Employee motivation, satisfaction and retention case study of vietnam airlines expat pilot

EMPLOYEE MOTIVATION, SATISFACTION AND RETENTION CASE STUDY OF VIETNAM AIRLINES’ EXPAT PILOT In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In Marketing Management By Ms.: Vuong Hoang Linh ID: MBA06016 International University - Vietnam National University HCMC August 2014 EMPLOYEE MOTIVATION, SATISFACTION AND RETENTION CASE STUDY OF VIETNAM AIRLINES’ EXPAT PILOT In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In Marketing Management By Ms.: Vuong Hoang Linh ID: MBA06016 International University - Vietnam National University HCMC August 2014 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree Approved: -Chairperson -Committee member -Committee member -Committee member -Committee member -Committee member INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ASSURANCE QUALIFIED THESIS Student’s Name: Vuong Hoang Linh Student ID: MBA06016 Title of Thesis: Employee Motivation, Satisfaction And Retention: Case Study Of Vietnam Airlines’ Expat Pilot Advisor: Nguyen Quynh Mai Ph.D I assure that the content of this thesis has been qualified all requirements for a research paper and able to participate in the final thesis defense Approved by i Acknowledge I would never have been able to finish this thesis without the guidance of committee members, help from friends and interview participants, and support from my family I am most grateful to my parents and brother for giving me their best support and encouragement at all times I would like to express my deepest gratitude to my advisor, Dr Nguyen Quynh Mai for her excellent guidance and support to improve my thesis from a beginning idea to the final research I would like to thank my MBA classmates for their great support throughout the MBA journey The special thanks come to Tuan and Trang who have dedicated their time and support to help me finish this thesis I would like to thank all the pilots who have devoted their time to take part in the interviews for my research Without their knowledge and experiences, this thesis would have never been fulfilled Finally, I would like to acknowledge the financial, academic and technical support of the Vietnam International University I also thank the School of Business, all lecturers and assistant staffs for their teaching and assistance since the start of my MBA course in 2012 ii Plagiarism Statements I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam National University Ho Chi Minh City iii Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author’s prior consent © Vuong Hoang Linh/MBA06016/2012-2014 iv Table of Contents Acknowledge ii Plagiarism Statements iii Copyright Statement iv List of Tables vii List of Figures viii Abbreviation List ix Abstract xi Chapter One - Introduction 1 Company Background: Problem Statement: Research Objectives: Research Questions: Limitation and Scope of Research: Implication for the research: Chapter Two - Literature Review Employee Motivation: 1.1 Maslow’s Hierarchy of Needs: 1.2 Herzberg’s two factor theory: 1.3 Goal-Setting theory: 1.4 Expectancy Theory: Employee Satisfaction: 10 Employee Loyalty: 11 Human Resource Management (HRM) in Airlines: 12 Chapter Three - Research Methodology 16 Research design: 16 1.1 Setting and sample: 16 1.2 Data collection: 17 1.2.1 Interview procedures: 17 1.2.2 Interview questions: 17 Data analysis method: 17 Chapter Four – Findings and Results 20 Factors concerning employee satisfaction and retention of Vietnam Airlines’ expat pilots: 20 v 1.1 Theme 1: Job Stress 20 Sub Theme 1: Workload 21 Sub Theme 2: Flight Roster 23 Sub-theme 3: Performance pressure 27 1.2 Theme 2: Perceived Organizational Support (POS) 28 Sub-theme 1: Supervision Support 28 Sub-theme 2: Employee Feedback 30 Sub-theme 3: Employee Assistance 31 1.3 Theme 3: Salary 34 1.4 Theme 4: Benefit package 37 1.5 Theme 5: Organizational Justice 40 1.6 Theme 6: Promotional Chances 43 1.7 Theme 7: Alternative Job Opportunities 46 Causal model of employee retention for Vietnam Airlines’ expat pilots: 48 Chapter Five – Conclusions and Recommendations 51 Conclusions: 51 Suggestions for Vietnam Airlines to improve employee motivation, satisfaction and retention of expat pilots: 52 2.1 Improve scheduling: 53 2.2 Improve HRM practices: 54 2.2.1 Improve salary and rewarding system 54 2.2.2 Improve Benefit package 55 2.2.3 Reduce performance appraisal pressure 56 2.2.4 Offer good Promotional Chances 57 2.2.5 Improve Two-way Communication between Expat Pilots and Supervision 57 2.2.6 Improve paper work procedures 58 2.2.7 Improve Fair Treatment 58 Recommendations for further research: 60 References 61 Appendix 69 vi List of Tables Table 1: Definitions of Determinants and Intervening Variables 49 Table 2: Causal relationships of Determinants and Intervening Variables 50 vii List of Figures Figure 1: Frequency summary on Themes concerning employee satisfaction and retention of Vietnam Airlines’ expat pilots 20 Figure 2: Causal model of employee retention for Vietnam Airlines’ expat pilots 50 viii Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots mistakes in the future In addition, it will reduce the performance pressure on pilots and make them feel more satisfied when working at the company 2.2.4 Offer good Promotional Chances To most of expat pilots, promotional chance is very important, a good motivation that keep them staying loyal with Vietnam Airlines Moreover, compare with Vietnamese pilots, expats have more profound experiences from previous jobs in different airlines When they have good promotional opportunities, they can use their specific experiences to help the airline Thus, promotional chance will create win-win result for both sides: expat pilots and the company Vietnam Airlines should give expat pilots more room to upgrade to wide-body aircrafts because this kind of upgrade is very attractive A lot of major airlines in the world have wide-body aircrafts such as A380 or B777 and if expat pilots cannot have upgrade to these types, they can easily quit job to find better offers from the competitors 2.2.5 Improve Two-way Communication between Expat Pilots and Supervision Vietnam Airlines managers should let expat pilots attend more meeting with their fleets The meeting will be the chance for expat pilots to give more suggestions to improve operational procedures and working conditions It also helps expat pilots feel more attached with the company since their opinions are recognized by managers and colleagues Besides, the airline should also give feedback for every Captain Report to confirm that these reports are counted for future consideration This practice will help to improve two-way communication between expat pilots and Vietnam Airlines and motivate expat pilots to share good knowledge from their experiences with other Vuong Hoang Linh - MBA06016 Page 57 Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots airlines, as one informant said: "I would say when I see the different things in different places; I just try to get people to consider the opinions." 2.2.6 Improve paper work procedures With the paper work issues, the airline is trying to accelerate the procedure to help expat pilots get their Work Permit as soon as possible When all expat pilots receive Work Permit, they can get one year Vietnamese visa or even get Residence Pass with more than years temporary living allowance Moreover, with Vietnam Airlines' certification, expat pilots can get longer family visa following their Work Permit These improvements will calm all complaints of Vietnamese visa problems and make expat pilots feel more satisfied with the supports from Vietnam Airlines The ticket procedure will need some improvements to reduce the booking time and paper requirements It would be better if the company applies automatic employee ticket system that allow expat pilots to book vacation and ID tickets for themselves through the Internet This will be more convenient for expat pilots when they can access the ticket system anytime they want 2.2.7 Improve Fair Treatment To the management, expat pilots were considered as outsource workforce, not as the essential part of the company Thus, the airline gave best career opportunities to Vietnamese pilots with the expectation that someday they could replace all the expats However, when the number of aircrafts is continually increasing, this expectation becomes illusive Now the company tries to recruit as much expat pilots as they can but it seems that good candidates are really hard to find, thanks to the fierce competition for high-skill pilots From this fact, to reach the long-term plan of having 600 expat pilots in 2020, Vietnam Airlines should improve their fair treatment by reduce differentiation in HR practices between Vietnamese and expats Vuong Hoang Linh - MBA06016 Page 58 Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots First, with job security, expat pilots are recruited following the pilot resource planning Normally, the Flight Crew Division will set up the resource plan based on annual operation plan, the number of aircrafts, the number of existing pilot force and the training plans Thus, the company sign only years renewable contract with all expat pilots In case there are redundancies in pilot force, expat pilots will be dismissed or shifted among different fleets to fulfill the vacancies The company can also terminate the contract if expat pilots make safety mistakes or violate the company’s rules The years contract can be attractive for expat pilots who like to switch jobs in different airlines to gain higher salary and experiences But for expat pilots who need a stable job, they prefer contracts which can guarantee them a long time employment until they retire Thus, Vietnam Airlines should sign longer contracts with expat pilots who have this expectation By this way, loyal expat pilots will not feel worry about their future, and will devote all of their efforts to work for the airline Besides, because a lot of expat pilots have negative perception that the airline can easily terminate their contracts, they will tend to find other companies with better work conditions Thus, to fix this negative feeling, Vietnam Airlines' management should yield positive beliefs among expat pilots by the promise that the airline will not place them out of the long-term development Second, the company should let expat pilots to go on GD to go places around Vietnam in their short vacation One informant thought that this is a kind of no-cost benefit which can motivate expat pilots and make them feel more attached with the company: "On GD, position somewhere on my day off, this is little thing that is no cost for the company You don’t need to increase my salary You give me a little bit of this, to fly somewhere in Vietnam: to Phu Quoc or small places This is the kind of example that Vuong Hoang Linh - MBA06016 Page 59 Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots Vietnam Airlines can to make people feel “a part of it”." This practice can also remove the unfair treatment which only allowed Vietnamese staff to go on GD Recommendations for further research: Vietnam Airlines management can reference the findings from this case study to design further researches on employee loyalty not only for the Flight Crew but also for the whole corporation Moreover, future researches can reference the causal model to quantify the affect of each determinant on employee loyalty Vuong Hoang Linh - MBA06016 Page 60 Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots References Adams, J S (1965), Inequity in social exchange In Berkowitz, L (ed.), Advances in experimental social psychology New York: Academic Press Addison J T., & Belfield C R (2002) What Do We Know About the New European Works Council? 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Why did you choose to work for Vietnam Airlines? Main questions: How was your work recently? How did you feel about “being part of Vietnam Airlines”? How did you get along with your colleagues at work? How would you describe your relationship with Vietnam Airlines’ managers? How did you experience your work load? (Schedule, Roster) How did you experience flight operation at Vietnam Airlines? How did you experience the training at Vietnam Airlines? During the time you worked at the company, was there any time you felt dissatisfied with your work? If yes, why? What is the importance of raising opinions in work? When you raised your opinions in work, how Vietnam Airlines’ managers considered them? 10 In times when you needed helps from Vietnam Airlines for personal reasons, did you receive sufficient help from the company? 11 Beside fixed salary and benefits, you think that Vietnam Airlines should give more benefits to expat pilots? If yes, what benefits you expected from Vietnam Airlines? Vuong Hoang Linh - MBA06016 Page 69 Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots 12 What were your reasons for leaving Vietnam Airlines? 13 In your opinion, what are your recommendations for Vietnam Airlines to retain their current expat pilots? Interview questions for current pilots: Background questions: Tell briefly about your background (Name, age, rank, previous work experiences) For how long have you been working at Vietnam Airlines? Why did you choose to work for Vietnam Airlines? Main questions: How is your work recently? How you feel about “being part of Vietnam Airlines”? How you get along with your colleagues at work? How would you describe your relationship with Vietnam Airlines’ managers? How you experience your work load? (Schedule, Roster) How you experience flight operation at Vietnam Airlines? How you experience the training at Vietnam Airlines? Is there any time you felt dissatisfied with your work? If yes, why? How you feel about the importance of promotional opportunities? How did Vietnam Airlines’ managers consider your promotional goals? 10 How you feel about the importance of raising opinions in work? When you raised your opinions in work, how Vietnam Airlines’ managers considered them? 11 In times when you needed helps from Vietnam Airlines for personal reasons, did you receive sufficient help from the company? 12 Are you satisfied with your current salary? Do you think that you are fairly paid for your work contributions both individually and in comparison to your Vuong Hoang Linh - MBA06016 Page 70 Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines’ Expat Pilots colleagues? Why? 13 Beside fixed salary and benefits, you think that Vietnam Airlines should give more benefits to pilots? If yes, what benefits you expect from Vietnam Airlines? 14 Which would be your best reasons for staying with Vietnam Airlines? 15 In your own opinion, what Vietnam Airlines should to improve job satisfaction of pilots who are working for the company? Vuong Hoang Linh - MBA06016 Page 71 .. .EMPLOYEE MOTIVATION, SATISFACTION AND RETENTION CASE STUDY OF VIETNAM AIRLINES? ?? EXPAT PILOT In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION... Themes concerning employee satisfaction and retention of Vietnam Airlines? ?? expat pilots 20 Figure 2: Causal model of employee retention for Vietnam Airlines? ?? expat pilots 50 viii Abbreviation... MBA06016 Page Employee Motivation, Satisfaction and Retention Case study of Vietnam Airlines? ?? Expat Pilots issues Thus, Vietnam Airlines now face problems not only to hire new expat pilots but also