Luận văn thạc sĩ: Improving the quality of human resources at The State Bank of Vietnam in the context of country's integration and sustainable development

UPPSALA UNIVERSITY - SWEDEN&MASTER THESIS OF MPPM IMPROVING THE QUALITY OF HUMAN RESOURCES AT THE STATE BANK OF VIETNAM IN THE CONTEXT OF COUNTRY’S INTEGRATION AND SUSTAINABLE DEVELOPMEN

UPPSALA UNIVERSITY - SWEDEN&

MASTER THESIS OF MPPM

IMPROVING THE QUALITY OF HUMAN RESOURCES AT THE STATE BANK OF VIETNAM IN THE CONTEXT OF COUNTRY’S

INTEGRATION AND SUSTAINABLE DEVELOPMENT

Authors: Le Thi Thu Hien

Nguyen Quoc Hoang

Supervisor: Dr Sven-Erik Svärd PhD

Local Supervisor: Dr Nguyen Ngoc Thang PhD

Class: MPPM INTAKE 6- Group 11

Hanoi, May - 2013

We sincerely thank the colleagues friends relatives who encouraged,cheeed and supported us to complete this thesis.

We respectfully give to the teachers and all our friends colleagues, relativesand amily good health and the most sincere gratitude /

AUTHORS

Le Thi Thu Hien and Nguyen Quoc Hoang

ABSTRACTTitle: Improving the quality of human resources in the state bank of Vietnam

i the context of country’s integration and sustainable development

Level: Final assignment for Master Program in Public Management

Authors: Le Thi Thu Hien and Nguyen Quoc Hoang

Supervisors: Dr Sven-Erik Svärd PhD and Dr Nguyen Ngoc Thang PhDDate when the thesis is presented: 2013/05/17

Aim: The aim of this thesis is to look for feasible solutions to improve theaiality of human resources of the State Bank of Vietnam so that the State BankGBV) implements effectively the planning and execution of monetary policy,exchange rate policy and operation of inspection — supervision for banking.iflation control, and stabilization of currency value

Nethodology:

- Research theoretical model: the research group used SWOT analysisnodel to evaluate aspects related to the quality of human resources in theoganization and provide appropriate solutions because SWOT model is a methodtlat provides ways to select strategies of an organization, is derived from the firstfur letters: Strengths - Weaknesses— Opportunities — Threats

- Research methodology: The research team used 2 main methods arequalitative analysis method and quantitative analysis method:

+ Qualitative analysis method: The research team will use this method toaralyze the real situation and context based on reports of the human resourcemanagement, annual reports, legal documents, plans, programs and analysis throughoiservation description of habits and activities of research objects In addition, thismethod also studied other secondary data such as books, newspapers, magazines andinormation from Internet The team also used survey method through questionnaires

wt the controversial open questions With this method, much qualitativeinormation may be provided helping the research team assess the situation in theoranization reflected through thought perception, attitude and desire of individualsinthe organization

+ Quantitative analysis method: The research team used the statistics of the

(ganization and staff department and school of training for staffs in the bankingfeld in the period 2007-2012 to compare analyze and evaluate the phases of researchpriod In addition the team also collected data by survey method throughqtestionnaires With this method the research team will analyze the data collectedfpm the survey through questionnaires to clarify more assessments made from theqialitative analysis method or subjective assessment from the secondary data of unitsnaking reports at State Bank of Vietnam

Besides the analysis and evaluation to find out shortcomings limitations andcases to suggest the most effective solutions the research team’s use of these twomethods also increases the accuracy of the results in the research

Layout and structure:

The thesis includes 5 main chapters:

Results & Conclusions:

After the process of survey and research, the results achieved as follow:

In regard to quantity of labor: from 2007 to June 2012, the number of SBV°scalres and civil servants increased gradually assuring fully work requirementsunder personnel permitting

In regard to labor structure: the structure of labor changes for each period.Frm 2007 to 2012 labor structure tends to shift and increase gradually fromsuportive block to policy making block This is true for the development strategicorentation of the banking sector for the period 2020

In regard to the quality of human resources: From 2007 to 2012 in terms ofde:ree the quality of human resources is significantly improved especially thenunber of staffs and civil servants of university’s degree and doctoral has increased

Bu officials and civil servants’ ability to perform the tasks are limited especially in

the fied of advising policy In addition foreign language and informatics skills andsuppot skills have not met job requirements In which, the human resourcesmanagment is an important factor affecting the quality of human resources.

In regard to the management of human resources: In the period 2007-2012.the mnagement of human resources has performed relatively well under theprovisons of the State However there are still some limitations such as:

+ The recruitment was carried out in accordance with the general provisions

of theMinistry of Interior noi tied to specific characteristics of the banking sector(perfoming both state management functions and function of the central bank); therecruitment process is still slow and cumbersome losing opportunities to recruitpeoplchaving competence

+ The arrangement and use of employees: the ratio of highly qualified staffsand cijl servants in policy making units is low compared to the central banks in theworld

- The appointment and rotation for staffs: In the period 2007-2012, the StateBank hs hardly implemented the appointment and rotation for any position due to

missio requirements but almost by personal needs.

The assessment on work implementation was heavy with formality;evaluaon results processing has not been attached special importance to

The salary and treatment policies are still implemented according to level

regimelosing motivation to work

The training and development for staffs: Training and improvingframewrk is inappropriate to each student: Objects to attend training and

improwg classes have not been correctly sent; trained knowledge sharing has not

been fcused

1 conclusion, the quality of human resources in the State Bank of Vietnam

in the eriod 2007-2012 has been significantly improved Employees’ capacity

‹qualifidions and qualities have been enhanced: the management is closer and more

itranspent However the weaknesses and limitations are inevitable and they should

lbe oweome Proposal to resolve the shortcomings is to improve human resource

mangement in which focus on recruitment appointment and rotation for staffs theway: to assess staff, salary and bonus as well as training and development for staff.

Suggestions for future research: Within the scope of the topic and because

of Imitations of research time and space the authors have not analyzed andasse:sed fully other influential factors such as inputs of human resources inparti:ular the education quality of 02 universities directly under the State Bank:Vision, prestige and leadership capacity: or the method of human resourcemanigenent by outputs So in order to complete further the topic authors wouldlike o orfer some orientations for future researches such as approach, analyze andevaltate the factors that affect the quality of SBV’s human resources like inputs ofhumin resources, in particular the education quality of 02 universities directly underthe State Bank: Vision, prestige and leadership capacity: or the method of humanresource management by outputs The most effective solutions to improve thequaliy of human resources as well as the quality of SBV’s operations should beprovided then

Contribution of the thesis: The results of the study will provide a important

scienific basis for units working the management of human resources and training and inproving staffs at the state bank The results are good references for

comnercial banks, the organizations the units and staffs of the banking sector On

that tasis the management of human resources and training and improving human

resouces at the state bank should be adjusted, completed and innovated This is

also the basis to encourage cadres officials and civil servants self-study to improvetheir yual fications to meet well the requirements on the quality of human resourcesfor th stete bank in particular and for the banking sector in general

Key words: State Bank of Vietnam the quality of human resource of bankingsecto:, recruitment, arrangement, rotation and evaluation for staffs, salary andremuneraion training and improving human resources

TABLE OF CONTENTS

Page

CHAPTER 1: GENERAL INTRODUCTION

1.1 Functions and tasks of the State Bank of Vietnam

1.1.1 Performing the State management function

1.1.2 Performing the function of the Central Bank

1.2 Reasons to choose the topic

1.3 Research questions

1.4 Research objectives

1.5 Research objecs

1.6 Structure

CHAPTER 2: THEORETICAL FRAMEWORK

2.1 Concept of human resources qualify ecu ann aenn

2.2 The role of the human resources quality in the State Bank

2 3 Criteria of human resource quality requirements in the State Bank in

the context of international integration

1.4 Factors affecting the quality of human resources

2.4.1 Recruitment

2.4.2 Arrangement and use of human resource

2.4.3 Work assessment

2.4.4 Training and development

2.4.5 Salary and treatment policies

1.5 The experiences in improving the quality of human resources of some

Central Banks around the world

2.5.1 The Central Bank of France

2.5.2 The Central Banks of Germany, Switzerland and Canada CEAPTER 3: RESEARCH METHODOLOGY

1, Research theoretical model

22 Research methodology

3.2.1 Qualitative analysis method

3.2.2 Quantitative analysis method

CHAPTER 4: RESULTS OF THE RESEARCH

4.1 Data analysis

4.1.1 Recruitment Policy

4.1.2 Policies on arrangement and use of human resources

4.1.3 Annual staff assessment.

4.1.4 Training and development of human resources

4.1.5 Salary and treatment policies

4 2 Quality of human resources

4.2.1 Quality of human resources in term of degree

4.2.2 Quality of human resources based on the evaluation of work

1 In term of quality of human resources

5.1.2 Comments on causes relating to the shortcomings and limitations of

the quality of human resources at SBV +575.2 Orientations, solutions and recommendations to improve the quality ofhuman resources at SBV 2595.2.1 Orientation to develop human resource for SBV, 22595.2.2 Solutions + 605.2.3 Recommendations „63

Š 3 In response of research questions „63

5 4 Contribution of the thesis 22 4

5.5 Limitations of the thesis 65

Reference

Appendix

SBV The state bank of Vietnam

CB | Central bank

LIST OF ILLUSTRATION FIGURES

Number gi Page

Figure | | Structure of SBVˆs human resources divided by system 25 |

Figure 2 | Survey results of the recruitment 26

†

27Figure 3 | SBV`s manpower structure according to block

29 |

Figure 4 | Structure of human resources according to age at SBV

Figure 5 | Survey results of the planning of staffs 30

Figure 6 | Survey results of the arrangement and use of personnel 31

Figure 7 | Survey results of the appointment and rotation of staff 32

Figure 8 | Survey results of the content of the assessment 33

sỉ Survey results of the content of evaluation results which do

Figure 9 34

not reflect truly the result of operation

Figure 10 | Survey results of the process of evaluation results 34

The number of cadres, officials and civil servants trained and

Fgurell | ¬ 36

improved at school of training for the period 2007-2011Fgure 12 | Survey results of the effectiveness of the training for work 38

39Fgure 13 | Survey results of the appointment of objects to attend training

CHAPTER 1

GENERAL INTRODUCTION1.1 Functions and tasks of the State Bank of Vietnam

Pursuant to the Law on Organization of the Government of December 25,2001: Pursuant to the Law on the State Bank of Vietnam No 46/2010/QH12 dated

June 16", 2010: Pursuant to the Decree No 178/2007/ND-CP dated December 3”,

2007 of the Government defining the functions, tasks, powers and organizationalstructures of ministries and ministeriai-level agencies:

The State Bank of Vietnam (below referred to as the State Bank) is aministerial-level agency of the Government performing the State management ofmonetary and banking operations and the function of the Central Bank of theSocialist Republic of Vietnam: performing the state management of public servicesunder the management of the State Bank The State Bank’s headquarters is located

in Hanoi and other 64 branches located in provinces and cities nationwide TheState Bank is administered by Governor and Deputy Governors

The operation of the State Bank is to stabilize the currency value,contributing to the safe of banking operations and credit institution system,promoting socialist- oriented social-economic development

To perform its functions, The State Bank has tasks and powers (prescribed at

the Article 5 of the Law on the State Bank of Vietnam) as following:

1.1.1 Performing the State management function

To take part in elaborating the State's socio-economic developmentstrategy and plans:

To formulate banking development strategies submitted to thecompetent state agencies for approval, and implementation

To promulgate or propose competent state agencies to promulgateegal documents on monetary and banking matters: to propagate disseminateand examine legal documents on monetary and banking matters according to

Is competence.

To determine annual inflation rate targets submitted to the NationalAssembly by the Government for decision and realization

- To organize regulate-and develop the monetary market.

= To organize a monetary and banking statisti and forecast system; topublicize monetary and banking information according to law

1.1.2 Performing the function of the Central Bank

- To organize the printing minting preservation and transportation ofbankiotes and coins: to engage in the issuance withdrawal, replacement anddestriction of money

+ To grant modify supplement or revoke the establishment and operationlicens of credit institutions licenses for establishing branches of foreign banks

- To represent the owner of the State’s capital portions in enterprises whichperfom the State Bank’s functions and tasks

- To examine, inspect and supervise banks; to handle violations of laws inthe fidds of monetary and banking operations according to its competence

- To assume the prime responsibility for making, monitoring, forecasting andanalying the international payment balance

- To perform the state management of foreign exchange, foreign exchangetransations and gold trading activities

1.2 Reasons to choose the topic

‘the process of globalization and international economic integration which isoperating rapidly, intensively and extensively has affected all activities of theeconony and society At the same time the strong development of scientific-techndogical revolution and the knowledge economy has become the target ofmany countries in the world by using knowledge as a key factor in the socio-econonic development Together with the fast growth of the economy, the role ofthe baking sector is increasingly high The banking sector is regarded as thelifeblod of the economy and the capital channel for production, businessoperatons: it contributes to creating jobs and ensuring social security: it plays apositie role in promoting recovery after the financial crisis and the decline in worldecononic growth and promoting Vietnam's economy to grow fast and sustainably inthe net period

i)

Along with the growth of the economy the banking and finance sector is

growing strongly, intensively and extensively with the non-stop growth of domestic

credt institutions and the increase of activities of foreign financial institutions.Afe: Vietnam became a member of the World Trade Organization (WTO).Vieuam banking sector has entered a new development period with the rapidincreise in the number and size of the branch network of credit institutions thedivenity of products services and advanced level of technology

After 10 years of reform human resources of the State Bank has significantlydeveoped in the number and quality however many shortcomings still exist Theirabiliv to perform duties does not meet the requirements: the environment offinarvial activities in particular and of banking sector in general still fluctuates inthe cming time The development of human resources basically still implements intraditonal way and has the same characteristics as pure administrative agency Overthe wars, due to many objective and subjective factors, the human resourcesmangement of the State Bank is not highly effective, which affects the quality ofhumai resources, leading to human resources do not correspond with the greatrespassibility as well as the specific operations of the Bank which has implementedthe finction of State management, at the same time has undertaken importantTespotsibilities of the central bank Therefore problem imposed for the state bank is

to rase the quality of cadres, officials and civil servants in order to meet therequiements of the banking sector development Improving the human resourcesqualiv of the banking sector especially of the State Bank of Vietnam (SBV) is coreelemat to have skilled and qualified human resources to implement the objectives

of thcbanking sector to meet the needs of economic development The inadequatelissue: of human resources have offered some researches since 2000 Namely,Scienific topic 98.05 named "The basic issues of innovation of trainingmanaement and scientific research in accordance with banking operations in the

Themarkc economy" by the chief author Vu Thi Lien: Economic Masters Thesis

solutins to improve the effectiveness of the human resource management of theState Bank" by Nguyen Chi Thanh in 2002: Economic Masters Thesis "Thesolutins to improve the quality of human resources training and development of

“

the State bank in the current period" by Deputy Head of the Department ofPersonnel Organization of the State Bank Tran Huu Thang The above projectsonly research the State Bank's human resources in respect of human management,training and development No project goes into the details of improving the quality

of human resources Because of the above requirements the research team selectsthe topic "The solutions to improve the human resources quality in the State Bank

of Vietnam in the context of country’s integration and sustainable development" tostudy the measures to improve the human resources quality of the State Bank ofVietnam, since then contribute to the cause of the banking sector and the stabilityand sustainable development of the country

1.3 Research questions

The purpose of this thesis is to look for feasible solutions to improve thehuman resources quality of SBV to ensure that the State Bank performs effectivelythe planning and execution of monetary policies, exchange rate policies, bankinginspection-supervision controls inflation and stabilizes currency value

Therefore, the main overarching objective of the thesis is to answer the

question: What are effective solutions to improve the human resources quality ofthe Stte Bank?

This question is not simple: it requires the convincing foundation and argurrents Therefore, within the scope of the research topic, we solve the problem

by raising and answering other two no less important questions:

- What is the real situation of the human resources quality of SBV in recentyears’

- What are causes of achievements difficulties and limitations of the humanTesOur:es management to improve the human resources quality in the State Bank inrecentyears?

- What are solutions and recommendations to improve the quality of humanresour:es in SBV?

They are three key questions for us to discuss and try to find the mostauthenic answers The answers will be reflected in the report data, statistics foreignsurvey materials that we have gathered during the investigation and research

proc Through data collection we conducted analysis and evaluation- ofinformation sources in order to offer feasible solutions to help the readers see theoverall overarching picture about the human resources of the State Bank of Vietnam:

at the same time we hope effective solutions that the research team has proposedwill make a small contribution towards improving the human resources quality ofthe State Bank of Vietnam according to the human resources development strategyfor the banking field for the period 2011-2020 and the strategy on development ofVietnamese human resources for the period 201 1-2020

1.4 Research objectives

The objectives of the thesis are as follow:

- Clearly understand the real situation of the human resources quality in theState Bank

- Analyze the factors affecting the quality of human resources in SBV

- Build solutions to improve the quality of human resources to contribute tohelp the state bank implement well its tasks and duties attached to operational

characteristics of a bank which implement function of a state management agency

and at the same time undertake great responsibility of the central bank

1.5 Research objecs

The human resources of the State Bank are built and developed relatively fully inquantity, until June 2012 the total number of cadres, officials and civil servants ofthe State Bank has been over 6.600 people including Departments of the CentralBank accounting for 22%: Inspection & Supervision agencies 5%; Public servicedelivery units 5%; Urban and provincial branches 51%; Banking Academy andBanking University of Ho Chi Minh City 17%

Improving the human resource quality of the State Bank is an importantcontent in the banking sector development strategy for the period 2010-2015.oriented by 2020 This issue is difficult and rather sensitive because it is related tohuman factor In the framework of the thesis due to limited resource and timerequirement, we only focus on analyzing and learning about the actual situation ofthe human resources quality of the central bank’s cadres in the head office for the

period of 2007-2012 of the State bank We study this subject and scope to avoidrambling writing to clarify the nature of issue and make data concentrated.

CHAPTER 2

THEORETICAL FRAMEWORK

In this section, we present some basic concepts related to the quality of humanresources as a basic for research and a necessary foundation for readers about thetopic which we presented in the thesis

2.1 Concept of human resources quality

In the point of view of the research team, the term "quality of humanresources" includes the content of human resources and specific characteristics ofhuman resources quality of the State Bank

First of all, in regard to the concept of human resources we can understand it

as a part of the population in certain age prescribed by law having the ability towork Human resource is manifested in two aspects: quantity and quality

In terms of quantity, human resource is the total number of people in workingage and it can be mobilized during working time Working age is specified by eachcountry and may change from time to time due to the socio-economic development

in each period

In terms of quality, it is education level qualifications, experiences and health

of workers The human resources quality is expressed by his competence, namely:(1) To have wide understanding on the basis of modern knowledge: (2) To have

intensive knowledge of professional theory in the sector trained; (3) To haveproficient skills and job competence in the field trained; (4) To have ability to study,propose and dealt with professional issues during the working process According tothe most recognized opinion, the human resources quality is the response of thegoals set out by beneficiaries and the goals have to meet the development

who work in the proper specialty and meet in the best level the requirements of jobs

in the manufacturers agencies and enterprises are qualified human resources”.According to this concept the qualified human resources are not synonymous withpeople with high education level and qualifications

According to Mr Tran Huu Thang Deputy Head of the Personnel Department

of the State Bank the human resources quality is represented by the following 10criteria: (1) To have professional qualifications that meet the requirements of jobs:(2) To have capacity to update professional knowledge to meet the changingrequirements of jobs: (3) To have foreign language levels meeting the requirernents

of jobs: (4) To have appropriate computer skills, to use equipment for professionalwork proficiently and preserving them well: (5) To collect and process informationfrom appropriate sources: (6) Be able to set up plans with specific implementationprogress on the basis of the general plan of the department and organization; (7) Becreative in jobs: (8) To having skills to meet the requirements of jobs: analyticalskill, writing skill, teamwork skill ; (9) To have communication skill, cooperativespirit and self-adjusting capability: (10) To have professional ethics and health towork According to this point of view, the quality of human resources not onlyrefers to those with high qualifications, good language, but also refers to those withenough professional knowledge and necessary foreign languages that the jobsrequire or those with good working methods and skills or those has self-learningability to adapt to changes in working requirements

la addition, the other view admitted by many scientists is that the qualifiedhuman resource should have the following characteristics:

Firstly, the qualified human resource is the labor force with professional ethicswhich is the passion for job, self-discipline and responsibility for job Above allothers professional ethics is reflected in the desire to contribute their talents, theireffort: to the overall development of the nation This criterion is considered thefoundition to determine the qualified human resource

Secondly the qualified human resource is workforce being capable of adaptingnew t:chnology and flexible in professional work This criterion requires humanresour:es to have high professional qualification and technical expertise in order to

adapt to the complicated and ever-changing works at present This also means that

human resources must have the professional skills and spirit in order not to be passive by the rapid changes in both content and manner of doing jobs in the era of

globalization and knowledge economy

Thirdly, the qualified human resource is the workforce with creativity.Creativity is always an important motive force to promote development especiallytoday, "things which are new and exciting yesterday quickly become old and trivialtoday" (Tony Buzan 2006) If innovative ideas are not instantly given, the activities

of the organizations and by extension, of the nation will be obsolete and paralyzed

Therefore, based on the above criteria, the quality of human resourceparticularly focuses on the most quintessential forces which are the leaders,

entrepreneurs and scientists They are referred to as talents First of all, they “must have the personality, intelligence and some outstanding characteristics that very few people have; at the same time they have to have rich creativity, original thinking and are able to solve work fast, accurately and effectively" (Nguyen Dac Hung,

2004)

To sum up, according to the most general sense, the quality of human

resources indicates workers who are trained, granted degrees and certificates of education levels and able to meet the complex requirements of jobs corresponding

with level trained; thereby creating productivity and efficiency at work, having

considerably contributed to the growth and development of each unit in particular

and the society in general in the process of development and internationalintegration

2.2 The role of the human resources quality in the State Bank

The State Bank’s human resource is quite diverse in many positions, levels andnature of the work In all periods of development the need and goal of the StateBank are to ensure the qualified human resources for its operations Qualified

human resource is essential for the highly complex positions that directly affect the

bank’s operation efficiency In the condition of international integration and

unpredictable rapid changes of the world the qualified human resource plays a

particularly important role to cope with the challenges ahead It is necessary to

9

anticipate and get one jump ahead to meet the requirements on specialized

knowledge skills and competencies corresponding with titles, leadership,management and working positions in all activities of the State bank and thebanking system specifically the following specific activities:

- To prepare the law project the draft resolutions of the National Assembly,the ordinances project and draft resolutions of the National Assembly StandingCommittee draft decrees of the government according to the annual legislativeprograms plans of the State Bank

- To elaborate long-term annual 5-year development strategies, pianning.plans national objective programs, action plans, important banking projects, thedraft decisions directives and other documents under the direction and management

of Prime Minister in pursuant to the laws:

- To issue circulars decisions and directives in the fields under themanagement of the State Bank To direct guide, review and organize theimplementation of approved legal documents, strategies planning, importantprograms, plans and projects under the competence of the State Bank; to inform,propaganda, disseminate, educate laws in the fields under the state management ofthe State Bank;

- To elaborate, submit to the Government and then to the National Assemblythe national monetary policy projects; to use interest rates, exchange rates, requiredreserves open market operations and other tools to implement the nationalmonetary policies: to submit to the Government the projects of developing bankingsystem and credit institutions:

- To grant and revoke licenses for establishment and operation of creditinstitutions, except cases according to the Prime Minister's decision: to grant and

revoke licenses for banking operation of other organizations; to decide to dissolve.

rename and approve the split consolidation or merger of credit institutions: to guide

to the conditions for the establishment and operation of credit institutions in

pursuant to the laws:

- To inspect supervise banking operations: to control credit: to handle legalviolations in the monetary field and banking operations in pursuant to the laws:

10

- In regard to Foreign Exchange management: To manage the non-residenttransactions, capital transactions foreign exchange use on the territory of Vietnam

in pưsuant to the laws: to identify the State foreign exchange reserves: to controlintenational reserves: to determine the exchange rate between Vietnam dong andforein currency: to hold and develop foreign currency markets: to identifyexchnge rate mechanism and submit to the Prime Minister for decision

To build the international balance of payments: to collect, sum up, set up.foreast and monitor the implementation of international balance of payments ofVietiain; to report on the impiementation of the international balance of payments

of Vetnam in pursuant to the laws To provide international balance of paymentsstatisics of Vietnam for the domestic and international organizations in pursuant tothe lavs:

To manage the borrowing and repayment of foreign loans by residents likeeconcnic organizations, credit institutions and individuals in pursuant to the laws;

To manage the loan and recovery of foreign debts by the Government,econcnic organizations and credit institutions;

To negotiate, sign, accede to the international treaties on monetary andbankig activities;

- To coordinate with relevant agencies to prepare content and carry outnegotating signing or acceding to the international treaties under authorization ofthe Gvernment of ODA with the World Bank (WB), Asian Development Bank(ADB International Monetary Fund (IMF);

-To be representative of the Socialist Republic of Vietnam in internationalbanksind international monetary organizations under authorization of President and

the Gwernment;

- To implement the professional operations of the Central Bank such asorganiing printing minting preserving, transporting money: to issue, withdraw,replac and destroy money: to refinance to provide the short-term credit and means

of paynent for the economy: to manage currency markets; to perform open market

operatons

11

- To guide and inspect activities of associations and non-governmental

organizations in the sectors or fields under the management of the State Bank; tohardle or propose to competent government agencies to handle legal violations ofassociations, non-governmental organizations in pursuant to the laws:

- To inspect solve complaints and denunciations and handle legal violations inthemonetary field and banking activities within the competence: to prevent combatagiinst corruption, negative bureaucracy and authoritarian: to practice thrift andprevent wasting in accordance with the laws

Through the analysis of the quality of human resources of an organization aswel as the role of qualified human resources in the banking sector, it can be saidtha the development of qualified human resources is core factor to ensure thesusainable development of an organization in the international integration anddevelopment process

2 3 Criteria of human resource quality requirements in the State Bank in thecorfext of international integration

Pursuant to the Law on the State Bank of Vietnam no 46/2010/QH12 dated

Jun: 16", 2010; the State Bank is a government agency and the central bank of the

Socalist Republic of Vietnam Its duties and powers are divided into two maingroups: (i) to perform the state management function of bank currency; (ii) toperbrm the functions of the central bank

Because the State Bank of Vietnam is the central bank, at the same time is aminsterial-level agency subordinate to the administrative apparatus of thegovưnment the cadres and public servants of The State Bank are also cadres andpubic servants of the Government Therefore the State Bank’s human resourcesnot mly have the requirements and characteristics of cadres and public servants ingeneal, but also have the requirements specific characteristics of personnel in theCenral Bank Cadres and public servants of other ministries and industries in theStat: administrative apparatus are civil authority institutions using the State powerthroigh administrative regulations in doing their duties Meanwhile the statemanigement measures in the banking sector used by the State bank are economicmeaures and a few administrative measures On the other hand the organizational

12

structure of the State Bank is systematic, including the Central bank at the mainhead office the representative office in Ho Chi Minh City and State Bank branches

in all provinces and cities around the country

Another difference between the State Bank’s staff and other ministries’ staff,industries’ staff is that the working result of the State Bank’s staff is reflected in themonetary and banking policy issued by The State Bank and it has an immediate anddirect impact on the entire economy

The rate of the State Bank's staff with university degree is rather high In someimportant fields of the Central Bank such as planning and implementation ofmonetary policy inspection, supervision, it is necessary to increase the number ofpersonnel, particularly personnel with MBA, Ph.D degree and highly qualifiedexperts; it is essential for them to be trained regularly to enhance workingcompetence In general in many countries, the State bank is independent of thegovernment and its staffs are not public servants Therefore, the policies ofrecruitment, appointment promotion, salaries and the regulations of qualificationtraining of the State Bank’s staff in other countries are not governed and bound bystrict rules of the public sector For example the recruitment of the central bank sets

a high standard, but also very flexible in recruiting highly qualified human resourcefrom credit institutions or other organizations; regulations on training activities areclearer and funds for these activities are also higher

Due to the nature of this industry, the activities in banking sector are verysensitive and are affected by the changes, the social, political and economic events,the development in science and technology at home and abroad Therefore, in order

to have enough capacity to meet the demand and overcome new challenges in thecontext of many changes at home and abroad, the State Bank’s staffs need to betrained in basic professional knowledge of banking to understand banking andbanking operations correctly and apply them to their daily work Besides, it isnecessary for them to forecast and get one jump ahead to meet the requirements onspecialized knowledge skills and competencies corresponding with leadership andmanzgement positions titles and working positions in all activities of the State bankand the banking system

Banking is a general economy: besides a larger number of staffs in the StateBank need to have deep professional qualification of banking, it is necessary tohave a staff with highly professional qualifications in the other fields such asEconomics Informatics Law Foreign Language Accounting, BusinessAdministration, Human Resources Management Therefore staff who are recruited

to work in different positions in the State Bank have different basic knowledge.This is one of the remarkable points to improve the quality of human resources andincrease working capacity of cadres public servants of the State Bank to correspondwith the initial level and the requirements of the current job

Besides the State Bank’s human resource needs to be sufficient its qualityneeds to be increasingly high The staffs have to be capable of doing tasks well inevery job positions and all fields forming a team of highly qualified staff with goodethics, highly professional qualification, good foreign languages, computer literacy,and professional working skills to ensure implementation of objectives according todevelopment orientation of the State bank in each period To form a team of experts

in the main fields of operations of the State Bank who are capable of providingadvices to the leaders, the Government and National Assembly on issues in the field

of finance and banking including specific activities: Central Banking (moneyrelease, management of foreign exchange reserves and open markets ); monetarypolicy; analysis and forecast of macro-economy; inspection, supervision; payment:foreign exchange management To enhance capacity of professional qualification,complementary knowledge (computer literacy and foreign language) as well asworking skills of leaders, managers from the department level upwards of the StateBank, especially in the Department and units at main headquarters to meet theincreasing demands of the jobs specifically:

With regard to professional qualification: The State Bank aims to enhance

professional qualification in each job, leadership and management position Eachcadre public servant has to meet the highest requirements of specified knowledgeand skills in each job and leadership position according to the job description Tonarrow the gap between the requirements of profession leadership and managementpositions and the real competence of cadres public servants through training

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activities to supplement update improve and develop necessary knowledge,information experiences and professional skills.

With regard to ethics: A cadre public servant in general as well as a cadre,public servant of the State Bank in particular needs to meet the requirements ofmoral ethics status and lifestyle and behavior culture according to commonstandards In the working process the State Bank’s staffs must always enhance,train and cultivate moral ethics behavior working style at the same timepreventing bureaucracy corruption retrogression and degeneration In addition,professional ethics is also an aspect that can not be ignored in improving the humanresources quality of the State Bank

Human resource of the State Bank is diversified in qualifications skill) / job positions/ fields / seniority, therefore the objective of the State Bank is toensure qualified human resources according to requirements

(knowledge-2.4 Factors affecting the quality of human resources

With this approach, we use the definition: "The management of humanresources is designing policies and implementing operation fields so that peoplecontribute the most effective values to the organization, including areas such ashuman resource planning, job analysis recruitment, use and evaluation of thequality of work, training and development, compensation and remunerationpolicies "

The activities of the human resources management is the factor directlyaffecting the quality of human resources The management of human resources isclassified into the following activities:

2.4.1 Recruitment

The next step of the fields of human resources management is to ensure thehumar resources which is the recruitment, assessment and selection of the bestcandicates to satisfy the use needs of the organization and the addition of necessaryworkforce In other words the recruitment is the process providing special inputelemert for the organization - human factor This process consists of two basicphases attract find and recruit manpower These two phases have close relationship:

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if attraction and looking for human resources are good the quality of recruitmentconditions will be good.

The recruitment process includes 7 steps:

- Identify the position needing to recruit

- Integrate new employees

Among them, the step of evaluating candidates is one of the most important steps to help the recruitment achieve the best effect.

2.4.2 Arrangement and use of human resource

The layout and the use of personnel are really important after recruiting

personnel The layout and use of personnel in right place, right job and right forte are very effective for the organization If human resources team is reasonably

arranged, the staffs rotation is done at the right time, the unbalance of staffs

between regions will be overcome, staffs will be reinforced for areas having urgent

needs This also facilitates training, challenge so that young executives haveopportunities to be in contact with others and to mature in work

2.4.3 Work assessment

The work assessment becomes a key element in the process of humanresources management The achievement assessment is the activities which definehow do staffs work well and how is the corresponding remuneration reasonable.

The achievement assessment is to establish an evaluation process, a system of

assessment indicators and a basis for achievement evaluation, develop suitable compensation system and orient the employee's efforts Another important task of

achievement evaluation is to control the work implementation process and its results

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2.4.4 Training and development

The goal of training and development is learning activities to help workersacquire and train the necessary skills to effectively perform their functions, dutiesand rights: to create workers new jobs based on the development orientation of theorganization in the future

2.4.5 Salary and treatment policies

The achievement evaluation is an important basis for the development ofApprcpriate remuneration system including the direct remuneration (salary, bonus,welfare) and indirect remuneration (the various benefit forms for employees such asthe need to be respected to be promoted to be assisted encouraged and motivated

The appropriate salary and treatment policies will be motivation to attractand retain qualified persons for the organization, and also will help to employeeshave a strong attachment and be loyal to the organization Remuneration is not only

a factor ensuring that employees perform their duties but also the driving force forstaffs’ efforts and their affirmation are that they do that for common target of theorganization

By analyzing we realized well the impact of the management of humanresources, which are important factors directly affecting the quality of humanresources Therefore, to improve the quality of human resources of any organization,

it is necessary to effectively combine all the above activities

2.5 The experiences in improving the quality of human resources of some

Central Banks around the world

2.5.1 The Central Bank of France

The most common characteristic of the model of human_resourcesmanagement in the Bank of France is a career-based management model inassociation with standards on title and rank grade

Recruitment: The recruitment of | new staff will be taken place whenever 02staffs stop work at the Bank The recruitment method is done through interviewsand muhiple-choice tests The basis for recruitment criteria is based on the standard

of a personnel classification rank/grade

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Personnel Rotation: The measure of personnel rotation is used to exploitstaffs’ competences and is also a motivation for staff development In theRegulation on the Bank of France staffs: Leaders and officials during the servicerecord have to accept assigned work at the headquarters or branches Staff rotationleads to the harmony and compatibility in staff arrangement between positions,creating a balanced allocation of human resources from the headquarters to thebranches.

Staff Development and Training: When getting work, the recruits have tosign a working agreement with the HR department in which there is a content, inwhich the recruits have to commit the time they participate in annual trainingcourses The training content is associated with the professional skills andrequirements for each rank/ grade

The training content is extensive in association with the professional skillsand requirements for each rank/grade Each year, about 200 training courses areinformed, based on which carders can register to participate in the most suitablecourse for their qualifications and job requirements

The training curriculum of the Central Bank of France consist of two maintypes, one is a required curriculum for staffs to maintain their competence at thecurrent positions, and the other is an incentive for those to improve their skills,creating opportunities for them to make recruitment for a higher rank/grade ( to ahigher grade or a grade transfer staffs have to take an competitive examination)

Some restrictions of a career-based management model at the Central Bank

of France:

- The rank/ grade-based management considers the input standard the goalfor civil servants management and development, so it does not connect to theperformance of the entire agency or each individual

- It is difficult for the assessment and development of civil servants

2.5.2 The Central Banks of Germany, Switzerland and Canada

A management based on objectives working competence and efficiency is anoticeable feature of the human resource management models at these CentralBanks

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Recruitment: Recruitment is associated with job positions Vacancies.especially for management positions (there is no staff at these positions yet) arewidely informed and everyone has equal opportunities for the recruitment Therecruitment content includes the examination of expertise through certifications,without testing tested learned profession New recruits have to take part in trainingcourses organized by the Federal Bank of Germany.

Assessment of working quality: Staff assessment is based on working results.The actual results are compared with the set targets Through the process ofevaluating the working effectiveness based on which appropriate remunerationswill be determined for each staff

The Central Bank of Canada evaluates the annual working quality by usingthe job description in order to compare with the most important responsibilities,listing these responsibilities downward of importance, identifying measurementcriteria (time, quantity) of each objective for assessment Working results areassessed on the basis of reviewing, giving comments and rating each target based onthe set objectives, measurement criteria and work results This approach is easy forassessor to implement and also fair for those who are assessed

Training and Development of human resources: The training target is tomaximize the competence of individuals, at the same time create opportunities forthose who want to take recruitment for a higher position The training content isdesigned based on working skill requirements at different levels Developmentprograms for the maintenance of working competence are compulsory for civilservants In addition, to encourage staffs to participate in advanced courses whichgive opportunities for them to transfer to other jobs with higher levels or positions

For new recruits, in addition to being trained more professional skills theyalso have chances to practice at a Commercial Bank in one year After therecruitment, new recruits have to attend a post-recruitment training course in a longtime for additional knowledge about the operations of the Central Bank They alsopass through exams before being appointed to the scale Specifically personnelbeing graduates and post graduates have to attend full-time pre-service trainingcourse and achieve the final exam with the time of 21 months time: the time is 24

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months for seniors, and 36 months for staffs Advanced Training: This is a regularand continuous training form, which is available for all staffs, civil servants andofficials who are working in the Federal Bank of Germany Each advanced trainingcourse lasts from 01 day to 02 weeks and this is the focused part in the advancedtraining of the Federal Bank of Germany.

Advantages of the models of the human resource management of theseCentral Banks:

- Flexible arranging right staffs to right positions at right time

- Training right staffs at right time so these staffs have enough workingskills to do their job weli

~ The system of evaluation criteria is clear specific and fair

~ Salary is in accordance with right competence and work efficiency

- Healthy working environments, the members of the organizations are

‘aware of information sharing and working cooperation

- Encouraging employees in dynamite, creation, and quick adaptation tochanges

- To have strategy of human resources development which have to beplanned and listed in the overall development strategy of the organization

- To have a working commitment made by leaders of all levels as well aseach employee

- The recruitment is based on job requirements and the recruitment formanagement positions must be done

- To consider staff rotation as a tool to exploit and use staffs’ capacity: at thesiame tme promote staff development

- Wages must be paid in accordance with working capacity and efficiency

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- Individuals and the whole organization must commit taking part in trainingcourses Training content must be closely linked to the increase of workingcompetence of individuals and the whole organization The training content isformulated based on work requirements learners’ current competence and theirneeds.

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CHAPTER 3

RESEARCH METHODOLOGY

3.1 Research theoretical model

In the research process the group considered some research models.However within the research scope of the topic the research group decided to useSWOT analysis model to evaluate aspects related to the quality of human resources

in the organization and provide appropriate solutions because SWOT model is amethod that provides ways to select strategies of an organization, is derived fromtthe first four letters: Strengths - Weaknesses— Opportunities — Threats

* Strengths: These are valuable elements or strengths of the organization

‘These elements are internal properties and helpful of the object under consideration

* Weaknesses: These are points incomplete, not good, the weak elements oforganization This is also internal property and harmful of the object underconsideration

* Opportunities: These are favorable factors, or they will bring advantages forthe organization They are external factors and helpful for the organization

* Threats: These are the negative impact from the outside (external) that yourorganization may face

3.2 Research methodology

With research objects and scope as analyzed above, as well as withadvantage of a group working in headquarter of SBV and Joint stock commercialBank for Foreign Trade of Vietnam, branch of Quang Ninh, the authors will usedlata collection method by using reports of the units working in the management ofhuman resources, annual reports from 2007 to 2012 of the State bank: by datacollection method through interviews; by observation method; by descriptionmaethod and survey method through questionnaires Therefore, the research teamused 2 main methods as follow:

+ Qualitative analysis method: The research team will use this method toanalyze the real situation and context based on reports of the human resourcemanagement annual reports legal documents plans programs and analysis throughoibservation description of habits and activities of research objects In addition this

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method also studied other secondary data such as books newspapers, magazines andinformation from Internet The team also used survey method through questionnaireswith the controversial open questions With this method, much qualitativeinformation may be provided helping the research team assess the situation in theorganization reflected through thought perception, attitude and desire of individuals

in the organization

+ Quantitative analysis method: The research team used the statistics of theOrganization and staff department and school of training for staffs in the bankingfield in the period 2007-2012 to compare, analyze and evaluate the phases of researchperiod In addition the team also collected data by survey method throughquestionnaires With this method the research team will analyze the data collectedfrom the survey through questionnaires to clarify more assessments made from thequalitative analysis method or subjective assessment from the secondary data of unitsmaking reports at State Bank of Vietnam

Besides the analysis and evaluation to find out shortcomings, limitations andcauses to suggest the most effective solutions, the research team’s use of these twomethods also increases the accuracy of the results in the research

3.2.1 Qualitative analysis method

+ Statistic data collection method: The evaluation on the quality of humanresources of staffs civil servants and officials of the State bank in the period 2007-

2012 is implemented through evaluation and analysis of the State bank’s reports inthe research period of the topic However this data source does not have enoughinformation to reflect specifically and fully each research object This data source isalso often subjective of the unit performing reports and statistics

- Interview method: In addition, to have more detailed and specific

information related to the research content of topic, the research team interviewed a

number of cadres and officials working and personnel work in organizations and in

a number of departments in the state bank

- Observation method: To capture more information relating to the workattitude work time habit during working hours of the staff in the organizationrelated to the quality of work the research team used direct observation method

nN o

3.2.2 Quantitative analysis method

- Statistical data collection method: The research team used statistics ofOrganization and staff Department and school training banking staff in the period2007-2012 to serve to analyze and compare fluctuations and changes of the quantityand quality of human resources in the research units in years of research period

- Date collected by questionnaires: The questionnaire method consumes time,takes much money but it can give for the research team updated information at thetime of asking

+ Design of questionnaires: The survey questionnaire (attached appendix 1)

was designed with 5-level- Likert scale and was built by the following steps:

- Learning about the theoretical models on employee's satisfaction

- Developing theoretical model for research topic

- Detailedly describing needs on information

- Establishing the questionnaire based on the information needs outlined

- Mock interview and editing and completing the survey questionnaire

+ Content of questionnaires: The questionnaire consists of three parts

Part A: includes questions about general information of the research object(from question 1 to 6) These questions are about events: its advantages are to be

easy to answer and help respondents familiar with the interview.

Part B: consists of questions used to gather information on issues related tothe personnel policy of the State bank (from question 7 to 17) This part consists ofquestions used to measure the satisfaction level from low to high of research issues

Part C: This part is relatively important because it mentions the capacity ofthe staff so this is really sensitive While setting questionnaire for part C, our team

is very anxious because of the objectivity of answers but one of the reasons wedecided to establish the questions for Part C is that questionnaire does not requestrespondents to leave their name So we believe in the truthfulness of therespondents so that the team can study the actual situation of the human resourcesquality of the Sate Bank which is the basis for analyzing the actual situation of thehuman resources quality in Chapter 3 of the thesis

- Questionnaire is designed with 5-level Likert scale that is built and

developed from the theory of A.Maslow and based on the JDI scale of Smith andAJDI scale

+ Survey object: Participants in this research are employees in differentpositions and tasks regardless of gender, age income in 3 departments andbureaus at the head office of the State Bank with different positions works andfunctions

+ The total number of participants: The reliability of research results isdirectly proportional to the size of sample Larger the size of sample is, higher thereliability is However this increases the time and cost The reasonable size ofsample will reduce the time and cost of the survey

Many researchers believe that the minimum size of sample is 4 samples for

‘each parameter estimated The number of agency’s staff selected in this research is

70, so the size of sample selected to research in the topic is all employees of the unit,with 70 samples

+ Survey process: Statistical data is collected by indirect interview.lParticipants who receive the survey questionnaire consisting of questions andanswers ready, just select the most suitable answers for them Questionnaires aresent directly or indirectly from friends and colleagues to participants and given backtio researcher after the answers are completed

Time of delivering questionnaire: January 2013

Time of gathering questionnaire: February 2013

+ Survey results: The number of questionnaires received accounts for 60/70Questionnaires

+ Method of survey figure presentation:

Survey figures are presented under the form of graph or table of figures

is oO

CHAPTER 4°

RESULTS OF THE RESEARCH

In Chapter II the research team analyzed the factors affecting the quality ofhumai resources In Chapter III, the research team presented the researchmethodology and data collection After the data processing in chapter IV, the teamwill »e based on data collected for analysis evaluating the quality of humanresources through the analysis of influencing factors, namely as follows:

4.1 [ata analysis

4.1.1 Recruitment Policy

The State fixes the amount of annual payrolls, specific recruitment criteria,registred conditions the period of recruitment notice, priority subjects, andexamnation content On the basis of the State’s general regulations, the State Bankmake: the recruitment of civil servants once or twice a year through a competitionexamnation; a recruitment period lasts 3 to 5 months Subjects of the recruitmentare fo: staff, technician, and expert positions

Strengths:

Every year, the recruitment has met fully and timely staff demands of theunit Vhen recruiting, the state bank paid attention to the innovation of staff

structure through the following principles:

+ Recruit based on the requirements and tasks of the job

+ Exam Content: In addition to specialized knowledge, the exam content alsofocuse on other requirements such as communication skills, negotiation,presenation communication skills in English (interview in English ) to createstaff tam being increasingly more comprehensive

li regard to quantity, by June 2012, the total number of cadres, officials andcivil srvants of the State Bank has been over 6,600 people, including Departmentsand bưeaus of the Central Bank accounting for 22%: Inspection & Supervisionagencis 5%: Public service delivery units 5%; Urban and provincial branches 51%:Bankirg Academy and Banking University of Ho Chi Minh City 17%

B: 31" December 2007 the State Bank system had a total of 4.478 people

(excluing Banking Academy and Banking University of Ho Chi Minh City), in

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which in the central bank there are 1.088 people including units, bureaus,departments of the central bank and agencies inspecting and supervising the bank(account for 24.29%).

Regarding the number of employees, from 2007 to June 2012 the number ofSBV' staffs and civil servants have steadily increased to ensure be sufficient in thequantity according to work requirements in accordance with staffing allowed

Banking Academy and Banking

University of Ho.

Chi Minh City

17% Inspection &

Supervision agencies 5%

Figure 1: Structure of the State Bank s human resources divided by system

Besides the achievements, the recruitment policies have also somelimitations and shortcomings as following:

+ In term of institutions: According to the current regulations guiding the

implementation of the officials and civil servants law in 2010 (Decree 24/2010/ND-CP; Circular No 13/2011/TT-BNV) there are many unsuitable contents: thecontent of the civil service examination is not really suitable, does not fix thecharacteristic of the branch The civil service examinations for Class D regulatesunclearly and inconsistently: Taking too much time because the execution processincludes many procedures so the opportunities to attract and retain talent peopleare restricted: The current regulations on the recruitment of officials and civilservants turn towards the opinion of the agencies managing officials or of theMinistry of Home affairs so the process is prolix with much paperwork and the

right of decision of the units using employees and of the Governor was limited; inexamination the standards on typical capacity are less emphasized.

The recruitment process is too backward relatively similar to theexamination program of the universities to attract students to train the bachelor.This statement completely overlaps with the survey by questionnaire of the researchteam when they are asked about the recruitment process: they stated that therecruitment is too outdated only meets the requirement of quantity but not quality.The research team received 48% of respondents agree 8% strongly agree 3% isacceptable 34% disagree and 7% strongly disagree

2 You are satisfied with the current

recruitment of the agency |

nethod to fit the characteri:

Table 1; Results of the questionnaires on recruitmentThe state bank of Vietnam with its headquarters having rather small scale.but highly specialized nature is difficult to convert and orient the shift process inthe financial sector the recruitment have to be more flexible in the recruitmentthrough personnel recruitment policy which is timely, suitable to the function ofeach unit department and bureau The slowness in the staff recruitment for thevacant positions will significantly affect the development of the financial sector andthe ability to achieve the operational objectives of the state bank.

4.1.2 Policies on arrangement and use of human resources

Strengths:

- Arrangement and appointment of staff: Persons who are recruited will beappointed to the scale suitable with their working task, and the period of probationthey have to take is from 3 to 12 months depending on each their rank Like otherdepartments and ministries, all new State Bank recruits that have bachelor degrees

will be arranged in the working position of A-class rank, 1“ grade, and salary

coefficient of 2.34, without considering the nature and complexity of the work theyhave to do

By June 2012, in the State Bank system, the structure of human resources, in

which number of leaders are 1.573 people (28.88%), professional staffs 3.567people (56.42%) and other staffs are 1,182 people (18.%) By 31st December 2007,staffs of professional and operation block account for 51%, staffs of support blockaccounts for 49% Thus compared to in 2007 staffs of professional and operationblock tend to increase This is entirely consistent with the functions and tasks of the

central bank and the current mechanism of management and use civil servants

Figure 3: The state bank's manpower structure according to block

+ Human resources structure by age at the state bank:

Age tower of SBV’s staffs in the headquarter and branch system in

2007

Source: Organization and staff Department SBV

In 2007 the structure of age is relatively equal although the number of youngstaffs at the age of 21 — 30 and 3] - 35 seems to be larger while the number ofstaffs n branches is primarily in the age of 41-50: there is a shortage of staffs aged

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