Personnel policies are guidelines set by companies for their workers. These ensure that the employees know their rights, privileges, and what the company expects from them. According to Starbucks business code of conduct, Starbucks commits to follow all wage and hour laws and regulations fixed by the government (Glassdoor, 2014) Furthermore, the Starbucks' Global Human Rights Policy states that, Starbucks is committed to supporting and upholding the provision of basic human rights.(Global Assets) In spite of this, workers at Starbucks showed resentment in regard to their wages and working conditions. In 2004, a Starbucks Workers Union was formed that called for increased pay and raises, consistent scheduling, and an end to understaffing. (Starbucks Workers Union, 2013) They gathered to form their own website with the mission of uniting workers throughout the world. However, their Facebook page is relatively more active and provides a medium for workers to voice their demands. Starbucks Global Human Rights Policy also states that managers and employees are allowed to participate and involve in energetic and direct dialog. (Global Assets) This will help them solve joint problems and deal with mutual challenges. (Global Assets) In spite of that, the company failed to reach a joint agreement with their employees regarding their pay policy.
The minimum wage rate at Los Angeles is $8 per hour; but, a barista receives an average of $8.79 per hour at Starbucks. (Glassdoor, 2014) This is slightly above the minimum wage rate set by the government. Even though the company manages to comply with the minimum wage law set by the government, workers at Starbucks still feel that the company is exploiting them. One of the reasons for their retaliation is that the CEO of the company, Howard Schultz, earns more than $9,200 an hour. (Business Insider, 2013) This is at least 1,000 times the hourly wages of their sales associates. (Business Insider, 2013) This shows that the company generates enough revenue to overcome the cost of increase wages. Statistics also confirm the fact that this coffee business is generating substantial revenue as sales have increased. Starbucks now sells 46% more things an hour than it used to do five years ago. (Quartz, 2013) However, Starbucks is also one of the ten companies that pay Americans the least. (Huffington Post, 2013)
Low salary will not only decrease the employees' morale, but it will also dissuade people from establishing a lasting commitment with the company. People will work without the willingness to stay in the company for long. In addition to that, the company will fail to attract the best of the workforce. This is important in an era where companies continually struggle to employ the most qualified and skilled workers. Therefore, Starbucks should change its' compensation policy and raise wages to meet the employees' needs. Recently, Howard Schultz also gave a public statement that signified that he supports the governments' idea of increasing the minimum wage rate. He said, 'On balance, I am a supporter of the minimum wage going up.' (Huffington Post, 2013) He also called the figure $8.78 as 'misleading' because it did not take into account the tips or boosts in workers' salary overtime. (Huffington Post, 2013) However, the Federal Court of New York upheld a lower-court ruling recently and passed a verdict that Starbucks baristas will have to share their tips with the 'shift' supervisors. (NY Daily News, 2013) This means that the figures are not misleading to a great extent. The case was taken to court by Baristas because they felt that their income was already very low. According to them, the supervisors did not work as hard as they did to earn those tips. At the same time, the Federal Court announced that the group of baristas at the Seattle-based coffee chain will get $14 million as a compensation for tips that they had already missed.(Huffington Post, 2013)
Therefore, it is set that the company needs to change its' policy regarding wages. Since the CEO has the same opinion as the governments' regarding wage increase; he can set an example by increasing the wages that he offers to its 'partners'(workers). This wage rise will gain the trust of workers over its' employees and will lessen their retaliation. Apart from that, it will prevent future incidents similar to the one witnessed in court. Starbucks should clearly mention policy regarding the tips workers receive so that the employees are well-aware for what they sign up. A wage rise will make the company attractive for new entrants in the workforce. This will provide Starbucks to recruit more refined and skilled workers.
2. Recruitment and selection:
To carry out the first stage of recruitment process-attracting workforce- the company first analyses the job for which the staff is to be hired. By collecting information regarding major work requirements for different positions in the company, job descriptions and job specifications are composed. These include description about the critical tasks to be achieved in job, responsibilities assigned to the worker, and the experience, education and skills that are required for a job position. The company then informs candidates about vacancies by posting jobs on various web pages, social media websites, and allows them to send their CVs or resumes either online or in-person.
The next stage of the process involves reducing the size of the applicants to a manageable number. The recruiters scan through the content of the applications by comparing it with the job specifications. People who offer relevant skills are taken into consideration and assessed through interviews and other measures. Starbucks usually takes two weeks to process the applications and then calls for an interview. It is usually conducted by the store manager who asks a wide range of questions. These questions are designed primarily to investigate the eligibility of the contender for the desired placement. The procedure of the interview also depends on the role for which the person has applied. In case of hiring of a Barista, Starbucks will employ only one interviewer to make the decision. However, for managerial posts, candidates may be interviewed more rigorously by a group or a panel of senior members of the company. Once the company feels satisfied with the candidates' motivation and his/her ability to contribute meaningfully towards the organizations' well-being, it runs a background inspection to ensure that the person has no criminal record. Finally, a pay proposal is offered to successful candidates that are usually non-negotiable.
Starbucks undergoes the process of both internal and external recruitment. Internal recruitment means that the company fills a vacant job by a member who is already an employee at Starbucks. External recruitment means that it hires a person from outside the company. Since the company has set high standards for the job requirements, it is difficult to find people who have the required combination of knowledge and personality traits for employment. Therefore, the company prefers its vacancies to be filled by the already recruited employees and internally posts new jobs for three days.
Starbuck's mission statement is: To inspire and nurture the human spirit-one person, one cup, and one neighborhood at a time.(Global Assets). Therefore, the company aims to provide its customers a 'third place', a place that allows them to escape work and home stress and gives them space to breathe. Therefore, Starbucks need to employ workers who are equally willing to work for the company's mission and have the motivation to give customers a relaxed environment. The Baristas are usually the ones that directly interact with the customers, so, it would be a good practice to hire youngsters for this post who are relatively more fresh and lively. The company can ensure that it attracts a younger, but qualified, team of workers by continually developing and expanding its internship programs to the extent that it establishes a good standing within top universities. Starbucks may relax their recruitment policy after gaining popularity in universities. The company may hire those who do not belong to the top 10% of the students.
3. Performance Appraisal System:
Performance appraisal comprises the steps of observing and assessing employee performance, recording the assessment, and providing feedback to the employee. (L.Daft, 2006) The purpose of performance appraisal system is to ensure that the employees' skills, knowledge, and expertise are completely utilized. The process also allows workers to understand, fully, the expectations of the company and the necessary changes required to improve their job performance. (Arthur, 2000)
Strengths: Starbucks uses 'customer card method' to measure job performance. This is a way in which customers fill in survey questions regarding the services they received during their visit to Starbucks. The customers are requested to write down their views about the employees. This is an objective way of evaluating their workers' performance because the customers do not personally know the employees. Therefore, the feedback given will not be biased or influenced in any way. Apart from that, Starbucks…
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