Luận văn thạc sĩ Quản lý công: Whether Government agencies can retain high quality human resource: A SWOT analysis for Hanoi City's administration

Title: Whether Government agencies can Retain high quality Human resource: A SWOT Analysis for Hanoi City’s Administration Level: Final assignment for Master Program in Public Management

UPPSALA UNIVERSITÉT &

UNIVERSITY OF ECONOMICS & BUSINESS, VNUH

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Whether Government agencies can Retain high quality Human

resource: A SWOT Analysis for Hanoi City’s Administration

Authors Trang Nguyen Thi Mai

Huong Hoang Lien

Supervisors: Dr Sven-Erik Svard

Dr Truong Do XuanClass: MPPM - Intake 6 - Group 6

Our group would like to express gratutide to Prof Dr Sven-Erik Svärd, Uppsala University, Swissden and Dr Do Xuan Truong, University of Econmics and Business (UEB), Hanoi National University for their guidange during the

course of this thesis.

We also thank all lecturers who have shared with us their knowledge and

experience in public management Many thanks to supports of UEB and the

managers and coordinators of the Center for International Training and Education (CITE) for their great services.

We thank Department of Finance Hanoi for their encouragement and

supports Also thanks to the civil servants who participated in our survey.

Finally, we thanks all class participants for their supprts and sharing not only on learning but also on daily life matters.

Best regards,

Authors: Trang Nguyen Thi Mai

Huong Hoang Lien

Title: Whether Government agencies can Retain high quality Human resource:

A SWOT Analysis for Hanoi City’s Administration

Level: Final assignment for Master Program in Public Management.

Authors: Nguyen Thi Mai Trang and Hoang Lien Huong

Supervisor: Sven-Erik Svard and Do Xuan Truong

Date when the thesis is presented: 16 May 2013

Aim: Policies for managing civil servants are often lack strong scientific bases.

In addition, the implementation of these policies do not has strategic focuses Instead of focusing on the strengths of government agencies, these policies focus

on the weaknesses These policies do not utilise the opportunities in order to reform human resource practices in the public sector Therefore, the effectiveness of these policies is usually low.This thesis used the SWOT model

to analyse the current settings of managing civil servants in government agencies and then, based on the results, to develop strategic options for

managing civil servants This approach would lead to better policies and measures for managing civil servants.

Method: Based on various secondary sources of information, the authors

proposed opportunities, threats, strengths and weaknesses in the managing and utilization of civil servants These opportunities, threats, strengths and weaknesses were then verified by surveying views of 80 civil servants.

Result & Conclusions: Results of the survey showed that government agencies

now are in a quite difficult situation when having more weaknesses than

strengths However, they are having more opportunities than threats.

From the SWOT analysis matrix, the authors developed five strategic options for retaining high quality human resource Strategies of priority include SO strategy (maximising strengths and opportunities), WO strategy (minimising weaknesses

to maximising opportunities) and ST strategy (maximising strengths to

minimising threats).

Although difficult but WT strategy (minimising weaknesses to minimising

threats) need to be considered The reason is that this strategy helps overcome

two main current weaknesses of government agencies which are low salary and excessive staff Unless these two weaknesses are overcome, it is very difficult to successfully implement other strategies These two strategies can be successfully executed with certain conditions (opportunities) such as support of the society or strong political determination.

These strategic options showed that the focus of managing civil servants is not

to attract high quality people but how to retain them into the government system These strategies proposed in this thesis, if successfully implemented will help create a working environment that values competency and performance, and recognizes contributions of civil servants, positively re-enforcing efforts and good behaviours.

Suggestions for future research: Research in the future should further focus on two areas: applying SWOT to other areas of state management and assessing the

effectiveness of the human resource management policies and procedures For

example, a SWOT analysis would help the Government to identify relevant

strategies for public administrative reform These research efforts should also

avoid the shortcomings of this study that are not using qualitative approaches to develop SWOT components, only locally coverage, respondents were not homogeneous and having small sample size.

Contribution of the thesis: This is the first time, a analytical tool like SWOT

is applied to government agencies in Vietnam that paves the way for application of other techniques such as Balance Score Card or Management

by Objectives in the public sector This study provides empirical evidence on the opportunities, threats, strengths and weaknesses of government agencies

of a locality in Vietnam as a scientific basis for developing policies for retaining high quality people.

Key words: SWOT, Human Resource Management, High quality Human

Resource, Retaining Staff, Public sector.

1 Abstract.

2 Introduction

2.1 Rationale

2.2 Research Questions ccceieeeiiereee 2.3 Research purpos‹ 3 Theoretical model

3.1 The model employed

3.2 Application of SWOT model

3.2 A logical framework for this thesis

4 Research methodology

4.1 Data sources

4.2 Questionnaire development

4.2.1 Method for developing questionnaire

4.2.2 Opportunities 4.2.3 Threats

4.2.4 Strengths 4.2.5 Weaknesses

4.3, Data collection

4.4, Data analysis

5 Data collected

5.1 Overview of the data 5.2 Results and discussions 5.2.1 Opportunities 5.2.2 Threats

5.2.3 Strengths

5.2.4 Weaknesses

6 Developing strategic options for retaining high quality staff

Ằ " ẻ

6.2 Strategy WO — ¬ — Ỏ 6.3 Strategy ST ¬ =1

M -7 Conclusions, contributions and directions for further research

LIST OF TABLES

Page

TABLE 1: POSTIONS OF THE RESPONDENTS 27

TABLE 2: GENDER STRUCTURE OF THE RESPONDENTS -27

TABLE 3: WORKING AREAS OF THE RESPONDENTS -28

TABLE 4: WORKING TENNURE OF THE RESPONDENTS 28

TABLE 5: RESULTS OF THE OPPORTUNITIES „31

TABLE 6: RESULT OF THE THREATS (%)

TABLE 7: RESULT OF THE STRENGTHS (%)

TABLE 8: RESULTS OF THE WEAKNESSES (%)

LIST OF FIGURE

FIGURE 1: SWOT MODEL FOR ORGANIZATIONAL ENVIRONMENTAL SCANNING

FIGURE 2: SWOT MATRIX

FIGURE 3: THE LOGICAL FRAMEWORK : ¬

FIGURE 4: SWOT MATRIX FOR DEVELOPING STRATEGIC OPTIONS

1 Abstract

A number of policies have been developed to attract and retain high quality human

resource in government agencies However, these policies are often lack strong scientific bases In addition, the implementation of these policies do not has strategic focuses Instead of focusing on the strengths of government agencies, these policies focus on the weaknesses These policies do not utilise the opportunities in order to reform human

resource practices in the public sector Therefore, the effectiveness of these policies is

usually low.

In order to overcome these above shortcomings, this thesis used the SWOT model to analyse the current settings of managing civil servants in government agencies and then, based on the results, to develop strategic options for managing civil servants This approach would lead to better policies and measures for managing civil servants.

Based on various secondary sources of information, the authors proposed opportunities, threats, strengths and weaknesses in the managing and utilization of civil servants These opportunities, threats, strengths and weaknesses were then verified by surveying views of civil servants.

Results of the survey showed that government agencies now are in a quite difficult situation when having more weaknesses than strengths However, they are having more

opportunities than threats.

From the SWOT analysis matrix, the authors developed five strategic options for retaining high quality human resource Strategies of priority include SO strategy (maximising

strengths and opportunities), WO strategy (minimising weaknesses to maximising

opportunities) and ST strategy (maximising strengths to minimising threats).

Although difficult but WT strategy (minimising weaknesses to minimising threats) need to

be considered The reason is that this strategy helps overcome two main current weaknesses of government agencies which are low salary and excessive staff Unless these two weaknesses are overcome it is very difficult to successfully implement other

strategies These two strategies can be successfully executed with certain conditions

(opportunities) such as support of the society or strong political determination.

These strategic options showed that the focus of managing civil servants is not to attract high quality people but how to retain them into the government system These strategies

proposed in this thesis, if successfully implemented will help create a working

environment that values competency and performance, and recognizes contributions of civil servants, positively re-enforcing efforts and good behaviours.

2 Introduction

2.1 Rationale

Brain drain from government agencies has been recognised recently This is a new

phenomenon that needs much more research.

Although regular statistics on brain drain is not available, there is consistent evidence that this phenomenon is on the rise According to the Ministry of Home Affairs, 16.000 civil servants had left government agencies during 2005-2008 (Pham Cuong, 2008) This figure

is only estimates and the real magnitude of brain drain can be much higher.

The reasons for civil servants to leave have not been systematically studied Government offiices do not practice exist interviewing as companies often do.

To response to the brain drain, local administrations often have various policies and measures The core of these policies is to provide an cash allowance to highly educated

groups such as outstanding graduates, professors and PhD holders, or specific groups that

are in serious shortage such as medical doctors These groups are also eligible to benefits suclh as housing allowance, travel allowance or buying houses at discounted price etc However, the local administrations do not pay attention to how to utilise the capabilities of these high quality people Therefore, the effectiveness of these attracting policies are not high The provinces can only attract few people and among those who came, many left shortly because they can not utilise their capabilities.

Recent programs such as the Program in Attracting Outstanding University Graduates and

Young Scientists or the Regulations on Attracting Utilising Training and High Quality

Human Resource include terms and conditions on the utilisation and training of human resource although these policies are only in the term of committeemen.

Measures on combating brain drain are often not strong enough and not focusing on the

key causes of the problems Government agencies tend to focus more on attracting than

retaining high quality staff but keeping people seems to be more important Unless having relevant ways to manage, utilise people, once being attracted, people would not stay.

Measures on keeping and retaining tend to be general and not strategic In many cases, there has not sufficient understanding about the opportunities, threats, strengths and

weaknesses of government agencies so the measures could not utilise opportunities and alleviate threats; could not make use of the strengths and reduce weaknesses The result is

the low effectiveness of these measures In such context, to clarify the existing

environment and conditions for managing civil servants is crucial in developing proper

measures for retaining high quality staff.

2.2 Research Questions

These thesis will help answer two following questions:

1 What are the opportunities, threats, strengths and weaknesses in retaining high

quality human resource?

2 What strategies for retaining high quality human resource government agencies

should take given their existing environment?

2.3 Research purpose

The proposed of this thesis is to identify and assess the opportunities, threats, strengths and! weaknesses in retaining high quality human resource of government agencies and basied on that, to propose relevant strategies for retaining them.

The target group of this thesis is high quality human resources They have crucial contributions to the performance and development of an organization Therefore, they play important role In public organizations in Vietnam, they are in two groups: leaders/managers and highly competent professional officials This study is not going to define specifically these groups because that is not neccessary However, one way to define it is the position rank for leaders managers and the level proffesional seniority of

head of functional units of functional City’s department, heads of functional units of district's people committee and heads of units of service delivery agencies.

3 Theoretical model

3.1 The model employed

This thesis use the SWOT (opportunities, threats, strengths and weaknesses) model to

analyse the employment environment in the government agencies The SWOT model helps identify cpportunities, threats, strengths and weaknesses for an organization in order

to develop competitive strategies In the current context, government agencies have to compete with other sectors for qualified human resource Therefore, they need appropriate strategies for retaining high quality human resource.

SWOT was first used at Harvard university for case analysis In the early of 1950, Harvard’s professors employed SWOT to study competitive strategies of companies in relationship with the environments in which they operate In late of the 1950, this idea was developed to the belief that all organizations need objectives and have to be persistent

with the objectives they choose In early 1960, discussion in business schools focused on the strengths and weaknesses in relation with the opportunities and threats in business environment In an workshop organized in 1963 at Harvard, SWOT method was formally

introduced that was considered a breakthrough in strategic thinking.

SWOT analysis is a method to evaluate opportunities, threats, strengths and weaknesses of

an organization SWOT can also can be done for a product, a project, a locality or even for

an individual It is about figuring out what should an organization do given its favourable and unfavourable, internal and external, factors Therefore, SWOT can be applied for

businesses but also for government agencies and non-profit organizations This technique

was initially proposed by Albert Humphrey during 1960 and 1970 while he was studying

Fortune 500 companies (Humphrey, 2005).

Together with PEST (Political, Economic, Social, Technological) analysis, SWOT was

used for environmental scanning of the strategic planning (Hill & Westbrook, 1997).

Figure 1: SWOT model for organizational environmental scanning

Source: Hill & Westbrook, 1997.

The four components of SWOT include:

Strengths: Characteristics that create advantages to other organizations

Weaknesses: Characteristics that create disadvantages to other organizations

Opportunities: External factors that can become advantages

a Pe Threats: External factors that can become disadvantages

In order to identify each component of the SWOT model, specific questions should be asked:

Strengths:

«© What competencies does the organization possess?

© What the organization can do better than others?

© What resources does the organizations possess?

© Does the organization has good reputation or brand name?

Weaknesses:

e On what other competitors are stronger than the company?

e What it the organization is not good at?

e What is the things that customers most often complain about?

e What employees most often complain about?

¢ Which procedures and activities that the organization can improve?

© On which areas can the organization use its strengths?

e How the needs of the organization’s customer change?

¢ How technological change can affect the organization?

e Is there any new market that the strengths of the organization can be utilised?

e Is there any different ways to create the organization’s products and services?

e Are the customers of the organization’s competitors satisfied?

Threats:

© Can customers have alternative services?

¢ Do the needs of the organization’s customers change over time?

e What products and services do the organization’s competitors are developing?

e Are employees happy? Is the turnover rate high

e Is the organization having new competitors?

These questions will be asked when identifying opportunities, threats, strengths and weaknesses of government agencies for retaining high quality human resource.

SWOT analysis help create feasible objectives and solutions First, it supports decision makers to assess the feasibility of the objectives Unless the objectives are feasible, they have to be re-determined and the SWOT procedure is repeated When doing SWOT, the above questions are raised to create meaningful data on the components (opportunities,

threats, strengths and weaknesses) that are then analysed By that way, SWOT provide

useful information so it can effectively deploy its resources and capabilities in a specific

competitive environment On other word, the organization select an appropriate strategy for itself.

SWOT was introduced in the period that strategic management in infancy so that such a simple tool could meet the needs However, more sophisticated strategic planning techniques to meet the need for decision making Based on SWOT, other more advanced

models that overcome SWOT’s weaknesses were introduced such as the Balance Score

Card of Kaplan and Norton or the Cross Impact Analysis that help to identify Critical Success Factors of an organization (Panagiotou, 2003).

Other authors introduced totally new models such as the Value, Rareness, Imitability and Organization (VRIO) that identify competitive advantages and barriers of imitability.

Specifically:

e Value: Resources or capabilities that organization can use to utilise market

opportunities or overcome threats?

e Rareness: Are these resources or capabilities controlled by a small number of competitors?

e Imitability: Do organizations without these resources or capabilities face cost

disadvantages when they want to have resources or develop the capabilities?

se Organization: Whether current policies and procedures of the organization

facilitate the utilization of the resources and capabilities?

An organization needs to rely on its resources and capabilities to successfully implement its strategy in turbulent environments The analysis of the external environment should be done in the consideration of the internal factors of the organization In other words, it is not possible to assess the value of the opportunities or the magnitude of the threats without considering the internal conditions of the organization (Agarwal et al., 2011).

The TOWS model develops various strategic alternatives by combining internal strengths

and weaknesses with external opportunities and threats This model emphases on the relationship of the components, for example, how to overcome threats to utilise strengths and utilise opportunities (Weihrich, 1982).

3.2, Application of SWOT model

One way to use SWOT is matching and converting Matching means to create competitive advantages by combining strengths with opportunities Converting is turning weaknesses into strengths and threats into opportunities For example, a company is technologically weak in an area may think to move to another area When the threat is not

be able to mitigate, the organization should avoid that threat.

According to SWOT, an organization may not need to pursuit attractive opportunities but

to consider only opportunities that match its strengths The organization should reduce

weaknesses in preparation for pursuing coming opportunities With that logic, various

strategic alternatives can be developed for an organization (Table 2).

ng “

| _ Sength Jw Weakness

Opportunity | Strategy S-O | Strategy W-O

*

êmStrategy S-T | Strategy W-T

Figure 2: SWOT Matrix

In which:

Strategy S-O is the strategy that pursuits opportunities that match the strengths of the organization Every organization wants to maximize its strengths and utilise its available opportunities to develop products and services for the market In short run, organizations can use the three remaining strategies but in the long run, they want to return to this strategy to fully utilise their strengths and opportunities In the long run, organizations have to eliminate weaknesses or turn weaknesses into strengths, and to control threats so they can focus on opportunities later.

Strategy W-O is the strategy that overcomes weaknesses so that the organization can tap

into opportunities On other words, the organization minimise weaknesses and maximise opportunities Organizations can spot market opportunities but their weaknesses prevent them from pursuing these opportunities In order to overcome the weaknesses, the organization can cooperate with other organizations which are strong on these areas, to

recruit people who have capabilities or to reduce these weaknesses The organization can simply choose to do nothing, leaving out that opportunity for other competitors.

Strategy S-T is the strategy that uses the organization’s strengths to minimise the impact

of threats This strategy does not mean that the organization directly faces the threat and

strengths need to be used sparely and with careful consideration.

Strategy W-T is the situation in which the organization tries to reduce weaknesses and

minimise threats It means a difficult situation when an organization that is having

weaknesses and has to deal with threats The organization has to struggle to survive or even close business However, there many other options that organization can choose such

as merging with other organizations or downsizing in the hope to alleviate threats over

time

3.2 A logical framework for this thesis

In this thesis, SWOT model is applied for studying staff retention in government agencies Specifically, this study is done for the Hanoi City’s Administration that include state administrative agencies at various levels and public service delivery agencies.

Since the start of the reform policy, the private sector has been developing fast The number of businesses has been increasing leading to also increasing demand for human

resource Apart from young labourers who graduate high schools, vocational schools, universities, businesses also attract human resource of the public sector Civil servants quit jobs :o work for businesses and set up their own businesses Some civil servants move to

work for non-profit organizations and international organizations.

In the old centrally planned economy, the state has full control of economic activities The

private sector was very small if exists Private sector included only some small family busiresses that hire very few people Employment relationship existed to a very small extert because it was not recognized Employment means exploitation During that period, havirg a paid job also means working for the government.

The +aturally autonomous position in employment did not encourage the state to improve

on how to manage human resource On the mean time, the need for labour force of the

private sector increases The improvements in salary level and working conditions help

businesses compete better for human resource.

Government agencies are competing with companies for qualified human resource Therefore, they need to reform and improve the way they manage civil servants unless they would sce their people leaving to join companies.

Comparing with the private sector, the environment in government agencies are less dynamic because of the consistency requirement All civil servants are generally managed

by one human resource management system although some differential treatments are given to specific groups such as public servants and government officers Consequently, policies and measures for managing civil servants are rigid.

When civil servants of Hanoi City’s Administration leave government office, they can work for companies, move to work for ministries, work for international organizations, non-profit organizations or be entrepreneurs Companies include foreign owned companies, join ventures, private Vietnamese companies Self-employment including setting up businesses, private schools, clinics, lawyer offices etc All of these organizational settings can be competitors for human resource of government agencies although companies are the main ones It should be noted that, quitting jobs at government agencies to be self-employed is merely the own decision of the civil servants and is not subject to any competitive forces.

Based on the result of SWOT analysis, strategies for attracting and retaining high quality human resource are derived These strategies include SO, WO, ST and WT strategy as described above The logical framework for this thesis is presented in Figure 3.

4 Research methodology

4.1, Data sources

This study used the following data sources:

Secondary data:

1 Statistics on the number of turnover in government agencies;

2 Articles of journals and newspapers on brain drain of government agencies;

3 Regular reports on management of civil servants;

4 Plans and programs on human resource development.

Primary data is collected by questionnaires.

A questionnaire was developed to collect data from 80 respondents who are civil servants The collected data was then processed and analysed to identify opportunities, threats,

strengths and weaknesses.

4.2 Questionnaire development

4.2.1 Method for developing questionnaire

Qualitative is usually employed for developing questionnaires that are then used to collect quantitative data Questions can be developed by in-depth interviews and/or group discussions When developing development strategies for Macao, the author used group discussion to develop SWOT components (Koo, 2011).

This study, however, did not use qualitative techniques for developing the questionnaire but developed from secondary data available The first reason is that although there are not

systematic studies on brain drain from government agencies but there have been a number

of published articles on managing civil servants In addition, there have been many comments and opinions on the mass-media, interviews and workshops on this

phenomenon, its causes and solutions given by managers and researchers.

The presumed opportunities, threats, strengths and weaknesses of government agencies in retaining high quality human resource are determined from the gathering, analysis,

ass ssment and selecting among the views, observations and findings in published articles,

workshop opinions and interviews From these data and the authors” insights into the

issues (both authors are civil servants with several year experience working in government

agencies), they may add or modify the opportunities, threats, strengths and weaknesses if

found relevant The coming sections provide the detailed development of the presumed

opportunities, threats, strengths and weaknesses.

4.2.2 Opportunities

Government agencies have many opportunities in keeping competent employees Since

Vietnam officially became a member of WTO in 2007, we have no longer been a

self-controlled system but become an active counter-party in international society This is a great chance to Vietnamese economy as well as government agencies to join the world’s economy However, to take advantage of that opportunity, the labour force should meet requirements of a highly internationalised economic environment Therefore, globalization requires government agencies to increase quality of civil servants.

The development of a market economy and international integration requires improvement

in the economy’s ability to compete Besides, a developed legal system, competency to plan and carry out policies, especially flexibly adaptive ability to unstably integrating environment are also necessary conditions For such those targets, Vietnamese enterprises should strengthen their investment competency, technology development, new management technique adaption However, the government still keeps the decisive position in the creation of a healthy environment for enterprises to develop Hence, the fast growing economy demand the government improves effectiveness and efficiency.

Being aware of integration requirements and economic development, Vietnamese

government has proposed renewal country management plans and policies Especially, the

government has carried out the administration reform programme since 2001 Up to now, the government has also reformed in many fields such as institution reforms, state apparatus reforms and public finance reforms These movements have proved the Government has the intention to reform the public systems towards higher effectiveness

and efficiency.

After having Total Plan of Administration Reforms for 2001-2010, the Government has deployed many changes in labour management such as proposing and applying Public Servants Law and Official Law recently One of the reasons for low-efficient human management is the differences in management regulations between Central and Provinces

solutions for this situation is the Central Government has given sufficient autonomy to agencies, allowing them to develop relevant HR practices If the solution can be applied, it will be a good opportunities for ministries and provinces to create a managing system that

“fits” their own needs and is suitable for each one’s special situation.

Moreover, the market economy of Vietnam has only 25 years of history Although market

elements have existed, Government agencies still accounts for a large number There is

about 2.8 millions people employed by the government, which makes it become the biggest employer of the country Although the recruitment policies has changed a lot with

the end of life-time employment, positions in an Government agencies are still much

more stable compared to private enterprises In terms of psychology, the belief that working for government agencies is good job as a safer choice and this is an opportunities for the state to recruit good manpower.

Along with the development of education and training, quality of human resources in Vietnam is increasingly enhanced The number of university and college graduates

increased over the years Although there are limitations such as lack of understanding of

quality practices and essential soft skills but quality of graduates has increasingly been improved Besides, a significant number of students studying college and graduate school overseas have joined labour market after returning home Human resource of higher quality available that government can recruit However, not all state agencies are able to take advantage of this opportunity.

The growing economy has positive impacts on the state budget In 2011, state budget increased 20.6% compared to 2010, rising 21.14% in 2010 compared to 2009 (Ngoc Tho, 2011) Higher government income that enables it to increase salary for civil servants.

However, whether the salaries can be raised or not depends on the budget expenditure and

budget priorities.

Currently, the average wage in the state in terms of absolute average is higher than the entire workforce Nevertheless, putting on the same plane and level of seniority, the average salary of the public sector is lower than in other areas Considering standards and higher expectations of public servants and moral qualities, the level is much lower It has been recorded recently that low income is one of the reasons for the low efficiency of the

officers and employees Recently, expectation and support of the society for better civil

services (i.e increase salary for civil servants would not be objected by the People), and

this s also a favourable condition for wage increases However, wage increa:

receive fully supports only when it goes along with the increase in work efficiency

The recent changes have created several pressures on Party agencies and National

Assembly to reform the state management activities The main cause is due to overflowing corru2tion and the weakness in operating the macroeconomic and the management of Government agencies As a result, The Resolution 04 about "a number urgent issues about the revolution of the Party at present" has been promulgated This is also the condition to create Political pressures that forces the Government to reform and improve.

It is necessary for the state agencies Reform activities of need to learn international experience, especially from countries undergoing development as Vietnam today Since the 1990s, the Government of Vietnam has received funding from multilateral and bilateral donors for public administrative reform and capacity building for government agencies Technical support for civil service reforms from International Donors, e.g UND?, ADB This is also a direct opportunity for the government to retain human

resource.

4.2.3 Threats

Since 1986, Vietnam has decided to reform the economy from centrally planned to market econcmy The private sector has been rapidly developing Foreign investment in Vietnam has aso increased dramatically Thus, employment opportunities in the non-state sector have increased as well Along with the number of jobs created, the private sector has bettersalary conditions and more flexibility in human resource management Many people left tke state agency for low wages and poor working environment (Vu Quynh, 2010) Therefore, the state agency is facing a challenge that non-government sectors are creating

more 1ttractive employment options.

The cevelopment of private sector along with socialization of public services has led to the ircreasing participation of the non-governmental sectors in the provision of social services and the creation of choices for businesses and residents This participation contri›utes to the improvement in meeting the needs of the people This is a challenge to

the site units because in some senses, they have to compete with other economic particpants and will no longer hold a monopoly position as before They also have to

compete on price and quality of services If the job cannot be done well, the organization providing the services of the state will lose market to other competitors.

Corruption has been identified as a problem in Vietnam According to the International Transparency Organisation, Vietnam ranked 123 of 174 countries surveyed about the level

of corruption (TI, 2012) In fact, many people chose to work for state agencies because

they believe that they are significantly contributing to the country However, corruption

and! red tape is undermining the good image of government agencies and public servants.

This poses the risk of not attracting good people working in the public sector.

Vietnam has been changing rapidly from the 80s of the last century Changes refer to

revolutions in the economy and society There are concerns that those changes could take away the basic values of socialism For example, the rapid development of the private

sector will lead to division of wealth and social inequality From that point of view, there has been fear for change of certain group because of losing control and this is a risk of obstructing change.

Improving the quality in operations of state agencies could lead to changes affecting some groups Resistance of certain groups because of loosing interests A typical example is the

plam to convert 1.6 million civil servants recruited before 01/07/2003 to contract regime

was not achieved due to the strong opposition though this is the right thing to do (Xuan Linh, 2010).

The shift of human resource from the state agency to other economic areas was quite

stromg in recent years In the period 2004-2008, there was 16,000 people left the state

agency According to experts, this is an alarming phenomenon because most of these are high competent ones However, there are opinions that this is a normal phenomenon for the {fact that the state staffing has increased to 500,000 (Xuan Linh, 2008) Perception that brain drain is just a normal phenomenon because it eliminates efforts to improve the

current management system.

Globalization and integration efforts with the world economy requires many changes These changes to it turn will require greater effort and therefore the government needs a

lot of competent people On the contrary, there are also the belief that government agencies do not need much high quality human resource This is a risk because it

elim inates the efforts to strengthen the quality of workforce for public sector.

The explosion of information has helped people access to new services and service standards; thereby, created new demands for these services as well as the demand for higher quality services For example, people are requiring public hospitals can perform modern health care techniques which were updated with the renovation of the world They

also require private hospitals to improve the quality of service equivalent to the foreign

hospital or a private hospital Since then, a challenge to the state agencies is that businesses and citizens demand better services that require more capable civil servants.

Officials leave government agencies for a variety of reasons According to a recent survey,

some of the main reasons for leaving the state agency are low wages, unclear human resource policy and the “unhealthy” working environment (Cuong Pham, 2008) However, the decisive element is that civil servants are not happy with government agencies, and

this is a threat that the state agency has to resolve.

The final threat is the fact that there are many civil servants are leaving government

agencies This phenomenon can create a chain reaction when leaving people find jobs with

higher wages and better working environment Good people leaving will have a negative impact to the outcome of state agencies, thus chances for higher wages and improved

working environment will be unreliable This trend will continue to increase the attraction and repulsion of officials and employees, leading to the departure level will be even

worse.

4.2.4 Strengths

It is undeniable that the state agency has many strengths rather than other sectors These

strengths can be used to retain high-quality personnel.

Built on a solid legislative foundation and a stable political system, the capacity of the

legal system in Vietnam is improving Since 2001, the government focused on administrative reform with 4 pillars of institutional reform, the reform of the organizational structure, improvement in the capacity of civil servants and public finance reform Although revolution is slow but the administrative reform efforts have helped

government agencies are generally being perceived as having good management systems

to advance the professionalism in performance To operate such a management system, all

the staff have to be capable and qualified enough This is a strong basis for taking state

agencies to build a system of good human resource management.

Gradient executive based on socialist regime in Vietnam emphasize fairness and equality Thus the requirements for a unified management system of the entire public sector is highly necessary This is a weapon to limit negative common equity in the state agency.

Having a centralised HRM system, including the defining activities of organizational

structure, apparatus, staffing, recruitment, succession planning approach, training, payment and evaluation Despite being criticized as less effective because it failed to meet the requirements of each group of officials or the difference between the administrative

and industrial regions, the united management system is still the foundation for stability

and long-term development for staff and public servants.

Previously, in the self-subsidy regimes, public sector was the only one sector that provides

paid employment opportunities Those working for the state, known as "officers", are quintessential parts of society Besides, the socialist regime also put a high value on dedication to the country and society Hence, state officers often had a higher position in

the society as working in state agencies provide highly appreciated, meaningful

employment Although it has been recently highlighted the contribution of private sector to Vietnamese economy, the above concept is still very significant.

There is a fact that state agencies is providing jobs that have low work pressure and plenty

of free time Compared to working for international organizations, businesses or NGOs,

working for the state agency is generally considered the most stress free According to the present about 30% of cadres and civil servants are only working in administrative time.

Deputy Prime Minister Nguyen Xuan Phuc stated that they "did not contribute anything”

(Chi Tung 2013) Of course, this statement is not true for all state agencies and all officers and employees A number of agencies and positions in state agencies work no less

pressure now This is disastrous for the state agencies, but for many people, it against is a

favourable because they have more free time and can spend that time to make extra

income or take care for children, families.

The old employment mode was lifetime employment In other words, career was absolutely guaranteed and there was no probability of losing jobs Recently, there have been more flexible changes in hiring mode From 01.07.2003 onwards, all officers were under contract mode instead of payroll as before However even afier signing the contract.

the potential probability of losing job in such administrative agencies is still very low In

current staff management system, discharging is still very difficult, so the state sector is

providing job security and stability.

It can be said that state agencies have a workforce that is capable of improving efficiency

in favourable working environment With approximately 500,000 officers and two million

civil servants, the state agencies are using the majority of the most qualified labor force of

the country However, the competency of this team is just partly exploited due to low wages and other limitations in management Government agencies are having a highly potential personnel whose performance can be boosted when the right conditions are

created When working efficiency is improved, it will again increase income and improve

the working environment.

Wages in the public sector are generally low However, the majority of officers and civil

servants have other non-salary income For many, these items may be much higher than wages According to recent survey results of the government inspection, there is 79% staff

have non-salary income of which 2.5% of non-salary income greater wage supplement (Ha Nhan, 2013) Additionally, this is just the surveyed information and the actual level may be much higher Therefore, it can be said that state agencies are providing jobs that

have potentially high income.

As discussed above, the public sector has a system of policies and regulations which are

uniformly applied The public sector has the longest recruitment mode and is most stable

in the economy Therefore, the state also needs to focus more on training and development

of labour force The public sector has diversified scope of work at multiple levels which can offer opportunities to learn and develop for employees Therefore, state agencies are

providing jobs that have much opportunities for training and growth.

4.2.5 Weaknesses

In addition to the advantages mentioned above, the state agency also has several

weaknesses These weaknesses will limit and hamper efforts to maintain and develop a competent labour force.

Nowadays, management system in the public sector is quite complicated and cumbersome.

In addition to the common legislative executive and judicial system, Vietnam also have

the social-political organization Furthermore, management systems have many levels Such a system has many management positions at various levels The level of correlation between different branches (judicial, legislative and executive) and the socio-political organization is quite high so there are many opportunities of promotion However, on the demand side, it can be said that promotion needs are enormous For these people,

promotion is their first priority rather than income Because of such high demand in the

system, many people still feel a Jack of career advancement opportunities.

Low salary is a weakness of the public sector, which is widely recognised (Hong Khanh, 2008) In terms of absolute average wage, the public sector can not be lower than the others, but given the level of officials and dignitaries, the wages are very low.

In addition to low wages, outdated salary system is a further weakness of the state agency.

The old payroll system referring to ranking is now less flexible Payroll criteria are the

level of training and seniority rather than outcome Although state agencies has an evaluation system to assess the performance results, this system is still weak and can not provide reliable enough information for the paying decision.

Due to the innovation demands, requirements to improve the human resource management

capability in the public sector is a necessity Old style human resource management system should be gradually shifted to management with a focus on efficiency To achieve this target, the state agencies should try to decentralize in management system and enhance multilevel management system so that requirements of the economy can be met.

One of the conditions for effective decentralization is management capacity must be improved However, government agencies have been considered lack of HRM capability

comparing to the requirements in the past few years (Le Nhung, 2012 ).

Working environment is an important consideration to make job decision Working

environment is a symbol, a result of the culture of that organization Moreover, culture is formed from the elements such as leadership, decision making method, information, etc The state agency’s is providing unattractive working environment Many people believe that public officers leave the state sector because of low wages, but a major reason is that the environment of the state agencies have not provided enough incentives for employees.

The limitations of policies and regulations on the management of cadres and civil servants was recognized long ago These limitations have been extensively studied and aware as a

basis for developing the overall program of administrative reform period 2010-2010.

However, after more than ten years, policy restrictions still exist It can be said state agencies are being slow in upgrading HRM systems During this period, although two important laws of civil servants and officers have been developed, the implementation of

these laws is still only at the beginning As a result, problems of public management as low salaries, levelling wages, generally performance evaluation, , train-mounted with retraining and job negative corruption in recruitment and appointment.

Currently, personnel management system has primarily based on qualification level rather than competence The competence means the ability to perform and complete the assigned work Competence is also a combination of knowledge, skills and attitudes to work Current HRM practices do not value competency, i.e recruitment, promotion, compensation are not based on competency but relationships and acquaintances play a decisive role Human resource management system also does not help curb corruption and negativity in the recruitment appointment procedures.

Due to the fact that capability is not the decisive element in appointing and recruiting, negativity and corruption easily arise Rampant corruption such as buying jobs and management positions demotivates civil servants They can also lower the motivation to work in the public staff Motivation to work can only be developed when the competition environment is fair and healthy enough When personnel decisions are not based on capability and contribution, motivation to work of competent people will gradually be ruined.

A big but inefficient work force is the finally proposed weakness within this thesis Vietnam currently has had about 500 thousand workers, civil servants and 2 million career civil servants This figure is considerably large compared to the current population of the country The problem, however, is that the performance is low According to the assessment, there is approximately one third of officers, civil servants hardly working This fact is also recognized by the government in the recent time (Chi Tung, 2013).

4.3 Data collection

Ihe purpose of the questionnaire is to verify the opportunities, threats, strengths and

weaknesses Respondents gave their views on whether these components were true or not.

Some studies use Likert scale, ie having five levels with | is totally untrue and 5 is

totally true In this research, the respondents has three options: “agreeing” with the

statement, “not agreeing” and “I do not know” This format is simpler that the Likert scale

that might be difficult to the respondents The option “I do not know” was provided in

case the respondent did not have sufficient understanding about the issues.

Questionnaires were filled by two ways, directly and sending to respondents by post The respondents could be approached directly and asked to fill out the questionnaires themselves In other cases, the questionnaires, enclosed a pre-paid envelop, were sent by post to the respondents who were remained by telephone a few days later.

4.4, Data analysis

The main basis for determining a proposed opportunity, threat, strength or weakness is

true or not is the percentage of respondents who said “ not agree” The cutting point is

20% If the proportion of respondents who choose “not agree” is higher than this cutting

point, it does not have sufficient information to verify the presumed opportunity, threat,

strength or weakness In addition, the percentage who said “I do not know” is also taken

into account In case the “not agree” proportion is lower than 20% (but higher than 10%)

and the percentage of “I do not know” is more than 10%, the SWOT component is also considered not confirmed.

The: rationale for the above deciding rule is that to be considered verified the opportunities, threats, strengths and weaknesses need consensus from the respondents In

this case, the consensus is 80% or four out of every five respondents, a well majority When this consensus is not found, the proposed component is not confirmed.

The: confirmed opportunities, threats, strengths and weaknesses are then included in the

SWOT Matrix for developing strategic options For convenience, the components are

abbireviated, CH — Opportunity, TT - Threat, TM - Strengths, DY — Weakness There will

be ten opportunities or CH 1-10 ( CHI, CH2, CH3 etc.), ten threats or TT 1-10, eight

s or DY 1-9.

strengths or TM 1-8 and nine weakn

Percentage of the different answers of the respondents are calculated by SPSS software.

5 Data collected

5.1 Overview of the data

A total of 85 complete questionnaires were collected However, five questionnaires were

rejected because they lacked sufficient information Therefore, the number of eligible questionnaires is 80.

The positions of the respondents are presented in Table 1 Staff accounts for two thirds

and managers account for one third of the respondents Managers might provide more

precise answers because they have more information Managers, however, could provide

views that are not exactly what they thought because they might have some pressure to view things that are in line with the government policies Staff would have less pressure to

do so.

Table 1: Positions of the respondents

Position Number (person) Percentage

among the respondents Because of the high level of gender equality in Vietnam, there is

no evidence of bias in the views of male and female respondents regarding the surveyed

issues.

Table 2: Gender structure of the respondents

Gender Number (person) Percentage Male a 39 | 49

| Female 41 52

The survey included information on the working areas of the respondents, i.e whether they are working for State management agencies, Service delivery agencies or other areas.

Service delivery agencies include schools, hospitals, sport-cultural agencies, and technology agencies at the district and city levels.

scien-Table 3: Working areas of the respondents

: Working area Number (person) | Percentage

Service delivery agencies 39 48,7

Table 4: Working tenure of the respondents Years of experience Number (person) Percentage

Less than 5 years 15 18,8

particular trend of the answers

5.2 Results and discussions

5.2.1 0pportunities

Results of the opportunities are presented in Table 5 Among the ten opportunities

proposed, six were confirmed These are CHI, CH2, CH3, CH6, CH7, CH8 Generally speaking, the results were as expected Demand for change creates pressure for

government agencies but also is an opportunity for them to improve human resource

management policies and practices Favourable economic conditions and labour market as

well as supports of the society are also opportunities.

CH4, CH5, CH9, CH10 were not confirmed:

e CH4 - “the Central Government has given sufficient autonomy to agencies, allowing them to develop relevant HR practices” — received a proportion of ‘not agreeing” of 25% This result can be explained as follows: The central government has not sufficiently decentralised or the decentralization itself does not make significant impact Given the decentralization program in Vietnam so far, many respondents might think that decentralization is not effective.

«© CHS “The belief that working for government agencies is good job” received support of only about two thirds of the respondents Jobs in the public sector are no longer considered preferable employment, probably because of low salary and unattractive working environment These shortcomings are becoming overwhelmed job security as the main reason for many people when they choose to work in the public sector This finding means that unless improving employment environment, government agencies are loosing their competitiveness over other sectors

se CH9 “Political pressures that forces the Government to reform and improve” has 12.5% of the respondents chose “not agree” However, up to 16,3% of them said

“do not know”, leaving this opportunity unconfirmed The concept of “political pressure” might be difficult to respondents so that they could not confirm or reject The political pressure in this context means the demand of the Communist Party and the National Assembly because of their leading and supervising role over the operation of the executive sector The Party and National Assembly recently increase their pressure by reenforcing their supervisory activities over government agencies for better performance This pressure, although increasing, it not

sufficient, partly because of the lack of independence In Vietnam, the Party,

National Assembly and Government are still believed “talking the same tone”.

CH10 “Technical support for civil service reforms from International Donors, e.g UNDP, ADB” had 13,8% of respondents chose “not agree” but 31,12% said “do

not know” This revealed the fact that not many civil servants are aware of the supports of international organizations for public administration reform in general

and upgrading capacity of civil servants in particular In fact, international

organizations have supported Vietnamese Government for many years However, results of public administrative reform progress seems to be a result of internal efforts and not external supports UNDP has been the key donor in this area but its view is not seriously considered In 2008, Mr Christophe Bahuet, Director of

UNDP in Hanoi recommended that the Government should dowsize the workforce

in order to improve salary and performance (Xuan Linh, 2008) According to a

recent report of the Ministry of Home Affairs, however, the number of civil servants has not decreased despite the Government's efforts.

Table 5: Results of the opportunities

increase quality of civil servants

The fast growing economy demand the government CH2 | hs 2;5 95,0 | 2,5

improves effectiveness and efficiency | |

| CH3 The Government has the intention to reform the public 25 86,1 H4

| systems towards higher effectiveness and efficiency

CH4 The Cental Government has given sufficient Sutonomy, to 25,0 69,0 150

agencies, allowing them to develop relevant HR practices `

The belief that working for government agencies is seen :

CHS : ean # 31,1 | 638 | 5,0

good job Ề : je CH6 Human resource of higher quality available that 18,8 788 25

government can recruit CH7 | Higher government income that enables it to inerease | eS " 63

salary for civil servants

Expectation and support of the society for better civil

CH 8 | services (i.e increase salary for civil servants would not be | 8,8 88,8 cỗ

objected by the People)

Results of the threats are presented in Table 6 Four threats were confirmed from the ten proposed They are TT1, TT2, TT3, TT4 The threats focus on the development of the private sector and its participation in the provision of social services There has been a convergence in the role of providing social services of the businesses and government agencies However, in order to facilitate the effective participation of the private sector, the Government needs to create a favourable condition for them to operate Businesses

V pressure for government agencies to improve their will then create the nece:

improving human resource policie: „ public schools and and practic: performance Unle:

hospitals will be losing good doctors and teachers to private institutions.

that when corruption preva

Corruption is also considered a threat to retaining high quality staff The reason is

ls, competency is not valued Corruption contaminates

working environment and undermines the image of government agencies According to a

prominent researcher, “how the system can attract and keep good people when corruption

is widespread at all levels” (Le Nhung, 2013).

TTS, TT6, TT7, TT8, TT9 were rejected:

TTS “Resistance of certain groups because of loosing interest” had 20 % of the

respondents chose “not agree” and 73,8 % chose “agree” Not many respondents considered this a threat probably the resistance is not strong and organized In fact, the resistance is not explicit and only in the form of not supporting change.

TT6 “Perception that Brain Drain is just a normal phenomenon” has 47,5% of the

respondents selected “not agree” and 45 % said “agree” This finding shows that many people are aware of the “abnormality” of the brain drain phenomenon A

proper attitude is the starting point for efforts to deal with brain drain in

government agencies.

TT7 “The belief that government agencies do not need much high quality human resource” has 81,3 % of the respondents chose “not agree” and 11,3% agreed The very low proportion of “agree” means that most civil servants have proper

understanding about the importance of human resource In fact, the human factor was not sufficiently paid attention in the government agencies, e.g not having a decent salary and a positive environment, that was implied that the human factor is not considered important in government agencies However, with the socialist philosophy is to put people first and give priority to the well-being and development of civil servants.

TT9 “Civil servants are not happy with government agencies” has 20 % of the

respondents disagreed and 76,3 % of them agreed This means that majority of civil

servants are happy with their employer This finding, however, need to be further studied because the common view is that salary in the public sector is low The Government has acknowledged this problem but still could not raise the salary level because of the limited budget This finding can be explained as follows: Although salary is low but taking into account the fact that work pressure in government agencies is not high, many civil servants are not unhappy with their employer.

e [18 “Businesses and citizens demand better services that require more capable

civil servants” has only 13,8 % of the respondents chose “not agree” but 13,8% said

“do not know” so that this threat was not confirmed This means respondents had some difficulty answering this question Demand for new competencies is not considered a threat This finding suggests that it may be more important to improve existing competencies, not to develop new competencies.

s® TTI0 “Many civil servants are leaving government agencies” had 20 % of the

respondents chose “not agree” and 62.3 % chose “agree” Although the brain drain

had been noticed in government agencies, the extent of this phenomenon is not

significant, given the relatively small number of people leaving government

agencies compared with the large total number of people working in government

agencies That would makes many people not think brain drain a considerable

threat.

Table 6: Result of the threats (%)

the provision of social services |

«+ | Corruption and red tape is undermining the good image of |

TT3 P age oe b 138 | 838 | 25

government agencies and public servants

TT4 | Fear for change of certain group because of losingeontrol | 6, | 76,3 | 7.5

Results of the strengths of government agencies are presented in Table 1 Among eight phrases of strength proposed, only two were confirmed, namely TMS and TM8 This

finding was consistent with the findings on opportunities and threats in the previous

sections The main strengths of government agencies are job security and development

opportunity It can be said that government agencies do not have many strengths Among the two strengths, development opportunity may be more important to high quality staff

while job security is more important to less experienced and qualified people With highly qualified people, job security is important while working for government agencies, they can still have other income generating activities.

TMI TM2, TM3, TM4, Tm6 and TM7 were not confirmed:

e TMI “Generally being perceived as having good management systems” has 47,5 %

of the respondents said “ not agree” and 48,8 % of them selected “agree” Government agencies are widely believed to have centralised, systematic

management systems After more than a decade of public administrative reform

with institutional reform is one of the four reform components, management

systems of government agencies are expected to significantly improved However,

as assess by the respondents, government agencies do not yet have good, systematic

management systems Having a good management system is one of the key success

factors for any organizations Good management systems so strongly affect how people are managed that contribute to staff retention However, this is not a

strength of government agencies according to this survey.

e TM2 “Having a centralised HRM system” has.33,8% of the respondents chose “not

agree” and 62,5 % of them chose “agree” This shows a clear recent divergence of human resource management practices between state management agencies and public service delivery agencies With the introduction of the Law of Civil Servants and more recently, the Law of Public Servants, new regulations on managing sicil servants have been developed to response to the new requirements of different civil servant groups The unification of the civil servant management system is not a strength but a weakness because it restrains the flexibility of government agencies

in managing their staff.

© TM3 “Provide highly appreciated, meaningful employment” has 33,8 % of the

respondents said “not agree” and 51,3% responded as “agree” This finding may reflect a change in perception In the past, working for the state agencies is a most

proud job because of the contribution to the country However, the recent multi sector economic development policy of the Communist Party and the State,

working for other sectors, including businesses are also appreciated The new

mentality is that how much you contribute to the country is more important than

where you work This finding may reflect this new mentality.

© TM4 “Providing jobs that have low work pressure and plenty of free time” has 63,8

% of the respondents chose “not agree” and 33.8 % chose “agree” This is quite an

unexpected finding because there is evidence that civil servants do not have long

working hours One explanation if that the work pressure in Hanoi, capital city, may be much higher than elwhere in the country.

[M6 “Having a highly potential personnel whose performance can be boosted

when the right conditions are created” has 40 % of the respondents chose “not

agree” and 55 % of them replied as “agree” This strength phrase means civil

servants has great potential if having favourable conditions The term “conditions”

should be understood in abroad sense, that may include having good salary, a healthy organizational culture, supportive working atmosphere, sufficient working

equipment etc This, however, is not perceived as a strength of government

agencies There may be two reasons for that First, civil servants are not considered

of having high quality Second, it is not believed that their performance can be

significantly increased, even when they work in a favourable condition.

TM7 “Providing jobs that have potentially high income” has 62,5 % of the

respondents replied as “not agree’ and 33,8 % of them said “agree” This finding

means the common view is that civil servants do not have substantial opportunities

to earn additional incomes This is questionable because of the fact that civil servants on average have quite high living standards Due to the sensitive nature of

the income data, biases could occur.