Comparing the human resource management model of hung dat leather shoes company with another one of trang bom rubber platation

HO C1fI MINH CITY ONlY£RSITY Of fOR£IGN LANGOAG£S AND INfORMA nON T£CHNOLOGY SCHOOL : FOREIGN LANGUAGES COURSE : BUSINESS ADMINISTRATION -* - GRADUATION PAPER COMPARING THE HUMAN RESOURCE MANAGEMENT MODEL OF HUNG DAT LEATHER SHOES COMPANY WITH ANOTHER ONE OF TRANG BOM RUBBER PLATATION Advisor : Dr.-lug DANG MINH TRANG Student : PHAM NGUYEN THAI HUY Class : KA0002 Student number: 0071318 TV Dgi H9C Huflit 1111111111111111111111111111 101000490 , "-HoChi Minh City, June 2004 - HO CHI MINH CITY UNIVERSITY Of fORUGN LANGUAGES AND INfORMA nON TECHNOLOGY SCHOOL : FOREIGN LANGUAGES COURSE : BUSINESS ADMINISTRATION' -* - 6RADUATION PAP£R COMPARING TIlE IIUMAN RESOURCE MANAGEMENT MODEL OF IIUNG DAT LEATIIER SIIOES COMPANY WITII ANOTIIER ONE OF TRANG BOM RUBBER PLATATION Advisor : Dr.-lug DANG MINH TRANG Student : PHAM NGUYEN THAI HUY Class : KA0002 -Ho Chi Minh City, June 2004 - SnH !Vlf1 uaSnfiN UlvlfJ 81NJWJ9JIAtONHOr ,'- CONTENTS Acknowledgements A.INTROD VCTI N page I 'Rationale page I.l.Practicality page I.2.Academic page II The samples of the research page III The scope and the limitation of the research page IV Methods page B.BO DY page Chapter I General Model of Human Resource Management I Definition of Management and Human Resource Management page I.l.Definition of Management page I.2.Definition of Human Resource Management page II Human Resource Management functions page m General model of Human Resource Management page IlI.l.Human Resource planning page m.2.Recruitment page 11 and Selection IlI.2.1.Recruitment page 11 IlI.2.1.1.Definition of Recruitment page 11 IlI.2.1.2.Source of Recruitment page 12 m.2 1.2 I.Intemal recruitment page 12 IlI.2.1.2.2.Extemal recruitment page 13 III 2.2.Selection page 15 IlI.3 Orientation/Socialization page 18 IlI.4.Performance appraisal page 19 IlI.5.Training and Development page 21 IlI.6 Compensation page 24 III 7.Motivation page 26 I1L8.Promotion and Retaining page 28 III 8.I.Promotion page 28 III 8.2.Retaining page 29 III 9.Punishment page 30 Chapter II Human Resource Management models of Hung Dat Leather Shoes Company and Trang Born Rubber Plantation A Hung Dat Leather Shoes Company page 32 LThe history of Hung Dat company page 32 I1.Human resource management model of Hung Dat company page 34 ILI.Hum~n resource planning page 34 IL2.Recruitment and Selection page 34 IL2.I.Recruitment page 35 IL2.2.Selection page 35 IL3.0rientation page 37 I1A.Performance appraisal page 37 I1.5.Compensation page 38 IL6.Punishment page 39 B Trang Bom Rubber Plantation page 39 LThe history of Trang Born Plantation page 39 II Human resource management model of Trang Born Plantation page 43 II.l.Human resource planning page 43 I1.2.Recruitment and Selection page 43 11.2.I.Recruitment page 43 IL2.2.Selection page 44 IL2.2.I.Normal employee selection page 44 IL2.2.2.Manageriallevels page 44 selection 11.3.Socialization page 45 IL4.Performance appraisaL page 45 11.5.Compensation page 46 II.6.Promotion page 48 II 7.Punishment page 48 Chapter III Comparing the two models I Some strengths and weaknesses of Hung Dat model page 50 I.l.Strengths page 50 1.2.Weaknesses page 51 II Some strengths and weaknesses of Trang Born plantation model page 52 II.l.Strengths page 52 11.2.Weaknesses page 53 III Some recommendations page 54 C CON CL USI ON page 56 I Results page 57 II Conclusion page 59 D REFERENCES page 60 Class: KA0002 Graduation Paper Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -1- Class: KA0002 Graduation Paper I.Rationale I.I.Practicality The economy is always the key factor of a country Nowadays, coupling with the continuous development of the global economy, Vietnamese economy has been really changed And when the tariffs and the trade barriers among countries not exist, the most important factor of an enterprise is management system Men, Machines, Materials, and Methods (4Ms) are four factors determining the success or the failure of a business, and Men is the primary factor influencing the rest of another ones How does a company has to to take advantage of this important source? That question is always raised to one company from the first time of establishing to the time when it gains stability and development With the mixed economy controlled by the Government, Vietnam has been intergrating into the global economy, especially with the ASEAN, that is the reason why the quantity of enterprises have raised strongly However, Whether have managers already mastered the ways to manage their personnel or not? Once managers can answer the question, he/she will find the right methods to help his/her business exist and develop Human is a source and human can everything, but human needs to be managed following a specific model because human as well as enterprise is the cell of society Of course, company or factory has its own model of managing human resource so there will be enterprises gaining success, on the other hand, there will be enterprises suffering from failure It proves that human resource management is the determining factor, the center of economic activities Basing on my limited knowledge, I want to find out the general model of human resource management and to analyze deeply two kinds of enterprise so that we can discover the problems of these kinds, and from the results I hope to contribute my research to build a better human resource management model for the Southeast area enterprises in general and Dong Nai enterprises in separated Advisor: Dr,-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -2- Class: KA0002 Graduation Paper I.2.Academic Knowledge from lectures and documents (books, newspapers, magazines, ) is only the theory that every student must master However, it is not correct when we say that we can apply completely theory into practice To apply theory into practice, one has to understand clearly theory, analyze carefully the matters on theoretical basis, develop that basis, compare theory with practice, and then apply into practice So is my research The knowledge that I have received from the lecturers is only the theory The practice shows that we can not apply any theoretical models with enough details into the practical situation of enterprises, especially the management models Depending on the research, I want to study deeply about a specific human resource management model to get more experience for my own theoretical knowledge so that I can prepare well for the future job II The samples of the research In the strongly developing economy, Dong Nai has become one of the industrial centers of the country Besides the early established industrial parks (Bien Hoa Industrial Park is a clear example), now the investment trend of foreign and local investors is pouring the central districts such as Trang Born and Nhon Trach, There are many medium and large enterprises so the samples that I used in my research are not considerred as the standard ones Hung Dat Shoes & Leather Company is a medium business, it has been set up for two years However, its development has contributed much to the local economic development Trang Born Rubber Plantation is a branch of Dong Nai Rubber Company After a long time of the planned economy this company has shifted its structure for the new economic situations Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -3- Class: KA0002 Graduation Paper Both above enterprises have their own ways of managing human resource, but I still want to analyze them in order to find out the strengths and weaknesses to make them more effective III The scope and the limitation of the research Applying the mixed economy has made the quantity of enterprises increase rapidly with more and more new kinds On an objective sense of a student, choosing the topic and samples for the research can not avoid limitation Two above enterprise which I mentioned are two medium enterprises among many large ones so the human resource management models of these enterprises can not be considered as a perfect model or a standard model However, I wish my research would make people understand more about two management models so that people can take a deeper look at the role of human resource management The success or of a business depends much on the internal information and the secret information of that business That information can bring business to the competitive advantages Therefore, I had problems collecting information so the statistics that I used may have much limitation and is not the same as my desire IV Methods • • • • • Step I : Reading documents (books, newspapers, previous researchs, ) Step : Collecting information Step : Interviewing Step : Analyzing information Step : Testing the information sources Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -4- Class: KA0002 Graduation Paper The whole allowances The level of diminishing working abilities From 5% - 10% Salary of working months From 11% - 20% Salary of working months From 21 % - 30% Salary of 12 working months Figure 8: Allowances When one employee's for diminishing working abilities from 5% - 30% working abilities is decreased (from 31 % to 100%), he/she will get each month feeding-up allowances (see Figure 9): Each month allowances The level of diminishing working abilities From 31 % - 40% O.4*base salary From 41 % - 50% 0.6*base salary From 51 % - 60% 0.8*base salary From 61 % - 70% 1.0*base salary From 71 % - 80% 1.2*base salary From 81 % - 90% 1.4*base salary From 91 % - 100% 1.6*base salary Figure 9: Allowances Other benefits: for diminishing working abilities from 31 % - 100% the plantation has a kindergaten controlled by the Trade Union The employees have right to send thier children to the kindergaten during their working time at the plantation, and of course the tuition fee is rather low In addition, the platation often holds tours for the whole employees and holidays Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -47- and their families on festivals Class: KA0002 Graduation Paper 11.6 Promotion Good employees are offerred suitable positions basing on their abilities Those who proposed useful ideas, shown excel1ent performance, worked wel1 in groups wil1 be easy to get promotion The promotion decisions of the plantation wiII be made by the manager However, the manager must base on the whole employees' points of view to make final decision It means the promotors have to be supported by as many others as possible The plantation has some criteria of promotion: • Working under high pressure • Working alone • Solving problems quickly • Being dedicated to work • Management ability • "Contribute first, then demand" 11.7 Punishment Warnings: the plantation applies this form of punishment to some situations: the employees break the internal regulations (going to work late, not fulfiIIing the assigned responsibilities, ) Decreasing the current pay ranges: the employees wiII be diminished, or retained the current pay ranges for long times when they commit some of the foIIowing mistakes: The employees destroy the organizational machines, equipments innocently (diminishing salary, but not higher than 30% of the base salary) The employees let the assets of the plantation be stolen (not getting pay raises) Delaying the work for short time: when the employees make mistakes that is difficult to make clear, they wiII have to stop their work for short time This time is not longer than 15 days and the employees wiII get 50% of their base salary Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -48- Class: KA0002 Graduation Paper Sacking: this form of punishment is used when the employee makes some mistakes such as stealing the assets of the plantation, letting the technological secrets out, harming the benefits of the plantation, stopping the work for days per month, or 20 days per year without permission Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -49- Class: KA0002 Graduation Paper Chapter III Il(JM"AruN~ THE TW(J M(JIlELS I Some strengths and weaknesses of Hung Dat Human Resource Management Model 1.1 Strengths The recruitment and selection process of Hung Dat is quite simple The company, therefore, can save much time and money due to the fact that the "hiring", or "non-hiring" decisions are made very quickly In addition, applying the referrals method to choose new secreterial and managerial staff beings to the company great reliability because the company may find real ability of candidates through its old employees Because the orientation policy is the training process of the company, new employees will be given enough time to be accustomed to new working environment and the ways to work.These courses of orientation/training often last for two weeks For those two weeks, new employees will be provided the company's regulations and required skills for work Consequently, new employees can take the work right away after finishing the courses.Moreover, the company does not to set up training programs to enhance its employees' skills because those who can not show their ability's at the first training course (orientation) are eliminated Initially, the company may recognize its new employees' abilities Setting the standard of performance makes the employees more dedicated to fulfill the work assigned The employees always want to show their good performance (in order to get higher pay ranges, to be promoted), thus, they try to work well to get good valuation on performance appraisal time Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -50- Class: KA0002 Graduation Paper The company's punishment policy is strick enough to make sure that the company can control and utilize its personnel for the most effective 1.2 Weaknesses Hung Dat has no specific Human resource plan so the company finds it difficult to set up selection, training, or terminating policies due to the fact that it can not predict the economic trends and the supply of labor (internal and external labor force) Once the contracts are placed, the company make its human resource plan The question is raised that can the company make the best human resource plan at short time ? - Surely, the answer is NO because every work needs preparing, especially on business field Human Resource Planning is the first part of Human Resource Management Model Not doing this part well means that the company can not establissh a perfect model to utilize its associates in the most effective way Hung Dat often chooses family members for secretarial and managerial positions The company, thus, can not select well-qualified candidates from outside Consequently, managing the organization less effectively is unable to avoid The company does not establish separated training and development programs Workers are not given any training courses in their working period except for the first training program before taking jobs There is no training program to improve workers' skills Futhermore, young talented employees, are not identified gradually they loose the motivation of working because their abilities one not developed The company's salary policy that is paid to its employees is low, especially the workers' salary A worker begins his pay range at 1,600 VND per working hour; he has to work for 12 hours/ day, we can simply calculate his/ her salary 12 hours x 27 days His/ her salary = = 324 hours/ month 324 hours x 1,600 VND Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -51- = 518,400 VND Class: KA0002 Graduation Paper The bonus and allowance are given with a limited amount Therefore, a new worker will get around 550,000 VND / month Besides the low salary policy, the other benefits of employees are not paid much attention The company has not set the retirement policy so when an employee no long has abilities for work, the company will sack him! her Moreover, Hung Dat Company does not care much about its employees' lives When one employee must delay his/her the care of the company is not remarkable The compensation policy of Hung Dat Company prevents the employees from trying their best to contribute to the company Hung Dat Company does not put the motivation policy in its human resource management model The useful contribution of the employees is rarely praised In addition, the company does not create the most convenient environment for normal employees to build their own ideas, to take part in the organizational operation Furthermore, the company does not satisfy the employees' demands before it wants its employees to perform the work Hung Dat does not reward the employees although they show excellent peerformance This can not stimulate employees to work hard Hung Dat has no highly promoted potentia! The company tends to let its employees' roles and responsibilities the same except for some cases of normal workers (workers can be promoted to positions as supervisors, or production - line supervisors).This reason explains why the empolyees loose their will of struggling II Some strengths and weaknesses of Trang Born Plantation Human Resource Management model 11.1 Strengths The plantation always makes specific human resource plans so it can adapt new changes of labor market In fact, analyzing the current personnel and forecasting human resource requirements help the plantation balance between the demand and the Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -52- Class: KA0002 Graduation Paper supply of labor The plantation can bases on its human resource planning to anticipate replacements, promotion, , and to put the right people into the right position at the right time Trang Born Plantation uses enough types of recruitment to hire the best qualified candidates because the plantation can attract candidates from diversified sources of recruitment Additionally, its selection process ensures thet it can examine candidates' abilities in the most effective way Trang Born Plantation has set a suitable socialization program to support new employees New employees will feel comfortable and confident after taking the program Thus, the relation between new employee and the plantation is established stably at the first time The performance appraisal system of Trang Born Plantation is quite close The evaluation process is done every month so the plantation may effectively watch for the employees' abilities The plantation, therefore, considers this system as the most important part of its human resource management model because this system is the foudation of other parts (compensation, promotion, punishment) The compensation policy of the plantation makes the employees satisfy so they will be more and more dedicated to their work Actually, the employees will work more effectively, contribute much more when the plantation meets their demands The promotion policy brings the employees to significant influences because this policy bases on democracy This stimulates and encourages the employees to try their best, and one day they will be promoted 11.2 Weaknesses Trang Born Plantation does not pay much attantion to enhancing the employees' knowledge and skills In fact, the plantation rarely establishes training and development programs so the abilities of employees seem to be retained as the first time of working Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -53- Class: KA0002 Graduation Paper Good employees often tend to leave the plantation after they have worked for ages due to the fact that the plantation has no retaining policy Productive workers are treated as less productive ones An effective motivation policy (praising, rewarding, considering employees as insiders, ) is not performed regularly at the plantation Good performance is rarely recognized and gradually the employees loose their dedication The plantation, therefore, can not exploit all of the strengths of its personnel III Some recommendations to make the two models more effective The current human resource management models of the two organizations have been well-operated since these organizations were established The clear evidence to prove the strong development of these organizations is that they have gained benefits from years to years However, to continue gaining benefits for longrange these organizations should not retain their own models, they should add some parts into their models to make them better and better After analyzing quite clearly these models, I wish to propose some ideas to make these models more and more effective: The Model of Trang Bom Plantation The Model of Hung Dat Company The company should The plantation should pay much more make more specific human resource plans not only to attention to training and developing hire best employees but to adapts new employees so that it can utilize their trends of market and labor force abilities to produce the greatest output The company should establish the motivation policy to stimulate The motivation policy should be done the more often (writing the name of excellent employees to work hard, specifically, employees as "employees of month", rewarding and praising those who show drawing ideas from employees to make excellent performance; noticing good them feel they are insiders, giving prizes Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -54- Class: KA0002 Graduation Paper to good employees, ) employees of the week, the month The promotion process should be done basing on equality Those who are skillfull, experienced, and talented will be promoted though whoever they are (workers, supervisors, or secretary, ) The Trade Union should be put into the human resource management model so that it can create close relations between employee and employer The compensation policy must be paid much attention This is one of the best motivative ways to stimulate the employees' working abilities Training is one of the most important tasks for every enterprise employees' skills, Enhancing knowledge means enterprise will get success soon So why does not the company put the training process III its Human Resource Management model? Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -55- Class: KA0002 Graduation Paper Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -56- Class: KA0002 Graduation Paper I.Results Creating the general model of human resource management (Chart 3) helps us not only understand which parts are needed for a perfect model but recognize the real models of real companies (Chart and Chart 5) We can distinguish how the theoretical model differs from the real ones in order to initiate constructive proposals for the real models Chart shows us the standard parts of a general model However, to apply those parts into practice is not easy, Chart and Chart are clear examples In fact, Hung Dat Company and Trang Born Plantation may not set up the most effective models Thus, they may not utilize their associates in the best way Human resource planning - Recruitment and selection - Orientation , ~ Motivation Performance appraisal • I I I Punishment Promotion Compensation Training and Development Chart 3: The general model of Human Resource Management Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -57- Class: KA0002 Graduation Paper Recruitment and selection Human resource planning Training Performance appraisal Compensation Punishment Chart 4: The Human Resource Management Model of Hung Dat Company Human resource planning Socialization Selection Performance evaluation Punishment Compensation Chart 5: The Human Resource Management Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -58- Promotion Model of Trang Born Plantation Class: KA0002 Graduation Paper Identifying the weaknesses of the two models helps us be able to initiate suitable recommendations to make those models better II Conclusion This research attempted to establish general model of human resource management for all kinds of enterprises (private-owned, State-owned, or foreign-run enterprises, ) and to compare two models of two kinds of company (state-owned and private-owned) The research proved us that the reality can not follow the theory completely Each enterprise must base on its own conditions to set up appropriate model Therefore, there is still long distance between theory and reality The differences between the two models must, of course, be due to many reasons: different types of management system, the production scale, and the management experience Thus, we can not state which model is better My general model and comparation may be not completely correct because of the limitation of time and the size of the samples Longer time and larger size of samples may produce different results Finally, this research contributes to each model by providing strengths and weaknesses so that each enterprise can create the best ways to manage its personnel more effectively Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -59- j Class: KA0002 Graduation Paper Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -60- Class: KA0002 Graduation Paper l.Management ( Bruce Charnov & Patrict Montana) 2.Human Resource Management ( Raymond J Stone) 3.Managing People ( John Burgoyne & Liz Shenvin) 4.Strategic Human Resource ( James N Baron & David M Kreps) 5.Human Resource and Personnel Management ( William B Werther, Jr & Keith Davis) 6.Mastering Human Resource Management ( Kelvin Cheatle) Quan Tri Ngu6n Nhiin L,!c ( Trdn Kim Dung) I>~c Nhan Tam ( Dale Carnegie, Nguyln Hiin Le dtch) 9.Human Resource Management (Gorge T Milkovich & John W Boudreaw) lO.Personnel and Human Resource Management in Canada (Shimon Dolan & Randalls S Schuler, 1987) WEBS AROUND: 1.experts com 2.workjorceonline.com 3job-interview net/bank/ Advisor: Dr.-Ing Dang Minh Trang Student: Pham Nguyen Thai Huy -61-