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Engstrom Auto Mirror Plant

By:   •  May 1, 2016  •  Case Study  •  678 Words (3 Pages)  •  2,680 Views

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Problem Statement

The Engstrom Auto Mirror plant is a small privately owned business that supplies mirrors for trucks and cars. The plant had suffered several years of downturn before Robert Benton introduced the Scalon plan. The Scalon plan, an employee incentive program, was created to boost employee morale, increase productivity, produce quality inventory and lead the plant to a turn around. Now, the plant manager, Robert Benton, must figure out how to get the plant back on track in order to stop the plant from experiencing another year of downturn.

Hypothesis 1: It may be that the organization has not met the employee’s expectations

When an employee enters an organization they have certain expectations. According to the article, ‘Note on managing a psychological contract,’ it states, “A psychological contract is made, which may defined as the mutual expectations of the individual and the organization as articulated by its managers.” Employees and organizations expect to receive certain things in exchange for participation. Employees at the Engstrom plant expected to get their bonuses while Robert Benton, the plant manager, expected an increase in productivity and the quality of the plants inventory. When one side of the contract is being met, this can effect the relationship and the fulfillment of their needs. However, the Engstrom Auto Mirror plant was not meeting their end of the contract. The employees of the plant were no longer seeing the benefits of the bonus plan which caused them to have distrust issues. The employees are beginning to distrust the plant manager entirely because of the system of bonuses and the method in which they are calculated.

Hypothesis 2: It may be that the current plan does not motivate the employees.

The employees at the Engstrom Auto Mirror plant are starting to think more individually instead of having a group mentality. This is a major part of Engstom’s problems. The Scalon plan was originally designed to provide motivation for the plant’s employees by allowing them the opportunity to be a part of the company and a community. The idea behind the Scalon plan was to show value in group success rather than their individual success and payment. Employees expect that when they put forth a certain amount of effort that this will lead to a reward, when these individuals do not see a link between the two, their motivation will decrease drastically.

Hypothesis 3: It may be that the Scalon plan needs to


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