Analyzing motivation policies at vasg software and media company

In addition to the introductionchapter, the paper begins with chapter I "Overview ofVASC Software and MediaCompany." Then, the author presents "TheoreticalBasisof Motivation "inchapter 2

GRADUATION PAPER

TOPIC:

ANAL YZINGMOTIV ATION

ACTIVITIES OF VASC SOFTWARE AND

I would like to express my gratitude to professors and teachers

of HUH -IT University who have provided me lots of valuableknowledge and skills

Also, I would like to thank Dr Nguy~n Huu Than, my advisor.Without his advice, helpful guidance and encouragement, thisthesis would not be finished

I wish to offer my thanks to the staff of VASC Software andMedia Company and my friends, who has helped me by givingcontributive opinions and supplying related materials

Last but not least, I'm so grateful for the encouragement andsupport from my family during the past four years

July 2005

Nguy~n Minh Nh~t

. .

Advising Nguy~n Minh NMt to write the topic "Analyzing Motivation Policies

at VASC Software and Media Company" I have some remarks as follows:

ABOUT THE STUDYING ATTTITUDE

Nguy~n Minh Nh~t has had a serious working attitude Although facingdifficulty in her health, she has been serious about correcting her thesis manytimes and has contacted the advisor regularly She has proved to be enthusiasticand has successsfully completed her paper in compltance with HUFLIT

ABOUT THE FORM

• The research paper cover is designed in accordance with the school sample.

• The paper layout is arranged clearly, elegantly, and the chosen font is easy

to read; the colored paper at the beginning of each chapter helps readersdistinguish different chapters easily

• The "table of content" pages are laid out clearly and brightly and thenumerical codes are set in line with the school regulations

• The figures list page is set after the "table of content"pages.

• The paper has introduction at the beginning of each chapter to introduce themain headings of individual chapter In addition, there is a summaryparagraph at the end of each chapter so that it can cover the whole chapter

• The paper has enough illustrated figures and charts with notes andquotations of the reference materials coded scientifically (the initial number

is the chapter ordinal number, and next number is figure and chart ordinalnumber)

• The top, bottom, left, and right margins of the paper sheets are appropriate tothe international standards

• The paper consists of 14 "footnotes" cited from 9 references that arearranged aphabetically in accordance with the international standards

• The style is concise and clear-cut

•

ABOUT THE CONTENTS

The research paper is logically structured In addition to the introduction

chapter, the paper begins with chapter I "Overview ofVASC Software and Media

Company." Then, the author presents "Theoretical Basis of Motivation "in

chapter 2 to refer some popular theories of motivation such as Maslow'sHierarchy of Needs, Theory X and Theory Y of Douglas McGregor, Herzberg'sMotivation-Hygiene Theory and Victor Vroom's Expectancy Theory Next, theauthor presents "The Introduction to Furniture Global Joint Venture Company(FGC)" in Chapter 2 The main parts are in chapter 3 and 4 Chapter 3 analyzesthe motivation at the company Finally, chapter 4 puts forward some suggestions

to enhance motivation in order to make the employees feel more satisfied withtheir jobs and committed to their company All of her suggestions are practical

CONCLUSION

Considering the seriousness of the author in her preparation of the researchpaper as well as the seriousness in the scientific approach, I appreciate highlythe research paper and recommend that the Board of Examination allow Nguy~n

Minh Nh~t to defend and pass this research paper with a very good grade

(9 marks)

Hochiminh City, July 5, 2005

111

No organization can succeed without a certain level of commitment and effortfrom its member The activities of an organization can only be achievedthrough the combined efforts of its members The relationship between theorganization and its members is governed by what motivates them to workand the fulfillment they derive from it The managers need to understand how

to call for the co-operation of staff and direct their performance to achievingthe goals and objectives of the organization The manager must know howbest to motivate staff so that they work willingly and effectively

The graduation paper aims at providing some popular motivation conceptsand theories Moreover, it presented how motivation activities areimplemented at VASC Software and Media Company Material and data arecolleted mostly from the company's documents, reports, web sites andtextbooks

The study showed necessary information related to motivation Currentmotivation activities of the company are rather effective However, someimprovements should be made for the company future success anddevelopment

1 RESEARCH PAPER OBJECTIVES

2 SCOPE OF THE RESEARCH

1.1 ESTABLISHMENT OF VASC SOFTWARE & MEDIA 5 COMPANY

1.1.1 From December 1997 to August 2000 6

1.2.1 Finance & Accounting Department 8

1.2.2 Planning & Investment Department 8

1.2.3 Human Resource & Administration Department 8

iv

1.2.5 Vietnamnet Dalink & M-Commerce Center 9

1.2.6 Information System Development Center 9

2.1.2 Theory X and theory Y of Douglas McGregor 20 2.1.3 Herzberg's motivation - hygiene theory 22 2.1.4 Victor Vroom's Expectancy Theory 23

3.2 JOB ENVIRONMENT 31 3.2.1 Workplace conditions and environment 32

4.3.1 The importance of internal employee relations 53

•

INTRODUCTION

CONTENTS

1 Research Paper Objectives

2 Scope of the Research

3 Research Method

4 Contents

an essential integrated part of organizations and enterprises, without whichthere's no need for computer systems, compensation plans, missionstatements, programs or procedures.

Nowadays, in a fiercely competitive market, the quality of human resource isthe decisive factor in organization's survival and development Humanresource managers are fully aware of the workforce's impact on theorganizational outcomes and productivity However, in Vietnam, job

transference of competent workers - the so-called "brain drain" - has been

progressive with large scale As the result, domestic companies suffer losses.Employees, especially young generations, have been attracted by joint-venture companies and foreign companies where they are offered goodcompensation, comfortable workplace conditions and environment.Moreover, they have chances for being trained and working in professionalatmospheres with high level of recognition and advancement

In order to attract and retain qualified employees, managers must beproficient in managerial skills Among those skills, motivating is consideredessential in directing employee effort towards organizational goalaccomplishment Motivation plays an important role in company operation,and to some degree, has an impact on the success and development of anorganization

2

VASC Software and Media Company is a state-owned business specializing

in information technology and telecommunications After five years ofoperation, the company has attained many great achievements which helpsupport and maintain its leading position in telecoms industry The companyhas an enthusiastic, and skillful, young workforce which has made decisivecontributions to the company's success and development Managers of thecompany have executed quite well human resource management activitiesamong which motivation is indispensable This is the reason why the topic

" Analyzing motivation policies of VASC Software and Media Company" isstudied

The aim of this graduation paper is to analyze and assess the motivationactivities of VASC Software and Media company This paper also proposessome suggestions for improving motivation so that the company canencourage the employees to strive for future goals accomplishment

2 Scope of the research

Human resource is such a complicated area that it can not be discussed within,

a few chapters Since there are limitations of time, ability and distance, thispaper mainly studies about how the theories of motivation are applied inVASC Software and Media Company Although the company has aheadquarters and 2 branches located in different places, the author mostlyfocuses on activities happening in Hochiminh city branch Some aspects ofcompensation, workplace conditions and environment, internal employeerelations, as well as training and development policies of the company arealso mentioned

3

4 Contents

This graduation paper consists of 4 chapters Chapter 1 begins with theintroduction to VASC Software and Media company Chapter 2 presents somepopular theories of motivation such as Maslow's hierarchy of needs, Theory

X and theory Y of Douglas McGregor, Herzberg's motivation - hygienetheory and Victor Vroom's Expectancy Theory Chapter 3 deals with theanalysis of motivation at the company Finally, chapter 4 puts forward somesuggestions to enhance motivation in order to make the employees feel moresatisfied with their jobs and committed to their company

This chapter presents the foundation and development as well as theorganization structure of VASC Software and Media Company (VASC SMC )

in order to provide the readers with a general view of the company

COMPANY

• Name: VASC Software and Media Company

• Headquarters' address: 99 Trieu Viet Vuong, Hai Ba Trung district,Hanoi

• Address: Room 208, Saigon Tower building, 29 Le Duan street, District

1, HCM city

• Telephone: ( 84-8 ) 8235777, (84-8) 8256524Founded year: 2000

President: Mr Nguyen Anh TuanAuthorized capital: 40 billionsType of ownership: State - owned business

Number of staff: 512 employees

On 19/11/1997, Vietnam officially had the Internet connection VietnamDatacommunication Company ( VDC ), an enterprise under Vietnam Post andTelecommunications ( VNPT ), started to develop and provide Internetservice, namely Vietnamnet ( VNN ), in Vietnam

On 25/07/1998 , Value Added Service Center ( VASC ) was established inorder to serve more online services VASC was authorized to do business onvalue added services through the website of Vietnamnet ( www.vnn.vn ).VASC also provided some integrated information technology ( IT ) solutionsand network designs as well as developed softwares which can be exploitedvia the Internet During this period, VASC was having a smooth and effectiveoperation which resulted in its separation from VDC later

Vietnam Post and Telecommunications

Corporation (VNPT)

Post offices of 61

cities and provinces

VNTelecoms International (VTI )

VNTelecoms National (VTN)

Vietnam Datacommunication

(VDC)

Figure 1.1 : Establishment of Value Added Service Center ( VASC )

Source: Human Resource Department

6

1.1.2 After August 2000 till now

state-owned enterprise directly under VNPT Its name was changed to VASCSoftware and Media Company (VASC SMC) This transformation was anindispensable development and a huge reward for the whole staff at thattime

As a pioneer in IT and telecommunications industries, VASC SMC hascontinuously attempted to grasp and apply the world's most advancedtechnology to create high-tech products and services Its mission is togenerate a new communication trend where the differences are determined

by technology The company emphasizes the importance of makingcommunication possible anywhere, anytime, by any means to meetcustomers' needs

Vietnam Post and Telecommunications

Corporation (VNPT)

Post Offices

Figure 1.2 : Establishment of VASC Software and Media CompanySource: Human Resource Department

1.2 ORGANIZATION STRUCTURE

Figure 1.3 : Organization structure of VASC Software and Media CompanySource: Human Resource Department

1.2.1 Finance and Accounting Department

This department includes 2 divisions

- Accounting division is responsible for bookkeeping, archiving financialinformation, preparing financial statements, conducting income andexpenditure management

- Finance division involves making decisions on investment, financing, andmanagement of the company's assets

1.2.2 Planning & Investment Department

Planning and investment department is incharge of drawing up plans forcompany's operation and investment

8

1.2.3 Human Resource & Administration DepartmentHuman resource division deals with human resource managementfunctions and problems

- Administration division takes the responsibility of dealing with legaldocuments, regulations and policies

1.2.4 Vietnamnet News CenterEditors, reporters and freelances of the center produce articles and stories onthe website http://www.vnn.vn Moreover, there are also some programmersand designers who administer the operation of the website

1.2.5 Vietnamnet Dalink &M-Commerce CenterEmployees working for Dalink division are in charge of providing the existingservices for mobile users via the internet Meanwhile, people of M-Commerce do the maintenance and development of the computer system andinfrastructure of Dalink

1.2.6 Information System Development CenterThis center specializes in maintaining and improving the infrastructure ofhigh-speed internet transmission lines

1.2.7 E-Chip CenterEchip center produces IT newspapers and magazines It is also responsible foradministering its website http://www.echip.com.vn

1.2.8 Technical CenterThis center plays an important role in the company's operation because ithelps to maintain and upgrade the infrastructure of VASC Hochiminh citybranch so that all activities and services can go on smoothly and stably

9

So far, VASC SMC has developed and offered these following products andservices

1.3.1 Vietnam net online newspaper (http://www.vnn.vn)

As one of the first e-newspapers inVietnam, Vietnamnet has put all its effort

to improve both its content and design in order to satisfy the increasinglydiverse information requirements of readers at home and overseas Thewebsite http://www.vnn.vn has become a familiar web page to net users withover 300 million visits per month

Vietnamnet - an e-newspaper which combines the strength of informationtechnology and a professional contingent of reporters and editors - serves thereaders with:

• The latest domestic and global information and events, constantlyupdated from reliable sources

• Highly active forums where millions of domestic and foreign readersmay directly discuss up-to-the-minute issues

• Specialized catergories such as business, politics, culture have beenbuilt in order to provide various types of information for a wide range

of readers

In 2002, Vietnamnet was awarded the prize of "Most favored website inVietnam ", selected by readers of the most prestigious IT magazine inVietnam - the PC World It also won the golden cup for "The most excellente-newspaper and website" in the same year

10

In 2003, Vietnamnet was the only IT product to win the "Vietnam's GoldenStar" (Sao Vang Dat Viet) - the most honorable title for domestic products.1.3.2 Internet base

The company is also the provider of high-speed internet transmission linesand the host of related applications for long-term clients such as manyindustrial zones, export processing zones, office building and big hotels

In addition, the company has just introduced VOIP ( Voice Over InternetProtocol) service which enables users to make phone calls via internet to allover the world The calls can be made from an IP-phone to a conventionalphone or a cellphone and vice versa The users pay much less money for thecalls they make, especially the calls to foreign countries

1.3.3 Dalink services (http://www.dalink.vietnamnet.vn )

Dalink, originated from the pronunciation of "Darling", is a service whichprovides logos, picture messages, ringtones, screensavers for cellular phones.Dalink also furnishes cellphone users with other kinds of information such ascommercial information, entertainment information and so on

1.3.4 Vietnam law database (http://www.vietlaw.gov.vn )

This website is considered the most convenient tool for domestic andoverseas enterprises, organizations and individuals to research law andupdate new policies promulgated by Vietnam Communist Party and State.This website is built on the database that contains every legal documentsissued in Vietnam since 1945 With logical searching tool, reliable anddiverse sources of information can be accessed quickly

1.3.5 E-chip newspaper

Echip newspapers are composed of articles and reports specializing ininformation technology They are published in the form of newspapers andmagazines issued on every Tuesday,Wednesday and Friday Besides, thereaders of Echip can obtain IT information and download free softwares bylogging on http://www.echip.com.vn

1.4 ADVANTAGES AND DISADVANTAGES1.4.1 Advantages

Nowadays, as knowledge-based economy IS developing, informationtechnology and telecommunications become a major trend in the society'schanges Everybody needs them as if they were an vital part of their lives Infact, without IT and telecommunications, world-wide activities will surely beceased

Knowing the great significance of IT and telecoms, VASC SMC was set up tofulfill the demand in Vietnam Operating in a monopoly industry, thecompany has some advantages over their competitors It has received somuch support from VNPT which boosts its effectiveness in operation Unlikeother competitors, it can easily exploit the powerful telecoms infrastructurewithout paying much costs and asking for investment permission from VNPT.Moreover, the company has a young and enthusiastic workforce which hascontributed greatly to its current success Its dynamic and creative staff will

be the key factor in its long-term survival and development

The following table illustrates for the company's effectiveness in operation:

12

This is the time for companies in the industry to co-orporate in order tostrengthen the information technology position of Vietnam in the world.However, the co-operation seems to be unlikely because each company justcares of expanding its lucrative market share Even though the company hascalled for the co-operation from other competitors, the reply was vague andsometimes there was just silience.

Nowadays, studying IT is an increasing trend in Vietnam As the result, the

IT workforce is abundant in all parts of the country They have youth,enthusiasm and creativity Since they're young ( most of them are under 30years old) , they usually want to try different jobs before settling down with aspecific company When they seem to get used to a particular kind of work,they just get bored and quit The employees with 5-year and 4-year seniorityoccupy only 20% of the company's staff This obviously slows down theprogressive development of the company and results in the costs that thecompany has to bear The statistics below illustrates for what has just beenpresented

LessNumber of

However, besides the achievements, the company still have to deal withmany problems, some of which are of human resource management Themanagers have to figure out the ways to motivate employees and make them

stay with the company In the next chapter, the theories of motivation which

help the managers to figure out some solutions will be briefly introduced

2.1.1 Maslow's hierarchy of needs2.1.2 Theory X and theory Y of Douglas McGregor2.1.3 Herzberg's motivation - hygiene theory2.1.4 Victor Vroom's Expectancy Theory

Since the workforce is the key factor in the survival and development of thecompany, how to make them work more effectively towards organizationalgoals is a hard question posed to the managers Besides, retaining competentemployees is also a challenging task As human nature is complicated anddiverse, human needs also varies Therefore, human resource managers need

to understand motivation thoroughly so that they can get to know more abouttheir employees and motivate them in the right manners There are manytheories which attempt to explain the nature of motivation All of them arepartially true and help to explain the behavior of certain people at certaintimes The purpose of this chapter is to briefly review the concepts and somepopular theories of motivation, namely Maslow's hierarchy of needs theory,theory X and theory Y of Douglas McGregor, Herzberg's motivation -hygiene theory and Victor Vroom's expectancy theory

2.1 DEFINITIONS

The study of motivation is concerned with why people behave in a certainway, with why they choose a particular course of action in preference toothers The underlying concept of motivation is some driving force withinindividuals by which they attempt to achieve some goals in order to fulfillsome needs and expectation Individuals have variety of changing, and oftencompeting, needs and expectations which they attempt to satisfy in a number

2.2 THEORETICAL BASIS OF MOTIVATION

The 1950s were a fruitful time for the development of motivation concepts.Three specific theories were formulated during this period that are probablystill the best known explanations of employee motivation These are thehierarchy of needs theory, theory X and X, and the motivation-hygienetheory Then, more valid explanations of motivation have been developedand one of them is Victor Vroom's expectancy theory The theories arecomplementary in that each focuses on a somewhat different aspect ofmotivation

2.2.1 Maslow's hierarchy of needs

One of the most widely known theories of motivation is the hierarchy ofneeds theory, developed by psychologist Abraham Maslow in 1954 andpopularized during the early 1960s Maslow's hierarchy of needs hasprobably received more attention from managers than any other theory ofmotivation, since it classifies human needs in a logical and convenient way

2 James A.F Stoner &R Edward Freeman, Management ( New Jersey: Prentice Hall Inc, 1992 ) ,

p.440.

3 R.Wayne Mondy, Arthur Shaplin &Edwin B.Flippo, Management: Concepts and Practices ( Allyn

and Bacon Inc, 1994 ), p.140.

4Stephen P Robbins and Robin Stuart-Kotze, Management ( New Jersey: Prentice Hall Canada Inc.,

1994 ), p 477.

18

Maslow theory viewed human needs as a five-level hierarchy, ranging fromthe most basic physiological needs to the highest needs for self-actualization (Figure 2.1 )

Figure 2.1 : Maslow's hierarchy of needsSource : Stephen P Robbins and Robin Stuart-Kotze Management ( NewJersey: Prentice Hall Canada Inc., 1994) , p 478

In his hierarchical model, the higher level needs will not emerge until thelower-level ones are substantially satisfied Maslow recognized that a needmight not have to be completely fulfilled before the higher-level need arises.When a need is mostly satisfied, it no longer motivates behavior

If you want to motivate someone, according to Maslow, you need tounderstand where that person is in the hierarchy and focus on fulfilling needs

at or above that level

2.2.2 Theory X and theory Y of Douglas McGregor

Assumptions and beliefs about individuals and how to motivate them ofteninfluence a leader's behavior After viewing the way managers dealt withemployees, psychologist Douglas McGregor - author of The Human Side ofthe Enterprise - concluded that a manager's view of human nature is based

on two groups of assumptions These sets of assumptions are called Theory Xand Theory Y

Managers who believe that people are motivated mainly by money, are lazyand uncooperative, and have poor work habits will treat them accordingly.Such managers tend to use a directive leadership style: they tell people what

to do They lead by telling their subordinates what is expected of them,instructing them how to perform their jobs, insisting that they meet certainstandards, making sure that everyone know who is boss This leadership style

is labeled Theory X

In contrasts, leaders who believe that their people work hard, cooperate, andhave positive attitudes will treat them accordingly Such leaders use aparticipative leadership style : they act by consulting their subordinates,seeking their opinions, and encourage them to take part in planning anddecision making, This leadership style is labeled Theory Y Most employeesprefer theory Y to theory X because they have the opportunities to getinvolved in the decision-making process

20

McGregor's analysis is partly expressed in the framework presented byMaslow Theory X assumes that lower-order needs dominate individuals.Meanwhile, theory Y assumes that higher-order needs dominate individuals.McGregor himself believed that the assumptions of theory Y were more validthan those of theory X Therefore he proposed that participation in decisionmaking, responsible and challenging jobs and good group relations wouldmaximize job motivation.

Figure 2.2 Assumptions of Theory X and Theory Y of McGregor

Source: R.Wayne Mondy, Arthur Shaplin and Edwin B.Flippo, Management:

Concepts and Practices (Allyn and Bacon Inc, 1994 ), p.142.

.•

2.2.3 Herzberg's motivation - hygiene theory

In the late 1950s, psychologist Frederick Herzberg and his associatesconducted a study of the job attitudes His study consisted of interviews with

203 accountants and engineers, chosen from different industries in thePittsburgh area of America He asked these people to describe in detailsituations in which they felt exceptionally good or bad about their jobs5• Theywere asked to give reasons and a description of sequence of events causingthat feeling While Maslow viewed motivation as a single continuum,Herzberg from this research proposed that there were in reality two differentsets of factors presented by two different continuums

One set of factors, referred to as hygiene factors or dissatisfiers, are factorsthat affect the context in which work is conducted Hygiene factors operateacross a continuum ranging from dissatisfaction to no dissatisfaction Thesefactors maintain an employee, they do not make a person satisfied but ratherprevent dissatisfaction

The other set of factors, referred to as motivators or satisfiers, are factorsrelated to the job content and the rewards of work performance Motivatorsoperate across a continuum leading from not motivated to highly motivated.These factors affect the feelings of satisfaction or no satisfaction, but they donot lead to dissatisfaction

5Stephen P Robbins and Robin Stuart-Kotze, Management (New Jersey: Prentice Hall Canada Inc.,

1994 ), p 282.

22

* Nature of the work

* Recognition for accomplishment

* Feeling of achievement

* Increased responsibility

*The job itself

*Opportunities for growth andadvancement

Figure 2.3: Motivation and Hygiene FactorsSource: R.Wayne Mondy & Arthur Shaplin &Edwin B.Flippo, Management:

2.2.4 Victor Vroom's expectancy theory

Expectancy is a person's perception about the extent to which effort results in

a certain level of performance A person's level of expectancy determineswhether he or she believes that a high level of effort results in a high level ofperformance.6

6Gareth R Jones and Jennifer M George, Essentials of Contemporary

Expectancy theory of motivation, originally proposed by Victor.H.Vroom,attemps to explain behavior in terms of an individual's goals and choices andthe expectations of achieving these goals It assumes that people candetermine which outcomes they prefer and make realistic estimates of thechances of obtaining them Expectancy theory, posits that motivation is highwhen workers believe that high levels of effort lead to high performance andthat high performance leads to the attainment of desired outcomes Thistheory includes the 3 basic components:

• Effort-performance expectancy: With E -7 P expectancy, we assess the

probability that our efforts and abilities will lead to the required performancelevel

• Performance-outcome expectancy: With P -7 0 expectancy, we assess the

probability that our successful performance will lead to certain outcomes Theoucomes include intrinsic rewards and extrinsic rewards Intrinsic rewards arerewards related to our own internal experiences with successful performance,such as feelings of achievement, challenge and growth Extrinsic rewards arerewards provided by others, such as bonuses, awards, or promotions

• Valence is our assessment of the anticipated value of specific outcomes or

rewards

The general formula for expectancy theory can be stated as follows:

24

Figure 2.4 : Basic components of expectancy theory.

Source: Kathryn M Bartol and David C.Martin, Management ( Mc GrawHill

Inc, 1994 ), p.386.

Summary

Needs are something essential for the survival and development of human beings Needs varies over time and according to circumstances and so does motivation The presented motivation theories were proposed to clarify the behavior of employees under many different viewpoints Considering all of the theories together helps managers gain a rich understanding of the many issues and problems involved in encouraging high levels of motivation in an organization Furthermore, they help mangers to arouse the employee's desire to work as well as stimulate and motivate them properly Chapter 3

will reveal how motivation is applied at VASC Software and MediaCompany.

26

CHAPTER 3

THE CURRENT

HUMAN RESOURCE MANAGEMENT

AT TRAN DUC COMPANY

CONTENTS