Lincoln Electric Case Study

After the explanation of the crucial importance of the incentives plan in the strategy set up by Lincoln Electric, we are now going to understand why does it work so well for the employees together with the company in USA.

It is undeniable that a large portion of Lincoln Electric’s success lies on its unique management style introduced by James Lincoln in 1914 when he took over the managerial leadership of the family company. Based on two major components which, as explained previously, are the calculations of wages on a piecework basis and a merit-rating system determining a yearly bonus; the incentives plan ultimately led to the satisfaction of the workers as well as a competitive advantage for the company.

On one side, the incentives plan has been working very well on the employees since its creation. The underlying magic is, in one word, MOTIVATION which could be defined as the process of stimulating people to actions to accomplish their goals. Lincoln Electric succeeded over the years to develop a unique plan to motivate and enhance workers.

As seen in class during the session number three through the McClelland’s need theory, individuals acquire three types of needs as a result of past experiences and need to fulfil them in order to be fully motivated: Achievement needs, affiliation needs and power needs. The success of Lincoln Electric resides in the fact they succeeded to reach them all through its incentives plan.

Firstly, the achievement which corresponds to a need of competition and challenging goals. Lincoln Electric succeeded to fulfil this need principally thanks to its merit-rating system that determine the yearly bonus. It introduced competition and challenging goals for the employees.

Secondly. the need for power which could be described as a need to make an impact, a difference and being important. Lincoln Electric understood very well this need and reached it