“If you want 10 days of happiness, grow

grain. If you want 10 years of happiness

grow a tree. If you want 100 years of
happiness, grow people.”
-Harvey Mackay.
 Introduction to Starbucks

• Company started in 1971 in Seattle, Washington

• Largest coffeehouse in the world
• Grew from 55 stores in 1989 to over 16,226
stores in 44 countries in 2008
• Products sold include:
- beverages - pastries
- whole coffee beans - coffee-related retail items
• Revenue - US$ 9.411 billion (2007)
• Employee – 172,000 (2008)
 Human Resource
Management and the
Growth Challenge
Human Resource Management
Ø Fortune “Best Companies to Work For” survey – in
January 2005
Ø Employee friendly policies and supportive work
culture
Ø Benefits program to part time workers

Challenges
Ø Retention on Rapid Expansion Program
Ø Possible problems
 Howard Schultz

“Treat people like family , and they

will be loyal and give their all.”
*In 2002, top 25 Managers of the
Year by Business Week magazine

*In 2004,“Time 100,“ Time

magazine's list of the most
influential people of the 20th
Century
Establish Starbucks as the premier purveyor of
the finest coffee in the world while maintaining
our uncompromising principles as we grow

*Provide a great work environment and treat

each other with respect and dignity
*Embrace diversity as an essential component in the way
we do business
*Apply the highest standards of excellence to the
purchasing, roasting and fresh delivery of our coffee
*Develop enthusiastically satisfied customers all of the
time
*Contribute positively to our communities and our
environment
*Recognize that profitability is essential to our future
success
 Recruitment and Training

• Starbucks’ recruitment motto-” To have the

right people hiring the right people”
• Training program-’ First Impressions’
• Coffee making –Science at Starbucks
• Three basic star skills-
§ Maintain and enhance self-esteem
§ Listen and acknowledge
§ Ask for help
 Recruitment and Training

• Additional training to managers

§ Details of store keeping
§ Practices and procedures in Company
operating manual
§ Basics of managing people
§ Outside training programs and
seminars
 Corporate
objectives Business unit
HR strategies
strategic plans, strategies
vision, and values

What business How do we win (gain How should HR

should we be in? competitive advantage) help us win?
in those businesses?

Strategic
compensation
decisions

Compensation
systems
Strategic Choices
on Compensation Employee
attitudes and
behaviors

Competitive
advantage
 Strategic Compensation
Decisions
• Objectives

• Alignment

• Competitiveness

• Administration
 The Strategic Compensation
Decisions Facing Starbucks
1. Objectives: How should compensation
support business strategy and be adaptive
to the cultural and regulatory environment?

Starbucks objectives:
– Grow by making employees feel valued.
– Recognize that every dollar earned passes
through employees’ hands.
– Use pay, benefits, and opportunities for personal
development to help gain employee loyalty and
become difficult to imitate.
 The Strategic Compensation
Decisions Facing Starbucks

2. Alignment: How differently should the

various types and levels of skills be paid
within the organization?

Starbucks:
– De-emphasize differences.
– Use egalitarian pay structures, cross-train
employees to handle many jobs, and call
employees partners.
 The Strategic Compensation
Decisions Facing Starbucks

3. Competitiveness: How should total

compensation be positioned against our
competitors? What forms of compensation
should we use?

Starbucks:
– Pay just slightly above competitors.
– Provide health insurance and stock options
for all employees (including part-timers).
– Give everyone a free pound of coffee every
week.
 The Strategic Compensation
Decisions Facing Starbucks
4. Administration: How open and transparent
should pay decisions be to all employees? Who
should be involved in designing and managing
the system?

Starbucks:
– As members of the Starbuck’s “family,” our
employees realize what is best for them.
– Partners can and do get involved.
– “your special blend”
 Employees benefit programs

• Health benefits : Insurance coverage

• Employee ownership program(ESOPs)

• Bean stock plan : stock options to part timers

• Flexi time schedules

• Onsite fitness programs

 Employees benefit programs
(continued)

• Child care and elder care assistance

• Working solutions

• Partner connection

• Perks : 30% discount and free coffee

every week
 Retention

• Retain small company atmosphere

• Spirit of friendliness
• Starbucks experience
• Encourage innovativeness
• Self managed teams
• Awards (warm regards, MUG, bravo &
spirit of friendliness)
 Work Culture and Motivation
• Work Culture • Motivation
Providing great work
• •
Awards, calling them
environment was integral part ‘partners’
of mission statement •

• •
Motivated Employee
Reinforcement of mission
• •

statement •
Motivation leads to
• innovation
•
Mission Review Programme Example: Frappuccinos, a
•

popular cold coffee, was a

result of the ideas of few
•

•
No capitalization of job titles employees
 Challenges
•To maintain its image after expansion

•Human resource cost was very high

•High HR cost may get reflected in increased price

of beverages

•Complain of loosing its attractiveness as the size

was Increasing

•Increased awareness amongst other retail

companies about the importance of HR policies
leading to increased competition
THANK YOU
Presented By: Gaurav Dhananjay
J. Prabhu
Gautam S.V.
Geetanjali Upadhyay
Hari Krishna
Deep Kiran