Engstrom Auto Mirror Plant

Engstrom Auto Mirror Plant Case Study Analysis

After many years in business Engstrom Auto Mirror plant in Richmond Indian must face the decision to lay off a significant number of employees or close down the business in its entirety.  These changes are brought on due to a decrease in assembly, a decrease in the quality of product that is being manufactured and in result a decrease in employee moral.  The decision to lay off or close is a repeat of past events. Plant Manager Ron Bent spent much of his time in 1998 assisting the company with getting above water due to a similar crisis. Ron was able to start a similar plan to follow the Scanlon model.  The Scanlon model is widely used and gives employees sale bonuses dependent on their performance (Beer & Collins, 2008 p. 538). This model worked for Bent for nearly 10 years. Fast forward to more present years, there was a complete decrease in return productivity. The bonuses are less and less and employees are beginning to become unhappy.

Ron, who is now in business with his assistant Joe Haley, must determine new ways of dealing with employees and their needs and still at the same time focus on the needs of the business and enhance the bottom line. The Engstrom Auto plant is facing a few key issues to their organization. One issue is the the lack of communication through employee and management. The employees were angry when they discovered the lack of bonuses. Over the years they had become accustom to them like they were apart of the normal compensation (Beer & Collins (2008). A second issue to the organization is employee motivation due to the lack of bonuses and decrease in work productively along the entire workplace. The employees were fearful of job loss due to the increased layoffs and cut backs. They were not receiving the bonuses like they use to, so everything combined caused a lack in moral. A third issue in the organization was some of employees felt they were missing out on money with the Scanlon model. They did not trust management and they bonus system in place. They felt that the calculations of the Scanlon model were rigged and the incentives were swayed.