Engstrom Auto Mirror Plant Motivating in Good Times and Bad Case Analysis -Final Paper PDF

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Engstrom Auto Mirror Plant Motivating in Good Times and Bad Case Analysis Final Paper -A...

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Case Analysis – Final Paper Engstrom Auto Mirror Plant: Motivating in Good Times or Bad Tasha Houston Southern New Hampshire University November 12, 2020

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Abstract In this paper, I will explain how human behavior can affect the direction of an organization. I will further explain what were the reasons that caused the negative behaviors and give solutions to reversing those negative behaviors. In this paper I will analyze the case study of Engstrom Auto Mirror Plant, I will focus on how the company has existed for years and faced numerous organizational issues due to a lack of knowledge of the human behavior of motivation. Then I will analyze my personal work experience as it relates to organizational issues-particularly lack of motivation. I will offer up solutions to correct the organizational issues for Engstrom and my workplace experience. It is important to comprehend the importance of human behavior as a driving force behind the improvement of employee motivation, that’s why both case studies were analyzed in this paper.

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I. Introduction Engstrom Auto Mirror Plant is a privately owned manufacturing company based in Richmond, Indiana that specializes in creating mirrors for automobiles. Engstrom experienced numerous organizational issues throughout the years in business, but this specific year they were heading towards a crisis. The organizational issues looming at Engstrom were productivity problems, product quality issues, distrust between employees and upper management, and low employee morale (Beer 2008). Engstrom had implemented The Scanlon family Incentive Plan some years prior due to a similar crisis, which caused employee low morale. This incentive plan was created to reward employees with paid bonuses for increased productivity (Beer 2008). This plan was an end to Engstrom’s productivity issues and employee low morale or so management thought. The Scanlon Plan which was a 1930’s concept, the heart of this concept was to increase participative management (Beer 2008). The three key plan components were; the submission of suggestions for improvement by employees at all levels, the structure of the company committees that evaluate the suggestions, and the sharing of the fruits of increased productivity through monthly bonuses (Beer 2008). With the Scanlon Plan implemented, the intended goals were reached. Morale at the plant was high, employee productivity increased and the quality of the products was in great shape. This winning streak only lasted for so long. Then a downturn hit the industry, Bent was forced to lay off twenty percent of the workforce. Employees who remained haven’t received bonuses in seven months. The workers had been accustomed to the plan’s substantial bonuses, but when the bonuses stop coming, employees responded with anger and suspicion, as if something that rightfully belonged to them had been taken away (Beer 2018). Now the employees felt under-rewarded for their efforts and realized other privileges were taken away. The reaction of the employees exhibits them being blindsided about the end of 3|Page

the reward system. This is a clear indication of one very important organizational issue and that’s lack of communication from management to employees about changes to be implemented within the organization which is considered a downward communication (Newstrom 2015). Bent needed a plan to be more communicative with the employees where so they would be informed about organization changes before, they are made. Employees also needed a way to feel rewarded without the bonus incentive, if in the long run the plan would be depleted. Perhaps he can create a merit or reward system other than bonuses. This would be another type of “work motivation” other than monetary. This would boost employee morale and increase productivity amongst employees. For this plan to be successful the three elements of work motivation must be present: direction and focus of the behavior, level of the effort, and persistence of the behavior (Newstrom 2015). II. Root Cause Analysis Engstrom Auto plant had several organizational issues that caused their lack of motivation throughout the company and their low productivity amongst employees. To understand the root causes it is very important to comprehend the steps that were taken by management that caused their low productivity. Engstrom’s leading organizational issues are a result of implementing the “Scanlon Bonus Plan” (Beer 2018). The company created this incentive plan to increase employee productivity and engagement. This incentive plan was supposed to be a reward system intended to be only a temporary fix. The bonus plan failed, and it was taken away from employees. With the plan gone employees felt betrayed by management. Several events contributed to the disorganization of Engstrom including the decline of employee motivation and failure of incentive and low morale. Employees were discouraged to complete tasks which resulted in low productivity throughout the company. Hervati asserts that 4|Page

employee motivation is highly important for every company due to the benefits that it brings to the company. The incentive plan was the employee’s motivation to work and once it was taken away with no notice they immediately started to disengage. The human theory of motivation asserts what could be the issues at Engstrom Auto plant. The theory suggests that human motivation in an organization is the result of three factors. Those three factors are Achievement, Equity/Fairness, and Camaraderie (“Sirota’s Three-Factor Theory” 2020). At the time of the productivity loss at Engstrom’s the employees were subjected to a lack of equity and when equity was removed the lack of motivation appeared. The theory of human motivation asserts that employees who are shown fairness in the workplace with being motivated to work more efficiently (“Sirota’s Three-Factor Theory” 2020). The employees at Engstrom were not shown fairness when the company experienced a crucial productivity issue and laid them off and didn’t hold the management to the same type of scrutiny. Management was able to stay gainfully employed. Employees felt that equality and fairness were absent in that situation. Morale decreased in employees because they felt that there was no fairness in the bonus plans when management received more bonuses for less productivity. Sirota asserts that equity is an organization that focuses on treating employees fairly. “The concept of fairness and equity extends beyond just treating everyone the same. Also, you need to be treating your employees correctly in a big-picture sense as compared to basic human values” (Sirota’ Three-Factor Theory, 2020). With those factors, the employees felt like they were treated unfairly which caused them to lose motivation at work and created distrust in management. Equity is the quality of being fair and impartial. Another motivating factor for employees is an achievement. Achievement motivation is a drive some people must pursue and attain challenging goals. An individual with this drive wishes to achieve objectives and advance up the ladder of success

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(Newstrom 2015). Engstrom was supposed to set goals and give the employees the tools to meet said goals but that just wasn’t the case and the employees felt like they didn’t have all the information to meet productivity goals and they were let go (fired). There was no partnership and employees felt like they were an expense. III. Solutions Development Employee empowerment is essential to the betterment of an organization and its success and effective leaders should empower their employees. The Scanlon Plan was created to correct Engstrom’s productivity woes, it was only effective for so long. Newstrom asserts that empowerment is any process that provides greater autonomy to employees through the sharing of relevant information and the provision of control over factors affecting job performance (Newstrom 2015). When the Scanlon plan was depleted, the employees felt like they were blindsided by this change. The bigger paychecks that included bonuses that the employees were used to stop abruptly. Upper management should have scheduled a meeting where they could’ve informed their employees that the larger paychecks would stop, and the bonuses would be depleted. This would have been what Newstrom states are downward communication. Downward communication in an organization is the flow of information from higher to lower levels of authority (Newstrom 2015). The employees weren’t going to accept a lower pay without some type of forewarning. In my proposed meeting, upper management should have discussed a plan where employees could earn bonuses in the future in the most efficient way. Employees could be rated on a merit system where bonuses are earned and not just handed over to them. With the bonuses being stripped from them without any input from the employees, they felt powerless. Newstrom asserts that empowerment helps remove the conditions that cause powerlessness while 6|Page

enhancing employee feelings of self-efficacy. Empowerment authorizes employees to cope with situations and enables them to take control of problems as they arise (Newstrom 2015). If we were to apply the supportive model to my recommendation, Renis Likert states that this model is built on supportive relationships, when employees feel that management are communicative, understanding, and supportive of them they tend to be more willing to fulfill their duties and what is required in the workplace and turn they’ll have high self-worth and work ethic. Like the supportive model, the collegiate model could be applied to the leadership at Engstrom Auto Plant, the model states that there should be a healthy and strong relationship between employees and management. “The collegial model depends on management’s building a feeling of partnership with employees. The result is that employees feel needed and useful. They sense managers are contributing also, so it is easy to accept and respect their roles in the organization. Managers are seen as joint contributors rather than as bosses” (Newstrom 2015). Empowered employees handle issues that arise at work better than unempowered employees. Newstrom asserts employees begin believing they are competent and valued, that they truly have some autonomy, that their jobs have meaning and impact, and that they have opportunities to use their talents. In effect, when they have been legitimately empowered, their efforts are more likely to pay off in both personal satisfaction and the kind of results that the organization value (Newstrom 2015). A sustainable remedy for Engstrom’s organizational issues could be some type of reward system. It has been found that reward systems in no small way influence employee commitment to the organization, primarily through the exchange process (Black, Gardner, Pierce, & Steers, 2019). This reward system can be a reward given to an employee of the month or a team competition where all the employees can compete, and fairness can be felt throughout the 7|Page

organization. J. Stacy Adams’s equity theory states that employees tend to judge fairness by comparing the outcomes (rewards) they receive with their relevant inputs (contributions) (Newstrom 2015). This would be a great way to redirect their focus from losing bonuses. This team effort between employees and management can be togetherness amongst everyone at Engstrom. IV. Workplace Analysis In my workplace experience, there have been some challenging environments that I would view as Engstrom’s Auto Mirror Plant. In my previous role as a 911 operator/dispatcher with NYPD, on any given shift there would be about 250 to 300 employees. At the time the deputy commissioner reported that this shift was low performing, meaning call answering times were at an all-time low. Leadership for this shift met and concluded reasons for the low productivity and founded that there was no reward system for high productivity, also performance reviews were in a backlog. Incentive programs were depleted several years ago and were never replaced. After further discussions, other organizational issues were discovered. Employees complained about procedure manuals not being up to date and felt like their skills were not up to standards. So, they felt insecure in their current position to service 911 callers. Employees also complained about fairness being absent on the 911 floor. Supervisors were able to pick their schedules with whatever RDO (regular days off), most often them being off on the weekends. The same courtesy wasn’t given to employees, not in a supervisory role. Employees felt like they were being treated callously and the supervisors treated them like they weren’t even human, like they were below them. Motivational drivers were absent in the employees. Newstrom asserts that People tend to develop certain motivational drives (strong desires for something) as a product of the cultural environment in which they live (Newstrom 2015). There was a lack of 8|Page

supportive leadership, equity, and incentive programs for the employees. The low morale in the employees develops due to possible termination for the productivity issues from the employees. The root causes of low productivity and low morale on this shift amongst employees is what Sirota’s three fact theory focuses on, lack of equity, achievement, and camaraderie. The leadership failed to deal with these organizational issues that led to low productivity and low morale. Employees felt that there was a lack of equity/fairness from leadership because shift and schedule requests were always denied but leadership was able to change their schedules without a hiccup. Sirota asserts that people are motivated by fair treatment, and they want their company to provide basic conditions that respect their physiological, economic, and psychological needs (“Sirota’s Three-Factor Theory” 2020). The second organizational issue was the lack of feeling achieved amongst the employees. Sirota asserts that people want to be proud of their work, and they want their achievements to be acknowledged. They also want to feel proud of what the organization achieves (“Sirota’s ThreeFactor Theory” 2020). Employees didn’t feel a sense of achievement at work. They felt that since there were no routine trainings to update their knowledge on new protocols or leadership not updating the procedure manual, they felt a knowledge gap between them and their supervisors. They felt insecure about doing their jobs efficiently. The last organizational issue that this shift experienced was a lack of camaraderie amongst employees and leadership. There was so much tension amongst everyone on the 911 floor, which made it hard for tasks to be effective. Sirota explains that when people go to work, they want to enjoy themselves. That makes interpersonal relationships very important. A culture that supports and encourages cooperation, communication, friendliness, acceptance, and

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teamwork is critical for maintaining enthusiasm (“Sirota’s Three-Factor Theory” 2020). Employees want to feel a sense of community and teamwork. Organizational issues that are created from poorly aligned human behavior can have long-lasting negative effects on an organization if not corrected early on. My organization could’ve incorporated the Sirota’s three factory theory to offset the organizational issues that were being experienced. Sirota explains that to rebuild worker enthusiasm, leaders and managers must create an environment, and supporting practices, that deliver high levels of equity, achievement, and camaraderie. When people are treated fairly, are proud of the work they do, and do it with people they like, then enthusiasm grows – along with morale and productivity (“Sirota’s Three-Factor Theory” 2020). There are a few solutions that could correct the organizational issues long term at the 911 call center. The 1st solution to guarantee fairness across the board with schedules and regular days off, management could enact a lottery system and assign schedules according to who is selected through the lottery system and not according to who is in a senior position or not. Also, they can allow employees to trade schedules as they see fit with other employees on other shifts. Secondly, management can address employees feeling unknowledgeable compared to their supervisors by incorporating monthly trainings where employees can polish up on their skills needed to increase their productivity. Lastly to improve camaraderie amongst everyone an incentive program can be created where employees will gain incentive for successful teamwork involving tasks assigned to them. Management will need to encourage this for it to be successful. Newstrom asserts that Teamwork is most likely to develop when management builds a supportive environment for it. Creating such an environment involves encouraging members to think like a team, developing member tolerance for ambiguity and uncertainty, providing 10 | P a g e

adequate time for meetings, setting up physical spaces conducive to creative interaction (sometimes called “playgrounds”), and demonstrating faith in members’ capacity to achieve (Newstrom 2015). Through teamwork, employees can form relationships with each other where it can benefit the call center in a productive manner. Finally, management can set up weekly supervision meetings so employees can discuss their performance. Yearly performance reviews can be enacted once everyone feels like the weekly meetings are a success. According to Newstrom Research shows that when employers address all four factors successfully, employee motivation and organizational success are greatly strengthened. When organizations consider human behavior, they will see improvements in their company’s culture, and in turn employee’s productivity and morale will increase.

V. Conclusion In conclusion, I’ve learned how to identify organizational issues at the workplace and how to apply human behavior theories to correct said issues. During the semester I analyzed the Engstrom Auto Mirror Plant case. This company has existed for years and faced numerous organizational issues due to not understanding the human behavior of motivation. Also, I analyzed my personal workplace experience with organizational behavioral issues. It was important to understand human behavior theories in these workplaces. The theories and concepts that should be used by organizations should align with their values. Newstrom asserts that fundamental concepts of organizational behavior related to the nature of people (individual differences, perception, a whole person, motivated behavior, desire for involvement, and value of

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the person) and the nature of organizations (social systems, mutual interest, and ethics) (Newstrom 2015). Engstrom Auto Mirror plant was a company that produced mirrors for automobiles. The company existed for years and experienced productivity issues for two periods during the company’s lifetime. In both periods Engstrom enacted a bonus program to fix their productivity issues which worked for a short period. This solution failed to be a long-term fix because management didn’t comprehend that employees want to be treated fairly, they want to feel like human beings and just not a person filling a position. Therefore, they will react accordingly when they feel like they are treated unfairly in the workplace which is what happened with the bonus plan. They felt inequality was present, so they responded with a lack of motivation to produce. The bonus plan worked like it planned to do but only temporarily and then the real issues with the employees surfaced. The three main organizational issues that caused a lack of productivity lack of equality, achievement, and camaraderie. These issues were also apparent in my workplace experience. In both of my analyses, the cause of these issues was a loss of motivation. To fix these organizational issues, organizations must understand the experiences of their employees, sympathize with them. Once they understand this, they can now create necessary changes that ...