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Date Submitted: 10/05/2015 07:39 AM
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...