The impact of human resource management practices on employee's job satisfaction in Vector Aviation Co., Ltd

1 I H C M TP HCM HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITE LIBRE DE RUXELLES SOLVAY BRUSSELS SCHOOL MBAVB3 DUONG THI KIEU CHINH THE IMPACT OF HUMAN RESOURCE MANAGEMENT IN VECTOR AVIATION CO., LTD MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) VU VIET HANG Ho Chi Minh City (2011) i DECLARATION I hereby would like to certify that this work is original and was done by myself In certain cases, contributions of others that were involved partially or completely were quoted clearly with sources presenting in the references list The work was performed under the guidance of Dr VU VIET HANG and followed the framework of the Master Business Administration program The join Masters Program between Ho Chi Minh City Open University (Vietnam) and Solvay Brussels School (Belgium) The work was completed in February 2011, in Ho Chi Minh City - Vietnam ( name and signature) DUONG THI KIEU CHINH ii As a supervisor for this project, I highly appreciate the working attitude of this candidate as a whole, I would like to suggest the Board of Examination to allow this candidate to defend this project Ho Chi Minh City, 27 February 2011 Dr VU VIET HANG iii ACKNOWLEDGEMENT First of all, I would like to express my deepest gratitude and great appreciation to my supervisor Dr VU VIET HANG for her valuable guidance, advices and great supports throughout the research study I would like to express my great appreciation to all colleagues in Vector Aviation Co., Ltd Deep appreciation and thanks are reserved to Mr Do Xuan Quang Ngoc Nhien CEO, Mr Nguyen Vice Director for their valued discussions as well as providing me with the necessary information Special thanks also to be sent to Ms Van - Head of Human Resource Department, Mr Duc Nghia Commercial Director, Mr Thanh Business Development Manager and Mr Son RFS department, Mr Head of offline sales department for valuable ideas, advices to complete this research I would like to express my sincere thanks to all my classmates MBAVB3 for their sharing with me the knowledge and skills during the challenging courses of this program I wish to express my deepest gratitude to all members of my family for their endless supports, encouragement during my course and this project Finally, I would like to thank all professors of this program for transmitting the valuable lectures and thank to the members of the Examination Committee for taking time and giving valuable comments to improve this study HCM City, February 2011 DUONG THI KIEU CHINH iv ABSTRACT For services companies, human resource has been considered as one of the most valuable assets in the organization Vector is an aviation services company, and it now is facing with a big issue that the labor turnover is increase, while the additional well-trained workforce is severe shortage This problem is greatly concerned by Vec Director They want to know: what kinds of problem does human resource management (HRM) face with? What professional employees expect? Do existing employees satisfy with their job? This research was carried out to provide the comprehensive answers for those questions of BOD The research has three main objectives Firstly, it identifies various components of HRM practices which impact on job satisfaction for Vector Secondly, it tests a model on the impact of HRM practices to job satisfaction Finally, it gives some suggestions to improve HRM practices basing on the findings from the research Based on the literature review, a proposed research model and hypotheses have been developed for Vector Two sets of questionnaire were prepared, one set for qualitative survey and one set for quantitative survey Data from quantitative survey was collected and first used to assess and refine the measurement scales via exploratory factor analysis Then, it was used to test the model and the results were discussed Data from qualitative study and from documentation were collected carefully for further analysis and recommendations The findings of this research investigated a positive link between current HRM practices and job satisfaction in Vector This research provides valuable insights of HRM practices to BOD of Vector understanding key factors impact on job satisfaction v TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 GENERAL BACKGROUND AND STATEMENT OF PROBLEM 1.2 RESEARCH OBJECTIVES 1.3 SCOPE OF STUDY CHAPTER 2: LITERATURE REVIEW 2.1 JOB SATISFACTION THEORIES 2.2 THE IMPORTANT ROLE OF HUMAN RESOURCE MANAGEMENT 2.3 HUMAN RESOURCE MANAGEMENT PRACTICES 2.3.1 Job design 2.3.2 Recruitment and selection 2.3.3 Appraisal 2.3.4 Training and development 2.3.5 Compensation 11 2.4 PROPOSED RESEARCH AND HYPOTHESES FOR VECTOR 12 CHAPTER 3: INTRODUCTION TO VECTOR AVIATION 15 3.1 HISTORY OF VECTOR 15 3.2 16 3.3 CURRENT WORKFORCE AND JOB FAMILY 17 3.3.1 Workforce 17 3.3.2 Job family and its roles 18 CHAPTER 4: RESEARCH METHOD 20 4.1 RESEARCH PROCEDURE 20 4.2 DATA NEEDS 20 4.3 DATA SOURCES 21 4.3.1 Secondary data 21 4.3.2 Primary data 21 4.4 DATA COLLECTION METHOD 22 4.5 MEASUREMENT OF SCALES: 22 4.6 METHOD AND STEPS OF DATA ANALYSIS: 25 CHAPTER 5: 5.1 DATA ANALYSIS AND FINDINGS 26 INTERVIEW DATA ANALYSIS AND FINDINGS 26 5.1.1 Data analysis 26 5.1.2 Findings 27 vi 5.2 DATA ANALYSIS FOR THE MAIN SURVEY AND FINDINGS 29 5.2.1 Data analysis 29 5.2.2 Findings from survey 38 CHAPTER 6: DISCUSSION, CONCLUSION AND RECOMMENDATIONS 40 6.1 DISCUSSION 40 6.2 CONCLUSION 43 6.3 RECOMMENDATIONS 44 6.4 LIMITATIONS AND FURTHER RESEARCH DIRECTIONS 51 REFERENCES 53 APPENDICES 57 APPENDIX 1: MODELS OF HRM 57 APPENDIX 2: CURRENT ORGANIZATIONAL STRUCTURE 59 APPENDIX 3: QUESTIONNAIRES FOR INTERVIEW 60 APPENDIX 4: RELIABILITY ANALYSIS 62 APPENDIX 5: ASSESSMENT SUITABLE DATA 68 APPENDIX 6: FACTOR EXTRACTION 70 APPENDIX 7: REGESSION ANNALYSIS 75 APPENDIX 8: SURVEY SUMMARY_VECTOR 79 APPENDIX 9: DESCRIPTIVE REPORT 83 APPENDIX 10: CURRENT JOB DESCRIPTION 86 APPENDIX 11: PROPOSED NEW JOB DESCRIPTION FORM 89 APPENDIX 12: QUESTIONAIRES 91 vii LIST OF TABLES Table 3.1 15 Table 3.2 Gender structure of employees 17 Table 3.3 Educational background of employees 17 Table 3.4 18 Table 4.1 Summary of scales for constructs 23 Table 5.1 Summary results of reliability analysis 31 Table 5.2 Summary results of assessment suitable data 32 Table 5.3 Rotated Component Matrix (a) 33 Table 5.4 Summary result of factor analysis 34 Table 5.5 Collinearity statistics 35 Table 5.6 Model Summary and statistics significant 36 Table 5.7 Model Summary and statistics significant- extracting ANOVA 37 Table 5.8 Multiple regression result 37 Table 6.1 Suggestion several training course for Vector in 2011 46 Table 6.2 Proposed job analysis process for Vector 49 viii LIST OF FIGURES Figure 2.1 Figure 2.2 -factor theory Figure 3.1 Growth rate in volume (unit: 1,000tons) 16 Figure 3.2 Market share in 2010 16 Figure 5.1 Job position of respondents 29 Figure 5.2 Age of respondents & Educational level of respondents 30 Figure 5.3 Members of year experience & No of years works for Vector 30 Figure 5.4 Normal Q-Q plot of standardized residual 36 Figure 5.5 Confirmed research model 39 ix LIST OF ABBREVIATIONS ABBREVIATION MEANINGS HRM : Human resource management BOD : Board of Director IATA : International Air Transport Association FEDAGSA : Federation of Airline General Sales Agents TIACA : The International Air Cargo Association VIFFAS : Vietnam Freight Forwarders Association GSSA : General Sales and Services Agent 77 Residuals Statistics(a) Minimum Maximum Predicted 2.42 7.08 Value Residual -1.689 1.361 Std Predicted -3.193 2.112 Value Std -2.869 2.312 Residual a Dependent Variable: JS Mean Std Deviation N 5.22 0.878 150 0.000 0.577 150 0.000 1.000 150 0.000 0.980 150 78 79 APPENDIX 8: SURVEY SUMMARY_VECTOR 80 81 82 83 APPENDIX 9: DESCRIPTIVE REPORT N Minimum Maximum Mean Std Deviation 150 4.83 1.51 JD1 You have been informed all information relating your job (roles, duties, supervisor, report process, specification of job, standard performance) 150 4.83 1.87 JD2 Your job description is often updated by direct supervisor or HR department 150 4.50 1.98 JD3 Your current job is suitable to your task, skill and knowledge 150 5.17 1.63 150 4.31 1.48 Statement JD- JOB ANALYSIS RS- RECRUITMENT & SELECTION RS1 Company has recruitment process with clear criterias 150 4.56 1.66 RS2 Having job description for each job title 150 4.05 2.01 RS3 Recruitment committee has enough competences and experience 150 4.87 1.65 RS4 Having suitable sets of exam for each job title when recruitment 150 3.77 1.90 150 4.31 1.16 CB- COMPENSATION CB1 Your based salary is competitive with salary of similar jobs elsewhere 150 3.73 1.45 CB2 Your current based salary is adequate with roles, duties, skill, knowledge and competences of yours 150 4.11 1.47 CB3 Group incentives package is quite clear criteria and reasonable target 150 4.81 1.47 84 CB4 is adequate with your contribution 150 4.57 1.62 150 5.62 0.94 BT-BENEFIT CB5 You are very satisfied with bonus amount on national holidays 150 5.13 1.40 CB6 You are satisfied with allowances package (such as transportation, telephone, overtime - if occur) 132 5.59 1.11 CB7 Benefit package ( health insurance, annual health examination, annual vacation trip ) is very appropriate 150 6.06 1.09 150 4.52 1.21 TD- TRAINING & DEVELOPMENT TD1 The training you've received is useful for the job 150 5.03 1.49 TD2 Training opportunities are allocated fairly to all employees 150 4.55 1.69 TD3 Training program is held regularly in accordance with job requirement 150 4.35 1.56 150 4.85 1.36 150 4.93 1.41 150 3.97 1.61 150 3.97 1.60 150 4.15 1.30 150 4.11 1.76 TD4 TD5 TD6 TD7 Direct manager or supervisor often supports you to learn more issues beside your current job Management people often encourages and support you to develope your career You are clearly informed the standard requirements for a job position which you want to develop your career You are often updated information relating to career opportunities, training course PM-PERFORMANCE MANAGEMENT PM1 The objectives and criteria in the appraisal process are clear, logical and reliable 85 PM2 150 3.89 1.52 PM3 You know clearly all criteria (KPI)in current appraisal process Your direct manager or supervisor is compliant with appraisal criteria in process to ensure fairness for all staffs in your department 150 4.53 1.36 PM4 You are satisfied with current appraisal process 150 4.05 1.42 150 5.22 1.05 JS-JOB SATISFACTION S01 The company is really a good place to work 150 5.33 1.42 S02 Working condition is very good 150 5.21 1.34 S03 You are satisfied with your current job 150 4.97 1.43 S04 You like to work in long time with the company 150 5.46 1.17 S05 You would like to build the company's prestige 150 5.15 1.21 86 APPENDIX 10: CURRENT JOB DESCRIPTION VECTOR AVIATION CO., LDT A8 Truong Son, Tan Binh District, HoChiminh City Telephone: 6293 9425 Fax : 62939428 Website : www.vector-aviation.com.vn JOB DESCRIPTION (CURRENT VERSION) Job title: Job family: Department : Job holder : _ Respond for : Report to: Location: _ Date: _ For HR department only: Job code : - Salary grade : -Type of contract : Probation Permanent Level of grade : -Under 12 months Others Version no.: _ Dated: _ Approved by : Title: JOB SUMMARY: Date of approval: Effective date : / / / / 87 RESPONSIBILITIES AND DUTIES AND SCOPE OF RIGHTS Content Time schedule RELATIONSHIP Internal relationship Direct manager: External relationship Subject Clients ROLES OF SUPERVISORS Direct supervisor: Indirect supervisor: WORKING CONDITION Inside (working in office): Supervisor: Related department: Content 88 Outside (details): WORKING TIME Please tick to suitable box: Fulltime Part-time Others (please write in details) Does job require more specific condition such as overtime? Please indicate clearly: JOB SPECIFICATIONS FULLNAME AND SIGNATURE: 89 APPENDIX 11: PROPOSED NEW JOB DESCRIPTION FORM VECTOR AVIATION CO LTD A8 Truong Son, Tan Binh District, Ho Chi Minh City, Vietnam Telephone: (84-8) Fax: (84-8) JOB DESCRIPTION ( proposed) Version Date Effective date Total pages Updated by Approved by 01 18/01/2011 24/01/2011 03 HR Dept BOD I/ JOB IDENTIFICATION Job Title: Job code Department: Job family Direct supervisor's Title: Working time Name of Direct supervisor Working location II/ JOB SUMMARY: III/ RESONSIBILITIES AND DUTIES No Duties Job description - - IV/ RELATIONSHIP NETWORK: Internal External Direct Direct Indirect Indirect - - - - 90 V/ WORKING CONDITION - JOB SPECIFICATION Gender/ Age: - Health - Educational level - Foreign language - VI/ - Information Technique Experience Knowledge in aviation logistics industry Skills - Competences - 10 Other requirements - Job Holder Direct supervisor HR officer CEO Name Name Name Name Date Date Date Date 91 APPENDIX 12: QUESTIONAIRES See attachment ... which impact on job satisfaction for Vector Secondly, it tests a model on the impact of HRM practices to job satisfaction Finally, it gives some suggestions to improve HRM practices basing on the. .. AND STATEMENT OF Vector Aviation Co., Ltd (Vector) is one of the top three distributors in aviation services in Vietnam It provides all range of aviation services including airlines general sales... link between current HRM practices and job satisfaction in Vector This research provides valuable insights of HRM practices to BOD of Vector understanding key factors impact on job satisfaction