You'd think theLincoin Electric system would attract quality people, and it has. For instance, the company recently hired four Harvard MBAs to fill future management slots. But, consistent with company tradition, they started our, like everyone else, doing piecework on the assembly line. Historically, Lincoln Electrics's profit-sharing incentive system has provided positive benefits for the company as well as for tis employees. In the early 1990s, one company executive estimated that Lincoln's overall productivity was about double that of its domestic competitors. To that point, the company had earned a profit every year since the depths of the 1930s Depression and had never missed a quarterly dividend. Lincoln also had one of the lowest employee turnover rates in U.S. industry. But something interesting has recently happened at Lincoln Electric. The company is overhauling its pay ststem. Under pressure from institutional shareholders and independent board members, management has been looing for ways to improve earnings. The reason? Rapid growth and global competition resulted in the company losing money in in 1992 and 1993, and employee bonuses have been dropping. In 1995, for inance, bonuses averaged 56 percent the lowest in recent years. The result; Employees are disgruntled. Management decided it had to modify its pay system to make it more mainstream. One objective is to reduce the huge variations in worker pay from roughly $32,000 to more than $100,000. In early 1996, to revamp the pay scheme without stirring up resentment, management set up a comittee to study the bonus program. It has told employees that a new formula is in the works. It wants employees to provide in put by focusing more on their overall earnings, not just the percetage bonus they receive. For instance senior management wants to start raising base pay and, simultaneously, to start reducing annual bonuses.