An Analysis of HRM Failures and Recommendations: Sports Direct Case

This report provides an in-depth analysis of the human resource management (HRM) issues prevalent at Sports Direct, a UK-based sports retailer. The report highlights significant problems, including employee exploitation, minimum wage violations, oppressive working conditions, and the failure of the HRM department to support employees. It examines the implementation of HR theories like the wages fund theory and the surplus value theory to explain the situation. The report further explores issues such as fear among employees, exploitation through contracts, and sexual harassment allegations. It concludes with recommendations for improved HRM practices to address these challenges and foster a more ethical and supportive work environment.

Running head: MANAGING PEOPLE
Managing People
Name of the Student
Name of the University
Author Note

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Abstract
The following paper has discussed about the HR issues prevalent in the organization named
Sports Direct in the United Kingdom. The management of the company did not provide any
support to the employees and did not value them either. The organization had implemented an
oppressive system for the workers to suppress them and rip off their rights. The workers were not
given the proper wages for their efforts. The career development paths for the organization were
completely out of direction. Thus the organization suffered a huge hammer blow in this manner.
The role of the human resource management was very shameful since they were unable to
provide any support to the employees. The theoretical frameworks regarding HR practices have
been discussed in this paper to highlight the outcomes of the situation.

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Table of Contents
Introduction......................................................................................................................................3
Overview of the company................................................................................................................3
HRM issues in Sports Direct...........................................................................................................4
Fear among employees................................................................................................................6
Payment of minimum wages.......................................................................................................6
Exploitation in the contracts........................................................................................................7
Sexual harassment issues.............................................................................................................7
Implementation of the HR theories..................................................................................................8
Wages fund theory.......................................................................................................................8
Surplus value theory for wages....................................................................................................8
Wages bargaining theory.............................................................................................................9
Motivation theory for employees.................................................................................................9
Reasons for the failure of the Human resource department..........................................................10
Recommendations for better practices...........................................................................................11
Conclusion.....................................................................................................................................12
References List..............................................................................................................................13

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Introduction
The issues regarding the human resource management are very important for the success
of the organizations. It is applicable for all the organizations in all the industries. The department
of the human resource management has to control different things at different times. This is why
their tasks are really challenging. If the HRM department is not able to adjust their works
properly and face many problems due to this, they might face serious challenges and this might
affect the organizational performance (Reilly and Williams 2016). In this report, the company
named Sports Direct has been chosen i.e. based in United Kingdom only. Recently several issues
and challenges have been observed regarding the payment of wages. The conflicts among
workers have taken place because of that as well. Due to these conflicts there have been
performance issues harming their overall reputation. The following report will find out several
HRM factors for Sports Direct using the HRM theories and recommendations will be given on
how these challenges could be mitigated.
Overview of the company
Sports Direct is a very reputed sports retailer company based in the United Kingdom. The
company was founded in the year 1982 by a person named Mike Ashley. The company is said to
operate worldwide and it has around 670 stores all over (Sportsdirect.com 2019). There are many
sports brands that are owned by the brand of Sports Direct. The headquarters of the company is
located at Shirebrook in England. The sports and fashion brands that are owned by the company
are Lonsdale, Karrimor, Firetrap, Everlast, Slazenger and Donnay (Sportsdirect.com 2019). The
company has been charged with underpaying of wages to their staffs. This has become a huge
HRM issue for the company and this issue has drawn the attention of many international
organizations as well.

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HRM issues in Sports Direct
Sports Direct is such a company that has been charged of challenges facd in their HRM
operations for a long time now. The owner Mike Ashley has been charged with all these
allegations and this has been a major reason for their downward reputation indeed. The working
practices in the company are completely sub-standard and this is not good for the company at all.
According to the sources, it had been reported previously that they had their main warehouse at
Derbyshire (Reilly and Williams 2016). The workers in there had protested about the working
conditions and payments provided to them. These issues became viral and many lawsuits
followed regarding this case as well. After the thorough investigations being carried out, the
founder of the company Mike Ashley had completely denied the reports of the mistreatments to
the workers that had been carried out. He had blamed his managers for that who showed extra
zeal in their works (Festing and Schäfer 2014). Still, it is undeniable that the owner of the
company is not aware of the issues that are taking place in his own company at the main
warehouse. The challenges had been reported to the HR department but no such action was taken
because of the fear that they might be terminated for speaking against the hierarchy.
The HR issues have been highlighted about the Sports Direct Company a number of
times since they have not been able to stand up to the industry parameters. Some people have
also called this a mode of Victorian work practice because the workers had been oppressed and
they were robbed of their due facilities and their money as well. The treatment of the staff in the
company was not at all good because the staffs worked in utmost fear. The founder of the
company Mike Ashley had been questioned by different committees like the Innovation and
Skills Committee and House of Commons Business. This is why it was a complete worry to all

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the people in the world. The investigations have been running through because the fear of the
employees is still there.
There were several issues in this discourse. One of them was they were paid minimum
wages for some unknown reasons (Festing and Schäfer 2014). The employees feared their
bosses. These bosses were not at all the leaders of the modern times. Rather they created an
image of oppression (Stone and Deadrick 2015). Here this would be very problematic for the
workers to focus on the work. Both of these situations are very problematic since the workers
would not be able to put their extreme concentration on their work. The foremost thought in their
minds was there was no relevance in working if they did not get the payments they were
promised (Walsh 2015)..
Apart from that, they had to go through security checks and these checks were very much
time consuming at different times. Moreover, the employees faced several health issues and the
organization never took care of that properly. Rather, they had urged and almost forced their
workers to work even if they were not healthy and fit to work. All these issues created so many
problems and it resulted in the ultimate employee dissatisfaction. It is the foremost priority of
the HR department to handle all these challenges of employee dissatisfaction. Otherwise, they
could not manage their workforce (Stone and Deadrick 2015). Beyond everything, it is the role
of the HR department to pay their employees as per their contract papers. If they were paid
minimum wages without any proper reason, it was a complete violation of the contract.
Therefore, the organization had to think about the health issues of all their employees as well.
Otherwise, they cannot be called a responsible organization at all (Analoui 2018).

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Amidst the pressures from the government of UK and the awareness of the media, Mike
Ashley had finally admitted the mistakes committed by the organization and he said that they
were making a review of the entire process (Noe et al. 2017). The securitycheck procedure of the
employees had been largely criticized by the workers and this process had attracted the attention
of the media as well. All the issues will be discussed in detail regarding the HR department. The
concerned human resource managers should have taken proper care of all these issues for their
interest only (D'Cruz, Noronha and Beale 2014).
Fear among employees
As per the sources, it had been revealed that most of the employees were afraid of their
bosses. This was the main reason they had lost the entire interest to work for the organization.
They had implemented some systems and policies within the organization that were completely
draconian in nature. They were in constant tension that bosses were up to some harm to their
professional career by all the means (Noe et al. 2017). The shifting of the duties was done by the
HR department. If any employee was even one minute late in arriving in their shifts, the
payments of 15 minutes would be deducted from their wages. This would be very problematic
for them to make up for. Apart from that, employees were also entitled to lose their jobs if they
were considered under the infamous ‘six strikes’ system. This system included the fact that
employees would fall into the categories of one strike if they used to spend long breaks at toilet
or they took a say of for their sickness (Mondy and Martocchio 2016). These strategies were the
indicators of oppression among the employees.
Payment of minimum wages
It was also reported that the employees were earning wages that were not below what
they were promised. The allegation had rooted from the Guardian. They reported this issue and

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they claimed that workers at the warehouse of the sportswear chain at Shirebrook in Derbyshire
had been left unpaid and they had to go through rigorous searches all over (Mondy and
Martocchio 2016). The security guards also stopped the employees from leaving the office after
their shift was over. So, employees had to stay overtime but they were not paid extra for that.
This means that the employees had been paid less than they should have been.
Exploitation in the contracts
The zero hour contracts had been implemented within the organization. This meant that
the bosses of Sports Direct had no obligations in making the workers work under minimum
hours. Moreover, the workers had been put in a situation where their wages were not at proper
place and their career growth had no direction (Bratton and Gold 2017). These are the sections
that Hr department had to address. The path for career growth is discussed by the HR department
during the induction process. It had been questioned that around 80% of the employees working
in the zero hours could have been shifted to the full time contracts by the company (DeCenzo,
Robbins and Verhulst 2016). This policy could have been altered by the HR department if they
judged on the basis of the worker merits.
Sexual harassment issues
One of the most essential things that the HR department needs to make sure that all
employees are protected and they should not be harassed or discriminated at any point of time.
Despite this, allegations arose that a female employee had been forced to accompany the
managers to dinner in order to get the new contracts (Bratton and Gold 2017). These issues were
completely against the ethical considerations that Hr managers would need to enforce. All these
issues had occurred in the year 2016 and the company had been facing a loss of reputation
because of this (Guo and Al Ariss 2015).

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Implementation of the HR theories
There are some theories that should be implemented by the HR department to address the
smooth flow of the organizational process (DeCenzo, Robbins and Verhulst 2016). The wages
must be paid to the employees based on their works and the time they spend in the offices.
Though it has always been a matter of debate but the workers should always be paid the amounts
according to their contracts (Banfield, Kay and Royles 2018). The wages should be determined
as per the type of their works.
Wages fund theory
According to this theory, the wages of the employees must be determined as per the fund
for wealth as it has already been determined previously. The proponent of this theory was Adam
Smith. According to him, the fund of the wages was created by the savings. He also clarified this
fact by saying that the wage rates and the labor demands had to depend on the shape and size of
the wages fund. (Sparrow, Brewster and Chung 2016). He opined that the fund of the wages will
be high if the wage fund is high. So, it must be said that the organizations should make the
contracts of the workers according to the wage fund. Here, Sports Direct is considered as the
most progressive company in the sports retail industry. So, it is very sure that their wage fund is
very high as well. This kind of behavior from the company like Sports Direct is completely harsh
from their side.
Surplus value theory for wages
This theory had been developed by Karl Marx. He developed this theory by saying that
the labor is definitely an article like all the other articles. It has to be bought by the means of
payments. This payment should be made at the level of subsistence (Berman et al. 2019). This

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theory has advocated for the labor and the surplus items of payments should go to the owner
indeed.
Wages bargaining theory
According to this theory, the bargaining of the employees will be the most important
factor behind the payment of wages. The bargaining power of the workers and trade unions will
be the most important thing behind fixing the wages. According to this theory, the wages would
be high if the temperament of workers is low (Sparrow, Brewster and Chung 2016). On the other
hand, the wages would be low if the bargaining power of the employees is high. Here the
employers of Sports Direct proved to be strong and the founder owner of the company Mike
Ashley forced his employees to receive minimum wages (Kramar 2014). So, the employees
could not get the proper wages because of the strong role of the employers like Mike Ashley.
Motivation theory for employees
The development of this theory was the only thing that was the most important factor for
the betterment of the individuals through the motivation (Purce 2014). It is very important to
note that the employees must be motivated so they can perform at their best levels according to
their potentials. This theory was propagated by Abraham Maslow and it is accountable that the
employees would be motivated through the working culture and the leadership styles of their
managers. The basic need of food and shelter must be ensured by all the employees and it is only
possible if the payments are being done properly (Kramar 2014). If the employees are not paid
properly and are not able to work within a proper working culture, they will not be able to focus
on their performance. Surely, their level of performance will deteriorate. The depression will be
an obvious thing among the employees and this will degrade their morale as well (Chelladurai
and Kerwin 2018).

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These issues had been observed in the minds of the employees in Sports Direct. The
management of the company has been ignorant in such cases (Tyson 2014). The human resource
management of the company has not interfered in this situation and they have not cared to
suggest any remedies regarding it as well. This is where the failure lies among the HR
department of the Sports Direct Company. If they had not neglected in these issues, they should
have surely got better outcomes indeed (Wilton 2016). Rather, this issue had resulted in the
unhappy workplace and dissatisfaction of the employees at the utmost level. They did not put
any value on the workers. So, workers did not feel o put in all their efforts into their work
(Bratton and Gold 2017). The health issues should have been looked after by the organization so
the employees could feel psychologically better to provide all their best efforts an achieving the
organizational performance as well.
Reasons for the failure of the Human resource department
The HR department had completely failed in their responsibilities as they did not care for
their employees and not valued them as well. The imbalance of power had been seen in the
organization regarding the shift hours and the payments (Taylor, Doherty and McGraw 2015).
This is why it proved to be a malpractice and employment conditions in the organization had
completely worsened. All the information had been gathered from both the past and present
workers of the organization. They shared their experiences and this revealed the worst conditions
of working in the organization. The information had been gathered from the warehouse at
Shirebrook (Wilton 2016). It had also been reported that employees were not even given the
breaks at all. This is why the employees could not bear with the situation at all (Paillé et al.
2014). Rather, they did not consider the sick notes from the doctors as well. All these things are
completely unimaginable within a professional organization.

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The bosses were very much arrogant and they showed their contempt for the employees
in every situation without any motivation messages. It was the responsibility and liability of the
HHR managers to manage the shift times and measure the level of performance of the workers.
The workers need motivation and HR managers could very easily manage some sessions through
which the employees could make their performance better. Thus, the entire blame lies on the HR
department as well as different departmental managers (Paillé et al. 2014). The policy
implemented by the HR department named ‘six strikes and you are out’ is also one such through
which they could punish the employees by every means. This is definitely not something that the
management should have done. After all, it is the overall performance and productivity that
matters for the organization. So, it was very evident that employees could be terminated if they
spent long hours in the bathrooms. The HR practices must have been made better to improve the
overall performance of the employees (Taylor, Doherty and McGraw 2015). The excessive use
of power suppressed the wishes of the employees and they were not all valued. The commitment
of the HR practices regarding workers is to be blamed for this unexpected outcome.
Recommendations for better practices
It has always been criticized by everyone that the HR practices in the organization have
been an oppressive model. Here are some measures through which the practices could be made
better.
 The leadership style of the organization Sports Direct should be changed and
authoritative style of the organization must be abolished. This will make the way for
consulting with the employees. So, they will not be able to implement any rules just out
of their minds.