Team B- Diana Barris, Nicole Bell, Jacqueline Chaney, Shawnda Davis, Hadeel Raouf, Kelly Tyler
February 11, 2013
Riordan Manufacturing Compensation Plan
Riordan Manufacturing is a worldwide plastics manufacturer that is headquartered in San Jose, California. Their organization has over 500 employees and prides themselves on providing their customers with high quality merchandise to satisfy their plastics needs. They hold an ISO 9000 certification which is an organization that establishes and measures quality control. In order to meet or exceed the level of quality required under ISO standards, Riordan Manufacturing will need to have knowledgeable and skilled employees within their organization. To attract premier candidates for their company, the compensation plan that is designed will need to be fair, rewarding, and competitive. This paper will outline the compensation plan for Riordan Manufacturing and include an evaluation of current trends and predict future trends, internal and external equity, a wage management process and retirement plan, financial influence on the plan’s options, and discuss the methods in which the plan will be communicated to members of the organization. Key Objectives
According to Martocchio (2009), “Compensation professionals promote effective compensation systems by meeting three important goals: internal consistency, market competitiveness, and recognition of individual contributions” (Martocchio, 2009, p. 19). It is essential that these objectives are met to retain employees and make them feel valued and appreciated; all while functioning within the organizational budget. As Riordan Manufacturing considers themselves to be a leader within their industry, they understand that listening to the voice of their employees and remaining flexible regarding the compensation benefits offered worth together in alignment with their company mission. As “compensation systems are changing” (Martocchio, 2009, p. 23), Riordan Manufacturing will do well to consider plans offered by their competitors so that they will remain an industry leader. Trends and Issues
An evaluation of current trends and issues in the company’s total compensation shows the company meeting goals in certain areas, but needs to improve in other areas. Riordan Manufacturing wants and “will maintain an innovative and team oriented working environment. By assuring that our employees are well informed and properly supported, we will provide a climate focused on the long-term viability of our company. Our Future must be focused in achieving and maintaining reasonable profitability to assure that the financial and human capital is available for sustained growth” (University of Phoenix, 2013, p.1). The company’s current trends such as the flexible benefits program, salary administration program, and the CRM system is used to help meet the organizations vision and goals, and keep the employees interested and motivated. However, technology changes each day and in today’s business world it is important to keep the company’s IT system updated to meet the demands of the customers, and the day-to-day operations. “Riordan has a system to track historical sales. In the past, most sales data was recorded using paper and pencil. In the last few years, the firm has managed the information electronically” (University of Phoenix, 2013, p.1). In the future it is best the company does an update to improve the communication between the different sites, employees, monitor inventory, customer demands, and sales. The company should prepare to make some changes in its current infrastructure to sustain profitability and growth within the company.
Internal and External equity
Internal equity is based on the employee's values and fairness, the values, and fairness of the pay relationships within the organization. "The pay...