Employee job satisfaction in vietnam banking industry the moderating role of ownership structure

This study aims to identify the factors contributing towards the job satisfaction of employees in Vietnam banking industry and explore the difference in level of employee satisfaction be

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Pham Ngoc Truong

EMPLOYEE JOB SATISFACTION

IN VIETNAM BANKING INDUSTRY:

THE MODERATING ROLE OF

OWNERSHIP STRUCTURE

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2018

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Pham Ngoc Truong

EMPLOYEE JOB SATISFACTION

IN VIETNAM BANKING INDUSTRY:

THE MODERATING ROLE OF OWNERSHIP STRUCTURE

MASTER OF BUSINESS (HONOURS)

SUPERVISOR: DR DOAN ANH TUAN

Ho Chi Minh City – Year 2018

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Contents

List of figures 3

List of tables 4

List of abbreviations 5

ACKNOWLEDGEMENT 6

ABSTRACT 7

1 Introduction 8

2 Literature review and hypotheses development 13

2.1 Vietnamese banking system and ownership structure 13

2.2 Definition and determinants of job satisfaction 14

2.3 Theories and analytical models 17

2.3.1 Maslow's Theory of Needs (1943) 17

2.3.2 Motivator/Hygiene Theory (Two-Factor Theory) 19

2.3.4 Need theory (McClelland) 20

2.4 Hypotheses and research model 21

2.4.1 Nature of work 22

2.4.2 Salaries and benefits 23

2.4.3 Recognition and motivation 23

2.4.4 Work relationship 24

2.4.5 Development opportunities 25

2.4.6 Job satisfaction of bank employees in state-own banks and private banks 26

3 Research methodology 29

3.1 Research process 29

3.2 Data collection 34

3.3 Data analysis methods 35

4 Results 37

4.1 Sample description 37

4.2 Cronbach’s Alpha and Exploratory factor analysis 38

4.3 Pearson correlation 42

4.4 Multiple regression analysis 43

4.5 Multiple group analysis 46

5 Discussion, Implications, Limitations and Conclusions 54

5.1 Discussion 54

5.2 Managerial implications 56

5.3 Limitations 57

5.4 Conclusion 58

REFERENCES 59

APPENDIX 67

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List of figures

Figure 1: Maslow's hierarchy of needs

Figure 2: Conceptual model

Figure 3: Research process

Figure 4: CFA result

Figure 5: SEM result

Figure 6: SEM – multiple group result

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List of tables

Table 1: State-owned banks in Vietnam

Table 2: Measurement scale of construct

Table 3: Sample description

Table 4: Scale analysis result

Table 5: Rotated Component Matrix

Table 6: Summary of defined factors

Table 7: Pearson correlations result

Table 8: Multiple regression model summary

Table 9: Multiple regression analysis result

Table 10: Regression analysis result (SEM)

Table 11: Multiple group global test

Table 12: Multiple group local test

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List of abbreviations

CFA: Confirm Factor Analysis

EFA: Exploratory Factor Analysis

JDI: Job Descriptive Index

KMO: Kaiser - Mayer – Olkin statistics

SBV: State bank of Vietnam

SEM: Structural Equation Modeling

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ACKNOWLEDGEMENT

Employee job satisfaction in Vietnam banking industry – The moderating role of ownership structure is the topic that I chose to study and do graduation thesis after two years studying master’s program at International School of Business, University of Economics Ho Chi Minh City

To complete the dissertation, firstly, I would like to extend my deepest thanks to Dr Doan Anh Tuan who has guided me directly throughout the process His ideas and support are valuable contributions to the thesis that are completed on schedule and demonstrate the perspective of the researcher

Secondly, I would like to thank to my colleagues at Sacombank, my sister, my friends

of colleagues and my colleagues of friends who helped me speed up the data collection process

Thirdly, I would like to thank the proposal defense committee (Dr Tran Ha Minh Quan, Dr Tran Phuong Thao, Dr Nguyen Phong Nguyen) for evaluating and contributing ideas to the thesis; Dr Nguyen Thi Mai Trang, Dr Dinh Thai Hoang who guided me research design and data analysis courses This knowledge related directly

to the implementation of the thesis

Finally, I would like to thank my parents for giving me the best conditions to complete the dissertation Thanks to my relatives and friends who have always been with me, encouraged me to complete this program and this study

Sincerely thank you!

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ABSTRACT

Research on employee satisfaction is very necessary in human resource management and the result is applied in practice to improve personal well-being and organizational effectiveness This study aims to identify the factors contributing towards the job satisfaction of employees in Vietnam banking industry and explore the difference in level of employee satisfaction between state-owned banks and private-owned banks in Vietnam This research has found out four determinants of employee job satisfaction including salaries and benefits, development opportunities, nature of work This study also shows in general that job satisfaction differs among bank employees in state-owned and private-owned banks Multiple regression analysis was used to test five main hypotheses while multiple group analysis was applied to examine the moderating effects of ownership structure on job satisfaction Based on the results, the study suggests some managerial implications for improving the business efficiency Comparative results provide theoretical evidence for the banking industry in general and managers in particular

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1 Introduction

For years, organizations have begun to focus on the concept of talent management with the goal of finding, identifying, developing, and maintaining high quality human resources for the business (Bratton & Gold, 2003) However, the detection and selection of external resources is so difficult that labor market must call it the "war" for talent selection For this reason, many businesses have chosen a path, a new theory aimed at a resource that is ready for future growth as well as for ensuring current productivity The understanding of "employees' minds and aspirations" is considered

as an important step in the talent management plan as well as building a working environment in line with the development strategy of the enterprise (Devi & Nagini, 2013)

Furthermore, it is no difficult to recognize that organizations cannot achieve their goals without quality personnel According to Kalleberg and Mastekaasa (2001), most companies have made great efforts in selecting applicants, however when these applicant become full time employee, few enterprises have sufficient resources to understand, sharing problems or aspirations of employees This leads to the decrease

of performance and increase of turnover rate Various studies also state that employee satisfaction plays a vital role in work performance and employee engagement, such as Spector (1997), Saari and Judge (2004), Luddy (2005) and Judge, Thoresen, Bono, and Patton (2001) To solve these problems, we need to improve the level of job satisfaction through increase the quality of some factors which directly impact This is the reason why it is essential and important to measure and research the job satisfaction through factors influencing motivation among employees This

Sinha and Shukla (2013) argue that private and public sector background is a significant element in determining the work style and culture of an organization, job satisfaction is influenced by private – public sector differences While the foundation which forms work culture for state-owned banks has been based on a concept towards social-economy aspect, private sector banks aim mostly for profitability of its business activities In other words, the banks, which adopt different organizational structure, have a tendency to craft different business objectives According to Hart, Shleifer, and

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Vishny (1997), bank strategies and performance vary due to the variety of customer penchants, targeted purchaser, scale, value chain, human resources which could be driven by bank ownership structure This leads to the differences in working style between those banks and the result of George (2015) show that there are differences in job satisfaction between employees in state-owned banks and private-owned banks Various studies have been conducted on employee satisfaction, however there are fewer studies focusing on the differences of employee satisfaction between private and public sector (Islam & Islam, 2014) In Vietnam, there is an outstanding research relate job satisfaction by Tran (2005) who measures employee satisfaction using the JDI scale and demand theory of Maslow (1943) and there are some researches which concentrate on banking sector as Phan (2015), Mai and Bui (2013) They investigate key factors affecting job satisfaction and examine the relationship between job satisfaction and employee loyalty of commercial banks in Ho Chi Minh city Moreover, Nguyen, Mai, and Nguyen (2014) examine the factors influencing organizational loyalty of banking employee in Ho Chi Minh city and Phan (2011) studied elements create positive value for employee commercials banks in Hue There are few studies emphasized the differences of employee satisfaction between public and private banks in Vietnam The research of Phan (2015) has mentioned differences

in the level of employee satisfaction between foreign banks and domestic banks (not Vietnam state-owned and private-owned banks) Thus, I expect to provide new insights significant gap with the moderating role of ownership structure on employee satisfaction in Vietnam banking industry

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The purpose of this study is to identify factors contributing towards the job satisfaction in banking industry and explore the difference in level of job satisfaction between state-owned banks and private-owned banks in Vietnam.This study will help candidates who are intending or are making the decision in choosing which banks to work have an overall picture of working environment and job satisfaction This research also provides suggestions for banks' management adjust the personnel policy

to retain talent and increase operational efficiency The comparative results provide theoretical evidence for the banking industry in general and managers in particular

To achieve the research objectives, this study will answer the following questions: (1), What are factors affecting employee job satisfaction in Vietnam banking industry? (2), Whether job satisfaction may be different for private-owned banks and state-owned banks employees in Vietnam?

This thesis contributes to the literature in several ways First, this research is related in spirit to the approach of Phan (2015) and Nguyen et al (2014) which provide an overall and detail picture of human resources management and job satisfaction of employees in banking industry and examine the relationship between job satisfaction and employee engagement Second, unlike these studies, which concentrate on the level of job satisfaction of employee in a specific bank or in banking industry in general, the research contributes to the literature exploring the difference in level of job satisfaction between two banking groups (state-owned banks and private-owned banks) in Vietnam Since some related studies investigate deeply the factors affecting job satisfaction as Bui (2013) and Phan (2015), this thesis further examine the moderating effect of ownership to contribute to the board of director of thanks in

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planning operational strategy, maintaining and developing excellent employees, making employees more satisfied, attracting talents, and limiting the "brain drain" from rival banks Different from the recent studies in which general ownership concentration is used to test ownership involvement, this paper mainly compares the smoothing behavior of government-controlled shareholders with that of their non-government counterparts This study also supports to applicants in depth view of the working environment, welfare, job satisfaction of employees in two banking groups to make the best choice for their workplace

This research is conducted in five stages and divided in five sections Section 1 - Introduction, gives the overall picture the study, introduces the research background, research problem, research objectives, research questions and the research contribution Section 2 - Literature review, presents earlier studies about the topic and related research Based on that, the author proposes a research model Section 3 - Research methodology covers the development of scales, sample selection, data collection tools, how the data collection process is conducted, and statistical data analysis techniques used in the research Section 4 - Results analyzes and interprets the results of data analysis in section 3 Section 5 – Discussion, Conclusions, Implications and Limitations concludes main findings of the research, discuss limitations of the study and recommend some management strategies

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2 Literature review and hypotheses development

2.1 Vietnamese banking system and ownership structure

National Bank of Vietnam was officially established under Decree No 15 / SL dated 6 May 1951 by President Ho Chi Minh Over the past six decades, the banking system

of Vietnam has been continuously developing and making important contributions to the process of protecting, building and developing the country Currently, National Bank of Vietnam has changed the name to State bank of Vietnam (SBV) which is the central bank under the Government of Vietnam This is the main financial regulatory agency which is responsible for monetary issues and management, advising on monetary policies to the Government of Viet Nam such as exchange rate policy, interest rate policy, foreign currency reserve management, composing laws on banking business and credit institutions, approving the establishment of banks and credit institutions, management of state-owned commercial banks

The State bank of Vietnam oversees the operations of 04 state-owned commercial banks, 01 public policy bank, 31 joint-stock (private) commercial banks, 04 joint-venture banks, 96 representative offices and branches of foreign banks, 27 financial and leasing companies, and 9 wholly-owned foreign banks

The 4 state-owned banks include Bank for Agriculture and Rural Development (Agribank), Industrial and commercial Bank of Vietnam (Vietinbank), Bank for Investment and Development of Vietnam (BIDV), Bank for Foreign Trade of Vietnam (Vietcombank) are state-owned banks with more than 50%

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Table 1: State-owned banks in Vietnam

(Source: State bank of Vietnam)

There are 31 private-owned banks in the whole system, however in this research we only focus on 6 biggest private-owned banks in term of total asset and charter capital which are: Sai Gon Thuong Tin joint stock commercial bank (Sacombank), Asia Commercial bank (ACB), Millitary Commercial joint stock commercial bank (MB), Vietnam prosperity joint stock commercial bank (VPB), Vietnam technological and commercial joint stock bank (TCB), Sai Gon commercial bank (SCB)

2.2 Definition and determinants of job satisfaction

A number of researchers have argued that an employee is considered to be satisfied in the workplace when he or she is fully happy with material and mental factors at work such as Graham (1982), Uddin, Luva, and Hossain (2012), Spector (1997) and Robbins (1993) Further, Vroom (1964) points out that "job satisfaction is a feeling in which employees are clearly oriented towards work in the organization and truly enjoying the job." According to Locke and Dunnette (1976) satisfaction is attitude which is expressed by feeling and trust, and Spector (1997) states that job satisfaction

is the attitude to job preferences in general and to aspects of work in particular In

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addition, Kreitner and Kinicki (2007) define job satisfaction as emotional responses to different aspects of the work According to Robbins (1993), job satisfaction is a positive state from a job evaluation or a work experiences Küskü (2003) argues that job satisfaction reflects the needs and desires of individuals to be responsive and the level of employee perception about their work This meaning is derived from Maslow (1943) demand scale theory that workers are satisfied when they meet demand from low to high Wright and Kim (2004) also point out that job satisfaction is a match between what employees want from work and what they feel from work In brief, job satisfaction can be defined as the positive level of emotion or attitudes that individuals have toward their job When one says that he has high level of job satisfaction, it means he really likes his job, feels good about it and appreciates his work

According to Smith, Kendall, and Hulin (1969), the level of satisfaction with the components or aspects of work is recognition of contributions during the work process Luddy (2005) emphasizes the elements that affect job satisfaction, including job position, supervisory level, relationship with colleagues, job content, treatment and the policies containing promotion, material conditions of the work environment, organizational structure Unsatisfactory employees will lead to low labor productivity, both physically and mentally Employees with job satisfaction will have less job change and less job retrenchment Abadi, Jalilvand, Sharif, Salimi, and Khanzadeh (2011) find that working place, expectation, intrinsic value impact much on job satisfaction while Al-Hussami (2008) believes job satisfaction comes from both the nature of work and other values that make life more comfortable According to Mulinge and Mueller (1998), Schaufeli, Bakker, and Van Rhenen (2009), minor

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Two years later, Descriptive Index Job Descriptive Index (JDI) by Smith et al (1969) measured one’s satisfaction in five facets: coworkers, the work itself, salary, opportunities for promotion and supervision The value and reliability of JDI are high valued both in practice and in theory (Mayer & Schoorman, 1992) In Vietnam, Tran (2005) conducted a study to measure job satisfaction using the JDI scale and demand theory of Maslow (1943) The main objective of this study was to test the validity of the JDI scales as well as to determine the factors that affect job satisfaction of employees in Vietnam The result had two new factors: welfare and working conditions

There are numerous definitions of job satisfaction and the impact factors of job satisfaction In general, job satisfaction is an employee's assessment of the issues involved in the performance of their work

2.3 Theories and analytical models

There are many different studies on job satisfaction Research on job satisfaction or work motivation is a research that study methods to please employees in many aspects This can be built from theories of motivation and job satisfaction The characteristics of these theories have many determinants that affect employee satisfaction therefore these are used to refer to the research model

2.3.1 Maslow's Theory of Needs (1943)

Maslow's hierarchy of needs was introduced in 1943 and the theory is based on his observation of human instincts This theory has assisted us to understand more logically regarding fundamental human needs as in the hierarchy of needs Specifically, he has classified various needs and arranged systematically into five

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distinctive categories, based on the levels of necessity from the lowest to the highest

in a tower The structure of the tower has five layers (figure 1), in which human needs are listed in a pyramid-like hierarchical order The basic needs at the bottom of the hierarchy must be satisfied before thinking of higher demands Higher demands will arise when all basic needs below (bottom of the tower) are met Five layers in Maslow's hierarchy of needs are: Physiological, Safety, Love / Belonging, Esteem and Self – actualization

From that we can conclude that, the difference in human needs will create the difference in job satisfaction and employee behaviors Therefore, to help employees get satisfaction at work, managers need to understand where employees stand in this hierarchy and behave in accordance with the specific characteristics of that level of hierarchy Some factors affecting job satisfaction nowadays stand at the top three level

of hierarchy: salaries and benefits, the compliance with the nature of work, the work relationship, the recognition & motivation, the development opportunities

Figure 1:

Self - actualization Esteem Love/Belonging Safety Physiological

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2.3.2 Motivator/Hygiene Theory (Two-Factor Theory)

Two-Factor Theory or Herzberg's Boby Motivation-Hygiene Theory was published by Frederick Herzberg, a psychologist This theory is based primarily on the results of investigative and analytical surveys conducted in Pittsburgh, Pennsylvania

Herzberg's studies provided data for him to propose a two-factor model:

 Demotivate factor: the factor of employee dissatisfaction at work in any organization, which may be due to: (i) The regime and policies of that organization, (ii) Inappropriate supervision, (iii) Conditions of employment do not meet the expectations of the employee, (iv) Wages and remuneration are unsuitable or contain many unfair elements, (v) Relationship with co-workers

"problematic", (vi) Relations with all levels (superiors, subordinates) do not achieve satisfaction

 Motivator factor: the agent of job satisfaction: (i) Achievement, (ii) The recognition of organizations, leaders, and colleagues, (iii) Responsibility, (iv) Advancement, (v) Growth

Most of the factors affecting job satisfaction are support motivate factors and against demotivate factors such as salaries and benefits, the compliance with the nature of work, the work relationship, the recognition & motivation, the development opportunities

2.3.3 The Equity Theory, John Stacey Adams (1963)

Adams' Equity Theory was originally developed in the 1960s, was named after the Behavioral psychologist John Stacey Adams Specifically, one of the most important

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arguments to be identified in Adams' theory is that, there have been undoubtedly various subconscious factors exist inside an employee's mind to evaluate and address the relationship with his current job and employers As such, this theory was mainly crafted on the belief that employees might feel slightly agitated when the perceived

"input" workflow and the corresponding "output" result are somewhat imbalanced As

a result, they would likely to loosen their effort, become discouraged or in other worse cases, cause disturbance within the workplace

Equity theory suggests that there should be a somewhat reasonable balance between such "input" and "output", for instance, an employee who could manage difficult tasks well, is highly seasoned in the field and express tolerance, enthusiasm should be rewarded with higher wages, welfare or even a psychologically intangible asset as recognition from the managers From then, it would fundamentally foster a strong and healthy bonding between the company and its employees, and overall, they will feel significantly contented and motivated towards organizational tasks Employees who make a positive contribution to the development of the bank, they deserve to receive worthy “output” include high salaries and benefits, the compliance with the nature of work, the warm work relationship, the recognition & motivation, the development opportunities

2.3.4 Need theory (McClelland)

David McClelland is an American psychologist In 1960 he argued that people are motivated by the three main components: achievement, affiliation and power

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 Need for achievement: People who have need for achievement are eager to accomplish challenging goals with their own efforts They like to be successful

in the competition and need to get clear feedback about their performance

 Need for power: people who have need for power often want to influence and control resources, people if they are beneficial to them

 Need for affiliation: people in this group often desire to have a close and friendly relationship with the people around The need for alliances makes people strive for friendship, preferring cooperation rather than competition, the desire to build relationships based on mutual understanding

The need for achievement, power and affiliation is also expressed through factors affecting job satisfaction such as salaries and benefits, the compliance with the nature

of work, the work relationship, the recognition & motivation, the development opportunities

2.4 Hypotheses and research model

Based on the results of previous studies on job satisfaction and the actual situation through survey in banking industry, this study selected the factors that affect job satisfaction as follows: the nature of work, salaries and benefits, recognition and motivation, work relationship, development opportunities Job satisfaction is the dependent variable that is impacted by the five independent variables mentioned above by employees of state own banks and private banks The change of these factors

in a positive or negative way will increase or decrease the level of job satisfaction of employees in banking industry

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2.4.1 Nature of work

The nature of work is one of the leading factors affecting the employee satisfaction (Hackman & Lawler, 1971) The characteristic of job such as the creativity, the repetition, the innovation will suit different group of employees Compliance with different job characteristics will help employees feel more comfortable and nurturing work for a long time Hackman and Oldham (1976) argue that every job can be broken down into five characteristics, including the skill variety: (i), Task identity - Employees will feel a higher level of meaning in their work when they are fully engaged in a task and understand it (ii), Task significance - Work is more meaningful

if it not only provides certain value to the person performing the task but also affects people outside the organization, including their family or friends (iii), Autonomy - Employees are able to determine success or failure when doing the job (iv), Feedback

- When getting the feedback, employees will understand what they need to do to improve performance in the future In Vietnam, Phan (2015) also shows that the role

of nature of work to the motivation of banking employees in Ho Chi Minh City The nature of work shows diversity, creativity, challenge, opportunity to promote personal skills When performing a job that requires a variety of skills, especially those skills that are relevant to the level and understanding of the worker, they will also find their work meaningful, making them more satisfied in the workplace This study testes the hypothesis H1:

H1: The more suitable nature of work, the higher level of job satisfaction

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2.4.2 Salaries and benefits

The salaries and benefits are shown in the needs of physiology and safety in Maslow's theory of need (1943) This is the most important factor for staff in the studies of Simons and Enz (1995) in the United States and Charles and Marshall (1992) in the Caribbean Welfare plays a vital role in determining the level of job satisfaction A good income and benefits policy must be demonstrated at the salary level which is consistent to the capacity and level of contribution Diversified welfare policy demonstrates the interest of the management for employees that makes employees feel satisfied, contributing and valued According to Tran (2005), welfare expresses the interest of enterprises to the life of workers that stimulates employees to work hard and stick with the business From the above arguments, this study tests the hypothesis H2:

H2: There is a positive relationship between salaries and benefits and job satisfaction

2.4.3 Recognition and motivation

According to Maurer (2001), motivation and recognition through rewards are one of the fifteen main determinants influencing employee well-being The lack of factors will seriously reduce the level of dedication of the staff to organizations Locke and Dunnette (1976) found that the recognition is the feedback for employees’ competence and that it is the reward of the employees’ performances Through these forms, employees can fix mistakes in the past as well as improve performances and set higher goals in daily demonstrations Recognition influences job satisfaction as it responds to growth expectations in psychology, equity and income The study of Mai and Bui (2013) also shows the similar result, the level of employee satisfaction is high

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when they receive recognition and motivation from colleagues and superiors Based

on these arguments, this study tests the hypothesis H3:

H3: There is a positive relationship between recognition and motivation and job satisfaction

2.4.4 Work relationship

Motivation is often spontaneous when employees have a good leader who they respect A company may have a good working environment, salary, welfare or remuneration policy for employees, but a poor leader can mitigate these advantages and lose the motivation of the subordinates According to Grant (2007), the motivation

of an employee depends a lot on what the leader does Each of their actions has a direct or indirect impact on the motivation of employees on both the positive or negative side and it depends on the seniority of management and leadership Willis-Shattuck et al (2008) state that poor communication between management and staff reduces motivation When employees feel lack of trust or lack of connection from the leader, they will be able to lose motivation and effort in the workplace

The relationship with colleagues is also very important in the level of job satisfaction

A working environment in which colleagues are open, friendly, willing to help, share experiences affect the motivation of employees and vice versa (Nguyen, 2010) Similar to relationship with superiors, staff should have the support from co-worker in daily work or in emergency, feel comfortable when interacting with colleagues Dedicated and trustworthy colleagues create value and satisfaction in the workplace From the above arguments, this study tests the hypothesis H4:

H4: There is a positive relationship between work relationships and job satisfaction

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2.4.5 Development opportunities

Training is considered a form of human capital investment and this investment is carried out by individuals or companies (Goldin & Katz, 1999) Employees look forward to participate in training programs to improve their skills and they are expected to use the skills and knowledge to apply in their jobs as well as to share with the co-workers Employees will be equipped with the knowledge and skills necessary

to help them repair weaknesses, improve performances and develop strengths (Gomez-Mejia, Balkin, & Cardy, 1995) Nowadays, many companies realize that the more they train their employees, the more their employees tend to stick with the company In addition, the knowledge that follows the training program helps employees to increase efficiency

According to Oosthuizen (2001), promotion is very crucial in work place and that has

a very high level of motivation Storey and Sisson (1993) argue that training and promotion is a sign of employee engagement Training and promotion also help reduce job rotation (Irshad & Afridi, 2007) It also reflects the organization's strategy

of relying on adding value to employees rather than cutting costs Leading companies recognize that development opportunities are a vital to motivate and retain key people

in organization (Bassi & Van Buren, 1999) From the above arguments, this study tests the hypothesis H5:

H5: There is a positive relationship between development opportunities and job satisfaction

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2.4.6 Job satisfaction of bank employees in state-own banks and private banks

There are some contradictory studies about employee satisfaction in the public and private sectors The study of Hossain (2000) reveals that employee satisfaction level

in public is higher than private banks Sinha and Shukla (2013) have not only showed the same result, but also emphasized many important aspects on why they were dissatisfied to work in private sectors banks The notable reasons are job security, ratio between salary and work experience was not aligned, insufficient recognition from upper managers with completed tasks, and monotonous nature of work environment For state-owned banks, welfare policies have been transparently defined and reasonably enforceable by the laws, including but not limited to retirement plan, pensions, gratuity as well as other welfare concerns for the employees to be effectively adopted The welfare policies as in private sector banks are arguably considered to be poorly planned and executed, which consequently explains why employee turnover is rather substantial while the job security is quite the opposite Khalid and Irshad (2010) state that most private banks would not provide adequate job security, and would dismiss its current employees, whose working performance is deemed not to be optimal or because of unfavorable market conditions

On the other hand, Islam and Islam (2014) has concluded that private bank employees have better job satisfaction level than the ones who have been working in state-owned banks due to the fact that they find better working facilities to be enjoyable, as well as the notable support from other colleagues Bureaucracy and low dynamic environment are also of the reasons why many people feel uncomfortable when working in the public sector (Wright, 2001) Boardman and Vining (1989) indicate that the

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performance of private sectors is better than public sector Islam and Islam (2014) argue private-owned banks are better for employees who proactively seek for more opportunity to develop working performance, of which would subsequently reinforce job satisfaction level at work It is stated in the study from Selvaraj (2009) that private banks were more successful than state-owned banks because they have scientifically implemented initiatives for Total Quality Management, human resources solutions, customer focus and commitment from higher-level directors According to D'souza (2002), most public banks adopt salary model based on employee’s seniority, in other words, the longer the contributed years, the better salary payment, as well as the compensation gap between different employees is rather low Private banks would basically exercise the opposite practice, specifically the salary is calculated and assessed based on work performance, hence the larger compensation gap between different employees and there would be fewer reward payments for long-term tenure The study from Shrivastava and Purang (2009) shows both two aspects Employees in private banks have higher satisfaction in development opportunities, relationship and income while job security is the reason why employees in public banks prefer Based

on the above-mentioned inconclusive arguments, we propose a significant difference

in satisfaction of bank staffs between private and public banks but do not establish any direction for this comparison The sixth hypothesis is formulated as follows:

H6: Job satisfaction differs among bank employees in state-owned and private-owned banks

Based on the previous studies and the hypotheses constructed from H1 to H6, the researcher examines the effects of the moderating role of ownership structure on the

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relationship between each factor and job satisfaction This is also the contribution of the study compared to previous researches The H6a, H6b, H6c, H6d, H6e hypotheses are built as below:

H6a: The relationship between job satisfaction and nature of work differs between bank employees in state-owned and private-owned banks

H6b: The relationship between job satisfaction and salaries and benefits differs between bank employees in state-owned and private-owned banks

H6c: The relationship between job satisfaction and recognition and motivation differs between bank employees in state-owned and private-owned banks

H6d: The relationship between job satisfaction and work relationship differs between bank employees in state-owned and private-owned banks

H6e: The relationship between job satisfaction and development opportunities differs between bank employees in state-owned and private-owned banks

According to the 6 hypotheses, the research model used in this study is presented

Salaries & Benefits

Recognition & Motivation

Ownership structure

H6a

H6b

H6c

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3 Research methodology

The study was conducted on the basis of a combination of qualitative and quantitative research This section presents four main components of the research methodology: research process, data collection, data analysis method and measurement scale of construct

Pilot study Revision

Draft

questionnaire

Research model

Final questionnaire

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Main survey and data analysis:

In the first stage – generation of items, key issues of the study were discussed include

the role of employee satisfaction in the success of organizations, the factors that affect employee satisfaction, and whether job satisfaction differs among employees in public and private sector Derived from the fact that the researcher is working in the banking industry and the researcher recognized the very important role of employee satisfaction in bank performance, the differences in feeling of happiness between colleagues who work in some private-owned banks and state-owned banks, the researcher decided to choose this topic to investigate and explore

Research problems were identified based on this practical situation, the overall of development of Vietnam banking industry and the limitation of previous studies in Vietnam From the issues raised, research objectives and research questions were formulated including: identify factors contributing towards the job satisfaction in banking industry and explore the difference in level of employee job satisfaction between state-owned banks and private-owned banks in Vietnam

Regression Analysis

Reliability analysis/EFA

A survey of 326

respondents

group analysis Conclusions

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The scope of this research were 4 state-owned banks and 6 private-owned banks in Ho Chi Minh City, Binh Duong, Dong Nai and Dong Thap province and the data was collected from July to September 2018 The respondents are friends, colleagues, friends of colleagues who work in banking industry 40% of private-owned bank data came from my colleagues who work at Sacombank’s head office 35% of state-owned bank data came from my sister’s colleagues who are Director of Accountant at BIDV Dong Thap branch The literature review following by the 6 hypotheses and research model also were conducted in this stage

In the second stage - Preliminary research and pilot study, qualitative research

method was used to conduct preliminary research, interviewing a number of employees who are the chosen representatives of BIDV and Sacombank ‘staff BIDV represents the state-owned bank group while Sacombank represents private bank group Individuals interviewed will answer questions in the pre-designed questionnaire Sample size was 10 (n = 10) Preliminary research results were used to complete the research questionnaire and research model

Next, the pilot test was used to make sure all the questions are understood deeply and correctly This helped to ensure that the source data is unmistakable, made the analysis and running of the model more accurate Through the pilot test, we knew what confused questions are, this helped us correct before undertaking large scale survey The questionnaire in the pilot test was sent to 20 respondents including: 2 managers, 1 director, 7 employees at Sacombank and BIDV Besides, the questionnaire is discussed with two experts in the field of human resources management Those are: Ms Ly Tu Nhu – Head of Human Resources department,

emphasize the objectives of comparing the employee satisfaction in the two banking

groups in the questionnaire It will help the interviewee understand deeply the meaning and participate more actively For the rest, the experts assessed 90% of the

questionnaire comprehensively and fully reflected the purpose of the survey 10% of

the questionnaire relates to development opportunities and recognition & motivation

are displayed at the Appendix A The final test of spelling, meaning and grammar

errors also was conducted in this stage

Quantitative research method will be used to collect the employee's opinion on the

level of satisfaction for the current job For the selected sample to be representative of

the overall population, the respondents will be randomly selected

After preliminary research and pilot study, the research chose the measurement scale

of construct as below:

Table 2: Measurement scale of constructs

Construct

(2) suitable to level of education and specialty (3) allows to use skills and talents

(4) under high pressure

(Hackman & Lawler, 1971), (Hackman & Oldham, 1976), (Smith et al., 1969)

2 Salaries and Benefits (1) suitable to the nature of

work

(Charles &

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(2) fair (3) affordable for daily life (4) good benefit policy

Marshall, 1992), (Smith et al., 1969), (Tran, 2005)

Motivation

(1) recognized contributions (2) receive rewards when completing tasks and exceed the plan

(3) are motivated at work

(Maurer, 2001), (Locke & Dunnette, 1976),

(Smith et al., 1969)

4 Work relationship (1) friendly and supportive

(2) work efficiently with your colleagues

(3) share your problems with your colleagues

(4) suitable leadership style of supervisors and managers

(Grant, 2007), (Willis-Shattuck et al., 2008), (Smith

(Gomez-Mejia et al., 1995), (Oosthuizen, 2001), (Storey &

Sisson, 1993), (Smith et al., 1969)

No Dependent Construct Observable variables

work

(2) Enjoy job (3) Learn and have potential growth

(4) Feel important about job

(Smith et al., 1969), (Spector, 1997), (Tran, 2005)

In the third stage – survey and data analysis: The official survey was sent to 500 bank

employees in four provinces the city of South Vietnam (Ho Chi Minh city, Dong

Thap, Binh Duong and Dong Nai province) with sample random sampling method

21 questions were used to measure 18 variables The 5-point Likert scale with the choice from 1 to 5 as: (1), Strongly disagree (2), Disagree (3), Neutral (4), Agree (5), Strongly agree

About determining the number of samples for the study, for the explore factor analysis, Hair, Anderson, Tatham, and Black (1998) showed that the minimum sample size is 5 times the total number of observed variables For multiple regression analysis, according to Tabachnick and Fidell (2007), the minimum number of samples

to be obtained is given by the formula: n = 50 + 8*m (m: independent variables) where m is the number of independent factors The research had 22 items to measure 6 constructs therefore the research should have at least 110 observations Due to the fact that this study has carried out multi group analysis to explore the difference of job satisfaction of employee between two banking groups, the researcher collected 273 samples

The questionnaire was sent to respondents in two ways: online and direct In the online method, the researcher conducted surveys through Google forms and sent them

to colleagues (working in the banking industry), friends of colleagues and colleagues

of friends who work in banks in 4 city and provinces In this method, 120 samples

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were collected In the direct collection method, the researcher sent a paper questionnaire to 50 employees as co-workers at Sacombank and 30 employees at BIDV Dong Thap branch where my sister is a head of accountant department The paper questionnaire also were sent directly to my friends of colleagues and to colleagues of my friends who work at Agribank, Vietinbank, Vietcombank, ACB,

MB, SCB, TCB, VPB

The total samples were 326 There are 53 samples (equivalent to 16.2% total samples)

of responses which were eliminated The main reasons are: (i), the answers were not enough information (ii), there are some irresponsible answers (iii), there are many repeated answers for all questions 272 samples were conducted in the official data analysis

3.3 Data analysis methods

The SERVQUAL service quality scale was used as a multivariate scale with 5 factors and 18 observations to assess the job satisfaction of employees in banking industry The reliability of the scale is estimated by the Cronbach's alpha coefficient (from 0.6

is acceptable) whereby unsuitable variables are eliminated if the correlation coefficient (Corrected Item – Total correlation) less than 0.3 (Nunnally & Bernstein, 1994) The reliability test redefined the components in the scale by exploring factor analysis (Nguyễn & Nguyễn, 2009) The Exploratory Factor Analysis (EFA) method helps us evaluate two important validity of the scale: convergent validity and discriminant validity EFA was used to reduce a set k of observation variables into a set F (F <k) of more meaningful factors Meyers, Gamst, and Guarino (2016) mentioned that in factor analysis, the method of extracting Pricipal Components

36

Analysis and Varimax rotation are the most commonly used method According to Hair (2010) factor loading is the indicator to ensure the significance of EFA and when the factor loading is higher than 0.5, observed variables were statistical significance The condition for applying factor analysis is that variables are correlated To determine how correlated variables are, we use Barlett's test for hypothesis testing: H0: The null hypothesis

H1: The alternate hypothesis

We expect to reject the null hypothesis, that is, accept the hypothesis H1, variables are related This is achieved when the p value after the test is less than the significance level α At the same time, factor analysis is considered appropriate when the KMO (Kaiser - Mayer - Olkin) value ranges from 0.5 to 1, where correlations are big enough

to enable factorial analysis

Pearson correlation analysis would be performed determine whether or not there is a linear relationship between dependent and independent variables When the significance level of the regression coefficient is less than 0.05 (Sig <.05), the reliability is 95%, which is statistically significant correlation between the independent and dependent variables

Multiple regression analysis is used to evaluate the suitability of the model R-squared result is used to evaluate the relevance of the research model F test in the variance analysis table will indicate whether the dependent variable is related to the total independent variable (Sig <.05, the constructed model is consistent and vice versa) Multiple group analysis was used to test the moderating effect of ownership structure

on job satisfaction between those banking groups In the process of conducting

37

multiple group analysis, the Structural Equation Modeling (SEM) technique would be used to test again the relationship between dependent and independent variables Some criteria for evaluating the SEM model are: 1 <Chisquare/df <3, GFI, TLI, CFI values> 0.9 (Hair et al., 1998) and RMSEA <0.05 (Taylor, Sharland, Cronin, & Bullard, 1993) SPSS and AMOS were the software program for the data analysis

4 Results

The research finding of testing 6 hypotheses is showed in this section This includes the descriptive statistic, reliability test, exploratory factor analysis, Pearson correlation, multiple regression analysis and multiple group analysis

4.1 Sample description

273 questionnaires were collected in this study from 10 banks from 4 cities and provinces in the South of Vietnam There were 06 private-owned banks, including: Sacombank, ACB, MB, SCB, TCB, VPB and 04 state-owned banks, including: BIDV, Vietinbank, Vietcombank, Agribank 112 questionnaires were collected from state-owned banks and 161 questionnaires were collected from private-owned banks The most common age in the survey samples was about 25 to 35 years old (nearly 76%) 46.52% were male while the prevalence was university graduation Most of the respondents have 3-10 years of experience working at banks (62.27%) and the popular salary ranges from 13 to 20 million VND (43.32%) Few surveyors hold managerial positions, 83.88 % are employees The detail of descriptive statistic is presented in Table 3

Table 3: Sample description

23

207

43

8.42 75.82 24.18

University Master Doctorate

0

From 1 to 3 years From 3 years to 10 years Above 10 years

From 7,000,000 VND to 13,000,000 VND

From 13,000,000 VND to 20,000,000 VND

11.25 Current Position Employee

Supervisor/Manager Director

229

28

16

83.88 10.26 5.86

Private-owned bank

112

161

41.03 58.97

4.2 Cronbach’s Alpha and Exploratory factor analysis

The reliability of the scale was evaluated by the internal consistency method using the Cronbach's Alpha coefficient The NW4 and WR4 had Correlated Item Total Correlation lower than 0.3 which was removed before exploratory factor analysis The Cronbach’s alpha coefficient of the rest were higher than 0.6 and 16 out of 18 observable variables were qualified for EFA

About EFA for in dependent construct, the KMO value was 0.72, within the required range 0.5 -1.0 and the Sig result was 0.000 which showed there were correlation of

39

variables and significance of relations The EFA for these variables was qualified The EFA presented that there were 5 factors extracted and total variance extracted was 72.066 % (higher than the standard of 50%) Five factors were explained including: Factor 1, salaries and benefits explained 24.04% of variance This includes the suitability of the nature of work and the income, the fair compensation policy, sufficient income level and the satisfaction with salaries and benefits policy Factor 2, recognition and motivation explained 12.67% of variance This includes the valuation

in contributions, the recognition through rewards and the motivation at work Factor 3, nature of work explained 12.78% of variance This includes the creative, not repetitive work, the suitability to level of education and specialty, the skills and talents are applied in work Factor 4, work relationship explained 10.79% of variance This includes the friendly and supportive colleagues, the coordination with colleagues and the emotional sharing Factor 5, development opportunities explained 7.8% of variance This includes the participation in specialized and skill courses, the interaction with experts and board of directors, the empowerment in planning and decision making The eigenvalues of 5 factors are 1.248 (higher than 1) while loading factor coefficients bigger than 0.5 The rotation matrix results show that 16 observation variables were grouped into six factors, all of the observed variables having factor loading factor greater than 0.5 The detail of factor analysis result and total variance explained 05 factors are showed in Table 4 and Table 5

Table 4: Scale analysis result

Correlated Item Total Correlation

Cronbach’s Alpha

Factor loading

% of variance