Case Study Analysis
Engtsrom mirror plant is a small company employing 209 people. The core focus is made on the keeping the costs of various auto and truck mirrors low to compete at the market, as well as to control the level of quality and deliver the orders on time. Scanlon plan as the gain sharing incentive program was implemented to boost creativity and generating ideas how to increase the work productivity. However, currently Engstrom auto mirror plant again faces the issue of low morale of its employees who started to perceive additional bonuses assigned for the productivity improvement as something legally owned by them.
Organizational Issues
It should be stated that the case study describes two critical periods for the plant existence. The first is related to the crisis of 1998 with the low productivity caused by the low morale of employees. A Scanlon plan was implemented to facilitate the change-friendly culture which is crucial for the achievement of the manufacturing excellence and winning the market. The essential position held by the top manager was that the decision on its implementation should be made by the majority of employees. As the result, conflicts and tension inside the team decreased. The plant’s business grew, together with the quality and profits.
In 2007 the situation was worsening. The financial results were poor, delays in orders completion were critical; several concerns arose regarding the quality (Beer & Collins, 2008). Moreover, employees began to express their dissatisfaction because seven months a row they did not receive the bonuses according to the Scanlon plan. Such a spirit was related to the changes in perception of the gain sharing system. From the early beginning, it was the tool to create the culture of creativity and cooperation, team work, communication openness to express ideas and proposals how to improve productivity, i.e. products output per labor hour. With the time, the number of proposals declined from 305 to some 50 proposals per year. Employees lost that feeling of adding value to the company by applying their best talents and knowledge and taking responsibility for the success for the business operations. Other complaints were related to the distrust of bonus calculations and the fairness of the bonuses payment to the supervisors.
Outline for the Analysis
In order to provide the recommendations to the top management of the Engstrom is it important to apply the following human behavior theories and concepts. First of all, there is a need to analyze the advantages and disadvantages of the participative management. As plant manager’s core task was to change the culture of the company, it is also needed to analyze what factors motivated employees. The theory of planned behavior and its application to the employee’s intentions and deeds will be analyzed. Moreover, the new model of employees’ motivation presented by Nohria, Groysberg and Lee (2008) will be described with the practical examples indicated in the case study. This model implies that “motivating employees begins with recognizing that to do their best work, people must be in …
