The Lincoln Electric Company
The Lincoln Electric Company, 1996
Background
The Lincoln Electric Company is a leading manufacturer of arc-welding and cutting products. Founded by John C. Lincoln in 1895, Lincoln Electric began its business with the design of electric motors. John's younger brother, James, joined the company in 1909 as a salesman. Almost twenty years after founding the company, John C. Lincoln decided to concentrate on being an engineer and inventor, and turned the duties of running the company to his brother. During this time, James introduced piecework pay and established the Employee Advisory Board, which included elected representatives and met every two weeks. Furthermore, Lincoln employees were covered by group life insurance, a progressive effort for its time.
Issues
There are several issues that face Lincoln Electric.
1. Is the incentive program in place at Lincoln Electric the best way to motivate employees?
2. Lincoln Electric tried to expand internationally but failed. Should the company try to expand again with a new strategy?
Incentive Program
The incentive management system has been in place at Lincoln Electric since the early twentieth century. Lincoln Electric operates on the belief that two key elements - responsibility and recognition - must be present for people to be productive.
Employees have three major responsibilities:
Attendance - If employees do not come to work, they are not paid and they are penalized.
Earning Power - Production workers are paid on a piecework basis. They must guarantee the quality of each piece they produce. If the piece is not good, they are not paid for it.
Self-management - The production supervisor to worker ratio at Lincoln Electric is one to between sixty and one hundred. The company feels that all workers must manage and all managers must work.
Recognition includes several items diligently attended to by the company. Promotion from within is combined with an open door policy.
Background
The Lincoln Electric Company is a leading manufacturer of arc-welding and cutting products. Founded by John C. Lincoln in 1895, Lincoln Electric began its business with the design of electric motors. John's younger brother, James, joined the company in 1909 as a salesman. Almost twenty years after founding the company, John C. Lincoln decided to concentrate on being an engineer and inventor, and turned the duties of running the company to his brother. During this time, James introduced piecework pay and established the Employee Advisory Board, which included elected representatives and met every two weeks. Furthermore, Lincoln employees were covered by group life insurance, a progressive effort for its time.
Issues
There are several issues that face Lincoln Electric.
1. Is the incentive program in place at Lincoln Electric the best way to motivate employees?
2. Lincoln Electric tried to expand internationally but failed. Should the company try to expand again with a new strategy?
Incentive Program
The incentive management system has been in place at Lincoln Electric since the early twentieth century. Lincoln Electric operates on the belief that two key elements - responsibility and recognition - must be present for people to be productive.
Employees have three major responsibilities:
Attendance - If employees do not come to work, they are not paid and they are penalized.
Earning Power - Production workers are paid on a piecework basis. They must guarantee the quality of each piece they produce. If the piece is not good, they are not paid for it.
Self-management - The production supervisor to worker ratio at Lincoln Electric is one to between sixty and one hundred. The company feels that all workers must manage and all managers must work.
Recognition includes several items diligently attended to by the company. Promotion from within is combined with an open door policy.