Summary of Doctoral thesis of Economics: Employee motivation in state-owned economics corporations in Vietnam

General research objective providing an intensve literature review on motives and employee motivation; on which the thesis conducts the examination into the practical situations to propose solutions the improvements in Vietnam SOCs employee motivation in either macro-ecomic or micro-economic perspectives.

PHAN MINH DUC

EMPLOYEE MOTIVATION IN STATE-OWNED ECONOMIC CORPORATIONS IN VIETNAM

Major: Economic Management

Code: 9 34 04 10

SUMMARY OF DOCTORAL THESIS OF ECONOMICS

HA NOI – 2018

Scientific supervisors: Dr Vo Tri Thanh

Dr Tran Thi Thanh Hong

Reviewer 1: Associate Prof.Dr Nguyen Viet Vuong

Reviewer 2: Associate Prof.Dr Mac Van Tien

Reviewer 3: Associate Prof.Dr Bui Van Huyen

This thesis shall be defended in front of the Institute-level Thesis Examination Council of Central Institute for Economic

Management at … ……… on ……… 2018

This is also stored for referencing in :

- Central Institute for Economic Management library

- National Library, Hanoi

INTRODUCTION

1 Rationale of the thesis topic

The importance of human resource development to the national economic growth has been recognised widely To fruitfully utilise that resource for the development of the entrepreneurial community, the practical management process needs to be professionally implemented in all of the management phases, including human resource planning, selecting, recruiting, motivating the employees by orienting, training, developing, performance appraising, compensating them and their career path nurturing

With the huge potential and incomparable priorities on the uses of the resources that the state-owned economic corporations (SOCs) receive from the Government, the business performance indicators have not been really satisfactory enough Typically, having around 490,000 employees recently, the after-income-tax profits that the 8/10 of the SOCs (excluding PVN and Viettel) can generate are of merely 15,000 billion VND Thus, as per the productivity, one employee of these 8 SOCs annually can only bring about 30,612,244 VND in average This cannot be compared to the

2016 profit generation of the private Vingroup corporation employees (each of about 125,000,000 VND), so we do realise that

there are still chances to improve the productivity of the SOCs’

employees by motivating their working spirit toward their better working performance

Moreover, the 11th and 12th National Congresses of Viet Nam Communist Party have addressed the 3 strategic breakthrough aspects of the period of 2011 – 2020: “(1) Building the socialism-

oriented market mechanism with the core of establishing an equal business environment and administration procedure reform; (2) Fostering the development of the human resources, especially the high quality ones, by fundamentally and extensively renovating the national education, incorporating the human resource development with the advances and applications of science and technology; (3) Building an integrated system of infrastructure with some state-of-the-art sites, focusing on transport and metropolitan areas”

Therefore, the author has chosen the topic of Employee

motivation in state-owned economic corporations in Vietnam for

his doctorate thesis to help analyse the employee motivation process

in the Vietnam SOCs for a new and more suitable approach to be proposed

2 Objectives, meanings of researching the thesis topic

General research objective: Providing an intensive literature review on motives and employee motivation; on which, the thesis conducts the examination into the practical situations to propose

solutions to the improvements in Vietnam SOCs’ employee

motivation in either macro-economic or micro-economic perspectives

3 Structure of the thesis

Apart from the introduction, conclusion parts, list of references and the appendices, the thesis has been presented in 4 major chapters of content, including:

Chapter 1 - Literature review on employee motivation in the state-owned economic corporations

Chapter 2 - Theoretical foundation of employee motivation

and governmental management of employee motivation in the owned economic corporations

state-Chapter 3 - Status quo of employee motivation and governmental management of employee motivation in the state-owned economic corporations

Chapter 4 - Directions and solutions to employee motivation and governmental management of employee motivation renovation

in the state-owned economic corporations in the upcoming time

CHAPTER 1 LITERATURE REVIEW ON EMPLOYEE MOTIVATION IN THE STATE-OWNED ECONOMIC

CORPORATIONS 1.1 Literature review on employee motivation in the state-owned economic corporations

1.1.1 Published researches abroad

On motives and employee motivation

Raymond N.Cheser (1998) has laid the American employee motivation on the comparative perspectives for absorbing the possitive influences from the Japanese business managers This research has shown that with the shift from traditional management methods of the American manufacturers to the Japanese inherited

ones, the employees’ productivity has been improved dramatically

Afterwards, Ovidiu-Iliuta Dobre (2013) has revealed the fact that in the current world of open economies with many competitors and competitive manoeuvres like today, the care that the companies has put on the employee motivation is a strategically significant long-term vision

On economic corporations and their employees

As for the biggest economy in the world, the giant industrial economic corporations had become increasingly important as the pillars of the economic growth since 1905 in the context of rights and responsibilities being transferred to the businesses, and the institution

of stock exchange market, investment banks and the smooth movement of capital development

On governmental management of the economic corporations

In United States of America, the governmental interference into the production and businesses of the corporations is obvious In

France, on the other side, is the “invisibe reform”, which takes a long

time to take effects, and in China is the trial-and-error method in managing the corporations

On the roles of the government on the employee motivation

of the economic corporations

With the Baltic nations, the enforcement of the adult employee training activities has been crucial to the adequate formation of the pool of skilled labour With the other European developed countries, the policy focuses are on the application of active or passive labour policies toward the employment issue in the economy

1.1.2 Published domestic researches

On motives and employee motivation

Dao Phu Quy (2010) has done a thorough research into the hierarchy of needs of A.Maslow, which is widely recognised and adopted in the economic field of study in general and the management science in particular Nguyen Van Hiep, Nguyen Thi

Quynh (2014) have done 322 valid surveys in the FDI companies in Dong Nai province, in which the authors have revealed the directly

affecting factors on the workers’ working motives in these types of

enterprises

On economic corporations and their employees

Tran Dinh Thien and his counterparts (2014) have proved the necessity of state-owned enterprise structural reform, especially with the SOCs in Vietnam, because they are possessing huge number

of resources but being inefficient in their businesses Nguyen Khuong (2012), on the other side, has shown in his research the contemporary characteristics of the SOCs with clear development strategy recommendations

On governmental management of the economic corporations Tran Kim Hao and his counterparts (2015) have resulted in some significant suggestions in their research, including: (i) change

people’s mindset on the economic corporations; (ii) eradicate the

policy discrimination between the economic corporations and the other kinds of companies; (iii) enforce the adoption of market rules

in the establishment and development of the economic corporations

of all fields; (iv) readjust the economic corporations’ positions and

roles according to the new context; (v) apply the modern, world-class organisational structure and management expertise in the economic corporations; (vi) maintain the consistency of administrative control over the economic corporations, regardless of ownership sources

On the roles of the government on the employee motivation

of the economic corporations

Le Thi My Linh (2009) has proposed the diverse set of

solutions to the small and medium enterprises of Vietnam on human resources management, such as employee motivation-related contents of issuing policies, strategies for human resource development, employee training, career development, talent management, performance appraisal, and corporate culture building Afterwards, Luu Duc Hai (2015) also came with valuable recommendations, including: (i) redefine the high-quality human resources and high-quality human resources development; (ii) assure that the high-quality human resource is the breakthrough factor in

Central Party and Government’s perspectives; (iii) set a common list

of criteria in assessing high-quality human resources

1.1.3 Unsolved issues in the realm of the thesis topic in the published researches

The published researches have neither mentioned the profound aspects of employee motivation, especially in the SOCs nor stated the roles of motivation in developing the high-quality human resources nor figured out the new and renovative employee motivation model to bring about the valuable research conclusions for the circumstances of Vietnam

1.1.4 Focus of the thesis in solving issues through research

Theoretical model regarding the research approach to the SOCs of Vietnam; Viewpoints on employee motivation through policy making; Viewpoints of the labour towards the motivation policies; Directions in overcoming the existed shortcomings of the policy-making process and the SOCs' human resource management

1.2 Directions in solving the research problems of the thesis 1.2.1 Research objectives and research questions of the thesis topic

Research objectives: Researching and making clear the theoretical issues and the typical situations in global employee motivation to form the knowledge background as well as the

empirical lessons to the Vietnam legislators and the SOCs’ leaders;

Researching and making clear the practical situations of employee motivation process in the SOCs of Vietnam to get a correct view of the current issues for better analyses and suggestions for overcoming the shortcomings and weaknesses in the upcoming time; Incorporating the surveying and document-based methods to analyse the data for policy recommendations to the governmental

management and corporations’ control over the human resources in

SOCs, heading for renovations in employee motivation process therein

Research questions: (1) What are the theoretical issues regarding motives and motivation?; (2) How is the practical situation

of the governmental management of employee motivation in Vietnam SOCs?; (3) What are the context, directions and solutions to the renovation of SOCs' employee motivation process in Vietnam?

1.2.2 Research objects and scope of the thesis topic

The core objects of the research are in the following aspects: Vietnam SOCs’ human resources management and employee motivation process; SOCs’ employees, especially the office staffs

and the direct employees in producing and providing the

corporations’ services; the legislation authorities’ labour-policy

points of view; globally known employee motivation-centric human

resource management models and some chosen countries’

institutions and policies regarding the labour market

Scopes of research

Contents: The thesis concentrates on motives and employee motivation (definitions, roles, methods, implementation models) in all related domestic and international researches Especially, the research approaches the employee motivation issues through the basis of governmental policies Nevertheless, the practical situations

of employee motivation in Vietnam SOCs are also of high priority in the thesis Timing: The thesis is conducted in the years 2014-2017 However, the practical situations shall be studied in the period of

2009 – 2017 because of the big milestone in pilot establishment,

organisation, operation and management of the Vietnam SOCs since the promulgation of the Decree No.101/2009/ND-CP of the Government Spatial constraints: The SOCs, including parent companies and member companies in the nation within the related circumstances of Vietnam; governments and economic corporations

in the continents (Asia, Europe, Africa) for the empirical lessons to Vietnam state governance

1.2.3 Research approaches and methods

Research approach

The author has realised the significance of exactly determining the subjects and objects of the employee motivation process The subjects can be the governments, corporations, and even the professional associations The objects, on the other side, are the employees of Vietnam SOCs (almost are office staffs and direct employees in providing services and products in the research)

Specific research methods

Secondary data collection: The thesis uses popular

researching methods for working on the secondary sources of documents that have been published (especially, the legal documents), such as description, inductive and seductive analyses

Primary data collection: The questionnaire is for the SOCs’

employees in the cities and provinces (mostly Hanoi and the northern provinces of Vietnam) The sample size is 896 Duration of the survey is 2 years, from 2016 to 2017 All collected data from the survey sample are arranged and analysed manually or by the survey instruments like Google Doc and the SPSS version 22 The detailed results are presented in the Appendices of the thesis

CHAPTER 2 THEORETICAL FOUNDATION OF EMPLOYEE MOTIVATION AND GOVERNMENTAL MANAGEMENT OF EMPLOYEE MOTIVATION IN THE STATE-OWNED

ECONOMIC CORPORATIONS 2.1 Briefs on the theoretical foundation of employee motivation 2.1.1 Working motives and motivating employees

Motive is a notion that conveys the reasons for people to think and behave in some certain ways Motive plays the role of explaining the human beings’ actions

The components of employees’ motivation

The employees’ motivation consists of 2 major parts:

intrinsic and extrinsic ones The former fosters the employees to work to satisfy the inner self rather than to meet the outside demands

of some definite results of the latter

Methods of motivating the employees

Researches have shown that the effectiveness can be decided

by 3 main factors: working capability; working environment and working motives Thus, the methods of motivating the employees are also based on the requirements that these factors have set forth

Assessing criteria of the employee motivation outcome The hierarchy of needs of A.Maslow (1943) can be considered one of the most widely accepted theories in explaining

the human beings’ motives in the academic world while having few

proving evidences The popularity of this theory is unquestionable with the clear and easy-to-use 5 steps of the proposed hierarchy of A.Maslow These are also the groups of criteria that help us evaluate the employee motivation outcome in the SOCs of Vietnam They are classified into these below contents: Physiological factors (PH): monthly/annual income, annual bonus package; working environment; working infrastructure; Safety factors (SA): working safety; long-term working position; Trade Union’s activities; Social

factors (SO): colleague relationship; employer relationship; community connection; Self-esteem factors (ES): satisfaction with the current working position; organisational appraisal and

recognition; colleagues’ respect; Self-actualisation factors (AC):

studying chances; promotion chances; profession suitability

2.1.2 Typical theories on working motives and employee motivation

The hierarchy of needs of Abraham Maslow (1943): considers human beings a crucial socio-economic object always with the yearn for a happy life The normal life does not only need and stop at the physical needs but it also asks for futher mental needs to

be met, including freedom, love and being loved, creation, and knowledge gathering While the standards of living become higher,

the ability to meet the first-tier demands at the bottom of the hierarchy turns out to be much obvious, and as a consequence the other higher demands shall definitely require to be satisfied as well

Two-factor theory of Frederick Herzberg (1959): states that the hygiene factors should be best tackled by establishing a suitable mechanism for alleviating the negative feelings inside the

employees’ mind because only they can do that The possible

solutions are arranged in a descending order of: company policies, supervision, industrial relations, working conditions and colleague relationship respectively

Expectancy value motivation theory of David McClelland (1961): each person, regardless of gender, culture or age, shall have demands on achievement, affiliation and power due to their own motives Those incentives mostly depend on our culture and real-life experiences

Expectancy motivation theory of Victor Vroom (1964): revolves around the 3 key factors: expectancy (Expectation), instrumentality (Outcome) and valance (Reward)

Job characteristics theory of Hackman and Oldham (1980): figures out 5 basic contents of job descriptions that lead to 3 positive mental states, motivating the employees to work and contribute better

2.2 State- owned economic corporations’ employees and

stakeholders in motivating the employees in the state-owned economic corporations

2.2.1 State-owned economic corporations and the classification of employees in the state-owned economic corporations