PROBLEM IDENTIFICATION
From Vice Director’s perspective
There are 2 main reasons from Vice Director’s perspective:
- No opportunity for promotion -> Some good workers move job
- Large orders and some workers leave -> pressure of work on the current workers -> work overtime too much -> tired -> leave the job
The Vice Director noted that some employees left the company due to a lack of promotional opportunities, seeking better positions at larger, more renowned firms This exodus resulted in increased workloads for remaining staff as they covered for their departed colleagues while waiting for new hires Compounding the issue, the company received significant orders during this time, forcing current workers to put in overtime, which led to fatigue and heightened work pressure Consequently, this environment prompted additional resignations among the workforce.
Rate Some workers quitted job
Excessive overtime due to increased workloads from departed colleagues and the pressure to fulfill large orders has led to significant stress among employees, resulting in a wave of resignations The primary issue driving workers to leave their jobs is the overwhelming number of overtime hours required.
The company's location played a significant role in employee recruitment, as noted by the Vice Director, who suggested that many candidates may have chosen the job due to its proximity to their homes or the city center Additionally, the company plans to hire a bus service to accommodate workers living farther away, ensuring better access to employment opportunities.
Initially, the salaries of skateboard workers were on par with those of other employees, but the company implemented annual performance evaluations that led to salary increases According to the Vice Director, while other workers received salary increases of 3% to 5%, skateboard workers enjoyed raises of 5% to 8%, along with higher monthly bonuses She mentioned that if these workers considered leaving due to salary concerns, the company might contemplate raising their salaries, although any increase would be capped at VND 500,000 per month and would depend on individual performance and experience Nonetheless, she did not believe that salary was the primary reason for employee resignations.
From workers perspective
Interviews with resigned employees offer valuable insights into their reasons for leaving the company, shedding light on specific issues they faced These discussions help clarify employee expectations, enabling the organization to identify effective solutions to address the underlying problems.
The interviews conducted with four former skateboard production workers revealed significant insights into their experiences The participants, aged 30 to 35, expressed a common sentiment of exhaustion due to excessive overtime, particularly on Tuesdays and Thursdays, in addition to the regular overtime on Mondays, Wednesdays, and Fridays This demanding schedule has left them feeling fatigued and deprived of quality time with their families Despite acknowledging the company's commendable benefits, such as holiday bonuses and annual salary evaluations, Mr Thanh emphasized that the overwhelming work hours hinder their ability to spend time with loved ones.
In recent months, our team has faced increased workloads, requiring us to work overtime on Tuesdays and Thursdays in addition to our usual late hours on Mondays, Wednesdays, and Fridays until 8 PM.
The company's location posed a significant inconvenience for employees, as it was far from their homes, leading to long commutes and fatigue Mr Thuan shared, “Initially, I was aware of the distance but lacked experience at the time The company offered appealing benefits, including good insurance, bonuses, and a competitive salary, which motivated me to stay However, when a friend presented a job opportunity closer to home with a similar salary, I decided to make the switch.”
Workers expressed dissatisfaction with their supervisor, citing her strict adherence to rules over empathy One employee recounted an incident where he received a phone call in the factory due to his child's illness, leading to a reprimand rather than understanding from the supervisor, resulting in a lost bonus He stated, “At that time, my child had a fever, and I was anxious, so I answered the call without asking for permission Not every situation requires strict rule enforcement; sometimes a reminder is sufficient.” Additionally, he faced another reprimand after a disagreement with a colleague, feeling it was unjust as he believed he was not at fault.
Workers expressed concerns about salary fairness relative to their qualifications, with Mr Long stating, “This salary is OK for sewing workers, but it is not fair for us, as our positions require higher mechanical skills and knowledge.” Despite "Skateboard workers" receiving higher bonuses than "sewing workers," they prefer a higher base salary, viewing it as more stable and reliable than variable bonuses.
From supervisor perspective
The supervisor felt overwhelmed by the influx of customer orders, realizing the importance of consulting with her team beforehand She believed that discussing these large orders with the workers would allow them to better manage their schedules and allocate time effectively for the tasks ahead.
In an interview with Mrs Nguyen, the supervisor of the third factory, it was revealed that excessive overtime is the primary reason for employee resignations.
Lack of discussion with the workers
The production department faced challenges after accepting large orders despite a lack of available workers The supervisor explained that the team believed they could manage overtime due to a previous lull in orders, and they were motivated by the prospect of higher overtime pay for workers However, this decision was made without consulting the staff, leading to concerns about employee workload and potential burnout The supervisor feared that declining orders could result in losing customers to competitors, but ultimately, the lack of communication and failure to forecast the impacts of accepting these large orders highlighted significant oversight in their decision-making process.
B/ LITERATURE REVIEW OF THE PROBLEMS
Reasons of High turnover rate
According to Smith 4 , there are 12 reasons for employee turnover:
- Rude behavior: everyday indignities have an negative influence on productivity and result in good employees quitting
Work-life imbalance often arises when organizations undergo downsizing or restructuring, leading to demands for longer working hours and weekend work In such situations, employees are frequently faced with the difficult choice between maintaining their personal lives and meeting the increased work expectations.
- The job did not meet expectations: it is too common when the initial description of job and what was promised during the interview are different to the real work
Hiring unqualified employees can lead to significant misalignment within an organization It is crucial for companies to ensure that new hires possess the necessary skills and align with the organization's goals Managers should avoid attempting to make a poor fit work, as this can hinder overall productivity and team cohesion.
Feeling undervalued can significantly impact employee motivation and productivity When individuals receive recognition for their hard work, it fosters a sense of appreciation and encourages them to contribute more to the organization Effective employee recognition not only acknowledges positive efforts but also strengthens communication and boosts morale within the workplace.
Effective coaching and feedback are essential for employee performance improvement When employers provide constructive feedback, it fosters a strong connection between employees and management, enhancing overall organizational engagement.
- Decision-making ability is lacking: Employees need “empowerment” of decision- making so that they embrace the trust with enthusiasm and have more responsibility for their job
Many managers are promoted for their strong performance and results, yet this does not guarantee their leadership abilities While people skills can be cultivated, having a natural talent for connecting with and motivating others is beneficial Effective managers should exemplify the behaviors they wish to see, reinforcing positive actions through recognition and reward.
Organizational instability often leads to frequent changes in goals, directions, and plans, leaving employees uncertain about their roles and responsibilities This lack of clarity creates confusion and hinders overall efficiency in the workplace.
Frozen raises and promotions can hinder an organization's future growth, as they are typically implemented for economic reasons Without competitive wages and benefits, retaining employees becomes increasingly challenging, ultimately impacting the company's overall development.
When a company's revenues and profits rise alongside an increased workload, it is essential for employers to reassess their overall compensation packages Employees who contribute to the company's success expect recognition and fair consideration in their compensation.
Many talented employees leave organizations when they feel stuck in unfulfilling roles Successful companies prioritize employee development by offering opportunities to acquire new skills and take on additional responsibilities This approach not only fosters a sense of growth but also encourages employees to remain loyal to the organization.
Besides these reasons, Querrey 5 also indicated five main reasons of high turnover rate as below:
A competitive salary and attractive benefit packages play a crucial role in employee retention When companies offer significant pay raises and fair compensation, they can motivate talented staff to enhance their contributions Conversely, if salary offerings are low, skilled employees may be enticed to leave for better opportunities elsewhere.
- Poor management: “Poorly trained managers and supervisors who lack conflict resolution skills can all play a role in creating an inhospitable work environment.”
Monitoring employee interactions with supervisors and the frequency of workplace conflicts is essential for companies This approach helps organizations understand employee dynamics and improve retention strategies.
Employees often choose to leave their jobs when their contributions go unrecognized Implementing an internal recognition program and rewarding employees for their efforts can effectively enhance employee retention.
Problem 1: Excessive Working Hours
a) Definition of Long working time
The normal working hours for labor is not more than 48 hours per week with the average
8 hours per day and 40 hours per week is encouraged by government for the best of productivity
According to the issue Beswick 6 et al discussed Harrington’s research, working more than 48 hours means working extended hours Similarly, Beswick 6 also mentioned The
The 1993 European Directive on Working Time establishes essential regulations for employee work hours, stipulating a maximum of 48 hours per week averaged over a 17-week period It mandates a minimum daily rest period of 11 consecutive hours and requires at least one day of rest per week, averaged over a 14-day timeframe.
KODZ et al 7 also defined long working hours as more than 48 hours a week b) Problems of excessive working hours
Excessive work hours are a significant issue in Chinese manufacturing facilities, as highlighted by Verite 8 Internal challenges like broken machinery and high employee turnover, combined with external pressures such as urgent customer orders, often lead factory managers to extend work hours for all employees as a quick fix to these problems.
Similar to Chinese factories case, in the case of Parapex, the workers had to work overtime too much because the supervisor of factory receive the rush order from customers
Excessive working hours can lead to numerous negative consequences, including increased health issues, heightened safety risks, decreased productivity, higher turnover rates, lowered employee morale, and challenges in family life.
When a business is more growth, more customers, there will take more work and cost
Paying employees extra wages for overtime may appear to boost output at a low cost, but it can negatively impact the business over time Overtime often leads to higher expenses without a corresponding increase in productivity, and it fosters an unhealthy workplace culture that results in increased stress, more sick days, and higher employee turnover rates.
Excessive working hours at Parapex have led to high turnover rates and a significant decline in profits Employees reported that the demanding workload required them to work long hours to meet product distribution needs, resulting in fatigue and stress This lack of work-life balance ultimately prompted many workers to leave the company Consequently, the issue of excessive working hours directly contributes to the high turnover rate at Parapex.
Excessive overtime can negatively impact businesses, leading to employee burnout and frustration When employees reach their breaking point, they often seek new job opportunities, resulting in high turnover rates and loss of talent.
Long working hours significantly impact staff turnover and recruitment challenges, as highlighted by Kodz et al Their research indicates that a considerable 40 percent of managers believe that work pressure contributes to high turnover rates This correlation between extended work hours and employee retention issues underscores the importance of addressing work-life balance in organizations.
Overtime can offer advantages for both employees and companies by providing additional income and helping to manage unexpected absences However, excessive overtime can lead to serious consequences, including health issues, safety risks, decreased productivity, and higher absenteeism rates A particularly concerning outcome is the increased turnover rate, which often stems from a lack of work-life balance and employee fatigue.
Reducing long working hours is linked to increased employment and productivity, as extended hours can disrupt sleep and negatively impact task performance, leading to higher error rates, slower work pace, and poor social behavior Furthermore, long hours can diminish employee motivation and contribute to increased absenteeism and turnover rates Research indicates a significant correlation between lengthy work hours and elevated staff turnover, with many employers expressing concern that such hours may result in higher sickness absence and turnover rates.
Excessive overtime hours, even when compensated adequately, can lead to employee resignations due to health risks and conflicts with family responsibilities, as highlighted by the Alberta Institute Research by Beckers et al further supports this, indicating that long working hours negatively impact health by reducing recovery time, leading to issues such as high blood pressure, increased risk of cardiovascular disease, diabetes, and mental fatigue.
In the case of Parapex, the pressure from supervisors to increase productivity due to large orders resulted in employee fatigue and stress, ultimately causing many workers to leave the company This high turnover rate significantly impacted the company's profits Therefore, addressing the issue of excessive overtime is crucial for improving employee retention and enhancing overall profitability.
Problem 2: Low Salary
Salary plays a crucial role in influencing employee turnover rates When competitors offer significantly higher wages, employees may be tempted to leave their current positions, leading to increased turnover To mitigate this risk, companies must ensure their pay rates are competitive and align with industry standards Even if budget constraints limit the ability to provide substantial salary increases or comprehensive benefits, employers can explore alternative compensation methods, such as offering flexible work hours or paid time off, to retain talent and stay competitive in the market.
The Overture Group 16 echoes Querrey's view that a significant factor contributing to high employee turnover is inadequate salaries or lack of salary increases During periods of low growth, companies often face severe budget cuts, resulting in minimal raises for current employees As competing firms focus on enhancing their talent pool by offering higher salaries, existing employees may be tempted to seek new job opportunities.
However, although the salary is necessary, the intrinsic motivation seems to be more important The employees always expect their contribution to be evaluated by employers
During challenging economic times, employees often remain loyal to their company, anticipating recognition and fair compensation for their dedication once the situation improves.
Workers at Parapex reported dissatisfaction with their salaries, feeling that their compensation did not reflect their experience and efforts This inadequate pay contributed to their decision to leave the company, resulting in a high turnover rate.
Problem 3: Strict Punishment Policy
According to Vaden 17, Casison argues that strict punishment policies lead to decreased productivity, high turnover rates, low morale, and lost profits Such policies negatively impact employee job performance and satisfaction, as negative punishment can remove reinforcing stimuli While these policies may yield short-term results, they ultimately harm the essential positive relationship between employees and managers, which is crucial for long-term company development.
“Using punishment as a control tool may foster an environment of fear in the workplace
Inappropriately applied punishment can lead to employees fearing to take risks, which is essential for company growth and competitiveness Vaden (2017) identifies four key risks that hinder employees from seizing opportunities: fear of failure, fear of success, fear of judgment from others, and fear of uncertainty Consequently, a strict punishment policy can stifle both employee development and overall company progress.
In the case of Parapex, the implementation of a strict punishment policy significantly contributed to a high employee turnover rate This approach negatively impacted job satisfaction among workers, leading to feelings of depression and a diminished desire to contribute to the company.
C/ POTENTIAL PROBLEMS AND MAIN PROBLEM IS SELECTED TO
Interviews with problem owners, former employees, and supervisors, alongside a literature review, identified four key issues: excessive overtime, low salaries, a strict punishment policy, and the company's remote location Among these, excessive working overtime has been chosen as the primary focus of this report due to its feasibility for resolution.
Relocating the company to the city center is not feasible due to high costs and time constraints Additionally, the initial punishment policy established during the company's early operations cannot be altered quickly.
Changing company policy requires careful consideration and time Due to budget constraints, significant salary increases may not be feasible, as the owner believes current compensation is appropriate for employees Consequently, excessive overtime has been identified as a key issue that necessitates an effective solution plan promptly.
D/ INITIAL CAUSE AND EFFECTS MAP
High Turnover Rate Strict Punishment
Far Location of company Excessive working overtime
CAUSES AND EFFECTS OF THE REAL PROBLEM
Causes and effects from Human Resource perspective
The factory supervisor's inadequate training resulted in a significant skills gap in planning, leading to the acceptance of large orders despite insufficient production staff Consequently, workers were forced to work excessive overtime, creating immense pressure that ultimately drove many to resign.
Main reasons of lack of training
- Company considered carefully the education background and working experience to select the candidates for recruiting position
- The boss believed that training in the real job was more effective rather than studying theory in class
Mrs Trang, an HR officer, highlighted that the primary issue stemmed from the supervisor's insufficient management experience and a lack of essential skills, particularly in forecasting and planning She stated, "Nguyen lacked the necessary experience in management and failed to create an effective production plan, resulting in a shortage of workers for production."
To manage significant orders, she often requested our boss to hire additional staff or consider reallocating workers from other factories The shortage of workers posed a serious challenge, leading to increased stress and pressure on employees when they were overworked.
Mrs Trang echoed the Vice President's concerns, highlighting that Nguyen's inadequate training was the primary issue She emphasized, "Nguyen was not trained enough, which resulted in a deficiency in essential skills like forecasting and planning."
The reasons of lack of training was that company considered carefully the education background and working experience to select the candidates for recruiting position
The boss emphasized that on-the-job training is more effective and cost-efficient than traditional schooling Mrs Trang noted, “Our company typically encourages experienced staff to mentor newcomers, as hands-on experience allows new employees to better grasp their roles Training through courses often leaves employees with only theoretical knowledge, which is less beneficial and incurs higher costs.”
Receiving too much orders
According to W.Blog 10, as a business grows, it attracts more customers, leading to an increase in orders and workload Consequently, working overtime emerges as an effective strategy for companies to boost output while minimizing costs.
There are many reasons of long working hours such as increase salary, the increase volume of work, culture of long working hours, occupational commitment, and career enhancement (IES 13 )
The supervisor of Parapex's third factory faced an overwhelming number of orders without adequate consideration for the factory's capacity and workforce To meet the demand and ensure timely order fulfillment, she opted to implement overtime work as a solution.
2) Effects of poor decision making
Managers' decisions can significantly impact both departmental issues and overarching company objectives, with profitability being a key factor A poor managerial decision can lead to substantial negative effects on the company's profits.
Poor decision-making can significantly impact human resources and production, as highlighted by Edmunds Overloading staff can lead to the loss of key employees, underscoring the importance of balanced workload management.
3) Decision making skill and reasons of poor decision making
According to Alton 19 , the role of “decider” is one of crucial roles in business
Alton 19 mentioned that decision making is like any other skills that need to be trained and practiced If people did not have experienced in decision making, their performance would be suffered
There are many reasons to make the poor decision
A key factor in decision-making for large orders is the manager's commitment to thorough research This includes analyzing potential costs, assessing risks, evaluating current human resources, and understanding possible outcomes Additionally, reflecting on the impacts of similar past decisions can provide valuable insights, ensuring informed choices that mitigate risks and enhance success.
Alton 19 also stated that the second reason was “going on instinct” It means that some managers made decisions based on charisma and intuition
Many managers rush their decision-making due to time pressures, fearing that prolonged deliberation could lead to negative consequences Unfortunately, this haste often results in poor choices that can have even more serious repercussions.
Overall, decision making was considered as a necessary skill that needs to be trained for the better working performance
In Parapex case, the problem happened because of wrong decision of the supervisor
The decision to accept large orders without considering human resources and production challenges resulted in excessive overtime for workers, leading to fatigue and reduced family time Consequently, this situation caused a decline in workforce morale, ultimately resulting in decreased production, sales, and profits.
The Ministry of Business, Innovation and Employment highlights that a lack of essential skills and capabilities is a significant factor preventing employees from meeting the required quality standards in their work.
Especially, Odendaal 21 mentioned that lack of skills was the reason why many small, medium sized companies and micro enterprises (SMMEs) failed
Forecasting is the process of predicting future events based on available information It can be categorized into two main types: qualitative and quantitative forecasting Qualitative forecasting relies on non-numerical data to make predictions, while quantitative forecasting uses numerical data to inform future planning.
According to Clayton 23 , one of most important leadership skills is forecasting
Forecasting plays a crucial role in enhancing organizational profitability by identifying errors and alerting management to new factors Additionally, it serves as a protective measure against failures, enabling the early recognition of potential problems.
In Parapex case, if the supervisor of factory was good in forecasting, she could predict the potential problems that resignation of workers because of the pressure of job
Planning skills are essential abilities that enable individuals to anticipate future challenges and achieve their objectives while minimizing emotional, financial, physical, or social difficulties These skills empower you to make informed decisions and effectively implement strategies for success.
Effective planning is a crucial skill for successful entrepreneurs, as a single misstep can jeopardize their business It is essential for entrepreneurs to assess risks, benefits, and costs while developing their strategies Additionally, careful consideration of time and budget is necessary to turn their plans into reality.
Hill 26 stated that planning skill was so important in business because it assisted for efficient use of resources The planning provided the necessary information for making decisions about how to allocate resources effectively in order to reach the goal Planning also assists to maximize productivity and avoid the waste on projects
In the case of Parapex Company: The problem happened because the supervisor of the factory had lack of required skill and capacity in forecasting and planning skills
The decision to accept large orders without proper forecasting of human resource and production challenges resulted in excessive overtime for workers This led to fatigue and a lack of family time, ultimately causing them to stop working, which contributed to decreased production, sales, and profits.
7) Causes of lack of working skills
• Employees were promoted before being ready
Decision making skill and reasons of poor decision making
According to Alton 19 , the role of “decider” is one of crucial roles in business
Alton 19 mentioned that decision making is like any other skills that need to be trained and practiced If people did not have experienced in decision making, their performance would be suffered
There are many reasons to make the poor decision
One key reason for decision-making failures is insufficient research Managers must dedicate adequate time and effort to investigate potential costs, risks, current human resources, and expected outcomes, as well as to analyze the impacts of similar past decisions before accepting large orders.
Alton 19 also stated that the second reason was “going on instinct” It means that some managers made decisions based on charisma and intuition
Many managers often rush their decision-making due to time pressure, fearing that prolonged deliberation could lead to negative consequences However, this haste can result in poor choices, ultimately causing more significant issues in the long run.
Overall, decision making was considered as a necessary skill that needs to be trained for the better working performance
In Parapex case, the problem happened because of wrong decision of the supervisor
The decision to accept large orders without anticipating challenges in human resources and production resulted in excessive overtime for workers This led to fatigue and a lack of family time, ultimately causing employees to quit Consequently, the business faced reduced production levels, declining sales, and a drop in profits.
Lack of required skill
The Ministry of Business, Innovation and Employment highlights that a deficiency in essential skills and capabilities is a significant factor preventing employees from meeting the required quality standards in their work.
Especially, Odendaal 21 mentioned that lack of skills was the reason why many small, medium sized companies and micro enterprises (SMMEs) failed.
Forecasting skill
Forecasting is the process of predicting future events based on available information There are two main types of forecasting: qualitative and quantitative Qualitative forecasting relies on subjective judgment and insights rather than numerical data, while quantitative forecasting utilizes numerical data to make informed predictions and plans for the future.
According to Clayton 23 , one of most important leadership skills is forecasting
Forecasting plays a crucial role in enhancing organizational profitability by identifying errors and alerting management to new factors Additionally, it serves as a safeguard against potential failures, enabling the early recognition of possible issues.
In Parapex case, if the supervisor of factory was good in forecasting, she could predict the potential problems that resignation of workers because of the pressure of job.
Planning skills
Planning skills enable individuals to anticipate future challenges and achieve their objectives while mitigating emotional, financial, physical, or social difficulties These essential skills facilitate effective decision-making and implementation.
Effective planning is a crucial skill for successful entrepreneurs, as a single misstep can jeopardize their business (Newlands 25) It is essential for entrepreneurs to assess risks, benefits, and costs while developing their strategies Additionally, careful consideration of time and budget is necessary to transform their plans into reality.
Hill 26 stated that planning skill was so important in business because it assisted for efficient use of resources The planning provided the necessary information for making decisions about how to allocate resources effectively in order to reach the goal Planning also assists to maximize productivity and avoid the waste on projects
In the case of Parapex Company: The problem happened because the supervisor of the factory had lack of required skill and capacity in forecasting and planning skills
She accepted large orders without anticipating issues related to human resources and production, resulting in excessive overtime for workers This led to fatigue and insufficient family time, ultimately causing employees to quit, which contributed to decreased production, sales, and profits.
Causes of lack of working skills
• Employees were promoted before being ready
Bernard 27 also explained the cause of lack of skills was that the employees were promoted before being ready or they were assigned a new set of job duties In this case, some extra training or mentoring would solve the problems of performance
Similar to Bernard, George 28 stated that employers should have ensured that employees had enough training before moving them into a position of greater responsibilities or before changing their job duties
Mathis 29 stated that the employees would have lack of skill and perform at low level if they did not obtain enough training in all aspects of their job Mathis 29 also provided some reasons for lack of training:
- Avoiding training cost: The employers assumed employees had enough knowledge and skill to avoid the training cost
- Poor selection: The employer believed in the employee’s resume or application without testing carefully
Many leaders mistakenly believe that sending employees to training automatically ensures they are trained This assumption often leads to a lack of follow-up, where employers fail to debrief employees on what they learned and how to apply their new knowledge and skills effectively.
Employers often believe in the effectiveness of on-the-job training, assuming that employees gain valuable skills and experience through real work rather than traditional classroom training This approach emphasizes learning by doing, allowing employees to develop their competencies in a practical environment while minimizing training costs and time.
• Skills not match with the job
Mathis 29 also stated that employees will perform at a lower level if “their skill set does not match the job” Sometimes, managers recruit an employee with one particular job but then, assigning entirely different tasks In addition, managers sometimes arbitrarily stop employees from their assignments to execute other special projects
In the case of Parapex, the supervisor's lack of essential skills stemmed from insufficient training upon her promotion to manager This training deficit arose from three main factors: the company's desire to cut training costs, inadequate selection processes that relied solely on her experience and certifications without skill assessments, and a belief in on-the-job training over theoretical instruction Consequently, this lack of preparation resulted in poor decision-making, which contributed to the issue of excessive overtime within the organization.
POSSIBLE SOLUTION AND ACTION PLAN
Possible solution
Bong 31 indicated the steps employer can take to react an employees who has low performance because of lack of skills or knowledge to perform their job responsibility
To address performance issues effectively, employers should engage in open discussions with employees, as highlighted by Bong 30 Understanding the root causes of these issues is crucial If employees demonstrate motivation and a willingness to improve, the employer can then develop a strategic plan to resolve the problems During these meetings, it's essential to address mistakes and quality concerns collaboratively, fostering a supportive environment for growth and improvement.
- Develop a performance improvement plan: the performance improvement plan needs to ensure the agreement between employer and employee The employee needs to take responsibility for their own development (Bong 30 )
Receiving too much orders without consideration
Believing in on the job training
There are many ways to solve the problem of lack of skills and working ability
MindTools 31 indicated five main ways to overcome the performance problem caused by lack of skills and ability
- Resupply: provide the resources to do the job This assists to ensure that the employees have enough what they need to perform well and meet the required quality
- Retrain: provide additional training to employees “Explore with them whether they have the actual skills required to do what's expected”
- Refit: when two above measures are not sufficient, the employer needs to refit the job to employees This means some parts of job should to be reassigned
If refitting a job proves ineffective, employers should consider reassigning underperforming employees Typical job reassignments can alleviate role demands by reducing the requirements for responsibility, technical knowledge, and interpersonal skills.
- Release: this is the final option for poor performer
The Ministry of Business, Innovation and Employment emphasizes the importance of training and development opportunities as essential components of a performance improvement plan If an employee does not acquire the necessary skills, potential actions may include reassignment of duties or relocating to a different area for a better job fit Additionally, it is crucial to review the recruitment process to ensure the selection of suitable candidates for the position.
Action plan
4 - Put item 2.3 (Reasons of High turnover Rate) after analysing the data and exploring the tentative problems
5 - Revise the Initial Cause and Effect Map 27
6 - Numbering parts in page 27, page 35 27 to 35
(Ký, ghi rõ họ tên)
Lecturer’s Name Associate Professor : Mrs.Le Thi Thanh Xuan
Title of Assignment Excessive working overtime in Parapex Company
Student Name Nguyen Nhat Tuong Vi
Contact Number or Email Nguyen.nhat.tuong.vi@gmail.com Length 66 pages (including appendix)
I hold a copy of this assignment if the original is lost or damaged
I certify that this assignment is entirely original and has not been copied from any other student's work or any external sources, except where proper acknowledgment has been provided.
No part of the assignment/product has been written/produced for me by any other person except where collaboration has been authorised by the subject lecturer/tutor concerned
I understand that this work is subject to reproduction and may be submitted to plagiarism detection software to identify potential plagiarism, which could retain a copy in its database for future checks.
Signature: Nguyen Nhat Tuong Vi
Note: An examiner or lecturer/tutor has the right not to mark this assignment if the above declaration has not been signed)
University of Economics Ho Chi Minh city International School of Business
Lecturer: Dr.Le Thi Thanh Xuan
Many organizations resort to overtime as a quick, cost-effective solution to boost output and address unexpected challenges, such as employee absences or machinery breakdowns However, excessive overtime can lead to serious negative consequences, including increased health issues, safety risks, decreased productivity, high turnover rates, low morale, and family life disruptions, ultimately harming the business in the long run This thesis investigates the issue of excessive overtime at Parapex Company, aiming to identify its causes and propose actionable solutions Utilizing qualitative methods, in-depth interviews were conducted with key stakeholders, including HR personnel and former employees, revealing that high turnover and declining sales performance are critical symptoms of the problem Interviews highlighted four main issues: excessive overtime, low salaries, a strict punishment policy, and the company's remote location, with a focus on excessive overtime due to its solvability Further discussions with the Vice Director and HR Officer uncovered that the supervisor's poor decision-making—stemming from inadequate skills in forecasting and production planning—was a significant contributor to the problem The lack of proper recruitment and training exacerbated the situation, prompting the development of an action plan based on literature review insights and stakeholder suggestions.
2.2) Definition and calculation of turnover rate 13
A/INTERVIEW TO RECOGNIZE THE PROBLEMS 16
B/ LITERATURE REVIEW OF THE PROBLEMS 20
C/ MAIN PROBLEM IS SELECTED TO BE SOLVED 27
D/ INITIAL CAUSES AND EFFECTS MAP 27
PART 3 - CAUSES AND EFFECTS OF THE REAL PROBLEM 27
3.1) Interview 1) Causes and effects from Vice Director perspective 28
2) Causes and effects from Human Resource perspective 29
2) Affects of poor decision making 31
3) Decision making skill and reasons of poor decision making 31
7) Causes of lack of working skills 33
PART 4 - POSSIBLE SOLUTION AND ACTION PLAN 35
PART 1-COMPANY INTRODUCTION 1.1) General Information
Founded in 2000 in Vietnam with 100% foreign investment, Parapex Company specializes in the production and distribution of a diverse range of sport kites and paragliders The company exports its high-quality products to various countries, including England, Russia, the Netherlands, Italy, France, and Germany.
Our mission is to provide the most comprehensive selection of gliders available, catering to every skill level from beginners to world champions, and accommodating all styles of flight.
Parapex ensures the highest quality by sourcing materials from trusted suppliers and conducting thorough inspections at multiple production stages Each product undergoes rigorous final checks, including a test flight, before reaching the client Additionally, the company offers comprehensive service and technical check-ups for the wings.
Products: There are six main types of product which include Paragliders, Paramotor,
Speed Wings, Land Kites, Snow Kites and Kitesurf
(Note: Picture of products of Parapex)
The company boasts a substantial size, comprising six factories and one main office, employing over 600 workers alongside approximately 30 office staff To maintain high standards of workmanship and sewing skills, the recruitment process for workers is thorough and rigorous.
The Chief Executive Officer (CEO) holds the top position within a company, bearing ultimate responsibility for its overall operations The CEO has the authority to sign critical business contracts that optimize benefits for the organization Additionally, the CEO plays a key role in making strategic decisions that promote the company's sustainable development.
Export Dpt (1 Leader, 2 staffs & 8 workers)
Import Dpt (1 Leader, 2 staffs & 5 workers)
Pattern Dpt (1 Leader, 2 staffs & 8 workers)
Office Manager: is responsible to manage HR, IT, Admin and Accountant and inform to CEO the operation of these department
- IT Staff: manage the software of company, ensure the good software for every day operation
- HR: includes 3 HR staffs who is responsible for recruiting, timekeeping, managing insurance and salary of staff and workers, and solve all problems related to HR
- Admin: is responsible for all tasks related to admin such as stationery order, arranging business trips, receiving and transferring outside phones or mails
- Accounting: chief accountant allocates the financial resources to maximize company’s wealth and profitability and 2 accountants are responsible for all tasks of accounting such as payment, tax, and assets managing
Vice Director: is responsibility for the productivity and efficiency in the chain of production
The Import Department consists of one manager and two staff members responsible for liaising with local and foreign suppliers to procure materials for production while managing raw material inventory This team also handles all documentation related to customs and import duties Additionally, five support workers assist with organizing materials in the inventory to ensure efficient operations.
The Export Department consists of one manager and two staff members responsible for customer communication regarding product exports and invoice issuance Additionally, there are eight support workers dedicated to preparing goods for distribution, ensuring efficient export operations.
- Pattern Department: includes 1 manager and 2 staffs who design, draw patterns, choose the suitable materials and create molds for production There are 8 workers to support work related to pattern
- Testing Department: includes 1 manager and 2 staffs who check the products carefully before distributing to customers
- 6 production factories: Each factory includes one supervisor, 4 leaders and near
A supervisor oversees the production chain and manages 100 workers across multiple factories, each specializing in different products, including paragliders, paramotors, speed wings, land kites, snow kites, and kitesurfing equipment.
1.3) HR policies and benefit Benefit
- Company will pay 13 th month salary and bonus for employees at the end of the year
- Company will evaluate performance each year for increasing the salary and promotion
- Employees will receive the bonus each month base on their performance
- Employees will receive the bonus on public holidays
- Company will organize one trip/year for employees
- Annual health check one time/year
- Company will organize training courses for new employees or new products
Employees are required to work eight hours daily from 7:30 AM to 4:30 PM, with a one-hour break, from Monday to Saturday Saturday work is limited to four hours, which will be compensated at 150% of the regular salary for overtime Additionally, on Mondays, Wednesdays, and Fridays, employees may work until 8:00 PM, also earning 150% overtime pay for those hours.
- Employees have to work on-time If they come late or stop to work soon, they have to inform to the manager and provide the relevant reasons
- Employees have to inform for manager in 3 days before they take leave In the special case, they have to phone to manager and explain the reasons for leave
- Do not bring food or beverage into factory except purified water
- Do not use phone into factory, especially in working time
- Do not accept fighting, arguing loudly, dishonor or sexual harassment with other employees
- Do not repair the products Employees have to inform to manager to solve the defective goods
- Do not disclosure the confidential information of company and cause any disadvantages or bad influence to the image of company
Employees who commit a single infraction will receive a reprimand report and will not be eligible for a bonus that month However, repeated offenses may lead the company to make the decision to lay off those employees.
PART 2-PROBLEM IDENTIFICATION 2.1) Problem Context
The third factory employed approximately 75 workers, with 12 dedicated to skateboard production, 55 focused on kites, and 8 responsible for quality checks The supervisor regularly patrolled the factory to ensure workers remained focused on their tasks Overall, the factory environment was notably quiet, with only the sounds of machinery breaking the silence.
There were only sewing machines in the “kites” chain but many different machines in
The skateboard production process involves various machines, including CNC machines, drill machines, veneer press machines, and side sealer machines This intricate chain produces numerous components, such as wheels, footstraps, griptapes, decks, and axles However, the workers appear stressed and fatigued, reflecting the pressures of their roles Additionally, there seems to be a shortage of labor in the skateboard production chain compared to other manufacturing sectors.
