Nucor is a rare company, which lives on a spirit of teamwork. The illustration of this is through its management philosophy, incentive plans, and organizational design. All employees participate in the incentive plans. In comparison to many companies, embracing a compensation plan that focuses on rewarding employees for success in teamwork adequately fits the organizational model. For this reason, companies, which have these plans, continue taking diverse approaches towards structuring the team-based pay. On the other hand, HR professionals within the company levels use the plans as an effective way of rewarding team performance. However, they are to be careful and reasonable for purposes of avoiding unintended impacts undermining business goals and individual initiative (Sharma 56).
One of the advantages of using this approach is that in achieving these goals, Nucor is in a position of streamlining and decentralizing management through allowing each plant to continue operating as independent business units. The employee relations philosophy proposed by Nucoris effective. With it, employees have an opportunity of earning in accordance to their productivity.In case the employees perform their jobs well, they have an assurance of a job tomorrow. This illustrates that they have not lain off any employeefor three decades. Employees have then freedom of seeking proper and fair treatment. Through this, the company keeps listening to employees through department meetings, employee surveys, shop dinners, andcrew meetings (Armstrong 57). On the other hand, a disadvantage of this process is that employees are under expectations to have avenues of appeal in which they embrace a belief of fair treatment. Such a complaint procedure enables the employees to continue carrying their complaints to the company.
Nucor actively backs up the philosophy of the unique system of pay-for-performance compensation. The salaried employees are in receipt of 0 to 25 percent in salary on grounds of their plant’s Return on Assets (ROA). Employees accrue money with respect to their individual levels of productivity. While the employees receive payment lower than the industry average for hourly rates, they automatically qualify for exceptional performance bonuses in case they go beyond hourly quotas. For instance, the steel industry average maintains that an individual needs to be in a position of straightening 10 tons of metal each hour. The goal of Nucor is to have 8 tons straighten in each hour. Employees acquire additional 5% bonus for each ton straightened above 8 tons (Randhawa 78). With this, they typically average at around 34 to 41 tons each hour.
On the contrary, in case they delay to work, they lose the bonuses for the day in question. If they do not attend a day of work within the week, they suddenly stand to lose their bonus for the whole week. The department managers have set salaries, which are lower that what subsequent steel plants offer. For this reason, they qualify for annual bonuses with respect to the plant’s ROA that keeps varying in percentage of respective salaries. They appreciate additional bonuses in line with weekly production for each crew of 150% of the basic salary. The senior officers also have one compensation system (Sharma 45). They are not entitled to bonuses, retirement plans, profit sharing, or pensions, and base salaries are set well below the industry averages.
Similar to other aspects of business, the human resource management profession needs to be in a position of measuring in relation to the transaction management. This is as well as the impacts of positive evaluation on the business. The utilization of metrics enables the determination of the effectiveness is the start of the shift of perceiving the role of HR as administrative. With the Nucor focus, the function shifts to viewing HR teams as strategic partners in the firm. Actually, the subsequent sections report that the employees have a critical future HR consideration in terms of organizational effectiveness. In addition, the support of the HR's critical role forms a strategic element in collaborating with management. This industry valuation notes that in places where HR departments are traditionally focusing on the measure of their individual effectiveness, there are forms of evolving recognition to provide organizational value (Armstrong 90). The measuring of the effectiveness across the whole business organization allows the employees to see direct correlation between their actions and the paychecks as major incentives.
For Nucor, this is strength of the remuneration system. This approach prompts high performance to a point that the employees refuse to take some time off. The company started forcing them into taking time off through giving the employees four off days extra annually. Irrespective of this move, only a section of the employees embraced the four extra days. Notably, this shift is cognizant as it is a representation of the movement from counting the hired numbers into careful determination of the ROI for individual and collective hires in the end. Taking initiative past measuring turnover, this is a form of approach, which takes into consideration the 'bad' and 'good' turnover together the comprehensive forms of replacement hires (Randhawa 67). The global demand for products of steel expands continuously with time where the demand domestic producers are not able to meet. The choices made regard requirements of the domestic consumption. The Nucor Corporation continues to thrive in the industry through a workforce consisting of farmers, mechanics, as well as other motivated workers.
Armstrong, Michael. A Handbook of Human Resource Management Practice. New York: Kogan Page Publishers, 2006. Print
Randhawa, Gurpreet. Human Resource Management. New York: Atlantic Publishers &Dist, 2007. Print
Sharma, S. K. Human Resource Management: A Strategic Approach to Employment. New York: Global India Publications, 2009. Print