Starbucks UK HRM Strategy - How Not to Win Friends and Influence People

Starbucks in the UK is suffering from some pretty terrible publicity at the moment and this news about some changes in its UK HRM strategy probably don't help the mood amongst the baristas and other employees in Starbucks outlets...

The debate about Starbucks and tax avoidance is a significant one and is really about business ethics and corporate objectives. Like many overseas-owned businesses, the corporate objective to maximise shareholder value results in a strategy of minimising the profit-related taxes that the company pays around the world. You would expect nothing less by such businesses – but the furore over tax avoidance in the UK has been a public relations disaster for Starbucks from which it will take some time to recover.

All of which makes it a little surprising that Starbucks management in the UK have implemented a change in the terms and conditions of employment for its staff – which has also created some adverse publicity.

The Guardian reports here on the changes which Starbucks UK staff have been asked to accept.

For example:

“The new contractual terms being circulated to staff across 750 stores include the removal of cash incentives for becoming manager or partner of the year in favour of the award of a plaque and the removal of a bonus scheme for women returning after they have had a baby because it is not considered a valued benefit”

It gets worse for Starbucks staff…

“Even apparently minor benefits are being cut. Starbucks is ending the practice of giving hampers to new mothers in favour of "a card and Starbucks baby grow and bib". The new policy on staff birthdays orders: "Removal of birthday cards. Bakery good code to be issued in store for free birthday treat." Congratulations cards on the anniversary of the first four years of service are being withdrawn.”

Will these changes make a significant difference to the employment costs at Starbucks UK? I suspect not. However, the potential damage to staff morale and motivation might be more significant, although that is much harder to measure.