Low job satisfaction in viet nam star automobile

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI THANH TAM LOW JOB SATISFACTION IN VIETNAM STAR AUTOMOBILE ID: 22130064 MASTER OF BUSINESS ADMINISTATRION SUPERVISOR: Dr LE NHAT HANH Ho Chi Minh City – Dec, 2016 TABLE OF CONTENT ACKNOWLEDGEMENT EXECUTIVE SUMMARY CHAPTER 1: COMPANY INTRODUCTION 1.1 General Information about Vietnam Star Automobile 1.2 Company background 1.3 Organization chart CHAPTER 2: PROBLEM IDENTIFICATION 2.1 Problem context 2.2 General symptoms 2.2.1 The first symptom: High employee turnover 2.2.2 The second symptom: Increasing customers complaints 2.2.3 The third symptom: Decreasing in sales performance 12 2.3 Identifying and Diagnosing Tentative Problems 13 2.3.1 The first tentative problem: low satisfaction in internal communication 14 2.3.2 The second tentative problem: low satisfaction in pay and compensation 16 2.3.3 The third tentative problem: low satisfaction in management skills 19 2.4 The real problem: low job satisfaction 23 2.5 Verifying the importance of job satisfaction 30 2.6 Verifying the existence of real problem: Low job satisfaction in Vietnam Star Automobile 32 2.7 Causes and Effects chart of real problem: Low job satisfaction in Vietnam Star Automobile 33 CHAPTER 3: ALTERNATIVES ANALYSIS AND POSSIBLE SOLUTIONS 35 3.1 Verify causes of the real problem 35 3.2 Root cause: poor pay and compensation 38 3.3 Possible solutions 42 3.3.1 Solution 1: Providing non-monetary compensation-learning and training programs 42 3.3.2 Solution 2: Developing a proper annual performance and salary review plan 46 3.3.3 Solution 3: Creating an effective incentive compensation plan 50 CHAPTER 4: SUPPORTING INFORMATION 54 4.1 Interview transcription 54 4.2 Literature review factors of real problem 59 4.3 Job satisfaction survey 60 4.4 Survey on factors of job satisfaction 60 4.5 Satisfaction survey on facets of job satisfaction 61 4.6 The understanding of staff about KPIs in Performance Appraisal form 64 REFERENCES 65 LIST OF TABLES Table 1: M-Rate from Jan to Dec 2015 Table 2: Number of customer complains about delayed delivery and long waiting time for service done Table 3: Average score of customer satisfaction about VSAL service Table 4: Sales achievement from 2013 to 2015 Table 5: Management skills assessment survey Table 6: Survey on factors of job satisfaction in Vietnam Star Automobile Table 7: Pay and compensation satisfaction survey result Table 8: Plan to build a good training program for staffs Table 9: Plan for employee performance review Table 10: Step to build up an effective incentive compensation plan Table 11: Factors of building up an effective incentive compensation plan ACKNOWLEDGEMENT I am grateful to my supervisor, Dr Le NhatHanh, whose expertise, understanding, generous guidance and support made it possible for me to work on a topic that was of great interest to me It was my pleasure working with her I am hugely indebted to Managers of Vietnam Star Automobile, Mr Tu, Mr Do, Ms Thu, Ms Trang and Ms Tho, for finding out time to response to my questions for being ever so kind to show interest in my research and for giving their precious and kind advice regarding to my topic I would like to express my gratitude to co-workers at Vietnam Star Automobile for being so generous to reply to my questionnaires Words can never be enough to thank your all kindness EXECUTIVE SUMMARY This project is conducted at Vietnam Star Automobile Limited Company The purpose of this project is figuring out the reasons for increasing employee turnover from 12.3% at the end of 2014 to over 25% in December of 2015, the increasing in customers complains according to the report from Customer management department and falling business result in 2015 comparison to the one of year 2014 Low job satisfaction among staffs is the real problem because there is a consistency between literatures informed reviews and the collected data from Vietnam Star Automobile during deep interviews with managers, mini-survey on staffs and reports from customer relationship management department, human resource department and financial department In a further investigation, the root causes of low satisfaction are figured out and corresponding solutions are given to improve the situation There are three alternative solutions proposed as following:  Providing learning and training opportunities to employees  Develop employee performance review plan and salary increase  Build up an effective incentive compensation plan CHAPTER 1: COMPANY INTRODUCTION 1.1 General Information about Vietnam Star Automobile Vietnam Star Automobile is a 100% foreign invested authorized retailer of Mercedes-Benz products It was established in 2005 by the Hong Kong based Lei Shing Hong Group, a strategic partner of MercedesBenz in Asia with over 200 Mercedes-Benz outlets including two in Vietnam It is proud to have a professional workforce with international standards and continuously wins the best service prize during five years from 2009 to 2014 as well as the highest Customer Service Indicator prize during six years from 2008 to 2013 According to the Board of Director meeting at the end of year 2014, its mission for the period from 2015 to 2020 is “being the Number in Quality, Image and Profitability in the Automobile Sector in Vietnam” This mission creates some challenges for the company including: continually improve the quality services, delighting customers and stakeholders in everything which the company is doing, building and remaining a healthy financial situation 1.2 Company background Name of the company: VIETNAM STAR AUTOMOBILE LIMITED., CO Short name: VSAL or VSA Head office: No 811-813 Nguyen Van Linh, Tan Phong Ward, District 7, Ho Chi Minh city, Vietnam Tax code: 3 3 0 Tel: +84 (0) 854 112 280 Fax: +84 (0) 854 112 290 Website: http://www.vietnamstar-auto.com Sector: retailer of Mercedes-Benz products in Vietnam Branches: Phu My Hung and Truong ChinhAutohauses in Ho Chi Minh City; Ha NoiAutohaus and Ha Noi showroom in Ha Noi city; NhaTrangAutohaus in NhaTrang city, Body and Paint center in Ho Chi Minh City Number of employees from 2010 to 2015 of branches is presented as below Branch name Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 Y 2015 Phu My Hung branch 85 97 92 106 111 124 Truong Chinh branch 89 92 91 89 95 97 Ha Noi branch 46 39 42 41 50 56 Ha Noi branch 26 28 29 31 29 35 NhaTrang branch 0 15 18 22 Body and Paint branch 0 0 33 38 (Source: Human resource report in Dec 2015) Business activity of Vietnam Star Automobile combines trading Mercedes-Benz cars, accessories, providing after sales service and brokageIt is summarized by the following chart Trading MBV Cars Business activities Trading MBV Trucks (FUSO) Trading MBV’s accessories Insurance brokerage 1.3 Organization chart General Director Secretary to GD General Manager, Dealer operation Group CRM & DS Manager CRM staff Chief Financial Officer Dealer Principle Sales Manager Old cars Sales Manger New cars Sales support Manager Salesmen After-sales service Manager Sales supervisor Salesmen Technicians, Body repair, car washers, WS admin, parts controllers General Manager, Group HR Admin Manager HR Manager IT Manager C&B Manager Project Manager Marketing Manager Tax Manager Chief Accountant CHAPTER 2: PROBLEM IDENTIFICATION 2.1 Problem context During the December 2015 meeting between CEO, CFO and all heads of department was hold in headquarter, there were some issues about human resources and management which were raised Firstly, the human resources manager reported that there was a risk about the employee engagement To be specific, the number of resigned staffs was increasing dramactically for the first six months of 2015 in comparision to the number at the same period in 2014 This situation put a significant pressure on the new recruitment demand including cost of replacement and cost of training The head of human resource department also presented his opinion about the status of poor coordination among staffs and through departments He strongly believed that it was a reason for the high employee turnover score Secondly, the manager of client relationship management department expressed her worry about the staffs’ productivity and performance She said that they recoginized the working efficiency of people was falling Staffs were usally late in reporting and delayed in giving information or feedback to managers in neccessary cases In addition, the complaints which received from client increase definitely They suggest that company should have a proper internal information system to make sure that customers’ requests are fully transferred to the engineer and workers Thirdly, the sales head recommended that the company must decrease the number of meetings which are hold during a week and increase the incentive for salesmen The salesmen complained to him that they meed more time to go out for visiting and looking for new customers Due to so many meetings they have to take part and due to the long time of each meeting, their time for other tasks are decreased unintentionally He salesmen also expect for a higher commission from car selling activity They said that it was not easy for them to catch a new customer They had to spend several months or even a year from seeing customer at the first time till the day cars were delivered They think that they are served enough to get a higher commission amount for each car sold The engineers and workers in workshop also ask for a higher incentive for their services done and delivered to clients ... problem: low job satisfaction 23 2.5 Verifying the importance of job satisfaction 30 2.6 Verifying the existence of real problem: Low job satisfaction in Vietnam Star Automobile. .. salary increase  Build up an effective incentive compensation plan CHAPTER 1: COMPANY INTRODUCTION 1.1 General Information about Vietnam Star Automobile Vietnam Star Automobile is a 100% foreign invested... 172 95.56% (Source: Financial Report in Dec.2015-Unit: Million USD) Vietnam Star Automobile is the biggest dealer of Mercedes-Benz in Vietnam During 10 years running business, it always meet