NO PLAGIAIRISM PLEASE

Running Head: COMPENSATION PRACTICE 1

COMPENSATION PRACTICE 9

William E. Thomas III

Professor R. Jarrett

BUS409 Cmpnstn Mgmt

Fall Quarter 2015

(Apple Tech Company)

Company description

Apple Inc is an American multinational technology company whose headquarter is located in Cupertino, California. The company deals with designing, manufacturing and develops mobile devices, personal computers as well as other technology devices. It also sales a variety of computer application software, peripherals, services, provision of networking solutions as well as other third party digital applications and contents. Some of the products produced by the company includes iPad, iPhone, iPod, Mac, Apple TV, professional software applications, iOS operating system, iCloud with a wide range of accessories and support services (Bohlander, & Snell, 2010). Apple Company was founded by Steve Jobs and Ronald Wayne in April 1976. Currently, this is the world’s second largest information technology company with reference to the company’s revenue, and the leading in total assets as well as world’s third largest in mobile phone manufacturing company.

Apple’s compensation strategies

Apple’s employees are well compensated when compared to other related companies. This has been the reason as to why there is high employee performance, who are highly motivated to do their work. Some special compensation strategies are being used at Apple Company as a way of motivating the employees. The company has pays an average basic salary of $108,483 per annum for its employees (Denning, 2012). This is the best package when compared to what other companies pay their employees.

Other than a high basic salary, Apple Company rewards its employees with a recognition bonus of the salary which ranges from 3 to 5%. This bonus package is awarded to those employees who have completed their work effectively (Bohlander, & Snell, 2010). In addition to bonuses, they are also offered gifts in form of free iPhone which also accounts to employee’s compensation strategies that are put in place by the Apple Company as their compensation strategies that attract top skilled employees and is able to retain these employees.

Other than bonuses, Apple Company offers opportunities to the employees to take up additional education as well as development programs. This is being offered in line with Steve Job’s mission which required the employees to be innovative, creative and focused towards growth by coming up with devices that will be highly liked by the people.

Best practices being applied at Apple Company

Employee motivation is the key factor that that has contributed to the growth and expansion of Apple Company. This has also been aided by some of the best selective practices that the company engages in to ensure that employees are well compensated and satisfied with their work.

One of the best practices that are applied in this company is benefits to the employees. The common benefit is discounted prices of the products that they buy from the store (Carter, & Goldsmith, 2005). This is a motivation to employees as they feel recognized as the employees of the company and also feel a sense of belonging which every employee would want to get. Employees are allowed to buy items from the company at a reduced discount of about 30 to 50 % of the original buying price of that item.

Another best practice that is applied at Apple Company to the employees is ensuring that they have a better working condition. This came in after the company faced a controversial corporate social responsibility issue at one of its international stores in China. It was allegedly reported that the employees faced a problem with working environment (Denning, 2012). Following this scandal, the company has ensured that there is good working conditions for its employees. This includes offering spacious laboratories and workshops as well as providing sufficient training to all of the employees so that they may not easily cause accidents that may harm the company’s employees in a devastating way.

In addition to this, the company also provides health care insurance package to all of its employees. This is also considered as a best practice as through such offers, employees are more motivated to work extra mile so that to ensure that the company’s goals are achieved easily as they are planned and executed.

Compensation related challenges faced by Apple

Despite a good record in compensation strategies used by the company, there are other compensation related challenges that are being experienced. The most common one is the complains from the marketing employees who have raised concerns about the volume of work they engage in the amount of payment they receive (Carter, & Goldsmith, 2005). Most of them claim that they are being underpaid, since they do numerous amount of work which is not consistent with the amount that they receive at the end of the month.

How Apple applied compensation practice to determine positive or negative impact to the company and its stakeholders

Some of the compensation strategies that are developed by the Apple Company have had both positive and negative impact to the company as well as its stakeholders. For instance, the company has been paying huge amount of salary to its top executives as well as the software engineers as a way of motivating them to work extra hard in the innovation as well as other responsibilities. Because of this compensation practice, the company has enjoyed high employee retention. It is by this that the company consider these individuals as the most important part of the company as they are the key drivers of innovation that the company is currently enjoying (Bohlander, & Snell, 2010). Due to this practice, the company has been able to benefit positively in terms of its improved quality of products. The high levels of innovation that has been facilitated by the company’s top management has as well improved the company’s ability in coming up with unique designs and also manufacturing some the products that meets the needs of the consumer. This has ensured the company high revenue from the sales of its products.

Another strategy that has had positive impact to operation of the company is its strategy in hiring young, energetic and the most talented people so as to join the company’s workforce. In general, this practice has enabled the company to achieve the most outstanding performance in the market as compared to other related companies (Denning, 2012). In addition to this, the employees who are the consumers have also positively benefited from this practice as they are able to work at the company for a longer period of time thus getting more dividends.

Other than the above practices that have had a positive impact to the growth of the company as well as its stakeholders, Apple Company has also engaged in some practices that has had negative impact to the company itself as well as to the entire stakeholders. For instance, the company’s compensation strategy has not received positive feedback from all of the company’s employees working in different departments. For instance, the company does not put into consideration the additional amount of work that is done and completed by some of the employees just in case there is an increase in demand from the consumers (Carter, & Goldsmith, 2005). For instance, there was a period when the company experienced a high demand of the iPhone devices. During this time, the employees were forced to spend extra time at the workplace. Despite this, the employees were not compensated for the extra time and work that had done (Satariano, & Suzuki, 2013). Following this incident, the families of the affected employees filed the case to sue the company. During the court ruling, it was ruled that the compensation strategy that was developed at Apple Company was very unfair to the employees who were working there and not being considered for the overtime work.

Following these complains among others, Apple Company’s image was tainted. It has serious negative impacts to the company as the company experienced a drastic drop in the total level of revenue (Satariano, & Suzuki, 2013). Despite this, the company can enhance its ability in order to meet all of the desired performance objectives. This can be achieved through adjusting its current compensation strategies as well as to motivate the employees. At the same time, the company can also encourage the employees to improve their productivity.

How labor laws, labor unions and market factors impact the company’s compensation practices

It was reported that Apple Company violated some labor laws in some regions where the company operates. For instance, in China, the company had to force its employees to work overtime due to increased demand of the products. When this information was received by the public, the company was forced to respond to this by adjusting the wage level of these employees so that its image is not tinted.

At the other time, there were allegation that the company’s workers union was not fully considered as legal. This was because, the union did not address issues such as advocating for the rights of the employees. This also affected the company so considerably as it has to come up with a more precise employee’s union meaning that there was an increase in the salary to cater for the labor union of the employees.

In addition to this, market factors have also forced the company to change its compensation practice. Some of these market factors includes changes in consumer tastes and their preferences. Other factors includes minimum wage levels in different regions and industry rates. Because of these factor, the company had to change its operations resulting to the adjustments of compensation practices.

Effectiveness of traditional bases for pay at Apple Company

It is evident that Apple structured its pay base in a manner that only its top executive are eligible to the bonuses. In addition to this, there was a fixed system in Apple Company whereby those who were on a long tenure could receive the benefits whereas the rest had to follow a wide pay plan (Satariano, & Suzuki, 2013). After this, the company came up with another compensation system which was a total reward approach. In this approach, both the variable pay and the base pay were given equal considerations.

Under the total reward approach, the company executives were awarded annual incentives whereas the level of the skills as well as knowledge was used to determine the grade of job as well as its pay (Carter, & Goldsmith, 2005). This can be an indicator that Apple Company had recorded an effective change or rather improvement in its continued efforts to change from the traditional pay system to a modern pay system.

To conclude, it is clear that Apple Company has significantly tried to help people understand the effect of technological changes. Since the beginning of the company, many people have been able to interact with different technologies thus being able to ascertain its significance (Bohlander, & Snell, 2010). The growth of Apple Company can be attributed to its ability to adopt the most effective compensation strategies as well as better practices that has painted a good image for the company. Despite this, the company is supposed to address some issues that may hinder the company from realizing full potential growth.

References

Bohlander, G. W., & Snell, S. (2010). Managing human resources. Mason, OH: South-Western Cengage Learning.

Carter, L., Ulrich, D., & Goldsmith, M. (2005). Best practices in leadership development and organization change: How the best companies ensure meaningful change and sustainable leadership. San Francisco: Pfeiffer.

Denning, S. (2012, June 12). Apple's Employees Have A Hell Of A Ride. Retrieved November 8, 2015, from http://www.forbes.com/sites/stevedenning/2012/06/25/apples-employees-have-a-hell-of-a-ride/

Satariano, A., & Suzuki, H. (2013, April 15). Apple Dominates Best-Paid as Board Retains Jobs Deputies. Retrieved November 8, 2015, from http://www.bloomberg.com/news/articles/2013-04-15/apple-dominates-best-paid-as-board-retains-jobs-deputies