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Motivating in Good Times and Bad

Engstrom Auto Plant is mirror manufacturer located Richmond, Indiana. Engstrom have 255 workers. Business had been good over seven years at Engstrom, however in 2006, Bent as plant manager lay off 46 workers. Engstrom experience downturn in business. Productivity is main issue of management. Employee feel dissatisfaction with this situation, they didn’t happy with Scanlon plan implemented by management. Based on situation above, currently working environment in Engstrom is not health. Management feel already have good policy to motivate employee, with Scanlon plan, however employee feel disaffection with Scanlon Plan. So the main issue of Engstrom is COMMUNICATION and FAIRNESS. Scanlon Plan is just walking carrots, it is not genuine motive of management to motivate employee. Scanlon plan implemented, all methods and instrument already follow but actually employee didn’t received bonus.

Scanlon Plan is incentive plan was developed by Joseph Scanlon; the heart of these plan is the concept of PARTICIPATIVE MANAGEMENT. The Scanlon plan keyed to individual’s performances, to reinforce teamwork and cooperation across work group while they focus attention on cost savings and motivating employee to work smarter, not harder.

The company perspective of Scanlon plan is just tools/way to increase their money in term of sales, cost saving and productivity. It is common is business, create more product, with efficient effort. Motive of business is dominant other than motivating employee. Company didn’t think employee first, but money, if we don’t care Scanlon plan truly motivate employee or not. It is just a little company have care with their employee motivation.

The manager perspective, Scanlon Plan sound is good, the manager hope Scanlon Plan is best way, win-win solution between company motive and employee motive. They just do what Scanlon Plan that Company already decided. They don’t have power if Scanlon plan is not running well.

Labour Union and Worker perspective’s, we don’t care about the Scanlon Plan, A plan, B Plan or another incentive plan. What they are thinking is how we get money more than they living need. We hard work, smart work and just pay the compensation and incentive for over standard we had already produced.

Based on perspective above, there is any gap understanding among parties about Scanlon Plan. The pitfalls are whatever the conditions company have their power to pay incentive or not.

Worker’s enthusiasm waned at Engstrom due to there are miscommunication between management and workers about incentive plan. Incentive plan is not fairly implementing, when company going worst, incentive plan is just way of how management throw their weakness to manage company. Scanlon plan is one of trigger of worker’s enthusiasm decrease. Scanlon plan is 2 side of knife, when workers get the incentive, may be worker’s motivation increase temporally, however when workers did not received the incentive and management cannot explain fairly, it will decrease worker motivation. Engstrom condition can avoid if management can fairly implement, but it is very rare conditions. It is natural if management do that, because their motive is how company profit with minimizing cost including, cutting incentive plan.

Scanlon plan has been implemented at Scanlon Plan is not right solution for Engstrom. Scanlon plan generally is good solution concepts, when the scheme agreed together by both parties, and not stops with Scanlon plan, it is mean motivation is every day motivation, management must have time to understand employee needed that contribute to company.

Money is very important but it is not the most aspect of way we motivate the employee. Another aspect must be considered is communication and openness between management and employee. Management must create conducive work environment, situation and conditions that make employee more productive and innovative. Example, cleanliness of public facility, cozzie library and canteen, informal meeting, little rewarding like celebrate of employee birth day etc.

Almost employee didn’t want spend their time unless they get some rewards. Employee work for money, fulfil their basic needs, but reward is not always talking about money, how we recognize them and how we mentor them. Help them to achieve the target and goal, set the goal using SMART methods, give tools to achieve target, set direct and immediate feedback what employee done.

Payment is not always fairly linked with performances. That perception almost had by worker, why? Because sometimes superior give performances review is not based on what we produce but it is way of we produce, like and dislike assumptions and stereotyping. Once superior still have barrier of communication with employee, the perception of payment is not linked with performance will always there. Barrier of communication will create unhealthy teamwork and reduce collaborations. It is very danger for organizations.

If we were Bent, first thing first is directly collect what employee want in term of salary, work environment, Scanlon Plan impact, idea about incentive plan and what satisfaction and dissatisfaction feel by employee. Bent can survey with 360 Feedback to get that information or directly meet with employee and discussion. After Bent get that data, Bent can review short-term recovery for dissatisfaction with new scheme based on pure gain sharing without ratio. Set the the new Scanlon plan, with smart and easy understand by employee, explain way of how achieve the target, give tools to achieve target, direct and immediately feedback if target doesn’t achieve. Example, Engstrom target 20 K USD profit margins, and with employee innovation and productivity actual profit margin more than 20K USD, let’s say 40 K USD, and portions of employee is 60% and Company is 40%. Follow the rule give 12 K for employee and 8 K for company. Bent must routinely review target, weekly and not just review but give effective solution and helping to achieve more target. Recognize the result immediately, don’t wait weekly review event.

Conclusion

Employee motivation is not just about how much money company paid, but more than that complex system of managerial and organization factors. Based on Harvard Business Review, Employee Motivation, A Powerful New Model by Nitin Nohria, Boris Groysberg, and Linda-Eling Lee, the said employee motivation is talking about 4 drive, Drive to acquire, bond, comprehend and defend. Drive to acquire, related with reward system, the key of this drive is fairness, fairly to pay as well as competitor, fairly different pay among bad and good performer. Drive to bond, related with Culture, the key of this drive is team work and collaboration. Drive to comprehend; related with job design, the key of this drive is work itself, meaningful of task. Last drive is defend, related with transparency of performance management and resources-allocation process, the key is trust as reinforcement of transparency and fairness.

Reference:

Harvard Business Review July – Aug 2008, Employee Motivation, A Powerful New Model by Nitin Nohria, Boris Groysberg, and Linda-Eling Lee

How to Motivate Employees : What Research Is Telling Us by Scott Lazenby, Sept 2008

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