Case Study The Engstrom Auto Mirror Plant

The Engstrom Auto Mirror plant is a private-owned business that consists of over 200 workers in Richmond, Indiana. It is known for manufacturing trucks and automobile mirrors. The business started an incentive plan known as The Scanlon Plan in 1999, which allowed employees to earn bonuses. This was a fundamental to each person’s performance and paid rate of all work savings each month. After introducing the incentive plan, workers became motivated; as a result, it increased productivity, thus, saved the company from facing unprofitability in the 1990s. Unfortunately, in 2005, the plant again, faced low profitability and inadequate production. As a result of low profitability and productivity, “Ron was forced to lay off 46 employees in mid-2006
Bent illustrated the problem at the “plant as a ‘vicious cycle’ and paying a stiff price for slips in productivity and continued to say that money could use to pay workers as a reward for high performance. (Beer, 2008 p.2).”There were several issues on the Engstrom Auto Mirror Plant grounds; however, the main issue to be addressed is the imprudent motivation, feedback and communication management provided the employees. Firstly, there was immense significance placed on external factors for example, Scanlon Bonus Plan, an incentive plan that motivates and drives workers’ performance but failed to foster employees’ needs. Motivation is imperative to the workforce as it elevates employees’ performance and attitude, improves product quality, minimize turn over and cost saving; with all these motivational outcomes bring competitive advantage. Motivation is an internal and external effort that triggers passion and stamina in individuals to be committed and attentive in their job and mindset to achieve a goal. “Research shows that there are four signs that affect employees’ motivation (engagement, commitment, satisfaction and turnover). If employers focus on these four indicators successfully, employee motivation and organizational success strengthens (Newstrom, 2015
It is use as a platform to motivate employees, identify strengths and weaknesses so as to provide the best feedback, which in turns, elevate workers’ confidence and performance. Engstrom “employees suggestion rate declined from 100 to 50 a year which illustrate internal demotivation and lack of interest to contribute to the Plant’s success (Beer, 2008 p.5).” Feedback incorporates with motivation, without feedback, employees fear that their voice or ideas are not heard and management will be blindsided to workers’ emotions, thus, failing to respond accordingly. The executive committee acknowledged employees’ suggestions and decide on which suggestions to utilize (Beer, 2008 p.5).” This method was not ineffective, but should be revamped to a more public decision making