Analysis Of Scanlon Bonus Plan At Engstrom Essay

Analysis Of Scanlon Bonus Plan At Engstrom Essay

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III. Solutions Development
Organizational Improvement
The Scanlon Bonus Plan at Engstrom was not working as initially anticipated. Engstrom must make the decision of keeping the exact plan in place, amending it, 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 generated.
The previous Scanlon Bonus Plan was confusing and could easily be manipulated; and in time, it became extremely inefficient. The new compensation plan, titled Scanlon 1.5, should be generated. Scanlon 1.5 will yield an across the board compensation percentage for all employees, regardless of standing; this percentage will be based off monthly profit margin of the Engstrom Auto Mirror Plant. In a study pertaining to employees in an executive level, this has shown positive results (Overton, 2005); this process will be more promising than the former compensation plan. The previous Scanlon Bonus Plan was far too complex to fully understand; regardless, it motivated employees to exceed the standard mandated of them. It is imperative to upkeep some resemblance of the monthly bonuses; which Scanlon 1.5 will do. The inner-workings and procedure of the Scanlon 1.5 plan will be publicly displayed for all employees to view; a meeting will also be held in regards to the explanation of the new compensation plan.
Other than amending the current compensation plan, management must also address the issues that were created from the failure of the Sca...


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...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 direction.
Overall, the recommendations will not only improve the current organizational issues presented at the Engstrom plant, but will lead the plant in a positive direction. The recommended strategic actions will assist in the sustainment of the plant. The past and current actions of the management team have proven to be ineffective. It is important to acknowledge that change must happen. The alternative to not accepting or acting upon these recommendations would be the closure of Engstrom plant.

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