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Nike Inc.’s Performance Measurement and Control Report

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Updated: Jul 8th, 2021

Performance Instruments

Performance Appraisal

Performance appraisal is one of the most common approaches to gauging employees’ contribution to organizational productivity. DeNisi and Murphy (2017) allege that the effective application of this assessment tool enables the business to align the ambitions of workers with its strategic goals. Nonetheless, for this method of performance measurement to succeed, employees should view it as a constant, reasonable, truthful, and productive shared conversation. Nike conducts regular reviews to determine the performance of its workers (Chen, 2018). This exercise is helpful in understanding the capabilities of its workforce, identifying the missing skills, and organizing training to equip employees with the requisite expertise. Performance appraisal acts as a motivating factor because it promotes career development. Nike has benefited from this instrument by reducing the costs attributed to employee turnover.

360 Degree Feedback

This instrument enables organizational leaders to gather information from employees, supervisors, managers, and clients regarding company performance. Karkoulian, Assaker, and Hallak (2016) contend that 360-degree feedback constitutes structured and semi-structured questions that the participants are supposed to answer. The individuals who take part in this form of performance appraisal are not required to reveal their names, thereby being free to share opinions without fear. Many managers value 360-degree feedback because it gathers accurate data. Nike uses this mode of performance evaluation to collect information from workers and supervisors. This company’s chief executive officer (Parker) encourages employees to share ideas regarding organizational performance (Blazek, 2016). He believes that all workers are capable of coming up with plans that could be helpful to Nike. Consequently, this company has devised mechanisms for gathering data from workers anonymously. The 360-degree feedback has been helpful in streamlining operations in this corporation and promoting cooperation between employees and their supervisors.

The Manufacturing Index

The call for environmental conservation has led to companies devising ways to occasionally evaluate their plants to ensure that they do not contribute to pollution. Nike is not exceptional, and this multinational corporation has come up with the manufacturing index, which is a tool that evaluates the sustainability performance of its industries. According to Distelhorst, Hainmueller, and Locke (2016), “This instrument, launched in 2012, ranks labor and environmental performance alongside more traditional supply chain measures of quality, cost, and on-time delivery” (p. 593). The manufacturing index evaluates the performance of more than 800 contract factories, at least one million employees, and over 500,000 diverse products, where each has a unique social and environmental footprint (Chen, 2018). It comprises multiple sustainability measures that assess the performance of individual factories based on a collection of issues, including greenhouse gas emissions, water, labor management, energy, health, and waste. Nike’s leadership believes that competitive pressure will assist it to boost the quality of its international supply chain. This index dictates what is “good” and matches endorsements and inducements to performance (Petro, 2016). It has been helpful in enabling Nike to attain its dream of running a green, lean, empowered, equitable, and sustainable supply chain.

Today, Nike faces challenges in the management of its contract factories that are located in Asian states. This company should invest in technology to enable it to streamline and improve performance in these industries. Nike requires procuring a system such as Trello that can allow it to form a cloud-based board to facilitate the management of the suppliers and factories that are located in different countries. The flexibility attributed to such a system would let Nike evaluate the performance of all its contract firms and vendors, as well as grow operations without difficulties.

Controls

Nike Company has put control measures to ensure that it manufactures products that meet the demands of different customers. This company emphasizes quality in product design and manufacture. As per Hemphill and White (2016), Nike has a department that is responsible for designing footwear and apparel. This division makes sure that the product blueprint corresponds to the company’s objectives and capabilities. Nike’s production team leverages total quality management (TQM) to guarantee that the final products meet customer expectations. Moreover, this company’s managers employ continuous improvement policies to enable it to attain its production goals.

Nike acknowledges the role of operations management in the realization of its strategic objectives. Distelhorst et al. (2016) argue that this company has an exceptional supply chain management culture that supports the efficient manufacture of apparel, sportswear, equipment, and accessories. Ali Mahdi, Abbas, Mazar, and Shaju (2015) argue, “Nike depends on supply chain automation and optimization of transport distance among suppliers, production facilities, distributors, and retailers to boost product and service delivery” (p. 169). This company has resourceful inventory management principles that allow it to supervise the shipment of merchandise from manufacturers to distributors and retailers. In addition, it has a scheduling method that synchronizes retail and distribution activities with the supply chain (Distelhorst et al., 2016). Nike has a pool of experienced personnel who helps in the design and production of sportswear, apparel, and sports equipment depending on market demand. This company has a mentorship program that helps to boost employee skills and capabilities. Nike values sustainability; hence it sources its raw materials from suppliers who are environmental-conscious. Moreover, this company has invested in technology to minimize operations costs and improve quality. Newcomb (2019) argues that Nike uses Flywire tech to improve the quality and strength of its footwear. The control measures that Nike utilizes are effective in enabling it to achieve its goals. This company has managed not only to realize sustainability but also overcome competition from firms like Adidas.

References

Ali Mahdi, H. A., Abbas, M., Mazar, T. I., & Shaju, G. (2015). A comparative analysis of strategies and business models of Nike, Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic and competitive environment. International Journal of Business Management and economic Research, 6(3), 167-177.

Blazek, K. (2016). Web.

Chen, C. (2018). Nike Aims to transform troubled workplace with new diversity initiatives. Web.

DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance management: 100 years of progress? Journal of Applied Psychology, 102(3), 421-433.

Distelhorst, G., Hainmueller, J., & Locke, R. M. (2016). Does lean improve labor standards? Management and social performance in the Nike supply chain. Management Science, 63(3), 587-900.

Hemphill, T. A., & White, G. O. (2016). The world economic forum and Nike: Emerging ‘shared responsibility’ and institutional control model for achieving a socially responsible global supply chain? Business and Human Rights Journal, 1(2), 307-313.

Karkoulian, S., Assaker, G., & Hallak, R. (2016). An empirical study of 360-degree feedback, organizational justice, and firm sustainability. Journal of Business Research, 69(5), 1862-1867.

Newcomb, T. (2019). Forbes. Web.

Petro, G. (2016). Forbes. Web.

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