Case study: McDonald’s Restaurants: aligning reward strategy to
business objectives through employee engagement
Overview and background
Tis case study shows how a company with a strong culture of measure-ment has built its own methodology and produced evidence to demonstrate how rewards can enhance employee engagement and thereby business
Growing out from their frst outlet in California in 1948, McDonald’s now
have over 31,000 restaurants in 118 countries. Tey frst opened in the UK
in 1974 and now have almost 1,200 restaurants here, which are a mixture of
franchised and company-owned and run. Franchises are run as autono-
mous businesses, although the UK parent company ofers the benefts it
ofers to its own staf to its franchisees wherever possible.
Te company employs more than 70,000 people in the UK, three-quarters of
whom are under 25 years of age (the so-called ‘Generation Y’s). For 10,000
of them, McDonald’s is their frst employer.
Starting in 2006, the ‘Not bad for a Mcjob’ recruitment advertising
campaign has profled the attractive rewards and opportunities available in
the company, with the landmark digital-advertising sign at Piccadilly Circus
being used as part of the programme. Te new Bruce Oldfeld-designed
staf uniforms are just one visible component of this image shif.
Te company’s investment in, and approaches to, fexible working,
training and reward have all won external commendation and awards.
McDonald’s was one of the frst companies to be awarded the new advanced
Investors in People standard. It has been rated in Te Times’ Top 100 gradu-
ate employers for the last six years and in the Financial Times’ Best Workplace
listing. In 2008 it was accredited to award its own qualifcations and in 2009
the company plans on training 6,000 apprentices, providing them with
a nationally recognized qualifcation in multi-skilled hospitality – the
equivalent of fve GCSEs. When this number increases to 10,000 apprentices
a year from 2010, it will make McDonald’s the country’s largest apprentice
provider. According to Fairhurst, ‘it’s vital that we invest in skills and training
now to ensure that the sector is ready to shine when the UK emerges from
The driver and the success measure for reward: business
‘If it moves, we measure it.’ Neal Blackshire, Benefts and Compensation
Manager at McDonald’s sums up the highly disciplined and performance-
oriented management approach in the company, and reward management
is no exception. Te nature and costs of any new plans are rigorously
scrutinized and monitored.
Yet what is sometimes surprising to outsiders in a frm that hasn’t always
enjoyed the most positive media coverage is just how genuinely employee-
oriented the company is, with a wide variety of fnancial and non-fnancial
rewards available to all levels and types of their employees, as we describe
below. Tis comprehensive package is driven and supported by McDonald’s
own internal research, demonstrating their version of the people-proft chain.
A number of research studies in the UK have followed the initial work by
IES and at Sears in North America in demonstrating strong associations
between employee satisfaction, customer satisfaction and fnancial
performance. Rather than rely on external evidence however, McDonald’s
have demonstrated and proved the linkages across their UK outlets for
themselves (see Figure 4.2).
Employees’ engagement is measured using the frm’s annual ‘Your Viewpoint’
survey, a long-term tracking study of employee opinions. With an 83 per
cent response rate in the UK, it is taken seriously by management and staf.
And the results of greater employee engagement on customer service and
business results are clearly evident.
Te McDonald’s model breaks the contribution...
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