{"id":3094,"date":"2023-02-19T16:11:32","date_gmt":"2023-02-19T16:11:32","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/apply-it-11-4-training-developing-and-rewarding-employees\/"},"modified":"2025-05-27T12:36:28","modified_gmt":"2025-05-27T12:36:28","slug":"apply-it-11-4-training-developing-and-rewarding-employees","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/apply-it-11-4-training-developing-and-rewarding-employees\/","title":{"raw":"Apply It 11.4: Training, Developing, and Rewarding Employees","rendered":"Apply It 11.4: Training, Developing, and Rewarding Employees"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand different kinds of employee training&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand different kinds of employee training<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the how and why performance appraisals are done&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the how and why performance appraisals are done<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Recognize different kinds of employee compensation&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Recognize different kinds of employee compensation<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<section class=\"textbox seeExample\">\r\n<h3>Starbucks Perks More Than Coffee[footnote]Sources: Blog, MarketSmarter, http:\/\/www.marketsmarter.com\/blog, accessed March 12, 2018; Carmine Gallo, \u201cHow Starbucks CEO Howard Schultz Inspired Us to Dream Bigger,\u201d\u00a0Forbes,\u00a0https:\/\/www.forbes.com, December 2, 2016; Tanza Loudenback, \u201cThe Story Behind the Rise of Starbucks\u2019 Howard Shultz, Who Just Gave a Raise to Every US Employee of His $82 Billion Coffee Company,\u201d\u00a0Business Insider,\u00a0http:\/\/www.businessinsider.com, July 11, 2016; Monique Reece,\u00a0Real-Time Marketing for Business Growth\u00a0(Upper Saddle River, NJ: FT Press\/Pearson, 2010)[\/footnote]<\/h3>\r\n\r\n[caption id=\"attachment_7996\" align=\"alignright\" width=\"200\"]<img class=\"wp-image-7996 size-medium\" src=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-200x300.jpg\" alt=\"a Starbucks drink topped with whipped cream\" width=\"200\" height=\"300\" \/> Figure 1. Offering benefits such as health insurance to part-time workers helped Starbucks reduce turnover.[\/caption]\r\n\r\n<p id=\"fs-idm202581200\">At Starbucks, CEO Howard Schultz understood that the single most important aspect of creating an enduring brand is its people. Schultz wanted to set Starbucks apart from other coffee shops and service businesses, and he did this by offering health benefits and stock ownership for people who work part-time. It had never been done before.<\/p>\r\n<p id=\"fs-idm215275696\">But the defining moment for the brand was the stock option and employee benefit plan. Scott Bedbury, the president of marketing of Starbucks at the time, explains. \u201cWhen Howard took over the company, he was not a rich man and he didn\u2019t own a house or even a car. Howard grew up poor in Brooklyn and was influenced strongly by his dad, who never got health benefits from any of his employers. This fueled Howard\u2019s drive to create a company that put employees first. He is passionate that when it comes to customers versus employees, employees will always come first.\u201d<\/p>\r\n<p id=\"fs-idm207842384\">But it wasn\u2019t easy, and it took a lot of courage to present this idea to investors. Bedbury said, \u201cWhen Howard tried to raise $2.8 million to buy the company from the three founders, he made 220 presentations and he got shut down in all but 12 of them. He was seen as an idealist who was going to put an unnecessary burden on the bottom line by offering benefits to part-time employees who viewed this as a temporary job. But Howard convinced them that turnover would drop, which it did.\"<\/p>\r\n<p>\"Store manager attrition was 15 percent, part-time hourly employees was 65 percent, compared to McDonalds and Taco Bell, which were about 200\u2013300 percent a year. That\u2019s turning over your work force every four months, and when you do that, your service suffers and there are all kinds of problems. I don\u2019t know why more people don\u2019t do it. If you give up some equity to employees, they\u2019ll reward you for that.\u201d<\/p>\r\n<\/section>\r\n<h3>If Starbucks' benefits are so attractive, why are so many <a href=\"https:\/\/sbworkersunited.org\/noneconomic-proposals\">Starbucks workers unionizing<\/a>?<\/h3>\r\n<p>[reveal-answer q=\"34248\"]Click to Show Sample Answer[\/reveal-answer]<br \/>\r\n[hidden-answer a=\"34248\"]Benefits aren't the only things that workers care about. Click through the link above and see the variety of non-economic issues that they hope to change.[\/hidden-answer]<\/p>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand different kinds of employee training&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand different kinds of employee training<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the how and why performance appraisals are done&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the how and why performance appraisals are done<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Recognize different kinds of employee compensation&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Recognize different kinds of employee compensation<\/span><\/li>\n<\/ul>\n<\/section>\n<section class=\"textbox seeExample\">\n<h3>Starbucks Perks More Than Coffee<a class=\"footnote\" title=\"Sources: Blog, MarketSmarter, http:\/\/www.marketsmarter.com\/blog, accessed March 12, 2018; Carmine Gallo, \u201cHow Starbucks CEO Howard Schultz Inspired Us to Dream Bigger,\u201d\u00a0Forbes,\u00a0https:\/\/www.forbes.com, December 2, 2016; Tanza Loudenback, \u201cThe Story Behind the Rise of Starbucks\u2019 Howard Shultz, Who Just Gave a Raise to Every US Employee of His $82 Billion Coffee Company,\u201d\u00a0Business Insider,\u00a0http:\/\/www.businessinsider.com, July 11, 2016; Monique Reece,\u00a0Real-Time Marketing for Business Growth\u00a0(Upper Saddle River, NJ: FT Press\/Pearson, 2010)\" id=\"return-footnote-3094-1\" href=\"#footnote-3094-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/h3>\n<figure id=\"attachment_7996\" aria-describedby=\"caption-attachment-7996\" style=\"width: 200px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7996 size-medium\" src=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-200x300.jpg\" alt=\"a Starbucks drink topped with whipped cream\" width=\"200\" height=\"300\" srcset=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-200x300.jpg 200w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-683x1024.jpg 683w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-768x1152.jpg 768w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-1024x1536.jpg 1024w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-1200x1800.jpg 1200w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-65x98.jpg 65w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-225x338.jpg 225w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794-350x525.jpg 350w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21235824\/pexels-lisa-fotios-2374794.jpg 1280w\" sizes=\"(max-width: 200px) 100vw, 200px\" \/><figcaption id=\"caption-attachment-7996\" class=\"wp-caption-text\">Figure 1. Offering benefits such as health insurance to part-time workers helped Starbucks reduce turnover.<\/figcaption><\/figure>\n<p id=\"fs-idm202581200\">At Starbucks, CEO Howard Schultz understood that the single most important aspect of creating an enduring brand is its people. Schultz wanted to set Starbucks apart from other coffee shops and service businesses, and he did this by offering health benefits and stock ownership for people who work part-time. It had never been done before.<\/p>\n<p id=\"fs-idm215275696\">But the defining moment for the brand was the stock option and employee benefit plan. Scott Bedbury, the president of marketing of Starbucks at the time, explains. \u201cWhen Howard took over the company, he was not a rich man and he didn\u2019t own a house or even a car. Howard grew up poor in Brooklyn and was influenced strongly by his dad, who never got health benefits from any of his employers. This fueled Howard\u2019s drive to create a company that put employees first. He is passionate that when it comes to customers versus employees, employees will always come first.\u201d<\/p>\n<p id=\"fs-idm207842384\">But it wasn\u2019t easy, and it took a lot of courage to present this idea to investors. Bedbury said, \u201cWhen Howard tried to raise $2.8 million to buy the company from the three founders, he made 220 presentations and he got shut down in all but 12 of them. He was seen as an idealist who was going to put an unnecessary burden on the bottom line by offering benefits to part-time employees who viewed this as a temporary job. But Howard convinced them that turnover would drop, which it did.&#8221;<\/p>\n<p>&#8220;Store manager attrition was 15 percent, part-time hourly employees was 65 percent, compared to McDonalds and Taco Bell, which were about 200\u2013300 percent a year. That\u2019s turning over your work force every four months, and when you do that, your service suffers and there are all kinds of problems. I don\u2019t know why more people don\u2019t do it. If you give up some equity to employees, they\u2019ll reward you for that.\u201d<\/p>\n<\/section>\n<h3>If Starbucks&#8217; benefits are so attractive, why are so many <a href=\"https:\/\/sbworkersunited.org\/noneconomic-proposals\">Starbucks workers unionizing<\/a>?<\/h3>\n<p><div class=\"qa-wrapper\" style=\"display: block\"><button class=\"show-answer show-answer-button collapsed\" data-target=\"q34248\">Click to Show Sample Answer<\/button><\/p>\n<div id=\"q34248\" class=\"hidden-answer\" style=\"display: none\">Benefits aren&#8217;t the only things that workers care about. Click through the link above and see the variety of non-economic issues that they hope to change.<\/div>\n<\/div>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-3094-1\">Sources: Blog, MarketSmarter, http:\/\/www.marketsmarter.com\/blog, accessed March 12, 2018; Carmine Gallo, \u201cHow Starbucks CEO Howard Schultz Inspired Us to Dream Bigger,\u201d\u00a0Forbes,\u00a0https:\/\/www.forbes.com, December 2, 2016; Tanza Loudenback, \u201cThe Story Behind the Rise of Starbucks\u2019 Howard Shultz, Who Just Gave a Raise to Every US Employee of His $82 Billion Coffee Company,\u201d\u00a0Business Insider,\u00a0http:\/\/www.businessinsider.com, July 11, 2016; Monique Reece,\u00a0Real-Time Marketing for Business Growth\u00a0(Upper Saddle River, NJ: FT Press\/Pearson, 2010) <a href=\"#return-footnote-3094-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21,"menu_order":23,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Starbucks Perks More Than Coffee\",\"author\":\"OpenStax\",\"organization\":\"\",\"url\":\"https:\/\/openstax.org\/books\/introduction-business\/pages\/8-6-employee-compensation-and-benefits\",\"project\":\"Introduction to Business\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"frappuccino\",\"author\":\"Lisa Fotios\",\"organization\":\"Pexels\",\"url\":\"https:\/\/www.pexels.com\/photo\/starbucks-cup-2374794\/\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":3070,"module-header":"apply_it","content_attributions":[{"type":"original","description":"Starbucks Perks More Than Coffee","author":"OpenStax","organization":"","url":"https:\/\/openstax.org\/books\/introduction-business\/pages\/8-6-employee-compensation-and-benefits","project":"Introduction to Business","license":"cc-by","license_terms":""},{"type":"cc","description":"frappuccino","author":"Lisa Fotios","organization":"Pexels","url":"https:\/\/www.pexels.com\/photo\/starbucks-cup-2374794\/","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3094"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":7,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3094\/revisions"}],"predecessor-version":[{"id":9608,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3094\/revisions\/9608"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/3070"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3094\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=3094"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=3094"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=3094"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=3094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}