Engstrom Auto Mirror Case Summary

The case analysis will examine and identify Engstrom’s root organizational issues. The analyzation of the root causes will determine how to overcome challenges that Engstrom faces with their employee behavior within the organization. The results will administer the results to fix a broken system within the organization to make satisfactory progress across the board.
Identify root organizational issues
In May 2007, the Engstrom Auto Mirrors plant was facing the crisis. The business was doing badly and the sales had started to decline in 2005. Thus, there was a steep reduction in plant productivity and employee morale was at an all-time low. The company used the Scanlon Plan as an incentive for staff (Beer & Collins, 2008). The core element or

• The most important part was that workers began to take the bonus for granted and expected it as part of their salary, rather than a performance bonus. This reduced the motivation among the workers and reduces the plant’s overall performance.
• Then there was a layer of distrust for bonus calculations and that company might be making up the numbers and giving the workers their fair share (Beer & Collins, 2008).
Analyze root causes Employees are emphatically inclined to resist the incentive as they are not secured in their roles of employment. Henceforth, Maslow’s hierarchy of needs are not being satisfied and/or fulfilled at Engstrom (Robbins & Judge, 2015). Monetary gains are not a beneficial factor to determine the needs of employees, as employees want to be challenged and desire more tasks than the monotonous everyday tasks (Borison, 2014). The bonus incentive has shown dissatisfaction between employees and managers. The equity theory judges the fairness between employees who compare ratio inputs (contributions) and outputs (rewards) to other employees within the organization (Newstrom,