Introduction
The consensus in the corporate world about leadership and organizational behavior relates to the undoubted role of benefit systems to have significant impacts on the performance of employees and overall success of the business. Employee benefit systems assume the state of intrinsic and extrinsic rewards. Levesque (2014) defines intrinsic rewards as benefits that come from within an individual and reflect their innate preferences; and extrinsic rewards as those that come from the outside sources such as compliment or financial benefits. Levesque (2014) contended that extrinsic incentives have the potential to boost employee accomplishments immediately, while intrinsic incentives play a crucial role in improving organizational work environment and employees’ work ethics.
McDonalds is among the global companies that have mastered effective implementation of employee benefits systems for motivational purposes. Crawford (2016) posited that McDonald’s Restaurants across the world have embraced motivation and reward systems as central to the company’s business strategy. Successful implementation of employee motivation and engagement schemes has boosted the organization performance and productivity. In addition, the company successfully aligned its reward programs to its business strategy, a process that led to global recognition in 2012 when the employer won the Employee Benefits Award for best alignment of benefits to the business strategy (Crawford, 2015). Since then, McDonald has institutionalized employee motivation and reward as part of organizational culture. This paper uses the case study of the Road to Rio initiative in 2014 incentives by McDonald to explore the relationship between employee motivation, productivity, and organizational performance in the context of motivation theories.
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The Case Study – McDonalds Employee Motivation
What goes on through the minds of ordinary customers at MacDonald restaurants may be a big Mac and fries or chicken nuggets. However, employees of the company have a different and new experience that is passed to customers, courtesy of its motivation and engagement programs. The areas covered by employee benefits programs include health and protection, future investments, work-life balance, and pay and rewards. The company pay and reward program operates under the pay for performance mantra: “The better your results, the greater your pay opportunities” (McDonalds, 2018). The program that stands out for being consistent with the pay for performance philosophy is the recognition program. The program is designed to reward strong performances and include the:
Presidents' Award (given to the top 1% of individual performers below the Director level worldwide),
Circle of Excellence Award (given to top teams worldwide to recognize their contributions for advancing the company’s vision),
Employee of the month for each restaurant,
Employee of the quarter for each restaurant,
Employee of the year (national winner),
Ray Kroc award for the best restaurant managers,
Holiday award for non-restaurant staff (McDonalds, 2018).
McDonald draws significant praise as an example of an employer who places significant emphasis on motivating and rewarding its employees. According to Grant (2017), the ubiquitous fast food chain recognizes the importance of employee motivation and engagement as evidenced in its numerous efforts to develop values and ingredients to great customer experience. The values and ingredients form the basis for the company’s employee reward system that provides workers with benefits. The Road to Rio initiative in 2014 incentives falls under the category of bonus strategy that rewards employees for exemplary performance. Eligibility is based on mystery shopper scores, sales growth, and profitability (Grant, 2018).
The Road to Rio initiative in 2014 project by McDonald sought to incentivize the best 5% restaurants based on customer satisfaction ratings accumulated between February and April 2014. The competition ran concurrently with McDonalds’ marketing during the FIFA World Cup. The purpose was to enter employees from the best performing restaurants into a draw to win all expenses paid trip to the World Cup in Brazil (Crawford, 2015). The company sought to exploit its sponsorship of the competition by sending 11 staff of its management to the World Cup tournament in Brazil. The UK exclusive competition was aligned with the organizational strategy to improve service delivery and enhance customer experience. The 11 beneficiaries had their names drawn following their victory in the best customer satisfaction ratings during the three consecutive months of the competition. According to Crawford (2015), the winners were to spend three nights in Rio and get tickets to two games. Moreover, they won £1,000 for their respective McDonalds restaurants, which was to be spent on a treat for the staff. Therefore, the program demonstrated consistency with the company’s constant quest for new ways of recognizing exemplary performance at individual level and within restaurant teams. The program highlighted the need for a motivated workforce, a critical element to organizational success. The purpose was accomplished by giving the winning employees an opportunity to share in the lifetime experience of the World Cup. McDonalds’ management strongly believes that a motivated and engaged workforce has the potential to influence its customer experience positively.
Applicability of Motivation Theories to the Case Study
The elements of McDonalds’ Road to Rio initiative in 2014 including awarding of a fully paid for trip and a cash bonus for staff ceremony are consistent with those identified by Neckermann and Frey (2013) in the study of the impact of awards on employee behavior at the workplace. Neckermann and Frey (2013) established that the introduction of a hypothetical award had a statistically significant effect on the willingness to contribute to the overall wellness of the public. The value of the monetary payment or gift was also noted to influence the willingness to share important information among employees. The choice of a paid for trip to the World Cup corroborates the assertion that publicity can have substantial positive effect; while the staff event and night out could potentially increase employee contributions in a manner similar to increasing the value of the award a thousand-fold. McDonalds’ grasp of these elements demonstrates competent mastery and application of employee motivation theories to its organizational strategy.
The Road to Rio initiative fits the description of benefits and rewards programs under different circumstances. First, it depicts the definition of rewards and incentives as the consumption of the value proposition that an employer offers to employees. Second, it demonstrates that rewards and incentives come in the form of monetary incentives and/or non-financial rewards. The forms of rewards and incentives are crucial in the management of organizational behavior through motivation to enhance performance and productivity (Schuler & Jackson, 2014). Under the needs motivation theories, motivation is defined as the demonstrated willingness to exert exceptional level of effort towards organizational goals, driven by the effort’s ability to satisfy some individual need. Generating a positive outcome depends on the level of physiological and psychological deficiencies that arouse behavior. In this regard, McDonalds’ project on the trip to Rio can be perceived as crucial in the fulfillment of the third level of Maslow’s hierarchy of need – social affiliation and belonging. A paid for trip to the World Cup is an opportunity for unforgettable experience. Participation in the event fulfills individual social needs, friendship, and entrenches the feeling of belonging and love. The participatory approach of the program enhances fulfillment of the need to belong. In addition, acknowledgment of employees’ contributions through rewards and incentives has an important role towards the satisfaction of respective social and love needs.
Perhaps the most relevant theory that is applicable to McDonalds’ case study is Vroom’s expectancy theory. The theory centralizes on the belief that motivation is dependent on the expectation of desired outcomes. The expected outcomes in this case are dual – the need for enhanced performance, and the value of the reward and incentive in the form of a paid for trip. According to Skemp-Arlt and Toupence (2007), Vroom’s expectancy theory is conceptualized on four elements of valence, expectancy, instrumentality, and force, which have a direct application to McDonalds’ rewards and incentives program being examined. Valence refers to the attractiveness of the potential rewards or outcomes. It can be contended that selection of the top 5% performing restaurants as participants in the completion was to limit the number of interested parties. No employee would turn down an opportunity of a lifetime to experience the World Cup. On the other hand, the understanding that strong performance is the ticket to the rewards and incentives is likely to be an independent motivator with multiplier effect. Such motivation is driven by expectancy, which the belief of an individual on the possibility to reach the desired outcomes. The goal aspect here is imperative because it puts into perspective Ozguner and Ozguner (2014) on the need for an integrated motivation theory approach to ensure effectiveness of the program. The company utilized the relationship to its advantage by integrating organizational goals with employee rewards and incentives to achieve motivation.
Instrumentality concept in Vroom’s theory refers to the belief that exemplary performance will be rewarded. McDonald has the tendency of measuring its employee performance and productivity using feedback on customer experience. Such an approach is critical to understanding how employees can be motivated to deliver the desired outcomes. For this reason, the company has established an organizational culture where rewards and benefits programs are directly linked to strong performance by individual employees and collectively. Therefore, the company’s employees are apprehensive of the fact that exemplary performance will be well rewarded. The strategy is important in the attainment of the last and fourth concept of force in Vroom’s expectancy theory. The element of force refers to an individual motivation to perform. The school of thought of significance to management of organizational behavior advanced in Skemp-Arlt and Toupence (2007) is that people tend to work hard when they believe that strong performance would lead to desirable organizational rewards. Overall, people would work towards a goal because they believe it to be worthwhile, and the efforts will contribute directly to the achievement of the goal. It is important to understand that the market share of McDonalds in the fast foods industry ao;nd the demographics of its client base are factors that make the goal of improving customer experience realistic and achievable.
Evaluation of the Initiative
Evaluation of the success of the Road to Rio initiative program must be founded on the inseparable nature of the company’s employees’ motivation programs and organizational strategy. McDonald has embraced a culture of aligning its reward and benefit system with business saving time, money, and effort that would otherwise be wasted if the two were at odds. This strategic approach by the company was deployed in the conceptualization of the Road to Rio initiative whose main objective was to boost the speed of service while delivering desirable customer experience. According to Crawford (2015), the three-month project led to recognition in 213 of the participating restaurants. Customer experience time in these restaurants improved by 6.1 seconds compared to the previous year. In the same vein, customer satisfaction opportunity score dropped to 16.7% representing positive performance. The implication for the company is that it served an extra 24,000 customers every day, a marked improvement that assisted in creating motivation in the workplace. By any standards, the performance outcomes realized from the competition demonstrate that the project was massive success.
The success of the Road to Rio initiative can be examined through the lenses of McDonald’s organizational vision and mission. The company’s vision is to be the leading global quick service restaurant experience through provision of outstanding quality, service, cleanliness, and value that satisfy every customer. The organizational vision is supported by mission objectives that include aspiration to be the best employer, delivery of operational excellence to customers in all restaurants, and achieving sustainable profitability growth through brand expansion and leveraging of the company’s strengths via innovation and technology. The Road to Rio initiative directly impact the first two mission objectives of the company. The initiative recognizes the role of employees as the drivers of organizational success hence the need for them to be constantly motivated. The findings by Qureshi and Hassan (2013) on the analysis of McDonald’s performance management revealed that in addition to humans being the cog of success in any organization, performance management includes the use of motivation to improve productivity and profitability. The task can only be accomplished by a transformational leader who recognizes the central role of employees in the success of organizational strategy. Performance management includes understanding the behavior maintenance model and how the different components interact to motivate people to perform in an organizational setting (Qureshi & Hassan, 2013).
In respect to such an understanding, McDonald’s has institutionalized an organizational culture that integrates its values and norms with employee performance. The project under examination is an extension of the company’s strategy to ensure its employees perform effectively and efficiently by offering commensurate rewards and benefits. The approach demonstrates that McDonald has successfully integrated its human resource management strategy, business strategy, and overall corporate level strategy, which Schuler and Jackson (2014) argue to be responsible for boosting productivity. Therefore, the role of human resource management in enhancing company efficiency cannot be understated. Financial and non-financial rewards have been proven powerful strategies for improving employee morale and performance. For instance, appropriately recognizing an employee in the presence of their peers boosts the ego and performance, conveys support for that productive behavior, and inspires other employees to practice similar behavior (Edirisooriya, 2014). Overall, the McDonald’s initiative demonstrated a strong link between employee motivations and performance in organizational environment.
Suggestions for Alternative Approaches
McDonald’s evolution over the years in the field of human resource management serves as a template for organizations intent on succeeding using a similar strategy. Crawford (2015) posited that aligning employee motivation with organizational and business strategy has dramatically improved McDonald’s engagement scores and other important metrics. The company strategy proves to be effective for its business without the need for big change. Having taken years to attain this level of performance, it is only imperative that disruptions are minimized. However, the proven effectiveness of the initiative demonstrates the need for consistency in such reward systems and programs. The 11 managers from the UK who benefited from the initiative are an insignificant fraction given the size of the company. McDonald’s has an estimated 36,000 restaurants serving over 69 million customers in at least 100 countries. The company is an employer to 1.9 people globally. The company has approximately 1,200 restaurants in the UK and around 100,000 employees. The implication of these figures in the context of the program is that the percentage of the top performing stores needs to be expanded from the initial 5% to at least 20% in the subsequent competitions. The management must factor in pertinent aspects of the equity motivation theory given the diversity of markets worldwide and potential influence on employee performance and customer experience. Application of the equity theory will demonstrate the company’s commitment to fairness in its motivation programs.
Conclusion
McDonald’s thrives in its mastery of how to integrate employee motivation with organizational and business strategy. The Road to Rio initiative in 2014 demonstrated the effectiveness of the company’s rewards and incentives system that is aligned with its vision and mission objectives. By placing central focus on the customer, McDonald’s understand that employees are critical to the desired customer experience, hence must be motivated to deliver. However, it is important to recognize that the success of such programs depends on their ability to provide satisfaction based on intrinsic and extrinsic deficiencies. The use of monetary and non-monetary incentives to motivate employees has proven to be effective in improving performance and productivity as illustrated by the case study example.
References
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