Nucor Uses an Integrated Approach to Employee Motivation

Nucor Uses an Integrated Approach to Employee Motivation
Nucor has abandoned the conventional ways of running an organization.   They embrace the McGregor theory Y assumptions about people.   They view their employees as self-energized, committed, responsible, and creative beings (Kreitner & Kinicki, 2008, p. 8).   Because management abandoned the old command-control model that has previously dominated business and removed layers of management several positive consequences emerged. Trusting employees at all levels to solve problems lead to organizational based self-esteem, which all companies should strive to obtain.   Nucor’s approach to motivation has been outstanding.   This is evidenced by the fact that their unusual pay system has been so successful.   Nucor employees’ base pay is much less in comparison to comparable employees in the industry, but because the company ties bonuses to performance, an employee can actually triple the average steelworker’s take home pay.   In Nucor’s steel making operations, there are over 8000 people who are among the best paid in the industry, yet Nucor has the lowest labor costs per ton of steel produced safely (Nucor Corporation, 2009).   Not only are they paying for performance, but it is based on team performance, and managements pay is tied to how the company performs overall.   Everyone works together on common goals thereby forming organizational commitment.   .   Another benefit of people earning according to what they produce is it can be determined simply and objectively. The business operates collectively with active free exchanges of ideas and solutions across divisional, geographical, and functional boundaries.
According to former CEO, Iverson a commonly heard phrase at Nucor is “trust your instincts” (Nucor Corporation, 2009), which would not only foster self-efficacy, but also a great sense of empowerment.   In fact empowerment is a way of life at this organization.   Decision-making is “pushed to the lowest level...