PROBLEM IDENTIFICATION 1 Industry overview and company background
Industry overview
Over the past three years, Vietnam's real GDP has experienced a growth of slightly over 6%, fostering stable conditions for the asset quality of banks Furthermore, the Vietnamese government has prioritized enhancing the legal framework by issuing several key documents, including Circular No 39/2016/TT-NHNN, Law No 17/2017/QH14, which amends certain articles related to credit institutions, and various resolutions.
The Law 42/2017/QH14 provides a legal framework for addressing non-performing loans, allowing banks to seize collateral, which helps reduce operational costs and bad debt rates The International Monetary Fund highlights that Vietnam's banking sector is experiencing rapid credit growth, nearly three times the rate of real GDP, reflecting a rising demand for funding among customers Overall, with a strong economic growth trajectory, the Vietnamese banking sector is poised for stable growth in the upcoming period.
Company overview
DongA Bank, established in 1992 and headquartered in Ho Chi Minh City, is a joint stock commercial bank with over 25 years of experience in the financial market The bank aims to be a leading Vietnamese banking group, primarily serving personal customers and small to medium enterprises.
DongA Bank has focused on expanding its international operations over the past decade, earning client respect through high-quality service and fostering trust and recommendations With an equity of 5,000 billion dong, it ranks among medium-sized banks, competing with OCB, ABBank, VIB, and TPBank As a retail bank, DongA Bank is recognized for pioneering ATM cards and auto banking systems, achieving the highest customer satisfaction ratings The bank also boasts a wide network of 213 transaction points across more than 50 provinces and major cities in Vietnam, including Ho Chi Minh City, Hanoi, Da Nang, and Can Tho.
Distributive injustice in DongA Bank 8
DongA Bank has undergone multiple revisions to its organizational structure, and it is now established as a typical joint stock company This structure includes shareholders, a board of directors, a control board, and nine divisions, as detailed in Appendix 1.
Problem mess
From 2015 to mid-2018, DongA Bank faced significant challenges, including a rise in non-performing loans, a low growth rate, outdated information technology systems, and a human resource crisis The banking sector's rapid growth and competitive pressure from rivals and international financial groups have intensified these issues Over the past three years, DongA Bank's debt has sharply declined, averaging 3,000 billion dong, with personal debts constituting 65% of this total The bank's primary strength lies in non-collateral credit, making it difficult to increase debt levels in the short term, especially as competitors focus on developing enterprise customers.
From 2015 to 2017, DongA Bank faced significant challenges due to negative information that adversely affected its brand equity, creating barriers to attracting potential customers The high turnover rate among the sales workforce further complicated efforts to engage and retain clients.
Non-performing loans (NPLs) have become a significant concern for financial statements, particularly for DongA Bank, where NPLs have surged dramatically over the years, reaching 5,667 billion dong NPLs serve as a fundamental risk indicator within the banking industry, highlighting the ongoing challenges faced by Vietnam's financial system Despite the introduction of various legal measures aimed at managing NPLs, their volumes remain high, indicating a persistent issue in the market This trend suggests that NPLs will continue to pose a major challenge for banks, directly affecting their profitability However, banks can adopt various strategies to mitigate NPLs, such as selling bad debts to the Vietnam Asset Management Company (VAMC), seizing collateralized assets, or pursuing legal action, with human resources playing a vital role in these efforts.
DongA Bank faces a significant challenge due to a human resource crisis, which has a detrimental impact on all aspects of its business The shortage of personnel has escalated dramatically since 2015, when it was only 230 individuals, representing 5.69% of the planned workforce By December 2016, this figure had doubled to 438, accounting for 10.43%, and peaked at 643 individuals, highlighting the urgent need for investment in human resources and technology to address this issue.
In 2017, DongA Bank faced a significant human resource shortage, which heightened operational risks and weakened its competitive position within the banking industry compared to other service providers.
During the annual meeting of DongA Bank on January 27, 2018, the chairman highlighted the bank's restructuring challenges, including bad loans, growth rate issues, and human resource shortages Despite these obstacles, he emphasized that with employee unity and adherence to internal regulations and Vietnamese law, DongA Bank could potentially rank among the top ten retail banks in Vietnam Adequate human resources are crucial for improving business operations, reducing non-performing loans, and enhancing growth through high service quality Additionally, the customer banking division manager stressed the urgent need for the human resource management division to recruit staff for the sales and credit development departments, as the current manpower shortage hampers basic product sales and negatively impacts business results.
Distributive injustice in DongA Bank 10 is also the most important phenomena that DongA Bank has to solve as soon as possible
A human resource management report indicates that a shortage of personnel contributes to high staff turnover rates and unmet recruitment needs The statistical data from 2015 to the present highlights these challenges.
6 months of 2018 shows the alarming situation as the following table:
6 months of 2018 Total manpower people 4,183 3,810 3,762 3,592 3,556
The number of labor who quit the job people 677 621 801 348
The number of new labor people 304 573 631 312
=(number of employees who left/ average number of employees )*100
(comparing with human resource planning) people 230 438 643 679
(Source: the annual HRM report)
Figure 1 The main abnormal signs of human resource in DongA Bank
In 2017, DongA Bank experienced a significant increase in its turnover rate, which had slightly decreased to 16% in 2016 The turnover rate rose by 5% in 2018, reaching a peak of 22.41% Additionally, the number of employees leaving the bank remained consistently high over the past decade, with no signs of decline Notably, in the first half of 2018, 348 employees, or 19.47%, resigned from their positions.
The human resource challenge at DongA Bank is increasingly pressing compared to the broader Vietnamese banking sector A recent Talentnet report highlights that while the banking industry offers competitive wages and benefits, it struggles with recruitment and retaining talented employees, evidenced by a 15% average turnover rate over the past three years Additionally, a 2018 forecast from the Department of Statistics indicates that 70% of banks are seeking to hire more staff by the third quarter of 2018 to meet the rising demand for credit and adapt to improved business conditions in Vietnam's financial market.
In conclusion, DongA Bank has experienced a significant increase in turnover rates since 2015, surpassing industry benchmarks This trend poses a critical challenge that the bank must address to mitigate its impact on overall business operations Addressing the high turnover rate is essential not only for enhancing service quality and recovering bad debts but also for positively influencing profitability.
According to data from the Human Resource Division, there are currently 679 vacant positions compared to the planned workforce To understand the primary reasons driving employees to consider leaving their jobs, the departures have been categorized based on the organizational structure, as detailed in the following table.
1 The number of labor who quit the job people 677 621 801 348
1.1 Head office people 61 56 72 31 tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Distributive injustice in DongA Bank 12
Proportion of leaving employees/total (1.1)/(2.1)
Proportion of leaving employees/total (1.2)/(2.2)
(Source: the annual HRM report)
The increasing number of employees leaving DongA Bank highlights significant challenges in its human resource management Data reveals that the turnover rate at branches and transactions is two to three times higher than that of the head office For instance, from January to June 2018, there were 317 resignations, representing 10.92% of branch employees, which is double the turnover rate at the head office Given that branches directly impact the bank's business results while the head office primarily supports these units, it is clear that the turnover issue at branches is far more critical and requires immediate attention.
In the first six months of 2018, the number of employees resigning from their jobs has been analyzed and summarized in the following table.
Content The number of employees Percentage
(Source: the annual HRM report)
Figure 3 Dividing the number of employees leaving the jobs into generation
The data reveals that 64% of the 348 employees who left their jobs were aged between 23 and 29, while Generation X and Baby Boomers comprised only 36% of the total According to Becker (11), although all generations share some common reasons for quitting, their priorities differ significantly For instance, Generation X and Baby Boomers prioritize benefits and salary among their top reasons for leaving, whereas Generation Y places greater emphasis on employer assessments and work assignments, alongside salary concerns Additionally, an analysis of turnover at DongA Bank in the first six months of 2018 indicates that voluntary departures were the primary reason for the high turnover rate.
The analysis of turnover rates and human resource shortages highlights a significant focus on branch and transaction levels This indicates that the ongoing comparison between actual human resource availability and planned staffing is essential, particularly in relation to specific positions and geographical areas, as illustrated in the accompanying table.
2 Deputy branch 3 0 2 0 1 0 6 112 5.36 tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Distributive injustice in DongA Bank 14
Head/deputy head of sale department
Head/deputy head of service quality
Head/deputy head of credit department
Head/deputy head of administration department
(Source: the annual HRM report)
Problem identification
DongA Bank has faced a high turnover rate and various human resource challenges since 2015, driven by both internal and external factors External competition from rival banks and financial enterprises poses significant barriers to attracting potential talent Additionally, negative perceptions about the banking industry's risk levels, particularly concerning DongA Bank's restructuring, have led to employee anxiety and job turnover The restructuring of Vietnam's banking system, a long-term initiative by the State Bank of Vietnam, has contributed to this situation, as it is an uncontrollable external factor Over the past decade, the Vietnamese banking sector has expanded, intensifying competition for human resources Therefore, instead of attempting to manage external influences, DongA Bank should focus on addressing its internal issues.
The internal environment may face three significant issues: a mismatch between productivity and salary/benefit packages, inadequate coaching and mentoring programs, and an unclear career path.
Coaching programs are essential for preparing talented employees for new positions by providing feedback on their performance, while mentoring programs focus on skill development to help employees achieve their career goals The effectiveness of both coaching and mentoring relies heavily on a fair salary policy that aligns with employees' efforts Additionally, career advancement, often linked to employee turnover, is significantly influenced by promotion opportunities and salary growth Addressing the unclear career path issue requires a robust salary and performance evaluation system to establish clear development rules for staff Lastly, resolving the imbalance between productivity and compensation is crucial for enhancing human resources through coaching and mentoring programs, ultimately clarifying career paths for employees.
The imbalance between productivity and salary, along with benefit packages, highlights the concept of distributive justice This theory, which gained attention in the 1950s and 1960s, emphasizes fairness in the distribution of resources and outcomes According to Adams (1995), the foundation of this theory is based on the principle of "Equity."
Adams laid the foundational knowledge for early research in the field of distributive justice, focusing on the fair allocation of both tangible and intangible assets based on the inputs invested in a job Subsequent studies, including those by Vercchio in 1984 and McFarlin and Sweeney in 1992, reaffirmed that employees assess their outcomes and inputs in comparison to others, leading to perceptions of distributive justice that can negatively affect employee attitudes towards pay and overall work performance Walster further defined distributive justice as the response to pay inequities, emphasizing that it exists when expected returns align with inputs such as experience, ability, and effort over time Additionally, both organizational environments and social exchanges strive for distributive justice due to its significant impact on positive outcomes, with empirical evidence suggesting that perceived fairness occurs when outcomes exceed inputs.
Distributive injustice in DongA Bank 26
In some modern re-examined studies from 2000s, the equity rule is proved nearly with the real scenario with linking to the balance between performance and perceived pay
Equity-based justice serves as the foundation for fair distribution of resources, while equality theory acts as a counterbalance to equity theory in the realm of human resources management.
The equality rule introduces a fresh perspective on distributive justice by advocating for equal outcomes for all objectives Specifically, it emphasizes that individuals should receive equivalent results regardless of their inputs.
While equality theory contrasts with equity theory, it serves as a strong foundation for achieving distributive justice, particularly in fostering a productive work environment and promoting social integration Depending on the overarching goals of an organization, various elements of distributive justice theories can be effectively implemented in existing businesses to create a balance between outcomes and inputs.
Previous studies on workplace justice, including research by Taneja et al (23), surveyed 196 professionals from a state public service agency to assess employees' perceptions of organizational justice in relation to five outcomes: performance appraisal system, supervisor satisfaction, organizational citizenship behavior, and current appraisal satisfaction The findings revealed that distributive justice is linked to pay satisfaction and performance appraisal satisfaction, influencing intentions to quit and rater satisfaction Ghosh et al (24) further explored the relationship between distributive justice and various work-related factors, such as promotion decisions and reward allocation, highlighting its mediating role between task identification and turnover intention Their study suggested that innovating pay structures could enhance perceptions of distributive justice and positively impact organizational engagement Additionally, Choudhary et al examined the effects of organizational justice on employees' workplace and personal outcomes within the Indian insurance sector.
(25) implied that distributive justice has a close relationship with organizational commitment, job and pay satisfaction
DongA Bank faces a significant challenge with its turnover rate, which is influenced by various factors A comparison of salary and benefit packages reveals that DongA Bank offers the lowest compensation among its competitors of similar size.
2017 (according to separate financial statement of fiscal year 2017) (unit: VND)
Average salary and benefit packages (unit: VND)
(source: Published financial statement report of each bank)
Figure 10 illustrates a comparison of average salaries and benefit packages among banks of similar scale Notably, the fixed salary structure for each position at DongA Bank highlights a clear instance of distributive injustice, as evidenced by the data presented.
Name Position Location Business result
Branch director District 1 +7,5 billon dong
Figure 11 demonstrates the proof of distributive injustice, while Table 10 shows that two branch directors in Ho Chi Minh City, despite having identical monthly incomes, yield different business results.
Distributive injustice in DongA Bank 28 branch is higher than District 1 branch, so that it creates unfairness in outcomes allocation
At DongA Bank, a persistent calculation reveals that distributive injustice has been a long-standing issue, largely overlooked by management While experienced employees earn higher salaries, they complete deals more quickly, resulting in a significantly higher number of daily transactions compared to their less experienced counterparts This disparity creates an imbalance in the pricing of each deal, as illustrated in the accompanying image.
Figure 12 Price calculation per deal
With only a simple comparison, it can be seen clearly that A Bank waste money while the performance is not suitable with the labor cost
Mowday (20) conducted research on distributive justice theory, revealing that feelings of being underpaid are the primary negative response to issues of pay satisfaction among workers This dissatisfaction can lead to a decline in both the quality and quantity of work Employees often compare their rewards within the workplace, and when these rewards fall short of their expectations, it can undermine their work effort and indirectly contribute to increased voluntary retirement.
Subsequent research on fairness highlights the negative impact of distributive injustice on dysfunctional attitudes and behaviors, leading to decreased trust and weakened organizational commitment, as well as adverse effects on job satisfaction and productivity Sholihin (27) emphasizes that distributive justice is crucial for linking performance evaluation with job satisfaction; any disruption in this relationship can result in low job satisfaction and inaccurate performance assessments Furthermore, distributive justice significantly influences employee-manager relationships, affecting respect, loyalty, and contributions, and in severe cases, may lead to employee turnover.
ALTERNATIVE SOLUTIONS 1 Cause validation
Alternative solutions
DongA Bank faces a potential human resource crisis due to three main causes rooted in distributive injustice By integrating primary qualitative research data from high-level management with secondary data, the bank identifies the need to address these issues carefully However, ongoing business instability and challenges in improving salary budgets limit the focus to the ineffective performance appraisal system Specifically, the evaluation of this system, from the chairman's perspective, is cross-checked with secondary data, highlighting two critical aspects: the frequency of assessments and the performance appraisal tactics employed.
Performance appraisal is primarily utilized in specific situations such as promotion evaluations, reassignment assessments, and contract reconsiderations However, performance measurement is crucial for driving innovation.
Figure 19 Final map tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Distributive injustice in human resource management at DongA Bank highlights the importance of integrating performance management with employee development to enhance service quality in the banking industry Effective performance management not only evaluates employee performance but also fosters motivation and improves human resource quality Research by Brooks (32) indicates that frequent performance evaluations lead to timely task completion and alignment with business goals Both employers and employees agree that monthly and quarterly feedback is optimal for enhancing competencies A case study of companies like Google, Deloitte, and Netflix, conducted by Pawar (33), emphasizes that regular assessments are crucial for a successful performance appraisal framework, reducing voluntary employee turnover by 30% while preventing unjust feedback.
To enhance performance management, companies must develop a comprehensive performance appraisal tool before initiating the feedback process Current appraisal systems often rely on subjective indicators, leading to unavoidable bias While both qualitative and quantitative evaluations are employed, it is crucial that the indicators are measurable Novinson (34) indicates that quantitative measurements can mitigate perceptions of unfairness in the workplace Additionally, Ngo (16) notes that "work performance" is frequently associated with productivity across various fields Therefore, DongA Bank needs to establish an effective performance evaluation tool to boost productivity and address the challenges posed by high employee turnover rates.
2.1.Key Performance Indicators (KPIs) a/ Literature review of KPIs tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
The traditional appraisal method often relies on a straightforward comparison of outputs and inputs in production processes Khoury and Analoui emphasized that performance management models primarily aim to provide fair feedback to employees by documenting both positive and negative behaviors, which helps foster positive indicators This technique is essential for managing emotional elements within performance management frameworks Numerous studies on performance appraisal highlight various feedback methods utilized in organizations through Key Performance Indicators (KPIs) Essentially, KPIs serve as a bridge between human resource strategies and the company's vision, guiding managers in significantly enhancing performance Kritzinger noted that key performance indicators are quantifiable measures that define performance, establishing a foundation for fair feedback.
The selected indicators are the most critical for the current business objective that employees have to achieve to prove the ability and self create their career path
Parmenter identifies five categories of indicators: quantitative, practical, directional, actionable, and financial Quantitative indicators translate performance elements into numerical values, facilitating appraisals Practical indicators align with existing business processes, while directional indicators highlight the results employees must achieve by the end of the evaluation cycle Actionable indicators encompass all operations within an organization’s control that can drive change.
The remaining categories of indicators fall under the operation index In the fourth edition of Parmenter's book on key performance indicators, a debate exists regarding the classification of these indicators Performance indicators can be divided into two types: lag indicators, which assess outcomes, and lead indicators, which focus on performance drivers While this straightforward classification may simplify the selection of business indicators, it often leads to confusion between the two categories, making it less commonly used in defining performance metrics.
Distributive injustice in DongA Bank 38
Therefore, observation the annual business activity over moths or quarters is also the recommendations in picking up the key performance indicators
Effective performance management relies on well-defined indicators that are specific, measurable, attainable, relevant, and time-bound Clear and measurable indicators reduce confusion among employees and provide a structured plan for achieving goals Key performance indicators (KPIs) serve as motivational targets; however, if they are unrealistic, they can demotivate employees and negatively impact business operations Additionally, all performance indicators should align with the company's financial growth objectives, illustrating how employees contribute to these goals Finally, to ensure employees have a clear path to success, KPIs must include deadlines for task completion.
The preparation and monitoring stages are crucial for the success of performance management projects Rakar et al (40) introduced a closed-loop model that outlines eight steps for defining and measuring key performance indicators in production, beginning with the establishment of production goals and objectives.
Figure 20 Closed-loop model for key performance indicators
The model serves as a reminder for KPI builders about the feedback and review stages, ensuring that the KPIs tool effectively impacts employees' perspectives It emphasizes the importance of tailoring KPIs to align with the organization's characteristics at each stage.
While key performance indicators (KPIs) offer numerous benefits, enterprises must also be aware of potential pitfalls to mitigate risks during implementation Anon (see 37) highlights common mistakes that managers should avoid in the development, monitoring, and evaluation of KPIs For example, during the development stage, an overemphasis on numerous indicators can lead to a lack of focus on critical measures, affecting every phase of the project.
Key performance indicators (KPIs) are essential tools for enhancing productivity through evaluation and feedback processes They are routinely utilized within organizations as part of management frameworks like the Balanced Scorecard (BSC) Co-founded by Kaplan and Norton, the BSC serves as a comprehensive management framework for assessing organizational performance from four key perspectives: finance, customer, internal business processes, and learning and growth, which correspond to the functions of accounting and finance, marketing, value chains, and human resources.
The Balanced Scorecard (BSC) framework emphasizes the importance of balancing financial and non-financial indicators According to Frigo et al (42), BSC is an effective tool for banks to translate strategies into actionable steps, fostering an environment that encourages employees to enhance their work processes.
Distributive injustice in DongA Bank highlights the importance of balancing internal and external indicators in performance management strategies Gawankar et al emphasize that organizations must consider both financial and non-financial indicators to achieve success A survey conducted by Titko and Lace in 2010 with managers and frontline employees of an American retail bank identified key performance indicators within the balanced scorecard framework, focusing on financial, customer, internal processes, and learning and growth objectives Respondents noted that term deposits, new money lines, opened accounts, and new customers are crucial indicators Additionally, Chen et al found that relying solely on financial perspectives for performance evaluation in credit cooperative banks is insufficient for effective assessment.
Solution for main cause of distributive injustice of DongA Bank
A qualitative research technique was employed to gather data on high-level management at DongA Bank, where a focus group interview was conducted at the bank's head office The meeting, presided over by Mr Tuan, the chairman of DongA Bank, included five participants: Mr Hung, manager of the HRM division; Mr Quang, manager of the strategic management division; Mrs Thao Vy, leader of the organization development department; Mrs Chi, deputy director of the Ho Chi Minh branch; and Mr Tu, head of the sales department of the Ho Chi Minh branch The conference lasted thirty minutes and centered around two main questions posed by the moderator.
- Which solution is suitable for the existing organization of DongA Bank? And please share the reason why
Changing the existing performance appraisal system at DongA Bank presents both advantages and disadvantages On one hand, a revised system can enhance employee motivation and align performance metrics with organizational goals On the other hand, it may lead to confusion and resistance among staff if not implemented thoughtfully To mitigate these disadvantages, DongA Bank should prioritize clear communication and provide training to ensure employees understand the new appraisal criteria and processes By fostering a culture of feedback and continuous improvement, the bank can effectively navigate the challenges associated with this transition.
Before discussing alternative solutions, the moderator presents key performance indicators using the balanced scorecard and behaviorally anchored rating scale to provide essential information for participants.
Mrs Chi and Mr Tu believe that KPIs provide clearer guidance for direct sales teams, enabling them to achieve optimal performance However, Mrs Chi expresses concern about the challenges of implementing new performance indicators during periods of instability at DongA Bank She emphasizes that performance goals should align with both managerial objectives and actual business activities If the established KPIs are unrealistic, it may demotivate employees at branches and transactions.
Distributive injustice in DongA Bank 46
In the context of a master's perspective in human resource management, Mr Hung and Mrs Vy evaluated the benefits and challenges of various solutions to support their stance on modifying the current performance appraisal system They concluded that implementing Key Performance Indicators (KPIs) would be the most effective approach for DongA Bank, a retail bank Additionally, the HR managers emphasized the importance of utilizing internal human resources throughout the performance management process to minimize service costs and protect sensitive information.
DongA Bank should consider utilizing the training services of a renowned advisory firm like PwC, as the current personnel in the organization development department lack the necessary experience and expertise in performance management.
Mr Quang proposed implementing two solutions: establishing KPIs for the business unit and BARs for the Head Office Specifically, the Head Office's primary mission is to foster business collaboration between DongA Bank and its stakeholders within regulatory frameworks or processes, which complicates the evaluation of its performance.
Despite applying both alternative solution leading to high cost, it still be better than pitfall and failure project
Based all the opinion of participant, Mr Tuan, chairman of DongA Bank gives three main conclusions as following:
- Choosing KPIs with balance score card as the solution for high turnover rate in branches and transaction of DongA Bank;
- Assigned Mr Hung into the performance project manager Mr Hung responsible for this project from beginning to end The whole project has to be finished in 6 months
The performance appraisal of the head office requires a thorough analysis of the advantages and disadvantages of the proposed solutions Consequently, the chairman decided not to select a solution for the head office during this conference.
Action plan in organization
The performance appraisal objectives for DongA Bank, similar to those of other banks, are established to address potential issues effectively.
The primary objective of a performance management project is to achieve a balance between productivity and compensation packages When a business unit meets or exceeds the established KPIs, DongA Bank rewards them with benefits such as annual bonuses and salary increases.
- Control the impression from the high turnover rate by decrease from 21% to 16% - the medium group of high turnover rate of benchmark
- Enhance at least 15% productivity of employees (Comparing with competitors bank, concerning with benchmarking factors, the statistic 2017 show that Vietnamese bank has increase productivity from 15 to 87%)
Figure 23 The average net profit of each employee
4.2 Preparing stage (Duration: 1 month; Total cost: VND 650,000,000)
Task description Date to begin
Found the Performance management project team (thereafter called “Project team”)
1/12 1/12 HRM division / tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Distributive injustice in DongA Bank 48
Task description Date to begin
1/ Cost of training course: VND 500,000,000
VND/month (based on the salary of employees)
3 Revising job title system 3/12 31/12 Project team /
4.3 Identify potential indicators (Duration: 1 month; Total cost: VND 150,000,000)
Task description Date to begin
Communicate the information about new performance appraisal
Promulgating the draft key performance indicators framework base on balance score card
Conducting the survey to collect business unit perspective about the KPIs framework
Project team Directors of branches/ transactions
4 Revising and Promulgating official KPIs framework 28/1 31/1
Project team tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
4.4 Select indicators and set target for implementation
(Duration: 1 month; Total cost: VND 200,000,000)
Task description Date to begin
Based on the KPIs framework, project team statistics detail indicator in financial, customer, internal business process, learning and growth filed
Based on the historical data and benchmark to decide the growth rate and weights of each indicator
-Project team -Project management division
Selecting the indicators and submitting to the CEO for approval
-Project team -Project management division -CEO
Holding conference with business unit about the KPIs system to communicate the information and record the opinion of business unit
(Participant: manager and leader department level)
5 Fixed the indicators 4/3 6/3 Project team Compound in step
6 Set target for each branches and transaction 7/3 16/3 Project team Compound in step
(1) – (3) tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Distributive injustice in DongA Bank 50
4.5 Implement indicators (Duration: 2 weeks; Total cost: VND 75,000,000)
Task description Date to begin
Allocated employees in Project team into the business region of DongA Bank to conveniently guidance for implementation KPIs period
Mr Hung, Manager of HRM division, concurrent in manager of project team
Allocated KPIs for braches and transaction to implementation
4.6 Monitor and communicate results (Duration: 6 months; Total cost: VND
Task description Date to begin
Collect the implementation KPIs data of business units from core banking system
Evaluation results, comparing the productivity of KPIs and non KPIs period to review indicators
1/7 6/7 Project team VND 150,000,000 tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Task description Date to begin
Base on the result of trial stage (quarter 2/2019), Project team accomplish the reward policy for business unit and submitting CEO for approval
4.7 Act on results and Review indicators, policies and goals (Duration: 2 weeks;
Task description Date to begin
1 Collect data; evaluate result 1/10 4/10 Project team
Holding the meeting with whole related parties to discuss about inadequacies
Propose suitable reward policy for business unit
Holding the conference with business unit to communicate the information about reward policy and result of performance management project
VND 50,000,000 tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Distributive injustice in DongA Bank 52
The action plan for DongA Bank, based on the literature review, outlines detailed tasks to be completed within four months, followed by a revision stage lasting two quarters The key performance indicators (KPIs) development phase will incur costs of VND 1,075,000,000, while the revision phase will cost VND 750,000,000, making the total project cost double that of the advisory service fee Although outsourcing may appear more cost-effective, the advisory service package provides essential support from the preparation to the implementation stages The duration and costs of both solutions are comparable Additionally, performance management operates as a closed-loop model, necessitating regular updates to KPIs in line with the organization's context By training DongA Bank's internal project team, the bank can effectively adapt its performance and revision processes for KPIs, ensuring alignment with the evolving financial and non-financial indicators in the banking industry.