Discussion 3 (Chap. 5&6)

Please see instructions under Discussion 1

Instructor Question:

We know that when employees can see a clear linkage between the objectives of a customer-centered strategy and the pay system (job- or skill/competency-based plan), they are more likely to focus their work efforts on achieving the objectives associated with the customer-centered strategy. Given this, based on your opinion and the readings or lectures, what are some specific actions/steps a manager can take to ensure that job evaluation or skill-/competency-based plans support a customer-centered strategy?

Discussion 1

Take any organization you know – current employer, business school, the place you interned, or a friend’s employer. Look at Exhibit 2.7, “Contrasting Maps of Microsoft and SAS.” in your textbook. Map your organization’s compensation strategy then compare it to that of Microsoft and SAS.
1. Summarize the key points of your company’s strategy.
2. What are the key differences compared to the strategies of Microsoft and SAS?

Reply:

I am an employee at Starbucks, an international coffeehouse chain with a high culture and involvement of the employees. The compensation plan of Starbucks focuses on both monetary and comprehensive benefits to encourage the welfare of the employees, who are referred to internally as partners. The total compensation in the HR strategy is a supporting but significant contribution. Although pay is a motivating factor for the employees, the company supplements it with long-term benefits, stock options, and career development prospects, making the employees feel like they own the company and are loyal to it (Minenko and Mujtaba, 2024). Prominence is midrange; salary is crucial, but it is combined with other programs like training employees, flexible work hours, and wellness and health programs to provide an end-to-end employee experience.

Comparing Starbucks, Microsoft, and SAS, its strategy is similar to that of SAS, supportive versus the highly performance-driven Microsoft. At Starbucks, internal alignment is organized yet comparatively egalitarian, with the compensation between entry-level baristas and store managers having a smaller margin of performance than the expansive range of performance-based gaps at Microsoft. Starbucks has well-defined promotion and educational benefits, like Microsoft and SAS, yet without the attraction towards big financial compensations (Martocchio, 2021, pp. 54 – 65). Starbucks has competitive remuneration as seen in the retail sector. They provide a life-work balance, provide tuition reimbursement, stock programs, and healthcare access. These align with SAS as employees are considered in the benefits offered. Instead of compensating people on a personal basis, Starbucks compensates people on a team basis, and teamwork is more important to them. Pay is managed openly, and HR and store management actively communicate on compensation policies and manage payroll and benefits using technology.

The compensation approach of Starbucks focuses on fairness, teamwork, and employee growth and does not rely on strictly performance-based rewards. Contrary to the highly visible and competitive pay that Microsoft implements or the egalitarian supportive system that SAS utilizes, Starbucks incorporates supportive compensation with career growth and well-being programs so that it remains engaged and retained in the retail service environment.

References

Martocchio, J. J. (2021). Strategic compensation: A human resource management approach (10th ed.). Pearson.

Minenko, M. and Mujtaba, B.G. (2024) Diversity Audit at Starbucks: Assessment of Workforce Demography, Inclusion Initiatives, and Corporate Culture, Business Ethics and Leadership, 8(3), pp. 173183. Available at: https://doi.org/10.61093/bel.8(3).173-183.2024.

Requirements: respond to question

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