Engstrom Auto Mirror Plant Essay

The Engstrom Auto Mirror Plant was a privately owned business that manufactured mirrors for automobiles and trucks, which was located in Richmond, Indiana. The company employed more than 200 employees in the manufacturing plant. In December 1999, the Scanlon Bonus Plan was offered to the employees of the Auto Mirror Plant; the benefit of the Scanlon Bonus Plan was to pay a percentage of the labor savings each month, which lead the employees of the plant to become motivated by the bonuses that were issued to increase their morale and productivity (Beer & Collins, 2008, p.1-6). That later helped the business in increasing its profits and success in meeting the production goals for nearly seven years or so. However, in the year 2006 the manufacturing plant faced severe problems of unproductivity along with extremely low profits, due to low production, quality and employee morale. After the economic downturn which lead the plant manager to lay off nearly 46 employees in 2006, and the employees did not received any bonuses in the past seven months; therefore, the integrity and the reliance of the manufacturing

Due to inequality within the company the employee’s motivation dropped. Within the case study, upper level management would only disperse bonuses and incentives only if the company was doing well, which was unfair to the employees. The employees at the company complained numerous times that their supervisors should receive a reduced bonus, because the supervisors were not working as hard as the laborers (Beer & Collins, 2008, p.6). Therefore, reverse psychology is that if an employee doesn’t get compensated or rewarded a bonus they would do the opposite and become less motivated and not put in enough effort at work, which could affect the productivity of the