EMPLOYEE MOTIVATION

Illustration through case study:

Case Study: Starbucks

Being the largest coffeehouse in the world, Starbucks has over 217,575 employees in 16,635 stores all over the world. The main aim of Starbucks is to ‘provide a great working environment and to treat each other [employees] with respect and dignity’ and this is the first point in their six-point mission statement. Attracting, motivating and rewarding employees using an approach that would make Starbucks a place that people would want to work for was the main challenge faced by Howard Schlutz, the CEO of Starbucks.  Starbucks’ employee relation strategies have led to it achieving a ranking in Fortune’s list of ‘100 Best Companies to Work For’ year after year (Fortune, 2009). In 2006, Starbucks’ employee turnover rate was 65%, which was 250% lower than the average in the industry (Michelli, 2006).

Starbucks does not rely merely on economic motivators to make employees achieve high performance levels. Its employee motivation practices are aligned with Maslow’s hierarchy of needs theory. Starbucks motivates its employees by fulfilling their lower order needs and providing them with a potential to achieve the higher order needs.

• Physiological Needs:

Starbucks caters to its employees’ physiological needs by providing them with a pay scale that is above the market average, allowing these employees to fulfill their basic needs such as food, shelter, water, etc.

Furthermore, Starbucks also provides these employees an opportunity to become its shareholders (Thomas & Wilson, 1999). The stock option plan was started in 1991 by Schlutz in order to help attract and retain a motivated workforce. Schlutz believed that granting the employees an option to purchase stocks would give them a sense of ownership in the business (Andrejczak, 2009).

• Safety Needs:

Starbucks has provided its workforce with one of the best benefits package available worldwide. Providing part time workers with benefits is not exceedingly applied in American corporate culture (Marques, 2008). On the other hand, Starbucks provides its part time workers with the same medical insurance, such as health, vision and dental, as a full time worker (Weber, 2005).

Besides the health insurance, Starbucks offers several other benefits in order to cater to its employees safety needs. It also offers its staff referrals and support resources for child care (‘The Starbucks Experience’, 2005). Moreover, to help them feel protected, Starbucks also grants its employees with emergency financial aid if and when needed. Further, workers are also given paid time off (‘The Partner Experience’, 2010). Starbucks has realized the individual needs of its employees and managed to provide them with a safe working environment.

• Belonging Needs:

Starbucks is very well known for the feel-good atmosphere maintained in all its coffee places. Working at Starbucks has been described as ‘The Starbucks Experience Michelli, 2006)’ and ‘it’s a lot like working with friends (Starbucks, 2010)’. According to Dave Pace, the executive Vice President of Partner Resources, the company has managed to achieve this by staying ‘small’ even as they grow (Hammers, 2003).

Starbucks also instills a sense of community and belonging into its employees by holding ‘Open Forum’ events. During these events, the senior management answers all the doubts or queries an employee has. It helps the workers be informed about the happenings at Starbucks and also provide them with a platform to engage with other employees (‘The Partner Experience’, 2010). A candid and open relationship exists between the Starbucks management and the employees ensuring that the employees perceive a sense of acceptance in the organization (‘The Partner Experience’, 2010)

• Esteem Needs:

As mentioned above, the first guiding principle in the company’s mission statement is to provide a great working environment and to treat all the employees with dignity and respect. Starbucks caters to the lower esteem needs of employees by referring to all employees, regardless of the position held in the organization as partners. All the partners in the organization are openly valued and respected and Starbucks also realizes the fact that their success is all due to its invaluable workforce (Starbucks Newsroom, 2010). This is the chief reason behind Starbucks being listed in the Fortune’s “100 Best Companies to Work For” list in 2009 for the 11th time.

Starbucks helps its employees achieve their higher esteem needs by providing them with extensive training. The ‘baristas’ (counter help staffs) are given comprehensive training in their job: drink preparation, customer service, retail service and using the cash register. The managers are provided with a higher level training such as store operations, information systems, etc. (Auch-Roy, 2004).  Providing training has helped ensure that higher levels of performance are obtained due to the staff members being competent and obtaining mastery in their job.

• Self- Actualization Needs:

The self- actualization need is more pertinent on the individual himself and less on the external factors. By fulfilling the physiological, safety, belonging and esteem needs of its workforce, Starbucks ensures that the employees have the potential to meet their self-actualization needs.

Reinforcement Theory

The performance of any individual is quite simply based on two things; firstly, the skills and ability of that individual and secondly, how motivated he/she might be to perform at work. While the former relates to education and experience which a manager does not usually have control over, the latter can be influenced. There are a number of theories which have been developed for employee motivation and in this section we will be looking at one such theory which is the ‘Reinforcement’ theory.

Reinforcement theory explains that the consequences associated with a behavior help shape the behaviors an employee engages in (Lindner, 1998).  Employers are generally, in the position to influence these outcomes through ‘direction, level and persistence of motivation’ (Baqir, 2009). Any behavior that leads to a consequence is called operant behavior. Therefore, you will find it common that reinforcement theory is often referred to as operant conditioning. For instance, when an employee is faced with a task to do at work, their level of motivation depends on past rewards or punishments. This brings us to the four types of reinforcement approaches:

• Positive Reinforcement: Positive reinforcement is when a manager increases employee motivation through positive actions like praise and rewards (Lindner, 1998).

• Example: Every time an employee reaches a desired goal, giving him/her praise in front of their peers and colleagues is a form of positive reinforcement.

• Negative Reinforcement: Negative reinforcement works to increase the desired behavior inorder to stop unfavorable or negative actions from occurring (Milbourne & Francis, 1980).

• Example: To avoid cuts in allowances or benefits, employees are motivated to perform well.

• Punishment: Using punishment in light of reinforcement theory is quite simple. In order to prevent an undesired behavior from occurring, an unwanted or negative stimulus is inflicted (Terpstra, 1979).

• Example: If an employee’s performance is abysmal, the manager might choose to reduce the benefits offered to the employee.

• Extinction: This also aims to reduce the occurrence of a behavior by not presenting any reinforcers; neither negative nor positive.

• Example: If an unhappy employee’s complaints fall on deaf ears, the employee will eventually cease to complain.

Illustration through case study:

Case Study: Mary Kay Cosmetics

With a sales force exceeding 2 million, Mary Kay Cosmetics® is considered to be one of the top brands in the cosmetic industry. 70% of the employees at Mary Kay are women and the company offers a diverse range of incentives in order to motivate them. Mary Kay Ash, founder of Mary Kay believed in providing its female workforce with opportunities to thrive and succeed and therefore, several motivating techniques have been implemented in order to achieve this. (Mary Kay Inc., 2010).

The incentives offered at Mary Kay are not merely monetary because within Mary Kay exists a strong culture of ‘praising people to success’ (The shoe that fits, 1996). The company has managed to attain a competitive advantage due to the motivating techniques deployed. Mary Kay Cosmetics was recognized by the Working Woman magazine for the commendable working atmosphere provided for the female executives to prosper and flourish.  When the motivating strategies were implemented back in 1982, the company saw a 16% annual increase in sales and realized a 30% annual increase in profits (Fox & Bruce, 1994).

So what motivating technique adopted was that led to this company achieving soaring profits? At Mary Kay, it is believed that “the road to long term success is paved by short-term achievements” and therefore, 6 levels of awards are offered to the sales force (The shoe that fits, 1996). Achieving a sales quota or bringing in new people for sales are two of the criteria on which benefits are rewarded. Moreover, creativity is also rewarded and ideas that reduce company costs or save money are compensated. The company embraced a positive reinforcement approach, whereby employees are rewarded on the basis of their performance.

Praise is the ‘no expense’ motivating solution adopted by Mary Kay: employees achieving their sales quotas are listed in the company’s monthly magazine, Encore. This way, the company ensures that all efforts are recognized (The shoe that fits, 1996) and the morale of the employees is boosted. If Mary Kay’s employees do something that she likes, then they are praised with a hand written letter and a few gifts which shows the warmth and support of Mary Kay towards her employees.

 In addition, the workforce may be gifted something as simple as the basic necessities of life such as kitchen appliances and sports equipments to recognize their efforts. As per Mary Kay Ash, women require appreciation and motivation throughout. From the first week itself, the employees get rewarded for their first $100 sale.  

Moreover, the annual program consists of trips to exotic locations such as Paris which are rewarded to top achievers. 2 of the emblematic rewards offered by Mary Kay are quite well known to the public: the pink Cadillac, also known as “the Caddy” or the “Wheels of Fortune” (Mary Kay Inc., 2010), and the “diamond bumblebee” (Templeton, 1985). A new pink Caddy is offered to the top national sales directors every 2 years for life.  Likewise, during one of the seminars, Mary Kay distributed $1million in diamonds and furs not only to the employees but also to their spouses (Templeton, 1985).

Recognition is the something extra that is offered for doing something extra and this has seemed to work very well at Mary Kay Cosmetics, for both the employees and the company itself (Templeton, 1985).The reinforcement theory proved to be a potent management tool at Mary Kay. An ingenious reward system was applied by Mary Kay Cosmetics which resulted in the significant motivation of employees and extensive profits for the company.

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