Starbucks HR Policies and Practices

Starbucks HR Policies and PracticesContents (Jump to)IntroductionBackground of the StudyDefinitionsRationaleHRMOrganizational PerformanceHuman jacket crown AdvantageCompany discipline StarbucksLiterature ReviewHRM and Organizational PerformanceHRM Policies PracticesRecruitment Selection indemnityReward PolicyEmployees bugger offment PolicyHuman Capital and Competitive AdvantageCritical AnalysisCurrent and past HRM policies in StarbucksPast and current HRM ch anyenges in StarbucksHRM Policies and StarbucksRecruitment selection Policy and StarbucksReward Policy and StarbucksEmployees Development Policy and StarbucksPersonal ReflectionLearningIssues Identified in Starbucks PoliciesRecommendations and ConclusionsRecommendationsConclusionReferencesIn this essay the impacts of Human Resource Management (HRM) policies argon evaluated on make-upal mathematical go with a thorough study of Starbucks. It provides complete insides into the Human Resource (HR) three dimensional model an d its implementation in Starbucks is evaluated.IntroductionBackground of the StudyThe work force of an institution is considered as a source of competitive edge over the competitors for that disposal (Barney, 1991) (Barney, 1991) (Pfeffer, 1998). So due to this the significance of the employees has risen hugely and the conduct of the presidential term to develop a better benignant resource constitution has become one of the major organizational concerns to ensure the optimum use of human enceinte to keep up their maximum productiveness. This increasing grandeur of human capital has raised the interest of the researchers to understand the relationship amidst high instruction execution and effective human resource management policies and so far many researchers move over also con plastereded that effective human resource policies have positive effects over the execution of the organization (Huselid, 1995). But still we can see a huge gap in studies that have been cond ucted to understand the impacts of that positive relationship between organizational process and effective human resource management system for multinational companies. Most of the previous researches have been conducted to understand the implications of that relationship on home(prenominal) industries of Europe (e.g., Guest and Hoque, 2008) USA and very(prenominal) few studies have been made in Asia.RationaleThis essay is concentreed to understand the HRM policies adopted by considerable multinational retail service provider Starbucks and critically discusses what type of value they have created by successful implementation of these HRM policies in the form of more than attached and motivated custody.DefinitionsHRMHRM is an important function of organizations performed internally in pronounce to hire the required workforce, manage them effectively and ensure that they are working in cover direction in order to hand boilersuit organizational goals (Robert L. Mathis,John H. Jackson, 2008).Organizational PerformanceWhen we compare the planned or expected output of the organization with the actual surgical process we can get the organizational mental process level (Daniel M Wentland, 2009).Human Capital AdvantageAccording to Boxal, 1996 the human capital profit is collection of all specific HR activities that are considered as special features of that firm, although these practices are performed by using formal as well as slack both types of processes.Company Information StarbucksThis essay discusses the effectiveness of HRM policies on the organizational performance of Starbucks. It is one of the some major organizations, dealing in retail empyrean that pop the questions magnificent benefits to its both full time and part time employees. Starbucks is deep brown Stores Company originated in 1917 in Seattle, USA and now it has become a stupendous organization working at world level in 44 countries with 15000 stores. It is one of the leading orga nizations in retail condescension and is known for its special coffee brand and as roaster.The company has implemented quin corpo array strategies that are offer best quality products, ensure maximum penetration in market, pass a highly social atmosphere, provide relaxing, develop the best working conditions and sum up the profitability of the company by offering high margin products and trim down the equals (Jacqueline L, John L. Colley, Doyle,Robert D. Hardie, 2004). It has adopted the Laissez Faire management style and above the management at store level it has hour different levels of management in its organizational structure. The skills that give it benefit of its competitors are the ability to make drinks and the skills of employees. At Starbucks employees are considered as partners of the organization and provided with special trainings to develop better understanding of the product and hear them new methods of brewing and techniques of sales. Partners have powers to take decisions when needed and shift supervisors assign them duties. Evaluations and Promotions are used to motivate them. The performance of the company is well observed done the balance sheet of last five years as the assets of the company have been doubled as they were in 2005. Owners equity is also raised (SBUX, sense of balance sheet)Literature ReviewHRM and Organizational PerformanceAccording to most(prenominal) of the HRM specialists the effective human resource management system is very much important to achieve high levels of organizational performance (Delery, 2009 MacDuffie, 1999). According to them the effective Human resource management system is mostly designed to ensure high organizational performance by getting optimum overall output of the company rather than having more focus on individual performance. As Reeves and Dare (2007) describes that we can get high performance from an employee by increasing his motivation and abilities by using any method. In the fi eld of HRM and organizational performance a significant office is from Huczynski and Buchanan, 2009. According to them when HRM activities are designed in an organization according to its strategy it increases the productivity level of the organization, reduces its turnover and also enables it to perform well in fiscal sector (Huczynski Buchanan, 2009). Their visualizeings proved that when organization succeeded to satisfy its workforce and make them committed it can make its performance in corporate sector much better. The productivity is also very much dependant on the job design (Huczynski Buchanan, 2009).HRM Policies PracticesAccording to Huselid and Becker (1995) have critically examined the human resource management system and find out the three major dimensions of it.Recruitment Selection PolicyMany studies have proved that an effective enlisting and selection process in organization is very much crucial for its success and to achieve high performance goal of the compan y. The system should be rigorous and should be designed to meet the overall organizational goals according to Reeves ad Dare (2007). The researchers have found that there is a positive relationship between effective recruitment and selection process of the company and overall organizational performance. When organization selects employees who best match its requirements and have enough abilities to contribute to the overall success of the company they can reduce their cost of employee development, they dont need to throne in employee training programs that costs a lot to the organizations.Reward PolicyAccording to many researchers the compensation ground on performance is a very successful tool to get high performance level (e.g. Arthur, 1998 Delery and Doty, 2009 Huselid, 1995 MacDuffie, 1999). Doty and Delery (2009) even declare the reward system based on performance as only method of achieving high performance level. Along these many some other studies have discussed the posit ive relationship of performance based reward system with the overall performance of the organization Like in control theory by Snell, 1999, cost theory by W remedy and Jones, 1992, and agency theory by Eisenhardt, 1988 and all these studies have found a positive relationship between the overall performance of the organization and the reward system based on performance. According to prediction theory by Vroom 1964 the high performance level of an individual can be expected if organization meet his expected needs. But most important thing is that the reward system based on performance is dependent on other functions of human resource management. The individual output should non be the only basis of rewards provided by the company organization should also consider the contributions of that person in the overall organizational performance.Employees Development PolicyThe performance of an organization is very much dependant on the employees development policy of the organization. Organi zations use a yield of practices in order to develop their human capital. prime(prenominal) of all the investments made by the organization, to provide non-technical and technical trainings to its workforce, determines the success of organization to increase the knowledge level of its employees. According to many researchers like Huselid and Delaney (1995), McGrath and Koch (1996), Huselid (1995) the organizational performance can be increased spectacularly by providing proper training to the workforce. They all have developed a positive relationship between overall organizational performance and the employee development policies of the organization. Organizational are now more concerned to develop their employees in order to achieve high performance they invest in their trainings and also try to make it possible to have long-term mutually beneficial relationship with them (Doty and Delery 2009). In order to enable their employees to plan their careers justly they design proper career development programs for them. The companies that have promotion system from within the organization they have usually more committed and motivated employees as they want to work hard in order to get promotion (Snell and Lepak, 1999) and when company adopts internal promotion system it shows the lading of the organization towards its workforce.Human Capital and Competitive AdvantageWith the increasing globalization trends the importance of skilled human resource have raised greatly, now human resource is considered that if an organization invests its efforts to Develop its human resource as an advantage in result that human capital will contribute to establish overall competitive advantage of the organization (Boxal, 1999).Critical AnalysisCurrent and past HRM policies in StarbucksThe committed and motivated employees have great significance in the overall organizational success and Starbucks translate that very early. So Starbucks gave great importance to recruitment proce ss in order to select right mint for jobs and develop them and retain them in order to get sustainable high performance of the organization. And effective HRM policies adopted by the company also shows its commitment towards its human resource.From its start Starbucks has given great importance to its frontline staff and baristas because they give it competitive advantage by providing the nodes the experience of the Starbucks. They always remained the center of the companys attentions. From first day while hiring someone for company, the qualities that are given great importance are dependability, adaptability and ability of the candidate to work as an effective member of a team.Still, as current HR policy to develop the right people the Starbucks is making huge investments in the development and training processes of the workforce. They are taught the techniques and skills that they will be required to perform their tasks while working at Starbucks and increase their efficiency a s well. With these huge investments in human resource the Starbucks can expect to have strong employee satisfaction level (HRM, Starbucks).Past and current HRM challenges in StarbucksThe cosmicgest challenge that Starbucks cope with in first decade of 21st century is to maintain the goodwill of the organization while having a high expansion rate and to develop the qualified workforce to support its expansion policy. The analysts were in doubt that with this fast expansion policy whether it would be able to meet the goals to be a positive employer. In early years of 21st century the company claimed that its huge costs on human development have been showing great in the financial position of the organization. In fiscal year 2004 the spending on human resource development was more than its spending on ad expenses that were $68.3 million. In mid of 2004 in order to meet these heavy costs the company needed to increase the price of its beverages with 11cents these were already premium prices for the Starbucks products. But other hand company was non in position to cut down the incentives that it provides to workforce because that action can lead a major decrease in their morale.Starbucks still keeps its high expansion policy as both day it is adding 5 new stores in its portfolio with 200 new employees. So the challenges for Starbucks are not changed as they were at the start of 21st century (SBUX, Daily Finance).HRM Policies and StarbucksRecruitment selection Policy and StarbucksStarbucks is one of the world biggest organizations and having each day addition of five new stores in its large profile and in order to maintain this magnificent growth Starbucks has to hire 200 new employees every day. The process of recruitment in Starbucks includes many tools like interview of the candidates in which they also attend the sessions of coffee tasting and the terms and conditions are being developed and they are emphasized to provide with notes that are handwritten rat her than response letters also the use to phone calls if appreciated. By using all these tools Starbucks get to know the response time of candidates. Starbucks also asks its recruiters to regularly send gift cards of Starbucks to its job applicants whether they are selected or not for job they must be treated as customers for the company. The process of recruitment in Starbucks is specifically designed for the job that is needed to be filled. The mission of the Starbucks is to expect the diversity and provide the employees the opportunity to develop themselves. afterward passing the interview Starbucks first train its employees before final selection (Starbucks, ICMR India).Reward Policy and StarbucksStarbucks always give more importance to its people than products, in a store staff it has 16 partners and one manager and one assistant manager on them. The incentives that Starbucks provide to its workforce are free wellness care that also includes vision and dental care facilities. It offers straining options as well in the form of extra benefits and along this the employees who work average 20 hours a week for the company and continue it for three months company provides them shift drinks free and free pound of tea or coffee in every week. The rise in salaries of employees is based on performance evaluations that are conducted semi annually and these raises can be from 0% to 5%. Company does not offer any monetary bonuses but provide many non monetary awards like it offers about 30% discounts to the employees on all goods that they buy (Starbucks, ICMR India). The contribution of partners in overall organizational performance is recognized by several different kinds of programs. Just like company has implemented a program of Green Apron, that is an evidence of Starbucks commitment towards environmental issues and its brand behavior. Green Apron book is provided to every partner that contains the values of the company and desired behaviors and peer recogniti on cards. Team contributions are also recognized to evaluate their performance.Employees Development Policy and StarbucksIn employee development policy Starbucks has designed training programs and learning sessions for new as well as actual employees. The employees are provided refresher courses in order to align their skills with industry customer demands. In training programs that Starbucks offers to its employees include customer dealing techniques, coffee making workshops, customer care programs.Personal ReflectionI will make the comparison of Starbucks with an IRAN based coffee provider named Tunnel Restaurant Coffee betray. This is a big chain of Coffee shops and eating places with 15000 employees in IRAN. The chain network of the company is spread in whole IRAN with 724 stores. If we compare the three HR dimensional model of this restaurant with StarbucksThe reward system in Tunnel restaurant is not based on performance of the workers they have fixed reward system and ann ual bonuses that are aligned with religious festivals. While Starbucks ha performance based reward system discussed above. They lack the business knowledge due to the nonexistence of capital based business. Employee development also not that much efficient as they still based on traditional views and take human resource as business costs. Employee selection process is much better and we can say too much extant same like Starbucks they have policy to hire the people from the area where they operate their store (ChefMoz Dining Guide, Tunnel Restaurant Coffee Shop, 2009).LearningThe application of three HR dimensional model for performance of Starbucks has helped me a lot to develop understanding about how to identify the organizational needs and designing systems according to those specific areas where need occurs and to cover the deficiencies. These three dimensions are very much crucial for the organizations as they help to develop the business to create most precious asset that is human capital.Issues Identified in Starbucks policiesMost of the workforce of Starbucks is below the 20 years of age and the incentives that Starbucks is providing are more focused on health facilities that include medical, vision and dental care facilities and also Stock options for employees.The numbers of monetary awards that are being offered to employees are very few include semi-annual raises and wage rates based on per hour working. Although the focus of the Starbucks is more on providing the third place atmosphere but still the turnover rate of employees is very high and one of the big reasons behind it is the deputize of managers in store whenever upper management wants so it has very bad impacts on the partners.One more issue that company is facing in this area is that although the focus of the company is equal on direct labors and high margin products but the performance of some stores is not satisfactory in this segment.Recommendations and ConclusionsRecommendationsAlt hough Starbucks is one of those few multinationals that have strong commitment towards their people but after this study we can make many recommendations to the company to do in near future in order to increase their performanceWhile designing the incentive package for the employees company should also consider the age factor of them and offer benefits according to their needs.The number of monetary awards should also be increased with non monetary benefits as it is argued that monetary benefits motivate faster and have long term effects on employees.The exchange of managing level staff should not be frequent.The audit should be done carefully and the stores that are not performing well they should be closed as they cause extra costs to the company.ConclusionStarbucks is one of the big organizations of the globe it has a large employee base and the way through which it is managing its employees is very appreciable although the need for more work in some areas is always remain even i n perfect systems.ReferencesBarney, Jay B, 2004, sustained competitive advantage and resources of Firm. 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(2009), Organizational Behavior. 6th edn. Pearson Education.Jones, G. Patrick. Wright, 1992, an economic approach to conceptualizing the utility of human resource management practices, pp 271-300.Jacqueline L. Doyle,John L. Colley,Robert D. Hardie, 2004, Corporate Strategy, Corporate Strategy, pp 1-25.MacDuffie, John P, 1999, manufacturing performance and Human resource bundles Industrial Relations Labor Review, pp 197-221.Robert L. Mathis,John H. Jackson, 2008, Human resource management, strategic HR management and planning, pp 33-64.Pfeffer, Jeffrey. 2007. The human equation Building cabbage by putting people first. Boston Harvard Business Press.Snell, Lepak and D.P, 1999, the human resource architecture, academy of management, pp 31-48.Vroom, Victor. 1964. Work and motivation. New York Wiley.Starbucks Growth Challenge and HRM Policies available at http//www.icmrindia.org/casestudies/ e numeration/Human%20Resource%20and%20Organization%20Behavior/Starbucks%20Human%20Resource%20Management-Growth%20Challenge-Case%20Studies.htmThe_Human_Resources_ChallengeStarbucks, Wikipedia.orghttp//www.starbucks.com/