Brewing up People Policies at Starbucks

Lisa M. Coffey Introduction to Business A Case for Critical Thinking Chapter 10 June 19, 2009

Starbucks Coffee Company was founded in 1971 and opened its first store in Seattle s Pike Place market in Seattle Washington. In 1982 Howard Schultz joins Starbucks as the director of retail operations and marketing. In 1992 after 10 years of employment with Starbucks the company has 116 stores at the end of the fiscal year. After a series of promotions, in 2002 after 20 years with the company Starbucks then had 5,886 stores at the end of the fiscal year. Five years later in 2007 at the end of the fiscal year Starbucks had 15,756 stores in operation. A critical element in the success of Starbucks has been the customer service provided by over 172,000 partners (employees) worldwide. With the rapid expansion and opening of so many locations it is critically important for Human Resource Managers to be kept abreast of the expansion time line. These managers must ensure that partners are recruited and trained to provide the best customer service and the present the best product to the customer. This is vital to the success of the organization.

The amazing service, friendly workers and environment is made for customers to come back over and over again to pay $5.00 for a high calorie cup of frappuccino and $2.00 for a donut. Because of this commitment to exceptional customer service Starbucks is able to charge high rates for their products and expect to see those same loyal customers tomorrow. Exceptional customer service is a key element to customer loyalty. We have the most

knowledgeable workforce in the industry. I take great pride, not in the number of stores we have opened, but in the growth and development of our people. After leaving Starbucks you do not feel so bad spending $7.00 on coffee and a doughnut because the people there treated you so nice.

As a partner of Starbucks the total pay package is called Your Special Blend because it is designed just for you. Your blend may included; competitive plan, life insurance, health insurance, prescription drug, dental insurance, vision insurance, disability insurance, bonuses, paid time off, retirement savings plan, stock options, adoption assistance, domestic partner benefits, emergency financial aid, referral service, free coffee, tuition reimbursement and

Lisa M. Coffey Brewing Up People Policies and Starbucks- Chapter 10

many others. Your Special Blend is a unique program that motivates employees in several ways.

Partners are truly partners because they have the option of purchasing company stock at reduced prices to establish ownership in the company. With this ownership comes a renewed sense of pride and dedication which heightens the level of customer service. Starbucks has open forums to encourage open communication. At these forums performance, plans and results are discussed. This is a great opportunity for the voices of the partners to be heard.

The compensation and benefits package is an important aspect in the retention of partners and building loyalty. Filling position in retail is

______________________________________________________________________________ ______________________________________________________________________________ Bonuses and awards are given to those partners when their achievements exemplify the company s values. Starbucks invests in it partners through the extensive training programs.

When viewing the Starbucks web site it was very informative and contained the necessary information a prospective partner would need to know about the company. Using myself as an example it was important for me to understand the company s compliance with ethics and the diversity within the company since I am a black female business owner.

It is important for me to know that Starbucks would embrace our differences. Their diversity policy is clearly outlined on the website and gives vital information. Talking about

Diversity is important. Acting on it is essential this line from the website stands out because many companies talk about diversity practices yet do not enforce their designed plan. Starbucks is committed to creating a place for customers to feel welcome, providing equal opportunities and working with minorities and women owned businesses are among the ways they meet and

Lisa M. Coffey Brewing Up People Policies and Starbucks- Chapter 10

set new goals for inclusive business. The statistics listed on page to diversity.

prove their commitment

Ethics in the workplace are extremely important. The recent meltdown of several large corporations due to unethical practices has been in the headlines all too often in recent months. Business ethics and compliance needs to be addressed and the information on the website equip potential partners with information to gauge their commitment to ethics. Starbucks are members of Ethics & Compliance officer Association (ECOA) and Ethics Resource Center (ERC). Ethics is serious business at Starbucks this program is facilitated by: awareness materials, standards of business conduct, legal compliance, ethics training, and investigations among others.

There are advantages and disadvantages of hiring so many part time employees.

Disadvantagesy y y y Task of recruiting, training and retaining Potential Turn over and the associated costs. Scheduling

Advantages y y y diverse work force Job Sharing Adequate Staffing able to meet staffing requirements

Lisa M. Coffey Brewing Up People Policies and Starbucks- Chapter 10

Fortune Magazine publishes an annual list of the 100 Best Companies to Work For. In 2005 Starbucks was ranked 11th, In 2006 Starbucks was ranked 29th, in 2007 Starbucks was ranked 16th, In 2008 Starbucks was ranked 7th and in 2009 Starbucks was ranked 24th.

Consistently Starbucks partners consist of at least 28% minority and at least 64% women and their annual turnover rate is 14%. The most recent statistics show 31% minority and 66% Women. Even in this economic downturn Starbucks is still a great place to work for part timers seeking benefits. Starbucks commitment to its partners and diversity is evident through its consistent ranking of being on the list of 100 Best Companies to Work For. Starbucks is living up to its commitment to better the lives of its partners.

Lisa M. Coffey Brewing Up People Policies and Starbucks- Chapter 10