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

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

International School of Business

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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

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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

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

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

Acknowledgements

LIST OF FIGURES

LIST OF TABLE

Chapter I: Background.……… ………1

I Company overview ……… … 1

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 1 Work-life imbalance……… 14

IV 2 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

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

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

1 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

Table 2 Sales employees’ turnover rate in Garment, Textile & Footwear Industry………… 6

Table 3 Analysis of tenure of existing employees……… ……….8

Table 4 Tenure of leaving employees……….…….8

Table 5 Reasons for leaving year 2015……… …………11

Table 6 Reasons for leaving year 2016……… …… … 11

Table 7 Health Problems caused from long working hours……… …….……16

Table 8 Average time-to-fill……… ……… …17

Table 9 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 22 Expectation of HR Department and Sales Department……… 54 Table 23 Cost benefit of alternative solutions………56 Table 24 In-depth Interview report ……… …….89

Figure 2 Voluntary Staff Turnover Rate……… ………7

Figure 3 Reasons for leaving 2015……….10

Figure 4 Reasons for leaving 2016……….10

Figure 5 Salary and benefits in comparison with garment and textile industry……….………12

Figure 6 Hot jobs in 2015: difficult to recruit and retain……… ……….17

Figure 7 Avery Dennison workforce age ……… … ….…22

Figure 8 What work-life balance means to Millennials ……… …… …22

Figure 9 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 3 sourcing destination over the next 5 years………… ……… 39

CHAPTER I: BACKGROUND

I Company overview

I.1 Avery Dennison Vietnam RBIS Co., Ltd

The first factory of Avery Dennison Retail Branding and Information Solutions (Avery Dennison RBIS) Vietnam Co., Ltd was established in Binh Duong in 2003 In July 2015, it opened a new distribution center located in Binh Tan district, Hochiminh City On 18th January, 2016, Avery Dennison RBIS opened its latest manufacturing facility in Long An province Since its entry in Vietnam in 2003, Avery Dennison RBIS has invested $40 million

to date, with the new Long An manufacturing facility representing the next milestone of the company's ongoing investment in the country Moreover, Avery Dennison has the sales office

in Hanoi, covering Vietnam and Cambodia markets Total employee in Vietnam is 2,500

I.2 Avery Dennison RBIS Vietnam structure:

In Avery Dennison RBIS Vietnam, there are 3 functions: Commercial, Finance and Plant In Commercial Functions, there are some departments like: Business Partners Department includes HR and IT, Sales Departments and Customer Services Department The Finance Function includes Finance and Accounting Department The Plant Function has some departments such as: The production department, the logistics department and purchasing department

Figure 1: Avery Dennison RBIS Vietnam structure

(Source: Human Resource Department)

II Background of the symptom

In the opening ceremony the new facility, Rishi Pardal, vice president/general manager, North Asia, Avery Dennison RBIS expressed:

“We will continue to invest in new innovations and technologies to increase our capabilities and help our customers elevate their products and brands Our aim is to deliver better value for our customers by leveraging our rich 80 years of expertise, in addition to our expansive, global network Together, we will grow and support Vietnam’s ambition to become the world’s manufacturing hub”

To implement the business plan, Avery Dennison invests not only in new innovations and technologies but also workforce Talent development remains a key pillar of success at Avery Dennison and employees will undergo leadership development and skill enhancement programs in Vietnam Although the turnover status of the company has not been public due to

the security and confidentiality regulations of the company; but in the speech at the Annual Management Team Meeting 2016, Mrs Nguyen Cuu Thanh Chau, General Director of Avery Dennison RBIS Vietnam stated that

“The sales employees’ turnover rate had negative impacted to the company business plan and results Even the sales avenue is good, but the company always take care sales employees very carefully to avoid bad effects from the sales employees’ turnover”

Jason et al.1 stated that employees’ turnover is a much studied phenomenon Micheal et al.2

indicated that employee turnover is one of the persisting problems in organizations Sami et al.3stated that employee turnover is the rotation of workers around the labor market James4 stated that turnover is the ratio of the number of organizational members who have left during the period being considered divided by the average number of people in that organization during the period Barry et al.5 stated that turnover is any departure beyond organizational boundaries Barry et al.6 stated that turnover is the degree of individual movement across the membership boundary of a social system Robert7 stated that “frequently, managers refer to turnover as the entire process associated with filling a vacancy: each time a position is vacated, either voluntarily or involuntarily, a new employee must be hired and trained This replacement cycle is known as turnover.”

There are two types of turnover: Voluntary and Involuntary US Bureau of Labor Statistics defined that voluntary turnover refers to termination initiated by an individual employee James4 defined that involuntary turnover is movement not initiated by an individual employee All companies need to generate revenue to stay in business Besides, revenue is needed for further the company goals such as: developing and innovating new products and services But

how can a company generate revenue? The sales department in the company is primarily responsible for generating sales revenue Staffs in general and sales staffs in specific are the most valuable asset in companies Andrew et al.8 found that: “The sales job is deserving of special attention for its importance, prevalence, and unique characteristics”.

Because the role of sales force on their business is important, therefore, Avery Dennison Vietnam needs to retain the sales force because:

Employees in sales jobs work under a high pressure They work with the buyers to get orders/ contracts to company If they quit, it will affect directly to the revenue of the companies The Peppers & Rogers Group’s research showed that customers rely on their emotional experiences with salespeople more than any of the traditional factors 9

Customers’ demands are increasing; in today’s economy Diane et al.10

stated that many companies tend to upgrade sales force effectiveness with continuously rising performance targets Alan et al.11 indicated that in many companies, “acceptable” performance of salespeople is inadequate for achieving companies’ success in the marketplace

Mrs Dao, sales manager of factory sales division, shares that the sales department divides into two divisions including Factory Sales and Retail Branding Organization The sales department has 24 members, in which factory sales accounts for 16 members Mrs Dao expressed that all

of the sales employees who quit Avery Dennison are belong to factory sales employees

Mrs Dao shares the working process from beginning to produce a label order as below:

Sign frame contract

Hubs (Regional Sales Dept.) Retail fashion Companies

List of processing companies Get frame contract & Give frame contract and list of processing companies

list of processing companies Sign frame contract

Sales Department (Vietnam) List of processing companies+ fashion companies

Get the project + instruct to send orders to CS Factory sales Processing Companies Forecast material needed+ Give the project Fashion Companies

Production plan Materials + timing needed

Actual orders +

Send orders

Customer services Dept

Production Dept Design + print label

Prepress department Avery Dennison believes that employees’ opinions are important, hence, by the end 0f 2016, they hire Tiro Company to do the staff survey for internal use There are 150 businesses both Vietnamese and foreign companies in garment, textile and footwear industry participating in

the survey The survey helps management team to design the concept to fit to employees’ HR Development needs and further the fulfillment of company’s goal

Table 1: Sales Employees’ Turnover Rate

(Source: Human Resource Department)

In the last four years, the percentage of leavers in sales department of Avery Dennison has been increasing This trend gives alarm to management board to take action right now

Table 2: Sales Employees’ Turnover Rate in Garment, Textile & Footwear Industry

(Source: Tiro Company)

AVERY DENNISON RBIS VIETNAM

Sales force voluntary turnover in Garment,

Apparel & Textile Industry

22.19% 23.15% 26.67% 24.20%

In the table 2, we can see that the turnover rate of sales force at Avery Dennison is high in comparison with the turnover rate of the total company Usually, the turnover rate of workers in Garment textile is high in comparison with the office workers But in this case we can see that the turnover rate of sales force is higher than the workers in the company And it’s higher than the turnover rate of sales force in Garment, Textile and Footwear Industry

As per a survey by TalentNet and Mercer in 2016, the average staff turnover rate of local companies was higher than MNCs

Figure 2: Voluntary Turnover Rate

(Source: Talentnet and Mercer Total Remuneration Survey (TRS) 2016) Moreover, the tenure with Avery Dennison in general is from 7 years and 4 months to 8 years while the number of years staying with Avery Dennison of sales staff has been decreasing

Table 3: Analysis of tenure of existing employees

(Source: Human Resource Department) Table 4: Tenure of leaving employees

(Source: Human Resource Department) When looking into the data of leavers, the tenure of leavers with Avery Dennison RBIS Vietnam was more than 5 years However, tenure of leaving sales staff has decreasing The management board should have the solutions to retain them in the company as well as recruit the right people

AVERY DENNISON RBIS VIETNAM

TENURE OF EXISTING STAFF

III Initial cause effect map

According to Price et al.12 with the Causal Model of Turnover, opportunity, promotional opportunity, distributive justice, pay, general training, routinization, integration, participation, instrumental communication, professionalism and kinship responsibility are independent variables in models impacting to job satisfaction and intent to stay or leave The model shows that intent to stay has a direct negative impact on turnover, when job satisfaction increases, intent to stay with the organization will be increased

In the field of worldwide HRM, there are two major reasons why turnover is a central issue First, Barry13 stated that turnover is related to low organizational knowledge, low employee morale, low customer satisfaction, high selection costs, and high training costs Arie et al.14 showed that high employee turnover is related to lower organization performance Second, Peter et al.15 indicated that the decision to turnover is often the final outcome of an individual’s experiences in an organization

Turnover is explained by the difference between Push and Pull factors ‘Push’ factors cause individuals to look for another job ‘Pull’ factors draw employees towards another organization In 2006 People in Aid research on the reasons why people stay and perform in an organization and why staff leaves the organization it was found out that for each individual there may be a number of inter connected push and pull factors for leaving or staying William16 found that turnover has three major sets of causes: Work satisfaction related factors; Economic opportunity factors and individual factors

Diane17 found a list of 12 causes that lead to voluntary 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:

Figure 3: Reasons for leaving year 2015

Source: Human Resource Department

Figure 4: Reasons for leaving year 2016

(Source: Human Resource Department)

AVERY DENNISON RBIS VIETNAM

Work-life Balance Better Career Opportunity Leadership Continuing Education Relocation Job Disatisfaction

SALES DEPT - HR INTERVIEWS REPORT YEAR 2015 REASON FOR LEAVE

PERCENTAGE (%) Better Career Opportunity 45.54 Leadership 29.32 Work-life balance 13.67 Continuing

Education 5.89 Relocation 3.1 Job disatisfaction 2.48 Benefits 0 Retirement 0 Work environment 0 Health 0

Better Career Opportunity Leadership Work-life balance Continuing Education Relocation Job disatisfaction

AVERY DENNISON RBIS VIETNAM

Work-life Balance Better Career Opportunity Leadership Continuing Education Relocation Job Disatisfaction

SALES DEPT - HR INTERVIEWS REPORT YEAR 2016 PERCENTAGE (%)

Better Career Opportunity Leadership Work-life balance Continuing Education Relocation Job disatisfaction

SALES DEPT - HR INTERVIEWS REPORT YEAR 2016

REASON FOR LEAVE PERCENTAGE (%) Better Career Opportunity 42.73 Leadership 30.01 Work-life balance 15.28 Continuing Education 6.54 Relocation 2.97 Job disatisfaction 2.47 Benefits 0 Retirement 0 Work environment 0

Better Career Opportunity Leadership Work-life balance Continuing Education Relocation Job disatisfaction

Table 5: Reason for leaving year 2015

(Source: Tiro Company) Table 6: Reasons for leaving Year 2016

(Source: Tiro Company)

AVERY DENNISON RBIS VIETNAM

REASONS FOR LEAVING

Better career opportunity/ offer 15.00% 13.50% 11.09%

Lack of opportunity for advancement 10.00% 14.00% 3.00%

AVERY DENNISON RBIS VIETNAM

REASONS FOR LEAVING

Better career opportunity/ offer 10.10% 12.00% 17.10%

Lack of opportunity for advancement 0.00% 14.50% 1.00%

According to the tables and figures above, the reason related to salary, compensation and benefits, the common concern of many companies, is excluded Mrs Dao expressed that:

“The company has the award policies for sales employees If the sales employees reach and reach over the target, they will earn the incentive For the sales employees who reach 100% of the target for sales volume, they will earn 2 month salary besides 13month salary Besides the above policy, Avery Dennison has another policy to encourage the salespeople If the sales staff can reach over the target 5% they will have 10% of 13 month salary For over sales target 10%, they will earn 20% of 13 month salary And if they reach over the target 30% and more they will earn 40% of 13 month salary.”

Figure 5: Salary and benefits in comparison with garment and textile industry

Source: Tiro Company

IV Updated cause-effect map:

Based on the results provided by Tiro Company, Management Board and HR Department have launched some solutions to solve the problem, but the turnover rate of sales people is still high Therefore, the real problem may be hidden To find out the real problem, the in-depth interview

AVERY DENNISON RBIS VIETNAM

SALARY AND BENEFITS IN COMPARISION WITH THE SAME

COMPANIES IN GARMENT AND TEXTILE INDUSTRY

Very low Low Medium High Very high

with HR manager, sales manager and sales people were conducted to investigate deeper the reasons why sales people leave the company

HR manager stands at the company’s overview so her ideas are general and unbiased

Sales manager takes care of her team and close to her employees She has deep understanding

Having the reasons from her view and the surveys before the sales employees quitted, Mrs Anh stated that there were many reasons for experienced sales people leaving; they are low engagement, high workload, work-life imbalance, better career development and unequal workload allocation

Mrs Dao stated that the reasons for experienced sales people leaving are: Work-life imbalance, better career development and unequal workload allocation

As per Mrs Nhung’s opinion, the reasons for experienced sales people leaving are: Heavy workload, better career development, unequal workload allocation and promotion favoritism

Through the interview, Ms Thanh stated that the reasons for experienced sales people leaving are: Better career development, work-life imbalance and unequal workload allocation

From her own view, Mrs Huong stated that the reasons for experienced sales people leaving are: Work-life imbalance, better career development and unequal workload allocation

As per Mrs Vi’s information, the reasons for experienced sales people leaving are: Work-life imbalance and leadership style

After the first in-depth interviews, the second in-depth interviews were conduct to find the key reasons that lead to the high turnover of staff

From private discussions with sales experienced sales employees before they quit, Mrs Anh stated the key reason for experienced sales people leaving is unequal workload allocation

As per Mrs Nhung’s opinion, the key reason for experienced sales people leaving is unequal workload allocation and promotion favoritism

Ms Thanh stated that the key reason for her leaving is promotion favoritism

To Mrs Huong, the key reason made her leaving is promotion favoritism

From the chat with sales employees who quit, Mrs Vi expressed that the key reason for experienced sales people leaving are: Work-life imbalance and promotion favoritism

The detail interviews and results are showed in the Qualitative Research In-depth interview report in table 24 page 89

IV.1 Work-life imbalance:

Jeffrey et al.18 stated that work-life balance is an equal time, satisfaction, and involvement in each of the work and family spheres irrespective of job demands, family demands, family structure, financial pressures, and so on Edy19 stated that work-life balance is the acceptable levels of conflict between work and non-work demands

Scott Thompson20 found that:

“Heavy workloads can negatively affect the psychological well-being of employees, their blood pressure and heart health, the stability of their family relationships, and their safety in the workplace All of these negative effects can fluctuate on a daily basis based on the employees' perception of the amount of work they have to do.” The concept of workload used in the research is the sales target assigned to the sales employees

in a year This research analyses the workload assigned per year, which is the sales target and number of customers served by a single sales employee in one year According to Friedhelm21there is a relationship between the performance and the workload of the sales employee; performance can be affected by the workload being too high or too low Sustained low workload would be boredom, loss situation of awareness and reduced alertness as the result According to Iris22 an increasing of workload would have resulted working long hours and expressing dissatisfaction for the employees “The workload would also be affected by the type of the jobs, the complexity of the jobs, working hours, and any other related factors.”

“New research from Stanford University showed that productivity per hour declines sharply when the workweek exceeds 50 hours, and productivity drops off so much after 55 hours that you don’t get anything out of working more.”23

Table 7: Health Problems Caused from Long Working Hours

(Source: Cankiri Karatekin Universitesi Iktisadi ve Idari Bilimler Fakultesi Dergisi)

Because of lack of people in sales department, the existing sales employees have to shoulder the workload of leaving employees They must work overnight or bring workload to work at home or work at weekend Therefore, they don’t have time for their families, their personal hobbies After some years working at the company, leaving the company is their choices

Until now, only when a sales person leaves the company, the recruiter tries to get candidates for Sales department by internal and external recruitment Although the sales department needs the new comers as soon as possible but the HR department and headhunter companies cannot meet their requirement because the recruitment process will take a long time to ensure that they

can get the quality and right person It means that in this time, the existing employees must shoulder the workload of the leaving employees It impacts to the company efficiency

Table 8: Average time-to-fill

(Source: Human Resources Department)

To explain why the recruiters take long time to recruit a new sales employee, a survey made by Talentnet in association with Mercer has clarified as below:

Figure 6: Hot Jobs in 2015: Difficult to recruit and retain Source: Talentnet in association with Mercer

AVERY DENNISON RBIS VIETNAM

AVERAGE TIME - TO - FILL

Time to Fill formula:

Time to Fill = Total Number of Days Job Is Available and Unfilled Average Time to Fill = Total Number of Days of Open Jobs

Total Number of Jobs Open

Calculating Qualified Candidates:

Qualified Candidates = Total Candidates Per Opening Who

Move Past the Phone Screen Stage DEPARTMENT 2013 2014 2015 2016 Sales 42 days 42.5 days 44 days 47 days Qualified Candidates 3 2.9 2.7 2.4

When the managers want to increase the workload of their talented employees, they had better increase their employees’ positions The talented employees will take on a bigger workload, but they will quit if they cannot stand their job any more The acceptable ways to increase the workload to the employees are promotions and title-changes If the manager increases workload to her/ his employees because they are talented ones, without changing anything, her/ his employees will seek another job that gives them what they want

Alan et al.24 stated that “this perception of imbalance between work and personal life may lead to frustration and increased desire to reduce the perceived cause of such conflict” This desire may often lead to resignations

Ann et al.25 found that army officers have higher intention to quit when they notice that their work interferes with their family life

Moreover, heavy workload also leads to reduced productivity, burnout The employees can easy make mistakes

About the workload situation, Mrs Dao said that: “Our sales members leave the office very late at night or go to office very early in the morning In front of the office, there are many taxies after operation hours The drivers wait to drive sales people to their houses because all shuttle buses work as per shifts Of course, the company will pay for the taxi fares if they register working overtime The security will write out the taxi plate when the sale person takes a taxi to her house In our department, Mrs Oanh got married with Mr Hung, a taxi driver of Mai Linh Company because she works very late and Mr Hung is the person who usually drives her to her house”

Almost sales people who left or who are working at Avery Dennison express that they feel tired because of overworking When a sales staff leaves, the good and experienced sales person will

be handover the customers of the left staff until the new staff comes However, to avoid the big companies leave because of inexperience new sales staff; the manager will assign the sales people who reached over the target to take the big companies All sales staffs who were interviewed revealed that, they always leave companies late and work at home to finish the workload too late For the single sales people, they can do it For the married sales person, this makes their husband or their family unhappy Although they work to finish their workload but they feel dissatisfied and for long time, they will leave company

Moreover, overworked employees sooner or later burn out They will feel that they are being punished for their great performance Overworked employees are also counterproductive Besides, because of workload, they don’t have time to join in any activities of the company They admitted that they would like to use the free time for their families or sales team more than join in the events of the company In the participants’ lists which the event organizers supplied to Avery Dennison Vietnam, 95% members of Sales Department didn’t join in any engagement activities Therefore, they feel that they don’t engage with the company

From these above factors, the sales people intend to leave the company

IV.2 Unequal workload allocation

MG (Ret.) Mike et al.26 stated that 80% of the work is accomplished by 20% of the people Unfortunately, this is prominent in most organizations because they do not use processes to

lead their personnel appropriately Unequal workload distribution can cause dissention in the ranks, jealousy, increased perceptions of favoritism, worker frustration, turnover and unhappiness

100% of over-achieved sales people who are interviewed reveal that they feel dissatisfied because of the unequal workload allocation If sales people reach over the target, the manager will set the new target for them with the achieved target time x target percent of next year With the staff that they only reach the target, the new target is only x percent The more sales revenues they get, the higher sales quota they are assigned For some years, the sales people will reduce the effort to get over the sales quota

Ms Thanh stated that: “My sales target assigned is always higher than my colleagues who were recruited in same year with me 3 or 4 times Even my sales target is higher than my colleagues 2 times who work longer than me 2 years.”

Define the central problem

However, after conducting some short interviews with some more sales employees and the second in-depth interviews, the real reason for high turnover rate at sales department is promotion favoritism

Regarding to work-life imbalance, it is not a key factor leading to high turnover rate in Sales Department In table 20, Avery Dennison Vietnam has a competitive salary and compensation

to their sales staff To keep the current job, sales employees must choose between their

personal life and the high workload job Moreover, in garment, textile and footwear industry, most of the office workers as well as sales employees have to work overtime

Mrs Tam stated that: “I have some friends who are working in many multinational companies They are usually working overtime Because of high workload, they work until 8 to 9pm and work on Saturday of work at home on Sunday Their salaries are even lower than me Besides, they face the competition between team Therefore, I refer staying here than moving to other company for the same position”

Mrs Quyen stated that “I used to work for some foreign companies before I work here The workloads were heavy, they could be less or the same but I work under high pressure because I must find new customers and the heavy workload However, the salaries were lower than this company I am satisfied with the salary and working environment here In this company, I don’t need to find customers; I only finish all my workload assigned”

Table 9: Percentage of companies complying with the overtime regulations

(Source: Tiro Company) PERCENTAGE OF COMPANIES COMPLYING WITH THE OVERTIME REGULATIONS

Figure 7: Avery Dennison workforce age (Soure: Sales Department.)

Figure 8: What work-life balance means to Millennial (Source: HBR.ORG)

AVERY DENNISON RBIS VIETNAM

DATA ABOUT AGE OF SALES DEPARTMENT December, 2016

1 2 3 4 5 6 7

19-21 22-25 26-30 31-35 36-40 41-49 >50

Figure 9: Millennial believe in life after work (Source: Deloitte)

We can see that the majority of the workforce in sales department is Millennial Henrik27 stated that Millennials drive for work-life balance Myers et al.28 stated that Millennial confirms that work-life balance is a high priority for them De Hauw et al.29 stated that, although they value work-life balance, they would put extra time and effort to work when needed in order to ensure the company succeeds

Ms Thanh stated that:

“We all realized that our customers’ production line can interrupt if we cannot supply labels to them on time In order to have labels, we must complete our workload then other departments can complete their steps Hence, we can work overtime to complete our workload”

Ms Tram stated that:

“Although I really like to spend my time to travel or other hobbies but in case of urgency I will give a priority for work.”

Moreover, after receiving the opinions of sales staff, beginning 2017, the company is going to apply the working hours and workplace flexible at home for office workers The sales employees are installed the software in laptop so that they can work at home The IT department has some methods to ensure that the confidential information cannot be revealed in case the laptops are stolen However, the first six months of 2017, the turnover rate doesn’t decrease Therefore, the high workload isn’t a central problem that leads to employees’ leaving intention

For unequal workload allocation, after receiving complaints from sales employees, the human resources and management team had some meeting to find solutions for this issue In which, the manager and vice manager will review the total workload for the whole team and have some meetings/ discussions with them to reallocate the workload to their sales employees The solutions will be applied from April, 2017

However, Mrs Anh stated that: “Before the new sales target of workload allocation is assigned to sales person, there were mutual agreement between sales manager and sales employees We did hope that sales department’s turnover rate is reduce But it didn’t happen as our expectation The turnover rate after that are still the same even higher than the same period.”

Mrs Dao, sales manager stated that:

“The sales target that we assign for sales employees that depend on their capability For some sales employees who have some skills such as negotiation skills, forecast and analysis skills and so on can

reach the target easily While some sales employees who don’t have these skills although they were trained If sales employees express the difficulties that they cannot reach the target, we can consider” Mrs Tu stated that: “Actually, not only me but also other sales people, when I accept a new sales volume target from my manager, I consider if I can reach it or not If not, I try to convince by data to

my manager that I cannot reach it Mrs Dao is not a bad manger so she listen our opinion in daily working”

Mrs Hoai added that: “Of course, we are sales people; we are not too gentle to accept any new sales volume target from our supervisor or manager We have some skills that can negotiate with my manager We all understand that when we achieve the assigned target even higher we earn high bonus from that”

Ms Thanh stated that: “I knew that if I showed the real reason why I quit the company we promotion favoritism, the HR department could have some solutions to solve the high turnover rate situation However, I work in Garment, Textile and Footwear industry so I will work with Mrs Dao and other sales people of Avery Dennison Hence, I want to keep this good relationship with them Therefore, I showed the reason is unequal workload allocation This reason and action apply not only me but also Mrs Huong and other best sales people.”

From above opinions from sales people who quit and are working at Avery Dennison, the unequal workload allocation is not the central problem of Avery Dennison

It can be seen that promotion favoritism is considered as main factors that effect to sales employees’ turnover rate Because of the following reasons:

Firstly, before the sales employee leaves the company, The Human Resource will send the official surveys to sales employee to ask the reason why he or she leaves Most of the people didn’t reveal the actual reason why they decide to leave Until joining in the in-depth interview, they stated that the key reason leading to high turnover is related to favoritism from managers

on promotion They didn’t show the actual reason because they would like to keep the relationship with their supervisors while working in the company If they change their job to other companies in garment, textile and footwear industry, they also would like to keep the relationship with their former supervisors because Avery Dennison is a leading label company

in the world Besides, they did not mention a lot other factors

Secondly, job promotion comes with extra income of an employee A sales employee is promoted to higher position, her/ his salary will increase from 15% to 25% of her/ his salary Moreover, he/ she will have some benefits such as: insurance for their family members, higher telephone lump sum, attending training on management, and so on

Thirdly, promotion favoritism impacts to the job satisfaction of employees The best and achieved sales employees feel hurt and dissatisfied when they work under the supervision of supervisor whose performance is lower than that of them

over-Lastly, getting promotion in job is the most important of every over-achieved employee Job promotion shows the achievement of success in career life of employee When an over-achieved sales employee is promoted, he/ she feels proud of herself/ himself and feels that the company acknowledge and thank you for her/ his contribution/ performance

The money reward system is based on employees’ performance result but job promotion is based on the evaluation of sales manager The sales manager will have a staff assessment talk with sales employees but the criteria are not clear and weight The sales manager can evaluate base on her feelings

Because the sales employees didn’t express directly their main reason for leaving so Avery Dennison didn’t recognize the main reason And as above analysis and combined with Ms Thanh and Mrs Huong from the second in-depth interview indicated that the main cause of high turnover rate at Sales Department at Avery Dennison RBIS is favoritism from the manager on promotion Therefore, the company should focus more on how to improve favoritism from manager first to enhance the effectiveness of performance evaluations process

The following cause and effect tree with the main content and reasons has created by combining the literature and in-depth interviews with Sales employees

Leadership Work-life imbalance

- Unequal workload allocation - High workload due to lacking of people - Lower performance and working

- Promotion favoritism impacts to lifestyle (family, hobbies, health) attitude of existing employees

- Costing on company time, money Sales employees’ turnover - Negative impact to Avery

Receive higher offer from Not engagement with other depts Dennison Reputation

Competitors & companies besides daily work -Negative impact to Avery

Figure 10: Initial Cause and effect tree

The following cause and effect tree with the main content and reasons has created by combining the literature and in-depth interviews with Sales employees

Leadership Work-life imbalance

- Unequal workload allocation - High workload due to lacking of people - Lower performance and working

- Promotion favoritism impacts to lifestyle (family, hobbies, health) attitude of existing employees

- Costing on company time, money Sales employees’ turnover - Negative impact to Avery

Receive higher offer from - Not engagement with other depts Dennison Reputation

Competitors & companies besides daily work -Negative impact to Avery

Figure 11: Updated Cause and effect tree

CHAPTER 2: PROBLEM JUSTIFICATION

II Justify problem in term of existence

“A survey conducted by Georgetown University's McDonough School of Business indicated that 92% of senior business executives have seen favoritism in employee promotions, including at their own companies (84%)” 33 Therefore, favoritism is absolutely seen in most companies, big or small Nezire et al.34 stated that favoritism is a natural phenomenon which exists in every company

According to Mrs Dao, the factory sales division has one manager and two vice managers These positions are fixed Sales people could be promoted to supervisors but these positions are also limited All over-achieved sales people who quitted and all over-achieved sales people who are working at Avery Dennison admitted that they like to be promoted to higher position Everyone likes kudos Some staffs who are always in top 5 of best sellers for many years have been not promoted to higher position, superior, although their length of service and the good performance While some of sales staffs who were promoted to supervisor positions have the