HRM Context in Starbucks - Case Study Example

Heading: Strategic Human Resource Management Your name: Course name: Professors’ name: Date Introduction Strategic Human Resource Management (SHRM) is the key concern of all managers that strive to expand their businesses at international levels. This strategy offers new opportunities for the promotion of group learning in a firm. SHRM is among the key features of HRM, and it is critical in the alignment of HR practices with organizational strategies in order to realize set goals and objectives. While some firms still do not see the importance of adopting HRM practices in their businesses, majority of time are aware of their significance, and have them incorporated in their operations. Normally, many large companies have HR specialists to handle their HR issues, whereas the small firms do not see the need. To realize the benefits of HR department, firms have well defined roles and competencies. Some of the HR practices include selection, recruitment, training, development, and compensation. Therefore, this paper seeks to explore the application of SHRM at Starbucks Coffee Company in Melbourne, Australia. Business environment/Starbucks SHRM Starbucks Coffee Company based in Australia is one of the companies in the world that appreciate the importance of HRM. It has a well-defined HR department comprising of competent professionals. The company also has clearly laid down responsibilities and roles for the departments. Notably, the firm shows the main role that human resource management (HRM) plays in establishing the effectiveness, competitiveness, and survival of the business in Australia. Competitiveness entails a firm’s ability to uphold and acquire market share within its industry. Starbucks HRM practices are significant in offering support to the organization’s business strategy and offer services that consumer value. The product or service’s value depends on the quality and the ability to satisfy client’s needs. Competitiveness relates to the firm’s success, which relies on whether the firm meets the stakeholders’ needs efficiently (Leenheer, Christiaens, and Meersman 2010). Vital stakeholders to the company include customer who need high-quality services and products; stockholders who need a high return on their investment; and employees that need exciting work and appropriate wages for the services they provide. Additionally, the community that requires the firm to contribute to projects and activities and reduce environmental pollution is also a crucial stakeholder of the business. In order for a firm to create a strong competitive advantage, it is crucial for the business to strive to meet all the stakeholders’ needs (Choi & Gray 2008). HRM implies practices, policies, and systems that affect the worker’s behavior, performance, and attitudes. Most organizations refer to HRM as entailing people practices. There are numerous HRM practices in existent. The strategy that underlies these practices requires some consideration to capitalize their impact on the firm’s performance. HRM practices involve the analysis and design, determining HR needs (HR planning), attracting prospective workers (recruitment), selecting workers (selection), teaching workers proper performance and future preparation (development and training), rewarding workers (compensation), assessing their performance (performance management); and creating a constructive work setting (worker relations) (Harvey, Speier & Novicevic 2000). Successful HRM practices are essential in supporting business objectives and goals. This implies that successful HRM policies are strategic. Moreover, successful HRM practices are instrumental in enhancing the company performance through the contribution to customer and employee satisfaction, productivity, innovation, and development of a positive status in the company’s community. It is only recently that firms recognized the possible HRM role in their performances (Choi and Gray 2008). Roles and responsibilities of HR department in Starbucks In the past, companies never saw any importance of HRM practices in the attainment of quality, profitability, and business objectives. The HR department has a responsibility for outplacement, record keeping, labor law observance, testing, compensation of employees, and other important features of the administration. HR department also cooperates with other functions of the firm on employment interviewing, discipline, performance, and attempts to enhance the productivity and quality of the firm’s services or products. Big organizations are more probable as compared to the small ones to recruit HR experts, with benefits experts being the more widespread. Other ordinary specializations of the HR include compensation, recruitment, development, and training (Liu, Lepak, Takeuchi, &Sims 2003). According to Choi and Gray (2008), HR department can carry out several varied responsibilities and roles depending on its size, workforce features, industry, as well as value system of firm management. The HR department can assume total responsibility of HR activities in certain organizations, while in others it can share the responsibilities and roles with managers of others sectors like the operations, finance, and information technology. In other organizations, the HR department can advise senior management, while in others, it can take part in decision making regarding training, staffing, and compensation. An effective way of considering HR department’s duties and responsibilities is by looking at it in a firm with three product lines. Firstly, administrative transactions and services is the conventional product that HR previously offered. The latest HR products include strategic partner responsibility, and the services of the business partner (Werbel & DeMarie 2007). Competencies of HR professionals at Starbucks According to Kolk andTulder (2004), the company requires that its HR professionals posses six main competencies. These competencies are the latest ones identified by the Human resource Competency Study (HRCS). These competencies are available in a three-tier pyramid, and the Credible Activist Competency is at the top most for great performances an HR personnel and successful HR leader. Showing these competencies is instrumental in helping HR personnel demonstrate to the managers that they can support the HR function in the creation of value, contribution to the firm’s strategy, and shaping the firm’s culture. These are also crucial in helping the HR department successfully and efficiently offer the aforementioned HR products. Buller and McEvoy (2012) even though a lot of focus is on strategic duties of the HR department, efficient execution of the functional executor competency; essential; administrative services filling job vacancies, compensating workers, keeping workers’ records, benefits enrollment, and filling lawfully needed paperwork is crucial. Effective HR professionals should share information, develop relationships, and influence people both in and outside the firm including employees, managers, schools, vendors, suppliers, consumers, and community members. At times, supporting workers can also entail crisis management practices like the ones HR individuals do during emergencies or natural calamities. Therefore, Starbucks ensures that its HR department meets the aforementioned competencies in order to take their responsibilities and roles effectively, for the general success of the business. Changing HRM function at Starbucks In the company, the time that the HRM function dedicates to administrative activities is reducing, and its duties as a strategic change agent, business partner, and worker advocate are increasing. HR managers experience two major problems including the change of emphasis from present operations to future strategies and preparing non-HR managers to create and enforce HR practices. Furthermore, Liu, Lepak, Takeuchi &Sims (2003) suggest the HRM’s role in administration is reducing, as technology gets useful for most of the administrative purposes like the management of worker records and allowing workers to achieve information and enrolling in benefits and training among other programs. Technological advancements like internet greatly reduce the HRM function in the maintenance of employee records and the provision of self-service to the workers. Here, self-services entails providing workers with an opportunity of accessing information online relating to HR matters, such as, training, contracts, benefits, and compensation, enrolling online in services and programs, and filling online attitude studies. For instance, Starbuck’s has an objective of creating e-HRM in order to enhance worker-friendly one-stop shop for workers to join in benefits, and review HR data among other functions. Managers of the company utilize this system in the acquisition of performance reviews. HR employs this in the communication of benefits, and training plans among others that conserves time, as well as distribution costs and printing. In the past, yearly benefits enrollment could take many days, but with new technology, it now takes very short duration (Flamholtz & Aksehirli 2000). Another change in the HRM’s function regards the introduction of outsourcing. This entails the practice of acquiring services from another firm, which could be a vendor, consultant, or a third-party provider. Various studies show that 80% companies presently outsource at least one HR function. Some of the commonly outsourced HR functions include worker counseling and assistance, flexible expense account administration, and criminal and background checks (Harris & Ogbonna 2001). Outsource offer payroll services, record managements, expatriation, training, and recruiting. The basic rationales for outsourcing include saving money as well as spending more time in addressing strategic management matters. Some of these strategic business matters include identification of new business opportunities, assessment of potential merger, divestiture, or acquisition strategies, and handling talent development and recruitment. Consequently, many firms like Starbucks include HR functions associated with fields like worker development, communication strategies and plans, performance management, policy development and enforcement, and organizational development (Lengnick-Hall, Lengnick-Hall, Andrade, & Drake 2009). Even though there is an expectation that HR outsourcing will grow, there are many contracts cancelled because firms do not understand the outsourcing of provider’s competencies, poor service delivery, and failure to achieve goals. One of the main aspects of any outsourcing decision relates to clear understanding of the firm’s vision for its HR and an evaluation of costs incurred in the performance of HR roles in the firm as compared to the possible savings made by outsourcing (Harpaz & Meshoulam 2010). Another change in HRM involves the traditional employee or personnel relations who were an administrative specialist and worker advocate. The HR department is addressed workers’ problems, ensured that they got appropriate wages, enforced labor contracts, and prevented legal issues. It also ensured that the worker-related issues did not interrupt the manufacture or sales of services and products. HRM was reactive in that HR matters were a concern only they had any direct impact on the business. Even though that is the case in several firms, which are yet to realize the competitive advantage of HRM, other firms like Starbucks believe in the significance of HRM for business prosperity, and thus, have an expanded HRM role as an agent of change and a strategic partner. Moreover, Offstein, Gnyawali, and Cobb (2003) argue there is an increase in other HRM roles like strategic, business collaborating, and practice development. According to studies, there is a transformation of HR from specialized stand-alone role to a wide corporate competency, in which HR and line managers create partnerships to achieve competitive value and attain overall business objectives. Additionally, there is an increasing involvement of the HR managers on high-level committees, which shape the strategic direction of the firm. These managers report to the president, Chief Executive Officer, or board of directors, and suggest solutions to business issues. In Starbucks, the HR role has three principles that require HR role to be innovative like the business product, reduce the infrastructural requirements in the business through stressing that employees and managers should collaborate instead of referring workers to HR, and expect business needs and prepare a plan of meeting them (Offstein, Gnyawali & Cobb 2003). Furthermore, in Starbucks, another strategic role is engaging in evidence-based HR. Here, evidenced-based HR entails indicating that HR practices have a constructive impact on the firm’s main stakeholders or bottom line. This is crucial in justifying the money invested in HR plans, and that HR practices are adding to the firm’s objectives and goals. This also requires the collection of data regarding merits like productivity accidents, turnover, medical costs, medical expenses, and indicating their connection with HR practices (Flamholtz & Aksehirli 2000). Analysis of the need for SHRM, having regard to the business environment According to Alharthey, Khalaf, and Rasli (2011), strategic HRM is highly indispensable for the growth and success of Starbucks. To understand further its significance in the business, it is important to explore what SHRM implies. Strategic HRM is among the most critical features of HRM practices that enable enforcement of successful HR policies in order to satisfy employees’ needs, while going ahead to achieve business goals. Implementation of SHRM is necessary in Starbucks because of certain reasons. To start with, SHRM is advantageous in the company as it helps in adopting proactive measures for the improvement of employee’ efficiency, as well as encouraging the sense of cooperation among them. Secondly, Flamholtz and Aksehirli (2000) say that SHRM is essential in the firm, as it will help in focusing on the learning and development of the firm. With increased globalization, the strategy is vital in ensuring the development and expansion of the firm’s presence in the latest markets. SHRM practices are useful for managers with international orientation to handle varied labor force, place them in a single unit, and conform to the latest trends. Globalization also provides the company with the need to adopt the strategic mechanism to HRM in order to integrate the diverse workforce in the world. Therefore, the enforcement of the SHRM in the firm will greatly help in management of varied workforce effectively, as this workforce has a positive impact on the business strategy of international corporations. It is also a clear way of attaining business goals and objectives. This is also essential in creating a correlation between strategic goals and workforce, which are critical in attaining sustainable enhancements in relation to business performance and development of culture that boosts the motivation for flexibility and innovation (Offstein, Gnyawali & Cobb 2003). Since SHRM plays a key role in defining the business strategies, as well as the HR strategies, it is imperative that the SHRM focuses towards the performance of environmental scanning, assessment of effect of employees’ skills on organizational potential, and accessibility of viable labor force. This is because there is a relationship between SHRM practices and the evaluation of the business performance, as well as the degree of association between organizational strategy and the workforce in order to gain a competitive value (Flamholtz and Aksehirli 2000). What is more, Alharthey, Khalaf, and Rasli (2011), assert that SHRM is beneficial in the association and incorporation of diverse employees obtained through the expanding the business worldwide. A mixed strategy of conventional and optional SHRM is advantageous for the HR experts in linking the employees’ skills with the business goals. These practices including of selection, recruitment, and training, aim at enhancing efficiency association to develop best fit between the individual capabilities and skills found in requirements and teams of the company. Furthermore, SHRM also helps in motivating the optional performance of group members through considering employees growth and empowerment plans, career advancement, and incentive compensation aspects. With the help of the enforcement of SHRM practices, the professional and skills of workers as a group get advanced. The practices are also beneficial in the handling of complex nature of handling people based on consideration of competitive resource (Flamholtz and Aksehirli 2000). Moreover, SHRM practices are instrumental in the enhancement of organizational learning. The emphasis of the HR processes and policies are still on the evaluation of responsibilities and roles, which are necessary for the alignment of optimal performance of duties. In addition, they foster the extent of transfer of skills and knowledge among different group members. It also facilitates the alignment of interpersonal processes to the groups in the performance of lasting responsibilities in order to ensure growth and success. Stimulation of group behaviors and constructive learning aspects occurs in the in the firm through a consideration of well-defined approach. An incorporated learning firm model is sustainable by firms to encourage favorable development of workers based on enhanced and fast learning. The focus of learning function by the HR managers for the development of success of the firm and positive structuring of HR practices (Offstein, Gnyawali & Cobb 2003). A learning firm needs knowledgeable employees to grow and reflect the trust based links accompanied by a lot of commitment. Learning and teamwork are essential criteria for the establishment of legal rightful learning firm. To sustain knowledgeable and skilled workers, it is imperative for managers to focus intensely on the creation of relationships and individual management, and shared performance. SHRM oriented practice approach is beneficial in the definition of joint processes to realize their performance and offering incentives for symbolizing constructive learning. It allows a broad variety of chances for organizational learning and incentives are important in the expansion of career development status (Alharthey, Khalaf, & Rasli 2011). Besides, this is advantageous in motivating leadership competencies among workers that work at various hierarchical levels (Bratton & Gold 2001). What is more, knowledge development is beneficial to the firm in creating a strong foundation of social links and sharing their opinions with others. Moreover, alignment of feedback approach in order to ensure that there is self and autonomous assessments. The SHRM practices are crucial in nurturing knowledge foundation of teams and individuals that stresses on the development of cooperative working practices. This also drives the harnessing of possibility of communication and information technologies that are vital for the sustenance of learning communities and strengthening of the firm’s identity. Another benefit of the practice to the company is that it facilitates achievement of knowledgeable employees who are fundamental to the success of the business (Flamholtz &Aksehirli 2000). Highly satisfied and motivated employees are the fastest developing resources of the firm that employs teams in the performance of the assigned duties in an optimal manner. Another main feature of knowledgeable employees that influence on the firm’s effectiveness and results of teams and individuals is organization stability and commitment of the work-related conduct of the knowledge that employees require for analysis in order to prepare for the adaptation of change (Schuler 2001). Notably, sustenance of learning-based culture by firms is highly indispensable in the transformation of employees’ behavior and reflection of new insights needed to retain main talent. Cooperative HR culture and policies are sustainable through the establishment of SHRM framework and strive for constructive change in the company’s turnover. Imperatively, organizational learning based work culture is critical in ensuring a high degree of organizational dedication and transfer of competent knowledge and skills to workers. The main conditions n the establishment of learning organization including teamwork, collaboration, creativity and knowledge process, achieve effective accomplishment through the implementation of SHRM policies and practices (Schuler & Jackson 2007). Conclusion Based on the business environment and the HRM context in Starbucks, it is clear that the adoption of SHRM mechanism is highly beneficial to the business growth and development. Currently, the company applies the HRM practices effectively, in that it has clearly defined roles of the HR department, as well as well-defined HR competencies. Some of the HR functions include recruitment, training, development, compensation, and selection among others. Lately, there are certain changes in the HR function including the technological advancements, outsourcing, and evidence-based HRM. To boost its performance, there is a need to adopt the SHRM by linking its HR practices to the business strategies. This is vital in enabling the organization achieve its goals and objectives. References Alharthey, Khalaf, B & Rasli, A 2011, ‘Key role of strategic human resource management (SHRM) in advancing the degree of team learning’, African Journal of Business Management, Vol. 5, No. 26, pp. 10446-10451. http://www.academicjournals.org/AJBM/PDF/pdf2011/28Oct/Alharthey%20and%20Rasli.pdf Bratton J & Gold J 2001, Human Resource Management: Theory and Practice, 2nd ed. Routledge, New York. Buller, PF& McEvoy, GM 2012 ‘Strategy, human resource management and performance: Sharpening line of sight Review Article’, Human Resource Management Review, Vol. 22, No. 1, pp. 43-56 Choi, DY & Gray, ER 2008, ‘Socially responsible entrepreneurs: What do they do to create and build their companies?’ Business Horizons, Vol.51, No.4, pp. 341-352 Flamholtz, EG &Aksehirli, Z 2000, ‘Organizational success and failure: an empirical test of a holistic model’, European Management Journal, Vol.18, No. 5, pp. 488-498 Harpaz, I & Meshoulam, I 2010, ‘The meaning of work, employment relations, and strategic human resources management in Israel’, Human Resource Management Review, Vol.20, No. 3, pp. 212-223 Harris, LC & Ogbonna, E 2001, ‘Strategic human resource management, market orientation, and organizational performance’, Journal of Business Research, Vol.51, No. 2, pp. 157-166 Harvey, MC, Speier, C, & Novicevic, MM 2000, Strategic Global Human Resource Management: The Role of Inpatriate Managers’, Human Resource Management Review, Vol.10, No. 2, pp. 153-175 Kolk, A & Tulder, R 2004, ‘Ethics in international business: multinational approaches to child labor’, Journal of World Business, Vol. No. 1, pp.49-60 Leenheer, PD Christiaens, S & Meersman, R 2010, Business semantics management: A case study for competency-centric HRM’, Computers in Industry, Vol. 61, No.8, pp. 760-775 Lengnick-Hall, ML, Lengnick-Hall, CA, Andrade, LS, & Drake, B 2009, ‘Strategic human resource management: The evolution of the field’, Human Resource Management Review, Vol. 19, No.2, pp. 64-85 Liu, W Lepak, DP, Takeuchi, RT &Sims, HP 2003, ‘Matching leadership styles with employment modes: strategic human resource management perspective’, Human Resource Management Review, Vol. 13, No.1, Pp. 127-152 Offstein, EH, Gnyawali, DR & Cobb, AT 2003, ‘A strategic human resource perspective of firm competitive behavior’, Human Resource Management Review, Vol. 15, No. 4, pp. 305-318 Schuler, RS & Jackson, SE 2007, Strategic Human Resource Management, 2nd ed. Wiley-Blackwell. Schuler, RS, Jackson, SE, & Storey, J 2001, ‘HRM and its Link with Strategic Management’, Human Resource Management: critical Text, 2nd ed., Thompson, London, pp. 114-130. Werbel, JD & DeMarie, SM 2007, ‘Aligning strategic human resource management and person–environment fit’, Human Resource Management Review, Vol.15, No. 4, Pp. pp. 247-262 Read More