Retaining skilled employee, case study in Mai Diem textile & garment limited company = giữ chân người lao động có năng lực tại Công ty TNHH Dệt may Mai Điểm

As one of committed employees in Mai Diem company, I choose the topic "Retaining skilled employees, case study in Mai Diem textile and garment limited Company." as the official one for m

TABLE OF CONTENT

ACKNOWLEDGEMENTS i

ABSTRACT ii

TÓM TẮT iv

TABLE OF CONTENT vi

LIST OF FIGURE ix

INTRODUCTION 1

1 The necessity of the thesis 1

2 Objectives of the research 3

3 Research scope 3

4 Hypothesis of the research (Research questions) 3

6 Methodology 4

7 Thesis‘s limitation 5

8 Significant 5

9 Thesis structure 5

CHAPTER 1: LITERATURE REVIEW 6

1.1Employee retention 6

1.1.1 Definition of employee retention 6

1.1.2 Reasons of employee retention 7

1.1.3 Factors make employees leave Company 8

1.2.1 Work environment and Job Design 9

1.2.2 Leadership 11

1.2.3 Employee Recognition, Rewards and Compensation 13

1.3 Employee retention tactics 14

1.3.1 Employee Compensation 15

1.3.2 Employee Benefits 16

1.3.3 Employee Recognition and Reward Program 18

1.3.4 Job satisfaction 20

1.3.5 Creating a comfortable work environment 22

1.3.6 Coaching programmes 24

1.4 Employee retention in Garment and textile industry 25

1.4.1 Overview on Vietnam‘s garment and textile industry 25

1.4.2 Human resource management and development solution 26

CHAPTER 2: ANALYSIS OF MAI DIEM’S EMPLOYEE RETENTION 29

2.1 Overview of Mai Diem Garment and Textile Company 29

2.2 The Research methodology 30

2.2.1 Overall approach 30

2.2.2 Questionnaire development 31

2.2.3 Target Population 32

2.3 Findings and analysis 33

2.3.1 Benefit programs 33

2.3.2 Strategies 41

2.3.3 Organizational culture 49

2.3.4 Employee Satisfaction 57

CHAPTER 3: RECOMMENDATION AND CONCLUSION 68

3.1 Overview of the current human resource system at Mai Diem 68

3.2 Recommendation for Mai Diem Garment and Textile Company 68

3.2.1 Clear Objectives about work climate 68

3.2.2Training and Motivation 70

3.2.3 Benefits and Compensation 71

3.2.4 Communication and Assistance 72

3.2.5 Create belief for the employees in the future development of Mai Diem 73

3.3 Action plan 74

3.3.1 The action plan in long term 74

3.3.2 The proposed action plan in short term to attract newcomers and sustain current employees from the researcher: 77

CONCLUSION 80

REFERENCE 82

APPENDIX 84

LIST OF FIGURE

Figure 2 1 Steps of the research 31 Figure 2 2: The perception of Mai Diem participants about the salary and compensation 34 Figure 2 3: The perception of Mai Diem participants about the Leave

Benefits 35 Figure 2 4: The perception of Mai Diem participants about the Retirement Plan 36 Figure 2 5: The perception of Mai Diem participants about the health-related benefits 37 Figure 2 6 : The perception of Mai Diem participants about the Long-term Care 38 Figure 2 7: The perception of Mai Diem participants about the Tuition

Reimbursement 39 Figure 2 8: the perception of the participants about the Employee Assistance Program 40 Figure 2 9: The perception of Mai Diem participants about the Work-life Balance 40 Figure 2 10: Perception of Mai Diem Participants about the Alternative Work Schedule 42 Figure 2 11: The perception of Mai Diem participants about the wellness program 43 Figure 2 12: The perception of Mai Diem participants about the Mentoring and Coaching 44

Figure 2 13: The perception of Mai Diem participants about the Job rotation and new Assignment 45 Figure 2 14: The perception of Mai Diem participants about the Rewards and Recognition 46 Figure 2 15: The perception of Mai Diem participants about the Education Opportunities 47 Figure 2 16: The perception of Mai Diem participants about the Job-related Training Opportunities 48 Figure 2 17: The perception of Mai Diem participants about the annual

performance appraisal 49 Figure 2 18: The perception of Mai Diem participants about the Development plan 50 Figure 2 19: The perception of Mai Diem participants about Task group

assignment 51 Figure 2 20: The perception of Mai Diem participants about Career

development program 51 Figure 2 21: The perception of Mai Diem participants about New assignment52 Figure 2 22: The perception of Mai Diem participants about Supervisor

communicate 53 Figure 2 23: The perception of Mai Diem participants about Value of

diversity 53 Figure 2 24: The perception of Mai Diem participants about Openess and

trust 54 Figure 2 25: The perception of Mai Diem participants about Fairness and

Figure 2 26: The perception of Mai Diem participants about Supervisor

listening 56 Figure 2 27: The perception of Mai Diem participants about Supervisor

empower 56 Figure 2 28: The perception of Mai Diem participants about Opportunities for personal growth and development 58 Figure 2 29: The perception of Mai Diem participants about the feeling of worthwhile accomplishment from the job 59 Figure 2 30: The perception of Mai Diem participants about The amount of independent thought and action exercised from the job 60 Figure 2 31: The perception of Mai Diem participants about The amount of challenge in the job 60 Figure 2 32: The perception of Mai Diem participants about the amount of job security 61 Figure 2 33: The perception of Mai Diem participants about the amount of pay and fringe benefits 62 Figure 2 34: The perception of Mai Diem participants about the degree to which I am fairly paid for what I contribute to my organization 63 Figure 2 35: The perception of Mai Diem participants about the people I talk

to and work with in my job 64 Figure 2 36: The perception of Mai Diem participants about the amount of support and guidance received from the superiors 65 Figure 2 37: The perception of Mai Diem participants about the overall

quality of supervision received in the job 65 Figure 2 38: The perception of Mai Diem participants about opportunities to learn new knowledge 66

LIST OF TABLE

Table 2 1: Mai Diem employee‘s response rate 33

INTRODUCTION

1 The necessity of the thesis

In today‘s economy, the bottom line in business is profits Where do the profits come from? From sales of services and/or products We have developed the following acronym (ECP) that explains how companies will increase their profits

E— Employee retention and employee satisfaction When you have satisfied employees (who are not caught up in the quagmire of bureaucracy and leave), they are more able to help the customer

C— Customer retention The more effective the customer services the greater the customer retention

P— Profit The equation is simple from this point on When we keep customers that are satisfied, and continue to add more, the corporation has increased the likelihood of increased profits

Employee Satisfaction + Customer Satisfaction = Increased Profits

Employee is the most important asset of enterprises but many enterprises have failed to introduce reasonable solutions to retain qualified employees This reduces the main competitiveness of enterprises in the current period

Skilled employee is defined as a segment of the work force with a high skill level that creates significant economic value through the work performed (human capital) Skilled labor is generally characterized by high education or expertise levels and high wages Skilled labor involves complicated tasks that require specific skill sets, education, training and experience, and may involve abstract thinking

So, attracting and retaining skilled employees are the best solution to help enterprises develop rapidly and sustainably However, Vietnam enterprises always have to deal with the risk of losing their top talents to competitors

Enterprises need to be aware that retaining employees is not a countermeasure but a strategy A strategy of retaining and developing human resource need to process fully and professionally which follows a consecutive chain including recruitment, training, retaining and human resource development This includes such factors as: Creating human resource + Reduce dissatisfaction + Motivation Solutions that give enterprises introduce to retain good employee must meet the three mentioned-above groups of factors

If one enterprise ignores the above issue and just pays attention to income, compensation, promotion, it is not differentiated from others Moreover, other enterprises may offer better compensations so as to attract good people Nevertheless, if one enterprise focuses much on income for employee, however, it fails to create a professional working environment, such excellent labor will fell boring and they soon leave for other companies Retaining excellent labor is a throughout process, beginning at the work of attraction-recruitment-working and cooperation for productivity These items need to be processed professionally together with the sharing and close cooperation of leaders, which can make excellent labor think again before they decide to accept attractive invitations

Mai Diem textile and garment limited Company specializes in domestic and exported products Building and maintaining a high-skilled workforce has enabled the company to produce high-quality products For many years, the Company has focused on investment to building a high-skilled workforce,

environment The year 2008 has marked a period when the competition of local garment industry has reached another level, challenging Mai Diem to foster its success and maintain the well-living condition for its 200 employees Attracting and retaining the high-skilled employees is seen as one

of the vital factor for maintaining the competitive advantage of the company

As one of committed employees in Mai Diem company, I choose the topic

"Retaining skilled employees, case study in Mai Diem textile and garment limited Company." as the official one for my Business Administration thesis

2 Objectives of the research

The purpose of this research is to identify the relationship between these factors: salary, compensation and benefit, working environment, career promotion chance, employee‘s satisfaction, especially in Mai Diem garment

& textile Company Thence, the thesis aims to achieve the following objectives:

- Identifying and assess actual situations of Mai Diem‘s Human Resource Management and its current employee retention

- Develop some suggestions and recommendations to retain skilled employee in Mai Diem Company

3 Research scope

Doing research Human resource management is a broad topic The thesis only concentrates on employee retention with case study in Mai Diem garment textile Company The definition of employee retention using in this study means skilled employee Research period from 2006-2010

4 Hypothesis of the research (Research questions)

From my point of view, the research focuses on main factors in order to satisfy needs of employees to retain them, as follows:

Hypothesis 1: The higher the income, the more loyal and dedicated

employee are

Hypothesis 2: Working environment at the Company affects the level

of labor‘s loyalty by proportional

Hypothesis 3: Career development opportunities of individuals affect

to the level of labor dedicated to Company by proportional

7 Thesis’s limitation

The thesis focuses on employee retention in Mai Diem Company Due

to time and ability limitation, the research can not cover a large size of data and information

In addition, the economic and labor situations change day by day The solutions in this thesis are not completely suitable with all managers or companies, it depends on financial statement, business field of each Company

8 Significant

Due to the practical meaning of the research, the analysis of employee‘s requirement is the way leading to answer the doubtful question about employee retention Together with specific and clear recommendations and solutions, the thesis is expected to make great contribution to Mai Diem Company and other companies in their applying measures to retain skilled employees

9 Thesis structure

TOPIC “Retaining skilled employees, case study in Mai Diem garment & textile limited Company‖

Introduction

Chapter 1: Literature review

Chapter 2: Analysis of Mai Diem‘s employee retention

Chapter 3: Recommendations and conclusions

References

Appendix

CHAPTER 1: LITERATURE REVIEW

1.1Employee retention

1.1.1 Definition of employee retention

Retention defined as ―an obligation to continue to do business or

exchange with a particular Company on an ongoing basis‖ (Zineldin, 2000,

p 28) A more detailed and recent definition for the concept of retention is

―customer liking, identification, commitment, trust, readiness to recommend, and repurchase intentions, with the first four being emotional-cognitive retention constructs, and the last two being behavioral intentions‖ (Stauss et al., 2001)

Employee retention is a process in which the employees are encouraged

to remain with the organization for the maximum period of time or until the completion of the project Employee retention is beneficial for the organization as well as the employee

(Source:http://retention.naukrihub.com/retention.html)

Studies show that attracting existed employees costs less than acquiring new talents as organizations know their employees and what they want, and the initial cost of attracting the new employees has already been expended (Davidow and Uttal, 1989) Employees retention also attain benefits such as customers satisfaction, better service, lower costs (Reichheld, 1995), lower price sensitivity, positive word-of-mouth, higher market share, higher productivity and higher efficiency (Zineldin, 2000)

1.1.2 Reasons of employee retention

The retention of employees has been shown to be significant to the development and the accomplishment of the organization‘s goals and objectives Retention of employees can be a vital source of competitive advantage for any organization

In the past, employee retention was a way of life If employees did a good job and the Company could afford to pay them, they kept their jobs Times have changed Employees are not as loyal as in the past They know they have options and aren‘t afraid of use them It‘s now up to employers to figure out how to keep good people

There are additional reasons that retention is now back in the spotlight The challenges confronting employers are many They include:

- Today‘s tightening labor market and tomorrow‘s predicted talent crunch It‘s getting increasingly difficult for companies to keep current employees and find qualified replacements

- A growing skills shortage Many occupations are facing a severe lack

of talent

- An aging workforce The workforce is getting older and upcoming age groups don‘t have the numbers to fill the spaces Businesses need to keep people as long as possible

- Decreased employee loyalty Gone are the days of the 25th anniversary gold watch Employees don‘t stay with companies as long as they did in the past

- The search for new opportunities In today‘s world, it‘s easy for people

to look for a job They can open the newspaper or search the Internet for instant job listings

1.1.3 Factors make employees leave Company

Retaining the correct workforce is always a challenge for employers In this current competitive business world, retaining employees is a game which employers have to compete with others to retain their employees or their key talent Coff (1997) in a study claimed that the loss of talented employees may

be very detrimental to the Company's future success Employees do not leave

an organization without any significant reason There are certain circumstances that lead to their leaving the organization

Here are the most common reasons employees leave:

- Poor relationship between the employee and their immediate boss

- Lack of a career advancement plan

- A poor match between the employee and the job or the employee and

the Company

- Compensation not competitive

- No direct link between strong performance and increased rewards

- A need for stimulating, meaningful work

- Lack of appreciation, recognition, and rewards

- Insufficient coaching and feedback

- Quality of the people the employee works with

- Insufficient alignment of how the employee‘s work achieves organization objectives and how the employee can be greater success

(Source: www.RetainsEmployees.com)

Therefore, in order to retain skilled employees, leaders of enterprises, firstly, should recognize the importance of skilled employees, understand the reason why employees leave, know clear about employee‘s requirements then have solutions can be made to keep them working for such enterprises longer

1.2 Employee retention components

Employee retention consists of a three major components: Work environment and job design; leadership; recognition, reward and compensation If these components are adequately and collectively addressed, the majority of employees will be content with their work environment and actively engaged in their job

1.2.1 Work environment and Job Design

Employees will be happy to work in an environment which provide positive work environment and where they feel they are making difference and where most people in the organization are proficient and pulling together

to move the organization forward A study by Milman and Ricci (2004) reveal that employees who have a positive experience with regards to working hours, working environment, sense of fulfillment with their jobs and higher job satisfaction are more likely to stay with the current employer

Work environment is an important factor for an employee to be successful in their carrier If the environment does not motivate employees to work then it will be an excuse for employees for not performing to the standard and giving reason as environment is too noisy, condense, not hygine, feel stress and no fun in the working environment Besides using compensation, retaining talented employees may also be accomplished through improving their work environment and Job Design Company can create a positive work environment and money and benefits may bring

employees through the front door, but poor work conditions will eventually drive them out the back Ramlal (2003) in his studies mentioned that it's very important to recognize the emerging needs of individuals to keep them committed and provide the work environment as necessitate Managers can play an instrumental role in creating a work environment that neutralises the otherwise problematic aspects (Ian & Jonathan, 2007)

According to (Fields, 2001) work environment should mutate regularly

to keep up with the times and:

- Allow individuals to balance work and personal life activities

- Have a well-defined culture People understand how their performance

is measured and what gets rewarded and punished

- Foster learning opportunities to improve workers' intellectual capital and sustainable marketability in a world where continuously learning in order to keep a job is a given

- Have benefits that are in line with where individuals are in their life cycle

In a study done by Herman and Gioia (1998) reveals that research has shown employees want to do more than merely "attend" work Response Analysis of Princeton, New Jersey surveyed 1600 employees from a variety

of industries regarding the most important aspect of work The majority, 52 percent, wanted to be responsible for their work and the results it produces, 42 percent wanted acknowledgement for their contributions and 39 percent wanted their task matched to their strengths Designing work so that employees can take responsibility and rewarding them appropriately is a major step toward making work meaningful (Debra 2002)

Employees need to be given certain level of freedom, authority and

should listen to the feedback or suggestion provided by employee to improve the work environment or the job design that they are doing Small ideas given

by employees may lead to great improvement which might result in higher productivity with less work In another aspect employees should also be given chance to rotate their job if there is request or if there are opportunity to grow

in a different job scope then employees should be given an opportunity to grow with the Company This will proof the Company is giving employees empowerment and they cares for the best of employees Retention initiatives are often thought of as separate from recruitment They are, however, inextricably tied together An organization may have the most elaborate and sophisticated recruitment program imaginable, but once individuals are hired,

if the environment is inhospitable, given the choices that employees have in this labor market, companies will soon find themselves looking for another replacement They'll also see the huge impact that turnover has on the bottom

line (Fields, 2001)

1.2.2 Leadership

―Employees will stay if they have a good relationship and open communication with their immediate boss‖ (HRI Institute, 2001) The key reason an employee leaves within 6 and 12 months of commencing in a new role is the relationship they have with their manager (Chaminade, 2006) This

is the ―leadership factor‖ which highlights the impact that leaders and managers can have on productivity and retention People will put in discretionary effort for personal/social recognition received from their peers and immediate manager

Leadership is defined as the ―process of social influence in which one person could enlist the aid and support of others in the accomplishment of a

common goal.‖ It involves using one‘s role and ability to influence others in some way, which delivers business results and contributes to the organisation‘s overall success True leadership comes from influence, congruence and integrity A successful leadership involves the management of relationships and communications within a team, and drives the team towards achieving a specific goal Leadership reflects on the ability of one to ―express

a vision, influence others to achieve results, encourage team cooperation, and

be an example‖ It is important to note, however, that one who is in the formal role of a leader may not necessarily possesses leadership skills nor be capable

of leading Leadership is essentially related to one‘s skills, abilities and degree

of influence, instead of power

There are six important leadership skills that are deemed crucial for an organisation‘s future success These areas include challenging assumptions, encouraging risk taking, inspiring employees, clearly defining expectations, rewarding achievements and participative decision-making (Jordan, M 2010) Hence, organisations may position their businesses for future success through focussing on these key areas

Organisations with leadership development programmes might experience significant business impacts, which includes improvements in leadership strength, leader retention and employee retention The impact of leadership development is not determined by the amount of money spent, but how it is designed and executed The leadership development gives five benefits: Morale booster, Limits employee turnover, Increases productivity, Provides better vision, Fosters new ideas Talent Management

1.2.3 Employee Recognition, Rewards and Compensation

Attractive remuneration packages are one of the very important factors

of retention because it fulfills the financial and material desires as well as provide the means of being social by employee's status and position of power

in the organization For many organizations, the entire concept of retaining top employees boils down to one topic which is compensation "To keep our best employees, we must pay them well" is the cry Well, up to a point, that's true but only as a negative If you don't pay your top performers well, they'll surely leave But only paying them well does not ensure that they'll stay (McKeown, 2002) 0rganizations need to have a proper rewards, recognition and compensation program in place if they want to retain their key employees for a longer period

If your compensation policies are below market level, you'll have trouble retaining top employees because you're not meeting their compensation needs If you adjust compensation upward to meet the market level, you get a one-time effect on employee retention But this is where many organizations make the mistake of stopping their retention efforts (McKeown, 2002) Below are the definition of Employee Recognition, Rewards and compensation:

Recognition: Can be defined as a form of sincere praise or appreciation

given to an individual by another

Compensation: Wages and other financial benefits earned from labor Reward: An earned item of value presented to an individual for

successful accomplishment of a particular service, task, or mission

A clear-cut compensation system offers the kinds of incentives and rewards that help retain staff and motivate promising future leaders

Established compensation levels and programs also support a successful succession plan Studies have revealed that highly competitive wage systems promotes employee commitment and thus results in attraction and retention of

a workforce

A reward can be extrinsic or intrinsic, it can be a cash reward such as bounces or it can be recognition such as naming a worker employee of the month, and at other times a reward refers to a tangible incentive Silbert (2005) in a study says that in a corporate environment rewards can take several forms It includes cash bonuses, recognition awards, free merchandise and free trips It is very important that the rewards have a lasting impression

on the employee and it will continue to substantiate the employee's perception that they are valued Rewards are very important for job satisfaction because

it fulfills the basic needs as well as helps to attain the higher level of goal

Studies show that a lack of appreciation and recognition is the primary reason why people quit their jobs We have to understand the importance of recognition in its broadest sense and the value of reward systems in both monetary and non-monetary terms (Bowen, 2000) Bowen also said that reward and recognition are the factors that can most influence worker attitude, productivity, and organizational competitiveness not only with respect to selling and servicing customers but also with respect to attracting and retaining valued human resources

1.3 Employee retention tactics

Employees retaining is the most imperative target for the organization because hiring of qualified candidate is essential for organization but their retention is more important than hiring, because a huge amount is spending on

the cost of replacing of old employees with new is estimated up to twice the employee annual salary When Employee leaves the job, organization lost not only employee, but also lost the customers who ware loyal with the employee, knowledge of production, current projects, competitor and past history of the organization Below are key elements to employee retention:

1.3.1 Employee Compensation

Compensation has long been used as a vehicle to attract and retain employees Compensation is payment to an employee in return for their contribution to the organization, that is, for doing their job The most common forms of compensation are wages, salaries, bonus-based programs, commission-based program

Any employee wants to feel that he or she is being paid appropriately and fairly for the work he or she does Make sure that if compensation package is not competitive, employee will find this out and look for employers who are willing to offer more competitive compensation packages Here are some tips when building a competitive compensation package:

A performance-based compensation plan: should be designed to

encourage employees to behave in ways that will result in attainment of the goals of Company, while also meeting employees' personal objectives The pay plan must be objective and fair to all employees Additional commissions are paid for experience, helping to generate office revenue growth, and attaining and maintaining professional

Loyalty based Bonus: Company can introduce a Loyalty Bonus

Program in which Company can reward employee after a successful completion of a specified period of time This can be in the form of Money or

Position This will encourage the fellow employees as well whether they are interested in money or position, they will feel fascinated

Salary policy: Pay a fair market salary that will keep employees on par

with their peers in similar companies and positions The salary of employee need to be increased, which will not only retain the present employees but will attract employees of other organization as well

1.3.2 Employee Benefits

Employee benefits include all financial rewards that generally are not paid directly to an employee Employee benefits typically refer to payment for time not work, health benefits, security benefits, employee service The key factor is to offer the most important benefits the business can afford to attract and keep the most qualified employee Employee benefits program includes:

Vacation and days-off policies

Employees need time off occasionally for personal business or just for rest and relaxation Having a policy that employees understand and that provides some flexibility will be greatly appreciated

Health benefits

One of the most expensive components of a benefit package is health coverage Health savings accounts also permit employees to allocate pre-tax compensation dollars for medical needs Health benefits included health care, dental care and vision care Others Company programs that provide health benefits for employee include employee assistance programs, wellness programs and physical fitness program

Disability Insurance

Short and long-term disability insurance is a valued benefit by both employee and employer Even if the business offers worker such as compensation, disability insurance remains a major benefit for two important reasons First, disability (illness or injury) that occurs either at or away from the workplace is covered Second, disability claims typically are settled faster and easier than those filed under workers compensation insurance programs

Life Insurance

Life insurance coverage is both a valuable benefit from an employee perspective and usually quite affordable for the small business Most programs provide term life coverage (pure protection with no cash savings account) with the opportunity for the employee to purchase more insurance if they wish Some plans also allow employees to convert their protection to whole life coverage (cash buildup and tax deferred dividends) and/or continue their coverage should they leave their employer

Education reimbursement programs

Many employees are interested in furthering their education If your business requires ongoing training in certain fields, it may be prudent to provide partial or total reimbursement for certain types of classes The employees enhance their skills and you have a better-trained employee group

Education Assistance

A much-desired employee benefit, education assistance is more important than ever As the cost of on-campus post-secondary education increases, many employees simply cannot afford to improve their skills in the classroom However, the many wonderful educational programs offered

online at reasonable cost can help small businesses improve their staff quality Available at any time of day, both formal degree programs and continuing education courses can be very effective and economical

Retirement Plans

Retirement plan provide income for employees who retire after reaching a certain age or having served the firm for a specific period of time Traditional pension plans, 401K programs and SEP IRAs (Simplified Employee Pension Individual Retirement Accounts) are all popular with employees and small businesses 401K plans are often the most popular programs because they permit employees to contribute to individual IRAs along with participating in their employer retirement plan SEP IRA programs are tailored for small business as they have few administration expenses and operate like individual IRA accounts The right retirement plan should take into account the business‘s needs as well as the employees‘ concerns

Gifts at some Occasions

Company can give some gifts at the time of one or two festivals to the employees making them feel good and understand that the management is concerned about them

1.3.3 Employee Recognition and Reward Program

Rewards and recognition are a vital part of promoting an attractive workplace Recognizing employees in a fair and open way not only encourages employees to work hard, but it also encourages loyal feelings towards Company Here are a few factors to keep in mind when build

Employee Rewards and Recognition Program:

Communicate the Program Internally

Employees should be aware that the Company has a rewards and recognition program and have a clear understanding regarding how it works

Meaningful Awards

You shouldn‘t just rotate the awards program around so that everyone has a chance; instead make sure that it is seen as a program that has meaning

by rewarding those who are truly deserving of recognition

Share Reasons for Award

When someone is recognized for an accomplishment or contribution, make the reason for recognition known That is how other employees will learn what behaviors the Company seeks to rewards

Choose Appealing Rewards

If the items used as awards in your program aren‘t things that appeal to

your workforce, the program isn‘t likely to be successful Choose employee rewards that workers will actually want and will be happy to receive when they earn recognition

For retaining good employee, Company can make a provision of Monthly or Quarterly Award (depending upon the budget) for the best employee, Awarding 2 or 3 best workers each month The award can be in terms of gifts or money If it is money then it should be divided into two parts, first part to be given with the next month salary and the remaining after 6 months In this way he/she can be retained for 6 more months These rewards shall be considered at the time of appraisal

Recognize employees frequently for their good work and they will repeat the performance frequently Praise must be sincere and should be

distributed equitably, if warranted When possible, praise people publicly in meetings or employee newsletters Be sure to give people credit and rewards for good ideas they come up with that benefit the Company Give recognition certificates, prizes and other than money, such as tickets for movie rental or sports events, or gift certificates for merchandise or dinner

1.3.4 Job satisfaction

Clearly define what is expected of employee:

Nothing can be more frustrating or discouraging for an employee than the lack of a clear understanding of what is expected of him on the job In a performance driven workplace a lack of clarity regarding job duties and expectations can cause fear and anxiety among employees who are unclear of what is expected of them Even worse outright anger can occur when an employee receives a negative performance evaluation based on expectations and job duties that he or she was unaware of or unclear about

Autonomy to make decision

Give employees lots of opportunity to participate in how their work gets done, and they'll most-likely enjoy an increased sense of personal responsibility for their tasks Increasing the degree of decision making, and the freedom to choose how and when work is done

Rotate Jobs

Give people the opportunity to use variety skills, and perform different kinds of work The most common way to do this is through job rotation Move workers through a variety of jobs that allow them to see different parts

of the organization, learn different skills and acquire different experiences

This can be very motivating, especially for people in jobs that are very repetitive or that focus on only one or two skills

Treat employees fairly and respectfull

Your employees are your Company‘s best asset and you must protect and nurture them Whether you know it or not, you are in the business of growing people Let them know how valuable their contributions are to the Company Honor your commitments to them Create a learning environment for them where they, and you, can achieve the highest potential

Career Development Program

Every individual is worried about his/her career Company can provide them conditional assistance for certain courses which are beneficial from Company‘s business point of view Conditional assistance means the Company will bear the expenses only if he/she gets an aggregate of certain percentage of marks And entrance to that course should be on the basis of a Test and the number of seats to be limited For getting admitted to such program, Company can propose them to sign a bond with the Company, like they cannot leave the Company for 2 years or something after the successful completion of the course

Opportunity to learn new things

Seek frequent opportunities to learn and grow in their careers, knowledge and skill Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will stagnate A career-oriented, valued employee must experience growth opportunities within organization

Provide alternate work schedules

Some companies have implemented programs for flexible hours, telecommuting, job sharing, four-day work weeks, and transportation subsidies This allows employees to gain greater control over how, where, and when they work which leads to better work/life balance and helps to retain them

1.3.5 Creating a comfortable work environment

Working in a comfortable work environment has an invariable and invaluable positive effect on the efficiency of the employee Actually speaking, an employee spends more time in the work atmosphere than he or she spends at home, and it is only practical that he or she has the best environment to work in There are several key elements to create a comfortable and fun work environment:

Working Atmosphere

First effective strategy for stimulating is, there should be healthy office working atmosphere because employees get lot of stimulation good working atmosphere Working place should be attractively designed and maintained The working atmosphere should be free from any kind of politics and bad things Every employee should be happy by his colleague‘s growth It‘s very essential that everyone must take initiative for doing any type of work Always be clear in making any rule or policy

Communication

Every employee has a home life that will affect their work life in varying degrees Have a meeting about how they can effectively put problems aside to concentrate on work, may want to do this one on one or in small

productive for people to hear about others home lives and the problems surrounding them, and then work, it brings a negative attitude to the group Always have a suggestion/message box, just in case managers aren't available

to listen to workers concerns

Balance work and personal life

Family is incredibly important to team members When work begins to put a significant strain on one's family no amount of money will keep an employee around Stress the importance of balancing work and one's personal life Small gestures such as allowing a team member to take an extended lunch once a week to watch his son's baseball game will likely be repaid with loyalty and extended employment with an organization

Allow employee to share their knowledge with others

The highest percentage of information retention occurs when on shares that information with others Having team members share when they have learned at a recent conference or training workshop will not only increase the amount is information they will retain, but also lets a team member know that

he is a valuable member of the organization Facilitating knowledge sharing through an employee mentoring program can be equally beneficial for the team member being mentored as well as mentor

Colleagueship factor

Colleagueship factor also creates an attachment to work Working in an environment where everybody is eager, enthusiastic, responsible and helpful when needed, no one will have a desire to go In contrast, if staff are jealous

to one another and talk to and forwards their colleagues, they would feel upset

no matter how they love their job

Allow team members to share their knowledge with others

The highest percentage of information retention occurs when one shares that information with others Having team members share what they have learned at a recent conference or training workshop will not only increase the amount of information they will retain, but also lets a team member know that he is a valuable member of the organization Facilitating knowledge sharing through an employee mentoring program can be equally beneficial for the team member being mentored as well as the mentor

The quality of supervision and mentorship

It has been said so often that it is almost cliché, but people leave, not their jobs Supervisors play the largest role in a team member‘s development and ultimate success within an organization All employees want

to have supervisors who are respectful, courteous, and friendly – that is a given But more importantly team member want supervisors who se clear performance expectations, deliver timely feedback on performance, live up to their word and promises, and provide an environment where the employee can grow and succeed Failure by supervisors and management to provide this can cause an employee to start looking for greener pastures

The comfort level of employee depends a lot on boss or manager If managers are cold, then they will be too If managers aren't comfortable, they usually will as well Help employees have work relationships and learn how

to leave private lives at home, keep the work habitat comfortable and party every once in a while These tips will keep employees coming to work with a smile and going home after a productive day

1.3.6 Coaching programmes

critical to developing long-term loyalty Employees often benefit from, and enjoy having, a mentor in the workplace Your employees may want to participate in a mentoring programme that could include one-on-one meetings, goal setting, skill development and more

1.4 Employee retention in Garment and textile industry

1.4.1 Overview on Vietnam’s garment and textile industry

Vietnam‘s garment and textile sector has seen fast and sustainable growth over the past years, playing an important role in national socio-economic development

Vietnam is one of the top 10 countries that have highest export turnover

of garment and textile in the world The sector aims to earn an export turnover

of US$15 billion by the end of 2012, US$22.5 billion by 2015 and US$31 billion by 2020, maintaining its leading position in exports

Despite the global economic downturn in recent years, the sector has seen impressive export performance Export turnover reached more than US$11 billion in 2010, up 24% against 2009, US$13.8 billion in 2011, accounting for 16.5% of the country‘ total export turnover and up 38% against 2010 The sector‘s import surplus fetched US $6.5 billion with localization rate reaching 50% The sector targets to ship US$15 billion in

2012, an increase of 10%-12% against 2011

Although the industry is experiencing increased costs, power shortages and administrative difficulties, perhaps one of the biggest issues facing Vietnam's textile and garment industry is a labor shortage _specifically, of skilled workers New production technology being implemented requires

higher skilled workers, which is causing labor costs to rise In addition, in May 2011, Vietnam raised the minimum wage by almost 14 percent, and further salary increases are expected

The effect of labor shortages was worse for the garment industry because of the labor intensive nature of the industry and especially the fact that wages were generally lower in the garment industry than in other manufacturing industries Thus the industry had a hard time competing with other industries (e.g electronics) for labor

In garment industry, the unsettled thinking is always in labor mind Especially, due to specific characteristic of garment industry, most labor are woman and they think that after get married and past their youth, the productivity will decrease Therefore, garment industry is short of skilled labor besides unskilled labor

1.4.2 Human resource management and development solution

To solve the difficulties in lack of skilled labor, Vietnam garment and textile industry posed the Human resource management and development solution for whole industry

- To study and apply an advanced management method that can improve management efficiency in garment and textile enterprises State-owned enterprises especially must find out measures to improve the efficiency of the ―one leader‖ system complying with ISO-9000 management standard The director is wholly responsible for all activities so he/she must be granted all needed rights to legally carry out his/her duty

- All garment and textile enterprises need to make a plan to build up a management Information network for improving the efficiency of

- In order to receive suitable technology and import compatible equipment, the re-enforcement of research institutes and employment of specialized experts is necessary It may also be necessary to hire foreign experts for the efficient implementation of investment projects

- Mobilization of human resource from well operating enterprises can be done to support enterprises in difficulty or generating new investment projects

- Foreign and technical experts can be hired to solve problems of some enterprises or management of new investment projects

- New treatment mechanism (actually an enterprise culture) both mentally and materially can be established to attract all sources of intellectuals for the development of the garment and textile sector

- Vocational training schools and centers must be improved (including employment of foreign experts) to improve training efficiency that will meet the booming requirement for management and technical staff in the time to come

Chapter summary:

The literature overview chapter presents a general overview on employee retention such as:(i) Definition of employee retention, (ii) Reasons of employee retention, (iii) Factors make employees leave Company The chapter also introduces employee retention components: (i) Work environment and Job Design, (ii)Leadership, (iii) Employee Recognition, Rewards and Compensation The next part of the chapter shows tactics to retain skilled employees :(i) Employee Compensation,(ii) Employee Benefits,(iii)Employee Recognition and Reward Program, (iv) Job

satisfaction, (v) Creating a comfortable work environment, (vi) Coaching program The last part is Employee retention in Garment and textile industry

The thesis focuses on the importance of retention, understand how people feel and what action is needed to retain skilled employees From that point have an overview and an argument base to figure out the status quo of employee retention at Mai Diem Company to analyze, evaluate and find out effective solutions in the next chapter

CHAPTER 2: ANALYSIS OF MAI DIEM’S EMPLOYEE RETENTION

2.1 Overview of Mai Diem Garment and Textile Company

Address: Block 39-40-42 An Xa industrial zone, Nam Dinh city

Year of foundation: February 28th 2002

Mai Diem Garment and Textile Company were officially established on 28th February 2002 It had formerly operated as clothing production factory with only 4 workers working on the 30 square-meter area The factory itself was established in 1999 It was in 2002 that the Mai Diem increased the workforce to 50 workers with high skills, with the area expanding to 300 square meters Realizing the potential and underdevelopment of the knitting industry in Nam Dinh, Mai Diem has decisively invested in two knitting machines It was then the Company focused on producing knitted textile and clothing Mai Diem Company has expanded its areas of operation to 10,000 m2 in Hoa Xa industrial zone with the permission from the Government when the Company realized the demand for increasing the productivity It was in the October, 2006 that the Company finally moved to new workplace and increased its workforce to 200 skilled workers The period from 2006 to 2008 was seen as the most productive one in the history of operation in Mai Diem

In the later 2008, the Company faced the workforce-related crisis, consequently losing 40 workers as the result This issue has struck the Company heavier due to the nature of the industry that requires a high number

of workers working The crisis has given the Company difficulties because the production contract was signed already There were various issues related human Resources management within Mai Diem from 2009 until now, leaving the Company in the unstable condition and therefore affects the

business The solutions for attracting and retaining skilled workers have become the most important issues that the Company is facing

Areas of business in Mai Diem Garment and Textile Company:

 Producing and making sales with cotton, cloth and other textile products

 Printing, washing and cleaning textile products

 Making sales with machines, material and components in the related field

textile- Covering the car-parking, product delivering and product checking

 Doing business in the hospitality industry

 Air- and river-transportation

 Contract- and routine-transportation

 Doing business in the domestic tourism field

Figure 2.1 Steps of the research 2.2.2 Questionnaire development

The questionnaire in the research of this study consists of 42 questions, covering four different topics The survey is made with the sole purpose of extracting information from the participants by having them making choices

on the 5-scale rating in three different categories, ranging from (a) ‗not at all important‘ to ‗very important‘, (b) ‗strongly disagree‘ to ‗strongly agree‘, (c)

‗very dissatisfied‘ to ‗very satisfied‘ The description of four topics is illustrated below:

Topic 1: The benefits program

Topic 2: Strategies

Topic 3: Organizational structure

Topic 4: Personal satisfaction

In order to minimize the wasted time, the questionnaire has been translated into Vietnamese for the convenience of the participants The version on the Appendix 1 is the English version of the questionnaire

2.2.2 Questionnaire development

The questionnaire in the research of this study consists of 42 questions, covering four different topics The survey is made with the sole purpose of extracting information from the participants by having them making choices

on the 5-scale rating in three different categories, ranging from (a) ‗not at all important‘ to ‗very important‘, (b) ‗strongly disagree‘ to ‗strongly agree‘, (c)

‗very dissatisfied‘ to ‗very satisfied‘ The description of four topics is illustrated below:

Topic 1: The benefits program

Topic 2: Strategies

Topic 3: Organizational structure

Topic 4: Personal satisfaction

In order to minimize the wasted time, the questionnaire has been translated into Vietnamese for the convenience of the participants The version on the Appendix 1 is the English version of the questionnaire

2.2.3 Target Population

The questionnaire is conducted in Mai Diem Textile and Garment Company The questionnaire is mainly distributed to 100 employees, representing the whole Company employees (145 labors) while the in-depth interview is conducted with the General Director of Mai Diem and the Human

of one hundred questionnaires are gathered, including the questionnaire instruction and collection time

Table 2.1: Mai Diem employee’s response rate

naire sent

Questionna ire received

Resp onse rate

Mai Diem Textile and

Garment Company

%

It can be seen from the table above that the response rate has reached

100 per cent, with the 100 questionnaire received out of 100 questionnaire sent to the employees for data collection

2.3 Findings and analysis

The objective of this part of the research is to identify the perception of the Mai Diem employees on various factors, ranging from salary, compensation and benefit, working environment to career promotion chance and employee satisfaction The first part of the questionnaire is the benefit program The researcher applies the pie chart in the analysis process of the questionnaire

2.3.1 Benefit programs

There are nine factors in the benefit program package with rating from

1, representing ‗not at all important‘ to 5, representing ‗very important‘ The

first factor salary and compensation is illustrated in the figure below: