The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Production is divided among three plants: plastic beverage containers in Albany, Georgia; custom plastic parts in Pontiac, Michigan; and plastic fan parts in Hangzhou, China. Research and Development is conducted at corporate headquarters in San Jose, California. Riordan's major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.
The cause of the problem that Riordan Manufacturing is facing is rooted from several strategic changes in the way it manufactures and markets its products. The declining sales and uneven profits over the past two years not only forced the company to change its sales processes, but prompted them to adopt a customer-relationship management (CRM) system. So now customers are serviced primarily by sales teams rather than single salespeople, with each team focusing on a particular customer segment. Teams typically include a sales person, product engineering specialist and customer service representatives. The company is hoping that the team approach will improve sales. With some work being redirected to a new manufacturing facility in China, and plants have been restructured into self-directed work teams, the changes implemented have caused the employee retention numbers to decline. An employee survey showed a decrease in overall job satisfaction, particularly in the areas of compensation and benefits.
Riordan's employees comprise three major demographic groups. Baby boomers make up the bulk of the managerial and about half of the manufacturing staff; GenXers make up the majority of the professional staff, as well as some of the manufacturing staff; and the GenY contingent are the newest hires, found primarily in manufacturing, engineering and IT. These three groups have radically different perspectives on rewards and motivation, valuing everything from interesting work to bigger paychecks.
Recent performance data identified about 25 percent of the employees as high achievers, a large group of mid-tier performers and a small group of people who are not performing well at all. Unfortunately, the current reward system is barely based on performance, instead recognizing cost-of-living increases, seniority and position. Faced with declining morale and work ethic, Riordan managers have been pressuring the CEO to "do something" about the rewards system.
New Concepts in Strategic Management
With the recent changes going on in employee relations, tackling the workplace requires a new form of public management based on the following building blocks (Barzelay, 2001):
Strategy - What is the public value the organization is really trying to create Answering this question forces the managers to figure out their policy goals and exactly what role their agency should play in fulfilling those goals.
Workplace design - Like a good roadmap, a sound design helps managers