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Incentive Program of Nucor Steel, Inc.

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            Nucor is a steel and steel products company that has been able to remain growing and profitable regardless of multiple problems in the steel production industry. This has been contributed by its committed workforce that observes Nucor’s basic philosophy to build steel manufacturing facilities economically and to operate them productively.

            The company rewards its employees with a compensation program based on the productivity of each individual. In 1965, Nucor was facing bankruptcy due to subsequent years of losses which led to change in the management team that rebuild the company around the major profitable operations.

            The name Nucor was adopted in the year 1972 and directed its energy towards two basic businesses; that is, the steel joist business which operated as Vulcraft, and the steel business that operated as Nucor Steel. Currently Vulcraft is the leading producer of steel joists and girders and standard building components in non- residential construction, whereas Nucor Steel is well known for its modern steel making techniques. (http://www.nucor-fastener.com).

Nucor location

            The strategic location of this company in the rural areas across America has largely contributed to its success. This has established strong ties to the local communities and its hardworking, dedicated workforce who enjoy attractive wages.        Nucor has also considered states that are committed to maintaining an enabling climate to business growth through reasonable tax structures and hospitable to the company’s commitment to remain union-free. Nucor and its subsidiaries today consist of nine businesses, serving targeted markets.


Nucor’s Management Philosophy

            Nucor philosophy states that Nucor builds steel manufacturing and steel products facilities economically and operates them productively. On the bases of this principle there is a decentralized organizational structure composed of only four management layers.

            The chain of command provides the general managers with autonomy to run each Nucor as an independent business with the day-to-day decisions made at the operating facility and not from the headquarters. The line of communication is open to employees in an informal and efficient manner.

Performance Based Compensation for Goal-Oriented People

            All the employees are provided with a unique performance-related compensation scheme that rewards goal-oriented employees. They are all covered under one of the four basic compensation plans, each featuring incentives related to meeting specific goals and targets.

  • Egalitarian Benefits

            Outrageous benefits to employees like company cars, corporate jets, executive dining places, extraordinary bonus, etc are not offered in this company.  All the employees have the same holidays, vacation schedule and insurance programs which encourage teamwork as a result of equality.

            This has contributed to the success of Nucor’s business. The company maintains a profit sharing plan for its employees below the level of an officer without contribution to the plan.

  • Building Teamwork for the Future

            With a well-balanced benefit program, incentive bonus plans, clear-cut employee relations principles and a streamlined management style; Nucor creates a teamwork spirit with its employees to build a better future. Annual meetings between the general managers and every employee give a chance to discuss problems relating to scheduling, equipment, organizational, and production.

Negative and positive influences

            The idea behind the success of this company has both negative and positive influence on the workforce and the organization. Fairness to employees contributes to morale boosting which helps them to be dedicated to their job hence the success of the company (Barnett D.F. & Crandall R.W., 1986). The pay depending on the performance of an individual heightens competition that contributes to the wellbeing of the company (Nelson, Bob, 1999). Employees in other companies should be encouraged to work efficiently to sustain the existence of the companies as is with Nucor steel Inc. This is in the quest to have their jobs stay put for tomorrow. If the company falls, the jobs also vanish(Nelson, Bob, 1999).

            Decision making sorely general managers within a certain branch can negatively affect a company if the idea is not viable. The senior management can be demotivated especially where they feel they should enjoy some privileges like having company cars, executive dinners, scholarships etc. this would lead to the failure of the company in terms of performance(Barnett D.F. & Crandall R.W., 1986).

            In light of these, Nucor’s incentive system should be maintained as it is one of the best strategies to govern a company for increased productivity. 


Barnett D.F. & Crandall R.W. (1986). Up from the Ashes: The rise of the steel Minimill in the U.S., Brookings Institution Press.

Nelson, Bob (1999). Incentives for All Generations. Nelson Motivation, Inc., Feb 1999

http://www.nucor-fastener.com. Retrieved on 28/4/2009

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