Mcdonalds case study

The term of employer branding is important to define, and it is an organisations reputation as an employer. In the case study of McDonalds the branding of the organisation has evolved from its early derogatory days to a present day attractive employment prospect. The aim of employer branding is to differentiate the organisation from its rivals in the employment market and attract the best talent on offer. Ambler and Barrow define it as the package of functional, economic and psychological benefits provided by employment, and identified with the employing company. Ambler and Barrow, 1996) The benefits of employer branding are not only to attract the best employees but to influence consumers and increase financial returns.

Through studying the case on McDonalds I will investigate the human resources issues they faced, the implementation issues and also whether there were any lessons learnt from the decisions made in the past. HR Issues: Since the 1980’s McDonalds as an employer has struggled with its image as an employer, with the public viewing jobs at McDonalds as low paid nd without opportunity. The coining of the phrase ‘McJobs’ to mean any low-prestige and low-benefit jobs, has been a hard image to shake for the McDonalds brand. A corporate decision was made to establish McDonalds as a sound employer brand focussing on the core aspects of employee satisfaction. The process of turning this image around took over twenty years and was helped dramatically by the economic downturn in 2008. People previously refusing to work for such an employer were turning to McDonalds in a time of high unemployment.

In 2009 in the UK alone, 6,000 jobs were created in McDonald’s 1,200 restaurants. Some of those employed were bankers, architects and accountants. The downturn in the economy helped McDonalds bridge the gap between external perceptions of the work at McDonalds and the reality, thanks to effective branding and a wider diversity of employees from society. Research from the Conference Board in 2001 has shown that organisations can reap competitive advantages from effective employer branding, helping employees internalise company values and assisting in employee retention. Backhaus and Tikoo, 2004) The majority of people working in ‘McJobs’ positions, are younger people entering the workplace for the first time with negligible work skills. For these young people the financial element associated with the job was more important than the experience or skills they would learn. The view of these jobs being “dead-end jobs” has been counteracted by McDonalds as they have put in place realistic and attractive career incentives for potential employees.

The image of ‘McJobs’ brought negative publicity to the brand as an employer and many of the senior executives have defended their employees stating that the phrase is Page 2 of 8 People & Change Management Assignment 1 Liam Carpenter 01/03/2013 an insult to the talented, committed and hardworking employees of McDonalds, many of which had been promoted from front line managerial or crew member positions. The culture McDonalds have tried to create amongst its employees is value proposition and the importance of the employer brand. Creating a workplace culture that is hard to imitate amongst competitors is a source of competitive advantage. Stamler, 2001) The internal marketing of company values contributes to employee retention and reduces employee turnover. (Ambler and Barrow, 1996) The cost of recruiting new employees is much higher than retaining existing employees.

The officials at McDonalds realised the importance of engaging and retaining employees in the organisation, the aim to position McDonalds in the industry as an employer of choice. David Fairhurst, Senior Vice President of People at McDonalds stated that if your employer brand is not strong ‘Your customers won’t buy into it, the public won’t buy in to it and crucially, your employees won’t buy in to it. (Fairhurst, 2008) The importance of retaining a firm’s human resources is highlighted by J. Barney, as valuable, non-imitable and rare employees allow an organisation to move ahead of its competitors. (Barney, 1991) This view of using human resources as a competitive advantage is supported by Backhaus and Tikoo. Furthermore the best technology and facilities can give a firm competitive advantage but only with a competent workforce to operate them. (Boxall, 1998) McDonalds promote their ‘McJobs’ as a valuable stepping stone to success and that they have helped many workers in gaining self-discipline, self-supervision and self-scheduling.

They have further emphasised the importance of these attributes and that they are the key success factors for any one in business. The skills learnt are not of simply burger flipping but to show up on time, co-operate with colleagues, operate machinery and dealing with the customers. McDonald’s growth and development programme has been an important part of their employer branding as they have invested heavily in training. In 2007 McDonalds invested £14 million in the UK for staff development, including basic skills training for employees without 2nd or 3rd level qualifications. Dempsey, 2007) They rewarded employees based on team and individual performances, and created a career progression program for employees to strive for senior positions in restaurants and at the corporate level. Officials of McDonalds realised developing the skills of their employees contributed to employee engagement. The perceived investment of employee development (PIED) creates a culture amongst employees that their contributions are valued and that they care about their employability.

It creates a greater obligation with employees to work harder for the organisation. Arthur, 1994; Woods and de Menezes, 1998) Likewise, given the changes taking place in workplaces around the world organisations have realised the importance of continued skill development to employees. (Useem, 1993) The family contract introduced in the UK in 2006 was an innovative scheme brought in for employees, so that they could swap shifts with family members working in the same restaurant, without prior managerial consent. Following this they introduced employee Page 3 of 8 People & Change Management Assignment 1 Liam Carpenter 01/03/2013 urveys to gain insight as to what their employees thought about working in McDonalds. Building databases from employee feedback is one of the most powerful resources for generating positive change in an organisation. (Church, Margiloff and Coruzzi, 1995) However the implications of employee surveys to management can sometimes outweigh their advantages. The credibility of a survey is in the actions of the company, many are not acted upon and can leave employees disconcerted, and meaning future surveys are not always filled in with complete honesty.

So acting upon employee feedback is paramount to engaging employees and fulfilling their needs. (Hartley, 2001) Implementation Issues: There are many ways that the McDonalds brand has implemented change in its brand image over the past 20 years. The importance of the brand image internally to its employees and externally to its customers and the public was realised as a competitive advantage and vital component of future sustainability.

McDonald’s people project was an initiative to change the brand image in Ireland, addressing the false impression people had of McDonalds as an employer. It was an in-depth strategic analysis carried out by Cawley Nea/TBWA to understand the misconceptions amongst the public and key opinion leaders. Particularly what a first job means to a teenager and also their parents opinions, internally store managers and crew members were interviewed in the process. Other key opinion leaders interviewed were career guidance counsellors, human resource experts and university professors.

Through conducting this research McDonalds developed a ‘Hierarchy of Needs’ to understand what was most important to employees and also potential employees. The needs of the youth of society are constantly changing but the core theme of personal development was established from this report. The argument that teenagers with jobs learn the life skills of working with others, communication, making decisions and leadership, all of which a ‘McJob’ can give young people. Without these skills the youth are exposed to ‘high risk’ activities. Boyd, Herring and Briers, 1992) Following on from this research McDonald’s poster campaign in 2006 was started in the UK to promote the positive business practices of McDonalds and the advantages of working for them The posters were rolled out in all 1,200 restaurants in the UK with the slogan ‘Not Bad for a McJob’ as the headline. The benefits, prospects, values and opportunities were some of the key items promoted on the posters in a bid to shake Page 4 of 8 People & Change Management Assignment 1 Liam Carpenter 01/03/2013 the negative connotations associated with the term McJob.

McDonalds promoted the fact that their jobs boosted the communication skills, confidence and career prospects of young people around the world. The McPassport scheme was developed from the people project and was set up to allow employees from all levels of the organisation to travel to McDonald’s restaurants in other countries to share information and learn new skills from other McDonald’s employees. This was an interesting application of global staffing and the success of this was the capability of McDonalds to identify innovations made within the firm and transfer them across operations.

This is a key competitive advantage to multi-national organisations. (Edwards et al. , 2006. ) Following on from this scheme in 2008 an internal blog called Channel M was introduced for employees to promote employee engagement. It allowed staff in different locations to share information with each other whether it is from restaurant to restaurant or to corporate headquarters. It helped break down the barriers to communication and increase job satisfaction and motivation. Many of the problems that occur in business are a direct result of people failing to communicate. Baldoni, 2003) TV commercials have been used by McDonalds not only to advertise their products but to promote their brand image as an employer. Employees have been featured in commercials speaking about their positive experiences whist working for McDonalds and the pride they have in their job.

These commercials helped raise the status of McDonald’s employees. This was not just for the benefit of the public, but for the employees of McDonalds themselves. It was both an external and internal branding goal to gain intellectual and emotional staff buy-in. (Thompson et al. 1999) Another key campaign behind transforming the brand image of McDonalds has been the ‘Change the Definition’ petition campaign. Since the introduction of McJobs to the Oxford Online Dictionary to mean any low paid no prospect job, McDonalds has been striving to get the definition changed. In 2007 a petition was launched to rally public opinion on the change of definition and was circulated around the UK for signatures. In alignment with the petition McDonalds had vans drive around the country with billboards playing films of employees describing their experiences of working for McDonalds and the pride they had in their McJob.

This was again an external and internal branding exercise; the core objective of internal branding is to gain competitive advantage, not through principal business practices but through people. (Jacobs, 2003) McDonalds emphasised throughout the campaign the fact that so many of their senior executives had come from positions of restaurant managers or crew members and the fact that McDonalds was one of the best employers worldwide appearing on the Financial Times Best Workplace rankings in 2007. In 2008 the employee’s uniforms were redesigned to give the staff a modern and professional look.

The intention was to purge the common misconceptions about employees at McDonalds and promote the regenerated brand image to their customers. This was part of the ‘My McJob’ campaign which also was established to support the Page 5 of 8 People & Change Management Assignment 1 Liam Carpenter 01/03/2013 increase in demand in work because of the economic downturn. Team spirit, brand pride and brand commitment were the desired effects of the redesign, linked to promotional prospects and to provide greater incentives for further brand involvement. Mahnert and Torres, 2007) Lessons Learnt: In relation to the brand image of McDonalds, the initiatives that they employed were largely successful. The fact that in today’s labour market job seekers are considering McDonalds as not only a short term job but as an employer that can provide real career paths to success, is testament to the work that they have done. It also outlined how closely connected the HR and marketing departments were in the organisation. However there are many that believe that the real intention of McDonald’s initiatives was simply a well-disguised publicity stunt.

The fact that they reacted so slowly to changing the dictionary definition of ‘McJobs’ was looked upon as taking advantage of potential free advertising and that they were not really concerned with the definition at all. Publicity stunts have always been used by businesses as a means of advertising, none more effectively than that of Michael O’Leary of Ryanair. ‘New Marketing’ has produced modern takes on advertising and it is one of ‘shock sells, who bares wins, and gross is good. (Ridderstrale and Nordstrom, 2000) This is one that Ryanair has followed and many could see how McDonalds used the issue of the definition of ‘McJobs’ to their advantage. Despite the concerns about free publicity for McDonalds, many influential people backed the change in definition and for the most part people believed they were doing it for the right reasons. Their initiatives were very successful in building their brand image as an employer and becoming an employer of choice.

The figures of staff turnover and absenteeism reduced significantly, indicating that the initiatives were working and that employees appreciated the work that was being done, and in turn were committed in their work. There is a lot that other organisations can take from McDonald’s experiences. The retail and tourism industries across the world could examine the techniques McDonalds used and apply them in their own businesses. The stigma attached to these industries is one of short term employment and only for young people just out of school or on summer holidays.

Whilst these jobs are important stepping stones for young people, employers could increase their efforts in employer branding and provide attractive long term employment and development for young people. This in turn would decrease their staff turnover and dramatically improve employee engagement and productivity. These techniques could be key success factors for businesses going forward and preserving possibly the most important industries in every economy throughout the globe.

Posted in Uncategorized

Leave a Reply