Assignment Course Work HRM (M016)
CW1 M016 Individual Assignment (4000 Words)
End of Module Assignment - Evaluating an International HRM Strategy
For this assessment, you will take the role of a HR manager, taking part in an internal evaluation of your international organisation's human resource strategy and as a result produce a recommendations report for the HR Director. Please select an appropriate MNC of your choice. Your audit is from an 'HR' perspective as it is likely that the business will establish a joint venture in the new market which will require some staff to be recruited locally and also the relocation of some expatriate staff from within your organisation to manage the new venture alongside those of your joint venture partner.
Your report should highlight the HR functions as listed below. Your report will analyse a minimum of 2 and a maximum of 3 of the following HR Practices:
1. Recruitment and Selection
2. Training and Development
3. Reward Management
After 1 - 3 above you have to include the following approaches to the HR practices :
In each of your chosen areas of HR practice, please identify how your recommended strategies will impact upon:
I. Organisational Performance
II. Employee Commitment –
III. Workforce Flexibility
I. Workforce Quality
In addition the report should include:
The purpose of the report – a brief overview of the selected sector for the last five years and its developments and challenges and future needs. This assignment will assess all of the learning outcomes for this module.
To help you address each learning outcome a brief explanation of what your tutors will look for in your assignment accompanies each learning outcome below:
Your data response should include an analysis, using both qualitative and quantitative data, of the following:
• Key economic drivers in the Host country
• A comparative analysis of HR systems globally
• Organisational issues that influence the development and implementation of HRM strategy (Cross-cultural training for expatriates, T&D section) and the social aspect of the host country in the (PESTLE analysis). Please use the following structure below as a guide to the content your tutor(s) will expect to see in your assignment based upon the learning outcomes being assessed.
Assessment Questions Learning outcomes
What are the economic drivers influencing the HR strategies in the host country? For example you can apply PESTLE analysis to analyse the host country’s economic profile as well as other factors such as (Globalisation, Consumer Behaviour, Advanced technology etc.) These areas can be discussed under this learning outcome. L01: Critically examine the economic drivers in the international business environment that influence HRM strategies
Evaluate HRM theories (such as Universalistic, Contingency and Configurational theories) that are most appropriate for your organisation to adopt in the host country, given its current economic conditions. L02 Evaluate the main HRM theories and models in relation to economic drivers
Critically examine how HRM strategies are effective in achieving goals of employee commitment, flexibility, quality and strategic integration. Under this learning outcome, we expect you to critically analyse the models and theories in designing policies and practices (such as Soft and Hard HRM) to achieve four main outcomes: strategic integration (planning / implementation); high employee commitment to the organisation; high workforce flexibility and adaptability; and a high-quality workforce. L03: Evaluate the effectiveness of HRM strategies in achieving the goals of employee commitment, flexibility, quality and strategic integration
Critically analyse the different approaches of HRM globally in your chosen parent and host countries. Provide a global comparative analysis of HR systems with a focus on:
1. Organisational Performance
2. Employee Commitment –
3. Workforce Flexibility
4. Workforce Quality L04: Critically Analyse the differences in approach to HRM Globally and outline possible reasons for such differences
Critically evaluate HRM strategies and its impact upon organisation performance. For example, organisational performance can be connected to operational performance, productivity, service quality and innovation and as well as attitudes and behaviours of employees such as employee (commitment) motivation, job satisfaction, organisational citizenship behaviour, commitment, and trust in management, L05: Critically evaluate the theory and evidence about the relationship between HRM and organisational performance
Critically Analyse the cultural differences influencing the implementation and development of HRM strategies. We expect you to use models such as Hofstede, Trompenaars, Lewis. Hall etc. here to highlight the differences in national culture between the parent and host countries and how they influence HRM strategies. You could also apply Hardy’s Organisational culture model to identify what working practices and mind-set barriers might the parent company face in terms of recruiting and training local staff on new technologies, etc. to establish an appropriate standard of work to match the parent company’s expectations. L06: Analyse the organisational, national and cultural specific issues that influence the development and implementation of HRM strategy
Here we are looking to evaluate your management skill in regards to international business strategies as well a critical analysis, research skills and ability to present a coherent set of recommendations based on well researched HRM global theories and models. Such as Rodger /Fraser , Ask And Total Rewards models. L07: Demonstrate the management skills required in international business to successfully engage and win support from key stakeholders
Please note for this module there will be a formative assessment on Diversity and Equality in relation to the Companies going overseas and how they will adapt with diverse workforce and different Cultural aspect etc.
Human resource management is a critical function to any organisation and involves the management of employees. At starbucks HRM helps in the development of the necessary attitudes, skills, and behaviour among employees to achieve their set goals. The coffee and snacks industry has been growing exponentially especially in South Asia driven by growth in the Chinese economy. The purpose of this paper is to look at how Starbucks HRM strategy in the industry and how to use it to drive better recruitment and selection, training and development and also the rewarding of employees to help drive growth in their joint venture with a Chinese partner. A review of the environment in which the business will operate will be done to help in understanding of the best HRM strategy to adopt in the country. Aligning the goals, mission and vision between the two businesses can help in development of a good HRM strategy which meets Starbucks needs and those of the partner.
Table of Contents
Executive Summary 2
Company Profile 5
Industry Drivers 6
PESTEL Analysis 6
HR Theories 8
Universalistic Theory 8
Contingency Theory 9
Configurational Theory 9
HRM Strategies 9
Recruitment and Selection 9
Training and Development 11
Reward Management 12
Human Resource Management involves adopting strategies which help an organisation achieve competitive advantage. Human resource strategy incorporates principles which help in management of the workforce through adoption of good employee management practices and policies (Bibb 2016, p. 12). Starbucks Corporation understands employees are an integral part in the company’s growth and that they can help the company achieve set goals. With other major players in the industry also utilising HRM strategies to gain a competitive advantage, Starbucks needs to create a proper system of personnel management to guarantee continued success. Aligning an organisations vision, goals and mission with the HR strategy, is needed especially in cases were partnerships come into effect (Beardwell & Claydon. 2010, p. 18). HRM strategy adopted affects employees and manifests itself in their work productivity and level of motivation. Other competitors in the coffee and snack industry such as McDonalds have established HRM strategies. Therefore, a close look at the best practises in the industry in terms of recruitment and selection, training and development and also rewarding of employee would help Starbucks align their strategies with their partners. The aim of this report is to look at the HRM strategies at Starbucks and how they can utilise it to enable smooth operations in their joint partnership. Aligning the HRM practise with the existing theory will enable Starbucks understand how to manage their employees with those in the new location to maximise work productivity. A look at the industry will help Starbucks align their practices to match the established system and also the industry practices in China. Some recommendations will also be provided on how Starbucks can improve their strategy for better operational efficiency in the partnership.
Starbucks is a coffee company that was founded in 1971 at Seattle in the United States and has operations across the world. As at 2016, the company operated more than 23, 500 outlets and has an average of 240,000 employees globally. The company has assets which stood at $12.5 billion dollars and the operating income stood at $ 1.2 billion dollars. Starbucks is a globally recognized company with operations in more than 49 different countries (Geereddy 2017, p. 5). The company is widely recognized and respected because it offers quality coffee and a good customer service. Some of their well recognizable products include espresso, caffe latte, fresh juices, and teavanna tea products. Creating a system which ensures that all employees are focused on a similar goal is vital for the company and can help it in ensuring the partnerships they engage with are aligned with their policies on the management of personnel. Starbucks believes that the work environment should be healthy with all employees treated with dignity. Good customer service is also valued and is captured in the company vision that looks to inspire and nurture the human spirit (Geereddy 2017, p. 3). The company mission is also developed with a consideration on promoting those values.
The coffee and snack industry which Starbucks operates in has grown and China where the company is setting their operations is a leading growth market. In the next five years the industry is expected to grow at a 3.9% rate and generate revenues of over $ 35.1 billion In China (Guest 2016, p. 22). Through PESTLE analysis it is possible to better understand the industry in China and how Starbucks can align particular aspects of HRM and business in general. The analysis will give Starbucks a view of the environment in which they will be operating in as the partnership kicks into gear. China has in the last few decades continually adopted proper HRM strategies as they look to achieve competitiveness at the international stage (Mathis & Jackson 2012, p. 39). The intention is to transform their operations to instill western style corporate culture. An example is ensuring improved two-way communication between employees and the management, proper recruitment and training as well as offering of good salaries and other rewards to improve employee motivation and loyalty (Langdon & Green 2004, p. 31).
Globalization has changed the method of conducting business across the world. The businesses which can survive are those that find strategies to perform in different political systems (Nel 2016, p. 17). Starbucks will need to ensure that they understand the employment policies so that they can align their strategy with that of China. China has tried to change their political systems to loosen their employment and labor relations to match the western standards which can work positively for Starbucks.
Economic factors play an important role in ensuring that the company establishes the best practices to guarantee success. The amount of revenues generated in a particular market determines the amount of pay which the employees can receive without hurting profitability (Osibanjo & Adebanjo 2012, p. 10). An understanding of the interest rates and how they fluctuate is important because it directly affects the investment plans and also the ability of selected suppliers to meet demand. Such can affect the amount of sales and this will in turn affect the expansion plans of a business in the new market China has stable interest rates favorable for investment meaning Starbucks will benefit especially as they will have a joint venture with a local business.
Identifying the culture of a people and how to meet their expectations is vital to a company. It also tells about the work ethics which to expect in the country (Weiss & MacKay 2009, p. 16). China is a tea drinking nation and there is also a feeling that starbucks is a luxury brand which goes against some of the values instilled in the Chinese population. However, the young generation holds different values making them better targets for Starbucks. Looking for ways to encourage such a demographic to visit the stores would be helpful they would also be good candidates for the job positions.
Technologies available in the current world have transformed virtually all businesses. Incorporating technology in the business will enable it to achieve the desired effect as the current generation is attracted to the businesses which adopt the best technology (Sears 2003, p. 54). Starbucks utilizes their mobile based application to help know about customer needs. The app also allows customers to make orders in advance improving the quality of services delivered. Providing internet in the outlets has virtually become an industry standard meaning introducing it would help improve customer experience in their location (Pulakos et al. 2015, p. 11).
Different countries adopt varying laws and keeping in touch with the changes is vital. Understanding the restrictions which exist and laws related to certain products is crucial. There are also laws relating to employment, safety regulations and health which the business will need to understand as they set operations in China (Weiss & MacKay 2009, p. 65). Starbucks should understand the laws of doing business in the partner’s location to avoid breaking laws.
Starbucks should take into consideration the environmental laws and avoid actions which lead to environmental pollution. Planning and disposable waste regulations also vary and Chinese government is increasingly demanding proper following of the environmental laws as they implement the Paris climate change agreements.
There are different theories which can help Starbucks enjoy success in China and ensure that there is proper integration of the employees from the two companies to create good workplace. There are different theories which have been used to instill human resource management discipline and the ones adopted should match the needs of an organization (Sears 2003, p. 10). Starbucks will need to adopt the best theory which supports a growing economy and the Chinese laws. Top managers have the duty of developing the HRM practices utilized in their organization and ensuring that it is implanted in the organizations philosophy (Ferner 2007, p. 32).
Ensuring that there are good human resource practices is important because they are closely related with organizational performance. Some of the best practices in the field are universal and can be applied in any location across the world (Ferner & Quintanilla 2008, p. 8). Starbucks has had operations in several countries and have practices which can be utilized in their new partnership. Proponents of the theory argue against implanting aspects such as environment, culture and heterogeneity of the people in HRM policies (Ferner & Quintanilla 2008, p. 9). Therefore, adopting the universal policies which are accepted in the country and also across the world they can become successful. Universalist theory demands an adoption of standardized practices. Some of the universal practices in HRM include employee ownership, skills and development, employment security, and recruitment and selection among others (Dowling & Welch 2005, p. 11). Starbucks can adopt this in the initial stages as they seek to align their strategy with local demands.
Each country has varied work practices and organizations need look to adjust their HRM strategies depending on the size of the organization. Some of these variables include the organization size, company age, technology and the degree of unionization in a given sector (Edwards 2008, p. 22). Starbucks is a reputable organization and their operations should ensure they are open to slight changes to match the Chinese market. Starbucks can deploy this theory with as they will need to match the practices of the partner to enable smooth operations and avoid being viewed by the partner as being un-accommodative of their policies. This should go on until the two gains a common ground and adopt strategies which are agreed upon by all participants.
This requires identification of holistic principles through adoption of unique factors in an industry. However, Starbucks need to adopt policies applicable in other countries and by other players in the industry. Utilizing combined approaches for managing employees in the organization is vital and this theory demands utilising a number of strategies which work for a particular organization (Dowling & Welch 2005, p. 11).
Recruitment and Selection
The recruitment and selection process adopted in an organization plays a huge role in how the organization achieves set objectives. Starbucks understands this and has set out to recruit employees who can help in accomplishment of the business mission. A partnership with a new company will demand a good way of selecting and assimilating their employees with those of the partner to meet set objectives effectively. The selection strategy at Starbucks looks to match the nature of the job which they are employed to accomplish (Blesch 2015, p. 10). Selecting employees who match the tasks, there is little need for further training which could be costly to Starbucks. Having established operations in different markets means that the Starbucks has experienced workers and managers who have the ability to choose employees who match the work at hand ensuring quality work is accomplished (Bibb 2016, p. 58). The selection strategy which emphasizes good experience for the role one is selected to accomplish will mean that they can provide the needed services to customers helping accomplish tasks. Selecting the right employees also plays a major role in proper retention rates as employees will feel comfortable accomplishing their duties (Doverspike & Tuel 2000, p. 11).
The recruitment policy at Starbucks emphasizes selecting the best employees for the frontline staff. This is because they are in direct contact with the customers and ensures that the service provided is the best (Geary & Roche 2001, p. 43). Starbucks ensures that those employed are those that have a highly dependable, adaptable and those who function well in teams. Such is important because it helps create a harmonious workplace helping improve overall performance at all outlets (Greer 2015, p. 17).
Starbucks uses interviews in their recruitment process where the selected candidates take part in activities such as coffee tasting. Such processes will ensure that potential employees have a firsthand knowledge of the quality which the company expects even before they join the workplace (Geereddy 2017, p. 23). Candidates are also required to provide their responses in had written notes instead of providing typed letters. Use of phone calls for communication purposes is also encouraged at Starbucks. Such a strategy is vital in ensuring that the company knows the response time of the potential candidate. This can be used to gauge how they will treat the customers and also indicate how easily they are adaptable or flexible to changing circumstances (Langdon & Green 2004, p. 38). Although most of the activities may be repetitive at the outlets, each workday presents challenges and having employees who can handle issues professionally is crucial to customer satisfaction. This works to improving the performance of the organization as the sales will increase.
Having a system which can anticipate the need for new employees is needed as it will give Starbucks the ability to select prospects with the necessary qualifications. Lack of an ample time to select and replace employees will result in a situation where there is no proper vetting of talent and experience to match what is needed (Mathis & Jackson 2012, p. 11). Taking time to choose the best candidate will result in better commitment to the organization leading to low employee turnover which affects performance. Using new methods such as psychological testing of prospective employees ensures that employees suit the organization. Employing the varied methods in the recruitment and selection of the employees will ensure that there is a proper inventory of the employee strengths and weaknesses will ensure that they will not be put in positions where they are vulnerable (Guest 2016, p. 27). Such a method will ensure that Starbucks can get the maximum out of each employee helping improve overall job and organization performance.
Training and Development
Development of companies does not just depend on the human capital they have in stock, but also on the ability to increase the investment on those within the business. Starbucks should view training as an investment rather than a cost to the organization. An annual budget should be set for the training of employees working for Starbucks and their partner in China. Training programs should be developed depending on the different job levels. This ensures that those selected are well suited and that the training gains the intended effect (Pritchard 2007, p. 20). Because Starbucks has a reputable training program training programs and trainers will come from their existing program but tweaked where necessary to meet changing needs in the organization.
The training and development of the employees is vital as it improves and optimizes the level of their performance. Ensuring that each employee receives at least 40 hours of training each year is vital as their professional knowledge will increase (Allison 2007, p. 10). Such will give the assimilated employees and those form Starbucks a proper channel for harmonizing understanding of all employees. Synchronizing the knowledge among the employees from the two organizations will help improve the quality of work. Only through training can activities such as promotions can be considered as those who perform better will be known throughout the organizations (Anthony, Kacmar & Perrewé 2002, p. 2). Training needs can be identified after conducting individual assessment of the employees. This will ensure that they received training on sectors which can lead to better personal development.
Starbucks also utilizes on-the-job training as a primary source of learning at Starbucks. Managers have the responsibility of coaching and guiding employees so that they can succeed in their current positions. Starbucks employees know the need for continuous improvement and also sharing knowledge with the employees. Attending the training program should not be seen as a reward but as part of an ongoing development.
The advantage of having the proposed training and development programs is that the level of employee harmony increases. The level of employee retention increases as they gain the skills which make them more comfortable in the positions they occupy. The increased training leads to better job efficiency as the training will include methods of making and performing better at their job as well as a myriad of other activities which are vital to the success of the partnership (Anthonys, Kacmar & Perrewé 2002, p. 8). The training program is also vital as it helps the employees understand how their work impacts starbucks. Such a system and a proper method of measuring performance will help employees understand where they stand relative to their peers causing them to improve their output. Monitoring the employees so that the efforts of the training do not go in vain is vital and helps create a proper response to the programs. Employee relations will also improve as they will know that Starbucks is committed to their work development making them more committed to ensuring success of the partnership. Through the training there is an open discussion of the difficult scenarios which they encounter and collective solutions formulated which will help improve overall performance at Starbucks and their Chinese partner’s outlets.
It involves set methods of rewarding employees who show exemplary performance. Starbucks is an organization that is well known for valuing the people as it is captured in their vision statement. Starbucks provides free health care to their employees including vision and dental health. There is also a stock option given to the employees so that they can become owners of the business. Employees who work for over 20 hours and do this for three months receive free shift drinks. An initiation of proper performance management system is vital as it gives the business the ability to offer promotions based on merit. The performance evaluation should be done each half year and the raise in salary can be between 0 to 5%. Although there is no policy to provide monetary bonuses to employees there are several non monetary awards such as giving out 30% discounts for the goods they purchase at starbucks (Beardwell & Claydon 2010, p. 43). Partners who do business with starbucks are also rewarded through a number of programs. The partners who contribute adequately to the success of the organization are provided with a peer recognition cards. The contributions by teams are also closely monitored to ensure that their performance is also closely evaluated to ensure that they are also rewarded.
The importance of having the reward systems in place at Starbucks business in China is that the employees will feel more connected to the business. Provision of free healthcare services shows the employee that the business cares about their welfare which induces loyalty and commitment to the work. Making the employees part owners is also seen as a good way of ensuring that there is low employee turnover and also help improve job performance. This is because the employee understands that their investment is also at stake and closely linked with how the firm performs. Recognition good performing teams are good as it helps create a sense of togetherness and helps improve employee commitment (Bibb 2016, p. 18). The fact that the employees will be more satisfied means that they will offer high quality service to their customers. The fact that Starbucks is ranked among the top best places to work by fortune means that the employees are well taken care of and this means that they can perform at the needed level. This gives Starbucks the ability to attract well qualified employees for the different levels making the organization to have good quality employee.
Human resource management has increasingly become a source of competitive advantage to organizations. The practice helps a business to perform better as there is a proper utilization of the human resources. This is because there is a good and efficient service given to the customer making the performance of the organization better. Each industry has some laid down practices and human resource management which have been developed to ensure proper performance. Starbucks is a leading business in the coffee and snack industry and with the ability to expand their business to the new markets such as China where they hope to establish a new joint partnership. Human resource strategy involves making good choices with regards to the management of people and employees within an organization. The coffee and snack industry has been growing exponentially and with China being the growth driver in the world, choosing a partner to help penetrate the market is needed. Because starbucks is the major organization their established management practices. The recruitment practice will involve choosing employees who are suited for the job. It is also vital to avoid panic hiring as it will be hard to choose employees who fit the organization. Training the employees also helps equip them with the latest developments in the industry and also the best practices to ensure proper job performance. Reward programs at Starbucks have also helped ensure proper employee commitment. All the efforts are done to ensure that the partnership Starbucks establishes in China achieves success.
Although Starbucks is one of the leading organizations in the world, there is a need to ensure that they adopt HRM practices which guarantee success in the partnerships they establish. The Chinese market is complex and Starbucks should only choose a partner who has some relative experience in the market. A strong commitment to the people who work for the entities will ensure that they can increase performance. Understanding the market conditions will only be possible if the partner in China has conducted better survey of the social needs of the people.
Although the recruitment practices at Starbucks have been commended for their ability to get the best from their employees, getting the assimilated employees to work together with those of the partner’s is vital. This will be achieved through choosing workers who can perform better in a team environment and those that are adaptable. The culture difference should not be the reason that the two teams cannot work together.
Training programs which the businesses establish should ensure that all the employees in the partnership created can improve output. Tailoring the programs with the aspiration and values which the Chinese government demands from the corporate world would be crucial. Teaching the employees how to handle the Chinese culture and what to expect from their customers will help improve quality of service provided and also help improve organizational performance. Helping the employees improve their skills and translate the principles and mission to ensure standard quality will be needed and this can only be achieved when both the Starbucks and the partner’s employees understand the values which have helped the organization become successful overtime.
Offering incentives and rewards through merit is crucial as it eliminates the feeling of victimizations which hampers work group harmony and productivity. The rewards should be given after an open and transparent performance review of all employees and the results provided so that each can see where they can improve to become even better at their job. Monetary benefits have also been found to provide better motivation to employees. Therefore, Starbucks should ensure that they increase the level and number of monetary rewards to their employees. Monetary rewards also have long-term effects meaning Starbucks should consider them seriously as a way to motivate and improve commitment to the work.
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