young adults and professionals, the chain
is also adding amenities like Internet access and rental iPods.

Facilities

Crew room
This room is provided for the employee for recreation and rest during the
break time. The employee can study, listen to music, and get trained in this room
Breaks
It is not easy to maintain quality, service, and cleanliness. It take hard work
and hustle. To keep energy level high, all the crew member working above five
consecutive hour are eligible for an unpaid break of an hour.
Employee Meal
One of the best things about working for McDonald’s is for food. Employees
can enjoy quality nutritious food at world standard hygiene levels. It is free to
managers and crew. All the meals consumed must be recorded and consumed in the
restaurants itself.
Locker Facility
Lockers are available for the employees use at the restaurants for keeping the
personal belongings in a safe and secure place during the shift.
Other Facilities
In addition to the above facilities the employee also enjoys with the team
member during the yearly store outing and various inter-store activities arranged
system-wise and patchwise. These activities are fun and provide opportunity to have a
good time and know fellow employees better.

Retirement Benefits
Employee provident fund
All the employee are eligible for the provident fund scheme as per the
company’s rule. Provident fund is a retire benefit provided to every employee of
McDonald’s. Every employee contribute12% of his basic salary to his/her PF
account. There is an equal contribution by McDonald’s employer. However 8.33% of
the employer’s contribution is deposited to the Employee’s Pension Fund and the rest
goes to the Provident Fund.

Employee State Insurance

All the crew member are eligible for the Employee State Insurance as per the
ESI rule. This benefit is provided to the employee for free medical treatment in case
of sickness, maternity, and employment injury. The employee contribute 1.75% of his
gross salary where as the employer contributes 4.75% .

Bonus:
Depending upon the law applicable at the relevant time the employee will
receive an amount of 8.33%of the basic salary earned during the financial year.
Gratuity
All the full time employee who have completed 5 years of continuous
employment with the company are eligible for gratuity. The employee will receive an
amount of 15 days basic salary for every week worked. The amount is given at the
time of separation or retirement from the company.

Workshops:

McDonald’s Intercultural Learning Practice is uniquely designed to promote

diversity and create a more inclusive environment.

Some workshops McDonald’s offers its employees are as follows:

• Intercultural Learning Lab

• Asian Career Development
• Black Career Development
• Hispanic Career Development
• Lesbian Gay Career Development
• Women’s Career Development

CONCLUSION:
McDonald's believes that the success of the restaurants and the company is
achieved through the people it employs. Their policies are based on the philosophy of
our founder Ray Kroc who believed that, “If you take care of your people, the
business takes care of itself”.
Thus the company aims to recruit the best people and to retain them by
offering various benefits and facilities.
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