Table of Contents

Introduction.........................................................................................................................2

Starbucks HR policies and practices...................................................................................2

2.1

Recruitment.................................................................................................................2

2.2

Employee Relations.....................................................................................................4

2.3

Compensation..............................................................................................................5

Recommendations...............................................................................................................7

References...........................................................................................................................8

Introduction

Starbucks Corporation is the largest coffee house in the world and it is a very profitable
organization. It is a global coffee brand which provides different, creative products and fine
services. It has around 16,600 stores in around 50 countries. Starbucks emphasize positioning
its stores in high traffic areas, including mini-stores located in hotels, upscale grocery stores,
shopping mall food courts, and other ventures which are not free-standing. The organization
depends on a main competitive advantage, retail of coffee. Some of Starbucks products are
beverages (coffee, tea, Tazo, soda, juices), pastries, whole coffee beans and merchandise
(mugs, CDs). The company has also adopted a highly aggressive globalization strategy to
capitalize upon European tastes and interest in American coffee products. Equally significant,
according the company's emphasis on Starbucks' in-store experience of customer service.
Company executives believe that this orientation has been the key to the firm's success in
world wide. They use internet to provide customers with online opportunities to purchase
coffee and other food products as well as a growing range of kitchen and beverage
accessories.
2
2.1

Starbucks HR policies and practices

Recruitment

Employees at Starbucks represent an important asset of the company and they are crucial for
the companys growth. Due to the fact that the recruitment process represents a vital step for
the organization it is of greater importance to hire the right candidates, provide them with
training sessions and ensure them a fast development within the company. Starbucks uses its
Human Resources policies and practices as a strategy to gain competitive advantage within
the international market and the retail industry. Through the adequate implementation of
human resources management, that comprises all the activities that a company takes to
attract, develop and retain committed employees, Starbucks remain one of the most awarded
company for its Human Resources practices (web-books.com, 2011). Retaining valuable
employees implies encouraging them to succeed, evaluating them on a regularly basis,
providing them with benefits and being able to undertake the necessary actions to keep them
within the organization.
The companys recruitment motto is To have the right people hiring the right people by
focusing on peoples energy and believing that candidates with the appropriate skills might

easily become an asset for the company. Starbucks offers different types of training program,
such as First Impressions for all the employees due to the fact that the organization relies a
lot on the frontline staff by being the first ones to interact with potential loyal customers. This
program consists in providing the employees with the right knowledge concerning the
companys values and how to foster it amongst customers. Besides this, they were also taught
the service principles. For instance, all the employees had to be aware of companys history,
to know all the rules regarding the coffee preparation and how to use a cash register. In
addition, they should have the appropriate communication skills in interacting with customers
in order to create the proper environment that Starbucks was trying to promote.
Starbucks has very high standards for interns. They look mostly for college juniors, some
seniors, and then an even smaller number of sophomores at the undergraduate level. Desired
personal qualifications are A-type, go-getting personalities, and really well-rounded
individuals: those who have a minimum 3.5 GPA to do volunteer work, and are involved in
the community. Starbucks looks for students who hold leadership positions in student clubs.
In terms of experience, they choose students who have done one to two prior internships.
Qualifications for Product Developers vary depending on whether the position is entry level
or a senior position. Regardless, even entry-level positions require an MBA. However,
undergraduate degree holders with 2-3 years working experience through an employment
agency, or exceptional undergraduates who previously held an internship at Starbucks and
developed a great working relationship with their teams and Category Directors are
acceptable applicants. Senior-level positions, on the other hand, require at least 5 years of
experience in product or menu development in the food and beverage, or related industry. All
product development applicants should have experience in bench top to full-scale
commercialization of products, process development, project management, and specifications
development. In terms of abilities, product developers must be able to work with crossfunctional teams, and have basic Microsoft Office software skills. They should have
knowledge of food ingredient functionality, and food microbiology.
For Category Directors, the top managerial position in the U.S. product divisions before the
executive-level, applicants must have at least six years of business management experience.
They must have three years of experience in developing strategic plans. Six years of
experience is also required in product or brand management with profit and loss
responsibility, and progressive experience managing product or program development from

conception through implementation. These applicants must be able to work across company
divisions, as well as the ability to lead and negotiate with others effectively.
2.2

Employee Relations

Furthermore, Starbucks developed its human resources policies and strengthen them to the
extent that employees felt connected with the managers and the organization itself. The
company gained recognition amongst people by being one of the first organizations to offer
same advantages and benefits to part-time workers as for the full-time employees (Wilson,
1999). Employees that achieved a certain number of hours benefited of health insurance
coverage, which depended on the personal needs of each worker. Moreover, Starbucks was
offering dental and vision insurance and as well it was covering different medical treatments,
such as hypnotherapy and naturotherapy. The company succeeded to offer their employees a
wide variety of benefits such as income protection, saving plans, partner discounts or even
free drinks on a regularly basis. Another unique benefit of Starbucks, which was called
Adoption Assistance Program, was designed to reimburse employees a certain amount of
expenses that had occurred during the adoption process (Starbucks, 2007). Furthermore, these
benefits led to employee motivation, recognition and on the same time the company
succeeded to have a low employee turnover. In addition, Starbucks was the only company in
this industry that offered the highest wages by exceeding the minimum wage as specified by
state laws by a reasonable margin.
In 1991, Starbucks developed a new strategy by creating the Bean Stock Plan available for
employees that worked more than six months within the company (Wilson, 1999). This
program consisted in offering the employees the opportunity to play an important role in the
companys performance. In addition, due to the fact that this plan was offered to all
employees, Starbucks began to call its employees partners, highlighting that each member
of the organization is equal.
Additionally, a new solution was found to maintain low employee turnover by developing the
Working Solutions program to help the employees in their daily life . This work-life
balance concept was designed in order to help employees to cope with their daily life
problems and on the same time to be able to maintain or improve their work performance.
Starbucks decided to be more aware of their employees needs outside work in order to retain
their valuable staff members. According to Thompson (2003), companies must provide to
employees more than an adequate salary and a medical plan in order to gain a competitive

advantage. Starbucks program was focused in fulfilling employees needs by offering them
childcare or even elder care assistance. Starbucks believed that this will had a positive impact
upon employees turnover and the overall business performance.
In order to strengthen the relationships between employees, not only inside the company but
also outside of it, Starbucks designed a new program called Partner Connection. Its aim was
to bring together employees that shared the same interest, varying from parenting until social
activities. In addition, in 2000, Starbucks became recognized by its flexibility by offering to
all employees an adaptable schedule in order to create a balance between work and life .
Moreover, in order to assure that their employees are satisfied and motivated at work,
Starbucks created a new program called Partner Snapshot, which was conducted on a
regularly basis surveys to monitor whether their human resources policies are having the
desired impact or whether they need to be changed (Wilson, 1999).
2.3

Compensation

Starbucks offers its partners comprehensive health benefits that exceed those provided by
many other retailers. Although many partners work part-time they are still eligible for fulltime benefits if they work 240 hours a quarter. One estimate is that less than 30 percent of
part-time workers in the United States receive health care, paid sick leave, or eligibility for
bonuses or stock options. Starbucks Total Pay package includes programs that embrace
diversity as a way to conduct business. Starbucks provides all employees and their same-sex
or opposite sex partners comprehensive health benefits that include medical, dental, and
vision care, as well as tuition reimbursement, stock options and discounted stock purchase
plan, vacations, and a 401 (k) retirement plan. Partners are also eligible for free coffee and tea
products each week. The high importance placed on partners in Starbucks success is shown
by the decision made by Starbucks CEO, Howard Schultz, who was asked by an institutional
investor during the worst time for the company during the recent recession to consider cutting
its workers health care benefits to save cost. Schultz advised him that he would not do so and
that he should consider investing his money elsewhere.
Reimbursement accounts, including healthcare and dependent care, are eligible for salaried
and non-retail hourly workers. The Health Care Reimbursement Account allows contributions
of $100 to $5,000 each year to pay for out-of-pocket healthcare costs. The Dependent Care
Reimbursement Account allows contributions of $2,500 or $5,000, depending on marital

status to pay for dependent care expenses. Additionally, Starbucks provides basic life
insurance and sick pay for salaried and non- retail hourly partners
Moreover, partners are eligible for disability coverage, accidental death and dismemberment
insurance, counseling services, financial assistance programs, and adoption assistance.
Disability insurance encapsulates short term, meaning twenty six weeks or less, and longterm disability. Benefits eligible partners are able to purchase accidental death and
dismemberment insurance, an entirely optional program. The counseling service Starbucks
provides is called the Employee Assistance Program, which covers stress -related issues,
emotional difficulties, critical incidents in the workplace and other concerns. Starbucks
offers the Caring Unites Partners Fund, which financially assists partners who fall upon
difficult times such as illness, natural disaster or death in the family. Finally, Starbucks
subsidizes partners who have chosen to adopt children by up to $4,000.
Starbucks time off varies for salaried workers and retail hourly workers. Salaried workers are
eligible for holidays, personal days, vacation time and, tuition reimbursement. Two personal
days per year are available to partners. Vacation time is based on the position and length of
time with the company, accruing monthly. Tuition reimbursement is available to workers who
have been with Starbucks for over a year. Reimbursement amounts are higher when partners
have been with the company longer. Retail hourly workers are also eligible for holidays,
vacation days, and tuition reimbursement.
The Starbucks Stock Investment Plan gives partners the chance to purchase company stock at
a discounted price through regular payroll deductions. After ninety days of employment,
partners are eligible for a 5% discount on Starbucks stock at the end of each calendar quarter.
Additionally, Starbucks offers Bean Stock of up to 14% of an employees gross pay to
share in the companys growth.
3

Recommendations

Trough the analysis of Starbucks business strategies and Human Resources policies, it was
noticed that the company succeeded in most of the times to align its companys mission
statement, principles and values with its human resources practices. Moreover, by achieving
this alignment, Starbucks had a fast growth in this industry and as well the company easily
succeeded to differentiate itself from the competitors in the market. One issue identified is
concerning one of the Starbucks principles, which is to embrace diversity as an essential
component in the daily business activities. By analyzing the companys Human Resources

policies and practices it is noted a gap between the above principle and the fact that the
organization doesnt focus that much on the workforce diversity. Starbucks programs have
proved to be successful in terms of creating employees retention and motivation. However,
by taking into consideration the international expansion of Starbucks it is noted that staff
members dont benefit of a diversity-training program. The purpose of implementing such a
program should be to increase employees awareness towards the different ethnical
backgrounds of their colleagues or even customers. Moreover, these training sessions may aid
in creating a more friendly work environment, improving employees communication skills
and avoiding any intercultural conflicts to take place. Furthermore, the positive impact of
this program will be easily reflected upon the overall business performance of the
organization. Starbucks should consider the implementation of a diversity-training program
in order to be able to cope with the new challenges that may arise in the near future.

References
1. Starbucks.(2007). U.S. Adoption Assistance Program. Retrieved February 28, 2011,
from http://lifeat.sbux.com/NR/rdonlyres/8E18A19E-ECB2-436C-916A443ADE37818A/0/AdoptionAssistance012607
2. Based on D. Kesmodel, Starbucks Says Demand Perking Up, Wall Street Journal,
November, 6, 2009, p. B5;
3. K. Helliker and P. Ziobro, Starbucks Announces Its First Dividend, Wall Street
Journal, March 25, 2010, pp. B1, B4;
4. Associated Press, Starbucks Gives Logo New Look, Columbus Dispatch, January 9,
2011, p. D6;
5. Our Starbucks Mission Statement from company information from
www.starbucks.com ;
6. U.S. Total Pay Your Special Blend from Working at Starbucks at
www.starbucks.com ;
7. M. Weinstein, Fresh Cup of Training, Training, May 2008, p. 10;
8. Thompson, D.(2003). Help employees achieve a work/life balance. Retrieved March
2, 2011, from http://office.microsoft.com/en-us/word-help/help-employees-achieve-awork-life-balance-HA001171777.aspx
9. Web-books.com.(2011). Human Resources Management. Available from
http://www.web-books.com/eLibrary/NC/B0/B66/055MB66.html
10. Wilson, T., B.(1999). Building a Unique Total Rewards and HR System For A Unique
Company At Starbucks. Retrieved February 26, 2011, from
http://www.wilsongroup.com/ecr/case/Starbucks.pdf