Have you tried running the workspace in FME server without the scheduling?
The idea that you are using FME server might not be right.
If you use a batch script to run the FME workspace in a Windows scheduler the issue can be in multiple installations of FME on the machine. If that is the case, you should insert the path to the fme.exe file in front of the executable in the batch file (as the FME 2016 executable might not be the first fme.exe that is found by the OS.
The idea that you are using FME server might not be right.
If you use a batch script to run the FME workspace in a Windows scheduler the issue can be in multiple installations of FME on the machine. If that is the case, you should insert the path to the fme.exe file in front of the executable in the batch file (as the FME 2016 executable might not be the first fme.exe that is found by the OS.
As you said the batch script found FME 2015 first and it would not run a 2016 workbench. I couldn't get it to work by putting the full path in the batch script but changing the path order in the Envermental Variables solved the problem. Thanks much!!
If the FME home directory contains spaces you will need to use double quotes, like this:
"c:\\program files\\FME 2016\\fme.exe" my_workspace.fmw --param1 value1