HRM Evaluating, Link of the Corporate Strategy with the HRM Strategy of Starbucks - Case Study Example

HRM-analysis, evaluating, link the corporate strategy with the HRM strategy of Starbucks Table of Contents Table of Contents 2 Introduction 3 Background of the study 3 Rationale 4 Discussion 4 Evaluation of the strategy used by Starbucks with reference to theory to provide a framework for analysis as well as critical analysis of the strategic approach taken by Starbucks. 4 Evaluation of links between corporate strategy and Starbucks specific HRM activities, with reference to appropriate theory 7 Conclusion 10 References 12 Introduction Background of the study The human resource is recognised as the most important assets of an organization that might helped in improvement of its competitive advantage and position among its rival players. As a result of which, most of the organizations in this age desire to retain the human resources within it for longer period of time in order to amplify its image and productivity in the market. However, in order to do so, the organizational entrepreneurs or management is trying to offer varied types of performance related pay systems or implementation of learning and development programs (Adair, 2010, pp. 123-134). By doing so, the human resources or workforces of the organization might be developed in an effective way and then they may be used in optimum way resulting in amplification of the productivity and profitability of the organization. Other than this, in order to retain the workforces within the organization, effective human resource policies also need to be implemented so as to improve their inner motivation and self esteem (Beardwell & Claydon, 2010, pp. 223-234). Only then, due to improvement of the inner motivation, the level of performance of the employees or human resources might get enhanced that may amplify the quality of products. Thus, it might be clearly depicted that the human resource policies and management system is directly linked with the performance of an organization. This means, if the human resources of an organization are treated properly then, it might surely lead to improvement of its image and reputation in the market. Hence, it might be revealed that HRM policies are directly related with corporate strategies of an organization in this age of aggressiveness (Blake & et.al. 2011, pp. 245-256). Rationale This essay mainly highlights the corporate strategy as well as the human resource strategies adopted by a multinational coffee retailer, Starbucks so as to improve its performance. Along with this, it also focuses on 2 or 3 specific HRM activities implemented by the organization so as to improve the performance and motivation of its employees that may amplify its position and popularity in the market among other rival players. Along with this, varied types of models of HRM are used to evaluate the link between the corporate strategy and human resource strategy of Starbucks as compared to many other rival players. Discussion Evaluation of the strategy used by Starbucks with reference to theory to provide a framework for analysis as well as critical analysis of the strategic approach taken by Starbucks. In this age, sustainability and competitive advantage of an organization might be attained only if the effective human resource policies or strategies are implemented. This is because; in order to attain high-ended performance of the organization, effective human resource policies are extremely essential (Wong, 2000, pp. 221-234). As, human resource acts as the catalyst so, they need to be offered fair treatment and fair compensation by the management of the organization, only then the employees might be retained within it. In addition, effective human resource policies might prove effective in improving the performance and quality of work of the employees that may lead to organizational development (Starbucks, 2014). Not only this, the brand image and market share of the organization might also get enhanced due to the presentation of best quality of products and services to its customers (Blyton & et.al. 2011, pp. 256-267). However, as a result, the loyalty and trust of the customers might get enhanced thereby reducing the rate of switchover costs of the customers to a considerable extent as compared to others. Thus, due to retention of the customers, the rate of profitability and popularity of the brand and its products might get enhanced in the market. Other than this, due to high domination power and position, the strengths of the organization might get enhanced that may reduce the threats (Blyton & Turnbull, 2004, pp. 334-345). Keeping this fact in mind, the organization of Starbucks implemented fair employee compensation strategy so as to enhance the development and image of the organization in future era (Starbucks, 2014). Other than this, the prime aim of implementing this HRM strategy in order to improve the inner motivation and self esteem of the employees to a significant extent as compared to others as stated by the motivational theory of human resource management (Bolton & Houlihan, 2007, pp. 278-289). According to motivational theory of human resource management, it is the motivation or enthusiasm of the individual that stimulates his or her dedication and commitment towards the assigned duties and responsibilities (Brown, 2007, pp. 332-343). However, due to improvement of the level of dedication of the employees, the level of performance might also get enhanced. As a result of which the organizational productivity and performance might get enhanced in the market thereby amplifying its reputation and reliability among others. However, in order to amplify the motivation of the employees and the performance of the organization, the management need to implement effective human resource strategies so that it might lead to fulfilment of corporate strategies such as organizational development, organizational performance, improvement of total sale etc (Beck, 2003, pp. 356-367). However, most important motivational factor that enhances the devotion of an employee is compensation or rewards. Therefore, most of the organizations desire to implement fair compensation strategy in order to improve the value and dominance of the employees. Moreover, by implementing the strategy of fair compensation, the retention level of the employees also increases that proves extremely effective for the organization (Beardwell & Claydon, 2010, pp. 423-443). This is because; retention of an experienced and talented staff within the organization might lead to improvement of the product lines thereby amplifying the profitability and demand of its products in the market among others. Furthermore, due to introduction of varied types of new products by the experienced staffs, the organization might easily cope up with the changing taste and preferences of the target group of customers that may amplify its loyalty and dependency in the market (Blake & et.al. 2011, pp. 445-456). Due to these above mentioned reasons, most of the organizations, in this age desire to implement fair compensation strategy (Long, 2012, pp. 556-567). By implementation of fair compensation strategy within the organization of Starbucks, the commitment of the employees enhanced to a considerable extent. As a result of which, the total sale of the products enhanced that also improved the total revenue by US$ 14.89 billion. Moreover, due high-quality of products, the loyalty and brand image of the organization of Starbucks also improved that amplified its position in the market. Apart from this, due to the implementation of fair compensation strategy, the level of interpersonal conflicts among the employees reduced to a significant extent and the rate of coordination and team work improved (Harris, 2001, pp. 182–192). Thus team work, improved the level of communication among them that resulted in a good bonding as well as an excellent working culture. Other than this, due to good bonding among all, the level of knowledge and inner skills became enhanced to a considerable extent that increased their quality of performances within the organization (Kerr, 1995, pp. 7-14). Moreover, enhancement of the inner skills and talents of the employees also improves their career opportunities as well as growth. As a result, the rate of dominance and popularity of the employees, offering better performances enhanced as compared to others thereby amplifying their self-esteem (Ganster & et.al 2011, pp.221-235). Due to which, the rate of attrition rate of the employees also reduced that improved the level of productivity and efficiency of the organization. Thus, it might be clearly revealed that implementation of such a strategy proved extremely helpful for the organization of Starbucks thereby amplifying its development in long run. Other than this, implementation of such a strategy also helped in retention of experienced employees that may be used efficiently in developing numerous types of product lines. By doing so, the profitability as well as the customer base of the organization of Starbucks might get enhanced that may improve its portfolio and uniqueness in the market among many other rival contenders (Edwards, 1985, pp. 326-345). Furthermore, due to the presence of wide range of product lines and customer bases, the threat of new entrant and substitute products might get reduced. However, due to which, the sustainability and competitive advantage of the organization of Starbucks might get enhanced resulting in amplification of its ranking and brand value (Dyer & Todd, 2007, pp. 656-670). Hence, it might be stated that compensation strategy is recognised as one of the effective human resource strategy that is entirely linked with corporate strategy (Marsden & Richardson, 1994, pp. 767-787). This means; implementation of this strategy might prove effective in enhancing the motivation to perform the duties of the work that may improve the performance of the employees. As a result of improvement of the performance of the employees, the rate of productivity and market value of the organization might get enhanced (Daniel & Wentland, 2009, pp. 3-7). This is extremely essential for an organization to enhance its competitiveness and position among others. Evaluation of links between corporate strategy and Starbucks specific HRM activities, with reference to appropriate theory In order to amplify the corporate image and prosperity of the organization, Starbucks implemented varied types of human resource strategies such as employee resourcing, employee recruitment and selection policies, employee reward strategies and employee learning and development policies (Delaney and Huselid, 2010, pp. 949-969). All the above mentioned policies are implemented within the organization of Starbucks in order to amplify the motivation and devotion of the employees that may improve the performances (Davidson & et. al. 2011, pp. 156-178). However, due to improvement of the level of performances of the employees, the rate of efficiency and output of the organization might also get enhanced significantly as compared to many other rival contenders of the market. Employee resourcing policy: according to this strategy, the organization might select or retain the best employees such as highly experienced and talented. So that, these employees or resources might be used to develop varied types of value-added products or services that may satisfy the changing demands of the customers (Marsden & et. al. 2006, pp. 378-389). As a result of which, the brand image and loyalty of the products within the minds of the customers might get enhanced thereby amplifying its prosperity and market value among others (Coyle-Shapiro & et. al. 2004, pp. 444-456) Therefore, due to the implementation of the strategy of employee resourcing the strategic capacity of the firm might get enhanced as per the qualities of the resources or employees. Due to which, the competitive advantage and position of the firm enhances to a significant extent thereby amplifying its reliability and uniqueness in the market among other rival players (Russell, 1971, pp. 654-675). Employee recruitment and selection: this is also another important human resource strategy implemented by the organization of Starbucks so as to attain the best employees. By doing so, the junior and un-experienced employees might attain a chance to enhance their inner skills and knowledge (Collings & Wood, 2009, pp. 656-675). As a result of which, the level of dedication and commitment of the employees might get enhanced that may improve the productivity and performance of the organization as well. Due to which, the rate of competitiveness and reliability of the organization of Starbucks might get enhanced thereby amplifying its popularity and portfolio in the market among others. So, these strategies are extremely essential for the organization of Starbucks to retain its image in the market among others (Claydon, 2003, pp. 656-676). Employee reward: the organization of Starbucks also implemented the strategy of employee rewards in order to amplify their motivation towards the assigned duties. Apart from this, employee rewards might also prove effective in amplifying the dedication and devotion of the employees resulting in presentation of error-free performances (Chamberlain & et. al. 2002, pp. 443-454). Moreover, due to presentation of varied types of employee rewards such as incentives, bonuses, promotions, fridge benefits etc, the rate of retention of the employees increased to a significant extent as compared to many others rival contenders (Snell & Bohlander, 2010, pp. 890-912). As a result of which, the rate of coordination and interpersonal relationship among the employees of varying age-groups, cultures, job responsibilities etc enhanced that improved their performance and work environment (Delery, 2009, pp. 802-835). Due to which, the brand value and portfolio of the organization enhanced in the market as compared to many other rival players (Brewster & et. al. 2011, pp. 554-565). Learning and development programs: implementation of varied types of learning and development programs helped the employees of the organization of Starbucks to amplify their skills and knowledge. By doing so, the rate of resignations and turnover of the employees of the organization of Starbucks might be reduced thereby amplifying the ratio of retention. Moreover, due to the implementation of varied types of development programs, the competencies and confidence of the employees might get increased to a significant extent that may improve their performance (Boxall & Purcell, 2011, pp. 221-232). Other than this, due to the implementation of these above mentioned strategies, the motivation and inner confidence of the employees might get improved thereby amplifying its productivity and efficiency. However, due to improvement of the productivity, the rate of dominance and prosperity of the organization might get enhanced to a significant extent (Boxall, 1998, pp. 265-288). Thus, due to the implementation of these strategies, the most important challenge i.e. to retain the goodwill and competitive advantage in the market might get easily reduced. As a result of which the position and reliability of the organization of Starbucks might get enhanced to a significant extent as compared to many other rival players. Hence, it might be stated that the organization of Starbucks implemented these strategies in order to amplify the reputation and uniqueness of the organization in the market. Therefore, due to high reputation, the rate of profitability increased that proved extremely effective for its expansion to varied developing and developed countries in the entire globe (Barney, 2004, pp. 99-104). Conclusion Conclusively, it might be stated from the above mentioned information and points, that all the strategies such as employee reward, employee resourcing, learning and development, recruit and selection are extremely essential for the organization. This is because; these strategies might prove effective in improving the motivation and dedication of the employees that may enhance their performance. By doing so, the organization might become successful in developing varied types of inventive products that may easily satisfy the requirements of the customers. As a result of which, the loyalty and trust of the customers might get enhanced that may improve their retention and confidence over the brand. Due to which, the profitability and productivity of the organization might also get enhanced resulting in amplification of its dependency and consistency in the market among many other rival players. Other than this, the retention of the employees might get enhanced with the implementation of the learning and development policies as well as reward policies. As a result of which, he rate of termination and attrition of the employees might get reduced to a significant extent. Due to which, the resource capabilities of the organization of Starbucks might get improved thereby amplifying its reputation and brand image in the market. This might prove effective in improving its competitiveness and sustainability as compared to other brand. Therefore, it might be clearly revealed that implementation of these strategies helped in enhancing the coordination and communication of the employees thereby amplifying its working environment and portfolio in the market. Furthermore, effective human resource strategies help in fulfilment of the corporate strategies such as improvement of total sale, fulfilment of financial targets, improvement of company image, market share etc. Thus, effective human resource strategies are entirely linked with the corporate strategies of the organization. So, it is extremely essential for an organization to develop and implement effective human resource strategies or policies. Only then, its competitive advantage and dependency might get amplified in this age of aggressiveness. References Adair, J. 2010. Effective Motivation: How to Get the Best Results From Everyone. New York: Cengage Learning. Barney, Jay B, 2004. Sustained competitive advantage and resources of Firm. Management journal, pp 99-120. Beardwell, .J. & Claydon, T. 2010. Human Resource Management. London: Sage. Beardwell, .J. & Claydon, T. 2010. Human Resource Management. London: Sage. Beck, R, C. 2003. Motivation: Theories And Principles, 4/e. New York: Cengage Learning. Blake, S. & et.al. 2011. A Practical Approach to Alternative Dispute Resolution. London: Oxford. Blake, S. & et.al. 2011. A Practical Approach to Alternative Dispute Resolution. London: Oxford. Blyton, P. & et.al. 2011. Reassessing the Employment Relationship. New York: Palgrave Macmillan. Blyton, P. & Turnbull, P. 2004 The Dynamics of Employee Relations, 3rd edition. London: Sage. Bolton, S. & Houlihan, M. 2007. Searching for the Human in Human Resource Management. New York: Palgrave. Boxall, P. & Purcell, J. 2011. Strategy and Human Resource Management,Third edition. Palgrave MacMillan: Basingstoke & New York. Boxall, P. 1998. "Achieving competitive advantage through human resource strategy: towards a theory of industry dynamics", Human Resource Management Review, pp. 265-288. Brewster, C. & et. al. 2011. International Human Resource Management, (3rd Edition). London: Chartered Institute of Personnel and Development. Brown, L, V. 2007. Psychology of Motivation. London: Springer. Chamberlain, R & et.al. 2002. Performance Related Pay and the teaching profession: A review of the literature. Research Papers in Education, Vol. 17(1), pp. 31–49. Claydon, T. 2003. Introduction to the Employment Relationship. London: Sage. Collings, D & Wood, G. 2009. Human Resource management: a critical approach: London Routledge. Coyle-Shapiro & et. al. 2004. The Employment Relationship. New York: Oxford University Press. Daniel, M. & Wentland, 2009. Organizational Performance in a Nutshell. Journal of organizational performance, pp. 3-7. Davidson, J, P. & et. al. 2011. Motivation. London: Sage. Delaney and Huselid, 2010. HRM impact on organizational performance perceptions. Journal of Management, PP 949-969. Delery, H, D. 2009, Models of theorizing in strategic human resource management, Academy of Management Journal, pp 802-835. Delery, Harold Doty, 2009, Models of theorizing in strategic human resource management. Academy of Management Journal, pp. 802-835. Dyer, L. & Todd, R. 2007. Human resource strategies and firm performance, The International Journal of HRM, pp 656-670. Edwards, P. 1985. ‘The Myth of the Macho Manager’, Personnel Management. New York: Oxford University Press. Ganster, D.C. & et.al 2011. ‘Performance-Based rewards and work stress’. Journal of Organizational Behavior Management, Vol. 31, pp. 221–235. Harris, L. 2001. ‘Rewarding employee performance: line managers values, beliefs and perspectives’. International Journal of Human Resource Management, Vol. 12(7), pp. 1182–1192. Kerr, S. 1995. ‘On the folly of rewarding A, while hoping for B’. Academy of Management Executive, Vol. 9 (1), pp. 7–14. Long, R. 2012. Motivation. London: Springer. Marsden, D. & et.al. 2006. Pay for performance where output is hard to measure : the case of performance pay for school teachers. JAI Press: London, UK Marsden, D. & Richardson, R. 1994. ‘Performing for pay? The effects of merit pay on motivation in a public service’. British Journal of Industrial Relations, Vol. 32(2), pp. 243–261. Russell, I, L. 1971. Motivation. London: Sage. Saks, M. A. & et. al. 2010. Managing Performance Through Training and Development. London: Sage. Schneier, C. E. 1994. The Training and Development Sourcebook. New York: Springer. Sims, R, R. 2002. Managing organizational behaviour. New York: McGraw-Hill. Sims, R, R. 2002. Organizational Success Through Effective Human Resources Management. London: Sage. Snell, A. S. & Bohlander, W. G. 2010. Managing Human Resources, 16th Edition. New York: Cengage Learning. Starbucks, 2014. Starbucks coffee company. [Online] Available at: www.starbucks.com [Accessed on 6th May, 2014]. Starbucks, 2014. Starbucks history. [Online] Available at: www.starbucks.in [Accessed on 6th May, 2014]. Swart, J. & et. al., 2012. Human Resource Development - Page 79. New York: Cengage Learning. Wong, R. 2000. Motivation: A Biobehavioural Approach. New York: Cengage Learning. Read More