Engstrom Auto Mirror Plant: Motivating in Good Times and Bad
Engstrom Auto Mirror Plant, in Richmond, Indiana, a privately owned company that has been in existence since 1948. Engstrom was largely successful until the late 1990’s at which time the plant struggled to make a profit. During this period the plant was updating its production lines by adding new technology. This change did not go smoothly which caused delays in production resulting in a loss of customers. The plant manager did not have the knowledge of the new technology to find solutions to the decreased production and could not communicated effectively with the worker’s union. This lead to his eventual resignation in 1998. At this time Ron Bent was hired.
Bent determined that the average productivity at 40% of expectation. Bent believed in the power of worker incentive programs and felt that the best option would be a company-wide program. Bent ...view middle of the document...
The inception of the Scanlon brought a decrease in tension and conflict with in the plant as well as growth, higher profits, and sustained quality standards. Employee’s suggestions increased and were implemented even though few if any of these suggestions increase productivity. Overall employee job satisfaction was improved.
The employee’s enthusiasm for the plan eventually diminished over time and their dissatisfaction with the Scanlon Plan grew. Suggestion rates dropped, there was a distrust with the bonus calculations and suspicion when the base ration was changed. Employees felt that supervisors did not work as hard as they did and therefore should not receive the same bonus. Bent addressed the possible need for layoffs as well as causes for the declines in productivity. Bent knew that most Scanlon plans need a “shot in the arm” but before he could determine the best way to provide this shot an economic turndown began in 2005. The economic turndown further stressed the plant decreasing morale and sales figures. Productivity began to decrease as well as the employee bonuses. In 2006, layoffs occurred and employee’s confidence in the Scanlon plan diminished. By 2007 there were again productivity decrease, quality concerns, employee dissatisfaction and suspected employee theft.
Outline of Case Study Analysis
1) Was there an effective Organizational Behavior System at Engstrom 1990?
2) What model of Organizational Behavior was present at Engstrom and did this change over time?
3) What were the communication processes at Engstrom and were these effective? Did the communication process change over time with the inception of the Scanlon plan
4) How did the Organizational Behavior System changes over time?
5) What led to the failure of the Scanlon plan to sustain high productivity and improved employee satisfaction?
Hess, L. (1976). Scanlon Plan & Productivity. Vital Speeches Of The Day, 43(5), 141
Newstrom, J. (2015). Organization Behavior: Human Behavior at Work. (14th Ed.) pg 28-77