Enstrom Auto Mirror Plant is a large, publicly-traded company that manufactures automobile mirrors and other auto parts. In early 2015, the company was facing serious financial difficulties. In order to reduce costs and improve its bottom line, Enstrom Auto Mirror Plant instituted a new incentive program for its employees.
The goal of the incentive program was to motivate employees to increase their productivity and improve the quality of their work. In order to receive the incentives, employees had to meet certain targets for production and quality. The program was successful in motivating employees and improving Enstrom’s financial situation. In fact, the company’s stock price doubled within a year of instituting the program.
However, not all employees were happy with the new incentive program. Some felt that it was unfair and that it put too much pressure on them. In addition, the program led to some layoffs when employees failed to meet their targets. Overall, the incentive program was a success for Enstrom Auto Mirror Plant, but it was not without its detractors.
The Engstrom Auto Mirror plant in Indiana has approximately 200 employees. The Engstrom Auto Mirrors facility, which is based in Indiana and produces inexpensive car accessories, faces a crisis in May 2007. The firm was experiencing difficulties since it began operations in 2004. Sales had begun to drop since 2005; a year later, the plant manager Ron Bent had been compelled to lay off over 20% of the staff because of revenue problems.
In May 2007, Ron Bent was given an ultimatum by the owner of Engstrom Auto Mirrors, Bob Enstrom. Enstrom told Bent that he had to find a way to improve productivity at the plant by at least 10 percent within six months or Bent would be fired.
Bent knew that In order to meet this goal, he would have to come up with an incentive program that would motivate employees to increase their productivity. After much thought, Bent came up with a plan and presented it to Enstrom. Under the plan, employees who met certain productivity goals would receive a bonus. In addition, those employees who exceeded their goals would be entered into a drawing for a new car. The grand prize was a brand-new Chevrolet Tahoe.
Enstrom liked the plan and approved it. Bent then met with the plant’s employees to explain the new incentive program. The workers were excited about the chance to earn a bonus and win a new car.
The incentive program worked as Bent had hoped. Within six months, productivity at the Engstrom Auto Mirrors plant had increased by 12 percent. This was just enough to save Bent’s job and keep the plant open. In addition, many of the workers who received bonuses used their extra money to buy new cars from Enstrom Chevrolet.
Plant productivity was decreasing, employee morale was low, and product-quality concerns were beginning to surface. Key clients were at risk of losing their relationships. When the institution of a Scanlon Plan, a company-wide employee incentive program, had helped Engstrom turn around in the past, it had proven critical in increasing productivity, improving quality, and boosting morale.
In response to the current crisis, the Enstrom Auto Mirror Plant implemented a new Incentive Program called “Gainsharing” in order to motivate employees and improve productivity.
The Incentive Program was based on a simple idea: if the company as a whole did well, then every employee would share in the gains. If productivity increased, then everyone would get a bonus; if it decreased, then everyone would lose money. The Incentive Program had three components: 1) a base salary that covered an employee’s basic needs; 2) a monthly bonus that fluctuated with the plant’s performance; and 3) a year-end profit-sharing bonus that depended on how well the company did overall.
The Incentive Program was successful in Motivating employees and improving productivity. In the first year, productivity increased by 10%, and the following year it increased by 15%. In addition, employment at the plant increased, as did morale. Finally, relationships with key customers improved, leading to increased sales and profitability for the company.
The Incentive Program was a success because it gave employees a direct financial incentive to increase productivity. In addition, the program was simple and easy to understand, which made it easy for employees to see how their efforts could impact the company’s bottom line. Finally, the Incentive Program was administered fairly and transparently, which built trust between management and employees.
The incentives motivated employees to improve their productivity, allowing the factory to avoid bankruptcy. For several years, Scanlon payments had been paid on a regular basis to Engstrom workers. However, in 2006, the bonuses had stopped and Ron Bent must now figure out how to get the plant back on track.
In order to avoid layoffs and keep workers motivated, he decides to implement a new Incentive Program.
The Incentive Program had the following goals:
– To improve communication between management and employees
– To make sure that everyone is working towards the same goal
– To increase productivity
– To improve quality of products
– And to reduce costs.
Bent believes that by giving workers a chance to share in the company’s profits, they will be more likely to work harder and be more productive. He also hopes that this will help reduce turnover at the plant. The Incentive Program is thus designed to give employees a reason to stay with the company and motivate them to do their best work.
The Incentive Program was a success and workers were motivated to increase their productivity. The plant was able to avoid layoffs and keep its employees. In addition, the quality of products improved and costs were reduced. The Incentive Program was thus successful in achieving its goals.
However, there are always a few employees who are not satisfied with the Incentive Program. They may feel that they are not being paid enough or that their bonus is too small. These employees may feel that they are not being recognized for their hard work and may become disgruntled.
If an employee is dissatisfied with the Incentive Program, it is important to address the issue promptly. By doing so, you can prevent the employee from becoming disgruntled and help to maintain a motivated workforce.