Gap Analysis: Riordan Manufacturing

Running head: GAP ANALYSIS: RIORDAN MANUFACTURING

Gap Analysis: Riordan Manufacturing

Marlene Elizabeth Fain

University of Phoenix

Gap Analysis: Riordan Manufacturing

Restructuring Riordan's Organizational Human Capital

Development and Reward Systems

Strengthening customers' relations begins with organizational alignment and if seeds of discontent are operating through out the company then alignment is in jeopardy, as is the case with Riordan. The issues stem from Riordan's reward systems currently in place and the means by which they develop their human capital assets.

The opportunity for Riordan is to explore the varied sources of job dissatisfaction that became apparent when the winds of corporate change became imminent. Aligned organizational change should have been in operation but it was not. This paper will explore the gap between Riordan's organizational performance and the reward systems in place that impact the performance and motivation of Riordan's human capital. "We can not solve problems by using the same kind of thinking, we used when we created them" (Albert Einstein).

Organizational strategy 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 equally reward and motivate employees with different needs also deserve consideration. The company recently conducted an annual employee survey, which showed a decrease in overall job satisfaction, particularly in the areas of compensation and benefits. 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. (Riordan Scenario)

Based on these conversations the value of employee benefits and organizational reward systems based on employee organizational performance are precepts that operate in tandem. However, performance measures such as productivity or profit related to the performance of a group have been of less importance in determining pay increases. It is increasingly recognized that performance and skills criteria need to be injected into pay determination; that it cannot be achieved through centralized or macro-level pay determination; and that changes have to be negotiated at the enterprise level.

Situation Analysis

Issue and Opportunity Identification

The issues stem from Riordan's reward systems currently in place and the means by which they develop their human capital assets.

The opportunity for Riordan is to explore the varied sources of job dissatisfaction that became apparent when the winds of corporate change became imminent. Additionally, the opportunity for Riordan to realize and accept that organizational performance, compensation and employee recognition are interconnected and then acting upon that realization investigating ways and means of improving, motivating and empowering employee performance and providing rewards that create win-win for the company and their employees. Employees invest in education and training; they contribute their time and energy at the workplace. Compensation is their return on those investments and contributions. (Milkovich−Newman). A change in the organizational structure to meet the needs of the business plan may affect the climate of the organization, succession planning may require changes in the design of the organization and of specific jobs, plus changes in supporting human resource systems, such as staffing, career planning and information