Apple Inc., commonly called Apple, was established in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne and has experienced significant successes since its creation. The organization currently enjoys the status of a multinational company, with its products and services used and admired by customers globally (Mukul et al., 2021). As a company in the technological industry, Apple manufactures various innovative products and services that are prestigious and satisfy the needs and demands of customers in the continuously evolving technological world. Apple products comprise iPhone (various models), iPad tablets, Apple watches (wearable smartwatch and fitness tracker), Apple TV, Apple Airtag, and Vision Pro. Apple services include Apple iCloud, Apple TV+, Apple Pay, and various media under the iTunes store, Apple Music, Apple Books, and other services. The organization develops and sells software products like the macOS and iOS operating systems and productivity and creativity apps, including Final Cut Pro and Logic Pro, which provide a seamless user experience to its customer segment, catering to their diverse needs and preferences. Apple is based in the technology industry as it manufactures consumer electronics, software, and hardware. It is committed to developing unique and user-friendly products and services that distinguish it in the highly competitive technology industry (Richardson, 2020). Apple stores are located globally to facilitate easy access by customers from various markets. The company raised revenues of 394,324 million US dollars and hired 164,000 full-time employees in the 2022 financial year, a 6% growth compared to 2020 (GlobalData n.d). Apple is building and nurturing an inclusive workforce representing the community it serves, as it enhances diverse representation at all organizational levels, thus promoting an inclusive culture, equitable pay, and equal opportunities for all employees and its recognition and reputation as an attractive employer. Apple’s number of employees may change in the future due to organizational growth and development, restructuring strategies, and economic conditions. Therefore, Apple’s focus on quality and attention to detail in its operations has increased customer loyalty and pushed it to the top of the technological industry.

2.0 Types of Long-term Incentive Programmes Practiced by Apple

Apple, like every organization globally, recognizes the significance of attracting and retaining top talent. The company has adopted various long-term incentive programs to cater to the needs and interests of the employees while promoting its growth and success. Apple’s long-term incentive programs comprise stock options, restricted stock units, performance share units, and employee stock purchase plans, which motivate and reward employees for their continuous contribution to the organization’s operations and success.

2.1 Stock Options

Stock options allow employees to buy the organization’s stocks at a predetermined price, also called exercise or strike price, and are among the long-term incentives used by the company. This program allows employees to purchase Apple shares at their lowest exercise price. With the organization’s stock values growing, the employee can significantly benefit from the rising stock value (Cappelli et al., 2020). The significance of this program is that it undergoes a vesting period, which motivates employees to stay in the organization over a long time to enjoy the full value of their stock options, thus aligning the employees’ and shareholder interests while promoting a sense of ownership and commitment among the employees.

2.2 Restricted Stock Units (RSUs)

Apple’s Restricted Stock Units promise to provide a certain number of shares of Apple stocks to employees in the future, depending on the completion of a vesting period. Employees do not buy the RSUs but get them as a compensation package, as RSUs undergo the vesting conditions and are tied to the employee’s tenure with the organization or the attainment of the performance goals (Beatty, 2021). The values of RSUs are directly associated with the organization’s stock prices, developing a direct relationship between the individual and organization performance. When employees receive their promised RSUs, they obtain ownership stakes at Apple, thus promoting a sense of loyalty and shared success.

2.3 Performance Share Units (PSUs)

Apple uses the Performance Share Units to motivate and reward employees according to performance. The PSUs are linked with particular performance metrics like operational objectives, financial goals, and strategic milestones; thus, employees get a predetermined number of shares when they achieve the set performance goals. Apple Company adopts PSUs to keep the employees involved in corporate success by focusing on the set goals and objectives that provide opportunities for the long-term growth and success of the organization. The company’s strategy links rewards with performance; thus, the employees and staff prioritize the strategic target and attaining key milestones.

2.4 Employee Stock Purchase Plan (ESPP)

Apple uses the Employee Stock Purchase Plan to blend employee interest with its success over a longer period, as the plan allows employees to buy discounted Apple stocks at a proportion lower tan than the market value. The ESPP is functional on a regular offering duration through which employees use a percentage of their salary to buy the shares at discounted rates (Hudson, 2021). The employees can sell their shares immediately; however, most prefer keeping them to benefit from long-term organizational performance.

Therefore, the company’s long-term incentive programs are key aspects of the compensation strategy. They are developed to attract, retain, and motivate highly skilled employees, thus promoting commitment and organizational success by keeping them engaged.

3.0 How the incentive programme is used to motivate the employees in the organization

3.1 Stock Options

Stock options are influential in motivating employees in the organization by offering them a sense of ownership and aligning their interests with those of the stakeholders. It provides a vesting duration that enhances employee commitment to the organization by encouraging them to stay (Paterson & Welbourne, 2020). For example, an employee who was offered stock options years ago and bought them at a lower strike price is currently gaining significantly as Apple’s stock value keeps growing with time. Through stock growth, employees are encouraged to contribute to the organization’s long-term success. Besides, when an employee gets a stock option with a five-year vesting period, they may be encouraged to be in the company for the whole period, thus gaining from the rise in stock value and increasing their loyalty and commitment to Apple’s long-term objectives.

3.2 Restricted Stock Units (RSUs)

RSUs give employees ownership without them making upfront payments with vesting conditions linking employees’ success to the organization’s stock performance. For example, when an executive at Apple is offered RSUs linked to particular performance goals, when the goals are attained, they get the promised RSUs (Cheng et al., 2022). The direct relationship between performance and reward encourages the employees to be involved in the organizational success. Another instance is when an Apple employee gets RSUs having a 6-year vesting duration. The longer period promotes a sense of loyalty and motivation as the employee recognizes that by staying in the organization for a longer time, they will gain from the RSUs, thus aligning the organization’s long-term growth and interests.

3.3 Performance Share Units (PSUs)

PSUs link employee rewards and particular metrics, thus keeping them aligned with organizational goals and objectives, promoting a performance-based culture, and encouraging employees to prioritize key objectives. For example, when Apple sets financial targets, the employees are given PSUs connected to achieving the objectives; thus, when the organization meets or surpasses the financial targets, the employees get a predetermined number of shares, thus motivating them to participate actively in the company’s financial success. Also, when Apple develops a new product line, and employees are offered PSUs connected to the successful product launch, attaining the strategic milestones like the marketing and sales target leads to the distribution of PSUs, thus motivating the employees to contribute to the company’s strategic success.

3.4 Employee Stock Purchase Plan (ESPP)

The ESPP is developed to integrate corporate performance and employee financial interest over the long term with the chance to buy discounted stock, promoting employee involvement and a sense of ownership (Paterson & Welbourne, 2020). For example, employees involved in the ESPP allocated a section of their salary to purchase Apple stocks at discounted prices, thus offering financial benefit and promoting a shared interest in the organizational performance; hence, they have an increased likelihood of actively in the corporate success to due to their investment in the organization stock. Another example is based on long-term investment in which an employee who purchases Apple stocks through the ESPP keeps them; they will be encouraged by the long-term organizational success as their financial achievement is directly related to Apple’s continuous growth.

Therefore, the company’s long-term incentive programs are efficiently developed to motivate employees by aligning their interests to organizational success, with examples demonstrating how the programs enhance employee retention and loyalty and promote Apple’s long-term goals. Apple’s strategic objective to promote inclusive and motivated employees through incentives is seen through its continuous growth and success in the highly competitive technology sector.

4.0 Suggestions to Improve Incentive Programme for Apple

4.1 Integrate Employee Ownership Plans (EOPs)

Apple should implement Employee Ownership Plans (EOPs), inform Employee Stock Ownership Plans (ESOPs), and direct equity ownership to improve its available incentive programs. The EOPs give employees a direct and tangible stake in the organizational ownership and decision-making processes, which is not offered by the stock options and RSUs. Adopting EOPs builds a sense of ownership among the corporate employees, promoting an in-depth connection and dedication to Apple’s long-term success. Various companies have experienced significant success by adopting the EOPs, as the employees feel motivated, engaged, and highly productive as they become the co-owners, hence responsible for organizational performance and adhering to the corporate goals and objectives. Employees who have a sense of ownership promote a positive workplace culture and environment as they become actively involved in the organization’s journey (Rasool et al., 2021). Besides, the EOPS is an influential employee retention technique as it encourages staying in the organization for a longer duration as co-owners are interested in its long-term success and profitability, therefore investing much time and effort into the organizational growth. The EOPs are also distinguished as an employee who appreciates and values their employees, thus a strategic complement to Apple’s incentive programme promoting a culture of shared success and partnerships.

4.2 Adopt Performance bonuses tied to innovation

According to Bereznoy et al. (2021), Apple is globally recognized for its innovative potential, hence the need to integrate performance bonuses tied to innovation besides the existing incentive programmes. The company has experienced significant success due to innovation demonstrated through its products and services; thus, aligning performance bonuses with key innovative milestones will encourage creative thinking among the employees and provide innovative ideas. Apple can create a comprehensive relationship between individual innovation and financial rewards, building a culture of continuous improvement and forward-thinking by implementing performance bonuses tied to innovation (Seidl, 2022). The company can motivate employees to participate in technological advancement by linking performance bonuses to aspects like patent filed, successful product development and launches, or involvement in research and development successes, therefore aligning with its core values and promoting the significance of employee contribution to Apple’s success. In most instances, employees become products of their organization and develop a sense of ownership when they are recognized and awarded for their innovative contribution, increasing their motivation and commitment to the organization. Apple can also increase its competitive advantage in the fast-changing technology industry by adopting performance bonuses linked to innovations, as it indicates to employees that their creativity and innovation efforts are appreciated, pushing them to keep innovating, thus positioning Apple ahead of the curve.

4.3 Promote educational assistance programs

Apple Company should improve its incentive programs by integrating detailed educational assistance programs as a critical approach to enhancing its commitment to innovation and employee development. The company can incorporate academic support programs, including tuition reimbursement or collaboration with educational institutions, thus improving employee motivation and job satisfaction as they feel appreciated and supported in their career development. Also, Apple must foster continuous learning and skill development to keep its workforce aware of the latest technological advancements and industry dynamics, as skill development programs help employees upgrade their skills. In contrast, continuous learning opportunities allow them to remain creative and able to contribute to organizational success in the ever-changing technology industry. Apple can attract top talents and increase employee retention by providing educational assistance initiatives as individuals seeking job opportunities value employers or organizations who invest in employee growth and development (Fernandez et al., 2022). Therefore, the educational assistance programs emerge as a strategic move aligning with organizational values and increasing employee satisfaction, retention, and Apple’s success by ensuring organizational stability.

4.4 Implement sustainable performance metrics

Apple should implement sustainable performance metrics among its incentive programs as it aligns with its corporate commitment to environmental sustainability. The company can adopt metrics associated with minimizing the environmental effects of its products, enhancing sustainable energy use and efficiency and efficiency, attaining sustainability certifications, and demonstrating its commitment to corporate social responsibility, thus establishing a positive brand image and reputation while significantly motivating employees to contribute to Apple’s sustainability goals and objectives actively. There is a growing significance of environmental awareness in the contemporary corporate environment, with organizations and businesses embracing sustainability by adopting sustainable metrics into the strategic program as a strategic move. With Apple being a multinational company prioritizing innovation, recognizing and embracing the significance of sustainability illustrates its leadership in dealing with broader societal issues (Patil et al., 2021). Besides, employees are increasingly pursuing purpose-centered work. They are attracted to organizations firmly committed to environmental sustainability, a trend that can be exploited by adopting sustainable performance metrics, thus attracting and retaining talented individuals with similar sustainability values and promoting a workforce deeply entrenched in the organization’s goals. Therefore, implementing sustainable performance metrics will contribute to Apple’s continuous success and strengthen its position as a corporate social responsibility organization and a futurist organization while serving as an influential strategy for employee motivation and engagement.

5.0 Summary

Apple is a multinational American company established in 1976 and based in the technology industry. The company has a diverse product and service portfolio, with its products and services available globally. Apple has an inclusive workforce of 164,000 employees and robust financial performance. The company has adopted various long-term incentive programs such as stock options, restricted stock units (RSUs), performance share units (PSUs), and employee stock purchase plans (ESPPS), with each program being crucial in employee motivation and retention by integrating a sense of ownership and the performance tied rewards. The task outlines how the four programs are relevant to Apple’s goals and objectives while enhancing employee loyalty and commitment to Apple company. Apple can adopt various suggestions recommended in the assignment, such as adopting Employee Ownership Plans (EOPs) to create positive employee relationships and commitments, linking performance bonuses to innovational achievements, thus demonstrating Apple’s commitment to innovation, integrating educational support programs to facilitate employee development and continuous learning and implementing sustainable performance metrics to show Apple’s commitment to sustainability while building a positive brand reputation and attracting talented employees. If Apple comprehensively implements the suggestions, it will solidify its incentive programs and succeed in the highly competitive and dynamic technological sector.

References

Beatty, A. L. (2021). Getting Pay Right: Perceptions of Fairness and the Influence of Transparency and Trust (Doctoral dissertation, Georgetown University). https://repository.library.georgetown.edu/handle/10822/1062664

Bereznoy, A., Meissner, D., & Scuotto, V. (2021). The intertwining of knowledge sharing and creation in the digital platform based ecosystem. A conceptual study on the lens of the open innovation approach. Journal of Knowledge Management, 25(8), 2022-2042. https://www.emerald.com/insight/content/doi/10.1108/JKM-10-2020-0769/full/html

Cappelli, P., Conyon, M., & Almeda, D. (2020). Social exchange and the effects of employee stock options. ILR Review, 73(1), 124-152. https://journals.sagepub.com/doi/abs/10.1177/0019793919827934

Cheng, A., Hasan, I., Xie, J., & Zheng, L. (2022, February). Signaling Before the Deadline: Management Earnings Forecasts and Stock Performance Evaluation Dates. In 2020 Canadian Academic Accounting Association Annual Conference, the 2020 American Accounting Association Annual Conference. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4275562

Fernandez, J. A., David, E. M., & Chen, S. (2022). Attracting and Cultivating Innovative Talent. In Innovative to the Core: Stories from China and the World (pp. 173-196). Emerald Publishing Limited. https://www.emerald.com/insight/content/doi/10.1108/978-1-80455-081-620221007/full/html

GlobalData (n.d). Apple’s Number of Employees (FY2017 – FY2022). https://www.globaldata.com/data-insights/technology-media-and-telecom/apples-Number-of-employees/

Hudson, C. (2021). Employee Ownership and Moral Hazard: How Broad-Based Equity Sharing Can Lower Agency Costs and Reduce Inequality (Doctoral dissertation, University of Denver). https://search.proquest.com/openview/27bd0a57acb6478b9f13ca3bb3ff6e5b/1?pq-origsite=gscholar&cbl=18750&diss=y

Mukul, K., Rao, K. N., & Kundu, S. (2021). Individual Freedom Vis-à-Vis Integrity of the State: A Study with Reference to Apple iPhone. Emerging Economies Cases Journal, 3(1), 16-20. https://journals.sagepub.com/doi/abs/10.1177/25166042211027425

Paterson, T. A., & Welbourne, T. M. (2020). I am therefore I own: Implications of organization‐based identity for employee stock ownership. Human Resource Management, 59(2), 175-183. https://onlinelibrary.wiley.com/doi/abs/10.1002/hrm.21985

Patil, R. A., Ghisellini, P., & Ramakrishna, S. (2021). Towards sustainable business strategies for a circular economy: environmental, social and governance (ESG) performance and evaluation. An introduction to circular economy, 527-554. https://link.springer.com/chapter/10.1007/978-981-15-8510-4_26

Rasool, S. F., Wang, M., Tang, M., Saeed, A., & Iqbal, J. (2021). How toxic workplace environment effects the employee engagement: The mediating role of organizational support and employee wellbeing. International journal of environmental research and public health, 18(5), 2294. https://www.mdpi.com/1660-4601/18/5/2294

Richardson, C. (2020). The Possibilities are Limitless: A Case Study of the Best Practices of User Experience for Apple Inc. https://digitalcommons.calpoly.edu/expindsp/24/

Seidl, M. (2022). Corporate Digital Responsibility: Stimulating Human-Centric Innovation and Building Trust in the Digital World. In Liquid Legal–Humanization and the Law (pp. 55-81). Cham: Springer International Publishing. https://link.springer.com/chapter/10.1007/978-3-031-14240-6_4

Part II

1.0 Advantages of employee benefits to employees

Employee benefits promote a positive work environment and contribute to employee well-being, as they complement employee salary, thus offering extra value that improves job satisfaction and loyalty.

Employee benefits help organizations attract and retain top talents. For example, Google is among the organizations recognized for employee-based incentives like site fitness centers, gourmet meals, and vital parental leave, thus attracting highly skilled professionals and encouraging positive work culture. Employees become highly committed to the organizations and stay there for longer durations when they feel their needs are considered, thus helping the company minimize turnover expenses and remain stable (Kurdi & Alshurideh, 2020).

Employee benefits enhance job satisfaction and motivation. An organizational example is Salesforce, which provides employee benefits like health and wellness programs, flexible work initiatives, and professional development opportunities, making employees feel appreciated and satisfied with their organizational responsibilities. When organizations and businesses support employees in their individual and professional lives, their motivation and engagement in their organizational duties increase, thus enhancing their productivity and performance (Riyanto et al., 2021).

Employee benefits boost the overall wellness of the employees. Various organizations, such as Microsoft, emphasize the mental health of their workforce by offering counseling services, employee wellness plans, and mental health days, which improve the employee’s overall quality of life and promote a healthy and resilient work workforce. Employees will likely experience lower stress levels and increase their commitment, creativity, and organizational resilience when the organization considers their wellness (Vercio et al., 2021).

Employee benefits promote a positive organizational culture. Organizations and businesses like Costo are recognized for their dedication to providing fair wages, comprehensive health plans, and a supportive work environment, thus encouraging a sense of community and loyalty among the employees as they feel the organization is committed to their welfare. Therefore, employee benefits foster a positive organizational culture that attracts potential employees and encourages a collaborative and cohesive work environment that promotes employee collaboration and support for one another (Arghode et al., 2022).

2.0 Opinion on the Group Incentive Plan

I have a positive opinion regarding group incentive plans as they effectively enhance teamwork, partnership, and attaining common goals. The group incentive plans reward a team or department according to collective performance metrics or attainment of particular goals and objectives, thus aligning the individual effort with the group’s success and promoting shared responsibility and cooperation. For example, a marketing department can be rewarded collectively for attaining the annual marketing targets, thus encouraging partnership instead of competition among the team members. Group incentive plans can also build morale and motivate employees through collective celebrations, developing a sense of unity and teamwork (Leonova et al., 2021). The group incentive plans should be developed and implemented carefully through accountability measurement metrics, equitable reward distribution, and clear communication goals, thus promoting fairness and avoiding potential issues. Besides, proper planning ensures the plans encourage healthy competition and appropriate individual contribution to the organization. The group incentive plans should be periodically evaluated and adjusted to align with the changing organizational objectives and employee trends.

References

Arghode, V., Lathan, A., Alagaraja, M., Rajaram, K., & McLean, G. N. (2022). Empathic organizational culture and leadership: conceptualizing the framework. European Journal of Training and Development, 46(1/2), 239-256. https://www.emerald.com/insight/content/doi/10.1108/EJTD-09-2020-0139/full/html

Kurdi, B., & Alshurideh, M. (2020). Employee retention and organizational performance: Evidence from banking industry. Management Science Letters, 10(16), 3981-3990. http://growingscience.com/beta/msl/4116-employee-retention-and-organizational-performance-evidence-from-banking-industry.html

Leonova, I. S., Pesennikova-Sechenov, E. V., Legky, N. M., Prasolov, V. I., Krutskikh, I. A., & Zayed, N. M. (2021). STRATEGIC ANALYSIS OF THE MOTIVATION ON EMPLOYEES’PRODUCTIVITY: A COMPENSATION BENEFITS, TRAINING AND DEVELOPMENT PERSPECTIVE. Academy of Strategic Management Journal, 20, 1-11. https://www.academia.edu/download/78834099/Strategic-analysis-of-the-motivation-on-employees-productivity-a-compensation-benefits-training-and-development-perspective-1939-6104-20.pdf

Riyanto, S., Endri, E., & Herlisha, N. (2021). Effect of work motivation and job satisfaction on employee performance: Mediating role of employee engagement. Problems and Perspectives in Management, 19(3), 162. https://www.academia.edu/download/69819906/PPM_2021_03_Riyanto.pdf

Vercio, C., Loo, L. K., Green, M., Kim, D. I., & Beck Dallaghan, G. L. (2021). Shifting focus from burnout and wellness toward individual and organizational resilience. Teaching and learning in medicine, 33(5), 568-576. https://www.tandfonline.com/doi/abs/10.1080/10401334.2021.1879651

Compensation Management Assignment

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Part I

1.0 Introduction

2.0 Types of Long-term Incentive Programmes Practiced by Apple

2.1 Stock Options

2.2 Restricted Stock Units (RSUs)

2.3 Performance Share Units (PSUs)

2.4 Employee Stock Purchase Plan (ESPP)

3.0 How the incentive programme is used to motivate the employees in the organization

3.1 Stock Options

3.2 Restricted Stock Units (RSUs)

3.3 Performance Share Units (PSUs)

3.4 Employee Stock Purchase Plan (ESPP)

4.0 Suggestions to Improve Incentive Programme for Apple

4.1 Integrate Employee Ownership Plans (EOPs)

4.2 Adopt Performance bonuses tied to innovation

4.3 Promote educational assistance programs

4.4 Implement sustainable performance metrics

5.0 Summary

References

Part II

1.0 Advantages of employee benefits to employees

2.0 Opinion on the Group Incentive Plan

References

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