Nucor Case Study - Employee Motivation

Essay by eidUniversity, Bachelor'sB, March 2009

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In any business organization, employee motivation is one of the biggest factors that can influence job productivity and worker's attitude. This in turn can affect the performance of the company which in turn influences the bottom line that ultimately determines the success and profitability of the business. Nucor, an American steel-making company, realizes the importance of employee motivation and as such, it builds a working model which encourages and motivates employees to perform their job at the peak of productivity. The business success of Nucor has proven that their model is successful in boosting the productivity of its employees.

As one of the largest steel companies in the US, Nucor employs more than 11,300 non-unionized employees, all of which take part in an approach to work which is different from most companies. At Nucor, the traditional hierarchies of the workplace are broken down to a certain extent, and a more social environment is encouraged.

The employees, for example, are valued greatly in the company. Management talks to employees, listens to them, and even takes risks on their ideas. Similarly, Nucor's CEO flies commercial, does not have an executive parking space, and relates to his workers by talking to them plainly. Unlike a typical CEO which makes more than 400 times the amount of a factory worker, Nucor's CEO only earns 23 times more than an average Nucor steelworker.

Perhaps more importantly in Nucor's motivational scheme is the way in which employees are paid. Unlike most companies which pay their workers based on a fixed rate, Nucor uses a pay-for-performance system which pays employees based on how well they do their job. By producing defect-free steel a Nucor employee can earn triple the amount of what the average steelworker at another company can make. A Nucor employee earned, on average,