Issues in Human Resource Management of Costa Coffee - Assignment Example

Issues in Human Resource Management Introduction The organisation chosen for analysis is Costa Coffee, whichis the leading coffee franchise in the United Kingdom with over 1,375 outlets around the country. The organisation also owns and operates vending machines around public facilities such as airports and hospitals; it thus has a unique model that differentiates it from other coffee shops and franchises (Costa Coffee, 2014b). This business’s success is not in doubt especially because it is the second largest coffee franchise in the world; however, much has to be done in order to ensure sustainable success. Furthermore, since another restaurant franchise has beaten Costa Coffee, it is essential to identify some practices that could cause the organisation to overtake Starbuck’s position in the future. Human resource management might be the solution to these strategies issues, but it is critical to determine whether the characteristics in the organisation will benefit from these practices. Three areas of focus have been selected for the report, and they include: why training leads to better outcomes, employee engagement, commitment, and negative behaviour. It is imperative to understand what training, employee engagement and negative behaviour mean in relation to the organisation. Thereafter, some studies and researches will be used to examine whether these HR strategies are helpful to institutions or not. Finally, recommendations will be made on the way forward for Costa Coffee. 1) Why training leads to better outcomes Costa Coffee operates in a service industry or the hospitality sector, which relies on the successful provision of services by staff members (Costa Coffee, 2014). Consumers often assess the quality of a restaurant by the experience they encounter in those facilities, so firms that grasp this concept are likely to go out of their way to exceed expectations. In the hospitality industry, it is particularly challenging to be superior based solely on tangible elements of consumer encounters since competitors can do the same. However, maintaining personal interactions with buyers can go a long in giving a company an edge over its competitors; it is at this level that companies should consider training as part of their strategy for enhancing quality of service (Pollit, 2006). Literature identifies several justifications for the use of training in the service sector generally, and restaurant businesses in particular. Companies that train their employees tend to be perceived as more professional than those who do not as this manifests in their daily interactions. Furthermore, training is a mechanism for improving service quality because it teaches workers what to do and how to do it effectively (Van der Wagen, 2005). The overall consequence of this strategy is consistency within an organisation and maintenance of high standards, which is a priced trait in the restaurant business. Training also benefits workers because it stimulates them to work towards organisational goals since they get to learn about them and understand how to achieve them. It enhances communication processes between managers and staff members, and this makes them highly reliable and timely. The overall effect of a happy workforce is an impressively productive organisation that meets and exceeds its bottom line almost all the time (Tharenou, Saks and Moorec, 2007). Despite all the theoretical knowledge supporting the need for training, it is still critical to look for evidence or studies that have focused on establishing the relevance of the concept in the hospitality sector. Cairncross, Wilde and Hutchinson (2008) did an analysis of six restaurants in New South Wales, Australia to identify whether restaurants valued training at all and how they went about implementing it. It was found that all the participants stressed the relevance of training in their businesses with most of them stating that they did it in order to improve service quality. A number of them also added that training assisted them in matching their objectives to the nature of services offered. Furthermore, training was seen as a phenomenon that not only benefits consumers, but also causes staff members to become better at what they do. Parsa, Self, Njite and King (2005) also did an analysis among several restaurants on why many of them fail; they found that internal factors played a critical role in determining whether business did well or not. Management capabilities often lead to the detriment of most institutions with some individuals lacking financial, product or human resource skills needed to manage their business. Some of them over utilised resources or underutilised them while others cared little about their competitors while only focusing on quick fixes and short-term thinking. The researchers also found that continually educating managers through workshops and trade shows was an effective way of keeping unwanted results at bay. Exposing individuals to effective methods of technology-use or management is a proactive way of curbing such negative forces. The above suggestions that indicate that a case exists for training among restaurant businesses like Costa Coffee; however, the latter finding focuses more on training for managers rather than subordinate staff. Monk and Ryding (2007) carried out a study that is perhaps the most relevant one to Costa Coffee than any of the above-mentioned ones. They wanted to investigate whether it was necessary to provide training to employees (mostly part time and contractual baristas) in UK coffee shops. Their method of data collection was through two focus groups comprising of consumers on one hand and managers on the other hand. They found that consumers had relatively low expectations concerning baristas’ knowledge about coffee, so it was not necessary to exceed these expectations. Furthermore, managers appeared to agree with consumers’ sentiments since they offered training only on a basic level. This study indicates that training for low-level staff may not be a suitable investment because consumers do not expect superior product knowledge. The above study differs from what other studies have found probably because of the emphasis only on coffee baristas or low-level staff and its reliance on focus groups. Focus groups have many generalisability issues because they involve only few participants that often influence each others’ responses; notwithstanding, Costa Coffee must realise that the relevance of training is not as clear cut as it may seem. For training to work, it ought to be tailored to the tasks and needs of the organisation (Salas and Cannon-Bowersm, 2001). A company should evaluate the nature of expertise required in its industry prior to making such a leap, and this ought to be done scientifically. If task loads happen to be high for an institution, it may imperative to consider training for that group or professional. Additionally, the complexity of decision making within a certain job is a suitable indicator on whether training will make an impact on that institution. Costa Coffee may want to conduct a cognitive analysis on the jobs within all its coffee shops or franchises in order to determine whether they have reached the threshold for training. It is for this reason that Weber (2007) suggests some training aspects for business leaders only; business ethics training mostly works for persons in influential positions. 2. Employee engagement and commitment Employee engagement is defined as “An outcome based concept used to describe the degree to which employees can be ascribed as aligned and committed to their organisation such that they are their most productive.” (Cohen and Higgins 2007, p.46). People who are highly engaged tend to exhibit certain characteristics that include going an extra mile for their institution and achieving gaols. They tend to report fewer errors while carrying out their work and will share knowledge whenever they see the need to do so. These individuals take ownership of career progress and will respond to organisational needs when they arise; they tend to see themselves as valid contributors towards these outcomes. Further, they are more likely than their disengaged counterparts to feel stressed about their work or ask for days off unnecessarily. This attitude also implies that committing fraud may be outdated and so are instances of sabotage within the organisation. Markos and Sridevi (2010) find support for employee engagement in organisations through secondary literature on the subject. They have found that surveys of global companies in 10 different nations have shown that a strong correlation exists between employee engagement and net profits. Disengaged workers often report more missing days than their counterparts do, so they impose extra costs on organisations due to their absence. Low employee engagement also leads to less productivity, as they will focus on tasks that are not relevant to the organisation’s mission. Most such individuals are also likely to exhibit superior client interactions, as they do not feel loyal or strongly affiliated to the institution. They tend not show significant change within their institutions because they are dissatisfied with it, and a number of them may not stick around in the organisation for things to improve (Rhoades and Eisenberger, 2002). Conversely, engaged employees tend to do just the opposite; they have a way of consistently acting as advocates for their institutions. Furthermore, since they are highly committed to their organisations, a number of them will stick with the company despite lucrative opportunities from other competitors in the institution. This quality is highly desirable for Costa Coffee especially given the fact that the restaurant franchise business is one of the industries with the highest employee turnover in the country. Finally high employee engagement assist an institution in becoming successful through continuous contributions by employees to put in the extra time, initiative and effort needed to make them stand out (Allen and Grisaffe, 2001). Companies can know if their employees are engaged through certain behaviour, and this will signal to them whether they are doing the right thing or not. They tend to be proud of their employers and highly satisfied with their work even when challenging tasks present themselves. When positive feedback and recognition are experienced, chances are that employee will be highly engaged; this tendency is also exhibited through support from superiors. The highly engaged worker often sees prospects for growth in an enterprise and is likely to stay with the entity even when things get tough. To achieve employee engagements, certain things need to be done by the organisation under consideration, and it can start by working on the nature of jobs. If workers at Costa Coffee feel that their jobs are rich, meaningful and supportive enough, they are likely to demonstrate greater employee engagement. One way of achieving these qualities is through heightening the skills and knowledge of the workers through training programs. Additionally, job features can be made more attractive by increasing vertical movement within the organisation or horizontal movements to similarly ranked jobs with the same outcomes (Vance, 2006). Regardless of this support from literature, it is not always a guarantee that every single case of employee engagement will lead to desirable outcomes in the organisation. Partially engaged managing directors will spell doom for a firm even though the baristas are highly engaged. All employees can be highly engaged but it is only a certain category that will create the greatest value for a business, so the question a company must ask is whether persons in the most influential positions are highly engaged. It takes substantial investment to make all employees engaged, so the company needs to apply some discretion in determining the ones that will have the greatest effect on their strategic objects (Cohen and Higgins, 2007). Costa Coffee ought to take such an approach when applying employee engagement within the institution; it should allow a certain threshold for staff that do not directly contribute to strategic outcomes, and then work on making the relevant ones highly engaged. At the coffee chain, some of the positions that are strategic and value adding include procurement, management and finance. 3) Negative behaviour Negative behaviour in the organisation has adverse implications on outcomes as it exerts emotional stress on employees and may minimise financial returns within an institution. It may be regarded as a reaction to negative stressors either at work or in the concerned workers’ personal life (Paciran, 2011). Irrespective of its area of manifestation, organisations still have a huge role to play in determining whether members of their institution will exhibit this behaviour. Some examples of negative behaviour at work include bullying, theft and fraud; in fact, statistics indicate that at least 11% of British workers have experienced some level of bullying in the workplace (Muafi, 2011). Alternatively, when employees fail to report to work, then this is also a manifestation of the same; chronic absenteeism hurts the bottom line especially in busy industries like coffee shops. If an employee comes to work drunk or intoxicated by other illegal substances, then this is a sign that they may dissatisfied with their job. Most of them may exhibit minimal respect for the organisation and can steal property as well as allow their peers to do the same without feeling any remorse. Some forms of negative behaviour can appear to be trivial but these still have a huge impact on the company’s performance; they include gossiping and spreading rumours, harassing others sexually or even failing to follow instructions from supervisors. The following diagram illustrates the typology of negative behaviour at work. Source: (Appelbaum, Laconi and Matousek, 2007) A company such as Costa Coffee can benefit from eliminating deviant behaviour at work because this has direct negative effects on it. The literature is clear on the relevance of this concept at the workplace; the organisation under analysis ought to consider the ramifications of these findings as they have an impact on outcomes. If employees damage and disrupt property or services at Costa, it is likely that the company will suffer from negative publicity as well as embarrassment. It will encounter substantial losses that emanate from property damage and if this spirals out of control, then the company may report profit declines. Furthermore, such negative behaviour can also lead to the destruction of relationships between employees themselves, the company and its suppliers and most importantly, the organisation and its consumers. Appelbaum, Laconi and Matousek, (2007) wanted to investigate sources of negative behaviour at work and they found that poor organisational norms are a cause, so these may need to be remodelled. Additionally, social values as well as attitudinal issues within the company culture can also precipitate negative behaviour at a corporation. Costa Coffee can work on preventing these organisational differences in culture by exercising greater discretion when hiring staff members. Andrieș (2011) states that many companies are placing all their emphasis on quality management and other technical aspects of production. However, if they ignore the relevance of human relations, then they will simply be dealing with short-term challenges as prospects for sustainable competitiveness will decline. Costa Coffee ought to recognise the relevance of human relations issues such as psychological empowerment as this will lead to successful outcomes in the future. Recommendations The findings from literature indicate that training can endow Costa Coffee with considerable advantages but this must only be done under certain conditions. The company needs to study task and job complexity in order to determine positions that will generate value for the company’s investment in training. Focus ought to be on top-level managers rather than baristas or other low-level staff; however, since low-level staff still interact with consumers, it would be more effective to maintain only moderate levels of investment in the groups. Literature supports the view that this category still contributes substantially to service quality outcomes, so they ought not to be ignored. The case for employee engagement in the institution is also unquestionable in the literature, but making all employees highly engaged may not be a sustainable strategy for Costa Coffee since it costs a lot of money to do so. Instead, the company needs to carry out an audit of the number of employees who are engaged as well as the proportions that represent influential positions. If ratios are low, then incentives and conditions that lead to high engagement should be targeted at these groups. Negative behaviour has also been shown to have a profound effect on outcomes within an institution; Costa Coffee can lose a lot of revenue or assets through deviant behaviour. It is incumbent on the organisation to work towards minimising the vices by ensuring that workers’ values are aligned with the company during hiring processes. The company should also work on its work conditions in order to ensure that individuals are satisfied with their conditions at the coffee chain. References Allen, N. and Grisaffe, D., 2001. Employee commitment to the organization and customer reactions-mapping the linkages. Human Resource Management Review, 11, pp. 209-236. Andrieș, A., 2011. 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Employee Engagement: The Key to Improving Performance. International Journal of Business and Management, 5(12), pp. 89-97 Monk, R. and Ryding, D., 2007. Service quality and training: a pilot study. British Food Journal, 109 (8), pp. 627-636. Muafi, 2011. Causes and consequences of deviant workplace behaviour. International Journal of Innovation, Management and Technology, 2(2), pp. 123-126. Paciran, M., 2011. Causes and Consequence Deviant Workplace Behaviour. International Journal of Innovation, Vol. 2, No. 2, pp. 45. Parsa, H., Self, J., Njite, D. and King, T., 2005. Why restaurants fail. Cornell Hotel and Restaurant Administration Quarterly, 46(3), pp. 304-323. Pollit, D., 2006. Training provides the recipe for success at Nandos. Training and Management Development Methods, 20(5), pp. 5.53-5.57 Rhoades, L. and Eisenberger, R., 2002. Perceived organizational support: A review of the literature. Journal of Applied Psychology, 87, 698-714. Salas, E. and Cannon-Bowers, J., 2001. 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