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Vol. 48, No. 1
Profit Sharing at Lincoln Electric
At Cleveland-based Lincoln Electric, a manufacturer of welding equipment, employees are paid a salary plus annual bonus based not on how well or how hard they work but on how much work they do and how much the company sells.
The upside: Some workers are paid more than $100,000 in a good year, and employees with seniority are guaranteed a job for life as long as they meet minimum performance standards.
The downside: Employees are responsible for their own health care and do not earn sick days or holidays. They can be transferred to a different job, forced to work overtime or be given reduced hours as the company sees fit.
The pay plan has evolved over the years, but the basic philosophy is the same, says corporate spokesman Roy Morrow. Top producers earn top dollar. The firm has paid a bonus every year since 1934.
Even in 1992 and 1993, when the company incurred financial losses through foreign acquisitions, the company borrowed money to pay the bonus to U.S. employees who had met their goals. And though Lincoln Electric is increasing its emphasis on team performance, the promise of big individual rewards will remain "a piece of the culture here," Morrow says.
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