The Engstrom Auto Mirror Plant

Introduction

        The Engstrom Auto Mirror Plant has seen a severe decline in production as well as in the morale of their workers.  The reason why the moral has declined is that in June 2006 the company had to lay off 46 of the 255 employees.  I can surmise that at that time, people were stressed out not knowing if their job was going to be impacted and this set the foundation for a stressful environment.  After the 46 were let go, the company still was having a hard time and now they have not received bonuses for 7 months.  The employees have been viewing the bonuses as extra regular income and not as an incentive for working above and beyond standards. Prior to the downturn in the economy the workers had issues with the system, particularly the change of the base rate as well as not thinking managers should get what they were receiving due to their perception that they didn’t do as much work as the regular workers.  Currently the workers have been consistently working below standards, and production and quality of work has declined.  The management is not only worried about the status of the workers commitment but also the reputation of the company and its products.

        The company in a past time of worker decline implemented the current bonus system, Scanlon.  This Scanlon system is unique, whereas the bonuses affect not individuals but the workers as a unit.  The plant manager, Ron Bent is concerned that the system is no longer working and that he either needs to readjust the system to tie along with the current atmosphere of the industry or that he might need to scrap it all together and do something different.  Based on history and what went into rolling out the system, he seems reluctant to start over.

        There are so many factors that have related to the diminishing environment at the company and there will possibly be many solutions.  An economic downturn can be hard for many people and extra stress on already hard circumstances.  Being transparent and outlining the position the company is in and being very clear about how that could change the expectations could be a good start.  The custodial model of organizational behavior was the premise of the Scanlon, but also incorporated the system model, because the employees input into changes of the company made them feel valued and part of the organization.  This portion of the Scanlon seemed less important as time went on and I believe that this is something that was really important.  More input from the workers are need to combat the issues that are currently going on.  The importance of communication in times like this are evident.  By removing the psychological barrier between the workers and management the workers might be able to hear them out and understand the importance of change in order to not only protect the organization but in turn protect themselves.

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