Root Causes –
The main problem is the Scanlon plan. The issues with this plan is that the employees have mistrust in the plan and it has not paid bonuses in over 7 months. This violates the P-> O part of the expectancy theory which states that employees need to believe that meeting their performance standard will lead to an outcome. The base rate has changed 5 times since its inception in ____ . and the employees have grown a mistrust of management because of it. This violates the equity theory which states that employees need to believe that they are being treated fairly. The reason employees at Engstrom don’t believe that they are treated this way is because of the fact that the base rate has changed so many times throughout the Scanlon plan’s inception. The employees are starting to feel that management is playing games with this formula and the fact that it is so complicated doesn’t help. The bonuses have started to be taken for granted rather than being viewed as a reward for productivity. The Scanlon plan has violated every level of Maslow’s Hierarchy of needs except for arguably the 1st level. The Scanlon plan has not given the employees the opportunity for job growth (violates second level); they do not feel incorporated since they feel like they are extremely separated from management (violated third level); they do not receive proper recognition such as employee of the month (violates 4th level) and hence they do not have self actualization

Alternatives-
Get rid of the Scanlon plan and institute an individual pay plan. The pro’s of this alternative is that it will best satisfy the E -> P part of the expectancy theory as well as the P -> O part. The drawbacks of the plan are that it doesn’t promote collaboration and team spirit. It could also result in things getting to competitive between employees which may result in them sabotaging each