Engstrom: Resistance to Change

Absence of trust between the HR staff and the specialists The labourers impression of HR officials is a noteworthy reason for concern, They underestimate it that the HR administrators are there to ensure that the requests of specialists whatever it is not met toward the end. That is, they picture a HR official being a specialist of the administration and not as a well wisher of the workers by and large. This obviously indicates a long haul discontent which has surfaced now in the most savage way.

The Engstrom Auto Mirror plant is located in Richmond, Indiana and employs around 200 or more people. The plant has been going through some changes over the last few years and has seen a decline in employee motivation. The focus today will be to determine some of the root causes of the problems facing the plant from an organizational view and a human behavior issue. The bottom line is determining how to solve the issues the company is facing and move forward. Some of the questions that will need to be answered is, “why is motivation at an all-time low, is the Scanlon plan benefiting everyone in the company and can the plan be revamped with

The Scanlon Plan can be used as a major catalyst to turnaround the plant by emphasizing more on productivity. The more they work the faster they roll towards their bonuses; this magical spell is a win-win situation for both the employees and the management. The management can cruise steadily over the wave of bonus motivated productivity and the employees can reap the benefits from the high production rate in terms of bonuses. The plan can be redrawn and a slight change can be made by making the entire plan revolve around the concept of productivity. When productivity assumes a prime position in the plan, employees will strive hard

I believe that one of Engstrom’s strengths would be the fact they were able to identify the low morale by the employees and correlate it with the low productivity. I actually commend Bent for doing research and finding a program that has proven to work in many other companies. The Scanlon Plan is the oldest organization-wide incentive plan with proven success still in use in the United States. The first Scanlon Plan was developed in the 1930’s by Joseph Scanlon. Scanlon was a cost accountant by training and a steelworkers’ union official at a steel mi facing bankruptcy. (Beer & Collins 2008). The Scanlon Plan reinforced teamwork and cooperation across work groups while they focus attention on cost savings and motivating employees to “work smarter, not harder”. (Beer & Collins 2008). A problem and weakness in the program came when the employees distrusted the bonus calculations. Some employees felt the company was “playing with” numbers when they changed the

In the Engstrom Auto Mirror Plant case, the main problem is the lack of employee motivation. There are a few issues that contributed to this main problem. First issue would be an unnecessary extrinsic motivator of bonuses to the Scanlon Plan. Originally, workers had intrinsic motivation from communication meetings, which provides feedback for the company. However with the additional extrinsic motivator, employees find the tasks over-sufficiently justified under the self-perception effect so intrinsic value would be lowered. When bonuses stopped, employees lost motivation to work. Another issue would be about the equity theory. In the plan, workers earn the same amount from the bonuses regardless of the effort implemented. Therefore some Engstrom workers lost motivation since supervisors work less but are still paid equally. This resulted in many workers complaining due to an inequality of ratios. The last issue in the Scanlon Plan occurred when the company decided to lay people off. Employees

Make sure the employees feel connected to their team, when they don’t feel valued it will impact their performance. Learn and challenge the employees to strive for better which will keep them productive. Provide security in their position to combat negative performance. Give voice and recognition which will empower employees and make them feel appreciated. Ensure all employees are being treated with fairness by communicating and leading effectively. Empower the employees to be able to make choices and decisions that can impact production, allow them to see their recommendations in action, and above all else, provide a clear sense of purpose. The goal here for the employees is to increase production to levels that will earn them a bonus, but ultimately the goal needs to be recognized as the success of the Engstrom plant to ensure job growth, steady income for its employees (Taylor, 2013).

One of the valued but demanding customer, who had considered Engstrom as a certified supplier, was requesting a large order but Engstrom was unable to deliver on time due to the low productivity problem. The plant manager along with his assistant were already dealing with the troubling numbers when this happened. While the task was a tough bone and not easy to tackle, and there were a lot of factors needed to be taken in to consideration. The leadership started to analyze and break down the main causations other than the overall economic trend that dragged the company into the turmoil, as it turned out, it was the low, frustrated employee morale and diminished work satisfaction.

In analyzing the brief case study Engstrom Auto Mirror Plant: Motivating in the Good times and Bad”, it was brought to light that the root of the organizational issues was that of productivity, motivation and employer dissatisfaction following the decline of the Scanlon Plan. The Scanlon Plan was an incentive system that provided bonuses to employees for their increased productivity within the plant. In the early 2000’s employee satisfaction, morale and productivity rapidly declined following the layoff of nearly 50 employees and the employees who remained were then expecting the bonuses that were incorporated into the plan without doing the

The purpose of this assignment is the analysis of a case study for a manufacturing plant named Engstrom Auto Mirror located in Richmond IN. The company has been in business since 1948, during most of its existence the business ran well and they were successful but by the 1990’s they started a downward spiral toward being unprofitable. In the early 2000’s for a period of seven years their sales had quadrupled but in 2006 there was a downturn in the auto industry which led to cuts having to be made resulting in the unfortunate circumstance of layoffs. They currently have 209 employees which is down from 255, 46 people were layedoff in 2006. The catalyst for their prolonged period of propersity was the 1998 descison to implement an organization-wide incentive program called a Scanlon Plan. Prior to its implemation the company was marked by inefficiency, low productivity, low morale and quality issues, management measured productivity at 40% of expectectations. At the time of the case study the problems of the past were starting to surface again things like layoffs and no incentives for the employees were causing rumblings in the workforce. Another pressure point was the companies relationships with its customers that had been built in part through the gains made by implementing their Scanlon Plan and their customers put a lot of faith in the company to provide high quality products in a timely manner.

Following this strategic reflection, Ron Bent would later note the results of the option he chose to implement, and then document the lessons that he learned from this experience. Engstrom Auto Mirror Plant introduced the Scanlon plan that pays bonuses to employees depending on their performance at work. Since the Scanlon plan incentives are paid to employees for their consolidated performance, it improves teamwork. Increased performance enhances productivity and bonuses received. The downturn in business saw Engstrom face a crisis that threatened the company with closure (Newstrom, 2015).

Clearly there were issues in the current performance management system that had led to these employee issues.

Issues: Though the Scanlon plan was effective when it was implemented, there are now several potential issues existing in Engstrom. The employees are no longer seeing the benefits of the incentive plan that originally showed them bounty. They do not trust the system of bonuses, or the methods by which they are calculated, and by extension are beginning to distrust management entirely. They are starting to observe a lack of fairness in payment, valuing relative over concrete compensation. Ultimately, employees as a whole are beginning to be more individually minded as opposed to having a group mentality. This is the main cause of Engstrom’s problems. The Scanlon plan is

Regardless of whether the company manages to succeed in implementing the changes or not, staff should strive to maintain high morale. Senior management should put into practice work different motivational tools such as good working conditions, merit-based system of incentives and rewards, paid vacation, benefits and payment for medical services, the provision of loans to employees and others.

Most of the problems that Engstorm company are facing are related to many or Organizational Behaviors theories and concepts, The field of Organizational Behavior considers many factors which will be further discussed. Engstorm as a company are facing many issues which has lead to many disruptions that ended up effecting not only the company but the employees too leading to employee’s dissatisfaction, lower productivity, and employees mistrust. One of the causes of lower productivity is employee’s dissatisfaction. Once the employees are not satisfied all of this leads to the productivity of the company to suffer which is exactly what engstorm company are facing, and that is all due to the fact that the employees in company aren’t getting their bonus payments which has

10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.