Gap Analysis: Riordan Manufacturing

Gap Analysis: Riordan Manufacturing

Long Dao

University of Phoenix

Gap Analysis: Riordan Manufacturing

Riordan Manufacturing has several issues with its human resource management system that caused retention rate declined as the company implemented change in the new sales strategy. This paper will identify the issues and the potential opportunities for the company then suggests solutions for Riordan to solve the problem with its human resource management system.

Situation Analysis

Issue and Opportunity Identification

Riordan Manufacturing has declined sale and uneven profit over last two years therefore, the company's CEO has decide to change its strategy in sale processes as well as adopt the new customer-relationship management system. As the company has implemented change in sale process, the company learned that its employee turnover rate was high and job satisfaction decreased. In a recent employee's survey and exit interviews, employees complained about job role are not clear and not challenging. The survey also showed that training and development are limited; opportunities and career advanced are not available. These issues give Riordan manufacturing's HR an opportunity to re-defy job role to be more flexible and challenge, create training and development system to help employees advance in their career.

Employee retention number has declined along with job dissatisfaction increased have been connected to areas of compensation and benefits. Riordan can revise its compensation policies to increase job satisfaction as well as retain talents for it business. Another issue comes through survey is that the pay for internal promotion is lower than the newcomers therefore, it promote negative thought of "better to leave and come back" and contribute to the lower rate of retention. Riordan company may need to fix the pay process to eliminate different between internal and external hires thus help employees plan for their loyalty and career growth.

Kenneth Collins, Riordan's Senior Vice President of Research and Development worried about incentive is not strong enough to motivate R&D staff to support new sales strategy. Information Technology Officer complained about underpaid in her department and concerned about losing key staff members. The issue about the overall compensation may give Riordan Manufacturing an opportunity to review its total compensation policies to make it more attractive and cohesive as Dreher and Dougherty said if the performance appraisal system is seen as unfair or inaccurate then the merit pay may lose its motivational power (2001).

The survey result revealed that employees complained about highly performance workers were not recognized and promotion was tied to seniority than performance. These policies have cause job dissatisfaction and may affect the retention rate. Riordan Manufacturing may use this opportunity to create a formal review process to evaluate employees' performance then revise pay policies if it only can based on performance. The benchmark of Southwest Airlines proved that rewarding employees for excellence performance, highly maintaining loyalty, job satisfaction, and personal motivation are the benefits that can help attract, motivate and retain employees (Southwest Airlines. 2007).

Another issue of Riordan was it human resource system itself. The HR strategic role and activities are very limited and HR system is not supportive where company strategic wants to go. Leadership team could not agree about primary issues and there were question about the ability of the HR leader. Riordan may consider the solution of restructure its HR system overall.

Stakeholder Perspectives/Ethical Dilemmas

Employees of Riordan manufacturing: This group interests in high pay and compensation and job satisfaction. The group interests may conflict with executive team's interests in saving company operating cost. They have the right to withdrawn from employment agreement with Riordan Manufacturing. Their values include skill and knowledge to carry out different task in helping company meet its financial goals.

Executive team: This group interests in making Riordan Manufacturing to be more profitability by reducing manufacturing costs. Executive team has the right to make change in business strategy and order employees to follow company's direction. Executive team has leadership talents, knowledge, and ability to take action to improve business's outputs.

Customer group: This stakeholder group interests in buying high quality products from Riordan Manufacturing at the lowest prices. This interest may conflict with the employee's interest of high compensation. Customers have the right to chose other manufacture if Riordan cannot meet their demands and they are the revenue sources of the company so this stakeholder group has special values to Riordan Manufacturing.

End-State Vision

Riordan Manufacturing must understand the importance role of human resource management system thus the company needs to reconstruct overall human resource management with focus into total compensation package, training and development system, and redesign reward process. An effective of a total compensation policy will have ability to attract and retain good employees (Dreher & Dougherty, 2001) while a training and development system plus promotion policy will motivate highly performance employees. With a good HR system in place, Riordan could become the leader in the plastic manufacturing industry with the motivated workforce who can drive down operating cost and increase productivities.

Gap Analysis

Current issues of Riordan Manufacturing are the decreasing in overall job satisfaction and declining in employee retention. The company wants to have a motivated workforce to support new sale strategy and retain its talents. The executives have known the problems in their departments but the whole executive team have not recognize the important role of HRM system in the company strategy and they doubted about the ability of the company's director of human resource. All executives learned about the issues of retention and most of them though that more money is needed to resolve those issues even company was in a bad time when sales declined in the last two years. The survey result and the consultant report have pointed out several important objectives for Riordan to