Orienting development strategy of human resource in powercompany no.2 in perido 2010 - 2020

55 2.3.1 Model of Organization 55 2.3.2 Analysis of staff employees of the Power Company No.2: 58 2.3.3 Analysis of leadership and management staff of Power Company No.2 62 2.3.4 Recrui

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

ORIENTING DEVELOPMENT STRATEGY

OF HUMAN RESOURCE IN POWER COMPANY No.2

IN PERIDO 2010 - 2020

Group: No.6 Students’ name:

1/ Ho Quang Ai group’s leader 2/ Ho Quoc Viet

3/ Duong Huu Tuong 4/ Lam Hoang Phuoc

HANOI, 2009

ACKNOWLEDGEMENTS

We - the students of Group 6 - would like to express my heartfelt gratitude to all of leaders of the Training Program Master of Business Administration International (Gemba) for facilitating to implement our Capstone Project Report and creating good conditions to associate the knowledge and skills learned from the dedicated guidance throughout the MBA program with practical business issues and providing valuable guidance and comments to complete graduate homework program;

We would like to express my thanks to all faculty and staff members who guide (teach) GeMBA01.E04 class for their instruction and convey special knowledge to all students together with good feelings that they give the students during the study

We would like to express my faithful appreciation to Leaders and Professional Departments of Power Company No.2 for their enthusiastic support during the period of data collection and constructive suggestions to complete this thesis

The Capstone Project Report has referred to the lecture note (of the MBA program)… In spite of many efforts and close coordination of the members in the group 6, because of limited time, the thesis has certainly shortcomings, thanks for the sympathy of the Instructors and leaders of program

Best regards,

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

TABLE OF CONTENTS iii

LIST OF ABBREVIATIONS vi

LIST OF TABLES vii

LIST OF FIGURES, GRAPHS ix

INTRODUCTION 1

1 The nessesary for our project 1

2 Objective and task of our project 2

2.1 Objective 2 2.2 Tasks 2 3 Object and scope of studying 3

3.1 Object of Studying 3 3.2 Scope of study 3 4 Method and source material 3

4.1 The method 3 4.2 Source material 3 5 Benefit of our project 4

6 Content of project 4

Chapter 1 5

THEORETIC BASIS OF HUMAN RESOURCE MANAGEMENT 5

1.1 OVERVIEW OF MANAGEMENT 5

1.1.1 Concept of strategic management 5 1.1.2 Requirement during building and implementing strategy 5 1.1.3 Role of strategic management 5 1.1.4 Stages of strategic management 6 1.1.5 The levels of strategic management 6 1.1.6 Methods and instruments for building strategy 7 1.2 OVERVIEW OF THE HUMAN RESOURCE MANAGEMENT 8

1.2.1 Concept and the role of human resource management 8 1.2.2 Goals, principles and functions of HR 11 1.2.3 Areas of human resource management in enterprises 12 1.3 HUMAN RESOURCE PLANNING 13

1.3.1 Concept and the role of human resource planning 13 1.3.2 Process of human resource planning 14 1.3.3 Forecast manpower 14 1.4 PLANNING POLICY OF GUARANTEE EMPLOYMENT FOR BUSINESS 16

1.4.3 Assessing capacity to implement the work of staff 20

1.4.5 Training and development of human resource 27

CONCLUSION OF CHAPTER 1 36

Chapter 2 37

ANALYSING MANPOWER ISSUE IN POWER COMPANY No.2 37

2.1 ABOUT POWER COMPANY No.2 37

2.1.1 The process of formation and development 37 2.1.2 Functions and tasks and decentralization 39 2.1.3 The specific points of Power Company No.2: 41 2.2 BUSINESS SITUATION FOR 5 YEARS 2004-2008 43

2.2.1 Situation of developing power grid 43 2.2.2 The situation of developing clients 47 2.2.3 Situation growth of commercial electricity 48 2.2.4 Situation of the average electricity price 50 2.2.5 Current Situation of labor productivity 51 2.2.6 Results of the manufacturing and business in 5 years from 2004 to 2008 52 2.2.7 General Comments 55 2.3 CURRENT STATUS OF MANPOWER IN POWER COMPANY 2 55

2.3.1 Model of Organization 55 2.3.2 Analysis of staff employees of the Power Company No.2: 58 2.3.3 Analysis of leadership and management staff of Power Company No.2 62 2.3.4 Recruited Activities and recruiting manpower of Power Company No.2 66 2.3.5 Arranging and using of human resources of Power Company No 2 68 2.3.6 Regarding to salaries, allowances and other material incentive 70 2.3.7 Training and development of human resources 77 2.3.8 Assessing the human conditions of Power Company No.2: 80 2.3.9 Analysis of external environment 85 CONCLUSION OF CHAPTER 2 93

Chapter 3 95

FORECASTING NEEDS AND ORIENTING DEVELOPMENT OF POWERMAN OF POWER COMPANY No.2 UP TO 2020 95

3.1 DEVELOPMENT OBJECTIVES OF THE COMPANY POWER No.2 TO 2020 95

3.1.1 Policies of Gobernement for the electricity industry: 95 3.1.2 Identify PC2‟s vision and mission 96 3.1.3 Development objectives of the Power Company No.2: 98 3.1.4 Orienting human resources development in PC2 100 3.2 ORIENTING MANPOWER DEMAND OF POWER COMPANY No.2 UNTIL 2020 102

3.2.1 Human resource development Policy of the Electricity of Vietnam 102 3.2.2 Orienting human resources development in Power Company No.2 until

122 3.3.4 Implement training and development of human resource 132

CONCLUSION 148 REFERENCES 152

LIST OF ABBREVIATIONS

JBIC - Japan Bank for International Cooperation

LIST OF TABLES

Table 2.1 Situation of Developing Grid over 2004 - 2008 (Source: Technical

Department) 44

Table 2.2 Power loss rate of the years from 2004 to 2008 (Source: Technical Department) 46

Table 2.3 The situation of developing customers from 2004 to 2008 47

Table 2.4 Growth rate in commercial electricity over 2004 - 2008 48

Table 2.5 Average electricity selling price over 2004 - 2008 50

Table 2.6 Situation of implementing labor productivity 52

Table 2.7 Results of business operations for 5 years from 2004 to 2008 53

Table 2.8 Labor structure by level 58

Table 2.9 Distributing labor in Power Company No.2 59

Table 2.10 Analysing labor by specialized training (Source: Personnel and Training Department) 60

Table 2.11 Analysing staff by education 63

Table 2.12 Analysing staff by age 65

Table 2.13 Arranging staff in Power Company No 2 69

Table 2.14 – Skill level of technical workers in PC2 80

Table 2.15 – Qualification of technical experts (Engineers, BSc in PC2) 80

Table 2:16 Comparison of labor productivity index of PC2 with the other countries‟electricity sector 81

Table 2.17 Labor structure by education 82

Table 2.18 Comparison of labor productivity index of PC2 82

with the other other companies 82

Table 3.1: Identify the needs of the labor in PC2 to 2020 106

Table 3.2: Number of employment needs to recruit to 2020 107

Unit: person 107

Table 3.3: Expected structure of the labor force by level of PC2 108

Table 3.4 Labor demand by level of PC2 109

Table 3.5 plan of adjustment, supplement labor under level structure 110

Table 3.6: labor structure is expected by 2020 111

Table 3.7: Predict the number of managers should be added to 2020 112

Unit : person 112

Table 3.8 Training cost over years 2004 – 2008 138

and estimated cost for training to 2020 138

LIST OF FIGURES, GRAPHS

Figure 1.1 Process of human resource policies 17

Figure 1.2 The process of recruiting manpower 18

Figure 1.3 Bilateral relationship of recruitment and other HRM functions 19

Figure 2.1 Geographical areas of business operations of Power Company No.2 37

Figure 2.2 The Groundbreaking Ceremony of distribution network rehabilitation and expansion Project in Thu Dau Mot Town, Binh Duong Province, ADB loans 39 Chart 2.1 Developing transmission lines and substations for 5 years 2004 - 2008 46

Chart 2.2 Power loss for 5 years from 2004 to 2008 47

Chart 2.3 Developing customer for 5 years from 2004 to 2008 48

Chart 2.4 Growth of commercial electricity over 2004 - 2008 50

Chart 2.5 - Average selling price over 2004 - 2008 51

Chart 2.6 Implementation of labor productivity from 2004 to 2008 52

Chart 2.7 Revenue and profits for 5 years from 2004 to 2008 54

Figure 2.3 Organization chart of Power Company No.2 57

Chart 2.8 Labor structure by education 58

Chart 2.9: Labor structure by age 62

Chart 2.10 Analysing staff by education 64

Chart 2.11 Analysing staff by age 66

Figure 3.1- Solutions to ensure human resource in Power Company No.2 113

INTRODUCTION

1 The nessesary for our project

To survive, develop and go up in competition of market economy, there are many factors to effect business activities of enterprises such as facilities, property, materials, etc., but the important factor is human It is derived from the man, who is impossible without in any enterprise, playing important role in operating and deciding the success or failure of it, so that Human Resouce Management (HRM) is the most important management in the process of manufacturing and business of all enterprises

Power Company No.2 (PC2), subsidiary of Vietnam Electricity (EVN), is independent accounting company PC2‟s main function is distributing and trading power for twenty provinces and cities from Ninh Thuan – Lam Dong to Kien Giang – Ca Mau in The South of Vietnam (except Ho Chi Minh city and Dong Nai province) Along with the development of Vietnam‟s power sector, over the years, PC2 have been always renovated and developed in all respects such as enhancing the stability in operating of power system; ensuring to supply power with safety, continuity and quality; contributing to develop social and economy in Vietnam

According to General scheme of Vietnam Electrical Development Phase VI was approved by the Goverment, in 2020 commercial electricity output which is expected to reach 164.96 billion kWh will be more than three times in 2006 Many advanced and modern power plants as well as electrical transmission and distribution networks will be built Demand for training and retraining of human resource to managing and operating the electrical system is very difficult problem that Electricity of Vietnam has to solve And now, there are also many opportunities and challenges that PC2 has to face when Vietnam integrating into international market economy

For the urgent request as mentioned above, we choose to research project

named "Orienting development strategy of human resources in Power Company No.2 in period 2010 – 2020” Our project focuses on studying deeply in theoretics

and some skills in Human Resource Management, to evaluate the existing human conditions in PC2 and to propose solutions to ensure demand development of human resource in Power Company No.2 up to 2020

The achivement of this project is based on knowledge that we are learned in MBA of Griggs University and practical experience that we have collected during working at PC2

Group‟s members are:

1 Ho Quang Ai

2 Ho Quoc Viet

3 Duong Huu Tuong

4 Lam Hoang Phuoc

2 Objective and task of our project

2.1 Objective

We would like to clarify the scientific background of human resource management, in particular, based on business development strategy in PC2 (such as electrical output, productivity, customer services, prestige, …) to orient human resources development strategy; Analysing the existing manpower in PC2 to find out advantages and limits Since then, we propose some feasibility solutions to ensure developing human resource in PC2 until 2020

Content of our project:

- Based on fundamentals of human resource management, we have applied the method of predicting the needs and orientation human resource to plan for developing human resource in PC2 in the future

- Analysing the quantity and quality of esixting human conditions in PC2

- Predicting demand for human resource and proposing some solutions to develop human resource in PC2 up to 2020

3 Object and scope of studying

3.1 Object of Studying

Human resource management (overview of the role and function of human resource management), human resource planning, human resource orienting and related issues such as attracting and recruiting employees, evaluating performance of staff, salary and allowance policy, training and developing human resource, maintaining employee relationships

3.2 Scope of study

- Time: Studying activities of PC2 from 2003 to 2008

- Scope: studying in 20 cities and provinces belong to management of PC2

4 Method and source material

4.1 The method

The methods as follows is applied:

+ Method of investigation and statistics

+ Method of comparison

+ Method of analysing system

Based on the methods as mentioned above, we give proposing and measuring

to improve of human resource management at Power Company No.2

5 Benefit of our project

- Contributing to systemize theoretics of human resource planning (predicting demand) and orienting policies to ensure human resource in business; clarifying characteristics of staff and employees in electrical sector and objective condition in recuiting and training staff and employees of Power Company No.2 in renovated period

- Based on analysing, evaluating and comparing as mentioned above, we have remarked on advantages, limits and causes of HRM, and then we propose planning and policy to ensure human resource in PC2 up to 2020 to meet the requests of economyics in industrialization and modernization period of our country

- Clarifying and giving our points of views in methods of attracting and recuiting employees, evaluating performance of staff; salary and allowance policy; training and developing human resource, maintaining empolyee relationships in Power Company No.2 in the renovated period

6 Content of project

Beside the introduction, conclusion, documents for reference and appendix, there are also three chapters in our project as follows:

- Chapter 1: Theoretic Basis of Human Resource Management

- Chapter 2: Analysing of the existing human conditions in PC2

- Chapter 3: Predicting the needs and orientation of human resource in Power

Company No.2 up to 2020

Chapter 1 THEORETIC BASIS OF HUMAN RESOURCE MANAGEMENT

1.1 OVERVIEW OF MANAGEMENT

1.1.1 Concept of strategic management

“Strategic management is a process of studying current environment as well

as future environment; planning aims of organization; proposing, implementing and check decisions which were done; to achieve these aims in current and future environment” Besides, strategy is appropriate combination of three factors: Choose the right of stop point; ability of implementing strategy; exploiting efficiently potential

1.1.2 Requirement during building and implementing strategy

- Goal of strategy is to enhance influence of business and obtain competitive advantages

- Strategy have to ensure the safety in trade of business Business strategy has safe zone in which the risk can be happened at minimum level

- Determine scope of business, the goals and basic conditions to implement these ones

- Forecast the business environment in future The more forecast is precise, the more business strategy is suitable

- It should have a standby strategy

- It should be combination of available chances

1.1.3 Role of strategic management

The process of strategic management helps the organizasions recognise their goals and oriented their policies, use every capability and reduce the least of risk In the most of reseached projects, the company using strategic management is obtained more good results than the company not using strategic management

However, there are disadvantages in strategic management such as it takes long time to establish process of strategic management; it is not applied correctly, or used inflexible when issuing by documents.The mistake of long-term forecast sometimes can be very large

Because of disadvantages as mentioned above, some companies do not applied strategic management, and if we know how to overcome disadvantages and apply correctly strategic management, advantages of strategic management is larger than disadvantages of strategic management

1.1.4 Stages of strategic management

a Strategy Form: is a process of establishing trade planning, investigate and

collect information of business such as: the strength, the weak, the risk from outside or inside, establishing long-term goals, building and choosing standby strategy

b Strategy Implementation: is the stage of operating strategic management

The fundamental activities of this stage which establish short-term targets, propose policies and distribute resources are often the most difficult stage of strategic management process Role of managers and employees is very important, to achieve the success, every department in company should answer the questions: “What should we do to implement our tasks in strategic management of organization?” and “How do we do to complete our tasks in the best way?

c Check and assess strategy: this stage is necessary because the current

results do not ensure the success in future

1.1.5 The levels of strategic management

a Company-level strategy: denfine and show the goals and business

activities of company, specify policies and basic plans to achieve the goals of company The company strategy defines the business activities of company competing with other companies, and distributing resources for these business activities

b Business-level strategy: define product or specify market for business

operation inside company, and identify how the company competes with other companies which product or trade the same production Business-level strategy identifies method of each division applying to achieve division‟s target and contributing to complete company‟s goals

c Function-level strategy: support arrangement of company strategy and

focus on business field and cooperation fields

1.1.6 Methods and instruments for building strategy

now, are maintained,

built and used as leverage

W eaknesses Things, which is bad now, are repaired,

T hreats Things, which is bad for future, take them in plan to manage or access

A SWOT analysis is an planning instrument to identifying the strengths (S), weaknesses (W), O pportunities (O), and Threates (T) regarding to a project

or business It regards to identify the goals of business or a project and identify internal and external factors for support or reduce disadvantages SWOT is used to a part of strategic planning process

Building strategy on SWOT matrix

SWOT matrix includes Strength (S), Weakness (W), Opportunity (O), Threat (T) This is the important combination instrument helping managers to develop 4 strategies:

 Strength – Opportunity strategy (SO): using inside strengths of company to salvage outside opportunities All managers expect their organisations belong to position in which internal strengths can be used

to take the trend or events of outside environment

 Weakness – Opportunity strategy (WO): improving internal weaknesses

by taking external opportunities Sometimes, the large opportunities exist from outside but internal weaknesses of company prevent them

 Strength-Threat strategy (ST): using strengths of company to avoid or reduce impacts of external threats Sometimes, a strength organisation also faces with external threats

 Weakness-Threat strategy (WT): is defensive strategy which reduce internal weakness and avoid external threats An organisation facing with a number of external threats and internal weakness is always not

safe

1.2 OVERVIEW OF THE HUMAN RESOURCE MANAGEMENT

1.2.1 Concept and the role of human resource management

Human Resource Management relates to basic issues which are

"management" and "human resources" Management is the process to make activities which are completed with high efficiency, through people Problem

of management is the coordination between leadership art and science Enterprises/ businesses (from here we use business in stead of enterprise or business) have the resources including capital, resources, material, equipment and people need to create goods and services that businesses brings to the market Most businesses are building rules, regulations and procedures for providing capital, raw materials and equipment to ensure

adequately supplying when they need Similarly, businesses should pay attention to process for human management - this is an important resource

a Concept Human Resource (HR)

HR is presented in several aspects:

+ With the concept is one of the essential functions of management process: human resource management includes planning, organizing, commanding, coordinating and controlling activities relating to attraction, using and development of employees in organizations

+ In aspect of labor process organization, "Managing human resources is a field of monitoring, guiding, adjusting and testing to combine the human and material factors of nature in the process of creating material and spiritual wealth to meet the needs of people and society”

+ Focusing deeply on the content of the HR, "Management of human resource are recruitment, use, maintenance and development as well as providing facilities for employees in organizations

In short, the most common concept of human resource management is

defined as follows: "Management of human resources is activities to enhance the effective contribution of individuals to organizational goals, simultaneously to try to achieve social goals and personal goals

b The important difference between the traditional and the modern opinions on HR

+ At First: function of modern human resource management is larger than

function of traditional human resource management

+ The Second: Modern human resource management is interested in training

and educating, for which the costs are more and more increasing

+ The Third: Modern human resource management through implemeting

many management functions have brought economic efficiency for the organization

+ The Fourth: Modern human resource management considering staffs and

employees as "the society" is different with personnel management considering staffs and employees as "the economy"

c The role of human resource management

Any business when conducting production and business activities must also meet factors that are human resource, material resource and financial resource In particular, human are the most important, who decides to survive and develope the enterprises

Firstly, due to increasing fierce competition in the market economy, to survive and develop the businesses must improve their organizations towards compact, dynamic, in which human factors are calculated with decision People – by their skills, their education, have used facilities to impact on material to create goods and products to society

Secondly, the advancement of science and technology with the economic development requires the administrator knows how to make your organization to adapt

Thirdly, research human resource management to help administrators achieving goals, results through others

Finally, research human resource management to help administrators learning how dealing with others, find out common language and being sensitive to the needs of employees, how to accurately assess staff and employees, entice staff having a passion for their works and eventually it may lead the people strategy to become the organic parts of the business strategy of the business, contributing to improving the quality and effectiveness of the work of the organization

In short, human resource management plays a central role in the process of production and business activities of enterprises in general, it can help businesses to survive, grow and go up in the competition Focus of this role

comes from the role of man: man is a component of the business; the people operate businesses and decide the success or failure of the enterprise Because of the important role of human resource, human resource management is an important management field in all enterprises

1.2.2 Goals, principles and functions of HR

+ Ensure adequate number of workers with appropriate skill and education, retain the right people, right job, and the right time to achieve the objectives

+ Function of supplying manpower

+ Function of developing human resource

+ Function of payment

+ Function of safety and health

+ Function of workfore and labor relations

1.2.3 Areas of human resource management in enterprises

Major contents of the HR is coordinate an overall plan activities, recruitment, selection, use, maintenance, development, encouragement and creating favorable conditions for human resources of enterprises through the organization to achieve business goals

Areas of human resource management in the enterprise include:

a Research on human resource: research of human resource needs (type,

rank, industry structure, gender .) at present, in the future (the required workforce, excess of workforce, the retrained workforce, etc.)

b Planning human resources: Planning human resource: The total

calculation and structure of human resource in the development stages of the business (present, future) associated with the goals of business development This is one of the major functions of human resource management

c Recruiting human resources: As a concrete step to implementing the

human resource planning

d Training and Development: Training is to ensure the employees working

with right skill, to meet the current needs and future of the enterprise

e Maintenance and management: After recruiting and training, the next

responsibility of human resource management is management and use of employees

f Management remuneration: This is one important motivation for workers

connecting with business and encouraging development the talent of staff and empolyees

g Management relations in labor: Through regulations and organisation,

employees have realized clearly their roles in business

h Creating good atmosphere in the business: The employees consider

business is a part of their lives so that they can become to stick, to unite, to

do their best for business

i Services and welfare issues in business: to solve problems such as

housing, lunches, hygiene, rest and visit, and administrative support, etc

k Occupational safety and health: Business must make good the

obligations of workers‟ health and compensation insurance

l Opportunity of development: Creating opportunities and equal

environment, extensive to the employees so that they can rise and progress in the life of enterprise

1.3 HUMAN RESOURCE PLANNING

1.3.1 Concept and the role of human resource planning

a Concept

Human resource planning is the process of assessment, determine the human resources need to achieve organization's objectives and establish labour planning to meet future needs

b The role of human resource planning

Firstly, human resource planning plays a central role in the strategic

management of human resources based on the integration of human resources and organization

Secondly, human resource planning has great influence on the organization‟s

effectiveness through intergrating implementation with result

Thirdly, human resource planning helps the enterprise clearly see how to

manage its human resources, to ensure the right workforce in the right worplace, at the right time and necessary flexibility to cope with market changes

Fourthly, human resource planning regulates the activities of human

resources It will show how to incorporate all the sectors and determine if human resource is suitable to its business, and in particular, if human resource can ensure enterprise competitive advantages

Fifthly, human resource planning is the basis for activities of recruiting,

retaining, training and developing workforce

1.3.2 Process of human resource planning

The main contents of human resource planning in enterprise can be summarized as follows:

• Step 1: Analyze environment and influent factors

+ External factors and environment, including factors such as economic

context, population and social labor force, laws of the state, culture and society, competition, science, technology, customers, corporate and government

+ Internal environment, including the enterprise mission, goals, strategies, policies, cultural atmosphere, shareholders, and union

• Step 2: Analyze current human resource management

+ Qualify enterprise human resource

+ Scheduling future human resource needs

• Step 3: Analysis of supply and demand of human resources and adjustable possibility

• Step 4: Test and evaluate the implementation results

1.3.3 Forecast manpower

a The meaning of human resource forecasting

+ Forecast management may predict the status of extra or lack of workforce,

professional capacity does not meet or exceed the requirements – lack of appropriate adaptation between organization and human resources

+ For a certain aspect, forecast management is one of the main aspects of the

"comprehensive quality" in the activities of human resource management

In short, forecast management is a higher level of human resource management

b Predict for human resource needs

Prediction for human resource needs can categorize into two methods which

are the method of calculation and quantitative method

In the method of calculation, the specialist one is used most widely

Quantitative method is often used in human resource need forecast such as the method of predicting manpower requirement based on each human resource unit, the method of calculating depreciation costs of labor, the method counting on labor productivity, etc

Method of calculation labor productivity

Basic content of this method: Divide the total output product of the plan year (in kind or value) by labor productivity per employee in the plan year in order to determine human resource need in the plan year of organization

Formula: (source: [2] Textbook of Personnel Management, page 73)

D: Labor need in plan year,

Q: Total output production of the plan year,

W: Average labor productivity in the plan year

According to this method, it is necessary to focus on the same unit in calculating the total output of the plan year and the average labor productivity in the plan year

Currently, power sector applies method of calculation labor productivity in order to determine manpower requirement and establish annual labour plan

c Predicting manpower supply

To evaluate, analyze and predict the number of people willing to work for organization in order to take measures to attract, use and exploitation of potential employees, therefore to improve the performance of organization

Predicting manpower supply can be done from two sources: within the organization (i.e analysis of existing human resources in the organization) and outside the organization

1.4 PLANNING POLICY OF GUARANTEE EMPLOYMENT FOR BUSINESS

1.4.1 Method of policymaker to ensure human resource

Strategic human resources are very important to the perfection and effectiveness of the organization It depends on the relevance of human resource strategy with the organization's overall strategy, characteristics, capacity, and environment changes

In human resource aspect, strategic planning of human resources helps company clearly sees its direction way to manage human resources, ensure the right people for the right job at the right time, and have flexible response

to market changes The Enterprise will miss business opportunities because exceed workforce increases costs, and lack of workforce or employees does not meet the requirements and affects product quality Human resource planning is the process of research and identify the needs of human resources, make policy and implement programs and activities to ensure sufficient human resources with appropriated quality and skill to carry out high productivity, quality and efficiency in bussiness

In the competitive market, it is necessary for enterprises to plan and carry out human resource policies such as talent attraction, special reward (strong salary discrimination, adequate award for innovation), training, etc in a relevant system

Planed policies ensure human resources in order to implement the objectives, the enterprise‟s policy activities must meet the following basic requirements:

+ Human resource policies must synchronize consistent with each other;

+ Each human resource policy must be legal;

+ Each human resource policy must appeal to the target candidate

Figure 1.1 Process of human resource policies

Facilities, pursuant to human resource policy of the enterprise are listed below:

+ Objectives and requirements of the enterprise development strategy;

+ Potential human resource of business plan targets;

+ Enterprise position among the human resource objective owners;

+ Human resource policy system of competitors;

+ Relevant legal provisions of the State;

+ Traditional culture and concept of the enterprise value

1.4.2 Attracting and recruiting human

a Overview of the manpower recruiting process

Labor recruitment is a process of attraction, research, selection and decision

to get an individual into a position of the organization

Recruitment process is an adaptation between labor supply and labor demand

of labor market, and can be described by the following diagram (Figure 1.2):

Implementing human resource policies

Planning manpower policy Research

facilities, basis

Best, most satisfying

Figure 1.2 The process of recruiting manpower

Identify sources and methods of recruitment

Determining time and place for recruitment

Preparation for recruitment

Comparing

Factors of recruitment +Training

+ Experience + Personal Qualities

Figure 1.3 Bilateral relationship of recruitment and other HRM functions

c Manpower recruitment

Manpower recruitment is the process of evaluating candidates in several different aspects based on job requirements in order to find appropriated individual among recruited candidates

Selection process includes following steps:

+ Step 1: Contact meeting and preliminary interview

+ Step 2: Refinement on application

+ Step 3: Personnel selection test

+ Step 4: Selection interview

Higher wages facilitate easier to attract people with higher

levels

Supply of labor will affect the wages and qualified employees

will expect higher levels of remuneration

The rate of acceptable person affected to the people to recruit

Many participants recruited for the employer be able to choose

more

Problems exist in implementing the work may indicate the

need to attract workers with high level Those who apply for higher level skilled jobs, perform better

Recruits are simplified if the employee can be trained in

accordance with less time and expense

Those skilled labor requiring less training than people who do

not have skilled

Image of the company affect the decision to apply for a

position

Workers are arranged in the appropriate location that rate of

changing lower and higher satisfaction

Recruiting

Assessing the implemen tation

otheĐá

nh giá tình hình thực hiện công việc

Remuner ation

Training and development

Labor Relationshi

ps

+ Step 5: Check candidate’s health and physical assessment

+ Step 6: Interview by supervisor

+ Step 7: Examine obtained information during recruitment process

+ Step 8: Job visitation

+ Step 9: Decision of recruitment (final recruitment)

1.4.3 Assessing capacity to implement the work of staff

a Concept

The assessment of employee‟s capacity to his job implementation is in the chain of activities in order to attract, retain and develop human resources included in a long-term human resource management and development system Thanks to it enterprise manager can avoid several problems such as human resource exhaustion, mental depression, low productivity, high costs, poor product quality because of unreasonable manpower organization

b Objectives

+ Provide feedback information to employee about his performed job level compared to standards and compared to other employees

+ Help employee adjust and repair mistakes in his work process

+ Stimulate, motivate employees through the provision assessment, recognition and support

+ Provide information as the basis for issues of training, salary, reward, job transfer, organizational structure improvement, etc

+ Develop an understanding of the company through conversation about opportunity and career plan

+ Enhance good relations between superiors and subordinates

Figure 1.4 Rating employee’s capacity of work implementation

c The necessity of evaluating employee’s capacity of work fullfilment

How to carry out reasonable employees„s capacity assessment with their satisfaction? How to choose the right candidate to facilitate reasonable talent for loyalty encourage? Those are not easy tasks Many enterprises had to suffer consequences due to lack of experience in establishing, developing and maintaining a scientific and closely system of human resource assessment and development

Some enterprise have key staff leaving because of disatisfation and confusion of employees Others have loss of customers due to declining service quality, cost increase because of many faults in product Therefore assessment employees‟ work capacity is sensitive because its result strongly affects their vital interests such as salary, reward, training, opportunity

Due to correct assessment employees‟s work capacity, the enterprise‟s personnel plan will be more accurate, because its workforce can promote the highest level of ability Employees appreciated the right result of correct

Assess ment of the work

Used the planning

of human resources,

payroll, bonuses, training and stimulation

Standard of samples from the job description and purpose of the organization

assessment will be satisfied for recognition They will be engrossed in work with increased productivity and reduced costs Besides, the enterprise will save a lot of costs an times in training due to correct personnel assessment

Fascinating award wage regulations and other relevant labor regimes will be profitless if they are applied to uncorrect beneficiary Thus, enterprises have

to spend too much cost for employees unappropriated to work requirements And vice versa, enterprises can not retain suitable workforce because of unappropriated labor regime and unsatisfation of employees on unfair treatment

d Sequence of evaluation employees’ capacity

Rating employee‟s capacity of work implementation can be carried out in seven following steps:

(1) Identify assessment requirements

Leaders need to define which fields, skills, results of employees are necessary to be rerified, and how these factors relate to the implementation

of the enterprise‟s objectives Typically, these requirements can be inferred from the job description and include two components: standards of behavior and standards of work implementation result

(2) Select appropriate assessment methods

In fact, there are many different assessment methods and there is no method

to be considered the best for all organizations

(3) Training skills of assessment

Using inappropriate method or uncorect identification principles, standards and scores of assessment will lead to unfair treatment or inaccurate decisions

in payment and reward Therefore, it is necessary to train leaders and managers in skills of assessment

(4) Discussion with employees about the content and scope of assessment

Before conducting assessment, manager should discuss with employees about the content and scope of evaluation

(5) Carry out assessment

Perform comparison and analysis results of actual work of employees to standard forms

(6) Discuss with employees on evaluation results

Leaders should discuss with employees on the assessment results, learn unanimous and divergent issues, and point out good aspects as well as problems to overcome and repair in the implementation work of employees

(7) Determine new objectives and outcomes for employees

The most important issue in work implementation assessment is to map out the directions and ways in improving work implementation, and set out new criteria for employees

e Mistakes should be avoided in work implementation evaluation

to sports or arts, etc

(3) Excessive trend

Some leaders tend to evaluate all employees at too high or too low level in which every employee is not met the requirements or every employee is excellent Because of this trend, employees will be pessimistic or self-satisfied with themselves and make no efford to improve their work

(4) Trend average doctrine

According to this trend in evaluate result all employees are in average level with equal assessment for every employee without the best and the worst This has caused difficulties for evaluation, promotion and motivation the ability of employees, especially energetic and potential staff

(5) Prejudice

During evaluating process, manager with prejudice against certain employee will rate his or her capacity only through distorting prism according to this inference For example, employee seems to be "very smart" will certainly be evaluated as a candidate very positive in all aspects, such as the ability and motivation to work Employee seems to have "difficulties in relationship" will be evaluated as a candidate poor on other aspects, including wisdom

1.4.4 Policies of payment, reward and treatment

1.4.4.1 Basic requirements and characteristics of salary

+ Payment must be based on ability, effort and contribution of employees to the enterprise‟s developing activities

b Principles of salary and wage system

An effective system of salary and wages are subject to a number of key principles as following:

+ Comprehensive: A system of salary and wages should include basic salary,

bonus, allowances and pensions This system should also support the array of

human resource management and remuneration as the basis of overall human resource management of the enterprise

+ Refer to level and structure of salary: The process of salary should

mention two different aspects: level and structure of salary Is salary for each position in the enterprise competitive or not? Is salary structure flexible and suitable for current and near future or not?

+ Reflect the value of task: In determining salary for a task it is necessary to

consider its value for the enterprise

+ Consider other factors such as seniority: Although value of task is a key

factor in determining salary, but it is still necessary to consider other factors such as seniority (number of years of service), age, etc., according to common social values

+ Refer to labor market salary: The enterprise should continuously review

its salary system refering to the same of competitors and based on salary standards in the market

+ Take account of variable cost of living: In determining level and system of

salary and wages, it is necessary to consider fluctuated factors affecting cost

of living When the national economy is still in transition period and the overall salary is also at low level, it is especially important to consider basic needs of human

+ Including bonus mechanism: Salary have two parts: basic salary and

bonus Basic salary is a fixed part and a bonus section can vary according to the employee‟s work results or the enterprise‟s business performance

+ Based on work results: Salary raise and bonus division must be based on

work results The enterprise should have a complete system of work result evaluation in order to motivate employees with high work results

+ Participation of unions: The enterprise should take available unions

(existing in workplace) in the process of establishing salary an wage system

from the beginning in order to ensure smooth and easy implementation of this system

c The objectives of salary and wages system

Fundamental goals of labor wages is to attract skilled labor force in accordance with the enterprise‟s requirements, to preserve and to encourage employees to do their best In making decisions on salary and wages, it is necessary to simultaneously consider seveval objectives as following:

+ The salary and wage system must be lawful: The enterprise‟s salary and

wage system must comply with terms of the Labor Code of the Socialist Republic of Vietnam, etc

+ The salary and wage system must be adequate: The enterprise‟s salary and

wage system must be large enough to attract high quality employees to work for and to retain them within the enterprise

+ Remuneration system must be motivative: The enterprise‟s salary and wage

system should stimulate and motivate employees in order to complete their work tasks with higher efficiency

+ Remuneration system should be fair: If the enterprise‟s remuneration

program is not fair (for external and internal) the labor force motivation will

be eliminated

+ Remuneration system must be stable and guaranteed: The enterprise should

ensure that employees can predict their salary and feel secure about the guarantee of their monthly income

+ Remuneration system must be feasible and effective: The enterprise should

effectively manage remuneration system and should have available financial resources in order to support its longterm implementation

Each of six objectives mentioned above is important in establishing a rational remuneration system However, they are not always compatible so that the employer often have to decide suitable balance among them

1.4.4.2 Payment method for workers in the enterprise:

Salary, wages (Y) of workers in specific business more or less depending on five factors as illustrated by the following functions and variables:

Y = F (X1, X2, X3, X4, X5) Where:

X1 - the profitability in the operation of the enterprise;

X2 - rates of contribution

X3 - the price index of labor market

X4 - policies to regulate the income of the State

X5 - policy management of leadership in business

The overall achievement should be divided into labor rate that each unit, each person actually contributes to meet, satisfy the needs of partners,

+ Contribution in terms of quantity;

+ Contributions to complying with the regulations on quality;

+ Contributions in terms of complying with progress;

+ Work of training (education);

+ Length of service

1.4.5 Training and development of human resource

1.4.5.1 The concept of training and developing human resource

The concept of education, training and development are refered to a similar process: the process allows people to acquire knowledge, learn new skills

and change the views or actions and improve ability to perform the work of individuals

+ Education: is understood as the learning activities to prepare for people

entering a new profession relevant in the future

+ Training: (also known as skills of training), are called learning activities to

help the employees can perform effectively the functions and duties of his

+ Development: is the learning activities beyond the scope of work, relating

to improve mental capacity and emotional need to do the work better, or opening them new works based on the basis of the future direction of the organization

1.4.5.2 Purpose and role of human resources training and development

In business, training and development effect to work and having certain sense for both companies and employees:

a For business

+ Helps businesses improving production and business efficiency Maintaining and improving the quality of human resource, creating competitive advantage for enterprises

+ Avoiding obsolescence management Administrators have to apply the methods of management to match with changes in technology process, engineering and business environment

+ Resolving issues on the organization Training and development can help administrators solve problems in conflict, contradiction between individuals and between trade union and administrators, seting out policies on management of human resources in business effectively

+ Guiding jobs for new employees New employees have often many difficulty, being new to the surroundings on the first day working in organizations, businesses, job orientation program for new employees will help them quickly adapt to new working environment of business

+ Preparing consecutive management staff, profession accessible Training and development to help employees get the skills necessary for the promotion and replacement for managers, professionals as needed

b For employees

+ Creating professional and attaching between the workers and enterprises

+ Directly help employees doing their job better, especially when employees perform tasks not meeting the standard form, or when employees receive new job

+ Updating skills, new knowledge to employees, helping them to apply successfully changes of technology in business

+ To meet the needs and development aspirations of workers Equipped with the skills necessary to stimulate the employees do the job better, gain better achievements, to be assigned task with higher challenge, having more promotion opportunities

+ Creating employees with new vision, new thinking in their works, which is also the basis for promoting creativity for employees at work

1.4.5.3 Classifying forms of training

In fact, there are many criteria to classify different forms of training

a Content-oriented training, there are two forms: training-oriented work and

training-oriented enterprises

+ Training oriented work This is a form of training in skills to make a certain type of work, employees can use this skill to work in different businesses

+ Training oriented enterprises This is a form of training skills, ways and methods of practice work in business When employees move to other enterprises, skills training is often not applicable anymore

b For the purposes of training content, which forms: training, work

instructions to employees; training and skills training; technical training occupational safety; training and improving professional subjects, techniques; training and development of management capacity, etc

+ Training, guiding (or orientation) of employees to provide information, new knowledge and instructions to new employees about work and businesses, helping new employees quickly adapt to the conditions, methods

of work in enterprises

+ Training and coaching skills to help for employees with good qualify and suitable skills to perform tasks as required

+ Training on techniques and occupation safety, guidelines employees how

to perform works safely, to prevent cases of occupational accidents For some dangerous work, there are risks as the work of welders, divers, builder, electrician, etc training on technique and occupational safety is required

+ Training and improving professional qualifications, techniques are usually held periodically to help the technical staff and experts updated knowledge and new skills

+ Training and development of management capabilities to help administrators to be exposed, get acquainted with new working methods, improve practical skills and management experience in organizing and encouraging people members of the business

c Organized manner, there are the following forms: regular training,

in-service training, classroom next to factories, tutoring in place

In the regular training, students are evolved away from the daily work in enterprises, so time for training is short and the quality of education is generally higher than other forms of training However the number of people participating in this training form is limited

+ In-service training applying for staff, employees having combined working and learning Training time can be done outside working hours such as evening classes or a part of work time is learning time, etc depending on the specific conditions of each locality or enterprise

+ Class next to enterprises commonly applys to train new employees in large enterprises Training courses are usually very effective, students have to master the theory, have become familiar with working conditions, practices

at businesses, short training time, low training costs However, only large enterprises have the ability to organize form of training such as classes next

to enterprise

+ Tutoring in place is form of training learning in working, skilled workers (the instructor) to help new apprentices or low skill (the school)

d Location or place of training, there are the forms: training in the

workplace and training outside

+ Training in the workplace: the method of training through actual work under the guidance of skilled workers Usually everyone, from secretary to the director at companies have received training in the workplace

+ Training outside: the training methods in which learners are separated from the implementation of the actual work

e As learning objecst, there are forms as follows: new training and

retraining

+ New training applying for common workers, not qualified skilled workers, although the labor has just gone to work or be going to work but having no skills to do their jobs

+ Retraining applies to workers have already skills, due to requirements of the business enhancing their skilled job

The choice of training form to bring the most effective depending on the requirements on the scale of training, and level of complexity, content of