The poor motivation of store manager level at pizza hut vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- Dinh Viet Hien THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM MASTER OF BUSINESS ADMINI

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Dinh Viet Hien

THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT

VIETNAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City - 2017

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Dinh Viet Hien

THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT

VIETNAM

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Dr Nguyen Phong Nguyen

Ho Chi Minh City - 2017

SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED

FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION

The thesis proposal title: THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM

Student Name: Dinh Viet Hien

Supervisor: Dr Nguyen Phong Nguyen

 Meet requirement for submitting

 Not meet requirement for submitting

Table of Content

Executive Summary 1

1 Background 2

1.1 Company background 2

1.2 Symptom 4

1.2.1 Symptom Analysis 4

1.2.2 The Importance of Symptom 6

1.3 Methodology 8

1.3.1 Qualitative Research 9

1.3.2 Quantitative Research 9

1.4 Initial Cause – Effect Map 10

1.5 Updated Cause – Effect Map 14

1.6 Central Problem Validation 18

2 Problem Justification 22

2.1 Problem Definition 22

2.2 Problem Existence 22

2.3 Problem Importance 25

3 Causes Validation and Solutions 26

3.1 The Real Causes of Central Problem List 26

3.2 Central Cause Validation 27

3.3 The Set of Alternative Solutions 30

3.3.1 The Frist Solution – Employee Recognition Workshop 30

3.3.2 The Second Solution – Recognition Gift Program 33

Appendices 36

References 52

Executive Summary

Employee’s turnover rate is one of business challenge in organizations The high turnover rate has negative impacts on business performance such as more expenses to recruiting, increasing people cost, bad company reputation, reducing revenue as well profit and so on In Pizza Hut Vietnam (PHV), the turnover rate of store manager level has increased significantly from 2014 This rate is non-stopped increasing with 17.2% at June 2017 that is highest since PHV join to food and beverage market in Vietnam in

2007 This leads to PHV’s low performance in terms of key performance indicators in consecutive three year such as decreased balance score card, unstandardized customer satisfaction and increased people cost for recruiting and training Through this research, some potential problems of turnover rate were pointed out such as uncompetitive compensation package, unavailable career development opportunity, job stress and poor leadership One of these potential problems is poor job motivation that has been argued as

a central problem of high turnover rate at store manager level at Pizza Hut Vietnam Ltd., Poor job motivation in this researcher is presented in terms of ineffective supporting and coaching as well as weak recognition and poor communication The importance of job motivation improvement also demonstrated through exploring its consequences to individual and organizational performance

1 Background

1.1 Company background

Pizza Hut is one of brand franchising from American YUM! Brand It is the best restaurant chain with numbers of stores as well as sales revenue on over the world Pizza Hut is well-known with traditional pizzas following American style along with auxiliary products as pasta, fired chicken wing and so on to serve diversified customer’s needs Besides, Pizza Hut has been operated by standardized policies and procedures to maintain high quality of products and service Vietnam’s economy has grown rapidly since the country has implemented the market economy and the opening-up policy In alignment with globalization and internationalization, social conditions also have some changes One of these changes is Vietnamese’s eating habits With the entrance and dramatic development of Western style fast food in Vietnam, local Vietnamese have more choice for eating out It’s a fact that Vietnamese, nowadays, have a tendency for gathering and eating out together With a large and young population (Figure 1), Vietnam is perceived

as a potential market for restaurant business developers Brands such as KFC, Pizza Hut, Lotteria, and Jollibee have been pioneers in the Vietnamese market Pizza Hut developed

in Vietnam by International Food & Beverage Holdings (Vietnam) and Jardine Restaurant Group – JRG (Hong Kong) in 2007 as one of franchises from Yum! Brands, Inc

(Figure 1: Large Youthful Population, Vietnam Population Organization, 2016)

10-19 years

20-29 years

30-39 years

40-49 years

50-59 years

60-69 years

70+

years

Large Youthful Population

This is the world’s largest restaurant company in terms of system restaurants with over thirty nine thousand restaurants in more than one hundreds thirty countries and territories The Company's restaurant brands – KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories In January 2011, JRG has taken ownership and fully operated PHV With its strong brand and powerful financial capability, PHV has been leading the pizza market segment in the domestic fast food market (Figure 2) In December 2014, the chain has had totally fifty stores in Hanoi,

Ho Chi Minh City and other provinces The Company’s vision is to be the leading pizza restaurant chain in Vietnam offering the best pizza at affordable prices and great services

in a warm, friendly and comfortable environment At the presence, Pizza Hut Vietnam (PHV) located with more than 57 stores and more than 2,200 employees in nationwide

(Figure 2: Pizza Hut Vietnam leads the CDR market in store count, APM PHV 2014)

1.2 Symptom

1.2.1 Symptom Analysis

The employee’s turnover rate was defined as how many new employees were hired

to replace the resigned staff (1) According to this definition, turnover rate only was counted when the replacement was successful due to hiring of new employees Chikwe (2) has another definition when employee’s turnover rate can be briefly described as how fast the employers recruit and lose employees However, the above definitions have not yet reflected gap of numbers of resigned employees and to be hired new ones in case replacement and resignation employees amount are not approximate

Henry (3) defined the employee’s turnover rate to be the ratio of the numbers of organizational members who left during the period being considered divided by the average numbers of people in that organization during the period In practical, this rate is calculated basing on different principles to serve business needs of each organization such

as voluntary turnover, involuntary, retirement, internal transfers

In PHV, the employee’s turnover rate has been calculated by the numbers of resigned employees who had the employment length at least seven days from on boarding date divided to total of employees in the same a period and level

𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒 ′ 𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒 𝑟𝑎𝑡𝑒 =A (Numbers of resigned employees)

B (Total of employees)Including:

A = Leaving date – Service started date +1 (It is only counted when it is great than or equal to seven days)

B = Total of employees at times the turnover rate to be calculated

From 2014, PHV has faced with the high turnover rate of store managers The PHV’s headcount report showed that the turnover rate of store managers have increased from 18.4% of 2014 to 27.5% of 2016 and 17.2% of June 2017

This report also analyzed about this rate and only focuses on store managers who have from four years working experience in PHV They have much experience not only technical skills but also management skills to operate stores in order to achieve sales targets With current career roadmap in PHV, a store manager spends at least 05 years to perform well and to be promoted to store manager (from entry level as team member to store manager) Therefore, PHV expenses many investments to develop store managers who have full capability to handle all tasks in store

On other hand, store managers in PHV were approached by competitors Through the exit interviews and surveys to be conducted by the HR Department, these reports

showed that almost the store managers who left PHV and joined competitors 36.17% of the resigned store managers have worked for direct competitors (Direct competitors are defined as brands have the same products and service with Pizza Hut as The Pizza Company, Domino, Pizza 4P, Al-Freshco…) 51.06% have worked for indirect competitors (Indirect competitors are defined as brands run business in Food & Beverage industry such as KFC, Lotteria, Jolibee, Mc.Donald, Circle K, Family Mart…)

1.2.2 The Importance of Symptom

The negative impacts of the high turnover rate are reflected by key performance indicators from 2015 to 2017 such as CER, CMS, GES and BSC

product process in store

entire system in store such as machine, warehouse, and facility

surveyed by unnamed customer to experience service in store and evaluate

calculates revenue, cost and other expense

Standard - 100%

 Recruiting and Training Expense: This is cost to be spent for recruiting as well as training process such as job posting, headhunt service, training coast and other

expenses

Additionally, the numbers of employees at each store is not equal to norm to ensure enough staff in a shift This leads to each employee must work over time more and increase people cost

Store managers take responsibility to control these key performance indicators in line targets These indicators reflect the performance of store Therefore, to achieve these

targets requires store managers to spend time, capability to operate effectively To meet sales targets, store managers have acted as an important role to achieve the best performances through delivering good products and customer services They take responsibilities of sales increasing, people cost controlling One of characteristics of job is

to serve customers day-by-day even weekend and holidays Therefore, store managers usually have to face with pressure of working time arrangement in order to either gain objectives or spend time for their personal life Over-time working happens frequently during marketing campaigns period when people are under various pressure (e.g they must run with maximized capability to attract customers for competition such as local store marketing, trade zone activations and so on) These activities are going on continuously Additionally, management level also control quality of products which is complied strictly with legal policies as food safety, stock management and discarded process These procedures are complicated and required them perform carefully Only a small mistake, it also makes them face with penalties Besides, revenue is one of the biggest challenges in daily operation Target sales are planned with high level to not easy achievement They always find all ways to offer potential customers for revenue increasing

1.3 Methodology

There are two methods in this research to be qualitative and quantitative research The underlying research philosophy is also a key influence in the choice of research method (4) Therefore, both methods are applied to ensure that this research reflects and measures realistic information with research’s purpose Qualitative research is primarily exploratory research It is used to gain an understanding of underlying reasons, opinions and motivations (5) Additionally, it also provides insights of problems which are premise

to develop hypotheses for quantitative research The questions in qualitative research often begin with WHAT – WHY – HOW to help researcher find out a lot of information

to clarify research questions

1.3.1 Qualitative Research

The beginning of research, researcher uses qualitative research through interview guide to make a framework for interview The interview guide helps interview process save time and explore necessary information completely Therefore, the interview guide is standard for consistency The questions of interview guide are considered to reflect closely for company’s situation After that, researcher conducts in-depth interview with four store manager who left in PHV This is opportunity for researcher to ask deeper as well as respondents feel comfortable to answer following their opinions These feedbacks are useful data to help researcher understand clearly about factors impact on turnover rate The four interviewees have length of service in PHV at least 6 years They are management level from 28 to 32 years old and join into PHV from staff level The questions in in-depth interview are focused on causes of resignation In interview process, researcher also asked further to understand deep into their opinions that avoid misunderstanding and perceptional view of interviewer All interviews are arranged and share purpose of interview in advance

However, questions are kept confidentially to ensure that no any preparations prior

to interview happen They are objective and reliable information During interview process, questions along with answers are taken notes and write to transcripts to reflect information completely and accurately Consolidation of data through transcript helps to analyze and classify information following research questions This is quite important because there are causes need to analyze carefully to avoid overlap All causes are classified as schemes to give out achievable recommendations

1.3.2 Quantitative Research

After finding some main points about causes which impact on turnover rate, researcher conducted quantitative research through a questionnaire to collect numerical data for ranking the most significant those factors for solutions Quantitative method is explaining phenomena by collecting numerical data that are analyzed using mathematically based methods in particular statistics (6) In this research, researcher used questionnaire as popular and simple way to get numerical data from respondents Each questionnaire

PHV’s direct competitor, sales bonus is paid as percentage of level of target achievement Additionally, meal allowance is 18,000 VND per day which is too low with current living expenses The another reason is he worked as a store manager during five years from

2011 and he have no communication about his promotion at PHV and direct competitors approached to offer higher job title as well as better compensation package One more reason of leaving, he lacks of timely coaching and supporting from line manager (Area Coach) due to the far distance

Ms Trang and Ms Anh also have same reasons with Mr Thai However, Ms Trang added further about her leaving reason when mentions to supervision skill She often has opposite views with line manager, when she strongly believes that she understands clearly about her store’s situation to make decisions Therefore, she did not get supporting from line manager She shared about bias management when line manager evaluated her performance is level 3 of 5 (medium) in 2016 though her store met sales target with 102% Additionally, her line manager also changed directions continuously which lets her cannot follow Besides, Ms Anh said about lack of recognitions from line manager When she gets targets which are required by line manager, almost she wasn’t recognized timely even no recognition She also share a sample that she received a recognition card from line manager after the monthly management meeting without on meeting which should to be acted to recognize her achievements

Ms Lien mentioned about heavy workload as one of her leaving reasons She said that her store is at mall, so sales volume depends on the numbers of customers in mall Sales revenue only increases at weekend or holiday while sales targets are high Therefore, she must face with shortage of employees to run store’s operation She has to

in charge many tasks not only tasks of staff such as cleaning, serving but also take accountability of manager’s role

Five causes of high turnover rate are recorded through face to face interview with

four store managers consisting of (1) Uncompetitive monetary compensation is paid to

store managers in terms of low base salary and allowances, inadequate bonus and

incentive; (2) Heavy workload is one of pressures to let store managers feel stress and can

consists of 27 questions and to be applied the same to all respondents It is useful to help researcher collect data on large scale The questionnaire is designed basing on findings about factors which impact on employee’s motivation which was justified as central problem of high turnover rate in PHV The respondents will select level of agreement on scale from 1 – strongly disagree to 5 – strongly agree The sampling is selected following purposive sampling to align the purpose of research Purposive sampling is suitable in this research because it is a non-probability sample that is selected based on characteristics of

a population and the objective of the study Purposive sampling is also known as judgmental, selective, or subjective sampling (7) For detail, the sampling is selected following a homogeneous purposive sample It is selected for having a shared characteristic or set of characteristics In this research, the sampling is store managers who have highest position in store Therefore, questionnaire is surveyed with fifteen store managers who have same role and responsibilities with respondents of in-depth interview The data will be analyzed with average score for importance level ranking

1.4 Initial Cause – Effect Map

To identify causes of this high turnover rate, the face to face interview is conducted with four store managers who left PHV from 2015 to 2017

Leaving

Length

of Service

1 Quoc Thai 32 Male Store Manager PHV Can Tho 2017 9 years

2 Thuy Trang 28 Female Store Manager PHV Sky Garden 2017 6 years

3 Thuy Anh 29 Female Store Manager PHV Ngo Gia Tu 2016 8 years

4 Hong Lien 28 Female Store Manager PHV Maxi 3/2 2015 7 years

Mr Thai said that about his reason of leaving low salary He showed that salary of same his position of competitors at Can Tho province is higher than around 20% of which

is paid in PHV He also shared further that Balance Score Card (BSC) bonus and incentives is not adequate with his achievements For detail, sales bonus is paid as a fixed amount when his store gets from 85% of sales target while at the Pizza Company that is

not cover in all tasks in daily operation It comes from to shortage of staff and many tasks

in working shift; (3) Unavailable career development opportunities challenged retention

of store manager level in PHV The limited higher positions as Area Coach have them

make leaving decision to seek better chances in their career development; (4) Lack of

recognition impacted on working motivation of store managers They said that their

contributions are not recognized even though to be ignored by line managers; (5) Poor

supervision is also a factor to impact on turnover rate of store managers through

subjective performance appraisal, ineffective supporting, and poor communication All cause is reflected in initial cause – effect map as below

HIGH TURNOVER RATE

Uncompetitive monetary compensation

Low base salary with competitors

Lower than

20% of

competitors

Inadequate bonus and incentives Fixed bonus

Low meal allowance

Heavy workload

Shortage of staff in shift

Limited budget

of labor cost

Many tasks in a working day

Unclear career path

Lack of recognition motivation

Untimely recognition

Weak motivation

Poor supervision skill

Subjective evaluation

Poor

communication

Difficulty to follow up

Change

directions

cuntinuously

Ineffective supports

Emotional decisions

The initial cause – effect map

1.5 Updated Cause – Effect Map

However, if cause – effect map only bases on data from interview, there is no overview all causes of turnover rate in PHV That is reason why researcher inputs further causes by reading studies, articles and researches to supplement and fulfill cause – effect map Through literature review, job stress is also mentioned as a more cause to impact on turnover rate This cause is a common one in F&B industry due to characteristics of customer service Therefore, researcher supplemented to the cause – effect map along with causes which recorded in first face to face interview Basing on the initial cause – effect map and literature review, researcher conducted again interview to justify information The second interview was conducted with four store managers in first and got further information as well as get confirmation from Deputy HR Manager in PHV for final cause – effect map After interview, researcher updated for the final cause – effect map The high turnover rate of store manager level in PHV comes from 04 main causes:

Uncompetitive Monetary Compensation – Monetary compensation has been

defined as a way cash or equivalent to pay employees for their service from employer Monetary rewards have negative effect on employee turnover This reward helps to raise job satisfaction and likewise suite for minimizing the intent to leave the job (8) Additionally, monetary compensation has an important role to retain employees in organization (9) Shamsuzzoha and Shumon (10) stated that low monetary compensation

is one of reason leaving of employees It means that employees will consider leaving current organization to move another with higher salary Uncompetitive monetary compensation in PHV is mentioned in terms of low base salary with competitors as well

as bonus and allowances scheme Almost respondents acknowledged that they were paid with inadequate compensation for their contributions while many competitors have approached to attract them with better package

Unavailable Career Development - Career development opportunity is defined in

terms of the movement of a person to higher level position in the organization where they higher job title, salary and empowerment Masdia (11) defined career development as there assignment of an employee to a higher level job within an organization When

employees perceive no growth for future or desire to advance within the organization, they have no reason to remain in the current work situation If employees are not properly promoted, they will leave the organization (9) Currently, PHV built up a career road map for Restaurants Division This road map showed progress for promotion cases through criteria to certify qualification of employees It is also a tool to plan successor for employee retention However, it is effective with only team member level due to no limitation of headcount for this level At the same time, to promote from store manager level to area coach level is very difficult Total headcount for area coach level is only 09

in nationwide Therefore, the promotion just happens when anyone leave for replacement

or business’s expansion

Job stress – Job stress has become a major cause of turnover rate in the

organizations leading to loss of employees (12) Job stress is one of causes of the job dissatisfaction and leads to high turnover rate There are many causes of job stress as heavy workload, unsafe working environment, and frequent overtime working etc From

an outcome perspective, the job stress produces behavioral outcomes that include decreased performance or even withdraw behavior The psychological outcomes result in job burnout directly (12) The balance between work and life is another source of stress reducing Hsieh and Eggers (13) summarized the characteristics of hospitality work, such

as long working hours, shifts on weekend and stressful working condition (13) These characteristics left hospitality employees limited time for other non-work related issues, especially family activities As a result, the imbalance between work and life created negative issues, for instance, dissatisfaction with personal life, marriage and family The more the conflict exists, the higher the turnover rate will be (14) Such work-life conflict was proven to be one reason for turnover Heavy workload is another factor to increasing job stress In F&B industry, employees must face consequently heavy workload because they must take caring standards, sales target, and customer satisfaction Overloads in workplace has been cited the main causes of job stress and let employees leave their job (15) Workload has significant impact on the performance of employees The heavy workload extend low performance of employees, increasing job stress and burnout and

promote turnover rate (16) In PHV, store managers must work overtime frequently on holiday, weekend at least 02 hours per normal working day and 03 hours in holiday They have not much time to spend to personal life and work under high pressure

Poor Leadership skill - The coordination between managers or supervisors in

terms of leadership skill with their sub-ordinates may create impact on employee turnover It depends on the employee’s satisfaction with their supervisors and also the communication skills of supervisors to handle their subordinates (9) Employees are trusted in, empowered how they manage their own time and outputs and they have access

to parts of the business previously reserved for management such as strategic, tactical information, and profit Decision making is a collective and interactive exercise that requires committed participation from both management and employee (17) This implies, are interested in sharing of organizational decision making Murthy underlined that employees want an environment where they can take pride in what they are doing and needs recognition as they are valuable for the organization (18) Leadership is a necessary skill to inspire and lead employees to follow up objectives A leader’s ability to influence

is based partly on his or her skill and partly on the motivation level of the individual employee (19) In other words, motivation is either positively or negatively affected by the experience an employee has within a given work environment and with his or her leaders (20) In PHV, store managers are lack of communication between them and line-manager to sharing as well as get supporting when they face problems in daily operation Their line-managers change directions continuously that let them feel difficulty to follow Almost requirements from line-manager are not stable that store managers can plan well for them They must take time to think how to achieve requirements from line-managers and then have to change to follow with new requirements Additionally, their line-managers seldom motivate as well as recognize when they get achievement They lose motivation to try more to get significant results The final cause – effect map is completed basing on analysis and justification data of literature review and interviews especially combination weak motivation as cause of poor leadership skill

High Turnover Rate

Uncompetitive monetary compensation

Low base salary with competitors

Uncompetitive bonus and allowances scheme

Inadequate bonus with performance

Low meal allowance

Unavailable career development

Limited higher position to promote

Lack of recognition

Poor communication between supervisor and staff

Ineffective supporting and coaching

The final cause – effect map

map

1.6 Central Problem Validation

The final cause – effect map showed some potential problems which impact on turnover rate of store manager level in PHV However, the limited resources do not allow solving all problems at the same time Therefore, the selection of the most significant problems is very necessary to ensure not only reducing turnover rate but also control targets for performance management

Uncompetitive monetary compensation – Researcher compared package

compensation of PHV with competitors and average of industry through salary survey to have overview for this cause Salary surveys showed that salary average of PHV is lower than competitors But it is not significant because almost store managers will consider carefully many criteria as position title, job scope and total rewards that they have to exchange when decide to move According to annual The Global Salary Survey by Robert Walter in 2017, the experienced candidates may get offers with salary increment about 25% when job jumping Therefore, the salary gap of PHV with competitors is not worth for their leaving decision

Additionally, total payment of store manager level as of June 2017 was compared with previous years to show a whole picture for budget controlling As of June 2017, this payment amount was about 14.8% that higher than the same period of 2015 and 2016

5,000,000

Besides, total payment of the first 06 months in 2017 accounted for 51% of total labor budget It means that budget is over with target According to the statistic of Ministry of Finance Vietnam, the inflation rate is around 4.15% of first 06 months in 2017 If there is

a comparison this inflation rate with salary increment rate of 2017 in PHV, the selection

of 5% will lead to over total budget which is planned at beginning of 2017 This is challenge to propose as well as implement to solve this problem

Unavailable career development – At PHV, career roadmap was built and applied

consistently for all models on over the world Therefore, the headcount plan is planned basing on model of store (Dine-in or Delivery service), cost of labor norm, sales target and so on An Area Coach must manage from 07 to 08 stores as standard Currently, PHV has around 55 stores in nationwide and 09 of Area Coach Actually, an Area Coach only takes responsibility about 06 stores Therefore, to promote a Store Manger to Area Coach

needs expand business in next years However, PHV has optimizing business performance in terms of reducing costs and maximize profit after big investments in long time since 2007 This is proved through narrow down number of stores from 57 of 2015

to 55 of 2017 and cost of labor decreasing from 14% to 12% in key performance indicators

Team

Member

1*

Team Member 3*

Shift Leader Trainee

Shift Leader

ARGM

Sr ARGM

RGM

Area Coach

• Fully attending Orientation within 14 working days

• Certified Part A of professional program

• Certified Part A of professional program

• Certified Part B or C of Kitchen or Service professional program

• Certified Part A and B and C of Kitchen or Service professional program

• Certified Service or Kitchen Professional review class

• Certified Get Read to Lead

• Certified Train The Trainer

• Certified Leading A Shift

• Certified Leading A Restaurant 1

• Certified Leading A Restaurant 2

• Certified Leading multi Restaurants

• Certified Part A and B and C of Kitchen and Service professional program

•Certified Service and Kitchen Professional review class

Professional Program (Dine-in)

• Part C: Customer complaints handling

Job Stress – The final cause – effect map showed that heavy workload let store

managers have to work overtime frequently They manage a lot of tasks in daily and have

no time to spend for personal life This is difficult to change because it is characteristics

of Food and Beverage industry not only Pizza Hut but also other competitors The time

management is a good tool to help them improve and arrange daily tasks but can not solve comprehensively workload issues

Poor Leadership Skill In Term of Poor Motivation – Through a survey is

conducted to assess satisfaction of store manager level The survey measured 06 criteria which researcher based on core values of operation culture at PHV to rank top issues that store managers pay attention for action plan in order to improvement Recognition and Build Know How factor are recorded with lowest ranking These criteria are showed in terms of weak coaching and supporting from line managers, lack of motivation and recognition, empowerment The 78.6% of store managers acknowledged that they do not get supporting as well as recognition timely They have no many opportunities to discuss and share difficulties in workplace Their managers only manage on result-oriented than coach how to deal with issues in operation process Moreover, the improvement leadership skill of store manager level is one of key performance indicators of Human Resource Department in two years of 2017 and 2018 Additionally, the budget of employee’s engagement activities and training workshop was approved in budget plan and use not yet so far All of these factors showed that the leadership improvement in terms of strong motivation is an achievable method to help PHV reduce turnover rate of store manager level It is not mean that the solving of this problem can enhance completely turnover rate in PHV However, this problem is the most achievable method

in current context of PHV on sides of cost as well as human resource

2.2 Problem Existence

Basing on the Associate Performance Appraisal (APA) report in 2016 of Area Coach Level, almost Area Coach was ranked at 03 of 05 levels due to low score of motivation skill at score 2.8 Although the financial indicators account for a significant weight due to nature of business but the people management indicators are also factors to assess strength of employer branding as well as level of employee’s satisfaction when talent management is one of the most violent challenges in labor market nowadays

As above problem validation, the employee’s satisfaction survey pointed out key findings of employee’s satisfaction which need to be improved as one of KPIs for business development Recognition (2.6 of 05) and Build Know How (2.2 of 5) factor are recorded with lowest ranking These criteria are showed in terms of weak coaching and supporting from line managers, lack of motivation and recognition, empowerment Through face to face interview, researcher asked respondents questions to share detail about reasons why they thought that their line-managers are poor employee’s motivation such as:

expected results?

Key Objectives % Weight Actual PR

(1 - 5) Final Score Ranking

Succession Training & Development 20% 3.0

Coaching / Motivation / Communication 20% 2.8

Problem Solving 20% 3.0

 How often you receive coaching and feedback on how to get even better at my job?

store?

contributions to business?

All feedbacks of respondents as recorded and reflected in the final cause – effect They acknowledge that almost line-managers seldom spend time to discuss with me periodically and change directions continuously without clear communication or explain reasons This leads to line-managers only manage with results-oriented but not pay attention to listen and support them when having difficulties Even though, store managers are proactive to approach line-managers to get advices, they also do not receive comprehensive directions for problem solving Besides, they feel their achievements are only recognized when it is significant contributions such as gain sales with 150% of targets Their line-managers only control on numerical figures but shortage of understanding how to they control and try to meet sales targets with resources are cutting down In their mind as well as Recognition Culture in PHV, recognition comes from exertions though it is a very small thing which their line-managers do not pay attention properly

2.3 Problem Importance

The effective motivation will lead to many positive consequences not only to

individual level but also company performance Employee Performance – The past

research showed the importance of employee’s performance on leader style as Ferris and Lim, 1969; Lowin and Craig, 1968.Accordingly, coaching positively impacts on individual as well as team performance Mink stated that coaching of leader contributes to the development of a employee’s performance by providing leadership that values and support learning and growth (26) Besides, Rowe demonstrated that leadership style is one of the key forces to improve not only employee’s performance but also organization’s one in terms of revenue, profit, growth rate, and expansion (27) Nowadays, the effective leadership is recognized as a stably competitive advantage in organization In PHV, low employee’s performance is represented in terms of low key performance indicators in

2016 performance appraisal such as cost, revenue and profit controlling The negative

impacts were showed in the previous sections Job stress and Resignation – Erickson, B

Shaw and Z Agabe in their research pointed out that along with impacting on job performance, poor motivation also influence to employee’s personal work and non-work life Their statement included consequences of poor motivation in terms of stress of work, insomnia, bad dreams, general fatigue and loss of concentration (28) These authors showed negative influences of poor motivation to subordinates in terms of emotional reactions, stress, lowered self-esteem and loss of confidence Poor motivation also creates increasing subordinate’s absenteeism and turnover In addition, absenteeism and turnover are likely to impact the entire organization through lower overall work quality and quantity, loss of organization-specific skills, and development of a dysfunctional company culture (29) The attrition rate in PHV increased from 18.4% of 2014 to 27.5%

The Consequences of Poor Motivation

Low Employee's Performance

Job Stress and Resignation

Bad Organizational Reputation