Con tents
In today's rapidly evolving technological landscape, knowledge is essential for integration into the global society, making human resources a crucial asset for businesses Managers recognize that cultivating knowledge and experience is vital for effective human resource management Prioritizing human resources is imperative, as they significantly contribute to a company's survival, growth, and overall success.
To combat the rising issue of "brain drain," companies must recognize the significance of human resources and implement effective policies that motivate and develop employees, ensuring their retention and engagement.
Employees often seek to change jobs due to factors such as monotony from repetitive tasks, a desire for new challenges and advancement opportunities, inadequate compensation and benefits, and limited opportunities for skill development This trend presents a significant challenge for managers, who must excel in human resource management, particularly in motivating their workforce.
To enhance employee motivation at Birkart Globistics Vietnam, it is crucial to foster a strong sense of commitment among staff, fully leverage their abilities, and improve retention rates Addressing the challenge of employee turnover, particularly among skilled and talented individuals, is vital for the company's success and stability Implementing effective motivational strategies will not only engage employees but also ensure their long-term dedication to the organization.
For a company which specializes in forwarding import-export service performed by full white collar workers, the maintenance, motivation and retention activities are more important and essential.
This graduation paper aims to analyze the human resource management practices at Birkart Globistics' representative office in Vietnam, with the goal of enhancing employee motivation and creating a conducive work environment By fostering employee satisfaction and encouraging contributions, the company can cultivate a dedicated, enthusiastic workforce, ultimately driving business growth and retention of valuable talent.
Human Resource Management is both a science and an art, encompassing complex subjects that cannot be fully explored in a limited format This graduation paper specifically examines motivation through the lens of compensation, job environment, and performance appraisal policies at Birkart Globistic Vietnam The focus is primarily on the activities conducted at the Ho Chi Minh representative office, with the intention of providing recommendations for enhancing employee motivation and retention.
This study utilizes a desk research methodology, gathering information primarily from textbooks, websites, newspapers, and company documents Additionally, the author conducted interviews with office staff to enrich the data collected.
This graduation paper consists of three chapters.
Chapter 1 is divided into two parts Part 1 introduces Birkart Globistic: the history and business activities Part 2 is about the establishment and development or Birkart Globistic Vietnam representative office.
Chapter 2 presents some theorical basics of motivation such as Maslow's hierarchy of Needs, theory X and theory Y, expectancy theory and equity theory
Chapter 3 is structured into three key parts: compensation, job environment, and performance appraisal, each containing four sections The first section discusses the impact of motivation-related policies, while the second analyzes the actual policies in place at Birkart Globistic Vietnam The third section offers suggestions for enhancing motivation policies, and the final section provides a summary of the key points covered in each part.
INTRODUCTION TO BIRKART GLOBISTICS
II THE ESTABLISHMENT AND DEVELOPMENT OF BIRKART GLOBISTICS VIETNAM
Chapter 1: Overview of Birkart G10bistics Vietnam Representative Office
This chapter explores the history of Birkart Globistics, beginning with an overview of its parent company in Germany and its key business activities and mission It also highlights the Birkart Globistics Vietnam representative office, which is managed by Birkart Globistics Hong Kong, providing context for its operations in the region.
Part two focuses on the establishment and growth of the Birkart Globistics representative office in Vietnam, analyzing its business performance while highlighting both its strengths and weaknesses.
The History of Birkart Globistics
In a fiercely competitive market, there IS a great need for developing and expanding the international trade market Import-Export plays an important role
• impulsing the development of production.
• Expanding commodity structure and trade market structure in the world, etc.
Therefore, Import - Export forwarding service and relating services are more and more powerful Stemming from Import - Export forwarding needs, Birkart Globistics was established.
1877, Birkart Globistics was founded in Germany as a family freight business by
The name "Birkart Globistics" was formed from the founder's name: 'Birkart', and the combination of' global' and' logistics'.
After 125 years with a rapid development, today Birkmi Globistics is a member of the Thiel Logistics AG Group - The public listed leading logistics service provider
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office with expertise in the development of information and technology - employs over
11,000 people in more than 350 locations in 50 countries with hundreds of own branch offices worldwide (Figure 1.1 is the Birkart Group Subsidieries)
It handles over 500,000 deliveries per year Birkart provides clients with quality solutions and continuous enhancements to facilitate all logistics needs.
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office
Picture 1.1: Birkart Globistics in the Past and Today.
BIRKART GLOBISTICS GmbH &Co logistic und Service KG Weichertstrasse 9
D6374I Aschaffenburg, Germany Phone: +49 6021 - 343 0 Fax: +49 6021 - 3434999 E-Mail: info@birkart.com Website: www.birkart.com Managers: Walter Nienstedt, Michael U Villinger.
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office
Picture 1.2: the Logo of Birkart Globistics.
Air & Ocean - Organization world-wide
Birkart Globistics Limited set up the fIrst office in Asia in 1972 Birkart Far East offices were established in HongKong (1972), Japan (1972),China (1972), Thailand (1989), Taiwan (1975), Korea (1999), Vietnam (1994).
Birkart Hong Kong was established in 1972 It is the Regional Office for the Far East Birkart Hong Kong operates for Project Logistics, Air and Sea Freight and
Chapter I: Overview of Birkart Globistics Vietnam Representative Office
Warehousing with more than 140 experienced staff It has three offices (one in
Kowloon Bay, and others in Kwai Chung,) and two warehouses (in Kwai Chung and Hunghom) And it is accredited ISO 9001 :2000 since 2003.
Darmstadt Ankara Changi Int'I Airport
Glandorf United States Of America Bratislava
Melle Ho Chi Minh City (Saigon) Salzburg
Wurzburg Republic Of Korea Peoples Republic Of China
Chapter I: Overview of Birkart Globistics Vietnam Representative Office
Macedonia Penang Czcch Repu blic
Stip Kuala Lumpur - Int'l Airport Brno
Hong Kong (Kowloon Bay) Switzerland
Hong Kong (Kwai Chung) Romania Basle/Mulhouse
Source: "Birkart Group Subsidiaries" [Accessed online, May 04,2006], http://www.birkmi.com
Business Acti vities II c Mission
THE ESTABLISHMENT AND DEVELOPMENT OF BIRKART
Chapter 1: Overview of Birkart G10bistics Vietnam Representative Office
This chapter explores the history of Birkart Globistics, beginning with an overview of its parent company in Germany, highlighting key business activities and its mission It also touches on the Birkart Globistics representative office in Vietnam, which is managed by Birkart Globistics Hong Kong, providing context for the company's operations in the region.
The second part of the article focuses on the establishment and growth of the Birkart Globistics representative office in Vietnam, examining the outcomes of its business operations while highlighting both the advantages and disadvantages encountered during this process.
A The History of Birkart Globistics
In a fiercely competitive market, there IS a great need for developing and expanding the international trade market Import-Export plays an important role
• impulsing the development of production.
• Expanding commodity structure and trade market structure in the world, etc.
Therefore, Import - Export forwarding service and relating services are more and more powerful Stemming from Import - Export forwarding needs, Birkart Globistics was established.
1877, Birkart Globistics was founded in Germany as a family freight business by
The name "Birkart Globistics" was formed from the founder's name: 'Birkart', and the combination of' global' and' logistics'.
After 125 years with a rapid development, today Birkmi Globistics is a member of the Thiel Logistics AG Group - The public listed leading logistics service provider
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office with expertise in the development of information and technology - employs over
11,000 people in more than 350 locations in 50 countries with hundreds of own branch offices worldwide (Figure 1.1 is the Birkart Group Subsidieries)
It handles over 500,000 deliveries per year Birkart provides clients with quality solutions and continuous enhancements to facilitate all logistics needs.
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office
Picture 1.1: Birkart Globistics in the Past and Today.
BIRKART GLOBISTICS GmbH &Co logistic und Service KG Weichertstrasse 9
D6374I Aschaffenburg, Germany Phone: +49 6021 - 343 0 Fax: +49 6021 - 3434999 E-Mail: info@birkart.com Website: www.birkart.com Managers: Walter Nienstedt, Michael U Villinger.
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office
Picture 1.2: the Logo of Birkart Globistics.
Air & Ocean - Organization world-wide
Birkart Globistics Limited set up the fIrst office in Asia in 1972 Birkart Far East offices were established in HongKong (1972), Japan (1972),China (1972), Thailand (1989), Taiwan (1975), Korea (1999), Vietnam (1994).
Birkart Hong Kong was established in 1972 It is the Regional Office for the Far East Birkart Hong Kong operates for Project Logistics, Air and Sea Freight and
Chapter I: Overview of Birkart Globistics Vietnam Representative Office
Warehousing with more than 140 experienced staff It has three offices (one in
Kowloon Bay, and others in Kwai Chung,) and two warehouses (in Kwai Chung and Hunghom) And it is accredited ISO 9001 :2000 since 2003.
Darmstadt Ankara Changi Int'I Airport
Glandorf United States Of America Bratislava
Melle Ho Chi Minh City (Saigon) Salzburg
Wurzburg Republic Of Korea Peoples Republic Of China
Chapter I: Overview of Birkart Globistics Vietnam Representative Office
Macedonia Penang Czcch Repu blic
Stip Kuala Lumpur - Int'l Airport Brno
Hong Kong (Kowloon Bay) Switzerland
Hong Kong (Kwai Chung) Romania Basle/Mulhouse
Source: "Birkart Group Subsidiaries" [Accessed online, May 04,2006], http://www.birkmi.com
Birkmi logistics services are so diversified (see picture 1.4: Business Activities of
Birkart Globistics) It serves in these fields:
• Freight forwarding Air and Sea
Chapter I: Overview of Birkart Globistics Vietnam Representative Office
• Value added services (quality controll packing and labeling! palletisation)
• Supply Chain Consultancy and Management
Birkart provides value logistic services in order to build long lasting and strategic relationships with its customers.
II THE ESTABLISHMENT AND DEVELOPMENT OF BIRKARTGLOBISTICS VIETNAM REPRESENTATIVE OFFICE
The Establishment and Development
BIRKART GLOBISTICS Vietnam has entered into Vietnamese market as early as
1989 with offices in HoChiMinh City and Hanoi (in co-operation with GEMADEPT - the most reliable, long established Vietnamese Forwarding Company).
In 1994, Birkart has opened their resident representative office in HoChiMinh City and continued to expand with another resident representative office in Hanoi in 1997.
There are two warehouses: 42 ICD Transimex and 8 New port.
With 29 experienced staff, Birkart provides clients with high quality logistics and continuously upgrade services in order to be able to fulfill clients' specific requirements.
Most of employees are female The male employees are about one-third of total office's employees
Chapter 1: Overview ofBirkart Globistics Vietnam Representative Office
Diagram 1.1: The Rate of Male and Female Employees
Birkart Vietnam is the regional office for Cambodia and Laos.
Hoan Kiem District., Hanoi, Vietnam.
123 Le Loi Street, 4 th Floor
Picture 1.4: Business Activities of Birkart Globistics
Chapter 1: Overview of Birkart Globistics Vietnam Representative Office
The Business Activities
Birkart Globistics Vietnam Representative Office has the following functions:
• Carrying out market research activities; Promoting Birkart Globistics Limited Company's investment and cooperation project in Vietnam
• Impulsing contracts' performance and agreement to forwarding services which conform to the law in Vietnam that is signed between Birkart Globistics Limited and Vietnamese partner.
• Giving information about situation of import-export goods to buyers and sellers as a middle man.
Birkart supports traders and businesses globally in exploring the Vietnamese market and its export potential, facilitating the signing of trade contracts and enhancing forwarding services for optimal development.
The Representative Office's Structure
Air Freight Export Department
• The process of receiving, checking and confirming information from shippers is similar to sea freight export.
Birkart Vietnam processes received information by verifying and confirming it before booking the airline and issuing a draft house airway bill Subsequently, the draft is faxed to the shipper for review and confirmation.
Chapter I: Overview of Birkart Globistics Vietnam Representative Office
Birkart will issue a consignee airway bill, which does not include the weight and package details until the shipper delivers the cargo to the airport for weighing and measurement, along with a manifest.
• Then Birkart Vietnam issues shipper bill and faxes a copy shipper bill to shipper Next, Birkart Vietnam issues shipping advice.
• Similar to sea freight, Birkart Vietnam has to control and inform to shipper necessary information if there are any problems.
Importing Department
Birkart Vietnam promptly verifies cargo import information received from shippers by coordinating with its agency in the foreign country to confirm the details.
• After receiving confirmation from foreign Birkart agency, Birkart Vietnam will accept to import this cargo.
• Birkart Vietnam will fax attached list (if the cargo was sent by vessel) to consignee after receiving house bill of lading and master bill of lading.
Upon receiving the shipping line's advice of arrival and delivery order, Birkart Vietnam will issue a delivery order for cargo sent by vessel or a letter of attorney for cargo sent by airline Additionally, Birkart Vietnam will provide an advice of arrival, which will be faxed only to the consignee.
• When consignee pays necessary fees to Gemadept, Birkart will provide delivery order or letter of attorney to consignee.
Accountants are responsible for paying salary to employees and reporting statistics data which involves the amount of goods exported through
Department Department Department Department Department Department
Figure 1.2: The Representative Office's Structure
Marketing Department
This department plays an important role in the development and expansion of the office Marketers are responsible for customers supporting, seeking new clients.
The Result of Business Activities
Year Net weight exporting by Increasing Number of containers Increasing ! air (tons) rate (%) exporting by sea (20') rate (%)
Figure 1.3: the Quantity of Goods Is Exported Through Birkart's Service in 2003,
Vietnam's economy develops day by day Vietnam's products and services are more and more satisfied for both domestic and oversea customers' demand.
Moreover, Government's policies create good conditions to Import -EXP0l1 companies So, Import-Export activities increase strongly Thus, Forwarding service also develops rapidly.
Many forwarding service companies have emerged to seize opportunities in the market Despite facing intense competition, Birkart continues to achieve positive outcomes, with a consistent year-on-year increase in the volume of goods exported through its services, particularly noted in 2004.
35% (air) and 4% (sea) compared with the rate of the year 2003; in 2005 the rate increases by 14% (air) and 15% (sea) compared with the year 2004).
Chapter 1: Overview of Birkart Globistics Vietnam Representative Office
Birkart achieves success through strong customer trust and a commitment to continuous quality improvement The company's dedicated and experienced sales and marketing team has developed effective policies to support and prioritize customer care.
Concerning types of exporting goods, Vietnamese companies export mainly clothes, shoes, cotton wool toys, pottery and products made by coconut Below table shows detailed figures:
Types of Exporting Goods The Rate of Each Type Compare with the Total
Products are made by coconut 10 % -j
Figure 1.4: The Rate of Each Type of Exporting Goods
Clothes and shoes are expOlied by famous domestic companies such as Legamex, Nha Be, Vi~t TiSn, Vi~t Th~ng.
The majority of goods are exported by sea to the European market, while exports to Asian and American markets are on the rise In contrast, exports to the African market remain low due to ongoing political instability and frequent conflicts in the region.
Chapter 1: Overview of Birkart G10bistics Vietnam Representative Office
Diagram 1.2: Situation of Goods Are Exported to Foreign Markets
Advantages and Disadvantages
Advantages
Birkart boasts hundreds of branch offices globally across Europe, Asia, America, and Africa, providing a significant advantage to Birkart Vietnam This extensive network enables the company to efficiently relay crucial information regarding the import-export landscape to both Vietnamese and international partners.
• Birtkart Vietnam has an experienced, enthusiastic, energetic and dedicated staff This is company's success because in a fiercely
Chapter 1: Overview of Birkart Globistics Vietnam Representative Office competitive market, what Birkart can provide, serve customers the others can also However, its staff (or personnel) is one characteristic that may be difficult for the competition to duplicate Moreover, Birkart's staff is young and most of them are unmarried So, they concentrate highly on their work
• One of the most important advantages of Birkart Globistics is that the company has loyal customers who rely on and support to Birkart for a long time.
• Government's policies create good conditions to Import-Export field.
So, Birkart takes also some advantages.
THEORETICAL BASES OF MOTIVATION
lIHE()RIES ()F M()1I1VAlII()~
Content Theory
1 Maslow's Hierarchy of Needs Theory
Process Theory
MOTIVATION ACTIVITIES IN BIRKART GLOBISTICS
Analyzing The Compensation Reality of Birkart Globistics
II THE ROLE OF JOB ENVIRONMENT IN MOTIVATING EMPLOYEE
A The Role of Job Environment in Motivating Employee
B Analyzing the Job Environment Reality of Birkart Globistics
III THE ROLE OF PERFORMANCE APPRAISAL IN MOTIVATING
A The Role of Performance Appraisal in Motivating Employee
B Analyzing the Performance Appraisal Reality of Birkart
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
This chapter delves into key factors that significantly influence employee motivation and retention, focusing on three main aspects: compensation, job environment, and job performance.
The author examines the crucial factors influencing employee motivation at Birkart Globistics Vietnam, focusing on compensation, work environment, and job performance Based on this analysis, the author will provide recommendations to improve employee motivation within the company.
A The Role of Compensation in Motivating Employee
People have various personal reasons for working, as each individual seeks to fulfill specific needs through their job The benefits gained from work significantly influence our morale, motivation, and overall quality of life.
People are motivated by various factors in their work; some are driven by passion for their job or the clients they serve, while others find satisfaction in personal fulfillment and social interactions with colleagues and customers Additionally, there are those who thrive on change, challenges, and the opportunity to tackle diverse problems, seeking to fill their time with engaging activities.
A golden key for manager to own a successful business is to point out a proper employee motivation.
Note that different people can have quite different motivators For example, some people are motivated by more money, others by more recognition, time off from
I "Work Is about the Money" by Susan M Heathfield [Accessed on line, June 10 2006 J, http://www.google.com.vn
Chapter 3: Suggestions to Enhance Employee Motivation through Analying work, promotions, opportunities for learning, opportunities for socializing and relationships, etc Therefore, when attempting to motivate people, it's important to identify what motivate them.2
Compensation is considered as one of major factors III motivating workers It influences both employer and employee.
For employer, compensation is both one of the firm's expense which force him or her to consider carefully in making compensation decisions and also a tool to influence employee behaviors.
From an employee's perspective, compensation encompasses all forms of rewards received for performing tasks within an organization and is a crucial aspect of human resource management It significantly influences job seekers, as individuals often prioritize compensation to fulfill their needs Employees exchange their skills, effort, and loyalty for both financial and non-financial rewards.
Financial compensation can be categorized into direct and indirect forms Direct financial compensation includes wages, salaries, bonuses, and commissions that employees earn In contrast, indirect financial compensation refers to benefits that provide additional financial rewards, such as vacation time, insurance options, and services like child or elder care.
• Non-financial rewards like task significance, flextime, comfOliablc working conditions, praise, and self-esteem affect employees' motivation, productivity, and satisfaction.
1 "Helping People to Motivate Themselves" written by Carter McNamara, MA, PhD [Accessed on line, June 10 , 2006], http://www.google.eom.vn
3 John M Ivancevich, Human Resource Management, Ninth Edition (Me Graw Hill, Inc, 2003), p.297
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Social security Unemployment insurance Security benefist
(retirement, life insurance, educational assistance, financial services)
Premium pay (Hazard pay, shift differentials) Payment for time not worked (vacation, sick pay )
Skill variety Task identity Task significance Autonomy Feedback
Sound policies Competent employees Congenial co-worker Appropriate status symbols Comfortable working condit ions Workplace tlexibi Iity
Figure 3.1: Component of a total compensation program
Source: R Wayne Mondy &Robert M Noe & Shane R Premeaux, Human resource management (Prentice Hall Inc, 1999), p 375.
While compensation may not be the sole motivator for employees, undervaluing the significance of salary and benefits can be a critical error for employers It is essential for managers to focus on creating an equitable compensation system, as employee pay should accurately reflect their seniority, contributions to the company, education, skills, experience, and innovative efforts.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
An inequitable compensation system can lead to employee dissatisfaction and unhappiness, ultimately resulting in negative outcomes such as increased absenteeism, labor relations issues, decreased productivity, and higher turnover rates.
As mention III chapter two, there are three comparative tendencies which frequently occur:
• Employees usually compare their contribution to the company with what they are received.
• They often compare the value received for the similar job in the same firm.
In other words, they often compare the value received with other colleagues in the same company.
• Finally, they tend to compare the value received for the same job in other companies.
Managers can effectively utilize Maslow's and McClelland's theories of needs to determine appropriate compensation strategies Employees at lower levels of need prioritize direct financial compensation, while those at higher levels value non-financial benefits such as employee services, vacation time, and task significance Additionally, workplace flexibility and appropriate status symbols play a crucial role in meeting the needs of these higher-level employees.
Adam's equity theory is essential for developing effective equity compensation, as employee motivation is significantly impacted by their perception of fair pay According to Adam, an employee's productivity and satisfaction are largely determined by their sense of fairness (equity) or unfairness (inequity) in the workplace, especially when compared to their peers.
5 John M Ivancevich, Human Resource Management, Ninth Edition (Mc Graw Hill, Inc, 2003), p.309.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Expectancy theory, formulated by Vroom, aids managers in comprehending how motivation relates to compensation It posits that motivation is influenced by the belief that effort will lead to performance Individuals create a mental image of the probability that a specific level of effort will yield the desired results.
B Analyzing The Compensation Reality of Birkart Globistics Vietnam
The deputy branch manager pays salary based on some factors such as employees' skill, capacity, effort, experience and seniority.
During special occasions, such as Tet holidays or a manager's birthday, branch managers often host parties for their employees Following these celebrations, karaoke sessions are held at the manager's house, demonstrating the office's commitment to engaging with and appreciating its staff.
Moreover, each employee receives an amount of money about 200,000 VND on birthday.
Each year, in addition to the base salary of twelve months employees receive an extra month salary which can be called the salary of thirteenth month.
Apart from legal holidays, each year there are twelve days' leave (with pay) for each individual.
25% of employees' base salary is used to pay for social security and health insurance premium each year However, the office supports 19% and each employee only pays for the rest (5%).
The employees are satisfied with the partly support for social security and insurance premium from the office.
Besides 5% insurance premium, each employee has to pay 50,000 VND to staffs fund at each month.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
To enhance long-term benefits and foster employee commitment, offices should consider implementing annual salary increases Even a modest raise can significantly boost employee satisfaction and morale.
The representative office employs around twenty staff members Despite the small team size, it is unable to provide certain compensations, such as lunch or parking fees, due to significant financial constraints.
However, the office should not pay based salary only and forgets motivating employees by benefit and reward on some special days or traditional holidays.
Summary
II THE ROLE OF JOB ENVIRONMENT IN MOTIVATING EMPLOYEE
A The Role of Job Environment in Motivating Employee
B Analyzing the Job Environment Reality of Birkart Globistics
III THE ROLE OF PERFORMANCE APPRAISAL IN MOTIVATING
A The Role of Performance Appraisal in Motivating Employee
B Analyzing the Performance Appraisal Reality of Birkart
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
This chapter elaborates on key factors that enhance employee motivation and retention, focusing on compensation, job environment, and job performance.
The author will examine the key motivational factors affecting employee engagement at Birkart Globistics Vietnam, focusing on compensation, work environment, and job performance Additionally, the author aims to provide recommendations to boost employee motivation within the organization.
A The Role of Compensation in Motivating Employee
People have various motivations for working, as each individual seeks to fulfill specific needs through their job The benefits gained from work significantly influence our morale, motivation, and overall quality of life.
People are motivated by various factors in their work; some are driven by passion and love for their profession or the clients they serve, while others find fulfillment in camaraderie and interactions with coworkers and customers Additionally, many individuals thrive on the excitement of change, challenges, and the opportunity to tackle diverse problems in their roles.
A golden key for manager to own a successful business is to point out a proper employee motivation.
Note that different people can have quite different motivators For example, some people are motivated by more money, others by more recognition, time off from
I "Work Is about the Money" by Susan M Heathfield [Accessed on line, June 10 2006 J, http://www.google.com.vn
Chapter 3: Suggestions to Enhance Employee Motivation through Analying work, promotions, opportunities for learning, opportunities for socializing and relationships, etc Therefore, when attempting to motivate people, it's important to identify what motivate them.2
Compensation is considered as one of major factors III motivating workers It influences both employer and employee.
For employer, compensation is both one of the firm's expense which force him or her to consider carefully in making compensation decisions and also a tool to influence employee behaviors.
From an employee's perspective, compensation encompasses all forms of rewards received for fulfilling organizational responsibilities, making it a crucial aspect of human resource management It serves as a primary motivator for seeking employment, as individuals rely on their earnings to satisfy various needs Employees exchange their skills, effort, and loyalty for both financial and non-financial compensation.
Financial compensation can be categorized into direct and indirect forms Direct financial compensation includes wages, salaries, bonuses, and commissions that employees receive as pay In contrast, indirect financial compensation, often referred to as benefits, encompasses all financial rewards not classified as direct pay Common examples of these benefits are vacation time, various types of insurance, and services such as childcare or elder care.
• Non-financial rewards like task significance, flextime, comfOliablc working conditions, praise, and self-esteem affect employees' motivation, productivity, and satisfaction.
1 "Helping People to Motivate Themselves" written by Carter McNamara, MA, PhD [Accessed on line, June 10 , 2006], http://www.google.eom.vn
3 John M Ivancevich, Human Resource Management, Ninth Edition (Me Graw Hill, Inc, 2003), p.297
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Social security Unemployment insurance Security benefist
(retirement, life insurance, educational assistance, financial services)
Premium pay (Hazard pay, shift differentials) Payment for time not worked (vacation, sick pay )
Skill variety Task identity Task significance Autonomy Feedback
Sound policies Competent employees Congenial co-worker Appropriate status symbols Comfortable working condit ions Workplace tlexibi Iity
Figure 3.1: Component of a total compensation program
Source: R Wayne Mondy &Robert M Noe & Shane R Premeaux, Human resource management (Prentice Hall Inc, 1999), p 375.
While compensation may not be the sole motivator for employees, neglecting its significance can be a critical error for employers Therefore, it is essential for managers to focus on creating a fair equity compensation system This system should reflect employees' seniority, contributions to the company, education, skills, experience, and their initiatives and innovations.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
An inequitable compensation system can lead to employee dissatisfaction and unhappiness When employees experience discontent, it often results in negative outcomes such as increased absenteeism, labor relations issues, decreased productivity, and higher turnover rates.
As mention III chapter two, there are three comparative tendencies which frequently occur:
• Employees usually compare their contribution to the company with what they are received.
• They often compare the value received for the similar job in the same firm.
In other words, they often compare the value received with other colleagues in the same company.
• Finally, they tend to compare the value received for the same job in other companies.
Managers can utilize Maslow's and McClelland's theories of needs to offer appropriate compensation Employees at lower levels of need prioritize direct financial compensation, while those at higher levels value non-financial rewards such as employee services, benefits, vacation time, task significance, workplace flexibility, and suitable status symbols.
Adam's equity theory is essential for developing effective equity compensation, as employee motivation is significantly impacted by their perception of fair pay According to Adam, an employee's productivity and satisfaction are largely determined by their sense of fairness or unfairness in the workplace, particularly when compared to their peers.
5 John M Ivancevich, Human Resource Management, Ninth Edition (Mc Graw Hill, Inc, 2003), p.309.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Expectancy theory, developed by Vroom, illustrates the connection between motivation and compensation by emphasizing that motivation is influenced by the belief that effort will lead to performance Individuals create mental assessments regarding the probability that their level of effort will yield the desired results.
B Analyzing The Compensation Reality of Birkart Globistics Vietnam
The deputy branch manager pays salary based on some factors such as employees' skill, capacity, effort, experience and seniority.
During special occasions such as Tet holidays or a manager's birthday, branch managers often host parties for their employees Following these celebrations, karaoke sessions at the manager's home provide a fun and engaging way to demonstrate the office's commitment to employee well-being and camaraderie.
Moreover, each employee receives an amount of money about 200,000 VND on birthday.
Each year, in addition to the base salary of twelve months employees receive an extra month salary which can be called the salary of thirteenth month.
Apart from legal holidays, each year there are twelve days' leave (with pay) for each individual.
25% of employees' base salary is used to pay for social security and health insurance premium each year However, the office supports 19% and each employee only pays for the rest (5%).
The employees are satisfied with the partly support for social security and insurance premium from the office.
Besides 5% insurance premium, each employee has to pay 50,000 VND to staffs fund at each month.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
To foster long-term benefits and enhance employee commitment, offices should consider implementing annual salary increases Even modest raises can significantly boost employee satisfaction and morale, demonstrating the company's investment in its workforce.
The representative office employs approximately twenty staff members Despite the small team size, the office is unable to provide certain compensations, such as lunch or parking fees, due to significant financial constraints.
However, the office should not pay based salary only and forgets motivating employees by benefit and reward on some special days or traditional holidays.
The Role of Job Environment in Retaining Employee
A The Role of Job Environment in Motivating Employee
If the manager wants his workers perform well, he needs to create a job environment with necessary conditions to help them gain the entrusted job.
Creating a motivated working environment involves more than just favorable working conditions; it requires sound policies, workplace flexibility, appropriate status symbols, and a supportive corporate culture A truly motivating atmosphere is complex and encompasses various factors that contribute to employee satisfaction and productivity.
Joanne Sujansky assumes that: "The challenge for most companies is to create a working environment that employees find stimulating, supportive and rewarding." 7
Managers must ensure that employees have access to the necessary expertise and tools to perform their jobs effectively This support can include physical tools, office equipment, skills training, and suitable working conditions.
While working conditions may not significantly influence employee motivation, they are crucial in minimizing turnover and enhancing loyalty Factors such as the physical environment of the workplace and company policies contribute to these working conditions.
The physical characteristics of the workplace may be the physical surroundings of a job (the equipment, the office size, office location )
7 "Seven strategies for motivating and retaining employees" written by Joanne Sujansky [Accessed on line. June 23,2006], http://www.google.eom.vn
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Policies that demonstrate management's genuine commitment to employee relationships can act as effective motivators When a company's policies reflect respect and confidence, rather than fear or doubt, they can positively influence employee morale Implementing policies such as flextime and stable employment can further enhance motivation and satisfaction among employees.
The physical working conditions and company policies address essential Physiological Needs, including competitive pay, benefits, and favorable working conditions Additionally, they fulfill Safety Needs through comprehensive benefit programs like insurance and retirement plans, ensuring job security and promoting safe, healthy work environments, all supported by competent, consistent, and fair leadership.
Each country has its own culture Each city has its own culture and each organization has its own culture, too.
Corporate culture is defined as the system of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms.9
Organization culture helps to distinguish the organization from other organizations.
A firm's culture is reflected in its business practices, customer and employee treatment, departmental autonomy, and employee loyalty It embodies the perceptions and attitudes of its workforce, shaping the overall organizational environment.
In other words, the corporate culture is shaped by company characteristics, organization strategies, employee manner, style and so on Conversely, the
8 R Wayne Mondy and Arthur Sharplin and Edwin B.Flippo, Basic Management Concepts and Practices,
Fourth Edition (Allyn and Bacon, Inc, 1994), p.l63
9 Documents from Doctor Nguyen Huu Than
10 John M Ivancevich, Op Cit., pA8
Chapter 3: Suggestions to Enhance Employee Motivation through Analying company culture can impact on the behavior, productivity, and expectations of employees.
New managers and employees are affected by the culture that is built by old managers and employees So, everyone in company must pay attention to build a positive culture.
A positive workplace culture is characterized by professionalism, respect, and openness among employees and management In such an environment, individuals demonstrate a serious commitment to their work, foster supportive relationships with colleagues and customers, and actively listen to feedback Managers play a crucial role by being receptive to new ideas and committed to personal improvement, creating an inclusive atmosphere that encourages collaboration and growth.
B Analyzing the Job Environment Reality of Birkart Globistics Vietnam
1 Working Conditions a The Physical Characteristics of the Workplace
Birkart understands the significant impact of workplace environment and conditions on employee morale To enhance this, the company has chosen to rent an office near Ben Thanh Market, situated in the heart of Ho Chi Minh City, ensuring convenient access for employees and minimizing commute times.
The Birkart representative office and Gemadept office, located in the same building, offer convenience for employees and customers Birkart is situated on the fourth floor, while Gemadept occupies the fifth floor, facilitating easy face-to-face interactions for various procedures.
The manager attaches special importance to working conditions the ol'l1cc is well-equipped with air conditioners, desks, telephone, computers, laptops, fax machines, printers, photocopiers, refrigerators, and so forth.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Every employee is equipped with a telephone, computer, and desk adorned with decorative plants and essential stationery Certain employees receive laptops to enhance their productivity This equipment serves as valuable tools that enable employees to perform their tasks effectively.
In a comfortable office equipped with air conditioning, employees can escape the heat outside while enjoying convenient amenities like a refrigerator This allows individuals to keep their drinks, such as milk and coffee, cold and easily accessible, enhancing their overall work experience.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Picture 3.1: Part of Working Office of Birkart Ho Chi Minh
Source: "Our Branch in Ho Chi Minh City, Saigon" [Accessed on line, May 28 ,
2006], http://www.birkart.com b The Office Policies
The office operates from 8:00 am to 12:00 pm, followed by a 90-minute lunch and nap break, then resumes from 1:30 pm to 5:30 pm Employees work Monday through Saturday afternoons, enjoying the remainder of Saturday and all of Sunday off.
Apart from office hours, some of employees have to work extra hours because volume of work is so much.
The manager fosters a culture of mutual respect among employees, ensuring that everyone values one another When mistakes occur, the manager addresses them privately, allowing employees the opportunity to correct their errors and continue their work This approach minimizes immediate dismissals, promoting a sense of job security and stability for all employees.
Employee identification cards displaying names and positions play a crucial role in enhancing motivation within the workplace These cards foster a sense of belonging among employees, reinforcing their connection to the office environment.
Anyone who opens the door of Birkart office will see a staff with friendly face, polite clothes Birkart does not required employees to wear uniforms So,
Chapter 3: Suggestions to Enhance Employee Motivation through Analying everyone can wear clothes which they like as long as it is elegant, polite and formal.
All employees are intellectuals who understand the importance of appropriate behavior and maintain a polite demeanor towards one another Notably, male employees refrain from smoking or consuming alcohol in the office, fostering a professional environment There is a strong sense of camaraderie, as colleagues genuinely care for each other's well-being, often checking in on those who are unwell This supportive atmosphere allows employees to treat each other like family, enhancing workplace relationships.
Suggestions about Job Environment
A positive job environment is crucial for employee satisfaction and productivity, as it provides the necessary conditions and tools for talent development In contrast, a poor work atmosphere can lead to low morale, decreased performance, and higher turnover rates Fostering a supportive workplace is essential for motivating employees and enhancing their overall work experience.
The job environment encompasses the physical aspects of the workplace, company policies, organizational characteristics, and employee interactions Employees at Birkart Globistics Vietnam generally express satisfaction with their work environment; however, there are areas for improvement This section offers suggestions aimed at enhancing employee motivation and overall workplace satisfaction.
A The Role of Performance Appraisal in Motivating Employee
Employees are motivated to excel in organizations where their efforts are acknowledged, such as through a simple "thank you" or a pat on the back, as this fosters a sense of value To effectively recognize and appreciate their staff's contributions, managers can implement performance appraisals, also known as performance reviews, personnel ratings, merit ratings, employee appraisals, or employee evaluations.
Formally defined, performance appraisal is a process of systematically evaluating performance and providing feedback on which performance adjustments can be made."
II John R Schemlerhom, Jr and James G Hunt and Richard N Osborn, Organizational behavior, Seventh edition (John Wiley and Sons, Inc, 1999) p 135
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
More simple definition, performance evaluation is the activity used to determine the extent to which an employee performs work effectively.12
Performance appraisal is so useful for human resource management Managers can use it for:
Employee development is essential for identifying training needs and evaluating the effectiveness of training programs It fosters a strong counseling relationship between supervisors and subordinates, while also encouraging supervisors to actively observe and support employee behavior for continuous improvement.
• Motivation: it can encourage initiative, develop a sense of responsibility, and stimulate efforts to perform better.
• Human resource and employment planning: it can serve as a valuable input to skills inventories and human resource planning.
• Legal compliance: it can serve as a legally defensible reason for promotions. transfers, rewards, and discharges.13
Performance appraisal is essential for both organizational growth and employee development, as it provides valuable insights into job effectiveness It helps employees understand their alignment with company objectives and identifies their strengths and weaknesses in performance.
Applying expectancy motivation theory to performance appraisal is highly beneficial, as it provides employees with clear feedback on their efforts This feedback helps them understand the level of performance required and the specific actions they need to take to achieve their goals and earn desired rewards.
Recognizing the significance of performance appraisals, it is essential to establish specific, realistic, and achievable goals for the process Once managers have defined these performance appraisal objectives, employees should be actively engaged in the evaluation process to ensure alignment and clarity in expectations.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying know the job expectations Then, manager and employee appraise performance by examining work performed After that, manager will discuss appraisal with employee The discussion helps both employer and employees understand some advantages and difficulties during the work performance period All of the above actions are called the performance appraisal process (see figure 3.2: The Performance Appraisal Process).
To effectively evaluate an employee's performance, managers can utilize various appraisal criteria, including traits, behaviors, task outcomes, and potential for improvement Employing methods such as the ranking method, paired comparison, critical incident diary, essay method, rating scales, and 360-degree feedback can enhance the appraisal process, providing a comprehensive assessment of a worker's contributions and areas for growth.
Each method can be suitable for special case Depending on the managers' purposes, they chose proper method.
The critical incident diary is an effective performance appraisal method that captures notable instances of success or failure in specific areas of performance This qualitative approach not only aids in employee development and feedback but also provides valuable lessons from failures To foster employee growth, managers should consider implementing this insightful method.
Performance appraisal can be conducted not only by managers but also by immediate subordinates and peers Often, these evaluations are more accurate, as colleagues who work closely with employees may have a better understanding of their performance than managers who are less familiar with day-to-day operations.
The below figure is sample of performance appraisal
14 John R Schermerhorn, Jr and James G Hunt and Richard N Osborn" Gp Cit., p 141
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Evaluate the performance in each of the following factors on a scale of 1 to 5:
5= Outstanding, consistently exceeds expectations for this factor.
4=Above expectations, consistently meets and occasionally exceeds expectations.
3=Meets Expectations, consistently meets expectations.
2=Below Expectations, occasionally fails to meet expectations.
I=Needs Improvement, consistently fails to meet expectations.
Part 1- Task Outcomes (Weighted 80% of total score)
List mutually agreed- to performance factors from the job description and goals established from the preview performance review
Average Score (Divide total points by number of factors used)
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Part 2- Personal Behaviors (10% of total score)
Average Score (Divide total points by number of applicable factors)
Part 3- Personal Traits (10% of total score)
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Average Score (Divide total points by 5 )
Points from Part I +Part 2 +Part 3 = Total Points
Performance goals for next appraisal period:
Self- development activity for this employee
Employee's Signature (does not necessarily indicate Title Date agreement)
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Figure 3.2: Rating Scale Method of Performance Appraisal.
Source: R Wayne Mondy and Robert M Noe and Shane R Premeaux, Human Resouse Management (Prentice Hall Inc, 1999), p 290
Identify Specific Performance Appraisal Goals
Establish Job Expectations (Job Analysis)
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
Figure 3.3: The Performance Appraisal Process
Source: R Wayne Mondy and Robert M Noe and Shane R Premeaux, Human Resouse Management (Prentice Hall Inc, 1999), p 283
B Analyzing the Performance Appraisal Reality of Birkart Globistics Vietnam
Currently, Birkart Globistics Vietnam does not implement performance appraisals, focusing solely on targets for marketing and sales officers Employee performance is monitored through the supervision of deputy branch managers, and no formal appraisal methods are in place.
Although Birkart Vietnam is representative office, it is necessary to have an annual appraisal at least in order to serve for the purpose of motivation and compensation decisions.
According to current working situation, the author realizes that everyone performs well If the author has a permission to appraise, "good", "very good" and
Positive evaluations, such as "excellent," greatly enhance employee satisfaction and motivation, as they recognize individual efforts However, many employees remain unaware of their performance levels due to insufficient appraisals.
Therefore, if it is possible the office should have a simple appraisal as follow example:
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
VERY GOOD GOOD AVERAGE BAD
In the near future, as Vietnam joins the World Trade Organization (WTO), Birkart Globistics Vietnam will operate as a fully foreign-owned company, paving the way for significant expansion and growth opportunities.
Chapter 3: Suggestions to Enhance Employee Motivation through Analying
,i scale, Birkart needs a closer management especially in human resource And performance appraisal is also more necessary At that time, it may be required to possess a detailed performance appraisal.
Performance appraisal is essential for evaluating employee performance over a specific period, as it fosters initiative, responsibility, and motivation to excel Key purposes of performance appraisal include employee development, motivation, human resource planning, and ensuring legal compliance Managers can employ various methods for performance evaluation Currently, Birkart lacks a performance appraisal system, but implementing a straightforward appraisal process could effectively motivate employees.