Gap Analysis Rirordan Manufacturing

Running head: GAP ANALYSIS: RIORDAN MANUFACTURING

Gap Analysis: Riordan Manufacturing

Walter Manigold

University of Phoenix

Gap Analysis: Riordan Manufacturing

Riordan Manufacturing is fortune 1000 company that has shown some success for many years. However, over the last several years Riordan has had declining sales and uneven sales periods. In order to combat that the company has changed the sales process, they have also implemented process improvements at several of their facilities. With any company change can be stressful on management and employees alike. Employees start to question the company, and the nature of their work. This has led to a decline in morale, and motivation. The slumping sales numbers have put Riordan in a budgetary crunch. It is well known within the management team of Riordan that change in compensation and human resource practices are needed in order to retain employees. The questions lie within what changes to implement, and how to implement them. There is no perfect answer, but Riordan has taken the correct first step, and hired a consultant to look at the human resource mechanisms, and compensation plans and determine what changes are needed. From that, Executive management can decide on what changes are most cost effective now, and what changes can wait until the company is back into economic health.

Situation Analysis

Issue and Opportunity Identification

The human resource consultant that was hired noted many problems within the company. The findings were broad, and revealed several opportunities for Riordan to improve the way that it takes care of its employees, and ensures Riordan’s talent base for the future. One issue noted in the findings is the fact that Riordan pays based on seniority and not necessarily on performance. While this may seem to some to be fair, it is not conducive to the growth and retention of employees. The modern trend in HR is to pay based on performance and little else (Dreher & Dougherty, 2001). Riordan also has a problem with compensation, it seems clear that in some cases employees are paid less than what they could make elsewhere, therefore Riordan has to improve its overall compensation mechanisms to ensure that employees stay with the company and focused on the tasks at hand. Furthermore the change in the sales process has added a team focus versus an individual focus on customer management; however the incentive compensation has not changed, which has caused some strife within the sales teams. Finally, Riordan needs to ensure that it challenges employees. They must have meaningful work, and feel like they are working for the better of themselves and the company. Employees who are not challenged may seek employment where they feel like they will be more challenged, and their work will be more meaningful.

Stakeholder Perspectives/Ethical Dilemmas

There are several stakeholders that we must take into account when looking at Riordan. First are the executive managers, it seems clear that they feel they have been good to employees. They also feel that employees should be grateful for what they have been given. The executive team is looking out for the good of the company, and the stockholders, individual employees may be overlooked as they may not be seen as critical in the big picture.

The department managers are caught in the middle, they have to look out for their own interests, and those of their employees. They have to report to the both the bottom and the top, therefore they have to take a more middle of the road approach, and try and find a solution that will look out for employee retention, that the executives are happy with.

Finally the employee, they have to look out for themselves and the company. However, they likely do not see the big picture. If they are all given higher compensation, the bottom line will be affected, which affects the stock price, which in turn can affect them in a negative way. While employees really have only their own self interests to look out for, there decisions can have a large impact on the company.

End-State Vision

There is no perfect vision for a company. The vision may change some as the company changes. Riordan has a proud history of loyalty to its employees and vice versa, however times have changes. Employees demand more compensation, and better benefits than in years past. Riordan first and foremost wants to return to the years where sales numbers were booming. In order to do that Riordan needs a strong loyal employee base. In order to achieve that base, Riordan must invest in its talent, and rethink some of its processes. Times they are a changing and in order to Riordan to be successful they must change with the times. Through in investment in employees, Riordan can ensure that it keeps that talented people that it has. Furthermore investment in process improvements throughout the company will make the company more efficient. This combined with improved Hr processes will ensure that Riordan can take the company into the future, and improve overall profitability.

Gap Analysis

There is not a large gap between where Riordan is and where they want to be. Closing the gap however, maybe somewhat of a challenge. It would seem that Riordan does not have one large problem; they have a mass of little problems that combines to create some large issues. The first issue is the perception of poor compensation. Analysis shows that the overall compensation system is broken, and needs to be completely revamped. HR must get out in front of this change. Every department is different, and HR must work with the department heads to first evaluate salaries, and they work with the executive team to determine what new benefits the company is willing to take on for employees (i.e. relocation assistance, child care assistance, stock options etc…). Furthermore each department must have a mechanism that it can use to reward top performers. The reward may does not have to be a large investment, just a token of appreciation from the company to recognize the personal investments of its employees.

Compensation however, is not the only broken system at Riordan. The primary area that Riordan needs to close the gap on is the overall HR system. There seems to be little control or oversight from HR. A good HR department would have been able to step in front of these issues before they were issues. The entire HR system