Performance Management and Organizational Effectiveness

Human Resources -- Performance Management and Organizational Effectiveness

Assess the strengths and weaknesses of the performance management system in your organization.

Starbucks Corporation, founded in 1971 in Seattle, Washington (Shahi, Omar, Aufschlager, Schmerling, & Gassner, 2007, p. 3), prides itself in its exemplary performance management system. The prototypical performance management system focuses on two functions: decision-making, in the form of "pay increases, promotions, transfers, assignments, reductions in force or other administrative HR actions" (Pulakos, 2004, p. 3); and employee development, through guiding the "training, job experiences, mentoring and other developmental activities that employees will engage in to develop their capabilities" (Pulakos, 2004, p. 3). Using 360 Feedback Performance Appraisal provided by direct reports, employees (here called "partners"), coworkers, managers and customers (Starbucks Corporation, 2013; Lepsinger & Lucia, 1997), Starbucks' performance management system has many strengths but is also burdened with a few pronounced weaknesses.

In the decision-making function, Starbucks is strong in that it provides its employees with salaries (Hammers, 2011), bonuses, some free products and in-store discounts, along with benefits such as health insurance, 401k plans and stock options (Starbucks Corporation, 2013). However, according to several employees, Starbucks pays too little and offers too few benefits for the stressful workload and other working conditions such as unpleasant coworkers and poor managers (Indeed, 2013). In addition, Starbucks' employee development has some admirable features, including: the sense that a worker is also a partner involved in something bigger than himself/herself when striving to provide excellent products and services to customers; career sabbaticals; employee recognition programs; and educational financial assistance with textbooks, tuition and technology (Starbucks Corporation, 2013). Furthermore, employees/partners are encouraged to give in-depth feedback through "Partner Voice Surveys" (Evans & Hansen, 2010, p. 7) and employee/partner appraisals for purposes of career advancement, salary increases and bonuses focus on numerous facets, including but not limited to an employee's/partner's personal traits, behavior and job performance (Evans & Hansen, 2010, p. 7). In addition, Starbucks has a standing Human Rights Policy covering minute-to-global conditions for employees and customers alike, and employees are encouraged to directly confront any offender and to report any poor working conditions or human rights violations, preferably in writing, according to Starbucks' Anti-Harassment/Anti-Retaliation Compliant Procedure or the Standards of Business Conduct (Starbucks Corporation, 2013). These complaints are to be submitted by the employee/partner to store managers, district managers and/or a partner resources manager (Evans & Hansen, 2010, p. 7). Nevertheless, some employees still give Starbucks low marks for intensely stressful, uninspired and repetitive work environments, for poor training (Indeed, 2013), and for under-appreciation of their efforts (Shahi, Omar, Aufschlager, Schmerling, & Gassner, 2007, p. 15). As a result, Starbucks employees formed a union, which is part of the IWW, to effectively deal with grievances about wages and working conditions (Shahi, Omar, Aufschlager, Schmerling, & Gassner, 2007, p. 12). Consequently, a 360 Feedback Performance Appraisal accurately gives Starbucks a "mixed bag" of strengths and weaknesses.

b. What recommendations would you make to improve this system?