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

1. INTRODUCTION Designing a compensation plan is integrity of the most manifold tasks for most organizations as it affects job satisfaction, employee turnover, productiveness and the overall social club powerfulness. If not properly managed, this whitethorn lead to high employee turnover, subaltern productivity, among other problems which is especially confessedly for a large service-oriented staunch like McDonalds. McDonalds first-line managers deal straightaway with customers along with the front-line crew and it is polar to draw up an effective compensation plan that leave alone keep them make to work hard. McDonalds has to consider various factors in order to construct 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 conniving A COMPENSATION PLAN 2.1 Financial and Non-Financial Incentives Compensations foot be based on financial and non- financial 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 set off managers by cheering their holds but only to a sure as shooting extent. According to Maslows hierarchy of pauperisms , erstwhile a put down level of needs has been satisfied, it give no longer feed as a motivating factor for the managers. As such, square(p) their higher level of needs is required. Therefore, in the context of McDonalds, in one case 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 realization so as to fulfill their esteem needs. Thus, it is necessary for McDonalds to limit the needs of the first-line managers and incorporate suitable financial and non-financial incentiv es into the compensation package. 2.2 paym! ent System Generally, there are two types of... If you want to discover a full essay, order it on our website: OrderCustomPaper.com

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