Poor working environment in hardline sector at aeon mall tan phu celedon

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- Le Thi Kim Khang POOR WORKING ENVIRONMENT IN HARDLINE SECTOR AT AEON MALL TAN PHU CELEDON MASTER OF BUSI

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Le Thi Kim Khang

POOR WORKING ENVIRONMENT

IN HARDLINE SECTOR AT AEON

MALL TAN PHU CELEDON

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2019

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Le Thi Kim Khang

POOR WORKING ENVIRONMENT

IN HARDLINE SECTOR AT AEON

MALL TAN PHU CELEDON

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR DOAN ANH TUAN

Ho Chi Minh City – Year 2019

Table of Contents

LIST OF FIGURE 5

LIST OF TABLE 6

EXECUTIVE SUMMARY 7

1 COMPANY OVERVIEW: 8

1.1 AEON GROUP AND AEON MALL VIETNAM: 8

1.2 HARDLINE SECTOR: 10

2 SYMPTOMS: 10

2.1 HIGH TURNOVER RATE: 10

2.2 DECREASE SALES VOLUME: 12

3 PROBLEM IDENTIFICATION: 13

3.1 POTENTIAL PROBLEMS: 13

Personal reasons: 13

Direct supervisor: 14

Working environment: 14

Decrease in sales volume 15

3.2 VALIDATING PROBLEMS: 16

Managers’ perspectives: 17

Employees’ perspectives: 18

3.3 THE MAIN PROBLEM: 18

4 CAUSE VALIDATION: 19

4.1 POTENTIAL CAUSES: 19

Poor qualification of tool & equipment 19

Bad ventilation system 20

Unreasonable shift hour 20

4.2 VALIDATING CAUSES: 20

Poor qualification of tool and equipment 21

Unreasonable shift hour 21

Bad ventilation system 21

5 ALTERNATIVE SOLUTIONS: 22

5.1 ALTERNATIVE SOLUTION 1: REPLACE POOR QUALIFICATION TOOLS AND EQUIPMENT 23

Phase 1: Recheck office tools and equipment 23

Phase 2: Finding the potential suppliers 23

Phase 3: Control and monitor 25

Phase 4: Report and evaluate result of solution 25

5.2 ALTERNATIVE SOLUTION 2:FIX THE UNREASONABLE SHIFT HOUR 25

Phase 1: Evaluate how unreasonable shift hour of employees 26

Phase 2: Suggest new daily working time 26

Phase 3: Report and evaluate result of solution 26

5.3 ALTERNATIVE SOLUTION 3:STANDARDIZED PROCESSIZATION 26

Phase 1: Making a standard working process 27

Phase 2: Evaluate to complete the processes 28

Phase 3: Report and enhance the system 28

6 ACTION PLAN: 29

6.1 ACTION PLAN 1:REPLACE POOR TOOLS AND EQUIPMENT 29

6.2 ACTION PLAN 2:FIX UNREASONABLE SHIFT HOUR 31

6.3 ACTION PLAN 3:STANDARDIZED PROCESSIZATION 33

1 Making a standard working process 33

7 SUPPORTING INFORMATION: 34

7.1 INTERVIEWEE’S DEMOGRAPHIC: 34

7.2 INTERVIEW GUIDE: 34

Introduction 34

Warm – up question 34

Main body of interview 34

REFERENCES 35

APPENDIX 1: TRANSCRIPT SUMMARY 37

List of figure

Figure 1 Aeon Mall Tan Phu Celedon 8

Figure 2 Basic principle of Aeon Mall 9

Figure 3 Hardline structure at Aeon Mall Celadon 10

Figure 4.The percentage of turnover rate in Hardline Sector in Aeon Mall Celedon in 2018 11

Figure 5 Sale volume of Hardline Sector in 2018 12

Figure 6 Reasons of Turnover in Hardline Sector in 2018 13

Figure 7 Initial Cause - effect map 16

Figure 8 Updated cause - effect map 19

Figure 9 Final cause - effect map of Hardline Sector 22

Figure 10 Registering shift hour process 27

Figure 11 Selling process 28

List of table

Table 1 The percentage of turnover rate of Hardline Sector in Aeon Mall Celedon Tan Phu in 2018 11 Table 2 Potential suppliers 25

Executive summary

According to research report of EU – Vietnam Business Network (1), Vietnam’s retail industry is the prosperous market which attract many different domestic and international companies to invest and develop in there However, the biggest challenge facing employers in this industry is the high turnover rate of employees, even turnover

is an issue that both businesses and workers are not expecting Ideally, Hai Van (2) reported, 20% of workers said that candidates’ did not have enough obligation and the high turnover rate are the biggest challenges, with 49 per cent claiming that candidates are easily effected when they have offers from another company

Today, AEON Group is one of the largest retail companies with impressive linkage scales and performance in Japan as well as in other countries AEON Vietnam Co., Ltd opened the first shopping center "AEON MALL Tan Phu Celadon" with the largest scale in Ho Chi Minh City on January 11, 2014 This shopping center will be the third country after Malaysia and China to mark AEON's emergence as a large-scale shopping mall

However, one of the most difficult challenges that AEON Tan Phu Celadon has

to confront one of the hardest problems which are how to maintain a permanent human resource Spending a lot of time and money training a quality team and keeping them motivated in a stressful working environment is not a simple challenge In addition, talents are often attracted to some other attractive offers, along with better remuneration This issue not only increases the personnel cost of the enterprise but also reduces the business efficiency and even leads to the lack of and weak personnel that can "destroy" the business If this problem continues, it will adversely affect the business, as well as the image of the company Therefore, it is necessary to analyze each influencing factor, assessing the risk of each of those factors to each employee, right from the time of recruitment to the appropriate and appropriate measures

Starting from the above, I decided to choose the topic “Poor working environment in Hardline Sector at Aeon Mall Tan Phu Celedon” which is topic for my thesis Since then, propose some solutions to reduce poor working condition and improve the situation in Hardline Sector

1 Company overview:

1.1 Aeon Group and Aeon Mall Vietnam:

Aeon Group was established in 1758 in Japan Aeon is one of the largest retail company and has 179 joint ventures in both domestic and oversea

Throughout its operation time, the AEON Group maintains an unwavering commitment to set "Customer First" consistently The basic principle of AEON Group

is towards a prosperous, stable and peaceful society through retailing With that responsibility, AEON Group has gained the trust of customers as well as expanding business activities not only in Japan but also in other countries in Asia which are China, Vietnam, and so on for a long time

AEON officially started its operations in Vietnam in 2009 as a Representative Office from 01/12/2009 to 10/07/2012 In 07/10/2011, The company was approved by the People's Committee of Ho Chi Minh City, AEON Vietnam Co., Ltd was officially established, investing for construction, organization, management and business activities: Trade Center, General Department Store and Supermarket This is considered the main business direction In addition, AEON conducts other business activities related to import-export, trade and research

Figure 1 Aeon Mall Tan Phu Celedon

AEON MALL system in Vietnam includes AEON - Tan Phu Celadon Shopping Center in Ho Chi Minh City in 2014, AEON Shopping Center - Binh Duong Canary in Binh Duong, AEON - Long Bien Shopping Center in Hanoi in 2015 and AEON Shopping Center - Binh Tan District in Ho Chi Minh City in 2016 In 2019, Aeon Mall Vietnam plans to open new shopping center at Ha Dong of Hanoi

Basic principle of AEON:

• "Peace": All AEON activities aim to pursue prosperity to create a stable peace

• "Human": AEON always respects and values human qualities and values,

as well as strives to promote the building of close relationships in the same collective

• "Community": AEON is constantly devoted to contributing to creating the sustainable development of the community

Figure 2 Basic principle of Aeon Mall

Figure 3 Hardline structure at Aeon Mall Celadon

2 Symptoms:

2.1 High turnover rate:

During the working time and data of company in 2018, I realized that main symptoms of company are high turnover rate and decrease in sales volume Turnover rate is one of the most important things which human resources need to pay more attention and manage it in suitable limitation Nowadays, turnover likes phenomena

especially in young people Some of them think that they are so good to do their old work Therefore, company or organization realizes that turnover is issue which can affect badly for finance, operation situation in one company or organization According

to define of Cambridge dictionary that turnover shows that the rate of people who work

in specific company quite or change their jobs and replace by new employees While Adams and Beehr (3) claimed that turnover likes cycle which the company always has

to hire and train new employees who will instead of the old workers

Month 1 2 3 4 5 6 7 8 9 10 11 12 Headcount 76 78 74 76 75 74 75 73 78 74 74 75

Table 1 The percentage of turnover rate of Hardline Sector in Aeon Mall Celedon Tan Phu in 2018

Figure 4.The percentage of turnover rate in Hardline Sector in Aeon Mall Celedon in 2018

According to below table and figure, the number of people change their own job were pretty high in during year Although the rate declined in the end of the year, they still had affected badly for finance or operation situation of the company In April,

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00%

the turnover was the highest among other months in one year which was 13,16% While August was the month which had 1.37% employees who quite their job in 2018

2.2 Decrease sales volume:

Figure 5 Sale volume of Hardline Sector in 2018

According to figure above, sale volume of Hardline Sector in 2018 was not good and decearse from January to December which was from over 18 million VND to under

8 million VND Moreover, the actual sales were lower than benchmarks which were set differently in each month

Besides, based on data in figure 5, from January to December, even though turnover rate in Hardline reduced, the numbers of sale were still pretty low and did not reach the target Therefore, decreasing sales volume is another symptomd besides high turnover rate

All things considered, high turnover rate is a symptom which Aeon Mall Celedon Tan Phu should be investigated main problems and found out potential solutions to

2,000,000,000.00

Sale volume of Hardline in 2018

Sale volume Target sale volume

solve this symptom Because this symptom not only affected operation process but also made profit run down

3 Problem identification:

3.1 Potential problems:

According to data of employee engagement survey and in – depth interview about what factors effect turnover decision of employees in Hardline sector, several potential problems are listed below:

Personal reasons:

Personal reasons defined as several causes relate to health, family issues, education conditions of children and social status which can lead to turnover of employee in individual organization (4) Aeon Mall Celedon Tan Phu also faced to this situation when the front desk officers of Hardline Sector decided to quit their position because of personal reasons such as joining military, studying, working location and so

on Besides, employees in there also quit their jobs because of finding new job Personal reasons also showed ability to adapt with new working conditions if employees cannot fit with this environment, they will easily to turnover (5) Therefore, during the probation, several workers could not pass and go on their position

Figure 6 Reasons of Turnover in Hardline Sector in 2018

As a figure 6, family reason, studying, new job, personal reason and health are the most reasons which almost employee turnover reported to Human Resource

reason Studying Familyreason Health Location New job Discipline Militaryservice Probation

Reasons of turnover in Hardline Sector in 2018

Department why they wanted to change their job Family reason was reason which was chosen 17 people when they quit Besides, studying was reason of 7 people because front desk staff was recruited from above 18 years old Therefore, some of them would have aspired to continue their study path for reach higher degree While health problems were pretty high which was around 7 persons to choose this reason Health issues were able to relate with workload and shift which were not suitable for themselves The employees had to work extra time in weekend especially in the holiday Besides, shift hour of the workers did not reasonable Sometimes, they would work in six or eight hours which was not consistency

To sum up, personal reasons are one of the simplest reasons which most of employees easily choose to quit their job Besides, personal reasons are from their internal thinking Therefore, organization gets hard to manage the issues and only control it as minimize as possibly

Direct supervisor:

Communication is an important skill which can support and remain good relationship between managers and employees It is preliminary factor to affect an ability to employee turnover (6) Hardline Sector also faced to several problems which related directly to lack of communication skills Employees in there felt not respect and dissatisfied because of their direct supervisor who lack of communication skills In this sector, managers sometimes did not have enough listening skill to know clearly about what employees need Besides, during working time, managers vociferated and treated their own staff unfairly Moreover, when mangers missed communication skills, they were able to make other people feel unrespected Employees are from all of levels in company who always want to treat with all respect because they are deserve by all things they did for increasing profit for company (5) Because of these problems, they made employee turnover in Hardline sector In short, ways of communication between direct supervisor and workers are one of the factors which affects employee retention in Hardline

Working environment:

Working environment is sum of interaction relationship between employees and employers and the environment where workers work, including technology, people and

organizational environments (7) It means that working environment has an important role during working time of each employee in specific business For this reason, when employees work in poor working environment, they will change their job easily In fact,

in Hardline sector of Aeon Mall Tan Phu Celedon has confront with several problems which exist from working condition People in there claimed that they had to work in condition which had broken tool and equipment such as broken air – conditioners Besides, in some case, they had to work overload in weekend especially in the holiday Moreover, shift hour of front – desk staff in Hardline has not worked in the consistent schedule Sometimes employees had to work in shift, which was 6 hours, other shift was 8 hours It also is one of factors which make workers feel not uncomfortable in there working time To sum up, working environment in Aeon Mall Tan Phu Celedon still has some weaknesses which make people feel dissatisfaction and want to quit their position

Decrease in sales volume

Sales volume number of goods which was sold in operation process of company

in a specific time So that when sales volume decrease, it will become one of problems which the company should pay more attention and find out potential solutions In Aeon Mall Tan Phu Celedon, Hardline sector has to face with decreasing in sales volume because of several problems The first potential problem is from compensation policy

of company The front desk employees in there do not have their own KPIs which is known as key performance indicators When employees do not have KPIs, they do not have for themselves target which can follow to reach and feel unmotivated to work Besides, online shopping becomes one of the most trends which attracts customers to use it Online shopping can help buyers save their time because of its convenience Therefore, it is also other potential problems which affects badly on sales performance

of company Moreover, Aeon Mall is a new player in Vietnam retail marketing This company only joins the market from 2014 Thus, the company is in a favorable situation

in the market which other competitors such as BigC, Saigon Coopmart, Lotte Mart and

so on As a result, goods of Hardline sector cannot compete with others which company has to join the market from long time and has a strong position in mindset of consumers Besides, when sales volume of Hardline are low, it also affects to employee

performance They might feel boring during their working time because of small number of customers who come and buy goods in this sector Finally, it also becomes potential problem which influence indirectly on employee turnover situation in Hardline Sector of Aeon Mall Tan Phu Celedon

to provide for employees many different things which are training, working process, making plan and so on to reach goal of company (9) Aeon Mall Tan Phu Celedon also confronts with this kind of situation in Hardline sector According to data and result survey about how Hardline front staffs satisfy and reason to quit their jobs in Aeon Mall Tan Phu Celedon, some potential problems led to high turnover rate in Hardline sector which were personal reason, direct supervisor and working environment The first reason is family reason, their home was far from workplace which was one of reasons Secondly, almost front desk employees are students who just graduated from college or university, so that they could change the job when they found new job or want to go on

High turnover rate

Decrease in sales volume

studying In the next factor, health of their own workers is one of reason that they want

to quite their job They had to work overtime in the weekend and holiday Moreover, the shift hour is not suitable for them Several days, they had to work much more time than others That was also reason which made unsatisfied and found another job Besides, the workers did not receive respect from their direct supervisor In addition, some communication skills of supervisors were not good enough to persuade employees They recently shouted or forced employees work their own task which made people feel uncomfortable during working time Especially, working environment is a factor that front – desk employees in Hardline Department felt dissatisfied to work in Aeon Mall Celadon Several people did not have enough patient to work in probation time Besides, when people had to work overtime and unsuitable jobs, employees would feel tired and want to quite the job On the other hand, employees worked in the condition with broken equipment and tool which made people interrupt their working process Therefore, working environment is considered as main problem which affect directly on employee turnover in Hardline sector

To confirm the importance of main problem, the further information which was collected by interviewing managers and employees in Hardline sector are summarized

in below:

Managers’ perspectives:

Mr Nguyen Thanh Trieu – Hardline Manager said that his focusing on improving working environment to improve on their business this is very importance factor for the current Hardline situation Moreover, employees need to work towards a common goal and ensure they are responsible for the job of the whole team, instead of working alone and taking personal responsibility Notably, if there is a problem in team, the team members responsible for solving those problems can ask other departments to coordinate and receive support to find a quick and accurate solution

In addition, Ms La Thuc Trinh - Hardline's current Division sales leader also said that the lack of team spirit is the biggest problem and due to the lack of working environment among teams, it makes internal work overloaded and a change in job responsibilities between teams

Employees’ perspectives:

In the thinking of employees, working environment is one of the most important factors which people concern when they have desire to quite their job Workplace condition can help people have the best situation to work and earn profit According to interview of Ms Le Yen Ngoc, she mentioned that machines worked well, it could help the workers improve the productive in working process Besides, she also hoped that company should have more policies which created more chance and good working condition for every worker especially front desk employee

Besides Mr Tran Cong Tuan thought that he felt uncomfortable because of his noisy co – workers His colleagues usually talked loudly or ate in air condition room While Mr Tran Minh Tuan loved to work in fresh, clean room When they were interviewed about what should be changed to improve workplace in Aeon Mall, both of them had the same opinion about creating more opportunities for development in working condition

3.3 The main problem:

The influence of working environment has an important role to impact employee satisfaction in the company Because workplace combines physical, psychological and social environment in a specific workplace (10) Besides, poor working environment can cause many different problems such as job dissatisfaction, poor productivity, health

of workers and so on When working environment needs to improve, the consequence claims that it will affect negatively on employee performance and lead to turnover and low profit situation

The first impact poor working environment is job satisfaction which is defined

as how employees feel about their work in various aspect of jobs, so that job satisfaction and dissatisfaction appear easily in any circumstances during working time (11) Job satisfaction have an influence on the performance of employees in the organization

Moreover, environment in workplace also effect on the health of worker Impact

of working environment on the worker health, both of physical and social environment still have their own specific influence on the health of workers (12) In this research, health of employees not only is affected by lighting, ventilation systems and so on but also job stress, job position or KPIs of individual staff It claims that working

environment is very important factor which should be concentrated during the operation process

In addition, environmental in workplace also effects on the productivity of workers during their working time Productivity of employees who work in the company is effect by the overall working environment and proves that interrelationship between productivity and environmental in workplace (13)

In the conclusion, working environment is very important because it is main problem which lead to high turnover rate and impact on the sales volume which are symptoms that the Aeon Mall Tan Phu Celedon has to face with in the Hardline sector

4 Cause validation:

4.1 Potential causes:

Based on the previous data from survey, result of in – depth interview and

literature reviews, several potential causes of the main problem are identified in the

below figure which is the updated cause- effect map of the department as follow:

Figure 8 Updated cause - effect map

Poor qualification of tool & equipment

Tool and equipment are factors as machinery which belong to the working environment (10) It also affects directly or indirectly on the performance of employees

if the qualification of these do not good enough to support operation process Besides, some of tool and equipment in Hardline Sector face with broken situation which make people get hard during their work Productivity of employees are also impacted by this

Low worker health

Poor productivity

High job dissatisfaction

Poor employee performance

High turnover rate

Decrease in sales volume

problem Therefore, poor qualification of tool and equipment are issues which Hardline Sector should pay more attention to improve the performance of employees

Bad ventilation system

Ventilation system is another factor which relate with physical factors of working environment so that it is also issue which company should concern to improve and develop working condition for employees Air and heating systems should check and repair regularly (14) However, ventilation system of Hardline Sector has to confront with several circumstance as non – working air – condition which affect negatively on health and working ability of people in the sector

Unreasonable shift hour

The final issue impacts on performance and health of employees which make people want to quite their own job, is an unreasonable shift hour It leads to workload situation because their working time are not consistent Workload has a relationship with job stress and turnover (15) Besides, workload is able to affect health of workers Therefore, unreasonable shift hour also is one of factors that Aeon Mall Tan Phu Celedon should consider providing good working condition for their own employees

4.2 Validating causes:

According to in – depth interview of employees in Hardline Sector, people have

to confront with many different issues which relate with situation about poor working condition Environment of workplace in individual organization includes physical factors which surround space of employees and psychological elements are able to effect performance of people who work in the company (16) In the Hardline Sector, employees in there has to face with several causes as poor qualification of tool & equipment, bad ventilation system and unreasonable shift hour which effect directly on working environment According to Carnevale, physical environments in organizations include all of the material objects and stimuli such as buildings, equipment, lighting and air quality as well as how to arrange those objects and stimuli which are open-space office plans and flexible team work spaces that employees can encounter and interact with others in workplace (17) Thus, both poor qualification of tool & equipment and bad ventilation system belong to physical factors which impact directly on health and productivity of people who work in the company Besides, bad working environment

not only physical objects but also other factors which relate to shift hour of workers These poor qualify of conditions in workplace are able to lead employees to several negative results for themselves for example health conditions, stressful, overload and

so on (18)

Poor qualification of tool and equipment

According to result of survey about employee engagement, it proved that employees had to face with trouble from broken tool and equipment which should be repaired early However, this problem has not solved immediately It pushes employees have work in poor condition without good equipment Therefore, it is one of problems which affect directly on physical working environment

Unreasonable shift hour

Besides, unreasonable shift hour is other potential cause which influence the central problem It made employees feel unfair between themselves to others In some situation, workers should start their shift at 8.30 am and end at 17.00pm However, this schedule has not been the same as among employees As Ms Le Yen Ngoc said that, she had to work at 8.30 am and her shift would end at 17.00 pm While Ms Thanh Ngan who is her colleague, started her shift at 9:30 am and ended at 15:30 pm Because of this situation, it also made people who work in the same shift will feel uncomfortable Moreover, with this unreasonable shift hour, it also affected negatively on health of workers In some working day, they had to work over 8 hours a day Otherwise, they only worked around six or seven hours in their shift They would get hard to arrange their personal schedule because of this shift plan

Bad ventilation system

In addition, employees in Hardline sector also confront with bad ventilation system In some places in store, the ventilation system had problem which air – conditioner did not work It means that workers had to work in hot temperate This circumstance could make employees feel uncomfortable in the working time However, bad ventilation system also belongs to physical environment which relates to material that can support and improve the productivity of workers When people work in good condition, they can focus their own mind on working process, and it will help to create high productivity Mr Tran Cong Tuan shared that, in some hot day, he felt very terrible