(Luận văn) solutions to enhance the level of employee recognition in coca cola southeast asia

Ho Chi Minh City – Year 2015 t to ng UNIVERSITY OF ECONOMICS HO CHI MINH CITY hi ep International School of Business w n lo ad ju y th yi pl Nguyen Thi Thanh Tuyen n ua al n va Solutions to Enhance the Level of Employee Recognition in Coca-Cola Southeast Asia ll fu oi m at nh z z k jm ht vb om l.c gm ID: 22130093 an Lu n va th Dr Tran Ha Minh Quan ey SUPERVISOR: Dr Nguyen Thi Nguyet Que t re MASTER OF BUSINESS ADMINISTRATION t to Table of contents ng hi ep ACKNOWLEDGMENT w n Executive Summary lo ad Chapter 1: Problem Identification Introduction of the company 1.2 Background of the business problem 1.3 Justification of the problem existence 11 1.4 Justification of the problem importance 15 1.5 Potential causes of the problem 18 ju y th 1.1 yi pl n ua al va Chapter 2: The alternative solutions 22 Justification of the potential causes 22 2.2 Proposed alternative solutions 26 n 2.1 ll fu m oi Chapter 3: The Selected Solution 33 Explanation for selected solutions 33 3.2 Change Plan 40 at nh 3.1 z z Chapter 4: Conclusion 47 vb Chapter 5: Supporting Information 48 ht Supporting information of business problem background justification 48 5.2 Supporting information of problem existence justification 50 5.3 Supporting information of problem importance justification 56 5.4 Supporting information of potential causes 57 5.5 Supporting information of potential causes justification 59 5.6 Supporting information of proposed solutions 67 k jm 5.1 om l.c gm an Lu References 69 n va ey t re th t to ng List of Tables hi ep Table 1: Turnover Rate Comparison from 2013-2015 Table 2: Turnover Rate Comparison from 2013-2015 in Coca and Pepsi 177 w n Table 3: Employee performance in Q1 and Q2 at Coca-Cola and Pepsi 188 lo Table 4: A comparison of alternative solutions 333 ad Table 5: Action timeline and objectives 422 y th ju Table 6: Questionnaire items and references for problem existence justification 511 yi Table 7: Interviewee’s Answers for problem justification 533 pl Table 8: Potential causes and definition 588 al n ua Table 9: Questionnaire items and references for potential cause justification (employees) 600 n va Table 10: Employee’s answers for potential cause justification 611 ll fu Table 11: List of questions and answers in justifying the potential causes (manager) 655 oi m nh at List of Figures z z ht vb Figure 1: Reasons for employees’ resignation in 2015 10 jm Figure 2: A cause-and-effect map of low employee recognition 21 k Figure 3: Final Cause –Effect Map 26 om l.c gm an Lu n va ey t re th t to ACKNOWLEDGMENT ng hi I am heartily thankful to my supervisors, Dr Nguyen Thi Nguyet Que and Dr Tran ep Ha Minh Quan, whose encouragement, guidance and support from the initial to the final w n level enabled me to develop an understanding of problems, solutions and structure At the lo ad beginning of the thesis, I had met misunderstanding about the real problems, their y th ju outcome and factors, Ms Que and Mr Quan instructed me to come over the difficulties, yi pl helped me understand the thesis structures, and edited flaws Therefore, I deeply al n ua appreciate their contribution va n Lastly, I offer my regards and blessings to all my colleagues, friends and ll fu oi m classmates who supported me in any respect during the completion of the thesis at nh z z k jm ht vb om l.c gm an Lu n va ey t re th t to Executive Summary ng hi ep On October 2015, the author got the chance to talk to Coca-Cola’s General Manager in their quarterly meeting, in which he raised some problems whom company w n lo had to face The employee’s turnover rate drastically increased, impacting to the business ad ju y th and raising a large amount of recruitment cost in the company To find out the real problem of recognition and its causes, and draw the effective solutions for this issue, the yi pl ua al author closely works with human resource department and management team, besides, n make interviews with employees and heads of departments to deeply understand the va n company situation and acquire their view points, combining interview data, literature ll fu oi m reviews, and company sources to buttress the argument nh This thesis includes five chapters, in each chapter; the author analyses collected at z data, strengthens the argument by literature, and emphasizes the problem’s consequences z vb jm ht and real causes, and seeks for the effective solutions that are applicable to company k problems om l.c gm an Lu n va ey t re th t to Chapter 1: Problem Identification ng hi ep This chapter includes six sections In the first section, the author makes introduction that inform company’s general information The following chapter w n lo convincingly shows an interview data that the author makes with employer and human ad ju y th resource manager to understand the basic background of the business problem The third and fourth sections are the justification of problem existence, and the justification of yi pl ua al problem importance, which clearly indicate the problem’s existence and its’ outcome n Then, the author lists down the potential causes of the problem that closely bases the va n literature in the fifth section Finally, the cause and effect map exhibits the whole picture ll fu oi m of the correlation among potential causes, real problems and their outcome nh at 1.1 Introduction of the company z z The representative office of Coca-Cola has been established in 1994 with ht vb jm responsibilities: to act as a liaison office, conduct market surveys, carry out activities to k stimulate, and establish co-operation projects of Coca-Cola Southeast Asia, Inc in gm om l.c Vietnam, act as a communicative office, execute market research, and promotion activities, and run the marketing campaign and stimulate the implementation of an Lu contracts and agreements in the areas of commerce and investment signed between ey th t re offers hundreds of brands, including soft drinks, fruit juices, sports drink and other n Vietnam Law leader in the beverage industry As a global the Coca-Cola Company va Coca-Cola Southeast Asia, Inc and Vietnamese Co-operations in compliance with t to beverage in Vietnam particularly and in more than two hundreds countries in general ng hi Coca-Cola is meeting the tastes of people around the globe ep In January 2015, the company runs the organizational restructuring to cut cost, w n downsize the workforce and open new positions matching to each employee’s lo ad capabilities Besides, many unnecessary positions had been cut to ensure the long term y th ju development, reaching to company vision A haft of employees was abruptly yi pl terminated in this period; some people were rotated to the new roles or to the new ua al working locations After restructuring, there are thirty five employees (ten temporary n va n employees and twenty five permanent employees) under seven departments, including: fu ll Human resource, Knowledge and Insights, Finance, Commercial and Operations, oi m at nh Technical, PAC, and Marketing z z 1.2 Background of the business problem vb jm ht In this step, the author applied qualitative method through interviews, and k collected data from human resource reports Data resembled, analyzed and relied on gm l.c the answers whose interviewees are general manager and human resource manager om (section 5.1 in supporting information chapter) and reports were provided from Human an Lu resource department (table 1: turnover Rate comparison from 2013-2015, figure 1: n va reasons for employees’ resignation in 2015) in this section th years in general He also raised the difficulties that company has met since January ey performance at Coca- Cola Vietnam in nine months in 2015 particularly and in three t re In the quarterly meeting, the general manager announced the business t to 2015 So, the author made an interview with him and human resource manager, who ng hi deeply understand about company situation The answers have been briefly described in ep the section 5.1 of supporting information chapter Firstly, the general manager was w n asked about turnover rate, which had been stated as a main concern in his speaking lo ad General Manager confirmed that since 2014, crisis global economy in general and in y th ju Vietnam in particular has attacked to business performance in Coca- Cola Vietnam, yi pl many compensation packages have been cut to ensure the profit in each division through al n ua the interview For two years, the award and promotion have been limited Besides, after n va organizational restructuring, many positions have been cut, and many employees’ job fu ll tasks have doubled, workload has been over Many employees have worked over time m oi and under the pressure to ensure the project run smoothly and match with project nh at timeline Many of them required to add more assistant positions, causing the cost would z z be over budget for 2015 Therefore, General Manager had to reject the request, making ht vb k jm employees unhappy with his decision l.c gm According to the Table of Turnover Rate Comparison that is provided from Human Resource Department, the turnover rate increases 8%, comparing to in 2014, om an Lu increases 13.7%, comparing to 2013 So, the cost for recruitment process and training courses for new employees strongly increased to 53,690 USD in 2015 (table 1) In the ey t re causing to the recruitment process always takes time to select the suitable candidates n va office, the major of staffs in office who decided to quit their jobs are managers, th t to and consequently this process impacts to the current employees who have to cover the ng hi tasks whose staffs were already left ep Table 1: Turnover Rate Comparison from 2013-2015 w n lo ad Turnover Rate (%) ju y th Years Recruitment and Training turnover (%) Cost (USD) yi 6.8% pl 2013 Manager 27,860 65% % 82% 38,725 al 45% (%)Rate 12.5% 2015 20.5% n ua 2014 n va 53,690 ll fu Source: Human Resource Report in 2015 (Coca-Cola Southeast Asia) oi m According to the pie chart of potential reasons (figure 1), all former employees at nh who had been interviewed with human resource department before leaving, Human z z ht vb Resource Manager stated that 45% of them feel devalued and unrecognized from their k jm managers Because when the job got done, they did not get any compliments from their l.c gm manager, even they did not understand the difficulties that employees had been meeting at Some of employees assert that after so many years, they were not promoted because om of the lack of recognition and understanding from their managers Moreover, the an Lu conflicts partly rose from the way that their mangers gave feedback to their concern in ey th t re better job offers from other companies in the same industries, such as: Nestle, Dutch n 2015, there are more than 30% employees who left Coca-Cola because they got the va hard tasks As the figure shows in the pie chart of employees’ resignation reasons in t to lady, and Unilever 17% interviewees implied that over workload is main reason for ng hi resignation Besides, headcount freeze is established to limit cost, so company cannot ep offer the permanent positions to temporary employees who work for Coca-Cola more w n than five years So, temporary employees feel stress about their career paths when they lo ad are not extended their contracts as permanent employees They not know whether y th ju their contracts can be renewed when it expires, they can sign a new contract or not yi pl There are four reasons, such as: low employee recognition, over workload, other job al n ua offers, and job security which are considered as problems in Coca-Cola However, n va there are limitation about timing and budget to plan for the solutions In the interview fu ll with Human resource department, more than 45% of employees confirmed that m oi recognition is the main reason pushing them to quit the job The author, general nh at manager, and human resource manager discussed and decided low recognition is key z z problem needs to be immediately solved to improve working spirit in the long term k jm ht vb om l.c gm an Lu n va ey t re th t to (1993) ng hi included as part of the employment package Pergamit & Veum Promotions Promotions involved no change in position or ep (1999) duties, but were simply an upgrade of the current w n position lo ad ju y th yi 5.5 Supporting information of potential causes justification pl ua al After justifying the potential causes impact to the recognition level with n literature’s support, the author continue to make an interview with employees to find out va n the real potential causes effect to the recognition level in the company Before the ll fu oi m interview, the author explains to each interviewee about the definition of each potential at nh causes and recognition basing measurement scale The question are developed on the z measurement scale of recognition and five potential cause in the research of Kopelman, z vb jm ht Richard, Gardberg & Brandwein in 2011 k Rewards: cash payment, working condition, compensation, incentive awards and gm om l.c performance awards Feedback: Formal feedback (company evaluation form, email) and informal an Lu feedback (conversation) n va ey t re Intrinsic motivation: when you something because you enjoy it or find it interesting th Benefits: company outing trip, transportation, gifts, vouchers 59 t to Promotions: an upgrade of the current position ng hi ep The questions were asked and answers in table (section 5.5) were collected from the employees about those term The questions ca exploits employees’ view about w n potential causes The author directly asked employees about causes that they think are the lo ad most important and raise the reasons for each answers Basing on the answers, the author y th ju realizes which one is a real problem in the company Besides, the author made an yi pl interview with management team to understand their opinions about the whole picture ua al The questions in table (section 5.5) are developed from the research of Kopelman, n va n Richard, Gardberg & Brandwein in 2011 ll fu oi m Table 9: Questionnaire items and references for potential cause justification nh (employees) at Measurement items References z vb How satisfied are you with your current salary? Kopelman, Richard, How you feel about the fairness of the wages om an Lu Your co-worker wage Brandwein (2011) l.c The tasks you Gardberg & gm system at your place compare to: k jm ht Rewards z Construct va Other people working in the same field? n comments from you manager or co-worker? Gardberg & 60 th Kopelman, Richard, ey When you finish your job, you often get the t re Feedback t to Brandwein (2011) ng hi Kopelman, Richard, performing at your best? Gardberg & Do you think your work fulfills your basic needs? Brandwein (2011) How much you enjoy working every day and w ep Intrinsic n Motivation lo ad y th ju Would you say that it is usually nice to come to yi pl work? al Are you happy with your health benefits? Kopelman, Richard, n ua Benefits Gardberg & n va How you find the company’s benefits compared fu to other companies’ benefit in the industry? ll Brandwein (2011) m How you feel about the possibilities to be Kopelman, Richard, oi Promotion nh Gardberg & at promoted in your work? z z k jm ht vb Brandwein (2011) om l.c Table 10: Employee’s answers for potential cause justification gm The author analyzes the problem basing on the table below: an Lu Feedback va In my point of view, manager feedback and support impact to permanent employee my performance and commitment It enhances my working n Brand Manager – th 61 ey t re spirit The straightforward feedback from my manager can help t to me improve the weakness and develop the strength Besides, all ng hi the effort that releases the good result always expect to the ep rewards from the organization to help employees to know what w n they really strive for lo ad y th Brand Assistant – ju The timely feedback from my supervisor helps me solve the yi pl permanent employee issue accordingly, improve the performance Especially in n ua al Marketing department, I and my manager have to daily n va communicate to run the media project smoothly Her feedback fu ll helps me recognize the project drawbacks and then I can m oi urgently contact to the agencies to fix the problem However, nh at sometimes, the feedback comes late, or even my manager did z z ht vb not give any feedbacks I feel very disappointed, the feeling k jm makes me confused about what I should when I got stuck in l.c gm the mess So I think that timely and motivated feedbacks play important role in making us feel appreciated ” om an Lu My former manager always assigns the urgent hard tasks for Operations Manager – me He even did not support me to complete it So I think that permanent employee support and feedback make employee aware whether we are n va Commercial and ey t re th recognized 62 t to ng hi Office Manager – The company should improve their reward system Because, for ep the long time, we even try our best, but have not gotten any permanent employee w n reward as recognition from the company The rewards help us lo ad feel that our contribution has been appreciated In company, y th ju every employee who has work for company for years will yi pl receive a gift like: a watch, suitcases or necklaces But it will be n ua al better if we can get the reward every three years n va To me, the promotion is not quite important, because job title fu ll not play a key role in many cases oi m nh I strongly believe that straightforward feedback play an Environment Manager – important role in inspiring us to work hard and contribute for permanent employee the long term development of Company It directly reflects the at Quality, Safety and z z k jm ht vb l.c gm manager recognition to us In recent years, the salary just increases 10-15% annually as a support from company for the om inflation So, position increase or promotion are important an Lu factors that can show the recognition n va ey Rewards are is key factor effects to employee recognition” t re Knowledge & Insights th Specialist – former 63 t to employee ng hi ep Recognition from line manager is very significant, because Finance and procurement w manager directly evaluates my performance If I not receive n assistant- temporary lo ad employee the recognition from managers, all my efforts become to be y th ju meaningless So, if the good feedback make me feel recognized, yi pl I can acknowledge that my contribution behind has been n ua al appreciated Reward is the gift that I get in hand after the effort n va fu Benefits, feedback are the causes of the low recognition in the ll Management trainee oi m company at nh z z Manager directly evaluates our performance and our salary employee increase rate depends on the performance result from manager k jm ht vb PAC specialist- former l.c gm If we not get the useful feedback, how we can to improve ourselves? So, my former manager did not give any feedback to om my concerns He emotionally evaluated team member It is not an Lu fair to everyone The majority of rewards are depend on the n va perform valuation results ey t re I have worked for years, my salary increased 15 % every 64 th IT manager – temporary year However, there no reward or certificates has been t to employee ng hi received to recognize employee contributions My jobs become ep routine, which not come from rewards w n lo ad y th After justifying the existing potential causes, the author made an interview with ju management team to make sure the causes that employees stated, are existing in Coca- yi pl Cola n ua al n va Table 11: List of questions and answers in justifying the potential causes (manager) References: Kopelman, Richard, Gardberg & Brandwein Do you think that you have (2011) ll fu Questions: oi m nh at provided timely feedbacks to z z your employees? vb jm ht Do you think that our reward k system is fair to all gm om l.c employees? an Lu I always give appropriate feedbacks to employees But the manager international company always requires employees to be n va Indochina Marketing 65 th wait for my advices or guides? In my point of view, the ey t re proactive, they should be active to solve the issues rather than t to promotion system is quite good Because I have worked for ng hi Coca-Cola since years ago as a brand assistant, and now I ep have promoted to Indochina Marketing Manager The w n company always gives likelihood to potential employees to be lo ad promoted and supported y th ju Recently, we not have budget for rewarding So, it is true to yi pl say that reward system is quite poor here n ua al I think that feedback and motivation are key factors to improve Finance Manager employees’ performance So, I always contribute the good and n va Indochina Commercial ll fu m oi bad comments on employees’ performance every quarter I am nh at quite happy with the promotion system here Because they z z ht vb always give a chance to employees a self-decision The reward Technical Manager om l.c gm cannot effort so many policies k jm system has changed in recent year The financial budget In my team, all members are experienced employees So they an Lu have enough experiences and power to come over the difficult n va situation without my helps But I think company should 66 th company has rented for me is quite small and faraway from ey t re improve expatriates’ benefits packages The apartment, which t to city centers ng hi We not have the policy to reward for outstanding employees ep this year w n lo ad ju y th 5.6 Supporting information of proposed solutions yi Finally, the author learns from literature reviews for the solutions that can limit the pl al n ua consequences of the causes The proposed solutions depend on the total cost, timing, n va participant and company policy to make sure the solutions are applicable to company ll fu situation, and effectively practice in the long term (Table in section 3.1) oi m Feedback-Friendly Culture at nh z According to Baker, Perreault, Reid & Blanchard (2013), take feedback to the new z jm ht vb level: The Benefits of Feedback-Friendly Culture The culture provides an organization with a shared set of values, rules and regulations for how to behave and it creates an k l.c gm identity for its members that is dynamic and can be customized om 360 Degree feedback an Lu Robertson (2008) indicated that a 360 degree feedback report is a way for th 67 ey manager t re fullest potential The organization is asking for their perspective on the behavior of their n organizations where coaching is viewed as a way to help employees develop to their va employees to learn how they are perceived by direct reports, colleagues, managers, In t to (Garavan, Morley & Flynn, 1997) presented a 360 degree feedback can help to ng hi create better working relationships within the organization and improves the ability of ep people to work in teams w n lo Cash bonus ad y th Organizations should use cash bonus to reward employees for exemplary ju yi performance that is if they have performed higher or exceed their set targets, this hence pl al n ua makes 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