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Engstrom Auto Mirror Plant - Motivating in Good Times and Bad

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Engstrom Auto Mirror Plant:

Motivating in Good Times and Bad

Case study report

Ayed sweis

 Southern new Hampshire university  



In the late 90’s Engstrom faced difficulties with production lines due to redesign and the introduction of new technologies into the products, the manager at that time was less than tech savvy to usher these changes into the workplace, after him bent took the mantel and due to his experience he planned change the employee motivation system  with the Scanlon plan that 81% of employees agreed on and implanted on December 1999, productivity and employee satisfaction increased , slack time became a distant thought, most employees even displayed organizational citizenship behavior,  but by 2005 the company experienced once again employee dissatisfaction and noticeable decrease in quantity and quality of their products .

This report will examine the effectiveness of the Scanlon method originally adopted, management methods and actions taken by both employee and management within the variables provided in the case study, and solution to the problems provided .

The major issues that must be discussed is the slow response to the signs of employee dissatisfaction and the lack of measures taken to decrease the dissatisfaction, and also, the actions taken that increased the dissatisfaction .

Root cause discussion

The Scanlon method was implanted to save the company from a down turn in 1999 but did not address all the dissatisfaction employees faced, it was flawed from the start, although it did boost employee morale and OCB, “the machine operator helps out, almost like a surgical nurse, instead of standing around with his hands in his pockets.” (Engstrom 2008 p.5) through listening to employees and valuing their feedback , yet it didn’t fully address other motivational systems to build more trust and loyalty “Motivation also requires discovering and understanding employee drives and needs, since it originates within an individual” (Newstrom, J. W., & Davis, K. 1997), it only provided money as the motivation and when the bonuses were cut off for 7 months there was nothing to motivate left.

The employees heavily relied on the bonuses every month that they saw it as part of the paycheck and not a bonus, furthermore these bonuses were a result of extra work with the only target is to produce more and faster and did not include quality only quantity, which would threaten their certified status .

   “enthusiasm waned and dissatisfaction grew with certain aspects of Scanlon. Suggestion rates dropped precipitously, down from hundreds to 50 a year”( engstrom, 2008, p.5) and there was little response from the management, furthermore, the changes in bonus rates and the downsizing 20% of employees only caused more distrust ‘The layoffs, when they finally occurred in mid-2006, shook the confidence of even the most fervent Scanlon proponents among the workforce.” (Engstrom, 2008 p.6)  employee feedback and trust are very important to any organization so it would enhance information flow and better satisfy the levels of maslow’s hierarchy of needs of fulfillment and self-actualization.


Given the employees heavily relied on the bonus as part of a monthly pay check, a revision of the Scanlon method must be implemented, firstly, the bonus system must be distributed on each quarter of the fiscal year rather than monthly, as well as tying the bonuses to a quarterly goal, rather than more production without a demand for the supply. Scanlon’s first thoughts about employee participation in the work place resulted from his experience during the depression when citizens worked together in a common endeavor to solve the very austere problem facing the community.  (Lesieur, F. G., & Puckett, E. S. (1969))

Secondly, the Scanlon method must make clear that the bonuses will be given accordingly from the cash on hand generated from net sales revenue, and they’re entitled for that bonus as soon as the payment comes through, while keeping the income and cash flow statement open for the employees to review to decrease distrust.

There must be more motivational systems in place both tangible and intangible, the quarterly target is one of them so that it drives employees to work towards a common goal rather simply to work more and harder to decrease the feeling of chasing a moving carrot .


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