Lincoln Electric Company
Case Study
Lincoln Electric Company
Case Study January 17th, 2008
EXECUTIVE SUMMARY
Lincol Electric Company is a very successful company on the market. It has a good market share due to its productivity. Productivity is the key element of a firm to be successful. Lincoln Electric created a system to pressure employees for a higher productivity. The pressure that this company uses is not psychological, it is the motivational one. The management motivates its workers with several bonus opportunities for either good work or good productivity. The same works also the opposite way as the penalization. Of course not everyone would be willing to work in such environment, there are also people who are paid by regularly, instead of according to number of products produced. There is also a doubt whether such a system would work in different types of businesses as there as different conditions. But nomatter what, there are some parts or elements of this effective system that can be used also in other types of businesses.
How is labor standards used to establish an incentive system such as this?
Labor is the most important part of every organization. Qualified, good organized, loyal and productive labor is a huge benefit for the firm. It can bring the company to positive numbers, in harder times it can support the company and make it able to survive and in good times it can bring even more and more profits. It is the management´s duty to create such an incentive system. If the labor system does not work, it is all failure of the management. The basic is the communication between management and representatives of labor force. They need to find out what are the motivation instruments that force workers for higher productivity, better quality. It is also the duty of human resources department to find worker, who are able to cooperate and help each other for common success. Last but not least important factor is to set the actual reward that will be used as
Lincoln Electric Company
Case Study January 17th, 2008
EXECUTIVE SUMMARY
Lincol Electric Company is a very successful company on the market. It has a good market share due to its productivity. Productivity is the key element of a firm to be successful. Lincoln Electric created a system to pressure employees for a higher productivity. The pressure that this company uses is not psychological, it is the motivational one. The management motivates its workers with several bonus opportunities for either good work or good productivity. The same works also the opposite way as the penalization. Of course not everyone would be willing to work in such environment, there are also people who are paid by regularly, instead of according to number of products produced. There is also a doubt whether such a system would work in different types of businesses as there as different conditions. But nomatter what, there are some parts or elements of this effective system that can be used also in other types of businesses.
How is labor standards used to establish an incentive system such as this?
Labor is the most important part of every organization. Qualified, good organized, loyal and productive labor is a huge benefit for the firm. It can bring the company to positive numbers, in harder times it can support the company and make it able to survive and in good times it can bring even more and more profits. It is the management´s duty to create such an incentive system. If the labor system does not work, it is all failure of the management. The basic is the communication between management and representatives of labor force. They need to find out what are the motivation instruments that force workers for higher productivity, better quality. It is also the duty of human resources department to find worker, who are able to cooperate and help each other for common success. Last but not least important factor is to set the actual reward that will be used as