Problem Solution Riordan Manufacturing

Problem Solution: Riordan Manufacturing

According to J. Rosalie, "Pay" isn't all that matters to employees. Of course, money is important. But so are a lot of other things, such as relationships with supervisors and co-workers, opportunities for growth and development, and the chance to do work that's personally satisfying and fulfilling. Despite years of research and anecdotal evidence that these intangibles can be far more motivating than money, many companies still build their incentive programs around cash awards and bonuses, investing little if any effort in the non-monetary factors so important to commitment. "Performance" is about creating value, not just about "hitting the numbers." We're all in favor of measuring and monitoring individual performance. But "hitting the numbers," so to speak, only drives value when they're the right numbers--that is, when the behavior being reinforced is central to increasing enterprise value. If you don't tie your employees' "performance" goals to value creation, your rewards programs could be encouraging behavior that's irrelevant or even damaging, rather than motivating your employees to do what's best for the business (Rosalie, J. pg. 30)

Rosalie has summed up the problems that face Riordan Manufacturing at present. The company has become complacent in its motivation and development of staff. The turnover rate in all areas has increased steadily so retention becomes a major focus. “Estimates of the cost to

replace an employee run as high as several times his or her annual compensation. Even if talent is in plentiful supply, the potential cost of replacement can be a strong argument for investing in key segments of the current work force” (Rosalie, J. 2005, pg. 31). This alone is a motivator to the leadership of Riordan to act purposefully and promptly to address staff satisfaction.

Staff satisfaction scores are low in the areas of communication and relationship with management. The immediate supervisors are not targeted as a problem. This fact leads one to believe that managers who are not doing what the corporation expects or they have not been trained adequately. The optimal solution in this case is to educate the management team and provide them the tools necessary to provide staff support, healthy structure and career development. This will take clear and concise communication on a continuous basis. Management must provide the communication in conjunction with the supervisors but realize that they are ultimately responsible for correct and timely relay of communication. The organization must set the standard and accept no less from the management team.

In addition, the management team needs to provide a more consistent staff development and succession planning process. When high-achievers are not challenged or promoted they will leave the organization. Management’s responsibility is to identify these high-achievers and assess where their strengths lie.

“The Deloitte Research report for 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don't Work suggests that employees do their best when their employers, in addition to providing adequate monetary rewards, also help them:

• Develop by providing the real-life learning needed to master a job

• Deploy to jobs that engage them and in which they perform best

• Connect with each other in positive, meaningful ways.”

Organizations will claim that their most valued assets are the employees who work for them. An asset that is managed appropriately will appreciate in value. In order to increase this value the organization must work toward linking the employee’s actions to the goals of the corporation. In doing so, people respond with the drive to create enterprise value.

Therefore, can it be said that the people who work for an organization are the most important asset to focus on, develop and motivate? According to Kelleher (1998, 76):

“Years ago, business gurus used to apply the business school conundrum to me:

Who comes first? Your shareholders, your employees, or your customers?

I said, Well, that’s easy, but my response was heresy at that time. I said

employees come first and if employees are treated right, they treat the outside

world right, the outside world uses the company’s product again, and that makes

the shareholders happy. That really is the way that it works and it’s not a

conundrum at all.” Gibson and Blackwell (1999, pg. ).

The issues of management development, staff development and appreciation have been discussed. The next area of focus for Riordan Manufacturing is in the job design arena. Staff have shared in the satisfaction survey they are dissatisfied with the current job design. In order for a job re-design to be successful it must work for those using it. The staff is the best judge of what design is optimal. “Arguably, job designs that provide for high levels of employee control also provide increased opportunities for the development and exercise of skill.

Perceived skill utilization has consistently been found to be amongst the strongest predictors of job-related affective well-being, yet is frequently neglected in studies of work redesign. Job control was the only feature of job design that consistently influenced perceptions of skill utilization, and the influence of control on satisfaction was in turn mediated by it. Thus, increases in perceived job control lead to the perception of greater opportunities for skill utilization and development and higher levels of intrinsic job satisfaction.”

Situation Analysis

Issue and Opportunity Identification

Riordan Manufacturing has hired a human resources management consultant to look into what needs to be done to change the current HR structure such as: compensation plan, incentives and bonuses to increase staff motivation and productivity and reduce turnover rate. The current VP of HR is Yvonne, who may not have the vision that is needed to accomplish the organizational goals. Yvonne report to the CFO and believes she should report directly to the