HUMAN RESOURCEMANAGEMENTRESEARCH PAPER ASSIGNMENTIBSNWWCLASSOF WINTER 2018 IBS 810 Article: Tim Hortonsprotests to expand beyond Ontario, 50 demonstrations planned across Canada.
Date: January 18, 2018Source: Toronto Star Weblink: https://www.thestar.com/business/2018/01/18/tim-hortons-protests-to-expand-beyond-ontario-50-demonstrations-planned-across-canada.htmlSubmitted By: Submitted To: Kartik Bambroo Sharon RubinStudent number- 135283166 The article “Tim Hortons protests toexpand beyond Ontario, 50 demonstrations planned across Canada” is an articlethat outlines how mismanagement and poor planning directly affects a company’sbranding, reputation and eventual bottom line. On January 10th, 2018employee/customer backlash broke out after Tim Horton’s decision to reduceemployee benefits and eliminate paid breaks came as a direct response to howthe company would compensate for the newly passed minimum wage increase inOntario. According to protestors, the demonstrations were held to pressurize boththe Tim Horton’s franchise owners as well the parent company; Restaurant BrandsInternational. Protestors believe that the financial burden incurred due to theincreased minimum wage increase from $11.60 to $14.
00/hour should not come atthe expense of the employees. “Finger pointing between the company andfranchisees over who should take responsibility for the cuts has intensified anongoing public sparring over alleged mismanagement that has included severallawsuits filed against each other in recent months.” (Hodges). The protestsbegan when Jeri Horton-Joyce and Ron Joyce Jr, the children of the companyco-founders reduced the employee benefits at two Ontario locations owned bythem. The “blame game” between the company and franchisees have startedregarding who takes the responsibility for cutting employee benefits.
Thearticle states: “The parent company explains that the individual franchiseesare responsible for setting the benefits and compensation of employees. But,the franchisees explain that it is the duty of the company to help them infinancial crunch times” (Hodges). Thisback and forth over who is responsible for the cut in employee benefits(franchisee or parent company) is drastically affecting Tim Horton’s brand andreputation nation-wide. HRstrategy is a main driver when it comes to the success and maintenance of acompany’s employee satisfaction and a result of that, it’s brand. The HR department of any organisation has theresponsibility to create an environment that encourages employee engagement,better employer-employee relations and focuses on the job satisfaction ofemployees (Dessler et al. 2).
Tim Horton’s reaction to the minimumwage hike in the form “clawed back workers benefits, paid breaks and otherperks (Hodges),” has lead customers and employees to respond in the form ofpublic protest and backlash which is incredibly damaging to Tim Horton’s brandoverall. To then attempt to offset that bad public image by having the parentcompany and the franchisee blame each other for the wage hikes, and sue oneanother only articulates that the company is mismanaged, and is unstable. Thiscreates an immediate public distrust.
The public now believes Tim Horton’s tobe a company which makes its billions “off of the backs” of its workers. AsHodges notes, “Tim Horton’s is not protecting the rights of its workers evenafter having the means for that at their disposal” (Hodges). Finger pointingbetween the parent company and the franchisees only extrapolates publicbacklash.
The customer service retaliation by Tim Horton’s in the wake of thepublic uproar has an immense impact on the bottom line. Tim Hortons has notonly reduced the employee engagement in their work culture, but has decreasedemployee and customer trust towards the organisation. Furthermore, this has animpact on the quality of talent being hired in the future. The action of somefranchisees is going to create a barrier between the company and talentedcandidates applying to the company in the future. As per thearticle, the HR discipline involved in Tim Hortons reducing the benefits of itsemployees is “Compensation and Benefits”.
Employee benefits refers to all the indirectfinancial payment received by an employee during his/her period of employment (Dessler et al. 283). It isan important area that drives the success of any organisation. Research indicates thatthere is a positive relationship between employee benefits and job satisfaction,and a company offering better childcare benefits can attract more femaleemployees (Milkovich et al. 190). Employee benefits encompasspension, health and life insurance, vacation, education plans (Dessler et al. 285). Accordingto Ontario Ministry of Labour “Meal breaks are unpaid unless the employer and employeehave decided for the payment” (Eating periods).
So, Tim Hortons’ act was in accordance with the law but was not based on effectiveHR practice. Acompany with good compensation and benefits plans can retain its talent poolfor a longer duration of time. Aneffective HR strategy focussed on building effective employee relations andsupported by employee retention and performance evaluation strategy could havemade the situation better. Today, the employees need information to stayupdated and motivated to deliver their best performance.Tokeep the employees informed, Tim Hortons’ HR department should have started proactivelyto communicate with its employees via a communication program such as “downwardcommunication.” Downward communication is a form of communicationthat is initiated by the top management of the organisation and it flows downthrough the hierarchy (Dessler et al.
350). The company should have communicated that theincrease in minimum wage would not affect the employees’ benefits directly and employees’satisfaction was of major priority. This would have led to the employees beinginformed about the changes taking place in the organisation and motivated themto want to be better workers at the same time. The potential HR strategies that could havebeen used are: 1) Employee Retention:By reducing the benefits to cover up the losses incurred from having to pay higherwages to the employees, HR was ineffective in their decision making. Employeeswere caught off-guard, and left unhappy. This lead them to feel unsatisfied intheir workplace, leading them to be less productive which turn lead to higheremployee turnover. The additional costs incurred to having to train newemployees, versus satisfying existing employees has been missed.
Rather thanreducing the employees’ benefits, it would have been better practice if the HRstrategy would have focussed on paying full benefits and keeping the employeessatisfied. 2) Performance evaluation:The HR department moving forward should implement a performance evaluationdecision that will keep track of employee performance for both part-time andfull-time employees. The shift managers and the store managers would beresponsible for evaluating their employees’ performance as they stay are ableto evaluate their performance from an “arm’s distance.
” The parameters forassessing the performance would be employee punctuality, customer serviceoffered by the employees and the time taken to perform a given task. Theevaluation would be done using the traditional graphical rating scale methodfor assessing performance (Dessleret al. 266). The results would be recorded in the following sampleformat: Name of theemployee: Level:Name of themanager: Name of the shift manager: Criteria Below average Average Excellent Punctuality Customer Service Work speed Thetop performing employees would be given flexible schedules and the lowestperforming employees would be given a warning. This will lead to the increasein productivity and increased customer service quality. The result would be theincrease in the throughput of the entire organisation as well as an increase tothe organization’s bottom line.Lastly, no communication canbe ended without a feedback from the employees’ side.
The workforce should begiven the opportunity to give a feedback regarding the strategy being adoptedby the company and to give any suggestions for the future. This would in turnpromote a workplace culture of co-dependency, trust and respect.