Case Study: Improving The Scanlon Plan At Engstrom

Improved Essays
Question 3
A.
The first factor that is internal to the organization: Haley had told Ron that we both know the employees have been complaining for months, but yesterday and today the talk has been pretty hostile. He wasn’t saying that there is a definite connection between nearly late delivery and the grumbling I heard, but you've got to wonder. Product-quality issues had also been creeping into the work done at Engstrom. Bent hoped that he was not trying to pay for air-expedite defective mirrors to Martinez. (Beer, Collins). The second factor that is internal to the organization: In June 2006, Bent had to lay off a lot of employees, the amount totaled to 46 of his 255 employees employed at Engstrom. And in turn, those people who remained
…show more content…
As mentioned in the case, the major problems with the plan were the bad communication from the upper management to their employees that led to lots of confusion and distrust. The confusing and complicated bonus calculations. As well as the lack of consistent implementation, as the plan wouldn’t be implemented for multiple months in a row. As such, the following are some suggestions we have formulated to help improve the Scanlon Plan at Engstrom:
Generate bonus calculations that are simple and understandable for the employees. Make it very transparent and easy to figure out so that your employees can quickly check whether or not their bonus amount is indeed the correct amount. This way they don’t have to just take their superiors word for it.
Consistent implementation is also very important. Since it has been established at the very beginning, that the bonuses are to be given out every month of every year, you need to make absolutely sure that you keep that promise and give out the due bonuses every month without fail. Otherwise, the credibility of the plan will be questioned and create dissatisfaction among the
…show more content…
A change of views is refreshing, and being elsewhere can take away a lot of stress.

D.
We came up with a few actions that would be needed for the implementation of the recommendations for Engstrom that would gain employee acceptance:
Maintaining a positive attitude.
Being available to all employees.
Offering to help other staff.
Telling their staff what needs to be done, but allowing them to do it how they see fit.
Valuing differences between employees as individuals & utilize the differences.
Actively listen, including using positive body language.
Play with the employees when applicable, this allows real-time for people to get to know one another.
Share real compliments on employees’ work and contributions to the business.
Be sure that everyone knows the end goal.
Be congruent and transparent at all times.
Hopefully, by Engstrom management following these steps, they will start to rebuild the trust with their employees that they once had. It will take time for the employees to believe in the management team again because they had already been let down, but if they see a sincere attempt is constantly being made, they will eventually believe in the company

Related Documents

  • Improved Essays

    The employees considered the bonus as a regular part of their pay as they got accustomed to it for many years and when it stopped they revolted. Bent himself doubted the credibility of the plan he implemented (Beer, M., & Collins, E. 2008). The Turnaround Plan As we drill down to identify some of the root causes of what exactly transpired in the Plant which lead to its downfall we find some astonishing facts as how certain core organizational issues were ignored. Communication being the main issue was completely ignored by the management and they did not use a proper communication channel which lead to the employees suspecting the management to play with them.…

    • 755 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Along with a diverse compensation structure, which included different rates of pay for different products manufactured (“Piece Rate”), the company adopted an annual incentive bonus based on the year’s financial performance. The annual incentive for each employee was then tied back to their annual performance review. This meant every employee would get a bonus based on the overall company performance, however, their share was fully contingent upon them. When interviewed for the study Betty Stewart stated “I think with the incentive program the way that it is, if you want to work and achieve, then you will do it. If you don 't want to work and achieve, you will not do it no matter where you are.…

    • 883 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    In order to resolve a problem, one has to confirm the solution that it is a permanent solution for a problem and it will prevent the problem from recurring again. As in the article "Engstrom Auto Mirror Plant: Motivating in Good Times and Bad", there were some major problems that this organization was facing such as employees losing trust in management, employees feeling like they were not being treated equally, and poor communication between employees and their management. These are solutions for these problems that Engstrom Auto Mirror Plants, empowering employees to successes in their job. In addition to that participation of employee’s decision-making process to be motivated. Moreover, from a conversational communication between management…

    • 144 Words
    • 1 Pages
    Decent Essays
  • Improved Essays

    Engstrom Case Summary

    • 999 Words
    • 4 Pages

    The problem for the company is they began to put to focus to much on extrinsic factors, such as the bonus plan being the reward system to motivate their employees, however they failed to think about employee’s perception. Understanding what makes employees happy and what they are is important to motivational strategies. The company’s suggestions started to dropped, which should have been an indication that employees are not feeling important anymore. Keeping employees happy and satisfied is vital for any company, as this can create regression or progression within the company. Engstrom needs to find the root cause of the problems that are critical to their survival.…

    • 999 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Consistency In Onboarding

    • 1712 Words
    • 7 Pages

    Consistency. Consistency in onboarding is beneficial for companies that have multiple locations or facilities. Developing a structured onboarding program ensures that each new employee receives the same message about the company’s culture, mission, vision, core values, and brand. Adding a segment to the onboarding program before the new employee begins position-specific training will send a consistent message to all levels of the company about who they are (Sims, chapter 8). Krista Rice and Janice Shanahan, part of Red Lobster’s Training and Development team, recognized the need for a structured program for their restaurant with 650 locations and an average of 4,100 new employees each month.…

    • 1712 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    Harry Denton Case Summary

    • 1083 Words
    • 5 Pages

    The bonus should come in installments so that they are compelled to stay and improve the company. Additionally, all employees should be able to participate in an employee stock program to improve their perception of organizational support. Owning stock in the company will create a sense of company ownership and value to each employee, thereby discouraging associates from quitting their jobs. To conclude, the new CEO of Delarks made drastic policy changes that caused the company’s greatest asset, its employees, to feel betrayed and undervalued leading to low morale, lack of productivity, and threat of abandonment.…

    • 1083 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    (1) Sun Spots case (10 points). Refer to the case on p. 254 in Daft 6th edition and answer these questions: • What specific steps would you take if you were a senior manager in this situation? Explain why for each step. • Do you consider it motivational and equitable when a substantial part of an employee’s pay is bonus based on company results in a highly uncertain environment? Why?…

    • 1839 Words
    • 8 Pages
    Improved Essays
  • Great Essays

    This will include cultural, personnel and action controls. Lastly, we have structured an ethical analysis of the hypothetical situation Joe faced at DMC. Performance Bonus Program: Implementation & Recommendations Evaluate the Performance Bonus Program as it currently exists and the way it is being implemented. What changes would you suggest, if…

    • 1705 Words
    • 7 Pages
    Great Essays
  • Improved Essays

    In this essay, am going to reflect on my practice as an early year’s practitioner in training. This will enable me identify the areas I have made progress and the areas that I need to work on to improve my practice. Self-awareness. This aspect of my practice, I have managed to develop a good working relationship and communication with the children and staff.…

    • 1244 Words
    • 5 Pages
    Improved Essays
  • Superior Essays

    They must develop a business plan based on what drives the business and the set goals that determine what exactly what the employees will be rewarded for and at what level will compensation will be giving. The company must also effectively communicate how the rewards program works, explaining exactly what is needed to trigger a payout. Without a proper explanation of the program employees might get discouraged and select not to fully participate. The program must also be set at the same knowledge level of the employees.…

    • 885 Words
    • 4 Pages
    Superior Essays
  • Improved Essays

    Claims were filed. In conclusion no doubt the financial losses are huge the loss of trust and respect and goodwill hurts even more if not as much as the financial losses Q5) what does management need to do?…

    • 968 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    For instance, Hiram had announced new targets for the salespersons, laid off 10% of staff from each unit regardless of performance and ordered reduction of time spent on each customer by customer care representatives among other changes (Kerr, 2003). In this case study, the answer to the question whether Rainbarrel should consider revisiting its approach to performance management is a resounding “yes”. Hiram Phillips made unprofessional decisions of laying off staff from each unit and authoritatively restructuring incentives without hearing from the employees and consulting extensively. In management, involving employees in decision-making is one way of quenching and minimizing likelihood of resistance or go slow. In fact, Hiram had confused performance with productivity as the real problem at Rainbarrel Products Company was not performance but a challenge in the external environment.…

    • 813 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Motivating employees in successful companies It is well known that a motivate worker is a happy worker, then a happy employee is a productive employee too. This fact is going to lead that the productivity of a company increases continuously. As warns Heathfield if an employee does not feel he or she is growing, he or she will head for the exits.…

    • 1239 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    If Golden Krust implemented the recommendations listed above, the interpersonal relations between workers and managers would positively increase. It would make for a happier workplace…

    • 793 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Amazon Vision Statement

    • 1117 Words
    • 5 Pages

    Hire and develop the best 6. Insist on the highest standards 7. Think big 8. Bias for action 9. Frugality 10.…

    • 1117 Words
    • 5 Pages
    Improved Essays