With the advent of globalization and expansion of the firms across geographical locations, the competition among business enterprises have become intense. This has necessitated the firms to employ best management practices in every functional area. The most critical factor for the success of a business enterprise is not only the quality and price of the products they supply but the work environment they create for the employees to get motivated. In order to understand the criticality of the human factors involved in the business functions it is important to carry out an organizational analysis. For the purpose of this paper the organization ‘Starbucks Corporation’ is chosen to analyze the factors of motivation and performance of the employees and the teamwork being employed in the corporation.
Starbucks Corporation – an Overview
Starbucks Corporation the most renowned retail chain of coffee shops across the world has been one of the rapidly growing public companies in the United States. Starbucks Corporation based in Seattle Washington was founded in the year 1985. Apart from offering brewed coffees, Italian style espresso beverages, cold beverages, various complementary food items, coffee-related accessories and equipment, a selection of premium teas through its various retail stores, the company is also engaged in the purchase, roasting and sale of whole bean coffees through its worldwide outlets. The brand portfolio of the company includes Tazo teas, Starbucks Hear Music compact discs, Seattle’s Best Coffee and Torrefazione Italia Coffee (Yahoo Finance).
As of March 12, 2008, the company was operating nearly 16,000 retail stores in 44 countries across world employing 170,000 people. (About us) It is not only the quality of the coffee they supply that attracts the customers but also the level of their customer service and the cozy environment within the store. It is perfect the analyze the case of Starbucks as the company has a lower turnover rate of employees is low at 65 percent as compared to 150 to 400 percent in the case of other players in the industry (Michelli, 2006) The company can be considered as the optimal business model evolving the strategies of employee motivation and performance, and cooperation of team work.
Employee Motivation and Performance
It has been proved that satisfied workers tend to be self motivated and self motivated behaviours exceed the formal requirements of a job. On the contrary, the employee dissatisfaction results in an increased probability for counterproductive behaviours like withdrawals, burnout, and workplace aggression (Spector 1997). Thus employee motivation has a direct impact on the job performance which ultimately positively impacts the turnover decisions of the employees. When the employees are effectively motivated to perform better in their jobs, they automatically derive the job satisfaction and it makes them like the jobs they are doing. This in turn would result in the employees’ decisions to stay with the current job. Thus employee motivation has a direct and positive impact on the employee turnover decisions.
It has been the case that knowledge; understanding and improving job satisfaction can contribute positively towards improving the employee motivation and thereby can help in achieving the organizational goals. Therefore it follows that that any organisation interested in achieving its goals has to make a careful analysis of the job satisfaction of the employees at various levels of the organisation and introduce motivational initiatives to improve job satisfaction to retain the best talents.
A higher level of employee motivation is important in any organization, as it contributes to the following distinct advantages to the organization.
Reduced Employee Turnover
Employee motivation is an influential factor on the employee turnover. It is important that the employees should remain highly motivated as otherwise there is the potential danger of losing efficient employees which affects the performance of the company. Such loss of employees results in losses to the company, as companies invest large sums of money on the employees directly or indirectly (e.g. training cost).
Enhancing Job Performance
By increasing the employee motivation it is possible to ensure a high level of employee job performance. If employees remain motivated they will prove to be better workers. According to recent researches employee motivation is closely related to job performance. Hence improving employee motivation will result in tangible improvement in job performance.
Improved employee attitude
Motivation is one of the important factors which are strongly related to the feeling of the employees towards their organization. Highly motivated employees develop a sense of belonging towards their organizations which leads to higher performance of the organization itself.
A higher degree of employee motivation will enable the employees to contribute more towards their work by taking active participation in their jobs. This creates an environment for the employees to perform to their fullest extent. Employees with low motivation tend to show withdrawal behavior such as absenteeism, lateness, passiveness and the like which may eventually may lead to high employee turn over.
Motivated employees, who have a helping tendency, may contribute towards a healthy organizational atmosphere by helping co-workers to complete their work on time and in that way contribute towards achieving the organizational goals effectively.
A team may be defined as a unit of two or more people interacting with each other for the purpose of accomplishing a goal. The effectiveness of a work team depends on the productive output from any job performed and the personal satisfaction derived by the team members from such accomplishment. The team work in any organization results in the following tangible benefits to the organization as well as to the team members.
- Level of Efforts – the teams normally carry an enormous amount of energy and creativity than the individual members there of
- Satisfaction of members – the best part of team work is that teams tend to reduce boredom among the members and the feeling of self-worth and dignity of the employees is often enhanced
- Expanded job knowledge and skills – in the team work it is possible for the team members to gain extra intellectual skills and expertise by interacting with various members of the teams
- Organizational responsiveness – by working in teams the employees work next to each other and this enhances the chances of the employees exchanging the jobs among themselves (Understanding Management)
In order to be effective the team should possess certain essential characteristics, so that optimum output can be ensured out of the team performance (Robbins & Coulter, 2002). It is important that clear team goals are established so that the team members will be encouraged to align their individual goals with the team goals. It is also necessary that the team should consist of members with skills relevant to the context of the established team goals. “Mutual trust is also imperative among team members and that can be facilitated through open, honest and collaborative organizational culture”. (VerenaVeneeva)
Employee Motivation and Performance in Starbucks Corporation
The chief executive officer of Starbucks Corporation Howard Schultz has identified the success formula for his enterprise is not only the coffee but also the committed performance of highly motivated employees. He is of the view that constant attempts to capitalize the working experience of the employees and providing them the chances of moving upward in the organizational positions is of prime importance to ensure success of the company. In Starbucks the employees are recognized as working ‘partners’ and are provided a perfect training before they commence their job to ensure the optimum performance. Starbucks offers an interactive organizational structure which makes the employees instill themselves into their roles and this highly motivates the employees to attain a new level of performance.
The managers of Starbucks treat the employees with dignity and equality and each employee whether on a full time or a part time position with the company as ‘partner’. The gap between the managers and the employees is narrowed by the frequent interaction of the managers with the employees even at the basic level. This enables the company to maintain well organized management system and create a greater work environment for the workers as envisaged in the mission statement of the company.
There is a well organized communication channel in Starbucks which facilitates the employees to voice their concern on any issues affecting their performance. Weekly interviews are conducted to assess the needs of the workers and any other impediments that hinder the performance of the employees. On the employee benefits side, apart from the wages according to the industry standards, the employees are offered a number of welfare measures which include health care for employees and commodities discounts.
Team Work in Starbucks Corporation
Team work often constructs a social structure in any organization which enables the employees to socialize among them. Robbins (2001) stated that the factors influencing teamwork are relation of leadership, roles, principles, status, size, composition and the power of agglomerate. Team work in Starbucks is facilitated by the well established system of a cordial relationship between the managers and the employees. The employees of Starbucks who are recognized as partners are given freedom to take part in the decision making process relating to any policy issues of the company. This improves the employee morale and involvement in team working within the organization. The company keeps the number of employees in a retail location to the minimum which makes the employees to acquaint with each other and identify them as a team because of the frequent interaction which is an essential factor for team working. The other way in which the corporation encourages team working is by entertaining the suggestions and complaints of the employees with great care and importance. This encourages the employees to involve them more in the accomplishment of organizational goals and offer several valuable suggestions for the improvement of the organizational performance.
Recommendations for Improvement
The following are few recommendations for the improvement of motivation of employees in Starbucks Corporation:
- Formation of employee committees for attending to the welfare measures will help the management to identify the precise needs of the employees in the matter of welfare
- Frequent interactions with the families of the workers by the top management will ensure a sense of belonging among the employees
- Valuable gifts in the form of cash or kind recognizing longer service with the company will encourage the workers to stay longer with the company
Examples of Best Practices
A best example of employee motivation practice can be found in the recognition of employee services by the Michigan Department of Transportation’ (MDOT) MDOT is a government multi-modal transportation agency. “In addition to being responsible for building and maintaining roads and bridges, MDOT also is responsible for public transportation that includes airplanes, trains and buses”. (Jan Seegar, 2005) Despite being a government department the organization has encouraged its employees to provide the greatest customer satisfaction. The organization has changed its overall business strategy to make employee excellence and recognition the key factors for success while attempting the promotion and communication of employee recognition on a world class scale (Jan Seegar, 2005) The organization while empowering each employee to get the work done more efficiently treats them as an effective team member. The organization has developed core values which all the employees are encouraged to learn and live by them. The fundamental elements followed by them to make the employee recognition effective are:
- “Be consistent with and reinforce department values and goals.
- Highlight effective teamwork.
- Recognize improvement and outstanding achievement whenever it happens.
- Combine formal, informal and day-to-day methods of recognition.
- Deliver recognition in a personal and honest manner.
- Be timely.
- Be simple and user-friendly.
- Be flexible and fresh – be willing to make changes.
- Ask for employees’ input” (Jan Seegar)
For making the employee involvement effective the department has instituted various awards which will be distributed to the best employees who will be nominated by the customers as well as by the employees themselves.
The organizational analysis of Starbucks Corporation a successful business venture thus proves that motivation and team work are the most important factors that any business organization should recognize in order to sustain the organizational growth and profitability. This has also been substantiated by the best practices of employee recognition in the Michigan Department of Transportation. These instances go to prove the fact that in quite contrast to the traditional principles of management which talks more about the top management and their leadership qualities for the success of an organization, the appropriate management technique for contemporary business management should encompass the emotional and financial encouragement of the employees to derive the desired results. The employee motivation and personal satisfaction take priority in any management decisions affecting the business policies of the company and this is the order of the day.
About us ‘Starbucks Coffee Company’. Web.
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Robbins, S, P & Coulter, M, (2002), ‘Management’, Sixth Edition, New Jersey: Prentice- Hall Inc.
Spector, P. E. (1997). Job satisfaction Thousand Oaks, CA: SAGE Publications, Inc.
Understanding Management ‘Team Work in Organizations’. Web.
Verena Veneeva ‘Ensuring Effective Teamwork in Organization’ Ezine Articles. Web.
Yahoo Finance ‘Starbucks Corp (SBUX)’. Web.