LincLincoln’s business model empathize the importance of motivating employees with their pay plan. By motivating their employees, their greatest human capital, the company’s turnover, satisfaction and most importantly productivity were positively affected. It is easy to believe that the reason for Lincoln’s Electric success was the excellent attitude and commitment of their employees. Lincoln’s piece-rate pay system rewarded their employees on their productivity. The more they worked, the more they would get paid. Moreover, their bonus plan recognized and rewarded each employee for their personal contribution to the company. It’s important to highlight, that all Lincoln employees working in the manufacturing factory would need to have the ability to change from task to task, and be able to efficiently perform all tasks. Management would rearrange any worker to a different task if it was required based on the company’s demand for a specific product. The workers were responsible for completing every task correctly, and any mistake or error on production would have to be fixed on the employee’s time. Another important factor on employee satisfaction and retention was on the right to the company’s stock. The ownership of stock by employees also strengthened the team spirit and motivated those to have the company succeed.
However, Lincoln Electric assumed this business model would fit internationally, but it did not. In other countries besides the United States, some factory employees did not find it beneficial to work per assembling piece and get paid for every piece. They did not fit with the idea not to have sick days, paid insurance and other benefits that were being trade-off for high incentives and sales revenue based bonuses. Being and international firm, adds different dimensions to its challenge of being productive and successful. Some of the tools that are effective in America such as incentive pay have little to no effect in other countries with...
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