Running head: MILESTONE THREE- ENGSTROM SOLUTION DEVELOPEMENT 1
Milestone Three- Engstrom Solution Development
Bailey Torrez
OL 500 -- Human Behavior in Organizations
Southern New Hampshire University
MILESTONE THREE- ENGSTROM SOLUTION DEVELOPMENT 2
Organizational Improvement Outcomes
When the Engstrom Auto Mirror Plant faced a struggle in production in 1997 they
implemented a motivational approach which consisted of company-wide bonuses based on
productivity. This worked for seven years, until the market crashed and the company was no
longer producing enough to sustain the profit needed to provide employees' their bonuses. Once
this happened, Engstrom management faced disgruntled employees who were far from
productive and motivated. Their rate of production had decreased, the quality of the product
produced lessened, and there were even claims of thievery happening amongst employees from
the company (Beer & Collins, 2008). At one point in time, the Scanlon Bonus Plan worked, but it
was time to move away and develop a human based managerial approach. Decrease in employee
motivation, lack of plant culture, little empowerment and lack of employee knowledge of the
struggling economy led to these issues. If Engstrom can solve these human behavioral
organizational problems, I believe they can once again, be profitable.
Communication was strong when management sought to implement Scanlon's Plan. They
made sure all employees knew what the plan entailed, how it would work and even took to a vote
to determine if they wanted it or not. This standard of communication, however, was not the
same when the economy began to tank. Bonuses never came, employees were laid off and the
employees still working for the organization were not informed as to why these changes were
happening. The downward communication of the current economic state would have been
extremely beneficial (Newstrom, 2015, p. 65). By not communicating to their employees that the
market had decreased and production needs had slowed, employees were left guessing why their
bonuses never came. This generated rumors, anger and a hostile work environment.
MILESTONE THREE- ENGSTROM SOLUTION DEVELOPMENT 3
Engstrom Auto Mirror Plant went from one of the best motivation strategies (companywide
bonuses) to one of the 6 demotivating factors Newstrom (2015) acknowledges in his text,
"Making false promises of incentives available" (pg. 116). But the biggest problem Engstrom
had was that they relied solely on these bonuses to motivate their employees; there were no
goals, no acknowledgment of needs, no schedule of reinforcement, no individual performance
monitoring. It was time for Engstrom to admit the capability to pay bonuses was no longer
feasible and develop a new way to motivate their employees. By developing a new way to
motivate its employees, Engstrom should be able to decrease the poor quality and speed of
employees' production.
Strategic Action
Engstrom cannot do anything about the down economy but if they take the steps
necessary to keep employee morale and motivation high they can limit the destruction a
recession takes on a company. Although additional money for great work is always top on the
list, I have learned via