Problem Solution: Riordan Manufacturing

Problem Solution: Riordan Manufacturing

Currently Riordan Manufacturing is facing issues that could lead to the demise of the company. The company represents a major opportunity for the Human Resources department to step up and shine through. The purpose of this paper will be to explore the issues facing Riordan Manufacturing and decide what alternatives are necessary to ensure that the company meets its end-state-vision.

Situation Analysis

Issue and Opportunity Identification

The most important part of finding a solution to a problem is correctly identifying the situation and being to view them as is to look at them positively as opportunities. The current issues facing increasingly high employee turnover rates resulting in dwindling organizational commitment from employees, limited communication with its employees, an out of date compensation system, unequaled fit for workplace and organizational systems, and an underestimation of the connection needed wit the HR department. The change to a team-orientated sales has created an issue so fair and adequate compensation of individuals within the team and separately (Dreher and Doughert, 2001).

Riordan Manufacturing is struggling with how to decide on the changes in its compensation system. There are several pay/compensation options available. Variable pay utilizes types of compensation aimed at accommodating various departments in the organization. Variable pay options Include risk pay, team pay, broadbanding, commissions, garnishing, performance pay, skill based pay and knowledge based pay.

As the needs and mandates of the employees change the organizational accommodations must change as well. Previously employees have been understanding and cooperative with wage concessions. The steady decline in employee satisfaction and benefits must lead the human resources department to reevaluate intrinsic and extrinsic motivators to accurately assess how to compensate employees. Management must begin to develop strategies for generating motivating its workforce. These strategies will help to combat employee feels of being inadequately paid, unappreciated, unacknowledged and no longer will to contribute without seeing the process of change (Dreher and Doughert, 2001).

Employee training and development is lacking. This is important because it provides employees with the tools and skills that bring current operation to maximum efficiency and allows for easier succession planning. Employee performance appraisals are not done on a consistent basis. Without this gauges of work and performance employees have no feedback on their work and cannot be used to offer any acknowledgement, recognition or rewards for their work. Employees may also pick up on the non-uniformity among senior and upper level management. This can cause uncertainty about their place in the organization, confusion about completing tasks and questioning of authority.

Stakeholder Perspectives/Ethical Dilemmas

The issue of compensation is being viewed from many different perspectives. The senior leadership of Riordan Manufacturing shares a common view of the employee satisfaction and compensation issues. Where they differ is on how much and what kind of attention should be given to the issues. The divergence is based on varying reasons. CEO Michael Riordan believes in treating employees fairly and that organizational loyalty, identify and commitment are the key to motivating employees. As majority stockholder he must also be concerned with his investment in the company and return after a retirement that is not far off. These factors make him uncertain of how to address the issues of rectifying employee satisfaction and motivation issues through changes in the compensation system. COO, Hugh McCauley, agrees that dwindling employee motivation, resulting from low employee satisfaction, can be best solved by changing the job design process. Turning the focus from compensation over to rejuvenating motivation through improvements in the “poorly designed processes” is necessary. Dale Edgel, CFO does not see an issue with the compensation system currently in use by Riordan Manufacturing

It appears that other upper level management is skewed on their view of how to handle the issues. Kenneth Collins is very concerned with losing critical member of the research and development department due to inadequate compensation. Maria Trinh, CIO, shares this concern of IT professional on her staff. Both departments are in the midst of major projects. Charles Lacy, V.P. of Sales and Marketing is very proud and settled with the changes made to the sales process including the change to team performance based compensation. Yvonne McMillan is the Director of Human Resources and the voice