Riordan Benchmarking

Running head: SYNOPSES '' RIORDAN BENCHMARKING

Riordan Manufacturing Benchmarking Synopses

University of Phoenix

MBA 530

Evaluate Compensation and Motivation Practices as they Relate to Organizational Strategy:

Boeing Aircraft Company

Employee motivation has a significant impact on any business. Low employee morale tends to affect productivity and a company’s overall effectiveness in running the business. In recent weeks, aircraft maker Boeing has been struggling with employee motivation as its contractual agreement with employees has neared expiration. A few years ago, employees agreed to what they considered a less than ideal compensation agreement due to the company’s huge financial losses. However, since that time, Boeing’s financial stability has returned, posting a record 1,044 commercial orders in 2006 and another record of 1,413 net orders in 2007 (Business & Company, 2008).

Due to what was seen as a sacrifice during the last negotiations to help save the struggling company, the sentiment among employees has been that they should be amply rewarded for their part in helping to save the company. Likewise, with strong profit gains, the employees have been expecting more from Boeing. After the union rejected this year’s first offer, Boeing came back with a second offer that included compensation incentives such as increases in lump sum merit awards and merit pay. Under the proposal, “A lump-sum payment…goes up from $2,500 to 5 percent of gross pay…[and] wage increase[s] go up to 9 percent over three years” (Gates, 2008, para. 9-10).

Despite coming back with a more lucrative offer in several areas, the second offer was also voted down. Many of the employees believe that the offers were an insult and did not show them that the company cares about their needs. Such sentiments are shared by the employees of Riordan in that the compensation being offered is insufficient and they do not feel the company is taking an interest in them.

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