My Opinion
McDonald’s Employee Finance Tips
COLLAP SE
Identify the root cause for McDonald’s failed employee financial training tips
Apparently, McDonald’s Employee Finance Tips has failed primarily
because the “employees who earn low wage consider it as an insult” (Schlosser,
2012). Here is a movement of employees working on low wage who are pushing
for a minimum wage and McDonalds introduces Employee Finance Tips, a
program that seems to suggest that those employees need a second job. Well, by
this suggestion, the fast food company is insulting those workers considering the
fact that the employees feel that their efforts however well intended, are not
appreciated by the management. These same employees feel that their working
atmosphere is horrible as they are pressurized at all times. Besides, these
employees often spend their several hours with unsociable customers while the
managers make the employee’s work quite difficult. Even after enduring all
these, they do not get real benefits irrespective of working even during holidays.
In light of these complaints from the workers, you can only expect this finance
program to fail terribly like it did.
Discuss your approach to revise and revamp the program
First off, I would ensure that the complaints of the workers are heard and acted
upon by the management. If the employees are feeling that their wage is quite low
then they must be feeling the economic heat considering that they are not working
under minimum wage. So, basically, I would advocate that the company implements a
minimum wage for all these affected employees.
Secondly, I would ensure that these employees get the benefits they deserve
more especially when they are working during holidays and weekends. If the
employees feel cheated of their benefits, no amount of finance tips would do them any
good. So, I would fix that then find ways to revamp the employee finance tips
program.
Thirdly, I would revise the suggestion that employees need a second job as per
the suggestions of the employee finance tips program. In fact, I would do away with
this very suggestion because it makes the employees insulted based on the fact that
most of those are working on low wages to start with.
Discuss an alternative that McDonald’s could use to benefit employees
An alternative that McDonald's could use to benefit employees is introducing
employee benefits package. For instance, at the end of a certain period, say year end, I
would suggest that the company introduce a stock option where the employees would
be paid part of their salaries for that period in form of company stocks. By doing so
would mean a great deal for employees. Instead of them working as employees, they
will change their perception of their work and the pressures that come with it when
they know that a portion of the work is their own and that they are working to
improve the business they own and will expect to reap benefits after some time. In
fact, this would be a huge deal for long term employees who would have something to
smile about after their long career in the company. Most of these employees will not
feel bad even though they are dismissed from work because they understand that they
already have something to fall back to after they are laid off.
Discuss the measures and outcome to evaluate your proposal for item b and
First off, employees should be engaged in a discussion by management
to understand if they are okay with the benefits package program. If they are okay
then they should be made aware that some of their salary or wages shall be cut off to
facilitate the implementation of this program. This way, the employees would have
been afforded the opportunity to make adjustments to their personal budgets. In fact,
some can then decide to take a second job.
Salaries paid to employees vary
from organization to organization. Competitive wages, not only helps to recruit
and retain talent but more so improves the executive’s satisfaction. Statistics
show that a satisfied employee performs well and this goes a long way in meeting
the organization’s targets with ease. Therefore, targets met at every stage benefits
the shareholders who will be encouraged to invest more in the company.
Traditionally, it’s a good practice to award those that have excelled in an activity,
this job-based pay structure. A bonus also referred to as a premium is a token of
appreciation or an award given to performers. For one to be granted, hard work,
determination and a lot of sacrifices must be devoted. It is, therefore, appropriate
to honor executives that have exhibited exemplary performance in their line of
duty. By doing so, one feels appreciated and the drive to even perform better is
cultivated in them. Another way an organization meets the desires of their
shareholders is to offer its top-level managers perquisites.
Student`s opinion 1
Discussion 1
McDonald's Employee Finance Tips
COLLAP SE
Define the root of the problem McDonalds is having
McDonald’s budgeting analysis was a technique used in order to help McDonald’s
employees manage their money for their individual and household expenses. The
problem with the proposed budget, is that it didn't correctly depict living
expenses for many McDonald’s employees. The hypothetical budget proposed by
McDonalds, assumed that an individual had two jobs and their gross income was
$25,000 per year. It also proposed $150 a month car payment, $600 a month for
an apartment and $20 a month for healthcare. With these highly unlikely
estimates, the budget allowed McDonalds employees the ability to save $100 a
month and a daily living expense of $27. The problem, of course, is this budget
reflects unrealistic costs for these living expenses and omits a lot of vital
information. For example, the budget does not take into account state or federal
taxes or any deductions taken from a worker’s paycheck for employee benefits.
According to the article “Cost of Living Reality Check”, if we consider an
individual who has a gross income of $35,000, about $10,000 of that goes to
state and federal taxes and benefits (Burnt, 2007). It is estimated, for a oneperson household, that 30% goes toward housing (about $634), 10% to utilities
(about $211), and 10% to transportation (about $211). It appears that the
proposed living expenses McDonalds suggested and realistic living expenses
drastically deviate from one another. There is about a $61 difference for
transportation alone, this still does not account for debt repayment, clothing,
entertainment, car insurance, and food for an individual (Burnt, 2007). One of
the biggest mishaps is that McDonalds failed to include was an expense for food,
which of course is a basic necessity for any household (Pennacchia, 2013). It
appears that McDonalds did not conduct research with respect to the average
worker at McDonalds. It is also apparent that the company is sorely “out of the
loop” on costs the average family has to pay.
Discuss your approach to revise and revamp the program
I think that to revamp the budgeting tips, McDonalds has to do several things.
First, in order to fully present a budget that correctly depicts the income and
expenses of families of McDonald’s workers, the company needs to conduct
research. Data needs to be gathered in relation to the average household size of
these families, their income, how many hours they work per week, whether they
have additional means of income, if they receive government assistance (and if so,
what programs they are receiving), the expenses they have, and how much these
expenses cost. One of the reasons why McDonalds came under fire was due to the
fact that executives claimed that these entry-level jobs were the perfect fit for
teenagers and students. The problem with this report is that many low-wage
workers of the fast food chain are not teenagers but older individuals who are
trying to support a household on their income (Berman, 2013).
McDonalds executives need to be better aware of demographics of their
employees, if they want to have any leverage with general public.
Secondly, McDonalds needs to establish an employee engagement program to
understand how they can better compensate their workers. According to the
stakeholder model, a company that focuses on the needs of primary stakeholders
such as their customers, employees, suppliers etc., has a better chance of
sustaining a successful business (Wicks, et al, 2010). If McDonald’s executives
focus on the betterment and happiness of their employees, they will find that
sales will increase for the business. One way to do this is to increase the wages of
these workers. Pelhom Wiley, a McDonalds worker, stated that his paycheck of
$8.25 an hour at 40 hours per week, barely covers the cost of his $600 in living
expenses (Berman, 2013). Better wages will increase productivity within the
company. It will also allow the general public to see McDonalds in a better light,
because sometimes patrons of the fast-food chains are less likely to support the
company when wages of workers are low.
Discuss an alternative that McDonald’s could use to benefit employees
McDonalds needs to implement an alternative that allows their employees to greatly
benefit. One way they can do this is through the profit-sharing methodology, a greatly
advantageous practice that we have seen Starbucks use for their stores. Profit sharing, is a
system in which employees directly receive a share of the profits (Heathfield, 2016). It is
a highly beneficial method in which it emphasizes the importance of stakeholder
happiness and helps to drive productivity and profitability of the firm. Profit sharing
encourages the concept that everyone is working cohesively to achieve the same goal, and
employees are rewarded greatly as well (Heathfield, 2016). This will also boost morale of
employees, because they would feel that they can truly make a difference in their income.
Employees who are par-taking in the profit sharing system, will want the company to
succeed because they have stake in the firm (Heathfield, 2016). This will be greatly
beneficial because through this system, productivity will increase along with the
happiness of their employees.
Discuss the measures and outcome to evaluate your proposal for item a and b above.
In order for McDonalds to conduct research, to revamp their system, money will
need to invested to conduct this research. This, of course, will come at the
expense of the company, but it will ultimately be of great benefit to the firm. R&D
is highly important in the success of any global company, and in order to
effectively compete companies need to conduct research to gain knowledge of
new products, technology, and services. R&D drives innovation, which is the
cornerstone of any business. The R&D will need to be conducted wide scale, as all
McDonalds chains will need to conduct the research, because minimum wage
varies from state to state. After this research is conducted, McDonalds can
implement a revamped budgeting plan for their employees, as well as encourage
employee engagement and satisfaction. Similarly, the profit-sharing system
might need to be implemented wide scale as well, but, at least initially, the
company might want to do pilot projects in areas of the country that are highly
impoverished. By doing this, McDonalds can analyze weather this system is the
best for the company, without having to change their strategy all at o
Student`s opinion 2
Discussion 2
McDonald's Employee Finance Tips
COLLAP SE
The root cause for the failure of McDonald’s employee finance tips is the
inappropriate focus on the low wages of the employees rather it focused on an average
wage earner.
My approach to revise and revamp the program:
I will use a seven step approach to revise the program; at first I will find the right
problem to solve, McDonald’s finance tips focused on the future without looking
properly at all the possibilities in the issues facing the employees. I will then define
the problem which is financial management problems due to low wages among
employees with an aid of a range of questions to help in the next step of analyzing the
problem (Gick, 1986). My next step will be to analyze the problem; a detailed
analysis of current situation among the employees will be done with a consideration
of using Reg Revan approach of asking questions. My fourth step will be to develop
possibilities, with the right questions at hand and having known the problem I will
then look for a wide range of possible ways to solve the problem. My fifth step will be
to select a solution which comes up as the best; I will filter my solutions based on
their operational validity, economic validity and personal commitment. My sixth step
will be implementation with the three “who’s” in mind. My last step is evaluation; I
will look at how effective the solution is on the problem and how I carried out the
steps of solving the problem.
Alternatives McDonald’s will use to benefit employees:
There are a number of alternatives that McDonald’s will offer the employees and such
include, providing childcare services to the employees, these will help cut costs for
those employees with children. Also adjusting the working schedule can prove
beneficial, for example working for longer than usual hours for specific days in a
week so as to have a shorter week in turn reducing commuting costs (Hicks, 2013).
Another alternative will be offering discounted gym membership to employees,
considering the type of food company they work at aging comes at a higher than
normal rate thus need to go to the gym arises thus by discounting the same it will cut
costs for the employees. Offering company meals will also aid in cutting costs for the
employees especially with the fact that this is a food company all meals of a day can
be provided for the employees thus the low wage use on food will be cut. The
company can also offer discounts for employees on items they purchase from the
company this could save a coin somewhere. The company can also offer tuition
assistance: this is for those employees interested in furthering their studies thus will
have helped them cut costs. The company can also offer professional development
services to their employees which is important for their career development and the
company in the long term. The company can also sponsor recreational sport activities
which will enhance team work and also offer the employees bonuses.
Measures to evaluate the revised proposal for problem solving:
I will educate the employees about the alternatives so as to get informed and
understand that the offers are given to them by the company. This will enhance their
understanding that the company has played a role in solving their financial
management problems. I will also find out to which extent the problem was defined
and identified correctly. I will also determine if there was correct identification of the
root problem. I will review the consideration of all the data in the decision making
process (Gick, 1986). I will look into the prioritizing of the solutions and if the
solution was the best among all the others. I will also do an evaluation on the
resources used in the identification of the appropriate solution. I will also consider the
responsibilities of the problem solving procedure and if they were assigned to the
right individuals. I will also evaluate the success of the implementation of the solution
and whether side effects did not prop up.
Student`s opinion 3
Discussion 3
FIN 620 – McDonald’s Employee Finance Tips
COLLAP SE
A. The root cause of the McDonalds problem
The McDonald’s set up employee budget website with samples of how to prepare a
monthly budget. This was designed to help their employees prepare budgets from
their earnings. This strategy instead drew a lot of criticism. The website failed
because the figures were really unrealistic; the figures for health insurance were very
little and far much exaggerated. There is no place in the USA where a citizen can buy
health insurance at $20 dollars. The sample budget in that website proved that their
employees earn peanuts despite the hard work and the hot kitchen at the fast food
outlets. Generally, the budget could only suite employees with second jobs; those
working only at the McDonald’s could accrue debts in daily expenses as per the
budget website. The single mothers were also disadvantaged as they were negatively
impacted by the estimated budget. The sample budget proved that fast the food giant
employees cannot survive with what they earn.
B. An approach to revise and revamp the program
To enhance revising and revamping the program I would define its problems. The
employee budget website is the cause of conflicts. Then I would check the numbers of
people affected with the website, for instance, it has drawn a lot of critics meaning the
numbers affected are steadily high. This kind of information collected will bring the
question of why has the website drawn a lot of critics. Noted in this case, is the over
exaggerated sample budgets as the rent standing at $600 dollars for the McDonald’s
employees meant that one had to live in a small room or have a roommate for
survival. Therefore, I will have to evaluate ideas on how to find the solutions to the
problem, regarding this problem it would be advisable to come up with accurate
estimates that suit the earnings of the employees. After finding the solution and
implementing it the next step would be reviewing the effects of the new revised
budget website, if there is no positive feedback then I would again begin the problem
solving until I find possible solutions (Shiba and David, 5).
C. An alternative that McDonald's could use to benefit employees
Instead of setting up an employee budget website, the McDonald’s could have gauged
offered financial tips to employees in proportion to their income. However, having
the budget expense was not a bad idea, the problem was that it was over exaggerated
and spoiled the reputation of one of the most admired fast food business. The budget
website literally meant that its employees could not survive working for them. It
would be advisable that the McDonald’s set up a strategy to directly train and educate
their employees on how to spend their earnings to avoid unwanted debts in meeting
their basic needs. This training could benefit the employees without generating critics
from the public and the mainstream media.
D. Measures and outcome to evaluate the proposal for the item b and c above
Both the proposals in the items b and c are ways to solve the existing problem at the
McDonalds. For instance, in both items, to evaluate their outcome, I would collect
data to confirm if the critics are as many as they were before revising the program. If
the number has reduced that would mean some of the critics had welcomed the idea.
My next step would be to ask those opposing the program what is it that is wrong or
right with the revamped program. I would then act on the wrongs and strengthen the
right. This will help avoid critics and the set the company’s program right and
beneficial to all the McDonald’s employees (Shiba and David, 5).
Student`s opinion 4
Discussion 4
McDonald's Emolyee Finance Tips
COLLAP SE
A. The root cause of the McDonalds' problem
McDonalds, in collaboration with visa, created a budget help website where they put
up sample budgets to help their employees better manage their finances. The intention
of McDonald’s management was to help their staff achieve their financial goads.
However, this attracted a lot of uproar from the public. The budget did not seem
realistic and could not possible be personalized for the most part. First, the budget
was had two jobs- 1st job and 2nd job, meaning that the company expects for its staff to
look for other opportunities to supplement their incomes from McDonalds. Second, it
has a budget line of $20 for health insurance- which is clearly unreasonable and far
less than the monthly average health insurance rate of $250 per person. Third, the
budget does not include any lines for childcare, groceries, clothing, gas and even
emergencies all of which are equally important.
B. An approach to revise and revamp the program
An approach to revising and revamping the program will entail a thorough analysis of
the root cause of the problems which will also typically involve conducting some sort
of needs assessment. The problem with McDonalds approach here is that they
developed a program without getting the buy-in and input the employers. The users of
any program are the best advocates for it. They define their problems and help
develop solutions to mitigate the problems. The first step to revise and revamp the
program is to reach out to employees and learn about the problems. Management may
not completely understand what the problem is – the breadth and scope – unless they
hear from the people affected.
The second step will be to collect information from staff, stakeholders and other
partners. This information, may include data on current average income, and expenses
of employees, factors contributing to the dis-satisfaction with the sample budget
including micro level, macro level, organizational, institutional, etc.). This
information then must be further analyzed to understand why they exist. Such analysis
may include simple descriptive analysis to understand distribution and important
pattern, correlations to better understand how variables and factors are related and
regression analysis to understand causality or associations. These results of these
analysis will guide planning of solution.
The next step will include sharing the results with employees and stakeholders,
explaining how factors are connected and how these information may probably
inform revamping of the program. This will generate more input from employees and
stakeholders, which can then be used to improve the existing program. Once the
program is revamped, it will then be pilot tested with a representative sample of
employees to further identify and address bottlenecks. After this, it can be scaled up,
with continuous monitoring, evaluation and redressing.
C. An alternative that McDonald's could use to benefit employees
Alternative methods that McDonalds could use to benefit the employees must come
by partnering with employees to determine what works best for them. It may include
setting up quarterly financial coaching sessions, developing a savings allotment
program in which employees select allotments that best suits their financial status, so
that the company can then remove these allotments from their paychecks before it
gets to the employees. The allotment can then either be paid into an employee’s
savings account or kept as part of a 401k. While McDonalds had a great goal in mind,
they could have worked on this project in partnership with employees. Furthermore,
the sample budget revealed that employees could not live on one salary. A great
alternative may be to look at how employees could earn more, or incentives that can
help bring their monthly bills/expenses down. This may include employee discount
for phone bills, employee vouchers/discount for groceries, or provision of onsite
childcare services
D. Measures and outcome to evaluate the proposal for the item b and c above
The proposal from b and c may be evaluated through both a process and outcome
evaluation process respectively. For process evaluation, management could examine
each steps that was taken in identifying and solving the problems- to determine what
output and value of each were and how each step contributed towards the overall
outcome. The outcome evaluation for c will look at each of the alternative
measures/programs implemented to determine how the program changed the situation
of the employees. This is usually done by looking at pre and post implementation data
to see how key indicators have changed between the two timelines.
Student`s opinion 5
Discussion 5
McDonald's financial training tips
COLLAP SE
The root cause for McDonald's failed employee financial training tips
The root cause for McDonald's failed employee financial training tips is that
the employees minimum wages are not substantial enough to survive on or
to make a living off , other causes include the fact that McDonald's came up
with the financial training tips on the assumption that the employees had
two jobs, and were earning at least $ 25,000 per year, which clearly
indicates that you cannot survive or make a living off working at a
minimum wage for Mcdonald's because according to the census bureau
the median annual income is $18,000 if the employee can get full time
hours , the training tips were off the mark or unrealistic because the
company did not do the research to find out how an actual person earning a
minimum wage would survive or what his/her needs would be, thats
clearly shown in their budget sample that states $ 20 dollars would be for
health care , while in reality according to ( Forbes ) the average national
health insurance premium for an individual is $ 215 per month in the USA
as far back as 2010 , moreover their own insurance plan for the employees is
$14 dollar a week, the budget sample also suggested that the rent would cost
$600 while in reality that would mean the employee had to get a very small
apartment or get a roommate because according to (The Atlantic ) as at the
end of 2012 the average rent in the U.S. was $1048 a month , the budget
also stated that heating would cost $50 which was unrealistic especially
during winter and summer , the budget also ignored expenses from child
care, gas , clothing, entertainment or recreational activities and even food
which is a basic necessity.
a) My approach to revive and revamp the program
In my approach i will use the 7 steps of problem solving and the 1st step
is defining the problem which i have already established is that the wages or
income of the employees are not substantial enough to survive on, then i
will move to the 2nd step which is data collection, i will collect my data
using a random sample of employees by having sit down session with them
and finding out directly from them how they make it work on such wages,
find out what are their most important needs, what their monthly spending
on average is , any suggestions that they might have on how best to assist
them with their needs, use questioners that have structured questions that
would point me in the direction of how best to handle the matter at hand
e.g. whats are the most affordable neighbor hoods that employees can live in
that would ease up on commuting fares or gas fares etc , 3rd step is
cause analysis, find out why they are having this problems, is it because they
are not well educated, living standards are too expensive ,is it due to lack of
government support or corporate support etc, 4th step solution planning and
implementation, i would formulate the best solution as a result of the data i
collected from the employees and create a financial tips program of
an average McDonald's employee on minimum wage with one job, on full
time 40 hours a week basis , the 5th step is Evaluation of effect, i
would evaluate the effect of the newly revamped financial tips program by
getting feedback from the employees of what they think about it , whether it
was realistic, doable, easy to understand, and a close projection of the
average minimum wage earners of McDonald's , the 6th step is
standardization,, if all is good and the Financial tips program gets positive
feedback i will sit with other heads o f departments and share with them the
process and and outcomes and see how we can implement it or use it in
other departments or other branches of the company , and the 7th and
final step is evaluation of the process, i will gather feedback from the
research team and employees addressing what we did best, what we
did poorly, what can be improved , what are the positives we should repeat
next time, etc and with this information it will be helpful the next time
company has a problem to resolve .
b)Discuss the Alternative that McDonald could use to benefit employees
I think the best Alternative for McDonald's to adopt is profit sharing , this
way its a win win situation for the company and the employees , because the
employees revenue gets to improve as a result of investing in them,
employees feel included, part of a team, togetherness, and the job security
that comes as a result of profit sharing will motivate the employees to do
better thus ensure continuity of the business, other alternatives would
include , modifying salaries based on employees geographic location ,
meaning McDonald can adjust the salary portions to reflect the local cost of
living , so that employees living in more expensive cities are not penalized
e.g. the living standards in New York are very high , as well as Maryland
especially on housing and Rent, as compared with other states like Atlanta,
Oklahoma etc , food is cheaper in New Jersey as compared to Maryland , another
alternative would be to provide the employees with a staff bus that would pick them
and drop them at specific locations for free, this would greatly ease money spent on
transport commuting to work, another alternative is that McDonald's should increase
their employees salary's based on their competitor , this would retain employees and
keep them motivated , every few years the company should determine what their
competitors are paying their employees and adjust their compensation and salary
plans accordingly, the company can also start up college scholarships for best
performing employee's , this will motivate the employee's to work harder in order to
get better education which leads to better paying grade, lastly the company should just
increase their pay because it is clear without a shadow of doubt, that its impossible to
survive on McDonald's minimum wages without intervention.
c) The measures and outcomes to evaluate your proposal
I would evaluate my measures , solutions and outcomes by gathering
feedback from the employees and the research team , as for the profit
sharing i would give it a test run of two months and see how its doing , is it
positively contributing to the employees well being, have the
demonstrations and dissatisfaction outbursts decreased, as for the increase of
employees salary based on geographical location, competitors pay,
introduction of a staff bus to help with commuting bill/gas bill, this could be
evaluated on a three months basis where feedback will be collected from
employees and their supervisors to find out if it is helping, or what could be
improved concerning this measures, if all is well then another evaluation
could be done in another 6 months, Research and feedback from employees
is paramount because only they can tell you what their biggest needs are and
what they need the most in order to thrive, businesses are no longer just
profit oriented but are leaning more towards corporate social responsibility
and being consciously aware that employees are the first customers of the
business, this solution's may not be satisfactory for every employees in
McDonald's because they are very diverse, with members of staff being a
mixture of high school students, college students, to Adults with families but
hopeful it will be helpful and beneficial to the majority of the employees.
Student`s opinion 6
Discussion 6
McDonald’s Employee Finance Tips
COLLAP SE
Root cause of failed employee financial program
The root cause of Mc Donald’s failed employee financial training tips is that the
website is offering advice which is not realistic in nature. As stated in the video, the
median annual income as per censor board is $18,000, whereas the worker who
worked for last ten years at McDonald’s is getting $11,400 annually. Given in the
budget is $150 for the car payment, $20 for health insurance and $600 for apartment
rent. The budget stated is the lowest as per the finance advisors.
How to revamp the program
It is true that no insurance company offers health insurance at $20. In same manner
$600 for rent is the lowest. To revamp this program, McDonald’s should have advice
from industry experts so that budget framed can be realistic.
Alternative to benefit employee
The alternative to benefit employee is that McDonald’s should focus on the
improvements to be made in the budgets instead of creating the low amount budgets.
For example, if an employee is paying $60 for his or her health insurance, then the
McDonald’s should lay a plan where their employees can buy the same health
insurance at low prices, say $40. (Läubli, 2015) They should focus on providing
suggestions to their employees, how to cut down the expenses. Simultaneously,
McDonald’s should have tie-up with firms like insurance, financing companies to
help their employees in getting things at low prices. (Applegate, 2008)
Measures and outcome
The proposal stated above is realistic in all aspects. With this McDonald’s will be able
to gain the confidence of their employees. Moreover, this will also help their
employees to cut down certain expenses to insist savings.
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