Compensation in business plays a pivotal role in assisting various activities such as recruitment, job satisfaction, and job performance. Compensation can be defined as the systematic way of providing employees with monetary value for the services they provide(Gelard, Parvaneh & Rezaei, 2016). There are a few compensation types applied by different companies and these include base pay, stock options, allowances, commissions, overtime pay among other methods of compensation. However, it is important to note that there is a number of components that make up a compensation strategy. These components include job descriptions, job analysis, job evaluation, pay structures, salary surveys alongside policies and regulations. These components help to regulate the amount of compensation given to an employee with respect to the ever changing market trends.
Apple is an example of a company that has a proper compensation strategy that has proven efficient in paying its employees. For example a managing director working with Apple earns a base pay of $203,125 and an average additional pay of $50,566 which include bonuses and additional compensation. In general, the average employee salary is $101,000 (Balakrishnan & Lipton, 2018) The compensation plan for Apple is designed to reward and motivate great performance among employees. The strategies are also in line with the market trends so as to maintain profits. As a result the program for the executives include an annual base salary of $3 million for the CEO and $1 million for the other executives. The base pay is subjected to no changes as from 2017. Variable annual cash incentives is also given to the executives on the basis of the net sales and income generated annually. In addition to that, there is the long-term equity awards which is a fixed amount since 2017 granted to the executives in a time based RSU award.
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References
Balakrishnan, A., & Lipton, J. (2018). Apple is giving $2,500 stock awards to some employees. Retrieved from https://www.cnbc.com/2018/01/17/apple-awarding-2500-rsus-report.html
Gelard, P., & Rezaei, S. (2016). The relationship between job motivation, compensation satisfaction and job satisfaction in employees of tax administration–a case study in Tehran. Asian Social Science , 12 (2), 165.
