Human Resources to meet

emerging business needs

The owner of the parent company (the franchisor) owns the brand name. Under the franchise agreement, they sell the franchisee the right to sell KFC products, use the KFC brand name and agree to provide product, promotional and other services. The franchise structure offers benefits to both franchisor and franchisee. Figure 1: Benefits of the franchise structure: To the franchisor: Allows more rapid expansion of the business than is possible through just company owned outlets Franchisees provide capital which increases the funds available for wholebusiness expansion Franchisees as owners are highly motivated to maximise sales and profits Local franchisees are often more responsive to local conditions To the franchisee: Less risk of business failure by purchasing an established business system with a global brand name Consumers are familiar with the product as it is uniform across outlets Receive training in standard operating procedures and receive a fully developed business plan processes meet the changing needs of the business. KFC states We know we need the very best people on our team. We believe that if we put people capability first, satisfied customers and profitability follow. This means hiring, developing and retaining the right people to take our brands to the customer.

2 Developing a strong company culture

A company culture describes the way a companys owners and employees think, feel and act. KFC company culture is a direct result of the companys vision and values (See Figure 2 below). For a business to generate profits and achieve long term success it needs to build a workplace that attracts, engages and retains the best employees. Figure 2: Yum!s Vision and Values Our aim is to put a smile on peoples faces around the world and give every customer a special experience on each occasion. Our vision is that our jobs will be the best in the world for those committed to serving great food and looking after customers better than anyone else. We like to call our values our How We Win Together principles and KFC incorporates them into everything we do. These values are outlined below. Believe in all people We trust in positive intentions and believe everyone has the potential to make a difference. We actively seek diversity in others to expand our thinking and make the best decision. We coach and support every individual to grow to their full capability. We are customer maniacs Customers rule. Every customer sees it, feels it and knows it in every restaurant. We make sure we have great Restaurant General Managers who build great teams. 100% CHAMPS with a Yes Attitude is the expectation. Go for breakthrough We begin by asking ourselves What can I do NOW to get breakthrough results in my piece of Yum! Our intentionality drives step change thinking. We imagine how big something can be and work future-back, going full out with positive energy and personal accountability to make it happen. Build know how We grow by being avid learners, pursuing knowledge and best practice inside and outside our company. We seek truth over harmony every step of the way. We consistently drive outstanding execution by scaling our learnings into process and tools around what matters most. Breakthroughs come when we get people with knowledge thinking creatively. Take the hill teamwork We team together to drive action versus activity. We discuss the undiscussable, always promoting healthy debate and healthy decisions. Our relationships allow us to ask the earth of each other. We make specific verbal contracts to get big things done with urgency and excellence. Recognise! Recognise! Recognise! We attract and retain the best people and inspire greatness by being world famous for recognition. We love celebrating the achievement of others and have lots of fun doing it! The real culture of a company is determined by the way decisions are made on a day by day basis, and by how it treats its employees. When a manager does not value an employee or follow established procedures, the true company

culture differs from the published version. To be effective, the actual company culture rests on the company vision and values being believed and acted upon by all employees. Young people today have demonstrated their commitment to seeking widespread experiences and doing what is cool and fun. They see the value of teamwork and connectedness and they work to gain money, skills and experience. A companys culture must reflect these attributes if it is to attract and retain talented employees. The feel-good culture at KFC is inclusive and supportive one where everyone is encouraged to look out for each other. This culture is across the KFC brand, rather than being localised in a single store. KFC is flexible around working hours to accommodate time off for exams, extra-curricular school activities, sports and family events. Many young employees initially join KFC in order to gain some extra cash. As they continue in employment they realise that there are excellent career opportunities on offer. As a Team Member, employees receive on-the-job training and the chance to cross-train within the restaurant, enabling them to learn new skills. Employees learn communication skills, teamwork and how to manage money. Many of these skills will have future life applications as well as being of benefit at work. KFCs strong company culture benefits all its employees. Increased employee engagement results in higher morale and productivity. This ensures excellent customer service which means repeat visits and recommendations to others. By providing defined and visible career paths, KFC retains more staff, with obvious spin-offs in the retention of talent and knowledge. Many successful Area Coaches, Training Managers and Restaurant General Managers started with KFC as Team Members. Retention of staff and reduction in staff turnover has benefits for KFC as it achieves a significant reduction in spending on recruitment and enables a greater investment in training. KFC provides extensive recognition and rewards to its employees which mirror the company culture. Team Members achieve money and hours, celebration of success, life experiences and discounts. The rewards and recognition for managers include work-life balance, discounts, service recognition and education assistance. An additional benefit of working within the KFC franchise network is that employees can grow their career. Career opportunities are advertised throughout the equity and franchise network.

Franchisees are often an important source Receive on-going support of new products and marketing features for advertising and product All franchisees contribute to total development advertising so brand awareness can be Can achieve cost savings expanded on a greater scale. from bulk buying.

1 Introduction
The fast food revolution commenced in Australia in April 1968. Since launching the first restaurant in Sydney, with a staff of just 25, KFC has grown to 600 stores in Australia and New Zealand. KFC outlets are either company-owned or franchised and have over 12,000 permanent and casual employees in Australia and over 3,000 in New Zealand. KFC is part of the global company YUM! Restaurants International. KFC outlets largely comprise free standing, drive through, in-line and mall restaurants. They provide a diverse product range including fried and non-fried chicken, snacks and meal bundles. KFC is increasing the focus on product differentiation in an attempt to win a bigger share of the quality seekers market. Eighty percent of KFC outlets are franchised. This means a person or company purchases the right to operate a business under the KFC brand name. The franchise agreement extends over a number of years and includes restaurant design, product range and operating procedures required in each retail outlet. The purchaser of a KFC franchise outlet (the franchisee) pays an up front fee plus a monthly royalty, advertising contribution and purchasing contribution. All monthly fees are a percentage of net sales.

One of the roles of human resource management is to attract, retain and develop high calibre staff, who are a source of competitive advantage for the organisation. Human resource management is a significant part of the KFC organisational structure. The Australian Chief People Officer reports directly to the Managing Director of the South Pacific Region and staff recruitment is regarded as critical for the continued growth of the company. Recruitment processes are continually analysed and adapted to new online technologies. This ensures the most effective recruitment and training

3 Creating an employment brand

In 2007 the U + KFC brand was launched. This is a specific employment brand used for recruitment, training and careers. An employment brand represents an organisations reputation as an employer. Employer branding is about attracting, engaging and retaining quality employees who will enhance the company brand. The KFC employment brand represents the image of KFC as being a fun and successful place to work in the mind of current and prospective employees and key stakeholders. Key to the future success of KFC is the belief in Building People Capability. Emphasis is placed on the personal development of all employees through training, coaching, support and appraisal. A critical step in this process is the

visit www.afrbiz.com.au www.bizcs.co.nz visit www.afrbiz.com.au & & www.bizcs.co.nz

edition For extension activities and questions onquestions on Case Studies For extension activities and Case Studies DownloadsDownloads info Current CaseCurrent Case Studies Company Company info Studies

recruitment of the right people. A number of elements are used to attract potential employees, including: Retail traineeships School career packs, provided to school career advisors In-restaurant recruitment posters Employee referral program The U+KFC branding is associated with energy, opportunity and fun. The brand was developed and tested over a period of time refining the core values and essential qualities. The brand personality of U+KFC is a concept which includes all the basic features of a brand, both tangible and intangible. A brand personality is often described in human terms and incorporates elements of beliefs, values, influence, interests and history. For KFC it is a valuable tool to increase brand engagement and awareness. KFC has extended its brand management beyond the creation and presentation of a brand image to the actual reality of the employment experience. KFCs management practices and processes mould the perceptions of potential and current employees. Effective brand management for KFC results in hiring, developing and retaining the right people to deliver the KFC brand to the customer. The U+KFC brand aligns with the KFC brand and the overall company feel-good, inclusive and supportive culture.

The e-recruitment tool was developed as part of the U+KFC employment brand project. It was necessary to standardise the application process to ensure consistency for all KFC job applicants. Market research was undertaken to test the strategy and the technology. Pilot testing was carried out in selected restaurants to evaluate the marketing to potential employees and relevant personnel. This research and development culminated in the launch of the e-recruitment tool and U+KFC people brand in July 2007. KFC is part of YUM! Restaurants International (YRI). Yum! has established a world wide intranet site (titled Yumnet) which enables improved communication between key stakeholders Figure 4: Key stakeholders in KFC Leadership Team Information Systems Team Restaurant General Managers Marketing Area Coaches Assistant Restaurant Managers Franchise Partners Training Managers Team Members

4 Launching the online recruitment system

KFC has developed an e-recruitment tool which gives potential employees the ability to apply for a job online. The two target groups are: Team Members (Customer Service, Drive Through and Food Service) Managers The on line application process is shown below in Figure 3. Figure 3:

The electronic library is a system-wide database containing the details of all restaurant operating standards. All information is contained in one centralised online database, which is easy to update and can be accessed as needed by franchisees and employees. There is also a social networking site (iCHING) which links Yum employees around the globe.

5 Effective training and development

KFC, like the YUM! parent organisation, has a strong focus on building people capability. All restaurant employees receive initial training prior to employment which covers food safety, role specific Team Member orientation, business familarisation, online testing and Developing Champions. Elements of the training are web based using the Learning Management System (LMS) and Virtual Classroom Tools (Centra). Restaurant CoMPLETE Support Staff complete a structured induction. APPLICATIon Once they have commenced employment, Team FoRM Members continue to receive further on-the-job training. This training is both face to face and web-based. All Team Members undergo further training in CHAMPS (see Figure 5). Team Members SECuRE JoB also have the opportunity to cross-train within the restaurant so that they continually learn new skills.

KFC Application Process

This style of training has advantages for employees. It provides flexibility as to time and place of training. It suits the learning styles of young people who are comfortable with online delivery. They receive up-to-date information, can select what is relevant for their current needs and can therefore spend more quality coaching time with the Restaurant Management Team. KFC offers nationally accredited courses for Team Members and Assistant Restaurant Managers. Examples of these courses are Certificate II (Retail Operations) and Certificate III (Retail Supervision). Traineeships last from one to three years and combine work experience with on-the-job training. Trainees receive workplace and classroom training sessions. In some states Year 11 and 12 students can undertake School Based Traineeships which lead to a Certificate II (Retail Operations). For aspiring Restaurant General Managers a Certificate IV (Retail Management) is available.

Brand management The application of marketing techniques to a specific product, product line or brand. Brand personality The application of marketing techniques to a specific product, product line or brand. The basic characteristics and core values of a brand. Company culture The typical pattern of doing things in an organisation, the way we do things round here. A set of either formal or informal values and behaviours that exist within an organisation. Cross-train To undergo (or provide) training in different tasks or skills to improve overall performance. Employee engagement Where employees are fully involved in, and enthusiastic about their work, and act in a way that furthers the interests of the business. Employment brand Influences the way prospective and current and employees view the business and the employment experience that the business offers. Franchise(d) A franchise is a business relationship between a franchisor (someone who owns the business) and a franchisee (an independent person who pays a fee to use their established business name, expertise & knowledge). Goods or services are standard across a franchised business. Human Resource Management A functional area of management involved with the employment relationship between an organisation and its employees; the effective use of employees in order to enhance organisational performance. Market research Finding out information about the characteristics of potential customers to solve marketing problems and help with marketing decisions. Stakeholder A person or group who has an interest in how a business operates or functions. Examples include management, owners, employees, customers, shareholders, the local community and government.

1 5

SEARCH JoB

2 6

SELECT JoB

3 7

REGISTER

4 8

QuIz

KFC GETS In ConTACT

InTERVIEW

Questions & Extension Activities for Yum are on www.afrbiz.com.au & www.bizcs.co.nz You will also find links to the Yum website
edition

visit www.afrbiz.com.au & www.bizcs.co.nz

For extension activities and questions on Case Studies Downloads Company info Current Case Studies

The Australian Financial Review and Australian Business Case Studies Pty Ltd. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors or omissions in this Case Study.

The online application process has many benefits for KFC. It provides consistency and standardisation in recruitment with all potential employees completing the same questions and their responses being assessed in a uniform manner. This eliminates the potential for inconsistency between restaurant hiring practices. Using recruitment technology is more efficient and enables managers to spend more time training and developing Team Members.

There are clear advantages to the company Figure 5: CHAMPS: stands from training staff in this way. The webfor the six universal areas of customer expectations: based classroom provides consistent and up-to-date information, which is the same leanliness for all Team Members in all restaurant locations. The hours and modules completed by employees are automatically recorded, ospitality thereby reducing the costs of manual administration. Testing is uniform and ccuracy results comparable between Team Members. Blended training, that is, web-based and aintenance in-restaurant training, is estimated to require 41 percent less hours per learner than face to face/in-restaurant training schedules. roduct Quality The target of the blended approach is 340 hours to train a manager rather than the peed pre-web 580 hours. Time saved can be used for the higher value activity of coaching and development. New products require new operating procedures and these and other standards can be shared readily across all business units. The parent company can continually create and revise training content and other tools. Centra a virtual classroom enables live and recorded communication direct to restaurants.

C H A P S

Employees are encouraged to progress through the company to management level. The Graduate Leadership Programme is designed to provide degree qualified (or near qualified) graduates with extensive development and general management experience. This programme provides graduates with the opportunity to work in different areas of the organisation, attend leadership and functional training, and receive coaching and development on the job. This programme builds leadership skills and broadens the general business knowledge of participants.

6 Conclusion
KFC has elevated the power of its people as its secret ingredient for success. It sets the company apart from its competition. The brand personality of U+KFC was created to attract and retain an energetic and vibrant workforce with a supportive and inclusive company culture. The hiring, training, development and retention of the right people are key to KFCs long term success in a fast-paced and challenging environment.

GLOSSARY