Management Cases by Peter F. Drucker

Author:Peter F. Drucker
Language: eng
Format: mobi
Publisher: HarperCollins
Published: 2009-02-05T14:00:00+00:00

Case Number 27

Performance Development System at Lincoln Electric for Service and Knowledge Workers*

A management-consulting firm was engaged by the Lincoln Electric Company during 1996 to review the use of a merit rating system for all hourly and salaried nonproduction personnel. The consultant conducted focus-group meetings with employees who had previously expressed some dissatisfaction with the way they were being evaluated and rewarded. The result of these focus-group meetings led to recommendations to management that a new merit rating system be developed for nonproduction employees.

As a result of this study, a new system called the Performance Development System (PDS) was introduced at Lincoln Electric in late 1997, preceded by three months of training that was conducted by representatives of the Human Resources Department. The PDS is applied to all salaried and hourly nonproduction employees and to the managers of these employees.

Four steps made up the Performance Development System:

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