Engstrom Case Study

III. Solutions Development

Introduction

The Engstrom Auto Mirror Plant is confronted with several organizational issues. The Scanlon Bonus Plan is no longer effective, the employees do not trust the plan or management, and the employees lack concern for the company. Engstom must find a way to increase motivation for its employees and implement an incentive plan that will be successful.

Organizational Improvement

Adjustments must be made to the Scanlon Bonus Plan in order to increase productivity and product quality. Bonuses were paid too often which turned an incentive into compensation (Beer, 2008). Trust between employer and employees were severely disconnected due to the acts committed by management. Regardless of how necessary certain

Due to the sudden cut-off of bonuses, the termination of employees, ignoring employees, lack of trust, and managements reaction, the overall work culture at Engstrom has been eliminated. It is imperative to upkeep workplace culture because it is a direct correlation to job satisfaction, innovation, and employee pride; these are determinants of whether employees choose to leave the job, or stay. It is in Engstrom’s best interest to keep good employees on board; incentives must be in place to assure such. Workplace culture is the most difficult to repair; and the most important to address. To successfully repair workplace culture, management must assure the following: employees are satisfied with their tasks, employees must enjoy working together, must understand and believe in the company values, employers must reward good work, both management and employees must be aware of the mission statement, and that all management leaders are all in sync (Saltzman, 2015). If these tasks are completed, the workplace culture, in theory, will slowly rise in a positive

A decision must be made to keep the same plan in place, amend the plan, or to discard and create a completely new compensation plan. Keeping the exact plan that is in place would be a poor choice which was explored in the previous Milestones. The best options would be to either amend the current plan or to start fresh with an entirely new plan. Employees currently lack trust in the plan that’s in place, therefore, a new compensation plan should be created.

The previous Scanlon Bonus Plan was unclear and could easily be manipulated; in time, it became extremely inefficient. The new compensation plan, Scanlon 1.5, will yield across the board compensation for all employees. It will be based off the monthly profit margin of the Engstrom Auto Mirror Plant. This has shown positive results from a study pertaining to employees at an executive level; this process will be more promising than the former compensation plan (Overton, 2005). The previous plan was too complex to fully comprehend; yet, it motivated employees to exceed the standard mandated of them. It is imperative to maintain some resemblance of the monthly bonuses; which Scanlon 1.5 will do. The implementation and procedure of the Scanlon 1.5 plan will be publicly displayed for all employees to view; additionally, a meeting will be held in regards to the explanation of the new compensation