Running Header: SPORTS DIRECT 5 Sports Direct UAGC MGT490: Strategic HR Planning

Running Header: SPORTS DIRECT 5

Sports Direct

UAGC

MGT490: Strategic HR Planning

19 July 2021

MGT490: Strategic HR Planning: Sports Direct

Employee motivation is crucial within an organization because it inspires employees to work and fulfill their mission and goals. Motivated workers are excited about their jobs and driven to carry out their responsibilities to the best of their ability, which results in high productivity, success, and increased profits. Therefore, organizations with demotivated employees experience low productivity and high turnover rates. Some companies, such as Sports Direct, have been associated with failing to recognize their employees’ interests resulting in their demotivation that affects their productivity. The report presents an overview of Sports Direct, the issue of paying workers below the minimum wage, how the problem affects the company’s future viability, the role of human resources in an organization, and the critical advice they would offer Sports Direct to address the issue.

Sports Direct Overview

Mike Ashley founded Sports Direct in 1982 as a single store. Currently, the company is the largest sporting goods retailer by revenue in the United Kingdom. It offers sportswear, accessories, and clothing from the biggest brands, including Adidas, Under Amour, and Puma. The company has stores and operates online across over twenty countries. Sports Direct has a net income of £101.0 million and employs over 20,000 workers in its different stores (Sports Direct.com, n.d.). The firm’s culture is associated with valuing its workers, customers, shareholders, and brand partners while striving to apply good practices in its corporate transactions.

Sports Direct Issue

Sports Direct has been exposed for paying its workers below the minimum wage. According to Goodley (2020), workers cannot leave the building during their 30-minute unpaid breaks, which according to the law, should be counted as paid working time. The problem was discovered lately despite the firm’s exposure in 2016 for breaching the minimum wage law that resulted in the workers being paid £1m in back pay while Sports Direct promised to review and improve its working practices. The firm continues to deny its workers payment during their breaks where they are supposed to remain within its premises.

Effects of the Issue

Paying workers below the minimum wage affects Sports Direct reputation adversely while demotivating the employees, leading to reduced productivity in the future. Sports Direct faced negative criticism and experienced reduced business in 2016 when it was found to have been underpaying its employees (Goodley, 2020). Apart from that, workers’ payments are viewed as compensation for their efforts and motivate the employees to continue working hard while meeting a company’s goals. Nevertheless, underpayment demotivates employees resulting in low productivity and high turnover rates.

The Role of Human Resource in an Organization

Human resource (HR) is the term used to describe the formal department tasked with managing people within companies, specifically the employees. The key responsibilities of the HR department are the recruitment of workers, organization of workforce, measuring and appraising work performance, implementation of employee reward systems, employee training, and solving employee-related issues (Obedgiu, 2017). Their key responsibility entails dealing with the workers within the firm.

Advice for Sports Direct

The HR at Sports Direct can play a critical role in advising on providing adequate pay to the company’s employees. The HR management should inform the company’s top management to provide sufficient pay for the workers, facilitating positive reviews and motivating employees to work hard. Further, HR should implement reward systems, such as bonuses, prizes, and promotions, encouraging workers to reach and surpass performance goals. The goal of HR should be to ensure that the company recognizes and fulfills its workers’ needs.

In conclusion, Sports Direct has been in the spotlight since 2016 for paying its workers below the minimum wage. Underpayment of its employees has had adverse impacts on the company’s reputation and the workers’ motivation to work, affecting business productivity. The company’s HR management must advise the top managers about providing adequate pay to the employees while introducing new incentives to reward the workers for their efforts. Employees play a critical role in a company’s success, emphasizing the need for their compensation while ensuring that they are working in a comfortable environment where their needs are met.

References

Goodley, S. (2020). Sports Direct may be paying less than minimum wage, investigation shows. The Guardian. https://www.theguardian.com/business/2020/jul/23/sports-direct-undercover-minimum-wage-mike-ashley

Obedgiu, V. (2017). Human resource management, historical perspectives, evolution and professional development. Journal of Management Development, 36(8), 986–990.

Sports Direct.com. (n.d.). https://www.sportsdirectplc.com/