Motivating employees at bank for investment and development of vietnam JSC (BIDV) = tạo động lực cho người lao động tại ngân hàng thương mại cổ phàn đầu tư và phát triển việt nam

Achievement shows successful completion of work, having a good idea or solutions to problems, made revenue for the company… Achievement is at the fourth level in Maslow hierarchy of need

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN HỒNG HẠNH

MOTIVATING EMPLOYEES AT BANK FOR INVESTMENT

AND DEVELOPMENT OF VIETNAM JSC (BIDV)

TẠO ĐỘNG LỰC CHO NGƯỜI LAO ĐỘNG TẠI NGÂN HÀNG THƯƠNG MẠI CỔ PHẦN ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM

(BIDV)

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2019

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN HỒNG HẠNH

MOTIVATING EMPLOYEES AT BANK FOR INVESTMENT

AND DEVELOPMENT OF VIETNAM JSC (BIDV)

TẠO ĐỘNG LỰC CHO NGƯỜI LAO ĐỘNG TẠI NGÂN HÀNG THƯƠNG MẠI CỔ PHẦN ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM

(BIDV)

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS TRẦN KIM HÀO

HÀ NỘI - 2019

DECLARATION

The author confirms that the research outcome in the thesis is the result of author‘s independent work during study and research period and it is not yet published in other‘s research and article

The other‘s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration

Date………

ACKNOWLEDGEMENT

First and fore most I offer my sincerest gratitude to all Professors of Hanoi School

of Business, Vietnam National University (HSB, VNU) for giving me knowledge that is used as basement for my thesis

I am heartily thankful to my supervisor, Dr Tran Kim Hao whose precious patience, valuable guidance and support from the initial to the final level enabled

me to develop an understanding of the subject, thereby applying knowledge into real cases throughout my thesis Without his encouragement and effort, this thesis would not have been completed or written One simply could not wish for a better

or friendlier supervisor

During the implementation process, due to limitations of experience and research time, my thesis has unavoidable mistakes I would like to receive the comments of the professionals, and friends to complete thesis better

<Hanoi,……./…./201… >

<Nguyen Hong Hanh>

TABLE OF CONTENT

ABBREVIATIONS i

LIST OF TABLES ii

LIST OF FINGERS iii

INTRODUCTION 1

CHAPTER 1: THEORY BACKGROUND ON EMPLOYEE MOTIVATION 8

1.1 Overview of motivation 8

1.1.1 Motivation and employee motivation 8

1.1.2 Role of employee motivation 9

1.1.3 Types of motivation 10

1.1.4 Motivation process 10

1.2 Motivation theories 11

1.2.1 Maslow's hierarchy of needs theory 12

1.2.2 Two-factor theory of Herzberg 14

1.2.3 McClelland‘s Achievement Theory 17

1.2.4 Adams‘s Equity Theory 19

1.3 Research model for analyzing employee motivation 21

1.4 Experience about motivating employees of some organizations 23

CHAPTER 2: CURRENT SITUATION OF EMPLOYEE MOTIVATION AT BIDV 26

2.1 Overview of BIDV 26

2.1.1 General information 26

2.1.2 Organizational structure 27

2.1.3 Business line 28

2.1.4 Financial status: 28

2.1.5 Labor force structure 29

2.1.6 Summary of policies and changes to policies for employees 32

2.2 Analyze and evaluate current situation of employee motivation at BIDV – head

office 36

2.2.1 Respondent‘s profile 36

2.2.2 Analyzing the situation of motivate employees at BIDV 37

Achievement is an important factor to motivate for employees to work better and contribute for the success of the company Achievement shows successful completion of work, having a good idea or solutions to problems, made revenue for the company… Achievement is at the fourth level in Maslow hierarchy of need, after the physical, safety, and social needs, but it is internal esteem need So, it is necessary for all company to makes their employees get achievement in working progress 46

2.2.3 Evaluate the employee motivation at BIDV 51

CHAPTER 3: RECOMMENDATIONS FOR IMPROVING EMPLOYEE MOTIVATION AT BIDV 55

3.1 Development of BIDV toward 2020 55

3.2 Solutions and recommendations to enhance employee‘s motivation 57

3.2.1.Determining the needs of employees 57

3.2.2 Improving and completing the Key Performance Indicators (KPI) 57

3.2.3 Adjusting the daily workload 59

3.2.4 Set up the suitable training course and training policy to improve knowledge and skill for employee 62

3.2.5 Providing promotion opportunities to employees‖ 64

3.2.6 Setting up the encouragement culture in internal bank itself 70

3.2.7 Encouraging the employees to motivate themselves 72

3.2.8 Maintaining and continuously developing BIDV‘s strengths in motivation 73

CONCLUSION 74

LIST OF REFERENCE 75

APPENDIX 1 78

APPENDIX 2 79

APPENDIX 3 83

ABBREVIATIONS

BIDV Bank for Investment and Development of Vietnam JSC

HR : Human Resources

HRM : Human Resources Management

HSB : Hanoi School of Business

KPI : Key Performance Indicator

KPIs : Key Performance Indicators

MBA : Master of Business Administration

LIST OF TABLES

Table 2.1: Financial performance of BIDV from 2015 to 2017 28

Table 2.2: List of Board of Directors and Management of BIDV 31

Table 2.3: BIDV's employee structure in gender 36

Table 2.4: BIDV's employee structure in age 36

Table 2.5: BIDV's employee structure in qualification 37

LIST OF FINGERS

Figure 0.1: Research process 5

Figure 1.1: Motivation process 11

Figure 1.2: Maslow's Hierarchy of Needs 12

Figure 1.3: Two factor - theory 14

Figure 1.4: Research model 23

Figure 2.1: Organizational structure of BIDV 27

Figure 2.2: Labor structure of BIDV 30

Figure 2.6: Employee's assessment about BIDV‘s working conditions 38

Figure 2.7: Employee's assessment about BIDV‘s supervision 39

Figure 2.8: Employee‘s assessment about BIDV‘s salary 40

Figure 2.9: Comparison of average income of banks during the first 6 months of the year 2018 41

Figure 2.10: Employees‘ assessment towards BIDV‘s Policy and administration 42

Figure 2.11: Employees‘ assessment towards BIDV‘s interpersonal relations 44

Figure 2.12: Employee's assessment towards BIDV‘s job security 45

Figure 2.13: Employee's assessment toward BIDV‘s achievement 46

Figure 2.14: Employees‘ assessment towards BIDV‘s recognition 47

Figure 2.15: Employees‘ assessment towards BIDVs advancement 48

Figure 2.16: Employees‘ assessment towards BIDV‘s work itself 49

Figure 2.17: Employees‘ assessment towards BIDV‘s personal growth 50

Figure 2.18: Overall employees‘ motivation at BIDV 51

BIDV was established on 26 April 1957 as Bank for Construction of Vietnam, under the Ministry of Finance At 01 May 2012, BIDV has successfully equitized, converting into Joint Stock Commercial Bank for Investment and Development of Vietnam During the years operating in Vietnam, the bank had a lot of achievements and breakthroughs At the present, BIDV is one of the biggest and strongest banks

in Vietnam In the recent years, affected by many factors both in outside such as unstable economy, increasing inflation and difficult stock market, BIDV‘s policies just focused on keeping the stable status for both of employees and the bank but not

on boosting the employees‘ motivation and morale And inside, that the bank has some internal problems such as risk in career and human policies has led to the decreasing of many employees both at staff and managers According to the bank's quarterly financial report for the fourth quarter of 2017 at nearly 20 banks including both private and state-owned banks, three banks saw a sharp drop in the number of employees last year, including BIDV, NCB and SHB Remarkably, BIDV last year increased the staff expense from 24.8 million dongs per month to 28.6 million

dongs, up nearly 4 million per month Nevertheless, the number of employees here has dropped sharply last year The bank‘s experienced employee has left, this led to employee becoming more rejuvenated and more inexperienced while it was continuously expanding and recruiting

Hence, to improve productivity, job performance as well as the quality of human resource for BIDV to meet the upcoming challenges, the managers should focus on finding the solutions to solve the existing issue – employee motivation Therefore,

through the topic: “Motivating employees at Bank for Investment and Development of Vietnam JSC”, the researcher focuses on studying current

motivation situation of the bank, therefore, giving recommendations to improve

employee motivation at BIDV

2 Literature review

Employee motivation may differ for various people from organization to organization Studying employee motivation is very necessary in many enterprises and organizations to make them get deeply involved in their jobs There are many theories about motivating employees in the world for a long time The researchers have approached to the employee motivation in two ways: the human needs such as Maslow, Herzberg and the employee‘s behaviors such as Adams, Vroom, Skinner and so on Inherit the above theories and practices of employee‘s motivation, some studies have point out the motivation factors and the ways to motivate employees Daniel H Pink is an author of "Drive – The Surprising Truth About What Motivates Us", which is the best - seller The content of this book is a new thesis on the motivation of human work in the 21st century, which the author considers that organizations and enterprises have not exploited and properly evaluated its role because of depending too much on the old motivational models In Drive, he reveals the three elements of true motivation:

*Autonomy—the desire to direct our own lives

*Mastery—the urge to get better and better at something that matters

*Purpose—the yearning to do what we do in the service of something larger than ourselves

Actually, there should be a combination of all three types of motivation 1.0, 2.0, 3.0 under different circumstance It is necessary to combine all three types of motivation at the same time

Ahmed A Al Araim, (2013), Exploratory Study on Employees‘ Motivation in The Private Banking Sector, International Journal of Organization Theory and Behavior The researcher used a framework which contains monthly salary, age of employee, gender of employee, relationship with supervisor, relationship with colleagues, job autonomy, personal financial management skill, education level of employee, experience in banking sector The results of this study provided some insights into the importance of employees‘ monthly salaries in boosting motivation Further, this study showed the positive impact that employees‘ relationship with their colleagues has on motivation

Master thesis: Doan Thi Thanh Tam, (2013); Enhancing Employee Motivation At Anphanam International Co., Ltd, Hanoi, Vietnam In this thesis, the author used Herzberg‘s motivation model which consisted of Hygiene factors and Motivation factors She exposed the relationship among 3 models of Maslow, Herzberg, and Adam Based on the Herzberg‘s model, the author studied motivation situation at chosen company then proposed suitable recommendations to solve their problems Besides, the author has also read and researched some studies such as: Tran Thi Thu

Ha, head of human resources of Vietnam Joint Stock Commercial Bank for Industry and Trade, motivating employees at Viettinbank; Vu Hong Van, Thai Nguyen university, motivating employees to improve the effective of managing human resources at Song Cong Diesel Limited Compnay and other studies on newspaper, magazine, which is researched on the topic of motivating employees

3 Aims of research

This research aims to achieve the following objectives:

 To review theoretical background on employee motivation.‖

 To identify the dimensions and attributes to analyze employee motivation.‖

 To investigate and analyze the current situation of employee motivation at BIDV

 To propose suitable solutions to enhance motivation for employees at BIDV

4 Objects of research

The research‘s object is studying motivating employees at Bank for Investment and Development of Vietnam JSC (BIDV) and giving recommendations to improve employee motivation policies in short term and long term

5 Scope of research

The research took place within the Head Office of BIDV

Time period for the research: Secondary data will be collected in the period of 2015-2017, primary data will be collected from January to October 2018

6 Research methodology

6.1 Research process

Figure 0.1: Research process

6.2 Data collection

As being showed at Figure 1 above, data were collected from 2 sources consisting

of primary data and secondary data.‖

a Secondary data

Research objectives

Theoretical background

Factors/ Dimensions of employee‘s motivation

Secondary data Annual report

Other relevant reports

Data collection

Recommendations

Primary data In-depth interviews

Survey

Analyze the current situation of

motivation

Secondary data will be collected from the company‘s website and annual reports, textbooks, journals and searching Internet; magazines, newspapers and other

researches related to employee motivation

to think about the answers They were given a pseudonym for the purposes of writing the research findings and for confidentiality.‖

to reduce the errors in survey process

- ―Questionnaire design: The questionnaire was designed to two core parts:‖

“ Part 1: Personal information The purpose of section one was to collect the

personal information of employee who participated in the survey, the information included age, gender, number of working years, etc Based on part one, the researcher had an overview about employees at BIDV.‖

“ Part 2: Current motivation level of employees at the company In this part,

the researcher used questionnaire designed aiming at collecting data to analyses current satisfaction level of employees about motivation policies and motivation factors Besides, the respondents were asked to propose the solutions to enhance the

motivation policy for BIDV The questions were designed following 5-point Liker scale in which:

At level 1: Totally disagree

7 Thesis structure

The thesis was divided into four main chapters as follows:

―Chapter 1: Theoretical background on employee motivation‖

―Chapter 2: Current situation of employee motivation at BIDV‖

―Chapter 3: Recommendations for enhancing employee motivation at BIDV‖

CHAPTER 1 THEORY BACKGROUND ON EMPLOYEE MOTIVATION

1.1 Overview of motivation

1.1.1 Motivation and employee motivation

In the process of working, the motivation of each individual makes the difference in working attitude of the employees Many contemporary authors have also defined the concept of motivation

Motivation has been defined as: the word motivation is derived from the word

―motivate‖ which means to move, to push or persuade to act to satisfy a need It is the process of stimulating people to actions to accomplish the goals (Butkus and Green, 1999); an internal drive to satisfy an unsatisfied need (Higgins, 1994); the reason why people do the things they do, and in a work setting, motivation is what makes people want to work (While Reece and Brandt, 1990)

Motivation is defined by Robbins (2013) as the process by which a person‘s efforts are energized, directed, and sustained toward attaining a goal When someone is motivated, he or she will persistently exert high effort in a direction that benefits his

or her organization in order to achieve goals While, in the same manner claimed that in order to achieve goals, individuals must be sufficiently stimulated, have a clear picture on what to achieve, and have commitment to put utmost effort for a long enough period of time and never give up in realizing their aim quoted as Yudhir (2012) saying

In the author‘s view, motivation is the processes that account for an individual‘s intensity, direction, and persistence of effort toward achieving a goal

Hence to engage in the practice of motivating employees, employers must understand the unsatisfied needs of each of the employee groups Bruce and Pepitone (1999) argued ―Helping employees attend to their own motivational needs

is one of the most powerful interventions employees can make to increase their organization‘s potential for success‖ Motivating employees creates the double

benefit for encouraging the employees to get their goals and increasing the effective

of organization

1.1.2 Role of employee motivation

The importance of motivation is obvious and no needed to doubt about People always need motivation in order to reach their goals In fact, it is one of the most important and driving factor for reaching the goals In other word, it is the reason why everybody attempted to reach the aim In fact, the role of employee motivation‘s not only necessary for organization and themselves but also for society.‖

 For employees: People have always been existence of the needs to satisfy both physically and mentally When employees feed, they are met their demand or another words, when they are highly motivated can greatly improve a business When employees are motivated, they are more likely to impact positive to productivity, working atmosphere and many other areas Besides, motivation helps employee perfect themselves When employees are motivated rightly, they tend to put more effort into the learning process, summarize the experience in the job, thereby improving knowledge and improve themselves.‖

 For organizations: The organizations have effective employee motivation strategy will get better productivity (amount produced per employee) This can lead to lower unit costs of production and so enable a firm to sell its product at a lower price It also lower levels of absenteeism as the employees are content with their working lives as well as lower levels of employee turnover (the number of employees leaving the business) - this can lead to lower training and recruitment costs Motivated employees are likely to improve product quality or the customer service, thence gaining the firm‘s reputation as prestigious business and good employers hence making it easier to recruit the best workers.‖

 For society: Individuals, families and organizations are the basic elements to form a society hence employee motivation highly impact to the success or failure of society The most significant target of any society is enhancing the individual‘s life quality, employee motivation is basically meet it when

employees are satisfied their needs Employee motivation also indirectly impact

to the development of society through improving of individuals and organizations.‖

1.1.3 Types of motivation

Motivation at work can take place in two ways:

Extrinsic motivation: This refers to what is done to and for people to motivate

them It arises when management provides such rewards as increased pay, praise or promotions (Armstrong, 2006) Extrinsic motivation is a behavior that is influenced

by external rewards Praise or positive feedback, money, and the absence of punishment are examples of extrinsic motivation (Deci, 1980)

Intrinsic Motivation: This is derived from the content of the job It can be

described as the process of motivation by the work itself in so far as it satisfies people‘s needs or at least leads people to expect that their goals will be achieved Intrinsic motivation is self-generated in that people seek the type of work that satisfies them The factors affecting intrinsic motivation include responsibility (feeling of the work is important and having control over one‘s own resources, freedom to act, scope to use and develop skills and abilities, interesting and challenging work and opportunities for advancement (Armstrong, 2006)

1.1.4 Motivation process

There are many studies did research about motivation process, and each of them had

a different way to describe the motivation process which they did give out However, there are not many different between them Hence, the researcher decided

to choose the simplest motivation process to apply to this thesis which involves three elements: motives/need, behaviors/drivers, goals/rewards.‖

Figure 1.1: Motivation process

Source: Deci (1975); Deci & Ryan (1985)

Summary:

1) Need is the origin of any motivated behavior

2) Drives are directed at fulfillment of needs

3) Once the goal is attained, the physiological or psychological balance is restored

and the drive is cut off

Needs set up drives/behaviors aimed at goals Need is the origin of any motivated

behavior Need is a felt deprivation of physiological or psychological well-being

Needs exist in each individual in varying degrees When an individual recognizes a

need, he is driven by a desire to fulfill the need Drives are directed at fulfillment of

needs Drives are action-oriented and provide an energizing thrust toward reaching

a goal Incentives or goals are the instruments used to induce people to follow a

desired course of action Once the goal is attained, the physiological or

psychological balance is restored and the drive is cut off

1.2 Motivation theories

There are a number of approaches to the study of motivation, each containing a number of specific related theories The motivational theories answer the question that why one kind of job is motivating & satisfactory for the employees as compared to any other job The managers must comprehend the motivational factors

of the employees because motivated employees perform quite well than

non-motivated ones Following are the theories of motivation that are helpful to understand the motivation of employees

1.2.1 Maslow's hierarchy of needs theory

Maslow hierarchy of need as a theory in psychology proposed by Abraham Maslow

in his 1954 book Motivation and personality

Maslow hierarchy of need is often portrayed in a shape of pyramid (Maslow, 1954) with the largest and most fundamental level of needs at the bottom, and the need for self-actualization at the top In ascending order, beginning with the most basic need, the needs are psychological, safety, social, esteem and self-actualization needs According to Maslow, people are motivated to satisfy the lower needs before they try to satisfy the higher need

Figure 1.2: Maslow's Hierarchy of Needs

Source: Maslow, A.H (1943)

 Psychological Need

Psychological needs are literal requirements for human survival Air, food and water are metabolic requirements for survival for all humans An individual to satisfy these psychological needs is greater than the drive to satisfy any other type

of need These needs are satisfied through the wages and salaries paid by an organization (Maslow, 1954)

 Safety Need

With their physical needs relatively satisfied, the individual's safety needs take precedence and dominate behavior In the absence of physical safety – due to war, natural disaster, family violence, childhood abuse, etc – people may (re-)experience post-traumatic stress disorder or trans generational trauma In the absence of economic safety – due to economic crisis and lack of work opportunities – these safety needs manifest themselves in ways such as a preference for job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance policies, reasonable disability accommodations, etc Safety and Security needs include: Personal security, financial security, Health and well-being, Safety net against accidents

 Social needs

Maslow believes that humans are social animals, so human cannot live and work alone and they must work in a certain social environment, social relationships in particular That means that the human desire to be accepted, attention, attention, love and sympathy, etc.‖

 Esteem Need

According to (Maslow, 1954), all humans have a need to be respected and to have self-esteem and self-respect Esteem presents the normal humans desire to be accepted and valued by others People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel self-valued, be it in a profession or hobby

 Self-Actualization Need

(Maslow, 1954), describe that what a man can be, he must be This form the basis of the perceived need for self-actualization Maslow describes this desire to become more and more what one is, to become everything that one is capable of becoming One can achieve this not through promotions but by mastering his/her environment and setting and achieving goals (Maslow, 1945)

Maslow theory makes three important contributions Firstly, he identifies important need categories which can help managers to create effective positive reinforces Second contribution is that, the theory is helpful to think of two general levels of

needs, in which lower level needs must be satisfied before higher level needs become important Third, Maslow sensitizes managers to the importance of personal growth and self-actualization However, Maslow theory has some problems Maslow's theory is often criticized for not applicable in cases such as the military, police, fireman, etc who are willing to risk their safety to health others or parents who are sacrificing their basic needs for their kids

1.2.2 Two-factor theory of Herzberg

In 1959, Frederick Herzberg, a behavioral scientist proposed a two-factor theory or the motivator-hygiene theory According to Herzberg, there are some job factors that result in satisfaction while there are other job factors that prevent dissatisfaction According to Herzberg, the opposite of ―Satisfaction‖ is ―No satisfaction‖ and the opposite of ―Dissatisfaction‖ is ―No Dissatisfaction‖

Figure 1.3: Two factor - theory

Source: Herzberg (1959)

Herzberg classified these job factors into two categories: Hygiene factors and Motivation factors

Hygiene factors: Hygiene factors are those job factors which are essential for

existence of motivation at workplace These do not lead to positive satisfaction for long-term But if these factors are absent / if these factors are non-existent at workplace, then they lead to dissatisfaction In other words, hygiene factors are those factors which when adequate/reasonable in a job, pacify the employees and do not make them dissatisfied These factors are extrinsic to work Hygiene factors are also called as dissatisfiers or maintenance factors as they are required to avoid dissatisfaction These factors describe the job environment/scenario The hygiene factors symbolized the physiological needs which the individuals wanted and expected to be fulfilled Hygiene factors include:

 Salary: Salary structure should be appropriate and reasonable It must be equal and competitive to those in the same industry in the same domain

 Company Policies and administrative policies: The company policies should not be too rigid They should be fair and clear It should include flexible working hours, dress code, breaks, vacation, etc

 Supervision: Herzberg (1959) stated, ―Supervision is second in the order of frequency of factors leading to low job attitudes‖ It means the competency or ability of the supervisor This includes the supervisor‘s willingness to teach or delegate authority, fairness, and job knowledge.‖

 Working conditions: Herzberg et al (1959) noted that the physical condition of the workplace could be considered relevant to the hygiene needs of the worker Factors that involve the physical environment of the job: amount of work, facilities for performing work, light, tools, temperature, space, ventilation, and general appearance of the work place (F Herzberg, 1959, P.48)‖

 Interpersonal relations: The relationship of the employees with his peers, superiors and subordinates should be appropriate and acceptable There should

be no conflict or humiliation element present

 Job Security: It may be the employee‘s job tenure and/or the company‘s stability or instability – objective signs of the presence or absence of job security, not the feelings of security

Motivational factors: According to Herzberg, the hygiene factors cannot be

regarded as motivators The motivational factors yield positive satisfaction These factors are inherent to work These factors motivate the employees for a superior performance These factors are called satisfiers These are factors involved in performing the job Employees find these factors intrinsically rewarding The motivators symbolized the psychological needs that were perceived as an additional benefit Motivational factors include:

 Recognition: The employees should be praised and recognized for their accomplishments by the managers

 Achievement: The employees must have a sense of achievement This depends

on the job There must be a fruit of some sort in the job

 Advancement: The actual change in upward status in the company Increased opportunity changes with no increase in status are considered under responsibility In other words, it refers to promotion

 Work itself: The work itself should be meaningful, interesting and challenging for the employee to perform and to get motivated

 Personal growth: This includes actual learning of new skills, with greater possibility of advancement within the current occupational specialty as well as personal growth.‖

Limitations of Two-Factor Theory

 The two-factor theory overlooks situational variables

 Herzberg assumed a correlation between satisfaction and productivity But the research conducted by Herzberg stressed upon satisfaction and ignored productivity

 The theory‘s reliability is uncertain Analysis has to be made by the raters The raters may spoil the findings by analyzing same response in different manner

 No comprehensive measure of satisfaction was used An employee may find his job acceptable despite the fact that he may hate/object part of his job

 The two-factor theory is not free from bias as it is based on the natural reaction

of employees when they are enquired the sources of satisfaction and

dissatisfaction at work They will blame dissatisfaction on the external factors such as salary structure, company policies and peer relationship Also, the employees will give credit to themselves for the satisfaction factor at work

Implications of Two-Factor Theory

The Two-Factor theory implies that the managers must stress upon guaranteeing the adequacy of the hygiene factors to avoid employee dissatisfaction Also, the managers must make sure that the work is stimulating and rewarding so that the employees are motivated to work and perform harder and better The employee motivation is required to be satisfactorily resolved, and the managers need to focus

on both of motivation factors and hygiene factors, should not just focus on one of them This theory emphasizes upon job-enrichment so as to motivate the employees The job must utilize the employee‘s skills and competencies to the maximum Focusing on the motivational factors can improve work-quality

1.2.3 McClelland’s Achievement Theory

McClelland‘s theory of needs is one such theory that explains this process of

motivation by breaking down what and how needs are and how they have to be approached David McClelland was an American Psychologist who developed his theory of needs or Achievement Theory of Motivation which revolves around three important aspects, namely, Achievement, Power and Affiliation This theory was developed in the 1960‘s and McClelland‘s points out that regardless of our age, sex, race or culture, all of us possess one of these needs and are driven by it This theory

is also known as the Acquired Needs as McClelland put forth that the specific needs

of an individual are acquired and shaped over time through the experiences he has had in life

This theory can be considered an extension to Maslow‘s hierarchy of needs Per McClelland, every individual has these three types of motivational needs irrespective of their demography, culture or wealth These motivation types are driven from real life experiences and the views of their ethos

Achievement

The need for achievement (N-Ach) is the extent to which an individual desires to

perform difficult and challenging tasks successfully People with a high need for achievement:

 Desire success and positive feedback that is related to their performance on tasks

 Seek to excel and thus tend to avoid both low-risk and high-risk situations

 Like to work alone or with other high achievers

Predominantly achievement-motivated individuals avoid low-risk situations because they find easily attained success is not genuine achievement; rather they attribute it

to the ease of the task not their own effort Similarly, they avoid high-risk projects, regarding success as the result of chance not their competence Thus, individuals with high need for achievement are not gamblers, nor are they afraid to take risks Rather, they calculate the degree of risk and select moderate risk options McClelland suggested that people with high achievement need make good leaders, although they tend to expect those that they work with also to be result driven and may expect too much from them Their aggressive realism makes them successful entrepreneurs

Affiliation

The need for affiliation (N-Affil) is the desire for harmonious relationships with other people People with high need for affiliation:

 Want to be liked and feel accepted by other people

 Tend to conform to the norms of their work group

 Prefer cooperation over competition

 Enjoy being part of a group

High affiliation need individuals prefer work that provides significant personal interaction, and depends on successful relationships with others, such as customer service They are concerned with whether people like them more than whether they are doing a good job McClelland regarded a strong need for affiliation as undermining the objectivity and decision-making ability needed in management

Power

The need for power (N-Pow) is a desire for authority, to be in charge It takes two forms—personal and institutional

 Those who desire personal power want to direct others; this need often is perceived as undesirable

 Those who desire institutional power (also known as social power) want to organize the efforts of others to further larger goals, such as those of an organization

In management, while the job requires directing others, those with a high need for personal power may become dysfunctional as their focus is on the directing of others rather than on the achievement of the company's goals Managers with a high need for institutional power tend to be more effective than those with a high need for personal power, since they channel their need into accomplishing goals set by the organization Those whom they direct are more likely to respond positively when they are being directed toward the larger goal

McClelland noted that people generally have all three needs; one need, however, tends to be dominant This depends both on their internal make-up, their personality, and also is learned through experience Unlike Abraham Maslow who developed a hierarchy of needs, McClelland did not discuss these three needs as stages or with transitions among them

In his later work, McClelland (1988) added a fourth need, avoidance which functions to motivate people to avoid situations and people with which they have, or expect to have, unpleasant experiences These avoidance motives include fear of rejection, fear of failure, fear of success, and generalized anxiety In this work he also stressed that there are both conscious and unconscious intents that affect a person's motivation

1.2.4 Adams’s Equity Theory

Adams' Equity Theory is named for John Stacey Adams, a workplace and behavioral psychologist, who developed his job motivation theory in 1963 Much like many of the more prevalent theories of motivation (such as Maslow's Hierarchy

of Needs and Herzberg's Two-Factor Theory), Adams' Equity Theory acknowledges that subtle and variable factors affect an employee's assessment and perception of their relationship with their work and their employer

The theory is built-on the belief that employees become de-motivated, both in relation to their job and their employer, if they feel as though their inputs are greater than the outputs Employees can be expected to respond to this is different ways, including de-motivation (generally to the extent the employee perceives the disparity between the inputs and the outputs exist), reduced effort, becoming disgruntled, or, in more extreme cases, perhaps even disruptive

It is important to also consider the Adams' Equity Theory factors when striving to improve an employee's job satisfaction, motivation level, etc., and what can be done

to promote higher levels of each

To do this, consider the balance or imbalance that currently exists between your employee's inputs and outputs, as follows:

Inputs typically include:

Outputs typically include:

 Financial rewards (such as salary, benefits, perks)

 Intangibles that typically include:

And according to the theory, employees should be content where they perceive these to be in balance

1.3 Research model for analyzing employee motivation

Through studying the research of other authors, the author relieves that Herzberg‘s Two-factor Theory and Maslow‘s Hierarchy of Needs are the most commonly applied in pieces of research and studies specialized in motivation and performance

of employees

The hygiene factors in Herzberg‘s Two Factor Theory, which are mostly concerned with the work environment, can be explained through Abraham Maslow‘s Hierarchy of Needs As mentioned above, Maslow determined that some human needs take precedence over others Beyond the details of air, water, food and sex, he laid out five broader layers: the physiological needs, the need for safety and security, the need for love and belonging, the need for esteem, and the need to actualize the self, in that order

The first three needs — physiological, safety and social — are all in the hygiene factor of Herzberg‘s Theory This shows that the hygiene needs are generally the basic needs of individuals Herzberg‘s Theory is only different from Maslow in the method of categorization

Herzberg categorizes basic needs of human beings as hygiene factors This means basic needs do not give motivation but merely create a conducive work environment There would be no dissatisfaction among workers when basic needs are fulfilled, but it does not motivate them or give them satisfaction; it merely removes demotivation or dissatisfaction The motivation factors are the two top needs of the hierarchy — esteem needs and self-actualisation needs These needs, when fulfilled, would give employees motivation and satisfaction Before motivation and satisfaction can actually be achieved, there must not be any element

of demotivation or dissatisfaction

Thus, it is easier to actually apply Herzberg‘s Theory coupled with Maslow‘s Hierarchy of Needs This serves to strengthen Herzberg‘s Theory as it simplifies its application as a strategy to motivate employees By identifying the needs in Maslow‘s hierarchy, the hygiene and motivation factors can be obtained and subsequently fulfilled Herzberg recognizes that true motivation comes from within

a person and not from the environment, or external factors This helps to develop and acts as a foundation for the research model of this thesis

This is the reason for using Herzberg‘s Two-factor Theory in combination with Maslow‘s Hierarchy of Needs to analyze in this thesis Those theories suggest that the managers have to attend to the adequacy of the hygiene factors to avoid employee dissatisfaction Also, the managers must make sure that the work is stimulating and rewarding so that employees are motivated The job must utilize the employees‘ skills and competencies to the maximum Focusing on the motivational factors can improve working quality

The author would like to summarize the research model as follows:

Figure 1.4: Research model

1.4 Experience about motivating employees of some organizations

 Experience of Huawei Technology Corporation: Today, Huawei is the only

Chinese company – out of the 91 mainland Chinese companies listed on the Fortune Global 500 list – earning more revenue abroad than in China Huawei‘s revenue from overseas markets exceeded that from the Chinese market for the first time in 2005 In the fiscal year of 2014 when Huawei reached an all-time high sales revenue of $46.5 billion and net profits of $4.49 billion (both in U.S dollars) To get the achievement today based on the dedication of employees through slogan ―The only way to get the success is to work hard‖ Knowing that

a dedicated and committed work force makes companies more competitive is not

a too difficult concept to understand The way to promote dedication and make it accepted by its employees – as it is the case in Huawei – is, however, a more difficult nut to crack Huawei does it in part with the type of incentive performance system the company employs Huawei is not a public company, and is in fact owned by the employees Ren Zhengfei‘s shares account for nearly

Employee motivation ”

Employee motivation ”

1.4% of the company‘s total, and 82,471 employees hold the rest (as stated in Huawei‘s 2014 Annual report) The idea underlying this scheme is that Ren Zhengfei wants to share both responsibilities and benefits with his colleagues The income of employees at Huawei is including salary, bonus and shares The program of receiving shares only applies for somebody who perform well enough qualify to participate The employee-ownership arrangement not only helps Huawei attract and retain dedicated employees, but also allows the company to plan for the long term Ren Zhengfei has also credited it with allowing them to stay close to their goals and long-term vision For example, Huawei has introduced the use of a rotating CEO system in which three deputy chairmen take turns acting as CEO for six months each At the same, time Ren Zhengfei maintains his oversight role, acting as a mentor and coach for the acting CEO

 Experience of motivating employee at HSBC: HSBC is one of the world‘s

largest banking and financial services organizations with around 6,900 offices HSBC is a global financial institution through which staff are given every opportunity to develop their career on the basis of skills, performance and potential In addition, HSBC can create many job opportunities Employees always find that they have the opportunity to grow and get more work experience HSBC is also committed to creating equal opportunities, especially for female employees How to develop female talents, how they can sit on the board of the bank At HSBC, the dynamic and creative working environment is also very special HSBC has about 30 foreign employees and about 15 different nationalities This bank leader has created a working environment where members can learn from each other When employees work, they feel they are working with a quality team

 Experience of motivating employee of VNPT: Vietnam Post and

Telecommunications (VNPT) was a state-owned enterprise, was established in

1995 (formerly known as Vietnam Post and Telecommunications Corporation)

In order to get this achievement, the Group has paid attention to the motivation

of employees through the implementation of the programs and emulation movements, specifically the "VNPT Creation" movement This is a motivational program in the management and production of units which support to the Group's growth from 25 to 30% per year, increase labor productivity more than 10%, improve income of employees and maintain the dedicated employees In addition, the Group has deployed activities such as: Employees use VNPT‘s products and services; VNPT‘s smile; VNPT‘s quality; "Labor Month" The emulation movements to promote creative labor; take care and protect the legitimate rights and benefits of the laborers; improving the material and spiritual life, improving working conditions and living conditions for laborers Together with the launching of emulation movements, the Group regularly recognizes, rewards and praises individuals who have many achievements in the field of research, applied innovations and solutions in management and

production to bring high efficiency to the Group

From the experiences from VNPT, Huawei and HSBC, the author has drawn some measure to motivate employees as follow:

 Identify the needs of employees, develop policies appropriate with the needs of workers to stimulate creativity, improve labor productivity

 Satisfy the needs of employees by both financial measures and spiritual measures such as developing a salary policy, rewarding and equality based on the performance of the works;

 To ensure welfare for laborers such as paying social insurance, health insurance and unemployment insurance in accordance with the provisions of law

 Implementing measures to motivate labor in a fair, objective, open and popular

to each employee

CHAPTER 2 CURRENT SITUATION OF EMPLOYEE MOTIVATION AT BIDV

2.1 Overview of BIDV

2.1.1 General information

BIDV was founded on 26 April 1957 under the initial name of Bank for Construction of Vietnam, then renamed Bank for Investment and Construction of Vietnam (1981 - 1990), Bank for Investment and Development of Vietnam (1990 - 2012), and Joint Stock Commercial Bank for Investment and Development of Vietnam (since 2012)

From 2012 to present, BIDV was equitized according to the direction of the Government, ensuring the harmony in the interests of the State, enterprises, investors and employees, operating under market mechanism with a strong direction for international integration

On 28 December 2011, BIDV implemented equitization through initial public offering (IPO) On 27 April 2012, BIDV officially transformed into the Joint Stock Commercial Bank for Investment and Development of Vietnam, making a significant changes to ownership structure, ensuring transparency in accordance with international practice BIDV has been listed on the stock exchange under the code BID since January 2014, operating effectively in international competitive market environment

During the period, BIDV comprehensively completed its business targets, strengthening competitive capacity, becoming the leading commercial joint stock bank in Vietnam with sustainable development with total assets of more than VND850 trillion (~USD38.6 billion)

 Company name in Vietnamese: Ngân hàng Thương mại Cổ phần Đầu tư và Phát triển Việt Nam

 International transaction name: Bank for Investment and Development Joint Stock Company

 Abbreviated name: BIDV

 Address: BIDV Tower, 35 Hang Voi Street, Hoan Kiem District, Hanoi

Figure 2.1: Organizational structure of BIDV

(Source: BIDV annual report 2017)

2.1.3 Business line

Main business line of BIDV:

 Credit activities (lending, discount, guarantee, credit card issuance, etc)

 Fund mobilization (savings, bond, debenture)

 Trade finance services

 Payment services (domestic and international payment)

 Account services

 Bank card services

 Other services under the Certificate of Business Registration, etc

2 Total operating income 24,712 30,339 39,017

3 Tax and other payables 2,337 2,540 2,850

4 Profit before tax 7,473 7,668 8,665

5 Profit after tax 5,901 6,196 6,946

6 Deposit from customer 566,473 723,674 844,831

7 Loans to customer 596,144 710,085 834,435

8 Net service imcome 2,337 2,513 2,966

(Source: BIDV annual report 2017)

In 2017, the business performance of the whole system continued to maintain the sustainable and safety growth, specifically: Total operating income achieved VND39,017 billion, increased 28.3% compared to 2016; Income expense difference was VND23,512 billion, grew by 39.4% - highest among recent years; consolidated profit before tax reached VND8,665 billion, completed 111.8% the determined business plan Profitability indicators includes ROA, ROE achieved the determined

business plan This result is due to the drastically implementation of the performance enhancements solutions: Increased net interest income; improved collecting off balance sheet, debt; enhanced and diversified the income from services especially by effective financial management, drastically cut down operating cost, assigned the business plan management responsibility with the cost reduction activities

By the end of 2017, total asset of BIDV reached VND 1,202,284 billion, increasing 19.5% compared to 2016, accounted for 12.5% total asset of the banking sector, continued to reassure the position as the leading commercial bank in Vietnam in term of scale

2.1.5 Labor force structure

BIDV perceives that human resources are the most important factor for success and development of an organization Therefore, one of the most important objectives of BIDV is to ensure sufficient quantity and quality of human resources to successfully implement the business targets and strategies of the bank

Figure 2.2: Labor structure of BIDV

(Source: BIDV annual report 2017)

a) Staff’s structure

The staff of BIDV is staffed with university and postgraduate degrees in the fields

of finance, banking, economic, accounting and information technology The number

of staffs is trained, highly qualified, most involved in many projects of the bank and they should be very experienced in the field of banking and finance

b) Leadership’s structure

BIDV has been experienced and operating for more than 50 years in the banking sector, the key members who run the company are experienced in management, applying scientific and technical research and have a high level of specialization in the fields, especially consultancy, banking and finance

Table 2.2: List of Board of Directors and Management of BIDV

Joined BIDV in 1981

2 Member and

Bachelor of Economics Joined BIDV in 1987

3 Member Mr Bui Quang Tien Master of Economics

4 Member Ms Le Thi Kim Khuyen

Master of Business Administration Joined BIDV in

1991

7 Member Mr Nguyen Van Loc Master of Economics

8 Member Mr Ngo Van Dung Master of Finance and Banking

3 Senior executive Mr Tran Xuan Hoang Bachelor of Economics