Based in Richmond, Indiana is Engstrom Auto Mirror plant (Engstrom) a privately owned mirror manufacture that does most of its business making mirrors for trucks and automobiles. Engstrom have been operating since 1948 under the original production lines; which was successful unit the 1990s when production became unprofitable because of simple supply and demand. The managers believed by incorporating new technology into the company it will increase productivity. The transition did however create conflict between managers and employees, which led to the resignation of the then manager Joseph Scanlon in 1998. That same year in an attempt for a quick fix solution Engstrom hired Ron Bent who had strong beliefs in the power of worker incentive programs …show more content…
The industry was facing a downturn that ultimately decreased sales, which also affected the payment of bonuses to employees. This lead manager Ron Bent to lay off 46 of his employees the following year along with not being able to payout bonuses for a lengthy seven months. This lead to the establishment of issues that affected both employees and company. The main issue with the Engstrom Auto Mirror Plant was the manner by which to improve quality and execution of its assembly line workers. Manager Ron Bent decided the most ideal approach to do this was to incorporate the Scanlon plan, which concentrates on worker support to recognize approaches to build profitability. A widely accepted plan at the time by employees gave them the type of motivation that increase job performance. However, not giving employees the best possible motivator to raise their efficiency levels, plus they are using a financial incentive plan with major design problems.“Research shows that there are four signs that affect employees’ motivation (engagement, commitment, satisfaction and turnover). If employers focus on these four indicators successfully, employee motivation and organizational success strengthens (Newstrom, 2015, p.
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Employee motivation and rewards are effective means to retain employees. When an employee is motivated, his or her needs are being met. When an employee is unmotivated, his or her needs are not being met which results in a high employee attrition rate. Riordan Manufacturing is experiencing a high attrition rate. Riordan Manufacturing has 3 plants and employs 550 people. Recently, Riordan hired Human Capital Consulting to perform an analysis on the underlying issues that are causing the decreasing employee satisfaction and to recommend courses of action that will address the underlying issues. Research has been done to identify the issues and opportunities, the stakeholders and ethical dilemmas, and the end state vision. A gap analysis has also been performed to determine the gap between the current situation and the end state goals. Riordan Manufacturing will use this information to determine the best way to proceed towards improving its working environment for the employees.
This shows the substantial disconnect between the top management’s goal and the front-line employees’ experience. Moreover, factors such as a decentralized corporate structure, extrinsic motivation system, and lack of employee relations all played into Nordstrom’s decline. Top management believed that the 20-year-old incentive system still worked and claimed that employees earned one of the highest base pay rates in the industry. This claim of success was based on the underlying assumption that money was the single-dominant motivation source for employees. Therefore, the system was entirely focused on extrinsic motivation. Furthermore, the decentralized control system allowed abuse of the incentive system and promoted hyper-competitive environment that actually demotivated employees. Without fully understanding the cultural problem associated with the performance standard, top management reluctantly issued a back pay for all employees for the unreported hours. However, it seems that the issue will inevitably bleed over this temporary band-aid solution. Management should have moved away from depending solely on employee’s extrinsic motivation since monetary reward has a temporary affect and the pleasure diminishes over
Employees didn 't feel the relationship between them and management encouraged a free flow communication channel. Engstrom Auto Mirror Plant implemented a suggestion system that would encourage ways to improve the company. Ultimately the system failed because workers no longer felt like they were contributing effectively to the plant. Input is a fundamental piece of motivating employees and is explained through the Maslow’s hierarchy of needs theory, which,states that only unsatisfied needs motivate an individual.
The case analysis will examine and identify Engstrom’s root organizational issues. The analyzation of the root causes will determine how to overcome challenges that Engstrom faces with their employee behavior within the organization. The results will administer the results to fix a broken system within the organization to make satisfactory progress across the board. Identify root organizational issues In May 2007, the Engstrom Auto Mirrors plant was facing the crisis.
For Engstrom to persist, the organizational issues need to be addressed accordingly . There are three underlying organizational issues at Engstrom: the absence of establishing an organizational culture, the lack of emotional intelligence , and the Scanlon Bonus Plan.
In this paper, I will deliberate possibilities that Ron Bent could have used to loosen some of the problems that was occurring in his plant. First, revise the Scanlon Plan for the employees and management. Where the managers would be focusing more so on appreciation and recognition that the productivity of the employees. Then, change the Scanlon plan by introducing meetings were the ideas from the managers and workers can be concluded in a face to face manner. That would be for clarification of any suggestions and better understanding for some of the suggestions given as
Engstrom Auto Mirror Plant case analysis exhibits mundane organizational conduct controversies and worries with building relationships with workers. Managers of any organization goal should build and maintain a positive and open communication with workers and job fulfillment as the root based of a successful organization. Engstrom Auto Mirror Plant is in incredible misery due to absence of worker motivation; they have sufficient equipment but lack incentives to keep workers contented. The objective of this milestone is to identify the root causes of the organizational issues that Engstrom Company faces and examine underlying concerns from a human behavior viewpoint. In addition, provide proposals for organizational development that will increment
An inadequately motivated employee can be very costly to the organization. Where the quality and quantity of work produced by the employee is just enough not to be fired. Job satisfaction and commitment is lacking and the employee is not motivated to work. This performance can drastically affect the bottom line of the organization whether it be financial gain or otherwise. With the changing nature of work, organizations today tend to be much flatter and slimmer than they were 20 years ago (McGreevy Malcolm, 2003). To manage and adapt to the changes the organization must have committed employees to be able to not only cope but to excel and succeed.
The case study analysis of Engstrom shows that they are currently experiencing organizational issues with employee’s dissatisfaction (lack of motivation), failed incentive plans (Scanlon Plan), and major issues with production and quality issues. When a corporation is experiencing these types of organizational issues such as Engstrom, the root causes of these issues need to be analyzed. A Root Cause Analysis is a five step process to answer the question of why the problem occurred in the first place. (Mind Tools)
There are many factors that can affect the overall success of a business. Yet, few are as important to understand and master as employee motivation. This is because a highly motivated workforce translates into increased productivity which helps ensure that the business reach its goals. Business owners who are smart make sure that a well thought out and tested motivation strategy is firmly embedded into the business model. Further, they are sure to consider how major decisions could affect their staff. In order to gain a better understanding of what drives the motivation of an employee, we must examine where motivation comes from both from a physical and psychological perspective, review the various theories of motivation, the importance
In addition to feedback, goals have been found to be more effective when they are tied to employee evaluations. The results of employee evaluations typically carry great weight when it comes to raises, bonuses, and potential advancement. Tying these types of rewards to successful goal completion also improves performance and increases goal commitment among employees (House, 1971). Incorporating deadlines to specific goals is also attributed to elevated performance levels. The motivation levels of the employee increase to meet goals within set deadlines and receive positive feedback (Lunenburg, 2011). As organizations focus on employee satisfaction and motivation, goal setting will remain an important aspect of management practices. In today’s economy, organizations are competing for top talent and ensuring employee satisfaction among job tasks is an important piece of talent retention.
The motivation of employees is the key crucial element in any organization. Employers should be able to implement all the strategies for motivation to increase the worker's performance. Motivation has got a lot of influences in performance levels and productivity in any organization. The example of motivation ways is through rewards, promotion, job recognition and others. The key factors to motivation also can include useful communication, supervision, career progression, interpersonal relations, recognition, money and also control. These factors influence the healthy performance behaviors of employees.
Incentive reward engagement offers a win-win situation for the employees and the company. Kelleher believes that incentive is a form of recognition and builds engagement through company’s and employee’s obligations towards a common goal (2014). The company has a “Growth Incentive Scheme” for the production workers. Special monetary incentives are provided should the workers achieve the monthly output target. Through the rewards, employees feel motivated towards their work and thus, contribute towards the company’s
Motivating employees is the inducing or indoctrinating them with enthusiasm or the urge to be diligent in their work. Additionally, it will lead to the espousing of the need to uphold harmonious relations between them. The ultimate depiction of a motivated workforce is their willingness to work. Subsequently, this leads to increase in employees’ performance output which in turn leads to increased output and turnover of the organization. Therefore, the inter-link between motivation of employees and the success of an organization is profound (Chaudhary & Sharma, 2012). It can be achieved through a variety of forms. The management has the primary role in motivating the employees. This is as postulated hereunder.
Motivation is the force that makes us do things, whether accomplishing personal goals or completing tasks at work. Most people are motivated as a result of their individual needs being satisfied, which gives them the inspiration to perform specific behaviors for which they receive rewards (Kinicki & Williams, 2011). These needs vary from person to person, as everybody has specific needs to be satisfied. When we consider factors that determine the motivation of employees, many of us think of a high salary. This answer is correct for the reason that some employees will be motivated by money, but mostly wrong for the reason that it does not satisfy other needs to a lasting degree (Bizhelp24, 2010). This supports the idea that human motivation is a personal characteristic and not a one-size-fits-all option. Managers will achieve a better rate of motivation in their employees by identifying the key factors that determine the rate of motivation. These factors are linked directly to the employees’ individual needs, behavior, and attitudes.