Human resource management in district 11 public service limited company

HUMAN RESOURCE MANAGEMENT IN DISTRICT 11 PUBLIC SERVICE LIMITED COMPANY CAPSTONE PROJECT REPORT Ho Chi Minh City, 2013 Group No.: 3  LE NGUYEN NGOC SON  PHAM THI THU TRANG  CAO

HUMAN RESOURCE MANAGEMENT

IN DISTRICT 11 PUBLIC SERVICE

LIMITED COMPANY CAPSTONE PROJECT REPORT

Ho Chi Minh City, 2013

Group No.: 3

 LE NGUYEN NGOC SON

 PHAM THI THU TRANG

 CAO ANH THU

ANDREWS UNIVERSITY GRIGGS UNIVERSITY

GLOBAL ADVANCED BACHELOR OF BUSINESS

ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

HUMAN RESOURCE MANAGEMENT IN DISTRICT 11

PUBLIC SERVICE LIMITED COMPANY

Group No.: 3

• LE NGUYEN NGOC SON

• PHAM THI THU TRANG

• CAO ANH THU Advisor: Mr VU THAI HA MBA

Ho Chi Minh, 2013

Group 03_GaBBA.SP0109 i

Abstract

Currently, Vietnam has become a member of the World Trade Organization officially, the legal mechanism are opening in the direction of creating a free competition market, strong competition to win the new market, expand or protect the current market share The private enterprises will join the competition between them and the state enterprises in the market, or competition between domestic enterprises and foreign enterprises This competition takes place

in all industries and sectors Therefore, the District 11 Public Service Limited Company is not out of the rule

Besides, the current market is a huge demand for sanitation services to ensure the maintenance

of buildings, green cleaning, especially the commercial building projects, the corporate office, parks, senior housing Thus, the supply market of sanitation services is great potential for the companies involved

However, to build a team has high qualification and ability to adopt a policy of effective human resource management, the company need to identify the business development objectives in their future, combined with develop the human resource department which can work effectively As a result, taking the policy on human resource planning, recruitment, training and evaluation capability to find the right staff who meets the standard of the development objectives of the company Moreover, focusing on improving the operation of the department,

as well as coordinating activities between departments smoothly, assign clear responsibilities and rights Developing a job description and specific work standards apparently help the employees in the company to understand their powers and duties, as well as the ability to reach their future from which are capable promote the development of innovative companies in the future This capstone project addresses all these issues in District 11 Public Service Limited Company "

Thirdly, we also wish to express our gratitude to the officials and other staff members of

“District 11 Public Service Limited Company " who rendered their help during the period of our project work

Moreover, our special thanks to Mr Le Pham Duy Bao in the company for kind co-operation to the completion of our project work

Last but not least, we wish to avail our self of this opportunity, express a sense of gratitude and love to our friends and our beloved parents for their manual support, strength, help and for everything

Group 03_GaBBA.SP0109 iii

Statement of Authorship

Except where reference is made in the text of the report,

This report contains no material unpublished elsewhere or extracted in hole

All of the information is provided in the thesis is made by us

No other person’s work has been used without due acknowledgement in the main text of the thesis

This has not been submitted for the award

of any degree of diploma in any other institution

Date: 08th May, 2013

_

Le Nguyen Ngoc Son

Pham Thi Thu Trang

Cao Anh Thu

Group 03_GaBBA.SP0109 iv

ORGANIZATIONAL CONTACT INFORMATION

- Company name : District 11 Public Service Limited Company

- English name : District 11 Public Service Company Limited

- Shortcut name : EPS Co.Ltd

- President : MR Nguyen Thanh Liem

- Head Quater: 12, street 2, Lu Gia housing, ward 15 District11

- Phone: 0838662086 Fax : 0838662224

- Email : ctdvcich.q11@tphcm.gov.vn

- Account Number : 102010000171904

- Tax code : 0301148063

- Capital money of District 11 Public Service Limited Company : 34.035.000.000 VND

- Project liaison name: Le Pham Duy Bao

- Project liaison title: Human Resource Management

- Project liaison phone: 0937343490

- Project liaison email: dbeconomic@gmail.com

Group 03_GaBBA.SP0109 v

TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENT ii

STATEMENT OF AUTHORSHIP iii

ORGANIZATIONAL CONTACT INFORMATION iv

TABLE OF CONTENTS v

LIST OF APPENDICES viii

CHAPTER 1: METHODOLOGY 1

Research design 1

CHAPTER 2: ORGANIZATION AND HUMAN RESOURCE DEPARTMENT DESCRIPTION 1.1 Organization Description 2

1.1.1 Organization vision and mission 2

1.1.2 Organization history 2

1.1.3 Scope of Business 3

1.1.4 Organization Structure 3

1.1.5 SWOT analysis 4

2.1.5.1 Strengths 4

2.1.5.2 Weakness 5

2.1.5.3 Opportunities 5

2.1.5.4 Threats 6

2.2 Human Resource Department Description 7

2.2.1 Human Resource department function 7

2.2.2 Human Resource Department structure 7

2.2.3 Human Resource Department current working plan 8

2.2.3.1 Human Resource activities 8

2.2.3.2 Administration activities 8

Group 03_GaBBA.SP0109 vi

CHAPTER 3: LITERATURE REVIEW 9

3.1 The Brief Overview of Human Resources Management 9

3.1.1 Definition 9

3.1.2 Purposes 9

3.1.3 Functions 9

3.1.3.1 Planning and Recruiting 9

3.1.3.2 Training and Developing 9

3.1.3.3 Maintaining and Managing 10

3.1.3.4 The challenges for the current human resource management 10

3.2 Recruitment and Selection 10

3.2.1 Sources of recruiting 10

3.2.2 The factors affect the ability to attract staff of the organization 11

3.2.3 The factors limit the ability to attract candidates of the business 11

3.2.4 Hiring process 12

3.3 Performance Appraisal 12

3.3.1 Purposes 12

3.3.2 Measurement tools 12

3.3.3 Implementing assessment process 13

3.3.4 Appraisal Interview 13

3.4 Training and Developing 13

3.4.1 Purposes 13

3.4.2 Identifying training needs 13

3.4.3 Classifying the form of training 14

CHAPTER 4: DATA COLLECTION AND DATA ANALYSIS 15

4.1 Focus Group Interview 15

4.2 Data Collection 15

4.3 Data analysis 26

Group 03_GaBBA.SP0109 vii

CHAPTER 5: EVALUATING THE CURRENT STATUS OF HUMAN RESOURCE OF

THE COMPANY 17

5.1 Evaluating Current Human Resource 17

5.2 Evaluating the Current Recruitment 18

5.3 Evaluating the Current Performance appraisal 20

5.3.1 In case of evaluating the ability of employee 20

5.3.2 In case of evaluating the competition between department and department 20

5.4 Evaluating the current training and development 20

CHAPTER 6: RECOMMENDATION TO IMPROVE HUMAN RESOURCE MANAGEMENT 22

6.1 Reorganizing the Human Resource Department 22

6.2 Building Recruitment Polices 25

6.3 Creating Performance Appraisal System 26

6.4 Opening Training and Development Programs 29

IMPLICATION AND FURTHER STUDY OPPORTUNITY 33

REFERENCES 34

APPENDICES 35

Group 03_GaBBA.SP0109 viii

Group 03_GaBAA.SP0109 1

CHAPTER 1: METHODOLOGY

Understanding the human resource management process of District 11 Public Service Limited Company through analysis of current HR policies such as:

 Policymaking, and human resources forecast

 The process of job analyzes

 The policies recruit personnel

 The policies human resources evaluated

 Regulation of other departments and role of administration department

Thematic are studied through analytical methods, observation in the workplace, and organization chart of the company The information gathered in period of probation is mass

up operation regulations departments, HR policies related to the planning, recruitment, training, staff competency assessments Since then could make comments and arguments on

HR activities management Through which offer recommendations to overcome these disadvantages longer exist

Research design:

Report consists six chapters, 30 pages length And focus to research about 4 main aspects: Human Resource, Recruitment, Performance Appraisal and the training and development programs in District 11 Public Servie limited company

The chapters:

Chapter 1: Methodology

Chapter 2: Organization Discription

Chapter 3: Literature Review

Chapter 4: Data Collection and Data Analysis

Chapter 5: Evaluating the Current Status of the Company

Chapter 6: Recommendation to Improve Human Resource Management in the Company

Mission:

Public contributions are the company’s strength Its main activity is to strengthen

continually socially useful activities

In order to acquire this mission, the company has to study and remain active in some new

types such as: studying investment projects and taking advantage of public transport; and investing in the construction of maintaining parks as well as green grasses in district 11

2.1.2 Organization history

The company was established and invested by the government The Enterprise of urban transport work in district 11 was the predecessor of the company Company was formed from three teams: Hygiene cleaning team, the traffic works team and the Public Works team The main activities are public Hygiene, building, repair works traffic and urban projects After many change in company’s duty, scope of business and name, it has been changed into the Public Service Limited Company of District 11 recently (More detail in the APPENDICE)

Group 03_GaBAA.SP0109 3

2.1.3 Scope of Business

Environment and Public contribution activities

The Public Service Limited Company of District 11 is the state-owned company, which has public interest in activities and many other business careers in the construction field as main functions and is directly under the guidance of HCMC people’s committe In order to work in:

- Managing, improving and building many traffic and urban projects

- Collecting and transporting garbage; ensuring urban area hygiene

- Managing, hiring state-owned houses out on current regulations

2.1.4 Organization Structure

Structure of Organization is divided into 3 main lines according to 3 functions: technical, planning, human resource and each line is controled by a vice president They support each other and report everything to the president [More information in the (Appendices, A, 2)]

Group 03_GaBAA.SP0109 4

2.1.5 SWOT analysis

2.1.5.1 Strengths

Its competitive ability in the industry:

The public service aims at serving demands of caring and cleaning for public projects and all people, so the company seems to have no competitor It only bid for supplying the hygiene service for managing organs in its area

However, the company must face many big competitors because it also supplies services for private clients Unlike the state-owned-companies, the company is not under control of the law, it does not pay tax and its dispute solving does not based on the law, leading to many difficulties for the company

Group 03_GaBAA.SP0109 5

The company’s key strength is human resource:

The staffs are professional level and good experience They can understand and deal with problems quickly Moreover, they are able to transmit their experience to the young They work together in unity, so it is easier for them to reach decisions

2.1.5.2 Weakness

The ability to attract human resource with high level:

There are still some limitations to improve The working environment has not been modern and democratic yet; the salary ranges has had some problems; the staff’s promotion policy have not been attractive; the company’s recruitment is internal and it is usually through introduction

Competitive ability about personnel:

The more developed country is, the higher level workers become so that the public service is not considered as an important industry and salary policy is not attractive, leading to limitation on attracting workers

Toward workers with high knowledge, recruitment demand is not high and public, promotion ability and working environment is not attractive, so it is difficult to attract good staff compared to other fields Finally, the company’s labor recruitment faces lots of challenges Culture:

The company’s culture is also an important aspect It has not built a specific culture yet and been strongly affected by family feature for solving problems Therefore, the company has not created a strong link between offices and departments as well as an active working environment It needs to plan clearly to develop easily in the future and build particular personnel plans

2.1.5.3 Opportunities

Group 03_GaBAA.SP0109 6

Technology:

In the past years, information technology has greatly developed from using separate computers to using the computer systems integrated with enterprise resource planning (ERP), which changes thoroughly the company’s management method If deploying promptly the system of human resource management through many information technology solutions, the company will take lots of advantages in management and competition

Customers – the units demand hygiene services:

Customers who can flexibly apply price level and make high profits for the company The company’s price, however, is usually higher than competitive rivals – the private organizations because the restriction of operation areas and the bounds of regulations

2.1.5.4 Threats

The labor market:

To meet economic development targets in 2011, the city is forecast to need about 265,000 workers In which, blue – collar workers account for over 45%, white- collar ones is about 20% and about 45% belongs to intermediate labor However, the market only meets about 50 – 60%

The scarce labor in the market will affect the company’s plan of human resource development especially the demand of blue - collar worker recruitment Besides, it is very difficult to attract many good managers because the company has to meet their high demands The company is the state – owned enterprise, so salary ranges must comply with the pay grade system and positions that the government fixed Therefore, it is not easy to build the interesting salary ranges in order to attract the talented people for the company

Economic factor:

The high inflation affects the people’s lives because of price increase That also greatly influences the company due to the pressure of salary increase for workers and officers Although the performance expansion of many service contracts of hygiene, green trees and water supplying will create more its turnover and interests, the company also faces lots of

Group 03_GaBAA.SP0109 7

difficulties because many partners will suggest reducing prices or stopping services to

cooperate with other private units with cheaper prices

The law regulations:

Like other state- owned- companies, most activities of the company are directly under the control of the state’s regulations Therefore, it is so difficult to build a good manager group The organization structure building and operation regulations like recruitment, working regulations and group management need to be passed by the state organs

Besides, the company uses the legal regulations to change operation methods from the state – owned company into the limited company in organizing and arranging human resource system in order to appropriate for new operation forms

Furthermore, spending decrease, budget saving as well as compulsive costs of the environmental protection and hygiene also affect the company’s operation The increase of service costs have made customers not satisfied and reduced its competition in the market

2.2 Human Resource Department Description

2.2.1 Human Resource department function :

According to directorate’s decision, Human Resources Department is responsible for recruiting, organizing staffs, and in charge of clerical work, making health insurance card, observing apartment buildings’ activities

2.2.2 Human Resource Department structure:

There are 5 members in this department and the manager decides every work according to Human Resource by the report of vice manager

Group 03_GaBAA.SP0109 8

2.2.3 Human Resource Department current working plan:

Undertaking organization of assignments and managing administrative assignments

2.2.3.1 Human Resource activities:

The Human Resource department has responsibilities for recruiting and organizing human resource according to decision of the board of directors Particularly, they are responsible for documentation of assignments, registering social insurance and medical, monitoring operation of tenants

2.2.3.2 Administration activities:

There are three main activities Firstly, the administration activities are managing the company seal; receiving and transporting official documents; saving files and arranging meeting schedules, including vehicles for tasks and protocols Secondly, they also have responsibilities for security keeping, combustion prevention, hygiene and environmental landscape Finally, they offer suggestions for the board of directors to repairing and buying properties and equipment to serve office administrative assignments; preparing instruments and labor safety uniforms for workers

Group 03_GaBAA.SP0109 9

CHAPTER 3: LITERATURE REVIEW

3.1 The Brief Overview of Human Resources Management

3.1.1 Definition:

The human resource management is the process “which consists of eight activities necessary for staffing the organization and sustaining high employee performance” (Stephen

P Robbins, Marry Coulter, Management 353) The first three activities ensure that competent

employees are identified and selected; the next two involve providing employees with date knowledge and skills; and the final three ensure that the organization retains competent and high performing employees

up-to-3.1.2 Purposes:

Some of the overall purposes of human resources management are to ensure that all employees perform their duties to promote the goals of the company Also, human resources are responsible for taking the full advantage of the capabilities of the employees and placing the right employees in the right job positions (http://ibsconsult.wordpress.com)

3.1.3 Functions:

Human resource management is responsible for:

3.1.3.1 Planning and Recruiting

HR planning is the process by which managers “ensure that they have the right number and kinds of capable people in the right places and at the right times” (Stephen P

Robbins, Marry Coulter, Management 356) Through planning, organizations can avoid

sudden talent shortages and surpluses And recruitment is locating, identifying and attracting capable applications

3.1.3.2 Training and Developing

Training and developing are an important human resource management activity As job demands change, employee skills have to change This is the process that provides employees specific skills, or helps those correct deficiencies in performance (http://quantritructuyen.com)

Group 03_GaBAA.SP0109 10

3.1.3.3 Maintaining and Managing

After hiring the right people and training them, the HR department needs to maintain and manage them This process includes the following contents: orientation, transfer, promotion; guidance and counseling; evaluation and performance management work; motivate, reward and build teamwork good; manage the termination process

(http://www.saga.vn)

3.1.4 The challenges for the current human resource management

There are three types of HR challenges facing managers today Firstly, it is an environmental challenge It included the external forces like rapid change, the internet revolution, workforce diversity, globalization, legislation, evolving work and family roles, skill shortages, rise of the service sector, natural disasters It influences organizational performanceand largely beyond management’s control So managers need to monitor the external environment for opportunities and threats Secondly, it is an organizational challenge

It included the internal forces such as competitive position, decentralization, downsizing, organizational restructuring, self-managed work teams, the growth of small businesses, organizational culture, internal and data security It is important for firms to be proactive, to take action before problems get out of hand and it can be done only by managers who are well informed about important HR issues and organizational challenges Lastly, it is an individual challenge It can be matching people and organizations, ethics and social responsibility, productivity, empowerment, brain drain, job insecurity deal with decisions pertinent to specific employee It almost always reflects what is happening in the larger organization and how the company treats its individual employees is also likely to affect the organizational challenges discussed (http://www.saga.vn)

3.2 Recruitment and Selection

3.2.1 Sources of recruiting

According to Dr Trần Kim Dung (2006, Quản trị nguồn nhân lực, Nxb Thống Kê, TP

Hồ Chí Minh), there are two kinds of recruitment sources The first one is internal sources, which are primarily three - transfers, promotions and Re-employment of ex-employees Re-employment of ex-employees is one of the internal sources of recruitment in which employees

Group 03_GaBAA.SP0109 11

can be invited and appointed to fill vacancies in the concern There are situations when employees provide unsolicited applications also Internal recruitment may lead to increase in employee’s productivity as their motivation level increases It also saves time, money and efforts

ex-The second one is external sources which have to be solicited from outside the organization External sources are external to a concern But it involves lot of time and money The external sources of recruitment include - Print and radio advertisements which can be used for local recruitment efforts (e.g newspapers) and for targeted regional, national,

or international searches; Internet advertising and career sites which are relatively cheap, more dynamic & often produce faster results than newspaper help-wanted ads; employment agencies are certain professional organizations which look towards recruitment and employment of people Many organizations use external contractors to recruit and screen applicants for a position The staffing firm is paid a fee based on the salary offered to the new employee It can be particularly effective when the firm is looking for employees with a specialized skills; college recruiting includes company visits to college campuses, job fairs, and relationships such as internships It is value in interacting with college students, developing relationships, and generating interest in the college pool of candidates; recommendations are certain people who have experience in a particular area They enjoy goodwill and a stand in the company There are certain vacancies which are filled by recommendations of such people etc

3.2.2 The factors affect the ability to attract staff of the organization

There are two main factors can affect the ability to attract staff of the organization The first factor is internal factors which can be included the requirement- attraction of work like working condition, salary, promotion, etc.; or the image of the organization like the reputation, scope of business, brand, etc The second one is external factors which can be included economic trend, unemployed workers rate (http://ibsconsult.wordpress.com)

3.2.3 The factors limit the ability to attract candidates of the business

There are some factors limits the ability to attract candidates Firstly, the job is not attractive The job is considered boring, low-income, less promotion opportunities, dangerous, low social position, etc will be difficult to attract qualified candidates Secondly, the business

Group 03_GaBAA.SP0109 12

is not attractive Although candidates interested in the job but they did not like the type, name, policies, economic sectors, reputation and prospects of the business The business was underestimated by candidates often have less applicants and it is difficult to attract good candidates (http://ibsconsult.wordpress.com)

3.2.4 Hiring process

There are three steps in hiring process Step 1 is recruitment This is the process of

generating a pool of qualified candidates for a particular job Step 2 is selection This is the process of making a “hire” or “no hire” decision about each applicant for a job Step 3 is

socialization that orients new employees to the organization and to the units in which they

will be working (http://www.saga.vn)

3.3 Performance Appraisal

3.3.1 Purposes

The purpose of the performance appraisal is to provide feedback on an employee's performance, to create a development plan for areas of improvement and to provide rationale

for a merit increase (Luis R Gómez – Mejia, David B Balkin, Robert L Cardy, Managing

Human Resources) Taken together, an employee's performance appraisals can provide the

basis for a promotion

3.3.2 Measurement tools

Measurement tools can be classified in two ways Firstly, the type of judgment that is required such as relative or absolute Relative judgment system is an appraisal format that asks supervisors to compare an employee’s performance to the performance of other employees doing the same job Absolute judgment system is an appraisal format that asks supervision to make judgments about an employee’s performance based solely on performance standards

Secondly, the focusing of the measure is trait, behavior, or outcome Trait appraisal instruments are an appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring Behavioral appraisal is an appraisal tool that asks managers to assess a worker’s behaviors Outcome appraisal is an appraisal tool that asks managers to assess the results achieved by workers (http://quantritructuyen.com)

Group 03_GaBAA.SP0109 13

3.3.3 Implementing assessment process

There are three steps in the performance appraisal Step one is identification This step will determine what areas of work the manager should be examining when measuring performance Step two is measurement This step will make managerial judgments of how

“good” or “bad” employee performance was Step 3 is management In this step, the goal of any appraisal system will be overridden.( http://quantritructuyen.com)

3.3.4 Appraisal Interview

After completing the performance rating the supervisor usually conducts an interview with the worker to provide feedback It is one of the most important parts of the appraisal process Many managers dread the performance appraisal, particularly if they do not have good news The HR department can help managers by offering training in conducting interviews, providing role-play practice, and offering advice on thorny issues

Performance reviews are sometimes separated into two sessions: one to discuss performance and the other to discuss salary but, research supports doing them together: the

salary discussion in an appraisal session has a positive impact on how employees perceive the appraisal’s usefulness (Luis R Gómez – Mejia, David B Balkin, Robert L Cardy, Managing

3.4.2 Identifying training needs

There are three level of training needs The first level is organizational analysis It

examines broad factors such as organization’s culture, mission, business climate, long- &

Group 03_GaBAA.SP0109 14

short-term goals, and structure The second level is task analysis which is an examination of

the job to be performed based on job analysis It used to identify KSAs (Knowledge, Skills, and Abilities) required to perform the job adequately Also, KSAs are used to determine the

kinds of training needed The last level is person analysis It determines which employees

need training and examine how well employees carry out tasks that make up their jobs (http://www.crmvietnam.com)

3.4.3 Classifying the form of training

In reality, there are many types of training But they were divided into two groups The first group is general training It includes communication skills, computer systems application and programming, customer services, executive development, management skills and development, personal growth, sales, supervisory skills, technological skills and knowledge -

The second group is specific training It includes basic life/works skills, creativity, customer education, diversity/cultural awareness, remedial writing, managing change, leadership, product knowledge, public speaking/presentation skills, safety, ethics, sexual harassment, team building, wellness and others (http://www.saga.vn)

Group 03_GaBAA.SP0109 15

CHAPTER 4: DATA COLLECTION AND DATA ANALYSIS

4.1 Focus Group Interview:

We operate a small focus group interview to analyze the thinking of employee in the company about Human Resource, Recruitment, Performance Appraisal and Training and Development Process The targets we choose are 5 employees in 5 departments (Planning, Human Resource, Accounting, Technical, House management) of the company and they will

be asked 4 questions:

-Question 1: What do you think about the Human Resource in the company?

-Question 2: What do you think about the Recruitment in the company?

-Question 3: What do you think about the Performance Appraisal in the company?

-Question 4: What do you think about the Training and Development Process in the company?

-A few employees said that: it is quite simple but still accepted

of 5 employees were interviewed said that they were not happy with the current one because it

is useless and could not evaluate anything exactly Therefore, it makes the good employees and the normal employees are the same and it would reduce the willing to improve the performance of the good employees In an overall, most of them want the company have a new plan to improve the Human Resource System (Human Resource, Recruitment, Performance Appraisal and Training and development Process) to evaluate right ability of them and make them want to expand the business

Group 03_GaBAA.SP0109 17

CHAPTER 5: EVALUATING THE CURRENT STATUS OF HUMAN RESOURCE

OF THE COMPANY

5.1 Evaluating Current Human Resource

Most of them are older labors, and they have some good points such as much experience, ability to solve complicated works However, they still have few weak points In case of cleaners, the decrease of productivity and flexibility in work due to age and health In

Lower High School