Low employee engagement among senior credit officers at vietinbank in ho chi minh city

CHAPTER 2: PROBLEM CONTEXT 2.2 Symtoms 1: High turnover rate among senior staffs at credit 2.2.1 Rising number of resigned employees 11 2.2.2 Numbers of resigned employees categorized b

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Vo Quoc Tin

LOW EMPLOYEE ENGAGEMENT

AMONG SENIOR CREDIT OFFICERS AT VIETINBANK IN HO

CHI MINH CITY

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2017

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Vo Quoc Tin

LOW EMPLOYEE ENGAGEMENT

AMONG SENIOR CREDIT OFFICERS AT VIETINBANK IN HO

CHI MINH CITY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: LE THI THANH XUAN

Ho Chi Minh City – Year 2017

Assignment Cover Sheet

Title of Assignment

Low employee engagement among senior credit officers at Vietinbank in Ho Chi Minh City

Student Name_ Student

I hold a copy of this assignment

if the original is lost or damaged

I hereby certify that no part of this assignment or product has been copied from any other student’s work or from any other source except where due

acknowledgement is made in the assignment

No part of the assignment/product has been written/produced for me by any

other person except where collaboration has been authorized by the subject

lecturer/tutor concerned

I am aware that this work may be reproduced and submitted to plagiarism

detection software programs for the purpose of detecting possible plagiarism

(which may retain a copy on its database for future plagiarism checking)

TABLE OF CONTENTS

1 CHAPTER 1: COMPANY INTRODUCTION

1.1 Industrial background: banking industry 7

2 CHAPTER 2: PROBLEM CONTEXT

2.2 Symtoms 1: High turnover rate among senior staffs at credit

2.2.1 Rising number of resigned employees 11 2.2.2 Numbers of resigned employees categorized by

2.2.3 Numbers of resigned employees categorized by senior

2.2.4 High turnover rate among senior staffs at credit

2.3 Symtoms 2: Increasing complaints from customers 15

3 CHAPTER 3: POTENTIAL PROBLEM IDENTIFICATION

3.1 First round interview: Interview with “people around the

3.1.1 Interview with resigned employees 16

3.2 Second round interview: In-depth interview with “problem

4 CHAPTER 4: APPLYING LITERATURE CONCEPTS: AON HEWITT’S MODEL OF EMPLOYEE ENGAGEMENT TO JUSTIFY THE CENTRAL PROBLEM

4.1.1 Kahn’s Model 21 4.1.2 Maslach, Schaufelli and Leiter Model 22

4.1.3 Robinson, Perryman and Hayday Model 23

4.2 Applying Aon Hewiit’s Model on measuring Employee

Engagement of senior credit officer in Vietinbank in Ho Chi Minh

4.2.2.4 Central problem: low employee engagement 29

5 CHAPTER 5: CAUSE JUSTIFICATION

5.3 Justify the existence of central cause 34 5.4 Justify the importance of central cause 34

6 CHAPTER 6: CLARYFYING CENTRAL CAUSE ANTECEDENTS

6.4 Poor collaboration between departments 36

7 CHAPTER 7: ALTERNATIVE SOLUTIONS AND ACTION PLAN

7.1 Alternative solution 1: Implement cut-off-time and forcing employees to

7.2 Altenative solution 2: clarify the scope of work and responsibility of

7.3 Alternative solution 3: Organize team building cross – department

periodically and rotating positions for a short term 40

9 Appendix 1: Transcipt of interviews with leaving staff 44

10 Appendix 2: Transcipt of interviews with customers 47

11 Appendix 3: Transcipt of interviews with employers 50

12 Appendix 4: Sample of questionare sent out to senior credit officers in Ho

EXECUTIVE SUMMARY

In recent years, banking industry has observed enormous growth after recovery from the global economic crisis, especially at some giant conlongmerate such as Vietinbank However, there are some fluctuations in term of key persons and the question is how Vietinbank can maintain it’s key persons to achieve a sustainable growth By testing the employee engagement of senior credit officers in Vietinbank at Ho Chi Minh city using Aon Hewitt’s Model, this research has pointed out some direct causes to the issue and propose some feasible solutions

CHAPTER 1: COMPANY INTRODUCTION

1.1 Industrial background

It is undeniable that Vietnam is on tremendous development and integration in global economic Since Vietnam has officially participated in the World Trade Organization (WTO), besides the advantages and opportunities, there have been still many challenges that Vietnam has to overcome In recent years, Vietnamese's financial institutions have achieved many important achievements in innovation However, compared to other countries, Vietnam banking sector is still small, modest, and inadequate

Vietnam banking industry has really been a remarkable growth compared to ten years ago Firstly, banking system has mobilized and provided an enormous amount of capital to the economy, estimated about 16-18% of annual GDP (Vietnam Head Department Statistic 2008), nearly 50% of social capital Credit growth was 24 % in

2008 and was 19% higher than in 2007 The banking system has also contributed to growth, the development, and economic stability in recent years Secondly, Vietnam's banking sector had an intergrated renovation Many legal papers have been issued compendiously, the codes of conduct for banking activities has been completed and consistent with global practice Banks as well as credit institution have been autonomous and self-responsible Competitiveness of credit institutions has been enhanced therefore each entitiy in the industry can develope safely and effectively Thirdly, monetary policies have been renovated and operating under market principles

with international practice Interest rate policy and exchange rate flexibility have been utilized by the market mechanism

Trends in the Vietnam banking sector

Strong credit growth is feasible for the next coming years Vietnam may still be

able to maintain 16-18% credit growth Firstly, credit growth so far has been driven more by the private own companies and consumer sector, both of which we believe still have further room to grow Secondly, the Basel 2 delay till 2020 allows banks with “in-between” capital to sustain their asset growth

Long-term issues remain unsolved Although there is growth in nearterm, the

industry still have to overcome many challenges First, it is still in need of huge capitalisation to accommodate growth and to play a role as a cushion against any deterioration in asset quality Second, the sector needs a more adequate way of dealing with bad debts

Banks are not equal Varying capital, exposure, cost structure and asset quality

means each bank has different chances On valuation, comparative multiples should

be adjusted for asset quality and ROE should be adjusted for below-the-line costs MBB (Military Bank) is classified as “Outperform” because of its improving growth and attractive valuation CTG (Vietinbank) is as “Neutral” with better near-term growth though riskreward looks balanced On the other hand, “Underperform” is on

BIDV which is in emergent need to recap, is vulnerable to compete for deposit, is facing deteriorating asset quality and is overrated on valuation

1.2 Company background

VietinBank was built in 1988 after being separated from State Bank of Vietnam (SBV) It is one of the four largest commercial banks of Vietnam with total assets account for over 20 percent of the market share of the whole system

VietinBank has developed an operations network comprising of 1 transaction centers,

150 branches and over 1000 transaction offices Vietinbank has strategic partnerships with the International Finance Corporation (US) and Mitsubishi UFJ Financial Group (Japan) It has a market capitalization of VND 53.22 trillion (around $2.5 billion) as

of late 2012, making it one of Vietnam's largest listed companies According to the VNR500 (Top 500) ranking, Vietinbank is Vietnam's 13th largest company Currently, Vietinbank has a total of 23.628 employees As of 2016, average monthly wages of VietinBank has reached to 1,000 USD/person/month

Mission

To be a financial leader in Vietnam that offers a full spectrum of international standard banking services and financial solutions to individuals and corporate clients

Vision

To be the largest bank of total assets value and the leading in operational effectiveness

in banking system in Vietnam in 2017 Striving toward the goal of becoming a regional banking and financial group of international standard

Core Values

Customer Orientation, Towards Excellence, Dynamic, Creative, professional & modern, Integrity, Honesty & Transparency, Respect, Brand protection and development, Sustainable development and social responsibility

Business Philosophy

CHAPTER 2: PROBLEM CONTEXT

2.1 Juniors and Seniors Definition

According to the Regulation of Labour by Vietinbank signed by Chairman on December 21st 2003:

 Junior: Employee who has working experience in Vietinbank less than 5 years

 Senior: Employee who has working experience in Vietinbank more than 5 years or employee who can build up to 500 billion VNDs credit outstanding if he/she working in a department which is in charge of approaching customers

or having a position higher than deputy head of a department at branches (or equivalent) as demonstrated in the hierarchy chart

Notes: Head/ Deputy head at departments in the Head Office is equal to Director/Deputy Director in Branches, then Premeir Specialist in Head Office is equal to Deputy Head of a Departments in Branches Positions from red colour upwards is considered as senior

Head of accouting department

Head of retail department

Head of credit support department

Head of general administration department

Trade Finance House

Safe, effective and sustainable; Loyal, dedicated, passionate & committed, wise and principled; The prosperity of VietinBank customers is our ultimate success

1.3 Organization Chart

2.2 Symtoms 1: High turnover rate among senior staffs at credit

department resigned employees 2.2.1 Raising numbers of resigned employees

Vietinbank is one of the most populous banking institutions in Vietnam Total employees of Vietinbank has risen sharply in the last 3 years, from 18,097 employees

in 2014 to 20188 employees in 2016

As observed in the first 6 months of 2017 the number of employees apply for resignments is approximately 2.804 which is 21,8 % higher compared to same period last year When we devide the number of employees who resigned by the total number

of employees, we can see that the ratio of resigned employees has risen noticeably, from 12.3% to 13.4%

2.2.2 Numbers of resigned employees categorized by departments

We then look deeper into the statistic when we categorized employees by which department they are in Figures are shown below:

Surprisingly, credit department is mainly responsible for the gaining in resignation of

Vietinbank employees There are also some increase in other departments in term of

resigning staffs, but the level is much lower By this new findings, it can be said that

blooming resignations at Credit Department is an emerging symtoms at Vietinbank

2.2.3 Numbers of resigned employees categorized by senior and junior

In which, number of junior who resign rise 12% and number of senior rise 18% It can

be told that: (i) both junior and senior segments has been suffered from a huge rise in

term of number of employees who resigned However, percentage of senior employees

who resign is relatively higher than junior employees; (ii) percentage of employees

who resign from 2014 up to now is clearly higher than that of industry average;

To clarify the difference between two groups – senior and junior We conduct a small

interview with employers, who in charge of recruiting and managing staffs There are

5 persons who took part in the interview, who are: 3 head of credit departments at 3

different segments (retail, SME and Conglomerate s banking), 1 branch director and

1 Head of HR at Branch

Each interview was taken in five minutes at the working place and was taken in a form

of small talks They were interviewed about how they feel about the main reason for

the resignments of employees – senior and junior and are there any differences

between the two group As expected, the employers observed two groups of employees

totally diferrently

Mr Phong – director of Vietinbank Branch 6 shared his opinion about junior staffs “

It‘s very easy to employ junior staffs In particularly, each year top 4 economic –

oriented university educating total 12,000 new bachelors; wheares Vietinbank only

employs at maximum 1,200 job vacants a year We are one of the top banks in Vietnam

so we don’t have to worry!” It is also the opnion of many employers at Vietinbank such as Mrs Ha – head of HR department in Vietinbank Branch 1 “Junior they just come and go, they are young so they don’t hesistate to try until they find a working place which is most suitable I think Vietinbank gains too much benefits from this resources, I don’t see it as a problem at all Imagine that you can hire 1,000 staffs a year who are willing to work overtime and not consider too much about wages, jobs

at banks with monthly wages over 10 million VNDs is definitely impressive to them.”

It is crucial that we should consider Mrs Hang – head of MNCs department in Vietinbank Branch Tay Sai Gon sharing “ Junior only create 20% of Vietinbank’s revenue!”

However, things are going quite sensitive and intimate when mention about senior staffs Almost employers has to admit that there is a outflows of those experienced staffs to other financial institutions as the competition in the industry is getting higher and higher Mr Binh – Head of Retail Department at Vietinbank Branch 7 said “Our rivals like Vietcombank, BIDV, HSBC, Bangkokbank they are hungry to steal our talentive staffs, because you know, in this business relationship with customers is vey important, and those senior staff they have built strong connections with our core customers” Mrs Huyen – head of Retail department in Vietinbank Branch 3 pointed out that “ I realize that senior staffs at Vietinbank cannot balance between work and their life long ago, however it is really hard for us to ease the imbalance, because the level of tasks in this industry is overload and highly demanding”

After collecting and matching opinions of both sides including employees and employers, this is clear that rising numbers of leaving junior staffs is not necessary to

be considered at a symtom because the employers do know about that and they accept that as a normal fact What should be considered as a symtom is the rising numbers of leaving junior staffs at credit department only, because they account for 80% of bank revenues and profits Those highly-skilled personnel mean too much for a company or

a bank in the financial industry, because this industry demands really high on an officer Therefore, losing them is definitely a serious problem which can lead any institution in the industry to pay a fortune

2.2.4 High turnover rate among senior staffs at credit department

resigned employees

According to Ingram1 (2017), turnover rate expresses the rate that employees leave job in a company and are replaced by new recruits Reasons of high turnover rate mostly related to employees dissatisfaction with the job that includes long working hours, low pay, poor working conditions or not enough benefits (May, 2017)2

“Employee turnover rate” refers to the percentage of employees who leave a company during a certain period of time Three numbers are used to calculate turnover rate that include the number of active employees at the beginning, and at the end of period, and the number of employees who left during the period (Pavlou, 2017)3

In the case of Vietinbank, turnover rate in 2015 is 16,8% and 16,9% in 2016 If we narrow down to turnover rate in credit department only, it is extremely high, which is 21,8% in 2015 and 21,6% in 2016

Because of our finding that not junior, but senior leaving is the issue that employers put attention to, so we decide to dig into details numbers of senior credit officer at Vietinbank who decided to leave, and the figures are shown below:

No of senior credit officer

Total senior credit officers 3158 3340 3724 3040 3758 24%

No of senior credit officer

It can be told that turnover rate for senior officers at credit deparment in Vietinbank increase gradually over years, from 17,3% in 2015 to 18,4% in 2016, and it can be considered as high turnover rate because it is higher than the industry average, which

According to Woods (2017)4, impact of turnover on a company includes difficulty of filling the position, the amount of training and specific costs such as recruiter fees or advertisements Woods (2017)5 also expressed that turnover costs could be both direct and indirect Direct turnover costs include the costs of hiring and training new employees to fill the position Indirect turnover costs include lost sales or customers that lead to decreasing profit of the company So, based on the statistics that was collected about increasing disappointment among customers, high turnover rate at Credit Department should be consider as a serious symptom at Vietinbank

2.3 Symptoms 2: Increasing complaints from customers

During the same period that employees resign tremendously, there are also a strong growth in number of complaints letters/email from customers, which was collected from the Contact Center of Vietinbank:

Low – Notice of small mistakes with opinions that

helps Vietinbank to improve in the future

Medium – Highly disappointed with services

provided and was shared with a criticized manner

High – Aggressive manner, with high probability to

switch to another bank and/or even threaten to sue

Vietinbank or publish that issues on a newspaper

More importantly, not only the number of complaints but also the level of complaints

is increased There is a trend that customers’s attitude change from supportive to angry, showing a high chance that they will attack Vietibank image on the media It can be shown that from 2014 to 2016, number of complaints marked at “high” rising from 674 to 1546, which is equivalent to 129% rise whereas total number of complaints only rise 13,5% during that period

Fornell6 (1988) has demonstrated throughoutly his study about customer complaint management He also stated that customer’ complaints can directly affect company’s sales figures Since consequences of customer complaints is prominent, customers rising complanints should be taken into consideration as another symtom

CHAPTER 3: PROBLEM IDENTIFICATION

3.1 First round interview: Interview with “people around the problem”

3.1.1 Interview with resigned employees

We then conduct in-depth interviews with 15 seniors from credit department (which can be either retail/SMEs/Conlogmorate/MNCs) to figure out the reason behind their leaves Results are much varied, however the three most potential reasons are: unclear career path, work –life imbalance and poor cooperation between departments

Interviews were conducted with some simple questions which centralized on the resignation of these employees, like “What do you think is the main reason that result

in your leaving at Vietinbank?”, or “ How long does it take for you to reach the decision to leave Vietinbank?” and “ Will you still work in the banking industry and why?” We try to make those interviews natural as much as possible in order for the interviewees to be willing to share the most of their thoughts Interviews are taken at break time, mostly at lunch or later in the evening when the volumn of work is the lowest

80% of the responses pointed out that it takes on average a year before they came to the decision that they have to leave the institution “Leaving a banking corporation with high reputation like Vietinbank at a middle stage in life after 5-10 years working

is not an easy decision”- said Mr.Duy, a senior credit officer at Corporate Department

in Vietinbank Branch Thu Duc with 8 years of experience However, surprisingly over 63% of the respondents showed a willing to work for another banking institution Mr Hung – deputy head of retail department in Vietinbank Branch 6 shared his point that

“ I have to admit that Vietinbank is very well-known in the industry and it does pay

me well, but I think I can work less but receive the same benefits at another bank, Vietcombank for example.” This figure does raise a question whether Vietinbank has any disadvantages that make it looks less attractive among other banks in the industry And if it does happen, then it is a serious issue which demands more attention to be put into

Of 15 seniors who were interviewed: Three have a problem with their career path, or more precisely, their opportunites to be promoted Mr Tuan Anh – a 5 year experience officer at FDI department in Vietinbank Branch 1 said that he has a small chance to

be promoted in Vietinbank, he can not see any clear future for himself at Vietinbank

in the next 3 years so that he doesn’t have any choice but to leave Three think that they can not balance between work and life Mrs Dieu Anh – deputy head at conglomerate department in Vietinbank Nam Sai Gon Branch said desperately “ It is extremely hard for me to take care of my family and my children when I came home late everyday at 8pm I eventually have to work with clients, or participate in an urgent meeting at weekend My husband seems not quite happy about that!” Four express their disappointment in the cooperation among departments in Vietinbank, showing that they feel very stressful when dealing with other departments, in some situations there are even quarrels Mrs Thu Trang – head of SME department in Vietinbank Branch 4 sadly expressed her thoughts: “ Sometimes I have a feeling that we are rivals, not colleagues, everyone stands on their own situation, without sympathizing for others, and most importantly clients I must say that I am very disappointed, because

I really want to support them.” Other minor opinions varied a lot from low salary, low empowerment to not supporting direct mangers…

Up to now, we have an initial picture on what employees think about their leavings at Vietinbank, we then explore further to gather more perspective of “people around the problem” – which is customers

3.1.2 Interview with customers

Interviews was conducted with 10 customers, each interview were conducted at a different Vietinbank’s branch in Ho chi minh city to find out what were the most prominent causes which were lead to their rising number of complanints Surprisingly,

7 out of 10 customers said that it was the credit officers that getting them more

impatient Mr Huy – one of the most loyal customers who has deposits at Vietinbank over 10 years said “ It was 2 years ago since I have to work with a newly graduated officer with no experience at all Each transactions took me twice as long as before”

Mr Loan – director of Phuong Dong Plastic Company express her disappointment with the SME Department at Nam Sai Gon Branch “It was Mr Quang who working smoothly about granting credit facility to my company, now he has moved to Vietcombank and since then problems begin with my facility, the new officer asking for too much documents and he charges me too much fees Most importantly, interest rate is much

more higher than other banks I am considering moving to Vietcombank because I like working with Mr Quang as before!”

It is likely that rising complaints from customers is a consequence of the shut down trend of credit department’s senior officers as was stated in the first symptom Now we can easily link the two symtoms, that one symptom does actually lead to one another,

as a cause – effect relationship rather than a supportive or substitution relationship

3.2 Second round interview: In-depth interview with “problem owners”

After gathering information of “people around the problems” such as senior credit officers and customers, we found out that it is crucial to conduct another in-depth interview with the employers – who are mainly responsible for the process of recruiting, managing and evaluating staffs The interviews must be conducted at a broader scope than the small interviews to classify between juniors and seniors as before There are total 18 persons who took part in the interviews, who are: 8 head of credit departments

at 4 different segments (retail, SME, FDI and Conglomerate’s banking), 4 branch deputy directors, 2 branch director, 1 head of HR at Head office and 3 Head of HR at Branches Each interview was taken place in the private room at the working place, mostly at the employer’s own room and was taken for around 30 minutes All of the interviews was conducted at a formal manner, providing that the employer does understand deeply about the importance of the interview, which can affect tremendously on the way Vietinbank human resources practices will be transformed in the future

They were interviewed about how they think is the main reason behind the resignments

of employees, how extreme the issue of senior credit officers’s resignment is and how

it affects on the daily operation of Vietinbank Results are much different from the employee’s perpectives, employers also points out three most prominent issues which they think might have lead to the high turnover rate of senior credit officers at Vietinbank, which were unsupporting human resources policy, unapproriate performance evaluating system and slowly–updated infrastructure A few opinions somehow similar to that of employees including work-life imbalance, direct managers, collaboration between departments……

Mrs Xuan – director of Branch 3 expressed her feeling over the resignments of senior credit officer “They demand a fast moving corporation which can absorb the newest trend in the world just like foreign commercial bank However, they have to bear in mind that Vietinbank has 60% shares of the government, every steps that we move must be approved by the government in order to be executed!” On the other hand, Mr Hoang – head of conglomerate banking in Ho Chi minh City shared that “the performance evaluating system show a lot of weaknesses in term of classifying top employees, because of the fact that determine the weight of each constraints in KPIs evaluating is not relevant.” Moreover, Mrs Nga – head of human resources department

in Bac Sai Gon branch said that “ I have to admit that our human resources structure as well as policies are not helpful for the employees, I have tried my best but many of the needs of employees can only be sold by the head office, which will take too long to solve, they even have to send a letter by post office and wait for nearly a month to be replied That’s such professional and distractful process!”

Combining results at many perspective including employees, employers and customers, we have found many potential problems which may lead to the high turnover rate of senior credit officers at Vietinbank However, due to the variation of the opinions gathered from the interviews, it is unable to clarify what is the real problem that we need to put more consideration into Therefore, more studies must be taken at further steps, adapting theories and literature reviews At certain, we can summarize our results by an initial cause – effect map as below:

Initial cause-effect map

3.3 Potential problem: Low employee engagement

After review many papers with these key words related to symtoms and potential problems that we have found earlier, such as : “high turnover rate”, “human resources policy”, “work – life imbalance”, “slowly updated infrastructure”…… We came up with a theory about “employee engagement” Due to the fact that low employee engagement does actually lead to high turnoverate, and it also has some similar causes

to what we has explored before after conduct in-depth interviews, therefore we decided

to choose low employee engagement as our central problem

CHAPTER 4: APPLYING LITERATURE CONCEPTS: AON HEWITT’S MODEL

OF EMPLOYEE ENGAGEMENT TO JUSTIFY THE CENTRAL PROBLEM

4.1 Employee Engagement Models

Amplifying the concept of employee engagement, researchers like Kahn (1990)7, Maslach et al (2001)8, Robinson et al (2004)9, Saks (2006)10 and Aon Hewitt (2011)11 built different models that categorically clarified about the various sides

of employee engagement

4.1.1 Kahn’s Model

Unappropriate performance evaluating system

High turnover rate of senior officers at credit department

Customer complaints

Dissupporting human

resources policy

Slowly-updated infrastructure

Poor cooperation between departments Work – life imbalance

Unclear career path

Kahn‟s model (1990) is considered to be the oldest model of employee engagement

His model accentuates that there are three cognitive drivers that are related to personal engagement and disengagement of work: meaningfulness, availability and safety (Figure-1.1) Kahn interviewed summer camp counselors and organizational members

of an architectural company about their moments of engagement and disengagement at work He discovered that, workers were more engaged at work situations that provided them more cognitive meaningfulness and cognitive safety, and when they were cognitively accessible

4.1.2 Maslach, Schaufelli and Leiter Model

Another model comes from Maslach, Schaufelli and Leiter on “Job Burnout” in 2001

In their opinion, six aspects of work-life leading to burnout and engagement: (I) workload (II) control (III) rewards and recognitions (IV) social support (V) perceived fairness, and (VI) values In their model, they argued that job engagement is associated with various characteristics like (i) sustainable workload (ii) feeling of choice and control (iii) appropriate recognition and reward (iv) a supportive work society (v) fairness and justice, and (vi) meaningful and valued work (Figure-1.2) It came to light that like burnout, engagement is expected to mediate the link between the six work-life factors and various works out-comes Further, they found out that job characteristics, especially feedback and autonomy, have been constantly related to burnout

4.1.3 Robinson, Perryman and Hayday Model

The model held by Robinson, Perryman and Hayday (2004) described engagement as

a two-way relationship between the employer and employees (Hewitt Associates, 2004) Their model was described in the research work entitled “The drivers of employee engagement”, saying that employee engagement is a optimistic attitude held

by the employees towards the firm and its values The model further identified that an engaged staff is one who is aware of business context and works with co-workers to

improve performance within the job, adding value to the organization The model articulates, the commitment of employees is possible when the firm continues to focus

on developing and cherishing the employees (Figure-1.3)

4.1.4 Saks Model

A chimeric model was created by Saks in 2006 in his research work on “Antecedents and Consequences of Employee Engagement” which take into consideration three basic sides of employee engagement: (i) the employees and their cognitive makeup and

experience (ii) the ability of the leaders to create a conducive environment that promotes employee engagement, and (iii) interaction between employees at all levels The researcher developed an evaluation process and showed the interconnection between three parameters: antecedents, employee engagement and consequences (Figure-1.4)

4.1.5 Aon Hewitt Model

Aon Hewitt model (2011) examines both the indivisible state of engagement along with the organizational drivers It states “engagement‟ as the state of emotional and intellectual involvement that motivates employees to do their best work.The model has

a global validation supported by over 15 years of research in the area of organizational psychology According to this model, engagement is an individual, psychological and behavioral state and the behavior of the engaged employees demonstrates positive outcomes in the business like customer satisfaction, boosted sales, and other positive extra role behaviours (Figure-1.5)

4.2 Applying Aon Hewiit’s Model on measuring Employee Engagement of senior credit officer in Vietinbank in Ho Chi Minh City

4.2.1 Why we choose Aon Hewiit’s Model?

Aon Hewitt’s Model of Employee Engagement is the most updated theory on this topic,

it can cover nearly all previous studies by itself Moreover, Aon Hewitt is the most

detailed study which clarifies six engagement drivers and twenty two antecedents that lead to employee engagement, most of them is similar to what we have explore after conducting several interviews so it is the most related theory to our study Another major reason why we choose this theory is that the model is well-designed and can be calculated easily without any obstacle

4.2.2 A broad survey on measuring Employee Engament at Vietinbank

based on Aon Hewitt’s Model 4.2.2.1 Sampling

Vietinbank has over 22,000 employees at the present, of which nearly 4,000 is senior credit officer; therefore due to the limitation of time and ability, we make a decision that

we will narrow down the scope of our survey to only senior officer in Ho chi Minh City

In Ho Chi Minh City, there are 24 branches so that in order not to be bias, we conduct a survey at each branch in Ho Chi Minh city to fully represent the nature of this geographic study At each branch, we send our survey to 10 persons, up to 7-8 persons response to our survey so it can be said that the responsive rate is pretty high of 70-80% The total number of valid responses is 175, which is far beyond our expectation

4.2.2.2 Form, time and location of the survey

Survey was conducted in the form of paper survey We designed a 3-pages of A4 full of

30 structured questions related to our topic of employee engagement in Vietinbank The reason why we didn’t choose online surveys is that it is really difficult to track if the respondents do actually response or not Another reason is due to the security of Vietinbank mail system: Vietinbank domain blocks all emails which link to strange websites, so we can get in trouble sending e-surveys to our targeted viewers

Because our focus is on exploring what people think about themselves working in Vietinbank, attitudinal questions was being used Each questions are designed in the form of vebal rating scale questions, from strongly disagree, disagree, slightly disagree,

to slightly agree, agree, strongly agree There are total 6 levels of attitude over a specific aspect of Vietinbank which was proved by Aon Hewitt that it does affect employee engagement of a company All of the questionnaire are written in Vietnamese because

it helps to convey throughout the content of the survey The sample questionnaire can

be seen in the appendix

We sent out 10 self-completion questionaires at each branch in Ho Chi Minh city and waiting for them to complete at the same day There are total 24 branches of Vietinbank

in Ho Chi Minh city so it took us approximately a month to complete all the surveys The time frame that surveys were conducted was 4-5 pm beacause the volumn of work load at that time is the lowest so it is easy for us to disturb the employees

4.2.2.3 Methodology

According to Aon’s Hewitt study, there are 6 engagement drivers which directly lead to employee engagement, which are: brand, leadership, performance, company practices, the basics, the work Each driver also has many organizational antecedents, such as

“brand” is composed of reputation and corporate responsibility, “the basics” is

composed of work environment, job security, benefits and so on Employee engagement

at the same time will lead to three engagement outcomes such as “say”, “stay” and

“strive” These three outcomes will eventually transfer into business outcomes The concept of Aon’s Hewitt is desmontrated clearly by the figure below:

Brand Corporate responsibility

High level leaders Direct managers

Career opportunities Learning and development Performance management Rewards and regconition

Collaboration Empowerment Work tasks

Salary + benefits Work life balance Enabling infrastructure

Talent and staffing

In order to fully reflect the nature of Aon Hewitt study, we create 30 questions in the sentence-like-style Each person participated in the survey must response on each sentence based on the level that they agree with that sentence 30 questions are divided into 15 organizational antecedents, of which 2 to 4 antecedents are related to an engagement driver Therefore, 30 sentences can cover all six core engagement drivers that lead to employee engagement Detail of 30 questions is as below:

Engagement

Outcomes

Engagement Drivers

Corporate Responsibaility Vietinbank always shares society responsibility

with society

events/programs/activities which contributes to the society like charity, building

children/elderly….and those activites have gained recognition from the society

Company Practices

Enabling infrastructure Vietinbank is fully – equipted with infrastructure

and working tools assisting employees efficiently

Policies and procedures of Vietinbank has supported employees tremendously in term of achieving general goal of the bank

Talent and staffing Whenever I have any confusion or I want to dig

into human resource policy, I know clearly where I can gather that information or which department I can contact

Human resources’s policy is updated oftenly and matched with reality as well as employee’s demand

STAY

Leadership High-level Leaders Leaders pointed out clealy the direction for the

future of the bank

Leaders made appropriate business decisions Direct Manager My direct manager always supports me to

complete works well

My direct manager has recorded my working performance and effort

The Basics Salary + Benefits Monthly net wages at Vietinbank (excluding

incentives according to performance) is sufficient for me to afford my current living condition

I am satisfy with basic benefits at Vietinabank such as annual leaves, social insurance, health insurance, pregnant/sick/birthday/funeral grant Work/life balance Working environment at Vietinbank ensures me

to balance between work and life

I can manage my workload

STRIVE

Performance Career Opportunities I know if there are any career opportunities

which will coming to me at Vietinbank

At my current working position, I feel that there

is enough opportunities for me to develop and have a higher promotion

Learning and development Vietinbank supports the process of educating and

developing employees

Vietinbank has provide me opportunity to handle different types of task so that I can learn new skills

Performance management At Vietinbank, the method of managing

performance has encouraged me to contribute the most to the success of the bank

According to the current performance management procedure, grading employees is fairly based on their performance

Rewards and recognition My performance is greatly affect my income

I am fairly recognized with my contribution and achievements

my departments and among departments at Vietinbank

Information and experience sharing between departmentsand individuals is really good Empowerment/autonomy At work, my points of view and personal opinion

is somehow being paid attention to

I can propose my opinion relating to my scope of work

experience

My tasks is appropriate with my future career expectations

Each response will be marked a score from 0 to 100, we named it engagement score

We use this score to calculated the score of each antecedent by dividing the total score

to the number of respondent, and thereafter, the engagement score of Vietinbank Each response will be marked as below:

4.2.2.4 Central problem: low employee engagement

After collecting response and doing some small calculations, we came up with surprising results about Vietinbank human resources issues, which can be shown in the table below In general, engagement score of senior credit officer in Ho Chi Minh City

in Vietinbank is 66%, which is a little bit higher than that of South East Asia (which is 63%) and the World (which is 60%) However, the score is somehow lower than Vietnam engagement score in average (69%) and extremely low compared to the Top Employers of Asia Pacific – APAC (80%) It literally means that employee engagement

in Vietinbank can be considered as “low” as compared to other companies in Vietnam and “extremely low” when comparing to the top players in Asia Pacific

Av era

ge Sc ore

Antecede nts Average Score

Engag ement Score

Brand

Vietinbank is very well-known in

72,5

66

Vietinbank is referred as the best working place for those who have the same skills and experience as