The impact of human resources management to employees job satisfaction within interior design and construction industry in vietnam

Based on the model study of Petrescu & Simmons 2008 regarding the impact of human resources management to the job satisfaction of employees, the aim of this research is to explore the pr

UNIVERSITY OF ECONOMICS HOCHIMINH CITY

MASTER OF BUSINESS ADMINISTRATION THESIS

Major: Business Administration

Major Code: 60.34.05

Supervisor: DR TRAN HA MINH QUAN

Ho Chi Minh City – 2012

My name is Hoang Tu Ngoc, author of this MBA thesis I would guarantee that this is my own research and has not been published in any previous studies

I am fully responsible for above commitment

Student

Hoang Tu Ngoc

Major: Business Administration

Major Code: 60.34.05

supervisor, Dr Tran Ha Minh Quan for his intensive support, valuable suggestions, guidance, and encouragement during the course of my study

I would like to thank many of my colleagues at TTT and friends from other companies in interior design and construction area who helped me during the data collection stage

I would like to express my sincere gratitude to all of my tutors at Faculty of Business Administration and Postgraduate Faculty, University of Economics Ho Chi Minh City for their teaching and guidance during my MBA course

I would like to specially express my thanks to all of my classmates, my friends from for their support and encouragement

Hoang Tu Ngoc

Ho Chi Minh City, May 2012

In development of business, human resources management is understood as employees who are working in company and they play an important part of organization It is safe

to say that the impact of human resource management is a crucial influence on the job satisfaction of employees and thus affects their performance during working period The research on these effects is essential for every business

Based on the model study of Petrescu & Simmons (2008) regarding the impact of human resources management to the job satisfaction of employees, the aim of this research is to explore the practical impact of human resource management to the job satisfaction of employees in interior designer and construction industry in Vietnam Following the result of this research, companies in industry are able to improve the effectiveness of the human resources management

Keywords: human resource management, employee’s job satisfaction, teamwork,

supervision, recruitment and selection, training and learning, employee involvement, payment.

1.1 Reason for choosing the research 1

1.2 Interior design and construction industry in Vietnam within the research topic 2

1.2.1 General information 2

1.2.2 Selection of featured companies to study 3

1.2.3 Organizational chart in interior design and construction company 4

1.2.4 The work of human resources management 6

1.2.5 The particularities of the interior design and construction industry and its influence on Human resources management 6

1.3 Research purposes 7

1.4 The scope and subject of study 8

1.4.1 Scope of study 8

1.4.2 Subjects of study 8

1.5 The significance of research 8

1.6 Research Methods 9

1.7 Research structure 9

2 CHAPTER 2 | LITERATURE REVIEW 10

2.1 The theory of human resources 10

2.2 The theory of human resource management 10

2.2.1 Definition 10

2.2.2 The difference between Personnel management and Human resource management 11

2.2.3 Characteristic of human resource management 13

2.2.4 The model of human resource management 13

2.3 Analysis on employee’s job satisfaction 19

2.4 Research model 20

2.5 Summary of Chapter 2 22

3 CHAPTER 3 | METHODOLOGY 23

3.1 Research Methods 23

3.1.1 Preliminary study 23

3.1.2 Formal research 23

3.2 Method of data processing 24

3.2.1 Inspection by the scale factor Croncbach Alpha 24

3.2.2 Exploratory factor analysis EFA 24

3.2.3 Regression analysis and ANOVA analysis 24

3.3 Methodology 25

3.3.1 Surveyor 25

3.3.2 Method of surveying 25

3.3.3 Size and method of sample choosing 25

3.4 Scale adjustment 26

3.4.1 Process of scale adjustment 26

3.4.2 Qualitative research 26

3.4.3 Quantitative research 26

3.4.4 Scale of human resource management in interior design and construction industry 27

3.4.5 Scale for job satisfaction of employees 30

3.5 Summary of Chapter 3 30

4 CHAPTER 4 | RESULT OF RESEARCH 31

4.1 Sample description: 31

4.2 Preliminary evaluation scale with Cronbach Alpha 32

4.2.1 Testing the reliability of the independent variable 32

4.2.2 Testing the reliability of the dependent variable 36

4.3 Scale testing by using Exploratory Factor Analysis (EFA) 37

4.3.1 Factor analysis for Independent variable 37

4.3.2 Factor analysis Dependent variable 40

4.4 Regression Analysis 41

4.5 The results of comparison of human resources management based on characteristics of study components 46

4.5.1 By Gender 46

4.5.2 By Age 48

4.5.3 By Years of experience 49

4.5.4 By Education level 50

4.6 Results 51

4.7 Summary of chapter 4 53

5 CHAPTER 5 | CONCLUSION AND SUGGESTION 55

5.1 Introduction 55

5.2 The significance of the study 56

5.3 Proposal for solution of human resource management practices 56

5.3.1 Solution for Payment 56

5.3.2 Solution for Training 56

5.3.3 Solution for Supervision 57

5.4 Limitations and Recommendation for further research 57

5.4.1 Limitations 57

5.4.2 Recommendation for further research 57

6 REFERENCES 58

6.1 Vietnamese sources 58

6.2 English sources 58

7 APPENDIX 1 | CONTENT OF GROUP DISCUSSION 62

8 APPENDIX 2 | QUESTIONARES 65

9 APPENDIX 3 | VARIABLES AND SYMBOLS 68

10 APPENDIX 4 | CRONBACH ALPHA ANALYSIS 70

11 APPENDIX 5 | EXPLORATORY FACTOR ANALYSIS (EFA) 77

12 APPENDIX 6 | LINEAR REGRESSION ANALYSIS 84

13 APPENDIX 7 | ABBREVIATION, TERMINOLOGY AND LIST OF COMPANIES 86

1 CHAPTER 1 | INTRODUCTION

1.1 Reason for choosing the research

Human resources management has always been considered as one of the most important department amongst resources of a company The quality of human resources plays a key role to the success or failure of a business, particularly in the context of the open economy in Vietnam and global competition nowadays

During last consecutive years, Vietnam’s economy has been growing with a rapid pace and sustainable development In the late 1980s, when the renovation policies were adopted, Vietnam market became attractive for foreign trade and investment, and private economic activity were legal (Glewwe, 2002) Due to establishment of new companies in Vietnam, demand for office space develops increasingly significant in Ho Chi Minh – the biggest city Following this growth, interior design (1) and construction companies were born to provide the high quality services in fit-out works (2) Working in human resource management of this industry for years, I would apply my experience into a formal research in order to prepare depth knowledge for further development

Interior design and construction is a narrow specialization of construction area Scope of services includes the final stage to complete the construction tasks inside a building There are two type of company which provides this service (a) One is specialized in designing only (b) Another one provides fully stages from interior architectural design to build and complete fit-out works This research will study on type (b) – a larger organization – which provides and focuses on high value contracts such as high class office, hotel or resorts from 4 stars standard

In order to work in this industry, employees are required to have high level of skills in both aesthetic and technical However, it can be seen the lacking of high education of interior design and construction field in Vietnam, therefore employees need to explore their experience through practical working In many cases, when company, or human resources management, can provide employees chances to enhance their experiences and

performances in job, this matter has positive impact on employee’s job satisfaction It can

be seen that human resources management is considered as a connection between employees and company and in charge of employee’s job satisfaction

Without a well-organized system, most of interior design and construction companies are only running to meet the immediate needs of market, instead of working with a stable development In fact, the practices of human resources management focus on solving those daily tasks rather than planning for a long-term strategy That leads to the need of preparing a specific research on human resource management, which based on an appropriate methodology

Starting with the research question “The impact of human resource management to the employee’s job satisfaction within interior design and construction industry in Vietnam”, this study attempts to inform and clarify on what and how factors could create satisfaction

in current job for employers through the tool of human resource management

1.2 Interior design and construction industry in Vietnam within the research topic

1.2.1 General information

As discussed above, this research focuses on interior design and construction industry in Vietnam within large project group only such as high-class office (3) and hotel, resort, which are invested by large companies and organizations This group has the highest fund

in the market segment nowadays and is known as a potential market for interior design and construction companies The scope of services provides: architecture interior design, mechanical and electrical (M&E) engineering building services, supply and installation of furniture, Fit-out works

It can be said this is a difficult area for companies that want to provide these services because it requires a huge investments, especially furniture manufacturing Also next struggle is to have the high quality of human resources in design works, project management, and construction management and so on This research will select, introduce, and analyze a group of leading companies that represent for Vietnam

1.2.2 Selection of featured companies to study

Based on Vietnam market research of CBRE (2012) (6) in construction and real estate area, the research figures out a list of biggest companies in size and years of establishment within interior design and construction industry in Vietnam, collects data and studies organization of these selected companies They are:

1.2.2.1 AA Corporation (4)

Founded in 1990, AA Corporation has 22 years of development AA focuses on design and build for high class projects, especially hotel and resort They also exports furniture to foreign countries with large sales through the bidding process With about 600 staff and 1,400 workers, AA Corporation is known as a biggest company in the market

1.2.2.2 TTT Corporation (5)

Founded in 1992, TTT Corporation has 20 years of development They focus on office design and build which is the biggest strengths that no company can gain significant market share as of TTT Recently in 2005, TTT Corporation also extends to hotel and resort projects In the judgment of market research company, TTT occupies nearly 50% market of Class A and B office design and build in Ho Chi Minh City The total staff of TTT is now around 290 people and 700 workers

1.2.2.3 Some of other companies

Besides TTT Corporation and AA Corporation, a variety of companies in the interior design and construction industry in the market These companies have historically formed and developed over 10 years, many of them are formed from staff who had worked for TTT Corporation and AA Corporation They established a new business after leaving, such as companies named Happy Land (7)

, Saigon Xanh (8), AAH (9), and others

1.2.3 Organizational chart in interior design and construction company

When a new company established, the critical and basis departments will include human resources management, administrative, accounting, marketing, and information technology (IT) However in the field of interior design and construction, some unique departments are formed with their own characteristics

to be able to meet the specialized needs of business For example, the departments of project management, estimation, design, and construction management Discovering a schematic diagram of the complex organization such

as TTT Corporation, this has outstanding properties through a matrix operation (Figure 1):

Figure 1: The matrix Diagram of the organizational structure of TTT Corporation

Functional groups along the project tasks:

- Sales department: dealing and signing contracts with clients Statistics and reports on business, market share, and competitors Contact with clients and implement strategies to expand the market

- Design department: design as customer’s requirements, and timely adjustments

if construction drawing is difference

- Estimating department: research and provide cost estimates of works, propose price for construction works to customers

- Purchasing Department: material supply, is responsible for purchasing materials and equipment for production and business activities of companies; market research materials, and imported materials, price calculation, control quality of purchasing materials, ensuring the quality of production’s requirements

- Production department: to produce and supply of furniture as required by interior works

- Construction department: construction done by an interior that the customer has selected To organize the supervision of construction process, to ensure quality and progress of customer requests from initiation to delivery of the project

- After Sales Service (ASS) department: is responsible for warranty, maintenance

of the interior works,

- Project management department: throughout the process of managing customer projects after the contract was signed Responsible for monitoring throughout the project schedule, construction quality, work directly with customers, solve any questions, complaints, or customer requirements Final settlement amount with the customer and complete the payment process

1.2.4 The work of human resources management

Historical development of companies in the industry is always associated with the development of human resources management to follow in both quantity and quality requirements During their operation, the companies have always focused on human resources management which has a crucial role to the success or failure of the business, especially in a very specific market such as interior design and construction With that reason, the company should focus more on human resource management so that long-term effectiveness and planning must take into account human resource development to meet the need

of companies in the future Overall, the current leading company in interior design and construction has formed and has a human resources management system relative to its own basic daily operation System personnel policy has been established, recruitment process and candidate selection has been established, and the system capacity assessment and paid workers also built based on specific characteristics of each company and depends on the changes

in the external labor market

However, in the management of human resources of companies also exist some shortcomings have not been solved:

- Human resources practices are for daily operations rather than long-term system and sustainable development

- The human resource planning has not been doing well Education and training staff has not been focused and invested into long-term strategy

1.2.5 The particularities of the interior design and construction industry and

its influence on Human resources management

Interior design and construction operation in Vietnam is growingfast from the last 10 years Demand for human resources with high quality, including design andconstruction is always concerned forthecompany But to meetthe needsof

human resources with high quality, the system of education Colleges andUniversities in Vietnam is not enough to meet the needs of the market All schools are now virtually no intensive training in these areas and is onlystopped atthe level of generaltraining Currently the schoolhas trained many

of interior designers but still far distance compared to professional level need

for work There are no educations of project managementfor interior projects that

forcing thecompany has to recruit engineers who just havea basic knowledgeofcivil construction and then are trained for project management professional

Group of companies leading the market in this area such as AA Corporation and TTT Corporation and others would necessarily be greatly influenced by these issues The quality inputs of human resources for these companies are usually lower than expectations and required the company must have additional training for staff After the training process, the competitive company easily hunts the employees of the company Human resources management and other policies of the companies are required to always extremely focused and sustained in order to retain talented staff

The assessment of job satisfaction is very important because it not only affects the quality of work that also affects the maintenance of a human long-term stability for companies The work of human resource management has a direct impact to all activities of the employee and thus should have content and methods of implementation of human resource management as appropriate for everyone

- Consider the difference (if any) by gender, age, years of experience and education level of employee job satisfaction

To achieve above objectives, the study will answer the following questions:

- How do employees assess on the work of human resource management?

- How do employees assess their job satisfaction?

- How the impact of human resources management to the job satisfaction of employees?

1.4 The scope and subject of study

1.4.1 Scope of study

The study is made in Ho Chi Minh, Binh Duong and Long An, where office location and factories of the largest companies in interior design and construction industry are locating We conduct the research in two biggest companies that are TTT Corporation and AA Corporation as case studies, along with some other smaller size companies

1.4.2 Subjects of study

The assessment of practical human resource management and job satisfaction is done through the whole team of staff who are working for the company, as determined from manager level to employees; excluding directors and workers

1.5 The significance of research

The results of the research will have practical implications for the management of human resources in interior design and construction industry, especially with the typical companies in the industry were sampled for study represented as AA Corporation, TTT Corporation and some other companies The information mined from the effects of the elements in the human resources management to the job satisfaction of staff is the basis methodology for implementing practical measures to

improve effects of human resource management and job satisfaction of employees in the company

1.6 Research Methods

The research used qualitative research methods and quantitative research Qualitative research is used in the preliminary study stage with a group discussion method Quantitative research phase used in formal research techniques to collect information

in the form of direct interviews The data parameters are examined, analyzed, measured using SPSS software (10)

1.7 Research structure

• Chapter 1: Introduction

• Chapter 2: Literature review

• Chapter 3: Methodology

• Chapter 4: Result of research

• Chapter 5: Conclusion and Suggestion

• References

• Appendix

2 CHAPTER 2 | LITERATURE REVIEW

2.1 The theory of human resources

There are many theories of human resources management in existing studies In this part, the research points out some selected definitions

"Human resources are the overall potential labor of a country or a province is willing

to join a task" (Pham Minh Hac, 2001)

"Human resources of an organization, the enterprise is formed on the basis of individuals with different roles and are linked together according to certain goals"

(Tran Kim Dung, 2006)

"Human resources is the whole of human potential (the first and the most basic is the potential of labor force), including physical, intellectual and personality of workers to meet the requirements of an organization, an economic or social structure"(Vo Xuan

Tien, 2010)

Regarding the human resources, it is necessary to discuss about the level of structure, the response to the requirements of the labor market Quality human resources reflect

in the level of knowledge, skills, and attitudes of employees

2.2 The theory of human resource management

2.2.1 Definition

There are many different definitions of human resource management, for instance,

“Human Resource Management aims to recruit talented workers, agility, and dedication in their work, job management, and performance appraisal as well as developing their capacity" (AJ Price, Human Resource Management in a Business Context, International Thomson Business Press, 2nd edition 2004) Another definition:

"Human resource management is to design and implement policies for the areas of activities to make people contribute the most effective value for the organization, including human resource planning, analysis and job design, recruiting and selection,

performance appraisal, training and learning, remuneration, health and safety personnel, and labor relations" The activities of human resources management

depends on how the size and needs of the organization

In summary, human resources management is the art of using human resources effectively to achieve business objectives of the company and ensure the individual needs of each staff member is satisfied, through a system of policies and practices in human resources management This is extremely important activity of any business and it plays a crucial part the long-term success of organization

2.2.2 The difference between Personnel management and Human resource

management

Objective Personnel management Human resource management General view Labor is the input income Is the properties that need to be

developed Training Objectives Help employees adapt

their position

Investment in human resources development

The prospect Short and medium term Long term

Advantage of competitive Market and technology The quality of human resources Basis of productivity and

Objective Personnel Management Human Resource Management

Role Problem solving by using Labor

regulation and related tasks

Responsible for managing workforce, which is foundation to create the success of the organization

Is wider meaning

Is combined task of administration to create and develop the team work for profit organizations; helps employees

to be effective in their work

Function Is an independent function of

organizations, including the specific task of separate HR departments in the organization

Towards a general function of the organization In some aspects, all the departments will work together to solve the tasks of human resources

Performance Response, resolution,

providing feedback on the requirements, or if the incident occurred

Provide strategic management and workforce development for

organizations To develop policies and functions of the organization through the improvement of human resources Attitude Motivating employees with

compensation, bonuses, awards,

or simplification of work tasks

Viewpoint: The satisfaction of employees to bring improve achievement motivation work

Teamwork, effective strategies, challenges, creativity at work is the fundamental motivation

Viewpoint: achievement in creating incentives for employees

Figure 3: One other point of comparison between Personnel Management and Human

Resource Management

2.2.3 Characteristic of human resource management

Human resource management is gradually replacing personnel management with the leading point, that people is no longer merely an element of the business process which is a precious source of property in organizations and enterprises

Companies moved from a state of "reduce labor cost in order to reduce expenses" into

"investment in human resources to have a higher competitive advantage, higher profits, and greater efficiency."

From this perspective, human resource management is developed based on the following main principles:

- Employees need to be adequate investments to develop their own capacity to meet the individual needs, meanwhile creating labor productivity, highest working efficiency and the best contribution to the organization

- Policies, programs, and management practices should be established and implemented in order to satisfy the material needs and employee morale

- The working environment should be established so that employees can stimulate the development and maximum use of their skills

- The issue of personnel functions should be carried out in collaboration and an important part of business strategy of company

- Duties of administration people are all in administration, not merely of the HR

2.2.4 The model of human resource management

There are many models of human resources management in existing studies In this part, the research points out some selected definitions

- Model studies of Singh (2004), practical human resource management consists

of seven components: Training, Performance appraisal; Employee involvement; Job assignment ; Payment; Recruitment

- Model studies of Cynthia D Fisher, Lyle F Schenfeldt, Houghton Mifflin Company (1999), human resource management consists of the human resource planning, analysis and job assignment, recruitment and selection, Performance appraisal, training and learning, payment, health and safety

- Human resources management in the UK construction industry: There is an established dichotomy in the human resources management literature between the 'hard' model, reflecting utilitarian instrumentalism, and the 'soft' model reflecting developmental humanism The hard model of human resources management sees humans as a resource to be 'provided and deployed' as necessary to achieve organizational objectives In contrast, the soft model of human resources management treats human resources as valued assets who offer

a source of competitive advantage In simple terms, the former comprises 'command and control' and the latter 'empowerment and commitment' This dichotomy is undoubtedly an over-simplification of a complex field where rhetoric and reality are difficult to separate (Legge, 1995) Many organizations undoubtedly apply elements of both Companies are also often fond of dressing

up hard human resources management in a soft rhetoric (Truss et al, 1997) The

key distinction lies in whether the emphasis is placed on the human, or the resource (Guest, 1987; Storey, 1992) The dichotomy between hard and soft human resources management is a direct descendant of McGregor's (1960) Theory X and Theory Y

- Model studies of Petrescu & Simmons (2008) for human resource management and job satisfaction of employees has 06 components: work organization; employee involvement, recruitment and selection, training and learning, and payment

To study the practices of human resources management affect employee’s job satisfaction in interior design and construction industry, this research selects the model study by Petrescu & Simmons (2008) There are six components in human resources management that impact to employee’s job satisfaction: work organization; supervision; employee involvement, recruitment and selection, training and learning,

payment In research of Petrescu & Simmons (2008), teamwork is a specific component of the work organization Based on research of Petrescu & Simmons

(2008), this research includes six components: Teamwork; Supervision; Employee involvement, Recruitment and Selection, Training and Learning, and Payment

The detailed content of each component as follows:

2.2.4.1 Teamwork

There are many different definitions of teamwork, such as: Teamwork is defined in Webster's New World Dictionary (2003) as "a joint action by a group of people, in which each person subordinates his or her individual interests and opinions to the unity and efficiency of the group." This does not mean that the individual is no longer important; however, it does mean that effective and efficient teamwork goes beyond individual accomplishments The most effective teamwork is produced when all the individuals involved harmonize their contributions and work towards

a common goal

For heterogeneous agents working together to achieve complex goals, teamwork (Jennings, 1995; Yen, Yin, Ioerger, Miller, Xu, & Volz, 2001; Tambe, 1997a) has emerged as the dominant coordination paradigm

Building on the well developed theory of joint intentions (Cohen & Levesque, 1991) and shared plans (Grosz & Kraus, 1996), the teamwork model (Tambe, 1997a) was operationalised as a set of domain independent rules that describe how teams should work together This domain independent teamwork model has been successfully applied to a variety of domains

In summary, teamwork is often a crucial part of a business, as it is often necessary for colleagues to work well together, trying their best in any circumstance Teamwork means that people will try to cooperate, using their individual skills and providing constructive feedback, despite any personal conflict between individuals (Business dictionary, 2012) Teamwork typically involves group of interdependent employee who work cooperatively to achieve group outcomes (Parker and Wall, 1998) Effective team implementation can enhance the motivational properties of work and increase job satisfaction

Working in a team empowers people and helps them develop autonomy, which is a source of profound job satisfaction and reduces stress’ (Hayes, 2005) In view of this theory, the following hypothesis may be made: “Working in a team contributes to job satisfaction”

In the field of interior design and construction, every job he is catering to a certain project Almost all projects have to undergo multiple parts at the same time, requiring cooperation to work closely together for a project to be implemented effectively For that reason, teamwork is very important properties in the execution

of work and affects all employees in the work process The job satisfaction of employees is so closely associated with the teamwork nature of the work they are doing

This research proposes the hypothesis about teamwork is:

H1 Teamwork has positive impact on employee’s job satisfaction

2.2.4.2 Supervision

Supervision is formally defined as a relationship between senior and junior member(s) of a profession that is evaluative, extends over time, serves to enhance the skills of the junior person, and monitors the quality of the services offered by the junior person, and acts as gate keeping to the profession (Bernard & Goodyear,

1992, 2004)

In the study by Petrescu & Simmons (2008), supervision is a factor that affects the job satisfaction of employees In the field of interior design and construction, the particular characteristics of specific jobs in the industry will be more correlated to supervision in the organization

This research proposes the hypothesis about supervision is:

H2 Supervision has positive impact on employee’s job satisfaction.

2.2.4.3 Employee involvement

Employee involvement, as the definition of a Human Resources expert, Ms Susan, member of the Society for Human Resource Management (SHRM) and the American Society for Training and learning (ASTD) is creating an environment in which people have an impact on decisions and actions that affect their jobs Employee involvement is not the goal nor is it a tool, as practiced in many organizations Rather, it is a management and leadership philosophy about how people are most enabled to contribute to continuous improvement and the ongoing success of their work organization Relationship of employee involvement and employee’s job satisfaction, it is discussed in a research: The leaders of U.S companies have found that a work environment that supports employee involvement, allows employee participation, and features interdependent tasks can increase productivity, worker flexibility, and job satisfaction (e.g., Cohen, Ledford

& Spreitzer, 1996; Cordery, Mueller, & Smith, 1991; Manz & Sims, 1987; Versteeg, 1990; Harris, 1992) In Vietnam, this theory need to be further tested However this also seems like quite a lot in emerging companies in Vietnam in all areas In the field of interior design and construction, this is no exception by job demands require the active participation of staff in general activity, particularly the operation of the implementing of project In that process, the employee may work more actively and inevitably affect satisfaction in their work

This research proposes the hypothesis about employee’s involvement is:

H3 Employee involvement has positive impact on employee’s job satisfaction.

2.2.4.4 Recruitment and Selection

Recruitment and selection is the process of finding and selecting the candidates (inside and outside the company) the right people to satisfy the labor needs and complement the existing workforce The purpose of recruitment is to recruit new staff have the knowledge, skills, abilities, and motor in accordance with the demands of work and the long-term goals of the business (Pfeffer, 1998)

The labor market of this industry is not available for market segments that the company is selecting always have certain difficulties Also some of the position are very specific to the company should not be available to candidates with experience as the company needs So the recruitment process should be more detailed for the candidate closest to the needs of companies

The recruitment is accurate and the potential candidates can develop good will lead

to performance improvement better, effective for the organization and satisfaction

of employees working in the organization, including both old and new recruits This research proposes the hypothesis about recruitment and selection is:

H4 Recruitment and selection has positive impact on employee’s job satisfaction

2.2.4.5 Training and Learning

Training is the process of improving worker’s capacity through education to make they are able to perform their work more effectively to meet the current requirements of organizational (Tran Kim Dung, 2006) This is particularly important matter because of industry-specific barriers in this area too large An equipped with knowledge and skills of employees is fully required so that they can

be confident in their work and thereby brings the highest possible efficiency This research proposes the hypothesis about training is:

H5 Training and learning has positive impact on employee’s job satisfaction

2.2.4.6 Payment

Payment is always a difficult issue in society and within the enterprise It contains contradictory relationship between workers' expectations and company’s ability, between accumulation and consumption, the income of other positions For millions of employees, payment is their daily concern Indeed, salaries are the main source of income to sustain and improve the standard living of workers and their families At a certain level, salaries can be considered as evidence to show the value, position, prestige of employees for personal and social

Payment is understood as the amount that employees receive from the employer payment corresponding to the quantity and quality of labor they have done

Payment system in a business, generally, to influence employees at four objectives: to attract, maintain, stimulate, and meet the needs of the law Salaries paid to employees as four types: paid according to working time, to qualifications and to the job results

Income of employees includes wages, basic salary, bonus, and allowances Today,

in addition to salaries, material elements, they shall also have the desire for material factors such as advancement opportunities, interesting job, consistent with the challenges of personal, as well as better working conditions.

non-This research proposes the hypothesis about payment is:

H6 Payment has positive impact on employee’s job satisfaction

2.3 Analysis on employee’s job satisfaction

The relationship between human resources management on the employee’s job satisfaction in interior design and construction industry

According to Vroom (1964), job satisfaction is a state in which employees have a clear direction for effective work in the company, or really excited to work (Locke, 1976) Based on other researcher’s opinions, as shown by the attitude feeling,

beliefs and behaviors or the attitudes of loving their job in general and the particular aspects of work or attitudes (positive or negative) based on the perception of job or work environment They define job satisfaction as the emotional reactions and feelings towards different aspects of the job such as job placement, supervision, and their superiors, relationships with colleagues, job content, the preferential treatment, and the rewards include promotion, material conditions of working environment, as well as the structure of the organization

So there are many different definitions of job satisfaction, but the most common focus can understand the satisfaction in work is the evaluation of workers with problems related to work which they are responsible

It is similar with workers in interior design and construction industry, assessment

of their work at the company may have felt differently, or is satisfied or not satisfied but they reflect the actual place of work they are doing, namely factors related to work These factors may be separate elements or integrated on many factors

What factors effect employee’s job satisfaction? These problems that Human resources management need to solve following their proper functions Starting in the recruitment, wages and benefits, training and learning, relations and some other issues

2.4 Research model

The research measures the impact of the practical elements of human resources management to the job satisfaction of employees in interior design and construction industry This approach has been made in the study by Petrescu & Simmons (2008) model of the practical elements of human resources management includes: work organization, supervision, employee involvement, recruitment and selection, training and learning, payment affect the job satisfaction of employees in which teamwork is a specific component of the work organization

Through the results of previous studies, the basis theoretical of human resource management and job satisfaction, group discussion results (enclosed Appendix) and consultation of experts, the model research on the impact of human resource management to the job satisfaction of employees in interior design and construction industry as shown in Figure 4

Figure 4: The impact of human resource management to the job satisfaction of employees in interior design and construction industry

Job satisfaction

Recruitment and selection

Training and learning

Payment

Teamwork

Supervision

Employee involvement

2.5 Summary of Chapter 2

In Chapter 2, we have defined six components of human resources management, and outlined the relationship between human resource management with employee’s job satisfaction On the other hand, we also present the model study and hypotheses of this relationship for the next stages

3 CHAPTER 3 | METHODOLOGY

3.1 Research Methods

Through these two steps are preliminary studies and qualitative research

3.1.1 Preliminary study

- Using qualitative methods group discussions

- The expert Group discussed for opinion collection is group in charge of Human resource management of companies in order to identify the necessary issues that need for research, define the components and factors in practical human resources management in the interior design and construction industry

- After selecting the preliminary scale, making interviews with 30 samples in different parts of the company within the scope of study to reassess analyzed factors and the observed variables to match with requirements

- This study was conducted in Ho Chi Minh City in February 2012

Figure 5: Stages of research

3.2 Method of data processing

The scale is a preliminary assessment through two main tools

3.2.1 Inspection by the scale factor Croncbach Alpha

Variable type does not match

3.2.2 Exploratory factor analysis EFA

Examine and redefine the variables in the model research group

3.2.3 Regression analysis and ANOVA analysis

The data were processed by SPSS 16 software

Literature review

Selection, preliminary draft scale

Preliminary studies conducted by a

group discussion method

Survey data collection

Check the reliability factor; scale testing; exploratory factor analysis

3.3 Methodology

3.3.1 Surveyor

Preliminary study phase: group discussion method and interview expert who in charge

of human resources management After that to do interview 30 samples in different parts of the company in the field of research

Formal study period: Interviews with staff of the typical company in design fitting AA Corporation, TTT Corporation and some other companies Interviews were conducted

in Ho Chi Minh, Binh Duong and Long An, where office buildings and factories of these companies

3.3.2 Method of surveying

The survey was done by directly interview employees in company about the practices

of human resources management, job satisfaction by using questionnaires During the survey, the questionnaire was sent to employees and interviews on the scene

3.3.3 Size and method of sample choosing

Preliminary study phase: The discussion group is done with the group in charge of personnel management in companies in the study After selecting and adjusting the preliminary scale, doing survey and interview 30 samples in different parts of the company, evaluate once again the suitability of factors

Formal research phase: Sample was taken in convenient sample Using whole employees of typical company According to some researchers, the observer must be

at least 4 or 5 times the number of variables in factor analysis (Hoang Trong & Chu Nguyen Mong Ngoc, 2005), the scale in thesis has 28 variables, and thus sample should be 150 people In the other hand, according to Leedy & Ormrod (2005), the size of sample is as large as possible, to ensure representativeness and to anticipate those who do not answer or incomplete answer The authors have chosen the sample size is 230 people

3.4 Scale adjustment

3.4.1 Process of scale adjustment

• Based on the scale of Singh (2004), the research applies for scale of human resources management in interior design and construction industry

• Group discussion on the research component of the scale to determine the specific components for research, which define the practical elements of human resource management, job satisfaction of employees

• The survey tried to assess the suitability of the elements in the scale before formal research

3.4.2 Qualitative research

Outline content of discussion (Appendix 1):

• Introduce the purpose and nature of the study

• Open-ended questions to gather as many opinions as possible

After selecting the objects, making discussions with the group in charge of human resources management in companies Through discussion, creating the draft scale with

23 component elements of practical human resource management, 5 elements are part

of the job satisfaction of employees

3.4.3 Quantitative research

Studies were selected using Likert scale with 5 points: from 1 point - absolutely opposed, to 5 points - totally agree Each sentence is a statement about a matter of practical human resource management, job satisfaction of employees With such content, the staff had shown their assessment of human resources management at company and the job satisfaction of employees

The questionnaire is designed including 28 questions with 28 variables These variables have an impact to the practice of human resources management, job satisfaction of employees There are 23 variables effect directly on human resources

management at the company and 5 variables effect directly on employee’s job satisfaction,

3.4.4 Scale of human resource management in interior design and construction

industry

Based on the scale of Singh (2004), the research applies for scale of human resources management in interior design and construction industry There are 06 components with 23 observed variables:

• Teamwork: 03 variables, symbol from tw1 to tw3

• Supervision: 03 variables, symbols from sup1 to sup3

• Employee involvement: 03 variables, symbols from ei1 to ei3

• Recruitment and selection: 05 variables, symbols from sel1 to sel5

• Training and learning: 06 variables, symbols from tra1 to tra6

• Payment: 03 variables, symbols from pay1 to pay3

Following:

3.4.4.1 Teamwork

In the working environment, teamwork are always enhanced in order to bring the best performance in company In the interior design and construction industry, this is no exception and it seems more and wider influence In group discussions, there are 03 variables:

1 Teamwork in my working environment is very high

2 My job has always been held in teamwork with other department

3 My colleagues always have the spirit of teamwork when working with me

3.4.4.2 Supervision

This factor in a number of companies is identified in a reduction in job satisfaction of employees but there are conflicting opinions in the different working environment In the field of interior design and construction, supervision is also an important factor that needs to be considered, particular how its correlation with job satisfaction of employees In group discussions, there are 03 variables:

1 Superior cares of my work

2 I am under a little supervision

3 I work actively

3.4.4.3 Employee involvement

New trend of administration always tends to encourage employees active in their work, from which performance will be increased In long-term development, this could be one of the important factors in the work of human resources management affecting work efficiency of employees In-group discussions, there are 03 variables:

1 I am able to make decision in my work

2 I am encouraged to participate in decisions related to general operations of the company

3 I have opportunity to propose my opinion for work improvement

3.4.4.4 Recruitment and selection

The field of interior design and construction, the recruitment of qualified candidates as requirements faces to many difficulties Most companies are now fully implemented the basic steps include preliminary interview, doing test and final interview However, due to the difficulty in finding suitable candidates due to differences in market supply, the Recruitment and selection process of candidates will normally take longer than other areas of work In group discussions, 05 variables are recommended:

1 I feel happy to be employed at the company

2 I was recruited with appropriate procedures

3 I was shared and provided enough information that I am interested in the job interview process

4 I was recruited in the right position match with qualifications and my character

5 I am satisfied with the quality of existing employment in the company

3.4.4.5 Training and learning

The quality of employees and their development through training and education are major factors in determining long-term profitability of a business Training often is considered for new employees only This is a mistake because ongoing training for current employees helps them adjust to rapidly changing job requirements

In group discussions, there are 06 variables:

1 I get basic training before receiving specific work

2 I am trained full knowledge and specialized skills for the current job is done

3 Content of Training meet requirements of my job

4 I noticed my capacity is developing through training process

5 I am pleased with current training in company

6 I would like to join more training programs in company

3.4.4.6 Payment

Payment is always a controversial topic for all companies, including specific sectors such as interior design and construction This makes sense when companies consider the importance of pay to attract talented people, retain key employees, and maintain

an excited, motivated workforce It is difficult to do a salary survey as other common areas because salary information is one of the deepest secrets of the labor market There is no doubt that salary surveys are important both for the employee as well as for the employer

In group discussion, there are 03 variables:

1 I get paid right with my performance

2 My income depends on my ability

3 My current Payment is suitable

3.4.5 Scale for job satisfaction of employees

Employees evaluate their job satisfaction base on the scope of works that they are in charge The level of satisfaction can be assessed using overall factors at work, which have an impact on staff With that reason, the job satisfaction of employees is measured according to Likert scale, following:

1 I am satisfied with my current job

2 I still choose to work at current company

3 The current company is the best place for me to work

4 I consider the company as my second home

5 I do not intend to leave the company

3.5 Summary of Chapter 3

Base on literature review of Human resources management, and employee’s job satisfaction, the research has defined methodology and research methods From this foundation, we apply for employees, which object to be surveyed with 230 samples

We also clarify how to do the survey on amount of samples; scale testing with 23 variables which including components of Human resources management and 05 variables which including components of employee’s job satisfaction; and determine the method of data processing It is important to prepare for next stage in order to define the result of research in Chapter 3

4 CHAPTER 4 | RESULT OF RESEARCH

In chapter 2, we present research methods and Likert scale that are applied for scale testing and description of research process Move to chapter 3, we continue to present the result of research of relationship between Human resources management and employee’s job satisfaction by using scale testing, exploratory factor analysis and regression analysis

4.1 Sample description:

Number of questionnaires: 230

Number of answerers: 212, achieve 92,17 %

In the questionnaires collected, there are 07 copies for the same mark with all the questions, so do not use this 07 questionnaires

Number of questionnaires used for the study: 205 copies, reaching rates of 96.6% compared to the number of questionnaires collected

Number of sample size: 205

Table 4.1 Description of the survey on gender

Frequency Percent Valid Percent Cumulative Percent

Total 205 100.0 100.0

Table 4.2 Description of the survey on age

Frequency Percent Valid Percent Cumulative Percent

36-45y 39 19.0 19.0 85.4

Total 205 100.0 100.0

Table 4.3 Description of the survey on Years of experience

Frequency Percent Valid Percent Cumulative Percent

Table 4.4 Description of the survey on Education level

Frequency Percent Valid Percent Cumulative Percent

4.2 Preliminary evaluation scale with Cronbach Alpha

4.2.1 Testing the reliability of the independent variable

4.2.1.1 Teamwork