Riordan Manufacturing is a worldwide plastics producer that has 550 employees on their payroll and has an annual income of $46 million dollars. The production of the company is separated between three plants, which are plastic beverage containers in Albany, Georgia; custom plastic parts in Pontiac, Michigan; and plastic fan parts in Hangzhou, China.
The development and research operations are conducted in the corporate headquarters office, which is in San Jose, California. Riordan’s major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers (Riordan Manufacturing Scenario, 2009).
Recently the company has been experiencing an increase in turnover rates because of high unhappiness from the employees, and a decrease in sales have been noted for the past two years. Many employees have left the company due to these issues, and if there is no change more employees may decide to leave as well. The company has developed a new strategy resulting in low work performance and low work morale within the organization. The company must improve its employee relations and retain employees for the new strategy to be effective. The company must create a rewards system that coincides with the organizational goals and the employee rewards programs (Riordan Manufacturing Scenario, 2009).
The structure of the organizational and its competitors, employee pay, and classifications must be modified to support the new business plan. The plan should consist of bonus programs, pay adjustments, awards programs, improved performance evaluations and management, incentives, benefits, job descriptions that include a career ladder program; these improvements will help Riordan meet demands of their new business model successfully (Riordan Manufacturing Scenario, 2009).
Issue and Opportunity Identification
Riordan Manufacturing is losing many employees with a great deal of organizational knowledge about the historical operations of the company and this is starting to affect the profits and the productivity within the company. Surveys that have been conducted shows a serious decrease in job satisfaction and the organization is failing to show appreciation to employees involved and have accomplished achievements throughout the company. The employees are starting to show a high level of dissatisfaction toward the company, this is causing the company turnover rate to increase. Riordan must improve their internal promotions and trainings in order for the employees to believe they are a component of the company. By improving the training and career ladder program, Riordan will retain and attract the top performers of the company. Another issue is the current reporting structure within the company. The human resources department reports into the finance department, which leaves a gap in the line of communications from the CEOs office to human resources. Riordan Manufacturing should consider using the nine step problem-solving model to identify each area that needs improvement. The result of this model will help prioritize the course of action for each area with weaknesses. The steps during this process will help implement new ways to motivate all the employees and help Riordan accomplish their end state goals much faster. This will also help with new processes and help motivate and improve company morale.
Stakeholder Perspectives/Ethical Dilemmas
The first stakeholder of the company is the founder and CEO, Michael Riordan. Michael’s main goal is to retain company stock prices and retain sales that have been falling for the past two years. Other stakeholders that play important roles are the top management, which consists of Vice Presidents of specific departments that shows interest in the betterment of their departments and ensure that they are aligned with the company goals. The fact that many employees are leaving the company and are receiving better compensation elsewhere for similar job descriptions has top management worrying about their departmental progress and development (Riordan Manufacturing Scenario, 2009). The employees are the next set of stakeholders being affected by the current company state and upcoming changes. Employees are developing concerns about receiving better compensation for their loyalty, dedication, and hard work by receiving rewards and incentives. Many employees at the company are complaining that their salary is not aligning with market rates throughout the industry. Employees in almost all of the departments believe if there was more motivation and the employees have more of a challenge at work, they will be able to perform more productively. The employees want to make sure they have a good work environment; they want to makes sure they have a strong motivational ground to perform on. Customers and shareholders are another set of stakeholders that will be impacted due to low employee morale and a decline in sales. Customers have not been satisfied with the services and this is causing lack of confidence in the company from their customers. Shareholders are being impacted directly by the decrease in stock prices and their interest lies in seeing an increase in their investment and they expect a greater value in return and customers want to see exceptional services and state of the art customer care before they can revisit their confidence within the company (Riordan Manufacturing Scenario, 2009).
Acknowledging that change within an organization and different stages of rejections and approvals that will impact the stakeholders will be the main goal for the organization to meet its total objective. The end goals for Riordan Manufacturing need to focus on improving the strategic planning for employee motivation and retaining high performing employees so that the company can improve on profitability and sales. Riordan needs to increase employee retention while increasing loyalty through better compensation plans competitive with market values for professional and skill specific positions, and evaluate current employee benefits for improvement and offer additional benefits cost effective to the employees.
Riordan needs to implement a long-term career path and training courses to retain new and long-term employees and raise job satisfaction. Riordan will also need to increase declining sales by motivating sales teams and individuals to increase performance by establishing group and individual incentives plans with performance related commissions. The human resources department need to improve their relationship with the CEO and the executive management teams need to be aligned so that business oriented goals are obtained for the benefit of the employees and organization cultural environment (Riordan Manufacturing Scenario, 2009).
Riordan Manufacturing has a gap between the CEO’s new business model, which is set-up to better serve customers and the compensation and even salary given to the employees. Riordan is currently suffering from low morale, reduction in sales and productivity, high turnover rates that is all leading to low profits for stockholders and major issues for the shareholders. The CEO hired an outside consultant, which has left him with a detailed report and has advised him to act quickly. The CEO and other managers believe his or her compensation and salary packages do not need to be changed. The company must work through these gaps by identifying the employee’s personal needs, increasing pay and bonus opportunities to slow or stop the high turnover rates. This will lead to better employee morale and retention, improving productivity, driving the value of stocks up making the company a strong competitor within the global plastics industry (Riordan Manufacturing Scenario, 2009).
By Riordan dealing with these immediate changes in the company’s long-term business model this will allow them to remain competitive within the industry. The senior leadership team must provide better pay and better incentives and benefits to improve employee morale. Training programs and team building will help the employees to work harder to accomplish these new goals. Employees will work harder to improve their work performance, and the employees will realize they may have a promising future with the company. This will result in better teamwork, increased sales, improved productivity, higher profits within the company and increasing stock values for shareholders and other stakeholders with Riordan.
With these new changes, Riordan will be able to prepare for their end-state visions and implement a problem statement that would protect the company from a risky future. Improving employee morale and implementing teamwork, training, and managerial operations, Riordan will have a successful future in the global-plastics industry. With the right programs, the support of the CEO and the senior leadership team coming together Riordan will be able to have happier employees with more motivation, putting in more work, and receiving better compensation.
Dreher, George, & Dougherty, Thomas, M. (2001). Human Resources Strategy. New York: The McGraw-Hill Companies.
University of Phoenix. (2009). Week four Riordan Scenario. Retrieved December 17, 2009 from University of Phoenix week four eResource from https://ecampus.phoenix.edu/secure/aapd/gbam/xmba530.2/MainPage.asp