Reference no: EM131163988

Selection, Motivation, and Performance at Nucor Steel

Managers need to understand the basic properties of selection, and the common selection methods to effectively fill the positions of tomorrow's leading organizations. Selection techniques vary within industries and companies. But whatever method is used, it's important that the method be reliable and valid. Reliability is defined as the degree to which a measure is free from random error. If a measure is reliable, then a score a person receives based on that measure will be consistent over time and over different contexts.

The more reliable the measure, the more it can be trusted as a basis for decision making. Validity is the extent to which performance on a measure is related to performance on the job. If what is being measured isn't related to performance on the job, then the test isn't valid. HRM professionals apply standards to reliability and validity to various common selection methods, including interviews, references, biographical data, personality inventories, work samples, and physical and cognitive abilities tests.

Nucor has a very lean corporate structure which requires flexibility and multitasking for every job description. This unique environment keeps everyone employed and busy even during down time. Their bonus structure, based on team output of quality steel, ranges as high as 150% of base pay. As a result, Nucor employees are some of the highest paid in the industry. When recruiting began, Nucor managers needed to find people who would be motivated by the incentive pay structure, and who could work within this flexible new environment. HRM manager Vincent Schiavoni said, "We have a pretty unique structure here. We're looking to get people who are used to working in team environments." Tracy L. Shellabarger, Nucor's controller, commented on the company's hiring practices: "When we got started, the central feature to us was that we didn't have any job descritpions to work from.

We were looking more for general types of skills and the ability for someone to be motivated by the types of things that we offered, for example, our incentive pay system. We also were looking for multitalented kinds of people because cross-training is very important in a lean environment like ours. We placed an ad in the paper and we advertised for a four hour period, 8 A.M. to noon. In that four-hour time period we accepted just a little over 900 applications. Of those 900 people we were looking for 40 to 50 initial employees. So any department manager that was looking to fill positions would look through those applications and bring in whoever they thought was the best qualified from that group.

"Once the employee was brought in, then we would have that person interviewed by generally one or two supervisors in the work area where they would be going to work. At the same time that they did those interviews they would also allow that potential employee to take some basic tests-aptitude, personality skills-to see if they fit into the mold of the person they were looking for. Once a person had passed both the interview and the test, then we would take the best of those people and send them to psychologists for further interviews." Nucor wasn't always so efficient with its hiring practices. Lewis Kirven, Nucor's hot mill supervisor, said, "The way we used to do it was kind of like Russian roulette. Now I guess we proabably have got it where we can hit. I'm guessing 90% good people coming on board."

CRITICAL THINKING QUESTIONS
1. In the context of selection methods, define "reliability" and "validity." Could a selection technique be reliable but not valid? Explain.

2. Nucor has combined high-tech steelmaking with careful employee selection. Do you think that employee selection is more important at Nucor than at a traditional steel plant?

3. What trends over the last several decades have made employee selection critical for manufacturers?