Engstrom Auto Mirror Case Study

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2. To boost morale, as employees reach 75% of allowed payroll they should be paid 20% of their salary as bonus as long as they meet “on time delivery” and “quality” goals documented in new plan details. These goals should be based on recent history and should be progressive every month at reasonable rate leading to organizational goals. This first milestone and allowed payroll limit should be displayed using simple graphics (via live data update) or barometer chart that will boost performance for full bonus. This will trigger cost savings in production by ideas as employees will see performance to output probability being high. If they don’t meet on time delivery and quality goals then they will still be eligible for second part of bonus as discussed in next point. For company, they will get improved morale, better quality and on time delivery of orders. First month first milestone will be paid by company.

3. After first milestone, if actual payroll stay below allowed payroll for month then all employees will get bonus after company keeps 20% bonus for next month earlier milestone. If actual payroll is higher than allowed payroll then employee will get no further bonuses for that month. Idea is that early milestone will motivate all employees as they will see higher probability of turning their efforts into rewards. These vibes of motivation will reenergize all employees just like when Scanlon plan was first introduced. This way company will enjoy increased productivity.

4. To improve morale, restore trust and improve team work, company needed to spend some time on team building activities, all hands meeting and management talk sessions where everyone can be kept informed of business situations. Management also needs to put efforts in increasing sales and explore adjacent markets for their further business development.

Solution discussed above is represented in Fig: 1 below in form of expectancy theory:

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