Human resource management function is a very crucial function in any modern organization that seeks to achieve its objectives including the task of ensuring that employees are motivated by use of effective performance appraisal techniques such as reward schemes. Such HRM function is very crucial to Starbucks Corporation in order to motivate its employees. This is because people are the most important asset an organization has as compared to other assets that aid in running the organization.
Therefore for accomplishment of organizational effectiveness, performance appraisal is the most important critical factor that must be paid attention to by the management of any business firm wishing to remain competitive as well as remain international in scope; Starbucks Corporation is not exceptional from such an objective. Human resource has the responsibility to coordinate all the activities within the organization and they have to ensure efficiency in productivity of the organization hence firms should maintain a motivated workforce (Bjbrkman and Fey, 2001).
This paper is dealing with how Starbucks human resource department can use performance appraisal technique to improve the performance of its staff. The paper is also aimed at equipping managers particularly those from Human Resource department of the corporation to look critically on the best ways of rewarding employees in the organization. Starbucks Corporation and its Current HRM Strategy Starbucks Corporation is a coffee company in Australia which was first opened in July, 2000 in Sydney and at the Central Business District as a subsidiary of the mother company in the United States.
Starbuck roasts high quality whole coffee beans and they sell them with other beverages as prepared in the Italian espresso beverages. The coffee drinks are richly brewed to give the customers necessary satisfaction and pleasure. One of the best known drink brands is the bottled Frappuccino® which is enjoyed throughout the world. In Australia alone, the organization has been able to expand and now has 89 retail outlets in major areas of the nation such as Sydney, Melbourne, Canberra, Brisbane, Tasmania, Gold Coast, South Australia, and Brisbane.
The headquarters for the Starbucks coffee company Australia is at the Frenchs Forest, New South Wales and it serves as the support centre for all the other stores in Australia. The retail stores offer people the finest coffee sourced from coffee farmers across the world in addition to great entertainment, music, good people and excellent customer service. This organization is the only retail international coffee store that has a unique brand that has a global recognition.
Most of the customers get access to excellent room tables, comfortable sofas, chairs, bars and other accessories which fit the needs of everyone from the CEO of a company to the secretary of a company (Starbucks Corporations, 2008). This company endeavors to produce economic, social, and environmental benefits as a social responsibility stance for the communities it serves. This organization believes that it is possible to be good and do the best at the same time.
Nevertheless, there has been a considerable criticism that Starbucks management has failed to be effective and efficient in its business activities because they have practiced unacceptable managerial activities of planning, organizing, directing, and controlling. The company has not ensured that the respective managers of respective departments are well equipped with human, technical, and conceptual skills that give them an opportunity to integrate the managerial activities above in order to produce results expected from their departments.
The absence of such skills by managers has led to the company performance decreasing in some of its potential markets (John and Keith, 1997). Starbucks Corporation has been criticized for not building a strong human resource relationship with its entire workforce who has failed to enhance the success of corporation. In fact there is speculation that the company does not recruit its employees based on their qualifications and their competence.
They have not achieved effectiveness and efficiency because they have not developed their staff through training and have not adopted proper compensation systems that have in turn demoralized the employees in their work. Such employees have not been able to cope with effects of competition and thus they have produced poor results (Starbucks Corporations, 2008). Decisions regarding to employees, operations management have not been constantly revised by the management of the corporation in order to match international standards that will foster success in business environment.
For example, employees have not been properly trained to cope with new changes like introduction in technology. However, many companies who deal with sale of drinks have also diversified and fight for market share with Starbuck Corporation, a development which has given the corporation rough time in coming up with viable marketing strategies (Starbucks Corporations, 2008). Human Resource Strategy and its role in Starbucks
Human resource management in business terms is the coherent and strategic approach to the management of the working force of an organization. It combines academic, social and business practices in the application of techniques to manage a particular workforce. These practices are designed to go inline with the company’s goals, objectives, vision and mission with specific emphasis on growth and development. Starbucks Corporation needs to attract, maintain and also manage its employees effectively.
There is an assumption that employees are just business assets in an organization, but human resource development professionals explain that, these employees have varying goals and needs in life which can be utilized by the organization to meet its targets while assisting the individual persons succeed in their careers (John and Keith, 1997). The following are some of the core functions of human resource management in Starbucks Corporation; workforce planning, recruitment and staffing, promoting industrial relations, personnel development and performance monitoring as well as training, compensation and benefit management.
It is considered that the human resource practices used in strategic human resource management in Starbucks Corporation should enhance techniques, systems and polices developed in line with the performance appraisal management of the organization’s tasks. This performance appraisal of Starbucks Corporation is designed promote strategic planning and thinking in all aspects of employee assessment, problem solving and counseling (Maund, 2001).
Good knowledge of employee behaviors, performance and needs helps Starbucks Corporation to deal squarely with diversity issues e. g. ulture, religion, race etc. in fact; studies have shown that, certain human resource practices in Starbucks Corporation have contributed both positively and negatively to firm performance through workforce alignment. It is also related to employee outcomes including; trust in management co-operation, higher commitment in workplaces as well as better employee efforts and involvement among other factors (Michael, 2006). Manpower planning within Starbucks Corporation is very critical in that, cases of either overstaffing or understaffing is detrimental in one way or another.
The economies of scale for the business together with specialization orders are lost if the organization is understaffed. On the other hand, if overstaffing is sustained, it becomes a waste and also expensive for the organization. These factors are therefore part of the planning process being carried out by human resource development officers in Starbucks Corporation. For instance; they should ensure that the organization’s workforce is certainly enough to meet the general duty requirement Human resource strategy is referred to in a layman’s language as the management of the people who are working in an institution or an organization.
This is done because employee performance affects how far or how successful an organization can be. Human resource strategy of Starbucks Corporation also involves the managers clarifying to the employees the organization’s goals and objectives. Studies have shown that, there is a unique relationship between the human resource management practices and techniques for a company and its overall performance (Armstrong, 2006). Starbucks Performance Appraisal and its Business Goals The success of Starbucks Corporation is mainly determined by its human resources and hence there is a need for a motivated workforce.
In fact human resource of any firm has to be innovative, energetic, creative and motivated in order to remain focused in scope. Indeed any company including Starbucks Corporation should have guiding principles which help the employees to attain set goals and objectives. Such principles define what each and employee is expected to do thus attain their goals. Starbucks Corporation has such principles and such principles also points out how the company promotes trust, pride, professionalism, trust, teamwork and openness in their undertakings.
Such principles however, do not concentrate much more on the issue of performance appraisal such as motivation which is a key factor in organizational success. Therefore this paper will attempt to reveal the importance of a motivated workforce as well as the different methods that can be used to motivate the workforce particularly in Starbucks Corporation (Hoyer, 2001). Research indicates that skills, knowledge and experience represent capital due to the reason that they enhance productivity.
Companies invest in skills training and development to be competitive, but the failure to manage the person trained could be considered a great setback. Employee retention is basically essential in grasping a complete return on investment. Based on the human capital theory, it is imperative that companies invest in skills training and development, but they should also align the performance appraisal such as compensations and benefits of the person with his or her achievements. Research reveals that in many modern business organizations there is obviously a lack in recognizing the achievements of skilled employees.
Without recognition and growth, there is no reason for the employee to carry on his good performance, or worse, to continue his service to the organization (Bjbrkman and Fey, 2001). Motivation can be assumed as the reason or the force behind why a person does what he or she does. Sometimes, it is also a means to make the person perform better and more efficient. Basically there are three assumptions in human motivation as established in research. The first one assumes that motivation is inferred from a systematic analysis of how personal, task and environmental characteristics influence behavior and job performance.
The next one infers that motivation is not a fixed trait; but rather it refers to a dynamic internal state resulting from the influence of personal and situational factors. This means that motivation as one technique of performance appraisal may change with changes in personal, social or other factors. Finally, it should further be noted that motivation affects behavior which in turn will lead to poor performance by the employees (Buck, Filatotchev and Wright, 2003). As social beings, basic human interaction and communication are considered as relevant needs that should be attended to in the working environment.
The rational and emotional aspects of a person enable one to be participatory and reflective on certain aspects of the operations in the organization. Social interactions are necessary so as to provide for the social needs of an individual. Since people are more than a resource of an organization, their active and contemplative nature will always be open and shown. Aside from the primary needs for existence, social interaction in the form of companionship helps in shaping the character of a person as a quality individual that is capable of doing complex things and acting complicatedly
Performance Appraisal Management in Starbucks Corporation Research reveals that employee motivation is the key to the profitability and competitive success of Starbuck Corporation in the current business world i. e. particularly in the hotel industry. Research has shown that Starbuck Corporation dose not pay well its employees and thus they do not carry out their jobs well and in return the company’s performance has been negatively affected. In Starbucks Corporation; for instance, the employer-employee relations are considered not very important thus that the corporation failing to realize its mission effectively.
In fact, it has been researched and found out that well paid employees of Starbucks Corporation have translated to satisfied customers i. e. with motivated workforce they do their tasks well thus retaining and attracting more customers. Hence, with improper policies and administrative skills utilized by Starbucks Corporation, managers have indeed created failed to create a satisfied workforce through such an appraisal performance technique. Starbucks Corporation employee performance appraisal technique has taken different forms that include the following:
The first factor is of job security which is the primary driving force an employee Centres on while working; it is the ability to retain the job for as many years as possible (Hoyer, 2001). Personal organization and family budget go in line with job security concerns. When an employee is confident of his or her job security at the workplace, his performance is far much better than a case where he or she is not sure of being retained in the next year because he is motivated to work. With job security, some Starbucks employees have failed to know whether at the end of month he/she will be paid thus becoming demoralized to work.
This implies that much time is wasted because employees are not okay and thus have do not have enough time to work for the company since they work as they think of quitting the corporation at one time The other factor that is suppose to enhance success in Starbuck is that of pay satisfaction; research indicates that people don’t work unless they receive pay for work done as a motivator which is therefore the key to employee satisfaction. Although employees are paid better than other employees of other organizations, Starbucks Managers normally do not use financial rewards to improve their worker’s performance.
Good salaries equally translate to better work. Every worker would want to continue working for an organization which pays him or her well which has not been the case in Starbucks Corporation (Bjbrkman and Fey, 2001). Therefore Starbucks Corporation has not saved time since the management has to spend time of hiring new employees every time because the current employees are not secure and they have reason to look for other opportunities Another source of motivation is that of using rewards and gifts in order to inspire employees in Starbucks Corporation.
Research indicates that rewards used by the corporation have been only very big inducements but the small gifts given to anybody have been ignored by the management thus its employees eventually don’t feel appreciated. For example a handwritten thank you note which can be utilized in Starbucks Corporation is normally appreciated and cherished (Foster and Harris, 2005). Everybody loves chocolate, and provision of such kind of rewards especially at the weekends and special days like Christmas and Valentine days, should help to build positive relationships between the Starbucks Corporation management and the employees.
Research indicates that gift certificates such as birthday wishes are a morale booster to self-confidence of the employees. Starbucks Corporation has failed to offer sufficient logo merchandizes; for instance, in form of t-shirts, caps, mugs, pens, jackets and computer mouse pads thus not boosting the morale of the employees because they are not proud to be associated with Starbucks failure. In addition, Starbucks Corporation has not been utilizing motivational posters which are supposed to be strategically drafted for individual recognition for job well done.
In most cases, people would want to know if their work has made some difference and therefore provision of such rewards by Starbucks Corporation should encourage them thus motivating the employees. Another way of appraising employees that Starbucks Corporation have not utilized fully is that of praising them; for instance if they have fulfilled their undersigned tasks effectively. The firms’ management has not strategized well since they even don’t keep the records of the performance of employees.
Any employee who shows commendable improvement are not praised in the organizational weekly, monthly and also the annual meetings. Through this employees have not been motivated since they believe that they are not recognized by the organization and thus not improving their performance. However, this should not just be carried out in the formal meetings only, but managers should make time to meet with individual employees who are reported to have been performing better and praise them for the good work (Harzing and Ruysseveldt, 2004).
Recommendations The main aspects of human resource strategy in Starbucks Corporation should incorporate the following areas; employee motivation and retention strategies, employee selection strategies and employee management strategies which in general encompass performance appraisal measures. This strategy if implemented simultaneously in Starbucks Corporation will create a family-like community and environment in the organization.
From this study we can conclude that performance appraisal is a key factor to success of any organization including Starbucks Corporation. It should be noted that as a manager, your impact on employee satisfaction is great and immeasurable; therefore the management of Starbucks Corporation should look for convenient, cost-conscious and appreciated ways of performance appraisal such as excellent motivation structures in order to build a motivated, dynamic and committed workforce that will result in better productivity and profitability of the corporation.
The most critical factor that results to poor management of many organizations including Starbucks Corporation is that of the inability of senior managers to provide necessary support for the accomplishment of organizations goals through utilization of effective performance appraisal techniques. It is substantiated that the behavior of many senior managers of Starbucks Corporation has contributed immensely to poor success of the organization.
This is explicitly witnessed in the performance appraisal process. Senior managers have adopted behavior of self centeredness and they always think that they are the only one who makes viable decisions in relation to goals being attained hence resulting to low morale by existing workforce (Maund, 2001). This has resulted to lower level managers and employees not to perform quality work because they are always not motivated when carrying out their respective duties.
The overall management of Starbucks Corporation should not that no matter how well the organization’s values and culture is drafted it requires the will of senior managers to maintain such performance appraisal values and cultures within the organization. The senior managers can change the attitude of their employees if only they can lead by example which will lead to good motivation and thus successful attainment of set objectives.
Human resource is the most vital asset in Starbucks Corporation and senior managers have to concentrate their management efforts in their staff development in order to boost their morale and thus increase in productivity. Employees’ satisfaction strategies should be formulated in Starbucks Corporation in order to ensure smooth running of the corporation. It is the key to the economic success of Starbucks Corporation. Research has shown that a satisfied employee does his job well and in return the company’s performance is greatly improved (Hoyer, 2001).
The HR department of Starbucks Corporation should formulate corporate and HR strategies that incorporate performance appraisal analysis and clarification of the corporation mission statement. The department should also offer guidelines to the rest of the management when considering how business should develop and in what direction it should be directed to. In this line the HR department should clearly ensure that the strategies developed in the organization should be the ones that direct efforts towards accomplishing the Starbucks Corporation basic mission or purpose (Armstrong, 2006).
In order to enhance the activities of Starbucks Corporation, the HR department should redesign the HR department in order to remain competitive in the market place and to respond to any changes in the market place; Also strategic objectives that encompass performance appraisal measures of the organization should be formulated; this implies that the HR department should turn the mission statement in to supporting objectives for each level of management in the corporation.
The objectives formulated should be directed to key result areas in the corporation where performance is necessary for business survival. The corporation key result areas that should be considered include; marketing, finance, production, human resources, physical resources, social responsibility, and profit requirement (Thomson and Rampton, 2003). Conclusion From Starbucks Corporation case analysis we can therefore deduce that, ensuring employee performance requires establishing a level of competence which the employee should be aware of as a target to be achieved.
This is the measure that should be used by Starbucks Corporation managers in determining compliance with the standards and in identifying problems met by the employees in meeting such standards. For instance; in developing a performance appraisal technique such as efficient motivation structure to enhance the productivity of employees the manager will look at the competency problems of the employees and fashion the program to enable the employees to reach and even exceed the competency standard established for their work.
This requires a great amount of perceptiveness on the part of the manager in determining what method of appraising will be most effective in improving employee competence (Thomson and Rampton, 2003). A considerable number of companies including Starbucks Corporation have developed into an essential part of the period of global competition, increasing development, improved business paradigms, and corporate re-organization.
The continuing transformation from the traditional industrial framework with its hierarchical companies to a worldwide, knowledge-founded financial system and intelligent corporations, altering ideas regarding the social contract involving employers and employees, an progressively more adaptable pool of talent and a body of workforce, necessitates human resource (HR) strategies to realign and relocate itself in the vicinity of these drivers.