Dealing with low intrinsic motivation of functional employees in pepsico foods vietnam company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- Hoang Thi Thanh Lam DEALING WITH LOW INTRINSIC MOTIVATION OF FUNCTIONAL EMPLOYEES IN PEPSICO FOODS VI

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Hoang Thi Thanh Lam

DEALING WITH LOW INTRINSIC MOTIVATION OF FUNCTIONAL EMPLOYEES IN

PEPSICO FOODS VIETNAM COMPANY

ID: 22140025

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR NGUYEN PHONG NGUYEN

Ho Chi Minh City - 2016

Executive summary

Vietnam has recently been regarded as a prospective destination of foreign investment presented with its high-speed development, especially for Fast Moving Consumer Goods (FMCG) As one of the leading producers in the FMCG market, PepsiCo Foods Vietnam Co., Ltd (PepsiCo) is following towards the development of the industry and improving its execution to gain higher performance results However, there are potentially existing problems in the company which may reduce the competition edge of organization and harm to its culture This research was commissioned to examine what problem in PepsiCo, the causes leading to problem are and to suggest the validated solutions to deal with problem, which are in line with company’s policy and resources

Method of the analysis is combination between theory-informed and validated data, collected through interview and survey to identify and confirm existence of the problem as well as causes and alternative solutions

From the general diagnosis of potential problem at PepsiCo, findings suggest the existence of low intrinsic motivation of functional employees as the main problem Problem scope to work is including Finance, Planning, Human Resources, Procurement and Legal Department Low intrinsic motivation is analyzed in terms of its existence, antecedents, consequences, and solutions are proposed to tackle such a problem Finally, this report indicates organization of actions to deal with problem in the lead time of one year and limited budget approved by the company

Recommendations discussed focus on two main causes of low intrinsic motivation of functional employees in PepsiCo, which are job characteristic and lack of verbal recognition and rewards The report also investigated three accordant solutions:

- Re-assessing and launching detail job description

- Offering functional employees extracurricular sub-task to develop their interpersonal skills

- Improving verbally recognition and rewards activities

Total estimated cost to implement these 3 solutions is approximately 234mil VND, which is in line with company’s approved budget of 250 mil VND while benefit brought is

453 mil VND Annual net saving is calculated as 219 mil VND

Since there is finiteness of time and resources constrain, limitation of the research exist such as the current company conditions data did not provide enough information and only sample of interviews are performed However, the report provides diversified and validated data in conjunction with theory to propose meaningful suggestion for PepsiCo to strengthen its personnel resources and organization behaviors

List of tables and graphs:

Table 1: PepsiCo Organization Health Survey condition (Pepsico, 2015) - page 11 Table 2: PepsiCo Organization Health Survey result 2016 (PepsiCo) - page 12

Table 3: Summary of interview result – Potential problems - page 19

Table 4: Summary of problem existence interview - page 29

Table 5: Cost – benefit of alternative solutions – page 50

Graph 1: PepsiCo new POM (PepsiCo) - page 5

Graph 2: Fast Moving Consumer Goods dynamic (Total 6 cities) (Nielsen, 2016) -

Table of content

Executive Summary 1

1 Problem identification 5

1.1 Problem conceptualization 5

1.1.1 Company overview 5

1.1.2 Business overview 7

1.1.3 Symptoms 8

1.2 Problem identification 14

1.3 Problem definition 23

1.4 Justify problem in term of existence 26

1.5 Justify problem in term of importance 30

1.6 Potential causes 34

1.7 Causes validation 38

2 Solutions 40

2.1 Proposal of Solutions 41

2.2 Evaluation of solutions 44

3 Organizations of actions 50

Conclusion 54

References 55 Appendices

PepsiCo Foods Vietnam Ltd (PepsiCo), who has operated in Vietnam for 9 years, became one of the leading food manufacturers in the country with main brand “Poca” and

300 employees throughout the country The local company inherited the morale and mission from PepsiCo Group to deliver sustained value by providing diversified products portfolio and taking the role to protect environment Understanding that the success of the business also thanks to the contribution of people in the company, PepsiCo has developed its working environment based on talent sustainability criteria, clear vision and strong business ambition toward future

In order to be well – prepared for globalization and localization process, PepsiCo has changed the structure to new PepsiCo Operating Model (POM) In which, the organization has been arranged into vertical multi-layer chart rather than horizontal in the past In that new POM, every operational department will be managed through one concept and direction from global, sector, region, commercial unit to market unit while General Manager will take the lead role as managing local operating concept Therefore, in the new POM, the active involvement of employees in company operation is the most important factor

Graph 1: PepsiCo new POM (PepsiCo, 2016)

1.1.2 Business overview

In 2016, Vietnam has been rated as top 3 destination of investment together with China and Indonesia, where foreign investors tend to expand their operations In addition, Vietnam is one of Top 5 Optimistic Countries in the world and our consumer confidence index (CCI) was in Top 10 globally for six consecutive quarters since quarter 4 of 2014 as report of Nielsen.1 However, drought and fish crisis recently has hurt the agriculture and thus GDP growth by achieving growth rate of 5.5% in the first half of 2016, lower by 0.8% versus 2015 as Trading Economic 20162 researched Fast-moving consumer goods are dynamic market but it is recorded that the nominal growth rate was decreased in Quarter 1

of 2016 after the strong recovery in quarter 4 of 2015

Graph 2: Fast Moving Consumer Goods dynamic (Total 6 cities) (Nielsen, 2016)

Even beverage was a shining star in the FMCG market with the nominal value growth of 39% in 2015, foods business was in recovering trend with positive nominal value growth rate in quarter 1 and 4 of 2015

Graph 3: Growth of Beverage, Food and Milk based product (Nielsen, 2016)

In the first half of 2016, PepsiCo has achieved volume of 3,800 tons, which is 28% higher compared with prior year However, in order to achieve volume of 8,000 tons for full year 2016, there is much more obstacles that PepsiCo need to overcome to fulfill the target

by keeping driving topline while consciously maintaining low cost structure

functional team in the company, including Commercial Finance, Plant Finance, Agro Finance and Finance team in Head office, located at all branches of the company As they take care of the most important and spread parts in business operation and have direct communication with all other functions but operating separately as back office, their idea are general and unbiased For planning team, their activities are as similar as Finance team but

in a deeper level and stressful as they will provide strategic advice to management team for their business decision Therefore, they may have incisive judgment to the problem occurring in the company Last but not least, HR manager will be the one standing at company’s overview to provide the information in the general and proven way The

qualitative questions have been used to investigate the interviewees’ point of view about what the concerns exist in the organization are The detail interview is showed as Appendix

1

According to Planning manager, recently his team faced the biggest problem of very

“high turnover rate” as 80%, increased by 100% versus last year Team members have

decided to take new challenges outside of PepsiCo after average 3-year commitment It brought company a personnel shortage and increased workload for the remaining people As

a result, working quality was decreased during a period of time Company was facing resource constrain since the experience employees decide to leave while the new one cannot catch the working pace and satisfy all stakeholder’s requirement perfectly In addition, it is

hard to find out the suitable candidate for the vacancy as the labor supplies for analyzing job

is not copious Therefore, planning team has to fulfill business core requirement and prioritize some of the requests while refusing tasks which they cannot take over all In general, there is a gap in operation in this period of time since Planning take an important role in analyzing all company scenario before launching products, pricing set up or giving business decision In addition, he insisted that his business partner’s awareness is not high They are usually late for meeting or sending back inputs when being requested and have not got much preparation for appointment These behaviors may be known as a passive involvement in group work as employees tended to reject new task and protect their benefit

Stressful work load and long working – hours, especially in the peak season, make employees be lacking of work – life balance but there is not much effort from the employees

to investigate and suppose the simplification as shared by Finance Director Besides, there is poorly-run meeting as lack of preparation and members’ contribution Employees intend to keep silence during the presentation and question and answer session, even the meeting outcome can directly affect to their performance and benefit There is not active feedback and activities of functional employees in daily work to upper lever/ line manager and they tend to do what their managers supervise them In conjunction with the high turnover rate of finance team, efficiency and effectiveness of the business action have been decreased

Interview with former planning analyst have been performed to get the experience of

an ex-employee He mentioned about the low promotion and the unchanged benefit even he needed to work for 2 persons’ jobs when PepsiCo faced personnel shortage problem in long

period In addition, there is sympathy in Planning analyst’s idea compared with Planning manager when he commented about the cooperative attitude and actions of his business partner That means people just want to maintain the current working way rather than actively improve and perform the new and better one

Another interview was performed with a general accountant He wants to keep a stable work rather than take a new challenge to get a promotion opportunity Therefore, he just completed his task as acceptable level rather than taking time to investigate the new things The commitment to the organization is low as he intended to search for another job outside of PepsiCo

The comment from HR Director gave a general view as she got the results from PepsiCo Organization Health Survey (OHS), which is a survey that company send to all PepsiCo employees to get their answers on the level of job satisfaction, job engagement, agility, commitment, alignment, jobs and career, management and group work Based on this data, the company will have the basic evidence to investigate the weakness remaining in the organization The survey includes 50 questions and is performed every year to get the employees’ concern on current organization behavior following the structure that Corporate

team gave Local HR team has corporated with management team and regional HR to design list of the questions to discover the information from employees and ensure that the questions are suitable for local market, especially for questions expressed Survey has been

done by all employees, from frontlines, operation to functional team to get the widen data of the local company

Survey’s condition is as below:

Table 1: PepsiCo Organization Health Survey condition (Pepsico, 2015)

Based on the result, board of directors need to have action plans to reduce problems that have bad rating The results of professional group (back office) for job satisfaction, job

engagement, agility, alignment, jobs and career, management and group work are higher than floor rate of 50% while commitment is very low at 36% It is quite similar for frontline group (sales and operation) with high level of job satisfaction, job engagement, agility, alignment, jobs and career, management and group work while there is low level of commitment at 26%

Survey elements Result of Frontline Group Result of Functional Group

Table 2: PepsiCo Organization Health Survey result 2016 (PepsiCo)

In conclusion, from the answers of 5 respondents in in-depth interview and internal survey result, there are some general symptoms that are happening in PepsiCo currently: high turnover rate intention or low level of commitment, passive job involvement (lack of fully corporation with other departments), job stress, tardiness in working performance and reduction of enthusiasm These symptoms lead to the common consequence of late or wrong

decision making affecting to company sales and benefit, which decreased both company and employees’ working quality

1.2 Problem identification

Interviews were performed with 5 stakeholders including Finance Director, Planning Manager, General accountant, Distributor Representative and HR director to identify the potential problems As initial interview, Finance Director and general accountant were chosen due to their widen performance in many aspects of company, which are related to finance service Planning manager was the one who has deep understanding on company business because he is major in doing analysis to support for any business decision making Another informant is Distributor Representative, who takes responsibility for sales in a district of Ho Chi Minh city Since the symptoms indicated that frontline team has the highest turnover rate in 2016, the in-depth interview should be performed with a member from sales team to have multidimensional perspectives on the problem identification Finally, HR director was interviewed to confirm the problem due to her diversified information as mentioned in previous part Qualitative questions are used, including what, yes/no, how term and opened question to help interviewees easily express their idea in personal ways From the defined symptoms, interviewees gave their own opinions about what the existing problems in the company are Generally, there are some results from the interview (detail can be referred as Appendix 2):

From the managers’ point of view, symptoms discovered from interviews are accumulated results after long time of not being interested in work Firstly, higher turnover rate of around 20% are recorded in year – to – date 2016, increased by 5% compared with

2015 Sales teams accounted the biggest part in high turnover-intention, the second position

is functional employees Exit interview showed that frontline employees faced difficulties in maintaining their enthusiasm with work after average two years since their personal result of

Go – To – Market strategy implementation is not effective, they also cannot get familiar quickly when they moved to other territory due to assignment FMCG market is on resuming trend, therefore, competition from other company is very strong Salesman is under pressure to achieve the volume growth of 20% per year That’s the reason why despondency feeling is raising as a part of job characteristic Secondly, some functional teams in plants and office got obstacles in defining their goals and directedness to link their personal goal to organizational ones As a general expression, if employees cannot confirm the necessary of their position in the growth of organization, opportunity for a promotion does not easily come

In another way, functional staffs are facing problems in developing themselves, or innovate working way to have more effectiveness in job outcomes In reality, the number of productivity projects reduced by 10% compared with last year (55 projects vs 61 last year), and so were the saving amount (23bil VND vs 27bil last year) Most of the productivity projects came from commodity compressible (54%), which are successful in dealing for a

lower price range of production inputs, raw materials and other indirect service, rather than value engineering, which are savings come from effort of operation as reforming plants KPIs (utilities and energy usages, innovate product formula to require lower raw materials usage,…) Employees are satisfied with their current jobs and behaviors, or in another way,

they tends to maintain their current working style without any significant improvement The initial comment is that staffs currently have low intrinsic motivation, which is required not only during organization change but also in daily work to make sure for sustainable development As Finance Director has revealed, her staffs “want to maintain their stable life,

do not want to take change which is similar to take risk If that, they cannot show their power or strength, or they even cannot know their weakness to improve it Work and life continue day by day and there is not much fluctuation That’s why they feel boring at work

and do not want to be involved in anything new”, or Planning Manager’s comment is that his employees maintained their current working style, which they have built in the time of Vietnam beverage company existed, without improvement even the growth of snacks business is not as much as beverage business The low intrinsic motivation prevented employees to devote and develop themselves even their benefit requirement is unchanged That’s reason why there is a gap between the actual benefit and ideal package in employees’

expectation

From the employees’ point of view, employees feel embarrassed when they are

assigned a high target while they need to face attacks from other competitors Sales team got

difficulties in finding the way to overcome challenge, therefore they did not enjoy the feeling of winners Instead of that, they only feel job stress and being late in performing other task as reporting and building up sales strategy as Distributor Representative has shared Sales team’s target is 20% growth in sales volume, 10% increase in market share of salty snacks, which will help PepsiCo win the second position in the savory market However, sales development strategy is another target since sales team needs to develop distributor network, especially for rural area, in the situation that sales man headcount is maintained unchanged That means sales man will have harder challenges in their daily work For functional team, it is not easy for them to work under high pressure of cost saving while performance quality is required to be improved For example, PepsiCo are performing Oracle upgrading program, which affect all functional departments in company However,

as General accountant’s comment, the schedule is so tight and in order to minimize effects

to daily sales performance, all departments need to suffer a hard time, from sales ordering, operation at plants to accounting department The target was considered as a challenge for back office team to overcome

The second problems employees claimed is that they are not fully satisfied since recognition system did not performed well and reward package is low compared with other company It affected to employees’ desire to work, or in another explanation, functional employees are having low extrinsic motivation as they have shared Former Planning Analyst commented that he has covered multiple task in the time of personnel constrain but

the benefit received is unchanged In this period, he has to surf his work’s challenges himself while the external treatments did not get him well He also mentioned about undefined career growth map for employee level or development calendar which they should have Currently only manager level have budget “Development Bank Account” for specific training following their career development intention Those are main reasons that

he decided to find out other opportunity outside of PepsiCo There is also comment about compensation and benefit package Employees have concerned about the different annual increase percentage for each department Since benefits are the motivation to foster employees to have positive performance, they admitted that they themselves are not actively get involved in job and usually feel unmotivated when going to work

There are confessions that employees did not feel interested in work as they need to

do similar job day by day It decreased their enthusiasm with current work and created barrier to accept new thing Current workload is quite high then they are facing difficulties

in setting up work-life balance and job stress comes as a result In addition, the job is becoming challenges if employees cannot receive the improvement in work or fail in overcoming the obstacles For more detail, comment from Distributor Representative indicated that high target and pressure to implement useful go-to-market strategy bring him anxiety From time to time, commitment with work is affected as they did not feel good when devoting to company

In conclusion, there are duplications in managers and employees’ interview result, which may indicate three potential problems occurring in PepsiCo They are company’s high business target, problem in employees’ low extrinsic motivation and low intrinsic motivation Some main and impressed interview result from 4 stakeholders was summarized

in the table below:

No Position Company’s high target Employee’s low

“Staffs, they did not feel motivated in work, just want

to maintain their stable life,

do not want to take change which is similar to take risk.”

“No ambition, less motivation to achieve higher level”

02 Planning

Manager

“Some managers in sales team have complained with us about too high target which was set for their team.”

“I did not feel enthusiasm from my team and the business partners I corporated with.”

“Sales team did not investigate more for other

sales strategy; operation team did not improve actual operation (KPIs, Productivity)”

“Lower merit increase percentage compared with average rate of company benefit growth.”

04 Distributor

Representative

“High target leads to stressful work and tardy performance.”

“Not interested in work due

to obstacles.”

Table 3: Summary of interview result – Potential problems

Interviewing with HR director have been performed to define the problem in PepsiCo and whether it could be easily proposed to change in conjunction with company’s current resources and general target

Discussion about company’s high business target clarified the importance and

mandatory of a high growth rate in sales volume and profit that PepsiCo Vietnam must

achieve in conjunction with Indochina market’s target Aiming to achieve the second

position in savory market and be the first one of salty snacks producer in 2020, PepsiCo Vietnam is developing a firm sales back ground by setting up a distributor and agency network along the country, focusing on rural markets However, sales volume growth target

in rural areas need to be maintained as 2 digits numbers In addition, general target for operation and functional team is that productivity projects saving need cover 90% total inflation in operation expenses Therefore, as a member of PepsiCo Vietnam, it is mandatory for each employee to try their best to achieve their personal target, which was aligned with Line Manager and Board of Director Furthermore, it is required a strong collaboration between departments to win the organization objectives Because of strong competition in FMCG market, the pressure is quite high for not only frontline but also back office employees That is reason why the amendment in business target allocation is not applicable

at this period of time

About extrinsic motivation, especially recognition program, HR director revealed that currently PepsiCo have operated a system for all employees to set their target, doing mid-year and full year review In which, the personal target is allocated from line manager including both business and people objective to ensure that employees’ working result are assessed in both aspects Every target need to be built based on SMART rule (specific, measurable, agreed upon, realistic and timely) to ensure that the assessment can be done easily based on a defined scale In addition, PepsiCo is recorded as top 10 employers as

CareerBuilder survey 2015, top 7 employers as Alphabe and Nielsen survey 2014 is considered as result of a good employer in FMCG market The insurance policy have been fixed as Government’s regulation plus Health insurance 24/7 package, which allow

employee to have health check in a wide range of hospital Salary budget is revised every year to ensure that PepsiCo is in the top 50 of the best players in the local job market In addition, the reward policy is unified for Asia – Pacific Region and it cannot be proposed to change from local requirement Total-rewards committee will take responsible for the guideline every year to identify the same policy for similar geography areas Then, it leads

to clear mission assigned to HR team to communicate with employees and to solve the problem between company and employees Changing employees’ mindset is one of the most important steps in order to build up one voice for the whole organization

Moreover, the informal recognition from Line Manager is assessed as not being on time and has not specific effect Making a choice between verbal and physical rewards is also in consideration to leverage its biggest effect Due to HR Director, PepsiCo care of personal development by having “People plan” for core talent employees in Management level, besides functional training course that every employee has, the talent people will have other soft skill courses to develop their ability as inherited class However, this program is not a mass application for all employees mainly due to company’s resource constrain Recent Organization Health Survey result also showed that employees detected low intrinsic motivation themselves, which leads to low score in commitment

Through the interview with HR director and analyzing results of interview with 4 stakeholders, it is reasonable to confirm and choose “low intrinsic motivation” to do deeper investigation and find out the solutions to solve this problem in term of company resource limitation From the investigation, low intrinsic motivation is affecting directly to company working quality and employee’s daily emotion, which lead to necessary to solve it timely from both company and employees’ perspective It is also in line with management team’s

requirement to improve organization health for new challenge coming In addition, from the interview, “low intrinsic motivation” is recognized greatly in functional team with initial

evidence to prove for the existence and damage to work quality Taking consideration of the biggest concern from the interview, the researcher will focus on dealing with low intrinsic motivation of functional team

1.3 Problem definition:

Being a critical aspect in investigating employees’ behavior, Ismail et al3 has stated that motivation is important element contributing to job performance enhancement It helps promoting people to maximize their abilities and accomplish satisfaction of needs as Hee et

al4 informed In addition, “motivation is determined by goal directedness, human volition or free will, and perceived needs and desires, sustaining the actions of individuals in relation to themselves and to their environment” according to Moody et al5 This definition is built from a general view but it contributed basic idea for psychological research on people’s behavior, especially in working environment As Moynihan et al6 identified, the main

mission and challenge of company is "inducing their employees to work toward organizational goals" The stronger the connection between company and employees is, the more effective performance is since the similar target is set Work motivation is defined as

"the degree to which a person wants to work well in his or her job, in order to achieve intrinsic satisfaction" as Reychav et al7 researched It is very clear to guide human behavior

“in response to self, other, and environment, supporting intrinsic satisfaction and leading to

the intentional fulfillment of basic human drives, perceived needs, and desired goals" stated

as Moody et al5 Pfeffer8 has justified that the key to long-term success of company is certainly the way to manage their employees Employee motivation is becoming an important part in improving organization’s operation or it is called as a strong predictor to

job performance because creating a high quality working environment through an enthusiastic team is a main step toward organizational effectiveness

However, having deep dive research on how should organizations do to motivate their people or encourage them to actively commit to the organization is very complicated Because motivation is a psychology-based and multidimensional concept linked to employees’ interaction with company, for a similar goal Therefore, motivation has moderate effects to employees’ awareness and behaviors which linked to job performance

with the level depended to specific context “Motivation that drives behavioral action decisions influences an individual's cognition, learning, and productivity in his or her personal and professional lives” as Moody et al6 In Self-Determination Theory informed by

Ryan et al9, there are two kinds of motivation, which are intrinsic motivation, in which the personal effort to do something since it is really interesting, and extrinsic motivation, which refers to do something because of other benefit

Ryan et al9 have stated that intrinsic motivation is conceptualized as an individual’s behavior to show their own satisfaction of the work itself In another way, a person intrinsically motivated will behave for the interest found inside the activity, through its fun

or challenge entailed The outside outcome such which is known as external motivations, pressures or rewards is not the main factor affecting owner’s decision Human naturally are active and curious, or having readiness to receive the new thing Therefore, intrinsic motivation is the desire to work on something that is interesting, challenging, satisfying, exciting or involving stated by Robbins et al10 Furthermore, Oldham et al11 assumed that intrinsic motivation is the extent of employee in excited about work activities and that is motivated to engage in it for the sake of the activity itself and not everyone is intrinsically motivated for any particular task Clearly, intrinsic motivation is good for the improvement

of work creativity, work quality and job performance when people have internal desires to perform a particular task that gives them more pleasure, develops a particular skill, or satisfies their self- esteem Intrinsic motivation helps employees have more creativity and strong desire to perform their best ability and expect to receive good evaluations from their supervisors and business partners Therefore, intrinsic motivated employees are interested in explore new pathways and to take greater risks as Amabile et al12 discussed

From an organizational perspective, intrinsic motivation is important factor as an employee who is focusing to their work by searching and improving better working methods

to get work done, and committed and excited to perform their jobs as Brunner et al13 has firmed Intrinsic job characteristics may include job characteristic and specification, skill and knowledge requirement, career opportunity, work challenge and others intrinsic elements Intrinsic motivation drives people to engage in activities that are experienced as inherently interesting and enjoyable Janus et al14 mentioned that it is grown by commitment

to work that is both satisfactory and fulfilling

There are two types of intrinsic motivation as Lindenberg15 The first one is enjoyment-based intrinsic motivation, in which people is encouraged to do something because of its pleasantness The action created enjoyment from the inside characteristic of action It feels like the freedom to do what you want or the opportunity to take on a challenge and enjoy the success without external rewards as Osterloh et al 16 The second type is obligation/ challenge-based intrinsic motivation It mentioned the feeling of person to perform as a duty to reach normal norm Individuals feel better when they observe group norms, such as ethical standards, professional codes of practice, or norms of procedural fairness as Tyler et al17 People will consider follow the norms, even if those norms can limit their self-interests In the other hand, individuals must accept the norms due to its legitimacy, which can be organized as regulation

1.4 Justify problem in term of existence

To confirm the existence of low intrinsic motivation of functional staff in PepsiCo, an interview has been taken place using the list of questions (Low et al18) It is 4-item scale built up to measure the existence of intrinsic motivation toward the job in Low et al18research :

1 When you do work well, does it give you a feeling of accomplishment?

2 When you perform your job well, does it contribute to your personal growth and development?

3 Do you feel a great sense of personal satisfaction when you do your job well?

4 Does your job increase your feeling of self-esteemed?

There are 5 informants were chosen to investigate their opinion, including: General accountant, former Planning Analyst, HR executive, Indirect procurement executive and Legal executive The common point of these 5 interviewees is that they are functional employees, who are main objects of this research, and have experience to work at PepsiCo

of more than 1 year They will understand current business, target, proceed and go through

at least 1 time employee assessment to give detail comment and meaningful finding Detail interview results can be found in Appendix 3

The answers from interviewees confirmed that most of employees are facing with low intrinsic motivation Employees’ enthusiasm with work have been decreased, especially after the change of operating model and under the hard competition of Fast moving consumer goods market these days They did not enjoy the feeling of success after finishing

a task but even received harder pressure to do it better next time The most common result from the interview strongly indicated that point as they mentioned that they did not enjoy when working well, “it is a kind of pressure reduction” (as General accountant) There is

also a gap “if doing comparison the feeling of accomplishment with the effort and pressure I have to adopt with” (indicated by Indirect Procurement executive) Furthermore, there are confessions that the exceeded job performance is not recorded well and the reward did not make them satisfied due to its small contribution to personal growth and development (as Planning analyst mentioned) There is hard to find out a chance to get promoted as all informants confirmed In a different way of expression, pressure from work is higher while the interest is not improved As other foreign company, cost control is becoming the most importance factor leading to success Workload has been increased since business is going

up but number of headcount is maintained As the result, employees are not willing to take the challenge to improve their self-efficacy The lower employees’ satisfaction is, the lower quality of working performance is HR executive has shared that even the working environment is good, “it is not a good place to adhere with and her enthusiasm with work is decreasing” It also affected to employees’ self-esteem Functional employees did not either find inspiration in work or breakout to come over challenges, that’s the reason why their

jobs are not interesting enough to consider for long retention

In conclusion, through the interview with 5 informants, the existence of problem is confirmed and there are some significant and impressive comments shown in the table:

No Position Question 1: Feeling

of accomplishment

Question 2:

Contribution to personal growth and development

Question 3:

Personal satisfaction

Question 4: esteem

Self-01 General

accountant

“Not exactly It brings

me the feeling of mission completion”

“Even I have finished all the task and exceeded some, there have not been

opportunity for me

to get promotion”

“It will be better

if the compensation and benefit can

be increased”

“My value is not confirmed if I can not break through the norm”

to become real since the company pay attention to manager level.”

“My extra performance is not recorded as I expect and so is

my development”

“Self-esteem feeling increased when we achieved the reward of best team, best

employee, in a short period of time”

“Benefit of an outsource cannot

be compared with

a permanent

“My enthusiasm with work is decreasing So is feeling of self-

problem, but the development in career path is not clear”

“I cannot foresee any movement or development in short time for myself”

“I am fine when the job go well

But it did not bring me great sense of satisfaction”

It is difficult to express since

“Well execution is

a part of job requirement, unless you have significant contribution”

05 Legal

executive

“There is not much fluctuation in my work, then the eager is reducing day by day”

“I recorded the growth when holding my job but

it requires more knowledge as well”

“I did as routine work then I cannot feel motivated well”

“I have not enjoyed the feeling

of self-esteemed”

as there is not much significant challenges in work requirement

Table 4: Summary of problem existence interview

1.5 Justify problem in term of importance

Ismail et al3’s research showed that as intrinsic motivation is a strong predictor to job performance, its importance is explained by 19 Gagné et al19 that job performance will be affected by ability and motivation Intrinsic motivation represents for high satisfaction with work, which leads to higher cognitive effort, a more effective processing of information, increased creativity and sustained identification with the firm In addition, intrinsic motivation improves the execution of simple tasks when these tasks require sustained effort and discipline as Koestner et al20 have declared Intrinsic motivation costs little apart from appropriate organizational measures, but occurs as a by-product of the activity in hand In line with theory informed, interview with 5 informants, who confirmed the existence of the problem in previous parts, have been performed, detail can be found in Appendix 4

“Intrinsic motivation was the strongest predictor of turnover intention” introduced by

Dysvik et al21 With lower intrinsic motivation, employees intended to have lower driven and less persistent in doing jobs Dysvik et al21 also stated that “Because high levels

self-of intrinsic motivation indicate that the employee has satisfied his or her needs for autonomy”, in the contrast, the one with lower level of intrinsic motivation found harder in

fighting obstacles in order to satisfy themselves by achieving the feeling of winner Currently, the level of commitment to organization is much lower, which is showed directly

in higher turnover rate (nearly double as 30% compared with 16% in previous years) As HR executive shared, one of the department targets is to minimize the impact of high turnover rate recently In addition, the result proved that the turnover intention due to job stress

appeared in almost functional departments, from Finance to Planning, HR, and legal The boring feeling and low intrinsic motivation together pushed the general accountant to find

“opportunity outside of PepsiCo” while experienced employees in Planning team decided to

leave after average of 3 years in work The interview result also showed that HR and Legal executives also keep in mind the thinking of breaking out if there is no improvement for them As confirmed in previous part, the turnover intention has directly impact to company’s performance The effect stands much longer since employees do not tend to refer

their acquaintance to apply for a vacancy in PepsiCo

Secondly, “intrinsic motivation influences our attitude to work, e.g as we want to work harder and better at our workplace, or to work more because we want to do it for the sake of the job itself, we wish to be acknowledged, or to become experts, to assume higher level responsibility, and last but not least, we like to be challenged” mentioned by Krajcsák

Z et al22 The answers from employees indicated that low intrinsic motivation has affected their enthusiasm to work and the intention to improve their working quality mentioned by General accountant and Planning analyst They even confirmed the existence of “ passive thinking and behavior” and do not want to confide with teammate (confessed by General

accountant) Working efficiency is not employee’s first prior attention Instead of that, they tried to finish their work as “moderate acceptable level and did not want to improve working ways” as general accountant shared and sometime they cannot “be creative at work” (Indirect procurement indicated) It is much more serious as stakeholders “have intention to

insist on protecting their opinion and not be open-minded” (Planning analyst commented)

In working environment, it is not good progression toward the general success of the group,

it is disadvantage to slow down company’s development

Thirdly, job involvement has been found to be related to intrinsic motivation positively validated by Rich23 As Planning analyst has mentioned, it is very difficult to fully corporate with finance team because they were also late in reactions to request from other team to provide data or advice for actual expenses From that point, it is easy to realize that employees care about their own target rather than focusing on general purpose of the company, which required collaboration The corporation of departments or even members in one team are affected accordingly Due to comment from Indirect procurement executive, she faced difficulties in dealing with new partners “as the experienced persons went out,

there is gap in the organization” The performance of group is incoherent as a result and the quality of decision cannot be judicious

Finally, low intrinsic motivation increased passive procrastination as stated by Seo24 because employees with low intrinsic motivation may determine their creativity according to their perception of task visibility In reality, there is delay in performance of employees, which showed in postponing and not met deadline for report and given task, especially for task which are not allocated, for example taking part in company refresh training (as HR executive mentioned) and subtask like innovating for productivity saving (as case of Indirect procurement executive) In the interview with Planning Manager and Finance director in

previous parts, it was also showed avowedly in the symptoms of the organization that the employees tend to prepare carelessly for the meeting or have tardiness in the operation The work pressure is higher, which causes to mental problem and conflict in work – life balance program (Indirect procurement executive confirmed)

While improvement of extrinsic motivation require more effort with title and financial reward, status and power, publicity and fame, intrinsic motivation tend to do more with meaning and purpose, service and duty, learning and growth as Ameet25 mentioned It’s better to have inner confidence than external validation

4

Firstly, Kumar26 has mentioned that level of knowledge workers is dependent upon perception of job characteristics Knowledge workers take the work such as research and development, advertising, education and professional services e.g., law, accountancy and consultancy as Beaumont et al27 have informed, Sveiby28 indicated that they are highly qualified and educated professionals Moody et al5’s theory assumes that a person's

motivation to work arises from the characteristics of the jobs he or she performs Results from interviews declared that detail job of functional team have repeated day by day and it is not required any innovation, especially part of General Accountant, HR and Legal executive The planning analyst has shared his opinion that “As finance team’s work is naturally paperwork, they did not have much opportunity to be directly involved in company’s trading or operating actions They may know what the activity is through the

claims, the purchase request, etc, but they will not view the full picture why we should do this activity and how it affected to daily operation or its benefit at the end It is similar for

HR and Legal executive since they do only paper work by holding mandatory training (for HR) and checking legal documents (for Legal) If they continued to do the same work day

by day, they will feel demotivated through continuing list of actions The fact is that employees feel bored when performing a repeated list of actions in their daily work They also did not feel satisfied while working in a stressful environment as Indirect procurement executive shared In long time, it creates stagnation in people thinking and behavior

Secondly, most of functional employees in PepsiCo have poor ambition and almost

do not want to prove for their abilities since their career development is not paid attention to

It is confirmed through the interviews with 5 informants They feel confused when the interviewer mentioned about their personal goal development and whether it is in line with company goal or not It is not a major task to build up strength for functional employees in company’s development orientation Less chance to have promotion or to expand working

experience are the symptoms of low goal orientation In the physical domain, Lee et al29suggested that differences in goal orientations can affect intrinsic motivation by influencing perceived competence or autonomy People who are higher on task orientation and lower in ego orientation should experience feelings of competence, because judgment of ability is self-referenced and success is determined by learning and self-improvement Because these criteria are under the person's control, individuals higher in task orientation are expected to experience an increase in intrinsic motivation when activities are mastered In real life, they face difficulty on concentrating in the specific work and experiencing give-up feeling as not being master in the area they intend to investigate From time to time, the intrinsic motivation is going down and abraded The resulted feeling is that they “finish the work without considering which is good for their career development” as shared by legal executive In fact, career development and talent sustainability for employee level is not in the current focused list of the company, therefore employees may feel inertia in their thinking and it constrains their intrinsic motivation

Thirdly, PepsiCo care of manager level by offering a more attractive rewards rather than employee level There is a deep decentralization in benefit system by level of employees, which may decrease intrinsic motivation of them In addition, the recognition from line manager is as important as from company as it is not frequent to get acknowledgement from organization, on-time compliment from line manager will have positive effects However it is not done well in PepsiCo According to Oldham et al11,

extrinsic and intrinsic motivation are not independent of each other Employee will work hard if he knows the results of his behaviors can satisfy certain needs, so organizations can motivate employees by some methods, which lead to satisfy employees' needs Worthy performance record and rewards are common methods of motivation Organizations know which methods motivate their employees more effectively Whereas verbal rewards tended

to enhance intrinsic motivation, physical rewards (even when the rewards were given controllably) can have a negative impact on intrinsic motivation when they are offered to people for engaging in a task without consideration of any standard of performance (Cameron et al30) In PepsiCo, it is unable to provide specific physical reward as HR Director mentioned in in-depth interview, company tends to change to use in-time verbal recognition and reward to compensate to employees However, functional employees claimed that they have not received deserved benefit and verbal recognition and compliment

is not performed naturally to get it effect employee’s comprehension and activity Furthermore, there is no basic standard for manager to perform the encouragement without being selfish and biased The indirect procurement executive has pressed the comment that company has not use effectively the “in-time encouragement and oriented employees to reach personal success” It naturally increases the feeling of dissatisfaction and therefore, employee’s intrinsic motivation decreased accordingly

Finally, motivational climate was the strongest predictor of enjoyment/interest and pressure/tension subscales Researchers have identified a mastery motivational climate as

being associated with higher levels of intrinsic motivation according to Seifriz et al31 In PepsiCo, even empowered employees are one of the key elements leading to success, it is not performed clearly by functional team There is not confidence from employees to express their own idea to improve working environment and they tend to maintain the norm

of current condition The interview results have shown that “there is lack of competition between members in a team It is easier for sales team or operation team to compete since they have clear target, for example to increase route visit, strike rate or sales volume; key performance indicators as controlling manning production, improve yield of material usage,…” Company cannot set the clear target for functional team by numbers or

percentage, it is not real In addition, company did not have much competition for employees to show their skills or innovation through projects After a long time, “functional team’s will and effort should be affected” has been mentioned by the former analyst Legal

executive also have the similar point of view that she “cannot share and discuss straightly thinking or even compete healthily” due to limited headcount number in the department and lack of competitive climate for cross functional to perform in

Overall, from results of interview, job characteristic, goal orientation, verbal recognition and compliment and motivational climate are considered as potential causes to employee’s low intrinsic motivation in PepsiCo

1.7 Causes validation:

Based on the impact of problem, most of interviewees revealed that they care of dealing with two main validated causes: job characteristics, recognition and rewards and interview results also showed that by tackling these two antecedents, problem is majorly resolved Employees feel easier to adapt gradually to the change instead of applying mass transformation in every working aspect The basic action to show company’s goodwill to enhance functional employees’ working quality is to allocate and to have clear job

description for staffs It is basic and effective tool for functional employees to reassess their value and mission in conjunction with company’s development Besides, verbal recognition

and rewards should be built up as a connection between management team and employees rather than its felicitation It could be communicational bridge to deliver employees’ aspiration to managers as well as sending hope and encouragement to staffs

They also claimed that maintaining personal goal orientation following company’s

development requires long steps and much more improvement since it should be review annually to reflect correctly the change of business condition Likewise, motivational climate improvement in the company cannot be applied for functional employees only It should be built as one of big action program for whole company to take part in to develop competition while maintaining collaboration It is in line with the limited budget for the first time company aimed to improve functional employees’ intrinsic motivation From these

rationales, solutions are taken into consideration for two antecedents: job characteristic and verbal recognition and rewards