Mai Anh Key words: Human Resource Management, HR, management, practices, banking, Vietnam, improvement, Joint Stock Commercial Bank for Investment and Development of Vietnam, BIDV, EFA,
INTRODUCTION
B ACKGROUND AND RATIONALE
Vietnam, one of the first communist countries to embrace a free market by joining the Association of Southeast Asian Nations (ASEAN) after the Đổi Mới reforms in 1986, has experienced significant social, economic, and environmental transformations The banking industry, recognized as the backbone of economic growth and a key indicator of a nation's financial health, plays a crucial role in Vietnam's rapid development To achieve international recognition, the sector must integrate advanced technologies, enhance credit management, diversify products, and strengthen regulations and human resources According to the International Monetary Fund (2018), Vietnam's banking sector contributed 137.43% to GDP in 2017, prompting the government to focus on developing banking organizations This initiative aims to improve service quality, boost competitive advantages, and attract investment in the country.
Banking is fundamentally a "People Business," where the productivity and commitment of staff significantly impact overall performance In a competitive landscape, banks must carve out unique niches to enhance customer satisfaction, as their survival hinges on meeting customer expectations Effective Human Resource Management is crucial, as it focuses on the workforce that embodies the bank's core values By prioritizing the management of human resources, banks can attract and retain specific customer segments, ultimately determining their success in the industry.
In the past twenty years, there has been significant growth in interest from both academics and practitioners in strategic human resource management (SHRM), particularly concerning the evolving needs of HRM practices within organizations SHRM emphasizes the interdependence and alignment of essential organizational elements, including structure, strategy, personnel, management style, and human resource systems such as recruitment, selection, performance appraisal, training, development, induction, and reward management, as well as organizational procedures and culture (Boxall and Purcell, 2003).
In today's competitive landscape, organizations are increasingly focused on enhancing business performance and achieving goals through innovative human resource management (HRM) practices that promote sustained high performance and job satisfaction HRM has emerged as a crucial management philosophy, significantly contributing to an organization's competitive advantage The modern perspective recognizes employees as vital human capital, emphasizing that every product or service relies on human intellect, effort, and labor As a fundamental resource, humans are essential for the creation and delivery of goods and services Numerous studies have demonstrated a direct correlation between effective human capital management practices and improved employee performance, ultimately linking these practices to enhanced organizational performance.
Human Resource Management (HRM) focuses on planning, organizing, directing, and controlling personnel functions to enhance organizational development According to Elarabi & Johari (2014), HRM is a process aimed at improving employee skills and fostering communication and cooperation Caliskan (2010) highlights that effective HRM practices positively influence organizational innovation, strategy implementation, job performance, financial returns, conflict management, and sustainable competitive advantage Among the five Ms of management—men, money, machines, materials, and methods—HRM specifically addresses the first M, emphasizing the complexity of managing the workforce Recognizing that "every man is different," HRM is crucial for leveraging human potential to optimize the other Ms, underscoring its significance in overall management.
In today's economy, where intangible assets like human capital are crucial, many managers recognize that "people are our most important asset." The undeniable role of human capital in enhancing performance, developing employee talents, and fostering cooperation is driving firms to implement measurement systems for better resource management As employees are increasingly viewed as key to achieving competitive advantage, the significance of Human Resource Management (HRM) is on the rise With evolving economic challenges, organizations are realizing that human resources are an invaluable strength for achieving sustainable competitive advantage Thus, the effectiveness of HR functions has become more critical than ever for reaching organizational goals.
Business organizations are increasingly focused on managing their human capital to sustain a competitive edge According to Mello (2011), managers at various levels recognize that a key source of competitive advantage lies in effective systems and processes for managing human talent Consequently, these advancements in human resource management (HRM) have transformed the roles of HR professionals and the overall approach to employee management within organizations.
In Vietnam, managers encounter significant human resource challenges influenced by local culture, organizational practices, and political structures The country attracts investors with its low Occupational Health and Safety (OH&S) standards and labor costs, which are approximately 30% lower than in some regions of China Additionally, the limited presence of effective trade unions in many organizations has contributed to inadequate OH&S measures.
This study enhances human resource management practices by presenting findings and solutions derived from the author's observations at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) It investigates the effectiveness of various HRM practices, including HR planning, staffing, compensation, training and development, and performance appraisal, on organizational performance The research utilizes data collected from reliable sources in 2020.
R ESEARCH OBJECTIVES
This article provides a comprehensive overview of Human Resource Management (HRM) and its impact on organizational performance It aims to explore HRM practices specifically within the context of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Additionally, the article seeks to identify key facts, challenges, and potential solutions related to HRM at BIDV, highlighting the importance of effective HRM in enhancing overall business outcomes.
S UBJECTS AND SCOPE OF RESEARCH
Subjects: HRM practices and its effects on banking organization
Scope of research:HRM performance
Geographical Scope: The organization name is Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Hai Ba Trung branch
Duration Scope: The essay was conducted in the period of 2020 at location of the organization mentioned above.
R ESEARCH METHODS
This study utilized survey questions from the thesis "New Strategy for Human Resource Management Adapting to Organizational Reconstruction/Restructuring" by Ms Mai Anh from ESSEC School of Management, France, to gather insights on HRM practices at BIDV.
In this paper, the author employed a quantitative methodology that utilized surveys and interviews This approach focuses on objective measurements and involves the statistical, mathematical, or numerical analysis of data gathered through polls, questionnaires, and surveys.
All survey‘s questions are forms in English, but included Vietnamese translation, related to issues and practical challenge of HRM practices‘ category (such as recruitment, compensation, training and employment relations)
The study employs a comprehensive methodology that involves a literature review to establish a conceptual foundation and theoretical framework, highlighting the connection between human capital management practices and both employee and organizational performance Additionally, it presents a chronological overview of empirical research focused on human resource development practices within the banking sector.
R ESEARCH GAPS
Research on Human Resource Management (HRM) practices in domestic contexts is limited, with few studies published in scientific journals or dissertations Existing research primarily analyzes concepts and factors influencing HRM quality, while also proposing modern management models for future HR activities For instance, Le Thu Huong's 2018 study, "Impacts of Human Resource Management Practices on Firms' Performance: The Case of MACHICON," highlights the human factor's role in enhancing creativity and service delivery in the restaurant industry However, it lacks a comprehensive scientific approach to HRM practices Similarly, Pham Thi Nhung's 2012 paper, "Attracting Human Resources through Human Resource Management – The Case of PetroVietnam University," offers strategic and practical solutions to attract high-quality talent and boost competitiveness at PVU Her recommendations emphasize the need for ongoing adjustments in HRM activities to align with organizational strategies and effectively mobilize resources.
Kamoche (2001) conducted exploratory interviews to examine the nature of Human Resource Management (HRM) in Vietnam, involving senior executives from four organizations The study revealed that recruitment often relied on long-term relationships and interpersonal trust, with candidates typically identified through "word of mouth" or referrals from influential individuals within the organization Notably, only one of the four organizations implemented performance reviews, measuring employee performance against predetermined criteria and targets.
In a 2016 study by Ameen Ahmed Mustafi, T A Rahman, and Nusrat Jahan, the researchers aimed to investigate human resource management (HRM) practices within the private commercial banking sector in Bangladesh The study utilized data envelopment analysis to assess bank performance and evaluated key HRM activities, including job analysis, human resource planning, talent acquisition, and training.
The study examines the HRM practices, including development, performance appraisal, compensation, and industrial relations, of nine selected commercial banks Findings indicate that although local banks demonstrate a satisfactory operational performance, there is a critical need for enhancement in their HRM practices to effectively navigate modernization and increasing competition within the banking sector.
Every organization requires a unique Human Resource Management (HRM) system tailored to its core competencies for survival and sustainability Various external factors, including culture, economy, legal issues, and gender, influence HRM practices However, this research specifically examines the internal factors that directly impact HRM and employee performance.
LITERATURE REVIEW
F RAMEWORK OF H UMAN R ESOURCE M ANAGEMENT
2.1.1 Definition of human resource management
Human resources is the set of the people who make up the workforce of an organization, business sector, industry, or economy (Heery and Noon, 2017, p
Human capital refers to the knowledge and skills embodied by individuals, often described using terms like manpower, labor, personnel, or simply people The human resources (HR) department within an organization is responsible for managing various employment aspects, including compliance with labor laws, administration of employee benefits, organization of employee files for future reference, and overseeing recruitment (or talent acquisition) and employee offboarding processes.
Human resource management (HRM) is essential for achieving organizational goals, as it involves utilizing individuals effectively (Mondy and Martocchio, 2016) Managers at all levels must prioritize HRM, as they rely on the efforts of others to accomplish tasks Those involved in HR face numerous challenges, including a dynamic workforce, government regulations, technological advancements, and economic fluctuations Additionally, global competition compels organizations, both large and small, to focus on cost efficiency and productivity Given the critical importance of human resource issues, upper management must devote significant attention to these matters.
Human Resource Management (HRM) encompasses the essential policies and practices necessary for managing human resources within an organization Key functions include employee staffing, staff development, performance management, compensation management, and fostering employee participation in decision-making processes.
Human Resource Management (HRM) practices are essential for achieving organizational goals and gaining a competitive edge, as they help assign duties, promote knowledge sharing, and facilitate internal communication These practices also create training opportunities and support recruitment and retention efforts By leveraging the resource-based view (RBV), organizations recognize employees as their most valuable asset, enabling sustainable organizational performance (SOP) through effective HRM and innovation Research highlights the importance of VRIN qualities—valuable, rare, imperfectly imitable, and non-substitutable—of human resources in contributing to SOP Consequently, management is increasingly focused on implementing HRM practices to enhance employee performance and align with organizational objectives.
HRM practices play a dual role in supporting Standard Operating Procedures (SOP) by managing work organization and fostering creativity On one hand, these practices are essential for structuring the organization and managing personnel through administrative tasks and procedural development (Boxall and Purcell, 2015) On the other hand, effective HRM implementations can empower employees, encouraging innovative processes and ideas (Bratton and Gold, 1999) Thus, HRM is not only about managing business structures but also about unlocking the creative potential of staff, paving the way for innovation and an innovation-driven approach to SOP (Mondy and Martocchio, 2016).
2.1.2 Functions of human resource management
Effective human resource management (HRM) relies on an integrated HRM system that encompasses six key functional areas: staffing, human resource development, performance management, compensation, safety and health, and employee and labor relations These interconnected functions are essential for successful HRM practices.
Staffing is a critical organizational process that guarantees the right number of skilled employees are in the appropriate roles at the right time to meet business goals This process encompasses job analysis, human resource planning, recruitment, and selection, all essential components for effective staffing.
Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization (Fine and Cronshaw,
Human resource management (HRM) significantly influences various functions, including planning, recruitment, and selection Human resource planning involves systematically aligning the internal and external workforce with anticipated job openings over a specific timeframe This process provides essential data that informs recruitment efforts, which aim to attract qualified candidates in a timely manner Selection follows recruitment, focusing on identifying the best-suited individual for a specific role within the organization Effectively managing these staffing functions is crucial for an organization to achieve its mission.
Performance management is a strategic, goal-oriented approach aimed at enhancing employee, team, and organizational productivity It involves a formal performance appraisal system that evaluates individual and team contributions, allowing employees to leverage their strengths and address weaknesses This process not only fosters employee satisfaction but also boosts overall productivity within the organization.
Human resource development is a key function of human resource management (HRM) that encompasses training, career planning, organizational development, and performance management Training focuses on equipping employees with the necessary skills for their current roles, while development emphasizes long-term learning that prepares them for future opportunities.
Organization development (OD) is planned and systematic attempts to change the organization (corporate culture), typically to a more behavioral environment
Organizational Development (OD) encompasses the entire system of a company or plant, focusing on enhancing overall performance through various methods (Rothwell et al., 2017, pp 23–25) Additionally, career planning is a continuous process in which individuals establish their career objectives and determine the strategies to reach those goals.
Career development is a strategic initiative employed by organizations to guarantee the availability of qualified individuals when necessary It emphasizes the interconnectedness of individual career paths and organizational requirements, highlighting that both elements are integral to each other.
Organizations should assist employees in career planning so the needs of both can be satisfied
The concept of a fair day's pay has long been a topic of debate among management, unions, and workers An effective compensation system ensures that employees receive fair and adequate rewards for their contributions toward achieving organizational goals In this context, compensation encompasses the total rewards given to employees in exchange for their services, which may include various forms of recognition and benefits.
Direct financial compensation refers to the wages, salaries, commissions, and bonuses that an employee receives In contrast, indirect financial compensation encompasses employee benefits such as paid vacations, sick leave, holidays, and medical insurance, which are not part of direct pay Additionally, nonfinancial compensation includes the job satisfaction and positive experiences derived from the work environment, contributing to an employee's overall well-being.
Businesses are legally obligated to recognize and engage in good faith bargaining with a union if their employees choose union representation While this was once a standard practice for many employers, a significant number of firms today prefer to operate without unions When a labor union represents employees, the human resource function is known as labor relations, focusing on collective bargaining Additionally, internal employee relations involve HRM activities related to employee movements within the organization, including promotions, demotions, terminations, and resignations.
I MPACT OF HRM ON WORKERS ’ PERFORMANCE
Research indicates that the effectiveness of Human Resource Management (HRM) on organizational performance is significantly influenced by employees' perceptions and responses to HRM practices (Guest, 2002) A skilled, committed, and engaged workforce is essential for successfully executing business strategies (Wood, 1999; Guest, 2002) Furthermore, the behavior of employees is directly affected by HRM initiatives, which in turn influences their effectiveness (Huselid, 1995) Additionally, Patterson et al (1997) highlight that HR practices related to selection and training play a crucial role in enhancing performance by equipping employees with the necessary skills, demonstrating a strong correlation between HR practices and productivity outcomes.
Huselid (1995) emphasized that implementing best practices in employee selection enhances the quality of skills within an organization, thereby enriching its skills inventory He also highlighted the critical role of training as a complement to selection practices, which aligns organizational culture and employee behavior for improved outcomes Cooke (2000) identified efficiency, effectiveness, competitiveness, and productivity as key performance components, asserting that training is essential for developing the knowledge and skills necessary to boost individual performance Singh (2004) noted that, particularly in our cultural context, compensation serves as a mechanism to align employee behavior with the firm’s business strategy.
Career planning is a tool that aligns strategy with future HR needs and encourages employee to strive for his personal development (William et al, 1996)
Increasing employee participation enhances productivity by fostering greater commitment among staff Financial participation schemes prove more advantageous for organizations than their associated costs (Summers & Hyman, 2005) Additionally, the implementation of best HR practices is closely linked to improved productivity, particularly in high-growth industries (Datta et al.).
Wright et al (2003) argue that employees are more likely to exert discretionary effort when a robust performance management system is in place, particularly one that is supported by a compensation system aligned with performance metrics A well-defined job encompasses both job description and job specification, clearly detailing the duties, responsibilities, working conditions, and required skills for the role (Qureshi M Tahir, 2006) Ichniowski (1995) found that complementary HR practices significantly impact worker productivity in the steel industry Numerous studies have confirmed a significant relationship between HR practices and employee outcomes (Sels, 2006).
Research by Collins (2005) highlights that effective HR practices significantly influence employee outcomes in small businesses Additionally, a study by Mr Tahir Masood Qureshi (2006) on the impact of HR practices on organizational performance in Pakistan supports the notion that HR practice systems enhance organizational performance through improved employee outcomes.
I MPACT OF HRM ON ORGANIZATION ’ S PERFORMANCE
Research indicates that Human Resource Management (HRM) is crucial in shaping and executing organizational strategies According to Myloni et al (2004), HRM should be integrated into the firm's overall strategic framework Consequently, the growing significance of HRM in strategic planning has positioned HR managers as key decision-makers in both the formulation and implementation of these strategies.
Most research suggests that HRM is vital in order for an 30rganization to achieve 30rganizational success (Barney, 1991; Jackson & Schuler, 2000; Pfeffer,
Human Resource Management (HRM) is essential for organizations to achieve success and maintain a competitive advantage Research in strategic HRM highlights that effective HRM practices and systems play a crucial role in fostering sustained competitive advantages for firms Therefore, it is imperative for organizations to implement HRM practices that effectively leverage their workforce.
Numerous studies have demonstrated the positive influence of Human Resource Management (HRM) on organizational performance Research by Becker and Gerhart (1996), Becker and Huselid (1998), and Dyer & Reeves (1995) indicates that companies aligning their HRM practices with business strategies achieve superior results MacDuffie (1995) examined global auto assembly plants and found a correlation between specific HRM practices and productivity and quality Additionally, Delery and Doty (1996) established significant links between HRM practices and accounting profits in the banking sector Youndt et al (1996) identified that certain combinations of HRM practices are associated with improved operational performance in manufacturing firms.
Recent research by Lee & Lee (2007) identified six key HRM practices that enhance business performance, including training and development, teamwork, compensation/incentives, HR planning, performance appraisal, and employee security Among these, training and development, compensation/incentives, and HR planning were found to significantly impact employee productivity, product quality, and organizational flexibility Additional studies (Chang and Chen, 2002; Ahmad and Schroeder, 2003; Kuo, 2004; Sang, 2005) further support the notion that specific HRM practices are closely linked to operational performance and quality outcomes This evidence underscores the importance of effective HRM practices in driving positive business performance.
H UMAN RESOURCE MANAGEMENT IN BANKING INDUSTRY
The modern banking industry consists of state-licensed financial institutions that provide essential banking services, including the storage, transfer, and management of wealth, as well as credit extension and risk management The range of financial services offered has evolved significantly over time, influenced by regulatory changes, economic developments, and advancements in information and communication technologies.
Banks serve as crucial financial intermediaries, facilitating the transfer of funds from savers to users, which supports economic activity By issuing tradable claims, such as bank deposits, they enhance the payments system's flexibility These deposits enable personal credit for consumers and short-term credit for businesses, aiding liquidity management and promoting consumption and commerce Banks pool funds from numerous small savers to provide larger loans for significant investments, such as securities underwriting and real estate financing Their expertise in risk assessment allows them to monitor borrowers and diversify investments, minimizing risks and optimizing fund allocation Additionally, banks extend international trade credit, fostering global commerce, and lend to other banks during liquidity pressures to stabilize the financial system and maintain economic stability.
Banks manage highly leveraged portfolios of financial assets and liabilities to fulfill their various functions, making effective portfolio management crucial for deposit banks that play a vital role in commercial credit and payment facilitation With bank capital representing only a small fraction of total assets, solvency is particularly susceptible to credit, market, and liquidity risks Factors such as an increase in non-performing loans, a decline in asset market prices, or insufficient cash reserves that necessitate distress asset sales can threaten a bank's solvency if they occur too quickly for effective loss management.
2.4.3 Relationship between human resource management and banking industry
The banking industry serves as a crucial backbone for economic growth, functioning as a key component of the global financial sector Recognized as a hub and barometer of a country's financial system, the banking sector plays an essential role in economic development and is one of the oldest sectors in the economy.
To achieve international recognition, the banking industry must integrate advanced technologies, effective credit management, treasury oversight, product diversification, and stringent internal and external regulations, while prioritizing human resources The success of banks largely hinges on leveraging their primary asset—human resources—amidst a dynamic economic landscape As a service-oriented sector, employee productivity and commitment directly influence overall bank performance The close relationship between employees and customers means that losing skilled staff can jeopardize valuable client connections Therefore, the banking industry emphasizes employee retention at all levels, prompting the implementation of robust HR systems, policies, and practices This renewed focus on human capital management is recognized as essential for future success.
For an organization to operate smoothly and effectively, the most valuable asset it requires is its human resources (Mosadragh, 2003) Skilled and competent personnel play a crucial role in achieving the organization's goals and objectives The success of an organization relies fundamentally on three key factors: hard work, loyalty, and the active involvement of its staff members.
The successful operation of a bank is hindered by a shortage of skilled manpower, making effective Human Resource Management (HRM) crucial for survival This scarcity of quality HR resources necessitates a comprehensive overhaul of HRM practices within banks To thrive, Indian commercial banks must prioritize recruitment, selection, training, development, and compensation, ensuring that employees feel valued and motivated, ultimately enhancing their productivity and job satisfaction.
To retain skilled and talented employees, banks are increasingly focusing on committed individuals, as research shows that effective HRM practices enhance employee commitment Recognizing their workforce as a unique talent pool, banks understand that leveraging these employees can drive organizational success HRM practices play a vital role in influencing employee skills and motivation, which are essential for achieving organizational goals and maintaining a competitive advantage These practices involve managing human resources through various activities and policies aimed at planning, organizing, developing, and utilizing employees effectively to meet the organization's objectives.
In her 2009 Ph.D thesis, Mann evaluated the recruitment, selection, training, and wage policies of small-scale industries (SSIs) in Punjab, using a sample of 429 units She found that recruitment and selection processes typically occurred at the factory gate and through agents, highlighting the need for specialized training for HRM personnel Additionally, Mann noted that employees perceived wage policies to vary significantly among different SSIs, with wage-related issues being a major source of conflict within these organizations She emphasized the necessity for increased awareness of HRM practices in SSIs and recommended specific training programs to enhance employee skills.
In their 2011 research paper, Zulfqar Bowra and Kabir Niazi examined the impact of human resource practices on employee perceived performance within Pakistan's banking sector They discovered a positive and significant relationship between HR practices and employee performance, emphasizing the importance for banks—both private and public—to recognize how their HR strategies influence overall performance Numerous studies have highlighted various HR organizing practices that significantly affect employee performance.
A study by Selvaraj (2009) indicates that private banks outperform public sector banks in human resource management, customer focus, and top management commitment Additionally, there are notable differences between the two sectors in terms of compensation structures, working environments, technology, growth opportunities, and job security Public sector banks tend to have lower pay differentials, reward long-term tenure, and offer a higher base pay, while private sector banks feature larger pay differentials, fewer tenure rewards, and a pay-for-performance model (D'Souza, 2002).
Organizations that adopt innovative HRM practices with commitment gain a competitive edge, as these practices positively influence key factors such as competitive advantage, job satisfaction, financial performance, employee turnover, service quality, and employee commitment, ultimately enhancing overall corporate performance.
In a study conducted by Bowra and Sharif (2012), the focus was on exploring the relationship between employee-perceived performance and various human resource (HR) practices, including compensation, performance evaluation, and promotion strategies, within Pakistan's banking sector.
A study involving 235 banking personnel utilized a personally administered questionnaire to examine the impact of HR practices on employees' perceived performance The analysis, conducted using Spearman's correlation matrix and multiple regression, revealed a positive and significant relationship between employee perceived performance and HR practices Notably, the regression results highlighted that performance evaluation and promotion practices significantly influence perceived performance, while compensation practices did not show a significant effect.
Mellacheruvu and Krishnamacharyulu (2008) highlighted significant issues in public sector banks, noting inadequate recruitment and a shortage of employees They emphasized the neglect of training programs and called for a reform of the employee appraisal system to ensure it is more objective and aligned with bank objectives Their findings revealed that the rigid reward and promotion systems lacked a connection to employee performance, leading to lower compensation compared to other organizations, which in turn affected retention and succession planning To address these challenges, they recommended granting banks the autonomy to recruit and implement faster promotions for high-performing employees, advocating for a performance-based promotion and reward system to foster a strong service culture through effective HRD programs.
METHODOLOGY
C ONCEPT OF QUANTITATIVE RESEARCH METHOD
Quantitative research is a systematic approach that involves collecting quantifiable data through methods such as online surveys, polls, and questionnaires This research aims to gather information from both existing and potential customers, allowing researchers to analyze numerical results to forecast the future of products or services and implement necessary changes Primarily utilized in social sciences, quantitative research employs statistical techniques to derive objective and unbiased insights from larger samples that represent the entire population By applying mathematical frameworks, researchers can ensure that their findings are logical and thorough, ultimately contributing to informed decision-making (Elsbach and Kramer, 2015).
Primary quantitative research is the most prevalent method for conducting market research, characterized by the researcher’s direct collection of data rather than relying on previously gathered information This approach can be divided into three distinct tracks and involves various methods, including Survey Research, Correlational Research, Casual-comparative Research, and Experimental Research (Jupp, 2006).
Survey research is a crucial component of quantitative research methodologies, enabling organizations to gather insights from customers about their products and services through various formats, including online polls and paper questionnaires By conducting surveys, organizations can pose multiple questions to a diverse sample of respondents, analyze the collected data, and generate numerical results that guide decision-making This research method allows for targeted analysis of specific audience groups or comparative studies across different demographics, provided that respondents are randomly selected to ensure accuracy While traditional survey methods included face-to-face interviews and phone calls, the rise of online platforms like email and social media has expanded survey research into digital realms Researchers can choose between cross-sectional and longitudinal surveys based on their time constraints and data requirements, making survey research a versatile tool for understanding customer perceptions and market trends.
Correlation research aims to identify the relationship between two closely related entities and how one influences the other, highlighting observable changes This quantitative research method requires at least two distinct groups to effectively analyze naturally occurring relationships By utilizing mathematical analysis, researchers can identify patterns, relationships, and trends among variables in their original context The impact of one variable on another is assessed, along with any changes in their relationship While researchers may manipulate one variable to achieve specific outcomes, it is crucial to avoid drawing definitive conclusions solely based on correlational research, as correlation does not imply causation.
Causal-comparative research, also known as quasi-experimental research, focuses on comparing variables to establish cause-and-effect relationships In this method, researchers observe the impact of an independent variable on a dependent variable without manipulation, relying on naturally occurring groups It is essential to consider all influencing factors when drawing conclusions, as the relationship between variables is complex This research approach extends beyond analyzing two variables, examining how multiple groups respond to changes Statistical analysis plays a crucial role in clearly presenting the results of this quantitative research method (Mooi and Sarstedt, 2011).
Experimental research, often referred to as true experimentation, is fundamentally grounded in a theory that has yet to be validated This research method involves testing one or more unproven theories through analysis aimed at either supporting or refuting the hypothesis Commonly utilized in the natural sciences, experimental research plays a crucial role in advancing scientific knowledge (Mooi and Sarstedt, 2011).
Data collection for primary quantitative research involves sampling methods and the use of surveys and polls, followed by data analysis to derive statistical inferences related to research objectives It is crucial to assess the differences between planned and executed methodologies and to choose appropriate statistical analysis methods, such as SWOT or cross-tabulation Secondary quantitative research utilizes existing data from sources like the internet, government resources, and libraries to enhance the effectiveness of research This method validates primary data and strengthens or challenges previous findings Popular sources for secondary data include online platforms, reliable government reports, public libraries, educational institution publications, and local media, which provide valuable insights into various topics such as economic developments and demographic segmentation.
R ESEARCH METHODS AND DATA COLLECTION
The sample size for the study was determined by the requirements of Exploratory Factor Analysis (EFA) and multivariate regression, ensuring it met the criteria outlined in two specific formulas.
- Formula 1: Sample size ≥ 5 * m (m is the number of questions in the survey)
- Formula 2: sample size ≥ 50 + 8*n (n is the number of independent factors) According to the formula above, the numer of cases are 475
Sampling: In this study, the respondent was randomly selected among the total number of individual employee working at BIDV
The author utilized a numbered list of BIDV staff as a sampling frame to conduct a survey, employing Excel's random order function to select 475 respondents from the list.
- Step 1: Contacting the staff to schedule appointment, location to conduct the survey
- Step 2: Meeting the staff, issue a survey and get the information
- Step 3: Summarizing the survey information in Excel sheet
A quantitative study was conducted by distributing survey questionnaires to 475 staff members at BIDV, allowing for the collection of valuable data This information is utilized to assess the reliability of the findings.
The questionnaire consists of three parts:
- The first part is the introduction;
- The second part is the screening part (for HR staffs only);
- The third part is the survey question;
Number of questions: The total number of questions consists of 80 questions
Scale: Use a 5-point Liker scale for observation variables, with the following convention:
This survey includes questions and scores ranking, detailed is shown at Appendix
D ATA ANALYSIS METHODS
Descriptive statistics provide a quantitative summary of features from a data collection, distinguishing itself from inferential statistics by focusing on summarizing a sample rather than making predictions about a broader population This process does not rely on probability theory and often involves non-parametric statistics Even when inferential statistics are used to draw conclusions, descriptive statistics are typically presented alongside, offering insights such as overall sample size, subgroup sizes, and key demographic characteristics like average age and sex distribution Common measures in descriptive statistics include central tendency metrics—mean, median, and mode—and variability measures, such as standard deviation, minimum and maximum values, kurtosis, and skewness.
Descriptive statistics offer concise summaries of sample observations, utilizing both quantitative summary statistics and visual representations like graphs These summaries can serve as foundational descriptions in broader statistical analyses or stand alone for specific investigations For instance, a basketball player's shooting percentage, calculated as the ratio of successful shots to total attempts, encapsulates their performance, while a student's grade point average reflects their overall academic achievement The history of descriptive statistics dates back to the initial tabulation of populations and economic data More recently, techniques under exploratory data analysis, such as box plots, have emerged In the business realm, descriptive statistics are invaluable, allowing investors and brokers to analyze historical return behaviors and make informed investment decisions.
FINDING AND ANALYSIS
I NTRODUCTION OF BIDV H AI B A T RUNG
4.1.1 General introduction of BIDV system
The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is the oldest and largest joint stock commercial bank in Vietnam, recognized for its substantial total assets since 2016 BIDV offers a comprehensive range of modern banking services, including life and non-life insurance products tailored to customer needs, diverse brokerage and investment consultancy services in the securities sector, and financial investment opportunities that contribute to key national projects such as the Aviation Leasing Joint Stock Company (VALC), the Expressway Development Company (BEDC), and the Long Thanh International Airport Investment.
BIDV, originally known as the Viet Nam Bank for Industry and Development, was established on April 26, 1957, primarily to manage capital for the country's economic development projects On June 24, 1981, the bank was rebranded as the Bank for Investment and Construction of Vietnam, reflecting its evolving role in supporting national infrastructure and investment initiatives.
On November 14, 1990, it was renamed Bank for Investment and Development of Vietnam Since December 1994, BIDV has transformed into a commercial bank
From April 27 th , 2012, the company was officially transformed into a commercial joint stock bank called Vietnam Commercial Joint Stock Bank for Investment and Development
As of December 31, 2016, BIDV reported total assets of VND 1,006,404 trillion and total deposits of VND 940,020 billion, representing 12.5% of the market capitalization The bank's outstanding loans reached VND 751.448 trillion, capturing a 13.6% market share BIDV operates 190 domestic branches, one foreign branch in Myanmar, and 815 transaction offices nationwide, employing a workforce of 25,088.
At BIDV, our mission is to deliver exceptional financial and banking services, fostering long-term relationships with our customers, while driving value for our shareholders We strive to create a dynamic work environment that encourages professional growth, offers rewarding benefits, and supports the career development of our employees As a socially responsible institution, we are committed to pioneering community development initiatives that make a positive impact.
Vision: To become a bank with the highest quality, efficiency and prestige in
The development orientation aims to establish a modern banking and finance group that is fully equipped to thrive in a competitive global market With a strong focus on retail banking and insurance services—both life and non-life—the group aspires to excel in Asia and beyond This strategic approach emphasizes high competitiveness and operational efficiency, positioning the organization for success in a dynamic commercial landscape.
Thus, the core value of BIDV is as following:
Figure 2 Core values of BIDV
Commitment of BIDV is as following:
For customers – BIDV provides the highest quality banking products and services and is ultimately responsible for the products and services provided
For strategic partners – Ready to ―Share opportunities, cooperate successfully‖
Employees should recognize that human resources are the key to success, adhering to the principle that "Each BIDV staff member is a competitive advantage," reflecting both their professional skills and ethical standards.
BIDV has established a robust retail client base, serving over 8.7 million customers, which accounts for approximately 9.5% of Vietnam's population Recognized as the "Best Retail Bank in Vietnam" by the Bank for Recurring Bank of Vietnam for three consecutive years, BIDV also received the accolade of "Outstanding Retail Bank in 2016" at the Banking Forum Furthermore, Nielsen Vietnam's measurements indicate that BIDV's Retail Satisfaction Index (RSI) has improved from "average" in 2015, highlighting the bank's commitment to enhancing customer service.
4.1.2 Introduction of BIDV Hai Ba Trung
BIDV Hai Ba Trung, a subsidiary of BIDV, was established on April 26, 2009, following its separation from the BIDV Hanoi branch Located in the VCCI Tower at Dao Duy Anh, Phuong Lien, Dong Da District, Hanoi, the bank employs 200 staff members and serves the Hai Ba Trung District area.
HR structure of BIDV Hai Ba Trung as of 30/09/2020 is as following:
Table 1 HR structure of BIDV Hai Ba Trung
No Content Unit Total Percentage
1 Total number of employees Person 200 100%
The organizational structure of BIDV Hai Ba Trung is as below:
Figure 3 Organizational structure of BIDV Hai Ba Trung
H UMAN RESOURCE PRACTICE IN BIDV H AI B A T RUNG
BIDV's human resource practices encompass key areas such as recruitment, selection, training and development, performance appraisal, and compensation The impact of strategic human resource management at BIDV is evident through these critical dimensions, highlighting the effectiveness of their HR initiatives in driving organizational success.
The banking sector is experiencing rapid technological advancements and evolving work methods, necessitating continuous training for both new and existing employees As policies, schemes, and banking facilities change over time, human resource management plays a crucial role in ensuring that all staff members are equipped to adapt By empowering employees through ongoing training and regularly assessing their performance, the human resource department helps maintain a competent and effective workforce.
The impact of HRM activities at BIDV focuses on enhancing employee skills and delivering exceptional customer service By fostering a culture of continuous learning, employees gain valuable insights into their tasks, ultimately benefiting both their professional development and the overall customer experience.
Customers are the foundation of any organization, and their importance cannot be overlooked Through effective Human Resource Management (HRM), BIDV can enhance service delivery and gather valuable feedback on customer experiences, ensuring that the branch meets their needs effectively.
New innovative and reliable organization performance
Innovation and reliable performance of BIDV can possible by using HRM theories apply on employee, provide best training to them and give them reward in bounce and other packages
Revise employee’s performance according to organizational goals
HRM enables the assessment of employee performance based on established goals, facilitating the achievement of these objectives Additionally, it offers an effective information structure that enhances communication among employees.
Provide new skills to employees to get competent advantage over competitors
By using HRM practices, employees of BIDV can improve professional skills and provide new ideas that can get competitive advantage over other banks in the market.
R ELIABILITY TEST AND EFA
Cronbach's alpha is a crucial measure of internal consistency, indicating how closely related a set of items is as a group and serving as an indicator of scale reliability A high alpha value does not necessarily mean the measure is unidimensional; therefore, additional analyses, such as exploratory factor analysis, may be needed to confirm dimensionality It is important to note that Cronbach's alpha is a coefficient of reliability rather than a statistical test According to Hair (2010), a Cronbach's α value should exceed 0.700, or at least be 0.65 (Lee & Kim, 1999) The reliability analysis of the survey is detailed as follows.
Table 2 Cronbach's alpha test of factor
Variables Mean* Std.Deviation Reliability
*The mean of each variable is formed by averaging the pertinent items (5-point- scale)
The next method to be utilized is Exploratory Factor Analysis (EFA), contingent upon the acceptance of all factors and variables as verified by Cronbach's Alpha For EFA to be deemed practically significant, the factor loading of each variable must exceed 0.5 Additionally, the Kaiser-Meyer-Olkin (KMO) coefficient should fall between 0.5 and 1 (0.5 < KMO < 1), Bartlett's test must yield a significance level below 0.05, and the percentage of variance explained should surpass 50% EFA can be effectively employed when all these testing conditions are met.
The data from observed variables were analyzed using SPSS 23 to perform Exploratory Factor Analysis (EFA), which included calculating the KMO coefficient, conducting Bartlett's test, and determining the percentages of variance Additionally, the varimax rotation in EFA effectively organized and converged the variables into distinct factors (see Appendix A).
Table 3 Result of Exploratory Factor Analysis
Kaiser-Meyer- Olkin Measure of Sampling Adequacy 713
The second EFA process was conducted on 24 observed variables, yielding a KMO value of 0.713, which meets the acceptable range of 0.5 to 1 The analysis revealed that the percentage of variance explained is 54.181%, exceeding the 50% threshold This indicates that the model is suitable for study and research, as it accounts for 61.395% of the variance in the dependent variable Additionally, all variables were effectively arranged and converged during the EFA process.
S URVEY ANALYSIS
As mentioned in the Chapter 3, the research focuses on the result, gathering from 20 persons working in BIDV
Departments of the respondents are as follows:
No Deparment Number of interviewees
The summary table indicates that interviewees represent a balanced distribution across various departments, enhancing the generality and objectivity of the findings Additionally, it is important to note that the unique characteristics of the banking sector necessitate tailored HRM practices for each department.
Besides, from a years of experience perspective, statistics are divided into three groups (less than 10 years, from 11 to 15 years, and over 15 years) as follows:
Most of the interviewees have 10 years or more of work experience in BIDV
Approximately 50% of the interview respondents have over 15 years of experience at BIDV, indicating their deep understanding of the bank's policies and operations This extensive experience suggests that the respondents are well-equipped to handle HRM functions at the branch level Overall, the demographic analysis reveals that all 20 candidates interviewed possess relevant HRM experience at BIDV, further validating the findings of the research.
Analysis of working environment in BIDV is based on the results collected from the first question with 8 factors as follows:
The organization functions in a highly volatile output market, such as the banking, computer software, or automotive industries, where it encounters constant changes and surprises, including intense competition, price wars, and ongoing technological advancements.
Under 10 yearsFrom 11 years to 15 yearsOver 15 years
The organization functions in a highly volatile environment characterized by fluctuating input markets, such as the oil products market This volatility impacts essential resources, including energy, fuel, raw materials, human resources, and capital, leading to significant variations in costs and living conditions.
1c* The organization operates in a volatile policy-political environment (e.g telecommunications industry, energy industry), and is subjected to sudden changes in laws, policies and regulations regulations, administrative procedures)
1d* The organization faces fierce competition (as it does in the consumer goods industry) and is vulnerable to harm from competition pressures
The organization requires significant updates to its operational technology, particularly in the information systems utilized within the bank This necessitates ongoing upgrades to machinery, modifications or replacements of equipment, and the retraining of staff to ensure efficiency and adaptability.
1f The organization operates in a vibrant and thriving environment (e.g software industry)
1g Organization operate in sectors managed by the State
The organization functions in a sector that demands specialized knowledge and advanced technical skills for effective service and goods delivery, particularly in areas such as professional expertise and credit services.
In the analysis of the values obtained from the survey, the values marked with
―*‖ are the inverse expected values More specifically, the mean of the var "*" is expected to be less than 3 (the average of the answers)
The results are simulated as follows:
Std values The errors of all variables are less than 0.2 Thus, the error of the collected values is very low, which means the reliability is over 90%
The analysis of values with an expected mean greater than 3, particularly Q1a, Q1b, Q1f, Q1g, and Q1h, indicates that the banking environment in Vietnam is highly competitive, with means ranging from 3 to 5 This reflects the involvement of numerous large enterprises in the banking sector BIDV Hai Ba Trung, under state management, requires highly qualified human resources to support its development and the broader banking industry Conversely, values with an expected mean less than 3, specifically Q1c, Q1d, and Q1e, reveal negative impacts on BIDV Hai Ba Trung's operations, with results of 4.00, 4.00, and 3.65 respectively The challenges include an uncontrollable policy environment affecting all banks, competitive pressure hindering customer base growth, and insufficient technological advancements that weaken human resource management To enhance its competitive edge, BIDV Hai Ba Trung should prioritize improvements in areas Q1d and Q1e.
Analysis of corporate culture in BIDV is based on the results collected from the second question with 8 factors as follows:
2a The organization has a high commitment to customers and to quality 2b There are many opportunities to develop new skills in Organization
2c Employees have strong sense of connection with the organization
2d The long term vision and fundamental values of the organization are emphasized
2e The organization highly acknowledges the contribution of each member 2f Job is highly guaranteed in the organization
2g There is satisfaction and high working spirit in the organization
The results are simulated as follows:
The standard error values for most variables are below 0.2, with the exception of Q2e, which has a standard error of 0.223 Overall, the reliability of the obtained values exceeds 80%, suggesting that the analyzed data is both reliable and applicable.
All values in Question 2 reflect an expected mean greater than 3, with actual results ranging from a minimum of 3.95 (Q2h) to a maximum of 4.65 (Q2a) This indicates a strong corporate culture at BIDV Hai.
The human resource initiatives at BIDV Hai Ba Trung are yielding positive results, with high value outcomes This indicates that the bank's culture is being effectively and consistently implemented by its leadership.
Analysis of HRM strategy in BIDV is based on the results collected from the third question with 16 factors as follows:
3a HR department has played an important role in the success of the organization
3b* Most of the HR management functions are outsourced (recruiting people through consulting, training through training companies )
3c The HR department is a good working group and is respected by other parts of the company
3d HR department always responds quickly to all situations that happen to the organization
3e In the organization, the HR department plays the role of administration, payroll development, paper work, and personnel training
3f The HR department is autonomous and able to anticipate any employee's changes and disagreements
3g* HR department does nothing but the work assigned by the leader
3h The HR department is very important, a major factor for the change in the organization when participating in decision making at all management levels
3i* HR department is redundant and wasteful of human resources
3j In addition to business monitoring, increasing value and reducing costs, management of functional departments concurrently manages human resources (e.g., human development)
3k HR managers act as a guide rather than an administrator
Effective HR management involves not only establishing a structured human resource framework aligned with organizational goals but also fostering strong relationships between employees and management Additionally, the lack of technology integration in HR practices often stems from insufficient training for staff in areas such as internet usage, email performance assessments, and online meetings.
3n* There is no good relationship between HR staff and other departments 3o HR Department evaluates employees based on actual overseas personnel evaluation standards
3p In general, HR department policies are reasonable
The results are simulated as follows:
Consider Std Error of the variables Question 3, the obtained values are less than 0.2 Thus, the reliability of the obtained values reaches more than 80%
Values with a mean expectation greater than 3, including Q3a, Q3c, Q3d, Q3e, Q3f, Q3h, Q3j, Q3k, Q3l, Q3o, and Q3p, generally yield results exceeding expectations Notably, Q3e stands out with a value of 2.60, indicating that the leaders of BIDV Hai Ba Trung believe the human resources management, staffing, paperwork, and personnel training at the branch are not functioning effectively This suggests that the HR department at BIDV Hai Ba Trung has not adequately fulfilled its roles and responsibilities In contrast, variables with an expected mean value below three, such as Q3b, Q3g, Q3i, Q3m, and Q3n, typically provide consistent results.
The management of BIDV Hai Ba Trung revealed that the branch's human resources department has not fully fulfilled its functions and responsibilities, as indicated in Question 3 of the survey (Q3e).
Analysis of recuirtment and promotion in BIDV is based on the results collected from the third question with 12 factors as follows:
4a* The employee recruitment strategy allows a candidate to negotiate the working conditions
4b The majority of people recruited into the supervisory and managerial position have received professional training and equivalent qualifications, for example an MBA
4c* The organization hires fewer employees than is actually required
4d* Promotion conditions are based on seniority and not on actual abilities of the person
4e Recruitment information is informed and staff can easily access it
4f People with qualifications and abilities get promoted faster
4g* Promotional decisions are often made in secret
4h Promotional decision is subject to review (possible competition)
4i* Promotional process has bias and priorities
4j Recruitment for leadership positions usually only takes people from the organization
4k The organization has a formal process of dissemination, orientation and introduction to help new managers understand the organization
4l Company's policy of appointing / promoting a position is prioritized by those with the best and with the right abilities
The results are simulated as follows:
The standard error values from Question 4 indicate that the majority are below 0.2, with the higher values being 0.250 and 0.235 Consequently, this suggests that the reliability of most results is approximately 80%.
The management of BIDV Hai Ba Trung has confirmed that their recruitment and promotion plans are effective, indicating a supportive environment that fosters transparency and fairness This foundation is crucial for the bank's sustainable and long-term development.
Analysis of criteria for promotion in BIDV is based on the results collected from the third question with 5 factors as follows:
5d* Seniority (in organization) / Years of experience (outside the organization)
5e* Relationship with owner and influential people
5f Others (please specify and score)
The results are simulated as follows: