Working and careers at Lincoln Electric

Exercise

Lincoln Electric is an old firm famous for having extensively and successfully used piece rates incentives in manufacturing even after other manufacturers faced substantial problems with them, tending to removing them. On February 2010, the job openings at Lincoln’s website asserted as follows below. Please, explain the logic of in the context of managing objective evaluation of workers’ performance, specifying your explanation at least for those aspects indicated in italics.

“Both entry-level and skilled positions require working a rotating shift on either a two or three shift basis. In addition, most plant operations positions pay on a piecework basis. That means pay is based directly on output.

All of these positions offer excellent opportunities for quality-conscious, productivity-minded individuals who are interested in being rewarded for their excellent performance.

Incentive Performance - A Cornerstone of Our Culture. The Incentive Performance System primarily attributed to James F. Lincoln has been in place at Lincoln Electric since the early twentieth century. It has resulted in one of the oldest ‘pay-for-performance’ systems in the country, and is frequently used for benchmarking by other businesses and studied by academics around the world.

The Incentive Performance System in place in the U.S. Lincoln operations features:

· An elected Advisory Board for direct and open communication with senior management since 1914.

· Piecework incentive rewards for all production work.

· A profit-sharing Bonus Plan for employees paid annually at the discretion of the Board of Directors since 1934.

· Guaranteed Employment after three years of service. The company has not exercised its layoff options in the U.S. operations since post war 1948.

· A 401(k) plan offering the employee a variety of pre-tax investment options.

· Competitive compensation and other benefits.

· A Financial Security Program which includes company contributions based on years of service from 4 - 10%.

· An attractive vacation package based on comparable years of service.

Through this well-defined group of incentives, Lincoln encourages and compensates individual initiative and responsibility. Employees work together to reduce costs and improve quality. These individual and cooperative efforts create a more profitable company, the success of which each person shares according to his or her own contribution.” (http://www.lincolnelectric.com/corporate/career/openings.asp, visited February 13, 2010, emphasis added).

Explore the organization of the Spanish subsidiary and how it differs from the US’s organization. You may start at http://www.lincolnkd.com/corporate/about/.

Lincoln Electric Europe

Balmes 89

Barcelona

08008

Spain

Lincoln K.D. S.A.

Ctra. Laureà Miró 396-398

08980 Sant Feliu de LLobregat

Barcelona

España

Telf.: ++34 (0) 93 6859600

Fax: +34 (0) 93 6859623