Factors affecting human resource management effectiveness in tan phu electricity company, vietnam masters of business administration

MEIHO UNIVERSITY Graduate Institute of Business and Management MASTERS THESIS Factors Affecting Human Resource Management Effectiveness in Tan Phu Electricity Company, Vietnam In part

MEIHO UNIVERSITY Graduate Institute of Business and Management

MASTERS THESIS

Factors Affecting Human Resource Management Effectiveness in Tan Phu

Electricity Company, Vietnam

In partial fulfillment of the requirements for the degree of

Masters of Business Administration

Advisor: Dr Kuo-Hung Tseng Co-advisor: Dr Pham Duy Hieu Graduate Student: Bui Tien Duc

December, 2010

ACKNOWLEDGMENTS

First of all, I sincerely acknowledge the help of the Board of Directors of Ho Chi Minh City University of Industry, Vietnam (HUI) and the Board of Directors of Meiho University, Taiwan (MU) for giving me the opportunity to study and research in this program

I am taking this great pleasure to sincerely express my deep gratitude and sincere thanks to Prof-Dr Kuo-Hung Tseng, Dr Pham Duy Hieu, Dr Wei-Shuo Lo, Dr Nguyen Minh Tuan who gave me the fullest support for my fulfillment of this important graduation exercise During my participation in the course, their valuable comments and remarkable advice helped me to finish the thesis

I also want to send my deepest thanks to all the professors from both universities as well as my colleagues who helped me to finish this research The thesis can be fulfilled with many helps and supports from many people and I always remember all the kindness Best wishes!

Factors Affecting Human Resource Management Effectiveness in Tan Phu Electricity Company,

Vietnam ABSTRACT

Managing human resource effectively is one of the things that all companies hope However, how to manage human resource effectively is not easy at all due to the fact that not all companies can do, especially finding out factors affecting human resource management (HRM) as well as identifying the impact degree of factors affecting HRM of the company to propose practical solutions for HRM enhancement From these above ideas and for HRM enhancement in Tan Phu Electricity Company, the researcher chose the topic “Factors Affecting Human Resource Management Effectiveness in Tan Phu Electricity Company, Vietnam” This research topic solved four targets, in particularly: (1) identifying factors that might affect HRM effectiveness in Tan Phu Electricity Company (2) identifying factors really affectingHRM effectiveness in Tan Phu Electricity Company; (3) identifying the impact degree of factors affecting HRM effectiveness in Tan Phu Electricity Company; (4) proposing solutions for HRM effectiveness enhancement in Tan Phu Electricity Company The group factors can affect the efficiency of HRM in Tan Phu Electricity Company included: (1) Planning, recruiting, training and developing human resource, (2) Regimes and policies on salaries, bonus, welfare and treatment and (3) Working environment, (4) Professional development opportunities; (5) Motivation for working; (6) Business Culture To solve these four targets, the researcher carried out basic research steps such as learning and analyzing theoretical basis; surveying ideas of managers, employees of Tan Phu Electricity Company; finding out factors affecting the effectiveness of HRM in Tan Phu Electricity Company; using software SPSS 14.0 to analyze to find out factors really affecting effectiveness of HRM in Tan Phu Electricity Company; giving out practical solutions for HRM effectiveness in Tan Phu Electricity Company and so on All of these problems will be presented in the following five chapters

Keywords: Human Resource, Human resource management, Effectiveness, Human

Resource Management Effectiveness, Tan Phu Electricity Company

Factors Affecting Human Resource Management Effectiveness in Tan Phu Electricity Company,

Vietnam Contents

ACKNOWLEDGMENTS I ABSTRACT II Contents III Tables V Figures VI

Chapter 1 Introduction 1

1.1 Research Background and Motivation 1

1.2 Research Purpose 3

1.3 Research Scope and Limitations 3

1.4 Definition of Terms 3

Chapter 2 Literature Review 5

2.1 Effective Human Resource Management 5

2.1.1 Some related concepts 5

2.1.2 Model of human resource management effectiveness 10

2.2 The Factors Identified Effective Human Resource Management 17

2.3 Factors Affecting the Effectiveness of Human Resource Management 19

2.3.1 Motivation stimulating people with effective human resource management 19

2.3.2 Business culture for effective human resource management 24

Chapter 3 Research Methodology 28

3.1 Research Framework 28

3.2 Research Process 31

3.3 Research Subject and Sample 33

3.4 Research Instrument 33

3.5 Validity and Reliability 36

3.6 Data Analysis 36

Chapter 4 Research Results and Analysis 37

4.1 Descriptive Statistics Analysis about General Information and Research Objects 37

4.1.1 Descriptive statistics analysis about gender 37

4.1.2 Descriptive statistics analysis about working position 37

4.1.3 Descriptive statistics analysis about age, education level, working time 38

4.2 Analyze to Check Hypotheses Given by Linear Regression 38

4.2.1 Test hypothesis H1 39

4.2.2 Test hypothesis H2 39

4.2.3 Test hypothesis H3 40

4.2.4 Test hypothesis H4 41

4.2.5 Test hypothesis H5 41

4.2.6 Test hypothesis H6 42

4.3 Influence Analysis of Factor Groups That Affect HRM by Linear Regression 43

4.3.1 Analysis of factor groups that affect human resource management 43

4.3.2 Analysis of factor groups that really affect HRM 44

Chapter 5 Conclusion, Discussion and Implication 46

5.1 Conclusions 46

5.2 Discussions 47

5.2.1 Building suitable Business Culture 48

5.2.2 Building a reasonable and fair system of regimes and policies on salaries, bonus, welfare and treatment 49

5.3 Implications 51

References 52

Appendix 1 – English Questionnaire 56

Appendix 2 – Vietnamese Questionnaire 59

Appendix 3 –Basis for determining sample size 62

Tables

Table 2-1 Compare Personnel Management to Human Resource Management 10

Table 2-2 Result of Surveying Importance Order of Motivation 23

Table 2-3 Differences of Human Resoure Management between Japan and the West 25

Table 2-4 Summarize Basic Factors Affecting HRM Effectiveness 26

Table 3-1 Factors Affecting HRM Effectiveness in a Company 34

Table 3-2 Reliability of the Questionnaire 36

Table 4-1 Descriptive Statistics Analysis about Gender 37

Table 4-2 Descriptive Statistics Analysis about Working Position 38

Table 4-3 Descriptive Statistics Analysis about Age, Education Level, Working Time 38

Table 4-4 Model Summaries 39

Table 4-5 ANOVA(b) 39

Table 4-6 Model Summaries 40

Table 4-7 ANOVA(b) 40

Table 4-8 Model Summaries 40

Table 4-9 ANOVA(b) 40

Table 4-10 Model Summaries 41

Table 4-11 ANOVA(b) 41

Table 4-12 Model Summaries 42

Table 4-13 ANOVA(b) 42

Table 4-14 Model Summaries 42

Table 4-15 ANOVA(b) 43

Table 4-16 Model Summaries 43

Table 4-17 ANOVA(b) 44

Table 4-18 Coefficients (a) 45

Figures

Figure 1-1 The Organization Chart of Tan Phu Electricity Company 2 Figure 2-1 Human Resource Management Model of Vietnam 12 Figure 2-2 Fornbrum Model 13

Factors Affecting Human Resource

Management Effectiveness in Tan Phu

Electricity Company, Vietnam

Chapter 1 Introduction

This chapter includes four sections: (1) research background and motivation, (2) research purpose, (3) research scope and limitations, and (4) definition of terms

1.1 Research Background and Motivation

Electricity Branch is one of the most important industries in Viet Nam There are several reasons for this First, Electricity Branch has played an important role in the cause

of socio-economic development, such as the contribution to hunger eradication and poverty reduction Second, Electricity Branch has increased the process of industrialization and modernization of Viet Nam In addition, Electricity Branch has ensured national defense and security Hence, the business of the Power branch is also regarded as the artery of the economy in Viet Nam

On 22nd June 2006, Vietnam Electricity Branch officially shifted to a new stage of development with the approval of the pilot project that is forming Vietnam Electricity into a multi-sectors of modern industries with modern technology and management The members of the group include construction investment, production and trading electricity, public telecommunication, finance, banking, in which electro mechanics is the major business Vietnam Electricity has three main sections: electricity production, electricity transmission, and electricity distribution

Tan Phu Electricity Company (Tan Phu Electricity as the former name) is one of the unit manufacturing and trading electricity, trading telecommunication directly under Ho Chi Minh City Power Corporation (a member of Viet Nam Electricity), Tan Phu Electricity Company was established on 01/07/1983, head office address is at: 42B Tran Hung Dao, Tan Son Nhi Ward, Tan Phu District, Ho Chi Minh City Tan Phu Electricity Company has 552 employees, including 141 female (rate of 25.5%) and 411 male (rate of 74.5%), and the organization consists of 12 Departments (Source: Personnel Department, 2010)

Figure 1-1 The Organization Chart of Tan Phu Electricity Company

(Source: Department of Personnel, 2010)

Therefore, the Electricity Branch in general is under going an important change Tan Phu Electricity Company, a branch unit, is required to response to such changes The purpose of changes is to deal with the following issues: sufficient electricity power for consumption, taking part in production and business of multi-sector, and the increase of the enterprise value How the human resources is coping with such changes All of the sections that need to cope with the changes, the improvement of human resources is essential For Tan Phu Electricity Company, the issue of human resources administration

is the most important things that need to take care of because of the reasons: (1) management of human resources in Tan Phu Electricity Company is currently only the management of personnel, the company is facing identifying factors affecting human resource management effectiveness, therefore solutions given by the company for effectiveness enhancement are not efficient as expected; and (2) to meet demands of economic integration in new context, there need to be basic changes, modern human resource management approaches

Form these above issues, the researcher chose the topic “Factors Affecting Human Resource Management Effectiveness in Tan Phu Electricity Company, Vietnam”

Director

Vice Business Director Vice Engineering

Director

Dept of Planning

Dept of Administration Dept of

Personnel

Dept of Fee

Collecting

Dept of Telecommu

- nication

Dept of Electricity meters management

Dept of Engineering

Dept of Electricity Operation

Dept of Grid Electricity Management

Dept of Finance - Accounting

Dept of Project Management Dept of

Sales

1.2 Research Purpose

This study aims to find out the factors affecting human resource management effectiveness in Tan Phu Electricity Company According to research purpose, several research objectives developed are:

Objective 1: Determine factors that might affect human resource management effectiveness in Tan Phu Electricity Company

Objective 2: Determine factors surely affecting human resource management effectiveness in Tan Phu Electricity Company

Objective 3: Determine the impact degree of factors on human resource management effectiveness in Tan Phu Electricity Company

Objective 4: Propose solutions for human resource management effectiveness enhancement in Tan Phu Electricity Company

The proposed research questions are:

Question 1: Which factors might affect human resource management effectiveness in Tan Phu Electricity Company?

Question 2: Which factors surely affect human resource management effectiveness

in Tan Phu Electricity Company?

Question 3: How is the impact degree of factors on human resource management effectiveness in Tan Phu Electricity Company?

Question 4: What are solutions for human resource management effectiveness enhancement in Tan Phu Electricity Company?

1.3 Research Scope and Limitations

Research scope of this topic is in an organization, specifically in Tan Phu Electricity Company which operates in manufacture and trade in the territory of Tan Phu District of

Ho Chi Minh City, Viet Nam Due to human resources limitations, in the process of researching, the researcher only surveyed the effect of human resource management through objects as managers and employees working in Tan Phu Electricity Company without surveying the other objects outside the Company

1.4 Definition of Terms

Human resources: According to Begg, Fischer & Dornbusch (1995), Human

resources is what human beings have accumulated in the process of working both in the

past and at the present, such as qualification, experiences and so on, and it is this which brings human beings achievement in the future, exactly income increase for them

Human resource management: Human resource management is defined as systems

of philosophies, policies and relevant activities on attraction, training, development and keeping the human elements in one organization to achieve the optimal result for both organization and its employees (Tran, 2006)

Effectiveness: According to Lexicography Center (1997) then effect is the result that

work required brings

Human Resource Management Effectiveness: human resource management

effectiveness is considered as the result that organization gets through human resource management (Nguyen, 2003)

Tan Phu Electricity Company: Tan Phu Electricity Company (the former name is

Tan Phu Electricity) is one of the units manufacturing and trading electricity and telecommunication directly under Ho Chi Minh City Power Corporation, the company was established on 01/07/1983, the Head office located at #42B Tran Hung Dao St, Tan Son Nhi Ward, Tan Phu District, Ho Chi Minh City, Vietnam

Chapter 2 Literature Review

For the goal of this research, researcher has studied the theoretical basis related to the effectiveness of human resource management and give some viewpoints, opinions as follows This chapter includes: (1) effective human resource management, (2) the factors identifying effective human resource management, and (3) factors affecting effective human resource management

2.1 Effective Human Resource Management

2.1.1 Some related concepts

The concepts that are discussed in this part includes the concept of human resources

in general, the concept of human resources development, the concept of human resource management And the differences between the concept of staff management and the concept of human resource management were also mentioned

Human resources Though there are many concepts of human resources, in my

opinion , the following concepts are appropriate with this research According to Begg, Fischer & Dornbusch (1995) human resources are what people have accumulated from working process in the past as well as in the present, such as qualifications, experiences and this helps people get accomplishments in the future, specifically it helps their income get an increased However, this concept has some limits such as it does not show exactly objects of human resources and range space of human resources The following concepts

of human resources will show more about these issues According to Nguyen & Nguyen (2007), Human resources of an organization includes all employees who work in that organization And manpower is all strength of each person, manpower which includes both physical and mental power This interpretation is clearly about object of human resources, but the range space of human resources is relatively limited Author Pham (2001) contends that human resources is the overall of labor potentialities of a country or

a local, skilled workforce, ready to participate in a particular job, human resources must meet the requirements of labor restructuring, the economic restructuring towards industrialization and modernization This author emphasized the human resources must meet two requirements that are labor restructuring and economic restructuring, it is not just the workforce in an organization

Another way, according to author Duong (2009), the human resources is the sum of the manpower, the existing and potential strength of people, but firstly the labors are ready to participate in the process of economic and social development of country These are workers with high intelligence, skill proficiency, good quality, trained, improved and promoted by an advanced and modern education human resources consists of three basic factors: quantity, quality and structure In this interpretation, the number of human resources is the total number of employees being trained and willingly participates in the process of economic and social development It is defined by population size The quality of human resources is the sum of the qualities and capabilities, the strength of the employees who are or are willing to show in practical economic and social development It includes the basic elements: physicality, intellect, moral, capacities and aestheticism of workers In which intellect, moral and capabilities are the most significant factors Human resources structure is defined primarily by the labor training structure and economic structure It is a certain percentage of labors who have been trained Economic structure, which defines labor structure which is working in the economy-sociality, is distributed in the main fields of the economy This is quite specifically understood that the human resources consists of three basic factors: quantity, quality and structure

Author Nguyen (2003) emphasizes the active status of human resources, according

to the authors, when we consider human resources as potential to orient human resources development through policies, education and training However, to make the human resources actually bring the effectiveness to the society, we have to switch the human resources from potentiality to activeness, it means that we need to liberate all potentialities of human to help people truly express and develop their potentials by policies and solutions thoroughly The interpretation of author Nguyen (2003) has good practical applications, the author focuses on releasing all human potential by specific measures to promote maximum capacity of human beings

However, in researcher’s opinion, the concept of human resources has many different interpretations, which depends on the spatial extent and circumstances After considering all the concepts of human resources of the authors are mentioned above and considering the scope of research is at a company in Viet Nam, one of developing countries, the researcher understands human resources as follows: human resources is sum of potential capacities or current strength of labors in an organization, a local or a

Human Resources Development Human resources development is understood by

many authors in many different ways, such as human resources development is basically increasing human values as ethics, wisdom, skills, professional skills, spirit, physicality, etc., to make people become capable, quality workers to meet the requirements for the development of economy, society, for the industrialization, modernization of the country (Pham, 1996) According to the researcher of this topic, the concept is quite narrow due to the fact that the above concept emphasizes the development of human resources in human values increase in the meanwhile the author puts this concept in the background the countries are developing, are applying the country industrialization and modernization like Viet Nam Two other authors Nadler & Nadler (1990) have different understandings with author Pham (1996), they all believe that human resources development is to increase the experiences that people can learn in a determined time The goal is to increase capacities of labor in work, such as improving professional skills, work skills Therefore, in my opinion, two authors have emphasized the development of human resources is to increase experiences, opportunities, capacities of workers

Two authors Nguyen & Nguyen (2007) have a relatively clear understanding of human resources development, that human resources development is the overall activities

of organized study that was carried out in approximately certain time to make a change of the behavior of workers In this interpretation, the human resources development is all the learning activities that are organized by company providing employees Activities that might be provided in a short term or long term depend on the training goal to increase their capacities and qualification Also, according to these two authors, human resources development consists of three types of activities: education, training and development (1) Education: to be understood as the learning activities to prepare for people who get jobs

or switch to a new job preferable in the future; (2) training: the learning activities to help employees do their functions and duties more effectively It is a learning process for employees to understand more about their work, to improve the level, skills of workers to work more efficiently (3) development: is learning activities beyond the current work of employees, to open their new work based on the future direction of the organization Through studying the interpretations of authors, in my own interpretation, then human resources development is activities to increase the working capacities of employees at the present and in the future by education, training and development

Human resource management There are currently many concepts of human

resource management in the world Two authors, Werther & David (1996), have simple

understanding about human resource management, the authors suggest that human resource management is trying to create favorable conditions for people in the organization to accomplish plans and objectives of the organization, increase the dedication, the effort of people in the organization in the way suitable with organization’s plans According to author Tran (2009), human resource management is understood as a philosophy system, policies and function activities about attracting, training - developing and maintaining an organization's employees to achieve optimal results for both organization and employees Exactly it makes sure that organization has enough workers, recruits employees appropriate with features of each type of work, guides workers to integrate into the organization, orients for workers

Two authors Nguyen & Nguyen (2007) also have similar understandings with author Tran (2009), but more specifically, the authors suggests that human resource management includes planning, organizing, directing and controlling activities to attract, use, and develop human values to reach the objectives of the organization Understanding deeply about human resource management, the authors Nguyen & Nguyen (2007) believe that human resource management is the recruitment, selection, maintenance, development, use, encouragement and convenience provision for employees through its institution Two authors also divide the major activities of human resource management into three major groups as follows: (1) group of human resources attraction: including activities to ensure that organization has enough staffs about quantity as well as quality Organization must: have human resources planning, analyze, design work, set regular members of company, recruitment, selection, workers (2) group of human resources training and development: this group focuses on activities to improve the capacity of staffs, ensuring that employees

in the organization have the skills, a needed level of craftsmanship to complete the assigned work and give conditions for staff to develop maximum capacity Besides new training activities, there are activities retraining workers when there are changes in business or technical processes, new technologies, (3) group of human resources maintenance: This group focuses on the maintenance and uses effectively human resources in the organization It includes three activities: evaluate work and remuneration for employees, maintain and develop good relationships in company This interpretation

of the two authors Nguyen & Nguyen (2007) about Human resource management is specific, deep understanding of human resource management, so I used the interpretations

of these authors for this research

The differences between personnel management and human resource management Overall the world today, there are three different points of view on the

relationship between Personnel management and Human resource management The first point is that Human resource management is used merely to replace the old concept of Personnel management This point emphasizes the scope and the object of Human management in the enterprises Although call Personnel management or Human resource management, the management of people in an organization, enterprises in the modern world is no longer merely a kind of administration staff as before Personnel management named a new call because of the improvement by itself to match the new business environment Represent this school there are French W., Dessler G., … This point is not consistent with the actual needs because they have not clarified the objectives of Human resource management and the key role of human factors in organizations If there is only emphasis on the scope and the subject of research, it’s not necessary to change the name

of Personnel management (Nguyen & Nguyen, 2007)

The second point is that Human resource management is completely different from Personnel management Human resource management is one new point of view, one new philosophy and work out a new method, a new approach for management This point emphasizes the importance of human resources within an organization, emphasizes the new management method through the coordination of human administrative functions with strategy administration of enterprise and emphasizes the need to use fully, better the resources of an organization (the differences between Human resource management and Personnel management are presented in Figure 2-1) The typical school of this is the team

of Michigan State University, Harvard Business School, University of Stuttgart, the researchers such as: Staehle, Pierper, Guest, Walton, Carrel, Elbert, Hafield, Blyton, Turbull, M Foot, C Hook, Mabey and Graeme,…For the developed countries with both high qualifications of leaders and staffs, the workers have higher living standards and demand, with industrial working style, good discipline, high self-consciousness,… will have conditions to perform Human resource management in this way In addition, in the world since the 1990s onwards, when the leading competitive advantages of enterprises are the quality of management and of human resources, the enterprises need to apply new point of view, new method of people administration to enhance competitiveness (Tran, 2005)

The third point is that Human resource management is not the revolution, it’s the next stage of development, expansion or further up the perfection of Personnel

management According to this school there are Legge, Cherrington, Torrington and Hall,

Wayne, Noe, etc., This is considered a neutral point of two points of view above, it

emphasizes the role of human factors in enterprises, emphasizes the need to improve the

personnel management works but not strict requirements or operating conditions at a high

professional level consistent with the requirements and conditions of developing countries

(Nguyen, 2003)

Through three different points of view on the relationship between Personnel

management and Human resource management, the person who studied this topic can

draw out conclusion that the concept and practical application of Human resource

management will not be the same in different countries Research Human resource

management help managers achieve purposes, results through others An administrator

can make the complete plan and build the clear organization chart, and has one modern

and accurate system examination, but can still fail if not recruit right people for the right

job or do not know how to encourage employees to work To manage human resources

effectively, Managers need to know how to recruit, arrange, use and encourage others to

achieve organizational goals

Table 2-1 Compare Personnel Management to Human Resource Management

Personnel management Human resource management Nature characteristics Action according to order Undertake

Psychology context Getting welfare depends on

work done

Mutual undertake

Laborer relation Multi-polarity Unification

Management targets Adaptive labor force Standards implementation Frequent work improvement

(Source: Tran, 2005)

2.1.2 Model of human resource management effectiveness

Model of Human resource management is diverse and abundant Currently the world

has many different models; each model has focused on some specific elements in order to

maximize the capacity of people and effective management of human resources for the organization Each model has strengths and weaknesses Here are some models of human resource management in Vietnam and in the world Before going into analysis of model

of human resource management related to the effective management of human resources,

we need to find out what model is Here are some ways to understand the model, according to Vietnamese Dictionary (1998), the model is understood in the strict sense refers to the concept of miniature models of large objects Model broad sense also typifies the relationship, the most important characteristic essence of things and phenomenon, of the processes in nature and in social life (Encyclopedia, 2002) In understood way of the person who studied this topic, the model is a form for nature and the most characteristic nature of the relationship of things, certain phenomena in nature and in social life

Thus, when talk about model; it refers to the relationship, so a model should have the elements that make up this relationship Morgan (1986) made several organizational models for typical relationship of the elements, and he also classified the organizations with metaphors such as: the organization as a living body, to press the structure of open system; the organization as a system of self-regulation, to press the flexibility of the system; the organization as a machine, to emphasize the precision and discipline of an organization; the organization as a politic system, to press the complex relationship, there

is always competition for rights and power; the organization as a culture, to emphasize the organizational values Here, the person who studied this topic will go into detailed analysis of some models of human resource management typical of Vietnam and the world to find out the factors affecting the effectiveness of human resource management works, as well as analyzing the relationship of these factors

2.1.2.1 Model of human resource management in Vietnam

According to Tran author (2009), the model of human resource management in Vietnam was developed on the basic of adjustment model of human resource management of Michigan State University in conditions of Vietnam based on the following ideas: (1) human resource management will be implemented as a strategic function; (2) three function groups: attracting, training-development and maintaining human resource equally important, close relationship and directly influence each other, serve the objectives of human resource management; (3) the commanding factor in this model is the mission objectives of the enterprise From this mission, there are the objectives of human resource management From the goal of human resource

management there are the corresponding function actions; (4) system of Human resource management have close relationship, sync with the culture and mechanism of organization, and strongly influenced by macro-environmental factors such as political system, law, socio-economic development level, technological and technical level, natural conditions Especially since the mechanism of business and national culture in general, every enterprise will have organizational mechanism and organizational culture, interaction and collaboration with human resource management to create image and style

of their own enterprise (model of Human resource management in Vietnam is presented

Human Resource Manageme nt

Organization Mechanism

Mission, Targets

of Company

Cultural

Organization

Human Resource Attraction

Target’s Human Resource Management

Training, Developing Human Resource

Human Resource Maintenance

Economy, Society

Politics,

Law

Technology, Nature

Human Resource Management and Factors Human Resource Management and Factors

operating across the relationship, not a command relationship Each of the three groups of human resource function is closely related and directly affected two other functions, forming a bond closed stirrups, serve the objectives of human resource management According to the researcher of this topic, the model of human resource management has stated above is quite suitable for Vietnamese enterprises to apply

2.1.2.2 Some models of human resource management according to the

elements of the process of human resource management

In the world, there are many models of human resource management according to the elements of the process of human resource management the following are some typical models

Figure 2-2 Fornbrum Model

(Source: Fombrun, Ticky & Devanna, 1984)

Fornbrum model

Fombrun, Ticky and Devanna (1984) provided strong relationships between the five elements in the operation of human resource management are: recruitment, assessment, development, reward and job performance, the five elements has impact also on effective

of human resource management (particularly of these factors is the selection of persons suitable to the essence of each type of work, improving skills, work skills for staffs, etc., ) Fombrun model presented in Figure 2-2 showing the impact of these factor groups are selection, human resource development and reward on the job done, then the performance

of this work will be assessed to review the effectiveness of the management of human resources According to the researcher of this topic, the strengths of this model are the close association of the components inside The weakness of this model is only given the

Selection

Work Execution

Human resources development

Evaluation

Bonus

four factors that impact human resource management, not only the welfare of joint elements, the situation factors, as well as the impact of the weak external operational on human resource management

Bratton and Gold model

Bratton and God (1999) see human resource management as a process of many stages such as: planning, recruitment, assessment, treatment, development, communication and participation Specific processes are: planning the appropriate number of personnel, recruitment of person corresponding with each job, guiding the staff integration organization, career direction, improved skills, work skills for staffs, etc., If the process of human resource management is good, it will help improve the effectiveness

of human resource management for organization According to the researcher of this topic, the strengths of this model is not considering the impact on individual elements to the management of human resources, but consider elements such as the stages in the process, the thing reasonable adjustment in each stage will have good effects to outputs The weakness of this model does not show the interests of all parties concerned, the situation factor, output and effectiveness of specific processes yet

Harvard model

Hendry and Pettigrew (1990) provided the model of human resource management consists of five elements are: the situation factors, the parties to jointly benefit, policy options for human resource management, human output, effectiveness of human resource management and long-term feedback loop from performance information output to the inputs (Figure 2.3) Harvard model what is presented in Figure 2-3 shows the impact of such factors as: the welfare of solidarity, the situation factors, the policy choices of human resource management, human resource output to effective management of human resource and vice versa effective human resource management will also have the corresponding impact of these factors According to the researcher of this topic, the strengths of this model indicates clearly the benefit of the parties jointly, situation factors, the choice of policies, outputs and effectiveness of human resource management Showing clearly this elements help to apply this model to life with many advantages The weakness of this model does not show clearly that much the specific internal element, the

external factors affecting the human resource management

Figure 2-3 Harvard Model

(Source: Hendry & Pettigrew, 1990)

Warwick model

Hendry and Pettigrew (1990) have extended the model of Harvard to Warwick model, which includes five components: (1) the internal context, including: culture, structure, leadership tasks, output of work; (2) the external context, including: economic, political, law, technical competition; (3) the context of human resource management, including: role, concept, organization, output of human resource; (4) the operational strategies content, including: goal, market, strategy, tactics; (5) human resource management content, including: the flow of human resources, working system, reward system, labor relations According to the researcher of this topic, this model has many strength as: indicated factors internal and external factors affecting human resource management, as well as specifying the content of human resource management The weakness of this model is not show how the interaction of factors is of internal and external factors to effective human resource management In point of view of researcher

of this topic, when research human resource management model, we can use Bratton and Gold model because this model has the advantage of viewing these elements as the stages

in the process, a reasonable adjustment in each stage will have good effects to outputs, specifically the effective human resource management

Welfare of associated parties:

laborer, managers,

government, community, union

Context factors:

workforce, business

strategy, management condition, law, market, technology,

values

Policies choice:

effect of laborer, human resources displacement, bonus system, work system

Output human resources:

undertake, capacity, reconcilement, expense effect

Long-term human resource management: individual development, result of organization, society development

2.1.2.3 Models of HR management according to the property of relationships in

the organization and the role of human factors in the organization

This type of model is widely used around the world, different model of human resource management according to the elements; it emphasizes the roles and relationships

of people in the organization Here are some typical models of human resource management

Administrative model (Morgan, 1986)

Weber is the author of this model, Weber viewed the organization as a machine, so

he emphasized the accuracy, speed, clarification, frequency, reliability, and efficient human resource management achieved through the setting of tasks, hierarchical supervision, the rules and regulations for details Weber distinguished between power, ability to follow others and authority where orders are accepted voluntarily by the recipient of the command In personnel management, the appointment, transfer, assignment and employment, preferential treatment, etc., are according to the administrative regulations The administrative model is applied in the organization of administrative, civil, military and some traditional industries According to the researcher

of this topic, this model has basic characteristics such as: arrange the parts in the organization tightly, hierarchical order, exchange of information; the expression of superior power to lower; the adjustment of human relationships in the organization through policies, regulations and rules closely

Colleagues model (Clark, 1983)

This model emphasizes that the collective, consensus, democratic nomination, promotion or when make plans in the work of an organization, the appointment or promotion for someone in the organization is by the members of that organizations to decide, without the imposition of superior authority In working management, the group has right to decide This model is often used in professional organization, the scholars, the academics According to the researcher of this topic, the strengths of this model is highly collective, consensus and self-awareness of man in the organization, allowing for human resource management developed actually effective and highly compliant nature The weakness of this model is the limited scope of application, this model is only really effective in professional organizations, in academia, this model will hardly be effective in

Open System (Thomas Peters and Robert Waterman, 2003)

Open System emphasizes the discovery needs if individuals and organizations from which to devise innovative measures and orientations to meet such needs in a flexible and dynamic This model also mentioned the importance of environmental relevance, links between parts of the organization, and adaptation of systems and environments According to the researcher of this topic, the features of this model are dynamic, flexible organization and helped organize early to adapt to new circumstances

2.2 The Factors Identified Effective Human Resource Management

Nguyen Author (2003) divides effective human resource management into three types: effective input, effective process and effective output The factors affecting the effectiveness of input can be: the policies and mechanism and the macro and micro human resources, mission and objectives of the organization as well as the production conditions, business The factors affecting the process of human resource management, including elements related to the formation, use and development of human resources The output effectiveness can be personal satisfaction, labor productivity, income, personal growth, revenue, operating profit organization, the unity, the cultural environment of organization, etc

The author also said that human resource management can be identified through the following factors: (1) economic effectiveness and social effectiveness (economic effectiveness reflected in the contribution of human resources on economic goals of the organization Specific economic performance reflected in the increase of labor productivity; social effects at the micro scale of the organization reflected in the general environment of organization culture, living standard, the general level of participation contributions of members in the activities of the organization); (2) effectiveness in their management (the overall effectiveness of human resource management represents a contribution to the business activities and the development of the organization, most specifically reflected in the quality, level of profitability and achieve the effectiveness of each section, each stage, each content of the entire process of human resource management, expressed through the achievement of the objectives of each section, each stage, content of each function in human resource management); (3) the individual performance of workers (effective for individual employees in the organization reflected

in the increased capability and capacity of workers and increase job skills, professional

qualifications, understanding; job performance such as increased labor productivity, motivation, positive attitude and level of personal satisfaction (as satisfaction: salary, working conditions, the policies, culture, current job etc…), living standard, safety of life stability increases); (4) effective for the customer (effective for customer expressed satisfaction at the level of customer demand, the market is dominated by market institutions) Effective process human resource management is Nguyen author (2003) presented in Figure 2-4, which, from the inputs of human resource management will affect the formation of elements such as mission and objectives, organizational conditions, system organization, policy mechanism These factors have formed the impact of human resources, the use and development of human resources From now on efficient management of human resources are divided into: personal effectiveness, organizational effectiveness and effectiveness of the customer The effectiveness of these three factors will make the overall effectiveness of the process of human resource management Stemming from the theoretical basics, the topic is focused on using elements of personal satisfaction to identify effective human resource management

Figure 2-4 Effectiveness of Human Resource Management Process

(Source: Nguyen, 2003)

Effectiveness of human resource management process

Organization system

- Regimes, macro-policy and organization levels of resources

- Mission, targets, development aims

- Condition of production/

Human resources use

Human resources development

Individual effect

Organization effect

Customer’

s effect

Human resource manag-ement effect

2.3 Factors Affecting the Effectiveness of Human Resource Management

The identification of factors affecting the effectiveness of human resource management is extremely important for management of human resources in an enterprise According to Robbins and Stuart-Kotze (1994), the process of human resource management is influenced by three types of environment: air culture of the organization (organization’s culture); overall environment (general environment) (including economic environment, politics, society, science and technology) and environmental characteristics (specific environment) (including suppliers, customers, competitors, agencies, departments and pressure groups) But according to Bartol and Martin (1994), the process

of human resource management is affected by two types of environment: the external environment and internal environment (external environment includes factors such as economy and population number, law, etc…, the internal environment such as the air culture of the organization, working conditions for employees, the policies, salary, etc…) Nguyen author (2006) also suggests that the process of human resource management is affected by two types of environment: external environment (or external factors) and internal environment (or internal factors) External environment includes factors such as economic landscape, population and labor force in society, the state’s law, culture and society, competition, science and technology, customer, and the government and unions Internal environment includes the mission and goals of the company, policies and strategies of the company, the culture atmosphere of the company, its shareholders and then to a union In the limited scope of this topic, the researcher focused understanding and analysis of factors affecting the effectiveness of human resource management Here, the researcher will analyze in detail this factors affecting

2.3.1 Motivation stimulating people with effective human resource

Theory of hierarchical needs (Nguyen, 2006)

In 1954, in the Motivation and Personality of Abraham H Maslow author theorized that human needs to appear in hierarchy from low to high: physiological needs, safety needs, needs social, needs to be respected, the need for self-express themselves Once the lower needs are satisfied, the higher demand will occur, and consequently they do not have to meet further low demand So, according to Maslow, to motivate employees, managers need to understand where employees are in the hierarchy and focus on the satisfaction level of needs, such as needs on wages, entertainment, good equipment for working, been treated well, get promoted in their careers etc… However, critics disagree with this theory too They said that not everyone needs to have enough years on Those with low status in society or in company, often have low demand stronger Those with high status often want to satisfy higher demands than low demands

Theory X and theory Y (Reinecke & Schoell, 1988)

Mc Gregor presented theory X and theory Y in 1960 He said there are two types of managers By theory X managers believe that workers need stronger at lower levels They say the average person: they did not like the job; they are lazy, irresponsible and selfish, like peace itself and indifferent to the needs of agencies and organization; to elude authority responsibilities Due to effective management executives need to: force, intimidation, control, and guidance for workers through close supervision Conversely the managers in theory Y say that employees need more powerful at high level They said that an average person is capable of: more and more interested in this work, sticking them with work to achieve the goals of agencies and organizations, working with the productivity level control and threatening punishment to a minimum This theory has a more optimistic view of human behavior, its emphasis on autonomy, self-discipline, honesty of man For better management, managers use the rewards to stimulate and encourage people to create conditions to promote their autonomy, self-awareness of it self The threat, punish employees at a minimum According to researcher of this topic, the theory X and theory Y are not very convincing, because in every human being has always existed in their good and bad sides, so depending on each situation and the particular object that managers choose the most appropriate management

Two-factor theory of Herzberg Frederic (Nguyen, 2006)

Two-factor theory is also known as theoretical elements and factors encouraging healthy (The Motivation-Hygiene Theory) by psychologist Frederic Herzberg proposed in

1959 He said that there are factors that people will not be dissatisfied, but without it, people will be dissatisfied, that’s just unhealthy elements (hygiene factors) or maintaining factors (Maintenance factors) alone But the factors that he said that it will stimulate people to work more energetically, it is these factors really motivate (motivational factors) Hygiene factors include the following elements: the company’s policies and governance of the company wages and welfare, the quality of the inspection; relationships with colleagues; safety, easiness of work; status, personal life, working conditions Factors that encourage (motivational factors) include the following elements: feeling the job done; job requires striving; the work itself; career prospects, the liability; superior opportunity to get know According to the researcher of this topic, the hygiene elements is that two-factor theory given sometimes are the encouraging factors (such as higher wages may also stimulate people to work hard rather than low wage), so managers need to consider these factors carefully in each case and particular circumstances

Positive reinforcement theory (Nguyen & Nguyen, 2007)

This theory is based on the work of B.F.Skinner aimed at changing human behavior through enhancing effects According to this theory, behavior rewarded will tend to be repeated, while behavior is not rewarded (or penalized) will not tend to be repeated Theory is the concept that the penalty has effect to eliminate unwanted behavior of managers, but may cause negative consequences, thus giving less effective than reward

To motivate workers, managers need to consider the good performance and rewards for achievement The emphasis of the awards will take the form of higher effectiveness than emphasizing penalties

Expectation Theory (Nguyen & Nguyen, 2007)

Victor Vroom author emphasizes the relationship of perception: what do people expect? According to the theory, motivation is a function of individual expectations that

an effort will certainly bring a certain achievement, and achievement that will lead to the results or rewards desired, make themselves happy This theory suggests that managers need to make the employees understand the direct relationship between effort-performance, performance-outcome (reward) as well as make the attractiveness of the

results (reward) for the employees, and their satisfaction when they are paid the salary, bonus etc.,

Fairness Theory (Nguyen & Nguyen, 2007)

J Stacy Adams addressed the knowledge of workers aware of the level to be treated fairly and properly in the organization Basic hypothesis of the theory is that everyone wants to be treated fairly; the individual in an organization tends to compare their contributions and the welfare they receive with the contributions and the welfare of others The employees will feel treated fairly Therefore, to motivate, managers need to create and maintain a balance between individual contributions and the welfare that such individuals be rewarded

Theory of motivation of David Mc Clellend (Nguyen, 1998)

This theory identified three people have basic needs: need for an achievement, need for alliances and power needs People with high achievement needs always overcome the difficulties and challenges in the efforts of themselves; they always pursue the work until the job is better They prefer jobs that require challenge and high responsibility, but they also have a high demand on the feedback specifically and quickly from the administrator For administrator, they need stimulate and encourage to motivate them to work hard People wishing coalition will get better relations and cooperation with colleagues at work; they like to make a friendly relationship in work Managers need to facilitate teamwork, group work instead of working individually People wish to enjoy the power to control and influence the others These people tend to become leaders, so administrator need to consider their needs in order to arrange a suitable job also According to the researcher of this topic, the leaders should apply the theory of motivation of David Mc Clellend to consider the needs of their employees under the category, then arrange for appropriate job

or use incentives to motivate them to work better

Target theory (Nguyen & Nguyen, 2007)

In the late 1960s, the researcher of Edwin Locke showed that: the specific objectives and challenges will lead to better job performance Theory suggests that intentions to work toward the goal of primary origin of the labor force Thus in order to motivate workers, there needs to have specific goals and challenging as well as the need to attract

Working motivation of employees

Paul Hersey and Ken Blanc Hard (1995) gave the results of research conducted

through research, survey the majority of workers and supervisors in the United States

industry about the question: “What does the staff really want from their work?” and the

results showing the importance order of these norms reflect the wishes of the workers

from the job as follows: (in which (1): most important; (10): least important)

Table 2-2 Result of Surveying Importance Order of Motivation

(Source: Paul, H., & Ken, B H, 1995)

The survey results are: supervisor for that high wages, security of employment,

prospects and good working conditions is what workers want most from their work In

contrast, workers said what they want is a full assessment of what they have done, all

things made sense and sympathy with the personal issues The result of this research

showed that workers do not merely wish to satisfy the basic needs of human beings, but

they also need to demand higher Research results also demonstrated that the desire of

workers for the promotion and development with the company about a job is growing

interesting The supervisors have not seen it, so when the proposed measures to stimulate

the workers they will likely suffer from the mistakes Research results of Paul Hersey and

Ken Blanc Hard enables managers to see that to understand the real needs of employees,

managers must understand the fact, especially through employee surveys, not based on

personal experiences of the self From understanding the needs of employees, new

managers come up with policies and measures to encourage and stimulate most

appropriately

In summary, through the theory of human motivation which has stimulated above,

the researcher of this topic found that there are many factors driving force to stimulate

people to work better Thus, depending on the objects and circumstances that leaders will have the choice to apply stimulating factor dynamics best

2.3.2 Business culture for effective human resource management

To understand how the organizational culture affects effective human resource management, firstly we need to find out: culture in general and what is corporate culture? Vietnamese Dictionary (1998) defined culture as a whole the overall value of the material and spiritual man created in the course of history Linda Smircich author (1983) said that the culture is only about a system or value shared meaning In every organization, there are systems or patterns (patterns) of the values, symbols, rituals, myths (Myths), and practice, all developed over time But corporate culture is both of Dinh & Khanh authors (2007) considered all of the cultural values built during the existence and development of enterprises, become the values, concepts and practices, rooted in traditional activities of the enterprise; dominant emotions, thoughts and behavior of all members of the enterprise makes a distinction between the enterprise and is considered the traditional every own enterprise Arthur Sharplin author (1985) defines corporate culture as a system of values, beliefs, and practices shared within an organization, the impact on the formal structure created behavioral norms (behavioral norms) According the researcher of this topic, the corporate culture is a system of values and spiritual material which had eaten deep into the mind of every member of the enterprise and had govern the behavior of each person Theory Z (Translation document, 1986) by William Ouchi in 1981 mentioned about corporate culture issues as follows: he criticized the West for appreciating the techniques and technologies that disregard human relationships organizations, this is completely different from the management of Japanese enterprises which emphasized spiritual elements, relationships and collective values in the organization Theory Z has presented the role of a culture Z model for rapid growth and solid business Ouchi said that corporate culture is a set of symbols, rituals and myths communicated to allow people in the organization of values and beliefs internally Symbols, rituals that will concretize abstract ideas which make affect the employee The nucleus of a culture is its business philosophy That’s the system of meaningful values in very practically orientation The Z type culture is outlined by Ouchi including contents: along-term attachment of employees

to the company in which all employees have the rights to express honesty and rights to review, employees are involved in management; employees create cooperation, teamwork

and develop relations of mutual trust Thus, when referring to enterprise culture, theory Z emphasizes that managers need to respect and treat people well

Table 2-3 Differences of Human Resoure Management between Japan and the West

Japanese enterprise Western enterprise

- Work all the life

Thus, according the researcher of this topic, in the process of human resource management, the leaders need to determine the type of his business culture, because the determination of this affect the completion of work of the organization, and consequently affect employees’ satisfaction, as well as affect the profitability of the company In summary, enterprise culture is an integral part of the process of human resource management Therefore, determining the type culture of enterprise and the content of enterprise culture will contribute significantly to effective human resource management From the theoretical basics presented above, the researcher of this topic was drawn six basic groups of factors affecting the effectiveness of human resource management in the organization (group of independent variables – group 1-6) and a group of factors to identify effective human resource management (dependent variable groups – group 7) The element groups are presented in Figure 2-4

Table 2-4 Summarize Basic Factors Affecting HRM Effectiveness

Suitable number of personnel Recruit right person for the right work Instruct integration into enterprise Enhance workmanship, work skills

1- Planning,

recruitment,

training, human

resources

development Orient career

Bratton & Gold, J (1999); Fombrum, Tichy, & Devanna (1984); Nadler &

Nadler (1990);

Nguyen & Nguyen (2007); Tran (2009); Pham (1996) Appropriate salary

Fair treatment Get chance to play, entertain Suitable welfare

Good work equipment Full information Good co-operation among colleagues Trust and respect among colleagues

Nguyen (2007) Fair treatment

Interesting work Full evaluation for work done Timely evaluation for achievements

Satisfaction from business philosophy Get chance to show honesty