Pay them or lose them

McDonalds began making headlines in July when the company worked with Visa to create a budget guideline for employees. According to Clare O’Connor of Forbes, this budget has not only backfired, but more likely caused increased support for political campaigns aiming to boost minimum wage. No business, big or small, is immune to the ethical pitfall of under-paying employees. But, this situation lends itself to a great case study on emotional intelligence when it comes to paying employees.

Emotional Intelligence and McDonalds’ Payroll

Wikipedia describes emotional intelligence as the ability to identify, assess and control the emotions of oneself, others and groups. So what does the emotional intelligence process look like for McDonalds in this situation?

Identify.

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The budget assumes employees would earn $1,105 from one job and hold an additional second job in which they would earn $955. There are a couple problems right off the bat. Because they are earning minimum wage, that means those employees are working approximately 38 hours a week for McDonalds. Based on the $955 from the second job, McDonalds also expects those employees to work about 32 hours a week at a second job.

An organization aiming to be emotionally intelligent should stop and realize that a seventy hour work week is going to leave employees stressed, tired and unhappy. Here the organization has identified the feelings of employees.

Assess.

Another issue with the budget arises when one realizes that even if the worker is able to hold a second job

and work 70 hours, many of the budget items are unrealistic. In most locations, $600 rent isn’t practical. Beyond that, the national average for health insurance is at $215 where McDonalds listed the item at a $20 monthly expense. The moral of the story here, is that even with both jobs, workers would still be struggling to survive.

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Here again, companies like McDonalds have an opportunity to put themselves in someone else’s shoes. Here there should be an acknowledgement of conflict. The next step is going beyond realizing the situation exists to empathizing. This involves moving past knowing the workers are upset and assessing why they are unhappy, which is a key aspect of both emotional intelligence and conflict resolution. Understanding these worker’s emotions involves asking: what is like to work 70 hours a week but still not bring in enough money for a comfortable living? What is it like to have to choose between a safe apartment and being able to eat? Or having to decide between buying a reliable car or having health insurance? It is likely these workers are continually stressed, insecure because they don’t have options in emergencies, and hurt because they are under-valued.  

Control.

At this point in our study, the organization would acknowledge the hardship for their employees and empathize, which would lead to taking control. Now, emotional intelligence isn’t about completely yielding to the demands of others and people pleasing. The key here is to manage sympathy and empathy with a level head. So, should McDonalds automatically yield to recent strikes and pay workers the $15 an hour they are demanding (as reported in The New York Time’s A Day’s Strike Seeks to Raise Fast-Food Pay). Not necessarily. However, McDonalds should take the time to ponder how much they can improve wages. University of Kansas School of Business’ student Arnobio Morelix performed a study which revealed that if McDonalds paid these workers the $15 they seek, the price of a Big Mac would go up only %.68. The company doesn’t have to worry about loss of business with such little change in cost. If McDonalds’ CEO made $8.75 million in 2012, surely there is room to move some figures around.

Beyond considering how the problem can be fixed, emotional intelligence is about acknowledging the other side’s feelings and having a conversation, which can be further understood by learning the principles of conflict resolution. Though it would be jaw-dropping to imagine it would actually happen, in this situation, McDonalds could make the effort to not only increase wages, but make budget explanations available to employees so they understand why they earn what they do, rather than simply feeling like a kicking-post. The more the company is willing to truly start caring about the employees, the happier and more productive employees will become. In return, employees need to be willing to meet the organization in the middle.