Case Study Of Engstrom

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Recommended: Motivation theories in the workplace

The Engstrom’s case study has proved that the company is currently experiencing three major organizational issues. The major issues are the failed Scanlon Incentive Plan, employee dissatisfaction and production/quality issues. These issues are causing problems with their current production and causing delays in shipments to customers. Engstrom has already incurred a decline in sales in recent years.
In order to prevent additional loss of sales, Engstrom needs to motivate the employees. Work motivation is manifested by attention, effort and persistence. (Thapar 2016) This helps the employees to engage in certain behaviors that are directed at the achievement of the organizational goals. (Newstrom 2015 pg. 116)
For Engstrom to motivate the …show more content…

The base percentage of the allowed payroll should be increased to a flat percentage. The original consultants for this plan suggested that a target percentage should be 44%, but Engstrom decided on 38%. (Collins & Beer 2008). The modified plan should be set at 40%. This would help to increase the amount of allowed payroll and increase the amount in the reserve account for bad months. The distribution of the percentage should not be paid based on the employee’s income. The percentage paid should be tied to production and quality per crew or …show more content…

(Collins & Beer 2008) A plausible solution to these issues could be to base the bonuses on the level of production and quality instead of cost savings. Pay for performance is a wage incentive to provide more pay for more output or results. (Newstrom 2015 pg. 166) Pay for performance is a way to align pay with productivity. (Lucifora & Origo 2015) This type of incentive plan is also related to the individual performance not just the organization as

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