Case Study Engstrom Auto Mirror Plant

Engstrom Auto Mirror Plant case analysis exhibits mundane organizational conduct controversies and worries with building relationships with workers. Managers of any organization goal should build and maintain a positive and open communication with workers and job fulfillment as the root based of a successful organization. Engstrom Auto Mirror Plant is in incredible misery due to absence of worker motivation; they have sufficient equipment but lack incentives to keep workers contented. The objective of this milestone is to identify the root causes of the organizational issues that Engstrom Company faces and examine underlying concerns from a human behavior viewpoint. In addition, provide proposals for organizational development that will increment

and enhance Engstrom workers production, attitude, and interest and revamp management planning. This will be successful through evidence-based management and theoretical models of organizational behavior.
Engstrom’s organizational issues stemmed from the downfall of the Scanlon Plan. The bonus system was mainly implemented to motivate workers and to have employees surpass the company’s performance goal. However, the purpose of the plan failed because the employees became demotivated and distrusts the incentive system as a result of not receiving their bonuses in seven months. With the incentive plan in motion, employees were now expecting to receive their bonuses separate from regular pay, which reflects their productivity level. The root cause of organizational issues on the Engstrom’s ground was due to lack of motivation and poor communication between management and the employees. The company’s incentive system implemented was an ineffective technique of motivating workers as it failed to support employees’ needs. Engstrom management must understand that to motivate employees, it is important to first find and comprehend what he or she needs. Management should willingly take care of the necessities of their workers. “The success of any organization depends on the ability of managers to provide a motivating environment for its employees” (Osabiya, 2015 p.63). If Engstrom incorporates Maslow’s Hierarchy of Needs in their strategic planning, this allows them to analyze and welcome workers’ needs and perceive that requirements may contrast among workers. In addition, to provide vindication for needs that are not currently met and identify what drives their employees to perform, connect with, and succeed.
The Scanlon plan was money-related based motivational instrument and the only one set up. When the cash ran out, there was no non-financial motivational framework to replace the current incentive plan. As a result, workers felt contradicted and disappointed, which led to decreased in connection, loss of profitability and issues in quality control. The incentive system symbolizes the difference and significance of extrinsic versus intrinsic motivation, one of Herzberg’s Two-Factor Model. In Herzberg Model, “Intrinsic motivations are internal rewards that a person feels when performing a job, otherwise self-motivated while extrinsic motivations are external rewards that occur apart from the nature of work” (Newstrom, 2015 p.123). Evidently, the plan focused on external factors, which led to employees’ increased extrinsic motivation. However, there are several other ways a company can motivate their employees through verbal and formal recognition (awards ceremony, recognition in the weekly meetings) and provide feedbacks. This will show employees how valuable they are to the company and that their hard work does not go unnoticed, which will increase their confidence, attitude and performance. “If management provides feedback to employees, employees are more likely to engage if they have a strong competence motive, a powerful drive to self-evaluate” (Newstrom, 2015 p.67).
Furthermore, by practicing the concept of Goal Theory, feedback will be routinely provided to employees, which allows them to set specific goals to manage and assess their performance behaviors. Feedback motivates employees more to keep working hard and increase self-motivation. Also, the sole-dependency of external motivation will transition into internal motivation. This means, with the Goal Theory implemented in the Engstrom Auto Mirror Plant company, management must first build a positive relationship with employees that will not negatively affect the employees’ productivity level whether there is an incentive system in place or not. “There are two kinds of motives for engaging in any activities: internal and Instrumental” (Wrzesniewski & Schwartz, 2014). What this really means is that as an employee if you're motivated to do a task mainly for the satisfaction of learning new things, this is internal. However, if the employee just does it to receive the rewards and recognition, that is instrumental. Money is the most recognized extraneous reward, but having the inner drive is also very vital. “Motivation is important because it is one of the three main forces that lead to good job performance. Job performance is a combination of motivation, ability, and environment” (Bauer & Erdogan, 2013, p. 97). When employees are really passionate about the job they are working in or have an enthusiasm for their work, the advantage that they feel goes past a paycheck.
The mistrust creates an uprightness division between employees and management, which normally take a lifetime to rebuild. Ultimately, management lacked confidence. Employees complained, “that supervisors should have received a reduced bonus because they were not working as hard as they are and the company might be playing with the numbers” (Beer & Collins, 2008 p.6). This is an extensive reversal regarding the Equity Theory, which led to intense organizational issues, employees’ demotivation and low profitability and productivity for the company. Equity Theory emphasizes the fairness on all reward systems. There should be no bias calculations on outcomes (rewards) that whatever outcome an employee produced are based on the effort he/she inputs (contributions) and should be rewarded, accordingly. If workers believe that their hard work is not recognized, they have a tendency to have less motivation to work harder. It is imperative for workers to trust management, which was unsuccessful in this case. The arduous framework of the bonus calculations led to the employees distrust.
In the beginning, the system consistently paid significant incentives. In the long run, this alerted workers to view the incentives as a major aspect of their normal pay and not as motivating force to move forward. The incentive plan lost adequacy as a motivational instrument. The employees’ mentality is that of Vroom Expectancy Theory, “in which motivation is a product of three elements: valence (how much one wants a reward), expectancy (one’s estimate of the profitability that effort will result in successful performance) and instrumentality (one’s estimate that performance will result in receiving reward)” (Newstrom, 2015 p.131-2). When cutbacks occurred, remaining workers became insecure in their job and influenced their yearning to perform. They did just what was expected of them to stay employed and nothing additional. “Employees were not compensated for seven months due to low productivity and profitability, which made the employees furious and distrust the plan” (Beer & Collins, 2008 p.2). This is adequate evidence that supports McGregor’s Theory X and Theory Y.
Despite the fact, that management was fully aware of the employees’ grievances and the redesign need for the incentive plan, management does nothing to ratify their complaints.

Evidently, Engstrom management team is not meeting the mental needs of the workers and breaks Newstrom implication of the "unwritten mental contract that workers sign upon employment with the company” (Newstrom, 2015, pg. 87-9). As a result of breach of contract, employees’ productivity declined. Over a period of time, the root causes of Engstrom organizational issues deepened. In the event that we take the underlying concerns of the organizational issues and incorporate them with Abraham Maslow's Hierarchy of Needs, worker matters will be accepted and improve both concerns, in addition, to the organizational controversies that invaded Engstrom Company. Maslow's research led him to develop five levels of what he describes as, drivers of all behavior. Maslow said that the necessities of every level must be met before a person would have the capacity to advance to the following level of requirements. Employees’ needs were being met on all levels when the plan was initially introduced, however as time passes by, workers become exhausted of the arrangement and along these lines, stopped meeting their

requirements.
In conclusion, a worker's job achievement is influenced by their surroundings, motivation, and competence. Engstrom incentive plan needs to be altered or implement another bonus system, one with a precise and positive path for workers to transmit and obtain feedback. Management should decide on an operational strategy to set and monitor performance objectives. Workers need chances to be required in work environment choices by contributing their abilities and thoughts to the organization success. Engstrom needs to adjust or build an incentive system that will perceive worker performance and present monetary compensation in view of individual achievement.