Question: PERKING UP THE PERFECT BLEND AT STARBUCKS
On the fast track toward global growth, the Starbucks chain transformed the ordinary cup of coffee into a wide variety of taste choices for millions of coffee lovers. Along the way, the company's astonishing success encouraged competitors to join the fray. To stay on top, Starbucks managers had to ensure that their stores provided the best service along with the best coffee- which meant attracting, training, and compensating a diverse and dedicated workforce. Guided by the company mission statement, Howard Schultz and his managers designed a variety of human resources programs to attract and retain motivated employees. Called "Your Special Blend" to emphasize its adaptability to each employee's needs, the Starbucks compensation package includes an unusual array of benefits for frontline employees in the food service industry. The options include insurance (medical, prescription drug, dental, vision, life, and disability), adoption assistance, tuition reimbursement, emergency financial aid, domestic partner benefits, and Future Roast, a 401(k) savings plan. Particularly unusual is the fact that employees don't have to work a full-time schedule to qualify for benefits; all employees who work at least 240 hours every quarter (roughly half-time) are eligible. Perhaps the most innovative benefit brewed up by management was its Bean Stock, a program offering stock options to all nonexecutive employees, even those who work as little 360 hours a year.
For those who want to enlarge their financial stake in Starbucks even further, the company offers a stock investment plan that lets employees buy company stock at a discount. Owning a piece of the company motivates employees to take customer service to an even higher level of excellence. "We do everything we possibly can to get our customers to come back," says Schultz. To help employees balance their work and family obligations-another priority for Starbucks-the human resources department designed a comprehensive work-life program featuring flexible work schedules, access to employee assistance specialists, and referrals for child-care and elder-care support. The company also encourages employees to become involved in their local communities, and it honors employees whose achievements have exemplified the company's values. Finally, to encourage open communication and employee feedback, good or bad, management holds open forums in which company performance, results, and plans are openly discussed. Employees are encouraged to share ideas. "There is a tremendous amount of sharing in the company," notes Schultz. "It makes everybody think like an owner." While most CEOs say that people are their most important asset, Starbucks lives that idea every day by giving people a stake in the outcome and treating them with respect and dignity. In all, putting employees first has helped Starbucks expand by attracting an energetic, committed workforce and keeping annual employee turnover far below the industry average. With the workforce now around 160,000 employees and growth opportunities harder to come by, that care and attention will be more important than ever before.
1. Why do human resources managers at Starbucks need to be kept informed about any changes in the number and timing of new store openings planned for the coming year?
2. Why does Starbucks offer benefits to its part-time labor force?
3. How does Starbucks's generous employee-benefits program motivate its employees?