While the plan worked great initially the management failed to adapt the plan

While the plan worked great initially the management

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great initially, the management failed to adapt the plan enough with the changing economic climate, which resulted in the beginnings of renewed employee dissent for their superiors. In order for both gain-sharing and discretionary bonus plans to remain successful, they must be adapted to account for unforeseen circumstances as well as differing economic climates that a company may encounter[Jir18]. Bent and his assistant Joe Haley may have failed to do this quickly enough, as ill feelings were beginning to seep back into his workforce, thus creating a new issue to be corrected.When the plan that Bent implemented to fix employee relations and productivity appeared to become outdated, similar employee feelings began to arise from before he assumed the position of plant manager. The plant workers had become accustomed to receiving their profitshare payments, and since the company had begun operating at a deficit, these payments had gone away. This is the main problem with straight profit share plans. It becomes an even larger issue when the employees have been accustomed to receiving substantial payouts for a long period of time [OHa12]. When the payments began to dwindle, this also was a cause for some questioning about how the percentages of the total payout should be allocated to management
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A Case Study of the Engstrom Auto Mirror Plant6and what should be allocated to the plant workers. Eventually productivity and profitability resulted in layoffs which negatively affected employee/management relations even further and decreased confidence in the health of the company. Employee theft was also beginning to be suspected, which further emphasizes the monumental drop in employee morale.Solutions DevelopmentRon Bent was at a crossroads with what to do to rectify this situation. The main grievances he faced were regarding the calculation and distribution of the Scanlon Plan, which was instrumental in turning the plant around; however, this was during a more favorable economic period, and didn’t take into account what would happen if the economy were to decline to the point that there was a deficit.The main complaint voiced by the plant as issues began to arise was regarding the distrust of bonus calculations. Due to the complexity of these calculations, the average plant worker was having trouble understanding what they meant, especially given the simplicity of their previous production bonuses, which was based on individual unit output. While Bent had the right idea with a committee approach, made up of an equal number of his own supervisors and employee elected representatives from the plant floor, the meetings grew increasingly less productive. Bent shows an emphasis on downward communication in these meetings, but he does not necessarily appear to be as receptive when it comes to upward communication [Swa15].
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  • Summer '18
  • Brett Gordon
  • Management, Final Project, Auto Mirror Plant, Engstrom Auto Mirror

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