Human Resource Management Practices in Starbucks: A Comprehensive Analysis

This report provides a comprehensive analysis of human resource management (HRM) practices in Starbucks, a global coffeehouse chain. It explores the purpose and functions of HRM, examines different recruitment and selection approaches, and evaluates the benefits and effectiveness of various HRM practices. The report also investigates the impact of employee relations and employment legislation on HRM decision-making. Finally, it illustrates the application of HRM practices in a work-related context, focusing on performance appraisal techniques. This report aims to provide insights into the strategic role of HRM in achieving organizational goals and enhancing employee performance.

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HUMAN RESOURCE MANAGEMENT

CONTENTS
INTRODUCTION................................................................................................................................3
LO 1..................................................................................................................................................4
P1 PURPOSE AND FUNCTION OF HRM........................................................................................4
HRM FUNCTIONS.....................................................................................................................4
WORKFORCE PLANNING..........................................................................................................6
M1 FUNCTIONS OF HRM IN STARBUCKS.....................................................................................7
P2 & M2 EXPLAIN AND EVALUATE DIFFERENT APPROACHES OF RECRUITMENT AND
SELECTION....................................................................................................................................9
TASK 2............................................................................................................................................12
P3 THE BENEFITS OF DIFFERENT HRM PRACTICES IN STARBUCKS FOR BOTH THE EMPLOYER
AND EMPLOYEE.........................................................................................................................12
M3 THE DIFFERENT METHODS USED IN HRM PRACTICES IN STARBUCKS................................14
P4 THE EFFECTIVENESS OF DIFFERENT HRM PRACTICES IN TERMS OF RAISING
ORGANISATIONAL PROFIT AND PRODUCTIVITY OF STARBUCKS..............................................16
TASK 3............................................................................................................................................17
P5 THE IMPORTANCE OF EMPLOYEE RELATIONS IN INFLUENCING HRM DECISION-MAKING IN
STARBUCKS................................................................................................................................17
P6 THE KEY ELEMENTS OF EMPLOYMENT LEGISLATION AND ITS IMPACT ON HRM DECISION-
MAKING OF THE STARBUCKS.....................................................................................................19
M4 EVALUATION OF THE KEY ASPECTS OF EMPLOYEE RELATIONS MANAGEMENT AND
EMPLOYEE LEGISLATION THAT AFFECT HRM DECISION –MAKING IN STARBUCKS..................20
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TASK 4............................................................................................................................................22
P7 ILLUSTRATION OF THE APPLICATION OF HRM PRACTICES IN A WORK RELATED CONTEXT
OF STARBUCKS...........................................................................................................................22
M5 A RATIONALE FOR THE APPLICATION OF SPECIFIC HRM PRACTICES IN A WORK RELATED
CONTEXT OF STARBUCKS...........................................................................................................24
CONCLUSION.............................................................................................................................25
REFERENCE.....................................................................................................................................26
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INTRODUCTION
Every organization consists of employee and employer that work together to achieve the
organizational goals and objectives. The process that keeps running the organization involves
several tasks that have to be performed. For each task, the workforce is required with a specific
set of skills and experience. Analysing the workforce-related need of the organization and
fulfilling it by recruiting potential candidates are the basic function of the HRM department.
Apart from this, maintaining relations with the employee and understanding their
requirements and needs are some other functions of the department.
The following assignment explains the purpose and functions of the HRM department along
with the merits and demerits of different recruitment and selection method used by Starbucks.
Additionally, the benefits and effectiveness of the HRM practices in Starbucks are also explained
in detail. Later on, how the employee relations and employee legislation influence and impact
the HRM decision-making is analysed and identified. Lastly, the application of HRM practices in
the workplace of the organization is illustrated.
For the given assignment, the chosen company is Starbucks; it is an American based
coffeehouse chain founded in Seattle in the year 1971. Currently, it operates in more than
16698 locations worldwide. It CEO is Kevin Johnson, and employ about 238,000 workers
worldwide (Starbucks, 2018). According to Britannica, it is the largest coffeehouse chain in the
world. Company define its mission as to encourage and cherish the human spirit. The company
is known for quality services (Bondarenko, 2015).
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TASK 1
P1 PURPOSE AND FUNCTION OF HRM
The major purpose of HRM department in an organization like Starbucks is to increase the
productivity of the organization by increasing the effectiveness of its employees. HRM
department is responsible for three essential tasks, which are, recruiting new staffs, training
and developing their skills and maintaining a positive work environment (Bratton, and Gold,
2017). HRM functions can be categorized into three sections that are:
HRM FUNCTIONS
Figure 1: HRM Functions
MANAGERIAL FUNCTIONS
 Initially, the required workforce is determined based on the tasks; skillset and
experience required to perform specific tasks is determined.
 Specific work is assigned for each task in Starbucks, employees are trained to organize
their work accordingly (Banfield, et al., 2018)
 Employees are directed and motivated in order to increase their performance level
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HRM FUNCTIONS
Advisory
Functions
Operative
Functions
Managerial
Functions

Figure 2: Managerial Functions
 Quality and performance of the employees are monitored and increased if required, by
assigning tasks and performing quality improvement activity (Marchington, et al., 2016)
OPERATIVE FUNCTIONS
This includes determining the skills for specific jobs, recruiting potential candidates and training
them to adjust to the work environment. Additionally, they also monitor the performance of
the employees and perform several activities to increase their performance and prepare them
to handle more responsibilities (Arora, and Gupta, 2016). They also monitor salary, incentives,
and other benefits given to the employees of Starbucks.
ADVISORY FUNCTIONS
HRM department deals directly with the employees and conducts personal analysis to
understand their requirement and needs; this gives significant knowledge and experience
regarding employee relations to the HR manager. Therefore, they play a part while forming
company policies (Brewster, et al., 2016).
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Planning
Organizing
Directing
Controlling

WORKFORCE PLANNING
Figure 3: Workforce Planning
It consists of several steps aligned in a manner to ensure increased productivity of the team and
organization. Initially, organizational goals and objectives are determined, and then an analysis
is done by a different department to determine the turnover causes. Gaps are filled in the next
stage by planning the action plan and are implemented by conducting personality and skill
development activities. After implementation of the plan, its outcome is observed and matched
with the set limit based on which changes are made in the action plan (Cascio, 2018).
6
Strategic
Directions
Workforce
Analysis
developing
Action Plan
Implementing
Action Plan
Monitoring,
Evaluating,
Revising

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M1 FUNCTIONS OF HRM IN STARBUCKS
The HRM department of Starbucks is responsible for performing several functions that help the
organization to reach their goals. Its function starts with recruiting the potential candidates
based on the tasks that have to be performed. As per HRM department of Starbucks, their
recruitment is divided into two sections i.e. retail and support centre. The selection involves
selecting the most appropriate recruited candidate that is able to perform the designated tasks.
This involves understanding the mindset of the candidates regarding their views and thinking
about coffee. Once the candidate is selected, HRM department conducts several development
programs that help the employees in adjusting to the organizational culture (Lussier, and
Hendon, 2017). These programs include training, this program trains the new staffs to recognize
coffee, and the communication methods used within the department of Starbucks. Within 80
working hours the staffs are required to master the knowledge about coffee, which includes
determining different types of coffee and describe its taste, additionally, Starbuck's importance
and position are the market is also explained to the staffs. Additional programs managed by its
HRM department includes Core 1& 2, retail manager programme, district manager training,
Starbucks experience etc.
Quality check is an important policy of Starbucks, which is also applied to the staffs their
performances are measured by the HRM department through which they provide incentives to
the staffs. Each partner of Starbucks has to earn star skills that determine their performance
level. Based on the performance of the staffs, their pay scale includes bonuses, saving the plan,
free pound of coffee, insurance etc. Moreover, since the company is largely spread across the
globe, staffs of a different culture are recruited for performing the tasks. Maintain relations
with them and forming essential policies require the involvement of the HRM department
(Brewster, et al., 2018).
From recruitment to selection and training, all the functions performed by the department is
dedicated to increase the performance level of staffs and make them capable of handling
though and unwanted situations. Information regarding coffee provided in training helps the
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staffs to offer better services to customers. By improving educating the staffs, HRM department
increases the service quality of the company that helps them in achieving the organizational
goal (Surbhi, 2015).
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P2 & M2 EXPLAIN AND EVALUATE DIFFERENT APPROACHES OF
RECRUITMENT AND SELECTION
Every organization requires the different set of workers to perform specific tasks, recruiting
correct employee for the correct job is managed by the HRM department. Recruitment is a
process where job analysis and sourcing and interviewing the candidates. The HRM department
of Starbucks uses several recruitment methods. That is listed below:
EXTERNAL RECRUITMENT
In this method, for the positions of Baristas and district manager, they are allowed to send their
qualification and experience details to the organization. In this method, the candidates are
recruited from outside the organization; this proved them diversity, which is essential for the
company like Starbucks as it operates in multiple countries. The company has set different
qualification standards for the candidates that are chosen from this method, for instance, the
baristas must be graduate, must be experienced in the hospitality and tourism sector, and are
comfortable to work in weekend and holidays and have good communication skills (DeVaro,
2016).
Starbucks accepts walk-in interviews, and online application form on their website for recruiting
the candidates; recently they have also initiated a process where they publically post
recruitment opportunities on their Facebook, Twitter, and LinkedIn accounts. However, it is a
time-consuming process and expensive, additionally, it demotivates the existing employees as
their chances of promotion decreases (Jamil, and Naeem, 2013).
INTERNAL RECRUITMENT
In this method, the organization fills the gap of the employee through its own workforce;
employees are generally promoted based on their improved skills, experience, or qualification.
This method includes less paperwork and the employees selected are also aware of the
organizational culture, thus the time consumed in training is reduced. Additionally, it also
improves the involvement of the promoted employee, as they feel more connected to the
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organization. However, choosing the employee from the organization reduces the diversity in
the team (DeVaro, and Morita, 2013). As managers recruited from outside the organization are
filled with ideas, it limits the options of the company. Starbucks promotes this method in the
retail section, as the baristas improve their skills, they are moved up in the vertical chain (Fox,
2015).
Once recruitment is done and necessary training is provided to the employees, and then comes
the selection process. In this process the correct person is chosen from the pool of applicants;
Starbuck's selection process includes following methods:
ASSESSMENT CENTER
In retail and support section, candidates are provided with an opportunity to work with the
staffs and learn about the job. Additionally, in the 1st two weeks, the candidates are required to
attend special training conducted by the HRM department on coffee; this training provides brief
information regarding different types of coffee, their taste and how to explain and differentiate
tastes. This is essential to provide the best experience to the customers. in retail section,
candidates are trained based on the job they have applied for. This helps in choosing the right
candidate, however, this method is comparatively time and energy consuming. Staffs have to
constantly monitor the work of the candidates and periodically guide them (Townley, 2014).
DIRECT INTERVIEW
Starbucks also offer to convince the employees of walk-in interviews in which the applicant has
to fill an application form rather than submitting resume and CV. For retail section, the store
manager conducts the interview, where they ask similar questions for the candidates to
determine their mindset and personality. Whereas, in support section panel of managers
conduct interviews to determine the skills, capabilities and mindset of the candidates. This
method of interview, provide the opportunity to select diverse staffs, also it is effective if a
targeted skill is required for the post. However, it holds some drawbacks such as, it is time-
consuming and costly to set up an interview, also this method can be biased and lack of
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attention or misinterpretation from the interviewer side can cause selecting the wrong
applicant or vice versa (Gatewood, et al., 2015).
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TASK 2
P3 THE BENEFITS OF DIFFERENT HRM PRACTICES IN STARBUCKS FOR BOTH
THE EMPLOYER AND EMPLOYEE
The human resource management needs to involve several practices for enhancing and
improvising the human assets of the organisation. The HRM department of any organisation is
responsible for accustoming several HRM practices to ensure the effectiveness of the overall
activities and operations of the organisation. The HRM practices such as training, performance
management, hiring, payroll and firing etc. are performed to benefit both the employer and
employee and the overall organisation (Wilton, 2016).
The HRM practices of Starbucks provide benefits to both employer and employee and support
in maintaining the goodwill and growth of the organisation in the market.
THE BENEFITS OF HRM PRACTICES FOR BOTH EMPLOYER AND EMPLOYEE OF STARBUCKS
 Improve Employee Turnover: To reduce employee turnover is the major concern of
HRM and various HRM practices help in retention and motivation of employees to
reduce employee turnover.
 Conflict Resolution: HRM practices also help in resolving and minimizing conflicting
situations in the organisation.
 Employee Satisfaction: Some HRM practices like performance appraisal and reward
system helps in building higher satisfaction among employees and hence, the quality of
work also increases in return in Starbucks.
 Training and Development: HRM practices for training and development in Starbucks
has resulted in increased quality of work for the employers and higher opportunities and
satisfaction among the employees (Wilton, 2016).
 Motivation: The HRM practices like the reward system, bonus and allowances in the
organisation motivates its employees and enhance the working conditions of the
organisation.
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 Improve Performance: Starbucks practices open communication to keep the employer
and employees frequently informed and thus helps in improving the performance of the
organisation.
 Promoting Positive Behaviour: Starbucks works towards making stronger relationships
between employees and their managers to promote positive environment and
behaviour in the organisation.
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M3 THE DIFFERENT METHODS USED IN HRM PRACTICES IN STARBUCKS
The Starbucks sees its human resource as an important asset for survival and success of the
corporation. It uses various methods for having an effective human resource in the
organisation. It utilizes these methods as a strategic tool to gain a competitive advantage in the
market and have the better relationship and positive environment within an organisation. The
different methods used in HRM practices in Starbucks are:
Recruitment and Selection: An effective recruitment and selection process is very important for
the success and growth of the organisation. It prefers in recruiting and selecting people with
the ability for social consciousness as it believes in higher social values (Bamberger et al., 2014)
Reward Policy: the rewards policies are the major tool for increasing motivation, retention and
recognition for the employees and decreasing the rate of employee turnover in the
organisation.
Training and Development: training and development are the major methods of HRM practices
as it is very crucial for increasing the abilities and standards of the employees. It offers a range
of training programmes to provide required knowledge and skills to enhance the customer
satisfaction and company’s value in the market.
Comprehensive Health Benefit: Starbucks also offers comprehensive health benefits to its
employees through various health facilities like health insurance, health and dental care
facilities, vision insurance and alternative medical treatments are such as naturopathy and
hypnotherapy are also provided to increase employee motivation and retention.
Open Communication: Starbucks practices open communication to facilitate and maintain an
effective flow of information within the organisation. This helps in building a better relationship
with the superiors and subordinates and also helps in mitigating and solving conflicts and
uncertain issues (Bamberger et al., 2014).
Work-life balance: Starbucks involves HRM practices for establishing better work-life balance
for its human resource. The work life balance refers to maintaining the balance between
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individual’s work life with their health and well-being. It helps the organisation to retain
maximum employees and increase the quality of the work.
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P4 THE EFFECTIVENESS OF DIFFERENT HRM PRACTICES IN TERMS OF RAISING
ORGANISATIONAL PROFIT AND PRODUCTIVITY OF STARBUCKS
The different methods of HRM practices of Starbucks discussed above are the major strategic
tools for increasing the effectiveness of the overall human resource of the organisation. These
methods facilitate the development of human resources in the organisation. Besides this, the
different HRM practices also support in increasing the productivity and profitability of the
overall organisation. These HRM practices could be considered as a support system for the
other organisational functions as all the functions of the Starbucks are majorly dependent on
human resources (Boselie, 2010).
The effectiveness of HRM practices for raising profit and productivity of the Starbucks.
 Recruitment and Selection: The recruitment and selection of most suitable candidates
help in providing quality performance and services to the customers that create higher
customer value, productivity and profitability of the company.
 Training and Development: Training and development programmes are conducted time
to time to increase the credibility of the employees. The employee credibility results in
increased productivity and performance.
 Reward Policy: The reward policies help in inculcating higher motivation and
faithfulness towards the work among employees. Through this, the productivity of the
organisation could be enhanced, and hence, results in higher profitability and growth.
 Open Communication: Open communication helps in creating a positive and more
productive environment within the organisation that helps in earning higher profit and
productivity for the organisation (Boselie, 2010).
 Incentives and motivation: the perks of providing incentives and motivation to the
employees are increased productivity and profitability of the organisation.
These are some important HRM practices that directly or indirectly help in increasing the
customer value, productivity and profitability of the Starbucks.
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TASK 3
P5 THE IMPORTANCE OF EMPLOYEE RELATIONS IN INFLUENCING HRM
DECISION-MAKING IN STARBUCKS
An employee relation is an internal factor that has a vide impact on the decision making of the
human resource management department. In order to increase the productivity and
profitability of an organisation, the cooperation among the employers and employees is very
important. This helps an organisation in increasing employee satisfaction, belongingness and
creating a degree of commitment among the employees. The cooperation among the human
resources of the organisation could only be achieved through an effective employee relation
within an organisation (Grohmann and Kauffeld, 2013.).
Employee relations refer to the method of interaction between the superiors and subordinates
within an organisation. The HRM department of the organisation is responsible for creating
better employee relations to increase the productivity and profitability of the organisation for
avoiding any conflicts and uncertainties. A positive and strong employee relationship creates
motivation and develops morale among the employees of the organisation.
In Starbucks, the HRM department lays emphasis on increasing workers participation in making
better decisions for the survival and growth of the organisation. The participation of workers is
facilitated by establishing better employee relationship in the organisation. This helps in
reducing the conflicts and generating better decisions for attaining a common organisational
goal. The better employee relationship helps in making coordinated decisions that are less
resistant by the employee as the decisions were made with mutual participation. For an
instance, in Starbucks, an employee has accidentally developed a new product called
Frappuccino and company first resisted to add it to the menu but after several discussions, it is
offered by the company and now it is widely recognized product of the company. This shows
the positive employee relationship of the company (Grohmann and Kauffeld, 2013)
Employees are the major source of information and by a good employee relationship, HRM
could get the variety of information to formulate favourable decisions for the organisation. A
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good employee relationship helps in making effective decisions and vice versa. By involving
employees in formulating organisational decisions the competitiveness and stability of the
company could be increased.
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P6 THE KEY ELEMENTS OF EMPLOYMENT LEGISLATION AND ITS IMPACT ON
HRM DECISION-MAKING OF THE STARBUCKS
Employment legislation is the external factor that has major impact on the decisions of the
human resource management. Employment legislation is the law for governing the
employment in a business organisation. Several legislation and laws are regulated for the
welfare of the workers and affects the decisions of the human resource department of an
organisation. The major role of these employment legislation and laws is to ensure a better
treatment of the employees during a job and to identify who and who cannot be employed by
the organisations (Wilton, 2016) These laws also suggest the duties, roles and responsibilities of
the employers and employees within an organisation. Employment legislation sets the
standards of employment and covers wide range of employment aspects mainly:
 Minimum wages
 Meal break
 Hour of work
 Annual vacation
 Resolving disputes
 Maternity leaves
 Parental leaves
 Deductions
 Statutory holidays
 Sexual harassment
Apart from these there as several more employment laws presented that affects the decisions
of human resource management in Starbucks. It is very important to consider all the employee
legislation while formulating various policies and decisions to avoid future uncertainties in the
operations of the organisation (Hendry, 2012).
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M4 EVALUATION OF THE KEY ASPECTS OF EMPLOYEE RELATIONS
MANAGEMENT AND EMPLOYEE LEGISLATION THAT AFFECT HRM DECISION –
MAKING IN STARBUCKS
ASPECTS OF EMPLOYEE RELATIONS MANAGEMENT
The Starbucks is a recognised organisation in the world. It is most commonly known for its
coffee but in the UK the company is also recognised as one of the best human resources
management organisation. It manages its human resources by establishing better and positive
employee relationship with its customers. It practices various methods for establishing and
enhancing better employee relations within the organisation. Some of them are:
 Proper communication: proper communication helps to make effective decisions in
several organisational functions. An open communication system of Starbucks supports
the company in making an effective relationship with the employees.
 Recognition: the Starbucks also supports recognition for the employees through public
praise, rewards, bonuses, appreciation and gratitude to the employees. This creates
high morale and motivation among employees (Kew and Stredwick, 2016)
 Constant feedback system: An effective feedback system for employees helps Starbucks
to rectify possible errors and loopholes that could affect the effectiveness of the
organisation. It also helps in making new ideas, policies and decisions in favour of the
organisation.
 Training and development: Starbucks also facilitates effective training and development
programmes to support its employees in having more confidence and skills for better
performance.
ASPECTS OF EMPLOYEE LEGISLATION
The HR policies of Starbucks are developed as per the several laws and legislation and the
standards of the government policies and laws. All the decisions of HRM in Starbucks are
affected by this employee legislation. Various acts have been formulated to safeguard the
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interest of the employees (Jiang, et al.,2012). Some of the key aspects of employment
legislation are:
 Equality act, 2010
 Pension act, 2008
 Working time regulation act, 1998
 National minimum wage act, 1998
These acts are mainly considered by Starbucks before making any decisions about human
resources of the organisation. Besides of this various other legislation also influence the
decisions of the HRM of Starbucks.
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TASK 4
P7 ILLUSTRATION OF THE APPLICATION OF HRM PRACTICES IN A WORK
RELATED CONTEXT OF STARBUCKS
Here in this report, the application of the HRM practice of performance appraisal techniques in
the Starbucks will be discussed. The performance appraisal techniques are used to improve and
motivate the performance of the employees of the organisation (Iqbal et al., 2015) The HRM
practice for performance appraisal will be critically illustrated for finding the best way of
performance appraisal for Starbucks.
To develop the employee’s performance in the organisation the performance appraisal method
is being used. A performance appraisal refers to the evaluation, review and development of the
performance of the employees within an organisation. This helps in understanding the skills and
abilities of an individual to assign the task and responsibilities accordingly (Iqbal et al., 2015) In
Starbucks, the performance appraisal is designed to promote strategic planning and assessment
of all the aspects of the employees, providing counselling and solving employee’s problems to
enhance the productivity of the company. There is a relationship between the human resource
management and the performance of the organisation. As a service organisation star bucks are
mainly dependent upon the performance of its human resources. The key element of
performance appraisal is motivation.
The performance appraisal method will help Starbucks to gain relevant information and
knowledge about the needs, behaviours and performance of the employees. The application of
performance appraisal will have both positive and negative impact on the performance of the
overall organisation as it is used for career planning and making termination decisions in the
organisation. It is used as the basis for making decisions of providing compensation, training
and promotion to the employees (Devina, 2013)
In star bucks, the performance appraisal has two stages. One is to measure the job
performance of the employee and second is to share responses with employees. To measure
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the employee's performance, star bucks uses a customer card. It is a survey question asked by
the company from customers about the performance of the employees and services. The
customers provide authentic feedbacks that help in evaluating the performance of the
employees.
This method of performance appraisal helps Starbucks in increasing the productivity of the
company and increasing customer satisfaction and profitability (Blesch, 2018).
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M5 A RATIONALE FOR THE APPLICATION OF SPECIFIC HRM PRACTICES IN A
WORK RELATED CONTEXT OF STARBUCKS
Starbuck is a service-oriented organisation that is mostly dependent upon its human resources.
The HRM practice for performance appraisal is the most suitable in the context of Starbucks. An
effective performance appraisal technique will help Starbucks to meet the desired quality and
standards for increasing the productivity and growth of the organisation (Devina, 2013).
In its human resource management, Starbucks is really good at adopting new and innovative
performance appraisal techniques and methods. A performance appraisal through customer
card is the best example of human resource management techniques of Starbucks. The
performance appraisal will also help Starbucks to maintain or improve a better relationship with
its employees and customers as well. This will encourage the positive environment and efficient
working in the organisation.
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CONCLUSION
This assignment has provided detailed information about the various aspects of human
resource management within an organisation. In the context of a recognised organisation
Starbucks, the main purposes and functions for acquiring best and skilled talent of HRM have
been discussed. It provided detailed information about the recruitment and selection process.
Recruitment and selection is the most important and critical procedure for selecting the right
candidate for the organisation. The HRM department uses several methods to and applies
various stages for effective recruitment and selection in the organisation. The information
about Various HRM practices and their benefits for the organisations in enhancing the profit
and productivity have been highlighted in this report. The influence of employee relations and
employee legislation on the decision making has been clearly stated. The application of
performance appraisal method to the Starbucks is also illustrated in this assignment that
defines the importance of performance appraisal in an organisation.
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