Engstrom

Engstrom Auto Mirror Plant Case

Motivating in Good Times and Bad

Prepared by: Lily Yuan, Vicky Pan, James Xu, Kate Li, Issakson Wang, Ariel Cao, Vivian Fu

9 November 2013

Contents

  Introduction to Engstrom

  Scanlon Plan

  Scanlon Adoption Plan at Engstrom

  Problems and Solutions?

2

Introduction to Engstrom (I)

  A privately owned business manufacturing mirrors for trucks and automobiles

  Located in Richmond, Indiana

  209 employees

  Use Scanlon Plan as an incentive for staff

3

Introduction to Engstrom (II)

Creation

1948

late 1990s

Troubles:unprofitability,production delays

Ron Bent hired

1998

Dec.1999

Scanlon plan is voted by 81% workers

Downturn in industry

2005

46 employees lay off

June 2006

Need a new solution!

May 2007

Economical Context

1948

1990s

1999

2005

2007

Contents

  Introduction to Engstrom

  Scanlon Plan

  Scanlon Adoption Plan at Engstrom

  Problems and Solutions?

5

Scanlon Plan

  Developed in 1930s by Joseph Scanlon, a cost accountant by training and a

steelworkers’ union official at a steel mill facing bankruptcy.

  The heart of the plan is the concept of participative management.

  The three plan components:

•  the submission of suggestions for improvement by employees at all levels

•  the structure of the company committees that evaluate the suggestions

•  then the sharing of the fruits of increased productivity through monthly

bonuses

Ideally work together to drive big changes in behavior and attitudes!

6

Contents

  Introduction to Engstrom

  Scanlon Plan

  Scanlon Adoption Plan at Engstrom

  Problems and Solutions

7

Scanlon Plan Adoption at Engstrom (I)

  Employees signed a Scanlon Bonus Plan Agreement at Engstrom

  The strategy was to start with the total sales revenues generated during a

specified period and then establish a percentage of that total as a standard or

normative cost of...