Riordan Industries

Problem Solution: Riordan Manufacturing

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University of Phoenix

Problem Solution: Riordan Manufacturing

Riordan Manufacturing has been presented with numerous obstacles during their years of operations and globalization, and none has been more frustrating than the development of their human equity and motivation of employees to achieve corporate goals. Looking into the nuances of Riordan's cultural issues yields several dominant problems. At first examination, grasping the challenges associated with the generational divide of the workforce and attempting to establish incentives that surpass employee's expectations has presented an interesting mix of problems.

With varied interest amongst the employees, some desiring better compensation while others look for recognition or promotions, each circumstance necessitates a calculated solution to meet the majority of the employee expectations. In time, the recommendations of this report will improve the quality of life for each employee, by building a workforce that is valued by the leadership through systems of recognition, coupled with redress procedures for conflict resolution, and compensation and incentives that fosters loyalty to the company and ultimately achieve the revenue targets of management.

Situation Analysis

Issue and Opportunity Identification

Riordan Manufacturing is a global plastics manufacturer that employs over 500 employees in their three manufacturing locations that include Albany, Georgia, Pontiac, Michigan and Hangzhou, China. Riordan Industries is a privately owned Fortune 1000 company that manufacturers plastic car parts, beverage containers and appliance parts. Due to declining sales and lower than anticipated profits the past two years and in reaction to customer surveys, Riordan industries recently changed their sales process to a customer-relationship management system; however, the employees of the sales department are at odds with the new compensation system because it does not reward individual effort, in favor of a team based incentive structure.

The ultimate goal at Riordan is to improve revenue and profit. Human resources has identified through employee surveys, that employees are not satisfied due to pay, recognition and inappropriate reward systems by management. Several of the managers have identified various methods to motivate their staffs. While no single, method will affect the desired changes within the organization. The Riordan junior executives expect- pay systems to help- attract high-quality employees to Riordan, and help them retain valuable contributors, and maintain positive morale among our employees. (Dreher & Dougherty, 2001, p. 77)

On the other hand the senior executives do not agree with the individual methods of rewards, preferring a team concept that targets compensation based on group accomplishment (sales or development) rather than individual contributions. Achieving goal orientated motivation through "work teams or units must first devise ways to improve work processes, thereby reducing labor costs. Some proportion of the cost savings is then returned to the work group." (Dreher & Dougherty, 2001, 91) These group incentives although have not been well received by employees of the sales and research and development teams, because the group incentive fails to recognize individual effort that is widely desired by employees because of the generational divide.

In principle, employees appear dissatisfied about the pay, incentives, and recognition they receive from the company. To help identify the problems within Riordan Industries, outside consultant Barbara Masterson conducted a thorough examination of the employee surveys and performed interviews with management. Supported by Barbara's assessments, several solutions have been suggested to more directly contend with the complex organizational issues that Riordan is facing. In principle, recommendations include salary survey to determine current market rates; develop incentive pay for research and development and sales departments; and a revamping of the performance appraisal process. The aforementioned recommendations have been presented to senior management, and they experienced difficulty assimilating the "multiple sources of information and how to use this information to make informed decisions about how actions today will influence events in the future." (Dreher & Dougherty, 2001, p. 27)

By understanding, the expectancy theory provides a window into the soul of the employees. The best method to predict employee "willingness to perform some behavior," (Dreher & Dougherty, 2001, p. 34) may better be describe by methods of identifying what specific interest or concerns the employees convey in their employee surveys. Assuming several departments received pay increases, a desired employee motivation may not be achieved because of equity issues fail to recognize the emotional needs of 'all' employees, and must be considered.

What must also be considered are the issues surrounding recognition and stifled promotion opportunities within Riordan Manufacturing's two domestic production facilities, which recently filled management vacancies from external personnel resources? This lack of a succession planning has set a bad precedence for the company and poorly received by employees who wish to promote within the company. Failure to develop promote from within programs create animosity toward management that has had an adverse effect toward employee motivation and satisfaction. To overcome this situation, Riordan should seen to reward employees through incentive programs of pay and recognition and paths to career development that promotes mutual growth and development for the employees and the company.

Stakeholder Perspectives/Ethical Dilemmas

Organizationally, there exist three points of view pertaining to the employees, which consist of three major demographic groups, and how their unique work setting and culture have created an organizational paradox. From the senior executive perspective, retention of important employees is necessary for the company to remain competitive and meet its obligations to the customer. In the recent past, the organization has shifted toward a sales team's orientation that coincided with a decline in employee retention. Employee surveys conducted human resources further indicate that employee satisfaction has declined and this is linked to compensation, benefits and recognition. Despite the evidence, the senior