THEORETICAL BASIS OF THE LOYALTY OF STAFF AND
The concept of loyalty
Employee loyalty refers to an individual's commitment to remain with an organization for the long term, often choosing to stay even when presented with more lucrative salary offers from other companies (Stum, 1999-2001).
According to Johnson (2005), the dynamics of employee-employer relationships have evolved significantly, necessitating a reassessment of the concept of loyalty in the workplace This shift highlights that employees exhibit greater professional loyalty to their employers, as noted by Tran Thi Kim Dung and Nguyen Thi Mai Trang (2007).
There have been many studies of employee loyalty with many different approaches
According to Allen, N.J., & Meyer, J.P (1990) focused on 3 psychological states of employees when connected with the organization Staff can be loyal to the organization:
- Because of their true feelings, they will stay with the organization even if other places pay higher wages
- Because they don't have a chance to find a better job
- And maybe because of the moral standards they pursue
Employee loyalty, as defined by the Loyalty Research Center (1990), refers to an employee's commitment to their organization's success and their belief that staying with the organization is their best option Loyal employees not only contribute to the organization's survival but also tend to avoid actively seeking new job opportunities or responding to enticing offers from other companies This understanding underscores the importance of fostering loyalty to reduce turnover intentions.
Employee turnover intention refers to the desire to leave one's current job for a different opportunity (Vo Quoc Hung & Cao Hao Thi, 2010) Generally, employees seek to fulfill their needs and achieve job satisfaction within an organization When these needs are unmet, dissatisfaction can lead to the inevitable decision to seek employment elsewhere This highlights the correlation between employee needs, job satisfaction, and their loyalty to the organization (Tran Kim Dung, 2005) Therefore, understanding the theory of employee needs and satisfaction is essential for examining its relationship with employee loyalty, which will inform the hypotheses proposed in this study.
Expression of loyalty, measurement of loyalty [12]
Employees often hesitate to express disagreement with their bosses, particularly those who are new to the company and eager to comply with directives This compliance does not equate to job satisfaction; when dissatisfaction builds up, it frequently leads to resignations In contrast, direct reports who maintain close working relationships with their bosses tend to have more nuanced perspectives These loyal employees are willing to provide constructive feedback, even if it involves pointing out the boss's mistakes, with the intent of fostering a better work environment.
To foster a positive work environment, it's essential to view your boss as a relatable individual rather than an untouchable authority figure While many employees may idealize their bosses as strong and distant leaders, loyal employees recognize the importance of understanding their boss's personal and professional life This mutual understanding creates a supportive relationship where both parties strive for each other's success, with employees appreciating their boss's efforts to help them achieve their career and personal goals Ultimately, treating your boss as a person fosters a collaborative atmosphere that benefits everyone involved.
Criticizing your boss in front of others can undermine their authority and erode the respect they have earned While some employees may vent their frustrations, loyal team members maintain respect for their superiors, regardless of the circumstances Demonstrating professionalism and support for leadership, even in private discussions, fosters a positive work environment and strengthens team cohesion.
Expressing disagreement with your boss in a private setting can foster a healthy organizational culture Loyal employees feel empowered to share their perspectives, weighing the pros and cons of their boss's decisions They trust that their boss is open to feedback, valuing their input for the benefit of both the leader and the company Unlike less committed employees, loyal team members approach these discussions with tact and discretion.
Support your boss's decisions openly, even if you disagree Loyal employees refrain from undermining their boss and instead actively demonstrate their commitment by showcasing the validity of their boss's choices in front of others.
When loyal employees decide to leave their jobs, it's often to pursue better opportunities, explore new fields, start their own businesses, or seek lifestyle changes Recognizing the impact of their departure, these employees typically inform their bosses in advance, allowing ample time for preparation and transition This respectful approach helps maintain a positive relationship and acknowledges the value of their contributions to the company.
The role and benefits of loyalty to the organization [9]
Employee satisfaction is crucial for organizations of all sizes, as it significantly impacts both the company and its workforce This mutual relationship highlights the importance of fostering a positive work environment to enhance employee well-being and overall organizational success.
For organizations, Employee satisfaction affects all aspects of corporate operations including:
Enhancing employee performance is crucial for organizational success Satisfied employees demonstrate greater commitment and actively engage in learning and development, leading to improved productivity This, in turn, enables the company to reach its objectives more effectively.
To ensure stability in human resources, it is essential to foster employee satisfaction, as content employees are more likely to feel a strong commitment to their organization and less swayed by external job offers Furthermore, when employees value their workplace, they are inclined to actively contribute to its growth and well-being, treating it as their shared home that they care for, build, and protect.
Third, when employees are satisfied with their work, they will treat customers better and therefore customer satisfaction is also greater
Fourth, the staff will communicate the company outside and that helps the company attract talents, build good image in the eyes of customers and partners
Fifth, the Company will save money for training new candidates and recruiting candidates
The Company aims to reduce work-related errors and risks by fostering a culture of responsibility and enthusiasm among employees, encouraging them to continuously improve their performance.
Employee satisfaction is crucial for fostering loyalty and dedication within a company When employees feel fulfilled in their roles, they become more invested in their work, focusing on achieving positive outcomes rather than being distracted by external concerns This sense of responsibility not only drives them to excel but also enhances their interactions with customers, leading to stronger relationships and improved overall business performance.
Factors affecting loyalty
Wages represent a significant expense for businesses, particularly in the service sector where they constitute approximately 50% of total costs However, they also serve as a valuable asset, as competitive remuneration motivates employees to enhance their performance By fostering a productive work environment, fair wages not only boost employee output but also reduce turnover rates, leading to a more stable workforce.
Many companies aim to offer higher salaries than their competitors to attract top talent, believing that better pay will draw highly qualified candidates Conversely, some firms implement lower salary policies due to financial struggles or the perception that they do not require skilled workers for simple tasks However, research indicates that paying lower wages does not lead to cost savings; instead, it can result in higher overall expenses due to decreased productivity and increased turnover rates as employees leave for better-paying opportunities.
Remuneration remains a significant challenge for managers across various businesses, as highlighted by Tran Kim Dung (2003) While enterprises may have diverse perspectives and goals when establishing their pay systems, they typically strive to achieve four fundamental objectives.
Attracting top talent hinges significantly on competitive salaries, as prospective employees frequently consider compensation as a primary factor in their job acceptance decisions Companies that offer higher wages are more likely to draw skilled candidates from the local job market.
To retain valuable employees, businesses must go beyond offering competitive salaries; they must also ensure fairness in their compensation practices When employees perceive inequities in pay, it can lead to feelings of discomfort, dissatisfaction, and even depression, which may ultimately result in their departure from the company.
To effectively stimulate and motivate employees, it is crucial for enterprises to implement policies and governance activities that ensure adequate compensation for hard work and good performance When employees perceive that their efforts are not recognized or rewarded, they may become disengaged, leading to a passive workforce Key areas of focus regarding labor compensation include minimum wage regulations, compliance with labor laws, child labor regulations, wage allowances, and social welfare provisions such as social insurance, maternity leave, and support for labor-related accidents.
Employees seek recognition for their contributions in various forms beyond just monetary rewards While financial incentives may motivate low-skilled workers and those focused on material wealth, they often hold little significance for individuals who thrive on challenging tasks Therefore, organizations should tailor their reward systems to meet the diverse needs and motivations of their employees, fostering a more engaged and satisfied workforce.
The expectation theory suggests that employees are unlikely to strive for rewards if they believe those rewards are unattainable Consequently, it is essential to structure material incentives in a manner that fosters employee confidence in the relationship between their effort and the rewards they can achieve.
To ensure employee satisfaction and productivity, rewards must reflect both personal and social justice, meaning that individuals should perceive their efforts as fairly compensated compared to their own contributions and those of their peers under similar circumstances When employees feel that rewards lack fairness, it can hinder their motivation and engagement in the workplace.
In addition, to encourage employees 'efforts towards achieving the organization's objectives, rewarding must be associated with the results and effectiveness of the performance of employees' tasks
Welfare programs reflect a company's commitment to its employees' well-being, fostering loyalty and attachment among staff Key benefits offered by businesses include social and health insurance, retirement plans, paid leave, holiday breaks, subsidized meals, support for disadvantaged employees, and gifts for special occasions such as birthdays and weddings.
According to Nguyen Huu Than (2001), employee welfare encompasses two primary components: regulatory measures and voluntary benefits offered by companies These voluntary benefits, aimed at enhancing employee motivation and attracting talent, include health insurance programs, hazard pay, and subsidies for childcare centers Each organization implements various initiatives tailored to their workforce, all with the shared objective of fostering a secure and engaging work environment that encourages employee retention and commitment.
A positive working environment is crucial for employee satisfaction and productivity, as it directly impacts personal convenience and task fulfillment Workers tend to avoid dangerous and uncomfortable settings, emphasizing the importance of optimal temperature, lighting, and noise levels Additionally, many employees favor workplaces that are close to home, equipped with clean, modern facilities and appropriate tools to enhance their work experience.
Work provides more than just financial rewards and accomplishments; it fulfills social interaction needs as well Collaborative and supportive environments significantly enhance job satisfaction among employees Additionally, the behavior of leaders plays a crucial role in this satisfaction Employees are more content when their leaders are knowledgeable, approachable, and offer praise for good performance, while also valuing their opinions and understanding their interests.
Effective communication is crucial for fostering employee dedication and performance within a business Administrators should cultivate a friendly atmosphere built on trust and respect, actively engaging with employees and valuing their opinions By promoting a culture of courtesy and genuine respect, leaders can inspire their teams to leverage their talents, ultimately motivating them to work harder and achieve greater effectiveness.
1.4.4 Leadership style [13] influence, encourage encouragement and direction for the activities of the executives to achieve the common goals of the organization, at the same time Based on some theories show that Leadership has a positive influence on employee loyalty
Theories aimed at understanding the factors affecting employee loyalty
Abraham Maslow's hierarchy of needs theory, introduced in 1943, provides a comprehensive understanding of human behavior based on a structured prioritization of needs According to Maslow, human actions are driven by these needs, which are organized into five distinct levels, ranging from basic to more complex requirements.
Physiological needs, fundamental for survival, encompass essentials like food, air, housing, and clothing In the workplace, these needs are primarily addressed through salaries and benefits, ensuring employees have the basic resources necessary for their well-being.
Safety needs encompass various aspects, including personal safety from threats like violence, war, and natural disasters, as well as financial security against economic crises and unemployment Additionally, health safety is crucial, involving the absence of illness and accidents Within an organization, these needs manifest as a safe working environment, protection of workers' rights, and the assurance of long-term job stability.
Once physiological and safety needs are met, individuals seek to fulfill their social needs, which encompass relationships with friends, family, and community involvement This drive for social connection is essential for emotional well-being and a sense of belonging.
Respect is a fundamental need for individuals, stemming from the desire to be accepted and valued by others In an organization, this need translates into recognizing employees' contributions, fostering a culture of appreciation, and providing opportunities for advancement and increased responsibility.
The demand for self-affirmation is the pinnacle of Maslow's hierarchy of needs, representing an individual's desire to express their unique identity At this level, individuals seek personal growth and self-improvement, which is essential in organizational settings This need manifests through opportunities for training, coaching, career advancement, and the encouragement of creativity and capacity development.
A Maslow divided the needs into two levels: high and low Low-level needs are physiological and safety and security needs High-level needs include social needs, need for respect and the need to assert themselves
A Maslow said that satisfying lower-level needs is easier than satisfying high-level needs because low-level needs are limited and can be satisfied from the outside He argued that first-class needs work, it requires satisfaction and so it motivates people to act - it is a motivating factor When these needs are satisfied, it is no longer a motivating factor, then higher level needs will appear
Maslow's hierarchy of needs highlights the necessity for managers to recognize the specific level of needs their employees are experiencing By understanding these needs, managers can create targeted strategies to fulfill employee requirements, ultimately aligning individual satisfaction with organizational objectives.
1.5.2 Two-factor theory by F Herzberg
Frederick Herzberg, an American psychologist, developed the two-factor theory based on a survey of accountants and engineers to identify factors influencing job satisfaction By interviewing individuals about their work experiences, he distinguished between positive (satisfied) and negative (dissatisfied) factors The findings revealed two groups of factors that have opposing effects on workplace satisfaction, as illustrated in the accompanying table.
Table 1Motivating and maintaining elements of F.Herzberg
Achievement Company management policies and regulations
F Herzberg's two-factor theory makes sense for managers to please employees Managers must first improve the retention factors before they want to increase their employee motivation Each person will have different feelings about these two groups of factors, because it may be one factor that motivates this person but is the maintenance of others and the tendency of motivating factors over time becomes weak Maintenance factor Therefore, managers need to always find solutions to enrich the work of employees because that will contribute to creating more motivational factors
1.5.3 Expected theory of Victor H.vroom
Victor H Vroom's theory posits that encouragement stems from an individual's expectations, influenced by their desire to engage with their job and their perceptions of how to achieve success To effectively motivate employees, it is crucial to understand their expectations and align them with organizational goals Managers should focus on creating desired outcomes, fostering a need for achievement, ensuring attainable performance levels, and linking expected results to necessary actions Additionally, it is essential to assess varying expectations and guarantee that rewards are both attractive and equitable for all employees.
The fair doctrine posits that employees assess their contributions (input) against their rewards (output) and compare their input-output ratio with that of their peers A perceived fairness arises when these ratios align; conversely, discrepancies signal injustice In response to unfair conditions, employees are motivated to take action to rectify the imbalance.
Fair doctrine implies that when employees visualize injustice, they may have one or more of the following five possibilities:
Distort the inputs or outputs of yourself or others
Behave in a way to make others change their inputs or outputs
Behave in a way to change their own inputs or outputs
Choose another comparison criterion for comparison
The doctrine of fairness highlights that individuals are concerned not only with the rewards they receive for their efforts but also with how those rewards compare to what others receive Inputs like effort, experience, education, and talent are weighed against outputs such as wages, salary increases, and recognition When individuals perceive discrepancies in their input-output ratios relative to others, it creates tension, which serves as a motivation for them to seek what they believe to be fair and satisfactory outcomes.
Employee motivation is significantly affected by both relative and absolute rewards When employees perceive unfairness, they are likely to respond by taking corrective actions, which can lead to varying outcomes such as changes in productivity, quality of work, increased absenteeism, or even voluntary resignation.
Some previous research on employee loyalty
The fact shows that organizational leadership and culture have an impact on the loyalty of specific employees:
New leadership styles can significantly influence employee loyalty, but this effect is less pronounced in foreign-invested enterprises The intense competitive environment in these organizations often leads employees to experience high levels of work-related stress, prompting many to seek opportunities elsewhere, despite their strong performance.
Fostering a supportive and goal-oriented work environment enhances employee excitement and retention, ultimately boosting loyalty across all business ownership types.
Administrative culture plays a significant role in employee loyalty, particularly in foreign-invested enterprises, where workers expect a professional environment If this expectation is not met, employees are more likely to leave the organization In contrast, when employees join domestic businesses, they tend to adapt to and accept less formal administrative practices and non-professional behaviors, leading to greater tolerance for the existing culture.
Vu Khac Dat (2008) Research on factors affecting the loyalty of employees in the South, Vietnam Airlines, the author studied the following six factors:
4 Treatment: Combining from two factors: Wages and Welfare
5 Operating environment: combining from 2 elements of Colleagues and Working Conditions
Research indicates that environmental factors are the most significant influencers of employee loyalty Additionally, effective leadership and positive work conditions contribute to overall employee satisfaction and loyalty to the organization Consequently, implementing strategies that enhance these two aspects can effectively boost employee satisfaction and foster greater loyalty to the company.
Research of Turkyilmaz, Akman, Coskunozkan and Pastuszak (2011) This study aims to evaluate the factors affecting employee satisfaction and loyalty in the organization
Quantitative analysis indicates that factors like training and development, compensation and recognition, authorization, group activities, and working conditions significantly enhance employee satisfaction Furthermore, satisfaction plays a crucial role in fostering employee loyalty, as concluded by Mehta, Singh, Bhakar, and Sinha The study suggests that these factors indirectly influence employee loyalty within the organization.
Figure 1Calibration model in research of Turkyilmaz, Akman, Coskunozkan and Pastuszak (2011)
This study assesses the direct impact of factors on employee loyalty in the company
Quantitative analysis reveals that career development, work motivation, cohesion, work safety, and leadership style significantly influence employee loyalty Each of these factors is positively correlated, indicating that improvements in these areas will lead to enhanced loyalty among employees This research, conducted by Ahmad Ismail Al-Ma’ani in 2016, evaluates the direct effects of these factors on employee loyalty within organizations.
The author conducted a quantitative analysis to develop a model examining how factors like staff recruitment, training opportunities, employee authorization, and motivation influence employee loyalty within organizations Based on a sample of 618 employees, the findings indicate that all these variables significantly affect employee loyalty This study, conducted by Ajami in 1998, specifically evaluates the direct impact of these factors on employee loyalty in a Kuwaiti company.
Figure 2Calibration model in Mehta's study, Singh, Bhakar & Sinha (2010)
Figure 3 Calibration model in the study of Ahmad Ismail Al-Ma’ani (2016)
Research results show that employee loyalty has a meaningful relationship with employee satisfaction and also shows a relationship with supervision, communication, advancement, and lips The school works at the company
Research by Kumar & Skekhar (2012) This study assesses the direct impact of factors on employee loyalty in the company in India
The research results show that, with the analysis results from the survey, it is said that salary, recognition of roles, rewards, authorization, active participation in
Participate in the development of the company
Figure 4 Correction model in Ajami's study (1998)
Figure 5 Calibration model in research by Kumar & Skekhar (2012) the organization's development, here These are factors that are related to employee loyalty in the organization
Research by Athar Waqas et al (2017) This study assesses the direct impact of factors on the loyalty of employees in the company in Pakistan
The analysis indicates that factors such as participation in decision-making, authorization, rewards and recognition, and the working environment significantly influence customer satisfaction This satisfaction, in turn, plays a crucial role in fostering customer loyalty.
Ketbi's research (2006) This study assesses the direct impact of factors on the loyalty of public administration employees in Sharjah Police
The results show that, for the loyalty of employees who work in the public
Participate in the decision-making process
Figure 6 Calibration model in the study of Athar Waqas et al (2017)
Figure 7 Calibration model in Ketbi's research (2006) administration field at Sharjah police station, show that there is a relationship between employee loyalty and environmental variables Work school, personal characteristics of employees
A study conducted by Nguyen Thi Thu Hang and Nguyen Khanh Trang in 2016 examines the factors influencing employee loyalty within organizations in Ho Chi Minh City The research highlights key elements that contribute to fostering commitment and retention among employees in this urban setting.
Quantitative analysis reveals that six independent variables—training and development, working conditions, relationships with superiors, rewards and recognition, relationships with colleagues, and challenges at work—significantly influence employee satisfaction and loyalty Specifically, training and development, along with favorable working conditions and strong relationships with superiors, play a crucial role in enhancing employee satisfaction and fostering loyalty.
Research indicates that factors such as recognition and reward, working environment, and training and development opportunities significantly influence mid-level staff However, applying foreign models to Vietnam, particularly in the context of Tan Tao Corporation, poses challenges due to cultural differences, varying living standards, and distinct work practices Insights from studies by Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016) and Tran Kim Dung (2005) underscore the importance of understanding local contexts in fostering employee loyalty.
In their 2016 study, Nguyen Thi Thu Hang and Nguyen Khanh Trang enhanced the calibration model by incorporating additional variables, including relationships with superiors, motivation, and income.
Research model
Based on previous theories, studies, and group discussions as well as suggestions of instructors, the author proposes the following research model:
Figure 9 Calibration model in research by Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016), Tran Kim Dung (2005)
Chapter 1 of the thesis, the author presented the theoretical basis of employee loyalty in the company Specifically, the author presented the concept of loyalty and the role of encouragement in creating employee loyalty through Maslow's demand theory, two-factor theory by F Herzberg, expectation theory of Victor H.vroom, theory of fairness The author has reviewed some previous studies on employee loyalty and analysis of factors affecting employee loyalty In addition, the author has proposed research methods and processes.
CURRENT STATUS OF EMPLOYEE’S LOYALTY AT ANSV 28 2.1 General overview of ANSV Co., Ltd
The process of formation and development of the Company
ANSV was established in July 1993 in the joint venture cooperation between Alcatel Group (now Alcatel-Lucent) and Vietnam Post and Telecommunications Corporation (now the VNPT group)
In 1997, the Company expanded its production, extending its operation time to July 2016
In 2000 Alcatel transferred new technology to produce 1000 E10 systems
In 2006 Alcatel transferred the production technology of MSAN
On August 24, 2011, VNPT Technology, a subsidiary of Vietnam Post and Telecommunications Industry, acquired full rights and responsibilities from Alcatel-Lucent at ANSV, resulting in VNPT Technology holding a 51.2% stake in ANSV, while VNPT retains 48.8%.
For over 18 years, ANSV has successfully operated under a joint venture model, leveraging its extensive experience and resources The organization is committed to advancing and expanding its activities in technology, industry, telecommunications, and information technology services, driving continued growth and innovation in these sectors.
ANSV has broadened its collaboration beyond its traditional technology partner, Alcatel-Lucent, by joining forces with industry leaders like IBM, Convergys, and Oracle This strategic expansion aims to develop and produce innovative hardware and software products and solutions tailored to meet the demands of both domestic and regional markets.
Research, development, production and repair of electrical, electronic, telecommunications, information and communication equipment, development of digital content industry;
Trading in telecommunications, information and communication technology, digital content industry business;
Trading in electrical products, electronics, telecommunications, information technology and communication;
Survey, consultancy, design, construction, installation, maintenance and technical support of telecommunications, information and communication technologies;
General contractor of telecommunications, information and communication technologies;
Consulting, research, training, vocational training and application of scientific and technological advances in the field of electricity, electronics, telecommunications, information technology and communication;
Importing and exporting, supplying materials and equipment for projects in the fields of telecommunications, information technology and communication;
Some main business results of the Company
Business results of ANSV over 3 years, according to the following table:
Finance and accounting department (DF)
Business center (BC) Technological Business
Solutions & software development center (SSDC)
Diagram 1 The organizational structure of the company
REVENUE OF SALES AND SUPPLY OF SERVICES 2,240 2,710 2,242
NET REVENUE ON SALE OF GOODS AND SUPPLY
CAPITAL PRICE OF SALE AND SERVICE SUPPLY 1,974 2,476 2,083
GRADE PROFIT ON SALES AND SERVICE SUPPLY 261 233.8 155.359
Net profit from business activities 114.126 75.511 28.112
TOTAL ACCOUNTING PROFIT BEFORE TAX 115.149 78.1 25.544
PROFIT AFTER ENTERPRISE INCOME TAX 91.645 62.203 20.17
Table 2 Extracting business results from 2016 to 2018
(Source: data from accounting department of ANSV Co., Ltd.)
The ongoing rise in production and business not only secures immediate income for workers but also fosters their confidence and future employment expectations However, while these indicators highlight average growth rates, they fail to provide an in-depth analysis of individual, group, and departmental performance within the production and business sectors.
We see the profits of the ANSV increased by an average of more than 10% per year but the main contribution was profit from telecom services business.
Research design
The qualitative research phase aims to refine existing scales from prior studies and create a tailored interview process that aligns with the unique circumstances of ANSV Co., Ltd This approach is grounded in the initial objectives and theoretical foundations established in earlier research.
(Discussing hand in hand with the comments of teachers, n = 30)
The basis of related theory
- With 270 questionnaires, collecting 248 copies, there are 237 copies in accordance with survey conditions
- Encryption, data entry and data cleaning
- Preliminary inspection of scale with Cronbach’s Alpha coefficient
(To edit the interview table, n = 20)
The author developed a preliminary interview table to facilitate qualitative research through direct interviews with 30 employees from various companies, including ANSV Co., Ltd To gather insights, the author reached out to the staff via email and conducted direct interviews, ensuring a comprehensive understanding of their experiences and relationships within the workplace.
The author developed a preliminary interview table based on the proposed research model and conducted a survey with 20 company staff to ensure their understanding and ability to respond to the questions This process resulted in the creation of an official interview table for quantitative research.
Subjects of the survey are employees of the company who are working at ANSV Co., Ltd The company has 270 employees Therefore, the author selected a survey of 270 employees
Selecting samples by convenient methods and ensuring relative proportion of employees by member center of ANSV Co., Ltd (9 centers) and employees who have retired from ANSV Co., Ltd
The author collaborated with the HR department to distribute a questionnaire, providing direct explanations to staff for completion within 30 minutes For retired employees of ANSV Co., Ltd., the author sent the questionnaire via email, requesting their participation.
After collecting the questionnaires, they were thoroughly reviewed, and any unsuitable ones were discarded The remaining data was then encoded, inputted, and cleaned using SPSS software This software facilitated comprehensive data analysis, employing tools like descriptive statistics, frequency tables, graphs, reliability verification of scales, factor analysis, and other statistical methods.
The measurement scale for the research factors is developed based on previous studies conducted by Tran Kim Dung and Tran Hoai Nam (2005), Tran Kim Dung and Nguyen Thi Mai Trang (2007), as well as Vo Quoc Hung and Cao Hao Thi.
In 2010, the author conducted in-depth interviews with employees of ANSV Co., Ltd., leading to substantial modifications of existing scales to better align with the company's specific context, based on a qualitative research methodology.
Scale of employee satisfaction: The employee satisfaction scale includes 6 component scales and is denoted as follows:
1 Salary bonus component: Pay symbol
2 Composition of working environment: Env symbol
3 Training and promotion components: Pro symbol
6 Composition Work nature: Wor symbol
All observed variables in the components utilize a 5-point Likert scale, where level 1 indicates complete disagreement with the statement, and level 5 signifies complete agreement.
The salary component scale, developed from the Wage and Welfare scale in the research by Tran Kim Dung and Tran Hoai Nam (2005) and supported by qualitative interviews, includes five observed variables (Pay1 to Pay5) to measure employee perceptions of fairness in salary and bonuses This scale assesses how employees recognize and value their dedication and contributions within the organization.
Pay1 You can see that the company has a better welfare regime than other companies in the same industry
Pay2 You are satisfied with the bonus policy of the Company
Pay3 Wages are paid fairly and reasonably
Pay4 Your salary is paid in proportion to the results of your work
Pay5 You can live well with your current salary
Figure 12 Scale of remuneration components
Scale of work environment: Scale Working conditions in the study of Tran
Kim Dung and Tran Hoai Nam (2005) identified four observed variables, labeled Env1 to Env4, to measure the working environment component scale, which assesses employee satisfaction with their work environment Qualitative research findings indicate that the questions and statements used are clear, easy to understand, and effectively capture the intended content.
Evn1 Work does not require frequent overtime
Evn2 Work is not under high pressure
Evn3 Work is stable, not worry about losing jobs
Table 3 Scale of working environment components
The training and promotion components are evaluated using six observed variables, Pro1 to Pro6, based on the original scale developed by Tran Kim Dung and Tran Hoai Nam (2005) These scales assess employee satisfaction with the company's training policies, orientation, and staff development Qualitative research discussions reveal that employees feel secure in their promotion opportunities when training and promotion policies are consistently applied However, any changes to these policies could alter their development trajectory, potentially rendering their efforts ineffective To address this concern, the observation variable Pro3, which states "The Company consistently and fairly implemented policies," has been incorporated into the training and promotion component scale.
Pro1 The company gives you many opportunities for advancement
Pro2 The company gives you many opportunities for personal development
Pro3 The company implements promotion policies consistently, equal
Pro4 You are trained by the company, providing the necessary knowledge / skills for the job
Pro5 You are satisfied with the training programs in the Company
Pro6 The company regularly invests to improve the qualifications for employees
Table 4 Component scale Training and promotion
Scale of Leadership: Developing from the scale "Thinking about your direct leader, you feel " in the study of Tran Kim Dung & Nguyen Thi Mai Trang
The Leadership scale developed by Tran Kim Dung and Tran Hoai Nam in 2005 consists of six observed variables, Sup1 to Sup6, designed to evaluate employee satisfaction with leadership Qualitative research findings indicate that employees comprehend the questions, which effectively address key aspects such as the employee-leader relationship, the impact of leadership style on employee motivation, the execution of corporate governance functions, and the support provided by leaders to their team members.
Sup1 The superior's style helps you to have good motivation to work
Sup2 Employees are supported by superiors
Sup3 Employees are highly respected and trusted at work
Sup4 Leaders have polite and gentle behavior
Sup5 Employees are treated fairly, regardless
Sup6 Leaders always recognize the contribution of employees in a timely manner
Table 5 Scale of Leadership component
The Colleagues component, based on the study by Tran Kim Dung and Tran Hoai Nam (2005), includes five observed variables, having adjusted the original term "Colleagues of friendly brothers and sisters" to "Brothers and Sisters feel the company is a friendly workplace." Participants noted that their colleagues significantly enhance their motivation to work, influencing their decision to stay with the company The addition of the variable "You feel that there are many motivations to improve your skills when working with your colleagues" reflects the importance of knowledge sharing and experience among peers This comprehensive approach captures the essence of collaboration and support within the workplace, leading to a more engaged and skilled workforce.
Cow1 You and your colleagues are willing to cooperate and work well together
Cow2 Your colleague is often interested in helping each other
Cow3 Your colleagues are comfortable
Cow4 I feel a lot of motivation to improve my profession when I can work with his colleagues
Cow5 I feel that the Company is a friendly workplace
Table 6 Scale of Colleagues components
The component scale for the nature of work is derived from the research by Tran Kim Dung and Tran Hoai Nam (2005) and originally consists of six observable variables However, for the context of ANSV Telecommunication Equipment Company Limited, three relevant observable variables, labeled Wor1 to Wor3, have been selected This scale effectively assesses the alignment of employees with their roles and the overall fit within the company.
Wor1 You find your job very interesting
Wor2 You have the right and responsibility in accordance with the job you are undertaking
Wor3 Your job is to allow you to maximize your personal ability
Table 7 Scale of components Nature of work
The Staff Loyalty Scale, developed by Tran Kim Dung and Tran Hoai Nam in 2005, assesses employee loyalty through three key observed variables, labeled Loy1 to Loy3 This scale effectively measures the extent of employee engagement within the company.
Loy1 Do you intend to stay long with the company?
Loy2 You will still stay with the company if there are other places that offer relatively more attractive wages
Loy3 You consider the company as your second home
Current status of loyalty analysis at ANSV Co., Ltd
2.3.1 Create loyalty for employees through Rewards and recognition
The Labor Union of ANSV oversees the annual emulation and commendation process, but the current system relies heavily on subjective voting and personal sentiments This approach to recognizing advanced workers and competitors does not effectively motivate employees to enhance their labor productivity.
2.3.2 Creating loyalty for employees through Income
In recent years, ANSV Co., Ltd has recognized the need to enhance its employee performance evaluation indicators and develop a comprehensive labor and compensation policy To address this, the company has implemented a work-based payroll system that aligns with employee responsibilities, aiming to provide optimal incentives The salary structure at ANSV is built on a fundamental formula: "Salary + Bonus + Welfare," reflecting its commitment to rewarding employees effectively.
2.3.3 Creating loyalty for employees through the Work Environment
The office design at ANSV Co., Ltd promotes an open space layout that facilitates effective communication and collaboration among departments Key business information is readily accessible on the corporate intranet, while significant company updates are shared through an internal newsletter distributed to all employees However, there is a pressing need for improved labor protection measures, including the investment in comprehensive fire and explosion prevention equipment Additionally, enhancing the workplace with essential tools, a generator room for electricity, and suitable accommodations for employees is crucial for ensuring a safe and efficient working environment.
2.3.4 Creating loyalty for employees through Colleagues Relationship
ANSV Co., Ltd prioritizes fostering a collaborative and friendly work environment where employees and managers share a unified voice The company emphasizes cooperation, mutual understanding, and a willingness to support one another, ensuring that all individuals maintain equal relationships and mutual respect in the workplace.
2.3.5 Creating loyalty for employees through Training and promotion opportunities
Many organizations invest in training courses for employees, but often these programs lack relevance to their specific professional fields and do not consider the practical application of the skills learned Despite sending staff to pursue degrees such as Bachelor's, Master's, and PhDs, the high costs of these programs do not always translate into effective outcomes Participants often approach their studies with the mindset that merely passing exams will lead to salary increases, resulting in a focus on rote learning rather than genuine skill enhancement and professional development.
Many employees lack awareness of the promotion criteria within their organization, as positions such as intermediate management, assistant, and team leader are often filled by external candidates This situation leads to a sense of frustration among staff, who feel that despite their hard work and dedication, they can only achieve recognition as excellent employees without the opportunity for advancement.
2.3.6 Create loyalty for employees through Relationship with superiors
ANSV Co., Ltd.'s Board of Directors is dedicated to fostering a friendly and fair working environment, promoting courteous communication among employees, customers, and partners By encouraging collaboration and actively listening to ideas, the company aims to address challenges effectively This spirit of cooperation and creativity ultimately seeks to enhance benefits for ANSV's shareholders.
Research process
Analysis of multivariate regression models
- Check the Cronbach’s alpha coefficient of the total variable
- Types of variables with small correlation variables
- Types of variables with small factor loading
Design quantitative research
2.5.1 Methods of information collection and sample size
Data is gathered through direct investigations involving employees of the company This process includes face-to-face interviews and various interview techniques, ensuring that a sufficient number of samples are surveyed to obtain reliable results.
Samples are selected by the probability and inconvenience method, this sampling method allows investigators to minimize costs and time to meet the requirements of the timeliness of analysis
When selecting a sample for research, it is essential to choose an appropriate sampling method based on the study's requirements Haricot (1998) emphasizes that for effective exploratory factor analysis, a minimum of five samples per observed variable is necessary, with an estimated total of 32 observed variables This calculation yields a required sample size of 160 (n = 5 x 32) To minimize statistical errors and account for potential invalid responses, the final sample size is determined to be 237.
This document utilized SPSS software for data analysis, employing various statistical techniques including hypothesis testing, factor analysis, regression analysis, and ANOVA The processing of data in SPSS involves several key steps to ensure accurate results.
Diagram 3 Process of data analysis with SPSS
Analysis of discovery factors (EFA)
Inspection of models and adjustments
When the sample types fail to meet the initial criteria, we conduct a frequency allocation analysis to identify variables with noisy values that fall outside the specified range.
Check for duplicated object patterns and duplicate sample types
Check the frequencies for missing values and ensure that the missing values of a variable are as small as possible
To effectively utilize the collected data for running a regression model, it is crucial to ensure that the variables meet the assumption of normal distribution This assumption is fundamental in multivariate analysis, making it essential to verify this criterion prior to performing any quantitative analysis.
To assess satisfaction levels, a normal distribution test was conducted on all variables, analyzing the frequency distribution patterns alongside Skewness and Kurtosis parameters (Hair et al., 2006) A Skewness and Kurtosis range within ± 1 is deemed ideal, while values within ± 2 indicate the variable remains acceptable for statistical analysis.
2.5.2.3 Test the reliability of the factor groups
This approach enables analysts to eliminate irrelevant variables and minimize noise during the analysis, while also assessing the scale's reliability using the Cronbach’s Alpha coefficient By examining variable correlations, researchers can ensure the validity of their findings.
A scale with a Cronbach’s Alpha coefficient below 0.3 will be eliminated, while a coefficient of 0.6 or higher is acceptable for new concepts (Hoang Trong & Chu Nguyen Mong Ngoc, 2008) Typically, a Cronbach’s Alpha ranging from 0.7 to 0.8 is considered reliable, with many researchers agreeing that a scale with a coefficient between 0.8 and 1 is indicative of a strong measurement scale.
After evaluating the scale's reliability using Cronbach’s Alpha and eliminating unreliable variables, exploratory factor analysis is employed to condense and summarize the data This technique is essential for identifying key variables for research and uncovering the relationships between them.
In exploratory factor analysis, the Kaiser-Meyer-Olkin (KMO) value is a crucial index for assessing the suitability of the analysis A KMO value ranging from 0.5 to 1 indicates that factor analysis is appropriate for the data, while a value below 0.5 suggests that the analysis may not be suitable.
Factor analysis utilizes Eigenvalues to identify the number of factors to retain in a model, keeping only those with an Eigenvalue greater than 1 This threshold indicates that the factor accounts for a significant amount of variation, while factors with an Eigenvalue less than 1 do not provide any additional value in summarizing information compared to the original variables.
The component matrix, also known as the factor matrix or rotated component matrix, is a crucial element of the factor analysis table It includes coefficients that represent the relationship between normalized variables and factors, indicating how closely they are related To ensure meaningful results using the principal components factor extraction method, the factor loading must exceed 0.5.
2.5.2.5 Multiple regression analysis tests the theoretical model
After conducting exploratory factor analysis (EFA) to extract relevant factors, it is essential to verify the necessary assumptions for multiple linear regression models This includes checking standardized residuals and performing the variance inflation factor (VIF) test to assess multicollinearity among the predictors.
- VIF) If assumptions are not violated, multiple linear regression models are built And the adjusted R2 coefficient (adjusted R square) shows how well the regression model is built
2.5.2.6 Inspection of violations of regression hypothesis
To verify the suitability of the regression model, the author employs an ANOVA test on the original data set A significance level of less than 0.05 indicates that the regression model is appropriate for the data set.
Multicollinearity occurs when independent variables in a model are highly correlated, making it challenging to determine the individual effect of each variable This phenomenon complicates the interpretation of results, as it alters the expected values of the coefficients associated with the independent variables To ensure accurate analysis, it is essential to assess the correlation between these variables to identify the presence of multicollinearity.
Design qualitative research
Preliminary research is a qualitative study using focus group discussion techniques with the participation of a group of 7 employees of ANSV Co., Ltd The purpose of focus group discussion is to:
- Discover factors that can affect the loyalty of employees working at the corporation
To ensure clarity in the questionnaire, respondents will articulate their views based on a structured discussion led by the author The author will pose questions focused on employee loyalty, encouraging each participant to share their insights Responses will be documented until a participant reiterates a previously mentioned opinion, at which point the discussion will conclude If new perspectives emerge, the dialogue will continue until no further unique contributions are made, signaling the end of the study.
The findings serve as the foundation for refining the proposed research model and creating preliminary scales and questionnaires These tools will be utilized in interviews with approximately 10 employees to evaluate the comprehensiveness of the content and the clarity of the statements.
(questions) in the scale and their ability to provide information, based on that, corrected into the official scale used in quantitative research
In particular, the content evaluation is expressed in the following aspects:
Does the respondent (interviewee) understand the statements?
Does the respondent have information to answer?
Is the respondent willing to provide information?
Evaluation of forms is to check the relevance of words, the syntax is used in statements to ensure consistency, clarity and not to cause confusion for respondents
The members of the discussion group agreed:
Affirm the factors that affect their loyalty which are mentioned in chapter 2 However, its content with adjustment after the qualitative research process is summarized in the section below
The author has developed a research concepts scale by adapting previous draft scales into coherent sentences This resulting scale utilizes a 5-point Likert format, ranging from 1 (completely disagree) to 5 (completely agree).
Description of the scale
Recent studies in Vietnam, including those by Nguyen Thu Hang and Nguyen Khanh Trang (2013) and Tran Kim Dung (2005), alongside international research by Turkyilmaz et al (2011), Mehta et al (2010), and Ahmad Ismail Al-Ma’ani (2013), highlight the need for revisions in measurement scales Key adjustments involve eliminating factors such as temperature, light, and noise from the working environment scale, identifying essential conditions for promotion, and emphasizing the importance of training and succession development Additionally, fostering a sense of pride in the workplace is crucial for enhancing employee loyalty.
TN1 You are paid a high income TranKimDung
TN2 The current income level is commensurate with your work capacity Skekhar (2012)
TN3 The company pays very fair income
TN4 You can live well based entirely on income from the company
TN5 Compared to other companies, you feel your income is high
MTLV1 Where you work very safe Nguyen Thu Hang &
Nguyen Khanh Trang MTLV2 Where you work clean and airy
MTLV3 You are provided with full supporting equipment for your work Akman, Ozkan &
Pastuszak (2011); Vu MTLV4 Your working equipment is very modern
MTLV5 You feel comfortable working with your direct manager Ketbi (2006)
You are satisfied with the process of exchanging and providing internal information at the company
DN1 Your colleagues are comfortable Nguyen Thu Hang &
Colleagues are willing to help you in your work (2013), DN3 You and your colleagues work well together
DN4 Your superior always listens to the opinions of the staff
DN5 Your superior always seems to be friendly, respectful of employees
Scale of reward and recognition
KT1 Your achievement is recognized and assessed by your superiors
(2011); Kumar & KT2 You are rewarded commensurate with your contributions and contributions Skekhar (2012)
KT3 You are considered a fair reward when you complete the job well
The company has a clear and effective reward policy
Scale of relationship with superiors
QHCT1 Acknowledged by the above-mentioned employees, the opinions of the employees themselves
Nguyen Thu Hang & Nguyen Khanh Trang
(2013); Mehta, Singh, QHCT2 The superior respects the views of the employees themselves Bhakar &Sinha
The superior level of personal understanding of employees
QHCT5 The superior appreciates the personal role of the employees in the company
Scale of promotion training opportunities
The company is very interested in saff training
DTTT2 You can participate in the company's annual training programs according to job requirements
Training program suitable for your ability
After being trained, your work skills are improved
You have many opportunities to get promoted at the company
TT1 I am very happy to work for a long time with the company
Hang & Nguyen TT2 You will stay in the company even if other places offer a more attractive income Khanh Trang (2013)
TT3 You are willing to sacrifice personal benefits when necessary to help the company succeed
Overall assessment of employee loyalty status at ANSV
ANSV Co., Ltd fosters a strong work ethic and a collaborative spirit among its employees, resulting in enhanced energy and productivity in the workplace.
Employees are expressing dissatisfaction with their company's basic salary, feeling it is inadequate compared to their expectations and the salaries offered by other companies in the industry Additionally, the year-end bonus is perceived as merely a minimal reward for overtime work, lacking the motivation needed to inspire greater productivity and engagement.
2.8.2.2 The cause of the limitations
The company has not conducted the analysis of loyalty as well as factors affecting the loyalty of employees to see their limitations in human resource management.
Linear regression analysis
Linear regression analysis is utilized to assess the impact of independent variables on a dependent variable, allowing for the evaluation of model appropriateness This process involves constructing multiple regression models and testing relevant hypotheses Furthermore, the acceptance and interpretation of regression results are examined in the context of the research hypotheses.
2.9.1 Regression model for component variables
Regression analysis was carried out with 6 independent variables including: Colleagues (X1), Leadership (X2), Training and promotion (X3), Salary (X4), Nature of work (X5), The working environment (X6) and the dependent variable are Employee Loyalty (Y)
The independent variables are averaged based on their observed components, while the dependent variable reflects the average of employee loyalty observed variables The analysis employs the Enter method, allowing for simultaneous inclusion of variables to determine their acceptance The results of the regression analysis are presented as follows:
Not standardized Beta stand ardiz ed
Measurement of multicollinearity (Collinearity Statistics)
The nature of the work
Table 10 Regression results using the Enter method
The results of multiple linear regression analysis with the enter method (a one-time input method) showed that the model with R2 adjusted to reach 0.558 is shown (Table 3.23)
From the results of the above regression model, we see that the factors of working, training and advancement, colleagues are not statistically significant, P value is greater than 0.05
Assessing the appropriateness of the model: Through Adjusted R square to assess the suitability of the model will be safe because it does not inflate the relevance of the model
The adjusted R² value of the model is 0.558, indicating that it effectively explains 55.8% of the variation in Fidelity based on the included variables Conversely, 44.2% of the variation in Fidelity is attributed to factors outside the scope of this study.
Ingredient Coefficient R R 2 R2 calibrated Standard errors of estimates
Table 11 Evaluation of conformity of the model a Independent variables: (Constant), Working environment, Colleagues, Salary, Leaders,
Work nature, training and advancement
To assess the model's suitability, Test F evaluates the linear relationship between the dependent variable Y and the entire set of variables If the hypothesis R²pop = 0 is rejected, it indicates that the combination of variables in the model effectively explains the variation in Y, confirming that the constructed model is appropriate for the dataset.
In ANOVA analysis table, we see the value of sig very small (sig = 0.00