OL 500 Final Project Assignment

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Southern New Hampshire University *

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2099

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Management

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Jan 9, 2024

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docx

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Uploaded by ElderLemur1895

1 Case Study Analysis: Case Study of Engstrom Auto Mirror Plant and [Workplace] Brent Williams Southern New Hampshire University OL 500: Human Behavior in Organizations Dr. Kathleen Cornett November 19, 2023

2 Introduction of Case Study Analysis: Organizational Issues Original Milestone One Analysis The Engstrom Auto Mirror Plant provided a good case study on some management issues that often take place within a company. One of the major issues is with a manager with positive experience in one system of management. This manager then believed it to possibly be the best way to help improve morale throughout the plant. The system worked under certain circumstances, but as those circumstances changed the system no longer provided the necessary incentive to maintain morale. As one manager pointed out, “they’ve had it with the Scanlon Plan…’ What’s the point of having a bonus plan if no bonus is paid for months?” (Newstrom, 2015, p.236) The employees held a lot of distrust with the management and felt that the incentive plan was not fairly distributed. The ratio for the incentive plan continued to change leading to more distrust with the plan and with management. “Some employees felt that supervisors should have received a reduced bonus because they were ‘not working as hard as we are’” (Newstrom, 2015, p.541). It did not matter how management explained the system, the employees felt, “The complex nature of the calculations itself, which some felt was ‘full of bean-counter jargon,’ also caused distrust” (Newstrom, 2015, p.540). As production and profitability decreased, management began discussing the need for layoffs. The discussion and eventual layoffs “shook the confidence of even the most fervent Scanlon proponents among the workforce” (Newstrom, 2015, p.541). There became an increase in worker disaffection, with management identifying suspected employee pilfering after a review of inventory reports (Newstrom, 2015, p.541). New Final Project Content The distrust experienced by the employees was a major contributor to the loss of morale and decline in productivity. As individuals lose motivation to perform, production will decline and a business will see profits decrease. When this occurs, a company must work to gain the trust of the employee and understand the root cause of the issue. Introduction of Case Study Analysis: Model Original Milestone One Analysis Bent used the Custodial Model of organizational behavior. This model consisted of management using economic resources as a motivator to increase production. The custodial model says “Employees working in a custodial environment become psychologically preoccupied with their economic rewards and benefits” (Newstrom, 2015, p.46). Employees became reliant on the rewards and bonuses. So when the bonuses began to decrease, worker production also decreases. After the bonuses stopped, employees responded with anger and distrust. Employees felt, “something that rightfully belonged to them had been taken away” (Newstrom, 2015, p.537).

3 New Final Project Content The custodial model used by the company was short lived, because of the loss of the economic motivator when profits decreased. Employees felt the bonuses were part of their regular salary and began to rely on them as income. As the bonuses decreased the lack of economic incentive reduced the motivation of the employees and the company began its decline in production. Introduction of Case Study Analysis: Human Behavior Theory Original Milestone One Analysis One of the issues with management’s technique was its reliance on extrinsic motivators. Management felt the best way to motivate the workforce was through tangible goods, such as bonuses. As these bonuses decreased the production decreased and became a downward cycle leading to layoffs (Newstrom, 2015). “The tendency of extrinsic motivation to interfere with intrinsic motivation is known as the over justification effect. This involves a decrease in intrinsically motivated behaviors after the behavior is extrinsically rewarded and the reinforcement is subsequently discontinued” (Cherry, 2022). Extrinsic motivation can be a powerful motivator, but does not work in every situation. The plant managers must find a balance between extrinsic and intrinsic motivation. As the plant managers begin to understand the workforce, they will understand how to increase the productivity of the plant. This can occur through open communication between management and the workforce. As managers began to show greater concern for the employees, the employees will become more willing to discuss plant issues. This could lead to more suggestions on improvement and a higher morale. “Without clear and consistent communication, employees lack direction, productivity suffers, employee engagement levels decrease, and conflict arises” (Miller, 2022). New Final Project Content Understanding the advantages of intrinsic and extrinsic motivations is an important part of management. The company must provide a better approach to gaining the confidence and trust of the employees. One way to accomplish this is by helping alleviate concerns of the employees and remove those contributors to the dissatisfaction they are experiencing. As Herzberg concludes once dissatisfaction overcomes satisfaction performance and quality is degraded (Nickerson, 2023). One way to increase job satisfaction is through recognition, and possibility for growth and development. This will help to satisfy some of the intrinsic factors that motivate employees. At that same time reducing the issues that create job dissatisfaction will contribute to a more productive workforce. This can be accomplished through the incentive program, if it is simple to understand and equitable in its distribution.

4 Case Study: Root Causes Original Milestone Two Analysis The Engstrom Auto Mirror Plant faces organizational issues from multiple root causes. One of the main roots of the organizational issue stems from management’s failure to understand the organizational culture of the auto plant. Without understanding the culture, management introduced a plan to incentivize the workforce. Management felt that through the monetary incentives it would increase productivity, employee morale, and improve quality (Newstrom, 2015). Management did not address the conditions of the workplace, or the reason for low employee morale. The lack of communication and engagement with the employees contributed to the future distrust of the plan. The plan worked well for only a short period of time. However, once the company saw the beginning of an economic downturn, it upended the ability to payout the monetary incentivizes and maintain the artificially inflated employee morale. The employees no longer received large bonuses and felt management was providing unfair calculations (Newstrom, 2015). Poor communication and lack of employee engagement were a contributing factor to a decrease in employee morale. The inability to understand the calculations used in the bonus, in a large part was due to the inability of management to communicate effectively. If management is not effectively communicating with the employees, employees will be less likely to engage with management. This was shown throughout the plant with employee behavior and providing less feedback to management and decrease in suggestions for innovative improvement (Newstrom, 2015). Poor communication was only realized after production, quality, and employee engagement declined. Employees want to understand what is happening in the workplace. This happens through honest and open communication and can alleviate misunderstanding and improve employee engagement. It helps the employee become more involved and needed, thus improving employees’ job satisfaction (Grossman, 2022). Another contributor to the low morale was the perception of unfair bonus calculations. The employees continued to complain about their unfair treatment. Employees felt they were producing more than the leadership and should receive a larger share of the bonus. To the employees, the contribution rate mattered and the bonus should be distributed accordingly (Newstrom, 2015). “Adams' Equity Theory acknowledges that subtle and variable factors affect an employee's perception of their relationship with their work and their employer” (Mind Tools Ltd, 2023). In Adams’ Equity Theory, the relationship between what an employee contributes and what the employee receives in return can help in job satisfaction. This is especially true if the employee feels that there is a balance between what they receive and how much they contribute. Dissatisfaction happens if the employee feels they contribute more than what they perceive is provided in return (Mind Tools Ltd, 2023).

5 This relationship between worker contribution and bonuses led to a greater dissatisfaction and a reduction in the productivity of the workforce. In addition, management began to suspect employees of pilfering equipment further eroding the relationship between management and the workforce (Newstrom, 2015). New Final Project Content Increasing employee engagement and providing more effective communication strategies is one of the first steps to regaining trust and loyalty with the workforce. This should be a short term and long term strategic response to overcoming motivational issues in the employees. The employees will become more involved in finding solutions to concerns and feel a greater responsibility to ensure the success of the company (Grossman, 2022). Case Study: Solutions Original Milestone Two Analysis In order to overcome the poor communication issues, management should increase engagement with the employees. Employees will become more engaged if they feel management sincerely cares for the employees’ welfare. This will also help increase trust between the employees and management. A trusting relationship is necessary for effective communication at all levels. This will help address part of the morale issue and increase employee satisfaction (Talmage-Rostron, 2023). In addition, the company should adjust the incentives based on employee contribution. This will address some of the issues regarding equal distribution of monetary incentives. Creating a production-based incentive, based on employee contributions, and addressed in language the employees can understand will help alleviate employee concerns with the monetary compensation plan. An appropriate incentive plan should work beyond the short-term benefits and ensure employees understand the long-term benefits to both the employee and company. The overall company strategy should also be communicated honestly and effectively through language the employee understands without confusing the employees with data and metrics (Indeed, 2023). New Final Project Content The company should engage the employees and provide open and honest communication. The continued lack of communication is a concern to the employees and contributes to the perception of unfair treatment. As an open and honest communication occurs, employees are more likely to develop a relationship of trust. This would provide a baseline to continue development of a more equitable incentive plan. Realigning the incentive based plan and providing a simpler and easy to understand formula, will help alleviate the concerns of the employees. A simple and easy to understand incentive plan alleviates the employee perception of ever-changing goals in the incentive plan. Communicating honestly the company’s strategic goals, while aligning the individual goals will help maintain the trust of the employees.

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