Emphasis on employees key to corporate success
The growing campaign against retail giant Wal-Mart and the amazing success of steelmaker Nucor provide a valuable lesson in contrasting corporate philosophies.
Bentonville, Ark.-based Wal-Mart's treatment of employees has spawned a massive campaign to force the nation's No. 1 private employer to change its business practices and give its workers better pay and health care benefits.
Meanwhile, Charlotte, N.C.-based Nucor — also a non-union business — has seen record profits and a 387 percent shareholder return over the past five years by empowering its 11,300 workers and linking pay to performance.
A special report in the May 1, 2006, issue of Business Week magazine (online at www.businessweek.com) highlights Nucor, which operates a mill in Decatur, as a leader in creating a mindset of employee owner-operators.
Nucor gained renown in the late 1980s for its radical pay practices, which base the vast majority of most workers' income on their performance. Legendary leader F. Kenneth Iverson's insight: that employees, even hourly clock-punchers, will make an extraordinary effort if you reward them richly, treat them with respect and give them real power.
Nucor employees' base pay is about $10 per hour. But Nucor gave out more than $220 million in profit sharing and bonuses to the rank and file in 2005. The average Nucor steelworker took home nearly $79,000 last year. Add to that a $2,000 one-time bonus to mark the company's record earnings and almost $18,000, on average, in profit sharing.
The Business Week article relates how front-line Nucor production workers don't hesitate to jump on a plane to help with a problem at a sister mill across the country.
When was the last time you saw a Wal-Mart associate walk across an aisle to help a fellow worker or customer?
Wal-Mart could learn a lot from Nucor.