Attention Materials
The performance appraisal (PA) system exists as a framework that manages the workforce performance procedures in an organization, leading to evaluating the productivity of team and individuals’ job output. According to Wahjono et al. (2016), the system comprises the process that gathers quantitative and qualitative feedback from the employee, carries out analysis, and changes them into actionable insights. On the same note, the PA framework assesses and measures the employees’ behaviors, giving them relevant feedback. Notably, the introduction of the PA in the organization has diverse consequences on employees’ work and how the entire company. For example, the culture of the company changes upon implementation of the performance appraisal system which involves communication, rewarding structure and development programs (Antara, 2020). Equally, financial structure would experience particular dynamics due to extra costs incurred for rewards and pay merits. On the same note, the decision making process would encounter changes as management engage in collecting information from employees and providing feedback leading to subordinates have a significant role decision smoking. Antara (2020) asserted that, depending on the size and nature of operations, companies need performance appraisal system for various reasons. For instance, PA systems leads to boosting employees’ morale and satisfaction leading to high productivity (Antara, 2020). Similarly, the performance appraisal system effectively improves employees’ development and measures their performance and rewarding patterns (Wahjono et al., 2016). Nevertheless, PA systems facilitates employees’ contributions in decision making, improving their performances and enhancing self-development.
Orienting Materials
Starbucks Company possesses a well-organized performance appraisal system for effective management of the employees’ performances leading to evaluation of individual and team output. The structure comprises collecting quantitative and qualitative feedback from the workforce and conducting analysis to turn them into actionable insights (Devina, 2013). The company insights based on the employees’ feedback assist the company in improving the productivity and quality of the team’s work through setting and monitoring targets. Notably, Starbucks has two significant stages regarding the performance appraisal, including measuring the job performance and sharing the feedback with the workforce (Devina, 2013). Furthermore, the organization uses the customers’ comment card to measure the work performance of individual employees. The comment card facilitates workforce employees answering the question concerning the company services, employees, and products. On the same note, the company’s performance appraisal system included providing feedback to the employees and conduct training and rewarding. According to Devina (2013), the firm gives employees bonuses when they fall under the “employee of the month” category. Even though Starbucks having well-organized merit pay raises system, the company possesses some gaps that require attention. Merit increase includes the increment in employees’ salary for their recommendable performances, depending on the firm’s internal criteria, worker force value, budget, and merit metric structure (Wahjono et al., 2016). Despite Starbucks having the merit pay increase system to increase its employees’ motivation, retention, and productivity, various factors such as complexity and nature of independence in the organization. For instance, independence in the company creates a significant gap in ensuring a perfect merit pay increase system. Employees interact and collaborate, leading to working together focused on completing the assigned tasks. In such cases, the company experiences difficulties selecting individuals suitable for the merit pay raise (Devina, 2013). On the same note, the complexity of Starbucks creates a gap in the merit pay raise system since the organization comprises diverse departments and operations working together to achieve common goals.
How Performance Appraisal System Increase Employee Satisfaction
Performance appraisal (PA) by many organizations, including Starbucks, concentrates on improving the workforce contribution towards achieving the company’s goals and increasing productivity and work performance. As a result, PA has a significant role in increasing the employees’ satisfaction which contributes to high productivity (Islami et al., 2018). Equally, PA focuses on supporting and developing workforce and eliminating the existing barriers to excellent performance leading to achieving the corporation goals. PA improves the workplace performance in diverse ways which comprises contribution of the each employees towards attaining the strategic goals (Antara, 2020). PA accompanies diverse motivation factors which increases the satisfaction of the employees. For example, providing various rewards and creating suitable working environments act as a motivating elements among the workforce and leads to individuals’ happiness and enormous contribution towards attaining the company goals (Islami et al., 2018). According to Antara (2020), companies implementing PA indicate a higher level of satisfaction since the system offers well-organized plans and objectives, feedback, and communicating the employees’ expectations. Nevertheless, PA boosts the employees’ motivation and morale, leading to their satisfaction while performing diverse duties in the organization.
Type of Performance Appraisal
Performance appraisal exits in different forms depending on the systems of the organization. For example, management by objective (MBO), 360-degree feedback, assessment-centered methods, and technological performance exists as an effective form of PA in most organizations. Notably, MBO focuses on managers and employees working together to identify, plan, communicate, and organize the company goals (Antara, 2020). After setting and implementing the objective, the manager and junior employees discuss the progress and monitoring activities to attain the goals. MBO works excellently with the retail and fast food industry, in which the growth of the companies requires collaboration with subordinates in making essential decisions (Antara, 2020). Furthermore, the fast food and retail sector requires the MBO type of PA since the two industries experience various dynamics. Employees have a clear understanding of the customers’ needs and preferences.
360-Degree Feedback exists as a multidimensional PA that assesses and evaluates the employees based on collected feedback. The feedback gathering process involves a circle of employees and influential people comprising the manager, direct reports, customers, and peers (DeNisi & Murphy, 2017). The type facilitates the elimination of biases in performance reviews and provides significant comprehension of the individual products in the organization. 360-Degree Feedback has fundamental elements such as self-appraisal and peer, customer, and managerial studies. DeNisi and Murphy (2017) affirmed that the type applies to various industries, including manufacturing, retail, and fast food, to name a few. Equally, technological performance appraisal concentrates on expertise and experiences in technological tools (Antara, 2020). Notably, management would give attention to technical skills over other competencies. The type of PA suits all the industries based on various innovations and applications of technology to improve competitiveness and customers satisfaction. Nevertheless, the assessment center methods include assessing an individual’s performance (DeNisi & Murphy, 2017). The system contains three stages: pre, during, and post-assessment, leading to fitting in different company needs, competencies, and roles (DeNisi & Murphy, 2017). Besides, the form provides insights into employees’ problem-solving abilities, adaptability, ethics, expertise, and tolerance.
Organizations with Performance Appraisal Systems Verses those Without
Diverse statistics from various research works indicate various advantages and of PA systems in companies. For example, 55% of American employees confirm that PA possesses enormous benefits to the organizations and their job satisfaction compared to those without PA (Samwel, 2018). Furthermore, 44% of the companies focus on technology in conducting the PA process. Equally, 58% of companies with PA possess higher efficiency accounting for 78% in monitoring performance metrics than firms without PA structure (Antara, 2020). Notably, employee satisfaction and performance appraisals have a fundamental relation since effective PA leads to a high level of satisfaction (Antara, 2020). PA leads to boosting morale and acts as a motivational factor leading to the fulfillment of the workforce as they engage in various duties to meet the organization’s goals.
Designing Appraisal System
Designing the performance appraisal takes different forms and procedures depending on various criteria, including the company’s size, industry, and organizational structure. As per Samwel (2018), the first step involves selecting the right and relevant personnel to participate in the designing process. For instance, engaging the representative of the employees to effectively provide accurate information during feedback (Idowu, 2017). The second phase involves guiding the design, which focuses on selecting a task force and utilizing external consultants for an effective and successful PA system. Thirdly, the designing team conducts the organization’s assessment and evaluation, leading to determining if the organization required performance appraisal and primary objectives of PA in the company (Idowu, 2017). The assessment facilitates pinpointing of the impetus dynamics leading to guiding the designers. The last stage comprises activities focusing on designing, implementing, and evaluating the system (Samwel, 2018). The design should examine the organization’s culture and implement PA that aligns with organizational culture or adjustable to the company operations. The team conduct experimentation with the pilot study and subsequent implementation, leading to the corporation following the monitoring and evaluation plan.
Starbucks Corporation’s current PA system focuses on the employees as a fundamental asset facilitating the growth and expansion of the company. As per Devina (2013), the company provides various training programs to its employees to enable performance management and appraisal. Through human resource management, the company ensures practices and culture that improve employees’ relationships with the management leading to a feeling of attachment and connection (Idowu, 2017). The company utilizes the traditional techniques in conducting the PA process, including measuring job productivity and sharing feedback (Rosenbaum et al., 2018). Customer card plays a significant role in exchanging information between management and employees on diverse issues affecting the corporation. Moreover, due to the lack of a digitalized system, the company’s need to change to align with current technology contributes to efficiency in operations, increased competitive advantage, and customer satisfaction.
Literature Review
Change exists as an essential factor in business to align with the dynamic nature of the market regardless of sector, size, and age of the organization. As per Pawar and Charak (2017), the current business world experiences rapid changes making companies make adjustments based on the requirements of the market system to remain viable and profitable. Notably, most companies face various challenges while making changes due to the model used and its efficiency in making successful changes. Deeping on the model selected for change effected handling of model elements leads to success in the introduction and implementation process. Besides, the nature of business and change and the people involves in the process make the change management vary from one organization to another. Kurt Lewin, back in the 1940s, developed a significant model acting as the cornerstone in comprehending organizational change, which plays an integral part in modern corporations (Pawar & Charak, 2017). Lewin’s model comprises three essential stages for change management, including unfreeze, change and refreeze.
Lewin’s Five Change Management Model
According to Lewin’s model, each step of the change model allows an organization to design and implement change management through any situation strategically. By focusing on the three stages of the changes, the company can prepare and make the right decisions on the anticipated changes and effectively manage the transition (Pawar & Charak, 2017). Moreover, before starting the process, management and employees should understand the reasons for making the change in the organization (Pawar & Charak, 2017). As a result, generations of the motivation for change before actual change exits as fundamental factors in a corporation such as Starbucks.
Unfreezing Stage
The unfreezing stage comprises the activities of preparing the company to accept the anticipated changes. The process involves breaking down the existing company status quo before preparing for new operations (Pawar & Charak, 2017). Furthermore, the procedures effective communication strategies explaining why the company should adopt the new means of the process, such as digitalization of the entire operations, including ordering and payment system by Starbucks (Burnes, 2020). On the same note, the stage begins by addressing the core values, behaviors, beliefs, and culture of the organizations that require change, such as traditional means of carrying out organizational operations (Burnes, 2020). The process leads to creating the controlled crisis within the organization with members prepared, which acts as a motivational factor to establish the new equilibrium.
Change Stage
The change management phase involves individuals in the company focusing on resolving the uncertainties created in the unfreezing stage and concentrating on the introduced was of operations. In the change phase, management and employees believe in the new system and start conducting their activities aligned with the new operation structure (Pawar & Charak, 2017). The transition of unfreezing to change could take a more extended period as people would adopt the new direction in company operations. Furthermore, such transition leads to specific personal issues found in the organizational environment, such as independence and complexity. According to Pawar and Charak (2017), such factors influences changes in companies such as Starbucks, which persist as multinational corporations. Besides, background information on how the change would benefit employees and entire management teams facilitates effective implementation (Burnes, 2020). During the transition, organizations must create a close relationship with employees as they need time and communication to understand the change.
Refreeze Stage
The stage signal the complete implementation of the chance as people fully embrace the new operations. As per Burnes (2020), the stage enhances employees and organizations to internalize the changes such as digitalization of the processes leading to use in every activity, leading to organizational culture and part of the operations. Stability in daily activities leads to employees’ gaining confidence and comfortability in using the new directions.
Creating positive change in any organization can be implemented through any change management strategy, but Lewin’s change model can succeed when used effectively. As a result, the exploratory literature review on how to use the change management and how it can affect future success in the Starbucks Corporation. As per Bariso (2020), determining the needs of change would significantly influence the operations of the entire corporation. For instance, implementing the performance appraisal would change the decision-making process despite the complexity of the organization that operates in various countries globally (Bariso, 2020). On the same note, using Lewin’s model would lead to surveying the current state and future expectations of the organization’s operations, concentrating on engaging employees by the management for effective and successful change. The change would significantly influence the future communication system since the change requires monitoring and exchanging feedback between the subordinates and the leadership to realize the benefits of the change. For example, the Starbucks Corporation operates in diverse countries and regions, with regional managers coordinating daily activities (Bariso, 2020). For effective implementation of the change, communication has to from junior employers to the company’s top management. Equally, Starbucks would focus on short-term goals to evaluate and assess the change’s long-term objectives.
Changes in Starbucks towards the performance appraisal to satisfy employees and increase the reputation and profits have significant benefits to the organization and employees. Various rewards and development programs improve the morale and motivation of the employees, leading to concentrating on the tasks and duties assigned to achieve the company’s common goals. In case the company intends to make changes, the process involves forming a team that provides every individual involved in the company with adequate information concerning the change. Furthermore, the team in charge communicates the goals of the change and uses the suitable model to introduce and implement the new directions in operations.
Findings
Starbucks’s multinational operations lead to challenges of complexity and independence, which negatively affect its change management plans. For instance, despite the company operating in different countries globally, it has a responsibility to have uniform operations, decision-making processes, and management systems (Rosenbaum et al., 2018). As a result, making the change could take time to complete for implementation. Moreover, effective teams and suitable organizational change models such as that proposed by Lewin assist Starbucks in making successful changes. Despite the organization experiencing complexity and independence, the management uses an effective change model to create strategies to implement the change successfully.
Starbuck requires Lewin’s Model of change to create and implement the change in the corporation. For instance, using the model would result in employees and managers operating in various counties globally understand the need for change and anticipated benefits (Shim et al., 2021). Besides, the change stage of the model lay a significant role since communication persists as a critical factor in interacting and communicating with the employees and stakeholders concerning the change. Similarly, constant and effective communication facilitates the stakeholders’ and workforce’s sense of belonging, leading to motivation in taking parts to achieve the set goals (Shim et al., 2021). Communication connects employees in different regions and understands the benefits of the change leading to changing towards the new direction while dealing with uncertainties experienced in the unfreezing stage.
Recommendations
Starbucks has an extensive network of employees and management systems. As a result, the study recommends constant and transparent communication, which clarifies various misinterpretations of the change. Providing information on the change would enhance the understanding of employees what the company expects from them, the role to play, and giving feedback in case of challenges.
Conclusion
Organizations such as Starbucks, intending to various changes, must select the suitable model and utilize it efficiently to realize successful implementation. Lewin’s change model has three-phase phases in which it can outline how an organization can manage change despite the complexity of the corporation. Each step involves various activities which require the change teams to adhere to for practical introduction and implementation of the new direction on operations. Besides, each phase involves emphasis due to its significance to the entire change process by engaging employees and stakeholders. On the same note, the model plays an essential role in managing change and carrying out information for both stakeholders and employees by Starbucks’s management team teams implementing change. The change step in the model emphasizes communication that persists as a fundamental element in implementing the change through a transparent and constant exchange of information and clarification.
References
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Bariso, J. (2020, June 11). Starbucks Just Announced a Drastic Change. What Every Company Can Learn From It. Inc.com. https://www.inc.com/justin-bariso/starbucks-pickup-is-a-smart-covid-related-adjustment.html.
Burnes, B. (2020). The Origins of Lewin’s Three-Step Model of Change. The Journal of Applied Behavioral Science, 56(1), 32–59. https://doi.org/10.1177/0021886319892685
DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance management: 100 years of progress? Journal of Applied Psychology, 102(3), 421-433. https://doi.org/10.1037/apl0000085
Devina, I. (2013, September 4). Starbucks performance appraisal. Everything you need to know about Starbucks Coffee Company HRM. https://makegoodcoffee.wordpress.com/starbucks-performance-appraisal/
Idowu, A. (2017). Effectiveness of performance appraisal system and its effect on employee motivation. Nile Journal of Business and Economics, 3(5), 15. https://doi.org/10.20321/nilejbe.v3i5.88
Islami, X., Mulolli, E., & Mustafa, N. (2018). Using management by objectives as a performance appraisal tool for employee satisfaction. Future Business Journal, 4(1), 94-108. https://doi.org/10.1016/j.fbj.2018.01.001
Pawar, A., & Charak, K. (2017). Study on the adaptability of change management: review of Kurt Lewins and Kotter model of change. Research Revolution International Journal of Social Science and Management, 5(4), 79-83. https://www.researchgate.net/profile/Avinash-Pawar-6/publication/339955706_Study_on_Adaptability_of_Change_Management_Review_of_Kurt_Lewins_and_Kotter_Model_of_Change/links/5e6fba0d92851ce30dfbbda4/Study-on-Adaptability-of-Change-Management-Review-of-Kurt-Lewins-and-Kotter-Model-of-Change.pdf
Rosenbaum, D., More, E., & Steane, P. (2018). Planned organisational change management: Forward to the past? An exploratory literature review. Journal of Organizational Change Management, 31(2), 286–303. https://doi.org/10.1108/JOCM-06-2015-0089
Samwel, J. O. (2018). An assessment of the impact of performance management on employee and organization performance – Evidence from selected private organizations in Tanzania. International Journal of Human Resource Studies, 8(3), 199. https://doi.org/10.5296/ijhrs.v8i3.13415
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