Gap Analysis of Riordan Manufacturing - Case Study Example

Running head: GAP ANALYSIS: RIORDAN MANUFACTURING Gap Analysis: Riordan Manufacturing Goes Here of Phoenix Gap Analysis: Riordan Manufacturing The business world is a rapidly changing environment in which the players in the business game must adapt to new ways of doing business while at the same timing valuing sound traditional business practices. Teamwork is a business practice that is important towards business success. Teamwork is the cooperative effort of a group in order to achieve a common purpose or goal (Answers, 2007). Riordan Manufacturing has been a successful enterprise for many years. It is currently facing changes in its operation. This paper describes the issues & opportunities, stakeholder’s perspectives and end state goals in order to perform a gap analysis of Riordan Manufacturing. Situation Analysis Issue and Opportunity Identification Consequently, changes within the company have left Riordan to cope with a mass of challenges. Current changes have led to a decline in morale, work ethics, and employee retention. The consistent two-year regression means that the company has to focus on increasing sales and profit, aligning the staff, reducing turnover rates and increasing job satisfaction. The R & D department has the challenge of developing three new products to meet the following year. The strategic choice at the function level is “how should total compensation help gain and sustain competitive advantage” (Milkovich & Newman 2004). The company is faced with creating a new rewards system that includes compensation, salary, and benefits. The cost of implementing such a plan is also a concern for Riordan. The problem is the company is divided into three groups that do not agree or have different perspectives on rewards motivation, how to disburse incentives and what department should receive compensation. Some chief officers do not agree that a compensation system should be implemented, which has lead to an even bigger dilemma. Ultimately, while the challenges are seemingly overwhelming, there is a silver lining of opportunities available to Riordan. The opportunities that exist to Riordan Manufacturing is the ability to create 3 new products, increase sales, and introduce new appealing incentives for employees. “Managing compensation strategically means fitting the compensation system to the business and environmental conditions” (Milkovich & Newman 2004). The CEO has allocated $50,000 to higher a consultant. This allows the company the opportunity to develop a solutions study survey that can help with job satisfaction, decrease turnover, and increase employee morale. This study will identify the underlying issues leading to decreased employee satisfaction and recommend potential mitigations for addressing the issues. Equally important are the stakeholders’ needs and ethical dilemmas that have developed with the challenges and opportunities. Stakeholder Perspectives/Ethical Dilemmas The most important stakeholder group in this case is Riordan employees, which are divided into three demographic groups. These groups are often referred to as the “Baby Boomers”. GenXers consists of the professional and some manufacturing staff. The GenY employees are the new hires that work in manufacturing, engineering and IT. Every group has a different opinion on the rewards system and motivation. The managers of the sales department feel as though their individual department bonuses could be at risk if the reward system is dependent on team effort rather than individual performance. Managers in other departments feel as though salaries need to be raised in order to maintain current employees, even with an incentive package. The Research and Development department agree that a new incentive program should be created, however the rewards should be for their department. “Practices that link employees’ behaviors to each company’s specifics- knowledge of the specific work required, of specific products offered, and of specific customers served- are required for success” (Milkovich & Newman 2004). In completing an employee satisfaction audit, Human Capital Audit, found that employees do not feel valued, there is little opportunity for training and advancement, performance views do not always occur, and employees feel that managers show favoritism. Interviews done with key leaders are the company found a range of dilemmas. Kenneth Collins, Senior Vice President of R & D believes that key researchers will leave for higher pay and that incentives will not be enough to keep focus on long-term projects. Hugh McCauley, COO, that the issues facing Riordan are go beyond just compensation. Hugh feels as though the focus should be on improving jobs to make more appealing to employees. Charles Lacy, VP of sales, wants to revamp the sales system, but the customer-focused team’s process is slow moving and the sales force is unsure of what they are doing. However, he is concerned they do not have the time to implement successfully. Maria Trinh, Chief Information Officer, believes that IT is underpaid and that her best employees will leave. Michael Riordan, CEO, views Riordan as a company that takes care of its employees, but believes that they are not loyal anymore. Yvonne McMillan, Director of Human Resource, is concerned that the problem does not lie with employee morale, but the role of HR in the company. She deems the problems as a direct “result of HR being regulated to finance” (University of Phoenix, 2006), as a result a definition of the problem statement can be developed that allows for multiple solutions. End-State Vision In determining the best practices “the focus is a question not so much of what the best strategy is, but what the best strategy is, but of how best to implement the system (Milkovich & Newman 2004).” The end-state goals are for Riordan Manufacturing is completely overhaul and create a new rewards system that offers appealing compensation in salary, benefits, and other incentives. This new system will simultaneously help raise employee morale and increase employee retention. Riordan will have defined salary grades that will allow them to compete with other markets. Research and Development can focus on creating three new innovative products to increase sales. Two other important end state goals are to improve managerial synergy and restructure and redesign the job descriptions. Gap Analysis Gap analysis is a business tool that is performed to analyze and identify how to close the gap between the current situation of an enterprise and its desired end state goals. Riordan Manufacturing has various issues that must be dealt with in order to eliminate a lot of the problems in the firm. The way to solve these problems must be aligned with the opportunities the company has available within its current setting. One of the goals of the company is to create a new reward system. The initiative of the president of Riordan of hiring a consultant was a great first step to close the gap in this matter. The top executives must identify the actual needs and the viability of new reward system. Obvious problems such as the below market pay in the IT department must be attended immediately. This particular end-state goal must be further analyzed to determine if the reward system needs minor changes or a complete overhaul. Riordan wants to raise employee morale. The employee moral problem is a serious issue in this enterprise. There was evidence in both the employee survey and in the consultant’s interviews that the employees are not happy. The company must start by recognizing and letting the staff know how valuable they are. More opportunities for ascension must open up to increase the levels of motivation among the employees of the company. Another key end-state goal is to increase the level of employee retention. Increasing employee moral and employee retention are two end state goals that are correlated. The company retention problem exists, but is not a rampant problem since Riordan’s retention rate is still above industry average. There is a pattern emerging that shows employee dissatisfaction and other employees leaving the firm, thus the issue must be deal with. Along with more promotion opportunities the company must offer more training and development opportunities to provide employees career development options. The behavior of the managerial staff and its lack of coordination is a huge problem at Riordan. Most managers are pulling for their own interest and are forgetting that all departments are interconnected. The president has to show better leadership to close the gap on this issue. Some team members might have to be replaced with new players with fresh perspectives. The problem is not being recognized, thus the first step on this issue to move forward and find a way to minimize the problem is for Mr. Riordan to clearly tell its subordinate managers that changes have to occur in their ability to work as a cohesive unit. Another end-state goal of Riordan is to redesign jobs. The biggest issue and the first place changes must occur to accomplish this goal is at the managerial level. The jobs of the HR director and the CFO must be redesign to eliminate all the conflict between these two positions. The HR director must have autonomy over human resource decisions without outside interference in the internal affairs on her department. The CFO should be helping other departmental heads, not making decisions for them. The redesign of jobs must occur at all levels. Employees need to know exactly what their job duties and obligations are. The issue of lack of promotions and lack of criteria to select internal candidates for promotion would be easier to solve if better job descriptions were in place in order for the supervision to perform better evaluation of work being perform by the employees. Conclusion Riordan manufacturing has different issues within its operation which if properly solved can be transformed into opportunities for the firm. The managers in this enterprise must consider different alternatives to solve its problems, most them are based on different aspects of its HR function as well as other interpersonal relationship conflicts. There are no problems that can not be solved if a company is committed to accepting changes. Riordan Manufacturing can become a profitable enterprise for years to come if is willing to transform its leadership styles and restructure the HR functions within this firm. References Answers.com (2007). Teamwork. Retrieved October 12, 2007 from http://www.answers.com/topic/teamwork Milkovich, G., Newman, J. (2004). Compensation (8th ed.). New York: Mc Graw Hill. University of Phoenix (2007). Scenario: Riordan Manufacturing. Retrieved October 5, 2007 from rEsource database. Table 1 Issue and Opportunity Identification Issue Opportunity Reference to Specific Course Concept (Include citation) Concept Lack of teamwork among the managerial staff Find team unity and increase corporate profits In the report by the consultant in the team leadership findings it said “lack of agreement about primary issues.” (University of Phoenix, 2007) Synergy Low employee morale Increase morale and improve job satisfaction. Over the last twelve month the employee complaints have increased a lot (University of Phoenix, 2007) Motivation Rewards not adequate Increase overall pay to retain more employees at Riordan. The IT staff is 15% underpaid at Riordan (University of Phoenix Employee compensation Table 2 Stakeholder Perspectives Stakeholder Perspectives Stakeholder Groups The Interests, Rights, and Values of Each Group Hugh McCauley, Chief Operating Officer Interested in the bottom line results of the company. Believes reward system is adequate and is not the root of the problem. He believes the problems in this company are being exaggerated. He has strong opinions about the issues. Charles Lacy, VP of sales Very concerned the way the company is handling the new group sales incentives. Concerned about the inadequate training for the staff with the implementation of new system. Believes further restructure of incentive system is needed. Maria Trinh, Chief Information Officer Believes Information technology is the most important aspect of a business. Very unsatisfied with the pay of the IT staff. Their pay is 15% below market value. Concern employee valuable IT employees will leave the firm. Kenneth Collins, R&D vice president He believes R&D is getting unfair treatment. To him this department is the heart and soul of the enterprise. He thinks sales team is getting all the credit. It is not fair that his R&D team now has to get involved in the idea generating process of the newly formatted teams with any new incentives. Michael Riordan, President of the company Is a very intelligent and experienced player. He has invested a lot of time and effort developing this company. Very concerned about the employees and shareholders. Is willing to do what it takes to turn things at Riordan around. Yvonne McMillan, Director Human Resources She feels underappreciated in the company. Yvonne thinks she is being discriminated because she is a woman and her opinion don’t count. Believes the company, especially the CFO, don’t take her word seriously. The CFO has influence over the president in HR matter she should be handling. Dale Engels, Chief Financial Officer Has power and influence in Riordan. Believes the HR director has been very incompetent in this project, but thinks she does an overall good job. Dale is very concern about the problems within the company. His financial and analytical expertise gives him a better perspective of the impact any decision concerning the employment payroll has on the company’s bottom financial line. Barbara Masterson, HR consultant The key function of this player is to bring solutions to the company. The person is an unbiased professional with experience in the consulting industry. Main concern to help the company and persuade the administration to purchase the new consulting contract fully or partially to implement the solutions. Table 3 End State Goals End-State Goals Create a new reward system Raise employee moral Increase employee retention Improve managerial synergy Need for new job designs Read More