MGT 3613- 004 May 1st 2012

The Organization

 Mission Statement, Goal

 Industry Section and Competition
 Size and Location
 History
Pages 3-4

THE STAFFING & TRAINING FUNCTIONS

 Internal & External Recruiting

 Selection
 Training & Development
Pages 5-6

Pedro Hernandez
Peter Aveiga
Woosub Shim THE BENEFITS/PERFORMANCE
APPRAISAL/COMPENSATION FUNCTIONS
Mark Venegas
Nikhil Menon  Company’s Benefits Package
 Performance Appraisal Process
 Compensation Function
Pages 6-8

ANALYZING THE ORGANIZATION

 Best companies to work for
 Recommended changes
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The Organization

Starbucks mission statement is: “To inspire and nurture the human spirit-

one person, one cup and one neighborhood at a time.”

One of the reasons Starbucks has been a success is through its goals that help
shape their company culture. Starbucks, even though their company is spread all
throughout the world, likes to treat their company as if it was just a local shop in the
neighborhood. Their international development strategy changes to different markets
globally addressing the local needs and requirements of each individual market.
Starbucks’ objective seeks to be a global company, making a difference in people live by
leveraging their brand and the coffee experience to foster human connections.
Starbucks competes in the food and beverage industry with a specialty coffee-bar
part of that industry. Starbucks stores offer a choice of regular or decaffeinated coffee
beverages ranging from the classic cup of coffee, lattes, frappuccinos; within the last few
years they have added large variety of pastries. Starbucks also plays smooth jazz as part
of its easy going, nurturing environment.
Their closest competitor is called Second cup, which is a Canadian franchiser.
McDonald’s McCafe can now be included into the conversation due to the fact that
McDonalds is known globally and now they are trying to enter and compete in the coffee
industry. Some others worth mentioning are Green Mountain Coffee Roasters, Coffee
Bean & Tea leaf, Costa coffee, Peet’s, and Caribou Coffee
Starbucks is considered the leader in the coffee bar industry globally. They have
over 11,000 locations and annual revenue of about 6.4 billion dollars. Their initial public
offering of common stock in June 1992 turned to be one of the most successful IPOs of
that year. Overall Starbucks is tied to helping specialty coffee products catch on across
the United States increasing the number of cafes in 1992 from 500 to 10,000 by 1999.
Starbucks, as of 2011, is the world’s #1 specialty coffee retailer. They have more than
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17,000 coffee shops in about 40 different countries. In the United States they have
exactly 12,781 stores open. In 2011, they had a total of 149,000 employees recorded in
their company fiscal yearend report.
Starbucks first store opened in 1971 in Seattle, Washington by three partners:
Jerry Baldwin, Zev Siegl, and Gordon Bowker. In1984, the original owners chose to buy
out the competing coffee company Peet’s. After the acquisition of Peet’s, Starbucks
began to expand quickly and opened its first locations outside of Seattle at Waterfront
Station Vancouver, British Columbia, and Chicago Illinois in 1988. By the year1992, the
company had grown to 165 stores. Currently, Starbucks competes in 55 different
countries. The first Starbucks location outside of North America was located in Tokyo,
Japan. Even though Starbucks has had much success and competes in different
international markets, they still try to continue treating their company as a family run
business. Starbucks chairman Howard Schultz has talked about making sure growth does
not dilute the company’s culture and the common goal of the company’s leadership to act
like a small company. Starbucks is also very involved in environmentally friendly causes.
Starbucks was ranked number 15 on the US Environmental Protection Agency’s list of
the Top 25 Green Power Partners for purchases of renewable energy in 2008.
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Staffing & Training Functions

Starbucks, like most companies, likes to promote from within. They have a
very formal policy when it comes to their labor force; Starbucks gives their
employees plenty of resources such as training and tuition reimbursement to
develop their employees. Starbucks’ mission includes the commitment to treat its
employees with respect and dignity, and to be a force for positive action in the
community in which it does business.
Starbucks uses an online job bank that allows everybody to see the
employment opportunities that are available within Starbucks. For their current
employees, Starbucks has “thepartnercafe.com” which is an online component part
of their career site. This allows employees to apply for higher positions and have a
job hiring manager overseeing the process which gives the employees general help
along the way.
Starbucks has many ways for finding candidates to supply its labor market
when they don’t have the adequate internal candidates or they feel the need for a
fresh look. For some of the lower level positions, Starbucks uses employee referral
and campus recruiting which are most effective when looking for large amounts of
employees without high qualifications. Since this process doesn’t tend to produce
results for some of the top-level employees, Starbucks uses head hunters to fill some
of its more qualified position.
If you are selected to interview with Starbucks, you can expect to have
two to four interviews with a hiring manager, team mates, cross-functional business
partners and other decision makers depending on the position you’re applying for.
Starbucks does not require drug testing or medical exams; there is the autonomy for
a branch location to do drug testing, but that’s within the discretion of the particular
Starbucks which is stated in hiring process.
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Starbucks has a 24 hour 9-block training program. The store manager and
the learning coach, which is an established barista, provide guidance, while the
partner takes on the self-guided modules. 16 hours are dedicated to bar practices,
machine use and drink standards which are led by the learning coach. Once training
is complete they receive a “Barista 100 Certification”.
Starbucks structures their training program in 3 categories. On-the-
job learning is 70%, Learning through other 20%, and Formal learning 10%. There
are a variety of programs emphasized for continual learning in Starbucks such as
their Coffee Master Program, which trains barista to be a coffee and tea authority in
the store. Their use of a blended training approach consists of in-store training,
online portal work and classes, both which have given Starbucks a competitive
advantage when it comes to training their employees.
Starbucks, like many other companies today, likes to promote from within
and to achieve this they have a tuition reimbursement program. Starbucks
employees must be at their position for a continuous length of service as of January
1st each year of the maximum calendar year reimbursement.

less than 36 months $500 per year

Below director level: 36 but less than 60 months $750 per year
60 months or more$1,000 per year

Director level and higher are $500 a year and length of service doesn’t apply, the
reason being is that there are limits that Starbucks can provide for well
compensated employees according to the IRS. The tuition reimbursement plan
covers the cost of tuition, books, class-required supplies and required fees, such as
exam or lab fees, charged to students for the approved courses.
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THE BENEFITS/PERFORMANCE APPRAISAL/COMPENSATION FUNCTIONS

Starbucks benefits include health coverage, income protection, reimbursement
accounts and other programs such as Tuition Reimbursement, an Employee Assistance
Program, Commuter Benefit Program and Adoption Assistance. Starbucks’
comprehensive medical plans include coverage for hospitalization, office visits, lab and
x-rays, emergency care, prescription drugs, and mental health and chemical dependency
treatment. What’s intriguing is that Starbucks has a variety of healthy living information
available to each partner. Partners become eligible for benefits on the first day of the
second month after they have been paid for at least 160 hours by the last Friday of a two
month period. To continue eligibility for benefits coverage
 A partner must be paid a minimum of 240 hours in each calendar quarter. “Paid
hours” are all hours for which a partner has been paid on pay dates that fall
between the first and last day of the quarter.
Employees may cover themselves and their dependents. Eligible dependents include a
spouse, same- or opposite sex domestic partners, and eligible dependent children.
Starbucks provides simple life insurance coverage benefits for eligible salaried and
nonretail hourly partners’ equal to one times annual base pay. Retail hourly partners may
purchase life insurance in flat dollar amounts of $10,000, $25,000 and $50,000. Partners
may also purchase life insurance coverage for their spouse or domestic partner and
dependent children at competitive group rates. These are all paid through payroll
deductions of the employee.
Starbucks has a 401k retirement plan called Future Roast 401k. The employee has
to be over the age 18 and must have been working for Starbucks for 90 days. Partners can
contribute 1% to 75% of their pay each pay period up to the annual IRS dollar limit of
$16,500 or $22,000 for people over 50. Starbucks has two plans of either the “Basic
Match” of 100% on the first 3% of eligible pay, 50% of the next 2% of eligible pay or the
“Enhanced Starbucks Match” which is a 100% match on the first 6% of eligible pay.
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Employees are immediately 100% vested in their entire account balance under the Future
Roast 401k. This includes all employer match, 401k and any rollover account balances.
Starbucks has a very straight forward paid-time-off policy. Salaried and non-retail
hourly employees are eligible for sick pay after 90 days of employment. Full-time
partners accumulate up to 40 hours of sick pay per year and retail hourly partners are not
eligible for sick pay. Starbucks vacation benefits depend on their position and the length
of service. Retail Hourly
Months of Service 0-12 12-36 36-60 60+
Hours of Annual Vac. 0 40 80 120
Salaried and Non-Retail Hourly
Months of Service 0-36 36-60 60-120 120+
Hours of Annual Vac. 80 120 160 200

Starbucks has a Family/Medical leave policy; their requirement is that a partner

must have been continuously employed by Starbucks for at least 90 days and actively
working during that time. If eligible, a partner has up to 12 weeks of Family/Medical
leave in a 12-month period. According to Starbucks, a Family/Medical leave must be
made at least 30 days in advance unless the reason for the leave is sudden and
unexpected. Reasons can be:
• Due to a serious health condition that prevents a partner from working, including
on-the-job injury;
• Due to pregnancy or childbirth;
• To care for a family member with a serious health condition; or
• To stay home to care for a newborn child, newly adopted child or newly placed
foster child.
Starbucks has an Employee Assistance Program which is available currently to all
U.S. partners and their eligible dependents. In this program, it provides short-term
counseling for stress related issues, emotional difficulties, critical incidents in the
workplace, and other personal concerns including financial, legal and daily living (a
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resource on child care, elder care, school information and more). Starbucks also provides
financial assistance to partners who have chosen to adopt. One of the great things about
Starbucks is their adoption assistance programs. Starbucks employees that are eligible for
Starbucks benefits may receive reimbursement of up to $4,000 to help pay for qualified
expenses related to the adoption of an eligible child. What Starbucks also does, in
addition to that, is give the employee two weeks of pay in order to give the employee
time to pick up the child and let them settle in.
Starbucks does performance appraisals every six months and the amount of raise
is determined by the score received by the reviews which is up to 3%. Their purpose of
the appraisals is employee development. If the partner comes up short in any areas, the
partner and the store manager work together to devise an improvement plan. Their
method is based on all the caveats of what Starbucks calls the “Success Profile” for the
position one currently is in. The success profile is like a job description and an employee
can score 1-4 on categories in 10 areas. 1= needs improvement, 2= meets expectation,
3=meets and often exceeds expectations, 4= consistently exceeds expectations. The
success profiles can be found on the Starbucks website or can be provided by the manger
upon request.
The base pay is determined by the completive market pay rate for one’s position,
experience and job reviews. Bonuses are achievable by meeting certain business goals for
eligible positions. The bonuses are based on employee level and base pay. For example, a
barista can receive a $100 bonus per quarter its store reaches its objective.
Starbucks has what they call “Bean Stock” which gives a broad base of partners
the opportunity to own Starbucks stock. To be eligible, partners must be employed by
Starbucks as of May 1 of the fiscal year preceding the grant date and paid for at least 360
hours during the fiscal year. Partners in a director position or above are not eligible for
Bean Stock, but instead are eligible for equity awards under the Key Employee Stock
Plan. Each year, Starbucks Board of Directors considers the company’s performance and
may grant equity awards to eligible partners. The size of the award a partner may receive
depends on three main factors:
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• Starbucks success and profitability for the fiscal year

• A partner’s fiscal-year base wages
• The exercise (or grant) price

Analyzing the Organization

While every company would like to be included in Fortune’s "Best Companies To

Work For", it takes a specific approach to be part of such an assembly. When analyzing
the criteria to be included as one of the "Best ", several factors should be taken into
account. Many of the top companies found in Fortune’s esteemed list have demonstrated
a certain generosity when it comes to their most important asset, their employees. While
some may offer generous salaries, others may offer flexible work schedules. While some
may offer excellent health coverage, others may offer other perks, or benefits. Many of
the companies have more peaceful, laid-back environments where stress diminishes. The
bottom line remains that all of the companies on the list have at least one of the above
mentioned factors incorporated within their company - some even strive to have nearly
all such factors included. The front-runner this year is the internet and computer software
giant, Google (ranked at #4). Google is well known to have a favorable work
environment with many perks awarded to their employees. During these difficult
economic times, Google has maintained its strong presence with tremendous growth year
after year and proving to be one of the most influential companies in the world.
While Starbucks may not be at the top of the list, they certainly made the cut.
Currently listed at 98, Starbucks has a history of generosity towards their employees and
also corporate social responsibility. Several of the benchmarks for being one of the “best
companies to work for” can be found at Starbucks. These include, but are not limited to,
comprehensive benefits packages, health care benefits, liberal leave policies and
employee assistance programs. They are also known for their philanthropic ways and
reaching out to communities domestically and abroad. While many shareholders and
investors have been increasing pressure on executives to lower health care costs – CEO
Howard Schultz said it was completely out of the question. This pressure stems from
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fiscal issues, largely due to problematic economic times. However, recent reports indicate
a significant increase in net income, which came as a surprise to many.
SAS, which is ranked #1 in this list of “best companies” for the second year in a
row, has many perks and benefits that Starbucks could take into consideration for their
own improvement. SAS is a company that stresses health and wellness by providing
employees with a list of incentive programs and to help ensure their workers are in the
best shape mentally, physically, and psychologically. Starbucks also emphasizes health
through its “Thrive Wellness” program which provides their workers with the tools and
information to help them learn the status of their own well-being and give them ways to
improve and maintain that wellness. Starbucks presently does not have the healthy living
incentive programs like SAS does. Employees of SAS can join the “Commit to Quit”
program helping their members to quit smoking and provides prizes such as movie tickets
or gift cards determined by the length of time one has actually quit. They also have a
“RFC Miles” program which rewards their employees based off a mileage program from
walking, running, swimming, and biking (swimming distance provides the most “RFC
miles” since you burn the most calories from this activity).
Whole Foods Market is another top company (ranked at #24) that Starbucks could
model some of their benefit programs after. Starbucks already offers paid time off but
only to those who have worked more than one year (except salaried and non-retail
workers who will receive 80 hours of vacation for their first year of service). As for
Whole Foods, their employees begin to start racking in the PTO based on the number of
hours they work. While both companies similarly get to use PTO hours for vacations,
holidays, and personal days, Whole Foods workers can use the hours accumulated or let
them roll over into the next year if not used while Starbucks PTO hours must be used
during the present year of service.
NetApp, a data-storage firm out of California, ranks #5 amongst these top
companies and contains many beneficial programs and benefits to help entice people to
join their organization. They both have many of the same programs but differ a bit in
some categories. For instance, Starbucks offers tuition reimbursement and so does
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NetApp but it’s the extent that differentiates one as a bit more advantageous. Starbucks
offers up to $1000 of reimbursement per year depending on one’s length of service
(which starts at the one year mark). While NetApp can cover tuition costs up to $5250
per year for accredited coursework for qualified applicants. They also offer a variety of
free professional development resources for their employees as they continue their
careers with the company. Starbucks may be able to improve their ranking by possibly
offering more tuition reimbursement to workers with executive potential and positive
drive helping them to advance up the ladder of the organization. In order for this to be
possible, they may need to look for other sources of revenue or lower top executives
wages to provide these funds to help compete with these higher end companies.
Another company whose benefits are worth mentioning is the toy creator, Mattel
Inc. As far as all the benefits that are given, they are pretty similar to Starbucks in many
ways (medical, dental, disability). One difference that proved interesting was Mattel’s
“school related absence” paid time off program. Full-time employees are allowed 16
hours of paid time off to participate in school-related events. Since Mattel is a company
that makes toys for children, it makes since that they would allow members of the
company put children first. Employees can use these hours to volunteer at school events
even if they are not their own children. Starbucks’ PTO programs allow them one day per
six month period from July 1-January 1 and must be taken with the following six-month
period.
Cisco is another successful and top-ranked (#20) company in America that
continues to bring in more and more revenue every year. Compared to Starbucks, it has a
larger amount of available internships that are up for grabs each year. According to each
of their own websites, Starbucks asks that you check your local university to see if there
are any offered in that area. Cisco’s website has a long list of different departments with
internships that are ready to be applied for by anyone in the midst of graduation from
engineering to marketing to finance. Starbucks might be able to better compete with
companies like Cisco, in terms of “best companies to work for”, by providing more
internships for people on the verge of entering the business world.
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