Question

5) You are McDonald's Chief Human Resources Officer. The CEO has asked you to evaluate the BENEFITS & COSTS associated with giving frontline employees $ 15 hour, starting January 1, 2020. Bullet the MAJOR business BENEFITS & COSTS. Are the B > C? B C ? C>B? Why?

Answer 1

Benefits of the action -

(i) Higher motivation, morale and satisfaction among the employees.

(ii) Lower attrition rates.

(iii) Increase in the loyalty and dedication of employees.

(iv) Increase in the positive opinion of the prospectve employees of the company, as one of the best paymasters.

(v) Through higher wages, the company would be able to attract better quality of manpower, leading to improvement in output quality.

Costs -

(i) Higher employee cost would affect the profitability.

(ii) Through higher wages, the company would be hard pressed to cut jobs If it can't justify the hike with increased sales or improved goodwill as a result of better customer service. It would create more negativity for the company.

(iii) Higher wages for frontline employees would prompt the others also to try for pay hike, which if done, would affect the profitability, and if not done, would impact workplace culture and interpersonal differences.

In my opinion, cost and benefits weigh equally for the company, so it will be better to implement this idev by linking the wages with performance. Frontline employees should have certain part of their hourly wage based on the on the job performance, in place of straght hike. This scheme should also be extended to other deparments also to ensure fairness to all.