The Lincoln Electric Company Case Analysis

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The Lincoln Electric Company Case Analysis

By | Jan. 2013
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The Lincoln Electric Company Case Analysis

Introduction
Lincoln Electric Company is a manufacturing company, which has been focusing on welding products for the recent 30 years. The company had outstanding brothers leading the company to success. John was a technical genius and he brought the best skills in production and James was good at management and he was working on the employees' incentives. The company gained its reputation through the world war till present as the welding equipment supplier with higher quality and lower price at the same time. For the production aspect of welding equipment, it is an advanced production line with continuous flow with high flexibility and low idling time. Incentive System

Lincoln Electric Company has a unique system to incentive its employees to work much beyond the industry average, not only with faster speed but also with less turnover rate. Employees are encouraged to express their suggestion about the present production plan. Under such system, with John Lincoln's patents and technology, the company maintained its productivity and quality advantage in the market, and improved the production line all the time. James Lincoln built up the company’s image by introducing his philosophy to the company. He concentrated on the importance of competition and clearance of reward and punishment method during daily operating. He played well with 5Rs and gained unbelievable efficiency in production line. The system was the key to the decade success of Lincoln Electric Company. * Rewards

James set up a new payment plan called straight piecework plan, each worker on the assembly line got paid by his finished work. He also introduced a year-end bonus plan which could equal or exceed individual's annual regular pay. The bonus pool was determined by a semiannual "merit rating", which include dependability, quality, output, ideas and cooperation. These are great compensation strategies to encourage workers to work harder....
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