Riordan Problem Solution

Issue and Opportunity Identification

Several employees have recently complained that they are underpaid and have expressed the need to have their salaries revised. In fact, some employees, especially within the IT department, have been approached by recruiting firms which seem to be offering much more competitive salaries. As for the R&D department, there is also a strong concern that they might loose several key product engineers to other companies that also offer much more competitive salaries.

Riordan has been given the opportunity to hear what their employees are saying and feeling and then conduct several industry and benchmarking studies to determine the root cause of these issues. By examining the organization’s “external competitiveness” (Dreher and Dougherty, 2001, p.80) and then comparing internal job roles to the market, Riordan will be able to better evaluate the need for possible adjustments. This will also allow Riordan to reach a fair compliance level as it relates to their internal pay system by conducting benchmarking studies and administering pay surveys to obtain “comparative market data” (Dreher and Dougherty, 2001, p.80).

There have also been several complaints towards the fact that pay and compensation are not necessarily linked to performance but more to seniority. In certain cases, performance reviews aren’t even being conducted as this has led to a great deal of unfairness and inconsistency within the organization. Riordan needs to rethink and redesign its rewarding and compensation process in order to maintain fairness and consistency amongst its employees while rewarding individual performance. By maintaining “internal consistency” (Dreher and Dougherty, 2001, p.82) and enforcing a robust “performance-contingent” (Dreher and Dougherty, 2001, p.88) pay structure, Riordan will be able to encourage individuals to stay motivated and perform extra efforts over and beyond their required tasks.

Another concern that has substantially impacted Riordan is the fact that many employees no longer feel motivated to perform or even remain with the company as a result of little opportunity for development or advancement. Furthermore, many employees don’t even feel valued or recognized for their good performance and promotions, if any, are often done secretively and selectively. The company needs to implement a strong career development plan based on meritocracy, as well as “succession planning” (Dreher and Dougherty, 2001, p.33) systems, and mentoring programs. In turn, this will allow Riordan to foster an open-door policy and remain as transparent and unbiased as possible when promoting individuals.

Stakeholder Perspectives/Ethical Dilemmas

There are four major stakeholders groups that relate to Riordan Manufacturing, which are the executive management team, the company’s employees, the hired consulting firm and of course Riordan’s customers. It is fair to say that each of these groups certainly hold certain interests and values and well as certain obligations and rights. As for the management team, they hold interests in increasing sales and profits as well as sustaining a strong competitive advantage and market share. Moreover, they are concerned with keeping employees motivated and reducing turnover as much as possible while exercising continuous respect, fairness, and accountability towards all their actions and those of the organization they represent. When it comes to the employees, they are concerned with job security, fair/competitive salary and pay as well as the opportunity for personal growth and development. They are also