INTRODUCTION

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INTRODUCTION

Adidas is a multinational firm which was founded in 1948. The firs specialized in
designing and manufacturing of sports clothing and accessories. The company is base in
Herzogenaurach, Bavaria, Germany.Adidas AG group consist of the Reebok sportswear
company, TaylorMade-Adidas golf company (including Ashworth), Rockport, and 9.1%
of FC Bayern Munich. The company also produces bags, shirts, watches, eyewear, and
other sports- and clothing-related goods. It is considered Number one manufacturer of
sportswear in both Germany and Europe. The company was founded by Adolf Dessler
who used the his nickname Adi and the first initials of his last name . Adidas’ revenue for
the year of 2012 is €14.48 billion.

COMPANY PROFILE

Adidas, in full Adidas AG, German manufacturer of athletic shoes and apparel and

sporting goods. In the early 21st century it was the largest sportswear manufacturer in
Europe and the second largest (after Nike) in the world. Adidas products are
traditionally marked with a three-stripe trademark, which remains an element in the
company’s newer “trefoil” and “mountain” logos. Headquarters are in
Herzogenaurach, Germany.

Established in post-war Germany in 1949 (in its current form) by Adolf Dassler, the
adidas Group has been synonymous with sports and sportswear for the last 60 years.
The company has been part of many significant sporting moments, including but not
restricted to the 1954 and 1974 German victories in the football World Cup, the
recently in news Boston and Vancouver Marathons, and all World Cup and Euro Cup
footballs since 1970.

The phenomenal growth of the company has been primarily off the back of clever
sponsorships of key athletes and teams, and also through the design of innovative new
technologies. For example, adidas was the first footwear brand to develop football boots
with removable studs in the 1954 World Cup, and more recently in 2005, the design of
the first shoe with an in-built microprocessor that can adjust itself as per the runner’s
needs. Alongside this, their revenues have been growing roughly at 11% year-on-year

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with the latest financial reports of 2012 showing Revenues of €14.9 billion and Net
Income of €526 million.

Adidas Group counts amongst its brands the flagship “adidas marque”, “adidas
Originals” and “TaylorMade-Adidas” (golf range), amongst many others. In 2005,
adidas acquired Reebok for $3.8 billion, thus bringing it closer to its largest rival Nike in
terms of Sales, and making it the number two athletic shoemaker in the world. Apart
from Nike, other competitors for adidas include Puma, Deckers, Crocs and Callaway
Golf (competing with adidas’ golf range – TaylorMade).

The operating environment of adidas is the sportswear and fashion industry, which has
seen outstanding growth since the economic recession. Worth less than $200 billion in
2008, it is projected to grow to $300 billion in 2017. This growth provides tremendous
opportunities for sportswear firms, both large and small, to expand and establish their
business in this arena. Most of the growth in this segment is provided for by the United
States, Brazil, China and Russia, who together account for 60% of the total growth.
However, challenges for the industry still remain in the form of market saturation in
developing countries and the subdued economic environment.

In the following report, they analyze the corporate structure of adidas AG, and
look at the firm’s Capital Structure, Dividend Policy and the Firm Valuation. They
use their analysis to determine the stock value of the firm and they compare that to the
actual price at which the stock is trading.

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Mission:

Mission is to be the best sports in the world by offering the best products and services.
Adidas also aim to a socially and environmentally responsible that embraces creativity
and diversity and reward its employees and shareholders.

Vision:

To be the leader in all areas of the sports industry.

1. To contribute in the development of sports goods and services

2. Be the one who teams, association , athletes, and customer want to be

associated with.Set the standards in the sports industry.

3. To consistently deliver outstanding financial results.

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Adidas Group Values

Performance

Sport is the foundation for all adidas do and executional excellence is a core value of
their Group.

Passion

Passion is at the heart of their company. They are continuously moving forward,
innovating, and improving.

Integrity

They are honest, open, ethical, and fair. People trust them to adhere to their word.

Diversity

Adidas know it takes people with different ideas, strengths, interests, and cultural
backgrounds to make their company succeed. They encourage healthy debate and
differences of opinion.

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Adidas general approach

The ambition of the adidas Group is to be a sustainable company.

SUSTAINABILITY PROGRAMME

Being a sustainable business is about striking the balance between shareholder

expectations and the needs and concerns of their employees, the workers in their supply
chain and the environment. Adidas truly believe that acting as a responsible business in
society is not only an ethical obligation, but will also contribute to lasting economic
success.

Adidas have been working towards sustainability for many years and recognize that the
task ahead of them is a marathon, not a sprint. It is about preparedness and setting the
right pace, having both the drive and stamina to make the distance. And most of all, it is
about endurance: overcoming setbacks and difficulties, keeping the finishing line always
in the forefront of their minds.

SUSTAINABILITY STATEMENT

Adidas commitment to manage their business in a responsible way is rooted in the

Group’s values and principles. Their understanding of becoming a sustainable
company is outlined in the adidas Group Sustainability Statement:

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Adidas AG history

 Adidas AG is engaged in the production and manufacture of sportswear and sports

equipment. Its brands include adidas, Reebok, and TaylorMade-adidas Golf. The company
was founded by Adolf Dassler in 1920 and is headquartered in Herzogenaurach, Germany.“

“Adidas History

We started in a wash room and conquered the world. And in-between, we have scored big
and also, sometimes, struggled to reach our goals. We have done our best for the best. We
have improved and grown. Looking ahead to the future, always remembering where we
came from. This is our story.

WELCOME TO THE NEW WORLD – A NEW DIGITAL FOCUS

As the world changes, so do we. While a computer in your shoe seemed a bit weird in the
‘80s, it now is a professional training system: miCoachallows athletes to track, record and
improve their performance in sports, including football, running or basketball. It becomes a
category of its own. On top, adidas launches a new sub-brand: adidas NEO targets the young
generation with social tools such as a social mirror and the opportunity to, literally, shop at
the window with the touch of a button. And the 2012 London Olympic Games become a
happening on the adidas social channels, bringing behind-the-scenes events, competitions
and athlete news to the young consumer.

We do not know what the future in sports will bring but it will not stop us from shaping it.
We will keep pushing the envelope with continuous innovations. And more importantly: we
will make sure that we give you the tools you need to be the best athlete possible. Just how
Adi wanted it.”

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COMPANY LOGO’S

An Intriguing History

The Three Stripes

the evolution of Adidas logo and its popularity as imagery has an interesting history. Adi
Dassler had a unique idea in mind. He thought about a logo design that could give its brand
a unique look so that it retains longer in the memory of the people. He then came up with
those iconic three stripes. In 1967, the first official logo looked like this:

The three stripes went well with the masses and complemented the slogan of the

company: “The Brand with the 3 Stripes.” Even Adi Dassler would not have known then
that the three stripes would gain such massive recognition.

The Trefoil

it was not until 1972 that the Adi Dassler designed another and the most iconic one of the
Adidas logos: The Trefoil. As the company spread its business in apparel and leisure
industry, Adi Dassler realized the need for a more apt logo design that

could demonstrate industrial diversity of his company. Adi Dassler did some creativity with
the overall design and transformed the original “three-striped” logo into the “trefoil”. The
idea made sense to the diversity of the brand and the new logo became an instant hit with
the masses.

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INTRODUCTION
TO
TOPIC

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EMPLOYEE COMPENSATION ON ADIDAS

Compensation forms an important aspect in strategic human resource management. An

effective compensation strategy helps in boosting the motivation of employees and hence,
enhances organizational productivity. It impacts an employer’s ability to attract and retain
high performing employees and ensures optimal levels of employee performance in meeting
the organization’s strategic objectives.

There are two components of compensation. These are direct compensation and indirect
compensation. The former consists of financial benefits and the latter consists of non-
financial benefits or perks. Today organizations are adopting more strategic approaches to
compensation i.e. paying the person for individual worth (knowledge, skills and
competencies) rather than for the value of job he or she performs, rewarding excellence
though pay for performance compensation that establishes a clear relationship between a
significant amount of pay and attainment of organizational objectives and individualizing
the pay system to give the employees choices in how they are rewarded and what reward
they receive.

Compensation & benefits as a tool to attract talent: Talented people are the key resources for
any organization in any sector. Given the upswing in the economy, the plethora of career
alternatives and employment opportunities, attracting the right talent has emerged as one of
the big challenges for HR managers of today.

According to the Gallup – Business world Compensation & Benefits Study 2006, most
organizations (46% in the comparator group) believe in paying competitively and stressing
on high rewards for good performance. Another large section (37%) said they believe in
paying competitively and stress on career growth opportunities. Career Growth & Learning
opportunities, job content, compensation and benefits have been the critical drivers of talent
retention across the various organizations.

Compensation & benefits as a tool to drive performance and build workforce capability: An
emerging challenge being faced by HR Leaders has been to adequately equip and enable the
workforce to improve performance, especially in view of increased competition in the
marketplace. Companies like Ranbaxy are investing heavily to upgrade skills of its
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workforce and are even offering incentives and career breaks to acquire higher qualification.
Capability managers are currently focusing on talent fit and job content to build workforce.
Compensation is also the most important determinant of job satisfaction for most of the
employees.

Compensation & Benefits as a tool to arrest attrition:

It is not enough to attract the right talent, it is equally important to retain it. Career growths
opportunities are the primary reason followed by the lure of better compensation that make
the employees leave their organization.

While for the junior level management and the entry levels, compensation and learning
opportunities play an important role, for senior management job content is very critical
followed by compensation.

Thus given the importance of compensation, preferred employers are following

compensation benchmarking to identify pay-scales across the industry and to and to learn
the latest and upcoming trends in compensation & benefits to frame a relative percentile
guide for the organization.

Another trend observed is rise in the popularity of eSOPs, which is a defined contribution
employee benefit plan that allows employees, to become owners of stock in the company
they work for, thereby reducing the tax liability of the company and providing a cost-
effective plan to motivate employees.

BEST HR PRACTICES

The Best Employers in India 2007 study, conducted by Hewitt Associates and Great Place to
Work Study 2006 study conducted by Grow Talent provide a definitive benchmark against
which one can measure how effective an organization is in providing a workplace that
engages the intellectual and emotional commitment of its employees. The key parameters on
the basis of which the best HR practices can be categorized and the trends observed for each
of these are:

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 RECRUITMENT, HIRING & INDUCTION: Modern management thought focuses
attention on “people” as the key to successful deployment of resources to meet
organizational goals and realize strategies. The Recruitment and Selection process promotes
successful hiring decisions that can truly impact the success of a department or faculty. This
constitutes initiating the Recruitment Process through advertising, screening applicants,
selecting the Interview Panel, conducting the Interview Plan i.e. Interview Scheduling and
the Interview Environment, making the Selection Decision (Candidate Evaluation,
Reference Checking) and making the offer.

Research has consistently shown a high degree of correlation between being a preferred
employer and superior financial results. Being a preferred employer involves the following
key criteria:

• POSITIONING THE EMPLOYER BRAND

The employer brand is an image of the organization that employees and prospective
employees have. It includes perceptions of functional benefits, economic value and
psychological attributes associated with the employment experience. It is a critical factor
which determines the decision to apply or stay with the organization. Also, it would be
ligned to the corporate brand promise to customers (As per a Hewitt Study, there is a strong
linkage between employee satisfaction and customer satisfaction).

• SOURCES OF TALENT

The Best employers practice the philosophy of hiring for a career as opposed to hiring for a
job. They deploy employee referral, internal job posting, internal recruitment team, external
consultant, job fair, job sites, and Company internet site as the common methods of
recruitment for different levels of management. At the Senior Management level, head-
hunters, referrals and internal applications are the primary sources of talent. At the Middle
Management level, internal applications, referrals and head-hunters are primary sources
supplemented by applications solicited in advertised positions. At the Junior Management
levels, all methods except job fairs are widely used by most of the preferred Employers.

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• MAKING THE SELECTION DECISION

According to the Hewitt Best Employers Survey, the Best Employers lay much greater
emphasis on the “softer” attributes such as fit with culture & organization values and
competencies as compared to the other employers which is in line with the recruitment
policy to hire for career

General criteria used by the Top 25 Employers (Hewitt Survey & GPTW Study) to make the
Selection Decision Figure 2.1, Source: The Hewitt Best Employers in India 2007 study &
GPTW study, 2006

These criteria are assessed through a multi-step process consisting of multiple rounds of
interview with HR, potential supervisor, skip-level supervisor, senior management and a
probationary period.

MEASURING EFFECTIVENESS

Preferred employers in addition to monitoring how many openings were filled and in what
time period, they also use process quality metrics like rate of wrong fits and performance of
new joiners. This helps them tune the process, align it with the market & business
requirements and drive employee engagement.

INDUCTION/ ORIENTATION PROCESS

A key characteristic of effective employers as per the GPTW Study, 2006 is the emphasis
laid on ensuring that a new joiner is completely on-board. Not only do they focus on the
content of the orientation program, but also on how it is delivered and then followed
through. They use the orientation program to communicate expectations forwards to the
employee and backwards to the organization.

Learning & Development, Career Progression: Provision of a learning environment with

systematic developmental inputs in order to grow the depth and quality of the talent pipeline
at all levels and ensuring a higher return in each role is very important for an effective
employer. Training is now treated as an investment rather than a cost. Research by Mercer
Human Resource Consulting has shown that “Career & Opportunity” is the single most

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important driver of employee engagement in Asia. It suggests that people are more likely to
pursue alternative employment opportunities for career development than financial reward.

A key point is the use of opportunities within the organization to the mutual advantage of
the employee and organization, thus stretching the long-term benefit of each rupee spent on
training. Also another key point is the use of self-learning tools like career counseling tools,
company library facilities, tuition reimbursements and sabbaticals. This reflects the
preferred employer’s commitment to their strong belief that development is the joint
responsibility of the employee as well as the organization

DEVELOPMENT & LEARNING PRACTICES:

Hewitt’s Best Employers invest 82 hours of training in their employees and roughly 0.25-
3% of gross revenue. All Best Employers use multiple sources of development – external,
in-house and computer based self-paced learning.

Upcoming Trends in Learning & Development

 Team Concept: The team concept is useful as a low-cost alternative to formal cross-
functional training programs and helps employees become familiar with broader
aspects of the organization.

It helps to build general management skills, teamwork and can be leveraged to effectively
solve organizational problems through internal consultants.

Also, according to the GPTW Report, effective employers use autonomous workgroups
where a team of employees works together with minimal oversight by a superior, to produce
results for the company.

 New Recruit Training: Newly recruited employees not only undergo an orientation
program, but are also provided with job-related and behavioral skills training to
begin contributing confidently and productively in the job assigned.
 Employee Suggestion schemes: Employee suggestion schemes, where implemented,
build engagement through the driver influence. Not only are they a source of upward

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 feedback from the trenches or lower levels, but develop employees as corporate
citizens.
 Tuition Reimbursements: All Best employers as per the Hewitt Report provide
Tuition Reimbursement programs to its employees. Most of the effective employers also
offer paid and unpaid sabbaticals to its employees. While paid sabbaticals are typically
offered to enhance effectiveness of employees in their current or futurroles, unpaid
sabbaticals are used as rewards for long serving employees with often no requirements
beyond employment.

MEASURING EFFECTIVENESS

The most popular methods of measuring effectiveness of the level of learning &
development in an organization remain periodic user feedback and post-training
performance management data (as a measure of transfer of training).

 Talent Management: As per the GPTW report, the selected best employers also have
in place focused programs to develop those employees with higher potential for
contribution. These individuals are the future leaders of the organization and exist at
all levels. Thus, a high potential program must be supported by a strong performance
management framework that not only differentiates between high and low
performers but also, is able to give a fair assessment of the employee’s potential.
 Work Environment: Best Employers have transparent and employee centered work
environments that contribute towards building a total rewards experience for their
workforce.

Best Employers design their strategy, programs and practices to reflect a people-friendly
employer-employee relationship with the belief of communicating everything which
includes sharing of product or service information and information on the branding of the
organization in the marketplace with management and employees.

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DOWNWARD COMMUNICATION

Senior management groups are the single most frequent source of communication for
employees regarding the organizational philosophy, objectives and related business
initiatives. Hundred per cent of the companies selected in the Hewitt’s Best Employers &
Grow Talent GPTW had a formal communication strategy. Employee satisfaction results are
the most frequently communicated pieces of information including business goals and
objectives, company operating results and customer information on an annual basis among
both management and employees. According to research there has been a shift from a
traditional communication philosophy to a transformational communication philosophy over
the years as preferred employers and many other organizations have increasingly started
believing today that the more employees know the more they can act independently and
contribute towards organizational success.

• Channels of Downward Communication

Downward channels of communication are widely used at the Best Employers as per the
Hewitt Survey. Employers selected by GPTW Study not only communicate, but ensure that
the message reaches.

Most frequent source used for communicating sharing various types of information with
employees.

• Upward Communication

Communication at Best Employers is a continuous two way process between the

management and employees and various mediums are used to solicit employee opinions and
suggestions surrounding organizational issues.

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GRIEVANCE RESOLUTION

Preferred employers today aim at creating a positive and employee oriented work
environment to enhance productivity and engagement levels. However, they do understand
that there may be individual employee concerns and suggestions to improve existing
systems and processes. Therefore, they establish channels or processes through which
employees can appeal or complain if they feel unfairly treated.

EMPLOYEE PORTALS

Preferred employers as per the GPTW Study are strong advocates of “self-management” and
provide employees with the technology and resources that they need to make decisions
effectively as well as the tools to implement those decisions. The use of automated
employee portals helps in streamlining processes and enables key Human Resource
functions such as Performance management, Compensation and Payroll Administration

FUN AT WORK

In order to inculcate the element of “fun” at the workplace, organizations should recognize
employee achievements and special days e.g. birthdays, completion of a number of years of
service etc. These celebrations also extend to the employees spouse, children and family at a
majority of Best Employers of Hewitt.

QUALITY OF WORK LIFE

Hewitt’s selected best employers clearly raise the threshold when it comes to creating an
employee-friendly environment. Apart from good communication practices and systems, a
majority of them have formal policies or operational measures over and above legal
requirements in the areas of social responsibility, health and safety at the workplace,
protection of privacy and data management systems and promotion of anti-discriminatory
practices.

Policies adopted by Hewitt’s Best Employers to improve the quality of Work Life

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Managing Cultural Change

Organizations experience turbulence during various stages of their evolution and growth in
the form of Mergers & Acquisitions, Restructuring of organizations etc. This affects various
aspects like structure of the organization, locus of power, emotions of employees, employee
compensation & benefits, HR policies and procedures, leadership, employee communication
etc. Preferred employers follow two clear strategies:

• Communicate : Top management teams and HR personnel constantly keep employees

apprised of what is going on in the organization so that they know what to expect. The aim
is to eliminate the fear of the unknown (layoff situation), ensure transparency and to keep
the transformation progressive.

• Compensate for losses: Best Employers provide packages such as severance pay, medical
benefits etc. and assistance to displaced employees and assistance in the form of
outplacement services and training help them cope with the loss in income and the changed
organizational environment.

COMPENSATION STRUCTURE

The composition of salary structure which includes cash (basic salary, HRA, LTA, fixed &
variable bonus), benefits (PF, gratuity, superannuation etc.), perquisites (Company car,
Housing Loan, Fuel reimbursement etc.) helps in boosting the motivation of employees and
hence, enhances organizational productivity. The compensation structure for all the three
levels i.e. Top, Middle and Lower management is a key driver of employee engagement.

As per the Hewitt Best Employers Survey, in case of the preferred employers, the merit pay
increases sharply differentiating between high and average performers and variable pay
increases are determined on the basis of corporate, unit, team, and individual performance at
all levels for these organizations. They mainly focus on evaluation of performance targets,
which are high at all organizational levels. The focus on competencies increases by level and

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that on role responsibilities reduces with increase in organizational level and these
organizations also lay a great emphasis on soft skills.

The employees’ perceptions of the appropriateness of their pay, relative to their performance
and contributions, of the adequacy of the company’s benefits plan, including value and ease
of use and of the acknowledgement and favorable notices they receive from others for their
contributions and accomplishments in their work are the key employee engagement
benchmarks.

In recent years, the necessity for organizations to control labor costs, while simultaneously
increasing productivity and enhancing quality and customer service, has never been more
urgent.

Thus, the present competitive environment requires new strategies toward employee
compensation. Careful attention must be placed on the development of reward systems that
reflect the financial capability of the company, generate a highly committed and motivated
work force as well as reinforce the new directions associated with contemporary
organizational strategies.

Thus, a market rate analysis of existing structures and differentials of the senior and junior
employees is an integral part of determining the salary structures of the effective employers
as per the GPTW survey.

RETENTION

This is the age of knowledge workers and people are the best assets that any organization
can have. The corporate are grappling with the problem of high retention rate and the
general exodus of their best talents to the bigger companies and better opportunities. Even
with the prevailing high rate of unemployment in the country retaining good and right
people is no mean task, as employers struggle with decreasing pool of talent and increasing
business needs.

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Employee turnover refers to changes in composition of workforce that result from release,
dismissals and replacement of employees. Usually, we think of turnover from an
organizational perspective that is individuals leaving an organization. However, from the
perspective of the people who use services, retention occurs more frequently not only when
a service provider leaves the organization, but also when she/he gets transferred or
promoted. As far as the client is concerned, whenever there is a change in who provides
support, there is retention.

Some people work for money, others work for love and personal fulfillment. Still others like
to accomplish goals; they may have personal missions to attain through meaningful work.
Others truly love what they do or the clients they serve infect they may like interaction with
customers and co-workers. Any gap in the fulfillment of these could be potential causes for
retention.

Area economic conditions, as well as other factors such as labor market conditions, affect
general rates. These more general causes for involuntary turnover are difficult to directly
manage. However there are certain causes for voluntary turnover that are associated with
any specific job in a given organization (e.g. Non-competitive) compensation, high stress,
unpleasant physical or interpersonal working conditions, monotony, and poor direct
supervision) that can be managed.

The hospitality industry being a service oriented industry runs on the efficiency of the
employees, unfortunately the Retention rate is high which has a great impact on cost as well
as effectiveness of these organizations.

Employee retention is now a very crucial issue, because in the 21st century, the only
sustainable source of competitive advantage for any organization / company is “Human
Resource”. To maintain a stable workforce, employers must deliberately engage in retention
activities. These efforts range from offerings attractive compensation packages to involving
employees in every sphere of the functioning of the organization. Today’s employers prefer
stable, committed, flexible always heavy competition among the employees to attract the
best talents to enhance their competitive positions in the market.

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Becoming an employer of choice and using employer branding attract and retain the best
talents available in the market. There exists a keen interest in the concept of company or
workplace “climate” and its connection with an employee’s sense of ‘commitment’ to his or
her employer. Author in HR field speak increasingly of the need to ensure retention by
nurturing ‘affective commitment’, or simply put, an employee’s desire to remain a member
of a particular organization for motives beyond compensation or obligation.

A ‘climate of commitment’ is more than just the sum of particular HR policies or retention
initiatives. It is related rather to overall organizational culture, in other words, not just
particular but rather how such programs fall into a company’s overall values, how it
communicates with its employees about those values, and how employees perceive their
own role within the company and the value that the company attaches to their individual
contribution because workplace culture depends a lot on how individuals perceptions and
feelings hold together, it can of course be difficult to say exactly what decisively makes up a
particular company’s culture.

Branham (2001) suggests that commitment – oriented corporate climates depend on a

number of objectives and sub objective elements. Climate of commitment, he writes:

 View employees as partners

 Recognize the human needs of all employees.
 Invest in the people as the primary source of competitive advantage.
 Communication clear corporate mission, vision, strategy, goals and objectives.
 Commit to long-term strategy and the people needed to carry it out.
 Reward system and management styles to support the mission and strategy.
 Focus on “managing the performance contract,” not controlling the people.
 Put a premium on employee involvement in new ideas and innovation.
 Focus on results, not on who gets credit.

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Vision statement

At ADIDAS, we strive to lead in the invention, development and manufacture of the

industry’s most advanced information technologies, including computer systems, soft are,
storage systems and microelectronics. We translate these advanced technologies into value
for our customers through our professional solutions, services and consulting businesses
worldwide.

Mission statement

ADIDAS main activity is to find solutions to its wide range of clients using advanced
information technology. Its clients are individual users, specialised businesses, and
institutions such as government, science, defence, spatial and educational organisations.

To meet and respond to its customers needs, ADIDAS creates, develops and manufactures
many of the world’s most advanced technologies, ranging from computer systems and
software to networking systems, storage devices and microelectronics.(Linc, 1997)Through
this mission statement ADIDAS is striving to dynamically galvanize their props in various
field and trying to maintain a stabilize balance between all above aspect like clients,
government, educational organisation etc.

Technology development:

ADIDAS’s research and development, operations differentiate ADIDAS from its

competitors. ADIDAS annually spends approximately $5–$6 billion for research and
development, including capitalized software costs, focusing its investments in high growth
opportunities. ADIDAS has some of the best technology registered in its account that made
revolutionary changes through-out the many of business operation through huge amount of
business data transferring around the world

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SERVICES:

IT services

• Business continuity and resiliency services

• End user services

• Integrated communications services

• IT strategy and architecture services

• Maintenance and technical support services

• Middleware services

• Security and privacy services

• Server services

• Site and facilities services

• Storage and data services

Other services

• Application innovation services (US)

• Application management (US)

• Outsourcing

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SWOT ANALYSIS:

SWOT analysis is a strategic planning tool that is use n order to evaluate the strength,
weaknesses, opportunities and threats that are involved in a project, business venture or in
any other situation that requires a decision. Thus, the process of sizing up the internal
strengths and weaknesses as well as the external opportunities and threats helps to provide a
quick overview of the strategic situation of an organization (2007, ).

Strength:

– Advanced business performance management.

– Good organization culture.

– Strategic outsourcing, mergers and acquisitions.

– High efficient fulfilment centre.

– Flexible marketing management.

– Creative services

Weaknesses:

-High costs in the value chain.

– Possible acquisition issues

Since, ADIDAS spends much on its research and development then it’s earning and have
very limited supplier in market. Since company owning very sensitive place in market,
because of its massive organisation size the immediate change are likely impossible.

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Opportunities:

– Strong and stable economic market context.

– Sophisticated service market.- High individual consumption power.

– Matured internet market.

– High level of entry barrier to the server market.

– Wireless Applications (Understanding, 2008)

Well, company possess a good place in market, just with little feasible strategies to market
changes, ADIDAS can hold a large share in market. Since, ADIDAS has very less count of
competitors in its segment; almost the star of its field, through these specifications ADIDAS
can create a monopoly in its market. The internet is one of the wide applications, that is
growing faster than anything on earth, the opportunity is open for ADIDAS, because
ADIDAS already in this field by providing huge data storage facilities. Since, ADIDAS is
almost created monopoly on server market, that’s why it’s not easy for other companies to
enter in this field and compete over ADIDAS, except some huge market giants like
Microsoft. Wireless solutions enable customers to extend their reach to clients, suppliers and
employees using wireless and emerging technologies.

Threats:

– Customers have high experience on the service.

– Customers have low switching costs.

– ADIDAS has high switching costs on the core hardware.

– Intense competition.

– High threat of substitutes.

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OBJECTIVES OF THE
STUDY

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 OBJECTIVES OF THE STUDY

Fixing the objective is like identifying the star. The objective decides where we want to go,
what we want to achieve and what is our goal or destination.

Every study is carried out for the achievement of certain objectives.

1. To study the HR practices and Employee compensation of ADIDAS

2. To identify best HR policies to recommend suitable for the organization.

3. To review compensation structures being offered by ADIDAS India.

4. To study the benefits of best HR Practices and compensation structure for company
employees.

5. To find how best HR practices and policies help to reduced attrition rate.

27
 REVIEW OF LITERATURE

The literature for review to be collected from secondary sources such as magazines, articles,
reports, budgets, news paper etc to highlight the problems and findings of the study done by
many research and business professionals to understand the significance of Best HR Practice
and compensation structure of the companies.

Compensation is one of the most important human resource management functions in an

organization. For many organizations, compensation is the biggest single cost of doing
business. An organization’s compensation system helps to reinforce the key corporate
values, and facilitate the achievement of organizational objectives. By rewarding
performance, an organization’s compensation and benefits policies and practices can fortify
employee engagement and employee behavior that realizes its business objectives.

Compensation Policy of an organization firstly is influenced by the organizational

philosophy and culture (Mission, goals, values, attraction and retention of talent) and
secondly by the level of parity within the industry (inter/ intra level relativity, comparator
ratio).

Thus for the organizations prevalent in today’s competitive environment a benchmarking of

the existing salary structure for the employees of all levels of an organization is vital to
motivate the employees and achieve the organizational goals. Benchmarking is an on-going,
systematic process for measuring and comparing one organization to another which signals
management’s willingness to pursue a philosophy that embraces change in a proactive rather
than reactive manner. It is a guiding measurement tool in the process of continuous
improvement which leads a company to best-in-class performance and establishes
meaningful goals and performance measures.

28
 RESEARCH
METHODOLOGY

29
 RESEARCH METHODOLOGY

Research was more of Explorative research and is the moral fiber of the project. In order to
bring about the objectives of the Project, it is important to eloquent the approach in which it
is to be conducted, i.e. the research practice was to be carried out in a certain framework.
Purposes of the research are to rummage around for acquaintance. Also research defines a
systematic and organized search for applicable information on a particular topic.

METHODOLOGY ADOPTED:- This research is aimed at studying of best HR Practices

and Employee compensation of ADIDAS.

RESEARCH DESIGN: – The research design used in this study was both ‘Descriptive’ and
‘exploratory’.

DATA COLLECTION METHODS:

The data was collected using both by primary data collection methods as well as secondary
sources.

PRIMARY DATA: Most of the information was gathered through primary sources. The
methods that were used to collect primary data are:

a) Questionnaire

b) Interview

30
SECONDARY DATA

The secondary data was collected through:

• Text Books

• Magazines

• Journals

• Websites

SAMPLING TECHNIQUE:-

The technique used for conducting the study was convenience sampling technique as sample
of respondents was chosen according to convenience.

SAMPLING UNIT:

This was presented to concern people at ADIDAS 50 admin employees from the
organization were contacted for the purpose of getting the required information. The
information gathered analyzed and presented in this report.

STASTICAL TOOLS:

The tools used in this study were MS-EXCEL, MS-WORD. MS-EXCEL was used to
prepare pie- charts and graphs. MS-WORD was used to prepare or write the whole project
report.

31
METHOD USE TO PRESENT DATA:

Data Analysis & Interpretation – Classification & tabulation transforms the raw data
collected through questionnaire in to useful information by organizing and compiling the
bits of data contained in each questionnaire i.e., observation and responses are converted in
to understandable and orderly statistics are used to organize and analyze the data:

• Simple tabulation of data using tally marks.

• Calculating the percentage of the responses.

• Formula used = (no. of responses / total responses) * 100

Graphical analysis by means of pie charts bar graphs etc.

NUMBER OF RESPONDENTS

50

AREA OF STUDY

PANCHKULA

32
RESEARCH METHODS:

• Educational Research: Educational Research: Quantitative, Qualitative and Mixed

Approach. Have lectures, concept maps and more. Linked to a textbook by Burke Johnson
and Larry Christiensen

• Research Design Explained: Lectures, PowerPoint presentations and additional material.

The goal of the text was to provide a user-friendly book that could engage students while
offering practical advice about how to read, conduct, and write up research. The book
explains fundamental concepts clearly and illustrates with many real-life analogies.

• Research Methods Resources on the WWW: One of the most comprehensive sites that we
have ever run across. Links to a wide coverage of research topics. Includes links to free
online books, electronic journals, research methods, ethics and software.

• The Qualitative Report: A journal devoted to Qualitative Research from Nova

Southeastern University, Florida. It also has links to other Qualitative Research sites.

• Qualitative Research: Originally designed as a private repository of information for

graduate students learning about qualitative data analysis software this site has developed
through the contribution of other people from many qualitative persuasions.

33
DATA ANALYSIS
&
INTERPRETATION

34
DATA FINDINGS AND ANALYSIS

Q1. Age Profile

TABLE-1.1

RESPONSE NO.OF RESPONDENTS %AGE

RESPONDENTS

20-30 25 50

31-40 12 24

41-50 8 16

51and above 5 10

60

50

40

30 NO OF RESPONDENTS
% AGE OF RESPONDENTS

20

10

0
20-30 31-40 41-50 51 and above
A
nalysis & Interpretation:

50% of the respondents fall in the age group of 20 – 30, 24% of the respondents fall in the
age group of 31 – 40, 16% of the respondents fall in the age group of 41 – 50and 10% of the
respondents fall in the age group of 51 And Above.

1.2 Gender profile:

35
TABLE-1.2

GENDER NO.OF RESPONDENTS % AGE OF RESPONSE

MALE 13 26
FEMALE 37 74
TOTAL 50 100

%Age of Respondence

26%
MALE
FEMALE

74%

Analysis & Interpretation:

74% of the respondents were male and26% of the respondents were female.

Q2. Years of Service in Present Organization:

TABLE – 2

36
 RESPONSE NO.OF % AGE OF
RESPONDENTS RESPONDENTS
LESS THAN 1 YEAR 8 16
1-3 6 12
3-5 12 24
5 YEARS 8 16
ABOVE 5 YEARS 16 32
35

30

25

20

NO OF RESPONDENCE
15
PERCENTAGE OF RESPONDENCE

10

0
<1 year 1-3 year 3-5 Year 5 Years Above 5
Years

Analysis & Interpretation:

32% sample of respondent has been working above 5 years for Years of Service in Present
Organization, 24% respondents are working 3-5 years, 16% working for 5 years or less than
1 years and 12% respondent has been working 1-3 years.

Q3. Do you agree that HR Practice and Strategies is very beneficial for any orgnisation
progress?

RESPONSE NO. OF RESPONDENTS %AGE OF

RESPONDENTS

37
 STRONGLY AGREE 16 32%

AGREE 24 48%

NEUTRAL 8 16%

DISAGREE 2 4%

STRONGLY DISAGREE 0 0

TOTAL 50 100

% age of Respondents

STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE
STRONGLY DISAGREE

Analysis & Interpretation: As per shown in the above pie graph the 48% of the
respondent agree that HR Practice and Strategies is very beneficial for any orgnisation
progress, 16% of respondent neutral, 32% of respondent strongly agree with above
statement.

Q4. Do you feel that the HR Practice and Strategies has reduced the time and effort in
preparing the job description and job specification?

TABLE – 4

38
 RESPONSE NO. OF RESPONDENTS %AGE OF RESPONDENTS

STRONGLY AGREE 12 24%

AGREE 21 42%

NEUTRAL 15 30%

DISAGREE 2 4%

STRONGLY DISAGREE 0 0

TOTAL 50 100

%age of Respondence

Strongly Agree
Agree
Neutral
Disagree

ANALYSIS AND INTERPRETATION: It is evident from the above pie graph that 42%
of respondent Agree, 30% of respondent Neither Agree nor Disagree, 24% of respondent
Strongly Agree and only 4% of respondent are disagree.

Q5. The pre-selection stage, interviewing and other assessment activities done via
HRIS process are effective.

TABLE – 5

RESPONSE NO. OF RESPONDENTS %AGE OF

39
 RESPONDENTS

STRONGLY AGREE 13 26%

AGREE 19 38%

NEUTRAL 15 30%

DISAGREE 3 6%

STRONGLY DISAGREE 0 0

TOTAL 50 100

%AGE OF RESPONDENTS

STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE
STRONGLY DISAGREE

ANALYSIS AND INTERPRETATION: It is evident from the above pie graph that 38% of
respondent Agree, 30% of respondent Neither Agree nor Disagree, 26% of respondent
Strongly Agree and only 6% of respondent are disagree.

Q6. What are the main tools of handling the main Human resource challenges?

TABLE – 6

RESPONSE NO. OF RESPONDENTS %AGE OF

RESPONDENTS

TRAINING 23 46%

40
 CONSULTANCY 12 24%

TOOLS 11 22%

ANY OTHER 4 8%

TOTAL 50 100

NO. OF RESPONDENTS

TRAINING
CONSULTANCY
TOOLS
ANY OTHER

ANALYSIS AND INTERPRETATION:

It is evident from the above pie graph that 46% of respondent said Training main tools of
handling the main Human resource challenges.

Q7. Which of the following factors are most important for an effective HR
department?

RESPONSE NO. OF %AGE OF

RESPONDENTS RESPONDENTS

PLANNED MANAGEMENT 14 28%

41
MGT. OF TALETED & COMPETENCY 19 38%

RECONSTRUCTING THE HUMAN 12 24%

RESOURCES

OTHER RELEVANT ONE 5 10%

TOTAL 50 100

%AGE OF RESPONDENTS

PLANNED MANAGEMENT
MGT. OF TALETED AND
COMPETENCY
RECONSTRUCTING THE HUMAN
RESOURCES
OTHER RELEVANT ONE

Analysis & Interpretation: It is evident from the above pie graph that 38% of respondent
said Management of Talent and Competency, 28% of respondent said Planned Management
system, 24% of respondent said Re constructing the Human Resources and other said
mention the other relevant ones.

Q8. Do you think that the best HR practices help to control attrition rate in your
organization?

RESPONSE NO. OF RESPONDENTS %AGE OF RESPONDENTS

STRONGLY AGREE 50 32%

42
 AGREE 16 20%

NEUTRAL 10 36%

DISAGREE 18 12%

STRONGLY DISAGREE 6 0

TOTAL 50 100

%AGE OF RESPONDENTS

STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE

Analysis & Interpretation:As per shown in the above pie graph, 32% of respondent think
that the best HR practices help to control attrition rate in the organization, 12% of
respondent said rarely, 20% of respondent said often, 36% of respondent sometimes, and
other 0% of respondent almost never.

Q9.The pay structure has been clearly defined in the HR department.

TABLE – 9

RESPONSE NO. OF RESPONDENTS %AGE OF

RESPONDENTS

AGREE 43 86%

43
 DON’T AGREE 7 14%

TOTAL 50 100

NO. OF RESPONDENTS

AGREE
DON’T AGREE

Analysis & Interpretation:

As per shown in the above graph, 86% of respondent agree that pay structure has been
clearly defined in the HR department and 14% of the respondent said no category.

Q10. HR Practice and Strategies applies long term HR policies to improve

Organizational performances.

RESPONSE NO. OF RESPONDENTS %AGE OF

RESPONDENTS

STRONGLY AGREE 24 48%

44
 AGREE 13 26%

NEUTRAL 11 22%

DISAGREE 2 4%

STRONGLY DISAGREE 0 0

TOTAL 50 100

%AGE OF RESPONDENTS

STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE

Analysis & Interpretation: As per shown in the above pie graph, 48% of the respondent
strongly agree that HR Practice and Strategies applies long term HR policies to improve
Organizational performances, 26% of the respondents agree, 22% neutral, and 4% of the
respondents disagree.

Q11. Do you agree that benefits of best HR Practices and compensation structure for
company employees?

RESPONSE NO. OF RESPONDENTS %AGE OF

RESPONDENTS

STRONGLY AGREE 12 24%

45
 AGREE 14 28%

NEUTRAL 20 40%

DISAGREE 4 8%

STRONGLY DISAGREE 0 0

TOTAL 50 100

%AGE OF RESPONDENTS

STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE

Analysis & Interpretation:As per shown in the above pie graph 40% of respondent neutral
that benefits of best HR Practices and compensation structure for company employees 28%
of respondent said Agree that benefits of best HR Practices and compensation structure for
pany employees, 24% of respondent said highly agree, and 8% of respondent said disagree.

46
 FINDING

FINDINGS AND SUGGESTION

1. 74% of the respondents were male and 26% of the respondents were female

2. As per the outcome of the study 32% sample of respondent has been working above 5
years for Years of Service in Present Organization, 24% respondents are working 3-5 years,
16% working for 5 years or less than 1 years and 12% respondent has been working 1-3
years.

47
3. From the outcome of the study it is evident that 48% of respondent agree that in HR
Practice increased in scope and responsibilities in the last three years, 24% of respondent
neutral, 20% of respondent strongly agree with above statement.

4. As per the outcome 8448% of the respondent agree that HR Practice and Strategies is very
beneficial for any orgnisation progress, 16% of respondent neutral, 32% of respondent
strongly agree with above statement .

5. 42% of respondent feel agree that the HR Practice and Strategies has reduced the time and
effort in preparing the job description and job specification.

6. As per the outcome of the study 38% of respondent agree pre-selection stage,
interviewing and other assessment activities done via HRIS process are effective 46% of
respondent said Training main tools of handling the main Human resource challenges.

7. 46% of respondent said Training main tools of handling the main Human resource
challenges.

8. 32% of respondent think that the best HR practices help to control attrition rate in the
organization.

9. 86% of respondent said pay structure has been clearly defined in the HR department and
14% of respondent are no category

10. Most of the respondent strongly agree that HR Practice and Strategies applies long term
HR policies to improve Organizational performances

11. Most of respondent feel that best HR practices and policies help to create effective
compensation structure in the organization.

12. 28% of respondent said Agree that benefits of best HR Practices and compensation
structure for company employees.

13. 34% of respondent Most of best HR practices and policies help to reduce attrition rate,

48
49
 LIMITATIONS

LIMITATIONS OF THE STUDY:

No study is complete in itself, however good it may be and every study has some
limitations. Some of the limitations which I had confronted are as follows:

1. The size of the research may not be substantial and it is limited to the particular area.

50
2. There may be lack of time on the part of respondents.

3. There may be some bias information provide by company professionals.

4. As only single cities are surveyed or covered. It does not represent the overall view of
Indian Market.

5. It is very much possible that some of the respondents may have given the incorrect
information.

51
 SUGGESTIONS

SUGGESTIONS OF THE STUDY:

Creating a Winning climate begins with our own behaviors, attitudes and actions. There are
lots of things which you can do to make the difference between a great and a dismal culture.
By Creating a Winning Culture/climate, it gives your business an extra dimension – like its
one big being, rather than loads of individuals working together.

52
CREATING A WINNING CLIMATE:

 Behaving equitably like treating others in a way they would wish to be treated
themselves and encourage that in their business for all.
 Be honest and trustworthy through a deep understanding of what is truly important,
one must realize that they must be open, honest and keep promises.
 Care about people and be supportive, employees understand that they are dealing
with real human beings who have feelings, passions, emotions and sensitivities. And
they make sure they treat them with respect.
 Coaching and feedback generate a wonderful learning organisation which fosters
growth and challenge, also recognizes that some employees just want to do well and
enjoy the roles they have, doing a great job.
 Acknowledge good performance and recognize it in ways that will give value to the
individual. They celebrate a job well done and reward appropriately.
 Communicating well is very important because, ultimate listeners, those who enable
the best cultures/climate are truly interested in what others have to say. What is
important to their people is appreciated. Information is openly shared and their
people can contribute fully and comfortably.
 Delegating well is the best business cultures/climates; people do what they are best
at. Those Creating a Winning Culture/climate let go of the things they don’t need to
do and use delegation as a development tool. Bringing new skills and successes to
others and enabling them to focus on growth and future.
 Building relationships making the best of their interactions of others is a talent.
Great business cultures are personified by the nature of the way people interrelate,
making for a synergistic explosion of shared ideas and integration.
 Appreciate Differences – Everyone is part of a great team and business. There are
many individuals who contribute their particular and unique skills and abilities into
the pot of success. The exponents who are great at Creating a Winning Culture
appreciate this variety.

53
  Have Fun -They are all at once, completely trusting each other and without ‘side’.
That frees them to have fun a lot – and you can see it and feel it wherever you are in
the business.

TO BE BETTER AT CREATING A WINNING CLIMATE

 Great Environment – Have the place you work comfortable, with all resources in
place. You have to get this right first, before expecting a great culture.
 Be Very Clear – Through having a set of standards you state clearly and a process
for identifying to people exactly what is expected of them, there will be no surprises.
People will have their goals and targets. It will be easy for them to understand and
deliver.
 Encourage Sharing – Through your own modeling, you can help all of your people
to work closely together in a generous and supportive way. Be the ‘shining beacon’
in this.
 Be a Champion – Shout your loudest for how proud you are of your people as
individuals and as a team. By flying their flag you will gel positive team spirit with
individual performance.
 Listen and Talk – Make contact with your people regularly, both formally and
informally. Just listen to what they have to say, value their contribution (really, and
show it!) and tell them the stuff they need to know.

CONCLUSION

The analysis of the company shows that company tries to maintain good relation among
members and their work involves in socially relevant issues. Achievement of result is of
main importance here people are selected for their competence and also given freedom to do
their work whereas in comapny the Managers/ Supervisors control the particular
department/unit and they employee their own in-group members who tends to be loyal to

54
them. Thus, people’s work practices play an integral role in the sustenance and growth of
this sector.

Also employee engagement has become a major organizational challenge today. An

organization with engaged employees would have a strong customer focus, would yield
better financial results and would be most effective in attracting & retaining talent. Thus, it
has become vital for organizations to achieve higher employee engagement levels.
Organizations implementing best HR practices have been found to have a considerably high
employee engagement.

Unique HR practices, which fit best into ADIDAS India structure suggested in some of the
HR functions, are:

• Learning & Development: Self Development can be linked to performance plans. This
grooms more employees for higher responsibility thus generating leaders who are committed
to the organizational goals

• Recruitment, hiring & Induction: Internal job posting and Employee referrals generate
healthy competition and motivates the employees leading to greater job satisfaction.

• Work Environment: A drop box facility can be introduced for redressal of grievances and
generating an active feedback from the employees. This leads to high employee
engagement.

These have been a few recommendations made for ADIDAS India in order to develop a
motivated and an engaged workforce. Compensation is an important benchmark that effects
employee engagement. Best practices in compensation would lead to a salary structure,
which is employee friendly, tax efficient and at the same time cost beneficial for the
company. A few suggestions made and implemented in this respect have been:

• Special Allowance: The contribution of this highly taxable element towards the CTC need
to be reduced.

• Hard Furnishings: This being beneficial both to the employee and the employer, can be
introduced as an element in the compensation structure

55
56
 ANNEXURE

BIBLIOGRAPHY

Web Sites :

57
Adidas official site (www.adidas.com.en)

Wikipedia (www.wikipedia.com)

Slideshare (www.slideshare.com)

Books & Journals :

1. “A Handbook of Employee Reward Management and Practice” by Michael Armstrong

2. “Best Practices for managers: a guide on selection, hiring and compensation” by Stan
Lomax

3. BNET articles and journals

4. Business World Magazine

5. Compensation by George T. Milkovich

6. Compensation & Benchmarking Study by Mercer Human Resource Consulting

7. Economic Times

8. Gallup-BusinessWorld Compensation & Benefits Report 2006

9. Grow Talent GPTW Study 2006 Report

10. Hewitt Best Employers in India 2007 Report

11. Hewitt Reports on Compensation

12. “The HR Professionals’ Best Practices Collection” by Aspatore Books Staff

58
 QUESTIONNAIRE

QUESTIONNAIRE

PERSONAL DATA

Name of the Respondent:

59
Q1. Age:

a) 20 – 30

b) 31 – 40

c) 41 – 50

d) 51 And Above

Gender:

a) Male

b) Female

Department:

a) Administration

b) Finance

c) HRD

d) Customer Support

Q2. Years of Service in Present Organization:

60
a) Less Than One Year

b) One To Three Years

c) Four To Five Years

d) More Than Five Years

Q3. Do you think that HR Practice and Strategies is very beneficial for any orgnisation
progress?

a. Strongly Agree

b. Agree

c. Neutral

d. Disagree

e. Strongly Disagree

Q4. Do you feel that the HR Practice and Strategies has reduced the time and effort in
preparing the job description and job specification?

a. Strongly Agree

b. Agree

c. Neither Agree nor Disagree

61
d. Disagree

e. Strongly Disagree

Q5. The pre-selection stage, interviewing and other assessment activities done via
HRIS process are effective.

a. Strongly Agree

b. Agree

c. Neither Agree nor Disagree

d. Disagree

e. Strongly Disagree

Q6. What are the main tools of handling the main Human resource challenges?

a. Training

b. Consultancy

c. Tools

d. Any other

Q7. Which of the following factors are most important for an effective HR practices?

a. Planned Management

b. Management of Talent and Competency

c. Re constructing the Human Resources

62
d. Mention the other relevant ones.

Q8. Do you think that the best HR practices help to control attrition rate in your
organization?

Most of the time

a. Often

b. Sometimes

c. Rarely

d. Almost never

Q9.The pay structure has been clearly defined in the HR department.

a. Agree b. Don’t agree

Q10. HR Practice and Strategies applies long term HR policies to improve

Organizational performances.

a. Strongly Agree

b. Agree

c. Neutral

63
d. Disagree

e. Strongly Disagree

Q11. Do you agree that benefits of best HR Practices and compensation structure for
company employees?

a. Highly Agree

b. Agree

c. Neutral

d. Highly disagree

e. Disagree

*****

64