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Discussion

Discuss about the Retaining Talent with Salary Packaging Organization.

In today’s world, money plays the vital role. The attractive salary package motivates the employees to work with more efficiency. The salary package has to be alluring enough to draw the attention of the job seekers (Fonarow et al., 2015). The organisations introduce innovative monetary schemes that attract the workforce and future leaders. The study will thus discuss the recognition scheme introduced by McDonalds. The theories will identify the effectiveness of the high salary scale that motivates the employees to work with more efficiency. The human resource approaches of McDonalds towards the non-profit organisation will also be described in this study.

Staffs in the fast food chains are expected to have a positive attitude towards their job profile. The fun-loving environment, the fair pay, suitable benefits, and supportive management team are the major reasons behind such employee satisfaction. McDonalds deals with almost 37,000 employees who are quite happy with the business environment (B.co.uk, 2017). The company always takes the hands-on approaches to provide sufficient benefits to the associates. In order to establish a reputed organisational culture, the company has been paying attention towards the quality, cleanliness, services, and value. The recognition scheme of McDonalds is another most significant approach for retaining the employees. The recognition schemes introduced by McDonalds to establish the employee welfare are as follows:

The company follows the “pay for performance” philosophy. When the employees perform better, they have more pay opportunities. According to Neckermann, Cueni and Frey (2014), basic pay is the fixed cash amount that the employees get by working for a month. This basic pay is determined by comparing the fixed salary of the other similar organisation. McDonalds set the salary structure of the employees by depending on their skills, experiences, performance, and contribution over time. The short-time incentives are variable unlike the basic pay. The incentive can be earned in a yearly or monthly basis. In McDonalds, the rewards are based on the annual performance of the individuals and business. This measurement is tied with the business strategy implemented by the company (Emerson & Prang, 2016). The yearly payouts are aligned to the annual performance. This scheme is much supportive to increase the performance productivity.

Among the long-term incentives, McDonalds provides the LTI Stock Awards to the employees who are eligible enough for creating link between the current business and future performance. This scheme is applied to those employees who have the potentiality to grow in the future and generate a huge amount of profitability for the organisation. The recognition programme at McDonalds based on the string performance parameter of the associated employees. The diverse recognition programmes are held for the different corporate offices. For example, the company arranges the President’s Awards for the regional and division office.

Efforts towards employee welfare

This award is given by depending on the top1% of the individual performers worldwide (Corporate.mcdonalds.com, 2017). The company organises the Circle of Excellence Award, which is given to top team strengths worldwide (Corporate.mcdonalds.com, 2017). The award helps in recognising the contribution of the teams for advancing the vision of McDonalds. The recognition programme arranged by McDonalds is mainly focusing on welfare of the employees. The organisational culture emphasises the people development and human resource efficiency (Leekha Chhabra & Sharma, 2014). The effective organisational culture helps in business growth that leads to success. McDonald’s organisational culture depends on the following features.

  • People-centricity
  • Organisational Learning
  • Individual Learning
  • Diversity and Inclusion

The organisational culture of McDonalds is mainly focusing on prioritizing the needs and developments of the associated employees (Thompson, 2015). The values and standards of the business signify the importance of the employees’ engagement. The recognition programme introduced by McDonalds emphasises on supporting people and motivate them with proper pay scales. The management of the company believes that the employee engagement is the key to improvise the organisational functionalities. The recognition programme is thus much beneficial for the company to retain the employees and bring more efficiency to their performance parameter.

Appelbaum (2013) opined that recognition leaves a positive impact in the mind of future leaders. In order to encourage the employees towards reaching the business goal the importance of business leaders is highly important. Recognition scheme is one of the major tools with the help of which business organizations tend to motivate the leaders to perform well. As per the business policy of McDonald, the existing business leaders get additional incentive scheme for performing well and for encouraging the team members. As a result, the future leaders get motivated and encouraged after observing the appreciation level of McDonald to the existing business leaders. Motivation is one of the most important factors to provide good performance for business services. As stated by Epstein and Buhovac (2014), due to the implementation of recognition scheme, the employee attrition rate of McDonald has been automatically decreased. In last few years, it has been observed that McDonald was suffering from severe employee turnover. The leaders intended to follow autocratic form of leadership at the workplace.


Employees did not get enough scope to share their point of views regarding the business goal. Business leaders wished to impose their decision on the employees. In this kind of situation, the rate of employee turnover had been raised rapidly. In order to overcome this kind of situation, the business experts of McDonald had decided to implement some appreciation schemes such as quality bonus, production incentive schemes and so many. This kind of motivational initiatives highly influenced the future leaders to provide their best endeavour towards business process and services. In addition, after receiving several recognition schemes, business leaders intended to follow participative leadership style at the workplace. The primary purpose of following participative style at the workplace is making collective decisions regarding business strategies and policies. Employees got immense opportunities to share their own opinion regarding the business goal. As a result, the interpersonal communication between the employees and the leaders become effective.

Recognition programme at McDonald's

The individual performance of every single future business leader is possessed with the capability of enhancing the team performance. The motivation level of a team is highly dependent on the capability of business leaders to run the team. Maintaining interpersonal communication at the workplace, treating every individual employee with equal respect and dignity are the necessary ways of receive effective team performance. The business experts of McDonald thus have decided to apply various recognition schemes at the workplace for the future business leaders for motivating them towards teamwork.    

The theories that have been introduced to highlight McDonald’s recognition schemes include expectancy theory and agency theory. The recognition scheme introduced by McDonalds highlights that the company prioritises the associated employees in a significant way. It is even noticed that the company launched several reward facilities along with the high pay scale. These initiatives have generated the sense of expectancy among the associated workers at McDonalds. Recognising such expectation levels and people development, the following theories can be described.

Victor Vroom introduced the expectancy theory of motivation. The theory assumes the employees’ behaviour that results from the conscious choices among the available alternatives (Purvis, Zagenczyk & McCray, 2015). The theory indicates the relationship building factors at the workplace between the employees and the management faculty. Several concerned areas can motivate the spirit of the employees. The theory indicates that there is the strong linking between the efforts and the performance of the employees. The efficient performance parameter of the employees will result the expected rewards (Ifm.eng.cam.ac.uk, 2017). The reward facility would serve one significant purpose of the organisation that will lead towards success. It is noted that the expectancy level of satisfying the need motivates the employees to put more efforts in performing the organisational functions.

The expectancy theory follows some of the beliefs, such as valence, expectancy, and instrumentality. According to Purvis, Zagenczyk and McCray (2015), valence determines the emotional orientations of the people. An employee generally opts for proper salary structure, promotions, benefits, and time-offs. In addition to these needs, the employees even seek for the recognition or rewards for their career development. The management has to take the responsibility to value such needs of these employees to retain them and bring the efficient performance outcome.

An employee may have different expectations and level of confidence about their capabilities. The management team of an organisation must discover the value and potentiality of the employees for satisfying their expectations. The Instrumentality approach indicates the perception of the employees about the fulfilment of their desires by the management. The management needs to ensure that the employees will get the benefits promised by the organisation. Victor Vroom suggested that these expectancy, valence, and instrumentality together create the motivational factors for the employees. These motivations create the sense of pleasure among the employees. As a result, the efficient performance outcome increases the entire organisational productivity.

Theories supporting McDonald's approach


The recognition scheme undertaken by McDonald suggests another most relevant theory of employee engagement. The formulation of Agency Theory focuses on several terms and conditions. The principal would employ an agent to carry out any functionality on their behalf. Agency is depended on the effective relationship between a principal and the agents. The costs of the agency will be incurred from the performance monitoring process of the principal (Bosse & Phillips, 2016). The agency theory presents the separation between ownership and control. The agency theory explains the relationship between the principals and agents in the business. In order to establish a structured organisational culture, it is essential to separate the concept of ownership and controlling (Bosse & Phillips, 2016). When the management is able to meet the expectation level of the employees, it inspires them to work with proper efficiency. Therefore, it is necessary to separate the controlling power from the ownership process.

The formulation of these two theories is appropriate for the recognition scheme introduced by McDonalds. It generally specifies the effective relationship between the employees and the management. Moreover, when the employees are motivated enough by such monetary benefits, the outcome of their performance will be remarkable (Emerson & Prang, 2016). Hence, it is essential for the management to keep the record of their performance level. Accordingly, the recognition programmes will be arranged. In fact, during the financial month, the company can even introduce more schemes for employees’ welfare. More specifically, McDonalds is much concerned about retaining their employees by providing them all such facilities and higher pay scales (Poole & Jenkins, 2013). The theoretical concepts are highlighting the employee benefits that are proven to be more fruitful for organisational growth. The management of the human resource is one of the major concerns that the company needs to follow for strengthening the competitive position (Bosse & Phillips, 2016). The further section of the study will present such hands-on approach undertaken by McDonalds for establishing the organisational culture. 

In this particular essay, detailed analysis has been pointed out whether McDonald’s approach to manage human resources would be directly applicable in a non-profit organization such as the Spastic centre. A large number of contemporary scholars have showed their different opinions on how the human resource management process of a food centre service is applicable to a non-profit business organization.  The primary mission of Spastic Centre is to provide necessary supports to the children as well as adults regarding cerebral palsy. Therefore, the non-profit business organization like Spastic Centre intends to maintain the human resources by providing numerous facilities and benefits. Giedion, Alfonso and Díaz (2013) stated that an individual person associated with a non-profit organization is possessed with social recognition. The human resources get an additional recognition and appreciation to any social events even to the government. Therefore, a large number of people tend to show their interest for being associated with the non-profit organizations. On the other hand, Grant (2012) has differed the point of view of pervious scholar. This particular author has pointed out that the salary package of the employees of McDonalds is higher than Spastic Centre. In other word, it can be highlighted that better salary package is one of the most effective ways of employee retention for the organization like McDonalds.

The recognition schemes of McDonalds are constituted with several segmentations such as long-term incentives, short-term incentives, pay for performance, quality bonus and so many.  On the other hand, the non-profit organizations like Spastic Centre do not like to maintain various segmentations within the salary packages due to limited revenue sources. Therefore, the procedures of maintaining employee relation or employee motivation between McDonalds and Spastic centre are different.


Therefore, diverse schemes are the most effective procedure of employee retention for the company like McDonalds.  At the end of the year, the business experts tend to provide rewards to the employees as well as their leaders for motivating them towards business process. On the other hand, non-profit organizations such as Spastic Centre is endowed with specific business goals with the help of which people from different cultures and backgrounds are entertained within the business process. As per the opinion of Grant (2012), the organizational managers like to show equal respect and dignity to the people of every cultures and backgrounds. As a result, employees tend to maintain an effective communication at the workplace of Spastic Centre. Kersley et al. (2013) has strongly differed the point of view of the previous scholar. This particular scholar has stated that employees of non-profit business organizations like to provide volunteer services to the target customers. Therefore, the responsibility of the employees is flexible enough. Employees do not have to sign any contract paper in order to survive within the workplace of Spastic Centre. On the other hand, the employees of McDonalds are not allowed to deliver any voluntary services. Therefore, before leaving the business organization, the employees have to fulfil some of the procedures. 

Conclusion:

The entire study has provided an in-depth analysis on the importance of recognition schemes for motivating the employees towards reaching business target. Different kind of recognition schemes of McDonald has been discussed in this particular study. An effective critical analysis by involving the point of views of numerous scholars has been presented in this particular study in order to evaluate the impact of sufficient salary package for retaining the business employees. With the help of two theories named expectancy theory and agency theory, the study had focused to highlight on how employees as well as the business leaders can be motivated to perform well at the workplace of McDonald.

Reference List:

Appelbaum, E. (2013). The impact of new forms of work organization on workers. Work and Employment in the High Performance Workplace, 120.

B.co.uk, (2017). McDonald's Restaurants Ltd in Accreditation 2015. [online] B.co.uk. Available at: <https://www.b.co.uk/Company/Profile/312919> [Accessed 3 Feb. 2017].

Bosse, D. A., & Phillips, R. A. (2016). Agency theory and bounded self-interest. Academy of Management Review, 41(2), 276-297.

Corporate.mcdonalds.com, (2017). Salary & Incentive Compensation - McDonald's :: McDonald’s. [online] Corporate.mcdonalds.com. Available at: <https://corporate.mcdonalds.com/mcd/corporate_careers/benefits/highlights_of_what_we_offer/pay_and_rewards.html> [Accessed 3 Feb. 2017].

Emerson, L., & Prang, Y. (2016). Compensation and Benefits: Company-Provided Benefits at McDonald’s. In Handbook of Human Resources Management (pp. 939-950). Springer Berlin Heidelberg.

Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.

Fonarow, G. C., Calitz, C., Arena, R., Baase, C., Isaac, F. W., Lloyd-Jones, D., ... & Volpp, K. G. (2015). Workplace wellness recognition for optimizing workplace health. Circulation, 131(20), 480-497.

Giedion, U., Alfonso, E. A., & Díaz, Y. (2013). The impact of universal coverage schemes in the developing world: a review of the existing evidence. Washington, DC: World Bank.

Grant, A. M. (2012). Giving time, time after time: Work design and sustained employee participation in corporate volunteering. Academy of Management Review, 37(4), 589-615.

Ifm.eng.cam.ac.uk, (2017). Vroom's expectancy theory. [online] Ifm.eng.cam.ac.uk. Available at: <https://www.ifm.eng.cam.ac.uk/research/dstools/vrooms-expectancy-theory/> [Accessed 3 Feb. 2017].

Kersley, B., Alpin, C., Forth, J., Bryson, A., Bewley, H., Dix, G., & Oxenbridge, S. (2013). Inside the workplace: findings from the 2004 Workplace Employment Relations Survey. Routledge.

Kfknowledgebank.kaplan.co.uk, (2017). Agency Theory [online] Kfknowledgebank.kaplan.co.uk. Available at: <https://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Agency%20theory.aspx> [Accessed 3 Feb. 2017].

Leekha Chhabra, N., & Sharma, S. (2014). Employer branding: strategy for improving employer attractiveness. International Journal of Organizational Analysis, 22(1), 48-60.

Neckermann, S., Cueni, R., & Frey, B. S. (2014). Awards at work. Labour Economics, 31, 205-217.

Poole, M., & Jenkins, G. (2013). The impact of economic democracy: Profit-sharing and employee-shareholding schemes. Routledge.

Purvis, R. L., Zagenczyk, T. J., & McCray, G. E. (2015). What's in it for me? Using expectancy theory and climate to explain stakeholder participation, its direction and intensity. International Journal of Project Management, 33(1), 3-14.

Thompson, A., 2015. McDonald’s Organizational Culture Analysis. Panmore Institute of Business Management.

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