Nike - Reward and Remuneration - Case Study Example

Nike Reward and remuneration Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction Reward is the appreciation of a job well done which can be in monetary value or inform of incentives like promotions and sponsorships. Remuneration is the standard payment an employee or a casual is entitled to receive at the end of a period let say one month (John 2012). This paper will discuss the rewarding systems used by Nike Company in Canada and United Kingdom. The purpose of this paper is to discuss how rewards are applied in the two countries and the benefits associated with rewards and remuneration. In the competitive global business, many organizations are contemplating on how they can improve their competitiveness for the market share (Dan 2011). One of the strategies deployed to increase competitiveness of firms is through reward and remuneration. From the research which has been conducted it seems there that there is close link between the effective remuneration and reward with performance of organizations. In this regard, this paper will focus on how rewards and remuneration are applied by Nike in Canada and United Kingdom. Nike is an international organization which specializes in shoes, clothes and other sporting materials like balls. In the recent years Nike has been facing some challenges in terms of remuneration and rewards. Therefore this paper tries to find out how reward and remuneration is effective in these two countries. Finally a conclusion will based on the arguments of the research and how the rewarding systems can be improved. Nike in Canada There many types of rewards which have been used by Nike in Canada. These rewards can be financial or non financial rewards (Barridge & Robinson 2003). For many years now Nike has been rewarding its employees through many types available in Canada and this has enabled the organization to compete and maintain its market share. They have been applying the financial rewards which involve appreciating the efforts of employees by giving financial resources to the well performing employees. Apart from the normal salaries of the employees, the workers also receive some additional finance for their good performance. This type of rewarding employees has improved the performance of employees in terms of quantity and quality of the output. However this rewarding system has been emulated by many organizations like Purma which also began to reward their employees through this system and this increased competition to Nike. Another type of reward which has been applied by Nike in Canada is the non financial rewards (Carrion & Poppel 2007). These rewards are sometimes called relational rewards and good examples are employees’ recognition and employees’ voice. This type of rewarding is hard for competitors to emulate because they involve the feelings and participation of employees and not the tangible materials. Nike organization in Canada has applied this technique and it has really worked. This reward has been for competitors to copy hence Nike still has a competitive advantage. Some of the products of the Nike in Canada which have more competitive advantage than others are shown in appendix A1 below. In addition, Nike Company did use non financial rewards to motivate its employees by giving rewards which were Nike extreme sport 4 Golf carry bags. These bags were expensive and prestigious which were given to best performing employees. These bags encouraged employees to work extra hard so that their efforts could be recognized and get the bags. In this regard the performance of the organization is improved. On the other hand, remuneration has been applied by Nike in Canada to motivate its employees. The salary is neither too low nor too high although the employees do not complain much about the salaries and wages. In this regard the employees are motivated to improve their productivity as well as the quality of products being manufactured. Nike is one of the international companies which have managed to stand out in the market in terms of the market share. Nike has been manufacturing best quality clothes, shoes and even bags. All this is as a result of employee creativity because of motivation which drives employees to offer their best skills. For instance the Nike’s average salary is $89,079 while the median salary is $81,600 which means that majority of the employees are well remunerated hence they are motivated to improve their individual output in terms of quality and quantity. The remuneration of Nike Company ranges between $24,000 to $350,000. The remuneration is made according to the job position (Selena & Federica 2008). Higher rank earns more than the lower rank and this creates job satisfaction among employees. The importance of rewards and remuneration is to motivate employees and compensate them for their efforts towards their employer (Selena & Federica 2008). Through motivation the employees will be creative and improve the quality of the products so as to meet the customer expectations in terms of quality. Reward and remuneration Nike in United Kingdom Rewarding and remuneration systems of Nike in UK are no much difference from Nike in Canada. The systems adopted are aimed at improving the performance of the employees by maximize the output and minimize the resources. Majorly according to the research conducted the major rewards practiced in UK are the financial resources (Emerald 2004). Total rewarding strategy is used to appreciate the employees’ effort in their work place. Each financial year the employees are appreciated through issuing of bonuses. The bonuses are offered on a flat rate where each rank in the organization gets a bonus of certain percentage of the supernormal profits made. For instance the employees at the lowest rank receive a bonus of 10 percent of the supernormal profits made and which is shared among the employees. Another reward made to employees is the recognition of employees (Emerald 2004). The employees are given time to explain their views during decision making and the management comes up a conclusion after consultations. This strategy of reward motivates employees because they feel they are important to the whole organization when they are consulted. As a result of motivation the employees offer their best skills in production thus improving the performance of the organization through quality and valuable products manufactured. For instance Nike boots have stood out in the market for along time because of the quality of the product. However this strategy of rewarding employees can lead to unnecessary competition among employees because they will be competing to see who comes up with a better idea which can be viable and adopted by the management. This is especially when one idea from among the employees is chosen as it may lead to jealousy. Rewarding employees can take the form of incentives (Guy & Fernando 2012). For instance the employees are allowed to use the organization facilities like the computers, company cars, canteens which are subsidized by the organization and company telephones. Theses incentives develop a sense of social responsibility among the employees leading to workplace citizenship and improve the productivity of the organization. In appendix A2 below there are the products of Nike in UK. Concerning remuneration, there are various methods through which the employees of Nike can be compensated in UK. First, there is the basic pay which is the basic monthly pay for the employees (Shamsul 2006). For instance the employ is paid £25 per hour and works for thirty hours in a week it means that in a month the employee can earn £3000. This payment alone may motivate an employee towards improving productivity but it takes the efforts of rewarding the employees to motivate them. Another method of paying the employees is the overtime payment (Shamsul 2006). This remuneration is basically made to employees who work for extra hours than the standard hours expected from each employee. For example an employee may decide work during unsocial hours which is overnight. The payment for this overtime hours is different apart from the basic pay. This payment has increased the production of the organization because employees produce more than what they get thus the organization benefits more although the employee also benefits. Commission is another method of payment used by Nike in UK (Philipp & Felix 2007). This is especially to employees who are particularly concerned with sales of the organization. They are paid for instance a commission of 25 percent of what they sale. This method of payment motivates salesmen to work hard and attract many clients so that they will earn a commission on what they sale. This method also improves the sales of the firm There is also payment of bonuses which is meant basically to motivate employees towards achieving a target (Aswadi et al 2009). For instance if the organization wants to achieve a target of 1million customers in one month, then it will have to pay bonuses and encourage them to work hard towards attracting many more customers. With this financial encouragement am sure all the employees will work hard to achieve the target so that they will be paid the bonus next time. Furthermore, there are payments which are made based on the profits made in the financial year. When the company makes profits in the financial year, a certain percentage is taken to pay the employees and retain some. Nike in the UK mostly applies this strategy of appreciating employees’ efforts and as a way of being responsible socially. Importance of rewards and remuneration There are a number of benefits reaped from rewarding and remunerating employees well. The first benefit is that the employees of Nike feel motivated in their workplaces (Edvvinson & Camp 2005). Rewards are associated with recognition and identifications of the employees’ efforts. In human nature, every one needs to be appreciated so as to keep self esteem high. Therefore with the rewards and average or good remunerations, employees feel part of the organization and develop a sense of belonging with the organizations thus improve the performance. Rewards and remunerations also help the firm to compete effectively for the market share (Thompson et al 1998). When the employees are motivated they become creative and establish better ways of accomplishing tasks with least cost as well as improving the quality of the product so that they can stand out in the market and increase the sales. Compensations like bonuses encourage the employees to improve their skills in the workplace through sharing of ideas hence generate new viable ideas. Remuneration and rewards helps employees to meet their basic needs (Judith 1993). Besides the basic needs, there are many programs which fit the employee demands. For instance the employees will join various schemes of their choice like pensions, medical covers, sponsorship programs for education and housing plans. These benefits make the life of employees to be comfortable by reducing stress and concentrate on the organization objectives. Finally, rewarding and remunerations has helped Nike to attract and maintain skilled employees. Any employee can be attracted to good wages and salaries besides the working conditions. Therefore Nike has been able to attract and maintain skilled employees. Once they enter into the organization they find no reason of going out because the payment is competitive. Similarities between Nike in UK and Nike in Canada First and foremost remuneration and reward as applied by Nike in Canada and UK both aim at motivating their employees (Aswadi et al 2009). The rewards basically aim at boosting the morale of employees so that they can increase their competency in the work place. For instance bonuses are made to encourage employees to work hard so that they will continue receiving the benefits. Secondly, they both use non financial rewards to motivate their employees. For instance Nike both in UK and Canada reward employees with Nike extra sport 4 Golf bags which are extremely prestigious. This also aims at motivating employees by recognizing their efforts. Now that the bags are not provided to everybody but to those who have performed well, all employees would work hard to so as to get the bag next time they are issued. Motivation leads to social responsibility and teamwork through out the organization. Another similarity is that they apply total rewarding strategy when rewarding employees (Shamsul 2006). This strategy motivates employees collectively because the rewards are administered in a certain percentage to all employees. Total rewarding is appropriate because there is no discrimination when rewarding as all employees of the same job position get the same percentage of reward. This is why total reward strategy is common in much organization because it eliminates possible conflicts. Finally, they both apply recognition as a strategy for motivating employees. Nike in UK and Nike in Canada appreciate their employees by recognizing their thoughts and ideas. Management of both organizations considers what their employees have to give before making a conclusion because employees are a source of information. Conclusion From the above research conducted, remuneration and rewards are given much consideration by Nike in its operations. Rewards and remuneration motivate employees because they recognize and appreciate the employees’ efforts. Some of the rewarding strategies adopted are total rewards strategy, recognition and bonuses strategy. Some of the remuneration strategies used are the basic pay remuneration, commission payment and bonuses payment. The aim of rewarding employees is to motivate them to improve their productivity which improves the performance of the whole organization. Remuneration on the other hand attracts and maintains employees besides motivating the employees. References Aswadi, E. Wahab, A. & Rahman, A (2009). Institutional investors and director Remuneration: do political connections matter, Advances in Financial Economics, Vol. 13, No. 2, pp. 119–137. Berridge, K. C. Robinson, T. E. (2003). Parsing reward. Trends Neurosci, Vol. 26, No. 9, pp. 13-507 Carrion, A. O. Poppel, E. (2007). Dopamine, learning, and reward-seeking behavior. Acta neurobiologiae experimentalists, Vol. 67, No. 4, pp. 481-488. Dan, O (2011). Financial services remuneration in the UK, Journal of investment Compliance, Vol. 12, No. 2 pp 76-83. Emerald, K (2004). Understanding Reward Management, A Handbook of Remuneration Strategy and Practice Vol. 18, No. 3, pp. 342-654. Edvinsson, L. & Camp, J (2005). Intelligent remuneration in the knowledge economy for Growth of intellectual capital, Journal of Human Resource Costing & Accounting, Vol. 9, No. 2, pp.94 – 111. Guy, D. 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Are Performance-Dependent Rewards a Viable Tool to Assure Managers’ Commitment Toward Firms’ Goals about Risk Management, Studies in Managerial and Financial Accounting, Vol. 18, No. 1, pp. 243-654. Appendix Diagrams A1: Nike products in Canada Diagrams A2: Nike products in UK Read More