Human resources play a crucial role in any company since they constitute the bulk of the company’s performance in the target economic environment. Therefore, it is essential to create HR strategies that foster the development of employees and promote their growth. At Starbucks, HR management has rarely been an issue since the organization has always understood the role that its employees play in the company’s success in the target market (Ogbu Edeh & Mlanga, 2019). Specifically, the reward-related policies that the company has been implementing to encourage an improvement in performance rates warrant closer analysis.
By introducing the policies that focus on a combination of financial and emotional rewards for staff members’ performance, as well as focusing on employee satisfaction, Starbucks has managed to maintain its retention rates and the quality of its services unprecedentedly high.
Role of Human Resources and Talent Management Strategies in Driving Business Performance
Successful business performance and effective management of human resources are inseparable from each other since every business depends on the people that participate in it. While the roles of employees might seem too insignificant in the grand landscape of the company’s business performance, each of them contributes to building the corporate edifice that will inevitably be destroyed once a single item is misplaced.
Human resource management as a set of strategies used to improve the relationships between a company and its staff and encourage the latter to perform better are crucial for driving the business performance. The very definition of HRM suggests that the relationships between a company and its employees should be established in a way that will i9nvite employees to explore their potential and implement it in the organizational setting (Kumar, 2018). Therefore, the application of appropriate human resource strategies has a direct impact on the levels of business performance.
With the integration of the approaches that encourage staff members to grow professionally, one will be able to build a professional team of experts. Moreover, the incorporation of HR strategies will allow shifting the focus toward interdisciplinary cooperation, which will be extraordinarily helpful in maintaining the quality of performance and inspiring staff members to learn new skills from each other by sharing knowledge and experience. Finally, the application of human resource management strategies will lead to the introduction of the philosophy of lifelong learning into the organizational environment. Thus, the concept of unceasing learning will be paralleled with the notion of incremental innovation, which has become central for numerous companies willing to make a difference and appeal to a wide range of audiences.
In addition, when used correctly, talent management strategies can cause a rise in employee engagement, thus allowing staff members to perform better. The rise in motivation and the subsequent increase in employee satisfaction will lead to performance improvement, which means that the specified factors will eventually be of significant use to a company and its business indices. Therefore, human resources and talent management have a direct influence on the levels of performance that a firm displays in its target market.
While it would be wrong to attribute every performance-related success of an organization to the extent of satisfaction that its staff experiences and the application of appropriate talent management strategies, the specified factors have a significant effect on the outcomes that a company can deliver. For example, a recent study points to the fact that effective talent management can encourage employees to learn new skills. The latter, in turn, will lead to a better and faster performance in the workplace, which will drive the levels of corporate performance upwards (Kontoghiorghes, 2016). Specifically, the connection between a company’s performance and the application of talent management has been explained as the improvement of the staff’s motivation rates and, therefore, their ability to see themselves as a part of the company (Kontoghiorghes, 2016).
By making the specified statement, the authors of the study imply that to increase the efficacy of talent management on business performance, one needs to integrate it into a system according to which a company’s functioning is coordinated. In other words, HRM strategies should not be viewed as a standalone subject but, instead, be regarded as a part of the corporate machine.
Core Human Resources and Talent Management Practices Which Impact Strategic Growth and Retention
What makes Starbucks’ current approach particularly effective is the fact that it does not lead to singling out any specific employee, instead of focusing on the joined effort. As a result, every staff member feels empowered due to the provision of regular incentives and financial rewards, as well as the support coming in the form of emotional encouragement. At the same time, the proposed model does not allow rivalry to evolve and thrive in eh target setting. Instead, staff members can focus on collaboration, which can be seen as the basis for the successful implementation of organizational goals (Uddin & Arif, 2016).
Arguably, the absence of competition in the workplace setting, which the current model of rewards accepted at Starbucks entails, leaves very little room for encouraging staff members to develop new skills. Indeed, studies show that the introduction of a bit of rivalry into the workplace setting typically encourages employees to be more proactive and innovative (Kontoghiorghes, 2016).
However, the specified characteristic of the Starbucks environment does not mean that its staff lacks proactiveness or innovativeness. Quite the contrary, the organization has found a perfect balance between promoting creativity in the workplace and the enhancement of a comfortable atmosphere in which employees work. The removal of the competitive edge from the HRM policies and the current reward system was compensated with the inclusion of the philosophy based on unity and collaboration (Uddin & Arif, 2016). Specifically, the current corporate philosophy suggests that employees should cooperate to achieve the common corporate goal.
The proposed approach toward managing employee satisfaction and increasing people’s willingness to contribute to the company’s development has been quite successful, as the current account of the company’s performance indicates. While Starbucks has seen rises and falls in its development, the overall satisfaction of its staff members has remained quite consistent over years, leading to the development of a loyal and efficient workforce (Uddin & Arif, 2016).
However, the strategy that Starbucks has chosen to motivate its staff members may not have influenced its retention rates positively. According to the recent report, the current turnover rate at Starbucks constitutes 65%, which is quite high for an organization working in the global economy (Harkness, 2018).
One might believe that the high turnover rates and low levels of retention within the company signal the poor efficacy of the chosen approaches toward motivating and satisfying staff members. However, the specified statement could not be further from the truth since, as it has been established above, staff members are quite content with the current opportunities that the organization offers to them (Harkness, 2018). Thus, the current situation at Starbucks represents a unique puzzle that could use further scrutiny.
On closer overview of the phenomenon of Starbucks, one will realize that the 65% mentioned above can only be considered high when compared to other industries, where the levels of workplace tension and the extent of stress under which employees have to operate is comparatively low. In the fast food service industry, where the responses to customers’ demands always have to be prompt, and where negative feedback may be disproportionately huge compared to the reward, especially emotional one, the 65% mentioned above are a surprisingly low number. Specifically, the current scores of other companies working in the food and beverage industry show a 140-150% turnover rate (Harkness, 2018). Therefore, Starbucks can be considered a miracle of employee retention in the context of the target industry.
As a result, the current core HRM strategies, namely, the focus on reducing workplace stress and offering not only financial but also emotional rewards, have been working excessively well for Starbucks. Placing it very high on the current map of food and beverage organizations, the specified approach has helped the organization to increase the extent of employee loyalty and efficacy significantly.
How Starbucks Should Go about Developing Its Talent
In addition to the focus on talent management and the design of a comfortable environment in which employees could work more productively, Starbucks could also use some changes to its current approach toward employees’ well-being. Namely, the company could create policies that promote mandated time-off, as well as a greater focus on staff’s health issues, in general. Specifically, the problems such as workplace burnouts and the development of mental health issues caused by the increasing levels of stress and workplace pressure will be prevented from occurring in the organizational setting.
It is quite noteworthy that a lot of companies nowadays tend to overlook the importance of providing their staff members with deserved rest. Due to the overly emphasized attention to commitment and employee engagement, a range of HR managers forgets about the need to provide staff members with personal time and the opportunity to rest (Akunda, Chen, & Gikiri, 2018). As a result, companies suffer from a drop in engagement and motivation among their employee.
Therefore, it is highly recommended that Starbucks should introduce a greater number of options for rest and replenishment of their energy and motivation for its staff members. The specified strategy is believed to lead to two main outcomes, namely, an improved performance due to better health management and fewer cases of sick leaves, and a rise in loyalty toward the company among employees (Akunda et al., 2018). To implement the suggested talent management approach as the tool for increasing retention and reducing the extent of turnover rates to an even greater degree, Starbucks could offer staff members a greater range of recreation facilities, as well as a larger range of health improvement options.
The latter change could incorporate an improved health insurance policy within the company, with Starbucks offering better health services to its employees. Although the current benefits package is believed to include decent insurance options, staff members could still use a wider range of health management opportunities, which include treatment for anxiety, depression, workplace burnout, fatigue, and similar issues caused by the increasing workplace pressure (Akunda et al., 2018). As a result, staff members are likely to develop gratitude for the company and the resulting loyalty to it, as well as deliver better performance due to improved health. In addition, Starbucks might provide its staff with recreation facilities where they could restore their energy when facing difficulties at work.
By incorporating a combination of financial an emotional encouragement into its reward system, a swell as focusing on creating a welcoming and satisfying environment in which its employees have to perform, Starbucks has developed the HR framework that has led to a rapid increase in performance quality. Moreover, the suggested approach has allowed keeping the said high-performance rates consistent, with very little deviation from the required quality rates having been observed so far. As a result, Starbucks has been maintaining its position as a leader in the coffee industry, ousting its competitors such as Nestle from the market successfully.
Overall, the current approach toward rewarding in the Starbucks corporate setting can be considered an impeccable example of how the issue of HRM, namely, rewards and incentives, should be handled.
Nonetheless, there are some improvements to be suggested, mainly the ones concerning the current approach toward health management and the threat of workplace burnouts. It is desirable that Starbucks should offer its staff members a wider range of recreation and health management options. The latter may include not only services associated with health improvement but also a better health insurance. The former, in turn, could be realized in the form of recreation rooms and similar facilities that employees could use when experiencing am excessive amount of workplace pressure. Thus, Starbucks will be able to become even more successful and expand its influence by creating a team of devoted staff members.
Akunda, D., Chen, Z., & Gikiri, S. N. (2018). Role of HRM in talent retention with evidence. Journal of Management and Strategy, 9(2), 8-19.
Harkness, J. (2018). 4 global food & beverage companies that have cracked the code on employee retention. Web.
Kontoghiorghes, C. (2016). Linking high performance organizational culture and talent management: satisfaction/motivation and organizational commitment as mediators. The International Journal of Human Resource Management, 27(16), 1833-1853.
Kumar, A. (2018). An empirical study on the impact of motivation and positive thought actions on talent management systems and business performance. World, 3(2), 069-074.
Ogbu Edeh, F., & Mlanga, S. (2019). Talent management and workers’ commitment to oil & gas firms in Nigeria. Journal of Management, 2(3), 1-15.
Uddin, R., & Arif, A. A. (2016). Talent management and organizational performance: An empirical study in retail sector in Sylhet City, Bangladesh. IOSR Journal of Business and Management, 18(10), 11-18.