The Riordan Manufacturing Company is a global plastics producer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Production is divided among three plants: plastic beverage containers in Albany, Georgia; custom plastic parts in Pontiac, Michigan; and plastic fan parts in Hangzhou, China. Research and Development is conducted at corporate headquarters 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.
However, just recent successive two years the sales of the company declined that prompted the company to adopt the customer-relation management system. This means that customer will be service through sales team rather than individual salespeople. This team will compose of sales person, product engineer specialist and customer service. A strategy to improve the sales.
Furthermore, the implementation of this newly created team led to the decline in employees’ that trigger the issues on receiving the incentives and other sour grapes of the different departments. There are personnel that favor the rewards to motivate their subordinate to finish the project and other claims that is high time to see the key people that will helps the company in increasing the sales.
However, there are also personnel that is not favor of the rewards they are asking they say that motivation is just the result of a poorly designed processes. The other says that the present compensation is adequate basing on his experience in other company.
Nevertheless, the HR continues to research on survey that resulted on expressing pain of different employees’ especially on the compensation and benefits issues. In addition to this, the company is composed of three demographic groups that have different views on the issues that want different recognition and acknowledgment that complicate the issues.
The complication of the issues led to the hiring of consultant to solve the issues brought by the survey and concerned of officer on how to combat the problems that will not affect much of the status of the company especially that they are on decreasing sales period. The consultant gathers different feedbacks by separate interviews on the different personnel including the CEO. Then present the findings to the board with recommendations and comments to consider. There are however different concepts to consider in solving the issues opportunity were also identified to help balance the company and the stakeholders.
To balance the company creates the vision statement for the employees’, customers and the positive outcomes for the company. They also created a problem statement to be guided in fulfilling the objective that the company and stakeholders wanted. Finally, the researcher gives her point of view the knowledge she have gain in doing the research.
Situation Analysis
Issue and Opportunity Identification
Riordan manufacturing Company creates an organizational strategy to increase innovation, recognize the value of teamwork, and reach new customers with new products. This cope the declined sales and uneven profits over the past two years. This will be lead to the adoption of customer-relationship management (CRM) system. The team aims to improve the sales.
The restructuring of the company into directed work teams resulted to decline in employees’ retention. Just recently the company employees’ survey showed a decrease in overall job satisfaction pointing on compensation and benefits areas. Adding on it is the three demographic groups, the Baby boomers, GenXers and GenY that radically have different perspectives on rewards and motivation.
The Chief Financial Officer of the company accused Human Resource System personnel to be inadequate in their responsibility in handling training, recognition and encourage employees to prevent decrease in employees’ turnover and equality in work for making the operation runs smoothly resulted in creation of new products and increase company profits.
To make the company best of the best reward and incentives must be given. Whether it is based on high performance, individual, may it be in group or in seniority position as long as it is given to achieve high expectancy, company commitment and success in communication and infrastructures to ensure maximum increase in sales.
Stakeholder Perspectives/Ethical Dilemmas
Individuals make decisions everyday that affect their company and its stakeholders groups that are affected by or that affect a business’s operations – employees, supervisors, investors, customers, suppliers. These decisions determine whether the company is recognized as a responsible corporation. Stakeholder interests sometimes conflict, which means managers must try to reconcile competing interests. If a company’s management consistently ignores social responsibility, the business will suffer and eventually fold.
The concept of stakeholder has been used in several different ways. Those who rely on economics in explanations and prescriptions of firm behavior view stakeholders as having an instrumental value, of helping a firm achieve its objective of maximization of shareholder wealth (eg. Ansoff, as cited in Freeman 1984). Kantian ideas add to give stakeholders intrinsic value (eg., Gray ; Hay ,1986; McCann ; Gray ,1986 ; Kilpatrick, 1985). As a result of this, firms must then recognize a duty to those stakeholders, that duty to ensure that their rights as entities are not violated.
They are group of people who directly affected to any changes and revamp made by the company. They are affected if rewards and incentives were not given. They encounter dilemmas like “justice”, the principle of fair and equitable distribution of benefits and burdens. Other dilemmas are “respect” including their autonomous choice and actions and “beneficence” both the obligation to benefits others maximize good consequences. (Encarta Online)
Furthermore, Kenneth Collins a Riordan’s senior Vice President of research and Development is a brilliant technician that led R;D to develop several innovative products. An asset of a company, however there are other groups who doesn’t like him. He is a man with integrity who is concerned the sales group that must be given equal benefits. (Rawls theory of Justice). Hugh McCauley argue being Riordan’s Chief Operating Officer. An engineer who is idealistic and believes that motivation issues are the result of poorly designed processes. Rather than focusing on compensation. He is serving interest in the company which gives negative outcome for the other stakeholders. While Charles Lacy a Riordan’s Vice President of Sales ; Marketing. An asset in sales process, including team sales and advocator for compensating employees based on team performance. Respected by his group and feel accountable with the lost of key person. He asserts the benefits of others in order to have teamwork in a work place.
Maria Trinh is woman in the communication system and chief information officer that exhibit “beneficence” the duty to do good both individually and for all. Another woman Yvonne McMillan Riordan’s Director of Human Resources. She conducts the annual employee survey but to her dismay never see changes because of survey result. The two shows Fair to his co-worker by helping them in fighting their rights to benefits incentives. Being a woman deserves the right to be treated equal. Dale Edgel is Riordan’s Chief Financial Officer. Oversees all HR activities at Riordan, and believes that the current compensation systems are adequate. He shows personal interest that will harm other stakeholder in favor over the company. He felt social responsibility over the company. Lastly is Barbara Masterson hired by the company to evaluate the survey and is fair and equal in treating all interviews done with the different stakeholders.
The ethical issues can arise when companies must comply with multiple and sometimes conflicting legal or cultural standards, as in the case of multinational companies that operate in countries with varying practices. It also arise in a competitive business environment, those companies that survive are the ones that recognize that their only role is to maximize profits. On this view, the competitive system fosters a downward ethical. As in the case of Riordans Industries where they hire consultant and evaluate for the benefits and motivation that the company can offer. (wikipedia.com).
End-State Vision
Riordan’s Vision Statement
Our vision is to provide equality, timely service, and friendly service and to create an atmosphere of shared responsibility in which all employees have the opportunity to receive right incentives and contribute to the process of improving the service, we provide our customers and increase markets sales. (Miami University, 2004)
Gap Analysis
The Riordan’s Manufacturing Company will aspire to research new products through R;D and IT, thus, providing the employee equality atmosphere by providing incentives and friendly time and service to be motivated.
The Riordan’s Manufacturing Company wanted to launch new products, thus, giving responsibility to their employees’ and continue development to be number one in technology.
The Riordan’s Manufacturing Company aspires to increase sales in the market, thus providing good service to the customer and give additional benefits to the employees’ to hit the goal.
Conclusion
The research teach me to be aware of our rights in all the benefits that is due to the employee and continue to be alert in training and development to avoid boredom and to keep update in new system to help the company. In helping the company makes the company stable that can afford to give the maximum incentives we wanted that can continuously makes us motivated.
The different concept for motivation and reward incentives taught me to be efficient in
working whether it is big or small company. Even if you are a woman the company needs you just show that you are the key person that hard to be replaced when lost. I believe that it is necessary to have those rewards and motivation to keep the workplace alive and makes the company hit the target. Maintaining teamwork, embracing responsibility and applying those theories make the company leader in market sales.
References
Ansoff, I. (1965). Corporate Strategy. New York: McGraw Hill, Inc.
Burton, B.K., and Dunn, C.P. 1996. Feminist ethics as moral grounding for stakeholder theory. Forthcoming in Business Ethics Quarterly, 6:2.
Dreher, g. ; Dougherty, T (2001). “Human Resource Strategy”, Reward and Compensation Systems, Chap.4. The McGraw-Hill Companies January 15, 2007
Deci 1975; Deci ; Ryan (1985). Intrinsic Motivation, January 15, 2007, from http://changingminds.org/explanations/theories/intrinsic_motivation.htm
“Employees Rewards (2004). Accel Team. January 15, 2007, from http://www.accel-team.com/motivation/employeeRewards_02.html
Ethical Principle. (2006). Encarta Encyclopedia. Retrieved January 15, 2007, from http://www.encarta.com
Ethics. (2002). Wikipedia Free Encyclopedia. Retrieved January 15, 2007, from http://www.wikipedia.com
Gray, Barbara and Hay, Tina M. (1986). Political limits to Inter organizational consensus and change. The Journal of Applied Behavioral Science 22(2): 95-112.
Kilpatrick, John A. (1985). Corporate response to social pressures: A typology. Journal of Business Ethics 4(6): 493-444.
McCann, Joseph E. and Gray, Barbara. (1986). Power and collaboration in human service domains. The International Journal of Sociology and Social Policy 6(3): 58-67.
Ormrod, J.E. (1999). Human learning (3rd ed.). Upper Saddle River, NJ: Prentice-Hall.
Petri (1991). Extrinsic Motivation. January 15, 2007, from http://changingminds.org/explanations/theories/extrinsic_motivation.htm
“Respect”. (2006). Retrieved January 15, 2007, from http://www.itsnotok.org/whatisrespect.html
“Vision Statement” (2004). Miami University. January 15, 2007, from http://www.pfd.muohio.edu/about_pfd/vision_mission.jsp
Vroom (1964). Expectancy Theory. January 15, 2007, from http://changingminds.org/explanations/theories/expectancy.htm#References
Table 1
Issue and Opportunity Identification
Issue
Opportunity
Reference to Specific
Course Concept
(Include citation)
Concept
The Riordan Manufacturing Company have faced different issues that need to be analyze urgently these are:
HR systems in general are inadequate
– Lack of supports in terms of financial internal transfer, planning and no promotion from Inside Company.
Job satisfaction and increased turnover.
“Ability to manage people to gain competitive advantage.”( Dreher ; Dougherty, 2001)
Organizational strategy factors
a. Training
Increase individual performance that increase profit for the company.
“It considers that people learn from one another, including such concepts as observational learning, imitation, and modeling.”
(Ormrod, J.E. 1999)
Social Learning Theory
b. Recognition for achievements
Makes the best firms the best.
“Organized to meet the needs of their people, so that they attract better people than their competitors do and their people are more greatly motivated to do a superior job, whatever it is they do.”( Dreher ; Dougherty, 2001)
Organizing for Success
Total company profits
Gain-sharing plans are unit wide bonus systems based on performance in comparison to some cost index (e.g., labor costs).
Gain-sharing plans
c. Employee Turnover
Completion of projects and launching of new products.
Success communication in infrastructure.
“Extrinsic motivation drives me to do things for tangible rewards or pressures, rather than for the fun of it.” (Petri, 1991)
Extrinsic
d. job satisfaction
Increase sales.
“Intrinsic motivation is when I am motivated by internal factors, as opposed to the external drivers of extrinsic motivation. Intrinsic motivation drives me to do things just for the fun of it, or because I believe it is a good or right thing to do.”
(Deci 1975; Deci ; Ryan 1985)
Intrinsic
e. Gender
Effective leader that leads to increase in profit.
Making operations runs smoothly.
“Respect taking your partner’s feeling into consideration” (itsnotok.org). And “giving equitable distribution of benefits.” (Encarta.com)
1.Respect and Equality
Increase output in companies expectation
“It considers that people learn from one another, including such concepts as observational learning, imitation, and modeling.”
(Ormrod, J.E. 1999)
2. Social Learning Theory
Reward system is seriously flawed.
Rewards can be based applied to the following issues as claim by the top leaders are follows:
Ensure productive workforce. Increase in sales and even profits.
1. High performance
Achieve high performance (expectancy).
“Motivate people to do something by showing them something desirable; indicating how straightforward it is to get it, and then supporting their self-belief that they can get there.” (Vroom 1964)
Expectancy Theory
2. Individual performance
Motivated in work that leads to increase turnover.
This “plans maintain their ability to provide sufficient incentives for many key contributors only if top performers can be promoted into the next higher pay grade.”
(Dreher ; Dougherty, 2001)
Merit Pay
3. Group performance on sales management.
Work as team to ensure increase profitability.
“Gain-sharing plans are unit wide bonus systems based on performance in comparison to some cost index (e.g., labor costs).)
Gain Sharing
4. Seniority of low base salaries
Promote a high degree of company loyalty and commitment
“Profit sharing programs to motivate employees and generate greater profits for the company
as a whole.( Accel Team, 2004)
Profit Sharing
Table 2
Stakeholder Perspectives
Stakeholder Perspectives
Stakeholder Groups
The Interests, Rights, and
Values of Each Group
Kenneth Collins
Riordan’s Senior Vice President of Research and Development. A pioneering in Riordan and supported by sales groups. Also a brilliant technician that led R&D to develop several innovative products. A man with integrality and concern with the sales group and company.
Hugh McCauley
Riordan’s Chief Operating Officer. An engineer who is idealistic and believes that motivation issues are the result of poorly designed processes. Rather than focusing on compensation. Pro-company.
Charles Lacy
Riordan’s Vice President of Sales & Marketing. An asset in sales process, including team sales and advocator for compensating employees based on team performance. Respected by his group and feel accountable with the lost of key person.
Maria Trinh
Riordan’s Chief Information Officer. Believe that compensation adjustment is best for IT levels professionals. Feels social responsibility towards her subordinates.
Yvonne McMillan
Riordan’s Director of Human Resources. She conducts the annual employee survey but to her dismay never see changes because of survey result. Fair to his co-worker.
Dale Edgel
Riordan’s Chief Financial Officer. Oversees all HR activities at Riordan, and believes that the current compensation systems are adequate. Pro-company. Interested in replacing Charles, Kenneth and Yvonne. He felt social responsibility over the company.
Barbara Masterson
Human Capital Consulting’s Senior Consultant. In charge in review the current compensation system. A man with integrity that is not biased.
Table 3
End State Goals
End-State Goals
Riordan Manufacturing Company will provide equality to all stakeholders by giving incentives due to them.
To help develop employees through training and shared friendly time service to the customer.
To maintain functional by developing their multi skills for companies maximum sales increase.
