Solutions for low compensation of technician team in prestige sports cars company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TO NGUYEN QUYNH TRANG SOLUTIONS FOR LOW COMPENSATION OF TECHNICIAN TEAM IN PRESTIGE SPORTS CARS COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TO NGUYEN QUYNH TRANG SOLUTIONS FOR LOW COMPENSATION OF TECHNICIAN TEAM IN PRESTIGE SPORTS CARS COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PHAN THI MINH THU Ho Chi Minh City – Year 2018 Contents Executive Summary Chapter 1: Background Information 1.1 Company Background 1.2 Company Symptoms 1.2.1 The High Turnover Rate 1.2.2 Decrease of Productivity Index and ASI Index 1.2.3 The Fluctuation of total After Sale’s Revenue Chapter 2: Problem Identification 10 2.1 Identifying and Diagnosing Tentative Problems 10 2.1.1 The first tentative problem: Excessive workload 14 2.1.2 The second tentative problem: Low compensation for technician team 16 2.1.3 The third tentative problem: Ineffective leadership 18 2.1.4 Central problem: Low compensation for technician team 20 2.2 Problem Justification 21 2.2.1 Problem Definition 21 2.2.2 Problem Existence 22 2.2.3 Problem Importance 23 Chapter Causes and possible solutions 26 3.1 Analyzing causes of the problem 26 3.1.1 Potential causes of the problem 26 3.1.2 Main causes of the problem 31 3.2 Alternative solutions 31 3.2.1 Set solution 34 3.2.2 Set solution 41 3.2.3 Choosing the most suitable set solution for company 43 Chapter Action plan for set solution 44 4.1 Objective 44 4.2 Timeline 44 4.3 Cost 47 Conclusion 51 Reference 52 Appendix 58 Executive Summary Recently, Prestige Sports Car Company Limited - an official distributor of Porsche cars in Vietnam, is facing with some serious issues, in which the high turn overate of technician team is the most significant issue Since technician team play an essential role in company operation, this issue will surely lead to some negative results with company And the most noticeable signal is the increase of the training and recruitment cost for technician team along with the decrease of after sale’s department revenue Therefore, this thesis will focus to analyze these issues with technician team and figure out what is the main problem of these things through the data from company and from some qualitative research Not only that, this thesis will evaluate and raise the most suitable solution as well as detail actions plan for solving problem And as finding from the research, the main problem lead to the high turn overate of technician team is the low compensation of company Through the depth interview with technician team, it is found that the base salary of company is low compare to other competitors in the market Not only that, the performance bonus with the benefit package is not really attractive Therefore, many technician of company feel disappointed and they decide to leave And through qualitative research as well as theories, it can be stated that this problem does exist due to the limited pay structure, the expense control of company and the subjective evaluation of manager Hence, it is suggested that company should design a new compensation plan by creating a new base salary range, keeping the same performance bonus and increasing benefits for employees The cost for applying this set solution is high, but the return benefit will help improve company performance, surely Chapter 1: Background Information 1.1 Company Background Prestige Sports Cars Co., Ltd ( herein call “PSCL”) is the official Porsche Distributor in Vietnam with currently two branches in Vietnam, located in Ho Chi Minh City and Ha Noi City The entire model range of Porsche can be named as the 911 – an exclusive sport car, the Boxster, the Cayman as well as some famous SUV cars for family purposes like Cayenne or Macan And the thing that makes Porsche so special and different from other cars company in the world is the sportiness and the designation of the car With Porsche, customers have their right to choose in the variety option to make their car unique and outstanding Not only that, Company also offers one of the highest quality cars in the world along with the excellent safety equipment for customers In Vietnam, Porsche has been well established firstly in Ho Chi Minh City since 2007 And five year later, another center has been set in Ha Noi Both outlet center has been working quiet effective and bring to Vietnam customers this excellent cars For both outlets, total 97 employees have been working in There are five departments in PSCL: Sales, After Sales, Marketing, HR & Admin and Finance; in which After Sales is the department with highest number of employees: 44 employees Please refer to below figure for more information about the organizational chart of After Sales department In After Sales department, there are 30 technicians, service advisors, service executive, two workshop foremen and one manager The responsibility of the whole department is to keep the service process smoothly and to ensure the quality of each car bought by customers In which, the service advisor team will schedule the repair appointments considering workshop capacities and control the quality of serviced vehicles while technician teams will repair and maintain cars in accordance with manufacturer’s procedures and diagnosis guidelines After Sale manager Workshop foremance Service advisor Technnician Service Executive Figure 1: Organizational chart of After Sales department Hence, it can be said that After Sales department plays an essential role in company working operation and every small effect from this department will lead to significant result for company In After Sales department, technician staffs achieve the highest percentage with 68%, which means almost jobs will be done by technician team Therefore, this essay will discuss on the problems that After Sales, especial technician team, have been facing in recent years and create the detailed action plan to improve the problem 1.2 Company Symptoms It can be seen that After Sales team have been struggling with one of the hardest time since many symptoms have been proved as below 1.2.1 The High Turnover Rate The most significant important symptom that needs to mention here is the turnover rate of technician team in recent year Since technician team plays an essential role in company operation, it is no doubt to say the high turnover rate will lead to significant negative impact to the whole company To figure out if the turnover rate is high or not, normally, it need to be compared with the average industry Unfortunately, it is extremely difficult to have this data in Vietnam market since there are no research company provided this information Therefore, the turnover rate of technician team will be put in comparison with other departments of company And below Figure will demonstrate the turnover rate of technician team as well as the turnover rate of the whole company for the period from 2015 to 2017 12.00 10.65 10.00 8.00 9.24 8.71 Company 6.00 Technician 4.00 4.04 3.57 3.48 2.00 0.00 2015 2016 2017 Figure 2: The turnover rate of technician team and the whole company from 2015 to 2017 Source: Data of HR team The line chart compares the turn overate of technician team and the whole company It can be seen that the turnover rate of technician team significantly increased, whereas the opposite was true of the figures for the whole company from 2015 to 2017 The signal can be seen here is that the ratio of technician team increases dramatically from 8.71% in 2015 to 10.65% in 2017 while this ratio of the company decreases slightly from 4.04% into 3.48% This symptom needs to be considered carefully to figure out the main reason lead to that result And when employees resign from company, the cost for new recruitment will increase because HR team needs to find more candidates for the vacancies Therefore, company has to pay money to advertise the vacancy and may incur costs related to finding the new vacancies Not only that, high turnover rate also costs company time in addition to money Managers or HR team have to spend time to conduct interviews, advertise the job and recruit candidates Moreover, their colleagues have to cover their job until a new employee is hired and begins working When new employees start their job in company, they also need to be trained to perform their jobs completely The new employee may take several months to fully learn the job and achieve competency in the position Hence, the cost for replacement training will increase Therefore, company will face with serious problem if the turnover rate of company is high Firstly, the recruitment cost of team will surely increase along with the high turnover rate The recruitment cost in company will be calculated here as only advertising fee for the vacancies The below figure will demonstrate the recruitment cost for technician team and other departments in company for giving research period From 2015 to 2017, there are a dramatically increase in the recruitment cost for technician team, from 124.8 million Vietnamese dongs into 185.6 million Vietnamese dongs, nearly 48.71% In the opposite, the amount spent on other departments gradually decline 250 200 150 100 50 2015 2016 2017 Other departments 46.8 28 23.2 Technician 124.8 156.8 185.6 Unit: Million Dongs Figure 3: The recruitment cost of technician team and other departments from 2015 to 2017 Source: Data of HR team Secondly, the replacement training fee also incurs for guiding the new technician how to repair and fix one Porsche car following the typical standard of company Normally, it took from six months to one year to train one technician to perform jobs completely The length of time will be depended on the existed experience of the technician and the ability to learn the new things of them Through that time, company has to pay money not only for outside and inside training but also for foreign training Technician will be sent to training centers in Penang and Singapore to learn the Porsche procedures Therefore, the cost training arrangement like transportation and accommodation will be high, along with the cost for hiring professional trainer to hold a class The below figure will illustrate the training cost for technician team in the period three years from 2015 to 2017 This data is calculated based on data from HR team 1,123,245,144 1,200,000,000 929,089,095 1,000,000,000 800,000,000 708,138,783 600,000,000 400,000,000 200,000,000 Figure 4: The training cost of technician team from 2015 to 2017 Source: Data of HR team It can be seen that the training cost increase dramatically from 2015 to 2017 It can be explained by the high number of resigned employees of the team Therefore, the issue of high turnover rate should be concerned carefully by the management If not, it will lead to some negative results for company, in which the total cost of company will have impact firstly because of the increasing of recruitment Respondent 1: Yes, I am also in the same situation Interviewer: Any causes that you think? Respondent 1: Well, it maybe because lack of labor union in company Interviewer: Yes? Respondent 1: I mean that we not have labor organization to protect employee’s right Therefore, it is hard for us to request for an enhance in salary system Interviewer: What else can you think? Respondent 1: I not know Interviewer: What about the expense control of company? Respondent 1: I not know It is manager business Interviewer: What about the economic inflation? Respondent 1: Well may be Economic inflation has effect on many things And I think that it also have effect on compensation of employees Interviewer: Do you know how this lead to the low compensation? Respondent 1: Well if the increase rate of salary is lower than the increase rate of inflation, then salary of employee will be low in comparison with market Interviewer: Yes, so what you think about the manager evaluation factor? Respondent 1: Ah yes I forgot it This factor is subjective That means the performance of employees is based on the subjective evaluation of manager If he doesn’t like you, your performance will be underrated and your salary increase will be affected Interviewer: If these causes continue happen in the future, what impact that you think may affect company? Respondent 1: Well I think that it will have negative effect with company For now, I have already seen consequences as I discuss with you And of course, the some symptoms will also continuously happen Interviewer: What solutions that you think company should to solve the problem? Respondent 1: As I have said in the previous interview Company should adjust the compensation system to have a more suitable salary range for employees 94 Interviewer: Yes, thank you for your sharing Is there anything more you would like to add or discuss with? I’ll be analyzing the information you and others gave me and submitting a draft report to the organization in one month I’ll be happy to send you a copy to review at that time, if you are interested Thank you for your time Transcript Interviewer: I want to thank you for taking the time to meet with me today My name is Trang and I would like to talk and discuss with you more about the compensation of company The interview should take about 15-20 minutes I will be taping the session because I don’t want to miss any of your comments Although I will be taking some notes during the session, I can’t possibly write fast enough to get it all down Because we’re on tape, please be sure to speak up so that we don’t miss your comments All responses will be kept confidential Are there any questions about what I have just explained? Are you willing to participate in this interview? Respondent 2: Yes, Interviewer: Thank you, so now we start the interview Can you introduce again about yourself Respondent 2: I am Thanh - After Sales manager Interviewer: Yes Thank you Mr Thanh for joining the second depth interview As the previous discussion, you expressed that the reason for company symptoms like high turnover rate, low ASI and low productivity is the low compensation of company, right? Respondent 2: Yes, I did say that Interviewer: What about the benefit of company? Respondent 2: Well I have to confess that benefit of company is not really good As a manager of team, I think it’s quiet low compare to other companies Interviewer: I: What about the salary rate increase every year? Respondent 2: Well as you may know, we have a lower salary increase rate compare with other department I have tried to change it but it does not work Interviewer: Yes Do you think this salary and benefit is enough for your team member’s life? 95 Respondent 2: I am not sure Sometimes, I have to approve for my team member to advance some cash from salary But it does not happen usually Interviewer: I think this can prove that some of your team member can not live well with this salary? Respondent 2: Yes, I guess that Interviewer: Yes Which consequence of this problem that you think may happen to company if this situation will not be solve? Respondent 2: Well I am thinking about the image of company Interviewer: Yes, can you explain further Respondent 2: Technicians are people who have connection with customer because they fix the car directly Therefore, if they complaint with customer about company’s compensation, it will have negative effect with company branding Customer will wonder what happen with company and why company pays such a low range salary Interviewer: So you think this consequence serious? Respondent 2: Yes, I think so Interviewer: Have you ever seen the real situation in company? Respondent 2: I did see it But I have no right to ban them from taking to customers All I can is just remind them that they should not share the company information with customers Interviewer: Any consequences that you think may happen? Respondent 2: Well I am thinking about our team emotion Interviewer: What you mean? Respondent 2: I mean that low compensation may have effect on their relationship with other people They will easy to get angry with their co-worker And it effect to the whole team working attitude Interviewer: Well I guess that this consequence is also serious? Respondent 2: Yes, It does Interviewer: Have it happened frequently in your team? Respondent 2: Some cases did happen in the past And I really feel worried about that Interviewer: Yes Anything else about the consequence? Respondent 2: Well I guess it is enough 96 Interviewer: What you think about your team recruitment process? Respondent 2: Can you explain that? Interviewer: Normally, job seekers will be more eager and happy to apply for a job with the content the same as their expectation It will be easy and beneficial for both company and applicants if the right person is chosen for the suitable job Therefore, you think that company pays their employee low salary and low benefit will have negative effect with the job interest of candidates? Respondent 2: Well I think this consequence happen in my team Because the number of application for the technician vacancies have decreased for the past three year Interviewer: And it will make the recruitment process become harder, right? Respondent 2: Yes, the application for the job is low and then the number of quality candidates also decrease It is really difficult for me to find the suitable candidates for the vacancies Interviewer: Is this consequence serious? Respondent 2: Sure It is extremely serious If I cannot find the quality candidate, then the quality of the whole team will go down Interviewer: Yes So what you think is the possible cause of the low compensation? Respondent 2: Well I know one reason is the limited salary structure of company Interviewer: Can you explain that? Respondent 2: Company has set the salary structure for each position and each position will have their own salary range This salary structure has been set since the first establish day When I became manager of the team, I did realize about that I have informed to management team but it does not work Interviewer: How does this cause lead to the problem? Respondent 2: Well That mean you cannot negotiate you salary if you want to work here The salary range have been created and you will be applied this salary range That may be the reason for the low salary of company Interviewer: I see Any causes may lead to the problem? Respondent 2: I think there may be one more reason It is the economic inflation As you may know, the inflation increase rate is quite high every year And the salary increase rate of company, actually of my team, is not high compare to the inflation rate So the salary of my team is not high Interviewer: Why the increase rate of you team is quiet low like this? 97 Respondent 2: Well you know that compensation represent a large amount of the operating cost of the whole company Therefore, management want to control the expense, in which compensation will be affected They just want a low salary increase rate Instead of that, they set a high target for employee If they cannot achieve the target, they cannot have bonus and commission This policy is beneficial for company only The target is too high Interviewer: Have you ever try to change it? Respondent 2: No, I not know how to change it Interviewer: Yes Any things else can lead to the problem? Respondent 2: Well one more reason for the low increase rate of employee Some of them even can not receive the increase rate Interviewer: What is the reason? Respondent 2: It is from the employees If their performance is not good, their productivity will not high So at the end of the year, they cannot achieve the good level in the evaluation process Therefore, their salary will be the same with last year Interviewer: Does any complaint with you about your decision on the evaluation I mean that did they have suspicion about your subjective attitude Respondent 2: No, of course I am fair with everyone and my team knows this And their result reflects their real performance in the whole year Interviewer: Yes Any causes that you think? Respondent 2: Well I think it is all Interviewer: What about the welfare group of company? I know that company does not have any welfare group like labor union? Do you think that is the cause for the low compensation for employees? There is no group to protect their right? Respondent 2: Actually, I not think so I not think welfare group can help in this case Interviewer: If these causes continue happen in the future, what impact that you think may affect company? Respondent 2: Well the consequence did really happen You can see some clear consequences like the high turnover rate of my team or the low ASI Interviewer: Yes What solutions that you think company should to solve the problem? 98 Respondent 2: I have tried but it does not work At this moment, I have not any suitable method Interviewer: Yes, thank you for your sharing Is there anything more you would like to add or discuss with? I’ll be analyzing the information you and others gave me and submitting a draft report to the organization in one month I’ll be happy to send you a copy to review at that time, if you are interested Thank you for your time Transcript Interviewer: I want to thank you for taking the time to meet with me today My name is Trang and I would like to talk and discuss with you more about the compensation of company The interview should take about 15-20 minutes I will be taping the session because I don’t want to miss any of your comments Although I will be taking some notes during the session, I can’t possibly write fast enough to get it all down Because we’re on tape, please be sure to speak up so that we don’t miss your comments All responses will be kept confidential Are there any questions about what I have just explained? Are you willing to participate in this interview? Respondent 3: Yes, Interviewer: Thank you, so now we start the interview Can you introduce again about yourself Respondent 3: I am Huy, technician of company Interviewer: Yes Thank you Huy for joining the second depth interview As the previous discussion, you expressed that the reason for company symptoms like high turnover rate, low ASI and low productivity is the low compensation of company, right? Respondent 3: Yes, I did say it Interviewer: So what you think about the benefit you received from company? Respondent 3: Well, It is quiet low compare to my current company In new company, the benefit consists of many interest thing like Family day, Christmas day health insurance for employees Interviewer: What about the salary rate increase every year? Respondent 3: Well it is normal It is not high and not low Interviewer: Yes, were the salary and benefit from company enough for your life? 99 Respondent 3: I am still single Therefore, this salary can enough for my current life But if I get married, it will not Interviewer: What you think about the consequences of the problem? Respondent 3: Well I think low compensation can have effect to employee emotion Interviewer: Yes, can you explain further? Respondent 3: I mean that low company can make employee feel stress and unhappy Then their emotion will be affect in a negative way They may feel depress with the low salary while they have been trying their best to perform their job Interviewer: Yes Do you think this consequence is serious? Respondent 3: Yes, I think so Interviewer: And have you ever seen this consequence in the company? Respondent 3: Yes I have seen it before Some of my co-worker has family And I know that they are not happy with the salary that they receive from company Interviewer: Well I see Anything else? Respondent 3: Well I not know Interviewer: What you think about the effect on the recruitment process of company? Is low salary can make it hard for the recruitment process? Respondent 3: Maybe If I know company will pay a low salary range, I may consider about my application Nowadays, there are many factors when choosing a job, in which compensation will surely play an important role Interviewer: In your opinion, how does this problem lead to this consequence? Respondent 3: In my opinion, some of team member will not happy with the salary and they may share this with their friend, even they may share it in the secret group on car industry Then some job seeker may know about that; and they may reconsider about apply for company’s vacancies Interviewer: Have you ever heard about this in company? Respondent 3: No, I just guest about that Because we have many close group in facebook, we can share the internal information in these place And I think it may be a reason for this Interviewer: Do you join these groups? 100 Respondent 3: Yes, some group Interviewer: Have you ever seen someone talk about company’s salary? Respondent 3: Yes, one or two times I did see it on facebook Interviewer: Yes And what about the brand image of company Do you think low compensation will have negative effect to brand image? Respondent 3: Well I guess it may have Interviewer: Can you explain further Respondent 3: Well company is trying to build a luxury image with professional service to customers If they heard from our employee complain something, even they not know if it is right or wrong, they will have a different look of our company Interviewer: Yes, I can understand that You mean that some employees may tell customer about our compensation systems And customer will have negative look of our company, right? Respondent 3: Yes, that is right Interviewer: Do you think that this consequence is serious? Respondent 3: Yes, it is definitely serious Interviewer: Have you ever seen this consequence in company? Respondent 3: I did see it one time Interviewer: Can you share more? Respondent 3: Well, I and one member used to be in a team to fix one car for customer According to company policy, we have to be friendly with customer Therefore, we always talk something to them to have a happy environment In that time, I heard my co-worker complaint with customer about his salary Actually, he always complains with us, with people in company Interviewer: Do you see the reaction of that customer? How he/she feel? Respondent 3: He seems a little bit surprise He thought our company will provide high salary because of the high price for the service in here Interviewer: Yes I see I will make customer feel bad about company And what you think about the causes of the problem? 101 Respondent 3: Well I am thinking about the paying structure of company As I know, new technician will be applied a salary range stated in the policy Interviewer: Can you explain further? Respondent 3: Well normally that applicant will have their right to negotiate salary It is different in our company The compensation has been set in the first establish day This mean the salary range of each position has been decided You have your right to choose to work for company or not with this salary Interviewer: Yes I understand Do you think the impact of this cause is significant? Respondent 3: Yes, I think it is quiet significant Interviewer: Are there any causes can lead to the problem? Respondent 3: One more thing is about the evaluation of the manager Sometime, I wonder if the result is exact or not Interviewer: You mean that the manager does not evaluate his team member fairy Respondent 3: Not usually Sometimes, I think he is quiet subjective in his evaluation I think the result of some person should be better When the result of one person is evaluated wrong, his salary will be affected It may be the reason for low salary of some member in the team Interviewer: Are this cause significant? Respondent 3: Well it is not really Interviewer: Do you think about the cause from the employee Because their performance is not good, so the salary they receive also not high Respondent 3: I think it may be one reason Interviewer: Yes, so any causes that you think may have effect? Respondent 3: I not know more Interviewer: Do you know about expense control of company? Respondent 3: I think the manager may be known about that I just a normal technician; hence I have no information about that Interviewer: Yes What about the inflation? Do you think it have effect on compensation Respondent 3: I not know It is so macro Interviewer: Yes What about the welfare group? Does company have any welfare group? 102 Respondent 3: No We not have any groups Interviewer: Do you think that the lack of these group, for example that the labor union, have any effect to this? Respondent 3: Yes, I guess that it may have Because there are no groups protect for employees right, company is easier to decide the salary range of employee Interviewer: Have you seen it in company? Respondent 3: I have not seen it But I guess it may happen in company Interviewer: Yes, if these causes continue happen in the future, what impact that you think may affect company? Respondent 3: Actually, I think the impact of these causes can be seen easily You can see some direct consequences like the high turnover rate or the low ASI Interviewer: What solutions that you think company should to solve the problem? Respondent 3: Well I think it is responsibility of manager They should find the best solution for that Interviewer: Yes, thank you for your sharing Is there anything more you would like to add or discuss with? I’ll be analyzing the information you and others gave me and submitting a draft report to the organization in one month I’ll be happy to send you a copy to review at that time, if you are interested Thank you for your time Appendix 9: Interview questionnaire with applying new set solution for technician team My name is Trang and I am conducting a research about the compensation of company We are planning to have a change with the compensation system of company There are two set solutions It would be appreciated if you could spend time to read the below solutions and decide which solutions you would like to choose by tick on square Set solution 1: Consist of two small solutions as below: Solution 1: Designing a new compensation plan by creating a new base salary range, keeping the same performance bonus and increasing benefits for employees Create new base salary range In this structure, your salary will be calculated as below: 103 Base salary = Pay rate * Basic salary In which: Pay rate: the rate for each level as mentioned in figure 19 Basic salary: The current basic salary is VND3,980,000 This basic salary is stipulated and adjusted by government every year The first level will be applied for those employees who have less than two year of working experiences After two year, each technician will be evaluated; and if they pass the evaluation step, they will enter the new level with the new salary range And this structure will be applied for both new comers and current technicians They will be applied the level base on the number of working experiences as well as base on the evaluation of managers And if there is any dispute, the decision from managers will be the final decision Level Pay rate Years of experiences 1.9 < years 2.3 From to years 2.7 From to years … … … The new expected base salary for technician team Keep the same with performance bonus With the set solution 1, the performance bonus of technician team will be kept the same since their base salary has been changed Increase benefits Company will create some more competitive benefits packages as below: First thing is about the recognitions and the reward performance By email an posting congratulations to employee who achieve great performance of the month, it can prove that company care about employee hard working effort and let they feel valuable to company And the second factor is to build an effective employee loyalty program With PSCL, company will create a five year or ten year loyalty reward for those who have been working for such a long time Along with the reward, company also gives employees unforgettable vacations as an honor gift for their contribution during the time Not only caring about employees, company also should care about their family Hence, it is suggested that company will buy Health Insurance for employees’ family as well because people’s priority is always their health 104 Then, company will offer employees a gym package at some heath club near the office To apply for PSCL, there is one fitness center next to Porsche building This center is named Fitness 24 Company can buy gym membership for employees to maintain their health after working time at company One more thing is providing the generous leave policy Instead of having a standard 12 annual leave days, company can provides some add on, for example, sick leave days per year for employees And the last thing is providing free food for employees one day per week Company will design a free food program that can bring delicious and hot food to employees at the lunch time Solution 2: Creating a suitable salary review plan Company will adjust the performance appraisal process to avoid the bias in manager evaluation Firstly, it is suggested to add the self-evaluation step for all employees of PSCL to have a more effective appraisal Secondly, it is essential to have a more than one evaluators as current process to avoid the bias and hallo effect of manager Therefore, company will let three persons to join the evaluation process, except employees The first person should be the manager of after sales department, who manage the whole team The next one should be the workshop foreman, who is the directly control of the technician team And the last one should be HR manager to have a general feedback with this employee The average score of the three mention person will be used to decide the overall rating for employee in the year The performance appraisal process will be conducted annually The result of each year will be used to decide the year-end bonus of employees And every two year, the result of the performance appraisal will be the key element for employees to enhance to new level If the result is from good, that employee will achieve a new level and a new base salary Set solution 2: Consist of two small solutions as below Solution 1: Designing a new compensation plan by keeping base salary range the same, changing the performance bonus and increasing benefits for employees Keeping base salary range the same With set solution 2, the base salary range of technician team will be kept the same Instead of that, the performance bonus needs to be changed to attract and keep technician stay loyal with company Changing the performance bonus The below table will illustrate the expected performance bonus for technician team, in which each level will achieve VND1,000,000 increase 105 Level Productivity Index Range 0-59 60-69 VND1,500,000 70-79 VND2,000,000 80-89 VND2,500,000 90-100 VND3,000,000 Table: The expected performance bonus for technician team Increase benefits Like set solution 1, benefits of employees should be concerned carefully with five add on benefits as mentioned in set They are recognitions and the reward performance, effective employee loyalty program, gym membership, generous leave policy and free food for employee And of course, the expense for implementing these benefits is not high compare to the huge impact it may bring to company Solution 2: Creating a suitable salary review plan Adjust the employee performance appraisal process This will follow these steps as set solution Firstly, company should conduct the self-evaluation for each employee to review and to give manager a broader perspective to understand their staff Secondly, the evaluation should also be conducted by three persons: one after sales manager, one workshop fore man and one HR manager And the overall score will be the average score of these three persons In general, this step will be implemented like set solution Adjust salary increase rate Different from set solution 1, company also should adjust the salary increase rate to catch up with the market And the salary increase rate will depends on many factors like the qualification of employees, their working experience, their potential for developing and the most important thing is the current market rate In general, the salary increase rate should be decided base on both the budget of department as well as the general market rate Questions: Which set solution would you like to choose? A Set solution B Set solution Thank you for your time! 106 Appendix 10: Application Form for Employment 107 108 ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TO NGUYEN QUYNH TRANG SOLUTIONS FOR LOW COMPENSATION OF TECHNICIAN TEAM IN PRESTIGE SPORTS CARS COMPANY MASTER OF BUSINESS ADMINISTRATION... Increasing stressful feeling Low compensation for technician team High turnover rate of technician team High recruitment and training cost Low technician s productivity Lack of engagement feeling... with company Low working motivation Lack of team collaboration Ineffective leadership Low ASI Low revenue of After Sales team Low profit Increasing mistake in task assignments Figure 8: The initial