The fast food industry is one of the highest grossing employer in the nation. Its compensation strategy has been on the forefront of many debates and the discussion of employee dissatisfaction. Such disparity in compensation has prompted nationwide protest of workers and garnered attention from policy makers, media outlets and stakeholders. Much of the outcry has focused on CEOs being paid lucrative salaries while the front line workers’ wages are at or slightly above the poverty level. As the dilemma continues to unfold in the media, compensation plans continue to play an enormous role in the recruitment and retention of workers.
As discussed previously in Assignment 1, Yum! Brands, Inc. is a Fortune 500 corporation based out of the United States and comprises of three major submarkets that have become household names across the globe. Yum! is one of the largest public company in the fast food industry. Yum! Brands operates licenses that include KFC (chicken), Taco Bell (Mexican food) and one of America’s favorite, Pizza Hut (pizza). The first assignment discussed factors that contributed to low wages of front line workers and CEO as well as pay disparity. Such factors included: laws and market influences; compensation strategies; challenges related to compensation and compensation practices as it relates to the company and its stakeholders.
Currently, Yum! has over 40,000 restaurants in 128 countries and territories, 90% are owned and operated by franchisees or licensees in the United States and 67% internationally (Yum!, 2014). By meaning, Yum! does not own or operate the restaurants. Instead a legal agreement is entered into whereby the franchise owner pays Yum! for the use of their trademark, trade name and adv...
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...ty is far reaching. For example, to be considered for a Pizza Hut franchise, a worker will need to have $360,000 in cash and net worth of $1 million. The total estimated initial investment will be between $1,290,000 and $3,088,000. If the worker has $360,000 to invest and good credit they will meet the net worth requirement (BusinessMart, 2010).
A fair and equitable compensation plans should factor in what employees perceive as valuable based on each employee particular situation. Such rewards should provide a balance of intrinsic and extrinsic benefits. Perks and benefits can make or break a company's ability to attract and retain workers in any industry and not just the fast food industry. Providing benefits such as health insurance benefits such as paid holidays and paid vacation time, will show employees that they are valued team member of the company.
The situation at the Twin Oaks Hospital is a conundrum that every human resource function would not like to be involved. It is a scenario that has the potential to derail the services of the medical facility. The primary issue, in this case, is remuneration. Employees are demanding an improved wage system that reflects on the services that they offer. In the claims, there appears to be an array of disparities that the line managers must give a response. Seemingly, there have been some grumbles over the wage structure. Employees who give the same value of services are paid varying amounts of money. Ordinarily, if workers discover such a disparity, they are likely to stage a go-slow in protest. There is,
The corporation I chose to discuss is McDonald’s. McDonald’s is a publicly traded corporation that includes the following domestic companies, McDonald’s, Chipotle Mexican Grill, and Boston Market. This paper will discuss the following:
In April 2010, KK BB, the CEO of Marshall & Gordon, a leading public relations firm met with the firm’s leadership committee off-site in Miami. This off-site brought together Marshall & Gordon’s executive committee, practice and regional heads, and senior HR officers to discuss on redesigning the firm’s compensation system. A global advisory taskforce, under the direction of an external consulting firm, had spent three months collecting and analyzing data. Marshall & Gordon hired external specialists to design the new performance management program. The specialists proposed that the senior managers and human resource form a global advisory unit together with Marshall & Gordon partner to represent the firm’s five regions of the firm and lead the design process. The advisory unit surveyed all consultants in February in order to understand their way of thinking about the fairness, worth, and effect of the current performance management system. Majority of the interviewees responded to the corporate surveys implying that the subject was topic was especially exciting to them. Interviews gave insights on present and prospective business plans and direction. The survey also showed that specific focus across certain employee populations should be given. Six current hires from key competitors were also interviewed to comprehend competitor pay practices and compensation program structures. Further focus groups discussions and key information interviews enabled the taskforce’s to understand the needs of certain groups within Marshall & Gordon’s worker population. The survey culminated with the taskforce conducting interviews of 20 partners and principals togeth...
Chip Conley’s business structure is based upon a pyramid structure with the front line employees on the bottom and corporate management at the top. Conley stopped his salary and the other members of the management team took a pay decrease and salary freeze; however the front line employees were secure in their jobs knowing they would be paid and receive increases during this time. Conley knew that his business is based on customer service and if the front line employees were concerned for their basic needs then the level of customer service would diminish. So to counter act this potential economic disaster that was happening globally, Conley managed to secure the company by sacrificing his and management’s salary for the future of Joie de Vivre and recognizing the basic needs of his
CEO compensation has been a heated debate for many years recently, and it can be argued that they are either overpaid or that there payment is justified by the amount of work they do and their performance. To answer the question about whether CEO compensation is justified it must be looked at by the utilitarian viewpoint where the good of many outweighs the good of one. It is true that many CEO’s are paid an exorbitant amount of money; however, their payment is justified by the amount of money that they bring back to the company and the shareholders. There are many factors that impact the pay that the CEO receives according to Shah et.al CEO compensation relies on more than just the performance of the CEO, there are a number of factors that play a rule in the compensation of the CEO including the fellow people who help govern the corporation (Board of Directors, Audit Committee), the size of the company, and the performance that the CEO accomplishes (2009). In this paper the focus will be on the performace aspect of the CEO.
Seitel stated Circuit City’s management responded to the CFO’s departure by offering an additional cash in of $250,000 on top of his $1,000,000 a year (p.218). Management was more concerned about losing one high up employee, but did nothing to help preserve the jobs of 3,400 sales employees. Management should have been counseled to treat all employees with equality and dignity regardless of position. Interestingly, “The firings…are expected to reduce expenses for the electronics retailer by $110 million in fiscal year 2008” (Mui, 2007). In comparison, Circuit City’s CFO’s salary was $1 million. One top-level manager’s pay was almost equal to the total expenses that firing employees cut. This showed that lower level employees are dispensable and not as valuable to the company as a higher level employee
Scarpello, V., & Jones, F.F. (1996). Why justice matters in compensation decision making. Journal of Organizational Behavior, 17, 285-299.
In the article entitled Benefits and Business at AFLAC and L.L. Bean, the author Sandra Reed covers a substantial scope of business problems confronted inside organizations, for example, worker advantages and in addition remuneration. Reed additionally discusses various studies that have been researched on this point and how the consequences of these studies have shown how those two difficulties, benefits and compensation, are parts of the most imperative regions of a representative's employment. (Reed, 2009) Another range of discourse inside the article is a territory inside the workforce that has changed radically which is that of representative obligations and roles inside an organization. An issue connected with this change is the way that
Many employees when looking for a job or deciding whether to stay with their current employment often considers the employee benefits the company offers.
Later in the year 2002, the company acquired Lexington, Kentucky-based Yorkshire Global Restaurants post that it reframed as YUM! Brands & Brands LLC. Total global sales for 2014 for Yum! was more than US$13 billion with major divisions at India & China as their headquarters in United States, it automatically captures the US market. The Key People are - *Mr. David C. Novak (Executive Chairman) * Mr. Greg Creed (Chief Executive Officer – CEO) *
The above examples of pay show that the more skills, experience employees are with the organization the more they are compensated. Organizations would benefit by utilizing the same practice’s Disney extends to their workforces. For those businesses whose primary purpose of their plan is to only meet compliance requirements could greatly benefit by developing a comprehensive benefit plan. This could help increase their return on investment. The value I believe a business may gain from Disney’s compensation plan is to appeal to competent workers, to maintain those workers, and to motivate workers to direct their energies towards achieving the goals of the organization. Companies can set up policies to conduct a market study on a regular basis to implement a real performance appraisal system and then work on retaining good employees and elimination of poor performing workers. By following Disney’s lead of in obtaining those who best fit their company’s culture and supporting the company’s Mission. To guarantee that the pay structure is externally competitive, a pay survey should be shown. The results of a survey to be valid, the market pay data must be from the relevant labor market for each benchmark job. I would advise that a survey of regional and global pay data should be collected from the company, because for example, most of the office support, HR and operations jobs will be filled by local applicants. A job analysis is the procedure of reviewing jobs in an alike business. The result of this process is a job description “that includes the job title, a summary of the job tasks, a list of the essential tasks and responsibilities, and a description of the work context “(Burke, 2008). A job description consists of the knowledge, skills and aptitudes necessary to do the job. A job evaluation is the process of adjudicating the comparative value of job within a company
Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand without having to pay such a large initial cost to open a new store since the franchise purchaser pays a cost to open the business. As well, the company can regulate many of the business activities so that there is a sense of consistency throughout all of the locations. The purchaser is allowed to use the trademarks and goods of the franchise which already have a large market presence. As well, they are provided with training and work standards by the company to help their business run smoothly (Kalnins & Lafontaine, 2004, p.761). Looking at the business model of the world’s largest food retailer, McDonald’s, provides great insight into franchising and business growth in general as well a better understanding of a global business that utilizes the franchising technique.
The fast food restaurant Burger King uses Scientific Management by following a ‘one best way’ method of doing tasks, implemented by Taylor as an advanced form of standardised production. This includes scientifically hiring, training and developing each employee, encouraging a ‘work-for-reward’ based mind-set, and dividing workload between managers and workers fairly with regards to specific roles. This provides a stable working environment where workers work harder under better working conditions. Burger King shows evidence of a modern organisations that can reflect the scientific management principles; as Burger King consists of a system that offers rewards to employees for meeting the objective goals. Taylor stated that if workers are given no incentives despite putting in more effort, workers will be discouraged to work. Burger King uses a competitive wage and promotion programme where hard work is recognised and rewarded. Regular monitoring of performance and pushing for improvement avoids ‘under working’. Therefore, creating supervisors and leaders ensure discipline and makes a business perform well. The challenges that encouraged Taylor’s time and motion studies is still present within organisations today. However, management has developed new ways of encouraging output. In today’s business organisations employers are more concerned with ‘performance’ rather than
Tomax Corporation has 400 employees and wishes to develop a compensation policy to correspond to its dynamic business strategy. The company wishes to employ a high-quality workforce capable of responding to a competitive business environment. Suggest different compensation objectives to match Tomax’s business goals.
Organizations are working hard in today’s world of business, not only to remain competitive, but also to focus on stability and structure. Employees are the backbone of an organization. It is becoming more important to offer quality HRM programs to staff, in order to support the retention of trained and experienced staff. Employees have always been concerned with salary however, there is a new focus emerging that looks at compensation as a whole entity. Monetary wages are now just as important as other benefits such as paid time off, medical and dental offerings and retirement. This paper will discuss the importance of the total compensation program which includes many aspects, not just salary. Attention must be paid to equal pay, pay