Human Resource Management
Case study: Nike Company
Introduction
Human resource management is important department in ensuring that the welfare of the employees are well addressed. Organizations are made up of people who propel them towards attainment of their goals. Organization, which provide support for their employees are geared to succeed in their quest (Smith & Meyer 2000, p. 319). This paper discusses various human resource issues pertaining to Nike Company.
Background of Nike Company
Nike is one of the companies that have embraced change in its codes of conduct. The company is the largest athletic shoe company in the world. It also designs, manufacturers and markets sports and fitness products across the globe. It controls 36% of the athletic shoe market in United States and more than 33 % of the global athletic footwear market (Richard, Thomas, Monica & Fei 2007, p. 26). In 2004, the company had 800 suppliers, which employed around 600,000 employees that worked in 51 countries. The company has employed 24,291 direct employees, many of whom situated in United States.
Human resource aspects
The two aspects that Nike Company adopted related to labor and environmental health standards for the employees working in the supplier’s plant. These two aspects were arrived at after the company was criticized for failing to take necessary step of ensuring that its workers were well treated. The company had been wrongly accused because; this problem was experienced in its supplier’s plant (Richard, Thomas, Monica & Fei 2007, p. 26). Some of the accusation that was leveled at Nike was sourcing its products in countries, factories were poor working condition, low wages, and human problems were rampant. The workers in the supplier’s plant from Indonesia were underpaid, there were poor working conditions in Vietnam and China and children were used as a source of labor in Pakistan and Cambodia. These allegations tarnished the image of Nike triggering the company to come up with codes of conduct that would ensure that these challenges were eliminated. Therefore, the company by 1992, it formulated codes of conducts, which it supplied to its various suppliers situated in various location (Richard, Thomas, Monica & Fei 2007, p. 25). This was a change that the company implemented to ensure that labor standards and working environment was transformed.
Organizations have the obligation of ensuring that they maintain their image. Image of the organization promotes the products of a company and increase its sales. Organizations, which have developed a positive image, would strive to safeguard that image in the eyes of the public. Poor working conditions and lack of proper working conditions not only tarnishes the reputation of the company but have the potential or impacting negatively on the company’s productivity (Samat, Ramayah & Saad 2006, p. 713). Employees’ welfare therefore, needs to be given priority to ensure that they commit their skills and energy towards achievement of the organization objectives. Incentives should be provided to motivate employees to commit their efforts in ensuring that they contribute to the success of the organization.
Labor standards
The labor standards as well as health and environment standards in the Nike company have since then been improved. The company created new departments of labor practices and Nike environmental action team (NEAT) to take care of issues of labor and safety of the employees (Richard, Thomas, Monica, & Fei 2007, p. 21). One of the changes effected; was increase in the minimum age of employees that worked in the footwear factory to 18 years. All other workers who worked in apparel and equipment the age limit was increased to 16. This was in response to address the increased instances where children were subjected to child labor. This change aimed at ensuring that, child labor was avoided at all cost. Many statutes have passed legislations on age limits that employees need to adhere to. Most of countries require that people aged over the age of 16 to be employed in any organization. This is the recommended age as people below the age are considered as children and subjecting them to work is child labor. Employees who do not abide to this are usually persecuted in the court of law (Ployhart & Moliterno 2011, p. 127).
Employee training is yet another important requirement that an organization must invest in. Training impacts new skills in employees making them to be more efficient in their operations. Training allows the productivity of the organization to increase. It is also an instrument of motivation (Marler 2012, p. 6). Employees have different needs and ambitions that they want to achieve. Professional training is one way of ensuring personal development of the employees. Maslow’s hierarchy of needs, points out that employee aspire to reach their self-actualization level through training and personal development. Therefore, it is essential for organization to invest in employee training. Nike Company undertakes an initiative of training its managerial skills and cross-cultural awareness, company safety healthy attitude management and people investment and environment programmes.
Training is one way of enhancing committed employees to the organization (Armstrong 2009, p. 34). There is also some association of training variables with the organizational commitment. Therefore, providing training to employee allows them an opportunity to be highly committed towards the objectives and goals of the organization. Work life policies that consist of job sharing, flexible scheduling, flexible timing, leave policies that allows employees to take care of the families’ matters and working condition gives the employee energy to remain loyal on their work and this increases the productivity of such organizations (Castrogiovanni & Kidwell, 2010, p. 225).
Different people have different beliefs and values. Multinational companies that transact business across various countries need to train its employees on cross-cultural awareness (Kaifeng et al 2012, p. 1264). Cross-cultural training allows people to appreciate each other values and beliefs. Managers who are well trained on cross-cultural are well positioned to provide better leadership as they will respond to the diverse needs of their workforce. Therefore, training on culture is important and should be embraced by many companies that are operating or doing business abroad (Steel, Griffeth & Hom 2002, p. 149).
In line with labor practice, Nike also developed a new incentive system to evaluate and reward its managers for their efforts in improving the labor and environment standards among its suppliers. Employee motivation is one of the functions of an organization. In developing an employee incentive scheme, it is important to put into consideration various issues. The incentive should be able to motivate employees to perform their tasks well. Many organizations use money as their major motivation factor (Landau & Hammer, 1986, p. 385). However, employees have different needs and therefore, organization have the responsibility of ensuring that these needs are satisfied. Apart from monetary rewards, employees require recognition, promotion among other motivating incentives to encourage them to work hard and remain committed to the aims and objectives of the organization (Honneth 2009, p. 23). Therefore, Nike initiative of developing appropriate incentives was a motivation for the managers and this was going to impact positively on the level of their performance at their work place.
The company has in the recent past uplifted its standards by intensifying on the monitoring and inspection of how suppliers manage their workers. It launched an M-audit (management audit) that was to be undertaken by the in-house management team of the company. The audit major aim was to ensure that all suppliers adhered to proper labor management practices and provides better working conditions for their employees. Working conditions has a direct proportion to the level of production of an employee (Steers 1977, p. 46). An employee that works in conducive environment, where safety healthy is given a priority is able to execute their duties with diligent and commitment.
The crisis has seen Nike company pull up its socks in labor practice as well as in health and environmental standards. The rights of employees are respected including the right to free association and collective participation. Various researches has suggested that organizations which allow free communication and participation of employees in their decision making have higher chances of motivating employees and therefore they have a higher chance to record positive performance (Heneman & Schwab 1985, p. 23). Employees are essential in an organization and an organization that recognizes them is likely to record positive performance. The company also allowed its employers to form unions to enable them has collective bargaining when addressing and demanding their rights. These avenues have created employee autonomy and this has created a positive working relationship between the management and the employees in various regions that the company operates.
The decisions that concerns hiring, salary, benefits, termination, advancement or retirement should solely depend on the employee ability to do the job. This is the task of human resource managers (Durovic 2012, p. 83). They have the responsibility of ensuring that they uphold to equality when hiring and carrying out all functions relating to deployment and termination. Furthermore, discrimination based on race, creed, marital status, gender, political beliefs, age, sexual orientation, political beliefs, maternity or marital status should not be tolerated in the organization. Nike has ensured that all its contractors abide by these principles in their operations.
Relating to labor practices, the company ensured that there was no forced labor, prisoners or people convicted in the court of laws employed in the company. Contractors were also required to provide their employees at least a minimum age or the prevailing industry wages whichever was higher. Employees were also compensated based on the agreed terms of contract and depending on the level of skills and knowledge, the individual had. Another important concern in the labor practice pertains to the hours of work or overtime (Fitzgerald & Mills, 2012, p. 25). Every organization has its own arrangements on the amount of time that employees need to stay at their work place. The contractors or rather the supplier had to comply with the legally mandated work hours and was supposed to use overtime when all employees were compensated. All these arrangement was to be respected. The workers were not supposed to work for more than 60 hours in a week.
Environmental health standards
Working conditions in which employees work need to be conducive to enhance increased productivity. It is the responsibility of human resource department to put in place sufficient measures in an organization to ensure that working conditions are appropriate to ensure that employee perform their duties well (Obeidat 2012, p. 192). The working condition of employees working for Nike suppliers was dilapidated. The requirement that all footwear suppliers adhere to the United States occupational safety and health administration (OSHA) standards for all indoor air quality was a clear indication of efforts to improve the working conditions of the employees. To ensure that these changes were effected, the company deployed various corporate responsibility managers in different supplier plants across the countries. This manager’s role was to ensure that the facilities were conducive and that they abided by the labor requirements (Mowday, Steers & Porter, 1979, p. 224). These managers and inspectors had the duty of inspecting of supplier’s footwear factories on weekly or daily basis.
It is also the duty of human resource department to provide a safe and a healthy work place. The working conditions that employees work in should be conducive to enable them to work with zeal. Good working condition requires the management to ensure that they put in place various things (Harry & Diederik 2004, p. 73). First is for the organization to respect and give their employees dignity. Employees require to be given their right at their working place. They have a right to work in a free place that is free of harassment, abuse or corporal punishment. The mode of administering punishment should also be appropriate to show respect and dignity. Employees should not be dismissed at their working place without a warning letter. The stipulated rules should be provided and employees should not be subjected to harsh working conditions. They need to be provided with enough safety measures and cover to ensure that they are protected from bad air and dangerous working environment.
On safety, health, and environmental standards, all the suppliers were required to ensure that safety and health policies and standards were implemented (Farndale et al 2010, p. 849). They had to ensure that work related injuries and illness were reduced and general health of employees was promoted. Employment had the right to access to good medical treatment. Provision of good health care is viewed as a motivating factor. Therefore, many companies are providing medical cover to their employees to ensure that they are motivated to commit their efforts in promoting the success of the organization.
Some of the human resource management practices are lined with commitment (Meyer & Alllen, 1997, p. 23). Employees as well and management should be committed to ensure that they achieve their goals. They cannot achieve their objectives and goals without working hard (Ankrah & Sokro 2012, p. 7). For business efficiency and effectiveness, there must be maximum personal investment. The parties or the stakeholder should strive hard to attain good performance at their work. Good performance cannot be achieved on silver plate but it involves the inputs of the people.
Conclusion
Nike is one of the companies, which did not factor in the welfares of their employees especially those that worked in suppliers plants. Human resource practices were not in place to ensure that the welfare of the employees was well taken care off. Employees are the most important assets in the organization and therefore require to be well taking care and motivated to help improve the performance of the organization. This was no the case in Nike company until when an alarm was raised that nearly indent its image. This led to adaption of codes of ethics, which enlisted various issues that were to be observed or adhered by the supplier’s plants managers. The most prominent human resource aspects that the company instituted was on labor practice and the health and environmental standards in the organizations. Various issues pertaining to labor such as employee compensation, the working condition, hiring process, termination process among others were improved. Likewise, safety and health standards that aimed at ensuring that employee’s health status was upheld were considered. These changes so far have affected or impacted on the company’s profitability as it has enhanced efficiency. Employees are motivated and take an active part in ensuring the organization achieves its objectives. Therefore, it is imperative that organizations can go milestones away in terms of achieving their goals and aims if they recognize the value and the power of their employees. Human resource is essential and key in the determination the destination of a company just like the case of Nike Company.
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