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Introduction of Case Study Analysis: Organizational Issues
Original Milestone One Analysis
The Engstrom Auto Mirror Plant in Richmond, Indiana faced multiple organizational issues.
The organizational issues faced by the plant are a failing incentive plan (the Scanlon Plan), low employee morale, poor productivity, lack of trust between employees and management, communication problems between employees and management, lack of employee engagement, and product-quality issues (Newstrom, 2015).
Why do some people perform better at work than others? Inspiring people to become better workers and improve their own work performance makes one figure out their work strengths and weaknesses. Once you understand your individual style you can focus on strategies to become more productive at work. Reducing burn out, improving performance, and job satisfaction are what reengineers our work lives (Hansen, 2019).
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Engstrom Auto Mirror Plant, a privately held corporation based in Richmond, Indiana, had been dealing with various issues within the organization for several years. The primary source of contention was a lack of productivity and poor quality, but a closer examination revealed a more complex issue: communication breakdowns (Newstrom, 2015). In addition, employees low morale and a growing lack of trust between them and their superiors were causing a larger storm than previously anticipated. The organizations employees developed mistrust towards the management due to unclear information about the incentives to be offered. Based on this, the employees morale is reduced, adversely affecting their performance in the workplace.
One of the things that caused strife at the plant was the Scanlon Plan, a motivational program that gave bonuses to workers for increased performance. In addition to encouraging cooperation and teamwork, the Scanlon Plan was a good idea because it was a good reason for employees to work smarter. Unfortunately, as soon as management could no longer pay bonuses, things started to go wrong (Newstrom, 2015). Employees were angry and suspicious of the management, so they were not happy. When these kinds of problems happen, employees are not as excited about their jobs, which leads to less work and lower-quality products. Therefore, the Scanlon Plan did not work out, which had a big impact on Engstrom.
The other issue identified in the organization is a decline in employee feedback. The rate of employee suggestions at Engstrom has fallen to a tune of 50 per year, a record considered low for the company. This indicates that the employees did not value providing feedback to their employer, particularly if it will be disregarded by management (Newstrom, 2015). If employees do not feel appreciated, they will not help the company be successful in the long run, which is very bad. In addition, the fact that Engstrom does not take employee ideas into account shows a psychological distance between management and employees, even if it is not on purpose. This counter-productive barrier, such as employees non-participative nature, contributes significantly to the issue.
The model of organizational behavior that dominated the managers thoughts and actions comes from the realization that the Engstrom Auto Mirror Plant incentive plan the Scanlon Plan would solve its productivity issue, low morale, etc. however, the plan had obviously not worked out according to the plant owners.
The Engstrom Auto Mirror Plant implemented an incentive plan years prior, which was designed to pay out bonuses to employees for the increase in productivity. Whenever the plant hit its target ratio, the company would pay out bonus checks to all it is employees. The aim of this was to cure the plants productivity issue (Newstrom, 2015).
Business owners Ron Bent, and Joe Haley were discussing in a meeting held on May 14, 2007, Haley stated, Theyve (the workers) have had it with the Scanlon Plan. You hear the griping everywhere: Whats the point of having a bonus plan if no bonus is paid for months? (Beer & Collins, 2008). Bent was talking animatedly to Haley: This is the third productivity problem in, what, two weeks? We cant climb out of this downturn with performance like that. Haley retorted, And its not just the people whove always been active in UAW (United Auto Workers), although the union could start taking a more belligerent position at their next meeting. Bent held up the expedite authorization, Its a vicious cycle. Were paying a stiff price for slips in productivity-and thats money I would far rather be paying to workers as a reward for high performance (Beer & Collins, 2008).
Showing gratitude isnt just about being nice, its about being smart-really smart-and its a skill that everyone can easily learn. The central characteristic undertaking of the most successful managers are that they provide their employees with frequent and effective recognition. This way they are motivating employees to excel. These managers achieve higher productivity, engagement, and retention. It doesnt take budget-busting amounts of money to recognize good employees (Gostick & Elton, 2009).
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The first model of organization behavior that dominates the thoughts of Ron Bent and his assistant Joe Haley is the custodial model. This is based on offering employees with economic security such as wages and other benefits to foster employee loyalty and motivation (Beer & Collins, 2008). The custodial model focuses primarily on the financial aspects of working for the organization. The management introduced the Scanlon plan bonuses and the employee incentive program to increase the organizations production. These initiatives were used to encourage the employees to achieve organizational goals. Therefore, the management intended to increase employees performance.
The collegial model is the second model of an organizations behavior that dominates managers thoughts. The model is based on the idea that organizations set policies and make decisions by talking about them and agreeing. Power is shared among some or all of the people in an organization who are thought to understand the organizations goals as a whole (Beer & Collins, 2008). For example, bent organized and held monthly communication meetings for all staff members, during which he actively listened and took action based on employee feedback. The goal of management in this model is teamwork, and employees feel a sense of responsibility to maintain performance standards and production, which is similar to the Scanlon Plan.
Introduction of Case Study Analysis: Human Behavior Theory
The relevant human behavior theory related to the case study is the Equity Theory. This theory is based on the principle that peoples actions and motivations are guided by fairness and that discrepancies in this fairness in the workplace will spur them to try and redress it. It is the physiological state of weighing out the outputs versus the compensation or benefits. Individuals within a company will compare contributions and what compensation they have received for that work compared to those around them (Hoffman-Miller, 2013).
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There are several human behavior theories that can be incorporated in the case study root. However, the most appropriate theory for the case study is Adams equity theory of motivation. According to this theory, for an employee to be motivated, they must think that the rewards they get for their work are fair and similar to what their peers get. Adams Equity Theory delves deeper into how an organization should be managed and may be useful in developing solutions to Engstroms problems (Hoffman-Miller, 2013). This theory emphasizes the importance of balancing what an employee puts into his job versus what he receives from it. Employees feel fulfilled and successful when they believe they are getting a genuine reward. If the opposite happens, the employee will reduce their performance.
Original Milestone Two Analysis
The organizational issues in Engstrom can be characterized based on the cognitive approach. It proceeds by recognizing the primacy of human mental activity (Luthans et al., 2021). This approach has found the most significant application in developing motivation theory. Expectation, attribution (attribute, affiliation), focus (direction) of control, and goal setting characterize the purposefulness of organizational behavior (Luthans et al., 2021). This approach uses the connections between the process of cognition and organizational behavior.
The fact is that the company has made attempts to create a motivation system based on the activity of employees regarding their suggestions for improving the company. However, in this case, the problem is that the Scanlon method used by the company does not allow to motivate employees at unstable times competently. In this case, the main problems are that the company has no opportunity to pay the bonus after the decline in economic indicators (Luthans et al., 2021). From employees point of view, only what concerns them directly is important to them. Therefore, they lose the opportunity to receive bonuses, and their productivity and initiative respectively decrease. This is due to the fact that they no longer have the opportunities to realize their potential as before.
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The failure of the Scanlon Bonus Plan was the main reason why Engstrom had problems with how it ran its business. In the beginning, this incentive system was meant to encourage employees to go above and beyond their job duties. It worked well for a while. However, after a while, the system broke down, making both employees and employers very suspicious of each other (Luthans et al., 2012). In addition, the failure of the Scanlon Bonus Plan hurt a lot of things that were important for a healthy work environment, such as employee motivation, trust between people, and the overall workplace culture. Employees at Engstrom were no longer pushed to do their daily jobs because they did not have the motivation or incentive to meet the minimum standards expected of them. Because of this, the plant could not make as much as it could have.
The Scanlon Bonus Program was originally established as an incentive for employees to do better at work. It was meant to be a reward system for exemplary performance. However, the problem started when employees thought they should get paid for doing the bare minimum of work. As a result, the reward system became the norm at work, and it was included in everyones paychecks. Using the concept of behavior modification, the employees became used to the reward for work performance, which significantly influenced their productivity (Luthans et al., 2012). This indicates that their achievement in the workplace depended on the reward. According to the law of effects, employees will keep behaving the way they do if they get good things. Thus, employees would be less likely to do well at work if the reward in question was removed, such as a percentage of their pay.
The incentive plan eroded organizational culture and caused a dysfunctional effect on employee production. An efficient and productive organization is built on its organizational culture. These are the assertions, belief systems, values, and social rules that comprise a companys culture. In the absence of these aspects, the organization is likely to lose focus. The incentive system did not work, and managements reaction was ineffective (Luthans et al., 2012). Engstrom no longer had a work culture because managers failed to provide an appropriate solution to address the problem. The failure of Engstroms Scanlon Bonus Plan is to blame for a lot of the plants problems. There are a lot of risks for a company when its employees are not motivated. Therefore, withdrawal of the incentive plan reduced the employees trust in management, which adversely impacted their performance.
Case Study: Solutions
In addition to the systematic perception of the workforce, the situational approach requires considering the managerial situation and the influence of situational factors on the behavior of people in the organization. This approach to management proclaimed that due to the uncertainty existing in the organization and its environment. The multiplicity of possible solutions to management tasks are generated by a variety of situations, there is not and cannot be a single universal approach to management in general (Thompson & Glasø, 2018). To predict peoples behavior, it is necessary to consider the situation and its perception by the system, that is, by the team, the organization.
Engstrom needs to change and modify the current employee incentive system and focus on increasing trust. The reward system should be transparent and understandable, based on quantitative assessments. It is necessary to use clear evaluation criteria common to most employees. It is essential to ensure the information availability of the incentive system, information about them should be distributed promptly at all levels (Thompson & Glasø, 2018). Employees should receive incentives immediately after positive results. The size of salaries and bonuses should not be tied to the positions held if an employee consistently shows good results, their remuneration should be significant.
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The first solution is to replace the current Scanlon Plan with a system that majors on employees internal motivation. The new system should not use a financial reward system to motivate the staff. Instead, it should follow theory Y, which asserts that managers should be nice to their workers and use a decentralized, collaborative approach to management. This makes it easier for managers and employees to work together and trust each other (Thompson, G., & Glasø, 2018). Managers encourage employees to improve their skills and suggest improvements as they take on more responsibility. Instead of controlling employees, appraisals are used to encourage open communication. Therefore, adopting a non-financial employee motivation system is the most appropriate strategy for the organization.
Everyone should be encouraged to do their best because they want to be proud of their work instead of because they could get a bonus if they did their best. People at Engstrom Auto Mirror Plant did and said things that led to the plants downfall after the bonuses stopped. Remove the Scanlon Plan, and the management will eventually get rid of the rest of the problems because employees would feel they had to meet the highest standards because it would reflect on them (Thompson, G., & Glasø, 2018). Adams Equity Theory might be an excellent way to make sure that the inputs and outputs of an organization are in balance. This would also help build a stronger relationship between employees and leadership.
The second solution is to incorporate adequate communication within the workplace. Using the concept of theory Y, effective communication between employees at all levels builds relationships and keeps everyone on the same page. This fosters a positive work environment and boosts employee motivation and productivity. To be efficient in developing and fostering partnerships, communication needs to be open and clear. Normally, clarity is an important aspect because ambiguous communication can result in aspirations not being met, relationships being ruined, and trust is broken. Therefore, due to distrust, ineffective communication can lead to dissatisfied and demotivated employees.
The third solution is that the organizations management needs to create an organizational culture and ensure that the employees understand it. A place of work with an organizational culture has clear goals and expectations (Thompson, G., & Glasø, 2018). As a result of this, employees are more interested in their jobs and interactions with others. It also leads to employees who are very interested in their jobs, making them more productive. Having a strong relationship with an organization and its people makes for a good environment that is hard to ignore. Also, businesses with a strong organizational culture are more likely to do well than those with less structure. This is because they have systems that help employees be more productive, be more productive, and be more engaged.
Case Study: Strategic Actions
It should be noted that Engstrom is entirely dependent on the motivation of its employees, so it is necessary to develop strategies that will allow the company to change its approach to management. One of the prerequisites for proactive management in business is analyzing market behavior and trends (Escrig-Tena et al., 2018). The use of intelligent technologies helps to predict the behavior of the business system to the head of the corporation based on analyzed and created models of the development of the situation (Escrig-Tena et al., 2018). It can be done by taking into account previously accumulated and current data. The intelligent, proactive management complex includes various software and hardware platforms, universal and specialized applications that can be integrated into a single information system to solve a unique task for Engstrom. Thus, with the use of a human-machine system and a tool to support the effective intellectual predictive activity of the company, it will be possible to make the necessary changes without losing the companys efficiency.
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One of the strategic actions is adopting an appropriate change management method to avoid issues during the transition from Scanlon System to a new one. If a change process is not handled effectively, the organization is prone to issues such as employee resistance, which can reduce productivity. In this case, a change model such as Kotters 8 steps can be used to manage the process (Seijts & Gandz, 2018). A social support system is required, as change is rarely viewed as a positive, and the Scanlon Plans end will be difficult for many to accept. In addition, the model will ensure that all the employees are involved in the change process. It majors on eliminating employee resistance and providing a conducive environment for change. Therefore, the organization will effectively manage the change process and succeed with the change model.
Another strategic move that needs to be made is to increase employees engagement and participation by holding mandatory meetings once a month. Appropriate employee meetings include feedback that is often specific, regular, outcome-based, positive, and sometimes conversational (Escrig-Tena et al., 2018). These meetings will let management talk about what they want for the company, and the employees will be able to say what they think and give ideas for how to move forward. Allowing employees to speak up will make them feel more like part of the group, which will make them work harder. A theory called Theory Y will be used because it is a more supportive way to deal with problems and encourages employees to accept and take on more responsibility.
The other strategic action is to establish a channel of communication that is both open and honest. Communication is critical in light of the widespread mistrust between employees and upper management (Seijts & Gandz, 2018). Employees must believe that they can bring their grievances to a reputable organization and take their complaints seriously. Management must also learn how to communicate with employees effectively. Communication is the key to building strong relationships. Trust and loyalty are important parts of any relationship, and communication that focuses on meeting each persons needs can help build both. Thus, having good relationships with people outside the company makes it easier to talk about products, services, company culture, and values clearly and consistently.
Employees expect to be valued for their work and how well they do it. Bent must make sure that everyone knows about this, but he must also make it a part of the organizations culture (Seijts & Gandz, 2018). Bent is very upset that there is no way for each person to be recognized, but it is important to meet the need for achievement. In this way, the Scanlon Plan does not work. Financial incentives cant make up for organizational flaws or things that cannot be stopped, like the economy and industry slowdown. The system should be public and show appreciation from co-workers, management, and the organization. It should also be for exceptional work that does not happen very often.
Moreover, for employees to feel like they have done a good job, they need to be able to reach personal and professional goals, be proud of them, and get praise for them. Once these needs are met, team spirit should grow. Over time, the hostile environment will get better, and working there will be more fun (Seijts & Gandz, 2018). The collaborative approach will grow over time because employees will be happy with their work, feel appreciated, and meet their needs. As the business grows, changes, or grows, it is important to go back to the action plan and change it. Over time, these requirements should be met, which will lead to more satisfaction and, in the end, a motivated workforce that is productive and driven.
The use of digital technologies helps the management predict how the business system will act based on models of how the situation will develop that have been studied and made (Escrig-Tena et al., 2018). This can be done by combining data from the past with data from the present. The intelligent, proactive management complex comprises different systems and technologies, as well as worldwide and customized apps that can be integrated into a single unit to help Engstrom with a unique task. Based on this, using humans and technology to support the firms effective intellectual predictive operation will make it feasible to take the necessary steps without placing the organizations achievement at risk.
The organization managers should demonstrate honor and kindness in their daily actions. Trust is earned over time, and the most effective way to earn trust is to demonstrate your reliability consistently (Seijts & Gandz, 2018). Minor incidents, such as gossip or disclosing any form of secret, portray a person as untrustworthy in the eyes of the public. Therefore, making an effort to be honorable and kind in all daily activities and interactions will help establish an individual who can be relied upon. In addition, employees easily foster trust with their managers and leaders if they display empathy and concern.
Case Study: Description, Understanding, Prediction, and Control
With a well-chosen strategy and its optimal implementation, the movement of the participating elements is transformed from a chaotic state into an ordered one. It is worth noting that this significantly increases the effectiveness of the planned actions of the organization. The goal of the strategy is to hold the points of the present and the future simultaneously and implement a consistent and gradual transition of actions on these ideas (Olkiewicz, 2018). Forecasting plays a special role in developing the strategic image of the organization. Ideas about the future of a company can be very diverse. However, without them, the organization loses its development guidelines and the meaning of its existence (Olkiewicz, 2018). The importance of describing and understanding the situation in which the company is economically and financially located is manifested.
In the ever-changing conditions of the modern world, timely implementation of changes in an organization plays a significant role. This aspect is depicted in its existence as an integral structure and in determining the financial and social status of its employees (Olkiewicz, 2018). If global and long-term perspectives prevail when making a particular management decision, they are likely to be divorced from reality, and only general answers will be received to specific problems. If local organizational problems are solved without understanding broader relationships at the strategy level, then such decisions will not be properly prospectively justified; they will be focused only on the organizations present situation. Therefore, it is essential to control many aspects of the functioning of all company systems.
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An organization must place a high value on the descriptions, understandings, forecasting, and control of its operations as an integrated platform. This contributes to the development of behavior systems within the organization, including complex behavioral exchange patterns (Olkiewicz, 2018). A description is followed by understanding when the emphasis is placed on it, and these are two very important components of running a successful business enterprise. In addition, employees will benefit greatly from placing a high value on predictions because it will enable them to think for themselves and anticipate future needs. Based on this, recognizing and emphasizing the importance of control plays a role in ensuring a companys long-term success. It does not matter whether one is in control of oneself or control of the outputs.
Workplace: Organizational Issues
Original Milestone Three Analysis
The Engstrom Auto Mirror Plant located in Richmond; Indiana had problems on the horizon when a downturn hit the industry, the plant had been good over a seven-year period and the employees had become accustomed to The Scanlon Plan (the typical bonus paid to sales representatives) and the substantial bonuses. Therefore, when the bonuses stopped, the workers responded with anger and suspicion (Beer, 2008).
According to Dulebohn, Bommer, Liden, Brouer, & Ferris, 2012; job satisfaction is a complicated and multi-dimensional concept, which is related to mental, physical, and social factors. Emotional exhaustion is the mental dimension of job satisfaction that can affect personal performance .
As Bents uncertainty about these issues deepened, personal doubts arouse about his own performance (Beer, 2008). Managers take care of the railroad tracks, but leaders shift the tracks, change the boundaries, and redefine direction. To be a leader, you need to anticipate like a great chess player who looks ten moves ahead and quickly adjusts to the opponents play (Ashkenas & Manville, 2018). In other words, take initiative to move forward and be ready for any obstacles that may present itself. Employees may feel stress about their job due to the increasing levels of competition that the organization needs to face. Due to the market competition the increasing employees workload seems to be common issue in the workplace. Good colleagues or co-workers is one of those factors and more importantly, a co-workers support may increase employees productivity and at the same time will reduce error in work (Srimarut & Mekhum, 2020).
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The primary issue experienced in the organization is the failure of the Scanlon plan, which was introduced to motivate the employees. The initiative was effective when employees received it as benefits for the work done. However, problems emerged when the plan stopped due to a lack of adequate funds, and the employees became enraged and suspicious (Beer, 2008). Anxiety is a mental part of job dissatisfaction that can affect how well someone does their job. As Bents doubts about these things grew, he began to worry about how well he was doing (Beer, 2008). To be a good leader, you have to think ahead like a good chess player who looks ten moves ahead and changes quickly based on what the opponent does (Ashkenas & Manville, 2018). In other words, take action to move forward and be ready for any problems that might come up. Employees may feel stressed at work because the organization has to deal with more and more competition.
Workplace: Root Causes
The root causes of the Auto Mirror Plant began when the industry downturn that began in 2005 gradually dragged down the workforces morale along with the sales figures. When they occurred in the mid-2006, the layoffs shook the confidence of even the most fervent Scanlon Plan proponents among the workforce (Beer, 2008). Employees depend on incentive plans for necessities, such as living expenses, bills, emergencies, etc.
Employees can have fear, anxiety, and feelings of rejection from this course of action. And even deadlier combinations of interpersonal conflicts, individual differences, organizational factors, and extra-organizational issues can arise. Interpersonal conflicts are quite common at workplaces because we spend long hours in the offices dealing with the boss, subordinates, and peers (Shweta & Srirang Jha, 2008). These differences are why everyone is unique in their capabilities of learning, adapting, and adjusting to new stimulation.
Everyone has a different personality, attitudes, opinions, beliefs, culture, emotional stability, maturity, education, gender, language, etc. So, responses to particular stimuli will vary. Incompatibility, hostility, view of a particular manner, worldview, or value system can in fact emerge out of individual differences that often assume emotional or moral overtones (Whetten & Cameron, 1991).
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The Auto Mirror Plants root causes started when the sector recession that began in 2005 progressively reduced employees morale and sales. When the layoffs began in mid-2006, they shook even the most ardent Scanlon Plan supporters in the workforce (Beer, 2008). Employees rely on incentive plans to cover essentials like living expenses, bills, and emergencies. This course of action may cause employees to experience fear, anxiety, and feelings of rejection. This may also lead to aspects such as interpersonal conflicts, individual differences, organizational factors, and extra-organizational issues.
Interpersonal conflicts are quite common in most organizations because the management majors on other things such as creating ways of increasing performance. Based on this, managers pay less attention to critical aspects such as trust and building positive relationships (Shweta & Srirang Jha, 2008). Because of these differences, everyone is unique in their abilities to learn, adapt, and adjust to new stimuli. In addition, everyone is unique in terms of personality, attitudes, opinions, beliefs, culture, emotional stability, maturity, education, gender, language, and many more. As a result, responses to specific stimuli will differ. Furthermore, individual differences that often take on emotional or moral overtones can result in incompatibility, hostility, and views in a particular manner.
Workplace: Solutions
Enthusiasm waned and dissatisfaction grew with certain aspects of The Scanlon Plan. The distrust of bonus calculations and questions of fairness was felt by the employees. Employees thought their bonus were being reduced and thought that the company might be playing with the numbers (Beer, 2008).
What is the simplest, surest, and most direct way of getting someone to do something? Ask? Tell the person? Give the person a monetary incentive (and sometimes this doesnt work)? The most marvelous way of motivating people to work-getting them off the job! The fact is that motivated people seek more hours of work, not fewer. The cost of fringe benefits in the U.S. has reached approximately 25% of the wage dollar, and we still cry for motivation. Personnel managers concluded that the fault lay not in what they were doing, but in the employees failure to appreciate what they were doing. Management can order morale surveys, suggestion plans, and group participation programs. Communication is a two-way street. Another goal is giving employees a feeling that they are determining in some measures, what they do on the job. Employees harboring irrational feelings that interfere with the rational operation of a factory need counseling at this po
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