The factors affecting talent’s loyalty in sales department of companies in viet nam

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH ---PHẠM THUÝ HỒNG THE FACTORS AFFECTING TALENT’S LOYALTY IN SALES DEPARTMENT OF COMPANIES IN VIET NAM CÁC NHÂN TỐ ẢNH HƯỞNG ĐẾN LÒNG T

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-PHẠM THUÝ HỒNG

THE FACTORS AFFECTING TALENT’S LOYALTY IN SALES

DEPARTMENT OF COMPANIES IN VIET NAM

CÁC NHÂN TỐ ẢNH HƯỞNG ĐẾN LÒNG TRUNG THÀNH CỦA NHÂN TÀI TRONG BỘ PHẬN BÁN HÀNG CỦA CÁC

CÔNG TY TẠI VIỆT NAM.

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2020

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-PHẠM THUÝ HỒNG

THE FACTORS AFFECTING TALENT’S LOYALTY IN SALES

DEPARTMENT OF COMPANIES IN VIET NAM

CÁC NHÂN TỐ ẢNH HƯỞNG ĐẾN LÒNG TRUNG THÀNH CỦA NHÂN TÀI TRONG BỘ PHẬN BÁN HÀNG CỦA CÁC

CÔNG TY TẠI VIỆT NAM.

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS PHẠM ANH TUẤN

HÀ NỘI - 2020

The author confirms that the research outcome in the thesis is the result ofauthor’s independent work during study and research period and it is not yetpublished in other’s research and article

The other’s research result and documentation (extraction, table, figure,formula, and other document) used in the thesis are cited properly and thepermission (if required) is given

The author is responsible in front of the Thesis Assessment Committee,Hanoi School of Business, and the laws for above-mentioned declaration

Hanoi, 31st of August, 2019

Pham Thuy Hong

I have gained huge knowledge, skill and insights from my MBA course Thecourse raises my capacity of administration and management up to the next level

The study "The factors affecting talent’s loyalty in Sales Department of

companies in Viet Nam" is chosen to conduct for my graduation thesis based on

my experience in the industry as well as precious knowledge an I gained from MBAprogram at HSB after valuable months studying here

I declare that this is a true copy of my thesis The content of this thesis hasbeen approved by the committee of Vietnam National University, Hanoi – HanoiSchool of Business and Management (HSB) This thesis has not been submitted for

a higher degree to any other University or Institution

In order to finish this project successfully, I have received many helps,supports and guidance from many people who I would like to thank sincerely

First of all, I would like to express my deep gratitude for Dr.Pham Hung Hiep and his research coach centre for all profressionassistance during data analysis process I also would like to thank all theprofessors of

MBA program, especially – my supervisors, Dr Pham Anh Tuan

Then I would like to thank deeply to my friends, my partners, respondentsand interviewees who allowed me to gather enough data for this research Finally, Iwould like to express my thanks to my husband, my family, my fellow friends whoalways stand by me during the past two years and encourages me to keep movingfrom the beginning of my study

Hanoi, 31st of August 2019

Pham Thuy Hong

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TABLE OF CONTENTS

DECLARATION i

ACKNOWLEDGEMENT ii

ABBREVIATION v

LIST OF TABLES vi

LIST OF FIGURES vii

INTRODUCTION 1

CHAPTER 1 THEORETICAL BACKGROUND OF TALENT’S LOYALTY AND FACTORS AFFECTING TALENT’S LOYALTY 7

1.1 Talent’s loyalty 7

1.1.1 Concept of Talent 7

1.1.2 Talent’s loyalty 9

1.2 Factors affecting talent’s loyalty 11

1.2.1 Empowerment 12

1.2.2 Training 13

1.2.3 Teamwork 15

1.2.4 Appraisal System 16

1.2.5 Compensation 17

1.2.6 Job Satisfaction 17

1.3 Conceptual model 19

CHAPTER 2 RESEARCH METHODOLOGY 21

2.1 Research process 21

2.2 Research design 23

2.2.1 Research model and Hypothesis 23

2.2.2 Data collection method 24

2.2.3 Designing Scale and Questionnaire 25

2.2.4 Data Collection Process 28

2.2.5 Data Analysis Procedure 28

CHAPTER 3 RESEARCH FINDINGS 30

3.1 Data Preparation and descriptive statistics 30

3.1.1 Data Preparation 30

3.1.2 Descriptive Statistics 32

3.2 Measurement Model Evaluation 41

3.3 Composite factors calculation and validity tests 45

3.4 Data Analysis 48

3.5 Analysis of Hypothesis conceptual talent’s loyalty model 49

CHAPTER 4 DISCUSSIONS AND RECOMMENDATIONS 50

4.1 Discussions 50

4.2 Recommendations 52

CONCLUSIONS AND LIMITATIONS 55

REFERENCES 57 APPENDIX

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LIST OF TABLES

Table 2.1: Hypothesis for model 24

Table 2.2: Detail and Source of Questionnaire 26

Table 3.1: Encoded Variables 30

Table 3.2: Demographic and Basic Information of Respondents 32

Table 3.3: Descriptive Analyses for Measurement Items 40

Table 3.4: Variables in the CFA Model 41

Table 3.5: Results of factor loading 42

Table 3.6: Factor loading for Confirmatory Factor Analysis 43

Table 3.7: Confirmatory factor analysis for convergent and discriminant validity 45

Table 3.8: Results of multiple fit indices 46

Table 3.9: Variables in the SEM Model 47

Table 3.10: Results of Structural Equation Model 47

Table 3.11: The summary of Hypotheses Testing 49

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LIST OF FIGURES

Figure 1: Global average turnover: overall vs sales population 3

Figure 1.1 Jun et al (2006) Conceptual model 20

Figure 2.1 : The research process and research methodology 21

Figure 2.2 Talent’s Loyalty conceptual framework model 23

Figure 3.1: Gender distribution among 325 respondents 34

Figure 3.2: Age distribution among 325 respondents 35

Figure 3.3: Marital Status among 325 respondents 36

Figure 3.4: Marital Status among 325 respondents 37

Figure 3.5: Highest level of education among 325 respondents 37

Figure 3.6: Marital Status among 325 respondents 38

Figure 3.7: Working Experience among 325 respondents 39

Figure 3.8: Type of company among 325 respondents 39

Figure 3.9: Model of Structural Equation Model Result 48

in the future (Deloitte, 2013; Dries, 2013; Thunnissen, Boselie & Fruytier, 2013;Cappelli & Keller, 2014).

Employers today face a more fluid labor market than in the recent past In 2014Global Workforce Study, a survey of over 32,000 employees worldwide, employersdidn’t receive high marks from employees on their ability to get and keep talent

―Fewer than half of respondents report that their company does a good jobwhen it comes to attracting and retaining the right workers Only 46% say theirorganization hires highly qualified employees, while 42% say their employer does agood job of retaining talented employees‖

Losing talent is a serious problem that many enterprises are facing Whenemployees leave, it costs the organization time and money The total costsassociated with turnover can range from 90% to 200% of annual salary(Cascio, 2006; Mitchell, Holtom, & Lee, 2001) For example, it costs thecompany $102,000 for a journeyman machinist, $133,000 for an HRmanager at an automotive manufacturer, and $150,000 for an accountingprofessional That is the basic cost of losing talent!

Beside the obvious direct costs associated with turnover, such as accrued paid time off and staffing costs associated with hiring a replacement, there are a several of other direct and indirect costs associated with turnover which identifies two primary types of costs associated with voluntary turnover: separation costs and replacement costs PriceWaterhouse Coopers (2006) estimates that turnover-related costs represent more than 12% of pre-tax income for the average company, and

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nearly 40% for companies at the 75th percentile for turnover rate.

If a business loses talent, it will suffer the loss of skills, experience and

―corporate memory‖ The extensive extent and nature of these losses is a criticalmanagement issue, leading to an effect on productivity, cost-effectiveness, andproduct and quality of service For talent, high level of turnover can pessimisticallyinfluence employment relationships, spirit and safety in workplace (Muchinsky &Morrow, 1980)

According to Global Workforce Study, employers are finding it difficult toget and keep key talents, including top performers and high-potential employees.Nearly two in three respondents of the survey are experiencing problems attractingtop performers (65%) and high-potential employees (64%), an increase from twoyears ago Additionally, more than half report difficulty retaining high-potentialemployees (56%) and top performers (54%)

For all the reasons below, building talent’s loyalty is very important andnecessary Spherion report 2017 shows that globally 78% of HR leaders are moreconcerned about the talent shortage today than they were a year ago And inVietnam, losing talent even becomes a hot topic to discuss recently because of thefact that 53% SMEs own no or irrelevant talent strategies (Talent net, 2017)

In 2019, a survey was released with the participation of 650 CEOs andhuman resources personnel from leading enterprises in Vietnam Accordingly, it isnot until employees quit that a company considers it a ―Loss.‖ The Vietnam BestPlaces to Work Survey emphasized that ―Talent Loss‖ has continuously occurredeven before they join an organization The Talent Loss trend is still seen after theyhave become a member of the company, at an alarming rate of 51 per cent of theworkforce at a company This trend once again confirms the importance of building

a sustainable employer brand from inside out to minimize Talent Loss both beforeand after they join a company’s workforce

Thus, it can be maintained that understanding about talent’s loyalty is crucialfor an organization’s viability to reduce talent lost rate There are many researches

about talent management and about employee’s loyalty also But until now, there is

no specific research about talent’s loyalty, especially in Vietnam

For this reason, the author selected the topic: “The factors affecting talent’s loyalty in Sales Department of companies in Viet Nam” to fulfillment the master thesis The author decided to choose Sales Department of companies to research

because Sales department plays an important and essential role in creating profit forenterprises It also has the largest number of employees among all the departments

in companies Sales roles have traditionally experienced higher levels of turnoverrelative to the overall population of employees Below, the chart illustrates overallemployee turnover vs overall sales force turnover across multiple quarters, asreported in our Radford Workforce Trends Reports Overall turnover rates in US forsales employees are higher than the overall population, tracking at 14 -16% vs.12-13%

Figure 1: Global average turnover: overall vs sales population

With research content as above, the author poses research questions for hertopic as follows:

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- What does ―talent‖ mean?

- What is the role of talent in a company?

- What are the factors influencing talent’s loyalty?

- What is the current status of talent’s loyalty in Sales Department ofcompanies in Viet Nam?

- What are the suitable solutions to improve talent’s loyalty in SalesDepartment of companies in Viet Nam?

2 Literature review

Research on the world

Talent’s loyalty is not a new topic but all past studies often focus on its othersides, which are known as ―turnover‖ or ―talent retention‖ Several researches ontalent retention have focused on understanding the diverse reasons why workersmake decisions to quit institutions, as well as the processes by which employeesdecide Thanks to the understanding of reasons why people quit, institutions canalso achieve a better idea of why workers remain and can learn the way to affectthese decisions (Mobley ,W.H., 1979)

Mitchell, Holton and Lee (Nov, 2001) pointed out that people voluntarilyquit their institutions in various reasons Some of those reasons are personal, forexample, alteration in family circumstance, a desire to acquire a new skill or trade,

or a spontaneous job offer Others are affected by the employing institution:spotting a colleague’s unjust treatment, being passed over for promotion Jobdissatisfaction, which was piled up, was one reason leads to people’s decision toleave On account of imposing extensive costs on individuals as well as institutions,turnover is a matter As indicated by Herman in 2005, of the five reasons whyworkers quit, compensation reached the lowest level

According to Hertzberg theory, the most important factors, which couldfulfill employee’s satisfaction physiologically, are salary and the compensationscheme, especially that physiological needs are based on food, drink and avoidance

of pain, etc In order to have enough food, drink and suitable medical care, workersare in need of having a fair salary and compensation scheme In the same time, an

individual’s evaluation of a job opportunity is based on more than job current pay.Furthermore, it consists of the benefits that a company might offer, as well aschances for learning and promotion, the career.

Various Human Resource professionals hold a strong belief that higher salaryassists in attracting talent and decreases turnover Another main reward component

is benefits, like pay, are assessable and can be valuable tools in drawing attraction ofemployees as well as retaining true employees Nevertheless, most human resourceprofessionals are aware that while workers welcome pay raises, increase insatisfaction coming with extra money specifically does not work in a long time, nor

do raises alone remain employee’s loyalty (Doh, Stumpf, & Tymon, 2010) It is alsowidely agreed in the Human Resource literature about the general characteristics ofany potential Human Resource program that makes contribution to good retention.Most of these are directly in relation to shaping a satisfactory work environment forworkers and hence, in turn, to good retention (Aquino, Griffeth, Allen, Hom,1997)

According to the Maslow hierarchy, if a person feels threatened, the needs further

up the pyramid will not receive attention until that need has been resolved This isdescribed by (Mitchell, Holton and Lee Nov, 2001) by Job embeddedness and staying

Research in Vietnam

In Viet Nam, some researchers have shown factors affecting employee’scommitment such as Do and Pham, 2012 Vo and Cao in 2009 approachedindirectly with talent retention as studying about the reason for employee’s intend toleave organization

Tham Nguyen Thi Hong (2014) has focus on the impact of culturalorganizations on motivating the employee’s satisfaction

By conducting a research in SMEs in Viet Nam, Ha Nguyen Thi Hong hasshown many factors, which affect the employee’s commitment in 2016

3 Aims of research

Aims of research is giving the recommendations to company owners in VietNam to enhance talent’s loyalty, keep and retain the best employees for SalesDepartment

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In order to suit with these aims, this thesis gives the below missions of research:

- Literature reviews the previous research on talent, talent’s loyalty, andtalent’s retention Systematize the basic theories of talent, and all the factors

affecting talent’s loyalty, talent’s retention

- Study the talent’s retention, employee’s retention models, therebyselecting a suitable model for measuring loyalty of talent

- Survey and analyze the status of talent’s loyalty in Sales Department ofcompanies in Viet Nam by the selected model Limited success evaluation and cause

- Give some recommendations to improve talent’s loyalty in SalesDepartment of companies

4 Objects of research

This research will focus on the high-skilled workforce and manager, workingfor Sales Department of companies in Viet Nam

5 Scope of research

- Scope of contents: Talent’s loyalty

- Scope of space: All of the companies in Viet Nam

- Scope of time: Primary data is collected via direct survey in July 2019

- Scope of sample: Individual employees working in Sales Department of companies in Viet Nam, with 571 questionnaires

- Chapter 2: Research methodology

- Chapter 3: Research Finding

- Chapter 4: Discussions and Recommendations

CHAPTER 1 THEORETICAL BACKGROUND OF TALENT’S LOYALTY

AND FACTORS AFFECTING TALENT’S LOYALTY

1.1 Talent’s loyalty

1.1.1 Concept of Talent

Nowadays, it's apparent that the term of "talent" draws much of socialconcern The popularity and familiarity of this word has always been proven by itsown appearance on Google with millions of search results, in a large number oftitles of various magazines and journals, and in abundant headlines of TV showsand commercials

However, it is difficult to clarify what is meant by "talent", especially in thecontext of the work environment The conceptual ambiguity of "talent" stems fromthe history of the word's application in life, during over thousand years of existence,which leads to its different meanings

The term talent in Latin was talentum, originating from the Greek word

t lanton [ (Knowles, 2005; Gallardo-Gallardo, Dries, & González-Cruz, 2013).According to Tansley (2011), the first dictionary definition of talent was used bythe Babylonians, Assyrians, Greeks and Romans to denote a unit of weight ormoney The Greek word "talent" was translated into the word "capital" by the NewEnglish Bible, which leads to the usage of the term "human capital" by HRMscholars nowadays as synonym of talent.The meaning of talent underwent aconsiderable change, standing for an inclination, disposition by the 13th century andrelating to treasure, riches, mental endowment, natural ability in the 14thcentury By the nineteenth century, talent “was viewed as embodied in thetalented—hence, a person of talent and ability”

In today's dictionary, talent is defined as an object: ―Special aptitude or faculty; high mental ability” (Deverson and Kennedy (2005) or ―a natural ability to be good at something‖ (Adrian-Vallance et al (2009) Another meaning of talent found in contemporary English Dictionaries refers to a person or persons of talent (talent as subject)—i.e., people possessing special skills or abilities (Gallardo-Gallardo et al., 2013)

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In current debates about talent, several definitions of the term talent fromdifferent perspectives are provided by researchers It might be impossible to find outthe definition of ―talent‖ in all the languages Meaning of talent depends on thelanguage that is shared in the organization For example, according to (Buckingham

& Vosburgh, 2001), every employee has his or her own strengths and thus, canpotentially create added value for the organization Similarity, Peter (2006) claimed inhis article there is no reason not to consider each employee as talented On thecontrary, Tansley (2007) understands talent as an elite subset of the organization'spopulation who can make a difference to organizational performance, either throughtheir immediate contribution or in the longer-term by demonstrating the highest levels

of potential

Many corporations do not even know how to define talent, let alone how tomanage it (The Economist, 2006) "Talent" seems to have a definition in the way that abusiness leader or a writer decides what the word means, due to his or her own idea ofwhat is or is not encompassed in the construct (Ulrich, 2011, Gallardo-Gallardo et al.,2013) Actually, there are a big number of different meanings of "talent" which can befound in the academic human resource management (HRM) literature

Ashton and Morton (2005) believed that talents are those individuals whocan make a measurable difference to the organization now and in future ―In themost of general sense, talent is the sum of a person's abilities—his or her intrinsicgifts, skills, knowledge, experience, intelligence, judgment, attitude, character anddrive It also includes his or her ability to learn and grow.” (Michaels, Handfield-Jones, & Axelrod, 2001) Cheese, Thomas, and Craig (2008) supported Michaels etal.’s definition that talent means the total of all the experience, knowledge, skills,and behaviors that a person has and brings to work McKinsey defined talent as

―the best and the brightest‖ (Mckinsey Quarterly 2, 2004) Smart (2005) described talent

as ―A players that are the top 10% of talent available in all salary levels, best

of class‖ agne ( suggests that the people have the ability to perform an activity and achieve at least the upper 10 per cent of their peers are considered as talents According to Stahl et al (2007), talent is a select group of employees who

rank at the top in terms of capability and performance Similarity, Ready andConger (2007) defined talent as a group of employees who have above averageknowledge and skill, and are ready to be promoted to executive positions and thus arethe best people in an organization In oleman‟ study ( 6 , he noted that inprofessional jobs, top performers, who could add more value to organization,were worth ten times as much as their co-workers From these definitions oftalent, it can be concluded that talents represent the most potential individuals for thejob, who have best performance that makes difference advantage to an organization.

1.1.2 Talent’s loyalty

The final goal each organization needs to attain is that apart from workinghard, dedicating to organization by all abilities and enthusiasm in order to achieveorganization’s overall targets, employees have to attach to the organization in a longterm by their loyalty With this goal, the definition of loyalty is questioned Inreality, there are various ways to approach in employee loyalty’s study Not onlycan it be a component factor of a commitment in the organization but it can also be

an independent concept

Loyalty is defined by dictionary as ―the state or quality of being loyal‖ whilethe definition of loyal can be expressed as ―steadfast in allegiance to one’shomeland, government or sovereign’ or ―faithful to a person, ideal, or custom‖.Through many researches, the concept of loyalty has been considered in variouscontexts According to Thacker, Fields, & Tetrick (1989), there were specific effortsconcentrating on the difference between union loyalty and union commitment andthe antecedents and loyalty consequences when loyalty has been studied in theunion literature Fullagar & Barling (1989) defined union loyalty as one’s pride inunion membership, positive attitudes toward the union and its values, and one’srealization of the benefits of being in the union Generally, loyalty is regarded to beone dimension of the broader construct of union commitment (Gordon et al., 1980;Thacker et al., 1989) There are three additional factors beyond loyalty in unioncommitment— unionism belief, responsible attitude towards the union , and thewillingness to work for the union (Gordon et al., 1980; Thacker et al., 1989)

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According to Encyclopedia Britannica (1998), loyalty, generally, is denoted

as dedication or an emotional response of attachment to a specific object,which may be another person or group of persons, an ideal, a duty, or a cause Inthought and action, loyalty expresses itself and attempts to identify the interests ofthe loyal person with those of the object Eskildsen and Nussler (2000) considerloyalty as the employee’s multifaceted perception of the relationship that he/sheengages in with the organization Basically, the meaning of loyalty will beexpressed by a person’s commitment and attachment for some particular things.According to Meyer &Allen in 1991, employee loyalty to the organization, which is

a typical synonym of commitment has sometimes been considered as an attitude

As indicated by Allen and Grisaffle (2001), loyalty, a psychological state,typifies the rapport between an employee and the organization, which they work forand that implicates their decision to remain with the organization Defined simply by ofMathieu and Zajac (1990), loyalty illustrates organization attachment may beregarded as an emotional response, especially when an employee holds astrong belief in organization goals and values and strongly desires to continuethe organization membership Likewise, loyalty can be understood as a powerfulaspiration to retain a member of an organization; a readiness to make a greatdeal of efforts for the organization‟s benefits; and a definite belief in andacceptability of the organization‟s values and targets (Becker et al.,1995

Hence, loyalty is typified by the strong desire to maintain membership of anorganization positively helping for retention of members in the organization Also,

Wu and Norman (2006) showed that organizational loyalty of employees could beunderstood as “the relative strength of an individual‟s identification with and

involvement in a particular organization‖

In Vietnam, Tran Kim Dung believes that loyalty exists when workers strivefor the organization’s success and they hold a belief that working there is the bestdecision Except for planning to work in a long term with the organization, theywon’t intend to seek another job Additionally, various studies on human resourcemanagement in America shown that satisfaction of employees is positively related

to employees’ loyalty to their organizations (Brown & Peterson, 1993; Griffeth,Hom & Gaertner, 2000; Hom & Kinicki, 2001; Martensen & Gronholdt, 2001).Moreover, according to a similar research from Guimaraes (1997), it is claimed thatsatisfied employees will feel more loyal to the institutions, consequently, they don’tplan to give up their job Through experimental studies’ results, loyalty wasexplained and demonstrated by Chen (2006) that it was originated from a majorpremise called job satisfaction Base on these practical researches, employee loyaltyillustrates that job loyalty results in employee satisfaction, simultaneously, it alsoshows that two variables have a positive relation Apparently, if having low levels

of loyalty towards the job, employee will have less satisfaction and will try tochange for another job Otherwise, if employees feel the sense of loyalty towardsorganization, they will become more confident about their job and it will have anoptimistic influence on their satisfaction (Turkyilmaz et al., 2010; Soler, 1998;Chen, 2006) Thus, the organization needs to satisfy employees and therefore, theywill have much more loyalty to the institutions

Some researches found a range of variables (such as job satisfaction,organizational support, and organizational justice) that positively influencethe employee loyalty (Allen and Meyer, 1990; Jun, Cai and Shin, 2006).Also, other studies have identified the mechanisms through which employeeloyalty has an influence on organizational results, such as employeeindustriousness, working commitment, turnover, organizational citizenshipbehavior and obedience to moral values (Reichheld and Teal, 2001)

1.2 Factors affecting talent’s loyalty

In an effort to better retain talent, previous research has identified severalfactors that have an influence on talent management and retention In a review ofthe most recent meta-analyses of factors that impact turnover and foster retention,Allen et al (2010) highlighted the role of organizational commitment and jobsatisfaction as important turnover drivers Steel et al (2002) states that highperforming employees are more likely to be dissatisfied with the shortage oftraining, opportunities for education and upward mobility Govaerts et al (2011)

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found that the existence of challenging work, opportunities for advancement, highcompensation packages, and learning opportunities increased Talent Retention.Allen et al (2010) also emphasized the role of the relationship among co-workersand the relationship with immediate supervisors; organizations with betterrelationships between employees and management/supervision were found to bemore likely to retain their talent than those with strained relationships Thesestudies, in part, highlight the role of employee or talent development as a veryimportant TM strategy that can be utilized to increase the retention of top talent.

Cegarra-Leiva et al (2012) stated that work-life balance practices along with a supportive organizational culture improve job satisfaction and reduce intention to leave Generational differences, along with different work-related and personal values, including work-life balance desires (Festing and Schäfer, 2014), impose significant challenges for HR and TM departments in developing retention challenges.

In this study, the author will follow the theory from the research of Jun

et al ( 6 So the factors affecting talent‟s loyalty, which are chosen by theauthor for this study, are: empowerment, training, teamwork, appraisalsystem, talent compensation and job satisfaction of talent

1.2.1 Empowerment

―Employee empowerment‖ - a familiar term used in business, has a variousdefinitions through the studies of many experts One of the earliest meanings mayfound in 1994, Huxtable said that giving the employees the right to manage theirday-by-day work means empowering them As indicated by Honold (1997), self-control on the job, variations of teamwork, and pay frameworks that connection paywith execution are altogether called empowerment Seibert (2004) and Meyerson &Dewwettinck (2012) later share the same view on employee empowerment in theperspective of boosting performance by evacuating any limits between managerboard and employees to involve them in decision-making process, give them theright to managing their own work, and solving problems may rise In addition toself- making decision, empowerment enables employees get more responsibilityfrom managers (Saif & Saleh, 2013)

Empowerment is known as a vital and important factor for successfulachievement, productivity, and growth in any business (Hunjra, UlHaq, Akbar, &Yousaf, 2011) The advantages of employee empowerment were mentioned in manyresearches For example, Jacquiline believed that empowered employees can create thesentiments of inspiration apply their significant learning and abilities for managingclient needs Once the managers give employees power and authority, as well asdistribute responsibility with them, they will raise their awareness of higherrecognitions and position As the result, they will grow their positive thoughts and areeager to stay on top of their business performance (Wadhwa & Verghese, 2015).Inaddition, Ripley & Ripley (1992) stated that empowerment could motivate employees

in doing the routine work, improve their job satisfaction, enhance their loyalty andproductivity, and reduce the turnover intentions among them According to Meyerson

& Dewettinck (2012), employee empowerment has been recognized as an importantcontributor for the success of organization Several HRM studies, mostly conducted

in the US and other developed countries, have commonly found that theempowerment programs give employees a positive job experience, a clearsense of contribution, and autonomy in initiating and regulating actions, whichleads to better employee satisfaction (Koberg et al., 1999; Laschinger et al.,2001; Spreitzer et al., 1997; Seibert et al., 2004) A number of authors observedempowerment direct effect on employee performance, job satisfaction (Raza,Mahmood, Owais, & Raza, 2015; Wadhwa & Verghese, 2015) and organizationalcommitment (Gholami, Soltanahmadi, Pashavi, & Nekouei, 2013; Insan, Astuti,Raharjo, & Hamid, 2013; Kun, Hai-yan, & Lin-li, 2007)

1.2.2 Training

Employee training has been considered as a multi-billion dollar industryworldwide (Haccoun & Saks, 1998) According to Industry Report, in 2006organizations in the United States spent a total of $55.8 billion on training.That‟s totally not surprising with HRM experts and researchers Companies canadvance employees by offering them benefits through training and innovation progress.Becker, Bose and Freeman in 2006 proved that the potentiality, mastery, and

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expertise of outstanding employees are the first priority factors to compete inbusiness In 2015, Hafeez and Akbar concluded that the employees would performmore effectively if they take part in more training courses Nowadays, constantstudy and enhancement of employees in a company are regarded as crucial for thatcompany to stay ahead (Salas & Cannon-Bowers, 2001) Kraiger in 2003 made acomparison between two companies and concluded that, significant developmentstake place in the company investing more on training Organization spendssignificant expense annually on training and developing courses with the hope thatthis will enhance the performance of employees and better the results of thecompany (Dolezalek, 2005; Salas & Cannon-Bowers, 2001).

Training is defined as the activity aiming to make employees' knowledge,skills, and attitudes systematically obtained and developed to help them efficientlyfinish a task or job or to enhance performance in the working environment(Goldstein, 1980; Latham, 1988) After effectively designed according toemployees' and organizational requirements, training is expected to convey new andrelevant knowledge and skills to employees and bring the improvements in jobperformance, which is known as the growth in organizational productivity, qualityand service.In many precedent studies, training is regarded as crucial tool inmanaging human resource in any company Training principles contain two corevalues, the first one is equipping employees with essential inputs, and the secondone is considering the distinctive aspect of effectiveness, efficiency, and employeesand on going growth (Diab & Ajlouni, 2015) According to Elnaga and Imran in

2003, training programs support employees to go further in their career path byequipping them information and a set of new essential skills Agreeing with that,Truitt in 2011 also found out they perform better in team As thought by Sabir,Akhtar, Bukhari, Nasir and Ahmed (2014), training is an approriate way foremployees to acquire the understanding, skills and abilities by professionaldevelopment Thanks to employee training, employees stand golden opportunitiestoexpand their horizons with the improvement in knowledge and skills forcollaborating more effectively and achieve individual growth and development As

Mary (1995) and Saks (1996) observed, workers with self-regulatory training get morejob satisfaction than those who are not trained and according to Singh and Mohanty(2012), this training’s investments lead to beneficial organizational outcomes.

Previous studies also show that job satisfaction and organizationalcommitment are affected positively to training (Chiang, Back, & Canter, 2005;Leppel, Brucker, & Cochran, 2012; Sabir et al., 2014) (Bulut & Culha, 2010;Lamba & Choudhary, 2013; Roehl & Swerdlow, 1999) Similarly, competenciesdevelopment through many training programs contributed to employee satisfaction

in an optimistic way, which was surveyed by Martensen and Gronholdt (2001) Thehigh level of job satisfaction due to participation in training enables employees tobecome more confident of producing high quality products, to show the insight intopotentials for career promotion, and to feel a sense of appreciation towards theinvestment of the organization into them (Burke, 1995; Saks, 1996) Furthermore, it

is confirmed by Gazioglu and Tansel (2002), Tarasco and Damato (2006) and Nksoi(2015) that job satisfaction, favorable organizational commitment and overallretention can be gained from employee training

1.2.3 Teamwork

There has appeared and endless controversy over ―teamwork‖ by manyscholars and business practitioners Normally, teamwork is defined as a group ofpeople collaborating with each other in order to attain a target (Ooko, 2013).Recently, with a view to the development of employee’s understanding andprofessional skills, managers in several organizations are assigning their staff tocorporate with each other more (Hartenian, 2003) During teamwork process,employees have ability to collaborate, enhance individual skills and give practicalfeedback with no conflicts among team members (Jones, Richard, Paul, Sloane &Peter, 2007) This is considered as a necessary strategy for smoothing theorganization operation due to the upgradation of team members’ skills, knowledgeand abilities to work as a team and results in organizational performance andeffectiveness (Froebel & Marchington, 2005) Jones et al (2007) shows that aworker cooperating with other people is able to become more fruitful when

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compared to other peers As widely accepted, teamwork make contribution tomanagement success, the improvement of overall organizational productivity andhigher levels of organizational commitment Thanks to teamwork, each personstands a chance of sharing with others the masterful way to perform a certain task aswell as their understanding and consequently their productivity and overall teamperformance are enhanced Therefore, the more team members’ collaboration isadopted, the more chances for shared learning and productivity.

According to past studies, job satisfaction and organization commitment arepositively affected by teamwork (Abdullah et al., 2012; Musriha, 2013);(Ghorbanhosseini, 2013; Zincirkiran, Emhan, & Yasar, 2015) It is reported byMusriha (2013) that efficient collaboration can result in an increased level of jobsatisfaction and higher employee’s performance In particular, teamwork assistemployees in developing autonomy hat, a main source for improved organizationalcommitment and minimized stress (Ooko, 2013)

is still execution of performance appraisal systems Meanwhile, it is expected that

a good performance appraisal system is to give valuable data to a worker abouthis/her working performance and progress, appraisal reliability and validitycontinues to be regarded as a major concern for institutions and also performanceappraisal systems often encounters considerable refusal to accept (Banks andMurphy, 1985; Cleveland et al., 1989; Taylor et al., 1995)

According to Erdogan in 2002, wide implications for attitudes andbehaviors in institutions are provided by performance appraisal It is believed that

reactions to appraisal and the appraisal process considerably affect the efficiencyand the overall viability of appraisal systems as indicated by Jawahar in 2007.

1.2.5 Compensation

Employee compensation acts as an important role as being at the heart

of the employment relationship, critically important to workers as well asemployers Workers specifically rely on wages, salaries, and so forth to supply

a great share of their earnings and on benefits to provide earnings and healthsecurity For employers, decisions on compensation has an influence on theircost of doing business and thus, their capacity to sell at a competitive price inthe product market and compete for workers in the labor market (attract andretain), also their attitudes and behaviors when working with employer

According to the American Compensation Association's (1995) definition,

"compensation is the cash and non-cash remuneration provided by an employer forservices rendered" (ACA) It’s also described as a double input-output exchangebetween an employee and an employer by Belcher (1997) Basically, compensation

is considered as the HRM function that deals with every type of reward individualsreceive in exchange for performing organizational tasks, with a desired outcome of

an employee who is attracted to the work, satisfied, and motivated to do a good jobfor the employer (Ivancevich, 2004)

It is most usually regarded that employee compensation systems are among basic factors that affect satisfaction of employee (Britton et al., 1999; Carson et al., 1999; Karl and Sutton, 1998; Wageman, 1995; Welbourne and Cable, 1995) These systems tend to contain financial and non-financial rewards for workers and teams making contribution to TQM efforts according to Blackburn and Rosen in 1993 Also, it plays an important role in the determination of employee job satisfaction.

1.2.6 Job Satisfaction

Employee satisfaction or job satisfaction has widely attracted a lot ofattention of those people working in agencies and studying them In other words,job satisfaction play a key role in theory and practice of any institutions over theworld That’s why various institutions concentrate on measuring the level of

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employee’s job satisfaction in effort to predict basic employees’ behaviors whichare respectively job performance (Ivancevich, 1978), leaving job (Carsten &Spector, 1987; Hom, 2001) or stopping work (Smith 1977; Scott & Taylor, 1985).

In spite of being a quite well-known research concept executed by a lot ofresearchers, job satisfaction concept varies among researchers In practice, the wayjob satisfaction or employee satisfaction is defined and measured has beendistinctive in many approaches It could be defined as ―the extent to which aperson’s hopes, desires, and expectation about the employment he takes part in arefulfilled‖ As considered by Vroom (1964), this concept is a person’s perceptual and

an emotional reaction towards important working aspects Furthermore, it is stated

by Weiss (1967) that job satisfaction is regarded as the attitude towards the job and

it is shown by perception, belief and workers’ behavior According to Locke (1976),job satisfaction definition is ―a pleasurable or positive emotional state resultingfrom the appraisal of one’s job or job experiences‖ Bergman (1981) regarded thatpersonal factors of workers or organizational influences on the job perceptionaffected job satisfaction As denoted by Kaliski (2001), job satisfaction is that therehad a feeling of being enthusiastic and happy in work from employees Also known,

it is a combination of feeling and belief that that he thought about his job according

to George & Jones inn 2008 Meanwhile, Ellickson and Logsdon (2002) stated thatjob satisfaction as the level workers like their work Within the scope of this study,

it is regarded as employees’ pleasure when executing the work or duties of theinstitution Hence, employee satisfaction is in reference to employeeexpectations about the workplace and his job attitudes Consequently, jobsatisfaction is a function of the extent to which one‟s demands are met in ajob as indicated by Togia et al., 2004

If workers have high level of job satisfaction, they will have an optimisticattitude toward their job Otherwise, employees having low satisfaction will have anegative attitude toward their job (Robbins, 1993) Some researches indicate that ifjob satisfaction is lacked in job, it means that there is a probability or likelihood that

he or she will leave that job (Alexander, Liechtenstein & Hellmann, 1998; Jamal,

1997) According to Ramayah, Jatan and Tadisina (2001), job satisfaction can bedenoted as the way people are willing to work, what can create such happiness forpeople during working that they don’t want to leave Employee satisfaction is such

a crucial factor that helps the institution know about the general emotions andexpectations about the workplace, job and employees’ environment

Several HRM studies conducted in the US indicate that employeesatisfaction is positively related to employees‟ loyalty to their companies andnegatively related to their intention to turnover (Brown and Peterson, 1993; Griffeth

et al., 2000; Hom and Kinicki, 2001; Martensen and Gronholdt, 2001) A lowerlevel of intention to leave among satisfied employees is driven by the fact thatsatisfied employees are more likely to perceive greater benefits in staying in theirorganizations, compared with dissatisfied employees Therefore, satisfiedemployees tend to show a higher level of loyalty and commitment to theircompanies and are unlikely to leave their jobs (Guimaraes, 1997)

1.3 Conceptual model

The hypothesized conceptual model from Jun et al (2006) is provided

in Figure 1 As shown in Figure 1, the conceptual model typifies thetraditional framework of TQM, in which the key driver (exogenous variable)

is top management commitment, HR-focused TQM practices (including 5factors) and employee satisfaction as intermediate endogenous variables,and employee loyalty as an endogenous variable The 5 factors in TQMpractices are: empowerment, training, teamwork, appraisal system, andcompensation According to Jun et al (2006), most of the literature cited inthe paper examined individual construct relations, such as the relationshipbetween empowerment and satisfaction (e.g., Koberg et al., 1999;Laschinger et al., 2001; Seibert et al., 2004; Spreitzer et al., 1997 ”

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Figure 1.1 Jun et al (2006) Conceptual model

CHAPTER 2 RESEARCH METHODOLOGY

2.1 Research process

The research process is detailed as following:

Study about the theore cal founda on

of talent’s loyalty and factors affec ng

talent’s loyalty

- References, previous studies

- Secondary data and primary data

- Proposing the research model

- Research ques ons

- Coding and data entry

- Data checking and data refining

- Sta s cal describes

- CFA

- SEM

- CR

- AVE

Figure 2.1 : The research process and research methodology

The research process is expressed detail as following:

After set up the research aims and select the research methodologies, theauthor building the research process Theoretical foundation is inherited fromprevious studies talents loyalty and factors affecting talents loyalty Base on this,the author propose the research model that most appropriate The author will applykey research methodology: quantitative research method

 Base on the research model, the author interview several experts andmanagers to consider the suitability of the research model with the actual status of

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the talent’s loyalty of Sales Department of companies in Viet Nam The intendedsample size in this survey is 5 observations (1 expert, 1 HR managers and 3managers in other departments that face with the losing talent problem such as salesand marketing, operation department)

 The quantitative research method: After the interview, the author willcontinue research by quantitative method The quantitative method include somefollowing steps:

 Survey (intended sample size is more than 500 observations)employees, coding, entry and data refining To form sample size, there are manydifferent approaches Different researchers will present sample size differently.According to the opinion of the author (Hair & CTG, 1998), the minimum sample sizefor research needs to be from 100 to 150 samples Research on sample size by Roger(2006) presents that minimum sample size for practical researches is from 150-200samples For multivariate regression analysis: the minimum sample size required for theresearch is calculated by the formula 50 + 8 * m (m: number of independent variables)(Tabachnick and Fidell, 1996) According to the opinion of Hair, Anderson, Tatham andBlack (1998), the minimum sample size required for the research is calculated by number

of questions * 5 times For example, if there are 30 questions in the questionnaire, theminimum number of samples required is 30 * 5 = 150 samples Following thiscalculation, sample size of talents needs to be at least 150 Choosing the sample sizeneeds to be at least 300, the author believe that the bigger sample size, the more accurateresult To have the sample size of 300 talents, the author needs to make survey in abigger number of employees because not all the employees are talented Therefore, atleast 500 is reasonable sample size for this research

 CR, AVE

Base on data analysis, the research results will be detailed, discussion and

suggest solutions for improving the talents loyalty status of companies in Vietnam

2.2 Research design

2.2.1 Research model and Hypothesis

Based on the model of Jun et al (2006) (Figure 1.1), the model applied to the case

of talent in companies in Viet Nam was created and presented in figure 2.2 The model has

been adjusted to be more suitable for talent in Sales Department Specifically, top

management commitment factor will be eliminated Hence, in this applied model, talent’s

loyalty will be evaluated by job satisfaction and 5 factors including: empowerment,

training, teamwork, appraisal system, and compensation

Talent Empowerment (TE)

Appraisal system (AS)

Talent Compensa on (TC)

H4

H5

Figure 2.2 Talent’s Loyalty conceptual framework model

Building upon the literature review, this research hypothesizes that

empowerment, training, teamwork, appraisal system, talent compensation all have

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influence on job satisfaction and job satisfaction has influence on talent’s loyalty.The hypothesis for the model is as follows:

Table 2.1: Hypothesis for model

2.2.2 Data collection method

* Secondary Data Collection: The thesis will use some documents as well as

information about of talent’s loyalty from books, dissertations, magazines, Internet

* Primary data collection: Primary data collection methods are surveys,

expert interviews, and observations In addition, synthetic analytical methods will beapplied

The strategy of this research is to test the hypotheses concerning the affecting offactors with talent’s loyalty in the Sales Department To test all the above

hypotheses, data gathering was focused on all salesman by online survey method.Participants invited for survey are salesman, manager (belonging to SalesDepartment), who are conducting selling tasks at various types of companies viafollowing questionnaire design and data collection process

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2.2.3 Designing Scale and Questionnaire

The questionnaire survey is the most important method in the study, which isdescribed in detail as follows:

 Sample size: at least 500 by random sampling

 Sampling objects: Individual employees working in Sales Department of companies in Viet Nam

- Design of questionnaire: Questionnaire is designed to be in line with theobjectives of the thesis and theoretical framework in a clear and concise manner Toensure accuracy, the questionnaire will be designed according to the following process:

 Based on research objectives and frameworks to identify the information needed: factors, variables and metrics;

 Determine the type of question;

 Determine the content of each question and logic of the questions based

on the survey of Jun et al., 2006

 Submit a questionnaire to the instructor;

 Instructors guide, review, and agree to conduct the investigation;

 Ruler: use Likert's measure of 5 levels from the least to the most

- Basic contents of the questionnaire:

 Introduction: the author's name, the topic name, the main contents to besurveyed

 Assessment of talent’s loyalty according to the developed research model When designing the measurement scale, it is necessary to evaluate in order to

ensure the quality of measurement

As the ruler below, the Author uses Likert's 5-point scales in measuringimpact factors to talent’s loyalty (from 1 to 5, in which: 1: Strong disagree / 2:Disagree/ 3: Neutral / 4: Agree / 5: Strong agree)

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Table 2.2: Detail and Source of Questionnaire

TE1 I am provided with substantial autonomy and

responsibility

TE2 I am not punished for quality improvement ideas that

are unsuccessful

TE3 I am encouraged to develop new ways to provide

better products and services

TE4 I am NOT provided with sufficient information to

arrive at good quality suggestions

TT1 I have received sufficient training at this company to

do my job effectively

TT2 I am trained in quality improvement skills

TT3 I am trained in group-discussion and communication

techniques

TW1 Teams are used extensively at my company

TW2 Product and service quality teams are formed for the

long run

TW3 I think that my teams are effective in producing

quality goods/ services

The quality of my work is an important factor in

AS1 evaluating my job performance)

I am regularly given feedback on my job

AS2 performance

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Part of my job performance evaluation is based on

AS3 how well I work with teams

Part of my job performance evaluation is based on

AS4 customer feedback on product and service quality

TC1 I am satisfied with the pay that I receive

I earn more than others who do similar work at other

TC2 companies

My pay encourages me to improve the quality of my

I will receive a reward if I do something to improve

TC4 product and service quality

The benefits, such as vacation time and medical

insurance that I receive here are better than those I

TC5 could get at similar companies

JS1 I very much like the type of work I am doing

JS2 My job performance improves from year to year

JS3 My job offers me a career path that I am pleased with

I DO NOT feel a sense of pride and accomplishment

JS4 as a result of the type of work I do

TL1 I consider my company as my first choice to work

TL2 I intend to stay with my company for the next few

years

TL3 I would NOT easily accept a job from an alternative

employer that offers a better salary

TL4 I would easily accept a job from an alternative

employer that offers a better fringe benefits

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Questionnaire was designed in Vietnamese with original questions from priorresearch for the salesman working the Viet Nam, and translated into English withquality was double checked by Vietnamese supervisor for foreign salesman invarious types of companies in Viet Nam (Appendix)

2.2.4 Data Collection Process

The population for this research was defined to include all employeesworking in Sale department of companies in Viet Nam, so the data collection wasfocused on only salesman and Sales managers

Based on the today proliferation of the Internet, online survey is the bestsolution of this research for data collection Data was undertaken during 2 weeks inJuly, 2019 A survey invitation with brief introduction about research topic andrational of study was sent through Email, Facebook message, and especiallyLinkedIn network due to the characteristics and scope the study focus at allsalesman in with a link

In order to prevent the bias of respondent since survey invitation was sentindividually, all the questions used to measure variables were mixed together, theonline survey have was divided into 2 parts as below: Part A demographic questionswith gender and age, marital status, job experience time, salary, job title and type ofcompanies Part B was designed to collect assessments from employees about theiropinion about their satisfaction and loyalty in their work Participants whoresponded to survey invitations were employees from many types of companies inViet Nam They all get the notice from survey that their answers are totallyconfidential, and will be used for researching purpose only Data then werecollected using Google online survey form supported by individual messages toremind, and the participants can access the survey by clicking the URL and fill theanswer by ticking the Likert scale relevant to their agreement in each question.After 1000 survey invitation sent out, there were 571 respondents, which included

325 employees having been rewarded in companies

2.2.5 Data Analysis Procedure

The author uses quantitative method for data analysis:

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