Developing People and Organisations Assignment 1Lewis Hughes 153679 This assignment will look at how organisational development has improved overall organisational effectiveness at McDonald’s. According to CIPD (2017), organisational development is a term that is defined as “planned and systematic approach to enabling sustained organisation performance through the involvement of its people”.As written by CIPD (2015) an element that has forced a cultural change at McDonald’s in the past 5 years has been the transition from a business owned model, to one where 70% of restaurants are owned by franchisees. This transition from a business owned model to largely franchisee owned model has seen the need for McDonald’s to reevaluate their approach to organisational development in an attempt to maintain their core values. Mark Reilly, Head of Corporate Training at Mcdonald’s UK said:”..
.as a brand we continue to change and evolve. We’re coming out of recession, so we need to make sure we’re retaining the customers and market share that we’ve gained from our competitors.
We need to make sure we’re focusing on customer experience, and that comes down to our people and their behaviours, which is where training becomes really important.”With 70% of McDonald’s restaurants in the UK alone now run by franchisees, the company faces the challenge of implementing and maintaining a customer-centric culture across an infrastructure that is now largely franchise based. As said by Reilly, and reported in Customer Contact Week (2016), McDonald’s ambition of continued growth relies heavily on providing a great customer experience. The company set about attempting to achieve this by introducing a culture that promoted high levels of employee engagement across all of their restaurants.
Organisations have shown that happy, engaged and empowered employees results in enhanced customer experiences. In turn, this can yield better results for business, including improved financial returns, better products and service and a high quality of working life for employees (Cantor, B. 2016) To achieve engagement, McDonald’s implement a standardised approach to personal development across all of their restaurants. This approach enables all organisational development activities eventually relate directly to customer satisfaction and employee engagement.
(CIPD, 2015)When asked to discuss the company’s approach to employee engagement, UK VP of people Jez Longhorn said:”Employee engagement is integral to our business plan and plays a vital role in our overarching strategy. When employee motivation and engagement are considered a business priority and have buy in from everyone within the organisation, including the senior management team, they play a key part in perfecting a successful ‘business as usual’ standard. A more engaged workforce means a more motivated workforce who are geared to deliver first class customer experience, create happy customers and help us build overall business performance.” (Great Place to Work, 2013)This statement highlights McDonald’s commitment to ensuring employee engagement throughout their organisation. They have attempted to encourage and promote employee engagement through a number of key organisational development interventions. One of the key interventions that contributes to employee engagement is organisational culture.
A company that has a strong culture has a very clear way in which it does things. Employees understand what is required of them and they will act in line with the core values of the organisation. One of the advantages of a strong culture is that staff intrinsically understand what is accepted in the organisation.
They understand “the way things are done around here” (Riley, J. 2014) According to Mullins (2007), McDonald’s organisational culture, as categorised by Deal and Kennedy, is a work hard/play hard culture. This is a culture that encourages employees to take few risks but receive feedback quickly. Because of this, employees are able to learn from their actions on the job, and this enables them to provide customers with the correct level of service.
For example, if a customer’s meal is not satisfactory, often the employee responsible will receive feedback within a short period of time. McDonald’s encourage customers to provide feedback via instore feedback forms to constantly improve the service offered (Thompson, A. 2016). Making low risk decisions may allow employees to focus on their task and perform to their highest capability. However, Mullins (2007) goes on to write that although a lot of work gets done in a work hard/play hard culture, this high volume can often be at the expense of quality. In this type of organisational culture, it could be suggested that’s possible for employees to become comfortable in their roles and ultimately the quality of the product suffers. The employee is primarily concerned in the completion of the task. Kotter and Heskett (1992) found that companies who managed their cultures effectively saw an increase in revenue of 682% versus 166% for companies that did not manage their organisational culture well.
According to Panmore (2017), the organisational culture at McDonalds places emphasis on efficiency and human resource development. The four key pillars of McDonald’s culture include: People-centricityIndividual learningOrganizational learningDiversity and inclusion(McDonald’s, 2015) People-CentricityMcDonald’s organisational culture gives priority to need and development of its employees. The importance of supporting employees is emphasised by McDonald’s Core Values and Standards of Business Conduct. McDonald’s organisational culture encourages employees to engage with members of management to help streamline procedures and processes.
McDonald’s believe in investing in their employees to help them meet their potential and progress in their careers. McDonald’s invest in excess of £36 million in staff development every year and their training approach has been recognised by multiple employment experts McDonald’s have been ranked as one of the best companies to work for in the Sunday Times Best Big Companies To Work For list. (McDonalds, 2015)Individual Learning Lifelong employee learning is one of the highlights of McDonald’s organisational culture. They believe that employee learning encourages productivity, quality and effectiveness in their roles. To support individual learning, McDonald’s offer learning and development opportunities via “Hamburger University”, internships at head office and leadership development programs.
These activities contribute towards McDonald’s help to support a culture that encourages learning and development. In an attempt to attract high potential employees, McDonald’s have invested in offering A-level equivalent qualifications. The in-house training programs are approved by the QCA. The investment, which shows McDonald’s dedication to learning and development, had already attracted 2,500 applicant within its first six months (Telegraph, 2009) A lot of the training takes place on-the-job in restaurants and other elements are studied online. Employees can study in any place and at any time that suits them best, to make it as convenient as possible for them.
(McDonald’s, 2015) This removes any barriers that employees may face when concerned with development. This allows employees to fulfil their self-realisation needs as described by Maslow (Mullins, 2007)Organizational LearningOrganisational learning is supported via policies, programs and meetings that welcome feedback and knowledge sharing. Diversity and Inclusion.
McDonald’s official HR management policy describes how diversity and inclusion are important factors in the firm’s organisational culture. McDonald’s realise the importance of diversity and inclusion in optimising HR capabilities to deal with an increasingly diverse market. To ensure support for diversity and inclusion, McDonald’s organisational culture encourages employees, suppliers, franchisees, and customers to give their feedback and engage in meaningful conversations to improve the business.
McDonald’s utilises a different learning and development strategy for each group of employees: ‘crew members’; restaurant management teams and franchisees; and head office staff and middle managers.Training of crew members is hands on and happens on the restaurant floor. Evidence of its effectiveness is the fact that 94% of operational managers started their McDonald’s careers as crew members. For restaurant management teams and franchise owners, the focus has been on flexible and on the job training. Other programmes include a service leadership programme and an extended hours workshop. The former was introduced to improve staff confidence.
Its success was proved as it increased McDonald’s mystery shopper score by 2.5%. The latter was introduced to assist manager in preparing for change in opening hours in some restaurants. For head office employees and middle managers the focus has been on providing more chances for personal and group development. At the beginning of 2008 there was a 100% increase in the number of internal courses. (HR magazine, 2009) Learning and development opportunities are some of the largest drivers of employee engagement and vital in instilling a solid workplace culture.
According to the Deloitt Global Human Capital Trends Report (2016), Learning opportunities are among the largest components of employee engagement and strong workplace culture – they are part of the whole employee value proposition, not just a way to build skills and train staff in their day to day activities. Engage Employee (2016) agrees with this statement. They state that learning is an engagement tool in its own right and if an organisation is prepared to develop an individual it shows that they are prepared to invest in them as person. One of McDonald’s key goals once it has employees trained and engaged is to retain them. It could be argued that high staff turnover could cause problems when trying to align new staff with company culture and procedures. According to a 2010 report from the National Restaurant Association, fast food restaurants have an annual turnover rate of 60%.
(Wall Street Journal, 2013) Recruiting and training new staff is a costly and time consuming process that could detract from offering the customer the best experience possible. Employees who hold a long tenure tend to be happier in their roles (Customer Contact Week, 2016). It could also be suggested that they hold valuable product knowledge and therefore better equipped to provide customers with efficient and effective service. One way that McDonald’s aims to retain staff through the introduction of the McDonald’s People Migration Strategy.
The strategy offers employees the opportunity to transfer to different McDonald’s locations if they are required to move away. For example, if an employee is moving away to study at university, McDonald’s will offer the employee a transfer to their new city. (Freifeld, L. 2017) Vice President of U.S.
Training Diana Thomas said “Reduced turnover of crew and hourly managers became primary success measures of our enhanced training initiatives” (TrainingMag, 2015) By introducing this strategy, McDonald’s are able to retain some of their most knowledgeable staff and transfer their knowledge to new locations. According to Greany (2016) managers can be a vital component when it comes to staff happiness and retention. Whilst it’s not possible to control whether there will be a connection between a line manager and an crew member, it is possible to support leaders and managers with performance and behaviour related training and development.