Assessing Three Human Resource Sustainability Initiatives At Nike

Workplace Safety and Health

In the course of this report, three HR initiatives of the company have been chosen. In the first part, they are identified and in the second part, how these three initiatives generate value towards the employees and the organisations have been assessed. The following section analyses the social and human importance of the initiatives. Lastly, the undertaking of these initiatives have been strategically considered and explained from the perspective of SMEs.

One Human Resource sustainability motive that the critics appraised in general were the substantial strides that the Nike management took in regard to the safety of the production team. The organisation have a proficient health, Safety as well as Environment survey team that is concerned with conducting factory audits as well as providing relevant training. However, as per Almohammdi (2014), Nike management was not able to accomplishment this sustainability goal entirely, owing to the complexity of their supply chains in few countries.

The mitigation to the issue regarding low wage as well as excessive overwork was an important step towards sustainability of the Human resource in the company. The independent manufacturing agencies who were teamed up with Nike had already been reflecting Nike’s ethical standards of paying at least the minimum country specific rate of wage to the companies’ production workers. However, various activists’ groups of the third world and the developing countries argued that the basic salary that the franchises of Nike provided was barely sufficient as “living wage”. On the contrary, they demanded that the company have some social responsibilities because of which they should give some basic employee allowances (Arustei 2015). IN this context, the organisation faced a complex issue. There have been actually no industry specific standard for a living wage The Association for Fair Labour coined the terminology “living wage”. However, Berisha Qehaja and Kutllovci (2015), implies that there was lack of consensus regarding what this term actually implied. Nike revised their Code of Leadership standards and ensured that the contract factories updated their wage and employee allowance policies. This was done so that the employees can suffice their discretionary needs parallely with the basic needs.

The company did take a deeper insight on that and inferred that hiking up the wages could crop up various unintended consequences. This could in fact drive out production from a country when the factors would find it difficult to render extra wages and hence unable to meet the industry standards. This could have elimination of jobs as a consequence. The company projected that simply making an artificial hike in salary would only have a nearly immediate effect on the housing, food and other related costs of the employees. They would not be able to perceive any real, tangible change of this allowance (Brown 2015). Hence, the company intended to introduce any futuristic change in the manufacturing department. It is true that raising the wage level would help to reduce the poverty in some demographic groups. However, it is true that inflation is also on the rise in the developing countries and hence the enhanced wage would again fall short to make their ends meet after few years. Instead, the company focused that the workers can be empowered through rigorous training and developed workplace environment. This would enhance their competency and thus enable them to earn better than living wage in the future.

Wages and Employee Allowances

In order to keep the workforce sustainable, the company initiated a policy for evaluation of the factory performance in alignment to a balanced scorecard. In this context, sustainability of the performance quality is an essential criteria. Hence sustainability have been chosen as a performance quality metrics along with cost, quality as well as delivery as the already existing criteria. Based on the metrics Index, each factory of Nike was allotted a colour band reflecting to what extent the respective factory have been successful in meeting the industrial standard set by the company (Daigger et al. 2017). The red band signified that the factory unit is unsuccessful in sustainably maintain the quality of production and required the immediate attention of the management. Yellow signified that the company standards are occasionally met by the factory unit and bronze band put that the factory unit receiving the band is in the good book of the company. The last bands are the silver and the gold bands which were awarded by the company to factories which have exceeded the expectations of the company.

The norms introduced for workplace safety are really commendable standards set by the company. The other global sportswear and sports shoes manufacturing brands have rare instances of manipulating their supply chain for the purpose of ensuring the safety of the production team. The company’s production cost aggravated, as a consequence of introducing this change. The Fair Labour Standards committee have invited this stride taken by the company as an innovative implication for ensuring the long term safety of the workers. However, influenced from the findings of Hemphill and White (2016), this can be implied that the Human Resource sustainability perspective is not absolutely applicable to this context. There is generally a high turnover rate among the production team. Hence, the production supply line of the company would be actually able to reap very benefit out of this strategic effort Nevertheless, this can be counted as a responsibility at large.

This change can be really perceived as a sustainable change. In fact this can be perceived as a two-step process. The company have taken a strategic step in partially increasing the salary of the production unit in the developing countries. Nevertheless, the critics were demanding the adoption of a more impeccable change that ensured the future sustainability of the workers as well as the organisation’s production line (Jilcha, Kitaw and Beshah 2016). In this context, the company focused on empowering the employees by making them more trained and adept in working over high-tech equipment. As an introduction of this sustainable change the employees would be able to engage themselves in more versatile platform and as an impact the importance and the payroll of the employees would both increase. According to the opinion of Lim and Prakash (2017), the lack of productivity is one major factor, pitted against which the majority of the experienced workers in the developing countries are actually not able to earn a living wage. In the scope of a single company, it is not possible to ensure high financial empowerment of the 1000 to 1500 approximate number of employees in the workforce of a factory unit. However, if they have technically sound skills, they would be able to gain critical positions in various positions in multiple organisations in the future. Besides, as an impact of the enhancement of the basic skills of the employees, the company would be automatically able to meet the organisational goals commendably and hence make gradual improvement in the salary structure of the company.

Performance Evaluation Matrix

It is not only sufficient to introduce productivity changes in the organisation’ production line. On the contrary, Metaxas and Tsavdaridou (2017), opines that it is also essential to map the productivity of the various factory units as a whole. In this respect, the company’s approach of “balanced scorecard” is highly appreciable. Introduction of sustainable changes requires manifold financial investments. However, the company can understand, how much the organisation have been benefitted or would profit in the future, as an outcome introduction of this change.

The human outcomes of the first initiatives are maximum among these three. The workers would be benefitted with sustainable health, whether or not they contributing to the fulfilment of the organisational goals in the future.

It is almost impossible to financially ensure the hike in salaries of all the workers in the production teams. This is because the Nike organisational management do not have direct control over the franchised production agencies, under which the employees are directly engaged (Nicosia 2015). This is why, the management have decided to technically empower the, employees, so that their working credibility might get enhanced and their career gets boosted in the long run. However, other than that, there are no immediate human outcomes of this initiative. 

The social as well as human outcomes of the third initiative are negligible. The workers would only be able to enhance their self-awareness of their credibility to address the organisational objectives as an impact of the implementation of this “performance evaluation matrix” (Pratiwi and Salsabiela 2015). This is mainly an initiative that is faceted to the wholesome outcomes of the production units.

In small and medium organisations, it is often quite difficult to map the safety needs of the workplace. In big organisations like Nike, there are interval workplace survey committees that are dedicated to the analysis of the safety needs of the organisation. Nevertheless, the companies also have employee unions that uphold the employees’ distress and other issues facing them before the management. On the contrary, the SME employees do not have these workplace provisions. This is why the safety norms of the SME employees are not met at times.

According to the opinion of Tulbure (2016), small and medium enterprises, nowadays give strong focus towards training and development of the employees so that they are able to put up strong competitive performance and rise to the industry standards. This is why, although, the SMEs are not able to provide competitive salaries, they generally provide high quality training so that they are able to compete with the other parallel companies.

In SMEs there is actually no need of the third initiative. All the factory units (very less in number and generally one integrated unit) are directly owned and supervised by the company’s professionals, manually.

Conclusion

Analysing the three initiatives by the company, it can be easily concluded that from a strategic perspective, the second initiative is the most important. This helps the company by enhancing productivity as well as workers also, in the long run. Considering the first initiative, this is more of a Social Responsibility and highly benefiting from the employee’s perspective. Lastly, the third initiative is basically a step to measure the advantages of the implementation of the other HR sustainability initiatives.

Reference List

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Berisha Qehaja, A. and Kutllovci, E., 2015. The role of human resources in gaining competitive advantage.

Brown, G.D., 2015. Effective protection of workers’ health and safety in global supply chains. International Journal of Labour Research, 7.

Daigger, G.T., Murthy, S., Love, N.G. and Sandino, J., 2017. Transforming environmental engineering and science education, research, and practice. Environmental Engineering Science, 34(1), pp.42-50.

Hemphill, T.A. and WHITE III, G.O., 2016. The World Economic Forum and Nike: Emerging ‘Shared Responsibility’and Institutional Control Models for Achieving a Socially Responsible Global Supply Chain?. Business and Human Rights Journal, 1(2), pp.307-313.

Jilcha, K., Kitaw, D. and Beshah, B., 2016. Knowledge Diffusion to Workplace Safety and Health Improvement. Journal of Optimization in Industrial Engineering, 10(21), pp.7-17.

Lim, S. and Prakash, A., 2017. Do Economic Problems at Home Undermine Worker Safety Abroad?: A Panel Study, 1980–2009. World Development, 96, pp.562-577.

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Tulbure, I., 2016. Local Sustainability Implementing Strategies. International Multidisciplinary Scientific GeoConference: SGEM: Surveying Geology & mining Ecology Management, 2, pp.621-628.