Issue and Opportunity Identification
Riordan Manufacturing is a global plastics producer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Recently, Riordan made several strategic changes in the way it manufactures and markets its products. Because of declining sales and uneven profits over the past two years, Riordan adopted a customer-relationship management (CRM) system. Primarily sales teams instead of single salespeople, with each team focusing on a particular customer segment, now service customers. Teams typically include a sales person, product engineering specialist and customer service representatives. The hope is that the team approach will improve sales. As changes have been implemented, employee retention numbers have declined. The company recently conducted an annual employee survey, which showed a decrease in overall job satisfaction, particularly in the areas of compensation and benefits. Recent performance data identified 25% of the employees as high achievers, a large middle group as average, and a small group as under achievers. The current rewards system is almost non-existent.
One of the issues identified is the absence of the organizational rewards systems. Riordan is facing declining morale and work ethics. Employees are not satisfied with their compensation by performance. One possible opportunity Riordan can do is create a performance management system that would reward employees by performance as opposed to time and grade. Considerations of creating a performance rewards system are in line with Riordans business strategy and their technology which de...
... middle of paper ...
...ok two different approaches to implement their rewards programs which have proven very successful. Franklin Covey's total rewards system consisted of:
1. Institutionalize a performance management system.
2. Revise the performance-based pay plan.
3. Develop base pay guidelines and strategy revisions.
4. Develop a communications strategy and implementation plan.
5. Formalize Franklin Covey's reward and recognition program.
6. Organize a companywide, results-based development strategy.
7. Create a recruitment and selection system.
8. Improve flexibility by overhauling benefits.
9. Design and implement a career and succession planning system.
10. Design and implement a long-term incentive program.
Franklins system resulted in clear accountability, clear direction, and promoted employee feedback that provided a continuous improvement opportunity for the system.
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