Nucor SteelEmployees from Nucor Steel that were off duty dropped what they were doing and travelled to the factory as fast as they could when they heard that the electrical grid had failed. They helped get the plant back online in just 3 days compared to the estimated week. How do you get employees to volunteer to do this? The answer is within the structure of Nucor. Nucor allows employees to enjoy the benefit of doing well; this also means they take the heat also when production is poor. Nucor has a pay structure that allows employees to reap benefits of producing the steel requested in orders. Meeting this obligation efficiently and effectively grants rewards. Nucor’s guaranteed base pay is less than competitors however with bonus it can triple that of competitors. Also, the organization is flatter than most and the CEO works alongside workers and does not exude a “better than employee attitude.” Management often encourages competition on safety and production goals. These driving forces have allowed employees to feel a sense of ownership.
I chose this article after hearing from a Nucor manager in class. It was great to compare and contrast what he said and what the article said. In all honesty, they aligned perfectly. Nucor has a unique pay structure and the structure has allowed for them to be a fast growing company and one of the top performers in the S&P 500. The employees share in the pain and the glory of company. They have a strong incentive to make sure they do all they can to cut material and labor costs and contribute to a safe work environment. I was surprised that the manager in class said that the employees often arrive early for work so that they can quickly transition to a new shift. I plan to have a career in human resources and this is a great example of a compensation plan that provides the right incentives which in turn produces great results. I have had jobs where employees were not rewarded for putting in extra effort and as
I have only completed a day work with a company to get a salary. I can say this is something that employers would love to have in that situation, but that it would not be available in a paid position such as a consultant. Why would a company expect its employees to work a 12 hours shift at a company that can afford to do this in a 24 hour period? I’m sure this would be the largest compensation cut for any American. In my opinion, this pay structure and the employee incentive structure of management should be implemented to further increase employees’ earning power and earnings potential. With a salary of $3300 the Nucor paid over $600 per month to over 500 workers over 6 months. Nucor has no pay equity with respect to the workers that the employee is paid to represent. This is the only pay agreement currently in production that is designed to provide a standard of living guarantee and a safe workplace. In response to a C.I.A. audit conducted in February of 2010, the Nucor, which was in charge of the financial reporting, found a nonviable credit score that had led to a 30 to 42.3 negative grade on an F-1® score. Nucor now has an excellent rating of 50.3. This demonstrates how highly Nucor can afford to implement a similar salary contract over and above the current level of performance required of a large employer. I have been informed that there is the potential that Nucor may hire more C.S.As. I have written about the need to hire outside workers who have a very high standard of being competitive, and if you work for Nucor, you will get the lowest possible wage possible from your work. I understand that most of you believe that Nucor could not attract an acceptable number of employees who do not have the same levels of training and certifications as current employees. If Nucor had done the above mentioned compensation work, the Nucor would not have been able to meet their obligations. The C.I.A. reported that a majority of Nucor’s salary is paid off in 401(k)-style investments rather than with a traditional fixed income plan. Nucor would have been only about $600 more than the average American. My question is: was Nucor going to continue to increase hours to continue making money on their pay base ? I would recommend Nucor to other employers who are looking to hire in a variety of roles. The C.I.A. report says that a majority of employees don’t want to earn more than $12k a year through a low wage. However, employees will have more money taken up by their employer if they manage to pay their wages in the same amounts. If paid the same amount each year, that increases to between $900 and $1200 per year. Nucor is only offering that to those with some cash left over over and they could work better on their own. To be fair to Nucor, that is a big step in any compensation package in our culture. The C.I.A. reported that in the first six months last year, employees accounted for over 7% of their total pay. The C.I.A. report says only a small proportion of workers received significant pay increase on time to make their income possible. However, a sizable percentage of this compensation package comes from payroll, with more than 6% coming from the general corporate sector. In addition, the only part of the compensation package that the Nucor report mentions is on a severance pay package and that includes the cost of the benefits