Problem Solution Riordan

Running head: PROBLEM SOLUTION: RIORDAN MANUFACTURING

Problem Solution: Riordan Manufacturing

Your Name Goes Here

University of Phoenix

Problem Solution: Riordan Manufacturing

In order for any company to gain competitive advantage over other companies in the same industry, it is important that the management team understands the importance of improving business results through people. Employees are the maker or breaker of any company. Without increased motivation and morale of the employees in a company, the company risks losing valuable employees and will be at a disadvantage in attracting potential top talents. As the economy continues to change and competition continues to increase, businesses have to continuously find ways to satisfy their employees in order to retain the best ones.

The purpose of this paper is to analyze the situation at Riordan. The company has made several strategic changes in the way it manufactures and markets its products and has chosen to adopt a customer-relationship management (CRM) system. Unfortunately, as changes have been implemented, employee retention numbers have declined and there has been an overall decrease in job satisfaction, particularly in the areas of compensation and benefits. This paper will present a problem statement that would outline Riordan's challenges and identify opportunities that might result from facing their challenges. This paper will also identify future end-state goals for the company. I began research by reading the entire scenario on Riordan from the company's intranet and was able to understand the company's background.

Situation Analysis

**Write a brief analysis of the scenario here. You should be able to do this yourself by reading the scenario. Just write an overview of what's going on. Then the issues and opportunities I'd list for you will follow

Issue Identification

 Each department head is focused only on the employees within their department and refuses to look at the company's state as a whole.

 Riordan is in the middle of a sales plump and might not be able to incur the costs of expenses required to make changes or increase incentives and rewards

 The company and the department heads do not understand the need for effective HR system for the success of the company

 The management team at Riordan does not understand the basic concepts of ability, motivation and opportunity. The theory related to ability, motivation and opportunity "is valuable for general managers because it provides basic tools for diagnosing practical HRM problems and also for generating and evaluating concrete solutions" (Dreher & Dougherty, 2001).

 There is concern that some of the company employees are being underpaid. This might lead to continuous increasing turnover. Turnover is already high.

 The current reward system is not based on performance, but on cost of living increases, seniority and position. This system does not support the new sales team philosophy. Levels of rewards distributed to employees are not perceived as fair and just. The system does not take into consideration the concept of equity theory. "Equity theory, similar to expectancy theory, considers employee perceptions (versus objective reality) to be critical to one's motivation for achieving fairness" (Dreher & Dougherty, 2001).

 R&D wants their contributions to the sales process be recognized and acknowledged. They also want incentives that reward continuous focus.

 Sales are continuing to decline and the switch to customer-focused teams is proceeding slowly.

 Company president and CEO are unrealistic about employee feelings. He does not understand the need for employee motivation and feels like there is no basis for their complaints.

 No financial or resourceful investment in reward systems.

Opportunity Identification

 Riordan has the opportunity to invest in individual and group incentives for its employees. This will contribute to the benefits of those employees that feel like they are being underpaid and will deter them from leaving the company.

 Since each department head is aware of the specific problems within their department, they can use this knowledge objectively, to come together as a team and find a solution or solutions that will benefit the entire company and all employees as a whole.

 The financial challenges the company is facing can make them begin to prioritize the issues and set up a budget that will help them meet their goals.

 By hiring and keeping the outside consultant, Riordan will be able to have an objective view and lead as they begin to work on company and employee issues.

 There is a huge potential for learning and growth for the company's management team. Instead of focusing on the individual problems within their department, they will be able to learn the importance of strategic HR systems and its advantages to the company.

 The company and management team now has an opportunity to align the company's reward and compensation systems with the business strategy. Since Riordan recently made strategic changes in its marketing processes, it should be easier for them to translate their compensation system into something congruent with that strategy. According to the model set forth by Dreher & Dougherty, "the firm's business strategy, along with its technology, determines the organization's design and work processes" (Dreher & Dougherty, 2001). These work processes call for a particular set of behavioral/role requirements for employees. "Managers must design HR systems that promote these behaviors, while also taking into account contextual factors affecting the firm, especially labor markets and the legal environment" (Dreher & Dougherty, 2001).

 By implementing and capitalizing on an HR system, Riordan will be able to know and understand the effects of the pay model. They would understand how the different perspectives on compensation, how their employees view compensation, and how it will affect their work and behavior. "How people view compensation affects how