Principles of Human Resource Management: Fast Food Industry Analysis

This report delves into the human resource management challenges faced by the Australian fast food industry, particularly focusing on employee turnover and recruitment and selection processes. It identifies factors contributing to high employee turnover, such as management behavior, scheduling issues, favoritism, performance-related pay, lack of motivation, security concerns, poor training, and teamwork problems. The report analyzes the recruitment and selection process, highlighting challenges like lengthy recruitment periods. Implications of these issues, including both positive aspects like psychometric testing and negative consequences such as higher costs and loss of good candidates, are discussed. Recommendations are provided, including implementing retention practices like reward systems, training and development, and increasing minimum wage, alongside suggestions for decreasing recruitment time and improving recruitment management. The report utilizes the McDonald's case as a practical example to support its arguments and provide real-world context to the issues.

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PRINCIPLES OF
HUMAN RESOURCE
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2019
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3/30/2019

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Contents
Introduction......................................................................................................................................2
Logical arguments...........................................................................................................................2
Employee turnover.......................................................................................................................2
Recruitment and selection............................................................................................................6
Implications.....................................................................................................................................6
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
Human resource manager plays a vital role in understanding organizational behavior and
manages employees and labor of the organization. At the same time he is also responsible for the
issues related to human resource occurs or potential issues in the organization to resolve, in order
to decrease the risk of unproductivity in the organization. Australian fast food industry has been
facing various human resource and employment issues among which employee turnover and
recruitment and selection were identified to be most crucial issues faced by the employers and
employees. Due to increase in service orientation in the industry, the relevance of the employees
has also increased in this industry. The issues related to these can cause majorly to the
organization productivity and success factors (Allen, 2017).
Employment turnover could be the result of dissatisfying factors in the organization. This
has to be improved by the organization in order to retain the employees as an increase in
turnover could cause a higher cost to the company. Another issue of recruitment and selection
could cause various challenges like in the case of globalized recruitment by an organization
(Som & Aguenza, 2018). The report will include various cases like McDonald's case for further
discussion.

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Logical arguments
The major issues identified included:
Employee turnover
As discussed in the previous section employee turnover is the rate at which the
employees leave the organization willingly. This has a negative impact on the company, which
the fast food industry of Australia is facing majorly from years. As per the fact and figures, the
turnover rate of the fast food chains has been reached up to 150 percent reflecting that the rate
has been increased to a large extent. Considering the McDonalds case study, there has been a
large decline in the number of an employee of McDonald's worldwide.
Figure 1: (Source: (statista, 2019)

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From the figure it can be observed that the employee's aware decline in number and the
major cause is employee turnover in the company and industry. The major reasons for employee
turnover observed in the company were
 Management behavior – The behavior of management is one of the major causes for the
dissatisfaction among the employees of an organization. This could be a reason for
motivation and could be the major reason for demotivated employees and they prefer to
leave the job due to bad or unethical behavior of the management (hrmonline, 2019). One
of the researches by Greg J. Bamber on “Fast-food work: are McJobs satisfying?” was
conducted reflecting the young people perception while working in this industry in
Australia (Bamber, Allan, & Timo, 2015). It was analyzed that McDonald’s employees
have faced these issues, and as per the feedback from the employees, the major cause of
leaving the job is management behavior towards them.
 Scheduling – Fast food chain managers are constantly compelled by their line supervisors
to reduce workforce and increase profit. Due to this, an inadequate quantity of staff is
scheduled generally who are skilled in both chefs duty and front office. Meanwhile, team
members are recruited on everyday wages, in case they are not scheduled they will not be
paid, managers accept low work burden on such days and they schedule fewer staff. This
turns into a very busy time affecting scheduled staff with pressure and exasperating. This
was another major reason for employees to leave the job out of pressure (Hill, 2015).
 Favourism – this point is similar to the previous one. In McDonald's a policy of NO to
race, religion, age, sexual orientation has been made which found to be violated when it
comes for the manager to choose the individuals for the scheduling. It has been
considered that the more work by an employee could gain him the opportunity to earn

PRINCIPLES OF HUMAN RESOURCE MANAGEMENT 5
more. This eventually became the reason for employee turnover facing non scheduling
issues.
 Performance related pay – Money is one of the most effective motivators for employees
to perform better. At a restaurant like McDonald's, it becomes very difficult for the
employee to serve to the customers but the minimum wage provided to the crew members
is low that they expect which lead to s one of the major dissatisfaction reason for the
employees (Raban & Ritcher, 2015).
 Lack of motivation - The motivation level in the employee of McDonald is found to be
low. This is the major cause for dissatisfy customers as well for the company due to the
lack of interest shown by the staff members. The low chance of promotion has caused
this lower motivation level among the employees, as they are unable to see themselves
growing in the organization.
 Security – One of the policies of McDonald's include customer is always right. This
might be good for the company to keep the customer happy and satisfied but it can be
unethical for the staff members working in the organization. The crew member faces the
disrespectful and unethical behavior of the customers and had to ignore that and accept
what the customer is saying is true. This cause frustration and irritation among the
employees eventually lead to an increase in employee turnover (Fang & Gerhart, 2014).
 Poor quality training – The training has not been provided by the company to a large
extent. In an interview from the employee of McDonald's, it was found that they learn
various activities to be conducted in the organization through hit and trial method. This is
another reason for dissatisfied employees and unable to enhance competencies and
develop in the organization, lead them to leave the company.

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 Poor teamwork – The teamwork is found to be poor in teams in McDonald's, which cause
to lower morale among the employees eventually result in not increase in a number of
employees leaving jobs in this industry.
 Major changes – Change in social trends and technological advancement, leads to major
changes in an organization process and this leave individuals to perform low or unable to
perform in an organization and this lead to increase in employee turnover (forbes, 2018).
Recruitment and selection
This is another issue identified to be crucial for this industry. an article “McUniversities
revisited: a comparison of university and McDonald's casual employee experiences in Australia”
by Andrew Nadolny interviewed and survey findings were used for comparison on McDonald's
casual workforce by Gloud’s research. The study focus on the recruitment and selection process
of the company and major challenges faced. The process of the recruitment of the company
includes various stages and it is considered to be very important because the cost is involved by
the company to find out a perfect candidate. The company is having more than two thousand
applications per day and considering the selection only one out of fifteen candidates is selected.
The process includes application by candidates, psychometric test, interview, and lastly the
welcome meeting (Bradler, 2016). The major challenges or the issue occurs is that the company
policy says that the period of recruitment must not cross 28 days although this is not been
followed seriously by the managers and it reaches up to 60 days. This is one of eth reason that
the company loses the good candidate as candidates are quite impatient while finding out a new
job and within this much time they join another job or company (Ryan & Nadolny, 2015).

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Implications
Being a manager considering the two major topics that are employee turnover and
recruitment and selection the positive implication include:
 Psychometric testing – In the recruitment process the test has resulted in time-saving in
the process as most of the candidate is shortlisted as per the test and they competencies
are also analyzed through this test.
 Better decision-making – The time taken for the process is very long but this could also
result in better and strategic decision making. The reason being the management has
given time in analyzing the perfect candidate for the job profile.
 Increase in high tech organization – The employee turnover has affected the organization
but one of the positive aspects is that it has resulted into increase in high technology use
in the organization, which results into fewer requirements of staff that is beneficial for the
company (Patiar, Herington, & Davidson, 2015).
Negative implication
 Higher cost to the company – Increase in turnover leads to higher cost to the company
as the cost spends for a new employee include administration cost, orientation cost,
training cost and uniform cost, which goes into vain when an employee leaves the
organization.
 Waste of time and efforts – Along with the cost, the time and efforts of the
management is waste in case of an increase in employee turnover.
 Brand image – The increase in employee turnover also hampers the goodwill and
image of the company in the industry.

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 Loss of good candidate – As discussed, the longer time in the recruitment process
leading to loss of good candidates that could be part of the competitive organization
meanwhile.
 Time consumed recruitment process – As per the old saying, time is money. The
more time consumed in the recruitment process the opportunity to earn more money
decreases.
Recommendations
 Retention practices by the company – the company must include various activities and
take initiative to retain maximum employees, this could include:
 Reward system – The rewards are the best ways to encourage and motivate
employees. The company can reward the high performers of the organization in
all the levels of employees. This would help the company to encourage employees
to perform better next time and enhance competitive spirit within employees
(Brown, Kaine, & Shields, 2015).
 Training and development – Training is one of the methods to increase the
competencies of the employees so they are able to perform better in the
organization. This must be done to make the employees realize that they can have
growth in the organization (Asfaw, Argaw, & Bayissa, 2015).
 Increase in the minimum wage – Money is the major factor that affects the
employee’s performance and willingness to continue with an organization. The
company can increase the minimum wage of the crew members or the casual
workers in order to retain them in the organization (Anitha, 2014).

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 The decrease in the time frame for recruitment – This will increase the recruitment
process and the issue of losing good candidates would be resolved.
 Trained recruitment manager – The recruitment manager of the company in the industry
must be trained enough to identify the good candidates and select the right person for the
right job (Abdulraheem Sal, 2016).
 Recruit before festivals – the need for the employee’s increase at the time of festivals. It
is suggested to the companies to recruit casual workers before festive time to enhance the
productivity of the company in the industry.
 Change management – Lewin’s change model can be applied by the manager to decrease
the resistance to change and decrease employee turnover (Brown & Cummings, 2016).
Figure 2: (Source: (Brfidgman & Brown, 2016)

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Conclusion
From the report, it can be said that the Australian fast food industry is growing rapidly
and has also responsible for generating employment. However, various human resource issues
found in the industry are affecting the company and employees. The two major HR aspects
considered for discussion in report for this industry were employee turnover, recruitment, and
selection.
McDonald case was taken and major reason for employee turnover identified through
analysing the researchers conducted were management behavior, scheduling, favourism,
performance related pay, security, lack of motivation, poor teamwork, poor quality training, and
major changes.
Some of the positive implication identified as an HR considering these two topics
included Psychometric testing that has resulted in time-saving in the process as most of the
candidate is shortlisted as per the test and they competencies are also analyzed through this test.
Better decision-making as management has given time in analyzing the perfect candidate for the
job profile. Some of the negative implication identified as an HR considering these two topics
included higher cost to the company, waste of time and efforts, brand image, and loss of good
candidate.
Some of the recommendation for the organization included Retention practices by the
company, The decrease in the time frame for recruitment, trained recruitment manager, recruit
before festivals, and change management.

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