Final Milestone Project Engstrom Auto Mirror Plant: Motivating In Good Times And Bad PDF

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Case Study Analysis (Final Milestone Project): Engstrom Auto Mirror Plant: Motivating in Good Times and Bad Tiffani Brown Southern New Hampshire University

Abstract In Milestone One, I have developed an explanation of the organizational issues within the case study. I have also outlined a direction for the case study analysis of the Engstrom Auto Mirror Plant.

Introduction Engstrom Auto Mirror is a privately owned business, located in Richmond, Indiana, that manufactures mirrors for automobiles of all sizes. With roughly 209 employees to account for, there tend to be some rocky times. After sales had begun to drastically decline, the plant manager, Ron Bent, was strained to release 20 percent of his workforce. “Plant productivity was dropping, employee morale was low, and product-quality issues had begun to surface. Relationships with key customers were at risk” (Beer & Collins, 2008). As these downturns were no stranger to the business, the institution reinstated the Scanlon Plan, a company-wide incentive program. Joseph Scanlon industrialized the Scanlon Plan in the 1930’s to encourage participative management. The three key plan components are as follows: • The submission of suggestions for improvement by employees at all levels • The structure of the company committees that evaluate the suggestions • Then the sharing of the fruits of increased productivity through monthly bonuses The Scanlon Plan did exactly as hoped. Employee productivity increased, morale was at an all time high, and product quality was better than expected. For numerous years, workers had received consistent Scanlon pay bonuses, and started to group the bonus in with their regular paycheck as though it was no longer a reward but instead owed to them. The bonuses were not going to come forever, and there needed to be a plan to get Engstrom Auto Mirror Plant back on track.

Ron Bent has ample paths he could travel down when thinking about how to deal with his situation at Engstrom Auto Mirror Plant, but determining which would be best for the employees and the company hand-in-hand would be the most complex part about this. Perhaps a way for his employees to still receive a bonus, they just have to earn it. So every employee has the opportunity to continue getting a bonus, but it will no longer be handed to them on a silver platter, instead it will be a true symbol of their hard efforts at work. Maslow’s Hierarchy of Needs is a motivational theory composed of a five-tier pyramid demonstrating the ranking of human needs. The first tier is physiological needs, including food, water, warmth, and rest. The second tier is the need of safety and security. The first two tiers represent our basic needs as human beings. The third tier is belongingness and love, including our interpersonal relationships and friendships. The fourth tier is esteem needs, or the feeling of accomplishment. The third and fourth tiers combined represent that of psychological needs. And lastly the fifth tier is selfactualization, representing self-fulfillment and achievement. “Every person is capable and has the desire to move up the hierarchy toward a level of self-actualization. Unfortunately, progress is often disrupted by failure to meet lower level needs. Life experiences, including divorce and loss of job may cause an individual to fluctuate between levels of the hierarchy. Therefore, not everyone will move through the hierarchy in a uni-directional manner but may move back and forth between the different types of needs” (McLeod, 2016). In reference to what Saul McLeod is explaining, it appears that the employees’ behavior can be explained through Maslow’s hierarchy theory. The employees at Engstrom Auto Mirror Plant feel that with the pay

raise, they have made it to the top of the pyramid achieving accomplishment and reaching full potential; if they no longer receive the bonus anymore, they would inevitably move downward on the pyramid. They have become accustomed to living a certain way and will need to make up for the shortcomings somehow or learn to live without the extra money again.

Abstract In Milestone Two, I have identified and analyzed some root causes of known organizational issues from a human behavior perspective. I have also validated the analysis with supportive research evidence, explained the resulting impact of poorly aligned and administrated human behavior theories and concepts within the Engstrom Auto Mirror Plant case study, all while discussing human behavior theory.

Root Cause Case Study Analysis Engstrom Auto Mirror Plant has some very detrimental organizational issues contributing to their low employee productivity and lack of motivation throughout the entire company. It is important to not only acknowledge what these issues are, but to also identify what exactly caused them from a human behavioral aspect. Exploring the root causes of the major issues on hand reassures preemptive steps towards preventing situations such as these from arising again at some point in the future. The event that instigated Engstrom Auto Mirror Plant’s major organizational issues stems from the fall of the “Scanlon Bonus Plan” (Beer & Collins, 2008). This incentive system was initially created so that employees were motivated to exceed the standard that was expected of them. It was supposed to be a reward system, but with due time, employees expected to be rewarded as though it was the norm for doing the bare minimal of work. With the Scanlon Bonus Plan’s deterioration grew a strong distrust between employees and employers. The employees certainly have Theory X personalities, while the employers have Theory Y characteristics. I will further explain in detail later on in this milestone what those two theories mean. Additionally, many aspects that contributed to a healthy work environment also diminished due to the failure of the incentive, such as employee motivation, comradeship, and the overall workplace morale. Employees at Engstrom Auto Mirror Plant were no longer motivated to complete their everyday tasks, resulting in the plant’s production being greatly comprised. “Ensuring that employees are motivated is critical to organizational success. Motivation is also a complex combination of psychological forces that either attract an employee or push an employee to disengage. When an employee feels rewarded (either monetarily or

with verbal recognition), it is a powerful force to repeat the behavior that caused the desired reaction. The three drivers include achievement motivation, affiliation motivation, and power” (Newstrom, 2015). “Leadership styles are determined by the ways in which a leader perceives those under him and the assumptions he holds about human behavior. Introduced by Douglas McGregor, Theory X and Theory Y talk about the diverging views that exist about how organizations function. The two theories are sets of propositions and beliefs about human nature” (Unknown). The first model of organizational behavior I would like to delve into is Theory X and Theory Y. This is a theory of human behavior called to attention by Douglas McGregor in 1957. Theory X is a set of traditional assumptions about people, where Theory Y implies a more humanistic and supportive approach to managing people (Newstrom, 2015). So where Theory X would assume people dislike work, are inherently lazy, lack responsibility, and must be coerced to get work done; Theory Y assumes work is not a burden but a norm, people are not naturally lazy or lacking of ambition, and that they have ingenuity that can be applied to their work. It seems like Ron Bent, the plant manager, views his employees through a Theory X lens ever since the Scanlon Bonus Plan has hit its downfall. Workers are seen as being inclined to restrict work output, having little ambition, and avoiding responsibility if at all possible. They are believed to be relatively self-centered, indifferent to organizational needs, and resistant to change. Common rewards cannot overcome this natural dislike for work, so management is almost forced to coerce, control, and threaten employees to obtain satisfactory performance (Newstrom, 2015). Though managers may deny that they hold this view of people, many of their actions suggest otherwise.

Abstract In Milestone Three, I have created possible solutions to the problems at the Engstrom Auto Mirror Plant. This includes remedies to their organizational issues using theories and concepts to validate my research. My recommendations will lead to a more proactive workplace.

Solutions Development Employee empowerment is crucial for a business to run like a well-oiled machine. At first, the Scanlon Bonus Plan was a fantastic fix, but it was also only a temporary fix. To Newstrom, empowerment is giving your employees a feeling of independence through a balance of proper instruction, guidance, and control over situations in the best way that they see fit (Newstrom, 2015). Once the Scanlon Bonus Plan ended and the employees were no longer receiving the larger pay that they had become so accustomed to, there needed to be a premeditated meeting that took place of the upper management speaking to the employees. No one would happily accept lower pay one day and be pleased about it without knowing what the future holds. In the meeting, Ron Bent, along with the other managers should have come up with a way the employees can earn bonuses in the future, in whatever form that is manageable for the company. So every employee could still have the opportunity to continue getting a bonus, but it will no longer be handed to them on a silver platter, instead it will be a true symbol of their hard efforts at work. David Marquet from the Harvard Business Review believes the key to employee empowerment isn’t a quick fix or a ‘program,’ but that the solution is to make a serious change to the way the organization is being run. Once a fundamental change has been made, the employees can feel powerful and in control over things affecting their job performance (Marquet, 2015). This is so true, employees should feel motivated to come to work and fulfill their obligations that they are being compensated for, so to keep the employees feeling motivated and empowered within their workplace consistently should help the Engstrom Auto Mirror Plant tremendously.

By using the supportive model, according to Rensis Likert, each employer will have a feeling of personal worth and importance causing maximum work ethic. If the employees sense that their managers are understanding, communicable, and supportive of them, no matter what their issues may have been with the company, they will work hard to fulfill the values and expectations required of them. Building off of that, the collegial model is an extension of the supportive model, which is based upon the partnership of employees and management. The workers fulfill their obligations because they find it their duty to do so, not because they are afraid of the punishment that will come if they don’t. This helps establish feelings of self-discipline and job satisfaction (Kashyap, 2015). When employees are empowered, they are able to handle situations much better than they would otherwise. So when employees feel an increased sense of usefulness and respect, their sense of autonomy increases as well. As a result of this, their actions, attitudes, and how they perceive the company is in a much more positive light. Empowered employees are also more helpful and committed to the success of the company they are working for (Newstrom, 2015). The Engstrom Auto Mirror Plant needs to rebuild a strong foundation where the employees feel appreciated and inspired to perform at their top ability. The autocratic model is vastly different from the supportive and collegial models in the sense that it is a behavior model that is strict and organized to get the employees working and refocused. A company with an autocratic environment is authority oriented and employee obedient. The bosses have the ultimate power to hire, fire, and perspire employees. This model is particularly successful in situations where the employees are

lazy and try to skim out on their work. The threat generally used by the managers is that the reward or wages will be withheld if the workers do not obey them (Kashyap, 2015). The autocratic model is not perfect and has some shortcomings, which is where the custodial model would come into play. Sometimes in an autocratic environment, employees will feel insecure and frustrated with their employers, so to break down this anger that may have been built up against their bosses for being so strict and harsh, the custodial model will attempt to mend employer-employee relationships. All progressive employers would want to hop on board with this model that emphasizes economic rewards and benefits. Even things like Employee of the Month where the winner gets a $50 gift card to a nice restaurant, or a monthly team competition where the winning team gets to not wear uniform for an entire week. Just silly things like this would make all the difference to the employees. It would help distract them from the fact that their checks are no longer as big, and would redirect their focus to performing well so that they still get some sort of tangible pat on the back.

Abstract In Milestone Four, I have explained personal workplace organizational issues, analyzed root causes from a human behavior perspective and validated this analysis with supportive research evidence. And lastly, I have examined the impact of poorly aligned and administrated human behavior theories and concepts.

Workplace Analysis I worked an on-campus job all four years at Seton Hall University while I was getting my Bachelor's degree. I remember halfway through my first year working there, the department was under new management, and they decided we should have student employees of the month. At first when they announced it, we didn’t take it very seriously and laughed it off. That is, until they informed us of the prize. Whoever won employee of the month would receive a $25 Dunkin Donuts gift card and a $25 bookstore gift card. Now that may not sound like much, but as freshmen in college making minimum wage and never having enough caffeine or school t-shirts, this was a dream. Everyone immediately put their game faces on. “People are motivated to take action when perceived needs or desires are at stake. Internal and external factors influence drivers of motivation, but in the workplace, ensuring that employees are motivated is critical to organizational success” (Newstrom, 2015). For the entire month everyone was on top of their duties and responsibilities. We went above and beyond our job requirements, and were overly polite to our manager. We probably all deserved to be the employees of the month, but only one person could win. And they did. For the rest of us, as we watched him receive the gift cards and a picture of him on the bulletin board in the office put up, we felt pretty defeated. The steak dangling in front of us was ripped away, and we no longer wanted to work hard after not being rewarded for our hard efforts too. You must be careful when giving motivation to your employees without thinking about the after affects. Before this incentive program came about, we were all Theory Y

employees. We did everything we were supposed to do to meet our job criteria and were not lazy. But once the incentive turned into a competition, we all worked above and beyond to win. When we lost we felt defeated, unappreciated, and unmotivated to even do the minimum of work, turning us into Theory X workers. The employee of the month incentive turned out to be a double-edged sword. To avoid this, our manager could have acknowledged everyone for their great work that month, and although everyone cannot receive gift cards, they could have bought us a box of donuts to share or something silly to show they care about the rest of us and to encourage morale. The leader-member exchange theory could have been called into focus here. This theory of leadership focuses on positive employment experiences and strengthens organizational effectiveness between supervisors and subordinates. The theory assumes that leaders develop an exchange with each of their employees, and that the quality of these leader-member exchange relationships influences employees' responsibility, decision influence, access to resources and performance (Unknown). “The process of personnel motivation in organizations is unique and unpredictable due to the influence of various quantities of motivational factors on the performers of certain tasks, various degrees of influence of these factors on the activity results and various influence of identical motives on different people. Thus, the motivation process is complex and uncertain” (Halushchak & Halushchak, 2016). Although our level of performance was high, our level of economic reward was low (barring the winner). This shows true fluctuation between the various pyramid levels in Maslow’s Hierarchy of Needs theory.

Similarly to the organizational issues at my old workplace, the Engstrom Auto Mirror Plant also has trouble finding an appropriate reward system. Under the behavior modification principle (Newstrom, 2015), this instrumental condition for applying contingent rewards is undesirable, leaving many employees confused about how to perform and highly dissatisfied with the reward system. Organizational behavior is the study and application of knowing how people act within their organizations individually and in groups (Newstrom, 2015). Organizational behavior supplies the tools to help identify how human behavior will contribute to the success of the organization’s goals, creating a unified group of individuals. Engstrom Auto Mirror Plant could really use a lot of organizational behavior to create harmony within the company. Everyone is so focused on compensation and bonuses, they have forgotten the purpose of working for a company that has loyal customers that rely on their products. The most important thing to remember is getting the Plant back to working like a well-oiled machine and increase employee drive. According to Tolman and Wiker, Gallup’s State of the American Workplace Report for 2012 cited a disturbing trend in the workforce. Nearly 70 percent of employees were not actively engaged in their work, costing employers approximately $500 billion in lost work, money, and time every year. Not only affecting large companies, but small companies and start-ups too (Tolman & Wiker, 2014). With that being said, it is clear that employees demanding their bonus checks in compensation for their labor will harm the company greatly, because if the company can no longer afford to pay extra bonuses on top of salary, they certainly will

not be able to overly compensate if the employees are causing them to lose copious amounts of money. Social systems in people’s personal lives are very similar to those in the workplace. An effective social system provides the possibility for achieving set goals and understanding all objectives and differences (Newstrom, 2015). I imagine workers who have familial obligations and bills to pay are not going to risk their jobs for a bonus they feel entitled to. In fact, they should try to encourage their coworkers to continue working hard and to be grateful for this opportunity to work and make an income. The workers that are willing to put their jobs on the line to demand their bonus checks could have an additional job, financial support from a spouse or family member, or just simply are not afraid of losing their job and looking for a new one. But with the economy the way it is, and how difficult it is to find work, they should really reevaluate the way they are looking at this compensation situation at the Engstrom Auto Mirror Plant. The employees at Engstrom Auto Mirror Plant want stability; this could come from a non-ecological model. So where an ecological model would accept the environment’s ever changing stature, a non-ecological model would assume consistency in the environment that some things would stay the same. The employees need financial consiste...