Individual and Group Behavior

Engstorm Auto Mirror Plant: Motivating in Good Times and Bad

Executive summary: Engstorm Auto Mirror Plant, a privately-owned business that

manufactures mirror for trucks and automobiles is facing crisis at the plant. There’s a dissent
among workers toward the current Scanlon Plan which they feel has become useless in
motivating them. There dissonance is taking a toll on company’s health due to frequent
productivity as well as quality issues. Ron Brent, plant manager of Engstrom, tries to identify
the root cause of the problem with the help of his assistant Joe Haley which, after having it
discussed with the workers comes out to be Scanlon plan. This makes him think about the
relevance and efficacy of Scanlon Plan as per current scenario. The company has to bear the
brunt of losses due to frequent production losses and the downturn has caused laying off
workers which has further deterred the morale of the workers.
Workers are now concerned with distributive justice as they think company is not being
transparent in distributing bonus and maybe fudging the numbers thereby taking away what
rightfully belongs them. The question of fairness is also being raised among the workers as
they feel that their hard work is not being given the acknowledgement it needs.
Ron looks back into the past when company went through the same problem and how it got out
of it and tries to retrospect where did they go wrong and what should be done to bring company
back on its feet.

Problem Statement: Decrease in productivity and quality due to lack of motivation among
workers.

Decision Problem: Ron Brent, plant manager of Engstrom, needs to find out a way to bring
the company back to its feet from the ongoing crisis and motivate the workers and revamp the
production.

Alternatives:
1.The company should make appropriate changes in the Scanlon plan and include factor for
individual productivity in addition to collective productivity. The whole production committee
should reframe its structure and composition and increase the no. of elected representatives of
workers from 2 to at least 3. Different options of incentives should be provided other than
monetary incentives. A proper channel for the communication should be introduced to share
the information about the company projects, targets, changes in policy and administration and
to redress the grievances of employees.
2. The company should layoff inefficient workers and make a strict stance toward revamping
the production. It should set up a minimum daily production target and those who are not able
to complete the targets repetitively should be given counselling.
3. The company can scrap off the Scanlon plan and implement a different scheme after
discussing with the workers. They should look for a new scheme to motivate and incentivize
the workers.
4. Increase the salary to motivate workers to work more efficiently.

Alternative chosen:
The best alternative above all will be to go with first one. The current Scanlon plan takes into
consideration the overall productivity and distributes bonus equally irrespective of the
individual productivity. This method at first did reap profits for the company but due to its
incapacity to distinguish workers on the basis of their productivity it couldn’t motivate the
under performing to scale up or the well performing workers to continue to excel. The absence
of individualistic goal setting led to under performance by workers which would otherwise be
more productive and efficient.
The other reason for unmotivated workers is their belief that the bonus calculation number is
fudged. The complexity of Scanlon plan and lack of proper communication channel between
management and workers is not helping the cause of information justice in the company. This
needs to be attended to by introducing a propel channel to share the information about the
company projects, targets, changes in policy and administration and to redress the grievances
of employees. Apart from this, the production committee can use one more elected
representative in order to signify their importance and to give workers more power in decision
making. The incentive scheme which provides only for money should include giving workers
acknowledgement of their hard work in other ways like more responsibility, promotion etc.
which would boost up their morale.