APPLE COMPANY EMPLOYEE BENEFITS

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APPLE COMPANY EMPLOYEE BENEFITS

Apple Inc.’s Company Profile

Steven Paul Jobs, Ronald Gerald Wayne, and Steve Wozniak founded Apple Inc. (commonly known as Apple) on April 1, 1976, and the company has its headquarters at Cupertino, California. The company is the second-largest I.T. company in the world by revenue. The company is a major designer, manufacturer, and marketer of various portable media and communication devices, mp3 players, and personal computers. The company also sells various related software, peripherals, applications, services, third-party virtual material, and networking solutions. Products from Apple Inc. include Apple TV, iPod, Mac, iPad, iPhone, an assortment of professional and consumer software applications, iCloud, operating systems such as the OS X and iOS, and various support offerings, services, and accessories. Apple Inc. uses Mac App Store, iBooks Store, App Store, and iTunes Store to sell and deliver its applications and digital content globally. The company also uses retailers, wholesalers, value-added resellers, online stores, retail stores, and third-party cellular networks to sell its products.

Recently, workers at the company have raised grievances against Apple Inc. noting that they employees worked for long hours, and the work schedule was inflexible. A lawsuit filed by 20, 000 employees against the technology company indicated that the company denied employees the opportunity to have lunch breaks or rest breaks (Kerr par. 1). Through the anonymous website, Glassdoor, workers have also raised complaints against Apple Inc. noting that they received very low salaries despite working for long hours. Employees argue that Apple Inc. is notorious for paying its Chief Executive Officer the maximum remuneration possible while paying its junior employees the minimum amount that is legally possible. Critics indicate that the company has been exploiting workers because the existing strong demand for Apple employment among job seekers. Apple Inc. is a nice place to find employment, and the number of applicants to various posts is very high. This makes it easy for Apple Inc. to lay off some its workers after making them work hard for the company. The company does offer commission to its employees in the sales department although an unspoken pressure to sell to customers products that they have no intention of buying.

Although Apple Inc. is a prestigious organization to work in, its employees lament about the harsh working employees. Just like in other companies, individuals working on contract at the company are considered dispensable, and their future is uncertain. These individuals are forced to work for long hours with low salaries although their services are important. Consequently, Apple Inc. should consider appreciating the efforts of such individuals by offering all the medium and low-level employees performance bonuses and retirement plans. The company should also consider offering long-term contracts to employees to lower the rate of turnover in the company. Some of the workers’ benefits already expanded by Apple Inc. include enhanced donation matching program, education reimbursements, student loan refinancing, and increased parental leave. However, the company should increase the workers’ benefits to enhance the productivity of employees working under contract.

Statement of the Issue

Employee benefits are critical in enhancing workforce stability and fostering economic security of employees. Apple Inc. offers various employee benefits to its workers although the company is noted to sideline the low-level employees working in its production factories. A retirement plan makes employees feel appreciated by their employers, and this enhances their productivity. Offering a retirement plan and performance bonuses help in attracting and retaining talented employees. Although retirement plans and performance bonuses enhance the financial stability of employees, they are unrelated since performance bonuses enhance the current financial status of the workers while the retirement plans ensure that employees live comfortably after retirement or when incapacitated. Performance bonuses are easily manageable and flexible since the employers reward workers based on their performance that can easily be appraised against individual targets. Performance bonuses are also less expensive since they are not included in the fixed payroll costs like the retirement plans. However, Apple Inc. does not offer retirement plans or performance benefits to low-level employees working in its production factories in China and other parts of the world.

Literature Review

Future financial security of employees working on permanent or contract basis is crucial to an organization and individual workers. Most companies offer employees various workers’ benefits but fail to incorporate the retirement plans due to the costs involved. Apple Inc. provides several workers’ benefits to its mid-level and top management employees working on a permanent basis. However, the low-level workers who work under dangerous conditions in factories rarely receive rewards that are commensurate to the services they offer to the company. Critics of Apple Inc. note that the company usually exploits the workers in production factories since they are not offered good wages or receive health insurance. In situations where workers are harmed by exposure to dangerous chemicals, the company is noted to offer small amounts of money to cater for the hospital bills to prevent negative publicity. In 2009, Apple Inc. employees working at the Lianjian Technology factory in China were exposed to a toxic chemical, n-hexane, that was used in cleaning Apple’s touch screen products (Friends of Nature 6). Although the chemical increased the efficiency at the factory, it caused many workers to suffer from neurobiological problems, nausea, weakness in limbs, poor motor function, and fatigue. The company compensated the affected workers and recommended the use of the chemical in its production processes be stopped. However, the compensation offered was inadequate and cannot sustain the affected employees for long.

The damages caused by exposure to n-hexane are debilitating and lowers the productivity of victims. As Friends of Nature (7) point out, most of the affected workers left the company after receiving the money and signing an agreement noting that their injuries did not arise from working with Apple Inc. Although introducing the retirement plan for workers exposed to hazardous working conditions will not prevent them from acquiring various ailments, it will enable the workers to live better lives once they stop working for the company. The workers at Apple Inc. factories are also noted to work for longer hours although they receive low remunerations. The company should consider offering performance bonuses to such employees to motivate them at work. As previously noted, many people seek employment opportunities at Apple Inc. and this makes the company lax in ensuring the safety of its workers in its factories. The financial implications of introducing the retirement plan for contract workers are high, and this makes it challenging for the organization to introduce the plan for such workers.

Issue Analysis

Companies offer employee retirement benefits through supplemental individual savings plan, pension plans, or Social Security. Supplemental individual savings plans consist of different savings and investment alternatives that are tax-favored to encourage employees to save for their futures. Private companies create their own pension plans although the government exerts strict regulations on them to ensure organizations avoid misusing the pension plans. Organizations offer pension plans as defined contribution or as defined benefit.

Defined contribution plans use different saving techniques such as profit sharing, stock ownership plans, or money purchase plans. In the defined benefits plans, employees are guaranteed certain amounts of regular payments after retirement. The federal government controls the Social Security system where it taxes the employers and employees, and later offers regular payment to the employees when they become unemployed, incapacitated, or old.

Performance bonuses help in enhancing employee productivity and increasing an organizations output (Boeri, Claudio, and Kevin 127). The bonuses enhance workers’ identification with their organizations and helps align the with the organization’s operational objectives. Companies can take into consideration various factors such as individual performance, attendance, quality, profits, or customer service to determine the amount of bonus offered to the employees. Employers can provide performance bonuses through profit sharing and individualized bonus schemes. The profit sharing arrangement is easy to formulate and implement since employers reward workers equally regardless of the workers’ individual percentage of profit. Profit sharing helps in enhancing closeness between employees and their organizations. Individualized bonus schemes reward individual employees based on their performance and this increases competition among employees. Nevertheless, offering performance bonuses in large organizations with many employees is complex and results in high administrative costs. Some companies offer their employees shares instead of cash to reduce the costs incurred from the performance bonus schemes. However, individualized bonus schemes require more administration and management to determine an employee’s productivity. Finally, organizations can offer skills-based rewards where employees are encouraged to enhance their skills through additional training. After the training, the organizations reward the employees by offering them financial rewards or job promotions. Skills-based rewards ensure that the employees are productive and highly skilled.

Issue solutions

The low-level employees are critical to the success of the company, and Apple Inc. should consider rewarding its low-level employees to motivate them. The company should offer such low-level employees with manageable employee benefits such as performance bonuses and pension plans for contracted employees who work for five years and more. Low-level employees working in Apple Inc. production factories need recognition since they are also important to the success of the company. Performance bonuses such as individualized perks and profit sharing are practicable to the company since Apple Inc. does not have to generalize the employees who receive these perks. The company has the liberty of selecting specific departments to receive these perks based on their productivity and within the various departments, the company can select specific individuals to receive the benefits offered. In offering the retirement benefits, the company has the freedom of using either individualized savings plan or the pension plans to reward its employees. The individualized savings plan is simple because it involves personal savings made by the employees. This gives the company the ability to merge the individualized savings plan with the performance bonuses. In this case, the company can offer employees the opportunity of converting their performance bonuses either as profit sharing or individualized bonus schemes into stocks that grow with time.

Offering performance bonuses to employees enhances their immediate financial status and encourages them to work harder to receive more bonuses. Offering retirement benefits has the advantage of attracting and retaining skilled employees. Many current and potential employees consider retirement benefits packages as great incentives to accepting or maintaining their jobs. The retirement packages help in supplementing the retirement of employees and helps in ensuring that they live comfortably after retirement. Retirement packages also ensure that employees do not suffer due to incapacitation or injuries suffered as they discharge their duties. However, offering performance bonuses to employees may cause rivalry between employees and result in workplace conflicts. For instance, the underperforming employees may feel sidelined as their colleagues prosper, and this could result in situations where employees sabotage their colleagues. Offering retirement benefits plans increases an organization’s financial overheads particularly in instances where a company provides pension plans or contributes to the Social Security fund. In Apple Inc.’s case, most of the low-level employees are based in factories found in foreign countries where the company is not obligated to pay to social security funds or provide pension plans.

Solution and its implementation

Apple Inc. should offer performance bonuses and retirement benefits to its low-level employees in foreign nations. The company should appreciate the efforts of its low-level employees who are committed to the success of the company. The company should create low-level employee appraisal strategies to reward industrious employees particularly in foreign countries where American labor laws are not applicable. Although the high demand for Apple jobs has made the low-level employees dispensable, the company understands that the services offered by such employees are critical to the success of the company. The company is yet to create employment benefits to the low-level employees and the implementation of performance bonuses or retirement benefits packages to such employees. Performance bonuses and retirement benefits plans are specific since they seek to reward employees’ efforts. However, performance bonuses reward current efforts or employees while retirement benefits plans ensure that employees have comfortable futures after retirement or during incapacitation. The current solution recommended addresses the issue of rewarding low-level employees within Apple Inc. as previously identified. The company’s top management should demonstrate an appreciation for its low-level employees by either offering them performance bonuses, retirement benefits plans, or both.

In implementing the performance bonuses, the company can identify either specific departments or individuals who should receive these rewards. Based on the profits realized from various regional markets, Apple Inc. has the liberty of deciding various factories that should receive the rewards or individual employees who have demonstrated selfless commitment to the company. The company can stipulate specific individual targets that qualify employees in various departments for the performance benefits. For instance, the company could indicate the quantity of products that employees in the sales department should sell to qualify for the performance bonuses. In factories, Apple Inc. could indicate the number of iPhones or iPads that employees should process to earn performance benefits. The company has the freedom of selecting an appropriate retirement benefits plan for its employees at various employment levels. The effectiveness of the performance bonuses and retirement plans will be evaluated by studying the rate of low-level and mid-level employee turnover. High turnover rates will indicate that the proposed benefits plans have failed while low turnover rates will show that the benefits plans have succeeded. Apple Inc. has the resources to implement the performance bonuses and retirement benefits packages although it lacks the will to consider the future of its low-level employees.

 

Justification

Most of Apple Inc.’s production occurs in foreign countries while the administration of the company is based in Cupertino, California. The company offers its mid-level employees and executive officers attractive packages that include high salaries and retirement benefits plans. The low-level employees receive low wages and no retirement benefits packages or performance benefits. These employees toil for prolonged periods to ensure that Apple Inc. meets the demand of its products. However, many low-level employees are exposed to hazardous working conditions despite receiving low remunerations. The low-level employees are exposed to dangerous chemicals, work in poorly ventilated factories, and toil for long periods although their wages are low. The company needs to demonstrate its appreciation for the efforts of its employees and reward its low-level employees working in difficult environments. This will increase the motivation and commitment within its workforce especially in foreign nations. Apple Inc. should show that it is committed to the future of its employees by funding and investing in their retirement packages.

Reflection

Although low-level employees are rarely recognized or appreciated in many business organizations, they remain critical to the success of these organizations. Apple Inc. has its share of controversies regarding low-level employee maltreatment particularly in foreign nations. For instance, critics note that the company has failed to offer salaries that match the efforts offered by low-level employees in manufacturing plants. Such employees are exposed to various workplace hazards and some are disabled as a result of their services. However, many organizations ignore the plight of such employees and consider them dispensable. Offering low-level employees performance bonuses and retirement packages indicate organizational commitment to the wellbeing and future of their employees. Consequently, Apple Inc. should consider offering its low-level employees performance bonuses, retirement benefits plans, or both to demonstrate its appreciation for their sacrifices and commitment to the company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Works cited

Boeri, Tito, Claudio Lucifora, and Kevin J. Murphy. Executive Remuneration and Employee Performance-Related Pay: A Transatlantic Perspective. Oxford: Oxford University Press, 2013. Print.

Friends of Nature. The other side of Apple. January 20, 2011. Web. November 15, 2014. http://business-humanrights.org/sites/default/files/media/documents/it_report_phase_iv-the_other_side_of_apple-final.pdf

Kerr, Dara. Apple dealt new class-action lawsuit by 20,000 employees. July 22, 2014. Web. November 15, 2014. http://www.cnet.com/news/apple-dealt-a-new-class-action-lawsuit-by-20000-employees/