Factors influencing the employee’s loyalty at ANSV company ltd

LIST OF TABLETable 1Motivating and maintaining elements of F.Herzberg...17 Table 2 Extracting business results from 2016 to 2018...31 Table 3 Scale of working environment components...35

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

-VŨ THIỆN NHƯỢNG

FACTORS INFLUENCING THE EMPLOYEE’S

LOYALTY AT ANSV COMPANY LTD,

CÁC YẾU TỐ ẢNH HƯỞNG ĐẾN LÒNG TRUNG THÀNH CỦA NHÂN VIÊN TẠI CÔNG TY TRÁCH NHIỆM HỮU HẠN THIẾT BỊ VIỄN THÔNG ANSV

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

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

-VŨ THIỆN NHƯỢNG

FACTORS INFLUENCING THE EMPLOYEE’S

LOYALTY AT ANSV COMPANY LTD,

CÁC YẾU TỐ ẢNH HƯỞNG ĐẾN LÒNG TRUNG THÀNH CỦA NHÂN VIÊN TẠI CÔNG TY TRÁCH NHIỆM HỮU HẠN THIẾT BỊ VIỄN THÔNG ANSV

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 TRẦN HUY PHƯƠNG

HÀ NỘI - 2019

THANK YOU

First of all, I would like to express my deep gratitude to Dr Tran HuyPhuong, who wholeheartedly guided and assisted me during the process ofimplementing this graduation thesis

I sincerely thank Teachers and Teachers of Hanoi National University forconveying valuable knowledge to me during my time at the school

I would also like to thank all of you and your colleagues who have beenworking at ANSV Co., Ltd, who helped me answer the survey questionnaire as adata source for analyze and produce research results of this graduate thesis

I would like to express my gratitude to the Family and Friends for helping

me and encouraging me, to help me complete this thesis

In the process of implementation, despite the utmost efforts to complete thethesis, exchange and absorb the comments of teachers and friends, consult manydocuments but also inevitable errors We hope to receive valuable information fromyour teachers and readers

I wish you all teachers and students a lot of health and happiness! Sincerelythank

Hanoi, July 3 rd , 2019

Student

Vu Thien Nhuong

TABLE OF CONTENT

LIST OF TABLE i

LIST OF FIGURE iii

LIST OF DIAGRAM iv

PREAMBLE 1

CHAPTER 1: THEORETICAL BASIS OF THE LOYALTY OF STAFF AND RESEARCH MODEL 7

1.1 The concept of loyalty 7

1.1.1 What is loyalty? 7

1.1.2 Some thesis about loyalty 7

1.2 Expression of loyalty, measurement of loyalty [12] 8

1.3 The role and benefits of loyalty to the organization [9] 9

1.4 Factors affecting loyalty 10

1.4.1 Salary and benefits 10

1.4.2 Work environment [6] 13

1.4.3 Colleague [5] 13

1.4.4 Leadership style [13] 13

1.4.5 Interest in work 14

1.4.6 Recruitment of personnel 14

1.4.7 Support of the organization 14

1.4.8 Authorize 14

1.5.4 Theory of fairness 18

1.6 Some previous research on employee loyalty 19

1.7 Research model 26

Summary of chapter 1 27

CHAPTER 2: CURRENT STATUS OF EMPLOYEE’S LOYALTY AT ANSV 28 2.1 General overview of ANSV Co., Ltd 28

2.1.1 The process of formation and development of the Company 28

2.1.2 Organizational structure of the Company 30

2.1.3 Some main business results of the Company 30

2.2 Research design 32

2.2.1 Research method 32

2.2.2 Research process 33

2.3 Current status of loyalty analysis at ANSV Co., Ltd 38

2.3.1 Create loyalty for employees through Rewards and recognition 38

2.3.2 Creating loyalty for employees through Income 38

2.3.3 Creating loyalty for employees through the Work Environment 39

2.3.4 Creating loyalty for employees through Colleagues Relationship 39

2.3.5 Creating loyalty for employees through Training and promotion opportunities 39 2.3.6 Create loyalty for employees through Relationship with superiors 40

2.4 Research process 40

2.5 Design quantitative research 41

2.5.1 Methods of information collection and sample size 41

2.5.2 Methods of data analysis 41

2.6 Design qualitative research 45

2.7 Description of the scale 46

2.8 Overall assessment of employee loyalty status at ANSV 49

2.8.1 Result 49

2.8.2 Limited and causes 49

2.9 Linear regression analysis 50

2.9.1 Regression model for component variables 50

2.9.2 Regression model with the participation of qualitative variables 58

Summary chapter 2 61

CHAPTER 3: SUGGESTING SOLUTIONS TO MAINTAIN AND IMPROVE THE LOYALTY OF STAFF AT THE ANSV COMPANY 62

3.1 Research sample information 62

3.2 Evaluate the reliability of the scale 67

3.2.1 Cronbach’s Apha inspection for component scales 67

3.2.2 Factor analysis (EFA) 72

3.4 Testing the differences according to personal characteristics to employee loyalty 78

3.4.1 Gender differences 79

3.4.2 Age difference 79

3.4.3 Differences in education level 80

3.4.4 Differences in seniority 81

3.5 Conclude 82

3.6 Proposal 83

3.6.1 For Compensation factors 83

3.6.2 For Leadership factor 85

3.6.3 For work nature elements 88

3.7 Contribution of the topic 89

3.8 Limitations of the topic and the next research direction 89

Summary of chapter 3 90

CONCLUSION 91

LIST OF TABLE

Table 1Motivating and maintaining elements of F.Herzberg 17

Table 2 Extracting business results from 2016 to 2018 31

Table 3 Scale of working environment components 35

Table 4 Component scale Training and promotion 36

Table 5 Scale of Leadership component 36

Table 6 Scale of Colleagues components 37

Table 7 Scale of components Nature of work 38

Table 8 Employee Loyalty Scale 38

Table 9 Scale content 49

Table 10 Structure of survey sample by gender 62

Table 11 Structure of survey sample by educational level 63

Table 12 Structure of survey samples by age 64

Table 13 Structure of survey samples according to working seniority 65

Table 14 Structure of survey sample by job position 66

Table 15 Structure of survey samples by average income per month 67

Table 16 Cronbach’s Alpha coefficient of the Salary scale 68

Table 17 Cronbach Alpha coefficient of the working environment scale 69

Table 18 Cronbach alpha coefficient of scale Working environment after Env4 type .69

Table 19 Cronbach alpha coefficient of scale Working environment after Env3 type .69

Table 20 Cronbach’s Alpha coefficient of Training and promotion scale 70

Table 21 Cronbach Alpha coefficient of Leadership scale 70

Table 22 Cronbach’s Alpha coefficient of Colleague scale 71

Table 23 Cronbach's coefficient Alpha of the scale of work nature 71

Table 24 Cronbach Alpha coefficient of Loyalty scale 72

Table 25 EFA results measure employee satisfaction 74

Table 26 EFA results scale of employee satisfaction after removing Pro5 observed variable 75

i

observed variable Pro4, Pay1 76

Table 28 Results of EFA scale of employee satisfaction level after removing observed variable Cow5, Pay2, Sup5, Sup6, Pro6, Wor2 76

Table 29 Testing by KMO and Bartlett's method 77

Table 30 Results EFA loyalty scale 78

Table 31 Testing by KMO and Bartlett's method 78

Table 32 Regression results using the Enter method 51

Table 33 Evaluation of conformity of the model 52

Table 34 Model conformity test table 52

Table 35 Spearman test 55

Table 36 Durbin Watson statistics 56

Table 37 Regression model with the participation of qualitative variables 78

Table 38 Testing the level of loyalty between men and women Independent Samples Test 79

Table 39 Table of verification of loyalty level by age Test of Homogeneity of Variances 80

Table 40 Table of verification of loyalty level by cultural level 81

Table 41 Table of verification of loyalty level by working seniority 81

LIST OF FIGURE

Figure 1Calibration model in research of Turkyilmaz, Akman, Coskunozkan and

Pastuszak (2011) 20

Figure 2Calibration model in Mehta's study, Singh, Bhakar & Sinha (2010) 22

Figure 3 Calibration model in the study of Ahmad Ismail Al-Ma’ani (2016) 22

Figure 4 Correction model in Ajami's study (1998) 23

Figure 5 Calibration model in research by Kumar & Skekhar (2012) 23

Figure 6 Calibration model in the study of Athar Waqas et al (2017) 24

Figure 7 Calibration model in Ketbi's research (2006) 24

Figure 8 Calibration model in the study of Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016) 25

Figure 9 Calibration model in research by Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016), Tran Kim Dung (2005) 26

Figure 10 Research Model 26

Figure 11 Research process 32

Figure 12 Scale of remuneration components 35

Figure 13 Structure of survey sample by educational level 63

Figure 14 Structure of survey samples by age 64

Figure 15 Structure of survey samples according to working seniority 65

Figure 16 Structure of survey sample by job position 66

Figure 17 Structure of survey sample by average income / month 67

Figure 18 Scatter chart between residuals and predicted values 53

Figure 19 Frequency chart of standardized residuals 55

LIST OF DIAGRAM

Diagram 1 The organizational structure of the company 30Diagram 2 Research Process 40Diagram 3 Process of data analysis with SPSS 42

1 The urgency of the topic

Every human resource is always an invaluable asset of any organization fromstate management to private enterprises, from a small locality to a large country.The integration leads to the rise of enterprises of all economic types that have madethe labor market rapidly formed One sign that is easy to see is the increasingmobility of enterprises among enterprises The situation of highly qualified andqualified employees often moves to high-wage places, better remuneration now notonly happens in sectors such as banking, telecommunications, informationtechnology , which is becoming a common problem, hurting most businesses

A successful and efficient business always thanks to the contribution of goodand loyal staff Therefore, to attract and maintain the human resources of managers

to implement human resource planning, change the salary, bonus policy, socialwelfare, etc and also ANSV Co., Ltd must be an exception However, managersare still unable to avoid the departure of employees According to the wage laborreport of ANSV Co., Ltd., the total number of unemployed workers in 2018 is 78,

of which professional and skilled employees account for 25% of the total number ofemployees who leave, within the first 6 months of 2018 this figure accounted forabout 35%

So what is the reason why employees of ANSV Co., Ltd are no longerattached to the enterprise? What factors affect employee loyalty to the company? Isthe company's salary, bonus, social welfare, working environment, corporateculture, leadership style, influencing their departure and leaders really care to the

loyalty, solutions to maintain and enhance employee loyalty to the organization.Some typical research projects such as:

2.1 Situation of research abroad

In Aon Consulting's research is done annually on a national scale such as theCommitment @ work study in the US since 1997, in Canada since 1999, in the UKsince 2000 and in Australia since 2002 shows that The close relationship betweenemployee satisfaction and their attachment to the organization Aon Consultingapplied terrific theory to demand Maslow on the condition of the modern economyand said that to enhance employee engagement with the organization, needs tosatisfy the needs of employees:

In the United States, employee satisfaction needs are categorized by: salaryand welfare, change management, training and development, organizational cultureand development path, balancing life

In Canada and Australia the satisfaction of employees' needs is categorizedby: Safety, reward, social - loved, balanced work-life

Research by Shruti and Nirmala (2016) investigates the impact of humanresource management practices on employee organizational commitment indifferent sectors in India Research shows how the practice of human resourcemanagement brings advantages to employee commitment to organizational goals in

a global competitive market The results show the elements of advancement,satisfaction, job characteristics, communication, satisfaction of leaders, jobsatisfaction, external exchange, internal and external exchange and internal rewardsare positively and significantly related to cohesion among employees

Meyer et al (2000) also provided in their general analysis the results of research onthe causal factors of organizational loyalty These factors include: leave of work andawareness of leaving the organization, absence, work performance, civic behavior inthe organization, stress and conflict between work and family; In addition, theypresented an additional element related to workers, namely health and welfare

2.2 Researches in our country

Research by Tran Thi Kim Dung and Nguyen Thi Mai Trang (2007) argued

that the organization's leadership and cultural style affects the loyalty of specificemployees:

New leaders in substance affect employee loyalty, but this is not true inforeign-invested companies, many employees still achieve good results but cannotwithstand the pressure working too high for a long time had to accept to switch toanother company

Innovation culture: supporting with creating a supportive, goal-orientedworking environment, creating excitement for everyone has a very good effect toretain employees It has a positive effect on employee loyalty in all three types ofbusiness ownership

Administrative culture: administrative culture does not affect employeeloyalty in domestic enterprises but has an impact on employee loyalty in foreign-invested enterprises When applying to foreign businesses, workers expect to work

in a professional environment, if this is not achieved, workers can easily leave thebusiness On the contrary, when agreeing to work for domestic enterprises, workersare more likely to mimic and accept the status of administrative desks, non-professional manners and practice of adapting to businesses

Vu Khac Dat (2008) studied the factors affecting loyalty of office workers insouthern Vietnam Airlines also based on the research model of Tran Thi Kim Dungbut there are some adjustments accordingly With the condition of SouthernVietnam office Airlines, the author publishes the following six elements: Nature ofwork, training-development, assessment, remuneration (salary and welfare),working environment (combining two elements of Colleagues and working

employees at the company, followed by reward and welfare policies, relationshipswith leaders, working conditions and, ultimately, the relevance to career goals Thisstudy also confirms that income is not an important variable that determines theattachment of young workers to enterprises.

Pham The Anh et al (2016) in the article on Human Resource Managementand the cohesion of employees at enterprises gave the basic indicators of cohesion:loyalty, pride, try At the same time, the authors also analyzed three factors thatstrongly influence the cohesion of workers: career development opportunities,remuneration and job descriptions

Tran Dinh Man Duy (2018) in the master thesis "Factors affecting the loyalty ofemployees of Dong Tam Corporation" In my dissertation, the author has identifiedfactors that affect the loyalty of employees of Dong Tam Corporation such asremuneration, working environment, training, advancement, leadership style,colleagues, the nature of the work, the level of satisfaction of the employees Onthat basis, the author deeply analyzed the influence of factors on the loyalty ofemployees of Dong Tam Corporation At the same time, the author proposes anumber of solutions to minimize negative effects and promote positive factors onremuneration issues, the nature of work and leadership

Dang Thi Hai (2017) in the master thesis "Factors affecting the loyalty ofemployees of Beton 6 company" By presenting the theoretical basis and models ofresearch on loyalty, the author has developed a research methodology, which gives

an assessment of the factors affecting employee loyalty Beton 6 company Based

on the situation of analysis and evaluation, the author has proposed solutions tostrengthen the loyalty of Beton 6 employees

3 Research gap

All of the above works have conducted research on many aspects related toretaining employees in both theoretical and practical aspects In general, studieshave mentioned the following issues:

 Giving factors affecting the cohesion of workers and the reasons they leave the organization;

 Analyzing the job satisfaction of employees;

 Domestic studies have applied to the actual conditions of Vietnamese

workers in general;

Although there are many works related to the research topic, but these projects inthe implementation process as well as results are limited, subjective and objectiveshortcomings are only to solve the problem of cohesion or job satisfaction issues foremployees in general

The above works have not evaluated the reliability of the scale through factoranalysis, factor analysis for independent variables, factor analysis for dependentvariables At the same time, the above works have not conducted to test thedifferences according to personal characteristics to employee loyalty such asgender, age, working position and seniority

4 Research purpose

Employee loyalty is a deliberate commitment to further the best interests ofone’s employer, even when doing so may demand sacrificing some aspects of one’sself-interest beyond what would be required by one’s legal and other moral duties

A loyal employee is such that is willing to work in that organization, thinking

or believing that to work in the organization is the best option for him For thispurpose, the employee tries his best for the success of the organization to ensure that

it survives

Keep loyalty of employee makes business run smoothly This thesis focuses

in how to make ANSV employee higher

Factors influencing the employee’s loyalty at ANSV Co., Ltd.

7 Scope of research

Scope of space: The study investigates factors affecting employee loyalty atANSV Co., Ltd

Range of time:

With secondary data, the topic uses the actual data of ANSV Co., Ltd from 2017 to

2018 With primary data, the collection process is prepared and implemented fromJanuary to April 2019

The thesis proposes solutions to retain employees of ANSV Co., Ltd until 2023 Scope of content: The thesis focuses on researching factors affecting employee loyalty at ANSV Co., Ltd

8 Research method

Secondary data: Dissertation uses data collected from internal documents,reports and information of ANSV Co., Ltd from 2017 - 2018, data sources collectedfrom outside such as central ministries, publications have been published(textbooks, articles, magazines, internet, dissertations, )

Primary data: Quantitative method is used in the research phase by technicalinterview directly with employees who have been working at ANSV Co., Ltd.through detailed questionnaire according to rating scale 5 Corresponding level: 1 -Completely disagree to 5 - Absolutely agree Sampling method is randomprobability The survey results will be statistically and synthesized, and processed

by SPSS software to form an overall view of the status of retaining employees atANSV Co., Ltd., assisting Direction of feasible solutions

9 Dissertation structure

In addition to the introduction and conclusion, the thesis consists of 3chapters:

Chapter 1: The theoretical basis of employee loyalty and research design

Chapter 2: The status of employee loyalty at ANSV Co., Ltd

Chapter 3: Proposing solutions to maintain and improve employee loyalty at ANSVCo., Ltd

CHAPTER 1: THEORETICAL BASIS OF THE LOYALTY OF STAFF AND

RESEARCH MODEL 1.1 The concept of loyalty

1.1.1 What is loyalty?

Loyalty is an employee who intends to stay long with the organization /business; will stay with the same organization / business even if there is a relativelymore attractive salary offer (Stum 1999-2001)

1.1.2 Some thesis about loyalty

According to Johnson (2005), employees "are more professionally loyal toemployers" and "the nature of the relationship between employees and employershas changed substantially and needs to be reevaluated loyalty concept ”according

to Tran Thi Kim Dung & Nguyen Thi Mai Trang (2007, p.19-20)

There have been many studies of employee loyalty with many differentapproaches

According to Allen, N.J., & Meyer, J.P (1990) focused on 3 psychological states

of employees when connected with the organization Staff can be loyal to theorganization:

- Because of their true feelings, they will stay with the organization even if otherplaces pay higher wages

- Because they don't have a chance to find a better job

plan to quit.

The intention to leave the employee's job is the intention to leave the currentworking environment to switch to another working environment (Vo Quoc Hung &Cao Hao Thi, 2010) In general, employees often work for an organization thatwants to meet their needs and feel satisfied with their work Once the needs are notmet, feeling unsatisfied with the job, the intention to leave to find anotherorganization is inevitable Thus, there is a correlation between demand andsatisfaction for work to the attachment, loyalty of employees to the organization.(Tran Kim Dung, 2005) Therefore, it is necessary to present the theory ofemployees' needs and satisfaction in order to consider the relationship withemployee loyalty, based on which hypotheses are proposed for this study

1.2 Expression of loyalty, measurement of loyalty [12]

Firstly, tell your boss what your boss wants to hear the least: When employeesand bosses are farther away from their ranks, fewer employees will disagree with theboss For example, new employees who join the company often absolutely comply withall boss's opinions and instructions without any comments But that doesn't mean theyalways feel satisfied And when those employees' dissatisfaction peaks, they oftenresolve themselves by quitting Meanwhile, direct reporters who work closely withtheir bosses may have mixed views with their boss They are loyal employees, willing

to point out the wrong points of the boss, tell the boss what the boss wants to hear thebest with the willingness to want the job to be better

Secondly, treat your boss as a person: A student can always watch his teacher

as an idol with a very standard and standard image But the student is also difficult

to accept the image of the teacher he loves in the form of "morale" of an ordinaryperson in society Similarly, many employees look at the boss like a person who isalways strong, strong, powerful and often keeps distance from his boss But loyalemployees do not place heavy relationships between bosses and employees thatway They understand boss in every corner of their work and personal life Loyalemployees understand that the boss always wants to help them achieve their career

goals and in their personal lives, expecting their employees to have the best On thecontrary, they also want their boss to meet the best in their work and personal life.

Thirdly, never criticize your boss before others: Employees can criticize yourboss as a way to reduce stress but most people do this because they think your boss

is not superior to yourself They also find ways to "erode" the respect that the bosshas worked so hard to deserve from everyone around Loyal employees will not do

so They didn't talk, bad boss said behind They always show respect for the bosseven if the boss is not in front of them

Fourth, show disagreement with your boss privately: Arguing anddisagreement are healthy for an organization Loyal employees believe they canfreely share their views with their boss, analyzing the advantages and disadvantages

of their boss's decisions They also believe that the boss is willing and eager tolisten to their comments for the sake of the boss and the company However, unlikeloyal employees, they will do the above things with their boss skillfully andprivately

Fifth, openly support all boss decisions: Even if you disagree with your boss about adecision, loyal employees will not try to find a way to prove that your boss iswrong Conversely, in front of people, loyal employees will do everything to provetheir boss is doing the right thing

Sixth, notice to the boss when he wants to quit his job: No boss wants to lose hisloyal employees But sometimes, loyal employees are forced to say goodbye to bossesand companies to pursue better opportunities, to enter a new field, to set up their owncompany or just want to lifestyle changes However, these employees always

For organizations, Employee satisfaction affects all aspects of corporateoperations including:

The first is increasing personnel performance Employees who are satisfiedwith the work will have better, more devoted, devoted attitude and active learningand development in their work This increases the overall productivity of thecompany and helps the company achieve its goals

The second is to maintain and stabilize the human resources in the company,satisfied employees will have a spirit of attachment to higher enterprises, lessaffected by outside offers Besides, employees will appreciate the collective benefitsbecause when they want to stick, they will "take care", "build" and "protect" theircommon home

Third, when employees are satisfied with their work, they will treatcustomers better and therefore customer satisfaction is also greater

Fourth, the staff will communicate the company outside and that helps the companyattract talents, build good image in the eyes of customers and partners

Fifth, the Company will save money for training new candidates and recruitingcandidates

Sixth, the Company will minimize the errors in the process of work as well

as the process risks by more responsible, enthusiastic employees so they alwaysstrive to do better their work

As for employees, the satisfaction of employees at work not only helps themstick with businesses, but also reinforces their love of business Employees will start tocare about their work instead of worrying about other issues, they feel responsible forthe organization and try to create better results to gain appreciation from the company.They will also deal with customers better and build strong relationships with them

1.4 Factors affecting loyalty

1.4.1 Salary and benefits

Wages are both an expensive and an asset Expensive costs reflect throughlabor costs In the service sector, labor costs account for about 50% of the total cost However, remuneration is also an asset because it motivates employees to

make efforts It is a potential to affect employees' work behavior, motivating

more productive employees Wages help employees improve their work, increase productivity and lower the number of people who quit their jobs

Some companies want to lead in higher salaries than other companies Thesecompanies want to attract talent because they think that paying higher wages thanother firms will attract highly qualified candidates Some companies apply a salarypolicy that is lower than the current salary There are two reasons why thesecompanies pay low wages; one is that the company falls into a difficult financialsituation; secondly, they think that they do not need good workers to do simplejobs But studies have shown that paying low wages does not mean saving a sum oflabor costs On the contrary, the company will be more expensive, because workerswill not be productive, the rate of good people leaving will be high to find otherplaces to pay higher wages

According to Tran Kim Dung (2003), the remuneration is always one of themost challenging issues for managers in all businesses Enterprises often havedifferent views and goals when setting up a pay system, but generally businessesaim to four basic objectives:

Attracting employees: The recommended salary is often one of the mostbasic factors for a candidate to decide whether to accept a job at a business Thehigher the wage paying enterprises are, the more likely they are to attract goodcandidates from the local market

Maintaining good employees: to maintain good employees for businesses,high pay is not enough, but also must show fairness within the enterprise When

regarding labor pay in enterprises often focus on the following issues: the minimumwage regulation, the time and the thing labor law, regulations on child labor,allowances in wages, regulations on social welfare such as social insurance,sickness, maternity, labor accidents,

All employees want to be rewarded for their contributions or contributions incertain ways Workers who can get in an organization are not just money and notall people work for money Money will be a strong encouragement for low-skilledworkers and those pursuing material wealth, but money has little impact on thosewho like to do challenging jobs Therefore, reward must be directed towardssatisfying the individual needs of employees

The theory of expectation indicates that workers will not pursue rewardswhen they realize rewards are not attainable Therefore, the forms of materialencouragement must be designed in such a way that it will create employeeconfidence in the connection between reward and effort

Moreover, the reward must show personal justice (compare the effort spentwith the rewards received) and social justice (compare your efforts and rewardswith others) under the same conditions) If rewards do not give employees anawareness of fairness, it is difficult to have good activities of workers

In addition, to encourage employees 'efforts towards achieving theorganization's objectives, rewarding must be associated with the results andeffectiveness of the performance of employees' tasks

According to Tran Kim Dung (2003), welfare shows the interest ofenterprises to the lives of workers, which stimulates loyal and attached employees

to enterprises Business benefits include: Social insurance and health insurance;retire; leave, holidays; lunch is covered by the enterprise; business subsidies forlarge or disadvantaged employees; Business gifts for employees on birthdays,weddings, happy parents and staff

For Nguyen Huu Than (2001), welfare consists of two main parts: regulatoryand welfare benefits that are voluntarily applied by companies in part to stimulateemployee incentives, and partly to maintain and attract talented people to work for

the company Voluntary benefits are health insurance programs, health insuranceprograms, types of services, programs that pay for harmful benefits - hazards andother subsidies such as grants to establish centers, child care center when theirparents work or a program to diagnose and treat public blood pressure Eachcompany has many initiatives for different types of subsidies, but all have acommon goal of encouraging employees to work, feel secure to work, and stick withmore agencies.

1.4.2 Work environment [6]

The working environment is always concerned by workers because theworking environment is related to personal convenience but it is also a factor thathelps them to fulfill their tasks Workers do not like dangerous, unfavorable andinconvenient working environments Temperature, light, noise, and otherenvironmental factors must be appropriate Moreover, many workers prefer to workclose to home, with clean, modern working facilities and appropriate equipment

1.4.3 Colleague [5]

People get from work from many things, not just money and achievements.For most workers, work also satisfies the need for interaction Therefore, it is notsurprising that people who collaborate and support will increase job satisfaction.Behavior of leaders is also a key factor determining satisfaction Employeesatisfaction increases when their leader is knowledgeable, friendly, and gives praisewhen workers perform well, listening to employees' opinions, and know about theinterests of workers

In order for employees to wholeheartedly serve the business, the superior

influence, encourage encouragement and direction for the activities of the executives toachieve the common goals of the organization, at the same time Based on sometheories show that Leadership has a positive influence on employee loyalty.

According to research by Tran Kim Dung & Nguyen Thi Mai Trang (2007) onthe impact of organizational culture and leadership style on their performance andloyalty to the organization, the new leadership style comes substance (including 3components: attractive-inspirational; intellectual encouragement; personal interest) has

a positive impact on employee loyalty When a leader is able to convey inspiration towork for employees, "providing subordinates with a clear sense of purpose" will givelife force staff to work and have positive thoughts from there, more with the company.The leader also needs to be an example for his subordinates to follow and encourageemployees to find new solutions to complete the job Care and encouragement ofemployees must be done appropriately That is, only encouraging employees, showingemployees that they do it for themselves, not for the company From there they willhave admiration for leaders that stick with the company more

1.4.5 Interest in work

Regarding the challenges of work, the opportunity to use personal abilities andfeel interesting when doing the job People who are not much suited to work are morelikely to leave the organization than those who have a personal and work fit

1.4.6 Recruitment of personnel

The foundation of a business is always a strong, capable and suitable staff ofthe company, loyal to the company In order to have such staff, it asks acombination of many factors such as remuneration, working environment, trainingand development, empowerment, corporate culture, However, the first elementhas The most important role is the recruitment process

1.4.7 Support of the organization

When employees feel that they get help and coordination in good work withtheir colleagues; being encouraged by the higher level will create confidence for them

to strive to accomplish the job well and want to contribute more to the organization

1.4.8 Authorize

The empowerment of businesses to employees is actually a form ofemployee trust, recognizing the competence of employees in the process ofworking No business is risking assigning important jobs, key positions in thecompany to an incompetent person Therefore, this will create the trust ofemployees for the superiors, for businesses Once assigned to take a more importantposition, get promoted, the staff will feel that they are being used, their talents areacknowledged by their superiors and then the staff will think that this is a lips Theschool works well and I can improve further in the future, .Therefore,empowerment of employees is also a factor that increases employee loyalty.

1.4.9 Corporate culture

Corporate culture is to create a code of conduct for businesses withoutcreating a directive This way of doing business not only has the effect ofpromoting businesses to implement the "human-centered" business method, butalso makes the capacity of product development and unity capacity unite Thecollective of the business becomes prosperous, increasing the employee'sattachment to the business, increasing employee loyalty to the business

1.4.10 Training and developing [11]

Training and development helps employees update new skills and knowledge,enabling them to successfully apply technological and technical changes in theenterprise At the same time, it helps employees get the necessary skills foradvancement opportunities and substitutes for necessary managers and professionals

Satisfying training and development needs for employees will stimulateemployees to perform better jobs, achieve better achievements, want to be given

In the system of management theory and encouragement, Abraham Maslow'stheory of demand hierarchy (1943) is a theory that has a vast understanding A.Maslow believes that human behavior stems from human needs and needs arranged

in a priority order from low to high in importance Demand levels are arranged intothe following five levels:

The basic needs or physiological needs: it is the need related to the essentials

to survive such as food, air, housing, clothing, Within the organization, thisdemand is expressed mainly in salaries and benefits

Safety needs: including personal safety such as no attack, threatening war,natural disasters; financial safety such as economic crisis, unemployment; Healthsafety such as no sickness, accidents, etc In the organization, this demand isreflected in the safety of the work, the protection of labor, long-term stable work,

Social needs: When the needs of physiology and safety are satisfied, the thirdhigher demand appears that is the need for social relations such as friends, family,and community participation social, loved,

Needs are respected: Everyone has a need to be respectful and respectful.Respect comes from people wanting to be accepted and valued by others In theorganization, this need represents being organized to recognize employees'contributions, work in a high position and increase responsibility

Demand for self-affirmation: This is the highest and most unsatisfactorydemand in Maslow's demand ladder This is the need to express each person's "I".More specifically, at this level people have the need to develop their own capacityand improve themselves In the organization, this need is reflected in the training,coaching, advancement, and the opportunity to promote the capacity and creativity

A Maslow divided the needs into two levels: high and low Low-level needs arephysiological and safety and security needs High-level needs include social needs,need for respect and the need to assert themselves

A Maslow said that satisfying lower-level needs is easier than satisfyinghigh-level needs because low-level needs are limited and can be satisfied from theoutside He argued that first-class needs work, it requires satisfaction and so itmotivates people to act - it is a motivating factor When these needs are satisfied, it

is no longer a motivating factor, then higher level needs will appear.

Maslow’s demand theory has an important implication for managers that tomotivate employees it is important to understand what level of needs your workersare at From that understanding allows you to devise appropriate solutions forsatisfying employees’ needs while ensuring organizational goals

1.5.2 Two-factor theory by F Herzberg

The two-factor theory is given by Frederick Herzberg, an Americanpsychologist He surveyed the sample with the objects of accountants and engineers.Each person will be interviewed about his or her work to find out positive (satisfied)

or non-positive (dissatisfied) factors that affect job satisfaction The analyticalresults have identified two groups that have conflicting effects on work, specificallyshown in the following table:

Table 1Motivating and maintaining elements of F.Herzberg

regulations

(Source: Author's synthesis)

to pleaseemployees Managers must first improve the retention factors before they want to

17

Victor H Vroom believes that encouragement is the result of an individual'sexpectations The encouragement of people depends on two factors, the level of theindividual's desire to deal with the job and how the individual thinks about the job andhow it will be achieved Therefore, to motivate workers, we need to pay attention to theperceptions and expectations of individuals in terms of situation, rewards, ease ofimplementation in a way that will reach rewards and guarantees Make sure the reward

is paid Theory expects that managers must understand employees' expectations andalign these expectations with organizational goals For this, the administrator should:create the outcomes that the employee desires, create the need to implement to achievethe organizational goals, ensure the desired level of performance can be achieved,closely linked expected results with the necessary implementation, assessing thesituation with different expectations, ensuring the reward is sufficiently attractive andfair for everyone (Nguyen Huu Lam, 1996, p .127-128)

1.5.4 Theory of fairness

Fair doctrine states that workers compare what they put into a job (input)with what they receive from that job (output) and then compare the input-outputratio of them with the input-output ratio of others If their rate is equal to the rate ofothers, it is assumed that there is a fair situation If this rate is not equal, they thinkthere is an injustice When unfair conditions exist, employees will make efforts tocorrect them

Fair doctrine implies that when employees visualize injustice, they may haveone or more of the following five possibilities:

 Distort the inputs or outputs of yourself or others.

educational level and talent, are compared with outputs such as wages, salaryincreases, recognition and other factors When people realize that there is adifference in their input-output ratios compared to others, there will definitely betension This tension provides the basis for motivation, when people strive to gainwhat they consider to be fair and satisfactory.

Employee motivation is greatly influenced by relative rewards as well asabsolute rewards When employees are aware of an injustice, they will take actions

to correct this situation The result may be higher or lower productivity, betterquality or less, increased absenteeism, or voluntary resignation

1.6 Some previous research on employee loyalty

The fact shows that organizational leadership and culture have an impact onthe loyalty of specific employees:

New leaders in substance affect employee loyalty, but this is not true inforeign-invested enterprises Due to the fierce nature of foreign-invested enterprises,many employees, although still achieving good working results, cannot bear thehigh pressure of work for a long time to accept to transfer to another company

New culture - supporting with creating a supportive, goal-oriented workenvironment, creating excitement for everyone, has a good effect to keep employees Ithas an effect on employee loyalty in all three types of business ownership

Administrative culture; Administrative culture does not affect employeeloyalty in domestic businesses but has an impact on employee loyalty in foreign-invested enterprises When applying to work in foreign-invested enterprises,workers have been looking forward to working in a professional workingenvironment, if this is not achieved, workers can easily leave the business Incontrast, when agreeing to work for domestic enterprises, workers often easilymimic and accept administrative tables, non-professional manners and practiceadapting to businesses

Vu Khac Dat (2008) Research on factors affecting the loyalty of employees

in the South, Vietnam Airlines, the author studied the following six factors:

1 The nature of the work

2 Training - Development

4 Treatment: Combining from two factors: Wages and Welfare

5 Operating environment: combining from 2 elements of Colleagues and Working Conditions

The results of the author's research show that the most powerful factorsaffecting employee loyalty are environmental factors Both leadership and workfactors have a positive impact on the employee's overall satisfaction as well as theirloyalty to the company Therefore, measures to increase the satisfaction ofemployees in the company by impacting on these two factors as well as increasingtheir loyalty to the company

Research of Turkyilmaz, Akman, Coskunozkan and Pastuszak (2011) Thisstudy aims to evaluate the factors affecting employee satisfaction and loyalty in theorganization

Salary, bonus and recognition

This study assesses the direct impact of factors on employee loyalty in thecompany

Figure 2Calibration model in Mehta's study, Singh, Bhakar & Sinha (2010)

The results of quantitative analysis show that factors such as career development,work motivation, cohesion, work safety, leadership style and cohesion will directly affectthe loyalty of people All of these relationships are positively related, which means that theincreased results of these independent factors will enhance employee loyalty in thecompany Research by Ahmad Ismail Al-Ma’ani (2016) This study assesses the directimpact of factors on employee loyalty in the company

Employee recruitment

Delegation

22

Figure 4 Correction model in Ajami's study (1998)

Research results show that employee loyalty has a meaningful relationshipwith employee satisfaction and also shows a relationship with supervision,communication, advancement, and lips The school works at the company

Research by Kumar & Skekhar (2012) This study assesses the direct impact offactors on employee loyalty in the company in India

Participate in the development of the

company

Recognize the role

The loyalty of employees Salary

Reward

the organization's development, here These are factors that are related to employeeloyalty in the organization.

Research by Athar Waqas et al (2017) This study assesses the direct impact

of factors on the loyalty of employees in the company in Pakistan

Participate in the decision-making

process

Work environment

Theloyalty ofemployeesSatisfaction

Rewards and recognition

Authority

Figure 6 Calibration model in the study of Athar Waqas et al (2017)

The analysis results show that, with the variables in the model such as:participating in the decision-making process, authorization, rewards andrecognition, working environment, satisfaction The analytical results show thatthere is a clear impact of participation in decision-making, rewards and recognition,the working environment to the satisfaction and satisfaction of the customers, whichstrongly affects their loyalty

Ketbi's research (2006) This study assesses the direct impact of factors onthe loyalty of public administration employees in Sharjah Police

Personal factor

Loyalty of employeesWork environment

Figure 7 Calibration model in Ketbi's research (2006)

The results show that, for the loyalty of employees who work in the public

administration field at Sharjah police station, show that there is a relationshipbetween employee loyalty and environmental variables Work school, personalcharacteristics of employees.

Research by Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016) Thisstudy assesses the impact of factors on the loyalty of employees working inorganizations in Ho Chi Minh City

Salary and recognition

Training and developing

Figure 8 Calibration model in the study of Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016)

By quantitative analysis, the results show that the model consists of 6independent variables: training and development, working conditions, relationshipswith superiors, rewards and recognition, relationships with colleagues andchallenges at work The results show that there is a significant impact of trainingand development, working conditions, relations with higher levels that affectsatisfaction and satisfaction with the change of loyalty of employee

From the above studies, recognizing the important role of factors such as

author decided to include more variables such as: relations with superiors,

relationship with motivation and income into the model

Salary and recognition

Training and developing

The loyalty of employees

Figure 9 Calibration model in research by Nguyen Thi Thu Hang and Nguyen Khanh Trang (2016), Tran Kim Dung (2005)

1.7 Research model

Based on previous theories, studies, and group discussions as well as

suggestions of instructors, the author proposes the following research model:

Salary

The loyalty of employees