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Useful Paper

In: Business and Management

Submitted By Exotic
Words 1200
Pages 5
Engstrom Auto Mirror Plant Case
Motivating in Good Times and Bad
Prepared by: Lily Yuan, Vicky Pan, James Xu, Kate Li, Issakson Wang, Ariel Cao, Vivian Fu
9 November 2013


 Introduction to Engstrom
 Scanlon Plan
 Scanlon Adoption Plan at Engstrom
 Problems and Solutions?


Introduction to Engstrom (I)

 A privately owned business manufacturing mirrors for trucks and automobiles
 Located in Richmond, Indiana
 209 employees
 Use Scanlon Plan as an incentive for staff


Introduction to Engstrom (II)

1948 late 1990s

Troubles:unprofitability,production delays
Ron Bent hired


Scanlon plan is voted by 81% workers
Downturn in industry


46 employees lay off

June 2006

Need a new solution!

May 2007
Economical Context






 Introduction to Engstrom
 Scanlon Plan
 Scanlon Adoption Plan at Engstrom
 Problems and Solutions?


Scanlon Plan
 Developed in 1930s by Joseph Scanlon, a cost accountant by training and a steelworkers’ union official at a steel mill facing bankruptcy.
 The heart of the plan is the concept of participative management.
 The three plan components:
• 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 Ideally work together to drive big changes in behavior and attitudes!



 Introduction to Engstrom
 Scanlon Plan
 Scanlon Adoption Plan at Engstrom
 Problems and Solutions


Scanlon Plan Adoption at Engstrom (I)
 Employees signed a Scanlon Bonus Plan Agreement at Engstrom
 The strategy was to start with the total sales revenues generated during a specified period and then establish a percentage of that total as a standard or normative cost of…...

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