The impact of human resources management to employees job satisfaction within interior design and construction industry in vietnam

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY THE IMPACT OF HUMAN RESOURCES MANAGEMENT TO EMPLOYEE’S JOB SATISFACTION WITHIN INTERIOR DESIGN AND CONSTRUCTION INDUSTRY IN VIETNAM MASTER OF BUSINESS ADMINISTRATION THESIS Major: Business Administration Major Code: 60.34.05 Supervisor: DR TRAN HA MINH QUAN Student: HOANG TU NGOC Ho Chi Minh City – 2012 COMMITMENT My name is Hoang Tu Ngoc, author of this MBA thesis I would guarantee that this is my own research and has not been published in any previous studies I am fully responsible for above commitment Student Hoang Tu Ngoc Major: Business Administration Major Code: 60.34.05 ACKNOWLEDGEMENT I would like to express my heartfelt gratitude and deepest appreciation to my research supervisor, Dr Tran Ha Minh Quan for his intensive support, valuable suggestions, guidance, and encouragement during the course of my study I would like to thank many of my colleagues at TTT and friends from other companies in interior design and construction area who helped me during the data collection stage I would like to express my sincere gratitude to all of my tutors at Faculty of Business Administration and Postgraduate Faculty, University of Economics Ho Chi Minh City for their teaching and guidance during my MBA course I would like to specially express my thanks to all of my classmates, my friends from for their support and encouragement Hoang Tu Ngoc Ho Chi Minh City, May 2012 ABSTRACT In development of business, human resources management is understood as employees who are working in company and they play an important part of organization It is safe to say that the impact of human resource management is a crucial influence on the job satisfaction of employees and thus affects their performance during working period The research on these effects is essential for every business Based on the model study of Petrescu & Simmons (2008) regarding the impact of human resources management to the job satisfaction of employees, the aim of this research is to explore the practical impact of human resource management to the job satisfaction of employees in interior designer and construction industry in Vietnam Following the result of this research, companies in industry are able to improve the effectiveness of the human resources management Keywords: human resource management, employee’s job satisfaction, teamwork, supervision, recruitment and selection, training and learning, employee involvement, payment LIST OF FIGURES: Figure 1: The matrix Diagram of the organizational structure of TTT Corporation – page Figure 2: The difference between Personnel Management and Human Resource management – page 12 Figure 3: One other point of comparison between Personnel Management and Human Resource Management – page 13 Figure 4: The impact of human resource management to the job satisfaction of employees in interior design and construction industry – page 21 Figure 5: Stages of research – page 24 Contents CHAPTER | INTRODUCTION 1.1 Reason for choosing the research 1.2 Interior design and construction industry in Vietnam within the research topic 1.2.1 General information 1.2.2 Selection of featured companies to study 1.2.3 Organizational chart in interior design and construction company 1.2.4 The work of human resources management 1.2.5 The particularities of the interior design and construction industry and its influence on Human resources management 1.3 Research purposes 1.4 The scope and subject of study 1.4.1 Scope of study 1.4.2 Subjects of study 1.5 The significance of research 1.6 Research Methods 1.7 Research structure CHAPTER | LITERATURE REVIEW 10 2.1 The theory of human resources 10 2.2 The theory of human resource management 10 2.2.1 Definition 10 2.2.2 The difference between Personnel management and Human resource management 11 2.2.3 Characteristic of human resource management 13 2.2.4 The model of human resource management 13 2.3 Analysis on employee’s job satisfaction 19 2.4 Research model 20 2.5 Summary of Chapter 22 CHAPTER | METHODOLOGY 23 3.1 Research Methods 23 3.1.1 Preliminary study 23 3.1.2 Formal research 23 3.2 Method of data processing 24 3.2.1 Inspection by the scale factor Croncbach Alpha 24 3.2.2 Exploratory factor analysis EFA 24 3.2.3 Regression analysis and ANOVA analysis 24 3.3 3.3.1 Surveyor 25 3.3.2 Method of surveying 25 3.3.3 Size and method of sample choosing 25 3.4 Scale adjustment 26 3.4.1 Process of scale adjustment 26 3.4.2 Qualitative research 26 3.4.3 Quantitative research 26 3.4.4 Scale of human resource management in interior design and construction industry 27 3.4.5 Scale for job satisfaction of employees 30 3.5 Methodology 25 Summary of Chapter 30 CHAPTER | RESULT OF RESEARCH 31 4.1 Sample description: 31 4.2 Preliminary evaluation scale with Cronbach Alpha 32 4.2.1 Testing the reliability of the independent variable 32 4.2.2 Testing the reliability of the dependent variable 36 4.3 Scale testing by using Exploratory Factor Analysis (EFA) 37 4.3.1 Factor analysis for Independent variable 37 4.3.2 Factor analysis Dependent variable 40 4.4 Regression Analysis 41 4.5 The results of comparison of human resources management based on characteristics of study components 46 4.5.1 By Gender 46 4.5.2 By Age 48 4.5.3 By Years of experience 49 4.5.4 By Education level 50 4.6 Results 51 4.7 Summary of chapter 53 CHAPTER | CONCLUSION AND SUGGESTION 55 5.1 Introduction 55 5.2 The significance of the study 56 5.3 Proposal for solution of human resource management practices 56 5.3.1 Solution for Payment 56 5.3.2 Solution for Training 56 5.3.3 Solution for Supervision 57 MBA Thesis – Hoang Tu Ngoc 5.4 Limitations and Recommendation for further research 57 5.4.1 Limitations 57 5.4.2 Recommendation for further research 57 REFERENCES 58 6.1 Vietnamese sources 58 6.2 English sources 58 APPENDIX | CONTENT OF GROUP DISCUSSION 62 APPENDIX | QUESTIONARES 65 APPENDIX | VARIABLES AND SYMBOLS 68 10 APPENDIX | CRONBACH ALPHA ANALYSIS 70 11 APPENDIX | EXPLORATORY FACTOR ANALYSIS (EFA) 77 12 APPENDIX | LINEAR REGRESSION ANALYSIS 84 13 APPENDIX | ABBREVIATION, TERMINOLOGY AND LIST OF COMPANIES 86 MBA Thesis – Hoang Tu Ngoc 1 CHAPTER | INTRODUCTION 1.1 Reason for choosing the research Human resources management has always been considered as one of the most important department amongst resources of a company The quality of human resources plays a key role to the success or failure of a business, particularly in the context of the open economy in Vietnam and global competition nowadays During last consecutive years, Vietnam’s economy has been growing with a rapid pace and sustainable development In the late 1980s, when the renovation policies were adopted, Vietnam market became attractive for foreign trade and investment, and private economic activity were legal (Glewwe, 2002) Due to establishment of new companies in Vietnam, demand for office space develops increasingly significant in Ho Chi Minh – the biggest city Following this growth, interior design (1) and construction companies were born to provide the high quality services in fit-out works (2) Working in human resource management of this industry for years, I would apply my experience into a formal research in order to prepare depth knowledge for further development Interior design and construction is a narrow specialization of construction area Scope of services includes the final stage to complete the construction tasks inside a building There are two type of company which provides this service (a) One is specialized in designing only (b) Another one provides fully stages from interior architectural design to build and complete fit-out works This research will study on type (b) – a larger organization – which provides and focuses on high value contracts such as high class office, hotel or resorts from stars standard In order to work in this industry, employees are required to have high level of skills in both aesthetic and technical However, it can be seen the lacking of high education of interior design and construction field in Vietnam, therefore employees need to explore their experience through practical working In many cases, when company, or human resources management, can provide employees chances to enhance their experiences and MBA Thesis – Hoang Tu Ngoc performances in job, this matter has positive impact on employee’s job satisfaction It can be seen that human resources management is considered as a connection between employees and company and in charge of employee’s job satisfaction Without a well-organized system, most of interior design and construction companies are only running to meet the immediate needs of market, instead of working with a stable development In fact, the practices of human resources management focus on solving those daily tasks rather than planning for a long-term strategy That leads to the need of preparing a specific research on human resource management, which based on an appropriate methodology Starting with the research question “The impact of human resource management to the employee’s job satisfaction within interior design and construction industry in Vietnam”, this study attempts to inform and clarify on what and how factors could create satisfaction in current job for employers through the tool of human resource management 1.2 Interior design and construction industry in Vietnam within the research topic 1.2.1 General information As discussed above, this research focuses on interior design and construction industry in Vietnam within large project group only such as high-class office (3) and hotel, resort, which are invested by large companies and organizations This group has the highest fund in the market segment nowadays and is known as a potential market for interior design and construction companies The scope of services provides: architecture interior design, mechanical and electrical (M&E) engineering building services, supply and installation of furniture, Fit-out works It can be said this is a difficult area for companies that want to provide these services because it requires a huge investments, especially furniture manufacturing Also next struggle is to have the high quality of human resources in design works, project management, and construction management and so on This research will select, introduce, and analyze a group of leading companies that represent for Vietnam MBA Thesis – Hoang Tu Ngoc 73 Total 205 100.0 a Listwise deletion based on all variables in the procedure Item Statistics Mean Std Deviation N sel1 3.4439 97167 205 sel2 3.1854 95218 205 sel3 3.5122 92147 205 sel4 3.3366 1.03321 205 sel5 3.1122 99119 205 Scale Statistics Mean 16.5902 Variance Std Deviation N of Items 14.910 3.86131 Table 4.5 Scale: Training and Learning Cronbach's Alpha N of Items 887 Case Processing Summary Cases Valid Excluded(a) Total N % 205 100.0 0 205 100.0 a Listwise deletion based on all variables in the procedure MBA Thesis – Hoang Tu Ngoc 74 Item Statistics Mean Std Deviation N tra1 3.4049 99852 205 tra2 3.2439 89060 205 tra3 3.3805 96081 205 tra4 3.3707 1.04746 205 tra5 3.1707 98773 205 tra6 3.4341 1.00577 205 Scale Statistics Mean Variance Std Deviation N of Items 20.0049 22.250 4.71699 Table 4.6 Scale: Payment Cronbach's Alpha N of Items 839 Case Processing Summary N Cases Valid Excluded(a) Total % 205 100.0 0 205 100.0 a Listwise deletion based on all variables in the procedure Item Statistics Mean Std Deviation N MBA Thesis – Hoang Tu Ngoc 75 pay1 3.2927 88128 205 pay2 3.3463 78718 205 pay3 3.2537 95694 205 Scale Statistics Mean Variance Std Deviation N of Items 9.8927 5.243 2.28983 Table 4.7 Scale: Employee’s job satisfaction Cronbach's Alpha N of Items 896 Case Processing Summary N Cases Valid Excluded(a) Total % 205 100.0 0 205 100.0 a Listwise deletion based on all variables in the procedure Item Statistics Mean Std Deviation N sat1 3.2293 92414 205 sat2 3.1805 90294 205 sat3 3.1024 89893 205 sat4 3.1805 91908 205 sat5 3.1659 91919 205 MBA Thesis – Hoang Tu Ngoc 76 Scale Statistics Mean 15.8585 Variance Std Deviation N of Items 14.730 3.83795 MBA Thesis – Hoang Tu Ngoc 77 11 APPENDIX | EXPLORATORY FACTOR ANALYSIS (EFA) Table 5.1.Scale: Teamwork KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx Chi-Square 842 3084.082 df 253 Sig .000 Communalities Initial Extraction tw1 1.000 719 tw2 1.000 636 tw3 1.000 706 sup1 1.000 714 sup2 1.000 813 sup3 1.000 814 ei1 1.000 834 ei2 1.000 737 ei3 1.000 799 sel1 1.000 748 sel2 1.000 705 sel3 1.000 682 sel4 1.000 701 sel5 1.000 605 MBA Thesis – Hoang Tu Ngoc 78 tra1 1.000 832 tra2 1.000 577 tra3 1.000 697 tra4 1.000 704 tra5 1.000 649 tra6 1.000 828 pay1 1.000 826 pay2 1.000 681 pay3 1.000 717 Extraction Method: Principal Component Analysis Total Variance Explained Compon Initial Eigenvalues ent Tota % of l Varian Extraction Sums of Rotation Sums of Squared Loadings Squared Loadings Cumulati Tota ve % l Varian ce 8.96 38.981 2.19 9.552 1.65 1.50 1.39 6.535 6.054 1.01 48.533 2.19 9.552 l 55.718 1.65 62.252 1.50 68.306 1.39 72.716 1.01 Cumulati Varian ve % ce 38.981 3.84 16.698 16.698 48.533 3.15 13.719 30.417 11.510 41.927 10.584 52.511 10.521 63.032 9.684 72.716 7.184 55.718 2.64 6.535 62.252 2.43 6.054 4.409 ve % % of 38.981 38.981 8.96 7.184 Cumulati Tota ce % of 68.306 2.42 4.409 72.716 2.22 MBA Thesis – Hoang Tu Ngoc 79 4 793 3.447 76.163 650 2.827 78.990 608 2.642 81.632 10 560 2.433 84.065 11 512 2.226 86.291 12 452 1.966 88.257 13 446 1.940 90.198 14 375 1.630 91.828 15 319 1.388 93.215 16 310 1.348 94.563 17 283 1.232 95.795 18 244 1.060 96.856 19 215 934 97.789 20 195 848 98.638 21 124 538 99.176 22 117 510 99.687 23 072 313 100.000 Extraction Method: Principal Component Analysis Component Matrix(a) Component tra5 719 ei3 686 sup2 684 pay1 677 sel2 661 ei2 659 -.506 -.543 MBA Thesis – Hoang Tu Ngoc 80 sup3 659 tra1 658 pay2 658 tra4 656 tra6 654 pay3 649 sel5 644 tra2 638 sel4 630 ei1 607 tra3 600 sup1 579 sel1 554 sel3 533 tw2 526 -.534 -.519 -.539 -.562 515 tw1 619 tw3 588 Extraction Method: Principal Component Analysis a components extracted Rotated Component Matrix (a) Component tra6 872 tra1 864 tra4 669 tra5 649 tra3 639 tra2 624 MBA Thesis – Hoang Tu Ngoc 81 sel1 806 sel4 762 sel3 760 sel2 732 sel5 539 sup3 818 sup2 798 sup1 760 ei1 850 ei3 778 ei2 727 pay1 810 pay3 737 pay2 693 tw1 818 tw3 789 tw2 713 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Transformation Matrix Component 523 441 388 374 392 298 -.690 571 052 -.236 226 297 241 350 -.811 -.143 -.501 103 110 -.244 300 152 -.120 825 345 -.165 -.142 -.768 231 281 458 185 398 -.424 -.715 135 MBA Thesis – Hoang Tu Ngoc 82 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Table 5.1.Scale: Employee’s job satisfaction KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx Chi-Square 798 673.369 df 10 Sig .000 Communalities Initial Extraction sat1 1.000 701 sat2 1.000 645 sat3 1.000 664 sat4 1.000 733 sat5 1.000 794 Extraction Method: Principal Component Analysis Total Variance Explained Component Initial Eigenvalues Extraction Sums of Squared Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % 3.538 70.756 70.756 3.538 667 13.344 84.100 398 7.956 92.055 70.756 70.756 MBA Thesis – Hoang Tu Ngoc 83 241 4.814 96.870 157 3.130 100.000 Extraction Method: Principal Component Analysis Component Matrix (a) Component sat5 891 sat4 856 sat1 837 sat3 815 sat2 803 Extraction Method: Principal Component Analysis a components extracted Rotated Component Matrix(a) Dummy category a Only one component was extracted The solution cannot be rotated MBA Thesis – Hoang Tu Ngoc 84 12 APPENDIX | LINEAR REGRESSION ANALYSIS Variables Entered/Removed(b) Model Variables Entered Variables Method Removed M_EI, M_TW, M_SUP, M_SEL, M_TRA, Enter M_PAY(a) a All requested variables entered b Dependent Variable: M_SAT Model Summary Model R R Square Adjusted R Square 683(a) 466 Std Error of the Estimate 450 56936 a Predictors: (Constant), M_EI, M_TW, M_SUP, M_SEL, M_TRA, M_PAY ANOVA(b) Model Sum of Squares df Regression 56.010 Residual 64.186 198 Total Mean Square F Sig 9.335 28.797 000(a) 324 120.196 204 a Predictors: (Constant), M_EI, M_TW, M_SUP, M_SEL, M_TRA, M_PAY b Dependent Variable: M_SAT Coefficients (a) Model Unstandardized Standardized Coefficients Coefficients B (Constant) 345 Std Error 237 t Sig Collinearity Statistics Beta Tolerance VIF 1.452 148 MBA Thesis – Hoang Tu Ngoc 85 M_TW 038 063 036 592 554 735 1.360 M_SUP 162 061 176 2.655 009 614 1.630 M_SEL 070 067 071 1.049 295 593 1.686 M_TRA 259 067 265 3.844 000 568 1.762 M_PAY 271 072 270 3.745 000 520 1.922 M_EI 056 063 061 584 1.712 896 371 a Dependent Variable: M_SAT Co linearity Diagnostics(a) Mod Dimensi el on Eige Conditi Variance Proportions n on (Consta M_T M_S valu Index nt) W UP M_SE M_TR M_PA L A Y M_ EI e 1 6.82 1.000 00 00 00 00 00 00 00 041 12.889 05 16 04 04 10 05 36 037 13.674 05 10 58 00 02 08 11 030 15.161 08 19 21 46 04 07 00 025 16.533 04 03 03 20 62 05 28 022 17.593 67 38 02 07 01 15 02 018 19.373 11 15 12 22 21 59 23 a Dependent Variable: M_SAT MBA Thesis – Hoang Tu Ngoc 86 13 APPENDIX | ABBREVIATION, TERMINOLOGY AND LIST OF COMPANIES (1) Interior design is a discipline that looks after designing all of the interiors of a space This can include things like flooring, windows, doors, walls, lighting, furniture, and miscellaneous design pieces The goal of interior design is generally to make a space that is both comfortable and aesthetically pleasing, often catered specifically to the needs and likes of the person hiring the interior designer (2) Fit-out works refers to the process or action of installing building infill (3) High-class office, or first class, or superior is of very good quality of working space (4) AA Corporation Website: www.aacorporation.com Head Office: 15 Nguyen Duy Hieu Street, Thao Dien Ward, District 2, HCMC Tel: (84 8) 3744 2728 - Fax: (84.8) 3744 2729 (5) TTT Corporation Website: www.tttcompany.com Head Office: 36 Ly Tu Trong, Ben Nghe Ward, District 1, HCMC, Vietnam Tel: (84 8) 3829 5556 - Fax: (84 8) 3829 7232 (6) CBRE (CB Richard Ellis) is the world’s largest commercial real estate services firm, offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting Website: www.cbrevietnam.com MBA Thesis – Hoang Tu Ngoc 87 (7) Happy Land Website: www.happylanddc.com.vn Home office: 16 Pasteur, District 1, HCMC, Vietnam (8) Saigon Xanh Website: www.saigonxanh.com Home office: 193/25 Nam Ky Khoi Nghia, Ward 7, District 3, HCMC, Vietnam (9) AAH Website: www.aahcorporation.com Home office: 178D Hai Ba Trung, Da Kao ward, District 1, HCMC, Vietnam (10) SPSS (Statistical Package for the Social Sciences) software developed by IBM, is predictive analytics software, encapsulates advanced mathematical and statistical expertise to extract predictive knowledge that when deployed into existing processes makes them adaptive to improve outcomes MBA Thesis – Hoang Tu Ngoc ... practical impact of human resource management to the job satisfaction of employees in interior designer and construction industry in Vietnam Following the result of this research, companies in industry. .. research on the impact of human resource management to the job satisfaction of employees in interior design and construction industry as shown in Figure Figure 4: The impact of human resource management. .. Starting with the research question The impact of human resource management to the employee’s job satisfaction within interior design and construction industry in Vietnam , this study attempts to