US fast food giant McDonald's yesterday said it will raise the salaries of its workers, including part-time employees at its 800-odd Chinese outlets, effective from September 1.
About 95 percent of McDonald's China "crew" will see a pay rise by 12 to 56 percentage points, or an average of 30 percent, said Jeffrey Schwartz, CEO of McDonald's (China) Co Ltd.
The rest 5 percent are already being "paid very well".
McDonald's has broadly three types of employees: crew, or the non-managerial staff serving at its outlets; managers; and administrative staff.
"We have raised salaries in China many times but this is the first time there is such a large increase covering so many people," Schwartz said.
The announcement comes a few months after media reports about McDonald's and other foreign fast food operators such as KFC paying their part-time staff less than the local minimum wages.
But Schwartz said the company's decision to raise pay has nothing to do with the pay-related bad press it has been getting. "We have been looking at a wage increase for a year. The issue (reports of low pay) only reminded us that we need to move more quickly."
Under the new wage initiative, salaries of McDonald's "crew" across China will be "much higher than the local minimum levels".
"It will be 15 percent higher in both Beijing and Guangzhou, and 12 percent higher in Shanghai," said Susanna Li, vice-president of McDonald's China human resources.
Though the labor bureau of South China's Guangdong Province clarified in June that McDonald's has complied with the regulations set by the local government, the issue of underpaying part-time employees has dented the company's brand image.
And that's the last thing McDonald's would like to see.
"China contributes 2 percent of McDonald's global sales, which is a significant progress. Annually, McDonald's opens 100 new stores in China," Schwartz said.
"We don't want to be thought of in that (negative) way. We want to be the best employer in China."
McDonald's managers, who account for 14 percent of its total local staff, are not included in the wage increase program, but they have benefited from the "profit-award program" that started last year.
In 2006, 80 percent of the US fast food giant's Chinese managers got a bonus of up to twice their annual salary.
(China Daily August 7, 2007)
