Engstorn Auto Mirror Plant Case
Engstrom Auto Mirror Plant: Motivating in Good Times and Bad
There had been several rough quarters at the Engstrom Auto Mirror plant in Richmond, Indiana, a privately owned business that manufactured mirrors for trucks and automobiles and employed 209 people. For more than a year, plant manager Ron Bent and his assistant, Joe Haley, had focused their Friday meetings on the troubling numbers, but the tenor of their May 14, 2007, meeting was different. Both men sensed that they now faced a crisis at the plant. Bent was talking animatedly to Haley: “This is the third productivity problem in, what, two weeks? We can’t climb out of this downturn with performance like that.” He scowled as he signed the …show more content…
Business had been good; over a seven-year period: sales had quadrupled. In 2005, however, a downturn hit the industry. In June 2006, Bent had been forced to lay off 46 of his 255 employees. Those who remained had not received a Scanlon bonus in seven months. Bent wondered: Had the plan outlived its usefulness? Was it a victim of its own success? The workers had become accustomed to the plan’s substantial bonuses, perceiving the additional hundreds of dollars as part of their regular compensation. Therefore, when the bonuses stopped, the workers responded with anger and suspicion, as if something that rightfully belonged to them had been taken away. Now, Bent had to determine whether to scrap Scanlon, change it, or look elsewhere for solutions to sustaining productivity and ensuring quality until the downturn ended.
After Haley left, Bent sat for a moment staring out the window in his office. Back in 1998 he had faced a similar crisis, marked by low employee morale. At the time, he had rated the average worker productivity at a dismal 40% of expectation. After studying the turnaround of two other plants in Indiana, Bent had painstakingly built the support needed from both employees