Riordan Manufacturing has come across some concerns and issues with the employees. Employee motivation and retention has become an issue within the company. Riordan’s human resources processes are prohibiting the empowerment of employees, delaying potential growth due to unbalanced profits, and a decrease in sales. The human resources department needs to address these concerns because if they do not address these current issues, the company will not be able to continue their business strategy. The issues preventing logical human capital management is lack of employee motivation, a high turnover rate in strategic areas, the pay levels are below industry standards, and there is a lack of structure in the performance review process throughout the company. Riordan Manufacturing can work these issues out by creating a coaching and feedback process, planning career development programs, and updating pay for performance reward systems.
This paper discusses the opportunities that are available for Riordan to improve employee motivation and employee empowerment. This paper also examines the ethical dilemmas between stakeholders, which include the Chief Executive Officer (CEO) of the company, the senior management team, human resources, and the employees. Riordan Manufacturing used Benchmarking techniques to determine the best alternative solution for the situation. An Optimal solution was provided along with these issues, Riordan Manufacturing will position their company for a positive long-term growth by changing the employee culture.
Situation Analysis
Issue and Opportunity Identification
Riordan Manufacturing is a worldwide corporation that produces plastics. The organization has 550 employees on the payroll and their annual earnings were $46 million dollars. In the past few years, the company has shown a decrease in sales and unbalanced profits and this is causing Riordan to rethink their business strategy in the manufacturing and marketing areas. The human resources department is aware of these issues, but they have done little to correct the issues. As a result, the human capital is not meeting mandatory expectations. The areas of human resources issues Riordan is facing is lack of employee motivation, a large group of mid-level performance employees, a high turnover in strategic areas, pay level underdeveloped compared to industry standards in some areas, and there is a lack of structure in performance reviews.
Stakeholder Perspectives/Ethical Dilemmas
Each stakeholder’s perspectives need to have a full examination before any decisions can be brought to the table. Each stakeholder has different views and issues pertaining to the company, if these are not brought up properly this could lead to conflicting rights, and ethical dilemmas. The main stakeholders for Riordan Manufacturing are the CEO of the company, the senior executives, human resources, and the employees.
The first stakeholder is the CEO who is in charge of the entire company. The CEO is the person who is behind the corporate strategy, his main concerns with the company is the performance and services the company is providing to the customers and the employees. The CEO wants to maximize the market share by changing the structure of the organization. His right as the CEO is he can incorporate decision making to increase the potential the company has to provide trust and stability into their employees. The CEO of Riordan values the integrity, the welfare, and the personal gain the company can provide. The CEO’s obligation is to increase the client revenues, which will in turn increase market share. The decisions will come from the CEO because he is the founder of the company and even though he is entering retirement age he will still be the one to make the decisions on what will happen with the company. The CEO will listen to everyone’s needs and he will provide the adequate direction everyone will need to take in order for the company to increase in sales and decrease the retention rate. The ethical dilemma the CEO is facing is that the employees has expressed concerns about the compensation, he still believes there is nothing wrong in that area. As the CEO looks for ways for the company to continuing to grow, he also has to be concerned about his senior management team and his employees.
The next stakeholder is the senior management team. The interest of the senior management team is employee performance, increase company revenue, and attempting to be good leaders for the employees. The senior management team is their support the CEO and the employees with all decisions and to make sure there are available resources for both the employees and the CEO. The senior management team values the honesty, integrity, and personal gain each employee gives to the company. The ethical dilemma between the senior management team and Riordan Manufacturing is that the performance expectations of the teams will change because of the new vision of the company.
The next stakeholder is the human resources department. This area is separate due to the importance of human resources in increasing employee productivity, directly influencing corporate revenues. The human resources department’s main interest is employee performance and the morale of the employees. The human resources department believes the employees will be more productive if there were more promotions and employment recognition. The human resources department main rights are to provide employees with acceptable motivators. The ethical dilemma between the human resources department is that the human resources department has to me mindful of how many promotions are given out. The human resources department believed the employees deserve promotions but they don’t want them to outweigh the value given to the company.
The last stakeholder is the employees. The employee’s main interest is the jobs, performance opportunities, and employee recognition. The employees believe they have the right to be told what is going on with the company in a timely manner. The employees value loyalty, fairness, and reliability between the senior management team and human resources. Because Riordan is changing the strategy of the company, there is a lack of communication and employee motivation. The employees want to believe they are recognized as team players, so communication is a big concern within the company.
Problem Statement
Riordan Manufacturing will increase employee productivity by developing human resources tools needed to promote job satisfaction.
End-State Vision
Riordan Manufacturing will successfully increase employee retention rates and update human resources strategies and policies by offering value-added human resources benefits including effective feedback, coaching, career development and opportunities, and pay performance reward systems that reflect the corporate vision.
Alternative Solutions
In order for Riordan Manufacturing to achieve their end state vision, the human resources benefits must change. To accomplish this growth there are several solutions that can be applied; developing a coaching and feedback process between employees and supervisors, creating a career development programs, and updating pay for performance reward systems.
Riordan Manufacturing’s current feedback and coaching process does not occur often within the company and this is becoming an issue between the employees and their supervisors. According to the overview of the company, performance reviews do not happen often within the company and when they do happen, they are not very effective. The employees do not receive proper feedback from their managers so feedback is an important essential because it lets the employees and the supervisor knows how everything is going and what will be the strategy for improvement. Without a proper follow-up and review, employees may not understand what the expectation of them as employees is. In order for Riordan to motivate and retain human talent an effective coaching and feedback process must be put into action. This is will represent a challenge with the managers because it will be a change with the process. Employee behavior and effectiveness are influenced by ability, motivation, and opportunity (Dreher & Dougherty, 2001). Offering career development and training provides employees the opportunity for advancement and promotion, and motivates their employee performances. In order for Riordan to implement and maintain effective human talent, the career development will have to offer opportunities for the employee. This will be a challenge because there is no formal series plan in motion, and employees with seniority will start to feel threatened by younger employees who show executive abilities. Riordan will deal more challenges when they implement a mentoring program and training and development sessions. The mangers in each department are not familiar with mentoring and training their employees, all managers within the organization will have to have training on how employee recognition.
Riordan’s will need to update their pay for performance reward because their current system does not reflect Riordan’s new vision for the company. The current rewards system reflects the past business cycle and does not allow any opportunities for newer team members such as engineering or customer service. It also does not promote the current sales force to use the newly created team members. The rewards system is based on individual sales person’s performance as well as individual sales quotas, which is counterproductive to the new vision of a customer relationship management system. The rewards system also promotes team problems by only providing incentives to the salesperson and not the whole team. If an objective is to increase customer satisfaction, incentive programs and merit pay (techniques) can be used to pay for performance (policy) (Milkovich & Newman, 2004). In order for Riordan’s pay for performance to become successful, human resources must realign the pay for performance criteria so it meets the organizational strategy. The sales department will have to adjust to the new system because it will force the employees to learn to work in a team setting oppose to individual work. This is also going to be a challenge for the sales department because this will change the structure of the pay scale, so employees will receive benefits based on responsibility. The sales team also has concerns because going forward; their benefits will be based on a team environment. Other departments will also start to have concerns because other departments will not be receiving compensation like the sales department. Today’s service economy is forcing management to adapt and go beyond piece rate and sales commission plans to accommodate greater emphasis on product and service quality, interdependence, and teamwork (Kinicki & Kreitner, 2003). By updating the current goal accomplishment strategy will help increase the organizational effectiveness for Riordan Manufacturing going forward. Riordan will establish a bonus pay based on the amount of increased business per account as well as increasing overall sales. By changing the bonus plan for the sales department will reflect the factors that contribute to a long-term commitment to change and motivate the employees.
Analysis of Alternative Solutions
The above alternative solutions are possible resolutions that will be able to help support employee motivation for Riordan Manufacturing. The best alternative that Riordan can use is creating a career development program. The second best is developing a coaching and feedback process. The last alternative that Riordan Manufacturing can use to help with their issues are restructuring the incentive pay and comparing industry standards.
The first alternative is creating a career development program. This will help encourage the employees to work toward their goals, and to receive rewards for excellent work performances. As a human resources tool, this alternative is not a short-term fix, such as an alternative incentive pay. This alternative is a long-term option to encourage employees to have more motivation and encourage longevity within the company. This will help Riordan because they will be able to train human capital to meet long-range goals. Because the organization is facing a decrease in sales, and the capital may be inadequate, this alternative would mainly focus on what the employees want and need without a huge need of increasing pay. The next best alternative is developing a coaching and feedback process. This alternative is feasible because this will address the needs of Riordan as outlined by the employee survey, whereas a coaching and feedback process is essential to help the employees with better recognition between their managers. The employees will have knowledge of what their strong and weak points are in the workplace and what they can improve upon. The last best alternative is restructuring the incentive pay and comparing industry standards. This alternative is a good short-term option, but without the correct reviewing process, this could be looked at as a de-motivator for the employees. Additionally, incentive pay focuses on action-based performance with a focus on current industry standards. Incentive pay does not help mold employees for future needs. As Riordan Manufacturing is currently dealing with a decrease in sales, this alternative will also require a possible large outlay of cash.
Risk Assessment and Mitigation Techniques
Before implementing new procedures, a risk assessment will be carefully reviewed and mitigation techniques should be effective to minimize the potential risks in evaluating the proposed alternative. When creating a succession management program to enhance the human capital employed by Riordan Manufacturing brings about the risks of not able to apply this assessment to all employees. This may benefit the employees with seniority and are closer to retirement than the new employees coming into the company. There may be some employees with no intention on receiving a promotion or moving up in the company. This is a high-risk but could be overcome with the help from human resources. This also can be a high-risk because the past processes have been viewed as inadequate. Human resources will have to use proper communication methods so the information is properly given to the employees so they will have a better understanding the processes. Appropriate communication will also give the employees measurable expectations. These challenges can be resolved with the appropriate direction from human resources for both the employees and management.
Analyzing the alternative of implementing a coaching and feedback program brings risk as well because appropriate expectations need to considered for each department and managers must understand the expectations of the organization so they can share with the employees. Because of the history of lack of performance reviews, the impact on employee morale may not be significant. This challenge can be resolved with monthly reviews between the employees and their department heads. The coaching and feedback program also needs to incorporate employee feedback between employees and managers.
The third alternative of developing a sales compensation program that addresses the main beliefs of the organization’s vision brings about the risk of the short-term changes. Another risk pertaining to the new incentive program is that the sales team may not want to embrace the new corporate programs. Because the sales department is mainly motivated by personal gains, these are primarily low. However, this is a high severity issue because if Riordan want to continue to be in debt, these new programs are needed to generate revenues. If the compensation program does not reflect these changes, the sales department may not be willing to work with other team members to market the new programs because there will not be any incentive to do so. To lower the risk, the mitigation techniques that will be applied are involving the current sales employees in the development of the new goals and providing training of the new programs to the sales group. Allowing the employees to give their input for goal making and providing effective training of the new programs will help the sales employees understand and accomplish as well as drive the business toward the offering of new products. By allowing input from the employees will sustain positive points of the existing bonus offerings. Regardless of implementing this strategy, the company will receive huge benefits by incorporating these goals, which will over power the possible risks.
Optimal Solution
Riordan Manufacturing needs to develop a new process of succession management to motivate and retain employees. The occurrence of a career development program will bring many resources benefits to the organization. As earlier mentioned, Riordan Manufacturing has a concern with the lack of employee motivation, a large number of employees are performing at mid-level, a high turnover in strategic areas, the employees believe they are not receiving competitive salaries, and a lack of performance review feedback from supervisors. By selecting the optimal solution of creating a career development plan, four out of the five alternatives will be addressed.
In implementing a succession management program, employees will be able to show more motivation by having career opportunities and information, which was a focus group need according to Riordan’s employee survey assessment. This will be a high-risk because implementing a proper succession management program will require much effort on management. A high-quality career planning and succession management system will not be sustained unless those devoting time and energy to making it work are rewarded for their efforts (Dreher & Dougherty, 2001). Human resources will have to address these needs before implementation. Employee behavior and effectiveness are influenced by ability, motivation, and opportunity (Dreher & Dougherty, 2001). With the implementation of a career development program, employees will be more motivated to work toward their goals. Developing a career development program will also assist in managing employee retention. The IT department is one of Riordan’s concerns because senior management does not want the turnover rate to increase in this area so senior management will come up with a strategy to retain employees. Establishing this program will help motivate the employees because the company is in need of improvement. Employees are more likely to stay with firms that provide them with that they value (Dreher & Dougherty, 2001). The survey expresses this was a main issue brought up by the employees, and by providing this service turnover rates will decrease. If Riordan Manufacturing does not start training the employees to meet the needs of the company, the employees may start to look for employment with other organizations. Riordan will need to increase wages or redefine compensation to retain employees.
Implementation Plan
The implementation of the optimal solution will be a challenge, because Riordan Manufacturing does not have a career training and development program set-up. This solution will involve the organization changing the culture of human resources and management. It is important for the success of Riordan Manufacturing that human resources and management acknowledge the challenges and incorporates training before the rollout of any career development program. The first step of this process will to involve human resources and have them define the short-term and long-term needs of Riordan Manufacturing. In acknowledging these needs human resources will best be able to understand what type of training the employees will be need for growth. It will also create future needs for Riordan and allow management to identify employees with the desired skills. The obstacle will be for human resources to create strong reasonable expectations for all employees and to evaluate each department to find out what type of improvements are needed within the department. There will be a two month timeframe so human resources can effectively understand the department’s needs.
After this phase is over, management will attend a seminar regarding the appropriate way to evaluate and establish training and mentoring programs for the employees. Currently, management is not using any type of review program for the employees, so it will be a challenge to have management understands the importance of mentoring and making sure a career development in place. This will also help managers identify key employees with excellent work performance and will succeed within the company. A one month timeframe will be given so all managers can have the proper training on the appropriate information. As soon as the seminar is done, management will have one of first meetings with the employees to determine areas of improvement and opportunities. This will facilitate managers into understanding the desires and motivations of each employee. The obstacle will be finding time for management to meet with personnel. Prior management training should assist in receiving proper feedback, but past behaviors may make it difficult for the employees to trust what management has to say. A three month timeframe has been given because there are so many employees in the company. Once these processes are complete, management and human resources need to come together to come up with a win-win situation so everyone is happy. Riordan will have to have many incentives and programs set-up in place to help keep with employee motivation. This will also help human resources facilitate in which certain gaps are and where additional training may be needed. The obstacle will be in aligning employee needs and company needs to ensure all areas of the organization are evaluated. A one month timeframe will be available because human resources already have a base-line from the initial review. Management will meet with the employees to establish time-lines and expectations of human resources and employee goals. This will provide more feedback to the employees and with the shortened time-line will provide employees with assurance that the company is following up on communicated expectations. Because Riordan Manufacturing has a reputation for lack of feedback to the employees, the employees will see how the new process will have more feedback from the managers. The time frame for any additional feedback will be three months because vacation and sick time may interfere with the process. These steps will be examined annually to make sure the program is working effectively.
Evaluation of Results
The evaluation of the results is essential because it will determine the success of the alternative solutions presented. To evaluate the results, specific measurable goals must be presented to create a benchmark of expectations. Each step of the optimal solution will be measured to meet the needs. Riordan’s human resources department will define three main competencies of each of the departments within two months. To make sure effectiveness, these will have to be approved and agreed by the CEO and the senior level management. Once this phase is completed, the human resources department will commit to training the managers on the main behaviors and expectations as it relates to competencies. To ensure that the training is successful, the managers will have to take an assessment test to prove understanding of the course competencies. Within three months of training completion, Riordan Management will have met at least 90% of their goals with the employees. Once the task has been completed, human resources and management will establish three mandatory training sessions in each area.
The long-term effectiveness of the optimal solution will be measured by the employee survey with the regard to the job satisfaction, employee turnover, and by the performance of the employees. After six months, a survey will be presented to the employees for feedback regarding all the new processes and the current development and training strategy. In order for Riordan Manufacturing to be considered successful the human resources department must meet eighty percent satisfaction rating as it relates to job motivations. An employee turnover rate must be less than industry standards in order to be successful. A last of measure of success will be tied to Riordan’s performance output. The company must establish even profits to determine if the training courses were effective in job performance.
Conclusion
Riordan Manufacturing has determined that long-range success is based on employee retention and motivation. The current human processes are prohibiting the empowerment of employees, lack of growth due to unbalanced profits, and declining sales. If human resources management does acknowledge the issues making the motivation of the employees decline, the company will not be able to continue with their corporate strategy. The items currently preventing reasonable human capital management are the lack of motivation from the employees, a large group of employees performing at mid level, a high turnover rate in specific areas, employee’s not receiving competitive salaries, and lack of structure in performance reviews. Riordan Manufacturing can overcome these issues by creating a feedback and coaching process, planning career development programs, and updating pay for performance rewards systems.
References
Dreher, George, & Dougherty, Thomas, M. (2001). Human Resources Strategy. The McGraw-Hill Companies. Retrieved November 18, 2009 from University of Phoenix, eResource, https://ecampus.phoenix.edu/content/eBookLibrary/content/eReader.h
Dreher, George, & Dougherty, Thomas, M. (2001). Human Resources Strategy. Reward and Compensation Systems. The McGraw-Hill Companies. Retrieved November 18, 2009 from University of Phoenix, eResource, https://ecampus.phoenix.edu/content/eBookLibrary/content/eReader.h
Milkovich & Newman (2004). Compensation (8th edition). The McGraw-Hill Companies. Retrieved November 18, 2009 from University of Phoenix, eResource, https://ecampus.phoenix.edu/content/eBookLibrary/content/eReader.h
Table 1
Issue and Opportunity Identification
Issue Opportunity Reference to Specific
Course Concept
(Include citation) Concept
Riordan Manufacturing’s reward system is out dated and it is based on how long an employee has been with the company and cost of living rises as well as seniority and position. The reward system does not reflect the company’s current strategy. Riordan has the opportunity to evaluate the structure of their pay scale and have their pay scale to reflect the corporate vision The greater the alignment, or fit, between the organization and the compensation system, the more effective the organization (Milkovich & Newman, 2004).
Human behavior and organizational rewards systems.
Riordan acknowledged there was a large group of employees that were not performing at top level while conducting a review of performance data. In order for the company to exceed, human capital must perform at its highest capacities. Riordan has the opportunity to identify motivators in existing talent pools to increase productivity. Employees must be motivated if they are to perform behaviors such as high task performance, job seeking, attendance, or cooperation with others (Dreher & Dougherty, 2001). Motivation Theories (expectancy and equity).
Riordan is experiencing a high level of turnover in key areas such as R&D and IT. If the company loses these key employees, this could be damaging for the company. Riordan has the opportunity to offer incentive to the employees who show employee loyalty towards the company. To bind talent, an employer needs to think about finding out why talented people leave, offering incentives to keep talented employees, and offering non-financial rewards to stay (Dreher & Dougherty, 2001) Components of effective retention and career development processes
There have been several cases in the IT department where employees are leaving for better paying positions. Riordan does not have the adequate information to make sure their employees are being paid competitively. Riordan can establish the overall competitiveness of their salary offering based on industry standards One basic pay policy decision managers must make is whether to pay at (meet), below (lag), or above (lead) the market (Dreher & Dougherty, 2001). External competitiveness and setting pay levels
Table 2
Stakeholder Perspectives
Stakeholder Perspectives
Stakeholder Groups
The Interests, Rights, and
Values of Each Group
CEO Interests: Trust, company performance, customer relations
Rights: Maximizing revenue for the company, Decision making
Values: Personal gain, accountability, corporate welfare, integrity, honesty
Executive Management Interests: employee performance
Rights: available resources, open communication, doable goals, support from senior management
Values: honesty, corporate welfare, personal gain, integrity, and accountability
Human Resources Interests: employee performance
Rights: available resources, open communication, doable goals, support from senior management
Values: honesty, corporate welfare, personal gain, integrity, and accountability
Employees Interests: keeping their jobs and being paid competitively
Rights: available resources, personal development and training, timely communication from the executive team, and formal expectations
Values: corporate welfare, loyalty, integrity, personal gain, reliability, fairness
Table 3
Analysis of Alternative Solutions
Table 4
Risk Assessment and Mitigation Techniques
Risk Assessment and Mitigation Techniques
Alternative Solution Risks and Probability Consequence and Severity Mitigation Techniques
Establish a career development program • Might not motivate all employees / medium
• May be viewed as unfair / high
• Not managed appropriately by managers / high
• Employees will be more vulnerable to other companies / high
• May not be a good motivator tool if not rolled out correctly / high
• May not be used by management correctly / high
• Formal training of management
• Formal communication to employees
• Allow timely feedback from employees
• Ensure training meets with Riordan’s specifications
Develop a coaching and feedback process • May not be a motivator for all employees / medium
• The employees can view this as unfair / high
• Might not be managed by the managers in the appropriate way / high
• May not be a good motivator tool if not rolled out correctly / high
• May not be used by management correctly / high
• May not occur as frequently as needed / high
• Formal training for management
• Timely communication to employees
• Include 360 evaluations
Restructure the incentive pay • This will be short-term / high
• This may not motivate all the employees / high
• This could be very expensive for the company / high
• The Sales team will not change / high severity
• The sales team will continue to lose employees / low severity
• The sales support groups will not have any changes / high severity • Communication to help understand the process and what is expected of everyone
• Establish SMART goals
• Ongoing annual reviews
Table 5
Optimal Solution Implementation Plan
Deliverable Timeline Who is Responsible
Evaluation of Riordan needs Two months Human Resources
Management training for career development program One month Human resources, management along with their direct reports
Establishing initial career interview Three months Management along with employees with feedback from human resources
Defining employee needs versus Riordan needs Two months Human resources/senior management
Feedback to employees Three months Management / employees
Annual reviews for career development and training Annually Management and employees with feedback from human resources
Table 6
Evaluation of Results
End-State Goals Metrics Target
Define short term and long term human resource needs for Riordan Create three main competencies of each department that will be needed for short term and future growth Two months
Create a training program for management to learn coaching and feedback skills All management level executives will attend a training and development class One month
Start an employee skills assessment and career development Employees will have one on one meetings with their direct managers and human resources to discuss future training and promotion opportunities Three months
Provide feedback and training time lines to employees Employees will receive feedback in regards to training and career development Three months