Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Katy Acree

Southern New Hampshire University

Root Cause Case Study Analysis

Organizational issues can often hide behind the best of intentions.  As seen with the case study of the Engstrom Auto Mirror Plant, leadership felt that the Scanlon plan would benefit both the organization as a whole and the individual employees.  The leaders felt that this plan, with financial benefits to the employees, would be what they needed to turn the business around, when in fact it simply helped disguise deeper organizational issues. Some of these organizational issues existed prior to the implementation of the Scanlon plan, and others were a result of the plans implantation. Organizational issues are not uncommon and are something many businesses deal with and the impacts can be seen in surprising ways. If the issues are not addressed, they can result in long term impacts that can put an organization out of business. Therefore, it is important for an organization, like the Engstrom Auto Mirror Plant, to be able to recognize these issues and be prepared to address them. Three of the major issues identified in the case study that will be examined in this analysis are: motivation, communication, and leadership.

Motivational Issues

        The Scanlon plan, an incentive-based plan, is designed to promoted organizational cooperation, and encourage the employees to “work smarter, not harder” (Beer et al, 2008). What the Scanlon plan doesn’t consider is that financial incentives, while motivating to some, doesn’t provide long term motivation for others.  In addition, while Engstrom does encourage employee buy-in with their active participation in the creation and implementation of the plan, it doesn’t help sustain motivation when the end goal doesn’t align with the employee’s needs. Cost saving, Engstrom’s end goal, is a very important part of any business, however, it isn’t much of a motivator for employees.  Hertzberg’s Theory of Motivators and Hygiene Factors presents that motivators including recognition and promotions encourage high levels of performance. While hygiene factors like salary, relationships, and organizational structure do not increase motivation among employees, instead they can be used simply to avoid unhappiness (Lazaroiu, 2015).         When the case study is looked at through the lens of Locke and Latham’s Goal-setting theory, we see that personal values can also play a role in employee motivation. If an individual’s values align with the overall organizational goals, they will be more motivated to help achieve that goal.  In addition, Locke and Latham show that having clear, attainable, and understandable goals will increase motivation as well (Lazaroiu, 2015).  At Engstrom, the goals were ever changing, not communicated, and if they were communicated were not understood by employees.  It’s not surprising that motivation and productivity dropped.

Communication Issues

        Without communication organizations wouldn’t be able to function at all.  Employee satisfaction and motivation are also deeply connected to communication or lack thereof.  Many of the internal organizational issues at Engstrom can be directly connected to communication. While Bent did make listening to the employees a priority, instituting monthly meetings where opinions and thoughts could be voiced by the employees as well as relaying important information back to them by management, perhaps it was the structure of the communication that contributed to the issues(Beer et al, 2008). The structure of the system at Engstrom appears to be a restrictive network, with only vertical communication.  Meaning, the flow of information only goes one way and any one person within the network only has access to a fragment (Raluca et al, 2018). This is demonstrated at Engstrom by only those in upper management having the details around the calculations and knowing how the bonuses are determined.  A more beneficial model of communication would have been a horizontal, flexible network in which communication flows in all directions and all channels of communication are available to all employees (Raluca et al, 2018). If employees at the same level communicated with each other it might have been easier to address issues as some may have been more comfortable speaking to a peer rather than to someone higher ranking.

Leadership Issues

        Effective leadership is thought to be made up of 5 characteristics: “(1) the ability to give employees a clear picture of the direction the company is headed; (2) the ability to handle the organization’s challenges; (3) a genuine commitment to providing high-quality products and services; (4) a demonstrated belief that employees are important to company success; and (5) the ability to inspire confidence in employees” (Wiley, 2010). The leaders at Engstrom were lacking in most of these characteristics.  They were committed to high quality products, and perhaps even demonstrated, to a point, that the employees were important, but the rest of these were missing.