1000 words case study

McDonalds’s Australia’s talent management system

Since opening the first McDonald’s restaurant in Sydney in 1971, the Australian business has grown close to 800 restaurants nationally. More than two-thirds of these restaurants are owned and operated by local Australian business men and women. The People Mission at McDonald’s Australia is to be recognised as an ‘Employer of Opportunity’. This means that it is continually working to provide an employment experience that its employees will always value. The McDonald’s business plan incorporates a continued aggressive growth strategy. To ensure that it met the demand for the right people in the right places., McDonald’s needed a system to close the gap between the talent it already had and what was required to achieve the business plan. To address this challenge, McDonald’s developed an integrated talent management system (TMS) that enabled the company to recruit, select, develop, promote, retain and engage its people.

Aligning everyone with the McDonald’s strategy

The integration of development into the core business plan is imperative to the company’s success. The strategic plan outlines key goals, targets and objectives in regard to every aspect of the business. It considers the necessary product, price, place and promotional initiatives and also identifies the people imperatives to deliver on the goals. The strategic plan is called the ‘Plan to Win’. Components of this plan are cascaded all the way down to an individual’s contribution. Therefore, an individual has a clear line of sight between what they are working on and how that aligns to overarching goals.

The TMS takes the performance development and target learning initiatives on-line to engage all corporate and restaurant management team members in line with the McDonald’s business strategy. The system now combines in a formal and flexible way learning and development initiatives with real, measurable business outcomes. In addition, the TMS provides a simple and effective means of setting business and development objectives, tracking progress, communicating and reviewing work performance. The TMS is also used as a succession planning and talent management tool and enables users to plan their career path at McDonald’s.

Impacts of the TMS

As its inception, the TMS immediately made the significant impact for which it was intended across the business. It included the following.

· Strategic commitment:

· Talent management at all levels is a high priority, backed by senior leadership, and clearly linked to business strategy.

· Leadership capacity:

· Successors are available in a timely manner to fill all senior leadership positions when they become vacant; they are able to grow and expand at the rate they choose.

· Process discipline:

· An annual review is held, assessing progress of key individual against development plans.

· High potentials are tracked and performance-monitored.

· Leadership discussions regarding talent management are efficient and grounded in facts and verifiable data.

· Identifying high potentials:

· High-potential individuals are identified early enough so that the development program can have the maximum impact.

· The talent selection criteria reflect the business strategy.

· Diagnosing development needs:

· Multiple perspective (360 degrees) instruments are used.

· High potentials are assisted by professionals such as organisational psychologists/coaches in understanding the feedback.

· Prescribing solutions to development needs:

· Development plans are in plans for all employees to leverage strengths and eliminate weaknesses.

· Ensuring development takes place:

· There is a plan in place to ensure that development plans exist for everyone and are used as a way of checking progress and completion.

· Role clarity:

· Individuals know what they are expected to achieve in each role or assignment and how success will be measured.

· Individuals take responsibility for their own development and take appropriate action.

TMS system performance

The online TMS was provided by PeopleStreme and surpassed McDonald’s Australia’s initial objectives for the project. Since its inception in August 2008. McDonald’s has evaluated the effectiveness of the TMS against explicit measurable criteria. Individual progress against development plans is continually tracked and measured using 360-degrees instruments to illustrate demonstrable improvement. Key performance criteria for the TMS itself include:

· 100 % of employees have been measured against leadership competencies

· 100 % of employees have completed individual Development Plans

· 82 % of employees have completed Individual Performance Plans

Training and personal development

TMS has given McDonald’s the tools to identify, early on, employees with a propensity to lead. As an organisation, it can then tailor development resources to those individuals who will be business-critical in the future. Conversely, TMS identifies poor performance and clearly establishes whether training or motivational issues are at the root cause. Individual performance factors can now be compared like-for-like, resulting in a more realistically weighted performance bell curve. The establishment of TMS has helped to identify any training and development deficiencies. They have established partnerships with leading development organisations, including several universities and private training providers.

Questions

1. From your experience or observation, how do (or don’t) McDonalds’s frontline employees demonstrate the outcomes of the TMS? What behaviours might be used to evaluate effectiveness?

2. Is the weighted performance bell curve (Forced distribution bell curve) a useful instrument for categorising and rewarding employee performance? Why or why not?

3. Discuss the limitations you can see in McDonald’s Talent Management System? Which stakeholders would it impact? How could it be managed?

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