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Apple Inc Company

Apple Inc, which was formerly known as Apple Computer, Inc, is a company based in America, and it is recognized as the first company that is successfully dealing with personal computers, phones etc. Apple’s headquarters are located in Cupertino in California. Based on research, most people think that the success of Apple is from some factors which include the management skills of their CEO, their high-end products as well as their cooperate culture of being innovative and enthusiastic. Besides, Apple is considered to be focused on its employees by offering them the best benefit and compensation programs. These services have played a significant role in enabling Apple Inc to have a competitive advantage against its competitors. Currently, Apple has personified innovation, prestige, as well as the quality of their brands. Apple brands are among the most valuable brands globally, and it has become the most exciting place people can work in. Also, from research, Apple Company has over 10, 000 workers who are focused on developing the best brands on earth and they are more than dedicated to making the world a better place than they found it. This paper aims to discuss the compensation strategy of Apple and the practices Apple is applying related to the challenges they face.

The history of Apple

According to research, Apple Inc was developed in the year 1976 on April by Steven Jobs together with his friend Steve Wozniak. The two friends were dropouts from high school, and they lived in Silicon Valley. The first Apple product to be created as a computer which was established in the year 1976 at Steven Jobs home. Ever since they created the first computer successfully, they revolutionized the use of computers, how people use the internet and listen to music as well as how they communicate using mobile phones. In the year 1997, it was recorded that Apple’s share price was at the range of $3.30 million, which later on improved in the year 2011, and the share price was $339.87 million.

Apple Inc. Vision and Mission and Values

From their website, their vision is developing the best computing products which will, as a result, improve the experiences of different users including students and educators and also generate innovative professionalism using their original hardware, internet offerings as well as software (Scholar et al., 2012). Their mission, on the other hand, according to Apple’s website, is to create Macs which should offer the best experiences to their users globally. They also have a mission of creating an OS X, iWork, iLife and other exceptional software. Based on research, apple offers the most revolutionized music using their iPods as well as their iTunes which are located on their online stores. In fact, Apple has redesigned its mobile phones using their revolution App Store and iPhone, which is believed to be creating a future of computing gadgets, iPads as well as mobile media.

Apple’s Values, on the other hand, from their websites, states that they believe with the current technology, they should design products that are easy and not complicated to use. Also, Apple needs to have and control leading technologies in the products or brands they develop and get involved with markets where they can make a difference. Apple believes in declining a thousand offers to commendably focus on the things they find crucial to the Company. They also believe in cooperation and cross-pollination of their teams, which will play an essential role in developing products that are unique compared to others. Apple value does not involve them settling for less than excellence; they have the courage to accept and change when they are wrong.

Organizational Structure

The founder CEO of Apple was Steve Jobs who, unfortunately, passed on in the year 2011 on October 5, which forced the Company to look for a new CEO. Currently, Apple’s CEO is Tim Cook (Scholar et al., 2012). Apple has eleven directors under its CEO, who is believed to work closely under their manager. One the roles of Apple’s CEO is to run all managements which are under the Senior Vice Presidents of COO, iOS software, Global Communication, Software engineering, Design, Retail, Legal and Product Marketing. The CEO is also obliged to make decisions based on the Company, which should be followed by all the staff members of the Company.

Apple’s business goals and strategy

Apple has created innovative goals and strategies, and according to their report, the company is more than focused on creating the best experience using their products and services to their consumers. Their business strategy is to sway a unique ability which will create and scheme their personal operating systems, their software, hardware and any other service which is meant for offering their consumers with technological solutions(Scholar et al., 2012). The Company believes in a relentless venture in creating researches, advertising and marketing their products, which will play a significant role in their growth and profits on creative technologies or products.

Ethical Practices in Apple

The success of Apple is highly based on generating creative and high-end products as well as services and establishing veracity in their business world. Daniel (2011) also mentions that Apple has four leading principles which significantly contributes to their integrity, and that includes honesty, respect, defiance as well as privacy. The Company’s ethics, on the other hand, are their elements of business integrity, and they include the revelation of data and safeguarding intellectual assets.

Apple’s Compensation Program

Based on Apple’s Company perspectives, the company believes that employees are rewarded based on the work they deliver and as to that, the company needs to mainly focus on and make sure that compensation on their employees is efficient. Depending on the agreement between the employees and the company, the net outcome will be determined by the employee’s standpoint as well as resistance in the bond. Therefore, Apple can use that strategy as a method of effectively obligating on its large pool on both temporary and permanent employees. That can also be outlined by the Company and employees creating a legal document which will define the cost of compensation every worker in the company should get. The objective of Apple’s Company compensation strategy is to ensure that it retains and attracts talents, entrepreneurship, as well as having an innovative group of executives. That will also help the Company have a competitive advantage against its competitors and on the dynamic markets. The company also pursues to achieve that objective by aligning with long term benefits of the stakeholders of the company. Apple’s compensation strategy for executive officers and stakeholders is believed to benefit the company grow its financial performance, considering the challenges in the macroeconomic ecosystem.

In the year 2009, the revenue of Apple increased to 36.5 billion USD, which is an increase of 4.1 billion USD compared to the year 2008. Net income, on the other hand, rose to 5.7 billion in the year 2009, which was an increase compared to the previous year, considering that it ranged on 870 billion. The number of stakeholders in the year 2009 also improved to 857% and all of that is believed to be as a result of using the compensation strategies applied by the Company. The company believes that the current Apple’s achievements have been directly linked to their compensation strategy. The Compensation strategy remains preferable by the compensation committee. Compensation can be defined as forms of payment returns or any other tangible benefits or services that are received by employees. Compensation can be in the form of gifts, vouchers, or even money itself (Milkovich, Newman, & Gerhart, 2014). Apple’s compensation strategy involves three components, which include long term equity awards, annual performance-based on money bonuses as well as base salaries. A compelling example of Apple’s Compensation strategy is Mr Steve Jobs, who was a pioneer, and he would annually receive one million USD. Apple insists mainly on long term awards, and yearly performance and employees are awarded cash bonuses because the leading share of every executive compensation in total is directly related to Apple’s stock price (Apple Inc., 2015).

Apple practices Long Term Equity in the form of RSU since it believes that it is among the most effective ways of retaining employees as well as attracting new talents and having an executive team. Also, to relate to the executive’s interests, the RSU is the best strategy (Apple Inc., 2015). Also, Apple Company believes that the RSU program limits retention considering that incentives are generated for employee better performance, which also aligns with the interests of their executives. Basically, RSU improves or decreases Apple’s stock price. Basically, the RSU awards are given in every two years, and it is done without any shares vest.

How Apple’s Compensation Practice determines the positive and negative impact of the company and its stakeholders

To define the effect of a compensation strategy, it is best to analyse the organisation’s effectiveness. Apple’s compensation strategy has proved positive results considering the attitude of staff and also their behaviour and their effectiveness. Also, Apple Company uses committee which aims to determine their compensation plans annually. Apple Company has also modified to government techniques as well as approvals to examine the impact of its compensation strategy. The compensation strategy has been proved to be appropriate and a benefit policy to employees, especially the executive officers. Also, the company has severely performed a yearly performance and evaluation of employee performance and the chief executive as well as the governing board. It has been repeatedly proved that Apple’s compensation strategy is appropriate.

Challenges facing Apple

Based on research, some of the challenges facing Apple’s corporation include managing the cost of labour which is considered to be the most significant line in their budget. Apple Company has created outlets and considering that the economy is tight, they are set up to reduced funds. There is also an increased compensation battle in IT companies, and that is another contributing factor in the cost of labour.

How Laws, Labor Unions and Market factors affect Apple Compensation Strategies

Labour unions have a significant impact on how workers are compensated, and they operate mainly on making sure that workers are paid fairly. A good example is Cory Molly, a part-time worker in Apple Company, and he created a union for workers for them to support fair salaries and compensation for part-time employees. Cory makes 14 USD hourly, and he argues that if there were an active labour union, then part-time employees would get better compensation plans.

Market factors, on the other hand, impact compensation strategies by Apple Corporation. For instance, when there is an increasingly competitive data technology market, then the Company will, as a result, improve their finances. Annually, Apple evaluates its compensation strategy, which means that its employees benefit and as a result, their productivity increases, increasing the Company’s profits.

Traditional Bases effectiveness

The conventional pay model of Apple Inc gives consistency, and it is considered to be fair. However, the approach can, as a result, cause counter productiveness and also have poor outcomes. For instance, the arrangement of the merit pay practices to muddle the on-going staff training can cause the company significant costs. Basically, the merit pay strategy applies better in a consolidated control, especially on compensating strategies. The plan offers the Company a criteria-based approach on how they should analyse the Company should compensate its employee more than the required. Also, the policy assesses the general pay equity of the Company, and that is because all the work in practice depends on a single system. Therefore that enables the Firm to have an overview and compare the total pay of employees in the organization.

References

Apple Inc. (2013). Economic and fiscal impacts generated by Apple in Cupertino - current facilities and Apple Campus 2, (May). Retrieved from https://www.apple.com/pr/pdf/apple_economic_impact_on_cupertino.pdf

Apple Inc. (2012). Apple supplier code of conduct, 8. Retrieved from https://www.apple.com/supplierresponsibility/pdf/Apple_Supplier_Code_of_Conduct.pdf\nhttp://www.apple.com/supplier-responsibility/

Apple Inc. (2015). Form def 14A / proxy statement (definite). SEC Filings.

Cook, D (2014). Apple bolsters expands employee benefits. BenefitsPro. Retrieved from:http://www.benefitspro.com/2014/10/06/apple-bolsters-expands-employee-benefits

Daniels. (2011). Apple inc ’s ethical success and challenges. The University of New Mexico.

February, P. R. (2009). Contents (February).

Martocchio, J. (2014). Employee benefits (5th ed). Introduction to employee benefits (p.5). New York, NY: McGraw-Hill Irwin.

Milkovich, G., & Newman, J., & Gerhart, B. (2014). Compensation (11th ed). The pay model (p.13). New York, NY: McGraw-Hill Irwin.