Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 1

To: Professor Sk PemmarajuFrom: Waqas Sher ZamanSubject: Reward, Recognition & Performance Management of Employees in McDonald’s CorporationDate: 13/04/2014

Introduction:

In the ever changing and challenging business environment of today more and more business owners, organization or companies are looking constantly to improve the quality whereas reducing the costs. Due to this tight and competitive business environment employees are looking more and more towards their employers. One of the methods, to motivate employee’s to increase their performance that leads to change in work that serves as key to benefiting the organization, are reward and recognition programme for the employees. (1)

Methods Used By McDonald’s Corporation to Reward, Recognize & Manage Performance

of Its Employees: McDonald’s Corporation programme to reward, recognize and manage performance of its employees is designed in such a way that it attracts retain and engage talented employees that will help in motivating employees and thus making their employees to deliver more strong performance which in turn will help McDonald’s Corporation to achieve it business objectives and goals. (2)

Some of the methods used by McDonald’s Corporation to reward, recognize and manage performance of its employees are

A) Medical: McDonald’s Corporation offers it employees with three Preferred Provider Organization (PPO) medical plan options which utilize provider first health network. The plan contains different benefit levels and pay which has more in-network cost compared to out-of-network costs. These plans also include prescription drug program as well as unlimited lifetime benefits. Furthermore, medical plans of McDonald’s Corporation also includes preventive that covers employee annual physical exam as well as for family members also (max $400 per person every year). (3)

B) Dental: Dental plans offered by McDonald’s Corporation enables it employees to select the dentist of their own wish and choice including coverage of extensive dental service. 80% of most of the major and basic services are covered after deductible. Furthermore, 50% of orthodontia expenses both for children and adults are covered following one-time deductible. (3)

C) Profit Sharing & Saving Plans: Profit sharing and saving plan of McDonald’s Corporation allows it employees to save between 1% to 50% of their pay in a tax deferred

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 2

basis. Employee’s eligible for this plan has their contribution matched with $3 for every $1 of first 1% from the pay which they contribute, and $1 for every $1 on every next 4% from the pay that they contribute. Employees that become eligible for this award also receive optional profit sharing match that ranges from 0% to 4% based on first 1% from the pay that they contribute. (3)

D) Vacation: Paid vacation is offered to the employees of division, region, corporate including restaurant management employees. The vacation time offered to the employees depends on time how long the employee has worked in McDonald’s Corporation. Furthermore, part-time workers are also granted nine paid holidays if they are eligible for it. (3)

E) Sabbatical Program: Employees eligible for this programme can have eight week sabbatical in every 10 years of continuous full time service, in the company. (3)

F) Employee and Dependent Life Insurance: Employees are offered basic life insurance at no cost that is worth two time of base salary of the employee. Furthermore, additional life insurance can be purchased by employees themselves. Employee’s spouse and children basic life insurance is also provided without any cost. (3)

G) Incentive Pay: This programme allows McDonald’s Corporation employees with an opportunity to make total compensation when they meet the performance that is expected or exceed it. (3)

H) Recognition Programs: This programme is designed to recognize and reward strong performers within McDonald’s Corporation. This includes President’s Award and Circle of Excellence Award. (3)

Sources of information I would use to reward, recognize, and evaluate a subordinate’s performance:

The source of information which I would require and use to reward, recognize and evaluate a subordinate performance is listed below

1. To check whether the employee has met the performance standards which were set forth at the beginning of the project2. To ensure whether the employee has exceeded the performance standards which were set forth prior to the start of the project.3. To assess whether the behavior of the employee at workplace is exemplary or no4. To make sure whether employee has taken extra responsibility other than what is specified in his job duties and did it exceptionally well5. To assess whether employee work has helped the company to achieve its goals and to be more successful.

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 3

My Review on Methods Used by McDonald’s Corporation:

Based on the readings and my personal experience, I think that the methods used by McDonald’s Corporation are effective for enhancing both employee and business performance. The main aim to rewarding or giving recognition to employee is to motivate him for his better performance so that he can continue delivering high performance. This in turn helps the organization to achieve its business goals and objectives.

Furthermore, my reviews on McDonald’s Corporation method can be supported by the evidence that employee motivation is one of the key concepts around which the whole HRM of McDonald’s revolve as discussed in a web article published by Debbie Lovewell-Tuck. (4)

Employee Performance Measurement:

Performance measurement of an employee let the owner know employees’ compensation, opportunities for advancement and employment status. Due to this reason the performance management programmes should include methods that generate accurate and fair results of employee performance. In order to help with measurement of employee performance, the employer should establish performance standards in the beginning. Performance standards define what is required by the employees to meet or to exceed the company performance expectations. (5)

Three types of methods which I used to measure employee performance are listed below

a) Graphic Rating Scales: This method is ideal to be used for production-oriented work environment and those workplaces that move at very swift pace, specifically food and beverage industry. The rating scale primarily consists of a list that contains job duties, performance standards and scale which ranges from 1 to 5 for employee performance rating. One of the advantages of using this method is that can be completed very quickly and thus saves lot of times for managers and supervisors and, therefore, they can devote this time in other workforce management activities. (5)

b) Management by Objectives: This method is used to measure the performance of employees that are either in a managerial position or supervisory position. The method begins by first recognizing the goals of the employee and thereafter the employee and his manager prepares the list of the resources that are required to achieve these goals. The next step involves the period for achieving these goals. Employee and his manager meet constantly during the evaluation period to assess and discuss the progress of employees and to decide any other goals for which additional resources are required by employee to complete it. Hence, the performance of the employee is measured based on how many goal he has achieved within the stipulated time frame. (5)

c) Forced Ranking: Forced ranking method measures the performance of employee’s against

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 4

those of their peers, other than comparing employee’s current evaluation period with past performance of employee’s. (5)

Example on Exceeding Job Description:

Enhanced performance by an employee only occurs when employee’s do more than what is expected from them. Therefore, it is necessary for the managers to understand the difference between the employees that exhibit enhanced performance and those employees who are overstepping. For example, administrative assistant develops a database that make the more well-organized exhibits enhanced performance, but supervisor that rejects to hand over the work because of the fear that it might not be done correctly is not managing those under her appropriately.

How McDonald’s Corporation can improve its reward, recognition, and performance management processes:

Even though the reward, recognition and performance management process of employees in McDonald’s Corporation is one of the best among the world leading organization but still some factors are to be considered if McDonald’s Corporation wants to its reward, recognition and performance management process of employees. These are listed below

McDonald’s Corporation should involve all the employees in the creation, implementation as well as revision of reward programmes.

The company should make sure that awards and recognition which are given to the employees based on their efforts is viewed by employees as worth.

The organization has to make sure that the reward system is fair towards all employees and no discrimination is to be tolerated of any kind.

Rewards and recognition should be provided immediately to the employees without any difficulty faced by employees in receiving it.

McDonald’s Corporation should use some rewards that are long term because this has a high consequence on employee performance and results.

Rewards should be changed frequently which will make employee excited about achieving it, hence making them work harder.

One of the ways to improve the performance management of employees in McDonald’s Corporation is to let the employee assess their performance themselves. This will make them understand where they are and what they can do to improve performance.

Performance management process can be further improved by gathering information from a variety of sources other than few sources.

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 5

Employees should be helped to make them understand that their performance is linked with company goals and objectives

References

1. Inc. (2014), Employee Reward and Recognition System., Retrieved April 13th, 2014, from http://www.inc.com/encyclopedia/employee-reward-and-recognition-systems.html

2. McDonald’s Corporation (2014), Total Compensation., Retrieved April 13th, 2014, from http://www.aboutmcdonalds.com/mcd/corporate_careers/benefits.html

3. McDonald’s Corporation (2014), Restaurant Benefits., Retrieved April 13th, 2014, from http://mobile.mcstate.com/3024/benefits/

4. Employee Benefits (2014, McDonald’s Restaurants built on motivation., Retrieved April 13th, 2014, from http://www.employeebenefits.co.uk/benefits/staff-motivation/mcdonalds-restaurants-built-on-motivation/102953.article

5. Chron (2014), The Three Types of Methods Used to Measure Performance., Retrieved April 13th, 2014, from http://smallbusiness.chron.com/three-types-methods-used-measure-performance-23612.html

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 6

Reward, Recognition, and Performance Management

Total 100 points

Criteria Unacceptable Acceptable Proficient Student Positions and

Comments

Describes the methods the organization uses to reward, recognize, and manage the performance of its employees including sources of information to reward, recognize, and evaluate a subordinate’s performance.

Vaguely addresses and describes the methods the organization uses to reward, recognize, and manage the performance of its employees including sources of information to reward, recognize, and evaluate a subordinate’s performance or completely off the topic.

(0-11 points)

Addresses and describes the methods the organization uses to reward, recognize, and manage the performance of its employees including sources of information to reward, recognize, and evaluate a subordinate’s performance and, for the most part, fulfills assignment requirements.

(12-13 points)

Addresses and describes the methods the organization uses to reward, recognize, and manage the performance of its employees including sources of information to reward, recognize, and evaluate a subordinate’s performance and demonstrates solid ability to accomplish the assignment.

(14-15 points)

Discusses the effectiveness the methods described in the first criteria are for enhancing

Vaguely addresses and discusses the effectiveness the methods described in the first criteria

Discusses the effectiveness the methods described in the first criteria are for enhancing

Discusses the effectiveness the methods described in the first criteria are for enhancing

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 7

both employee and business performance and how the effectiveness is measured.

are for enhancing both employee and business performance and how the effectiveness is measured or completely off the topic.

(0-11 points)

both employee and business performance and how the effectiveness is measured and, for the most part, fulfills assignment requirements.

(12-13 points)

both employee and business performance and how the effectiveness is measured and demonstrates solid ability to accomplish the assignment.

(14-15 points)

Recommends how the organization can improve its reward, recognition, and performance management processes and provide a rationale for the recommendations.

Vaguely addresses and recommends how the organization can improve its reward, recognition, and performance management processes and provide a rationale for the recommendations or completely off the topic.

(0-11 points)

Recommends how the organization can improve its reward, recognition, and performance management processes and provide a rationale for the recommendations and, for the most part, fulfills assignment requirements.

(12-13 points)

Recommends how the organization can improve its reward, recognition, and performance management processes and provide a rationale for the recommendations and demonstrates solid ability to accomplish the assignment.

(14-15 points)

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 8

Integrates established HRM principles into the discussion.

Rarely integrates established HRM principles into the discussion.

(0-7 points)

For the most part, does a good job of integrating established HRM principles into the discussion.

(8 points)

Consistently does a good job of integrating established HRM principles into the discussion.

(9-10 points)

Synthesizes relevant information and materials to provide evidence of critical thought.

Synthesizes information at a minimal level.

(0-7 points)

For the most part, effectively synthesizes information, which supports main ideas.

(8 points)

Consistently and effectively synthesizes information, which provides strong support to main ideas.

(9-10 points)

Develops ideas with clarity and logic.

Demonstrates little clarity and logic. Readers have difficulty following the line of reasoning.

(0-7 points)

Develops ideas with clarity and logic. Readers can generally follow the line of reasoning.

(8 points)

Develops ideas with clarity and logic. Ideas flow smoothly from one to another and are clearly linked to each other.

(9-10 points)

Uses concrete language.

Inadequate or minimal use of proper terminology in the field(s). Provides no specific examples or uses inadequate examples.

(0-7 points)

For the most part, uses proper terminology and provides specific examples.

Consistently uses proper terminology and provides specific examples to support ideas.

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 9

(8 points) (9-10 points)

Uses supporting documentation that has been properly references and cited.

Inadequate or minimal use of supporting documentation or not properly referenced or cited.

(0-3 points)

For the most part, uses supporting documentation that is properly referenced and cited.

(4 points)

Consistently uses supporting documentation that is properly referenced and cited.

(5 points)

Considered holistically, demonstrates the ability to write at the graduate level.

Considered holistically, the student demonstrates an inadequate ability to write at the graduate level.

(0-7 points)

Considered holistically, the student demonstrates an acceptable ability to write at the graduate level.

(8 points)

Considered holistically, the student demonstrates a proficient ability to write at the graduate level.

(9-10 points)

SubTotal Points =

Paper 4, MBA 713-01, By Waqas Sher Zaman, Prof. SK Pemmaraju, March 13th, 2014, pg. 10

Turnitin.com Did not turn paper into Turnitin.com

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Revisions based on the originality Report.

Did not revise paper based on the originality report

Minus 5 points

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Total Points =