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Competitive advantage - Essay Example

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There are no union based problems as employees are satisfied and trust the company for their good. Moreover, Nucor’s system helps employees earn more money than their…
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Competitive advantage
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Nucor Case Study Instead of a separate performance appraisal system, Nucor judges performance based on quality, productivity and profitability. What are the advantages and disadvantages of Nucor’s choice?
The primary advantage that Nucor gets out of its performance judgement system is outstanding labour relations. There are no union based problems as employees are satisfied and trust the company for their good. Moreover, Nucor’s system helps employees earn more money than their counterparts through innovative schemes. This ensures that the most productive people are brought to the front and appreciated accordingly. In most other workplaces, all people earn equal salaries whether they work equally or not.
On the downside, the worker’s pays are not guaranteed in any respect. If the workers end up producing products that are below quality expectations, then their pays are reduced accordingly. This helps to promote a sense of owning the company’s operations and workers are given a datum to define how their roles affect the company’s outcomes.
While Nucor does promote ownership and a greater sense of responsibility but all individuals might not eye the situation on the same footing. Some workers may be disappointed when they discover the blunt side of Nucor’s policy and may rush to other jobs where a fixed salary structure is available. Moreover, certain people in Nucor’s work environment may cause problems for others in an attempt to be more productive. Problems may include workplace politicisation, espionage etc. though this is a remote possibility.
2. What incentives does Nucor use to motivate and maintain its employees? Include both financial and non financial incentives.
Primarily Nucor relies on an innovative payment package for the baseline workers as an incentive. Workers are paid by the hour for fixed salary plus bonuses. Moreover, the company shares its profits with these workers too. This makes Nucor one of the best paymasters in the market. There are no unions at Nucor although Nucor does not discourage unions.
Similarly, Nucor has placed the names of its workers in its financial report in order to recognise their services. The pays for workers and executives is nearly the same as the workers can earn a lot while the executives are not paid excessively. Moreover, the executives are not given any benefits or perks just like the workers. This helps to promote equality which serves as an incentive too.
3. Many firms today use temporary, part time or virtual workers to reduce cost and gain flexibility. Nucor has not tried this. Should they? Why or why not?
Nucor should not try to hire temporary, part time or virtual workers to get their job done. The biggest power that Nucor has over its employees is their sense of ownership of the entire process at Nucor. This applies equally well to both workers and executives alike. The associations formed with the company have helped Nucor grow over the years. Expecting temporarily placed workers to do the same is unrealistic. Using temporary or virtual workers will only hurt Nucor’s business so Nucor should not attempt anything like it. Read More
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