Employment Guarantee Programs

Consider the case of the US company, Lincoln Electric, an American manufacturer of welding supplies and equipment, which has been the subject of many business school case studies over the past several decades as well as the book, Spark: How Old-Fashioned Values Drive a Twenty-First-Century Corporation, (Frank Koller, PublicAffairs, 2010). The company has become well known for its pledge of “guaranteed continuous employment,” with a commitment to its employees not to lay them off for economic reasons.

Hallmarks of the Lincoln Electric employment model include:

A bonus system: when the company has a profitable year, the employees share in the success with an end-of-year bonus,
In lean years, as an alternative to reducing the workforce, the company has reduced hours for the workers: all employees’ hours might be reduced to 32 hours, rather than a more standard US 40 hours per week, but they have not lost their jobs.
A complex piecework pay scale allows workers to earn higher wages based on their own performance.
There is no union. An employee advisory board manages relations between workers and management.
There are no paid sick days. The employer considers that its employees are being paid to show up to work and contribute, not to stay home.
(You may choose to do additional research on the Lincoln Electric company on your own, if you are interested.)

Create a post in which you respond to the following:

What do you see as the possible benefits or pitfalls of a guaranteed employment policy? How do you think it would affect employee morale and productivity?
Do you think a guaranteed employment policy could be replicated in your company or industry? Explain your rationale.

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