Riordan Manufacturing is facing declining sales with an up and down profit margin that has caused the company to implement a new strategic plan. The company has also outsourced some of its work to a new manufacturing plant in China to alleviate some of the high cost of labor in the US, which should help with the company’s profitability. There has also been a restructuring of the sales department as they “adopt a customer-relationship mangement (CRM) system” (Secnario, 2007). The changes in the company’s strategic plan, the outsourcing of jobs and the change in the sales department from an individual salesperson to a sales team has impacted employee morale, motivation and retention. The annual employee survey indicated a decrease in employee job satisfaction, “particularly in the areas of compensation and benefits” (Scenario, 2007).
Clearly, management and human resources (HR) need to re-examine and revisit the current staffing practices to determine employee motivation. “However, staffing practices can influence motivation levels within work groups and training and development practices can be used to increase the motivation to perform in a variety of ways” (Dreher and Dougherty, 2001, p. 45). A clear understanding of what the employees consider motivational will be helpful in reducing attrition, increasing productivity and maintaining employee satisfaction.
Riordan Manufacturing implementation of its new strategic plan has caused internal issues for the company and the employees and could likely adversely affect the company’s finances. Employees are no longer able to work individually to secure sales that will net high commissions, but will have to share the commission checks with other employees within the team. This change in the work environment has impacted high performers who believe that others are not carrying their weight but are equally receiving commission checks.
Therefore, the company will need to determine what can be done to retain its current sales staff while maintaining and increasing its sales revenues. In order to reach a solution, management and HR will need to find out what is causing attrition, low morale and the decrease in employee motivation. “Thus, managing motivation would seem to require a full understanding of both the organization’s culture—the mix of role requirements and the rewards and penalties associated with various ways of behaving—and the values, interests, and needs of individuals” (Dreher & Dougherty, 2001, p. 111).
The company’s use of a gap analysis and a human resources motivational model can help to analyze the difference of where the company is today in regard to employee motivation and where the company needs to be in order to satisfy employees, the company and its stakeholders.