Human Resource Managerial Practices at Starbucks
Studies have proved that employees are the most crucial assets for the company’s overall growth. At Starbucks, employees are the backbone of the company’s success. The company offers its employees an enabling environment which facilitates a faster growth compared to other companies in the industry. Starbucks has implemented human resources practices and policies as a strategy for gaining a higher competitive advantage within the retail industry and the global market. The company not only aims at attracting committed employees but also retaining them after developing their skills. The company’s mission statement affirms its dedication to cater for the well-being of the employees. The statement “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time,” implies that the company upholds humanity (Corporation Starbucks, 2018). Starbucks has dedicated to enhancing warm relationships among employees and customers through a personal approach. The ‘one person, one cup’ philosophy implies that the company aims to leave a meaningful impact on individual customers and employees. The statement goes ahead to indicate that the company seeks to gradually and continually touch the lives of communities. The mission statement is open for both individual achievement and group cooperation. Starbucks is famed for its commitment to favorable human resource practices. Retention of committed employees and the desire to attain fulfillment propels Starbucks towards maintaining an enabling working environment open to diversity and other sensitive organizational practices.
Starbuck’s Key Concepts in Managing Strong Employee Team Working Environment
Starbucks views its employees as key components to its success. It believes that the employees are crucial elements and act as a driving force towards the company’s success. The employees not only help the business to thrive, but also to retain regular consumers. As quoted by Hull (2013), studies have shown that motivated employees are happy employees and as a result, they tend to serve customers better, which is good for the business. Working at Starbucks; therefore, can describe as working with friends since, the company has workplace environment, which accommodative to all. The company respects appreciates and understands diversity making it capable of working with different kinds of people endowed with varied skills. In this sense, Starbuck is a more of a community rather than a typical workplace where supervisors work is to coerce their juniors to work. Interestingly, the supervisors act as facilitators or even co-workers. Starbucks offers all its employees equal benefits. Its health benefits are comprehensive and include dental, vision and retirement plans which are not popular in many companies.
Starbucks encourages open communication between both the top and lower rank employees. The employees are usually given frequent updates keeping them informed about the company’s status. The top leaders often hold open meetings to respond to other employees’ questions in an attempt to mitigate their concerns. The company strongly believes in the supposition that its impact should be felt within a wider scope, but not only by the people who can serve the customers. Therefore, it has laid policies that allow employees to disseminate their concerns to the senior management. The company upholds social consciousness and maintains high ethical standards even in sourcing its coffee and when dealing it its employees. To show that they value the environment in which its employees live, the company has resorted into environmentally friendly techniques including the adoption of the reusable cups a fact that reaffirms the company’s commitment towards environmental care.
Starbucks’ employees are usually exposed to a range of training programs that provide them with sufficient knowledge and skills on the company’s values (Xue, 2016). These programs help the employees to enhance their productivity and customer satisfaction. The knowledge learnt in the training programs enhances both interpersonal and intrapersonal skills which help employees to communicate optimally with one another. This also helps the employees to develop stronger and better relationships with the managers. The training programs cultivate the sense of unity within the organization. Starbuck has gained recognition for pioneering the practice of offering similar benefits to both part-time and full-time workers. Offering such benefits keeps the employees motivated and increases employee retention resulting in reduced employee turnover rates. As a result, Starbuck has continued to benefit from highly talented employees, which it managed to retain over the years.Starbucks maintains a reputable employee-oriented corporate culture, placing people first and ready to invest much on them (Xue, 2016). The company’s chairman, Schultz, is the pioneer of these beliefs and values. This practice relates much to his personal background which taught him to be compassionate to people struggling with their lives and living at the foot of the society. Schultz earlier life experiences have a direct impact on the leadership and the corporate culture of the company. The company’s commercial success reflects on the employees’ lives; hence, it has focused on playing an indispensable role in building their lives. Starbucks firmly believes that the interests of the employees should be put. First, their contributions respected, which translates to outstanding customer services. Maintaining this course of action prompts the company to gain good returns from its investments naturally.
The corporate culture and values of Starbucks are enhanced through the execution of a strong employee incentive system (Jianfei, 2014). It is among the few firms that do not rely on advertising to sell their brands. When similar companies within the industry are compared with Starbucks, it exhibits a more generous trend in the awarding of benefits and wages to employees. The company does a salary survey annually to promote its cultural construction. All employees are compensated fairly without bias or discrimination irrespective of the diverse ethnic, cultural, race and gender aspects. In accordance with relevant measures, Starbucks provides medical insurance, disability insurance and employee assistance plans to its workers. In an event where an employee is overwhelmed by family issues, the company also helps him or her through counselling programs. These practices are not popular in the retail industry. In most companies, the part-time workers do not get benefits out of their salaries, since it is a practice, which is thought to increase the cost of running business operations. However, Starbucks despite paying too many benefits to its employees still manages to stay at the top of the industry and its rivals. Employees at Starbucks are usually grateful to the incentives offered and offer first class services to the customers.Apart from the Starbucks employees enjoying a wide range of salary additions and benefits, they can buy its stock options at a considerably lower price (Jianfei, 2014). The company in 1991 established a stock investment program that enables its workers to buy shares at a discounted price. This implies that all the employees have opportunities to share in the ownership of the company. As the shares prices soar, the employees’ pride and motivation rises since they have an induced perception they are owners and members of the big Starbuck family. According to the study conducted by Zhu, Hoffmire, Hoffmire, & Wang (2013) on the impacts of employee stock ownership on Huawei employees, it found that this compensation approach positively enhances employees’ productivity. Similarly, through share ownership option Starbuck has benefited from high employees productivity and performance. This proves why at Starbucks, employees are not called “employees” but “partners”. A partner is always is treated as a co-owner, rather than an employee. In this sense, top management gives information to the staffs as opposed to giving orders.
Why Starbuck Human Resource Management Practices can be used as a Model for Adaptive/Diversity Sensitive Organizational Practices
As noted in the earlier analysis, Starbuck uses effective human resource management practices and policies, which any other company would like to emulate. Most of the Starbucks human resources practices and policies are based on inclusivity and diversity culture. Starbuck employees’ diversity and inclusivity range from racial orientation, race, gender, ethnicity age, life experiences, religion, disability, and cultural backgrounds to thoughts and ideas (Starbucks Corporation, 2018). Starbuck diversity culture is an ideal case study, which other organizations can use to develop and a diverse workplace. In Starbuck, diversity culture has helped the company to boost working experience as well as driving business success. Starbuck believes that it is the inclusion of the diverse perspectives and experiences, which have influenced by culture empowerment; hence fostering new ideas, business growth and innovation.
Reasons, why Starbucks is the existing real example case study on why it should be used to sensitize diversity, can be supported by McKinsey & Company (2015) report. McKinsey & Company found that firms practicing racial and gender diversity were more likely to outperform other companies in the same industry. In the research, McKinsey & Company established that companies with racially diverse workplace outperformed others by 35 percent. The report also noted that 10 percent increment of the ethnically and racially diverse senior management increased the company gains before tax and interest deductions by 0.8 percent (McKinsey & Company , 2015). The report by McKinsey & Company concluded that failure by the companies to embrace inclusivity and diversity puts off investors since they cannot identify the firm’s commitment to embrace diversity and foreseeable business undertakings in future. This study has proved that Starbuck has been on the right track by creating a culture whereby each employee, partner and stakeholders feel accepted and appreciated.Creating a strong and sustainable workforce diversity calls for programs and policies that will maintain the anticipated diversity aspects. Starbuck has done so by creating a work environment that accommodates all employees irrespective of their cultural backgrounds. For example, the company has established a racial bias program to educate its employees on the importance of accommodating others in the workplace despite cultural, race, ethnic and ideological differences. Globally, Starbucks has been applauded for embracing diversity in the workplace, especially on May 29, 2018, when the company closed all its U.S. stores following the earlier racism issues when one of the Starbucks employees called police on two black men while in one of the company stores (Jefferson & Lewis, 2018). By doing so, Starbucks exhibited its values for diversity and an indication it would sacrifice its resources to make sure the culture of diversity is maintained. Although the company anti-bias training has been criticized on the grounds that it will not last, it is a good approach to sensitizing employees on why they should embrace diversity.
Inarguably, Starbucks is one of the companies with the best human resource management practices. Its human resource management programs range from fair compensation, non-financial benefits, appreciation to employee stock ownership. The company has embraced inclusive and diverse culture to provide a friendly working environment for all its employees. There are several lessons, which can be learnt from Starbucks managerial practices. First, it is apparent that cultural diversity can be used to realize business success. Starbuck uses its diversity aspects, especially ideas and perspectives to come up with innovations. Secondly, allowing employees to become owners of Starbucks business through share purchase option helps to boost their productivity and performance. Third, Starbuck cultural diversity managerial practices have proven that organization, which tend to embrace diversity attract huge investment capital, besides increasing their profits. This observation has been supported by McKinney & Company report on why diversity matters. With these reasons, Starbucks is a perfect example that can be used by other organization to sensitize the importance of adapting inclusivity and diversity in their daily business operations.