Ebrahim 1
HRM 601 – Organizational Behavior
19 November 2019
Exam Three
Nucor, in what seems to have been unintentional, has become an organization in which
has become the face of this century’s revolutionary performance based managerial system. The
company’s ability to define exactly what its workplace culture stands for and what is expected
from every employee has enabled it to filter and attract the “perfect employee”. In addition to
rewarding employees for good work, incidents where poor quality work occurs are followed with
a penalized paycheck. Nucor’s ability to give employees a feeling of empowerment, importance
and ownership of the work they complete ensures motivated and performance driven behavior,
fosters innovation and cooperation and diminishes feelings of inequality.
The most significant effect of Nucor’s performance management system its ability to
energize and direct employee behavior, such an effect is also known as motivation. Nucor’s
ability to motivate employees, from the individuals working on the steel manufacturing floor, to
the office based employees working in a suit and tie, Nucor’s high risk business approach is a
system in which many organizations refuse to partake in. A company’s workplace culture is
sometimes the deciding factor when it comes to an employee’s compatibility with an
organization. In Nucor’s case, their performance management system is very adaptable and
fitting with the various personality types that come with an employee. The system of traits and
psychological characteristics that impact how the employee acts and interacts with others is
something that Nucor very subtly implements upon its employees. Because one’s behavior is
dependent on one’s personality, and a specific type of behavior yields a larger paycheck, Nucor
has crafted a system in where a specific personality type eithers morphs into what is favorable or
attracts employees who already possess this favored personality trait.
Ebrahim 2
Nucor Steel’s performance management system is heavily bounded by performance and
reward. By very explicitly defining the goals of every employee, which varies depending on
position, workers have a clear cut understanding of what is expected of them and the result of
meeting and sometimes surpassing these defined expectations. As previously mentioned, Nucor,
with the implementation of their specific managerial system, weaves out personality types in
which do not match or are not compatible with the company’s general workplace culture by
rewarding employees who display performance that is favorable to their specific personality
group. In a very similar fashion, Nucor’s system is favorable towards some motivational theories
over others; however, the theories that it does apply to extend and reach over a large group of
individuals. Those workers who are motivated and gain energy and direction through a
performance vs. reward basis thrive off of this system. In addition to this, those who thrive off of
the psychological satisfaction that comes from achievement are able to reap both a materialistic
as well as mental reward when it comes to a good work performance. If the performance system
in place is executed well, the input vs output ratio that those workers who identify with the
equity theory utilize in a means to determine whether their work is just and balanced should be
consistent and level throughout the entire system. This meaning that the input vs. output ratio is
very just and fair. In other words, the work that a worker is putting in and bringing to their
everyday work is compensated appropriately with a reward system and is equal to the
compensation their peers are also experiencing. With the existence and utilization of a system in
which not only caters to a very large percentage of motivational theories, the system is open to
many people with specific personality traits. Though it is readily accepted that personality is
something that changes very little if anything at all, Nucor has implemented a culture where
specific personality types are favored over others meaning that if ones personality trait is not a
Ebrahim 3
match with their workplace culture, it ends up either transforming or not fitting at all. A filtering
system in which gives employees the opportunity to change really become well rounded
employees who are very invested in their own personal and professional development.
One of the biggest elements to Nucor’s success is the fact that everyone’s work impacts
everyone. In other words, everyone’s work matters; regardless of your place on the corporate
chain everyone’s success and ultimately everyone’s paycheck ends up being dependent on those
workers on the front line. In many businesses, especially those in which are heavily bureaucratic,
those at the bottom of the hierarchical pyramid feel extremely detached and disconnected from
their everyday work. More times than not, those employees at the bottom of the chain feel
unheard, and are filled with a sense of uselessness, as if all of the work in which they are
completing on a daily basis has no value and contributes nominally. However, in this case, every
single employee’s work means something to not only their paycheck, but everyone’s paycheck.
This gives employees a sense of importance which gives the workers a team mentality. Such a
mentality ends up creating a very close knit work culture that not only links the entire business
chain, but ends up linking the success of one plant with another plant across the country. “It’s
about talking to them [frontline workers], listening to them, taking a risk on their ideas and
accepting the occasional failure.” (Byrnes, 57). Those employees who are on the frontline on a
daily basis may surprisingly be more insightful to the processes in which they are completing
every day. This meaning that sometimes an operator, with possibly little to no formal education,
may actually know more about specific things than let’s say a plant manager or team leader for
example. This is why “taking a risk on their idea” really is a useful technique to use.
With the continuous growth of Nucor Steel, plant acquisitions and portfolio expansion
become inevitable. As the volume of product being produced per plant decreases due to the
Ebrahim 4
increase in the number of plants producing said product, facilities are forced to make changes.
Employees begin to become accustomed to their work reflecting paycheck and when that work
decreases and in turn leads to a decrease in pay, most are not at all thrilled. So, due to the nature
of the situation that arises, employees and supervisors are forced to make some changes and
come up with some new ideas of how to increase production volume. As mentioned in the
article, “General Manager Ron Dickerson has focused more of Crawfordsville’s output on types
of steel that are harder to make, more profitable, and less threatened by imports.” The approach
of this specific general manager can be seen as equity theory in action. Mr. Dickerson identified
that some plants were being targeted and resulted in unfair repercussions simply due to their
geographical location. In a means to level the playing field, Dickerson was forced to seek
fairness and balance by introducing entirely new products to the company’s portfolio. Due to Mr.
Dickerson’s yearning for justice and achievement, innovation and cooperation was forced as
Dickerson behavior of an individual who is motivated by intense psychological satisfaction and
fairness.
By creating a performance management system that energizes and directs employee
behavior, fosters innovation and cooperation and diminishes feelings of inequity, Nucor Steel
was able to completely redefine and revolutionize a business model which has proven ineffective
and outdated. By setting very well-defined responsibilities and goals and creating a reward
system in which appropriately compensates the work inputted and the quality of the product
outputted, Nucor is able to not only keep the employees happy and engaged but is able to create
a total quality management system in which is continuously improving and keeps its reputation
protected. By crafting a reward system in which is driven by cooperation and innovation, specific
Ebrahim 5
and certain personality and motivational theories are favored due to either their extrovert nature
or because of their need to seek fairness and achievement-based satisfaction.