MGT 3613- 004

May 1st 2012

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The Organization
Mission Statement, Goal Industry Section and Competition Size and Location History Pages 3-4

THE STAFFING & TRAINING FUNCTIONS Internal & External Recruiting Selection Training & Development Pages 5-6

Pedro Hernandez Peter Aveiga Woosub Shim Mark Venegas Nikhil Menon

THE BENEFITS/PERFORMANCE APPRAISAL/COMPENSATION FUNCTIONS

Companys Benefits Package Performance Appraisal Process Compensation Function Pages 6-8

ANALYZING THE ORGANIZATION Best companies to work for Recommended changes

The Organization
Starbucks mission statement is: To inspire and nurture the human spiritone person, one cup and one neighborhood at a time.

One of the reasons Starbucks has been a success is through its goals that help shape their company culture. Starbucks, even though their company is spread all throughout the world, likes to treat their company as if it was just a local shop in the neighborhood. Their international development strategy changes to different markets globally addressing the local needs and requirements of each individual market. Starbucks objective seeks to be a global company, making a difference in people live by leveraging their brand and the coffee experience to foster human connections. Starbucks competes in the food and beverage industry with a specialty coffee-bar part of that industry. Starbucks stores offer a choice of regular or decaffeinated coffee beverages ranging from the classic cup of coffee, lattes, frappuccinos; within the last few years they have added large variety of pastries. Starbucks also plays smooth jazz as part of its easy going, nurturing environment. Their closest competitor is called Second cup, which is a Canadian franchiser. McDonalds McCafe can now be included into the conversation due to the fact that McDonalds is known globally and now they are trying to enter and compete in the coffee industry. Some others worth mentioning are Green Mountain Coffee Roasters, Coffee Bean & Tea leaf, Costa coffee, Peets, and Caribou Coffee Starbucks is considered the leader in the coffee bar industry globally. They have over 11,000 locations and annual revenue of about 6.4 billion dollars. Their initial public offering of common stock in June 1992 turned to be one of the most successful IPOs of that year. Overall Starbucks is tied to helping specialty coffee products catch on across the United States increasing the number of cafes in 1992 from 500 to 10,000 by 1999. Starbucks, as of 2011, is the worlds #1 specialty coffee retailer. They have more than

17,000 coffee shops in about 40 different countries. In the United States they have exactly 12,781 stores open. In 2011, they had a total of 149,000 employees recorded in their company fiscal yearend report. Starbucks first store opened in 1971 in Seattle, Washington by three partners: Jerry Baldwin, Zev Siegl, and Gordon Bowker. In1984, the original owners chose to buy out the competing coffee company Peets. After the acquisition of Peets, Starbucks began to expand quickly and opened its first locations outside of Seattle at Waterfront Station Vancouver, British Columbia, and Chicago Illinois in 1988. By the year1992, the company had grown to 165 stores. Currently, Starbucks competes in 55 different countries. The first Starbucks location outside of North America was located in Tokyo, Japan. Even though Starbucks has had much success and competes in different international markets, they still try to continue treating their company as a family run business. Starbucks chairman Howard Schultz has talked about making sure growth does not dilute the companys culture and the common goal of the companys leadership to act like a small company. Starbucks is also very involved in environmentally friendly causes. Starbucks was ranked number 15 on the US Environmental Protection Agencys list of the Top 25 Green Power Partners for purchases of renewable energy in 2008.

Staffing & Training Functions

Starbucks, like most companies, likes to promote from within. They have a very formal policy when it comes to their labor force; Starbucks gives their employees plenty of resources such as training and tuition reimbursement to develop their employees. Starbucks mission includes the commitment to treat its employees with respect and dignity, and to be a force for positive action in the community in which it does business. Starbucks uses an online job bank that allows everybody to see the employment opportunities that are available within Starbucks. For their current employees, Starbucks has thepartnercafe.com which is an online component part of their career site. This allows employees to apply for higher positions and have a job hiring manager overseeing the process which gives the employees general help along the way. Starbucks has many ways for finding candidates to supply its labor market when they dont have the adequate internal candidates or they feel the need for a fresh look. For some of the lower level positions, Starbucks uses employee referral and campus recruiting which are most effective when looking for large amounts of employees without high qualifications. Since this process doesnt tend to produce results for some of the top-level employees, Starbucks uses head hunters to fill some of its more qualified position. If you are selected to interview with Starbucks, you can expect to have two to four interviews with a hiring manager, team mates, cross-functional business partners and other decision makers depending on the position youre applying for. Starbucks does not require drug testing or medical exams; there is the autonomy for a branch location to do drug testing, but thats within the discretion of the particular Starbucks which is stated in hiring process.

Starbucks has a 24 hour 9-block training program. The store manager and the learning coach, which is an established barista, provide guidance, while the partner takes on the self-guided modules. 16 hours are dedicated to bar practices, machine use and drink standards which are led by the learning coach. Once training is complete they receive a Barista 100 Certification. Starbucks structures their training program in 3 categories. On-thejob learning is 70%, Learning through other 20%, and Formal learning 10%. There are a variety of programs emphasized for continual learning in Starbucks such as their Coffee Master Program, which trains barista to be a coffee and tea authority in the store. Their use of a blended training approach consists of in-store training, online portal work and classes, both which have given Starbucks a competitive advantage when it comes to training their employees. Starbucks, like many other companies today, likes to promote from within and to achieve this they have a tuition reimbursement program. Starbucks employees must be at their position for a continuous length of service as of January 1st each year of the maximum calendar year reimbursement.

less than 36 months $500 per year Below director level: 36 but less than 60 months $750 per year 60 months or more$1,000 per year

Director level and higher are $500 a year and length of service doesnt apply, the reason being is that there are limits that Starbucks can provide for well compensated employees according to the IRS. The tuition reimbursement plan covers the cost of tuition, books, class-required supplies and required fees, such as exam or lab fees, charged to students for the approved courses.

THE BENEFITS/PERFORMANCE APPRAISAL/COMPENSATION FUNCTIONS Starbucks benefits include health coverage, income protection, reimbursement accounts and other programs such as Tuition Reimbursement, an Employee Assistance Program, Commuter Benefit Program and Adoption Assistance. Starbucks comprehensive medical plans include coverage for hospitalization, office visits, lab and x-rays, emergency care, prescription drugs, and mental health and chemical dependency treatment. Whats intriguing is that Starbucks has a variety of healthy living information available to each partner. Partners become eligible for benefits on the first day of the second month after they have been paid for at least 160 hours by the last Friday of a two month period. To continue eligibility for benefits coverage A partner must be paid a minimum of 240 hours in each calendar quarter. Paid hours are all hours for which a partner has been paid on pay dates that fall between the first and last day of the quarter. Employees may cover themselves and their dependents. Eligible dependents include a spouse, same- or opposite sex domestic partners, and eligible dependent children. Starbucks provides simple life insurance coverage benefits for eligible salaried and nonretail hourly partners equal to one times annual base pay. Retail hourly partners may purchase life insurance in flat dollar amounts of $10,000, $25,000 and $50,000. Partners may also purchase life insurance coverage for their spouse or domestic partner and dependent children at competitive group rates. These are all paid through payroll deductions of the employee. Starbucks has a 401k retirement plan called Future Roast 401k. The employee has to be over the age 18 and must have been working for Starbucks for 90 days. Partners can contribute 1% to 75% of their pay each pay period up to the annual IRS dollar limit of $16,500 or $22,000 for people over 50. Starbucks has two plans of either the Basic Match of 100% on the first 3% of eligible pay, 50% of the next 2% of eligible pay or the Enhanced Starbucks Match which is a 100% match on the first 6% of eligible pay.

Employees are immediately 100% vested in their entire account balance under the Future Roast 401k. This includes all employer match, 401k and any rollover account balances. Starbucks has a very straight forward paid-time-off policy. Salaried and non-retail hourly employees are eligible for sick pay after 90 days of employment. Full-time partners accumulate up to 40 hours of sick pay per year and retail hourly partners are not eligible for sick pay. Starbucks vacation benefits depend on their position and the length of service. Months of Service Hours of Annual Vac. Retail Hourly 0-12 0 12-36 40 36-60 80 60+ 120

Salaried and Non-Retail Hourly Months of Service Hours of Annual Vac. 0-36 80 36-60 120 60-120 160 120+ 200

Starbucks has a Family/Medical leave policy; their requirement is that a partner must have been continuously employed by Starbucks for at least 90 days and actively working during that time. If eligible, a partner has up to 12 weeks of Family/Medical leave in a 12-month period. According to Starbucks, a Family/Medical leave must be made at least 30 days in advance unless the reason for the leave is sudden and unexpected. Reasons can be: Due to a serious health condition that prevents a partner from working, including

on-the-job injury; Due to pregnancy or childbirth; To care for a family member with a serious health condition; or To stay home to care for a newborn child, newly adopted child or newly placed

foster child. Starbucks has an Employee Assistance Program which is available currently to all U.S. partners and their eligible dependents. In this program, it provides short-term counseling for stress related issues, emotional difficulties, critical incidents in the workplace, and other personal concerns including financial, legal and daily living (a

resource on child care, elder care, school information and more). Starbucks also provides financial assistance to partners who have chosen to adopt. One of the great things about Starbucks is their adoption assistance programs. Starbucks employees that are eligible for Starbucks benefits may receive reimbursement of up to $4,000 to help pay for qualified expenses related to the adoption of an eligible child. What Starbucks also does, in addition to that, is give the employee two weeks of pay in order to give the employee time to pick up the child and let them settle in. Starbucks does performance appraisals every six months and the amount of raise is determined by the score received by the reviews which is up to 3%. Their purpose of the appraisals is employee development. If the partner comes up short in any areas, the partner and the store manager work together to devise an improvement plan. Their method is based on all the caveats of what Starbucks calls the Success Profile for the position one currently is in. The success profile is like a job description and an employee can score 1-4 on categories in 10 areas. 1= needs improvement, 2= meets expectation, 3=meets and often exceeds expectations, 4= consistently exceeds expectations. The success profiles can be found on the Starbucks website or can be provided by the manger upon request. The base pay is determined by the completive market pay rate for ones position, experience and job reviews. Bonuses are achievable by meeting certain business goals for eligible positions. The bonuses are based on employee level and base pay. For example, a barista can receive a $100 bonus per quarter its store reaches its objective. Starbucks has what they call Bean Stock which gives a broad base of partners the opportunity to own Starbucks stock. To be eligible, partners must be employed by Starbucks as of May 1 of the fiscal year preceding the grant date and paid for at least 360 hours during the fiscal year. Partners in a director position or above are not eligible for Bean Stock, but instead are eligible for equity awards under the Key Employee Stock Plan. Each year, Starbucks Board of Directors considers the companys performance and may grant equity awards to eligible partners. The size of the award a partner may receive depends on three main factors:

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Starbucks success and profitability for the fiscal year A partners fiscal-year base wages The exercise (or grant) price Analyzing the Organization While every company would like to be included in Fortunes "Best Companies To Work For", it takes a specific approach to be part of such an assembly. When analyzing the criteria to be included as one of the "Best ", several factors should be taken into account. Many of the top companies found in Fortunes esteemed list have demonstrated a certain generosity when it comes to their most important asset, their employees. While some may offer generous salaries, others may offer flexible work schedules. While some may offer excellent health coverage, others may offer other perks, or benefits. Many of the companies have more peaceful, laid-back environments where stress diminishes. The bottom line remains that all of the companies on the list have at least one of the above mentioned factors incorporated within their company - some even strive to have nearly all such factors included. The front-runner this year is the internet and computer software giant, Google (ranked at #4). Google is well known to have a favorable work environment with many perks awarded to their employees. During these difficult economic times, Google has maintained its strong presence with tremendous growth year after year and proving to be one of the most influential companies in the world. While Starbucks may not be at the top of the list, they certainly made the cut. Currently listed at 98, Starbucks has a history of generosity towards their employees and also corporate social responsibility. Several of the benchmarks for being one of the best companies to work for can be found at Starbucks. These include, but are not limited to, comprehensive benefits packages, health care benefits, liberal leave policies and employee assistance programs. They are also known for their philanthropic ways and reaching out to communities domestically and abroad. While many shareholders and investors have been increasing pressure on executives to lower health care costs CEO Howard Schultz said it was completely out of the question. This pressure stems from

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fiscal issues, largely due to problematic economic times. However, recent reports indicate a significant increase in net income, which came as a surprise to many. SAS, which is ranked #1 in this list of best companies for the second year in a row, has many perks and benefits that Starbucks could take into consideration for their own improvement. SAS is a company that stresses health and wellness by providing employees with a list of incentive programs and to help ensure their workers are in the best shape mentally, physically, and psychologically. Starbucks also emphasizes health through its Thrive Wellness program which provides their workers with the tools and information to help them learn the status of their own well-being and give them ways to improve and maintain that wellness. Starbucks presently does not have the healthy living incentive programs like SAS does. Employees of SAS can join the Commit to Quit program helping their members to quit smoking and provides prizes such as movie tickets or gift cards determined by the length of time one has actually quit. They also have a RFC Miles program which rewards their employees based off a mileage program from walking, running, swimming, and biking (swimming distance provides the most RFC miles since you burn the most calories from this activity). Whole Foods Market is another top company (ranked at #24) that Starbucks could model some of their benefit programs after. Starbucks already offers paid time off but only to those who have worked more than one year (except salaried and non-retail workers who will receive 80 hours of vacation for their first year of service). As for Whole Foods, their employees begin to start racking in the PTO based on the number of hours they work. While both companies similarly get to use PTO hours for vacations, holidays, and personal days, Whole Foods workers can use the hours accumulated or let them roll over into the next year if not used while Starbucks PTO hours must be used during the present year of service. NetApp, a data-storage firm out of California, ranks #5 amongst these top companies and contains many beneficial programs and benefits to help entice people to join their organization. They both have many of the same programs but differ a bit in some categories. For instance, Starbucks offers tuition reimbursement and so does

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NetApp but its the extent that differentiates one as a bit more advantageous. Starbucks offers up to $1000 of reimbursement per year depending on ones length of service (which starts at the one year mark). While NetApp can cover tuition costs up to $5250 per year for accredited coursework for qualified applicants. They also offer a variety of free professional development resources for their employees as they continue their careers with the company. Starbucks may be able to improve their ranking by possibly offering more tuition reimbursement to workers with executive potential and positive drive helping them to advance up the ladder of the organization. In order for this to be possible, they may need to look for other sources of revenue or lower top executives wages to provide these funds to help compete with these higher end companies. Another company whose benefits are worth mentioning is the toy creator, Mattel Inc. As far as all the benefits that are given, they are pretty similar to Starbucks in many ways (medical, dental, disability). One difference that proved interesting was Mattels school related absence paid time off program. Full-time employees are allowed 16 hours of paid time off to participate in school-related events. Since Mattel is a company that makes toys for children, it makes since that they would allow members of the company put children first. Employees can use these hours to volunteer at school events even if they are not their own children. Starbucks PTO programs allow them one day per six month period from July 1-January 1 and must be taken with the following six-month period. Cisco is another successful and top-ranked (#20) company in America that continues to bring in more and more revenue every year. Compared to Starbucks, it has a larger amount of available internships that are up for grabs each year. According to each of their own websites, Starbucks asks that you check your local university to see if there are any offered in that area. Ciscos website has a long list of different departments with internships that are ready to be applied for by anyone in the midst of graduation from engineering to marketing to finance. Starbucks might be able to better compete with companies like Cisco, in terms of best companies to work for, by providing more internships for people on the verge of entering the business world.

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5) Starbucks Tuition Reimbursement Program. Rep. Tuition Reimbursement. Starbucks.

Web. 15 Apr. 2012. <http://lifeat.sbux.com/NR/rdonlyres/FB31ADAF-D465-

468C-A81A-18C0AC290517/0/TuitionReimbursementPoliciesand

ProceduresPlanDescriptionAug12006.pdf>.