Starbucks Unique Human Resources Policies and Practices

Starbucks Unique Human Resources Policies and Practices

Given the present global economic climate, it is incumbent for retail businesses to place significant emphasis on not only hiring the right people, but also to retain them. In a business that is considered in line with the fast food industry, coffee giant, Starbucks, appears to have the ideal business model as it relates to success. Nowadays, when a company can generate a profit on an overpriced product and continue to boast profits, it has to be doing something right. Starbucks executive management is quick to attribute its phenomenal success to its human resources practices.

When Starbucks began in the early 1970s, it was established with an idea that stemmed from the bohemian coffee houses of the 1960s. While its atmosphere has changed over the years, its business model of being a friendly, relaxing place to savor in a cup of coffee remains the same. Customers have come to expect prompt, courteous service whether they are grabbing a cup of coffee on the way to work or staying in for a period of time reading and working from laptops. Throughout its modern history, though, Starbucks' top management has insisted that its successful formula lies not with the product so much as with the people. The executives consider a trip to its coffee shops to be an "experience." Employees receive several benefits, incentives and programs that are designed to ensure a high retention rate, keeping the best employees out of a pool of what could be classified as "unskilled labor." This process starts with hiring.

Hiring Practice

Starbucks does not refer to its staff as employees. The company calls them "partners." These partners are the front line people whose job is to provide the Starbucks "experience." In order to promote the experience, the right people must be hired. Starbucks begins this process by making initial contact with potential employees through job fairs, in-house advertisements, its website, and by word of mouth. The company's hiring managers are provided with interview guidelines that contain lists of core skills that potential partners need to have. The guidelines also list "behaviors that outline the ideal employee for each position." (Weber, 2005). There is also an extensive data base of current applicants, as Starbucks is very particular about the type of people it hires - "people who are adaptable, dependable, passionate team players (Weber, 2005). By using extensive screening processes, the company can be more selective of job candidates who will fit in with the company's philosophy and culture. Starbucks has a strong mission and values statement that stresses a creative and positive work environment. The company can afford to be selective because it attracts a lot of employment interest - it traditionally pays higher than minimum wage and offers health care benefits to even part-time workers, It is one of few companies in the industry that does so.

According to an article in Business Week Online in 2005, Starbucks' then global strategist, Howard Schultz, said that the company would spend more money on employee health care benefits than coffee, and that "Starbucks will most likely spend well over 200 million dollars on employee health costs in the coming years" (Weber, 2005). It is a combination of competitive wages, benefits, and an intensive training program that industry analysts see as being the cornerstone to Starbucks' success in retaining employees. Industry standards in the quick service restaurant business are typically 200 percent. At Starbucks, that percentage is 20 percent for store managers and 80 percent for partners. The foundation for employee retention is based on what Starbucks officials refer to as its guiding principles and corollary management principles.

Organizational Culture and Commitment to Service Practices

Organizational culture is basically the personality of the organization. It is comprised of the assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors. Starbucks has a very strong organizational culture and makes all efforts to maintain it as part of its commitment to service.

All of the focus is on organizational culture at Starbucks. As a customer service-driven company, Starbucks is cognizant that customer satisfaction and loyalty are what will determine the company's success. To this end, Starbucks' approach to customer service is different from that of other companies. By making great efforts to hire employees that fit in the organizational culture and by treating them well, Starbucks attracts and retains customers through their happy, satisfied employees. The qualities that Starbucks looks for when recruiting new employees are "adaptability,