Introduction: Riordan Manufacturing is a fortune 1000 enterprise and a global plastics producer employing 550 people with projected annual earning of $46 million and revenues in excess of $1 billion. Production at Riordan Manufacturing is divided among three plants. One plant located in Albany, Georgia manufacturers beverage containers. The second plant located in Pontiac, reloj control Michigan manufacturers custom plastic parts. Riordan has recently become global and started manufacturing plastic fan parts in Hang Zhou, China. Corporate headquarters is located in San Jose, California where Research and Development is conducted. Riordan markets their goods to automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers, bottlers, and appliance manufacturers.
Situation Analysis Issue and Opportunity Identification: a. There have been declining sales and uneven profits over the past two years. Employee retention numbers have declined. A decrease in overall job satisfaction, particularly in the areas of compensation and benefits is evident. The current reward system is mostly performance based,recognizing cost-of-living increases, seniority and position. Most department managers seem to perceive that the base pay of their workers is inadequate.”Monetary incentives though important need to be accompanied by non-monetary incentives like praise, recognition to be effective in motivating employees for better performance.” (Chaudhary, Sunil V., 2010) and a motivated workforce. The Riordan culture is composed of three distinct sub-groups of employees which hold radically different perspectives on rewards valuing everything from interesting work to bigger paychecks.
Stakeholder Perspectives/Ethical Dilemmas The first stakeholder is sales management. They want to implement a CRM system that responds with immediacy to the voice of the customer. Their plan is interdisciplinary work teams which consist of a salesperson, a R&D person and an IT person. This strategy is in direct conflict with the needs of the sales people who has for years been the sole contact with customers and who did not share their bonuses with other professionals on a team. R&D management feels that the new interdisciplinary teamwork system would inhibit their staff from completing greatly needed design projects on time..This group of professional’s just needs more interesting work. The IT manager believes that her staff is underpaid, and that key employees may leave the business. So far, no IT employees have resigned. The ethical conflict amounts to throwing money at employees as opposed to looking at more intrinsic factors such as job re-design to provide more interesting work.
Problem Statement: Riordan Industries aspires to create a system of employee incentives, rewards and empowerment which supports their vision of customer intimacy.
End-State Vision Since Riordan Industries has such a diverse employee population, the company implementing a total rewards system as a potentially powerful tool in assisting them to align their HR and business strategies with employee needs, to realize “higher productivity, better quality, and more competitive costs” (Collins, John P., 2012) to achieve optimal business performance. Total reward is the term that has been adopted to describe a reward strategy that brings additional components such as learning as translated to mean “collaboration between educators and the manufacturing base” (Collins, John P., 2012), into the benefits package. It goes beyond standard remuneration by embracing the company culture, and is aimed at giving all employees a voice in the operation, with the employer in return receiving an engaged employee performance. In this context, Riordan Industries would have a workforce which is motivated to execute team oriented strategies such as ISO 9000, Six Sigma and CRM.
Alternative Solutions: Riordan Industries can learn from McDonald’s and consider alternative solutions which align with their overall strategy of customer intimacy. They can develop a rewards system where people are paid for the contribution they make, as being paid less than a person is worth is a major de-motivator.” (Tracy, Brian) These rewards can be driven by individual incentives which are tied to customer satisfaction such as having the engineering team design a variety of customer driven product options and having the manufacturing team deliver a defect free product to the customer’s facility consistently on time. Opportunities for employees who show initiative and exceptional internal and external customer service may advance as far as their dreams may take them.