EMPLOYEE MOTIVATION AT THE INFORMATION TECHNOLOGY CENTER OF VIET NAM BANK FOR SOCIAL POLICIES

EXECUTIVE SUMMARY Today, in the process of innovation and development, human resources are recognized as the most important factor, decisive factor to success, failure, prestige, status, ability to develop sustainably of the organization. Therefore, all countries place people at the center of development and formulate policies and strategies for human development to serve the needs of the present and the future. The Viet Nam Bank for social policies (VBSP) has officially started its operations since March 11th, 2003, based upon the, re-organization of the Vietnam Bank for the Poor and separation, from Vietnam Bank for, Agriculture & Rural Development (VBARD) for the, purpose of separating the preferential credit from the commercial credit in commercial banks. VBSP acts as a non-profit credit institution with a compulsory reserve ratio of 0% and its solvency is, guaranteed by the Government. It is, exempted, from deposit insurance, taxes. VBSP is a State-owned credit, institution that is currently in charge of providing policy credit to the poor and, other policy beneficiaries. VBSP implements such basic operations of a bank as: capital mobilization (from international and domestic individuals and organizations; receiving capitals from the, government and People’s Committee, etc.); extending loans to the poor and other policy beneficiaries and payment services. Implementing the information technology development strategy plan in VBSP''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''s Strategic Development Plan for the, period of 2011-2020, applying modern technology as per the operation of VBSP to improve labor productivity, increase the efficiency of professional handling in the, VBSP. ITC has successfully implemented the Upgrading and Informatics modernization project and continues to invest in many IT infrastructure, projects to develop, software and apply more deeply information technology into business activities towards a professional and modern VBSP. In the context of limited resources (financial and human), ITC is determined to play a key strategic role in the next stage of VBSP. What is required to do ITC''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''s operation to achieve the highest efficiency. How to improve employee motivation at ITC. Therefore, the author would like to choose the topic “Employee motivation at the Information technology center of Viet Nam bank for social policies”. The objectives of the research are to: (1) Find and choose the most suitable the theoretical background related to employee motivation; (2) Analyze the current employee motivation at the Information technology center of VBSP. Assess the strengths and weaknesses of employee motivation at this center; (3) Propose recommendations to enhance employee motivation at the Information technology center of VBSP. The researcher used secondary data and primary data to implement the research. Primary data were collected by indepth interviews with 3 managers of ITC-VBSP and survey (70 employees who was working in ITC-VBSP). The reseacher used qualitative method to analyze secondary data collected. For primary data, the researcher used quantitative method over some statistical techniques consist of: Cronbach’s Alpha, EFA, regression analysis and descriptive analysis by means and standard diviation. The survey results show that Pay has the strongest impact on employee motivation at ITC, then Recognition, Relation with other and Responsibility repectively. The ITC has some achievements in employee emotioning, such as Salary temporarily ensures the living standard for employees to help them feel secure in their work; The result performance of the tasks are assessed at the end of the month; have very close relationship within their department… The researcher also gave out some solution to improve employee motivation at ITC such as enhancing and supplementing the salary payment mechanism; Focusing to assign responsibility to Employees which are allowed to do jobs that are suitable for their forte ability; Renovate the rewarding work through periodic increase in commendation every month or quarter so that the reward is timely… Due to limited time and knowledge, the researcher still can not takes a deeper analyze of employee motivation at ITC-VBSP. However, the thesis can be used as a reference and base for more intensive study on employee motivation in particular in branch or district transaction offficer in VBSP system.

NATIONAL ECONOMICS UNIVERSITY

NEU BUSINESS SCHOOL

-o0o -NGUYEN VIET BAC

EMPLOYEE MOTIVATION AT THE INFORMATION TECHNOLOGY CENTER OF VIET NAM BANK FOR SOCIAL POLICIES

MASTER OF BUSINESS ADMINISTRATION

HANOI – 2020

NATIONAL ECONOMICS UNIVERSITY

NEU BUSINESS SCHOOL

-o0o -NGUYEN VIET BAC

EMPLOYEE MOTIVATION AT THE INFORMATION TECHNOLOGY CENTER OF VIET NAM BANK FOR SOCIAL POLICIES

MASTER OF BUSINESS ADMINISTRATION

THESIS

SUPERVISOR: PH.D TRAN THI MINH HUONG

HANOI – 2020

First and foremost, I am deeply grateful to the Business School, NationalEconomics University (BSNEU) with all the members, lecturers and assistants forthe knowledge and experience that has been shared through many lectures,discussions and exams during EMBA program

Next, I would like to express my sincere gratitude to my supervisor, Ph DTran Thi Minh Huong for your patience, motivation, enthusiasm, and immenseknowledge, guidance helped me in all the time of research and writing of thisthesis

I would like to sincerely thank the Board of Directors and co-workers atInformation Technology Center – The Viet Nam bank for social policies for theirsupporting in collecting information as well as data related to the research topic andcreate the best conditions for me to complete this graduation thesis

Last but not the least, I also thanks to my family, without theirencouragement, support and understanding, it would be impossible for me to finishthis work

Although I have made many efforts to complete the thesis with all myenthusiasm and abilities, but can not avoid the, imperfections, I look forward toreceiving valuable contributions from supervisor, teachers, lectures of BSNEU andall member of ITC-VBSP

Hanoi, October 2020

Viet Bac Nguyen

TABLE OF CONTENTS

ACKNOWLEGMENT

ABBREVIATIONS

LIST OF FIGURES

LIST OF TABLES

EXECUTIVE SUMMARY -1

CHAPTER 1: INTRODUCTION -3

1.1 Rationale -3

1.2 Research objectives -4

1.3 Research questions -5

1.4 Research methodology -5

1.4.1 Research process -5

1.4.2 Data collection method -5

1.4.3 Data analysis -6

1.5 Research Scope -6

1.6 Research Structure -6

CHAPTER 2: THEORETICAL BACKGROUND OF EMPLOYEE MOTIVATION IN THE ORGANIZATIONS -8

2.1 Definitions on motivation and employee motivation -8

2.1.1 Definitions of motivation -8

2.1.2 Employee motivation definition -8

2.2 Motivation theories -9

2.2.1 Maslow’s Hierarchy of Needs -9

2.2.2 Victor Vroom’s Expectancy Theory -11

2.2.3 The Two-Factor Theory (Herzberg) -15

2.3 Proposed research model applied in the thesis -16

CHAPTER 3: ANALYSIS OF THE CURRENT EMPLOYEE MOTIVATION -21

3.1 Overview of ITC and Viet Nam Bank for social policies. -21

3.1.1 Foundation and development of Information Technology Center and VBSP -21

3.1.2 Organizational structure of Information Technology Center. -26

3.1.3 Performance result in 2019 -27

3.1.4 Human resources at Information Technology Center. -29

3.2 Data analysis -34

3.2.1 Reliability of measurement scales (Cronbach’s Alpha) -34

3.2.2 Exploratory Factor Analysis -37

3.2.3 Regression Analysis and Hypothesis Testing -40

3.3 Analyzing employee motivation based on Herzberg theory at Information Technology Center -44

3.3.1 Pay -44

3.3.2 Recognition -45

3.3.3 Relation with others -46

3.3.4 Responsibility -47

3.4 Assessment on employee motivation of Information Technology Center -48

3.4.1 Achievements -48

3.4.2 Shortcomings -49

3.4.3 Causes of shortcomings -50

CHAPTER 4: SOLUTIONS TO IMPROVE EMPLOYEE MOTIVATION AT INFORMATION TECHNOLOGY CENTER -52

4.1 Business orientation and executive resolution agenda for 2020 and up to 2025 -52

4.2 Solutions to improve employee motivation in Information Technology Center -56

CONCLUSION -59 REFERENCES

APPENDIX

Appendix 1 EMPLOYEES MOTIVATION QUESTIONAIRE

Appendix 2: INTERVIEW QUESTION FOR MANAGER

Appendix 3: SURVEY RESULTS

SPSS Statistical Product and Services Solutions

LIST OF FIGURES

Figure 1.1 Research process. -6

Figure 2.1 Maslow’s Hierarchy of needs -11

Figure 2.2 Victor Vroom’s Expectancy Theory -12

Figure 2.3 Two-Factor Theory -17

Figure 2.4 Model applied in the thesis -18

Figure 3.1 The Organization Structure of VBSP -27

Figure 3.2 The Organization structure of Information Technology Center -30

Figure 3.3 Gender of employees -33

Figure 3.4 Year of working of employees -33

Figure 3.5 Educational qualification of employees -33

LIST OF TABLES

Table 2.1 Employees motivation dimention -21

Table 3.1: Cronbach’s alpha summary -38

Table 3.2: Cronbach’s alpha summary after removed RO3 (Relation with others)- 39 Table 3.3: Cronbach’s alpha summary after removed QS1 (Quality of supervision) -39

Table 3.4 Reliability test of factor “Employee Motivation” -39

Table 3.5 KMO and Bartlett's Test -40

Table 3.6 Total variance explained -40

Table 3.7: Rotated Component Matrix -42

Table 3.8: KMO and Bartlett's Test for Dependent variable -44

Table 3.9 Model Summary -44

Table 3.10 ANOVA -45

Table 3.11 Coefficients -45

Table 3.12 Model Summary -46

Table 3.13 ANOVA -46

Table 3.14 Coefficient Correlations -47

Table 3.15 Coefficients -47

Table 3.16 Assessment towards Pay factor -48

Table 3.17 The respondents towards Pay factor -49

Table 3.18 Assessment towards Recognition factor -50

Table 3.19 Assessment towards Relation with others factor -51

Table 3.20 Assessment towards Responsibility factor -51

Table 3.21 Assessment towards Employee motivation factor -52

EXECUTIVE SUMMARY

Today, in the process of innovation and development, human resources arerecognized as the most important factor, decisive factor to success, failure, prestige,status, ability to develop sustainably of the organization Therefore, all countriesplace people at the center of development and formulate policies and strategies forhuman development to serve the needs of the present and the future

The Viet Nam Bank for social policies (VBSP) has officially started itsoperations since March 11th, 2003, based upon the, re-organization of the VietnamBank for the Poor and separation, from Vietnam Bank for, Agriculture & RuralDevelopment (VBARD) for the, purpose of separating the preferential credit fromthe commercial credit in commercial banks VBSP acts as a non-profit creditinstitution with a compulsory reserve ratio of 0% and its solvency is, guaranteed bythe Government It is, exempted, from deposit insurance, taxes VBSP is a State-owned credit, institution that is currently in charge of providing policy credit to thepoor and, other policy beneficiaries VBSP implements such basic operations of abank as: capital mobilization (from international and domestic individuals andorganizations; receiving capitals from the, government and People’s Committee,etc.); extending loans to the poor and other policy beneficiaries and paymentservices

Implementing the information technology development strategy plan inVBSP's Strategic Development Plan for the, period of 2011-2020, applying moderntechnology as per the operation of VBSP to improve labor productivity, increase theefficiency of professional handling in the, VBSP ITC has successfully implementedthe Upgrading and Informatics modernization project and continues to invest inmany IT infrastructure, projects to develop, software and apply more deeplyinformation technology into business activities towards a professional and modernVBSP

In the context of limited resources (financial and human), ITC is determined

1

to play a key strategic role in the next stage of VBSP What is required to do ITC'soperation to achieve the highest efficiency How to improve employee motivation atITC Therefore, the author would like to choose the topic “Employee motivation atthe Information technology center of Viet Nam bank for social policies”.

The objectives of the research are to: (1) Find and choose the most suitablethe theoretical background related to employee motivation; (2) Analyze the currentemployee motivation at the Information technology center of VBSP Assess thestrengths and weaknesses of employee motivation at this center; (3) Proposerecommendations to enhance employee motivation at the Information technologycenter of VBSP

The researcher used secondary data and primary data to implement the research.Primary data were collected by indepth interviews with 3 managers of ITC-VBSP andsurvey (70 employees who was working in ITC-VBSP) The reseacher used qualitativemethod to analyze secondary data collected For primary data, the researcher usedquantitative method over some statistical techniques consist of: Cronbach’s Alpha,EFA, regression analysis and descriptive analysis by means and standard diviation

The survey results show that Pay has the strongest impact on employeemotivation at ITC, then Recognition, Relation with other and Responsibilityrepectively The ITC has some achievements in employee emotioning, such asSalary temporarily ensures the living standard for employees to help them feelsecure in their work; The result performance of the tasks are assessed at the end ofthe month; have very close relationship within their department…

The researcher also gave out some solution to improve employee motivation

at ITC such as enhancing and supplementing the salary payment mechanism;Focusing to assign responsibility to Employees which are allowed to do jobs thatare suitable for their forte ability; Renovate the rewarding work through periodicincrease in commendation every month or quarter so that the reward is timely…

Due to limited time and knowledge, the researcher still can not takes adeeper analyze of employee motivation at ITC-VBSP However, the thesis can be

used as a reference and base for more intensive study on employee motivation inparticular in branch or district transaction offficer in VBSP system

CHAPTER 1 INTRODUCTION

Recognizing the importance of motivation for work, managementorganizations are making great efforts to better understand and understand thephenomena that form, the basis of man’s need to create, to develop, to progress Thelevel of motivation of employees is actually a topic that both theoreticians andpractitioners approach with increasing interest, since the motivation of employeesoccupies a significant place in the research of organizational behavior Today, thefocus of the researcher focuses on intrinsic criteria for job satisfaction, where, apartfrom the personality trait, attention is focused on examining the impact of theorganization and family, balance on the motivation of the employee, or in general tohis satisfaction with the quality of life Modern motivation theories indicate that themotivation that employees feel about their work is less related to material rewardsand more to the job design, itself As a result, initiatives for expansion, ie

“enrichment of work”, have been used as key terms: empowerment, creativity andinnovation, flexibility, autonomy, intrinsic motivation, team work Motivation ofemployees represents the level of energy, dedication and creativity that theemployees of the organization bring to their jobs Motivated employees helporganizations to survive and advance, they are more, dynamic and productive, but

3

realizing the importance of employee motivation raises the question of how toenable it in the context of modern fast-changing jobs The starting point of each,

manager is to see and understand what motivates employees in the context of theroles they perform, because of all the functions that the manager does, motivation ofemployees is certainly the, most complex, given the fact that what motivatesemployees is constantly changing

The Viet Nam Bank for social policies (VBSP) has officially started itsoperations since March 11th, 2003, based upon the re-organization of the VietnamBank for the Poor and separation from Vietnam Bank for Agriculture & RuralDevelopment (VBARD) for the purpose of separating the preferential credit fromthe commercial credit in commercial banks VBSP acts as a non-profit creditinstitution with a compulsory reserve ratio of 0% and its solvency is guaranteed bythe Government It is exempted from deposit insurance, taxes VBSP is a State-owned credit institution that is currently in charge of providing policy credit to thepoor and other policy beneficiaries VBSP implements such basic operations of abank as: capital mobilization (from international and domestic individuals andorganizations; receiving capitals from the government and People’s Committee,etc.); extending loans to the poor and other policy beneficiaries and paymentservices

Implementing the information technology development strategy plan inVBSP's Strategic Development Plan for the period of 2011-2020, applying moderntechnology as per the operation of VBSP to improve labor productivity, increase theefficiency of professional handling in the VBSP ITC has successfully implementedthe Upgrading and Informatics modernization project and continues to invest inmany IT infrastructure projects to develop software and apply more deeplyinformation technology into business activities towards a professional and modernVBSP

In the context of limited resources (financial and human), ITC is determined

to play a key strategic role in the next stage of VBSP What is required to do ITC'soperation to achieve the highest efficiency How to improve employee motivation

Therefore, the author would like to choose the topic “Employee motivation at the

Information technology center of Viet Nam bank for social policies”.

2 Research objectives

Synthesize the theoretical background related to employee motivation;

Analyze the current employee motivation at the Information technologycenter of VBSP Assess the strengths and weaknesses of employee motivation atthis center

Propose recommendations to enhance employee motivation at theInformation technology center of VBSP

3 Research questions

What are the factors affecting employee motivation?

What are the current employee motivation of VBSP's ITC? What arestrengths, weaknesses, and their root causes?

What should VBSP's ITC do to improve its employee motivation?

4 Research methodology

The research conducted via 5 steps below:

5

Determining research objective

Data collection

Analyze the current employee motivation at Information

technology center of VBSPSecondary data Primary data

Proposing recommendation to improve employee motivation

at Information technology center of VBSP

Figure 1.1 Research process

Secondary Data

Secondary data were collected from the previous studies, textbooks,published documents, research papers, articles on specialized journals, etc Internalreports and documents of ITC from 2017 – 2019

Online survey questionnaires were sent to the whole of ITC’s employees (70peoples) The number of respondents to the survey is 70 All survey forms collected

8 Research Scope

Research object: This thesis focuses employee motivation at the Informationtechnology center of VBSP

Location Scope: Research conducted at VBSP’s ITC

Time: + Secondary data: from 2017 to 2019

Chapter 2: Theoretical background of employee motivation in theorganization.

Chapter 3: Analysis of employee motivation at the InformationTechnology Center

Chapter 4: Solutions to improve employee motivation at InformationTechnology Center

CHAPTER 2: THEORETICAL BACKGROUND OF

EMPLOYEE MOTIVATION IN THE ORGANIZATIONS

11 Definitions on motivation and employee motivation

12 Definitions of motivation

The term motivation is derived from the Latin word “movere” which means

“to move” The definition, of motivation in Cambridge, dictionary is: “enthusiasmfor doing something” An extended definition of motivation encompasses the idea

of promoting individual’s willingness to invest more efforts to achieve specificobjective: Steers, R (1984) define, motivation as “that which, energizes, directs,and sustains human behavior”

Conroy (1994) has defined motivation as “a person’s active participation inand commitment to achieving the prescribed results.”

Bartol and Martin (1998) define motivation as “a force, that energizesbehavior, gives direction to behavior, and underlies the tendency to persist”

Stephen P Robbins and Mary K Coulter (2011): “motivation refers to theprocess by which a person’s efforts are energized, directed, and sustained towardattaining a goal”

In summary, this work will use the definition by Steers, R (1984):Motivation is defined as that which energizes, directs, and sustains human behavior.This definition has three key elements: energy, direction, and persistence

R Kanfer (1990) define employee motivation as the psychological forceswithin a person that determine the direction of that person’s behavior in anorganization, effort level, and persistence in the face of obstacles

The three key elements of Employee motivation:

- Direction of behavior: Direction of behavior refers to the behavioremployees choose to perform from the many potential behaviors they could

9

- Level of efforts: How hard does a person work to, perform a chosenbehavior? It is not enough for an organization to motivate employees to performdesired functional behaviors; the organization must also motivate them to work hard

at these behaviors

- Levels of persistence: When faced with obstacles, roadblocks, and stonewalls, how hard does a person keep trying to perform a chosen behaviorsuccessfully?

Because, motivation determines what employees do and how hard anddiligently they do it, people might think that an employee’s motivation to do a job isthe same as the, employees job performance In fact, motivation and performanceare two distinct aspects of behavior in an organization Performance is an evaluation

of the results of a person’s behavior: It involves determining how well or poorly aperson has accomplished a task or done a job Motivation is only one factor amongmany that contributes to an employee’s job performance Relation betweenmotivation and performance: Motivation is only one of several factors that canaffect performance, a high level of motivation does not always result in a high level

of performance And, conversely, high performance, does not necessarily imply thatmotivation is high: Employees with low motivation may perform at a high level ifthey have a great deal of ability

14 Motivation theories

15 Maslow’s Hierarchy of Needs

In 1954, Maslow first published “Motivation and Personality”, whichintroduced his theory about how people satisfy various personal needs in the context

of their work He, postulated, based on his observations as a humanisticpsychologist, that there is a general pattern of needs recognition and satisfaction thatpeople follow in generally the same sequence He also theorized that a person, couldnot recognize or pursue the next higher need in the hierarchy, until her or hiscurrently recognized need was substantially or completely satisfied, a concept called

Self-Self-EsteemLove and BelongingSafe and sercurity needs

Physiological Needs

prepotency

Figure 2.1 Maslow’s Hierarchy of needs

(source: Stephen J Skripak,2016 Fundamentals of Business )

Physiological needs (Job Oppootunity, Fair Compensation, Reasonableworking hours, Fair benefits, access to food & drinks, etc): Of the five types ofneeds, physiological, needs are the lowest needs of, humans There are the basicneeds to sustain human life such as the need for eating, sleeping, housing, heating When these needs are not met to the level necessary to sustain life, other humanneeds will not be able to further be successfully fulfilled

Safety and security needs (Fair treatments of Employees, Workers rights,Safe working environment, Medical Insurance, etc): life safety is the most basicneed, a premise for, other contents such as job stability, environmental safety,occupational safety, etc These are quite basic and popular needs of human

Love and belonging needs (Comradery among colleagues, Inclusiveness(lack of discrimination), minimal office policies, Collaborative Culture, no blameculture): social needs include the need for communication, the need for love,closeness, appreciation, support, desire for inclusion, compassion, love, friendship,affection

Esteem needs(Respect of management and colleges, appropriate level ofdecision manking independence, Fair Performance Management system, Career

11

Growth, Personal Development): a person’s needs for internal esteem factors such

as self-respect, autonomy, and achievement and external esteem factors such asstatus, recognition, and attention

Self-actualization needs (Able to contribute positively toward a greater goal,Contributing to Humanity, Building a legacy ): a person’s needs for growth,achieving one’s potential, and self-fulfillment; the drive to become what one iscapable of becoming

According to Maslow: Satisfaction of the needs of individuals begins withthe lowest need, as only when the lower needs are satisfied, the new needs appear.Managers who, want to motivate their employees must first understand, where theemployee is in the needs hierarchy, thereby orienting, them to meeting that need.Motivating policies, achieve the highest results

Figure 2.2 Victor Vroom’s Expectancy Theory

(source: Stephen J Skripak,2016, Fundamentals of Business,P237 )

Vroom's theory assumes that behavior results from conscious choices amongalternatives whose purpose it is to maximize pleasure and minimize pain The keyelements to this theory are referred to as Expectancy (E), Instrumentality (I), andValence (V) Critical to the understanding of the theory is the understanding thateach of these factors represents a belief

The Expectancy Theory of Victor Vroom deals with motivation andmanagement Together with Edward Lawler and Lyman Porter, Vroom suggestedthat the, relationship between people's behavior at work and their goals was not assimple as was first imagined by other, scientists Vroom realized that an employee'sperformance is based on individuals factors such as personality, skills, knowledge,experience and abilities.

The, expectancy theory says that individuals have different sets of goals andcan be motivated if they believe, that:

 There is a positive, correlation between efforts and performance,

 Favorable performance will result in a, desirable reward,

 The reward will satisfy an, important need,

 The desire to satisfy, the need is strong enough to make the effortworthwhile

Vroom's Expectancy Theory is based upon the following three beliefs:

Valence (Valence refers to the emotional orientations people hold with

respect to outcomes [rewards] The depth of the want of an employee for extrinsic[money, promotion, time-off, benefits] , or intrinsic [satisfaction] rewards).Management must discover what employees value

Expectancy (Employees have different expectations, and levels ofconfidence about what they are capable of, doing) Management must discover whatresources, training, or supervision employees need

Instrumentality (The perception of employees whether they will actually

get what they desire even if it has, been promised by a manager) Management mustensure that promises of rewards are fulfilled and that employees, are aware of that

Vroom suggests that an employee's beliefs about Expectancy,Instrumentality, and Valence interact psychologically to create a motivational forcesuch that the employee acts in ways that bring, pleasure and avoid pain This forcecan be 'calculated' via the following formula: Motivation = Valance × Expectancy,

(Instrumentality) This formula can be used to indicate and predict such things as

job satisfaction, one's occupational choice, the likelihood of staying in a job, and theeffort one might expend at work.

Vroom's theory suggests that the individual will consider the outcomesassociated with various levels of performance (from an entire spectrum ofperformance possibilities), and elect to pursue the level that generates the greatestreward for him or her

Expectancy refers to the strength of a person's belief about whether or not

a particular, job performance is attainable Assuming all other things are equal,

an employee will be motivated to try a task, if he or she believes that it can bedone This expectancy, of performance may be thought of in terms ofprobabilities ranging from zero (a case of "I can't do it!") to 1.0 ("I have nodoubt whatsoever that I can do this job!")

A number of factors can contribute to an employee's expectancy perceptions:

 the level of confidence in the skills required for the task

 the amount of support, that may be expected from superiors andsubordinates

 the quality of the materials and equipment

 the availability of pertinent information

Previous success at the task has also been shown to strengthen expectancybeliefs

15

Instrumentality may range from a probability of 1.0 (meaning that theattainment of the second outcome — the reward — is certain if the first outcome —excellent, job performance — is attained) through zero (meaning there is no likelyrelationship between the first outcome, and the second) An example of zeroinstrumentality would be exam grades, that were distributed randomly (as opposed

to be awarded on the basis of excellent exam performance) Commission payschemes are designed to make employees perceive that performance is positivelyinstrumental for the acquisition of money

For management to ensure high levels of performance, it must tie desiredoutcomes (positive valence) to high performance, and ensure that the connection

is communicated, to employees The VIE theory holds, that people havepreferences among various outcomes These preferences tend to reflect a person'sunderlying need state

Valence

The term Valence refers to the emotional orientations people hold withrespect to outcomes (rewards) An, outcome is positively valent if an, employeewould prefer having it to not having it An outcome that the employee would ratheravoid ( fatigue, stress, noise, layoffs) is negatively valent Outcomes towards whichthe employee appears, indifferent, are said to have zero valence Valences, refer tothe level of satisfaction people expect to get from the outcome (as opposed to theactual satisfaction they get once they have attained the reward)

Vroom suggests, that an employee's beliefs about Expectancy,Instrumentality, and Valence interact psychologically to, create a motivational forcesuch that the employee acts in ways that bring pleasure and avoid pain

People elect to pursue levels of job performance, that they believe willmaximize their overall best interests (their subjective expected utility)

There will be no motivational forces acting on an employee if any of thesethree conditions hold:

 the person does not believe that he/she can successfully perform therequired task

 the person believes that successful task performance will not be associatedwith positively valent outcomes

 the person believes that outcomes associated with successful taskcompletion will be negatively valent (have no value for that person)

(Source: WILF H RATZBURG British Columbia Institute of Technology)

Another, psychologist, Frederick Herzberg, set out, to determine which workfactors (such as wages, job security, or advancement) made, people feel good abouttheir jobs and which factors made them feel bad about their jobs He surveyedworkers, analysed, the results, and concluded that to understand employeesatisfaction (or dissatisfaction), he had to divide work factors into two categories:

- Motivation factors Those factors that are strong contributors to jobsatisfaction

- Hygiene factors Those factors that are not strong contributors tosatisfaction but that must be present to meet a worker’s expectations and prevent jobdissatisfaction

Figure 2.3 Two-Factor Theory

(source: Stephen J Skripak, 2016, Fundamentals of Business,P235)

Figure 2.3 above illustrates Herzberg’s two-factor theory Note that

17

motivation factors (such as promotion, opportunities) relate to the nature of thework itself and the way the employee performs it Hygiene factors (such as physicalworking conditions) relate to the environment in which it’s performed.

18 Proposed research model applied in the thesis

Herzberg’s Two-Factor theory was selected as the guiding theory for thisresearch because it covers all, factors from basic needs to more high-level needs Italso covers most of problems of employee motivation which are relevant to workingenvironment, work content and the organization

This study will focus on 11 factors which included both hygiene factors andmotivation factor

Hygiene factor

Pay Job security Company policies

Relations with others

Quality of supervision

Physical working conditions

Motivation factor

Recognition Achievement Responsibility Promotion opportunities Opportunities for personal growth

Job satisfaction

Job Dissatisfaction

Figure 2.4 Model applied in the thesis

(source: Stephen J Skripak (2016) Fundamentals of Business)

Recognition

Employee recognition is the acknowledgment of a company’s staff forexcellent performance Essentially, the goal of employee recognition in theworkplace is to reinforce particular behaviors, practices, or activities that result inbetter performance and positive business results

Employee recognition holds great importance in the life of the employee andalso motivated to work even better for the organization’s goals

Achievement

An achievement is something an employee does, such as reaching a goal or

completing a project, using her skills, effort and persistence According topsychologists Abraham Maslow, Fredrick Herzberg and David McClellend, theneed for achievement is a psychological motivator that employees can develop.Wise managers help foster a need for achievement in their employees because it canmean performance improvement, increased productivity and employee retention.

Responsibility

Real motivation, happens when people are proactively encouraged toperform their own personal brilliance every day It’s not about fitting into a requiredset of skills defined in a documented job description It’s about enabling teammembers to be the best they can be, do what, they love to do, and know, what they

do makes a valuable difference both to them and the organization So, yes, it is theresponsibility of managers at every level to create and maintain an environment,

that produces this kind of motivation It’s the most important (and can be the mostrewarding) responsibility a manager has

Promotion Opportunities

The advancement of an employee within a company position or job tasks Ajob promotion may be the result of an employee's proactive pursuit of a higherranking or as a reward by employers for good performance Typically is alsoassociated with a higher rate of pay or financial bonus

Opportunities for personal growth

Personal growth means different things to different people In general, itrefers to the self-improvement of your skills, knowledge, personal qualities, lifegoals and outlook

19

employees from leaving, and motivate them in the workplace.

Job security

Job security is the assurance that a particular employee willhave their job in long term due to the low probability of losing it potentially.Positive job security nature also adds more value to the image and the reputation of

an organization as job offered has the guaranteed security and reliable Also, jobsecurity has a great influence in increasing job satisfaction of its employees whereonce the employee is confident about not losing the job it will create no mentalstress where the employee has its own freedom to fully concentrate on the workthey perform ‘An employee with a high level of job security will often performsand concentrates better than an employee who is in constant fear of losing a job.Although this fear can increase motivation in certain situations, a lack of jobsecurity can be a source of distraction and result in excess stress and low moralethat hinders an employee's overall performance

Company Policies

Company policy and procedures are basically set in place to establish therules of conduct within an, organization, outlining the responsibilities of bothemployees and employers

Company policy and procedures aim to protect the rights of workers as well

as the business interests, of employers Depending on the needs of the organization,various policies and procedures establish rules regarding employee conduct,attendance, dress code, privacy and other areas related to the terms and conditions

of employment

Relation with others

Relation with others directly affect a worker's ability and drive to succeed.These connections are multifaceted, can exist in and out of the organization, and beboth positive and negative One such detriment lies in the, nonexistence ofworkplace relationships, which can, lead to feelings of loneliness and socialisolation Workplace relationships are not limited to friendships, but also

include superior-subordinate, romantic, and family relationships.

Quality of supervision

Quality Supervision means taking care of controlling the quality of theapplication by practicing supervision across the entire lifecycle.Quality Supervision involves stimulating the right people to perform the rightactivities with the right information at the right moment in order to achieve the rightresult

Physical working conditions

Working conditions refers to the working environment and aspects of anemployee’s terms and conditions of employment This covers such matters as: theorganization of work and work activities; training, skills, and employability; health,safety and well-being; and working time and work-life balance

In this thesis, the researcher conducted, reseach based on Two-factor theoryfollow the table 2.1 below

Table 2.1 Employees motivation dimention

No

The appreciateManager treatadequate recognition

Recognizes achievementsFeeling of accomplishmentContributed towards

y

Important responsibilities

EmpowerSatisfy for the job4

Promotion Opportunitie

Grown as a personGrow and developexperience, skills and performance

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6 Pay

work harder and salarySalary distributePay for the worksatisfy with salary

safe working at ITCSecure of jobLocation of ITC

Policies

The attitude of the administration

Company policies The mission of ITCTraining and orientation program

Procedures, policies, and responsibilities

others

Get along with colleagues

My colleagues are helpful and friendly

Physical working conditions

The comfort at workthe pleasant with working conditionsModern and maintain of equipment

Motivation

Happy and pride The enthusiastic at workEngagement

In this thesis, the researcher created the questionaire based on Two-factor theory as the Appendix 1 and Appendix 2

CHAPTER 3: ANALYSIS OF THE CURRENT EMPLOYEE

MOTIVATION

19.

20 Overview of ITC and Viet Nam Bank for social policies.

In 2002, aimed at separating preferential credit from commercial credit aswell as restructuring the banking system, Vietnam Bank for Social Policies wasestablished and operated by the Prime Minister upon Decision

Funding mobilized by Government of Vietnam was used for lending to thepoor households, beneficiaries policy in need of loan for production and businesswith preferential interest rates, for poverty reduction, living improvement, socialstability, enhance organization chart

On March 11th 2003, VBSP has officially started its operations

VBSP has officially started its operations since March 11th, 2003, basedupon the re-organization of the Vietnam Bank for the Poor and separation fromVietnam Bank for Agriculture & Rural Development (VBARD) for the purpose ofseparating the preferential credit from the commercial credit in commercial banks

VBSP set up a nation-wide unified management and administration

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apparatus VBSP is a legal entity with its financial autonomy and operationsustainability VBSP has its own seal, legal assets and nationwide transactionnetwork from central to local level Its Headquarters is based in Hanoi

VBSP’s operation characteristics: VBSP acts as a non-profit creditinstitution with a compulsory reserve ratio of 0% and its solvency is guaranteed bythe Government It is exempted from deposit insurance, taxes

VBSP’s functions: VBSP is a State-owned credit institution that is currently

in charge of providing policy credit to the poor and other policy beneficiaries

Task: VBSP implements such basic operations of a bank as: capitalmobilization (from international and domestic individuals and organizations;receiving capitals from the government and People’s Committee, etc.); extendingloans to the poor and other policy beneficiaries and payment services

Target clients: VBSP lending to the poor households, the near-poorhouseholds and other policy beneficiaries

Organization structure: VBSP system includes:

Head Office located in Hanoi;

Transaction Centre subordinated to the Head Office, Training center,provincial and municipal branches;

District- level transaction offices (with their own seals and managed byDirector)

Administration and management: VBSP’s administration is the Board ofDirectors (BOD), the BOD has a number of Representative Units at provincial anddistrict levels (headed by Chairpersons or Vice-chairpersons of equivalent-levelPeople’s Committees) Managing VBSP is a General Director and his/hersubordinates

Financial regime: Its fiscal year begins on January, 1st and ends onDecember, 31st of the calendar year VBSP is a concentrated accounting unit in thewhole system with financial autonomy; self-responsible for its own operationlegally; implementing capital maintenance and development; covering costs and

credit risk.

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Risk management: VBSP shall provision credit risk as part of operationalcosts to cover all the risks arising from the individual and local cases beyondcontrol according to regulations of the Government (at present, provision rate isequal to 0.02% of the average annual loan outstanding) In case the provisioning isnot sufficient to cover risks of the year, VBSP submit to the Governmental foradditional compensation.

- One Training center;

- Seven Training Facilities;

- 63 provincial and municipal branches;

- 631 transaction offices at districts;

- Nearly 11,000 fix-dated transaction points at communes/wards;

- Nearly 200,000 savings and credit groups at village/hamlet

- nearly 7 million active customers

Organization

Administration: Includes BOD at central level and BOD RepresentativeUnits at provincial, municipal and district level with total of 8,000 members(Headed by Chairperson or Vice- chairperson of People Committee at the samelevel), of which:

The Board of Directors (at central level);

63 BOD Representative Units at provincial/ municipal level;

650 BOD Representative Units at district level

Management: The number of VBSP staff is over 9,000 as of December31th 2019

Figure 3.1 The Organization Structure of VBSP

Banking funding sources

VBSP’s funding sources consist of: (i) Funding from the Central StateBudget; (ii) Borrowings designated by the Government ; (iii) Fund mobilized andborrowed with market interest rate; (iv) Entrusted capitals from the local statebudget, economic organizations and individuals; and (v) Other funds and capitals

Lending

VBSP provide loans to customers as follows:

- Poor households

- Near poor households

- Newly escaped from poverty households

- Disadvantaged students

- Job creation Household members of Social policy household going abroad

as migrant workers for limited terms

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- Non-poor households living and doing business in specially disadvantagedareas and communes

- Housing loans for poor households in flooding area in Mekong river delta

- Poor and non-poor households living in rural areas in need of fund forbuilding Safe water supply and rural sanitation works

- Ethnic minorities living in specially disadvantaged communes

- Business and production units, enterprises with drug-detoxified employeesprogram

- Housing loans for the poor households

- Extremely disadvantaged ethnic minority households program

Credit for traders doing business in disadvantaged

- Small and medium enterprises

- Planting households

Lending methods: There are two main lending methods:

- Direct disbursement and collection of principal to/from the borrowers

- Coordination with mass organizations (Women Union, Farmer Association,Veteran Association and Youth Union) in some steps of lending;

In addition, some foreign projects have been piloting the method that VBSPacts as a wholesaler of lending groups

Interest rate: the interest rate is applicable from time to time: from 3% /year

to 9.6% / year, depending on specific beneficiaries of each lending program

b About ITC-VBSP

Information Technology Center (ITC) – Viet Nam Bank for Social Policies(VBSP) was established by Decision No 48 / QD-HĐQT March 26th, 2007 of theChairman of the Board of Directors ITC is responsible for information technology(IT) activities in the system, managing, improving the quality and efficiency of ITsystems, providing technical services from HO to branches of VBSP At the time ofestablishment, ITC had 16 staffs, up to now there are 70 staffs, including 4departments: Accounting, General, Software Engineering and Application

Administration, Network and Communication and Department in Da Nang and HoChi Minh.

In order to successfully complete the tasks assigned by the Party and theState to the VBSP in the coming time, ITC sets the following goals:

1 Effectively implement the implementation plan of VBSP's DevelopmentStrategy for the period 2011-2020 Effectively perform the function of advising theBoard of Directors and General Director on the application of modern technology inVBSP's professional activities in accordance with the mode of operation, wellserving the management, only director, executive

2 Develop and upgrade the IT system to meet the deployment of modernbanking services such as Internet Banking, Mobile Banking, Payment Card andcontinue to research new technology towards modernity and fit

Continue to improve the model, organizational structure of ITC and improvestaff qualifications to meet the requirements in the next stage

3 Strengthen the safety and confidentiality of the Bank's operations andconsider it an important task to prevent risks Create safety and convenience andensure the ability to serve customers

22 Organizational structure of Information Technology Center.

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