Engstrom Auto Mirror Plant Motivating in Good and Bad

In May 2007, the Engstrom Auto Mirrors plant was facing the crisis. The business was doing badly and the sales had started to decline in 2005. Thus, there was a steep reduction in plant productivity and employee morale was all time low. The company used Scanlon Plan as an incentive for staff. The core element or foundation of the plan was concept of participative management, where management and staff together will decide the bonuses based on revenues for that year.

The success of an organization is built on a functional relationship between managers and employees. Managers can depend on this type of relationship to set programs in place to motivate employees, thus, increase productivity and profitability.Throughout the years, a few issues have brought on the relationship amongst administration and workers at the Engstrom Auto Mirror Plant to fall apart. The goal of this milestone is to identify the root causes of the organizational issues, look at the fundamental drivers from a human behavior perspective and offer

Engstrom Auto Mirror Plant is experiencing productivity and quality problems arising from the organizational effects of the Scanlon Plan, an incentive plan that is tied to individual performance. As a consequence of the highly economic-centered nature of the Scanlon Plan, employees have already adapted to the custodial model of organizational behavior where the main basis is the use of economic resources, and the managerial orientation predominantly relies on money to improve performance. Consequently, employees are oriented around security and benefits which developed their dependence on the organization for their financial welfare. Though the Scanlon Plan has supportive model dimensions because as a form of upward communication, employees

Engstrom Auto Mirror, a successful privately owned plant since 1948 in Richmond, Indiana, reached one of their biggest productivity setbacks in May 2007. In their near 60 years of business this was the company’s second cross with unprofitability since the 90’s, when technology was surfacing and causing tension between the company and their customers. The manager at the time was unable to adjust, deciding to resign in 1998. Nearing the end of the 90’s, Ron Bent was hired as plant manager. Leading into the new millennium, his plan was to implement an employee incentive plan to increase productivity with the employees using bonuses to allow their business to continue to thrive. That was the introduction of The Scanlon Plan, it reinforced

Engstrom Auto Mirror Plant based in Richmond, Indiana has undergone some serious challenges in their history

As a manager the three motivational methods that should be used would be to provide monetary incentives, employee recognition, and training incentives. Monetary incentives are one method that can be used by a leader or a manager in his or her workplace, these incentives is to reward an employee for his or her outrageous work-related performance. These incentives may include such as profit-sharing within the company, stock options, performance bonuses, and scheduled bonuses. These different types of monetary incentives can increase the motivation of its workers and can lead to more productive, less absenteeism, and may improve one’s quality of service. Monetary incentives when awarded to one employee may also be a morale booster can also encourage other workers to improve his or her work performance, and maintain a healthy, friendly, positive work environment. A healthy workplace is a product of a successful and productive work environment. Working in this kind of economy, monetary incentives is the excellent method to use. However, these incentives may persuade others and may not to some; the result will be the same, increased quality work

In analyzing the brief case study Engstrom Auto Mirror Plant: Motivating in the Good times and Bad”, it was brought to light that the root of the organizational issues was that of productivity, motivation and employer dissatisfaction following the decline of the Scanlon Plan. The Scanlon Plan was an incentive system that provided bonuses to employees for their increased productivity within the plant. In the early 2000’s employee satisfaction, morale and productivity rapidly declined following the layoff of nearly 50 employees and the employees who remained were then expecting the bonuses that were incorporated into the plan without doing the

The reason why reward system did not work with Yakkatech staff is due to poor job design. Employee’s job characteristics were low and created high critical psychological states, which results low outcomes. Yakkatech executive’s provided a short fix, and did not address the root of job dissatisfaction. The employees were disconnected and dissatisfied for the repetitive job task, to change the job design and increase motivation, Yakkatech can implement Contemporary job strategy.

It is clearly that the company is experiencing some growth; however, the management needs to find a solution to solve the arising issue where their employees are lacking of motivation in their job. However, the executive team’s decision to raise pay rates for its customer service staff and the vested profit-sharing plan does not improve the employees’ work performance or customers’ satisfaction.

Instead of jumping to different achievement goals as problems arise, the visions and beliefs should have been determined first and that would help shape the overall goal of the company. While working towards goals such as profitability and growth, the visions and beliefs help keep employees in line and to some extent control the minimum expectations of the development of products, thus possibly lessen or avoid problems that did arise. The incentive scheme were not properly designed to take into account effects of employee actions and the impact it would have on the company as a whole and other stakeholders. It should some what reflect and reiterate these visions instead of promoting and motivating employees to be self interested in their own affairs and achieving the targets at “all costs”. All in all, there were minimal controls and checks in place, it was more of a one way push towards the goals and not looking back

Employees are overworked in part because of low hiring numbers. When standards are set that are too high, there comes a time when a great number will fall short. The incentives that are currently in place are not effective. We know they are not effective because they are not encouraging great employees to stay. They do not move employees to increase productivity or develop spectacular and innovative programs. Additionally, the incentives currently in place do not entice new and talented programmers to want to join Microsoft and help Microsoft grow into the next phase.

In today’s competitive workforce, compensation and benefit packages plays a crucial role on recruitment and retention for both the organization and the employee. Bumpbie finds itself in a situation where it could positively affect its employee’s morale, turnover rate and longevity; by making a strategic decision to implement compensation and benefit packages that will encourage current workers to stay and entice new applicants. Money is not always the inherent reason businesses experience high turnover rate, the constant shifting in the job market will always be a contributing factor as well as employee’s moral. Mayhew, R. (2016), explains that an “employee compensation plan” refers to all the components offered as well as the way in which they are paid, and the reason behind the employees getting the compensation case bonuses, salary increases and incentives. The fact that there are voluntary and mandatory benefits that organization provides to their employees give employees the freedom of choice, as well as the option to make the whether to stay with or leave an organization based on the benefits it provides. Variable Pay is also an option that some employers offer their employee which is performance based or results oriented. Whether it is profit sharing, merit based programs or incentive bonuses; it all comes down to which organization can provide employees with the compensation or benefits packages that best satisfy their needs.

The Scanlon plan was introduced in the 1930’s by Joseph Scanlon, an accountant and member of the Steelworkers union (2). The Scanlon plan that Engstrom used focused on cost saving and higher production, which would then increase labor savings. Adapting the plan is a long process, and Bent made sure 75% of employees were on board. Engstroms version encouraged suggestions at all levels, and encouraged input to help productivity. The plan focused on transparency of financial and business data to all ranks of the organization (2). With transparency, allowing suggestions, and an encouragement of new ideas, Bent believed that the plan would provide a source of intrinsic motivation to employees of Engstrom.

The companies’ procedures should be very clearly set and there should be awareness among the employees regarding outstanding work and other punitive measures for bad performance. There should be encouragement of team work where the roles of the employees should be clearly divided in each project and there should be allotment of one leader who supervises his team closely. In this way, it is best procedure to motivate the employees with

Most of the problems that Engstorm company are facing are related to many or Organizational Behaviors theories and concepts, The field of Organizational Behavior considers many factors which will be further discussed. Engstorm as a company are facing many issues which has lead to many disruptions that ended up effecting not only the company but the employees too leading to employee’s dissatisfaction, lower productivity, and employees mistrust. One of the causes of lower productivity is employee’s dissatisfaction. Once the employees are not satisfied all of this leads to the productivity of the company to suffer which is exactly what engstorm company are facing, and that is all due to the fact that the employees in company aren’t getting their bonus payments which has