McDonald’s Model for Success
McDonald’s has a model that spawns from its leadership base, promotional activities, knowledge of the market, and franchising; it leverages its effective model to gain an edge over its competitors. The company has franchisees that run numerous restaurants. According to Mahtani (2015), McDonald’s also exploits its relationships with suppliers to ensure continued supply of food products and as such, stands as a provider of convenience and healthier options. McDonald’s also boasts of qualified employees who undertake company operations around the globe (Mahtani, 2015). As such, the company has built a significant presence in North America, Europe. And has equally established itself as a top food provider in other countries within Asia, and Africa.
Aside from its focus on enhancing value, McDonald’s also maintains a strong commitment to its clients. Its commitment to the society has, for years, been reinforced through its corporate social responsibility programs that seek to diminish challenges that plague the underprivileged (Mahtani, 2015). McDonald’s has even managed to endear itself to environmentally conscious clientele through sustainable sourcing. Further, the company ensures that its products meet the set standards and has, over the years, sold an array of healthier food options to the consumers.
The company also boasts of a strong leadership base. Its president and CEO spent over a decade honing McDonald’s key strategy; he also played a key role in building the company’s domestic and overseas operations and has a proper understanding of the company and the steps it can explore, going forward, to increase its market share. Mahtani (2015) opines that the president alongside others, increased operations efficiencies resulting in a worldwide supply chain and franchising; the executive vice president and the chief Financial Officer (CFO), and the Chief Branding Officer (CFO) also jointly contributed in the developmental of the plan to win strategy that continues to propel McDonald’s to success. The management at McDonald’s put emphasis on improving the company’s strategic advantages that included developing the management training program and striving for market saturation. The company has through penetration; used value-priced options to expand operations and build even a larger market share (Mahtani, 2015). The company also develops focused, robust economies of scale that promote operational efficiencies, productivity and streamlined expansions worldwide. Other than ethics and leadership, McDonald’s has exploited its franchise operations in a way that has bolstered McDonald’s strengths.
The franchise framework allows scalability; that is expansions can occur and can occur quickly but with standards being intact. The franchise came with a degree of flexibility that allows a limited scale of operational changes and strategy with the purpose of enabling operational agility necessary to help meet market specific needs (Mahtani, 2015). Although there are decisions that only the board can make others fall under the purview of the regional heads. The board, for instance, can make decisions on issues of compensation, acquisition, financial reporting etc.
How McDonald’s Measure Performance; and the Lessons the Company Has Learned Over Time
McDonald’s has, over the years, employed a couple of performance measure that include the 360-degree feedback and the graphical rating scale. The graphic rating scale allows the rater to mark an employee’s performance on a continuum indicating low and high levels of a particular characteristics (Dennis, 1991). 360-degree feedback, on the other hand, is a performance management system that gives feedback information from all groups of employees surrounding a particular employee (Sheposh, 2016). They could include peers, subordinates, superiors, and even customers.
McDonald’s has, however, learned that the effectiveness of the 360-degree feedback transcends the graphical grading scale which suffers from certain flaws depending on how the technique is deployed. McDonald’s has also learned that while all performance appraisal helps in determining employee performance levels, and needs, they are affected by drawbacks that impact their authenticity (Sheposh, 2016). In cases where McDonald’s previously used performance appraisal systems, it also explored performance appraisal systems and talent management programs to hone employee skills (Fleenor, Taylor ; Chappelow, 2008).
McDonald’s has embraced 360-degree feedback system and is seemingly scaling back the application of the graphical rating scale with a view of enhancing employee development. The has advantages that seemingly outshines the positive aspects of the graphical rating scale. In the 360-degree feedback system, performance data is collected anonymously to avoid rater errors. The information received from the 360 degrees feedback plan can then be used to make a personalized development plan of an employee.
The system is admistered with the help of technology (Sheposh, 2016). The system has the following advantages; it can receive honest feedback because of the covert nature of the process; the effect of bias is reduced because the feedback is coming from multiple sources; employee performance is improved because they are equipped with their own development plan for their own success. Employees are made aware of expectations not only from their bosses but also from their peers, subordinates and even customers.
How the Company Arrived at Its Conclusions
The three aspects of performance that McDonald’s has measured using this approach include; descriptive categories, job duties, and behavioral dimensions such as decision making and communication effectiveness. While the graphic rating provided a uniform set of criteria to evaluate performance of different employees, the managers at McDonald’s learned that it was impacted by drawbacks that included its weakness in showing certain job characteristics; Descriptive words used in rating may have varied meanings to various/ different raters.
Some of the short comings of the traditional performance appraisal (TPA) that had previously been used by McDonald’s include the following; it created a scenario where employees would be assessed against objectives that were unfamiliar to the employees. Secondly, the lack of clear objectives spawned subjectivity and impeded fairness of the process. In some cases, the work environment became toxic because of case of gossip. Some employees who felt that their positions were threatened also forged alliances of purpose as responses to the feedback that implied that their positions were at risks. TPA, therefore, affected employee relations and by extension productivity. (Kersley, and Martin, 1997).
McDonald’s Wrong Turn/Right Turn as Regards Performance Appraisal
McDonald’s took the right turn when it embraced the 360-degree feedback approach and reduced the TPA and other appraisal modalities. The decision came at a time when the drawbacks of other approaches such as the TPA proved injurious to employee relations and motivation. Unlike the 360-degree feedback approach, the TPA characterized by biased judgement that failed to improve performance, work quality and organizational commitment.
Unlike any pragmatic appraisal approach that should reward best performance notwithstanding an employee cultural predisposition or standing, the TPA was reported to have been affected by favors that were accorded on the basis of race and other parameters that were not necessarily performance related. The discretion on how to score an employ, to a great extent, remained in the purview of the raters. And because of the lack of checks and balances, the problem of subjectivity arose which consequently implied that distributive justice became unattainable.
Even though a significant shift from TPA as occurred at McDonald’s, the company is yet to adopt 360-degree performance approach as an exclusive approach in measuring employee performance. In some of its restaurants, the crew trainers, and store managers have acted as appraisers to employees who fall under them; it therefore, follows that the company is yet to adopt 360-degree performance appraisal entirely in employee appraisals.
Alternatives Steps to McDonald’s Performance Appraisal
While 360-degree feedback system seems to offer a more reliable option that the TPA and the graphic rating scale, I would instead employ an appraisal system that is anchored on the concept of relative judgement. The reason I would choose an appraisal system that is based on relative judgement over 360-degree feedback approach is because the latter is reliant on technology and because some employees may not be technology savvy, they would not perhaps not be comfortable with an idea of using computer aided approaches in appraising their colleagues. Also, because most employees are unaware how results are generated beyond filling in information while appraising colleagues.
While relative approach may be faced with the problem of subjectivity if not done appropriately, it allows the appraiser to categorize employees in terms of performance if done with absolute impartiality. The relative approach weeds out the possibility that employees could be ranked the same. An appraiser who needs the good will of employees to represent them in other forum may for instance rate almost all employees as best performers (Gomez-Mejia, Balkin ; Cardy, 2007). On the other hand, a sadist appraiser will little regard to the tenets of professionalism may be inclined to rate others as dismal performers even in instances where such ratings are untrue and unwarranted.
The relative approach canvassed above has its share of drawbacks and could be used effectively when steps are explored to circumvent its inherent challenges. one of the disadvantages of the approach herein is that it fails to shed light on the small differences that exist between employees (Gomez-Mejia, Balkin ; Cardy, 2007). However, even with glaring shortcoming, it may prove feasible in cases where people demonstrate apprehensive towards technology-based appraisal options such as 360-degree feedback and in cases where other approaches are unattainable.
In addition to the relative approach, I would also explore the absolute formats to measure performance. The approach thereof arrests the problem of bias because it provides a platform that allows different managers to appraise employees from different work groups. The approach diminishes the challenge of subjectivity as well because an appraiser who would typically have bias against a given employee would have reduced chance of appraising employees that, for some reasons, they hold in low regard.
Absolute appraisal format has features that makes it effective relatively to approaches such as the relative appraisal method. The absolute method allows raters to assign points to varied dimensions that may include communication skills, and interpersonal relationships (Gomez-Mejia, Balkin ; Cardy, 2007). Employees consequently receive feedback and plan that would allow them to improve on specific aspects of their attributes or competencies.
In addition to the relative and absolute formats, I would leverage behavioral, outcome and trait data to come up with information that can be used to develop employee development plan. When a manager opts for trait measurement to help gauge and determine whether an employee trait is in line with the requirement of an organization. The techniques that measure employee traits sometimes come in handy when promotional opportunities arise.
The technique can unearth an employee’s decisiveness, reliability, and loyalty. Much as the behavioral, outcome and trait approach is an option that can be explored by McDonald’s, it is prone to conscious and unconscious and biases (Gomez-Mejia, Balkin ; Cardy, 2007). The reliability of the results derived from the approach would therefore be questionable. The approach also focuses on a person as opposed to performance.
Unlike the trait appraisal method, behavioral based assessment scales remove undue focus on an employee’s trait and puts a focus on behavior. It evaluates whether an employee shows up at work early, takes criticism positively, engages with others constructively. Behavioral based assessment has an advantage over the trait appraisal method because it is invariably devoid of ambiguity that plagues trait bases approach. Behavioral approach may be a suitable alternative to the 360-degree feedback appraisal approach because it also more legally defensible aside from having the potential to weed out ambiguity.
Behavioral approach enables appraisers to underpin behavioral examples that are preferred within an organization. By underpinning such examples, appraisers possibly remove doubts on behavior that can and cannot be tolerated within an organization (Gomez-Mejia, Balkin & Cardy, 2007). An example, an organization may be particular about integrity and may make it clear to an employee honesty is tied to an organizational reputational capital; dealing with clients in dishonest ways may therefore, attract punitive measures and unlike other missteps, anyone who engages in dishonesty may be to have to content with disciplinary actions and may even be relived of duties.
Dennis M. Daley. (1991). Great Expectations, or a Tale of Two Systems: Employee Attitudes toward Graphic Rating Scales and Mbo-Based Performance Appraisal. Public Administration Quarterly, (2), 188
Fleenor, J. W., Taylor, S., & Chappelow, C. (2008). Leveraging the impact of 360-degree feedback. electronic resource. San Francisco: Pfeiffer, c2008.
Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (2007). Managing human resources. Upper Saddle River, NJ: Pearson/Prentice Hall.
Mahtani, S. M. (2015). McDonalds’s Corporation. Salem Press Encyclopedia.
Sheposh, R. (2016). 360-degree feedback. Salem Press Encyclopedia.