Performance management in China: Starbucks’ local adaptation

Hello, and welcome to today's session. My name is Dr. Tinkuma Edafioghor. I'm a senior lecturer in human resource management at the University of the West of England, here in the UK. In today's session, we'll be looking at performance management in China and we'll explore how Starbucks adapted its performance management practices when expanding into China. I mean, this is a fascinating case because it has a strong global human resource philosophy, but it also faced cultural challenges that required adaptation.

Just to give you a bit of background about Starbucks. Starbucks came into China back in 1999, fast forward to today and they have got over 6000 stores. Now, that growth isn't just about people wanting coffee, as you would imagine, it's also about how Starbucks takes care of its employees, or as they call them, partners. That's what makes China such a great example of performance management on a global scale.

Let's look at what the challenges were with Starbucks in China. In the US, Starbucks relied on a performance system built around individual accountability, but also short-term goals and pretty direct feedback, but when they try to apply that same strategy in China, it didn't quite fit. Remember, China has a more collectivist culture, so teamwork, harmony, and long-term relationships mattered a lot. Blunt feedback that could actually cause someone to lose face in the Chinese culture and that mismatch meant that there was a real risk employees could disengage and performance might start slipping out of alignment.