Operating Plan for the Human Resource Department: Starbucks - Case Study Example

Annual Operating Plan for the Human Resource Department/Division Organization’s Mission & Vision Starbucks’ mission ment is as follows “To inspire and nurture the human spirit- one person, one cup and one neighborhood at a time.” (Starbucks, 2014). The organization’s vision is to create a rich coffee tradition in which people can connect and interact with one another. It achieves this through the atmosphere in its stores, using the right quality of coffee and by treating its employees as partners. Furthermore, Starbucks strives to connect with its consumers consistently. It also endeavors to take responsibility for its neighborhood by considering itself as a part of an entire community. 1.1. Key Business Objectives Starbucks’ key business objective is to maintain leadership of the coffee retail industry in its respective markets. The organization also has an objective that relates to its products. It intends on offering the finest roasted quality coffee through different flavor combinations. Starbucks also aims at staying profitable irrespective of the external and internal challenges that it faces (Leung, 2006). 1.2. Key Strategies One of the key strategies for Starbucks is to compete on the basis of comfort rather than expediency. The latter is what several other beverage and food franchises have selected. Also, the organization focuses on offering the right mix of product, environment and service delivery. It’s commitment to this package has made it stand out. The business believes in continually innovating and creating different products for consumers. Continual expansion in international environments is one thing that has kept the company afloat in hard times, and caused it to thrive in good ones (Moe, 2006). 2. HR Department Vision The organization’s vision for the HR department is to utilize human resources in order to garner competitive advantage. It achieves this by creating a work environment that is positive for its workers. Right schedules, benefits and salaries are the tools to achieve this objective. It works on providing its employees with satisfying jobs such that they can reflect this attitude when dealing with consumers. Therefore, the company believes in establishing long term relationships with its employees by motivating, training them and preparing them to stay with the company. 3. HR Environmental Analysis (SWOT) Strengths: Leadership commitment to HR, partnership culture, generous benefits, HR development through training. Weaknesses: Lacks cultural flexibility, poor management recruitment in new markets, high costs. Threats: Other restaurant chains offering part time benefits, unsustainable wages, awareness of unequal pay among global workers, part time work still susceptible to attrition. Opportunities: Tap into competitor’s talent stream, use local experts to make HR plan in new team, outsource noncore HR activities 3.1. The organization’s HR strengths The company’s top leadership is firmly committed to its human resources. Since the company believes that workers are its key source of competitive advantage, it has gone out of its way to compensate them properly (Larimore, 2012). Furthermore, the organization is willing to forego some of its profit goals in order to meet its human resource costs. The culture in the company is one of partnership. It is for this reason that even part-time employees are entitled to benefits. The firm also values its worker’s contributions and often solicits ideas from them on how to improve. Starbucks spends a lot of time and resources on training its workers irrespective of whether one is a part-time or full-time employee. The company also gets its leaders through internal succession thus ensuring that workers are motivated to stay with them. 3.2. The organization’s HR weaknesses Rapid expansion coupled with high HR costs is minimizing its profitability. The company has to set aside a substantial portion of the budget for employee costs. This sometimes causes them to increase product prices, and may discourage some consumers who already find their products expensive. The company also suffers from inflexibility in terms of aligning its HR vision and mission to local cultures (Guest, 2011). The system of in-house promotions does not work in new areas where it is difficult for find the right managers. 3.3. The organization’s HR opportunities Starbucks should strive to recruit talent from key competitors if in need of managerial positions. Since the company already has a series of international businesses externally, it needs to tap into that resource by outsourcing non core functions. The business should also take advantage of local expertise when creating its HR plan in different parts of the world. 3.4. The organization’s HR threats Some companies like Costco are also offering benefits to part-time employees. This could take away the edge from Starbucks. Some employee benefit may not be sustainable in the long term as they could erode the firm’s profitability. Countries around the world are learning about employee benefits at Starbucks’ headquarters. Therefore, a number of them may keep asking for more compensation if they secure employment with it. Some part time workers may still think of their jobs as temporary, so they may still leave the organization even after its heavy investment in them (Kehoe and Wright, 2013). 4. Annual HR Objectives The overall objective for the company is to ensure that it hires the right people to deliver on its vision. This implies getting the right caliber of employees who share similar values (Peacock, 2011). It also entails meeting organizational demand for workers locally and internationally. 4.1. Specific objectives. • To anticipate future demand for employees (through expansions) and ensure that the company meets these needs. • To determine the level of training that is sufficient to meet the company’s needs. • To optimize manpower in the organization by promoting internally and reducing attrition levels. • To make human resources economically viable by containing costs and making the right strategic decisions. 4.2. Annual HR Strategies 4.2.1 Cost containment through outsourcing non core activities Payroll management is something still being done internally, yet it could be outsourced to other parties that would manage it effectively for Starbucks. Therefore, this will be one of the methods of making the human resource function economical. The company needs to take advantage of its Asian branches when establishing partners for this venture (Scullion and Collings, 2011). 4.2.2 Downsizing As mentioned earlier, the company takes pride in its ability to provide the best benefits and compensation in the retail coffee industry. In order to make this sustainable, the company will need to carry out an audit of its positions, and establish the redundant ones. This process should involve a job analysis. Descriptions and specifications of each job will be done. Positions with too many employees that do not directly contribute to the company mission ought to be eliminated. Instead of firing workers who hold those positions, it is best to encourage them to take early retirement. Also, when others leave, no replacements will be done for their positions. 4.2.3 Training for new stores Starbucks already has a robust training and development system in its older franchises. However, the company often has challenges when doing the same for new employees in fresh markets or branches (Schultz & Gordon, 2011). This will involve making a schedule of potential store openings within the next two years. It can then estimate the number of employees that ought to be hired and how to train them. 4.2.4 Strengthen employee development Employees are more likely to stay with the organization if they feel that they are growing. Therefore, the company will strengthen its development program by offering more managerial training. It will also increase the likelihood of international promotions by making career growth a priority (Cohn et. al., 2005). Hr experts will sit with employees and work on career growth together. Succession planning should not just be seen as an external factor by these individuals. 4.2.5 Use competitor’s employee pools For positions that cannot be filled by internal workers, the company should consider hiring externally from similar companies. This is especially relevant for new markets like China or Russia where it may be difficult to source internally. However, as the firm establishes itself in these markets, it can work towards greater outcomes. This process will involve posting vacancies on newspapers and recruitment websites, attending job fairs and creating posters for distribution to customers (Bartlett and Ghosal, 2002). 5. Implementation 5.1. Constraints – Downsizing may be resisted by many. However, its implementation can be done in a tactful way through early retirement in order to minimize it (Noe et. al., 2013). Some employees may object to outsourcing and external recruitment. They will be told about the contingent nature of external recruitment and its role as a backup plan. Carrying out job analysis may hamper the flow of work in the organization. 5.2. Collaboration – Employees will liaise with management concerning career growth. They will also work hand in hand with them in order to create the job analysis reports. It will be essential to collaborate with top management on choosing positions that can be eliminated. Also identifying the right outsourcing partners will be done in collaboration with Starbucks branches in new, emerging markets. 5.3. Communications –Employees, managers and top executives will receive constant information on the four strategies throughout implementation. Prior to downsizing, all members will be involved in the job analysis phase. Outsourcing will entail plenty of communication between top managers and the HR department as well as the external partners. 6. Measurement and Assessment 6.1. Specific metrics and milestones to assess expected outcomes One of the objectives was to make HR management economically viable. Therefore, annual costs for the entire HR department will be analyzed in order to ensure that they are in tandem with expected outcomes. At least, a 10% decrease in HR expenditure ought to be observed annually. Additionally, the succession planning reports will indicate the number of managers promoted internally. Once again, this number should increase by 10% every year for new stores and be maintained for older ones. In the job analysis, the total number of jobs should also have reduced for the first audit, which will take place 6 months after implementation. 6.2 Metrics to be reported to the organization - Succession planning reports-Management will make a memo for internal circulation. - HR budget reports-To be given to top management. -Job analysis reports-Emails and memos to be sent to the HR department. -HR forecast reports-Emails and memos to be handed to the Human resource department. 7. References Bartlett, C. and Ghosal, S. (2002). Building competitive advantage through people. MIT Sloan Management Review, 43, 23. Cohn, J. M., Khurana, R., & Reeves, L. (2005). Growing Talent as if Your Business Depended on It. (cover story). Harvard Business Review, 83(10), 62-70. Guest, D., 2011. Human resource management and performance: Still searching for some answers. International Journal of Human Resource Management, 17(7), 1171-1189. Kehoe, R. and Wright, P. (2013). The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of Management, 39(2), 366-391. Larimore, R. (2012). The Starbucks guide to world domination. Retrieved from http://www.slate.com/articles/business/when_big_businesses_were_small/2013/10/starbucks_business_strategy_how_ceo_howard_schultz_conquered_the_world.html Leung, C. (2006). Culture club. Canadian Business, 79(20), 115-120. Moe, M. (2006). Star gazer [The Power of Growth - The Magic of Compound [Interest]. In Finding the next starbucks (pp. 26-31). London, England: Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2013). Human resource management (8E ed.). New York, NY: McGraw-Hill/Irin. Peacock, L. (2011). Inside HR: Interview with Sandra Porter, HR director Starbucks. Retrieved from http://www.telegraph.co.uk/finance/jobs/inside-hr/8293569/Inside-HR-Interview-with-Sandra-Porter-HR-director-at-Starbucks.html. Schultz, H., & Gordon, J. (2011). A new blueprint for profitable growth, expanding our global presence - while making each store the heart of local neighborhoods, delivering a sustainable economic model [Tribute]. In Onward (pp. 315- 325). New York, NY: Rodale. Scullion, H. and Collings, D. (2011). Global talent management. NY: Routledge. Starbucks, 2014. Our Starbucks mission statement. Retrieved from http://www.starbucks.com/about-us/company-information/mission-statement Read More