A study by researcher Sirota Survey Intelligence has found that firms with strong employee morale outperform similar companies with medium to low morale on the stock market.

In a special report, Business Week Online featured an article entitled, The Art Of Motivation: What you can learn from a company that treats workers like owners. Inside the surprising performance culture of steelmaker Nucor. The feature story described the high level of commitment exhibited by the steelmakers’ workers to get a troubled plant up and running. An excerpt reads:

No supervisor had asked them to make the trip, and no one had to. They went on their own. Camping out in the electrical substation with the Hickman staff, the team worked 20-hour shifts to get the plant up and running again in three days instead of the anticipated full week. There wasn’t any direct financial incentive for them to blow their weekends, no extra money in their next paycheck, but for the company their contribution was huge. Hickman went on to post a first-quarter record for tons of steel shipped.

The article goes on to say that Nucor has nurtured one of the most dynamic and engaged workforces around. Perhaps most compelling is “Nucor’s 387% return to shareholders over the past five years handily beats almost all other companies in the Standard & Poor’s 500-stock index, including New Economy icons Amazon.com, Starbucks, and eBay. And the company has become more profitable as it has grown: Margins, which were 7% in 2000, reached 10% last year.”

At Nucor, the core of motivation is about a steadfast focus on its people. That has boded well in the form of a loyal and productive workforce and increasing profitability. At times, “workers and managers exhibit a level of passion for the company that can border on the bizarre.”

One of the main motivators for Nucor’s employees is a bonus that is tied to the production of defect-free steel. While an experienced steelworker at another company can easily earn $16 to $21 an hour, a Nucor steelworker gets a guarantee of closer to $10. However, with the bonus structure that Nucor has put into place, by producing defect-free steel, an employee’s entire shift can triple the average steelworker’s take-home pay. Nucor gave out more than $220 million in profit sharing and bonuses and their steelworkers had a record salary that year. These two processes institute both a pride in workmanship and pride in ownership of the company.

More and more companies are following suit. Large supply chain and warehouse operations are now offering bonus for speed and seeing a record increase in productivity. Other industries offer rewards for zero-downtime and zero-defects. It all boils down to allowing the employee to share in the company’s success and showing how each individual contributes to the overall health and success of the organization.

On balance, the key is getting your associates to buy in to the fact that the company exists only because they are there producing quality products and services. Small business is not a Nucor with the kinds of revenue they have, but small business can create a culture of engagement and “ownership” also by just engaging their associates in the process. At O2 Media, where I am the President & CEO, every time we have a strategic shift, we have used the brainstorming session process to get our key associates engaged in our thought processes. It is amazing how many great ideas we get, but more importantly, our associates then “own the changes.” It takes time, but it is an investment that pays phenomenal dividends.

Read more about our case study and the Art of Motivation:
http://businessweek.com/magazine/content/06_18/b3982075.htm

My Quote of the Week-
Pity the leader caught between unloving critics and uncritical lovers. – John Garnder

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