Engstrom Auto Mirror Plant Case Study

Based in Richmond, Indiana is Engstrom Auto Mirror plant (Engstrom) a privately owned mirror manufacture that does most of its business making mirrors for trucks and automobiles. Engstrom have been operating since 1948 under the original production lines; which was successful unit the 1990s when production became unprofitable because of simple supply and demand. The managers believed by incorporating new technology into the company it will increase productivity. The transition did however create conflict between managers and employees, which led to the resignation of the then manager Joseph Scanlon in 1998. That same year in an attempt for a quick fix solution Engstrom hired Ron Bent who had strong beliefs in the power of worker incentive programs

The industry was facing a downturn that ultimately decreased sales, which also affected the payment of bonuses to employees. This lead manager Ron Bent to lay off 46 of his employees the following year along with not being able to payout bonuses for a lengthy seven months. This lead to the establishment of issues that affected both employees and company. The main issue with the Engstrom Auto Mirror Plant was the manner by which to improve quality and execution of its assembly line workers. Manager Ron Bent decided the most ideal approach to do this was to incorporate the Scanlon plan, which concentrates on worker support to recognize approaches to build profitability. A widely accepted plan at the time by employees gave them the type of motivation that increase job performance. However, not giving employees the best possible motivator to raise their efficiency levels, plus they are using a financial incentive plan with major design problems.“Research shows that there are four signs that affect employees’ motivation (engagement, commitment, satisfaction and turnover). If employers focus on these four indicators successfully, employee motivation and organizational success strengthens (Newstrom, 2015, p.