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Performance Management at Lincoln Electric Company and Southwest - Case Study Example

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Performance management at Lincoln Electric Company and Southwest Name Instructor Class 22 September 2012 Table of Contents Table of Contents 1 Introduction 3 Recruiting and Selection 4 Performance Management 4 Management Styles 4 Remuneration, Benefits, and Incentive Systems 5 Participation Level and Nature 7 Organizational structure…
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Performance Management at Lincoln Electric Company and Southwest

Download file to see previous pages... A common denominator that has been linked to their success is their concern for employees that trumps their concern for their shareholders (Schuler, 2012, p.572). These companies assert that if employees are well taken care of, they will do their jobs better, and doing so benefits customers and shareholders. Lincoln Electric is the top company that designs, develops, and makes arc-welding products, robotic arc-welding equipments, and plasma and oxyfuel cutting tools. It also leads in the brazing and soldering alloys industries. Lincoln owns 40% of the U.S. market share. Moreover, it provides its employees with a well-known Lincoln Incentive Management Plan, which results to above-industry-average productivity (Schuler, 2012, p.559). In 1995, the company attained $1 billion revenues, while at present, sales reached $2 billion (Schuler, 2012, p.559). Employee morale and productivity are good; while turnover is almost zero (Schuler, 2012, p.559). A similar company with strong employee focus is Southwest Airlines. It has led the low-cost airline industry by focusing on being the cheapest and most efficient operator in domestic regional markets (Jackson, Schuler, & Werner, 2012, p.578). Despite being a low-cost airliner, Southwest is known for on-time travels, excellent customer service, and safety (Jackson et al., 2012, p.578). In 2012, the company bought AirTran Airways for $1.4 billion. The acquisition is believed to increase revenue and capacity by almost 25%, although its direct impact on Southwest’s success remains to be seen (Schuler, 2012, p.580). Like Lincoln Electric, employee morale and productivity are high in Southwest through the joint efforts of its employee-based committees. This paper compares, contrasts, and evaluates the human resource management practices of Lincoln Electric and Southwest. Recruiting and Selection Recruitment and selection are attuned to the organizational needs and cultures of Southwest and Lincoln Electric. Recruitment is restricted to internal recruitment for most jobs in Lincoln Electric. Only entry-level positions are open to external recruitment (Schuler, 2012, p.561). Selection is performed by HR, which also happens in Southwest. In Southwest, however, selection is more refined due to specific employee attitudes that it looks for. This can be explained by the fact that Southwest operates in a service industry, while Lincoln Electric works in the manufacturing industry. Southwest has a stringent selection policy, where it spends more time, energy, and money in recruiting people who can fit the fun and collaborative culture of the company (Jackson et al., 2012, p.584). It has a People Department that performs the decisive function of recruiting and selecting personnel (Jackson et al., 2012, p.584). Personality tests and interviews support the rigorous selection process (Jackson et al., 2012, p.584). Hence, though both companies ensure that their employees fit company goals and culture through their recruitment and selection practices, Southwest shows extra dedication and uses more resources in recruiting people with the right attitudes. Performance Management Management Styles Both Lincoln Electric and Southwest have charismatic founders, whom employees find be empathic of their employees’ welfare, although Southwest has a “wackier” attitude to managing employees. In an employee interview, Trahan remarked that James Lincoln “ ...Download file to see next pagesRead More
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