Employee Engagement: Art of Motivation

Nucor’s practices are a true example of employee engagement where the employees are not treated as workers but owners. Nucor is unique as it distributes the power to the front line by using a flattened hierarchy. Managers listen to the feedback, allow the employees to take risk on their own ideas, and accept occasional failures. This promotes employee engagement as well as increases employee satisfaction.

Employee empowerment is illustrated in the article when new, efficient plants were acquired making existing plants redundant. The company encouraged the employees to be innovative thus empowering them to transform the existing plant into a more productive and unique plant. Nucor is successful at making empowerment work by building trust and creating autonomy in employee decisions.

Nucor’s compensation plan has been voted as a “best practice”. At Nucor the pay disparity is modest the CEO unlike other U.S. companies receives a compensation which is 23 times the average steelworker. At every level within Nucor pay for performance system is consistent. The ‘CEO’ is rewarded lower stock options, he has restricted stock, and long term bonuses which only materialize if Nucor beats the competition and outpace a sample group of other high performing companies. The bonus of a ‘General Manager’ depends on the company’s return on equity not only on the performance of their plant, this method promotes teamwork. General Managers’ are motivated to assist other plant’s achieve their targets as they know their ‘paycheck’ depends on high productivity at all plants. The ‘Department Managers’ receive a base pay which is lower than the market average; their bonuses depend upon the Return on Assets of their plant. Thus in a good year they may receive 75% - 90% bonus of their base pay and in a bad year may receive none. This motivates the department managers to ensure their plants are performing efficiently and productively every year. The ‘steel worker’ also receives a base pay...