Exploring factors affecting employee job satisfaction at bank for investment and development of viet nam

Because of that, I decided to delve into the topic "Exploring factors affecting employee job satisfaction at Bank for Investment and Development of Vietnam" BIDV threads clarify this iss

RESEARCH PROJECT (BMBR5103)

EXPLORING FACTORS AFFECTING EMPLOYEE

AND DEVELOPMENT OF VIETNAM

STUDENT’S FULL NAME : NGUYEN PHUONG NAM

STUDENT ID : 14967

INTAKE : MARCH 2013

ADVISOR’S NAME & TITLE : NGUYEN THE KHAI, DBA

SEPTEMBER 2014

ADVISOR’S COMMENTS

Advisor’s signature:

DECLARATION

I declare that the work on which this dissertation is based, hereby submitted to Open University Malaysia for the degree of Master of Business Administration This wok has not previously been submitted by me for a degree at this or any other university It is my work in design and execution, and that all material contained herein has been duly acknowledged

Nguyen Phuong Nam (Mr.)

ACKNOWLEDGEMENTS

Firstly, I came to my great pleasure to have a chance to attend the official course of Strategic Management of OUM and HUTECH conducted by Nguyen The Khai, DBA two months ago Through this class, a lot of knowledge on Business Research Method with different angles, art and skills needed have been absorbed carefully and this will help me a lot in the long run to work in business environment

Secondly, understanding of Business Research Method will help me and other members of the class build teamwork’s environment, leading team and motivate others through Business Research Method

Thirdly, I would like to express my great thankfulness to my lecturer – Nguyen The Khai, DBA, who inspired me with interesting lessons, ways of systematic learning that will be very useful for me

With kind regards,

Nguyen Phuong Nam

Contents

ADVISOR’S COMMENTS iii

DECLARATION iv

ACKNOWLEDGEMENTS v

LIST OF TABLES ix

LIST OF FIGURES ix

ABSTRACT 10

CHAPTER 1: OVERVIEW 11

1.1 BIDV introduction 11

1.2 Context of the study: BIDV’s inside problems 12

1.3 Research problem statement 13

1.4 Research objectives 13

CHAPTER 2: LITERATURE REVIEW 15

2.1 Definitions of Constructs 15

2.1.1 Job satisfaction 15

2.1.2 Benefits 16

2.1.3 Work-related expectancies 18

2.1.4 Performance appraisal system knowledge 18

2.1.5 Supervison 20

2.2 Theories of Job Satisfaction 21

2.2.1 Maslow Hierarchy Theory 21

2.2.2 Herzberg’ Two-Factor Theory 22

2.2.3 Vroom’s Expectancy Theory of Motivation 23

2.2.4 Adams’s Equity Theory (1963) 24

2.2.5 Locke’s Range of Affect theory 25

2.3 Proposed research model and hypotheses 26

2.3.1 Proposed research model 26

2.3.2 Proposed research hypotheses 27

CHAPTER 3: RESEARCH METHODOLOGY 28

3.1 Sample 28

3.2 Measurement of variables 28

3.2.1 Benefits 28

3.2.2 Job satisfaction 28

3.2.3 Work-related expectancies 29

3.2.4 Performance appraisal system knowledge 30

3.2.5 Supervision 32

3.3 Data collection 33

3.4 Data Analysis 33

CHAPTER 4: RESEARCH FINDINGS 34

4.1 Construct Reliability 34

4.1.2 Main construct: Job satisfaction 35

4.1.2 Construct: Performance Appraisal System Knowledge 35

4.1.3 Construct: Work-related expectancies 35

4.1.4 Construct: Benefits 36

4.1.5 Construct: Supervision 36

4.2 Descriptive statistics 37

4.3 Correlations among variables 38

4.4 Hypothesis testing results 39

4.4.1 Proposed hypothesis H1 40

4.4.2 Proposed hypothesis H2 41

4.4.3 Proposed hypothesis H3 42

4.4.4 Proposed hypothesis H4 43

CHAPTER 5: DISCUSSION AND RECOMMENDATION 44

5.1 Discussion 44

5.2 Managerial implications 45

REFERENCES 46

APPENDIX 1 50

LIST OF TABLES

Table 8: Cronbach's alpha of Construct Performance appraisal system knowledge 35

LIST OF FIGURES

ABSTRACT

Employees are internal customers of the organization, to meet the current requirements and is willing to work with organizations to implement business objectives However, most organizations focus on customer satisfaction about the product, but very little attention to employee's satisfaction with his work or not The satisfaction of employees towards work will boost the quality of banking operations Therefore conducted a study on employee satisfaction towards work is a necessity for the development of the bank Because of that, I decided to delve into the topic "Exploring factors affecting employee job satisfaction at Bank for Investment and Development of Vietnam" (BIDV) threads clarify this issue.This study discusses the factors that influence job satisfaction Data were collected through questionnaire from 270 employees (n=270) of four departments in BIDV The hypotheses were tested using SPSS software, version 15.0 All variables were tested the reliability Cronbach’s Alpha, the correlations, descriptive statistics, and the like The study result reveals that procedural justice, work-related expectancy, perceived organizational support, and performance appraisal system knowledge have positive relationship with job satisfaction This result helps the managers of BIDV have a more holistic view of enterprise systems and more specific policies strategies The company should appropriate to improve employee satisfaction contributing to impact customer satisfaction, empowerment and competitiveness of their enterprise on the market The implications to human resource development for organizations that want to increase employee job satisfaction is to focus on enhancing the support for the employees, improving the procedural fairness, and caring the employee’s expectancies and the like

Key words: job satisfaction, benefits, work-related expectancies, performance appraisal systems, supervision, BIDV

CHAPTER 1: OVERVIEW

1.1 BIDV introduction

As a long-established bank, BIDV has funded many investment projects and key economic areas of the country Joint Stock CommercialBank for Investment and Development of Vietnam (BIDV) has also built the largest enterprise customers, while confirming the implementation of prestigous items, objectives, economic programs and social security of the country

- Full name: Ngân hàng TMCP Đầu tư và Phát triển Việt Nam

- International Transaction Name: Joint Stock Commercial Bank for Investment and Development of Vietnam

- Abbreviated name: BIDV

- Address: BIDV Tower, 35 Hang Voi Street, Hoan Kiem District, Hanoi City

coordinating key projects of the country such as company Aviation stock leasing (VALC) development company highway (BEDC), Investment, Long Thanh International Airport …

1.2 Context of the study: BIDV’s inside problems

With more than 16,000 officers, employees and financial consultants who are qualified and trained with full experience and have been accumulated and transferred for over half of a century, BIDV always brings its customers the benefits and reliability

well Banking Network: BIDV has 118 branches and 500 transaction offices, thousands of ATMs and POS transactions in 63 provinces and cities nationwide

- Non-banking Networks: consists of Investment Securities Company (BSC), Insurance and Investment Company (BIC) and Leasing Company with more than 20 branches nationwide

- Overseas representatives: It trades on all three sectors: Banking, Insurance and Financial Investment

in Laos, Russia and especially in the Cambodian market (Investment and Development Company of Cambodia – IDCC, Investment Banking and Development of Cambodia – Cambodian BIDC, Insurance Company – CVI

- Joint venture Bank: Co-operates more effectively with international partners such as Bank Public Venture (partner Malaysia), Bank of the Lao-Vietnamese joint venture (with partner Laos), Vietnam Russia Joint Venture Bank – VRB (with partners Russian), BIDV Tower Joint Venture Company (Singapore partner), venture investment management BIDV – Vietnam Partners (U.S partner), etc

VID-However, BIDV is now facing a large amount of troubles which are as follows:

+ The number of employees resigning is increasing The company has difficulty in HR when the working environment is not much supported for their employees

+ A numberous old employees resigned because they cannot find the promotion opportunities

+ The number of new employees is on the increase, but they are not skillful and qualified

+ The justice is considered as a problem for bank.

1.3 Research problem statement

Today, in the stiff conditions of the market, competition for human resources has always been

a hot issue in the company Many companies have recognized the importance of human resources while the employees are considered the property, and the company's lifeblood A company can have modern technology, better service quality, and infrastructure but without the workforce working effectively, the company is unlikely to survive and build competitive advantage That how to exploit the resources to serve the development of the company as well as to take advantage of resources for social development is an urgent question necessary for the general management and human resource managers in particular To effectively manage critical resources, the first thing is to know and to understand the people who are the central element of the development At the same time, that is to create conditions to unleash the potential in every human being There will not be such a waste of resources and motivation to promote personal fulfillment and organizational development

As a service company, BIDV with more than 16,000 employees always serve the best services and products for the customers In case that their employees satisfied with their job, the effectiveness and efficiency will be improved which leads to better care for their customers

Recognizing the important of the employee job satisfaction, I confidently choose “Exploring factors affecting employee job satisfaction at BIDV” as my research topic

1.4 Research objectives

This research is made in order to fulfill the following objectives:

+ Identify the factors that influence employee satisfaction with the job

+ Survey and assessment of employee satisfaction for thejob at BIDV

+ Propose a solution to improve employee satisfaction on the job at the BIDV

CHAPTER 2: LITERATURE REVIEW

2.1 Definitions of Constructs

2.1.1 Job satisfaction

In Organizational Behavior Research, Job satisfaction or Employee Satisfaction is one of the most used variables It is an employee's attitudinal response to his or her organization There are numerous definitions of job satisfaction Following are the most used definitions

According to Hoppock (1935), job satisfaction is defined as any combination of psychological, physiological and environmental circumstances that cause a person truthfully to say I am satisfied with my job

Vroom in his definition on job satisfaction focuses on the role of the employee in the workplace Thus he defines job satisfaction as affective orientations on the part of individuals toward work roles which they are presently occupying (Vroom, 1964)

In 1969, Locke defined “overall job satisfaction” as “a function of the perceived relationship between what one wants from one’s job and what one perceives it as offering.”

Furthermore, more satisfied employees have more innovative activities in continuous quality improvement and more participation in decision-making in organizations (Kivimaki and Kalimo, 1994)

Also, Schein (1996) said that employees’ motivation was essential to an organization’s success; thus, by understanding employees in their jobs and by clearly knowing the factors motivating them, organization could gain organizational commitment

In accordance with Misener et al (1996), job satisfaction is generally recognized as a multifaceted construct including employee feelings about a variety of both intrinsic and extrinsic job

elements It encompasses specific aspects of satisfaction related to pay, benefits, promotion, work conditions, supervision organizational practices and relationships with co-workers

According to Armstrong (2006), job satisfaction refers to the attitude and feelings workers have about their work Positive and favorable attitudes towards the job indicate job satisfaction Vice versa, negative and unfavorable attitudes towards the job indicate job dissatisfaction

According to Greenberg and Baron (2008), job satisfaction can be understood as the employee’s positive or negative attitude in relation to the work

According to George et al (2008), job satisfaction can be defined as the collection of feeling and beliefs that people have about their current job Besides having attitudes about their jobs as a whole, people can have attitudes about different aspects of their jobs such as the kind of work they

do, their coworkers, supervisors or subordinates and their pay

In general, job satisfaction is critical to retaining and attracting well-qualified personnel Job satisfaction is an attitude that people have about their jobs and the organizations in which they perform these jobs

2.1.2 Benefits

2.1.2.1 Definition

Employee benefits and benefits in kind (also called fringe benefits, perquisites, or perks) include various types of non-wage compensation provided to employees in addition to their normal wages or salaries In instances where an employee exchanges (cash) wages for some other form of benefit is generally referred to as a 'salary packaging' or 'salary exchange' arrangement In most countries, most kinds of employee benefits are taxable to at least some degree

Source : http://en.wikipedia.org/wiki/Employee_benefit

2.1.2.2 The relationship between job satisfaction and employee benefits

Research findings indicate that all factors have significant effect on employees’ job satisfaction (Morse, 1953; Mohanty, 1973; Sinha, 1973) Watson (1969), Watson and Seidman (1941), Mohanty (1981) have implied that salary is not an important cause of job satisfaction It is in fact not the employees, but the employer and the management who consider the pay to be the important cause of job satisfaction This is definitely due to the gap in communication between the workers and the management Of course the role of pay in job satisfaction can not be denied, because besides helping one to live and exist money gives social status, prestige and a sense of security In Herzberg, Mauser, Perterson and Chapwell’s (1957) investigation, wages get the sixth ranking in a twelve point scale According to the reports of Mornhauser’s study (1940) the higher income group indicated greater personal satisfaction Sinha (1965) found higher and lower income groups tended to be satisfied and middle group was least satisfied The lower income group had the highest job satisfaction score By analyzing various research findings it can be said that job satisfaction is positively related to wages (Miller, 1941; Centers and Cantrill, 1946; Barnett et al.; 1952; Marriott and Denerley, 1955; Lawler and Porter, 1963) Khaleque and Rahman, 1983; Khaleque and Chowdhury, 1983 state that for increasing the employees’ job satisfaction, wage is less important factor but it has important effect on job dissatisfaction Lumpkin & Tudor (1990) and Stedham & Yamamura (2000) showed that female managers are paid less and are less satisfied with their salary; thus, it follows that they are not satisfied with their salary Clark (2001) finds that both satisfaction with pay and job security are the most important job satisfaction categories for determining future quits Therefore, the following hypotheses can be proposed:

H1: There is a positive relationship between job satisfaction and benefits

2.1.3 Work-related expectancies

2.1.3.1 Definition

Eisenberger, Fasolo, and Davis-LaMastro (1990) developed the measure describing the extent

to which employees believe that higher levels of job performance will be rewarded The measure assesses employee expectancies about the relationship of better performance with increased pay, promotion, and job security It also assesses employee expectancies that better performance will lead

to increased influence, supervisory approval, and recognition

2.1.3.2 The relationship between work-related expectancies

According to Eisenberger, Fasolo, and Davis-LaMastro (1990), factor analysis of the nine items found two factors for work-related expectancies One dimension captures expectancies about pay and promotion rewards The other dimension describes expectancies about approval and recognition The two factors were consistent across samples of hourly workers and managers Expectancies for pay/promotion rewards and approval/recognition/ influence both correlated positively with perceived organizational support, job satisfaction, participation in decisions, and job involvement Expectancies for rewards and influence both correlated negatively with role conflict and ambiguity (Eisenberger et al., 1990; Smith & Brannick, 1990) The hypothesis can be suggested as follows:

H2: There is a positive relationship between work-related expectancies and job satisfaction

2.1.4 Performance appraisal system knowledge

developmental and administrative (decision-making & evaluative) uses In 1992, Williams and Levy developed the research to describe the extent to which employees perceive they understand important aspects of the performance appraisal system related to their job Performance appraisal system knowledge has been found to explain the extent of agreement between employee and supervisor ratings of work performance Baruch (1996) justifies the uses of performance appraisal systems for two main purposes: Firstly, they serve a variety of management functions such as decision-making about promotions, training needs, salaries, etc and then to enhance developmental processes of employees or as an evaluation instrument Grubb (2007) feels that performance appraisals are important: (1) to promote organizational efficiency and effectiveness; (2) to enhance individual employee performance and satisfaction; (3) to simplify administrative processing; and (4) to ensure management retains control of employee behaviors and attitudes From the research of Towne (2006), performance evaluation is used to appraise the quality of working being done, as outlined in the job description, and provides feedback to the employee either verbally, in writing, or both

2.1.4.2 The relationship between job satisfaction and performance appraisal system knowledge

In 1981, Dipboye and Pontbriand found that in case that employee development and performance improvement were enhanced in the performance appraisal, employees felt more satisfied and had greater acceptance of the performance appraisal

According to Prince and Lawler (1986), the constructs "work planning and goal setting" and

"discuss performance attributes" had a positive influence on employees' satisfaction with and perceived utility of the performance appraisal In contrast, the construct "career development" showed little influence on performance appraisal satisfaction

Investigating employees’ attitudes towards various aspects of the performance appraisal system, according to Mount (1984) and Pooyan & Eberhardt (1990) found that open, two -way

communication, mutual trust, opportunities for appraisees to joint goal setting, the supervisor’s knowledge of the employees’ performance and being evaluated on job-related factors, are significantly related to ratees’ satisfaction with performance appraisals

In accordance with Cascio (1996), satisfaction with appraisals has been defined as how content employees are with the level of involvement they have in the performance appraisal process, quality

of feedback given to them and the linkage to reward allocations

In 2007, Jawahar conducted a research and reported that satisfaction with appraisal feedback was positively related to job satisfaction and organizational commitment and negatively related to turnover intentions Thus, the proposed hypothesis could be as follows:

H3: There is a positive relationship between performance appraisal system knowledge and job satisfaction

2.1.5 Supervison

2.1.5.1 Definition

The definition of supervision was first proposed by Mann (1965) He suggested that supervision

is an organizational role whose effective enactment entail ability to reconcile and cordinate the needs

ad goals of the work group’s members whit organizational requirements

2.1.5.2 The relationship between job satisfaction and supervision

Haward and Frink (1996) states that supervisors’ behaviour, relationship with co-workers are positively related to job satisfaction A large number of research findings indicate that employees’ high morale and job satisfaction depend on supervisors’ employee centered attitude and their considered behaviour ( Halpin, 1957; Seeman, 1957; Fleishman et al.; 1955; Likert,1961) Begum and Anwar (1978) found that the rate of production of high structure and high consideration

supervisors’ was very high From the results of these studies the importance of supervisor in job satisfaction is evident.

Previous study by Scarpello, V., & Vandenberg, R (1987) disputes that supervision support job satisfaction Thus, the proposed hypothesis could be as follows:

H4: There is a positive relationship between supervision and job satisfaction

2.2 Theories of Job Satisfaction

2.2.1 Maslow Hierarchy Theory

In 1943, Abraham Maslow developed the hierarchy of needs theory He states that people have

a pyramid hierarchy of needs that they will satisfy from bottom to top The lower level represents the lower needs while the upper point represents the need for self-actualization Maslow's basic needs include biological and physiological needs, safety needs, belongingness and love needs, esteem needs, and self-actualization needs

F IGURE 1: M ASLOW ' S H IERARCHY N EEDS T HEORY

When Maslow's hierarchy of needs is applied to work situations, it implication is that managers have the responsibility to make sure the deficiency needs are met Employees have to be satisfied with the lowest needs including a safe environment and proper wages Then, employees have to have chance or climate to develop their fullest potential

2.2.2 Herzberg’ Two-Factor Theory

Frederick Herzberg developed the Two-Factor theory for job satisfaction This theory used two dimensions, “motivation” and “hygiene” According to this theory, motivation factor can be the reason for increasing the level of job satisfaction while hygiene factor can be the cause of dissatisfaction Salary, safe working conditions, and the like can be included in the hygiene factor; whereas, motivation factors are related in the job characteristics including achievement, recognition, and intrinsic interest in the work itself Herzberg’s theory helps explain the reason why employees with high salaries and great working conditions still lack motivation The reason is that motivation

actualization needs Esteem needs

Self-Belongingness & Love

needs Safety needs Biological & Physiological needs

actually comes from the work itself Managerial implication is that managers have to look into the nature of the jobs when asking employees to do Herzberg’s idea is that if the employers want an employee to perform well, he or she has to have a suitable job to begin with

2.2.3 Vroom’s Expectancy Theory of Motivation

In 1964, Vroom developed the Expectancy Theory of Motivation which helps explain the behavioral process of why people choose one behavioral option instead of others The Expectancy Theory of Motivation includes three variables naming Valence (V), Expectancy (E), and Instrumentality (I) The three elements are important behind choosing one element over another because they are clearly defined: effort-performance expectancy (E>P expectancy), performance-outcome expectancy (P>O expectancy)

F IGURE 2: V ROOM ' S E XPECTANCY T HEORY OF M OTIVATION

According to this theory, job satisfaction is based on people’s belief about the probability that their effort will lead to expectancy multiplied with the probability that performance leads to instrumentality and the value of perceived rewards or valence The amount of effort exerted on a job will base on the expected return, which will lead to the increase pleasure or decrease displeasure People may perform well and be satisfied in case that they clearly know what they will be rewarded for their efforts

Thus, in order to increase the performance-outcome tie, managers should use reward system which is closely related to performance Rewards have to be deserved and wanted by the recipients

To increase the effort-performance tie, managers should involve in training in order to increase and improve their capabilities and improve the belief that effort will lead to better performance

2.2.4 Adams’s Equity Theory (1963)

In 1963, Adams developed equity theory in order to explain relational satisfaction in terms of perceptions of fair or unfair distributions of resources within interpersonal relationship Equity theory shows that a person identifies the amount of input (things he or she gained) from a relationship in comparison with the output (things he or she given) to produce an input/output ration One will then compare his or her ratio to the ratio of other employee, which will help him or her decide if he or she has an equitable relationship

It is believed that employees value fair treatment causing them to be motivated to keep the fairness within the relationship of their co-workers and organization According to this theory, in the business environment, individuals will experience distress which leads to effort to restore equity within the relationship It can be understood that employees in any position expect that their contribution and performance will be rewarded with their pay In case that an employee feels underpaid, he or she will have the hostile feeling towards the organization and his or her co-workers Based on this theory, managers have to develop tools or policies to pay employees in proportion to their contribution to work

2.2.5 Locke’s Range of Affect theory

In 1976, Edwin A Locke developed Range of Affect Theory which is arguably the most famous job satisfaction model The main premise of this study is that the difference between what one wants

in job and what one has in a job will determine the job satisfaction The theory also states that how much one values a given facet of work moderates how much satisfied or dissatisfied one feel when his or her expectation is met or is not met Locke stated that when one values a particular facet of his

or her job, his or her satisfaction is met if the expectancies are met; vice versa, that the expectancies are not met leads to his or her dissatisfaction

2.3 Proposed research model and hypotheses

2.3.1 Proposed research model

According to given research, I suggested a research model as follows: