Human resource management- Starbucks case study
Human resource management- Starbucks case study
•Creates environment where each employee is encouraged to make the best possible contribution to the effective working of the organization. Starbucks staff are trained and motivated to create the ‘Starbucks experience’ for their customers by providing exceptional customer service •Promotes efficiency and increased productivity among workers through training, guidance and counseling. Starbucks offers a variety of rich training and development of their staff •Development of mutual respect, dignity and trust between management and workers through employee relation. •Enhance employee morale.
•concerned with utilizing human resources optimally
•identify and recognize the role of HRM for overall organizational effectiveness •HRM should not be treated just as an end whereas; it is only a means to assist the company with its primary objectives. In short, HRM dept exists to serve the rest of the organization. The role of HRM should be more strategic in nature COMMUNITY
•Needs of the community should be addressed in an ethical and socially responsible manner and care should be taken to minimize the negative impacts of any such demands upon the organization. Starbucks also has proclaimed their commitment to communities & environment through their mission statement, “Contribute positively to our communities and environment”. They achieve this by organizing community programs and events at least twice a year; these events facilitate donations of funds, contributions for noble causes, and also provide job opportunities. •As for their commitment to environment, they play an active role in instilling environmental
responsibility among their employees. They also strive to use, buy and sell environmentally friendly products. Significance:
Why has the disciple of HRM gained importance in recent times? This is because Organizations has realized the importance of contribution that people can make to an organization. It has in recent years been identified and recognized that human resource is the most valuable and powerful assets any organization can possess as its people are the most fundamental element in determining the scale of success of any organization to a great extent and also firms can gain competitive advantage. HRM helps to channel the needs and competencies to harness a lot of talent and capabilities and to make the best out of them. HRM should be aligned and integrated with the Business strategy to be successful.
Impact of Human Resources on Organizational Performance
Source: (Steven H. Bates, 2003)
Starbucks has realized in their initial stage itself that People can contribute tremendously to the organization if HRM is administered wisely and strategically and also if they are well motivated and paid. The reasons why people management should be considered a vital element: •Service is delivered by people, HRM strategies ensures customer service is excellent, which in turn would lead to customer satisfaction
•Less competent HRM leads to unsatisfactory customer service which will lead to poor performance and organizational efficiency •knowledge comes from the firm’s people and they should therefore be skilled and trained •well motivated staff is always more productive, enhancing the sales at Starbucks •Provides competitive advantage to firms. Services at Starbucks are known to stand out compared to other firms in the same field due to staff commitment to the brand. HRM can make a significant contribution to the competitive advantage of a firm if the firm is capable of tapping thier people’s exceptional skills and core Competencies. It is hence understood
that by developing and maintaining competitive advantage, a company can be successful and remain profitable.
These are the groups affected by business practices
•customers- expect exceptional service or/and better product •Employees- expect attractive job and sound compensation •shareholders- expect a return on money invested
•Community- expects activities and projects that minimizes harmful effects to environment STARBUCKS – Company Profile
Starbucks is the world’s largest coffeehouse company; Starbuck’s first store was opened in Seattle on March 30th 1971 by three partners. The firm believes in supplying and serving the best possible coffee. The name, ‘Starbucks’ was taken from the novel ‘Moby Dick’ (Starbucks, 2012).
•International Corporate Achievement Gold Medalist , 2005 •Great places to work’ Institute named Starbucks Top 10 Best Workplaces in the UK, 2007 •Awarded Most Ethical Company in Europe’ , 2009
• Named twice as Mobile Marketer of the Year, 2010 & 2012 Leadership Style at Starbucks Adopted By Howard Schultz: “We are not in the coffee business, serving people; we are in the people business serving coffee.” –Howard Schultz, (former) CEO of Starbucks. * Transformational Leadership: This style is often considered to be one of the effective styles to adopt in business situations. This approach inspires, encourages and motivates people to perform their best and by leading as example. These leaders take initiatives to add value to the organization. * Schultz is also known to adopt ‘engaging employees’ approach. An engaged employee is completely involved, committed and enthusiastic about their work.
Roles and Responsibilities
1. Strategic Partner:
To align HRM strategies with business strategies. (Noe R. et al,2003) 2. Administrative Expert:
To design and deliver efficient HRM practices and processes. 3. Employee Advocate:
Involves commitment & contributions of the employees to be managed. Irrespective how skilled the workers may be, if they are detached or angry, they will not contribute their efforts to the firm’s success, nor will they stay long with the firm. 4. Change Agent:
This requires HRM to help transform firms to meet the new competitive conditions. In today’s rapidly changing competitive world, constant change and capacity for change should be developed. (Noe R. et al, 2003) Shift of focus in HRM function:
1. Self-Service : Online access to information and transactions relating to HR for employees. 2. Outsourcing: The practice of outsourcing HR activities to specialist service providers. Reasons of the above two are:
•to save money and efforts
•to increase HR operations efficiency
•spend more time on strategic functions and important business issues However, Outsourcing should be carefully considered as lack of understanding may arise regarding the capabilities of the outsourcing provider, Sometimes even failure in achieving goals and substandard delivery of services may occur. (T. Starner , 2005 .) Factors Affecting Starbucks HR practices
HR practices are strongly affected by the Internal & External environment of Starbucks.
Various Models of HRM:
There are various f HR models developed by scholars which fall either under the soft or hard perspective to HR. Below are two models that represent one
hard and soft approach each
1. MICHIGAN/ MATCHING MODEL
This model is the ‘hard’ approach to HRM where Human resources are matched with the jobs in the organization. This model suggests the HR should be treated just like any other resources by utilizing it to the maximum along with other resources to attain organizational goals.
2. HARVARD MODEL
Harvard model emphasizes on the human element of HRM and employees are given importance just like any other resources and treated as assets rather than costs. This model is based on human relations and their outcomes are committed & motivated employee providing competitive advantage.