strategic hr metrics (ilrhr 6660): a statistical analysis of starbucks’ tuition reimbursement...
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Strategic HR Metrics Professor Hausknect Cornell University
Nicholas Born Emma Gutierrez Lin Li Julie Zhou
November 20, 2014
From Barista to BA-rista A Statistical Analysis of Starbucks’ Tuition Reimbursement Program with Arizona State University
01.
Starbucks Stu
Ithaca Starbucks
Stu is a barista working 20 hrs per week at the local Starbucks
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
02.
Is Starbucks’ investment in the ASU tuition reimbursement
plan wise investment?
STARBUCKS
We have been hired as consultants by Starbucks to answer…
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
03.
11,563 Locations Across the US
S TA R B U C K S AT A G L A N C E
Top 3 Bottom 3
1. D.C. 2. Washington 3. Nevada
48. Mississippi 49. Vermont 50. Arkansas
What state has the most Starbucks per capita?
Country with the most Starbucks per capita?
Most expensive city to buy a Grande Latte?
Oslo, Norway
$9.83 CEO?
15,000 employees are estimated to enroll in the ASU program in FY15
Howard Schultz
131,000 employees in the US
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
04.
1 = No Participation in Program Out-of-Program 2 = Part-time Participation
(1-2 courses per semester) In-Program
3 = Full-time Participation (3+ courses per semester)
4 = Graduated from the Program Out-of-Program
(Graduated)
Variables in Dataset Age Tenure Gender Turnover Engagement Work-Life Balance Performance Rating Wage Band Education Level
P R O G R A M P A R T I C P A T I O N L E V E L S
The Dataset
Time Period: 1 year
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
05.
The Dataset Descriptives
n = 4,727 Baristas
Male, 43.4% Female,
56.6%
Average Age
35.2 Years Old
Education Level Attained HIGH
SCHOOL DIPLOMA
(Mode)
No HS Diploma: 35.4% HS Diploma: 45.4%
Tech College, AA: 11.7% Bachelors: 1.4%
Advanced Degree: 0%
Average Tenure
4.2 Years
Max = 11.9 Years
Min = 0.2 Years
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
06.
Non-participant
Part-time
Full-time
Graduated
29.3%
40.8%
23.6%
6.3%
64.4% In-Program
Breakdown of Participants in the Tuition Reimbursement Program
n = 4,727
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
02. Analysis of the ASU Tuition Reimbursement Program
07.
BENEFITS > COSTS
08.
If Stu partakes in the ASU online program full-time
Source: http://www.bloomberg.com/news/2014-06-16/starbucks-to-pay-part-of-college-tab-for-u-s-workers.html
It is estimated that 15,000 Starbucks employees
will participate
Per year Per year
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
09.
79.2
80.5
81.7 81.4
77.5
78
78.5
79
79.5
80
80.5
81
81.5
82
TRP 1 TRP 2 TRP 3 TRP 4
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
Perfo
rman
ce L
evel
Level of Participation Level of Participation
Box Plot: Performance & Level of Participation
+ Performance & Program Participation
• Performance levels incrementally increase with increases in the level of program participation; there is a dip for program graduates
• The range of performance becomes more narrow with increases in program participation
Mean Performance Scores
10. 01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
3.1
3.2
3.3
3.4
2.95
3
3.05
3.1
3.15
3.2
3.25
3.3
3.35
3.4
3.45
TRP 1 TRP 2 TRP 3 TRP 4
• Engagement levels incrementally increase with the level of program participation
• The range of engagement becomes more narrow with increases in program participation
Enga
gem
ent L
evel
Level of Participation Level of Participation
+ Engagement & Program Participation Box Plot: Engagement & Level of Participation Mean Engagement Scores
11.
35.2%
50.8%
68.2%
74.9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 2 3 4 Program Participation Level
• Barista turnover increases with participation level
• Graduates of the program have the highest turnover levels (74.9%)
• Non-participants have the lowest turnover levels (35.2%)
Turn
over
- Turnover & Program Participation
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
12.
NOT A G O O D I D E A
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
13.
Does higher turnover matter?
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
40-49.99 50-59.99 60-69.99 70-79.99 80-89.99 90-99.99
Turn
over
Performance
• Higher performers are more likely to leave Starbucks
• Performance is positively related to turnover (β = 0.138)
• Controlled factors: Age, Tenure, Gender, Engagement, Worklife_balance, Tuition_program, Wage_band, Education
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
14.
Profile of a High-Performing Barista
Age (β = -0.165)
Tenure (β = 0.125)
Education (β = 0.125)
Engagement (β = 0.118)
* For all employees in the dataset (n = 4727)
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
15.
N O N - PA RT I C I PA N T S 1. Education (β = 0.327)
2. Engagement (β = -0.283)
3. Gender (β = 0.245)
4. Tenure (β = -0.223)
I N - P R O G R A M * 1. Education (β = 0.251)
2. Tenure (β = -0.245)
3. Gender (β = 0.211)
4. Engagement (β = -0.206)
G R A D U AT E S 1. Gender (β = 0.338)
2. Tenure (β = -0.314)
3. Education (β = 0.257)
4. Engagement (β = -0.240)
* Includes Part-time and Full-time Participants
Factors Influencing Turnover by Participation Level
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
03. Recommendations & Next Steps
16.
17.
RECOMMENDATION #1 Starbucks should scrap the ASU tuition reimbursement program
• The high cost with only marginal gains in performance and engagement
• Participants and graduates have higher turnover than non-participants
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
18.
RECOMMENDATION #2 If Starbucks chooses to go ahead with the tuition reimbursement program, they should focus on HR interventions to address Engagement and Tenure amongst high performers
Engagement Tenure • Promote employee empowerment
§ Give authority over store operations
• Create opportunities for baristas to apply learnings to stretch tasks and projects
• Create a culture where baristas’ degrees are valued
• Reward and recognize employees for longer tenure
§ Celebrate Starbucks birthdays § Reward with milestone bonuses
Link career development to progression in tuition reimbursement program
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
19.
NEXT STEPS • We do not have data on branch profitability or business
performance. We would love explore which factors drive business performance.
• Analyze external effects such as improved customer perceptions, boosts to employer brand, and increased applications for open positions.
• Conduct a longitudinal study to analyze effects of the tuition reimbursement program over time.
01. Background 02. Methodology & Findings 03. Analysis 04. Recommendations 05. Next Steps
Drink up! Nicholas Born
Emma Gutierrez Lin Li
Julie Zhou