The success of a company is often a direct result of employees who continue to believe in the organizations vision through changing times. Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earnings of $46 million (University Of Phoenix, 2008). After experiencing a decline in sales, President Michael Riordan and the leadership team realized the importance of adapting to change to survive in the industry. Transformation is one of the most difficult tasks for a business to accomplish. Successful businesses recognize the need for change stems from the demands of the market, financial drivers, and political influences (Day & Jung, 2000).
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Decrease in employee retention numbers, as a result of change, can lead to a decrease in job satisfaction. The uncertainty of the future can leave the remaining employees with an overall decrease in job satisfaction and productivity. The organization has the opportunity to improve the job satisfaction of the employees through determining the values and needs of the employees. â€œValues, perceptions, and ideas of what is important are the three components of job satisfaction. People will be satisfied with their jobs as long as they perceive that their jobs meet their important values.â€ (Noe, Hollenbeck, Gerhert, & Wright, 2003, p. 325) Once Riordan meets the three components of job satisfaction for the employees, the organization will have the foundation necessary to implement a successful transformation.
Compensation is a concern in two areas, Incentive and Pay Structure. The new direction of the sales process and adaptation of a customer-relationship management (CRM) has generated concern amongst the salespeople that individual bonuses are at risk. Evidence indicates Riordan is underpaying key programmers by approximately 15%. The organizations compensation system not being aligned with the company strategy increases employee concern. Riordan must re-evaluate the incentive and pay structure, and create one to influence future behavior and compensate current responsibilities. Designing a compensation plan that meets the needs of the employees and connects to the strategy of the company improves the organizations opportunity for success.
The Human Resource system is inadequate and not used to its potential. Human Resource Management is crucial to change. Developing sound HRM practice can be central to the organizations performance (Dreher & Dougherty, 2001, p. 6). Effectively using the HR system, provides the organization with the opportunity to improve the performance of the firm through recruiting, training, and essential HRM practices.
Employees are crucial to the success of the company. The Riordan Leadership team lacks focus and is inconsistent in opinions. These inconsistencies have led to a lack of trust and the belief that management is preferential in determining what employees receive the opportunity to advance. Management must recognize the opportunity to gain the trust of the employees through consistently applying HR policies, programs, rules, and rewards (Dreher & Dougherty, 2001, p. 43). Riordan has the opportunity to develop succession planning to retain talent and improve the perceptions of the management team.
Stakeholder Perspectives/Ethical Dilemmas
Businesses are responsible...