Nike Shoots for Pay Equity with Changes to Reward Program

Adjustments to total rewards program reflects ‘commitment to competitive pay’

Kathy Gurchiek By Kathy Gurchiek July 27, 2018
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Months after an anonymous survey revealed female employees at Nike had experienced gender discrimination and sexual harassment, the Beaverton, Ore.-based company is changing its total rewards program. The move includes a pay bump for 7,000 of its global employees and reflects what the company calls a commitment to competitive pay among men, women and minorities at the global athletic brand.

The raise affects 7,000 employees—about 10 percent of its 74,000 employees.

The news, announced Monday, comes two months after CEO Mark Parker pledged that Nike would make changes to its compensation and management training programs, The New York Times reported. In March, a survey compiled by female employees revealed women there had experienced gender discrimination as well as sexual harassment. Parker received a report from the survey findings.

Ilana Finley, Nike's senior director of North America communications, told SHRM Online that through the company's total rewards program, Nike will "strive to meet the diverse needs of our employees, deliver differentiated, competitive pay and benefits, and support a culture in which employees feel included and empowered."

Finley said Nike made the following changes to its pay and rewards:

  • Competitive pay adjustments. Finley said Nike conducts an annual pay analysis. This year it conducted a deeper analysis of all roles, at all levels globally. 
"As a result, we are making adjustments to some employee pay," she said. About 10 percent of its population—across all levels, geographies, functions and brands—will receive an adjustment. Pay adjustments will be made in August, and pay will be annualized over the fiscal year, which began June 1 and runs through May 31, 2019, Finley said.

The company defines pay equity as equal compensation for men, women and people of all races and ethnicities who perform the same work at the same level, experience and performance.

Based on fiscal year 2017 data shown on its website, Nike says female employees around the world earned 99.9 cents for every $1 earned by its male employees. In the U.S., nonwhite employees earned $1 for every $1 earned by white employees.

"We will maintain focus, driving with 1:1 as our goal for both every year," Nike says on its website. "We will monitor this data on an ongoing basis."

"Going forward, one PSP will measure success based primarily on companywide performance," Finley said. Previously, bonus payouts were determined by a combination of company, team and individual performance.

Pay Equity 

The issue of pay equity has garnered headlines around the world in recent years. The wage gap is predominantly caused by fewer women than men in higher-paying roles and higher-paying industries, SHRM Online reported in April.

Nike's top HR executive, Monique Matheson, reportedly told staff in a memo earlier this year that the company needed to do a better job of promoting women and minorities, including eliminating the collection of salary histories.

[SHRM members-only toolkit: Managing Pay Equity]

States continue to pass equal-pay legislation, and some have banned asking salary-history questions of job applicants in an effort to curb wage inequity. The 9th U.S. Circuit Court of Appeals ruled in April that a job applicant's prior salary can't be used to justify wage differences between male and female employees.

Employers may want to review their standard employment applications to make sure they are compliant with each jurisdiction's laws, said Michael C. Harrington, an attorney with the LeclairRyan law firm in Hartford, Conn. In a news release, he suggested employers review their compensation structures to determine whether employees who perform comparable work are equally compensated as required by state and federal law.

Home solar company Sunrun in San Francisco, which announced Tuesday it has achieved 100 percent pay parity, has taken the following actions to provide equal opportunities to its 3,500 employees:

  • Committed to the White House Equal Pay Pledge and completed a comprehensive annual review of compensation practices across all roles in all locations. Nike also signed that pledge. 
  • Stopped asking candidates nationwide for salary history, more than a year before California legislation was enacted.
  • Provides equal parental leave for male and female employees.
  • Ensures gender diversity at its executive and board levels. Women make up 50 percent of its senior leadership team and about 40 percent of its board of directors.  
Pay equity is not an issue limited to gender. Cybersecurity professionals of color, for example, earn less than their white counterparts, a recent report said. A male cybersecurity professional of color earns an average salary of $121,000—the same as white females—while white males earn, on average, $124,000. Women of color working in cybersecurity earn $115,000.

The Society for Human Resource Management (SHRM) supports equal pay for equal work and believes that any improper pay disparities should be promptly addressed, according to SHRM's 2018 Guide to Public Policy Issues

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