Lincoln Company Plan For Achieving High Worker Productivity

The founders of the Lincoln Electric Company left a legacy of an organization culture that promotes high productivity through sound management policies which have stood the test of time. The exponential growth of the company after the death of James F. Lincoln was a direct result of the establishment of a rich culture mix based on values that were widely shared and accepted by the members of the organization. Management empowered employees to become part of the decision making process through the contribution of ideas through the Advisory Board which was elected by the employees from amongst themselves. Reward management systems and all the other artifacts of the Lincoln Electric’s distinguished strong organizational culture will be analyzed in greater detail in this essay.

Lincoln Electric (LE) has been a producer of electrical and welding technology products since the late 1800's. The company remained primarily a family and employee held company until 1995, then approximately 40% of its equity went to the public. James Lincoln, one of the founders, developed unique management techniques that effectively motivated the employees. These management techniques were implemented as an unusual (for the era) structure of compensation and benefits called "incentive management". The incentive management system consisted of four key areas: factory jobs based solely on piecework output; a year-end bonus that could equal or exceeded an individual's regular pay; guaranteed employment; and limited benefits. Management

Lincoln comment that labor and management are properly not warring camps;they are parts of one organization in which they must and should coorperate fully and happily has made an easy effort to organize employees in the organization.

Primary features of the Lincoln Electric business model and employment system are displayed through the company’s overall strategy, philosophy, compensations and benefits policy, leadership, and communication within and outside the organization.

The founder, James F. Lincoln used his Christian upbringing as the basis for his vision of how he defined entrepreneurial success. The customers ' needs are first priority, the employee second, and the stockholders are last. Quality and cost efficiency are the two most important factors considered in their product engineering and manufacturing. The hierarchy is stringent, however, the culture of the company is greatly people-oriented. This company has a strong culture that is instilled in new employees from the beginning and continuously practiced by every member of every facet in the organizational structure.

Besides, managers in Lincoln Electric Company were not high in the sky, they worked and lived with workers in daily life, they had free atmosphere at work and they strengthened the feeling that workers were managing themselves.

Mutual respect is the foundation of all relationships in the Lincoln Company starting at the top of the firm. Respect is the ability to recognize of what is, a good manager are able to recognize the value of people, things and situations. A good team leader also evaluate the results and situations, take into account the pluses and the minuses, strengths and room for improvement, risks and opportunities…He is very interested in the potential of his employees. That is what James F Lincoln have brought since the beginning in the Lincoln Company. He understood that by seeking a committee advisor elected by the employees, on company operations is the best way to align a good management.

Lincoln's competitive advantage lies mainly in its effective compensation and benefits system which put forth three main elements to spearhead the company's efforts. The trinity of elements comprised of piecework, bonus system and guaranteed employment. Piecework provided workers with a sense of autonomy in that now, workers can earn as much as they are willing to work for. The bonus levels in Lincoln far exceeded those of industry peers and were based on their contributions in the form of output, ideas, cooperation, dependability and quality. Consequently, the benefits provided by Lincoln were not extensive as they saw higher wages as substitutes for things such as insurance,

Over the decades and since it was first created, the ongoing guidance and encouragement of the management towards their employees made Lincoln’s expansion possible to a global level. The ideas and philosophy of the founders are still at the core of the organizational culture because they strongly supported the company in its initial stages and helped distinguish it from others. “Thus, by providing a competitive advantage, these values were retained as part of the corporate culture and were taught to new members as the right way to do business.”

Since the founding of Lincoln electric to present day, the founders (Lincoln Family) ideals and management processes have been the backbone of the company. Though stemming from a christian belief the company doesn 't reflect any kind of religious organization and religion inst forced on the employees according to interviews with the employees. Instead, Many would say that their odd approach to incentives and performance would be what drives their success. Some others would say that it would be their management style, the communication within the company or event he bonus and merit pay systems in place. I think it would be a combination of great management techniques and great incentives. One of the core beliefs of the founders has been; and will always be that the “worker cares as much about a lack of income as management”. It is one of the reasons they have so many things in place like

LE has built a reputation on the principle of faith in the individual. This philosophy is an fundamental part the management style at Lincoln Electric. They substantially reward competition and teamwork in its workforce to enforce the principle of faith. With wage are being calculated on the basis of production output \not on fixed wages over time. The number of pieces that an employee is able to finish will determine how much the company pays in an annual bonus (O’Connell, 1998).

These tough beginnings draw deeply the formation of Lincoln’s no-frills approach to how a company should be ran. John C. Lincoln was an engineer at heart and left the company to his younger brother, James F. Lincoln, who took the company onwards keeping the company family run and true to his brothers’ values. Not just an engineer, James philosophies were marked in Christian values, which contributed to the deeply engrained nature of the culture. Further, James possessed a deep sense of business acumen that fed the company’s general philosophies. One example is his customer

for their work and that they also enjoy their jobs. The average employee for the Lincoln

Investigating the founders of the company makes it easy to see that Lincoln Electric Company’s founders shared a common vision and successfully implemented it. Since John Lincoln “preferred being an engineer and inventor rather than a manager,” (Sharplin, 1989, p. 1) James Lincoln was responsible for things like human resources and other management functions. Even though the brothers did not share in one another’s work, it is clear that their relationship as brothers and business partners, and perhaps also their shared religious beliefs, helped to mold the culture of the company, which ultimately led to its success. Throughout the years, the company was forced to adapt to changing market conditions, and even war. The ongoing influence of the founders of the company is evident because the same cultural foundations that John and James Lincoln instituted nearly 100 years ago still keeps its workforce and business flourishing today, over 50 years after the death of John Lincoln.

Since its creation, Lincoln Electric recognized people as its most valuable asset. Employee tasks are facilitated by being trained in a way that enables them to work in different departments. To build positive and conflict-free work relationships, Lincoln Electric employees are encouraged to act ethically and solicited to show integrity, discipline, and