Lincoln Electric Company Case Solution & Answer

Lincoln Electric Company Case Solution

Lincoln’s human resource Distortion and Dysfunction

Piece rate systems


There are many reasons for employers to shift from piece rate to flat rate compensation. However, there are also several common myths about these two methods. These three human resource management practices are often cited as examples of these fallacies. First, they encourage the misallocation of labour and resources. Then, they increase the cost of doing business. In other words, flat rates are more efficient than fixed rates, but the costs of implementing such a policy are much higher.

Disadvantages of flat rate compensation. The first problem is that it makes it harder to compare different jobs. The second is that piece rate compensation is a more expensive method than flat rate compensation. In addition to these disadvantages, flat-rate compensation can drive workers to accept lower-quality jobs. This is because a flat-rate compensation system is more efficient for employers. In addition, flat-rate compensation models encourage overpaying and underpaying employees. (Baker, 2002)

Secondly, piece rate compensation can lead to high turnover. It is expensive to hire and train new employees. Furthermore, people are more likely to file lawsuits against their former employers than they are to sue their current employers. Lastly, flat-rate compensation models are not sustainable. This means that companies should consider a flat-rate compensation model, in which workers’ wages and benefits are more or less the same.


Human resource (HR) activities are a key factor in the performance of an organization. Employees are the most fundamental resource for a company, but their needs are constantly changing. This constant change requires human resources to adapt to new ways of doing things. These strategies must address the root causes of the people dysfunction in an organization. Hence, it is critical to develop a strategy that can solve the problem at the root level.

The British Industrial Revolution has brought about an unprecedented increase in worker demand. These workers worked long hours and often put in long hours. While productivity is an important factor, the happiness of workers is an important consideration in the workplace. Similarly, a business must consider the cost of labor and ensure that it will benefit from the costs of high-quality employees. In general, a company should strive to be profitable, and the goal of any employee is to improve the bottom line.

High-powered bonus plan


Distortions of human resource management have long been a problem, but they are becoming more pronounced these days. In fact, people are demanding higher pay for the same work. Those who want to take a job are more willing to leave a job with lower compensation if the company can offer more money than their old one. The Reserved Wage, a term used by economists to describe minimum pay, has risen by nearly nine percent since March, and the average annual salary has climbed by almost $10,000. According to a survey done by the Federal Reserve Bank of New York and the Conference Board, 49 percent of organizations with mostly blue-collar work forces reported that it was very difficult to keep their workers.

Many multinational companies’ chief executives have little confidence in H.R. functions. Most H.R. directors lack business knowledge and lack the ability to identify the best candidates for a company’s overseas subsidiaries. They also lack the commitment to the value of their overseas experience. These factors result in a distortion of human resource management. A more effective plan may not require a higher level of compensation, but it could help you get a better match for your employees.


A short-term solution to the problem of human resources is not a viable option for a company. To be successful, a company must tackle the fundamental issues that ails human resources management. It is imperative to address long-term problems. This will require staying power. While the difficulties are enormous, solutions need to have staying power to get through them. The most important challenge facing human resources management is the need to change conventional wisdom.

A recent study demonstrates that many companies have poor HR practices. Specifically, managers need to take care of routine personnel activities. For example, supervision is the oldest management skill, but is often overlooked by managers. Cost pressures, schedules, and economics can lead to careless practices. While effective supervision will help a company make better decisions, this skill can be difficult to develop. However, if a company aligns its human resource practices with business strategy, it can benefit the company by treating employees as valuable partners.

An organization’s most important competitive weapon is a loyal, productive workforce. However, the number of available persons and their differing attitudes and skills have become increasingly varied over the past decade. As a result, it is becoming increasingly difficult to recruit outstanding employees. This is made worse by the availability of mass education. Fortunately, the world’s leading human resource management (HRM) companies have learned that “people are people” is a myth and that the best employees are the most productive.

  1. c) How transferable do you think Lincoln Electric’s human resource practices would be to

Other geographies in which Lincoln does business globally? To other kinds of industries? Where do you think their practices would work best (worst)? Explain.

Lincoln Electric’s human resource

Among its human resource practices, Lincoln Electric includes an incentive system based on bonuses. This is designed to motivate employees to produce high-quality pieces and to meet specific goals, such as safety, continuous improvement, quality, and financial performance. The management of Lincoln Electric has not changed for many decades. The only change is the way employees are rated. Supervisors conduct appraisals two times a year, and then award merit marks. These merit marks are used to calculate annual bonuses. As a result, employees are judged on their dependability, creativity, quality, output, cooperation, and efficiency. The employee rating process also involves self-rating, which can be very ineffective if the system does not measure all aspects of the job. In addition, the process of rating employees is not transparent, and it is not governed by clear performance standards.

Transfer of Lincoln Electric’s human resource practices

Global Markets

After decades of phenomenal growth and profits in the United States, Lincoln Electric decided to expand its operations to other countries. While the company enjoyed record profits in 2008, 40 percent of its sales came from expanding its foreign operations. Despite this success, the company still had trouble managing people in these units. This is especially true in China, where Lincoln struggled to hire local talent. A more effective management approach is needed to ensure the long-term success of the company’s overseas operations.

Creating an environment that encourages employee motivation is important to the success of the company. In order to create a positive work environment, the company needs to encourage its employees to practice its values. It also aims to give equal employment opportunities for all employees. Its culture is important to its success. It focuses on ensuring that workers are motivated. As a result, it prioritizes a positive work environment. It also ensures equal opportunities and a healthy working environment for its employees. (Baron, 1999)…………………….

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