Evaluating the benefit program of Lotte legend hotel

And it is easy to understand why Legend Hotel Saigon offers their employees many benefits such as rewards, health insurance, leave and medical checkup, et cetera.. This research would of

EVALUATING THE BENEFIT PROGRAM

OF LOTTE LEGEND HOTEL CAPSTONE PROJECT REPORT

Ho Chi Minh City, 2013

Group No.: 04

 NGUYEN PHONG

 TRAN BAO ANH

 LE TONG TRUC NGOC

Class: GaBBA.SP0109

ANDREWS UNIVERSITY GRIGGS UNIVERSITY

GLOBAL ADVANCED BACHELOR OF BUSINESS

ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

EVALUATING THE BENEFIT PROGRAM

OF LOTTE LEGEND HOTEL SAIGON

Group No.: 04

• NGUYEN PHONG

• TRAN BAO ANH

• LE TONG TRUC NGOC Supervisor: Mr VU THAI HA PhD

Ho Chi Minh, 2013

Group 04_GaBBA.SP0109 i

ABSTRACT

It is undeniable that large organizations nowadays are finding innovative ways

to retain employees who work harder and keep their firm more competitive

Appropriate compensation polices and compensation systems take an important role in

maintain and reinforce employees’ performance

The Personnel Department of Legend Hotel Saigon has complied and

maintained its policies to reinforce their employees’ efficiency Not only compensation

but also benefits program would be able to offer either Human Resources Manager or

employees a vast array of advantages to differentiate theirs program to other

organizations And it is easy to understand why Legend Hotel Saigon offers their

employees many benefits such as rewards, health insurance, leave and medical

checkup, et cetera Their policies would be evaluation later for a specific perspective

into its internal organization Besides prominent benefits, there are some disadvantages

as well Clearly, designing a benefit program is not an easy task However, Legend

Hotel Saigon has accomplished their benefits program successfully

This research would offer audience a perspective of interaction between

Personnel Department to other Departments in operation of Legend Hotel Saigon, and

between policies of Personnel Department to Vietnam Labor Code Specifically,

audiences are enable to understand more about employees’ benefits program and

benefit policies which was issued by Personnel Department

Group 04_GaBBA.SP0109 ii

ACKNOWLEDGEMENT

Our group express sincere thanks to Philosophy of Doctor Vu Thai Ha at Griggs

University Vietnam for his input and suggestions We especially thank to Mr Tran Anh

Phu, Personnel Manager of Legend Hotel Saigon from which much of information was

provided

Group 04_GaBBA.SP0109 iii

STATEMENT OF AUTHORSHIP

This dissertation is submitted to Griggs University Vietnam

in part fulfillment of our group and has been conducted and presented by Group 3

We have not made use of other people’s work

or (published or otherwise) presented it here without acknowledging the source of all such work

Date: 15th May, 2013

Le Tong Truc Ngoc Tran Bao Anh Nguyen Phong

Group 04_GaBBA.SP0109 iv

ORGANIZATIONAL CONTACT INFORMATION

Project Liaison Name: Nguyen Anh Phu

Project Liaison Title: Personnel Manager

Group 04_GaBBA.SP0109 v

TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENT ii

STATEMENT OF AUTHORSHIP iii

ORGANIZATIONAL CONTACT INFORMATION vi

TABLE OF CONTENTS v

LIST OF APPENDICES vii

I LITERATURE REVIEW 1

1 Compensation packages 1

2 Compensation and benefit’s role 1

3 Principle for employers and employees 2

4 Basic components 3

II ORGANIZATION DESCRIPTION 4

1 Introduction to Legend Hotel 4

1 1 Vision & Mission 4

1.2 Scope of business 4

1.3 Organizational history 4

1.4 Organizational Structure 5

1.5 SWOT analysis 5

2 Human resource department of Legend Hotel 6

2.1 Department functions 6

2.2 Department structure 7

III EVALUATING THE BENEFIT PROGRAM OF LEGEND HOTEL 7

1 A brief overview of benefit programs in the organization 7

2 Reward 9

2.1 Honest reward 9

Group 04_GaBBA.SP0109 vi

2.2 Employees of the month reward 10

3 Health insurance 11

3.1 Workmen’s compensation plan 11

3.2 Group term insurance plan 12

3.3 Personal accident insurance 13

4 Leave and medical checkup 15

4.1 Annual leave 15

4.2 Compassionate leave 17

4.3 Matrimonial leave 18

4.4 Prolonged illness leave 19

4.5 Maternity leave 20

4.6 Dental leave 22

4.7 Reserve service training 23

4.8 Unpaid leave 25

4.9 Examination leave 27

4.10 Sick leave and hospitalization 28

5 Others 31

5.1 Employee upgrading 31

5.2 Retirement 33

5.3 Transport 34

5.4 Duty meals 35

5.5 Uniform 36

IV IMPLICATION AND FURTHER STUDY OPPORTUNITY 37

REFERENCES 38

APPENDICES 40

Group 04_GaBBA.SP0109 vii

LIST OF APPENDICES

Appendix 1: Benefit programs 39

Appendix 2: Honesty awards nomination form 40

Appendix 3: “Employee of the month” nomination form 42

Appendix 4: Uniforms of employees in Legend Hotel 44

Compensation packages contain direct and indirect elements

Direct Compensation Indirect

Compensation

Kinds of benefits Monetary Non-monetary

Pay to employees Directly Not directly

Table 1: Direct and Indirect of compensation (Massey, Raymond E and Gary L Bredensteiner “Compensation Packages for Farm Employees.”)

2 Compensation and benefit’s role

Organization use compensation and benefits to achieve their goals and meet its legal obligations It is importance to be consistent and flexible Compensation affects a person economically, sociologically, and psychologically Often the organization with the best compensation strategy is a market leader

Compensation may be used to:

 Attract and recruit high-quality applicants

 Retain talent employees

 Reduce turnover and encourage company loyalty

 Increase or maintain morale/satisfaction

 Reward and motivate peak performance

Group 04_GaBAA.SP0109 2

 Achieve internal and external equity

 Modify (through negotiations) practices of unions

The effectiveness compensation can make a significant difference in gaining or losing a competitive edge A vast array of benefits can differentiate its firm from competitors that want to hire people with the same talents

3 Principles for employers and employees

Fairness or justice in pay is an important issue Fair pay is one that employees generally view as equitable Perception of unfairness could minimize the impact of a compensation system For example, it could decrease the morale of workers and de-motivate them

Job-based tends to work best in situations where technology is stable, jobs do not change often, employees do not need to cover for one another frequently, turnover is relatively low and employees are expected to move up through the ranks over time In other, individual-based compensation programs are more suitable when the firm has a relatively educated workforce with both the ability and the willingness to learn different jobs, the company’s technology and organizational structure change frequently, employee participation and teamwork are encouraged throughout the organization and opportunities for upward mobility are limited

Open pay increase employees’ satisfaction as they tend to overestimate others’ salaries and it is perceived to be more fair as it is perceived that no hidden decision occurs However, open pay tends to minimize salary differences across employees so it increases turnover rate and decreases job satisfaction for those who have best performances

Group 04_GaBAA.SP0109 3

4 Basic components

 Basic pay: Base compensation is the largest element in most firms, the fixed pay an employee receives on a regular basic It can be a weekly or monthly paycheck, hourly wage or annual salary and any performance-based pay that an employee receives

 Incentive pay: Pay incentives is programs designed to reward employees for good performance such as bonus for specified performance objective are met, profit sharing, commission or a gift given occasionally to reward exceptional performance

 Benefits/ Perquisites: kinds of benefit

Health Insurance Health insurance covers hospital costs, physician charges,

and the costs of other medical services Because of its importance, health insurance is usually considered separately from other types of insurance

Retirement Retirement benefits provide income to employees after

they retire

Insurance Insurance plans protect employees or their dependents

from financial difficulties that can arise as a result of disability or death

Paid time off Time-off plans give employees time off with or without

pay, depending on the plan

Employee service Employee services are tax-free or tax-preferred services

that enhance the quality of employees’ work or personal

Table 2: Basic components of benefits

Group 04_GaBAA.SP0109 4

Benefits are group membership rewards that provide security for employees and their families Although the benefits administration is likely to be performed by an HR benefits specialist, managers need to understand their companies’ benefits package well enough to help communicate benefits to their employees and keep records

II ORGANIZATION DESCRIPTION

1 Introduction to Legend Hotel

five-A well-trained staff is a strength since customers will always respond positively to good and courteous service Legend Hotel has good benefits for the essential demand of employees work in it

Weaknesses of Legend Hotel is the culture and the salary of employees The culture of Legend Hotel is very professional but some things are not close to Vietnamese style even though it located in Vietnam Legend Hotel service focus on to tourist and business class from Europe The basic salary of employees is not high so Legend Hotel has a prominent benefit policies to attract employees

Opportunities of Legend Hotel is the location and the industry of Vietnam Legend Hotel is located in center of Ho Chi Minh city, where most of traveller and business class in other

Group 04_GaBAA.SP0109 6

nation visit and stay More and more businessman or businesswoman in the world chose Vietnam to visit so they often stay in prestigious well-known hotel such as Legend Hotel

Threat of Legend Hotel is too much competition The Legend Hotel is located in center of

Ho Chi Minh city where there are numerous hotels such as Rex Hotel, Majestic Hotel, Caravelle Hotel, Sheraton Hotel, InterContinental Hotel, Renaissance Riverside Hotel, Sofitel Hotel, Park Hyatt Hotel, Grand Hotel…so this will affect the profit margin of the hotel Too much competition translates into too many choices for the customers

2 Human resource department of Legend Hotel

2.1 Department functions

A typical Human Resource Department is carries out the following functions The first function is Manpower Planning It involves the plan for the future and finding out how many employees will be needed in the future by the business and what types of skills should they possess The second function is Job analysis Human Resource Department is also involved in designing the Job analysis for the prospective vacancies It is the process that used to collect information about the duties, responsibilities, necessary skills, outcomes, and work environment of a particular job The third functions are Recruitment and Selection One of the most important tasks of HR departments is recruit the best people for the organization This is an important process because the success of any organization depends on the quality of its workforce The last functions are Training and Development Training might include on the job or off the job training In order to improve the efficiency level of the employees, the Human Resource department has to offer the regular trainings and development programs for their employees Therefore, all training and development needs are carried out by this department

Group 04_GaBAA.SP0109 7

2.2 Department structure

III EVALUATING THE BENEFIT PROGRAM OF ORGANISATION

1 A brief overview of benefit programs in the organization

Developing successfully, being profitable in doing business in this competitive, dynamic and fast-pace demanding world required an excellent solution And it is undeniable that the greatest assets in an organization are talent people and their collective knowledge As the result, benefit programs have taken an important role in employees mentoring and reinforcement A felicity organization needs to offer an appropriate benefit program to their employees It is not only contribute to employees’attitude but also long-term commitment of employees to organization

Group 04_GaBAA.SP0109 8

Legend Hotel Saigon had taken that strategy particularly And they approached their own policies effectively There are four main points in the Hotel’s benefit program includes Reward, Health Insurance, Leave and Medical Check up and other policies Each points had its own specific policies which apply to all permanent employees

In conclusion, the Hotel’s benefit program has offered appropriate policies and procedures to their employees The Hotel also sets an extend standard for each point in their policies This will assist employess easy to get along with organization’s regulation

Health Insurance Workmen’s compensation plan, Personal accident

insurance, Sick leave and hospitalization

Retirement Retirement

Insurance Group term insurance plan

Paid time off Dental leave, Prolong illness leave, Examination leave

Employee service Transport, Duty meals, Uniform

Others Honest reward, Employees of the month reward,

Compassionate, Unpaid leave

“HONEST AWARDS NOMINATION FORM” Upon receiving the report, the following letters/memos will be issued by the Personnel Department: Letter of commendation to employee with copy in Personnel Record File General memo to all employees advising them of the honesty act Letter to Legend Hotel Association (SHA) and Legend Tourist Promotion Board (LTPA) for consideration of the yearly award for honesty

Awards shall be made monthly and would be based on monetary value accumulated during the calendar month In case of articles, jewelleries, equipment an valuables, monetary value at the prevailing local prices would be established by the Management The awards shall be classified into 3 categories viz:

a Category 1 Certificate for amounts from $100.00 to $500.00

b Category 2 Certificate, a small pewter plate with inscriptions for amounts from $500.00 to $1,000.00

c Category 3 Certificate, a small pewter plate with inscriptions for amounts of $1,000.00 and above

The cash reward may be considered by the Management and the amount will also

be decided by the Management

This policy very good, and classify reward into 3 categories It makes employees want to strive for the highest reward

Group 04_GaBAA.SP0109 10

2.2 Employees of the month reward

This policy sets out guideline to show the Hotel’s appreciation of the employee’s contribution To be a caring Hotel concerned for the welfare of the employees The Head

of Department shall nominate outstanding employees from their department in the prescribe form This form must be submitted to the Personnel department each month The General Manager and the Head of Department will by 2nd week of the month elect from all nominated employee and the employee of that month At time, there may be two employee of the month if there is a tie.The employee of the month shall receive a cheque

of $100.00 and a certificate of commendation

Both of benefits are positively affected employees but for monthly prizes sometimes the staff really tried but have not been recorded can affect the of the staff thought that the bias level for a specific employee

Legend Hotel have similar policies with Vietnamese Labor Law But there is one other than; it is separated grade to easily pay for reward And it also promote employee more efforts to achieve the highest award

Content The Labor Code of

Vietnam

Legend Hotel’s Policy

Evaluation and efficiency

Honest reward Do not have any

mention on this point

To accord recognition to employees who have displayed honesty in their work

It is very good for applying into the company but it has a small problem It cannot perform to the best efforts of staff

Group 04_GaBAA.SP0109 11

Content The Labor Code

of Vietnam

Legend Hotel’s Policy

Evaluation and efficiency

To be a caring Hotel concerned for the welfare of the employees

It is not quite good because when the employees try their best but the company does not offer this reward, they will not try their best in the next month

3 Health insurance

3.1 Workmen’s compensation plan

The policy forms part of the statutory requirements To provide financial assistance

to employees who are disabled through accident or illness during the course of work To provide financial assistance to dependents when employees are deceased though accident

or illness during the course of work procedures of Workmen’s compensation plan have six main points

First of all, when a work related accident occurs, the supervisor shall compete the Notice of Accident Form and route it to Personnel within 3 working days of the accident Second, personnel shall notify the Commissioner for labor and the insurance Hotel using prescribed forms, for all work related accidents within 10 days of the accident Third, personnel shall handle the processing of claim Forth, the quantum of compensation is governed by the Workmen’s Compensation Act Fifth, where death occurs and the beneficiary contends the claim, the disbursement of the compensation is as determined by the Commissioner The last, where the deceased workman has no dependents, the compensation is paid into the Worker’s Fund as prescribed by the law

Group 04_GaBAA.SP0109 12

The coverage is effective from the employee’s first day of work and stops on the day that he ceases employment with the Hotel It only covers work related death and disability The coverage is governed by the Workmen’s Compensation Act

In this policy Legend Hotel has guaranteed the rights of workers provisions similar

in Vietnamese Labor Law However, the procedures make employee spent more time so i think the Legend Hotel should reduce review time

3.2 Group term insurance plan

This policy forms part of the Company’s total employment package that is aimed at providing adequate insurance coverage to protect employees and therefore their families, in the events of employee total permanent incapacity or death resulting in loss of earning and financial hardships To provide financial assistance to employees who are disabled through accident or illness and as a result, cannot continue with work To provide financial assistance to dependants when employees are deceased through accident or illness The insurer requires our compliance as spelt put below and the result approved by them before the cover can be effective

Content The Labor Code

of Vietnam

Legend Hotel’s Policy

Evaluation and efficiency Workmen’s

compensation

plan

Similar with The Labor Code of Vietnam

To provide financial assistance to employees who are disabled through accident or illness during the course of work

It is good Because Legend hotel takes care of their employees

However it takes too much time to inform to the organization

Group 04_GaBAA.SP0109 13

With this policy the Legend Hotel have four points to ensure all employees are entitled to this policy All employees are covered The coverage if effective form the employee’s first day of work and stops on the day that he/she cease employment with the Company The coverage is worldwide and 24 hours per day It covers full permanent disability or death as a result of illness or accident except suicide

In this policy the Legend Hotel did right the Vietnamese Labor Law

Content The Labor Code of

Vietnam

Legend Hotel’s Policy

Evaluation and efficiency

Group term

insurance plan

Similar with The Labor Code of Vietnam

To protect employees and their families

This policy is good

Because of this benefit, the employees can get more money to pay for drug or hospital fee

3.3 Personal accident insurance

This policy forms part of the Company’s total employment package that is aimed at providing adequate insurance coverage to protect employees and therefore their families, in the events of employee total permanent incapacity or death resulting in loss of earning and financial hardships To provide financial assistance to employees who are disabled through accident or illness and as a result, cannot continue with work To provide financial assistance to dependants when employees are deceased through accident or illness

Legend Most employees have received the best health insurance That makes employees feel health guarantee should try to provide the best for the Legend Hotel Legend Hotel have similar policies with Vietnamese Labor Law But there is one other than, it is broken out by employee grade to easily pay for insurance when an accident or death while working

Content The Labor Code

of Vietnam

Legend Hotel’s Policy

Evaluation and efficiency

To protect employees and their families

Not quite good because for staff grade C1, when an accident or death happens with them while they are working, this money may not enough for their treatment

There are thirteen main points in this policy First of all, annual leave for employees who works for 1 year, 2 years, 3 years, 4 years, 4 to 9 years, over 10 years follow the table:

Second, for the use of leave, every confirmed employee is eligible to use his/her leave as it accrues Probationary employees are not allowed to take annual leave during their probation Third, every confirmed administrative employee may apply for a minimum

of ½ day leave Half day shall comprise of 4 working hours All other employees shall apply leave at minimum of 1 day unit Forth, leave taken on Saturday by administrative employee who works half day on Saturday shall be considered as 1 day Fifth, for leave accumulation, every confirmed employee may carry over a maximum of one year accrual

Group 04_GaBAA.SP0109 16

into the next year His/her entitlement in any one year shall therefore not exceed the current year’s entitlement plus the previous year’s carry over Sixth, for leave forfeiture, leave carried over from the previous year has to be exhausted in the current year, otherwise

it will be forfeited Seventh, every confirmed employee who resigns shall have his/her annual leave entitlement calculated up to the last day of service He or she is allowed to clear any outstanding leave during the notice period only when the Head of Department is able to grant her/him the leave Eighth, for leave on dismissal, an employee dismissed by the Hotel for misconduct shall have his/her outstanding annual leave forfeited Ninth, for illness during annual leave, every employee on annual leave who is certified sick is not allowed to defer or cancel his/her annual leave taken in accordance with Employment Act Tenth, for annual ineligibility leave, where an employee is granted leave of absence without pay exceeding two weeks in calendar year at the request of the employee, the period of leave shall be disregarded in computing continuous service for purpose of leave eligibility Every employee who absents himself/herself without permission or reasonable excuse for more than 20% of the working days in a calendar year will be forfeit his/her leave entitlement Eleventh, application for annual leave shall be made in writing as far as possible at least one week in advance, forwarded to the Head of Department prior to the commencement of leave Last but not least, where an employee whose leave request has been approved and processed by Personnel Department decides to change his/her leave, the department concerned must notify the Personnel Department immediately

Annual leave is paid time off work for employees to be used for whatever the employee wishes An employee may use annual leave for vacations, rest and relaxation, and personal business or emergencies Number of days of annual leave shall be increased

by seniority in the Legend Hotel

Group 04_GaBAA.SP0109 17

Benefits The Labor Code

of Vietnam

Legend Hotel’s policy

Evaluation and efficiency

Annual leave In Article 74:

Annual leave with full pay, after 12 months of employment have

12 days for annual leave

Annual leave for employees who works for 1 year, 2 years, 3 years, 4 years, 4 to 9 years, over 10 years

Legend Hotel policy

is more detail and fair The Legend Hotel’s policy can increase employees loyaty because they have more days for annual leave if they works in long times

4.2 Compassionate Leave:

Compassionate Leave as part of employee total compensation package on the basis

of competitiveness within the Hotel industry This shows compassion to employee during the critical illness or bereavement of a member of his/ her family Every employee shall notify his/her supervisor and procedure supporting documents for verification when applying for compassionate leave as soon as possible when compassionate leave is required

Every confirmed employee is eligible to apply for a maximum of 3 consecutive working days on the occasion of death or maximum of 1 working day of compassionate leave on the occasion of the critical illness of his/ her family Their family members include the employee’s spouse, child, parent, brother, sister, grandparent and parent-in-law Legend Hotel sends a wreath in the event of death of spouse, child and parent

Employees are entitled to paid leave during funeral care or take care of their family Enabling them to organize and attend the funeral, and have time to resolved private business without wages deduction

Group 04_GaBAA.SP0109 18

Benefits The Labor Code of

Vietnam

Legend Hotel’s policy

Evaluation and efficiency

Compassionate

Leave

In Article 78: Leave three days for personal reasons with full pay on death of a parent (including the parents of the spouse);

death of husband, wife, son or daughter

3 consecutive working days on the occasion of death or maximum

Legend Hotel apply as Vietnamese Labor Law Furthermore, Legend Hotel policies have 1 working day

on the occasion of the critical illness of his/ her family when Vietnamese Labor Law consider as annual leave

4.3 Matrimonial leave

Provide matrimonial leave as part of the compensation package’s employee to compete in the hotel industry This policy sets the matrimonial leave entitlement and applies to all employees throughout the Hotel All employees applying for matrimonial leave shall submit Leave Application Form to Personnel Department through his/her supervisor at least one week before commencement of matrimonial leave

Every employee is confirmed and accepted to have a maximum of 6 consecutive working days of matrimonial leave on the occasion of first league marriage When applying for marriage leaves every employee must submit marriage certificate and invitation card or any other evidence of marriage for verification

Employees may take leave for reasons of marriage They can have time to prepare and hold the wedding that not affect the work efficiency or employees can have honeymoon when they just marriage This is the share weal action of Legend Hotel with employees; make their employees feel comfortable when they still receive full salary as normal and can come back to work after 6 days of matrimonial leave