Sports Direct boss Mike Ashley has pledged to spend £10m on raising the pay of all the firm's employees to above the minimum wage.
The move follows criticism from unions and in Parliament over the retail giant's pay and employment practices, including the use of zero hours contracts, under which staff do not know how many hours they will work from one week to the next.
It also comes shortly after the board announced Mr Ashley would oversee a review of all agency worker terms and conditions at the company.
The rise is likely to most benefit casual workers in its stores and agency staff in its depot.
Mr Ashley said: "I want to see Sports Direct become the best high street retail employer, after John Lewis."
He added that thousands of Sports Direct staff received "life-changing" bonuses each year.
The rise will amount to around 15p an hour meaning workers 21 and above will receive £6.85 per hour and 18 to 20 year olds will be paid £5.45 hourly.
There are around 4,300 agency workers employed in Sports Direct's warehouse, while the company employs around 28,000 staff across the UK and Europe.
Sports Direct posted half-year results showing a 3.6 per cent rise in underlying pre-tax profits for the six months to October 25.