Training and development program in Apple Inc.

Apple has a very well planned training and development program. Its employee are
one of its key advantages, especially in the research and development department and
marketing department. Effective training and development programs are an essential
component of a learning environment that can improve the Apple Inc.’s ability to attract
and retain employees with the skills and competencies needed to achieve results for the
benefit of the company. Training and developing new and current staff to fill up new roles
and work in dissimilar ways will be a decisive part in the endeavors of the company to
meet its transformation challenges. Ways that employees learn and achieve results will
also continue to transform how Apple Inc. does business and engage or force the
employees in further innovation and improvements in line with its objectives.

“To help drive change from the bottom up, we engage directly with workers to teach
them new skills and raise awareness of their rights. And we train managers on their
responsibilities under the Supplier Code of Conduct — and beyond” quoted in
Apple’s official website: www.apple.com/supplierresponsibility/education-and-
development.

Apple believes that finding and correcting problems is not enough. Apple-designed
training programs are used to educate suppliers and employees about local laws, their
rights as workers, occupational health and safety, and Apple’s Supplier Code of
Conduct. Today around a million people in Apple’s workforce knows their rights
because they went to work for an Apple supplier (Apple, 2012).

Apple worked with Verité and the Fair Labor Association — two internationally
recognized organizations dedicated to human rights to evaluate the quality of their
social responsibility training (Apple, 2012). Their assessments showed that Apple-
mandated training had increased workers’ knowledge and awareness of their
rights(Apple, 2012)In their website they put a claim to continue improving their
supplier training programs by working with these organizations.
In addition to training the workers, they also train supervisors and managers on their
responsibilities to those workers. For example, they require management from
suppliers in Malaysia and Singapore to attend a two-day workshop that covers their
Prevention of Involuntary Labor standard along with best practices for labor agency
monitoring, direct hire processes, and onsite management of foreign workers (Apple,
2012)

Apple has also expanded professional development opportunities for workers through
Supplier Employee Education and Development (SEED) program. This Apple-
designed program offers workers classes in topics such as finance, computer skills,
and the English language(Apple,2012) In addition mentioned in their official website,
SEED programs partners with Chinese universities to allow workers to earn associate
degrees. The program began as a pilot at Fox Conn’s facility in Shenzhen and
expanded to all final assembly sites in 2011. Over 60,000 workers have participated,
and their evaluation of the program shows that participants have higher morale and
are promoted more often than other employees (Apple, 2012). Their entire final
supplier has onsite e-learning centers like this one in Shanghai.

Apple audits their training session to follow up and measure their performance. For
example, in 2011 they conducted training sessions on preventing underage labor for
200 suppliers. This year, their audits of final assembly suppliers found no cases of
underage labor. While the organization is encouraged by these results, Apple claims
that they will continue regular audits and go deeper into their supply chain to ensure
that there are no underage workers at any Apple supplier (Apple, 2012)

All the training and development programs and policies mentioned above cited from
Apple’s official website clearly shows that they have a highly integrated and
controlled training and development program. Apple is intensively dedicated to their
training and development program to bring out and sustain the competitive advantage
they enjoy from their employees and suppliers. As Apple frequently produces new
products requiring expertise in completely different industries (i.e. computers, music
devices, media sales, and telephony), its employee skill set requirements change faster
than at almost any other tech firm. Apple follows a strategy to make their employee
‘self- reliant’ ( Sullivan, 2011). The reason behind it is that providing target
competencies and prescribing training can weaken employee self-reliance, an attribute
problematic in a fast-changing environment. Employee ownership of development
encourages employees to continuously learn in order to develop the skills that will be
required for new opportunities. For example, Apple’s sales team do not receive any
specific training on how to sell their product, they are empowered and Apple believes
the organizational culture and structure will shape them in the right track. (Suvillan,
2011). This practice is certainly unconventional and uncommon in the retail
environment.

An author, Dr. Suvillan (2011) stated in his article that Apple has a team environment.
Although many teams are forced to operate in isolation, that actually helps to build
team cohesion. The competition between the different development teams is also
intense, but that also helps to further strengthen cohesion. Employees in team learn
from each other and it helps in their development. Apple praises and motivates
innovation and creativity the most in employees as it can be seen by seeing their
training and development programs and policies.
Compensation and Benefits Program

Apple has a compensation committee to structure Apple’s compensation packages and

policies. The purpose of the compensation committee is to prepare compensation
packages and incentive programs, review them and modify them as needed. Also
administer them as they are empowered by the board. (Apple, 2011) The committee
members are set by the board of directors and are empowered to take any internal or
external counseling, advice or opinion at any time, can call any officer for committee
meeting and are empowered in many other ways. (Apple, 2011).

By the standards of retailing, Apple offers above average pay stated in an article of
Steve Denning (2012). Well above the minimum wage of $7.25 and better than the
Gap, though slightly less than Lulu lemon, the yoga and athletic apparel chain, where
sales staff earn about $12 an hour( Denning, 2012).

The company also offers very good benefits for a retailer, including health care,
contributions and the chance to buy company stock, as well as Apple products, at a
discount (Denning, 2012). The particular benefits package of Apple will depend on
position, location, and years with the company for every employee. There’s plenty of
flexibility built in for employees and their families. Taken from Apple’s official
website (2012), below are some offered benefits for eligible employees.

 Health and life insurance

 Flexible Spending Accounts (for health care and dependent day
care)
 Short- and long-term disability coverage
 Long-term care insurance
 401(k) Plan with company match
 Employee Stock Purchase Plan
 Financial education seminars
 Tuition assistance
 Paid vacations and holidays
  Product discounts
 Personal and family counseling
 Wellness programs
 Onsite fitness center

Executive Compensation

Apple’s goal for its executive compensation program is to attract and retain a talented,
entrepreneurial and creative team of executives who will provide leadership for the
Company’s success in dynamic, changing and competitive markets. To accomplish
this goal, Apple seeks to align the goal with the long-term interests of Apple’s
shareholders (AAPL, 2010). The Compensation Committee oversees the executive
compensation program and determines the compensation for Apple’s executive
officers. Apple believes the compensation program for the named executive officers
was instrumental in helping the Company achieve strong financial performance in the
challenging macroeconomic environment in 2009(AAPL, 2010).

In 2009, the Company’s revenue grew to $36.5 billion, representing an increase of

$4.1 billion or 12% over the prior year. Net income also increased to $5.7 billion in
2009, an increase of $870 million or 18% over the prior year, and the Company’s
gross margin in 2009 was 36.0%, up from 34.3% in the prior year. The Company’s
strong earnings and operational excellence helped drive a cash balance at the end of
2009 of $34 billion, an increase of $9.5 billion over the prior year (AAPL, 2010).
Apple believes their executive compensation program has driven the executives to
take the company this far. Therefore, no significant changes were made to the
executive compensation program in 2009 as mentioned in AAPL, 2010. The
executive compensation program for the named executive officers, other than
Mr. Jobs, consists of three elements:
 Long-term equity awards in the form of RSUs
 Annual performance-based cash bonus awards
 Base salaries.
Apple continues to rely primarily on long-term equity awards in the form of RSUs to
attract and retain an outstanding executive team and to ensure a strong connection
between the executive compensation program and the long-term interests of the
Company’s shareholders (AAPL, 2010).

From the article found in American Association of Professional Landmen

(2010), Apple places less emphasis on total cash compensation than on long-
term equity awards. Accordingly, the design of the Company’s annual
performance-based cash bonus program for the named executive officers
remained the same in 2009 as in 2008, with target bonuses set at 50% of base
salary and maximum bonuses set at 100% of base salary. As noted below, these
target and maximum bonus opportunities are substantially lower than the range
commonly provided by peer companies.

Apple follows performance based pay system. In 2009, as stated in AAPL’s executive
summary, the Compensation Committee of Apple awarded cash bonuses equal to
100% of the base salary for each of the named executive officers, other than Mr. Jobs
(who does not participate in the bonus program), because the Company’s adjusted
sales and adjusted operating income for 2009 exceeded the maximum performance
goals established by the Compensation Committee. Each of the named executive
officers, other than Mr. Jobs, also received an increase in base salary following a
review of each named executive officer’s performance, the Company’s financial
results and the competitive environment. This was the first salary increase for the
named executive officers since 2006 (AAPL, 2010).

Compensating employees fairly

Fair compensation is an important part in any compensation and benefits plan. What
is fair in any particular case will depend on the circumstances. It was seen as unfair
both to outsiders and to many Apple’s employees is that Apple is paying its CEO the
maximum that it can afford, while paying its retail employees the minimum possible
for Apple. This can be said because clearly, Tim Cook would stay with Apple for
compensation much less than $570 million, while clearly many employees leave
because of the low compensation (Denning, 2012).

For the last ten years, Apple has taken advantage of the strong demand for its jobs,
particularly in today’s weak economy when Apple is seen as a “cool” place to work
stated by David Denning (2012), it has no difficulty replacing those workers that it
disposes of. It has apparently made a tactical decision that the costs of selecting and
training new workers are worth the turnover rate that its low pay generates (Denning,
2012).

A screenshot taken from www.glassdoor.com shows some salary structure of Apple’s

compensation program:
Whether this will prove to be wise in the long term remains to be seen. In the long
run, the advantages of a steady committed workforce should generally outweigh any
short-term gains that can be made by pushing workers hard, paying them little and
disposing of them when they burn out.
Reference:

Suvillan, J 2011, ‘Talent-management-lessons-from-apple’, part 4. [online] available

at: http://www.ere.net/2011/10/03/talent-management-lessons-from-apple…-a-case-
study-of-the-worlds-most-valuable-firm-part-4-of-4/

Apple, 2012. Supplier Responsibility [ online] available at:

http://www.apple.com/supplierresponsibility/education-and-development.html

Denning, D 2012, ‘Apple's Employees Have A Hell Of A Ride’ 2012 [online]

available at: http://www.forbes.com/sites/stevedenning/2012/06/25/apples-
employees-have-a-hell-of-a-ride/

http://www.glassdoor.com/Salary/Apple-Salaries-E1138.htm?
sort.sortType=BP&sort.ascending=true

AAPL, def 14a, 2012 ‘ Executive Summary’ [online] available at:

http://www.wikinvest.com/stock/Apple_(AAPL)/Executive_Summary