Engstrom Auto Mirror Plant: A Case Study

I. Introduction

Overview and Organizational Issues

Engstrom Auto Mirror Plant is a privatized firm in Indiana that manufactures mirrors for automobiles and trucks with + / - 200 employees. Since 2005, there has been steady declines in productivity - production deadlines, quality of product and deliveries. This is a result of employee terminations, lack of transparency at the managerial level, and the stoppage that is placed on Engstrom’s incentive plan called the “Scanlon Plan” (Beer,2008). The dysfunctional effect due to the stoppage of the Scanlon Plan and management failing to acknowledge or become aware of the economic failures that would impact the Scanlon Plan, results in the decline of morale and motivation for Engstrom employees (Newstrom,2015, pg.87).

Engstrom’s organizational issues are common and related to employee work related and organization structure issues (Lorenzi & Riley,2003). Management is responsible for having a plan within its firm to be able to contest any organizational issues that arise.

The central cause stemming from Engstrom’s incentive plan and the lack of transparency of layoffs and clarity of the incentive plan and not being paid based on the terms of the incentive plan. The flaw in the incentive plan was during its initial implementation. The incentive plan was created to save costs not to create unity and increase work performance. Most Scanlon type plans are created for (Wilson,1993):

• Submission for improvement by employees from leadership to worker

• Structure of the firm that evaluates, giving the sense that every employee has an input in the progress and future of the firm and its own productivity

• Monthly bonuses based on the firm’s overall