Luận văn thạc sỹ_Solutions motivating Vinashin’s employees

Luận văn thạc sỹ tiếng Anh_Giải pháp thúc đẩy nhân viên Vinashin. ______ Structure of the thesis The thesis included five chapters: Chapter 1: Introduction Chapter 2: Theoretical background Chapter 3: An overview of Vinashin Finance Company Chapter 4: Findings Chapter 5: Solutions for motivating Vinashin Finance Company’s employees TABLE OF CONTENTS ACKOWLEDGEMENT 1 ABBREVIATION 4 LIST OF TABLES 5 LIST OF FIGURES 6 LIST OF FIGURES 6 EXECUTIVE SUMMARY 7 CHAPTER 1 : INTRODUCTION 9 1.1. Rationales of the thesis 9 1.2. Research objectives 10 1.3. Research questions 11 1.4. Research methodology 11 1.4.1. Research process 11 1.4.2. Secondary data 11 1.4.3. Primary data 11 1.5. Research scope 14 1.6. Structure of the thesis 15 CHAPTER 2 : THEORATICAL BACKGROUND ON MOTIVATION 16 2.1. The definition, substance and necessary of motivation 16 2.1.1. What is motivation? 16 2.1.2. The substance of work motivation 18 2.1.3. The necessary of improving the work motivation for employees 19 2.1.4. Relevant motivation surveys researches: 21 2.2. Theoretical motivation theories 22 2.2.1. Maslow’s Hierarchy of Needs 22 2.2.2. The TwoFactor Theory (Herzberg) 25 2.2.3. Equity Theory (John Stacey Adams) 29 2.2.4. Job Characteristics Model 30 2.2.5. Goal Setting Theory 32 2.3. Relevant theories and model for the case of VFC 32 CHAPTER 3 : OVERVIEW ABOUT VINASHIN FINANCE COMPANY 35 3.1 General introduction about VFC 35 3.1.1. The vision, development principle, and target for 2010 of VFC 35 3.1.2. VFC’s labor force characteristics 37 3.2. Products and services 41 3.3. VFC’s HRM strategy and practice 41 CHAPTER 4 : FINDINGS 44 4.1. Findings on VFC employee’s general motivation opinion 44 4.2. Findings VFC’s motivation problem in relation to Hygiene factors (work environment) 49 4.2.1. Pay and security 49 4.2.2. Clear goals 53 4.2.3. Quality of supervision 57 4.2.4. Working conditions 60 4.3. Findings VFC’s motivation problem in relation to Motivational factors (work content) 64 4.3.1. Recognition 64 4.3.2. Work itself 65 4.3.3. Advancement and growth 67 4.4. Findings the root cause of turnover and low satisfaction in VFC’s professional employee 69 CHAPTER 5 : SUGGESTIONS FOR VFC TO ENHANCE EMPLOYEE MOTIVATION 72 5.1. Being wary of Financial Incentives and Rewards 72 5.2. Clarifying expectations (ensure clear goals for each unit) 75 5.3. Hiring the Right People Weed out Poor Managers 78 5.4. Improving working conditions at VFC 81 5.5. Redesigning work to enrich jobs 82 5.6. Using smart training as a development tool for employees 83 5.7. Other feasible solutions when the firm falls into the disadvantage context 85 CONCLUSION 87

CHAPTER 1 : INTRODUCTION1.1 Rationales of the thesis

Vinashin Finance Company is a state-owned finance company and member of theVietnam Shipbuilding Industrial Group (VINASHIN) that was established from 1998, by theMinistry of Transportation VFC’s main roles are arranging funds for investment projects,setting up projects for local and international bond issuance, receiving trust funds andproviding financial services for VINASHIN and its members

The results of exit survey and analyzing VFC’s HRM indicators from 2006 to early

2010 revealed the serious problems of VFC There is an increasing of negative feedbacks andcomplaints from the turnovers about treatment policies for professional staffs through theresults of exit survey And in 2009, the VFC’s unilateral turnover rate of labor contracts standsapproximately at 17% of labor force, 7% increase over last year), higher than the other stateowned banks and other financial organizations

Figure 1.1 Turnover rate in some financial organizations

(Source: Survey by author, Oct 2010)

In addition, brain drain which is becoming a "problem" has plagued most of theenterprises, particularly state enterprises During recent 10 years, Vietnam's economy haswitnessed the appearance of series of credit organizations, commercial banks, joint venture

banks, and branches of foreign banks This refers to the development of the Vietnam financialsector in recent years However, learning about inside of the credit organizations and the banks,

we can see that they are still looking for the answer to the paradox: paying staff high and the

lack of talent And a fierce competition fighting for high quality human resources has taken

place among these credit organizations.

Recently, crisis of "Vinashin Group’s management” at the end of 2010 and the

Vinashin’s restructuring also cause negative impacts for VFC employees’ motivation After this

important event is happened, not only VFC staff is concerned with the restructuring process of VFCbut also Vietnam Social Communities is interested in The employees worry about their work safetyand feel insecure about the future of the organization in which they are attached strongly They areexpecting an effective solution for the Vinashin problem

At this point of time, Vinashin has been in difficult situation because of theoverheating development and limited management capacity Many people think thatVinashin is a ship going to wreck However, the leaders of the Group said that: besides thedifficulty has been mentioned, the group has also had much contribution When Vinashinhad not been established, nobody thought that Vietnam could build ship And they alsothought that Vietnam could only build small ship about 3,000 tons which would not berecognized by international register However, Vietnam has built ship of 53,000 tons,floating warehouses of 150,000 tons, car carrier In term of technology, the levels of thegroup's workers have developed well Of course, with Vinashin's financial situation today,the next challenge will be more serious In the context of corporate restructuring, VFC willtake much more negative affects than positive ones Nevertheless, it should recognize thatthis is an opportunity for VFC and businesses within the Group to reform the entirestructure and operations more professional, safer and more effective (Source:

- To identify the relevant theoretical framework for VFC case

- To analyze the current motivation practice of VFC to find out its strengths,weaknesses and their root causes

- To make some recommendations to enhance motivation for staffs at VFC

1.3 Research questions

For the research objectives that mentioned above, the aim of this thesis is to answerfive questions:

- What theoretical framework can be applied for VFC case?

- What and how did VFC do to motivate the professional employees? What are thestrengths? What are the weaknesses?

- Why do people stay or go? What are the root causes of turnover and low satisfaction

in VFC professional employees?

- How to improve VFC’s motivation policies in a short term and long term?

1.4 Research methodology

1.4.1 Research process

The process of study of this thesis could be summed up in following chart:

Figure 1.2 Research process 1.4.2 Secondary data

The secondary data was collected by qualitative method mainly base on company’s

annually reports, regulations, brochures, and official documents of VFC, Internet and

newspapers, thesis, and specially the results of exit survey for the turnovers (Appendix 3)

Step 4:

Collect the data

Step 3:

Survey by questionnaires

Step 5:

Analyze and interpret the data

Step 6:

Write the research report

1.4.3 Primary data

* In-dept interview question guideline: (Appendix 1)

Table 1.1 In-depth interview question guideline

Id Target group Quantit

1 Board of Directors 2  To find conclusions concerning the

assessment of job satisfaction

 To find out which factors VFC professionalemployees motivated by

 To identify what main causes of the turnover/ dissatisfaction in VFC

 To find the relationship between the turnover rate/ the dissatisfaction and other indexes (such as: average age, sex, seniority, education level, labor group…)

 To understand what VFC has been doing to motivate the professional employees?

* Questionnaire for professional employees: (Appendix 2)

The research design for this study employed a descriptive survey method and onlinesurvey method The target population of this study included professional employees at VFC.The sample size included all 125 employees of the target population 75 of the employees

participated in the survey for a participation rate of 60 % Data was collected through use of

a written questionnaire hand-delivered and online-delivered by website http://qualtrics.com

to participants Questionnaires were filled out by participants and returned to an departmental mailbox Participants were asked to rank the importance of eleven factors thatmotivated them in doing their work: 1=most important 11=least important As a result ofthe pilot test, minor changes in word selection and instructions were made to the

intra-questionnaire Collected questionnaires were processed by SPSS 16.0 software This software

allows creating statistical reports quickly and accurately, combining two or morequalitative/quantitative variables

Table 1.2.Demographic Statistics of Respondents

Educational Level (years) Intermediate 5 6.7

(Source: Survey by author, Oct 2010)

The data for this study was collected within six months (from March to August 2010)using both in-depth-interview and survey VFC’s profiles was analyzed basing ondemographic characteristics of the respondents in terms of length of employment, gender,level of education, age of employees, age of the departments, size of dept

All of the respondents were employees working for VFC The demographic statistics

of respondents is shown in Table 1.2, Findings showed that of all respondents, more than 78percent (78.7%) were aged fewer than 30 followed by the age groups of 30 - 40 and over 50which accounted for 20% and 1.3% percent respectively About 76% percent were female.Staff at non-managerial position represented more than half (85.3%) of the total respondentsand managers for only 14.7% Most of the respondents were from function departments likecredit departments, investment department, accounting department, etc As the initial aim was

to survey mainly professional employees due to this kind of labor is by VFC’s majority Interms of education level, 82.7% percent of these employee respondents had completedcolleges and universities, while a total of 17.4% percent educated at intermediate (6.7%) level

VFC over one year, while only 8% percent has worked for the company for over 5 years Thiscould be the reason that VFC were short or it could be an indicator of high employee turnoverrate in this industry.

Evaluating of the author’s questionnaire, VFC’s staff said that: "The Personnel group has made the most practical thing which gives us this questionnaire promptly and appropriately The comment questionnaire help us to express our personal opinions freely, honestly and in the most objectively way The consultation meeting like that should be promoted because its work is very well, and is not waste time Whenever the company wants

to set up any policy, the company should also consult this form And hope the Personnel Group to read carefully and consider the each employee’s opinions."

However, interview result and quality of information fluctuate following “telling true, tellfrankly” from the turnover staffs Staffs who want to quit job usually double-talk or talk whatinterviewer want to hear in order to finish quickly the interview or avoid breaking good relationship

Hence, the author used information from many exit interviews previously years.Information from those meetings needed to be combined, compared, and checked with notonly information from applying interview of those staffs, but also their responses, commentsduring their working time For excellent staffs who quitted, the author always keeps contact tothem and receives a lot of useful helps in the questionnaire analysis

* From observation

The author has been working for VFC nearly 5 years Thus, I have witnessed itsdevelopment and change I have a chance to work with staff and understand how themotivation affects working’s quality and effectiveness I also knows joining and leaving ofstaff in the organization and is aware of impact of change in HR to the organization’soperation All observation helped the author to have a board overview on VFC and itssituation during last years It is also an advantage to the author Besides, friendship amongVFC and other credit organizations supported the author a lot in conducting the research interm of information

Finally, the research collected information about VFC in the 2006-2010 periods And recommendations will aim to the non-financial motivation solutions

1.6 Structure of the thesis

The thesis included five chapters:

Chapter 1: Introduction

Chapter 2: Theoretical background

Chapter 3: An overview of Vinashin Finance Company

Chapter 4: Findings

Chapter 5: Solutions for motivating Vinashin Finance Company’s employees

TABLE OF CONTENTS

CHAPTER 1 : INTRODUCTION 1

1.1 Rationales of the thesis 1

1.2 Research objectives 2

1.3 Research questions 3

1.4 Research methodology 3

1.4.1 Research process 3

1.4.2 Secondary data 3

1.4.3 Primary data 4

1.5 Research scope 6

1.6 Structure of the thesis 7

ACKOWLEDGEMENT 8

LIST OF TABLES 12

CHAPTER 3 LIST OF FIGURES 13

CHAPTER 4 13

CHAPTER 6 : THEORATICAL BACKGROUND ON MOTIVATION 17

2.1 The definition, substance and necessary of motivation 17

2.1.1 What is motivation? 17

2.1.2 The substance of work motivation 19

2.1.3 The necessary of improving the work motivation for employees 20

2.1.4 Relevant motivation surveys/ researches: 22

2.2 Theoretical motivation theories 23

2.2.1 Maslow’s Hierarchy of Needs 23

2.2.2 The Two-Factor Theory (Herzberg) 26

2.2.3 Equity Theory (John Stacey Adams) 30

2.2.4 Job Characteristics Model 31

2.2.5 Goal Setting Theory 33

2.3 Relevant theories and model for the case of VFC 33

CHAPTER 7 : OVERVIEW ABOUT VINASHIN FINANCE COMPANY 36

3.1 General introduction about VFC 36

3.1.1 The vision, development principle, and target for 2010 of VFC 36

3.1.2 VFC’s labor force characteristics 38

3.2 Products and services 42

3.3 VFC’s HRM strategy and practice 42

CHAPTER 8 : FINDINGS 45

4.1 Findings on VFC employee’s general motivation opinion 45

4.2 Findings VFC’s motivation problem in relation to Hygiene factors (work environment) .50

4.2.1 Pay and security 50

4.2.2 Clear goals 54

4.2.3 Quality of supervision 58

4.2.4 Working conditions 61

4.3 Findings VFC’s motivation problem in relation to Motivational factors (work content) .65

4.3.1 Recognition 65

4.3.2 Work itself 66

4.3.3 Advancement and growth 68

4.4 Findings the root cause of turnover and low satisfaction in VFC’s professional employee 70

CHAPTER 9 : SUGGESTIONS FOR VFC TO ENHANCE EMPLOYEE MOTIVATION 73

5.1 Being wary of Financial Incentives and Rewards 73

5.2 Clarifying expectations (ensure clear goals for each unit) 76

5.3 Hiring the Right People & Weed out Poor Managers 79

5.4 Improving working conditions at VFC 82

5.5 Redesigning work to enrich jobs 83

5.6 Using smart training as a development tool for employees 84

5.7 Other feasible solutions when the firm falls into the disadvantage context 86

CONCLUSION 88

Chapter 2

ACKOWLEDGEMENT

First of all, taking this opportunity, I would like to thank my family and friends for their great support in helping me complete this research

With sincere gratitude to my thesis supervisors, Dr.Dao Thi Thanh Lam for her valuable time and precious comments which contributed much to my work

Special thanks to Mr Hoang Gia Hiep and Ms Tran Thi Phuong Anh – the Deputy General Director and the Manager of the Planning & General Affairs Department of Vinashin Finance Company as well as the line managers from other function departments, for the enormous help they provided

There is too much to say in too few words but without each and every one of you, this could never have been accomplished I truly appreciate you all!

Bui Kim LienNov 2010

VFC - Vinashin Finance Company

VFL - Vinashin Leasing Company

CVS - CIMB VINASHIN Securities Limited Company

VFC.HCM - Branch of Vinashin Finance Company in Hồ Chí Minh City

VFC.HN - Branch of Vinashin Finance Company in Hà Nội City

VFC.HP - Branch of Vinashin Finance Company in Hải Phòng City

V.IBC - Vinashin Investment Consultancy & Financial Services CompanyVINASHIN - Vietnam Shipbuilding Industry Group

HRM - Human Resource Management

JCM - Job Characteristics Model

PA - Performance Appraisal

LIST OF TABLES

TABLE 1.1 IN-DEPTH INTERVIEW QUESTION GUIDELINE 4TABLE 1.2.DEMOGRAPHIC STATISTICS OF RESPONDENTS 4TABLE 2.3 APPLYING MASLOW'S NEEDS HIERARCHY - BUSINESS

MANAGEMENT IMPLICATIONS 25TABLE 3.4 KEY FIGURES OF VFC FROM 2006 TO 2009 37TABLE 4.5 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “PAY & SECURITY” 50TABLE 4.6 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “CLEAR GOALS FOR YOUR UNIT” 54TABLE 4.7 VFC STAFFS’ OPINION ABOUT THE FACTOR “COMPANY POLICIES AND ADMINISTRATION” 56TABLE 4.8 VFC EMPLOYEES’ OPINION ABOUT THE “ACHIEVEMENT” FACTOR .57TABLE 4.9 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “QUALITY OF

SUPERVISION” 58TABLE 4.10 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “ACHIEVEMENT” 60TABLE 4.11 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “WORKING

CONDITIONS” 61TABLE 4.12 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “FEEDBACK & PERFORMANCE APPRAISAL” 63TABLE 4.13 VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “INTERPERSONAL RELATIONS” 64TABLE 4.14 VFC EMPLOYEES’ OPINION ABOUT THE “RECOGNITION” FACTOR 66TABLE 4.15 VFC EMPLOYEES’ OPINION ABOUT THE “WORK ITSELF” FACTOR 67TABLE 4.16 VFC EMPLOYEES’ OPINION ABOUT THE “ADVANCEMENT &

GROWTH” FACTOR 68

CHAPTER 3 LIST OF FIGURES

FIGURE 1.1 TURNOVER RATE IN SOME FINANCIAL ORGANIZATIONS 1

FIGURE 1.2 RESEARCH PROCESS 3

FIGURE 2.3 PROCESS OF MOTIVATION 18

FIGURE 2.4 DIFFERENCE BETWEEN MOTIVATION, SATISFACTION, INSPIRATION AND MANIPULATION 18

FIGURE 2.5 INDIVIDUAL AND ORGANIZATION NEEDS 21

FIGURE 2.6 CAUSES DISTRIBUTION OF THE BRAIN DRAIN IN ACB – A VIETNAM COMMERCIAL BANK 22

FIGURE 2.7 MASLOW’S HIERARCHY OF NEEDS 23

FIGURE 2.8 THE TWO-FACTOR THEORY OF MOTIVATION 27

FIGURE 2.9 HACKMAN AND OLDHAM’S JOB CHARACTERISTICS MODEL 31

FIGURE 2.10 THE EXTENDED MODEL OF HERZBERG’S TWO-FACTOR MODEL 34

FIGURE 3.11 MODEL OF THE EXPECTED VINASHIN FINANCE CORPORATION 37

FIGURE 3.12 DISTRIBUTION OF VFC EMPLOYEES BY WORKING DURATION 39

FIGURE 3.13 DISTRIBUTION OF THE EMPLOYEES BY GENDER 39

FIGURE 3.14 DISTRIBUTION OF THE RESPONDENTS ACCORDING TO LEVEL OF EDUCATION 40

FIGURE 3.15 AGE PROFILE OF THE EMPLOYEES 41

FIGURE 3.16 LABOR WORKFORCE’S STRUCTURE CATEGORIZED BY POSITION 41 FIGURE 3.17 CHART OF CHANGES IN VFC'S PERSONNEL 2006 – 2010 44

FIGURE 4.18 THE RANKING OF MOST IMPORTANT MOTIVATION FACTORS OF EMPLOYEES AT VFC 45

FIGURE 4.19 RELATION BETWEEN SOME MOTIVATED FACTORS AND THE LABOR'S SENIORITY GROUP AT VINASHIN FINANCE COMPANY 46

FIGURE 4.20 RELATION BETWEEN SOME MOTIVATED FACTORS AND LABOR GROUP AT VFC 47

FIGURE 4.21 VFC’S AVERAGE INCOME GROWTH COMPARE WITH TURNOVER, INFLATION RATE GROWTH 53

FIGURE 5.22 JOB ENRICHMENT AND JOB PERFORMANCE 84

CHAPTER 4

EXECUTIVE SUMMARY

VFC is one of state-owned companies that have started its operation since 2000 Itsmission is to become the backbone of the Vinashin Business Group’s financial institutions, tomeet the demand for capital of Group's projects the most Currently, VFC is standing at achallenge of high rate of turnover staff effecting the organization’s operation at some certain.VFC also not yet invested any effort on studying what factors causes this high turnover rate.Saying in other word, VFC has not yet looked at the actual situation on motivation to find outwhat and how VFC had done to motivate the professional employees, its strengths andweaknesses; and what the root causes of turnover and low satisfaction in VFC professionalemployees are Therefore, how to enhance employee motivation in VFC is essentialrequirement As a senior HR staff at VFC, especially at the HR Department of theorganization, the author is eager to do the research on “Motivating professional employees atVinashin Finance Company”

Such ideal has been matured for a quite a while for many years when the authorchose HRM as a career to pursuit for her career development Also coming from root causes

as mentioned above, the author has decided to bring her ideal on a research in which theauthor would like to explore what VFC’s staff perspectives on working motivation and to findout what theoretical framework can be applied for VFC case, what and how VFC had done tomotivate the professional employees, what the strengths and the weaknesses are, what the rootcauses of turnover and low satisfaction in VFC professional employees are, and how toimprove VFC’s motivation policies in a short term and long term The author has applied twofactors theory of Frederick Herzberg to analyze the problems as the guiding theory, but onlyanalyzing some important factors which is fit for VFC survey’s results Goal setting theorywas applied for analyzing extended motivation factors at VFC (“Clear goal” factor) And JobCharacteristic Model (JCM) also was applied for complementing the “work itself” factor ofHerzberg

Primary data for this study was collected within six months (from March to August2010) and used both in-depth-interview and survey (hand-delivered and online-delivered by

website http://qualtrics.com) 75 of the employees participated (over 125 employees of thetarget population) in the survey for a participation rate of 60 % Collected questionnaires wereprocessed by SPSS 16.0 software to print out the necessary reports The top urgent problems

of VFC current motivation practice were analyzed carefully to find out its strengths,

weaknesses and their root causes These VFC problems are related to these below Hygieneand Motivation factors:

• Pay and security

• Clear goal

• Quality of supervision

• Working conditions

• Recognition

• Nature of the work

• Advancement and Growth

The research also carried out with an aim to serve VFC and VFC’s leaders in findingappropriate recommendations to enhancing their employees’ motivation at work as follow:

• Being wary of Financial Incentives and Rewards

• Clarifying Expectations

• Hiring the Right People & Weed out Poor Managers

• Improving working conditions at VFC

• Designing work to enrich jobs

• Using smart training as a development tool for employees

• Other feasible solutions when the firm falls into the disadvantage context

This is a practical research and it is highly supported by VFC’s leaders It is a hopethat its results would be applied into practice as long as the research was completed And theimprovement requires the involvement of changes in policy and procedures in implementation

of each factor Moreover, the cooperation of the Management and Staff level employees arealso crucial to ensure the success of the motivation enhancement

Hygiene factor

Motivation factor

CHAPTER 5

CHAPTER 6 : THEORATICAL BACKGROUND ON MOTIVATION2.1 The definition, substance and necessary of motivation

2.1.1 What is motivation?

It is a general tendency to believe that motivation is a personal trait Some people have

it and the others don’t In practice, some are labeled to be lazy because they do not display anoutward sign of motivation However, individuals differ in their basic motivational drives Italso depends upon their areas of interest The concept of motivation is situational and its levelvaries between different individuals and at different times If you understand what motivatespeople, you have at your command the most powerful tool for dealing with them

Defining employee motivation

Firstly, “Motivation is the process of stimulation an individual to take action that willaccomplish a desired goal” [5, pp236] The word motivation comes from the Latin word

“movere”, which means to move to urge Generally, employee motivation is the level ofenergy, commitment, and creativity that a company’s workers apply to their jobs Whilst,motivation has been defined as: the psychological process that gives behavior purpose anddirection; a predispotion to behave in a purposive manner to achieve specific, unmet needs; aninternal drive to satisfy an unsatisfied need; and the will to achieve While there is anothersimple definition of motivation is the ability to change behavior

In this research, the author will use a mix definition of employee motivation (This

definition was a combination of the above definitions): “Employee motivation is a process a stimulate employee by financial and non-financial incentives so that the employee may have a high commitment to the organization.”

Type of work motivation

We can divide motivation at work into internal and external motivation:

* Internal Motivation is related to the work, where there is a close identity between the task

itself and the human needs

* External Motivation is independent of the task; it is related to the working environment

This research will cover all above types of motivation

Process of motivation

In the initiation a person starts feeling deficiently There is an arousal of need so

urgent, that the bearer has to venture in search to satisfy it This leads to creation of tension,

which urges the person to forget everything else and cater to the aroused need first Thistension also creates drives and attitudes regarding the type of satisfaction that is desired Thisleads a person to venture into the search of information This ultimately leads to evaluation ofalternatives where the best alternative is chosen After choosing the alternative, an action istaken Because of the performance of the activity satisfaction is achieved which than relievesthe tension in the individual.

Figure 2.3 Process of motivation

(Source: http://www.laynetworks.com/Motivation.html)

Difference between motivation, satisfaction, inspiration and manipulation

Figure 2.4 Difference between motivation, satisfaction, inspiration and manipulation

(Source: http://www.laynetworks.com/Motivation.html)

Motivation refers to the drive and efforts to satisfy a want or goal, whereas satisfactionrefers to the contentment experienced when a want is satisfied In contrast, inspiration is

bringing about a change in the thinking pattern On the other hand Manipulation is getting thethings done from others in a predetermined manner.

Hence, manipulation or external stimulus as well as inspiration or internal stimulusacts as carriers of either demotivation or motivation which in turn either results intodissatisfaction or satisfaction depending upon

Relationships between work motivation and job satisfaction

People hold different attitudes about many aspects of their work and life From themanagement perspective, job satisfaction is one of the most meaningful employee attitudes Workmotivation deals with the understanding of what inspire and sustain employee’s drives to work.The close relationship between work motivation and job satisfaction implied that studying theindicators of job satisfaction will lead to the understanding of employees’ needs and the factorsinfluencing their behavior In a firm, Motivated and satisfied employees are a vital prerequisite tothe success of the organization, which is why these concepts should enjoy considerable andongoing attention on all levels of the business Accordingly, job satisfaction is the positiveconsequence of work motivation So, the research will focus on analyzing work motivation

2.1.2 The substance of work motivation

The conceptions of work motivation above show the substance of it as following:

 Work motivation is displayed through specific tasks that every person is responsible forand in their attitude to the organization This means there is no general work motivationfor all of work Every laborer, who is in charge of different tasks, may have differentmotivation to work harder Work motivation is attached to a job, an organization and aspecific work environment

 Work motivation does not entirely depend on the personal character; it can changefrequently following the objective elements at work At a point of time, a laborer mayhave very high motivation to work, but at another point of time, it is unlikely that workmotivation remains in them

 Work motivation is spontaneous, depending on workers themselves; the workers areoften eager to work actively as they don’t feel any pressure or stress at work Whenhaving chance to work actively, they can achieve the best productivity

 Work motivation plays an important role in increasing labor productivity undercondition other input kept constant As an inside invisible force, work motivationpromotes man to work more enthusiastically Nevertheless, work motivation is only the

origin of productivity increase, not a condition of increasing productivity, because thisdepends on qualifications and skills of workers, the technological scientific level of theproduction line

2.1.3 The necessary of improving the work motivation for employees

For individual staff

People always have both physical and mental needs When employees feel their needsare satisfied, they will have good mentality which boosts employees to work moreenthusiastically With individual workers, who have no work motivation, hardly can workingactivity achieves its goals because then employees only work to complete the assigned workwithout creativeness or striving hard at work; they just consider their work as an obligationwhich has to be complied with labor contracts Therefore, managers need to create motivation

to impulse creativeness and ability performance of employees

The employees only work hard when their demands are relatively satisfied This isreflected in the benefits they are entitled When employees feel that the benefits they receiveare not commensurate with what they contributed, the unsatisfied demands will cause themfeeling depressed and being distracted from work Benefits are means to satisfy demands, sothe benefits which employees can achieve should be commensurate with what they offer, andthen they can provide employees with motivation for work

Work motivation also helps employees with self-improvement When there is

motivation in working, workers will have greater efforts to study, sum up the experiences through their work, improve their knowledge and qualifications for self-improvement

For the firm

Actually, we are conducting the industrialization and modernization of our country.The experience of Japan and the other "Asian dragons" shows that we have to draw our ownpath in accordance with the political, economic, social and cultural situation of Vietnam This

is an extremely difficult task because they must catch up with advanced scientific andtechnological level of the world in a short period of time providing that our poorinfrastructure, backwardness and lack of investment capital One of the band-aid solutions isincreasing productivity growth which can result in higher profits on the basis of currentequipments and available funds, therefore achieving faster speed of capital accumulation Forabove reasons, stimulation of labor is an issue currently concerned by many leaders andmanagers

On the other hand, when the problems of investment capital and equipments have beenresolved, increasing productivity and stimulating working and creativeness are the urgentmatters which need to consider and solve appropriately in order that businesses and researchinstitutions in particular and the economy in general can grow fast and effectively Stimulatinglabor is to create the impulse inside of humans to labor, that impulse is created by an objectiveimpact on sense When stimulating any working activities, people must pay attention topsychological factors such as purposes of work, demands, and interests, motivation ofindividuals and series of individual psychology characteristics as well as group features that cantake form of effective stimulus Labor can be stimulated by matter, by communication or bysatisfying other needs of human nature affecting their behavior, namely it can orient and adjustpersonal behavior Providing stimulation to work has following effects:

• Making the connection between organization and laborers, help organization keep

good employees, decrease dismissing rates (Task Commitment)

• Increasing level of satisfaction, trust, engagement and commitment of the staff in the

business (Initiative and optimism; Achievement Drive)

• Decreasing the period of time and cost of recruiting and training new employees

(Save costs and time)

• Increasing labor productivity and labor using efficiency (Above average performance)

• Being the platform to increase sales and improve profitability (Creativity)

Why motivations need to be mentioned in a firm?

Motivating workers involves inspiring them to contribute to the goals of theorganization This can be illustrated by this model:

Physical well-beingJob satisfactionPersonal development

AchievementRespect from work group

If needs are met

Contented, productive workforce

High productivityLow absenteeismCo-operationIndustrial harmonyConstructive disagreementsLow labor turnover

If needs are met

Contented, efficient workforce

Figure 2.5 Individual and Organization Needs

2.1.4 Relevant motivation surveys/ researches:

According to surveys conducted by Nguyen Van Thuy authors published in bankingtechnology newspaper that indicated causes brain drain of the ACB, the authors investigatedover 144 staffs in ACB showed that the causes of the brain drain in Vietnam commercialbanks today are:

♣ Income and wage policy: 76 persons out of 144, accounting for 52.8% who believethat the wage policy is not commensurate with the level of work

♣ Career growth: 84 persons out of 144, accounting for 58.3% who believe that noopportunities for advancement in the old bank

♣ Not able to appreciate: 46 persons out of 144, accounting for 31.9% who think thattheir contributions are not recognized and their abilities are not evaluated correctly will beeasily persuaded by job offered from other banks

♣ Unprofessional work environment: 44 persons out of 144, accounting for 30.6% whothink that the Vietnam banks are still considered importantly emotional relationship They have asectarian spirit; no trust each other and unclear personnel policy

Figure 2.6 Causes distribution of the brain drain in ACB – A Vietnam commercial bank

(Source:

http://blog.yume.vn/xem-blog/nguyen-nhan-chay-mau-chat-xam-o-cac-ngan-hang-viet-nam-hien-nay.anhoang1212.35CE3263.html)

All motivation researches show that the current tools to keep people’s businessconcentrated to the main issues:

(1) Compensation: salary, bonus, stock

(2) Welfare regime: medical insurance, Social insurance, personal loans, financial planning,policy for family, relatives, other health care activities, mental

(3) Occupation: enrichment of work, challenging, foreign business, job rotation, project team,training

(4) Other tools: professional development plan, career management system, retaining plan,staff’s capacity frame management, leadership development

2.2 Theoretical motivation theories

There were a great variety of theories of human motivation But, the research appliedthree theories of employee motivation: The two factor theory of Herzberg; the Maslowhierarchy of need and the Equity theory of J.Stacy

It is difficult to understand what motivates people to do something We can not find any

simple formula as "please treat them in a way like this and you will make them work hard”.

These caused many researchers headaches for over fifty years We need to considermore carefully some most popular theory of human behavior at work:

2.2.1 Maslow’s Hierarchy of Needs

Figure 2.7 Maslow’s Hierarchy of needs

Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs inhis 1943 paper "A Theory of Human Motivation"1 and his subsequent book, Motivation and Personality This hierarchy is often portrayed in the shape of a pyramid and suggests that

people are motivated to fulfill basic needs before moving on to other needs

Maslow believed that these needs are similar to instincts and play a major role in

motivating behavior Physiological, security, social, and esteem needs are deficiency needs

(also known as D-needs), meaning that these needs arise due to deprivation Satisfying theselower-level needs is important in order to avoid unpleasant feelings or consequences

Maslow termed the highest-level of the pyramid as growth needs (also known as

being needs or B-needs) Growth needs do not stem from a lack of something, but rather from

a desire to grow as a person

There are five different levels in Maslow’s hierarchy of needs:

Self-Actualization

Self-actualization is the summit of Maslow's motivation theory It is about the quest ofreaching one's full potential as a person Unlike lower level needs, this need is never fullysatisfied; as one grows psychologically there are always new opportunities to continue to grow

Self-actualized people tend to have motivators such as:

Some examples of esteem needs are:

• Recognition (external motivator)

• Attention (external motivator)

• Social Status (external motivator)

• Accomplishment (internal motivator)

• Self-respect (internal motivator)

Maslow later improved his model to add a layer in between self-actualizationand esteem needs: the need for aesthetics and knowledge

Social/Belonging Needs

Once a person has met the lower level physiological and safety needs, higherlevel motivators awaken The first level of higher level needs is social needs Social needs arethose related to interaction with others and may include:

• Friendship

• Belonging to a group

• Giving and receiving love

Security/Safety Needs

Once physiological needs are met, one's attention turns to safety and security in order

to be free from the threat of physical and emotional harm Such needs might be fulfilled by:

• Living in a safe area

If Maslow's theory is true, there are some very important leadership implications

to enhance workplace motivation:

Table 2.3 Applying Maslow's Needs Hierarchy - Business Management Implications

Self-improvement

(Self actualization)

 Provide opportunities for professional development

 Provide training and development

 Encouraging creativity, success

 Encourage participation in reform programs

Esteem (be respected)  Praise success

 Disseminate widely good results of the individual

 Provide feedback timely

 Promote and create greater responsibility

Love/Belong

 Working in teams, create exchange between components

 Sponsored recreational programs, leisure activities

 Democracy and encourage people to contribute ideas

Safety  Good working conditions, job stability

 Fair treatment

Physiological  Good and fair compensation

 Different material well being Remember, everyone is not motivated by same needs At various points in their livesand careers, various employees will be motivated by completely different needs Itis

imperative that you recognize each employee's needs currently being pursued In order tomotivate their employees, leadership must be understand the current level of needs at whichthe employee finds themselves, and leverage needs for workplace motivation

Maslow's Theory - Limitations and Criticism

Though Maslow's hierarchy makes sense intuitively, little evidence supports its stricthierarchy Actually, recent research challenges the order that the needs are imposed byMaslow's pyramid Five levels of need are not always present; Ordering or importance ofneeds is not always the same and Cultural differences are some weaknesses of Maslow’stheory As an example, in some cultures, social needs are placed more fundamentally than anyothers Further, Maslow's hierarchy fails to explain the "starving artist" scenario, in which theaesthetic neglects their physical needs to pursuit of aesthetic or spiritual goals.Additionally, little evidence suggests that people satisfy exclusively one motivating need at atime, other than situations where needs conflict

While scientific support fails to reinforce Maslow's hierarchy, his theory isvery popular, being the introductory motivation theory for many students and managers,worldwide To handle a number of the issues of present in the Needs Hierarchy, ClaytonAlderfer devised the ERG theory, a consistent needs-based model that aligns more accuratelywith scientific research

2.2.2 The Two-Factor Theory (Herzberg)

Frederick Herzberg and his associates began their research into motivation during the1950′s, examining the models and assumptions of Maslow and others The result of this workwas the formulation of what Herzberg termed the Motivation-Hygiene Theory (M-H)

Figure 2.8 The two-factor theory of motivation

The two-factor theory suggests that job satisfaction has two dimensions A managerwho tries to motivate an employee using only hygiene factors, such as pay and good workingconditions, will likely not succeed To motivate employees and produce a high level ofsatisfaction, managers must also offer factors such as responsibility and the opportunity foradvancement (motivation factor)

The basic hypotheses of this theory are that:

1 There are two types of motivators, one type which results in satisfaction with the job, andthe other which merely prevents dissatisfaction The two types are quite separate and distinctfrom one another Herzberg called the factors which result in job satisfaction motivators andthose that simply prevented dissatisfaction hygienes

2 The factors that lead to job satisfaction (the motivators) are: (1)

• Achievement: Achievement also included its opposite, failure and the absence

of achievement This category included the following: successful completion of a job oraspect of it, having a good idea or solutions to problems, made money for the company,vindication, and seeing or not seeing the result of one’s work

• Recognition: The major criterion for this category was some act of recognition

to the employee The source could be almost anyone: supervisor, some other individual inmanagement, and management as an impersonal force, a client, a peer, a professionalcolleague, or the general public The evidences of recognition are: work praise with orwithout reward given; work noticed-no praise; work not noticed; ideas accepted or notaccepted by the company; Inadequate work blamed or criticized with or without punishmentgiven; Successful work blamed or criticized with or without punishment given; credit forwork taken by supervisor or other

1 Frederick Herberg, 2008, from p.44 to p.49

• Work itself: This category mentioned about feeling of the employees about the

job Thus job can be routine or carried, creative or stultifying, overly easy or overly difficult

• Responsibility: This category included those sequences of events in which the

employee derived or lost satisfaction from being given responsibility for his own work or forthe work of others or being given new responsibility In case, however, there was wide gapbetween a person’s authority and the authority he needed to carry out his job responsibilities,the factor identified was “company policy and administration”

• Advancement & growth: Advancement was an actual change in the status or

position of the person in the company In situation in which an individual transferred from onpart of the company to another without any change in status but increased opportunities forresponsible work, the change was consider an increased responsibility, but not formally anadvancement

3 The factors which may prevent dissatisfaction (the hygienes) are: 2

• Company policy and administration: There are two kinds of overall company

policy and administration One involved the adequacy or inadequacy of company ororganization management For example, there can exist a situation in which a man has line ofcommunication crossing in such as a way that he does not really know for whom he isworking, in which he has adequate authority for satisfactory completion of his task, or inwhich a company policy is not carried out because of inadequate organization of the work

The second kind of overall company policy and administration is not involvedinadequate but the harmfulness or beneficial effects of the company’s policies There areprimarily personal policies

The agreement or disagreement of the employee with the company policy, the right orlow company status can affect the employee attitude of work, too

• Working conditions: This mention about the physical conditions of work, the

amount of work, or the facilities available for doing the work This also include: adequacy orinadequacy of ventilation, lighting, tools, space, and other such environmental characteristics

• Supervision-technical: This category mentioned about competence or

incompetence, fairness or unfairness of the supervisors; the willingness or unwillingness todelegate responsibility, to teach

2 Frederick Herberg, 2008, from p.44 to p.49

• Interpersonal relations: There are three major categories: Interpersonal

superior; Interpersonal-subordinate; Interpersonal-peers Interpersonal superior include: friendly or unfriendly relation with supervisor; learned a great deal fromsupervisor; supervisor support or not support employee with management; supervisor honest

relation-or dishonest; willing relation-or unwilling to listen to suggestions Interpersonal relations-subrelation-ordinateinclude: Good or poor working relationship, good or poor personal relationship withsubordinates Interpersonal relation-peers include: liked or did not like people working with,co-operation or lack of co-operation on the part of his co-worker, being part of cohesivegroup, being isolated from group

• Salary: This includes the amount of money received unexpected wage or not

received expected increase, received wage increase less or later than expected, wage comparefavorable or unfavorable with others doing the same or similar job

• Status: This category mentioned about some sign or appurtenance of status as

being a factor in his feelings about the job

• Job security: This includes considerations as tenure and company stability or

instability, which reflected in some objective way on a person’s job security

Hygienes, if applied effectively, can at best prevent dissatisfaction: if applied poorly,they can result in negative feelings about the job

Motivators are those things that allow for psychological growth and development onthe job They are closely related to the concept of self-actualization, involving a challenge, anopportunity to extend oneself to the fullest, to taste the pleasure of accomplishment, and to berecognized as having done something worthwhile

Hygienes are simply factors that describe the conditions of work rather than the workitself Herzberg’s point is that if you want to motivate people, you have to be concerned withthe job itself and not simply with the surroundings

In a medical sense, growth, healing and development occur as natural internalprocesses They are the result of proper diet, exercise, sleep etc Hygienic procedures simplyprevent disease from occurring They do not promote growth per se Herzberg says that weshould focus our attention on the individuals in jobs, not on the things that we surround themwith He maintains that we tend to think that growth and development will occur if weprovide good working conditions, status, security and administration, whereas in fact whatstimulates growth (and motivation to grow and develop) are opportunities for achievement,recognition, responsibility and advancement

The discoveries of Herzberg are very meaningful to managers They draw ourattention to the fact that content of a job has great influence on human behavior at theworkplace and the factors themselves such as wages and working conditions may be notnecessary motivation to work.

However, there are also criticisms of Herzberg’s views Part of these criticisms related

to the Herzberg say that by creating encouraging factors in the work, people will be satisfiedwith the job The question is: pleasance with the work can bring high performance in work?

2.2.3 Equity Theory (John Stacey Adams)

The Adams Equity Theory is named for John Stacey Adams, a workplace andbehavioral psychologist, who developed this job motivation theory in 1963 In business, theEquity Theory of employee motivation describes the relationship between how fairly anemployee perceives he is treated and how hard he is motivated to work Peter Drucker, anauthor who specialized in economics, first proposed the link between Equity Theory andemployee motivation

The basic idea behind the Equity Theory is that workers, in an attempt to balance whatthey put in to their jobs and what they get from them, will unconsciously assign values to each

of his various contributions

In addition to their time, workers contribute their experience, their qualifications, andtheir capability in addition to their personal strengths such as acumen and ambition Money,

of course, is the primary motivating outcome for an employee, but it is not the only, and insome cases not evens the most important factor Power and status are also prime motivators,

as are flexibility, perquisites and variety

According to the Equity Theory, the most highly motivated employee is the one whoperceives his rewards are equal to his contributions If he feels that he is working and beingrewarded at about the same rate as his peers, then he will judge that he is being treated fairly

This doesn’t mean that every manager should treat every employee identically,because every worker does not measure his contributions in the same way For example,flexible working hours might motivate a working mother even more than a pay raise.Conversely, though an across-the-board wage increase may delight most employees, thehighest producers may become less motivated if they perceive that they are not being

Outcomes (self)

Inputs (other)

rewarded for their ambition Research on Equity Theory and employee motivation has shownthat, in general, over-rewarded employees will produce more and of a higher quality than willunder-rewarded, less motivated employees.

The equity theory is not without its problems There are still some key issues whichare unclear, such as:

• How do employees select who is included in the other referent category?

• How do they define inputs and outputs?

• When, and how, do factors change over time?

2.2.4 Job Characteristics Model

The job characteristics model is the most influential attempts to design jobs toincrease their motivational properties Proposed in the 1970s by Hackman and Oldham, themodel describes five core job dimensions, leading to three critical psychological states, whichlead to work-related outcomes Let’s look at them in detail:

Figure 2.9 Hackman and Oldham’s Job Characteristics Model

(Source: http://www.thehrpractice.in/prerana/v4i3/v4i3.html)

Critical Psychological States

The five core job dimensions stated below result in three different psychological states

1 Experienced meaningfulness of the work: The extent to which people believe that

their job is meaningful, and that their work is valued and appreciated

2 Experienced responsibility for the outcomes of work: The extent to which people

feel accountable for the results of their work, and for the outcomes they have produced

3 Knowledge of the actual results of the work activity: The extent to which people

know how well they are doing

Core Job Dimensions

1 Skill variety: This refers to the range of skills and

activities necessary to complete the job The more a person is required to use a wide variety ofskills, the more satisfying the job is likely to be However, far too many might beoverwhelming, too few, may prove boring Jobs that require employees to make decisions andsolve problems will usually be more satisfying than jobs with tasks that are routine andpredictable

2 Task identity: This dimension measures the degree to

which the job requires completion of a whole and identifiable piece of work Employees whoare involved in an activity from start to finish are usually more satisfied For example, writing

an entire report would be more satisfying than just formatting it

3 Task significance: This looks at the impact and

influence of a job Jobs are more satisfying if people believe that they make a difference, andare adding real value to colleagues, the organization, or the larger community

4 Autonomy: This describes the amount of individual

choice and discretion involved in a job More autonomy leads to more satisfaction Forinstance, a job is likely to be more satisfying if people are involved in making decisions,instead of simply being told what to do

5 Feedback: This dimension measures the amount of

information an employee receives about his or her performance, and the extent to which he orshe can see the impact of the work The more people are told about their performance, themore interested they will be in doing a good job So, sharing production figures, customersatisfaction scores etc can increase the feedback levels

The model says that internal rewards are obtained by individual when he/she learns(knowledge of results) that he/she personally (experienced responsibility) has performed well

on a task that he/she cares about (experienced meaningfulness).The more these psychologicalstates are present the greater will be an employee’s motivation, performance, satisfaction Themodel is depicted graphically below

Apart from job characteristics there are other factors also that influence jobperformance But we can surely make a start by designing the job effectively to motivate ourteam members Just remember one important point though When we are redesigning a job besure to truly enrich the job and, not just give more work for people to do So go ahead and tryour hand at some designing and design some jobs that people will love to do and will do well.

2.2.5 Goal Setting Theory

Goal-setting theory was first proposed by Edwin Locke in 1968 (Beck, 1983).Spector (2003) described this perspective on motivation as the assumption that people’sbehavior is motivated by their internal intentions, objectives or goals; in other words, by whatpeople consciously want to achieve

According to Locke and Henne (1986) goals affect behavior in four ways:

- They direct attention and action to those behaviors which a person believeswill achieve a particular goal;

- They mobilize effort towards reaching the goal;

- They increase the person’s persistence, which results in more time spent on thebehaviors necessary to attain the desired goal;

- They motivate the person’s search for effective strategies for goal attainment There are several prerequisites for the goal-directed behavior to effectively improvejob performance (Locke & Henne, 1986):

- A thorough commitment to the specific goal;

- Regular feedback on the person’s performance towards attaining the goal;

- The more challenging the goal is perceived to be, the better the person’sperformance is likely to be;

- Specific goals are more effective than vague goals, e.g “do your best”;

- Self-set goals are preferred over organizationally set goals If this is notentirely possible, a person needs to at least have input into his own goals

2.3 Relevant theories and model for the case of VFC

There were a great variety of theories of human motivation (Hofstede 1980),particularly motivation theories developed in the United States, such as those of DavidMcClelland, Abraham Maslow, Frederick Herzberg, and Victor Vroom McClelland’sachievement theory shows that people perform because of achievement motive and power

motive Maslow, on the other hand, postulates a hierarchy of human needs: most basic arephysiological needs, followed by security, social needs, esteem needs and, finally, a need for

“self-actualization.” Herzberg’s two-factor theory of motivation distinguishes between hygienicfactors and motivators; the hygienic factors have only the potential to motivate negatively –

they are necessary but not sufficient conditions But, Herzberg’s two-factor theory was

considered as the guiding theory for this research because it covered all above theories.

Herzberg indicated all factors from basic needs to more high-level needs; it also covered allproblems of employee motivation which are relevant to working environment, work content andthe organization

But the author’s analysis of VFC employee motivation only focuses on some

important factors which is fit for the survey’s results at VFC and bases on the extended model of Herzberg’s two-factor model at below figure 2.8 In this model, Hygiene factors are

considered as the necessary condition and Motivation factors are the sufficient condition tocreate the job satisfaction and motivation

Figure 2.10 The extended model of Herzberg’s two-factor model

The hygiene and maintenance factors ("dissatisfies") included clear goal, quality ofsupervision, working conditions, pay & job security, while the motivators or growth factors("satisfiers") included recognition, nature of the work, personal growth and advancement Anything wrong with the hygiene factors is a source of dissatisfaction for the individual and

cannot be motivators The “clear goal” factor was added into Hygiene factors because it

The work itself

Advancement & growth

belongs to the organization and job context It describes the feelings of employees about the

adequacy or inadequacy of company strategy and management

Besides, Goal setting theory was applied for analyzing extended motivation factors at

VFC (Clear goal factor) And Job Characteristic Model (JCM) also was applied for complementing the “work itself” factor of Herzberg Another factor as interpersonal

relationships, company policies & administration, sense of achievement, responsibility, status,

personal life, etc which is listed in Herzberg’s two-factor theory will be listed briefly when

analyzing the key factors as mentioned as above However, due to the limitation of theresearch’ objectives and scope, the author just wants to focus on those factors relevant toVFC’s context The other factors should be considered in detail in the other research

Chapter 7 : OVERVIEW ABOUT VINASHIN FINANCE COMPANY3.1 General introduction about VFC

Vietnam Shipbuilding Finance Company (VFC) is a state-owned finance company andmember of Vinashin that was established under Decision No.3456/1998/QD-BGTVT, datedDecember 19, 1998, by the Ministry of Transportation

- Full name : Vietnam Shipbuilding Finance Company

- International transaction name: Vietnam Shipbuilding Finance Company (VFC)

- VFC’s logo : based on VINASHIN Group’s logo with two basic colors: Violet blueand bright red Blue symbolizes the sea and hope; red color symbolizes the color ofsteel and determination Logo’s image shows generally the shortening vessel Thewords VINASHIN: Affirming a strong foundation for the sustainable development ofVietnam ships reaching the ocean

3.1.1 The vision, development principle, and target for 2010 of VFC

Strategic vision of VFC

"Building Vinashin Finance Corporation becomes the leading financial group inVietnam By 2020, Vinashin Finance Corporation is one of the most important financialgroups, is the backbone of the Vinashin Business Group’s financial institutions, to meet thedemand for capital of Group's projects the most "

Figure 3.11 Model of the expected Vinashin Finance Corporation Development Principles

“Safety - Efficiency - Healthy - Controlling risks”

Presently, following the policy of developing Vietnam Shipbuilding IndustryCorporation into a powerful business Group, VFC has been building and developing itsorganization according to the model of a VINASHIN Finance Corporation with a network ofbranches and typical subsidiaries In terms of chartered capital, VFC is one of the three largestfinancial companies in Vietnam

Key figures of VFC from 2006 to 2009

Table 3.4 Key Figures of VFC from 2006 to 2009

(Unit: million VND)

Profit before tax 6,843 196,284 118,587 117,267 Total Turnover 213,136 911,560 1,053,698 1,132,768 Turnover growth rate 1.83 4.28 1.16 1.08 Charter capital 640,000 1,023,000 1,023,000 2,523,000 Average Income 7.13 6.70 8.55 8.98 Total Revenue 213,136 911,556 1,053,698 1,143,000 Total assets by the end

of the year 3,645,740 7,211,498 5,970,106 8,854,000

(Source: Personnel Management Group - Planning & General Affair Dept , September 2010)

VIETNAM SHIPBUILDING FINANCE COMPANY

VINASHIN

LEASING

COMPANY

VINASHIN SECURITY COMPANY

VINASHIN FUND MANAGEMENT

VINASHIN

ASSETS

MANAGEMENT

VINASHIN BANK

VINASHIN INSURANCE COMPANY

VINASHIN SUBSIDIARIES AND CREDIT TEAM

VFC’s major targets for 2010 are:

1) Chartered capital iincrease by VND 3000 billion

2) Raise the credit balance in tandem with charter capital, also improve the qualityand efficiency of credit-giving, investment, and service operations to ensure thesafety and obeying the regulars

3) Promote the mobilization of capital from money market through Vinashin Group 4) Strive to elevate trustworthiness, maintain the proper capital balance for the needs

of the Vinashin Group, the market, and the liquidity requirements of VFC

5) Establish a system of well-developed subsidiaries and affiliates Continue to opennew subsidiaries and affiliates with a view to find a giant financial corporation inthe future

6) Develop and perfect new products like shipbuilding credit, forfeiting, derivativeproducts, exchange-rate insurance, and bond-issuance consultation services At thesame time, improve the quality of existing services, satisfy our current customers,attract new ones, toward undertaking financial management services forcorporations

7) Promote investment and development in IT and in modern facilities in order tobest serve business and management operations

8) Foster internal human resources, attract new highly-qualified staff, provide staffwith frequent professional training, improve the management skills for top CEOs,thereby promote an increasingly strong personnel

9) Successfully fulfill major financial targets in 2010 and outdo the objectives set out

by the Vinashin Group

3.1.2 VFC’s labor force characteristics

a) Working duration of VFC employees

Figure 3.2 shows that in VFC, the majority of employees (95 or 44.6%) had been inemployment for 2 to 5 years This was followed by workers who had an experience of oneyear and below Those who had worked were 67 or 31.5% In total only 51 or 23.9% had beenstayed with the organization over 5 years

The distribution of VFC employee by working duration has rather equal sizes between labor’s groups It make VFC be able to ensure the generation transition, and reduce the generation’s gap In the author’s opinion, this labor characteristic is a VFC’s advantage in

improving its management tools consistently to motivate their employees

Figure 3.12 Distribution of VFC employees by working duration

(Source: Personnel Management Group - Planning & General Affair Dept , September 2010)

c) Gender

Figure 3.3 indicates that the number of female employees at 147 or 69% was almostdouble that of the females at 66 or 31%

Figure 3.13 Distribution of the employees by Gender

(Source: Personnel Management Group - Planning & General Affair Dept , September 2010)

The above chart shows that organization gender ratio is rather homogenous, eventhough VFC policy always encourages men in recruitment Due to the nature of work andindustry, number of female staff is higher than male’s one It also affects the ratio of gender.This gender rate is also considered as an important sign for choosing the best solution toimproving VFC staff’s working motivation Because comparing to the male, the female hassome different expectations

d) Level of Education

The level of education of the respondents as revealed in Figure 3.4 shows that 11 or5.2% respondents in VFC had secondary education which is the basic education in Vietnam.

In total only 10 or 4.7% had diploma level certificate and the majority (162 or 76.1%) had abachelor’s degree; whereas 13 or 6.1% had master’s degrees The remaining 17 or 8.0% hadcertificate qualifications which were lower than diploma certificates and could take as shorttime as a week to acquire

Figure 3.14 Distribution of the Respondents According to Level of Education

(Source: Personnel Management Group - Planning & General Affair Dept , September 2010)

Generally, the study gives a favorable picture concerning the level of education of theemployees in VFC They were graduated from reputation universities of Vietnam andInternational universities It is fantastic to know that a substantial fraction of the workforce(162 or 76.1%) had bachelor’s degrees It shows that VFC staffs are high qualified Owningsuch intellectual employees, it must be very valuable to VFC However, how to take intoaccount to explore those qualifications is different and difficult task of VFC in general and the

HR Department and Managers in particularly?

e) Age of Employees

VFC staffs age is categorized four sizes 5 or 2.3% of the employees from VFC were

in 40 – 45 years age bracket whereas the oldest employees (16 or 7.5%) were aged 45 yearsand above as indicated in Figure 3.5 A look at the age structure of the employees shows agreat diversity The majority of the employees (125 or 58.7%) were in the age bracket of 30years and below, 67 or 31.5% were aged 30-40 years They are mature enough with mostenthusiastic fullness of a career life’s cycle Greater diversity in age creates challenges but