2 STATEMENT OF THE PROBLEM Ron Bent, the plant manager, is ultimately responsible for solving the problem of declining employee motivation at Engstrom Auto Mirror Plant. Over the past two years, productivity, employee morale, quality of work, and sales have all declined. These are the results of the larger issues of employee motivation and communication within an organization. Things like productivity, quality of work, and sales are relatively short-term problems. Up until two years ago, they had been at exceptional levels ever since the implementation of an employee incentive program known as the Scanlon Plan in 1999. The plan was extremely effective in turning around the productivity and attitudes of many employees, as is evident by the employee feedback that management received. The case study presented by Beer and Collins offers workers’ praise for the new program such as, “I’m getting rewarded for thinking, not just for performing the same tasks every day”(Lutz, p.5) and, “People see themselves as a more cooperative workforce— Engstrom is now a better place to work than it was before we brought in Scanlon”(Andrews, p.5). Employee morale and motivation is a long-term problem for many organizations and that includes Engstrom. Before the Scanlon Plan was introduced, productivity was poor and tensions were high. In hindsight, Engstrom learned that its employees didn’t feel valued by management because they were not involved in changes that had large impacts on them. Much of the success of the Scanlon Plan was due to frequent and clear communication to employees leading up to the implementation. Employees were empowered by having the option to vote for or against the plan;

Issues: Though the Scanlon plan was effective when it was implemented, there are now several potential issues existing in Engstrom. The employees are no longer seeing the