LUẬN văn THẠC sĩ solutions to enhance performance appraisal effectiveness at joint stock commercial bank for investment and development of vietnam sogiaodich 1 branch

Definition of key terms

Performance appraisal is one of the most important human resource practices and is also one of the most heavily researched topics (Murphy and Cleveland, 1993;

Judge& Ferris, 1993) Performance appraisal can be defined as a formal meeting between a supervisor and a subordinate, in a periodical basis (often annually), in which the work performance of the subordinate is reviewed and examined in order to identify strengths, weaknesses and opportunities for improvement and skill development (Tran Xuan Cau, Mai Quoc Chanh, 2008)

Performance appraisal is a process of identifying, observing, measuring and developing human performance in organisations and has attracted the attention of both academicians and practitioners The process is also viewed as making an important contribution to effective human resource management as it is closely interlinked to organisational performance (Nguyễn Hữu Thân, 2010)

Gupta (2006) defines performance appraisal as a process of assessing the performance and progress of an employee or of a group of employees on a given job and his potential for future development He further argues that performance appraisal consists of all formal procedures used in work organizations to evaluate personalities, contributions and potentials of employees

Although the use of performance appraisal was believed to begin from early history in both Western and Eastern countries (Wren, 1994; Patten, 1977), its use in industry was marked with Robert Owen‘s use of ―silent monitors‖ in the cotton mills of Scotland (Wren, 1994) The formal use of performance appraisal originated in the US since the early 19th century mainly for evaluative purpose and with the use of global ratings, global essays or traits rating scales as tools (Devries et al

1918) Management by objectives was first proposed by Peter Drucker in 1954 in which performance appraisal focused more on feedback and developmental purpose and involved the setting of performance goals jointly by employees and manager

The goals will then be discussed and modified until they are accepted by all parties

At the end of each period, the performance of employees is evaluated based on the degree to which goals have been achieved New goals for the next period will also be set during the meeting between employees and their manager

This research adopts Trần Kim Dung (2011), definition of performance appraisal as ―a system that provides a formalized process to review the performance of employees Performance appraisal varies between organisations and covers personality, behaviour or job performance and it can be measured quantitatively or qualitatively Performance appraisal involves unstructured narrative on performance of the appraiser‖.

Purposes of performance appraisal

Researchers have suggested multiple uses of performance appraisal

Bernadin and Beatty (1984), for example, identify two broad uses of performance appraisal including 1) improvement of the effective use of resources and 2) the basis for personnel actions such as salary determination and promotions Cleveland, Murphy and Williams (1989) suggest four different purposes of performance appraisal: 1) to distinguish among employees, 2) to identify an employee‘s strengths and weaknesses, 3) to implement and evaluate human resource systems and 4) to make and record personnel decisions In general, performance appraisal is supposed to serve two main purposes: 1) evaluative purpose and 2) developmental purpose In evaluative performance appraisal, the supervisor focuses on measuring employees‘ work behaviors, identify the gap between work outcomes and established standards, and the results are used primarily for such decisions as salary adjustments, promotion, retention-termination, layoffs and so on Cleveland, Murphy and Williams, (1989) contended that evaluative functions involve between-person decisions On the contrary, in developmental performance appraisal, the supervisor aims to find the employees‘ strengths and weaknesses, provides performance feedback, opportunities for improvement and development The results are used for determination of individual training needs, assignment and transfer or within person decisions, according to Cleveland, Murphy and Williams, (1989)

Different purposes of performance appraisals have been found to have impacts on the performance appraisal processes and outcomes (Bernardin and Beatty, 1984; Ostroff, 1993; Williams, Denisi, Blencoe and Cafferty, 1985;

Zedeck& Cascio, 1982) For example, performance appraisal conducted for developmental purposes are less prone to ratings bias than those conducted for administrative purpose (Meyer, Kay, and French, 1965; Zedeck & Cascio, 1982)

The purpose of performance appraisal also affects the attitude of the employees towards appraisal process and supervisors Employees‘ perception of performance appraisal uses would have a dominant influence on their attitudes

Perception of evaluative use of PA can have positive impact on employees‘ attitude if it clarifies the link between performance and rewards (Cleveland, Murphy, and William, 1989) Prince and Lawler, (1986) found that the integration of salary discussion into performance appraisal interviews even enhance satisfaction with

PA Other researches, however, showed that perception of evaluative use of PA is negatively related to satisfaction with PA and supervisor (Mayer, Kay, and French,

1965) Drenth (1984) proposed that evaluative PA often elicits negative feelings and behaviors such as resistance, discouragement, and aggression, especially when evaluation is negative

On the other hand, developmental PA is view as positive because of its futuristic and helpful focus (Milkovich and Boudreau, 1997) Boswell and Boudreau (2000) studied the relationship between perception of PA use and satisfaction with performance appraisals and appraisers They found significant positive relationship between perception of developmental PA and satisfaction with both appraisals and appraisers However, no significant relationship between perception of evaluative PA and satisfaction has been found Youngcourt, Leiva, and Jones (2007) expanded Boswell and Boudreau study by proposing another purpose of performance appraisal in addition to evaluative and developmental purpose which they termed role definition purpose This purpose of performance appraisal focuses on the position rather than the incumbent They found a positive relationship between perception of developmental PA and affective commitment

They also found that perception of evaluative PA was significantly related to job satisfaction and the relationship was mediated by satisfaction with performance appraisals The relationships between perception of developmental PA or of role definition PA and job satisfaction, however, are not significant

Kuvaas (2007) studied the relationship between perception of developmental PA and job performance He found the connections between perception of developmental goal setting and feedback in PA and work performance and that this relationship was mediated by intrinsic motivation but not by affective commitment Finally he found that there would be a positive relationship between perception of developmental PA and job performance only among employees with low autonomy orientation

Researchers contend that although performance appraisal is conducted for multiple purposes, these purposes are often conflict (Cleveland, Murphy, and Williams, 1989; Ostroff, 1993; Meyer et al., 1965) They believe that this conflict prevents performance appraisal from attaining its goals, and may have negative impacts on individuals and the organizations Other researchers found that employees prefer performance appraisal is used for a certain purpose rather than for others (Jordan and Nasis, 1992; Harvey, 1995) McNerney (1995) advocated that employees cannot get accurate feedback about their strengths, weaknesses and development needs if two PA purposes are combined As a result, researchers and managers have proposed separate uses of performance appraisal

Boswell and Boudreau (2002) conduct a study about the impacts of separating evaluative and developmental uses of performance appraisal on employees PA satisfaction and satisfaction with supervisors They hypothesized that employees in separated use PA systems have higher level of PA satisfaction and satisfaction with supervisors than those in the traditional unseparated PA systems that combine the two uses They also predicted that employees in separated system traditional systems The results, however, suggested no significant difference in PA satisfaction and satisfaction with supervisors between two groups Employees under separated PA systems did not report higher awareness of development opportunities either However, they found some significant difference in the intention to use development opportunities between the two groups The employees under new systems reported they intend to use less development than those under the traditional system Boswell and Boudreau (2002) suggested that the separated PA use may have weakened the instrumentality of using developmental PA to gain valued outcomes for employees under the separated systems because there are no longer the links between development and salary raise or promotion

In summary, previous studies suggested that perception of different PA uses influences employees‘ satisfaction with both appraisal and appraisers Generally, perception of developmental PA will lead to higher satisfaction while evaluative PA may have negative impacts However, some rresearches found that evaluative PA can also have positive impacts on employees‘ satisfaction with PA if used appropriately.

Benefit of performance appraisal

Appraisal is the analysis of the successes and failures of an employee and the assessment of their suitability for training and promotion in the future (Maund,

2001) According to Maund (2001), appraisal is a key component of performance management of employees When effective, the appraisal process reinforces the individual‘s sense of personal worth and assists in developing his/her aspirations Its central tenet is the development of the employee Performance appraisal was introduced in the early 1970s in an attempt to put formal and systematic framework on what was formally a casual issue (Maund, 2001) Accurate appraisals are crucial for the evaluation of recruitment, selection, and training procedures Appraisal can determine training needs and occasionally counseling needs It can also increase employee motivation through the feedback process and may provide an evaluation of working conditions and it can improve employee productivity, by encouraging the strong areas and modifying the weak ones Further, employee evaluation can improve managerial effectiveness by making supervisors more interested in and observant of individual employees (Auerbach, 1996) Objectives for performance appraisal policy can thus, best be understood in terms of potential benefits

Mohrman et al (1989) identified the following:

• increase motivation to perform effectively

• gain new insight into staff and supervisors

• better clarify and define job functions and responsibilities develop valuable communication among appraisal participants

• encourage increased self-understanding among staff as well as insight into the kind of development activities that are of value

• distribute rewards on a fair and credible basis

• clarify organizational goals so they can be more readily accepted

• improve institutional/departmental manpower planning, test validation, and development of training programs

Appraisal focuses on what has been achieved and what needs to be done to improve it It should be used to help clarify what an organization can do to meet the training and development needs of its employees According to Maund (2001), appraisal is to facilitate effective communication between managers, employees and should provide a clear understanding for both of them based on four main components; the work that must be done, the criteria by which achievement will be judged, the objectives of the exercise, the process for giving the appraise feedback on achievement

Bandura (1977) stated that ‗‗self appraisal of performance set the occasion for self-produced consequences‘‘ Favourable judgments give rise to rewarding self - reactions, whereas unfavourable appraisals activate punishing self-responses‘

Appraisal has the following as advantages:

• The appraiser and the appraisee are forced to meet formally

• The employee becomes aware of what is expected of him/her

• The employee learns or reaffirms his or her exact status

• Valuable feedback can be received by both employee and employer

• The manager can learn what the employee is actually doing rather than what he/she thinks he/she is doing.

Method of performance appraisal

1.4.1 Behavior Anchored Rating Scales (BARS)

According to Swan (1991) BARS is one of the most systematic and elaborative rating techniques The system is usually costly as it involves in depth analysis of each job to which the system will be applied The BARS scale used for a certain job is reached through a five step process as follows: Critical incidents, which refers to experts in the job listing specific examples of effective and ineffective behaviours; performance dimensions developed from the incidents arrived at in the critical incidents phase; Retranslation that occurs when a second group of knowledgeable individuals on the specific job validate and refine the performance dimensions; Scaling incidents which relates to the rating of the dimensions by the second group of individuals and the final instrument is the behavioural anchor in the BARS instrument

The BARS instrument consists of a series of vertical scales that are anchored by the included incidents Each incident is placed on the scales based on the rating determined in step four (Swan, 1991) The system is accurate in that it creates measures that are closely job-relevant and is highly legally defensible

The appraisal system contains a list of personality traits or qualities such as motivation, innovativeness and adaptability The judge or manager performing the appraisal assigns a value or number to each trait, indicating the degree to which the employee owns the quality (Ibid.)A variation of this system requires the manager to evaluate the employee on each of several trait labels, with short definitions and along the line containing a variety of adjectives In most cases the trait-rating scales are informally analysed to ascertain which personality traits should be included in the system

The trait-rating scales may be broadly defined and the criteria such as meet requirements or exceed requirements are also not clearly defined This makes the trait scales very difficult to legally defend because it is difficult to prove the job relevance Without specific job related criteria, the system is vulnerable to rater error such as halo effect, positive or negative leniency and central tendency The scales also make it difficult for a manager to identify training and development needs The manager essentially asks the employee what they are and not what they do (Swan, 1991)

Erasmus et al (2003) argue that this system concentrates on setting and aligning individual and organizational goals but it can also be used for evaluating performance Participation in the setting of objectives allows managers to control and monitor the performance by measuring outcomes against the goals that the employees helped to set Bagraim et al (2003) state that the MBO system should keep employees focused on the deliverables of their job and in this way, the organisation would have delivered on a strategic promise

The manager is required to write a report on each employee (Erasmus et al

2003) describing the person‘s strengths and weaknesses The format is not fixed and the results depend on the writing skills of the manager and relative rating techniques where managers compare an employee‘s performance to that of another person doing the same work

The system rank individuals from the best to the poorest performer according to performance factors The technique can only be used with a limited number of employees in the exercise There is no comparison between teams and the feedback is not aimed at the employees (Erasmus et al, 2003)

The system allows the manager to compare each employee separately with each other employee (Ibid) The ranking of the employee is determined by the number of times he/she was rated better than other workers The limitations to the

Erasmus et al (2003) states that when using this system, the manager should assign some portion of the employees to each number of specified categories on each performance factor The forced distribution decided upon can specify any percentage per category and need not necessarily comply with the requirements of a normal

Multi-source performance appraisal

The traditional PA advocates the use of supervisor performance appraisal, under which work performance of the employee is evaluated primarily or solely by his or her direct supervisor This style of PA emphasizes the vertical one way top- down flow of information within the organizations Nowadays, however, changes in environment have lead to the changes in organizational structure such as decentralization, fewer level organizational hierarchy and matrix organizations The new organizational structure requires the expansion of information flows to increase the speed and amount of performance appraisal feedback Horizontal, bottom up flows of information have been established in parallel with top-down flow As a result, multi-source performance appraisals become more and more common in new performance appraisal systems

Self appraisal is the process in which work performance of an employee is evaluated by the employee himself The use of self appraisal is advocated by the belief that the employees are the best people to observe their own work behaviors and to give most accurate performance ratings Many researchers have pointed out the potential benefits of self-appraisal Farh et al (1991) argued that self-ratings can contribute to the overall effectiveness of the performance appraisal system and have positive impacts on employees‘ satisfaction and the perception of justice and fairness Gomez-Meija (2001) suggested that self-appraisal allows subordinates to participate into the system and thus help them identify the real causes of their performance problems Jackson and Schuler (2003) believed that when subordinates participate in the performance appraisal process they become more involved and committed to the goals Furthermore, the involvement of the subordinates in the appraisal process helps reduce goal ambiguity and conflicts Other benefits of self appraisal include increased communication between rates and ratees regarding a number of performance related aspects, increased ratees participation, satisfaction and acceptance of appraisal results (Caroll & Schneider, 1982; Fletcher, 1986;

Latham and Wexley, 1981) Self appraisal was judged as fairer, more accurate, and even more effective than supervisor appraisal in Farh et al (1988) study

On the other hand, several researchers suggested limited use of self-appraisal as a performance appraisal tool They pointed out that the self-raters have self- enhancement desire and that most of them do not evaluate themselves objectively and reliably enough (Denisi & Shaw, 1977; Anderson et al 1984) Previous studies have suggested mixed results about the usefulness of self appraisal Thorton (1980), in his review of self appraisal, found evidence of leniency in self appraisal in most of the studies reviewed The employees tended to give themselves higher ratings in comparison with both supervisor and peers appraisals Other characteristics of self- rating as suggested by Thorton‘s review (1980) of 22 studies in the field of self appraisal include: less variation among self appraisals, less discriminant validity and fewer halos He also concluded that self appraisal have lower reliability than supervisor and peers ratings

Peers appraisal is the process in which evaluation ideas from the employees‘ peer workers are used to rate the employee‘s performance Among several rater sources, peers appraisal is consider the best source of performance evaluation (Murphy and Cleveland, 1995) Korman (1968) concluded that peer ratings are among the best predictors of job performance Peer appraisals have been found as valid ratings in many types of jobs including industrial managers, sales representatives and police officers (Roadman, 1964; Waters & Waters, 1970; Landy et al 1976) Previous studies also suggested that peer appraisals have consistent reliability (Dejung & Kaplan, 1962; Fiske & Cox, 1960) They reported test-retest reliability was believed to be the effect of the daily interaction among peers and the combination of multi-raters (Latham et al, 1979; Miner, 1968)

On the other hand, peers appraisals also have some shortcomings One of these, as suggested by Farr (1983) was that as peers work together, they often develop personal relationships and friendships with one another When they are required to evaluate their peers‘ performance they tend to be more lenient, that is, they would give other peers higher ratings Murphy and Cleveland (1995) suggested that peer rates will rate everyone in a similar way in order to maintain harmony and consolidation within their groups

Subordinate appraisal is the scheme in which subordinates evaluate the work performance of their supervisors Subordinate appraisal is almost completely different with the traditional top-down performance appraisal practice The reasons for use of subordinates was based on the fact that subordinates are often in closer contact with their supervisors than the supervisors‘ bosses or peers, therefore they can observe their supervisors‘ behaviors and give accurate ratings (Bernadin, 1986)

He also suggested that subordinates are directly affected by their supervisors‘ behaviors and thus can give valuable first-hand feedback about management styles

Others advocate that subordinate ratings, like peer ratings, can remove potential biases inherent with single rates appraisal (Redman & Snape, 1992)

In practices, studies have suggested that up-ward or subordinate appraisals can positively contribute to supervisor‘s behavior change Reily, Smither, &

Vasilopoulos (1996) and Walker & Smither (1999) found evidences that the continuous application of subordinates appraisal can result in sustained positive behavior changes for the period from 2.5 and 5 years Subordinate appraisal can also result in improvement in management skills Atwater et al (1995) concluded from their study that subordinate appraisal can improve management skills of managers who were rated poor to moderate by subordinates six month after appraisal, provided that the supervisors‘ self-ratings were not also low

However, there are also a number of drawbacks that are associated with the use of subordinate ratings Bernadin, Dahmus & Redmon (1993), for example, pointed out several potential pitfalls and drawbacks of using subordinate appraisal

First, in order to gain favorable ratings, managers may try to please subordinate and, as a result, the authority of supervisors could be reduced and the status of supervisors are also undermined Second, subordinates are qualified to evaluate only some limited aspects of supervisor‘s job When the other aspects of job are included, ratings by subordinate may be inaccurate Furthermore, under such circumstances, managers do not feel that subordinates are able to evaluate which leads to the failure of the scheme

As discussed above, each of the appraisal sources has its strengths and weaknesses, careful consideration of these strengths and weaknesses will be needed in order to yeild the best results Besides, one of the issue that attracts most of the concern regarding multi-source appraisal is the agreement among these sources.

Bias in performance appraisal

Despite the vital role of performance appraisal in the functioning of organizations and development of individual, performance appraisal systems are not without shortcomings (Cascio, 1987) Lee (1989) pointed out a number of reasons for which performance appraisal systems failed to achieve their desired effectiveness These reasons include poor design, lack of communication, ambiguity, lack of supports, inappropriateness One of the most important reasons, however, was biases in performance appraisal

Biases in performance appraisal can be defined as the difference between actual performance level and performance ratings given by raters Bias is minimized when performance ratings perfectly reflect actual performance level However, there are many factors that may introduce biases into performance appraisal

Sources of biases in performance appraisal can be the raters, ratees or the interaction between them (McKinney and Collins, 1991)

As suggested by Lazer (1980), rater biases result from the subjective nature of evaluation and ratings based on raters‘ observation and judgment When objective measures are available, rater biases may decline but it is difficult to establish such objective measures or out-put criteria for all types of jobs especially those of high levels in the organizations The most common biases in performance appraisal are the halo effect and horn effect, leniency error, error of strictness, central tendency error, recency effect, contrast error and similarity error This section will review several factors that are related to rater biases in performance appraisal including raters and ratees characteristics such as gender, age and sex, prior expectation and knowledge of performance, rater-ratee acquaintance and grievance activities

1.6.1 Rater and ratees personal characteristics 1.6.1.1 Gender bias in performance appraisal

Researches on the impacts of raters‘ gender on performance appraisal have suggested mixed results Studies by Pulakos and Wexley (1983), Landy and Farr

(1980), for example, showed no difference between male and female supervisor appraisal ratings Similarly, Shore and Thorton (1986) also suggested no significant impacts of rater‘s gender on both self and supervisor‘s ratings In contrast, McKinney and Collins (1991) found that female raters gave higher ratings than male raters at the significant of 0.01 from their data Benedict and Levine (1988) used student subjects and a laboratory setting to show that females were more lenient with poor performers However, study by Furnham and Stringfield (2001) indicated that female raters were stricter in their ratings of male subordinates No such difference was found among male raters

Performance appraisal biases regarding ratees‘ gender attracted many more studies Findings from these studies, however, are inconclusive with the emergence of three different stances (Millmore, Biggs and Morse, 2007)

A number of studies using both student and employee subjects showed evidence of favoring males in performance ratings Rosen et al (1975), for example, found that male candidates were rated more favorably than female along some specific performance dimensions such as acceptability, service potential and longevity Gutek and Stevens (1979) found that pro-male bias exists in some types of jobs Dipboye et al (1975) study suggested that males are rated higher than females even though their qualities are all the same They found that 72 percent of the top ranking candidates for a hypothetical managerial position were male although the characteristics of male and female applicants were identical Nieve and Gutek (1980) cited attribution theory as an explanation for the favor of males in performance ratings They proposed that when women perform well, their performance is attributed to other factors rather than ability Deaux and Emswiller

(1974) found that when women perform as well as men on male related tasks, their performance was attributed to external factors such as luck while the same performance of males was attributed to skills which are an internal factor Other studies also suggested that good performance of women tends to be attributed as temporary while that of men are attributed as permanent (Feldman - Summer & Kiesler, 1974; Taynor &

Other studies found no difference in the evaluation of both males and females Frank and Drucker (1977) found no difference in performance ratings of men and women on sensitivity, organization, planning and written communication

Shore and Thorton (1986) studied 35 male and 35 female assemblers and their 35 supervisors consisting of 16 men and 19 women Their data suggested no gender difference for both self and supervisor rating Similarly Hall and Hall (1976) found no sex difference in ratings of overall task performance Thompson and Thompson

(1985) reported no sex difference in field setting where job analysis was used to develop a tasked based performance appraisal instrument Tsui and Gutek (1984) indicated no difference in the attitude of supervisors towards male and female subordinates Griffeth and Bedeian (1989) provide a possible explanation for this phenomenon They proposed that overtime, many occupations have become gender neutral rather than being viewed as male or female oriented and thus gender bias no longer existed

Yet, there is another line of studies which indicates that females are rated more favorable than males Jacobson and Effertz (1974) found that followers tended to rate the performance of male leaders worse than that of female leader even the actual performance was the same Results of Furnham and Stringfield (2001) study showed that male ratees received lower ratings compared to female ratees

Millmore, Biggs and Morse (2007) studied 66 managers (33 males and 33 females) who represent 92 percent of 72 managers in the UK headquarter of a large financial services organization They used a combination score of self, supervisor, peers and subordinates ratings and found that females have significantly higher score than males McKinney and Collins (1991) studied the influence of age, race and sex on performance appraisal bias in public parks and recreation Their results indicated that female ratees received significantly higher ratings than did male ratees They also proposed that the results may suggest that female were inherently better at performing the duties and responsibility of the position under investigation or, in other way, represent a leniency effect Using student sample, Dobbins, Cardy and Truxillo (1988), found that female professors are rated higher by students Neiva and Gutek (1980) concluded that gender bias in performance appraisal exists but its effects are not consistent across all situations They suggested several factors that affect the performance evaluation of men and women

First, they proposed that the higher the required level of inference the more likely evaluation bias exists Appraisal based on past performance is subject to less bias because it requires minimum level of inference On the other hand, when appraisal is based on judgment about the individual‘s ability, about causes and value of performance which require high level of inference, bias are more likely to occur

They also argued that when performance criteria are clear or when specific and concrete information are available, the required level of inference is low and thus less bias occurs

Second, they proposed the effect of sex role congruence, in which behaviors that violate the societal sex role expectation tend to be negatively rated They cited a number of studies which suggested that both males and females suffered when applying for sex-typical jobs Furthermore they also found that when females behave in a manner that is not compatible with sex-role expectation they become disliked and are excluded from the group or their performance is underestimated or attributed to unstable and external factors rather than ability

Finally, they suggested that level of qualification or performance may affect gender bias The level of qualification or performance is higher for males than for females, especially in demanding or challenging tasks or occupations Thus, males are evaluated more highly when they succeed than when they fail On the contrary, females are rated more favorably when they fail rather when they succeed

Moreover, unsuccessful females are less seriously penalized than unsuccessful males but successful women are not rewarded as heavily as successful men

1.6.1.2 Race biases on performance appraisal

One of the most pronounced areas of concern regarding bias in performance appraisal has been race biases (McKinney and Collins, 1991) However, the results are inconsistent Mobey (1982) studied 1035 employees of both managerial and non-managerial jobs to explore the impact of race on performance ratings Data of previous year performance appraisal were collected together with sex and race of both supervisors and employees The results showed that in general, race of the raters did not have any significant impact on their ratings of subordinates

On the other hand, difference has been found regarding race of the ratees

Uses of Performance Appraisal

1.7.1 Linking performance appraisal with pay

As researchers have suggested, the two main purposes of performance appraisal are evaluative and developmental purposes (Boswell and Boudreau, 2000;

Nguyen Van Điem & Nguyen Ngoc Quan, 2012) Linking performance appraisal with pay is one of the main practices of evaluative performance appraisal Pay-for- performance or performance-related-pay refers to the practice under which an employee‘s pay is directly related to his or her performance as opposed to the traditional seniority based pay or time-based compensation scheme This section reviews the literature regarding pay-for-performance

The theoretical base for the potential benefits of pay-for-performance can be derived from equity theory or expectancy theory Equity theory (Adams, 1962) proposed that people want to be treated fairly In the workplace, employees tend to use social comparison to compare the input-output ratio of self versus that of a referent The perception of equity does not require that the outputs are the same but the output-input ratios should be equal Employees who perceive themselves as being in an inequitable situation will seek to reduce the inequity either by distorting inputs and/or outcomes in their own minds (―cognitive distortion‖), by directly altering inputs and/or outputs, or by leaving the organization (Carrell and Dittrich,

1978) Pay for performance is expected to contribute to the feeling of equity as pay (outcomes) is made contingent upon performance (input) as compared to seniority- based or time-based pay scheme

Expectancy theory (Vroom, 1964) claimed that employees will be motivated if they perceive that putting more efforts would lead to better performance, better performance would lead to rewards such as pay increase or promotion and that rewards are of importance to the employees Vroom (1964) proposed three variables within the expectancy theory including the effort-to-performance expectancy, the proposed that for motivation to occur the two expectancy values must be well above zero and also the rewards must be attractive enough Pay for performance can be a motivation factor as it enhances the performance-to-reward expectancy by making pay associated with performance

There are several forms of pay for performance or performance related pay

Kessler (1994) for example, identified 3 forms of pay for performance The first is individual merit and pay-for-performance systems based on performance appraisal which replace the basic time based salary Merit pay and piece rate are examples of the first form of pay for performance Piece-rate is considered the most precious way to link pay with performance as an employee‘s wage is completely dependent on output while merit pay is based on supervisor‘s evaluation of an employee‘s output and thus is subject to errors (Brown, 1990)

The second is individual bonus which is based on the achievement of targets

Targets can be a single factor or on a combination of several factors These factors can include: productivity and output, quality, financial performance, cost management, sales and so on

The third are group-based bonus and such scheme as profit sharing and gain sharing Under group-based bonus schemes, performance targets will be measured at the level of specific group and bonus will be determined by group performance

Group-based bonus, thus, can help improve communications and foster team working spirits Profit sharing is an incentive plan under which part of the company‘s profit will be paid to the employees Gain sharing is a program that returns cost savings to the employees It is a productivity measure while profit sharing is a profitability measures Bonus is a form of variable pay which can help link pay to performance without permanently increasing the pay bill

1.7.2 Linking performance appraisal with career development

While pay-for-performance has been used by many organizations, the link between performance appraisal and career development and/or promotion is not widely researched In fact, one of the practices to link performance appraisal with career advancement or promotion is the use of merit-based promotion system This section will reviews the characteristics of performance-based promotion system, its strengths and weaknesses and the conditions under which it should be used Also, comparison with the traditional seniority based promotion system will be made

1.7.2.1 Seniority-based and performance-based promotion system

Promotion is the move upward on the organizational hierarchy Promotions assign workers to jobs suiting to their abilities and move up talented workers quickly (Gibbons 1997) Other purposes of promotions are to reward past employee efforts, to promote investments in specific human capital, and to lower job turnover ((Lazear 1998) There are several ways in which organizations make promotion decisions Overall, promotions can be made based on seniority, on performance or the combination of the two

Seniority refers to the length of service In a seniority-based system, the major factor in allocating jobs is the length of service The employees could enter the organizations at the lowest level and advance to higher levels as they continue to work and when there are vacant positions

On the other hand, under performance based systems (or merit based system), promotions decisions are made based on the candidates‘ past and current performance as well as the capability to fulfill the job if promoted Under such systems, employees with the best quality and performance will be selected for higher positions rather than those with the longest service Performance appraisal plays a crucial role in the performance based promotion system

1.7.2.2 Advantages and disadvantages of performance-based promotion system

Performance-based promotion systems select employees for promotion based on their quality and performance The advantages of such system include:

2 Employees with suitable knowledge and skills can be matched with the jobs and thus high performance can be expected

3 Highly motivated and ambitious employees can be rewarded for outstanding performance The system can be a source of motivation as the connection between performance and rewards is clear

Several studies have confirmed the advantages of a performance-based system over the traditional seniority based system Phelan and Zhiang (2001) studied the impacts of promotion systems on organizational performance Their model included several types of promotion systems including absolute merit-based system with judgment, relative merit based system with judgment, seniority-based system, and random promotion system Their results suggested that, on average, the absolute merit- based system under which the candidates must perform some arbitrary cutoff level, exhibit the highest performance On the other hand, the relative merit based system in which candidates are ranked according to performance and the highest ranked candidates are promoted regardless of their absolute performance level have the worst performance They also found that other contingency factors also have significant impacts on the relationship between promotion system and organizational performance

Sandleben (2005) suggested the uses of promotion rating, that is, rating of how well the officers will likely perform at the next level together with appraisal of past and current performance as one alternative promotion system She found that this evaluation process was reliable and valid, providing sufficient variance for administrative decisions The process and results were also accepted by the participants Moreover, subsequent promotions generally reflected the results

The impacts of using performance-based promotion system on employee‘s attitudes have also been examined Baugher, Varanelli and Weisbord (2008) studied employee‘s perceptions of a new performance-based promotion system that uses prior experience and current job performance as predictors of future success in place of the old content-based exam system The participants were 57 employees who were familiar with both performance-based promotion system and content- based exams, at two positions: professional and upper-level management

Employee‘s perception of the two systems was measured using a set of 11 bipolar adjectives with six point scale and no middle point They hypothesized and found that both professional and upper level management positions‘ reaction to performance-based promotion system was more positive than reaction to a content- based oral exam Specifically, the performance based system was perceived as more successful, more innovative, more effective, fairer and more comprehensive

Factors determining PA effectiveness

Performance evaluations are periodic reviews of employee performance

While most organizations have some type of employee appraisal system, not all of them have clear goals that help optimize the benefits of evaluations Without clear objectives, appraisals may become a process of going through the motions, which causes employees to view them as necessary evils A good performance appraisal should be built around unambiguous objectives These objectives should cover all levels and areas of the organization and reflect the needs of each The appraisal system should be clear in its purpose The purposes may include:

A major objective of evaluations is to motivate employees to a higher level of performance By addressing areas for improvement and encouraging the employee to work on them, you can motivate him to deliver better results When you point out areas of strong performance, you reinforce the positive feelings the employee has about doing go work On the whole, your goal is to leave the employee feeling good about where he stands, but motivated to grow and deliver even more

Goal setting is closely related to the motivational motives of evaluation

When you meet to review an employee's work, your evaluation should be directly related to goals you set with her for her job If a sales employee has a monthly goal of $50,000 in sales, you can compare her actual performance to the goal When an employee struggles to meet her work goals, you can discuss additional coaching and training needs to get her there If she has consistently or easily met her objectives, your evaluation is a chance to raise the bar with higher goals

One subtle objective of evaluations is to show employees that they are valued Taking the time to share your feedback helps the employee get a better sense of how he fits into the company and why his job matters While this type of attention doesn't cover up for months of ignoring employees, it does reinforce other efforts you make to strengthen employee morale

The strongest evaluations are connected to a broader system of employee development This involves collaboration between managers and employees to set goals for skill development and job promotion Each evaluation offers a chance to review skill levels for an employee related to her current job and prospective job

You can discuss training and methods for the employee to enhance current skills and acquire new ones that prepare her for the next step in her career This helps with employee retention and strengthens the company over time through more loyal and knowledgeable workers

Employee evaluations represent a fundamental tool used by businesses to conduct periodic appraisals of employee performance An effective employee evaluation forms the supporting evidence for promotions and pay increases These assessments also alert managers when an employee needs further training or support in his position Those evaluating employees must ensure that all the necessary criteria is included in the appraisal so they can accurately guide the employee toward future success

Criteria, such as an employee‘s organizational and interpersonal skills, evaluate how the employee interacts with others and how well he prioritizes tasks and responsibilities and manages time Traits that managers evaluate include commitment to customer satisfaction, ability to work as a team player, communication skills, continuing improvement and growth, and time management skills To gain insight on these areas, managers may include experiences of customers and those in other departments when working with the employee

Criteria involve performance assessment of the core elements of an employee‘s job—the key duties listed on a job description Objective assessment of whether the employee consistently completes duties is often easier than other evaluation areas

For example, if one of an employee‘s duties involves developing monthly marketing plans, the manager can quite easily determine whether the employee has followed through on a monthly basis as expected For this portion of the evaluation, managers should create a checklist of known and expected duties of the employee

If the appraisal shows that the employee periodically fails to meet these responsibilities, the manager must give the employee an opportunity to explain

Employees must set clear and challenging, but achievable, goals for each assessment period in collaboration with his immediate supervisor This portion of an employee evaluation assesses how and if the employee met those goals

Managers can use information gathered from this portion of the assessment to determine whether to set more challenging goals or keep them the same Some employees regularly take on major projects outside of their job descriptions

Mangers may include these projects in this portion of the assessment along with recognition for employees going over and above necessary duties

In this area of the job description, managers can include achievements and accomplishments of the employee For example, if the employee failed to reach some goals or meet some responsibilities on occasion, but was attending college at night Noting his graduation and achievement in education may attenuate negative marks in other job areas Mangers may note career-related training, such as certifications and licensures, the employee obtained during the evaluation period as these may warrant a pay increase

1.8.3 Period of PA Quartely review

The great thing about quarterly reviews is that they fit the natural rhythm of business, and are therefore fairly easy to sync up with the company's overarching business objectives Rather than asking the employee to keep a scorecard of everything they did over the course of a year, you give them feedback they can act on Quarterly reviews can also make the final Q4 review easier because managers can simply pull together the previous three reviews to get the annual big picture

On the downside, some companies only offer quarterly reviews to newer employees who need extra help getting acclimated to their roles Though this is a great way to reduce the time and paperwork burden of the performance review process, it doesn't do much for veteran staff who may be craving feedback

Quarterly reviews work best when they're quick, easy, and used across the organization to help course-correct on the path to achieving annual milestones

The analysis framework for the thesis

ASSESSING THE SITUATION OF PERFORMANCE

Introduction of the Commercial Joint Stock Bank for Investment and

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is one of the first banks established in Vietnam The history and development of the Bank can be summarized as follows:

- For the period from 1957 to 1981: Bank for Construction of Vietnam

Founded on 26 April 1957, when the country was active in the period of economic recovery, under the name of Bank for Construction of Vietnam, the Bank for Construction of Vietnam made important contributions to the management and allocation of capital for construction Right from the first year, the bank provided capital for hundreds of works, contributing to balance accounts, facilitating market management and price stability

The Bank allocated capital for building industrial facilities and construction projects to serve national welfare and people‘s livelihoods, contributing to changing the face of North Vietnam The Bank and the Vietnamese people worked together to complete the tasks of construction in wartime, supplied capital for air defense projects, traffic projects and relocation of important industrial factories

In the period 1975 – 1981, the Bank joined to renovate economic facilities in the South and develop new infrastructure after the war The bank provided capital for industrial, agricultural, transportation, public welfare projects, and key projects critical for the national economy

- For the period from 1981 to 1990: Bank for Investment and Construction of Vietnam

In 1981, renamed Bank for Investment and Construction of Vietnam In the period 1981 - 1990, the Bank gradually overcame difficulties and improved operational mechanism for continued development This was also the period when the bank made strong movements in line with the national renovation in general and the banking sector in particular, progressively becoming one of the leading specialized banks in the country

- For the period from 1990 to 2012: Bank for Investment and Development of Vietnam

In 1990, It renamed Bank for Investment and Development of Vietnam (BIDV)

Thanks to uniform solutions, in the period 1990 – 2000, BIDV made positive developments, specifically: It was proactive and pioneering to employ ways to mobilize capital denominated in VND and foreign currencies In addition to raising capital domestically, BIDV also mobilized capital from foreign countries through various forms of loans such as commercial loans, syndicated loans, loans under trade agreements, long-term syndicated loans, export finance, co-financing and guarantee, etc., creating huge capital volume for national investment and development

The Bank made strong IT developments during the period 1990 – 2000

Many new products and servives have been developed and received positive feedbacks, such as Home Banking, ATM,

BIDV has sustained high, safe and effective growth In the period 2006 -

2010, total assets increased more than 25% per year on average, capital mobilization up 24% per year, outstanding loans up 25% per year and pretax profit up 45% per year

BIDV has actively been transparent for its business, pioneering to apply international standards Since 1996, BIDV has been audited by independent international auditors In 2006, BIDV was the first bank to have Moody's investor‘s services implement credit rating Also in 2006, with the support from Ernst &

Young, BIDV was the commercial bank to pioneer in implementing the internal

BIDV continuously expanded its network to serve business activities As of

25 November 2015, the bank had 180 branches, 780 transaction offices and thousands of ATMs and POS in all 63 provinces and cities across the country

BIDV always pays attention to people development BIDV continued to recruit young human resources with knowledge and skills to meet the integration requirements

- For the period from 2012 to Present: Joint Stock Commercial Bank for Investment and Development of Vietnam

BIDV was equitized according to the direction of the Government, ensuring the harmony in the interests of the State, enterprises, investors and employees

On 27 April 2012, BIDV officially transformed into the Joint Stock Commercial Bank for Investment and Development of Vietnam and has been listed on the stock exchange since January 2014

On 25 May 2015, BIDV officially merged with Mekong Housing Bank (MHB), marking a milestone in the network expansion

As the pioneer in foreign operations, by the end of 2014, BIDV established correspondent relationship with over 1,700 banks and bank branches in 122 countries and territories around the world In addition, the bank was entrusted by multilateral and bilateral donors (WB, ADB, OPEC, AFD, Germany, France, Japan) for over 150 ODA projects with total committed fund of over USD4 billion

As of 31 December 2017, BIDV had total assets of more than VND1.176 trillion (~USD51.9 billion), making it the country‘s largest commercial bank in Vietnam BIDV has a wealth of experience in Vietnam, providing a full range of modern and convenient banking products and services including deposits, loans, trade finance, payment and account services, and card services and among others officers, employees and financial consultants who are well-qualified and well- trained with full experience and have been accumulated and transferred for over half of a century, BIDV commits always brings its customers the benefits and reliability

According to BIDV annual report 2017, BIDV has expanded its wide network across Vietnam as of 31 December 2017, BIDV‘s network consisted of:

+ 01 Head Office + 190 branches in Vietnam and 01 branch in Myanmar + 854 transaction offices

+ 02 subsidiary units (IT Center, BIDV Training School) + 03 representative offices in Vietnam (Ho Chi Minh city, Da Nang and Can Tho) + 06 representative offices in foreign countries (Cambodia, Myanmar, Laos, Czech Republic, Taiwan (China), Russian Federation)

+ 11 subsidiaries (BIDV Asset Management Company (BAMC), BIDV Securities Company (BSC), BIDV Insurance Corporation (BIC), BIDV International Company Limited (BIDVI), Mekong Housing Bank Securities Company (MHBS), International Investment and Development Company (IIDC), Cambodia Investment and Development Company (IDCC), Bank for Investment and Development of Cambodia Plc (BIDC), Lao – Viet Insurance Joint Venture Company (LVI), Lao-Viet Joint Venture Bank (LVB), BIDV-SuMi TRUST Leasing Co., Ltd (BSL)

Wide operating network helps BIDV to access a large customer base nationwide; to provide various services for diverse customer segments from individuals, households to different types of enterprises and organizations

With 24,000 officers, employees and financial consultants who are well- qualified and well-trained with full experience and have been accumulated and transferred for over half of a century, BIDV always brings its customers the benefits and reliability

Corporates: BIDV has established relations with nearly 200,000 corporate customers including groups, corporations, and small and medium-sized enterprises

Financial institutions: BIDV has established correspondent relationships with nearly 1,700 financial institutions both local and international The bank is the trusted choice of major international organizations including the World Bank, ADB, JBIC and NIB

Individuals: 7.7 million individual customers currently use products and services of BIDV

- Diagram of BIDV’s Organizational Structure

Vietnam-Russia Joint Venture Bank

BIDV Tower Joint Venture Company

BIDV MetLife Life Insurance Limited

Vietnam Aircraft Leasing Joint Stock

BIDV-SuMi TRUST Leasing Company Ltd

Other subsidiaries in Lao, Cambodia

BIDV Asset Management Company Ltd

Joint Stock Commercial Bank for Investment and Development of Vietnam

+ Credit activities (lending, discount, guarantee, credit card issuance, etc) + Fund mobilization (savings, bond, debenture)

+ Trade finance services + Payment services (domestic and international payment) + Account services

GENERAL MEETING OF SHAREHOLDERS Supervisory Board

Credit Committee Board of Management and Chief Accountant

+ Bank card services + Other services under the Certificate of Business Registration, etc

Introduction about Sogiaodich 1 Branch

Full name: Commercial joint stock Bank for Investment and Development of Vietnam, Sogiaodich 1 Branch

Abbreviated name: BIDV SGD1 Date of foudation:

- BIDV SGD1 was found in March, 28 th 1991 with the first name "Bank for Investment and Development of Vietnam, Transaction Center"

- On January, 1 st 2009, Bank for Investment and Development of Vietnam, Sogiaodich 1 was established based on Transaction Center basis

- On May, 1 st 2012 Bank for Investment and Development of Vietnam, Sogiaodich 1 changed its business model to Commercial joint stock bank

Business Field: As the authorization of Commercial joint stock Bank for Investment and Development of Vietnam

Workforce: Nearly 300 well-educated and experienced employees, 97 percent of which are Bachelor of Art or above The propotion of women is 60 percent and the average age is 31

Network: 14 departments are located at Head office of the branch – No 191

Ba Trieu Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi capital 5 external derpartments are located as follow:

- Lotte Tower Transaction Office: 9th Floor, Tower East, Lotte Center Hanoi building, No 54 Lieu Giai Street, Ba Dinh District, Hanoi Capital

- Quoc Tu Giam Transaction Office: No 2 Ton Duc Thang

- Kham Thien Transaction Office: No 23 Kham Thien Street, Dong Da District, Hanoi Capital

- Ngo Thi Nham Transaction Office: No 58A Ngo Thi Nham Street, Hai Ba Trung District, Hanoi Capital

- Hoa Binh Transaction Office: No 505 Minh Khai Street, Hai

Ba Trung District, Hanoi Capital

Goals: Remain the biggest brand in BIDV System

Products and services: currency trading, credit, banking services and other activities stated in the charter of the State Bank of Vietnam

Function and responsibility of department:

- Director: The director makes sure that all employees work together for the good of the bank, ensure that the bank policy is upheld

He creates operations and marketing plans, interviews and hires employees and works with clients

- Deputy directors: Assiting director in term of Finance, Sales and Operation; managing specific departments follow director's allocation

- Customers Relationship Departments: Finding, establishing and building long-term relationship with both corporate and individual customers

- Risk-control Departments: Controlling risks and collecting bad debts to minimum loss of the bank

- Transaction Departments: Performing cash and non-cash transactions for customers who make transactions at the Bank

- Internal Department: Performing the function of financial management; Implementing the accounting regime; Monitoring the use of capital, the situation of revenue and expenditure, business results, reporting and analysis of financial situation of the Bank; Advising director in the management process; Ensuring maintenance of network system, computer system, Wifi system, telephone, application software, projector; Monitoring the implementation of policies for employees, compliance with the bank's rules and regulation; Recruiting employees; Advising to sign labor contracts;

Handling documents; Performing other administrative tasks

- External Departments: Located far from the headquater of the branch with the number of employees around 10 people in Customers Relationship Department and Transaction Department

2.2.3 Situation of Workforce in BIDV SGD1

Table 2.1: Workforce at BIDV SGD1

Source: Organization and personnel department

As can be seen from the table, the number of employees at BIDV SGD1

This is the result of employee decline in all derpartments Customers Relationship Departments saw the highest reduction in the number of labours with twelve people, accounting for 41 percent, followed by External Department with seven people, accounting for 24 percent The reason is that the work pressure of these direct business Department is remarkably high The number of labours leaving the bank in the Risk- control Department, Transaction Departments and Internal Department were ten people, accounting for 35 percent The main reason for this is the reduction of personnel

Table 2.2: Workforce in BIDV SGD1 by gender

Year Total Women Percentage women

Source: Organization and personnel department The figures indicated that percentage of women employees at BIDV SGD1 is relatively stable at 46 to 48% which is quite high when compared with other Banks

Table 2.3: Workforce in BIDV SGD1 by age group

Source: Organization and personnel department

In 2015, the proportion of staff under the age of 30 accounted for 33.5%, staff 47.2% seniority from 40 to 40, employees from 40 to 50 accounted for 13.8, the number officials and employees over 50 years old accounted for 5.5% By 2018, the proportion of employees with a relatively stable age structure like 05 last year

BIDV has a relatively similar structure of staff age evenly among senior working groups, although the age group 30-40 accounts for a high proportion compared to other age groups This is one of the advantages for training and development human resources, ensuring inheritance However, the bank needs to have a plan for alternative recruitment, training and development

Table: 2.4: Workforce by education level

Source: Organization and personnel department

In general, the qualifications of BIDV's employees are quite high Table 3.4 shows the qualifications of employees in BIDV since the year 2015 to 2018; In general, cadres have university or higher level in 2015 accounting for 89.20%, by

2018, there is an increasing trend of 91.61% Staff intermediate level decreased from 8.0% to 6% That proves that BIDV pay attention to developing professional knowledge for staff.

Human resource activities at BIDV SGD1

BIDV SGD1 has paid attention to human resource planning Planning work for Human resources regulations are developed for each period and reviewed and adjusted annually to suit the actual situation Human resources planning is determined by the bank as the utmost important mission of the whole bank and is carried out under the direct instruction of leadership levels Human resource planning of BIDV includes activities follows:

- Determining total demand for human resources of the bank is aggregated from the human resource needs of the units Human resource needs of the units are determined on the basis of development needs (new demand) and manpower needs replacement (for retirement and transfer) The main method of determining human resources needs is based on experience and statistical reports from branches, resources is lacking in terms of scientific method, which not counting the fluctuations in human resources of BIDV

BIDV's human resources needs have been determined in terms of quantity and structure Including structure by age, gender, profession and training

- BIDV's human resources needs have been determined in terms of quantity and structure

- It is also important to identify human resource needs according to professional qualifications especially those in need of university and postgraduate human resources

- Provide solutions to implement the human resource planning in it especially interested in recruiting, training and developing human resources, internal transfer and promotion In which measures are mainly recruiting and training

- Carry out cadre planning from Director, Deputy Director of Branch, Head, Deputy Manager and equivalent level upwards This is a task that BIDV pays special attention to Planning is carried out in a period of 05 years and is reviewed and adjusted annually based on the staff assessment, emulation and commendation results and personnel fluctuations

BIDV Bank in the previous years operated according to the targets and plans assigned by the State, so the goal was to complete the assigned task as the main task Therefore, the planning of human resources to perform tasks is merely a calculation based on the assigned plan, there is no strategy, forecast, attract and maintain the development of human resources specifically Since the bank's transformation into business law, human resource management has made significant improvements However, on the one hand, due to the heavy ideology of operating under the form of state-owned enterprises, on the other hand, the quality of human resources for management is limited Human resource planning activities at banks have not yet been implemented and applied

Job analysis is the basic content and dominates other contents of Human Resource Management Recognizing the importance of job analysis, BIDV leaders paid attention to this work

To carry out this task, the Banking Human Resources Committee has a Department of Analysis and Evaluation of the work and the performance of responsibilities However, due to the lack of standards and detailed regulations to operate, the Board's activities still depend heavily on the will of the Bank's Leadership The work planning is often decided by the management of BIDV, lacking realistic basis and necessary analysis before making a decision The current roles and duties of each position are implemented only for senior managerial positions in the bank The analysis of the work of many branches, departments and departments has not been implemented This is the reason why many employees do not understand or have a clear awareness of the functions, tasks and job positions they are undertaking in each attached unit

In order to make the job analysis more relevant to the reality, BIDV has divided its staff into two divisions One block consists of managers (leaders) The block of managers includes: director, deputy director of the branch, chiefs and deputy heads of departments acting as advisors for the leadership The second block consists of direct staff and staff

In general, for the management division, BIDV has developed a job description for job titles The job description includes the following contents: (i) Name of the job title (position); (ii) Tasks to be performed; (iii) Professional and professional requirements to implementers

In fact, the job descriptions lack specific details about the tasks and responsibilities that must be completed, the relationship between jobs in the same department (unit) is lacking, and lack of necessary conditions for completion successful and especially lack of standards to get the job done

For the direct working division, BIDV has specific provisions on tasks and implementation of labor norms The types of labor levels built include the types of

The construction of the labor level serves as a basis for the implementation of contracting salary fund at BIDV However, the level of labor still does not fully reflect labor costs, in general, the use of labor time is still wasteful

Due to the analysis of the content of each task, the work in each field depends heavily on the guidelines, decrees and circulars of the government and the state bank on banking services So the job description is relatively restrictive and stereotypical

Currently, the direct labor force in each specialized division, the work is clearly assigned, the employee is responsible for all his work when performing

However, the specification of workflow or error handling in the workflow has not been specifically mentioned, the determination of the extent of damage caused by a process failure or delay is also not paid attention This leads to a limited labor consciousness of workers

Regarding the indirect labor sector, due to the in-depth analysis of the content of each job title in each field, the detailed job description could not be made, leading to duplication of work assignment not managing the work of the staff, not evaluating the performance and the capacity of the employee Leaders when assigning jobs to employees have not yet envisioned all the tasks that employees must perform, most need to do what they are assigned immediately The current common situation is that employees mainly deal with affairs according to incidents, arising jobs, employees have not been proactive in planning their work performance, have no work goals, have not identified define personal responsibilities for the job

To survive and develop in the current market, it is necessary to continuously renovate human resource management, one of which is recruiment Every employee at the bank must go through four stages: probationary period, 01-year labor contract, 03-year labor contract and long-term contract At the end of each period, if the employee who is assessed as competent and meets the requirements will be transferred to the next stage This method helps improve the quality of the workforce in the bank and also reduces the cost of re-training the labor force

However, it may not be possible to retain some qualified staff when they want to come to a better environment

There are two sources of recruiment:

External recruitment: This is the main source of the branch The new personnel are mainly recruited for the Customers Relationship Department and Transaction Departments The branch shall give priority to the recruitment of fresh graduated students or those with less than 2 years of experience in order to facilitate the training

Internal recruitment: Depending on the capacity of the labor, the branch transfers labor from one department to another This is the main source of recruitment for the remaining departments

Status of performance appraisal at BIDV SGD1

An evaluation of the performance of the work has also been developed by a set of regulations for carrying out a joint job evaluation Some of the main contents of the work evaluation plan are as follows:

- Perspectives and approaches for evaluation have changed, from assessing staff based on ethical principles to assessing the extent of job completion This can be said to be a "huge" change in bringing the scientific content of Human Resource Management into BIDV.- Assessment of work performance is conducted every month, focusing on performance evaluation at the end of the year, linking evaluation of work performance with evaluation of staff classification, voting of emulation titles of BIDV and the State

- The performance evaluation is mainly conducted according to the employees self-assessment channel, conducting internal assessment within the working room / group and the managerial staff directly evaluates the subordinates; do not conduct subordinate evaluation and copy evaluation among departments, groups / groups to each other

In order to evaluate the performance for salary payment purposes, the Bank evaluates the monthly and year-end achievements

At the end of each month, each employee lists the level of work completion and the direct manager povides certification of results, then each functional department synthesizes the scoring results and sends them to the Organization Department Every month, the Board of Directors will conduct an agency meeting to assess the level of work completion of the entire agency based on the results of summarizing the emulation scores that the Organization and Personnel Department synthesized to serve as a basis for classification into A *, A, B, C1, C2 categories and calculate the monthly increase in income for each officer

Every year, all employees of BIDV SGD1 perform periodic assessments according to the prescribed form with the general criteria Results to be used as a basis to evaluate the performance of employees in a year and serve as the reference for voting Year-end emulation for each employee

In order to classify employees, the Bank issued the criteria for performance for all employees: Completing the assigned professional work; Compliance with discipline and labor regulations; obeydience to guidelines and policies of the Bank; provision of ideas and initiatives for improving Bank and department performance

The evaluation criteria represent the requirements of completing a job in terms of both quantity and quality That is the benchmark for measuring the actual performance of workers' work According to the regulation of evaluating staff performance at the branch: employees are divided into 4 levels: A *, A, B, C1, C2

In which type A *: excellently completed the task, and type B: well fulfill the task, type C1: not completed the objective objective reasons and C2 has not completed the task with subjective reasons

Evaluation method Bank for Investment and Development of Vietnam, SGD 1 evaluates staff performance mainly by the MBO method In addition, the evaluation of the Bank's performance mainly focuses on the salary increase for employees, the appointment of managerial staff, and periodic classification, so the Branch uses additional evaluation score method report method, scale method, vote voting

At SGD1, the assessment is conducted by:

+ The superior directly evaluates the performance of subordinates

There are many reasons why banks apply this method:

+ Firstly, because the assessed person himself will understand the level of accomplishing his job, the management level directly knows the completion of the work of the subordinate

+ Secondly, the direct management is responsible for managing their units, so it is necessary to directly assess their employees After all, because development training is an important element in the assessment program, it is the responsibility of the management level, so the employee development and assessment programs need to be closely linked

- For staff of departments and deputy departments, the managers are assessed

- For department heads assessed by the Branch Manager

- For directors and deputy directors evaluated by the Head Office

2.4.3 Uses of performance appraisal 2.4.3.1 Use of PA for determination of monthly salary

Currently the employee's monthly income consists of two parts:

- The first part is base salary (for determination of insurance benefit) Base salary = Hbh x Lcs

+ Hbh: is the salary coefficient of the employees + Lcs: is the basic salary determined by BIDV in each period

- The second part is the position salary

Position salary= Hvt x Lcs x Hkd x Hxl

+ Hvt: Salary coefficient of job position of employees + Lkd: Coefficent of Business Income of business units

Evaluation rating Type Salary Coeficient

Not fulfilled (Subjective Reason) C1 0.8 Not fulfilled (Subjective Reason) C2 0.5

2.4.3.2 Use of PA for reward

Evaluation criteria as a basis for reward are described in more detail

However, it has not met the requirements of achievement assessment It is a system of evaluation criteria that is not specific to each type of employee, many standards are difficult to measure, thus difficult to assess or lack of convincing value

2.4.3.3 Use of PA for salary review

+ Employees evaluate their achievements in the past time

+ The management department directly organizes a meeting to evaluate achievements according to the emulation criteria but not grading

+ The Department of Proposals and the Salary Reward Council of the company consider and decide

2.4.3.4 Use of PA for promotion

For the evaluation of performance as a basis for planning, promotion, appointment, reappointment, transfer and rotation of cadres, it can only be conducted when there is a need for consideration and appointment outside the Head Office Main and 6 months to be included in the planning area and after 3 years will be appointed

For the evaluation of achievement to pay additional wages, the assessment is done monthly

For the evaluation of employee performance to classify, reward and consider salary increase before the yearly term, it is done at the end of the year through evaluation form.

Survey results

According to survey results, the ratio of men to women working for the bank is not much different The total number of male employees is 69, accounting for 45.4% compared to that of 54.6% for women

The data indicates the employment rate for persons aged under 30 reached the peak of 37.5% Employees over 50 on the other hands hit the lowest point of 14.5% Besides the age group amoung 30 to under 40 and that of 40 to under 50 was slightly above average with figures of 27.0% and 21.05% respectively In general employees tend to be young making up for 64.5% of people under 40

It can be seen in the table that the largest proportion of employees went on those with an experience of 5 years or over, at 38.8% Meanwhile, approximately 10% of the total employees, which was also the lowest among the others, belonged to the group under 1-year experience The group with 1 to under 3 years experience was slightly higher (at 27.0%) than those working from 3 to under 5 years, at 24.3%

Table 2.7: Working experience survey result

From 1 year to under 3 years 41 27.0 27.0 36.8

From 3 years to under 5 years 37 24.3 24.3 61.2

According to the survey, the highest number of employees was going to Relationship management with over 32% Employees in Transaction office stood at the second largest one, accounting for 25% Internal management with 17.1% and Back-office with 15.8% ranked the third and fourth respectively In contrast, only 9.2 % of the employees worked in Risk management

Table 2.8: Working position survey result

It is clear that all staff at BIDV SGD1 surveyed had a university degree or higher, in which the number of university graduates was 105, accounting for 69.1% and the number of postgraduates was 47, accounting for 30.9%

Table 2.9: Educational background survey result

Source: Data analysis (2018) 2.4.2 Survey results about performance appraisal

Table 2.10: Understanding about the purposes of PA

PA is mainly for determination of salary

Objective of PA has been widely communicated to the employees

I understand clearly about the multiple objectives of P.A

It can be seen from the data that employees at BIDV believe that P.A is mainly conducted for the purpose of salary determination only In fact, P.A is expected to serve many purpose such as identification of training needs, promotion determination and so on Therefore, the company needs to make it clear to the employees about the other purposes of P.A The results also indicated that the objectives of PA have not been communicated to ecery employee within the company Finally, only half of the employees understand about the other purposes of PA

2.4.2.2 About period of performance appraisal

Table 2.11: Perception about the period of PA

(%) Cycle period for evaluation is appropriate

Time for evaluation is appropriate 3.31 12.5 24.3 11.3 23.7 28.2

Combination of monthly and year-end evaluation is proper

In general, the results indicate that employee at BIDV SGD 1 think that the period of performance appraisal is appropriate The combination of monthly and year-end period had the lowest mean score In fact, some of the ideas suggested that evaluation can also be done quarterly because some of the key results may not be obtained everymonth

Table 2.12: Perception about evaluation criteria

(%) Areas of Evaluation are appropriate 4.04 5.2 9.3 5.2 35.1 45.2

Criteria for each area are clear and specific 2.60 28.8 31.2 10.7 19.8 9.5 Weights for criteria have been well designed

Although the employees agree that the areas of evaluation which combine quality and quantity of the work performance, compliance with discipline and labor regulations; obeydience to guidelines and policies of the Bank; provision of ideas and initiatives for improving Bank and department performance, most of them believe that the criteria for these areas are not very clear and specific Some ideas suggest that apart from quantitative job performance, criteria for other areas of of performance are not clear and specific More importantly, the weighting scores for each criteria are perceived by the employees as inappropriate Thay suggest that these weight should be calculated differently for different positions

2.4.2.4 About fairness in performance appraisal

Table 2.13: Fairness in performance appraisal

(%) Procedure for PA at the company is appropriate

The combination of PA method is good

PA results are reliable 3.26 12.6 21.8 10.7 36.5 18.4 The process of PA at the company is fair and justice

Evaluation process at SGD1, BIDV has been judged by employees as appropriate with overall mean score of 3.85 Howver, there are still concern about the reliability of results with mean score of only 3.26 and about 30% of the employees do not think that the results are reliable The combination of method inclusing self-evaluation and supervisor-evaluation is not perceived by employees as good The overall score for this item is 3.09 and ẳ of the employees do not agree that the combination is appropriate Some of the ideas suggested that the role of self-evaluation has been undermined Moreover, there are notable concern about the procedural fairness of the process as the mean score for this item is relatively low at 2.87 Because of the unclear criteria in many areas of evaluation, the final rating maybe baised dependent on the raters

Table 2.14: Raters knowledge and skills in performance appraisal

My supervisor receive training prior to conducting PA

My supervisor understand clearly about my jobs

My supervisor has good understanding about how to conduct P.A

Overall, the employees are not really satisfied with their raters with regards to P.A

Only 37% believe that their supervisors have received PA training before conducting PA sessions About 20% of the employees did not think that their supervisors really understand about their jobs Finally, about one-third of the respondents report that their supervisor did not know well about how to conduct a good PA It can be concluded that in order to improve the effectiveness of PA, more effort should be put forward to enhance raters‘ understading and PA skills

2.4.2.6 Perception about the use of PA

Table 2.15: Perception about the use of PA

PA results is used for determination of monthly salary

PA results is used for determination of rewards and salary review

PA results is used for determination promotion

The employees mainly agree that the results of PA are used mainly for the purpose of monthly salary determination In fact, some of the interviewees suggested that this is the only purpose for cinducting PA Uses of for salary review and determination of rewards, about ẳ of the respondents did not agree with this use of

PA According to them, salary review is mainly periodical, the employees may receive salary increase after 3 years Regarding rewards, some employees believe that the company has different ways to determine the winner of compant awards rather than based on performance appraisal ratings

Table 2.16: Perception about PA feedback

I receive feedback about my PA results 3.75 2.1 8.2 28.3 35.8 25.6

I receive feedback on how to improve my performance

I can give feedback and defend about my own performance

Data in Table 2.11 indicate that the employees receive feedback about their PA results,with an average score of 3.75 However, less than 50% of the employees agree that they receive feedback on how to enhance their performance The mean score for this item is 3.01 and more than one-third of the respondents say they did not receive such feedback Finally, the degree to which the employees can provide feedback and defend their performance is not high with a mean score of 3.16 About 25% of the employees do not belive that they have chances to protect themselve and provide feedback about their own ratings.

Achievements and drawbacks of current P.A system at BIDV SGD 1

Purpose of assessment: To pay salary, reward and make decisions on salary increase, planning, promotion of personnel, classification of emulation at the end of the year

- BIDV SGD1 employees have access to modern management forms, equipped with professional knowledge and skills

- Some criteria for evaluating employees are built relatively in line with the objectives of assessing personal characteristics, behavioral ethics, behavior and lifestyle

Both employees and leaders of the Bank are involved in the performance evaluation

- Requirements for evaluation criteria: The Bank's performance evaluation criteria currently only meet 1 of 5 SMART standard requirements

Some of the evaluation criteria are not clear, they did not specify the "level" required to achieve, so they are difficult to assess Some of the standards of work performance are also "not specific" and that is not suitable for the majority of work at the Bank Due to the main objective is to use the performance assessment to pay wages, the system of evaluation criteria focuses on the performance results and some standards for the implementation of banking policies in general and the contribution of employees The criteria for qualities, capabilities, potentials and specific behaviors related to work are not used

- The assessment objectives serve as a basis for simple and emotional payment and bonuses

- Assessment method: Evaluation method using report method, scale method and voting method However, the implementation has not been able to apply the advantages of each method, so the evaluation results are not convincing, still formally, emotionally, and imposed

- Subjects of assessment: The object of current assessment is relatively consistent with business characteristics and organizational structure of the Bank In addition, there is no mechanism for correcting evaluation errors arising from this assessment object Some positions need to have the participation of customers outside the Bank

- Timing of evaluation: The time to perform a monthly assessment for the purpose of evaluating is to pay or reward as current is appropriate However, in order to fully evaluate an employee, the evaluation time is so unreasonable and need to add the quarterly and 6-month timelines

- Evaluation process: There is no feedback process on evaluation results for training and development There is no two-way feedback mechanism on assessment results

- The use of assessment results is not really effective and reasonable, which may have a negative impact on the motivation of bank employees

The evaluation of the achievements at BIDV SGD1 Branch has not been focused and the objectives are unclear

- The leaders at all levels have not recognized the assessment of employee achievement as one of the important activities Therefore, the issue of popularizing the assessment process has not been paid attention in the right direction

- The job description does not specify the work of each position mainly focused on a number of general criteria, so the monitoring and supervision of the work of staff is mainly undertaken by the department heads Lack of exchange between leaders and employees about the reasons for not completing the work

- Lack of unification of work goals between leaders and employees right from the job assignment

- Evaluation system with non-specific, emotional and stereotyped criteria according to a pre-existing pattern

- No work analysis has been done to build "Employee Standards" to determine criteria for performance evaluation

- The object of assessment is missing; has not yet attracted the active participation of customers in staff assessment.

PROPOSAL ON SOLUTIONS TO ENHANCE PERFORMANCE

Strategic orientation of BIDV

Identifying human resources, information technology (IT) skills and financial capacity are three important pillars of the bank's development strategy, over the years, BIDV has prioritized many development investment resources human resources, technology development Up to now, BIDV has developed a fairly synchronous and modern technical infrastructure as a basis for the deployment of modern banking operations, as a basis and creates momentum for providing quality banking services The economy is high for the economy, contributing to improving the quality of products and services and competitive power in the market Strategic development orientation at BIDV in the period of 2020 - 2025 and range look to 2030:

Firstly, continue to be the leading financial services provider in Vietnam, focusing on providing high quality services to the target market

Secondly, developing the network of product distribution channels, diversifying investment fields, gradually increasing the influence and value of BIDV in the financial market, focusing on shaping and perfecting the business network, promote investment in projects with competitive advantages in fields of:

Energy, technical infrastructure, sea defense, real estate

Third, promote restructuring of the Bank, growth on a sustainable basis:

Achieve a reasonable structure of debt assets - assets based on the determination of stable growth; diversify investment portfolio, improve asset quality; increase profitability; improve financial capacity, ability to set up risk provision (DPRR) and self-offset risks

Fourthly, continue to expand and promote business areas with competitive advantages and efficiency; improve financial capacity and competitiveness; Apply international standards in executive management

Fifthly, building an advanced risk management system to ensure sustainable development Standardize management processes and procedures, complete the internal management reporting information system for executive management

Sixthly, building the information technology development strategy; building a modern MIS management information system, meeting the information needs, reports on management and direction of the Board of Directors at the Head Office and branches in the key business modules

Seventh, build and develop a strong and effective retail banking business

Implementing and strengthening the information technology system, developing products and services at the same time, organizing organizational and management models according to customers and product lines

Eighth, develop policies to attract, respect and treat talented people, improve the quality of human resources, build a staff of staff with professional competence and professional ethics and ensuring benefits of workers; ensure social security; promote BIDV's brand and culture.

New challenges for HRM at BIDV

3.2.1 Higher demand for quality of human resources

International integration facilitates the establishment of market-oriented labor structure, which is gradually changing the labor structure in BIDV This change occurs on many sides of the labor structure International integration has created a deeper and deeper division of labor, making the labor structure according to BIDV's professional qualifications, in recent years, the labor structure in BIDV has been making clear changes Employees with high technical and professional qualifications are becoming more and more necessary for BIDV's operations while unskilled workers must be cut

At present, the source of highly qualified labor is increasingly flocking to BIDV, while the bank still has a large backlog of old workers with low technical and professional qualifications This is a hindering factor for the development of the bank

Integration and globalization become a common trend, foreign workers (especially skilled workers, managerial skills, etc.) participate in the bank's business activities more and more If the employees in BIDV system were formerly Vietnamese, foreign experts have gradually joined and played important roles in BIDV's operations

International integration creates a dynamic environment and more changes in the BIDV system will create changes in the structure of human resources by age

Young workers will tend to be given priority because of their dynamism and ability to keep up with the changing environment and often receive more professional training in terms of qualifications Besides, young workers also easily meet the requirements of foreign languages, information technology, etc., which are essential elements in an integrated environment

Within BIDV, the issue of labor structure by gender has also changed and will tend to be more and more balanced This development also follows the general trend of the world and the region International integration, in addition to the higher professional requirements, the level of skills, there are new requirements for the quality of human resources It is a requirement of foreign languages, information technology, industrial behavior and culture, knowledge of international laws and practices, which are challenges for BIDV in the new development stage

3.2.2 Change in corporate cultural values

In the process of international integration, cultural interference takes place in all areas of life and becomes stronger in the corporate environment At BIDV, there is a fundamental change in corporate culture Previously, the concept of corporate culture in the BIDV system has not been paid attention by leaders and staff

However, in the current period, corporate culture is gradually being paid attention and is considered as a factor to make the success of enterprises

When the environment changes due to international integration, businesses external factors (economic, political, social, technology, etc.) , it is easy for enterprises to lose their development orientation Corporate culture, in this context, is an axis for the operation of surrounding businesses

In previous years, BIDV's organization often operated with many features of the administrative bureaucracy; The evaluation of labor, promotion of officials often falls into the subjective mindset and absoluteizes the role of ethical factors rather than the capacity to perform the work, in addition to the former, afraid to change, subject High role of the collective while equating individuals is also backward features in corporate culture This cultural feature is gradually changing along with the integration process of the economy and starting from the awareness and orientation of BIDV's leaders

At present, the corporate culture is gradually changing in the direction of attaching importance to the orientation and creativity of individuals, promoting the modification of the old and selection of new ones These are the bases for changing the operation of BIDV Bank leaders need to make clear statements about their mission and goals, and impress the bank's new viewpoints and values These orientations, if not in line with the new or unclear requirements, will cause BIDV's members to be disoriented and confused in their operations

The adjustment of cultural orientation to suit the general development orientation of BIDV but also to the diverse labor force plays a very important role, requiring investment from the Bank's Leaders and the industry in particular HRM

The change in environment due to international integration inevitably leads to a change in workers' perceptions This has a fundamental impact on the orientation in human resource management of BIDV [31] The change in perception is shown in the following main features:

Employees are increasingly aware of their role in the success of their business Previously, employees often thought of working for wages and had a psychological dependence, fearing managers at work, but nowadays, the level of employees is improved, capacity and personality of employees is shown more clearly, the perception of workers with jobs has changed completely Employees are aware that not only do individuals need businesses, but BIDV's business needs workers

Recognizing that, the employee will ask BIDV, for the QA, to properly assess their role and contributions in the business results of the bank and receive remuneration and appropriate benefits with that review International integration is also bringing new awareness flows to employees in the BIDV system A typical perception is the right that employees enjoy in the bank In fact, the international labor standards are highly humanistic, such as provisions on issues related to child labor and forced labor; fight against discrimination in the workplace, association freedom and collective bargaining agreements Besides, workers also demand other legitimate rights such as the right to vocational training and development, entitlements social benefits, the right to fulfill obligations to the family, society, etc The provisions on rights enjoyed by workers are fully reflected in the Labor Law

Currently, in line with the increasing knowledge of employees and the change of awareness due to international factors, the QA in the BIDV system is changing its policies to suit the wishes of workers and common perceptions of the region and the world Policies for employees are changing in the direction of paying more and more attention to the role of employees in the bank's business activities

Policies on development training, labor remuneration, performance evaluation and employee motivation are all adjusted and oriented more appropriately

3.2.4 Training and career development activities are changing

International integration requires Human Resources Management to pay more attention to career development training for BIDV's officials and employees

Specifically, the requirements of training activities must meet the training quality, international standards or at least regional standards At the same time, it is necessary to organize regular training so that officials and staff members can keep up with the development of the world

Requirement for performance appraisal at BIDV and SGD1

The evaluation of BIDV's work performance in the context of international integration is also fundamentally changing When the bank's business activities were still limited in the domestic scope, the evaluation of BIDV's performance was not paid adequate attention The viewpoint of previous evaluation at BIDV is based on ethical standards rather than work results When participating in international integration, the change in employees' thinking also affected the viewpoints of job evaluation at BIDV Workers increasingly appreciate transparency in performance evaluation, requiring managers in a bank to have a transparent, specific job evaluation process, suitable for many subjects

Foreign labor experts' workforce at BIDV is also a factor that makes a change in job evaluation Foreign labor sources, especially those in advanced countries, often require high transparency and detailed performance evaluation and especially pay should be based on performance Currently, the work evaluation in BIDV has paid more attention to the work results of employees BIDV's leaders are also developing the performance evaluation criteria for each position In the future, BIDV needs to continue improving its performance evaluation activities in the following directions:

(i) Conduct performance assessments in all positions, ensuring that employees are assessed on the work in progress

(ii) Openly and transparently evaluate the results of the employees

(iii) Reduce the ethical evaluation criteria, enhance the evaluation according to work efficiency

(iv) Refer to the evaluation of work performance in countries in the region and around the world to improve job evaluation in BIDV.

Solutions to improve Performance Appraisal Effectivenes at BIDV SGD1

3.4.1 Raising awareness on job performance evaluation

As mentioned above, one of the reasons for the result of poor performance evaluation and ineffective performance is the misperception or disregard for the performance evaluation work both on employees and managers Therefore, there should be measures to raise awareness and help workers to have more access to this activity

Employees do not fully understand the purpose of the assessment perform the work Most of them only see the assessment of performance as the basis for salary increase, bonus, but not fully understand that it is the basis for reviewing emulation and reward, opportunities to improve or help improve the situation of the Bank performance

Therefore, it is necessary to have face-to-face meetings of department leaders with their direct employees, the Board of Directors with employees to exchange specific tasks in each stage It also shows the goals to be achieved as well as the salary and bonuses that can be achieved if the task is completed well

Understanding the importance of assessing work performance helps employees work hard, understand their work, thus working to the best of their potential

For managers, there is a need to be more aware of the assessment of performance It should not be taken lightly, and disregarded because this can be said to be the activity that determines the success or failure of other activities

3.4.2 Perform job analysis to standardize job titles

Job analysis is collecting information about jobs, designing work, and developing job descriptions The result of Job Analysis is to build a system of job returns tables for the whole BIDV system Job analysis is the basic activity of Human Resource Management The results of the Job Analysis will determine the science, accuracy and reasonableness of other activities of HRM such as recruitment of human resources, performance evaluation, staffing, building a system of labor remuneration, training and developing human resources, promoting staff

If the Analysis of work is inaccurate, lack of scientific basis, the remaining activities of Human Resource Management will be formal, inaccurate, directly affecting the quality of Human Resource Management

Job performance evaluation is the evaluation of work performance of employees in BIDV Assessing work performance scientifically, exactly as the basic content of human resources management as well as an important measure and tool of leaders, managers of BIDV, branches and applications to implement Human Resource Management Performance Evaluation is an important information and data system to help BIDV leaders, branches and units accurately assess the quality of human resources quality of the agency Performance Evaluation Results are used to: (i) Assess staff; (ii) To pay fair and reasonable labor remuneration, (iii) Accurately identify training needs of each individual and each BIDV branch, unit and the whole BIDV system, (iv) Important basis to promote, transfer, staff arrangement, staff etc Therefore, assessing accurate, scientific, fair and objective work will be the decision to the remaining activities of Human Resource Management at BIDV

In order to carry out the innovation of Job Analysis and Performance Assessment at BIDV, the thesis proposes some specific solutions as follows:

1 Defining clear work Analysis, Performance evaluation is a task of the Leadership from the Board of Directors, the Board of Directors to the branches and units and is also the task of the management staff management at BIDV

2 Establishment of BIDV's Performance Analysis and Evaluation Council

Specific tasks of the Council for Performance Analysis and Evaluation are: (i) Developing strategies, policies and plans Analyzing and evaluating work performance of BIDV, (ii) Monitoring the situation Implementing Analysis and Evaluation of the performance of the whole system, (iii) Advising the Leadership at the head office, Leaders of branches, operators, and effectively using the Analysis results work evaluation, implementation to implement, implement other activities of HRD and general management, (iv) Applied research on scientific achievements of

3 Formulating policies, a system of specific regulations of BIDV and of branches and units in the whole BIDV system on Analysis and Performance Evaluation There should also be specific regulations and guidelines on the use and exploitation of Analysis Results, Job Evaluation to serve the work of Human Resource Management in particular, the management

4 Recruiting human resources with professional qualifications and experience in Human Resource Management in general, Analysis and Job Evaluation in particular to strengthen the contingent of specialized personnel in Human Resource Management

5 Organizing training and retraining in the knowledge and skills of Analysis, Assessment of work performance for members of the Analysis and Evaluation Council performing work at the head office and branches, units and for officials in charge of Human Resource Management in general and officials, staff in the work analysis, Assessment of work performance in particular

6 Compiling a professional handbook on Analysis and Evaluation of work performance so that officials and employees in the whole system of the bank can research and unify themselves in performance management

The content of the job description and staff standards in the Bank can be summarized as follows:

- Position: job position to describe

- Division: employees of departments, departments, departments that manage

- Job summary: general description of the job

- Major relationships: inside and outside the Bank

- Indicators to evaluate the performance results

- Knowledge and skills needed: Degree; Experience; Requirements for knowledge and skills; Requirements for quality thinking

- Working conditions: Working time; Work environment; Support tools

In addition to the job description for each title, the Bank needs to coordinate with a description of the functions and tasks of each department, department, and department to have a preliminary description of each department's relationship with other departments

Determine business production goals for employees

- General production and business objectives of the department:

- Determining work objectives corresponding to the functions and tasks of employees

- Determining the parameters related to the work being analyzed, determining the criteria to evaluate the performance of the group or individual

In order to improve the effectiveness of P.A, the leaders of the Company need to correctly identify the importance in determining the evaluation objectives

The determination of assessment objectives must be associated with the general development strategy of the Banking industry, associated with the ability to achieve the objectives of BIDV and thus assessment objectives must be determined in a specific and clear way for each department and individual in the Company On that basis, the author proposes some evaluation objectives that need to be paid more attention in the coming time The following objectives of PA need to be well communicated to all employees: ã Evaluation of the level of completion of the employee's assigned work ã Determine the capacity, qualifications and qualities of employees, as a basis for promotion, appointment and promotion ã For reasonable adjustment in structure, recruitment and training ã As a basis for salary increases, bonuses and penalties

Some recommendations

3.5.1 Paying attention to developing human resources of the banking industry

Develop professional standards, apply practice certificates to a number of core positions in the banking industry; vigorously renew cadre work;

- Enhancing cooperation between training units and employers in the banking sector;

- Focusing on training high-quality human resources to meet the development requirements of the banking industry and international economic integration, especially leading leaders and experts to achieve the regional level and international Fostering and training a team of experts in the fields of Banking such as monetary policy, management of foreign exchange reserves, payment, inspection, banking supervision, analysis and forecast , risk management

Training cadres to grasp scientific and technological advances and apply them to practical practices of the industry, at the same time equip and train new skills for existing staff, ensuring professional cadres of The State Bank is capable of applying information technology, advanced working methods, has capacity to propose, advise on policy formulation, and perform state management of monetary, credit and banking activities goods, in accordance with the requirements of the economy in the context of extensive international economic integration and the strong development of science and technology; enhance the autonomy and responsibility of individuals; to build a contingent of information technology personnel at credit institutions, with good professional qualifications and high professionalism, meeting the needs of administration, operation and mastering of modern technology systems

3.5.2 Recommendations on Policies for training human resources in the banking and finance industry in general and BIDV in particular

Introduce the banking and finance industry and introduce the industry into the education system right from the high school level according to the admission counseling program Students can have the opportunity to talk, talk about finance and banking in order to have clear career development directions in the future by taking entrance exams to specialized universities or participating in training programs specialized in banking

Invest in training programs at training institutions Investing in scholarships for overseas training or inviting famous foreign professors to cooperate in teaching and working for the banking and finance major

Providing training and consulting services Extensive organization of training courses and retraining of human resources for units of the banking and finance industry, especially training courses or improving management capacity for subjects managing banks and training courses on how to Modern management measures for banks In addition, it also provides advisory and support functions for banks in the domestic and international financial human resource information system

At present, there is no state unit that can provide banks with a complete and practical information system on financial and banking human resources as the basis for making investment, development or investment decisions reaching out to the international market

Development of Occupational Competency Standards: The capacity dictionary for the banking and finance industry will identify what knowledge, competencies and attitudes are necessary for each job group in the banking and finance industry as well as to prepare for future development Based on this set of standards, training institutions will draw up appropriate training curricula as well as orient the desired human resources to participate in the banking sector with necessary and sufficient conditions as well as proactive learning to join and grow in this area

Performance Appraisal is a human resource management activity that is part of a series of management activities of the enterprise, which is closely related to other human resource management activities In fact, when the Vietnamese economy is now integrated with the world economy, the competition in the market is even more fierce than ever In the process of operation and development, especially in the period of international integration, businesses in general and BIDV in particular operate more actively to gain a high position in the market The fluctuation of the environment will be larger and more complex This requires creating a comprehensive transformation to meet the trend of the times

Recognizing the importance of PA with the content presented above will help BIDV find reasonable solutions in its operations, from planning to implementing the development strategy of the Bank It is the basis to contribute to improving the operational capacity, competitive position and facility to promote the brand of the Bank in domestic and international markets

PA is a fundamental element to promote and ensure the Bank achieves high efficiency and sustainable development objectives in the context of international integration and context PA will also have a very important impact on the innovation and development of the Company in the coming time when contributing to orienting strategic thinking, creating a unique identity in each unit's activities, creating the spirit and an effective working environment, creating a common consensus of management and all employees, thereby building long-term competitiveness and sustainable development for the Company

The thesis has solved the set objectives

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APPENDIX APPENDIX 2 QUESTIONAIRE IN VIETNAMESE

Kính chào các anh/chị!

Trân trọng kính mời anh/chị tham gia vào cuộc khảo sát về “Đánh giá thành tích Ngân hàng TMCP Đầu tư và Phát triển Việt Nam – Chi nhánh Sở giao dịch 1” trong khuôn khổ luận văn thạc sĩ chuyên ngành Quản trị kinh doanh tại Khoa Quản trị và kinh doanh - Đại học Quốc gia Hà Nội

Với mục đích nghiên cứu trên tất cả các câu trả lời và các thông tin anh/chị cung cấp sẽ được giữ bí mật tuyệt đối, không sử dụng vào mục đích nào khác ngoài mục đích nghiên cứu khoa học Vì vậy, rất mong anh/chị giành ít thời gian để trả lời một cách đầy đủ và chính xác nhất vào bản phỏng vấn này

Anh/chị trả lời bằng cách khoanh tròn vào ô lựa chọn đối với mỗi phát biểu sau đây với quy ước về điểm của thang đo như sau:

1: Hoàn toàn không đồng ý; 2: Không đồng ý; 3: Không ý kiến; 4: Đồng ý; 5:

PHẦN I: CÁC YẾU TỐ ẢNH HƯỞNG ĐẾN ĐÁNH GIÁ THÀNH

Mục tiêu đánh giá Mức độ đồng ý

1 Đánh giá là nhằm mục đích xác định tiền lương hàng tháng 1 2 3 4 5

2 Mục tiêu đánh giá được truyền thông rộng rãi đến từng nhân viên 1 2 3 4 5

3 Tôi hiểu rõ các mục tiêu của đánh giá thành tích công tác 1 2 3 4 5

Chu kỳ đánh giá Mức độ đồng ý

4 Chu kỳ đánh giá hiện nay là phù hợp 1 2 3 4 5

5 Thời điểm đánh giá như hiện nay là phù hợp 1 2 3 4 5

6 Sự kết hợp giữa đánh giá ngắn hạn và dài hạn là hợp lý 1 2 3 4 5

Tiêu chí đánh giá Mức độ đồng ý

7 Các lĩnh vực đánh giá là phù hợp 1 2 3 4 5

8 Các tiêu chí đánh giá rõ ràng và cụ thể 1 2 3 4 5

9 Trọng số cho các tiêu chí là phù hợp 1 2 3 4 5

Sự công bằng trong đánh giá Mức độ đồng ý

10 Quy trình đánh giá hiện nay là phù hợp 1 2 3 4 5

11 Việc kết hợp các phương pháp đánh giá phù hợp 1 2 3 4 5

12 Kết quả đánh giá là đáng tin cậy 1 2 3 4 5

13 Quy trình đánh giá đảm bảo công bằng và công lý 1 2 3 4 5

Người đánh giá Mức độ đồng ý

14 Người đánh giá được đào tạo trước khi tiến hành đánh giá 1 2 3 4 5

15 Người đánh giá hiểu rõ về công việc tôi đang làm 1 2 3 4 5

16 Người đánh giá hiểu rõ cách thức đánh giá phù hợp 1 2 3 4 5

Sử dụng kết quả đánh giá Mức độ đồng ý

17 Kết quả đánh giá sử dụng để trả lương 1 2 3 4 5

18 Kết quả đánh giá được sử dụng trong khen thưởng và nâng bậc lương 1 2 3 4 5

19 Kết quả đánh giá được sử dụng để quyết định bổ nhiệm 1 2 3 4 5

Thông tin phản hồi Mức độ đồng ý

22 Tôi nhận được thông tin phản hồi về kết quả đánh giá 1 2 3 4 5

23 Tôi nhận được thông tin về hướng khắc phục và phát triển kỹ năng 1 2 3 4 5

24 Tôi có thể có tiếng nói liên quan đến kết quả đánh giá của bản thân 1 2 3 4 5