Nike Hrm Issues and Solutions

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Sarawak Campus
School of Business & Design

HBH225N
Human Resource Management

Semester 02/2012

Individual Assignment

Nike – Human Resource Management Issues and Solutions

Due Date: Friday, 30. November 2012

By Katharina Pilgrim, ID: 4310187

Executive Summary

In 1964 a company known back then as Blue Ribbon Sports was founded by Bill Bowerman and Phil Knight. 14 years later the US American multinational corporation officially became Nike, Inc., which is up to today engaged in the development, design and international marketing and selling of sport footwear, apparel, equipment, accessories and services. The company’s headquarters are located in Washington County, Oregon, near Beaverton in the United States of America. Nike’s revenue reached 24.1 billion USD in 2012 with an operating income of 3.04 billion USD and employing worldwide more than 44.000 people. The company is leading in supplying athletic apparel and shoes as well as manufacturing sports equipment and other athletic and recreational products. Just the brand alone is worth 10.7 billion USD, which makes Nike the most valuable brand among sport businesses. Its president and CEO is Mark Parker and founder Phil Knight still remains chairman of the board. The company’s name Nike goes back to the Greek goddess of victory, Nike [nǐːkɛː]. In 1971 the graphic-design student Carolyn Davidson drafted the company logo for 35 USD, the international trademark and better known today as the Swoosh. Nike owns a number of subsidiaries, including the four most important ones, the upscale footwear company Cole Haan, the surf apparel company Hurley International, Converse Inc., makers of the iconic Chuck Taylor All Stars sneakers and sports apparel supplier Umbro (About Nike Inc, 2012).

Table of Contents

1. Introduction 04

2. Analysis of HRM Issues 04
2.1 Employee Compensation 04
2.2 employee Motivation 05
2.3 Occupational Health and Safety 06
2.4 Quality of Work Life 07
2.5 Managing Diversity 08

3. Implication of Issues 08

3.1 Employee Compensation 08
3.2 employee Motivation 09
3.3 Occupational Health and Safety 10
3.4 Quality of Work Life 10
3.5 Managing Diversity 11

4. Recommendations 12

4.1 Employee Compensation 12
4.2 employee Motivation 13
4.3 Occupational Health and Safety 13
4.4 Quality of Work Life 14
4.5 Managing Diversity 15

5. Conclusion 16

6. References 16

1. Introduction
The following report will analyse five major human resource management issues that occurred at Nike Inc. over the past years, relating them to human resource management models and theories, followed by an implication of those issues, which means elaborating on the outcomes or better, what happened to employees or management after the issues occurred and how they impacted the entire company. This will be followed by giving recommendations for those issues by finding solutions using human resource information systems and the theory of change management. In the end an overall conclusion will be drawn, summarizing the major points and solutions found.

2.0 Analysis of HRM Issues
2.1 Employee Compensation
In 1998 the issue of unfair employee compensation in Nike’s factories in the South East Asian region arose and made its way to the public. Nike ‘s management was accused to use child labour in first place and pay Indonesian kids just 19 US cents per hour (Werner-Lobo 2008, p. 40). Workers complained that their basic monthly salary is not high enough in order to meet their cost of living. There were also complaints concerning unpaid wages and disputed overtime payments. Nike was accused to exploit their workers and use methods of compensation along with the overall treatment that are against human rights...
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