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Autor: anton 29 January 2011
Words: 3325 | Pages: 14
Riordan Manufacturing is faced with a problem within their organization that has developed into the lack of motivation and rewards strategies for employees that is starting to result in organization ineffectiveness amongst the employees. However, the objective is to develop Riordan Manufacturing into a high profitable organization that possess highly respected employee compensation and benefit programs. This program should motivate employee to be productive and attain job satisfaction within the organization. The awards program will assist Riordan Manufacturing to maintain a high retention rate, high morale rate, and quality productions.
In the following paper I will discuss Riordan Manufacturing organizational background and organizational structure. I will discuss the evaluation of the problem/issues that Riordan Manufacturing is facing that has an impact on the organizational effectiveness. I will discuss the benchmarking alternative to assist in resolving RiordanÐ²Ð‚â„¢s problem/issues within the organization. I will demonstrate a comprehensive motivation and rewards strategy model for organizational effectiveness. Furthermore I will discuss the outcome of these strategies.
Ð²Ð‚ÑšRiordan Manufacturing is a global plastics producer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Production is divided among three plants: plastic beverage containers in Albany, Georgia; custom plastic parts in Pontiac, Michigan; and plastic fan parts in Hangzhou, China. Research and Development is conducted at corporate headquarters in San Jose, California. Riordan's major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.
Recently, Riordan made several strategic changes in the way it manufactures and markets its products. Declining sales and uneven profits over the past two years not only forced the company to change its sales processes, but prompted them to adopt a customer-relationship management (CRM) system. Customers are now serviced primarily by sales teams rather than single salespeople, with each team focusing on a particular customer segment. Teams typically include a sales person, product engineering specialist and customer service rep. The hope is that the team approach will improve sales.
From a manufacturing perspective, Riordan has implemented a Six Sigma quality approach and is ISO9000 certified. Some work has been redirected to a new manufacturing facility in China, and plants have been restructured into self-directed work teams. Unfortunately, as changes have been implemented, employee retention numbers have declined. The company recently conducted an annual employee survey, which showed a decrease in overall job satisfaction, particularly in the areas of compensation and benefits.
RiordanÐ²Ð‚â„¢s employees comprise three major demographic groups. Baby boomers make up the bulk of the managerial and about half of the manufacturing staff; GenXers make up the majority of the professional staff, as well as some of the manufacturing staff; and the GenY contingent are the newest hires, found primarily in manufacturing, engineering and IT. These three groups have radically different perspectives on rewards and motivation, valuing everything from interesting work to bigger paychecks.
Recent performance data identified about 25 percent of the employees as high achievers, a large group of mid-tier performers and a small group of people who are not performing well at all. Unfortunately, the current reward system is barely based on performance, instead recognizing cost-of-living increases, seniority and position. Faced with declining morale and work ethic, Riordan managers have been pressuring the CEO to "do something" about the rewards system.
Sales management wants an improved commission structure that recognizes the new teamwork philosophy, while salespeople fear their bonuses could be at risk if they depend on team, and not individual, performance. Other managers are concerned that, with or without incentives, their employee base salaries are too low to retain good people and are urging the CEO to increase pay levels. Engineering and IT managers are particularly concerned that several employees with proprietary information may leave the organization for greener pastures. Research and Development says that their employees who work on long-term projects would be best served by incentives that reward continued focus. They also want their contributions to the sales process to be recognized and acknowledged.
The CEO knows that something must be done, and heÐ²Ð‚â„¢s considering his options: Completely overhaul the reward system, use piecemeal solutions to address the most critical issue or find new motivation strategies. Costs, of course, have to be carefully weighed against any benefits, especially because some of the company's key customers are extremely price sensitive Ð²Ð‚Ñš (University of Phoenix, 2008).
Evaluation of the Problem/Issues (and alternative solutions)
The first issue facing Riordan is that of an apparent lack of employee motivation. A recent employee survey indicated a decrease in overall job satisfaction with a particular focus on compensation and benefit issues. It is believed that this decrease is related to an increase employee motivation. According to the text, Ð²Ð‚Ñšemployees must be motivated if they are to perform behaviors such as high task performance, job seeking, attendance, or cooperation with othersÐ²Ð‚Ñœ (Dreher & Dougherty, 2001, Ch 2). Addressing this issues will provide insight into what motivates individuals to remain loyal and achieve RiordanÐ²Ð‚â„¢s end-state goals thus, increasing the retention rate (Wormley, K.A).
Survey reviews also indicate that personnel feel there is no opportunity for career advancement within the company. Turnover rates are increasing to a level that concerns the CEO. By hiring outside of the company and not supporting internal promotion of qualified individuals, the employees of Riordan Manufacturing feel as though there is limited opportunity for internal advancement. A succession planning schedule however, would reduce staffing cost, increase morale, and provide a motivational component for those who are interested in moving up in the organization. This type of planning, Ð²Ð‚ÑšÐ²Ð‚Â¦represents a key component of any good-quality career system by enabl[ing] management to identify the strengths and weaknesses of individuals that could be developed into replacements for key individuals within the organizationÐ²Ð‚Ñœ (Dreher & Dougherty, 2001, Ch 2). (Wormley, K.A).
Another issue at Riordan Manufacturing is its failure to provide employees with total compensation. They are lacking the ability to retain employees, maintain employee satisfaction and employee motivation. RiordanÐ²Ð‚â„¢s Chief Information Officer states that, Ð²Ð‚ÑšÐ²Ð‚Â¦over the past three months, IÐ²Ð‚â„¢ve lost three key people and it looks like I could easily lose more if the increasing number of complaints about compensation and decrease satisfaction are any indicationÐ²Ð‚Ñœ (University of Phoenix, 2005). Riordan can develop a new benefits and compensation system that will reward employees according to merit and performance. This will result in an increase in the employee retention rate as well as an increase employee satisfaction (Wormley, K.A).
The employees of Riordan often feel that they often are not rewarded in a way that is connected to the companyÐ²Ð‚â„¢s strategy. Riordan can update the descriptions of each job within the company and use it as guideline in rewarding pay increases (Wormley, K.A).
Alternative Problem Solution through Benchmarking
As a problem solution, benchmarking from organizations that have mastered how to conduct a successful organization within their market while managing a highly productive and satisfied staff due to their successful employee benefit and compensation program. The first benchmarked company that demonstrated these qualities was Verizon.
Verizon is a Fortune 20 company and part of the Dow Jones 30, Verizon Communications (NYSE:VZ) is one of the worldÐ²Ð‚â„¢s leading providers of communications services, with approximately 208,000 employees and $71.3 billion in annual revenue (Verizon). Verizon Wireless owns and operates the nationÐ²Ð‚â„¢s most reliable wireless network, serving more than 43.8 million voice and data customers across the United States (Verizon). (Wormely, K.A.)
Verizon offers a very competitive total rewards package. They state, Ð²Ð‚Ñšwe need the best and brightest to enable us to lead the industry. In turn, we provide market competitive compensation and a wide array of beneÐ¿Â¬ÐƒtsÐ²Ð‚Ñœ (Verizon). Verizon uses the compensation packages to motivate their employees to be great performers for their organization. Verizon rewards employees for their achievements and meeting the organization objective goals. Verizon offers their employees several compensation and benefits through their total rewards program. Such as, Savings Plans that is designed to help employees meet their retirement income needs. They offer a Health and Well being program which is designed to have access to affordable, high quality health plans, as well as other important benefits designed to protect our employees and their dependents in the face of serious health issues. Verizon also offers tuition reimbursement. They have designed all these benefits plus more to keep employees motivated and have a high rate of moral, employee retention with in their organization (Verizon). (Wormley, K.A)
Another leading company within their industry that offers an excellent employee benefit and compensation program was Dell inc. Dell is an organization based on technology and its progression revolves around technological advances within their industry. Dell was founded in 1984 by Micheal Dell on a simple concept: by selling computers systems directly to customers, we could best understand their needs and efficiently provide the most effective computing solutions to meet these needs (Dell). DellÐ²Ð‚â„¢s mission in this industry is to focus on customer-focus direct business model, and the companyÐ²Ð‚â„¢s success in creating leading value for customers and investorsÐ²Ð‚â„¢ (Dell). (Wormley, K.A)
DellÐ²Ð‚â„¢s CEO thought process regarding motivational practices consists of motivating employees to think like an owner. Therefore Micheal Dell states, "To motivate an employee to think like an owner, you have to give her metric she can embrace." (Incentive Motivation). At Dell, every employee's incentives and compensation are tied to the health of the business. Dell explains that they specifically demonstrate how everyone could contribute: by reducing cycle times, eliminating scrap and waste, selling more, forecasting accurately, scaling operating expenses, increasing inventory turns, collecting accounts receivables efficiently, and doing things right the first time. Dell makes this the core of their incentive program for all employees (Incentive Motivation). As part of DellÐ²Ð‚â„¢s motivational practices they also offer employees a week off at Christmas and 10 paid days a year for personal use. This has motivated Dell employee to perform with job satisfaction (Wormley, K.A).
Proposed Motivation and Rewards Strategy for Organization Effectiveness
To retain employees, maintain employee satisfaction and employee motivation; the following system will demonstrate the alternatives to implement these strategies to gain Organizational Effectiveness:
Riordan Manufacturing Compensation/Total Rewards System
Ð²Ð‚ÑšTotal Rewards: All of the tools available to the employer that may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship.
Throughout history, employers have been challenged with attracting, motivating and retaining employees. From the simplest barter systems of centuries past to the current complex incentive formulas of today, the organizational premise has been the same: Provide productivity and results to our enterprise and we will provide you with something of valueÐ²Ð‚Ñœ (Alliance for Work-Life Progress).
Total rewards is the monetary and non-monetary return provided to employees in exchange for their time, talents, efforts and results. It involves the deliberate integration of five key elements that effectively attract, motivate and retain the talent required to achieve desired business results. The five key rewards elements are:
* Performance and Recognition
* Development and Career Opportunities (Alliance for Work-Life Progress).
Total Rewards system: Utilize incentive pay to motivate performance from an individual, team, or company wide:
Ð²Ð‚Ñž Employee Benefits
o Full time or part time employers (executive or staff) who meets the eligibility requirements are entitled to health, dental, and vision insurance. Employees are offered access to the employee assistance program (EAP), Work-Life Program, and short and long term disability that will help manage work and family life as part of the Compensation/Total Rewards System program. Employees are also entitled to benefits such as, Pay for Time Not Worked (These programs are designed to protect the employee's income flow when not actively engaged at work) (Alliance for Work-Life Progress).
o At work (breaks, clean-up time, uniform changing time. Away from work (vacation, company holidays, personal days).
o Employee Assistance Program (EAP): are 'referral services that employees can use to seek professional treatment for emotional problems or substance abuse' (Noe, Hollenbeck, Gerhert & Wright, 2003).
o Work-Life Programs and policies are designed to create more flexible, responsive work environments supportive of commitments to community, home, and loved ones (U.S. Office of Personnel Management).
A specific set of organizational practices, policies, programs, plus a philosophy, which actively supports efforts to help employees achieve success at both work and home. There are seven major categories of organizational support for work-life effectiveness in the workplace. These categories encompass compensation, benefits and other HR programs. In combination, they address the key intersections of the worker, his or her family, the community and the workplace. The seven major categories are:
* Workplace flexibility
* Paid and unpaid time off
* Health and well-being
* Caring for dependents
* Financial support
* Community involvement
* Management involvement/culture change Interventions
(Alliance for Work-Life Progress).
Ð²Ð‚Ñž Employee Education Assistance Program:
o This compensation strategy will allow for employees to pursue a higher education or continuous education and be reimbursed tuition on the basis of the employee continuing their employment with Riordan for the next 3 to 5 years.
Ð²Ð‚Ñž Stock Options or Stock Investment Program:
o This will give the employees the option to invest shares into the company and purchase stock with the company. This will allow all employees to have the opportunity to become an owner within the company.
Ð²Ð‚Ñž Employee Development Program:
Development: is a set of learning experiences designed to enhance employees' applied skills and competencies; development engages employees to perform better and leaders to advance their organizations' people strategies (Alliance for Work-Life Progress).
o This program is designed to give all new hires a minimum of a five day one on one training, which includes orientation, position development, customer service development, technical development (or whatever the focus of the job is).
o Also, Leadership Development, which consists of extensive leadership training, leadership skills, customer service skills, and career development.
o Continuous Employee training and development: offers employees and leadership the opportunity to continually take courses that will develop then in their feel of work or personal skills.
o Career Opportunities (a plan for an employee to advance their own career goals and may include advancement into a more responsible position in an organization. The organization supports career opportunities internally so that talented employees are deployed in positions that enable them to deliver their greatest value to their organization (Alliance for Work-Life Progress) for employee who are trying to cross over into a management position, team lead position, or obtain a position with a higher salary (promotion potential). Employees will be given the opportunity to apply to have a mentor that will guide them through the process of developing their skills to become a team lead, manager, or be considered for a promotion. These skills will be developed through the training and development program.
Ð²Ð‚Ñž Performance and Recognition Program:
Ð²Ð‚Ñž A key component of organizational success, alignment of organizational, team and individual performance is assessed in order to understand what was accomplished, and how it was accomplished. Performance involves the alignment of organizational, team and individual effort toward the achievement of business goals and organizational success (Alliance for Work-Life Progress)..
Ð²Ð‚Ñž Acknowledges or gives special attention to employee actions, efforts, behavior or performance. It meets an intrinsic psychological need for appreciation for one's efforts and can support business strategy by reinforcing certain behaviors (e.g., extraordinary accomplishments) that contribute to organizational success. Whether formal or informal, recognition programs acknowledge employee contributions immediately after the fact, usually without predetermined goals or performance levels that the employee is expected to achieve. Awards can be cash or non-cash (e.g., verbal recognition, trophies, certificates, plaques, dinners, tickets, etc.) (Alliance for Work-Life Progress).
o The employee recognition and rewards program is designed to acknowledge and recognize employees for their work performance, dedication to the organizational mission, efforts, initiatives, pro-active assignments, and being a team player etc. The executives and team leads will determine what type of reward an employee will be entitled to (monetary or non-monetary) depending on the catergory that the employee is awarded under. Employees will be entitled to be rewarded with money, gift cards, certificates, time off awards, promotions, in grade promotions.
Ð²Ð‚Ñž Employee Survey and 360 Feedback Program:
o This program is designed so employees are given the opportunity to conduct a survey that will describe their satisfaction with the company and what they believe could be changed to better the company. This is somewhat of an open door policy that the organization could develop within their organization, therefore, the employee feel they have a voice.
o The 360 feedbacks is designed to give the employees a voice and to be able to voice how they feel about management, organizational culture, their performance, and their managements performance.
If Riordan Manufacturing follows these strategies they will have the opportunity to promote employee retention, employee motivation, employee morale, employee productivity, and etc. Employees will be more inclined to produce high quality work in result of being offered benefits and compensations (the total rewards program). The elements of the Riordan Manufacturing Total Rewards Program offers the employees all the elements that is due to an employee to promote organizational effectiveness through the motivation and rewards strategy.
The process of knowing the organizations background, determining and evaluating the problems and issues, determining problem solutions step and benchmarking from companies who have already found a success to that problem, then developing a strategy to implement within the organization brings us to this point to take action by implementing the strategy and evaluating it in the future to determine the success of the strategy. However, if the elements of this strategy are followed properly Riordan Manufacturing turnover rates should decrease and they will be able to maintain satisfied employees and attract the most qualified employees to join their company.
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Dreher, G., & Dougherty, T.W. (2001). Human Resources Strategy: A behavioral perspective for general managers. New York. The McGraw-Hill companies.
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Milkovich, George, & Newman, Jerry. (2004). Compensation, 8e. New York: The
U.S. Office of Personnel Management. Work/Life. Retrieved on April
24, 2008 from http://www.opm.gov/employment_and_benefits/worklife/.
University of Phoenix. (2005). Scenario: Riordan Manufacturing. Retrieved April 18, 2008, from University of Phoenix, Week Four, rEsource. MBA530-Human Capital Development Web site.
Verizon. Verizon transforming you Career. Retrieved on April 27, 2008 from
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