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Riordan Human Capital Management Problem Solution

A. Describe the situation, including the opportunities and challenges.
b. Define the problem.
c. Describe the desired future state and goals against which to evaluate alternatives.
d. Identify two to four potential solutions. At what level in the organization do these solutions address the problem? Do you need to consider other levels in the organization as well?
e. Assess the alternative solutions.
f. Complete a risk assessment.
g. Present the recommended solution and the rationale behind the recommendation.
h. Identify the expected impact and value.
i. Provide a summary of how you would approach implementing the recommended solution and measuring its effectiveness.
Be sure to incorporate key concepts from your readings where appropriate.

See attached file for full problem description.


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The challenges of today's global business arena are legion. Much like emergency room doctors, effective managers must carefully, yet quickly and accurately analyze each situation, diagnose the correct problem and proceed to apply the correct solution. In this fast-paced, challenge wrought environment managers and the business organizations under their leadership have to make critical decisions on a routine basis. Making the correct decisions is essential to the survival of these operations, much in the same way that the survival of an emergency room patient depends on the correct diagnosis and treatment of an emergency room trauma. Just as emergency room doctors are successful in making correct diagnoses only when they follow a step-by-step diagnosis model, business managers can only identify the correct problems to solve, among the many they may face when they use the 9-step problem-solving model in correct order. Progressing in the correct order through the model will effectively guide managers toward identifying the correct problem, the most suitable available alternatives, and will ultimately help them in the implementation or execution of solutions. In the 9-step model begins this process by first describing the situation the at hand. A case in point is a complex business challenge at Riordan Manufacturing.

This paper will analyze the situation, opportunities and challenges of Riordan Manufacturing identifying the underlying problems with Riordan's human capital management using the 9-step problem solving model. The end-state goals and the proposed alternatives will help Riordan Manufacturing to improve human resource practices, giving Riordan a sustained competitive advantage (Dreher & Dougherty, 2001).

Situation Analysis (Step 1)
Riordan Manufacturing is an international plastics manufacturer with 550 employees and $46 million in projected annual revenues. Recently, Riordan made several strategic changes in the way it manufactures and markets its products. Declining sales and uneven profits over the past two years not only forced the company to change its sales approach but also prompted it to adopt a customer-relationship management (CRM) system. Sales teams rather than single salespeople now service customers with each team focusing on a particular customer segment. Teams typically include a sales person, product engineering specialist and customer service rep. The plan is that the team approach will improve sales (UOPOa, 2006).
Riordan Manufacturing has seen a consistent drop in employee satisfaction over the last 12 months and the increase of voluntary separations has doubled in the past year in every department. These numbers are alarming and speak of issues that could lead to disaster for Riordan if they are not recognized and quickly addressed.

Situation Analysis (Step 1)
Issue Identification
The first issue at hand is employee retention. It is evident that employees are leaving for higher pay. It is possible that Riordan is paying under the market average for these positions. This is a major concern for the research and development area in saving vital employee knowledge.

Secondly, the employee incentive program is an issue not only for management but also for the current employees. The sales incentives are structured for an individual salesperson rather than for a team. This issue has come about as a result of the change in the sales approach from individual accounts to a team approach incorporating a sales person, a product engineering specialist, and a customer service representative with support from research and development (UOPOa, 2006). The sales process has changed but the incentive/bonus process has not aligned itself to the change.

Another issue for Riordan is employee development and training. Riordan has done little to promote the training or development of its employees in recent years, an approach that would be a strategic advantage for the company. Training and development not only helps to attract top performers but will also provide incentive for retention (Dreher & Dougherty, 2001).
The human resources department reports to the finance department with no direct influence with the CEO, making it inefficient. Riordan needs a superior human resource management system to gain strategic advantage in human capital management (Dreher & Dougherty, 2001).

Finally employee satisfaction has dropped dramatically in the past year. This is because of employees' not feeling challenged, lack of appreciation, and lack of direction tied to the company's goals. Satisfied employees will promote a positive organizational climate and lead to increased productivity for Riordan (Dreher & Dougherty, 2001).

Opportunity Identification
Internally, each of these challenges present opportunities for learning and development. The company can evaluate current employees and determine their effectiveness in the new sales management system. The change process also provides opportunities for the management team to develop expertise in the areas of morale improvement, addressing and resolving employee dissatisfaction, and positive conflict management. The team approach to sales will provide opportunities for employees to collaborate and bring more complete customer solutions to the table.

Another opportunity is the indication that twenty-five percent of employees are high achievers. The company also has a large group of mid-tier performers who can be developed into high performers through training. Many of the employees like their jobs, are loyal, and want to stay with Riordan. Riordan has a reputation for treating employees well and the company is ISO9000 certified and practices the Six Sigma quality approach.

Further, Riordan has diversified product offerings and a diversified customer. New business opportunities exist in meeting the new needs of these customers.
Table 1
Issue and Opportunity Identification
Issue Opportunity Reference to Specific
Course Concept
(Include citation) Concept
Employee Retention
Riordan can learn better retention practices for the future including designing more effective compensations packages
According to the American Society for Training and Development (ASTD), retention is the number one issue facing corporate America today. Adding to the problem is the cost of attrition (Stone, 2000).
Effective Compensation Packages
Employee Incentive Program Riordan can use a strategically aligned incentive program to motivate to encourage employees to stay. Good HR practices include establishing a variety of incentives oriented toward a long-term organizational focus (Dreher & Dougherty, 2001). Incentive Programs as a Tool of Motivation
Employee Development and Training Riordan can use measurable training as a basis for merit raises that motivate current employees and will attract top performers. Training and development not only helps to attract top performers but will also provide incentive for retention (Dreher & Dougherty, 2001).
Successful Recruiting Practices, Motivation
Lack of an Effective Human Resources Department Riordan's management team must align its goals with the company's HR department. HR practices must be integrated and aligned closely, so that they reinforce each other and encourage behaviors that are compatible with organizational goals (Dreher & Dougherty, 2001). Motivation
Employee Satisfaction Riordan must keep its employees satisfied to retain them. Satisfied employees will promote a positive organizational climate and lead to increased productivity for Riordan (Dreher & Dougherty, 2001). Motivation

Stakeholder Perspectives/Ethical Dilemmas
There are several stakeholders to consider when looking at the current situation at Riordan Manufacturing and it starts with the investors of Riordan Industries who have seen investments declining over the past two years. From their perspective, Michael Riordan should be looking for a way to strengthen the company and turn profits around as quickly as possible so as not to lose more shareholders. Ethically, Riordan owes the shareholders a good return on their investment and must find a way to improve the current sales slump even if it means moving more of the manufacturing to the Hangzhou, China plant (UOPOa, 2006).
Another group of stakeholder is the customers, current, past, and new and how they perceive the changes within Riordan. The customers want to purchase a top quality product at a competitive price from a sound company they can trust. Riordan's responsibility is to make sure these customers are satisfied. The company must not be distracted by its internal issues, which can detract from the level of quality and service they rendered customers in the past.
The next set of stakeholders is the employees. A recent employee satisfaction survey shows a decline in employee job satisfaction and the senior management team cannot agree on the course of action that needs to be taken. The department heads are more concerned about their own employees and not the overall issue facing the company and the issue of what is best for all employees. There are issues with how the new customer-focused team approach to selling affects the morale of those involved with it and how it will change each person's role within the company. As these changes have been implemented along with moving more of the manufacturing to China, Riordan has seen a decline in employee retention (UOPOa, 2006).
Ethically Riordan must consider the changes it is implementing and decide what are the best solutions overall to satisfy all stakeholders and do not compromise the integrity of the company which has been the backbone of Riordan since its inception.
Table 2
Stakeholder Perspectives
Stakeholder Perspectives

Stakeholder Groups
The Interests, Rights, and ...

Solution Summary

This is a problem solution discussion for a fictitious organization called Riordan Manufacturing covering human resources issues.