Case Study: McDonald's Corporation - Designing an Incentive System

1. INTRODUCTION Designing a compensation plan is one of the most manifold tasks for most organizations as it affects job satisfaction, employee turnover, productiveness and the overall social club hard-hittingness. If not properly managed, this may lead to high employee turnover, subaltern productivity, among other problems which is especially rightful(a) for a large service-oriented staunch like McDonalds. McDonalds first-line managers deal forthwith with customers along with the front-line crew and it is polar to draw up an effective compensation plan that leave alone keep them cause to work hard. McDonalds has to consider various factors in order to human body an optimal compensation plan for the first-line managers. Unless other specified, managers provide be taken to mean first-line managers in this report. 2. FACTORS TO librate IN cin one caseption A COMPENSATION PLAN 2.1 Financial and Non-Financial Incentives Compensations foot be based on financial and non-f inancial incentives. Financial incentives let in salary and bonus while non-financial incentives include benefits and perquisites such as the use of company cars and club memberships. Financial incentives can trigger managers by cheering their holds but only to a certain extent. According to Maslows hierarchy of takes , erstwhile a gravel level of needs has been satisfied, it give no longer ascertain as a motivating factor for the managers. As such, live up to their higher level of needs is required.

Therefore, in the context of McDonalds, once the managers are satisfied with their basic needs (pay), the monetary incentives will no longer motivate! them. There is a need to provide managers with non-financial incentives such as promotion, increased autonomy and actualisation so as to fulfill their esteem needs. Thus, it is necessary for McDonalds to delay the needs of the first-line managers and incorporate suitable financial and non-financial incentives into the compensation package. 2.2 recompense System Generally, there are two types of... If you want to buy the farm a full essay, order it on our website: OrderCustomPaper.com

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