Words: 898
Effect Utilization of Human Resource Management For a company, Human Resource [HR] is the most important asset it can have. It is only this asset whose value increases with time while others depreciate (Mathur, 2002). Mathis and Jackson (2003, pp. 4) defines Human Resource Management [HRM] as ‘The design of formal systems in an organization to ensure effective and efficient use of human talent to accomplish organizational goals’. This is further explained by Newman and Hogetts (2003) as functions of HR i. e. employment, training and development, compensation and benefits and human resource planning.
McDonald’s, a fast food company has nearly 32,000 restaurants in about a 120 countries with a workforce of 1. 6 million. HR at McDonald’s is an independent department performing functions like policy making, job analysis, recruitment and selection, training and development, performance appraisal, compensation and benefits, In policy making, HR department establishes major policies which take into their ambit the place and importance of people. McDonald’s conducts regular job analysis to hire new employee at a yearly or quarterly basis.
In recruitment and selection it uses internal and external recruitment. In Internal recruitment they either selecting candidates from inside on the basis of their past performance and by putting up placement adds on their website and notice boards called job positioning or succession planning i. e. hiring senior employees on the basis of their performance. When it comes to training and development, McDonald’s has an extensive training program which using on-job-training, lectures, job rotation and audio-visual based trainings.
Performance appraisal at McDonald’s is done through the graphic rating scale which evaluates an employee on traits such as communication, personal effectiveness/efficiency, teamwork, productivity, quality of work and reliability. It also plans and forecasts personnel needs using “trend analysis” in which managers study past employee needs of its staff to predict future needs. In addition it offers incentives and benefits, like medical aid, pension/provident fund, disability cover, funeral cover and accidental death and dismemberment.
McDonald’s also has a program called McMasters which indentifies, recruits, trains and retain workers which are 55 years of age or more. In a recent report (McDonald’s Worldwide Corporate Responsibility Report, 2008) McDonald’s states that while choosing their suppliers, they consider those who share its values. The supply chain is thus based on rigorous standards related to quality, safety and sustainability performance. Furthermore it explains the working of its supply chain.
It starts with indirect suppliers to direct supplies and then finally to the restaurant. The indirect supply chain involves primary processing plants and production plants which operates facilities such as grain mills and farms and ranches which raise cattle and other ingredients. The direct suppliers include distribution centers which coordinate purchasing and distribution to restaurants and final processing facilities which produces finished products like meat patties, buns and beverages. The final receiver is the restaurant which then packages it together.
McDonald’s strengths to its credit are that it’s a leader in quick service sandwich industry and has the strongest international presence with highest sales worldwide. Further, brand recognition, easily recognizable products and franchise business model are also its strengths. McDonald’s with its range of deals caters to children aged 12 and below more than its competitors. It is a community oriented, socially responsible company. They easily adapt to the local culture. The weaknesses of McDonald’s would be its high employee turnover and continues struggle in offering value priced items and expensive items.
Opportunities can be identified in the introduction of a healthy burger, upscale restaurant settings, and introduction of breakfast menus as it operates around the clock. The threats faced by McDonald’s can be identified as competition from various industries, introduction of low-priced meals by competitors and increasing health consciousness amongst consumers. Jitendra (1999) explains that resource management starts with the assessment of required resources and ends with the delivery of added value and satisfaction.
The resources may be financial, inventory, human, production and information technology resources, enabling the organization in delivering its product. McDonald’s uses e-procurement, resulting in 85% cut in costs. A challenge that McDonald’s face is its sustainable supply chain as it does not directly deal with many parts of their extensive supply chain. It has gone environment friendly and aims at influencing all its suppliers likewise which is tough. In HRM, it faces the problem of employee turnover, ultimately increasing investment on training, resulting in greater investment on employees.
Since it has been there for quite some time, all of its practices are time-tested and proven. HR used functions as identified are effectively in McDonald’s and the role it performs shows it strength, evident in the HR Excellence Award 2006, 2007 and 2009. It works on the maxim, “think global, act local. ” The analysis shows that McDonald’s is a very strong company. If it works on the challenges identified above, it will strengthen its position manifolds. References Jitendra, M. D. , 1999. Resource management. Delhi: Deminant Publishers and Distributors.
Worldwide Corporate Responsibility Online Report: The Values we Bring to the Table, 2009. McDonald’s Worldwide Corporate Responsibility Report [online] 2008 Available at: <http://www. mcdonalds. at/presse/maps/McDCSR. pdf> [Accessed June 1, 2011]. Mathis, R. L. and Jackson, J. H. , 2003. Human resource management. 10th ed. Southwestern College Publishing. Mathur, B. L. , 2002. Human resource management. New Delhi: Mohit Publication. Newman, D. R. and Hodgetts, R. M. , 2003. Human resource management: a customer-oriented ppproach. Prentice Hall International, Inc.