OVERVIEW OF THE THEORY OF LABOR MOTIVATION IN ENTERPRISES
Definition of motivation
Motivation is the process by which a person’s efforts are energized, directed, and sustained toward attaining a goal This definition has three key elements: energy, direction, and persistence.
Energy: a measure of intensity, drive, and vigor The quality of the effort must be considered as well as its intensity.
Direction: effort directed toward and consistent with organizational goals.
Persistence: employees persist in putting forth effort to achieve those goals.
How employees are motivated depends on several factors, including their age, socioeconomic and academic level, national culture, and the availability of work elsewhere.
Theories about work motivation
1.2.1.1 Content of Maslow’s Hierarchy of Needs
Maslow's needs theory was widely recognized during the 1960s and 1970s,especially among practicing managers, probably because it was intuitively logical and easy to understand
Maslow’s hierarchy of needs is a theory of human motivation that suggests people are driven to engage in behaviors by a hierarchy of increasingly complex needs The hierarchy is usually depicted as a pyramid, with basic needs making up the base and complex needs found at the peak.
Figure 1.2 Maslow’s Hierarchy of Needs
Physiological needs: A person’s needs for food, drink, shelter, sex, and other physical requirements
Safety needs: A person’s needs for security and protection from physical and emotional harm as well as assurance that physical needs will continue to be met.
Social needs: A person’s needs for affection, belongingness, acceptance, and friendship
Esteem needs: A person’s needs for internal esteem factors such as self- respect, autonomy, and achievement and external esteem factors such as status, recognition, and attention
Self-actualization needs: A person’s needs for growth, achieving one’s potential, and self-fulfillment; the drive to become what one is capable of becoming.
Maslow argued that each level in the needs hierarchy must be substantially satisfied before the next need becomes dominant
1.2.1.2 Application of Maslow’s Hierarchy of Needs in motivation
Determining the needs of employees is the first key to finding the motivation in each business environment Managers using Maslow's hierarchy to motivate employees do things to satisfy employees' needs But the theory also says that once a need is substantially satisfied, an individual is no longer motivated to satisfy that need Therefore, to motivate someone, managers need to understand what level that person is on in the hierarchy and focus on satisfying needs at or above that level. Motivation in the business will help employees to map out their own Maslow’s Hierarchy of Needs and businesses will have measures and policies to operate in the best way for employees.
1.2.2.1 Content of McGregor's Theory X and Y
The Theory X and Theory Y are the theories of motivation given by Douglas McGregor in 1960’s These theories are based on the premise that management has to assemble all the factors of production, including human beings, to get the work done.
Theory X is a negative view of people that assumes workers have little ambition, dislike work, want to avoid responsibility, and need to be closely controlled to work effectively.
Theory Y is a positive view that assumes employees enjoy work, seek out and accept responsibility, and exercise self-direction.
1.2.2.2 Application of McGregor's Theory X and Y in motivation
It is not sufficient to establish strict rules and close monitoring The lazy or non-motivated staff should be given equal tasks as that of Theory Y Place them in the same environment (office, room, workspace, etc.), the Theory X person is likely to observe how the Theory Y person is working
Reward people openly for their great achievements This encourages other staff to take up the challenge with the hope of getting the same.
1.2.3.1 Content of Herzberg’s Two-Factor Theory
Frederick Herzberg’s two-factor theory (also called motivation-hygiene theory) proposes that intrinsic factors are related to job satisfaction, while extrinsic factors are associated with job dissatisfaction.
Figure 1.4 Herzberg’s Two-Factor Theory
The hygiene factors are also referred to as the maintenance factors and comprise of the physiological, safety and love needs from Maslow’s hierarchy of needs They are factors that are not directly related to the job but the conditions that surround doing the job These factors include: company policy and administration, technical supervision, interpersonal relations with supervisor, interpersonal relations with peers and subordinates, salary, job security, personal life, work conditions and status Herzberg called these hygiene factors, since they are necessary to maintain a reasonable level of satisfaction and can also cause dissatisfaction The hygiene factors are not direct motivators but are necessary to prevent dissatisfaction and at the same time serve as a starting point for motivation However, removing dissatisfying characteristics from a job would not necessarily make that job more satisfying (or motivating).
The motivator factors are intrinsic to the job itself and do not result from
“carrot and stick incentives” They comprise the physiological need for growth and recognition The absence of these factors does not prove highly dissatisfying but when present, they build strong levels of motivation that result in good job performance They are therefore called satisfiers or motivators These factors include: achievement, recognition, advancement, the work itself, the possibility of personal growth and responsibility.
Combining the hygiene and motivator factors can result in some scenarios namely:
High hygiene and high motivation, the ideal situation where employees are highly motivated and have few complaints.
High hygiene and low motivation: Employees have few complaints but are not highly motivated The job is then perceived as a paycheck.
Low hygiene and high motivation: employees are motivated but have a lot of complaints A situation where the job is exciting and challenging but salaries and work conditions are not.
Low hygiene and low motivation: the worse situation unmotivated employees with lots of complaints
This theory sought to encourage managers not to be one-sided in considering factors to motivate employees but rather consider all the two factors in order to optimally motivate and satisfy employees to get the best out of them.
1.2.3.2 Application of Herzberg’s Two-Factor Theory in motivation
How to eliminate job dissatisfaction? According to Herzberg, managers need to eliminate the dissatisfaction by doing the following:
Fix poor and obstructive company policies;
Provide effective, supportive and non-intrusive supervision;
Create and support the culture of respect and dignity for all team members;
Ensure that wages and salaries are competitive;
Build job status by providing meaningful work for all positions The above actions help in eliminating job dissatisfaction in organizations and there is no point trying to motivate people or employees until these issues are addressed It is crucial in the work environment to identify conditions for job satisfaction.
How to create conditions for job satisfaction? Herzberg’s premise was that every job should be examined to determine how it could be made better and more satisfying to the person doing it Hence, managers need to consider and include:
Creating work that is rewarding and that matches the skills and abilities of the employee;
Giving as much responsibility to each team member as possible;
Providing opportunities to advance in the company through internal promotions;
Offering training and development opportunities so that people can pursue the positions they want within the company.
In seeking to motivate people, first management in organizations must identify and address things that make workers unhappy about the workplace environment Furthermore, management has a responsibility to ensure that workers are treated fairly and with respect including helping workers to grow within their jobs and giving them opportunities for achievement.
ANALYSIS OF LABOR MOTIVATION ENHANCEMENT AT
An overview of company
"Thai Tuan - Foundation for the flourish"
Thai Tuan Fashion Group Corporation is one of the garment enterprises providing leading fashion products and services in Vietnam Established on December 22nd, 1993 and officially represented by Mr Thai Tuan Chi, Thai Tuan brand has been trusted by domestic and foreign consumers as one of the textile brands providing fabric products and fashion services with much of Vietnamese culture features Currently its head office is located at 1/148 Nguyen Van Qua St., District 12, Ho Chi Minh city.
In 2018, Vietnamese garment and textile industry ranked in the top 5 of the world's largest garment manufacturing and exporting countries Many companies continue to maintain steady growth through contractual agreements with current customers and attract new customers However, in recent years, a large amount of goods has been continuously poured into the domestic market, creating a huge number of concerns for the textile industry.
Technically in this industry, products, chemicals, and durability have met the increasing demand of consumers Therefore, a number of companies are not only looking for products, but also expecting a steady growth in revenue and profit, improving their prestige, building trust etc All above were the factors contributing to Thai Tuan’s establishment.
In the end of 1993, Thai Tuan was established with the primary goal of supplying to the domestic market, as well as thrifting foreign return for the country.
It operated under the philosophy of “making domestic market the foundation, international markets flourishment”.
According to Mr Thai Tuan Chi - the founder, also the Chairman of the Board of Directors, Thai Tuan has focused on building a brand recognition at a very early stage In 1998, when firstly participating in the Consumers' Fair in Can Tho, Thai Tuan already printed the company's logo on the border with the aim of affirming the quality to customers.
Over the past 25 years of establishment and development, Thai Tuan has become a familiar name to domestic and foreign consumers The company always prides itself on supplying dress-codes when there are international occasions in Vietnam, such as Sea Games 22, APEC 14 Conference, minister dress-shirts, ASEAN 17…
Thai Tuan specializes in producing Jacquard fabric, floral digital printing fabric, monochrome fabric, multicolored fabric from polyester, spandex, visco yarn with advanced technology transferred from Japan and Europe Up to now, it has 3 branches, 8 showrooms, more than 300 agents and 3,500 distributors nationwide.
Being one of the garment and textile companies in Vietnam with the slogan
"Thai Tuan – Foundation for the flourish", Thai Tuan strives to become an
"International brand offering globally fashionable clothing” In order to have such achievement, Thai Tuan has been continuously investing, developing and using the first and most advanced technologies for production
At the moment, the company is building a breakthrough strategy, taking advantages of The 4.0 Industrial revolution to invest in modern machines, smart facilities to pioneer in specially distinguished products: absorbent, anti-UV, scented textile It committed to add new values to meet the increasing demand of consumers.
Although having the ambition to reach global recognition, Thai Tuan is loyal to its original mission: “Eulogizing femininity through fashionable clothing, contributing to building national symbol”, by bringing Vietnam culture & tradition into their products.
Over the past 27 years of establishment and development, Thai Tuan has continuously strived for its highest potential, claiming many achievements in terms of finances and activities.
In terms of financial efficiency, in the past few years, the Company has been witnessing impressive increase in both revenue and profit In 2017, the revenue was approximately 1000 billion VND, of which the export proportion is about 50%, consistent with the notion "making domestic market the foundation, international markets flourishment " In 2018, revenue increased by 15% and expected to increase rapidly within the next 5 years In terms of market share, Thai Tuan currently accounts for about 25% of the total domestic market volume and is in the process of expanding to Asia and Middle East.
Thai Tuan is honored for many prestigious awards: "High quality Vietnamese goods" by consumers for successively 10 years, "Vietnam Gold Star" by TheAssociation of Young Enterprises, In addition, Thai Tuan received the Second andThird Order Labor Medals for “Outstanding achievements in business production and charity work” by the President.
Company labor overview
Alongside with strategies to develop the business, human resources is one of the goals that Thai Tuan focuses on According to inside information, Thai Tuan now has nearly 1,200 employees Organizational system of the Company includes: headquarter at District 12, business center in district 5, one branch in Northern Ha Noi, one branch in central of Da Nang, and one branch in Western Can Tho, with more than 300 agents and 3000 distributors nationwide.
The Board of Directors of the Company comprises the Chairman of theBoard of Directors – also General Director, 5 Deputy General Directors of theCompany: Domestic Business, International Business, Internal Affairs, Finance and
Operational Performance It is based on a functional model, specialized in each department and branch, in order to improve the operational efficiency and quality of the above superintendent supervision.
Therein, Deputy General Directors below is directly responsible for these departments:
- Deputy General Directors of Domestic Business: Domestic Business department
- Deputy General Directors of International Business: International Business department
- Deputy General Directors of Internal Affairs: Human Resources department, Information Technology department, Supply chain department, Administrator department.
- Deputy General Directors of Finance: Finance department
- Deputy General Directors of Operational Performance: Weaving Factory, Dying Factory, R&D Center, Qualitative Management Center, Sewing Factory.
Figure 2.5 Thai Tuan’s board of director structure
From the above chart, it can be inferred that there is a big difference in the labor structure by gender when the proportion of male workers accounts for 63%, double the rate of female workers This comes from the characteristics of the business line - Textile, the workforce of which direct production will mainly operate textile machines, printers, etc.
From the above chart, we can see that in Thai Tuan, workers aged 30-
45 are the majority with 58%, followed by workers over 45 years old with 32% Over the past 25 years, along with continuous efforts in raising the brand not only in the domestic market but also in the international arena, Thai Tuan also builds an environment work professionally, thus retaining skilled senior employees, thereby helping to reduce the costs of labor training for company.
Figure 2.6 Percentage of labor based on gender, 2019
Figure 2.8 Labor academic level in 2019
Post-graduateUniversityCollegeCommon labor
Most of the staff at Thai Tuan are senior staff working in garment factories and textile factories, so unskilled workers make up the majority with 42% of the company's employees Then there are university staff with 28% and postgraduate with 18%, mainly staff - office staff Finally, the lowest proportion of workers is college and intermediate level workers with 12%
Analysis of employees’ motivation in Thai Tuan Corporation
2.3.1 Motivating employees through monetary incentives
Like most corporations in Vietnam, Thai Tuan company currently offers a salary system based on the nature of the job and the position of responsibility In other words, those with the same job title will be paid equal wages Salary policy of the corporation and its member units also shows the basic formula:
H: Pay rate associated with job titles M: Minimum wage (M=4.420.000VND) n: Real workdays of the employee N: Standard workdays in a month
Outlet Salesman, Operating Support Executive (Driver, Receptionist, Security, )
Table 2.2 Average Salary in the period 2018 - 2020
According to the data, the average income of the total 1126 employees in
2020 is around 5,351 million VND, an increase of 5,4 percent over the previous year 2019 In comparison to other non-FDI enterprises in Vietnam, this is quite an attractive and competitive figure, especially in the textile area, which has suffered from numerous difficulties in recent years Furthermore, as can be seen obviously,the company has a policy of annual salary promotion in order to create more working enthusiasm and employee’s engagement
2.3.1.2 Bonus and other welfare policies
Besides wages, Thai Tuan Corporation also has a clear bonus rewards system as a useful tool to motivate employees to gain above par upcoming performances and express the consideration of the Executive Board to workers’ needs in daily life. There are two fundamental forms of bonus:
- General achievement bonus: based on the whole firm’s business results. The bonus estimated based on planned targets at the year-beginning and the goal- accomplishing level at the year-end
- Individual achievement bonus: based on a specific individual's performance appraisal: Recently, at Thai Tuan, this bonus is divided into two smaller types - monthly bonus and December bonus, whose rates are determined by employees’ classification Details are indicated in three tables below:
Table 2.3 Monthly appraisal criteria for Thai Tuan’s grassroots employees in 2019
Complete assigned work on/before schedule 35
Comply well with company’s regulations 10
Hardworking, dedicated and cooperative attitude 10
Contribute creative suggestions to work efficiency 10
Table 2.4 Monthly Bonus Rate associated with Employees’ Classification
Point Classification Monthly Bonus Rate
Table 2.5 December Bonus Rate associated with Employees’ Year Classification
- No more than 1 month classified as B A - Very Good 1.2
- No more than 2 months classified as
- Other cases not classified as A,B and
- Be discipline at company level
- More than 4 months classified as C
Recognizing the importance of welfare work for employees’ motivation and following the direction from the management team, Thai Tuan Corporation always guarantees the rights of employees in compliance with Vietnamese law on labor and never violates against the law With that spirit, the Company always guarantees the workers’ mandatory welfare benefits such as social insurance, health insurance, sickness and maternity scheme, death scheme, pension, in accordance with the law Moreover, the Company also has some additional levels of fridge allowance for its labor force.
Fridge allowance Amount of Money
Other allowances (petrol, telephone, ) 100,000 VND/month
1.4.2 Motivating employees through non-monetary incentives
1.4.2.1 Division of labor and improvement of working conditions:
The proper arrangement and use of employees has recently been extremely respected by the Company board In fact, the company has issued “a set of standards for each job title” This document is intended to clearly define the responsibilities and powers of functional parts and job titles in the operational process to avoid the overlap of functions and duties between departments and individuals; help workers actively and comprehensively understand what to do, why to do and how to do so; perform well and coordinate smoothly with other departments and individuals
However, according to data in 2019, the Company still has a number of positions that are inappropriate and unecessary Some employees, especially in the office areas,are not arranged to work in the expertise which they are well-trained. That is why the Company should pay more attention to the issue of suitable labor division in the organization In addition to allocating the right people to right jobs, it is necessary take the factors of preference, forte and technical skill into accounts.
Table 2.7 Labor division by trained profession in HCM Headquarter 12/2019
Department Total number of employees
Employees working in the inappropriate expertise
Human resource training and development is an activity that affects working dynamism of the employees because it meets the self-fulfillment needs of people according to Maslow’s Hierachy of Needs Over the last 2 years, Thai Tuan Corporation has focused much on training sessions to advance the quality of human resources and support their professional skills in accordance with the requirements of the job.
There are two types of training:
- Internal training: applicable to those who are direct workers including technical workers in factories and salesperson in showrooms The core aim is to train soft skills to serve the work To organize internal training courses, the Administrative Organization Department will coordinate with the relevant units to implement specific tasks.
- Outsource/ Off-site training: applicable mainly to managers to take short- term or long-term courses in external business centres The core aim is to train perceptual, leadership or professional skills such as chief accountant, tax profession, declaration profession, Determining who needs to be trained is done directly by the heads of the Divisions The Company provides 100% of the funding for those subjects sent by the Company for study Those who actively propose to take professional courses will be supported 50% of the cost Course days which overlap workdays also count as workdays.
Table 2.8 Human resource training results the period of 2018-2019
Total number of internally trained employees 544 512
Total number of externally trained employees 24 26
From Thai Tuan Corporation’s perspectives, building a workplace environment containing strict disipline, fair treatment and multi-sided communication system is an important motivational factor for qualified staffs to feel more engaged, stay still and perform even better in the organization.
Besides that, Thai Tuan’s culture has a precious team spirit in it The Chairman of the Board of Directors as well as most directors of the member units always record employees as one of the biggest value and mission statement of the corporation Corporation's employees are encouraged to participate in collective activities organized by the Company such as sport competions, group outings, annual vacations, to inspire its members and to build a cozy, comfortable atmosphere and unite in daily life as well as in daily work This does not only contribute to work motivation but also better company’s image in their eyes.
Through analysis of the current situation at Thai Tuan Corporation, I believe that the Company has both pros and cons in the process of motivating employees. Details are as follows:
Regarding monetary incentives, Thai Tuan Corporation has issued a coherent policy of wage, bonus and welfare Wages paid to workers are stable and competitive compared to other competitors, ensuring the disposable income to meet basic needs or maintain and improve living standards Employees of the Corporation are always fully entitled to social welfare policies in accordance with regulations
Other non-monetary activities such as improving working facilities,extracurricular activities, outings and vacations, are enough to create positive working energy and fulfil employees’ needs of communication and social relationship
LABOR MOTIVATION ENHANCEMENT SOLUTIONS AT THAI
Labor motivation directions at Thai Tuan Joint Stock Company
1.4.4 Development directions of the company
The board of directors has set a goal for Thai Tuan joint-stock corporation being one of the leading textile and garment companies in Vietnam, on the basis of ensuring the living condition, workplace environment and capability development of each and every worker.
For an enterprise, quality is always a top criteria to attract more customers and skilled workers, create more jobs, improve labor policies, enhance the position and affirm the brand’s value In 2018 - 2019, the company has gained some remarkable achievements: sales volume increased sharply in the luxury segment and silk ao dai, while there was a certain growth of 7.8% of high-end pajamas To ensure the safe and continuous operation of the production line, directions of the company in coming years are:
- Executing projects on developing fashion products for men, children and export purpose on schedule.
- Continuing to expand branches in 3 regions and open more agents at a rate of 18% per year.
- Renovating distribution channels, complementing private distribution channels and franchising.
1.4.5 Labor motivation directions at Thai Tuan Joint Stock Company
Motivation must involve improving the material and spiritual life of workers, ensuring workers’ loyalty to the company and enhancing the labor quality and efficiency Motivation must create a friendly work environment, mutual trust and respect, equal relationships and collaboration among employees in the company.
In terms of labor motivation directions, Thai Tuan company has determined to build a highly - qualified workforce with the ability in strategic planning, management and long-term commitment to the company Therefore, it concentrates on improving sustainable policies, transparent assessment, thorough management,deserving remuneration, talented worker attraction, combining with company culture to improve labor efficiency, promote employees' potential, fairness in labor and enjoyment These mechanisms are followed by the below points of view:
- Motivation is necessary Motivation policies should not focus on encouraging only some and a few employees, but must be in response to the overall situation of the company to allow fairness.
- Motivation must be practiced regularly in the workplace.
- Employee benefits must be a priority, with the equality in evaluation and treatment well-maintained
- Motivation requires coordination between the Board and the employees themselves to satisfy their own physical and psychological needs, while creating company values as well as saving costs The applicable methods are periodical or irregular tests, surveys, together with the implementation of specific policies on salaries and the expansion of opportunities for job advancement; constantly innovating the environmental development policies; giving comfortable and enjoyable working conditions, financial supports and worker protection mechanisms.
1.5 Solutions to motivate Thai Tuan Corporation’s employees
With the current employee performance rating situation at Thai Tuan Group Joint Stock Company and the problems this process is facing, there are some solutions that could be considered to enhance labor motivation for employees at the company:
1.5.1 Determine the needs of employees in the Company
To determine the needs of employees, the company can conduct surveys and investigations to complete the labor policy based on the following recommended steps:
- Step 1: Participants propose a survey with the main contents based on Maslow’s theory or use questions to identify what employees want in terms of:
3 Evaluate yourself when you start working
4 Evaluate yourself after working in the Company
5 Personal development trends and plans in the future
- Step 2: Select subjects and conduct the investigation by each department and department Besides the investigation according to the subjects of leaders, managers, employees, it is also possible to divide by salary level; by age; according to qualifications; according to seniority, the division according to many different criteria will help discover the exact need for each subject.
- Step 3: Processing collected information and organize the level of demand categories Based on the collected results to serve as a basis for labor motivation measures in the company In the next survey, the Company can compare and compare the results of 2 surveys to assess the level of the motivational measures.
The first and foremost need of employees in the Company is the financial need, including: salary, bonus and other allowances.
- Regarding salary: Currently, like most joint stock companies in Vietnam today, Thai Tuan still pays salaries for employees according to job titles That is, people with the same title will be paid equal pay, which could inadvertently cause some negativity in the business such as:
Employees who work less effectively will depend on and not have the spirit of trying.
Employees who work more effectively will lose motivation to work (due to how efficient they are, their monthly salary will be equal to those of less efficient people).
Therefore, the author would like to suggest how to calculate the employee's monthly salary Accordingly, every month, the salary of employees in Thai Tuan will be received by the sum of the following: basic salary, salary for production results of the whole enterprise, bonus for achievement, which is shown by the formula:
Employee salary = Basic salary + General Bonus + Individual bonus
Basic salary is the salary used to apply different types of social insurance, unemployment insurance, , normally agreed upon in the labor contract.
- Regarding bonuses: Based on the financial situation of the Company to decide on bonus mechanism Currently, the Company has a general bonus scheme at the end of the lunar year which is also the time of awarding most Vietnamese companies with an average bonus of 1 month salary However, the one-time bonus payment based on the company's completion of the plan at the end of the year should be switched to the bonus scheme every 6 months (ie twice a year: New Year's Eve and July every year) to increase loyalty as well as time spent with the business Performance bonuses are determined based on the employee's monthly assessment to encourage and motivate employees.
The authors also recommend the Company to build bonuses for performance-overcompleted employees who work directly at factories and sales representatives at showrooms to reward contributions and encourage the others to increase productivity.
Table 3.9 Recommended Bonus Amount for Overcompleted Employees
- Regarding allowances: The current allowances are mainly work allowances; travel allowance The trainee proposed more, with the employees working in 3 branches of Thai Tuan company that do not have production activities so there is no harmful allowance, however the company should consider to allow allowances for night work or overtime allowances for projects due to business characteristics.
1.5.3 Meet the non-monetary needs of employees
Employees at the Company have demands for a working environment and promotion opportunities Participants propose measures to enhance the employee's ability to meet the environmental needs and promotion as follows:
Students propose to the Company to change the working environment decoration every 3 months, depending on the business theme of each period For example: the 27th anniversary of the establishment of Thai Tuan Group Joint Stock Company; celebrates the establishment of the branch to reduce the boredom of the working environment.
Replace old facilities (tables, chairs, computers, air conditioners ) to provide employees with effective working tools.