Weekly Wrap: Starbucks’ Engagement, Labor Fears, Mad Men’s Favorite Word

I’ve written this before, but it bears repeating: employee engagement is one of the workplace issues that got hammered along with workers themselves during the economic downturn and Great Recession.

If you recall those heady days of 2007 when all seemed right with the world, engagement was “THE” hot topic for managers and executives in the workplace. After all, if management could just figure out how to get workers to be more engaged in their work – that is, to give more of their discretionary effort and passion to their job – wouldn’t productivity and profits rise as well?

It was a good idea but it hit the rocks when the big downturn came. Executives stopped worrying about employee engagement because everyone was focused on just staying gainfully employed. And productivity? Well, that skyrocketed when all those employees frightened about being the next to get bounced into the unemployment line worked like demons to do anything they could so their supervisors would keep from canning them.

Today, in sober 2010, organizations don’t care about employee engagement quite so much. And nowhere is that more evident than at coffee giant Starbucks, according to a sad but telling Reuters story in the Chicago Tribune:

Four years ago, generous benefits and opportunities for advancement convinced Leigh Swanson to use her new master’s degree in human resources to manage a Starbucks cafe. She called it one of the best workplaces she had ever experienced.

Then, in 2007, with the coffee chain in the midst of a building binge, the worst downturn since the Great Depression hit, hammering Starbucks’ bottom line. Sharp cost-cuts, the introduction of corporate efficiency tools like scheduling software and an increased emphasis on pushing product sales have helped the company return to record profitability.

They also led Swanson to quit in May. The disappearing perks and the financial fixes dampened her enthusiasm for recruiting potential new partners, as Starbucks calls its employees. “I found it really sad. I was really invested,” said Swanson, who was in charge of a Starbucks in the Florida Panhandle. “I just didn’t feel proud anymore. I wasn’t in it to manage a McDonald’s.”

Disillusionment among Starbucks workers like Swanson may be early signs of a culture change that could strike at the heart of what makes Starbucks Starbucks: that warm, fuzzy feeling stemming from its original commitments to the global community as well as its own healthy, happy staffers who provide service with a smile…

(And) for investors and management, the question is whether Starbucks can keep growing if the Starbucks culture unravels.”

Starbucks is worth watching because it shows the dangers of what happens when an organization that really embraced the notion of employee engagement pulls the rug on the concept.

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There’s more than Starbucks falling employee engagement in the news, of course, and here are some other workplace-related news items you may have missed this week. Yes, this is a weekly round up of news, trends, and all sorts of information from the world of HR and talent management. I do it so you don’t have to.

  • Big labor fears a big rollback after election. This New York Times story was written before Tuesday’s big GOP win nationwide, but it is still relevant in the wake of the Republicans big victory. “Republicans may well go on the offensive against labor, after two years in which unions have been on the offensive,” the newspaper reported. “Organized labor is deeply worried about what happens after (the elections) … By many measures, labor unions have been the Republicans’ fiercest, biggest-spending opponents in this year’s campaign, laying out more than $200 million in hopes of safeguarding the Democratic majorities in the House and Senate. Labor leaders have pressed their Democratic allies, unsuccessfully so far, to muster the 60 votes needed in the Senate to advance card-check legislation. Many Republican and business leaders say the card-check process is unfair because union organizers often pressure workers to sign the cards, an assertion that the unions deny.”
  • Dealers get a 10-year deal in Las Vegas. Here’s how you take labor unrest in your organized workforce out of the equation: sign them to a 10-year contract. That’s what casino mogul Steve Wynn did this past week, according to the Las Vegas Review-Journal. “About 60 percent of Wynn’s more than 500 full-time dealers cast ballots,” the newspaper reported. “Among the issues dealt with in the contract were vacation, sick leave and providing dealers with some protection against at-will terminations…But the contract keeps in place the Wynn’s tip-sharing policy. That policy, which reduced dealers’ tips at gaming tables by splitting a percentage of them with their immediate supervisors, led to the unionization efforts.”
  • Health IT jobs are growing in Georgia. Who knew that Atlanta would be a hotbed for work in the health IT sector? “With an 11 percent growth rate in 2009, health information technology is outpacing all other segments of the $1 trillion global health care market, according to Scientia Advisors,” and reported in the Atlanta-Journal Constitution. “That spells job growth, especially for Atlanta and Georgia. Atlanta health IT companies had the highest combined revenue ($4 billion) of any state in the nation in 2009… “We’re bullish on this industry,” David Hartnett, vice president of economic development for the Metro Atlanta Chamber told the newspaper. “Right now, we’re the health IT leader in the country, and we see so much potential for future growth. That’s a great position to be in.”
  • Big pay for part-time work – but it means dealing with pizza in Japan. Leave it to Domino’s to get some buzz out of a job in the pizza business. According to the Huffington Post, “Domino’s Pizza Japan, Inc. is offering a part-time job to one lucky applicant this December. The pay? A cool 2.5 million yen, or roughly $31,000 — for just one hour’s worth of work.” Hmmm; there must be some catch they aren’t talking about.
  • Mad Men‘s Don Draper and the greatest word in management. You know how it is; it’s Monday morning and you’re at your desk but still recovering from whatever happened that weekend, and some employee stops by to tell you that a list of the salaries of everyone in the company is posted on Facebook. You have a one-word response (no, not THAT one), and it is probably a word you hear uttered frequently on Mad Men by advertising creative whiz Don Draper. This video helps make you see just HOW creative you can be the next time you choose to use that frequent but all-too-common management response.

http://www.youtube.com/watch?v=R9DCafQqHJA

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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3 Comments on “Weekly Wrap: Starbucks’ Engagement, Labor Fears, Mad Men’s Favorite Word

  1. My dog, Squirt, a Cairn Terrier, knows when its time for me to go to Starbucks.

    Same time every night she scratches my leg while I’m on the couch and, if I fail to pay attention, she sits up behind my laptop and, with her front paws fully extended, slams the laptop cover shut. (My wife, Diane, invariably falls off her chair in laughter.

    Squirt likes the ride in the car but, she definitely knows if we pass Starbucks and alternately growls and whines til I turn around and get in the drive through line.

    She sticks her head out the window as if to order and loves it when she hears the her name called…as every employee apparently remembers her name…and not mine.

    I don’t think Starbucks has lost as much of its employee engagement chips as your post seems to suggest but it has altered its store on every corner strategy as several of their leaders have indicated in the presentations I’ve seen. The benefits for part timers to my knowledge and their credit have not been diminished despite enormous pressure to do so.

    I do think however think that Squirt deserves her own complimentary card.

  2. Gerry: Great that your dog Squirt appreciates Starbucks. Maybe you are right that the coffee giant hasn’t lost as much of its employee engagement mojo as this story seems to suggest — and I hope that is the case — but clearly, something has changed.

    That’s true about all things in life, of course, but this may simply reflect the fact that Starbucks is now a giant corporation and simply can’t do (or afford) all the nice things it did for workers back when it was a smaller company.

    I keep hearing rumbles from people and reading things like this story that indicate that something there is changing. it has been a remarkable company for its part-timer benefits, and a great example to point to when others say that those benefits just aren’t economically viable.

    So my heart hopes this story is exaggerated or wrong, but my head says, “where there’s smoke, there is usually fire.” And yes, Squirt does deserve her own complimentary card!

  3. Your pickup of the the Reuters/Chicago Trib story on Leigh Swanson (formerly with Starbucks) and Lance Haun’s comments on elevator buttons made me laugh. Engagement and empowerment have gone the way of “bottom-up” management. Both will return as soon as better business conditions arrive and companies see their better employees heading out the door. Unfortunately, for most companies, it will be an illusion.

    If it would be any consolation to Leigh, I stopped going to Starbucks when the instant coffee arrived. Fortunately, I don’t have a dog named “Squirt.”

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