Pay Structures are an important framework for every business to have. They provide a framework for recognizing differences in employee contributions. When deciding on a pay structure there are two different types of structures that a company can choose. The first being Person Focused pay structure, which rewards employees for acquiring new job related skills, knowledge or competencies. On the other hand there is Job- Based pay structures, which rewards employees based off of compensable factors determined by the company, including responsibility, effort, skills, etc.
I decided to look at Apple as a company and what type of pay structure I think fits appropriately with their business model. Apple’s competitive strategy is product differentiation, where they strive to always be creating their own design and developing their own hardware, software applications and services. They are a part of the electronic Retail product market in which they compete with Samsung, Dell, HP, Sony, etc. Apple has to continuously be creating a competitive edge against their competitors by making new products and software. I believe the best structure for Apple would be the Person-based structure. The person based structure supports apple’s organizational strategy by continuously motivating their employee’s to acquire new skills and knowledge. By providing an incentive to employee’s for their new skills, and knowledge, it motivates the employee’s to want to continuously educate themselves which in turn leads to higher productivity. Instead of directing the employees to be motivated through getting promotions to increase their pay, this strategy motivates employees to gain new knowledge and skills that are applicable to their work to increase their pay. As it is stated in our textbook “Evidence does suggest that person-focused pay plans lead to increased employee commitment, enhanced work motivation, and improved employee satisfaction. These results are probably due to the fact that well-designed, person-focused pay plans promote skill variety and autonomy. “(Page 112)
Overall, I believe that Apple would benefit greatly from a person-focused pay structure that would motivate employees to continuously be learning and gaining new skills and knowledge.
