STARBUCKS HUMAN RESOURCE MANAGEMENT POLICIES

Starbucks Human Resource Management Policies and the Growth Challenge



Starbucks Human Resource Management Policies and the Growth Challenge

Introduction

Our paper examines Starbucks' human resource management practices related to recruiting, hiring and compensation, benefits. Our study focuses on the recruiting practices for Starbucks's core competency teams in the United States: the coffee divisions - those workingdirectly to create and re-create profitable brewed beverages. These are the product people inheadquarters, and the baristas and store managers in the customer frontline. We have excluded,however, employees at roasting plants, and any suppliers. In order to understand the relationshipbetween human resource practices and company goals we have first looked at the shifts in CEOleadership as well as a SWOT analysis of Starbucks as a whole. We then take a closer look atcompensation and benefits, recruitment and hiring, and lastly a SWOT analysis of human resourcespractices.

History

Orin Smith succeeded Schultz as CEO in June 2000. In the ten years prior to his position asStarbucks CEO, Mr. Smith held a number of executive positions at Starbucks. As discussed inChapter 5 of Human Resource Management, there are several advantages to relying on internalsources. Not only does the firm know the applicant, but the applicant knows the firm. Before hewas CEO, Mr. Smith held positions as executive vice president, chief financial officer, and chief operating officer. Under Smith's leadership as CEO, growth and earnings remained strong. When Mr. Smith retired in 2005, Jim Donald was hired as the CEO. Mr. Donald became oneof the first Starbucks executives to be hired from the outside. This marked a transition for Starbucksfrom internally developed executives to external involvement (Gray). In many cases, recruiting fromthe outside can be a way to strengthen the company and introduce new ideas. However, while Mr. Donald was CEO, share prices dropped 48% during a six-month period. Investors were impatientand dissatisfied. In 2008, Howard Schultz returned as CEO. Mr. Schultz's focus was slow expansion, close unprofitable stores, and fast track international plans (Adamy). In 2010, Mr. Schultz urged fellowbosses to hire more people. Starbucks has plans to open hundreds of new stores in the UnitedStates and elsewhere. Mr. Shultz challenges companies to create jobs. In 2011, Starbucks plannedto create more than 3,500 new jobs in the United States (Howard's Way).

Conflict

Worker complaints from Starbucks' baristas in the past couple of years have resulted in negative publicity for Starbucks. Recently, an outburst from an employee that worked at aCalifornia Starbucks went viral on Youtube. The employee in the video complained about impolitecustomers and dissatisfaction at work. The video has over 900,000 views. Other complaints thathave caused negative publicity for Starbucks are comments from part-time employees that theyhave no guaranteed number of work hours per week, and complaints that the wage is barely abovethe minimum wage (Starbucks Baristas 8).

Strengths

Starbucks has a wide geographic presence that is continually strengthened by expansion.Starbucks has operations in more than fifty countries. Company-operated retail stores in the US andinternational markets accounted for 84% of total net revenues in the 2010 ...