Starbucks is a company that is famous and growing at a fast pace. It was set up in 1971 in the USA and, having initially grown at a low rate, expanded quickly during the later 1990s. As a result, the company became significantly large and had almost 30,000 outlets operating worldwide by the early 2000s. It has been held widely that the main reason for its success was its motivated and dedicated workforce. This paper delves deeply into the HR policies that the company has followed over the years and discusses the motivational strategies that have enabled it to have cutting-edge advantages over other its competitors.
Starbucks has always ensured that its employees remain in a high state of motivation, and such policies have enabled it to have a meager rate of employee turnover. The company realized very early that a dedicated and motivated workforce was the critical resource to ensure success in the retail business. Hence Starbucks took the initiative to recruit the most suitable people and try to retain them. As a result, the company’s HR policies were a true reflection of its commitment to its workers. It was primarily the baristas and other front-line workers upon whom Starbucks relied in creating the competitive edge that it made in bringing the Starbucks experience to its customers. The company has always given a lot of importance to the quality of people that it employs. Its motto has been “to have the right people hiring the right people” (Starbucks, 2009)
Starbucks has employee practices that are unquestionably very innovative and stimulating. Starbucks is a name that is synonymous with coffee amongst people of all age groups throughout the world. The company has over 40 million customers that patronize its outlets every week. The turnover rate of workers in Starbucks is meager and is 250% lower compared to the industry patterns. During the 2000s, as many as five new outlets were opening daily somewhere in the world. This implies that Starbucks has been doing things that people very well accept. Primary amongst them is the company’s motivation techniques to keep its workers in a powerful mental and emotional state, making them perform their duties with passion and a high sense of belongingness. Starbucks believes that motivated staffs yield better results than investing heavily in plants and equipment (Reeve, 2001, pp.5-7).
It is amply proved by theorists that money does not always represent the sole means to motivate employees. According to Kohn (1993), financial and physical rewards are not the only motivation for employees to perform better, especially in services where creativity is required. Other factors such as working environment and interpersonal relationships play a significant role in improving employee morale. According to Nicholson (1998), employees have specific “social needs which they tried to satisfy through membership of informal social groups at the workplace and the importance of informal social factors in the workplace such as co-worker relationships and group norms that influence employee motivation and performance is highlighted” (Nicholson, 1998, pp.205).
In this context, Howard Schultz, CEO of Starbucks Corporation, strongly feels the primary reason for the company’s success is not the coffee that it serves but the passion of its employees, which has enabled the company to enjoy an enviable status throughout the world. Over the years, Starbucks has constantly been using a model of providing opportunities to its employees to grow within the company as working partners. It is amply proved that employees are the main force that steers the company towards smooth operations and sustainability. Schultz has admitted that the company’s spirit is its employees, and the company has evolved training and education policies to equip them with unmatched competencies. Such capabilities hold them in high stead in performing to their maximum potential (Mitchelli, 2006). Furthermore, Starbucks enables its employees to mold themselves into interactive structures that make them fully involved in their duties. This further allows workers to motivate each other to satisfy themselves to achieve higher performance levels (Elton, 1983, pp.36-40).
All employees in Starbucks, including managers and supervisors, are treated as working partners. Managers and supervisors work closely with junior employees on the front lines and maintain an efficient management system to create synergy and a cordial working environment. This allows workers and customers to have a satisfying and enthusiastic experience. In being treated as partners, Starbucks employees consider customer service to permit them to connect with clients on a personal level. Starbucks CEO Schultz has rightly said that “We are not in the coffee business serving people; we are in the people business serving coffee” (Michelli, 2006, pp. 29). At Starbucks, everything is of great significance, and close attention is paid to minute details, which gives the company a competitive edge over its competitors. According to Michelli (2006), “Managers have to constantly put themselves in the shoes of their customers, seeing everything from the other side of the counter” (Michelli, 2006, pp. 31). Creating delight and surprise are essential objectives of all partners and employees. Therefore, they are motivated to strive towards delivering services to keep customers happy and delighted consistently. Partners also look at different modes to amaze and keep customers engaged in ways that make them discover new experiences at Starbucks.
In believing that the company should always leave a positive mark on all who visit its outlets, Starbucks strives to be socially conscious. The company pushes its workers to be actively involved in community affairs regarding philanthropy and giving grants. Because of its global presence, Starbucks leadership values the social structure of all regions and nations. It takes business decisions in keeping with social values to give customers and employees a sense of belongingness with the company. The company has a well-established and efficient communication channel for its workers. Employees’ work schedules are planned and scheduled in keeping with their convenience, and they are interviewed every week to get to know their hardships, if any. In addition, employees are encouraged to participate in a survey called “Partner View Survey,” which is conducted every two years, whereby feedback and suggestions are received by managers in areas that need improvement (Henricks, 2007).
In being partners, employees are given the right to suggest the best working practices. This way, business practices are improved, and innovative ideas are implemented. For example, Starbucks has initiated efficient welfare measures for its employees regarding discounts on products, health care facilities, and holidays. In addition, employees that work extra hours get incentives, and there is also an option for them to go for stock dividends. This policy measure further adds value for employees and results in better sales and profits. Starbucks essentially believes that its employees form its core strength, and in showing such respect to them, excellent customer service results are achieved (Pugh et al., 1989, pp.155).
Employees are trained to work in teams, creating a mini social structure in the company that comprises members with different skills and knowledge. The company has also established a system whereby managers and employees are treated as almost equal partners, thus reducing the scope of the bureaucracy. There are minimum hierarchy levels, and in an environment where suggestions are welcome by all, company policies can be revised to achieve efficiency and higher productivity. This enables every employee to become an essential part of the organization and the respect and sense of participation that they get.
Starbucks has taken pioneering steps in creating a third place for its customers by providing a venue to rest and relax while providing an environment in which social harmony can be enhanced. In providing for society through donations and grants, Starbucks has instilled amongst its workers a feeling that they, too, contribute to the cause of humanity. This way, challenging goals are set for them, permitting them to decide their direction. Such policies have empowered employees in Starbucks and created a positive effect in enhancing profits.
Elton, M (1983). The human problems of an industrial civilization, New York: MacMillan, pp. 36-40.
Henricks Mark, (2007). The Starbucks Business Model, Entrepreneur.
Michelli Joseph, (2006). The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary, McGraw-Hill, pp. 29-48.
Nicholson, N, (1998). Encyclopedic Dictionary of Organizational Behaviour, Blackwell, pp 205.
Pugh, D S and Hickson, D J, (1989). Writers on Organisations – An invaluable introduction to the ideas and arguments of leading writers on MGMT, Penguin Business, pp 155.
Reeve, J. (2001). Understanding Motivation and Emotion, 3e, John Wiley & Sons, pp. 5-7.