Starbucks
Starbucks is a coffeehouse chain in the world with headquarters in America, Seattle, Washington. The company operates in over 77 countries with different locations serving whole-bean coffee, hot and cold drinks, caffe latte, among other products. Starbucks has remained a successful company despite the competition and changes in international work and the economic environment. The success can be attributed to the effectiveness of different systems applied by the company, including the performance management system. The performance management system involves activities aimed at reporting and managing progress to stay ahead of the competition. While companies use different performance management systems, the one applied at Starbucks is the Total Quality Management (TQM) system. Total Quality Management is a system based on a belief that organizations can be successful even on a long-term basis by having all their employees focus on quality hence meeting the customers’ satisfaction.
Since Starbucks has been on the top list of the most performing companies globally, it is clear that the Total Quality Management System has been useful. This system’s primary purpose is to ensure there is a continuous effort to maintain the quality of products that the company produces. The system is aligned to different aspects of the company, including the mission, vision, values as well as the structure of the organization. For instance, one of the goals that the mission of Starbucks aims to achieve is to satisfy customers and promote a good corporate relationship with the neighbors. The TQM system also has instruments and methods such as the personal development plan, which aligns with the company’s vision. One of the goals of Starbucks’ vision statement is to provide the most excellent coffee in the world which and also not compromise on set principles. This goal is achieved by ensuring that the employees are trained based on their performance needs. The company identifies specific development and training needs, and these techniques are vital in creating a culture of high performance within the organization. Starbucks strives to achieve the set values, including creating a culture where everyone feels welcomed. The company understands that employees who are motivated, well trained, and recognized for performing well play a significant role in making the customers feel welcomed. As such, the TQM system includes the performance appraisal method and reward and recognition programs that motivate the employees in the manner they handle customers. The Total Quality Management System also aligns with the matrix organizational structure that involves intersections among different business components.
The Total Quality Management System provides a range of benefits not only to an organization but also to individuals. One of the positive aspects of TQM is that there are fewer defects in commodities produced. One of the system’s principles is that it requires the creation of quality products; hence, customer complaints are significantly reduced. The other positive aspect of TQM is that customers are satisfied since their needs are met. Satisfied customers translate into an increased market share and the creation of loyal customers. Quality products from Starbucks mean that the company incurs lower costs. This aspect prevents the replacement of products from customers who are not satisfied, hence leading to cost-saving flow to the bottom line and increasing company revenues. On the other hand, the main negative aspect associated with the TQM system is the need for company-wide commitment to producing quality products and the difficulties associated with this commitment. For a company to use this type of policy, all management levels must coordinate, and any lack of resources would cause a negative ripple throughout the organization.
One of the instruments and methods involved with the Total Quality Management System is the performance appraisal, which helps assess how well each individual is doing their job. When working with a large company such as Starbucks, it is difficult for an employee to weigh if they are making an effect. Therefore, the unique contribution of performance appraisal is that it helps an individual to understand their contribution to the organization, and the company benefits from understanding specific training needs for the employees. The other instrument is the application of 360-degree feedback, which provides a broad assessment of employees based on the views of those working around them. In Starbucks, employees work in booths with nine people whose tight relationships enable them to share information on how to improve each other’s performance. The incentives that come with increased production, such as employee of the month and monthly budgets, helps the company to offer quality products and be motivated. Lastly, the TQM system includes the personal development plan, which is tailored to support employees’ personal development. The company identifies the specific development needs of an individual and creates training to help cater to those needs. This method contributes to improving the employees set out how they want to grow and the steps that need to be fulfilled. This method has helped individuals to feel more invested in the company.
The suggested recommendation is the performance management frameworks, which would help to improve the Total Quality Management System by using the Balanced Scorecard. A Balanced Scorecard is a tool used to execute different strategies within an organization by helping them to identify the strategy and communicate their priorities and business objectives. The tool also helps an organization to monitor progress and to what level the goals are being delivered. Lastly, the Balanced Scorecard also helps a company to ensure that actions aimed at implementing the business priorities and objectives. This instrument would help to improve the performance of the TQM system being used by Starbucks since it will help achieve all the set objectives without any barriers.