The purpose of this paper is to evaluate Riordan Manufacturing’s current situation and identify the changes that the company will need to implement in order to align its compensation and rewards systems to the new corporate sales strategy.
As Riordan focuses on the transformation, some changes are clearly needed in order to get the company ready to face the challenges and opportunities presented by this new approach. These changes will be key factors in ensuring the company’s future growth and success.
Situation Analysis
Issue and Opportunity Identification
Riordan Manufacturing is a global producer of plastics with production divided among three plants: Albany, Georgia (plastic beverages containers), Pontiac, Michigan (custom plastic parts) and Hangzhou, China (plastic fan parts). The company employs a total of 550 people and has projected annual earnings of $46 million. Major customers include automotive parts manufacturers, aircraft manufacturers, the Department of Defense beverages makers and bottlers and appliance manufacturers.
As a result of declining sales and uneven profits for the past two years, the company has changed its sales processes and has adopted a customer-relationship management system. Under this new approach customers are serviced primarily by sales teams instead of a single sales representative, with each team focusing on a particular customer segment. A typical team includes a sales person, a product engineering specialist and a customer service representative. The company hopes that this approach will improve sales and increase profitability.
However, in order for the company to achieve this goal, management is going to have to deal with some serious issues related to the company’s compensat ...