Tiểu luận Quản trị kinh doanh: The Relationship Between Human Resources Management Practices And Organizational Commitment In Case Of T&A Ogilvy Vietnam

VNU- UNIVERSITY OF ECONOMICS AND BUSINESSFACULTY OF BUSINESS ADMINISTRATION THE RELATIONSHIP BETWEEN HUMAN RESOURCES MANAGEMENT PRACTICES AND ORGANIZATIONAL COMMITMENT IN CASE OF T&A OGI

VNU- UNIVERSITY OF ECONOMICS AND BUSINESS

FACULTY OF BUSINESS ADMINISTRATION

THE RELATIONSHIP BETWEEN HUMAN RESOURCES MANAGEMENT PRACTICES AND ORGANIZATIONAL COMMITMENT IN CASE OF T&A OGILVY VIETNAM

BY GIANG NGUYEN NGOC QUYNH

Supervisor’s name : PhD Nguyen Ngoc ThangStudent’s name : Nguyen Ngoc Quynh Giang

Student ID : 10050274

Intake : QH2010-E QTKD

Program : International standard

Hanoi — May, 2014

During the time of preparing and completing my report, I was received

numerous support and encouragement from many people In addition, this is hereby

to express my sincere gratitude to them.

First and foremost, I would like to give my special thanks to my supervisor,

PhD Nguyen Ngoc Thang for providing me with valuable recommendations and helpful materials Despite his busy work, he spent much time on reading my draft

and helping me correct the mistakes carefully and kindly Working with him, |

gained a deeper knowledge background about how to conduct a thesis.

Second, I wish to express my gratefulness to my advisor Ms Pham Quynh Trang and other officers, who work at T&A Ogilvy Hanoi, for providing me necessary data for this report Besides, | would like to give my special thanks to

Mrs Nguyen Thi Bich Uyen, Government Relation Manager of T& A Ogilvy

Hanoi because of guiding me so much in finishing this thesis I also want to show

my appreciation to all other friends, from whom I have received many support

Last, but by no means least, my sincere thanks are devoted to University ofEconomics and Business, Vietnam National University, especially the academicboard, for providing me such a huge support to improve myself and gain helpful

experiences

Hanoi, May 14, 2014

NGUYEN NGOC QUYNH GIANG

TABLE OF CONTENT

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CHAPTER 3: ANALYSIS RESULT OF CONCEPTUAL MODEL AT T&A

3.1 An overview about Ogilvy Public Relations

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41 Stal GYAN cscs nena 434.2 The main results and contributions of the study: -+ +5: +<<++<+ 43

4.3 Suggestions to increase the relationship between HRM and organizational

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4.3.1 Improving career planning and development componenI - 44

4.3.2 Improving compensation and welfare schemes components 454.3.3 Improving recruitment and selection component -+<- 47

LIST OF FIGURE

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LIST OF TABLE

Table 2.3: Cronbach’s alpha values and internal consistency - - ‹ 17

(George & Mallery, 2003) - các 1v 19v vn TH TH TH ng 17 Table 3.1: Gender distribution among 1 5Oparticipants -<<<<2 22 Table 3.2: Reliability statistics of Career Planning scale - -<<<<<« 23 Table 3.2: Reliability statistics of Career Planning scale (conI.) -. 24

Table 3.3: Reliability statistics of Recruitment and Selection scale 24

Table 3.3: Reliability statistics of Recruitment and Selection (con(.) 25

Table 3.4: Reliability statistics of Welfare Schemes scale - ec:ceesceesceeeteeeeeeees 2 Table 3.4: Reliability statistics of Compensation scale (cont.) ‹~‹ 26

Fable 3.5: Reliability statistics of Compensation SEHÌE iis cccisccssssssoccccssersesescesseneseese 26 Table 3.5: Reliability statistics of Compensation scale (Cont.) ‹ 27

Table 3.6: Reliability statistics of Affective Commitment scale 27

Table 3.6: Reliability statistics of Affective Commitment scale (conI.) 27

Table 3.7: Reliability statistics of Normative Commitment scale - 28

Table 3.7: Reliability statistics of Normative Commitment scale (con(.) 28

Table 3.8: Reliability statistics of Continuance Commitment scale 29

Table 3.8: Reliability statistics of Continuance Commitment cale (cont.) 29

Table 3.9: Exploring factor analysis for HRM Practices scale - 3l Table 3.10: Exploring factor analysis for affective commitment scale 33

Table 3.11: Regression analysis SUITITIATY - óc 112123 nh ng ve, 35 Table 3:12: Regression analysis Sumimaty csisscccscssasonscaxsxesecrsxaemassarencsanstasviavensenns 38 Table 3.13: Repression arialysis Summary ccseiscccesssccnsxecesccecscrsusmsncacstenensewmceeacss 40 Table 3.14 The relationship between independent variables and dependent variable 42

Communication professional services rely heavily on the capabilities of their

professional employees as their main resources in delivering their services One of

the main concerns in managing these workers is the development and maintenance

of employee commitment towards achieving the organizational objectives In

achieving the desired commitment among employees, it is essential fororganizations to carefully design and implement the right mix of human resource

management (HRM) practices.

Accordingly, this research seeks to identify HRM practices that foster

organizational commitment in T&A Ogilvy Vietnam The study involves in-depth interviews involving the employees, participation observation and document analysis at the main office of both organizations The findings highlight the

importance of HRM in developing employee commitment The five main HRMstrategies to influence commitment are compensation, career planning anddevelopment, recruitment and selection, welfare schemes and employee

empowerment All these HRM practices need to be effectively linked and managed

appropriately to collectively foster the desired commitment Finally, we conclude

with limitations and implications of the findings that provide directions for future

research.

Research significance

Success in today's competitive market depends less on advantages associated with economies of scale, technology, patents but are more derived from organizational human resources and high involvement of human resource

management practices (Tahir Masood Quresh, Ayisha Akbar, Mohammad Aslam

Khan, Rauf A Sheikh and Syed Tahir Hijazi,2010) For an organization to be more

effective it should have skillful and innovative employees to work and should also

try to retain them.

There is not a single HR Practice which a company aspires to retain its

employees There are different HR Practices which a company combines to manage

its HR system They enhance internal capabilities of an organization to deal with current or future challenges to be faced by an organization Good HR practices also

energize people working in the organization The commitment and motivation built

through good HR practices can lead to hard work The culture so built can help to

create a sustainable and lasting capability of the organization to manage itself and

not only cope with the external turbulence (Aneet, 2006).

Good employees are supposed to have such characteristics as high

satisfaction with their jobs, high commitment towards the organization, highmotivation to serve the public and strong intentions to work for the organizationwillingly and devotedly ( Sangmook Kim,2004)

There are different HR Practices for the organization to adopt HR practicescontribute to the organization’s bottom line, areas such as recruitment, selection,training, development and performance appraisal which should be consistent,

integrated and strategically focused Firms need to build long-term commitment to retain their work force.

Committed employee contributes positively towards the development and growth of the organization and helps it in achieving individual and organizational

goals Therefore, Human resources management practices are highly related to thelevel of organizational commitment Thus, it is important for an organization to

examine the relationships between these two variables Thus, this study intends to

examine the relationship between the Human resources management practices and

the organizational commitment in the case of T&A Ogilvy Vietnam.

Objectives:

Namely “Relationship between human resources management practices and organizational commitment at T&A Ogilvy Vietnam”, the purpose of this thesis is

understood deeply about relationship between human resources management

practices and organizational commitment in T&A Ogilvy Use knowledge and gathered data during the internship to research, analyse and assess these activities in

Hanoi branch of T&A Ogilvy to summary the relationship and limitations then

come up with solution to improve the commitment of the staffs.

Together with this purpose, the research will answer two questions:

- How is the work motivation at T&A Ogilvy Hanoi?

- What is relationship between human resources management and

organizational commitment at T&A Ogilvy Hanoi?

Scope of research:

Subject scope: The study focuses on dependent and independent variables

that are used to measure relationship between human resources practices andorganizational commitment

Geographical scope: The study is conducted at T&A Ogilvy Hanoi

Time scope: The study occurs within 3 months to research and conduct

survey.

Research methods:

This research is a result of two-month study at Hanoi office of T&A Ogilvy.

In this period, the author observed employees working, learned from them and directly took part in some works in the Government Relation Department.

This research used quantitative method and the strategy of inquiry used wassurvey The place where survey was carried out is T&A Ogilvy Office in Hanoi

This study is conducted from March 1 to May 10, 2014 by using quantitative

method to complete the study Data collected from this research was analysed and

evaluated by SPSS in order to find out the answers for two main questions above.

Chapter 2: Theoretical framework and literature review

This chapter will give theoretical framework related to the research and itcontains main concepts about work motivation, organizational commitment and

conceptual model in this research.

Chapter 3: Research methodology

Chapter 3 will include the details of research method and the process of

survey conducting Especially, in this chapter, data or statistics will be collected and

prepared for data analysis.

Chapter 4: Current situation and analysis result from research model at T&A

Ogilvy

This chapter encompasses data analysis and shows analysis results afterusing SPSS 16.0 software to analyze Data will be tested via exploratory factoranalysis (EFA) and regression analysis

Chapter 5: Findings and suggestions

This chapter will present the conclusion, implications and recommendations

based on results and findings in chapter 4 After all, two research questions will be

answer by clarifying human resources management practices at T&A Ogilvy Hanoi

and understanding how employees are impacted with work motivation that they

received Likewise, the study will give some suggestions to enhance humanresources management practices for T&A Ogilvy Vietnam in future development

CHAPTER 1: THEORETICAL FRAMEWORKS AND LITERATURE

REVIEW

1.1 Theoretical frameworks

1.1.1 Human resources management practices

Human resource management practices (HRM) refers to the policies and

practices involved in carrying out the ‘human resource(HR)’ aspects of amanagement position including human resource planning, job analysis, recruitment,selection, orientation, compensation, performance appraisal, training and

development, and labor relations (Dessler, 2007, p 4).

HRM is composed of the policies, practices, and systems that influence

employees’ behaviour, attitude, and performance (Noe, Hollenbeck, Gerhart, &

Wright, 2007, p 5) There are four top models of HRM such as the Fombrun, Tichy,

and Devana Model of HRM, the Harvard Model of HRM, the Guest Model of

FIRM, and the Warwick Model of HRM (Bratton & Gold, 1999, pp 17-24) Out ofthese models, the Fombrun, Tichy, and Devana Model of HRM are considered to bethe first one (Aswathappa, 2008, p 18)

The present study selected the HR practices such as recruitment and

selection, career planning, employee participation, and compensation and welfareschemes The model assumed that these five key HR practices have significant

impact on organizational commitment

- Recruitment and selection:

It is the process of searching for prospective employees and stimulating andencouraging them to apply for jobs in an organization (Edwin B Flippo, 1980).Some organizations like public sector adopt centralized recruitment whereas other

organizations resort to decentralized system There can be different sources of

recruitment namely internal sources like vacancies, transfers, promotions, retiredand retrenched employees, defendants and relatives of deceased and disabledemployees or it can be external sources like education and training institutions,

search engines, employment exchanges etc.

Recruitment technically precedes selection Selection is the process of

choosing the most suitable persons out of all applicants It is the process ofmatching the qualifications of applicants with job requirements According to Dale

Yodder (1972) Selection involves Test, Interview and Medical examination of the

candidates Referrals of candidates are also checked for predicting their behaviorand performance

- Career planning and development

Career planning is the process by which one selects career goals and the path

to these goals The major focus of career planning is on assisting the employees achieve a better match between personal goals and the opportunities that are

realistically available in the organization Career programmers should notconcentrate only on career growth opportunities Practically speaking, there may not

be enough high level positions to make upward mobility a reality for a large number

of employees Hence, career-planning efforts need to pin-point and highlight thoseareas that offer psychological success instead of vertical growth

Career planning is not an event or end in itself, but a continuous process ofdeveloping human resources for achieving optimum results It must, however, benoted that individual and organizational careers are not separate and distinct Aperson who is not able to translate his career plan into action within the organization

may probably quit the job, if he has a choice Organizations, therefore, should help

employees in career planning so that both can satisfy each other’s needs

- Employee empowerment

A primary goal of employee empowerment is to give workers a greater voice

in decisions about work-related matters Their decision-making authority can range

from offering suggestions to exercising veto power over management decisions.

The benefits of empowerment are all employees view themselves as ‘Owners’

of the businesses, improved productivity, creativity and innovation Faster

decision-making and organizational learning are also considered as the benefits as well.

- Compensation

Wage, Salaries and other forms of employee’s compensation constitute a very large component of operating costs No organization can expect to attract and retain qualified and motivated employees unless it pays them fair compensation.

Employee compensation can be classified into two categories- Basic or Primary compensation and Supplementary compensation Basic pay refers pay in the form of

wages and salaries It is fixed and non-incentive payment Supplementary

compensation consists of incentive and variable payments, based on either

individual output or output of group as a whole.

- Welfare schemes

It means anything done for intellectual physical, moral and economicbetterment of employees by employers, Govt or other agencies These welfare services may be classified into Intramural and Extramural In Intramural services

are provided within establishment and in Extramural services are provided outside the establishment They help to increase employee’s productivity, morale, industrial

relation, goodwill etc

1.1.3 Organizational commitment

Organizational commitment is the individual's psychological attachment to

the organization Higher is the rate of commitment, more is the attachment towards

the organization Commitment represents something beyond mere passive loyalty to

an organization It involves an active relationship with the organization, such that

individuals are willing to give something of them in order to contribute to theorganization’s well-being It can be characterized by at least three factors: (a) astrong belief in, and acceptance of, the organization’s goals and values; (b) a willingness to exert considerable effort on behalf of the organization; and (c) a strong desire to maintain membership in the organization (Porter et al.)

Commitment is a sort of bond between employee and the organization The Organizational Commitment attitude is determined by a number of personal (age,

tenure in the organization, and dispositions such as positive or negative affectivity,

or internal or external control attributions) and organizational (the job design and

the leadership style of one’s supervisor) variables Even non-organizational factors,

such as the availability of alternatives after making the initial choice to join an

organization, will affect subsequent commitment (Fred Luthans, 2002)

According to Meyer and Allen's (1990) three-component model ofcommitment and (Removed), prior research indicated that there are three "mind

sets" which can characterize an employee's commitment to the organization:

- Affective Commitment: AC is defined as the employee's positiveemotional attachment to the organization An employee who is affectivelycommitted strongly identifies with the goals of the organization and desires to

remain a part of the organization This employee commits to the organization

because he/she "wants to"

- Continuance Commitment: The individual commits to the organization

because he/she perceives high costs of losing organizational membership, includingeconomic costs (such as pension accruals) and social costs (friendship ties with co-

workers) that would be incurred The employee remains a member of the

organization because he/she "has to"

- Normative Commitment: The individual commits to and remains with anorganization because of feelings of obligation These feelings may derive from

many sources For example, the organization may have invested resources in

training an employee who then feels a 'moral' obligation to put forth effort on thejob and stay with the organization to 'repay the debt.’ It may also reflect an

internalized norm, developed before the person joins the organization through family or other socialization processes, that one should be loyal to one's

organization The employee stays with the organization because he/she "ought to"

1.2 The relationship between human resources management practices andorganizational commitment

Some researchers have investigated individual HRM _ practices that

influence commitment These include performance management (Farndale et al.,

2011), profit-sharing schemes (Sweins and Kalmi, 2008), training and development

(Benson, 2006) and flexibility policies (Eaton, 2003) Other researchers have

investigated the impact of bundles of HRM practices on employee commitment(e.g Gould-Williams, 1999; Kinnie et al., 2005; Smeenk et al., 2006; Mendelson et

al., 2011) From a review of the studies listed in Table 1, there are various HRM practices that are found to be important in enhancing commitment In general, the individual HRM practices can be grouped into eight main areas:

- Employee resourcing (selective recruitment and selection);

- Performance management (includes career opportunities and progression)

- Training and development;

perception of work empowerment increases, organizational commitment

increases accordingly (Liu et al., 2007)

Another study in Hong Kong involving 64 construction professionalemployees conducted by Leung and Chan (2007) revealed that other important

factors influencing commitment include: 1) membership maintenance; 2) belongingness; 3) specific goal achievement; 4) project assignment and acceptance:

5) task difficulty; and 6) internalization (value congruence) Leung and Chan's(2007) study provides some useful results because of the similar context of thestudy in terms of its focus on construction professional employees and the fact

that the time period of study was during a challenging economic context in Hong

Kong (the recession period of 2002-2003)

Huselid (1995), who examined the relationship between HR practices and

corporate turnover, profitability and market value, has done the similar work Guy pare , et all (2000) produced and work on relationship between human resource

practices and I.T personal work attitude, extra role behaviors and turn over

intentions One of a source of competitive advantages for any business is its human

resource (Becker & Huselid, (1998) Guest (2002) has argued that the impact ofHRM on performance depends upon worker(|s response to HRM practices, so theimpact will move in direction of the perception of HRM practices by the employee

Mohd H R Joarder et al (2012) studied intervening effects of Affectivecommitment on the relationship between certain human resource practices andturnover intention in the context of private university in Bangladesh and reveal thatHRM Practices did have significant impact on affective commitment except jobautonomy S.G.A Smeenk, et al in 2006 examined the factors that affect

organizational commitment among Dutch university employee’s two faculties withdifferent academic identities (separatist versus hegemonist) The results empirically

give an argument which tells there can’t be same HRM policies for two different set

of identities

- Recruitment & Selection

- Training & Development

- Compensation

- Promotion & Transfer

- Welfare Schemes

- Commitment Retention of Employees

Affective commitment mediates the proposed relationship between HRM

practices and turnover intention among the private university faculty members HRM

Practices mainly Job Security, Compensation, Job Autonomy, Working Condition,Training & Development, Supervisory Support were conducted and found that

compensation, supervisory support and job security were highly significant andnegatively related to turnover intention (Mohd H R Joarder in 2011)

Komal Khalid Bhatti et al (2011) has shown that direct participation has

effect on Organization commitment has significant and positive impact among Banking Sector Employees of U.S.A and Pakistan Furthermore, research on the Impact of Human Resource Management Practices on Organizational Commitment

in the Banking Sector was conducted across permanent, full-time, and part-time employees (managers and non-managers) of five large private banks in Kuwait The HRM practices were measured on a scale for recognition, competence development,

fair rewards, and information sharing and study showed that competence development, fair rewards has impact of HRM practices on Organizationalcommitment and other factors doesn’t show an impact on organizationalcommitment (Nicole Renee Baptiste, 2008)

A K Paul in 2004 has made a research on Influence of HRM practices onorganizational commitment among software Professionals in India which revealedthat HRM _ practices such as employee-friendly work environment, career

development, development oriented appraisal, and comprehensive training show asignificant positive relationship with organizational commitment

Among Army man it was found that higher levels of Affective Commitment and Normative Commitment predicted higher leadership evaluations, whereas higher levels of Continuance Commitment were associated with lower leadership

evaluations (Angela in 2003)

The correlation between employees’ justice perceptions, perceived

organizational support, organizational commitment and intention to leave conducted

on practicing solicitors in Law firms in Hong Kong And found that procedural and

distributive justice contributed to the development of organizational commitment and affect the intention to leave while organizational commitment negatively related

to intention to leave (Raymond Loi et al, 2006)

Christopher M Lowery et al, 2002 found that Blue collar workers in United

States were more concerned on satisfaction with coworkers, satisfaction with

supervision, and satisfaction with pay, but less concerned about satisfaction withOpportunities for advancement, satisfaction with the work itself and organizational

commitment.

Among retail salesperson, rewards play a very important role in increasing the commitment level Also friendly environment, participatory approach decreases role stress and increases career commitment (William R Darden, et al 1989).

In Canadian based organizations, it was found that development-oriented, Stability-oriented, and reward-oriented human resource management practices

affects the employee commitment (lan R Gellatly et al in 2009) The research

conducted by Michel Tremblay et al in 2010 examined the role of linking HRM practices, organizational commitment and performance of Employees in Canadian Hospital The findings revealed that relationship between HRM practices and performance HRM practices can stimulate greater in-role and extra-role Supportive

HRM policies also assist to enhance org commitment.

John P Meyer in 2000 focuses on a study which examined the mechanisms

involved in observed relations between HRM practices and employee commitment

in Canada The findings revealed the positive evidence of relations between HRM

practices and commitment and shows that employee oriented HRM _ policiesenhance the commitment level towards an Organization

The research conducted by Olivier Herrbach in 2009 designed the relations

among perceived HRM practices, organizational commitment, and voluntary early

retirement in France and found that training opportunities is most favorable factor

which enhances the higher affective and high- sacrifice commitment and reducedvoluntary early retirement It was also found that flexible working conditions and

promotion of older employees to new role such as mentor or coach did not have positive effects on Organizational Commitment Steven M Sommer in1996 found

that as the organization size increased, commitment level decreased but the

commitment level in Korean firms Among Mexican Employees in U.S firms, job Satisfaction, participative decision making, and age were the factors towards

achieving organizational commitment (J Kline Harrison, 1998)

Asta Savaneviciene et al in shows that HRM practices has major impact onorganizational commitment, while engagement-enhancing HRM practices stimulate

job satisfaction which in turn improve affective commitment However Career

development opportunities have a positive effect on the Affective commitment ofemployees (Tek-Yew Lew, 2011)

Promotion, satisfaction, job characteristics, communication, leadership

satisfaction, job satisfaction, extrinsic exchange, intrinsic exchange, extrinsic

rewards, and intrinsic rewards are positively and significantly related tocommitment among employees of organizations Contrary to expectations, pay

satisfaction did not correlate significantly with commitment among employees

working in hospitals (Brian S Young, Stephen Worchel, David J Woehr, 1998)

Also, the study conducted by Taly Dvir, Naama Kass, Boas Shamir in 2004

on relationships of vision and Organizational commitment among high-tech

employees, to the emotion-focused affective commitment versus the

cognition-focused continuance commitment to the organization showed that visionformulation, content of social-oriented values, and assimilation were positivelyrelated to Affective Commitment to the organization, and unrelated to Continuance

Commitment

CHAPTER 2: METHODOLOGY

2.1 Study process

Study process consists of 4 major stages:

- Phase 1: The researcher identified the purpose of the study, topic and

the existing measures at T&A Ogilvy Vietnam Human resources management has

been measured by Compensation, Career Planning and Development, WelfareSchemes, Recruitment and Selection and Employee Empowerment with 20 items.Organizational commitment has been measured by affective, continuance and

normative components with 14 items (see Appendix) Responses to all 14 items

were made on a five-point scale:

at T&A Ogilvy Hochiminh Employees of T&A Vietnam include both local and

foreign employees who come from USA and England

They would have free time to fill in form and to give feedback when they check-out Normally, a staff takes 3 to 5 minutes to answer all questions Because the minimum number of feedback form is 150, to get a higher response rate, there

were sent several follow-ups

2.2.3 Sample size

The larger sample is the more authentic survey result will receive In other words,

sampling error should be minimized as possible and means, percentages and otherStatistics will become more reliability of population In this study, sample size is 150

Welfire Schemes Affective Commitment

Recruitment and Selection

Career Planning

Continuance Commitment

Employee Empowerment

H3.4: Career Planning has a positive influence on ContinuanceCommitment of employees.

H3.5: Employee Empowerment has a positive influence on Continuance

Commitment of employees

The positive relationship means that the higher/lower work motivation

dimension is evaluated, the higher/lower level of organizational commitment achieves.

2.2.4.1 Descriptive statistics

Descriptive statistics is common method in a lot of studies to describe the

basic features of the data and give a simple graphic about data to researcher Descriptive statistics will provide the minimum and maximum of scores whichemployees evaluate and total number of feedback There are three major features of

a single variable that stems from descriptive statistics:

- The distribution

- The central tendency

- The dispersion

In this study, the author estimates not only mean, median and standard

deviation but also the percentage of people in different ranges of standardized test

scores.

2.2.4.2 Reliability analysis

According to James Dean Brown 1996, or 1999, there are three methods forestimating reliability:

- Test — retest reliability: this method is calculating a reliability estimate

by administering a test on two occasions and computing the correlation between the

two sets of scores

- Equivalent or parallel forms reliability: it is calculating a reliabilityestimate by administering two forms of a test and calculating the correlationbetween the two sets of scores

- Internal consistency reliability: it is calculating a reliability estimatebased on a single form of a test administered on a single occasion using one of the

many available internal consistency equations.

In statistics, the author will use Cronbach’s alpha which is the most common

measure of internal consistency (‘reliability’) Laerd statistics uses Cronbach’s

alpha because data involves multiple Likert questionnaire that form a scale and the researcher wishes to determine whether the scale is reliable.

According to Tavakol et al., 2011, internal consistency describes the extent

to which all items in a test measure the same concept or construct and hence it is

connected to the inner relatedness of the items within the test.

The formula of calculating Cronbach’s alpha is followed:

k—1 62

Where k is one of the number of components,(k — items), 52 is the variance of

the total test scores, 6, is the variance of component i for the current sample of persons.

In general, alpha coefficient ranges in value from 0 to | and it is better thanwhen it is greater than 0.7 If the value is equal or larger than 0.6 will be accepted

If the value is less than 0.6, the researcher should reconsider items and makes it

more than 0.6

Table 2.3: Cronbach’s alpha values and internal consistency

(George & Mallery, 2003)

2.2.4.3 Factor analysis

Factor analysis is a statistical method used to study the dimensionality of a set

of variables In factor analysis, latent variables represent unobserved constructs and arere‘erred to as factors or dimensions The major purpose of factor analysis discovers

factors that effect on the nature of the independent variable even though

independent variables are not measured directly

The process of analyzing factor of the study:

- The correlation matrix: KMO uses to test factor model whether

appropriate According to Dr P Narayana Reddy, KMO (Kaiser-Meyer-Olkin)measure of sampling adequacy is an index used to examine the appropriateness offactor analysis If the index is high values (between 0.5 and 1.0) so it indicatesfactor analysis to be appropriate and if the index is less than 0.5, factor analysis maynot be appropriate.(Dr P Narayana Reddy, Dr G V R K Acharyulu, 2009)

- Factor extraction: the goal of factor extraction is to identify factors and theauthor will use principle components analysis Principle components analysis is torecommend when the primary concern is to determine the minimum number of

factors that will account for maximum variance in the data for use in subsequent

multivariate analysis (Dr P Narayana Reddy, Dr G V R K Acharyulu, 2009).

- Factor rotation: in this stage, the author will use Varimax rotation which is

the common method to rotate factors and minimizes the number variables with high

loadings on factors

2.2.4.4 Regression analysis

According to Ragsdale, 2007, regression analysis is used for analyzing the

relationship between a real value of dependent variable and one or more

independent variables Besides, analyzing regression will help the author identify

how independent variables impact on dependent variables and predict the change in

dependent variables when there is any change in independent variables.

The first step of regression analysis is to test linearity of the relationshipbetween dependent and independent variables It also shows Pearson correlation intable of correlations

In the second step, it is necessary to check the correlation among variables

and variance inflation factor (VIF) which accept variable values to be lower than

10 The lower VIF value, the more reliable variable values are.

In the final step, the most important of regression analysis is to find the

coefficient or determination and error term in the formula of regression model It is

in formula of calculating organizational commitment and managers will use it to

give development strategies In general, the formula of regression analysis isbellowed:

Y = bo + bX, + b;X; + -+ Dy Xy + €Where:

- Y = Scores on the organizational commitment.

- X,,X>, ,X,% = Scores on the attitude toward 2 dimensions.

- by, bp, ,by = Regression coefficient of independent variables.

- by = An intercept.

- ¢€= Anerror term.

In conclusion, by using 3 models to test and research, the research will find

out the differences between the actual perceptions of employees about HRM

practices and organizational commitment at T&A Ogilvy.

CHAPTER 3: ANALYSIS RESULT OF CONCEPTUAL MODEL AT T&A

OGILVY HANOI

3.1 An overview about Ogilvy Public Relations Worldwide

Ogilvy Public Relations Worldwide (Ogilvy PR) is a leading global

marketing communications firm, with offices in more than 60 cities around the

world, including 25 in Asia Pacific Ogilvy PR provides strategic public relations

counsel to a wide variety of clients across its specialized offerings such as: 360°

Digital Influence; Ogilvy Health; Ogilvy Earth; Ogilvy Financial; Ogilvy Impact

Employee Communications; consumer marketing; corporate reputation; crisis

management; technology; public affairs; and social marketing Ogilvy Public

Relations Worldwide is part of the WPP Group, one of the world’s largest

communications services organizations (NASDAQ: WPPGY, www.wpp.com)

Ogilvy Public Relations Worldwide has specialties in Corporate

Communications, Brand & Marketing, Behavior Change Communications andSocial Marketing, Media Relations, Sport Marketing, Government relations &

Public Affairs, Corporate Social Responsibility, Crisis Management, Internal

Communications

3.1.1 T&A Ogilvy Vietnam Overview

T&A Ogilvy started out as T&A Communications, one of the first PRagencies to set up shop in Vietnam in 1995 In fourteen years, the company hasgrown to become one of the country’s leading public relations firms, with a branchoffice in HCMC, a work force of 57 professionals and a client base comprised ofmajor multinational and leading local brands, including Amway, APC, Boeing,Best Carings, Canon, Cartier, France Telecom, Gamuda Land, GE, NestleVietnam, Standard Chartered Bank, SAP, Temasek Holdings, Tata Steel, VietJet

Air, and Yahoo.

In July 2009, Ogilvy & Mather, a WPP company, announced its acquisition

of a majority stake in Vietnamese public relations firm T&A Communications to

turn the local business into a joint venture — T&A Ogilvy T&A Ogilvy is now part

of the growing Ogilvy & Mather Group in Vietnam that now includes Ogilvy &

Mather Advertising, Ogilvy Public Relations, Ogilvy One, Ogilvy Action and

Redworks

3.1.2 Specialties

Corporate Communications, Brand & Marketing, Behavior Change

Communications and Social Marketing, Media Relations, Sport Marketing,Government relations & Public Affairs, Corporate Social Responsibility, CrisisManagement, Internal Communications

3.1.3 T&A Ogilvy Office:

There are 2 Office of T&A Ogilvy which are located in 2 biggest cities:

> Hanoi:

3rd Floor, BIDV Tower

194 Tran Quang Khai, Hoan Kiem, Ha Noi, Vietnam

> HCMC

Centec Tower 12th Floor

72-74 Nguyen Thi Minh Khai Street

District 3 Ho Chi Minh City

3.2 Survey results and research analysis

3.2.1 Descriptive data analysis

Among 170 questionnaires provided to employees, the researcher collected

151 responses After inputting data and screening questionnaires, there were 150

valid samples as in the table above and | invalid sample Data analysis excluded |invalid sample because participant did not provide sufficient information or theiranswers were the same choice for all questions

From Table 3.2 above, it can be seen that 150 participants who answered questionnaires are not distributed equally about gender The number of females is a much higher than the number of males There are 115 females and 45 males give

their responses back which correspond to 76.7% and 23.3%, respectively

Figure 3.1: Age distribution among 150 participants

@22-25 25-35 Above 35

In survey sample, the majority participant group has age ranging from 25 to

35 years old They stand at 83 people or 55% of the total responses The second largest group is in age of 22 — 25 years old The quantity of this group is 52 people

which represent 35% of total The group in age above 35 years old has small

proportion of 10% It can be seen that, most of participants are young people with

age from 25 to 35 years old.

Figure 3.2: Education level

PhD

As the chart shows, a great deal of participants is in college and university

level It account for a largest ratio of 56.3% with 85 people Participants who have

Master degree and higher education stand for a smaller volume of 49 and 16 people.These numbers correspond to 33.3 % and 10.4%, respectively

3.2.2 Reliability analysis

- Reliability of Career Planning and Development scale:

Table 3.2: Reliability statistics of Career Planning scale

Corrected Item- Cronbach's

Total Alpha if Item

Correlation Deleted

.694 a

.694 a

a The value is negative due to a negative average covariance among items This

violates reliability model assumptions You may want to check item coding

Table 3.2: Reliability statistics of Career Planning scale (cont.)

813

Using SPSS 16.0 software, each dimension was analysed In the table of

reliability, it is necessary to consider two values: Corrected item total correlation

and Alpha In statistics, Corrected item total correlation must be greater than 0.3and alpha must higher than 0.6

After testing 4 items that are cl.I, cl.2, Cronbach’s Alpha value is 0.813which is greater than 0.6 Moreover, two items which have the value of correcteditem total correlation are greater than 0.3 that is 0.694 for both cl.1, c1.2.Thus; theyare acceptable after testing reliability of CP score

In short, Career planning scale includes 2 items which are cl.1, cl.2 after

testing

- Reliability of Recruitment and Selection scale:

Table 3.3: Reliability statistics of Recruitment and Selection scale

Item-Total Statistics

Corrected Item- Cronbach'sScale Mean if Scale Variance

Total Alpha if Item

Item Deleted if Item Deleted

Correlation Deleted

g2] 7.20 1.651 547 636

c2.2 7.08 1.686 547 639

c2.3 | 7.41 1.266 563 629

Table 3.3: Reliability statistics of Recruitment and Selection (cont.)

Reliability Statistics

As analysis result is shown in table, Cronbach’s alpha value is 0.723 and this

value is higher than 0.6 therefore this value is acceptable for reliability analysis ofRecruitment and Selection scale.

In conclusion, values of corrected item total correlation of four itemsc2.1,c2.2, c2.3 are greater than 0.3 so they are acceptable and will be used toanalyse in the next step

- Reliability of Welfare Schemes scale:

Table 3.4: Reliability statistics of Welfare Schemes scale

Item-Total Statistics

Corrected Item- Cronbach's

Scale Mean if Scale Variance

Total Alpha if Item

Item Deleted if Item Deleted

Correlation Deleted |

c3 6.17 2.691 853 941

c3.2 6.12 2.670 874 926

c3.3 | 6.00 | 2.242 933 881 |