Mcdonalds Case Study

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People & Change Management

Assignment 1

Liam Carpenter 01/03/2013

People and Change Management Assignment 1 Galway Business School Liam Carpenter Course: BA Business Management Student Number: 123788

Contents Introduction HR Issues Implementation Issues Lessons Learnt References 2 2 4 6 7

Page 1 of 8

People & Change Management

Assignment 1

Liam Carpenter 01/03/2013

Introduction: 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 and 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...
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