One of the many essential aspects of business development, including project management, includes understanding how to develop a gap analysis. Many students feel that these projects are busy work; however, developed correctly the organization will better understand key points to the needed strategies that will assist an organization in obtaining industry leadership.
This particular research paper is based on the Riordan Manufacturing organization created by the University of Phoenix, and establishes a base parameter for what you may look at during the creation of your own gap analysis. Included is the introduction to the organization, situation analysis, stakeholder perspectives, ethical dilemmas, end-state vision, gap analysis, and the conclusion. Tables and appendixes referred to may not be available in this version of article.
Gap Analysis: Riordan Manufacturing
Riordan Manufacturing produces plastic parts including plastic beverage containers, automotive parts, aircraft related parts, and appliance related parts (Riordan Manufacturing, n.d.). The company’s revenue exceeded $1 billion and is a Fortune 1000 enterprise (Riordan Manufacturing, n.d.). Due to recent declines in sales and “uneven profits”, Riordan embraced changes that included adopting a customer-relationship management system and a Six Sigma quality approach (Riordan Manufacturing, n.d.). While these changes were developed to combat the developing issues with the business end of the company vision and needs, it unfortunately brought about decreases in production and employee satisfaction. In order to combat the issues related to the necessary changes in company practices, Riordan Manufacturing must develop human resource planning that address the needs of the employees and brings them on board with the goals and needs of the company.
In order to better understand the issues and opportunities facing Riordan, we have developed a gap analysis that examines the issues, opportunities, various views of stakeholders, ethical issues, and identifies the End-State Vision that is the ultimate goal of what we hope to accomplish. Additionally, we will examine the relationship between motivation and performance, identify components of effective retention and career development processes, review the concepts of Total Rewards, assess the impact of reward systems on organizational performance, and compare the different perspectives of human behavior in regards to how it impacts organizational reward systems. Together these aspects of human resources will enable us to develop a productive mission statement and strategic planning that will enable all stakeholders to embrace the mission and visions of Riordan.
A decrease in sales has developed from the recent dissatisfaction and decrease in performance by much of Riordan’s staff. Many companies develop motivation techniques to increase performance and bring value to both employees and the company. There are many theories that address link between motivation and performance the “Motivation Equation”: “Need theory, expectancy theory, equity theory, and procedural justice theory” (George & Jones, 2005, p. 179). Each of these theories examines how basic, survival, growth, social, behavioral, valence, emotional, and personal needs impacts the motivation of individuals and encourages work related performance. Understanding these motivations will enable Riordan to create effective strategies and increase performance.
With the decrease of performance has also come an increase in employee turnover rates. Maintaining a highly skilled and successful staff requires understanding why employees leave a company, and what methods can be used to prevent them from leaving a company. There are many factors in turnover rates – industry, job status, skill requirements, education, experience, community, and more. One objective would be to compare both previous company turnover rates to current turnover rates as well as to industry standards in turnover rates. Additionally, a review of current competitors for employees of the same skill sets is important, as well as careful review of the training process to prevent new employees from leaving due to lack of knowledge or understanding of their positions. This issue involves an opportunity to examine the training and skill development methods currently in place.
Riordan Manufacturing hired Human Capital Consulting to do an analysis of the current employee dissatisfaction and decreased performance (Riordan Manufacturing, n.d.). They conducted a survey which demonstrated that employees did not feel that pay rates demonstrated employee value. This issue offers Riordan the opportunity to analysis their current pay systems and develop pay systems which better suit both the industry standards and the employee needs. For instance, pay levels are imperative in competition for employees. Companies who do not hire at competitive wages are less likely to retain a skilled staff and may even loss out on opportunities to hire qualified staff. Examining the different methods for pay includes reviewing methods such as: “equity theory”, “Pay at risk”, “Performance – Contingent Pay”, “Internal versus External Job Pricing”, “Skill-Based Pay”, “Seniority-Based Pay”, “Benefit System Flexibility”, and “Benefit Level” (Dreher & Dougherty, 2001).
In addition to the survey discovering pay rate dissatisfaction, the survey also determined that many employees did not feel that there was any opportunity to grow within Riordan. While pay rates impact employee value, the ability to meet personal job growth needs is also imperative to retaining employees who might outgrow their current positions. Job development is an opportunity which provides value to employees and the company by enabling qualified employees to find their best fit or to understand how to reach their personal goals. Some methods for reaching these goals include: “Career Pathing”, “Succession Planning”, and “Skill Inventories” (Dreher & Dougherty, 2001). Providing effective communication on job requirements and necessary skills for different positions enables employees to develop along the paths of the positions they wish to hold. In addition, understanding what is required of a job can help companies develop employees who are valuable and successful in their positions.
Finally, Riordan is faced with the challenge that not all members of the leadership staff are in agreement about the issues and opportunities the company currently faces. Communication empowers individuals and groups to be more successful and work together towards common goals. In order for the strategies to be successful within the company, the leadership team must agree on the necessary changes that need to occur, how they will occur, and what team members will carry the torch. This is an opportunity for each member of the leadership team to share their concerns and primary focus as well as to learn what each other member values and how their departments are impacted by the changes in the company.
Stakeholder Perspectives/Ethical Dilemmas
Companies have many stakeholders – from stockholders through communities. Each stakeholder has their own needs in considering the value of the company, and these needs determine which aspects of the company will hold more value for them. Communities need a company who will bring value to the community with jobs, investments, and community growth. Government benefits from a company by receiving taxes and revenue. Consumers have a return on value by the services and products that a company produces and provides.
Another stakeholder to consider is investors, board members, and stockholders. These members are concerned for the value of their investment in the company, accountability to laws and regulations, and responsibility for actions. Additionally, the want community and social accountability to increase their value. These stakeholders will need disclosure of how the changes to the company will impact the costs to the company, such as the cost to implement the plan, and especially the cost should the plan need to have changes while in progress. To assure that the risks posed to these stakeholders are minimized, a detail plan of execution will be needed to gain their support.
The primary stakeholder being addressed in these plans is the employees. However, even if the plans are best they may be the most resistant to the changes that impact how their work will be impacted. If the change models are not carefully developed and methodically organized and implemented, this stakeholder group will resist the changes and ultimately cause its failure. Human resource departments measure value for the employees and these strategies are being developed to create value that will increase the value of the employees to the company, as well as create value for the employees. Stakeholders will have increased value if a company successfully implements strategies that improve value for employees.
Often ethical dilemmas arise when faced with company needs for profits and employee needs for value. With stakeholder needs and perspectives of value being completely different, it can bring about conflicts in developing strategies that are both fair and ethical. Increased value involves increased productivity and performance at decreased costs; however, when decreased costs include decreased value to employees it creates an ethical dilemma. Additionally, if decreased costs involve poor value to consumers it can cause ethical dilemmas as well. When considering strategies to increase value to stakeholders, it is important to recognize the needs of all parties involved.
Ultimately, Riordan can be a top performing company with satisfied stakeholders, even employees. In order to develop strategies that enable this success, we need to understand what our goals are and where we would like to see the company in two to five years. There are many things to consider – employee satisfaction, retention, and training. Riordan will develop a human resource strategy that is able to adapt to changes in the industry and community standards by integrating quality check systems that watch the industry and community for changes in pay standards, reward systems, and incentive programs. These changes will be implemented by developing yearly reports, and purchasing five year industry statistic reports.
The human resource department will be successful at maintaining a high performing staff by developing communication channels that enable employees to understand their value, benefits, opportunities, and other company to employee information. This information portal will be updated as often as needed and a monthly newsletter will announce important news and employee appreciation updates. Employee satisfaction can be developed, maintained, and cultivated by continued monitoring through both surveys and focus groups. During times of growth or company change, the human resource team will use surveys and focus groups to keep track of the needs of the employees and develop appropriate training programs that enable the company to prevent stress from employee confusion or lack of knowledge. Additionally, even during times when there are no changes, the HR department will do regular surveys to ensure quality communications and happy employees.
There are seven primary principles of effective employee management: “Selectivity in Recruiting”, “Incentive Pay”, “Employee Ownership”, “Training and Skill Development”, “Cross-Utilization and Cross-Training”, “Symbolic Egalitarianism”, and “Wage Compression” (Dreher & Dougherty, 2001). Each of these principles will be necessary in developing competitive employee packages to increase value to current and future employees. However, careful review of many different theories and a solid knowledge on human motivation principals will be necessary in understanding which changes will be most effective to solve the problems facing Riordan.
In order to successful present strategies and solutions to the employee needs regarding pay, Riordan will research the pay rates of other companies – both locally and as an industry standard. Additionally, Riordan will review how the incentive and rewards programs impact the value to employees and increase performance standards. These pricing strategies – similar to marketing strategies for pricing services and products – will be used to increase value to the employees without decreasing the value of the employees to the company.
In addition to a focus on pay strategies, Riordan must also examine the Total Reward system to find answers to improving employee satisfaction and create value for all members of this stakeholder group. The Total Reward System includes these items: “Compensation, benefits, social interaction, security, status/recognition, work variety, workload, work importance, authority/control/autonomy, advancement, feedback, work conditions, and development Opportunity” (Dreher & Dougherty, 2001). Development of this system will require examining job design models, goal setting, organizational objectives, as well as benefits and pay rates (George & Jones, 2005).
Finally, there is much that the human resource department will need to do in order to successfully build employee/company relations. Much of this will not be able to be accomplished unless complete communication is developed. Most communication cannot be successfully developed only by newsletters or meetings, it will be imperative to develop a company portal that provides set standards and references that are available to all members of the company, including an employee portal that allows employees to manage their relationship with the company. Riordan will need to develop an information hub that addresses the needs of the employees and enables solid shared communication channels.
There are many challenges that Riordan has faced in the past and there will be many more in the future. Just as the industry changes in products and services, so do the needs of stakeholders. Addressing needs of stakeholders requires a clear understanding of what issues and opportunities are present and open communication channels that allow the problems to be faced with information and knowledge. There are many different strategies and theories that can be applied to the motivational issues that are causing the decrease in performance and production, Riordan can successfully use these to carefully implement planning and development within the human resource department while growing the value of their mission statements and company visions. Employees are one of a company’s greatest resources, and their value is a direct result of company decisions regarding total reward systems and motivational strategies.
Dreher, G., & Dougherty, T. (2001). Human Resource Strategy, 1e. Retrieved on December 09, 2007, from University of Phoenix Online.
George, J., & Jones, G. (2005). Understanding & Managing Organizational Behavior. Boston, MA: Pearson Prentice Hall.
Riordan Manufacturing. (n.d.) Introduction. Retrieved on December 09, 2007, from University of Phoenix Online, MBA 530.