Case Analysis Of Lincoln Electric Company

813 Words 4 Pages
LINCOLN ELECTRIC COMPANY
In 1906, John C. Lincoln incorporated his company and moved from his one-room, fourth-floor factory to a new three-story building. John Lincoln preferred being an engineer and inventor rather than a manager, though, and it was to be left to another Lincoln to manage the company through its years of success.
The incentives
• 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, 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
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This is not the case at Lincoln. Formal authority is quite strong, in order to keep a strong management and discipline. Despite this attitude, employees participate in management at Lincoln in several ways. The Advisory Board, elected by the workers, meets with the Chairman and the President every two weeks to discuss ways of improving operations. This board has been in existence since 1914 and has contributed many innovations. At first, employees were awarded one-half of the first year 's savings attributable to their suggestions. Now, however, the value of suggestions is reflected in performance evaluation scores, which determine individual incentive bonus …show more content…
Selection for these jobs are done on the basis of personal interviews. A committee consisting of vice-presidents and superintendents interviews candidates initially cleared by the Personnel Department. The supervisor who has a job opening makes final selection. After a year, each employee is guaranteed that he will not be discharged except for misconduct and he is guaranteed at least 30 hours of work each week. There has been no layoff at Lincoln since 1949, which has been one of the key attractions. Each supervisor formally evaluates his subordinates twice a year. Marks gained on the performance evaluation cards are converted to numerical scores, which are forced to average 100 for each evaluating supervisor. Individual merit rating scores normally range from 80 to 100. Any score over 110 requires a special letter to top management. These scores (over 110) are not considered in computing the required 100-point average for each evaluating supervisor. Suggestions for improvements often result in recommendations for exceptionally high performance scores. Supervisors discuss individual performance marks with the employees

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