Economics correspondent Paul Solman revisits Lincoln Electric, a welding manufacturing company based outside Cleveland, Ohio. Through its use of merit-based profit-sharing and a no-layoff policy, the firm is an unlikely Rust Belt success story that hasn't laid off anyone for financial reasons since World War II.
via pbs.org
This report from the PBS NewsHour on July 13, 2011, attracted my attention at first merely because it was from a hometown company. But I found the story of pay for performance really fascinating. The managers in the story acknowledge that it's harder to administer a system like this, and the employees acknowledge that it's not for everyone—they don't feel that everyone can produce at the level required. I made an immediate association with the contract proposed to teachers in Washington, DC. They were offered a chance to earn higher salaries or bonuses if they gave up tenure. I don't think teaching results are exactly similar to manufacturing productivity, but I wonder how this model could have been applied here, and with what results.
