Over 200 workers are employed by the Engstrom Auto Mirror plant in Indiana. In May 2007, a crisis rocks the Engstrom Auto Mirrors factory, a modest supplier located in Indiana. Ron Bent, the plant manager, was forced to lay off over 20% of the staff in 2005 while sales were still declining.
As a result, production costs had soared. The unit cost of producing a car mirror had increased by more than 50 percent since 2005, while the selling price had fallen by nearly 30 percent. In response to these trends, Bent had slashed costs by eliminating health insurance and other benefits for workers, but this only exacerbated the tension between management and labor.
Now, in May 2007, with the economy beginning to rebound, Bent is under pressure to find a way to improve productivity and cut costs even further. He has been told by the company’s CEO that he must reduce the cost of producing a car mirror by 10 percent or he will be replaced. To do this, Bent decides that he must implement a new system of employee motivation at the plant.
Plant productivity was decreasing, employee morale was low, and product-quality problems were becoming apparent. Key customers’ relationships were in danger. When Engstrom’s plant had reached a comparable situation years before, the institution of a Scanlon Plan, a company-wide employee incentive program, had proved vital in generating morale, boosting production and product quality, and leading to a turnaround.
Would the same solution work again? This case study provides background on the company, describes the problems the plant was facing, and details the implementation of the Scanlon Plan. The case also assesses the results of the plan and alternative solutions that might have been considered.
In order to increase productivity and save the plant from financial ruin, Engstrom offered its workers regular pay bonuses. This had been successful for several years, but when the bonuses stopped in 2006, Ron Bent must now find a way to get the plant back on track.
Employment at Engstrom had always been high, despite the plant’s remote location. The company provided good benefits and paid above-average wages. In addition, most workers had been with Engstrom for many years and viewed their jobs as secure. Management was stable, and Ron Bent had been with the company for almost two decades.
Despite these factors, productivity at Engstrom had declined in recent years. Ron Bent believed that this was due in part to the lack of motivation among workers. He hoped that by reinstating the Scanlon pay bonuses, he could increase productivity and get the plant back on track.
The case study does not provide enough information to fully analyze the situation at Engstrom. However, it does provide some insights into the company’s culture and management style.
Engstrom is a family-owned company that has been in business for over 50 years. The company is based in a small town in the Midwest, and most of its employees have been with the company for many years. The company culture is one of loyalty and stability.
To discover reasonable answers for the Engstrom Auto Mirror Plant case, our assignment was to identify the company’s major issues as well as its managers’ decisions, and to find suitable solutions that took into account origins from where they have been emerging. This case is of great importance since it addresses day-to-day difficulties in addition to employee relationship problems.
As we can see, there are several issues at Engstrom Auto Mirror Plant. Motivation among employees is low, due to the lack of trust and communication from management. This leads to high rates of turnover and absenteeism, as well as low quality products. In order to address these issues, it is important for management to improve communication with employees and build trust.
Additionally, they should focus on providing more opportunities for employee development and growth. Finally, they need to improve their incentive system in order to better motivate employees. With these changes, Engstrom Auto Mirror Plant will be able to improve its employment situation and product quality.
To discover solutions for the particular firm’s scenario, our hypotheses will be based on theories of organizational behavior. The main aim was to figure out how to increase productivity and motivation levels among employees while also reconsidering management strategy. It is a given that every boss’ first objective is to keep good ties with their staff and build job fulfillment in order to achieve greater results.
Motivating employees should start from the moment they are hired, by providing a clear job description and setting expectations. Furthermore, it is important to remember that people are different and, therefore, need different things in order to feel motivated at work.The company’s strategy should also be based on employee motivation techniques in order to achieve the best results. In this case study, we will analyze different aspects of organizational behavior in order to find out how they can help improve the productivity of Engstrom Auto Mirror Plant.
First of all, it is important to understand what motivates people to work hard. There are different theories concerning motivation, but most of them agree that there are two main types of motivation: intrinsic and extrinsic. Intrinsic motivation comes from within oneself and is usually related to the satisfaction of doing a good job. Extrinsic motivation, on the other hand, comes from external factors such as money or recognition.
Something has to be altered in order for us to overcome difficulties such as low employee morale, and our main concern is the turnover of Engstrom Auto Mirror Plant. “We can’t dig ourselves out of this recession with a performance like that,” as Harley said (2008). As a result, we will seek to discover major issues and search for alternative answers.
The high rate of employee turnover is very costly for the company. According to National Association for Business Economics (NABE) the cost of replacing an employee can range from one-half to two times that person’s annual salary. The cost includes not only direct monetary outlays but also the loss of productivity while a new worker comes up to speed and the negative impact on morale of other employees (“Cost of Employee Turnover”, 2019).