Employees working in a company normally receive compensation for services they render to the company. While most individuals assume that the salary payment and compensation are the same, the reality is that compensation is more than just a payment package. The compensation plan currently being used by the Apple Company has had some far reaching effects. The compensation implemented by Apple has enhanced the competitive advantage of the company. Apple Executive compensation strategies for the named executive officers consist of the three packages. The long-term equity awards, these are given in form of limited stock entities. The other package is cash compensation. This compensation package is normally based on the performance cash incentive. Performance-based cash incentive compensation has been instrumental in helping Apple attain its business goals, objectives and fair in light of company’s robust financial performance comparative to that of its peer group.
The third compensation plan involves base salaries. Every year, the selected compensation committee determines the officers’ compensations. This compensation committee is made up of the entirely independent directors. The main goal of the executive or employee compensation platform is to attract and retain a gifted, entrepreneurial and an imaginative team of executives. These officials will help in providing leadership to ensure the company’s success in competitive and dynamic markets. This can be justified by the latest financial reports prepared by the finance department in the Apple Company. In the year 2009, Apple Company’s revenues grew to 36.5 billion USD. This was a positive increase of 4.1 billion USD in comparison to the previous year. This was a 12% increase. Net income increased to 5.7 billion USD in the year 2009. This was an 18% or 870 billion USD increase prior to 2009. Additionally, the number of company’s total stakeholders increased drastically by 857%. These changes can be said to have resulted from the compensation strategies employed by the corporation.
Apple Company has confidence in that the executive compensation strategy has been the critical tool towards its achievement. This has made executive compensation strategy remain the most desired by the compensation committee. The performance-based cash incentive as a compensation strategy compensates a named executive officer for any remarkable work. Such work or tasks include achieving or realizing some financial objectives or goals that are set by the compensation committee. The compensation committee sets these financial goals every year. The committee bases these goals on the operating and revenue objectives in the Apples internal strategic or business plans (Bhatia, 2010). According to the compensation committee, the compensation plan that is currently in use can be attributed to the company’s strategy. The compensation so far has enticed exceptionally entrepreneurial, talented and creative employees. As a result of this, these employees have provided dynamic and successful leadership that is highly competitive in the market. However, unless the company and employees are in a broad agreement, it will result in the ill frustration of the employees causing a standpoint and friction in relationship between the employer and employees. Apple can thus use compensation strategy as a way of binding effectively with its large amount of both permanent and temporarily employed workers.
Apple Internally and Market Consistent Compensations Systems
Compensation in the Apple Company involves making the decision on how to provide a pay that is fair, equitable and competitive with current market rates. It also involves providing employees with incentive to improve the performance, and ensuring that the benefits are cost effective and consistent with external market, compensation policies and government requirements (Myers, 2000). The central feature in achieving an internal and external market consistent compensation system is through maintaining a balance between internal equity and external competitiveness. Employees normally view their pays as justifiable when it is fair in comparison with their peers in the other companies. The internal equity is achieved when reimbursement programs are applied consistently, vertically and horizontally in a company. Achieving the external market competitiveness depends on comparative data obtained from the same labor market.
Comparatively, Apple Company maintains a compensation strategy that is quite competitive. This has enabled the company to attract a more qualified, creative and entrepreneurial staff. Apple compensation plan is based on the performance of the employee. In the Executive compensation plan, executives who bring more success to the company receive more compensation. The compensation strategy is internally managed by a compensation committee that is composed of the independent directors. The committee decides how much a top employee receives in form of compensation.
The Current Pay Structure Used By Apple Company
Since compensation and salary practices heavily influence the turnover, recruitment and employee productivity, The Apple Company has come up with a favorable pay structure that competes effectively with what the others offer. The Apple Company uses a structure that is based on time, specialty, location and the Apple concierge positions inside the Apple store. On a time basis, Apple pays its employees hourly. Employees are compensated hourly for work done at the company. On the basis of specialty, Apple looks at career attainment of an employee to determine his payment.
Apple Specialist Pay
A specialist position at Apple Company attracts an average of $11.64 per hour. This pay rate normally ranges from $9 to $16. This difference in the range is brought about by the location and the qualification or experience of the employee. A specialist pay structure at the Apple Company is not a flat salary. However, specialists become eligible to standard benefits in case they work in the company for a specified time. A specialist at Apple may be someone who is specializing in Mac Software.
Apple Genius Salary and Pay Structure
Apart from the Apple Store manager, the Apple Genius is one of the highest paying positions at the company. Apple Genius Average Salary is $37,954. Apple Genius low end salary is $32,000. In most cases, this is normally the starting salary for the Apple Genius in medium or smaller cities. Apple Genius High-End salary is $49,000. A high end genius with this pay structure will normally work in a major city like San Francisco or New York. Apple Genius hourly wage ranges between $14 and $25 per hour.
Apple Store Concierge Pay
The hourly rate pay of an Apple store concierge position is from $10 to $14 per hour. The average pay of a store concierge is $11.34.
Apple Company Recognition of Employee Contributions
Apple Store Bonuses
Apple employees are entitled to bonuses, and they range from $200 to $5,000 per year. These bonuses are given in form of cash, stock or even Apple Hardware. The bonuses are remunerated on four times a year. Apple Company also uses its hardware as a bonus. Each employee can be given an iPhone. Employees in Apple are also appreciated by word of mouth.
Apple Store Employee Discounts
Apple Company has also a discount program. It acts like a payment structure although it recognizes the employee’s efforts. The discount is approximately 10% discount on purchases on anything in the Apple Store. Once in a year, Apple employees receive a 25% discount on purchases of any equipment of hardware. Additionally, the Apple Company gives three vouchers to all its employees per year. Employees can transfer this voucher to a family member. This voucher will have a 15% discount.
Improving the Effectiveness of the Discretionary Benefits Provided By Apple Company
Discretionary benefits are benefits that are offered by the company at its own discretion. In the Apple Company, these benefits are offered in order to retain and attract more employees to the company. The least benefits offered by the Apple Company include travel and transportation cost, moving expenses, burial and funeral cost. The benefits that are normally critical to the Apple employees include health care benefits, vocation training programs, retirement pension, educational leaves and sick leaves. All these discretionary benefits are crucial to the Apple Company employees, but retirement pension, health care benefits, vacation training programs, educational leave benefits and sick leave benefits are usually more beneficial in the improvement of the economic life of the Apple Company’s employee. Discretionary benefits offered by the Apple Company are usually essential to the company since they promote employee attraction and retention. However, various aspects of the Apple discretionary benefits program need to be improved in order to enhance employee welfare as well as the service delivery to the Apple Company.
Building a Positive Relationship
Apple Company needs to offer discretionary benefits that promote a positive relationship with the employers. This is because the current discretionary benefits program is not all inclusive and rewarding. When employees are provided with a rewarding benefits package, they normally develop a positive attitude towards the. In addition, this will enhance retention of the best minds in the Apple Company, rather than leaving simply because of being under compensated and undervalued. The Apple Company needs to review the provisions of the current discretionary benefit program to ensure that they provide a package that proves to be useful to the employees. For instance, when an applicant is a young married couple, it would be recommendable for the company to appreciate the family health through child care coverage package.
Likewise, the Apple Company has been found not to offer similar discretionary benefits as their competitors, such as Google and IBM. This might be a negative aspect of the Apple Company with regard to the employee’s attraction and retention. Therefore, the Apple Company needs to identify a benefit that appears to be the norm in the industry such as health care benefit. Providing such benefits will ensure that the company remains ahead of its competitors. In addition, the Apple Company needs to identify a package that touches the most crucial aspect of the employee and advertise it in the media. In the process, the reputation of the company will be boosted in the labor market.
Offering Discretionary Benefit Package Wide-Range of Choices
Since it is difficult for the Apple Company to anticipate the type of benefits package that their employers need, it is recommendable for the Apple Company to develop a benefit plan that will capture the employee perception of value. Therefore, the Apple Company needs to provide discretionary benefits that provide an array of choices to the employees instead of the traditional fixed benefit plan. Furthermore, the Apple Company needs to provide an open-ended benefits plan that will offer the employees an opportunity to choose a plan that will best suit their situations; they should also be allowed to personalize the plan that will suit their preferences. For example, an employee may want to have a choice for vision and dental care: therefore, it should be possible for him to select a plan that he desires and the amount of deductibles.
In addition, Apple employee should be provided with a more friendly education benefits especially when advancing in a field that will enhance their productivity in the company. The Apple Company needs to introduce new wellness plans in their health benefits. These benefits need to cover things such as smoke quitting, stress management and weight loss. This kind of plan is beneficial to the Apple Company as it will lead to the development of the psychologically and emotionally balanced employees who will operate as a team.
Comparison of Employer-Sponsored Retirement Plans and Health Insurance between Apple and IBM Company
Apple Company has one of the best employee insurances and retirement benefits for its employees. However, the health and insurance benefits normally depend on the position, location and the number of years a person has worked with the company. Apple Company provides a health and life insurance cover for all the employees and their spouse, same-sex or domestic partner. Approximately 65 percent of all the full-time employees are covered with the Apple Insurance plan. The same insurance policy is anticipated to be replicated to the part-time employees. In addition, part-time personnel that have been working with the Apple Company for more than a year normally receive a full medical insurance cover as a part of their compensation. In comparison, IBM Company provides a health insurance benefits portfolio that strongly supports the employee’s wellbeing and preventive care. IBM Company provides a comprehensive coverage that meets a wide range of medical care. It also provides a fundamental protection against the cost incurred during a critical illness and injury. The IBM Company insurance plan also provides protection against death, serious injury and includes disability and life insurance benefits.
The Apple Company provides a pre-tax accumulation that provides additional revenue to the retirement benefits provided by the company. This normally increases the take home pay for the employees. The Apple Company usually allows withdrawal of retirement benefits upon the retirement, termination of employment, death or permanent disability. In contrast, the IBM Company retirement program normally helps the employee to build a future financial security through the capital accumulation and retirement saving programs that are well designed in IBM Company. In general, the IBM retirement and insurance program are usually designed to help the employee to build a strong and firm financial foundation for meeting future needs such as income protection, health need and other personal interests. The insurance and retirement package for IBM Company is well structured and planned to meet the wishes of the employee. The Apple Company needs to adopt the IBM benefits programs in order to streamline its programs.