Riordan Manufacturing

Problem Solution: Riordan Manufacturing

Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earning of $46 million. Production is divided among three plants in Albany, Georgia, Pontiac, Michigan, and Hangzhou, China. Research and Development is conducted at corporate headquarters in San Jose, California. The company's major customers are automotive parts manufactures, aircraft manufactures, the Department of Defense, beverage makers an bottlers, and appliance manufactures.

Declining sales and uneven profits over the past two years has forced the company to change it sales processes and prompted them to adopt a customer - relationship management system. Customers are now serviced primarily by sales teams rather than single salespeople. Teams include a salesperson, product engineering specialist and customer service rep. The idea is that a team approach will improve sales.

Riordan has a diverse employee make-up and recognizes the importance of innovation, teamwork and providing customers with new products but fails to adequately consider employee motivation and rewards.

Situation Analysis

Issue and Opportunity Identification

Due to inadequate compensation management is concerned there will be a loss of key employees in the research and development and information technology department. Other managers believe job redesign and team approach is the best approach to motivate employees and achieve success. Riordan's Director of Human Resources believes she has been treated as nothing more than a personal manager. She conducts the annual employee surveys but has never seen any changes implemented as a result of the surveys. The CFO, Dale Edgel, believes the current compensation systems are adequate. The CEO is concerned with a loss of share value with the retirement on the horizon.

The implementation of change in manufacturing and marketing went from an individual approach to a team approach. The adoption of the customer-relationship management system has been met with skepticism among employees. Rewards are no longer based on individual performance but on the team's performance. Riordan Manufacturing will need to communicate to the teams the incentives and commission can be fair. Incentives can be tied to the performance of an individual employee, a team of employees, a total business unit, or some combination of individual, team and unit (Milkovich & Newman, 2004). The resulting increased turnover, decreased sales and decrease profit are evidence of poor employee motivation and satisfaction. Motivation Ð'- the willingness to exert effort in a particular way Ð'- is an extremely important factor in understanding or predicting employee behavior (Dreher & Dougherty, 2001). Riordan must identify the underlying issues that are leading to decreased employee satisfaction and recommend potential courses of action to address those issues.

Stakeholder Perspectives/Ethical Dilemmas

The key stakeholders include stockholders, senior management, employees, and customers. The increase in profit is contingent upon strong research and development bringing out new products to meet customer demand. The employees contributing to the success must be sustained through a comprehensive benefits and reward system. This will help with employee motivation which will increase productivity to meet the customer demand. If Riordan fails to act quickly, there will be loss of top talent, loss of profit, and adverse impact on future recruitment. Riordan will be known in the manufacturing industry as a company that does not value the employees. By recognizing employee needs and implementing programs to support those needs, employee satisfaction will increase.

Problem Statement

Riordan Manufacturing will become a leader in the plastic manufacturing industry, one who identifies employee needs and is responsive to those needs.

End-State Vision

Riordan Manufacturing has an opportunity to become a profitable business that retains top talent. Riordan has the opportunity to become a company who values employees through reward programs. Opportunities for Riordan Manufacturing include becoming a leader in the plastic manufacturing industry, reducing employee turnover rate, implementing a reward system to meet employee's needs, and expand the Human Resource Department and provide trainings to the employees.

Alternative Solutions

Riordan Manufacturing has numerous options available to achieve desired goals. Through the development of an employee satisfaction survey, Riordan Manufacturing can address the needs of the employees. Developing a comprehensive training and development program for employees to learn the customer-relationship management system (CRM) program, the development of a human resource department and development of compensation and rewards programs the goals Riordan has set before them will be achieved. Through retention of valued employees of Riordan Manufacturing will lead the company into the expansion and market position desired. Current employees will need strong leadership direction and training opportunities to effectively work within the new customer-relationship management system. The human resource department will take a leading role in the transition to become an industry leader.

Through the process of benchmarking human resource best practices, alternative solutions can be identified for Riordan Manufacturing. Riordan Manufacturing can implement similar strategies proven to be successful for other companies. To manage change effectively in a competitive environment Riordan Manufacturing must appropriately gain employee support for the CRM system, train employees, and communicate that the company cares for employees. Riordan can do this through providing a comprehensive compensation and rewards program thereby increasing motivation, productivity, and retention. MotivationÐ'--the willingness to exert effort in a particular wayÐ'--is an extremely important factor in understanding or predicting employee behavior. It is a factor that often responds to changes in HR systems, particularly reward systems (Dreher & Dougherty, 2001). Employees committed to the company's mission while meeting the demands involved with organizational change will support continued growth. This large-scale organizational change involves an effective human resource department to effectively manage leadership, employees and the environment of the workplace.

An assessment of employee satisfaction will help with employee moral and in turn decrease