Starbucks announced on Thursday that baristas and shift supervisors at its U.S. locations will be eligible for quarterly bonuses of up to $300 each, totaling $1,200 annually, if their stores meet or exceed specific sales, operational, and customer service targets. The program, set to begin in July with the first payout in the fall, is part of CEO Brian Niccol's broader "Back to Starbucks" turnaround strategy, which has already shown early signs of success with a 4% increase in same-store sales in North America during the company's fiscal first quarter.
The bonuses, which could increase employees' pay by 5% to 8% on average, are tied to performance metrics such as customer experience, speed during peak times, partner scheduling, inventory, and health and safety. The company also introduced a new tipping option, allowing customers to tip via credit or debit card when ordering through the app or at the register, which could further boost barista earnings.
However, the new incentive program will not immediately apply to the approximately 5% of U.S. Starbucks locations that are unionized, as it will be subject to collective bargaining with Starbucks Workers United. Negotiations between the company and the union have been stalled for over a year, though talks are expected to resume this month. The union has reportedly lowered its minimum-wage demand from $20 to $17 for 2024.
In addition to the bonuses, Starbucks will shift to weekly paychecks for all employees, starting in August. The company has also been working to improve barista retention by adding assistant managers to most North American locations this year. Niccol's turnaround plan includes efforts to enhance the customer experience, such as encouraging baristas to write messages on cups and making cafes cozier.
Starbucks stock has risen nearly 8% this year, reflecting investor confidence in the company's progress under Niccol's leadership.