Proposed Compensation Scheme for Nike, INC.

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Since the 1980s, it has been established that there must be a strong association between employee compensation and business strategy (Hufnagel, 1987). However, the development of strategically-oriented compensation scheme is a complex endeavor that requires consideration of numerous factors. Some of these elements are evolving employee needs, changing employee and societal demographics, the changing sexual composition of the labor force as well as transforming qualifications of job applicants (Dawson, 1995). It cannot be emphasized enough that strategic compensation enables an organization to align employee interests with those of the owners of the company (Santone, Kevin, & Britt, 1993). Indeed, numerous studies attest that effective compensation schemes can be tools for employee motivation, high levels of which can lead to excellent organizational performance. However, a sad reality is that not all organizations have strategic compensation programs that seek to align employee interests with that of the enterprise. This paper presents a proposed compensation scheme for Nike, Inc. (Nike), a company that has had issues with employee compensation, particularly for offshore factory workers (Taibi, 2013).
Nike, Inc. (Nike) is among the world’s largest designer, distributor and marketer of sports footwear, apparel, equipment and accessories for different athletic and fitness activities (MarketLine, 2013). Nike is one of the most powerful brands in the world, and the company sells its products sells its products across 190 countries in the Americas, Asia Pacific, Europe, Middle East and Africa (MarketLine, 2013). Headquartered in Beaverton, Oregon, Nike currently has 44,000 employees. Nike has a global market share of the internati...

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...namely, (i) they adhere with American laws; (ii) they encourage improved performance especially in terms of sales; (iii) they consider customer satisfaction; (iv) they are competitive; and (v) they encourage the retention of the best performers. However, there could be drawbacks to such compensation scheme if Nike is not careful, especially when it comes to the individual incentives. For example, the company might set unrealistic standards for the employees and could serve to promote inflexibility for the relevant workers for which they are intended. In light of these, a primary proposition for Nike management is to support such compensation scheme with the necessary needs assessments, performance evaluation processes as well as appropriate training and development. Through these measures, employee interests become aligned with organizational goals and objectives.

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