INTRODUCTION
COMPANY PORTFOLIO
SMI Technology, a US-invested firm focused on product development and software outsourcing, has grown significantly over the past decade in Vietnam From a small team, it has expanded to over 1,000 employees and has been recognized with the prestigious Top 10 Sao Khue award for its excellence in the industry.
SMI has been recognized as one of the top 5 IT companies and ranked 32nd among the best workplaces in Vietnam, based on criteria such as salary, bonuses, welfare, development opportunities, leadership, culture, work-life balance, and company reputation The company is known for its popular products, including qTest, Kobiton, Katalon, and Witurn, with more innovative solutions on the horizon.
The concept of "value" in SMI extends beyond technical, project, and business realms; it embodies a commitment to advancing Vietnam's technology sector through innovative products and services SMI prioritizes community initiatives aimed at nurturing and developing IT talent, thereby enhancing the overall value of the industry.
Over the past decade with the vision of global company, SMI Technology has launched many
"made in Vietnam" products that have made a mark on the international market, in addition to its global customer base from the outsourcing segment
QASymphony, a notable Unicorn start-up formed after its 2017 $40 million investment and subsequent merger with Tricentis in 2018, exemplifies successful innovation in the tech sector Additionally, the Vietnamese engineering team at SMI has developed applications like Kobiton, which secured a $3 million investment from Kinetic Venture Capital in the USA Katalon, another significant player, boasts nearly 35,000 global business customers, highlighting the growing impact of these technologies in the market.
In order to continue to promote the strengths in the outsourcing and development of software products, SMI is expanding the sales team in the Australian market and Asian market
SMI focuses on consulting and delivering solutions for data management and analysis, supply chain management, and software quality management Their services are tailored for mid-range customers and aim to penetrate potential markets throughout Asia.
SMI Technology focuses to actively implements career and training programs, associates with universities to support students with real-life project knowledge and experience from the study time
The company aims to collaborate with non-profit organizations to develop a talent pool of software engineers from underserved remote areas.
By investing 05 new offices in Vietnam with a global working environment standard, SMI also focuses to build a professional corporate culture with training and people development program h
6 with many interesting activities which the purpose to maintain and develop the company for a billion-revenue company
With the commitment to develop IT resources, SMI also support to create the best condition for employees for the opportunities to:
Learn: by giving opportunities, challenge for programmers to learn, and explores their skills
Develop new product: All members at SMI are involved in contributing ideas for the product they create
SMI aims to create an open-minded, dynamic, and professional work environment for all employees while offering high-quality job opportunities for Vietnamese engineers and programmers As a leading technology company in Vietnam, SMI is committed to achieving billion-dollar revenue within the next decade.
COMPANY STRUCTURE
SMI is a technology company for the company’s structure is quite simple, under Board of Director; it will be divide to 02 Business Units as below:
Corporate Service is back office function with Finance, Admin, HR, Sales& Marketing, IT, Procurement Department
Delivery Service has Our-sourcing service, Production and Solution Department
Outsourcing services represent the company's most profitable division, offering a range of solutions to clients, including technology outsourcing, software maintenance, system upgrades, risk assessments, and system repairs.
The production department, comprised of fresh graduates, fosters innovation by generating unique ideas and initiatives aimed at developing cutting-edge technology products and software solutions Their creative approach not only captivates potential investors but also appeals to customers seeking novel offerings in the market.
Solution: This is a specialized department in charge of important projects such as integrating system software of companies together in the process of merger and acquisitions among technology companies
Outsourcing and solutions are the primary revenue drivers for the company, essential for maintaining its business operations Significant investment has been made in the production department to develop innovative technology products, aimed at attracting clients and investors while also facilitating market sales.
COMPANY VISION
To be a visionary global technology group with a portfolio of innovative service and product business
Provide guidance and support to our staff to help them define and reach their potential
Achieve success by creating value and marking a positive impact on the success on our customer and clients
Provide tangible contribution and improvement to our communities h
INFORMATION TECHNOLOGY INDUSTRY
The rapid advancement of information technology has led to a significant increase in the demand for skilled professionals in the field Organizations across various sectors are actively seeking employees with expertise in information technology to meet their growing needs.
Software companies that research, build, develop and provide software, website, applications, games - Companies manufacturing, assembling and repairing hardware equipment
Companies provide network solutions and network security
Administration Department, IT department at companies, including companies operating in the field of Technology and other fields
In the face of intense competition from both domestic and international firms, outsourcing service providers such as SMI are challenged by formidable rivals including LogiGear, Harvey Nash, Sunrise, FPT, DEK Technology, Global Cybersoft, TMA Solutions, and IVC.
SMI is committed to enhancing service quality to meet customer demands while consistently innovating advanced technology products that deliver practical benefits, ultimately maximizing profits and strengthening its competitive edge in the market.
The labor market in the programming industry will need 350,000 resources by the end of 2021 while currently only about 200,000 resource can meet the needs of the job
The IT market in Vietnam faces a significant challenge due to a shortage of skilled resources Despite rising wages and benefits in the industry, experts forecast that by 2020, the country will still experience a shortfall of 70,000 to 90,000 IT professionals.
PROBLEM CONTEXT
RECOGNIZED SYMTOM
This study concentrated on the Production department of a company that invested significant resources—money, time, and effort—into developing advanced technology products The goal was to enhance their market presence and achieve high revenue, ensuring the sustainability of the business.
The Production Department, comprising approximately 40 members, has received significant investment from the SMI Investment Fund over the past few years Its primary objective is to develop innovative technology products and successfully bring them to market, attracting potential investors or facilitating complete sales to secure funding.
In discussions with the DIRECTOR of SMI, it was identified that the production team is experiencing a significant issue: the actual performance of developers is falling short of the management's targets.
One of the interview from Mr Cao Minh Nhat - The Director of Production team also confirmed that:
In recent years, our Production department has not introduced any new products to the market, resulting in lower performance compared to previous offerings The technology sector demands continuous innovation and widespread adoption to satisfy customer needs Unfortunately, the lack of new product releases over the past three years has hindered our ability to achieve high results.
Recently, the team revenue has decreased significantly and this situation may continue to occur, so the company needs to find out the cause to overcome this situation
Due to low revenue over the past three years, the Production team members have not received any bonuses, which has contributed to their decreased performance.
Since 2017, numerous technology products have failed to meet customer expectations, leading to a significant number of cancellations of SMI's products and services, which has adversely impacted the company's revenue, as illustrated in Table 01.
Table 1: Sale Revenue from 2015 to 2019
(Source: SMI New Production Revenue from 2015 - 2019)
The lifecycle of technology products is often brief; if a product fails to satisfy customers, generate significant revenue, or attract investor interest, it is deemed a failure In such cases, the product is typically discontinued to conserve the team's time and effort, as well as to save costs for small and medium-sized enterprises (SMEs).
The Production team, a subsidiary of the SMI group, comprises around 40 employees, predominantly young individuals The Director of SMI emphasizes that the information technology industry demands distinct skills, prioritizing innovative ideas over extensive experience Consequently, IT personnel are typically young, recent graduates, or those with just 1 to 2 years of experience The current age distribution within the team reflects this trend.
The data indicates that 75% of the team members are under 25 years old, aligning with the production team's requirements However, the lack of experience among this younger generation often leads to challenges in professional behavior and emotional control in an office setting.
Some might feel uncomfortable while working with these ridiculous one
Some are so quiet and only communicate to each other when needed, they are lack of socialize, or deny to join the company activities,
Some staff just work and work then go home
Some staff just want to enjoy and work with emotion
In order to analyze the problem, there were 12 in-depth interview conducted with 4 main groups as below
- The first group: 02 members: Director and Sales and Marketing managers
- The second group: 03 members: HR manager, Development Manager, Leader
- The third group: 04 members of Production Team
- The fourth group: 03 low performance members h
POSSIBLE PROBLEM
In addition to interviewing four groups, the production team carried out an internal survey to gather more data and identify the reasons behind their underperformance relative to company expectations As illustrated in Table 02, the survey highlighted four key issues that received significant feedback from the team.
Table 2: Problem that lead to low performance of Production Team
(Source: SMI Internal Survey for Production Team)
By looking at the statistical numbers of the survey above, it showed many problem affecting low performance of Production team: Unattractive salary & bonus, Ineffective performance appraisal,
Failure Product, Lack of leadership This is true data based on the interview information, the confirmation from all team members of production team
This report analyzes the production team's current challenges by utilizing both primary and secondary data, identifying the root causes of these issues, and offering solutions and recommendations for the Board of Directors of SMI Company.
PROBLEM IDENTIFICATION
FAILURE PRODUCT
At SMI, a new product is deemed a failure if its testing report indicates a satisfaction ratio below 50% across multiple tests To avoid being classified as a failure, the product must be revised to achieve at least a 70% satisfaction rate If these standards are not met, management will decide to halt further development of the app and pursue a new project instead.
Failure Product Unattractive Salary & Bonus h
A sample circle life of a new product will be shown as below:
Spynkal exemplifies a typical case of a failed technology product Recently, the production team developed a new app called Spynkal, designed to function similarly to Facebook After a few months of incubation, the app was announced for testing to all SMI members before its market launch However, Spynkal did not meet the high satisfaction testing results from the testers, prompting the production team to upgrade its features and functions until satisfactory testing outcomes were achieved.
After 6 to 8 months of development, Spynkal was deemed a failed product by SMI's Board of Directors, as it did not yield successful results despite the team's significant time and effort The Director of the Production team confirmed this assessment.
Product quality is crucial for achieving customer satisfaction and driving company success A consistent level of quality that aligns with client needs empowers the sales team to confidently promote products Conversely, unstable product quality leads to customer dissatisfaction and hinders our ability to effectively engage clients, ultimately resulting in product failures.
Riaz and Tanveer 45 stated, “Product is something or anything that can be offered to the customers for attention, acquisition, or consumption and satisfies some want or need”
Reed, Lemak and Mero 43 suggested that delivering high product quality to customers is a key strategy for improving performance in a competitive environment
Chauhudri and Holbrook 8 pointed that a customer who trusts in a product is more likely to remain loyal to it and spread positive word-of-mouth
Boulding et al suggest that product quality directly influences customer loyalty, as high-quality products typically lead to greater customer satisfaction Conversely, product failures can negatively impact the customer experience for SMI and ultimately harm SMI's revenues.
Idea Incubation Launch for testing Low results
Consider to close Low results
In 2004, Kotler 28 suggested that “a product should be viewed in three level: core product, actual product and augmented product”
Core product means that the core value that the product could offer like purchasing massage chair is buying relation or comfortable moment
Actual product means that product could bring differential advantage from its competitors
Augmented product means that non-tangible benefit of possessing product like discount or customer service and so forth”
Below is a table 3 - testing report in recent years from 2016 to 2019, to show that the new products produced by the production team mostly get unsatisfactory test results
Satisfaction Neutral Satisfaction Highly Satisfaction
(Source: SMI Testing Report for New Production)
Due to disappointing test results from both internal testers and potential customers, the product failed to generate significant profits, leading SMI's management team to reconsider its development With low performance metrics, these products are deemed failures and will either be placed on hold for future upgrades or discontinued based on the final decision of SMI's management.
UNTRACTIVE SALARY AND BONUS
Employee dissatisfaction with salaries and bonuses often leads to decreased performance within production teams This report aims to explore the impact of inadequate compensation on productivity levels, highlighting the need for organizations to address these concerns to enhance overall team performance.
The production team receives compensation through a combination of a monthly salary and performance-based bonuses linked to key performance indicators (KPIs) While the monthly salary is guaranteed regardless of product output, bonuses are awarded based on job and product performance However, due to a lack of exceptional product releases recently, bonus payments have been affected.
In a recent survey, production team members revealed that their low performance is largely attributed to unattractive salaries and bonuses, as most receive only a basic monthly salary.
Unequal remuneration is also a factor that reduces the productivity of the team and leads to an increase in the rate of job vacancies at the company
And from the perspective of Mr Nguyen Huu Minh - Developer Manager:
Customer demands are rising, yet many products are plagued by errors and suboptimal usage, leading to decreased investment and market appeal Poor Total Quality Management negatively impacts both company and team performance, ultimately affecting salaries and bonuses.
There are theoretical link have the relationship between performance and competitive advantage as metioned in Curkovic & Pagell 11 ; Feigenbaum 16,17 ; Noori 38 ; Seawright & Young 50
Therefore, the resource of employees in the production team is fluctuating, the turnover and new recruiting is significantly up and down by this cause and shown as table 4 below:
Table 4: Employee status in 2016, 2017, 2018, and 2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination h
(Source: Production Employee Status from 2016 - 2019)
According to a survey by HR Consultancy Anphabe, a turnover rate of 10% is optimal for businesses, allowing for personnel stability and facilitating staff changes approximately every decade This insight is supported by data from SMI HR regarding Team Production's member status in 2016.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination h
In 2019, the average employee turnover rate within the group ranged from 10% to 20%, indicating a significant challenge in workforce stability With approximately 75% of Team Production's employees being under the age of 25, the company, SMI, faces difficulties in retaining personnel, resulting in increased recruitment costs and a need for effective talent management strategies.
The Production team member serves as a backup to ensure adequate staffing for the Outsourcing and Solutions department in the event of employee resignations.
To maintain project stability and ensure timely completion of all processes, backup resources are utilized during the interim period while awaiting new hires from the HR Department This approach helps meet the agreed-upon headcount requirements with clients for each project.
So the resource of Production team is not stable It is also lead to high turnover rate that greatly affect to the team's performance
High employee turnover significantly impacts the workflow of remaining team members When a team member resigns, the others must compensate for the lost workload to maintain progress, which can lead to a decline in work quality This increased pressure on remaining employees can ultimately affect the overall quality of the product.
This is also effect to the recruitment costs, time, and effort of Human Resource Department to recruit new replacement in particular and in company's revenue in general.
INEFFECTIVE PERFORMANCE APPRAISAL
The performance of production teams has been a significant challenge in recent years, primarily due to the inexperience of many young employees, which can lead to mistakes that impact product quality However, these young workers bring valuable energy, creativity, and a strong willingness to learn, making them a potential resource for development Companies recognize the importance of investing in their training over the years to enhance their skills and ultimately produce high-quality products that attract investors, similar to their successful past products.
An in-depth interview with HR manager has been conducted and she said: “
“Team products' target are frequently changed to match the nature of the work and ineffective performance appraisal is demotivated the employee to perform the best performance” h
“In production team the performance appraisal is quite difference from other department
In a collaborative team environment, when one member (A) has less expertise than their colleagues, the more experienced teammates are often willing to assist by taking on some of member A's tasks This allows member A to leverage their unique strengths to support the team in other areas, fostering a more efficient and productive workflow.
In a collaborative production environment, Employee A is tasked with a new project but lacks the necessary qualifications, prompting Employee B to step in and assist Similarly, Employee C will support Employee B during challenging phases of the project This workflow transfer can skew KPI assessments, ultimately impacting year-end evaluations for all employees involved Research by Moradi, Mehraban & Moeini and Harrington & Lee highlights that effective performance appraisals enhance employee performance quality, while ineffective assessments can lead to diminished team performance.
As Cawley, Keeping & Levy 7 ; Roberts 46 ; Singh 53 mentioned, “There are very few studies and literatures on employee participation focus on performance appraisal”
In addition, Daoanis 12,13 with a clear vision, constructive feedback in the appraisal process is expected to provide for employees to participate in performance appraisal
And from Mr Nguyen Minh Thang – team member, said that:
“Well, I think that currently SMI are lacking of KPI to manager the performance of Production team and I am not satisfy with my performance appraisal
And when we are completed the assignment, we evaluate the effect of the teammate’ input is higher than member’s input for both direct and indirect in-charged person
Even the member is support for other task to fulfil the assignment”
And from Ms Nguyen Ngoc Bich – Developer who work for nearly 02 year said that:
Our production team plays a crucial role in utilizing the funds invested by SMI to sustain our operations However, the absence of product investments and key performance indicators (KPIs) has hindered our ability to effectively manage performance, resulting in no bonuses for several years.
Performance assessment enables companies and employees to define and evaluate individual performance benchmarks, fostering a sense of commitment among workers Furthermore, it helps identify areas for improvement, encouraging underperformers to enhance their contributions to the organization.
Over the past three years, the performance appraisal system has proven ineffective, leading to a significant decline in the performance ratio of developers within the team The percentage of those achieving outstanding and highly effective performance has dropped to nearly 50%, resulting in a shift towards effective and underperforming categories.
(Source: SMI Performance appraisal ratio from 2016 - 2019)
This performance appraisal evaluates the revenue results of previously developed new technology products, utilizing the findings from the product testing report outlined in Table 3.
From the information obtained, it can be seen that the ineffective performance appraisal greatly affects the performance of the Production team
From Trong’s opinion: Developer who has low performance result:
In recent years, we have struggled to launch successful products that meet customer demands, resulting in low sales revenue Despite our efforts to develop various products, increasing competition in the industry has hindered our performance, leading to stagnant salary growth and a lack of bonuses for our employees.
And Nam Vũ a Leader also said that:
Some team members exhibit high intelligence but often display ridiculous behavior, leading to demotivation when tasks are not completed properly While some individuals refuse to rework their assignments, others feel compelled to support them, resulting in decreased team performance and motivation.
By stated at Roberts 46 , the ineffective performance will be a consequence of less or non- participation of employee, since they may see it valueless as stated by Wright 57
Conducting performance evaluations without clearly defined goals can lead to employee discontent, negatively impacting productivity and organizational engagement A well-structured appraisal framework should provide clear direction and constructive feedback, motivating employees to meet performance standards and achieve set targets.
LACK OF LEADERSHIP
A recent survey indicates that 25% of young leaders lack essential leadership skills, a concerning statistic that can adversely affect employee performance This deficiency may stem from inadequate training and coaching, often exacerbated by negative personality traits in leaders Researchers have identified these detrimental traits under various terms, including "toxic leadership" (Frost, 18; Padilla et al., 40), "abusive leadership" (Tepper, 54), and "destructive leadership" (Kellerman, 25; Schaubroeck et al., 48; Mumford et al., 35) Addressing these issues is crucial for fostering a more effective leadership culture.
From Internship member – Mr Nguyen Duc Tuan, he said that:
During our internship program, opportunities for direct interaction with our leader are limited, resulting in minimal communication Consequently, we are unable to provide feedback to our leader or receive valuable coaching from them.
Young individuals often seek to express their opinions and ideas; however, they may encounter resistance when proposing solutions, as others might perceive them as inexperienced.
Leadership plays a crucial role in project management, significantly influencing project outcomes According to Shenhar et al., effective leadership is essential for successful project execution Kerzner also emphasizes that leadership is a key success factor, ultimately determining whether a project will succeed or fail.
Toxic leadership can lead to detrimental outcomes for organizations, resulting in high turnover rates, decreased revenue for stakeholders, and instability among team members These adverse effects not only impact the organization but also reflect poorly on the leaders themselves, as highlighted by various studies (House and Howell, 22; Conger, 10; O’Connor et al., 39; Zaccaro et al., 58; Kellerman, 25).
From Lombardo et all 31 : lack of leadership will lead to the following negative result:
Inability to build a strong team
Not supportive and demanding of subordinates h
Having poor relationship with team member
And from Mr Nguyen Ngoc Tuan – Developer who has low performance result:
Some employees are dissatisfied with their performance appraisals, leading to a lack of motivation, especially within the SMI production team The absence of bonuses further contributes to their discontent, highlighting a need for improved performance management from leadership in this specialized department.
Young employees require ongoing feedback rather than just annual performance evaluations to feel accountable in their roles Regular assessments from leaders regarding their contributions are essential, especially when they make progress in developing new products.
Software quality traditionally relies on various factors, including leadership, training, experience, and particularly the teamwork dynamics among developers Research by Hoegl & Gemuenden, Liang et al., and Henderson & Lee emphasizes that effective teamwork, especially in terms of interaction processes, is crucial for achieving high-quality software Additionally, inadequate leadership skills can result in misjudging team performance, ultimately leading to ineffective performance appraisals.
Based on the primary and secondary data gathered from interviews and team member surveys, it is evident that SMI is facing a significant issue with the low performance of its production team To illustrate this, a cause-and-effect map will be presented below.
CAUSE – EFFECT MAP
CAUSE VALIDATION
An analysis utilizing a cause and effect tree, alongside in-depth interviews with 12 respondents from four key groups and secondary data from the SMI sales and marketing department, reveals that ineffective performance appraisal is a primary cause of low performance within the production team It is crucial for SMI to identify the specific factors contributing to this underperformance to implement effective solutions.
A significant factor contributing to low team performance is the lack of effective leadership, as leaders who manage from a distance often fail to provide essential training and clear KPIs This is particularly challenging for younger team members who, due to their inexperience, struggle to train their peers Additionally, ineffective leadership traits, such as the belief that the leader is always right, further exacerbate the issue According to Dotlich and Cairo, this dynamic can hinder team development, while Paton identifies four types of leadership, highlighting the importance of successful leadership in fostering a high-performing team.
First is the category of innovative specialist leaders
Second is the category of qualified leaders
Third is the category of normal leaders
Ineffective leaders can significantly harm initially successful companies, leading them toward bankruptcy and liquidation Despite being in charge of viable firms, these leaders often degrade the organization's health and performance.
The Director of the Production team has confirmed that a lack of leadership was not a primary issue, as team members receive training from higher-level Managers who are responsible for their development Moving forward, the company aims to enhance leadership management for its leaders, recognizing that this improvement will positively impact team performance.
Insufficient leadership can diminish teamwork spirit, resulting in a high turnover rate among production teams, as evidenced by employee status data from 2016 to 2019 This decline in performance negatively impacts customer satisfaction, which in turn influences sales revenue Additionally, when salespeople underperform, sales managers often respond by increasing pressure through negative reinforcement.
As by Faraj and Sproull 15 “Teamwork is obviously important in software development In traditional development, the study showed a strong relationship between management of expertise and team performance
Furthermore, from in-deep interview with Vu Tien Nhat – a member a production team said that: h
Young employees possess significant talent; however, the nature of IT work often results in reduced face-to-face communication They tend to rely heavily on technology tools and apps for interaction, which can lead to ineffective communication and subsequently impact product quality.
As by Faraj and Sproull 15 “Teamwork is obviously important in software development In traditional development, the study showed a strong relationship between management of expertise and team performance”
In the IT industry, effective communication among team members is crucial, and many prefer digital tools such as Skype, Zalo, and WhatsApp for interaction However, this reliance on technology can lead to a diminished team spirit, as members often feel disconnected from one another due to a lack of face-to-face interaction As a result, the production team has expressed concerns about their teamwork dynamics, highlighting the importance of fostering stronger personal connections within the team.
In the technology industry, employees often exhibit a straightforward demeanor and may communicate less frequently; however, they effectively utilize online meetings and testing to stay updated on work progress Therefore, a lack of teamwork spirit is not a significant factor contributing to the production team's low performance.
At SMI, a new technology product is deemed a failure if it cannot adapt to the market and receives unexpected client feedback This reality reflects the fierce competition within the IT industry, resulting in only a few SMI products making a significant market impact When a new technology product shows potential for development, management invests considerable time and effort into it; otherwise, it is classified as a failure.
The success of a technology product hinges on various factors, including convenience, availability, and unique advantages Currently, many competitive tech products in the market offer similar functions and features, which fails to capture the interest of investors or entice customers.
Therefore, from the perspective of Mr Nguyen Tuan Khai - Sale/Marketing Manager:
“The quality of products is unstable; I received many complaints from customer for that issue I lost many customers for that reason It reduced my sales revenue
And “failure product” has been impacted a negative result on sales performance of Sale team and the reputation of the company”
In SMI, a new technology product may be deemed a failure, leading the company to decide whether to continue re-testing, upgrade its functionality, suspend, or completely halt the project based on financial resources and team capabilities Notably, the case of Spynkal highlights the significant investment of time, effort, and budget that can be involved in product development.
SMI for months but the product did not bring any value or profit for the team and the company as well
The failure product is also the consequence of lack of leadership as from Mr Le Huu Minh – Developer who work for the team over 01 year said that:
The team's leader is currently overwhelmed with responsibilities, resulting in insufficient follow-up with individual members and inadequate tracking of overall team performance This lack of effective leadership skills has led to some team members underperforming, particularly in managing client requests, which are falling behind schedule.
The Production team, supported by investments from SMI company, does not face significant pressure from product failures, as team members continue to receive their monthly salaries regardless of their success in developing technology products.
An internal survey revealed that 40% of employees cited unattractive salaries and bonuses as a key issue affecting motivation at SMI Despite the high market salaries for IT professionals, the production team has not developed successful products since 2017, resulting in a lack of bonuses and diminished motivation This cycle of no bonuses leading to low-quality products further exacerbates the issue However, SMI's management is committed to investing in their team to nurture talent and create technology products that can generate significant profits and attract investment, indicating that while compensation is a concern, it is not the sole factor impacting team performance.
The board of directors at SMI has identified ineffective performance appraisal as a significant issue, primarily due to the absence of key performance indicators (KPIs) for evaluating production team members This lack of KPIs contributes to low team performance and hampers effective appraisals In-depth interviews with employees revealed feelings of bias and ambiguity surrounding the performance evaluation process, with some leaders showing favoritism towards certain team members, leading to inconsistencies Disagreements over final appraisal results often escalate into disputes, necessitating intervention and clarification from management.
And from Ms Nguyen Ngoc Bich – Developer who work for nearly 02 year said that:
RECOMMENDATION/ SOLUTIONS
Set up Effective KPI for Production team
Functional requirements: The benefits should exceed the cost
User requirements: The production team is small so we need to design solution it is must be easy to adapt and operate:
The KPI should fit with the present business policies & culture of the production team
Human resources, HR manager to work and cooperate with consultant organization
Arrange a meeting between the Development Manager, HR Manager, Consultant Company with related member to get idea and create the assessment outline for the team
The new KPI system should be specific and reachable for the team b Design restrictions
The project is expected to be completed within six months due to the fast-paced nature of the IT industry, which requires rapid adaptations to keep up with market changes.
SMI will combine with the HR consulting companies and the HR department to build a KPI with reasonable service fee with full package and not exceed VND 100,000,000 VND
Each project will have specific KPIs tailored for each group, allowing them to develop multiple technology products based on the team's capabilities These products will adhere to a streamlined lifecycle, featuring a shorter incubation period to enhance efficiency and innovation.
If a product demonstrates strong test results, the team will prioritize its development, leading to a diverse range of technology products created by each team rather than limiting them to a single product.
This also helps to bring many advantages for assessing the capacity of team members through the products they contributed, so that KPI evaluation will be more effective d Benefits:
Build as much as technology product that the developer wish to and creating more opportunities for new products approach to the market
Create more creativity, productivity, the teamwork spirit of the developer
Save time and effort of the team in the progress of creating products
KPIs are clearly divided, easy to assess the ability of the member by their contribution to their individual product
Effective performance appraisal based on the evaluation of the contribution of each member of the team according to specific product that they have built
KPIs offer actionable information, as they are always measurable and quantifiable
The time and resources of different staff members in different functions are streamlined by automated scheduling in order to support team members
Developers have more insights and opportunities from their failures and achievements reported in order to improve their personal activities on their own
Managers and directors are able to see the general picture of the business from the information they have processed and the knowledge of the necessary reports
Training Team Leader
Provide training for potential leader to increase their interpersonal, leadership skill, performance evaluation skill to improve their team performance, teamwork spirit a Design requirements
Functional requirements: The benefits should exceed the cost
User requirements: The production team is small so we need to design solution it is must be easy to adapt and operate:
Apply for current and potential leader
Training manager to work and cooperate with training organization
The new training method should be specific and reachable for the leaders of the production team h
Training in the IT industry should be completed within one month due to the fast-paced nature of the sector Rapid changes in technology and market demands require leaders to adapt quickly, leaving them with limited time for lengthy training programs.
The company is committed to enhancing the skills of potential leaders through comprehensive external and internal training programs With an annual training budget allocated specifically for this purpose, the firm will collaborate closely with the training department to maximize the effectiveness of these initiatives.
The training is indoor training for 08 leaders of the team with full package as below:
No Description Estimating Cost VND
1 Training with full certification ( 4 days) – 04 hours/ day 30,000,000
2 Catering, lunch, tea break and activities 4,000,000
Improve efficiency of the workforce
Improve ability to succeed under pressure
Improve charm and seriousness in business operations
Growth in faith in your team
Improve listening and communication skills
Increase knowledge of the nature of the workforce
Dependable, efficient and knowledgeable workforce
ORGANIZATION OF ACTIONS
To enhance performance management, decision-makers should prioritize the use of KPIs and training for future leaders, considering the diverse advantages and cost-effectiveness of various approaches Directors and managers must take immediate action by assessing staff expertise and collaborating with them to develop a comprehensive activity plan that outlines relevant timelines and costs.
Task Department Jun July Aug Sep Oct Nov Dec
Research & Collect the information about current KPI system for Production team
HR Dept, Production Manager, Team member
Build questionnaire/criteria, conduct survey, collect data
Testing and receive feedback from related department, adjustment
Appraisal and make the improvement
BOD, HR, Production Manager Sourcing Training Organization HR,
List out potential leader for training
Organize the training for potential leader
Receive feedback for the Trainer, Leader
Evaluate the effective of the training and make the improvement for the next training
CONCLUSION
To ensure product quality and adaptability, SMI has emphasized flexibility and commonality across its offerings Over the past three years, the company has successfully met its fundamental objectives under the current management approach However, to sustain team performance, SMI must now revise its strategy for the Production team.
Improving team performance through proposed solutions will lead to significant changes in the production team, including enhanced leadership skills, a stronger teamwork spirit, and an increased number of new product developments in the technology market An effective evaluation system will also reduce job vacancies and recruitment costs, helping to stabilize personnel and allowing the production team to focus on job development and innovation.
To secure a long-term competitive advantage, companies like SMI should prioritize the development of innovative and global technology products This focus not only attracts investment but also enhances the company's reputation, boosts sales revenue, and helps achieve management's strategic goals for the next decade.
SUPPORTING INFORMATION
Research objectives: To explore and understand the reason why production has low performance results in 03 recent years, and propose solutions to solve it
No Key sessions Objectives Timing
To understand the current situation of business activities in SMI Production Department 2-3 minutes
Explore the cause of low performance results and define the main reason
To explore the main reason that lead to low
3 The solution To find out solution 5-10 minutes
1 Could you please introduce about yourself (your name, age, working experience) x x x x
2 Is SMI has a team to build up the own apps or services, product and deliver to the potential global company and client or not? x x x x
3 Could you share your opinion about sale revenue of
4 Could you share the reason why Sale team could not sell the product recently? x x x x
5 Could you share the reason why the client refuse to buy a product of Production team x x x x
6 In your point of view, what is the most important causes that leads to low performance results? Why do you think so x x x x h
7 In your point of view, what is the most important causes low team spirit? Why do you think so
9 What are solutions that the company has taken to improve the performance of employee x x x x
9 What are your opinions about the effectiveness of above solutions? Could you share any alternative you think should be taken to solve this problem? x x x x
10 From above solutions, what is the best solution? Why? x x x x h
Time of interview: 9:00, 19 Dec 2019 in HCMC
Duration for each interviewer: 10-20 minutes
Interviewee: Mr Nguyen Tuan Khai
Title: Sales & Marketing Manager in SMI Technology
Working experience period: more than 8 years’ experience in technology industry
Status: currently working for SMI Company
Duong Tran An An Good morning Could you introduce something about yourself and the position you are working in this company
Nguyen Tuan Khai has over eight years of experience at SMI company, including five years as a developer and three years as a Sales and Marketing Manager He has been a dedicated salesman at SMI since its inception in 2016.
Duong Tran An An: over 3 years with a lot of experience Do you think that SMI product is potential or not?
Nguyen Tuan Khai expresses confidence in the promising future of SMI products, highlighting significant investments such as over $40 million for QA Symphony The company is actively working on developing new products to attract further investment.
Duong Tran An An: Sound great! Could you please share your opinion about sales results of SMI
Since 2017, Nguyen Tuan Khai has experienced a significant decline in sales performance, prompting an investigation into the root causes of the issue The instability in product quality has led to numerous customer complaints, resulting in the loss of many clients and a subsequent reduction in sales revenue.
And “failure product” has been impacted a negative result on sales performance of Sale team and the reputation of the company
Duong Tran An An: Could you share the reason why SMI production team cannot get high revenue during 2017 until now? h
Nguyen Tuan Khai believes that the inability to sell the new product stems from inconsistent quality and a lack of differentiation within the same price range as competitors As a result, the sales team struggles to impress potential customers or effectively communicate the unique value of the new product or service.
To create a high-quality product, it is essential to thoroughly understand customer needs Having transitioned from a developer to a salesman, I recognize the importance of this insight Initially, I was overconfident, believing that testing alone would suffice to grasp all aspects of the new product.
Duong Tran An An: What are solutions that the company has taken to improve the situation Mr
Nguyen Tuan Khai, an expert in investment management at SMI, emphasizes the importance of interpersonal skills in enhancing consulting and deal-closing abilities However, the proposed training solution may not effectively cater to the diverse needs of the sales team, which consists of both inexperienced and seasoned professionals While fresh salespeople may benefit from learning opportunities, experienced individuals may find the approach less relevant.
Duong Tran An An: What are your opinions about the effectiveness of the solution? Could you share any alternative you think should be taken to solve this problem?
Nguyen Tuấn Khải believes that the majority of SMI consultants are seasoned sales professionals with backgrounds in the IT industry To enhance product quality, these individuals require a disciplined KPI system that encourages daily engagement with product functions.
Interviewee: Mr Cao Minh Nhat
Title: Director of SMI Technology
Status: currently working for SMI company
Duong Tran An An: It is my great honor to be here in your office for this interview Please start by talking something about yourself sir!
Cao Minh Nhat: You’re welcome guy! My name is Cao Minh Nhat I am Managing director of
Prodution Team I have been worked for SMI 10 years from manager to now
Duong Tran An An: Could you tell me the current situation of the production team
Cao Minh Nhat: Yes, of course In recently we have no special product to release to the market
In the ever-evolving technology landscape, innovation and widespread adoption are crucial to fulfilling customer needs However, over the past three years, the Production department has struggled to deliver new products that achieve the high performance and results of previous offerings.
Product quality is crucial for ensuring customer satisfaction and driving company success When products maintain consistent quality that aligns with client needs, sales and marketing teams can confidently promote them Furthermore, stable quality leads to higher customer satisfaction, whereas failing products hinder client engagement and sales efforts.
Duong Tran An An noted that the sales reports indicated Ho Chi Minh's sales results fell short of expectations He inquired about the reasons behind the inability to achieve higher sales figures.
Cao Minh Nhat attributes the results to several interconnected factors, including underperformance, a lack of updated technology, unsuccessful products, high turnover rates among young employees, the absence of key performance indicators (KPIs), and employee dissatisfaction with performance appraisals.
Duong Tran An An inquired about the solutions implemented to address existing issues, to which Cao Minh Nhat responded that numerous problems have been identified He emphasized that the team is actively working to identify the root causes and has decided to prioritize performance management for the production team as a key strategy for improvement.
Duong Tran An An: Have you ever think about other alternative solution?
Cao Minh Nhat: We also think about the training and upgrade the performance appraisal and build 360 degree feedback to support to current situation h
Interviewee: Ms Le Thi Phuong
Title: HR Manager in Ho Chi Minh
Status: currently working for SMI company
Duong Tran An An: Thank you for participating in this interview with me Could you introduce something about yourself?
Le Thi Phuong: My name is Le Thi Phuong, I currently work for SMI company as a HR Manager
Duong Tran An An: Please tell me your own opinion about the production team?
Le Thi Phuong: Well, I think that currently we are lacking of KPI to manager the performance of Production team and staff are not satisfy with their performance appraisal
Duong Tran An An: Could you share the reason why SMI is facing challenges with this
Le Thi Phuong: Firstly, In my own opinion, SMI production team is a special department
SMI's product team can effectively fill headcount gaps in the outsourcing department when employees resign, ensuring a balanced resource allocation across projects.
Secondly, without KPI so their performance appraisal may be bias from the appraiser
Duong Tran An An: In your point of view, what is the most important causes? Why do you think so?
Le Thi Phuong emphasizes that the primary challenge lies in effectively managing the performance of potential developers She has experience in addressing conflicts between leaders and team members regarding their performance evaluations.
Team products' target are frequently changed to match the nature of the work and ineffective performance appraisal is demotivated the employee to perform the best performance”
Duong Tran An An: What are solutions that the company has taken to fix the problem?
Le Thi Phuong: You know, we are in the progress of building KPI for Production team To manage their performance and evaluate their performance better
Duong Tran An An: So, In your point of view, what should be better alternative solutions?
Le Thi Phuong: A new Performance appraisal or 360 degree of feedback tool for us to keep in touch with all member and to connect all employees together h
Interviewee: Mr Nguyen Minh Tam
Status: currently working for SMI company
Duong Tran An An: Nice to meet you sir! Could you introduce something about yourself? Nguyen Minh Tam: Hi! I’m Nguyen Minh Tam I manage Production team department I spent
10 years with SMI when I graduated from University until now
Duong Tran An An: Thank you for giving a little time for this interview What is the problem that the team is facing to?
Nguyen Minh Tam highlights the challenges faced in product and service testing, noting frequent errors and a low success rate that prolong the process Despite these obstacles, he remains optimistic that with dedication and hard work, these issues can be resolved effectively.
Duong Tran An An: Could you please share more detail about test results of some tools, apps of SMI team
Nguyen Minh Tam: According to reports that the test results from Customers is decreasing
Most of them are neutral with our new product for testing automation, cleaning data, blockchain or personal healthcare system, etc
Duong Tran An An: Could you share the reason why it does not get the high result?