In the case study “Engstrom Auto Mirror Plant

In the case study “Engstrom Auto Mirror Plant: Motivating in Good Times and Bad”, there were multiple employee issues occurring concurrently. Engstrom Auto Mirror Plant was a mid-size manufacturing facility in Indiana, employing over 200 people since 1948. Fifty years into the life of the business, the plant was facing a bout of unprofitability as it was forced to redesign its production lines to incorporate new technology (Beer & Collins, 2008). At this time, Ron Bent was hired as the plant manager to try to increase slipping production and overall morale.
After a companywide vote, a Scanlon plan was implemented in 1999 as a way to provide monetary incentive to employees who seemed discouraged and were no longer motivated to excel in their positions. For the short term, the new plan seemed to solve the plant’s productivity problems; that is, until the economy took a turn for the worse in 2005. What happened at this point uncovered the underlying organizational issues within the company.
The concept of a Scanlon plan is meant to span the entire company in which it is implemented. It is grounded in the theory that each employee makes a positive contribution for the better good of the organization; in turn as the company becomes more profitable, the employees, management and the organization as a whole is rewarded. Engstrom’s bonus plan was based on the ratio of production value to labor hours (Beer & Collins, 2008). A detailed plan was laid out about how and when each bonus would be paid. However, the Engstrom plant employees soon became distrustful of their management team. Instead of blaming themselves for the lack of production, the workers blamed their management. The case study indicates that although the numbers are made public, for cross checking opportunities, the workers still felt that the bonus allocations were unfair. The change in the way the bonus ratios were recalculated over time, which included lowering the ratio needed to receive the bonus several times over five years and restructuring the terms in which bonus payouts are made.
Maslow’s Hierarchy of Needs can most accurately explain why the Engstrom employees did not feel as though their ideas were being heard. They were losing their psychological and emotional connection to their company, and no longer felt valued within the company. This created hostility amongst the workers and further drove down production and morale. Although committees were formed to listen to and implement employee suggestions, as morale decreased, so did the influx of participation from the workers who felt that their suggestions were falling on deaf ears. Based on the issues demonstrated in the Engstrom case, it is clear that an overhaul is needed within the organization to reinvigorate company growth and instill confidence in its employees.

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