Gap Analysis: Riordan Manufacturing

R&D has suffered from declining sales over the past two years. In response to the falling profits R&D identified a new business plan to implement a customer-relationship management system. Implementation of the new business plan placed attention on the diminishing employee morale and declining retention. To implement the new business concept the organization will have to re evaluate its Human Resource system, which includes its reward and compensation system. Prompted by the competition in the marketplace R&D must identify the issues that are at the root of the diminishing employee satisfaction.

Situation AnalysisIssue and Opportunity IdentificationR&D is undergoing change, which has negatively impacted employee motivation. The implementation of the Six Sigma quality approach some work has been sent to China. Many employees are fearful of the new changes that are being implemented. Also many employees are assuming that their bonuses are at risk. R&D has an opportunity to take a proactive approach to the decreased morale by using the data obtained through employee surveys to improve employee perceptions.

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The current organizational practices can be reevaluated and modified to influence employees' job satisfaction.

"This first step includes an understanding of the industry in which the organization operates and how it plans to compete."(Dreher and Doherty, 2001, p. 36). R&D has identified employee concerns but has not identified potential solutions outside of compensation. R&D can conduct a benchmarking study to identify potential solutions used by other companies that faced similar issues.

Several R&D leaders feel that the incentive program needs to be changed in response to the decreased retention rate and diminishing employee satisfaction. Many believe that the incentive program will allow the organization to achieve company goals. "the greater the alignment, or fit, between the organization and the compensation system, the more effective the organization." (Dreher and Doherty, 2001, p. 10).