The Root Cause Case

In May 2007, the Engstrom Auto Mirrors plant was facing the crisis. The business was doing badly and the sales had started to decline in 2005. Thus, there was a steep reduction in plant productivity and employee morale was all time low. The company used Scanlon Plan as an incentive for staff. The core element or foundation of the plan was concept of participative management, where management and staff together will decide the bonuses based on revenues for that year.

Developing work attitudes is by reducing imprudence that was between the hourly workers and their mangers and increasing job satisfaction and organizational commitment. It is clear that workers at this motor company have the lowest job satisfaction in order of various negative influences that impact their life. First, mangers at this company did not treat their employees as a human, they treat them as machines, that should rich the demand by the end of the day, and called them by numbers not their name. Second, workers have intrinsic value, extrinsic value, and ethical values that ford would not respect. Third, Stressful work without any reward and the work environment that was not save, clean, or regulated at the plant. Finally, week bonds between mangers and workers that create week work energy and losing trust between employees as results the work has turned down frequently. In addition, at Ford Motor Company the physical and psychological

The Scanlon Plan was brought into place in 1998 because of the initial inadequacy in employee drive. The Scanlon incentive increased the productivity of the workers for nearly 5 years, but motivation with capital cannot be sustained without a strong foundation of work determination. Workers were being given a dividend just to do what they were originally hired to do. The reward to influence the employees to work was greater than the actual act of communicating necessary responsibilities for the workers without an incentive. Bent trusted too heavily on the Scanlon plan to repair the work ethic rather than reiterating the psychological and economic contract.

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

One of the main issues that the plant faced is the fact that there is no more understanding between the employees and management. They blamed each other. Management blamed the employees for the low productivity and the employees accused them of being devious with the bonus calculation (Michael Beer, 2008). As a result, the communication flow between them is broken. Management failed to effectively perform their duties as leaders of the plant. As one of the solution to this problem, the plant could benefit from using the supportive model. According to Newstrom, management who use this model support their employees in their work. Also, they provide tools to help them grow and accomplish things in the interest of the company (Newstorm, 2015). As a result, this would give the employees the feeling that

Meeting with staff, providing the opportunity to discuss concerns, ascertain motivation and build relationships between management and workers. Collect and analyse performance figures and observe trends, (for example absence levels, retention, production or customer service). Use staff satisfaction surveys to determine the mood of employees. Promptly analyse responses to identify areas requiring action.

In this portion of my case analysis, I will be showing ways for suggested solutions in order to help improve the situation at the Engstrom Auto Mirror Plant. I will be showing ways in which organizational improvement outcomes can directly help remedy some of the issues and recommend strategic actions that would lead the organization in a proactive production workforce. The recommendations are creating committees, rework how the Scanlon Plan bonus works, create or use their marketing and sales department to the full capacity, and to help empower the workforce work to achieve Corporate Social Responsibility. (CSR)

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

The manager’s retaliatory approach to lower the loss percentage was not a motivational factor for the employees at all when he changed the number of hours employees had to work to receive free food from 6 hours a day to 12 hours. Evidently the employees did not respect his authority as the change did not seem to have an effect on them nor did it give them any motivation to do better. These jobs where minimum pay jobs

Due to this culture, the work unit climate is affected as well. It can be seen that there is a weak cross-functional collaboration among the departments since Jack’s leadership. This is demonstrated by Jack, who goes directly to R&D department for new projects without considering any discussion with other departments. Therefore, other departments do not functioning at their optimal level hence, it affects the organization effectiveness. Besides that, it is clear that Innostat employees only working within their own departments, and prefer to work on their achievements, hence prove that there is no common goal among them. Apart from that, Jack’s opinion on “Good ideas don’t need incentives, they need passion” (Beer, 2006) is one of the factors that affect the individual and organizational performance. Jack as a leader does not put much attention on the rewards, hence it

II. Root Cause Case Study Analysis Identify root causes of known organizational issues from a human behavior perspective. There are several major organizational issues that have contributed to low productivity and lack of motivation at Engstrom. The events that commenced Engstrom’s organizational issues stem from the failure of the Scanlon Bonus Plan (Beer, 2008). The system was created so that employees became motivated to exceed the standard.

Low morale among employees in any company eventually leads to decreased profits with other factors of the business decreasing along the way. “And US Airways employees, who have seen their pay cut by more than 20 percent and their health insurance and pension plans shrink, are certainly an unhappy lot” (Claudia H. Deutsch). In order to increase profits, the airline has decreased pay and took away some of the earned vacation. “Company executives say they are taking steps that will improve working conditions and profitability” (Claudia H. Deutsch). Many employees were calling in sick which the company believed would eventually lead to poor customer service.

It is clearly that the company is experiencing some growth; however, the management needs to find a solution to solve the arising issue where their employees are lacking of motivation in their job. However, the executive team’s decision to raise pay rates for its customer service staff and the vested profit-sharing plan does not improve the employees’ work performance or customers’ satisfaction.

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

According to the data, it already operates 447 factories in 194 countries. Therefore, Nestle needs to hire many employees to continue its business. However, supervising the employees becomes the critical issue encountered by the Nestle. Leader cannot oversee employees’ performance at the same time. For instances, sometimes leader would not discover the slackness and indolent of the employees. It is lead to the work cannot be completed on time and its business operation would become inefficient. If the leader cannot detect and solve this issue, many employees would muddle along. However this small problem would become huge problem in management. It would influence the operation of the Nestle. In the contrary, some well performing employees also ignored by the leader. They cannot reward them who did well opportunely. Therefore, the well performing employees would disgruntled and irresponsible for their work. Nestle emphasize on trust each other. However, the employees who be neglected by leader would doubt and suspect their company. This condition is contrary to the company's belief. Thus, the best way to solve this issue is the leader pays more attention on their employees. Rewarding the well performing employees immediately and punish the bad performing employees such as deduct their salary. On the other hand, communication is also important between leader and employees. Leader should be more listening the