Problem Solution: Riordan Manufacturing

Running head: PROBLEM SOLUTION: RIORDAN MANUFACTURING

MBA530 Final Paper

Problem Solution: Riordan Manufacturing

Keith Todd

University of Phoenix Online

MBA530

March 26, 2007

Instructor: Michael Geraghty

Problem Solution: Riordan Manufacturing

The objective of this paper is to demonstrate a systematic approach using the 9-step Problem-Solving Approach to provide Riordan Manufacturing with valid solutions to their challenges. In addition, this paper identifies opportunities and issues, defines the problem, and develops a set of alternative solutions. In conclusion, this paper recommends the paramount alternatives to implement in order for Riordan Manufacturing to be the global industry leader in plastics production.

Situation Analysis

Wholly owned by Riordan Industries, Riordan Manufacturing is the industry leader in plastics production with projected annual earning of $46 million. Riordan's customers include the Department of Defense, automotive parts manufacturers and beverage makers and bottlers. Recently Riordan changed their strategic objectives and implemented changes in their manufacturing and marketing practices that resulting in declining sales and uneven profits over the past two years.

In efforts to rectify declining profits, Riordan Manufacturing changed the company's strategic direction. First, Riordan changed its sales process to a customer-relationship management system resulting in a change from a single salesperson to a sales team, which provides the customer with a team of sales associates to address various customer segments in expectations of improving declining sales. Secondly, Riordan Manufacturing implemented a Six Sigma quality approach and certified ISO9000 after redirecting work to its new manufacturing facility in China. Disappointingly this resulted in a decline in employee retention and overall job satisfaction, particularly in compensation and benefits. Riordan Manufacturing must address these issues with human resources (HR) and implement a restructure of current compensation and reward system and develop a performance appraisal process.

Issue and Opportunity Identification

There are several challenges Riordan Manufacturing must overcome in order to accomplish the company's organizational goals. One challenge is overcoming employee job dissatisfaction, which declined as part of Riordan's restructuring process. Another challenge is increasing employee retention, which declined due to less than optimal working conditions and minimal personal opportunities to develop and advance. Finally, Riordan Manufacturing needs to overhaul the current flawed reward system into an effective rewards system that aligns the organization's strategy with compensation and incentive packages.

Moreover is employee development and training. Riordan has done a small amount of promoting or developing their employees in past years and a key strategic advantage for organizations is to make available the means for employee growth and development. Hence, training and development not only helps to attract top performers but will also provide incentive for retention (Dreher & Dougherty, 2001). Therefore, in efforts for Riordan to realize and gain strategic advantage in the area of human capital, a superior human resource management system must be in place (Dreher & Dougherty, 2001).

One approach to motivation is identifying what motivates employees to choose certain behaviors. In the case of Riordan, the employees' needs are not being met. The employees do not feel valued and employee retention is an issue at the organization. Maslow recognized that people are motivated simultaneously by several needs, but behavior is mostly motivated by the lowest unsatisfied need at the time. As the person satisfies a lower level need, the next higher need in the hierarchy becomes the primary motivator. This is known as the satisfaction-progression process. Even if a person is unable to satisfy a higher need, he or she will be motivated by it until it is eventually satisfied (McShane-Von Glinow. 2004).

Maslow's hierarchy of needs assumes people are motivated to satisfy five levels of needs. The five needs are (1) Self-Actualization, (2) Esteem, (3) Belongingness, (4) Safety (5) Physiological (McShane-Von Glinow. 2004). Employees' will move up the hierarchy to satisfy their needs and when satisfied at a level, they no longer motivated by that need. Riordan must start evaluating employee motivation and satisfying employee needs. Then the firm has the means to continually develop and grow into a successful global competitor.

Riordan's management may also concentrate on employee motivation by identifying why employees choose certain behaviors to satisfy their needs. Expectancy Theory of Motivation holds that people are motivated to behave in ways that produce desired combinations of expected outcomes" (Krietner & Kinicki, 2003). Vroom's theory assumes motivation is determined by one's perceived chances of achieving valued outcomes. Vroom's expectancy model of motivation reveals how effort/performance expectancies and performance/outcome instrumentalities influence the degree of effort expended to achieve desired (positively valent) outcomes (Krietner & Kinicki, 2003). Furthermore, Porter and Lawler's expectancy theory of motivation model of expectancy expanded upon the theory proposed by Vroom. This model specifies (1) the source of people's valences and expectancies and (2) the relationship between performance and satisfaction (Krietner & Kinicki, 2003).

Riordan's managers can apply the basic theories of expectancy by connecting employees' desired outcomes with the organization's desired performance. In addition, Riordan's managers must influence employee behavior with the organization's reward system. Additionally, Riordan's management is failing to give recognition for good employee performance and need to develop an effective coaching and feedback plan. Performance management systems are a process of ensuring that employee' activities and outputs match the organization's goals (Noe, Hollenbeck, Gerhert & Wright, 2004).

The activities of performance management include specifying the tasks and outcomes of a job that contribute to the organization's success.

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