Retail

Starbucks Gives Its Workers a Raise

In a period in which debates over the minimum wage roar and retailers consider paying their workers more, Starbucks Corp. (NASDAQ: SBUX) is among the companies that compensates its workers most poorly. This poor pay rate exists despite the fact that CEO and founder Howard Schultz is a billionaire. Whether Schultz, who is paid millions of dollars a year whether he gets a raise or not, Starbucks’ lowest employees will.

The decision by Starbucks may be due to outside pressure or the generosity of senior management. Store workers probably do not care. The public corporation told the people who work in its stores that:

In January 2015, we will begin rolling out the first phase of a multi-year investment in the partner experience by making enhancements in three areas: performance and pay, recognition and benefits.

Pay Rates. We will invest in attracting new partners by increasing our start rates in all U.S. markets starting in January. The new rates will ensure we are paying a competitive wage that better positions us to attract and keep the best partners.

Also in January, all baristas and shift supervisors will receive a pay increase. Experienced partners who are at or above their range will be eligible for a lump sum increase, so your earnings continue to grow along with your tenure. Going forward, whether you’ve been with us one year or 10 years, pay will be reviewed and communicated annually, and all baristas and shift supervisors will now be on an annual pay review cycle or may be eligible for a lump sum equivalent.

Because each partner’s pay package is personal and will differ depending on position and market, individual partners will get specific details about what this means for them from their manager beginning early 2015.

Starbucks did not make it clear why the action will not take effect all at once, or why some workers may need to wait for “phase two” or “phase three.”

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Workers can expect two other benefits:

Development and Recognition. We know you work hard every day to deliver the Starbucks Experience and we want to recognize you for it. In addition to our ongoing recognition programs and promotional opportunities, beginning in January we are making enhancements to how we develop and support your aspirations in the following ways:

  • You will have more time with your manager to have conversations about your store, personal goals and career aspirations including performance and development.
  • We will recognize partners who are exceeding expectations with a Barista Trainer premium and the opportunity to be one of more than 28,000 Partners of the Quarter we will celebrate each year with a bonus!
  • And, to focus on what matter most, the development conversation, we have eliminated performance review forms and ratings for baristas and shift supervisors.

Also:

Food Benefit.We want you to explore and enjoy our food offerings including La Boulange in the same way you do our beverages.  Over the next five years we aspire to double our food business and to make this possible we need to improve your food experience. Starting in January, U.S. store partners can choose one free food item, per shift, from the pastry or ready-to-eat case.

Now, along with food, partner beverages, coffee mark-out and automatic My Starbucks Rewards Gold level status with a registered partner card, you can save money both on and off your shift.

In other words, eat and drink at Starbucks to save money, except for those employees who would rather not.

The actions of Starbucks likely will put pressure on McDonald’s Corp. (NYSE: MCD) and Wal-Mart Stores Inc. (NYSE: WMT), which are in the midst of wage decisions of their own, as the pressure to compensate the lowest workers gains steam.

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