Hrm531 Human Capital Management | Assessment Answers

The purpose of this assignment is to give learners experience developing a total rewards program. Students will assess the needs of an organization and discuss current trends.Students will present a total rewards strategy with recommendations for an organization. It is important to students to understand the decision points for compensation and benefits.

Discuss current trends shaping total rewards for employees in a business industry synonymous with the organization chosen for the assignment.

Evaluate current compensation plans for that business industry.

Summarize your data in narrative and table format showing diverse levels of responsibility and compensation.

Devise a Total Rewards Strategy with recommendations for the organization.

Include an analysis of legislation that may impact decisions made about compensation and benefits.

Include a one page survey that you would use as a resource to collect information from employees about the rewards they desire in a reward package.

Introduction:

The following report succinctly elucidates the compensation and reward strategy in Apple Inc. USA. Before a profound understanding of the topic, one needs to understand what the terms compensation, reward and benefit define in human resource sector. A business organisation manages and views the engagement of the employees through a designed policy and framework in order to ensure the pay and benefits of the employees.  These strategies are maintained in a written document that articulates the objective of an organisation pertaining to its approach towards motivation of the workforce.    Apple Inc. is one of the most esteemed companies in the world. Its innovation in every department- starting from operations, production, customer service, supply chain, to human resource- is highly admired.

The following paper is going to review the exact mode of reward and compensation in Apple Inc. entailing employee engagement and retention. The report is structured in the discussion of current trend of shaping the reward and benefits of the employees in a business industry, evaluation of current compensation plan in Apple Inc, evaluation of market, job and organisational data and recommendation of a planned strategy.

Trend in Existing Shape of Total Reward:

Most of the global organisations are found to use a strategic framework in order to ensure employee retention and engagement in order to strengthen their human resource entailing the strength in productivity and service. The most effective philosophy behind this framework has been Total Rewards. Though it sounds to be associated with the monetary benefit of te employee, it has much broader penetration. Total reward includes a holistic assistance from the employer in terms of health, well-being, working environment and personal and professional development opportunities (Gupta & Shaw,  2014).

The current trend of total reward is focused and implemented through following four models:

1. i) Compensation- it includes basic pay, merit pay and long term incentives
2. ii) Benefits- it includes health cover, pension and paid time-of
3. iii)Development- it includes learning and development, career opportunities, coaching and mentoring and stretch assignments
4. iv) Work-life Balance and Recognition- flexibility in time and location, time off in lieu and job sharing.

The current trend of such Reward includes performance reward, showcase of individual and team wise success and award for innovation. Most of the companies dealing with IT industries are known to be rewarding their employees with innovation and value awards. Adoption of this philosophy is one of the major key trends that the organisations are undertaking these days to engage their employees (Baker et al, 2015 ).

Current Compensation Plan in Electronics and Software Industry:

Electronics and software industry needs skilled and well-trained workers who can simultaneously work with innovation and incorporated ideas to create new product or software. Therefore, the organisations put immense effort to utilise the creative potential of the employees. In order to maintain organisational best practices, the employees are provided- rather facilitated with the rewards and compensatory plans. After 2008, the software and electronics industry has experienced rapid growth, which was more than 15%. Apple Inc. solely increased its growth up to 12% in 2009. Since globalisation has caused huge benefit for these organisations, they have revised their plan of compensation for their working staff. These basic plans have been- long term equity rewards, strengthening the connection between compensation strategy and financial performance and so on. According to the department of labour, Government of the United States, organisations from software and electronic industry are expected to adhere to the following compensation plans that have been effective since 1998 (amended in 2011): acquisition retention bonus, acquisition-signing bonus, affiliation of the employees, provision of annual base salary, distributions  upon death and disability and so on. Though most of these acts are associated with monetary compensations, the organisations carry out their plan beyond monetary level. (sec.gov, 2017)

Diverse Levels of Compensation:

There are different levels of compensation that is provided to the employees in an organisation. These levels are categorised into the followings:

Fig: Diverse Level of Compensation

Source: Created by the Author

Equity: 

Equity is also known as fairness.  This is one of the most effective compensation systems in an organisation (Zabojnik, 2014). There are three forms of equity:

1. a) Workplace Equity-
2. b) External Equity
3. c) Internal Equity

Organisational Strategy:

The organisations utilise number of components that are set to be addressed in order to ensure employee satisfaction. Organisational strategies are developed through some certain philosophies. As example, Apple and Microsoft have been using the theory of Maslow in order to read the psychological behaviour and need of the employees.  Organisational strategies are designed to develop a compensation philosophy followed by the compensatory components. These components are associated with the comparison among the best strategies in the market. Hence, the companies set to frame their compensation plan depending on the mode of such in the market. The employees frequent companies with the best compensation plan. To fixate the stability of the employees, the companies ought to take care of the entire market-trend of compensation (Samnani & Singh, 2014)

Legal Compliances:

Most of the organisations are highly instructed to abide by the existing structure in the labour market. These structures are the Government legislation of a country. US governments’ labour law has framed some specific compensation plan for the private companies to follow.  The organisations are expected to comply with these legislations, which are related to human rights, pension plans, employment insurance and so on. (Federal Agencies, 2017)

Source: Created by the Author

Strategy Recommendation

Having gone through the existing compensation strategy of Apple Inc., it can be sated that Apple is taking well care of its employees especially through providing monetary benefits. Despite a mild share holder revolt in 2013, Apple inc. has been able to remain at  the top in providing executive bonuses. Apple has always been focusing on the executives in its corporate level business. However, the lower level employees are somehow marginalised. In the year 2009, the number of total stakeholder of the company has increased by more than 800% substantiating the fact that it is still the best choice for the executives to work. (Apple - Definitive Proxy Statement, 2017) 

However, some strategies can be recommended in order to bring betterment in the compensational practice. The company can look after the amendment of RSU (restricted stock Unit) while rewarding the shareholders and the major executives. Personal development plan can also be introduced in the company so that the employees are assured about the organisation’s impact upon their wellbeing.

Proposal of Compensation Component:

Fig: Proposal of Compensation Component

Source: Created by the Author

Analysis of Legislation:

Compensation in terms of providing insurance to the employees has been made an obligation for the companies.  IT was initiated long back for the federal employees in the United States in order to ensure security of life even after their work As per the statutory compensation law of the United States of America, the organisations are bound to provide at least the frames instructed by the government.  According to Fair Labour Standard Act (FLSA), the companies are bound to ensure occupational safety and security through provision of substantial and adequate compensation to the employees. EEOICPA (Energy Occupational Illness compensation Program Act) provides $150000 of compensation for the employees of energy department. Apple Inc. is bound to abide by the rules amended in FECA (Federal Employees’ Compensation Act) as most of the international corporations are directed by the federal laws. (Workers' Compensation, 2017)

Conclusion

Safety and security provision is an obligation to the employers, specifically the multinational employers like Apple Inc. In order to become competitive in the labour market, the organisations keep improvising their employee reward and compensation plans and strategies.  Thus they create a satisfactory environment for the workforce.

Reference

Apple - Definitive Proxy Statement. (2017). Investor.apple.com. Retrieved 4 April 2017, from https://investor.apple.com/secfiling.cfm?filingid=1193125-15-17607&cik=320193

Baker, P., DeMarree, A., Ho, S. T., Maloney, T., & Rickard, B. (2015). Labor Issues and Employment Practices on New York Apple Farms.

Federal Agencies. (2017). Eeoc.gov. Retrieved 4 April 2017, from https://www.eeoc.gov/federal/

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

Microsoft Corporation Deferred Compensation Plan. (2017). Sec.gov. Retrieved 4 April 2017, from https://www.sec.gov/Archives/edgar/data/789019/000119312511200680/dex105.htm

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.

Summary of the Major Laws of the Department of Labor. (2017). United States Department of Labor. Retrieved 4 April 2017, from https://www.dol.gov/general/aboutdol/majorlaws

Workers' Compensation. (2017). United States Department of Labor. Retrieved 4 April 2017, from https://www.dol.gov/general/topic/workcomp

Zabojnik, J. (2014). Stock-based compensation plans and employee incentives (No. 1325). Queen's Economics Department Working Paper.