Human Resource Management and Organisational Culture at Adidas Group
Adidas is a leading name in the sports shoe industry and while this industry has grown at a fast rate during the recent years, it is also known for intense competition. As a result, brands are investing in multiple areas to overcome the competitive pressure from marketing to HR and operations management. Adidas is eyeing faster growth in the near future. At least, it wants to sustain the growth rate that it achieved in 2017. However, it is the 21st century and your company is just as good as your employees are.
Brands are investing in their HR more than ever to gain a competitive advantage because skilled and professional employees can be a source of sustainable competitive advantage. It is why at Adidas the focus is on creating a culture of employee collaboration that puts employees’ growth and career management at the centre. Apart from programs for career development, it is focusing on creating an environment that successfully engages the employees and can retain them for longer.
Adidas has made several strategic changes to its business model during the recent years. However, to make these changes successful and have a long lasting impact the brand is focusing on creating a people centred culture that recognizes the value of employees and helps them achieve their career objectives. An organisation’s human resource capital has a major role in the growth of its bottom line and the success of its business strategy. How they perform affects the company’s bottom line and its future. This article highlights the most significant policies and processes and how Adidas has successfully used them to manage its HR capital.
Focus on talent management and employee engagement
Adidas believes that its people make a significant contribution to its productivity. Their performance has a significant impact on brand equity, consumer satisfaction and financial performance. The People Strategy it has formulated for better management of its human resources has four pillars – attraction and retention of right talent, role model leadership, diversity and inclusion and the creation of a unique corporate culture. However, its people strategy is also an integral part of its Corporate strategy termed Creating the New strategy.
In 2015, Adidas started a talent management programs that was termed Talent Carousel. The focus of this program is to groom the employees to ready them for senior management positions for future. Only 20 finalists make it to the final stage. The program encourages employees to be one of those 20 finalists who can start a new international and cross functional career by taking up a new role in a new location. The program is 24 months long during which the employees have the right to return home if they like.
The central on-boarding process at its headquarters in Germany ensures that the starters have a quality experience when they join the company. It also started a unique new method of induction whose focus is to engage the new joiners. Adidas launched an app that allows the company to engage with the new hires soon after they have signed an employment contract. If new hires are highly engaged from day one, it reduces the complexity during the initial stages. Adidas has a digital platform Learning Campus that allows its employees globally to access learning opportunities. This digital platform allows the employees to build the extra skills that they need for faster career development and growth. In 2017, the platform included additional functional learning opportunities.
Other methods of employee motivation
Adidas has implemented several more programs to motivate its employees as well. One of them is the employee stock purchase plan that was extended to Greater China, Taiwan and the Hong Kong in 2017. By end 2017, 45% of its entire employee population was eligible to take part in the program and around 3600 participated. In the near future, Adidas also plans to extend this plan to more countries. However, ADIDAS’ effort in various areas to empower its employees have not gone unrecognised. The top employer institute has awarded its offices at the Netherlands, Spain and China for providing their people with an exceptional work environment.
The institute recognised Adidas’ people strategy and its learning and development framework for its excellence and for promoting and encouraging employee mobility across the entire organization. A unique Kinder Garten program was started by Adidas at its headquarters in the nearby forest with 20 children. In October 2018, the brand plans to open its secondary care centre on campus with spots for 138 children. In this way, Adidas is implementing several beneficial programs that will provide its employees with a convenient and collaborative work environment.
Role Model Leadership
Role Model leadership is an important pillar of Adidas’ people strategy. In 2017, it also made significant progress in this area when two new leadership groups were created including the core leadership group and the extended leadership group. A third leadership group is also in the making at Adidas called the High potential Leadership group. The Core leadership group at adidas has created the first framework for global leadership in an effort to drive clarity and accountability.
At the core of this framework are three important components called collaboration, creativity and confidence. This framework was developed in partnership with the employees who were able to prove their feedback regarding it. A special training program for the HR managers called people manager training program is also implemented at Adidas across US, Asia, Europe, Middle East & Africa which is for the first time people managers that lead upto five people. This program teaches them the basic skills and knowledge required for being a good HR manager.
Gender Balance & A Creative Climate
There are several more initiatives undertaken by Adidas that are focused at bringing diverse perspectives onboard as well as creating climate of inclusion emanate to make a difference. For example the Big Deal Gender Intelligence training that it provided to its 387 executives within the course of an year. The focus of the program is to develop a gender inclusive company culture and includes a one day workshop that provides fundamental knowledge and skills in this area. The brand is investing in having a stronger female team onboard and using data and analytics to make better plans for creating a gender balance. Gender equity is also critical to having an inclusive climate and culture.
Another important facet of the brand’s HR strategy is its creative climate. In this regard the brand first focused on the ergonomics of the workspace. It is making new buildings for offices where the employees can choose from a multitude of workspaces to work at. Apart from that there are maker labs at its headquarters and in US where the employees can work on developing prototypes form their ideas using laser cutters and 3d printing tools. The root of the maker labs idea lies in the hacker space concept where the employees can create freely and give their ideas a form.
Tracking HR Progress
However, the list does not end here because Adidas has given its employees more facilities to make work more interesting, engaging and convenient. It also started a ‘People Overview’ app in 2017 that provides an online portal to the Adidas employees which they can use to access and manage their most important personal and work data like salary, career and team information or even their HR applications. The benefit is that by having access to the People One View the employees do not have go to their HR partner to manage their most important personal data. In 2017, Adidas added two new modules to the platform which is going to let its HR partners and senior leaders have access to important information and matrices. This also lets the HR people have sufficient time to collaborate with the line managers for better people management.
Apart from implementing these HR initiatives, the brand also measures the success of these initiatives using KPIs. Its new system platform for measuring employee engagement and satisfaction is called People Pulse. It allows for the monthly measurement of employee NPS which in turn allows to understand the level of job satisfaction of Adidas employees. Adidas won several awards in HR management from several agencies including Glassdoor. Apart from Glassdoor, its work in the area of HR has been recognised by Focus Best Employer rankings, as well as the Candidate Experience Award EMEA/APAC.
The brand uses a performance management approach called The Score which involves performance management and target setting. Performance appraisal of every employee is done at least once or in many cases twice an year. However, this is going to be replaced with anther platform called #MyBest that will allow for quality conversations between one manager and employees as well as regular feedback. Adidas spent its time in 2017 training the employees for the new platform as well as piloting the project.
Wages & Benefits:
In terms of wages and benefits too, the brand offers its employees competitive salaries and other rewards. Remuneration in the company consists of fixed and variable financial compensation as well as non financial compensations and other intangible benefits. Its Global Salary Management System, is the basis for establishing and evaluating the value of employees’ positions and salaries in a market-driven and performance-oriented way. The various variable compensation and benefits programs Adidas offers include :
— Bonus program – Short Term Incentive (STI) program
— Profit participation program – ‘Champions Bonus’ (Germany) — Long-Term Incentive (LTI) Plan for leaders and Executive
— 401-K Retirement Plan (USA) and adidas Pension Plan
— adidas Stock Purchase Plan. (Source: Adidas Annual report 2017)
The brand is continuously improving its renumeration program and therefore has continued to invest in a number of projects and initiatives which on the one hand will increase the significance of its renumeration programs and on the other will ensure that Adidas is paying the right person the right salary. To minimise salary differences the brand also started a new salary adjustment approach that is applied in US and Germany in 2017. The approach is designed to minimise salary differences among people working at the same level and to bring pay equity. In 2017, the brand rolled out a new long term incentive program for the senior management.
Development & Training
The brand has adopted some specific talent management tools that help identify potential future leaders from around the organisation. In order to ready them for complex leadership roles the brand has used several targeted developed programs as well as individualised development plans. Adidas uses apprenticeships and internships to complement its training and development programs. Through two to three years rotation programs, these apprenticeship programs allow the fresh out of college students to have a chance to gain business experience.
These programs include vocational training in retail, shoe technology and IT, as well as integrated study programs in fields like digital commerce, finance or international business. Apart from it Adidas has implemented FTP, the Functional training Program an 18 month program which offers graduates with excellent performance an opportunity to start a functional career at Adidas. Under this program they are offered to work on six there month assignments in various assignments. Adidas also has succession management plan that regularly reviews to ensure that individual development plans are in place to ready the successors for their next steps.
Internal Communications and Work life Integration:
An efficient internal communication system is important for employee engagement as well as to create a learning environment. The brand uses an enterprise collaboration system called ‘A Live’. The platform encourages employees to share knowledge, collaborate in other manners and to discuss current topics with others. ‘A Live’ is also the means to offer the employees access to the Learning campus. Employees can aces learning material 24/7 in a virtual environment. 23,113 of its employees accessed the learning campus in 2017. Apart from that to initiate direct discussions between the employees and the senior leaders, the brand established an Ask the Management Platform on its internet which enables the employees to ask questions directly of the senior management.
The brand has also focused on the personal needs of the employees so that they can have a harmonious work life and lead more balanced lives. The work life integration initiatives started by Adidas include flexible work time and place, people development and leadership competence related to work-life integration, as well as family-oriented services. Apart from these things the brand has also provided its employees with flexible working opportunities like teleworking, sabbaticals as well as parent child offices. At its headquarters it has a day care centre and a series of day care services are provided at its Amsterdam offices. There are dedicated programs to help people plan parental leave as well.
Diversity and Inclusion:
Other important components of its HR strategy are diversity and inclusion. The brand believes that having a diverse workforce and people with diverse backgrounds and perspectives is essential to having an efficient workforce. This is also critical to catering to the demand of a diverse consumer base in various parts of the world. Hereford, Adidas allows no discrimination on the basis of gender, nationality, ethnic origin, religion, world view, disability, age, sexual orientation or identity. Employees from more than hundred nations are working at its headquarters currently. To encourage diversity, inclusion and equity throughout the organisation, the brand has regular events like its Global Diversity day. It has created certain groups to strengthen diversity at its workplace as well as supports the International LGBTQ community.
In this way, the brand has managed an overall great HR strategy whose focus is to make people more productivity and create higher job satisfaction. there are several facets of its HR strategy that are worth knowing and following. work life flexibility is important for employees so that they can work stress free. Moreover, it is important to pay them competitive salaries and reward them with financial and non-financial benefits to keep them satisfied.
Another important factor is to recognise their contribution and to let them participate. Adidas has made all these things possible and uses advanced technologies for learning and communication channels. To have an efficient HR you must be able to engage your people and Adidas has one it in an excellent manner. the need for high employee motivation is well known in today’s world and therefore brands like Adidas are doing their best to keep their employees motivated and satisfied. It is working on establishing a culture at whose core are the people.
- Adidas Annual Report 2017