An interesting article showed up in last week’s BusinessWeek about a company who’s philosophy strays from the norm.

What if you were paid for performance and had more of a stake in the success of your company than you do at a typical job?  What if your salary was the lowest in the industry, yet you bring home more money than any comparable employee in your industry?

Nucor (NUE)is a steel manufacturer and has plants all over the United States.  They are featured in “The Art Of Motivation“, a BusinessWeek article from last week (you might need a subscription, but it’s worth it!).  Interestingly enough, workers at Nucor are paid based on how well the company performs, and this includes the CEO.

Employees’ salaries are well below the competition, but if you add on the performance based bonuses, they take home more than anyone in their industry.  There is an internal competitive nature among the different plants to see who can churn out the most steel, and have the fewest defective runs.  They get a bonus for setting records, but if they find a defective batch of steel, they lose part of their bonus.  If that defective batch reaches the customer, they miss out on times their bonus.

It’s a very interesting concept, and gives each employee the incentive to help the company as a whole achieve high marks, not only industry wide, but internally as well.

It got me thinking about the incentive I had at my old job to perform well.  Actually, there was none.  I went to work every day, I did my job, I got paid, repeat until burned out.  If I engineered something miraculous, I still got my same paycheck, but my boss received the praise from the customer and any monetary incentive behind my miracle workings, which he quickly used to refurnish his house…  A few months later the company had “financial problems” and was forced to cut pay and hours.  Go figure.

I can’t say that I’d still be at the company if it were run like Nucor, but I probably wouldn’t be blogging about my old company right now if it was.

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