THEORETICAL BASIS ON RETAINING EMPLOYEES IN
Concept and role of retaining employees in enterprises
Employee retention is an enterprise activity that creates an environment for long- term staff participation According to Chaminade (2007), this close relationship should be durable and link employees to the organization by common values and by the way the organization meets the needs of its employees
The main purpose of retaining employees is to prevent the loss of qualified employees of enterprises, which could have an adverse effect on productivity and service delivery In addition, retaining employees allows senior managers and managers to effectively attract and maintain employees with important skills and high productivity This is achieved by providing managers with information on employee retention strategies that will ensure that the goals and objectives of businesses are implemented
Creating a retention strategy means putting the organization's needs and expectations upwards to ensure the professional satisfaction of employees and create a reliable relationship In this stable relationship, employees stay with personal choice based on freedom and consideration of decisions Retaining employees contributes an important part to the overall success of the organization
Highly talented and effective employees need to be encouraged to stay in the organization by designing maintenance policies that will provide employees with opportunities to prove their skills and ensure that they fit the job
Also discussing retention policies, Nyoka's (2006) perspective includes strategies that will allow workers to balance the needs of their work life with their family life by set up family-friendly policies and allow flexible work arrangements to match the necessary personal issues
With such an effective on-site maintenance policy, so managers can keep employees at a manageable level This is mandatory for organizations through the labor process, to attract quality staff for the organization However, it is important for managers to devise policies to retain talented employees in their organizations to prevent employers from benefiting from the investment made in it Retaining employees is one of the most important issues for organizational managers as a result of the shortage of skilled manpower, economic growth and the rate of employees retiring
Phillips and Connell (2002) stated that retaining employees relates to worker sensitivity and demonstrates different strategies for meeting those needs According to Czakan (2005) strategies include career promotion and development, compensation entitlements, opportunities for training and management support In addition to the strategies mentioned above, labor managers should use a flexible approach to encourage maintenance and this method should consider some value- added components Brown (2006) argues that these strategies include training, opportunities for skill and career development, as well as flexibility around the frequency and size of rewards and incentives The whole process of retaining employees is to ensure that employees stay in the organization, especially employees with valuable or necessary skills or experience in an important area
Employees who leave work are costly and are a great concern for employers and should be avoided The high rate of retired employees represents a significant burden on human resource managers and direct managers, who constantly have to recruit and train new employees
Retaining employees plays an important role and the benefits of retaining experienced, reliable employees are invaluable, helping businesses operate stably, reducing the cost of changing employees
- In terms of revenue, loyal employees tend to work better than what customers expect and always have a high working spirit at their best These two characteristics are very important in retaining loyal customer for the business and bringing in high revenue
- In terms of cost, loyal employees will stay long-term, rejecting offers from competitors, not actively seeking new jobs and always introducing their businesses are good working place This helps businesses avoid significant expenses for employee replacement (Nguyen Thi Huong, 2015, page 8).
Basic factors effecting employee retention
1.2.1 Factors belong to the enterprise
The goal of the organization is to guide all activities of the organization and the working process of the employees The objective of the organization must ensure harmony between organizational benefits and the interests of employees The goal is to decide on each organization's human resource development strategy to the policy of attracting, using and treating employees
- Leadership method: Is the overall way of possible and intentional impact of leaders on employees along with other resources to achieve the proposed management goals The important role of leadership methods is to arouse motivations, stimulate the dynamics, creativity of employees and potential in the organization as well as other potential and opportunities from the outside (Doan Thi Thu Ha and Nguyen Thi Ngoc Huyen, 2011, pages 277-278)
- Organizational motivational tools (Nguyen Van Diem and Nguyen Ngoc Quan,
In order to create motivation, managers use many different tools to impact on management objects such as material tools or material dynamics (income policy: salary, bonus, allowance, welfare, profit etc.); spiritual tools or motivation (about work, work environment, promotion opportunities etc.)
+ Income policies of the organization
Organizations use employees through the system of income policies, including policies to ensure employees' benefits: salary, bonus, social insurance (social insurance), allowances etc In terms of organizational management of human resources, policies on salary, social insurance, allowances are a group of factors to attract and maintain employees (necessary conditions) As for the bonus policy, it is really motivating for employees' efforts (sufficient conditions) However, for some individuals, a reasonable salary policy and a full social insurance policy are also motivators for their efforts to complete the assigned work
The income policy tool should take into account the payment by position, capacity and working results that contribute to competition and employee incentives, especially for highly educated employees
+ Working environment and organization's culture
Attached to the job is the working environment The working environment in addition to the labor conditions also includes: the atmosphere in the organization, the relationship between colleagues with colleagues, superiors and subordinates etc Proper working conditions must first create comfort and help focus thinking, besides the conditions of labor materials must bring convenience for employees at work
Organizational culture is a system of common values and norms recognized by all employees in the organization, and their behavior towards the inside and outside of the organization The culture of the organization will influence the behavior, internal behavior and external behavior of employees in the organization Strong culture appeals to talents and promotes creative passion Therefore, in motivating work, it is necessary to build and maintain a strong culture
+ Ability to promote at work
Promoting in the job is the development in the career ladder, expressing the need to be recognized and affirmed in the organization In fact, a good employee often has a progressive spirit They are always eager to seek opportunities to advance their career development Therefore, creating favorable conditions for training and working to promote is a factor to encourage and motivate employees
Work is all tasks performed by an employee or all the same tasks performed by some employees (Nguyen Van Diem and Nguyen Ngoc Quan, 2007, page 44) The requirements of the work include: knowledge, skills, education, experience The creation of work is the result of assignment of labor within the organization
In an organization there will be many works with different tasks and levels of complexity The more complex the work is, the more skilled and skilled employees are required This affects the role and position of employees in the organization, as well as their salaries, satisfaction and attitudes in labor Moreover, the stability of the work also has an impact on the experience and working capacity of the labor force Therefore, arranging "right people, right works" is one of the principles to retain employees as well as bring success to the organization
- Other human resource management activities of the organization
Other human resource management activities of the organization such as: human resource planning; work analysis and design; recruiting, arranging human resources;
Training and developing human resources; evaluating the performance of the work Thereby, considering the capacity, achievements and prospects of each employee thus making relevant personnel decisions The results of these activities affect the emotional sentiment of each person, so they need to be done correctly Moreover, these activities play a central role in establishing organizations and helping organizations survive and grow Human resource is one of the indispensable resources of the organization, so human resource management is an important area that is crucial to the success of the organization Appropriate human resource management activities will increase the motivation of employees in the organization and vice versa
- Personal’s goal (Nguyen Van Diem and Nguyen Ngoc Quan, 2007, page 128)
The goal is the desire of employees to work, which motivates employees to work
The higher the goal, the more personal effort is needed to achieve, so each person's motivation is also higher
However, each employee has a specific goal, if these objectives are consistent with the overall goal of the organization, the organization will develop and vice versa
Therefore, the administrator needs to capture the personal goals of the employees and direct them to the overall goals of the organization
- Needs and motives of employees (Nguyen Van Diem and Nguyen Ngoc Quan,
2007, page 128) Behavior originating from needs so people have two ways of satisfaction and dissatisfaction with the organization Dissatisfaction is caused by: the organization's policies; inadequate work supervision; working conditions do not meet employee expectations; salaries and remuneration containing unfair factors; having problems with colleagues Satisfaction is due to: achieving expected results; acknowledgment of organizations and colleagues; responsibility; promotion Encourage employees need to satisfy both maintenance and promotion factors
- Actual capacity of employees: This is a factor showing the ability to solve work, knowledge, professional qualifications on the work It impacts both sides to motivate employees, it will strengthen if individuals are qualified to deal with the work, otherwise it will discourage individuals in solving work
- Seniority, working experience: They are factors that are interested in labor remuneration and labor arrangement and are expressed in the period of time that employees have been attached to the job The higher the seniority and the labor experience, the higher salary the labor will require and vice versa
Value is what belongs to the concept, beliefs and practices associated with human emotions Values include issues such as honesty, loyalty, freedom and responsibility Values are important to employees because they affect people's material desire and professional ethics
Attitudes are positive, negative assessments, feelings and tendencies of people for a concept or object This factor is influenced by many social conceptions and the impact of those around The attitude of employees will directly affect the outcome of the job
Theories of working motivation to retain employees
1.3.1 Theories about needs 1.3.1.1 Abraham Maslow’s hierarchical doctrine of demand (1943)
Abraham Maslow said that human behavior stems from need These needs have different levels and are prioritized from low to high When low-level needs are satisfied, a demand at a higher level becomes a driving force After a need is met, another need will appear As a result, people always have unmet needs and these needs motivate people to perform certain tasks to satisfy them
- Basic needs (Physiological needs): are the basic needs to be able to maintain human life such as food, clothing, drinking water, housing A Maslow believes that, when this need has not been satisfied to the extent necessary to sustain life, other needs will not motivate people In an organization, employees first need to be properly paid to be able to support themselves and their dependents, ensuring their minimum living standards so they can survive
- Need for safety: Needs to avoid the danger of body and the threat of losing jobs or losing assets Employees in organizations want to work in safe places, leaders care about their health and safety Moreover, they also want the stability of their work to ensure a long life, they do not want to risk losing their jobs all the time In an organization, the expression of assurance of safety needs can be working conditions, labor contracts, policies on social insurance, unemployment insurance, health policies, retirement regimes etc
- Social need (need for association and acceptance): is a need for friendship, love, family affection and integration need in social life People with high social needs prefer to work with the participation of many people In the organization, this need is expressed through the expectations of the employees about good relationships with colleagues as well as superiors, being able to participate in collective activities, working in teams In order to help employees meet this need, administrators need to encourage them to cooperate in a friendly manner, actively participate in the group's collective activities such as sports, arts, picnics etc
- Self-esteem need: according to A Maslow, when people begin to satisfy the need to be accepted as members of society, they tend to be self-respected and want to be respected by others People with high respect needs often work hard and try to improve the skills needed to succeed It is expressed through the expectations of employees about the reward / special bonus for their dedication, the promotion in the public, being admired by colleagues, and having superior trust This need allows them to build pride for their employees, motivate them to complete their work with high quality, giving them opportunities to show their abilities and bravery
Figure 1.1 A Maslow's hierarchy of Needs
(Souce: Bùi Anh Tuấn và Phạm Thúy Hương, 2013, trang 94 - 95)
- Need for self-actualization: A Maslow sees this as the highest need in his decentralization The ultimate goal of people is to improve themselves, or to develop comprehensively all potential possibilities in the field that they are talented The highest level is the need to express people who can master themselves and be able to influence others, who are creative, have a high sense of self- awareness and are able to solve problems This is the most difficult need to be satisfied Employees who have met the need to be respected will feel the desire to express their creativity in their work and development as well as face more difficult challenges Employees always want to become better and better Administrators
Self – actualization need Esteem need
Safety needs Physiological Needs need to recognize these needs in their employees to create opportunities for them to develop their talents and improve their professional skills and be competent, confident in dealing with work requirements and new challenges
According to this theory, administrators must first pay attention to material needs, on that basis, gradually raise up to higher needs The hierarchy of employees' needs in the organization is not uniform, so it cannot satisfy them in the same way
Therefore, administrators need to determine the hierarchy of needs for each object to satisfy
In fact, in countries with different conditions of economic development, being developed, developing or underdeveloped, the hierarchy of managers' needs to focus on motivating is different According to the classification of the World Bank Organization (WB), in 2010, the group of countries with average income is low (on average from 876 to 3,465 USD / person / year), including 58 countries and territories
In which, Southeast Asia has 5 countries: Thailand, Indonesia, Philippines, East Timor and Vietnam (in 2010 it is 1,130 USD / person / year, in 2017 is 2,385 USD / person / year) Thus, Vietnam is still in the group of countries with low average income, the material life of the people in general is still low Therefore, physical needs and safety needs are two levels of priority need to satisfy employees first When doing well in satisfying these two levels, ensuring adequate material life for employees, managers should satisfy the needs at higher levels after that
1.3.1.2 McClelland’s theory of three needs (1960)
David McClelland and others have laid out three major motivations or needs at work:
- Need for achievement (nAch): Motivation to excel, to achieve achievement in a range of standards, to strive for success
- Need for power (nPow): The need to make others behave in a way that if left free they will not behave like that
- Need for inclusion (nAff): The need to have friendly and close relationships between people
From research in the area of need for achievement McClelland has found that people with high achievements often differ from others in that they always want to do things better They look for opportunities in which they can have a personal responsibility for finding solutions to problems, getting a quick and clear response to their performance and they set out their goals which are moderate They prefer to solve a difficult problem and personal responsibility for success rather than letting others take the opportunity and action
The need for power is the desire to have an impact that will influence and have control over others Individuals with high nPow scores often prefer to hold responsibilities, try to influence others, like competitive situations and focus on status and often pay more attention to gaining prestige and influence on people than effective operating results
McClelland's third need to consider himself is integration This need has been the best attention of the researcher Inclusion can be seen as a desire to be loved and accepted by others Individuals with nAff scores often strive to gain friendship, prefer cooperative situations rather than competitive situations and they desire to have relationships that lead to high mutual understanding
Many large-scale studies show that some predictions can be made based on the relationship between the need for achievement and the performance of work
Although the need for power and the need for inclusion is less studied, there are also consistent findings in these two areas
- First, individuals with high achievement needs often prefer job situations with personal responsibility, feedback and moderate risk When these characteristics become more popular, high-achievement people will have very strong motivation
- Secondly, a person who needs high achievement is not necessarily a good manager, especially in large organizations Salespeople with high nAch are not necessarily good sales managers, and good sales managers in large organizations often do not need high performance
Content of retaining employees
1.4.1 Determine the need of employees
The purpose of determining employees' needs is the process of identifying which employees' needs are satisfied, being satisfied and not satisfied corresponding to the type of labor, department From that, administrators offer ways to retain employees through meeting their needs
The determination of employees' needs needs to be done regularly because the needs of employees are constantly changing, requiring managers to grasp to adjust retention policies to be appropriate and effective the best
The content of determining the needs of employees (Ngo Thi Tam, 2015, page 21):
- Bases for determining the needs of employees
+ Professional capacity of employees: If employees show that they have professional qualifications, they often have the need to promote, want to be trained to improve their qualifications and express themselves
+ The attitude of the employee: It is reflected in whether or not the employee is satisfied with the job and the enterprise where they work
+ Employee's personality: There are many ways to classify employees' personalities If employees are extroverted, they often have autonomy needs in their work, wishing to have opportunities to communicate with people around them; conversely, if employes are introverted, they often want a stable, safe job
+ Other bases: Age, gender, family circumstances of employees etc
- Methods to determine the needs of employees
In order to collect information that identifies employees' needs, methods such as questionnaires, interviews, group discussions, and analysis of available information can be used (report on the results of the performance evaluation, the employee's personal achievement sheet, personnel profile, summary report of the departments, employee's work diary) etc
1.4.2 Retain employees with material tools 1.4.2.1 Salary
Salary are fixed amounts of money paid to employees and often in a time unit (week, month, year) Salary is usually paid to managers and professional, technical staff (Nguyen Van Diem and Nguyen Ngoc Quan, 2007, page 170) Salary are the main income that employees receive, to help them maintain and stabilize their daily lives and their families
Maslow need pyramid pointed out that the first and most basic need is physiological needs This means that labor first concern is the income to ensure his life and his family, to recreate labor production Herzberg's doctrine also points out that salary in the group affect employees' work motivation Salary not only shows the value of work, it also shows the value and status of employees in the family, in organization and society
Applying the equity theory of J.Stacey Adams, the construction of a system of work value and salary should be commensurate with what contributes Salary paid to employees must be commensurate with their efforts for the organization Salary payment must follow certain principles and be consistent with the production and business situation of the organization Enterprises cannot pay too high salary to employees because it adversely affects their production and business activities, and on the contrary, they should not pay too low salary for employees, which directly affects the employees what can make them not actively work, even they leave the business
In order to effectively pay the salary as a lever for labor motivation, it is necessary to ensure the basic requirements and principles in salaries as the following:
- Salary must ensure the reproduction of labor force;
- Salary must be satisfactory, fair and reasonable with labor effort Therefore, every enterprise needs to build a salary system and apply reasonable pay methods
- Salary must be a motivation to motivate employees to work hard, encourage them to apply scientific and technical advances to production, to promote the spirit of creativity and attachment to work, positive impacts division of labor in society
Businesses who pay salaries should aim at four basic objectives: attracting employees, maintaining good employees, stimulating employees and meeting the requirements of the law Especially for creating motivation for employees, enterprises need to build a salary system to ensure the fairness of wages
With the development of the current market economy, there are many forms of payment which are relatively diverse and flexible, but basically still consist of only two main forms of payment:
- Payment by product Depending on each subject, the scope of application, the salary system and payment methods will be used appropriately
In addition, the more equal the wages are, the higher the job satisfaction of employees, the more effective the organization's activities are Therefore, the use of different salary levels is an important economic lever to direct the interest and motivation in the labor of employees on the basis of personal interests If the organization pays unreasonably or for the purpose of profit purely, does not pay adequate attention to the interests of the employees, the workforce may be exhausted in physical strength, reduced in quality, limited to manufacture labor supply engines Another manifestation is the movement of employees, especially those with high qualifications, to units with more attractive salaries
Therefore, in any organization salary is always a top concern and a very important motivation for employees to work, constantly improve knowledge and skills When organizing the construction of a proper salary policy system, it will ensure the re- production of labor force and stimulate employees to improve labor productivity, quality and creativity
Bonuses are a one-time financial incentive (usually at the end of the quarter or the end of the year) to pay for employees’ ability to perform the job Bonuses can also be paid unexpectedly to recognize outstanding achievements such as completing a project ahead of time, saving budgets or giving valuable innovations (Nguyen Van Diem and Nguyen Ngoc Quan, 2007, page 223)
Bonuses are a kind of material stimulus that has a positive effect on employees in striving for better jobs There are many types of bonuses, organizations may apply some or all of the following types of rewards: Productivity and quality bonus; saving bonus; initiative reward; rewarding according to the general labor results of the organization, applying when the organization operates effectively; rewarding for other activities increases the benefits or reputation of the organization,
Experience on retaining employees in SMEs
1.5.1 Experience of L&A (Le&Associates – specializes in providing manpower solutions for businesses)
L & A, a member of L & A Holdings, is currently one of the leading companies in Vietnam in human resources services and outsourcing Founded in 2001, with 18 years of continuous development thanks to the trust of customers, L & A has built a wide reputation This is because L & A has introduced practical solutions to meet the diverse needs of customers in human resource management, in order to realize the development strategy for each enterprise and L&A itself
According to L&A management, first of all, it is necessary for employees to work in their own speciality, so that they can feel that they contribute to the Company In addition, it is recommended that only personnel with leadership qualities should be kept, this is the glue that binds other good employees
Secondly, the Director attracted employees with sincere personality because of the Company, had a clear vision and allowed employees to see promotion opportunities at L&A
Thirdly, use a portion of bonuses for employees instead of salary increases Because that motivates employees to be more productive, helping create greater profits for the Company
Fourthly, change the Company's Culture to retain employees The company always requires employees to work at office hours, but the employees of the media company cannot work that way and take leave Therefore, the Board of Directors of the Company has let its employees work in a more flexible way
1.5.2 Experience of United education Joint Stock Company
United Education Joint Stock Company (UE) is one of the leading companies in Vietnam possessing experienced consultants who have been operating effectively and prestigiously in the field of study abroad and other support services The company has received high trust from parents, pupils/students and customers over the years
According to UE management, the leader should avoid participating in detailed work, instead, assign key personnel At the same time, always prepare people to replace those people to avoid "star disease"
The high-wage person who quit his/her job, sometimes not at work, sometimes due to spiritual matters, the Company retained a number of high-paid talents but wanted to quit just because they are envious of other employees when the Company's Board of Directors pay much attention to these new employees
There must be an exchange of information between the Company Leaders and their employees about their needs and the obligations of both parties in the process of employing employees as sending employees to study couses But after that they must transfer studied technology to the Company After they have finished transferring and quit, it is considered that the Company can get back the investment
In addition, the Company has also reduced the measurement system and evaluated the performance of employees associated with specific assignment and clear criteria Thus, the Company has just avoided causing pressure, stress at work, and creating the best conditions for employees to complete their jobs
1.5.3 Lessons learned for Impac Corporation
Le&Associates and United Education Joint Stock Company are all small businesses like Impac And basically, small and medium enterprises always need to create great resilience, so employees here need to be better than others These are employees who have the ability to handle ingenious problems, systematic thinking, can take on many jobs at the same time and have the spirit of improvement
Enterprises generally reward cash or shares to retain good employees, but this is difficult for small and medium enterprises that are not strong in financial resources
From the above experiences, it is possible to draw some lessons to retain Impac Corporation employees such as:
- HRM should be separated, the director should not concurrently hold that job to maintain fairness in evaluating employees
- Excellent way to keep talented people at the company's financial difficulties is that the Company must continuously grow and show employees the future of their own development at the company
- The Director of the Company himself may attract employees, but employees stay or not is another story and the number of employees leave the company is less than the number of employees who leave their directors
- It must be understood that the motivation of the employees to work really may be material but sometimes may be spiritual, because many employees despite being trained or well paid still leave.
Research design
The content of retaining employees at Impac Corporation is synthesized by the author based on the theory of motivational theories and through studying the factors affecting the retention of employees based on the basis of the theory of two groups of factors of F.Herzberg (1959) and assuming the retention of employees at Impac Corporation affected by 8 factors (see Figure 1.4) and described in detail as Table 1.1
(Source: proposed by the author)
Table 1.1 Detailed description of the factors affecting staff retention at Impac
Corporation Research variables Description variables
Salary ensure the life of you and your family The salary payment method applied by the Company is reasonable and fair
The company considers to increase the salary properly according to regulations
Conditions for considering salary increase are appropriate
Reasonable bonus, which encourages you to work Company gives fair evaluation and reward Rewarded employees are appropriate
Company rewarded in a timely manner
Welfare policy for employees is diverse and abundant Welfare policy expresses the Company's concern to employees
Employees are satisfied with the welfare regimes of the Company
Job performance assessment Training and promotion opportunity
(Source: synthetized by the author) 1.6.2 Designing questionaire
The survey method is a written interview method, done at the same time with many people following a printed questionnaire Respondents answer their opinions by checking the corresponding boxes according to a certain convention
The working environment in the Company is very friendly and united The company has good cultural values and philosophy
Communication between departments is very good Employees are provided with adequate and satisfactory equipment The company always has a clever and delicate discipline policy
Current work is suitable for the capacity and expertise of the staff The current assigned work required a clear and reasonable responsibility
Employees are proactive in their work The assigned work is challenging and interesting
Jobs assigned are stable and long-term The company operates stably and effectively
Assessment criteria are full and reasonable Assessment method is appropriate
The assessment results are fair and reflect the results of the work
Employees are fully trained with the necessary skills to perform their jobs
The company is very interested in the training and creating favorable conditions for employees to improve their professional knowledge The training programs of the Company are appropriate with the ability of employees
The company creates promotion opportunities for capable people and employees know the conditions needed to develop at work
Traning and promotion opportunities are fair to everyone
Based on the theoretical basis presented above and consulted with the instructor, complete questionnaires are designed with 2 main parts:
Part 1: In order to collect general information about participants of the survey, including name, age, gender, education specification, working time and department
Part 2: Content of the survey, aimed at reviewing and evaluating staff retention at Impac Corporation The survey questions all use the Likert five point scale (1 is completely disagree and 5 is fully agree) and the design of the survey question consists of 8 elements (Salary; Bonus; Benefit; Working environment and conditions; Job assignment; Job stability; Assessment of work performance, Training and promotion opportunities) are described in 30 questions (details are in Annex 1.1 - Survey questionnaire for employees of Impac Corporation)
1.6.4 Data collection methods 1.6.4.1 Methods of collecting secondary data
The thesis uses data collected from internal documents, reports and information of Impac Corporation in the period from 2015 to 2017, data sources collected from outside such as the central ministries/agencies, publications have been published (textbooks, articles, magazines, internet, dissertations, )
This is a completely indirect method of collecting information, not contacting the survey subjects In the upper part of the thesis, the author has studied many references and pointed out the problem has not been considered, thereby forming the research direction for the whole thesis This method is also used when the author makes the content to retain employees in Impac Corporation based on the existing theory of other authors about retaining employees Therefore, the content of retaining employees in Impac Corporation, which the author mentioned, ensures the solidity of the theoretical basis combining the specificity of the investment sector and the provision of technology transfer of medical equipment, science and technology
1.6.4.2 Methods of collecting primary data
Overall sample of the research process: All employees have been working at Impac Corporation for the period of 2015 - 2017
Sampling method: The author uses the random probability sampling method
Sample size: Due to the current number of employees of the Company is 22 people and according to the number of storage statistics of the Company, in the period
2015 - 2017, a total of 16 people have left the Company for diverse reasons, so the overall sample of the research process is not many, only 38 people Therefore, the author will investigate the sample size on a total of 38 people
Sample standard: is employees who have been working at Impac Corporation for the period of 2015 - 2017
Based on the 38 samples of the survey and the official questionnaire has been completed, the author collects specific data as follows:
- Step 1: The survey questionnaire was printed on paper, sent directly to the respondents and then immediately received the questionnaire that was answered by the respondents In addition, there are 2 cases of employees who used to work at Impac Corporation but now they are working for other enterprises in Ho Chi Minh City, so the author conducted surveys and exchanges information via email and phone
Duration is from 8/2018 to October 15, 2018 The total number of votes issued is 38 votes
The total number of valid votes collected is 38 votes by the author directly exchanging with each employee who has been working at Impac Corporation for the period of 2015 - 2017 to investigate, guide and collect
1.6.5 Methods of processing and analyzing data
Analytical method is to study different documents, reasoning materials about retaining employees and then analyzing them into each part, each face by time to understand them fully and comprehensively
Synthesis method is a method of linking each item, each part of information from the collected theory to create a new, complete theory system of retaining employees In addition, document synthesis helps the author have a more comprehensive, general view of the existing documents on retaining employees in the enterprise
Statistical method is a system of methods such as collecting, synthesizing, presenting data, calculating characteristics of retention of employees at Impac Corporation to serve the analyzing, planing, making decision process and use in collecting collected data to synthesize generalized data for analysis, evaluation and conclusions
Comparison method is a method to consider the analysis criteria based on the comparison of data with an original indicator and this method is used to obtain specific indicators of value, volume and growth speed of research issues during analysis time At the same time, compare the survey results to synthesize research results in a general way
Chapter 1 presents the most basic theoretical issues about retaining employees At the same time, chapter 1 also points out that factors affecting employee retention can be divided into two groups of factors, namely: Factors belonging to enterprises and factors belonging to employees
Employee retention content has also been mentioned, including:
(1) Determining the needs of employees;
(2) Retaining employees with material tools such as salaries, bonuses and benefits;
(3) Retaining employees with mental tools such as: working environment and conditions, Job assignment, Job stability, Assessment of work performance, Training and promotion opportunities
The author delves into the presentation of data collection and processing methods for retention of employees at Impac Corporation
In addition, the author also provides Process and proposal of research model; At the same time, based on the theoretical basis, the author synthesizes the factors affecting the retention of employees at Impac Corporation by investigating and surveying employees who have been working at the Company by Question list
Based on the sample size of 38 people, the author collects, synthesizes and processes the results obtained by Excel software.
CURRENT SITUATION OF EMPLOYEE RETENTION AT
General overview of Impac Corporation
2.1.1 Process of formation and development of the Company
Company name: IMPAC CORPORATION Head office: Room 1905, 19th Floor, Charmvit Tower, No 117 Tran Duy Hung Street, Trung Hoa ward, Cau Giay District – Hanoi, Vietnam
Email: info@impac.vn Website: www.impac.vn IMPAC CORPORATION was established on September 20, 2007 and officially operated from March 1, 2008 IMPAC was founded based on the initiative of the students of Course I - Master of Business Administration Program of IMPAC University - USA
IMPAC strives to become one of leading companies in the field of investment and technology transfer of products and services: Medical, environment equipment, science and technology, information technology by creating working environment encourages all members to maximize creativity in order to create new values and contribute most effectively to shareholders and the community
2.1.2 Organizational structure of the Company
The organizational structure of the Company is built according to the online functional structure model Management collaborative relationships are carried out directly in a straight line, with no overlap between stages, parts Each department has different functions and tasks but still has a close relationship with each other and towards the common goal of the Company (generalized in Figure 2.1)
- General Director of the Company: is the person with the highest decision-making power in the Company and the Company's representative before the Law The General Director is responsible for managing all business activities of the Company the Company's regulations and in accordance with the Labor Law; periodically report on the Company's business situation to all employees of the Company
- Deputy General Director: is the person who assists the General Director in the business process of the Company
- Office block includes functional departments:
+ Administration - Human Resources Department is the consulting and assisting office for the General Director about the organization, personnel, administrative, legal, communication and public relations activities of the Company; Being responsible to the General Director for such activities in the assigned tasks and authority
+ Department of Finance - Accounting is the advisory division, assisting the General Director in organizing accounting work, accounting apparatus to ensure compliance with the law on accounting; Performing the synthesis of internal management reports, reports to the competent State agencies according to the functions and tasks assigned; Be responsible before the law and the General Director for such activities in accordance with the provisions of law and the functions, duties and authority assigned
Deputy General Director Deputy General Director
Admin Division Project Division Sales Division
- Project Division includes functional departments:
+ The Project Department has the function of marketing, finding jobs, preparing bidding documents for projects to create jobs for the Company; Investment in project development, management and exploitation of projects ensures high efficiency and development objectives of the Company
+ The Technical Department functions to advise the General Director on technical, technological, norms and product quality; Design and implement technical supervision of products as a basis for accounting, bidding and signing economic contracts; Combine with the Maintenance Department to monitor and check the quality and quantity of goods and materials when buying or exporting; Checking and supervising product quality
+ The Maintenance Department has the function of maintaining machinery and equipment according to the Company's regulations; repair according to the technical process of each stage for each product code; Advise the General Director and make and implement the equipment maintenance plan according to the Company's equipment maintenance regulations, calibrate and control measuring equipment;
Prepare, implement and manage maintenance budgets
- Business Division includes functional departments:
+ The Market Development Department is the advising and assisting department for the General Director in the field of market functions to build and implement marketing and market development activities throughout the Company; Organize communication and brand promotion; Manage, inspect, monitor and evaluate the quality assurance of services of the Company; Handle customer feedback; Prepare, evaluate, manage and monitor the implementation of economic contracts of the Company; Guide to inspect and supervise the signing of implementation of decentralized economic contracts for units
+ Customer Service Department records and summarizes customer complaints, organizes the cause analysis, preventive actions and monitors the implementation process; Organize and build information channels so that customers can easily access information about the Company, product features, prices, payment methods, etc Annual reviews assess the level and effectiveness of information channels for customers; Coordinate with Market Development Department to implement promotion programs; Organize visits and gifts for customers; Monitor product warranty plan, check warranty plan, warranty operation, repair and maintenance activities to understand the Company's satisfaction with this activity
Table 2.1 Business records of the Company in the period of 2015-2017
(%) Revenue 18.429.053 19.614.864 20.853.652 1.185.811 6,43 1.238.788 6,32 Cost of goods 17.562.356 18.601.827 19.739.617 1.039.471 5,92 1.137.790 6,12 Gross profit 866.697 1.013.037 1.114.035 146.340 16,88 100.998 9,97 Selling expenses and general and adminstrative expenses
Profit before taxes 401.808 436.742 490.287 34.934 8,69 53.545 12,26 Taxes to the state budget 100.452 109.186 122.572 8.734 8,69 13.386 12,26 Profit after taxes 301.356 327.557 367.715 26.201 8,69 40.159 12,26
(Source: Impac Corporation) 2.1.3 Characteristics of business activities and manpower of the company
2.1.3.1 Characteristics of business activities of the Company
Impac strives to become a leading multidisciplinary company in Vietnam in the field of investment and technology transfer of products and services: Medical equipment, environment, science and technology, information technology by the years, the business situation of the Company has achieved remarkable results Table 2.1 shows that the business targets of the Company have increased over the years, in which the 2016-2017 period has a higher growth rate than in the period 2015-2016 That proves that Impac is on the way of rapid development With this outstanding development ability Impac will affirm its position in the market of the country
2.1.3.2 Characteristics of manpower of the Company
The total number of Impac's average employees increased over the years, the average number of employees in 2017 of the Company was 22 people, increased by
3 people compared to 2015, equivalent to 15.79% Specifically:
Table 2.2 Labor situation of the Company in the period of 2015-2017 Indicators
Growth compare to the previous year 1 5,26 2 10,00
3 Structure according to professional qualifications
Structure according to professional qualifications
Regarding gender, Impac's labor has not changed much over the years Due to the characteristics of operating in business field that need to communicate a lot, it is necessary to move a lot to meet customers so the employees in the Company are mainly male The proportion of female employees in the total number of employees of the Company always fluctuates around 42-45% and mainly in the departments that require the grace, carefulness and skill of women such as receptionists, customer service department
In terms of age, Impac employees are mainly under the age of 30, followed by the age of 30 to 45 years This is a common structure in private enterprises established in recent years The young labor structure is an advantage of Impac when operating in the service sector, requiring its staff to be young, dynamic, enthusiastic, and in love with the job, meeting the maximum needs of customers In the period 2015 -
2017, Impac's employees aged under 30 to 45 are always at a high level, from 85% or more of the total number of employees in the Company
In terms of qualifications, the staff at Impac mainly have a university degree, which is also a common feature of enterprises that do not directly produce, and has a relatively stable rate over the years Employees have similar qualifications, only a few are still at the intermediate level Currently, employees themselves are in the process of continuing to improve their educational levels and professional qualifications to meet the needs of customers and the number of graduates at higher education levels is increasing through the year.
Analysis of employee retention status at Impac Corporation
2.2.1 Current situation of determining the needs of employees at the Company
In the past years, the work of determining the needs of employees in the Company has not been implemented in a systematic way, mainly working in the direction of the Company's leaders and assessing needs based on experience and on the time of contact with employees during the general working process, the accuracy and effectiveness of the evaluation results are not high and not yet grounded properly
Currently, due to limited facilities, the Company does not implement common dialogue channels, does not have company message board or comment boxes
Therefore, the dissemination or exchange through indirect dialogue channels is hardly used In the coming time, to grasp timely and more accurately the desires and aspirations of the employees, the Company should pay attention to and well perform the work of determining the needs of laborers
2.2.2 Status of retaining employees with material tools 2.2.2.1 Salary
Currently, Impac Company has built regulations on management and distribution of wages according to the principle of getting payment for jobs which employees have done Accordingly, based on the level of completion of the business plan to determine the salary fund to be spent on a monthly, quarterly and yearly basis and the total salary fund is spent including:
V tql = V đg + V tldvkh +V bs + V dpnt
- Vđg: Salary fund calculated according to unit price (unit price salary fund will be adjusted when implementing profit plan to increase or decrease and to exceed the revenue plan by 20% or more)
- Vtldvkh: Salary funds from other services which are not included in the unit price
- Vbs: Additional salary fund (salary paid for vacations, allowances, holidays, Tet holiday, meetings, study, break of female labor regime, )
- Vdpnt: Reserve fund of the previous year transferred to the following year Salary funds are determined on the basis of other business revenues and include 2 parts:
- Basic salary fund: Calculated based on the minimum salary set by the State, salary coefficient including allowances (if any) and actual working days
- Additional salary fund: Calculated on the basis of the increased minimum salary portion due to increasing productivity, completing and exceeding the planned level, salary coefficient including allowances (if any) and actual working days
+ Additional minimum salary is adjusted according to the level of completion of the plan
+ Salary allowances include: Position and responsibility allowances
+ Overtime allowance: Overtime on weekdays, on weekends, overtime on holidays, overtime pay by 150%, 200% and 300% of the hourly regular payment
+ Responsibility allowance equal to 0.05 minimum salary set by the State
+ Dangerous toxic allowance: According to the Circular No 04/2005 / TT- BLĐTBXH dated January 5, 2005 of the Ministry of Labor, War Invalids and Social Welfare
Salary of employees is high or low depends on the business results, unit prices and salary funds approved by the Company And the salary of the employee is paid from
The salary of each employee is calculated as follows
TLi: Monthly salary of the employee i Lcb: Basic salary and is determined as follows: Lcb = (M + Pat) x Ntt M: Minimum salary of the employee i
Pat: Lunch allowance of the employee i Ntt: Number of actual working days for the employee i P: pensions and other allowances (if any) of the employee i (such as responsibility allowances, telephone allowances, )
Ti: Bonus of the employee i (if any) LTg: Overtime payment (if any) If arranging for the employee to leave in return for compensations, the Company shall not make this payment
Principle for calculating the number of working days:
- Departments arrange for employees to take enough leave during the year, for laborers working in shifts, they shall have to make full compensations for holidays as prescribed
- Public holidays of any month will be paid in that month
- For overtime work, departments arrange for employees to leave for compensations
In special cases, no compensatory leave can be arranged, make payment of overtime pay to employees
- Salary is paid according to the actual working day and not exceed the working day regime in the month except in special cases due to overtime but not arranged to compensate
The company always pays attention to the work of salary, satisfactory and transparent salary payment in order to encourage employees to stick, love their jobs and fulfill the assigned tasks (see Table 2.3 )
Table 2.3 Payroll of employees at the Company in December 2017 (quoted)
No Name Position Basic salary
Social Insurance 8%, Health Insurance 1,5%, unemploymen t insurance 1%
The survey results of salary factors refer to the average value (AV) is rather low (see Table 2.4) Although, the employees at the Company are quite satisfied with the criteria "The company considers to increase the salary properly according to regulations" accounted for 78.95% and the AV is 3.55 but the conditions for considering salary increase for many employees still unsatisfied, accounting for 44.74% with a low AV of 2.89 At the same time, the salary scale of the State is quite low, so the employees cannot ensure the lives of themselves and their families with the response of accounting for 42.11% and the AV of this criterion is only 3.08 In addition, a significant proportion of employees believe that the salary payment at the Company is not really fair, accounting for 50% and the result of the
AV is very low at 2.74 Because the Company applies the general salary calculation regime for all employees, the salary is still of average distribution Therefore, the Board of Directors of the Company should consider and adjust this activity to bring better efficiency, improve work motivation for employees
Table 2.4 Results of employee survey on salary of the Company
No Survey questions about salary
1 Salary ensure the life of you and your family 7,89 34,21 10,5
The salary payment method applied by the Company is reasonable and fair
The company considers to increase the salary properly according to regulations
4 Conditions for considering salary increases are appropriate 18,42 26,32 18,4
(Source: synthetized by the author) 2.2.2.2 Bonuses tool to create enthusiasm for employees Currently, Impac Corporation is applying the following bonus forms:
- Rewards for departments and individuals with outstanding achievements such as completing outstanding jobs, having achievements in their work etc
- Rewards when employees have initiatives to contribute high efficiency in work, cost savings and construction of the company The specific reward level shall be decided by the Board of Directors (from VND 500,000 / time - VND 2,000,000 / time), depending on the effectiveness of such initiative, contributing to the Company
- Rewards on the occasion of holidays May 1st , September 2nd and New Year holidays (VND 500,000 / person); Lunar New Year (VND 2,500,000 / person - VND 3,500,000 / person)
Table 2.5 Total paid bonuses of the Company in the period of 2015 - 2017
No Year Total paid bonuses (Million
The total amount of bonuses paid by the Company increased over the years (see table 2.5) The company based on the results of completing the work of each staff member to carry out the reward consideration, however, the assessment of the implementation is still "the nature of the peace and harmony" and has not yet assessed the actual working results of each employee
Table 2.6 Results of staff survey on bonuses of the Company N
O Survey questions about bonus Result (%)
1 Reasonable bonus, which encourages you to work 10,53 31,58 2,63 47,37 7,89 3,11
2 Company gives fair evaluation and reward 5,26 36,84 5,26 44,74 7,89 3,13
4 Company rewarded in a timely manner 26,32 52,63 13,16 5,26 2,63 2,05
(Source: synthetized by the author)
According to the survey results, up to 68.42% of the surveyed employees believe that the rewarded person is appropriate at the AV of 3.26 At the same time, most of them also felt that the amount of bonuses they received every year was fair, equal to 52.63% and it was acceptable for 57.89% corresponding to the AV of this criterion was 3.13; However, there is also a large number of employees who disagree with the evaluation, rewarding and rewarding level, accounting for 42.11% referring to the AV is 3.11 (details see Table 2.6) The reason is that the Company has not yet built a separate bonus fund, the annual bonus of the Company is determined on the basis of the results of that year Therefore, the reward consideration is not timely, the reward is only awarded at the end of the year, this distance is too far from the time of the rewarded performance Therefore, the survey results of this criterion when referring to the term of AV are very low, reaching only 2.05 According to B F Skinner's theory, this will significantly reduce the effect of motivating employees
Analysis of factors effecting employee retention
2.3.1 Factors belong to the business
- The nature of the work at the Company must be in constant contact with customers so the attitude of employees is extremely important, giving customers a comfortable psychology, good service attitude to attract a lot of customers to the Company
- The factors of working conditions, working environment and corporate culture of the company are not really good, because these works are not really interested by the Company This has a significant impact on organizational management, because in parallel with human resource management policies, there must be a good cultural environment and a suitable working condition
- Although the Board of Directors of the Company also regularly cares and monitors employees, but with the old business management experience The Company's labor management does not follow a certain regulation or method This has significantly affected the working style or management in the past time
- Organization's human resource management activities:
The work assignment for employees in the Company is quite reasonable, most of the employees of the Company are satisfied with the assigned work, both challenging and interesting and active at work Responsibilities are clear and consistent with their capabilities and expertise The company is also very interested in training but only facilitates time for employees, not reducing the workload for people sent to study, not maximum support for study expense
However, the labor situation of the Company always has strong fluctuations, the number of employees with experience less than 1 year is rather high, leading to the psychological fluctuations and worries of employees which directly affecting the confidence of employees to the Company Therefore, in the coming time, the Company needs to pay special attention to building trust in employees, so that they can be assured to work and devote themselves to the Company
- Employees anywhere want to achieve a high salary, a long-term and stable job and can promote at work But in Impac Company due to the scale as well as the business field, most of the promotion has not been paid attention, the employees keep a long working position in the Company without any change At the same time, they have to undertake many works at the same time which putting much pressure on them
This leads to depressed psychology of employees
- Besides, the employees at the Company are mostly qualified employees, so the motivation to work for them must be paid much attention The demand of this labor class is relatively complicated if it does not respond essentially and appropriately, it will easily lead to depressed psychology of the employees
- Personnel at Impac Corporation mainly has college and university qualifications and continues to be in the process of improvement to meet customer needs
However, the employees in Impac Company is mainly experienced under 01 year due to the fact that the annual average number of resigned employees is high, leading to the consequence that the Company is always in shortage of staff This directly affects the ability and work experience of the workforce in the Company, and increases the cost of human resources due to regular recruitment.
Overal assessment of the status of retaining employees at Impac Corporation69 1 Achieved results
Through the research results, it can be seen that Impac Corporation has provided motivational tools to work and retain employees Board of Directors The company always strives and tries to implement fully and seriously the regimes and policies, creating favorable conditions for employees to perform their assigned tasks and earn stable incomes The achieved results are listed below:
- The company uses material tools to generate income for employees In addition to salary, the Company has used various bonuses to increase income for employees such as year-end bonuses, bonuses for big holidays, bonuses for groups and individuals who completed the task In addition, the Company is also interested in making full benefits such as: lunch allowance, tuition allowance, social insurance, health insurance, unemployment insurance, sickness, maternity and visit allowance regimes and on some other vacation etc Benefits not only add to the income of employees, but also express the Company's interest in health care, spiritual life for employees, encouraging them to be enthusiastic at work;
- The company always strives to ensure comfortable, safe working conditions to meet the needs of employees in the most complete way; Fully equipped with machinery and equipment, management tools to ensure employees perform well
This helps them to fully develop their capabilities, capacity in work, assuring quality and improving productivity;
- The assignment and evaluation of working performance are always paid attention to by the Company in order to help employees promote their abilities, speciality and as a basis for salary payment, consideration and reward for employees as well as the implementation of the Company's objectives;
- Training is performed regularly by the Company and attracts many employees All employees are given the opportunity to study to improve their qualifications and to participate in seminars, conferences, and capacity building programs This helps them both acquire new knowledge, new ways to apply to work, and create conditions for them to show their talents, thereby contributing to improving working efficiency;
- Employees at the Company have opportunity to be promoted in work This helps the Company to exploit the working capacity of employees and create a great motivation for them to be willing to devote and contribute ideas
In addition to the outstanding results achieved in retaining employees, the Company also has limitations that need to be overcome to further improve this work, namely:
- Wages paid to employees are sometimes equated According to the evaluation criteria to pay wages, employees just complete the tasks can achieve labor productivity coefficient Meanwhile, some other employees have more contributions, the complexity of the work is higher, the responsibility is greater but the coefficient is not much different Therefore, many employees believe that the salary payment method of the Company is not appropriate and the salary is not really commensurate with the results of their work performance and labor value;
- The company uses different bonus systems to increase income for employees and create enthusiasm in work, thereby creating strong motivation for employees
However, when evaluating the effectiveness of received reward, many employees think that they do not see the relationship between the performance results and the rewards with commendation The time of rewarding and recognizing the achievement is delayed leading to reduce the level of stimulation of employee behavior;
- Social welfare policy is not really effective at the Company Because the company is located in Hanoi city, the cost of living is quite expensive, the employees always have to worry about the "bread and butter" and will not be fully focused on working to increase productivity and efficiency;
- Some employees said that the work they are doing is not suitable for their professional qualifications and aspirations, the work assignment is not reasonable
Many employees must also concurrently hold different jobs so they cannot promote their enthusiasm, creativity in work and cause psychological pressure to them in the process of working.;
- Employees have not really believed in the Company, there are many employees who believe that the Company is not stable and they cannot realize the stability and long-term in their work at the Company;
- Workplace facilities for employees are still limited in area, leading to quite narrow space There is little space for employees to work Besides, a number of machinery and equipment, management tools serving the work are old and backward, so the operation efficiency is not high;
- The assessment of the performance of employees' work at the Company has many limitations, the evaluation criteria are insufficient, the assessment method does not reflect accurately the results of the work performance and has not listen to feedback of the staff but depends on the assessment of the manager or the direct manager, which proves that the assessment results lack accuracy and lack of fairness;
- The company has only facilitated employees in terms of time and has not reduced the workload for whom sent to study Moreover, the training budget only meets part of the learning needs of the job;
- The fairness of promotion opportunities for employees is not high, as shown by some good qualified employees trained well but still not able to create promotion opportunities or when they achieved excellent results but were not rewarded, considering their right position made them leave the Company to seek better opportunities
- The company does not have any research activities to determine the needs of employees Therefore, the employee retention measures that are still in general are not satisfied with the needs and expectations of employees The effectiveness of these policies in the Company is not high and has not been implemented scientifically;
PROPOSAL OF SOLUTIONS TO COMPLETE EMPLOYEE
Business development orientation of the Company until 2025
- Developing business operations in a more professional direction, better serving the needs of customers, ensuring a stable and steady growth rate
- Building a contingent of officials and employees of the Company according to the criteria of solidarity, creativity, flexibility, willingness to work, constantly setting new goals and promoting the Company's culture
- Paying attention to the training of staff and encouraging the self-training to create, improve and streamline business processes to become regular work of everyone in the Company The company also has a timely policy and completes those policies to improve the creative spirit for employees
- Completing the organization to strengthen the active and creative spirit of employees, at the same time remove all difficulties and obstacles for employees to contribute to the Company, and increase income for employees
Perpectives of HRM of the Company
Humanity are one of Impac's core values and all activities must be directed to humanity
The motive and purpose of work for each employee is different, each with their own
In addition to the desire for salary and bonuses to be paid in accordance with the value of their work as well as their own value, employees also want to be interested in, recognized, empowered, encouraged by the Company through encouraging working spirit as trained, promotion opportunities, working in a good working environment with friendly solidarity and getting along with colleagues, improving self-worth
The objective and orientation of Impac Corporation is to create a professional and modern working environment, maximizing the right to work, dedication, development, respectation and harmonizing the interests of the Company and the benefits of employees
Striving to pay income to employees on the principle of ensuring competition, fairness in accordance with the qualification, capacity, contribution level of each individual, based on the mechanism of payroll according to work performance Focusing on building remuneration from wages is really a driving force for business activities
Creating motivation to encourage employees to be strong and superior to competitors to attract good personnel, retaining the employees at the Company
The personnel policies must be based on the harmonization of interests between the Company and the employees and must incorporate the material and spiritual encouragement.
Proposal of solutions to employee retention at Impac Corporation
3.3.1 Solutions to determine the needs of employees
It is necessary to understand and evaluate employees' needs, which helps managers have a basis to devise employee retention measures Because retaining employees is about finding ways to meet their needs However, managers should only fulfill the lower level of employees' needs so that they always tend to strive to achieve their goals
Table 3.1 Survey form of employees’ needs at Impac Corporation
Please instate the reason why you choose to work at Impac Corporation by circleing the number corresponding to the importance level from 1 to 5 for you about the factors below (in which: 1 = Not important, 2 = less important, 3 = Normal, 4 Fairly important, 5 = Very important)
No Criteria Level of evaluation
6 Have opportunity to study and improve qualifications 1 2 3 4 5
8 Work is suitable to ability 1 2 3 4 5
10 Be self-reliant at work 1 2 3 4 5
(Source: synthetized by the author)
Person who are responsible for the work of understanding and assessing the needs of employees must has expertise and deep experience in this matter Therefore, in order to implement and determine the needs of employees, the Company needs to conduct an annual survey with clear criteria and analyze the importance of each criterion according to a scale to be able to analyze and assess which needs are urgent to the majority of employees
Based on Maslow's Hierarchy of Needs, the author gave 10 basic needs of employees including: High and satisfactory income; Stable work; Good working condition; Good group relationship; Good record in work; Have opportunity to study and improve qualifications; Having opportunity of promotion; The work is suitable to ability; Proper work schedule; Be self-reliant at work On the basis of surveying employees with a rating of 5 corresponding levels from 1 = Not important to 5 = Very important (see table 3.1)
The classification of many different criteria will help to accurately detect the needs of each target group On that basis, determine the frequency of each demand Which demand has the greatest frequency that is the demand employees are in need of satisfying The determination of employees' needs should be carried out annually because the needs of employees are constantly changing This job helps managers to grasp employees 'wishes and aspirations in a timely manner, thereby giving appropriate solutions to enhance employees' motivation
The summary of survey results will serve as a basis for the Board of Directors to make appropriate retention policies to meet and satisfy the needs of employees, thereby contributing to improving efficiency of work performance in the Company
3.3.2 Solutions of employee retention with material tools 3.3.2.1 Develop a diverse, specific and transparent payment method
Wages are still an important motivation for stimulating employees' positive labor
The reality only shows that when the life of employees is stable, they are wholehearted to work, improve the sense of responsibility and be effective at work
Therefore, a reasonable salary and fairness commensurate with the value of labor they have wasted will contribute to motivating them to work hard to get quality products Salary must be built on the basis of labor market and competitive but must ensure life to attract and retain employees
Through analysis in Chapter 2, it can be seen that a large number of employees feel unsatisfied with the salary policy of the Company This shows that the salary policy has not created a real motivation for employees, resulting in employees feeling unfair in their payroll and salary policies that are inconsistent with their own contributions
The company needs to build and let employees know the detailed salary in the future when they meet the specific requirements set by the Company The direct manager at the departments should explain to the employees about the payroll system, policies and decisions related to wages to avoid employees' dissatisfaction
At the same time, managers should regularly receive and promptly handle feedback from staff on issues related to wages
In order to pay fair wages, first of all, it is necessary to carry out the evaluation of work performance Based on that, the company should apply salaries associated with the quality of work efficiency of employees in order to create motivation and encourage employees to increase revenue and save time Especially for the sales department, the salary of the salesperson is calculated based on the sales of individual, in addition to the basic salary, bonus policy and general welfare of all employees in the Company, the sales staff can get the salary by sales with the rates of 20%, 22%, 25%, 30% and 40%, depending on the amount of sales that the employee achieved This will not only promote positive employees in sales activities to increase income for themselves and have good achievements in the Company, but also directly increase revenue and improve operational efficiency of the company Therefore, the Company needs to ensure fairness in the distribution of wages and need to monitor and evaluate the contribution of employees, not shield anyone Anyone who make mistakes should have the sanctions and disciplines including the Board of Directors
3.3.2.2 Diversity and publicity of bonus forms
The working time does not reflect the contribution of employees in the Company In addition, the qualifications and awareness of employees also affects the performance of the entire department Therefore, for employees to be more responsible in their work and encourage them to work with all their abilities, enthusiasm and to attract employees, especially qualified employees who long-term stick with the Company, the Company should have a form of reward both mentally and materially based on the rate of completing the work Accordingly, the job completion coefficient is determined based on the level of work completion and sales achieved If any employee goes to work regularly and on time and does not take any days off as prescribed, obeys the rules well and does not allow any errors to occur to customers, he or she should be rewarded according to salary percentage monthly and quarterly When implementing the bonus calculation method through the coefficient of work completion, the following calculation formula can be applied:
Labor bonus rate i = TR x % bonus
In which: TR is Total revenue The bonus percentage depends on the coefficient of completing the job In particular, the job completion coefficient is determined through the assessment score of performing the work of each employee with the importance of different criteria such as: Ability to be independent in work, ability of coordination in work, complexity of work, understanding of work and ability to apply knowledge, skills etc
Table 3.2 Sample of work performance assessment form
And the most appropriate assessment method for the Company is the graphic evaluation method The assessment is carried out by the employees themselves to evaluate their performance and the direct manager will give feedback on the performance of the employee on a measure scale from low to high The order is as follows:
+ Step 1 : From the evaluation criteria that have been developed, conduct the total points distribution for each criterion according to certain weights
+ Step 2 : Conduct assessment of the level of work completion of staff and score corresponding to each criterion In order to avoid subjective errors of the assessor, it is possible to develop an evaluation table including self-assessment columns of the employees themselves, the evaluation columns of the colleagues, the evaluation column of the superior of the Company, such as Table 3.2
+ Step 3 : Processing information after evaluation The result of the score assessed by the direct manager will be used to convert to the ranking and the job completion coefficent There are also scores of self-assessment by employees for reference and comparison with the evaluation results of employers On that basis to explain, exchange, feedback information between employees and direct leaders when there are differences in assessment results to have the most accurate assessment