High turnover rate and performance appraisals bias by supervisor in FPT telecom JSC region 5 (2)

MASTEROFBUSINESS ADMINISTRATION HoChiMinhCity–Year 2019... MASTEROFBUSINESS ADMINISTRATION SUPERVISOR:PROF... Annual General MeetingBoard of Supervisors Board of Directors Board of Direc

MASTEROFBUSINESS ADMINISTRATION

HoChiMinhCity–Year 2019

MASTEROFBUSINESS ADMINISTRATION

SUPERVISOR:PROF TRANHAMINHQUAN

HoChiMinhCity–Year2019

EXCUTIVESUMMARY

Withthedevelopmentofallaspectsoflifefromsociety,culture,educationtotechnology,t h e qualityofpeople’slivesisincreasinglyenhanced.However,alongwiththesed e v e l o p m e n t

s aswellastheriseofthepeople’sdemands,theywillhavetoworksohardt h a t theyc a n satisfyalltheirneedsaswellastakecareoftheirfamilyp e r f e c t l y AccordingtoDeborahJianLee(2014),mostofpeoplenowadayspaysomuchattentiontow o r k t h a t t h e timef o r t h e i r

o w n f a m i l y o r theiro w n p e r s o n a l l i f e i s increasinglyshortened.Theycannotgetridofthewhirlof

worksotheyalsocannotbalancetheirownlives,balancebetweenthetimeforworkingandthetimeforliving.Thisproblemlastsf o r awhilewilleasilymakethemfeelstressfulandtired.Andtheresultisthattheywillg i v e upeasilyallthethingstheyarebeendoingandconsideritasareleaseforthemfromp r e s s u r e

Thisreportwillusebothprimaryresearchandsecondaryresearchtoanalyzeaswellasc o

n d u c t theresultsabouthowthework–

lifebalanceeffectsontheturnoverrateinFPTT e l e c o m JointStockCompany–

Region5.Afterthat,thisreportwillusethosei n f o r m at i on anddatatogivesomerecommendationswhattheboardofdirectorofFPTTelecomJointStockCompany–

Region5

shoulddotodecreasetheturnoverrateaswella s improvethecohesionofemployeewiththecompanysothattheFPTTelecomJointS t o c k Company–

Region5cancompletetheassignedbusinessplan

Iwouldliketoacknowledgeallmyfamily,mywife,myfriends,mycolleagues,myclassmatesatISBandFPTTelecomfortheirsupporting,helpingandencouragementd u r i n g mystudies.Withoutthem,IwouldnotbewhereIamtoday

Especially,Iwouldliketothankmysupervisor-ProfessorTranHaMinhQuanforsupportingme,givemethebestadvices,aswellasguidancemeallthetimeofmakingthisreport.Iwillnotcompletethisreportwithouthiswholeheartedlyhelp

CONCLUSTION 40

m o r e t h a n 2 0 0 transactiono f f i c e s ofmorethan80branchesin54provincesa n d citiesinthec o u n t r y withmorethan7,000officialemployeesandbecometheleadingcompan

yi n technologyindustryinVietnam.Moreover,FPTTelecomalsohaslaunched8b r a n c h e s inCambodiaaswellashavingthelicensedinordertoprovideservicesinMyanmar.Theyb e c o m e o n e o f t h e t e l e c o m m u n i c a t i o n a n d I n t e

r n e t s e r v i c e p ro v i d e rs whoaretrustedandlovedbycustomersalloverVietnamandtheregion

s t morei n i n f r a s t r u c t u r e , constantlyupgradethequalityofproductsandservicesaswellas

Annual General Meeting

Board of Supervisors Board of Directors

Board of Directors

FPT International Telecom Limited Company Functional Departments

FPT Software Solution for Business Limited Company

Tan Thuan Telecom Limited Company

FPT Telecom Tan ThuanJoint Stock Company

FPT Online Joint Stock Company

Branches of 7 Regions

Third-Party Supporting

enhancetheapplicationofnewtechnologiessothattheycanprovidetheircustomerswithsuperiorserviceexperience

2 Thestructure

HRDepartment CustomerServices

Center International SalesDepartment

TrainingD

epartment

ResearchCenter

NetworkCenter FinancialD

Firuge1.FPTTelecom’sstructure(Source:F

PTTelecomHumanResources)

a d m i n i s t r a t i o n easily.T h o s e r e g i o n s a r e R e g i o n 1 –

H a N o i C a p i t a l , R e g i o n 2 – N o r t h w e s t , R e g i o n 3–Northeast,Region4–Central,Region5–HoChiMinhCity,Region6

–S o u t h e a s t a n d R e g i o n 7 – S o u t h w e s t R e g i o n 5 –

H o C h i MinhCityi s t h e bigg est regionbecauseit contributesabout30percentofFPTTelecom’s profit

Growth 2016/2015 Growth 2017/2016 Growth 2018/2017

Besides,Region 5isalsoratedas themosteffective areawiththehighestsalesvolumecomparedtotheremainingsixregionsinthecountryfrom2015to2018

s o n leadingtoreducenumberofsales.I n f a c t , ifR e g i o n 5 i s n o t e n o u g h s a l e

s employeestosaletheproductsofFPTTelecom,thesalesvolumeinRegion5wil

ld e c r e a s e a n d t h e b u s i n e s s r e s u l t s w i l l d e c l i n e T h e c o n s e q u e

n c e i s t h e resultsofwholeFPTTelecomwillbegoingdowntoo

Region 7

Region 6

Region 5

2018 2017 2016 2015 Quota Region 4

Firuge5.ThenumberofsalesmeninFPTTelecomcomparedtothequot

aofsalesmenthattheyareapproved(Source:FPTTelecomHumanResources)

Thisl a c k o f humanr e s o u r c e s m a k e s t h e i m p l e m e n t i n g o f a s s i g n e d b u

s i n e s s planseemquitehardinmostofthetimeofyear

t u r n o v e r r a t e o f t e l e c o m m u n i c a t i o n s e c t o r s –

a p p r o x i m a t e l y 10%.T h i s meanst h e l a c k o f humanr e s o u r c e s i n F P T T e

l e c o m – R e g i o n 5 seemsmoreseriousinthistimecomparedto theotherregionsandtheboard

ofdirectorofFPTT el e c o m needtobecaredandsolvesothatRegion5couldcompletethebusinessp l an inthebestwayandcontributemorefortheprofitsofFPTTelecom.

a i , N i n h T h u a n , L a m D o n g , CaMau,HaiPhong,DaNang…

infiverecentyears.Intheopposite,thecomp eti to r s ofFPTTelecomlikeViettelTelecomandVNPTTelecomhadtheiro w n positionin64 provincesandcities inVietnamforalongtime.Therefore,thise x p a n s i o n of F P T T e l e c o m iss u p p o s e d l

y latean d i no r d e r t od o m i n a t e th e restr egiona s f a s t a s p o s s i b l e , F P T T

e l e c o m n e e d s toh a v e e n o u g h e m p l o y e e s toexpand theirproductsaswellasmaintainthecurrentmarketsegment

) 4 5 2 7 2 4 3 3 1 5 4 2

Region5in2018(Source:FPTTelecomHumanResources)

Firuge7.GrowthrateofsalesvolumeinFPTTelecom

(Source:FPTTelecomBusinessDepartment)Moreover,likewetalkedabove,FPTT e l e c o m –

R e g i o n 5 i s r a t e d a s t h e moste f f e c t i v e areawiththehighestsalesvolumeinthecountryformanyyearsfrom2 0 1 5 to2018.IfRegion5isnotenoughsalesemployeestosaletheproductsofFPTTelecom,thesalesvolumeinRegion5willdecreaseandthebusinessresultsw i l l d e c l i n e I n f a c t , in2 0 1 8 , t h e s a l e volumei n

R e g i o n 5 i n 2 0 1 8 d e c r e a s e d strongly,about13%comparedtotheincreasingofothersregions

Afterconductingfivein-depthinterviewsfrom4groups(thefirstgroup isthesalesmenwh oa r e stillwo r

k in g inR e g i o n 5, t h e se c o n d g r o u p iss a l e s m e n w h o a l r e a d y leftthesalejobsinRegion5,thethirdgroupisthesalesmenwhointendedt o l e a v e b u t d e c i d e d tostay,a n d t h e f i n a l g r o u p m a n a g e r /

s u p e r v i s o r w h o a r e w o r k i n g insalesdepartmentinRegion5),therearesomemainreasonsthattheymentionedforthehighturnoverrateinRegion5,includingwork–

anewproductofFPTTelecomthathelpcustomerstowatchmovies,music,TVwithoutFPTInternet Theemployeesof

thereisnotanybalancebetweenthetimef o r workandthetimefortheownlivesandfamiliesofthesesalesmen.

Oneo f o u r i n t e r v i e w e e s – Mr.N g u y e n N g o c Phuoc– t h e managero f

s a l e s departmentinRegion5,saidthatthesalesemployeeshavetomanagetheirownt i m e inanef fec ti ve waysothattheycanbalancebetweenthe timeforworkingand thetimeforfamilyaswellasforthemselves.Thepeoplewhoalreadyleftthes

currentjobsandlookingforthenewonethattheycanhavemoretimeforf ami ly a n d t

h e m s e l v e s B e s i d e s , t o o m u c h workloadw i l l m a k e themf e e l tired

afteralongworkingday.Insteadofhavingagoodmealafterworkingtime,theyw i l l justwanttosleepaftercominghomeandthisisalsonotgoodfortheirhealthinalongtime

2 Salaryandbenefits

AccordingtoJonathanEhimen(2014),thefinancialincentivehasmoreimportantr o lethanthenon–

financialincentivesbecausesalaryandbenefitsareratedfirst,thenispromotion,rewardsandrecognitionatyearendparty

AccordingtosalarypolicyofFPTTelecom,salesmen'ssalariesarepaidbasedon2 elements:basepayand

jobperformance/KPIs.Basepay,whichtakesabout50%o f totalsalesmen’sincome,isquitelowfrom3to4millionpermonthbasedont h e numberofdaysworkedduringthemonth.Salariespaidbasedonjobper forman ce/

KPIsa c c o u n t i n g f o r t h e r e s t 5 0 % o f incomei s e v a l u a t e d byt h e supervisorbasedonproductivity(thenumberofFPTTelecom’sproductsthattheyc a n saleinmonth),teamwork, compliancewith regulationsat workandattitudeinworking.Inf a c t , f o r salesmenw i t h w o r k i n g timeu n d e r o n e year,t h

e a v e r a g e s a l a r y

isjustabout7-8millionVietnamDongpermonth.Thisisnotareasonables a l a r y comparedt o t he timet h a t sales me n s p e n t a n d t h e p r es s u r e t h a t sales me n h a d tohandlefromworking.Moreover,wecanseethat50%ofsalesmen’sincomei s b a s e d on theevaluationfromtheirsupervisors Thisis quiteemotionaland non-transparent

MrNguyenLamDong–

salesman,wholeftFPTTelecom5monthsago,saidthath e leftthejobsfortakinganewpositionattheothercompanybecauseheispaid

t i s f a c t i o n andtheturnoverrateincompany.Thepaysatisfactionistheamount

o f n e g a t i v e o r p o s i t i v e f e e l i n g s th at t h e e m p l o y e e s h a v e t owa rd th ei r paywhilewo rk in g foracompany.Ifthesalaryandbenefitsaregood,theywillfeelsatisfie

da n d commitwiththeircompanyforalongtime.Ifthesalaryissolowthattheyc

a n n o t takecareoflifebythemselves,theywilltendtogiveuptheircurrentjobandfindabetterjobwithhighersalary

Besides,thelackofpromotion,reward aswellas recognition isalso thereasonforsalese m p l o y e e s d e c i d e d t o l e a v e F P T T e l e c o m I n f a c t , w

h e n t h e e m p l o y e e s receivemorebenefitsbasedontheirgoodperformanceatwork,theirintentiontoq u i t t h e j o b i s l o w e r t h a n o t h e r e m p l o y e e s (Mohamed,A h m e d A ; Mohamad,MohamadSaad;Awad,AhmedE,2017)

3 ErrorsinRecruitment

Region5in2018(Source:FPTT el eco mHumanResources)Therecruitmentprocessinacompanyalwayshasanimportantroleinthedevelopments t r a t e g y b e c a u s e a g o o d r e c r u i t m e n t p r o g r a m w i l l p r o v i d e a g o o dimp act o n i n c r e a s i n g commitmento f employeesa s w e l l a s i n c r e a s i n g t h e p r

o d u c t i v i t y andworkingqualityofemployees.In2018,therecruitmentprocesso f FPTTelecom–

Region5didnotseemgoodbecausetheturnoverrateishighwhilethenumberofnewrecruitmentstaffisquitelow

Mr.N g u y e n H o a n g Vu–

salesmanw h o i n t e n d e d t o l e a v e b u t d e c i d e d t o stay,claimedt h a t f r o m t h e

b e g i n n i n g , h e w a s i n t e r v i e w e d bya managerw h o j u s t w o r k e d for3yearsinsalesdepartmentinRegion5.Inaddition,theinterviewonlytook15minutes,endedquitequicklyandthenhewasadmittedtoworkwhilehef e e l s unsureaboutwhatactualworkhehastodo.Thisshowsthattherecruitmentprocesso f salesmenisn o t methodicala n d p r o f e s s i o n a l , l e a d t o t h e f a i l u r e s i n recruitment.Thenewrecruitedsalesmenwillfeelhardtounderstandtheworkasw e l l asunsureaboutwhatjobreallyisbecausethejobdescriptionisnotclearly

Ina d d i t i o n , t h e e m p l o y e e s h a v e t h e r i g h t s tok n o w m o r e a b o u t t h e i r j o b s ,

t h e i r careerpathsinthefutureaswellastakepartinthedevelopmentofthecompanybyworkingandmakingbusinessdecisions.Thiswillincreasethecommitmentofemployeestothecompany.Besides,theinformationinrecruitmentprocessaswella s work

ingprocessshould beknownfrommanymultipleinformation channels,notjustfrom theinformationofsupervisorsinordertoavoidthesituationthatthe

managersorsupervisorsgivefalseabouttheinformationofcompanyorpurposelymakethemisleadinginformationorhidetheinformationdeliberatelysothattheyc an gettheindividualbenefits.

AccordingtoHongY.Park,RaymondL.ChristieandGailE.Sype(2014),whenth eemployeesareallowedtoaccesstomanysourcesofinformation,allowedtot a

ke partindecision

makingatworkmore,theresultsofworkareoftenbetterthanjustbasedontheunderstandingoftheirsupervisors.Moreover,thiswillhelpnotonlyr e d u c i n g thes u p e r v

i s o r s ’ b i a s i n m a k i n g d e c i s i o n b u t a l s o d e c r e a s i n g t h e intentiontoquitjobsoftheemployees,reducingtheturnoverrate

Tosumup,therecruitmentprocessisoneofthemostimportantprocessesinan

o r g a n i z a t i o n Iftherecruitmentprocessisgood,the

understandingaboutthejobofemployeeswillbeincrease,thecommitmentofthemtotheorganizationwillbea l s o enhancedandtheturnoverrateofemployeeswillreduce.Therefore,theboardo fdirectoraswellasthemanagersofacompanyhastofocusmoreondevelopingtheirr ecr ui tm en ts tr ate gi es i n o rd er t o maintainth eem pl oy ees ’loyalty w it h t he company

4 PerformanceAppraisalsBias

Likewe t a l ke d a b o v e, 5 0 % o f salesmen’si n c o m e is ba sed o n t h ee v a l u a t i o n

o f thei r supervisorsinthenumberofFPTTelecom’sproductsthattheycansaleinmonth,theteamwork,compliancewithregulationsatworkandattitudeinworking.Thismaynotbeunfairforthesalesmenbecauseeverysupervisor

willh a v e t h e d i f f e r e n t e v a l u a t i o n criteria For instance,in Region 5,Mr.NguyenMinh

Toan,supervisorofaten–

salesmenteam,workedinFPTTelecomfor3years,w o u l d liketoevaluatehis salesmenba s e d onthenumberofproducts which aresoldinmonthsas we l l ascomplete t h e assignedworkon time.I n t h e o pp osi te, a c c o r d i n g toMr.NguyenHoangVu,salesmanwhointendedtoleavebutdecidedtostay,saidthathissupervisorliketoevaluatethesalesmen’sperformancebasedo ntheprocessofworkingandtheeffortsoftheemployeeswhileworking.Thisseemsunfairtosalesmenbecausethereisnoconsistencyacrossthesupervisorsinevaluatingtheresultsofsalesmeneverymonth

AccordingtoMahmoudJavidmehrandMehrdad

Ebrahimpour(2015),thelessthee r r o r s aswellasbiasinperformanceappraisalforemployeefrommanagersandsupervisors,thebetteremployeeperformanceaswellasthecommitmentofemployeewillbehighertothecompany.Infact,employeeswhowereregardedbysupervisorsormanagersashavingagoodperformancewillbelesslikelytoquit

t h e i r jobs Forexample, Mr.NguyenHoangVu saidthatthereason makeshi

md ecided tostayatFPTTelecom–

Region5istherecognitionfromhissupervisors.Healsostatedthatthe employeewillleavethecompany whenth ey feeldonoth a v e anys u p p o r t s fromt h e i r s u p e r

v i s o r s o r managerso r theya n d t h e i r supervisors/

managerscannotcommunicatewithe a c h o t h e r ’ s ,f e e l t h a t t h e i n f o r m a t i o n a

b o u t a s s i g n e d w o r k bys u p e r v i s o r s i s n o t c l e a r , e a s i l y inmakingm i s u

n d e r s t a n d i n g a n d t h e r e s u l t s o f s a l e s m e n ' s w o r k d o n o t e v a l u a t e p r

o p e r l y Moreover,ifth ere is anymisunderstandingorincompatibility bet

we en the salesmena n d t h e s u p e r v i s o r , t h e p e r f o r m a n c e e v a l u a t i o n o f s

a l e s m e n b a s e d o n

supervisorsinthissituationis nolongerobjective Forins ta nce, somesalesmenw h o hadgo od performance b u t didn ot ha ve goodr ela ti on sh ip withs

u per vi so rs maynotberecognizedandrewardedtrulywhiletheboardofdirectorandhumanresou rces m a n a g e r i n F P T T e l e c o m don o t c a r e a b o u t h o w g o

o d t h e s a l e s m e n perform,onlyj u s t c a r e a b o u t t h e e v a l u a t i o n f r o m s a l e s m

e n ’ s d i r e c t s u p e r v i s o r s a n d paysalaryforsalesmenbasedonit.Thisistherecencybiasorpersonalbiase r r or inevaluationsystemofsalesmen’sworkthatFPTTelecomingenerallyandFPTTelecom–

Region5inparticularly needtobeconcerned about inordertor ed uce t h e n

u m b e r o f l e a v i n g e m p l o y e e s c o m p a r e d t o t h e n u m b e r o f l e a v i

n g salesmeninRegion5in2018.Inaddition,theerrorinperformanceappraisalalsocomesfromtheevaluationinshorttermaboutsalesmen’sworkfromsupervisorinsteadofevaluationinlongtermofwhatsalesmenworked.Thisisadangerouse r r

o r b e c a u s e t h i s m a k e s i n a c c u r a t e i n p e r f o r m a n c e a p p r a i s a l o f s a l e s

m e n comparedtowhattheytrytoperform

Finally,theperformanceappraisal bias fromsupervisorsmaybecomesfromthel a c k ofexperienceofsupervisorsorthefactthattheyarenotbetrainedwellforthe supervisor position It alsocomesfromthefamilybackground, thecorevaluesa s wellasthewaysofthinkingorbelievingofeverysupervisor.AccordingtoMr.NguyenNgocPhuoc–

themanagerofsalesdepartmentinRegion5,mostofthesupervisorsi n F P T T e l e c o

m a r e p e o p l e w h o justw o r k a t F P T T e l e c o m f r o m 2 yearst o 3 years.H e n c

e , t h e e x p e r i e n c e i n w o r k a s w e l l a s t h e e x p e r i e n c e i n solvingproblemsbetweenthemandtheirsalesmenisnotwell.Besides,toomuch

workloadmakest h e s e s u p e r v i s o r s c a n n o t t a k e thet i m e f o r l e a r n i n g a s w

e l l ast a k i n g p a r t intheleadershiptrainingclass.Forinstance,Mr.NguyenMinhToanasupervisorinRegion5,saidthathetooka s u p e r v i s o r y position f o r 3 yearsb u

t onlya t t e n d e d o n e t r a i n i n g c l a s s a b o u t h o w a s u p e r v i s o r s h o u l d d o

t o m a n a g e salesmena n d m a x i m i z e t h e numbero f s a l e s s o t h a t h i s t e a m c a

n c o m p l e t e t h e assigned businessplan

ERRORS IN RECRUITMENT WORK – LIFE BALANCE

Unclear Job Description

Work overload Increasing cost of recruitment

Unhealthy lifestyles

HIGH TURNOVER RATE IN FPT TELECOM – REGION 5

Inconsistency across supervisors Supervisors are not trained & inexperienced

Reducing the number of sales in

Lack of reward & recognition Recency bias & personal bias error

SALARY AND BENEFITS PERFORMANCE APPRAISALS BIAS FROM SUPERVISOR

5 Cause–EffectMap

24