NATIONAL ECONOMICS UNIVERSITYFACULTY OF FOREIGN LANGUAGESENGLISH FOR BUSINESS DEPARTMENTNGUYEN THU HANG A STUDY ON BUILDING SALARY PAYMENT METHOD ACCORDING TO THE 3P COMPENSATION MODEL I
Aims, research questions and objectives of the Study
Basing on an overview of the theoretical framework about salaries and wages, the 3P compensation model and practical survey, the bachelor’s thesis focuses on analyzing the real situation of building a salary payment method for employees in TECHPRO Tech Dev JSC and proposing some recommendations for further improvement.
Question 1: How the salary payment method was built according to the 3P compensation model in TECHPRO Tech Dev JSC from 2018 to 2019?
Question 2: What are some recommendations for further improvement (if any) in the salary payment method according to the 3P compensation model in TECHPRO Tech Dev JSC?
3.3 Research objectives e Systemizing theories of salaries and wages for employees; synthesizing analytically researches relating to the Study.
Nguyễn Thu Hằng — 11161536 — Business English 58A e Identifying the real situation of building a salary payment method for employees at TECHPRO Tech Dev JSC; identifying achievements and limitations when applying the 3P model. e Proposing some recommendations to improve the salary payment method according to the 3P compensation model (if any).
Scope of the Study cọ Họ 0 000.5008004 06 3 5 Research methodOÌOBY <5 55 9 999 000 004006006888906 3 6 Research sfrUCẦUF o- co 05G 5 55 9.9090 90.0.0000 005 001080989 96 5
e Research scope: Focusing on departments of TECHPRO Tech Dev JSC e Contents: Analyzing the situation on building a salary payment method according to the 3P compensation model for employees at TECHPRO Tech. Dev JSC from 2018 to 2019 e Time: From 10/2018 to 12/2019
5.1 Research sampling of employees in departments in TECHPRO Tech Dev.
When researchers study economic and social phenomena, they use the research sample that is obtained from the entire research population because of lacking effort, time, and budget Moreover, the sample must not only have similar characteristics but also can be considered as representative of the entire population Therefore, the sample in the researcher's study should be represented and recognized as representative of the whole community However, in this study, there are only 60 employees in both the North and the South branch at TECHPRO Tech Dev JSC; thus, the author takes all 60 employees for her research.
In 60 employees selected to survey, all of them work in staff positions The author chooses them because they play a vital role in creating products for the company, but the salary may not be suitable for their efforts.
Furthermore, in research sampling, the author selects some salary professionals/accountants who are directly responsible for paying salary Those who directly take part in salary payment for employees, have in-deep knowledge and specialize in salary and compensation policy Therefore, the results drawn from the interview will help the author to have a more specific and accurate view of the real situation on building a salary payment method according to the 3P compensation model in the company.
Nguyễn Thu Hằng — 11161536 — Business English 58A
Primary data sources: Data from the questionnaires and interviews employees, salary professionals/accountants and managers.
Secondary data sources: From reports, documents of TECHPRO Tech Dev JSC, and other books and documents.
Questionnaire: The author used the questionnaire to send to 60 employees in TECHPRO Tech Dev JSC (see details in Appendix I of the thesis).
The questionnaire comprises 18 closed-ended questions adhering to the 3P model, with options for single or multiple-choice responses Participants can provide additional insights through written comments for alternative answers.
Subjects of the survey: The author conducted a questionnaire with 60 employees working in all departments in both the South and the North branch of the company.
Objectives of the survey: Collecting actual data on the evaluation of building and application of salary payment method according to the 3P compensation model in TECHPRO Tech Dev JSC From the opinions of all 60 employees, the author found the achievements and limitations during the application process.
Survey results: The author surveyed 60 employees in all departments in the Ho Chi Minh City branch and Hanoi branch, including back office (15/60 papers), technical section (21/60 papers), and sales department (24/60 papers) Then, the author collected a total of 60/60 questionnaires.
According to Administration Dpt of TECHPRO Tech Dev JSC, the author collected general information below:
By gender: Male accounted for 70% of respondents, female made up 30% of respondents.
By age: Under 45 years old registered 91.6% of respondents.
By professional level: College and intermediate made up 40%; higher education and master accounted for 55%.
Nguyễn Thu Hằng — 11161536 — Business English 58A
Then, the author used statistical method to summarize all information which was investigated and surveyed to prepare for the analysis process Excel tool was used to analyze the collected results.
To gain insights into salary payment systems and the 3P compensation model, the author consulted with salary professionals, accountants, and managers at TECHPRO Tech Dev JSC This consultation provided valuable information for the author to create a comprehensive understanding of these concepts.
There are 4 steps used to collect and process data:
Step 1: Using Microsoft Word 10 software to design the questionnaires, then printing 31 questionnaires Besides, creating online form survey on Google Drive.
Step 2: Sending 31 questionnaires to employees at the northern branch and 29 online surveys via Google Drive to employees at the Southern branch of TECHPRO Tech Dev JSC.
Step 3: Interviewing some experts and managers of TECHPRO Tech Dev JSC. Step 4: Collecting and analyzing all answers from interview and questionnaire.
The study is divided into three main chapters:
Chapter I: Theoretical framework: Overview of salary and the 3P compensation model
Chapter II: The real situation of building and applying the salary payment method according to the 3P compensation model at TECHPRO Tech Dev JSC from 2018 to 2019
Nguyễn Thu Hằng — 11161536 — Business English 58A
THEORETICAL FRAMEWORRK S2 se se 6
Salary 5-5 G5 0 THỌ 0.0 000004000040 0004.0008 6 JIJNNM 016 n6 nen e
The definition of salaries is diverse in different countries.
According to Karl Marx, salary is the price of labor.
International Labor Organization (1949, No 95, Article 1) defines salary as earning or remuneration that is expressed in money by an agreement between the two parties (employers and employees) through written or unwritten contracts.
In Vietnam, according to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10, article 90 stated that salary was the amount paid by employers to employees to work a job as negotiated by the two parties Remuneration consisted of a salary coefficient based on the work value or title, allowance (s), and other additional payments The provisions of the Labor Code are in favor of the market following the principle of agreement based on the capacity of the parties to participate in the labor market; wages must be higher than the floor wage level prescribed by the State.
According to Nguyen, T T L (2015), salary is the price of labor goods which is formed by agreement between employers and employees following the labor supply and demand relationship in the market In a market economy, the nature of salary has changed, it recognizes the objective existence of the labor market It is evident that pay is not only a distribution category but also a value category.
Today, there are different factors in the total income from work including wages,allowances, and benefits Salary is considered the value of labor in a market economy In addition, the relationship between employers and employees has changed in the form of bilateral cooperation and mutual benefit Workers increasingly have the advantage of negotiating salaries with businesses as the
Nguyễn Thu Hằng — 11161536 — Business English 58A number of qualified and skillful employees participating in business ownership is increasing.
From these above perspectives, the author would like to draw that salary is considered the value of labor in a market economy It is not only compensation for employees’ contribution to the business, but also an amount of money that employers prepay for employees’ participation in the future To attract skillful and professional workers, companies must invest a lot of money in searching, recruiting, and training new staff Assessing the ability of workers becomes very important that helps businesses to make the right investment and vice versa.
1.1.2 Features and principle of salary
Nguyen, T (2010) gives the concept of salary as the value that an employer pays to an employee (or an employee receives from an employer) Commonly, the salary can be expressed in money, goods, and commodity It can be determined by the agreement between employers and employees based on national laws and regulations by a labor contract, written or oral contract Therefore, salary is an economic category associated with labor, money, and commodity production.
Salary constitutes a portion of product value contributed by workers Within the management framework, it can be categorized as part of production expenses that determine product value As a component of income, salary represents the culmination of an enterprise's production activities (Atchison, T J., 2003).
When it comes to a good salary, Nwachukwu, C.C (2000, pp.104) and Sule, O. E., Amuni, S IL, Obasan, K A and Banjo, H A (2015, Vol 34, No.1, pp.7) pointed out the key characteristics of a good salary as follows:
1.The salary rates that prevail in the local market and in the industry as they will ensure that the company remains competitive not only in the market but also within the industry.
2.The internal alignment of salaries to ensure equity.
3.Recognizing for Individual Performance In other words, two individual workers may have identical qualification and/or experience, one may earn higher than the other due to his superior performance.
4.Taking care of Individual Incentives.
(Nwachukwu, C.C.,2000, pp.104 & Sule, O E., Amuni, S I., Obasan, K A and Banjo,
Nguyễn Thu Hằng — 11161536 — Business English 58A
To sum up, salary is a vital economic lever to improve the efficiency of production and business, increase labor productivity, and encourage employees to be excited and actively work.
Salary is essential for both workers and businesses.
According to Singh, P & Loncar, N (2010), for employees, salary is of obvious significance in terms of satisfying their financial needs Pay could maintain clearness, competitiveness, meeting employee expectations, and enhancing their positive behavior Salary reflects the effort of workers and proves they deserve it. Therefore, it has a significant influence on encouraging workers to work.
Recently, salary is considered as a critical measure of skills, professionalism, and seniority Workers are very eager to get a high salary, although salary may account for only a small part of their total income in the economic integration period.
Díaz-Fernández, M., López-Cabrales, A and Valle-Cabrera, R (2013) recommended that the compensation system should be linked with the corporate strategy The authors collected data and showed that the compensation system motivated employees to express their competencies matched with the corporate strategy Commonly, the implementation of corporate strategy required employees to have corresponding capabilities, so the compensation system should be tied to these competencies.
Concerning the labor market, it can be said that companies that focus on building an abundant and healthy salary budget can attract more talents and strengthen their development When observing aptly wage, Nwachukwu, C C (2000), and Atchison, T J (2003) admitted that salary played a significant part in the overall cost of operations, accounting for over 50 percent of total costs They pointed out that companies that lack the ability to pay salaries regularly for employees might be in danger of collapse In addition, poor salary is a reason for frustration, resulting in declines in employees’ productivity Therefore, spending on pay is spending on development investment Salary is an important key to improve the business efficiency of the business On the other hand, organizing fair and reasonable wages will contribute to maintaining, and developing its workforce.
When it comes to the relationship between employees and their superiors, Chen,D.H., Fan, C.L and Shen, Y.J (2015) supposed that the compensation was
A strong alignment between employee and organizational goals, as well as superior-employee benefit synchronization, can have a significant impact on both employee and organizational performance The closer the alignment between these interests, the more positive the impact will be on growth and success.
Salary plays a crucial role in the workplace by motivating employees to contribute to the organization's success and providing businesses with a competitive edge in attracting and retaining top talent This financial incentive not only enhances employee productivity but also aligns their interests with company goals, ultimately leading to the achievement of both individual and organizational objectives.
1.1.4 Some policies on salary in Vietnamese law
Vietnam has specific regulations and laws on salary, salary scales, payroll, etc. for employees The 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No 51/2001/QH10; article 91 had the following policies. a Minimum wage
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No 51/2001/QH10, article 91 stated that:
THE REAL SITUATION OF BUILDING AND APPLYING
Overview of TECHPRO Tech Dev JSC 5555 S555 se 18 1 General information of TECHPRO Tech Dev JSC
2.1.1 General information of TECHPRO Tech Dev JSC
Figure 2.1: Logo of TECHPRO Tech Dev JSC
(Source: TECHPRO Tech Dev JSC official website - Techpro.vn)
TECHPRO Tech Dev JSC was found on 23 November 2001 The headquarter is located in Hao Nam, O Cho Dua, Dong Da district, Hanoi city Currently, the company has two branches at Hanoi and Ho Chi Minh City.
The company has a total of 60 employees working in both branches More than 90% of the company's employees have graduated from prestigious colleges and universities Employees working at TECHPRO Tech Dev JSC are recruited
Nguyễn Thu Hằng — 11161536 — Business English 58A seriously and trained to improve their knowledge, competence, and skills The company always aims to develop a high-quality, experienced, and professional staff team In addition, a sense of responsibility, enthusiasm, and creativity is always appreciated and encouraged in TECHPRO Tech Dev JSC.
TECHPRO Tech Dev JSC is established in the proliferation of digital technology and applications on the computer platforms era A commonly used simple term is IoT - Internet of Things Therefore, the company has been a pioneer in providing high-tech products for industrial control, multimedia, telecommunications, and services At present, the company's products include:
ADVANTECH industrial computers and automation equipment
IDTECK security and timekeeping control device
Some products are in other fields such as supplying, installing automation, measurement, control, security, and medical systems.
2.1.2 Missions, visions and core values
Vision: TECHPRO Tech Dev JSC attempts to become a leading technology enterprise in and out of Vietnam in trading technology products and services based on IoT and digital technologies platform.
Mission: For partners, TECHPRO Tech Dev JSC relies on trust as the foundation for long-term cooperation to develop mutual benefits as well as commits to bring valid values to users For customers, the company provides superior technical products and solutions to meet customer needs With employees, the company creates a friendly working environment, encourages creativity, and respects commitments to ensure a long-term relationship between the company and employees.
Core values: Tin, Tam, Tri, Nhan are appreciated and implemented in TECHPRO Tech Dev JSC to build a good relationship not only with partners but also for customers and society.
(Source: TECHPRO Tech Dev JSC official website — Techpro.vn)
2.1.3 The process of formation and development
In 2001: Established TECHPRO Tech Dev JSC
Nguyễn Thu Hằng — 11161536 — Business English 58A
In 2002: Became a partner of IDTECK - a company producing high-tech security control equipment in Vietnam; expanded cooperation and business of distributing computer components and informatics services.
In 2003: Researched and signed with the Advantech company to produce industrial computer products and automation products.
In 2004: Participated in exhibitions and events related to Automation, IT and security equipment.
2005-2008: Opened a representative office in Ho Chi Minh City; Continued to expand the business and signed major contracts with many potential partners in Vietnam.
2009: Became the first distributor in Vietnam for the GUNNEBO company - the company producing security door products.
2011: Cooperated with the ETROVISION company on surveillance camera products and smart parking management system.
2012-2014: Became the official distributor in Vietnam of HONEYWELL anti- intrusion system; collaborated with NBIS - a Japanese company to develop energy monitoring and BMS systems.
2015-2016: Participated in various significant events such as VICS Secutech Vietnam, Intel IoT, Secutech Taipei, etc.; became an official distributor of PA solutions in Vietnam.
(Source: TECHPRO Tech Dev JSC official website — Techpro.vn)
2.1.4 Organizational structure and human resources structure
Nguyễn Thu Hằng — 11161536 — Business English 58A
Chairman of the Board of directors
SBS Hanoi and DPS Sales IMS service Solution Dev Marketing General Financial HCM Sales Center Center center Research Dat Dpt administrative Dpt.
—| Sales | Sales |_| Maintenance Research |_| Media |_| Ađminisration service marketing
—| Solutions |_| Deployment Warranty Technical FT ạt ne | | Human service product sales Resource management Call
Figure 2.2: The organizational structure of TECHPRO Tech Dev JSC
(Sources: Administration Dept of TECHPRO Tech Dev JSC)
2.1.4.2 Functions and duties of the departments a Chairman of the Board of Directors
The Chairperson is responsible for administering, managing, supervising, and organizing specific activities of the Board of members. b Board of directors The board of directors has the highest right to the decision of the company.
Board of directors has the following rights and duties: Approving the development orientation of the company; deciding on the type of shares and the total number of shares of each type to be offered; determining the annual dividend rate for each kind of stocks and other rights and duties by the Enterprise Law and the Company's Charter. c Technical Department
The Technical Dept has the following duties: Carrying out quality technical management; organizing regular inspections product quality and preparing and submitting the plan of preliminary, quarterly, and yearly reports. d Solution Development Research Department
Nguyễn Thu Hằng — 11161536 — Business English 58A
The Solution Development Research Dept has the following duties: Planning short-term and long-term marketing strategies; preparing and implementing contract management and monitoring for supplies provided for the bidding packages. e Sales Department
The Sales Dept has the following duties: Supplying goods that meet the customer needs about samples, quality, and categories; controlling and managing equipment, delivering, and maintaining equipment, etc according to customer requirements. f Marketing Department
Marketing Dept has the following duties: Advising the Director of the company on the development direction, and the potential market should be invested The Investment Dept also directly manages the company's investment. g Financial Department
The Financial Department plays a crucial role in managing a company's financial affairs Responsibilities include organizing and maintaining accounting systems, recording and reflecting accounting data, classifying and organizing receipts, and providing financial reporting to the General Director These tasks ensure the accurate and timely tracking of financial transactions, providing the necessary information for decision-making and compliance with regulatory requirements.
Administration Dept is the general department that advises and assists the company's directors in the following areas: organizing the human resource management apparatus and planning for training workers; inspecting and settling complaints and denunciations if they have; and implementing policies and regimes related to employees' obligations and interests.
2.1.4.3 Features of human resources in TECHPRO Tech Dev JSC
TECHPRO Tech Dev JSC is a company operating mainly in the field of commercial business related to technology products such as security equipment, industrial computers, industrial printers, etc Today, the number of employees working at the company is 60 employees in two branches: Ho Chi Minh City and Hanoi City.
Nguyễn Thu Hằng — 11161536 — Business English 58A
No Features of human| Number Number of resources of Ratio Ratio employees employees
Table 2.1 Features of human resources in TECHPRO Tech Dev JSC
(Sources: Administration Dept of TECHPRO Tech Dev JSC 2019)
Table 2.1 shows that the structure of the company is simple according to the regime headed by the Chairman of the Board of directors, followed by the Board of Directors, and assistant to the General Director, and Head of Dept Each Dept. has different functions and duties and specific position jobs to employees The number of employees increases from 50 to 60 people, and this increase mainly comes from business development and market expansion As a business