Factors affecting employee performance a study on joint venture companies in vietnam

Lunghwa University of Science and Technology Department of Business Administration Thesis for a Master’s Degree Factors affecting employee Performance: a study on joint venture compa

Lunghwa University of Science and Technology Department of Business Administration Thesis for a

Master’s Degree

Factors affecting employee Performance:

a study on joint venture companies in

Vietnam

November 2017

Lunghwa University of Science and Technology

Approval Certificate of Master's Degree Examination Board

This is to certify that the Master’s Degree Examinations Board has approved the thesis Factors affecting employee performance: a study on joint venture companies in Vietnam published by Mr Nguyen Van Dzung in the Master Program of Graduate School of Department of Business Administration

Master’s Degree Examination Board

Board Members : Assoc Prof., PhD Nguyen Van Dinh

Dr Nguyen Thị Hong Hanh

Advisors : Professor Kenneth Wang

Dr Dao Van Tien

Chair : Kai – Tang Fan

Date : 2018/01/20

ABSTRACT

Thesis Title: Factors affecting employee performance: a study on joint venture

University : Lunghwa University of Science and Technology

Graduate School：Department of Business Administration

Date：December, 2016 Degree：Master

Graduate Student：Nguyen Van Dzung

Advisor 1: Professor Kenneth Wang

Advisor 2: Dr Dao Van Tien

Keywords: Employee performance, factor, joint venture company, Vietnam,

leadership, organizational culture, working environment, training, motivation

Value of research:

This research project aimed at giving a new direction in terms of quality analysis of human resources, evaluating the staff working results with quantitative research methods and modeling of research factors It may help the company's leadership and set up the strategic that focusing on the personnel helpful to stabilize and improve the staff’s results and the quality of human resources for Vietnam joint venture companies in particular and others in general

Research scope:

The research was conducted at joint venture companies in Hanoi, Vietnam which operate in variety fields (e.g., architectural design, construction industry, engineering, manufacturing, the building trade, etc)

Specific objectives of the research include:

1 Identify a number of factors affecting the results of the staff working at the joint venture companies in Vietnam by establishing regression model between the determinants such as leadership, organizational culture, working environment, training and motivation and their work performance

2 Based on the results of quantitative research, propose solutions to help corporate governance committee making personnel po licy in order to improve working results

of employees, improve the quality of human resources in Vietnam joint venture companies

Acknowledgements

Firstly, I would like to express my sincere gratitude to my advisor Prof Kenneth

Wang for the continuous support of my Master study and related research, for his

patience, motivation, and immense knowledge His guidance helped me in all the time

of research and writing of this thesis I could not have imagined having a better advisor and mentor for my Master study

Besides my advisor, I would like to thank the rest of my thesis committee: Dr Dao Van

Tien, for his insightful comments and encouragement, but also for the hard question

which incented me to widen my research from various perspectives

Last but not the least, I would like to thank my family: my parents and to my brothers and sister for supporting me spiritually throughout writing this thesis and my life in general

Hanoi,…………/…………./ 2017

Author

Nguyen Van Dzung

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION 1

1.1 Background of the study 1

1.1.1 Joint Venture Companies in Vietnam 1

1.2 Motivation 6

1.3 Objective of the study 6

1.4 Value of the study 7

1.5 Summary 7

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT 8 2.1 Theoretical background 8

2.1.1 Employee Performance 8

2.1.2 Factors Affecting Employee Performance 9

2.1.3 Conceptual Framework Development 12

2.1.4 Mcgregor Theory X and Theory Y 12

2.1.5 Herzberg, Mausner and Snyderman's two factor theory 13

2.2 Hypothesis development 14

2.2.1 The effect of leadership on employee performance 14

2.2.2 The effect of organization culture on employee performance 15

2.2.3 The effect of working environment on employee performance 15

2.2.4 The effect of training on employee performance 15

2.2.5 The effect of motivation on employee performance 16

2.3 Summary 17

CHAPTER 3 RESEARCH METHODOLOGY 18

3.1 Research design 18

3.2 Research model 19

3.3 Research hypotheses 19

3.4 Choice of measures 19

3.5 Sample techniques 22

3.6 Data collection methods 23

3.7 Data quality control 23

3.8 Data analysis method 23

3.9 Summary 24

CHAPTER 4 DATA ANALYSIS AND RESULTS 26

4.1 Pilot testing 26

4.2 Descriptive statistics 26

4.3 Assessment and Refinement of measurement scales 29

4.3.1 Refinement of measurement scale 29

4.3.2 Exploratory Factor Analysis (EFA) 32

4.3.3 Exploratory factor analysis, independent variables 32

4.3.4 Exploratory factor analysis, dependent variables 35

4.4 Hypothesis testing 35

4.4.1 Regression analysis 35

4.4.2 Hypothesis testing 36

4.5 Summary 37

CHAPTER 5 CONCLUSION AND DISCUSSION 38

5.1 Summary of findings 38

5.2 Conclusions 39

5.3 Managerial implications and Recommendations 40

5.4 Limitations and Future research 41

REFERENCES 42

FULL NAMES OF ACRONYMS

The following acronyms have been used in this thesis:

JV: Joint Venture

JVs : Joint Ventures

JVC: Joint Venture Company

JVCs: Joint Venture Companies

HRM: Human Resource Management

LIST OF TABLES

Table 1: Top 10 countries invest in Vietnam in 2016 2

Table 2: Form of investment of FDI up to 2016 3

Table 3: Survey’s Items 18

Table 4: Demographic description 25

Table 5: Mean value 26

Table 6: Reliability test result 28

Table 7: KMO and Bartlett’s Test 30

Table 8: Total Variance Explained 31

Table 9: Rotated Component Matrix 32

Table 10: KMO and Bartlett’s Test for dependent variable 33

Table 11: Component matrix of dependent variable 33

Table 12: Regression analysis results 34

LIST OF FIGURES Figure 1: Characteristics of JVCs in Vietnam 2

Figure 2: Conceptual research model 10

Figure 3: Research model 17

1

CHAPTER 1: INTRODUCTION

The purpose of this chapter gives a brief background to the subject of the study, which will give the reader a comprehensive overview of study It is continue by presenting the background of the study This is will followed by providing the statement of research problem, research question and highlight the exactly goals for this research

1.1 Background of the study

1.1.1 Joint Venture Companies in Vietnam

“A joint venture company (JVC hereafter) is a separate legal organizational entity representing the partial holdings of two or more parent firms, in which the headquarters of at least one is located outside the country of operation of the joint venture This entity is subject

to the joint control of its parent firms, each of which economically and legally independent of the other” (Newburry & Zeira, 1997, p 89) Elango and Sambharya (2004, p 110) additionally define joint ventures (JV hereafter) as” a partnership wherein the venture (business) is jointly owned by two or more firms” Shared ownership such as JVC gives the possibility to share not only risk but also strengths, especially local market knowledge of aimed market partner (Al-Kaabi et al 2010) Further, Kirby and Kaiser (2001) also share this assertion “joint venture can

be seen primarily as a device to gain access to resources embedded in other organizations and, […] and as a mean of acquiring local management expertise and connections to facilitate fast entry into new markets” This entry mode allows more flexibility in the sourcing and deployment of resources This, on the other hand, facilitates the overcoming of industry barriers and minimization of risks of liabilities of foreignness (Elango & Sambharya, 2004) Moreover, JVC can also have a local partner that “can help firms gain legitimacy because partnering with a local firm can help it create structures and activities that conform to local norms, values and expectations” (Brouthers et al 2008, p 193)

In Vietnam, joint venture companies (JVCs hereafter) is established in the form of a limited liability company or joint stock company, each party of the joint venture companies shall be responsible depend on the amount of capital committed to contribute to the legal

2

capital of the enterprise A JVC will have the legal representative status in accordance with the law of Vietnam, which establish and operate from the date of investment license

Figure 1: Characteristics of JVCs in Vietnam (Voer, 2016)

There are four main types of JVCs in Vietnam: Vietnamese party and a Foreign party; Vietnamese party and Foreign parties; Vietnamese parties and a Foreign party; and Vietnamese parties and Foreign parties

Operational status of JVCs in Vietnam:

The number of projects granted licenses in the year to December 2016 was 2,556 with

$15.1 billion in total register capital Among 95 countries and territories investing in Viet Nam

in 2016, the Republic of Korea led in the term of capital with $7 billion (28.8 per cent of the total) Japan came second with $2.58 billion (10.62 per cent), and Singapore was third with

$2.41 billion (9.9 per cent)

Table 1: Top 10 countries invest in Vietnam in 2016

Order Country Registered capital

Joint Venture Companies in Vietnam

Business characteristics

Co-own capital Management

Legal characteristics

JVCs operating in the form of a joint venture contract.

A joint venture company is a legal entity

3

Sources: The report of the Planning and Investment portal (2016)

JVC is one of the most three popular foreign companies in Vietnam As showed in Table 2, up to the end of 2016 JVC holds the second position of foreign invest companies in Vietnam It invests in 3.863 projects as more than USD 71 billion registered capital and accounts for 18 percent of total project, 25 percent of total registered capital The first position

is belong to 100% Foreign-Invested Companies with 17.629 projects as more than USD 189 billion registered capital 80 percent of total project, 67 percent of total registered capital The third position is Business Co-operation Contract form with 305 projects as more than USD 6 billion registered capital or 1.4 percent of total project, 2.2 percent of total registered

Table 2: Form of investment of FDI up to 2016

Order Form of investment Total project Total registered capital

Sources: Report of Foreign Investment Agency 2016

JVC in Vietnam operates in various fields, such as architectural design (ex: Sunjin Vietnam joint venture company, Vinacad, Sunjin E&A); construction industry (ex: Phu My Hung Corporation, New CC Construction Consultants); engineering (ex: Fujita Engineering ); manufacturing (ex: Honda Vietnam, Canon Vietnam Co., ltd); the building trade (ex: Urban infrastructure development investment corporation); logistic (ex: Glory logistic joint venture co., ltd, Transworld QBV ICD ); alcoholic beverage industry (ex: Heineken Vietnam), etc and has a great contribution to Vietnam’s economy For examples

4

Honda Vietnam:

Established in 1996, Honda Vietnam is a joint venture between Honda Motor Co (Japan) Co., Asian Honda Motor (Thailand) and the Corporation movers and machines Agriculture Vietnam with 2 branches main products: motorcycles and cars After nearly 20 years in Vietnam, Honda Vietnam has constantly developed and become one of the leading companies in the field of producing motorcycle and automobile manufacturing reputation in the Vietnam market Since receiving the investment license on the date 03/22/1996, Honda Vietnam has so far invested about $ 530 million building three factories and one motorcycle assembly factory assembling Including three motorcycle factories has a total investment of up

to $ 470 million with a capacity of 2.5 million units / year, a car factory with a total invest ment

of USD 60 million with a capacity of 10,000 units / year Created nearly 10,000 jobs and contribute to the budget over 40,000 billion VND through taxes (Honda, 2016)

Heineken Vietnam:

Heineken Vietnam Brewery Limited Company (Heineken Vietnam Brewery) was established on December 9th, 1991 by Saigon Trading Group (SATRA) and Asia Pacific Breweries Ltd (APBL) – now Heineken Asia Pacific Pte Ltd (HEINEKEN Asia Pacific)

The brewery covering an area of 12.7 hectares in Thoi An Ward, District 12, HCMC is one of the most modern breweries in Southeast Asia For a number of years, Heineken Vietnam Brewery has been one of the top corporate tax payers in the city and is recognized as one of the most effective businesses in Ho Chi Minh City In 2016, Heineken Vietnam has contributed 33,500 billion for Vietnam's economy, equivalent to 0.75% of total national GDP(sources: http://heineken-vietnam.com.vn), Heineken Vietnam Brewery has also contributed significantly to creating employment opportunities, hiring around 1,600 locals and creating thousands of jobs for suppliers and partners in Vietnam

Apart from the innovative brewery in District 12, Heineken also has three big projects such as: Heineken Vietnam Brewery Danang, Heineken Vietnam Brewery Quang Nam, Heineken Vietnam Brewery Tien Giang

Big C Vietnam:

5

In 1998, after many years in the field of food, refined sugar, marine services ., Bourbon established Vindémia Company and opened the first supermarket in Vietnam with the French style Cora brand In Dong Nai The company also has a stake in the Casino Group The investment cost of Cora Dong Nai was about $ 54 million, of which 65% was from Bourbon and the remaining 35% from Donimex, a state-owned import-export company in Dong Nai province In April 2016, Big C Vietnam joined Central Group Thailand, one of the leading retailers in the South Asia region After nearly 20 years of development in Vietnam Big C created over 8,477 jobs with the system of 35 Big C Supercenter and 31 shopping mall across Vietnam Only in 2016 Big C has contributed to the state budget nearly 2,000 billion VND

1.2 Motivation

Employee performance is a topic that has received very significant attention by managers and researchers alike (Gautam, Mandal & Dalal, 2006) It is acknowledged with certainty that no organization may possibly thrive without their employees Employees are the main reason any organization might have the potential to keep in existence for a long time Like JVCs in Vietnam, employees are the ones who play the major roles and make significant contributions to the organization High employee performance would influence the efficiency of the organization and could lead to achieving the organization's vision and goals (Hussin, 2011) A review of the related literature indicates that to date, previous studies on employee performance has mentioned the factor that affects employee performance such as leadership, organization culture, working environment, training and motivation and how that contributed to it being attained But not much research on its impact towards performance was conducted (Dinler, 2008) Besides, most of these existing studies on employee performance have been carried out over the years but they are largely based on the western organizations such as US, UK (e.g., Grand, Fried & Juillerat, 2010) and very few studies have been researched in Asia organizations/companies This brings about a great gap that needs to be filled with tremendous research because employees in different environments and who are affiliated to different cultures cannot attain the high efficiency employee performance from the same factors Accordingly, there is an emerging call for exploring the phenomenon under discussion in Asia organizations/companies, such as in Vietnam

1.3 Objective of the study

In view of the extant literature gap, the general objective of this study is to empirically assess a conceptual framework on the factors affecting employee performance in JVCs in Vietnam Specially, this study firstly examines how leadership factor to have an impact on performance of employees in Vietnam JVCs Secondly, this research also assesses the role of organization cultural factor in enhancing employee performance in Vietnam JVCs Thirdly, this study tries to find out whether working environment factor has an impact on employee performance in these companies Finally, this study purposely identifies how training and motivation factors to improve employee performance in Vietnam JVCs

1.4 Value of the study

This study makes essential contributes to scholars and practitioners in several ways In view of scholars, this study shall benefit both the public and academia through understanding the factors that influence employee performance in the JVCs For the academia, the study may advance knowledge in employee performance in the private sector As a result, this study may further encourage more research to be carried out in performance management

From practitioner’s view this study will give new insights on the performance management thought This will benefit organizations whether public or private to review their performance management systems to enable them to attain their strategic goals Managers and leaders of companies may use the results of the study to support employee performance by reinforcing those factors that influence their performance In detail, this study exposes an area within the performance management of JVCs in Vietnam that needs to be improved to ensure and maintain higher performance Thus, this study shall give an opportunity to participating employees to suggest ways they can maintain or enhance their performance Further, this study also shall be useful to other JVCs who may benefit by replicating the study to determine factors which influence employee performance in their organizations Moreover, this study may be useful for benchmarking employee performance within the public service as well as the private sectors in Vietnam

1.5 Summary

This chapter presents general theoretical and statistical background about employee performance Discussion of the aims of this study and elaboration of the research questions follow In addition, this chapter explains the purpose of the study, reasons for the study, and its significance In the following chapters, we will discuss in-depth the content and results of the research

CHAPTER 2: LITERATURE REVIEW AND

HYPOTHESIS DEVELOPMENT

This chapter reviews related empirical literature on the subject matter The relevant literature will be reviewed under the following outline: Mcgregor Theory X and Theory Y and Herzberg, Mausner and Snyderman's two factor theory This section brings to light what can be done to improve the employee performance to achieve organizational objectives goals JVCs in Vietnam is selecting as the dimension to study the several of factors that can enhances employee’s performance

2.1 Theoretical background

2.1.1 Employee Performance

In the organizational context, performance is defined as the extent to which an organizational member contributes to achieving the goals of the organization Employees are a primary source of competitive advantage (Luthans & Stajkovic, 1999; Pfeffer, 1994) or to be viewed as resources or assets and values of organizations Employee performance is delineated as the record of outcomes achieved for each job function during a specified period (Deadrick & Gardner, 1997) In this view point, performance is represented as a distribution of outcomes achieved and could be measured by using a variety of parameters which describe an employee's patent of performance over time

Employee performance plays an important role for organizational performance and is originally what an employee does or does not do Macky and Johnson (2003) pointed out that improved individual employee performance could improve organizational performance Further, Darden and Babin (1994) said employee's performance is a rating system used in many corporations to decide the abilities and output of an employee Good employee performance has been linked with increased consumer perception of service quality, while poor employee performance has been related to increased customer complaints and brand switching

Employee performance could include: quantity of output, quality of output, timeliness of output, presence at work and cooperativeness (Güngör, 2011) Moreover, employee performance is linked to the efficiency of working output and it reflects the effectiveness of individual in term of assigned tasks (Mathis and Jackson, 2009) In

addition, employee performance is often put into valuation periodically with acceptable standards or minimum requirements that one employee needs to surpass (Le and Hwang, 2016) Aguinis (2009) addresses the employee performance as overall result of working and employee’s behavior and this researcher highlights the importance of employee perception about his/her performance and this perception contributes directly

to organizational success

2.1.2 Factors Affecting Employee Performance

It has long been established that no single factor could be seen as singularly influencing employee performance substantially to an extent that it can be seen as holding a secret key to performance enhancement A study by Van and Herholdt (2004) found that various factors were responsible for influencing employee performance in an organization These factors are basically what drive employees to efficiently and effectively work for the organization These factors have been grouped into five headings for a more detailed discussion: leadership, organization culture, training, working environment and motivation

Leadership is a process whereby an individual influences a group of individuals

to achieve common goals (Northouse, 2007) Leadership is the combination of attitude and behavior of a leader, which leads to certain patterns in dealing with the followers (Dubrin, 2004) The leadership within an organization has a bearing on encouraging or inhibiting employee’s performance (Armstrong & Murlis 2004; Cronje et al 2001)

According to Safferstone (2005), the need for leadership is “a perennial subject that traces its beginnings to the Old Testament, ancient China, and sixteenth-century Italy” (p 959) Numerous theorists have determined the need of leadership in contemporary organizations and clarified the definitions of leadership (Ardichvili & Manderscheid, 2008; Bailey & Clarke, 2008; Boaden, 2006; Dalakoura, 2010; Day, 2000; Klagge, 23 1996; Mostovicz, Kakabadse, & Kakabadse, 2009) They have also asserted the positive impact of effective leadership on organizational performance and suggested leadership types and leadership development approaches for organizations to succeed in today’s highly competitive business environment

There is no fixed, universal definition or understanding for culture, and neither for organizational culture, there is no single definition for it In general, as indicated by Knapp (2006) the organizational concept of culture is an adaptation of the

anthropological concept Researchers in academic sector have given various ways of defining organizational culture

Organization culture is defined in previous studies and it is considered important concept in human resource management framework (Mehr et al., 2012) O’Reilly and Chatman (1996) define organization culture as a system to share values and norms among shareholders of the companies Most of previous studies consider organization culture as the combinations of assumptions, norms, values, believes, and point of view

of people within the companies (Deal et al., 1982)

Alvesson (2002:3) used this term as “an umbrella concept for a way of thinking which take serious interest in cultural and symbolic phenomena” The author also included values and assumption about social reality in that

In other words, Geert (2014), in his website, refers to organizational culture as

"the collective programming of the mind that distinguishes the members of one organization from others”

Training is defined as set of activities that are conducted by Human resource managers and functional managers to increase professional skills and working attitude for the employees (Landy, 1985) When the employees receive training, it is expected a significant improvement in personal development, working skills, and job experiences (Patrick, 2000) The concept of training is also closed to the concept of development and they are often used interchangeably (Obisi, 1996) However, some researchers point out the difference between training and development Steinmetz and Lawrenc (1996) emphasize that training is often conducted in short term to improve working skills while development is often carried out in long term and its objective is to upgrade the employees from staff level to managerial level Miller (2006) emphasizes that training directly supports working performance while development supports the employees’ career path

DeCenzo & Robbins (2000), explain training as a “learning experience, in that,

it seeks a relatively permanent change in an individual that will improve his ability to perform on the job” This mean training must be designed in such a way that, it will involve the either the changing or enhancing of skills, knowledge, attitudes, and social behavior This change or enhancement of skills, knowledge, attitudes, and social behavior could involve what the employee knows, how he works, his relations and interactions with co-workers and supervisors

According to G.P Nunvi (2006), training programs are directed towards maintaining and improving current job performance while development seeks to improve skills for future jobs Considering the progress in the technology, certain jobs become redundant with the replacement of machines in present days Further education and competence becomes necessary for those in current positions and those wishing to

be promoted in the future

Expressing an understanding of training, Armstrong (1996), emphasized that training should be developed and practiced within the organization by appreciating learning of theories and approaches, if training is to be well understood

Working environment is defined as the instruction of work between the managers and the employees regarding to following perspectives: delegation, control, coordination, and communication (Robbins, 2008) Working environment is depended

on external environment such as economic, society, legal, technology, and politics (Malik et al., 2011)

Osland (2007) confirm that people spend the majority of their waking hours at work and that the quality of their work experience has a large influence on the quality

of their lives in general, and they acknowledge the fact that every working person would prefer to work in a good working environment They continue to define a great working environment to be a place where employees trust the people they work for, have pride

in what they do and enjoy the people they work with

Motivation is fundamental concept within HRM framework and it often refers to the employees’ behavior (Shazadi et al., 2014) The concept of motivation is emphasized as the employees’ orientations towards autonomy and freedom of the employees (Ryan & Deci, 2000; Thomas, 2002) Motivated employees have the demand

of availability in development while less motivated employees do not have such demand (Grant, 2008)

Motivation is significant because even people with the required knowledge, skills, and abilities will perform poorly if they are not motivated to devote their time and effort to work (Harris in Milapo, 2001: 29)

According to Latham and Ernest (2006) motivation was in the beginning of the 1900s thought only to be monetary However, it was discovered during the 20th century that to motivate employees, there are more factors than just money In their view, employees’ satisfaction with their job is an important indicator for a good job

performance and happy employees are productive To them, motivation is a

psychological factor and is affected by the workers’ mental attitude and health

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

If these needs are lacking, a person’s self-esteem and self-actualization cannot develop

This could result in lack of interest to progress and develop, both professionally and

personally There are several theories of human needs, which are the foundation of

motivation

Lindner also indicates that the most difficult role of managers is to motivate

employee, because what motivates employees changes always (Bowen and

Radhakrishna 1991, 16-22)

2.1.3 Conceptual Framework Development

Through the basis theoretical, the research model focuses on analyzing and

measuring the impact of 5 factors including: leadership, organization culture, working

environment, motivation and training on the employee performance

Figure 2: Conceptual research model

2.1.4 Mcgregor Theory X and Theory Y

Mcgregor Theory X and Theory Y is developed based on how people observe

employee behavior in both of working and personal life perspective (Situma and Iravo,

2015) In this context, Mcgregor indicates that firms’ observations are conducted upon

on two contrast approaches or theory X and theory Y

Under theory X, the management must ensure that monetary or material or

people as assets of the firms to be obtained The main content of theory X highlights the

Training Motivation

nature of human as they are inborn selfish and lazy and therefore they are not able to perform in good manner In this context, the firms need to provide mechanism that persuade, encourage, reward, and punish the employees to make their employees to achieve individual and overall business objectives and goals (Situma and Iravo, 2015)

Under theory Y, the managers are organized all the elements of productive such

as money, materials, working machine, and people to meet the economic value (Situma and Iravo, 2015) This theory is contrast to theory X as the employees are not resistant

to organizational needs and goals and the employees are ready to express self-direction when they commit to carry out tasks that are aligned with overall business goals and objectives (Situma and Iravo, 2015)

2.1.5 Herzberg, Mausner and Snyderman's two factor theory

Frederick Herzberg (1959) is the first researcher whose systematic study led to identify employee motivating factors Herzberg with his colleagues Bernard Mausner and Barbara Snyderman conducted a study on accountants and engineers in Pittsburg,

PA area The result of this study provided a basis for what is referred to as “Herzberg’s two factor theory” This theory is also recognized as job attitude theory The study depicted that job satisfaction and dissatisfaction are not contradictory terms (Herzberg, 1968) As cited by Frederick Herzberg (1959), there are two sets of needs There is built

in drive to avoid pain from environment and basic biological drive which necessitates earning money i.e money becomes a specific drive Another set includes ability to achieve and, through achievement, to experience psychological growth The growth in case of employee in the organization is related to job content Again, the stimuli inducing pain avoidance behavior is found in job environment Growth or motivators that are intrinsic to the job are achievement, recognition for achievement, responsibility and growth or advancement Pain avoidance or dissatisfaction or hygiene factors that are extrinsic to job are company policy and administration, supervision, interpersonal relationship, working conditions, salary status and security What makes them different from motivators is the fact that they are not related to the content of the work but to the context of the job itself (Herzberg, 1974)

Two factor theory is not avoided the criticism from other researchers Nel et al (2001) highlight that this theory oversimplifies work motivation due to there are other factors that impact to employee’s job satisfaction and dissatisfaction Gardner (1977) emphasises about another issue related to this theory as it is formulated upon on

traditional interview method which is subjective manner Moreover, Vroom (1964) identifies that the employees are expected to more readily recall positive events which reflect upon themselves, and negative events which can be attributed to external conditions Although two factor theory gains criticisms from other researchers, this theory is still being used intensively in the studies about job satisfaction (Kim, 2004)

Stiuma and Iravo (2015) mention about the importance of hygiene factor which

is associated with job content and it includes company policy and administration, technical supervision, salary, interpersonal relationship with supervisors and work conditions However, hygiene factor is not enough to satisfy the employees Therefore, the firms need to acquire motivation factor to encourage the employees to work better and harder Motivation factor includes achievement, recognition, work itself, responsibility and advancement In this context, the study is developed with concentration of hygiene factor and motivation factor as main explanatory variables to changes of employee performance at work

2.2 Hypothesis development

2.2.1 The effect of leadership on employee performance

Concept of leadership is originated from the concept of leadership As cited by Stodgill (1948), leadership is defined as the process of influencing the activities of organizations in term of formulating business goals and achievements Moreover, Anderson et al (1998) assert that leadership is broaden concept and it covers compliance, respect, and cooperation among employees and between employees and their supervisors Mcswain (2010) highlights that leadership referring to capacity of the leaders in term of listening and observing people at work as well as transforming their expertise to encourage employees to work in better performance The influence of leadership to employee performance is clarified in previous studies Wall et al (1996) indicate that effective leadership is important due to organization has many employees and therefore the employees need to be aligned with common business goals and long term development On the other hand, it means that effective leadership is critical requirement and it enables greater participation of entire workforces as well as addressing individual performance to contribute to overall business (Bass, 1997; Mullins, 1999)

From this discussion, H1 is proposed:

H1: Leadership has a positive effect on employee performance at JVCs

2.2.2 The effect of organization culture on employee performance

According to Chow et al (2001), the setup and the maintenance of organization culture impact to desired outcome both in organization and individual level Rittchie (2000) identifies earliest studies’ conclusion referring to the fact that organization culture affects to business outcomes, including employee productivity, performance, and commitment Recent empirical evidences, similarly affirm that organization culture impacts significantly to employees’ behavior and motivation at work and it also influences to financial performance of the companies (Holmes & Marsden, 1996) The reason of organization culture’s impact to employee performance is reflected through its influence to many aspects of the companies’ business lines such as innovative technologies (Deterts et al., 2000), workplace practices (Hoppock, 1935), IT system (Weber, 1996), business strategy conduction (Cabrera & Lee, 1999), and business planning (Hellriegel and Slocum, 1974)

From this discussion, H2 is proposed:

H2: Organization culture has a positive effect on employee performance at JVCs

2.2.3 The effect of working environment on employee performance

Working environment is considered as having positive or negative to employee performance depending on its situation According to Srivastava (2008), working environment influences on employee performance through two subsets: physical environment and psychological environment Srivastava (2008) also affirms that employee performance much depends on illumination, noise, atmosphere, etc The study of Richard (2003) highlights that present company’s take into account their working environment as a tool to push employee performance Mustaffa (2012) conducts empirical test on the effect of working environment to employee performance

in comparison with other factors, including training and development, management involvement, and staff motivation Achieved result shows that working environment has positive impact to employee performance and this relationship is statistical significant

From this discussion, H3 is proposed:

H3: Working environment has a positive effect on employee performance at JVCs

2.2.4 The effect of training on employee performance

During the time, there are many studies that bring empirical evidence for significant impact from training to employee performance On the other hand, it means that effective training will increase productivity, reduce job turnover rate, and attain job satisfaction from the employees (Lee & Teo, 2005; McConville, 2006) The study of Bartlett (2001) highlights that the availability of training decides the level of employee performance through the enhancement of job satisfaction and reduction of turnover intention Rowden and Conine (2003) identifies that when the employees perceive that the companies are good in term of learning place, they will contribute more efforts to assigned tasks and therefore higher working performance Blum and Kaplan (2000) provide a survey with professional employees and they obtain a result of which training plays significant role to employee performance Melymuka (2000) also carries out a survey with more than 500 employees in IT industry and this researcher obtains the same result

From this discussion, H4 is proposed:

H4: Training has a positive effect on employee performance at JVCs

2.2.5 The effect of motivation on employee performance

Motivation is considered as explanatory variable of employee performance The study of Grant (2008) shows that motivation is the input of performance consequences, including productivity, performance, and persistence Moreover, the influence of motivation to employee performance shows through the fact that high motivated employees often have high organizational commitment and job commitments and therefore the quality of job is better than less motivated employees (Guay et al., 2000; Vansteenkiste et al., 2007) Empirical evidence shows that employee performance is influenced by employee satisfaction at work and this factor, in turn, is influenced by employee motivation level (Shazadi et al., 2014) For example, Sirota et al (2005) conduct a survey with 135,000 respondents across some countries and they identify that when the companies conduct motivation programs, they will be benefited by three rewards, including camaraderie, equity, and performance This study also points out high motivated employees have higher output quality than less motivated employees (Sirota et al., 2005) The study of Asim (2013) also reveals that when the employees are more motivated, their performance will increase

From this discussion, H5 is proposed:

H5: Motivation has a positive effect on employee performance at JVCs

2.3 Summary

In this chapter, two theories are put into examination including Mcgregor Theory X and Theory Y and Herzberg, Mausner and Snyderman's two factor theory These two theories highlight about the importance of intrinsic motivators and hygiene factors to employee satisfaction and employee dissatisfaction Based on these two theories, a research model is introduced consisting of five factors which are proposed to have a positive effect on employee performance, including leadership, organization culture, working environment, training, and motivation Then the five research hypotheses are proposed in this chapter

CHAPTER 3 RESEARCH METHODOLOGY

In this chapter, research methodology will be discussed with the focus on research design, choice of measures, sample techniques, and data collection methods In addition, this chapter also highlights how collected data to be controlled in term of its quality This chapter also presents which data analysis method that will be utilised in this study

3.1 Research design

As cited by Remeny et al (1998), an academic study is conducted and designed either through deductive design or inductive design Deductive design is considered as a process of applying existing theories and concepts and test them within specific situation while inductive design is a process to seek for new theories and concepts towards target social phenomenon (Bryman and Bell, 2007) In this study, deductive design is chosen due to following reasons:

First, the choice of research design is based on the research’s topic (Creswell, 1994) If the research’s topic is common, deductive design should be chosen and if the researcher’s topic is rare or is not available before, inductive design should be chosen (Saunders et al., 2009) This study aims to investigate and to measure the influences of certain factors to employee performance and it is common topic

Second, deductive design gives an ease to the researchers to organize and to interpret the research’s results (Saunders et al., 2009) To reduce the time to conduct this study and the effort to collect data, deductive design is chosen

Given to the choice of deductive research design, this study is conducted with the first step of examining theories related to the researched topic At first, Herzberg, Mausner and Snyderman's two factor theory is examined and then, the previous studies are collected to recognize which factors impacting on the level of employee performance Throughout previous studies, there are several variables to be selected, including leadership, organization culture, working environment, training, and motivation These factors are put into hypothesis validation framework and proposed hypotheses will be validated through primary data It is notable that primary data is collected from survey instrument with self-administered and closed questionnaire Then, the answers from the respondents are collected and data analysis will be conducted to

further understand about the underlying facts The outcome of data analysis process is

to confirm or to reject proposed hypotheses and it is the basis for revision of theory

3.2 Research model

Based on the literature review, such as Mcgregor Theory X and Theory Y and Herzberg’s two factor theory, this research proposes the research model indicated in Figure 5, including the five factors that have impact on employee performance These factors are leadership, organization culture, working environment, training and motivation

Figure 3: Research model

3.3 Research hypotheses

 H1: Leadership has a positive effect on employee performance at JVCs

 H2: Organization culture has a positive effect on employee performance at JVCs

 H3: Working environment has a positive effect on employee performance at JVCs

 H4: Working motivation has a positive effect on employee performance at JVCs

 H5: Working training has a positive effect on employee performance at JVCs

3.4 Choice of measures

In this study, survey of questionnaire is utilised as main primary data collection instrument The survey is designed with two sections The first section is designed to collect demographic characteristics from the respondents It includes gender, age, education, and monthly income Each demographic information is characterised by several groups Gender includes male and female Age includes less than 20 years old, 21-25 years old, 26-30 years old, 31-35 years old, 36-40 years old, and more than 40

H4 H5

years old Education includes University, Community College, and High School Monthly income includes less than 10VNDm, 10-15VNDm, 15-20VNDm, and more than 20VNDm

The second section is designed to collect the respondents’ agree or disagree towards given survey’s items To do that, a Liker scale of 5 points is applied with 1 as strongly disagree, 2 as disagree, 3 as neutral, 4 as agree, and 5 as strongly agree The survey’s item is designed with the items are taken from previous studies The content of each survey’s item is presented in the table below:

Table 3: Survey’s Items

Code Survey’s Items 1 2 3 4 5 Source

I feel significant actions have

been taken because of

previous grievance by the

identified in employee value

OCU Organization culture

Noordin et al (2010)

OCU1 This organization has a good

working environment

OCU2 I feel valued as an employee

OCU3 Morale is high across the

organization

OCU4

Employees have a good

balance between work and

personal life

WEN Working environment

Mohapatra & Srivastava (2003)

WEN1

You are satisfied with the

working space at the

office/working place

(discussion room, operation

and hall)

WEN2

You are satisfied with the

facilities and equipment

provides by organization

WNE3

The company provides the

right equipment to do a job

There is lot of chance to

learn new things in this

Company

TRA3

My company frequently

arranges training programs

for the employees

TRA4 Doing job in this company

will benefit to me

MOV Motivation

Shazadi et al (2014) MOV1

I feel a sense of personal

satisfaction when I do

this job well

MOV2

My opinion of myself goes

down when I do the

job badly

MOV3 I take pride in doing my job

as well as I can

MOV4

I feel unhappy when my

work is not up to my usual

standard

EPE Employee performance

Shazadi et al (2014)

EPE1

My performance is better

than that of my colleagues

with similar qualifications

than that of bankers with

similar qualifications in other

companies

3.5 Sample techniques

Since survey of questionnaire is chosen as data collection instrument for primary data, sampling technique plays critical role in order to ensure collected data is worth for using and directly support research objectives (Saunders et al., 2009) There are two major sampling techniques: probability sampling and non-probability sampling (Saunders et al., 2009) Probability sampling is applied in this study with random sample selection technique According to Cohen et al (2007), random sampling technique gives equal selection to the entity within the population Random sampling is good in this study due to the study aims to collect the evaluation from different demographic characteristics of the employees at JVCs

In order to ensure the quality of data analysis, primary data should be collected from appropriate sample size Suitable sample size is recommended by different scholars before For example, Hair et al (1998) assert that minimum sample size should

be from 100 to 150 Norusis (2005) recommends minimum sample size from 300 Hoang and Chu (2008) provides the rule of sample size is equal to 5 times bigger than number of variables used in survey of questionnaire Considering previous scholars’

recommendations about sample size, the study is conducted with sample size of 150 employees who have been working for JVCs in Vietnam

3.6 Data collection methods

There are two types of data that will be collected in this study, namely secondary and primary data Secondary data is the information that is not collected by the researcher but it is available in previous studies or reports (Saunders et al., 2009) Secondary data is often collected from two sources: internal and external sources In this study, secondary data is collected from external sources that includes books and journals about human resource management as well as empirical literatures about the impacts of certain factors to employee performance These books and journals are collected either from the school’s library or from the Internet

Primary data is the information that is not available before or it is collected for the first time by the researcher (Saunders et al., 2009) The advantage of primary data is that it directly supports the study’s objectives and this data is often collected from interview-based or survey of questionnaire method In this study, primary data is collected from survey of questionnaire with relevant employees who have been working for JVCs in Vietnam

3.7 Data quality control

To control data quality from survey of questionnaire, a pilot phase of the survey

is established The author prepares a survey of questionnaire and sends it to 10 employees who have been working for JVCs It is notable that these employees are random selected and they are not friends or relatives with the researcher The objective

of giving the survey of questionnaire to 10 employees is to ensure that the content of the survey is both clear and candid The result from pilot phase shows that all survey’s statements are clear and candid to 10 employees Therefore, it does not require to revise the survey’s items and the survey of questionnaire is ready to go to official survey process

3.8 Data analysis method

In this study, there are several data analysis methods that will be utilised in order

to get in-depth understanding about factors affecting on employee performance at JVCs

It includes descriptive statistics, reliability test analysis, explanatory factor analysis – EFA, and multiple linear regression

Descriptive statistics consist of two subsets The first subset is frequency analysis with the count on how many respondents regarding to each demographical characteristic The second subset is mean value calculation According to Sekeran (2006), if mean value is less than 2.5, the respondents disagree with the survey’s statement, if mean value is between 2.5 and 3.5, the respondents disagree or agree with the survey’s statement, and if mean value is higher than 3.5, the respondents agree with survey’s statement

Reliability test analysis is the most data analysis tool to measure reliability of dimensions of survey scale The reliability level is measured through Cronbach’s alpha and good dimension has Cronbach’s alpha value higher than 0.6 (Nunnally, 1978) In addition, this test also requires Corrected Item-Total Correlation value higher than 0.3 (Slater, 1995) Moreover, Cronbach’s alpha if Item Deleted value of each variable needs

to be lower than Cronbach’s alpha in overall (Peterson, 1994)

Explanatory factor analysis (EFA) is used when the researchers want to reduce the number of variables by grouping them into several groups or components (Hair et al., 1998) In order to determine EFA is good for using, KMO and Barlett’s Test are established and validated According to Vaus (2002), EFA is good for using when KMO value is higher than 0.5 and Bartlett’s Test is statistical significant at 5% Moreover, EFA also requires the calculation of factor loadings for new component and required value is higher than 0.5 (Hinton, 2004) Finally, cumulative eigenvalues are higher than 50% (Dewberry, 2004)

The last data analysis technique is multiple linear regression Like previous data analysis techniques, multiple linear regression also requires some specific measurements The first requirement refers to calculation of R-Square and the higher value means the higher explanation from explanatory variables to dependent ones (Hinton, 2004) This data analysis technique also comes up with T-Test for unstandardized and standardized coefficients and T-Test needs to be statistical significant to confirm the hypothesis (Dewberry, 2004)

3.9 Summary

This chapter aims to identify the suitable research methodology regarding research objectives Through some arguments and clarification, quantitative research method is chosen in this study The values of impacts from chosen factors to employee

performance will be clarified through survey of questionnaire with 150 employees at JVCs and the impacts are measured through some data analysis techniques

CHAPTER 4 DATA ANALYSIS AND RESULTS

In this chapter, data analysis and results will be presented There are several data analysis techniques that will be used in this study, including descriptive statistics, reliability test, EFA, and linear regression

4.1 Pilot testing

As mentioned in previous chapter, pilot testing is conducted with the involvement of 10 employees who have been working for JVCs These employees are selected randomly and they are not related or closed to the researcher On the other hand, 10 employees are selected randomly and they are not friend or business partners

of the researcher The results show that 10 employees agree about the content of survey

of questionnaire in term of its cleanliness and candidness for understanding

4.2 Descriptive statistics

There are two types of descriptive statistics: one is frequency analysis and other

is mean value analysis Frequency analysis is conducted for demographic variables and mean value is calculated for each variable used in conceptual research model It is notable that there are 150 employees who have been working for JVCs and involved into the survey process

First, frequency analysis is conducted for demographic variables, including gender, age, education level, and monthly income (as showed below in Table 4)

As showed in Table 4, there are 95 male respondents and 55 female respondents

to be involved into the survey of questionnaire The percentage of male and female are 63.3% and 36.7% respectively It means that the number of male respondents is outnumbered the number of female respondents

In term of age, this demographic information is divided into five groups: less than 25 years old, 26-30 years old 31-35 years old, 36-40 years old, and more than 40 years old The numbers of respondents in these age groups are 46, 53, 38, 6, and 7 people The percentages of these age groups are 30.7%, 35.3%, 25.3%, 4.0%, and 4.7%

It means that the respondents involved into survey of questionnaire are not too old as more than 90% of them having age less than 35 years old

In term of education, there are three groups: university graduate, community college graduate, and high school graduate The numbers of respondents who achieve these education backgrounds are 75, 72, and 3 The percentages of these groups are

50.0%, 48.0%, and 2.0% It means that JVCs have quality of staffs, showing through the fact that only 3 respondents have high school education

Table 4: Demographic description

10-The next step in descriptive statistics is to calculate the mean value with result is obtained and presented in the table 5 below:

Table 5: Mean value

Variables N Minimum Maximum Mean Std Deviation

In term of leadership, LEA1, LEA2, LEA3, and LEA4 have mean values of 3.23, 3.39, 2.08, and 2.07 LEA3 and LEA4 have mean values less than 2.5 while LEA1 and LEA3 have mean values in between 2.5 and 3.5 It concludes that the respondents

do not agree with the contexts of they do not feel significant actions have been taken as

a result of previous grievance by the manager and they do not believe my company's leadership acts on the issues/opportunities identified in employee value

In term of working environment, WEN1, WEN2, WEN3, and WEN4 have mean values of 3.35, 3.37, 3.61, and 3.99 It means the respondents have neutral attitude towards the statements of their satisfaction with the working space at the office/working place (discussion room, operation and hall) and with the facilities and equipment provides by organization The respondents also have high agree on the statements of the company provides the right equipment to do a job done well and the noise level at workplace is tolerated

In term of training, TRA1, TRA2, TRA3, and TRA4 have mean values of 3.31, 3.33, 3.19, and 3.20 and they are all less than 3.5 and higher than 2.5 It means the respondents have neutral attitude towards all current performance of training activities

at JVCs

In term of organization culture, OCU1, OCU2, OCU3, and OCU4 have mean values of 3.33, 3.57, 3.49, and 3.54 OCU2 and OCU4 have mean values of 3.57 and 3.54 and they are all higher than 3.5 It means that the respondents have high agree on the contexts of there is lot of chance to learn new things in this company and doing job

in this company is benefit to them OCU1 and OCU3 have mean values of 3.33 and 3.49 and they are less than 3.5 and higher than 2.5

In term of motivation, MOV1, MOV2, MOV3, and MOV4 have mean values of 3.38, 3.39, 3.51, and 3.53 Two last variables have mean values higher than 3.5, meaning that the respondents have high agree on the context of they take pride in doing

my job as well as they can and they feel unhappy when their work is not up to their usual standard

4.3 Assessment and Refinement of measurement scales

4.3.1 Refinement of measurement scale

Refinement of measurement scale is conducted with the application of reliability test Reliability test comes up with three requirements: (1) Overall Cronbach’s alpha value is higher than 0.6, (2) Corrected Item-Total Correlation value is higher than 0.3, and (3) Cronbach’s alpha if Item Deleted value is lower than overall Cronbach’s alpha

It is notable that reliability test is conducted for each factor used in conceptual research

model, including employee performance, leadership, organization culture, working environment, training, and motivation

Table 6: Reliability test result

Code Overall Cronbach’s alpha Corrected

Item-Total Correlation

Cronbach’s alpha if Item Deleted