Lincoln Electric, Sas, Six Myths About Pay

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Brittney Cammack HRSM 4000: Fall 2014 Dr. Arnold Exam 3 By studying The Lincoln Electric Company managers can learn a lot about compensation and human resource management that should enable them to manage their organizations more effectively. Lincoln Electric, founded in 1895, has been extremely successful over the years. This success is mainly due to its compensation system, company culture, and its leadership style of management. Lincoln Electric provides lifelong employment to its employees who meet their production goals and they use a merit pay system. The company also pays an annual bonus averaging 60% of its worker’s salaries. This type of incentive program plays a major role in the Lincoln’s productivity. Because employees are compensated well for their efforts in productivity, high quality, cost reduction ideas, and individual contributions to the company, Lincoln Electric is able to maintain competitive advantage in the industry while keeping their employees financially motivated. Not only are Lincoln Electric’s employees motivated by financial incentives, they are motivated with non-financial incentives as well. The company’s employees are solely responsible for the amount of work they produce. Additional responsibilities help to motivate employees by allowing them to feel empowered and aware of the necessary procedures needed for the company to excel. The employees are also aware of the productivity goals that need to be met in order for them to progress in the company. Lincoln Electric believes in promoting within the company, and this also motivates its employees to reach and excel in their goals. With these various types of motivators, Lincoln Electric is able to maintain competitive advantage and promote a healthy competitive culture within the company. However, Lincoln Electric’s high productivity is not just limited to the manufacturing

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