The aim of this report is to debate on the significant issue of recruitment and retention in detail that comes under Human Resources (HR) department in research organisation McDonalds UK and recommending some points ensuring lower turnover rate.

The success of restaurants is normally assessed on the standards of Quality, Service and Cleanliness which it is able to deliver. These are totally dependent on the quality of the people restaurant is able to recruit and retain.

Retention is inversely proportional to turnover, the high retention mean low turnover and vice versa. Apparently McDonalds is a well reputed company appearing to be perfect but things are a bit complicated. In spite of company’s systematic efforts there are various loopholes that encourage employees to look for another job causing harm to the brand name, profit and involve costs.

The restaurant job is indeed stressful and demanding which can be made better but unfortunately certain flaws in recruitment process, management behaviour and organisational structure make employees de motivated, frustrated, annoyed especially due to the kind of attitude they get from most of their managers making it worse for them to stay.

Being a beaurocratic organisation communication with the higher officials is a headache and has to go step by step making it time consuming.

Recommendations like treating employees as customers; encouraging new ideas and initiatives, involving employees in decision making, especially those that directly affect them, providing employees with a sense of ownership in their work and their restaurant, giving employees a chance to grow and learn new skills, taking time to hold frequent team meetings and organise external activities, recognising, rewarding and promoting employees based on their individual

Performance and sense of security can definitely reduce the turnover rate. Suggested recommendations may take a while to implement but in reality can bring a positive change in a race of competition.

Introduction

McDonalds in one of the largest fast food restaurant chain in the world which was founded by Richard and Maurice McDonald in San Bernardino, California[1] having more than 1300 restaurants and 80,000 employees working for them in UK only.

McDonalds hire 24000 employees per year and almost the same number of employees leaves each year making its turnover rate quite higher.

The term turnover means number of people leaving the company divided by the number of people hired in a year. The report further discusses retention and high turnover issues in McDonald’s.

The issues with retention and high turnover lead to many problems which can be critical for company’s profit, sales and the overall reputation.

The topic of the report is to discuss these issues in detail and to recommend possible solutions for these issues faced by the research organisation.

Brand damaging, time consuming, cost, overall sales, and customer frustration, long time to serve customers, forcing customers to go to competitors are internal and external impacts respectively.

Analysis of problems

1 Recruitment and Selection Process

Initial process considered equally important for both organisation and employees, according to official figures approximately 2000 applications McDonalds receive per day and only 1 out of 15 candidates is selected. There are certain defects in the recruitment and selection process which leads to the biggest problem of retaining staff which mc Donald’s is currently having. This section aims to further elaborate minute and precise issues related to the recruitment process.

Candidate applies online and completes their

psychometric test

OJE/Interview

Welcome Meeting

1.1 Recruitment Period

According to the company’s policy recruitment period should not exceed more than 28 days but in reality it is much more than that and normally reaches up to 60 days making candidates frustrated due to which they prefer to find another job rather than waiting impatiently for their turn. Many potential candidates are lost due to this lengthy recruiting process which will cause damage to any organisation without a doubt.

1.2 Psychometric Testing

The introduction of psychometric test is definitely a great initiative by McDonalds, helping it to save a lot of money and efforts, this test enables recruitment officers to look at various personality aspects of a candidate and select an individual suited best for the job, the passing rate of this test is surprisingly high, around 73% of the candidates actually pass this test. The basic idea of this test is to handle and go through with high number of applications quickly and efficiently but still long time is taken to get back to the candidates.

1.3 Hire the Smile

It is the primary and essential tool that McDonald has defined for recruitment of employees making their service alive and to make all their customers feel valued. Customer interaction is very important especially for a fast food business.

An appealing smile and engaging truly with customer to make them feel special every time they come are necessary features that a crew member needs to maintain.

Hire the smile consists of six core competencies specially designed to identify and recruit best suited and competent person for desired position.

Each competency is briefly described below

1.3.1 Job Fit

Ambition to work as a crew member, accept and appreciate job.

1.3.2 Team work

Work as a team member, listen and cooperate with others, set aside personal issues and moreover help in the overall success of McDonald’s team.

1.3.3 Speed

Work quickly and continuously while on a shift which includes taking and processing of order in nominal time.

1.3.4 Accuracy

Ensuring the order is prepared as desired with nothing missing which otherwise may annoy customer.

1.3.5 Customer Engagement

Understand the needs of customer, promoting new and better deals and suggesting best alternative if customer’s first choice is not available.

1.3.6 Personal Interaction

Communicating with a loud and distinct voice, Using eye contact and smiles to express friendliness and keen interest.

1.4 On Job Evaluation (OJE)

On Job Evaluation or OJE is the second and kind of a practical part of an interview conducted by business manager of the restaurant , in which candidate is given opportunity how he/she interacts with customers and handle activities , OJE does not take that long and normally ends within 30 minutes.

Conducting an effective OJE requires some prerequisites that are detailed below

It is very important to familiarize the candidate with the environment and make him/her understand that it is part of recruitment process which is without pay.

In case of any disability candidates should be provided with appropriate assistance

The candidate is introduced with a fellow crew member who will be assisting him/her during OJE

For safety reason OJE should be performed either in dining section or front counter only and the candidate’s task should only be associated to interaction with customers not with any kind of equipment.

In spite of such an ideal model unfortunately recruitment is not done according to Hire the Smile and OJE process because of some notable reasons.

Since recruitment is mostly done by the restaurant manager therefore the manager has to make sure it is done according to the predefined procedure but sometimes the managers are not given necessary recruitment training. OR

Because of the busy shifts like restaurants in central London, managers are so busy doing so many different things that they don’t even have time to relax the candidate which is an essential part of interviewing process and therefore selection is done based on few basic questions, past experience and most of all reference, skipping the vital abilities which could have been seen if Hire the smile and OJE was taken in account.

The result of this is in form of losing potential candidates since it is a very stressful and demanding job, most of the newly selected candidates get a shock of work load and quit within the probation period which in business terms is called “ninety days turnover” which is very high in case of McDonalds.

2 Management Behaviour

The behaviour of management staff plays vital role in either retaining or losing of staff and is directly associated to the crew effectiveness, output, satisfaction and turnover.

In order to achieve healthy and constructive work environment motivation and encouragement is really important and the easy way is to treat employees exactly as a manager wants him/herself to be treated.

Being a researcher I had a chance to meet few crew members of McDonald’s and the shocking part was most of the crew members were complaining and seemed unsatisfied with their managers, further discussion lead to some serious issues due to which most of the crew members prefer to quit and those are :

2.1 Scheduling

Restaurant managers are always pressurized by their line managers to save labour and show profit , due to which a limited amount of staff is scheduled usually who is experienced in both kitchen and front counter, since crew members are on daily wages ,if they don’t get scheduled than they do not get paid, apart from that sometimes managers assume low work load on a certain day and they schedule less staff though it turns out to be a very busy day leaving scheduled staff with stress and tiresome while unscheduled staff without work.

2.2 Favouritism

Favouritism and scheduling are very much related to one and another. Some crew members are manager’s favourite and are treated completely differently either they are close friends or of same race or religion or dating managers therefore these favourites get scheduled frequently , get more work which leads to more pay , at the same time violating McDonald’s policy of strictly “NO” to questions like age , race , religion , marital status , sexual orientation etc.

2.3 Performance related Pay

It is believed that money can work as a powerful motivator and it is true to quite an extent, restaurant job at McDonald’s not only requires lots of efforts but also mental presence which can only be present in the absence of stress, a restaurant crew member gets minimum wage which is an injustice to all that hard work he/she puts in for such a tough job,

2.4 Lack of motivation

Motivation is an amalgamation of encouragement, kindness, team spirit, trust, respect, communication and constructive criticism. Giving reward is the best way to motivate someone, as a company McDonald’s offer brilliant benefits to its employees like holiday pay, maternity leave, crew room computers, free Mathematics and English GCSE, discounts, career progress and training.

Since crew members are not told what benefits are being offered they may show lack of interest, laziness, nervousness which leads to blunders that usually disappoint customers.

Moreover a low chance of promotion unless someone is manager’s favourite is a big reason for lack of motivation.

2.5 Sabotage

” Sabotage is a deliberate action aimed at weakening another entity through subversion, obstruction, disruption, or destruction ” [2].

When employees do not get acceptable treatment from their managers, they tend to get frustrated and this reaction is either in form of quitting or sabotaging at work place.

Since we are going through a recession period with limited jobs in the market therefore leaving a job is not a good idea so most of the crew members take out their anger by damaging equipments, burning food or stealing different things.

A crew member is only allowed to have one regular size meal in 8 hours of shift which is not enough especially if it is a busy and hectic restaurant environment which force crew members to steal food which is highly unethical for both employees and organisation.

2.6 Security

“Customer is always right “policy is followed by almost every restaurant including McDonalds which sometimes can go against them.

Crew members working at front counter experience different types of customers, they can be frustrated, annoyed, racist or drunk and can abuse or even attack employees.

In such occasional cases managers mostly favour customers leaving behind employees with a sense of insecurity.

3 Bureaucratic organisation

Bureaucratic organisations adopt tall hierarchy .One way communication is one of the characteristics. Because of so many channels it takes long time to get a decision implemented making it difficult for crew members or people at the bottom of the hierarchy to communicate with high officials.

Fig (1)

As shown in the fig (1)[3] bureaucratic organisation has to go through different networks.

4 Retention

Retention is to have employees for a long term. Keeping the above mentioned issues in mind it is very easy to lose staff therefore retention can become a problem which is the case in the Organization under discussion.

Ensuring that everything is being done to attract good quality applicants is essential .However losing sight of the significance of retention is very simple.

High turnover will lead to rise in operating costs, which eventually can result in reduced Quality standards, Service and Food Safety, due to the following factors:

Not enough time to train employees

Poor quality training

An inexperienced and less productive workforce

Poor teamwork and low morale

High hourly paid labour costs

Less than optimum profitability

Non realization of employees potential and capabilities, resulting in even greater turnover

5 The Cost of Turnover

Turnover is an avoidable cost to the restaurant. However because money is not physically handed over each time a crew member quits, turnover is often a hidden cost. Here is the average cost for each new employee

Administration £55

Orientation £10

Training £80

Uniform £32

Administration costs include the Business managers/Crew recruiter’s time to conduct interviews and Welcome Meetings.

Recommendations

To deal with the issues mentioned above following recommendations are suggested:

6 Recommendations for Recruitment

Hiring needs are necessary to know, when to recruit new staff and considering the business demands. Assign a well trained recruitment manager especially for the recruitment purpose in every restaurant to look after a whole process rather than a single manager looking after other things going on in the restaurant as well.

Planning ahead is very important and necessary staff should be recruited well ahead before busy sessions like Christmas, Easter and summer.

Time frame should be reduced to get back to the shortlisted candidates who have already been through psychometric test and waiting for their interview turn.

Follow proper hire the smile and on job evaluation (OJE) guide provided by the company which helps in:

A more professional recruiting system

Consistent across the country

It strengthens the Brand

It helps make the right hiring decisions

Assesses behaviours and personality

7 Recommendations for Retention

Proper training for the managers to treat and look after the staff before they step into their role. Close supervision should be put into action to check if managers are following correct procedures and behaving properly with the crew

Retention can be achieved by improving following areas

Recognition and Motivation

Communications and crew opinion

Rewards and Benefits

Training

7.1 Recognition and motivation

Motivation of staff plays a fundamental role for a company to work effectively.

Performance assessment, if conducted correctly, can be the biggest motivational tool to praise, recognise improvement, offer encouragement and provide coaching. These may improve the employee’s outlook and help to discover more about that person and their expectations from McDonald’s.

Employees should be encouraged and appreciated quite often so that they feel good about themselves and their position, for example using incentives like employee of the month, promotion and extra responsibilities.

When employees know that the management team as a whole are interested in and care about their development makes employees feel valued.

To let employees have the opportunity to raise any concerns they should be given right to ask questions.

7.2 Communications and crew opinion

Hourly Paid employees are more likely to speak openly about any problems they are going through or make recommendations to a person who is not linked to the restaurant. In this regard, communication sessions are a constructive tool in realizing problems employees may have in the restaurant that could be leading to high turnover.

Communication Sessions should be followed up with a crew meeting within few weeks periodically. During this meeting, any points which were lifted during the communication session should be debated and the management team should promise to take actions and resolve the problems, also

A time frame should be placed on how long it will take the management team to resolve any particular issue.

Any promotions within the team should be announced at crew meetings,

Employee of the Month and any national product or promotional launches should be discussed. Crew meetings should also be used to discuss any problems the restaurant may be having and

Alternatively inform of achievements/successes of the restaurant.

Crew meetings can help to create teamwork. The more employees know about the results of the restaurant, the more interested they will become in their job.

Attendance at meetings will improve if everybody is motivated to attend. Try awarding spot prizes for good suggestions/contributions, etc.

7.3 Crew opinion surveys

Employee perceptions about restaurant’s work environment are very important to the success of restaurant because they determine dedication of employees.

Regularly surveying employees opinion to discover their commitment and what changes they need to make improvement can be helpful.

7.3.1 Leaving interviews

Whenever an employee resigns, an exit interview should be conducted.

The purpose of this will be to find out exactly why the employee is quitting and to learn whether anything could have been done to prevent this. They can also be used in a positive way as once the interview is conducted steps can be taken to ensure no other employees are lost for this particular reason in the future.

7.4 Rewards and benefits

The use of incentives will help to create a motivated team. They should not, however, be used in the everyday running of the business or eventually employees will not be productive unless they are receiving something in addition to their wages. Incentives should be used at specific times to show how much someone’s hard work is appreciated, or to recognise exceptional performers.

Always remember to make sure that any recognition reward is made sincerely and genuinely to the individual. Regular restaurant activities/outings go a long way in creating a spirit of teamwork and high morale within restaurant. Many restaurants have their own football teams.

This means inter-store competitions can be held which can result in more local restaurants working closer together. It would be a good idea for the manager to work alongside an hourly paid employee committee who could help generate suggestions of activities and also help to organise them. Other local retailers/community groups may also have activity teams.

Crew members are normally not aware of the benefits being offered so there should a proper platform where existing and new benefits or awards should be advertised to make them aware of privileges McDonald’s as company offer.

7.5 Training

Well-trained crew will deliver better customer satisfaction and enjoy their job more. The Crew Development Program has been designed to quickly teach station procedures and responsibilities for both new and experienced employees.

Initial Training is an area of great importance. It is essential that new starters are looked after and that time is dedicated to their training. They should be ‘buddied up’ with an experienced Crew Trainer, which will ensure that new starters become as productive as possible, as quickly as possible.

8 Other recommendations

Trust as employer and company – (trusted brand) increase sales

Initiatives like treating candidates as customers and training and following up to see if it is being implemented cheap/cost effective but time consuming.

Change organization structure very expensive, time consuming, risky but can be an option. Lots of resistance.

Open and two way communication between crew and management.

Increased security for employees (right not to serve customers if they are rude)

Critical Analysis & Conclusion:

McDonalds is indeed one of the best fast food restaurant chains in the world that has huge amount of employees working for them. The amount of crew members leaving each year is almost equivalent to the amount of people recruited same year not only increase various costs but also spoil overall reputation due to which people might not want to work in McDonalds restaurant. Due to recession some employees cannot afford to leave an existing job therefore rather than enjoying, their work becomes burden for them and they may try to behave carelessly, inefficiently or even may sabotage the company, as a result something like in a Southampton’s restaurant happens in which a cigarette was found in a kids meal and the company was sued for it. Since our only focus is to suggest how turnover can be reduced therefore three major areas have to be improved and rectified which are recruitment process, management behaviour and organisational structure. The recommendations seem achievable but require close monitoring and supervision which may not be easy due to the busy environment in the restaurants, change in management team might wipe out these practices altogether.

Appendices

Appendix A

Applications and Hires – Last 12 Months

Source : provided by McDonalds Recruitment Officer

Appendix B

Hiring Ratios

Source : provided by McDonalds Recruitment Officer

Appendix C

Time to Hire

Restaurant Number

TTH

Turnover

Company Average

38.05

30.02%

737 Chingford Fountain

60.17

96.69%

953 Newbury Tothill

27.16

95.58%

1339 Calcot

38.48

90.68%

483 Praed Street

8.93

79.47%

1163 Waterloo Station

13.00

78.38%

1288 Archway

8.79

76.61%

419 Camden Town

9.50

72.51%

403 Heathrow

30.52

71.23%

159 Newbury

40.77

70.66%

Source : provided by McDonalds Recruitment Officer