3.Human Resources and Job design

 

At the end of this lesson, we are now able to say that:

Human resources consist on managing labor and design jobs so people are effectively and efficiently employed.
Several constraints apply to Human Resources and for finding them we must ask ourselves these six questions: “Who, where, when, how, procedure, what”.

 

Terms that a manager should take into account to make his company work:

 

Eventually, a visual workspace of quality satisfies in the best way workers. Flat screens are a good example.

All the methods we have seen are used into Human resources and job designs. If used in the right way, a company can make productivity reach the highest level possible and workers feel enthusiastic about their condition at work.

 

 

Exercises:

Lincoln Electric’s Incentive Pay System
Cleveland’s Lincoln Electric was founded by John C. Lincoln in 1895 to make an electric motor he had developed. When his brother James joined the organization in 1907, they began emphasizing employee motivation. Since that time, the company has endorsed the message that the business must prosper if employees are to benefit. Today, Lincoln is a $440-million firm with 2,400 employees. About 90% of its sales come from manufacturing arc-welding equipment and supplies.
The company has encouraged workers to own a stake in their employer by allowing them to buy stock at book value. (The employees are required to sell the stock at book value when they leave.) Approximately 70% of the employees own stock, and together they hold nearly 50% of the outstanding shares. Most of the remaining stock is held by members of the Lincoln family who are not involved in company operations.
Factory workers at Lincoln receive piece-rate wages with no guaranteed minimum hourly pay. After working for the firm for 2 years, employees begin to participate in the year-end bonus plan. Determined by a formula that considers the company’s gross profits and both an employees’ base piece rate and merit rating, it might be the most lucrative bonus system for factory workers in the United States. The average size of the bonus over the past 56 years has been 95.5% of base wages. Some Lincoln factory workers make more than $100,000 a year. In recent good years, average employees have earned about $85,000 a year, well above the average for U.S. manufacturing workers as a whole. However, in a bad year, Lincoln employees’ average might fall as much as 40%.
The company has a guaranteed-employment policy in place since 1958. Since that time, it has not laid off a single worker. In return for job security, however, employees agree to several things. During slow times, they will accept reduced work periods. They also agree to accept work transfers, even to lower-paid jobs, if that is necessary to maintain a minimum of 30 hours of work per week.
The company calls the low cost of high wages its incentive-pay system. Each employee inspects his or her own parts and must correct any imperfect work on personal time. Each is responsible for the quality of his or her own work. Records are maintained to show who worked on each piece of equipment. Should inferior work slip by and be discovered by Lincoln’s quality control people or customers, the worker’s merit rating, bonus, and pay are lowered.
Some employees feel the system can cause some unfriendly competition. Because a certain number of merit points is allotted to each department, an exceptionally high rating for one person may mean a lower rating for another. These pressures have led Lincoln to occasionally consider modifications to the system.
Overall, however, the pressure has been good for productivity. One company executive estimates that Lincoln’s overall productivity is about double that of its domestic competitors. The company has earned a profit every year since the depths of the 1930s’ Depression and has never missed a quarterly dividend. Lincoln has one of the lowest employee turnover rates in U.S. industry. Recently, Fortune magazine cited Lincoln’s two U.S. plants as among the 10 best managed in the country.

 


DISCUSSION QUESTIONS
1. How are labor standards used to establish an incentive system such as this?
The company has a guaranteed-employment policy. Employees agree to work transfers and also in some cases to maintain a minimum of 30 hours of work per week.


2. How and why does Lincoln’s approach to motivating people work?
Lincoln gives bonuses to the employees by giving them a part of the company profits. – It´s a optimistic motivation.
Negative motivation – Records of works of each employees are made so that to each product that does not work correctly, the company can tell who made the mistake. Then, the bonus salary would be increased or decreased.


3. What problems does this system create for management and the employees?
This system creates for employees an unfriendly place of work and this leads to ¨rat race¨, competition among employees.
In good years employees could earn twice more, but in bad years employees average might fall as much as 40%.

 

4. What types of employees would be happy working at Lincoln?
Employees with such a features:

 

 

 

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