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IS APPLE A DAY KEEPING THE EMPLOYEES AWAY?

- An HR case study on Apple Inc.

















Project by,
Konetisetty Nitya Kalyan(DM15125)
Malhar Divyang Lakdawala(DM15129)
Pradeepta Mohan(DM15136)
Ravi Jyoti(DM15140)
Sachin Menon(DM15146)
Vishvender Singh(DM15167)



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Contents

COMPANY INTRODUCTION ..................................................................................................................... 3
PROBLEM STATEMENT ............................................................................................................................ 4
CASE ANALYSIS ........................................................................................................................................ 6
CONCLUSION ......................................................................................................................................... 10
BIBLIOGRAPHY ...................................................................................................................................... 11







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COMPANY INTRODUCTION

Apple Inc. is an American multinational company, headquartered at Cupertino, California, that
designs and manufactures electronics and software products. The company was established on April
1, 1976 three smart men - Steve Jobs, Steve Wozniak and Ronald Wayne. Timothy D. Cook is the
current CEO of Apple. The company has nearly 80,000 permanent and 3,300 temporary employees
worldwide.
Apple provides a wide range of hardware products that include Macintosh computers, iPod and
iPhone while the software products include Mac OS X operating system, iTunes media browser, Final
Cut Studio, iLife suite of multimedia and creativity software and Logic Studio (Fig 1). The company
operates from fourteen countries and maintains 408 retail stores in addition to the online Apple
Store and iTunes Store.

Fig 1: Evolution of Apple products

Apple has many competitors in the business world. The biggest competition to their smart phones
comes from Samsung who produce the popular Samsung Galaxy. In the world of laptops and
PC's/Macbooks, Apple competes with Microsoft, HP and many others. In the world of portable music
device, Microsoft's Zune is considered to be the biggest competition to iPods.

Apple is the largest publicly traded corporation in the world by market capitalization, with an
estimated value of US$415 billion as of March 2013. Its worldwide annual revenue in 2012 totalled
$156 billion and that for Q4 alone was $36 billion. The most profitable products for Apple in the
recent years have been the iPhone and iPad which constitute nearly 70% of their revenue (Fig 2).


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Fig 2: Segment wise revenue for Q4 FY 2012.
PROBLEM STATEMENT
With its innovative capabilities and cutting edge technology, Apple Inc. has managed to stay on top
of the game. The company has been able to achieve a large market share due to its technological
innovations. The professionals at Apple Inc. have attributed to the success story of the company.
Employees at Apple Inc. have a great sense of commitment and satisfaction about their work. Apple
has been successful in making employees feel that their work really matters and has a significant
impact on the world. This has been possible due to the high talent pool available at Apple Inc.
Employees are extremely smart and they appreciate having the opportunity to be surrounded by
highly knowledgeable peers. Though this nurtures competitive environment, it also helps in bringing
out the best in each employee. But this has put a high level of stress on employees to perform
nothing short of their A-game. Apple Inc. is reputed for its zero tolerance for poor performance. In
addition, the high level of performance has generated many arrogant employees. As a senior
software engineer at Apple Inc. put it, Most professionals have an inflated view of their abilities and
it shows in their attitude.
In recent times, it has been found that most young professionals love to work for companies that
produce their favourite products and services. The company needs to be innovative and best-in-class
in whatever they do. The nature of the work, compensation and work-life balance are additional
factors that young professionals look for while choosing their careers in an organization. Apple Inc.
has been successful in providing good compensation to its employees. Many young professionals
consider Apple Inc. as their dream company due to the high compensation provided by them. But in
recent years, many employees have raised concerns over the perks provided by Apple which is not
on par with those offered by Google or Facebook.


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Low salaries were a particularly common complaint from Apple employees. Worldwide, Apple's
stores sold $156 billion in merchandise. About 30,000 out of 43,000 Apple employees work in Apple
Stores, as members of the service economy, and many of them earn about $25,000 per year. They
work for the most valuable company, inside the worlds fastest growing industry run by one of the
countrys most richly compensated chief executives, Tim Cook. For the last ten years, Apple has
taken advantage of the strong demand for its jobs, particularly in todays weak economy when Apple
is seen as a cool place to work: it has no difficulty replacing those workers that it disposes of.
Electronics and appliances stores typically post $206,000 in revenue per employee. Divide revenue
by the total number of employees and we find that each Apple store employee that includes non-
sales staff brought in $473,000. It has apparently made a tactical decision that the costs of selecting
and training new workers is worth the turnover rate that its low pay generates. In addition, the lack
of promotions in Apple Inc. is seen as another de-motivating factor by the employees.
Apple Inc. has achieved huge success due to its Innovation. Employees are encouraged to provide
novel ideas and these have constantly contributed to the success of the company. But, more than
often the ideas are not attributed to the employee who originally presented the idea. Employees at
Apple Inc. often complain that their ideas get stolen by their seniors or peers.
Apple has been in the news for having a very secretive work environment. Keeping the information
confidential is definitely advantageous for the company, but hiding it from its own employees is
unwarranted. The employees often complain that the need for secrecy comes in the way of their
work and they find it arduous to coordinate different aspects of the project. The morale of the
employees goes down; as they cannot give relevant inputs on the project they are working on.
Further, the last minute change in plans causes the same work to be done twice. It is difficult for
Apple to address this issue as Apple owes its success to the secretive policy it has adopted.
The poor HRM practises at Apple Inc. have raised eyeballs in the recent years. Employees have
constantly faced difficulties due to the stringent HRM policies and lack of transparency. Moreover,
after Tim Cook took over as the CEO of Apple there have been various changes across the
organization. This has led to lack of clarity amongst the employees about the Business Objectives
and Strategies of the organization.
In light of what has been mentioned in this section, it can be understood that many of the problems
surrounding Apple can be resolved using appropriate Human Resource policies and using this case
we would like to shed light into four major issues and provide recommendations that Apple Inc. can
incorporate to resolve these issues.



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CASE ANALYSIS:
1. False ownership of ideas:

Good ideas are occasionally stolen and attributed to others at Apple. This has become a
tradition in Apple in due course of time and is prevalent across all the departments of the
company. It weakens the enthusiasm of the employees at the lower level and prohibits the
growth of deserving candidates, leading to employee de-motivation and frustration causing
attrition in the organization.

Recommendations:
Start an online portal where individuals can share their idea. The best ideas can then be
selected and a mentor can be appointed who would provide further guidance in adding value to
the idea. The HRM policy should have enough provisions to accolade the original presenter of
the idea and also recognize the contributions made by the mentor.




2. Zero tolerance for poor employee performance :
Apple does not accept anything short of A-grade performance from its employees. Though this
has contributed to the high performance delivered by the organization, it has also increased the
stress levels of its employees.

Recommendations:
The performance of most employees tends to fall short once in a while. Apple needs to be
sensitive to the possibility of such scenarios and understand the real reasons for such
shortcomings. For e.g. an employee might not do well on a particular task due to lack of
appropriate knowledge or availability of required resources. Hence, the HRM needs to address
the following issues:
i. What is the gap between the desired performance and the actual performance of the
employees?
ii. Is the employee consistently performing poorly?
iii. Is the reason for the shortcoming related to the ability of the employee or lack of
motivation?
Pros
Encourages high participation by
employees
Transparency
Builds employee's trust in the
system
Ensures positive participation by
the mentor
Cons
Finding the best idea(s) from the
pool of idea(s) might turn out to be
a difficult task


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iv. Can appropriate training sessions resolve the issue?
v. What additional inputs need to be provided to improve the employee efficiency?

By identifying the answers to the above questions, Apple can choose to implement the
following solutions:
i. Training: If an employee lacks the required technical or business knowledge to perform
a task, the HRM can provide appropriate trainings to better equip the employee.
ii. Compensation & Rewards: If an employee lacks motivation to work, which then affects
the quality of his/her work, the company can help improve employee motivation by
providing compensation and rewards. Another reason for lack of motivation could be
the absence of a challenging career in which case the HRM has to provide job
enrichment by encouraging the employee to take up more challenging tasks.
iii. Providing Feedback: Providing constructive criticism may not just help employees
understand their areas of improvements but also provide them with possible solutions
that they can implement. The HRM policies should facilitate a positive feedback
sessions without personal biases by providing a mentor who works in different
department.




3. Lack of perks and promotions:

Lack of proper compensation program and promotion can lead to frustration amongst the
employee leading to high attrition. Apple is facing high employee distress due to its poor perks
and lack of promotions.

Recommendations:
Apple can motivate its employees and resolve the problem of lack of perks by the following
methods:
Pros
Encourages employees
Reduces Stress levels
Provides an atmosphere for
improvements
Identifying the areas of
improvements helps in designing
appropriate solution
Mentoring improves understanding
of the nuances of work.
Cons
Mentors may not be interested in
helping the employees or might
not be available always to provide
support.
Feedback sessions may not be
helpful if the mentor doesn't
identify the appropriate areas of
improvement.
Understanding the real
motivational factor can be difficult
as each employee is motivated by
different things.



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i. Replace subjective performance measures with objective performance measures by
linking the appraisal process to objective performance instead of supervisors
perception of employee performance. This can also be accomplished using a 360
feedback.
ii. Provide a nominal perk based on the performance of the employee.
iii. Bring transparency in the performance evaluation methodologies to remove
discrimination.
iv. Perks could also include provision for better health facility, more family time, time for
vacation and improved work-life balance. The HR department can use these alternative
perks instead of salary hike to satisfy its employees.
v. HR department needs to categorize employees into different categories of
promotability on the basis of their objective performance and 360 review and this
process needs to be done in two phases:
- Mid Term review: where employees will be given their feedback and areas of
development. The supervisors should evaluate the objective goals fulfilled till the
midterm review and also establish additional objective goals for the annual review
- Annual review: In the annual review, the supervisor should evaluate if the
employee has been able to attain his objective goals for the year.



4. Change in organizational culture and poor HR practises:

Poor functioning of human resources department reflect the overall ill state of affairs of an
organization and its possible uncompetitive position in the marketplace. There are many
negative outcomes of a bad HR Department out of which some are listed below:
Lack of clarity regarding the business objectives.
Pros
Motivates employees
Increases transparency
Provides an atmosphere for
improvements
Identifying the areas of
improvements helps in designing
appropriate solution
Gives rise to a healthy work
environment
Since objective goals are measured,
it helps in eliminating unfair
practises in rewarding an
employee.
Builds employee trust

Cons
Defining a balanced objective goal
may be tough as expections of
supervisors vary
Employee might fail to meet the
objective goals due to market or
economical issues. For e.g. if the
objective target is to sell 500000
iPhones and there is no demand in
market for iPhones, then the
employee would fail to achieve his
objective goals.


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Creates organizational bottlenecks
Employees will not be able to share their personal and professional problems if HR
department is not cooperative.
The lack of proper HR policies undermines the organizations effectiveness, brings down
employee morale and hence affects the organizations profitability.
Poor functioning of HR department may cause miscommunication between the HR
department and the senior management leading to poor decision making on critical
aspects.
Lack of transparency in the HR policies may lead to misconceptions which may lead to
unethical practises at the work place.
The overall employee morale will come down and frustration would increase if HR
practises are twisted.
Recommendations to improve HR departments working in the organization:
Training HR department- Regular training and evaluation of team members in HR
department is a way to ensure that the HR department is well versed with the policies
and is competent to resolve employee issues.
Training Employees It is also important to make sure that employees across all levels
are aware about the organizational changes and have adequate information about the
new policies in place. This can be facilitated using a training program for employees.
Providing constant assistance HR needs to nurture a friendly atmosphere at workplace
by providing constant assistance to its employees.
Finding Gaps Understanding and identifying gaps in the organization can help to
reaching an appropriate solution.



Pros
Increases transparency
Builds employee trust and
confidence in the policies
Creates a positive work culture
The employees and the
organization work hand in hand to
achieve the organizational goals
Encourages active participation

Cons
Training could be a time consuming
process and involve huge
investments


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CONCLUSION

The Human Resource Management in an organization has to identify the areas of
improvement and provide solutions to maintain the integrity of the organization and
improve employee morale. In short, the major driving force for any organizations growth
can be summarised as shown below in fig 3.


Fig 3: Driving force for organizations



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BIBLIOGRAPHY

http://www.businessinsider.com/the-biggest-complaints-employees-have-about-working-at-apple-
2012-6?op=1&IR=T
http://en.wikipedia.org/wiki/Apple_Inc.
http://www.apple.com/in/
http://news.cnet.com/8301-17852_3-57573473-71/apples-biggest-problem-people-might-quit/
http://visual.ly/apple-stores