The effectiveness of hrm in an import export joint stock company in hcmc – cosimex

Herzberg 1966 ...17 Table 2-3 The Changes in the People’s Individuality Adapted by Argyris 1995 ...20 Table 2-4 The Motive Sanitation Adapted by Herzberg 1987 ...21 Table 3-1 Measurement

In partial fulfillment of the requirements for the degree of

Masters of Business Administration

Advisor: Dr Ching-Wen Mo Co-advisor: Dr Nguyen Minh Tuan Graduate Student: Vu Quoc Thang

December, 2010

ACKNOWLEDGMENTS

Today, especially from 2006, when Vietnam becomes WTO membership; the biggest problem that it has to face is How to successfully assimilate into worldwide economy; in which, the factor of human resource management is one of the most important

The study on the personnel work below is a case one I receive knowledge and training from the Master of Business Administration (MBA) Program of Meiho University (MU) and Hochiminh City University of Industry (HUI) Then I apply them into the reality of human resource management of my company Finally, I analyze, recognize my own problems and go to conclusions and recommendations for my own company

I am very grateful for the dedication, and enthusiasm that I receive from MU and HUI professors, who spend a lot of time and effort to teach and guide me, among them is

my Advisor, Dr Ching-wen Mo

I also appreciate directors, managers, and employees of my company for their tightly cooperation to help me fulfill this subject

The Effectiveness of HRM in an Import Export Joint Stock Company in HCMC – Cosimex

ABSTRACT

Con Son Import Export Joint Stock Company (Cosimex) was founded on January

18th 2008 Previously, it was a state company, established in 1993, named Con Son Import Export Company (Cosimex), and began the process of privatization from 2005 From that time, Cosimex has to rearrange, to plan, to try to survive without any help from the government From that time, Cosimex has to learn the real lesson about sustainable development; in which, one of the most important key is human resource management

Besides, the domestic economy has to be rearranged quickly to assimilate into worldwide economy It requires managers and employees to have non-stop renovation, to apply new scientific ways in management, to have proper business strategy, especially in human resource strategy The right human resource strategy that satisfies and encourages employees will repair the company errors that exist, will turn company challenges into opportunities, will make the company sustainably develop

With knowledge through courses, through the accumulation and research, I would like to do the research about employees satisfaction to Con Son Import Export Joint Stock Company; in order to help all directors and managers can recognize the reality of Cosimex human resource management; then can establish a strategy to improve the human resource management as well as the company competitiveness in the world markets

In this study, I recommend suggestions to apply to my company Administrative Department, including: good resolution to internal relationships, implementation a fairness in treatment about discipline and income policies, create an comfortable working environment, set regulations to promote opportunities for employees advancement, including training affairs

Personnel-Keywords: Vietnam, Hochiminh, MU, HUI, Cosimex

The Effectiveness of HRM in an Import Export Joint Stock Company in HCMC – Cosimex

Contents

ACKNOWLEDGMENTS I ABSTRACT II Contents III Tables V Figures VI

Chapter1 Introduction 1

1.1 Background and Motivation 1

1.1.1 Company structure 1

1.1.2 Labor structure 2

1.1.3 Motivation 4

1.2 Research Objectives 5

1.3 Research Scope and Limitations 5

1.4 Research Method 5

Chapter2 Literature Review 6

2.1 Overview of Human Resource Management 6

2.1.1 Definition 6

2.1.2 The goal of personnel management in enterprises 6

2.1.3 Personnel management roles 7

2.1.4 Trends and issues affect personnel management 8

2.1.5 Administration to meet workers requirement 8

2.2 Theories of Human Satisfaction 9

2.2.1 Maslow’s theory 9

2.2.2 Alderfer’s theory 10

2.2.3 Herzberg’s theory 11

2.2.4 McClelland’s theory 13

2.2.5 Summary 13

2.3 Related Studies on Human needs and Motivation 15

2.3.1 Theory of hierarchy needs (Abraham Maslow) 15

2.3.2 Expectations theory (Victor Vroom) 16

2.3.3 Two factors theory (F Hertzberg) 16

2.3.4 Theory of fair (The most important) 17

2.3.5 Related studies on motivation 18

2.4 Summary 23

Chapter3 Research Methodology 24

3.1 Research Process 24

3.2 Research Methods 24

3.2.1 Research on the qualitative one 24

3.2.2 Research on quantitative one 25

3.3 Research Framework 26

3.4 Sampling 27

3.5 Instrument Design 27

3.5.1 Building the measurement 27

3.5.2 Test validity and reliability 31

Chapter4 Research Results and Analysis 35

4.1 Analyzing Data 35

4.1.1 Basic information analysis results 35

4.1.2 The correlations of variables 36

4.1.3 Descriptive statistics on the factors affecting the employee’s satisfaction to the company 38

4.1.4 Exploratory factor analysis (EFA) 38

4.1.5 Linear Regression 44

4.2 Findings and Empirical Results 46

4.2.1 Factors that are the most influential to the employee satisfaction 46

4.2.2 Factors that do not influence on employee satisfaction 46

4.2.3 Empirical results 46

Chapter5 Conclusions and Recommendations 48

5.1 Conclusions 48

5.2 Recommendations 49

5.3 Limitation of the Study 51

References 52

APPENDIX 54

Attachment Verification Reliability Cronbach's Alpha 59

Tables

Table 1-1 Qualification of Professional Staffs 3

Table 1-2 Structure of Labor by the Senior Employees 4

Table 2-1 Comparison of the Theories 14

Table 2-2 Listed the Factors that Encourage Adapted by F Herzberg (1966) 17

Table 2-3 The Changes in the People’s Individuality Adapted by Argyris (1995) 20

Table 2-4 The Motive Sanitation Adapted by Herzberg (1987) 21

Table 3-1 Measurement of Salary and Policies 27

Table 3-2 Measurement of Working Environment 27

Table 3-3 Measurement of Employees Awareness about Company 28

Table 3-4 Measurement of Employees Representation Oneself 28

Table 3-5 Measurement of Promotion Opportunities 28

Table 3-6 Fairness in Treatment Measurement 29

Table 3-7 Measurement of Working Evaluation 29

Table 3-8 Measurement of the Individual Related to Work 29

Table 3-9 Relationship among Colleagues, Senior and Subordinate Measurement 30

Table 3-10 Training Affair Measurement 30

Table 3-11 Measurement of Employees Satisfaction to the Company 31

Table 3-12 Expert Comments to Questionnaire Adjustment 32

Table 3-13 Reliability Questions 33

Table 4-1 Analysis Results Describing Information about Gender, Age, Education, Current Job And Seniority 35

Table 4-3 Descriptive Statistics on the Factors Affecting the Employee’S Satisfaction to the Company 38

Table 4-4 Exploratory Factor Analysis Results of the Independent Variables 39

Table 4-5 Results of Exploratory Factor Analysis the Dependent Variable 42

Table 4-6 Summary Results of Regression 44

Figures

Figure 1-1 Cosimex Organization Structure 2

Figure 3-1 Research Process 24

Figure 3-2 Research Framework 26

Figure 4-1 Adjustment Model 44

The Effectiveness of HRM in an Import Export Joint Stock Company in HCMC –

Cosimex Chapter1 Introduction

1.1 Background and Motivation

1.1.1 Company structure

Con Son Import Export Joint Stock Company (Cosimex) was founded on January

18th 2008 Previously, it was a state company, established in 1993, named Con Son Import Export Company (Cosimex), and began the process of privatization from 2005

Company Logo:

Company functions:

9 Import: Household goods, shoes, consumer products;

9 Export: Pottery product

Cosimex is a small company (its share capital is only 700,000 US dollars) with a small labor (only 142 employees) But, the activities through 17 years give the company a well-trained group of employees After privatization, Cosimex faces many problems and challenges derived from the changes of ownership and the influence of globalization when Vietnam becomes the WTO membership It demands the staff to work out an appropriate strategy to grow the company, include human resource management

Organization Structure:

The Board of Directors: 3 persons;

Figure 1-1 Cosimex Organization Structure

1.1.2 Labor structure

The structure of labor is divided as follows:

Female employees: 66 staffs (occupy 46.48% / total workforce)

Male employees: 76 staffs (occupy 53.52% / total workforce)

Long-Term Labor contract: 89 staffs

Short-Term Labor contract: 53 staffs

The average age of employees: 35 years old

The Structure of labor by level:

University graduate: 58 staffs

College graduate: 75 staffs

Qualification for high school level: 7 staffs

Qualification for secondary level: 2 staffs

General Director

DeputyGeneral Director-CFO

DeputyGeneral Director-CEO

Sales Department Accounting

Department

Administrative Depart

Personnel-Hochiminh City

Branch

Vungtau Province Branch Tayninh Province Branch

Table 1-1 Qualification of Professional Staffs

Qualification of Professional Order

University graduate graduate College school level High Secondary level

2 Sales Department 18 18

3 Accounting Department 8 6 2

4 Personnel - Administrative Department 6 3 3

5 Hochiminh City Branch 40 14 25 1

7 Tayninh Province Branch 30 7 19 3 1

To tell the truth, the Directors of the Boards just have enough skills to handle pretty

well the company to the near future only In another hand, Cosimex still lack of

professional sales manager, marketing agent The reason is that of the period when it was

a state company with non competitiveness in all kinds of its activities Employees have

been trained not to match the reality Almost All the department managers have good

skills in management, but mainly rely on experience than on knowledge from studying

About the structure of labor by title and age:

The average age of employees in the whole company is 35 years old Including:

Management group: 49 years old

Direct business group: 35 years old

Agent group: 30 years old

According to the statistical data, the average age of all groups above is adequate

Members of the Board of Directors are the oldest (49 years old), but still have abilities

and health to work for the company at least 10 more years

About the structure of labor by the senior employees:

Table 1-2 Structure of Labor by the Senior Employees

Quality of work Seniority

The employees have the seniority under 5 years are almost salesclerk (simple work)

Meanwhile, the rate of senior employees (more than 5 years) with professional work is

quite high They have enough experience to handle well their work They are precious

resources of the company

1.1.3 Motivation

In the current global market, three of the factors that form a successful company are:

worldwide accepted trade name, applied in reality Research and Development, and

high-grade employees Therefore, the managers must establish an effective human resource

management strategy

Before 2006, when Cosimex was still a state company, most of the employees did

not have a spirit to work, and there was no working relationship among them as well As

a result, working style was not really directed toward the customer

After privatization, Cosimex has to carry out new policies in employee’s

management to encourage them, to promote them working with the most effective, and

also to attract talented agent

However, The Staff of Personnel Administrative Department, who absorbs the old

knowledge and training, do not really appropriate to handle the new situation It causes

many difficulties for the rearrange Cosimex organizational structure

Therefore, the company must have an itinerary for its human resource management,

and rearrange the organizational structure to build an employees team with good

behaviors at work, flexible, be able to solve the tasks assigned, has ability to cooperate

with colleagues in performing company targets, has a will to advance, the ability to

quickly adapt to changes in tasks, work environment, and new technologies

To settle theses problems, I would like to follow the research named “The

Effectiveness of Human resource Management in an Import Export Joint Stock Company

in Hochiminh City (Cosimex)” and hope it can provide my company a complete

suggestion to renovate the human resource management methods, to really recognize that personnel belonging to the company is “great assets”, the most important factor for the company to sustainably develop

1.2 Research Objectives

Based on the theory of satisfaction of employees to the company and the study results from the company before and after privatization, this thesis would evaluate the effectiveness of human resource management of Cosimex Company after privatization:

X To identify the major factors affecting employee satisfaction to the company;

Y To measure the satisfaction level of employees to the company;

Z To detect mistakes in treatment policies in order to make them more appropriate;

[ To improve internal relationships and to help managers better understand their staffs so they can act the best treatment to employees

1.3 Research Scope and Limitations

9 This Study measures the satisfaction level of Cosimex Employees only;

9 Results on the same research in other Trading Companies may differ It is required to enlarge the Research to obtain the Popular Scientific Results

1.4 Research Method

Combine qualitative and quantitative research:

We use the qualitative research methods to discuss the evaluation of satisfaction

of staff, included: The Directors of the Board, Directors and Managers of Cosimex Units

At the meeting, we discuss, collect opinion, comment, evaluate to have adjustment methods and additional variables; and measurement concepts research (using SPSS 14.0 software);

Quantitative research was done by directly interview with the staff by questionnaires This table is built on the basis of the qualitative research; the goal is to measure the factors that affect satisfaction of employees; on the other hand, testing the theoretical model set (using SPSS 14.0 software)

Chapter2 Literature Review

2.1 Overview of Human Resource Management

2.1.1 Definition

French W.L (1987) presented that human resource management is a general activities plan, recruit, select, maintain, develop, encourage and create facilitate personnel resources through organizations to achieve strategic goals and the future of the organization Sally Eastoe & Heather Russell (2008) explained that human resource management is the process of managing people in organizations that considers the goals

of both organizations and individuals It is related to using effecting levels and the ability

of people to achieve success for organizations, individuals and society

Human resources including all individuals participating in any activities of organization, regardless of the role they do Organizations can be manufacturers, companies, state agencies, universities, etc They can be big or small, simple or complex Nowadays, organizations could also be a political organization Therefore, personnel management associates with every organization, no matter it has administration department or not Personnel management is one of the most important functions of governance, spreading throughout the organization

2.1.2 The goal of personnel management in enterprises

Stakeholder model (also known as pyramid model) which is Stanford Research Institute said that personnel management objectives are not only benefit toward an individual group in the company, but also the harmonization and optimization among four groups receiving benefits: Customers, Staff, Shareholders, and Environment (social and ecological)

Personnel management has to be interested in three important issues as follows:

X Personnel management should focus on strategic vision (rather than response and management)

Y The employee should be considered as resources (rather than cost factor)

Z Personnel function should be considered as senior manager task (rather than expert advice)

Managers must help employees achieve personal goals Otherwise, labor productivity, quality of complete work would be reduced, employees may leave the

organization Each individual has a goal itself, but for an organization, this goal is measured by the satisfaction of the job (job satisfaction), it means the level of an individual feeling positively or negatively to their work This shows the level of their attachment to the organization and active in work or not Strongly attachment to the organization makes someone feel himself a part of it Active in work is a willing to work hard and make efforts to exceed the average To make staffs feel satisfy with jobs, an organization must provide them with good work and working environment, and stimulate them as well

Above factors are issued as quality of work life (thereafter, QWL), that indicates the quality of the overall experience of people in the workplace QWL concepts tell aspects of important social responsibility, because what happens to them in the workplace also affects their individual lives outside and vice versa Poor personnel management in the workplace can reduce their comprehensive quality of life

2.1.3 Personnel management roles.

The definition above presents the functions of personnel management Now, we explain its roles

X Policy: Personnel department has a main role to propose policies related to human resources in the organization and to ensure that policies will be enforced These policies must have ability to resolve differences, problems and help organization to implement its objectives Today, personnel department inclines to set up personnel management policies or advice for senior manager

Y Counseling: Personnel department has a role to counsel managers, employees and labor union on solution to labor problems and dispute, such as: annual leave, leave-breaker, employees complaint against decisions, labor safety etc

Z Services: The role personnel department to provide services to other departments such as: employee recruitment, training, welfare etc

Personnel department supports other departments in recruitment, training programs based on the needs of each department or business objectives Personnel department also manages salary policy, the benefits as pension, insurance, labor safety, keeps and saves staff records

[ Inspecting: Personnel department has a role to inspect other departments in achieving policies, programs about employees, and to study about the needs implement the policy

2.1.4 Trends and issues affect personnel management.

X Employee ability: in the global economy, education level, knowledge of staff is constantly improving Workers who are lack of skills and knowledge will be eliminated

or difficult to get jobs In work, it affects the participation of workers to the management task, affects satisfaction with their work as well as the expected rewards and treatment from the organization.Unluckyly, in Vietnam, most of the youth labor forces are in this case

Y Workers quality of life: workers now consider work is only a part of overall lifestyle So according to them, salary is not only to maintain their life, but to complete other life objectives or purposes Today, the development of science and technology with auto production lines easily makes workers feel bored at work Labor efficiency will be reduced without any deep concern about working condition at the factory

Z Work stress: Hard working, noisy working,more than ten hours per day working anxiety over job stability, etc cause work stress This is an important aspect of QWL So far, there are many industrial attempts to change the layout, the work assigned

by plentiful jobs in order to reduce hard work That means arranged and re-arranged work

to build the elements of movement in the job For example, in Japan, workers will be arranged from this department to other department within two to three years This is called diversification of work

[ Company responsibility for society: Beside responsibility for the health, safety

of employees, companies are still responsible for the consumer in after-sales care, righteous advertising, causing environmental pollution etc

2.1.5 Administration to meet workers requirement

The need to understand workers requirement will help to form a new basis for recruiting, training, encouraging and promoting

X In general, employees need following elements in work: security, respect manner in treatment, chance to express their skills, appropriate working condition and environment, stable working hour policy and recruitment

Y About benefit and wage, workers require the followings: be paid adequately by their contribution to the company, fair salary system, no bias policies about special privileges or advantages, reasonable welfare paying; be managed by authority that has ability to co-ordinate workers, to makes them feel their complete work is important and necessary and expected, to be ready to listen to their opinions

Z About promotion opportunities, workers need the followings: opportunity to learn new skills, opportunity to be promoted and rewarded fairly, opportunity to have training programs to advance, facilitation to recognize their perfomance, opportunity to participate in setting up company objectives, opportunity to improve their living standards, and opportunity to better their work in the future

2.2 Theories of Human Satisfaction

According to McShane & Von Glinow (2003), satisfaction theories fall into two main categories: content theories Content theories explain the dynamics of employee needs, such as why people have different needs at different times By understanding employee needs, we can discover the conditions that motivate that person Process theories describe the processes through which needs are translated into behavior They help us understand, predict, and influence employee performance, attendance, etc In the scope of the study, only content theories were used due to their relationship with the study objective (identifying factors that influence College teachers’ job satisfaction.) The four following theories are considered dominating content theories of satisfaction and are written in the viewpoint of McShane & Von Glinow (2003)

2.2.1 Maslow’s theory

One of the earliest and best well-known theories is needs hierarchy theory Developed by psychologist Abraham Maslow (1970), this theory condenses the numerous needs that scholars have identified into a hierarchy of five basic categories At the bottom are physiological needs, which include the need to satisfy biological requirements for food, air, water, and shelter Next come safety needs – the need for a secure and stable environment and the absence of pain, threat, or illness Belongingness includes the need for love, affection, and interaction with other people Esteem includes self – esteem through personal achievement as well as social esteem through recognition and respect from others At the top of the hierarchy it – actualization, which represents the need for self – fulfillment – a sense that the person’s potential has been realized

Maslow recognized that employee behavior is motivated simultaneously by several need levels, but behavior is motivated mostly by the lowest unsatisfied need at the time

As the person satisfies a lower – level need, the next higher need in the hierarchy becomes the primary motivator This concept is known as the satisfaction – progression process Even if a person is unable to satisfy a higher need, he or she will be motivated by

it until it is eventually satisfied Physiological needs are initially the most important, and

people are motivated to satisfy them first As they become gratified, safety needs emerge

as the strongest motivator As safety needs are satisfied, belongingness needs become most important, and so forth The exception to the satisfaction – progression process is self – actualization; as people experience self – actualization, they desire more rather than less of this need

Although Maslow’s needs hierarchy is one of the best-known behavior theories, the model is much too rigid to explain the dynamic and unstable characteristics or employee needs Researchers have found that individual needs do not cluster neatly around the five categories described in the model Moreover, gratification of one need level does not necessarily lead to increased motivation to satisfy the next higher need level Although Maslow’s model January not predict employee needs expected, it provides an important introduction to employee needs and has laid the foundation for Alderfer’s ERG theory, which has better research support

2.2.2 Alderfer’s theory

ERG theory was developed by organizational behavior scholar Clayton Alderfer (2000) to overcome the problems with Maslow’s needs hierarchy theory ERG theory groups human needs into three broad categories: existence, relatedness, and growth (the theory’s name is based on the first letter of each need) Existence need correspond to Maslow’s belongingness needs Growth needs correspond to Maslow’s esteem and self – actualization needs

Existence needs include a person’s physiological and physically related safety needs, such as the need for food, shelter, and safe working conditions Relatedness needs include a person’s need to interact with other people, receive public recognition, and feel secure around people (i.e interpersonal safety) Growth needs consist of a person’s self – esteem through personal achievement as well as the concept of self – actualization presented in Maslow’s model

ERG theory states that employee behavior is motivated simultaneously by more than one need level Thus, you might try to satisfy your growth needs (such as competing

an assignment exceptionally well) even though your relatedness needs are not completely satisfied ERG theory applies the satisfaction – progression process described in Maslow’s needs hierarchy model, so one need level dominates a person’s motivation more than others As existence needs are satisfied, for example, relatedness needs become more important

Unlike Maslow’s model, however, ERG theory includes a frustration – regression process whereby those who are unable to satisfy a higher need become frustrated and regress to the next lower need level For example, if existence and relatedness needs have been satisfied, but growth need fulfillment has been blocked, the individual will become frustrated and relatedness needs will again emerge as the dominant source of motivation Although not fully tested, ERG theory seems to explain the dynamics of human needs in organizations reasonably well It provides a less rigid explanation of employee needs than Maslow’s hierarchy Human needs cluster more neatly around the three categories proposed by Alderfer than the five categories in Maslow’s hierarchy The combined processes of satisfaction – progression and frustration – regression also provide

a more accurate explanation of why employee needs change over time Overall, it seems

to come closest to explaining why employees have particular needs at various times

A unique characteristic of motivator – hygiene theory is that it does not view job satisfaction and dissatisfaction as opposites Improving motivation increases job satisfaction, but it does not decrease job dissatisfaction Improving hygiene reduces job dissatisfaction, but it does not increase job satisfaction Job satisfaction is produced by growth fulfillment and other work content outcomes, whereas job satisfaction is produced

by the work context Thus, Herberg’s theory differs from Maslow’s and Alderfer’s hierarchy models by suggesting that growth needs represent the only source of motivation

In more colloquial terms, a job with good hygiene factors like an air-conditioned office, cushy benefits, and a lenient vacation policy will make employee show up for work However, employees will be unlikely to burn the midnight oil and think about their

work on the weekends unless the position also offers opportunities for intellectual and professional growth (This might be described as the difference between a “job” and a

“career”)

How does a manager create motivating factors and then employee satisfaction? Three practices based on the motivation-hygiene theory are job enlargement, job enrichment, and job rotation

Job enlargement (also known as horizontal job loading) combines tasks into one job This approach might involve combining two or more complete jobs into one, or just adding one or two more tasks to an existing job Either way, the job’s skill variety has increased because there are more tasks to perform

However, job enlargement often fails to achieve the desired results In too many cases, job enlargement simply makes employee “busier” without making the job itself more interesting or rewarding

Job rotation is a systematic process of shifting workers from one specialized job to another The idea is to prevent boredom by periodically giving each employee a new set

of responsibilities Job rotation is used by many organizations

Job rotation can alleviate the “ruts” which inevitably occur when employee performs the same set of tasks for years on end However, this is not the only benefit of the practice Another advantage of job rotation is cross training Employee who works in multiple functional areas adds to his or her skills portfolio This benefits the organization

as well as employee An organization that has a large number of cross-trained employees can flexibly respond to changes in its internal and external environment, shifting workers

to the areas in which they are needed most at a given time The worker, meanwhile, builds a resume that contains multiple areas of expertise – or at least multiple areas of experience

Job rotation is not, however, a panacea by itself If the jobs in an organization are intrinsically boring, then the enthusiasm that employee feels at the beginning of each new assignment will quickly dissipate Job rotation also decreases efficiency When employee begins a new assignment, it will take some time for him to master unfamiliar tasks Therefore, an organization that uses job rotation must take steps to ensure proper employee training in each functional area

Although more complex, job enrichment is considered to be superior to both job enlargement and job rotation Job enrichment uses vertical loading to expand employee control over his work while simultaneously increase his range of responsibility Job

enrichment can therefore be a source of motivational factors Employee who is more in control will have a greater chance of experiencing professional growth, recognition, and achievement and the satisfaction that follows

2.2.4 McClelland’s theory

The motivation models described so far look at the individual’s primary or instinctive needs and their relative importance in life However, people also have secondary needs or drives that are learned and reinforced through childhood learning, parental styles, and social norms Several learned needs can motivate us at the same time Psychologist David McClelland (2001) devoted his career to studying three secondary needs that he considered particularly important sources of motivation: need for achievement, need for affiliation, and need for power

Need for Achievement (nAch) People with a high nAch want to accomplish reasonably goals through their own efforts They prefer working alone rather than in teams and choose tasks with a moderate degree of risk (i.e neither too easy nor impossible to complete) High nAch people also desire unambiguous feedback and recognition for their success Money is a weak motivator, except when it provides feedback and recognition In contrast, employees with a low nAch have higher motivation when money is used as a financial incentive

Need for Power (nPow) refers to a desire to control one’s environment, including people and material resources People with a high nPow want to exercise control over others and are concerned about maintaining their leadership position They rely on persuasive communication, make more suggestions in meetings, and tend to publicly evaluate situations more frequently Some people have a high need for personalized power They enjoy their power for its own sake and use it to advance their career and other personal interests It is a symbol of status and a tool to fulfill personal needs more than a delicate instrument to serve stakeholders Others mainly have a high need for socialized power They want power as a means to help others, such as improving society

or increasing organizational effectiveness

2.2.5 Summary

Suggested by Maslow’s satisfaction – progression process whereby people become increasingly motivated to fulfill a higher need as a lower need is gratified, satisfaction is best perceived when people get to the top of the hierarchy, which is esteem and self – actualization; correspond to Alderfer’s growth needs and Heerberg’s motivators

Alderfer’s frustration – regression process whereby people progress to the next higher need when a lower one is fulfilled, and regress to a lower need if unable to fulfill a higher one proposes that different people have different needs at different times Some employees are ready to fulfill growth needs, whereas others at different times Some employees are ready to fulfill growth needs, whereas others are still struggling to satisfy their minimum existence needs Needs also change when people enter new stages of their life, and rewards that motivated people at one time become less motivational

Herberg’s motivator – hygiene theory indicates that financial rewards are not a good source of or employee motivation There are potentially powerful sources of motivation, such as challenging assignments, learning opportunities, and praise from colleagues and supervisors

Table 2-1 Comparison of the Theories

Maslow’s needs

theory hierarchy

Alderfer’s ERG theory

Herzberg’s motivator – hygiene theory

McClelland’s theory

of learned needs Self –

actualization

Need for achievement Esteem

Motivators (job content, recognition) motivate and satisfy, whereas hygiene factors (work relations, work environment) can create or reduce

dissatisfaction but do not motivate

Some needs are learned rather than instinctive, and more than one need can motivate at the same time

Source: McShane & Von Glinow (2003)

All four theories are well known; however, each has its own shortcomings and strong points Therefore, in the study, all four theories were used in order to supplement and overcome each other’s shortcomings

In a short conclusion, the researcher wanted to have more viewpoints from different theories so that the researcher can be helped to get more backgrounds for the factors that will influence on the main factors that will be used for the whole study

2.3 Related Studies on Human needs and Motivation

2.3.1 Theory of hierarchy needs (Abraham Maslow)

According to Abraham Maslow, “A Theory of Human Motivation”, human needs are organized into five levels as following:

X Physical needs: the basic needs of human such as eating, wearing, and living have the highest strength to meet;

Y Safety needs: when the needs of the physical meet, the demand for security will

be outstanding;

Z Communication needs (social): demand will appear and become outstanding when two requirements above are achieved, people will try to have good relations with others;

[ Respected needs (feeling confident, prestige, power): people feel self-helpful and influence of the environment surroundings, thus appear needs to be respected

\ Self-assertion needs: when the respect beginning to be satisfied, the demand self-assertion will become stronger, it is the highest demands level to increase the maximum potential of human

Five basic needs divided on two levels: a low-level is the physical needs, security (safety); a high-level is the communication needs, the respected needs and self-assertion needs Hereby, the difference is the low-level needed to be meeting from outside, while high-level needed is satisfy mainly by the inside of human

Here, self-assertion is a desire to do something that people can achieve and also the highest level in the needs level of people, especially in the context of social development

at the present Everyone also wants others to recognize and acknowledge the effort of one For managers, employees of the striving ambition for the promotion opportunity is motivating to be utterly dedicated to one’s work and the administrator need to note this point, thus maintaining the excellent employees and long-term attachment and wholeheartedly with their business

As the same time, hierarchy needs theory of Maslow also pointed out that managers must understand employee needs at any level if they want to encourage employees,

thence have appropriate solutions to meet needs of employees and guarantee to achieve the goal of the organization at once

2.3.2 Expectations theory (Victor Vroom)

About expectations theory, Wayne & Noc., (1990) had brought out an approach to try to answer the question: What factors affect the strength of demand? We have confirmed previously that the demand is perceived to create acts of man Promoting created behavior in work increasing if a person aware of the relationship between efforts and performs Behavior was motivated continue to increased if there is correlation between the good implementation of the work and results, or special awards if results or prizes are highly evaluated

Therefore, managers need to understand that towards their employees, if they work well they may have early promotion, following is higher pay If this happens the workers will work more actively, on the contrary the motivating, the voluntary and trust will be reduced

Motivated by the personal towards the goal is the aspiration of the environment High prospects, the motivation will increase; the availability of purpose in the environment may affect the power of the certain motivation Besides, individuals behave

as promoting behaviors situations become new material received and become experienced

as the same time If the material introduce early the impact of behavior for later is growing Behavior as long as it follows that will be bold definition, difficult to change This is the feature that the managers should take notice, because if it is understood manager will not anxious about why young employees change personality easily than old people? So, should invest and how much investment to old people? While, for the young people, the investment not only less costly but results will be faster

2.3.3 Two factors theory (F Hertzberg)

Work and The Nature of Man (1966) pointed out Frederick Hertzberg developed the theory of encouragement himself by proposed experts who working in industrial enterprises listed the factors as they satisfy and the factors that make them are highly encouraged At the same time, ask them to list factors that they are not encouraged and dissatisfied Detection of F Herzberg creates a big surprise because it upset common awareness of us We believe that the opposite of satisfied is dissatisfied and vice versa (i.e two states satisfied or dissatisfied)

From information gathered, F Herzberg found that opposite with satisfied is unsatisfied and opposite with dissatisfied is not dissatisfied Factors related to satisfaction

with work (motivation factors) and this factor is different from the factors related to dissatisfaction (called factors of maintenance or hermaphrodite) For the encouragement factors, if it been resolved well it will create satisfaction and since that employees will work actively Conversely, if it been resolved not good it will create conditions unsatisfied unlikely dissatisfied Furthermore, if the factors maintaining been resolved not good it create dissatisfied, vice versa it create not dissatisfied unlikely satisfied F Herzberg has listed the factors as follows:

Table 2-2 Listed the Factors that Encourage Adapted by F Herzberg (1966)

Maintenance factors Encouragement factors

1 Supervise methods 1 The challenges of job

2 Income distribution system 2 Promotion opportunities

3 Relationships with colleagues 3 The meaning achievements

4 Working conditions 4 Identify when the job is done

5 Policies of the School 5 Meaning of responsibility

6 Personal life

7 Status

8 Relationships between individuals

From two factors theory above, we can draw ideas that are important: the factors satisfy employees are different with factors creating dissatisfied So, the administrator can not expect satisfaction of employees by simply remove the cause of dissatisfaction

To encourage employees require concurrent adequate resolution in both groups of factors to maintain and encourage Responsibilities of team management are to exclude dissatisfaction and create satisfaction, can not focus any particular group

2.3.4 Theory of fair (The most important)

Lam, Nguyen Huu (Organization Behavior, 1998) has stated: “employees in

organizations always want to be treated in a fair They tend to compare their devoted contributions to preferential treatment and rewards that they receive (know as individual justice), besides they continue comparative contribution, devoted, preferential and rewards with other people (also known as social equality)”

In fact, when compare and evaluate devoted contributions with preferential treatment and rewards of oneself can have 3 cases occurs:

• If employees believe that they are not treated well, the bonus is not worthy of the effort they have put out, they will dissatisfy and then work lower than their ability even stop working

• If employees believe that they are treated properly, bonus and preferential treatment is adequate of the effort they have put out, they maintain the same capacity

• If workers realize that bonus and preferential treatment higher than they desire they will work more actively, laborious But in this case, they tend to reduce the value of rewards, regardless of the reward and therefore the rewards will not mean encouragement

in the long-term anymore

Obviously, when people compare contributions, devoted, preferential treatment and rewards with others, the people often tend to appreciate their contributions, devoted and reward ,and appreciative of the reward, contribute which others receive Theory of fair believe that people want to be fair treated , but when they were fell in dealing with unfair they trend to have set the fair for themselves When dealing with unfair, people trend to accept, and bear because they know that do not have absolute fairness and to reach the fair which can not be obtained in the short-term However, if dealing with unfair in the long-term they will dissatisfied, resist, and even will stop working

As a results, the managers must pay attention to awareness, and the factors affect awareness of employees about the fairness; must actively improve the preferential treatment system; and encouragement to make it better and more fair; and not be waiting

or peace of mind when teacher or employees have no comments before the situation was too late

2.3.5 Related studies on motivation

The managers accepted theory X who try to check and supervise closely to their employees, they found that the control from the outside are relevant when working with the people has not reliable enough, lack of responsibility and immatureness

However, the issue is set out in democracy, the level of education and living increases then the point of the theory X about human nature and this management issues may be failure in making motive of many people working together by purposes of organization, and social needs are respected and self-assertion is gradually becoming dominant From these problems, Douglas McGregor developed the theory of the nature of the behavior of people called theory Y

Theory Y believes that: human nature is not lazy and suspicious First of all, it acknowledges people basically can be oriented and creative in work if it is promoted correctly Therefore, the main task of administrator is wake up potential in humans Those who have a reasonable motive can achieve their own goals well by direct their trying to complete the purpose of the organization

When considering the differences between attitudes and behavior for additional theory X and theory Y, Chris Argyris admitted:

With theory X, the individuals do not express emotions, and not open, and object experimental and not help other people implement this behavior Their behavior tends to

be featured in the close supervise and high-level structure Thence, the satisfaction needs also difference As a result, everyone is been pressured at work and therefore find reason

to quit work to meet needs are respected and affirmed by them Because being dependent

on the type management theory X, most workers consider work as an enemy more than a matter of challenge and meet individual needs

With theory Y, individuals express emotions and openly Their behavior tends to support and create better conditions The result is standardized of the integrity, interest and personality Besides, the management theory Y can help the workers by bringing them to the test reduced step by step from outside, allowing them to check as many as possible Thence, the workers can achieve the satisfaction of social needs, be respected and self-assertion in this type of environment; they often forget the busy, hard, as if the job does not bring any satisfaction, employees still find some reason to meet their primary needs

Through those problems, we can explain that: the organization in the development, the group of labor with the unity and every purpose go together with the purposes of organization; such organization has high productivities and everyone work happily because the jobs make them satisfy actually

2.3.5.2 Theory of under age – adults

This theory proposes by the researcher Argyris (1995) Argyris has defined the model of management which affects human behavior and personal development within the working environment According to him, human development into adults will have 7 changes occur in the people’s individuality; these changes have continuous nature and personality “healthy” development in continuous time from not mature yet to mature as follows:

Table 2-3 The Changes in the People’s Individuality Adapted by Argyris (1995)

Passive Active Dependencies Independent Treatment of the several ways Have the ability to treat in many ways Liking without much thought – unusual Liking with deep and stronger thought Short-term vision Long-term vision (past and future)

Binding positions Equal position or superior

Lack of understanding about yourself Self awareness and self control

From this research, Argyris argued: Hold people who lack of the mature feature is already take root into the nature of the organization forms, because the organizations are often established to achieve goals or objectives which may be collective response to a warm one Organization is designed based on 4 concepts management science: specialize tasks, command line, and the unity guidance and check mode The management trying to intensify and improve effective organization, management and labor efficiency by change workers into “the elements can change for each other”

2.3.5.3 Theory of motive – sanitation

When people grow up, the needs such as the respect, self-assertion will become more important Through research, Herzberg in “One more time: How do you motivate employees?” (1987) concludes that human have 2 kinds of basic needs independent with each other and affect behavior by different ways

Firstly, when people feel does not meet their work they were very concerned about

the environment they are working; he called that is the demand “sanitation” or

“maintenance” as they describe the people’s environment and ensure a basic function is to

prevent boredom of work; “maintenance” as they are never completely satisfied but

continue to be maintained The factors “sanitation” does not create the growth production

ability of workers; they only prevent the loss due to the limitations of the work caused

when operating

Secondly, when feeling satisfied with the work the people interested in the job;

Herzberg called all kinds of needs as “the motivating” because they seem to be effective

in stimulating the human does the job better, and meet the feelings of achievement, the

career growth and recognition anyone may have experience in working as the level of

difficulty and scope are considered as the promotion

Table 2-4 The Motive Sanitation Adapted by Herzberg (1987)

The recognition of achievements Supervise

Work has the nature test Working conditions

High responsibility Relations contact personality

Growth and development Money, position, safety

Laboratory results showed that:

Workers who work in normal conditions, if this person have opportunity to grow

and meet their needs of “motive” in an environment that allows as to test some initiative

and creativity, decision to solve problems and take on responsibility and if that person

had enough mature and growth about ability then that person is able to improve higher

productivity

Meanwhile, the sanitation factors to meet tend to exclude dissatisfied and limited

work, but they are very little to promote individual to reaching higher abilities

Satisfaction of the “motive” will allow an individual grow and develop definitely,

typically is increase ability, while the sanitation factors will affect good intentions or the

private motive

Thus, all the theories mentioned above have proven the understanding and create motive to employees Theory systems have helped managers applied to analyze and understand behavior, also easily split into 2 opposite extremes:

One direction is governed by theory X that about the nature of human values bureaucracy, procedures acts tend to be managed They always think that subordinator in those organizations tend to be passive, dependent People are promoted by the physical needs, safety and satisfaction with “sanitation” factors

Other direction is organization with the opinion of theory Y about the nature of people with humanitarian values and democracy Results are those organization tend to be managed by people with perfect balance People are promoted by needs to integrate which are respected and self-assertion as “motive” factors relate to career

Although, there is a difference between 2 dimensional but the reality shows that even at any levels, and even at lower position in the organization, anyone can pass a work and support to meet the working environmental, particularly they have opportunities to develop and grow They will begin to meet respected needs and self-assertion by participation in the planning, organizing, stimulating the motive and check the task yourself

So, different with other potential, people have the ability and different personal characteristics then their behavior can change depending on themselves or the impact of the environment around them Therefore, require managers must understand and make the right evaluation about the needs of staff become higher with each passing day that create opportunities for them to promote maximum energy individuals; stimulate and encourage them in time at work to make them feel satisfied So they will promote ability, dedicated and exhaust themselves to the business, thence labor productivity and effectiveness of the new organization is improving

Through analysis of the theory, we found that a human factor in organizations is very important Theory help managers understand the behavior of people, from there identify the reasons for behavior before, predicted the changes could even control the behavior followed by another on the contrary, the results of research analysis about the environment create the motive for working which shows that the managers can still fail if they do not understand the behavior issue, do not evaluate their employees right or do not know how to encourage workers

2.4 Summary

From the basis theoretical presented above, we can draw the basic factors affecting the satisfaction of workers in organizations, which have the effects on encouragement the spirit of their work, the specific factors are:

X Working conditions: the environment, infrastructure for the staff to perform tasks;

Y Feeling of the owner: understand the objectives and methods of implementation work;

Z Practice discipline: the observance of the rules, discipline labor;

[ Income distribution system: salary workers;

\ Policies: preferential treatment policy, a pension;

] Promotion opportunities: employees’ opportunities to develop by themselves;

^ The evaluation of work was done: the results evaluation of the implementation of staff; _ Personal life: obligation family and personal life of each employee;

` Colleague relationship: concerns among individuals in the unit;

a The stable and interesting work: the nature of the individual’s work that is responsible

Chapter3 Research Methodology

3.2.1 Research on the qualitative one

The sample questionnaire was established based on that in Master Thesis of MBA Nguyen Van Diep (Meiho EMBA1 Vietnam)

1 System theory of satisfaction of employees

with the company

2 Analyzing the data of employees treating:

policies, concerned research works that have

7 Analysis of data collected

8 Suggestions, Recommendation and

Conclusions

Consultation from experts

On August 20th 2010 Cosimex Directors of the Board held a Conference with all company directors and managers to discuss, collect opinion, comments, evaluate the employee satisfaction to have adjustment methods, additional variables, and research measurement

In the conference, almost all participants highly agree with the research of evaluation employee satisfaction to prepare for short-term business strategy, human resource strategy, and long-term projects of the company

Another conclusion is that almost employees are eager to go ahead to change company position in the market Besides, creating conditions to promote employees awareness, improving working environment will help the company to keep company core

About training affair, the conference conludes that it is required to organize the retraining for all employees by all means, and it is also needed to build standards, regulations for training affair

Besides, many opinions emphasize that after privatization, the company must build the new way of thought in all staff to be self-control, self-responsibility and accept the competition; understand the development trends, company target in short-term and long-term

According to the conclusions, the conference adjusts additional variables to insert to the research questions There are 10 factors that affect employee’s satisfaction at work:

X Salary and policies;

_ The individual related to work;

` Relationship among colleagues, senior and subordinate;

a Training affair;

3.2.2 Research on quantitative one

The quantitative research is carried out by directly interview the staff by questionnaires This survey is built on the basis of the qualitative research to measure

the factors that affect employee’s satisfaction at work, and to test the theoretical model set

Before distributing the official form, we conduct the trial interviews with 10%

amount of staffs (8 men, 6 women) to edit some non-sense questions or request an interviewer about the adjustment method interviews to limit them Then, we issue 142

questionnaires, receive 140 available (rate 98.59%), and put the datum in by SPSS 14.0 software

3.3 Research Framework

Figure 3-2 Research Framework

H.5

Pleasing Company

Cultures, Internal relationship,etc

H.4

The promotion Opportunities Adequate to Individual Needs

H.3 Comfortable Working Environment

H.2 Impartial Pension and Bonus Issues

H.1 Proper Salary and Income

Effectiveness

of Human Resource Management

3.5.1 Building the measurement

From the results at the staff conference (qualitative research), we build the measurement about employee’s satisfaction to the company, including 10 groups of variables as follows:

X Salary and policies

Table 3-1 Measurement of Salary and Policies

SALARY1 You are paid adequately to your position

SALARY2 Your benefits at the company are not lower than that of other

companies SALARY3 You understand well the income policies related to you

Y Working environment

Table 3-2 Measurement of Working Environment

ENVIRONMENT1 Your working place is clean, comfortable, safe

ENVIRONMENT2 You have enough working facilities and tools needed

ENVIRONMENT 3 You are fully aware of goals and working duties from your

senior ENVIRONMENT4 You frequently receive feedback and evaluation of your

working results from the senior ENVIRONMENT5 You have right to participate in setting up company objectives

Z Awareness about company

Table 3-3 Measurement of Employees Awareness about Company

AWARENES1 You understand company mission in short-term and goals in

long-term AWARENES2 You understand your work directly contributed to the success

of the company AWARENES3 You feel satisfied whenever having good results from work

[ Representation oneself

Table 3-4 Measurement of Employees Representation Oneself

REPRESENT1 You agree that the company highly encourages people who

show their own opinion REPRESENT2 You can show your opposite viewpoint without bully

REPRESENT3 Your working goal is to express yourself and to develop your

skills

\ Promotion opportunities

Table 3-5 Measurement of Promotion Opportunities

OPPORTUNITY1 You have enough opportunity to develop your skills

OPPORTUNITY2 Your leaders are interested in your advancement and

opportunities to advance OPPORTUNITY3 Your leaders make you feel that work offers you challenge OPPORTUNITY4 Your leaders make you feel that work offers you

encouragement OPPORTUNITY5 Your leaders make you feel that work offers you pleasure