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Running head: GAP ANALYSIS: RIORDAN MANUFACTURING

Gap Analysis: Riordan Manufacturing

DaBigolpimp

University of Phoenix

12/17/2007

Gap Analysis: Riordan Manufacturing

Introduction

Riordan Manufacturing is a 16-year-old global plastic producing company employing 550 people with projected annual earnings of $46 million. Recently they’ve been having employee motivation issues and as a result are experiencing declining sales, lower job satisfaction, and increased turnover. With pay currently not meeting industry standards, they are at risk of losing good employees to other companies while at the same time having highly visible projects they need completed on the horizon. Riordan needs to find a way to motivate employees while not disturbing the various needs while considering the demographic makeup of their current employee base. By implementing changes based on performance, rewards, or just changing the job design, they can only hope they they’ve satisfied their requirements to remain motivated.

Situation Analysis

Issue and Opportunity Identification

Due to current processes in place and the neglect in addressing problems in prior surveys, Riordan is a company now facing employee motivation issues. Current compensation packages are inadequate as compared to their competitors. Reward systems recognize seniority over performance, along with individuals over teams. Employees are feeling unchallenged by their jobs, there is no trust in human resources by leadership, and the demographic makeup of employees provides different perspectives relating to rewards, motivation, and values. Unless these issues are addressed and properly identified, these problems will continue to persist with the company.

With current compensation packages not being on par with competitors, Riordan is facing the possibility of high turnover and losing knowledgeable employees to other companies. The concept of internal alignment is said to have a two fold effect on objectives: “...to ensure that pay is sufficient to attract and retain employees...” and to “...control labor costs” so that the organizations cost of equipment and services can stay competitive. (Milkovich & Newman, 2004 P.17)” Considering that programmers are making 15% less than their counterparts at other companies, they may view this is not being as valued by their employer. This may result in Riordan employees being more susceptible to taking outside offers to leave. The opportunity exists for them to begin to re-evaluate their compensation plans to make sure they’re at a competitive level in order to reduce these risks.

Reward systems currently recognize seniority and position rather than performance. This could also lead to frustration and eventually high turnover because it promotes an environment where your performance really doesn’t matter. There are no motivating factors for a hard working employee to work above and beyond only to reap the same benefit as someone else who could care less. Riordan has also moved to a strategy where customers are serviced by sales teams rather than a single salesperson, but they still award individuals over teams. “The emphasis to place on employee contributions is an important policy decision since it directly affects employees attitudes and work behaviors.” (Milkovich & Newman, 2004 p.18) The opportunity is available to promote a culture that rewards employees for the work that they do as individuals as well as teams. Adopting a performance base pay system would create fairness and a balance that could prevent high turnover and further frustration.

Employees feeling unmotivated may not necessarily be tied into reward systems. Currently they’re feeling unchallenged by the job itself. Interpersonal intelligence is described as the “…ability to understand other people, what motivates them, how they work, and how to work cooperatively with them.” (Dreher & Dougherty , 2001 p.27) Managers need to understand their employees and be able to put them in places where they can get the most out of them. Here is an opportunity for Riordan to improve the way employees perform their jobs by finding out the factors they are best motivated.

No trust in human resources by senior leadership has led to the company not having a culture of consistency. This is based on that “...managers must strive to apply HR policies, programs, rules, and rewards in a way that will produce employee perception of consistency” (Dreher & Dougherty , 2001 p.43) Yvonne McMillan who is the director of human resources, is described as being frustrated and being treated lower then her job title would suggest. She conducts annual employee surveys, but has never seen any changes implemented. This approach to her organization has a direct correlation on what’s been passed down to employees. Here is an opportunity to change leadership in human resources, or give its current staff the chance to show how well they can perform their jobs regardless of the more challenging environment.

The demographic make up of Baby Boomers, GenXers, and Gen Y, also is causing issues for Riordan. Their different perspective on rewards, motivation, and values, presents difficult problems of sorting out what works best for everyone. “Social comparison refers to people’s tendency to compare themselves to others in terms of their exchanges and their treatment.” In this situation what means one thing to one group may not mean the same or hold the equal value to another. Using blanket processes and implementing them across the organization may not be the best way of communicating strategies or handing out rewards in this type environment. This is an opportunity for leadership to create an environment by first understanding the specific needs of employees, and properly motivating the different groups without just catering to one (intentionally or un-intentionally).

Stakeholder Perspectives/Ethical Dilemmas

6 groups have been identified as stakeholders in this scenario, CEO Michael Riordan, the Senior Leadership Team, Human Resources, Employees, Customers, and Stockholders. These groups share similarities and differences