unlicensed the influences of reward management on the performance of employees within vietnam banking sector a case of BIDV = nghiên cứu sâu về ảnh hưởng của quản trị thi đua khen thưởng thúc đẩy năng suất lao động của cán bộ n

Declaration The author confirms that the research outcome in the thesis is the result of author‟s independent work during study and research period and it is not yet published in other‟s research and article The other‟s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration Date: 22th August, 2017 Abstract Reward practice is regarded as one of the most important HR tools in motivating and retaining employees, especially in the banking Such area is growing at a notable pace, hence, increasing the critical need of having an effective reward system to combat against labour scarcity as well as pursuing high performance culture This research has critically examined a wide range of academic sources including books, articles, models… related to the stated issue The researcher has attempted to assess the complexity in accepted components of a reward system consisting of both extrinsic and intrinsic elements Moreover, he also employed several content/needs theories with the aim of critically explain why different people are motivated to work by very different rewards Looking the problem from another angle, the study of literature also touches the part of defining and measuring employee performance which is the stepping stone for any reward system Based on the secondary research‟s findings, the author can partly prove the positive correlation between desired reward system and high employee performance Last but not least, the author strongly believes that the primary research, once been done, can comprehensively test the effectiveness of reward system in motivating and generating good performance Acknowledgement Firstly, I would like to make the most of this opportunity to thank my family who has given me a lucky chance to study in HSB In addition, they have also reassured me all the time through their knowledge and experiences in order to accomplish this project Secondly, I would like to thank Mr Nguyen The Hiep, Human resource manager in BIDV- Hai Ba Trung branch, who gave me ideas for this topic, so I can gain all general information for this research project Thirdly, I would like to show my sincere gratitude to Assos.Prof.Dr Nguyen Ngoc Thang for his enthusiastic support throughout the process of composing this project Without his valuable advices, I would not able to accomplish the project with a clear orientation Lastly, big thanks to all my colleagues at work, all my friends in HSB, especially all HSB - MBA10, who supported me with laughter and joy, and comforted me when I was depressed Owing to the fact that limited time and ability so it cannot avoid some mistakes in my research topic I look forward to receiving comments from lecturers and colleagues in order have more accomplished and better achieved of research result Thank you again for those who supported me, and best wishes to all Date: 22th August, 2017 Le Ngoc Minh Thu Tables of Contents Declaration i Abstract ii Acknowledgement iii List of figures vii List of Tables viii Chapter 1: General Introduction 1.1 Background Information and Rationale 1.2 Aims of research Objects of research Scope of research 1.4 Geographical scope 1.4.2 Time/Period scope 1.4.3 Research questions 1.5 Research methodology 1.6 Thesis structure Chapter 2: Theoretical background about reward management impact to employees' performance 2.1 Statement of the issues 2.2 The concept of employee reward system 2.2.1 Total reward 2.2.2 Maslow‟s hierarchy of needs 2.2.3 Herzberg‟s two-factor theory 10 2.2.4 Job characteristics model 12 2.3 The nature of performance management 14 2.3.1 The aims of performance management system 16 2.3.2 Measuring employees‟ performance 18 Chapter 3: Methodology 21 3.1 Research approach 21 3.2 Sampling and Data collection 22 3.3 Selection of respondents 24 3.4 Survey/Questionnaires 25 3.5 In - depth Interviews 25 3.6 Interviewees 25 3.7 Limitations 26 Chapter 4: Assessing the situation of reward management on employees' performance at The Joint stock commercial bank of investment and development of Vietnam (BIDV) 27 4.1 BIDV - Organizational background influences to rewards management on employees' performance 27 4.1.1 BIDV - The foundation and development 28 4.1.2 BIDV - Organizational and managerial structure 30 4.1.3 Overview of BIDV business operation 31 4.1.4 BIDV – Evaluation of Human resources strategies 34 4.2 The situation of reward management impacts on employee' performance at BIDV 36 4.3 Analyzing 37 4.3.1 For the Questionnaires 37 4.3.2 The complication rising within the interview 46 4.4 Results 48 4.4.1 To evaluate the impact of rewards on employees‟ performances at BIDV 48 4.4.2 To determine the most important rewards that motivates employees at BIDV 48 4.4.3 To offer recommendations on how reward system of BIDV can be improved in order to improve employee performance 48 4.5 Discussion 49 4.5.1 To assess the purposes and directions in delivering reward system at BIDV 49 4.5.2 To analyse the employee‟s perception toward total reward system 50 4.5.3 To measure the effectiveness of the reward system on employees 51 Chapter 5: Conclusion and Recommendation 52 5.1 Conclusion 52 5.2 Recommendation 53 References 55 APPENDIX 01 59 APPENDIX 02 64 List of figures Figure 1: The reward system Figure 2: Components of total reward system Figure 3: Maslow‟s hierarchy of needs Figure 4: The Herzberg„s two-factor theory 11 Figure 5: The Job Characteristics Model 12 Figure 6: What is performance? 15 Figure 7: The performance management cycle 16 Figure 8: The matrix of human resource processes 17 Figure 9: The conceptual framework 20 Figure 10: Organizational Chart at BIDV 30 Figure 11: Managerial Chart of BIDV 31 Figure 11: BIDV main Products and Services 32 Figure 13: Key Human resources at BIDV 35 Figure 14: Age of respondents 39 List of Tables Table 1: Key Performance indicators at BIDV 2012-2016 33 Table 2: Gender of respondents 38 Table 3: Level of education 39 Table 4: Financial Reward systems currently used in BIDV 40 Table 5: The current level of employees' satisfaction about financial rewards at BIDV 40 Table 6: Non- financial Reward systems currently used in BIDV 41 Table 7: The current level of employees' satisfaction about non-financial rewards at BIDV 42 Table 8: The current level of employees' satisfaction for Commonly increasing salary 42 Table 9: The current level of employees' satisfaction in Increasing job performance when get a bonus 43 Table 10: The current level of staffs‟ agree/disagree when they have prompted by their employers 43 Table 11: The current level of staffs‟ agree/disagree when they have Praise for a job well done from supervisor 44 Table 12: The current level of staffs‟ agree/disagree when they get formal recognition 45 Table 13: The current level of staffs‟ agree/disagree when they get in-formal recognition 45 Table 14: The current level of staffs‟ agree/disagree of the point “overall non – financial rewards encourages the workers” 46 2004; Dubrin, 2009) However, some contrary result may exist amongst the sample under the effects of the participants‟ own background (Age, education level, gender, economic press) and others‟ (family, spouse…) those can determining which needs should be met and how to satisfy those (Arnold et al 2008) 4.5.3 To measure the effectiveness of the reward system on employees It is predictable that the sample of the survey can be divided into two groups: one is satisfied and the other is dissatisfied with the current reward systems off BIDV After reviewing the historical data on different performance dimensions (intend to leave, productivity, behaviors) of the two groups, the author can establish the relationship between employee satisfaction and performance The researcher will hope to prove the strong link between high quality service and specific type of rewards Moreover, in the case of BIDV, the organization is Vietnam well-known for its strong culture on employee empowerment which is a crucial part of intrinsic rewards Employees working in any BIDV can expected to be treated as capable, valuable, and self-guided in complete their tasks of giving high quality of service Consequently, the authors will experience the great difference between the results of employees from different department and bank branches Chapter 5: Conclusion and Recommendation 5.1 Conclusion It is the fact that the international banking industry is on a steady rise for the next five years, hence, leaves a heavy burden of the limited human resource market of the country In actuality, Human resource furnishes the basis for an organization to reach sustainable competitive advantage At-tracting and retaining competent workforce is a challenging responsibility for every firm It is notable that employees‟ performance can be enhanced when employees are motivated to attain their goals Accordingly, banking establishments, especially those of biggest joint stock company category, must bring the theories of employee motivation into the practice of building up highly effective reward systems with the aims of attracting, retaining, motivating and satisfying employees In this study, the author has put an effort on critically assessing the relationship between the effectiveness of reward system used by hotel and the level of employees‟ performance The Vietnam banking industry (concentrate: BIDV) has been chosen as the background for the study due to the need of having a critical study on the employee reward system in the Eastern context, which is experiencing disfavored comments on such practice The secondary research done by the author has proved that employees have their own particular needs or motivators those can be included inside a reward system in order to encourage the delivering of the best performance In other words, some rewards are proved to be more appropriate than the others in motivating employees as well as providing job satisfaction In addition, it is also clarified that the performance management process has a critical role in determining, measuring, and rewarding employee performance (qualitative and quantitative) By that way, the performance management system can be regarded as the bridge between proper reward and good performance It can be recognized that the basic goal of the research has been achieved through the reviewing of the existing literature However, the primary research is still necessary in providing exact research findings those are particular for the new Eastern context of HRM Rewards, especially intrinsic, are proved to be effective in the European and American context Can they actually motivate the Vietnamese employees in the same way? 5.2 Recommendation In fact, workforces are the biggest assets of any corporates in term of establishing and maintaining the customers‟ satisfaction, thus, building employee loyalty is a compulsory element as important as customer trustworthiness Therefore, along with attending to the EPMS, it is necessary for the BIDV to upgrade and develop other policies and strategies to come closer employees which identifies what employees‟ needs and expectations in the same way to recognize what customers‟ necessities In order to achieve employee loyalty, they need to improve the working atmosphere which is fulfilled of friendliness, conviction and truthfulness surrounded by the corporation "Let's give the voice to employees; thus, they can contribute different points of view to the Reward management and Employee performance management of organization" As such they will be feeling like they are a part of organizations and the firms always take care them closely It is also the main intention of organization in carrying out management strategy Firstly, I would proposed to any researcher considering a similar study, that a more accurate quantitative approach in the form of a questionnaires or trend analysis would be beneficial to get a more inclusive explanation of the requirement and expectancy of the contemporary workforce and to estimate the successfulness of BIDV reward system particularly and reward management generally Secondly, the study revealed that both extrinsic and intrinsic rewards are active in motivating employees towards great performance It follows therefore that should alarm to the Human resource department in co-occurrence with senior management to be more committed regarding the setting of appropriate incentive plans because that will encourage employees to be more purposeful and hence increase their performance It is also recommended that there should be a consistency between the organization overall strategies and the reward packages that is given to employees The link between the firm‟s strategies and reward system and programs will lead to the achievement of concerned parties mutual goals and objectives Nevertheless, more specifically which includes: It is the duty of the Human resource department in co-occurrence with senior management at all levels to find outs what actually motivates individual employees most, so that incentives can be effective applied to achieved enhanced performance The Human resource department in co-occurrence with senior management should more reconsider the contemporary wages scale in which this will not only encourage workers but also expand worker‟s performance and decrease employee‟s turnover Moreover, the research disclosed that extra payment/benefits are given to managers only and not typical employees this has engendered discontentment and demotivation of employees as they see organization performance as collective action The Human resource department in co-occurrence with senior management should expand innovative benefits plan that also concede the endeavor of nonmanagerial employees This will not only encourage the staff to work harder during the year but will also conduct harmony in the firm and persuade team work and general greater performance in the business The investigation exhibited that contemporary reward management especially payment in the conveyed commercial banks in Vietnam, BIDV are motivating workers enough The Human resources department of the BIDV in cooccurrence with senior management should evolve suitable motivation plan using of both extrinsic and intrinsic rewards aspects that will push the staff to be purposeful and increase their performance References Books Armstrong, M 2006 People and organisations: Employee reward, 3rd ed London: Cromwell Press Armstrong, M 2010 Armstrong’s handbooks of reward management practice improve performance through reward, 3rd ed London: Kogan Page Armstrong, M and Baron, A 1998a Performance management – The new relatives London: IDP Armstrong, M and Murlis, H 2007 Reward management a hand book of remuneration strategy and practice, 5th ed London: Kogan Page Bach, S 1999 From performance appraisal to performance management In: Bach, S and Sisson, K., ed Personnel Management: A Comprehensive Guide to Theory and Practice Blackwell: Oxford, 111–36 Boxall, P F and Purcell, J 2003 Strategy and human resource management London: Palgrave Macmillan Deeprose, D 2006 How to recognize and reward employees, 2nd ed New York: American Management Association Dess, G.G., Lumpkin, G.T., and Taylor, M.L 2004 Strategic management New York: McGraw-Hill Dubrin, A 2009 Essentials of management, 8th ed New York: Cengage Learning Harrison, J.S 2003 Strategic management of resources and relationships New York: John Wiley & Sons Hergenhahn, B.R 2005 An introduction to the history of psychology, 5th ed California: Wadsworth Herzberg, F 1966 Work and the nature of man New York: Staples Press Mabey, C., Salaman, G., and Storey, J 2005 Human resource management: A strategic introduction, 2nd ed London: Blackwell Manus, T M and Graham, M D 2003 Creating a total rewards strategy New York: American Management Association Noe, A.R., Hollenbeck, J.R., Gerhart, B., and Wright, P.M 2008 Human resource management: Gaining a competitive advantage, 6th ed New York: McGraw-Hill Education Porter, L.W and Lawler, E.E III 1968 Managerial attitudes and performance Illinois: Richard D Irwin, Inc Peter S.Rose (2004), Quản trị ngân hàng thương mại, Nhà xuất Tài chính, Hà Nội Phan Thị Thu Hà (2007), Ngân hàng thương mại, Nhà xuất Đại học kinh tế quốc dân, Hà Nội Rees, D And McBain, R 2004 People management challenges and opportunities New York: Palgrave Macmillan Shields, J 2004 Managing employee performance and reward concepts, practices, strategies New York: Cambridge University Press Thorpe, R And Homan, G 2000 Strategic reward systems London: Pearson Education Torrington, D., Hall, L., and Taylor, S 2008.Human resource management, 7th ed Edinburgh Gate: Pearson Education Vroom, V.J 1964 Work and motivation New York: Wiley Williams, R S 2006 Managing employee performance: design and implementation in organizations Singapore: Thompson Learning Online Documents Aon Hewitt 2010 2015 Trends in Global Employee Engagement http://www.aon.com/ Accessed April 2015 Bao, T.T., Bernice, O., Scott, W 2015 Vietnam Banking Industry Report http://www.duxtonam.com/ Accessed 23 Jan 2015 BIDV Annual Report 2015 http://investor.bidv.com.vn/ Accessed 10 May 2016 BIDV Annual Report 2016 http://investor.bidv.com.vn/ Accessed 25 May 2017 Credit Suisse 2017 Vietnam Banks Sector https://research-doc.creditsuisse.com/ Accessed 10 February 2017 General Electric 2000 Annual report, Grant, T 2016 Doing business in Vietnam 2016 http://www.grantthornton.com.vn/ Accessed 2016 HayGroup 2010 Rewarding Vietnam: Getting off the talent - go - round http://www.chicagocompensation.org Accessed April 2010 IntellAsia 2017 Finance Vietnam Finance and Business News http://www.hkbav.org/ Accessed April 2017 Rashmi 2009 Reward management process.http://www.churmura.com/ Accessed November 17 2010 Online Journal articles/Advance online public articles Awasthi, V., Chow, C W., and Wu, A 2001 evaluation and reward systems: An experimental investigation The International Journal of Accounting, 36, 291309 Dean, J.W and Brass, D.J 1985 Social interaction and the perception of job characteristics in an organization Human Relations, 38 (6): 571-582 Fey, C., Bjórkman, I., & Pavlovskaya, A 2000 The effect of HRM practices on firm performance in Russia International Journal of Human Resource Management, 11: 1−18 Gibson, F.K and Teasley, C.E 1973 The humanistic model of organizational motivation: a review of research support Public administration review, 33, 89-96 Hackman, J.R and Oldham, G.R 1980 Development of the Job Diagnostic Survey Journal of Houldworth, E 2004 Managing performance In: Rees, D and McBain, R eds People management challenges and opportunities New York: Palgrave Macmillan 73-99 Kulik, C.T., Hackman, J.R and Oldham, G.R 1987 Work design as an approach to person-environment fit Journal of Vocational Behaviour, 31: 278-296 Maslow, A.H 1943 A theory of human motivation Psychological Review, 50: 370-396 Murlis, H 2004 Managing rewards In: Rees, D and McBain, R ed People management challenges and opportunities New York: Palgrave Macmillan, 152170 Porter, L W 1961 A study of perceived need satisfactions in bottom and middle management jobs Journal of applied psychology, 45(1): 1-10 Thang, N N., Thu, N V., & Buyens, D 2008 The impact of training on firm performance: case of Vietnam Working Paper Series, Faculty of Economics and Business Administration, Ghent University, 08/538: 1–26 Tung, N.N., Mai N.K., and Phuong V.N 2014 Factor affecting employees' organizational commitment - A case study of Banking Staff in Ho Chi Minh City, Vietnam Journal of Advanced Management Science, advance online publication March doi: 10.12720/joams.2.1.7-11 Wahba, M.A and Bridwell, L.G 1976 Maslow reconsidered: A review of research on the need hierarchy theory Organizational Behaviour and Human Performance, 15: 212–240 WorldatWork 2000 Total rewards: from strategy to implementation Arizona: WorldatWork Wright, P.M and McMahan, G.C 1992 Alternative theoretical perspectives for strategic human resource management Journal of Management, 18: 295–320 APPENDIX 01 QUESTIONNAIRES FOR STAFF Dear Sir/Madam, My name is Le Ngoc Minh Thu, currently a student of the program “Master of Administration” of Vietnam National University, Ha Noi School of Business At this time, I am doing the master thesis with the topic: “The influences of reward management on the performance of employees within Vietnam banking sector; a case study of BIDV” Through this survey, your contributive views will support me complete the research, concurrently, it provides the highly useful data and details to put outside policies and advice in order to improve HRM in general and People‟s Entrust of BIDV in particularly Please take a few minutes from your free time to fulfill this survey below I hope to receive your enthusiastic cooperation All of your personal information and options will be kept confidentially If you have any questions or concerns about this study, please contact with me via email Guides: Please answer all the questions by picking the option that suit best Part I Demographic Data Tick only one appropriate answer Gender of respondent Male Female Age of the respondents Below 30 years 30 -40 years 40-50 years Above 50 years Which level of education you possess? Certificate Diploma Masters Degree Other Specify Part To determine the reward system currently used in BIDV What are reward systems currently used in BIDV? Financial Promotion Training and Development Other… … Are you satisfied with the current level of financial rewards? Strongly satisfied Satisfied Dissatisfied Strongly Dissatisfied Which of the following non – financial rewards are used by BIDV? Formal recognition (certificate, employee of the month) Informal recognition Job allowance Send out for a training/serminar End of the year social part Other …………… Are you satisfied with the current level of non – financial rewards? Strongly satisfied Satisfied Dissatisfied Strongly Dissatisfied Part To access the effect of extrinsic rewards (Salary, bonus, Remuneration and promotion) in organization performance What are the effects of extrinsic rewards on employee performance? Please indicate the extent you agree or disagree with each of the following statement using the given scale No Expression of views Strongly agree Agree Disagree Strong Disagree Commonly of increase in salary level When I get a bonus enlargement my job performance increase When Im promoted by my employer it really motivates me to work harder during the year When Im better wages it increase my job performance Part To access the effect of intrinsic rewards (Praise and recognition) on employee performance What are the effects of intrinsic rewards (Praise and recognition) on employee performance? Please indicate the extent you agree or disagree with each of the following statement using the given scale No Expression of views Strongly agree Praise for a job well done from my supervior motivate me to perform my job better When I get formal recognition such as certificate of employee after month, certificate of good customer service my job performance increases Informal recognition (such as thank you, very done, you are star) motivates me to improve my performance Overall non-financial rewards encourage employees to improve bank performance Agree Disagree Strong Disagree Part What other comments can you make about the effect role of reward management on employee performance? Write your comment below THANK YOU! APPENDIX 02 INDEPTH INTERVIEW TO FOCUS GROUPS Please tell me a scenario of reward systems you use or get in BIDV branch? ……………………………………………………………………………………… ……………………………………………………………………………………… Would you modify something about the reward system when apply in our bank? ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… Which reward system that BIDV uses you prefer? ……………………………………………………………………………………… ……………………………………………………………………………………… What form of intrinsic reward you use in BIDV branch? ……………………………………………………………………………………… ……………………………………………………………………………………… What form of extrinsic reward you use in BIDV branch? ……………………………………………………………………………………… ……………………………………………………………………………………… What you think are the effectiveness of extrinsic rewards on employee performance in BIDV? ……………………………………………………………………………………… ……………………………………………………………………………………… What you think are the effectiveness of intrinsic rewards on employee performance in BIDV? ……………………………………………………………………………………… ……………………………………………………………………………………… What you propose to be the best means of contributing high job/employee performance in Joint stock commercial Banks in Vietnam like BIDV? ……………………………………………………………………………………… ……………………………………………………………………………………… What other comments can you make about the use of extrinsic and intrinstic reward for gaining employee performances of commercial banks like BIDV? ……………………………………………………………………………………… ……………………………………………………………………………………… Thank you for your time! Do you feel motivated by the reward systems? Is there other reward that would motivate you? What kind of reward motivates you the most? ... (includes: Retail Banking Department and Banking Support Department) and 03 different BIDV banking branches in Vietnam namely: BIDV Hai Ba Trung branch, BIDV Da Nang branch, BIDV TP Ho Chi Minh branch)... to contingent pay and non-financial units of total reward However, what are ? ?performance? ?? and ? ?performance management? ??? In this part, the author will critically assess the definitions of the. .. 2.3 The nature of performance management As it can be seen from the figure of the component of reward management, performance management is regarded as one of the centre elements which is linked