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Lincoln Electric Company: Harvard Case Study

1171 words - 5 pages

As we learn from the case study, the Lincoln Electric Company is the largest global manufacturer of machines for welding, which are used in all kinds of construction projects. This means that the company has a large global presence and many employees, so its culture affects thousands of its workers. Even though it is now 2014, the company still has a large market share and very satisfied employees, so clearly the culture leaves employees satisfied and motivates them to work hard for the company.

One of the biggest influences of the founders of Lincoln Electric is from James Lincoln, who created a board of advisors from the pool of employees to advise him (Sharplin, 1989). The board met every two weeks when it was first started, and it still meets today, nearly two hundred years after the company began. This board of advisors is made up of active employees in the company, and they are free to raise suggestions, criticism, or any topics of interest that the employees want the company to address. This level of honesty and openness is a rare quality, and this ability for employees to directly speak with their supervisors and discuss new ideas is probably one of the reasons why employees are so pleased.

The Lincoln Electric company also abides by the golden rule, treat others as you would yourself, both in how it treats employees and how the company deals with other people. The first priority at Lincoln Electric is the customer, then the employee, and finally the stockholders. Usually companies put the stockholders first, because they get money from the company and own small shares, but Lincoln Electric values its customers and employees more. This makes sense, because a strong customer base is essential to future profits, and because a company needs satisfied employees in order to prosper. The founders also had a “Christian ethic” (Sharplin, page 3), but they did not preach to their employees. Instead, they chose to live by example. They did not use deceptive advertising, and they also used an “open door policy” (Sharplin, page 7) with higher management-level employees. This meant that workers could go into offices and talk to their supervisors, showing a level of equality that is not present in all workplaces.

The company also used an incentive management plan, merit pay plan, and bonus plan to reward its employees. To achieve higher worker productivity, they implemented the incentive management plan, which Sharplin says is still the model college textbooks use to talk about powerful incentive plans. The performance appraisal system happens twice a year, and employees get scores out of 100 in different categories. According to Sharplin, the average score is an 80 for all employees, showing a high level of performance in the workplace. The bonus plan is another important way for the Lincoln Electric company to stand by their golden rule, since they give back to their employees when...

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