Riordan Manufacturing

Running head: GAP ANALYSIS: RIORDAN MANUFACTURING

Gap Analysis: Riordan Manufacturing

University of Phoenix

Gap Analysis: Riordan Manufacturing

Riordan Manufacturing has presented several interesting issues that need to be addressed within the current HR system. This will provide an opportunity to discuss how organizations can effectively show their employees that they are valued by providing competitive compensation, benefits and incentive programs, individual performance rewards and recognition systems, creative and flexible job designs, and career development programs that incorporate managerial coaching and peer mentoring. The other opportunity that will be examined is the demographic factor that plays into every organization. As American organizations prepare for 76 million Baby Boomers to retire these management level positions will need to be filled. "Succession planning would likely represent a key component of any good-quality career system" (Dreher, 2001, p. 33). The following will walk through the issues and opportunities, various stakeholders, end-state goals, as well as the gap analysis.

Situation Analysis

Issue and Opportunity Identification

Riordan Manufacturing has several HR issues in various departments at all of their domestic locations. Some of the key concerns that management embroiled in is low employee morale, declining motivation of key engineering, programming and sales positions, poor incentive programs rewarding individual achievements in a team based approach, underpaid departments compared to industry standards, rewards systems severely lacking, promotion selection tainted by politics, non-existent career pathing, and perhaps of greatest concern is the dysfunctional HR system. These issues cab be resolved with the right commitment from management and the right direction from the consulting firm.

Riordan Manufacturing still has some lofty revenue goals of $50 Million. They are in the midst of a major CRM rollout to help manage the 15-20 major customers and 12 minor customers. Riordan has implemented a Six Sigma quality approach and has become ISA9000 Certified. They have a new sales model endorsing a team approach for their major customers. The IT department has several major redesigns in the works. The R&D department has three major product introductions coming up. Some work has been redirected to the new facility in China and these changes have provoked an increase in employee turnover and decreased morale.

Riordan has contracted with Barbara Masterson of Human Capital Consulting. Barbara's role is to interview key management personnel, review past employee surveys, review compensation and benefits programs, evaluate existing rewards and motivation techniques, observe current processes and HR systems, and make recommendations for a new HR system that will dramatically enhance the organization.

Riordan can improve employee morale and potential turnover by re-evaluating the organization's reward system and compensation structure. "Job performance will likely be most effective when the person's temperament, preferences, and expectations are congruent with the Organization's reword system" (Dreher, 2001, p 24). Riordan can create an incentive plan for key engineers that are tied to completing projects. "We expect our pay systems to enhance our employee's motivation and therefore their productivity" (Dreher, 2001, p 77). Riordan has an opportunity modify its pay scale in IT to move from lag market to meet or lead market. "Employee dissatisfaction would result from failure to match competitor's pay rates" (Dreher, 2001, p 79). Riordan can improve the team based incentive pay structure for new sales teams. "Group oriented plans can motivate employee behaviors such as cooperation and teamwork" (Dreher, 2001, p 91). Riordan has a diverse demographic population made up of Baby Boomers, GenXers, and GenYers. They can customize the compensation, rewards and incentive plans to fit the different demographic segments of the employee population. "Preferences are notoriously unstable and change with the economic and personal conditions that people face" "Low-income employees rank flexible work schedules, paid time off, and benefits as their top three preferences; for those over 50, above average total cash ranks highest. The under-30 crowd rank opportunities for advancement, skill development, and flexible schedules the highest." (Milkovich, 2004, p. 41).

Stakeholder Perspectives/Ethical Dilemmas

Michael Riordan, CEO wants the value of his investment to increase as he nears retirement. He is 60 years old and has spent his lifetime building this organization. Michael is an 80% majority stockholder and believes that his organization has a reputation for taking care of the employees and rewarding loyalty. After meeting with the executive management team and reviewing their concerns Michael is unwilling to move forward with any changes to the compensation system until they have an HR consultant analyze the issues raised by the employees in their surveys. One conflicting issue maybe that Michael believes the younger generation, the GenXers and GenYers are ungrateful and don't realize how good they have it. "Western researchers have concluded that generational groups of workers have different work characteristics and prefer different leadership styles" (Yu and Miller, 2005).

The executives are fighting for their various departments' employees and want to make sure the employee morale and motivation don't deteriorate to a point of mass exodus. "In addition to treating pay as an expense, a manager also uses it to influence employee behaviors and improve organization performance. The way people are paid affects the quality of their work; their attitude toward customers; their willingness to be flexible, learn new skills, or suggest innovations" (Milkovich, 2004, p. 5). The executives realize that the future success of their major projects and sales is dependent

upon the tenured employees already in place and if Riordan loses some key engineers or programmers is will be a big setback to those projects.

The employees at all 3 domestic plants are discouraged with the HR system's ability to make them feel valued as employees. There is a lack of career information and development. Employees want effective coaching and feedback and they want to know

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