Starbucks' Human Resource Management Policies Essay

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SAMPLE EXCERPT . . .
The high commitment approach to human resource management seeks to "elicit a commitment so that behaviour is primarily self-regulated rather than controlled by sanctions and pressures external to the individual and relations within the organization are based on high levels of trust" (Gratton, Hailey, Stiles & Truss 1999, p. 41).

Although pay and benefits remain among the most important motivational factors in the workplace, the high commitment HRM model recognizes that there are other factors involved that play a role in individual motivation as well that must be taken into account. In this regard, Chonko and Roberts (1996) report that, "Of all the many properties that characterize work in formal organizations, pay is one of the most important. Pay has been found to influence significant organizational behavior variables, including turnover" (p. 154). This is an important issue for Starbucks because the company has historically experienced an 80% turnover in its stores (Stopper 2004).

Even the most well-paid employees, though, may lack a sense of identification with their employers, the high commitment HRM model seeks to firmly internalize a sense of commitment. For instance, Fink (1999) reports that, "While intrinsic rewards generate identification with work and social rewards help broaden that identification to the team level, internalized values are the principal source of identification with the organization" (p. 19). Based on his analysis of various high commitment organizations, Fink concludes that:

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1. To the extent that commitment to the work is desired, it is necessary (but not sufficient) to provide general and individual rewards, but intrinsic rewards are both necessary and sufficient.

2. To the extent that commitment to co-workers is desired, it is necessary (but not sufficient) to provide social rewards and general rewards; it may be important to de-emphasize individual rewards; it may be necessary to emphasize task interdependence as part of intrinsic satisfaction; whether it is necessary to generate internalization of organizational values depends upon the degree of sub-unit interdependence that exists.

Essay on Starbucks' Human Resource Management Policies Assignment

3. To the extent that commitment to the organization is desired, it is necessary (but not sufficient) to provide general, individual, social, and intrinsic rewards, but it is most necessary, and usually sufficient, to foster internalization of organizational values. Rule compliance can be a contributing factor, but it also can result in behavior that is mistaken for true commitment (1999, p. 20).

In sum, then, the high commitment human resource management model focuses on promoting a sense of commitment and loyalty among all employees through various programs and initiatives that are all based on an enhanced sense of mutual trust. An application of these aspects of the high commitment HRM model to Starbucks human resource management is provided below.

Evaluation of How Closely Starbucks Matches the High Commitment Model

Some major corporations such as Walmart attempt to communicate a sense of teamwork by calling their employees "Associates" (note the capital "A"); likewise, Starbucks calls its employees "partners" (lowercased "p") (Starbucks Corporate Profile 2012). According to Sparrow, Brewster and Harris (2004), "In Starbucks, the HR function is called Partner Resources rather than Human Resources that plays a central role. It attempts to develop values based on being 'a great work environment,' 'embracing diversity' and 'pleasing customers'" (p. 115). Consistent with the tenets of the high commitment HRM model, the company places a high priority on career development and has clearly outlined the steps that are involved in career progression so that all of its partners have the opportunity to pursue career goals of their choosing (Working at Starbucks 2012). This focus on career development and training is highly congruent with Gratton et al.'s observation that, "Investment in self-development and career opportunities is seen as a cornerstone of the high-commitment contract, since it implies people are worthy of training and development" (1999, p. 207).

This sense of being "worthy of training and development" is made abundantly clear to up-and-coming executives at Starbucks where the company has a so-called "developing local talent" initiative in place wherein "young managers are in-patriated to Seattle. Developing talent is important to it because a typical store manager is aged 21 to 23 and runs a $1 million business. It develops a strong sense of its values through a 2-month immersion process where managers work in-store learning every part of the business" (Sparrow et al. 2004, p. 115). According to the company's promotional literature, Starbucks also engenders a sense of commitment to the organization by ensuring that all of its employees, even part-timers, receive healthcare insurance and are allowed to participate in a profit-sharing plan. In this regard, Starbucks emphasizes that, "We believe in treating our partners with respect and dignity. We are proud to offer two landmark programs for our partners: comprehensive health coverage for eligible full- and part-time partners and equity in the company through Bean Stock" (Starbucks Corporate Profile 2012, p. 3).

In fact, Starbucks was the first major company in the United States to provide its part-time employees which account for almost two-thirds (65%) of its workforce) with full health care benefits and stock options (Fine & Cronshaw 1999). The provision of such incentive plans is highly congruent with the high commitment human resource model. For instance, Pfeffer (1997) notes that, "When profit-sharing is taken seriously, it is likely to be in conjunction with high-commitment management" (p. 107). In addition, the company has been in the vanguard of Fortune 500 companies that provide health care benefits for same-sex mates of its partners. For example, Weinstein (2007) reports that, "For the first time ever, a majority of Fortune 500 companies offered domestic-partner benefits to their employees, and 86% explicitly included sexual orientation in their nondiscrimination policy, a record high. Now a group of those companies, led by Starbucks, are helping workplace equality evolve by developing a set of corporate guidelines concerning LGBT employees' treatment" (p. 68).

In fact, the company views its role as being an industry leader in the development of best human resource practices for LGBT partners. In this regard, Andy Fouche, Starbucks's corporate responsibility representative, emphasizes that, "We have executive support at all levels to push policy" (quoted in Weinstein 2007, p. 69). Likewise, Starbucks' senior vice president for finance, Matt Sikes, is gay and has been assigned responsibilities for the executive sponsorship of the company's LGBT group in which "he facilitates communication between employees and senior management on a range of issues, including corporate policy, event sponsorship, and even transgender employee rights" (Weinstein 2007, p. 70).

In order to keep the other lines of communications open throughout the organization, Starbucks also conducts regular so-called "Open Forum events" that are designed to answer employee questions rather than allow the rumor mill to run rampant (Starbucks Corporate Profile 2012). In addition, Stopper (2004) reports that "Starbucks executives meet regularly with partner groups, communicate via voice mail and videos, and make store visits. Mission reviews are held and partners may challenge actions they believe to be counter to Starbucks' values. Over 300 cards a month are received from partners voicing a variety of concerns. All receive an answer within 14 days. An anonymous compliance hotline is also in operation" (p. 22).

To help ensure that each Starbucks "partner" feels like an important part of the organization and to build mutual trust, the company's human resource package is referred to as "Your Special Blend" because "it's just for you" (Starbucks Corporate Profile 2012, p. 4). A typical "Special Blend" pay and benefit package at Starbucks may include and/or all of the following:

Competitive pay

Insurance: medical, prescription drug, dental, vision, life, disability

Bonuses

Paid time off

Retirement savings plan

Equity in the form of Starbucks stock and discounted stock purchase plan

Adoption assistance

Domestic partner benefits

Emergency financial aid

Referral and support resources for child and eldercare

A free pound of coffee each week (Working at Starbucks 2012).

This approach is congruent with the high commitment HRM model because it individualizes pay and benefits packages in ways that are intended to foster loyalty and commitment to the organization based on mutual trust. In this regard, Fink (1999) emphasizes that, "To the extent that a high commitment system is important to management, organizational leadership must pay attention to the full range of rewards, but especially to whatever it takes to link employees' goals and values to those of the organization as a whole" (p. 19).

Beyond the pay and benefits packages for both part- and full-time "partners" at Starbucks, the company also sponsors more than 50 partner clubs and networks that are designed to help employees share interests and improve their work/life balance (Working at Starbucks 2012). The partner clubs and networks sponsored by Starbucks include the following:

Recreational athletic leagues

Foreign language clubs

Parenting resources

Thrive Wellness Program

Elite Athlete Assistance Program

Internal recognition programs

Career sabbaticals

Discounted merchandise at Starbucks and other retailers (Working at Starbucks 2012, p. 4).

The provision of partner clubs and networks is also congruent with the high commitment HRM model. In this regard, Phillips (2005) reports that, "With a support system, employees perceive a… [END OF PREVIEW] . . . READ MORE

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