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 employees to perform, they need to modify the current Scanlon Incentive Plan or create a new incentive plan. This involves the participation of the employees. Participation of the employees encourages them to contribute to group goals and share the responsibility. (Newstrom 2015 pg. 208) The management team needs to hold a meeting with each department to get feedback on what the employees think would be a viable solution to the current plan or ideas on a new incentive plan.
The current Scanlon Incentive Plan was adapted in 1999 to help increase production. (Collins & Beer 2008) In the beginning the plan was very successful. However, with the downturn of the economy in 2005, there was a decline in sales. In order to keep the plant open Engstrom had to lay off 46 employees. The remaining employees have not received bonuses in several months. This led to the lack of motivation for the employees to perform at an efficient level.
If the employees agree to modifying the current Scanlon Incentive...
... middle of paper ...
...s and emotions which employees view their work. (Newstrom 2015 pg. 233)
If Engstrom can get the employees to agree on either modifying the current Scanlon Incentive Plan or creating a new Pay Per Performance, then it would increase the overall employee performance in the organization as a whole. The employees will feel more satisfied with their current positions and start to be more effective and efficient.
In closing Engstrom will need to implement a modified Scanlon plan or a new incentive plan all together. I feel the best option is for Engstrom to implement the new Pay for Performance plan. This way employees are paid based on their effort and actual performance instead of a percentage of labor cost. This will increase the employee’s motivation. When employees are motivated, they are more likely to participate in the overall success of the organization.
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