Worker Productivity –Iscar’s Trade Secret

The much publicized purchase of the Iscar precision tool company by American investor Warren Buffet, makes one wonder why this particular company was chosen by the billionaire investor, ranked as the world’s No. 2 richest man. It doesn’t take much to figure out the answer, if one looks at the success behind Iscar and the Wertheimer family, who have owned it for so long. And that success is in the way Seff Wertheimer has treated his workers.

Iscar is one of the few companies in operation in Israel that has taken the time to invest in what the company considers as its most valuable resource; that being it’s employees. By giving workers proper training and positive incentives, the Wertheimer family has created a work environment that has become the envy of many large corporations; not only in Israel but, abroad as well.

Many companies tend to consider their workers as ‘disposable’ often taking advantage of their skills while paying them far less than their worth. This so called ’syndrome’ is particularly true in companies hiring workers at low salaries, often at or near minimum wage. In today’s ‘new age’ economy, worker’s rights have been taken advantage of, due largely with the decline or even elimination of labor unions and other organizations that were originally established to protect the rights of employees.
Many workers in service industries, who fill non-technical positions, are often paid wages of less than half the worker’s actual worth. This phenomena is even more problematic in the case of older ‘40+” employees who often are literally hired, and fired, at will by their employers, even though these older workers may have more skills and experience than their younger counterparts.

Smart companies, like Iscar, however, have found that taking a more positive approach to the welfare of their employees, results in better productivity in the long run. Instead of a ‘Wallmart’ or ‘Disney’ mentality, where workers work long hours with unfavorable wages and working conditions, companies like Iscar have discovered that building a quality business enterprises revolves around having a top level work force, with incentives to make employees feel they have a share in the success of the company. The success of a world-class company in Iscar’s philosophy, is the success of its work force.

The obvious result is noted to everyone, as Mr. Buffet has assured everyone that Iscar’s entire staff will continue working there, despite the company having new owners. Can other, recently “bought out”, companies say the same?

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