Turnover rate and promotion favoritism from sales manager at avery dennison RBIS vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI HONG HUONG TURNOVER RATE AND PROMOTION FAVORITISM FROM SALES MANAGER AT AVERY DENNISON RBIS VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI HONG HUONG TURNOVER RATE AND PROMOTION FAVORITISM FROM SALES MANAGER AT AVERY DENNISON RBIS VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: NGUYEN PHONG NGUYEN Ho Chi Minh City – Year 2017 EXECUTIVE SUMMARY The sales industry usually faces a huge challenge for businesses to retain staff Developing new staff into high performers costs time, effort and money, but companies will take advantage of the positive impact later on the business Therefore, they know how the important of retaining these key employees A high staff turnover and low retention within a sales department is acknowledged to be harmful and potentially damaging to the businesses revenue because of the cost of recruiting replacements, training and the time spent to train new employees It has been found that constant recruitment is not only linked to the reduction of sales performance but also has a bad impact on existing staff members’ morale The main purpose of this thesis is to explore the causes of high turnover rate of over-achieved sales employees at Avery Dennison RBIS Vietnam Method of analysis is combined between validated data and theory-informed which collected through in-depth interview and company survey to explore the causes of problem The finding of the study revealed that promotion favoritism from sales manager is the key reason why over-achieved sales employees decided to leave the company The findings also proposed some solutions to retain high performance sales employees The solutions focus on two main causes of promotion favoritism from sales manager, which are Unweight and unclear on employees assessment form and personal favoritism from sales manager This research also proposed three suitable solutions: - Build the performance appraisal and promotion process - Make a communication a priority - Improve personal favoritism from sales manager Total cost to implement above solutions is approximately 150mil VND while benefit from the solutions is 809.4mil VND The cost saving is 659.4mil VND Because the time is limited and the ideas of interviewees may not represent all sales people, therefore, the research still exist some limitations However, the research provides validated data in combination with theory to propose solutions for Avery Dennison RBIS Vietnam to retain its high performers TABLE OF CONTENT Executive Summary Acknowledgements LIST OF FIGURES LIST OF TABLE Chapter I: Background.…………………………………………………… ……………………1 I Company overview …………………………………………………………………… … I.1 Avery Dennison RBIS Vietnam Co., Ltd………………………………… ……… …….1 I.2 Avery Dennison RBIS Vietnam structure……………………………… ……… ……….1 II Background of the symptom ……….…………………………………… … … …….2 III Initial cause effect map…………………………………………………………… ………9 IV Updated cause effect map………………………………………………………………….12 IV Work-life imbalance………………………………………………………………… 14 IV Unequal workload allocation……………………………………………………………19 Define the central problem…………………………………………………………… ………20 Initial cause effect map……………………………………………………………… ……….28 Updated cause effect map…………………………………………………… ……………….29 Chapter II: Problems Justification ……………………………………… … …… …… 30 I Problem definition ………………………………………………………….… …….…….30 II Justify problem in term of existence ……………………………………… ……… ….30 III Justify problem in term of importance …………………… ……………… ……………32 IV The impact of sales force turnover on Avery Dennison RBIS Vietnam………………….32 IV.1 The impact of sales force turnover on HR effectiveness…………………………….…33 IV.2 The impact of sales force turnover on employee performance…………………………39 ACKNOWLEDGEMENTS I wish to express my appreciation to Professor Nguyen Phong Nguyen for his time and valuable guidance I would never have been able to finish my thesis without help from Professor Nguyen I am grateful for what I learned from all professors and lecturers for their exciting and valuable lectures as well as precious answers to our questions I would like to acknowledge and thank Mrs Chau, Mrs Dao and all sales staffs of Avery Dennison RBIS Vietnam who contributed towards the successful completion of this research I would also like to extend my appreciation to most important of my life: my father, my big family, my little family and close friends for their unconditional support to bring this thesis to completion Lastly, I would like to dedicate my thesis to the memory of my mother who could not see my thesis to its conclusion My memories of her inspired me to keep moving forward IV.3 The impact of sales force turnover on working attitude of remaining staff…………….42 Chapter III: Causes validation and solutions……………………………………………… .43 I List of causes……………………………………………………………………………… 43 I.1 Unweight and unclear indicators on staff assessment form……………………………… 43 I.2 Personal favoritism from manager…………………………………………………………43 II Solutions………………………………………………………………………… ……… 45 II.1 Build the performance appraisal and promotion system……………………………….…45 II.2 Make a communication a priority………………………………………………….… ….45 II.3 Improve personal favoritism from sales manager…………………………….…….…….46 III Action plan…………………………………………………………………………… ….48 IV Success measurement after taking action………………………………………… … …54 IV.1 Cost saving……………………………………………………………………… ……55 IV.2 Keep the customers’ faithfulness……………………………………………… ………55 IV.3 Increase the sales avenue……………………………………………… ……… …… 56 V Conclusion…………………………………………………………………….… ……… 57 Chapter IV Supporting Information………………………………………….……………… 58 Introduce Avery Dennison Corporation……………………….…………………………….58 2.Secondary data………………………………………………….……………………………59 Interview guide ……………………………….……………………………………………… 60 Interview transcripts……………………………………………………………………………62 The Qualitative Research In-depth interview report ……………… …………………………88 References………………………………………………………………………………….… 91 LIST OF TABLES Table Sales Employees’ turnover rate………………………… …………………………….6 Table Sales employees’ turnover rate in Garment, Textile & Footwear Industry………… Table Analysis of tenure of existing employees…………………………………… ……….8 Table Tenure of leaving employees…………………………………………………….…….8 Table Reasons for leaving year 2015…………………………………………… …………11 Table Reasons for leaving year 2016…………………………………………… …… … 11 Table Health Problems caused from long working hours……………………… …….……16 Table Average time-to-fill…………………………………………………… ……… …17 Table Percentage of companies complying with the overtime regulations…… ………… 21 Table 10 Recruitment cost per new sales employee……………………………… …………34 Table 11 Recruitment report……………………………………………………… …………34 Table 12 Out-of-Job training cost for New Sales Employee…………………… ….……… 35 Table 13 Training cost by Asia Best Seller……………………………………… …… ……35 Table 14 Adapting time for new sales employee…………………………………….… ……36 Table 15 Time allocation for current workload and handover workload………………… ….37 Table 16 Working time allocation in the high season………………………………… …….37 Table 17 Working time allocation………………………………………………………… …38 Table 18 Sales Avenues and quantity of customers: Vietnam and Cambodia market…… ….40 Table 19 Sales Avenues and quantity of customers: Vietnam market…………………… ….40 Table 20 Customers’ complaints report…………………………………………………….…41 Table 21 Action plan………………………………………………………………………… 50 Table 22 Expectation of HR Department and Sales Department…………………………… 54 Table 23 Cost benefit of alternative solutions…………………………………………………56 Table 24 In-depth Interview report …………………………………………………… …….89 LIST OF FIGURES Figure Avery Dennison RBIS Vietnam structure…………………………………………….2 Figure Voluntary Staff Turnover Rate……………………………………………… ………7 Figure Reasons for leaving 2015…………………………………………………………….10 Figure Reasons for leaving 2016…………………………………………………………….10 Figure Salary and benefits in comparison with garment and textile industry……….………12 Figure Hot jobs in 2015: difficult to recruit and retain……………………… …………….17 Figure Avery Dennison workforce age ………………………………………… … ….…22 Figure What work-life balance means to Millennials ………………………… …… …22 Figure Millennials believe in life after work……………………………………… ……….23 Figure 10 Initial Cause and Effect tree………………………………… …………………….28 Figure 11 Updated Cause and Effect tree………………………………… ………………….29 Figure 12 The top sourcing destination over the next years………… ………………… 39 83 Hoang Thi Thanh Huong: I myself and almost my colleagues agreed that we cannot treat all customers fair We will apply the 80/20 principle into our work To reach our target, we must give more time to take care the big customers When we get the forecast volume from our customers, we will instruct them to contact with the customer services department to place orders and if they have any concern about their orders, they can contact customer services department first and if they cannot solve, we will involve Nguyen Thi Hong Huong: Do you think that this choice may impact the company business in long-term? Hoang Thi Thanh Huong: Yes sure, we can image that our customers will feel offend and will leave our company But we must choose between sales target and all customers’ satisfaction Nguyen Thi Hong Huong: Yes, I got it What led you to decide to leave Avery Dennison RBIS Vietnam? Hoang Thi Thanh Huong: Ah, the biggest reason I decided to leave after years working for Avery Dennison was the promotion favoritism and work-life imbalance I would like to find a job which meets my expectation about the work-life balance and promotion after I worked for Avery Dennison years I worked hard even at night or weekend but I didn’t receive any promotion although I was usually on the top best sellers of the company I felt that our contributions are not recognized After years working for Avery Dennison, I decided to leave to apply for another job that I can balance between work and life as well as for higher position 84 Nguyen Thi Hong Huong: Did you have the staff talk with your supervisor or your line manager about your problem? Hoang Thi Thanh Huong: I didn’t express directly the reasons why I left because I would like to keep the relationship with this company and my manager Avery Dennison is the top label company in Vietnam and in the world If I work in the garment and textile industry, I may cooperate with Avery Dennison Nguyen Thi Hong Huong: Yeah, I see Thank you for your sharing Could you please suggest the solutions to handle the problem that you faced? Hoang Thi Thanh Huong: Actually, I think a lot about the problem that I faced For workload, I think the HR team should have the plan to launch the talent programme They can contact with universities to get the excellent students by giving them the chance to internship at the company When students the internship at sales department, they have time to get familiar with the planning skills, communication skills If they pass the internship, they can work for Avery Dennison when they graduate If we can that, we can have available staffs who can replace the leaving staffs easily For the promotion policy, I think the company should have the clear criteria to promote people Besides, the management board should show to staffs that they admit and recognize their staffs’ contribution Nguyen Thi Hong Huong: Thank you very much for your suggest 2nd interview: 11th Mar 2017 10:00 AM 85 Nguyen Thi Hong Huong: Thank you for joining the second in-depth interview with me Continue with the first interview You have mentioned that work-life balance and unfair promotion are the reasons impact on your decision However, which one is the biggest reason that impact on your decision? Hoang Thi Thanh Huong: Actually, promotion favoritism is the important reason that I decided to leave I believe that with my experience and my achievement I can find a better job Nguyen Thi Hong Huong: Do you have any solution to solve this problem? Hoang Thi Thanh Huong: Yes, I am I think the company should have the training sessions on favoritism and clear criteria for promotion Nguyen Thi Hong Huong: Yes, your idea can be used for solving the problem Thank you very much for your solution and your time RESPONDENT 6:  Respondent: Nguyen Thi Thanh Vi  Title: Sales Executive  Age: 30  Marriage status: Married  Working Experience Period: years  Status: Send the resignation letter to HR to inform leaving, but then stay and continue working for Avery Dennison Nguyen Thi Hong Huong: Could you please introduce about yourself? 86 Nguyen Thi Thanh Vi: Yes, of course I am Thanh Vi, currently working as a Sales Executive I have been working for Avery Dennison for years Nguyen Thi Hong Huong: I think that you worked for Avery Dennison right after you graduated from university, is this true? Nguyen Thi Thanh Vi: Yes, exactly Avery Dennison is the first company I have worked for Nguyen Thi Hong Huong: What is your thinking about Avery Dennison? Nguyen Thi Thanh Vi: I think Avery Dennison is a good place to work The working environment is good My colleagues are friendly and nice I believe that I am suitable for the position Sales Executive Nguyen Thi Hong Huong: All bosses will be happy to hear their employees say that But, I heard that you used to send the resignation letter to your manager years ago Could you please tell me the reason? Nguyen Thi Thanh Vi: Well, at that time, I faced with two concerns Firstly, I worked under high pressure because of workload I didn’t have time for my personal life I could not balance between work life and personal life In addition, I got married right after I graduated from university But because of the work stress I couldn’t get pregnant I must choose between family and work Lastly, I felt unhappy and unfair when my manager promoted a colleague to be my supervisor I expected that my supervisor should be in top best sellers I am not in the top best sellers and don’t have some skills like them so I didn’t hope to be promoted At that time, my mood was very low and I didn’t share with my supervisor or manager When she 87 received my resignation letter, she booked a meeting with me and found out the reasons why I wanted to leave I only expressed the first reason because some best sellers quitted after the manager’s decision After she explored the reasons, she gave me options First option is that I continued working and she would ask the HR Department to recruit a new sales person to share my workload with me and my colleague Second option was that I would leave without payment in year I chose the first option And now I am still working here Nguyen Thi Hong Huong: And the problem was solved Now everything is better than before? Nguyen Thi Thanh Vi: Yes, of course Now I have a baby I can balance between my work life and personal life I still keep in touch with former best sellers who quitted Nguyen Thi Hong Huong: Oh, great I am happy to hear so From your perspective, what are the factors that affect the decision to leave or stay of the employee? Nguyen Thi Thanh Vi: From my case, work-life balance and the promotion favoritism from sales manager affect the decision to leave or stay of the employee I was taken care of by my manager so my supervisor has some improvement in work so I accept to stay here And my performance is better than before Nguyen Thi Hong Huong: Wow, it’s interesting Thank you very much for your time Your information is helpful for my research I hope your case is a lesson learnt for management board as well as other companies 88 THE QUALITATIVE RESEARCH INDEPTH INTERVIEW REPORT Interviewer: Nguyen Thi Hong Huong Interviewees: people from different groups as below Group 1: Manager/ Senior Executive/ Employees who are currently working for AD (1A) – Mrs Le Thi Hong Anh - HR Manager (1B) –Mrs Nguyen Thi Dao – Sales Manager (1C) – Mrs – Dang Hong Nhung – Sales Executive Group 2: who already left Avery Dennison RBIS Vietnam (2A) - Ms Nguyen Thi Doan Thanh – Sales Executive (2B) - Mrs Hoang Thi Thanh Huong – Sales Executive Group 3: who intended to leave but then decided to stay (3A) – Mrs Nguyen Thi Thanh Vi – Sales Executive 89 Table 24: In-depth Interview report Result No Question 1A The reasons why - Engagement 1B 1C 2A 2B 3A -Work-life -Heavy -Career -Work-life -Work-life experienced sales people -High workload imbalance workload development imbalance imbalance leave -Career -Career -Work-life -Career -Leadership development style Avery Dennison -Work-life RBIS Vietnam imbalance development development balance -Career -Unequal -Unequal - development workload workload workload workload -Unequal allocation allocation distribution allocation The key reasons workload - Promotion allocation favoritism why -Unequal - Unequal - Unequal -Unequal Promotion - Promotion - Work-life experienced sales people workload workload leave allocation - Promotion - Promotion favoritism Avery RBIS Vietnam Dennison allocation favoritism favoritism imbalance 90 favoritism The solutions for keeping -Flexible working -Conduct -Clear -Bottom-up experience sales people hours and working training criteria place policy for sessions assessment -Conduct employees form training courses - in feedback -Hotline, -Clear criteria for promotion Conduct training mailbox or course forum to favoritism report unfair promotion on 91 References (1) Jason DS, John ED, G Douglas J, Nina G An organisation-level analysis of voluntary and involuntary turnover Academy of Management Review 1998;41(5); 511-525 (2) Michael A, Stephen T Armstrong ś handbook of human resource management practice th ed London: Kogan Page; 2009 (3) Sami MA, Kenneth MH Turnover: The real bottom line Public Personnel Management 2000;29(3); 333–342 (4) James LP The study of turnover Ames: Iowa State University Press 1977:160 (5) Barry AM, Philip HM Measuring the quality of work and organizational effectiveness in behavioral-economic terms Administrative Science Quarterly 1976;21(2);212-226 (6) Barry DB, William HM Employee turnover: Individual and organizational analysis Research in Personnel and Human Resources Management, 1983;1(3); 269-319 (7) Robert HW Managing hospitality human resources 3rd ed Michigan: The Educational institute of the American Hotel and Lodging Association; 2002:461 (8) Andrew JV, Jeffery SS, Fred SS III, Philip LR A meta-analytic review of predictors of job performance for salespeople Journal of Applied Psychology, 1998; 83(4): 586-597 DOI: 10.1037//0021-9010.83.4.586 (9) Ken D The no reason customers stay or leave Business Brief [Internet] 2010 September Available from: http://www.businessbrief.com/the-no-1-reason-customers-stay-or-leave/ 92 (10) Dianne L, Mark K, Heidi LS The new science of sales force productivity [Internet] Harvard Business Review 2006 September Available from: Harvard Business Review (11) Alan F, Nick J, Annie P, Sally W Opportunities to work at home in the context of work–life balance Human Resource Management Journal, 2002;12(1):54–76 DOI: 10.1111/j.1748-8583.2002.tb00057.x (12) Price JL, Mueller CW A causal model of turnover for nurses Acad Manage Journal 1981;24(3);543-65 (13) Barry MS The Consequences of turnover Journal of Occupational Behaviour 1980;1(4); 253-273 (14) Arie CG, Erik HB Is high employee turnover really harmful? 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International School of Business NGUYEN THI HONG HUONG TURNOVER RATE AND PROMOTION FAVORITISM FROM SALES MANAGER AT AVERY DENNISON RBIS VIETNAM MASTER OF BUSINESS ADMINISTRATION... resignation As per the internal survey and the survey by Tiro Company, the reasons for high turnover rate at Sales Department in Avery Dennison are found as below: AVERY DENNISON RBIS VIETNAM SALES. .. company’s goal Table 1: Sales Employees’ Turnover Rate AVERY DENNISON RBIS VIETNAM 2014 2015 2016 Annualized 2017 Number of sales staff 15 15 15 16 Turnover 10 10 11 Turnover rate 60.00% 66.67% 66.67%