Introduction
Employees are essential assets within a firm, and there is a need for a company to put in place an attractive reward system that enables it to attract and maintain workers. Compensations that an organization provides to its employees determine the level of motivation and morale among individuals. Consequently, this defines the staff members’ and the company’s productivity and performance. The rewards that a firm can use can either be intrinsic or extrinsic; hence it is essential to determine employees’ needs so that it can incorporate these aspects into its system. McDonald’s Company has been in the competitive market for long, and how it uses incentives to attract and retain employees significantly determines its success. The firm should strive to hire a competitive and reliable workforce to gain a competitive advantage over its competitors. Therefore, the company should establish a better reward system that enables it to positively motivate employees in attaining its goals and objectives and improving its effectiveness and efficiency.
Problem Statement
Human resource management has the responsibility of determining the needs of employees and establishing a better pay structure. The compensation structure should increase the efficiency and effectiveness of employees while performing their various duties in the workplace. The primary issue in McDonald’s Company is that it has a fixed pay structure whereby employees receive an equal amount of reimbursement regardless of the effort they put into production. There is a need to develop a reward system that pays employees an amount that is proportional to the amount of work that they perform to improve motivation and eliminate employee turnover (Kuvaas, Buch, Gagné, Dysvik & Forest, 2016). Furthermore, there is a need to provide a better environment that motivates employees towards achieving the company’s set goals and objectives. The necessity of a better reward system is to improve the efficiency and effectiveness of employees within the firm.
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The primary form of compensation within the firm is the basic salary. There is a need to consider incorporating other types of payments such as commission-based payments, bonuses, and profit sharing incentives to drive motivation among employees (Gerhart, 2017). The bonus plan will reward employees for their exceptional performance whereas commissions will push them to increase sales levels and increase their productivity. An assurance to employees that for every extra effort they put they will receive additional compensations will drive them to work harder. Another challenge within the company is that it primarily focuses on monetary terms and does not consider that employees vary. Hence, the organization should incorporate non-monetary rewards such as job promotions, gifts, appreciation, and recognition (Rogers, 2018). McDonald’s Company should change the reward structure to gain a competitive advantage over its competitors and to improve employees’ level of motivation.
Analysis
A reward system has various processes and practices governing the level of pays and benefits that a firm provides to its employees. The remuneration that a worker receives directly affects certain performance levels. A reward structure has various roles such as driving individuals towards the attainment of a goal, attracting and retaining high-quality employees, driving workers towards improved profits, and pushing individuals to better levels of performance ( Kuvaas et al.2016) There are various elements that the firm will consider in designing a compensation structure.
First, it should consider the composition of the packages to provide to its staff members. The next issue to consider is whether the rewards are linked to individual or group performance. Additionally, the company will consider the timing of the compensations; whether an employee should receive them immediately or at a later time. Furthermore, it is essential to consider the types of rewards that motivate employees: intrinsic or extrinsic and monetary or non-monetary ( Gerhart & Fang, 2015). For McDonald’s Company to design a better reward system, it should pay attention to the expected benefits that it will derive from it.
Hertzberg’s two-factor theory is a model that describes the levels of motivation among individuals. The argument points out that there are two types of factors that affect employee motivation. Hygiene factors are those that provide an environment that encourages employees, and poor influences demotivate workers (Alshmemri, Shahwan-Akl & Maude, 2017). For instance, the working conditions that an employee is exposed to determine their levels of morale. Furthermore, other factors such as rules and regulations, relationship with colleagues, wage levels, and job security influence workers’ performance. On the other hand, motivators relate to job content and include factors such as recognition, available opportunities to employees for personal growth, achievement, and responsibilities (Alshmemri, Shahwan-Akl & Maude, 2017). McDonald’s Company should design a reward structure that eliminates barriers that prevent employees from working to their full potential while at the same time motivating them towards set goals and objectives.
The reward system that the company will implement should recognize the efforts that employees put into the firm. For instance, job promotions and recognition for employees at different management levels will motivate and drive them to work harder (Gerhart & Fang, 2015). Additionally, the company should put in place a performance management system that allows it to track employees’ inputs and compare them with their past and colleagues’ levels of accomplishments. Individual employees, as well as team members, should be evaluated quarterly, and the best ones rewarded for their effort. Therefore, the reward system should increase quality motivations among employees at McDonald’s Company in the attainment of the company’s vision and mission.
Furthermore, the company should revise its policies to ensure that are favorable. The rules and regulations should guide and reinforce positive behavior of employees. The firm will provide a pleasant environment for employees in terms of safety, and this makes employees comfortable and looking forward to work (Lamm, Tosti-Kharas & King, 2015). Additionally, staff members should be encouraged to interact in the workplace freely and be engaged in the firm’s decisions. McDonald’s Company should, thus, focus on creating a favorable work environment that improves employees’ morale of working and attaining set goals and objectives.
Various barriers are associated with the change in the compensation structure. One is the resistance of change from the employees as they may perceive that the changes will only benefit the company (Carnall, 2018). The management will educate them on the value of the change to their personal and career growth, and make them look at things from their perspective. Additionally, they should be involved in the entire process from planning to implementation of the change and when making necessary adjustments to the system. The management should encourage the staff members to provide feedback about the system and its effectiveness in influencing their work. McDonald’s Company should, in this case, improve the communication process and engage employees in the change management process to curb resistance from them.
Secondly, the company is subjected to uncertainty and changes in the business environment. For example, the economy is prone to change, and this will affect the company’s performance. Additionally, competition in the market will also transform and this will affect the levels of pay of competitors; hence influencing that of the team. However, the human resource management should develop a flexible system and continuously update it to address any deviations in the business environment. Additionally, the primary focus within the management in introducing the change is job satisfaction, and this will help it to design an effective reward structure.
Summary
One change that McDonald’s Company should consider is adjusting its reward structure in an attempt to increase employee motivation. The move will improve the company’s productivity, efficiency, and effectiveness; hence granting it a competitive advantage. The current reward system does not adequately reflect the needs of employees, and there is a need to design one that does so. Some available opportunities for change include involving monetary and non-monetary elements in the plan. Various issues will guide the design of the compensation system, and these include the composition of the structure or package, the relationship between the rewards and individual and or group performance, as well as the time of reimbursement. McDonald’s Company should also eliminate the barriers that limit the employees’ motivation as well as those which limit their support for the system.
Conclusion and Recommendations
McDonald’s company should incorporate monetary and non-monetary benefits into its reward system. In addition to basic salary, the firm should include other forms of financial compensations into the system including bonuses, profit sharing incentives, and commission-based payments. The non-monetary rewards will consist of job promotions and public recognition of individuals or teams with outstanding performance. Additionally, the company should provide a favorable environment for its employees to motivate them to work. For example, it should uphold safety regulations in the workplace, ensure friendliness of its policies, abide by laws and regulations when treating workers, promote cohesion and teamwork, and engage them in the decision-making processes. The challenges that McDonald’s will encounter in implementing the change are resistance from employees as well as the dynamic business environment. To overcome these, it should involve employees in the change management process and should design a flexible system that McDonald’s Company will update from time to time.
References
Alshmemri, M., Shahwan-Akl, L., & Maude, P. (2017). Herzberg’s two-factor theory. Life Science Journal , 14 (5), 12-16.
Carnall, C. (2018). Managing change . Routledge.
Gerhart, B. (2017). Incentives and pay for performance in the workplace. In Advances in Motivation Science (Vol. 4, pp. 91-140). Elsevier.
Gerhart, B., & Fang, M. (2015). Pay, intrinsic motivation, extrinsic motivation, performance, and creativity in the workplace: Revisiting long-held beliefs. Annu. Rev. Organ. Psychol. Organ. Behav. , 2 (1), 489-521.
Kuvaas, B., Buch, R., Gagné, M., Dysvik, A., & Forest, J. (2016). Do you get what you pay for? Sales incentives and implications for motivation and changes in turnover intention and work effort. Motivation and Emotion , 40 (5), 667-680.
Lamm, E., Tosti-Kharas, J., & King, C. E. (2015). Empowering employee sustainability: Perceived organizational support toward the environment. Journal of Business Ethics , 128 (1), 207-220.
Rogers, A. C. (2018). Gender, Non-Monetary Rewards, and Workplace Motivation (Doctoral dissertation, Purdue University Global).
