It is our goal to develop a culture that cherishes creativity, collaboration and confidence as well as high performance, the behaviors we deem crucial to the successful delivery of our corporate strategy. In fact, our culture and people serve as the foundation and a key enabler of the ‘Creating the New’ strategy.
Activating our Core Belief
Responding to an increasing desire of employees, consumers and partners to become directly involved in activating our core belief ‘through sport, we have the power to change lives’, and their asking for ways they can make a difference, we focus our activation efforts on three pillars: ‘She Breaks Barriers’, which is aimed at getting girls to join and stay in sport, ‘One Starting Line’, which is aimed at increasing inclusivity for all in sport and sports culture, and ‘End Plastic Waste, which is aimed at protecting the world’s oceans for future generations. To maximize impact, we leverage brand moments to raise awareness for these topics and create opportunities for engagement. In 2019, these included opportunities for our employees to volunteer their time and expertise, and we collaborated with our athlete ambassadors at moments such as the Women’s World Cup, the Super Bowl, as well as key cultural moments such as Earth Day, International Day of the Girl, Black History Month and Pride. Adidas brand strategy
For the Women’s World Cup, partnering with the NGO Equal Playing Field, adidas organized multiple football camps around the world and brought together over 3,500 women and girls from all across the globe to play football, share skills and make connections at the Festival of Football in Lyon, France. In partnership with Amazon, we sponsored Girls on the Run races with a distance of five kilometers and enabled 600 girls to have access who would otherwise not have been able to participate. Additional money raised will equip coaches to make program adaptations to better serve and include girls with disabilities. We also launched @3stripelive, which was the first-ever livestreamed high school girls’ soccer and volleyball games on Twitter with over 14.5 million livestream views. This was done in partnership with the US Soccer Foundation and United for Girls, with the objective to double the number of girls who have access to soccer. Working with Up2Us Sports, we developed the digital coaching curriculum ‘Keep Girls in Sport’ to educate coaches on the specific training needs of young girls, aiming at removing the potential barriers they face. In Germany, adidas partnered with the network Impact Hub to host a series of initiatives to enable the next generation of female athletes, creators and leaders. Twelve venture teams were given access to peer networking, adidas mentors and business clinics on business strategy, finance and digital marketing with adidas experts over a period of three months. Three selected ventures can earn a monetary grant to scale their ideas further.
We aim to harmonize the commercial interests of the company with the professional, private and family needs of our employees. Our Work-Life Integration initiatives and programs include the provision of flexible working times and place, people development and leadership competence related to work-life integration, as well as family-oriented services:
- Childcare: In addition to providing flexible working opportunities such as teleworking and sabbaticals, we cater for a family-friendly environment and infrastructure. At our headquarters in Herzogenaurach, Germany, we extended the number of parent-child offices from two to four, and expanded our childcare facility ‘World of Kids’. It now provides space for 270 children in two buildings. In 2019, we also introduced an ad-hoc childcare service to support parents in emergency situations or during transition phases and short-term assignments. At various locations across the globe, adidas offers a variety of holiday camps for children, with more than 450 participants benefiting in 2019. Other global locations also offer various forms of benefits and support services to ensure that our employees are able to access and secure quality childcare. With the ongoing expansion of our infrastructure and childcare offering, we as a company emphasize our commitment to a family-friendly environment to integrate work and private life – and enable balanced careers.
- Parental leave: For parental leave and re-entry, programs are in place to provide employees with advice early on and options for their return to work, also taking into consideration flexible working hours and work locations. In Germany, we guarantee our employees on parental leave their positions, which are only filled temporarily. In the US, in addition to regular parental leave for new parents (up to 10 weeks at home, 70% of their salary), adidas offers an extra two weeks’ paid parental leave for parents. Furthermore, adidas’ special parental bonding leave provides parents with the possibility to stay home for up to six months within the first twelve months after the child’s birth or placement. While unpaid, it offers parents the opportunity to stay home longer and take care of their new arrival and new life together. Latin America has made significant amendments to improve work-life integration across the market. This includes an extended parental leave approach where mothers will be provided 24 paid weeks in total to spend with their children, and fathers/partners will be provided 20 paid days in total. On top, mothers are allowed to work fewer hours one month before and after their maternity leave period.
- Flexible work: Continuing in Germany in 2019, every employee with an adidas AG contract whose working tasks can be carried out independently of campus facilities, campus equipment or personal interaction on-site is eligible to work 20% of their total working time off-campus. This policy and agreement is based on our belief that results can be achieved in the same quality and quantity, regardless of people’s location. Positive feedback motivated us to roll out the approach globally. Our North America market implemented the concept in 2018, Latin America and partly Europe followed in 2019, to be continued in 2020.
- Expansion of workplaces: In line with the efforts to centralize all local employees at the headquarters campus ‘World of Sports’ in Herzogenaurach, in 2019 we opened a new main office building called ‘Arena’. It has capacity for around 2,000 employees and applies an activity-based working concept in which employees no longer have assigned desks and instead choose from a variety of rooms and spaces, dependent on their needs. To make work-life balance as easy as possible for our employees on campus, we offer, in addition to two childcare facilities, other services such as dry-cleaning, grocery delivery and the possibility to receive private deliveries. In Asia, we moved our new Asia-Pacific and Greater China Head Office to the IFC tower in downtown Shanghai offering easy access to commercial facilities. It combines a comfortable and green working environment with an agile and convenient working experience, including a staff canteen, gym, showrooms as well as collaborative open areas. Lastly, we are also centralizing most of our workforce in Portland in one location. The ongoing expansion of adidas enables capacity for 2,800 employees with the build-out of two office buildings that include parking garages, an expansion of the on-site employee restaurant, and further extended employee services. With this expansion, we are also rolling out the activity-based working concept already in place at most of our local headquarter locations worldwide.
We support our employees by aiming to provide the best possible conditions to ensure that they feel good and stay healthy. Our holistic approach includes people’s physical, mental and social well-being, and focuses on four pillars: mindset, nutrition, movement and medical services. In 2019, for example, we pursued global activations around World Mental Health Day in October, including information campaigns, prominent speakers who shared their personal story, an open dialogue with senior leaders as well as exercises for stress relief. We also saw great progress in providing employees access to sports facilities. Employees in Herzogenaurach, Portland, Boston, Moscow, Gurgaon and Manchester, and at other locations across the globe, have access to a corporate gym. In 2019, construction work started to extend the gym at our German headquarters, and with its completion in 2020 it will offer significantly more space and training opportunities for more than 3,000 members as well as integrate physiotherapy with extended offerings. Lockers and showers in office buildings allow people to run or cycle to work. In 2019, adidas UK received Britain’s Healthiest Company Award in the category medium-sized company.
We believe a continuous focus on learning and development of our employees is a key enabler of driving a high-performance culture. To support this, we offer employees access to a wide range of in-person and digital opportunities. Our Learning Management System is now globally available to almost half of all employees, 75% of whom have accessed available training and development offers to support their current performance and future career development. In 2019, compared to 2018, we saw a more than 20% increase in the number of employees who participated in in-person learning activities. Within our online platform, we provide two digital offerings to all corporate employees: LinkedIn Learning and Leadership Library, a service which curates and summarizes industry articles, media and university courses based on company or learner needs. These offerings continue to provide employees access to content across subjects in business, creative and technology areas. In 2019, an average of more than 1,900 content pieces were consumed monthly within the Leadership Library, while the number of employees registering for LinkedIn Learning accounts more than doubled.
In 2019, we expanded our global core learning programs to ensure we continue to support strategic business initiatives, build capabilities connected to our and support development of future cross-functional organizational capabilities. Input into the program offer is managed through a business needs assessment supported by our HR organization.
#MYBEST is the global performance development approach in adidas and is a key enabler of a high-performance culture. The four elements encourage regular high-quality conversations between the employee and the line manager, provide a framework for regular upward and peer feedback exchange, and ensure goals are set and reviewed quarterly. Formal performance evaluation takes place twice a year1, development being in the focus of every monthly ‘Touch Base’ conversation. The voice of employees is critical in the evolution of #MYBEST. The global #MYBEST survey is run on an annual basis and is a key source of information when making decisions regarding improvements. In 2019, we made several improvements, including the simplification of quality and actionable peer and upward feedback, the reduction of performance evaluations from 4 to 21 to bring more simplicity and efficiency into the process as well as the clarification of various levels of performances, providing further clarity to all employees to identify their area of strength and development. The definitions also ensure that employee performance is evaluated consistently across the organization.
1 Employees in Germany continue to have four evaluations based on the current company agreement.
Wages, benefits and incentives
We are committed to rewarding our employees with compensation, benefit and incentive programs that are competitive in the marketplace and are aligned with our performance culture. Remuneration throughout the company comprises fixed and variable monetary compensation, non-monetary rewards as well as other intangible benefits. The cornerstone of our rewards program is our Global Salary Management System which is used as a basis for establishing and evaluating the value of employees’ positions and salaries in a market-driven and performance-oriented way.
The various variable compensation and benefits components we offer our employees include:
- Bonus program – Short Term Incentive (STI) program
- Profit participation program – ‘Champions Bonus’ (Germany)
- Long-Term Incentive (LTI) Plan for senior management
- 401-K Retirement Plan (USA) and adidas Pension Plan (Germany)
- adidas Stock Purchase Plan
We are continuously improving our remuneration approach and are therefore investing in a number of projects and initiatives to increase the significance of our remuneration programs, as well as to ensure we are investing in the right people at the right level. One of the improvements we made was an overhaul of our benefits offer in Germany and the US throughout the last three years, which is designed to minimize salary differences and, more importantly, inequity of employees on the same positions and grades. It is based on a higher level of detail for external market data and addresses internal pay gaps – also helping to ensure that we pay fairly at the same level for female and male employees. Furthermore, we developed a monitoring approach to identify potential pay gaps and work continuously to improve and close these gaps on a country-by-country basis. To further enhance our efforts and transparency on this topic we support initiatives such as ‘Lean In’ and will also in 2020 put a strong emphasis on continuously closing potential gaps. The latest internal report regarding the Equal Pay Gap shows an overall balanced picture on pay between female and male employees, based on a weighted average calculation between the salary grade levels.
In addition, we further improved transparency and governance for senior management remuneration, and created higher transparency about remuneration as well as internal and external positioning of compensation and benefits packages. The aim was to ensure objective decision-making for management remuneration, and to continue standardizing our pay structures. We rolled out a global Long-Term Incentive Plan for senior management. This program provides Restricted Stock Units (RSUs), linked to our earnings per share (EPS) targets and to our share price performance. It closely links the goals of our senior management with those of our shareholders – sustainable success and long-term growth – and fosters a company ownership mentality. In 2019, we were able to complete the roll-out of the LTI Plan to the director level globally. note 28
Our subsidiaries also grant a variety of benefits to employees, depending upon locally defined practices and country-specific regulations and norms.
Stock Purchase Plan
Participation in the Stock Purchase Plan is provided to employees in Germany, the US, the Netherlands and Greater China (China mainland, Taiwan and Hong Kong), offering almost half of our employees globally (excluding retail) the possibility to participate. On average, around 5,000 employees participated in the program in 2019 (2018: 4,800).
The ‘3Cs’ stand for creativity, collaboration and confidence. It is adidas’ goal to develop a culture that cherishes creativity, collaboration and confidence as well as high performance – the behaviors we deem crucial to the successful delivery of our corporate strategy. In fact, our culture and people serve as the foundation and a key enabler of the ‘Creating the New’ strategy.