Engston Auto Mirrors Plant
Nicole Ferrin
October 13, 2008
BUSA 305
Case Analysis
Engstrom Auto Mirror Plant:
Motivating in Good Times and Bad
Engstrom Auto Mirror Plant is facing the problem of not being able to keep their employees motivated in both good and bad times. Before the problem occurred, Ron Bent, the plant manager, had adopted the Scanlon Plan. The Scanlon Plan was an incentive plan used to motivate employees and to drive changes in their behavior and attitudes. The plan consisted of monthly bonuses for employee productivity, communication meetings, a committee to encourage and evaluate employee’s suggestions, and overall improved working conditions. Employees were satisfied with their jobs and motivated to be productive. Over time, changes needed to be made to adjust the Scanlon plan because employees became less satisfied and enthusiastic. Employees no longer trusted the management and committees; they believed the management team may be changing the ratios and numbers that affected their monthly bonuses. Also, employees began to think the plan was unfair. Bent was not surprised by the reactions of his employees, he knew the plan needed to be revised every so often. In 2005, before he could decide how to revise the plan, the industry downturn gradually decreased the company’s sales figures and the employee morale. The employees weren’t receiving monthly bonuses due to low productivity and Bent had to start looking into the idea of a layoff. He warned the employees of a layoff occurring if sales figures didn’t improve, but the employees didn’t listen. Finally a layoff did occur and it was like an “emotional lightning rod” for the plant and a dividing line between the good and bad times. By 2007, there was increasing evidence of dissatisfied employees and suspected pilfering. Employees had lost their motivation to work productively. So what caused such a decrease in employee motivation at the Engstrom Auto Mirror Plant? The Scanlon Plan was
October 13, 2008
BUSA 305
Case Analysis
Engstrom Auto Mirror Plant:
Motivating in Good Times and Bad
Engstrom Auto Mirror Plant is facing the problem of not being able to keep their employees motivated in both good and bad times. Before the problem occurred, Ron Bent, the plant manager, had adopted the Scanlon Plan. The Scanlon Plan was an incentive plan used to motivate employees and to drive changes in their behavior and attitudes. The plan consisted of monthly bonuses for employee productivity, communication meetings, a committee to encourage and evaluate employee’s suggestions, and overall improved working conditions. Employees were satisfied with their jobs and motivated to be productive. Over time, changes needed to be made to adjust the Scanlon plan because employees became less satisfied and enthusiastic. Employees no longer trusted the management and committees; they believed the management team may be changing the ratios and numbers that affected their monthly bonuses. Also, employees began to think the plan was unfair. Bent was not surprised by the reactions of his employees, he knew the plan needed to be revised every so often. In 2005, before he could decide how to revise the plan, the industry downturn gradually decreased the company’s sales figures and the employee morale. The employees weren’t receiving monthly bonuses due to low productivity and Bent had to start looking into the idea of a layoff. He warned the employees of a layoff occurring if sales figures didn’t improve, but the employees didn’t listen. Finally a layoff did occur and it was like an “emotional lightning rod” for the plant and a dividing line between the good and bad times. By 2007, there was increasing evidence of dissatisfied employees and suspected pilfering. Employees had lost their motivation to work productively. So what caused such a decrease in employee motivation at the Engstrom Auto Mirror Plant? The Scanlon Plan was
Cited: Beer, M. & Collins, E. (2008). Engstrom Auto Mirror Plant: Motivating in Good Times and Bad. Retrieved October 13, 2008, from Harvard Business School Publishing. Judge, T. & Robbins, S. (2008). Organizational Behavior. New Jersey: Pearson Prentice Hall.