Lincoln Electric Case Study Essay

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A worker’s bonus is based on four factors: work productivity, work quality, dependability, and cooperation with others.

Some factory workers at Lincoln have earned more than $100,000 a year. The problem with transporting Lincoln’s control systems to other national cultures is Managers at international plants failed to meet their production and financial goals every year and they exaggerated the goals sent to Lincoln’s managers to receive more resources, especially during the recession in Europe and South America. Managing organizations and people: Cases in management, Organizational behavior and human resource management. Lincoln Electric: A Case Study: Joe Attinello, Cali Cook, Alia Goss, Kurt Oliver, Mark Strom, Mike Torbenson Business 305Linda Gibson.

Specific to human behavior, LECO neglected the transferability of the incentive system to other countries and the utilization of management controls to monitor it.*External: It was unreasonable to expect, considering the extensive experience with the US labor markets and the period of time required to customize the incentive system to fit a very specific culture, that it could be instantaneously transferred to a different business environment.

It is clear that the rewards offered through the incentive plan did not have the same valance for the international labor forces as it did in the US.

In addition, there are short power distances between laborers and managers (common cafeteria, no reserved parking, managers work long shifts, etc.) As a result, employees feel that they are being treated fairly.

[Portrait of Dizzy Gillespie, Downbeat, New York, N. Licensed under No known copyright restrictions" data-lightbox="media-gallery-1567832704"*Expectancy: wages based on piecework and an annual bonus gives the average worker the possibility to increase total compensation.Relying on greed as the basis for motivation may be appropriate in western business environments, but it is far from a universal application.Gillespie must first understand the workforce enough to determine what motivates them and this requires experience LECO does not yet have.According to (Daft, 2010) open-book management is used in decentralized organizations to share the financial condition of a company with all employees. Based on what you’ve just read, what do you think makes the Lincoln System so successful in the United States? Tasks are precisely defined, and individual employees must exceed strict performance goals to achieve top pay. Production workers are paid on a piece-rate basis, plus merit pay based on performance.Open-book management encourages active participation in achieving organizational goals, helps the employee understand how his or her job affects the financial success of the organization, and allows employees to see the interdependence and importance of each business function (Daft, p. Employees are also eligible for annual bonuses, which fluctuate according to the company’s profits, and they participate in stock purchase plans. An advantage of a joint venture is that it will allow LECO to experiment with the incentives program on a smaller scale before full implementation.According to feedback from local sources it seems that the incentives will have to move in the direction of more valued, indirect, compensation.According to expectancy theory, employees are motivated by the belief that they can expect to achieve certain desired rewards by working hard to attain them.*Instrumentality: Rewards are explicitly linked to a measurable performance.*Positive Valence: employees value the rewards that are offered to them for desirable behaviors. There were many factors that contributed to LECO's failed attempt at internationalization.It is evident that Willis ignored a variety of cultural and macroeconomic effects related to his plan.The high levels of productivity common to LECO employees can be attributed to motivation and job satisfaction:*Guaranteed employment: no lay offs since 1948, instead LECO rotates through co.(skill variety).*Equity: employees earn comparable, sometimes higher, wages than other manufacturing companies.


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