Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Protagonist in the case

Ron Bent, Plant manager, Engstrom Auto Mirror Plant

Main issues facing by Ron Bent

• Dissatisfaction grew among employees of Engstrom plant with certain aspects of Scanlon incentive program. Plant is unable to provide bonuses to employees under Scanlon plan due to downturn in the industry which further grew anger and suspicion among employees.

• Productivity was highly affected. Target production cannot complete on time which increases the threat of late deliveries.

• Quality of products was also decreased which poses a threat of losing prospective clients.

Objectives of Ron Bent

• To motivate superior employee performance in both good and bad times.

• To build confidence among employees about Scanlon incentive plan and increase enthusiasm and satisfaction of employees with the plan.

• To increase overall productivity and quality of the products.

• To reduce cost of labour to save money for distributing bonuses.

• To identify problems with the Scanlon plan and revise the same if required.

Analysis

In the late 1990s when plant was in difficult times and facing a problem of unprofitability Ron Bent was hired to improve the situation. After careful study Ron Bent introduced an incentive plan namely ‘Scanlon plan’ to improve the overall structure, profitability, productivity and work environment of the plant.

He takes following steps to introduce Scanlon plan smoothly and effectively in the company:

• Posted information about Scanlon plan on bulletin boards.

• Discussing plan thoroughly with workers who were known as opinion leaders.

• Organized a trip for a group of workers to another plant where Scanlon plan had successfully implemented. He encourages the workers to develop their own sense of plan and understand the plan properly.

• Communicated clearly to all the employees that plan would be adopted after the consent of minimum 75% of workers in the plant.

Scanlon plan was adopted in the plant with the...