The poor experience in meal cost management in aeon mall viet nam

Potential problems Following the information are conducted from in-depth interviews with Head of Administration Department, team leader, supervisor and accountant, who are working and h

UNIVERSITY OF ECONOMIC HO CHI MINH CITY

International School of Business

-

Ho Thi Nguyen Thien

THE POOR EXPERIENCE IN MEAL COST MANAGEMENT IN AEON MALL

VIET NAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2017

UNIVERSITY OF ECONOMIC HO CHI MINH CITY

International School of Business

-

Ho Thi Nguyen Thien

THE POOR EXPERIENCE IN MEAL COST MANAGEMENT IN AEON MALL

VIET NAM

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Dr Pham Phu Quoc

Ho Chi Minh City – Year 2017

SUPERVISOR’S REPORT ON THE THESIS SUBMITTED

FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION

The thesis title: THE POOR EXPERIENCE IN MEAL COST MANAGEMENT IN AEON MALL VIETNAM

Student Name: HO THI NGUYEN THIEN

Supervisor: Dr PHAM PHU QUOC

 Meet requirement for submitting

 Not meet requirement for submitting

TABLE OF CONTENTS

EXCUTIVE SUMMARY 1

PART I – BACK GROUND INFORMATION 2

1 Company information 2

2 Company symptoms 3

PART II – PROBLEM IDENTIFICATION 5

1 Potential problems 5

2 Theory informs and define the central problem 10

PART III – CAUSE VALIDATION 11

1 Possible causes 11

2 Theory informs and determine potential causes of the problem 15

PART IV – SOLUTIONS 20

1 The money solutions 21

2 The money – free solutions 22

3 The recruitment new managers 23

PART V – ACTION PLAN 24

1 Plan A: Retain the current managers 24

2 Plan B: Recruiting the new managers 27

3 Comparison and selecting action plan 29

REFERENCES 31

APPENDIX 1: INTERVIEW GUIDE 33

APPENDIX 2: TRANSCRIPT 34

APPENDIX 3: SUMMARY OF TRANSCRIPT 53

APPENDIX 4: QUESTIONNAIRE 58

APPENDIX 5: SUMMARY OF SURVEY 60

EXCUTIVE SUMMARY

According to economist Milton Friedman, the main purpose of doing business is maximizing profits for its owners To do this, it is necessary to minimize the organization’s cost through cost management and controlling process If it has some issues in cost management, company’s situation will be failure to get business purpose This thesis provides an analysis and evaluation of current problem about the poor experience in meal cost management in AEON Vietnam Co., Ltd and to recommend ways of solving this problem

The thesis draws attention to the fact that the total number of employees has trend decreasing in 6 months early of Y2017 Conversely, the average cost per person for meal is increasing Further investigations reveal that there are three existing problems: lack of experience to control situation, the big gap between number of order meals and the actual meals and the increasing in cost for per meal Moreover, this thesis also finds out the factors appear to be the major causes of these problem in AEON Vietnam Co., Ltd

This thesis finds the prospects of the company in its current situation are not positive The major problems require further investigation and remedial action by management Based on analysis, some recommendations discussed include: how to retain experienced managers and setting up the other regulation to choose the industrial catering company

The thesis also investigates the fact that the analysis and evaluation conducted have limitations Some of the limitations include: the information is not provided nature and the reasons cause the problem are not known clearly nor the data limitations as not enough information is provided or enough detail i.e the other hidden reasons details are not known and the old employees, who leaf company already are not present to be invited the in – depth interviews

During its operation, AEON Group has kept the unchanging commitment to putting

“Customer First” AEON Group’s fundamental principles are the pursuit of prosperous and stable society and peace through the retail business Under this corporate accountability, AEON Group has won the customer’s trust widely and expanded more businesses not only within Japan territory but also in other countries in Asia for such a long period of time

AEON Vietnam Co., Ltd has been presented in Vietnam since 2009, at first under format of Representative Office (1st Dec 2009 – 10th Jul 2012) On 7th Oct 2011, with the approval from People’s Committee of Ho Chi Minh City, AEON had set up its Vietnam Company Limited to invest for construction, organization, managements and trading of modern shopping malls, General Merchandises Stores (GMS), Supermarkets

as a core business, and to carry out other business activities which links with import, export, trading, and researches Until now, the company has been developing with 04 the branches throughout Vietnam There are AEON Shopping Center – Tan Phu Celadon in Ho Chi Minh City, AEON Shopping Center – Binh Duong Canary in Binh Duong Province, AEON Mall Binh Tan in Ho Chi Minh City and AEON Mall Long

Bien in Ha Noi, total charter capital is 192,383,000 US Dollar and total registered investment capital: 204,648,000 US Dollars The number of employees in entire mall

is approximate 2,200

The internal structure one of the branch of company is showed in the graphic as follow:

Diagram 1 – Company structure of AEON Vietnam

2 Company symptoms

Meals for company’s employees has an important role It not only provides energy and helps them relax and increase their productivity but also is a part of employee’s benefit that employees are paid Therefore, the service meal for employees is always paid special attention by business owners of AEON In AEON, both of full-time and part-time employees have the right to get this benefit from company

Everyday, supervisors are responsible for counting and reporting the number of order meals to admin After that, leader will summary the figure and order to the industrial catering company Based on this number, the industrial catering company will prepare meals To control meal cost, AEON Vietnam gives the power to Administration Department to manage meal ordering progress and Accounting Department to record the meal cost A semi-annual, Administration Department will report the situation and result of controlling meals cost for Board of Directors and the other relavant departments In the meeting of the 6 months early of Y2017 about the cost management in company, the Head of Administration Department already mentioned

General Director

Head of Accounting Department

Head of Purchasing Department

Head of Legal Department

Head of Administration Department

Head of Sales &

Marketing Department

Team 1, 2, 3,…, N

Team 1, 2, 3,…, N

Team 1, 2, 3,…, N

Team 1, 2, 3,…, N

Table 1 – The average meal cost in 6 months early of Y2016 and Y2017 (The data was provided by

AEON Vietnam’s Administration Department)

Following the report of the Administration Department, it shows that AEON Vietnam has problem in 6 months of Y2017 in cost for employee’s meal Based on the comparision with 6 months early Y2016, the meal cost of Y2017 is higher than its Y2016 This increasing rate goes up to 87.44% Specifically, the total number of employees has trend decreasing in 6 months early of Y2017 Conversely, the average cost per person for meal is increasing The chart will show this trend as below:

Chart 1 - The changing in average cost per one employee in 6 months early of Y2016 and Y2017

(The data was provided by AEON Vietnam’s Administration Department)

PART II – PROBLEM IDENTIFICATION

1 Potential problems

Following the information are conducted from in-depth interviews with Head of Administration Department, team leader, supervisor and accountant, who are working and have responsibility for meal cost management about the fact of meal cost management situation in AEON Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien, there are many potential problems for this symptom that cause the increasing quantity and price of meal as below:

1.1 Lack of experience to control situation:

In the same period of Y2016, the situation is not like it in Y2017 In the same period

of last year, the cost for meal is suitable with it’s employees But in 6 months of Y2017, the meal cost is increasing although the number of employee trends of decreasing slightly The average cost per person is from 529,304.25 VND to 672,887.32 VND These figures are bigger than data of the same period in Y2016 The highest percentage of changing is up to 87.44% The current staffs do not have understanding and experiences to solve problem of Y2017 deeply And they have not had any previous experiences to solve when the problem happend There are not many managers who have enough ability and experience to control the increasing meal cost Following the view of Head of Administration Department, “the number of experienced managers in AEON is small,…the experience managers quit job more and more” and “the turnover rate is about 10% per year”

To solving this problem, the Human Resource Department has to recruit the new staffs who will be responsible for managing cost in the vacancy in company Because of this instability, the new employees have difficulty to find and solve the current problem which happend in the company now The new satffs cannot catch up with the the current staffs Futhermore, because of not using any machines to control the ordering, the process of calculating and forecasting meals for employees depends on the manual working of human absolutely As a consequence, it cannot avoid inaccuracy

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1.2 The big gap between number of order meals and the actual meals:

Although AEON Vietnam has the chief teams to cook the food for customers With the professional chief teams, there are many delicious and safety food that are sold in delicatessen But they are not responsible for cooking the meals for AEON’s employees The company hires the third service company to serve the industrial catering Before the time for lunch or dinner, each of supervisor store will count and report the number of employees who will eat daily After that, the leader of admin team will summary the number and send it for the third service company to prepare the industrial catering

According to the Head of Administration Department of AEON Vietnam, “because of lacking of responsibility of supervisor store and the leader of admin team in checking meal’s quantity, it makes the big gap between number of order meals and the actual meals” It is able to conclude the reason why it has the big gap between number of order meals and the actual meals is not exact number of order and actual meal’s quantity There are not only lack of responsibility of supervisor store and the leader of admin team in head quarter and 3 branches but also changing in number of employees daily that cause the deviation of order meal’s quantity Because of the characteristics

of the supermarket and retail sector, the rate of part-time employees in AEON's labor structure is high, it is difficult to predict the number of part-time employees working in

a day exactly These people are sometimes absent without supervisor store’s agreement So that the quatity of part-time employees is variable The table in the report of Head of Administration Department in the meeting of the 6 months early of Y2017 shows the situation of this problem in head quarter and 3 branches in 6 months

in Y2017:

Table 2 – The number of ordering and actual meals of head quarter and 3 branches of AEON Vietnam

in 6 months early of Y2017 (The data was provided by AEON Vietnam’s Administration Department)

Based on the information from the table 2, it shows that the the surplus in number of meals in 6 months Y2017 of head quarter - Celadon and 3 brands are 6,845 unit -Celadon, 3,108 unit - Binh Tan, 576 unit - Canary and 261 unit - Long Bien The surplus number in Celadon - Tan Phu is the highest than 3 branches It is account for 63.44% in total And the rate of surplus meals in Binh Tan is higher than Canary in Binh Duong Province and Long Bien in Ha Noi It is account for 28.80% totally The chart 2 shows the number of surplus meals in each of branch and head quater:

Chart 2 – The number of surplus meal of AEON Vietnam in 6 months early of Y2017 (The data was

provided by AEON Vietnam’s Administration Department)

Ordering Actual Ordering Actual Ordering Actual Ordering Actual

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Binh Tan, AEON Canary Binh Duong and Long Bien Ha Noi The cost managing system means a coordination of preparation part and quantity checking He also said that “No the coordination of these components will lead to an increase in the number

of surplus meals, so the number of meals will be reported untrue” In the fact, the effective of this system in AEON Canary Binh Duong and AEON Long Bien Ha Noi

is better than in AEON Celadon and AEON Binh Tan

To find out the reasons for this problem, it is necessary to collect more information from the supervisors of store and the leader of admin team in AEON Celadon and AEON Binh Tan According to the supervisors of store, the number of employees who will eat daily is not exact She said that “the number of employees one day in AEON is too huge and quantity of part-time employees is not stable So I cannot ask one by one person that they eat or not I usually report the number of employees, who will eat meals based on the total quantity of current employees But some of employees ordered before but after that, they do not eat meals So it is not a true number I am not sure that all of them will eat meals” Because the daily number of employees in each store is too big and not stable day by day, it is very difficult and wastes time to count

it So that, they just estimates Sometimes, they count employees but there is not evidence to ensure that these counted employees will eat as predicted In the the leader

of admin team’s view, there are many employees order but not eating These reasons make the the big gap between number of order meals and the actual meals The leader

of admin team who is responsible for ordering the meals for employees show that the rate of employees who order but no eating is too high Following the information are conducted from interview with leader, this rate is account for over 20% monthly in Celadon She agreed that almost employees in store complain about the quality of industrial catering is too bad to eat And it is the same food in the meal day by day They make them do not want to eat in company About the meal’s quality, the low meal’s price is the one of reason why the bad quality The meal’s quality depends on it’s price Some of employees agreed that no refund money if they do not eat meals makes them feel free to order Following the AEON's benefit policy, each of employees who works on a shift will receive a meal allowance If employees do not eat, they will not be refunded money Therefore, the employees order before, they do

not eating The other employees have appointments with their friends or individual’s problem that they are not able to eat In additional, the leader of admin team also mentioned about responsibility of the industrial catering company The industrial catering company will count the number of actual meals after lunch and dinner After that, they will report for the leader of admin team The number of actual meal, which they report to company usually is not true The industrial catering company’s staffs want to take the leftovers, so they usually report more meal’s number than actual meal

In other words, some of industrial catering company’s staffs are cheating AEON to take more leftovers As the result, the accuracy of this number depends on the industrial catering company But nobody in admin team controls the accuracy of actual meals

On the other hand, the number of surplus of Canary Binh Duong and Long Bien Ha Noi is not too high They are only account for 5.34% and 2.42% in total This shows that the situation in here is not as seriousness as other branches and head quarter in Ho Chi Minh City

1.3 The increasing in cost for per one unit of meal:

One of the reasons makes the increasing cost for meal whole the number of employees decreasing is the increasing in cost for per one unit of meal According to Accounting Department’s confirm, the cost for one unit of meal increased slightly in 6 months early in Y2107 It is from 24,800 VND/unit to 25,000 VND/unit This price includes the 10% of Value Added Tax The reason for this increasing is the increasing in input material’s cost of the industrial catering company

To understanding this issue, it needs to discuss with relevant people The Head of Administration Department mentioned about the failure in negotiation with industrial catering company is not solved So it makes the increasing cost per meal unit AEON Vietnam designs only one the industrial catering company by themself despite of bidding They do not compare price with the other company in the field As the result, the industrial catering company offers the higher price than the other ones

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2 Theory informs and define the central problem

Cost management always has a very important role in the success of a business In fact, the failure of an organization is not due to lack of financial resources but the result of ineffective capital management Cost effective management makes maximizing and utilizing resources in the enterprise Good cost management can overcome the shortcomings in other areas An unadvised, financially sound decision can cause great losses to the business In order to do a good job of managing costs, the role of managers is indispensable They are people, who make the decisions to ensure the continued existence and development of the business and control the implementation of those decisions According to Stiner Don E (1992) “First it is important to note that real cost control starts with an attitude and a philosophy from executive management” The role of experienced managers in organizations is like the cost engineer's role in cost managing project They have important position in a company Stiner Don E (1992) also mentioned that “the role of the cost engineer on any project is far reaching and includes functions such as estimating, scheduling, project administration, contracts management, and many others beyond the scope of pure cost control” A good cost manager is not only in their individual skills but also in the experience, which are accumulated from working progress These experiences will make it easier for them to make initial judgments when the company has a problem These experiences also help managers can make right decisions without the mistakes comparison with the fresh managers To determinate who is the experience manager, it needs to based on some criteria such as how long they work for company, their contributions, how many people work under thier controlling, information from yearly assessment of company In John Dewey’s book (1938), he discussed about the criteria

of experience There are two important principles of experience are continuity of experience and interaction

This thesis does not focus on the two problem are the big gap between number of order meals and the actual meals and the increasing in cost for per one unit of meal as the main problems These above problems cannot be resolved completely For example, the price of meal unit goes up is a consequence of economic According to the general

theory of John Maynard Keynes published, it also confirms that price increases are an unavoidable consequence of inflation Therefore, it is only one problem of them can be solved is the lack of experienced managers and it is a central reason for increasing the cost of meals at AEON Vietnam Co., Ltd in Celadon Tan Phu and AEON Mall Binh Tan About the surplus meals problem, it is difficult to solve The company cannot prevent employees from not eating As the result, they are continue to order and still have the right to eat or not eating Additional, the number of employees is not stable daily It makes complicated for counting the oder meals Therefore, company will be

in trouble if it still wants to find the solutions for these problems

PART III – CAUSE VALIDATION

1 Possible causes

Following the central problem mentioned before, it is necessary to find out the causes, which affect to the current problem The lack of experience in meal cost management

is due to the fact that most of the experienced managers, who worked for many years

in AEON Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong, AEON Long Bien and understood the situation left company already The bad signal for this is the high turnover rate of senior managers at AEON Celadon Tan Phu and AEON Binh Tan This rate is up to 10% per year 2017 and is the highest rate from AEON Vietnam was built Comparing to the same period in 2016, it rises from 8% to 10% The turnover rate of 10% in 2017 is an unacceptable rate It means that in ten working employees, it has one person quit job Although this turnover rate is lower than industrial retail’s rate (32.2%), it also is the bad signal for AEON and needs to be find the solution in order

to solve So the human resource’s situation is not stable Employees quit job is an inevitable problem of managing human resource in organizations However, this issue

is not only one AEON Vietnam have to deal with it According to experts, the retail sector is very attractive to candidates because of the nature of work is always demanding creative and extremely dynamic But the biggest challenge faced by employers in this industry is the high turnover rate Following the result of the recent survey of Mercer-Talentnet about the turnover rate of organizations in Vietnam, there

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(18.8%), consumer goods (17.3%) In contrast, trading (11.9%), chemicals (9.9%) and petroleum (5.3%) have the lowest turnover rate This survey also mentioned that foreign companies have higher turnover rate than Vietnamese companies in 2017 This survey also shows that 60% of respondents have average working time at a retail company is only from 2 to 3 years

To find out the reasons cause this central problem, it needs information which is conducted from the interview with the Head of the Administration Department, accounting staff, supervisors and some employees who are working in AEON Vietnam

in Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien There are some hidden reasons as following:

Stress is the main cause of reduced productivity of the employees Three main reasons pointential managers are forced to work in AEON Vietnam are overload working, stress and no career opportunities to get high position in company Because AEON Vietnam Co., Ltd belongs to AEON Japanese group, culture of company is followed

by Japanese culture Japanese culture is the good tool to help employees practice working skills But it also has the dark side is overload working and stress Almost employees feel that they have to work a lots According to the survey was conducted

by the Japanese government within 1,743 Japanese enterprises with a staff size of between 10,000 and 20,000 employees from December 2015 to January 2016, it has about 10.8% in the total companies said that its employees have to work extra 80 to

100 hours a month And 11.9% of the companies said their employees worked more than 100 hours It means, the time for working is too much The situation in AEON Vietnam is similar 90% senior manager of 10 respondents of survey, who are working

in Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien

agreed that they have to work overtime (can see in Chart 3 – The number of senior

managers have to work overtime in Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien) The managers at AEON Vietnam are responsible for doing their work and have to work overtime a lot in order to complete their work on time They have too much work to do to keep up the progress of work Because of the pressure of time that they are under stress

Chart 3 – The number of senior managers have to work overtime in Celadon Tan Phu, AEON Binh

Tan, Canary Binh Duong and AEON Long Bien (The data was conducted from survey in 2017)

Morever, in AEON Vietnam Co., Ltd, when one person tries to work to get target and has some potential strengths, he or she can be promoted to get the higher positions But the level of position is limited The same as usual, Japanese people will be responsibility for getting the higher positions in company and hold the key role in Board of Directors It is very difficult for Vietnamese employees to get these positions This is easy to explain that AEON is a Japanese invested corporation so they want to take control the power It means that the important positions are not held by the Vietnamese people Because of this bad promotion rule of Japanese Board of Directors, almost of experience managers quit job The evidence for this is the results

of the survey that there is no opportunity for managers to show their ability and contribute to work for company It is the most important factor causes experienced managers to leave AEON Vietnam

Based on the above developing, the following initial cause and effect tree has been developed:

YES 90%

NO 10%

WORK OVERTIME

YES NO

Lack of responsibility

of admin and supervisors

The big gap between number

of order meals and the actual meals

Not exact number

of order meals

Not exact number

of actual meals

Employees not eating

Not check the actual meal quantity

Rely on the benefit

Have unexpected individual’s work

Not good in meal’s quality

The low meal’s price

Not diverse kind

of daily food

Not stable number of part time employees daily

Experienced managers quit job

No career opportunities

Overload working Stress

Diagram 2 - Initial cause and effect map

The increasing quantity

The increasing price

The failure in negotiation with industrial catering company

Lack of responsibility

of admin and supervisors

2 Theory informs and determine potential causes of the problem

According to Branham, Leigh (2005), the seven hidden reasons make employees leave:

 The job or workplace was not what the employee expected Employees have unrealistic expectations when they are hired, have misconceptions about the work or are sometimes misled during the interview process

 The mismatch between job and person Those who hire often assume that because a job is at a lower level, anyone can do it, forgetting that excellence can

be found in all jobs and that it is worth taking time to assess who has the right stuff to succeed, in every job in an organization

 Too little coaching or feedback Way too many managers still practice once a year coaching at the annual performance appraisal Many old school managers adopt a parent to child mindset with their employees, sometimes leading to behavior that motivates compliance but not commitment Other managers fear the confrontations that arise from giving corrective coaching

 Too few advancement and growth opportunities This is the No 1 frustration of younger top performers When employees rate today's managers on leadership competencies, the ability to develop direct reports ranks near the bottom

 Feeling devalued and unrecognized These include not being paid fairly, not receiving a simple thank you for a job well done, being treated with disrespect, being ignored, being put down instead of valued for being different, not getting the right tools and resources to do the job, and having to work in an unacceptable work environment

 Stress from overwork and work-life imbalance

 Loss of trust and confidence in senior leaders

Wu Lisa (1988) also explained some causes affect corporate workers quit There are opportunities for advancement such as limited, lack of recognition, unhappiness with managers, problem in salary and benefit and bored with job

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Following the result of survey by Talentnet and Mercer in 2017 about the turnover rate

of organizations in Vietnam, the retail industry is in the top three with the lowest bonus Specifically, retail (14.8%), logistics (12.5%) and education (9.6%) It shows the fact that most companies in the retail industry now have low rewards So the employees will be convinced when competitors in the industry approached and invited them to work They are attracted to another job with higher rewards For this reason, the turnover rate in the retail sector is higher than the other sectors in industry

As the causes make increasing meal cost in Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien are metioned in above, there are three possible causes such as no career opportunities, overload working and stress Besides, not recognized for contribution, low increasing salary rate, loss believe in management way, job duties boring/not challenge are also the causes for current problem in AEON

In contrast, misconceptions about the work and mismatch between job and person do not affect to manager’s decision leaving This table below shows the level of influence

of causes This caculation is based on data conducted from survey with respondents The respondents are people, who are responsible for management in AEON Vietnam Co., Ltd The caculation of Mean, Standard Deviation and Coefficient of Variation are conducted from survey as below:

Table 3 – The Mean, Standard Deviation and Coefficient of Variation of causes (The data was

conducted from result of survey in AEON Celadon Tan Phu and AEON Binh Tan)

Based on figures are caculated above (see in Table 3), there are many real causes

make experienced managers quit their job, which affect to lack of experienced managers in AEON Vietnam Co., Ltd In all of them, no career opportunities (Mean = 4.5), not recognized for contribution (Mean = 4.3), stress (Mean = 4.2) and overload working (Mean = 3.5) have the highest mean It shows four factors affect experienced managers quit job strongly

In reality, there are many cases experienced managers left company It can be mentioned the Head of Administration Department’s story that she had an old colleague, whom just quit job in AEON The reason for his leaving is “he did not find any career opportunities to get high position in company In this company, when one person tries to work to get target and has some potential strengths, he or she can be promoted to get high position But the level of position is limited Japanese people will have responsibility for high positions and hold the key role in Board of Directors It is very difficult for Vietnamese employees to get these positions” This story tells that opportunities for high level position is need to be cared by company Following Daria Ionova (2016) view “Opportunity for career advancement: growth within an organization boosts self- esteem and makes a person feel that his efforts are recognized and appreciated” The results are presented by Daria Ionova (2016), it also confirms

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of opportunity for manager’s growth is one of the leading causes of reducing employee satisfaction Reducing employee satisfaction is a signal to recognize that employees might be frustrated by a lack of opportunities They do not see any career advancement and promotions, what managers see as are given growth and development opportunities

Besides no opportunities, stress and work overload are also impacts affect the senior managers do not stick to their company Both of individual stress and work stress make employees do not keep balance in their life and their works However, in this thesis, it does not focus on individual stress “Workplace stress can be caused due to excessive workload, isolation, long working hours, harmful work environments, less autonomy, complicated relationships among co-workers and management, harassment

by management, annoyance and lack of opportunities or motivation to advancement in one's skill level” (Banerjee Sudatta and Mehta Payal, 2016) Qureshi et al (2012) argued that perceived work overload leads to increased stress and lower job satisfaction In AEON’s case, 90% respondents agree that they have to work overtime and 70% said that they work over 8 hours per day It means the managers in AEON are working more time than law’s standards

One more strongly impacts cause the experienced managers in Celadon Tan Phu, AEON Mall Binh Tan, Canary Binh Duong and AEON Long Bien left company is not recognized for contribution Following Maslow's hierarchy of needs was written by psychologist Abraham Maslow in 1943 in A Theory of Human Motivation, the recognized for contribution is in top of pyramid It is a meta need of people A person

is in a high position in company, they want to dedicate themselves to the company When their talents are given and after that they do not receive any suitble the recognitions, they will be disappointed And when there is no satisfaction with the job

or the company, these managers easily leave the job when they have new opportunities from another company to offer them

In contrast, AEON Celadon Tan Phu and AEON Mall Binh Tan also have many other causes for managers to leave the company such as the allowance for employees who have long time working in company is low The rate of increasing salary per year is a

small firgure It is about 5% in total salary if an employee has more than one year working in AEON Vietnam One of the hidden causes that employees quit job is loss

of trust and confidence in senior leaders Japanese managers/Board of Directors have ways to control the staffs based on their cultural Nevertheless, almost Vietnamese managers and staffs have different methods to manage So they sometimes conflict with the others and do not have the same ideals to solve problem The result of this conflict is almost the employees quit job The other ones stay at company but their satisfaction level goes down However, this thesis does not concentrate on these causes above, because they do not affect strongly to this problem Mean of Low increasing salary rate factor is 2.9 and Mean of Loss believe in management way factor is 1.7 This diagram shows the updated causes the central problem:

Diagram 3 – The updated causes

Based on the previous initial cause and effect map and the above developing, has been developed updated cause and effect map as below:

Lack of experience to

control situation

Experience managers quit job

No career opportunities

Overload working

Stress

Lack of recognized and valued contribution

Arccording to Cheryl Richardson (2001), “ top performers are of value, not only for their present value but also as a selection pool from which fixture organization leaders will be chosen Tomorrow’s stars and franchise players may be among today’s few top performers It is imperative that the organization makes a conscious decision to determine what needs to be done to retain the top talent in the organization and to ensure the future of the business is sustained.” It shows the importance of retaining managers in organization She also suggested that the organization should do the following:

Lack of experience to control situation

Experience managers quit job

No career opportunities

Overload working Stress

Lack of recognized and valued contribution

 Provide promotional opportunities for the successful restaurant manager at the current level Structure in grade level promotions, which should involve additional responsibilities with increased pay

 Bundle added benefits as attractive motivators.”

In AEON Vietnam Co., Ltd’s case, it can be commented some money solutions, some money – free solutions and recruitment new managers to replace the managers quit job These money solutions mean solutions costly and company has to spend budget for doing it In contrast, the money – free solutions are the way help improving current situation but company will take a little of money Besides these solutions, recruitment new managers to replace the managers quit job is also a possible solution to solve the lack of experience managers problem

1 The money solutions

As Head of Administration Department commented that “promoted and benefit policy for employees is a top priority” Setting the right compensation and benefits is also important to reward in recognition of their contributions for company People often underestimate the power of encouragement, especially with top employees who are often self-motivated Everyone likes to be praised and be rewarded, especially those who are dedicated to their work Thanks to these rewards, managers who give contributions, it will motive them keep making better ideas To do that, it needs to review compensation and benefits packages at least annually in order to offer the reasonable increasing salary rate The current increasing salary rate is 5% per year It

is too low than the other companies in the industry Compensation may include hourly wages or an annual salary, plus bonus payments, incentives and benefits, such as group health care coverage, short-term disability insurance and contributions to a retirement savings account The benefits packages can be the holidays in other countries or the health check-up packages in international hospital In pact, retail is the field, which has the lowest bonus in the industry Following the data is shown in news of Economic and Financial University, the retail’s bonus rate is 14.8% but the rate of finacial field is

hobbies They need get balance between work and life Working so much is scientific A study by Stanford University found that when people work over 50 hours per week, the productivity will be dropped dramatically And when working hours are reached 55 hours per week, the performance will be reduced to the point 0 If working overtime for good employees is necessary, it is a good idea to give them more benefits, such as bonuses and promotions Competent employees can do more as well if they are rewarded worthily Greg Melikov (1997) agreed with how to reduce stress such as:

anti- Get up on time so you can start the day unrushed

 Say no to projects that just won't fit into your schedule and will compromise

your mental health

 Delegate tasks to capable colleagues

 Allow extra time to do things and get to places

 Make friends with happy, nonstressed people

 Carry a paperback with you to read while waiting in lines

 Listen to relaxing tapes while driving to and from work

 Laugh and then laugh some more

 Take your work seriously, but yourself not at all

 Talk less; listen more

 Sit on your ego

2 The money – free solutions

The way to retain experienced managers is different from the way to retain the senior employees Experienced managers need the opportunity to express themselves and the work environment to show their values Talking to them about their important role in company’s plan and explain that they are an integral part of bringing the company to

success One main point that they want to make a difference in their work and their

managing way Therefore, AEON Vietnam needs to give them opportunities to make decisions and help them to implement management strategies The company also needs to respect and acknowledge their contributions Besides that, AEON Vietnam also shows the clear vision in future This vision means that the managers want to know where they could be headed and how they can get there The vision of managers

is little difference from the vision of under level staffs So, it is important to recognize and give them opportunities to get it For example, the under level employees care about salary, but the most important thing of high level experienced managers is

opportunities to show their skill and talents

Besides that, creating an environment for personal development As mentioned above, giving the opportunity to demonstrate abilities, the company also needs to create a favorable environment for managers to develop and nurture these skills such as making a strong investment in development and motivation This environment makes them feel that no reason to leave when they have good opportunity to develop in the organization

3 The recruitment new managers

Recruitment is a significant process mentioned in the human resource management It helps company can have the high quality staff Moreover, recruitment is related to the survival and development of a company Through recruitment, company can find the right and talent people from the candidates who will be responsible for managing company If company recruits the right people, they only control the cost become better than its present but also have some optimal decisions in order to improve company’s situation

The recruitment new employees depends on specific need of each companies and the purpose of companies Hence, it is not the same between the different business period

In AEON Vietnam’s case, its current problem is lack of exprience managers in meal cost controlling, so company should focus on recruiting the new manager who have

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PART V – ACTION PLAN

In oder to solve the current problem of AEON Vietnam in Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien, it needs to have implementation plans As mentioned above that the problem is the lack of experienced managers in the field of meal cost management So there are plans to add to this shortcoming These action plans focus on innovating and improving the current system policy Plan A aims

to set policies to keep the manager going on working at the company In contrast to Plan A, Plan B focus on the process to recruit new managers from the labor market to replace the old manager quit job Plan B is mentioned to compare expenses with Plan

A After comparation, it can be easy to make decision that which plan is suitble or not for doing in reality These new managers may be experienced people working in other companies and AEON Vietnam will invite them to work Detail of two action plans are conducted as below:

1 Plan A: Retain the current managers

Employees always enjoy being thanked for their contribution on work So a reward is considered to be something that is given in return for good behavior or given for some contribution If the company does it well, it will give the company good result Maybe the company has to spend money in the beginning but it’s benefit helps company save cost twice times The goal of reward for employees can be summed up in the following equation: Right People + Right Rewards = Right Results

To do this, it is necessary to set up the process for a Recognition and Reward System, which includes 7 steps:

 Step 1: Choose the elements/ requirements for process

 Step 2: Select the right person

 Step 3: Select the right rewards and estimate the budget

 Step 4: Introduce process

 Step 5: Implement

 Step 6: Evaluating and improving process

 Step 7: Providing in the future

This Recognition and Reward System can be both tangible and intangible awards that everyone can earn and that everyone enjoys them

Step 1: Choose the elements/ requirements for process

In the first step, the company has to measure current Recognition and Reward System

It needs to find out and identify the strengths and weakness of this system With strong points, AEON must develope them and avoid weak ponits To find out the weakness

of current system, AEON can collect information by asking some questions For example:

 Are you pleased with your company’s current situation?

 Does AEON have any congratulatory parties or other events to thank for employee’s contribution?

 Could you tell some reward that you got, please?

 Is the reward value to you?

 If you have power to make changes current system, what will you do?

Based on this data, company can analyze weakness of current Recognition and Reward System, which employees are not happy with this

Step 2: Select the right person

The purpose of this step is choose the right person, who has the effective contributions for AEON This selecting the person who could become candidates in company can be based on the company's annual results assessment, or AEON can set up the score for employees The AEON has to ensure that the process will show the right person

It needs to identify the criterias to select the right people Questions to be asked to support for finding the criterias as below:

 Who is in a role to influence the company?



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 What specifically will you require of your selected people?

 Who are the person with good recognition in AEON?

Step 3: Select the right rewards and estimate the budget

After selecting the worthy person, selecting the right rewards is an extremely important step of this Recognition and Reward System The rewards are ensured that they match employee’s needs and expectations Additional, price of these rewards is enough for AEON’s budget The cost of rewards for employees is deducted from company’s taxable income So the rewards for employees will help AEON reduce tax and encourage employees to contribute to company The value of rewards can follow as:

Position Current system Planning system Different expenses

Award certificate + a trip

in the other countries or heal check - up package for member in family

Award certificate

Table 4 – The rewards per year

Step 4: Introduce process

It is the time to allow everyone to understand, test and evaluate the designed process AEON can start introducing Recognition and Reward System in Febuary of Y2018 after setting up the process

Step 5: Implement

After introducing this Recognition and Reward System, it needs to do in March of Y2018 In March, AEON has the assignment record of employees already So, it is convinience for selecting people

Step 6: Evaluating and improving process

AEON must develop an evaluation mechanism for the process It needs the long time

to get result of changing A good Recognition and Reward System will help the company promote employees and reduce the turnover

Evaluating is a meaningful step to find out the mistake Based on the result of valuating, AEON can fix the mistake of this system or develop strong points

Step 7: Providing in the future

Keep going on processes needs to be done in the future To do that, AEON needs to create an approach that will facilitate reminding people and department about using Recognition and Reward System and to prevent people following from old system

2 Plan B: Recruiting the new managers

Because the experienced managers quit job causes lacking of experienced managers in management meal cost, it needs to recruit the suitable managers into organization, who have enough experiences years and ability In order to increase efficiency and to ensure consistency in the recruitment process, it is recommended the following steps

be followed:

Step 1: Pre – Recruiting

When employees leaf company occurs, replacing the role is typically the logical step

to take Before starting setting up the hiring process, it needs to determine the purpose relative to recruit the suitable managers into organization, who have enough experiences years and ability The recruitment process for hiring the experienced

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attractive articles to convince them give up their current jobs to work for AEON Vietnam Co., Ltd Carefully evaluate any changes needed such as: level required performing these tasks, resposibility, work hours, benefit, etc

Step 2: Develop job description

A job description is the core of a successful recruitment process It is used to develop interview questions, interview evaluations and references check questions It should reflect carefully thought as to the roles the individual will fill, the skill which they will need, the personality attributes that are important to completing their tasks, and any relevant experience that would differentiate one applicant from another The job description includes general information, position purpose, essential job functions, minimum requirements and preferred qualifications

Step 3: Develop recruitment plan

This recruitment plan, which is approved by Board of Directors and Human Resources Department shows the strategy for attracting and hiring the best qualified candidates Recruitment plan elements are posting period, placement goals, advertising resources, diversity agencies and resume banks The candidates can come from both internal and external by post recruitment notice in Internet job boards, social media, local media, national publications and other paper advertisements The job fairs and professional conference are considered a method for meeting candidates face to face They are used

as a vehicle to promote AEON’s image and brand

Step 4: Select search committee

To ensure applicants selected for interview and final consideration are evaluated by more than one individual to minimize the potential for personal bias, a selection committee is formed The human resources managers will identify members who will have direct and indirect interaction with the applicant in the course of their job Each human resources manager should make an effort to appoint a search committee that represents a diverse cross section of the staffs Under-represented groups and women

are to have equal opportunity to serve on search committees and special efforts should

be made to encourage participation

Step 5: Review applicants and develop short list

After the position has been posted, candidates will apply All applicants must be reviewed and considered by committee After reviewing all search committee comments and develop the short list, it has the short list has been determined and the applicants can then be contacted for interviews If the shortlist is not sufficiently diverse in light of the company goals, it needs to return step 3 to find more suitable candidates

Step 6: Conduct interview

The interview is the single most important step in the selection process It is the opportunity for both AEON Vietnam Co., Ltd and prospective employee to learn more about each other and validate information provided Because it is the recruitment for finding the experienced managers, interview questions should be relevant to the position and seek information on specific skills and abilities to perform the job The candidates ought to show that they can be responsible for working in high positions

Step 7: Finalize recruitment

Making selection by matching the best applicant to the profiled job description and making decision to choose the accepted candidates is the main action in this step After that, Human Resources Department will be responsible for preparing and sending the

offer letter to the accepted candidates

3 Comparison and selecting action plan

After having the details of the two action plans, it is essential to select a plan that is more potential and possible to the current situation of AEON Vietnam Co., Ltd to implement Assume the basic salary of the current managers and the new ones are equal and the increase the seniority allowance rate from 5% to 10% in total basic

Difference (Plan A-Plan B)

Table 5 – The estimated cost comparison between Plan A and Plan B

Following the estimated cost comparison between Plan A - Retaining the current managers and Plan B - Recruiting the new managers, the difference of them is 11,000,000 VND It means the cost of retaining the current manager is low than cost of recruiting the new managers Morever, the current managers will have more advantages than new ones The current managers have worked in the company for a long time, so they can understand the situation quickly and deeply If recruiting new people will have to train them again and help them adapt to the new work environment And the risk of hiring new people is that they can quit after probationaryperiod It will make the company waste time and money to the training and recruit a replacement if the new employees leave company For these reasons, Plan A - Retaining the current manager has more potential to implement

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