HRM Practices in Business Management: A McDonald's Case Study

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HRM BUSINESS MANAGEMENT

Table of Contents
Introduction:....................................................................................................................................3
PO1 With reference to the workforce and organizational resourcing, analysis of functions and
purposes of HRM:............................................................................................................................3
PO2 Evaluation of strengths and weakness of various approaches to recruitment and selection:. .5
PO3 Analysis of benefits of various HRM practices for both employees and employers:.............8
PO4 With reference to organizational productivity and profit, discussing the effectiveness of
various HRM practices:.................................................................................................................10
PO5 With respect to HRM decision making, state the significance of employee relations:.........12
PO6 State the key points of employment legislation and its impacts on HRM decision making: 14
Conclusion:....................................................................................................................................16
Reference:......................................................................................................................................17
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Introduction:
This study focuses on the importance of human resource management in an organization that can
help it to raise its productivity and profitability. The concept of human resource management
revolves around the proper utilization and use of employees’ expertise, knowledge, and skills in
the right place. In turn, it will yield great returns for the management as it will create space for
improvement and development from all spheres in the organization. The following sections
analyze the concept of HRM, its advantages and its benefits from an organizational point of view
to provide a more realistic approach to the study.
PO1 With reference to the workforce and organizational resourcing, analysis of functions
and purposes of HRM:
Functions of HRM: With respect to the workforce and organizational resourcing, the functions
of HRM at McDonald’s are as stated below:
● Recruitment: It is the primary function of HRM that determines the organizational
strengths of McDonald's. It is critical and challenging at the same time for the HR Staffs
to ensure that there is steady recruitment of skilled employees that can meet the
organizational needs (Noe et al. 2017). It manages the inflow of employees so that it does
not impact the resource of McDonald's and they can concentrate on further expansion.
● Training and development: It is done to ensure that hired employees are at par with the
needs of McDonald’s business objectives. It is executed by the HR department. With the
assistance of the senior management, the HR department schedules training sessions for
both new and existing employees. It is done so that they can contribute gainfully to
organizational growth and development.
● Resource planning: HR department is accountable for the resources that are allocated for
workforce development. With the huge capital inflow at McDonald’s, it is critical that the
HR team manages the funds for recruitment and training (Mcdonalds.com, 2019). In most
cases, the management of the firm lays out the recruitment needs of the firm at once for
the HR team to follow over the financial year.
● Controlling: It is the final step of an effective HRM policy. In the case of McDonald’s,
the HR manager monitors the outcome achieved against the outcome planned. It helps
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him to control the flow of operations and employee management to ensure that all the
assets at par with the organizational needs. This helps in effective employee management
controlling by HR.
Figure 1: Functions of HRM
Source: Created by author
Purposes of HRM: With respect to the workforce and organizational resourcing, the purposes of
HRM at McDonald’s are as stated below:
● Staffing requirements: One of the main purposes of HRM policies at McDonald’s is the
assessment of staffing requirements. As opined by Bender et al. (2018), it is the duty of
the HR department to analyze the number of employees the firm needs and ensure that
the present number tallies with it. If not, then they have to start the recruitment process
after seeking management’s advice.
● Employee relations: This is yet another purpose for the HRM policies at McDonald’s.
Since it is a huge firm, it happens sometimes that the management fails to interact
properly with employees. In such cases, the HR department steps in. They act as a link
between the employees and the employers and ensure there is a healthy relationship
between them.
● Organizational laws: One major purpose behind HRM policies was the management of
organizational laws and policies. It is within the domain of HR department to ensure that
these policies and laws are disseminated among employees and they are aware of these
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(Heilman et al. 2015). The policies of conflict resolution, human resource, and
recruitment to retirement are among the major laws and policies handled by the HR
department of McDonald’s.
● Efficiency evaluation: McDonald’s management has relied on employee efficiency
evaluation upon the HR department. This is a major purpose of HRM as it monitors and
evaluates the efficiency of an employee and generates reports and recommendation for
their supervisors. Since it is directly linked with organizational performance, it is given
utmost priority among other relevant purposes of HRM.
Figure 2: Purposes of HRM
Source: Created by author
PO2 Evaluation of strengths and weakness of various approaches to recruitment and
selection:
The management of McDonald’s follows two types of recruitment and selection process. It is
part of their organizational mandate and is overseen by the HR department.
Internal recruitment:
When promotions and transfers happen within the firm, it is termed as internal recruitment and
selection. It is managed by the senior directors and the management with assistance from the HR
department. Examples can be transfers, promotion and so on.
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Strengths: This process is very necessary to boost employee morale and instill a sense of healthy
competition among employees. It also means that skilled and deserving employees can exercise
more freedom of work to develop further (Ekwoaba et al. 2015). As observed in the case of
McDonald’s, this process is very cost effective and saves a huge amount of money spent on the
external recruitment process. In fact, most senior vacancies in McDonald’s are filled by the
internal recruitment process. The arguments are that they are already apprised about the
organization’s way of working and can benefit it further. In such cases, employee turnover also
goes down considerably.
Weakness: There are certain limitations and drawbacks to this process as well. With the
excessive dependency on internal talents, the management at McDonald’s is not addressing the
fresh candidates who are also skilled and talented (Mcdonalds.com, 2019). In fact, shutting them
out will only lead to organizational degradation. It is because new employees could bring
innovative perspectives that could have helped the firm to grow and develop further. Another
weakness is conflict in the workplace. When an employee is given promotion, other employees
of the same level may feel left out and it will lead to unnecessary organizational conflicts.
Further, it will cause the workplace to grow old due to lack of fresh and young talents.
Figure 3: Types of Internal recruitment
Source: Created by author
External recruitment:
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External recruitment is done when the HR team of McDonald’s hires employees from outside the
organization. They may be fresher or experienced based upon the requirements of the firm.
Examples can be online recruitment, hiring through agencies and so on.
Strengths: The primary strengths are that it allows the recruiters to have a broad market for
employee selection, unlike internal recruitment. As stated by Landers and Schmidt (2016), the
most important aspect is that organizations get to choose the type of employee they want and
within what salary range. In case of McDonald’s, the HR team seeks new employees so that they
can generate and contribute new ideas and energy in the system. Further new employees with
prior experience in other organizations are a source of information and data that the firm can use
to their advantage. Ethically, it is a fair process with fair chances for everyone to perform and
secure a place in the firm.
Weakness: The main weaknesses are that it involves high risk for resource loss and fewer
outcomes. For instance, if McDonald’s invests a sum of money for a recruitment drive and there
are no major turnouts, then the entire process is a failure. The management expects a certain
number of selected individual from each of their drive (Collings et al. 2018). Furthermore, there
are many scrupulous recruitment agencies that recruit unworthy individual on their behalf simply
for their own profit. This process is also time-consuming and requires lots of money for an
effective outcome. Finally, there are legal risks from new employees that are not with the case of
existing employees of the firm.
Figure 4: Types of External recruitment
Source: Created by author
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PO3 Analysis of benefits of various HRM practices for both employees and employers:
HRM practices are very important for the organization and management of employees. There are
certain ways in which it benefits both employees and employers. The following section analyzes
the concept from an organizational point of view of McDonald’s.
Benefits for employers:
● Retaining deserving employees: The HRM practices at McDonald’s help in retaining
deserving and qualified candidates in the firm. It is a very crucial step with the current
ongoing expansion plans for McDonald's that will help them to expand quickly. As
opined by Nankervis et al. (2016), these employees will help to curve their way to the top
rungs of the organization and drive it further to success. The employers will be able to
achieve their goals and objectives if their qualified and deserving employees keep on
working for their firm for a long time.
● Inculcating positive behavior: The HRM practices help in creating a better work
environment where employees can learn and grow together. The target of such HRM
policies in McDonald's is to make sure that employee is well settled and there is positive
behavior throughout. This makes managing the firm very easy for employers. This is yet
another reason employer and managers emphasize the need for HRM practices at
employee levels. Thereby, employers can focus on other aspects rather than ensuring a
positive environment for employees.
● Performance management: The management at McDonald’s use HRM models for
performance management (Mcdonalds.com, 2019). It is important to state that in many
organizations, the performance management system is directly influenced by the HRM
practices. However, the HR department at McDonald’s have gone ahead and tried to
enhance the performance of an employee by increasing their engagement levels. This has
definitely increased their performance and hence the scale of performance assessment for
McDonald’s as well.
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Figure 5: HRM Benefits for employers
Source: Created by author
Benefits for employees:
● Building a flexible workplace: The HRM practices and policies are very effective in
making a work environment flexible for all kinds of employees to fit in (Shin and
Konrad, 2017). Many HRM policies are generic in terms of employee benefits and
advantages. The same goes for McDonald’s as well. Its HRM policies state that
employees can opt for their time of work and shift for a particular period of time. Further,
they can also apply for transfers. These kinds of flexibilities are always expected from an
organization.
● Better job security and compensation: The HRM policies are guidelines for the
management about employee job security and lay the foundation of trust between
employees and employers. It ensures job security for employees and also states the
guidelines for proper and timely compensation. An important point covered in the HRM
policies of McDonald’s is the structure for a promotion that can really help an employee
to see through and analyze his current status related to his future promotion.
● Channel for managerial interaction: Many organizations implement HRM policies and
their HR department personnel as a channel for interacting with employees (Wood,
2018). It helps the employees to cite their concerns and use the HR department as a
conduit to reach the management. It really helps as the management is always not
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available for the employees. McDonald’s HR team is also available for its employees to
pass their issue and suggestions to the management. It helps in employee management
and positive impacts on employee relations.
Figure 6: HRM Benefits for employees
Source: Created by author
PO4 With reference to organizational productivity and profit, discussing the effectiveness
of various HRM practices:
Effective HRM practices can help an organization to raise its productivity as well as profitability.
In the case of McDonald’s, below mentioned are ways by which its HRM practices increase its
productivity and profitability.
Effectiveness on Productivity:
● Increasing operational accountability: The HRM practices at McDonald's are designed
so that tasks or part of a task is aligned to a particular employee. Hence, it will be very
difficult to actually escape accountability. This is crucial as this concept helps to increase
organizational productivity. With everyone doing their task and being accountable for it,
there is less chance for mistakes and complacency. This, in turn, helps to increase the
productivity of their firm.
● Access to Project Management Tools: The HR department also manages the systems that
can develop project management tools. As stated by Veth et al. (2017), since every
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project is aligned with a particular group of employees, it is crucial for the management
to review the task of these employees for the benefit of the project. The HREM policies
make this process simpler and ensure that the project is managed smoothly and progress
steadily. Thereby, it raises the scale of organizational productivity.
● Creating a job rotation system: It is very important that an employee does not get
exhausted and bored doing the same tedious job every day. It is crucial for any firm ton to
identify the other skills than an employee has so that he can learn about the other verticals
of the firm. In case of McDonald's, its HR team changes employee role every six months
to ensure that they learn something new and do not leave their firm out of sheer boredom.
Figure 7: HRM Effectiveness on Productivity
Source: Created by author
Effectiveness on Profitability:
● Resource management: The HRM policies monitor the resources spent in a firm that
helps the HR department to generate reports for the management. The management can
assess the spending and change their spending strategy to save resources lost from
unnecessary investments. Thereby, as opined by Caldwell and Caldwell (2016), this helps
to manage resources effectively and ensure that there is enough operating revenue with
the firm to keep up with the changing markets.
● Scope of market expansion: With the latest tools at the helm of the HR department, it
can deduce their current employee strength in terms of employee number, skills, and
experience. This can help the management to decide where they would like to expand
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their business. A thorough analysis by the HR department is also going to identify the
best possible market for the skilled labor force. These steps can help the management to
take decision relevant to any expansion of a business.
● Allocation of tasks and jobs: This can seem a little out of the place, however, it is very
important to increase the profit of a firm. McDonald’s HR team use this strategy to
engage its customer in many fields during their training days (Mcdonalds.com, 2019).
This helps them to identify the employee's real strength and weakness. Accordingly, they
can allocate tasks to the employees. Hence it will generate profits and make McDonald's
more profitable.
Figure 8: HRM Effectiveness on Profitability
Source: Created by author
PO5 With respect to HRM decision making, state the significance of employee relations:
There is a lot of significance of employee relations with respect to HRM decision making. Since
employees are the cornerstone of HRM policies and practices, it is crucial that the management
maintains a cordial relationship with them for steady growth and development.
● Easy sharing of jobs and tasks: It is a common practice in McDonald’s to share tasks
and jobs amongst employees when there is too much job for one top handle. This is a
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