Riordan Manufacturing Benchmarking

Riordan Manufacturing has been through several strategic changes in its marketing and manufacturing efforts, which have significantly decreased employee retention. In performing an employee survey this decrease in retention has been attributed to a decrease in overall job satisfaction, specifically in the areas of compensation and benefits. Riordan's current rewards program is not based on performance, but instead recognizes aspects, such as cost-of-living increases, seniority, and position despite recent performance data identifying most of its employees as mid-tier performers and a small group that is not performing well at all. With declining morale and work ethic, Riordan's managers want something done about the current system and should keep in mind that in "Designing and delivering a total compensation program requires a compensation philosophy that creates measurable standards for employees to follow and uses those standards to evaluate employee performance and allocate rewards (Ulrich & Brockbank 2005, p. 23)".

Craegmoor Healthcare is an organization which faced a similar issue to Riordan manufacturing. Craegmoor Healthcare had a turnover rate of approximately 60% per year in 2004. This high rate of turnover was attributed to poor pay and training, low staff morale, poor leadership, and lack of employee engagement. In recognizing the fact that something had to be done, Craegmoor's board created a strategy, which outlined its problem areas as well as its approach to addressing three areas it considered to be a priority (Keating, 2007, p. 32).

Upon review of Craegmoor's reward system its board made the decision to concentrate on improving reward and recognition in a more strategic way adding value to both employees and the organization. The three key areas identified by the review of Craegmoor's reward system were: management development; staff training; and recognition. In developing its managers and training staff Craegmoor' goal is to provide each individual with the tools needed to do their jobs successfully and in the end reward individuals who role modeled organizational goals and values with its new "Shining star award (Keating, 2007, p. 33).

The success of Craegmoor's newly remodeled rewards program was attributed to successful interoffice communication of the program, which included an email address, area briefings, submitted articles in the company magazine, as well as local and national press, and held an awards ceremony that recognized all nominees as well as the winner, which successfully communicated the value of its employees to the organization and promoted the organization as "A great place to work" (Keating, 2007, p. 35).

Success of the new reward initiative was measured by a reduction of staff turnover of more than 30% in just two years. The annual company survey also identified several other areas that staff has noted other improvements including, employee's opinion of the organization, management and its competency, training, and praise and recognition. In order to maintain its success Craegmoor has committed to regularly assessing its reward and training initiatives to ensure that it maintains the progress it has made in staff turnover and improve its perception in the eyes of its current and potential employees (Keating, 2007, p. 35).

According to Dreher & Dougherty, "Motivation is an important factor in understanding or predicting employee behavior (Dreher & Dougherty, p. 28). One of the goals Craegmoor set for its organization included increasing staff motivation to improve customer service. Riordan Manufacturing can use the information obtained from this benchmarking assignment to determine its employee's motivational needs and using the knowledge it gains to successfully motivate its mid-tier and low performers,