Retaining skilled employee, case study in Mai Diem textile & garment limited company = giữ chân người lao động có năng lực tại Công ty TNHH Dệt may Mai Điểm Tom_tat

0VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS PHAM THU HA RETAINING SKILLED EMPLOYEE, CASE STUDY IN MAI DIEM TEXTILE & GARMENT LIMITED COMPANY Major: Business Administration

0VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF BUSINESS

PHAM THU HA

RETAINING SKILLED EMPLOYEE, CASE STUDY IN MAI DIEM

TEXTILE & GARMENT LIMITED COMPANY

Major: Business Administration

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisors: Dr Nguyen Danh Nguyen

Hanoi – 2012

1 The necessity of the thesis

2 Objectives of the research

1.1.1 Definition of employee retention

1.1.2 Reasons of employee retention

1.1.3 Factors make employees leave Company

1.2 Employee retention components

1.2.1 Work environment and Job Design

1.4 Employee retention in Garment and textile industry

1.4.1 Overview on Vietnam‟s garment and textile industry

1.4.2 Human resource management and development solution

CHAPTER 2: ANALYSIS OF MAI DIEM‟S EMPLOYEE RETENTION

2.1 Overview of Mai Diem Garment and Textile Company

2.2 The Research methodology

CHAPTER 3: RECOMMENDATION AND CONCLUSION

3.1 Overview of the current human resource system at Mai Diem

3.2 Recommendation for Mai Diem Garment and Textile Company 3.2.1 Clear Objectives about work climate

3.2.2Training and Motivation

3.2.3 Benefits and Compensation

3.2.4 Communication and Assistance

3.2.5 Create belief for the employees in the future development of Mai Diem

3.3 Action plan

3.3.1 The action plan in long term

3.3.2 The proposed action plan in short term to attract newcomers and sustain current employees from the researcher:

CONCLUSION

REFERENCE

APPENDIX

RETAINING SKILLED EMPLOYEE, CASE STUDY IN MAI DIEM

TEXTILE AND GARMENT LIMITED COMPANY

Pham Thu Ha

MBA candidates, 2007 - 2009 School of Business Vietnam National University, Hanoi

Supervisor: Dr Nguyen Danh Nguyen

INTRODUCTION

1 The necessity of the thesis

Employee is the most important asset of enterprises but many enterprises have failed to introduce reasonable solutions to retain qualified employees This reduces the main competitiveness of enterprises in the current period Mai Diem textile and garment limited Company specializes

in domestic and exported products Building and maintaining a high-skilled workforce has enabled the company to produce high-quality products Attracting and retaining the high-skilled employees is seen as one of the vital factor for maintaining the competitive advantage of the company As one of committed employees in Mai Diem company, I choose the topic

"Retaining skilled employees, case study in Mai Diem textile and garment limited Company." as the official one for my Business Administration thesis

2 Objectives of the research

The thesis aims to achieve the following objectives:

- Identifying and assess actual situations of Mai Diem‟s Human Resource Management and its current employee retention

- Develop some suggestions and recommendations to retain skilled employee in Mai Diem Company

3 Research scope

Doing research Human resource management is a broad topic The thesis only concentrates on employee retention with case study in Mai Diem garment textile Company Research period from 2006-2010

4 Hypothesis of the research (Research questions)

From my point of view, the research focuses on main factors in order to satisfy needs of employees to retain them, as follows:

Hypothesis 1: The higher the income, the more loyal and dedicated

employee are

Hypothesis 2: Working environment at the Company affects the

level of labor‟s loyalty by proportional

Hypothesis 3: Career development opportunities of individuals

affect to the level of labor dedicated to Company by proportional

5 Data sources

- Reports of Mai Diem garment & textile Company from 2006 to

2010 (including HR reports, financial reports and other statistical reports relating HR)

- Data from survey, observation, direct interview and discussion with CEO & employees of Mai Diem Company

- Data from other sources such as specialist magazines and books, internet

6 Methodology

Method: research survey, the quantitative method Moreover, the research aims to apply to descriptive analysis and logical reasoning to analyze the data collected

7 Thesis’s limitation

The solutions in this thesis are not completely suitable with all managers or companies, it depends on financial statement, business field of each Company

8 Significant

The thesis is expected to make great contribution to Mai Diem Company and other companies in their applying measures to retain skilled employees

9 Thesis structure

TOPIC “Retaining skilled employees, case study in Mai Diem garment & textile Company”

Chapter 1: Literature review

Chapter 2: Analysis of Mai Diem‟s employee retention

Chapter 3: Recommendations and conclusions

CHAPTER 1: LITERATURE REVIEW

1.1 Employee retention

1.1.1 Definition of employee retention

Retention defined as “an obligation to continue to do business or

exchange with a particular Company on an ongoing basis” (Zineldin, 2000,

p 28) A more detailed and recent definition for the concept of retention is

“customer liking, identification, commitment, trust, readiness to recommend, and repurchase intentions, with the first four being emotional-cognitive retention constructs, and the last two being behavioral intentions” (Stauss et al., 2001)

Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project Employee retention is beneficial for the organization as well as the employee

(Source:http://retention.naukrihub.com/retention.html)

1.1.2 Reasons of employee retention

- Today‟s tightening labor market and tomorrow‟s predicted talent

crunch It‟s getting increasingly difficult for companies to keep

current employees and find qualified replacements

- A growing skills shortage Many occupations are facing a severe lack of talent

- An aging workforce The workforce is getting older and upcoming

age groups don‟t have the numbers to fill the spaces Businesses need to keep people as long as possible

- Decreased employee loyalty Gone are the days of the 25th

anniversary gold watch Employees don‟t stay with companies as long as they did in the past

- The search for new opportunities In today‟s world, it‟s easy for people to look for a job They can open the newspaper or search the Internet for instant job listings

1.1.3 Factors make employees leave Company

- Poor relationship between the employee and their immediate boss

- Lack of a career advancement plan

- A poor match between the employee and the job or the employee and the Company

- Compensation not competitive

- No direct link between strong performance and increased rewards

- A need for stimulating, meaningful work

- Lack of appreciation, recognition, and rewards

- Insufficient coaching and feedback

- Quality of the people the employee works with

- Insufficient alignment of how the employee‟s work achieves organization objectives and how the employee can be greater success

(Source: www.RetainsEmployees.com)

1.2 Employee retention components

1.2.1 Work environment and Job Design

Work environment is an important factor for an employee to be successful in their carrier According to (Fields, 2001) work environment should mutate regularly to keep up with the times and:

- Allow individuals to balance work and personal life activities

- Have a well-defined culture People understand how their performance is measured and what gets rewarded and punished

- Foster learning opportunities to improve workers' intellectual capital and sustainable marketability in a world where continuously learning in order to keep a job is a given

- Have benefits that are in line with where individuals are in their life cycle

Employees need to be given certain level of freedom, authority and responsibility to make decision on their work to get things done Company should listen to the feedback or suggestion provided by employee to

improve the work environment or the job design that they are doing

others in some way, which delivers business results and contributes to the organisation‟s overall success

1.2.3 Employee Recognition, Rewards and Compensation

Recognition: Can be defined as a form of sincere praise or

appreciation given to an individual by another

Compensation: Wages and other financial benefits earned from

labor

Reward: An earned item of value presented to an individual for

successful accomplishment of a particular service, task, or mission

1.3 Employee retention tactics

1.3.1 Employee Compensation

Compensation is payment to an employee in return for their contribution to the organization, that is, for doing their job The most common forms of compensation are wages, salaries, bonus-based programs, commission-based program

- A performance-based compensation plan

- Loyalty based Bonus

- Salary policy

1.3.2 Employee Benefits

Employee benefits program includes:

- Vacation and days-off policies:

- Gifts at some Occasions:

1.3.3 Employee Recognition and Reward Program

- Communicate the Program Internally

- Meaningful Awards

- Share Reasons for Award

- Choose Appealing Rewards

1.3.4 Job satisfaction

- Clearly define what is expected of employee

- Autonomy to make decision

- Rotate Jobs

- Treat employees fairly and respectfully

- Career Development Program

- Opportunity to learn new things

- Provide alternate work schedules

1.3.5 Creating a comfortable work environment

- Working Atmosphere

- Communication

- Balance work and personal life

- Allow employee to share their knowledge with others

- Colleagueship factor

- Allow team members to share their knowledge with others

- The quality of supervision and mentorship

1.3.6 Coaching programmes

Building confidence and competence through training, encouragement and education, coaching includes orienting, mentoring, and

leading, which are critical to developing long-term loyalty

1.4 Employee retention in Garment and textile industry

1.4.1 Overview on Vietnam’s garment and textile industry

Vietnam‟s garment and textile sector has seen fast and sustainable growth over the past years, playing an important role in national socio-economic development

One of the biggest issues facing Vietnam's textile and garment industry is a labor shortage _specifically, of skilled workers The effect of labor shortages was worse for the garment industry because of the labor intensive nature of the industry and especially the fact that wages were generally lower in the garment industry than in other manufacturing industries Thus the industry had a hard time competing with other industries (e.g electronics) for labor

In garment industry, the unsettled thinking is always in labor mind Especially, due to specific characteristic of garment industry, most labor are woman and they think that after get married and past their youth, the

productivity will decrease Therefore, garment industry is short of skilled labor besides unskilled labor

1.4.2 Human resource management and development solution

To solve the difficulties in lack of skilled labor, Vietnam garment and textile industry posed the Human resource management and development solution for whole industry

CHAPTER 2: ANALYSIS OF MAI DIEM’S EMPLOYEE RETENTION 2.1 Overview of Mai Diem Garment and Textile Company

Address: Block 39-40-42 An Xa industrial zone, Nam Dinh city

Mai Diem Garment and Textile Company were officially established on 28th February 2002 It had formerly operated as clothing production factory with only 4 workers working on the 30 square-meter area It was in the October, 2006 that the Company finally moved to new workplace and increased its workforce to 200 skilled workers The period from 2006 to 2008 was seen as the most productive one in the history of operation in Mai Diem In the later 2008, the Company faced the workforce-related crisis, consequently losing 40 workers as the result This issue has struck the Company heavier due to the nature of the industry that requires a high number of workers working The crisis has given the Company difficulties because the production contract was signed already There were various issues related human Resources management within Mai Diem from 2009 until now, leaving the Company in the unstable condition and therefore affects the business The solutions for attracting and retaining skilled workers have become the most important issues that the Company is facing

2.2 The Research methodology

Topic 3: Organizational structure

Topic 4: Personal satisfaction

Response rate

Mai Diem Textile and

Garment Company

2.3 Findings and analysis

2.3.1 Benefit programs

There are nine factors in the benefit program package with rating from

1, representing „not at all important‟ to 5, representing „very important‟ The first

factor salary and compensation is illustrated in the figure below:

Figure 2.2: The perception of Mai Diem participants about the salary and compensation

The second factor in the benefit program package is the Leave Benefits, which are ranging from the sick leave, vacation to personal and

public holidays

The third factor of the benefit program package is the Retirement Plan The fourth factor in the Benefit Program package is the Health- related Benefits, which cover from general health insurance to vision and

dental prescription

Figure 2.5: The perception of Mai Diem participants about the related benefits

health-The fifth factor to be analyzed in this package is the Long-term care insurance

The sixth factor of the Benefit programs package is the Tuition Reimbursement

The eighth factor in the package is the Employee Assistance Program: Employee Assistance Program as help to deal with family

difficulty, job performance problem, stress, workplace violence, alcohol and drug abuse

The last factor in the Benefit Programs package is the Work-life Balance

It can be seen as natural due to the fact that the employees in this textile industry have a very unstable work-life balance

2.3.2 Strategies

There are 12 items in the second package Strategies, which represents for the strategies adopted by Mai Diem in recent years The first

item Alternative Work Schedule:

The second item in the Strategies package is the Voluntary Reduction in Work Schedule

The third item of the Strategies package is the Telecommuting and Work at home

The fourth item in the Strategies package is the Wellness program

The fifth item in the Strategies package is the Mentoring and Coaching

The sixth item in the Strategies package is the Job rotation and new Assignment