Intrinsic Motivation and the Scanlon Plan at Engstrom
This paper examines how the Scanlon Plan implemented at Engstrom Auto Mirror Plant undermined employees' intrinsic motivation by relying on "if-then" economic rewards. Drawing on Daniel Pink's drive theory and the Beer and Collins case study, the paper argues that contingent financial incentives provided only short-term productivity gains while eroding employees' internal satisfaction, autonomy, competence, and sense of relatedness. The paper also proposes how a "now-that" reward model and open communication with management could have better preserved employee motivation and long-term organizational performance.
- Introduction: The Scanlon Plan and Intrinsic Motivation: Scanlon Plan's if-then rewards harmed intrinsic motivation
- How If-Then Rewards Undermine Internal Drive: Contingent bonuses replace enjoyment with external incentives
- Satisfying Employees' Need for Autonomy: Now-that model better preserves employee autonomy
- Preserving Competence and Quality of Work: Bonus pressure eroded task quality and competence
- Relatedness and the Social Cost of Bonus Competition: Bonus competition damaged coworker relationships and relatedness
- Conclusion: Employee-centered planning essential for lasting motivation
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What makes this paper effective
- It applies a clear theoretical framework — Pink's self-determination concepts of autonomy, competence, and relatedness — consistently throughout each section, giving the argument coherent scaffolding.
- It distinguishes meaningfully between "if-then" and "now-that" reward models, showing the student understands nuance in motivation theory rather than treating all incentives as equivalent.
- Each section builds on the previous one, moving from diagnosing the problem (intrinsic motivation erosion) to prescribing specific corrective approaches for each employee need.
Key academic technique demonstrated
The paper demonstrates applied case analysis: it takes an abstract motivational theory (Pink's Drive) and maps it directly onto a real organizational scenario (Engstrom Auto Mirror Plant), using the case details as evidence to support or challenge theoretical claims. This technique — anchoring theoretical concepts in concrete case evidence — is a hallmark of effective business and organizational behavior writing.
Structure breakdown
The paper opens by diagnosing the Scanlon Plan's negative effect on intrinsic motivation, then devotes separate sections to each of the three psychological needs — autonomy, competence, and relatedness — showing how the plan damaged each and how it could have been redesigned. The conclusion synthesizes the argument that employee-centered planning is essential. This need-by-need structure keeps the analysis focused and easy to follow.
Introduction: The Scanlon Plan and Intrinsic Motivation
The Scanlon Plan described in the Engstrom Auto Mirror Plant case study hurt employees' intrinsic motivation by relying on "if-then" economic rewards, which are known to produce only short-term performance improvements. When Ron Bent was hired as plant manager, company productivity was already in decline. Implementing the Scanlon Plan initially improved productivity; however, over time employees no longer viewed the bonuses as a benefit but rather as an entitlement. It is for this reason that they became disgruntled when bonuses were not paid for a couple of months (Michael Beer & Collins, 2008).
Performance rewards based on the if-then model are generally recommended only for the short term. As employees grow accustomed to rewards tied to their performance, their motivation wanes and many lose interest in the work itself. Many plant workers may have genuinely enjoyed their jobs and taken great pride in their tasks. However, with the introduction of if-then economic rewards, productivity increased at the cost of that internal satisfaction — ultimately causing employees to lose their natural interest in performing their work.
How If-Then Rewards Undermine Internal Drive
Intrinsic motivation is defined as motivation that comes from within — an employee performs a task because they genuinely enjoy the activity. The Scanlon Plan introduced extrinsic motivation into a workforce that had previously been guided by intrinsic motivation, and this shift damaged employee engagement. There may have been many factors that prompted the implementation of the Scanlon Plan, but those responsible for designing it should have considered how the plan would affect employees' internal drive. Internal rewards are far more fulfilling than external ones.
Once the plan was in place, employees no longer performed their tasks because they enjoyed them. Instead, they worked in order to receive bonuses tied to increased production. This shift is precisely why employees began to feel the plan was working against them — they stopped offering suggestions to management and started focusing exclusively on maximizing their bonus payouts. The satisfaction they once derived from doing their work well disappeared, and they lost interest in the work itself. As numerous studies have pointed out, if-then economic rewards can increase employee productivity, but only for a limited period and cannot be relied upon to sustain long-term motivation.
Satisfying Employees' Need for Autonomy
To ensure that employees' needs for autonomy, competence, and relatedness were satisfied, the Scanlon Plan should not have relied on the if-then model. Instead, it should have employed a "now-that" model for rewarding employees — one in which rewards and bonuses are not contingent on productivity or performance targets. The plan could still have been used to encourage employees to offer suggestions about improving plant operations and to speak openly with management. This approach would have preserved employee autonomy, which Daniel Pink (2011) defines as the free will to choose how one performs a task. Employees lost that sense of autonomy when they shifted from working because they enjoyed it to working solely to earn the promised bonuses.
Conclusion
The plant manager should have implemented the Scanlon Plan with the employees' needs in mind instead of focusing solely on the needs of the company. A motivation strategy grounded in the now-that model, open communication, and respect for employees' internal drive would have been far more effective in sustaining long-term productivity and workplace satisfaction than a bonus system that ultimately eroded the very motivation it was meant to build.
References
Michael Beer, & Collins, E. (2008). Engstrom Auto Mirror Plant: Motivating in good times and bad. Harvard Business Publishing.
Pink, D. H. (2011). Drive: The surprising truth about what motivates us. New York, NY: Riverhead Books.
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