High turnover rate and job stress of salesman in orient commercial bank

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Ho Thanh An HIGH TURNOVER RATE AND JOB STRESS OF SALESMAN IN ORIENT COMMERCIAL BANK MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City, Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Ho Thanh An HIGH TURNOVER RATE AND JOB STRESS OF SALESMAN IN ORIENT COMMERCIAL BANK MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PROF NGUYEN THI MAI TRANG Ho Chi Minh City, Year 2018 Executive Summary Banking industry has been witnessing a lot of growth, improving on its technological and global competition within banks With the strategy to expand the market, OCB has a plan to establish more than 20 branches and agencies throughout Vietnam from 2017-2020, it create the need of a huge human resource to run this business plan However, the turnover rate of OCB has been continuously growing by recent years The objective of this research is to find out what problems are affecting OCB employee retention and making high turnover rate over recent years Using secondary data from the HR department and primary data from in-depth interviews with two groups of interviewees who are the current employees and exemployees who quit job at OCB, the research found out that the job stress is the central business problem that leads to the high turnover rate Next, in deeper analysis about potential causes of the problem, it is found that work overload, and work-life imbalance or work-family conflict are root causes leading to job stress Forwards, the paper suggests that the alternatives which is mixed combination of the redesign and apply the new model to put the right person into right function in sales team are proposed to reduce the job stress of OCB salesman Finally, the action plan with detailed steps was presented to implement this solution Acknowledgements I would like to acknowledge all people who supported me during my studies First, I would like to thank my supervisor – Professor Nguyen Thi Mai Trang for all her advice and guidance, without her help this could not have been possible Then, I also would like to show my gratitude to my manager, my colleagues at OCB who gave me chance to conduct the research and spent time on interviews with me to come up the result of this thesis I also send my sincere thankfulness to my parents and friends for their support and encouragement TABLE OF CONTENTS PROBLEM IDENTIFICATION 1.1 1.1.1 Company history 1.1.2 Company Vision, Mission and Core Value 1.1.3 Company structure 1.2 Problem symptoms – Turnover rate status in OCB .9 1.2.2 Justify the consequences of the selected symptoms that lead to further investigation 10 Potential problems and justify the main problem 11 1.3.1 Income dissatisfaction and high turnover rate 11 1.3.2 Lack of career development opportunity and high turnover rate 12 1.3.3 Job stress and high turnover rate 13 1.3.4 Initial Cause and Effect map 15 1.3.5 Problem justification 15 CAUSE VALIDATION 16 2.1 Problem context 1.2.1 1.3 Company background Potential causes of problem and justification – The factors cause job stress 16 2.1.1 Work overload 17 2.1.2 Work family conflict/ work-life imbalance .19 2.2 Cause and Effect Map 20 2.3 Cause justification .21 ALTERNATIVE SOLUTIONS 22 3.1 The first alternative solution: Redesign job to enhance specializations and place the employees in appropriate job 22 3.2 The second alternative solution: increase training, coaching and sharing in workplace25 3.3 Justification and select the solution 28 IMPLEMENTATION 29 Detailed action plan .30 CONCLUSION 32 SUPPORTING INFORMATIONS 33 6.1 INTERVIEW GUIDE 35 6.1.1 Group 1: Manager/ staff/ saleman who are currently working at Company OCB 35 6.1.2 Group 2: Salemans who already left OCB Company 37 6.2 SUMMARY OF TRANSCRIPTS .38 6.2.1 Group 1: Manager/ staff/ saleman who are currently working at Company OCB 38 First session: To find the problem in OCB .38 Second session: To find the solution 51 6.2.2 6.3 Group 2: Salemans who already left OCB Company 59 APPENDIX 66 REFERENCES 68 LIST OF FIGURES Figure 1: OCB structure - From OCB Annual Report 2016 Figure 2:Cause and Effect Map .21 LIST OF TABLES Table 1: Yearly turnover rate in OCB Table 3: Yearly turnover rate in OCB, break down in each group 10 Table 4: Change in recruitment cost and training cost 11 Table 6: Budget to conduct the first solution 24 Table 7: Budget to conduct the second solution 27 PROBLEM IDENTIFICATION 1.1 Company background 1.1.1 Company history Established on June 10, 1996 in Ho Chi Minh City, Orient commercial joint stock bank (OCB) is providing the financial services for corporation and retail, there are three main segments: Big Enterprises, SMEs and Individual customers Nowadays, OCB has nearly 200 business units in 120 transaction points nationwide with around 5000 employees, and presented in all major cities and economic zones in the Vietnam Over the years, OCB has experienced double the average growth rate of the industry, The bad debt rate has always been controlled at the low level, ensuring the high and stable operating ratios (1) In 2017, total assets of OCB reached 84,353 billion, up 32.2% compared to 2016 Notably, pretax profit reached 1.018 billion; NPLs was controlled at 1.48% (2) At the same year, OCB accomplished the Basel II – risk management project and OCB got ranking B2 by Moody’s (one of the three most prestigious credit rating agencies in the world) – the highest level of commercial banks in Vietnam (1) 1.1.2 Company Vision, Mission and Core Value Vision: Become a top commercial bank in financial service for retail and small medium enterprises (SMEs) in Vietnam Mission: Create the effective financial solutions to bring the highest value to customers and investors, contribute positively to the development of community and society by building enthusiastic and customer-oriented workforce (1) Five core values (1) Customer-centered Professionalism Speed Creativity Friendliness 1.1.3 Company structure Figure 1: OCB structure - From OCB Annual Report 2016 Notes: *: there are some sub – internal complex departments inside 1.2 Problem context: 1.2.1 Problem symptoms – Turnover rate status in OCB In the period of 2017-2020, OCB targets to increase the average scale from 30 to 40% per year With the strategy to expand the market, OCB has a plan to establish more than 20 branches and agencies throughout Vietnam from 2017-2020, it create the need of a huge human resource to run this business plan However, the turnover rate of OCB, is higher than the industry average which is 16.8% in 2014 (Compared with industry average turnover rate is around 13.6% for Banking and finance sector - Tower Watson (3) ) and it has been increasing in next three years from 2015 – 2017 as the table below Table 1: Yearly turnover rate in OCB Year 2014 2015 2016 Turnover rate 16,8% 17,2% 18.9 % Source: Statistic of HR Department OCB from 2014-2017 2017 21.1% prevent this and sometime the training class choice in working time schedule, line manager is far and after the class I have the because I could schedule time to could show us meeting with customer and something like cook the breakfast or bring my some and we that Although the training class is helpful, daughter to school in the morning are free to find but I could not focus 100% in class and the or share the house work with my the time and same with my staff So I thinks that, it is husband.” learn by more useful if only training some of really ourselves need to attend the class, the line manager internal sharing could show us some and we are free to find for our team the time and learn by ourselve When I was sale a fresh saleman, I was lucky because I had the manager who sharing a lot experience give me the and knowledge so I could overcome the choice stress Now, working Sometimes, I conduct the internal sharing for our team sale, they react positive and then could improve more positive attitude before that and I think if the coaching could more than that, it is really helpful.” THANK AND CLOSE schedule in time SUMMARY OF TRANSCRIPTS 6.2.2 Group 2: Salemans who already left OCB Company Time: May 2016 Venue: Phone interview QUESTIONS PROBE/ PROMPT KEY POINTS WARM – UP: Greeting and introduction Thank you for your acceptance to phone How Q1 long have you interview with me today The purpose of this worked at OCB before meeting I have mentioned in invitation, so I you left and the position will start the conversation to save your time of you that time? Could you introduce a little bit about yourself Mr H years, the working environment is not good Hello As you known, My name is H I leave enough for me I don’t OCB last year have opportunity develop or promote Mrs Tr: Ms L: Hi My name is Tr I quit job OCB in 2016 years Hello I am L I leave OCB in Jun in 2016 years, to FINDINGS Mr D: Good evening I am D Q2 Are you still a salesman although you did not months work at OCB Company? Could you share a little bit about your new job now? Mr H I still work in credit salesman in the other financial company Mrs Now I work in other kind of company , not in Tr: financial company Ms L: Everything is ok I still work as salesman for a foreign compan Ms D: I change my job now and I don’t work in sale anymore Compulsory PROMPT: workload, time, salary, development Compared with OCB, could you share some opportunity… Q1 advantages/ good point of the new job/ new PROBE: Besides those organization you participated? above reasons, could you please share me if other reasons? 60 Mr H Higher position First, I was offered a higher position than time and the when I stay in OCB sharing Second, I work with my managers, coworkers, and I receive the comments or judgments from them, the comments and assessment are correct and good for me to develop I think that this is very good for a new salesman like me Finally,The working time is very flexible, for example, you can come to the office a bit late, and you can stay a bit late in the evening, the Mrs timing is very flexible Actually, because now I don’t work in bank Tr: any more, so the kind of job is different, I like Suitable job to that kind of job than saleman in bank because I like to analysis and don’t like to go out to meeting customer Ms L: In the new place, there are the Work distribution, specializations in our work distribution My specialization, team had enough the people for every enough employee position, so the task work smoothly, I don’t Not work overtime need to cover a lot of work and work overtime anymore Moreover, I am assigned what I am really good at, instead of a lot of unnecessary work as before I feel I grow up in career everyday” Mr D: My job now is relate to administration Salary and nature Because the salary is not based on the of work sale revenue anymore, but I satisfied with current income I don’t have to be worry about KPI of sale which make my salary up Q2 and down Could you please share with me one of the things that you feel really unsatisfied when you deal with engagement in the OCB that you may think of? Mr H “I could not found the opportunity to promotion If I apply for new organization, my PROMPT: Income, Development opportunity, Jobstress Less opportunity to promotion position will be higher and my income will higher too.” Mrs Beside the paper work at company, I must go Tr: out to with the customer until the night, go for a drink with them I drank every day, felt very tired and had no time to care for my family After marriage, Work-life unbalance I need time to spend more for family, but the job is so busy, because the work is include both meeting customer, financial analysis and paper work I start work in am but the end could be pm with no overtime allowance Sometime I need to go out for drink with customer after pm My husband don’t like it and advise me to leave Even, some of my female colleagues had the same situation One day, I realized that I need to change my job to protect my health and care Ms L: for my family Normal working hours is 8-10 hours a day, Working hour every morning must be in the bank before am, pm go home, I must have dinner about pm and it replays every day I think that is very harmful for my health and I have no time for shopping and going coffee with friends, even lack of time for the family, boyfriends.” Mr D: The salary does not increase but the target Salary is increase increases quickly Wages based on the level not enough the work of completion of business targets, so if anyone cannot meet the salary is low, even not enough for living cost Last year the target of capital mobilization was 2.4 billion VND per month, this year the boss assigned growth of credit to 3.5 billion No other way to accomplish this, I worked for bank nearly months and less customer relationship so I have to make use of every relationship from your family, friends and ask them to introduce new customers This work is very risky If I adhere to the process properly correctly, it will be very difficult to have qualified customers If the KPI is not consecutive for several months, management Q3 will punish and I may be dismissed Could you please tell me In above unsatisfied thing, what leads you the details about the decide to left OCB? reason that you have just mentioned? Mr H I want to change my work environment and find other opportunity to promote and develop Mrs myself Workload and the nature of work Tr: As I mentioned for my case, I think many female employee face the same problem like me when Promote and develop  Workload they are marriage There are many pressure to make Banking saleman get stress, the workload, the time pressure and especially, the work-family conflict as my case Ms L: Ms D: The time pressure and I want to find the new Not time pressure any environment more The low and not stable income income THANK AND CLOSE 6.3 APPENDIX These appendixes are include calculation of budget for solutions which are mentioned in the Alternative solution part Appendix 1: Budget for first solution Estimate cost Description Unit Unit cost Quantity In-depth interview between HR and Division/Branch managers in OCB about the structure in sale team to redesign the JD which is more effective interview tour/ area 5,000,000 15,000,000 25,000,000 75,000,000 person 15,000,000 30,000,000 training class 11,000,000 33,000,000 test account 1,400,000 110 154,000,000 Allowance for expert who design the JD and KPIs for sale team (25 million/ month) Allowance for HR employees who joined in project team in month (5 million/month) Cost of training the new structure in sale team and new JDs to all branches in OCB within areas in Vietnam, which conducted by internal trainer from the design team (11,000,000 million/class) Purchase the aptitude test bank from outside Total Notes days Business trip cost for one interviewer (airline, hotel) days Business trip cost for trainer and organizing cost Average cost/ test account is 39.99 GBP + VAT https://www.assessmentday.co.uk/buy/aptitudetest_buy.htm 307,000,000 Notes:Based on the average salary and allowance, the rule of business trip cost and training cost in OCB Appendix 2: Budget for second solution Description Option Unit Unit cost Formal training cost for the whole training road map of saleman quarterly next year for saleman 2000000 about 3500 salemans (average million/saleman) Quantity 3500 Total option Option Coach the coach program for branch manager in area and person then branch manager will coach for new and current employee Only open training classes to update the banking product or course new rule in area (5 module* course for every area.) Estimate cost 7,000,000,000 Notes https://ub.edu.vn/courses/ huan-luyen-nghiep-vungan-hang-vi-tri-quan-hekhach-hang-eb 7,000,000,000 6000000 110 11000000 45 Total option Notes:Based on the average allowance and the market price 660,000,000 495,000,000 1,155,000,000 http://coachingskills.vn/gia i-phap-quan-ly-cap-trung days Business trip cost for trainer and organizing cost REFERENCES www.ocb.com.vn [Online].; 2017 [cited 2017 11 Available from: https://www.ocb.com.vn/vi/gioi-thieu.html http://ndh.vn [Online].; 2018 [cited 2018 Available from: http://ndh.vn/dhdcd- ocb-se-niem-yet-hose-cham-nhat-dau-quy-iv-tang-vonthem-2-500-ty- 20180331110857699p149c165.news Towers Watson 2014 Annual Talent & Rewards Summit Event Summary; 2014 Carraher SM Turnover prediction using attitudes towards benefits, pay, and pay satisfaction among employees and entrepreneurs in Estonia, Latvia, and Lithuania Baltic Journal of Management 2011 Jan 11;6(1):25-52 Biswakarma G Organizational career growth and employees’ turnover intentions: An empirical evidence from Nepalese private commercial banks International Academic Journal of Organizational Behavior and Human Resource Management 2016;3:10-26 Oginni BO, Afolabi G, Erigbe P The place of job stress in labour turnover of the banking sector in the Nigerian Economy International Journal of Business and Management Invention 2013;2(1):93-9 Leontaridi RM, Ward-Warmedinger ME Work-related stress, quitting intentions and absenteeism Discussion Paper Bonn: The Institute for the Study of Labor (IZA); 2002 Report No.: 493 Rizwan M, Raza MA, Mateen MA, et al Investigating the Causes of Job Stress: A Study on Banking Sector of Bahawalpur, Pakistan International Journal of Learning and Development 2014 Jun 6;4(2):227-41 Dhankar S Occupational stress in banking sector International Journal of Applied Research 2015;1(8):132-5 10 Rizzo et al.1970 Cited by Rizwan M, Raza MA, Mateen MA, et al Investigating the Causes of Job Stress: A Study on Banking Sector of Bahawalpur, Pakistan International Journal of Learning and Development 2014 Jun 6;4(2):227-41 68 11.Lopes C, Kachalia D Impact of job stress on employee performance in banking 68 sector International Journal of Science Technology and Management 2015 March;5(3) Available from: http://www.ijstm.com 12 Priya B, Soni S Impact of job stress on the performance of the bank employees (A Case study of PNB Banks of Kangra District Himachal Pradesh) International Journal of Science, Environment and Technology 2017; 6(3):1843 – 1851 Available from: http://www.ijset.net/journal/1761.pdf 13.Abbasi TF Impact of Work Overload on Stress, Job Satisfaction and Turnover Intentions with Moderating Role of Islamic Work Ethics Management Studies and Economic Systems 2015 Jul;54(2518):1-1 14 Dubrin, A J 1997 Cited by Nart S, Batur O The relation between workfamily conflict, job stress, organizational commitment and job performance: A study on turkish primary teachers European Journal of Research on Education 2014;2(2):72-81 15 Nart S, Batur O The relation between work-family conflict, job stress, organizational commitment and job performance: A study on turkish primary teachers European Journal of Research on Education 2014;2(2):72-81 16 Surienty L, Ramayah T, Lo MC, Tarmizi AN Quality of work life and turnover intention: a partial least square (PLS) approach Social indicators research 2014 Oct 1;119(1):405-20 17 Nweke JO Coping With Job Stress in the Banking Sector: A Study of Guaranty Trust Bank Plc in Abakaliki, Ebonyi State, Nigeria Annals of Humanities and Development Studies 2016;7(1):52-60 18 Kaur MR, Sharma MP Stress Management in the Banking Sector Imperial Journal of Interdisciplinary Research 2016 Jan 19;2(3):113-7 19 Canadian Centre for Occupational Health and Safety [Online]; 2014 [cited 2018 March Available from: https://www.ccohs.ca/oshanswers/hsprograms/job_design.html 69 20 Khattak JK, Khan MA, Haq AU, Arif M, Minhas AA Occupational stress and burnout in Pakistan's banking sector African Journal of Business Management 79 2011 Feb 4;5(3):810 21 David L Talent Management and HR [Online].2012 [cited 2018 Apr 7] Available from: https://www.tlnt.com/yes-you-can-reduce-employee-stress-and- maximize- performance-too/ 22 Enekwe CI, Agu CI, Nnagbogu EK Stress Management Techniques in Banking Sectors in Nigeria IOSR Journal of Business and Management.2014;16(7) 23 McManus P Coaching people: Expert solutions to everyday challenges Boston: Harvard Business Press; 2006 24 Ladegård G Stress management through workplace coaching: The impact of learning experiences International Journal of Evidence Based Coaching & Mentoring 2011 Feb 1;9(1) 25 Clatworthy G Can Aptitude Tests Really Predict Employee Success? http://www.humanresources.com [Online].; 2018 [cited 2018 June 16 Available from: http://www.humanresources.com/1565/can-aptitude-testsreally-predict- employee-success/ 70 ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Ho Thanh An HIGH TURNOVER RATE AND JOB STRESS OF SALESMAN IN ORIENT COMMERCIAL BANK MASTER OF BUSINESS... goal in following years and the expanding strategy of OCB if the turnover rate of salesman is till high As can be seen from the statistics of HR department, the turnover rate of OCB is so high in. .. pointed out one of main reasons leading to high turnover rate is job stress with pressure and workload Mrs X – A Branch manager said that: “One of the main reasons for high turnover rate high in