Low employee engagement at RSM DTL auditing company

The low level of employee engagement led to the higher turnover rate, the low performance, the absenteeism and the low organization commitment.. As the result, it was found that the phys

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

CONTENTS

EXECUTIVE SUMMARY 2

CHAPTER 1 - PROBLEM IDENTIFICATION 3

1.1 Introduction about the Company and the central problem 3

1.2 Justify the existence of the problem 8

1.3 Justify the importance of the problem 14

CHAPTER 2 - CAUSE VALIDATION 18

2.1 Potential causes of the problem 18

2.2 Cause justification 25

CHAPTER 3 – ALTERNATIVE ANALYSIS and ALTERNATIVE CHOICE 31

3.1 Training program 31

3.2 Improving physical work environment 37

3.3 Rewards 41

3.4 Leadership 44

3.5 Strategy evaluation 49

3.6 Recommendation 51

CHAPTER 4 – ACTION PLAN 52

CHAPTER 5 – SUPPORTING INFORMATION 54

5.1 Interview transcript to explore the potential problems and central problem .54

5.2 Scale items to justify the existence of the problem .57

5.3 Questions for Interview at RSM DTL Company to test the existence of the problem 59 5.4 Interview transcript for testing the existence of the problem 60

5.5 Survey Questionnaire to justify the existence of the problem sent to RSM DTL, Grant Thornton and BOD Vietnam 63

5.6 Survey to justify the existence of the problem at Grant Thornton and BOD 65

5.7 Scale items to justify the importance of the problem 65

5.8 Interview transcript to justify the importance of the problem 67

5.9 Cause justification 69

REFERENCES 80

LOW EMPLOYEE ENGAGEMENT AT RSM DTL AUDITING COMPANY

EXECUTIVE SUMMARY

This topic is to research the effective solutions to increase the level of employee

engagement at RSM DTL Auditing Company The first step is to find the central

problem, to justify the existence of the issue and to justify the importance of the problem

by analyzing the organization through interview and survey for employees The low level

of employee engagement led to the higher turnover rate, the low performance, the

absenteeism and the low organization commitment Secondly, the researcher investigates the potential causes of the problem and validates the root causes of the problem to find the appropriate strategies via literature reviews and in-depth interviews with the

managers and the employees As the result, it was found that the physical working

environment, the ineffective training program, the reward and the leadership are the most significant causes leading to the low level of employee engagement at RSM DTL The paper suggested the combination of solution relating to improving the training program, physical work environment, reward system as possible solutions to enhance the level of employee engagement at RSM DTL Auditing Finally, the action plan with detailed steps was presented to implement these strategies

CHAPTER 1 PROBLEM IDENTIFICATION 1.1 Introduction about the Company and the central problem

RSM DTL Auditing Company established in 2001 is one of the top ten accounting and advisory firms in Vietnam with more than 140 employees serving mid to large public-listed, multi-national and private companies in various industries The operation of DTL

is divided into two fields including Auditing and Tax consulting With the mission “RSM DTL Auditing wants to be your great business partner by way of bringing creative added value solutions to your success in local and global environment” (RSM DTL profile, 2014), DTL endeavor to provide the clients with professional services following

international quality standards adapted to Vietnam business environment In addition, the Company also pays more attention to build up a professional team to get effectiveness in working, to satisfy the increasing demand of customers and to develop the organizational culture instead of focusing on finding more clients However, the approach and

application process have not been implemented and the employees continue waiting the positive changes

In this paper, we focus on the Tax Consulting Department, currently comprising of forty three (43) employees In fact, we can get the kindly supports from the Management of Tax Department and the annual revenue often accounts for 70% of total Company‟s revenue Due to the variety of services provided to customer, this department is

structured in eight groups and each group handles one main business line such as tax advisory, tax compliance, accounting, etc

According to the Human Resource Department data, the number of employee leaving job has increased significantly (i.e 14.8% in 2013, 16% in 2014 and 19 % in the first six months of 2015) In comparison with the average turnover rate of industry (i.e around 15% for 2014 and the first six months of 2015), the turnover rate of RSM DTL was higher than that The figures show that the turnover rate rose by 3% in the first six

months of 2015 and till not stop here From 2013 until now, the staff turnover rate has been on up trend and has the sign of continuous increase next time Additionally, based

on the Data from the Human Resource Department, the number of leaving employees at senior position with over three year working experience account for 70%

Together with the high staff turnover rate, the performance of employee has the sign of decrease as discussed with the Managing Partner in charge of Tax Department The working result from the staff sending to the managers was not good as expected and there were more mistakes in calculating and reporting Moreover, employees did not put in much effort to ensure maximum productivity for the Company; there were increased cases of tardiness and absenteeism, rework and poor quality of output, inappropriate and unnecessary socializing during working hours and a general lack of interest in the job There are many reasons leading to these consequences However, based on the intake meeting and interview with DTL members including Mr Le Khanh Lam – Managing Partner of Tax and Consulting Department and employees, the potential problems

relating to decreasing work quality and productivity, employee appraisal and employee engagement need to be considered and analyzed at present Therefore, the problem mess was developed below to reflect the current situation of Company

Figure 1.1: The initial cause – effect map

Firstly, from the last three months of the year 2014 until now, due to considerably

increasing number of customers, the work volume as well as the pressure has also risen However, the workload assigned for each group was unequal and the complexity for each job was different In addition, the number of employee was constant at that time and the Company could not recruit more staff quickly to be in charged of new jobs Although the new clients often had the complex issues, the revenue received was not high as expected

To attract the potential customers, the fee charge for services provided was competitive

Increasing work volume

Increasing

customers

Increasing work pressure

Decreasing work quality and productivity

Unequal work sharing between groups

Lacking of attention to work

Decreasing enthusiasm

Increasing

absenteeism

Low employee engagement

High employee turnover rate

Salary/ bonus based

on level of position instead of performance

Ineffective employee appraisal

Low employee performance

Appraisal form provided general information

with other entities on the market For new clients, employee had to spend more time on working with them These conditions led to the decrease of work quality and

productivity and the Tax Partner was aware of that as a critical issue need to be solved Nevertheless, this problem need a lot of time and can be related to many aspects such as human resource management, business strategies, cost and revenue estimation, etc to be solved thoroughly

From discussion with the Tax Partner, the second problem was the employee appraisal process In fact, the applied assessment was based on the level of position instead of the performance of employee Additionally, the assignment for each staff at the same

position was different according to the employee capability and the job complexity Moreover, the appraisal form was designed to collect the general information of staff and could not reflect sufficiently the working process of employee At present, DTL is

preparing the new appraisal system including the detailed assessment for each job at the mid-year and the comprehensive appraisal at the ending of the year

The last issue was related to the level of employee engagement As mentioned above, based on the data from the Human Resource Department, the number of employee

leaving job has increased significantly (i.e 14.8% in 2013, 16% in 2014 and 19% in the first six months of 2015) Furthermore, the number of laborers coming in late has also risen considerably connected with the weekly employee attendance report of the

Administrative manager The enthusiasm of staff has the sign of depression

In addition, the Tax Partner observed that the employees had the signs of lacking the attention in work There were a number of staff including the new members under one year position frequently used the working time for individual needs such as surfing the internet, connecting the social network for chatting, reading online newspapers, making online transactions, etc When had the free time, they were not in the habit of improving the knowledge by themselves through reading the updated regulations, studying the customers‟ documents to broaden the experience on treating the real situations The specific characteristic of the tax advisory industry was that the rules, the laws could change and supplement day by day Therefore, the self-awareness of collecting the new was very important Currently, there are approximately 30% members spends more than one hour per day within working times for personal issues via internet network as

mentioned above as the statistic figure from IT Department These activities cause the low intention in main tasks and leading to the inefficiency in work Moreover, the

number of products sent to him for final review in recent times with lower quality than his expectations as well as missed the deadline was higher than the previous time These aspects can prove that the Company has the trouble with employee engagement

Therefore, in line with the data collection from the Company and the results from other interviews with employees, under the limited time, resources and the acceptance of the BOD, the low level of employee engagement is considered as the most significant issue needed to be analyzed at the present

1.2 Justify the existence of the problem

Firstly, it is very important to understand sufficiently the meaning of “employee

engagement” In terms of engagement, people express themselves cognitively,

physically, and emotionally while performing their work roles (Kahn, 1990)

Engagement, on the other hand, is indicated by job resources such as job control, the availability of learning opportunities, access to necessary materials, participation in the decision-making process, positive reinforcement, and support from colleagues (Freeney, 2006) The Gallup Organization, defines engaged employees as those who, "work with a passion and feel a profound connection to their company" and "drive innovation and move the organization forward" (Harter et al., 2009) Employee engagement –refers to a psychological state where employees feel a vested interest in the company‟s success and perform to a high standard that may exceed the stated requirements of the job according

“absorption” (e.g feeling immersed) Vigor refers to high levels of energy while

working, the willingness to invest effort in one‟s work, and persistence even in the face

of difficulties; dedication refers to being strongly involved in one‟s work, and

experiencing a sense of significance, enthusiasm, inspiration, pride, and challenge; and

absorption refers to being fully concentrated and happily engrossed in one‟s work,

whereby time passes quickly and one has difficulties with detaching oneself from work Based on this perception, the Utrecht Work Engagement Scale (UWES)-9 item indexes including valid and reliable questionnaire was developed to measure the employee

engagement as a combination of vigor, dedication, and absorption

The most comprehensive study to date of employee engagement has come from The Gallup Organization‟s research using the Q12 instrument Gallup developed the Q12 instrument for measuring employee engagement According to the Gallup Organization, (Harter et al., 2009) define Employee engagement as "the individual's involvement and satisfaction with as well as enthusiasm for work” The Q12 questionnaire is a means of measuring “actionable issues” or “engagement conditions” where employee attitudes can

be predicted and ultimately engagement is measured (Harter et al., 2009) Depending on Gallup (2002), there are three types of people comprising of engaged employees, not engaged employees, and actively disengaged employees Engaged employees are

builders who consistently strive to give excellence within their roles Not engaged

employees focus on the tasks spelled out to them rather than the goals of the

organization They do what they are told to do Actively disengaged employees are

dangerous individuals who not only do not perform well but also demotivate the

performer in the organization

The newly developed ISA Engagement Scale (Soane et al., 2012) based on the

conceptualization Kahn put forward in his 1990 seminal article on personal engagement

at work measures three different aspects of work engagement: intellectual engagement,

affective engagement, and social engagement with 9-item indexes Intellectual

engagement captures the degree to which employees are cognitively absorbed in their work and think about ways to improve work, affective engagement captures the degree to which employees experience positive affect through their work, and social engagement captures the degree to which employees feel socially connected in their working

environment and share common values with colleagues (Soane et al., 2012).The first and the third items of engagement are similar to absorption and vigor, respectively whereas the second one had not been considered before

Secondly, connected with these theories, we designed the questionnaires including the scales items of “vigor/ affective engagement”, “dedication”, “absorption/ intellectual engagement”; “social engagement”; “involvement”, “satisfaction”, “enthusiasm” and via the Utrecht Work Engagement Scale-9 item indexes, ISA Engagement Scale-9 item indexes and 12 Gallup Questions

Please see the list of detailed scale items at Point 5.2, Chapter 5 page 57

Regarding this predicted problem, the indepth interviews were made separately one to examine the existence of employee engagement All discussed information was undertaken to be secure Although ten (10) interviewees were invited to join the

one-bye-conversation, finally there was eight (08) persons willing to answer the questions

including one partner, one manager and six staff from three to six-year working

experiences

In relation to the conversation with Ms Truc Phuong, the manager of group Six

including eight people, she underlined that “Although I am the leader of my team,

meaning that I am the a source of inspiration for my team member and I need to arouse the passion for work in my team as well as to encourage and motivate employees

Nevertheless, I feel just a little bit of enthusiasm Actually, I cannot find the interest/ excitement together with the creativity in work now For that reason, I could not inspire

my staff sufficiently and effectively.” Additionally, she is at manager position with ten years of experiences but she still need the evaluation of higher level such as Tax Partner, Managing partner, etc for her performance along with her progress Nonetheless, she has not received any opinion related to it

Per the result from the interview with my colleagues, Ms Thuy Ly – the consultant with more than five-year working experience emphasized that she often felt unhappy with the current job There were some reasons leading to this issue A high workload to be

handled thus; she had to come home so late roughly eight to nine pm It means that she spent approximately twelve hours per day for work and she complained, “I do not have time for myself to enjoy with my family I often feel so tired after a long working day and do not want to go to company every morning” Additionally, she said, “Please see

my laptop, it had to be covered with a lot of plaster at the corners Moreover, it is running

so low for processing data Although I noticed this situation to the leader and the IT department, no change has done until now

Three of six colleagues found that their work enthusiasm and satisfaction decreased considerably Sometimes they felt bored with the current job Ms Kieu Duong – senior staff with three-year experience said, “I feel so tired and really I do not want to go to work I just want to quit job now” Three members realized that they could not find the

enthusiasm for work and had thought of finding a new job Furthermore, they just wanted

to finish the tasks sooner due to their responsibility instead of the passion in working One staff submitted the resume on the recruitment websites to find new opportunities Per the view of Ms Giang Huong, nearly three years working at RSM, she shared that

“In my group, we rarely received the encouragement from the leader Although there are many tasks assigned to me, my leader just gives me a little bit support Nevertheless, my opinion seems to be unappreciated highly Can you believe that in the last six months, I did not receive any recognition from my direct manager when I tried my best to finish all jobs with the good results I often go home latest in my group and I feel that the

workload is divided unequally in my group.” In short, these signs proved/shown that their engagement was on down trend

Please see the interview questions and interview transcript for this part at Point 5.3 and 5.4 Chapter 5 Page 59, 60

In addition, the questionnaire including twenty (20) questions was designed and sent to thirty-three (43) employee s at Tax Department of RSM DTL Company to check the existence of low employee engagement There were thirty-eight (37) surveys were

returned with answers It meant that the response rate accounted for roughly 86% of total surveys The respondents were asked to indicate their degree of agreement or

disagreement for each item in this section A five point scale will be used with 1 =

"strongly disagree" to 5 = "strongly agree" to measure the for each question In short, the mean rate was approximately 2.3 and it demonstrated that the level of employee

engagement at RSM DTL is lower than the average rate (2.5)

In addition, the above questionnaire was also sent to the Tax Department ofGrant

Thornton (Vietnam) and BOD Vietnam – two Companies in auditing industry that have the same customer segment with RSM DTL The questionnaire was printed out and sent directly to the employees of these companies

Please see the survey questionnaire at Point 5.5 Chapter 5 Page 63

The researcher promises not to share the individual‟s information with anyone other than those in which the subject has agreed to have their information shared The survey just asked the person filling out for their gender, age and position; the name or any other information was not required to increase the objective and accuracy for provided

information This way can lead to higher response rates because the respondent knows his/her identifying information can be kept confidential The investigator can to ensure that the confidentiality of personal information as well as the answers is protected and just used for research purposes only

There were 52 surveys sending to Grant Thornton and 30 of them had the answers For BOD Vietnam, there were 29 responds from 47 surveys sent to the employees of Tax department The number of responses for each case was approximately 58%; 61% and the number of non-responses were about 42%; 39% respectively According to the

statistic data form the survey, it was indifferent between the response group and response group in terms of demographics characteristic (i.e position, gender and age) It meant that the random sample could be presented for the popular and the confidence level is higher

non-Data will be available upon request

The mean rate was calculated roughly 2.9 and 3.4 for Grant Thornton and BOD

respectively In comparison with the index of Grant Thornton and BOD, the level of employee engagement at RSM DTL (i.e 2.3) was lower that those Therefore, it was found that the low employee engagement was a real issue at RSM DTL and needs to be analyzed

1.3 Justify the importance of the problem

High turnover rate

As noted by Schaufeli and Bakker (2004), engaged employees likely have a greater attachment to their organization and a lower tendency to leave their Turnover intention refers to an individual‟s subjective consideration of the probability that they will quit

their organization in the near future (Carmeli, 2006)

An employee‟s turnover intention can be a powerful predictor of their future behavior (Carmeli, 2006) It is found that engagement is significantly related to a number of

consequences including commitment, health, turnover intentions, and performance

(Halbesleben, 2010)

Based on the statistic figures of number of employees working at the RSM DTL for each three to five months, the turnover rate was calculated annually In fact, the staff turnover rate of the Company has been on uptrend from 2013 until now This rate in 2013 was 14.8%, 2014 was 16% and increased to 19% in 2015 The members who left job have from three to eight-year working experience From the short interview with two members who resigned recently, there were some reasons leading to their decision of leaving and one of the main causes was the lack of engagement in work

Low performance

According to Maslach, low employee engagement could lead to the low performance (Maslach, 2001) Based on another research from Anitha (2014), it shows that ensuring engagement of employees is important and has a positive impact on their performance and vice versa Mone and London (2010) suggest that upon improving performance management, organizations can create and sustain high levels of employee engagement, and thereby higher levels of performance (Mone, 2010)

“It is often recognized that engagement is predictive of employee outcomes, success, and financial performance of organizations” (Macey, 2009; Saks, 2006)

Due to decline of engagement, the output productions of assistants or seniors are often under expectation of the leaders with most of the groups Per the sharing information from the Manager of Group Six, she emphasized that recently, the quality of work has been reduced steadily Her staff often submitted the results under her requirements and she had to spend more time on reviewing/ finishing the job before delivering to clients Moreover, the staff often respond to work requests slowly and completed assignments untimely It led to the lower productivity Furthermore, when receiving additional

customers using one-off services such as checking the accounting policies, tax

compliances or writing an official letter to get the specific guidance from local Tax Authority, etc or dealing with complex issues/situations/ unexpected occurrences, the staff had the sign of unhappiness and unwillingness to accept new tasks as well as

lacking of flexibility in response to problems

Mr Le Khanh Lam – the Managing Partner of Tax Department said, “Recently, I found that the quality of work seemed to be decreased when I check the final products The outcomes/effectiveness in work between eight groups was not equivalent The number of final products missing the quality standards and over the deadline is moving up Our Company rarely receive complains from clients However, currently there are some feedbacks from customers due to the missing deadline of reports as well as inaccuracies

in computation

Organization commitment

There is an affirmative relationship between employee engagement and affective

emotional (Richardsen, 2006; Hakanen, 2006; Saks, 2006; Demerouti, 2001; Maslach, 2001; & Brown, 1996)

Schaufeli (2007) studied work engagement and found that when engagement level

increases the level of organizational commitment increases Organizational commitment also differs from engagement in that it refers to a person‟s attitude and attachment

towards their organization (Saks, 2006) According to Schaufeli and Bakker (2004), engaged employees have a greater attachment to their organization

As discussed with Ms Hoa – tax-consulting senior with more than three years of

experience, she mentioned that she felt unhappy and she had never thought that she would continue working there for long time in future In fact, she could not received kindly support form the direct manager as well as other member in her team Therefore, she was always in being seperated emotion and could not be attached to the enperprise

Absenteeism

The noticeable early warning signs of employee disengagement are absenteeism,

tardiness, or behavior that shows withdrawal or increased negativity (Branham, 2005) According to Hoxsey (2010), there is an inverse negative relationship between the level

of employee engagement and absenteeism: as engagement decreases, absenteeism

increases

In addition, based on the data from HR Department, the number of employees who come

to work late more than five times per month is growing significantly Within three

months of April, May and June 2015, the figures are about 50%; 60% and 76%

respectively Although the HR Officer often remind the punctuality weekly via email sent to all of employees, the rate of late time still also increases remarkably

Please see the detailed scale items and the interview transcript of this part at Point 5.7 and 5.8 Chapter 5 Page 65, 67

CHAPTER 2 CAUSE VALIDATION 2.1 Potential causes of the problem

2.1.1 Work environment

Studies by Miles (2001); Harter (2002); Holbeche (2003); May (2004) and Rich (2010) show that employee engagement is the result of various aspects of the workplace Deci (1987) stipulated that management which fosters a supportive working environment typically displays concern for employees‟ needs and feelings, provides positive feedback and encourages them to voice their concerns, to develop new skills and to solve work-related problems Therefore, a meaningful workplace environment that aids employees for focused work and interpersonal harmony is considered as a key determinant of

A job aid is being used by the employees as to support them in term of giving direction

or procedure A procedure is a sequence of action that shows the steps of a certain job A job aid that determine the procedure will include the action, order and results (Pipe, 1986)

b) Supervisor supports

A supervisor is also known as a person with an experience leader, a person who can solve problem and also the role model at the first level of organizational management (Adair, 1988; Nijman, 2004) Supervisors have the responsibilities of leading the

subordinates in their group task and the groups in the organizations

c) Physical work environment

A physical work environment can result a person to fit or misfit to the environment of the workplace According to (Amir, 2010), there are elements that related to the physical environment There are two main elements, which are the office layout plan and the office comfort Amir (2010) also stated that a physical workplace is an area in an

organization that is being arranged so that the goal of the company could be achieved

2.1.2 Leadership

Effective leadership is a higher-order, multi-dimensional construct comprising

self-awareness, balanced processing of information, relational transparency, and internalized moral standards (Walumbwa et al., 2008) Research studies (e.g.Wallace (2009)) show that engagement occurs naturally when leaders are inspiring Leaders are responsible for communicating that the employees‟ efforts play a major role in overall business success When employees work is considered important and meaningful, it leads obviously to their interest and engagement Authentic and supportive leadership is theorized to impact employee engagement of followers in the sense of increasing their involvement,

satisfaction and enthusiasm for work (Schneider, 2009)

2.1.3 Team and co-worker relationship

Kahn (1990) found that supportive and trusting interpersonal relationships, as well as a supportive team, promote employee engagement An open and supportive environment is essential for employees to feel safe in the workplace and engage totally with their

responsibility

Taylor (1990) focused on the relatedness needs that individuals possess, and argued that individuals who have positive interpersonal interactions with their co-workers also

should experience greater meaning in their work Thus if the employee has good

relationships with his co-workers, his work engagement is expected to be high

To measure the level of co-worker relationship, Sias (2008) used the scale items

including trust, intimacy, emotional support, and self-disclosure

2.1.4 Training and career development

When the employee undergoes training and learning development programmes, his/her confidence builds up in the area of training that motivates them to be more engaged in their job Training improves service accuracy and thereby impacts service performance and employee engagement (Paradise, 2008)

Alderfer (1972) even suggested that when an organization offers employees a chance to grow, it is equivalent to rewarding people He emphasized that “satisfaction of growth needs depend on a person finding the opportunity to be what he or she is most fully and become what he or she can” The career path ladder through training and development needs to be given importance by management which will lead to timely opportunities for growth and development This improves automatically the level of engagement

The training program that is being conducted are such as establishing the objectives, selecting the trainer, developing a lesson plans, selecting the program method and

techniques that is being used, preparing the materials, scheduling the program and also conduct a training needs analysis (Adair, 1988; Elangovan, 1999)

Based on King (2005), organizational career development is defined as the opportunities provided by the organization to advance an individual‟s career prospects, such as

challenging assignments, career counseling and being kept informed Assisting

individuals in their career development is valuable because it encourages staff with high potential to stay The literature reveals a variety of activities provided by organizations to assist career development, including challenging work assignments, new learning

opportunities (Kinnie N, 2005), career counseling (Leung, 2002), and access to

information about the organization (Gubbins, 2005) and the industry (Gubbins, 2005)

2.1.5 Rewards

Attractive compensation comprises a combination of pay, bonuses, other financial

rewards as well as non-financial rewards like extra holiday and voucher schemes

A study by (Saks, 2006) revealed that rewards are significant antecedents of employee engagement They noticed that when employees receive rewards from their organization, they would feel obliged to respond with higher levels of engagement

Kahn (1990) observed that employee‟s level of engagement is a function of their

perceptions of the benefits they receive Therefore irrespective of the quantity or type of reward, it is the employee‟s perception of the same that determines his/her content and thereby one‟s engagement in the job

a) Extrinsic rewards

Extrinsic rewards are the tangible rewards mostly of a financial nature such as pay raises, bonuses, and benefits, given to employees They are called ―extrinsic because they are external to the work itself and others control their size and whether or not they are granted Intrinsic rewards are psychological rewards that employees get from doing meaningful work and performing it well Extrinsic rewards though significant, play a dominant role in organizations where work is generally more routine and bureaucratic in nature

is worth your time and energy, giving you a strong sense of purpose or direction

Sense of choice

You feel free to choose how to accomplish your work-to use your best judgment to select those work activities that make the most sense to you and to perform them in ways that seem appropriate You feel ownership of your work, believe in the approach you are taking, and feel responsible for making it work

Sense of competence

You feel that you are handling your work activities well-that your performance of these activities meets or exceeds your personal standards, and that you are doing good, high-quality work You feel a sense of satisfaction, pride, or even artistry in how well you

handle these activities

Sense of progress

You are encouraged that your efforts are really accomplishing something You feel that your work is on track and moving in the right direction You see convincing signs that things are working out, giving you confidence in the choices you have made and

confidence in the future

2.1.6 Organizational policies, procedures, structures and systems

Organizational policies decide the extent to which employees are engaged in an

organization Studies (e.g Schneider (2009)) show that the recruitment policy of an organization has a direct impact on future employees‟ engagement and commitment Richman et al (2008) argued that an organization‟s flexible work-life policies have a notable positive impact on employee engagement Various other studies (Rama Devi, 2009; Woodruffe, 2005) have emphasized the importance of organizational policies and procedures that best support flexible work arrangements that help in balancing employee work and home environments; organizations that have such arrangements are more likely

to have engaged employees

See the list of potential causes at Table 5.9.1 Point 5.9 Chapter 5 Page 69

Potential Cause-and-effect map

Figure 2.1: The potential cause – effect map

Anitha, J (2014)

High turnover rate

Cameli (2006) Halbesleben (2010)

Low Organizational commitment

2.2 Cause justification

The above potential causes were annalyzed and tested through the in-depth interviews with five (05) persons comprising of the Partner of Tax Department (i.e Mr Khanh Lam – Deputy General Director) , the Director (i.e Ms Kim Ngan – in charge of human

resource for Tax Depatment), one Group leader (i.e Ms Truc Phuong) and two staff as Team leader position (i.e Ms Thanh Kieu and Ms Thuy Ly) Each potential cause with definition and measurement scale items as mentioned above was introduced clearly to ensure that the participants could understand and could give the suitable answers These five (05) respondents were selected as they could give appropriate contribution to the interview thanks to their working experience, deep understanding of the Company‟s current situkation as well as the power for making management decision The

interviewees understood that all discussed information would be regarded as strictly confidential and used for this project only thus, the answers should be given objectively

All opinions were prepared in Table 5.9.2 Point 5.9 Chapter 5 Page 73, showing that the

correspondents were able to prove the link between training program, physical working environment, reward system and leadership with the level of engagement at RSM DTL Auditing From the result of interviews, it was found that the physical work environment, the leadership, the training procedure and the reward system have the strong connection with the central problem Other factors such as team and co-worker relationship, career development and company policies were not agreed totally of leading to the low level of engagement for the current situation of RSM DTL In general, maybe they can be linked

to the issue but for the case of this Company, the interviewers gave the opinion of existance of obvious relationship between them and the problem

non-2.2.1 Physical work environment

From interview result, most of participants strongly agreed that the quality of physical work environment have an impact on employee engagement Employees who are highly satisfied with the places they work are also the most highly engaged According to

(Sundstrom, 1994),most people spend fifty percent of their lives within indoor

environments, which greatly influence their mental status, actions, abilities and

performance Better outcomes and increased productivity is assumed the result of better workplace environment Better physical environment of office will boosts the employees and ultimately improve their productivity and engagement Following to (Peach, 2006), the working environment including physical working environment is perhaps a key root causing employee‟s engagement or disengagement Employees comfort on the job,

determined by workplace conditions and environment has been recognized as an

important factor for measuring their productivity Because of this reason most of the organizations have been trying to new designs and techniques to construct office

premise, which can increase productivity and attract more employees As noted by the many researchers, the physical layout of the workspace, along with efficient management processes, is playing a major role in boosting employees „productivity and improving organizational performance (Uzee, 1999; Leaman and Bordass, 1993) The similar result came out even in an independent research undertaken by ASID (1999) and pointed out that workplace design is one of the top three factors, which extensively effect

performance and productivity Ms Thuy Ly shared that “I cannot satisfy with the

physical work environment like this My laptop often has problem with operating system and the support from IT Department is so low Last month, there was an issue with the screen When turning on, although the power LED lighted up, cooling fan worked, the screen was completely black and blank without nothing appeared on the screen at all When I sent it to the IT Department, it took more than two days for repairing and I did not have another one for temporary use The work interrupted led to missing the deadline with customers In addition; the air conditioner also often does not work at all, still runs but does a poor job of cooling The hot temperature, the low level of humidity at work leads to physical discomfort and I cannot pay attention to work Keeping the temperature

at a comfortable level and providing clean and fresh air are very important and should be considered as soon as possible.”

As mentioned at Point 3.1 above, the work environment can be measured from three (03) dimensions including physical work environment, job aid and supervisor supports

However, through interview results, it was found that only the physical work

environment had the significant impact to the level of employee engagement at RSM DTL, the two remaining factor (i.e job aid and supervisor supports) did not have

important influence to level of employee engagement

2.2.2 Training

The interview found that training program is the most important cause contributing to the low level of engagement at RSM DTL Auditing Company Referring to some researches, Sajuyigbe (2012) reported that training and development have enhanced employee

engagement and Grund (2001) also agreed that training has improved employees

performance in term of increased in productivity also improvement in retention rate, and

higher levels of employee engagement

At RSM DTL, the Manager often takes interest in training to develop the skills for

employee but there are a number of issues in its procedures Firstly, the training schedule did not match to the demand and working time of employee as emphasized by Ms Thuy

Ly She often missed the training program since it was the same time with her business trip In fact, the Director chose a person to handle the training program and he was in charge of making plan and He arranged the training timeframe without checking the working schedule of staff It led to complains from employees that they could not

participate in the training program Secondly, the topic as well as the content was quite general and not suitable to the actual needs of staff As discussed with Ms Phuong, she shared that the training content focused more on the technical knowledge however; it is not deep enough to provide the understanding for solving the complex cases of

customers The training subject should be built on the actual needs of both the

Management and employees instead of perceived ones Furthermore, the materials for training is often sent to staff so late thus, they do not have enough time for reading in advance before attending the class Last but not least, besides the hard skills, the training content lacks of the topic for soft skills such as communication skills, team work skills, interpersonal relationship skills, presentation skills, etc The Company should review the training procedure and build up the professional training program in order to develop the

human resources all sided under the principle of “First who, then what” as emphasized

by Ms Kim Ngan

2.2.3 Rewards

From our discussion result, all participants agreed that the reward is also a factor leading

to the level of employee engagement Besides the characteristic of work, working

environment, career path, etc staff also care about the salary, bonus as well as reward policies Rewards comprise the overall value proposition that the employer offer to employee It is a total package including the compensation (e.g base pay, short-term incentives and long-term incentives), benefits (e.g health, retirement, work/life and other benefits) When considering a new opportunity with their current employer, employees tend to consider all rewards overtime In addition, rewards are also classified into

extrinsic and intrinsic type Extrinsic rewards are the tangible rewards mostly of a

financial nature such as pay raises, bonuses, and benefits, given to employees

For the current situation of RSM DTL, the salary and bonus are calculated based on the level of position instead of the performance Understanding clearly about that, Ms

Phuong mentioned that this method to estimate the salary and bonus for employees could lead to decrease of working motivation/incentives Employees can think that there is not difference in paying salary and bonus between the hardworking staff and the others at the same position Therefore, thinking of “doing exactly the requirement” always existents Moreover, the Management did not pay attention to build up the intrinsic rewards It is also a significant reason leading to low level of engagement When the competitor pays

higher salary, bonus as well as provides the attractive non-financial reward package, the number of employees resign/ leaving job can increase

2.2.4 Leadership

Leadership behaviors can have a profound impact on workforce productivity (associated with quality and quantity of output) and vitality (associated with cohesion, employee morale and engagement) (Kaplan & Kaiser, 2009) The interview results show that four

of five persons underlined the relationship between the leadership and employee

engagement Nevertheless, according to Mr Khanh Lam, RSM DTL should to

concentrate on improving the leadership of group leaders and team leaders At DTL Company, the group leader has the right for making final decision and also takes

responsibility The work assignment form team leader to the subordinates is authoritarian upon some principles of their point of view The subordinates only work for what team leaders say without awareness of group‟s objectives, there is no cohesion of work and performance Additionally, there are the limitation of communication between the leaders and the Subordinates due to lack of team meeting The leader is wholly responsible for making decisions Furthermore, there are some issues such as limiting the activity and spontaneity of the subordinates, creating the tendency of deserting the own responsibility

to the leaders and having the tendency of submission, closeness to the leaders or to draw their attention due to lacking almost entirely of initiative from subordinates, etc as

discussed with Mr Khanh Lam

CHAPTER 3 ALTERNATIVE ANALYSIS AND ALTERNATIVE CHOICE

Based on the cause analysis above, this research will focus on the strategies to improve the training, physical work environment, rewards and the leadership for the Tax

Department of RSM DTL Auditing Company

3.1 Training program

The first proposed strategy is to develop the training procedure - the best solution to improve employee‟s understanding and let them know how to use the specific skills (Muhammad, 2012) Training refers to an activity which deliberately attempts to improve

a person‟s skill at a task According to (Alfes, 2013), training influences the employee‟s level of engagement positively In addition, training not only enhances the performance

of the employees but also helps them to motivate and developed undergoing relationship with the organization (Muhammad, 2012)

(Bakare, 2012) described training as the systematic development of the knowledge, skills, and attitudes required by a person in order to effectively perform a given task or job He goes on to note that training is a pervasive activity in society, taking place within industry and commerce, government agencies and departments, health care

organizations, and all branches of the armed service Within every organization, training occurs at all levels of personnel, and trainees may vary in terms of age, work experience, disability, educational background, ethnic origin, and skill level

In connection with the current situation of the Company, the proposed training procedure extracted from the study of (Furjanic, 2000) includes four (04) steps assessing the need

for training, design a training program, delivering the training and evaluating the training that was done

The first stage – determine the training needs, how much and what kind – will generally

depend on the task to be performed

(Baldwin, 1994) stated that, “Analyzing training needs provides a focus and direction for the investment an organization has to make in its people.‟‟ Likewise, (Bee, 2003)

asserted that business needs should be the drivers for considering training solutions to close any performance gap

Business needs were clearly indicated by the research to be the central focus of training needs analysis with clear communication From an individual perspective, the person may wish to learn different knowledge, skills, etc than those prescribed by the

organization It may be desirable to consider both sets of needs

The second stage of training process is the training design

Training design entails creating the architecture for a training program, including

developing learning objectives and creating content areas for training Designing a

training program relies on accurate information about the job in order to identify learning objectives and to create relevant content One method for obtaining this design data is through job analysis Job analysis systematically identifies the tasks a job requires; the knowledge, skills, abilities, and other characteristics needed by job incumbents to

perform those tasks; and the context and environment in which the job is performed Analyzing jobs, especially the competencies need to perform tasks, increases an

organization‟s competitive advantage (Siddique, 2004) Unifying HR practices, such as

training, based on the competencies needed to perform the work, enhances organizational performance (Siddique, 2004).

Prepare Learning Objectives

Learning objectives may be the most critical input in designing training Objectives are tools that point to the content and procedures that will lead to successful instruction, help you manage the actual instructional process, and help you prepare methods for finding out whether the instruction succeeded The learning objectives define the topic, the

content, and, to some degree, the learning and teaching processes

IdentifyObjectives including:

Delineate what trainees are expected to know when they begin the training

Specify the nature and quantity of new information to be provided by the training

Include caveats, restrictions, and limitations related to any of the above

Write Specific Objectives

An objective written will specify that trainees will develop a skill and will require that trainees coordinate their brains with physical activity Moreover, an objective written also will state that the training is designed to enable trainees to know or understand something After the session, trainees will be able to point the something out, describe the something, recognize the something, or define the something

The third stage is training delivery

It is choosing and implementing the training program using proper methods The

methods of training vary substantially according to the circumstances of the company Training can be done either on-the-job or in a place outside the workplace On-the-job training can be effective when supervisors or trained instructors are involved in the actual work setting, while off-the-job training, including lectures, simulation and case studies, can be done without interrupting the everyday routine (Harris and West, 1993)

The last stage is traning evaluation/ feedback

Trainees

Trainees need constructive feedback on their progress and on their own performance Feedback to trainees can vary in complexity from explaining why an answer is correct or incorrect to commenting on trainees‟ performance or discussing results of a test

Regardless of the complexity of the feedback, the best feedback is the one given the earliest The more immediate the feedback, the greater its value, especially for preventing loss of self-confidence and, thus, loss of motivation

Trainers

Feedback to trainers answers the following questions:

Are trainees receiving and understanding the information?

Do trainees have doubts or questions?

Are all trainees paying attention?

Is the session boring?

Would trainees benefit by using more techniques during this session?

Two-way communication is critical to feedback‟s effectiveness

For the cases of RSM DTL, the neccessary actions should be taken for the year 2016 as follows:

Step 1: The training department should pay attention to analyze the training needs of both

employees and the managers‟ requirement by discussing with the Management (i.e The Tax Partner, Directors, Managers and the Group leaders) and collecting the information from employees through email, survey or interview After that, the data will be summarized and arranged orderly It can be take around one and a half (1.5) months

Step 2: Making the training design including defining the topic, the content, materials,

schedule It can be take another two and a half (2.5) months

Topic and content as well as schedule will be based on the training needs analysis result Understanding sufficiently the needs of both employers and employees, the training design should harmonize both of them Referring to the current situation

of Tax Department, it is found that the training program lacks of the topics

relating to improving the soft skills for staff such as effective communication skills, negotiation skills, problem solving skills, risk management skills, etc

Training program is just focus more on the technical knowledge to improve the background of tax, accounting for staff instead of concentrating on both soft skills and hard skills to develop staff wholly

Step 3: Training delivery will begin from August 2016 to December 2016 after peak

season – the specific characteristic of Audit firm with two topics per months and will be on working days

Step 4: Training evaluation/ feedback will be performed after each couse

The total budget of training program for 43 employees can be roughly VND 350 million per year

Training cost estimation for the year 2016 is as follow:

attendances

Total estimated cost (VND)

1

Investigation fee (finding the

training needs, building the

contents, preparing the

3 Tax agent certificate 6,000,000 5 30,000,000

3 Tax updates (10 courses/year) 500,000 5 25,000,000

4 Soft skills (10 courses/year) 1,000,000 5 50,000,000

Internal (tuition fee and materials) 40,000,000

1 Special knowledge (tax,

accounting, finance, etc.) 1,000,000 20-30 20,000,000

2

Soft skills (e.g communication

skills, presentation skill,

writing skills, time

The benefits of this strategy are estimated as follows:

Increasing the employees‟ knowledge as well as the qualification

Increasing efficiencies in processes, innovation in strategies and output

Increasing the contribution to the business and building the self-esteem

Increased employee motivation and reducing employee turnover

From that, it can help to increase the level of employee engagement As expected, higher level of employee engagement will lead to the reduction of the employee turnover rate from 8% to 10%, increasing the productivity by 15%, increasing the revenue by 15% in comparison with 2015 The additional revenue in VND is estimated around

2,962,080,000 (i.e 15% x VND 19,747,200,000)

3.2 Improving physical work environment

HR consulting firms and academic researchers are presenting their own interpretations of the meaning of the construct Some of the points presented by the researchers are

complementary and they agree that engagement creates the prospect for employees to attach closely with their managers, co-workers and organization in general and the

engaging environment is the environment where employees have positive attitude toward their job and are willing to do high-quality job

The researchers concluded that increasing employee engagement and building an

environment that helps to foster employee engagement, can significantly increase the companies‟ chances of success in their business (Harter, 2002).Engaged employees go beyond the job description, they dynamically change and arrange their job in a way in which it fits the changing work environment (Bakker, 2010).Furthermore, Cartwright

(2006) suggest that the changing workplace environment brings changes in the

relationship between workers and their employers and the level of employee engagement

Heat and cold

Work should be carried out in an environment where a temperature range is comfortable for employees and suits the work they carry out Air temperatures that are too high or too low can contribute to fatigue and heat or cold related illnesses Thermal comfort is

affected by many factors, including air temperature, air movement, floor temperature, humidity, clothing, the amount of physical exertion, average temperature of the

surroundings and sun penetration Optimum comfort for sedentary work is between 20 and 26 degrees Celsius, depending on the time of year and clothing worn Employees involved in physical exertion usually prefer a lower temperature range The means of maintaining a comfortable temperature will depend on the working environment and the weather, and could include any of the air-conditioning, fans, open windows, direct

sunlight control and controlling air flow

For RSM DTL, the hot enviroment often becomes the uncomfortable condition for

employee Thus, two proposed methods can be applied comprising of increasing the air movement using fans and doing mainternance the air-conditioners

The following control measures should also be considered but are least effective if used

on their own:

slow down the pace of work if possible

provide a supply of cool and high quality drinking water

provide a good area where employees can take rest breaks

maintained, kept clean and not used for the storage of materials or goods

In short, to improve the quality of physical work environment, the Compnay should focus on the work materials for staff (i.e perform themaintenance for laptop, buying new ones to replace the old ones), drinking water (i.e finding the higher quality

dringking water for employee) and the air-conditioner system (i.e providing

maintenance, buying new ones to ensure the comfortable temperature to work)

Furthermore, within next year, RSM DTL should invest to open a lunchroom with

necessary facilities such as microwave oven, coffee makers, refrigerator, etc This