Engstrom Auto Mirror Plant Case Study

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ENGSTROM AUTO MIRROR PLANT MOTIVATING IN GOOD TIMES AND BAD CASE STUDY REVIEW 1) Other than the Scanlon, what are some common types of employee incentive plans? Provide a brief overview of what they are and how they work. My research found that basically there are four types of programs classified as gainsharing. These include: the Scanlon Plan, the Rucker Plan, Improshare and Custom plans. These gainsharing plans are all similar. The differences appear in the way they calculate bonus and the level of employee involvement required to support the plan. The Scanlon Plan appears to be the oldest and most widely used type of gainsharing plan. As was shown in the case study: Engstrom Auto Mirror Plant: Motivating in Good Times…show more content…
The transition was not smooth and plagued with increasingly long production delays. Because of these delays, customers were irritated and dissatisfied with Engstrom. Engstrom had to come up with a plan to turn this condition around. The Engstrom plant had to focus on cost savings, which meant producing more per hour of labor spent. The Engstrom incentive plan therefore, focused mostly on extrinsic motivation (Beer & Collins, 2008). They came up with a plan that would share the labor savings between the employees and the company. The plan would also set up committees to stimulate and evaluate employee suggestions. The significance of their plan adoption was the acceptance criteria required by management in order to implement the plan – 75% employee buy-in by vote of all the company employees. Interestingly a side benefit of the plan was the surfacing of intrinsic motivation that surfaced in the workers as was demonstrated in the example of the maintenance worker’s change in response to procedures for working on the polishing machine. Before the incentive plan, the maintenance worker would only bring a few tools that he could carry in his hands to work on the machine. If he did not bring the correct tool he would return to the shop and get another tool to work on the machine. If he still needed more tools, he would continue…show more content…
A review of 80 studies evaluating motivational methods and their impact on employee productivity highlighted several activities that could increase productivity (Verma, 1996). These activities included goal setting, efforts to enrich jobs, employee participation in decision making, and monetary incentives. The Engstrom bonus plan basically incorporated all of these activities. Where I think they fell short was the communication breakdown between the company and the employees when the economic downturn first started. I believe the monthly meetings between the company and the employees should have been putting more responsibility on the employees to come up with ideas to deal with reduced sales due to the economic conditions. If the company’s income was reduced, perhaps the union should have volunteered cutting back to 4 day work weeks that maintained full production for fewer hours per week. This would have provided the employees to be involved with the goal setting for these shortened work weeks. They would have been enriched because they would have known that everyone was sharing it the sacrifice to keep the company profitable and keep all of their jobs. They would have participated in the decision to make the sacrifice and money would have been the

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