Nucor Corporation

How does Nucor create value?

Managers are given autonomy at each plant Decisions are made quickly without the need to wait for decisions from headquarters Plants can source there inputs from other Nucor plants or from the outside market. Nucor is constantly innovating Use modern equipment
produce high quality products competitive prices.

Promote good customer service.

What is their competitive advantage?

Building steel manufacturing facilities economically and operating them competitively Continuous innovation, modern equipment, individualized customer service and producing at competitive prices. Mini-Mills Large applicant pool to hire from because they are seen as an attractive place to work, allows them to be very selective for who they hire Have a willingness to take risks.

How does Nucors HR policies contribute to their success?

Four tier management structure Group-based bonus incentive plan that trickles up to management They have a scholarship program for children of employees which promotes long-term employee retention Managers have dinner with all employees with open forum for discussion on how to improve and increase innovation, allows employees to ask questions and managers to provide feedback All managers, including CEO, wear same color hard hat at work Policies promote teamwork and allow the company to grow from within because of open communication and experience from their employees

HR Policies
Organizational Structure Employee relations principles Compensation Benefits

Organizational Structure

Chairman/Vice Chairman/President Vice President/Plant General Manager Department Manager Supervisor

Employee relations principles

Employees will have the opportunity to earn according to their productivity Employees should feel confident that if they do their jobs properly, they will have a job tomorrow job security, reduce work week instead of fire or lay off employees Employees have the right to be treated fairly Employees must have an avenue of appeal when they believe they are being treated unfairly grievance process

Compensation
Production Incentive Plan Paid weekly bonuses based on production
Based on actual output in relation compared to expected tonnages produced Based on group not individual performance Expected output did not change unless there was a change the production process If tardiness or attendance kept team from meeting goals, then no one received a bonus in the group
If you are 5 minutes late, you lose your bonus for the day If you are 30 minutes late or absent, you lose your bonus for the week

4 forgiveness days Maintenance personnel were assigned to each team

No bonus paid if equipment is not operating

Supervisors were apart of bonus teams

Received same bonus as employees

Output and bonus info for each team was posted at the entrance

Compensation
Department Manager Incentive Plan Annual bonus received based on performance of the entire plant
Based on return on assets A return of 25% or better was expected by the plant

Non-production and Non-department Manager Incentive Plan Bonus based on each plants return on assets
Includes everyone not in previous 2 plans Every month each plant received a chart showing its return on assets on year-to-date basis
Posted in employee cafeteria

Senior Officers Incentive Plan Based on return on stockholders equity above certain minimum earnings
If Nucor did poorly, then Senior Officers would only receive their base pay

Senior Officers earned less than other industry executives

Benefits
No company cars, corporate jets, executive dining rooms or exec. parking spaces All employees traveled in economy class Not available to Officers Profit-sharing Nucor contributed 10% of pretax earnings per year 15 to 20% was paid out to employees in March Scholarship program Employee stock purchase plan Monthly purchase plan Nucor contributed a 10% matching contribution Service awards Holidays, vacation schedules and insurance programs were the same All employees wore the same green hard hats Company report contained the name of every employee 401K Matching contribution of 5 to 25% of employee contribution based on return on shareholders equity Each employee received 5 shares of stock for each 5 years they worked continuously Encouraged workers to recruit their friends and family to work for the company

Thank you