Key factors contributing to employee engagement a study in ho chi minh city export processing zones and industrial parks

In details, it examines the impact of the five factors Supervisor support, Training, Rewards and Recognition, Working environment, and Job characteristics on employee engagement.. Beside

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

Ho Chi Minh City – Year 2014

International School of Business

-

Le Thi Hoang Lan

KEY FACTORS CONTRIBUTING

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr CAO HAO THI

Ho Chi Minh City – Year 2014

ACKNOWLEDGEMENT

Firstly, I would like to express my sincere gratefulness to my supervisor Dr Cao Hao Thi for his professional guidance, valuable support, intensive advice, continuous encouragement that

he gave me during the time doing this research

Secondly, I would like to express my deepest gratitude to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho, and Dr Tran Ha Minh Quan for their valuable time as the members of ISB Research Committee (IRC) All of their critical comments and suggestions have contributed significantly for me to complete this research

My truly thanks are also given to my ISB classmates as well as all people I know who participated in filling the questionnaires and provided the valuable information for this study Last but not least, I would like to express my sincere thanks to all professors at ISB for their teaching and guidance during my last two-year master course

Le Thi Hoang Lan

February 2014

ABSTRACT

This study attempts to examine key factors contributing to the engagement of employees, who are working in export processing zones and industrial parks in Ho Chi Minh City In details, it examines the impact of the five factors (Supervisor support, Training, Rewards and Recognition, Working environment, and Job characteristics) on employee engagement Based on this objective, a survey was delivered to target respondents and among five independent factors, the study explored positive effect of the four independent variables on employee engagement They were Supervisor support, Training, Working environment, and Job characteristics Besides, the Multiple Linear Regression and ANOVA analysis identified the research model of this study could explain 51% of the total variance in employee engagement and ANOVA testing result also showed that there was significant difference in terms of gender (between male and female) on the engagement of employees The findings also figured out supervisor support factor seemingly play a crucial role on the engagement of employees

As a result, in order to achieve high employee engagement, companies in export processing zones and industrial parks in Ho Chi Minh City might need of paying more attention on nurturing the relationship between employees and their supervisors, providing better training programs, working environment, and job design Practical and managerial implications are also further discussed in this study

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

ABSTRACT ii

TABLE OF CONTENTS iii

LIST OF FIGURES v

LIST OF TABLES vi

LIST OF ABBREVIATIONS vii

CHAPTER 1: INTRODUCTION 1

1.1 Research background 1

1.2 Research problem 2

1.3 Research objectives 3

1.4 Research scope and research methodology 4

1.5 Research contribution 4

1.6 Research structure 4

CHAPTER 2: LITERATURE REVIEW 6

2.1 Employee engagement 6

2.2 Key factors contributing to employee engagement 8

2.2.1 Supervisor support 8

2.2.2 Training 9

2.2.3 Rewards and recognition 9

2.2.4 Working environment 10

2.2.5 Job characteristics 10

2.3 The research model 12

CHAPTER 3: RESEARCH METHODOLOGY 13

3.1 Research process 13

3.2 Measurement scale 14

3.3 Data collection methods 16

3.3.1 Preliminarily qualitative research (In-dept interview) 16

3.3.2 Quantitative research 16

3.3.3 Main survey 17

3.4 Sampling design 17

3.4.1 Population 17

3.4.2 Sample size 18

3.4.3 Sampling technique 18

3.5 Data analysis methods 19

3.5.1 Statistical Method 19

3.5.2 Descriptive Statistic 19

3.5.3 Reliability analysis 19

3.5.4 Exploratory factor analysis 19

3.5.5 Multiple regression analysis 20

CHAPTER 4: RESULTS AND DISCUSSIONS 21

4.1 Sample descriptive statistics 21

4.2 Assessing the reliability of measurement scale 23

4.3 Assessing the validity of measurement scale 25

4.4 Multiple Linear Regression 28

4.4.1 Test of assumptions 28

4.4.2 Correlation analysis 29

4.4.3 Regression analysis 30

4.4.4 Hypotheses testing 31

4.6 Discussing the research results 34

CHAPTER 5: CONCLUSIONS AND IMPLICATIONS 37

5.1 Summary of findings 37

5.2 Managerial implications 38

5.2.1 Supervisor support 38

5.2.2 Job characteristics 38

5.2.3 Working environment and Training 38

5.3 Limitations and future research direction 39

References 41

APPENDICES 45

Appendix A: A back-tranlated version of questionnaire 45

Appendix B: Vietnamese-version questionnaire 47

Appendix C: English-version questionnaire 50

Appendix D: Comments from in-dept interview 53

Appendix E: Rejected item(s) in Pilot test 58

Appendix F: Determinant, KMO and Bartett’s Test, Sree Plot, Total Variance Explained 59

Appendix G: Testing assumptions of mutilple linear regression 61

Appendix H: Testing of moderating effects – Demographics (Gender/Age) 66

LIST OF FIGURES

Figure 2.1 The proposed research model 12Figure 3.1 Research process 14Figure 4.1 The final research model 34

LIST OF TABLES

Table 3.1 Measurement scale of employee engagement and factors contributing to employee

engagement 15

Table 4.1 Summary population of data collection 21

Table 4.2 Data collection methods 22

Table 4.3 Gender, Age, Position and Working experience of respondents 22

Table 4.4 Result of reliability analysis 24

Table 4.5 Rotated Component Matrix 27

Table 4.6 Correlations statistics 30

Table 4.7 Model summary of multiple linear regression analysis 30

Table 4.8 ANOVA of multiple linear regression analysis 31

Table 4.9 Coefficients of multiple linear regression 32

Table 4.10 Summary results of testing hypotheses 34

LIST OF ABBREVIATIONS

EPZs and IPs: Export Processing Zones and Industrial Parks

HEPZA: Ho Chi Minh City Export Processing and Industrial Zones Authority EFA: Exploratory Factor Analysis

ENGAGE: Employee engagement

LEAD: Supervisor support

REWARD: Rewards and Recognition

ENVIR: Working environment

JOB: Job characteristics

Many researches have shown that employees who are engaged tend to explore their performance better than who are not engaged Stated differently, an engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organization (Sundaray, 2011)

In addition, when employees are engaged, when they care more about their jobs, they are willing to exert discretionary effort (Kruse, 2012) to get the required results It means engaged employees spend the voluntary effort that lies above the minimum level of effort required to keep the job and is directed towards organizational goals (Lloyd, as cited in Parrey & Bhasin, 2013) Further, work effectiveness is simultaneously higher where more engaged employees work together It tends to higher 94% in which departments have more engaged employees as shown in the report of Dale Carnegie Training (2012) That means engaged employees are more productive, give better service to customers, and stay in their jobs longer

Therefore, in the fight for competitive advantage where employees are the differentiator, engaged employees are the ultimate goal (BlessingWhite, 2013) Employee engagement is also considered as the most powerful factor to measure company’s vigour (Baumruk, as cited

in Anitha, 2012)

1.2 Research problem

Some researches have found out factors drive the engagement of employees in Vietnam For example, Do, Nguyen and Nguyen (2012) figure out five factors associated with the long-term engagement of young Vietnamese employees to organizations including promotion opportunities, rewards and benefits policy, relationship with managers, working condition and the consistency between their job and their career purpose Among them, promotion opportunities have the strongest impact (Do et al., 2012) From a study of the relationship between job satisfaction and engagement of employees, Mai and Thai (2013) argue that in order to achieve high employee engagement, companies should have high level of employee job satisfaction, better compensations and benefits package, better working environment, and better employee relationship with management

Ho Chi Minh City is considered as a dynamic city offering a potential market To meet the requirements of economic, skilled labour is increasing dramatically, especially in export processing zones (EPZs) and industrial parks (IPs) According to Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA), up to now, the EPZs and IPs have attracted over 1.216 investment projects and have managed over 256.529 employees working

in these zones

However, in recent years, after some public national holidays, especially Tet holiday, Vietnamese employees tend not to return to work, or they leave their current job and seek themselves another job This issue has become a tendency happening in most of the

companies in the EPZs and IPs in HCMC Although companies have some solutions such as increasing salary, offering some benefit (bonus, health insurance, etc.) to remain employees and attract more labor, the number of employees is still lower than demand (Mai & Thai, 2013) It is considered as an unsolvable problem that lets many companies face with difficulties to maintain production process Therefore, it is not hard to realize that in order to survive in long-term, companies need to think how to maintain the engagement of their current employees Moreover, as stated by Mr Nguyen Tan Dinh, Vice Chairman of HEPZA (2012), to meet business’s requirements of the EPZs and IPs as well as to enhance the quality

of human resources, there is a close interaction between HEPZA and universities/colleges in

order to train and provide more skilled labor, especially high-quality workforce

Consequently, understanding the engagement of employees will help the EPZs and IPs not only maintain engaged employees to their organization, produce effectiveness of employees’ outcomes (i.e productivity, loyalty, commitment) but also help enhance high-quality workforce for competitive advantage Stated differently, a topic related to key factors contributing to employee engagement in the EPZs and IPs in HCMC is necessary to deploy

1.3 Research objectives

Based on research background and research gap, the overall objective of this study is to examine key factors associated with employee engagement as well as the strength of each factor on employee engagement In specific, this study aims to investigate:

- The contribution of supervisor support on the engagement of employees

- The contribution of training on the engagement of employees

- The contribution of rewards and recognition on the engagement of employees

- The contribution of working environment on the engagement of employees

- The contribution of job characteristics on the engagement of employees

1.4 Research scope and research methodology

This study is merely conducted in HCMC, one of the biggest economic centers of Viet Nam The target respondents are Vietnamese employees working in companies or enterprises in the EPZs and IPs in HCMC

About the research methodology, this study includes both qualitative and quantitative research and primary data are collected based on questionnaire survey For the data analysis, this study uses the Statistical Package for Social Science software (SPSS) to analyze the data analysis such as Graphs, Descriptive Statistics, Reliability analysis (Cronbach’s Alpha), Exploratory Factor Analysis, and Multiple Linear Regression to test the relationship between independents variables and the dependent variable

1.5 Research contribution

The research findings might help companies or firms in the EPZs and IPs in HCMC understand their employee engagement and have a deep awareness about key factors contributing to their employee engagement Therefore, they may know how to maintain their employees more effectively Likewise, based on the research results, this study hopes to provide practical contributions to help managers build a strategic plan for working towards increasing the engagement of employees

1.6 Research structure

The research compounds five chapters from Chapter 1 to Chapter 5 as following:

Chapter 1 - Introduction introduces the research background, clarifies the research gap then

raises the research problem, research objectives, research methodology, research scope, and contributions of the research

Chapter 2 – Literature Review presents theoretical concepts and proposes the research

model In this chapter, research hypotheses are also discussed

Chapter 3 - Research Methodology presents in more details the research process, the

measurement scales, questionnaire design, sampling design and the data analysis methods

Chapter 4 – Results and Discussions expresses all results of the research This is the most

important part of the research including Sample Descriptive Statistics, Reliability Analysis,

Exploratory Factor Analysis, and Multiple Regression Analysis In this chapter, a discussion

of the research’s findings is also presented to provide a comprehensive picture about the

contribution of factors affecting to employee engagement in the context of EPZs and IPs in

HCMC

Chapter 5 - Conclusions and Implications presents a conclusion of the findings in the

study, suggests managerial implications based on the results of previous chapters, and gives

limitations that impact on the findings as well as future research direction

CHAPTER 2: LITERATURE REVIEW

This chapter aims to present an overview of which literature related to employee engagement concept and factors affecting employee engagement including definitions and evidences from previous studies In this chapter, a proposed research model as well as research hypotheses are also developed

2.1 Employee engagement

In recent years, employee engagement has become an interesting topic because better services, better products, high technologies or better strategies can make one company more successful than another but all of them can be copied over time (Dale Carnegie Training, 2012) The only thing that creates sustainable competitive advantage is the workforce, the people who are working for the company

According to Markos and Sridevi (2010), there is no single and generally accepted definition for the term employee engagement Moreover, definitions of employee engagement have been written in practical journals rather than theories and empirical researches (Saks, 2006)

In business, employee engagement is the emotional commitment that the employee has to the organization and its goals (Kruse, 2012) As suggested by Kruse, this emotional commitment means engaged employees actually care about their work and their company, work for the organization’s goals instead of working just for a salary, or just for promotion It means that engaged workers love their job and want to finish their job as effective as possible They even try to solve difficulties that they face to in job, and of course, they would introduce their company and product of company to people they know (Kruse, 2012)

Kahn (1990), one of the foremost researchers to introduce the concept (Anitha, 2012), defines employee engagement as the harnessing of organization members’ selves to their work roles

As defined by Kahn, there are three aspects of employee engagement (physical aspect,

cognitive aspect and emotional aspect) Kahn also adds three psychological engagement conditions that are necessary for an employee to be rightly engaged: meaningfulness (work elements), safety (social elements, including management style, process and organizational norms) and availability (individual distractions)

Harter, Schmidt, and Hayes (2002) view employee engagement as the individual's involvement and satisfaction with as well as enthusiasm for work

Robinson, Perryman and Hayday (2004) define employee engagement as a positive attitude held by the employee towards the organization

Saks (2006) approaches this concept from a multidimensional perspective As defined by Saks (2006), employee engagement is a distinct and unique construct that consists of cognitive, emotional, and behavioral components that are associated with individual role performance

Sundaray (2011) supposes employee engagement is the level of commitment and involvement an employee has towards their organization and its values

In academic, according to Markos and Sridevi (2010), the construct employee engagement is built on the foundation of earlier concepts like job satisfaction, employee commitment and organizational citizenship behavior Thus, it is stronger predictor of positive organizational performance as well as clearly showing the two-way relationship between employer and employee compared to the three earlier concepts Engagement takes place when employees show interest in their jobs and are willing to exert an extra discretionary effort to get the required results (Macey & Schneider, 2008) That means engagement is not for the organization and comes from the internal motivation; however, the benefits do reach the organization Consequently, engaged employees are highly involved in their job with a great enthusiasm for the success of their employer as well as seemingly going extra mile beyond the employment contractual agreement

to influence employee engagement in case of increasing their involvement, satisfaction and enthusiasm for work (Anitha, 2012) For this reason, first-line supervisors are believed to be especially important for building engagement and to be the root of employee disengagement (Bates, Frank, Finnegan & Taylor, as cited in Saks, 2006)

Relationship between employees and managers is also investigated to be positively signifincant in predicting the engagement of Vietnamese employees (Do et al., 2012; Mai & Thai, 2013) Thus, supervisor support is likely to be an important predictor of employee engagement (Saks, 2006) In fact, a lack of support from supervisors is found to be an important factor that links to burnout (Maslach, Schaufeli & Leiter, 2001)

With these arguments, this study develops the following hypothesis:

H1 Supervisor support has a positive impact on employee engagement

2.2.2 Training

As defined by Dessler (2012), training is the process of teaching new or present employees the skills they need to perform their jobs According to Sundaray (2011), learning new skills may trigger renewed interest in such aspects of the job that are not meaningful earlier As a result, employees who enhance their skills through training are more likely to engage fully in their work, because they derive satisfaction from mastering new tasks (Robinson et al., 2004)

As cited by Kahn (1990), training is especially relevant for providing employees with resources that will make them feel available to be fully engaged in their roles (e.g knowledge and skills required to perform one's work tasks) Proper training program and career opportunities can make employees feel more secure about their ability to perform their job thereby lowering their anxiety and increasing feelings of availability (Gruman & Saks, 2011; Sundaray, 2011; Albdour & Altarawneh, 2012; Madan, 2011) They are even an important strategy for preparing employees the ability to cope with job demands (Robinson et al., 2004; Gruman & Saks, 2011) as well as retaining the most talented employees for organizational development (Schaufeli et al., 2009; Madan, 2011; Sundaray, 2011)

With that in mind, this study develops the following hypothesis:

H2 Training has a positive impact on employee engagement

2.2.3 Rewards and recognition

Rewards and recognition, as defined by Dessler (2012), relate to appropriate acknowledgment and appreciation of employees’ efforts in a fair and timely manner A sense

of return on investments can come from external rewards and recognition (Saks, 2006; Sundaray, 2011; Anitha, 2012)

Kahn (1990) also suggests that people vary in their engagement as a function of their perceptions of those benefits they receive while Maslach et al (2001) suppose that a lack of rewards and recognition can lead to burnout In addition, rewards and recognition produce a

positive impact on the engagement of young Vietnamese employees in some major industries such as banking, customer service, construction, human resources (Do et al., 2012) Stated differently, engaged employees might engage themselves at work to perceive a greater amount of rewards and recognition for their role performance

With these arguments, it can assume that appropriate recognition and rewards are important for engagement Thus, the study proposes the hypothesis as follow:

H3 Rewards and recognition have a positive impact on employee engagement

2.2.4 Working environment

Working environment is defined as a workplace where provides feedback and encourage employees to voice their concerns as well as displays their needs and feelings (Janet, 2004) Many researches prove that employee engagement is something that is produced by aspects

in the workplace (Harter, Schmidt & Hayes, 2002) The engagement levels are even low if the employees do not feel comfortable while working (Sundaray, 2011; Albdour & Altarawneh, 2012) Do et al (2012) figure out that working environment is significant influence on long-term engagement of young Vietnamese employees Mai and Thai (2013) argues that in order to achieve high employee engagement, companies in HCMC industrial areas should have better working environment and better relationship between employees and managers

With these arguments, a meaningful workplace environment is considered to relate to the engagement of employees Accordingly, it is hypothesized that:

H4 Working environment has a positive impact on employee engagement

2.2.5 Job characteristics

As defined by Hackman and Oldham (as cited in Saks, 2006), job characteristics include the five core components (i.e skill variety, task identity, task significance, autonomy, and

of engagement Likewise, the workload and control conditions positively relate to meaningfulness and mediated the relationship between job enrichment and engagement, and suggest the importance of job characteristics (Maslach et al., 2001)

For this perspective, it can argue that employees who are provided with enriched and challenging jobs will feel oblige to respond with higher levels of engagement (Saks, 2006) With that in mind, the study proposes the following hypothesis:

H5 Job characteristics have a positive impact on employee engagement

The five factors affecting on employee engagement are summarized in Table 2.1

Table 2.1 Factors contributing to employee engagement

1 Supervisor support Maslach et al (2001), Rhoades and Eisenberger (2002),

Saks (2006), Gruman and Saks (2011), Anitha (2012),

Do et al (2012), Mai and Thai (2013)

2 Training Kahn (1990), Robinson et al (2004), Schaufeli et al

(2009), Madan (2011), Gruman and Saks (2011), Sundaray (2011), Albdour and Altarawneh (2012)

3 Rewards and recognition Kahn (1990), Maslach et al (2001), Saks (2006),

Sundaray (2011), Anitha (2012), Do et al (2012)

4 Working environment Harter et al (2002), Robinson et al (2004), Sundaray

(2011), Albdour and Altarawneh (2012), Do et al (2012), Mai and Thai (2013)

5 Job characteristics Maslach et al., (2001), Saks (2006), Sundaray (2011)

2.3 The research model

Based on the review of related literature, the conceptual model is presented in Figure 2.1 Within it, the five independent factors are proposed to put a positive impact on the dependent variable, employee engagement They are stated in hypotheses from H1 to H5

Figure 2.1 The proposed research model

In summary, based on reviewing literature, the research constructs a model with five

independent factors including Supervisor support, Training, Rewards and Recognition,

Working environment, and Job characteristics positively affect the dependent factor - employee engagement since these factors as well as their relationship with employee engagement have been tested by many previous researches

CHAPTER 3: RESEARCH METHODOLOGY

This chapter’s purpose is to present methodology applied in the study Firstly, the research process is introduced Secondly, the measurement scale using in the research is mentioned Questionnaire design, data collection methods and sampling design are discussed in next sessions Finally, data analysis methods applying to report the research’s data are presented

3.1 Research process

Defining the research problem was the priority and placed as the first step of the study After that, literature was reviewed to find out relevant concepts associated with the engagement of employees These concepts simultaneously played a role as a foundation for proposing the research model and hypotheses of the study in the next step Continuously, the research design was conducted to determine data needs/resources, methods of collecting data, measurement scale adapted in the study, sampling design and data analysis methods

Based on the measurement scales borrowed from previous studies, a draft questionnaire was designed and translated into Vietnamese The draft questionnaire, then, was revised by the researcher’s supervisor to correct mistakes before launching research

The research was undertaken through two steps: preliminary and official The preliminary step included a qualitative research and quantitative pilot survey The qualitative research was conducted by an in-dept interview to adjust the measurement scales while a quantitative pilot survey was conducted to assess the reliability of the measurement scales After that, in the official step, the final questionnaire was used in a quantitative main survey to collect data for data analysis process (reliability analysis, validity analysis and hypotheses testing) Based

on the results, conclusions and recommendations were provided to complete the research Figure 3.1 shows the whole process of the research

Figure 3.1 Research process

3.2 Measurement scale

The measurement scales applying in this study were adapted from other researchers (see

Table 3.1 below) Most of scales were borrowed from Saks (2006), for instance: Supervisor

support was measured by 03 items, Rewards and Recognition were measured by 04 items,

Job characteristics were measured by 04 items, and Employee engagement was measured by

Literature review

Research model and Hypotheses

Reliability Analysis (Cronbach’s Alpha)

Draft questionnaire

In-dept interview (n = 10)

Revision scale Final

questionnaire

Pilot survey (n = 80)

Delete low item-total correlation item(s) (<0.3)

Main survey (n = 244)

Define research

problem

Research design

- Data needs and Data resources

- Data collection method

Multiple Regression Analysis

Conclusions and

Implications

Measurement scale / Source

1 Supervisor support (Borrowed from Saks, 2006)

V1.1 My supervisor respects my opinions

V1.2 My supervisor really cares about my well-being

V1.3 My supervisor strongly considers my goals and values

2 Training (Borrowed from Salanova, Agut and Peiró, 2005)

V2.1 Managers ask employees for my opinion on training activities

V2.2 Learning helps me to overcome work obstacles

V2.3 Training is practical

3 Rewards and Recognition (Borrowed from Saks, 2006)

V3.1 This organization has career development activities

V3.2 Public recognition (e.g employee of the month)

V3.3 A pay raise

V3.4 A promotion

4 Working environment (Borrowed from Janet ,2004)

V4.1 Employees and managers get along in this organization

V4.2 My working life balances with my family life

V4.3 My organization is willing to help me if I need a special favor

V4.4 Respect from the people I work with

5 Job characteristics (Borrowed from Saks, 2006)

V5.1 My job permits me to decide on my own on how to go about doing the work

V5.2 My job is a complete piece of work that has an obvious beginning and end

V5.3 My job requires me to do many different things at work, using a variety of skills and talents

V5.4 Besides feedback from my co-workers, this job actually provides clues on how well I

am doing my work

6 Employee engagement (Borrowed from Saks, 2006)

V6.1 I really “throw” myself into my job

V6.2 Sometimes I am so into my job that I lose track of time

V6.3 Being a member of this organization is very captivating

V6.4 I am highly engaged in this organization

3.3 Data collection methods

All items of the scales were transferred to questionnaire The original transferred questionnaire was in English, and was translated into Vietnamese for survey Therefore, a back-translation by an English teacher was also conducted to ensure equivalence of meanings (see Appendix A)

The questionnaire comprised two parts: part one included measurement scales using a point Likert scale to ask respondents choose one item that ranged from (1) strong disagree to (5) strongly agree; part two was some general demographic information of the respondent as well as contact information to deliver the research’s results if the respondent required Both versions of the questionnaire (Vietnamese version and English version) are shown in Appendix B and Appendix C

five-3.3.1 Preliminarily qualitative research (In-dept interview)

Based on the draft questionnaire, an in-dept interview was undertaken with 10 leaders (each

of them has been in charge of workers in one industrial park or export processing zone in HCMC) to investigate whether the measurement scales were already understood clearly and fully suitable or not As a result, comments given from in-dept interview were used for adjustment of the measurement scales (see Appendix D)

3.3.2 Quantitative research

After revising the draft questionnaire based on the result of preliminarily qualitative research, the final questionnaire of the study was formed Continuously, the scales in the final questionnaire were refined through a quantitative pilot survey with 80 respondents using

Cronbach’s Alpha This first refinement’s purpose was to reject any variable did not meet the requirement of scale reliability After rejecting those unreliable variables, the main survey was conducted widely to collect data for data analysis

3.3.3 Main survey

Most of the questionnaires were delivered to target respondents via paper version In addition, mail version and online survey using Google Survey, were also used Data collected through questionnaire survey was considered as the primary data of this study Besides, other sources such as related business journals, articles, internet information from business websites, books, or newspapers were used as the secondary data

3.4 Sampling design

3.4.1 Population

According to HEPZA, Ho Chi Minh City has three EPZs (Linh Trung I, Linh Trung II and Tan Thuan) and thirteen IPs (An Ha, Binh Chieu, Cat Lai II, Dong Nam, Hiep Phuoc, Hoa Phu, Le Minh Xuan, Tan Binh, Tan Phu Trung, Tan Tao, Tan Thoi Hiep, Tay Bac Cu Chi, and Vinh Loc) To be convenient for collecting data, the research concentrated to merely two export processing zone (Tan Thuan EPZ and Linh Trung I EPZ) and two industrial parks (Tan Binh IP and Vinh Loc IP) as representative of the whole EPZs and IPs in HCMC The target population was Vietnamese employees who have been working full-time in companies or firms in above selected EPZs and IPs in HCMC at least one year to the date of participation in survey and under 35 years old

3.4.2 Sample size

Sample size is very important and depends on the analysis method (regression, exploratory factor analysis, etc.) Roscoe, as cited in Sekaran and Bougie (2011), proposes the following rules of thumb for determining sample size:

 500 > Sample sizes > 30 are appropriate for most research;

 Where samples are to be broken into subsamples (males/females, juniors/seniors, …),

a minimum size of 30 for each subgroup is necessary;

 In multivariate analysis, the sample size should be several times (preferably 10 times

or more) as large as the number of variables in the analysis

Besides, the minimum size of sample for factor analysis should be 50, preferably 100 and should be 5 times (preferably 10 times or more) as large as the number of variables in the analysis (Hair et al., as cited in Nguyen, 2012):

n ≥ 100 and n ≥ 5k (where k is equal to the number of variables)

Otherwise, as illustrated by Tabachnick and Fidell, cited in Nguyen (2012), the minimum sample size, which is required for the Multiple Linear Regression should be:

n ≥ 50 + 8p (where p is equal to the number of independent factors)

In this research, since there are 22 variables, the minimum sample size that is relevant to Exploratory Factor Analysis is 5 x 22 = 110 Moreover, because there are five independent factors in the proposed research model, the minimum sample size that is required for the Multiple Linear Regression is 50 + (8 x 5) = 90 Finally, the minimum sample size that is appropriate for doing data analysis in this research is 110

3.4.3 Sampling technique

This study applied the nonprobability sampling technique – convenience sampling As its name implies, convenience sampling refers to the collection of information from members of the population who are conveniently available to provide it (Sekaran and Bougie, 2011)

A common acceptable value of Cronbach’s alpha for reliability is from 0.7 to 0.8 (Nguyen, 2012) However, it can decrease to 0.60 - 0.69 range in exploratory research or when there are only a handful of items in the scale (Leech et al, 2005) If the Cronbach’s alpha is greater than 0.9, this probably means that the items are repetitious or more items in scale are necessary for a reliable measure of the concept scale (Leech et al, 2005) Any variable that has value of the Corrected Item – Total Correlation is negative or too low (less than 0.3) should be considered to be modified or deleted for improvement of the reliability level (Leech et al, 2005)

3.5.4 Exploratory factor analysis

After evaluating the scale reliability, the Exploratory Factor Analysis (EFA) method is applied to identify the number of underlying factors that explain the correlations among a set

of variables as well as to test the convergent validity and discriminant validity Convergent validity shows the degree in which two measurements of the same concept are correlated (Hair et al., as cited in Nguyen, 2012) while discriminant validity states that two measurement scales are used to measure two different concepts need to be discriminant from each other

3.5.5 Multiple regression analysis

The Multiple Regression is used for the hypotheses testing, in order to study the correlation and determine the variation in five independent factors explained by one dependent factor It

is also conducted to check how well the conceptual model fits the data and test hypotheses on the regression equation Therefore, according to Leech et al (2005), the Multiple Regression requires many assumptions but there are six major ones: (1) A linear relationship between the predictor variables and the dependent variable; (2) Independence of residuals (errors); (3) Homoscedasticity of residuals/equal error variances; (4) No multicollinearity; (5) No significant outliers; and (6) Residuals/errors are normally distributed

In summary, this chapter presents the research process, from building the measurement scales, preliminary research to assess the measurement scale in official research to collect data for the study It also mentions details of the questionnaire design and sampling design, data collection methods and methods using to analyze the data

CHAPTER 4: RESULTS AND DISCUSSIONS

This chapter presents the results of the research’s data analysis about key factors contributing

to employee engagement in the EPZs and IPs in HCMC Its structure includes four parts: (i) Sample Descriptive Statistics; (ii) Reliability Analysis (Cronbach’s Alpha) for testing the reliability of the measurement scales; (iii) Exploratory Factor Analysis (EFA) for testing the discriminant validity and convergent validity of the measurement scale; and (iv) Regression Analysis for testing relationship among variables and testing hypotheses of the research Likewise, a discussion of the research findings is discussed at the end of this chapter

4.1 Sample descriptive statistics

A questionnaire survey was conducted via paper version, mail version and online version The survey focused on target respondents – Vietnamese employees working in companies in the four selected EPZs and IPs: Tan Thuan Export Processing Zone; Tan Binh Industrial Park; Linh Trung I Export Processing Zone; and Vinh Loc Industrial Park

Duration of the whole survey was four weeks from September 15 to October 15, 2013 Total 300 questionnaires were delivered but merely 269 replies, about 25 of them were rejected due to missing checking The valid questionnaires were 244 at the end

Details of the study’s population are presented in Table 4.1

Table 4.1 Summary population of data collection

Valid questionnaires: 269–25= 244

Data collection methods were shown in Table 4.2 According to this, collecting data through paper version occupied the highest percentage (75%) with frequency 183 over 244 Email version occupied 13.9% while online survey gave the lowest frequency (27/244) with 11.1% respectively

Table 4.2 Data collection methods

Table 4.3 provided a frequency table of general information of respondents in this research, including their gender, age, position, and their work experience

Table 4.3 Gender, Age, Position and Working experience of respondents

As shown in Table 4.3, approximately 57.8% of the sample (n = 141) were female and 42.2%

of the sample (n =103) were male In terms of age, a frequency analysis indicated that 69.7% (n = 170) of respondents belonged to younger group, and the rest of respondents (n = 74) were older (30.3%) In terms of position, a frequency analysis indicated that more than a half

of respondents (55.3%, n = 135) were workers and 44.7% (n = 109) were staff at executive level In terms of working experience, there were 108 respondents (44.3%) that had two to five-year work experience, 80 respondents (32.8%) had less than two-year work experience while 18.4% and 4.5% of respondents were from five to ten years and over ten years in work

non-4.2 Assessing the reliability of measurement scale

Cronbach’s alpha was conducted to test the reliability of the measurement scales Based on the research methodology part, for reliability coefficients, alpha should be over 0.6 and any variables had the item-total correlation less than 0.3 should be rejected

In the pilot test (sample size was 80), most of scales had the alpha value higher than 0.6 and each item in each scale had the item-total correlation moderately high (0.04 or above), except item V5.4 (Job characteristics scale) This item was rejected because they had the Item-total correlation below 0.3 (0.076) Additionally, rejecting this variable made the alpha’s value go

up and did not affect the content validity of related measurement scale

The final reliability test gave a better result (see Table 4.4) In specific, the Cronbach’s Alpha

of Supervisor support scale, Training scale, Rewards and Recognition scale, Working environment scale, Job characteristics scale and Employee engagement scale was 0.744, 0.715, 0.737, 0.728, 0.743 and 0.751, respectively

Table 4.4 Result of reliability analysis

Item Deleted

Scale Variance if Item Deleted

Corrected Item-total Correlation

Cronbach’s Alpha if Item deleted

1 Supervisor support: Alpha = 744

This result indicated that:

 No item had the item-total correlation negative or too low (less than 0.3)

 The Cronbach’s Alpha value of each scale was greater than 0.6

In short, all multiple item scales applied in this research had internal consistency reliability The Cronbach’s Alpha value of all scales was quite good (between 0.7 and 0.8) and all items had the correlated item-total correlation moderately high or high (above 0.4)

4.3 Assessing the validity of measurement scale

Exploratory factor analysis (EFA) was conducted to assess the validity of measurement scale, include discriminant validity and convergent validity

In this study, the principal component and extract factors based on eigenvalue (Eigenvalues greater than 1) were chosen as extraction method in EFA analysis An orthogonal rotation (Varimax) was used as rotational method

Determinant: The determinant value was the first assumption in EFA analysis In this study,

the determinant was 0.001 (see Appendix F) This value was not close to zero, so it met the requirement because if the determinant was close to zero, a factor analytic solution could be obtained and collinearity was too high (Leech et al., 2005)

KMO and Barlett’s Test:

The KMO’s value was 0.824 (see Appendix F) Its value indicated sufficient items for each factor (Leech et al, 2005) and the data set was likely to factor well The Bartlett’s test showed the significant value lower than 0.05 (Sig =.000) which indicating that the correlation matrix was significant different from an identity matrix and the correlation between variables were all zero

In summary, both Determinant and KMO and Barlett’s Test confirmed that the data were suitable for factor analysis

Total variance explained: The criteria for the validity of measurement scales in EFA analysis

was the total variable explained greater than 50% The six components that were extracted

from EFA using Principal Component Analysis were consistent with six proposed factors

In details, the extraction sums of squared loadings showed that the first six components had the cumulative percentage of variance was 64.112% (greater than 50%) and all of them had the eigenvalues were greater than 1

In other words, with these six factors were extracted, they could explain 64.112% of variance

of the original variables After the first six components, the eigenvalues started to decrease less than 1 as shown in the sree plot (see Appendix F)

Rotated component matrix: The rotated factor matrix was a key for understanding the results

of EFA analysis according to loadings

After rotating, 21 variables of this research were divided into the six components In addition,

all factor loadings were greater than 0.50 All variables belonged to the right concept as the

research had proposed in advance (see Table 4.5)

- Component 1 “Rewards and Recognition” (REWARD) included V3.1 (0.789), V3.4 (0.758), V3.2 (0.727) and V3.3 (0.582)

- Component 2 “Training” (TRAIN) included V2.2 (0.843), V2.1 (0.741) and V2.3 (0.675)

- Component 3 “Employee engagement” (ENGAGE) included V6.2 (0.781), V6.1 (0.683), EV6.5 (0.620) and V6.4 (0.504)

- Component 4 “Supervisor support” (LEAD) included V1.2 (0.823), V1.1 (0.801) and

V1.3 (0.691)

- Component 5 “Working environment” (ENVIR) included V4.3 (0.788), V4.4 (0.742), V4.2 (0.617) and V4.1 (0.543)

4.4 Multiple Linear Regression

After assessing the reliability and the validity of the measurement scale, the Multiple Linear Regression was used for testing the correlation, the hypotheses, studying and the strength of each independent factor that significantly influences on the dependent factor

(2) Independence of residuals (errors):

In SPSS, Durbin-Watson Statistic is used to test the presence of serial correlation among the residuals The value of the Durbin-Watson statistic ranges from 0 to 4, value close to 0 indicates strong positive correlation while a value of 4 indicates strong negative correlation

As a general rule of thumb, the residuals are uncorrelated is approximately 2 in the Watson statistic (or say 1.5 < Durbin Watson < 2.5)

Durbin-For the data of this research, the value of Durbin Watson was 1.694 Its result indicated no serial correlation Thus, assumption of Independence of residuals (errors) was satisfied (3) Homoscedasticity of residuals (equal error variances):

Like the assumption of linearity, the scatter plot for residuals and predicted value showed no violation of homoscedasticity Therefore, the data of this research was not violated the assumption of homoscedasticity

(4) No multicollinearity