Strategic Human Resource Management Analysis for Starbucks

This report delves into the strategic human resource management (SHRM) practices of Starbucks, a global coffeehouse company. It examines the factors influencing HRM strategies, including political, economic, and social factors, and assesses the importance of financial resources in shaping these strategies. The report explores how SHRM contributes to achieving Starbucks' strategic goals, using models like the competency model. It analyzes internal and external factors impacting HRM elements, such as competency availability and legal factors. Furthermore, the report outlines Starbucks' HRM strategy, including reward systems, employee performance auditing, and training programs. It also discusses barriers to strategy implementation and how these strategies align with achieving business objectives, such as increasing stakeholder value. The analysis is based on the provided assignment brief, learning outcomes, and relevant SHRM concepts, offering a comprehensive overview of Starbucks' approach to managing its workforce to achieve its strategic goals.

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Strategic Human Resource Management
[Type the document subtitle]
3/28/2020
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Strategic Human Resource Management 1
Contents
Introduction to Starbucks...........................................................................................................2
Factors affecting human resource management strategies.........................................................2
Importance of financial resources in creating human resource management strategy...............3
Contribution of SHRM in achieving strategic goals..................................................................5
Internal and external factors impact on elements of human resource management strategies. .7
Model used by the organization.................................................................................................8
HRM strategy for Starbucks.......................................................................................................9
Barriers to the implementation of strategy.................................................................................9
Achievement of business objectives........................................................................................10
References................................................................................................................................11

Strategic Human Resource Management 2
Introduction to Starbucks
Starbucks is a coffee chain that founded in 1971 in Seattle and reflects fastest growing
companies across the globe. The company expanded very quickly and rapidly in 1990s which
reflect 9000 outlets of Starbucks by 2000s. The goal of the company in 21st century was to
increase the stakeholders value and improve margins by increasing premium coffee sales.
However by end of this objective of the company the strategic issue arises in front of
management regarding development of the premium products. Starbucks was found to be one
of the highest market shares in the cafe market across the globe and has expanded the store
around (starbuckstenthings, 2019).
The major Purpose of this report is to consider human resource department planning to
deliver more efficient agenda for now. The company is always looking to streamline and
strengthening the product portfolio along with considering the budgetary constraints in order
to keep the time cost at control and in order to increase the efficiency of the organisation the
company reflect the role of strategic human resource management and strategy to imply the
rise in performance, manage budgetary constraints, improve cost needs and strengthen the
company growth (Tikson, 2018).
Factors affecting human resource management strategies
The factors that are majorly affecting HRM Strategies include
Political factors
Considering the labour law, taxation policy and environmental law in the nation the company
needs to modify its human resource management strategy as the company is working in large
number of nations and must abide by the political policies. The company is managing the

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workforce diversely therefore with the change political climate the companies issue is with
managing cultural change, talent management which reflect the need of cross-cultural
training and personal development and the structural change which reflect all reduced with
the political barriers (Bailey, 2018).
Economic factors
The aspects like globalisation in the economy is one of the major factor that is impacting HR
in strategy of the company for instance manufacturing and services bases are generally based
on economic factor where cost is the major issue, considering these factors in the nation like
emerging markets are found to be in Brazil, India and China which reflects company to
consider the market potential and expand their base to such countries.
Social factors
The social changes or interaction with the macro environment of factors will reflect major
influence in HRM strategies for Starbucks. Consider social networking, social behaviour,
social relations are considered which are reflecting diversity in workforce for the
organisation, income disparities, demographic alterations I’m changing family structure that
has been impacting organisational HR and strategies.
Importance of financial resources in creating human resource management
strategy
Considering current organisational culture and organisational structure that has been implied
on human resource management strategies by now, it can reflect through the recruitment and
selection policy of the company. The company is working across the globe with large number
of outlets which reflect the company needs to hire a large number of employs every single
day the process of recruitment that has been identified to Starbucks included the use of

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various sessions of coffee tasting an interview with the Applicants. Moreover the company in
order to attract the employees send various gift cards and provide time for the candidates to
response. Other than this in order to retain the existing implies that what policy of Starbucks
is also reflected relevant to the company. The incentive plan that is offered by the company to
the workforce includes healthcare free services and dental care facilities. Moreover additional
benefits along with people who are working more than 20 hours a week are offered. The
company consider semi-annual performance appraisal by increasing the salary based
employee’s performance (Bombiak, 2018).
Other than this the current HRM policies and plans in Starbucks includes employee
development policy which reflect use of learning sessions on training programmes for the
existing employees and enhance employees competencies and skills considering the change
in customer demand. The training program offered by the company includes coffee making
workshops, customer dealing techniques and customer care programmes.
Considering the existing Starbucks HRM policies and practices the relevance of the financial
resources include through reward System. It is important to have efficient financial resources
in order to offer revert to the employs and retain them so as to increase the efficiency of the
organisation. In case an employee is working more than limited hours in a week it may be
increasing the productivity for the organisation and needs to offer them additional benefit
rewards or monetary bonus so as to keep them motivated to perform. As discussed previously
considering remuneration the company is offering appraisal in salary of the employee with
good performance for which financial resources are required by the company. It has been
identified that the company is the need to recruit 200 employees every day across the globe
which reflect the financial resources of labour availability and cost of labour in various
nations. In some of the nation is the cost of labour maybe lower like in case of India, and

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other developing nations. However the financial resources reflect where the cost of labour is
high and company needs to consider this factor in strategic HRM (Tikson, 2018).
Taking into account the government legislation that is impacting financial resources for
Starbucks includes ease of trade which may vary from country to country. For instance legal
frameworks depending on international trade, trade relations with one nation to another,
privatisation policies and liberalisation policies reflect the cross boundary business and act as
a factor for financial resources to impact companies operation (Presson & Eisenbenberger,
2016).
Contribution of SHRM in achieving strategic goals
Contribution of SHRM in achievement of strategic goals by Starbucks it can be said that
various SHRM models could be helpful in analysing the same. One of the popular models of
HRM is competency model which identify the performance content which is necessary for
successful HR strategy. According to this model it defines the knowledge and competencies
that is required for effective practice in an organisation. This model supports the HR
management of the company in professional and career development moreover helping the
organisation to create approaches to cultivate an hour identify HR leaders and HR recruiter is
with high-quality, personal contributors of the organisation and teams which are contributing
the most. This model of a foundation for talent management and helping company to ensure
to resolve most critical issues of individuals in the organisation and HR proficiency in
knowledge necessarily and critical behaviour towards the strategy (Kaynak, 2018).

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Figure 1: (Source: (shrm.org, 2019)
In order to apply this strategy in Starbucks it has been identified or analyse that the company
has affective communication with the applicants, HR expertise is quite high in the
organisation which is reflecting the ethical practice of the company and global and cultural
effectiveness. Considering this model Starbucks HRM strategy needs to reflect relation
management and business acumen to be improved along with the critical evaluation so as to
assess the competencies which are needed and the gap from current personal in the
organisation and the required competencies. This model could be used by Starbucks in order
to ensure all the relevant competencies and expertise in the organisation and sustain with the
same by managing the talent and acquiring the most competent talent in the organisation.
Thus from this SHRM model, Starbucks could able to improve the competency in the
organisation and reach the eventual strategic goals (Sohal, 2008).

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Internal and external factors impact on elements of human resource
management strategies
Internal and external factors that have been influencing HR strategies of Starbucks include
Competency availability
In order to achieve the eventual objective of Starbucks new strategy and enhance the
proficiency of the employs it is important to evaluate the available competency in the
organisation and the required skills and competencies which may fulfil the gap and make the
strategy of organisation achievable.
Workforce profiles
Profile of the workforce reflects the need of additional competencies, the skills that will
affect the profile and must consider while recruiting particular level of staff. For instance one
of the recommendation for Starbucks as HRM policy include designing the rewarding and
incentive packages for the employees based on the work force profile and other demographic
factors so that to benefit each individual based on their needs
Legal factors
These are the external factors that are influencing the HRM policies at the most. This may
include further factors like customer rights, transparency of information employment terms
which may differ from one nation to another as companies working across the globe and
impact the security, Support to implementation of changes for top management
Technological factors
Technology is one of the causes for cost-effectiveness of the company, Starbucks is looking
for a strategy that may balance the efficiency of the group along with the cost benefit or cost

Strategic Human Resource Management 8
management. Therefore it is important for the company to invest in technology and include
these factors as part of the HRM strategy (Lima & Sliva, 2018).
Model used by the organization
Elements of human resource management includes various HR framework including talent
planning, reports and benefits, business goals, organisation design, learning and development,
people and performance, employee engagement, values and culture, selection and retention,
and performance management. These elements need to be maintained by HR of the
organisation so as to make the performance affective. Other than this HR cycle, HR
communication, recruitment and selection, evaluation of employees, motivation and reports,
team building, leadership strategy and styles, business cultures, company stakeholders,
company structure or some other elements which are building an affective HRM of the
organisation (Fang & Gerhart, 2014).
One such model includes human resource value chain. This is one of the best known models
of human resource offered by Richardson, which reflect three stages for HR value chain that
is efficiency, effectiveness and impact. From first stage, Starbucks will be able to consider
activities and process of HRM which include recruitment and selection, workforce planning,
talent management, and training provided to the organisation and development of
organisation design. While considering these activities, the outcome of the HRM will be
analysed on the basis of effectiveness factor. This stage will include employee retention,
employee presence, employee involvement, performance by employees and employer
engagement. The third stage reflects impact, which contributes towards the organisational
objectives. This will include market value of the company, productivity, turnover, customer
satisfaction and market value of the organisation which reflect if the developed HRM process
is out coming towards the eventual objective of the organisation (Recker, 2013).

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HRM strategy for Starbucks
Human resource strategy for Starbucks include
Reward and incentive plan
Considering the demographic factors and analysing individual needs to be considered as part
of incentive plan or package for an employee. For some employees it meant imply the use of
monetary benefits for awards to attract them or retain them, on the other hand nonmonetary
benefits could also helpful for some of the employs considering the age factor, experience
and needs of the individual (Fang & Gerhart, 2014).
Employee performance Auditing
This reflect the actual extra cost for the company, since kindly auditing will reflect the non-
performing individuals or areas which are not able to perform well so as to find the scope of
improvement or taking affective decision by the company so as to keep the cost and control
along with the increase productivity.
Training and development
HR and strategy for Starbucks include timely training programmes for the individuals and
development of competencies and offer growth to every individual. Through the strategy the
company will be able to provide training sessions to the employees so as to improve the
productivity in each section specially the production or operational employees (Presson &
Eisenbenberger, 2016).
Barriers to the implementation of strategy
The key barriers in implementation include

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 Workforce diversity and large number of employees –Since large number of
employees are associated with the company, the implementation of the policy become
difficult, for instance implementation of incentive plan discussed above.
 Resource constraints – The Company is looking to consider budget constraints, which
could be the barrier in implementing taring and development strategy offered above
(Torraco, 2016).
Achievement of business objectives
The objective of Starbucks HRM strategy is to increase performance of the company which
reflect development of human resource management strategy. Due to high in sugar drinks that
is popular for the brand, it has been identified that this is one of the major issues which may
impact world health organisation legislation against the cafe. Considering low sugary drinks
the company initiated with various non-coffee beverages in order to expand the product
portfolio like snakes, juices and more water it rings. However the competition in the cafe
market increases and the major competitors included Cafe coffee Day, Costa coffee and
Dunkin donuts. Through this HRM strategy the productivity for the company will be
increased along with cost management for product portfolio increase (medium, 2019)

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References
Bailey, C., 2018. Strategic human resource management. Oxford University Press.
Bombiak, E., 2018. Green Human Resource Management as a Tool for the Sustainable
Development of Enterprises: Polish Young Company Experience. Sustainability, 10(6),
p.1739.
Fang, M. & Gerhart, B., 2014. Pay for (individual) performance: Issues, claims, evidence and
the role of sorting effects. Human Resource Management Review, p.41.
Kaynak, H., 2018. The role of human resource-related quality management practices in new
product development: A dynamic capability perspective. International Journal of Operations
& Production Management, 38(1), p.43.
Lima, C. & Sliva, M., 2018. The role of Information systems in human resources
management. Management of Information Systems, pp.113-26.
medium, 2019. how-did-starbucks-build-its-sustainable-competitive-advantage. [Online]
Available at: https://medium.com/@shahmm/how-did-starbucks-build-its-sustainable-
competitive-advantage-79ff5eedb5ff.
Presson, W.D. & Eisenbenberger, R., 2016. Optimizing perceived organizational support to
enhance employee engagement. Society for Human Resource Management and Society for
Industrial and Organizational Psychology, pp.2-22.
Recker, J., 2013. The Effect of Strategic Human Resource Management on Organizational
Performance: The Mediating Role of High &Performance Human Resource Practices.
Human Resource Management, 52(6), pp.899-921.