Running head: FINAL MILESTONE
Introduction of the Organization
In Richmond, Indiana, Engstrom Auto Mirror Plant is a privately owned business that has
manufactured mirrors for several types of automobiles since 1948. The company managed by
Ron Bent and his assistant Joe Haley. The plant has been facing a few unprofitable quarters
leading to a crisis among employees. Engstrom Auto Plant has had productivity problems, which
include product-quality issues and low employee morale (Beer & Collins, 2008). These financial
issues have led to an 18% reduction in force, leaving the company with about 209 employees.
Explanation
Many companies face ups and downs throughout the years. Engstrom was not immune to
profitable and unprofitable years. The company instituted a Scanlon Plan, under Ron Bent's
leadership in the late 1990s. A Scanlon Plan is an organization-wide incentive program, with the
idea of participative management, developed by Joseph Scanlon in the 1930s. The three-pronged
approach includes (1) Suggestions for productivity improvements by employees at all levels, (2)
production committees to review suggestions, and pass along to screening committee, which
decides how to handle suggestions, (3) screening committee to review the monthly bonus
calculate ones.
For seven years after implementing the plan, the company's sales quadrupled (Beer &
Collins, 2008). Engstrom had a quick increase in productivity, and the input from the employees
was accepted. There was significant growth, higher profits, and the employees received good
financial rewards (Beer & Collins, 2008). The employees received their bonuses monthly for the
following years, along with the normal wage increase. Many of the employees began to expect
the bonus portion of their pay as something the company owed them. The incentive created a
custodial model for Engstrom. However, this was not the case forever.
FINAL MILESTONE
After the industry had some considerable hard times, Engstrom had some productivity
problems, low employee morale, and the bonuses were not getting paid. The employees felt as if
management kept moving the goal post regarding the set ratio for the bonus. Ron Bent tried.
during the emotionally charged monthly meeting, to communicate the reality of the situation
Layoffs were coming, and if profits did not turn around, the plant might close. Furthermore
Bent's assistant, Haley, suspected that employees might be stealing from the company
Direction
Ron Bent had to evaluate the current situation and the state of the Scanlon Plan. "In fact.
it is not a plan at all, in the sense that it does not specify a procedure to be followed in a
standardized fashion; no two Scanlon Plans are alike. Rather, it is a demanding process designed
to continuously improve an organization's productivity and develop its employees" (2018). Ron
Bent has options to rejuvenate Engstrom Auto Mirror Plant. As he reviews the current custodial
model that the company is practicing, Ron will need to move the company into more of a system
model. This model will allow the employees to not be dependent on Enstrom for a paycheck and
job security (Newstrom, 2015). Furthermore, this may increase the trust