The Business Model Of The Lincoln Electric Company

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

The Lincoln Electric Employees' Association was formed in 1919 to provide hearth benefits and social activities.This organization continues today and has assumed several addittional functions over the years.

Project Management Plan Employee Incentive Program CPMGT/301 October 13, 2014 Project Management Plan Attracting skilled employees is often important and often difficult. Employers face major challenges when they consider the increasing difficulty of finding skilled people every company should have an employee incentive program if it is sales and especially for university enrollment advisors because they are the ones that bring business into the university. The project scope of Title IV of the Higher Education Act of 1965 strict accreditation regulations and laws prevent the university from offering bonuses to employees who enroll students. The work breakdown structure for the employee incentive program consists of

To foster competitiveness and deliver better results, there is a program called STACK where employees are ranked based on the work done and their incentive is decided based on it. Better the rank, better the incentives.

Established in 1895 and specialized in producing and selling electric motors, Lincoln Electric Company rapidly developed after the movement to welding equipment and consumable welding products in the USA. By 1995, this company first hit $1 billion in sales and became the world largest company in welding industry. With the differentiate strategy by providing premium -price -products , this company got 60% sales in the North American and expanded internationally since the period of 1986 and 1992. Although this company is facing problems in global expansions, its overall strategy as well as practices in human resources, marketing, technology development, and international expansions is a useful lesson for other businesses.

The Lincoln Electric Company was a legacy company from which the families ' personal values were incorporated in the beginning and continue to be the fundamental beliefs compromising the company 's culture. By creating and implementing a culture of service, respect, and loyalty, the Lincoln Electric Company has become an institutional leader in American business standards. Lincoln 's culture cannot be summarized by a single dimension of cultural analytics because of its multifaceted culture that is innovative, outcome-oriented, people-oriented, and team-oriented

With multi-million dollar, domestic updates and acquisitions in such countries as Italy, China, and Indonesia, Lincoln Electric Company wasted no time by dwelling on its first losses in Lincoln’s history. Lincoln is back on track as the world leader in arc welding, after faltering for only two years. Lincoln is committed to providing substantial value to all of its stakeholders.

In conclusion, this incentive system was crucial for Lincoln Electric Company’s success. However, it is difficult for the others to copy because it is based on the culture of competition and justice, which was set up in the very beginning. In the future, the effects of this system might be comparatively lower because machines, which don’t have incentive, are replacing workers in production. However, it still has advantage as there are people in the company, and their innovation in production line design will also benefit the company for long.

The Lincoln Electric was founded in 1895, and is the world leader in the design,

The Lincoln Electric Employees ' Association was formed in 1919 to provide health benefits and social activities. This organization continues today and has assumed several additional functions over the years. By 1923, a piecework pay system was in effect, employees got two-week paid vacations each year, and wages were adjusted for changes in the Consumer Price Index. Approximately 30 percent of

Elements of Lincoln Electric’s management system that made it so popular in the U.S. such as piece-rate work, bonuses, and

The incentive management plan within Lincoln Electric began its journey in 1914 with the formation of the advisory board. The first change made reduced the weekly working hours from 55 to 50. One year later, they gave every employee a fully paid life insurance policy, welding school in 1917 and a bonus plan in 1918. Of these three the bonus plan was,

While there are several contributing factors aiding the Lincoln Electric Company to excel in creating a wonderful business culture, there is a constant evolution of progress. During its startup in 1895; the founder (John C. Lincoln) was able to experience moderate success and growth through the standard business practices of the day.

Today, competition between the businesses is extremely high thus companies need to find ways to be competitive. Organizations prepare the best market strategy to increase the company performance and the ways to keep their employee motivation on the highest level to perform well within the competition. At that time, several incentive pay programs play an important role for every organization to perform well within the competition.