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Problem Solution Riordan

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Autor: 24  •  July 5, 2011  •  4,185 Words (17 Pages)  •  872 Views

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Problem Solution: Riordan Manufacturing

University of Phoenix

Problem Solution: Riordan Manufacturing

The current globalization process has changed the game rules for thousands of organizations. Everyday changes in the economy, customer needs or customer wants, require organizations to adapt and modify their structure. Riordan Manufacturing is part of Riordan Industries, a Fortune 1000 enterprise with more than $1 billion in revenues is one of the top plastic producers. Even though it is one of the biggest protagonists in the market Riordan currently suffers internally. Its continuous to increase in turnover, decrease in employee performance and productivity, decrease in sales and low morale in stakeholders has alerted Michael Riordan and his leadership team. Because of diverse theories about what caused the problems, Riordan’s management hired Human Capital Consulting to conduct an analysis on employee satisfaction to obtain objective information from its stakeholders. With the audit results, Riordan’s management plans to generate a solution may resolve part or most of their troubles.

This text will provide the reader with an idea of the current situation presented at Riordan Manufacturing, its stakeholders, and an alternative solution, how to implement it and how to evaluate its results.

Situation Analysis

Issue and Opportunity Identification

Many companies believe that a person’s need for a job is enough reason for them to stay in the organization. The truth is that people are not as brainless as many employers think, and companies need to have a good compensation and reward system if they want to keep their employees. Retaining those employees is one of the principal tasks of management. "The old paradigm says that your primary focus should be keeping your customer happy. The new paradigm says the employee has taken over that spot. Keep her engaged and she'll keep your customers happy. Neglect her needs and she won't be so concerned about keeping her end of the bargain. In the end, not only will she go elsewhere, your customers may follow suit" (Sujansky, 2007).

Riordan Manufacturing is having internal issues such as decrease in sales, lowered morale, increase in voluntary turnover, and employee dissatisfaction just to name a few. And even though some of the leadership team believes the company needs to increase employee’s compensations, there are others that refuse to restructure the current compensation system stating that the problems are based on something different such as job design. In the search for the correct answer Human Capital Consulting was hired to conduct a satisfaction audit evaluation of all employees. The audit results showed the discomfort within employees in the areas of compensation, career opportunities, performance recognition and benefits. They think the company’s compensation system is not competitive against the industry’s standard and because of it they need to look for new opportunities elsewhere. They believe that pay is tied to seniority and not to work performance, which increases employees’ discontent. At the same time these situations and feeling have worried the leadership team. They know that if no change is made they may lose key people, a phenomenon that has already started to happen.

One good thing for Riordan’s leadership team is that it is not too late for them to generate a solution. There are several ways to increase employee satisfaction apart of a simple pay increase that will only resolve part of the problem. Most employees only want their performance to be recognized more often, they want to feel valued, and to have more career opportunities within the organization. This shows that they still have commitment towards the company and shows that they still want to be part of the organization. The business dictionary website defines job satisfaction as “Contentment (or lack of it) arising out of interplay of employee’s positive and negative feelings toward his or her work” ( Sujansky founder and CEO of KEYGroup also said about retaining key personnel “it isn't always cash that makes green pastures green. When salaries are commensurate with the marketplace, other factors take priority. Good people stay where they are challenged, where they have the opportunity to develop and contribute, and where their employers take care of those meaningful little things that make their lives easier”.

Stakeholder Perspectives/Ethical Dilemmas

There are different points of view about the problems inside Riordan Manufacturing. Michael Riordan founder, President and CEO believes that the company takes good care of its employees and this will help the organization to solve the current motivation problem. However, leadership team members like Kenneth Collins Senior Vice President of Research and Development or Maria Trinh Director of Human Resources are worried about the increase in voluntary turnover caused by an inadequate compensation system. They know the company can’t afford to lose more key staff members. Others like Hugh McCauley Chief Operating Officer or Dale Edgel Chief Financial Officer believe the problems inside the organization are not based on the compensation system but factors such as job design. Other employees also have their own point of view about what is happening at Riordan, and they expressed their dissatisfaction. Human Capital’s audit demonstrated that their morale is low and their reasons vary from poor performance recognition, no competitive pay rate against other organizations, lack of career opportunities and/or training, and also reprehensible reward system. Employees want to feel they are an important part of the organization, and because of it they need to be treated equally with a competitive compensation system and rewards for their work.

Problem Statement

Riordan Manufacturing will increase revenue and productivity by developing a competitive compensation and reward system focused in employee satisfaction and retention.

End-State Vision

Riordan Manufacturing will maintain its strong name and presence in the market as a global plastic producer. The development of a more satisfying compensation and pay system will lower turnover


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