Engstrom Auto Mirror Plant Essays Of Elia

Case | HBS Case Collection | April 2008

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

by Michael Beer and Elizabeth Collins

Abstract

In May 2007, the Engstrom Auto Mirrors plant, a relatively small supplier based in Indiana, faces a crisis. The business was in the second year of a downturn. Sales had started to decline in 2005; a year later, plant manager Ron Bent had been forced to lay off more than 20 percent of the work force. Plant productivity was dropping, employee morale was low, and product-quality issues had begun to surface. Relationships with key customers were at risk. Downturns were not new at Engstrom. When the plant had reached a similar crisis point years earlier, the institution of a Scanlon Plan, a company-wide employee incentive program, had proven critical in building morale, increasing productivity and product quality, and leading Engstrom into a turnaround. For several subsequent years, Engstrom workers had received regular Scanlon pay bonuses. But the bonuses had stopped in 2006, and now Ron Bent must determine how to get the plant back on track. Should he revise the Scanlon setup? Remove Scanlon and try another plan? Identify and change other organizational factors that may be sabotaging Scanlon?

Keywords: organizational behavior; leadership; change management; human resource management; incentives; motivation; manufacturing; Leadership; Change Management; Employees; Motivation and Incentives; Goals and Objectives; Manufacturing Industry; Indiana;

Engstrom Auto Mirror Plant and Work Analysis Case Study Essay

3074 WordsJul 4th, 201613 Pages

Kayla Gunby
November 29th, 2015
Southern New Hampshire University
Final Project Submission
Engstrom Auto Mirror Plant and Work Analysis Case Study

Abstract
During May 2007, the Engstrom Auto Mirror Plant faces a low employee morale issue. The newly appointed manager, Ron Bent, sees a decline in work place productivity and culture throughout his recent years of working at the plant. When Bent joined the company, it was facing a similar issue of low morale. He then decided to introduce the Scalon Plan, an incentive program for the employees, to raise morale. The program was successful when it was first introduced but ran into problems time after. Bent was faced with many challenges with the Scalon Plan that caused him to ask many…show more content…

Bent saw the low morale and wanted to change it. I feel that he used the supportive model mentioned in our book Organizational behavior: Human behavior at work. According to Newstrom, “Management’s orientation, there, is to support the employee’s job performance rather than simply support employee benefit payments as in the custodial approach.” (Newstrom, 2015. P. 39) I believe that one of Engstrom’s strengths would be the fact they were able to identify the low morale by the employees and correlate it with the low productivity. I actually commend Bent for doing research and finding a program that has proven to work in many other companies. The Scanlon Plan is the oldest organization-wide incentive plan with proven success still in use in the United States. The first Scanlon Plan was developed in the 1930’s by Joseph Scanlon. Scanlon was a cost accountant by training and a steelworkers’ union official at a steel mi facing bankruptcy. (Beer & Collins 2008). The Scanlon Plan reinforced teamwork and cooperation across work groups while they focus attention on cost savings and motivating employees to “work smarter, not harder”. (Beer & Collins 2008). A problem and weakness in the program came when the employees distrusted the bonus calculations. Some employees felt the company was “playing with” numbers when they changed the

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