Problem Solution: Riordan Manufacturing
Problem Solution: Riordan Manufacturing
Riordan Manufacturing is changing its business to a more customer relationship management style. This change has led to concern by the employees who believe that the rewards system at the company is lacking. Furthermore, employees believe there is nowhere to advance in the company. The current overall morale is low and the company is experiencing a high turnover where staff is leaving due to decrease satisfaction in the company.
Riordan has hired an outside consultant to review the current compensation and make recommendation on how to improve the issues the company is facing. HR needs to work with the organization and support the overall strategic business plan and objective to help Riordan improve the company image. According to Dreher and Dougherty (2001), Ð²Ð‚ÑšGeneral managers need to be aware of what constitutes sound career management and assessment practices and need to know when these types of systems should be designed and implementedÐ²Ð‚Ñœ (p. 133).
Issue and Opportunity Identification
Organizations are increasingly adopting variable pay programs to reward, motivate and retain their talent. However, as these programs grow in complexity and demand correctly administering the programs and applying variables such as company or department performance to total compensation, becomes a daunting, difficult task. Riordan Manufacture understands that compensation and reward are an important part in showing the employees they care as well as the company is willing to retain them. The company also wants to make sure that whatever change made will be effective. Effective companies have teams who are committed to the company, beginning with a senior manager who makes and keeps commitments. Management must show their support and interest as well as always assuring mutual benefit and satisfaction for all employees. "Personal recognition can be more motivational than money," asserts Bob Nelson, author of 1001 Ways to Reward Employees (Workman Publishing, 1994). "You can obtain from your employees any type of performance or behavior you desire simply by making use of positive reinforcement." I do not think most people are motivated by rewards and bonuses. I think they're motivated because they are excited about their jobs or because they are doing something that provides a service to the company.
RiordanÐ²Ð‚â„¢s HR team will need to know the value of benchmarking best in class companies and evaluate several companies that have faced the same or similar issues. All reward systems are based on the assumptions of attracting, retaining and motivating people. Financial rewards are an important component of the reward system, but other factors that motivate employees and influence the level of performance. In fact, several studies have found that among employees surveyed, money was not the most important motivator, and in some instances managers have found money to have a de-motivating or negative effect on employees (Performance, 2007). Several issues of concern that employees believe need to be address such as performance reviews that do not always happen, performance tied to seniority and not being recognized for good performance.
Stakeholder Perspectives/Ethical Dilemmas
Michael Riordan the company CEO believe that the company has taken care of the employees. Riordan has implemented a Six Sigma quality approach to help the company and some work has been redirected to a new manufacturing facility. Riordan believes as a company he takes good care of the employees and hope this feeling would go a long way even with current problems. He understands that the new direction of teamwork will come with some resistance, but he wants to improve on the company investment because he is getting close to retirement age.
Kenneth Collins and Maris Trinh are worried that their department will lose key employees because of inadequate or lack of compensation. Charles Lacy believes that employees should be compensated based on a team concept as oppose to individual base. Yvonne McMillian is focused on the role HR should be playing in the organization that she has lost focus of supporting the employees concerns. While other shareholders are involved at the company, the overall concern is the morale and reward system at Riordan Manufacturing.
Riordan Manufacturing aspires to enhance the way the companyÐ²Ð‚â„¢s services it customer as well as manufactures and markets its products. The company needs to deal with the three groups of employees within the organization that have difference perspective on rewards and motivation. Riordan Manufacturing needs to recognize that supporting employee motivation is a process, not a task. Organizations change all the time, as do people. Indeed, an ongoing process to sustain an environment where each employee can strongly motivate themselves is a challenge that all companies face at one time or another. If Riordan looks at sustaining employee motivation as an ongoing process, then the company will be much more fulfilled and motivated. By developing a mixture of changes in leadership, employee development, and job design Riordan can create a positive image of it company and build a standing reputation in the manufacturing industry.
Riordan Manufacture has an opportunity to restructure the company and offer rewards so that employees will be committed to the organization. Ð²Ð‚ÑšCommitment is define as employeesÐ²Ð‚â„¢ identification with and attachment to the employer, their internalization of its goal, and their willingness to put for discretionary effort to help it succeedÐ²Ð‚Ñœ (Rosalie, 2005). Riordan has moved into a customer-based market to improve their overall performance, profitability, and reduce expense and cost. Something must be done to build up the company morale so they do not continue to lose good employees.
HR needs to be the key driver of change and help implement the change process. HR will be working with all the management team and employees to ensure the HR strategy is linked to the business strategy. Brockbank and Ulrich (2005) reported that HR professionals may lead the management team by making choices about the following aspects in establishing a comprehensive communication strategy:
Ð²Ð‚Ñž Establish a clear vision for communication
Ð²Ð‚Ñž Ensure consistency of message and reality
Ð²Ð‚Ñž Build a focused and receptive mindset.
Ð²Ð‚Ñž Require that the medium is consistent with te message and audience.
Ð²Ð‚Ñž Ensure integration and alignment.
Ð²Ð‚Ñž Establish clear accountability for designing the communication strategy
Ð²Ð‚Ñž Measure and improve communication effectiveness
HR needs to create a value for the company to follow internally and externally. By selecting the appropriate alternatives HR can help the organization obtain it value and maintain its position in the manufacturing industry.
Like other companies Riordan could take advantage of redistributing some of Michael RiordanÐ²Ð‚â„¢s 80% owned Riordan manufacturing stock and distribute it amongst the employees in the form of stock option incentives. This would require Michael Riordan to see the potential of letting go of his stocks and control of the company. It would be a step in the direction of showing employees Michael Riordan values them as employees and people. Many organizations acknowledge that talent, if aligned with business strategy will help when implementing changes. Ð²Ð‚ÑšCompanies often say that people are their most important asset. And like any asset, people appreciate most in value when managed appropriately: with rewards programs that align their own best interests with doing what is best for the business.
Riordan Manufacturing has taken the steps towards identifying process to help guide them in improving employeesÐ²Ð‚â„¢ perception of the company as well and aligning their reward strategy effectively. While this may not be an easy task to implement, the fact remains that the company understands that something must be done. Compensation strategies stated that Ð²Ð‚ÑšA good compensation plan within the context of a total reward system provides a method for reinforcing the value-added contributions of each individual through the application of his or her talents, the growth of their capabilities, and the outcome of their actions consistent with the key success factors of the organization. While specific compensation plan designs will vary according to company and industry, and be based on culture, management style and overall objectives, the basic outcome should remain the same- increased retention of valuable employees, and increased satisfaction of all stakeholders.Ð²Ð‚Ñœ
Analysis of Alternative Solutions
Riordan Manufacturing can create an atmosphere similar to Google where the employees feel valued. Google is a funky company that calls its offices a "campus" and has created a "collegiate" atmosphere where employees dress casually and can have fun. But make no mistake: All these perks -- some quirky, some traditional -- show that Google means business, according to management experts from Wharton and elsewhere. The company wants to achieve several goals: Attract the best knowledge-workers it can in the intensely competitive environment for high achievers; help them work long hours by feeding them gourmet meals on-site and handling other time-consuming personal chores; show that they are valued; and have them remain Googlers, as employees are known, for many years" (Wharton, 2007). While Riordan does not have to go to the lengths that Google has, it can define as way to make coming to work fun.
Another option that Riordan can do is create an Employee-Based Culture. Let employees know that the company and the managers are behind them 100%. The company can focus on doing what is best for the employees and they will in turn; do a good job for the company and the customers. Provide them with the right equipment, a safe and comfortable working environment, and include them in decisions regarding things that will affect them. Ask their opinions about how to make the company or department a better place to work. Show them you care.
By creating an environment conducive for employees then like most businesses today, you will be promoting a culture of customer relationship management. This can be your driving force. Your employees will be expected to learn as much about customers as possible, serve and relate to customers at each point of contact, and do whatever it takes to retain those customers.
The employees are your driving force and they are the ones who will make you program work. You need to have a pro-employee culture in your organization to ensure long-term customer and employee loyalty. While a definite relationship exists between satisfaction and loyalty, companies must work overtime to strengthen that loyalty link. If a company wants a loyal employee, the company must first show loyalty to the employee. Good service, respect and trust will help develop employee loyalty.
Risk Assessment and Mitigation Techniques
The key for any company to success is based on its communication. In order to reduce the risk of the wrong message being received, Riordan Manufacturing needs to take the time to allow employees to digest the messages being presented about team sales concept. If communication is ineffective, this can cost the company a great deal of time, money as well as bad publicity. Riordan can improve current communications channels and create an environment where everyone can be informed on the same level using the appropriate media.
In trying to determine the benefit of Riordan new customer service sales team, the company needs to research the financial benefit of team sales as appose to individual sales. In order to do this they can use in-house research or hire an outside company. Either way by doing the research up from it will save the company the risk of making the decision without realizing the gain it could have and determine if team approach will improve sale the company is expecting.
Riordan needs to work with the human resources department and executives to ensure that all employees are kept apprise of the company position regarding sales. Management must be aware of how the employees are feeling in order to handle employeesÐ²Ð‚â„¢ questions. If management does not support the company decision, he or she cannot handle the employees question and provide the necessary assurance needed to keep production up. The concept of team base sale may require time to get use to but by keeping everyone informed, it will help employees understand the position of the company.
Riordan Manufacturing can create a comprehensive plan based on the investing in employability and retention. The risks would be the increase in cost to create, implement, monitor or manage, assess, and audit the plan. Although costly would increase employee retention and skills while addressing manager development. Southwest Airlines has successfully used this approach. Noe, et al (2003) stated, Ð²Ð‚ÑšAt Southwest Airlines, the company's focus is on keeping employees loyal, motivated, trained, and compensated. In turn, there is a low turnover rate and a high rate of customer satisfaction,Ð²Ð‚Ñœ (Noe, 2003).
Riordan can successfully use the opportunities in the process of implementing their new strategy by doing research and learning from of other companies. Change in the workplace continues at a rapid pace, affecting careers and career development. Employees, especially the most talented managers, need something more substantial when reviewing benefits that would motivate the employee to stay. If an employer is truly to compete in todayÐ²Ð‚â„¢s ever changing workplace, offering employees a good salary and health benefits are no longer enough. Google is known for its progressive employee programs; in fact, the company ranked number one on Fortune Magazine's 100 Best Companies to Work for 2007. Google work campuses feature pool tables, rock-climbing walls, swimming pools, spa services, gourmet restaurants, and 'wear pajamas to work day' (BSR Staff, 2005). Riordan Manufacturing can take lessons from Google and other companies in evaluating compensation plans and how the plan has an effect on employeesÐ²Ð‚â„¢ motivation. Providing a comprehensive total reward package will have a positive effect on the future motivation of the Riordan employee.
Riordan Manufacturing will implement a communication plan in phases to ensure understanding of company sales goal. By implementing a communications department and a detailed organizational communication model, Riordan can improve current communications channels and create an environment where everyone can be informed on the same level using the appropriate media.
Riordan will implement a new training plan immediately to explain the new sale team concept and how it will work for the customer so that everyone in the company getting the same information at the same time and presented in a way he or she can understand. Training will be required for all employees so they will be equipped to handle questions about how products are sold. If they can understand the product, they will be comfortable enough to promote the service and sell it then the company can realize an increase in profit.
Riordan will hire a research firm to evaluate the current salary of all employees to see if they are at the current market industry level. The research firm will work with HR and a few of the senior management in finance to set up a plan for growth potential which will provide a benefit to the employees. This team will have three months to report back to the CEO about ways to compensate employees of the organization and attract new clients using existing tool and new services. By the end of six month, this group will present solution to the CEO about the business salary grades in the market and identify any risks involved by not implementing any compensation / reward system. Riordan will also offer existing employees an opportunity to train for a different position in the company and help the employee who may want to learn/work in other position to better themselves. This could be used as a way to motivate employees and retain them at the company. By implementing this plan, it will show the employees the company care about them.
Evaluation of Results
ItÐ²Ð‚â„¢s important to build a solid foundation for employees so they feel invested in the company. Riordan will explain the objective of the change in business and the vision the company is heading. The Management team will survey the employees to ask them about their expectations and career goals, plus how you can help them feel part of the team. Riordan Manufacturing will offer people incentives to perform well, either with something small like a gift certificate or something more substantial such as a performance-based bonus or salary increase. The company will give out Ð²Ð‚ÑšEmployee of the MonthÐ²Ð‚Ñœ awards and come up with other awards to match employees. Such tokens of appreciation will go far in motivating employees.
Many organizations acknowledge that talent, if aligned with business strategy will help when implementing changes. Ð²Ð‚ÑšCompanies often say that people are their most important asset. And like any asset, people appreciate most in value when managed appropriately: with rewards programs that align their own best interests with doing what is best for the business. Riordan Manufacturing has taken the steps towards identifying process to help guide them in improving employeesÐ²Ð‚â„¢ perception of the company as well and aligning their reward strategy effectively. While this may not be an easy task to implement, the fact remains that the company understands that something must be done. Compensation strategies stated that Ð²Ð‚ÑšToday a good compensation plan within the context of a total reward system provides a method for reinforcing the value-added contributions of each individual through the application of his or her talents, the growth of their capabilities, and the outcome of their actions consistent with the key success factors of the organization. While specific compensation plan designs will vary according to company and industry, and be based on culture, management style and overall objectives, the basic outcome should remain the same- increased retention of valuable employees, and increased satisfaction of all stakeholders.Ð²Ð‚Ñœ
Organizations change all the time, as do people. Indeed, an ongoing process occurs to sustain an environment where each employee can strongly motivate themselves. If one looks at sustaining employee motivation as an ongoing process, then one will be much more fulfilled and motivated (McNamara, 2007). Riordan Manufacturing can create a comprehensive plan based on investing in employability and retention. Riordan Manufacture is focusing on quality-improvement teams and a commitment-building program creating resurgence for financial incentive of paying for performance. Organizations adopt reward systems to increase competition and retain good employees. Michael Riordan is focusing his effort on showing employees the company care, listens, and wants to improve so worker will be happy to work for the company. Sometimes it helps to think of an organization as a network of returns created by all these different forms of pay, including total compensation and relational returns. The challenge is to design this network so that it helps the organization to succeed (Milkovich & Newman, 2004).
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