THEORETICAL BASIS OF THE LOYALTY OF STAFF AND
The concept of loyalty
Employee loyalty refers to an individual's commitment to remain with an organization for the long term, often choosing to stay even when presented with more lucrative salary offers from competitors.
Johnson (2005) highlights that employees exhibit greater professional loyalty to their employers, indicating a significant shift in the employee-employer relationship that necessitates a reevaluation of the concept of loyalty Similarly, Tran Thi Kim Dung and Nguyen Thi Mai Trang (2007, p.19-20) support this notion, emphasizing the evolving dynamics in workplace relationships.
There have been many studies of employee loyalty with many different approaches
According to Allen, N.J., & Meyer, J.P (1990) focused on 3 psychological states of employees when connected with the organization Staff can be loyal to the organization:
- Because of their true feelings, they will stay with the organization even if other places pay higher wages
- Because they don't have a chance to find a better job
- And maybe because of the moral standards they pursue
Employee loyalty, as defined by the Loyalty Research Center (1990), refers to an employee's commitment to organizational success and their belief that remaining with the organization is their best choice Loyal employees not only engage in efforts to thrive within the company but also refrain from actively seeking new job opportunities or responding to enticing offers from other employers Essentially, employee loyalty signifies a genuine desire to stay with the organization and an intention not to leave.
The intention to leave a job refers to an employee's desire to transition from their current workplace to a new one (Vo Quoc Hung & Cao Hao Thi, 2010) Employees typically seek organizations that fulfill their needs and provide job satisfaction; when these needs are unmet, dissatisfaction arises, leading to an inevitable intention to leave for alternative opportunities This highlights a significant relationship between employee needs, job satisfaction, and their loyalty to the organization (Tran Kim Dung, 2005) Therefore, understanding the theory of employee needs and satisfaction is essential for examining its impact on employee loyalty, which serves as the foundation for the hypotheses proposed in this study.
Expression of loyalty, measurement of loyalty [12]
Employees often hesitate to voice their disagreements with their bosses, particularly when they are new to the company and eager to comply with directives However, this outward compliance does not necessarily indicate satisfaction; in fact, when dissatisfaction builds up, it can lead to employees resigning In contrast, direct reports who work closely with their bosses may express mixed opinions, demonstrating loyalty by constructively pointing out areas for improvement, ultimately aiming to enhance the workplace environment.
Treating your boss as a person fosters a healthier workplace dynamic While employees often view their bosses as powerful figures, loyal employees recognize the importance of understanding their boss's multifaceted nature They see their boss not just as a leader but as someone who genuinely wishes to support their career and personal goals This mutual understanding creates a more collaborative environment, where both parties strive for excellence in their professional and personal lives.
Criticizing your boss in front of others can undermine their authority and erode the respect they have earned While some employees may vent frustrations as a stress relief, this behavior often stems from a belief that they are equal to or superior to their boss In contrast, loyal employees maintain respect for their leaders, refraining from negative comments, even when the boss is not present Demonstrating professionalism and loyalty is essential in fostering a positive work environment.
Disagreeing with your boss in a private setting is vital for a healthy organizational culture Loyal employees feel empowered to express their opinions, weighing the pros and cons of their boss's decisions They trust that their boss values their input for the betterment of both the individual and the company Unlike less committed employees, loyal team members approach these discussions with skill and discretion, fostering a constructive dialogue.
Loyal employees openly support their boss's decisions, even when they may personally disagree Instead of attempting to undermine their boss, they actively work to demonstrate that their leader is making the right choices, fostering a positive and unified work environment.
When loyal employees decide to leave their jobs, it's often to pursue better opportunities, explore new fields, start their own businesses, or seek lifestyle changes Understanding the impact of their departure on their boss and the team, these employees typically give advance notice, allowing their employer time to prepare for the transition No boss wants to lose dedicated staff, but recognizing the reasons behind such decisions can foster a more supportive work environment.
The role and benefits of loyalty to the organization [9]
Employee satisfaction plays a crucial role in organizations of all sizes, significantly impacting both the employees and the organization itself The degree and intensity of this satisfaction are vital for fostering a positive work environment and enhancing overall productivity.
For organizations, Employee satisfaction affects all aspects of corporate operations including:
Enhancing employee performance is crucial for organizational success When employees are satisfied with their work, they exhibit greater commitment and a proactive approach to learning and development This heightened engagement not only boosts individual productivity but also contributes significantly to the overall goals of the company.
To ensure stability in a company's workforce, it is essential to foster employee satisfaction, as content employees are more likely to remain loyal and less swayed by external job offers Furthermore, when employees feel a sense of belonging, they are inclined to invest in the collective well-being of the organization, actively contributing to its growth and safeguarding its values.
Third, when employees are satisfied with their work, they will treat customers better and therefore customer satisfaction is also greater
Fourth, the staff will communicate the company outside and that helps the company attract talents, build good image in the eyes of customers and partners
Fifth, the Company will save money for training new candidates and recruiting candidates
The Company aims to reduce errors and mitigate process risks by fostering a workforce of responsible and enthusiastic employees who are committed to continuously improving their performance.
Employee satisfaction is crucial for retaining talent and fostering a genuine passion for their work When employees feel valued, they become more invested in their roles, focusing on their responsibilities rather than external concerns This sense of ownership motivates them to strive for excellence and seek recognition from their organization Additionally, satisfied employees are more likely to engage positively with customers, leading to stronger relationships and improved business outcomes.
Factors affecting loyalty
Wages represent a significant expense, particularly in the service sector where they comprise approximately 50% of total costs However, they also serve as a valuable asset by motivating employees to enhance their performance Competitive remuneration can positively influence work behavior, leading to increased productivity and reduced turnover rates Ultimately, effective wage structures not only support employee retention but also drive overall organizational success.
Many companies aim to offer higher salaries to attract top talent, believing that competitive wages will draw qualified candidates Conversely, some businesses adopt lower salary policies due to financial difficulties or a perception that they do not require skilled workers for simple tasks However, research indicates that paying low wages can lead to increased costs, as it often results in decreased productivity and higher turnover rates, with valuable employees seeking better-paying opportunities elsewhere.
According to Tran Kim Dung (2003), remuneration remains a significant challenge for managers across all businesses While enterprises may have varying perspectives and objectives in establishing a pay system, they typically aim to achieve four fundamental goals.
To attract top talent, businesses must offer competitive salaries, as this is a crucial factor for candidates when deciding whether to accept a job offer Companies that provide higher wages are more likely to draw skilled candidates from the local market.
To retain valuable employees, businesses must prioritize not only competitive salaries but also fairness in compensation practices When employees perceive inequities in pay, it can lead to feelings of discomfort, frustration, and even depression, ultimately resulting in higher turnover rates Ensuring equitable pay structures is essential for fostering a positive work environment and enhancing employee loyalty.
Motivating and engaging employees is crucial; if company policies and governance fail to recognize and reward hard work and good performance, employees may become disengaged and unmotivated This lack of recognition can lead to a passive work environment, ultimately affecting overall productivity and morale within the organization.
Understanding labor pay regulations is essential for enterprises, as it encompasses key issues such as minimum wage standards, working hours, child labor laws, wage allowances, and social welfare regulations including social insurance, sickness benefits, maternity leave, and compensation for labor accidents.
Employees seek recognition for their contributions in various forms, as not all individuals are motivated solely by financial rewards While monetary compensation may effectively incentivize low-skilled workers and those focused on material gain, it has limited influence on those who thrive on challenging tasks Therefore, effective rewards should be tailored to meet the diverse needs and motivations of employees.
The expectation theory suggests that employees are unlikely to strive for rewards if they perceive them as unattainable Consequently, material incentives should be structured to foster employee confidence in the relationship between their efforts and the rewards they can achieve.
To ensure employee motivation and engagement, rewards must reflect both personal and social justice, meaning that individuals should perceive their efforts as fairly compensated compared to their own contributions and those of their peers in similar circumstances When employees feel that rewards are unjust, it can hinder their productivity and overall workplace morale.
In addition, to encourage employees 'efforts towards achieving the organization's objectives, rewarding must be associated with the results and effectiveness of the performance of employees' tasks
Welfare plays a crucial role in demonstrating a company's commitment to the well-being of its employees, fostering loyalty and attachment Key benefits provided by businesses include social and health insurance, retirement plans, paid leave and holidays, subsidized meals, support for disadvantaged employees, and gifts for special occasions such as birthdays and weddings.
According to Nguyen Huu Than (2001), welfare encompasses two primary components: regulatory measures and voluntary benefits implemented by companies to enhance employee motivation and attract talent Voluntary benefits include health insurance programs, services for hazardous conditions, and subsidies for childcare centers, all aimed at fostering a supportive work environment While each company may offer various initiatives, the overarching goal remains the same: to encourage employee commitment and ensure a secure workplace.
A positive working environment is crucial for employee satisfaction and productivity, as it directly impacts personal comfort and task fulfillment Workers generally prefer safe, favorable conditions free from hazards, with optimal temperature, lighting, and noise levels Additionally, many employees value proximity to home and seek modern, clean facilities equipped with appropriate tools to enhance their work experience.
Work provides more than just financial rewards; it fulfills the need for social interaction among employees Collaborative and supportive environments significantly enhance job satisfaction Additionally, leadership behavior plays a crucial role in employee contentment Leaders who are knowledgeable, approachable, and recognize employee achievements while valuing their input contribute to higher levels of satisfaction in the workplace.
Effective communication is crucial for fostering employee commitment to the business Administrators should cultivate a friendly atmosphere and build trust by respecting employees, valuing their opinions, and encouraging open dialogue By promoting a culture of courtesy and genuine respect, leaders can enhance employee engagement, stimulate productivity, and unlock their full potential.
Theories aimed at understanding the factors affecting employee loyalty
Abraham Maslow's Hierarchy of Needs, proposed in 1943, is a foundational theory in management and motivation, emphasizing that human behavior is driven by a series of needs organized in a prioritized hierarchy This model categorizes human needs into five distinct levels, ranging from basic physiological requirements to higher-level psychological needs.
Physiological needs are fundamental requirements for survival, including essentials like food, air, housing, and clothing In the context of an organization, these needs are primarily reflected through salaries and benefits provided to employees.
Safety needs encompass various aspects, including personal safety from threats like war and natural disasters, financial security against economic crises and unemployment, and health safety to prevent sickness and accidents Within an organization, these needs manifest as a safe working environment, labor protection, and the assurance of long-term job stability.
Once physiological and safety needs are met, individuals seek to fulfill their social needs, which encompass the desire for relationships with friends, family, and community engagement These social connections play a crucial role in enhancing overall well-being and fostering a sense of belonging.
Respecting individual needs is essential in any organization, as it fosters a culture of acceptance and value among employees By acknowledging and appreciating their contributions, organizations can enhance employee engagement and responsibility, ultimately leading to a more organized and productive work environment.
The demand for self-affirmation represents the peak of Maslow's hierarchy of needs, highlighting the essential human desire to express one's individuality and potential At this level, individuals seek personal development and self-improvement, which is crucial in organizational contexts This need manifests through opportunities for training, coaching, career advancement, and fostering creativity, enabling employees to enhance their skills and capabilities.
A Maslow divided the needs into two levels: high and low Low-level needs are physiological and safety and security needs High-level needs include social needs, need for respect and the need to assert themselves
A Maslow said that satisfying lower-level needs is easier than satisfying high-level needs because low-level needs are limited and can be satisfied from the outside He argued that first-class needs work, it requires satisfaction and so it motivates people to act - it is a motivating factor When these needs are satisfied, it is no longer a motivating factor, then higher level needs will appear
Maslow's demand theory highlights the necessity for managers to recognize the specific level of needs their employees are experiencing By understanding these needs, managers can create targeted strategies to satisfy employees, ultimately aligning their motivations with the organization's goals.
1.5.2 Two-factor theory by F Herzberg
Frederick Herzberg's two-factor theory, developed through surveys of accountants and engineers, identifies key factors influencing job satisfaction By interviewing individuals about their work experiences, Herzberg distinguished between positive (satisfied) and non-positive (dissatisfied) factors The findings reveal two groups of factors that have opposing effects on employee satisfaction, as detailed in the accompanying table.
Table 1Motivating and maintaining elements of F.Herzberg
Achievement Company management policies and regulations
F Herzberg's two-factor theory makes sense for managers to please employees Managers must first improve the retention factors before they want to increase their employee motivation Each person will have different feelings about these two groups of factors, because it may be one factor that motivates this person but is the maintenance of others and the tendency of motivating factors over time becomes weak Maintenance factor Therefore, managers need to always find solutions to enrich the work of employees because that will contribute to creating more motivational factors
1.5.3 Expected theory of Victor H.vroom
Victor H Vroom's theory posits that encouragement stems from an individual's expectations, influenced by their desire to engage with their job and their perceptions of how to achieve success To effectively motivate employees, it is crucial to understand their expectations and align them with organizational goals Managers should focus on creating desired outcomes, fostering a need for implementation to meet these goals, ensuring achievable performance levels, linking expected results with necessary actions, evaluating varying expectations, and providing rewards that are attractive and equitable for all.
The fair doctrine asserts that employees evaluate their contributions (input) against their rewards (output) and compare their input-output ratios with those of their peers When these ratios align, workers perceive fairness; however, discrepancies lead to feelings of injustice In the presence of perceived unfairness, employees are motivated to take action to rectify the situation.
Fair doctrine implies that when employees visualize injustice, they may have one or more of the following five possibilities:
Distort the inputs or outputs of yourself or others
Behave in a way to make others change their inputs or outputs
Behave in a way to change their own inputs or outputs
Choose another comparison criterion for comparison
The doctrine of fairness emphasizes that individuals care not only about the quantity of rewards they receive but also about how these rewards compare to those of others People evaluate their inputs—such as effort, experience, education, and talent—against their outputs, including wages, salary increases, and recognition When individuals perceive discrepancies in their input-output ratios compared to others, it creates tension, which serves as a motivator for them to seek what they believe is fair and satisfactory.
Employee motivation is significantly affected by both relative and absolute rewards When employees perceive unfairness, they are likely to take action to address it, which can lead to varying outcomes such as changes in productivity, quality of work, absenteeism, or even voluntary turnover.
1.6 Some previous research on employee loyalty
The fact shows that organizational leadership and culture have an impact on the loyalty of specific employees:
General overview of ANSV Co., Ltd
2.1.1 The process of formation and development of the Company
ANSV was established in July 1993 in the joint venture cooperation between Alcatel Group (now Alcatel-Lucent) and Vietnam Post and Telecommunications Corporation (now the VNPT group)
In 1997, the Company expanded its production, extending its operation time to July 2016
In 2000 Alcatel transferred new technology to produce 1000 E10 systems
In 2006, Alcatel transferred its MSAN production technology, and as of August 24, 2011, Vietnam Post and Telecommunications Industry Technology Joint Stock Company (VNPT Technology) acquired all rights and responsibilities from Alcatel-Lucent at ANSV, holding a 51.2% stake, while VNPT owns the remaining 48.8%.
For over 18 years, ANSV has been evolving within its traditional operational sectors, leveraging its extensive experience and resources The company is committed to further expanding its activities to enhance the development of technology, industry, telecommunications, and information technology services.
ANSV has broadened its collaboration beyond its traditional partner, Alcatel-Lucent, by partnering with leading technology companies like IBM, Convergys, and Oracle This strategic expansion aims to develop and produce innovative hardware and software solutions tailored to meet the demands of both domestic and regional markets.
Research, development, production and repair of electrical, electronic, telecommunications, information and communication equipment, development of digital content industry;
Trading in telecommunications, information and communication technology, digital content industry business;
Trading in electrical products, electronics, telecommunications, information technology and communication;
Survey, consultancy, design, construction, installation, maintenance and technical support of telecommunications, information and communication technologies;
General contractor of telecommunications, information and communication technologies;
Consulting, research, training, vocational training and application of scientific and technological advances in the field of electricity, electronics, telecommunications, information technology and communication;
Importing and exporting, supplying materials and equipment for projects in the fields of telecommunications, information technology and communication;
2.1.2 Organizational structure of the Company
2.1.3 Some main business results of the Company
Business results of ANSV over 3 years, according to the following table:
Finance and accounting department (DF)
Business center (BC) Technological Business
Solutions & software development center (SSDC)
Diagram 1 The organizational structure of the company
REVENUE OF SALES AND SUPPLY OF SERVICES 2,240 2,710 2,242
NET REVENUE ON SALE OF GOODS AND SUPPLY
CAPITAL PRICE OF SALE AND SERVICE SUPPLY 1,974 2,476 2,083 GRADE PROFIT ON SALES AND SERVICE SUPPLY 261 233.8 155.359
Enterprise Cost Management 97.012 103.318 80.081 Net profit from business activities 114.126 75.511 28.112
TOTAL ACCOUNTING PROFIT BEFORE TAX 115.149 78.1 25.544 CURRENT INCOME TAX EXPENSES 23.06 15.683 5.374
PROFIT AFTER ENTERPRISE INCOME TAX 91.645 62.203 20.17
Table 2 Extracting business results from 2016 to 2018
(Source: data from accounting department of ANSV Co., Ltd.)
The continuous growth in production and business not only secures current income for workers but also fosters confidence and expectations for future employment and earnings However, while these indicators illustrate average growth rates, they fail to provide an in-depth analysis of individual, group, and departmental performance within the production and business sectors.
We see the profits of the ANSV increased by an average of more than 10% per year but the main contribution was profit from telecom services business.
Research design
The qualitative research phase aims to refine the scales from prior studies and create a tailored interview process that aligns with the unique context of ANSV Co., Ltd., grounded in the initial objectives and theoretical framework.
(Discussing hand in hand with the comments of teachers, n = 30)
The basis of related theory
- With 270 questionnaires, collecting 248 copies, there are 237 copies in accordance with survey conditions
- Encryption, data entry and data cleaning
- Preliminary inspection of scale with Cronbach’s Alpha coefficient
(To edit the interview table, n = 20)
The author developed a preliminary interview table and utilized it to conduct qualitative research through direct interviews with 30 employees, including those from ANSV Co., Ltd To facilitate the survey, the author reached out to the staff via email and conducted direct interviews or phone calls.
The author developed a preliminary interview table based on the proposed research model and conducted a survey with 20 company staff to ensure their comprehension and ability to respond to the questions This process led to the creation of an official interview table for quantitative research.
Subjects of the survey are employees of the company who are working at ANSV Co., Ltd The company has 270 employees Therefore, the author selected a survey of 270 employees
Selecting samples by convenient methods and ensuring relative proportion of employees by member center of ANSV Co., Ltd (9 centers) and employees who have retired from ANSV Co., Ltd
The author collaborated with the HR department to distribute a questionnaire, directly guiding staff on how to complete it within 30 minutes For former employees of ANSV Co., Ltd., the author sent the questionnaire via email, requesting their participation in the survey.
Following the collection of questionnaires, a thorough review was conducted, leading to the rejection of certain responses The data was then encoded, inputted, and cleaned using SPSS software Utilizing SPSS, comprehensive data analysis was performed, which included descriptive statistics, frequency tables, graphs, reliability checks of scales, exploratory factor analysis, and other statistical evaluations.
The measurement scale for these research factors is developed based on previous studies conducted by Tran Kim Dung and Tran Hoai Nam (2005), Tran Kim Dung and Nguyen Thi Mai Trang (2007), and Vo Quoc Hung and Cao Hao Thi.
In 2010, the author conducted qualitative research involving in-depth interviews with employees of ANSV Co., Ltd., leading to substantial modifications of existing scales to better align with the company's specific needs.
Scale of employee satisfaction: The employee satisfaction scale includes 6 component scales and is denoted as follows:
1 Salary bonus component: Pay symbol
2 Composition of working environment: Env symbol
3 Training and promotion components: Pro symbol
6 Composition Work nature: Wor symbol
All observed variables in the components utilize a 5-point Likert scale, where level 1 signifies complete disagreement with the statement, and level 5 indicates complete agreement.
The salary component scale, developed from the Wage and Welfare scale by Tran Kim Dung & Tran Hoai Nam (2005) and supported by qualitative interviews, includes five observed variables (Pay1 to Pay5) to measure employee perceptions of fairness in salary and bonuses This scale assesses how employees recognize their dedication and contributions through compensation.
Symbol Statements Pay1 You can see that the company has a better welfare regime than other companies in the same industry
Pay2 You are satisfied with the bonus policy of the Company
Pay3 Wages are paid fairly and reasonably
Pay4 Your salary is paid in proportion to the results of your work
Pay5 You can live well with your current salary
Figure 12 Scale of remuneration components
Scale of work environment: Scale Working conditions in the study of Tran
Kim Dung and Tran Hoai Nam (2005) identified four observed variables, labeled Env1 to Env4, to measure the working environment component scale This scale assesses employee satisfaction with their work environment Qualitative research findings indicate that the questions and statements are clear, easy to understand, and accurately capture the intended measurement content.
Evn1 Work does not require frequent overtime
Evn2 Work is not under high pressure
Evn3 Work is stable, not worry about losing jobs
Table 3 Scale of working environment components
The training and promotion component scales are evaluated through six observed variables, Pro1 to Pro6, derived from the original Thang Tien scale in the research by Tran Kim Dung & Tran Hoai Nam (2005) These scales assess employee satisfaction regarding the company's training policies, orientation, and staff development Qualitative research discussions reveal that employees feel assured of their promotion opportunities when the company's training and promotion policies are applied consistently However, any changes in these policies could alter their development paths, potentially rendering their efforts ineffective To address this concern, the observation variable Pro3, "The Company consistently and fairly implements policies," has been incorporated into the training and promotion component scale.
Pro1 The company gives you many opportunities for advancement
Pro2 The company gives you many opportunities for personal development
Pro3 The company implements promotion policies consistently, equal
Pro4 You are trained by the company, providing the necessary knowledge / skills for the job
Pro5 You are satisfied with the training programs in the Company
Pro6 The company regularly invests to improve the qualifications for employees
Table 4 Component scale Training and promotion
Scale of Leadership: Developing from the scale "Thinking about your direct leader, you feel " in the study of Tran Kim Dung & Nguyen Thi Mai Trang
The Leadership scale developed by Tran Kim Dung and Tran Hoai Nam (2005) consists of six observed variables (Sup1 to Sup6) designed to evaluate employee satisfaction with leadership Qualitative research findings indicate that employees comprehend the questions posed, which effectively address the dynamics between employees and leaders Additionally, the questions explore the impact of leadership style on employee motivation, the execution of corporate governance functions, and the level of support provided by leaders to their staff.
Sup1 The superior's style helps you to have good motivation to work
Sup2 Employees are supported by superiors
Sup3 Employees are highly respected and trusted at work
Sup4 Leaders have polite and gentle behavior
Sup5 Employees are treated fairly, regardless
Sup6 Leaders always recognize the contribution of employees in a timely manner
Table 5 Scale of Leadership component
The Colleagues component, based on the research by Tran Kim Dung and Tran Hoai Nam (2005), includes five observed variables, updated from the original four The term "Colleagues of friendly brothers and sisters" has been revised to "Brothers and Sisters feel the company is a friendly workplace." Participants indicated that their motivation to work is significantly influenced by their colleagues, as these relationships encourage them to enhance their skills and gain knowledge through shared experiences Consequently, the new observed variable "You feel that there are many motivations to improve your skills when working with your colleagues" has been incorporated, leading to a comprehensive measurement of the Colleagues component from Cow1 to Cow5.
Cow1 You and your colleagues are willing to cooperate and work well together
Cow2 Your colleague is often interested in helping each other
Cow3 Your colleagues are comfortable
Cow4 I feel a lot of motivation to improve my profession when I can work with his colleagues
Cow5 I feel that the Company is a friendly workplace
Table 6 Scale of Colleagues components
The component scale for the nature of work is derived from the study by Tran Kim Dung and Tran Hoai Nam (2005) and originally includes six observed variables However, for the specific context of ANSV Telecommunication Equipment Company Limited, three observable variables, labeled Wor1 to Wor3, have been selected This scale effectively evaluates the alignment between employees' suitability for their roles and their fit within the company.
Symbol Statements Wor1 You find your job very interesting
Wor2 You have the right and responsibility in accordance with the job you are undertaking
Wor3 Your job is to allow you to maximize your personal ability
Table 7 Scale of components Nature of work
The Staff Loyalty Scale, developed by Tran Kim Dung and Tran Hoai Nam (2005), assesses employee loyalty through three observed variables, labeled Loy1 to Loy3 This scale effectively gauges the degree of employee engagement within the company, highlighting the importance of fostering a loyal workforce for organizational success.
Loy1 Do you intend to stay long with the company?
Loy2 You will still stay with the company if there are other places that offer relatively more attractive wages
Loy3 You consider the company as your second home
Current status of loyalty analysis at ANSV Co., Ltd
2.3.1 Create loyalty for employees through Rewards and recognition
The Labor Union of ANSV oversees the annual emulation and commendation process, focusing on the regulations for recognizing advanced workers and competitors However, the current reliance on sentiment-based meetings and voting does not effectively motivate employees to enhance their labor productivity.
2.3.2 Creating loyalty for employees through Income
In recent years, ANSV Co., Ltd has overlooked the development of performance evaluation indicators for employees, which has hindered the establishment of a cohesive labor and compensation policy To address this issue, the company is implementing a work-based payroll system that aligns with employee responsibilities, aiming to enhance motivation and productivity ANSV's salary policy is structured around a fundamental formula: "Salary = Base Salary + Bonus + Benefits," ensuring a comprehensive approach to employee compensation.
2.3.3 Creating loyalty for employees through the Work Environment
The office design at ANSV Co., Ltd features an open space layout that facilitates seamless communication and collaboration among departments Company updates and important news are shared through the corporate intranet and distributed via an internal newsletter, ensuring employees stay informed about the business's status However, there is a pressing need to enhance workplace safety, as current labor protection measures are inadequate To address this, ANSV Co., Ltd should invest in comprehensive fire and explosion prevention equipment, as well as additional resources for the generator room and employee accommodations.
2.3.4 Creating loyalty for employees through Colleagues Relationship
ANSV Co., Ltd is committed to fostering a collaborative and friendly work environment where employees and managers communicate openly and share a common vision The company promotes a culture of cooperation, mutual understanding, and support, ensuring that all team members enjoy equal relationships and mutual respect in the workplace.
2.3.5 Creating loyalty for employees through Training and promotion opportunities
Many organizations conduct numerous training courses for employees without focusing on their specific professional needs or ensuring the applicability of the learned skills Each year, employees are also enrolled in traditional educational programs, such as Bachelor's, Master's, and PhD degrees, aimed at enhancing their qualifications However, these training initiatives often come with high costs and low effectiveness, as participants tend to view passing exams merely as a means to secure salary increases, leading to a more superficial approach to learning rather than genuine professional development.
Many employees lack clarity on promotion conditions, as positions like department directors and deputy heads are often filled externally This leaves little opportunity for internal candidates in roles such as intermediate management or team leaders, leading to a sense of frustration among staff Despite their dedication and hard work, employees feel that they can only aspire to be recognized as excellent, rather than being promoted.
2.3.6 Create loyalty for employees through Relationship with superiors
ANSV Co., Ltd.'s Board of Directors is committed to fostering a friendly and fair workplace, promoting courteous communication among employees, customers, and partners By encouraging collaboration and open dialogue, the company aims to build strong relationships and address challenges effectively This cooperative and innovative spirit is focused on generating value for ANSV's shareholders.
Research process
Analysis of multivariate regression models
- Check the Cronbach’s alpha coefficient of the total variable
- Types of variables with small correlation variables
- Types of variables with small factor loading
Design quantitative research
2.5.1 Methods of information collection and sample size
Data is gathered through direct investigations of current employees within the company This involves face-to-face interviews and various interview techniques, ensuring that a sufficient sample size is surveyed for accurate results.
Samples are selected by the probability and inconvenience method, this sampling method allows investigators to minimize costs and time to meet the requirements of the timeliness of analysis
When selecting a sample for research, it's essential to choose an appropriate sampling method based on the study's needs Haricot (1998) emphasizes that a minimum of five samples per observed variable is necessary for exploratory factor analysis, with an estimated 32 observed variables in this case This calculation suggests a required sample size of 160 However, to minimize statistical errors and account for potential invalid responses, the final sample size was determined to be 237.
This document utilized SPSS software for data analysis, employing statistical techniques such as hypothesis testing, factor analysis, regression analysis, and ANOVA The processing of data in SPSS follows a systematic approach to ensure accurate and reliable results.
Diagram 3 Process of data analysis with SPSS
Analysis of discovery factors (EFA)
Inspection of models and adjustments
After identifying that the sample types do not align with the initial requirements, we conduct a frequency allocation analysis to determine if the subsequent variables exhibit noisy values that fall outside the specified range.
Check for duplicated object patterns and duplicate sample types
Check the frequencies for missing values and ensure that the missing values of a variable are as small as possible
To effectively utilize the collected data patterns in a regression model, it's crucial that the model's variables adhere to the assumption of normal distribution This assumption is fundamental in multivariate analysis, making it essential to evaluate this criterion prior to performing any quantitative analysis.
To assess satisfaction, a normal distribution test was conducted on all variables, analyzing the frequency distribution patterns along with Skewness and Kurtosis parameters (Hair et al., 2006) A Skewness and Kurtosis range of ± 1 is deemed optimal, while values within ± 2 are considered acceptable for statistical analysis.
2.5.2.3 Test the reliability of the factor groups
This approach enables analysts to eliminate inappropriate variables and reduce irrelevant data during the research process, while also assessing the scale's reliability using the Cronbach’s Alpha coefficient It focuses on the correlation between variables to ensure the accuracy of the findings.
A scale with a total score less than 0.3 will be discarded, while a Cronbach’s Alpha coefficient of 0.6 or higher is acceptable for new concepts (Hoang Trong & Chu Nguyen Mong Ngoc, 2008) Typically, scales should have a Cronbach’s Alpha ranging from 0.7 to 0.8, with many researchers considering a reliability score of 0.8 to 1 as indicative of a high-quality measurement scale.
The reliability of the scale was evaluated using the Cronbach’s Alpha coefficient, leading to the removal of unreliable variables To condense and summarize the data, exploratory factor analysis was employed, which is essential for identifying key variables for research and understanding the relationships between them.
In exploratory factor analysis, the Kaiser-Meyer-Olkin (KMO) value serves as a crucial index for assessing the appropriateness of the analysis KMO values should ideally range from 0.5 to 1, indicating that factor analysis is suitable for the data Conversely, a KMO value below 0.5 suggests that the data may not be suitable for factor analysis.
Factor analysis utilizes Eigenvalues to identify the number of factors to retain in the model, with only those having an Eigenvalue greater than 1 being considered significant An Eigenvalue indicates the amount of variation explained by a factor, and factors with an Eigenvalue below 1 do not contribute to a better summary of information compared to the original variables.
The component matrix, also known as the factor matrix, is a crucial element of the factor analysis table, particularly when considering the rotated component matrix This matrix includes coefficients that normalize variables through factors, where each variable acts as a polynomial of these factors The factor loading coefficients illustrate the correlations between variables and factors, indicating a strong relationship when the coefficient exceeds 0.5, as required by the principal components factor extraction method.
2.5.2.5 Multiple regression analysis tests the theoretical model
After conducting exploratory factor analysis (EFA) to identify key factors, it is essential to verify the assumptions required for multiple linear regression models This includes checking standardized residuals and performing the variance inflation factor (VIF) test to assess multicollinearity.
- VIF) If assumptions are not violated, multiple linear regression models are built And the adjusted R2 coefficient (adjusted R square) shows how well the regression model is built
2.5.2.6 Inspection of violations of regression hypothesis
The author employs the ANOVA test to assess the model's suitability against the original data set A significance level of less than 0.05 indicates that the regression model is appropriate for the data.
Multicollinearity occurs when independent variables in a model are highly correlated, making it challenging to determine the individual effect of each variable This correlation can distort the interpretation of the coefficients associated with the independent variables To ensure the presence of multicollinearity, it is essential to analyze the correlation between these variables.
Design qualitative research
Preliminary research is a qualitative study using focus group discussion techniques with the participation of a group of 7 employees of ANSV Co., Ltd The purpose of focus group discussion is to:
- Discover factors that can affect the loyalty of employees working at the corporation
To ensure clarity, complete the sentences in the questionnaire effectively The author guides the discussion, allowing each respondent to share their perspectives based on a structured format Questions will focus on loyalty, prompting employees to express their views Each individual contributes their opinions, which are documented until a respondent fails to introduce a new idea, repeating previous responses instead If new insights emerge, the dialogue continues until no fresh elements are presented, signaling the conclusion of the study.
The findings serve as a foundation for refining the proposed research model and for creating preliminary scales and questionnaires These tools will be utilized in interviews with approximately 10 employees to evaluate the comprehensiveness of the content and the clarity of the statements.
(questions) in the scale and their ability to provide information, based on that, corrected into the official scale used in quantitative research
In particular, the content evaluation is expressed in the following aspects:
Does the respondent (interviewee) understand the statements?
Does the respondent have information to answer?
Is the respondent willing to provide information?
Evaluation of forms is to check the relevance of words, the syntax is used in statements to ensure consistency, clarity and not to cause confusion for respondents
The members of the discussion group agreed:
Affirm the factors that affect their loyalty which are mentioned in chapter 2 However, its content with adjustment after the qualitative research process is summarized in the section below
The author has developed a research concept scale by adapting previous draft scales into coherent sentences This new scale utilizes a 1-5 Likert format, where 1 signifies complete disagreement and 5 indicates complete agreement.
Description of the scale
Research conducted in Vietnam, including studies by Nguyen Thu Hang and Nguyen Khanh Trang (2013) and Tran Kim Dung (2005), alongside international research by Turkyilmaz et al (2011), Mehta et al (2010), and Ahmad Ismail Al-Ma’ani (2013), highlights the need for revisions to existing scales These revisions focus on qualitative aspects, such as eliminating factors like temperature, light, and noise from the working environment scale Additionally, it emphasizes the importance of understanding promotion criteria, prioritizing training and development for successors, and fostering a sense of pride among employees in their company, particularly within loyalty assessments.
TN1 You are paid a high income TranKimDung
TN2 The current income level is commensurate with your work capacity Skekhar (2012)
TN3 The company pays very fair income
TN4 You can live well based entirely on income from the company
TN5 Compared to other companies, you feel your income is high
MTLV1 Where you work very safe Nguyen Thu Hang &
Nguyen Khanh Trang MTLV2 Where you work clean and airy
MTLV3 You are provided with full supporting equipment for your work Akman, Ozkan &
Pastuszak (2011); Vu MTLV4 Your working equipment is very modern
MTLV5 You feel comfortable working with your direct manager Ketbi (2006)
You are satisfied with the process of exchanging and providing internal information at the company
DN1 Your colleagues are comfortable Nguyen Thu Hang &
Colleagues are willing to help you in your work (2013), DN3 You and your colleagues work well together
DN4 Your superior always listens to the opinions of the staff
DN5 Your superior always seems to be friendly, respectful of employees
Scale of reward and recognition
KT1 Your achievement is recognized and assessed by your superiors
(2011); Kumar & KT2 You are rewarded commensurate with your contributions and contributions Skekhar (2012)
KT3 You are considered a fair reward when you complete the job well
The company has a clear and effective reward policy
Scale of relationship with superiors
QHCT1 Acknowledged by the above-mentioned employees, the opinions of the employees themselves
Nguyen Thu Hang & Nguyen Khanh Trang
(2013); Mehta, Singh, QHCT2 The superior respects the views of the employees themselves Bhakar &Sinha
The superior level of personal understanding of employees
QHCT5 The superior appreciates the personal role of the employees in the company
Scale of promotion training opportunities
The company is very interested in saff training
DTTT2 You can participate in the company's annual training programs according to job requirements
Training program suitable for your ability
After being trained, your work skills are improved
You have many opportunities to get promoted at the company
TT1 I am very happy to work for a long time with the company
Hang & Nguyen TT2 You will stay in the company even if other places offer a more attractive income Khanh Trang (2013)
TT3 You are willing to sacrifice personal benefits when necessary to help the company succeed
Overall assessment of employee loyalty status at ANSV
ANSV Co., Ltd fosters a strong work ethic and a collaborative spirit among its employees, resulting in increased energy and productivity in the workplace.
Employees are expressing dissatisfaction with the company's basic salary, which they feel is inadequate compared to industry standards and competitor pay Additionally, the year-end bonus is perceived as merely a reflection of their overtime efforts rather than a genuine incentive to motivate performance.
2.8.2.2 The cause of the limitations
The company has not conducted the analysis of loyalty as well as factors affecting the loyalty of employees to see their limitations in human resource management.
Linear regression analysis
Linear regression analysis is utilized to assess the strength of the relationship between independent and dependent variables This process involves evaluating the model's suitability, constructing multiple regression models, and testing relevant hypotheses Furthermore, the acceptance and interpretation of regression results are examined in the context of the research hypotheses.
2.9.1 Regression model for component variables
Regression analysis was carried out with 6 independent variables including: Colleagues (X1), Leadership (X2), Training and promotion (X3), Salary (X4), Nature of work (X5), The working environment (X6) and the dependent variable are Employee Loyalty (Y)
The independent variables are averaged according to the observed variables associated with them, while the dependent variable represents the average of the observed employee loyalty variables The analysis utilizes the Enter method, incorporating all variables simultaneously to determine which ones are accepted The findings from the regression analysis are as follows:
Not standardized Beta stand ardiz ed
Measurement of multicollinearity (Collinearity Statistics)
The nature of the work
Table 10 Regression results using the Enter method
The results of multiple linear regression analysis with the enter method (a one-time input method) showed that the model with R2 adjusted to reach 0.558 is shown (Table 3.23)
From the results of the above regression model, we see that the factors of working, training and advancement, colleagues are not statistically significant, P value is greater than 0.05
Assessing the appropriateness of the model: Through Adjusted R square to assess the suitability of the model will be safe because it does not inflate the relevance of the model
The adjusted R² value of the model is 0.558, indicating that it accounts for 55.8% of the variation in Fidelity based on the included variables Conversely, 44.2% of the variation in Fidelity is attributed to factors outside the scope of this study.
Ingredient Coefficient R R 2 R2 calibrated Standard errors of estimates
Table 11 Evaluation of conformity of the model a Independent variables: (Constant), Working environment, Colleagues, Salary, Leaders,
Work nature, training and advancement
To assess the model's suitability, Test F evaluates the linear relationship between the dependent variable Y and the entire set of variables If the hypothesis R²pop = 0 is rejected, it indicates that the variables included in the model can effectively explain the variations in Y, confirming that the constructed model is appropriate for the dataset.
In ANOVA analysis table, we see the value of sig very small (sig = 0.00