Bonus Structure Dropped

October 2, 2006

Apple has made a major change in store employee compensation, dropping the entire bonus structure for non-management employees and bumping up their base salary slightly in return. The bonus plan has seen several changes over the past year, as the Retail segment revenue has continued to increase, and the number of employees required to staff the stores has also increased. The changes included the elimination of the so-called Million Dollar Club that rewarded those who tallied $500,000 in sales (mostly at bigger stores) with a $500 bonus. Now, recruiters will be able to offer a somewhat higher pay rate, but without any back-end performance reward.

Previously, Apple set five performance goals for the bonus: revenue, CPU unit sales, AppleCare, .Mac, and ProCare sales. If the store employees met four of the five goals, they’d receive a bonus that average $300 after taxes. If they met all five performance goals, the bonus averaged $600. Interestingly, the ProCare goal was deleted from this last back-to-school quarter, apparently because it would have been too difficult to meet the goal when selling to students.

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