1. How does performance-based pay motivate Nucor employees? Would this pay system be effective if Nucor did not also empower employees to make decisions? Why or why not?

Today Nucor Corporation is the largest producer of steel in the United States, so it is hard to believe it was once an underdog in a struggling industry.
What has set the company apart is a focus on motivating and empowering employees. The employee focus is illustrated by the custom of printing each individual’s name on the cover of Nucor’s annual report. But the concern for employees is much more practical and goes far beyond symbols.
Nucor’s pay system is remarkable. At all levels of the company, the largest share of employees’
income is tied to their performance. Base pay for a Nucor steelworker is near $10 per hour, far below the industry range of $16 to $21. But on top of that, steelworkers can earn a bonus based on the amount of defect-free steel produced during their shift. Those bonuses can triple the workers’ pay, taking it far above the industry average. Tying the bonus to the entire shift’s performance also motivates employees to cooperate to get the job done.
In addition, the company pays out profit sharing, encouraging employees to care about the entire company’s performance. The company computes the bonus on every order of steel and pays it weekly, so employees have plenty of reinforcement.
In 2005, a typical Nucor steelworker earned $79,000 plus $2,000 from a special bonus celebrating record earnings for the company plus nearly $18,000 in profit sharing. Managers receive similarly large amounts of their pay in the form of bonuses and profit sharing.