Riordian

Riordan Manufacturing

Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earning of $46 million. Declining sales and uneven profits over the past two years not only forced the company to change its sales processes, but also prompted them to adopt a customer-relationship management (CRM) system (University of Phoenix, 2006).

Riordan has had to deal with significant changes such as employee motivation, job satisfaction as well as staff retention. When organizational modifications are made within Riordan, it can become the leader in the manufacturing industry. Reward systems are much more than just bonus plans and stock options. Reward system should include award/certificate, recognition, promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you. In order for Riordan Manufacturing to remain profitable and competitive, management must redefine the issues of the reward system. The redesigned reward system should be in alignment with its business strategy. An opportunity exists for Riordan Manufacturing and all stakeholder perspectives are necessary in developing and implementing a new reward system, which is critical to the company’s success.

Benchmarking

Rewards and Compensation - Texas Instrument and Marshall Industries (Jenni)

What is the perfect employee incentive program for an organization? For years researcher have been trying to understand the theory that rewards and bonuses motivate employees to do their job better. In fact, no one out there knows if incentive programs truly work and a number of people are convinced that he or she can cause significant harm (Hays, 1999).

Rob Rodin, Chief Executive Officer and President of Marshall Industries eliminated all individuals’ incentives for the 1800 employees. The first thought that pops in his mind is that he will cripple his entire workforceвЂ"take away the American Express certificate and Alaskan cruises and motivation drops more rapidly then a helium balloon rises. (Hays, 1999) Rodin analyzed the last five years earning potential of each employee, then concocted a formula, then went person to person and assigned salaries (Hays, 1999).

“Rodin stated that productivity per person has almost tripled. The company eliminated the distraction from the employees and supervisor who were fighting over products and conducting unethical practices to win the contest. Now the company has collaboration and cooperation among sales people and between divisions and departments.” (Hays, 1999)

Texas Instrument (TI) Incorporated believes rewards are used to foster loyalty, increase recruiting and retain employees in a very competitive industry. The company offers a unique and creative compensation package that includes bonuses as well as non-cash recognition ranging from personalized plaques to country ranch parties, movie tickets to golf lessons, team shirts and jackets to football and train kits. Texas Instrument believes rewards and recognition make a difference in employees’ attitudes and performance if it is tied to effort.

Steve Kimball, director of communication with O.C. Tanner stated, “If you want to impact the bottom-line, you must invest in people and not just with money but also with recognition and rewards.” Michael Riordan can learn many things from both of these companies. First people are motivated to work by different means and not by salaries alone. Recognition should not be an annual event but when an employee effort warrants. Recognizing employees for their loyalty and tenure to a company is as important as recruiting a new employee. There is not a perfect employee incentive program for every company. Michael Riordan needs to find a balance of incentives and rewards that fit his company then implement it to his employees.

Rewards and Compensation - Moses Cone Health System (Jenni)

“Most managers regularly grapple with the complex challenges presented in rewarding and compensating employees” (Dreher & Dougherty, 2001, p. 76, Chapter 4). These systems promote specific points of views. “Moses Cone Health System has maintained many of its retention programs initiated during the last nursing shortage in the 1980s.” (Bailey & and Grute, 2005, p.45) Recently the health system has placed additional emphasis on employee compensation systems. The system offers scholarships to employees as well as community members for attending schools for health-related professions, and provides career development opportunities to its employees. In addition, the health system focuses specifically on rewarding department specific employee satisfaction surveys and other key employee satisfaction indicators. Moses Cone Health System uses a shared authority type philosophy throughout its facilities and strives to invest the time and money necessary to reward and compensate its high-quality employees. The health system does this through competitive pay, alternative and flexible scheduling, rewarding and compensating incentives, and hiring new employees based on certain behavior skills. The health system was successful and the reward and compensation efforts directly affected retention, as its turnover has decreased from 20% in 1998 to the current 11.5% (Bailey & Grute, 2005).

Riordan Manufacturing’s top managers need to know about compensation systems. “Compensation is all forms of financial returns and tangible services and benefits employees receive as a part of employee relationship” (Dreher & Dougherty, 2001, p. 77, Chapter 2). Riordan needs to develop reward and compensation systems for Sales and Research and Development based upon change in corporate sales strategy and can use this benchmark to help assist the. Riordan’s employees’ performance measurement should reflect the organization's business strategies and financial goals. Compensation should also reflect the employees’ performance level and his or her contributions to the organization's success.

Total Rewards: FirstMerit Bank (Michelle)

The recent focus group responses identified that Riordan management will need to initiate a new compensation plan to align with their new strategic goal of becoming more customer service oriented. The focus groups are saying that “pay is tie to seniority more than performance” and there is “not enough recognition of good performance.” (University, 2006). The results concluded that the compensation practices at Riordan will need to change.