Motivational Theories In Starbucks

Maslow’s Motivational Theory

Discuss About The Organizational Psychology European Journal.

Human behaviour in an organization decides upon the interaction of the employees with their managers, supervisors, peers and subordinates (Mikkelsen et al., 2017). This study is concerned with the human behaviour of Starbucks. The former CEO of Starbucks Howard Schultz always believed that the success of Starbucks is highly depended on the motivation and effort of the employees to serve the customers. This study will discuss the way in which Howard Schultz has implemented the motivational theories in the motivating the employees of Starbucks. Moreover, the study will evaluate the way in which the CEO implemented Maslow’s motivational theory, Herzberg’s motivational theory and Adam’s Equity theory for motivating the employees. Apart from that, the managerial implication of these motivational theories will also be discussed in this study.

Howard Schultz used to believe that the success of Starbucks is highly depended on customers having positive experience in the stores. However, the positive experience of the customer is primarily depended on knowledge, skills and personality of the customers to deliver foods to the customers. From the view of Howard Schultz, it is extremely important for the organization to attract, retain and motivate the talented employees for engaging them with the ultimate organizational success. Moreover, the former CEO, perfectly implemented Maslow’s motivational theory for motivating the employees and leading them towards organizational success.

Maslow’s motivational theory explored the internal motivational factors of the individual. This theory is also based on the fact that the individuals are always motivated towards achieving their unfulfilled needs. Hence, this theory has divided the needs of the individuals into five hierarchical levels of needs. Moreover, the individuals are motivated to achieve the upper the level needs once they need their lower level needs. Hence, Howard Schultz has used Maslow’s motivational theory for motivating the employees of Starbucks through their levels of needs. According to Njoroge and Yazdanifard (2014), psychological needs are the basic amenities of the employees in their career life, which includes adequate water, foods, shelters and others. As an effective manager and CEO, Howard Schultz has arranged all the basic amenities at the workplace of Starbucks for the existence of motivation among the employees.

Ahmad et al. (2014) opined that the employees always want control and order in their lives through getting enough safety and security at the workplace. Moreover, the managers of an organization should provide adequate job security, financial security, health security and safety to the employees for their enhanced satisfaction. Hence, Howard Schultz paid 70% employees’ health insurance premium and over the years, this benefits have been extended to coverage like crisis counselling, eye care, dental care, preventive care and lot more. Barrick et al. (2015) stated that the CEO also provided adequate financial security to the store employees for making them motivated and engaged with the organizational goals and objectives. Moreover, the stores employees were paid more than $6 to $8 per hour, which is well above the minimum wage structure of the employees. Good compensation and comprehensive benefit packages kept the employees highly motivated and involved in success level of Starbucks.

Herzberg’s Motivational Theory

According to Shin and Konrad (2017), the employees always want to fulfil their social needs for getting love affection, belongingness and friendship at the workplace. Hence, they are always inclined to make a friend group within their workplace. On the other hand, Mostafa et al. (2015) opined that the employees are always highly motivated and productive in a friendly working environment. They are inclined to make group at the workplace for making a collaborative working environment. Hence, Howard Schultz initiated team approach for maximizing the productivity of the employees and minimizing cost of the employees. Furthermore, Lazaroiu (2015) stated that after crossing some stages in the career life, the employees want to fulfil their self-esteem need. Moreover, at this level, the employee want to be recognized, praised, admired and confident for being highly motivated towards fulfilling organizational success. Hence, Howard Schultz initiated stock option for the employees, where each employees can purchase the stock of the organization. It used to give the employees a sense of ownership and they started to take increasing interest in the performance level of Starbucks.

On the other hand, Gupta and Shaw (2014) opined that at the later stage of career life, the employees are highly inclined to fulfil their self-actualization needs. At this stage, the employees want to fulfil their ultimate potential at their workplace. In order to fulfil this needs of the employees, Howard Schultz initiated Open Forum, where the employees were open to discuss about the organizational performance with the managers and share their own ideas for improving organizational success. On the other hand, the CEO also initiated comment card, where the employees were free to talk about the mission and vision of the Starbucks. In this way, each employee of the organization used to feel as owner and take active participation in organizational success.

As per Herzberg Motivation theory, there are some factors in organization that prevent dissatisfaction of the employees, whereas some factors leads to positive satisfaction among the employees. According to Jacobsen and Bøgh Andersen (2015), hygiene factors are the factors, which are extremely essential for the existence of satisfaction at the workplace. Moreover, these factors include adequate pay, comfortable working condition, flexible company policy, interpersonal relation and job security provided to the employees. On the other hand, Muslim et al. (2016) opined that motivational factors yields positive satisfaction at the workplace leading to high level of employee motivation. Such factors include recognition, promotional opportunities, responsibility and sense of ownership and meaningfulness of work.

Adam’s Equity Theory

Kotni and Karumuri (2018) pointed out that employees are more likely to be satisfied at their workplace, when they get adequate and competitive salary as compared with same industry in same domain. Hence, Howard Schultz used to provide high pay scale to the employees for their satisfaction. Moreover, the CEO used to pay $6 to $8 per hour to the store employees, which quite competitive in comparison with the same industry. On the other hand, Gupta and Shaw (2014) opined that the talented employees want to stay in an organization for longer period of time, when they are provided with adequate fringe benefits, health care plan and other employee help program. Hence, Howard Schultz honoured the values and contributions of the employees by paying 70% of their health insurance premium. He also offered coverage for preventive care, dental care, mental health care, eye care and many more. As per Kotni and Karumuri (2018), the relationship of the employees with his superiors, subordinates and peers decides the level of their satisfaction at their workplace. Moreover, the employees are satisfied in a collaborative and teamwork working culture, where they can establish effective interpersonal relationship with each others. Hence, CEO of Starbucks initiated teamwork working culture for encouraging the employees towards being more productive in collaboration with each other.

According to Njoroge and Yazdanifard (2014), appropriate recognition and appraisal of the employees for their accomplishment yield positive satisfaction to them. Moreover, the employees feel proud and satisfied by being valued for their contribution in organizational success. Hence, Howard Schultz always provided attractive rewards and recognitions to the employees for both their individual as well as team effort leading to success of Starbucks. Such rewards and recognition used to motivate the employees towards higher level of performance. On the other hand, Shin and Konrad (2017) opined that the employees can hold themselves responsible for the work, when they are provided with adequate sense of ownership for the organization. Hence, the CEO initiated an Open Forum, where the interested employees could discuss the performance level of Starbuck with the high level managers and input their own ideas towards the success of the organization. Such sense of ownership increased the integrity of the employees with the organizational goals and enhanced their performance level for getting organizational success.

As per Adam’s Equity theory of motivation, the motivational level of the employees is highly correlated with their perception of equity, justice and fairness practiced by the management. The higher the perception of the employee regarding the equity, fairness and justice of the management, the higher they are motivated to enhance their productivity. According to Tseng and Kuo (2014), while evaluating the fairness of management, the employees evaluate their inputs or contribution in comparison with the output of compensation or output that they get. On the other hand, Shin (2016) opined that the employees also compare their input and output with than of equal employees or category.

Managerial Implications of Theories

Equity is perceived by the employees, when the ratio of their contribution and compensation is equal. However, when the ratio of contribution and compensation of the employees are unequal, it leads to their equity tension. According to Virtanen and Elovainio (2018), equity tension encourages the employees to change their inputs by lowering their contribution in organizational success. Hence, Howard Schultz always maintained equality in the contribution level and compensation level of the employees. Moreover, salary provided to the store employees of Starbucks was quite higher than the minimum wage level and it was also highly competitive as compared to other organizations in the same field. Hence, the employees have had a feel of equality and fairness with treatment of management with them. On the other hand, Tims et al. (2015) opined that the employees can also have a feel of inequality, when there is a difference between their own compensation and benefit level and other’s compensation and benefits in the same category. Hence, Howard Schultz believed that expanding health care coverage for part-timers was right thing to do. Moreover, the CEO used to provide equal benefits of health coverage to both full-timer and part-timers of the organization. It gave a feel of equality and fairness among the employees of Starbucks at different level.

All the three above mentioned motivational theories like Maslow’s motivational theory, Herzberg’s motivational theory and Adam’s motivational theory have high level of managerial implication. While considering Maslow’s Motivational theory, the employees get motivated by fulfilling different hierarchical levels of needs. The managers should meet the psychological needs of the employees by providing them the basics amenities like adequate water and hygienic air at the workplace. On the other hand, Ahmad et al. (2014) opined that the employees feel secure at their organization, when they get protection from the elements like security, law, order, stability and freedom. Hence, in order to motivate the employees, the employers should provide adequate fringe benefits for the employees and their families.

Having a tribal nature of human being, the employees always love to work in a friendly and collaborative environment. Hence, it is always better for the managers to build team working approach to motivate the employees. In such working environment, employees can work in collaboration with each other, which reduces their work stress. Furthermore, Lazaroiu (2015) opined that once the employees have met the needs of love and affection, they start to develop a feeling of self-worth and self-esteem. Moreover, the talented employees always want to be valued and recognized for their contribution in organizational success. Hence, the managers should provide a sense of achievement and accomplishment to the employees for making them motivated towards hard work. On the other hand, Rasskazova et al. (2016) opined that self-actualization need is associated with scope provided to the employees of fulfilling their full potential. In such case, the managers can involve the employees in organizational decision making process for giving them a feel of ownership and integrate them directly with the process of organizational success.

Conclusion

While considering Herzberg motivational theory, the managers of an organization should be concerned about both the hygienic factor and motivational factors for keeping the employee highly motivated in achieving organizational success. According to Kotni and Karumuri (2018), the employees are more like to stay in an organization for longer period, while they get competitive salary structure at their organization as compared with other organizations in the same industry. Hence, the managers should offer comprehensive salary structure to the employees for keeping their high motivated. The company policies and physical working condition of the employees must be flexible and fair enough for making them to work at ease. Furthermore, the managers should be concerned enough to build collaborative working environment towards building warm interpersonal relationship among the employees. On the other hand, Baumeister (2016) opined that sense of ownership and achievement yield positive satisfaction to the employees. It gives a feel of value to employees for their contribution in organizational success.

While considering Adam’s Equity theory of motivation, the employees are motivated to work harder, when they get fair and equitable treatment from the management. They are always likely to compare their own contribution with the compensation they get from the organization. Hence, the managers should provide comprehensive compensation package and attractive rewards to the employees for their contribution in organizational success. On the other hand, Olafsen et al. (2015) opined the employees are motivated by having fairness and equity in the compensation provided to them at same category. Hence, the managers should provide equal benefits and compensation to the employees in same category.

Conclusion

While concluding the study, it can be said that Howard Schultz, the CEO of Starbucks perfectly implemented Maslow’s motivational theory, Herzberg’s motivational theory and Adam’s Equity theory for keeping the employees highly motivated and engaged in organizational success. Moreover, the CEO provided comprehensive and competitive compensation packages for keeping the employees motivated. On the other hand, the CEO also used to provide adequate security to the employees by providing 70% of health insurance premium. Furthermore, Howard Schultz initiated teamwork work environment for enhancing interpersonal relationship among the employees. Hence, the managers of every organization should properly implement the motivational theories for keeping the employee highly motivated and engaged in organizational success.

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