Introduction
In order for any firm to succeed in the current chaotic and turbulent business environment, it needs to constantly innovate and stay ahead of its competitors in terms of business practices, products, and strategies. However, in order to gain a competitive advantage in the current market and industry, a business must have effective and efficient human resource. Therefore, human resource (HR) is one of the valuable resources that a company needs in order to succeed. Strategic HR management provides an organization with a sense of direction and feelings of purpose, which it can use to gain a competitive edge in the market. Nevertheless, it is important to integrate HR activities and practices with the with the overall organization strategy for a company to remain sustainable and competitive. Therefore, the paper focuses on Starbucks’ HR activities and HR strategies, including the recommendations that it can use to gain a competitive advantage in competitive industry and market.
Overview of Starbucks
Starbucks is one of the largest and the fasted growing companies in the world. It is an American coffee company was found in 1971 by Jerry Baldwin, Zev Siegel, and Gordon Bowker, and it is based in Seattle (Jianfei, 2014). Initially, the company was growing at a moderate rate, but it started experiencing rapid growth in the early 1980s. Consequently, by the beginning of 2000, Starbucks had already established 9,000 outlets in different parts of the world. It is targeting to open 30,000 outlets in different parts of the world by 2020. It is believed that the rapid growth of the company since 1980s is due to its motivated workforce. It is one of the firms in the world that provide generous remuneration to both its permanent and part-time workers in all its stores (Jianfei, 2014). As a result, it has managed to have highly motivated employees, and a low employee turnover, which has helped it to succeed in the market that is characterized by many players and stiff competition.
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Major Types of Starbucks’ HR Activities
Just like any other organization in the world, Starbucks’s main HR activities include selection and recruitment of employees, employee training and development, motivation and promotion of leadership, and employee performance management. Through its highly trained and experienced HR managers in its various outlets, the company has managed to come up with the effective, efficient, and highly motivated workers with high levels of productivity.
Recruitment and selection are one of the main HR activities at the Starbucks. The company has been experiencing rapid growth and expansions that forces to frequently recruit employees. For instance, between the 1990s and 2007, the company has been recruiting at least 200 employees every because it was opening about 4 outlets daily (Meyer, 2015). Therefore, in order to match its growth goals and employees’ qualification, it must come up with the effective and efficient selection and recruitment techniques and processes. Consequently, Starbucks has come up with an essential attribute that an employee must meet before they are absorbed into the company. In terms of qualification, the company is interested in employees who have some knowledge of food safety or food hygiene while at the same time the potential employee must have some retail knowledge. Hence, in order for a person to be employed in the company, it must have experience in customer service, food handling, and retail services.
Recruitment and selections of employees take place at the local outlets and they are managed by HR managers. The company conducts its recruitment and selection at the local level because outlet managers have a clear understanding of local customers demographic and demands (Morais et al ., 2014). Therefore, only potential employees whose qualification and experience match the local demands are absorbed. Potential employees are expected to submit their CVs and then undergo interviews that are headed by local managers. This method of recruiting and selecting employees is beneficial because it enables the company to interview potential employees before making a final decision on selection. It is also beneficial because it enables the recruiting panel to identify the personal attributes and characteristics of potential, which helps in the identification of the suitable applicants who fit the job.
Starbucks also offer a number of training and development programs to its employees. Workers are trained to have in-depth knowledge of the values of a company, which they should use while offering customer services to various clients (Morais et al ., 2014). Besides, they are trained to understand the history of the company and how to prepare quality coffee that leads to customer satisfaction. In addition, they are trained on the effective communication skills that they can use to interact with customers, which can lead to customer loyalty and satisfaction. One of the main benefits of training and development programs undertaken by Starbucks is that it gives it an opportunity to adapt to changes in customers’ demand and preferences. At the same time, training and development enable the company to offer quality customers services. Besides, training and development boost self-confidence and self-esteem of employees, leading to an improvement in their performance.
Another HR activity that is done by Starbucks’ HR department is remuneration and motivation of the employee. Starbucks is one of the companies that offer the highest salaries and wages to its employees in order to motivate it. Unlike many companies, it offers the same benefits to both permanent and part-time employees, which makes employees be dedicated to the work (Jianfei, 2014). For instance, some of the benefits that are enjoyed by employees in the company include healthcare, dental, and vision insurance. Starbucks also offers other non-financial benefits such as income protection and saving plans to both permanent and part-time employees. Therefore, it offers both financial and non-financial benefits to employees, leading to high motivation of employees.
At the same time, Starbucks also provides other HR practices that are aimed at motivating employees. For instance, it is using techniques such as empowerment, engagement, and delegation of powers in order to meet the social and psychological needs of its employees. Employees in the company feel valued and their effort recognized when they are involved in various key activities taking place in the company (Jianfei, 2014). A delegation of roles to junior employees by the management also helps in boosting confidence and self-esteem of workers. Furthermore, the company is using flat hierarchy, which ensures faster and efficient sharing of information among employees in all departments and ranks within the organization.
Therefore, by motivating employees, the company has been able to enhance workers’ loyalty and dedication to the company. At the same time, it has reduced the turnover, which is always cost. However, such motivation practices come at a cost, as the company has to spend a lot of money in training and development programs, including catering for insurance covers (Morais et al ., 2014). Hence, motivation programs increase the cost of operating the company. But the benefits of such motivational programs outweigh their cost because they give the company a competitive advantage, which leads to both short-term and long-term benefits.
Hence, the main HR activities that are undertaken by Starbucks include recruitment and selection, employee training and development, remuneration, and motivation of workers. The activities come with benefits and costs. The main benefits of the activities are enhanced employee performance and the improvement in the quality of customer services. At the same time, the activities improve employee loyalty and lower turnover. Nevertheless, they are costly, as they increase the cost of operations, which lead to a reduction in revenue and profits (Jianfei, 2014).
How HR Activities Match Strategic Goals of the Company
One of the strategic goals of Starbucks is to be at the top position in the Fortune’s 100 best companies to work for (Zhang, 2009). In 2013, the company managed to reach number 9, which was the first time it featured in the list. However, it can only achieve this goal successful and strategic human resource management. Starbucks has decentralized its recruitment and selection processes in order to come up with the best employees who can enable it to achieve its goals and objectives. Zhang further notes that by employing local people, it is able to get applicants who match the required qualification to land a job in the company, which, in turn, will lead to increased employee loyalty and reduction in the cost of turnover. It is using strategic human resource planning to ensure that it comes up with the best workforce. Therefore, in order to feature in Fortune’s 100 best companies to work for, the company must first recruit the right employees who have the ability to effectively and efficiently accomplish the assigned task (2009).
Offering adequate remuneration packages and other non-financial benefit is also some of the strategies that can be used by the company to be at the top position in the Fortune 100 list. This is reflected on the some of the HR activities that are done by the company. In order to enhance both job and employee satisfaction, the company is offering a variety of benefits to its workers (Zhenjia, 2012). Employees working in the company are able to benefit from health insurance covers and saving plans. At the same time, they are recognized in the company, as they take part in key decision-making, and even have the opportunity to do challenging jobs. Starbucks can only be able to be at the top of Fortune top 100 companies if its employees are satisfied and highly motivated. As a result, remuneration and motivation activities that are implemented by Starbucks match its goal of featuring in the Fortune’s 100 best companies to work with.
The company does not only want to feature on the Fortune’s 100 lists of best employers, but this comes with other advantages that can give it a competitive advantage in the market, particularly labor market. By being one of the best employers, the company will be able to attract best experts and professional in the labor market. Companies always compete for employees with special skills because they are always on demand. These employees also want to work in organizations that offer the best benefits and give them to advance in terms of career development. Featuring in the Fortune’s 100 best employers, therefore, is a strategic goal that the company is using to attract best employees in the labor market (Meyer, 2015).
Another strategic goal of the company is to offer high-quality customer service to all its employees in order to enhance their satisfaction and loyalty (Jianfei, 2014). To achieve this goal, the company must have employees who understand its operations, internalize its cultures and values, and be able to prepare the bet coffee in the market. The goal matches with the HR activities, especially that of employee training and development programs. One of the objectives of the training and development in the company is to train employees on how to prepare the best coffee. At the same time, employees in the company are trained on the effective communication skills and interpersonal relationship.
The goal of providing quality customer service is also in line with recruitment and selection activities in the company. Some of the essential qualifications that a person should have before they are employed in the company include being customer-centric and having an exceptional customer. The requirements are aimed at ensuring that employees have the ability to offer quality services. As a result, only employees who have knowledge of customer service have the chance to be employed in the company (Meyer, 2015).
Consequently, Starbucks has been able to have baristas who are highly experienced and have the ability of offer quality customer services, as they have enough coffee knowledge. They also have excellent communication and interpersonal communication skills that they can use to offer quality customer services (Zhenjia, 2012). Hence, the HR activities have enabled Starbucks to offer quality customer services by offering the best products and services to clients. As a result, the company has been able to attract the majority of customers in the market, making it one of the fastest growing players in the industry. Many customers prefer Starbuck coffee in comparison to those of its main rivals such as Nestle. Therefore, the training and development programs in the company match its strategic goal of offering quality customer services to all its clients.
The quality customer service is closely related to Starbucks’ strategy of producing quality products that can lead to customer satisfaction. One of the ways in which the company can gain a competitive advantage in the market is to produce high-quality coffee that is clearly differentiated with the substitutes available in the market. To effectively accomplish this strategy, the company has to train its employees on how to prepare the best coffee that can effectively compete in the market (Zhang, 2009). At the same time, it must have highly motivated employees who are ready to put their energies and expertise in coming up with the high-quality coffee. Hence, HR activities such as training and development and motivation of employees are in line with the company’s strategic goal of producing high-quality products. Due to stiff competition in the beverages and fast food industry, established companies such as Starbucks must produce products that meet specific needs of customers to have a sustainable success. As a result, the goal of having high-quality coffee is strategic and matches the Starbucks’ HR activities (Morais et. al , 2014).
Therefore, the company’s HR activities match with its strategic goals that are aimed at making the most successful and competitive in the industry. In order to continue being the most competitive company, Starbucks must offer high-quality customer services, produce best-selling coffee, and be one of the best employers featuring in the Fortune’s 100 best companies to work for. However, the company can only achieve the strategic goals by having highly motivated employees with the required skills and knowledge (Morais et. al , 2014).
Recommendations
One of the recommendations that can help Starbucks to better match its HR activities and strategic goal, it should have separate training and development for employees playing different roles in the company, especially those involved in the production and having customer service. There should be some level of specialization in training and development programs in order to enhance the effectiveness of such programs. The company should organize separate training and development programs for employees who are involved in the preparation of coffee. At the same time, they should organize a specific training program for customer service workers. The separation in the training and development program is important because employees play different roles, requiring different knowledge and skills. The main benefit of separating training based on the roles of the employee is that it enhances specialization and effectiveness in training. However, this will ensure that the company incurs additional training cost. Besides, organizing different training programs for different employees may be time-consuming, leading to a waste of time.
The second recommendation is for the company to use online platforms in its employee recruitment and selection process. Currently, the company requires employees to submit their CV and undergo through an interview before they are employed in the company. However, the company should start sourcing for potential employees through online platforms such as social media in order to know the suitable candidate for a given vacant position in the company. Starbucks can easily understand characters of employees by going through their social media profiles. Using the online platform to recruit employees is beneficial because it saves the company from going through many CVs in order to understand the characters and qualifications of many aspirants. At the same time, it is the cost-effective way of findings potential candidates. However, this method of recruitment is disadvantageous, as it can lead to employing unsuitable candidates, especially when they fake their identities on social media.
Thirdly, Starbucks should desist from relying on local employees mainly because of increased globalization. The world has become a global village with people from diverse cultures from across the globe. Consequently, a place cannot have only one culture, but diverse culture due to the mixture of people. Therefore, in order to ensure the company offer quality customer service to people of diverse culture, it should ensure diversity in its workforce. One of the benefits of having a diverse workforce is that it will enable the company to attend to the needs of customers from various cultures. However, this will require repatriation of workers from other cultures, which is costly (Meyer, 2015).
Conclusion
Starbucks has been able to experience rapid growth because of its ability to have highly motivated employees. At the same time, the company is dedicated to ensuring career advancement of its employees through its many training and development programs that are aimed at improving the knowledge and skills of its workers. Besides, Starbucks offers competitive financial and non-financial benefits to its employees. At as result, the company has been able to work on some of its strategic goals like quality customer services, being the best employer, and producing the best coffee in the market. As a result, its HR activities match its strategic goals, leading to a competitive advantage.
References
Jianfei, X. (2014). Analysis of Starbucks Employees Operating Philosophy. International Journal of Business and Social Science , 5 (6).
Meyer, P. (2015). Starbucks Coffee Company’s Organizational Structure. Panmore Institute, 4(1).
Morais, U. P., Pena, J., Shacket, K., Sintilus, L., Ruiz, R., Rivera, Y., & Mujtaba, B. G. (2014). Managing Diverse Employees at Starbucks: Focusing on Ethics and Inclusion. International Journal of Learning and Development , 4 (3), 35-50.
Zhang, Z. J. (2009). International Expansion of Starbucks under the Background of Global Tourism DevelopmentInternational Expansion of Starbucks under the Background of Global Tourism Development. Canadian Social Science , 2 (1), 17-21.
Zhenjia, Z. H. A. N. G. (2012). Study on Competitive Advantages of Starbucks Surfers' Paradise Coffee Shop. Management Science and Engineering , 6 (3), 16.
