Problem Solution: Riordan Manufacturing Essay Example

sales and unpredictable profits, the company had to adjust its sales procedures and adopt a customer-relationship management (CRM) system. However, these modifications have resulted in a decrease in the number of employees at Riordan. An annual employee survey conducted by the company showed a decline in overall job satisfaction, particularly regarding compensation and benefits.

The CEO is aware that action needs to be taken and is evaluating his choices. Riordan has introduced a new approach to improve its manufacturing processes through customer relationships and quality. However, the implementation of these plans is in danger due to low employee morale and job dissatisfaction. To successfully implement the new customer relationship system, Riordan Manufacturing must take immediate steps to rectify these issues. The company should explore methods for management to boost morale, identify effective techniques for resolving employee dissatisfaction, and develop strategies for handling conflict.

A company needs to involve all employees in order to establish clear goals for the entire organization. The successful implementation of a new strategy requires strong leadership to transform the current marketing and sales approach of the organization to one that is focused on meeting customer needs. The first step is to identify the issues and opportunities facing Riordan. One pressing issue is the high employee turnover, which has been attributed to employees leaving for better compensation.

The main concern in the research and development department at Riordan is whether they are paying less than the market average for these positions. This is a significant worry because it could lead to valuable employee knowledge being lost. Additionally, there is also concern about the employee incentive program, which affects both management and current employees. The current

sales incentives are tailored towards individual salespeople instead of promoting a team approach. This poses a problem as there have been changes in the sales approach, shifting from individual accounts to a team-based approach involving a salesperson, product engineering specialist, and customer service representative with support from research and development (Scenario, 2006).

The sales process has undergone a change, however, the incentive/bonus process has not adjusted accordingly. Moreover, Riordan has not made significant efforts in promoting employee training and development in recent years. It is important for companies to offer opportunities for personal growth and development as it serves as a strategic advantage. Training and development not only attract top performers but also incentivize employee retention (Dreher & Dougherty, 2001).

On the one hand, the human resources area has had minimal impact on Riordan's business plan. Presently, the department falls under the authority of the finance department and lacks direct involvement with the CEO. On the other hand, for Riordan to attain a strategic advantage regarding human capital, it is crucial to establish a superior human resource management system (Dreher ; Dougherty, 2001). Moreover, employee satisfaction has significantly decreased over the past year.

Employees not feeling challenged, lack of appreciation, and lack of direction tied to the company’s goals are the main contributors to the current situation at Riordan Manufacturing (Dreher ; Dougherty, 2001). It is important for Riordan to understand that satisfied employees can promote a positive organizational climate and increase productivity. When considering the current situation at Riordan, it is essential to consider the perspectives of various stakeholders. The investors of Riordan Industries, for instance, have witnessed a decline in investments over the past

two years. From their standpoint, Michael Riordan should seek ways to strengthen the company and quickly turn profits around to prevent further loss of shareholders.

Mr. Riordan believes that the best way to improve the company is by adopting a customer-focused team approach. However, it is important to consider other stakeholders when implementing a change that will completely transform how Riordan Manufacturing markets and sells its products globally. From an ethical standpoint, Riordan has a responsibility to ensure a satisfactory return on investment for its shareholders. This may involve further transferring manufacturing operations to the Hangzhou, China plant which has already started operating. Moreover, employee satisfaction has declined according to a recent survey, and there is disagreement among senior management regarding what actions should be taken.

Department heads are more focused on the well-being of their own employees rather than addressing the overall issue facing the company and what is best for all employees. The introduction of a new customer-focused team approach to selling has raised concerns about its impact on morale and how it will reshape each individual's role within the company. To address these changes, it is necessary to revise compensation and incentives because sales teams now consist of a sales person, a product-engineering specialist, and a customer service representative. Additionally, Riordan has noticed a decrease in employee retention alongside the shift of more manufacturing operations to China (Scenario, 2006).

Riordan must take into account various stakeholders, including customers (both current, past, and new), and their perceptions of changes within the company. Customers desire a reliable company that offers high-quality products at competitive prices. It is Riordan's responsibility to ensure customer satisfaction and address any internal

concerns that could affect the superior quality, delivery, and service they expect.??????? Ethically, Riordan must carefully consider implemented changes and find solutions that satisfy all stakeholders without compromising the company's integrity - a foundation since its establishment. Developing a problem statement for Riordan Manufacturing is crucial in guiding management towards identifying future solutions and opportunities while maintaining its global leadership position in plastics production.

Riordan Manufacturing's imperative is to both construct and uphold a dedicated and efficient workforce, crucial for the company's stability and prosperity in the long term. In light of this, an apt problem statement for the organization would be as follows: Ensuring an animated and productive workforce will enable Riordan Manufacturing to maintain its status as a prosperous global plastics producer. Adhering to a customer-relationship management (CRM) system, Riordan has introduced sales teams to facilitate customer service, with the aim of bolstering sales. In order to guarantee success, Riordan Manufacturing must strive to attain the following end state goals.

Riordan Manufacturing needs to focus on developing and retaining a motivated and efficient workforce in order to improve overall job satisfaction. The employee survey indicates a consistent decrease in satisfaction, with the current average score dropping from 4 to 3.

One possible company goal for Riordan would be to achieve and maintain an average overall satisfaction score of at least 4.0. Another goal would be to offer and maintain a competitive compensation and benefits package that can attract and retain high-performing employees. Currently, the satisfaction rating for pay and benefits at Riordan Manufacturing is 2.5.

Although Riordan's current score is 3.4, to maximize their human capital advantage, they should strive to surpass or reach a rating of

4 compared to industry competitors. To achieve this, implementing bonuses and incentives for job performance will greatly increase employee satisfaction. Additionally, Riordan's third objective is to enhance employee retention as it has been consistently declining.

The consolidated turnover rate for all three plants began at 7.0% in 2001/2002 and has reached 10.8% in the present year. The most concerning aspect is the voluntary separations, which refers to turnover that has not been initiated by the company (Noe, Hollenbeck, Gerhert, & Wright, 2004). In the case of Riordan, this rate has risen by over 50% in the past two years, from 3%.

The target for Riordan is to reduce and sustain the consolidated voluntary separation rate to less than 4% in order to decrease the overall consolidated turnover rate. In terms of alternative solutions, the important factors are development, retention, training, and incentives. These factors can be rated on a scale of 1 to 5, with 5 being the highest points towards achieving the end-state goal.

Alternative #1: Riordan has the option to establish committees aimed at enhancing involvement in all their plants. At each plant, a committee dedicated to creating newsletters could be formed, and the information from these newsletters could then be compiled to create a single Riordan Employee Newsletter. This approach would promote a sense of unity across company divisions and motivate staff through a friendly competition among plants. This alternative receives a rating of +3 because it would support Riordan's end-state goal by informing employees about company updates and the activities at different plants. The only drawback is that implementing and staffing a company newspaper may require more financial resources than Riordan is

willing to allocate.

Alternative #2: To ensure employee motivation and commitment, incentives play a crucial role in the company they work for. Riordan's management can develop straightforward methods to demonstrate appreciation for their staff. Educating supervisors on the advantages of non-monetary rewards will foster a motivating atmosphere and boost productivity. Additionally, granting stock options to Riordan employees not only serves as compensation but also provides them with choices, ultimately incentivizing company success.

Providing employees with incentives, such as cruises or extra support in various forms, is an excellent way to boost motivation and productivity. This option receives a +4 rating because it benefits both employees, ensuring they remain focused, happy, and productive while also helping Riordan keep valuable and skilled staff members. It is important to note that implementing this alternative may require additional financial investment from Riordan to ensure employee satisfaction and motivation. Nonetheless, this investment is vital for the company's long-term survival.

Alternative #3 involves comparing the cost of hiring and training new employees with providing additional training to current employees. By doing so, Riordan would recognize that retaining and training existing staff members would be more cost-effective in the long run. Furthermore, offering further training and educational opportunities would make Riordan a more appealing choice for skilled job seekers.

Alternative #4: Riordan needs to focus on employee retention because it is crucial for the company's survival and enhances its competitiveness in the marketplace. By retaining skilled employees, Riordan can ensure its success and avoid potential company downfall. It is imperative for Riordan to make sure that employees who deserve compensation are rewarded rather than implementing a generic reward system for everyone. This strategy will motivate hardworking

employees to continue their efforts while discouraging laziness and loss of productivity among the workforce.

This alternative has a rating of +4 because it is crucial to appropriately reward employees to ensure their happiness and loyalty to the company. However, it may be challenging to implement this process since Riordan has transitioned to sales teams instead of individual salespeople. Despite the difficulty, it remains highly important. An analysis of the alternatives reveals that the last three options offer solutions for addressing Riordan's most critical problems. Alternatives #3 and #4 specifically tackle the issue of employee retention. There have been reports indicating that employees are leaving due to higher pay elsewhere. Is Riordan paying below the market average for these positions? This concern is particularly significant for the research and development department as it may result in the loss of invaluable employee knowledge.

Both options offer great ideas for both solving the problem and providing ongoing training for Riordan and its employees. Options 2 and 4 provide various ideas for addressing the concerns surrounding the employee incentive programs. These concerns are not only shared by management but also by the current employees. As previously stated, the current sales incentives are designed for individual salespeople rather than a team approach. This is problematic given the recent changes to the sales approach, which now incorporates a salesperson, a product engineering specialist, and a customer service representative, with support from research and development (Scenario, 2006). While the sales process has changed, the incentive and bonus process has not been adjusted to reflect this change.

In conclusion, alternative #3 emphasizes the significance of employee development and training. Riordan has made little effort in

promoting the training or development of their employees in recent years. Providing and participating in the employees’ personal growth and development is a strategic advantage for companies. Training and development not only attract top performers but also create an incentive for retention (Dreher ; Dougherty, 2001). These issues can be resolved by combining alternatives #2, #3, and #4 or by implementing each alternative individually. All three alternatives are crucial for the company's survival and to potentially prevent the spread of employee dissatisfaction across other plants.

If Riordan can address these issues at this plant and use it as a pilot for potential changes at their other plants, it would be beneficial. It is important to improve employee morale during this restructuring process by involving all employees and keeping them informed. To address employee dissatisfaction, the company should consider filling new positions from within whenever possible and offering financial incentives to those who support the new strategy. Customer service should be improved by properly training employees to meet customer needs and comply with regulations. Additionally, restructuring the marketing department and improving communication among stakeholders will enhance customer relationships. According to McShane & Von Glinow (2004), it is crucial to assess and mitigate risks when undergoing restructuring and establishing a new strategic business direction.

It is crucial to acknowledge and evaluate these risks in order to determine the optimal course of action for the organization. Identifying both positive and negative risks is essential. Positive risks encompass high employee performance, achieving target goals, career advancement, skill development, expanding customer base while maintaining existing ones, and fostering teamwork. On the other hand, negative risks involve dissatisfied employees, absence of professional ethics,

employees seeking employment elsewhere, and diminished customer service quality.

The rationale for identifying these risks is straightforward. Managers must be aware of both positive and negative risks in order to successfully run an organization. By analyzing and examining all critical problems that can impact an organization, managers can identify the pros and cons of the risks and consider them. This allows the firm to start achieving their organizational objectives. According to Dreher and Dougherty (2001), being effective in organizational improvement requires proficiency in diagnosis, intervention, and program management. (Ch.)

To be a successful general manager, one must become an organization development specialist. In HR practice, there are four essential components for maintaining momentum. Firstly, it involves providing resources to support change. Secondly, it involves establishing a support system for those implementing change. Thirdly, it requires developing the necessary competencies and skills among those responsible for managing and utilizing the modified process. Lastly, it involves reinforcing new behaviors that are necessary in the changed environment. While all four components are important, the last two are especially relevant to improving HRM practices. According to Dreher and Dougherty (2001), the role of Human Resources Management (HRM) in business strategy and firm performance is crucial for achieving success in the business.

(Ch. 8) The text discusses the importance of sound HRM practices in providing value and a competitive advantage to a firm. It emphasizes the need for HR professionals to align with the company's business strategy and become strategic partners. It also states that there are no pre-defined rules or templates for formulating HR systems, as they should be tailored to the firm's strategic direction and core values. After considering various alternatives

and assessing Riordan's situation with sales process revamping and employee dissatisfaction, it was decided that a combination of three proposed alternatives would be the optimal solution. The text highlights the importance of training employees in their current roles and adapting to a team-based sales process for Riordan.

The bonus/incentive plan needs to be modified as a result of the sales process change. With more individuals involved in the sales and customer interaction, it is appropriate for other employees to participate in the sales incentive program. Additionally, compensation across the company will be evaluated by comparing to other companies in the industry and community to ensure fair wages in all departments. Furthermore, wages will now be determined by knowledge and productivity, rather than solely considering tenure with the company.

This approach will reward dedicated employees for their efforts and impose consequences on unproductive employees, motivating them to either enhance their performance or quit. By implementing a well-designed plan that incorporates alternatives #2, #3, and #4, these modifications will successfully satisfy the ultimate goals mentioned earlier, including bolstering overall employee contentment, enhancing benefits and incentives, and increasing employee retention. To effectively bring about organizational change, the engagement of all individuals within the organization is crucial. The proposed solution enables employees at every hierarchical level to participate in the process.

The leadership team needs to have a clear vision and alignment with the new strategy. To facilitate the buying process, they can leverage small victories and ensure that employees who support the strategy are on board from the beginning. For the implementation plan, it is crucial for the corporation to measure the value or growth at different levels, starting with

the financial perspective.

The company needs to establish a process for resource allocation and the acquisition and integration of new business units. Additionally, they should ensure that they offer customers better pricing, convenience, and packages than their competitors. The company should also prioritize career development and employee opportunities. These strategic systems should be regularly checked and evaluated for their success or failure. Committees should be established to monitor the effectiveness of the process.

Constant communication is necessary to ensure that all levels are well-informed of current events. Progress must be evaluated regularly, with some assessments occurring every three to six months. It is the responsibility of leaders to consistently review and refine the strategic process until a structure is established that suits the specific organization. (McShane ; Von Glinow, 2004)

The successful implementation of the aforementioned strategies relies on careful planning, effective communication of the company's mission statement, and garnering commitment from individuals at all levels within the organization. Achieving the alignment of the entire organization with a new strategy may necessitate the creation of a business case for each key initiative, the development of new business processes, and the identification of champions for key programs.

According to Deloitte (2003, p. 25), a strategy should not only use the SMART technique, but also be innovative and easily adaptable to change. Successful strategies should add value to a business or product, align with the business environment, and provide a competitive advantage against rivals. The uniqueness of a strategy is essential in achieving the intended goals. Michael Riordan has committed to investing in necessary improvements based on recommendations from Barbara Masterson of Human Capital Consulting, who was hired to address the

discussed issues.

The recommended changes will be implemented immediately, but it will take time due to the number of manufacturing plants and employees involved. The implementation will be done in stages over the next 12 months (Scenario, 2006). The first stage will involve completing the salary survey and adjustments to ensure Riordan's competitiveness in the marketplace in terms of wages and salaries. This stage will take three months. The second stage will focus on developing an incentive system based on the changes in the sales strategy, which will include all employees involved in the sales process, including the R;D team. Throughout this process, ongoing training will be provided for the new sales strategy.

It will take six months to complete this process. The third and final stage involves developing a performance appraisal process. This process aims to provide a better understanding and alignment with the strategic plan and employee reward system. Through the appraisal process, superior performers can be identified for potential advancement, while employees who are not meeting performance expectations can also be identified. This allows for actions to be taken to improve or terminate these employees. The appraisal process is estimated to take 12 months to complete (Scenario, 2006). The evaluation of results is expected to initially face resistance and uncertainty.

Organizational changes are often necessary and important, but employees typically prefer familiar things over the unknown. This can lead to feelings of despair and doubts about whether the company prioritizes their interests. People may also worry about losing privileges and positions, and question the necessity of change if the current situation seems satisfactory. Ultimately, Riordan can determine success by evaluating whether they have achieved their

end-state goals. To measure overall employee satisfaction, scores greater than 4 will be sought at the end of one year.

After implementing the team incentive system, the objective was to achieve a rating of 4.0 or higher in the following year. In order to successfully accomplish this goal, the consolidated voluntary separation rate must be below 4% by the end of the year.

Future success will be determined by continuously achieving the long-term goals for years to come. Riordan Manufacturing can achieve success by implementing improvements to address the underlying issue with human resource management. By thoroughly analyzing and defining the problem, Riordan Manufacturing can attain strategic advantage in human resources. Through the suggested changes, Riordan Manufacturing will maintain its status as a successful global plastics producer by cultivating and retaining a motivated and efficient workforce. In conclusion, Riordan Manufacturing's leadership team will use the proven 9-step problem-solving model to turn the business around and resolve the company's issues.

The paper's findings were further explored through various alternative solutions and by employing the 9-step problem-solving model. The alternatives underwent analysis, leading to the identification of the best solution. Any business leader or student can utilize this problem-solving model to generate value for both the company and its shareholders. Moreover, when devising solutions for human capital issues, managers must take into account the risks associated with each alternative. While implementing a variable pay system may garner popularity during prosperous times, it has the potential to diminish motivation if employees lack faith in their ability to attain goals (Scenario, 2006).

Changing individuals and organizations can be a difficult task, regardless of whether it is a large system or a small team.

The difficulty lies in the process of developing and evolving them. Moving a successful organization is even more challenging than moving a failing one. It demands exceptional leadership qualities to inspire and motivate people to take bold risks.

Currently, the firm is functioning well. However, senior management is urging individuals to take risks and prepare for impending changes that may not yet be apparent. Leaders have contrasting approaches to problems: some consider them as challenges to resolve, while others perceive them as things to avoid.

Some individuals possess the distinctive skill to perceive these opportunities as just one of many that leaders need to recognize for their organizations to thrive. As I contemplated these opportunities, I understood the importance of all stakeholders and sought novel methods to transform challenges into prospects.