June 22, 2012
Apple Store Employees to Get a Raise
Repeat after me: Workers are assets, not expenses. Workers are assets, not expenses…
A number of research reports in recent years (most notably by Professor Zeynep Ton at MIT’s Sloan School of Management) have shown that managing and compensating retail associates more like a skilled workforce than one that is unskilled pays off in both top and bottom line results. When people associated with the retailing industry look for examples of this type of approach, the Apple Store is often among those mentioned. But even Apple has decided that it can do better by its employees.
Dow Jones Newswires has reported that Apple intends to give its workers a raise of up to 25 percent of their current pay rate. The company made the decision after an internal review found that pay was a major complaint among workers and after Microsoft "poached" some Apple Store employees from at least one location. Apple’s hourly pay range for sales staff has been between $9 and $15, according to Dow Jones. The company’s Geniuses earn up to $30 an hour.
When Apple’s new retail chief John Browett joined the company, he sent a video message to employees with the message that he would move up performance reviews by three months from September when they were originally planned. What Apple found was widespread unhappiness with pay rates, especially among its Genius and Creative educational associates.
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Recent Discussions
Discussion Questions
Will Apple’s pay raise result in even better performance from Apple Store locations? How might this effect the competition for talent with other consumer electronics retailers?
Poll
Compensation is far more often a dissatisfier than a satisfier. Apple’s pay raise might not directly result in better performance, but it might make it harder to poach their employees and in other ways help reduce turnover. A reduction in turnover generally results in a better customer experience. It certainly will help attract new employees to the Apple locations and that will put some pressure on other electronic retailers.
Retail in general has been behind the curve in store-level compensation for decades. It has not always been that way, so maybe this is a glimmer of hope. If (BIG if) retailers want to attract more talent to their stores, more money will help. I’m not convinced, however, that such is the case in many operations.
Bravo Apple! Workers are assets, not expenses. Apple realized this long ago and created a retail experience that consumers love and that have potential employees standing in line to make a few dollars an hour more than minimum wage.
Apple listened to its employees. If there was wide-spread grumbling about wages, Apple remedied the situation. In the case of Apple, happy employees definitely help consumers remain loyal to the brand.
Better performance? Absolutely not! But congrats to the associates! Everyone knows that pay is a short-term motivator at best. It may help retention/recruitment.
How does this impact the rest of CE? Good luck competing with Apple on talent. The other retailers can’t support that type of labor cost.
Apple’s pay raise will definitely result in better performance long term. They already have cachet among the young worker and with more money as an incentive, they will attract even better candidates. It will put them well ahead of the competition for talent, or start a wage war.
The only time more money doesn’t work is when you pay the same people to do the same work they’ve been doing at a lower rate. They won’t suddenly start working harder and performing better, they will just feel that they’re finally being paid what they’re worth.
When you have a better mousetrap, as Apple does, you earn greater resources to do better things for employees. As Apple gives out pay raises, the emotions of its employees will be buoyed up and that opens to doors to better performance, happiness and greater recruiting power. Being with a winner is desirable.
Competition must re-examine their products, their presentation and their hiring appeals and employee practices. Much like Starbucks changed the coffee marketing paradigm, Apple is doing the same thing.
Recognizing that your store employees are your greatest brand ambassadors and compensating their performance as you would skilled disciplines at headquarters will absolutely enhance the retail brand experience for your shoppers and customers. The human interface and the ability to connect with all of your shopper’s senses are the two elements that cannot ever be duplicated outside of the brick & mortar environment. It is precisely these components that retailers need to develop in order to stay relevant in the digital landscape. The investment you make in talented ambassadors will pay grand dividends for your brand from revenue to word-of-mouth marketing.
I don’t see this as a call for other retailers, so much, even though it would be nice if, generally speaking, retail associates could make a living wage. Apple needs to pay their associates more than everyone else because they need to maintain their edge of having smarter people.
A quick anecdote: I had a hardware emergency the other day during work hours (yes, I dumped a glass of water on my keyboard), so I ran out to the Apple Store for a quick replacement. The greeter at the entrance got the message instantly and used her iPhone to notify a floor associate who was at the shelf by the time I got there. He explained the two keyboard options in about 10 seconds, then pulled out his iPhone to check me out. I was in and out, keyboard in hand, in no more than three minutes.
There’s just a level of intuitiveness and intelligence that consumers count on at Apple Stores. Just as Costco does with their above-the-norm pay scale, Apple needs the monetary incentive to get the smartest, most motivated talent out there.
Maybe yes and maybe no, but either way, it’s the right thing to do given the huge success Apple has become and will continue to be. As they say in NYC, “It couldn’t hurt!”
George, I am repeating after you: Workers are assets not expenses. This has long been the mantra; but few in top management have accepted it. Now that Apple has made the decision, we hope the execution is not far behind. Taking this to another question; how long will it be until other top retailers get the idea and start improving employee pay rates? The strong issue here is sales have to increase and profit margins remain steady or we will begin to see pricing increases.
Most Apple employees aren’t working there for the pay, but this increase will definitely decrease turnover. This in turn improves the customer’s experience and ultimately the store’s performance.
What I especially appreciate about it is the management team hearing the issue and then fixing it. The only thing worse than unhappy employees leaving is unhappy employees NOT leaving.
It would be interesting to know what shopper feedback indicated before the pay increases and again after the increases. While my experience has always been stellar with the associates at the Apple Store, it would be interesting to know if there is a quantifiable increase in various store ratings and performance. In any case, this makes it tougher for the competition, definitely sends the message the employees are an asset, and makes them more more difficult for the competition to steal!
“The company made the decision after an internal review found that pay was a major complaint among workers.” Only Apple would be congratulated for not beating their children anymore (so to speak).
The New York Times on Saturday 7/24 ran a multi-page article on the low level of pay offered to Apple store employees. While that pay did not seem to impact demand for the Apple store jobs (they have 1000s of candidates), it does impact retention, as skilled employees simply seek other opportunities to earn more income, since there are few promotion opportunities in the retail organization.
Improving retention will help keep the Apple store efficient as well as passionate, since more experienced employees solve problems quicker and service customers better, just due to the learning curve.
Apple, like Costco has staked out the leader position in retail associate pay. Almost no other significant retailer can or will match them. They own this space and this move emphatically claims it. What this positioning does is ensure they have the best and brightest among those who choose a retail sales career. Ongoing performance and engagement of their workforce will be driven by other factors. But they have ensured the top competitive spot in attracting and retaining the best.
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Compensation is far more often a dissatisfier than a satisfier. Apple’s pay raise might not directly result in better performance, but it might make it harder to poach their employees and in other ways help reduce turnover. A reduction in turnover generally results in a better customer experience. It certainly will help attract new employees to the Apple locations and that will put some pressure on other electronic retailers.
Retail in general has been behind the curve in store-level compensation for decades. It has not always been that way, so maybe this is a glimmer of hope. If (BIG if) retailers want to attract more talent to their stores, more money will help. I’m not convinced, however, that such is the case in many operations.
Bravo Apple! Workers are assets, not expenses. Apple realized this long ago and created a retail experience that consumers love and that have potential employees standing in line to make a few dollars an hour more than minimum wage.
Apple listened to its employees. If there was wide-spread grumbling about wages, Apple remedied the situation. In the case of Apple, happy employees definitely help consumers remain loyal to the brand.
Better performance? Absolutely not! But congrats to the associates! Everyone knows that pay is a short-term motivator at best. It may help retention/recruitment.
How does this impact the rest of CE? Good luck competing with Apple on talent. The other retailers can’t support that type of labor cost.
Apple’s pay raise will definitely result in better performance long term. They already have cachet among the young worker and with more money as an incentive, they will attract even better candidates. It will put them well ahead of the competition for talent, or start a wage war.
The only time more money doesn’t work is when you pay the same people to do the same work they’ve been doing at a lower rate. They won’t suddenly start working harder and performing better, they will just feel that they’re finally being paid what they’re worth.
When you have a better mousetrap, as Apple does, you earn greater resources to do better things for employees. As Apple gives out pay raises, the emotions of its employees will be buoyed up and that opens to doors to better performance, happiness and greater recruiting power. Being with a winner is desirable.
Competition must re-examine their products, their presentation and their hiring appeals and employee practices. Much like Starbucks changed the coffee marketing paradigm, Apple is doing the same thing.
Recognizing that your store employees are your greatest brand ambassadors and compensating their performance as you would skilled disciplines at headquarters will absolutely enhance the retail brand experience for your shoppers and customers. The human interface and the ability to connect with all of your shopper’s senses are the two elements that cannot ever be duplicated outside of the brick & mortar environment. It is precisely these components that retailers need to develop in order to stay relevant in the digital landscape. The investment you make in talented ambassadors will pay grand dividends for your brand from revenue to word-of-mouth marketing.
I don’t see this as a call for other retailers, so much, even though it would be nice if, generally speaking, retail associates could make a living wage. Apple needs to pay their associates more than everyone else because they need to maintain their edge of having smarter people.
A quick anecdote: I had a hardware emergency the other day during work hours (yes, I dumped a glass of water on my keyboard), so I ran out to the Apple Store for a quick replacement. The greeter at the entrance got the message instantly and used her iPhone to notify a floor associate who was at the shelf by the time I got there. He explained the two keyboard options in about 10 seconds, then pulled out his iPhone to check me out. I was in and out, keyboard in hand, in no more than three minutes.
There’s just a level of intuitiveness and intelligence that consumers count on at Apple Stores. Just as Costco does with their above-the-norm pay scale, Apple needs the monetary incentive to get the smartest, most motivated talent out there.
Maybe yes and maybe no, but either way, it’s the right thing to do given the huge success Apple has become and will continue to be. As they say in NYC, “It couldn’t hurt!”
George, I am repeating after you: Workers are assets not expenses. This has long been the mantra; but few in top management have accepted it. Now that Apple has made the decision, we hope the execution is not far behind. Taking this to another question; how long will it be until other top retailers get the idea and start improving employee pay rates? The strong issue here is sales have to increase and profit margins remain steady or we will begin to see pricing increases.
Most Apple employees aren’t working there for the pay, but this increase will definitely decrease turnover. This in turn improves the customer’s experience and ultimately the store’s performance.
What I especially appreciate about it is the management team hearing the issue and then fixing it. The only thing worse than unhappy employees leaving is unhappy employees NOT leaving.
It would be interesting to know what shopper feedback indicated before the pay increases and again after the increases. While my experience has always been stellar with the associates at the Apple Store, it would be interesting to know if there is a quantifiable increase in various store ratings and performance. In any case, this makes it tougher for the competition, definitely sends the message the employees are an asset, and makes them more more difficult for the competition to steal!
“The company made the decision after an internal review found that pay was a major complaint among workers.” Only Apple would be congratulated for not beating their children anymore (so to speak).
The New York Times on Saturday 7/24 ran a multi-page article on the low level of pay offered to Apple store employees. While that pay did not seem to impact demand for the Apple store jobs (they have 1000s of candidates), it does impact retention, as skilled employees simply seek other opportunities to earn more income, since there are few promotion opportunities in the retail organization.
Improving retention will help keep the Apple store efficient as well as passionate, since more experienced employees solve problems quicker and service customers better, just due to the learning curve.
Apple, like Costco has staked out the leader position in retail associate pay. Almost no other significant retailer can or will match them. They own this space and this move emphatically claims it. What this positioning does is ensure they have the best and brightest among those who choose a retail sales career. Ongoing performance and engagement of their workforce will be driven by other factors. But they have ensured the top competitive spot in attracting and retaining the best.