Extract from IDS Executive Compensation Review 325

McDonald’s top reward menu

As one of the world’s best known brands, McDonald’s makes the development and training of its managers a top priority to ensure it guarantees the supply of future leaders and to retain talent. In this article, the company’s compensation and benefits manager explains how its reward arrangements support its strategy.

Depending on seniority, the reward package for managers is made up of several elements, including individual performance-related salary progression, bonus, long-term incentives and benefits. The company has developed a framework that rewards achievement and encourages managers to fulfil their potential. Central to its approach is the linking of individual achievement to annual salary awards. As well as this, a ll office-based employees also take part in a bonus scheme called the Target Incentive Plan (TIP) where payments from the scheme are based on a combination of a ‘team performance factor’, which is linked to company results, and an ‘individual performance factor’, while all assistant managers, unit managers and business managers are eligible to participate in a separate ‘Restaurant Bonus Scheme’. The article provides a detailed overview of the reward arrangements in place at McDonald’s and also includes tables outlining the minimum and maximum pay bands as well as a breakdown of employee benefits on offer.