Riordan Manufacturing

Running head: GAP ANALYSIS: RIORDAN MANUFACTURING

Gap Analysis: Riordan Manufacturing

University of Phoenix

Gap Analysis: Riordan Manufacturing

Most managers often struggle when it comes to compensating employees. A firm should align its HRM practices with its business strategy by rewarding key employee’s behaviors. (Dreher, Dougherty 2001 P.1). Riordan a global plastics producer, recently made several strategic changes in the way it manufactures and markets its products. Declining sales and uneven profits over the past two years not only forced the company to change its sales processes, but prompted them to adopt a customer-relationship management (CRM). This concept allows the customers to be serviced primarily by sales teams rather than single salespeople.

The teams consist of a sales person, product engineering specialist and customer service representatives. This strategy gave an expectation that the team approach will improve sales. This Riordan Manufacturing gap analysis will discuss several topics. The first section is the situation analysis, which discusses the issue and opportunity identification. The second section discusses stakeholder perspectives and ethical dilemmas.

The end-state vision that is specific, measurable, attainable, realistic, and timely will be elaborated in the third section. In the fourth section of the paper, it will discuss the gap facing Riordan Manufacturing, which is the statement that identifies the gap between the current situation and the end-state vision. Most managers understand that pay can be a powerful tool for enhancing employee motivation. To put it more precisely, pay and other rewards can stimulate employee effort toward reaching key goalsвЂ"such as high performance (Dreher, Dougherty 2001 P.34). In the final section of this paper it will conclude that managers has a responsibility to compensate their employees appropriately in order to achieve the desired behavior.

Situation Analysis

Issue and Opportunity Identification

The Issues that were presented in this scenario were High Employee turnover, underpaying key employees, and declining sales. The opportunities were communication, implementing surveys, managers making employees feel apart, and management understanding employees in general.

Stakeholder Perspectives/Ethical Dilemmas

In this section of this paper, the stakeholders of Riodan Manufacturing have different perspectives and ethical dilemmas. Each stakeholder has his or her interests, rights, and values that they feel is pertinent to this organization. The first stakeholder discussed is Michael Riordan a 60-year-old founder, President, and Chief Executive. He confidently believes that the company takes good care of its employees and that employee loyalty would go a long way toward solving the company’s motivation problems. He is also increasingly concerned about the value of his investment as he reaches retirement age.

To stockholders, executive pay is of special interest. Linking executive pay to company performance is supposed to increase stockholders' wealth. Unfortunately, this does not always happen.(Milkovich, Newman 2004 P.7) It seems that personal gain is to be anticipated for this president. The next stakeholder is Kenneth Collins the Senior Vice President of Research and Development. Kenneth and Michael were former college roommate, and Kenneth has been with Riordan since the very foundation began.

Kenneth was panicky that he might lose key researchers because of insufficient compensation. Eventhough Kenneth got along with the sales group, but the manufacturing team did not accept him. Hugh McCauley the next stakeholder and Riordan’s Chief Operating Officer believed that most motivation issues are the result of poorly designed processes. He also believed that the organization should not focus only on employee compensation, but on improving the total job design. To determine the appropriateness of HRM program changes it is critical for managers to first consider how the change will affect employee behavior (Dreher, Dougherty 2001 P.5).

Managers can enhance their effectiveness by establishing a systematic framework for determining how and why a HR-system adjustment will influence behavior (Dreher, Dougherty 2001 P.5). Charles Lacy Vice President of Sales & Marketing is a strong advocate for compensating employees based on team performance. Effective performance is a function of ability, motivation, and opportunity. Some level of all three of these factors must be present for an individual to achieve desired results. (Dreher, Dougherty 2001 P.17). Maria Trinh is the Chief Information Officer, and the newest senior employee.

She is very troubled about losing key staff members because of inadequate compensation. To avoid this, she would like to see compensation levels adjusted for IT expert. General managers need to know about compensation systemsвЂ"systems that relate to how employees are given pay and benefits based on factors such as the jobs they hold, or their skills, their performance, or even their seniority. (Dreher, Dougherty 2001 P.5). Yvonne McMillan is the Director of Human Resources, and she has been an employee at Riordan for the past ten years. During her tenure she has been unable to secure HR a more active and strategic role in the organization.

Aggravated by her lack of success, she complains that she’s treated unfairly. The underlying premise is that the greater the alignment, or fit, between the organization and the compensation system, the more effective the organization. (Milkovich, Newman 2004 P.10). Dale Edgel the Chief Financial Officer held various tax and general management positions in manufacturing and pharmaceutical organizations. He believes that the current compensation systems are adequate. In order to be accurate regarding the pay system it must be evaluated.

Barbara Masterson the Human Capital Consulting's Senior Consultant was retained by Riordan to review the current compensation system and suggest changes.

Barbara has experience working with several high-tech organizations, and the employee survey that was the source of her recommendation. It is important to have a system in place that could benefit the agency and the employees

End-State Vision

The end-state vision will be one the organization