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Process of internal equity establishment

Discuss about the Performance and the Incentive and Sorting Effects of Pay Secrecy.

Apple is a multinational organization of American origin which operates in the technology industry. The company was founded in the year 1976 by Steve Wozniak, Steve Jobs and Ronald Wayne. Apple was mainly developed for the purpose of building personal computers and was incorporated with the name of Apple Computer Inc. in the year 1977 in the month of January. The company then started building other major products like, iPod, iPad, Apple Watch in the hardware section and macOS, iOS, iTunes, iLife, iWork in the software section (Apple. 2018). Apple also provides many types of online services which are appropriate for the customers of the company all over the world.

The organization is known in the industry for various innovative products that are provided to the customers. The employees are most important part of the innovative capabilities that are built by the company in the industry. The report will be based on the ways by which the company aims at developing the compensation system that is designed for the employees. The fairness of the pay system of Apple will also be discussed in detail in the report (Samnani & Singh, 2014).

The effective levels of compensation that is provided to the employees needs to balance two major factors that are, labour related costs and the motivation provided to workers. The management needs to take into consideration both the internal equity and the external equity for the purpose of developing a plan for the pay and compensation that is to be provided to the employees. External equity is related to the comparison that is made between the pay structures of other companies (Belogolovsky & Bamberger, 2014). Internal equity on the other hand refers to the fairness that is ensured for the pay that is provided to the employees who are a part of similar types of jobs. The culture of the organization affects the internal equity. The company and the management is responsible for maintaining a fairness in the pay that is provided to the customers.

Apple Inc. has been successful in maintaining the system of equal pay provided to all types of employees. The company is filled with white men and the report based on diversity that has been presented by Apple Inc. depicts that they have been able to reduce the wage gap that was present between the employees earlier. The organization has been diverse in the recruitment of new employees and ways by which the payment system is managed is also quite unique in nature. The company has faced many issues regarding the payment that is provided to the employees. The gap was evident in the amount of wages that were provided to the employees belonging to different backgrounds and groups (Gerhart & Fang, 2015). The hiring related steps that are taken by Apple have also changed a lot recently. This has thereby led to the changes that have been made in the pay system of the company. The pay rates of women and the employees belonging to the minorities have also changed a lot in the recent times.

Ways of determining the pay for employees

Apple had released a diversity based report in the year 2016 for the purpose of depicting that the company has been successful in establishing a system of equal pay for the companies. The pay equity that has been established by the company has been developed in the last few years. The demographics of the company have also changed which now includes individuals from different parts of the society (Gupta & Shaw, 2014). The salaries, the bonuses and annual grants that are provided to the employees have been improved in the recent years. The company has also changed its hiring based policies and is hiring more women as compared to men. The pay system is similar and the employees are provided equal amounts. The organization has now achieved same wage rates for both men and women. Around 32% of the total global workforce of Apple Inc. in the year 2014 (Shields et al., 2015). The gaps that were present in the salaries provided to employees have been addressed by the management of the company. The hiring process of the company is mainly based on the innovative capabilities of the new hires. The workforce that has been created with the help of this hiring process is quite diverse in nature. The hiring based policies of the company have thereby been most important method that has helped in the creation of pay based system of the company (Hou, Priem & Goranova, 2017).

Apple has been a challenging place to work for the employees as they are always surrounded by the best people in the industry. The high standards that are set by the company and its innovative product and services offering has been the main reason behind the stress that has been created in the organizational processes. However, the disadvantages and stress that are related to the work process in Apple Inc. are outweighed by the advantages and the perks that are provided to the employees. The high salaries that are offered by the company is one of the major reasons that has been able to provide the employees with highest levels of satisfaction (Lee & Steers, 2017).

The employees have always termed as the overall salary and the perks of the company as great. The pay scale of the company is revised every year for the purpose of creating a perfect environment for the employees. The work environment in Apple is much more mature as compared to the other technology based companies in the industry. The employees also receive huge discounts on the products of the organizations like, iPhone, MacBook Air and other major products. The current and other former employees of the company are able to receive discounts on the products. The employees are able to gain huge amounts of knowledge from the others in the organization as they are working with the best in the industry (Ljungholm, 2015).

Benefits received by employees

 The organization holds a “beer bash” for the employees once in a while which is a popular program that has been designed for increasing their productivity. Apple provides various commuting options to the employees which include shuttle services. Stipends are provided to employees so that they are able to cover the expenses that are related to their travel to various areas. The employees have a lot of freedom in their working process so that they are able to provide their innovative ideas in various areas of the management. The benefits of Apple are provided even to the part time workers of the company. The most important benefit that is provided to the employees is based on the knowledge that is gained by them within the organizational processes. The “Apple University” provides high level training to the employees which is used for their future benefits (Malik, Butt & Choi, 2015).

The flexible retail positions of Apple are able to provide huge number of growth related options to the company. The company has arranged for the good food for the employees which is provided to the employees at subsidized rates. The employees are able to be a part of an organization which has shown huge growth and is still growing. The favourite perk of the employees that has been found out after research is the fast career growth that is provided by Apple (Pohler & Schmidt, 2016). The training that the employees receive from the management is loved by them. The female employees are provided with more than four weeks of paid leave. The beer bashes and the gym credits that provided by the employees are an important part of the entire compensation based program that is provided by Apple. The new hires and the part time employees are also provided with many types of benefits like paid offs and many more (Nyberg, Pieper & Trevor, 2016).

The compensation based program that has been designed by Apple is effective for the employees. The employees are quite happy with the training related opportunities that are provided to them by the company. The new recruits are also provided with comprehensive training related programs that help them to enhance their qualities. The reviews that have been generated by the employees have depicted that the training process of Apple is a huge perk. The employees are provided with a status symbol by the various positions in the company. The impact that the work of these employees have on the world has acted as a perk for the employees. The reviews of the employees have helped in depicting that the employees of Apple are proud to work in the company. The innovative products and the development of new categories of products have been a reward for the work process of the employees (Paillé et al., 2014).

Effectiveness of the compensation program

The new joinees of the company are attracted and enticed with the help of various benefits like, concert tickets, holiday packages, free beer and gym benefits. The new employees are impressed by these benefits and this is effective for their work process and motivation levels. The parental leaves that are provided by the management has also been able to create a positive environment for the employees. The focus that the company has on the wellness and health of the employees with the help of gym credits has been an attractive measure by the management. The parties and events that are organised by Apple in a regular basis is an important benefit that helps the employees to become more productive (Pandey, Schulz & Camp, 2018).


Highly ineffective


Slightly ineffective

Slightly effective


Highly effective

Holiday packages


Gym benefits


Training opportunities


Figure 1 – Source – Created by author

The major recommendation that can be provided to Apple is to increase their diversity management based activities so that they are able to manage the employees belonging to all parts of the society in an effective manner. Apple has faced issues regarding the interference of the management in the life of employees. This can be reduced so that the benefits that are provided to the employees can be effective for increase in their productivity. The company can further provide huge opportunities to the employees by training them for their future career growth in the industry.


The report can be concluded by stating that the employees of the company are the most important part of entire operations. The management of the company thereby needs to design proper compensation based schemes for providing the highest levels of motivation. Apple has been able to design successful policies for the employees. The benefits and compensation that are provided to employees of Apple have been a major reason behind the loyal employee base of the company.


Apple. (2018). Retrieved from

Belogolovsky, E., & Bamberger, P. A. (2014). Signaling in secret: Pay for performance and the incentive and sorting effects of pay secrecy. Academy of Management Journal, 57(6), 1706-1733.

Gerhart, B., & Fang, M. (2015). Pay, intrinsic motivation, extrinsic motivation, performance, and creativity in the workplace: Revisiting long-held beliefs. Annu. Rev. Organ. Psychol. Organ. Behav., 2(1), 489-521.

Gupta, N., & Shaw, J. D. (2014). Employee compensation: The neglected area of HRM research. Human Resource Management Review, 24(1), 1-4.

Hou, W., Priem, R. L., & Goranova, M. (2017). Does one size fit all? Investigating pay–future performance relationships over the “seasons” of CEO tenure. Journal of Management, 43(3), 864-891.

Lee, T. W., & Steers, R. M. (2017). Facilitating effective performance appraisals: The role of employee commitment and organizational climate. In Performance measurement and theory (pp. 75-93). Routledge.

Ljungholm, D. P. (2015). Pay-for-performance in the Public Sector. Geopolitics, History and International Relations, 7(1), 90.

Malik, M. A. R., Butt, A. N., & Choi, J. N. (2015). Rewards and employee creative performance: Moderating effects of creative self?efficacy, reward importance, and locus of control. Journal of Organizational Behavior, 36(1), 59-74.

Nyberg, A. J., Pieper, J. R., & Trevor, C. O. (2016). Pay-for-performance’s effect on future employee performance: Integrating psychological and economic principles toward a contingency perspective. Journal of Management, 42(7), 1753-1783.

Paillé, P., Chen, Y., Boiral, O., & Jin, J. (2014). The impact of human resource management on environmental performance: An employee-level study. Journal of Business Ethics, 121(3), 451-466.

Pandey, A., Schulz, E. R., & Camp, R. R. (2018). The Impact of Supervisory Support for High-Performance Human Resource Practices on Employee In-Role, Extra-role and Counterproductive Behaviors. Journal of Managerial Issues, 30(1).

Pohler, D., & Schmidt, J. A. (2016). Does Pay?for?Performance Strain the Employment Relationship? The Effect of Manager Bonus Eligibility on Nonmanagement Employee Turnover. Personnel Psychology, 69(2), 395-429.

Samnani, A. K., & Singh, P. (2014). Performance-enhancing compensation practices and employee productivity: The role of workplace bullying. Human Resource Management Review, 24(1), 5-16.

Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., ... & Plimmer, G. (2015). Managing Employee Performance & Reward: Concepts, Practices, Strategies. Cambridge University Press.

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