Improving the human resources managementactivities at sunjin vietnam joint venture company

Graduate School of Business and Management Thesis for a Master’s Degree Improving the human resources managementactivities at Sunjin Vietnam Joint Venture Company Researcher: Su Bui

Graduate School of Business and Management

Thesis for a Master’s Degree

Improving the human resources managementactivities

at Sunjin Vietnam Joint Venture Company

Researcher: Su Bui Bao Ngoc

January, 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 Improving the human resources managementactivities

at Sunjin Vietnam Joint Venture Company published by Mr.／Ms Su Bui

Bao Ngoc in the Master Program of Graduate School of Department of Business Administration

Master’s Degree Examination Board

Board Members：

Advisors： Assoc Prof Han Hou

Chair：

Date： ／ ／

ABSTRACT

Thesis Title: Improving the human resource management activities at Sunjin Vietnam Joint Venture Company

Pages：101

University：Lunghwa University of Science and Technology

Graduate School：Department of Business Administration

Researcher：Su bui Bao Ngoc Advisor：Assoc.Prof Han Hou

Keywords: Human Resouces Management (HRM), effectiveness, affecting factors, reality, impact

In today's integrative context and technology transfer, human resources become a factor that bring competitive advantages for countries in general and each enterprise in particular It is a strategic tool that helps enterprises maximize their employee’s individual talent in order to bring efficiency in production and business which is most businesses expect For a long-term, stable development, it requires each business has to have an appropriate business strategy, a policy to maintain the financial stability and to well-manage the organization's human resources Therefore thesis has focused on the HRM practices at Sunjin Vietnam Joint Venture Company to research the factors impact to the effectiveness of HRM activities in there Data used in making analysis was collected from conducting survey at Sunjin Vietnam Based on 105 valid responses from employees, the study indentified three components – “Training and development”, “Salary and compensation” and “Working environment – which explain effective level of HRM performance in this company The relationship between these HRM practices components and affecting factor is investigated through regression analysis As the result showed, these three components have positive influence on the effectiveness of HRM activities in which salary and compensation has the most significant impact on effective level of HRM performance In addition, based on these findings, the thesis also gives some suggestions

for Sujin Vietnam to further improve HRM practices and increase employees’ satisfaction level to company

During the time of preparing and completing my report, I was received numerous support and encouragement from many people In addition, this is hereby to express my sincere gratitude to them

First and foremost, I would like to give my sincere thanks to the lecturers, especially to my supervisors Assoc Prof Han Hou and Dr Mai Duc Anh for their devoted attention, lessons and guidance, which have equipped me with key knowledge and essential skills throughout the course More importantly, everything I have learned here would undoubtedly help me tremendously in my work in the future

Second, I wish to express my gratefulness to my colleagues at Sunjin Vietnam Joint Venture Company for their enthusiastic support and creating favorable conditions for me to have more useful information to complete this report

I would also like to thank International School - Vietnam National University, Nantes University for useful supports during studying and researching to complete this paper This course has equipped and improved and added a lot of knowledge about the different areas In addition, the course also helps me to have a relationship, have the opportunity to share information and learn from other students in the program

Sincere thanks!

Author

Su Bui Bao Ngoc

TABLE OF CONTENTS

Acknowledgement Error! Bookmark not defined

List of Figures and Tables iv

1 INTRODUCTION 1

1.1 Problem identification 1

1.2 Research objectives, questions and scope 2

1.2.1 Research objectives 2

1.2.2 Research questions 2

1.3 Research scope, objects and methods 2

1.3.1 Objects 2

1.3.2 Research scope 3

1.3.3 Data collection methods 3

1.4 Contribution of the research 4

1.5 Structure of the thesis 4

2 THEORETICAL FRAMEWORK 5

2.1 Conceptual framework on human resource management 5

2.1.1 Concepts of human resource 5

2.1.2 Characteristic of enterprise’s human resource 5

2.1.3 Concepts of human resource management 7

2.1.4 The role, functions and objectives of HRM 8

2.2 The factors impact on HRM performance 10

2.2.1 Recognition 11

2.2.2 Training and development 12

2.2.3 Salary and compensation 13

2.2.4 Working environment 14

2.3 Literature review 16

2.4 Research Model and Hypotheses 19

2.4.1 Research Model 19

2.4.2 Hypotheses 20

3 RESEARCH CONTEXT AND METHODOLOGY 21

3.1 Overview of Sunjin Vietnam Joint Venture Company 21

3.2 Organizational structure and HRM division 27

3.3 Research Methods 29

3.3.1 Research approach 29

3.3.2 Designing questionnaire 30

3.3.3 Sample and Data Collection 32

3.4 Analyzing data plan 33

3.4.1 Reliability analysis by Cronbach’s alpha 34

3.4.2 Exploratory factor analysis 35

3.4.3 Regression analysis 35

4 ANALYSIS THE REALITY OF HRM ACTIVITIES AT SUNJIN VIETNAM JVC AND SURVEY RESULTS 38

4.1 The business results of Sunjin Vietnam in the period from 2014-2016 38

4.2 The reality of HRM activities at Sunjin Vietnam JVC 39

4.2.1 The viewpoint on human resource management at Sunjin Vietnam JVC 40

4.2.2 Characteristics of human resource of Sunjin Vietnam JVC 41

4.2.3 The reality of HRM practices at Sunjin Vietnam JVC 44

4.2.4 Evaluating the reality of HRM activities at Sunjin Vietnam JVC 51

4.3 Research results and analysis 52

4.3.1 Data description 52

4.3.3 Reliability analysis and scale 56

4.4 Exploratory Factor Analysis 60

4.4.1 Exploratory Factor Analysis of Affecting Factors Scale 60

4.4.2 Exploratory Factor Analysis of Effectiveness of HRM performance Scale 64

4.5 Regression Analysis 65

4.5.1 Regression Analysis 65

4.5.2 Research model and hypotheses tested result 69

5 FINDINGS AND DISCUSSIONS 71

5.1 Assessment of the effectiveness of HRM practices at Sunjin Vietnam 71

5.2 The affecting factors on the effectiveness of HRM activities at Sunjin Vietnam JVC 72

5.3 Suggestions to improve HRM performance at Sunjin Vietnam 72

5.3.1 Improve component of training and development 72

5.3.2 Improve salary and compensation component 74

5.3.3 Improve working environment component 74

CONCLUSION

76

References 77

APPENDIXES 81

LIST OF TABLES AND FIGURES

Figure 2.1 The Michigan model 17

Figure 2.2 Research model 20

Figure 3.1 Organization structure of Sunjin Vietnam Joint Venture Company………… 29

Table 3-1: Encoded Data 33

Tabble 4.1 Sunjin Vietnam’s key performance indicator in the period of 2014-2016 38

Table 4.2 Labor structure of Sunjin Vietnam 41

Table 4.3 The growth rate of employee education at Sunjin Vietnam JVC in the period from 2014 to 2016 43

Figure 4.1 The recruitment results of Sujin Vietnam JVC from 2004 to 2016 44

Figure 4.2 The correlation between labor force and gross revenue of Sunjin Vietnam in the stage from 2004 to 2016 45

Table 4.4 Descriptive Analysis 52

Table 4.5 Gender distribution among 105 participants 54

Table 4.6 Education and seniority of 105 participants 55

Table 4.7 Reliability of scale 57

Table 4.8: Exploratory Factor Analysis of affecting factors to the effectiveness of HRM practices at Sunjin Vietnam 61

Table 4.9: Reliability statistics and exploratory factor analysis of affecting factors to the effectiveness of HRM practices at Sunjin Vietnam, 2nd time 62

Table 4.10: Exploratory Factor Analysis of the effectiveness of HRM performance Scale 64 Table 4.11: Correlations 65

Table 4.12 Collinearity Statistics 66

Figure 4.3: Regression Standardized Residual Error! Bookmark not defined Table 4.13 Regression analysis summary 67

Table 4.14: Regression analysis – the second time Error! Bookmark not defined Figure 4.4 Research module result 69

Table 4.15: Hypotheses Tested Results 70

Table 4.16 The effectiveness of HRM performance at Sunjin Vietnam 71

Table 5.1 The effectiveness of HRM performance at Sunjin Vietnam……… 73

1 INTRODUCTION

1.1 Problem identification

In today's integrative context and technology transfer, human resources become a factor that bring competitive advantages for countries in general and each enterprise in particular When the world is more and more flat, the elements of machinery and technology could be bought or imitated, but the human resource factor is a competitive advantage that cannot or takes a long time to copy It is a strategic tool that helps businesses identify their manpower needs, provides befitting operational policies and ensures that businesses have enough human resources with quality and capacity to work most effectively It is also helps enterprises maximize their employee’s individual talent in order to bring efficiency in production and business which is most businesses expect An enterprise might have modern technology, good service quality and strong infrastructure but lack of a good workforce, it cannot survive long and create competitive advantage because human being is the factor that makes the difference among businesses

For a long-term, stable development, it requires each business has to have an appropriate business strategy, a policy to maintain the financial stability and to well-manage the organization's human resources If the HR activities are effective, the enterprise will have many positive solutions to save costs and improve organizational performance, such as reducing administrative costs; organize a compact personnel apparatus; selecting the right people, the right job; raising productivity etc In fact, many enterprises in Vietnam

as Sunjin Vietnam JVC are using only about 60% of their human resource productivity and this ratio seems lower in the administrators group [41] It shows HRM activities in these enterprises are not effective The difficulties and limitations in human resource management require enterprises change fundamentally the way they use to manage their manpower They need to have a human resource management system with suitable policies

on recruitment, training, salary, bonus and evaluation for their current development requirements

Sunjin Vietnam Joint Venture Company is a joint venture among PIDI Company, HanViet Company of Vietnam and Sunjin E&A Corporation of South Korea in the field of architectural design consultancy for projects The achievements that Sunjin Vietnam has

achieved are a pride not only to Sunjin Vietnam’s employees but also a good sign to the development of the country However, currently the challenge for the company is how to remain and expand its market share and influence on customers in this period of economic crisis Sunjin Vietnam always considers that people are the most valuable organizational asset and to be a strong organization, it should have practical solutions to improve the efficiency of human resource management activities and its inherent competitive

advantage From these realities the author has chosen the topic “Improving the human

resource management activities at Sunjin Vietnam Joint Venture Company” is

necessary to increasing the effectiveness of HRM performance in future

1.2 Research objectives, questions and scope

1.2.2 Research questions

1.2.2.1 To what extent does Sunjin Vietnam JVC apply the HRM concepts?

1.2.2.2 What are the main elements affect on effectiveness of HRM performance

on the effectiveness of HRM practices in this organization From those collected data and

analysis results will formed the basics for determining and selecting the later solution for Sunjin Vietnam JVC to improve its HRM performance in the future

1.3.2 Research scope

The study scope is identifying and measuring the factors that affect on the effectiveness

of HRM practices at Sunjin Vietnam JVC Therefore, it is not only stopped at testing the theories regarding the human resource management and the research models used to measure impact level of the main factors on HRM performance but further, it is the way for me to apply the knowledge, skills and my experiences into the setting-up the HRM solutions for a specific enterprise, from that contribute the useful points in HRM activities of Sunjin Vietnam JVC where I am working for In this paper, I will focus on research the information and figures related to the reality of the HRM activities of Sunjin Vietnam in the period from 2014 to 2016

1.3.3 Data collection methods

In order to answer the three main research questions, the author uses following methods for data collecting and analyzing:

Secondary data: According to Saunders et al (2009), secondary data is the information

which is collected from public resources such as books, journals, and the Internet and this information is collected by previous researchers in line with current studies’ objectives Major advantage of secondary data is less time consuming and lower effort to collect to the researchers (Srivastava and Rego, 2011) In this study, secondary data is collected from books and journals which are about human resource management concepts as well as previous empirical evidences about the impacts of recognition; training and development; salary and compensation; working environment to the effectiveness of human resource management Figures were collected from annual reports, HR reports and actual data of business and HRM implementation at Sunjin Vietnam JVC in the period from 2014-2016

Primary data collection and analysis: Primary data is considered as the information

that is self-collected by the researchers without reliance on public sources (Guffey et al., 2010) According to Saunders et al (2009), primary data has the advantage of directly supporting the studies but the researchers often take time to collect this information In this study, primary data is collected through surveys of questionnaire with relevant respondents

In more detailed, a survey of questionnaire is established to collect the assessment from the

employees at Sunjin Vietnam Joint Venture Company and their assessments are made up in term of recognition; training and development; salary and compensation; working environment These quantitative data would be processed by software SPSS version 21.0 with methods such as reliability test Cronbach Alpha, exploratory factor analysis, one-way ANOVA and multiple linear regression analysis The author found out solutions to attain the above objectives

1.4 Contribution of the research

Within the boundary of this thesis, the author aimed to explore the factors impact to the effectiveness of HRM activities Base on assessed results the reality of HRM performance at Sunjin Vietnam JSC as well as the impact level of these factors to the effectiveness of HRM practices, the author proposed some solutions to improve HRM activities for Sunjin Vietnam JVC in the future Those solutions constituted conducting extensive training program for its employees relevant to the changing needs of jobs and business; building a core team who are ready to complete the company's basic mission in any situation; revising working processes, evaluating and recognizing employee’s achievement; enhancing the prestige of Sunjin Vietnam JVC at domestic and foreign markets; building and implementing the culture of Sunjin Vietnam JVC

1.5 Structure of the thesis

Regardless of the introduction, conclusion, reference and appendices the thesis has four major parts as following:

(1) Theoretical Framework

(2) Research context and methodology

(3) Analysis the reality HRM practices in Sunjin Vietnam JVC and survey result (4) Findings and Discussions

2 THEORETICAL FRAMEWORK

This chapter will present theoretical framework for the research It includes fundamental concepts on human resource, its role, functions and objectives of human resource management The characteristics of enterprise’s human resource and the main factors impact to the effectiveness of HRM practices well as research model and its hypotheses were also mentioned in there

2.1 Conceptual framework on human resource management

2.1.1 Concepts of human resource

According to Dessler (2010), the term of human resources was first mentioned in 1960s to refer people who are working for a company or organization and create a workforce with the value of competencies, knowledge, skills, life experiences and motivation that contribute to increasing in competiveness and value of organization Tran Xuan Cau & Mai Quoc Chanh (2008) defined human resource as the manpower capable that create material and spiritual wealth for society that is expressed in certain quantities and qualities at a specific time Wright et al., (1994) identified that human resource is a combination among skills, knowledge and competencies that were put under the organizational control in the form of direct labor relations Those capabilities express in the form of employee’s behavior that accordant with organizational goals He pointed out this concept was also utilized to describe a functional department charged with activities related

to employees These activities normally encompass recruiting, selecting, training, employee benefits and retention etc

2.1.2 Characteristic of enterprise’s human resource

Tran Kim Dung (2011) defined human resources of an organization were formed rely

on individuals who have different roles and linked to each other for certain enterprise purposes So enterprise’s human resource is total labor capacity that is mobilized for implementing, completing its short-term and long-term tasks The working ability is a set of health factors and worker’s qualities The working capacities are the more synchronous and consistent with the needs, the quality of enterprise’s human resource is guaranteed

Human resources contain human nature with creative capacities, needs, motives and psychological characteristics of different individuals These make the difference and

superiority of human resources compared to other sources Workers are able to set up teams, groups and trade unions to protect their interests Their behavior might be change or not depending on themselves or on the impact of the surrounding environment

Research by Do Van Phuc (2004) found that enterprise’s human resource is independent inputs It determines the quality, cost, duration of other inputs; governs the quality, cost, and duration of intermediate products, components and outputs of the business This is completely confirmed because all business’s activities are done by people and then returned to serve themselves They analyze and forecast market demand, competitors, decide on strategies, business plans and product - customer with defined quality and quantity They creative, transfer technology, operate machinery and equipment and continuous improve and modernizes machinery and equipment People define capital, material needs and labor demand as well as assure those important inputs Nowadays, although science and technology advances rapidly, modern machines and devices are invented but still need human beings to control and operate It is clear that without human factors, other factors are meaningless Therefore developing human resource in enterprise has got following fundamental features

Firstly, human resource in enterprises is a part of a national and territorial human resource That is the labor capacity that businesses can mobilize from manpower of nation and territories

Secondly, enterprise’s human resource is not only a simple summation and each individual’s working capacity in a business but the resonance of all staffs’ capacity to work

in the teams of the organization It means developing human resources in the enterprise is not only enhances each individual’s working ability that reflected in the working quality, but stimulate groups work among the employees such as appropriate placement, strength, befitting compensation and improved-working environment

Thirdly, the human resources in the business are aligned with the business objectives and must be planned from the business objectives Therefore, the developing human resources in the enterprise must be based on the enterprise strategic objectives and aim to deal with those tasks

Fourthly, human resource in the enterprise is a resource similar other resources such

as capital, technology etc but it different in term of its nature and role in the enterprise It is

to be controlled by psychological factors, so the process using it will produces greater value than its own value At the same time, it plays a decisive role in effectively utilizing other resources of the business

Fifth, if human resource management aims to optimize the business’s results and employees’ ability, highly economic efficiency and satisfy the employee’s demand, the developing human resources is raising the working capacity that the business might be mobilize to complete the business’s tasks and objectives

2.1.3 Concepts of human resource management

It cannot be denied that employees are the most valuable resource of an organization Without a good system of employees who are working for the same goals, the organization’s operation cannot be successful The problem is when an organization owns a good system of employees how can they manage them in order to achieve the mission and vision of the organization because each person is a unique individual and it is not easy to group people to work together Since then, the need of human resource management occurs During time, there are a lot of definitions about human resource management which is considered as a study of activities related to people working in an organization/company According to Byars& Rue (2006), human resource management is defined as the activities

of an organization in managing all levels of employees in the organization for the purpose

of reaching the organization’s goals On the other hand, Dessler (2008) states that human resource management consists of many aspects including recruiting, screening, training, rewarding and appraising However, human resource management is not only concerned with the efficiency of using people in order to achieve organization’s goal but also meet the individual’s goal In addition, DeCenzo and Robbins (1996) stated that human resource management is the part of the organization which concerns about the people dimension

In short, human resource management is a management function concerned with hiring, motivating and maintaining people in an organization The aim of human resource management is to ensure that the talents of the organization are used effectively and efficiently in order to accomplish with organization’s goals

2.1.4 The role, functions and objectives of HRM

The role of human resource management is to plan, develop and administer policies and programs designed to make optimum use of an organization human resources Its objectives include (1) effective utilization of human resources; (2) desirable working relationship among all members of the organizations and (3) maximum individual development

According to Akbar Ali (2013), human resource management has got four functions consist of staffing, training, development and motivation and four activities namely getting people, preparing them, stimulating them and keeping them Therefore, it can be said that human resource management plays an important role in the creation as well as development

of an organization in the increasing fierce competition, especially in the trend of globalization According to Kelliher and Riley (2002), the impact of human resource management is greatest when it involves a set of coherent policies and practices and they also consider that human resource management initiatives should be implemented as part of

an integrated package

The overall purpose of human resource management is to ensure that the organization is able to achieve success through employees Ulrich & Lake (1990) stated that human resource management is the source of organization capabilities which allows organization learns and capitalize on new opportunities According to Michael Armstrong (2006), human resource management is concerned with achieving objectives which are summarized

as below:

 Organizational effectiveness: according to Purcell et al (2003), the strategy of human resource management is to enhance the effectiveness of organization through developing and strengthening the programs which related to knowledge management, talent management and creating a great place for working

 Human capital management: contains of the people who work and bring the success

to the organization Bontis et al (1999) defined the human capital as one factor of human issue of an organization which includes the intelligence, skills and expertise that give the organization its distinctive character The human elements of the organization are those which are capable of learning, changing, innovating and

providing the creative which ensure the survival as well as the long – term development of the organization

 Knowledge management: according to Scarborough et al (1999), knowledge management is a process of which creating, acquiring, capturing, sharing and using knowledge in order to enhance performance of each individual in the organization

 Reward management: one purpose of human resource management is to strengthen the motivation, job commitment of employees through the processes and policies which ensure that employees are valued and rewarded for what they do and achieve and for the level of skill and competence they reach

 Employee relations: human resource management’s task is to create a productive environment and maintain the friendly relationship between managers and staffs as well as between colleagues

 Ensuring that the organization is in compliance with laws affecting the workplace such as: human rights, employee equity, occupation health and safety etc

 To provide the organization with well – trained and well – motivated employees

 To increase the employees’ satisfaction

In short, according to the functions of human resource management, the role and significance of it is presented as below:

(1) Recruitment and training: is one of the major responsibilities of the human resource team The HR managers come up with plans and strategies for hiring the right kind

of people They design the criteria which is best suited for a specific job description Their other tasks related to recruitment include formulating the obligations of an employee and the scope of tasks assigned to him or her Based on these two factors, the contract of an employee with the company is prepared When needed, they also provide training to the employees according to the requirements of the organization Thus, the staff members get the opportunity to sharpen their existing skills or develop specialized skills which in turn, will help them to take up some new roles (2) Performance Appraisals: HRM encourages the people working in an organization,

to work according to their potential and gives them suggestions that can help them

to bring about improvement in it The team communicates with the staff individually from time to time and provides all the necessary information regarding

their performances and also defines their respective roles This is beneficial as it enables them to form an outline of their anticipated goals in much clearer terms and thereby, helps them execute the goals with best possible efforts Performance appraisals, when taken on a regular basis, motivate the employees

(3) Maintaining work atmosphere: This is a vital aspect of HRM because the performance of an individual in an organization is largely driven by the work atmosphere or work culture that prevails at the workplace A good working condition is one of the benefits that the employees can expect from an efficient human resource team A safe, clean and healthy environment can bring out the best

in an employee A friendly atmosphere gives the staff a job satisfaction as well (4) Managing disputes: In an organization, there are several issues on which disputes may arise between the employees and the employers You can say conflicts are almost inevitable In such a scenario, it is the human resource department which acts as a consultant and mediator to sort out those issues in an effective manner They first hear the grievances of the employees Then they come up with suitable solutions to sort them out In other words, they take timely action and prevent things from going out of hands

(5) Developing public relations: The responsibility of establishing good public relations lies with the HRM to a great extent They organize business meetings, seminars and various official gatherings on behalf of the company in order to build up relationships with other business sectors Sometimes, the HR department plays an active role in preparing the business and marketing plans for the organization too Any organizations, without a proper setup for HRM is bound to suffer from serious problems while managing its regular activities For this reason, today, companies must put

a lot of effort and energy into setting up a strong and effective HRM

2.2 The factors impact on HRM performance

Fisher and Ackerman (1998) defined that in the effectiveness of HRM practices was affected directly by business’s internal environment through four elements including recognition, training and development, salary and working environment In this section I will study these factors as a theoretical background to build research scales and hypothesizes in next part

2.2.1 Recognition

Recognition is one of the factors that influence on employee behavior when they are working for particular firms It is defined as “is a public expression of appreciation given

by a group to individuals who undertake desired behaviors” (Fisher and Ackerman, 1998)

In this context, recognition is defined as appreciation or depreciation from people within the firms towards the achievement of one employee (Miller and Lawson, 1999) Recognition is also considered as intrinsic rewards and the effectiveness of recognition is also sourced by extrinsic rewards While intrinsic rewards refer to job characteristics, extrinsic rewards come from pay and bonus level that the employees are get when they work for the firms (Kalleberg, 1977) Moreover, intrinsic and extrinsic rewards have inter-correlation with each other According to Ajila and Abiola (2004), intrinsic rewards are generated when the employees have a sense of recognition from their supervisors and other colleagues in term of task achievement and extrinsic rewards, normally, refers to pay level

or bonus for outstanding achievement Hafiza et al (2011) indicate that intrinsic rewards always come up with extrinsic rewards and the employees do not behavior right if there is lack of either intrinsic or extrinsic rewards

Recognition is considered as important antecedents of employee behavior and it impacts indirectly to employee performance It is notable to state that employee behavior is positive when they are received significant amount of recognition from their supervisors and their peer colleagues (Katou, 2008) Many firms today establish recognition mechanism through intrinsic and extrinsic rewards in order to improve employee performance and it is also key source to further upgrade the firm performance itself (Deeprose, 1994) Such context is also supported by academic studies For example, the study of La Motta (1995) shows that when the employees receive significant recognition from other people, they will work in extra performance The study of Ronra and Chaisawat (2010) explores that the employees at hotel industry get right behavior and better performance when recognition policy is put into practice Other studies also find the same finding of recognition is main factor influencing on employee job satisfaction and employee performance (Herzberg, 1957; Locke, 1976; Weinstein, 1997; Ali and Ahmed, 2009) This relationship between employee behavior and recognition is also found in other

industries such as software development (Jain, 2010) and outsourcing (Ooi et al., 2007) In extra context, intrinsic rewards and extrinsic rewards impact to employee behavior and employee performance but the level of impact is different According to Mottaz (1985), extrinsic rewards impact to employee behavior and employee performance but only strength in lower level of occupation

2.2.2 Training and development

Training is defined as a set of activities that are planned to increase the knowledge of the employees within their work scope and the training goal is to align the employee behavior and employee performance with the business goal of the firms (Landy, 1985) According to Patrick (2000), training is important activity and it helps the employee to improve working knowledge and skills and aims to improve employee performance Along with training, development is another activity and it is viewed as long term activities and the objective is to upgrade one employee to managerial position (Steinmetz and Lawrenc, 1996) Moreover, training is conducted to improve the current employees performance, development is utilized to help the employees to gain future performance and progress (Miller, 2006)

Training and development is an important factor that has an impact on both of employee behavior and employee performance (Owens, 2006) The first aspect of this factor is availability of training session and when the employee perceives that they can access training at the firms, they are more satisfied with the job and therefore better employee behavior (Sahinidis and Bouris, 2008) The studies from Bartlett (2001) and Rowden and Conine (2003) affirm that when the firms establish the opportunity for workplace learning, the employee behavior will be maintained at positive level, showing through job satisfaction and job performance Empirical finding about the relationship between employee behavior and performance and training and development is explored in several surveys For example, two surveys are conducted by Blum and Kaplan (2000) and Melymuka (2000) in Information Technology – IT and two surveys come up with the result

of training and development has strongest influence on employee behavior and employee performance Same key finding is also found in other industry like among nurse in United Kingdom (Shields and Ward, 2001) However, other studies show that training and development has insignificant impact to employee behavior and employee performance

For example, Tansky and Cohen (2001) show that training and development has lowest influence on employee behavior which is quoted through the level of job satisfaction

2.2.3 Salary and compensation

Salary is defined as “a form of periodic payment from an employer to an employee, which specified in an employment contract” (Sharma and Bajpai, 2001) According to Cable and Judge (1994), salary is considered as extrinsic rewards and it is basis factor influencing on employee behavior and employee performance in case of salary is paid at the level of employee acceptance The relationship between employee behavior and salary

is shown in previous studies Although earlier studies find weak relationship (Hoppock, 1935), later studies come up with different result whether salary has higher impact to employee behavior and employee performance (Lee and Wilbur, 1985; Nguyen et al., 2003) According to Sweet et al (2006), salary is basic thing when the employee sets to work for particular firms and the level of salary paid impacts to daily living standard of the employees which is clearly shown through Need Hierarchy Theory of Maslow (1943) Empirical study which is developed by Sowmya and Panchanatham (2011) examines the impacts from pay, promotion, organization factors, supervisor behavior, job and working condition, core worker behavior to the level of job satisfaction and they identify that pay is the most influenced one Same key finding is also found in case study of Amendolair (2007) Further study from Diener and Seligman (2004) showed that employees who get lower salary than others often have lower job satisfaction and they are easy to quit the jobs Moreover, one of the most important aspects in examining salary is the perception towards how the salary is paid (Hulin and Smith, 1965; Spector, 1997) It is required to have fair salary paid among the employees who share the same working characteristics and conditions (Adam, 1963) Katzell (1964) indicates that the satisfaction to pay level is generated from the gap in between perceive of need-to-pay and actual received payment Compensation is one of the most vital factors affecting the employee’s working motivation Its activities encompass caring the material and spiritual life that the business did for its employees These activities aimed to satisfy the basic needs of workers and improving the quality and efficiency of enterprise’s business operations In any firm, well-qualify employees do not mean they will work effectively, loyal to the company because it depends on their individual needs and motivations In order to promote individual's talents

and capacity, compensation is the best way to promote personal motivation that contributes

to create the business’s strength By providing physical conditions, it also contributes to reproducing working power and maintaining a stable human resource for business Along with other HR activities such as recruitment, training and development, compensation helps enterprise to improve its human resources quality to meet the increasing demands of business operations Certainly, managers need to know how to develop and implement consistent compensation policies that motivate and stimulate employees to work effectively, maintain a good working relationship in the workplace Particularly, the development and application of compensation policies, reward and discipline regimes, improving working environment and conditions, the healthcare, insurance and occupational safety Thus, compensation contributes to the cost saving for enterprise In terms of efficiency, compensation is associated with the enterprise’s cost through the payment of wages, investment for activities to meet the material and spiritual needs of the employees and increase the business efficiency of enterprises

2.2.4 Working environment

Working environment is the last factor that is put into discussion in this study It is defined as “all things involve the employee's job such as relationships with colleagues, managers, organizational culture, space for personal growth, and so on” (Arabi, 2000) It is considered as a very important factor in promoting organizational development so that businesses have more favorable conditions in attracting their human resources, especially high quality human resources Furthermore, a professional and friendly working environment is a great opportunity for staff to assert and maximum develop their working ability to serve practical requirements of enterprise Therefore, it is an indispensable need

in the development of human resources at the enterprise and sometimes it is more motivating meaningful than material compensation However, HR researchers contend that

a sustainable working environment encompasses both physical and non-physical environments

A sustainable working environment should emanate from the physical environment, including three following elements

(1) The environment creates a balance to ensure interactions between employees and privacy A close environment might be helps employees more concentrate but

would not support for good communicating and sharing among colleagues On the contrary, an open environment will limit privacy and concentration Therefore, a sustainable working environment must ensure the balance of these two factors (2) The office environmentally friendly, reduce carbon emissions Currently, it is a global trend while many offices offer more environmentally friendly initiatives such as green spaces, reduced printing, savings energy and water etc

(3) The office allows to work in everywhere via telephone and video communication, reducing travel time A virtual office or home office that allows employees

to communicate with their colleagues and customers through a video conference system will reduce travel time and reduce greenhouse gas emissions

The physical environment is a merely necessary condition for a sustainable working environment There are seven nonphysical factors need to be considered including

(4) A sustainable working environment must ensure a balance between work and life, helping employees meet work needs but not forgetting family obligations and relationships This determines the long-term attachment of employees to an organization and motivates employees to work more effectively

(5) This must be a positive environment From managers to staffs have got positive thinking, towards the common benefits In this environment, employees have got a habit of making constructive comments for common interests rather than imposing personal thoughts and criticisms

(6) A sustainable working environment is also a place employees perceive their work creates value for society Employees in this environment will know their value and or the company value creates for the society

(7) Job ensuring A sustainable working environment would not to be survived if employees are always in a precarious position for their future Therefore, an organization wants to create a sustainable working environment must ensure the work future for its employees, to enable them to dedicate comfortably and develop their capacities

(8) Proactive in work A sustainable working environment is a place the employees from the lower to upper levels can manage their work according to the outlined plan Proactive helps employees maximize efficiency

(9) Ensuring safety and healthy This is one of the key elements of a sustainable working environment, especially for organizations where employees work in high risk conditions for their health and safety such as mining, oil and gas, garment etc

(10) Development opportunities In particular, employees in a sustainable work environment always receive training and development programs that match their position and expertise

2.3 Literature review

Beer et al., (1984) in his study on “Managing Human Assets” argue that managers need to have the appropriate assessment methods for the effectiveness of HR policies that were built for their organizations He proposed the famous Harvard Model rely on an analytical approach of the “determinants and consequences of HRM policies” In his human-centered model, employee satisfaction was regarded as fundamental base on personal influence, work regime, human resources flows and salary level The Harvard model can be considered as one of the typical representatives of the "soft" HRM trend It advocates flexibility, negotiation, efficiency, quality, environmental recognition and labor relations rights However, some HR researchers criticized that the Harvard model might be conflict with organizational business objectives and deviate concepts of cost minimization and profit maximization (Armstrong 1987, Legge, 1995)

Michigan Devanna et al., (1984) offered a model with four factors affected on human resource management in enterprise consist of recruitment, appraisal, development and rewards This model base on employee achievements; check strategy, organizational structure system to manage people; in selection process, candidates meet organizational requirements will be recruited; employee achievements will be recognized in HR assessment process; evaluation results are a fundamental to identify salary level, rewards and development (see figure 1.1)

Figure 2.1 The Michigan model

Source: Fombrun, Tichy & Devanna, 1984

This model advantage laid on its attachment to market performance and enterprise development because cost minimisation for workers were saved as any other resources HRM planning concentrate on business not on human resource so it might be guarantee minimum the current and future employment requirements of businesses However, the right-based approach of this model will be disintegrated soon by the presence of group diversity and intra-group conflicts leading to organizational failure (Chuang et al., 2004) Ramlall, (2003) studied on “Managing Employee Retention as a Strategy for Increasing Organizational Competitiveness” with a sample of 115 employees who were working for a large, complex organization He has measured the improving the effectiveness of HRM practices through the following components: strategic planning; employees recruitment; training and developing; development and organizational change; managing work results; salary and bonus system; organizational theory and behavior He found that managers has considered HRM department as an adviser and a supporter in the effort to retain their excellent employees They often used the support of their department leaders to approve funding when applicable for budget raise Employees preferred a flexible work schedule which was one of the main reasons for their decision to remain with company or not

Findings of Shelagh Dillon and Demand Media in study on “Factors affecting Human Resource plans” determined six factors effecting on HRM including

(1) Political factors: political changes from a local to a government affect the minimum wage and the number of available employees

(2) Economic Factors: wage policy, training and equipment are the most immediately concerns in human resource planning

(3) Social factors: they affect an organization's personnel plan

(4) Technological factors: new technology brings new skills requirements, so businesses always need to be aware of the fluency and training needs when planning human resource New products and services may also require the recruitment of highly skilled employees or the training for existing staffs to meet the needs

(5) Legal factors: Labor law is the most important area of a legal system that influences human resource planning Labor policy changes must be reflected in enterprise’s policies by monitoring and management, so businesses might be need to incorporate

a training need into the human resource planning

Karunesh Saxena (2012) summarized in his report on “HRM practices: A comprehensive review” that human resource management practices were varied from country to country and the affect factors to human resource management include external factors and internal factors According to Ozutku and Ozturkler (2009), external factors and internal factors affect human resource management in countries have got several significantly differences as bellow

External factors

Kane and Palmer (1995) found that external factors affecting human resource management were pressures from macro environment that businesses unable to control and change in the short term including changes in economic, technology, national culture, industry/sector characteristics, legislation/regulation, globalization, unions activities and business activities of competitors

Internal factors

According to Milkovich and Boudreau, (1991) the internal environment of businesses strongly impacts on their HRM performance They have listed internal factors of organizational characteristics that closely relate to HR activities These factors encompass organizational size and structure, business and HR strategies, history/tradition and past

practices, top and line management, power and politics, academic and professional influence HR practices

Nguyen Quang Thu et al, (2005) researched on “Analyzing human resources fluctuations and some solutions to reduce the HR risk in the household wood processing industry in Hochiminh city” His findings showed that five factors influenced employee’s decision to change their working place including (1) income, (2) reward and welfare, (3) expertise, (4) Facilities and working conditions, (5) relationship between people He suggested several solutions to minimize the risk of labor mobility in the wood processing industry in HCMC

Le Thi My Linh (2009) studied on “Developing human resource in small and medium enterprise in Vietnam in the economic integration process” She defined five internal elements that have a decisive affection human resource development in SME such as the policy and strategy for HR development; the growth and technological innovation of businesses; positive perception of business owners about HR development; financial capacity; HR department and database of HRM Moreover, the external elements also impacted developing HR in SME consist of macro policy and the support of state and international organizations in training and developing human resources for SME; the development of a system that provides business development services; the quality of vocational training and labor market She suggested that in order to develop HR for SME, the business owners need to raise self-awareness their role in developing HR They also need to build and conduct their HR development strategy; improving the effectiveness of HRM activities and career development for employees in SME; build corporate culture that encourages advance learning

2.4 Research Model and Hypotheses

development, salary, working environment and organizational culture On the right side of the model the dependent variable is represented by the effectiveness of HRM performance

Figure 2.2 Research model

H2: The training and development has positively impact on effectiveness of HRM performance That means the higher/lower effectiveness of HRM performance evaluate the training and development factor, the higher/lower level of effectiveness of HRM performance

H3: The salary has positively impact on effectiveness of HRM performance That means the higher/lower effectiveness of HRM performance evaluate the salary factor, the higher/lower level of effectiveness of HRM performance

H4: The working environment and organizational culture have positively impact on effectiveness of HRM performance That means the higher/lower effectiveness of HRM performance evaluate the working environment factor, the higher/lower level of effectiveness of HRM performance

Recognition

The effectiveness of HRM performance

Training and development

Salary and Compensation

H2

H3

H4H1

Working environment

3 RESEARCH CONTEXT AND

METHODOLOGY

This chapter has given an overview description of Sunjin Vietnam JVC where the research was conducted In addition, it would be provided detail research method from preparing for collecting data to analyzing data

3.1 Overview of Sunjin Vietnam Joint Venture Company

 The establishment and development: Sunjin Vietnam Joint Venture Company established in 2004 basing on the professional cooperation by three companies including PIDI company, Viet-Han company of Vietnam and Sunjin E&A group of South Korea It is the best Vietnamese design consultancy company on architecture and urban planning, project development, technical design etc Currently, Sunjin Vietnam JVC has got a number of international and domestic skilled architects, engineers, with high qualification It is becoming the important consultant partner of many big famous projects

in Vietnam, South Korea and other regional countries With large scale, strong experiences

is collected and develop through each implemented project, Sunjin Vietnam Company being developed and innovation, defining company profession’s prestige over all field of work such as architecture design, urban planning and development All the Sunjin Vietnam Company’s products on planning and building design not only includes the international quality about technology but also presents the architecture invention that basing on the balance between art and technology, appearance and function, toward project’s future values creation (Sunjin’s website)

(1) Vision: With the strong belief about 21 Century branch name on an architecture design consultant company, art passion combines with technological advantage power

(2) Mission: With the key criterion is client’s benefit is the top important issues; Sunjin Vietnam Company always believes the client’s success will create the general prospect and success Over each high quality project, Sunjin Vietnam Company

always develop toward a prestigious branched name, a believe address, along with all partners and contribute to general social prospect and development

(3) Core values: “Dynamic – invention – effect” is the core value that Sunjin Vietnam

Company always follows and being directed toward through each design product Besides that, all the solutions of new technology, green and energy saved, sustainable and friendly with environment will be implemented that contribute advantages to architecture projects

(4) The quality: Propose the best products through best quality services Proposing the evaluation on feasible ability to clients

(5) Design: The unique design, combine between knowledge and technology toward the landmark key point over all kinds of building is our design target and mobility, develop and making improvement over each project

(6) Invention: The non – stop long-term invention, knowledge and future belief always being transmitted by passion design team, experiment and improvement over each project

 The business activities of Sunjin Vietnam JVC comprise:

(1) Architectural design: This is always one of strong advantages of Sunjin Vietnam Company Inheriting all the value of standard professional work that being implemented after long past time in domestic and international market, the architectural design service of Sunjin Vietnam Company becomes a qualified standard model, on behalf of the modern standard of the best Vietnam consultant company The design service that aimed at new standard establishment of building design about all kinds of building, the architectural design of Sunjin Vietnam Company always toward develop the building that being not only beautiful appearance but also reaching the identity and modern values All the issues such as Green building, Smart building etc is being implemented on the design that contribute to many augment values, and raising convenient values of 21 century standards

Main design services:

+ Making plan and information collection: information collection on project’s location, scale and standard and regulations; general evaluation of project feasible aspects; collection

the information on investor’s design requirement; research on data about regional planning, general planning that include the design area project

+ Sketching the concept: sketching, making the total area planning basing on the input data survey; research on tiny scale; draft of architectural and function model; checking the sketch and making the comparisons to relevant standards and regulations; report to investor and collection the reply comments

+ Finalize the basic concept design: making the building plan on function and architectural models; making the 3D models on computer; making the model (in case investor’s requirement); report to investor

+ Making the negotiation of general planning

+ Cooperate with investor and authority agencies

(2) Urban planning: it is one of the best consultant services that Sunjin Vietnam Company dominates on the domestic market and develops to international market in future With the high quality of design team include Vietnamese and international experts, the urban planning consultant service of Sunjin Vietnam Company is compound the development vision – community value – investment efficient

The urban planning consultant service of Sunjin Vietnam Company always include the methodical research, full understanding on situation and reality, attached with aspects on sustainable development and environment, bringing the convenient values of 21 century to not only local people but also regional area and city

(3) Landscape design: Basing on invention strength, full understanding on environment and especially new modern standard value toward community, the landscape design products of Sunjin Vietnam Company create not only landscape decoration to building or new urban living quarter, but also establish the new stylish and living standard Design by firm’s Vietnamese and international experts, landscape design will be possessive the key point, binging the passion for design space and strong connecting between all surrounding areas, include the community connection, ecology and sustainable development, new living convenience standard

(4) Building structure and M&E design: Along with the service on building architectural design, building structure and M&E design of Sunjin Vietnam Company have reached the high quality that basing on apply and master the modern technologies, new

international structure systems Although it is the technical service, the connection among architecture – structure – M&E are always remained, identified the problems between design and reality to propose the best – safety structure solution and reasonable is the key works of company In professional term, Sunjin Vietnam Company always support the best service on M&E solutions of many building types such as public building, commerce, culture, education & training, medical, office building and high condominium etc

Main services encompass

+ Collecting the information data on project (scale, structure, investor requirement etc.) + Collecting the input data to professional design

+ Relevant design drawings (architecture, M&E)

+ Geographical survey report of project area

+ Technologies, materials applied to structure design

+ Propose the structure solution and finalize with architecture with the best designing solution

+ Making the detail design and structure cost prediction

+ Making the detail design and M&E cost prediction

(5) Infrastructure design With the experiences and strength of projects on urban planning and development in all over Vietnam, frame structure planning is one of the key services that Sunjin Vietnam Company establish in this time with the direction

of “convenience – modern – economic” In professional term, basing on the cooperate with some famous international experts and companies, Sunjin Vietnam Company will provide the best service on infrastructure of new urban area, high tech industry zone and infrastructure for urban development in future

Major services including

+ Designing the electricity line and station 35kv or below

+ Designing the traffic and city light systems

+ Designing the water supply for urban area and living quarter

+ Designing the rain water and disposal sewer systems

+ Designing the water circling retreat system

+ Urban infrastructure system

+ Designing the excavation of transportation system

(6) Project management & inspection Basing on the experiences and strong team

of skilled experts, project management and inspection service of Sunjin Vietnam Company conducted many big famous projects all over Vietnam on fields of project procurement consultant, project management consultant and project inspection consultant Fast speed – precise – effectiveness is always an advantage of company’s consultant service

Key services consist of

- Project procurement consultant:

+ Consulting to investor on establishing the project procurement plan (type tenders chosen)

+ Consulting to investor on

+ Establishing the project procurement invitation profile, project procurement requirement of nationwide procurement type, international, EPC etc

+ Evaluating the tender’s project procurement invitation profile

+ Consulting on tender selection; consulting on project contract negotiation

- Service on input data collecting on project procurement

+ The law and regulation data on project procurement

+ Supporting on public the project procurement information

Measurement and survey: With the advantages of technology and instrument and high level – skilled experts, the service on measurement and survey of Sunjin Vietnam Company

is becoming advantage that contributes to the complex solution to project development from the beginning stage In future, basing on the expert’ skill improvement – instrument modernization – cooperating with other qualify and famous companies in the world, the service on measurement and survey of Sunjin Vietnam Company will be targeted to reach the high standard, satisfy all the client’s requirement in the modern time

Main services consist of

Topography survey:

 Defining the attitude and location of land border point following the investor data support

 Measuring on reality attitude, topography, object inside the project area

 Establishing the attitude maps on different scales

 Surveying on infrastructure systems, connection point of water supply system, waste disposal system, power supply system etc

Geographic survey:

 Establishing the requirement, platform, technical solution on geographic survey

 Geographic survey drilling, take the specimen support to define the physical and mechanical data in the laboratory

 Experimenting test on the site following the approval technical solution

 Testing the specimen support to define the physical and mechanical data in the laboratory (standard qualified laboratory following the MOC’s regulation)

 Evaluating the input data, establishing the geographic survey report

 The awarded projects of Sunjin Vietnam JVC when participating in the architectural design contests

First prize

• Ministry of Information and Communications: 18 Nguyen Du

• Headquarter of Ministry of Culture, Sports and Tourism: 53 Ngo Quyen Street

• Office of the Ministry of Culture, Sports and Tourism;

• Thai Binh Police Headquarters;

• Ho Chi Minh City Police Headquarters;

• Ha Tay Police Headquarters;

• Headquarters of the General Police Department

• Police office of Quang Ninh province

• Hung Yen Police Headquarters

• Head office of Hoa Binh Police

• Headquarter of the Ho Chi Minh City Police Department

• Hai Ba Trung Police Station

• Ba Dinh District Police Department

• House N12 National Defense Academy - Ministry of Defense

• Ba Dinh Cultural House

The second prize

• Headquarters of the Ministry of Public Security

• Detailed plan of 1/500 scale of Hanoi Children Hospital

The third prize

• Five-star hotel commercial center of Hien Duc - Tay Ho - Hanoi;

• Project of Thang Long Ford Building

3.2 Organizational structure and HRM division

 Organizational structure: Sunjin Vietnam JVC is organized and operated in accordance with the Enterprises Law 2005 The company's operation are complied with the Enterprises Law, other related laws and the company charter which governs all company’s activities Sunjin Vietnam JVC has got 9 functional units that were described in the figure 2.1 below

Figure 3.1 Organizational structure of Sunjin Vietnam JVC

Shareholders:

It is the highest authority that decides all important issues of the company in accordance with the Enterprises Law on and the Company Charter It approves the long-term investment policy in company’s growth, decides the capital structure, and elects the management and control the company’s production and business

Executive Board:

To be appointed by the Board of Management including a General Director, four Deputy General Directors, a Chief Accountant The General Director appointed by Management Board is a legal representative of the company and responsible to the by Management Board for all issues related to the company’s daily operations Deputy General Directors and Chief Accountant appointed by the by Management Board according to General Director’s proposal

- To study and propose an organizational structure, functions and tasks of units in the company appropriate to the company’s development in each period

- Planning human resource development in line with development strategy and business plan of Sunjin Vietnam JVC

- Advise to issue documents (guidelines) that help the management board to manage the recruitment, transfer, dismissal, training, emulation, reward, appraisal and compensation

- Establish and implement recruitment plans to meet the human resource requirements of the departments and center

- Advising the management board on an arranging, using employees and carrying out procedures for appointment and re-appointment company’s managers;

- Planning wage price, implement the procedures for allowances, retirees and other policies for the employees;

- Synthesize and plan labor protection and implement those plans;

- To collecting, preserving and updating the dossiers of company employees;

- Conduct other duties assigned by the Management Board in accordance with the functions of the human resources division

3.3 Research Methods

This part has presented the research philosophy and the used methods to carry out the survey that compose of designing questionnaires, selecting sample and data, analyzing data plan Data processing was conducted by software SPSS 21.0 consist of Cronbach’s Alpha confidence coefficient analysis, exploratory factor analysis and multiple linear regression analysis

3.3.1 Research approach

Research approach is defined as framework in which social phenomenon is characterized and analysed accordingly (Remeny et al., 1998) There are two major research approaches in academic studies, namely deduction and induction Like the previous section, this paragraph is developed to choose the right research approach for this study Deductive is acknowledged as common approach is academic studies (Bryman and Bell, 2007) This approach is followed by the process of starting from general things to specific context (Saunders et al., 2009) According to Anderson (2004), deductive research approach aims to investigate social phenomenon’s aspects throughout hypothesis development and hypothesis validation in order to obtain empirical evidences of social phenomenon