Nike Inc. (NKE) is set to hike wages for 7,000 employees and adjust how it awards annual bonuses as part of a company-wide effort to promote greater equality in the workplace.
The sportswear manufacturer opted to overhaul its previous compensation policies after completing a reviewing of its pay practices earlier this year, The Wall Street Journal reported. Based on its findings, Nike decided to raise salaries for about 10% of its workforce and introduce a new bonus plan that factors in company-wide performance, rather than team and individual performances.
According to an internal memo seen by the newspaper, the retailer is confident that the changes will result in equal and competitive compensation for the same job functions around the world. "With movement of internal talent, and the demands of a dynamic market, we analyze pay each year,” the memo said. “This year, we have conducted a deeper analysis of all roles, at all levels globally.”
Nike added that its new program has been designed to "support a culture in which employees feel included and empowered." The new salaries are due to implemented August 1, while the revamped bonuses are set to be introduced in fiscal year 2019.
Nike’s compensation changes came after the company was criticized for allegedly discriminating against its female employees. In April, The New York Times reported that several executives resigned following multiple complaints of sexual harassment and gender discrimination.
These revelations also saw the Beaverton, Oregon-based company get called out amid the #MeToo movement, a social media campaign against sexual assault. In May, Nike’s CEO Mark Parker responded to this unfavorable publicity by apologizing to employees who had fallen victim to a toxic corporate culture.
Parker told the Journal that Nike is now taking swift action against the “boys-club” culture festering within parts of the company. "When we discover issues, we take action. We are laser-focused on making Nike a more inclusive culture and accelerating diverse representation within our leadership teams," Parker said to the newspaper.
Amid the controversy, Nike has been attempting to capitalize on the athleisure trend among female shoppers. According to CNBC, the company has yet to experience a dip in sales, despite facing allegations that it treats female staff unfairly. (See also: Why Nike Shares Can Rise 35%.)
Elizabeth Tippett, an associate professor at the University of Oregon School of Law and expert on employment law and discrimination, told CNN Money that the pay raise decision was a smart move from Nike. "Sometimes companies are afraid to make a change. Nike was not afraid, and I think that's really commendable," she said.