Home > Free Essays > Business > Financial Management > Starbucks Company’s Pay Model Implementation
Cite this

Starbucks Company’s Pay Model Implementation Essay


The implementation of the pay model is extremely useful for the companies because it provides an opportunity to “examine current pay systems”, considering a particular framework (Liza 160). For example, it can bring enormous benefit to Starbucks. This organization is very expanded today, and it has numerous employees. All of them share the value of responsibility and do their best to provide products and services of the highest quality (Starbucks para. 3). Thus, it is critical to make sure that each of them receives a decent salary. When implementing the pay model, Starbucks should consider and assess objectives, policies, and techniques related to the current compensation system.


There are three objectives related to the compensation that should be discussed in the framework of this model. The first one is efficiency. For Starbucks, it includes:

  • Constant expansion of the company and increasing revenue;
  • Enhancement of the quality of coffee and other products;
  • Improvement of the quality of services and employee performance;
  • Increasing the number of delighted customers and stockholders;
  • Existence of the benefits package;
  • Competitive salaries (Gregory para. 4).

The next objective is fairness. In its framework, Starbucks should consider whether it is willing to treat all employees equally or fairly, as it is not always the same. Both contributions and needs of the personnel should be discussed:

  • Provide identical salary for new employees;
  • Increase salary for those whose efficient performance affected the company positively and for those who performed their duties excellently for half a year, etc.;
  • Refer to one and the same way of making a pay decision (take into consideration one’s experience and contribution to the company’s success).

Finally, professionals at Starbucks should pay attention to compliance. Depending on the location of the firm, it is critical to make sure that the payment strategy and the ways developed objectives are achieved do not violate current legislation:

  • Follow laws and regulations when dealing with objectives.

In this way, if the objective underlines excellence in quality and performance, the workers should receive monetary remuneration or/and promotion for meeting these requirements.

The pay should be managed on the basis of strategic policies. Internal alignment presupposes the assessment of the skills and jobs of the employees within Starbucks. For example, the difference between a barista and a supervisor can be discussed (‘Starbucks Jobs” para. 3-4). If one of them is more concerned with customers’ and shareholders’ needs? Whose position requires more knowledge, skills, or experience? The possible difference between their payments should be identified. It would be advantageous if the gap was not huge.

In the framework of external competitiveness, it should be ensured that the personnel in Starbucks receive a salary that is not lower than the competitors’ staff has. Under the market-driven system, the workers in this company should gain more than others or at least be on the same level (“External Competitiveness” 13).

Employee contribution policies should be also considered. Those who have better performance should have some bonuses that are not available for others, such as higher salary, additional free day, etc. In this way, employees’ attitudes and behaviors can be shaped, encouraged, or altered. Except for that, Starbucks emphasizes “stock options and sharing the success of corporate performance with the employees” (Milkovich et al. 18).

Management policies should deal with the allocation of proper payment to the workers. Starbucks should consider if it can attract efficient workers and whether they receive the required training. Baristas, for example, should be able to work with the equipment. The range of duties for all employees should be described for them to know what to do. Finally, the attention should be paid to the difference between Starbucks labor costs and those of its competitors. In this framework, the company ensures equal employment opportunities. It hires people without recruitment firm assistance and provides local training. Moreover, it has compensation and benefits programs that are used to appreciate excellent performance and encourage future development.

Techniques are used to link policies and objectives. In this way, internal alignment is maintained with the help of the analysis of people and activities. For example, two baristas were needed during the shift to cope with the orders. They both were experienced, and customers appreciated the work. Information about the person and/or the job is collected, organized, and evaluated. Based on these evaluations, a structure of the work is designed.

Techniques ensure that employees’ jobs and skills correlate, and they can reach success with selected operations. Personal and organization’s objectives should correlate. For example, Starbuck is willing to provide the services of the highest quality to attract more clients, and its workers can benefit in this way as their achievement will be rewarded.

Competitiveness should be maintained with the help of market research. It can be found out whether the personnel is likely to leave the company and cooperate with its competitors because they have better offerings.


Thus, the Starbucks pay system can be developed on the basis of the previously mentioned objectives that reveal the company’s policies are reached and assessed with the help of particular techniques. As a result, the efficiency of the system can be evaluated, taking them into consideration as standards for judgment.

Works Cited

External Competitiveness. 2002. Web.

Gregory, Lawrence. Starbucks Coffee’s Vision Statement & Mission Statement. 2015. Web.

Liza, Rebecca. The Total Compensation Strategy: A Case Study of Warid Telecom Bangladesh Ltd. ASA University Review, 8.1 (2014): 157-174. Print.

Milkovich, George, Jerry Newman and Barry Gerhart. Compensation. New York: McGraw-Hill Education, 2004. Print.

Starbucks. . 2016. Web.

Starbucks Jobs 2016. Web.

This essay on Starbucks Company’s Pay Model Implementation was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.

Need a custom Essay sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

301 certified writers online

Cite This paper

Select a referencing style:


IvyPanda. (2020, August 31). Starbucks Company's Pay Model Implementation. Retrieved from https://ivypanda.com/essays/starbucks-companys-pay-model-implementation/

Work Cited

"Starbucks Company's Pay Model Implementation." IvyPanda, 31 Aug. 2020, ivypanda.com/essays/starbucks-companys-pay-model-implementation/.

1. IvyPanda. "Starbucks Company's Pay Model Implementation." August 31, 2020. https://ivypanda.com/essays/starbucks-companys-pay-model-implementation/.


IvyPanda. "Starbucks Company's Pay Model Implementation." August 31, 2020. https://ivypanda.com/essays/starbucks-companys-pay-model-implementation/.


IvyPanda. 2020. "Starbucks Company's Pay Model Implementation." August 31, 2020. https://ivypanda.com/essays/starbucks-companys-pay-model-implementation/.


IvyPanda. (2020) 'Starbucks Company's Pay Model Implementation'. 31 August.

More related papers