The Analysis of Engstrom Auto Mirror Plant

The Analysis of Engstrom Auto Mirror Plant

Engstrom Auto Mirror Plant [Engstrom] is a privately owned business that manufactured mirrors for automobiles and trucks. By the late 1990s, the plant had become unprofitable. The production lines went under reconstruction and they gained new technologies in which management was unable to adapt. This caused long production days which in turn caused employees to become less productive, alienated and irritated. As a result, new management came in (Ron Bent) and was greatly concerned with the workers incentive program. The Scanlon plan was suggested to provide a bonus reward for effective communication within the organization as well as new methods and new machinery to ensure the workers felt a part of the company. In 1999, after extensive feedback from management and employees as well as extensive research, the Scanlon plan was put into place and Engstrom focused on cost savings and producing more per hour of labor spent, according to Beer & Collins (2008).

The plan worked for years as the company and the employees were satisfied with their bonuses and were pleased with the communication and feedback they were giving and receiving. Until the workforce morale and sales figures had a turn for the worse in 2005. Ron Bent had to implement budget cuts and layoffs as a result in 2006. This left employees angry that they went from having a successful incentive plan where they received regular bonuses to getting no bonuses for several months. Employees had the resources to track their bonuses procedures, policies and percentages every month, but were troubled with the ‘jargon’. Some also felt that their feedback wasn’t as important to the company anymore.