1 Pratik Doshi Southern New Hampshire University January 26, 2018 Course- OL-500 Human Behavior in Organization Final Milestone
2 Introduction: Explanation Engstrom Auto Mirror Plant, a manufacturer of mirrors for trucks and automobiles, growth was halted due to production delays caused by poor management and new technology that proved too complex for some of the teams to master. Engstrom Auto Mirror plants key component to a successful and profitable business was simply measured by its productivity. With hope to increase productivity and improve the overall business, new manager, Ron Bent introduced a Scanlon Bonus plan at Engstrom. This new plan was very clearly communicated to all employees, who were given a vote on whether to implement this new plan or not. Thanks to the company's efforts in clearly explaining the mutual benefits of the bonus plan and the decision to inform and involve the workers in the decision-making progress, the plan was voted in and successfully achieved the goal of increasing productivity during the next couple of years. As years went on Engstrom faced internal issues with employees that negatively impacted their productivity. Engstrom management team observed the plan losing traction which eventually resulted in decreased productivity once again. At this point, Bent and his team were forced to cut approximately a fifth of the Engstrom workforce. Introduction: Direction During the initial launch of the Scanlon Plan, Engstrom’s productivity was on an upward trend. The plan was communicated effectively and implementation seemed to be successful. Employees started to feel a change in morale leading to a higher production rates ultimately leading to better performance for Engstrom. Although the organization had believed to solve their organizational problem of productivity, it was just a temporary fix. As time went on, the successful communication standards established at Engstrom started to lose their effect leading to distrust and negative employee culture.
3 When first implementing the plan, or making any changes, Engstrom developed a communication strategy that offered employee insight along with management transparency. Management and employees were able to discuss the plan specifics, which was initially moderated by a third party. Since both groups felt represented and worked to achieve the same purpose, the success of the plan was inevitable. But, within just a few years, the fragile balance of the two groups was no longer. The importance of communication and equal representation changed and this lead to issues in the organization Employees felt distrust in their employer and were not as engaged in the incentive program as they were. This directly correlated to a negative impact on their productivity levels.
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- Spring '15
- Management, Auto Mirror Plant, Engstrom Auto Mirror