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  • Engstrom Auto Mirro Plant Case Studies FF

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    Nikku Singh
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    The Engstrom Auto Mirror plant is facing a crisis due to declining sales and business over the past two years. The plant manager laid off 46 of 225 employees. To address productivity issues, the new plant manager introduced the Scanlon Plan incentive scheme, which initially increased productivity 150% through bonuses. However, distrust arose regarding bonus calculations and management. The Scanlon Plan failed to address root causes like poor communication, low morale, and job insecurity. The proposed solution is to modify the Scanlon Plan for transparency, engage employees, and focus on intrinsic rewards like growth, appreciation, and recognition instead of just pay to improve work culture long-term.

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    The Engstrom Auto Mirror plant is facing a crisis due to declining sales and business over the past two years. The plant manager laid off 46 of 225 employees. To address productivity issues, the new plant manager introduced the Scanlon Plan incentive scheme, which initially increased productivity 150% through bonuses. However, distrust arose regarding bonus calculations and management. The Scanlon Plan failed to address root causes like poor communication, low morale, and job insecurity. The proposed solution is to modify the Scanlon Plan for transparency, engage employees, and focus on intrinsic rewards like growth, appreciation, and recognition instead of just pay to improve work culture long-term.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    375 views2 pages

    Engstrom Auto Mirro Plant Case Studies FF

    Uploaded by

    Nikku Singh
    The Engstrom Auto Mirror plant is facing a crisis due to declining sales and business over the past two years. The plant manager laid off 46 of 225 employees. To address productivity issues, the new plant manager introduced the Scanlon Plan incentive scheme, which initially increased productivity 150% through bonuses. However, distrust arose regarding bonus calculations and management. The Scanlon Plan failed to address root causes like poor communication, low morale, and job insecurity. The proposed solution is to modify the Scanlon Plan for transparency, engage employees, and focus on intrinsic rewards like growth, appreciation, and recognition instead of just pay to improve work culture long-term.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

    Situation Analysis

    Engstrom Auto Mirror plant, privately operated since 1948, manufactured mirror for trucks
    and automobiles. Currently the company is facing the crisis due to the many factor, a main
    one being that business and sales were declining for the second year in a row since 2005. As
    the sales were going down the plant manager Ron Bent layoff the 46 of his 225 employees.
    Job security came into question when the industry downturn occurred. During the 1990s,
    plant was on verge of redesigning its production lines to incorporate new technology, which
    led to decline in productivity, sales going down, employees feels demotivated and product
    quality issues is also occurring, hence the administration has undergone change due to
    worsening of situation. In order to quickly fixed the issues of the delay in the productivity,
    new plant manager Ron Bent introduced the Scanlon Plan, an organizational incentive
    scheme to increase the productivity, motivate the employees through incentives. This resulted
    in increase of productivity of the plant toe 150%, as claimed by Bent. And the company gain
    the benefit and prosperous of the scheme until the distrust arise among the employees
    regarding the Scanlon Plan calculation and management intense. The Scanlon Plan is
    consisting of three elements Identity, Participation, Equity and Competence. Identity is to
    understand the problem of the plant, suggestions for improvement by all employees at all
    levels than sharing of the benefits of the increased productivity. The Scanlon Plan was the
    short-term way of resolve the Engstrom Auto Mirror plant issues, as the economy hit down
    the plant, it was unable to give the monthly bonus due from last seven months, also the layoff
    created dissatisfaction among the employees. Engstrom Auto Mirror plant has clearly
    neglected the human behavior aspect such as motivation, trust, engagement, employee’s
    morale, communication and employee’s engagement.

    Problem Statement

    The work culture at the Engstrom is hostile. There are dissatisfaction and communication gap
    among the employees, the job security has affected due to layoff in recent times, morale and
    the behavior of the employees change as they didn’t trust on management and Scanlon
    method of calculation of the bonus raised distrust. The Scanlon Plan have didn’t solve the
    root cause of the issues.
    Proposed Solution and Action

    Extrinsic incentive i.e. Scanlon Incentive is necessary but not sufficient to increase the
    productivity for the long term. The job satisfaction is related to the intrinsic factor that is
    personal growth, achievement, responsibility and promotion. When the work become the
    obligation that affect the efficiency of the employees, increase in pay only didn’t bring out
    the best of the employees. Manager must focus on the intrinsic factor as well as the extrinsic
    factor.
    In case of the Engstrom Auto Mirror Plant, the need of the hour is modified the Scanlon
    Plan, make the calculation of the bonus calculation simpler and easier so that every employee
    able to understand it. Management must take the transparent approach to reach to the
    employees. Must come up with an idea to engaged with employees.
    Mr. Bent and the top management must focus on the development of the work culture
    based on the promotion, growth, appreciation and personal achievement rewards rather than
    focus only on increasement of salary to get the best efficiency of the employees. The rewards
    of the appreciation and recognition of the achievement bring the self-respect among the
    employees.

    Submitted By:

    Prashant Kumar
    (P40193)

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