Case name: Engstrom Auto Mirror Plant: Motivating in good times and bad Date of submission: 13`th February, 2012
Group – S2, Section 4
Members: Abhishu Agarawal, Vivek Changoiwala, Keshav Sunder, Nitesh Rathi, Reshma Maria Sabu
What changes should bent make in the Scanlon plan to make the impacts of the plan sustainable? Background of the case
Ron bent, the plant manager of engstrom auto plant was hired when the company was facing severe problem of low employee performance at the plant. Bent with the support of management and labour introduced the Scanlon Plan in the company where the employees of the company got share in the company’s profits. The labours welcomed the plan and the performance as well as employee morale boosted up. Company experienced a vast change on performance and the work culture of the company. Everything went well till the economy faced a bad time and company had lay off some labours to cut the cost. The bonus was also not given to employees for several months. The performance went down and the company found it difficult to supply its customers on time. Scanlon plan: Scanlon plan is was a very widely used incentive plan in USA. The plan focuses on the cost saving and performance improvement measures taken by employee to improve the performance. The plan motivates employees to work smarter not harder. Engstrom adopted the plan when the company was facing huge problems regarding the performance of the employees. This plan helped the company to improve the production by 50% and the employee morale was all time high. But when the company laid off 46 employees and didn’t pay any bonus for 7 months because of downturn in the industry, the worker became accustomed to the plan’s substantial bonuses. they became suspicious about the plan and responded badly which hit the company’s productions. Decision Criteria and Alternative Solution
Bent has to take important decisions regarding the scanton plan...