Engstrom Auto Mirror Plant: Motivation in Good Times and Bad

Milestone 2: Root Cause Case Study Analysis

Danielle M. Davis

October 25, 2018

Engstrom Auto Mirror Plant: Motivation in Good Times and Bad

Engstrom Auto and Mirror Plant is facing a wide range of issues, but most important is within the production department. Production efficiency of the plant has become unsuccessful and the quality of their products has significantly declined. Unfortunately, the Scanlon plan, which was at one time an effective way of turning the plant around is to blame for the now downfall. Due to their failure to honor the plan, which was to pay individual employees their bonuses, the management team can use behavioral theories to help understand and resolve these issues at hand.

Decline in Efficiency of Production

In May of 2007, both Ron Bent, who was the plant manager, and his assistant Joe Haley noticed that business and sales were declining for the second year in a row. They knew the plant was facing a crisis. Bent encountered issues with the staff as productivity was declining, concerns of the quality of the products arose, employee moral hit an all-time low and key customers business relationships were at risk.

Root Cause of Low Productivity

1. Employees dissatisfaction

When employees are dissatisfied, productivity of a company usually suffers (Haynes, 2012). People usually tend to gravitate to doing things that they get enjoyment out of and being rewarded for their good work is always a huge bonus. Since the employees at Engstrom Auto Mirror Plant have not been receiving their bonus payments from the implemented Scanlon Plan, this sent the overall morale down throughout the employees. There is a two-factor theory written by Frederic Hertzberg that there are two main factors that influence job satisfaction and job dissatisfaction (Sims, 2007). Job dissatisfaction is influenced by hygiene factors. Hygiene factors consist of working conditions, co-worker relations, policies and rules, supervisor quality and base wage or salary. Job satisfaction is influenced or motivated by achievement, recognition, responsibility, work itself, advancement and personal growth. If there is an absence of either of these main two factors results show a dissatisfied employee which in turn causes low motivation and morale and this in turn causes a decrease in production rates. In the case of Engstrom Auto Mirror Plant, this seems to explain what is happening. Employees are upset because they have been working for their bonus’ but have not received them. The employees have now lost any motivation to work hard for the company. According to the expectancy model or theory, people will choose how they behave according to the perceived outcomes (Newstrom, 2015). As shown with the employees of Engstrom Auto Mirror Plant this theory shows to be true.

Impact of Applying These Theories/Concepts

As previously stated above, according to Hertzberg’s two factor theory, improving motivator and hygiene factors will make happier and more productive employees. This all stems from the management team. If the employees are not feeling appreciated and supported, they lack in their work ethic. Management always needs to keep employees in the loop. If they do not plan on giving out bonus checks, they need to communicate this to their employees. If they do not this forms a lack of trust between employee and management. Management needs to first remove any dissatisfactory issue that are being felt by their employees so that they can get true engagement from them. Next, they must reward them for their hard work, let them know you see them and what they are contributing. Rewards do not always have to come in the form of a bonus or pay raises. Providing them with opportunities for progression and praising them upon achieving set targets can go a long way in boosting morale and thus improve productivity (Haynes, 2012).

2. Poor Management

Both Bent and Haley new that there was a problem with the plant. They knew that production numbers were decreasing rapidly but they did nothing about it. This is proof of poor management practice. Without any proper guidance their employees are unable to work at their full potential. According to the Behavioral Management Theory, managers will better understand the human aspect to workers and treat employees as important assets to achieve goals. Management taking a special interest in workers makes them feel like part of a special group. Production challenges are going to occur due to