Talent Management Program: McDonald’s Case Study Sharifa Toomer Essay
Talent Management Program: McDonald’s Case Study Sharifa Toomer
1. Outline the talent management program that led to success for the company. Talent management is a human resources concept that is utilized by several organizations. Silzer and Dowell (2010) define talent management as, “a subset of human resource (HR) processes, programs, and tools designed to identify, assess, develop, and retain talent. ” (p. 75). McDonald’s revamped their talent management program in 2002 to better identify and develop their employee’s talent.
This change resulted in very positive results for McDonald’s not just according to their internal metrics but overall for the company. Goldsmith and Carter (2010) stated that McDonald’s redesigned it talent management program because in the fourth quarter of 2002 for the first time in the company’s history they had an overall loss. They were unsure how this could be because the ratings of the higher level employees were exceedingly high.
They found that there was no correlation between inflated employee ratings and the overall success of the company. They also found that even though the company noted very high ratings of employees’ potential, when key leadership position became available, senior managers had a hard time finding people to be a right fit for the position. It was these issues that made the senior management at McDonald’s decide that it was time for a change within the talent management system throughout the entire organization.
Dewhurst, M. , Hancock, B. , & Ellsworth, D. (2013) state that, “Companies must be explicit and precise in defining their must-have skills. ” (p. 60). Goldsmith and Carter (2010) wrote that McDonald’s decided to do just that by laying out a five step plan to revamp their talent management program. The first and second steps were to redesign the performance development system (PDS) for all staff positions throughout McDonald’s and then introduce the talent review process for all officer- level positions.
Next steps were creating and implementing a sequence of enhanced development programs beginning with the Leaders at McDonald’s Program (LAMP), introducing the McDonald’s Leadership Institute, and lastly they designed and launched the Global Leadership Development Program. Goldsmith and Carter (2010) further explain that the next step was for McDonald’s rolled out their remodel of the performance development system (PDS) in 2001 for all staff positions throughout the McDonalds organization and there were three main area of focus for the redesigned model.
The first area was to place a stronger emphasis on accountability, the second was to increase the difference in performance, and thirdly they need to boost receptiveness to change and innovation. The main changes to the performance development system was the addition the performance drivers to help assess not only what a manager was able to achieved but also how this was done, the initiation of a four point rating scale and distribution guidelines, a new incentive compensation plan for those that earned a rating that placed them in the top twenty percent, and a revised assessment of potential.
The results of the new performance development system showed a vast difference on the distribution of the ratings for performance and potential for advancement from the previous system. The next step in the new talent management program was the introduction of the talent review process for all officer- level positions. The purpose of this was to place more attention on leadership talent to align better with the new world-wide business obstacles that McDonald’s was facing.
The talent review overviewed the extensive characteristics of talent management, including forecasting needs, assessing current officers, identifying depth and diversity of replacement pools, and development planning. It was believed that this process places, in the hands of those in top leadership roles throughout the McDonald’s organization, the responsibility of ensuring that they are addressing the leadership talent needs for their locations and that they are following the parameters of the talent review process model.
Goldsmith and Carter (2010) documented the next step in McDonald’s revamped talent management program was the development and roll-out of a series of accelerated development programs starting with the Leaders at McDonald’s Program (LAMP) launched in 2003 to enhance the development of high-potential individuals for officer level positions. The program fast-tracks the progression of future leaders by using leadership development as a process to motive improved results, re-mold culture within the organization, and increase the depth of leadership.
The goals of LAMP was to broaden the competency and readiness of prospective successors for important leadership positions, shortening ramp-up time required for newly promoted officers and obtaining quicker business results, becoming more effective at developing and retaining top talent, and lastly continuing to improve the diversity profile at the officer level. The introduction of the McDonald’s Leadership Institute and the design and launch of the Global Leadership Development Program were the last two steps that Goldsmith and Carter (2010) listed in the transition of McDonald’s talent management program.
The primary goal of the Leadership Institute was to be of esteemed value to McDonald’s business and to be viewed as a topnotch leadership institute. The main concentration of the Global Leadership Development Program was to prepare applicants for a more wide-span overview of leadership responsibilities and to give participants a more in-depth network of peers.
2. Identify strengths of the program and how they led to goal accomplishment. Goldsmith and Carter (2010) show that the redesign of McDonald’s talent management program has had not only a positive improvement on its internal metrics but also on the overalls success of the company. The PDS became an effective tool because unlike the previous rating system this tool placed more emphasis on accountability for success, increased performance differentiation, and embraced openness to change and innovation. The new talent review process created “more cross-organizational movement that has resulted in better selections and also more development opportunities for those moving to these assignments. (p. 167).
Lastly the creation of LAMP, the McDonald’s Leadership Institute, and the Global Leadership Development Program all helped McDonald’s to mold it high potential employees for all its key positions globally. The talent management program changes have improved the overall strength and diversity within the leadership groups. It also broadened the pool of high-potential candidates that were equipped for key positions. Another noted strength of the talent management program was that the program also helped the McDonald’s in the retaining of high potential performers.
It was also noted that as of the December in 2008, McDonald’s had “sixty-five consecutive months of positive comparable sales- the longest run in McDonald’s history- and the stock price hit an all-time high in September 2008. ” (p. 176)
3. Describe opportunities for improvement in the talent management planning process. While McDonald’s has implemented an extremely successful talent management model the main area of improvement would be how to attract employees with high leadership potential. Also they need to also put a plan in place to properly forecast talent needs.
Caul and Harvey (2012) indicated that with technology changing at a rapid rate, a particular skill set that may be of extreme value today may be of little to no values in 5-10 years. McDonald’s should implement a strategy to ensure they have a sufficient planning period to fill key positions.
4. Create at least two (2) more effective approaches to meet the talent management challenges in the future. One approach to help McDonald’s attract more high potential candidates to their organization would be to initiate recruitment fairs at high schools and colleges.
This way McDonald’s can target potential candidate early on and mold them into key employees. Another effective approach would be to ensure that McDonald’s properly manages its talent over the long term. Caul and Harvey (2012) feel like the best way to do this would be to identify what roles the organization would like to consider key positions and properly define what set of skills would be required for each of the key positions. Time must also be given to find the right person for the job.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 8 October 2016
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