Besides creating and implementing a code of conduct

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Besides creating and implementing a code of conduct, the company also has developed a program that helps to deal with claims about unfair practices. Nike, Inc. has hired about 100 people that randomly inspect company’s factories (Snell & Bohlander, 2013). The Fair Labor
COMPENSATION PRACTICES AT NIKE, INC. 5 Association has also received a privilege to inspect any Nike’s factory for compliance with world standards for working conditions. The company has audited its factories approximately 500 times between 2002 and 2004 (Snell & Bohlander, 2013). Nike rated the working conditions and compensation policies on a scale from 1 to 100 and stopped producing in the factories that received less than 60 points unless conditions have been rapidly improved. Thus, monitoring is one of the most effective measures that are used by Nike to ensure that company’s factories employ fair and legally mandatory compensation practices. To make the monitoring process even more efficient, Nike has created a non-governmental organization. It is called the Global Alliance for Workers and Communities and is aligned with several other groups with similar goals. This multi-stakeholder partnership was created to respond to the needs and concerns of factory workers in global manufacturing supply chains (Nike, Inc., 2001). This organization is intended to develop and implement programs that respond to the employees’ needs concerning wages, working conditions, and healthcare. All the measures as mentioned earlier helped to improve the compensation practices and to create a better working environment at Nike’s factories. The sound compensation practices positively affect employee performance, which in its turn impacts the company’s growth. Fair human resources practices contribute to the favorable image of the company and help to develop a positive reputation. Enterprises that managed to achieve high levels of performance tend to provide their employees financial incentives and stock options as part of their compensation packages (Vlachos, 2009). Thus, fair compensation practices positively impact the organization and its stakeholders. The Influence of Factors Local laws, labor unions, and market conditions are among the key factors that affect company’s compensation strategy. Labor associations and labor unions are the main advocacy groups that focus their efforts on supporting factory workers in the struggle for obtaining
COMPENSATION PRACTICES AT NIKE, INC. 6 higher wages and improving working conditions. Nike has been accused of unfair compensation practices since 1970 when it started working in such countries as South Korea, Taiwan, and China (Sage, 1999). However, when the economies of these countries developed, and labor unions gained more influence, Nike has found cheaper labor in countries like Vietnam, which laws prohibited labor unions.

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