Apple's IHRM Strategies: Compensation, Benefits, and Global Challenges

This report examines Apple's international human resource management (IHRM) practices, specifically focusing on compensation and financial benefits for expatriates. It begins by providing a background of Apple, followed by an overview of key IHRM theories such as Contingency theory, Agency theory, and Equity theory, and their relevance to Apple's compensation strategies. The report discusses Apple's policies and practices concerning base salary, foreign service inducement, and hardship premiums, highlighting the challenges of taxation and cost of living adjustments in different countries like the US and China. It also explores how Apple addresses issues related to cross-cultural communication, ethics, management styles, and performance appraisal. The report concludes by recommending strategies to minimize expatriate failures, such as providing support services, pre-departure training, and cultural awareness orientation.

INTERNATIONAL HUMAN
RESOURCE MANAGEMENT

Contents
Introduction...........................................................................................................................................3
Background to Apple.............................................................................................................................3
Key theories of relevance......................................................................................................................3
Organisation’s policies and practices in relation to the chosen topic/issues.........................................5
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

Introduction
With the introduction of globalisation, there are several underlying changes have to be
considered such as technological advancements¸ trade specialisation, and cost effectiveness,
which brings out new facet of business model. Research reports have recognised the
important, and failure of IHRM (international human resource management). This report
brings out relevance of IIHRM (international human resource management) in relation to
Apple`s compensation and other financial benefits. Firstly, it describes the background of
Apple. Further, it reflects to some of the important theories and issues of IHRM. It is
important to undertake how these issues can be resolved, the resolution is described at last
(Furusawa, & Brewster, 2016).
Background to Apple
Apple is an American multinational technological organisation that has its headquarters in
California, which creates and sells computer software, online services, and consumer
electronics. The company was established in 1976 and Ronald Wayne, Steve Jobs, and Steve
Wozniak founded it. It is among one of the big four technological companies such as
Facebook, Google, and Amazon. The organisation offers hardware as well as software
products that include iPhone tablet, smartphone, Mac personal, Apple smart watch, Apple TV
digital media, and homePod smart speaker. Software offerings include macOS, iOS operating
system, iLife, iWork creativity suites, and safari web browser.
Key theories of relevance
The company operates through fiver main segments such as Europe, Japan, America, and
other more segments. It is important to consider other challenges related to IHRM to the
expatriates are cross-cultural communications, ethics, management style, training and
development styles, performance appraisal, and international staffing process (Berber, &
Slavić, 2018). Some of the typical way and challenge associated with HR managers faced by

Apple are training and development, cross cultural issues, remuneration packages,
performance appraisal, and the international staffing process. The key theories related for
Apple`s compensation (Foreign Service inducement and base salary)-
Contingency theory- Expats compensation on the basis of particular contingencies and the
situation that has been prevailing in the host country. The compensation philosophy is each
organisation is de-centralised and allow units to localise the compensation structure
accordingly.
Agency theory- this theory focuses on divergent interests and the goals of the company`s
stakeholders and also the way the employees compensation has been used to align the
interests and the goals. As per the theory, there is a principle that says that there is an agency
relationship between Apple in America and its subsidiaries for expat`s compensation.
Equity theory- this theory suggests that there should be appropriate balance between the
expatriate`s contribution to Apple and what a person receives as the compensation. Equity
principle is sought to compromise with the new approach for the compensation. Apple
follows “person that is based on job centric”
Base salary- The structure of Apple`s salary is reasonable, appropriate and competitive in the
international market. Apart from this, the company offers with clean, safe, and good working
environment to the expatriates with well-maintained working equipment to the employees
(Berber, & Slavić, 2018). According to updated statistics, the average software engineer gets
$76000 every year according to the Pay Scale, which they have updated in 2014. Both in case
of expatriates, the term basic salary consists of package of allowances that cover cost of
living, housing allowance, health assurance, and tax assistance (Berber, & Slavić, 2018).
Foreign Service inducement and hardship premium- employees in domestic organisation
often receive salary premium as the inducement in order to accept the foreign assignment or

other compensation provided by the company for the hardship suffered due to transfer. Such
type of payment system depends on assignment, tax paid to the foreign governments, and
actual hardships (Berber, & Slavić, 2018).
The overall compensation package varies from nation to nation with the legally mandated
benefits, cost of living, taxes, culture, employee expectations, and taxes. Cost of living is an
inflationary indicator which measures the change in the cost of living of the fixed basket of
consuming goods and services that includes electricity, food, transportation, and housing
(Kim, Halliday, Zhao, Wang, & Glinow, 2018).
Country $/hour
US 21.97
China 0.63
Some of the important elements in the compensation packages include base pay, allowances,
benefits, taxes, and incentives.
Criterion America China
Orientation On the basis of performance On the basis of Job-level
Components Basic pay, variable, long
term incentive, compulsory
benefit contributions, and
vocabulary benefit
contribution
Basic pay, basic wages,
overtime, fixed bonus
Link with the performance Excellent linkage Poor linkage

Organisation’s policies and practices in relation to the
chosen topic/issues
In order to form a considerable compensation as an inducement, the company form a
particular percentage of salary as compensation for the expatriates, 5-40% of the base salary.
Apart from this, the board will communicate with the employees in regards to stock options
and adopt a policy in order to grant stock option (Sharma, & Matta, 2018).
One of the major challenge is taxation in IHRM as dual tax costing. Expatriates will have to
pay taxes in both America as well as china. With an aim to modify compensation packages to
provide that it is most taxation effective and appropriate rewards in the overall compensation
framework (Kang, & Shen, 2017).
By using any of the approaches of IHRM, the problem faced is in recalculating the salary
from gross to net. It can result in disparities between the expatriates of the different countries.
The employees can face problem in variations between the assignments for the same
employees. Another challenge can be variation between expats of the same nationalities in
varied countries (Kim, Halliday, Zhao, Wang, & Glinow, 2018).
Advantages can be equality with the local nationals if it is high, simplicity, and equity among
different nationalities. Identification with the host country`s operations. Expatriates are often
guaranteed that his home country spending power and also easy to communicate to the
employees (Haladay, Sergio, Opulencia, & Antiado, 2016).
As expatriates manage huge hardships, subordinates in Apple are assigned to various
subsidiaries and they get salary premium in lieu of their work and in consideration to
transferring of the job designation from parent country nationals to third-country nationals
(Sharma, & Matta, 2018).

Conclusion
With the rapid changes in the business cultures and globalisation, it is observed that IHRM
(international human resource management) plays an important role for achieving the
organisational goals. Apart from this, Apple executes its functions towards its expatriates
considerably well in terms of compensation plans. These benefits improve and prepares
employees for both mentally and physically so that expatriate abilities can be improved. It is
recommended that in order to minimise the expatriate failures, Apple can provide support
services, conduct pre-departure training programs, opt short-term assignments, and cultural
awareness orientation.

References
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