You are on page 1of 15

Nucor Corporation

By Prof. Neha Patel

(c) Prof. Neha Patel, GLS MBA Programs

GLS MBA Programs . good customer service.Managers are given Decisions are made autonomy at each plant quickly without the need to wait for decisions from headquarters Plants can source there inputs from other Nucor plants or from the outside market. Neha Patel. How does Nucor create value? (c) Prof. Nucor is constantly innovating Use modern equipment Promote ◦ produce high quality products ◦ competitive prices.

GLS MBA Programs . individualized customer service and producing at competitive prices.Building steel manufacturing facilities economically and operating them competitively Continuous innovation. Mini-Mills Large applicant pool to hire from because they are seen as an attractive place to work. allows them to be very selective for who they hire Have a willingness to take risks. What is their competitive advantage? (c) Prof. Neha Patel. modern equipment.

wear same color hard hat at work  Policies promote teamwork and allow the company to grow from within because of open communication and experience from their employees   How does Nucor’s HR policies contribute to their success? (c) Prof. Neha Patel. including CEO.Four tier management structure Group-based bonus incentive plan that trickles up to management  They have a scholarship program for children of employees which promotes long-term employee retention  Managers have dinner with all employees with open forum for discussion on how to improve and increase innovation. GLS MBA Programs . allows employees to ask questions and managers to provide feedback  All managers.

Organizational Structure Employee relations principles Compensation Benefits HR Policies (c) Prof. GLS MBA Programs . Neha Patel.

Neha Patel.Chairman/Vice Chairman/President Vice President/Plant General Manager Department Manager Supervisor Organizational Structure (c) Prof. GLS MBA Programs .

Employees will have the opportunity to earn according to their productivity Employees should feel confident that if they do their jobs properly. GLS MBA Programs . reduce work week instead of fire or lay off employees Employees have the right to be treated fairly Employees must have an avenue of appeal when they believe they are being treated unfairly – grievance process Employee relations principles (c) Prof. they will have a job tomorrow – job security. Neha Patel.

GLS MBA Programs .  Production Incentive Plan Paid weekly bonuses based on production ◦ Based on actual output in relation compared to expected tonnages produced ◦ Based on group not individual performance ◦ Expected output did not change unless there was a change the production process ◦ If tardiness or attendance kept team from meeting goals. you lose your bonus for the week ◦ Output and bonus info for each team was posted at the entrance Compensation (c) Prof. you lose your bonus for the day  If you are 30 minutes late or absent. then no one received a bonus in the group ◦ 4 forgiveness days ◦ Maintenance personnel were assigned to each team ◦ Supervisors were apart of bonus teams  Received same bonus as employees  No bonus paid if equipment is not operating  If you are 5 minutes late. Neha Patel.

  Department Manager Incentive Plan Annual bonus received based on performance of the entire plant Non-production and Non-department Manager Incentive Plan Bonus based on each plant’s return on assets ◦ Based on return on assets ◦ A return of 25% or better was expected by the plant   ◦ Includes everyone not in previous 2 plans ◦ Every month each plant received a chart showing its return on assets on year-to-date basis  Posted in employee cafeteria   Senior Officers Incentive Plan Based on return on stockholder’s equity above certain minimum earnings Senior Officers earned less than other industry executives ◦ If Nucor did poorly. then Senior Officers would only receive their base pay  Compensation (c) Prof. Neha Patel. GLS MBA Programs .

corporate jets. GLS MBA Programs .  No company cars. parking spaces ◦ All employees traveled in economy class Not available to Officers ◦ Profit-sharing  Nucor contributed 10% of pretax earnings per year  15 to 20% was paid out to employees in March ◦ Scholarship program ◦ Employee stock purchase plan  Monthly purchase plan  Nucor contributed a 10% matching contribution ◦ Service awards       Holidays. Neha Patel. executive dining rooms or exec. vacation schedules and insurance programs were the same All employees wore the same green hard hats Company report contained the name of every employee 401K ◦ Matching contribution of 5 to 25% of employee contribution based on return on shareholder’s equity Each employee received 5 shares of stock for each 5 years they worked continuously Encouraged workers to recruit their friends and family to work for the company Benefits (c) Prof.

Scenarios Team 1 Compensation Determine Bonus amount Van Joyce Ken George Team 2 HR Policy Grievance Team 3 Benefits Determining Stock contribution Jessica Elvira Bea (c) Prof. Neha Patel. GLS MBA Programs Amy Yasu Jeffrey Darnell .

GLS MBA Programs . Every worker earns an average hourly wage of $10 and works 40 hours per week. there is a base requirement of 16 tons of good billets per hour. Neha Patel.You are the department manager of melting in one of the ‘mini-mills’ operated by Nucor Corporation. above that the workers earn a 4 percent bonus for every ton per hour. and you are working on the bonuses earned by the employees the previous week. Actual production per hour was 34 tons of good billets per hour. Determine an individual worker’s pay for the week without the bonus. the worker you are determining a bonus for was 10 minutes late to work one day and will lose their bonus for that day. What is his weekly earnings including bonus? Scenario 1 (c) Prof. In melting. How much will a worker make with the bonus for the week? Now consider. It is Monday.

In addition the employee has been with the company for three years. The supervisor would like to see the employee fired because he/she is unreliable. productive on days he/she was at work was 30 percent higher. The employee is additionally upset about not receiving bonuses for the days he/she was over five minutes late and weekly bonuses when he/she was over 30 minutes late. Your bonus is based on the plant’s return on assets. even on the days in which he was late. The employee claims that when he/she is at work his department is more productive than when he/she is not there. Arkansas. You have just received a request from an employee to review the performance evaluation their supervisor recently administered. What would you say to this employee? What action would you take? Scenario 2 (c) Prof.You are the general manager of Nucor-Yamato Steel Company in Blytheville. According to the reports you have on his/her department. The employee does not believe the evaluation reflected his/her performance. GLS MBA Programs . than days he/she was absent. Neha Patel. The employee in the last month has exhausted their four forgiveness days and has been late on more than one occasion.

Neha Patel. How much did you pay for your stocks last month?  According to the case.You are an employee at Nucor. GLS MBA Programs . How many stocks did you purchase? How many stocks more did you gain from the Nucor contribution? What is the value of the stocks provided to you by Nucor?  Scenario 3 (c) Prof. and you are about to complete your fifth year working for them in May. You decide to make the same purchase of stock over the next 12 months. Nucor matches employee contributions. In January you purchased five shares of Nucor common stock through the monthly stock purchase plan for $50 per share.

Neha Patel. GLS MBA Programs .Thank you (c) Prof.