Riordan Manufacturing

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), “General 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 implemented” (p. 133).

Situation Analysis

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.

Riordan’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.

Problem Statement

Riordan Manufacturing aspires to enhance the way the company’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