Rordan Manufacturing

Problem Solution: Riordan Manufacturing

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. 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. Faced with lower job satisfaction and increased turnover, employee motivation has become a major issue. In order to decrease employee turnover and increase job satisfaction careful restructuring of the reward system and new motivational strategies must be put in place (University of Phoenix, 2007).

Situation Analysis

Issue and Opportunity Identification

When issues or problems surface they lead to opportunities. It may be more difficult to identify the opportunities than to identify the problems and challenges. However, by scanning the entire environment and focusing on defining opportunities, rather than just challenges or problems, the possibilities expand. Additionally, as the company moves forward the possibilities adds value and expands as well (Maul, n.d.). In the past 10 years, several factors have developed at Riordan Manufacturig increasing turnover and lower job satisfaction. Organizational factors, such as desire to increase innovation, recognize the value of teamwork, and reach new customers with new products have come into play. But simple things like how to reward equally and motivate employees with different needs also deserve consideration,” (University of Phoenix, 2007).

Riordan Manufacturing has an opportunity to learn the employee’s needs of their three major demographic groups, baby boomers, GenXers, and Gen Y. By management learning to use the team approach they will be able to work with employees and allow them to discover what abilities they have, what motivates them, and the opportunities they can obtain. Reviewing the information Yvonne McMillian, Human Capital Consultant, gathered will help management use best fit practices and align reward and Compensation Systems with the firm’s business strategy. (University of Phoenix, Scenario: Global Communications) (Refer to Table 1).

Stakeholder Perspectives/Ethical Dilemmas

Riordan Manufacturing is facing employee turnover. Employees believe there pay is not competitive with jobs in similar industries. They are used to individual rewards and the team reward approach has brought fear to salespeople who feel they are risking their bonuses depending on a team. Management fears not implementing the right reward system they will lose key employees to greener pastures. Declining sales and uneven profits over the past two years has forced the company to change it sales processes to a customer-relationship management system. Stakeholder’s interest is to make sure the company is profitable and their shares go up instead of down. As for Riordan customers providing the best products and relationship should keep them loyal.

Problem Statement

Riordan Manufacturing will increase the company’s profits by implementing best-fit practices, aligned with reward and compensation systems that fit the company’s business strategy.

End-State Vision

Our vision is to be an organization that exceeds other organizations in profitability by our new approach of customer-relations management. Employee’s morale, job satisfaction, and employee retention is outstanding do to rewards that satisfy all job demographics and classifications. Management, employees, and human resources are united, problem resolution is everyone’s job, and Riordan Manufacturing is a world class organization with loyal staff.

Alternative Solutions

When it comes to the topic of incentives, thoughts and opinions differ from management to employees. This why it is imperative careful thought is used when deciding about employee incentives. The purpose of incentives is recognizing employees for their accomplishments with the company. Additionally, they are constructive tools to show appreciation for the work of the individual and achieving greater results. Riordan will outsource compensation consultants to assist Yvonne McMillan, Riordan’s Director of human resource to implement the reward system.

Richmond Housing Partnership offers its employees annual pay review every year in the month of May to evaluate the employee’s performance. The rating ranges from one (under-achievers) to five (top performers) and depending on ranking the employee’s incentives are focused on the top performers. Top performers are given cash bonuses and extra pay raises on top of a normal pay increases. As for a low performer, the salary remains the same and additional training is provided. Six months later, the low performer again will have a review. “The outcome would either be that an employee has become effective and would be entitled to receive the standard pay award for the remaining six months of the year or would be rated as unacceptable and not be eligible for a pay increase” (Keefe, 2007). Alison Henderson, human resource Manager at Richmond Housing Partnership recognized achieving employees to engage in the incentive plans required management buy-in. If managers do not have the qualifying skills and attitudes to implement those changes, it does not matter how well are the incentives. Management needs to be involved prior to the implementation by providing training and development of their line managers.

Honey Technology Solutions Lab based in India provides its employees with exceptional incentives to make them happy and content. Management categorizes the star performers and treats them differently. Star performers are set in key positions and challenging roles that offer exposure and learning opportunity (Sharma, 2007). Every employee is given the opportunity to design his or her own career at the beginning. In addition, Honey Technology Solutions Lab provides professional counselors onsite with various expertise in health and finance to assist employees emotionally and physically to keep employees healthy and motivated. Educational institutions are available for employees who are interested in returning to school for career growth. They also offer extended leave for pregnancy and promised comparable, if not better,