Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Milestone 1-Draft***

Southern New Hampshire University

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Enstrom Auto Mirror Plant established in 1948 located in Richmond, Indiana, is a privately owned company that manufactures mirrors for trucks and automobiles. The company employees approximately 209 employees, amongst which, Ron Bent is the plant manager and Joe Haley is his assistant.  In the late 1990’s Engstrom Plant incorporated new technology to their company which resulted in a decline in production, morale, and profit. The prior plant manager lacked the technological sophistication necessary to keep the company profitable, ultimately leading to his resignation and the hire of Ron Bent.

Faced with a failing company, Ron had decided to implement a Scanlon Plan to increase productivity and to incentivize his team members. The Scanlon Plan was developed in the 1930’s by Joseph Scanlon, focusing on utilizing the ideas of employees to increase productivity and in turn would pay bonuses. He believed that the employees of an organization would work hard to help achieve their organizations goals so long as they have an opportunity to take responsibility for their actions and apply their skills (Beer & Collins, 2008). Within the first year that Ron had taken over as the plant manager he put the Scanlon Plan to vote with 81% of the workers voting yes. Over the course of the next 7 years the plan had been successful paying out bonuses monthly and immediately leading to an increase in productivity, open communication, and a boost in employee morale.

In 2005 the industry faced a downturn and by 2006 bonuses had ceased and Bent was forced to lay off 46 employees. The remaining team members hadn’t received a bonus in 7 months and had become so accustomed to the extra money monthly that they were angry, thinking that instead of earning this bonus it was rightfully theirs and someone was taking it from them. With the plant suffering a decline in numbers, a decrease in productivity, dealing with disgruntled employees, and being at risk for losing a top customer, Sam Martinez, Ron is confronted with a similar crisis as when he was hired in 1998.