Case Study Analysis: Engstrom Auto Mirror Plant: Motivating in Good Times and Bad
March 21, 2021
Milestone two
The plant was facing many organizational issues from disgruntled employees, low morale.
distrust, and lack of enthusiasm which led the business productivity to decrease. The Scanlon
Plan was the plant's extrinsic motivator to get the desired behavior from their employees.
Extrinsic motivators are external rewards that occur apart from the nature of work, providing no
direct satisfaction at the time the work is performed (Newstrom, 2015, p. 123). After business
dropped and productivity was at very minimal, the plant decided to use money (The Scanlon
Plan) to motivate the employees for a desired behavior. The Scanlon Plan worked for a couple
years but employees noticed the bonuses stopped which led to unhappy employees. At this
point, management should have explained to the employees on why the bonuses stopped and
maybe they could have avoided employees being upset when they were expecting the extra pay.
The managers lacked the ability to communicate with the employees. Communication is the
transfer of information and understanding from one person to another. Communication helps
accomplish all the basic management functions - planning, organizing, leading and controlling -
so that organizations can achieve their goals and meet their challenges (Newstrom, 2015, p. 54).
With business dropping, management and employees could not be certain if they would have a
job. The attitude of employees led to poor performance and in result affected the effectiveness of
the plant's business. Employees didn't trust management when the ratios of the bonus were
changed four times within a five year period. This led employees to wonder why the changes
were made and how would it affect them. Once the bonus discontinued, negative attitudes arose
and there would be no way management could fix the relationship with their employees.
Psychological distance is defined as the feeling of being emotionally separated between people
that is similar to actual physical distance (Newstrom, 2015, p. 60). I think this was happening
between management and employees once layoffs started and when bonuses stopped. The
organization was not sharing good or bad news with their employees, therefore employees were
left confused and unsure if the plant was going to continue business.
Newstrom, J. (2015). Organizational Behavior: Human Behavior at Work. McGraw-Hill
Education.
Beer, M. & Collins, E. (2008, April) Engstrom Auto Mirror Plant: Motivating in Good Times
and Bad.Harvard Business School Brief Case 2175