To improve human resource management in state owned enterprises, especially in making steel industry

ĐẠI HỌC MỞ TP HCM UNIVERSITE OUVERTE DE HCMV UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL CHƯƠNG TRÌNH THẠC SỸ QUẢN TRỊ (MMVCFB6) PROGRAMME DE MAITRISE EN MANAGEMENT VIETNAM COMMUNAUTE FRANCAISE DE BELGIQUE N N G G U U Y Y E E Ã Ã N N T T H H Ị Ị T T H H U U Û Û Y Y T T I I E E Â Â N N T T O O I I M M P P R R O O V V E E H H U U M M A A N N R R E E S S O O U U R R C C E E M M A A N N A A G G E E M M E E N N T T I I N N S S T T A A T T E E O O W W N N E E D D E E N N T T E E R R P P R R I I S S E E S S , , E E S S P P E E C C I I A A L L L L Y Y I I N N M M A A K K I I N N G G S S T T E E E E L L I I N N D D U U S S T T R R Y Y M M A A S S T T E E R R O O F F M M A A N N A A G G E E M M E E N N T T T T H H E E S S I I S S Supervisor: Professor VŨ VIỆT HẰNG Ho Chi Minh City, Vietnam (2007) GUARANTEE: Tôi xin cam đoan đây là công trình nghiên cứu của riêng tôi. Các số liệu và các kết quả được nêu trong luận văn tốt nghiệp là hoàn toàn trung thực. Nguyễn thò Thủy Tiên 1 ACKNOWLEDGEMENT The author wishes to express her sincere thanks and appreciation to Professor Vu Viet Hang for her precious guidance and suggestion during this research study being carried out. Special thanks go to Ho Chi Minh City Open University for its holding this Master course in Management. She much appreciates her professors’ and friends help during the period of data collection, especially, Mr. Hung’s, Mr. Long’s, Mr. Son’s, Mr. Dien’s, Mr. Vinh and many other friends’ great help in collecting secondary data from Vietnam Steel Corporation and some other enterprises in Steel Industry. The author also would thank her family for its financial and spiritual support during her course time. 5 Table of Contents Chapter Title Page ACKNOWLEDGEMENT 1 SUPERVISOR’S COMMENTS 2 OPPONENT COMMITTEE’S COMMENTS 4 Table of Contents 5 List of Tables 7 List of Figures 8 INTRODUCTION 9 CHAPTER 1: LITERATURE REVIEWS 1.1 Organization Theories 1.2 Defining Human Resources Management 1.3 The Evolution of Human Resources Management 1.4 Environment of Organization 13 14 16 21 23 CHAPTER 2: THE ENVIRONMENT OF SOES IN VIETNAM STEEL INDUSTRY 2.1 The History of Build-up and Development of Vietnam Steel Industry 2.1.1 The History 2.1.2 The Organization Framework 2.1.3 Basic Information of Vietnam Steel Corporation 2.2 The Environmental factors in Organizational Performance in Vietnam Steel Industry – public sector 2.2.1 External Environmental Factors 2.2.2 Internal Environmental Factors 2.2.3 The Outcomes of the Organization 2.2.4 The Matters VSC to deal with 2.2.5 The Trends of Development of VSC and the Challenges to the Future 27 27 27 30 31 33 34 40 47 49 51 CHAPTER 3: STAFFING 3.1 Literature Review 52 52 6 3.2 Facts and Findings 3.2.1 Facts 3.2.2 Findings 3.3 Suggestions 53 53 55 60 CHAPTER 4: TRAINING AND DEVELOPMENT 4.1 Literature Review 4.1.1 The Training and Development components and relationship to organization changes 4.1.2 Factors Influencing T&D 4.1.3 The T&D Processes 4.2 Facts and Findings 4.2.1 Facts 4.2.2 Findings 4.3 Suggestions 62 62 63 64 65 67 67 69 70 CHAPTER 5: COMPENSATION AND REWARDS 5.1 Literature Review 5.2 Facts and Findings 5.2.1 Facts 5.2.2 Findings 5.3 Suggestions 73 74 75 75 79 82 CHAPTER 6: SAFETY AND HEALTH 6.1 Literature Review 6.1.1 The Nature of Safety and Health 6.1.2 Roles of Safety and Health Management 6.1.3 The Focus of Safety Programs 6.1.4 Developing Safety Programs 6.2 Facts and Findings 6.3 Suggestions 84 84 84 86 88 89 90 91 CONCLUSION 92 REFERENCES 95 7 List of Tables Table 2.1: Share of Steel Suppliers in the World 31 Table 2.2: COP of World Steel Producing Countries 33 Table 3.1: Level of schooling of the laborers in the whole VSC 54 Table 3.2: Comparing the level of schooling of the laborers, 2006 55 Table 3.3: Structures of personnel for rolling workshops of public sector 55 Table 3.4: Structures of personnel for rolling workshops in different sector 57 Table 5.1: Personnel, output, average income and wage/ton (2006) 79 Table 5.2: Typical payment score system used in a SOE’s melting workshop since 1995 to 2006 80 Table 5.3: Quoted pay-sheet for workshops of a JV and a public firms 81 List of Boxes Box 2.1: Eight criteria for analyzing quality of work life 37 8 List of Figures Figure 1.1: Five circles model of organizational environment 15 Figure 1.2: Personnel versus HRM 20 Figure 1.3: Sectors of the general environment 25 Figure 2.1: Vietnam Steel Corporation framework 30 Figure 2.2: A model of Organization performance 34 Figure 2.3: Markets with globalization-competition 39 Figure 2.5: SWOT of Human Resources in Steel SOEs 50 Figure 4.1: Developing a training program 66 9 INTRODUCTION The tenth congress/Plenum of Vietnamese Communist Party has stated the general social-economic targets in period 2006 – 2010 are accelerating the nation’s economic growth rate to get the crucial evolution in sustained development; promoting the industrialization – modernization great undertaking and developing the knowledge economy, the foundation to make Vietnam basically become an industrial developed country by 2020. The Plenum has also pointed out their principle missions: emancipating production resources; upgrading the quality and competence of the competition of the economy; and accelerating economic growth rate. Besides, it suggested turning the state economy to market-economy with socialist orientation together with performing market rules, forming synchronously all kinds of market and the institutional system; proactively integrating into the world economy; expanding foreign economic cooperation together with enhancing the independence and self-control capacity of the economy. Recently, one of the most principle missions mentioned above has been completed successfully. That is, Vietnam has become official member of World Trade Organization since January 2007. However, going into the international economic environment has exposed endogenous challenging factors of the Vietnam economy. One of the main challenges is the workforce, from the whole labor market to a certain sector, likely not ready for the new phase. Considering Vietnam enterprises carefully, we can find evidences that prove the challenge. What is resulting on low level of competitive competence, on restrained ability in resources management, on unstable quality of goods and services, and on high cost of goods sales, if it is not the workforce with its low productivity? It bears also the blame for local businesses’ losing their market share just in their own fields. Moreover, affected by many crucial forces, thing would be broken at its utmost weak point. On accomplishing the most principle mission, Vietnam economy would taste some blows, so. One of the blows is the unexpected difficult stage that some of public companies are now experiencing. Statistics says that in the year 1995, there was 9.2% labor-force working in public sector of economy, with the contribution to the GDP was 40.2%. In the year 2004, the figures were 10% and 10 38.4% respectedly. Those numbers show that the relationship between number of workers and the contribution of those workers to GDP has a contra-variation. The situation would deteriorate in firms that operating in such traditional industries as energy, coals and metallurgy with their own restricted competencies. Once more, that is to say the cause is low productivity of the workforce. Therefore, to the Vietnam economy, especially to the public sector, the matter could be named the low level of productivity of the workforce. What cause the low level of productivity of the workforce? Is the human resources managed ineffectively, or even mismanaged? What are the measures to deal with the matter to accomplish the mission of the state economy successfully? There were many researches studying of problems related to the effectiveness of human resources management and suggesting possible solutions. However, those researches are in a wide scope, so the solutions given are truly general. That means, those researches have not profoundly gone into a specific case to give reasonable measures, true wanting, for a specific industry. How is the relationship that mutually affect between employers, employees in managerial structure systems, law systems, and the intervention of Labor Unions? How could an SOE exploit effectively and efficiently its human resources? Which tools could be use to strengthen the available labor force? Could the workforce get higher productivity, and gain competitive advantages? The answers for these questions would be the objectives of this research study. To make the study more specific, applicable, the writer would narrow down the scope of research to SOEs in making steel industry, a heavy industry that used to be the main industry of Vietnamese economy in the period 1970s - 1980s. The objects of the study are including the former SOEs, which are on the process of capitalization recently. Method applied in the research would base on recent theories in human resources management, associate with relating Vietnamese law systems, to examine the real situations to point out the solutions. To make it realistic, the research study would use the statistic data from internal the Vietnam Steel Corporation, from Vietnam Steel Institute. 11 The content of the research, excluding the introduction, conclusion and table of referred materials, includes 6 chapters. 1) Chapter 1 is to review the theories that would be used to analyze the problem. 2) Chapter 2 would introduce the history of build-up and development the Vietnamese Steel Industry, and describe the environment of the organization with their trend of changing rapidly now on the viewpoint of modernist theorists. Chapter 2 describes the environment of the organization with their trend of changing rapidly now on the viewpoint of modernist theorists. 3) Chapter 3, 4, 5, 6 are to analyze the real human resources managerial situations in the State Owned Sector of Vietnamese Steel Industry. The analysis based on the theories of the Evolution of Personnel to Human Resources Management, with approaching method from the Law aspect, the relationship between employers and employees that intervened by Labor Unions. Each chapter includes three sub-parts. The first one is to review theories of Evolution of Personnel to Human Resources Management. The second part is to give the facts and findings analysis of HRM in the object with its own statistic numbers. The last one is to point out what the real cause that HRM is not effective, nor efficient, and then to suggest some possible solutions. 4) The last chapter, the conclusion is to give the trends of development of the steel industry, suggest certain measures to improve human resources management in the state owned enterprises. Being an employee in a factory in public sector for year, having the feeling of responsibility for the development of the industry, I am to do the research seriously. However, the study would have limitations. First, it is the limitation in the scope of the study. The study concentrates into analyzing human resource management of the SOEs, or former SOEs, in Steel Industry only. Therefore, the suggestions or solutions given are not so general to apply to all other industries. Second, it is the preciseness of the data gathered. For the spirit of secret-keeping regulations is getting chronic to each public employee, who is object of the study, the data got by direct interviews would not reflex so exactly the reality. Besides, for [...]... (1) In North Vietnam, the Thainguyen Steel Complex Zone (the Thainguyen Steel Corporation now) is the first undertaking of the Vietnam Steel industry It is a completed zone for making steel with chains of processes including exploiting iron-mine, making pig iron, steel, and rolling -steel Since the first heat of pig iron produced, the operation of the undertaking has been disrupted some times as the States... from 1976 to 1989, Vietnam Steel Industry was in a difficult stage, for the recession of the economy Its total output was only 40.000MT/year (1976), and reached 85.000MT/year (1990) Vietnam Steel Corporation was formed pursuant to 128/CNNg-TC dated May 30, 1990, based on available enterprises operating on exploiting iron ore, making steel, and servicing of researching, training in making steel industry, ... Vietnam Steel Corporation is to combine producing-trading, namely making profit, and researching-training activities The Decree clarified undertaking’s mission as: “Organizing, administrating the technological researching-applying activities, training employees’ activities to support corporation’s making profit activities”, that is briefly, research and development The Decree also states that Vietnam Steel. .. forces affecting the organizations today Other major influences include changes in management theory and changing assumptions about people in organizations All are contributing to the growing importance of understanding how to manage human resources effectively and to the growing importance of the human resources function in organizations Moreover, they all are changing, rapidly That is, too many variables... questions involved in human resource management such as what the real nature of human resource 14 management is, what matters are central to human resources management, and how to manage the resources properly to achieve the organization’s objectives Through the materials, we all know that human resources management is a broad concept referring to the philosophy, policies, procedures, and practices used in. .. equipped with continuous casting machines For rolling steel: excluding PMSP, there are 10 lines of hot rolling machines to produce reformed bar, wire-rod, angle bar, etc used in construction industry 2.1.3.4 Means of technology: almost technologies that applied in Vietnam Steel Corporation’s firms are of 1960s Rolling mills and arc-furnaces are mostly from Taiwan or China, casting machines from India The levels... efforts mainly at the organization’s employees; finding and training them, arranging for them to be paid, explaining management s expectations, justifying management s actions, satisfying employees’ work-related needs, dealing with their problems and seeking to modify management action that could produce an unwelcome employee response The people who work in the organization are the starting point, and... exporting, promote production, create more jobs, to contribute to the industrializing-modernizing great undertaking of the state, and raise the competitive abilities to enter to the local and global economy (7) Accomplishing Decrees numbered 48/1998/NÑ-CP, 64/2002/NÑ-CP and 187/2004/NÑ-CP of transferring public enterprises into joint-stock enterprises, VSC completed capitalizing two members in the... industry, which were administered by the Department of Heavy Industries November 18, 1992, the Integrated Works in Making and Rolling Steel became Southern Steel Corporation, under the administration of Vietnam Steel Corporation according to 766/QÑ/CNNg-TC That those foundations were carried out simultaneously with the State OpenDoor and DoiMoi policies led to the initial growth of the Steel Industry The output... managing people throughout the organization Besides, the globalization trend in business in the new millennium has made the nature of human resources management, consequently the role of HR people, more and more complicating The objective of the research study is to provide/recommend measures to exploit more effectively and efficiently human resources in public sector of Steel Industry in Vietnam To . the steel industry, suggest certain measures to improve human resources management in the state owned enterprises. Being an employee in a factory in public sector for year, having the feeling. research to SOEs in making steel industry, a heavy industry that used to be the main industry of Vietnamese economy in the period 1970s - 1980s. The objects of the study are including the former. to analyze the real human resources managerial situations in the State Owned Sector of Vietnamese Steel Industry. The analysis based on the theories of the Evolution of Personnel to Human Resources