Performance Management in McDonald's: Methods and Complexities

This report analyses the performance management process of McDonald's, including the complexities faced by the restaurant and the different methods of performance appraisal used. The report also discusses the importance of performance management and the benefits gained by employees, managers, and the organization.

Running head: PERFORMANCE MANAGEMENT
Performance Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has helped in analysing the entire performance management process of
McDonald’s. Proper analysis has been done in order to improve the complexities that has
been faced by the respective restaurant and solved the same with proper implementation of
different strategies. The different models and approaches of the performance management
process has been applied that has assisted in adopting the different kinds of strategies to solve
such issues relating to analysing the performance of the employees in the organization.

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Table of Contents
Introduction................................................................................................................................3
Overview of McDonald’s...........................................................................................................3
Performance Management.........................................................................................................3
Definition...............................................................................................................................3
Importance..............................................................................................................................4
Complexities Faced by McDonald’s..........................................................................................5
Performance Appraisal Methods................................................................................................6
Traditional Performance Appraisal Methods.........................................................................6
Modern Performance Appraisal Methods..............................................................................6
Performance Appraisal Method Applied by McDonald’s.........................................................7
Objectives of Performance Appraisal in McDonald’s...........................................................7
Methods of Performance Appraisal used in McDonald’s..........................................................8
Graphical Rating Scale.......................................................................................................8
360 degrees Feedback Appraisal........................................................................................8
Implementation of 360degree appraisal system.......................................................................10
Reasons of applying respective performance appraisal system in McDonald’s......................10
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
The report throws light on analysis of performance appraisal method that is used in a
respective organization. The company that has been analysed in this report is McDonald’s
and proper evaluation of the performance management process has to be done in order to
understand and evaluate the various outcomes of performance management process.
The understanding of the different complexities faced by the business has to be
identified and analysed in an effective manner and solve such issues with proper
implementation of the performance management process. The various application of the
theories is required to be analysed and identified in order to understand the importance of the
performance appraisal in different organizations effectively and appropriately as well.
Overview of McDonald’s
McDonald’s is the American fast food organization that was founded in the year 1940
as the restaurant that operated in San Bernardino, California, United States (Mcdonalds.com,
2018). The founder of McDonald’s were Richard and Maurice McDonald and the respective
restaurant serves the entire worldwide as well. The revenue earned by the company is
US$24.622 billion till the year 2017 and this is one of the best fast food chain restaurants in
the world and there are more than 375,000 employees who are employed in McDonald’s. The
restaurant has different franchises in different parts of the world and this has helped them in
attracting more customers in the entire world (Mcdonalds.com, 2018).
Performance Management
Definition
Performance Management is defined as the different kind of activities that helps in
ensuring that the goals are being met in a consistent manner that is effective and appropriate
in nature. Performance Management helps in focusing on performance of the organization

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and this process includes the different employees and employer of the organization in
improving the overall efficiency of the organization along with accomplishment of the goals
and objectives as well. It is one of the concepts of the human resource management and this
is one of the continuous process of identifying along with developing performance of the
different individuals with accomplishing the strategic goals of the organization (Sharma and
Agarwal 2016).
Importance
Performance Management is essential in nature in different organizations as this helps
in setting and revising the goals effectively. It is mandatory in nature as this provides the
different employees with different expectations for the work performed by them. The
different practices of the performance appraisal process include that it creates a positive
influence on the loyalty of the employees along with providing open and transparent job
feedbacks to the different employees (Behery, Jabeen and Parakandi 2014).
Benefits gained by
Organization
It helps in improving the performance of the entire
organization along with retaining the different
employees. Furthermore, the performance
management process improves the productivity along
with overcoming the different barriers that is related
to communication as well.
Benefits gained by
Managers
It helps in saving time along with reducing the
conflicts. It ensures efficiency and brings consistency
in the performance of the tasks that is performed by
them.
Benefits gained by
Employees
It helps in clarifying the employee’s expectations
along with providing them with the scope of self-

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assessment and promotes the entire job satisfaction
as well.
Complexities Faced by McDonald’s
Previously, there were different issues that were faced by the respective restaurant
named McDonald’s and this affected the entire productivity of the organization as well. It
was noticed that there was lack of strategic focus as it was noticed that the overall strategy of
McDonald’s was not up to the standard and this affected the entire performance management
process as well. It was noticed that the respective restaurant was not being able to concentrate
on the performance of the employees in an equal manner and this created huge chaos in the
management system as well (Sharma and Agarwal 2016).
Furthermore, it was noticed that there was lack of meaningful and timely feedback
that was provided to the employees. It was seen that McDonald’s human resource department
did not incorporate any such kind of feedback process for analysing the hard work of the
different employees effectively. No proper training was provided to the managers and
therefore there was lack of proper ascertainment of the different kind of reviews that was
required to be provided to the different employees who worked with McDonald’s (Chandler
2016).
It was seen that previously, there was lack of appropriate recognition and rewards in
McDonald’s and this negatively affected the morale of the different employees in the
organization as well. McDonald’s previously did not follow the basic norms that were
required to generate an appropriate performance management process and start with the
performance appraisal of the different employees (Katane and Dube 2017). The
communication process was weak and this affected the entire productivity of the organization

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that affected the entire profitability of the company as there was lack of proper support from
the higher authorities for gaining competitive advantage and provide support to the
employees by motivating them with monetary and non-monetary rewards as well.
Performance Appraisal Methods
There are different methods of performance appraisal that are based on both
traditional and modern techniques. The methods of performance appraisal are as follows:
Traditional Performance Appraisal Methods
Paired Comparison
Ranking Method
Check List Method
Essay Method
Confidential Report
Graphic Scale Rating Method
Modern Performance Appraisal Methods
Management by Objectives
Human Resource Accounting
360-Degree Appraisal
Behaviourally Anchored Rating Scales
Assessment Centres
These are the different kind of performance appraisal methods that are used by the big
organizations as to analyse the performance of the different employees in an appropriate
manner. In the present scenario, the organizations such as Nestle along with Woolworths
follow the different modern performance appraisal techniques in order to improve the
performance of the entire organization along with the individual performance that will be

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suitable for the entire organization and solve such issues in an effective manner (Sukumar
Rao 2017).
Performance Appraisal Methods are essential that has to be analysed in the
organizations to identify the common goals and use such measures as the guide for operating
the entire unit and assessing the entire contribution of each of the members in the respective
organizations. However, there are different companies that uses the different other traditional
performance appraisal methods that helps them in evaluating the performance of the
employees individually along with the entire organization as well (Kraiger 2014).
Performance Appraisal Method Applied by McDonald’s
In McDonald’s, the performance appraisal methods are utilised in an effective manner
in the present scenario and this helped them in managing the different activities in an
effectual manner as well. The performance appraisal is based on various parameters such as:
Ethics
Team Work
Skills
Confidence and Motivation
At McDonald’s, all the employees are on race to give the perfect performance through
their particular knowledge, skills along with abilities. Proper appraisal session is arranged for
the different employees who are employed in McDonald’s and the interview is taken by the
head of the department and the performance appraisals generally takes place in the month of
June to July (Blanchard & Muchnick 2013).
Objectives of Performance Appraisal in McDonald’s
To provide feedback to the different employees and this helps in improving the
overall performance of the employees and organization

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To identify the needs of training of the different employees in the organization
To validate the techniques of selection along with human resource policies as to meet
the different equal opportunity requirements
Methods of Performance Appraisal used in McDonald’s
There are two main methods of performance appraisal used in McDonald’s that includes:
Graphical Rating Scale
360-Degree Feedback
Graphical Rating Scale
McDonald’s utilises the graphic rating scale as this assists them in evaluating the
entire performance appraisal of the different employees. With the help of the graphic rating
scale, the head of the respective department rate the employees as per the performance of the
work, knowledge, experience and skills. After the assessment is done as per the rating scale,
the employees are being rated as appraised (Saha & Goyal 2017).
With the help of the assessment done by the graphic rating scale, this helps the head
of the department in arranging the different training needs and this helps them in managing
the entire appraisal process effectively as well. The graphic rating scale method includes the
following traits:
Communication
Personal Effectiveness
Work Quality
Reliability

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360 degrees Feedback Appraisal
The 360-degree feedback is utilized in order to evaluate the output of the different
employees of the organizations through the multiple kind of sources. The raise in the salary is
done by more than 10% and if the performance is counted then more than 21% increment is
required to be provided to the employees at any time of the year. McDonald’s utilises the
graphic rating scale method for evaluation of the entire performance of the different
employees and through the help of the respective appraisal method, the head of the respective
department rates the different individuals as per their performance along with the skills of the
employees effectively (Lawrie, Kalff and Andersen 2015).
Furthermore, in McDonald’s the 360-degree appraisal system is followed in an
appropriate manner and it is different in nature as the feedbacks is obtained from the different
co employees and subordinates instead of directly from the supervisor of the organization
(Bianchi 2015). With the help of the 360-degree appraisal system, it has helped and assisted
McDonald’s by helping the different employees in participating and it is made compulsory.
The managers of the respective restaurant provide training to the employees effectually that
assists in providing feedback and the outcome becomes a development plan as well (Mone
and London 2018).
In McDonald’s, 360-degree appraisal system has helped the entire company in
personal and team development. The changes that are required to be made in the team has
incorporated the change and improved the entire managerial effectiveness of the different
individuals effectively and efficiently (Hammer 2015). It has been noticed in McDonald’s,
the managers, customers, suppliers along with the employees are involved in the process and
this is the self-appraisal that is provided to the company in managing the weaknesses
effectually as well.

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Implementation of 360degree appraisal system
With the help of the above diagram, it can be analysed that proper planning is
required and is essential in nature as well to understand the piloting and reviewing the
different business-specific and managerial competencies to analyse the tasks performed by
the employees and the feedback is provided on self-appraisal basis. It has been seen that the
feedback that has been generated from the 360-degree appraisal system is based on feedback
from the employees, colleagues along with the different higher authorities as well. The
implementation is required to ascertain the competencies of the employees appropriately
(Van Dooren, Bouckaert and Halligan 2015).
Reasons of applying respective performance appraisal system in McDonald’s
The performance appraisal system is required to be applied by the McDonald’s as this
will assist them in analysing the performance of the employees and motivating them with
different rewards both monetary and non-monetary in nature. The employees who are
working as trainees or the permanent employees are always keen in knowing their
performance and this will assist them in analysing their performance through conducting such
performance appraisal methods.

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The performance appraisal process is effective in nature in order to increase the
morale of the employees effectively. The performance appraisal is the way of finding out the
reasons wherein the employee should be provided and rewarded with promotion or provided
with different incentives as well (Van Dooren, Bouckaert and Halligan 2015). Furthermore,
the appraisal of the employees in the organization as to compensate the different employees
by increasing their pay along with incentives. The career development is the other essential
component that is enabled by the performance management and this enable the manager as to
couch and counsel employees in the career development.
Conclusion
Therefore, it can be concluded that performance appraisal management process is
essential in nature as this helped McDonald’s in managing the performance of the different
employees effectively. Furthermore, it has been noticed that there are different objectives of
the performance management process that has to be handled effectively and this has helped
McDonald’s in analysing the needs of the individuals who are working in McDonald’s and
solve their issues in an effective manner as well. Lastly, proper reasons has been stated that is
required to improve the performance appraisal process.

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References
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management through system dynamics modelling to deal with wicked problems: the case of
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Do About It: Rethink, Redesign, Reboot. Berrett-Koehler Publishers.
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