Apple’s Compensation and Benefits

Apple’s Compensation and Benefits

Apple is a global technology company established by Steve Wozniak and Steve Jobs in 1976. The company has maintained a history of employee satisfaction and acquiring talented employees from across the world (Mollah, 2015). The company’s human resource management department has also gained global recognition for putting the needs of the employees first and motivating staff to achieve job satisfaction. Over the years, Apple company has managed to retain talented employees through its compensation and benefits package. According to Bernadin (2007), compensation and benefits are tangible benefits and financial returns offered to employees as part of employment relationships. Snell & Bohlander (2007) argue that compensation and benefits are one of the most vital human resource management practices in the current competitive business world. It incorporates all forms of rewards and pay received by employees for their performance in the work environment. The main types of compensation are direct and indirect compensation. Get in touch with us at eminencepapers.com. We offer assignment help with high professionalism.

Direct compensation incorporates salaries and wages, bonuses, and commissions. On the other hand, indirect compensation includes many benefits offered by employers and fringe benefits such as subsidized lunch, free insurance, a nice working environment, intrinsically rewarding jobs, and a flexible work schedule accommodating personal needs. The current rise in competition in the business world has created a need to acquire and retain talented employees. Some companies are experiencing a range of managerial issues when attempting to adapt strategic compensation, thus resulting in high employee turnover. However, others, such as Apple, have managed to maintain high profits and reduce employee turnover by using compensation and benefits strategically.

Apple Company’s Compensation and Benefits Strategy

Apple company has a unique compensation strategy that a compensation committee manages. The committee consists of a minimum of three members who are not allowed to participate in another company’s compensation committee. The company requires the committee to develop and modify incentive and compensation schemes and the approval and revision of awards of the incentive and compensation scheme to ensure that it abides by the law and dominant industry environment. The committee additionally ensures that the employees get good pay compared to the tasks assigned to them in the company. The committee additionally creates and strategizes remuneration agendas and assesses and improves divergent awards under the company’s remuneration plans. Since the establishment of the committee, the company’s compensation rates have been increasing significantly. The company’s compensation strategy is also divided into different clusters. Every cluster gets compensated based on the job and tasks they complete. Top managers get the most rewards, and new employees are offered various programs to help them acquire personal development and encourage them to stay in the company for a long time. Rewards offered to new employees include gift packages like transportation to their areas of residence. One of the company’s compensation and benefits strategies is performance-related rewards. Performance-related benefits focus on rewarding employees based on their performance. These benefits are structured to create a conducive work environment. A review by one of the company’s employees stated that “Great benefits, environment, people, and energy. The pay is good and everyone there is willing to help you improve on your personal and work goals. Would recommend” (Indeed, 2021).

Apple has established a performance-based reward system that deals with cash bonus awards annually to allow the executive officers to get compensated for achieving the annual performance goals set by the company. The level of bonuses continues to increase based on changes in the company’s goals. For instance, the maximum bonuses for executive officers increased to 200% and 400% in February. Currently, the company employees get more than 20% bonuses based on store reviews. Employees receiving a 20% raise get a bonus of eighteen more dollars per hour. The company also emphasizes long-term equity rewards and the preference for creating long-term value for shareholders over annual operating outcomes. The company also offers intrinsic rewards for the employees by giving them a feeling that their work contributes to changing the universe. This can be seen in the statement, “The people here at Apple don’t just create products-they create the kind of wonder that’s revolutionized entire industries. It’s the diversity of those people and their ideas that inspires the innovation that runs through everything we do, from analyzing technology to industry-leading environmental efforts. Join Apple and help us leave the world better than we found it” (Jobs at Apple, 2021). This statement encourages employees who want to use their knowledge and capabilities to be innovative so that they can be part of the company’s contribution to creating change. This explains why the company has various innovations that have enabled it to maintain a competitive advantage over the years.

The second type of compensation and benefits strategy used by Apple company is the cafeteria reward system. This system includes enabling employees to choose a different combination of perks and benefits within a specific range that should best meet their needs. Apple offers numerous benefits to employees. The company introduced the pers and benefits because of the perception that “they are losing out on good candidates to Google and other similar forms, or that they are having a harder time recruiting and retaining people. These perks may be a way to potentially narrow that gap” (Wharton University of Pennsylvania, 2012). The company also introduced perks and benefits to attract talented employees. The main benefits are health and insurance, flexible spending accounts for dependent daycare and health care, long-term care insurance, paid holidays and vacations, and short- or long-term disability coverage. However, there are complaints relating to health benefits based on a comment based on the company’s employee on Comparably stating that “Everything about the benefits Apple offers is pretty amazing, except their own health and wellness staff, who are not good” (Comparably,2018). Employees are also entitled to an annual 25% discount every time they buy an iPad or iPod. The company has also established a culture where employees can get $500 off a Mac every three years and $250 off an iPad. Mothers working in the company are also given four weeks of paid leave before giving birth and fourteen weeks after giving birth. Additional benefits include discretionary benefits that are offered to attract new talent and retain existing employees.

Apple company’s compensation and benefits strategies have remained effective in motivating employees for a long time because they are both market and internally consistent. For instance, compensation and benefits strategies are designed based on the decision on how to offer pay that is equitable, fair, and competitive with prevailing market rates. It also incorporates offering employees the incentive to improve their performance. The company additionally ensures that its benefits are consistent with the external market, are cost-effective, and consistent with compensation government requirements and policies. The main aspect that is put into consideration to achieve a balance between external competitiveness and internal equity. Apple company’s compensation and benefits strategy is competitive, enabling the company to attract more creative and qualified employees who also have an entrepreneurial mindset. The compensation structure is also based on location, specialty, and time. Employees are paid hourly, thus motivating them to work more hours to receive more pay. The highest-paying position in the company is Apple Genius. The high-end salary in this position is up to $49,000, while the low end is at least $32,000. Specialists receive an average of $11.64 per hour, but the pay varies based on location, experience, or qualification. The company’s compensation based on time is based on the CEO’s acknowledgment that time is an asset that should be used effectively. This fact is evident in his statement “My favorite thing in life don’t cost any money. It’s really clear that the most precious resource we all have is time” (Agyei, 2016 ). Therefore, deadlines are put in place, and employees get benefits based on how often they meet the deadlines.

Conclusion

Apple company is one of the companies with a well-established compensation and benefits structure. As shown in the discussion above, Apple company’s compensation and benefits strategy consists of performance-based rewards and the cafeteria reward system. The use of a compensation committee has also enabled the company to maintain proper compensation measures that meet the employees’ needs and abide by compensation laws and regulations. The acknowledgment of employees as part of the company’s growth has also enabled the company to set favorable compensation and benefits systems, promoting increased productivity among employees, which in turn contributes to the enhanced performance and success of the company.

References

Agyei, S. (2016, December 7). “My favorite things in life don’t cost any money. Medium. https://medium.com/@steveagyei65/my-favorite-things-in-life-dont-cost-any-money-5ff8ea10ce4b

Bernadin. (2007). Human Resource Management: An exponential approach (4th ed.). New York: McGrawhill Irwin.

Comparably. (2018, February 13). Apple compensation employee reviews. https://www.comparably.com/companies/apple/reviews/compensation

Indeed. (2021). Working at Apple: 8,161 reviews | Indeed.com. Job Search | Indeed. https://www.indeed.com/cmp/Apple/reviews

Jobs at Apple. (2021). Product quality engineer. https://jobs.apple.com/en-ie/details/200253291/product-quality-engineer

Mollah, A. (2015). A Critical Analysis of Employee Job Satisfaction: A Case Study of Apple UK. European Journal of Business and Management, 7(7).

Snell, S., & Bohlander, G. W. (2007). Human Resource Management. Thomson.

Wharton University of Pennsylvania. (2012). IPerks: Apple, like others, takes steps to woo employees. Knowledge@Wharton. https://knowledge.wharton.upenn.edu/article/iperks-apple-like-others-takes-steps-to-woo-employees/

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Apple’s Compensation and Benefits

Construct a comprehensive research paper on the Compensation and Benefit Systems implemented at Apple. The paper will follow APA guidelines, be in Word format, have at least five pages of discussion in length, be double-spaced, and should also include a cover page and a Reference page with at least five sources. There should also be AT LEAST FIVE parenthetical internal citations within the text of your paper (this means you must have quotes, statistics, etc… backed up with a source from the References page). So make sure you use a variety of sources, not just one source. For example, at least two peer-reviewed sources, such as journals (i.e., Academy of Management), business sources such as Harvard Business Review, Wall Street Journal, Forbes, etc. Peer Reviewed Sources are Articles that are written by experts and are reviewed by several other experts in the field before the article is published in the journal to ensure the article’s quality. It is not just hearsay or a casual conversation you had with a workmate. It could be a journal, periodical, paper, or anything written by an “expert.” There is a search feature in the online Stafford Library – you can select peer-reviewed articles by checking the box. Concentrate the paper on the Compensation and Benefit Systems implemented at a major company in the United States.