Engstrom Auto Case
Introduction
The Engstrom Auto Mirror plant employs over 200 people at its Indiana location. Since 1999, workers at the plant have received bonuses based on the Scanlon Bonus Plan, which paid a percentage of all labor savings each month. Workers were motivated by the bonuses to increase their productivity, thus saving the plant from its unprofitable state during the 1990s. However, in 2007, the plant once again faced issues of unproductivity and low profits. The plant manager, Ron Bent, had to lay off 46 employees in 2006, and employees had not received a bonus in seven months. Employees had become dissatisfied with the Scanlon Plan (“Engstrom”, 2008, p. 1-6).
This paper will examine the use of Scanlon Plan as an incentive program for staff to motivate them in good and bad time. Analysis of the Engstrom Auto Mirror case will explore specific perception and motivation factors. Finally, using knowledge of perception and individual decision making, suggestions as to how Kravitz and Brooks could have reacted better to the situation will follow.
Analysis
Due to the low productivity and profitability of the Indiana plant, the Engstrom family was threatening to close the plant altogether (“Engstrom”, 2008, p. 6). Bent described the issue at the plant as “a vicious cycle. We’re paying a stiff price for slips in productivity – and that’s money I would far rather be paying to workers as a reward for high performance” (“Engstrom”, 2008, p.2). Although there are many different issues at the Engstrom plant, the main concern to be addressed is that the management is not properly motivating the employees.
Motivation is important because it is one of the three main forces that lead to good job performance. Job performance is a combination of motivation, ability, and environment. There is an overwhelming amount of evidence to show that employees are not being motivated to achieve a high performance level, thus leading to the problems of low productivity and
The Engstrom Auto Mirror plant employs over 200 people at its Indiana location. Since 1999, workers at the plant have received bonuses based on the Scanlon Bonus Plan, which paid a percentage of all labor savings each month. Workers were motivated by the bonuses to increase their productivity, thus saving the plant from its unprofitable state during the 1990s. However, in 2007, the plant once again faced issues of unproductivity and low profits. The plant manager, Ron Bent, had to lay off 46 employees in 2006, and employees had not received a bonus in seven months. Employees had become dissatisfied with the Scanlon Plan (“Engstrom”, 2008, p. 1-6).
This paper will examine the use of Scanlon Plan as an incentive program for staff to motivate them in good and bad time. Analysis of the Engstrom Auto Mirror case will explore specific perception and motivation factors. Finally, using knowledge of perception and individual decision making, suggestions as to how Kravitz and Brooks could have reacted better to the situation will follow.
Analysis
Due to the low productivity and profitability of the Indiana plant, the Engstrom family was threatening to close the plant altogether (“Engstrom”, 2008, p. 6). Bent described the issue at the plant as “a vicious cycle. We’re paying a stiff price for slips in productivity – and that’s money I would far rather be paying to workers as a reward for high performance” (“Engstrom”, 2008, p.2). Although there are many different issues at the Engstrom plant, the main concern to be addressed is that the management is not properly motivating the employees.
Motivation is important because it is one of the three main forces that lead to good job performance. Job performance is a combination of motivation, ability, and environment. There is an overwhelming amount of evidence to show that employees are not being motivated to achieve a high performance level, thus leading to the problems of low productivity and