Reward Management Assignment - McDonalds

Reward Management

Reward Management 2
Introduction
McDonalds is one of the most recognised and renowned global fast food chain which serves high
quality hamburger across the world with its enormous number of fast food chains. There are
almost more than fifty eight million customers who are served on a daily basis by the food
offered by McDonalds. The restaurant chains of McDonalds are run through franchise in almost
the big regions of the globe. The key activity of the company is to have increased number of
franchises and the major revenue is attained from the fess paid by the franchisees, royalties and
rent as well as also from the overall sales acquired. The revenue of the company is increasing
with an upsurge rate and the major role in the snowballing and rapid success is the competent
and skilled employees of McDonalds. There are around 375,000 employees who9ch are offered
an employment opportunity by the company in various parts of the world (McDonalds, 2017).
The essay will have its focus on the existing reward management systems and practices of
McDonalds, the challenges faced by the organisation and the reward management strategy to
have a motivated and supportive workforce.
Reward Management: Application, challenges and strategies
Reward management can be understood as implementation and formulation of the policies and
the strategies which objects to reward the individuals in a consistent, equitable and fairer manner
in respect with the organisational values. Reward management comprises of controlling and
evaluating the compensation as well as remuneration and various other benefits offered to the
organisational employees. The primary aim of reward management is to create and effectively
implement an appropriate reward structure for any organisation (Lindop, 2009). The
organisational reward structure comprises of number of factors such as executive reward and
pay, team reward, minimum wage, total reward, payroll administration, salary administration,
practices and policies and pay of the employees. For implementing a successful reward
management program in the organisations, there is a well structured and effective reward system
which is required to be introduced in the organisation so that the contribution and the efforts of
the organisational employees in the attainment of the organisational goals and objectives can be
acknowledged (Terera and Ngirande, 2014).

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The reward system is primarily concerned with rewarding of the organisational potential
employees who are deserving and competent. Such employees are rewarded by the means of a
reward system in a fair and equitable manner so that they can remain motivated and have strong
organisational commitment (Shields, et al., 2015). The organisational reward system is regarded
as an efficient tool which is used by the human resource department of the organisations at the
time of managing the performances and the productivity of the organisational employees.
McDonalds is well-known for its strong and effective reward management programs, strategies
and systems. There are number of characteristics and aspect of the reward management system
of McDonalds which shows the efficiency of the reward management practices of McDonalds.
The one of the key aspects is the robust salary packages offered by the company (Sparrow,
2013).
It has been evaluated that McDonalds is globally famous and one of the best and favoured
workplace where the individuals are keen to work at. The major reason behind this is the robust
policies and programs and proficient reward management strategies and practices for the reward
and recognition of the organisational employees. The effective and efficient salary packages
offered but McDonalds is the incentive that influences maximum of the workplace employees to
have string organisational commitment and engagement with the company (Hill, Jones and
Schilling, 2014). There are also a number of studies that presents that McDonalds is at of the
most leading companies in the fast food industry in respect with practicing a number of
proficient reward management and welfare programs and policies (Lawler, 2000). McDonalds
offer the most favourable reward and recognition plans and reward schemes to the employees
and implement a number of reward management programs for the effective implementation of
the same. The reward management system of McDonalds includes a number of aspects that
support in increasing the motivation and commitment of the employees in the organisation. The
company made it mandatory that there must an effective alignment and integration of the
organisational polices and the reward management strategies (Crawford, 2015).
In the field of reward and recognition and the development of the workforce, there are number of
initiatives taken by McDonalds and for the efforts, the organisation won the Employee Benefits
Award in the year 2012. This shows the significance and potentialities of the existing rewards
management and reward system of the organisation. The reward system of McDonalds is based

Reward Management 4
upon a particular notion i.e. “Pay for Performance”. According to this reward system, the
organisational workers are offered with adequate opportunities to have high pays, incentives and
improved results (Bustamam, Teng and Abdullah, 2014). As per this system, the workforce is
also offered with a fixed basic pay which is for their daily work and it is comparatively high in
respect with the salaries offered by various other organisations. McDonalds have a robust and
sound reward system that comprises of a number of benefits too for the organisational
employees. The employees are offered with incentives and perks on the basis of their overall
annual review of the performances. There are offered LTI stock to the employees i.e. the Long
Term Incentives as a part of the reward management system so that the employees remain in the
organisation for a longer time period (Crawford, 2015).
There are various other arguments and discussions which explain the significance of reward
management and reward system in the success of the companies in context with the chosen
organisation, McDonalds and its existing reward system, strategies and management. It has been
analysed and evaluated that McDonalds have such reward system which influences as well as
recognize the efforts of the potential and efficient employees. The company offers a two primary
rewards to the employees, the first award is the President’s Award. As per this reward program,
from the overall employees and the efficient workers, the supreme one percent out of all is
acknowledged and is rewarded for their potential as well as competent performances and efforts
(Crawford, 2015). The second significant strategy or reward system is the circle of Excellence
Awards as the reward offered to the employees for acknowledging them for their continuous
contribution in the successful attainment of the organisational goals and aims (Hansen, Smith
and Hansen, 2002). There are also various other schemes, strategies and reward programs for the
benefit of the employees such as the car program. The competent and potential performers of the
organisation are offered with incentives such as additional benefit of a car which they can use
both for the personal as well as the office work. McDonalds itself bear the various expenses
associated with the car including repair, maintenance as well as insurance and it is a kind of
incentive under the efficient and strong reward system of the company (Armstrong and Taylor,
2014).
There are number of challenges which had also been faced by McDonald in respect with the
reward management such as first of all the challenge at the time of designing the reward system

Reward Management 5
and management, there was an issue regarding the achievement of the external competitiveness
and internal equity (Lawler, 1995). There are a number of issues in respect with the internal
equities as the more tenured and experienced employees aimed at achieving more benefits from
the reward system in comparison with the newly recruited employees and thus a number of
challenges took place in respect with the designing of the reward system at McDonalds. The
second challenges which occurred at the time of designing of the reward system and reward
management at McDonald was responding towards a fragmented pay market and maintaining a
reasonable coherent structure of the pay offered to the employees. There is a key challenge of
promoting teamwork while rewarding the individuals so that there can be maintained equity and
fairness. There is also a need to have consistency in the reward management processes in the fast
and ever-changing situations in the organisations. Thus all these issues and challenges were
faced by McDonalds while managing the reward and the reward system in the organisation
(Johnstone, Ackers and Wilkinson, 2010).
To overcome the challenges and to have better and robust reward system in the organisation and
increased motivation of the employees, there is a need to have an effective reward strategy. In
the development and implementation of a reward strategy there is a vital role of the reward
practitioner skills and competence both in the institutional as well as the workplace settings in
respect with the negotiation of rewards and the reward designing. The reward practitioner skills
play a vital role as the skills and the competence of the reward practitioner only ensure the
successful implementation of the strategy and designing of the strategy (Heery, 2009). The
reward practitioner ensures that the reward program or the reward strategy does not only
emphasis upon the benefit of the employees but also have a consideration in respect with the
organisational culture, business strategy, available budget and the fairness aspects in the
implementation of the strategy. It is also a role of the reward practitioner to have effective
reward negotiation which means that there is strong negotiation while designing the reward
program so that there can be effective organisational policies so that there are no further issues
and challenges take place at the time of rewarding the employees (Waring and Burgess, 2011).
The new reward management strategy which will be implementing by McDonalds will be
prioritizing the effective program delivery. As per this strategy, there is differentiating the
employee reward programs as well as strategies which are based upon the performances of the

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employees (Howard, Turban and Hurley, 2016). The key aim of the strategy is to attract the
talented and competent employees and have aspects which can help in retaining them in the
organisation for a longer time period. The strategy will also focus to have strong communication
about the rewards and recognition to the employees as well as equip the organisational managers
with efficient resources, training and tools for engaging the employees and the teams in an
effective manner (Armstrong and Brown, 2006). This strategy will help in developing an
improved level of integration between the business strategies and the reward system as well as
also help in overcoming the various challenges faced at the time of implementing reward system
and designing reward management approaches (Wood and Wall, 2007).
Conclusion
From the overall analysis and evaluation of the essay, it so concluded that there is a vital need of
effective reward system and reward management in the organisations to have improved
outcomes and enhanced employee motivation. The organisations need string reward plan and
system to reward the employees for making them stay in the organization for longer time frame
and to boost their morale to work with increased level of commitment. The effective reward and
recognition not only help in increasing eth retention rate of the employees but also help in
achieving more competitive benefits. McDonalds is one of the globally recognized company
which offers strong and efficient reward programs for the employees that not only enhances the
engagement of the employees but develop the company as one of the most favoured workplace.
The report concludes that there are number of issues which are faced by the organisations at the
time of implementing the reward system but with an effective reward management strategy these
issues could be resolved and have enhanced engagement of the employees through increased
level of motivation. Thus, it can be concluded that there must be use of skilled and competent
reward practitioner while designing the reward system and having successful reward and
recognition strategies for increased retention of the employees and enhanced global recognition.

Reward Management 7
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