HRM STRATEGY OF MCDONALD’S

(Sub. Strategic Management)

Project Submitted to

Ket’sV.G.Vaze College of Arts, Science & Commerce

Mumbai University

For the Degree of Master in Commerce

By
CHINMAY .R. JADHAV
M.COM PART 1
2936A015

Under the Guidance of

Dr.Adhir V. Ambavane
Prof. ChitraSubramania

1
 ACKNOWLEDGEMENT

Firstly, I would like to thank the University of Mumbai to provide us such a

platform to prove our creativity through this project of Strategic management

I am also very grateful to our Principal Dr. B. B. Sharma for giving us such
a great opportunity to prove our self and to show our creativity by this
project.

I am also thankful to our Co-ordinator and my project guide Prof.

AlkaKelkar and Dr. Dr. Adhir V. Ambavane for allotting me such a project
and also to guide me on the project which enhanced the quality of my project
work.

I also thank my family and friends who helped me in preparing my project

and co-operating with me during preparation of my project.

2
 DECLARATION

I hereby declare that the Project titled ‘A Study of HUMAN RESOURCE

STRATEGY OF MC DONALD’SSubmitted by me is based on actual work
carried out by me under the guidance and supervision ofDr.Adhir V. Ambavane.
The contents of project are not copied from any other source such as internet,
earlier projects, text book etc. It is further to state that this work has not been
submitted for any other degree of this or any other university.

Date: ______ CHINMAY. R. JADHAV

Place: Mumbai Roll No.2936A015

Dr. Adhir V. Ambavane Mrs. Chitra Subramanian

Guide Guide

3
 CERTIFICATE

This is to certify that the project titled ‘A Study of H.R. STRATEGY OF MC

DONALD’S is a bonafide Project work done by Mr. CHINMAY.R.JADHAV
under my guidance and supervision for the degree of Master in Commerce –
Mumbai University.

I confirm that, this project work has not been previously submitted to any other
University for examination under my supervision.

I hereby authenticate and approve this project work.

Date:

Place: Mumbai

REMARKS
Guiding Teacher:

Signature:

External Examiner:

Signature:

4
 Objectives of this project report

The perspectives of doing this project are:

 To understand the Importance of the HR field

 To study existing work life balance practices in select industry.

 To study of the employees relating to the job security and welfare facilities.

 To find out the areas where employees are not satisfied.

 To suggest some Improvements in this field.

 Finally to get the sound knowledge of the various practices and about whole HR.

5
McDonald’s

Research Methodology

The project is a consolidation of details from various sources as given below

1. Primary data:

Primary data has been collected by a field visit to McDonald’s

2. Secondary data:

The details of data collected from INTERNET (SITES)

LIMITATION OF THE STUDY

The entire study is based upon the primary data collected from the “McDonald’s

Validity of the study id depending upon the reliability of the primary data.

The entire study id carried out only for limited period.

6
McDonald’s

INDEX

SR.NO CONTENTS PAGE NO

1 HUMAN RESOURCE 9

2 HR PLANNING AND ITS ASPECTS 13

3 RECRUITMENT & SELECTION OF MCD 17

4 TRAINING & DEVELOPMENT IN MCD 24

5 PERFORMANCE APPRAISAL & METHODS IN MCD 27

6 COMPENSATION & BENEFITS IN MCD 29

7 STRESS MANAGEMENT IN MCD 32

7
McDonald’s

Human Res ource Manageme nt?

Human Resource Management is a process of bringing people & organization

together so that the goals of each are met. In short, it may be define as the art of procuring,
developing, and maintaining competent workforce to achieve the goals of an organization in an
effective and efficient manner.

It is a part of the management process which is concerned with the management of

human resources in an organization. It is a way of managing people at work, so that they give
their best to the Organization.

Human Resource is a relatively modern management term, coined in the 1960s.

Human Resource is also the name of the function within an organization charged with the overall
responsibility for implementing strategies and policies relating to the management of individuals.
This function title is often abbreviated to the initial ‘HR’.

Human Resource progressively become the more usual name for this function, in the
first instance in the United States as well as multinational corporations, reflecting the adoption of
a more quantitative as well as strategic approach to workforce management, demanded by
corporate management and the greater competitiveness for limited and highly skilled workers.

The original usage derives from political economy, economics where it was traditionally
called labor, one of four factors of production although this perspective has shifted as
consequences of further ongoing research into more strategic approaches.

Human Resource mat set strategies and developed policies, slandered, system, and
processes that implement these strategies in a whole range of areas.

8
McDonald’s

What Is The Importance Of HRM ?

Human Recourses, along with financial and material recourses, contribute to the production of
good and services in an organization. Physical and monetary resources, by themselves, can not
improve efficiency or contribute to an increased the rate of return on investment it is to the
combine a concerted effort of people that monetary or the material resources or harnessed to
achieve organizational goals.

But these efforts, attitudes and skills have to be sharpened from time to time to
optimize effectiveness of Human Resources and to enable them to meet greater challenges. This
is where Human Resource Management plays an important role. It helps an organization in
multifarious ways.

* Good Human Resources help in attracting and the retaining the best people in
organization.

* Appropriate recruitment and selection activities identify the best people for available jobs
and makes sure that they are placed in suitable position.

* Performance appraisals and training developed individual who needs skills, knowledge and
attitudes different from those the currently possess.

* Good Human Resource practice can also motivate organizational members to do

outstanding works.

9
McDonald’s

1.1 Vision:

To be the world's best quick service restaurant experience. Being the best means providing
outstanding quality, service, cleanliness and value, so that their food makes every customer in
every restaurant smile

1.2 Mission:

McDonald's mission is to be their customers' favorite place and way to eat with inspired people
who delight each customer with unmatched quality, service cleanliness and value every
time.

1.2 About McDonald’s :

1 Restaurant:

Aiming to be the world's best quick service restaurant experience, McDonald's started its
operations in Pakistan in 1998 and is a leading fast food service retailer for its valued customers.
With a strong belief in the phrase when it's green it's growing, McDonald's Pakistan is growing
with the focus to provide friendly and quick service restaurant experience to their
customers. Currently McDonald's Pakistan is operating in various cities of Pakistan I-e Lahore,
Faisalabad, Karachi Hyderabad, and Islamabad & Rawalpindi with the plans to cover the
customer base in various other cities of the country.

McDonald's Pakistan is a part of the Lakson Group of Companies, with a regional office in
Lahore and the main Head Office in Karachi. They are operating with a network of restaurants to
reach our customers for providing friendly services in all different regions of the country/

McDonald’s

10
 :

Formed in 1954, McDonald's brand is the leading global foodservice retailer with more than
30,000 local restaurants serving nearly 50 million people in more than 120 countries each day. Its
rich history began with the founder Ray Kroc's vision and his commitment, transformed in their
talented executives, and will keep the shine on McDonald's arches for years to come.

Core Values of McDonald’s:

 Integrity and Honesty

 Open, Respectful and Supportive
 Prepared to take challenges and see them through
 Deep regards for Customers, Business partners and employees
 Quality in Product

2 Departments of the Organization:

 Finance Department
 Human Resource Management
 Marketing Department
 Operation Department
 IT Department

Quality:

McDonald’s is very strict about the quality of services they provide. They don’t compromise
anything over quality. Quality is considered to be one of
their foremost objectives. They want 100 % quality of service. Quality is
checked on for:

 High standard of food, services provided to the customers.

 Communication skills i.e. English speaking skills
 Appearance and grooming
 Ability to communicate with guests and handle versatile situations.

McDonald’s

11
HR Planning & Methods of Job
Analysis & Evaluation

McDonald’s

12
 HR Department of McDonald’s

HR Introduction:
At McDonald's Pakistan, their people are their most important asset. They provide the best
employment experience for their employees in order for McDonald's Pakistan to achieve their
goal of providing their valued customers with the world's best quick-service restaurant
experience. They strive to recruit the best, hire the best, and provide the best place to work
The commitment to their employees is shaped on the simple fact "We value you, your growth and
your contributions" and this is they strive to achieve through their actions every day.

2.2 HR Planning:

HR planning’s purpose is to determine what HRM requirements exist for current & future
supplies & demands of workers. To realize the McDonald's service vision, the organization
believes in strengthening their team and ensures to deliver the right skills and knowledge to the
right person for getting the right job done. The strength, for making the strong team players
to shine under the Golden Arches lies in the People Practice and Development Program.

HR practices:

The field of HRM comes into existence in the result of these questions:

 How did people come to be employees in their organization?

 How were they selected?
 Why do they come to work on regular basis?
 How do they know what to do on their jobs?
 How does management know if the employees are performing adequately?
 And if they are not, what can be done about it?
 Will today employees be adequately prepared for the technologically advanced
work the organization will require of them in the years ahead?
 What is the compensation process?

The HR department of McDonald’s fulfills all the requirement of these questions in the true
sense of the meaning. As HR department deals with people McDonald’s strongly
believe in well being of people because it is a known quotation that

“If you take over the liabilities of your employees they will take yours”

13
 HR Functions Of McDonald’s:

HR department of McDonald’s Pakistan does certain functions

 Planning
 Recruitment & selection
 Training
 Administration
 Company manuals
 Performance management
 Decision procedures
 Define company’s policy


2.3 Job Analysis Method:

Job analysis is the procedure of determining the duties and skills required for a job and the kind of
person who should hired for it Analyzing the job in McDonald’s is done by the Human Resource
Department. They develop the job description related to different departments regarding their
dutiesresponsibilities, reporting relationships, working conditions and supervisory
responsibilities. Once when the job description is prepared, restructuring in the job is
done based on the observations of the seniors.

In McDonald’s job Analysis is done on the basis of Interviews .

2.4 Job Evaluation Method:

Job Evaluation means making decision about the wages and salaries of the employees
on the basis of job analysis it can also be called as compensation. In McDonald There are two
types of working hour’s employees:

14
  Part Time Employees
 FullTimeEmployees

In McDonald’s they have predefined standards on which employees are

awarded on the basis of their skill, knowledge and experience. The Full Time
Working Employees are given salary on monthly basis were as the part time
employees are given salary on the basis of the total hours they have worked

15
 Recruitment & Selection

McDonald’s

16
 Recruitment and Selection Process

3.1 Recruitment:

Recruitment is a phase that immediate precedes selection. Its purpose is to pave the way of the
selection process by producing ideally, the smallest number if candidates who appear to be
capable. The objective of recruitment procedure is to attract suitable candidates in order to
produce a short list for future investigation in the selection process.

3.2 Recruitment process:

In McDonald’s the recruiting and hiring process for selecting starts from the applications
submitted by the individual. We provide their CVs along with the applications. These
applications and CVs are screened out on the basis of:

 Merit;
 Institute; and
 Experience etc.

After this, The Candidates who meet the criteria are selected for the further process.
Then the H.R Department lists out the salient features of the CVs (only the accepted CVs). Then
the H.R. Manager takes a test based on:

 English comprehension
 Basic mathematics
 I.Q. and
 Some questions about the particular job, for which the
applicants have applied.
In McDonald’s Recruitment is done on the demand of the Organization. There are
two types of Recruitment is done

 Internal Recruitment

17
  External Recruitment

3.2.1 Internal Recruitment:

McDonald’s do internal recruiting i.e. they select the candidates from the inside by considering
a specific number of internal potential candidates who have applied for the job on the
basis of their past performances and qualifications for the required job. Any employee at
a reasonable post can submit his /her application for the job. The management has all the
information relating to the person’s record about the job he/she is currently performing. On yearly
basis, the summary of the employees is maintained in the form of records, which gives the
organization maximum chance in selecting the potential employees as the heads of the
departments. The HR manager and the Head Manager of the specific department
interview the selected employees.

3.2.2 External Recruitment:

McDonald’s often go for the external recruitment they mostly try to go for the internal
recruitment or internal promotion of the employee to the high post but in case an employee
leaves the organization They Organization have a bulk of application received through
the website
The organization advertise through newspapers or web.

18
McDonald’s

Criteria Required For Employment:

The qualifications required for employment in McDonald’s are as follows:

 Appearance and grooming

 Professional Qualifications
 Experience and knowledge
 Communication skill in English
 Leadership skills
 Potential for growth
 Reasoning and Judgment
 Computer skills

3.3 Selection Process:

With the pool of applicants, the next step is to select the right person for the job this usually
means whittling down the applicant pool by using the screening tools In McDonald the selection
process involves the following steps:

 Initial Screening
 Employment Test
 Background Investigation
 Medical Examination
 Permanent job offer

19
McDonald’s

Employment Tests:
Every big organization in the world uses a test for the hiring of people, from inside as well
as outside. These companies use many types of tests to judge the people we are hiring and to
have utmost guarantee that the people we are hiring are perfect from every point of view. These
test judge the to
McDonald’s take tests as far as their candidates are concerned to check there full abilities. The
tests are of different nature like:

Test Of Cognitive Abilities

These kind of tests include IQ tests, general and intellectual abilities,
verbal fluency, vocabulary etc. These tests are generally conducted while
recruiting executives and supervisors.

Motor And Physical Ability Tests

These tests include checking the performance of the employee usually
working on the machines in operation department to check their reflexes
and while working at their work place.

Measuring Personality Interests

Involves taking into consideration the personal interests and motivations of
the person in his field.

Candidate’s ratio:

Within the pool of candidates, if the demand is for 1 employee then the ratio for selecting is the
employees is 1:5 and if the demand is for 2 employees then the ratio becomes 2:10 and so on.

McDonald’s

20
Interviews:

When the managers make the selection the phase of interviewing the employee comes. The
interview is taken from the employees in two ways i.e.

Top level interviews

Low-level interviews

In top-level interviews the General and Division Manager of McDonald’s takes the interview
of candidates for the Executive post.
Heads of the departments takes the interviews of candidates for the Associate heads,
officers, managers, and assistant manager’s posts. After the selection is made the General
Manager approves the candidates.

Type of Interviews:

Paneled interviews are taken from the candidates and the panel consists of the
HR manager and the head of the particular department for the interview is being conducted.
If an interview for an important post has to be done for a function head then the GM himself
indulges into it and performs a combined interview.

Background Investigation:

Once an employee is appointed the investigations and reference checks are done by the HR
manager. In McDonald’s, reference checking is referred to as revising the ‘Job History’ which
contains

 Job applied for i.e. the experience of the employee for the job.
 Relevant qualifications.
 Salary

After Conducing the interview and all relevant investigation they employee is called to join the

21
job.

Total employees in McDonald’s are more than 1300 plus. The policy of McDonald’s is to give
females full chance to do the job. There are 3 shifts operated in McDonald’s

 Morning Shift
 Evening Shift
 Night Shift

22
 Training & Development

McDonald’s

23
 Training and Development

4.1 Orientation:

Orientation of the new employee is carried out according to priority of heads.

Firstly the employee is formally told about what kind of outfit to wear on work. Then he/ she are
provided with the orientation kit. The employee has to spend 15 – 20 days in different
departments under one specific department like if an employee is appointed in the HR
department then he/she has to spend 20 days in different sub departments under the HR
Department like HR development department, HR administration Department, Hr training
Department etc. The head of the department specify the objectives to be carried out Employees
get the evaluation time of 6 months to prove their skills and knowledge about the
job being done. And after 6 months they are given the appointment letters as permanent
employees.

4.2 Training:

The employees are given training in the “Training Room” in the form of lectures. Firstly the
employee is given the on-job training and then he/she is given the actual task to perform.
McDonald’s arranges summer crash courses and wrap section for the employees. Job Rotation
is done within the specific departments and not outside the departments.

4.3 Development:

McDonald’s is a large organization with many employees working in different departments of

the company. Every year the company hires many people for it executive as well as managerial
posts. In McDonald’s there are different types of development plans for management for e-g

MDP 1, MDP 2 , MDP 3 and CLDC (Crew Leader Development

Course).

There are also development programs for the low level jobs for enhancing the skills of the
employees

24
 Career Development and Fair Treatment:

McDonald’s provides facilities to employees for career development during their employment.
Different training courses are offered to their employees such as summer crash courses
arranged. Transfers of the employees are carried out with the consent of the employees. The
communication of employees is directly with their head of the department. There is a vital
concept of two-way communication. At McDonald's, employment is at will. This means that
employees are free to terminate their employment at any time, for any reason, with or without
cause, and McDonald's retains the same rights. . The Management career in McDonald's
Operations starts from the position of Trainee Manager, and follow the path like the one outlined
below.

 Trainee Manager
 Second Assistant Manager
 First Assistant Manager
 Restaurant Manager
 Beyond Manager

McDonald’s

25
 Performance Appraisal Process
& Methods

McDonald’s

26
 Performance Appraisal

5.1 Performance Appraisal:

Performance Appraisal is a structured formal interaction between a subordinate and supervisor

,that usually takes the form of a periodic interview , in which the work performance of the
subordinate is examined and discussed, with a view to identify weakness and strength as well as
opportunities for improvement and skill development.

5.1.1 Performance Appraisal Method:

Employees in McDonald’s have a race to win based on their efforts. The

employees do their best to give the best performance through their skills and knowledge. A
kind of competition is among the employees to become the best employee. The appraisal
methods used are of two types, i.e.

 Graphical Rating Scale

 360 degree Feedback
Appraisal interview is taken by the department head only. Progress report is in the hands of the
department head. Yearly appraisals of employees are done with in June-July. Appraisals are done
yearly but they can also be done at any time of the year by the department head on the basis of
employee’s marvelous performance.

Through the graphical rating scale the head of the department rate the person according to the
performance of its work, skill, knowledge, experience and also on the performance in the training
programs and after the assessment according to the rating scale rate the employee is appraised.

Upward feedback Is done by 360 degrees i.e. information is collected “all around” an
employee from his or her supervisors, subordinates, peers and customers. This term is
also known as “multi source assessment”. Subordinates can appraise their seniors. With the help
of the
“Employee Satisfaction Survey” the heads get to know which employee is giving what type of
output. Raise in salary is done by 10%and if performance is also counted then 20% increment is
given at any time of the year.

McDonald’s

27
Compensation and Benefits

28
McDonald’s

Compensation and Benefits

6.1 Compensation:

Compensation means all forms of pay or rewards going to employee and arising from their
employment .It has two main components direct financial payments (wages, salaries,
commission, and bonuses). And indirect payments (financial benefits like employer – paid
insurance and vacations).

6.2 Employee Benefits:

McDonald's benefits program is designed to attract, energize, reward and retain talented people
who will produce superior business results and enhance their leadership position. They
recognize the importance of a strong benefits program.

People Promise:
People Promise is a statement of commitment to every person in the McDonald's system. It is
how they remind people what they can expect and how high their goal is:

“To be the best employer in each community around the world”

McDonald's and its independent owner/operators have made a commitment to their
employees that they strive to achieve with their actions every day. And to make sure they deliver
on this promise, they have in place five people principles. These people principles reflect
McDonald's values and describe the culture they embrace.

Respect and Recognition:

Managers treat employees, as they would want to be treated. Employees are respected and
valued. Employees are recognized formally for good work performance, extra effort,
and teamwork and customer service.

29
McDonald’s

Values and Leadership Behaviors:

All of employees act in the best interest of the C ompany. They communicate openly,
listening for understanding and valuing diverse opinions. They accept personal accountability.
They coach and learn.

Competitive Pay and Benefits:

Pay is at or above local market. Employees value their pay and benefits.

Learning, Development and Personal Growth:

Employees receive work experience that teaches skills and values that last a lifetime.
Employees are provided the tools they need to develop personally and professionally.

Resources to Get the Job Done:

Employees have the resources they need to serve the customer. Restaurants are adequately staffed
to allow for a good customer experience as well as to provide schedule flexibility, work-life
balance and time for training

6.2.1 Benefit Categories:

For McDonald's Corporation employees at corporate, division and region offices, many benefits
those are:

 Medical and hospital facilities

 Free furnishing on having new home (managerial level)
 Provident fund ( ESOP)
 Company vehicles are provided to employees
 Choice to get new car after five years
 Umrah packages are offered to employees
 Leasing facilities are provided to buy cars, motorbikes, etc
 Picnics are arranged once every quarter

McDonald’s offer long-term benefits to its employees, like giving

them multinational visas, etc.

30
 Stress Management &
Negotiation Techniques

McDonald’s

31
 Stress Management

7.1 Job Stress:

Job stress is a chronic disease caused by conditions in the workplace that

negatively affect an individual's performance and/or overall well-being of his body and mind

Organizational managers are interested in maintaining a low level of job stress for good reasons:
high level of stress a result in low productivity, increased absenteeism and turnover,
and an assortment of other employee problems including alcoholism, drug abuse and a
host of cardiovascular problems. Job Related Stress has been associated with a vast array of
diseases, such as coronary heart disease, hypertension, peptic ulcers, colitis and
variouspsychological problems including anxiety and depression

7.1.1 Causes of Job Stress:

The causes of Job Stress are:

 Role Conflict
 Work overload
 Job Insecurity
 High Demand for performance
 Technology

At McDonald’s Job Stress is handled by conducting counseling sections in which the Counselor
identifies the flaw of the employees. Their objective is if people are delivering and if they have
any problem they solve it through counseling

McDonald’s

32
7.2 Negotiation Techniques:

Negotiation Techniques are the ways the employer communicates its expectation and goals of the
organization to the employees. At McDonald the expectations of the employer are:

 On Time,
 Neat and Clean
 Skills and Training
 Standards
 Teamwork
 Clean Spotless... Tidy... Sparkling. Customers expect every
 McDonald's will be clean.
 Welcomed Guest crewmembers make each customer feel like a
welcomed guest.
 Service depends on crewmembers to deliver accurate and friendly
service with a smile.

To communicate these expectations Crew meeting are conducted

33
McDonald’

Critical Evaluation and Recommendations

After critically evaluating the HR Functions of McDonald’s we recommend the

following suggestions:

Job Analysis information should be collected through structured

Questionnaire because it is more suitable method to collect job analysis
information in an organization like McDonald’s because it is inexpensive
and efficient way to obtain information from a large number of employees.

McDonald is using “job position” source of internal recruitment but it

should also use Rehiring as a source of internal recruitment because former
employees are known quantities, and already familiar with the
company’s culture, style, and ways of doing things. This will also reduce the
training expenses.

McDonald’s should use performance stimulation test for managerial

positions because it is effective method for selecting and promoting
managerial position .Although it is expensive but very effective method.

McDonald’s

34
35