RETENTION OF PROFESSIONAL BANKERS AT COMMERCIAL BANKS IN HO CHI MINH CITY

This thesis explores the factors that cansignificantly impact employee retention in an organization, and specializes infield of commercial banks in Ho Chi Minh City.. Employing a quantit

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Doan Duc Minh

ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr LE NGUYEN HAU

Ho Chi Minh City – Year 2012

Then, I am thankful to all my colleagues and Board of Management in ShinhanBank Vietnam, United Overseas Bank, Hong Leong Bank, Vietnam CommercialBank, Asia Commercial Bank, Saigon Commercial Bank, Dong A CommercialBank for the consultation, orientation and support during my research process.

Last but not least, this is a great time for a son of family, husband of wife to takethis opportunity to express the profound gratitude from my deep heart to mybeloved family for their love and continuous support both spiritually andmaterially

Employees retaining is an important goal of every corporate organization, whichdrives company to hit the target This thesis explores the factors that cansignificantly impact employee retention in an organization, and specializes infield of commercial banks in Ho Chi Minh City It attempts to relate some of thefactors discovered to major theories in employee retention The literaturesurveyed by this study mention employee motivation and job satisfaction as themain factors that influence employee retention rates This survey implies that stillsignificant for managing employee retention in today’s rapidly expandingbanking industry

Human resources is definitely one of the most valuable assets in theorganizations, however, high turnover is currently being mentioned recently.There are a lot of researches around this topic because retaining employees wererealized to be very costly to the organizations Therefore, retention of keypersonnel is a precedent issue for all banks and it seems not many researchreports conducted in Vietnam banking industry

In the labor market, competitors are always attracting key personnel who arevalued core and not satisfied with their current job This research explores thecurrent situation of job satisfaction of key personnel and figures out theantecedent factors, which impacts job satisfaction Finally, managerialimplications are withdrawn for improving the level of satisfactions, retaining keypersonnel

Employing a quantitative approach, in which, the data were collected from 160

professional bankers (“bankers”) in commercial banks in Ho Chi Minh City,

multiple regression analysis has resulted in the determinants of job satisfaction,and a significant impact of job satisfaction on job satisfaction Pay and leadershipsupport are found to be two most important factors, other factors include benefit,opportunities of training and promotion, work challenges The analysis results

also show that bankers in selected commercial banks are currently not completelysatisfied with their jobs Based on the statistical results, managerial implicationshave been discussed and recommendations are provided to improve the retentionrate of the banking industry in Ho Chi Minh City.

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

ABSTRACT ii

TABLE OF CONTENTS iv

LIST OF TABLES vi

LIST OF FIGURES vii

CHAPTER 1: INTRODUCTION……….………… 1

1.1Background……….….… …1

1.2 Problem statements……… ….… 2

1.3 Research objectives……….…… 3

1.4 Scope of study……….…… 3

1.5 Thesis structure……….…….….……3

CHAPTER 2: LITERATUE REVIEW……….….…… 4

2.1 Maslow’s hierarchy of needs……… ………4

2.2 Retention……….…… 5

2.3 Job satisfaction and antecedent factors……… …… 7

2.4 Moderating factors……… …….12

2.5 Research model ……….……… 13

2.6 Summary of hypotheses……….……… … … 13

CHAPTER 3: RESEARCH METHOD……….……….……15

3.1 Research procedure……….….……15

3.2 Measurement scales……….……15

3.3 Method of data collection……… 19

3.4 Method of analysis……….…….….19

3.4.1 Assessment of measurement of scale……….….…20

3.4.2 Multiple regression……….… …21

CHAPTER 4: RESEARCH RESULT……… 22

4.1 Introduction……… ………22

4.2 Sample characteristics……… ………22

4.3 Assessment of measurement of scales……….……….……….… 23

4.3.1 EFA for individual scales of antecedent factors……….……23

4.3.2 EFA for all scales together of antecedent factors……….……… 26

4.3.3 Assessment for job satisfaction……….… 29

4.4 Assessment of theoretical model and hypotheses……….…… 30

4.4.1 Assessment of theoretical model……….…… 30

4.4.2 Assessment level of overall job satisfaction……….… 32

4.4.3 Assessment of influences of organization/ employee characteristics to impact of antecedent factors on job satisfaction…… 33

4.4.4 Test of hypotheses……… … 35

4.5 Discussion……….… 39

4.6 Managerial implications……… ….40

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS……….……… 46

5.1 Conclusion……….…… 46

5.2 Recommendations……… …… 46

5.3 Limitation and further research directions……….….48

REFERENCES……….…… ……viii

QUESTIONAIRRES……….….………xii

LIST OF TABLES

Table 2.1: Maslow‘s hierarchy of needs 5

Table 3.1: Summary of scales for 8 constructs in the model 17

Table 4.1: Sample characteristics 21

Table 4.2: EFA and reliability test result for scales 23

Table 4.3: EFA and reliability test result for three scales refined 25

Table 4.4: Result of joint factors analysis for 7 scales 27

Table 4.5: Characteristics of 7 scales for re-assessment of reliability 28

Table 4.6: Assessment for job satisfaction scale 28

Table 4.7: Multiple regression result of antecedent factors to job satisfaction 29

Table 4.8: R square value 29

Table 4.9: F and Sig value 30

Table 4.10: Regression result between job satisfaction and retention 30

Table 4.11: R square value 30

Table 4.12: F and Sig value 30

Table 4.13: Means values of different factors 31

Table 4.14: Differences of impact of antecedent factors by gender 32

Table 4.15: Differences of impact of antecedent factors by age 33

Table 4.16: Differences of impact of antecedent factors by ownership 33

Table 4.17: Differences of impact of antecedent factors by size 34

Table 4.18: Regression coefficients 35

LIST OF FIGURES

Figure 2.1: The research model 13

Figure 3.1: Research procedure 15 Figure 4.1: Regression coefficients model 38

CHAPTER 1 INTRODUCTION

This chapter is an introduction and intended to provide background information

on the nature of the present study and its objectives and purpose It is divided intofour sections The first section presents background of the research, the secondpart presents the problem statement, the third part presents the objective, and thefinal section presents the scope of study

1.1 Background

The retention of bankers has been shown to be significant to the development and

the accomplishment of the organization’s goals and objectives In recent years,

the system of financial institutions and banks in Vietnam has been developed inincreasing quantity of credit institutions and quality in diversity of ownership andbanking services Currently, the whole banking system has reached at number of

52 local commercial banks, 51 foreign bank branches, 31 of non-bank creditinstitutions As the "blood" of the economy, the banking sector has been grownremarkable and contributed to the stable development of Vietnam

The local commercial banks in Ho Chi Minh City (the banks) were establishedalong with the development process of Vietnam economy In the first years ofdevelopment, the banks have developed gradually, with small and medium scale,and not really pay attention to human resource management (HRM) Due to thedevelopment of economy, the banks have boomed and developed remarkably.Especially in 5 years recently, the banks has set up with the wide networkbranches and the number of bankers in this industry increased by more than20,000 bankers, growth of the average number of bankers more than 15% peryear Along to the stable development, HRM requires improvement and upgrade

to professional level However, HRM practices in the banks have not beenfocused and still applied the old-fashion method Board of management faced theserious issue that employee turnover increased about 9.5% per year within recent

three years (Asia Banker Forum, 2011) The banks has been conducting acampaign to reform human resources management system to improve theeffectiveness of HRM, high labor productivity, raise incomes and policies toretain bankers.

The banks also do understand that the professional bankers are the key factor incompetition in the banking market and this may cause a threat to the success oflong-term businesses For this reason, the banks rose up a query how to retainprofessional staff and satisfy their work-related needs would help

1.2 Problem statements

Board of management of the banks are aware of the critical role of talentworkforce and striving to attract and retain their bankers by various measuressuch as increasing salary and allowance, conducting intensive training courses,offering more opportunities for career promotion and incentive abroad trips forhigh performance bankers However, the high turnover rate still exceeds theirexpectations in spite of bank efforts Why is turnover still high after those

efforts? What are bankers’ demands? How much percent are the bankers satisfied

with their current job? Is there relationship between job satisfaction andemployee retention?

Literature on human resource management provides some general hints in copingwith this managerial problem of employee retention (e.g Maslow, 1943, 1954;Bame, 1993; Becker & Gerhart, 1996; Hom & Griffieth, 1995) Nevertheless, theright solution under the current social-economic context, organization leadersneed to understand in more details as higher salary, promotion opportunities, andrelated other factors as motivation, recognition, working environment, goodrelationships with the manager and colleagues, corporate culture What are theaffected important factors?

Due to answer these questions, management board not only has an insight intothe issue of HRM in Vietnam, but also provides specific formation for managers

in the fields to solve the problem of retaining their talent bankers

This thesis is organized as follows:

 Chapter 1 presents the research background, problem statements, researchobjectives, scope of study and thesis structure

 Chapter 2 introduces research model and its hypotheses as well as its literaturereview

 Chapter 3 illustrates the methodology conducted in this paper

 Chapter 4 presents research results is based on data collected

 Chapter 5 summarizes the research results, provide the findings andrecommendations

CHAPTER 2 LITERATURE REVIEW

The literature clearly indicated that there are seven keys to employee retention.They are work challenge, training and promotion opportunity, leadership support,colleague relationship, salary, benefits, working environment The model of jobsatisfaction and retention will be proposed for this specific study, which provides

a basis for the development of hypotheses Over the years, many studies relating

to personnel in terms of human needs, job satisfaction, organizationalcommitments and retention have been conducted In this literature review,Maslow hierarchy of needs, retention, job satisfaction and its antecedent factorswill be presented Then, the model of job satisfaction and retention will beproposed for this specific study, which provides a basis for the development ofhypotheses

2.1 Maslow’s hierarchy of needs

One of the earliest and best-known theories of individual motivation, which isapplicable to the current study, is Maslow’s hierarchy of needs (Table 2.1).Maslow advocates that within every human being lies a hierarchy of needs.These needs are:

 Physiological needs: related to essential factors to survival, such as food, water,and shelter In organization, these needs are mainly presented as monthly salary

 Safety needs: related to security, safety in workplace and life At this level, theindividual strives to look for or form the safe environment from external dangers

In organization, these needs are presented via hygiene factors, long-termcontribution, social and medical insurance policies…

 Social needs: related to relationship with people, being member of teamwork,being loved In organization, these needs are identified by colleague relationship,

leader relationship…

 Esteem: the drives for feelings of self-worth and individual importance, need ofrespect in workplace and daily life are took place at this level Organizationsoften pay incentives through rewards, bonus, promotions…

 Self-actualization: at the top of the hierarchy, the motivator is a sense offulfillment that allows individual to maximize their own growth and contribute

In organization, these needs are satisfied by opportunities of training,development and innovation

Once each of these needs is satisfied, the individual moves up to the higher level

of the hierarchy

Table 2.1: Maslow’s hierarchy of needs

Source: Mendenhall et al., (1995)

2.2 Retention

Over the past decade, the way in which people were managed and developed atwork has come to be recognized as one of the primary factors in achievingimprovement in organizational performance (BQF, 1998; Marchington andWilkinson, 1997; Phillips, 1997) This aspect was reflected by popular idioms

such as ‘people are our most important asset’ (Accenture, 2001) From the review

of extant literature, it was acknowledged that the employees of successful

Acceptance of family,

Recognition, highposition, increasingresponsibility

Family, friend,

community Being loved, beingmember of team

Team working,colleague, supervisor,customer

Un-fear about war,

Safety of working, longterm job, benefit

Food, water, sexuality Physiology Basic wage, temperature,

air

organizations were shared a fundamental philosophy of valuing and investing(Anand, 1997; Maguire, 1995) In fact, several studies have described humanresource management as a means of achieving competitive advantage (Delery,1998; Walker, 2001) Consistent with this perspective, the retention of theircritical (core) employees is an equally important issue for organizations.

Retention is about developing strategies that reduce the number of people who

leave the organization for avoidable reasons Organizations need to retain

employees with the required balance of skills and experience to ensure thatbusiness can be maintained (Stucberry, 2003) Solutions to retain employees arereally not simple There are many factors that affect the employee's reasons forstaying with the organizations, as well as how important those factors are toemployees In order to retain employees, the organization must understand thesefactors, which drives people to perform their jobs and monitor the job satisfaction

of bankers

Most organizations today continue to struggle with retention hardly because theyare only relying on salary increases and bonuses to prevent turnover (Accenture,2001; Gumbus and Johnson, 2003) Managing core employees effectively meansidentifying their needs Employees bring their needs, aspirations, and hopes totheir jobs and working environment where their abilities can be utilized and theirbasic needs can be satisfied

At the centre of some turnover models have been variables of job satisfaction andorganizational commitment (Steele, 2002) but tendency were mainly developedfrom the vast amount of researches on job satisfaction (Porters and Steers, 1973)

In this research, job satisfaction is considered as antecedents as they have strongdirect influence to retention Job satisfaction is a subjective emotional evaluationmade consciously or unconsciously by the employee and is defined as apleasurable or positive emotional state resulting from the appraisal of one’s job

or job experiences (Locke, 1976) Job satisfaction is multidimensional in naturewith specific facets including satisfaction with work, salary, promotion,

colleague (Rice, Gentile and McFarlin, 1991) Work is such a large part of an

employee’s life and is represented by a belief that organizations who are more

satisfied with their work experiences and environment will stay longer (Spector,

2000), will attend work regularly, and perform at an optimum level (Porters andSteers, 1973) Job satisfaction is included in this research because manyresearchers have shown that the level of job satisfaction is positively related toretention (Koslowsky, 1991; Hom and Griffeth, 1991) Therefore, employeeswho are satisfied with their job are more likely to stay in their organizations.From the above, we could hypothesize that:

H1: There is a positive impact of job satisfaction on the retention of bankers.

2.3 Job satisfaction and antecedent factors

Job satisfaction is an employee's general positive attitude toward the job (Byarsand Rue, 2000) It is a commonly defined as the extent to which bankers liketheir work (Agho et al., 1993) It is also an attitude based on employee's negative

or positive perception of their jobs or work environments (Reilly et al., 1991), thedegree to which there is a good fit between the individual and the organization(Ivancevich et al., 1997) Simply stated, the more people's work environmentmeet their needs including intrinsic and extrinsic needs (Abraham Maslow,1954),values, or personal characteristics, the greater the degree of job satisfaction(Ellickson, 2002) will be

Recent studies have identified that job satisfaction of employees is defined andmeasured in two aspects: overall satisfaction of job and satisfaction of jobcomponents Job satisfaction is one criterion for establishing the health of anorganization and overall satisfaction is a function of a combination of situationalcharacteristics and situational occurrences and it is also presented emotionscovered all aspects of work Smith et al (1996) developed a scale to measure jobsatisfaction (JDI-index) It was also used in more than 600 researches among 20years, however, JDI also had defects Some of researches, which are even inWestern development countries, criticized that it was complex, imperfect(Buffum and Konick, 1982) Some researchers had modified the scale to fitspecific contexts (Crossman and Bassem, 2003; Trần Thị Kim Dung, 2005).Considering the above, seven factors are proposed in this study as antecedents ofjob satisfaction They are: work challenge, training and promotion opportunities,leadership support, colleague relationship, salary, benefit, work environment

Additionally, organizational and individual characteristics are included into themodel as moderating factors (age, gender, organization ownership andorganization size).

 Work challenge: related to work nature, chances to use personal skills and

capacities, exciting feeling in work Employees need to be stimulated withcreative challenges or they will go where the excitement is It is very important toprovide employees challenging assignments with well-defined performancemeasures and feedback on the high performance environment because of that,they can achieve their personal objectives (Furnham, 2002) and reaching jobsatisfaction The necessity of mastering new skills keeps employees satisfied andinnovative (Ferguson, 1990; Walker, 2001) Employees want a job with broadduties and a lot of variety tasks In part, it is because they want to have more jobskills on their resume when they are forced to get another job (Jardine and Amig,2001) Organizations which did not give employees with challenging andinteresting work, freedom to be creative, opportunities to develop new skills,were usually received express negativity and lack of loyalty from theiremployees In such organization, employees are more likely to report negativefeelings and attitudes toward the organization, lower levels of commitment, andgreater intentions to leave the organization (Phillips, 1997) Thus, the hypothesisis:

H2 There is a positive impact of work challenge on job satisfaction.

 Training and promotion opportunity: related to employees’ perception to

opportunities of training, personal capacities development, promotion Training

is considered a form of human capital investment whether that investment ismade by the individual or by the firm (Goldstein, 1991; Wetland, 2003) Trainingprograms enhance employee job skills when they are employed Employees areexpected to acquire new skills and knowledge, apply to the current job, and sharethem with other employees (Noe, 1999) Employees who participate in trainingcourse will be provided specific skills or correct deficiencies in theirperformances, while development is only an effort to provide employee abilitieswhich the organization will need in the future (Gomez-Mejia, Balkin and Cardy,

1995) Skill development could include improving basic literacy, technologicalknow-how, interpersonal communication, or problem solving abilities According

to Storey and Sisson (1993), training and promotion is a symbol of the

employer’s commitment to staff Training and promotion can also serve to lower

turnover (Frazis et al., 1998; Wetland, 2003) It is also reflective of anorganizational strategy based on adding value rather then lowering cost Leadingcompanies have acknowledged that providing employees with a comprehensiverange of career and skills development opportunities is the key to attract andretain the kind of flexibility, technologically sophisticated workforce thatcompanies need to succeed in the digital economy (Accenture, 2001; Bassi andVan Buren, 1999).Thus, the hypothesis is:

H3: There is a positive impact of the training and promotion opportunities on job satisfaction.

 Leadership support: related to relationship between employees and leaders,

support of leader, behavior of leader, and leader’s skill on management Thereare many leadership definitions of researchers such as: leadership isconceptualized in terms of four tasks that need to be accomplished in anyorganization: providing orientation, assuring alignment, building commitmentand facing adaptive challenges (Risher and Stopper, 2002) Leaders are central tothe process of creating cultures, systems, and structures that foster knowledgecreation, sharing, and cultivation (Bryant, 2003) The impact of leaders havebeen examined by numerous leadership studies in a wide variety oforganizations, and results show that leadership styles in a high-level of followermotivation and commitment as well as well-above-average organizationalperformance (Bryman, 1992; Elby et al., 1999; Podsakoff and Steyrer, 1998).Several researchers have thought highly of the positive influence of leaders inorganizational outcomes, which resulted in lowered intention to leave andincreased organizational behavior (Alimo-Metcalfe and Alban-Metcalfe, 2001;Pillai, Shreissheim and Williams, 1999; Yammariono and Bass, 1990), leading tostronger organizational commitment, higher intention to stay of employees

(Alimo-Metcalfe and Alban-Metcalfe, 2001; Podsakoff et al., 1996) Therefore,based on the literature review, the hypothesis is:

H4: There is a positive impact of leadership support on job satisfaction.

 Colleague relationship: related to behavior, relation to colleagues at work and

teamwork It is defined as the behavior of an individual that results in unforcedinfluence when that person is directing and coordinating the activities of a grouptoward the accomplishment of a common goal (Bryman, 1992) Colleague’ssupportiveness refers to the friendliness and the extent to which colleagues payattention to comments and concerns (Campion et al., 1993; Hart et al., 2003).Interactions with colleagues may serve an affective psychological function by

providing emotional support against the stresses of the organization’s

socialization initiatives and uncertainties of the work setting (Jablin, 1987).Employees stay when they have strong relationships with their work colleagues(Clarke, 2001) Organizations today encourage team building, projectassignments involving work with colleagues, and opportunities for socialinteraction both inside and outside the job (Marchington, 2000) Fundamentally,employees who work as a team are more likely to feel an increased commitment

to the work unit's efforts and the organization as a whole (Cohen and Bailey,1997; Meyer and Allen, 1997) Consequently, employees tend to remain inorganizations due to the strong teamwork relationship they have established atthe workplace (Clark, 2001; Marchington, 2000) Therefore, it is posited that:

H5: There is a positive impact of colleague relationship on job satisfaction.

 Salary: related to employee’s perception on fairness of pay Salary is related to

job satisfaction Most managers believe that salary is the prior retention factorand many employees leave the organization by better pay or higher compensation(Mathis and Jackson, 2003) Salary continues to be important in determiningmotivation to perform (McCallum, 1998) Past motivational theories such asexpectancy and equity theories have predicted variations in motivation because

of varying valences of outcomes as pay (Das, 2002) However, in practice, salary

is treated as just one of the outcomes and often measured with little precision

(Mitchell and Mickel, 1999) A fair salary is the cornerstone of the contractualand implied agreements between employees and employers, the underlyingassumption being that money can influence behavior (Parker and Wright, 2001).Psychological theory states that the importance of fairness is a basic need for thewell being and satisfaction of employees (Blau, 1989) Therefore, employeeswho perceive that they are being treated fairness in pay are more likely to have ahigh degree of satisfaction and continue their employment with the organization.This research tests the hypothesis that:

H6: There is a positive impact of salary on job satisfaction.

 Benefits: employee benefits, sometimes called Fringe benefits (medical

insurance, healthcare policy, accidence insurance…) are those rewards thatemployees received for being members of the organization and for their positions

in the organization Unlike salaries and incentives, benefits usually do not relate

to employee performance (Byars and Rue, 2000) Employee’s benefit packagesincrease worker commitment to the organization and reduce the tendency to thinkabout other job opportunities (Mitchell et al., 2001) A commitment modeldeveloped by Rusbult and Farrell (1983), based partly on job benefits, shows theabsence of adequate benefits is one of the main factors contributing to low jobsatisfaction and employee intent to leave They also found that portable benefits,such as contribution pensions, reduced anxiety involved in intent to leave andgaining job satisfaction Therefore, it is posited that:

H7: There is a positive impact of benefits on job satisfaction.

 Working environment: this factor refers to work equipments and resources

provided by the organization, work strain, work overload Researchers haveshown that organizational obstacles in relation to inadequate equipment orinsufficient training may be important variables of employee motivation, attitude,and performance, reducing job satisfaction Research has also shown that workoverload contributes to employee strain, tension, job dissatisfaction, decreasingorganizational commitment and turnover (Spector and Jex, 1998) Highworkloads have been shown to lead to negative outcomes, for example,

absenteeism, and low job satisfaction (Fox et al., 1993) According to Spectorand Jex (1998), a high workload may result in feelings of anxiety and frustration.

So, this research tests the hypothesis that:

H8: There is a positive impact of work environment on job satisfaction.

2.4 Moderating factors

This study examines the moderating affects of organization characteristics anddemographics on the impacts of job satisfaction on retention

 Age: The older employees have limited opportunity for changing the jobs and

are more costly hired than younger ones However, they are likely to be moreinvolved in the organization and develop a better fit between personal needs andtheir organization than the younger employees

 Gender: Studies have shown that job satisfaction is related to gender

differences but the research results are not consistent The female has toovercome more barriers than the male, and they are treated unfairly aboutpersonal matters

 Organization ownership: is able to affect job satisfaction Researches showed

that employees in state organizations receive much more favors than those inprivate organizations such as long-term recruitment, benefits, medical insurance,low workload, low work strain (Truong Van Ban, 1996; Vo Dai Luoc, 1997) sothey have higher level of job satisfaction This phenomenon becomes moredistinct in transformed economic countries such as Russia, China, Vietnam (Carl,Elbert et al., 1995) In Vietnamese context, state-own organizations, in general,are broader operational scope, larger structure, modern banking technology…compared to private organizations

 Organization size: similarly, the big-scale organizations are more attract and

retain employees than that small ones

Thus, the hypothesis will be:

H9: The impacts of antecedent factors on job satisfaction are moderated by demographics and organization characteristics such as age, gender, organization size, organization ownership.

2.5 The research model

The antecedent factors that have been hypothesized to have influences on jobsatisfaction and retention are illustrated in the following model:

2.6 Summary of hypotheses

H1: There is a positive impact of job satisfaction on the retention of professional

bankers

H2: There is a positive impact of work challenges on job satisfaction.

H3: There is a positive impact of opportunities of training and promotion on job

satisfaction

H4: There is a positive impact of leadership support on job satisfaction.

H5: There is positive impact of colleague relationships on job satisfaction.

H6: There is a positive impact of salaries on job satisfaction.

H7: There is a positive impact of benefits on job satisfaction.

H8: There is a positive impact of working environment on job satisfaction.

H9: The impacts of antecedent factors on job satisfaction are moderated by

organization/employee characteristics such as age, gender, organizationsize, organization ownership

CHAPTER 3 RESEARCH METHOD

In order to test the model and hypotheses stated in the previous chapter, thisresearch adopts the quantitative approach in which the data were collected bymeans of a questionnaire survey

Research objective

Literature review Model

Result

leave surely, 2 equals leave, 3 equals unclear intention, 4 equals stay, 5 equalsstay surely Age was divided into 4 groups and coded such those 1 equals under

30 years old, 2 equals 31to 40 years old, 3 equals 41 to 50 years old, 4 equalsover 50 years old Gender was coded 1 equals male, 2 equals female Codes ofownership were 1 equals state ownership, 2 equals private ownership or othertypes of ownership Number of staff are divided into 4 groups and coded suchthose 1 equals 20 to 50 staffs, 2 equals 51 to 100 staffs, 3 equals 101 to 200 staffs

4 equals over 200 staffs

The scales for eight constructs in the model have been developed on the basis ofpreviously established studies, in conjunction with the adjustment for contextualsituation (i.e banking industry in Vietnam) Multiple item scales were used in theform of five point Likert type

Accordingly, the items and sources of reference for each scale are presented inTable 3.1

Table 3.1: Summary of scales for 8 constructs in the model

Wor2Wor3Wor4Wor5

Your current work is enjoyableYour current work has a lot of challengesYour work allow to use personal skill wellYour work need high responsibility

Your work is diversiform

Kim Dung, 2005Fegusion, 1990Walker, 2001Scale from 1( total disagree) to

5 (total degree)

Pay2Pay3Pay4

Your salary is fairly high compared with its other company

in the same industryYou can live based on incomeSalary is correspondent with working resultSalary, income is pay fairly

Kim Dung, 2005Mathis and Jackson, 2003Parker and wright, 2001Scale from 1(total disagree) to

5 (total degree)

Ben2Ben3

Company has good policies of benefitCompany has good policies of health and medicalinsurance

Company has subsidized policies to personnel’s difficult

situations

Kim Dung, 2005Scale from 1(total disagree) to

5 (total degree)

Working

Env3Env4Env5

Work strain is lowPart time working is very rareWorkplace is clean and comfortableLong-term employment is stably securedWorking equipments are enough and safe

Kim Dung, 2005Scale from 1(total disagree) to

5 (total degree)

support

Sup1Sup2Sup3Sup4Sup5Sup6Sup7Sup8

Superior always discuss you about related workSuperior encourages you to contribute important decisionYou are known the extant of working responsibilityYou are known the evaluation of superior about yourfulfillment

Superior always support you on the work’s difficulty

You are respected and trusted on work

Superior’s behavior is courteous

You are treated fairly and indiscriminately

Kim Dung, 2005Scale from 1(total disagree) to

You are known promotion conditionsCompany gives you a lot of promotion chancesCompany has fair promotion policies

You are trained essential knowledge and skill on workCompany give you many chances of personal developmentCompany help you developing professional

Kim Dung, 2005Scale from 1(total disagree) to

5 (total degree)

Job satisfaction Job1

Job2Job3Job4Job5Job6Job7

You like to work with companyYou become fond of companyYou satisfy with current workCompany is a suitable place for you to work

You don’t intent to leave company

You want to build company prestigeYou are trying to fulfill company work well

Hilb, 2003Scale from 1(total disagree) to

5 (total degree)

Ren2Ren3Ren4Ren5

intent to stay in company next timeunclear intention to stay or leaveleave surely company among a yearintent to leave company next timestay in company long time surely

Hilb, 2003Scale from 1(total disagree) to

5 (total degree)

3.3 Method of data collection

 Sample size :

- 250 bankers in commercial banks in Ho Chi Minh City were approached for

surveys Respondents include male and female; young and old; state-ownbanks and private banks (limited banks and foreign bank branches); big-scale

or medium-scale banks in Ho Chi Minh City

- Respondents are selected with high grade as senior-officers, supervisors and

managers holding bachelor, master degree or higher degree They are working

in major sections as Loan, Trade, Remittance, Card, Teller, Cashier,Accounting and Deposit

 Method for data collection:

- In-depth interview: to get qualitative data from bankers at commercial banks in

Ho Chi Minh City The results were used as additional inputs into the process

of questionnaire design

- Questionnaire: using quantitative/structured questions to measure various

constructs in the model in order to empirically test the hypotheses

 Interview process: the interviews were face-to-face interview, the interviewquestion around job satisfaction, which factors make them satisfy or dissatisfy

on their work, which ones are their most interested in at work… The collectedinformation was used to modify for questionnaire design

 Data collection process: 250 questionnaires were delivered via email,colleagues, and majority of questionnaires sent to Human ResourceDepartment in selected commercial banks directly The response rate is 76% or

190 respondents which were considered fairly encouraging where commercialbanks in Ho Chi Minh City were not familiar with such kind of surveys Afterfiltering, a number of questionnaires were eliminated due to many missingvalues The data were based on 160 questionnaires – the sample

3.4 Method of analysis

Descriptive and inferential statistics (Cronbach Alpha, EFA, Correlation,Multiple regression analysis) using SPSS software package The analysis process

is implemented as follow:

3.4.1 Assessment of measurement of scale

The multi-item scales developed above have to be evaluated for their reliability,unidimensionality, and validity Cronbach Alpha is the most commonly useapproach to test reliability Cronbach Alpha will be high if the scale items arehighly correlated Unidimensionality is defined as the existence of one constructunderlying a set of items (Garver and Mentzer, 1999) Unidimentionality should

be test before doing reliability tests because reliability such as Cronbach Alphadoes not ensure unidimensionality but instead assumes it exists

In the current research, the main assessment method is exploratory factoranalysis (EAF) using SPSS 11.5 There are two basic methods used forextracting factors in EFA, common factor analysis and principal componentsfactor analysis While principal component factor analysis is used mainly foritem reduction and test unidimensionality, reliability, common factor analysis isfor exploring the latent dimensions represented in the original variables (Conwayand Huffcutt, 2003) and test convergent validity, discriminant validity

The analysis process was implemented through the two respective steps:

 EFA with principal components, eigenvalue ≥ 1 and VARIMAX rotation wasapplied to each of the 7 constructs under investigation (Conway and Huffcutt,2003) The main purpose of this step is to see whether the scale for eachconstruct under investigation is unidimensional (i.e first-order construct) ormultidimensional (i.e second-order construct) For a scale to be empiricallyunidimensional, the factor analysis must result in only one factor extracted.Moreover, items with low factor loadings <0.40 were eliminated because they donot converge properly with the latent construct they were designed to measure(Garver and Mentzer, 1999) Then, reliability analysis (Cronbach Alpha) wasapplied to each set of items (i.e each scale) to assess and refine the measurementitems Items having low Cronbach Alpha ≤ 0.60, item-to-total correlationcoefficients ≤ 0.35 were eliminated

 A joint EFA with the same setting (i.e principal axis factoring, eigenvalue ≥ 1and VARIMAX rotation) was performed Given the result of step 1 where each

item loads highly on the factor representing its underlying construct, this jointEFA allows all items to correlate with every factor without being constrained tocorrelate only with its underlying factor (Kline, 1998) Consequently, it allowsthe investigation of the general correlation pattern of the measurement items(Fabrigar et al., 1999).



First, no item load highly on more than one factor to indicate unidimensionalitymeasurement, i.e one item measures only one construct (Anderson and Gerbing,1988) Second, all items comprising a scale must load highly on one factorrepresenting the underlying construct High loadings of all items indicateconvergent validity, while loading on only one factor indicatesunidimensionality construct Third, no factor consists of two sets of itemsloading highly on it to indicate discriminant validity (Hair et al., 1998; Garverand Mentzer, 1999)

3.4.2 Multiple regressions

After completing the refinement, the multiple regressions were implemented toidentify quantitative the relation of antecedent factors and job satisfaction, therelation of job satisfaction and retention

After analysis steps above, the empirical results are figured out Based on theseresults, the discussions are implemented in order to draw managerial implicationand suggest a recommendation for further research or managerial problems

In order to test the model and hypotheses stated in the previous chapter, thisresearch adopts the quantitative approach in which the data were collected bymeans of a questionnaire survey

CHAPTER 4 RESEARCH RESULT

4.1 Introduction

The previous chapter describes the research design, the constructs and themeasurement scales used in this study This chapter presents samplecharacteristics, the assessment and refinement of these measurement scalesbased on the data set of 160 cases, the results from statistical estimation, thediscuss and managerial implications

4.2 Sample characteristics

As mentioned in the previous chapter, the data were collected from 250questionnaires delivered through colleagues and email to Human ResourceDepartment in selected commercial banks The response rate is 76%, which isconsidered fairly encouraging where commercial banks in Ho Chi Minh City arenot familiar with such kind surveys After filtering, a number of questionnaireswere eliminated due to many missing The data were then based on 160questionnaires – the sample The following sections describe the maincharacteristics of the sample

Table 4.1: Sample characteristics

Categories Frequency Percent Valid percent Cumulative

percent Bank ownership

The sample consists of 68 (equivalent to 42.5%) state-own banks, 92 (equivalent

to 57.5%) private banks These percentages reflect the structure of the wholepopulation which is dominated by private sector

The sample consists of 49 (equivalent to 30.6%) bankers working forcommercial banks which have 20 to 50 staffs; 34 (equivalent to 21.3%) bankersworking for commercial banks which have 51 to 100 staffs; 17 (equivalent to10.6%) bankers working for commercial banks which have 101 to 200 staffs, 60(equivalent to 37.5%) bankers working for commercial banks which have over

200 staffs

The majority of bankers in the sample are around of 31 to 40 year olds Amongthe 160 cases, 35.6% or 57 bankers which are less than 30 years old, 45.6% or

73 bankers are between 31 to 40 years old, 11.3% or 18 bankers are between 41

to 50 years old , and only 7.5% or 12 people are more than 51 years old

There are 60% or 96 male respondents and 40% or 64 female respondents Thissuggests that majority of key personnel in banking industry who wereparticipated in this study are male

4.3 Assessment of measurement scales

Following the procedure and criteria described in Chapter 3, the process ofassessment and refinement of measurement scales are implemented through twosteps using of SPSS 11.5 software The first step is EFA and Cronbach Alpha toassess unidimentionality and reliability The second step is EFA with all scalestogether in order to assess convergent validity and discriminant validity In thisprocess, the items which do not meet evaluating criteria are eliminated Afterrefinement, reliability of scales is re-assessed by Cronbach Alpha Criteria ofrefinement of items include: factor-loading >0.40, item-total correlation >0.35,Cronbach Alpha > 0.60, % of variance > 60% (Hair and et al., 1998)

4.3.1 EFA for individual scales of antecedent factors

EFA results (Table 4.5) show that out of seven scales, four were immediatelyaccepted while three scales needed some refinements The scales that did not

require any modification are shown in Table 4.5 These include salary-pay (4items), benefit (3 items), opportunities of training and promotion (6 items),colleague relationship Using the latent root or Eigenvalue greater than 1criterion, the results show that only one factor was extracted for each of thesescales The variance explained by the extracted factor ranges from 60.97% to70.87% while the factor loadings are all above the threshold of 0.40 Theseresults indicate that all of the four scales listed above are unidimensional.

After established, these scales are unidimensional, the reliability was assessed

As shown in Table 4.5, the Cronbach Alpha of these four scales are all wellabove the threshold of 0.60 (range is from 794 to 869) The item-totalcorrelations, which range from 0.450 to 0.825, are also all above the threshold of0.40 All items comprising these four scales were therefore retained

Table 4.2: EFA and reliability test results for four scales

Construct / Items Factor

loading

%Variance Extracted Eigen value

Item-total correlation

Cronbach Alpha