Starbucks is able to have high quality employees through generous benefits packages and comprehensive training. They were able to achieve this while minimizing the challenges that face other traditional retailers including employee turnover or employee motivation. Starbucks was created in Seattle, Washington in 1985, and by 1987 had expanded to 17 stores with locations in Chicago and Vancouver Canada. The company issued its first IPO in 1992, and expanded in the United States by opening stores in California and Oregon, bringing the total number of stores to 165. Through 1996, the company continued to expand in the United States, and also added additional locations in Canada, Japan and Singapore bringing the total store count to 1,015. The company objective is to “establish Starbucks as the most recognized and respected brand in the world” To achieve this goal, the company plans to continue expanding its retail operations rapidly, growing its specialty operations and selectively pursuing other opportunities to leverage their brand through the introduction of new products and the development of new distribution channels. By the end of 2000, Starbucks had more than 3,500 locations worldwide, servicing more than 12 million customers per week in 17 countries.
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This paper shall examine the organization’s motivational tools and techniques and how effectively it is being used in supporting its employee performance. Various theories shall also be applied such as Maslow’s hierarchy of needs; McGregor’s Theory X / Theory Y; Herzberg’s two-factor theory; Adams’ equity theory; and the goal-setting theory of Locke et al.
Motivation and Teamwork of the Organization
The ultimate goal for all organizations is to create an environment where employees can be self-motivated. Using incentive programs can help achieve this. Obviously salary and other monetary benefits are essential. People must be paid. However, monetary awards do nothing to motivate employees long-term. In fact, some companies are seeing tenured employees resign, citing lack of appreciation as a top reason for leaving. It is essential for lawyers and firms to give employees a reason to stay by creating a work environment where employees can be productive. Using these techniques will also spill out onto clients, strengthening their relationships with firms.
Starbucks changes the behaviors and view points of global consumers to coffee, and this successful example has caught global attention. Nevertheless, it was also a small retail coffee shop in North American initially. Nowadays, it is not only one of the fastest growing corporation, but also an outstanding business model with lower employee turnover rate and higher profit performance. According to the case of Starbucks, it shows that motivation is the key factor of a company policy; in other words, opposite to the principles of classical management which only concerns about produce but ignore workers’ ideas. In recent successful businesses, the appropriate management for labors should include financial and emotional rewards. Besides, motivation and personal satisfaction should be put into first rank. A good relationship between managers and employees could maintain a high quality of performance. Just like Starbucks, to use the correct strategy would lead to a successful path. Another way to empower employees is to give them different job titles. For instance, at Starbucks Coffee Company, all retail workers are called “partners.”
Starbucks cared about its employees and was one of the few companies in the retail sector to provide generous benefits to both full time workers as well as part timers. This ensured that employees remained motivated, and Starbucks had a relatively low employee turnover. However, in the early 2000s, the company faced the challenge of finding and retaining the right number and kind of employees to man its future growth.
According to the Journal of Occupational Medicine, Starbucks spends more on their employees’ healthcare more than they do on their coffee beans. In addition, the organization has developed values that are being practiced by its employees. These values are: 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; and recognize that profitability is essential to our future success.
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Generous benefits and health care coverage-even for part-time workers and for spouses and partners-seem to have instilled a sense of commitment, as Starbucks’s voluntary turnover rate is 120 percent lower than the average quick service restaurant business. Guiding principles like “provide a great work environment” and “treat each other with respect and dignity” seem to have fostered a sense of satisfaction with the culture of the organization. Indeed, a recent survey showed that 82 percent of employees were either “satisfied” or “very satisfied” with the company. In addition, the social activism of the company-Starbucks contributed $15 million to local nonprofits in 2004-seems to have built a sense of trust and ethics among the rank-and-file employees.
Based on this assessment of Starbucks, the organization is relatively effective. The firm has a clearly defined strategy, which is well communicated to both employees and customers. Starbucks is able to leverage and replicate the Starbucks experience in each of its stores. This requires not only buy in from staff, but also reinforcement by supplying front line employees with the training, skills, and incentive needed to action the experience daily. Through alliances with other partners, Starbucks is able to deliver coffee in non-retail operations.
It is important for a retail operation to have high quality employees, since the employee is the direct link to the customer, and subsequently embodies the brand.Starbucks, through generous benefits packages and unique, flexible working environments, is probably faced with lower employee turnover rates than its competitors. The retention of qualified, trained employees is important. The apparently flexible work environment for Starbucks encourages its employees to be innovative, creative, and to take chances. The vision for Starbucks is reinforced throughout the organization. Unlike some firms that have a mission statement framed on a wall at head office, the mission, goals and vision for Starbucks seem to be reinforced at all levels of the organization. This reinforcement leads to support and buy in from employees, who are more likely to hold these or similar values as being important.
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