Daily Video

July 19, 2011

Manufacturer Bucks Job Loss Trend With Unique Model

Although the recent recession hit manufacturers especially hard and many of them had to lay off workers, one plant in Cleveland, Ohio has found a way to buck the trend and not let anyone go.

Instead of paying their workers a set, yearly salary, the Lincoln Electric company pays them by the hour and ties the amount of money they make to the amount of work they do. So, somebody who has only worked there a month could make more money than someone who has been there two decades – it all depends on how much work each person accomplishes.

Using this model, the company was able to guarantee each worker at least 30 hours per week of work during the recession and avoided layoffs. The company’s model has been the subject of several business books and studies on how to run an effective manufacturing business.

Although they appreciate the job security Lincoln Electric offers and the ability to control their own destinies and wages, workers there say they have to work extra hard to keep pace and sometimes miss out on time with their families because of their desire to work longer hours and make more money.

Quotes

“In the vacation time, I came in and swept the floors in the factory so I could keep earning those wages during that period of time, too.” – John Stroicki, CEO, Lincoln Electric Company

“I think what Lincoln Electric is doing is striking a balance between competition at the individual level, so that each individual worker is trying to do the most, and, as a result, earn the most for himself, and the need for cooperation, where each worker is also very, very clear that he can’t or she can’t work on their own; they need to work together at the same time.” – Frank Koller, author, “Spark”

Warm Up Questions

1. What is manufacturing?

2. Which professions were hit hardest by the recent recession?

3. What qualities do employers generally look for in employees?

Discussion Questions

1. Based on what you saw in the video, do you think you would like to work at Lincoln Electric? Why or why not?

2. Based on what you learned in the video, what aspect(s) of Lincoln Electric’s model do you think allowed them to keep all their workers during the recession?

3. What is the difference between salaried work and hourly work? Which do you think you would prefer as a worker? Why?

Additional Resources

Video Transcript

Advanced Manufacturing is Focus of Chicago School

Lesson Plan: Looking for the Bottom of the Recession

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