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Human Resource Management Final Assignment

Apple Inc. Secrecy Policy and the Effects to Its HR Practices


Tarsisius Hani Handoko, Dr., M.B.A.

Aditya Nandiwardhana 09/288595/EK/17642

Apple Inc. is famous with its remarkably innovative products. Most employees of Apple said that the reason they choose to work for Apple is because of its products. However, working in Apple Inc. is not always fun. Apple is known by its reputation in committing HR abuses. The company has been attacked for using sweat shop in China. However, its not the only problem that Apple Inc. faces now. The company is also well-known for its secrecy policy. The crazy amount of secrecy at Apple often makes it harder to get work done. Apparently, this drives some employees at the company crazy. One Apple inventory specialist wrote that the "need for secrecy sometimes means doing work twice when changes happen in schedule or releases." Another employee who works as an engineering product manager in Cupertino griped that "the need for secrecy makes for special challenges in trying to coordinate crossfunctionally." This excessive secrecy makes it impossible for employees to know exactly why you've been asked to do on a certain assignment. Most of the time, they just have to do it blindly. Apple Inc. Company Profile Apple Inc. (Apple), incorporated on January 3, 1977, designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company's products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also sells and delivers digital content and applications through the iTunes Store, App StoreSM, iBookstoreSM, and Mac App Store. The Company sells its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In February 2012, the Company acquired app-search engine Chomp. The Company offers a range of mobile communication and media devices, personal computing products, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions and third-party hardware and software products. In addition, the Company offers its own software products, including iOS, the Company's mobile operating

system; OS X, the Company's Mac operating system; and server and application software. The Company's primary products include iPhone, iPad, Mac, iPod, iTunes, Mac App Store, iCloud, Operating System Software, Application Software and Other Application Software. Apple Inc. HR Strategy Apple Inc. Human Resource strategy roots back to the following three words: Provide the company with the necessary personnel to assure superior performance. Employees should at all times strive for the highest quality in all they do. Ensure proactive internal career progression.

HR policy of a company can shape the companys image and therefore has to positively reinforce the companys competitive advantage. In Apple Inc., to fulfill the need of creating a positive company image, it implements equality of employment and promotion opportunities through partnership arrangements around the world. Apple has installed several measures to increase productivity and effectiveness in order to get the best employees to work for the company. A cornerstone in the employment relationship are the regional partnership programs with different organizations like Skillnet in Ireland (a body comprising both employer and employee organizations) aiming at facilitating the mutual involvement of management and employees/unions in organizational development. Apple always tries to be the best example in HR practices, especially in the area of training and development. Apple realizes that their staff requires sufficient skills and knowledge to do their job in order to function effectively. To meet this requirement, the training process is divided into four categories: 1. Offer or efficiency program. 2. Business driven needs training. 3. Personal development category 4. General awareness education. What distinguishes Apple form other companies is the evaluation process within the training process. The evaluation compares the objectives of the training with the learning process that

actually occurred. The bottom line of the training provision is a workforce that not only feels that it can effectively adapt to and adapt within an environment that is in a constant change, but also increase their internal mobility, giving Apple the possibility of redeploying employees. The Secrecy Policy Mark Hamblin, an ex-employee of Apple Inc. who worked on the touch-screen technology for iPhone, reportedly said that the company made everyone super, super paranoid about security and that he has never seen anything else like it at another company. The secrecy in Apple is not just about company policy, it is part of the corporate culture. According to an employee whose identity is not to be revealed, employees working on top-secret projects must pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices. Work spaces are typically monitored by security cameras. Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful. Edward Eigerman, another ex-employee, was fired in 2005 when he was implicated in an incident in which a co-worker leaked a preview of some new software to a business customer as a favor. He worked at Apple as software engineers for four years. He said that when the iPod was launched, he or anyone who he worked with never saw that coming. Apple employees are often just as surprised about new products as everyone else. Philip Schiller, Apples senior vice president for marketing, has held internal meetings about new products and provided incorrect information about a products price or features, according to a former employee who signed an agreement not to discuss internal matters. Apple then tries to track down the source of news reports that include the incorrect details. Not only that, Apple also tries to imply its secrecy policy to its employees spouse and family. John Kullman, a former manager and director at Apple, was working on independent projects from their home in California. Joe Sokol, his boss, asked him to presents his works. Kullman showed him a PC he had hacked to run Apples Mac OS software. Sokol then asked Kullman

whether he can do the same to a Sony VAIO laptop or not. He succeeded in a matter of hours. The next morning, Steve Jobs was in a plane to Japan to meet the president of Sony. Later, Bertrand Serlet, the father of Mac OS X, told Kullman that he cannot let anyone know about it. Unfortunately, Kullmans wife, Kim Scheinberg, already knew about it. She then was told to forget everything she knew. Their house was also reconfigured to meet Apple security standard. Regis McKenna, a well-known Silicon Valley marketing veteran who advised Apple on its media strategy in its early days, said the culture of secrecy had its origin in the release of the first Macintosh, which competitors like Microsoft and Sony knew about before it was unveiled. Mr. Munster said he jokes with other colleagues covering the company about how Apple routinely jams the frequencies, or gives them misinformation to throw them off the scent of a new product or other news it hopes to keep confidential. Four years ago, he said, a senior Apple executive directly told him the company had no interest in developing a cheap iPod with no screen. Soon after, the company released just that: the iPod Shuffle. The Impact of the Policy to Apple HR Practices Apple is not the only company who applies secrecy policy in the industry, but what Apple does is crazy by any companys standard. This kind of policy, even though sometimes is necessary, can affect the HR practices in the company and give negative effect to the companys whole strategy. In developing performance management system, there is a recommendation that should be followed by companies. First, the system should ensure that values and beliefs are integrated into the system. If employee involvement is an important value then self and/or peer appraisal should be part of the performance measurement process. Second, visible CEO and senior management support for the system is necessary. The stronger the role of senior management the more likely the lower level manager will take responsibility for ensuring that appraisals are completed and the system is used consistently across the company. Third, the critical company performance measures should be identified. These should provide the best barometer of how the company is doing in relation to achieving its strategy and business goals. Fourth, job description s should be

linked to the performance management system. Employees need to be able to see the link between their job requirements, their job descriptions, and the goals and objectives included in their performance plans. Fifth, be sure that the performance management system assesses employees fairly and objectively based on clearly understood standard of performance or in terms of their contribution relative to other employees. Sixth, managers need to be trained in how to use the performance measurement feedback on a daily basis as well as during the formal performance appraisal interview. Seventh, effective performance management systems link appraisals to financial rewards. Eighth, employee training and development should be linked to the results of performance appraisals. Finally, the effectiveness of the performance management system should be evaluated to make sure employee performance management system should be evaluated to make sure employee performance is linked to business goals and objectives. That suggestion implies that in developing a good performance management system, all employees from upper, middle, and lower position should be engaged. This secrecy policy obviously is an obstacle to that certain objective. It makes employee involvement seems less valuable then it should. The employees cannot see clearly the link between their job requirements, their job descriptions, and the goals and objectives included in their performance plans. The employees just have to do most of their jobs blindly. One of the sentences that explain Apple Inc. HR strategy is: employees should at all times strive for the highest quality in all they do. If they have to do their jobs blindly, how could they times strive for the highest quality in all they do. Its a contradiction to the companys basic HR strategy. Also, the secrecy policy makes the performance management system unfair since they dont know what their goal is and, therefore, cannot do the best in their jobs. To maintain the secrecy in the company, Apple has fired many of its employees for endangering the information that should be kept a secret from outside the company. Many employees also left the company because they couldnt resist the pressure and the demands arise from the policy. The secrecy policy creates practices that are questionable from the ethical, or even legal, point of view. Can Apple really fire its employees based on this policy without violating any labor law? Also, when Apple interfering its employees houses and family to maintain the secrecy policy, is it really ethical to do that? This kind of practices affects the companys image to the outsider and can be damaging to the companys competitive advantage.

Conclusion and Suggestion In the electronic gadgets industry, secrecy is, no doubt, an important point. The rapidly changing technology makes the competition between the players unbelievably tight. The last thing they want is being preceded by their rivals in making innovation. Therefore, they try to cover up the progress they have made from outside the company. However, what Apple is doing to its employees is crossing the line. Its secrecy policy is doing more damage rather than progress to the companys performance management. It also creates practices that exceed the ethical boundaries, giving the company a bad name. Apple needs to re-consider its policy about secrecy. To make the policy vanishes completely is, of course, impossible. However, maintaining the secrecy should not avoid good corporate practice. The company has to trust its employees more and engaging them more in companys strategic planning. It also has to stop its excessive efforts in protecting the secret information from the rivals.

References http://www.huffingtonpost.com/2012/06/14/apple-secrecy-wife-told-to-forget_n_1596895.html http://www.nytimes.com/2009/06/23/technology/23apple.html?_r=0 http://in.reuters.com/finance/stocks/companyProfile?symbol=AAPL.O Iliev, Lindinger, Poettler, 2004, Apple Computer Inc. Strategic Audit, Dublin Institute of Technology. Noe, Hollenback, Gerhart, Wright, 2006, Human Resource Management: Gaining a Competitive Advantage 5th Ed, McGraw Hill.