1.0 Introduction
Apple Inc. commonly referred to as Apple was established in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne and has experienced significant successes since its creation. The organization currently enjoys the status of a multinational company with its products and services used and admired by customers globally. As a company in the technological industry, Apple manufactures various innovative products and services that are prestigious and satisfy the needs and demands of customers in the continuously evolving technological world. Apple products comprise of iPhone (comprised of various models), iPad tablets, Apple watches (wearable smartwatch and fitness tracker), Apple TV, Apple Airtag and Vision Pro. Apple services include Apple iCloud, Apple TV+, Apple Pay, and various media under the iTunes store, Apple Music, Apple Books, and other services. The organization develops and sells software products like the macOS and iOS operating systems and productivity and creativity apps including Final Cut Pro and Logic Pro which provides a seamless user experience to its customer segment, catering to their diverse needs and preferences. Apple is based in the technology industry as it manufactures consumer electronics, software, and hardware with a commitment to developing unique and user-friendly products and services which distinguishes it in the highly competitive technology industry. Apple stores are located globally to facilitate easy access by customers from various markets. The company raised revenues of 394,324 million US dollars and hired 164,000 full-time employees in the 2022 financial year, a 6% growth compared to 2020. Apple is building and nurturing an inclusive workforce representing the community it serves, as it enhances diverse representation at all the organizational levels thus promoting an inclusive culture, equitable pay, and equal opportunities for all employees and its recognition and reputation as an attractive employer. Apple’s number of employees may change moving into the future due to aspects like organizational growth and development, restructuring strategies, and economic conditions. Therefore, Apple’s focus on quality and attention to detail in its operations has increased its customer loyalty and pushed it to the top of the technological industry.
2.0 Types of Long-term Incentive Programmes Practiced by Apple
Apple like every organization globally recognizes the significance of attracting and retaining top talent. The company has adopted various long-term incentive programs to cater to the needs and interests of the employees while promoting its growth and success. Apple’s long-term incentive programs comprise stock options, restricted stock units, performance share units, and employee stock purchase plans which motivate and reward the employees for their continuous contribution to the organizational operations and success.
2.1 Stock Options
Stock options allow employees to buy the organization’s stocks at a predetermined price, also called exercise or strike price, and are among the long-term incentives used by the company. This program allows employee employees to purchase Apple shares at their lowest exercise price and with the organization’s stock values growing with time the employee can significantly benefit from the rising stock value. The significance of this program is that it undergoes a vesting period which motivates employees to stay in the organization over a long time, to enjoy the full value of their stock options, thus aligning the employees’ and shareholder interests while promoting a sense of ownership and commitment among the employees.
2.2 Restricted Stock Units (RSUs)
Apple’s Restricted Stock Units promise to provide a certain number of shares of Apple stocks to employees in the future, depending on the completion of a vesting period. Employees do not buy the RSUs but get them as a compensation package, as RSUs undergo the vesting conditions and are tied to the employee’s tenure with the organization or the attainment of the performance goals. The values of RSUs are directly associated with the organization’s stock prices, developing a direct relationship between the individual and organization performance. When the employee receives their promised RSUs they obtain ownership stakes at Apple thus promoting the sense of loyalty and shared success.
2.3 Performance Share Units (PSUs)
Apple uses the Performance Share Units to motivate and reward employees according to performance. The PSUs are linked with particular performance metrics like operational objectives, financial goals, and strategic milestones, thus when the employee achieves the set performance goals, they get a predetermined number of shares. Through the Performance Share Units, the employees remain focused on the organization’s success while aligning to the specific objectives that promote long-term growth and sustainability. Apple enhances focus on strategic priorities and attainment of key milestones by connecting rewards to performance.
2.3 Employee Stock Purchase Plan (ESPP)
Apple’s Employee Stock Purchase Plan aligns employee interests with the organization’s success over the long term as they can buy Apple Stock at discounted prices, mostly based on the percentage below the market value. The ESPP works based on a regular provision period where employee set aside a section of their salary to purchase Apple’s stock when on discounts. Providing discounts during stock purchases increases employee motivation and enhances their performance benefits. The employees have the option of selling their acquired shares immediately or keeping them, thus aligning their interest with long-term Apple’s growth and performance while building their financial responsibility skills.
Therefore, Apple’s long-term incentive programs offer a comprehensive strategy that aligns employee goals and the organization’s strategic objectives by rewarding employee performance, promoting a sense of ownership, dedication, and shared success thus positioning Apple among the best employers in the highly competitive technology industry.
3.0 How the incentive programme is used to motivate the employees in the organization
3.1 Stock Options
Stock options are influential in motivating employees in the organization by offering them a sense of ownership and aligning their interests with those of the stakeholders. It provides a vesting duration which enhances employee commitment in the organization, by encouraging them to stay. For example, an employee who was offered stock options years ago and bought them at a lower strike price, they are currently gaining significantly as the value of Apple’s stock value keeps growing with time. Through stock growth, employees are encouraged to contribute to the organization’s long-term success. Besides, when an employee gets a stock option having a five-year vesting period they may be encouraged to be in the company for the whole period thus gaining from the rise in stock value, thus increasing their loyalty and commitment to Apple’s long-term objectives.
3.2 Restricted Stock Units (RSUs)
RSUs give employees ownership without them making upfront payments with vesting conditions linking employees’ success to the organization’s stock performance. For example, when an executive at Apple is offered RSUs linked to particular performance goals when the goals are attained, they get the promised RSUs. The direct relationship between performance and reward encourages the employees to be involved in the organizational success. Another instance is when an Apple employee gets RSUs having a 6-year vesting duration, the longer period promotes a sense of loyalty and motivation as the employee recognizes that by staying in the organization for a longer time, they will gain from the RSUs, thus aligning the organization’s long-term growth and their interests.
3.3 Performance Share Units (PSUs)
PSUs provide a link between employee rewards and particular metrics thus keeping them aligned with organizational goals and objectives promoting a performance-based culture and encouraging employees to prioritize key objectives. For example, when Apple sets financial targets, the employees are given PSUs connected to achieving the objectives, thus when the organization meets or surpasses the financial targets, the employees get a predetermined number of shares, thus motivating them to actively participate in the company’s financial success. Also, when Apple develops a new product line and employees are offered PSUs connected to the successful product launch, attaining the strategic milestones like the marketing and sales target leads to the distribution of PSUs, thus motivating the employees to contribute to the company’s strategic success.