What organizations (Armstrong, 2006). The main objective of HRM

What makes people want to work at
Nike? What makes them stop looking for a different work environment at the end
of their contract? How does Nike strategize to retain their skilled employees?
How does Nike balance out the rewards with different employees keeping and fair
but competitive at the same time?

HRM as defined is to ensure a
strategic and coherent approach to the employment, development and well-being
of people working in organizations (Armstrong, 2006).  The main objective of HRM is the managing of
an organization most important asset, its employees, to enable the organization
to succeed through its people. Reward and retention
plays a very big role in the everyday operation of the HR department, as skill
is scarce, and organizations want to retain skilled employees that can
contribute to the company. Not only because retaining good workers is
critical to any organization (Gering and Conner, 2002), it will also ensure
smooth day-to-day operations allowing the company to keep growing and maintain
a low turnover rate keeping unnecessary financial costs at a minimum reducing
the opportunity cost.  Everyone sees
rewards differently, because each person has their own principles and values.
Therefore, the policies that Nike offer must be flexible and reasonable, while
maintain its competitiveness nationally and internationally.

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 This report serves to determine how Nike strategizes
rewarding and retaining their staff, their strength and weaknesses with their
said policies, and the role their policies play in keeping their skilled
employees from leaving the company both nationally and internationally.

 Organizational overview,
policies and procedures

Nike, if not the biggest, is one of
the biggest athletic footwear and apparel supplier in the world. They employ
approximately 74,400 employees and operate a total of 1,142 retail stores
worldwide, therefore it is paramount that a company of this magnitude have
retention policies in place to keep the employees happy and not seeking for
another job. Being an international giant, Nike’s policies must be specific to
location given that the diverse workforce have different beliefs/religion,
cultures, down to the simple difference of the sexes. As part of Nike’s
retention plan, Nike provides personalized benefits packages depending on the
position, location and other eligibility requirements.
However, some of their work perks listed on the website include but not limited
to, relocation, summer hours, discounts, global impact, fitness culture,
transport, coaching, sustainability, finance, health, and family (Jobs.nike.com,
2018). Nike boasts a diverse and inclusive workforce, and with its increasing
racial and ethnic diversity the continue to strive.

To consider
retention we must first look at the base of the problem, turnover. Turnover is “defined
as an employee leaving an organization for any number of reasons (Allen, 2008)”.  Turnover is not a simple matter in the sense
that it has three major concerns that accompany it, these include: turnover
costs, negative impact on business performance and the increased scarcity of
skilled employees. These key factors explain why business may want retention
policies in place to avoid having to deal with such costs in the future.
Although not all turnovers are considered harmful to the to an organization,
such as in a case where the new hire would be more productive than the prior,
in general terms voluntary turnover is bad news to a company. By understanding
why employees leave, we can tackle the problem and reverse engineer a solution
to combat turnover, hence creating a retention solution.

One strategy suggested an
organization should consider the four following elements when incorporating a
sound retention policy: A business plan, a value proposition, progress
measures, and management influences (Gering and Conner,
2002). These four elements should allow the organization to weight the factors
surrounding this matter and come up with the best plan. For example, the
business plan would all the management to weigh the turnover and retention
costs and consequences, other costs may include the implementation of a
retention strategy and the upkeeping of it. While the value proposition allows
the company to identify their strengths and how they differ from their
competitors, in aid of determining the organization’s appearance to future potential

Nike’s retention policy involves
the use of a compensation system where the company provides benefits, mentioned
earlier, to retain employees. In addition to the basic work perks that Nike
provide they also customized benefits packages tailored to the specific
employee’s needs. However, this may not be as effective as some may think,
given that it ‘may raise concerns about internal equity’ (Allen, 2008). On top
of the benefits listed above, Nike also offer the following benefits to eligible
employees: A competitive base salary that reflects accountabilities, skills, experience
and performance; medical, dental and vision insurance; company-supported life and
disability insurance for financial protection; retirement savings; opportunity to
enrol in the Employee Stock Purchase Plan in most locations; Paid time off: Employee
discounts on NIKE products; Access to, or discounts on, fitness centres; Employee
assistance plan (NIKE, Inc., 2015).

Other retention practices include: recruitment,
where applicants are presented with a realistic job preview to make sure that they
are in the right work environment for them, but the downside to this is that some
candidates will be deterred hence reducing the pool; selection, using ‘biodata’
during the selection process allows manager to

More so, we must consider employee
engagement and employee motivation when dealing with retention, this is because
retention has direct correlation to engagement and motivation. Employees that are
engaged with their work, are usually satisfied with the working environment and
the company. In other words, if the employees are committed they are less
likely to leave (Driving Performance and Retention
Through Employee Engagement: A Quantitative Analysis of Effective Engagement
Strategies, 2004). Additionally, retention could be further achieved simply by
motivation; an alternative approach to retention proposes that an
organization uses motivational strategies to retain employees. Incentives for
individual motivation, organizational motivations and societal motivation (Bansal, 2014). If the employees are motivated, it gives them
reason to work as part of the organization, and allows them to seek ways to be
engaged which in turn fosters loyalty, that would ultimately retain them within
the company.

Rewards just like motivation can be
separated into two categories: Intrinsic vs Extrinsic. Intrinsic rewards
include ….

When considering a reward system,
we must consider at least two different aspects on the HR cycle, which are
employee motivation and performance management. Reward itself is considered as
extrinsic motivation