You will use the Milestone Three Assignment Template for this assignment. Review the Engstrom case study looking specifically at organizational issues. Then, address the following in regard to your own workplace:

III. Workplace: Root Cause Analysis & Solutions Development

a) Explain multiple organizational issues from chosen organization and validate with workplace examples. b) Analyze root causes of workplace organizational issues from a human behavior perspective and validate your analysis with scholarly research evidence. c) Create solutions to the organizational issues by applying human behavior theories and concepts and validate your recommendations with scholarly research evidence. d) Recommend strategic actions of sound change management practices that lead organizations in a proactive manner by applying human behavior theories and concepts. e) Examine the impact of poorly aligned and administrated human behavior theories and concepts.

United Auto Workers], although the union could start taking a more belligerent position at their next meeting. Bent held up the expedite authorization. Its a vicious cycle. Were paying a stiff price for slips in productivityand thats money I would far rather be paying to workers as a reward for high performance. After Haley left, Bent sat for a moment staring out the window in his office. Back in 1998 he had faced a similar crisis, marked by low employee morale. At the time, he had rated the average worker productivity at a dismal 40% of expectation. After studying the turnaround of two other plants in Indiana, Bent had painstakingly built the support needed from both employees and the Engstrom family to institute a Scanlon Plan at the plant. The choice proved propitious: the Scanlon Plan, which paid bonuses to workers for increased productivity, had been the primary catalyst of Engstroms own turnaround. Business had been good; over a seven-year period: sales had quadrupled. In 2005, however, a downturn hit the industry. In June 2006, Bent had been forced to lay off 46 of his 255 employees. Those who remained had not received a Scanlon bonus in seven months. Bent wondered: Had the plan outlived its usefulness? Was it a victim of its own success? The workers had become accustomed to the plans substantial bonuses, perceiving the additional hundreds of dollars as part of their regular compensation. Therefore, when the bonuses stopped, the workers responded with anger and suspicion, as if something that rightfully belonged to them had been taken away. Now, Bent had to determine whether to scrap Scanlon, change it, or look elsewhere for solutions to sustaining productivity and ensuring quality until the downturn ended. Understanding Scanlon Plans The Scanlon Plan is the oldest organization-wide incentive plan still in use in the United States. Many employee incentive plans (for example, the typical bonus paid to sales representatives) are keyed to an individuals performance. Other plans base incentives on the performance of the functional work group to which an employee belongs. Organization-wide plans such as Scanlon reinforce teamwork and cooperation across work groups while they focus attention on cost savings and motivating employees to work smarter, not harder. The first Scanlon Plan was developed in the 1930s by Joseph Scanlon, a cost accountant by training and a steelworkers union official at a steel mill facing bankruptcy. Scanlon worked with the mill owner to enlist the plant workers in identifying ideas for increasing productivity. Ultimately, the plant was saved. Although Scanlon was oriented to helping small, distressed companies, variants of his gainsharing plan have been adopted by a diversity of organizations. The heart of these plans is the concept of participative management. Scanlon believed that individuals will work hard to help achieve their organizations goals so long as they have an opportunity to take responsibility for their actions and apply their skills. A key tactic is to communicate financial and other business data through all levels of the organization. While this is a symbolic motivator for many workers, the tactic also has a practical basis: everyone is encouraged to suggest ways to improve the plants productivity. The three plan componentsthe submission of suggestions for improvement by employees at all levels, the structure of the company committees that evaluate the suggestions, and then the sharing of the fruits of increased productivity through monthly bonusesideally work together to drive big changes in behavior and attitudes. When things are working properly, teamwork and knowledge- sharing typically improve in Scanlon organizations: collaboration fosters innovation and creativity which in turn drive improvements in productivity, thereby ensuring the payment of bonuses. The culture in a Scanlon plant also typically becomes more change-friendly, as workers have the opportunity to make more money by changing the status quo for the better. While all Scanlon plans share these characteristics, the plans can be tailored to support an organizations specific strategy. Plants like Engstrom were focused on cost savings, which means producing more per hour of labor spent. The bonus for everyone at Engstrom was therefore based on that ratioproduction per labor hour. Organizations with different strategies base their Scanlon bonuses on different factors, but at Engstrom, pursuing higher productivity that drove labor savings was the linchpin. Exhibit 1 shows the basic financial and structural components of the plan at Engstrom. The Path to Plan Adoption at Engstrom Engstrom Auto Mirror, which had operated since 1948 and enjoyed considerable success for much of its lifetime, had become mired in unprofitability by the late 1990s. The plant at that time was redesigning its production lines to incorporate new technology. The transition was not smooth, and increasingly long production delays irritated and eventually alienated customers. The plant manager lacked the sophistication with technology necessary to find solutions quickly and was inept at working with an increasingly militant union (he claimed that the union was laying in wait for him to make mistakes and wanted to hurt management financially on grievances). Embittered and tired of conflict, the manager resigned in 1998. Ron Bent, a successful manager in his mid-40s, was hired away from a camshaft production plant to attempt a turnaround. Bent believed strongly in the power of worker incentive programs and wanted to establish one at Engstrom. Owing to his experience with different types of programs and further study he subsequently undertook, he held strong opinions about which type of plan might work best at Engstrom. At the camshaft plant, he had experienced an incentive plan that rewarded individuals not groups or the employees as a wholefor performance. He didnt care for the results: Individual incentive plans require a lot of manpower. Youre often arguing with the union. In my experience, any time you set a rate on an operator, he will figure out a way to beat that rate. The cumulative effect of numerous small changes in tools and methods could result in incentive standards that had little relationship to workers tasks. In support of his position, Bent claimed that the plan at the camshaft plant had gotten so out of line that the average worker earned 150% of the day rate. Bent has similarly strong feelings about group incentive plans: If you are going to change your operations or institute a new technology, product, or manufacturing line, the process to get that installed and operational is much longer under an individual or a group incentive plan. A Scanlon Plan, Bent thought, was the best for Engstrom, given the challenges that the plant faced: With Scanlon, workers are receptive to new methods and new machinery because they feel they are a part of the company-wide program. When youve established a Scanlon plan properly, youve also built a good communications network throughout your organization. Though Bent had worked at and visited plants with multiple incentive plans in place, he felt that Engstrom was too small to accommodate the complexity of multiple plans. By early 1999, he and his management team began talking about the Scanlon concept around the plant, focusing on the potential benefits for workers. They also posted information about Scanlon on bulletin boards, and Bent spent many hours jawboning workers whom he had heard were opinion leaders. In addition, Bent organized a trip for a group of workers to visit another plant that had implemented Scanlon. As Bent explained:

Our bargaining committee mingled casually with the other plants bargaining committee, and some of our people attended the Scanlon meeting there. My management team kept in the background and let the workers develop their own sense of the situation. The workers came back enthused, and they set the stage for acceptance of Scanlon by their fellows at Engstrom. Throughout these months of campaigning, Bent included a single consistent message in every communication he had with any employee at Engstrom: the Scanlon Plan would be adopted at the plant only if a substantial majority of workers wanted it. In December 1999, a formal statement of the plan was prepared to be presented to all plant employees for discussion and, ultimately, a vote. The bar was high: management had insisted that, because strong employee buy-in was critical, a 75% yea vote was necessary. On December 10, 81% of the workers voted for the plan. Every employee then signed a Scanlon Bonus Plan Agreement. Following are its key provisions: The labor savings would be split 75% to employees and 25% to the company. A reserve would be established to cover months when productivity fell below the base ratio. Before the monthly payment of 75% to employees and 25% to the company, 25% of all bonus (both the employees and the companys share) would be set aside as a reserve in case of a deficit month that is, a month when total payroll costs exceeded allowed payroll. The structure of the Scanlon Production and Screening Committeesset up to stimulate and then evaluate employees suggestionswas presented in detail, and methods for appointing or electing members were established. Conditions under which management could adjust the base ratio were made explicit. Changes in wages, sales volume, pricing, product mix, subcontracting, or technology were identified as potentially leading to increases or decreases in selling prices or standard costs and therefore as factors that might cause the base ratio to be changed. The trickiest part of the plan adoption was the calculation of the plants base Scanlon ratio. A benchmark was needed. Plant management selected a ratio of payroll cost to sales volume of production. Their 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 labor, including managerial support. A ratio of 0.50 to 1, for example, would mean that the normative payroll cost was 50% of total sales revenueand that employees would be paid a bonus for any month in which the payroll cost was less than 50% of total sales revenue (with the size of the bonus based on the percentage of savings achieved). Bent remembered two of the reasons why establishing the ratio raised protracted arguments among the management team, a Scanlon consultant hired by Bent, and worker representatives: The idea was to examine the historical ratio over a representative period of the plants business cycle, including all ups and downs that are likely to occur. But we found it hard to identify a recent period we felt was representative, given the troubles at the plant. And we needed to consider that employees had been performing at unacceptable levels. We wanted to motivate them to excel, not just to perform less poorly. The best reconstruction of actual performance showed that the ratio had varied between 30.5% and 68.2% over the previous fiscal year. The average for the 12 months was 43.7%. Though the Scanlon consultant suggested a target of 44%, the ratio was eventually set at 38.0%