Compensation Practice Assignment 1 - Training Proposal...

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Training ProposalPansy HobbsStrayer University
COMPENSATION PRACTICE2Compensation PracticeIntroductionCompensation Strategy is the plan set by the employer to reward the employee based on theposition and the type of work among other determinant company specific factors. It spans fromdirect to indirect compensation. Direct compensation entails monetary reward for the work donewhile indirect is simply the benefits that accrue from the employment for instance health andinsurance. However, it varies from company to company depending on its main activity, cultureand philosophy. I set out to research about Apple Inc. This research focuses on the compensationstrategies and practices, best practices applied, compensation related challenges, an analysis onhow compensation is applied and the negative and positive impacts on shareholders, how laborlaws, unions, and market factors impact on compensation practice and the traditional bases ofpay at the company.Apple Inc is a technology company located in Cupertino, California, United U.S. Thebranches are spread all over the world. The founders were Steve Jobs, Steve Wozniak andRonald Wayne. It had been incorporated in 1977. It deals with the design, manufacture andmarketing of personal computers, digital music players, software’s, networking services and thirdparty contents and applications. It's notable for its (i) radical technology. Some of itsmerchandise are; iPhones, iPads, iPods, Mac, Apple TV and iOS operating system. Apple sells itsproducts to giant and medium size enterprises, directly to consumers, government agencies,through online stores, wholesalers and retailers. It offers digital content and applications throughthe Mac App Store for Mac applications, Appstore for iphone and ipads applications, iBookstorefor electronic books and iTunes Store for music.
COMPENSATION PRACTICE3Apple's Compensation StrategyThe board of directors forms a committee known as the Compensation Committee. It ismade up of at least three members of the board who are independent in compliance withapplicable regulations which encompasses regulations of the NASDAQ Stock Market and rulesof the Securities and Exchange Commission. The members are prohibited from participation withany member of the compensation committee of another company. The committee establishesand modifies compensation and incentive plans and programs, reviews and approves awardsunder compensation and incentive plans and acts as administering committee for equitycompensation. It’s important to note that the majority of the employees at apple are the retailers.Apple does not declare its compensation strategies to the public, but reports and words byemployees indicate their compensation strategies. Apple has deemed to underpay its retailemployees compared the revenue they generate. Approximately an employee is given $25,000annually, compared to an estimate of $473,000 generated by each retail employee (Segal 2012).

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