Overview of the Case of Lincoln Electric
Lincoln electric established consistent HRM policies to build trust. This has been true since inception. This long history promotes confidence in employees and surety of future reward. Workers average $17,600 per year on standard 32 hour work weeks. They are able to earn about this same amount again in bonuses. This system creates high productivity. Lincoln Electric operates on a system of equality, cooperation, and need. Each employee is given the same number of hours as others. When business slows, all workers reduce hours equally. When overtime is needed, this workload is also distributed without favor to the workers. Today, Lincoln Electric is the largest manufacturer of welding equipment. Lincoln Electric sells a wide range of products from common stick welders to specialty plasma welders. Lincoln Electric successfully expanded internationally before 1955 into England, Australia, and France. It took the powerful HRM model into each of those nations. In the 1980’s, Lincoln Electric moved to expand simultaneously into several nations. Equivalent to nearly half annual production went into the expansion. Results returned contrary to expectations. A new CEO backtracked and sold off some of the investments. After careful analysis, a wider, locally responsive HRM model was developed. This new model was deployed with a renewed international expansion effort. Today, Lincoln Electric maintains 35 manufacturing facilities in 17 nations.
Why is Lincoln Electric So Successful in the United States? Role of HRM Practices
Lincoln Electric enjoys great success in the United States. The rewards, people resourcing, and HRM models promote their success. The high bonus potential increases productivity and employee loyalty. Costs of hiring and firing are nearly eliminated; employees willingly reduce hours when need arises and work overtime when there is need for increased production. Lincoln...