Case Study

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

by Michael Beer, Elizabeth Collins

8 pages. Publication date: Apr 11, 2008. Prod. #: 2175-PDF-ENG

In May 2007, the Engstrom Auto Mirrors plant, a relatively small supplier based in Indiana, faces a crisis. The business was in the second year of a downturn. Sales had started to decline in 2005; a year later, plant manager Ron Bent had been forced to lay off more than 20 percent of the work force. Plant productivity was dropping, employee morale was low, and product-quality issues had begun to surface. Relationships with key customers were at risk. Downturns were not new at Engstrom. Whe... Read More »

In May 2007, the Engstrom Auto Mirrors plant, a relatively small supplier based in Indiana, faces a crisis. The business was in the second year of a downturn. Sales had started to decline in 2005; a year later, plant manager Ron Bent had been forced to lay off more than 20 percent of the work force. Plant productivity was dropping, employee morale was low, and product-quality issues had begun to surface. Relationships with key customers were at risk. Downturns were not new at Engstrom. When the plant had reached a similar crisis point years earlier, the institution of a Scanlon Plan, a company-wide employee incentive program, had proven critical in building morale, increasing productivity and product quality, and leading Engstrom into a turnaround. For several subsequent years, Engstrom workers had received regular Scanlon pay bonuses. But the bonuses had stopped in 2006, and now Ron Bent must determine how to get the plant back on track. Should he revise the Scanlon setup? Remove Scanlon and try another plan? Identify and change other organizational factors that may be sabotaging Scanlon?

Subjects Covered

Change management

Human resource management

Incentives

Leadership

Manufacturing

Motivation

Learning Objective

To enrich understanding of how to motivate an organization of diverse...