Gap Analysis: Riordan Manufacturing
The business world today is very fast paced, and to keep pace companies must thrive on gaining a competitive advantage over other companies. Many methods can be used to be a successful company, and one such tool in benchmarking. Generic benchmarking is one such tool that allows companies to find success and solutions from past organizations who have faced similar problems. Employees are the lifeblood of any company, and it is important to ensure that they are properly motivated and rewarded for hard work. Currently the issues facing Riordan Industry can be described from a human resource perspective. These HR perspectives are Individual incentives, measuring an employee performance, pay-for-performance, motivational theories, creating a performance management system, group incentives, career development, and employee benefits. With the help of benchmarked data from these specific areas Riordan will be able to restructure the organization enabling them to develop a new product and increase products.
Issue and Opportunity Identification
Riordan will not survive unless proper human resource policies and procedures are used. Reward systems and compensation packages are but a few business strategies that can be applied that meets c Riordan should offer group incentives such as gain sharing. Gain-sharing plans are unit wide bonus systems based on performance in comparison to some cost index (e.g., labor costs). Work teams or units must first devise ways to improve work processes, thereby reducing labor costs. Some proportion of the cost savings is then returned to the work group (Dreher & Dougherty, 2001, p. 55).
Riordan can create an effective survey to measure employee performance like reviewing employee’s skills relative to their career development needs, their personal interests and career plans, and the company’s need for management talent. In addition to helping people acquire job-related knowledge, skills, and abilities, employers have a stake in helping employees develop from a career and personal perspective. Senior managers need to develop the skills required to be effective career developers. This includes the ability to help subordinates make informed estimates of their strengths, weaknesses, and career aspirations (Dreher & Dougherty, 2001, p. 133).
The staffing and hiring of the employees will have to be watched carefully by HR. Job performance and promotions will also be warranted if Riordan is to achieve a motivated performance harmony within the company. An explanation of its goal needs to be explained early with the Riordan employees. A clear state of goals will allow the Riordan employees to understand the expectations a rewards can be issued for those who achieve the standards
Riordan’s major concerns with regarding employee turnover is having to work towards raising employee salaries in order to keep workers content so they will not resign to work for a competitor. Health benefits are a major selling point when it comes to individuals choosing employment. Medical insurance, retirement programs, life insurance and savings plans are common benefits which help protect employees from the financial risks inherent in daily life.
Stakeholder Perspectives/Ethical Dilemmas
Riordan Manufacturing is a big name in the plastic manufacturing industry. With three plants in two countries and revenues of over $1 billion the company has acquired a place in the fortune 1000 enterprise. Companies like Riordan Manufacturing, do not concern a single person or a single group of people. Instead a number of stakeholders are directly affected by the actions and decisions of the company. Each stakeholder brings with it different sets of interests, rights and values, and in order for the company to run smoothly each stakeholder’s needs must be interlinked with the others. In the case of Riordan Manufacturing following stakeholders have been identified: I) employees, II) clients, III) Stockholders.
When there is a clash between the needs of stakeholders conflicts occur. Conflict can occur when values espoused and enacted by the organization collide with employee’s personal values (Kreitner & Kinicki, 2008, p. 159). In this case the most striking conflict that we see is; between the stockholders and the employees. In order to maximize their profits stockholders have taken actions that reduce compensations and benefits of the employees. As a result employees are dissatisfied and leaving the organization, this in turn is damaging stockholders’ interest. With its human capital constantly decreasing Riordan Manufacturing will come to a stage where it will not be able to deliver the promised goods and services thus coming into conflict with client as well.
Other conflicts between stakeholders can occur when stockholders fail to give respect to their employees, clients are not respected by the organization or employees fail to account for the damage to stockholders interests.
Conflicts can also occur in the form of ethical dilemma. For example a decision to cut costs by revoking medical benefits of employees has ethical implications as well. Similarly Riordan Manufacturing’s decision whether to participate in CSR activities or not is an ethical dilemma. Ethical dilemmas can also arise when employees are offered illegal ways to increase sales or maximize profits. The right way to follow in such situations is to act in a responsible way and abide by the law.
“Our job is to satisfy our customers with state of the art products with the lowest financial and social costs, provide our employees a favorable working environment that promotes learning and welfare, and continually work towards improving the environment that we work in.
Our vision is to sustain the growth of the company along with the growth of all the stakeholders. By continuing innovation in manufacturing, HR management and in CSR initiatives”.
In future I expect Riordan Manufacturing to be a global leader in plastic manufacturing industry. A complete overhaul of the company’s infrastructure will lead to better management of human, financial resources and elimination of conflicts between stakeholders. With its diverse pool of human capital it will be a powerhouse for innovation, learning and introduction of new and more efficient products.
A better understanding of each other’s interests, rights and values will lead to a harmonious working environment that will support its team-based and innovation friendly culture.
Lastly, I see Riordan Manufacturing at the forefront of fulfilling corporate social responsibility. It will be taking initiatives such as giving scholarships so that human capital for future is developed and the growth can be sustained over time.
Riordan Manufacturing can reach the desired end-state by reducing the gaps in three key areas. These are:
1. Build human capital by attracting, developing and maintaining an effective workforce. This can be done by motivating employees with the help of appropriate compensation packages and benefits i.e. make employees feel valued. When employees don’t feel valued, usually they are not willing to give their best to the company and often leave to find a more supportive work environment (Daft, 2003, p.408). At present dissatisfaction is prevalent in employees due to lack of motivation and incentives for work.
2. Promote innovation friendly culture. Currently the company has a team based structure which is the first step towards promoting innovation, but these teams lack supervision of visionaries and members are confused about goals. So in future leaders with a clear plan of action are needed.
3. Think beyond the traditional profit maximization approach. Take part in CSR initiatives because it is the only way to achieve sustained growth. The company must also promote ethical behavior within so that the values of employees do not come in conflict with that of organization. Employees can be trained to identify and deal with ethical issues and this in turn increases productivity. Ethical awareness grows as companies recognize that ethical practices make good business sense (Guffey, 2000, p.24)
Riordan Manufacturing understands the importance of solutions in motivating and rewarding employees for compensation. Riordan Manufacturing is in the process of creating an individual incentives, measuring an employee performance, pay-for-performance, motivational theories, creating a performance management system, group incentives, career development, and employee benefits. Implementing a performance management system will direct the company to deliver the right rewards to the right employees is to align employees with the organization’s strategic goals. Once the employee goals are identified, the leadership team will identify the work most central to the organization’s enterprise with the most critical employees and the rewards that will motivate the teams. Riordan Manufacturing leadership team will assist in motivating and rewarding the employees, and with the help of benchmarked data, Riordan Manufacturing will restructure the organization enabling the market team to develop new products and increase production sells to ensure the company will achieve the set goals.
1. Daft, R. L. (2003). Management, 6th edition. Vanderbilt University
2. Dreher, G. F., & Dougherty, T. W. (2001). Human Resource Strategy : A Behavioral Perspective for the General Manager. Publisher: Richard d Irwin
3. Guffey, M. E. (2000). Business Communication, Process and Products. South-Western College Publishing.
4. Kreitner, R, & Kinicki, A. (2008). Organizational behavior The McGraw-Hill Publishing Company Ltd.
Issue and Opportunity Identification
Reference to Specific
Currently the issues facing Riordan Industry can be described from a human resource perspective. These HR perspectives are Individual incentives, measuring an employee performance, pay-for-performance, motivational theories, creating a performance management system, group incentives, career development, and employee benefits.
Riordan Manufacturing can restructure its payment policies to retain what is left of its workforce; it will be able to spend more as the workforce is smaller.
Extrinsic rewards are given by another person, typically a manager and include promotions and pay increases (Daft, 2003, p.347).
Senior managers need to develop the skills required to be effective career developers. This includes the ability to help subordinates make informed estimates of their strengths, weaknesses, and career aspirations (Dreher & Dougherty, 2001, p. 133).
By making employees understand their position in the organization productivity can be increased as the employee will know where he/she stands in comparison with others.
Top management support and an organization climate of openness can help 360-degree feedback program succeed (Kinicki & Kreitner, 2008, p. 248).
An explanation of its goal needs to be explained early with the Riordan employees.
Early explanation of goals in a horizontal structure will eliminate doubt from the minds of employees and they will make better decisions.
Flatter organizations demand that every employee be a skilled communicator (Guffey, 2000, p.5)
Flattened management hierarchies.
The staffing and hiring of the employees will have to be watched carefully by HR. Job performance and promotions will also be warranted if Riordan is to achieve a motivated performance harmony within the company.
A selective hiring procedure will ensure that right people are selected for the right job.
Today, more than ever, strategic decisions are related to human resource considerations (Daft, 2003, p.408).
The Interests, Rights, and
Values of Each Group
Interests: Compensation, fringe benefits, experience and learning, profit maximization.
Rights: Rights to pay, minimum wage, maternity leave etc.
Values: Integrity, ethics, ambition, fairness, respect.
Interests: Goods or services
Rights: Get the promised goods and services on time.
Values: Independence, honesty, accountability, fairness etc.
Interest: Company’s growth and profits.
Rights: Right to information of the company, right to make profits.
Values: Ambition, corporate social responsibility, accountability, fairness.
End State Goals
Announcing attractive compensation packages to attract effective workforce.
Introduction of horizontal team-based structure.
Providing on job training to employees.
Provide direction and visionary leadership.
Create a team to mange ethical issues and train employees for ethical practices.