Engstrom Auto Mirror Plant Motivating In Good Times And Bad Case Solution

First major factor that became a problem in the effective implementation of the Scanlon Plan was the continuous revision of the payroll to total revenue ratio. As mentioned in the case that during the period of five years, the top management revised the ratio four times bringing it down to 32.6% from 38%, which means a potential decrease of 5.4% in the bonus margin. Though the effort to bring continuous improvement in different aspects of production and management is a positive thought, but the element of change should not become a burden on employees; otherwise, it will eat up their motivation level. In any organization, irrespective of its industry, if the sense of urgency stays within the firm for more than two – three years period, it starts exhausting employees and ends up demoralizing them rather than motivating them for better performance. Similar case was valid at Engstrom Auto Mirror Plant where the sense of urgency remained for much longer than it should have been. Also, if the revision had occurred once or twice, then it would have been acceptable, but four times were way over the line.