Riordan Problem Solution And Defense Paper

Riordan Manufacturing is faced with a problem within their organization that has developed into the lack of motivation and rewards strategies for employees that is starting to result in organization ineffectiveness amongst the employees. However, the objective is to develop Riordan Manufacturing into a high profitable organization that possess highly respected employee compensation and benefit programs. This program should motivate employee to be productive and attain job satisfaction within the organization. The awards program will assist Riordan Manufacturing to maintain a high retention rate, high morale rate, and quality productions.

In the following paper I will discuss Riordan Manufacturing organizational background and organizational structure. I will discuss the evaluation of the problem/issues that Riordan Manufacturing is facing that has an impact on the organizational effectiveness. I will discuss the benchmarking alternative to assist in resolving Riordan’s problem/issues within the organization. I will demonstrate a comprehensive motivation and rewards strategy model for organizational effectiveness. Furthermore I will discuss the outcome of these strategies.

Background

“Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Production is divided among three plants: plastic beverage containers in Albany, Georgia; custom plastic parts in Pontiac, Michigan; and plastic fan parts in Hangzhou, China. Research and Development is conducted at corporate headquarters in San Jose, California. Riordan's major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.

Recently, Riordan 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) system. Customers are now serviced primarily by sales teams rather than single salespeople, with each team focusing on a particular customer segment. Teams typically include a sales person, product engineering specialist and customer service rep. The hope is that the team approach will improve sales.

From a manufacturing perspective, Riordan has implemented a Six Sigma quality approach and is ISO9000 certified. Some work has been redirected to a new manufacturing facility in China, and plants have been restructured into self-directed work teams. Unfortunately, as changes have been implemented, employee retention numbers have declined. The company recently conducted an annual employee survey, which showed a decrease in overall job satisfaction, particularly in the areas of compensation and benefits.

Riordan’s employees comprise three major demographic groups. Baby boomers make up the bulk of the managerial and about half of the manufacturing staff; GenXers make up the majority of the professional staff, as well as some of the manufacturing staff; and the GenY contingent are the newest hires, found primarily in manufacturing, engineering and IT. These three groups have radically different perspectives on rewards and motivation, valuing everything from interesting work to bigger paychecks.

Recent performance data identified about 25 percent of the employees as high achievers, a large group of mid-tier performers and a small group of people who are not performing well at all. Unfortunately, the current reward system is barely based on performance, instead recognizing cost-of-living increases, seniority and position. Faced with declining morale and work ethic, Riordan managers have been pressuring the CEO to "do something" about the rewards system.

Sales management wants an improved commission structure that recognizes the new teamwork philosophy, while salespeople fear their bonuses could be at risk if they depend on team, and not individual, performance. Other managers are concerned that, with or without incentives, their employee base salaries are too low to retain good people and are urging the CEO to increase pay levels. Engineering and IT managers are particularly concerned that several employees with proprietary information may leave the organization for greener pastures. Research and Development says that their employees who work on long-term projects would be best served by incentives that reward continued focus. They also want their contributions to the sales process to be recognized and acknowledged.

The CEO knows that something must be done, and he’s considering his options: Completely overhaul the reward system, use piecemeal solutions to address the most critical issue or find new motivation strategies. Costs, of course, have to be carefully weighed against any benefits, especially because some of the company's key customers are extremely price sensitive “ (University of Phoenix, 2008).

Evaluation of the Problem/Issues (and alternative solutions)

The first issue facing Riordan is that of an apparent lack of employee motivation. A recent employee survey indicated a decrease in overall job satisfaction with a particular focus on compensation and benefit issues. It is believed that this decrease is related to an increase employee motivation. According to the text, “employees must be motivated if they are to perform behaviors such as high task performance, job seeking, attendance, or cooperation with others” (Dreher & Dougherty, 2001, Ch 2). Addressing this issues will provide insight into what motivates individuals to remain loyal and achieve Riordan’s end-state goals thus, increasing the retention rate (Wormley, K.A).

Survey reviews also indicate that personnel feel there is no opportunity for career advancement within the company. Turnover rates are increasing to a level that concerns the CEO. By hiring outside of the company and not supporting internal promotion of qualified individuals, the employees of Riordan Manufacturing feel as though there is limited opportunity for internal advancement. A succession planning schedule however, would reduce staffing cost, increase morale, and provide a motivational component for those who are interested in moving up in the organization. This type of planning, “…represents a key component of any good-quality career system by enabl[ing] management to identify the strengths and weaknesses of individuals that could be developed into replacements for key individuals within the organization” (Dreher