Improving employee motivation at the card services business department of vietcombank’s ngo quyen transaction centre

Lunghwa University of Science and Technology Department of Business Administration Thesis for a Master’s Degree Improving employee motivation at the Card Services Business Department of

Lunghwa University of Science and Technology Department of Business Administration

Thesis for a Master’s Degree

Improving employee motivation at the Card Services Business Department of

Vietcombank’s Ngo Quyen Transaction Centre

Researcher: Nguyen Le Duc

Supervisor 1: PhD Ngo Vi Dung Supervisor 2: Assoc Prof Fan, Kai - Tang

November 2018

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 improving employee motivation at the card services business department of Vietcombank’s Ngo Quyen transaction center published by Mr.Nguyen Le Duc in the Master Program of Graduate School of Department of Business Administration

Master’s Degree Examination Board

Board Member: TSAN,Chiachi

Mai Anh Doan Thu Trang Advisors: PhD Ngo Vi Dung

Assoc Prof Fan, Kai - Tang Chair: TSAN,Chiachi

：

Date： 2018/11/25

ABSTRACT

Thesis Title：Improving employee motivation at the card services business department

of Vietcombank’s Ngo Quyen transaction center

Pages：61

University：Lunghwa University of Science and Technology

Graduate School：Department of Business Administration

Date：June, 2018 Degree：Master

Researcher：Nguyen Le Duc Advisor：PhD Ngo Vi Dung

Assoc Prof Fan, Kai - Tang

Keywords: employee motivation

Based on actual requirement, theoretical basis, documents, preceding studies on the issue about human resource management in general and employee motivation in particular, I have chosen topic for my thesis: “Improving employee motivation at the card services business department of Vietcombank’s Ngo Quyen transaction center” In this thesis, I use secondary data sources from the documents, reports, policies of the bank and primary data sources from in-depth interviews with employees and managers

of the Card Services Business Department to know about their mutual understanding, the assess how the employees are motivated or not motivated in the workplace

Research methods: In the thesis, the author uses quantitative research methods Direct interview are designed to gather information from employees and managers Accordingly, the thesis provides a view from the managerial aspects to technical aspects

on motivation of employees at the Card Services Business Department in the period 2014-2017 The author also points out the advantages, drawbacks at the Department affecting the employees and causes of these problems

The thesis concludes with the recommendations to improve employee motivation

at the Center These recommendations are really necessary for the Card Services Business Department if they want to possess a strong pool of employees The recommendations are also practical and applicable to the situation of the company

Therefore I believe that my research will not only help the Center to realize its current situation but work out some good solutions for its better performance as well

ACKNOWLEDGEMENT

Firstly, I would like to express my gratitude to the International School, Vietnam National University Hanoi and Lunghwa University of Science and Technology with all members, lecturers and staff for their great guidance, constructive contributions and valuable advice during my study

Secondly, I would also want to express my sincere appreciation to my supervisors, PhD Ngo Vi Dung and Assoc Prof Fan, Kai - Tang for their patience, motivation, and immense knowledge Their guidance is invaluable for me to complete this MBA thesis

Besides my supervisors, I would like to thank to the help of many people working at the card services business department of Vietcombank’s Ngo Quyen transaction center, especially the people who are fully occupied in business but still be willing to provide me with a lot of useful information

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

Hanoi, November 2018

Nguyen Le Duc

TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENT ii

TABLE OF CONTENTS iii

ABBREVIATIONS viii

LIST OF FIGURES vi

LIST OF TABLES vii

1 INTRODUCTION 1

1.1 Rationale 1

1.2 Objectives 2

1.3 Main research questions 2

1.4 Methodology 2

1.4.1 Research process 2

1.4.2 Data collection 3

1.4.3 Data analysis 4

1.5 Research scope 4

1.6 Structure of research 4

2 LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK 5

2.1 Overview of employee motivation 5

2.1.1 Definition 5

2.1.2 Significance of employee motivation 8

2.2 Conceptual framework on analysis of employee motivation 10

2.2.1 Overview of theory 11

2.2.2 Critics of Herzberg’s two factor theory 15

2.2.3 Research related critics of Two Factor theory 16

2.2.4 Conceptual framework 17

3 THE CURRENT SITUATION OF EMPLOYEE MOTIVATION AT THE CARD SERVICES BUSINESS DEPARTMENT OF VIETCOMBANK’S NGO QUYEN TRANSACTION CENTRE 18

3.1 Overview of Vietcombank 18

3.1.1 History of Vietcombank 18

3.1.2 Business strategy 19

3.1.3 Organizational structure 21

3.1.4 Business operation outcomes 22

3.1.5 Business orientation for the year 2018 23

3.1.6 Introduction of Ngo Quyen Transaction Centre 24

3.2 Dimensions and attributes to analyze employee motivation at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre 25

3.3 Respondents’ profile 28

3.3.1 Respondents’ profile by years of experience 28

3.3.2 Respondents’ profile by age 29

3.3.3 Respondents’ profile by gender 29

3.3.4 Respondents’ profile by qualification 30

3.4 Analyzing employee motivation at the Card Services Business Department – Vietcombank’s Ngo Quyen Transaction Centre 30

3.4.1 Bank’s policies and administration 30

3.4.2 Quality of supervision 33

3.4.3 Working conditions 35

3.4.4 Salary 36

3.4.5 Interpersonal relations 38

3.4.6 Achievement 40

3.4.7 The work itself 42

3.4.8 Advancement 43

3.4.9 Growth 45

3.4.10 Overall employees’ motivation 46

3.5 Summary of findings 47

4 R E C O M M E N D A T I O N S F O R T H E C A R D S E R V I C E S B U S IN E S S D E PA R T M E N T O F V I E T C O M B A N K ’ S N G O Q U Y E N T R A N S A C T I O N C E N T R E T O I M P R O V E E M P L O Y E E M O T I V A T I O N 49

4.1 Vietcombank’s vision for Human Resources Management 49

4.2 Recommendations for improving employee motivation at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction centre 50

4.2.1 Improving Bank’s policies and administration 50

4.2.2 Improving Supervision skill 51

4.2.3 Improving Working conditions 52

4.2.4 Improving Salary 52

4.2.5 Improving Interpersonal relations with co-workers 53

4.2.6 Improving Achievement 54

4.2.7 Improving The work itself 56

4.2.8 Improving Advancement 57

4.2.9 Improving Growth 59

5 CONCLUSION 61

LIST OF REFERENCES 62

APPENDIX 1 67

EMPLOYEE MOTIVATION QUESTIONNAIRE 67

APPENDIX 2 72

PRIMARY DATA COLLECTED 72

LIST OF FIGURES

Figure 1 Respondents’ profile by years of experience 28

Figure 2 Respondents’ profile by gender 29

Figure 3 Respondents’ profile by qualification 30

Figure 4 Employees’ evaluation towards Bank’s policies and administration 31

Figure 5 Employees’ evaluation towards Quality of supervision 34

Figure 6 Employees’ evaluation towards Working conditions 35

Figure 7 Employees’ evaluation towards Salary 37

Figure 8 Employees’ evaluation towards Achievement 41

Figure 9 Employees’ evaluation towards The work itself 43

Figure 10 Employees’ evaluation towards Advancement 44

Figure 11 Employees’ evaluation towards Growth 45

Figure 12 Employees’ evaluation towards Overall employees’ motivation 46

LIST OF TABLES

Table 1 Data collecting method for in-depth interview 3

Table 2 Data collecting method for survey 3

Table 3.Herzberg’s Two-factor Theory 12

Table 4 Organizational structure of Vietcombank 21

Table 5 Measurement variables to analyze employee motivation at the Card Services Business Department of VCB’s Ngo Quyen Transaction Centre 25

Table 6 Respondents’ profile by age 29

Table 7.Vietcombank’s visit regimes and policies 32

Table 8 Employees’ evaluation towards Interpersonal relations 38

ABBREVIATIONS

AGM Annual General Meeting

ATM Automated Teller Machine

BIDV

Joint Stock Commercial Bank for Investment and Development of Vietnam

Bil Billion

BOD Board of Directors

BoM Board of Managers

CAR Capital Adequacy Ratio

CSB Card services Business

EMBA English Master for Business Administration

HR Human Resources

HRD Human Resources Department

IPO Initial Public Offering

JSC Joint Stock Commercial

MBA Master for Business Administration

NPL Non performing Loan

OECD Organization for Economic Co-operation and Development

ODA Official Development Assistance

PJICO Petrolimex Insurance Joint Stock Company

POS Point of Sales

SBV State Bank of Vietnam

VCB Joint Stock Commercial Bank for Foreign Trade of Vietnam

Vietcombank Joint Stock Commercial Bank for Foreign Trade of Vietnam

Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade

VND Vietnam Dong

USD United States Dollar

1 INTRODUCTION 1.1 Rationale

An article from a popular entrepreneur magazine, Inc., defines employee motivation as, “the level of energy, commitment, and creativity that a company’s workers bring to their jobs” (“Employee motivation,” 2010) Whether the economy is growing or shrinking, finding ways to motivate employees is always a management concern Motivated employees can lead to increased productivity and allow an organization to achieve higher levels of output

Joint Stock Commercial Bank for Foreign Trade of Vietnam was founded on April

1, 1963 as Bank for Foreign trade of Vietnam It was span off from the Foreign Exchange Bureau of the State Bank of Vietnam to be an exclusive bank for foreign trade In 1990, Vietcombank diversified its services from being exclusively focused on foreign trade to become a mass market commercial bank The bank was then after listed

on the Ho Chi Minh Stock Exchange on June 30, 2009 after a successful IPO that raised US$652 million making it the biggest Vietnamese firm to conduct an initial public offering After more than a half-century operating in the market, Vietcombank currently has more than 15,000 employees, more than 500 branches/ transaction offices/ representative office/ affiliates both in Vietnam and abroad With the aim at expanding the bank’s larger scope, it is necessary for the Board of Managers (BoM) to develop an employee motivation system with effective reward policy, flexible workplace, high

employee loyalty and also growth opportunities

However, there are some existing issues relating to employee motivation at the any branches of the bank Firstly, the employee’s working performance/productivity and efficiency were decreased since the number of banking works significantly increased Secondly, the number of employees quitting jobs was increased over last few years These situations can be also seen at the Card Services Business Department of Ngo Quyen Transaction Centre, which has posed a challenge for managers to build up a strategy so that employees can work better at a much faster rate and feel stable with their current positions at the workplace

Understanding the importance of employee encouragement in the bank, the

researcher goes into the study “Improving employee motivation at the Card Services

Business Department of Vietcombank’s Ngo Quyen Transaction Centre” By

analyzing the factors which have influence in employee’s low performance and motivation at the department, my thesis will make some recommendations and solutions for the department in particular and the bank in general to build up strategies to improve its employee motivation.”

1.2 Objectives

The main objectives of research include:

- To clarify dimensions and attributes to measure employee motivation;

- To analyze and assess the current employee motivation situation at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre;

- To propose solutions to improve employee motivation at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre

1.3 Main research questions

Based on the above objectives, the research answers three following questions:

- What are factors to measure employee motivation?

- How is the current employee motivation situation at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre?

- What are effective solutions for the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre to improve employee motivation?

1.4 Methodology

1.4.1 Research process

My thesis uses three methods

- Secondary data: Research papers, articles

- Reports of Vietcombank (Annual reports, other relevant reports)

2 Primary data

In-depth Interview: it was carried out with both employees and managers of the

Card Services Business Department to know about their mutual understanding, the assess how the employees are motivated or not motivated in the workplace

Table 1 Data collecting method for in-depth interview

Methodology Respondent” Key information need

Current situation of employee’s motivation

Face-to-face interview”

Source: Researcher The survey was conducted to employees working for the bank

Table 2 Data collecting method for survey

Methodology Sample size” Key information need

to be collected”

Methods to conduct survey”

“Survey

(Questionnaires)”

76 employees at the CSB Department of Ngo Quyen Transaction

Current situation of employee motivation at

Transaction Centre

Directly handing out questionnaires to all 76 respondents

There were 72 valid answer sheets, reaching

Location: The research was conducted at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre, No 31-33, Ngo Quyen Street, Hoan Kiem District, Hanoi.”

Timing:”

- Secondary data: collected from the bank’s reports and relevant documents over the period of 2014-now Timing of data collected by the researcher: Octorber to December 2017;”

- Primary data: collected from Octorber to December 2017

1.6 Structure of research

Chapter 1: Introdution

Chapter 2: Literature review and conceptual framework

Chapter 3: Current situation of employee motivation at the Card Services Business

Department of Vietcombank’s Ngo Quyen Transaction Centre”

Chapter 4: Recommendations for the Card Services Business Department of

Vietcombank’s Ngo Quyen Transaction Centre to improve employee motivation”

Chapter 5: Conclusion

2 LITERATURE REVIEW AND CONCEPTUAL

Golembiewski (1973,p 597) refers to motivation as the degree of readiness of an organization to pursue some designated goal and implies the determination of the nature and locus

of the forces inducing the degree of readiness

To Kelly (1974, p 279), motivation has to do with the forces that maintained alter the direction, quality and intensity of behavior According to Hoy and Miskel (1987, p.176), employee motivation is the complex forces, drives, needs, tension states, or other mechanisms that start and maintain voluntary activity directed towards the achievement of personal goals

According to Butkus & Green (1999), motivation is derived from the word

“motivate”, means to move push or persuade to act for satisfying a need Baron (1983), defined motivation in his own right he says that “motivation is a set of process concerned with a kid of force that energizes behaviour and directs it towards achieving some specific goals”

Many writers have expressed motivation has a goal directed behaviour This objective nature of motivation is also suggested by Kreitner and Kinicki (2001 p.162) put forward that motivation represents “those psychological processes that cause the stimulation, persistence of voluntary actions that are goal directed” In another term, a motivated person has the awareness of specific goals that must be achieved in specific ways; therefore he/she directs its effort to achieve such goals (Nel et al., 2001) Mullins (2006), indicates that, the study of motivation is concerned, basically, with why people

behave in a certain way The basic underlying question is “why do people do what they do?” In general terms, motivation can be described as the direction and persistence of action It is concerned with why people choose a particular course of action in preference to others, and why they continue with a chosen action, often over a long period, and in the face of difficulties and problems Motivation is one of the key ingredients in employee performance and productivity Even when people have clear work objectives, the right skills, and a supportive work environment, they would not get the job done without sufficient motivation to achieve those work objectives (Mullins, 2006) Motivation refers to the forces within a person that affect his or her direction, intensity and persistence of voluntary behaviour He added that motivated employees are willing to exert a particular level of effort (intensity), for a certain amount of time (persistence), toward a particular goal or direction (Mullins, 2006)

Ifinedo (2003) demonstrates that a motivated worker is easy to spot by his or her agility, dedication, enthusiasm, focus, zeal, and general performance and contribution to organizational objectives and goals All organizations are concerned with what should

be done to achieve sustained high levels of performance through people This means giving close attention to how individuals can best be motivated through such means as incentives, rewards, leadership and, importantly, the work they do and the organization’s context within which they carry out that work The aim is to develop motivation processes and a work environment that will help to ensure that individuals deliver results in accordance with the expectations of management.”

Denhardt et al (2008) also define motivation as an internal state that causes people to behave

in a particular way to accomplish particular goals and purpose It is not possible to observe motivation itself, it’s possible to observe the outward manifestations of motivation

Denhardt et al (2008) further stated that motivation is not the same as satisfaction Satisfaction is past oriented, whereas motivation is 12 future oriented Igalens & Roussel (1999)

on their part also stated that workers may be very satisfied by the compensation of their job; there are countless instances where these workers are not entirely motivated to continue doing what they would do Motivation is central to management because it explains why people behave the way they do in organizations Motivation may also be defined as the internal process leading to behaviour to satisfy needs The process people go through to satisfy their needs is need - motive - behaviour - satisfaction or dissatisfaction (Lussier, 2005)

Definition of motivation according to Society for Human Resource Management (2010), motivation is generally defined as the psychological forces that determine the direction of a person’s level of effort, as well as a person’s persistence in the face of obstacles

Rajput (2011) defined motivation as “the individual’s desire to demonstrate the behavior and reflects willingness to expend effort” Motivation can be divided into extrinsic and intrinsic motivation “Extrinsic motivation is related to tangible rewards such as salary and fringe benefits, security, promotion, contract of service, the work environment and conditions of service These are what need to be done to or for people to motivate them They are often determined at the organisational level and may be largely outside the control of the individual managers Extrinsic motivators can have an immediate and powerful effect but will not necessarily last long (Mullins, 2005; Armstrong, 2006) Intrinsic motivation is related to psychological rewards such as the opportunity to use one’s ability A sense of challenge and achievement, receiving appreciation, positive recognition, and being treated in a caring and considerate manner Psychological rewards are those that can usually be determined by the actions and behaviour of the individual managers (Mullins, 2005) Intrinsic motivators are concerned with the quality of work life, are likely to have

a deeper and longer-term effect because they are inherent in individuals and not imposed from outside (Armstrong, 2006)

Motivation is the process of steering a person’s inner drives and actions towards certain goals and committing his energies to achieve these goals It involves a chain reaction starting with felt needs, resulting in motives which give rise to tension which census action towards goals It is the process of stimulating people to strive willingly towards the achievement of organizational goals Motivation is an integral part of management process

There are many definitions of employee motivation; here are 3 definitions from Rick Pitino, Twyla Dell and Burrel Lee wiks

Rick Pitinostated that the only way to get people to like working hard is to motivate them Today, people must understand why they’re working hard Every individual in an organization is motivated by something different

According to Twyla Dell, the heart of motivation is to give people what they really want most from work The more you are able to provide what they want, the more you should expect what you really want, namely: productivity, quality, and service

And Burrel Lee Wilks defined employee motivation as a reflection of the level of energy, commitment, and creativity that a company’s workers bring to their jobs

Employee motivation is thus the combination of fulfilling the employee’s needs and expectations from work, and the workplace factors that enable employee motivation –

or not It is considered as a force that drives the employees toward attaining specific goals and objectives of the organization

2.1.2 Significance of employee motivation

There are several reasons why employee motivation is important Mainly because it allows management to meet the company’s goals Without a motivated workplace, companies could be placed in a very risky position

According to Jonathan, Christine and Yvonne (2002), “motivated people and their commitment are vital to the productivity of the work as they will perform with their full potential and with high quality and Michael and Crispen (2009) stated that having a motivated workforce provides the competitive advantage that the organization seeks and better employee performance helps the organization achieve higher productivity.” Jonathan, Christine and Yvonne (2002), identified that “greater motivation will have a direct effect in improving productivity through greater effort and possibly innovation They also stated that motivation leads to a productive with high performance employee who does the best at work, saves time and effort and also volunteers to do more than what is required Such employee will be a great resource to the business and a great model to be followed by others.”

“If employees are motivated and happy they will do to the work to the best of their ability instead of just doing it because they have to” (Ryan, & Deci, 2000).”

Kimberly Schaufenbuel, program director at UNC Executive Development, says that 'by understanding the reasoning behind employees’ actions, and using those results

to motivate them, you can improve business performance.' When employees become unmotivated, they become disengaged from their work and the company Employee engagement is incredibly important, as only highly engaged employees are invested in moving the company forward and producing their very best work By contrast, actively disengaged workers can not only damage company results but the quality of the product and negatively affect the company culture as a whole

In “The Best of Gallup Management Journal 2001-2007”, Jerry Krueger and Emily Killham describe three types of employees:

Engaged employees work with passion, and they feel a profound connection to their company They drive innovation and move the organization forward

Not-Engaged employees are essentially “checked out.” They’re sleepwalking through their workday, putting time – but not energy or passion – into their work Actively disengaged employees aren’t just unhappy at work; they’re busy acting out their unhappiness Every day, these workers undermine what their engaged coworkers accomplish

As can be expected, actively disengaged employees do the most damage These employees are emotionally disconnected from their companies and may actually be working against their employers' interests; they are less productive, are more likely to steal from their companies, negatively influence their coworkers, miss workdays and drive customers away Whereas, motivated employees can lead to increased productivity and allow an organization to achieve higher levels of output

Employee motivation is highly important for every company due to the benefits that it brings to the company Benefits include:

Increased employee commitment: When employees are motivated to work, they will generally put their best effort in the tasks that are assigned to them

Improved employee satisfaction: Employee satisfaction is important for every company because this can lead towards a positive growth for the company

Ongoing employee development: Motivation can facilitate a worker reaching his/her personal goals, and can facilitate the self-development of an individual Once that worker meets some initial goals, they realize the clear link between effort and results, which will further motivate them to continue at a high level

Improved employee efficiency: An employee’s efficiency level is not only based on their abilities or qualifications For the company to get the very best results, an employee needs to have a good balance between the ability to perform the task given and willingness to want to perform the task This balance can lead to an increase of productivity and an improvement in efficiency

Motivation is very important in an organization because it provides crucial link between employee job satisfaction and employee performance Level of motivation in employees will determine organization profit and success Therefore, employee motivation is the core of management Employee motivation is an effective instrument

in the hands of the management in inspiring the work force It is the major task of every

manager to motivate his subordinate or to create the will to work among the subordinates It should also be remembered that the worker may be immensely capable

of doing some work, nothing can be achieved if he is not willing to work Creation of a will to work is motivation in simple but true sense of term Employee motivation is an important function which very manager performs for actuating the people to work for accomplishment of objectives of the organization Issuance of well-conceived instructions and orders does not mean that they will be followed A manager has to make appropriate use of motivation to enthuse the employees to follow them Effective motivation succeeds not only in having an order accepted but also in gaining a determination to see that it is executed efficiently and effectively

In order to motivate workers to work for the organizational goals, the managers must determine the motives or needs of the workers and provide an environment in which appropriate incentives are available for their satisfaction If the management is successful in doing so; it will also be successful in increasing the willingness of the workers to work This will increase efficiency and effectiveness of the organization There will be better utilization of resources and workers’ abilities and capacities

2.2 Conceptual framework on analysis of employee motivation

There are different theories about what constitutes and creates workplace motivation in employees

Abraham Maslow proposes that motivation can be represented as a hierarchy of needs As lower-level needs are satisfied, workers are likely to be motivated by higher-level needs Maslow argues that there are five categories of needs: physiological, safety, love, esteem, and actualization

Alderfer’s ERG Theory suggests that there are three classes of needs, not five as Maslow suggests: existence, relatedness, and growth Another distinction is that Alderfer proposes that when low-level (existence) needs are not met, they grow For example, when you are hungry and do not eat, your hunger grows On the other hand, higher-level (relatedness and growth) needs grow when they are met For example, as you become more productive, your need to be productive may grow

The two-factor theory (also known as Herzberg's motivation-hygiene theory and dual-factor theory) states that there are certain factors in the workplace that

cause job satisfaction, while a separate set of factors cause dissatisfaction It was developed by psychologist Frederick Herzberg, who theorized that job satisfaction and job dissatisfaction act independently of each other In his Two-Factor Theory of motivation, he argues that there are two types of factors involved in motivation: extrinsic and intrinsic

The Two Factor Theory has had a considerable amount of practical and as well as theoretical influences In the scope of this thesis, the author wants to refer to the most popular theory – that is the Two Factor theory

2.2.1 Overview of theory

The Two-Factory Theory was proposed by American psychologist Frederick Herzberg.In 1959, Herzberg conducted a study with 200 engineers and accountants as the subjects They were asked to recollect their experiences and feelings (positive or negative) they had at work, and the reasons behind the way they felt Based on the subjective data from the respondents, Herzberg began to analyze their job attitudes From the study, he proposed a two-factor approach when attempting to understand motivation among employees Regarding the collection process:

“Briefly, we asked our respondents to describe periods in their lives when they were exceedingly happy and unhappy with their jobs Each respondent gave as many

"sequences of events" as he could that met certain criteria—including a marked change

in feeling, a beginning and an end, and contained some substantive description other than feelings and interpretations

The proposed hypothesis appears verified The factors on the right that led to satisfaction (achievement, intrinsic interest in the work, responsibility, and advancement) are mostly unipolar; that is, they contribute very little to job dissatisfaction Conversely, the dis-satisfiers (company policy and administrative practices, supervision, interpersonal relationships, working conditions, and salary)

contribute very little to job satisfaction.” - Herzberg, 1964

Table 3.Herzberg’s Two-factor Theory

From a theoretical perspective, Herzberg's motivation theory can be perceived as having similarities to Maslow's Theory of Need with the exception that for Herzberg's theory, the needs aren't placed in a progressive continuum, rather they are divided into two independent factors In fact, Herzberg would argue that the opposite of satisfaction

is not dissatisfaction since different stimuli are involved in generating each of those emotional states, reinforcing the fact that they are not on the same continuum

Remedying the causes of dissatisfaction will not create satisfaction Nor will adding the factors of job satisfaction eliminate job dissatisfaction If you have a hostile work environment, giving someone a promotion will not make him or her satisfied If you create a healthy work environment but do not provide members of your team with any

of the satisfaction factors, the work they're doing will still not be satisfying

According to Herzberg, the factors leading to job satisfaction are "separate and distinct from those that lead to job dissatisfaction." Therefore, if you set about eliminating dissatisfying job factors, you may create peace but not necessarily enhance performance This placates your workforce instead of actually motivating them to improve performance

The characteristics associated with job dissatisfaction are called hygiene factors When these have been adequately addressed, people will not be dissatisfied nor will they be satisfied If you want to motivate your team, you then have to focus on satisfaction factors like achievement, recognition and responsibility

 Motivation factors

Motivation factors are ones that directly motivate employees to work harder (motivators or satisfiers) These are linked to employee motivation and arise from intrinsic, or dependent, conditions of the job itself Factors for satisfaction include achievement, recognition, responsibility, work itself, personal growth and advancement

- Achievement: An achievement is something which someone has succeeded in

doing, especially after a lot of effort An employee gets achievement when he completes assigned work successfully or has a good idea, brings profit for his organization

- Recognition: The recognition is a process of giving an employee a certain status

within an organization This is a very crucial factor towards an employee motivation Recognition describes how the work of an employee is evaluated and how much the appreciation he receives in return from the organization It also specifies the way an organization gives its employee the reward and status for his work and activities

- Responsibility: A duty or obligation to satisfactorily perform or complete a task

(assigned by someone, or created by one's own promises or circumstances) that one must fulfill, which has a consequent penalty for failure

- The work itself: Work itself means the employees liking and disliking of his or

her job It explains whether the job of employee is enjoyable or not

- Personal growth: It includes not only the likelihood that the individual would

be able to move onward and upward within the organization but also a possible situation of growth to improve his own skills and profession Using personal growth as a motivator involved with managers working harder to change their employees think about their jobs, give them supports to make them to become more capable and make them feel that their jobs are meaningful in order to

make to come to work and feel happy with it

- Advancement: It is the promotion opportunity of an employee, either proactive

pursuit of a higher ranking or a reward by managers for good performance

 Hygiene factors

Hygiene factors are factors that do not give positive satisfaction or lead to higher motivation, and their absence will lead to dissatisfaction Herzberg used the term

“hygiene” in the sense that these are maintenance factors or dissatisfiers These factors are extrinsic to work

Hygiene factors are a type of expectation that impact a person's motivation They are a type of basic condition that don't increase motivation if they are met but may dramatically decrease motivation if they are not met

 Hygiene factors include

- Company policies and administration: Administrative policies for employees

help employees understand basic rules of the office They are typically presented during an employee's orientation period A company’s human resources department usually enforces the policies and provides employees with

an employee handbook explaining them Employees who break the rules can face penalties and sometimes even lose their jobs

- Quality of supervision: When a company has poor supervision, there is not

enough responsibility for taking action for the prevention of problems, mistakes, accidents, and injuries Poor supervision removes a very important part of the employee support process, eliminating the opportunity for reference, learning, and safety

- Working conditions: Working conditions are at the core of paid work and

employment relationships Generally speaking, working conditions cover a broad range of topics and issues, from working time (hours of work, rest periods, and work schedules) to remuneration, as well as the physical conditions and mental demands that exist in the workplace Poor working conditions can damage your health and put your safety at risk

- Salary: salary can also be viewed as the cost of acquiring and retaining human

resources for running operations Salary is a fixed amount of money or compensation paid to an employee by an employer in return for work performed.”

- Interpersonal relations: A close association between individuals who share

common interests and goals is called interpersonal relationship The relationships of employees with their peers and supervisors should be appropriate and acceptable There should be no conflict or humiliation.”

- Job security: It is an assurance that an individual will keep his or her job

without the risk of becoming unemployed He will have continuity in

employment and it may be from the terms of a contract of employment, collective bargaining agreement, or labor legislation that prevents arbitrary termination Job security may depend on economy, prevailing business conditions, and the individual's personal capacity

Basically the theory differentiates the factors between intrinsic motivators and extrinsic motivators The intrinsic motivators, known as the job content factors, define things that the people actually do in their work; their responsibility and achievements These factors are the ones that can contribute a great deal to the level of job satisfaction

an employee feels at work The job context factors, on the other hand, are the extrinsic factors that someone as an employee does not have much control over; they relate more

to the environment in which people work than to the nature of the work itself Therefore, the basic premise of the Two-Factor Theory is that if an employer or manager is trying to increase job satisfaction and ultimately job performance for an employee or coworker, they need to address those factors that effect one’s job satisfaction The most direct approach is to work on the intrinsic, job content factors

2.2.2 Critics of Herzberg ’s two factor theory

Herzberg’s theory is appreciated on the ground that it provides an insight into the task of motivation by drawing attention to the job factors which are often overlooked It shows the value of job enrichment in motivation Thus, Herzberg’s theory has solved the problems of managers who were wondering why their policies failed to motivate the employees adequately However, this theory has also not gone unchallenged It has been criticized on the following grounds:

- Not conclusive: Herzberg study was limited to the engineers and accountants

The critics say that this theory is not conclusive because the professionals or the white collar workers may like responsibility and challenging jobs But the general workers are motivated by pay and other benefits The effect of hygiene and motivational factors may totally be reverse on some other categories of people

- Methodology: Another criticism of this theory is directed at the method of

research and data collection The interviewers were asked to report

exceptionally good or exceptionally bad job experience This methodology is defective because such information will always be subjective and biased

- Job enrichment: This theory has given too much emphasis on job enrichment

and has totally ignored job satisfaction of the workers He didn’t attach much importance to pay, status or interpersonal relationships which are generally held

as great motivators Keeping in view all these points we can conclude that Herzberg’s theory has been widely read and there will be few people who are not familiar with these recommendations This theory provides valuable guidelines to the managers for structuring their jobs in order to include such factors in the jobs which bring satisfaction

2.2.3 Research related critics of Two Factor theory

Despite the fact that the Two Factor theory is a satisfactory and beneficial theoretical framework for this study, it is also important to look at it through critical lenses in order to identify possible implications for the research.”

Firstly, the Two Factor theory dates back to 1959, it naturally raises a legitimate question if the theory is outdated Is it still relevant and in today’s society and business settings?”

The society nowadays is different from ones in the past five decades the when the theory was introduced It was a manufacturing society, where the majority of the jobs available were related to the production of goods However, current society is characterized as a service society, where according to OECD (2005) more than 70% of the employment is in the service sector Therefore, the theory does not fully reflect current conditions Some motivational factors suggested by the Two Factor theory are supplemented by additional motivational factors that better reflect the characteristics of the current society and work conditions But the core idea of the Two Factor theory should maintain relevant in the modern society and current business settings The focus

of the thesis is to use the theory to identify suitable factors that motivate employees Secondly, the critical evaluation of the Two Factor theory relates to the background for conduction of the study Herzberg’s study focuses on the manufacturing industry (production and fabrication for metals) and the study conducted in the thesis focuses on

the service sector (banks) There are a number of distinctive features Not all of factors

mentioned in Two factors are relevant and reflect characteristics of the service industry

Finally, the critical assessment towards the Two Factor theory relates to the population The two-factor theory developed from data collected by Herzberg from interviews with 203 engineers and accountants in the Pittsburgh area, so that male is dominant and motivational factors suggested in the Two Factor theory are based on the male values The gender distribution among this research population is almost female, which means that different type of factors could be pointed

2.2.4 Conceptual framework

As mentioned above, motivation on the overall performance of employees is very important for many different reasons To identify factors that are important when evaluating the motivational levels of employees at the Card Services Business Department of Ngo Quyen Transaction Centre is one of objectives of the research Herzberg’s Two-factor Theory is used to analyze both motivators and hygiene factors so that the job must utilize the employees’ skills and competencies to the maximum In the thesis, the author only refers to some factors that can significantly influence on employee motivation at Card Services Business Department of Ngo Quyen Transaction Centre, as follows Bank’s policies and administration, Quality of Supervision, Working conditions, Salary, Interpersonal relations, Achievement, The work itself, Growth

3 THE CURRENT SITUATION OF EMPLOYEE MOTIVATION AT THE CARD SERVICES

BUSINESS DEPARTMENT OF VIETCOMBANK’S

NGO QUYEN TRANSACTION CENTRE

3.1 Overview of Vietcombank

3.1.1 History of Vietcombank

On May 6th 1951, President Ho Chi Minh signed Decree No.15/SL on the establishment of National Bank of Vietnam After restoration of peace in the North, the establishment of diplomatic and trade relations with other countries was put into consideration Therefore, Foreign Exchange Bureau under the National Bank of Vietnam was established according to Decree No.443/TTg dated January 20th 1955 of the Prime Minister to advise the Government on management of foreign currency, gold, silver, trade and non-trade pay in the world Then, on October 26th 1961, the Government issued Decree No.171/CP to rename The National Bank of Vietnam into The State Bank of Vietnam, including the Foreign Exchange Department, which replaced the former Foreign Exchange Bureau This was a step forward, paving the way for establishment of specialized banks and foreign banking operations later on To conform to international practices on foreign banking operations, on October 30th 1962, the Council of Ministers issued Decree No 115/CP on the establishment of Bank for Foreign Trade of Vietnam tasked with foreign exchange trading, international payments, international credit, and foreign trade loans The Bank was also tasked with participating in the management of foreign exchange; contributing to monetary and public property protection; enhancing and expanding of economic, political relations and cultural exchanges with foreign countries After a preparation period, on April 1st

1963, the Bank for Foreign Trade of Vietnam was officially put into operation and, since then, the brand of the Bank for Foreign Trade of Vietnam was officially born

It was the first State-owned bank chosen to go public in the Vietnamese stock market in 2008 Vietcombank is named as one of the four strongest commercial banks

in the banking industry together with Agribank, BIDV, and Vietinbank In many years, Vietcombank has been in the major rating lists of “Top 400 banks of the world” (Year 2013-2014) by The Banker magazine, “Top 500 most valuable banking brands of the world” by Brand Finance– a reputed asset valuation consultancy, “Top 100 most interesting companies in Asian region” by Nikkei Asian Review magazine, or “Best Bank in Vietnam 2015” by Euro money magazine These awards have acknowledged the position of Vietcombank in numerous operating functions and solidified the goal of sustainable development to be the leader of the market by 2020

From the date of establishment, Vietcombank has contributed enormously to the overall economic development nationally and regionally as the crucial bank of foreign trade Nonetheless, Vietcombank has not stayed in its comfort zone; the bank nowadays

is becoming more and more diversified in its products to provide a wide range of customer groups with selective services varying from traditional activities such as deposits and loans, international trading support, project granting service, etc… to modern banking activities such as foreign currency exchange, derivative instrument, bank card services, Internet banking and so on Moreover, by possessing and investing constantly into a highly advanced information technology, the bank has customized its products to be faster, safer and more effective to retain the existing clients and attract more potential customers As estimated statistically by Vietcombank, it has approximately 14000 employees, 400 different offices nationally, 2 subsidiary companies and 1 representative office abroad, around 2100 ATM machines all over Vietnam In addition, the bank is also supported by a network of other 1800 bank offices operating in 176 countries so that it gets more convenient for its customers wherever they are

3.1.2 Business strategy

Vietnamese economy has opened the door to the international business since 1995 which created enormous opportunities for the banking industry to enlarge the scope of commercial banks’ operation However, in parallel with that, it generated challenging obstacles that force the banks to continuously revolutionize themselves and adapt to the fierce market environment Vietcombank is not exceptional Over more than 50 years of

operating, Vietcombank has strived constantly for the sustainable growth and the

overall development of the Vietnamese economy

The business objective of Vietcombank aimed to achieve in the next few years is

“to fully transform into a multi-functional bank on the base of international banking practices, maintain the key player in Vietnamese market, and become one of top 70 financial institutions in Asia by 2020” (Vietcombank annual report of 2014) To make the objective come to fruition, the business strategy should always be followed as the guideline in every move made by the Board of Director to “Bring the success to customers, Ensure the future for customers, Convenience in every transaction and commercial activity in the market”

Vietcombank has been trying to build a different brand identity and aiming to become the leading bank in Vietnam in 2030 for years Thereby, Vietcombank issues a statement about five basic core values such as reliability, standards, innovation, stability, and empathy These claims are very good, but they are discrete, lengthy, and forgettable, and thus, it is difficult to convey all the meanings to the employees and customers In the beginning of 2013, Vietcombank announced a new brand identity recognition system with complete changes in signs, logo, slogan, furniture of the offices, employees’ uniforms, and print publications In a period of 25 years, Vietcombank has had a total of three times changing the brand identity In 2010, the bank published a handbook about its culture including some factors, such as vision, mission, and standards of behaviors, with the purpose of building its corporate culture and brand identity, which is Vietcombank brand culture The values that Vietcombank

is aiming are:

- Mission: the leading bank for Vietnam’s prosperity

- Vision: to become a diversified financial group on par with other powerful financial corporations in the region by 2030

- The image of the bank: green and prosperous, reliable and modern, friendly and sharing Vietcombank

Vietcombank’s team of professional employees with excellent ability in banking and finance have a good sense for modern and integrated business environment, etc Thanks to their contribution, Vietcombank remains the primary choice for large corporations, domestic and foreign enterprises as well as millions individual customers

3.1.3 Organizational structure

Table 4 Organizational structure of Vietcombank

Source: Vietcombank’s website

3.1.4 Business operation outcomes

In 2017, Vietcombank continued to record outstanding growth and achieved impressive results in almost every field of operation; achieved and exceeded the targets set by the AGM

 Total assets as of 31/12/2017 was VND 1,035,293 billion, up 31.4% compared to 31/12/2016, 18% above its plan Credit reached VND 557,688 billion, up 17.2% yoy, 2% above its target and was in line with credit growth orientation assigned by the Governor of SBV

 Total deposits amounted to VNĐ889.7 trillion, up by 38.7 per cent year on year and 18 per cent above set target

 Vietcombank’s outstanding loans reached VNĐ553 trillion, an increase of 17.2 per cent Credit quality was under control, with the ratio of non-performing loans at 1.11 per cent, a drop of 0.35 percentage points over the end of 2016

 The bank allocated more than VNĐ6.18 trillion for provisioning last year

 Its trading of foreign currencies was worth $45.1 billion, rising by 27.2 per cent, while transfer of remittances was worth $1.9 billion, up by 14.9 per cent

 Profit before tax as of 31/12/2017 reached VND 11,341 billion, up 32.2%

on 31/12/2016, exceeded its target by 23%

 NPL ratio was 1.11%, less than 2%

Asset structure transformed clearly in terms of quality: credit structure shifted to the right direction of increasing the portion of retail credit and gradually reducing wholesale credit; the structure of deposits moved in line with the development orientation of the Bank from wholesale to retail and the orientation to attract low cost funding; NPL ratio decreased and was below its plan; Capital Adequacy Ratio (CAR) ratio met the SBV’s requirement

Vietcombank was the largest among listed banks by capitalization, with its share traded at VND58,800 each on Friday morning and a market capitalization of nearly $10 billion

Reporting at the bank’s 2018 business conference, General director Phạm Quang Dũng said the results in 2017 were impressive and far exceeded targets Also,

Vietcombank Chairman Nghiem Xuan Thanh said the bank’s project to restructure and resolve bad debts by 2020 was approved by the State Bank of Viet Nam, targeted to develop Vietcombank into the leading bank in risk management in Viet Nam, as well as

to join the top 100 largest banks in Asia, and become one of the world’s top 300 financial corporations

The central bank also allowed Vietcombank to offer shares to foreign investors in a private placement which, Thanh said, if successfully implemented in the first months of

2018 would be a positive sign Morover, Prime Minister Nguyen Xuan Phuc gave a greenlight to Vietcombank’s plan of opening a subsidiary in Laos

On January 8, Vietcombank announced that it would complete the development of the probability of default (PD) model in accordance with Basel 2.With the PD model, Vietcombank was getting ready to apply Basel 2, following an advanced internal ratings-based approach

3.1.5 Business orientation for the year 2018

Continue the motto Transformation - Effectiveness - Sustainability and management orientation Innovation - Discipline - Responsibilities, the Bank’s system makes best efforts to boost its operation, successfully implement the plan following the management direction of the Government and the SBV

Main orientation in some specific fields as follow:

 Business activities

 Promote retail credit and low cost funding; diversify the portfolio and reduce loan amount to enterprise with low profit; foster credit sales together with other banking services

 Focus on implementing 3 key areas, pillars in 2018 business operation: Services, Retail, Treasury and Investment

 Strengthen the handling process of NPLs, written-off loans

 Strongly reform the business segment – treasury, foreign exchange and trade finance

 Continue strengthening the operation of subsidiaries and enhance investment efficiency

 Finalize the Scheme to transform the ownership structure of the subsidiaries: VCBL, VCBS, continue divestment at some credit institutions

 Management

 Strongly implement the transformation projects following their schedule

 Implement the transformation of Wholesale credit target operating model

 Strengthen the inspection and monitoring activities

 Other businesses: Focus on building learning culture, self-training/study, apply the study/training result and examination for staffing; increase the number of training sessions and examination to upgrade staff’s quality Speed up the construction and procurement of the Branch’s Office; implement the change of the Bank’s brand recognition Implement social security activities, giving priority to education, healthcare and disaster mitigation Human Resource Committee advised the BOD policies regarding human resources, salary remuneration, bonus and other well fare/ remuneration policies of the Bank

3.1.6 Introduction of Ngo Quyen Transaction Centre

On October 30th 2008, Vietcombank’s Transaction Centre officially has its new head office at 31-33 Ngo Quyen Street, Hang Bai Ward, Hoan Kiem District, Hanoi New transaction centre is located in the heart of the capital There are many advantages such as convenient transportation, high human population density as well as business activities, which boosts its operational efficiency Retail and many new products to individual customers are being implemented

Mr Nguyen Hoa Binh (2008), Chairman of the Board of Directors of Vietcombank said that “Although having officially functioned separately from the headquarter for almost three years, the Transaction Centre has proved to be the “big brother” in the VCB’s family Beside normal functions as a branch with high market share in many fields in Hanoi, it is also the pioneer in policy implementation, new service launch, as well as other special operations.” The Transaction Centre is always the leading unit in Vietcombank’s system in mobilized capital scale and profits even in difficult time”

In the centre, most of officers are female, around at the age of 32 They are mainly working in accounting, administration, funding departments While, the male staff is

usually in customer departments and responsible for developing the market and increasing sales

Besides the training programs of the whole system, the centre also organized several training courses for its staff such as sales skills, communication skills, selling insurance skills, etc

The centre always takes care of staff’s health such as holding periodic health examinations for employees at large reputable hospitals, buying health insurance from PJICO Insurance Every year, there are summer holidays or meetings for the whole staff and their family to enhance their solidarity among bank officers In addition to fixed salary paid periodically, cash for overtime is paid in full

3.2 Dimensions and attributes to analyze employee motivation at the Card Services Business Department of Vietcombank’s Ngo Quyen Transaction Centre

Using Herzberg's motivation theory mentioned in chapter 2, the model is analyzed

in details with the scale as below

I “Bank’s policies and administration”

1 “The bank’s policies and rules are relevant and clear enough for you.”

2 The administrative procedures of the bank are simple and friendly enough

3 You feel acceptable with other policies such as social insurance, childcare, healthcare and other extra activities.”

II “Quality of supervision”

4 “Your supervisor provides you with regular constructive feedback.”

5 “You feel acceptable with your supervisor’s management style.”

6 “Your supervisor communicates your job performance expectations with you

7 Your supervisor takes time to listen to your concerns

8 “Your supervisor is objective and fair enough.”

III “Working conditions”

9 “The bank has modern and safe working environment.”

10 “The bank has clear and friendly cultural framework and principle.”

11 “The bank’s public reputation is good.”

12 “The bank has suitable regime for working and relaxing time.”

13 “The bank equips you with full and suitable facilities for your current work.”

IV “Salary”

14 Your salary is suitable for your efforts.”

15 “Your salary can ensure your current living standards.”

16 “You feel satisfied with your current salary.”

17 “Salary is paid fully and timely.”

18 “The allowance of the bank is suitable and encouraging for the working environment.”

19 “The bank always has the regime for bonus given at Tet, holidays, etc.”

20 “The bank’s policy on salary and bonus is equal and reasonable.”

21 “Your salary is higher than that of other banks.”

V “Interpersonal relations”

22 “You are supported by your co-workers when doing your work.”

23 “Your co-workers are always helpful and cooperative.”

24 “You are recognized and respected by your co-workers for your achievements.”

25 “Employees at the department and the bank always share and communicate on a friendly and harmonious basis.”

26 “You can well cooperate with your co-workers when working.”

27 “You co-workers are full of capacity and responsible to well meet working requirements.”

28 “You are encouraged by your managers.”

29 “The managers always recognize your achievements.”

30 “You are instructed and directed enthusiastically by your managers during working.”

31 “You feel satisfied with your managers’ leadership and management style.”

32 “Your managers are excellent.”

VI “Achievement”

33 “You can earn some profit when you complete the whole or a part of a job.”

34 “The bank gives you some bonus on raising ideas to solve problems.”

35 “You can achieve some reward when generating money for the bank.”

36 “The bank has its own official performance appraisal to recognize one’s work.”

VII “The work itself”

37 “Your current work makes you proud and respected by the society.”

38 “Your current work requires you to use a large amount of professional expertise.”

39 “Your current work affects other individuals’ works in the organization.”

40 “Your current work is challenging and interesting.”

41 “Your current work requires you to be always innovative.”

42 “Your current work fills you with the feeling of completion and success.”

43 “Your current work makes positive contribution to the general sales objectives of the organization.”

47 “The bank has clear promotion and development policy.”

48 “You are equally treated in promotion opportunities as compared to other colleagues at the same working seniority and training qualification.”

IX “Growth”

49 “You are supported with favorable conditions to improve your qualification to be able to meet current work requirements.”

50 “You are funded to attend necessary training courses for your work.”

51 “You are oriented to attend the programs to improve your knowledge for your work that cannot be organized by the bank.”

52 “The training activities of the bank helpful for your work.”

53 “You are able to apply the knowledge and expertise gained from the training course to your work.”

X “Overall employees’ motivation”

54 “You always take much self-efforts when working.”

55 “You feel awful when you fail in working.”

56 “You feel unhappy when everything goes wrong, not as expected in working.”

57 “You like reviewing daily works to enjoy your achievements.”

Source: Collected by Researcher from literate review

3.3 Respondents’ profile

3.3.1 Respondents’ profile by years of experience

Most of employees of at the Card Services Business (CSB) Department of Vietcombank’s Ngo Quyen Transaction Centre have good quality

The CSB Department has 27.77% of employees with more than 5 year experience (equal to 20 employees) and they are experienced to manage the tasks and lead the team 58.33% of employees have from 2 – 5 year experience (42 employees) and 13.88% of them have less than 2 year experience (10 employees)

At the CSB Department, the employees seem demotivated and get poor performance Therefore, to assess and improve motivation for employees at this department become critical factors to ensure the development of Vietcombank.”

Figure 1 Respondents’ profile by years of experience

Less than 2 years 13.88%

From 2 - 5 years 58.34%

More than 5

years 27.78%

3.3.2 Respondents’ profile by age

It can be seen that employees at around 26-31 years old account for the highest proportion at the department, 44 employees (61.11%) Employees at 23-26 years old are

15 (20.83%) Most of employees are so young, hence, they may be smart and willing to deliver the best service quality to its customers However, if they are dissatisfied with their job or demotivate, the effect of department will decrease

Table 6 Respondents’ profile by age

Source: Surveyed by Researcher

3.3.3 Respondents’ profile by gender

As the below diagram, it can be seen that the gender rate is unequal: female rate (65.27% equal to 47 employees) and male rate (34.72% equal to 25 employees) Due to the characteristics of service field, male employees mainly are salesmen and team leaders, while female employees are specialized in contacting and working with customers, so they sit at the department all day

Figure 2 Respondents’ profile by gender

male female