LV thạc sỹ_Enhancing employee motivation at Vinacomin industry and mine investment consulting JSC

Main contents of the thesis...28 Table 3.1: Financial Performance within 3 years 2008-2010...33 Table 3.2: VIMCC’S Employee structured by sex...35 Table 3.3: VIMCC’S employee structured

At the beginning, I would like to express my most sincere thanks to BusinessSchool, National Economic University (BSNEU) with its all members, especiallyall my teachers, doctors, professors and their assistants for the knowledge andexperience that have been shared through their lectures, discussions and examsduring EMBA program, intake 8

Next, I would like to send my special thanks to Ph.D …

Lastly, I am deeply obliged to my classmates and my family who alwaysencourages and helped me during finishing the thesis

Once again, let me be thankful to other persons who are beside me in thefinishing period of thesis

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

ABBREVIATION 1

LIST OF TABLES 2

LIST OF FIGURES 3

EXECUTIVE SUMMARY 4

CHAPTER1: INTRODUCTION 6

1.1 Rationale 6

1.2 Research objectives 7

1.3 Research questions 8

1.4 Research methodology 8

1.4.1 Research process 8

1.4.2 Data collection 9

1.4.3 Data analysis 10

1.5 Scope of research 10

1.6 Structure of research 10

CHAPTER 2: THEORETICAL BACKGROUND ON EMPLOYEE MOTIVA-TION 11 2.1 Definition of employee motivation 11

2.2 Role and importance role of staff motivation 12

2.3 Applied theories on staff motivation 13

2.3.1 Relevancy of three theories to VIMCC 13

2.3.2 Maslow’s hierarchy of needs 14

2.3.3 Two factors theory of Herzberg 17

2.3.4 Equity theory of J Stacy 22

2.4 Relation of motivation and other functions of HRM 24

2.4.1 Role of human resources management 24

2.4.2 Other relevant factors of HRM 25

CHAPTER 3: ANNALYZING CURRENT EMPLOYEE MOTIVATION AT VIMCC 29

3.1 An overview of VIMCC 29

3.1.1 General information 29

3.1.2 Functions and duties: 30

3.1.3 Business results of VIMCC in the period of 2006-2010 33

3.1.4 The task-oriented business plans for the year 2011-2015 34

3.2 VIMCC’S human resources 35

3.2.1 VIMCC’S employee structured by sex 35

3.2.2 VIMCC’S employee structured by years of working experience 36

3.2.3 VIMCC’S employee structured by qualification 37

3.3 Current issues of employees motivation at VIMCC 38

3.4 Analyzing hygiene factors of employee’s motivation at VIMCC 39

3.4.1 Working environment 39

3.4.2 Company’s policy and administration 42

3.4.3 Quality of Supervision 50

3.4.4 Interpersonal relation 51

3.5 Analyzing motivation factors on employees motivation 54

3.5.1 Responsibility 54

3.5.2 Work itself 57

3.5.3 Compensations and rewards 60

3.5.4 Career development and training 64

3.6 Summary of findings about hygiene factors and motivation factors and rea-sons for them 69

3.6.1 The hygiene factors at VIMCC 69

3.6.2 The motivators at VIMCC 70

CHAPTER 4: RECOMMENDATIONS FOR ENHANCING EMPLOYEE MOTIVATION AT VIMCC 71

4.1 VIMCC’S vision for 2012 71

4.2 Recommendation for enhancing employee motivation at VIMCC 71

4.3 Improving Hygiene factors 72

4.3.1 Improving working environment 72

4.3.2 Improving Company policy and administration 72

4.4 Improving motivation factors 73

4.4.1 Diversifying the compensations and rewards systems 74

4.4.2 Establishing better the performance appraisal system (PA) to ensure eq-uity 75 4.4.3 Establishing effective feedback system for managing at VIMCC 76

4.4.4 Completing effective training program 78

CONCLUSION 80

REFERENCES 81

APPENDIX 1 82

APPENDIX 2 85

APPENDIX 3 87

CODECO Consultancy, Technology Development & Construction Company

(Hanoi University of Mining and Geology)

MICC JSC Mining Consultant Joint Stock Company

Table 2.1: Combination of three theories 24

Table 2.2 Main contents of the thesis 28

Table 3.1: Financial Performance within 3 years 2008-2010 33

Table 3.2: VIMCC’S Employee structured by sex 35

Table 3.3: VIMCC’S employee structured by years of working experience with the company 36

Table 3.4: VIMCC’S Employee structured by qualification 37

Table 3.5: Employee’s satisfaction about working environment 39

Table 3.6 Employee’s satisfaction on Company policy and administration 42

Table 3.7: Salary Comparison with other company 46

Table 3.8: Employee’s satisfaction on other benefits of VIMCC 49

Table 3.9 Employee’s satisfaction on Quality of Supervision 50

Table 3.10: Employee’s satisfaction on Interpersonal relation 52

Table 3.11: Employee’s satisfaction on Responsibility 55

Table 3.12: Employee’s satisfaction on Work itself 57

Table 3.13: Employee’s satisfaction on Compensation and rewards 60

Table 3.14: Employee’s satisfaction on Career development and training program 64 Table 3.15: Employee’s satisfaction on level of promotion opportunities 65 Table 3.16: Employee’s satisfaction on Fairness of possible growth of promotion 68

LIST OF FIGURES

Figure 1.1: Research process 8

Figure 2.1: Maslow’s hierarchy of needs 14

Figure 2.2: Job characteristics model 20

Figure 2.3 Equity theory of J Stacy 23

Figure 3.1: Functions and duties 32

Figure 3.2: VIMCC’S employee structured by sex 36

Figure 3.3: Employee’s satisfaction on Facilities of VIMCC 40

Figure 3.4: Employee’s satisfaction on Supporting equipment and Means of business transport of VIMCC 41

Figure 3.5: Employee’s satisfaction on Job Security of VIMCC 41

Figure 3.6: Employee’s satisfaction on Recruitment program 43

Figure 3.7: Employee’s satisfaction on Salary policy 45

Figure 3.8: Salary Comparison with other company 46

Figure 3.9: Employee’s satisfaction on Training program 48

Figure 3.10: Employee’s satisfaction on Interpersonal relation 53

Figure 3.11: Employee’s satisfaction on Autonomy in work 58

Figure 3.12: Employee’s satisfaction on Feedback from the manager 59

Figure 3.13: Employee’s satisfaction on Recognition with employee’s work done well 61

Figure 3.14: Employee’s satisfaction on Performance appraisal to appreciate your contribution 62

Figure 3.15: Employee’s satisfaction on training for young employee as next generation and effectiveness of budget for training 67

EXECUTIVE SUMMARY

In today’s competitive environment, managers are striving to motivate theiremployees to perform at high levels Numerous studies have shown a direct linkbetween employee motivation and high employee productivity but many companiesstill do not recognize the link between workforce motivation and businessperformance (Qenani-Petrela, Schlosser, Pompa, 2007) As motivation is critical toorganizational success, understanding the various types of individual motivation isimportant for effective use of resources Managers must find ways of motivatingemployees by developing programs or practices aimed at satisfying emerging orunmet needs

VIMCC is one of the leading consulting coal and mine for VINACOMIN.Human resources play an important role in developing company, however, keepingtalent employees staying for a long time is the problems which make VIMCC’smanagers have headache because there are more and more qualified employees leftVIMCC with more different reasons So VIMCC are facing more difficulties formanaging employees which affects to the operation of the company So enhancingemployee motivation is very necessary for VIMCC to limit the left employees.The thesis about “Enhancing employee motivation at Vinacomin Industry andMine Investment Consulting Joint Stock Company” is written in such currentcircumstance with the purpose to find our some methods to improve VIMCC’shuman resources Its objective is to provide the theoretical background on MaslowHierarchy needs, two factors of Herzberg and J Stacy equity to find out the factorsinfluencing in employee motivation at VIMCC Last, the thesis find out the hygienefactors and motivations factors and propose solutions to enhance employeemotivation at VIMCC

During the research process, the author conducted in-depth interviews with 3managers and 10 employees at VIMCC and survey 61 respondents at VIMCC and 2left employees of VIMCC about the relevant issues about enhancing employee

motivation Moreover, the thesis used Annual reports, Fund and other relevantreports of VIMCC.

After analyzing the current human management of VIMCC, the authorfounded main reasons causing dissatisfaction of employee of VIMCC such as: Lack

of means of business transport; poor facilities (infrastructure) of workplace;Dissatisfied human resources policy; Unclear recruitment process program;Unequal compensation system; Uncooperative employees in each department; lowquality and unequal of supervisors; ineffective feedback system, Ineffectiveness oftraining program

Hygiene factors are showed as in work environment, company policy and

administration, interpersonal relationship and quality of supervisors

Motivation factors are showed as in compensation and rewards,

responsibility, work itself and career development and training

Basing on discovered reasons, the author would like to suggest and

recommend some solutions for “enhancing employee motivation” These solutions

can make contributions to build up the policies in company Somerecommendations to enhance employee motivation for VIMCC should be done suchas: Improving working environment; improving Company policy andadministration; establish better performance appraisal; diversifying thecompensation and rewards systems; setting up new feedback system effectively;completing effective training program; reforming organization structure

The author hopes that this research’s result will help partly leader of VIMCC

to recognize and consider the importance of “enhancing employee motivation” in

human resources management

CHAPTER 1 INTRODUCTION 1.1 Rationale

Motivation is the key of a successful organizations to maintain the continuity

if the work in a powerful manner and help the company to survive Motivatingemployees leads to broaden skill to meet the organization’s demand The managershould have responsibility to work with employee to find out the individual needsand put them closed to the organization’s needs Satisfaction or dissatisfaction alsomight work as guidance for the manager to explore the needs of the employee tostart with it to motivate them and attract them to do better performance

The manager should motivate the employees to make them satisfactionbecause motivations create productive employees who can save more time andeffort for the company The motivated employees will do more than what isexpected and be more successful than others It is not just the matter of howmotivated the employees are, but also how prepared they are for the job Goodperformance depends on whether employees are able to do things The level ofperformance depends on the level of motivation that stimulated some one to workand carry out the necessary tasks to achieve the goals

The motivation is important in any workplace and it is personal and differentfor each employee Depends on different needs will be created to satisfy theseneeds Some needs and motivation theories have been discussed in the study toclarify what might affect the motivation

Vietnam Industry and Mine Investment Consulting Joint Stock Company(VIMCC) is one of leading companies in mine designing and consulting projects ofindustrial and civil serving for the mining, processing and consumption, trade andtechnology transfer in Vietnam for many years However, the employee motivation

in VIMCC is not implemented well enough to develop VIMCC stronger andstronger which affects to the strategy of the company

With the huge employees reaching up to 397 in which university and collegelevel occupying 83%, which makes VIMCC develop stably and strongly for the pasttime, they have ability enough to complete their duty excellent so all works seemsmooth and make turn-over increased rapidly However, since 2009, there weremore and more employees left from VIMCC makes delayed the process of works.Many employees disappointed with the motivation performance of company assalary, reward, recognition, work environment, and so on Moreover, someemployees felt that they were behavior unequally to others in company That madethe leader difficult to manage the company Estimation from 2009 up to 2011, therehave been 50 left employees include chief of department and managers It wasreally problem for VIMCC leader to find out the solution for these problems

So VIMCC now is facing with some problems of employee motivation Infact, there are many employees left VIMCC for the past few years, who aresuccessful in the other company with the same fields The employees are complaintabout low income, unstable work, unstable job contract, uncompetitive environmentand dissatisfaction, unfair treatment, unrecognizing and so on Moreover, theemployees are dissatisfied with their work because there is no motivation for them.Reward, recognition, training and development are not paid attention properly Toget achievement which the company set out, improving humane resources play vitalrole for the managers to find out in practice what the level of employee motivationthe company is It is very good for them to dig deeper in reward and recognitionwhich is valuable in the future as manager

1.2 Research objectives

Objectives of the research are:

- To synthesize relevant theories of motivation with VIMCC

- To analyze the current motivation of employee to identify motivators and motivators at VIMCC

de To propose some solutions to enhance employee motivation for VIMCC

1.3 Research questions

The research must answer the followings questions:

1 What are the motivation factors and de-motivation factors in VIMCC?

2 What are the factors influencing employee motivation at VIMCC?

3 How to enhance employee motivation at VIMCC?

1.4 Research methodology

1.4.1 Research process

Figure 1.1: Research process

1.4.2 Data collection

The research uses two sources of data to analyze

Primary data collection:

Interviews: The data which is used for researching and analyzing is the

information selected from employees and manager of VIMCC The purpose ofinterview of VIMCC’s employees and managers is to know how the managersunderstand their employees and how they evaluate their behavior in the company.Basing on the analyzed information, the thesis can bring forward the managers ofVIMCC more effective solutions

Table 1.1: Data collection

Methodology Respondent Information need to collect

In-depth

interviews

3 managers and 10employees at VIMCC

- Factors affecting to employee’s satisfaction and motivation at VIMCC now

Survey

(questionnaires)

61 employees andmanagers at VIMCC

- Situation of employee motivation at VIMCC

- Assessment about policy and administration of employee motivation

at VIMCCIn-depth

interviews

2 left employees ofVIMCC

- To make clear about the reason of leftemployees

- How to make employees satisfied

- Survey method:

- The survey was sent to 100 people at some departments at VIMCC Thenumber of valid questionnaires used in research 61respondents

- Questionnaires: The questionnaires were designed for VIMCC’S staffs,

em-ployees left from VIMCC For detailed, please see Appendix 1 for references Thesequestionnaires distributed to VIMCC’S managers aiming at finding what are HRM

policies and practices and which kind of problems they are facing with the mentations

imple For in depth interview: It was conducted with 3 managers and 10 employimple

employ-ees at VIMCC and 2 left employemploy-ees from some departments as: HRM Department,Technical Department, Financial and Accounting Departments, Transaction Depart-ment, Lo Thien Department who provided the current information on human re-sources management in the company

Secondary data collection: Employee in every department in VIMCC and

other relevant reports of VIMCC to analyze the reality of employee motivation suchas: VIMCC policies and reports and documents from 2008-2010, Salary policiesdocument, and other regulations

1.4.3 Data analysis

Raw data gathered from the interview and questionnaires are analyzed by

MS Excel Statistical tests are performed to generate the results suggesting howemployees satisfy with the company’s human resources policies such as motivationfactors The reaction of employees is also analyzed to determine whether thosepolicies really satisfy the employees and lead to the better performance

1.5 Scope of research

The research was carried out at 565 Nguyen Trai, Thanh Xuan, and Hanoiwhere VIMCC’S head office is located With more than 397 employees in 17departments, the head office has the main responsibility of managing the wholecompany in designing, consulting labor, company administration, etc The researchconcentrated on enhancing motivation of employees at staff- level The researchcollected information about VIMCC in the 2008-2010 periods

1.6 Structure of research

Chapter 1: Introduction

Chapter 2: Theoretical background on employee motivation

Chapter 3: Analyzing current employee motivation at VIMCC

Chapter 4: Solutions to enhancing employee motivation at VIMCC

CHAPTER 2 THEORETICAL BACKGROUND ON EMPLOYEE

MOTIVATION 2.1 Definition of employee motivation

Motivation is a complex phenomenon which is influenced of individual,culture, ethnic and historical According to Den Cenzo at, al, (1996), people whoare motivated use a greater to perform a job than those who are not motivated.Motivation can be defined as “a series of energizing forces that originate both withand beyond an individual’s self” These forces determine the person’s behavior andtherefore influence his/her productivity (Jackson, 1995) In other words this meansthat all thinkable factors of physical or psychological aspects that we interact with,leads to a reaction within our self or of the entire organization This action can beeither positive or negative and lead to an increased or decreased productivity andmotivation Energizing forces can therefore be anything from the work environment

to the charisma of the management and so on

Another definition of motivation may be defined as the desire and willing ness

of person to do the best possible job or to exert the maximum effort to performassigned works (Cardy, 2001)

Motivation is the forces within an individual that account for the level,direction and persistence of effort expended at work Level refers to the amount ofeffort a person puts forth (e.g., a lot, a little, direction refers to what person choosewhen presented with a number of possible alternatives (e.g., whether to exert efforttoward product quality or product quantity); and persistence refers to how long aperson sticks with a given action; (e.g to try for product quantity and give up when

it is found difficult to attain) (Cascio, 1998)

In order to be motivated, a person needs to have certain basic needs fulfilled

If these needs are lacking, a person self esteem and self -actualization can notdevelop This could result in lack of interest to progress and develop, both

professional and personally There are several theories of human needs which arethe foundation of motivation (Latham and Ernst at al., 2006).

2.2 Role and importance role of staff motivation

“Motivation is the key to performance improvement”

There is an old saying you can take a horse to the water but you cannot force it

to drink; it will drink only if it's thirsty - so with people They will do what theywant to do or otherwise motivated to do Whether it is to excel on the workshopfloor or in the 'ivory tower' they must be motivated or driven to it, either bythemselves or through external stimulus

Are they born with the self-motivation or drive? Yes and no If no, they can bemotivated, for motivation is a skill which can and must be learnt This is essentialfor any business to survive and succeed

Performance is considered to be a function of ability and motivation, thus:

Job performance =f(ability)(motivation) (Gerhart, 2003)

Ability in turn depends on education, experience and training and itsimprovement is a slow and long process On the other hand motivation can beimproved quickly There are many options and an uninitiated manager may not evenknow where to start As a guideline, there are broadly seven strategies formotivation

Positive reinforcement / high expectations

Effective discipline and punishment

Treating people fairly

Satisfying employees needs

Setting work related goals

Restructuring jobs

Base rewards on job performance

These are the basic strategies, though the mix in the final 'recipe' will varyfrom workplace situation to situation Essentially, there is a gap between an

individual’s actual state and some desired state and the manager tries to reduce thisgap.

Motivation is, in effect, a means to reduce and manipulate this gap It isinducing others in a specific way towards goals specifically stated by the motivator.Naturally, these goals as also the motivation system must conform to the corporatepolicy of the organization The motivational system must be tailored to the situationand to the organization

2.3 Applied theories on staff motivation

2.3.1 Relevancy of three theories to VIMCC

In this study we use three theories as: Maslow’s hierarchy, two factors theories

of Herzberg and the equity theory of J Stacy because three theories are suitable foranalyzing staff motivation of VIMCC in case:

Firstly, Maslow’s theories help to understand human motivation managementtraining and personal development and the manager understand which needs moreimportant for individual employees to have good human resources policy tomotivate them up to the higher and higher class From that, VIMCC can stimulatehuman resources policy to motivate them more

Secondly, two factors of Herzbeg help the manager considers about companypolicy, supervision, interpersonal relations, working conditions and salary Theseare de-motivation factors and motivation factors The manager can appreciate thesatisfaction and dissatisfaction about works of employees From the survey, theauthor find out which factors are satisfied the employees of VIMCC, which factorsare dissatisfied them and find out the solution to motivate them

Lastly, J Stacy theory of equity helps the manager and policy makers toappreciate inputs and outputs with relevant people Apply this theory VIMCCanalyze the external equity and internal equity to find out the way to motivateemployees

2.3.2 Maslow’s hierarchy of needs

Abraham Maslow developed Hierarchy of Needs model in 1940-1950s’ USA,and the Hierarchy of Needs theory remains valid today for understanding humanmotivation management training and personal development Indeed, Maslow’s ideassurrounding the Hierarchy of Needs concerning the responsibility of employers toprovide a workplace environment that encourages and enables to fulfill their ownunique potential (self-actualization) are today more relevant than ever

If motivation is driven by the existence of unsatisfied needs, then it isworthwhile for a manager to understand which needs are the more important forindividual employees In this regard, Abraham Maslow developed a model in whichbasic, low-level needs such as physiological requirements and safety must besatisfied before higher-level needs such as self-fulfillment are pursued In thishierarchical model, when a need is mostly satisfied it no longer motivates and thenext higher need takes its place Maslow's hierarchy of needs is shown in thefollowing diagram:

Maslow's Hierarchy of Needs

Figure 2.1: Maslow’s hierarchy of needs

Physiological Needs

Physiological needs are those required to sustain life, such as: air, water, food,sleep, sex… which are essential for life

According to Maslow's theory, if such needs are not satisfied then one'smotivation will arise from the quest to satisfy them Higher needs such as socialneeds and esteem are not felt until one has met the needs basic to one's bodilyfunctioning.

Safety

Once physiological needs are met, one's attention turns to safety and security

in order to be free from the threat of physical and emotional harm Such needsmight be fulfilled by:

Living in a safe area

Need for friends

Need for belonging

Need to give and receive love

Esteem

Once a person feels a sense of "belonging", the need to feel important arises.Esteem needs may be classified as internal or external Internal esteem needs arethose related to self-esteem such as self respect and achievement External esteemneeds are those such as social status and recognition Some esteem needs are:

Self-respect

Achievement

Attention

Self-actualization is the summit of Maslow's hierarchy of needs It is the quest

of reaching one's full potential as a person Unlike lower level needs, this need isnever fully satisfied; as one grows psychologically there are always newopportunities to continue to grow

Self-actualized people tend to have needs such as:

Truth

Justice

Wisdom

Meaning

Self-actualized persons have frequent occurrences of peak experiences, which

are energized moments of profound happiness and harmony According to Maslow,only a small percentage of the population reaches the level of self-actualization

The application of Maslow’s needs hierarchy for management, an

important point for management to keep in mind is that employees are motivated byneeds that are not satisfied A lower level needs are satisfied, they retain lessmotivational value in an individual behavior A need does not have to be completelysatisfied, however, before the next level of need merges A person need to movefrom stage one to two and three when stage one is 80% percentage The difficulties

to use need hierarchy concept is the variability in the amount of satisfactionrequired before moving from one to other category The manager can see thesedifficulties to determine which needs are relatively unsatisfied in order to affect tothe behavior of employees

There are some important implications for management There are

opportunities to motivate employees through management style, job design,company events, and compensation packages, some examples of which follow:

Physiological needs: Provide lunch breaks, rest breaks, and wages that aresufficient to purchase the essentials of life

Safety Needs: Provide a safe working environment, retirement benefits, andjob security

Social Needs: Create a sense of community via team-based projects and cial events

so-Esteem Needs: Recognize achievements to make employees feel appreciatedand valued Offer job titles that convey the importance of the position

Self-Actualization: Provide employees a challenge and the opportunity toreach their full career potential

However, not all people are driven by the same needs - at any time differentpeople may be motivated by entirely different factors It is important to understandthe needs being pursued by each employee To motivate an employee, the managermust be able to recognize the needs level at which the employee is operating, anduse those needs as levers of motivation

2.3.3 Two factors theory of Herzberg

Frederick Herzberg’s book “The motivation to work”, written with researchcolleague Bernard Mausner and Barbara Block Snyderman in 1959, first establishedhis theories about motivation in the workplace Herzberg’s survey work, originally

on 200 Pittsburgh engineers and accountants remains a fundamentally importantreference in motivational study While the study involved only 200 people,Herzberg’s considerable preparatory investigations, and the design of the researchitself, enable Herzberg and his colleagues to gather and analyses an extremelysophisticated level of data

Frederick Herzberg’s theory is a modification of Malow’s theory He hadnotices the notion that those factors which cause job satisfactions are the opposite to

those that caused job dissatisfaction Herzberg survey was carried from a group ofaccountants and engineers The conclusion is that employee are influenced by two

factors are motivators and hygiene factors Motivators create job satisfaction which

permit psychological growth and development on the job such as achievement,recognition, responsible, advancement, challenges and the work itself and otherintrinsic aspects when there are fulfilled On the other hand, hygiene factors willenhance dissatisfaction when they are not fulfilled These include security, salary,work condition, company policy and administration, supervision, interpersonalrelations with subordinates and supervisors, status and so on

Herzberg (1959) constructed a two-dimensional paradigm of factors affectingpeople's attitudes about work According to the theory, the absence of hygienefactors can create job dissatisfaction, but their presence does not motivate or createsatisfaction

2.3.3.1 Hygiene factors

Hygiene factors are those factors which are essential for existence ofmotivation at workplace These do not lead to positive satisfaction for long-term.But if these factors are absent / if these factors are non-existent at workplace, thenthey lead to dissatisfaction In other words, hygiene factors are those factors whichwhen adequate / reasonable in a job, pacify the employees and do not make themdissatisfied These factors are extrinsic to work Hygiene factors are also called as

dissatisfies or maintenance factors as they are required to avoid dissatisfaction.

These factors describe the job environment / scenario The hygiene factorssymbolized the physiological needs which the individuals wanted and expected to

be fulfilled Hygiene factors include:

* Company policy and administration: There are two kinds of over-all

company policy and administration characteristics One involved the adequacy orinadequacy of company organization and management It means that theorganization and management have to be clear about the task of employees andmake them satisfied with their work

* Supervisor- technical: It can be classified as competence or incompetence,

fairness or unfairness of supervisors This category is also about the supervisor’swillingness or unwillingness to delegate responsibility or his willingness orunwillingness A supervisors kept things smoothly and efficiently reported asfactors in a sequence of events that led to exceptional feelings about the job

* Salary: It is a compensation role Salary should be appropriate and

reasonable It must be equal and competitive to those in the same industry in thesame domain

* Interpersonal relations- supervision play an important role to involve

recognition or changes in status with the company or company and managementpolicies The relationship of employees with his peers, supervisors and subordinatesshould be appropriate and acceptable There should be no conflict or humiliation

* Working condition: is a physical condition of work, amount of work or

facilities available for doing the work Working condition should be adequate, safe,clean and hygienic; the work equipment should be updated and well-maintained

2.3.3.2 Motivation factors

According to Herzberg, hygiene factors cannot be regarded as motivation

factors The motivation factors yield positive satisfaction These factors are inherent

to work These factors motivate the employees for a superior performance Thesefactors are called satisfiers These are factors involved in performing the job.Employees find these factors intrinsically rewarding The motivators symbolizedthe psychological needs that were perceived as an additional benefit Motivationfactors include:

* Recognition: This category was some act of recognition including

supervisor, some other individual in management, management as an impersonalforce, a client, a peer, a professional colleague or general public The definingcharacteristic was the emphasis on the act of recognition or on the characteristic ofinteraction

* Work itself: This category mentioned about the feeling of the employee

about the job Thus, job can be routine or carried, creative or studying, overly easy

or overly difficult But Richard Hackman and Greg Oldham, job characteristics theory states that employees will be more motivated to work and more satisfied

with their jobs to extent that jobs contain certain core characteristics which arerelated to beneficial work out-comes, including high work motivation There arefive core job characteristics that activate three critical psychological states are:

Figure 2.2: Job characteristics model

- Skill variety: The degree to which the job requires the person to do different

things and involves the use of a number if different skills, abilities and talents

- Task identity: The degree to which a person can do the job from beginning

to end with a visible outcome

- Task significance: The degree to which the job has a significant impact on

the others-both inside and outside the organization

- Autonomy: The amount of freedom, independence, and discretion the

employee has in areas such as scheduling the work, making decisions anddetermining how to do the job

- Feedback: The degree to which the job provides the employee with clear

and direct information about job outcomes and performance

* Achievement: Achievement also includes its opposite, failure, and the

absence of achievement This category included the following: successfullycompletion of a job or aspect of it, having a good idea or solution to problems,made money for the company, vindication, and seeing the result of one’s work

* Possibility of growth: This category was considered as an objective factor

in the situation may sound paradoxical However, in some cases, possibility ofgrowth were increased or decreased It includes not only the likelihood that theindividual would be able to move onward and upward within the organization butalso a situation possible of growth to advance the own skills and profession

* Advancement: Advancement was an actual change in the status or position

of the person in the company In situation in which an individual transferred from

on part of the company to another without any change in status but increasedopportunities for responsible work, the change was considered and increasedresponsibility, but not formally an advancement

It is important to understand that the two types of factors are not mutuallyexclusive and that management must try to fulfill both types of need for an

employee to be truly satisfied with their job Once the Hygiene factors have been

satisfied providing more of them will not create further motivation but notsatisfying them may cause de-motivation; unlike the Motivation factors wheremanagement may not fulfill all of them but the workers may still feel motivated Major companies have recognized this situation when designing their methods ofreward and recognition (http://www.trainanddevelop.co.uk/article/frederick-herzberg-theory-of-motivation-a78)

The Two-Factor theory implies that the managers must stress uponguaranteeing the adequacy of the hygiene factors to avoid employee dissatisfaction.Also, the managers must make sure that the work is stimulating and rewarding sothat the employees are motivated to work and perform harder and better This

theory emphasize upon job-enrichment so as to motivate the employees The jobmust utilize the employee’s skills and competencies to the maximum Focusing on

the motivational factors can improve work-quality

2.3.4 Equity theory of J Stacy

According to equity theories, introduced by J Stacy Adam, stated thatemployees compare the ratio of their inputs (efforts) and out comes (rewards) to theinput-outcome ratios of other employees who are viewed as comparable tothemselves (Bowditch, 1997)

-Person’s own inputs comparable other’s input

Education, experience, job qualifications, skills, etc, are the input to the job byemployees The outcomes of the employees receive from the job are: pay, benefit,rewards, intrinsic job factors, etc

The equity happens when an employee compares the outcome/person’s owninputs is equal to the ratio of the other employee outcome to inputs The inequityhappens if the ratio is not equal For example, an consulting senior employee withmany years of working experiences and high education get the same salary as a new

or graduated journal employee, the senior employee will perceive it as inequity andunfair

When employee perceive an inequity, he/she will do in one of the followingaction (Dubrin, 2002)

- Alter the outcome: An underpaid person will ask for more salary or bonus,

promotional opportunities, or vacation time

- Alter the inputs: An unpaid person or a person who feels treated inequitable

might decrease effort or time devoted to work Someone even create faking sickdays to take care of personal business

- Distort the perception: a person, who feels of inequity, can distort his/her

perception of their own or other’s inputs or outcomes

- Changes the reference source: he/she can change to another reference

source whose outcome/input ratio is similar to his/her own

- Leave the situation: A person, who feels of inequity, can choose to quit a

job and get greater equity in another

Figure 2.3 Equity theory of J Stacy

There is very little application of Equity in the workplace Furthermore, theindividual are very sensitive with inequity It is better to identify those inequitiesand have some research before some application can be applied (motivation to work2007)

In conclusion, J Stacy theory show that the individuals are concerned both

their own rewards and comparison with others The theories also pointed thatemployees expect a fair and equitable return for their contribution to their jobs anddecide what their equitable return should be after comparing their inputs andoutcomes with what others get in their colleagues Last but not least, employeeswho perceive themselves as being in an inequity scenario will attempt to reduce theinequity either by distorting inputs and/or outcomes psychologically, by directlyaltering inputs and/or outputs, or by quitting organization

For this study, Herzberg two factor theories is used mainly to analyze because

two theories imply that the manager must stress upon guaranteeing the adequacy ofthe de-motivation factors to avoid employee dissatisfaction Also, managers mustmake sure that the work is stimulating and rewarding so that employees aremotivated the employees The job must utilize the employee’s skill andcompetencies to the maximum Focusing on the motivational factors can improvework-quality The combination of three theories will be used in the thesis

Table 2.1: Combination of three theories Maslow’s need

hierarchy theory

Herzberg two factors

theory

J Stacy Adam

Self-actualization Advancement and

possible of growth Fairness-unfairness

Recognition Fairness- unfairness

relationship

Working environment Fair - unfairness

2.4 Relation of motivation and other functions of HRM

2.4.1 Role of human resources management

Human resources management refers to the policies, practices and systemsthat influence employee’s behavior, attitudes and performance The humanresources department takes full responsibility for human resources activities insome companies The key to sustained survival and organizational success lies notonly in the rational, quantitative approaches, but more to the commitment ofemployee’s involvement and motivation to work Human resources management as

a consequence is more fundamental today for the success of any organization thanever before Employees are considered as vital resources which need to be attributedgreater attention and constantly developed

2.4.2 Other relevant factors of HRM

- Rewards: an employee reward system comprises of an organization’s

incorporation policies, processes and practices for rewarding its employees inharmony their contribution, skills and competence and their market growth Thereward system consists of financial rewards (fixed and variable pay) and employeebenefits, which together comprises total compensation The system alsoincorporates non-financial rewards (recognition, praise, achievement, responsible).But the most important system of rewards includes salaries, bonuses and privileges.The aim of reward is to help to verify not only performance in relation to currentgoals but also influences the possibility of people joining and remaining in anorganization On the other hand, reward system can lead to the steady deterioration

of an organization and why not it’s immediate demise (Flamholtz 1996, 99) Thereare two types of rewards: financial rewards and non-financial rewards

Financial rewards: Some directly provide the employee with cash or money.

Bonuses based on performance against budget, quality or other standards may beused as immediate financial incentives Management rewards by bonus havebecome popular in some company as a means of providing employees withimmediate bluster for completion of a project or activity (urich & lake 1990, 157)

Non- financial rewards: it can make available a framework within which

high levels of motivation could be accomplished through non-financial rewardssystems by the provision of opportunities for learning and development Butpersonal management skills still have key role to play in deploying their ownmotivating skills to get individual within their organization to give their bestperformance by to making good use of the motivational system and processesprovided by the company (Amstrong 2008, 221)

Compensation: is the single most important cost in most company It shows

the effectiveness of the compensation to make a significant difference in gaining orlosing a competitive edge, so how much is paid and who gets paid what are crucialstrategic issues for the company

Fixed or variable pay: The Company can choose to pay a high proportion of

total compensation in the form of base pay or in the form of variable pay

Monetary or non-monetary rewards: The companies that emphasize

monetary rewards want to reinforce individual achievement and responsibility.Those that non-monetary rewards prefer to reinforce commitment to theorganization Thus, a great emphasis on monetary rewards is general found amongthe company facing with low job security, firms emphasizing sales rather thancustomer service, and firm trying to foster a competitive internal climate rather thanlong-term employee commitment A greater reliance on non-monetary rewards isusually found in companies with a relatively stable workforce, those that emphasizecustomer service and loyalty rather than fast sales growth and those that want tocreate a more cooperative atmosphere within the firm

Open or Secret pay: Open pay has two advantages over secret pay First,

limiting employees’ access to compensation information often leads to greater paydissatisfaction because employees tend to over-estimate the pay of coworkers andsuperiors Second, open pays forces managers to be more fair and effective inadministrating compensation because bad decision can not be hidden and gooddecision can serve as motivators to the best employees Open pay can fosterperception of fairness and greater motivation only in a climate that nurturesemployees relation So the manager often severely restrictedly in what they can andcan not do with regard to compensation issues

Performance Appraisal: are used administratively whenever they are the

basic for a decision about the employee’s work condition, including promotion,termination and rewards Developmental used of appraisal, which are geared towardimproving employee’s performance and strengthening their job skill, includeproviding feedback, counseling employees on effective work behaviors, andoffering them training and other learning opportunities

If appraisal is not done well, performance is not measured accurately andfeedback is poorly given, the cost of conducting the appraisal may exceed its

potential benefits Thus, performance appraisal should be eliminated as a practice inorganization because of the problems and errors in evaluating performance Mostorganization recognizes employees as an important and nonrandom influence onperformance However, in order to maintain and improve their performance,employees need assessment and feedback

Career Development and training: Training and development often go hand

in hand and the terms are often used interchangeably, the terms are notsynonymous Training typically focuses on providing employees with specific skillsand helping them to correct deficiencies in their performance

Development is an effort to provide employees with the abilities that theorigination will need in the future The organization should identify the goals oftraining

Training can take place either on the job or off the job and can be deliveredthrough a variety of techniques The most appropriate type of training should bechosen to achieve the stated objective The organization should evaluate the costand benefits of the training program to determine the effectiveness While careerdevelopment is an ongoing organized and formalized effort that focused ondeveloping enriched and more capable employees The assessment may be carriedout by the employees themselves, by organization or by both Organizationassessment is done through assessment center, performance appraisal, promotionability forecasts and succession planning Career development may receiveindividual career counseling or information from a variety of sources including job-posting system, skills inventories, career paths, and career resource centers

From these theories, the conclusion of the study’s contents mainly focus

on Herzberg extended:

Table 2.2 Main contents of the thesis

Compensation and Rewards Working environment

 Financial compensation (money,

 Fairness and unfairness of

compensation and rewards

 Job stability

 Supporting equipment for job

 Business means of transport

 Fairness and unfairness of career

development and training

Quality of Supervisors

Constructive feedback to employees

Assistance of supervisors toemployees

Management capability ofsupervisors

CHAPTER 3 ANNALYZING CURRENT EMPLOYEE MOTIVATION

AT VIMCC

Email: info@vimcc.vn; vimcc@vnn.vn

 Business registration number: 0500237543 issued by Department of

planning and

Charter capital: 16.000.000.000 VND (sixteen billions Vietnamese dong)

Director: Mr Pham Cong Huong

Incense production business of the company includes agency companies andsubsidiaries (enterprises) which belong to the company

 Employee’s workforce of the company: 397 people; 83% of whom have

graduated from colleges and universities

 Fields of activities: consulting and designing mine and industrial civil

services, for joint exploitation, processing and consumption of products, trade and

technology transfer VINACOMIN INDUSTRY AND MINE INVESTMENT CONSULTING JOINT STOCK COMPANY is a subsidiary of the

VINACOMIN Group, with a long history of 45 years to grow and mature andexperienced officers in doing design consultancy work, the company has beenranked the top in consultation and mine investment in Vietnam; activelycooperating and expanding into foreign markets To maintain sustainabledevelopment, the company has been actively investing in facilities, technologyinnovation, specifications, and applying advanced management measures toimprove the implementation process and at the same time invest in expanding intoother business areas The company has established a quality system and quality

goals which are maintained, reviewed and regularly improved in accordance withinternational standard ISO 9001: 2000.

3.1.2 Functions and duties:

1 Making Investment report as well as investment projects to build industrial,civil, electrical energy, transportation, communications, and environmentalprotection groups

2 Planning Designs, establishment of development plan mining industry.3.Constructing Topographical, geological, hydrological, geological andecological environment

4 Examining investment projects, technical designs, total cost estimates andtechnically supervising of construction project management of works mentioned inSection 4

5 Making bidding documents, bidding consultants, economic contracts for thedesign, construction, equipment procurement projects in mining, civil, industrialand power

6 Perform interior and exterior special artistic designs made by the Company

7 Constructing experimental subjects in scientific researches of sector leveland State level chaired by the research company

Hon Gai Coal Design Factory is responsible for designing consultancy,

works in mining and industry, which caters mainly for the units in the coal industry,but mostly works with small scaled retail for short implementation periods, directlyserving production Hon Gai and Cam Pha

General Services Enterprise and Construction primarily service jobs, sales

materials, and mining and construction equipment and construction works of smalland medium scale

Trading and Technology Transfer Enterprise is in charge of consulting,

design, technology transfer, import, business supplies and equipment to units in andoutside the coal industry, expanding and developing the construction assembly,business office, business services, technology for the foreign manufacturer, etc Toexpand international cooperation, building the company brand image, ensurecompetitiveness in the market to meet the demand of domestic, regional andinternational levels

Following the policy of the Party and the State is gradually equalization ofstate enterprises in the late 2005 Investment Advisory Company of Mines &Industry has made the procedure to convert into joint stock companies and the date03/28/2006, JSC Industry and mine investment consulting official operate from thenuntil now

The organizational structure of the company now includes 17 departments and

3 under Enterprise (see organizational chart)

Agency Company: Includes Board of Directors and 17 divisions as

organization structure as below:

SUPPERVISOR BOARD

DIRECTOR BOARD

PLANNING DEPARTMENT

TECHNOLOGY DEPARTMENT ORGANIZATION DEPARTMENT

CHAIRMAN OF BOARD

Figure 3.1: Functions and duties

3.1.3 Business results of VIMCC in the period of 2006-2010

Based on the functions and business activities, the company has actively

implemented the designing and consulting services, technology transfer, trading andmaintained the construction projects The subsidiary of VINACOMIN Group andcompany units as well as the units in and outside the industry, along with the efforts

of all employees in the years 2006-2012 VIMCC has completed business plans forthe annual shareholders' meeting with the company with a huge growth

Revenue increased from 58 billions VND in 2006 to 181 billions VND in 2010.Average increasing rate of this period nearly 155%/year, in particular, DesigningConsulting Services increased from 49.6 billions VND in 2006 to 121.5 billionsVND

Table 3.1: Financial Performance within 3 years 2008-2010

No Financial details Fiscal Year 2008 Fiscal Year 2009 Fiscal Year 2010

1 Total assets 105.421.765.476 100.026.363.927 112.577.056.454

2 Short term assets 102.038.496.205 88.674.602.600 97.957.059.552

3 Short term debt 90.896.060.783 79.730.623.997 88.076.080.8154

Turnover/revenues 145.304.908.574 278.161.573.186 279.212.844.056

5 Before tax-profits 4.447.618.132 6.364.579.898 7.084.184.420

6 After tax-profits 3.855.096.389 5.812.054.157 6.183.769.552

Source: annual report of VIMCC 2010

General services and construction in 2007, the company expanded to new

areas of business called trade and technology transfer Although this is a newbusiness field, it contributed significantly to the increasing of the turnover of thissector, up from 8.6 billions VND, 2006 to 61 billions VND in 2007 and about 160billions VND in 2009, 2010

Output value: in the period 2006-2010, with revenue growth of production

value of the field of design consultants, general services and construction alsoincreased The production value of design consultants fields increase from 43.7billions VND to 107.8 billions VND in 2010, up 127% year on average

The production value of general services and construction increased from

1.4 billions VND in 2006 to over 19 billions VND in 2010 Rate of increase duringthis period was 247% year

In 2006, profits increase from 2.36 billions VND to over 7 billions VND by

2010 Thus, the average rate of increase of profits is 132% / year higher than therate of increase of production value

Average salary: Along with the development of coal workers' income in this

period also increased significantly with the average speed are 116% / year, up from

6 millions VND/ person/month to 10 million VND/person/months in 2009, 2010

3.1.4 The task-oriented business plans for the year 2011-2015

-Opportunities

+ The results of production and business results 2006-2010 made favorablebase for implementing the company's program in the period of 2011-2015 Thevolume of the unfinished work of the year 2010 moved to 2011 respectively bigger,including design consultants on 120 billions VND, engineering civil over 60billions VND

+ With high results gained for the past time, VIMCC have built a highreputation of the company for numerous customers and established the company'sposition on domestic and foreign markets This is a great opportunity for the period2011-2015 can be achieved much more successes

+ Through actual business and production activities in recent years, VIMCChave built a team of experienced staff who are improved the qualifications andduties with good capability to perform the major works and ensure good qualitywith the shortest time

+ Business operating results over the years the company has created aneconomic and financial resources better, to facilitate production and businessorganizations for the next stage

+ Socioeconomic situation are more complicated aspects (such as currencydevaluation, market prices, food prices and other necessities for living) increases,exchange rate volatility, inflation development increases, interest rates for loanscontinued to increase, has and will cause many disadvantages for the company'sbusiness and directly affect the lives of employees

+ In terms of market economy is more fluctuations, VINACOMIN Groupadvocates tightening the investment This strongly influences on the lives ofemployees

+ Changes in government policies for the coal industry as coal prices, taxes,import and export; this affects the operation of the company

+ The labor force has long experience and high retirement age, leading to lack

of manpower in some key positions need to create an additional pressure forcompanies with higher requirement on the customer’s demands

3.2 VIMCC’S human resources

In all businesses, employees are the most important resources and the mostchallenging to manage because the managers require employees to help themmanage and operate their business and because employees are not machines andthey do not respond or react in a predictable manner The characteristics of humanresources affect directly de-motivation factors and motivation factors of VIMCC

3.2.1 VIMCC’S employee structured by sex

Table 3.2: VIMCC’S Employee structured by sex

Source: Human resources management department VIMCC