Strategic Human Resource Management Report: Starbucks Analysis

This report provides an analysis of Strategic Human Resource Management (SHRM) with a focus on the multinational coffeehouse chain, Starbucks. Part 1 introduces the concept of SHRM, emphasizing the alignment of HR practices with business strategy to achieve organizational objectives. It explores the roles of SHRM, including aligning HRM with business strategy, enhancing employee engagement, and increasing HR effectiveness. The report uses the balanced scorecard to evaluate Starbucks' performance from consumer, internal business, learning and growth, and financial perspectives. Part 2 delves into the functional aspects of HRM applicable to Starbucks employees and identifies strategic HR policies the company can adopt. It examines various HR strategies such as human capital management, talent management, and knowledge management, highlighting their relationship to wider management strategies, organizational capabilities, and performance. The report concludes by emphasizing the value of SHRM in achieving strategic business objectives.

Strategic Human Resource
Management

Table of Contents
PART1.............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of context and role of strategic human resource management and relation of SHRM
strategies to wider management strategies.............................................................................1
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................8
PART 2............................................................................................................................................9
INTRODUCTION...........................................................................................................................9
MAIN BODY...................................................................................................................................9
Functional aspects of human resource management applicable to employees of Starbucks. 9
Strategic human resource management policies which can be adopted by Starbucks in order to
handle various business situations........................................................................................12
CONCLUSION..............................................................................................................................14
References......................................................................................................................................15

PART1
INTRODUCTION
Human resources are one of the most valuable assets of a business firm and help the
company gain competitive advantage in the workplace. This increases importance of human
resource management and business firms aim to ensure that HRM policies and practices assist in
completion of strategic business objectives. The idea of strategic human resource management
includes alignment of HRM practices and policies with business strategy of the company in order
to ensure timely attainment of business strategy. The business firm selected for this report is
multinational Coffeehouse chain Starbucks which is headquartered in Seattle, Washington. The
company has expanded to 83 countries and employees 349, 000 workers all over the globe. The
present report is divided in two Parts. The first part of the report analysis the role of Strategic
HRM and relation of HRM to wider management strategies. The second part of the report
identifies functional aspects of strategic human resource management applicable to Starbucks
employees along with strategic human resource policies that the company needs to adopt.
MAIN BODY
Analysis of context and role of strategic human resource management and relation of SHRM
strategies to wider management strategies
The concept of strategic human resource management revolves around development and
implementation of HR programs which assist in elimination of progress barriers and directly
support attainment of strategic objectives of the company. Strategic human resource management
is future driven activity as it aims to attain future objectives of the company through current
practices. In context of Starbucks the aim of strategic human resource management is to prepare
the existing workforce to attain business objectives and implement HR policies which ensure
effective completion of the business strategy which provides future direction for the company
(Analoui, F. ed., 2017).
The purpose of strategic human resource management is to enhance innovation, flexibility,
organisational performance and create culture effective in attaining organisational objectives. In
addition to this attainment of competitive advantage in the industry is another aim of strategic
human resource management. Strategic human resource management conducts various roles in
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order to attain strategic goals and secure beneficial position in the industry through skilled and
organised workforce. Roles of strategic human resource management are provided below:
Alignment of HRM with business strategy: The primary role of strategic human
resource management is to align human resource management strategy with overall strategic
direction of the company. Various HR practices such as employee remuneration, employee
reward , recruitment and selection need to be aligned with each other and the business strategy of
the company so that the human resources of the company are utilised to contribute to the
attainment of long-term business goals of the company (Chakraborty and Biswas, 2019). In
relation to the American coffeehouse chain Starbucks, this Strategic Human Resource
management role includes alignment of HR practices to attain long term objectives of the
company which include expansion to better locations, increase in community outreach programs,
extension of CSR initiatives and enhance consumer service. The role of strategic human resource
management needs to be alignment off HR activities and practices with long term goals of the
company to facilitate timely completion of each objective.
Employee Engagement: Another role of strategic human resource management is to
create an environment which enhances employee participation and engagement in various
organisational activities. This role of strategic human resource management not only facilitates
employee involvement in various HR practices but also helps the company ensure that high
employee contribution in attainment of business strategy. The HR department needs to build an
environment which each employee gains maximum satisfaction and believe their employer
values their individual contributions. In context of Starbucks this role of strategic human
resource management needs to focus on encouraging employees to participate in community
outreach programs and create a workplace environment in which each employee willingly
participates in training and CSR activities organised by the company. This will help the firm long
term business objectives of the company.
Enhance HR effectiveness: In order to ensure that the company gains desired results it is
important to look and review HR practices, identify flaws and work towards increasing HR
effectiveness. This can include various practices such as building effective communication
networks, increasing employee motivation, create collective vision for the workforce and many
others. The activities or practices initiated to enhance HR activities range widely but the aim is
reduce flaws in human resource management in order to increase HR effectiveness (Kaufman
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2019). This helps the company attain organisational vision and gain competitive advantage in
this industry. In case of the respective firm building effective communication channel needs to
be the main practice to increase HR practice. The justification for this suggestion is that
Starbucks is highly employee centric business, the end product sold to the consumer involves
low contribution from machinery and is highly dependent on skills of the workforce in coffer
products preparation and consumer service to gain consumers. The company will be able to
attain business objectives such as expansion to lucrative locations, improvement of consumer
service and effective completion of CSR activities. This is because each employee will be aware
of their roles, responsibilities and enhance knowledge sharing between various employees of the
company working all over the globe.
The balanced scorecard is an important part of the strategic framework of an enterprise.
Business management is complex area as business performance can be measured from various
perspectives. The balanced scorecard helps business firms evaluate business performance from
four perspectives critical to the success of the company. The four perspectives are consumer
perspective, financial perspective, internal perspective, innovation and growth perspective (Kooij
and Boon, 2018). By limiting business performance indicators the company can focus on
important areas of the company and avoid information overload. In addition to this managers are
able to view various areas of the company at the same time which ensures that policies aimed at
improving performance in one area does not hinder progress in other areas. In context of
strategic human resource management, this tool can be used to help HR managers Starbucks
evaluate business performance from various perspective in order to gain a holistic view of the
current position and future situation of the company. The application of balanced scorecard to
Starbucks is provided below:
Consumer’s perspective
Objective: Increasing consumer retention and attracting fitness focused consumers by
introducing diet friendly products.
Target: Acquiring health conscious consumers in domestic and foreign market.
Initiative: To prepare products with healthy ingredients and offer discounts to retain fitness
conscious consumer base.
Internal business perspective
Objective: To enhance quality of consumer services and efficiency at each outlet.
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Target: To increase effective consumer services and employee output of each branch.
Measures: Incorporation of latest communication technology to ensure coordination between
staff members at each outlet. This will enhance efficiency and assist in providing effective
consumer service to each consumer.
Initiative: Build digital communication network at each branch to ensure each consumer
gains effective consumer service and train consumer to use digital technology so brancj output is
increased.
Learning and growth prespective
Objective: To integrate digital communication technology at various outlets and develop
health based product line through R&D.
Target: Integration of digital technology and introduction of health based product line with
the help of R&D.
Measures: Build relationship with health conscious suppliers and invest in digital technology
at every Starbucks outlet.
Initiative: Employee training programs to familiarise them with preparation of health based
products and usage of digital communication networks.
Financial perspective
Objective: To increase profits from previous year and ensure profit generation from health
based product lines.
Target: To increase profit rate by 20% and gain 20% return on investment on health based
product line.
Measures: To improve marketing mix for ROI on new product line and closely analyse
financial investment and find suitable funding sources.
Initiatives: To focus on reducing cost in order to increase profit Margin.
Relation between wider management strategies, organisational capabilities, performance
HRM strategies
Human resource management straggles adopted by business firms are related to wider
management strategies, affect organisational performance and contribute to increase in
organisational capabilities (Korff, Biemann and Voelpel, 2017). Several human resource
management strategies and their relation to wider management strategies, performance and
organisational capabilities are described below:
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Human Capital management: This HR strategy revolves around ensuring employees
have competencies required to gain organisational success. Workforce acquisition, workforce
management and workforce optimisation are three sets under which this HR strategy is
implemented. The adoption of this HR strategy helps business firms obtain, analyse and report
on data which informs direction of value adding people management, strategic investment and
operational decision making (Lanza and Simone, 2020).
The implementation of this HR strategy plays an important role in wider management
strategy of the company as it provides direction for gaining, retaining and developing value
adding people to the enterprise. In context of Starbucks, this strategy assists in ensuring creation
and retention of value adding people in the company so that strategies related to various business
areas are implemented effectively. The task of workforce optimisation ensures that each
employee is highly skilled which increases organisational capabilities and performance.
Talent management: The concept of talent management revolves around attracting and
retaining talented workers. This assists in creating highly skilled workforce and ensuring
workforce development for current and future human resource requirements of the company.
This HR strategy is related to wider management strategies as it helps in creation of skilled
workforce which stays with the company for longer time period. This increases organisational
performance and ensures recruitment of highly capable employees for a long time period. In
context of companywide management strategies, talent management strategy is essential for
completion of various business strategies as it creates a committed workforce. Talented
management strategy ensures the creation of skilled and committed workforce which facilitates
completion of other organisational wide management activities. In relation to the American
multinational coffeehouse chain Starbucks adoption the HR strategy of talent management will
help the company create a skilled workforce on a global scale to ensure smooth completion of
wider management strategies, enhancement in organisational performance and development of
organisational capabilities.
Knowledge management: The process which defines, systematizes, sustains and distributes
knowledge and experience within the employees of the firm is defined as knowledge
management. This HR strategy aims to create, acquire, capture, share and utilize knowledge to
enhance performance of the company (Lee Jia Lin, Hasliza and Ramayah, 2018). This HR
strategy is highly beneficial for business firm as it provides every employee expertise present in
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the firm so that they are able to make better decisions and complete daily tasks more efficiently.
This HR strategy is essential for effortless achievement of wider management strategies as it
helps in accumulation, storage and distribution of expertise required for attainment of various
management goals. In addition to better decision making, with the help of this HR strategy helps
the company increase employee efficiency, build and store organisational knowledge which is
used to face various challenges in the path of success (Stewart and Brown, 2019).
In context of Starbucks, implementation of this HR strategy will help the company generate
and store expertise and information gained from global operations of the company which are
used to face growth challenges. In addition to this expertise will be used by employees all over
the globe to complete wider management objectives effectively. Knowledge management assists
in capture and sustainment of knowledge which increase organisational performance and
capabilities.
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CONCLUSION
From the above report it is concluded that strategic human resource management is valuable
to business firms as it plays an essential role in attainment of strategic business objective. In
addition to various roles strategic human resource management such as employee engagement,
alignment of HRM with business strategy, enhancement of HR effectiveness assist in attainment
of long term business objective and help the company move towards their future business
directions. In addition to the balanced scorecard is an effective tool which provides HR manger a
holistic view of various business perspective is which builds strategic human resource
management strategy that helps the firm in attaining various objectives of the company
simultaneously. HR strategies adopted by business firm play an important role in increasing
organisational performance, building organisational capabilities and are related to wider
management strategies of the company.
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REFRENCES
Books and Journals
Analoui, F. ed., 2017. The changing patterns of human resource management. Routledge.
Chakraborty, D. and Biswas, W., 2019. Evaluating the impact of human resource planning
programs in addressing the strategic goal of the firm. Journal of advances in
management research.
Kaufman, B. E., 2019. Managing the human factor. Cornell University Press.
Kooij, D. T. and Boon, C., 2018. Perceptions of HR practices, person–organisation fit, and
affective commitment: The moderating role of career stage. Human Resource
management journal, 28(1). pp.61-75.
Korff, J., Biemann, T. and Voelpel, S. C., 2017. Human resource management systems and work
attitudes: The mediating role of future time perspective. Journal of Organizational
Behavior, 38(1). pp.45-67.
Lanza, A. and Simone, G., 2020. Strategic Human Capital: Creating a Sustainable Competitive
Advantage. Edward Elgar Publishing.
Lee Jia Lin, J., Hasliza, H. and Ramayah, T., 2018. Learning Orientation as an Antecedent
Towards Strategic Human Capital. International Academic Journal of Business
Management, pp.124-136.
Stewart, G. L. and Brown, K. G., 2019. Human resource management. John Wiley & Sons.
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PART 2
INTRODUCTION
Starbucks is a multinational coffeehouse chain headquartered in Seattle Washington. The
company was founded in the year 1971 and currently has a workforce of 349,000 employees
recruited at 32,660 outlets of the company in 83 nations. The reason behind swift growth of the
company since it’s inception in the year 1971 is presence of skilled workforce. Being part of the
hospitality industry the consumer service provided by the staff members of the company is
equally important as the coffer beverages and food items offered by the firm in increasing sales
of the company. The second part of this report identifies functional aspects of human resource
management related to Starbucks. In addition to this strategies human resource policies which
can be adopted by Starbucks are also described in the second section of this report.
MAIN BODY
Functional aspects of human resource management applicable to employees of Starbucks
A department of Human Resources is responsible for developing management processes
to help workers of organisation. Many important areas such as accounting, health care,
professionalism of employees and recruiting are still emerging. An employee has to consider
their Department's functional areas so that they can support workers when necessary (Chang,
2020). This would help towards to draw up strategies to expand the activities of human resources
so that they can have a meaningful effect on the rest of the organisation. In regards to Starbucks,
as the firm is operating its business activities globally the managers of the firm have to dedicate
valuable efforts of individual working in the company towards correct direction. Functional
aspects of strategic human resource management taken in Starbucks are as follows;
Recruiting and staffing employees: It is the most common function of HR department of
various given firms. In regards to Starbucks, employment is normally the responsibility of the
recruitment manager but human resources generally choose appropriate applicants for the
recruitment manager by job application. A monitoring system for applicants uses keywords to
help employees track applications that follow the requirements for job listing. When appropriate
applicants are found, they are referred for further review to the hiring manager. When the
recruiting officer decides who to meet, he or she can call staff for an interview.
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Employee benefits: A manager of a corporate firm have to keep in mind respective
personal interest of staff or employees working in the operational firm, therefore they are
provided with reasonable benefits with a motive to conduct effective operational tasks in the
organisational firm (Chen and et. al., 2020). In context to chosen firm, Employee benefits
include life plans, pensions, flexible health care spending accounts, holidays, maternity leave,
parental leave and other perks offered by the employer. An employer attracts and retains talent
with a decent rewards package. HR needs to recognise the various kinds of health compensation
packages, which insurance companies provide the greatest coverage at the same rate, as well as
checking that they are federally legal. The staff attends open enrolment training meetings to
support clients, as well as updating their schedules for the next year.
Employee compensation: Giving appreciation for hard and dedicated work plays an
important role to ensure positive and healthy working environment in the workforce. In relation
to given firm, HR seeks to figure the existing fair pay for a job when it comes to wages when the
organisation can afford to provide that number and what advantages instead of resources are
given if it is unable to fulfil the competitive salary. It is achieved throughout the context and the
pay system is maintained in the organisation by compiling an incentive plan which can be given
to an individual.
Employee and labour relations: With a believe that good employee and labour relations
in an organisational structure contributes towards extracting better efficiency of work being
produced from investment of valuable resources in the business firm (Gargam, 2020). In context
to chosen company, pure dedications on forming better and effective relations are being stressed
upon managers of the firm. This ultimately helps firm to prove to its maximum productivity in
the given region and excel towards its glory of success in the given marketplace.
Human resource compliance: This functional aspect of strategic human resource
management helps business firms ensure adherence for various legislations applicable to human
resource of the company. Human resource compliance is the procedure of creation of policies
and procedures to ensure that business practices showcase full knowledge of applicable of rules
and regulations while focusing on human capital objectives of the company. In context of the
American coffeehouse chain Starbucks this functional aspect of strategic human resource
management helps the company ensure that every international and national law which is
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applicable to human capital of the company is followed effectively. The company is able to their
business operations in a lawful manner as a result of this strategic human resource aspect.
Organisational structure: The organisational structure is a deciding factor in success of
the company. Business firms adopt organisational structure which ensures optimal utilisation of
the human capital and helps the company attain business objectives effectively. Organisational
structure is the system which directs work flow and ways in which daily activities are completed
in a business firm (Hipsher, 2020). Adoption of a suitable organisational structure helps the
company attain business objectives effectively while adoption of wrong organisational structure
affects employee performance, organisational communication and change management process.
This hinders the growth and profitability of the company. In relation to the American
coffeehouse chain Starbucks follows the matrix organisational structure which is combination of
main features of different types of organisational structures. This is because functional groups,
geographic divisions and product based lines intersect with each other to ensure smooth
functioning of the company all over the globe. This organisational structure is highly beneficial
for the company as it retains expertise and ensures rapid flow of information between various
groups and teams.
Human resource information and payroll: This strategic Human resource
management functional aspect deals with upkeep of employee information and timely delivery of
employee payroll. This includes maintaining data related to employee absenteeism, leave
applications, usage of sick leaves, overtime done by employees and other factors which
determine the monthly remuneration given to employee. It is the duty of business firms to
maintain information about employees including payroll record and informing employees about
their wages including tax cuts, leave usage, absents reduction and other factors related to
employee remuneration. This functional aspect also deals with the process of calculation of
wages after taxation or bonus addition. Data related to payroll of each employee needs to be
maintained which is another essential part of Human resource information and Payroll (Hsiang
and Rayz, 2020). In context of Starbucks the company has maintained an effective information
system to store and update information related to employee payroll and completing various tasks
such as calculating wages of each employee. This helps the company gain information on each
employee in case of any legal action, termination, promotion or other HR activity which requires
documentation which includes employee information.
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Employee training and development: This functional aspect of strategic human resource
management helps business firms create well trained workforce which has the skills for current
and future requirements of the company. The aim of employee training and development is to
provide required training to helps employees develop skills required to attain business objectives
of the company and help employees expand their role in the company in order to advance in their
career (Lutfie and Marcelino, 2020). This strategic HRM functional aspect in building a
workforce which not only assists in attainment of long-term business goals but also adapts skills
according to changes in the external environment of thee company. In context of Starbucks the
company provides training on daily activities of the outlets such as coffee preparation to newly
recruited staff and initial training to employees joining at other positions in order to ensure
accomplishment of their job roles in an effective manner. In addition to this employees at
Starbucks also gain development opportunities to expand their roles and move upwards in their
career while working for the company.
Strategic human resource management policies which can be adopted by Starbucks in order to
handle various business situations
Strategic Human resource management policies refer to the guidelines and procedures
implemented by the business firms which are used as reference by managers to direct and
supervise the staff so that they contribute in attainment of strategic objectives of the company.
Creation of Human resource management policies is essential as not only assists managers in
directing and supervising employees but also provides employees information about ways to
enhance their performance or gain career advancement. Human sources polices adopted by
business firms need to be suitable for organisational culture in order to gain the best results and
need to be created on the basis of strategic objectives of the company. Adoption of effective
strategic human resource management policies can help business firms manage various
conditions effectively in order to gain desired outcomes. Several strategic human resource
management policies which can be adopted by Starbucks are provided below:
Equal Opportunities Policy: This strategic Human resource management policy focuses
on creating a business environment where talented and skilled employees are evaluated on the
basis of their capabilities and not any other factor such as age, gender, class, family background
(Reyes Uribe and González Flores, 2021). This helps business firms create equal workplace
where every employee is given equal opportunity for learning and growth. This ensures that only
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the most capable employees gain senior positions in the company and everyone is given job roles
according to their competencies. This Strategic Human resource management policy is relevant
for Starbucks and adoption of this policy is highly beneficial for the company. This is because
expansion to lucrative locations is one of the business objectives of the company and this HR
policy is helpful in creating workplace which facilitates advancements of talented employees to
high ranking positions in foreign nations. In addition to this it also ensures removal of
discrimination doing foreign expansion of the company so that skilled workforce is created in
every international region in which Starbucks operates.
Job evaluation, wages and employee incentive policies: This strategic Human resource
management policy focuses on creation of suitable and fair job evaluation system for each role in
the company. In addition to this the structure of employee remuneration and incentives is also
part of this strategic human resource management policy. Construction of an effective job
evaluation, wages and incentives policy ensures fair remuneration is given to employees and
increases employee motivation to enhance their performance (Wassell and Bouchard, 2020). In
addition to this, fair job evaluation techniques help the company attract suitable employees for
each roles which have right soft and hard skills required to accomplish the duties of the job role.
In context of Starbucks the usage of this Strategic human resource management policy is
essential for tackling market decline. This is because not only this policy helps attract highly
skilled and suitable employed for each role though fair remuneration and job evaluation. Apart
from this employee retention is ensured because of incentive policy of the firm. This ensures that
the firm gains competitive advantage through talented and committed workforce during market
decline.
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CONCLUSION
From the above report it is concluded that strategic human resource management is an
important activity for business firms. There are various functional aspects of strategic human
resources which hep the company manage and develop human capital and complete various
activities related to human resources. Human resource compliance, employee reward human
resource information and payroll are some examples of functional aspects of strategic human
resource management which help business firm sustain skilled workforce to attain business
goals.
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References
Books and Journals
Chang, W.J., 2020. Experiential marketing, brand image and brand loyalty: a case study of
Starbucks. British Food Journal.
Chen, L., Zheng, B., Liu, H. and Deng, M., 2020. Three-way interaction effect of social media
usage, perceived task interdependence and perceived participative leadership on
employee creativity. Internet Research.
Gargam, F., 2020. Unlikely champions: how underdogs create strategic advantages. Journal of
Small Business & Entrepreneurship, 32(5), pp.401-429.
Hipsher, S., 2020. The International Private Sectors’ Role in Wealth Creation: Strategy,
Productivity, and Innovation. In Wealth Creation Approach to Reducing Global
Poverty (pp. 139-164). Palgrave Macmillan, Singapore.
Hsiang, C.Y. and Rayz, J.T., 2020. Predicting popular contributors in innovation crowds: the
case of My Starbucks Ideas. Information Technology & People.
Lutfie, H. and Marcelino, D., 2020, October. Consumer Trust to Buy Green Product:
Investigation of Green Perceived Value with Green Satisfaction Mediation. In 2020 8th
International Conference on Cyber and IT Service Management (CITSM) (pp. 1-6).
IEEE.
Reyes Uribe, A.C. and González Flores, S.C., 2021. Furthering Productive Aging through
Public-Private Sector Alliances: The Case of the Mexican Government and Starbucks
Company. Journal of Aging & Social Policy, pp.1-11.
Wassell, S. and Bouchard, M., 2020. Rebooting strategic human resource management:
integrating technology to drive talent management. International Journal of Human
Resources Development and Management, 20(2), pp.93-113.
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