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Gap Analysis: Riordan Manufacturing

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Gap Analysis: Riordan Manufacturing

In order for an organization to achieve the highest-level performance from its employees, it is important to understand what motivates the employee. The motivation and reward that an employee needs from their employer and what his or her employer may be offering them most times will have different measurements. Higher employee motivation will lead to greater creativity, productivity, high morale and minimal turnover within an organization. Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earnings of $46 million. Recently they made several strategic changes in the way it manufactures and markets its products and there has been a decline in sales and profits. Many internal changes have been made and there has been a consistent drop in employee satisfaction and an increase in voluntary terminations. If something is not done quickly to improve the structure of the organization, the entire organization will feel even more loss. In order to keep up with the competition, Riordan Manufacturing must implement changes immediately. This paper will address the issues and opportunities within Riordan Manufacturing, the stakeholder groups and the interests, rights and values of each group, the end-state vision that will allow Riordan to know it has achieved its goals and will include a gap analysis of what will need to change not only to improve human resource practices but to give Riordan Manufacturing a sustained competitive advantage (SCA) in the global marketplace (Dreher& Dougherty, 2001).

Situation Analysis

Issue and Opportunity Identification

Riordan Manufacturing has been experiencing many issues that have been affecting the internal and external organization. The following issues have been identified and analyzed to create opportunities for a quick strategy to pinpoint where change needs to be implemented. These changes, therefore, will "encourage behaviors that are compatible with organizational goals" (Dreher & Dougherty, 2001). Each of these issues will present opportunities for Riordan to learn and develop new strategies.

Employee retention is dwindling. It is evident that employees are leaving for higher pay and better job satisfaction. It has been brought to light that Riordan may not be paying what is the market average for a similar position in the industry. This is also a major concern for the research and development (R&D) department because they do not want to lose a key employee with vital company knowledge. Riordan can design more effective compensation packages and learn better retention methods to gain a leading edge on their competitors. The organization with the best recruitment and retention plan wins.

The employee incentive and satisfaction program is an issue for both management and the current employees. Currently, the sales incentives are structured around an individual rather than a team and this issue has come about as a result of the change in the sales approach from individual accounts to a team approach. Employee satisfaction has declined in the past year. Employees are not feeling challenged due to lack of direction of the company's goals. Riordan can implement a strategically aligned incentive program to motivate employees to stay and achieve employee satisfaction. "Good HR practices include establishing a variety of incentives oriented toward a long-term organizational focus" (Dreher & Dougherty, 2001). "Satisfied employees will promote a positive organizational climate and lead to increased productivity for Riordan" (Dreher & Dougherty, 2001).

Employee training and development is another issue facing the internal organization. Riordan has done very little to promote training and development of its current employees. This would definitely be a strategic move for the company because not only will it help to attract candidates from competitors and retain current employees but it will also attract individuals internationally. Riordan implemented a Six Sigma quality assurance system and is ISO9000 certified. The company has three facilities which include Michigan, California and China. By having an internal brand of continuous employee training and development, Riordan will gain a competitive edge world-wide.

Riordan currently has a very ineffective HR department. The entire company needs to partner with HR to build a performance brand. Riordan needs to determine the strategic impact of HR issues on organizational effectiveness. Industry benchmarks need to be demonstrated to senior management showing how other businesses have tackled this internal situation. Riordan can build an exclusive work culture by integrating business situations and employee needs. The management team must align the company goals with the HR department. "HR practices must be integrated and aligned closely so that they reinforce each other and encourage behaviors that are compatible with organizational goals" (Dreher & Dougherty, 2001).

Stakeholder Perspectives/Ethical Dilemmas

Stakeholder perspectives and the ethical dilemmas that each group may encounter is a very crucial part of the success of an organization. Michael Riordan has a tough job ahead of him assuring that all stakeholders involved experience their expected long-term growth and financial success of the company.

The investors/stockholders have seen investments declining over the past two years. This group expects Riordan to find ways to improve the current sales slump because they want a respectable rate of return on their investment. This group of individuals/companies is the foundation to the success of the financial side of Riordan. Michael Riordan should be investigating many alternatives for ways to strengthen the company financially.

The company has 15 to 20 major customers, including a government contract for fans. The firm also has 12 minor customers. This stakeholder group wants top quality products at competitive prices from a reputable company. It is Michael Riordan's pledge to his customers that they will be satisfied with the sales and services of products offered. The internal issues that Riordan is currently facing must not affect the level of quality and service that they have learned to expect.

The employees of Riordan Manufacturing are dissatisfied with their jobs. They expect



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