Although the practice of Nucor and the appreciation of both managers and employees have revealed that this system seems to be working, the situation must be changed in order to increase and to maintain efficiency.
The company's motivational system is another area of interest in relation with HRM practices. This is because the company admits to not believing in a formal motivational system that would refer to formal rewards and punishments. The company's managers consider that a formal motivational system would be less efficient than the one implemented by Nucor. Also, employees probably feel more at ease with an informal system rather than with a formal one.
Another HRM issue is represented by the company's intention of creating an egalitarian culture within the company, and therefore increasing employee motivation. Although such an approach may seem like a good thing, on medium term and on long-term it may produce the opposite effects.
This is because employees may be more likely to satisfy average efficiency and productivity standards that most employees reach, rather than trying to reach higher levels of individual performance.
Related or Unrelated Diversification
Addressing a strategy...
Given the economic and financial crisis that is affecting all industry sectors and all geographical areas, and the situation of the steel industry, it would be more efficient to focus on related diversification for the moment.
Recommendations
In order to develop and implement a successful strategy at Nucor, the HRM problems must be solved. This is because the human resources represent the most important resource that the company can exploit.
For example, the company must develop job descriptions for each position. This can be achieved through the collaboration between HR people, managers, and employees. The implementation of job description is intended to increase productivity, and to protect both the company and its employees.
In addition to this, the company must develop and implement a formal motivational system. By having clear rewards, employees will be motivated to reach the established objectives. Also, employees must be aware of the punishments they could receive in case they do not reach these objectives. This is also helpful for potential employees that should have an idea regarding such aspects at the company.
