Riordan Problem Solution
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Problem Solution: Riordan Manufacturing
MBA 530: Human Capital Development
Amanda
University of Phoenix
Problem Solution: Riordan Manufacturing
Introduction
Managers of the 21st century recognize the fact that human capital management (HCM) is an important issue to the advancement of any company. Everyone that examines the need to manage, measure and get the most from human capital agrees on its importance. The difficulty lies in the way to execute a great HCM model and convert it into a praiseworthy goal through the development and implementation of a comprehensive motivation and rewards strategy for their employees. One organization currently facing such a HCM challenge is Riordan Manufacturing.
Riordan Manufacturing is a global plastics producer, which employs 550 people. Riordan Manufacturing is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion.
Riordan Manufacturing is experiencing high employee turnover and declining morale and reduced work ethic from its employees, employee motivation and behavior have declined. Riordan must also consider how its pay and rewards systems affect organizational behaviors and if their compensation packages are comparable with other leaders in the manufacturing industry.
The next few pages will examine ways in which Riordan Manufacturing can turn these challenges into opportunities by creating and implementing a comprehensive and motivational rewards strategy that will affect organizational effectiveness for all employees.
Situation Analysis
Issue and Opportunity Identification
Human capital management is “the performance of all the managerial functions involved in planning for recruiting, selecting, developing, utilizing, rewarding and maximizing the potential of the human capital in an organization” (Megginson, Franklin and Byrd, 1995). HCR managers and personnel also support and advise managers, serve as employee advocates, resolve problems and implement organization policies. Strong HCR managers realize that employees want to be part of an organization that stands for something and that provides them with personal fulfillment and meaning.
Over the past several years, several factors have developed within Riordan Manufacturing that has affected employee job satisfaction and retention. These factors include an organizational strategy focused on improving innovation, implementing teamwork strategies and increasing sales and customer all of which have effected the employees overall job satisfaction and motivation levels.
These are not the only reasons that job satisfaction and employee moral have declined, other factors such as how employees view the organizations reward system and whether their individual needs are being met, will influence job satisfaction and employee morale and turnover rates within the organization. From the loss of employee morale and lack of motivation by its employees and through the increasing turnover rate of employees, it is evident that Riordan Manufacturing is not providing its employees with a work environment that provides personal fulfillment and meaning.
Riordan Manufacturing is not alone, however, a Conference Board survey of 5000 U.S. households conducted in August 2004 found that 67% of workers do not identify with or feel motivated to drive their employers business goals, one quarter are just showing up to collect a paycheck and almost half feel disconnected from their employers (Conference Board, 2005). That study concluded, “Americans are growing increasingly unhappy with their jobs, with the decrease in job satisfaction pervasive across all age groups and income levels” (Conference Board, 2005). In fact, Boehm states “study after study has found that motivation probably has a larger impact on productivity and quality than any other factor.”
Riordan Manufacturing has also been challenged with a higher rate of employee turnover than ever before in the past. Shehan (n.d.) states, “Many owners of businesses with high employee turnover find themselves running in place instead of growing their companies. As the economy improves, more employers are facing this issue because employees are shopping around their resumes in hopes of landing better positions. In fact, 83 percent of employees surveyed by the Society for Human Resource Management said they are dissatisfied with their current positions and are seeking new employment. High employee turnover affects companies in several ways. First, when long-time employees leave, they often take valuable institutional knowledge or intellectual assets with them. Seasoned staff members serve as morale boosters for work teams and help new employees progress more quickly. Having to replace these assets costs employers a lot in both time and money. Second, high employee turnover often forces business owners to focus their own efforts on staffing. Whether the employees being replaced are senior-level executives, middle managers or entry-level staffers, business owners often bear the responsibility of recruiting, interviewing and training new hires. And this is at a great cost Ð- typically the equivalent of 30 percent to 150 percent of the salary for the position that is open.”
Such challenges can be overcome; however, Dreher & Dougherty (2001) find that “Top performing companies pay a great deal of attention to a number of common motivational factors, or needsÐ Top performing companies provide employees with
Something to believe in.
A feeling of control.
Job challenge.
The opportunity to engage in lifelong learning.
Recognition for achievements.”
Ð The best firms are better 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 they do”.
Employee morale and motivation are an organizations life-blood, yet they are often times viewed as a business subject and are largely ignored. Understanding that employee morale is based upon the employee having an intrinsically rewarding work experience, a work experience where they feel respected, valued and appreciated, a work experience where their input and knowledge is