c



 c  



October, 2009

By Kevin Belt

In the late 1980s, former Nucor CEO F. Kenneth Iversonpecie to embrace the iea that
employees, ³even hourly clock punchers,´ will perform better when given incentives.(Byrnes &
Arnt, 2006) Through practices still viewe toay as innovative, Iverson evelope a unique an
egalitarian culture at Nucor. Many of these changes involve empowering employees an
treating them with respect. The firm opene factories in poor farming communities²boosting
the average income an reucing the unemployment rate in those areas. (Hopkins, 2003) New
hires were often sent to existing plants an encourage to contribute fresh ieas for
improvement to existing operations or given responsibilities (such as orering new parts)
previously assigne exclusively to supervisors. (Byrnes & Arnt, 2006)

Nucor¶s employee pay structure is another tangible an striking eparture from typical
management practice. In terms of base salaries, the average Nucor steelworker makes $10 per
hour, as oppose to $16 to $21 an hour for workers at comparable firms. The base pay of
Nucor¶s epartment managers is likewise only 75% to 90% of the market average. The base pay
structure, however, is situate within a larger compensation strategy esigne to foster
motivation an prouctivity throughout the company. Sixty-six percent of a steelworker¶s
weekly pay is tie to performance. Up to 20% of this total comes from Nucor¶s profit sharing
program, which takes 10% of operating profits an ivies them among all employees
(excluing senior officers). This program le to an average 2005 salary of $99,000 for Nucor
steelworkers²after a $2,000 bonus given to all employees ue to recor profits an $18,000 in
profit-sharing. In comparison, the average steelworker at U.S. Steel ha only 20% of his salary
tie to performance an earne only $70,000 in 2005.(Byrnes & Arnt, 2006) This company-
wie emphasis on performance is reflecte in a miniscule absenteeism rate of 1.0% per
year.(Smith, 2001)

Similarly, the salary structure for top O





 
management reflects the same performance-base 
 
 
 
 

philosophy an principles. Senior officers earn 






slightly less per year in base salary than their peers, 
  





but with a heavier percentage of their salary tie to 
 

  



financial goals, the senior officers en up earning 

  



 

!
more than their peers in the long run. With a base  
! 




 
salary of about $700,000, CEO Dan DiMicco
 
 
  
 !"#

makes 25% less than the CEO at U.S. Steel but 
 

#






!
makes over $800,000 more in the long run, #$
 

 
 


assuming the company meets its financial #$




  
goals. (Byrnes & Arnt, 2006) (Lunan, 2004)
 

 

!


 


 
!

 
# 

Therefore, the wellbeing of Nucor #$
! #
 



!

executives is relatively epenent upon the 
%


! 
&
  "O
prouctivity of their workers. If prouctivity 

$'  
  
(
eclines an workers¶ salaries suffer, the CEO¶s )

 
($*
 +!
salary an benefits ecline as well. The workers 



  

 





know that the same factors impacting their income 
#
  
 
$#


also impact C-suite executives, proviing for a #
#
#$
 #
#$

share sense of fortunes²with regar to both risks 

 





 
an rewars²throughout the firm. (Byrnes & 
 

($



 

Arnt, 2006) 
 





# 



 









This µpay-by-performance¶ strategy seems to have benefite not only employee
satisfaction, but also the performance of the company. A year after Nucor purchase an Alabama
plant from another firm with no substantial capital investment an fewer workers, the plant¶s
prouction actually rose by 14%. This prouctivity is reflecte throughout the company, hitting a
peak in 2005, when Nucor prouce an shippe more steel in the Unite States than any other
omestic company. (Byrnes & Arnt, 2006) Increase profits have followe increase
prouctivity, leaing Nucor to be name one of the Top 30 performers in the S&P 500 from
1972 to 2002, by Money Magazine. (Birger, 2002) Consequently, BusinessWeek has ranke
them on the BusinessWeek 50 as number 1 in 2005 an number 4 in 2007. Such rankings are
base on the rate of return on investment an sales growth over a three year perio. The
BusinessWeek 50 has been publishe annually since 1997, recognizing the magazine's top
performers in each of the sectors that make up the S&P 500.

To create a successful performance-base culture an organization must focus on all

employees: hourly as well as management level an all those in between. By rewaring
prouctivity rather than job title or higher-level egrees, organizations are able to empower every
employee to work as har as he or she possibly can. Risks an rewars alike are share, an
ultimately all stakeholers benefit.

p
4 Ways to Detect if your Performance-Based Culture is more
than Lip Service
Contributor: c
p

Posted: 02/07/2011 12:00:00 AM EST | 

How many of you have worked for or currently work for an organization that claims to be
a ³performance-based culture´? Did you know you were working in a performance-
based culture before you were ³told´ you were working for one? Who told you it was a
performance-based culture? Someone from HR? Your boss? A peer, or the CEO during
an all company meeting?

Besides someone ³telling you´ that your organization is a performance-based culture,

what actions, activities, and processes exist that give you any sort of indication that it is
indeed such an environment? Lets¶ examine.

 
 


 




The term x

 is defined (general) as: Accomplishment of a given task

measured against preset standards. The term 

is defined (w/in an organization)
as: Pervasive, deep, largely subconscious, and tacit code that gives the 'feel' of an
organization and determines what is considered right or wrong, important or
unimportant, workable or unworkable in it, and how it responds to the unexpected
crises, jolts, and sudden change.

These definitions probably read as somewhat ³obvious´ and make sense to most. When you put them together to form a definition
for ³performance-based culture´, how does your understanding match with what you experience within your organization? Do you
think your organization is truly a performance-based culture, striving to be one, or just words used by the C-Suite? Certainly the
decision to create, pursue, and install a performance-based culture rests with the executive leadership team (C-Suite) and MUST be
consistently driven/supported on an ongoing basis by them as well. The executive leadership team has to lead by example and
insist on 100% adoption throughout the entire organization.
However, an organization can not claim to have a performance-based culture until the philosophy, processes, tactical execution,
and comprehension of what it means be one becomes inherent within every employee, and part of the organizational DNA. It is
much more than just the spoken words from the C-Suite or other senior leaders. Each and every employee must know exactly what
objectives they are accountable for executing, and how their performance against those specific objectives is going to be
measured.
º

 
 


1. Specific, Appropriate, Aligned Objectives
Each and every employee must know exactly what objectives they are accountable & responsible for executing. It is up to both the
organization and individual employee to make sure that the defined objectives¶ are the ³right objectives´. Having the right objective
means not only meeting criteria of the below, but also being aligned to the rest of the organization above that individual so that when
executed well, their accomplishment contributes to the overall success of the organization.
2. Timely
It is equally important in a performance-based culture to not only define the right objectives, but to make sure that such objectives
are defined, communicated to, and agreed upon by every employee in a timely manner so that the individual can plan and execute
successfully for self and organization.
For example, if a company¶s fiscal year mirrors the calendar year, January 1 is the official start of the new performance
period. Have you ever worked for a company that claims to be a performance-based culture yet they can¶t seem to get individual
goals and objectives set until March or April of the New Year? Organizational budgeting and annual planning is completed before
the year starts, therefore so must individual performance objectives & plans. It is up to the C-Suite to make timeliness for
establishing individual performance objectives a priority for the organization, IF they are going to truly have a performance-based
culture.
3. Actionable
Any defined and agreed upon objectives must also be actionable by the individual who is responsible for delivering them. For
example, for a middle-manager to have an objective of ³increasing shareholder value´ is not an appropriate objective for that
position based on the level of authority. An objective more appropriate and actionable by a middle-manager might be to ³deliver
client results on time and on budget for a specific portfolio of clients´.
4. Results are Measurable
At the core of any performance-based culture is the delivery of quantifiable, measurable results. There is absolutely no value in
giving an individual an objective if there is no way to measure whether or not the objective is ever met. This is usually the most
challenging component of establishing effective individual objectives, and the most important.
Additionally, and especially if there are financial considerations tied to an individuals measurable performance results, any
quantifiable results should be auditable.

p
 Building an Organizational Culture of Sustainability: Employee
Engagement
c




   



 

— p
— p
—  r

pp

These ays, we hear more an more that a

company¶s stance on social an environmental issues plays a significant role in choice of
employer. A recent survey foun that over 50% of American workers report being incline to
work for ³green´ companies. Women an Generation Y in particular want their company¶s
mission to go beyon profitability, encompassing benefits to the wier community, on social,
environmental an economic imensions (with men an Boomers not that far behin). They are
eager to work with companies in which they feel they can make a ifference.

These µvalue riven¶ iniviuals are like gol. Get them to work for your organization an fully
engage them in work that feels meaningful ± with outcomes they can influence an for which
they are recognize ± an they will go above an beyon. They will have prie in being
associate with the organization, recommening it to others as a great place to work, which in
turn will contribute to an improve reputation with customers. HR epartments have not misse
this tren, an now recognize that sustainability is a significant tool to recruit, retain, inspire an
motivate the workforce.

But how o you make sure that you fully engage your employees? How o you enroll not only
those who are alreay committe to sustainability, but also those who are sitting on the fence ±
or even cynical?

First, you nee to fin out where your employees stan. A written survey or focus group can be
use to gauge how employees view your company¶s commitment to sustainability, as well as
their own personal thoughts on environmental an social issues. You can gather their ieas on
what steps to take to avance sustainability efforts, an then fin out how employees woul
personally like to be involve. This information will help you buil your strategy for employee
engagement.
When people talk about employee engagement for sustainability, they typically think of ³green
teams´. However, there is far more to engagement than that. Traitional green teams often have
little or no involvement in the company¶s official sustainability efforts. They are typically
compose of environmentally-mine iniviuals, who are riven to green their lives at home
an at work. While many green teams have prouce fantastic results, full employee engagement
requires a much broaer strategy.

 

   


An employee engagement program will not go far without first establishing the management
infrastructure require to support sustainability. This means integrating sustainability into the
overall business strategy, with clear vision, goals an metrics. It means having strong executive
sponsorship an a collaborative governance structure for ecision making an resource
allocation. It requires a rewars an recognition program to support an reinforce sustainability
behaviors. You will also nee to put in place a project management structure to execute your
sustainability strategy, an allow your initiatives to scale throughout the business. With such an
infrastructure in place, you will be able to evelop a strategy that fully engages employees, while
fully realizing the benefits of their contributions.



    
 

With the founation built, the next step is to create the cornerstones of your engagement strategy.
On a 1-10 scale, how woul you rate your organization? Where are your biggest gaps?



,




—  

p pp p

 p p pp
 p
p
ppp pp p
 p p
— 

p  

p

p
p p  ppp
 p



-





— 
p p
p
 
p  p p




pp

 p 
pp
— V p

p
p
pp

 p
p p 
p p 


p
ppp

p


p
p
p 
p

 pp

-

+




— r
ppp

 p
p
p
p pp

p
 p p  p  p
p
 p  p
— r
 p 
p
p

p 
p p p

p
p p
  p
 p
— r
 p
p p  p 
p p p 
p 
pp
p

   pp

 p 
p
— r
 p
p ppV


  ppr

pp 

 p p
p
pp
 p


p
 — V p

p 
p p p
 pp

p
p
p p p
 
p

p

'



—   pp p

 p p p
!p p p p
p p

pp
 p
  p
— 
 p
p
 p p
p

 p
— ´
p
 pp p p

 p
— 
p

  p

ÕÕÕ'




 

 
#
*
. 
 
  



# 
ÕÕÕ

^ c 


Without fully engaging employees in your sustainability initiatives, you lose one of your most
ynamic an powerful tools to buil a culture of commitment, an potentially a competitive
ege.