Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

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CASE ANALYSIS ENGSTROM AUTO MIRROR PLANT: motivating in good times and bad OVERVIEW Engstrom Auto Mirror Plant is a privately owned business which employs 209 staff and manufactures mirrors for trucks and automobiles. In 2007, plant managers had something of a crisis on their hands. Productivity and quality issues brought about a delivery problem and therefore increased the risk in losing clients. This was not the first time the plant faced this problem, In 1999, the company had faced similar issues and implemented a Scanlon Plan. The Scanlon Plan was an incentive plan used to motivate staff making changes in employee’s behavior and attitudes. It consisted of monthly bonuses for employee productivity, communication meetings, a committee to encourage and evaluate employee’s suggestions, and overall improved working conditions. At first employees were satisfied with their jobs and motivated to be productive. Even though the Scanlon plan was very profitable during a seven-year period, the crisis in the industry put the credibility of these plans in question. The company was unable to maintain and manage the bonus incentive plan that they had in place before the crisis. The employees started to complain about the company’s policies and its situation also by underperforming, which in turn leads to low productivity. The manager Ron Bent had to figure out a way to address these problems, and come up with solutions so that the company can continue operating and supplying its clients. PROBLEM IDENTIFICATION Engstrom Auto Mirror Plant was facing the problem of not being able to keep their employees motivated in both good and bad times. The bonuses were perceived as being part of their regular paycheck, not rewards for high performance, which in long-term lead to de-motivation. Regular changes should have been done for adjusting the Scanlon plan as employees
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