John Arnold, a 35-year-old parts auditor at Caterpillar’s distribution facility in Morton,…

John Arnold, a 35-year-old parts auditor at Caterpillar's distribution facility in Morton, Illinois, says some of his
coworkers are on food stamps. Arnold has worked for Caterpillar since 1999. More than 10 years later, he's
making $15.66 an hour.
To succeed today, does an employer have to worry about motivation? In recent years, Caterpillar, a Wall Street
darling and mainstay of American manufacturing, has rolled back traditional extrinsic motivators.
? Item: Caterpillar laid off 30,000 workers in 2009.
? Item: By the second quarter of 2012, Cat's profit had jumped 67 percent from the previous year. (Net
profits in 2011 2Q of $1.01 billion, or $1.52 per share, rose to net profits of $1.69 billion or $2.54 per
share in 2012 2Q.)
? Item: About the same time, Cat was freezing wages and reducing benefits. New contracts created a
two-tier system so that new hires were brought in on an even lower wage scale.
? Item: Further layoffs followed the newer, concessionary contracts

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