(Luận văn) improving petrol stations employees’ motivation a study of petrovietnam oil corporation

t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ng hi ep w n lo ad y th ju Nguyen Cao Duc yi pl n ua al va n IMPROVING PETROL STATIONS EMPLOYEES’ MOTIVATION: ll fu oi m A STUDY OF PETROVIETNAM OIL CORPORATION at nh z z k jm ht vb MASTER OF BUSINESS ADMINISTRATION om l.c gm an Lu n va ey t re Ho Chi Minh City – 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business t to ng hi ep w n lo ad y th ju Nguyen Cao Duc yi pl n ua al va n IMPROVING PETROL STATIONS EMPLOYEES’ MOTIVATION: A STUDY OF PETROVIETNAM OIL CORPORATION ll fu oi m at nh z z vb k jm ht MASTER OF BUSINESS ADMINISTRATION om l.c gm SUPERVISOR: Dr Nguyen Thi Mai Trang an Lu n va ey t re Ho Chi Minh City - 2018 Executive summary t to ng Many researches recently have show that: motivation of employees play a very important hi ep role in business activity They have pointed out: if the level of motivation is high, the employee can perform better, the worker can get higher productivity and the company w n can achieve business goal and objective effectively On the opposite, if the motivational lo ad level is low, it could lead to low sales performance, it may weaken the company y th ju performance and thus it can affect business success yi Understanding the significant role of employee motivation, the objective of this thesis pl al n ua was (1) to find out the impact of employee motivation on organization effectiveness and va productivity, (2) to identify what factors motivating employees at PetrolVietnam Oil n Corporation’s (in short, it would be called PVOIL in this thesis) petrol stations and ll fu oi m examine the major factors that increase motivation of employees the most at nh After carefully reviewing many theory regarding employee motivation, I found that: there z are many factors that motivate employees, including both financial factors and non- z ht vb financial factors There exists a strong relationship between employees’ motivation and k jm organizational effectiveness The more motivated the employees are, the more gm contribution they bring, thus the more profitable and successful is the business om l.c The findings of the study revealed that financial factors plays the most important role in motivating employees at PVOIL petrol stations The findings are discussed in details in an Lu the research along with suggestions for PVOIL and managers/leaders at PVOIL in order n va to increase the employee’s motivational level ey t re Acknowledgements t to I would especially like to show my gratefulness and special thanks to my supervisor – ng Dr Nguyen Thi Mai Trang for all her continuous supports, advices and instructions hi ep through the process of researching and writing this thesis Without her enthusiastic help, w this thesis could not have been accomplished n lo I also would like to show my gratitude to ISB lecturers, my colleagues at work, my ad y th classmates at ISB for their valuable knowledge and continuous support I also send my ju sincere thankfulness to my family for their support and encouragement throughout my yi pl years of study n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re TABLE OF CONTENTS Executive summary t to ng Acknowledgements hi INTRODUCTION ep 1.1 Company background w 1.2 Company structure, mission and vision n lo PROBLEM CONTEXT ad 2.1 The labor productivity and motivation in Vietnam y th ju 2.2 The labor productivity at petrol stations owned by PVOIL yi 2.3 Situations of workers at petrol stations owned by PVOIL pl al PROBLEM VALIDATION 14 n ua 3.1 Payment and welfare policy 15 n va 3.2 Working condition and environment 17 ll fu 3.3 Promotion and career policy 18 oi m CAUSE - EFFECT MAP 19 CAUSE VALIDATION 20 nh at ALTERNATIVE SOLUTIONS 27 z 6.1.The first alternative solution: Welfare programmes for petrol stations employees 27 z vb jm ht 6.2.The second alternative solution: Fair payment policy 28 k 6.3.The third alternative solution: Long-time contribution recognition in payment policy 30 gm l.c ORGANIZATION OF ACTIONS 32 om CONCLUSION 35 an Lu SUPPORTING INFORMATION 36 APPENDICES 45 va REFERENCES 48 n ey t re LIST OF FIGURES Figure PVOIL organizational structure t to ng Figure Hertzberg's Two Factor Theory hi Figure Number of workers at petrol stations owned by PVOIL ep Figure Educational level of workers at petrol stations owned by PVOIL 10 w Figure Age classification of workers at PVOIL petrol stations in 2016 11 n lo Figure Working time for PVOIL of workers at petrol stations up to 2016 12 ad Figure Number of newly- recruited of workers at PVOIL petrol station 14 y th Figure Cause-effect map 19 ju yi Figure Self-evaluate the motivational level by employee 22 pl n ua al Figure 10 Factors affecting workers motivation 23-24 n va ll fu oi m LIST OF TABLES nh at Table Statistics petrol stations owned by PVOIL from 2008 to 2016 z z Table Labor productivity by industry from 2014 to 2016 vb jm ht Table Labor productivity of petroleum industry from 2014 to 2016 Table Statistics of market share and quantity of petrol stations in 2016 k gm Table Sales volume at petrol stations owned by Petrolimex and PVOIL in 2016 l.c Table Labor productivity at PVOIL and Petrolimex petrol stations om Table Average income of workers at petrol stations 13 an Lu Table Action plan to improve employee motivation 34 n va ey t re 1 INTRODUCTION 1.1 Company background t to PetroVietnam Oil Corporation (PVOIL) is a State-owned Enterprise, established in 2008 ng with five main functions: Crude Oil Import – Export, International Crude Oil Trading, hi ep Petroleum Products Trading in Domestic (both whole and retail) and International w Marketplaces, Petroleum Products Processing and Bio-fuel Processing and Distribution n lo PVOIL’s capital 550 million USD; turnover 2,5 billion USD Now, it ranks number ad ju y th among oil distributors in Vietnam with its market share is around 22% (the market is controlled by Petrolimex with 50% market share and Petrolimex is also the biggest yi pl competitor of PVOIL) ua al 1.2 Company structure, mission and vision n n va ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re Figure PVOIL organizational structure (Source: PVOIL) At present, PVOIL has more than 3.000 petrol stations, include above 500 COCO (Company Owned –Company Operated) petrol stations and more than 2.500 DODO t to (Dealer owned-Dealer Operated) petrol stations The number of employees is around ng hi 6.000, include 2.500 workers (direct labor force at petrol stations that PVOIL owned) ep and 3.500 staff officers w n Total quantity of petroleum distribution (via channel of wholesale to agents, business- lo ad to-business contracts (B2B) and retail sales) achieves 3,2 – 3,5 millions m3/ton per year y th With the mission “PVOIL consistently pursues valuable goals in life” and the vision ju yi “PVOIL is to become a leading brand name in Vietnam”, in the future, PVOIL aims to pl ua al expand its share of the domestic oil and petrol retail market from 22 percent to at least n 35 percent by 2020 through increasing number of petrol stations To achieve this target, va n Mr Cao Hoai Duong, General Director of PVOIL shared that: fu ll Sales retail through channel of petrol stations always play the most important role in our sales m oi strategy 75 percent total revenue of PVOIL come from retail sales PVOIL continues seeking nh at to increase its number of petrol stations nationwide, especially in small cities and rural areas z along with taking many solutions to increase the sales performance at petrol stations z 2010 2011 2012 2013 82 100 105 243 312 344 22% 5% 131% 28% 10% 2014 464 2015 2016 485 500 35% 5% 3% (Source: PVOIL) om l.c 2009 gm 2008 k Number of petrol stations % Growth jm ht vb Table Statistics petrol stations owned by PVOIL from 2008 to 2016 As can be seen from the Table above, the number of petrol stations owned by PVOIL an Lu increased year by year for the period 2008 – 2016 After years, the number of petrol the sustainable development for business ey petrol stations plays the most important role in bringing the highest profit and ensuring t re of petrol station nationwide because the retail sales of petroleum products to end-users at n va stations in 2016 is times bigger than in 2008 PVOIL focus on developing the number All the daily retail at petrol stations of PVOIL is undertaken by the direct labor workforce-workers They are front-line employees who contact first with the customers t to with their duty is selling products However, according to the statistics shown in the ng hi company’s report, the labor productivity of workers at petrol stations owned by PVOIL ep has a very poor performance compared with the labor productivity of its rival – w n Petrolimex lo ad Ofelia Robescu1 addressed that motivating employees became today an important y th objective for organizations that want to remain viable on the market today Motivation ju yi of human resources in the organization will bring extra performance to the manager that pl ua al hopes to reach the organization's goals n With 50 petrol stations based in Ho Chi Minh City (only 10% total number of PVOIL va n petrol stations nationwide), Ho Chi Minh City is one of the most important market in fu ll Vietnam for PVOIL where take account for more than 20% of its sales volume oi m nh nationwide PVOIL always has to face with severe competition from other big oil at companies in this key market Although the workload of workers at petrol stations in big z z ht vb city like Ho Chi Minh City often face with many difficulties than others in the remote jm area, such as: high work pressure due to the continuously sales activity, unhealthy k working environment, narrow working space, … but there’s seem to be no difference in gm l.c interests and benefits of these workers compared with other places Understanding the om important role of Ho Chi Minh city market as well as the role of retail sales at petrol an Lu station, in this thesis, the motivation of workers at petrol stations located in Ho Chi Minh ey labor productivity of workers at petrol stations owned by PVOIL t re what affected the motivation of workers will help to improve the sales performance and n va City center district owned by PVOIL will be the main objects of the study and to find PROBLEM CONTEXT 2.1 The labor productivity and motivation in Vietnam t to According to statistics form General Statistics Office of Vietnam, for the period from ng 2014 to 2015, the average growth rate of labor productivity is about 6,9 %/year In the hi ep three main sectors of the economy, Agriculture, forestry and fishery has the lowest labor w productivity, Industrial and construction has the highest labor productivity Within n lo Industrial and construction sector, the mining and quarrying has labor productivity 14 ad ju y th times bigger than the average labor productivity of sector Table Labor productivity by industry from 2014 to 2016 yi pl Unit: VND million/person 1549 n n va 33 113 120 ua al 2016 1696 ll 31 96 115 fu 2015 m 90 116 z 2015 1696 Services 90 96 113 Industrial and construction 116 115 120 Agriculture, forestry and fishing 29 31 z 2016 1549 Mining and quarrying 2014 1,683 at nh 29 1,683 oi 2014 jm ht vb 33 k gm (Source : General Statistics Office of Vietnam) l.c For petroleum industry in Vietnam, in recent years, petroleum industry always has the om highest contribution to GDP of Vietnam (take account for around 18% of GDP), thus the an Lu labor productivity of petroleum industry always take the leading position nationwide ey and $96.29/bbl in 2014), the revenue of petroleum industry in Vietnam (mainly come t re to 2016 (the oil price averaged $40.68 per barrel in 2016, down from $49.49/bbl in 2015 n va However, due to the negative effect from the fluctuation of the world oil price from 2014 36 t to ng INTERVIEW GUIDE Research objectives: To explore and identify the factors that affect workers’ motivation hi ep at PVOIL petrol station w Duration: 10-20 minutes n lo ad Method: In-depth interviews ju y th Interviewee: Interviews are conducted with two groups: yi - Group 1: officers at PVOIL head quarter pl ▪ 01 deputy sales manager in charge of system trading ua al n ▪ 01 deputy manager in charge of Human resources va n ▪ 01 deputy manager in charge of Safety-Quality management fu ll - Group 2: staffs at PVOIL’s petrol station located in HCMC (direct labor workforce): oi m ▪ 01 head of petroleum station at z z Overall discussion framework: nh ▪ 01 female staff of petroleum station 5-10 minutes om Group & a Lu 5-10 minutes n n va y te re th ▪ Cost Group & l.c ▪ Sample: select only samples in Ho Chi Minh City only gm ▪ Time: limited time to collect questionnaires Timing 2-3 minutes k Limitations of the Study Whom Group & jm Objectives To understand the current performance and complaints of workers at petrol stations Explore the problem To explore the main factors that and identify the affect workers’ motivation at main reason PVOIL’s petrol stations The solution To find out suggested solutions for improving workers’ motivation ht vb Key sessions Overall background 37 t to Detail interview content: ng hi Group Group x x ep Question Please introduce something about yourself (name, age, job, …)? Could you tell me what happen to the performance of workers at PVOIL’s petrol station? Have they got any complaints? If yes, what they are? What factors affect workers’ motivation? What solutions that PVOIL has currently taken to improve the workers’ motivation at PVOIL’s petrol station? How you feel about your current job? Have you got any complaints? If yes, what they are? What you wish PVOIL to improve your working motivation? • Interview 1: w n x lo ad x y th x ju yi x pl al n ua x n va - Interviewer: Nguyen Cao Duc ll fu at nh ▪ Age: 36 oi m - Interviewee: Ms Le Quynh Trang (Code: 1A, Group 1) ▪ Job: Deputy sales manager in charge of system trading z z ht vb Nguyen Cao Duc: Please introduce something about yourself? jm Le Quynh Trang: My full name is Le Quynh Trang, 36 years old I am now the Deputy k sales manager in charge of system trading at PVOIL I’ve been working for this l.c gm Corporation since 2009 om Nguyen Cao Duc: Could you tell me what happen to the performance of workers at n a Lu PVOIL’s petrol station? Have they got any complaints? If yes, what they are? y for 66%) have negative profit (sales volume under 100 m3/month Our average labor te re by PVOIL are not as our expectation recently More than 300 petrol stations (take account n va Le Quynh Trang: The sales volume and productivity of workers at petrol station owned th productivity just take about 55% of Petrolimex We see that workers are now lacking of motivation, thus lead to the poor performance at petrol stations We had a contact with 38 t to workers to identify what happened and received some complaints They said that they lack ng hi of clear and equal opportunity for promotion Some had worked for PVOIL for a long time ep for the same position but they not know clearly about necessary conditions for how to w promote Another problem is that sometimes they feel tired due to continuous working n lo ad time, no Sunday and holidays They hard to balance between work and life ju y th Nguyen Cao Duc: What factors affect workers’ motivation? yi Le Quynh Trang: As mentioned above, I think characteristic of job at petrol station and pl ua al the promotion and career development are factors affect workers’ motivation n Nguyen Cao Duc: What solutions that PVOIL has currently taken to improve the workers’ va n motivation at PVOIL’s petrol station? fu ll Le Quynh Trang: We will launch competition program among petrol stations in order to m oi reward petrol station and individuals who reach high sales volume We will develop nh at programs to promote all titles at petrol station and build programs for career development z z of each title PVOIL will give opportunity to every workers for using their abilities and n a Lu ▪ Job: deputy manager in charge of Human resources om ▪ Age: 43 l.c - Interviewee: Mrs Nguyen Thi Hong Nhung (Code: 1B, Group 1) gm - Interviewer: Nguyen Cao Duc k • Interview 2: jm ht vb skills th Corporation since 2008 y now the deputy manager in charge of Human resources I’ve been working for this te re Nguyen Thi Hong Nhung: My full name is Nguyen Thi Hong Nhung, 43 years old I am n va Nguyen Cao Duc: Please introduce something about yourself? 39 t to Nguyen Cao Duc: Could you tell me what happen to the performance of workers at ng hi PVOIL’s petrol station? Have they got any complaints? If yes, what they are? ep Nguyen Thi Hong Nhung: In some recent contact with workers at petrol station, we w receive many opinions about the payment policy of PVOIL For every employees, salary n lo ad and welfare policy are always top concern because this is their only income Employees y th will easily have intention to neglect their duties, to have no motivation oven to quit their ju yi job if their wages are not enough to cover their daily expenditure and support their family pl ua al Workers said that the current payment policy is unfair Despite the sales output, workers n receive the same payment Besides, PVOIL not concern and recognize about the long- va n time contribution of workers when setting up salary policy It means that same wages for fu ll the same position regardless of contribution recognition They also recommend that PVOIL m oi should consider the payment because the salary package is not competitive if compared at nh with outsider in the same industry z z Nguyen Cao Duc: So, what factors affect workers’ motivation? vb k affecting workers’ motivation jm ht Nguyen Thi Hong Nhung: I thinks that payment policy is now one of the main factors gm Nguyen Cao Duc: What solutions that PVOIL has currently taken to improve the workers’ om l.c motivation at PVOIL’s petrol station? a Lu Nguyen Thi Hong Nhung: Based on the comments of workers, we will set up fair n compensation and benefits policy Our policy will be “suitability”, not “the best” Besides, th place y educational level will be sent more often on training to achieved the required skills at work te re background to achieve the common required level of service quality Workers with low n va Board of Directors is now paying more attention to employees with less educational 40 t to • Interview 3: ng hi - Interviewer: Nguyen Cao Duc ep - Interviewee: Mr Truong Thanh Long (Code: 1C, Group 1) w ▪ Age: 34 n lo ad ▪ Job: Deputy manager in charge of Safety-Quality management y th Nguyen Cao Duc: Please introduce something about yourself? ju yi Truong Thanh Long: Hi, my name is Truong Thanh Long, 34 years old I am the Deputy pl ua al sales manager in charge of Deputy sales manager in charge of Safety-Quality management n I’ve been working here for years va n Nguyen Cao Duc: Could you tell me what happen to the performance of workers at fu ll PVOIL’s petrol station? Have they got any complaints? If yes, what they are? oi m Truong Thanh Long: Many workers at petrol stations said that they have to suffer nh at unhealthy working environment everyday Petroleum products are categorized as a z z dangerous and toxic products and have many negative effect on human health For vb jm ht petroleum company, there is clear and heavy affection of working condition and k environment on employees’ health and thus, their motivation For a new worker at petrol gm station These elements have negative effect on the performance of workers at PVOIL’s om a Lu Nguyen Cao Duc: What factors affect workers’ motivation? l.c petrol station n Truong Thanh Long: In my opinion, working condition and environment are factors y th motivation at PVOIL’s petrol station? te re Nguyen Cao Duc: What solutions that PVOIL has currently taken to improve the workers’ n va affecting workers’ motivation 41 t to Truong Thanh Long: In the future, we plan to provide healthy safe working condition ng hi for workers at petrol station Besides, we will build occupational health and safety program ep for workers w • Interview 4: n lo ad - Interviewer: Nguyen Cao Duc y th - Interviewee: Mr Luu Xuan Bac (Code: 2A, Group 2) ju yi ▪ Age: 42 pl ua al ▪ Job: Head at PVOIL petrol station located in HCMC n Nguyen Cao Duc: Please introduce something about yourself? va n Luu Xuan Bac: My name is Luu Xuan Bac, 42 years old I am now the Head at PVOIL fu ll petrol station located in HCMC I’ve been working here for more than years oi m Nguyen Cao Duc: How you feel about your current job? Have you got any complaints? at nh If yes, what they are? z z Luu Xuan Bac: Our working hour is from 6AM to 10PM Our staff include people with vb jm ht shift, the average sales volume is around 100 m3/month This is a quite a hard work k because we have to work seven days a week, including Sundays and holidays All the time gm we have to work at the petrol station, we rarely have opportunity engaged in company om l.c activities a Lu Nguyen Cao Duc: What you wish PVOIL to improve your working motivation? n Luu Xuan Bac: Company should create opportunities for workers like us to engage in th - Interviewer: Nguyen Cao Duc y • Interview 5: te re colleagues n va company activities to build corporate culture and strengthen the relationship with our 42 t to - Interviewee: Ms Vu Anh Tho (Code: 2B, Group 2) ng hi ▪ Age: 37 ep ▪ Job: Staff at PVOIL petrol station located in HCMC w Nguyen Cao Duc: Please introduce something about yourself? n lo ad Vu Anh Tho: My name is Vu Anh Tho, 37 years old I am the worker at PVOIL petrol ju y th station located in HCMC I’ve been working here for years yi Nguyen Cao Duc: How you feel about your current job? Have you got any complaints? pl ua al If yes, what they are? n Vu Anh Tho: The problem is that, the new payment policy make my salary lower than in va n the past I receive nothing just the salary In the past, my salary was consider to raise after fu ll two or three years, but now, the this will not happen It is very difficult for me to support m oi my family I feel so disappointed and lack of motivation nh at We have to work day by day, including Sunday and Holidays As a woman, I feel that I z z have a very little time for may family I have to ask my mother to take care my newly-born vb day I feel it’s hard to balance between my family and my work k jm ht baby for me during my working time My time at workplace nearly make up my whole gm According to normal rule in PVOIL, I know one thing that, only male workers have l.c om opportunity to become head of petrol station Regardless my effort or contribution, I still n no clear promotion path for workers like me a Lu only a staff because I am a woman Beside, I am just only the temporary worker, there is y th Nguyen Cao Duc: What you wish PVOIL to improve your working motivation? te re part in welfare policy such as: yearly vacation n va Besides, I also don’t understand why a direct labor force like me never had chance to take 43 t to Vu Anh Tho: PVOIL should consider salary policy, promotion policy and have welfare ng hi policy for direct labor force like us to have opportunity to engage in yearly vacation of ep company w n lo ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th n lo ad y th 44 ju yi pl • Data collected after the initial interview with group of people as follow: 1B - Unfair salary payment - No contribution recognition - No competitive salary oi m ll Findings 1C 2A 2B - Suffer unhealthy working environment at nh z - Payment policy z vb - Set up compensation fair and benefits policy - Pay attention to and train employees with less educational background - Working condition and environment ht k om l.c gm - Launch competition program between employees and petrol stations - Develop programs to promote workers - Provide healthy safe working condition - Build occupational health and safety program jm an Lu - High stress work - No engage in company activities va n y te re - Build corporate culture - No yearly vacation - Low salary - No work-life balance - Provide yearly vacation - Consider salary policy and promotion policy ac th fu Feeling about current job and complaints of workers Wish to improve working motivation n 1A - Lacking of motivation, poor performance - Lack of clear and equal opportunity for promotion - Not work-life balance - Job characteristic - Promotion and career development va Factors affect workers’ motivation Solutions to improve the workers’ motivation at PVOIL’s petrol station n Performance of workers at PVOIL’s petrol station and their complaints ua al Question si eg cd jg hg 45 t to Appendices ng Survey questionnaire hi ep Question How you evaluate the motivational level of yourself regarding your current job? Highest High Average Low Lowest motivation level motivation level motivation motivation level motivation level (1) (2) (3) (4) (5) w n lo ad y th ju Question Show your opinion to these following factors affecting workers motivation following statements (please mark X your choice) Strongly agree Agree Neutral Disagree Strongly disagree (1) (2) (3) (4) (5) Good work-life balance/Flexible work schedule Job security and stability Working condition and environment Learning and development Career progression Salary, benefit and bonus Recognition Continuous learning and development opportunities Company policy and administration are set clearly and fairly yi pl n ua al n va ll fu oi m at nh z z k jm ht vb Level of experience  < year  – years  – years  – years  More than years th  Worker at petrol station  Manager at petrol station y Job title te re  < 22 years  22 – < 35 years  35 – < 50 years  > 50 years n Age:  Female va  Male n Sex: a Lu om Name: l.c gm Personal information 46 t to Location ng hi We commit that all your answer related to this questionnaire will be confidential! ep Thank you very much for your kind corporation! w Date of interview: _ Time of interview: _ n Place of interview: _ lo Nguyen Cao Duc ad Interviewer y th ju yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 47 t to Data collected from the survey ng hi ep Question Self-evaluate the motivational level by employee 0 12 Highest motivation level High motivation level Average motivation Low motivation level Lowest motivation level w n lo ad ju y th Total Answer option yi Ms Ms Mr Ms Mr Mr Ms Mr Ms Tho Mai Duong Ngoc Dung Son Tien Thai Anh X1 n Mr Thu Ms Trinh X2 X3 X10 X11 X12 X4 X5 X6 X7 X8 X9 3 3 3 3 3 4 3 4 3 3 n va 2 3 3 3 vb 5 3 4 ht 3 1 2 1 1 2 2 1 1 4 3 3 2 2 2 a Lu ll fu oi m at nh z z k jm gm 2 l.c om n Good work-life balance/Flexible work schedule Job security and stability Working condition and environment Learning and development Career progression Salary, benefit and bonus Recognition Continuous learning and development opportunities Company policy and administration are set clearly and fairly Bar Y value Mr Bac ua Bar categories al pl Question n va y te re th 48 t to References ng employees performance in Organizations Valahian Journal of Economic ep Ofelia Robescu and Alina Georgiana Iancu The effects of motivation on hi w n lo Vietnam National Productivity Institute Vietnam Productivity Report 2015 ad Studies 2016; 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