Training and Development of Human Resources TSAR NAN vebtennenee2? Divide the class into groups of five each. Ask each group to select one industry, thatis, BPO/ eS, FMCG, travel and tourism, aviation, re- tail, automobile, etc. Each group makes a field visit to two organizations from the chosen industry. Group members conduct interviews with HR managers as well as a few top-level managers of the firms to obtain the following information for each organization: + Dominant business strategy of the firm us- ing Miles and Snow's typology. + Training practices of these firms with respect to skill type and skill source. + How the firms assess training needs. + Whether training is aligned with organiza- tional goals and objectives. + Average training hours per employee. « Training staff per employee. + Cost of training per employee. + Training methods used for different skill groups. aeesest: Field Projects +1 vs Case Study = 425 seMeeNESASSeaMereasiareenerererT? + Criteria used for evaluating training effec- tiveness. + Other training-related information that is available. Each group prepares a report for class presen- tation as well as a written report for submission to the instructor. Group presentations should high- light the similarities and differences between the two organizations visited, in respect of various as- pects of training. After all the groups have made their presenta- tions, the instructor should lead a class discussion on training needs assessment, taining practices, linkage between business strategy and training, and evaluation of training. The discussion should re- volve around the business environment in which the particular industry operates, the impact (or lack of it) of business strategy on training strategy, and how decisions related to training and development activities are taken by organizations, The instruc- tor should also encourage the class to examine industry differences in various aspccis of training. McDonald’s McDonald’sis a leading global foodservice retailer with more than 30,000 local restaurants serving nearly 50 million people in more than 119 coun- ties each day. It is the world’s largest restaurant chain with outlets in every continent and in alinost every country, McDonald’ serves the world some of its favorite food—French Fries, Big Mac, Quarter Pounder, Chicken MeNuggets, and Egg McMuffin. The first McDonald's restaurant opened by Ray Kroc was the Des Plaines restaurant at Illinois, USA in 1955 and the first day's revenues of the restau- rant were a whopping $366.12! No longer a fune- tioning restaurant, the Des Plaines building is now @ museum containing McDonald's memorabilia and artifacts. McDonald’s went public in 1965 with the company’s first offering on the stock exchange. A hundred shares of stock costing $2 day would have multiplied into 74,360 shares, worth over $1.8 million on December 31, 2003. In 1985, McDonald's was added to the 30-company Dow Jones Industrial Average. It. holds a leading share in the globally branded quick service restau rant segment of the informal eating-out market in. virtually every country in which it has a presence. As a 50 year old company, McDonald's today is one of the two most well-known, powerful, and valuable brands in the world, the other being Coca- Cola, the only soft drink supplier to McDonald’s.Training and Development of Human Resources + Restaurant Leadership: Introducing managers to the key skills needed to become effective res- taurant leaders, e.g., team-building, commu- nication, decision-making. « Business Leadership: Focussing restauranv/gen- eral managers on the need to develop a busi- ness strategy that encompasses both internal and external factors. Most departments in the regional offices offer restaurant managers opportunities to work in the regional office. This gives an experienced manager the opportunity to develop and learn new skills. to see a different side of the business, and to experi- ence how each department's strategies have a role in achieving the company’s goals. McDonald’s Diversity Initiatives McDonald’s is the world’s community restaurant. It has a long-standing commitment to a diverse workforce. Diversity at McDonald’s is seen as un- derstanding, recognizing, and valuing the differ- ences that make each person unique. McDonald’s is committed to recognizing the talents and job per- formance of all employees and values the contri- butions that come from people with different backgrounds and perspectives. Some of the diver- initiatives at McDonald’s have resulted in it having the largest number of minority and female franchisees in the quick service industry, with more than 40.7% of all McDonald’s US owner/opera- tors being women and minorities. More than 25% of company officers are minorities, more than 24% of company officers are women, 26% of middle- management employees are minorities, and 46% of middle-management employees are women, The company has employee networks such as Women’s Leadership Network, Asian Employee Network, McDonald’s African American Council, etc. These networks help the company achieve its diversity vision by improving processes like per- formance feedback and employee development, recruitment and retention of excellent employees, and maintaining a better connection with the di- verse customer base. McDonald’s is committed to diversity education and has developed a framework 429 to provide it throughout the organization through formal presentations, workshops, and seminars. Seminars and workshops like Winning with Diver- sity and Inclusion, GenderSpeak, Asian Carcer Development, Black Carcer Development, and Women: Enhancing Personal and Professional Effectiveness, serve as the cornerstone for bringing diversity to life in the organization. Presentations and customized and informal waining materials are provided for integration into team and department. processes. Diversity education is an ongoing pro- cess, creating awareness and building skills for managing an inclusive and diverse workforce. Evaluation of Training ‘The managers of each unit are responsible for train- ing and also for monitoring training effectiveness based on OCLs through a computerized log. The results use used by the head office (o track restau- rant performance, resulting in what is called a “waining grade’. This serves as a key indicator in measuring the unit managers’ performance, This linkage ensures that training is prioritized. Restaurant's performance with respect to training is measured by the following indicators: + Overall training audit grade + Proportion of fully trained staff + Number of OCIs awaiting completion + Employee satisfaction levels To measure the quality, service, and cleanli- ness of restaurants McDonalds uses mystery shop- pers who pay a monthly visit to each site. The results from these visits indicate that restaurants in the above average training category have higher scoresacross the board, especially on ‘service’. This means that when staff are well trained and moti- vated, customer service improves, and long queues and delays are less likely. McDonald’s provides a real justification for training, through real evidence that directly ex- plains the impact of training investment on the bottom line. It has been observed that the restau- rants where the manager or their second-in-com- mand takes a hands-on approach to training tend428 Strategic Human Resource Management regardless of the restaurant or the continent. The tightly controlled process is called the ‘one best way’. It covers all areas of business, from meeting and greeting, to food preparation, to cleaning the floor. In order to relieve monotony, crew members are rotated through a number of different roles. It takes an average of 44 shifis to become competent inall areas. ‘Training is delivered and assessed through a variety of methods. Much is done ‘shoulder to shoulder’ with a manager or training squad member from the restaurant, However, training is also de- livered through attending classes in the crew room or in the restaurant itself. Additionally, e-leaming modules can also be completed during allotted times in the crew rooms using the crew computer station and by accessing the company intranet site. Once in a restaurant manager position, em- ployces continue with further intensive develop- ment. All the development plans at McDonald's stem from the same essential principles that Kroc introduced in the 1950s, i.e., quality, service, and cleanliness. Through a combination of time in res taurants and al a management training centre. managers progress through hundreds of training days. Courses for management development in- clude: + Employee relations training + Time management » Staff retention and discipline + Personal leadership and effective coaching + Employee communications + Learning to manage shifts + Community image + Managing staff development + Optimizing restaurant food cost + Accounting and financial procedures The operations and training manual weighs just over 4 kg and is more than 800 pages long. ‘General Managers at McDonald’s are expected to complete farther programmes, such as a Diploma in Management from Nottingham Trent Univer sity {in UK outlets), a far ery from Ray Kroe’s partly thievous degree in Hamburgerology that he first awarded in the early 1960s. ‘The restaurants also promote crew members to hourly-paid management positions that carry accountability for areas within the restaurant, or responsibility for a shift. All members of the reslaurant crew are trained on the job by a train- ing squad. The training approach at McDonald's is based on developing competencies using a Personal Development Plan (PDP). Training is monitored by the use of ‘Observation Checklists’ (OCLs) for the station they are working al Ratings from these checklists are used in apprais: als of employees. Successful completion of a range of OCRs across various job tasks leads to a smull pay increase. In addition, the participants (crew members) attend regular development days. On successful completion of a management entrance exam, em- ployees attend a training course held by the train- ing department at the regional office before returning to the restaurant in a management posi- tion, The McDonald’s management development curriculum takes new recruits from trainee man- ager to restaurant manager. This consists of on-the- job training and open learning development modules, supported by courses and seminars al the company’s national and regional training centres. The management development curriculum is aimed at persons aged 21 of over, either graduates or individuals with some previous management experience. It offers a direct route into restaurant management, through an intensive structured train- ing programme. ‘The management development curriculum is divided into four key programmes: + Shift Management: Developing trainee manag- ers in the skills and techniques required to be- come effective in all aspects of running a shift. © Systems Management: Targeting second assistant and newly promoted first assistant managers. ‘This programme covers all areas of MeDonald’s systems, thus increasing the manager's busi- ness knowledge. It also develops individual techniques.Training and Development of Human Resources When Ray Kroc was initially expanding McDonald’s in the 1950s and 60s he avoided em- ployees or franchisees with direct experience or formal training in the food preparation, restaurant, or service business, They were the people who wanted to do it their way, the way that they had learned through their formal training in catering. But Kroc never saw that as the right preparation for making McDonald’s do well. Instead, he saw a different mix of dedication, entepreneurship and wider skills in service and quality as the right type of skills mix. He freely admitted to ‘putting the hamburger on the assembly line"—a process where traditional catering and restaurant skills were ob- solete. This new fast food revolution could not be encumbered by traditional beliefs—rather Kroc was convinced that new abilities and a ‘ty anything’ philosophy would better deliver the national brand that he craved. But, in the 21st century service sec- tor, the skills process has changed. The company invests in ils people and—these arc all formal learn- ing processes that McDonald's utilises—they are perhaps a better reflection of Kroc’s philosophy than existed in the US in the 1950s. However, despite this, McDonald’s still sets great store by its training procedures. Just like Kroc in the 1950s, they are always prepared to tear up their own systems and start again with all of its develop- ment procedures. There is a major paradox that exists at the heart of perceptions about the job at McDonalds, called McJob. If it takes only a few minutes to be fully up to speed in the deskilled environment that is a McDonald’s kitchen, why does the company claim to invest so much time and money in training and development? At crew level, there is considerable initial and ongoing train: ing that is consistently applied to everybody in the business, whether part, full time, hourly paid siaff, or salaried managers undergoing their compulsory in-restaurant training. Orientation and Induction The first stage of training at McDonalds is at the Welcome Meetings. All new employees are inducted into the business through a Welcome Meeting, which they must attend. These set out the 427 company’s standards and expectations. The Wel- come Meeting gives an overview of the company, including job role, food, hygiene and salety train- ing, policies and procedures, administration, benefits, and training and development. Welcome Meetings are followed by a struc- tured development programme that provides train- ing in all areas of business, Crew trainers work shoulder-to-shoulder with trainees while they learn the operations skills necessary for the running of each of the 1] workstations in each restaurant, from the front counter to the grill area, All employees learn to operate state-of-the-art foodservice equip- ment, gaining knowledge of McDonald’s opera- tional procedures. The majority of training is floor based, or ‘on-the-job’ training because people are more likely to retain information if they are able to practise as they learn. All new employees have an initial training period. Here they are shown the ba. sics and allowed to develop their skills to a level where they are competent in each area within the restaurant. The time scale for this depends on their status, that is, full or part-time. They also attend classroom-based training sessions where they com- plete workbooks for quality, service, and cleanli- ness. New employees also meet their trainer and tour the restaurant. The company operates a three week probationary period, aller which employees are rated on their performance and are either re- tained or have their employment terminated. Training and Management Development After inductions and (eam orientation sessions, every employee embarks on his/her individual training plans. All employces receive ongoing train- ing. There are no set timescales as there are many crew working for a handlul of shifts each week. ‘The leisure retailing industry is unique in that the customers know what they are looking for, (he quality of service they received on their last visit, and what service they expect on this visil. In such situation, extreme variations in standards gets noticed and ‘punished’. McDonald's places great emphasis on employce training to ensure the high- est standards of service across all outlets globally,426 Strategic Human Resource Management Values of the Company McDonald’s has one agenda; providing 100% total customer satisfaction. The formula through which McDonald’s seeks to achieve this goal in the restaurant operation is the long-standing commit- ment to Q, S, C, and V, that is, quality, service, cleanliness, and value. Well-trained crew and man- agers are the first step to achieving these standards. It is a company policy to provide career opportu- ies that allow employees to develop their full potential. This includes a comprehensive training programme for crew and career progression that enables a ‘first job” employee to progress through to a senior management position through merit- based promotions. People at McDonald’s Each McDonald's restaurant is structured as an in- dependent business, with restaurant management responsible for accounting, operations, inventory control, community relations, and training and human resources. McDonald’s is a large-scale employer with a typical McDonald's restaurant employing about 60 people. Most employees are paid by the hour and are referred to as ‘crew mem bers’. Their primary responsibility is to prepare the food, serve customers, and carry out tasks for the efficient running of the restaurants. Crew members have to work hard and learn quickly. Other hourly- paid employees who work alongside them include training squad members, dining area hosts, party entertainers, administrative assistants, security co- ordinators, maintenance staff, night closers, floor managers, and shift running floor managers. Although these employees carry outmore specific job functions, their overall role is to ensure that the restaurant runs efficiently. McDonald's is rep- resentative of the wider growth in temporary, part time service sector work. 55% of McDonald’s hourly paid staff are students, usually in further or higher education. Many McDonald’s employees have been recruited from both short and long-term unemployment. Most crew members have addi- tional demands on their time, whether through studying or caring responsibilities. There are people who don’t last long amidst the intense demands of the McDonald’s workplace and develop programmes. But there are also many who see 0 through and go on to have successful and rewa:2 ing careers The remaining company employees are siz ried managers working in cither the corpors or regional departments. It is their responsibili- to manage the restaurant’s operations, crew business performance. 20 of 50 top mana, started in McDonald’s restaurants, including CEO, Jim Skinner. 67,000 McDonald's restau managers and assistant managers started as res: rant staff. McDonald's was voted the ‘best plac work for minorities’ by Fortune Magazine in 20° and ‘one out of five best places to work in La: America’ by America Economic Magazinein the sam year. Commitment to Training McDonald’s is an organization that demonstr a strategic commitment to training ‘as the way »- do business around here’, From the very early days Ray Kroc, the founder of McDonald’s as we know it today, was prepared to invest a great deal money {and way befure McDonald’s came clos to turning a profit) in training staff, The compar altitude to (raining and development today can traced straight back to Kroc’s philosophies « beliefs about learning and work. McDonald’s, wit a strong tradition of and belief in training, invest: more than $1 billion annually in training. How ever, it is not always training as we know or mig expect it. McDonald’s Hamburger University firs: opened in the basement of a restaurant in Els Grove, Chicago, in 1961. It was initially aimed Kroe’s growing number of franchisees, a learning process through which he could assert control ove= his cherished standards of quality, service, clean! ness, and value. At the time, the idea of a univer sity for the still fledgling industry of fast fooc franchising was scoffed at but Kroc didn’t care The first graduates were awarded a Bachelor of hamburgerology degree with a minor in french fries. Hamburger University® has more than 275,000 graduates worldwide and, with training eligible for college credits430 Strategic Human Resource Management to perform better. Yet, the company does not look for immediate financial benefits from training, the impact of which may be more medium to long- term. Fundamentally, though, McDonald’s knows that skills do create better businesses and with it, better jobs and opportunities for their workers. Apart from measuring the success of training by its impact on bottom line or profits, McDonald's links a number of other benefits o ongoing train- ing. These include improved employee morale and productivity. Effective and regular training is seen as bring- ing cascading benefits, such as employee salisfac- tion, which in turn enhance customer ratings. McDonald’s believes that the success of the res- taurants and the company is achieved through the people it employs. The company aims to recruit the best people, to retain them by offering ongo- ing training relevant to their position, and to pro- mote them when they are ready. Training is inberent in McDonald's work culture, and the link between training and progression within the com- pany is explicilly communicated. Restaurants with high levels of training also have lower staff turnover. A mote consistent crew, in urn, delivers higher levels of service to the cus- tomer, resulting in more profits and so on. The staff turnover rate at McDonald's is low, with the aver- age length of service of a McDonald’s manager currently at over ten years. ‘Training and development at McDonuld’s re- ally works. According to McDonald’s, some 70% of their current management team (in head and regional offices and in restaurants) began as crew members. These findings suggest that training plays a primary role in the delivery of the three major business objectives of quality, service, and cleanli- ness and also in achieving better employee and customer satisfaction and a drastically reduced staff turnover rate. All have direct impacts on the bot- tom lines of each restaurant and of the company as a whole. McDonald’s may be regarded as a model employer keeping in view the importance it attaches to employee training and the set of indi- cators it uses to measure training success. This case has been constructed on the basis of secondary information from following sources: htip://Avww.mcdonalds.com (accessed on 18 August 2006): http://www.medonaldsindia.com, accessed an 18 August 2006; http://medonalds.net.in/med/corp/index.htm, accessed on18 August 2006; hirp://www.thetimes 100.co.uk/ case_study.php?cID=28&csID=194&pID=5, 06 July 2006; Christine 2002; Westwood 2003; http:// www:theworkfoundation.com/Assets/ PDFs/are_we_beingserved.pdf, accessed on 18 August 2006. Questions 1. Do you think McDonald’s training initiatives are aligned with business strategy? Explain the reasons for it. Why is it important to establish business strategy-training linkage? 2. Discuss how McDonald's strategic commit- ment to training has contributed to its posi- tion as a ‘leading global foodservice retailer’. 3. Examine Ray Kroc’s training philosophy. How has McDonald's gained from this philosophy? 4. How relevant is training and development for a company like McDonald’s which is seen as ‘deskilled’? Describe the orientation training at McDonald’s. What purposes does it serve? o 6. Discuss the training and management develop- ment process at McDonald's with respect to its design, purpose, methods, and content. What, organizational goals does it help McDonald’s achieve? Evaluate McDonald’s T&D process based on your understanding of the process of taining. 7, What purposes are served by diversity train- ing for McDonald's? What initiatives does McDonald's take for diversity inclusion in its workforce and with what benefits? 8. What crileria are used to evaluate training ef- fectiveness at McDonald's?