High turnover rate and performance appraisals bias by supervisor in FPT Telecom JSC region 5

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN MANH TUAN (HIGH TURNOVER RATE AND PERFORMANCE APPRAISALS BIAS BY SUPERVISOR IN FPT TELECOM JSC REGION 5) MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN MANH TUAN (HIGH TURNOVER RATE AND PERFORMANCE APPRAISALS BIAS BY SUPERVISOR IN FPT TELECOM JSC REGION 5) MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PROF TRAN HA MINH QUAN Ho Chi Minh City – Year 2019 EXCUTIVE SUMMARY With the development of all aspects of life from society, culture, education to technology, the quality of people’s lives is increasingly enhanced However, along with these developments as well as the rise of the people’s demands, they will have to work so hard that they can satisfy all their needs as well as take care of their family perfectly According to Deborah Jian Lee (2014), most of people nowadays pay so much attention to work that the time for their own family or their own personal life is increasingly shortened They cannot get rid of the whirl of work so they also cannot balance their own lives, balance between the time for working and the time for living This problem lasts for a while will easily make them feel stressful and tired And the result is that they will give up easily all the things they are been doing and consider it as a release for them from pressure This report will use both primary research and secondary research to analyze as well as conduct the results about how the work – life balance effects on the turnover rate in FPT Telecom Joint Stock Company – Region After that, this report will use those information and data to give some recommendations what the board of director of FPT Telecom Joint Stock Company – Region should to decrease the turnover rate as well as improve the cohesion of employee with the company so that the FPT Telecom Joint Stock Company – Region can complete the assigned business plan ACKNOWLEDGEMENTS I would like to acknowledge all my family, my wife, my friends, my colleagues, my classmates at ISB and FPT Telecom for their supporting, helping and encouragement during my studies Without them, I would not be where I am today Especially, I would like to thank my supervisor - Professor Tran Ha Minh Quan for supporting me, give me the best advices, as well as guidance me all the time of making this report I will not complete this report without his wholeheartedly help TABLE OF CONTENTS EXECUTIVE SUMARY ACKNOWLEDGEMENT I INTRODUCTION COMPANY BACKGROUND THE STRUCTURE II PROBLEM CONTEXT NUMBER OF SALE VOLUME IN FPT TELECOM & THE DECREASING IN FPT TELECOM – REGION THE TURNOVER RATE IN FPT TELECOM COMPARED TO TELECOM INDUSTRY’S TURNOVER RATE TURNOVER RATE IN REGION – HO CHI MINH CITY IN FPT TELECOM III PROBLEM IDENTIFICATION 14 WORK-LIFE BALANCE SALARY AND BENEFITS ERRORS IN RECRUITMENT PERFORMANCE APPRAISALS BIAS CAUSE-EFFECT MAP IV CAUSE VALIDATION 25 WORK-LIFE BALANCE SALARY AND BENEFITS ERRORS IN RECRUITMENT & PERFORMANCE APPRAISALS BIAS V RECOMMENDATION/SOLUTIONS 30 The first possible solution: biases from inexperience and untrained supervisors The second possible solution: biases caused by inconsistency across supervisors The third possible solution: recency bias and personal bias from supervisors’ performance appraisal VI ORGANIZATION OF ACTIONS 38 CONCLUSTION 40 REFENRENCES 42 APPENDIX 44 I INTRODUCTION The company background FPT Telecom Joint Stock Company (FPT Telecom) is a member of FPT Group – a Vietnam’s leading technology group Established in 1997, FPT Telecom has three main products Those are FPT Television, FPT Internet and FPT Play box After 20 years of operation and development, FPT Telecom now has more than 200 transaction offices of more than 80 branches in 54 provinces and cities in the country with more than 7,000 official employees and become the leading company in technology industry in Vietnam Moreover, FPT Telecom also has launched branches in Cambodia as well as having the licensed in order to provide services in Myanmar They become one of the telecommunication and Internet service providers who are trusted and loved by customers all over Vietnam and the region From the beginning of establishing, FPT Telecom and their board of director set up their pioneering mission are bringing internet products and services to the Vietnamese people They expect that every Vietnamese family will use at least one service of FPT Telecom with the motto "Customer is the most important" Along with their development and reputation, FPT Telecom is always trying to invest more in infrastructure, constantly upgrade the quality of products and services as well as enhance the application of new technologies so that they can provide their customers with superior service experience The structure Annual General Meeting Board of Supervisors Board of Directors Board of Directors FPT International Telecom Limited Company Functional Departments HR Department Customer Services Center FPT Software Solution for Business Limited Company External Relation Department International Sales Department Tan Thuan Telecom Limited Company Quality Department Management & Development Center of Head Cable FPT Telecom Tan ThuanJoint Stock Company Training Department Research Center FPT Online Joint Stock Company Financial Department Network Center Branches of Regions Media & Communication Department Infrastructure Center Third-Party Supporting Department Firuge FPT Telecom’s structure (Source: FPT Telecom Human Resources) II PROBLEM CONTEXT Number of sale volume in FPT Telecom & the decreasing in FPT Telecom – Region NUMBER OF SALES VOLUME 35.000 30.000 25.000 20.000 15.000 10.000 5.000 2015 2016 2017 2018 Gross Region Region Region Region Region Region Region Firuge Number of sales in FPT Telecom (Source: FPT Telecom Business Department) FPT Telecom is separated into regions for management and administration easily Those regions are Region – Ha Noi Capital, Region – Northwest, Region – Northeast, Region – Central, Region – Ho Chi Minh City, Region – Southeast and Region – Southwest Region – Ho Chi Minh City is the biggest region because it contributes about 30 percent of FPT Telecom’s profit Besides, Region is also rated as the most effective area with the highest sales volume compared to the remaining six regions in the country from 2015 to 2018 However, in 2018, the turnover rate of Region is 11%, highest compared to the rest regions in the country and the sale volume in Region in 2018 decreased strongly, about 13% compared to the increasing of others regions GROWTH 20% 15% 10% 5% 0% Region Region Region Region Region Region Region -5% -10% -15% Growth 2016/2015 Growth 2017/2016 Growth 2018/2017 Firuge Growth rate of sales volume in FPT Telecom (Source: FPT Telecom Business Department) The lack of human resources in FPT Telecom Region may be the reason leading to reduce number of sales In fact, if Region is not enough sales employees to sale the products of FPT Telecom, the sales volume in Region will decrease and the business results will decline The consequence is the results of whole FPT Telecom will be going down too Thirdly, according to Mr Nguyen Lam Dong – a salesman, who left FPT Telecom month ago, the main reason for his leaving decision is the unfair and bias of his supervisor when evaluating performances Ms Nguyen Thi Xuan Lan – manager of Human Resource Department said that if all the supervisors in FPT Telecom generally and in Region particularly are trained well, they would know how to assesses salesmen more fairly The salesmen will be happier and the relationship between supervisors and salesmen will be improved To sum up, after considering carefully between benefits and costs as well as the advantages and disadvantages of implementing the above solutions, training supervisor should be prioritized to apply now to reduce the turnover rate in FPT Telecom - Region And this training program should provide the training in soft skills, management and leadership skills; knowledge about how to evaluate performance rightly as well as giving some practices and tools to improve internal communications between supervisors and the salesmen IV ORGANIZATION OF ACTIONS In FPT Telecom - Region 5, high turnover rate of salesmen is the urgent issue that needs to be solved immediately In fact, there will be an unavoidable number of salesmen who left their jobs at one time However, this number should be minimized as low as possible The below table is an action plan which take 06 months from January 2019 to July 2019 The result of implementing this action plan will be evaluated at the end of the year 2019 38 Tasks Department Research& collect the information about all the current supervisors’ability Human Resources Department, Independent Human Resources Consulting Organization, Supervisors Invite an Independent Human Resources Consulting Organization to help in creating questionnairecriteria for assessment Notifyall aboutthe questionnairecriteria for assessment program and then survey, conduct the survey data and analyze the survey result Receive feedbacks from HR/supervisors/salesmenand then make correction List all the supervisors who have low score when make survey Organizing the training classes and requestall the supervisors in list to join fully Jan Feb Mar Apr May June July Human Resources Department, Supervisors, Salesmen Human Resources Department, Administration Department, Supervisors Receive all feedback from trainees in order to improve quality of training programin next time Human Resources Department Re-evaluate the training program if it is effectively or not and reopen new course if necessary Board of Director (BOD), Human Resources Department 39 CONCLUSION In the past, the employees were afraid to change and get used to work for a company in a long time or maybe throughout their lifetime However, with the development of society, culture, education as well as technology, the quality of people’s lives is improved As a result, the employees nowadays not be afraid of changing job They just stick with a company when they feel satisfaction and are paid a reasonable wage Therefore, the turnover rate will depend much on how satisfied the employees feel as well as how they were treated in company On the other hand, the high turnover rate at FPT Telecom in generally and FPT Telecom – Region in particularly has been rising as an urgent problem which needs to be solved as soon as possible This report showed that there are many causes leading to the high turnover rate in FPT Telecom – Region such as work – life balance, performance appraisal bias from supervisors, recruitment process errors However, performance appraisal bias from supervisors is the main cause Some recommendations and solutions are given in order to reduce the bias of supervisors when they evaluate the performance of salesmen After researching as well as considering the benefits and costs, the advantage and disadvantage of all recommendations and solutions, training supervisor is the best solution in this time with lowest cost and ability to impact profoundly to current situation This solution will be prioritized to apply in FPT Telecom – Region in order to reduce the turnover rate immediately 40 Although the time is limited as well as the sample of the report is not large (there is people interviewed), the result of this report is that the performance appraisal bias from supervisors affect strongly than the turnover rate in FPT Telecom is undeniable However, this report also noticed that there are many things that can make employees feel satisfactory in work like salary and benefits, good environment, good supervisors…The important thing in here is that supervisors should be fair in judgment, support more for their employees and help them develop career path so that they will have more motivation to work better and contribute more in the development of companies In addition, in the future, the researches should explore more about the perception and expectation of employees on developing their own career path as well as the impact of this on the intention to quit the job of employees so that the causes of the high turnover rate are evaluated more correctly 41 REFERENCES Jonathan Ehimen (2014) “Financial Incentives and Rewards on Employee Motivation in the Nigerian ElectricityDistribution Company” European Journal of Business and Management.Retrieved from https://pdfs.semanticscholar.org/ec33/baa5ab3fe038294dcbfcfc17925cd8ae6c53.p df Deborah Jian Lee (2014) “6 Tips for Better Work – Life Balance” Forbes Retrieved from https://www.google.com.vn/amp/s/www.forbes.com/sites/deborahlee/2014/10/20/ 6-tips-for-better-work-life-balance/amp/ Michael Booz (2018) “These Industries have the Highest Talent Turnover Rates” Linked in Retrieved from https://business.linkedin.com/talent-solutions/blog/trends-and-research/2018/the3-industries-with-the-highest-turnover-rates Mohamed, Ahmed A.; Mohamad, Mohamad Saad; Awad, Ahmed E (2017) “The relationship between Pay Satisfaction and Turnover Intention in Egypt” Journal of Competitiveness Studies.Retrieved from https://www.questia.com/library/journal/1P3-4322081359/the-relationshipbetween-pay-satisfaction-and-turnover Hong Y Park, Raymond L Christie and Gail E Sype (2014), “Organizational Commitment and Turnover Intention in Union and Non - Union Firms” Sage Pub.Retrieved from 42 https://journals.sagepub.com/doi/pdf/10.1177/2158244013518928 Mahmoud Javidmehr and Mehrdad Ebrahimpour (2015) “Performance appraisal bias and errors: The influences and consequences” AIMI Journals Retrieved from https://poseidon01.ssrn.com/delivery.php?ID=68110507302702100502108010812 711102912204700408803508502709011103106812110211712307712604510101 202109704709206709911312611210611400809403902109307101600010511809 003106007802402012200710011400907311510706803109312407906809112100 1068097069066108086099115&EXT=pdf Kerri R Rittschof & Vincent J Fortunato (2015) “The Influenceof Transformational Leadership and Job Burnout on Child Protective Services CaseManagers' Commitment and Intent to Quit”.Journal of Social Service Research.Retrieved from https://www.tandfonline.com/doi/abs/10.1080/01488376.2015.1101047?journalCo de=wssr20 Fionnuala Courney (2016) “Change Management: Reasons Why Training Supports Organizational Change” Elearning Industry Retrieved from https://elearningindustry.com/change-management-3-reasons-training-supportsorganizational-change 43 APPENDIX The data collection that we get is in form of text through asking interviewees some open-ended questions as well as observing their behaviors The advantages of this are that we can have the opportunities to explore the thoughts, the feelings as well as the points of view of the interviewees about how things going on in FPT Telecom particularly The tools that we used for the interviews were audio recorders; after that, we will transcript it into word documents and use it to analyze as well as discuss to get the results as the research purposes of the report Participants Age Gender Education Occupation Mr Ngoc Phuoc 45 Male Bachelor Degree Sales Manager in Region Mr Lam Dong 29 Male Diploma Degree Former Salesman in Region Mr Hoang Vu 30 Male Bachelor Degree Current Salesman in Region Mr Minh Toan 34 Male Bachelor Degree Supervisor Sales Team in Region Ms Xuan Lan 42 Female Bachelor Degree HR Manager in Region 44 Appendix INTERVIEW TRANSCRIPT Interviewer: Nguyen Manh Tuan Interviewee: Nguyen Ngoc Phuoc (Sales Manager in Region of FPT Telecom) MT Good morning Mr.Phuoc How are you doing today? Phuoc Hi Tuan Long time no see I’m good What are you up to? MT Today I request for this meeting to have a short interview with you It may take about 15 minutes in order to gain some opinions or ideas from you – a Sales Manager in Region of FPT Telecom Phuoc Okay Tuan I can give you more than 15 minutes Suit yourself then MT That would be great! Okay but first let me tell you that questions which I will give you there are no right or wrong answer the aspects that I focus will be your opinions Phuoc Okay I got it MT Okay Firstly, what is your company product/service and which department are you working for? How many employees are in your department? Phuoc I am working at Sales Department therefore Internet, IPTV and OTT (Smart TV Box) are our company’s products We am taking care of sales teams with around 15 employees each MT Great! How old are you? What is your routine working day? When does it start and finish? Phuoc I’m 45 years old The working time in my company starts at 8AM and finish at 5.30PM with 1.30 hours for lunch time as same as many companies However, I am always at the office at 7AM to have time to look back what I did yesterday and days before Also, I hardly go home at 5.30PM like others because I want to avoid traffic on the way home in rush hour and my house is 10km far from the office MT I can see that you are a very busy man How about your sales employees? Are they struggling with such huge workloads I would say? 45 Phuoc They are actually complaining very often with me about working out of company’s rule but this is how the sales go for Sometimes, we have to work overtime for finding customers when they get back home after work so we can approach them and make deals done Most of salesman in my team is around 20-32 of age so they are kind of struggling between working time and their leisure time MT What you think of work-life balance issue? Is this issue make your employees quit their jobs? Phuoc I think employees are getting much more enthusiastic and more energy in this era In order to make work-life balance, you have to manage your own time in an effective way I think employees can create their own timetable in order to make it become routine This timetable will help you change the structure of your life in order to meet balance point between work and private life I think if this issue happens and continues for quite long time, it will lead to the turnover of my employees because I see most of them hardly have time to spend with their family or lovers Some of them cannot have time to have a real relationship I really want to help but this is how the sales team have to overcome with the stress and make it become your own routine to stay in this work MT Well such a great interview Thanks for your time and have a good day Mr Phuoc Phuoc Anytime Tuan Appendix INTERVIEW TRANSCRIPT Interviewer: Nguyen Manh Tuan Interviewee: Nguyen Lam Dong (Former Salesman in Region of FPT Telecom) MT Good morning Mr Dong How are you? Dong Hi Tuan I’m good What are you up to? MT Today I request for this meeting to have a short interview with you It may take about 15 minutes in order to gain some opinions from you Dong Okay Tuan MT Okay but first let me tell you that questions which I will give you there are no right or wrong answer the aspects that I focus will be your opinions 46 Dong Okay I got it MT Okay Firstly, how long have you leave FPT Telecom? How you feel about it? Dong It has been months from the day I left FPT Telecom as a salesman I think it was a good choice till now then because I find myself suitable for my current job as real estate salesman for Novaland MT Well Good to hear that you are happy So why you are happy with your new job rather than FPT Telecom? Does anything special about your new job or things getting worse in FPT Telecom? Dong I’m 29 years old now had a 1-year-old daughter All I have to is making money to take care of my family In FPT Telecom, I could not find it Too much workloads but I thought my efforts and hard-working did not make any change to my salary I did not want to compare but here I can make good money and take care of my family as well as a stable job MT I see Is salary and benefits the only matter that make you quit or there are other reasons? If yes, tell me more about it? Dong Well, I would say I feel that I not have future in this company Even though I worked hard and concentrated to my job description I felt that I have a very good relationship with my colleagues but not with my supervisor He is kind of tough guy and I think he does not like me much because most of his evaluation on my work is not fair even though I did my best of selling products in couple of months MT Okay I see Have you ever told him about it? Does this issue happen to other employees as well? Dong No, I not want to make both of us feel uncomfortable so I decided to quit my job I’ve talked to some of my teammate in sales team sometime the evaluation was not correct compared to how hard-working they make I can see they accepted the truth that the supervisor is not fair to everyone MT Well thanks for your time and have a good day Mr Dong Dong Okay bye Tuan 47 Appendix INTERVIEW TRANSCRIPT Interviewer: Nguyen Manh Tuan Interviewee: Nguyen Hoang Vu (Current Salesman in Region of FPT Telecom) MT Good morning Mr Vu How are you today? Vu Hi Tuan I’m quite good What are you up to? MT Today I request for this meeting to have a short interview with you It may take about 15 minutes in order to gain some opinions from you Vu Okay MT Firstly, let me tell you something All the questions which I will give you there are no right or wrong answer the aspects that I focus will be your opinions Vu Okay I got it MT Okay Firstly, what is your company product/service and which department are you working for? How many employees are in your department? Vu I work at Sales Department in Region of FPT Telecom in years since 2017 My department is Sales with more than 50 people and the main products and services are internet, IPTV and FPT Playbox MT How old are you and have you married yet? What is your routine working day? When does it start and finish? Vu I’m 28 years old I just got married last year and my wife is pregnant now Unlike other departments in FPT, Salesman as me is usually going out to find clients so there are not much regulations of being check in at the office However, I usually wake up early in the morning for work out and take my wife to work MT Congratulations on your news Vu – that’s great thing to hear that your wife is having a baby soon How you feel about your current work? Are you happy about your job? Vu I could say I quite happy about my job I have nice colleagues and an effective boss who helped me a lot in work He is very thoughtful and evaluates his employees’ work very well-deserved if he saw how hard-working we are because about 50% our salary is checking on KPIs and evaluate by supervisor 48 Moreover, when I am stressful and upset and tend to quit, he tries to motivate me a lot as well as recognize me as one of the best salesmen that he have ever had This cheered me up a lot at that time! MT Good to hear that We are all hope to go further with a right boss right? So Is it difficult to apply to this job? Vu Not really for me I have a friend who worked here and introduce me The interview that I take was about only 15 minutes and I did not know what actual work I have to I was fast and lack of information even I asked the interviewer I would say I love this job even though it’s tough There are challenges in this job that require a very patient and understanding employee to survive the first year Once, I was thinking about quitting the job because I usually have to work on weekend and did not have time taking care of my wife However, as I said, the reorganization of my boss made me think again and I decided to stay MT Such a good boss! So based on your own experience What you think about the supporting of boss/manager will decrease the plan of quitting jobs of employees Vu I must admit that the employee will leave the company right away if they feel that they not have any supports from their boss or they and their boss cannot talk with each other It is because the lack of information about assigned work by the boss may make the misunderstanding, leading to the results of salesmen's work not evaluate properly MT Well thanks for your answer and have a good day Vu Vu You are welcomed, Tuan Appendix INTERVIEW TRANSCRIPT Interviewer: Nguyen Manh Tuan Interviewee: Nguyen Minh Toan (Supervisor Sales Team in Region 5) MT Good morning Mr Toan How are you today? Toan Totally fine, Tuan What are you doing today? MT Today I request for this meeting to have a short interview with you It may take about 15 minutes in order to gain some opinions from you 49 Toan Okay MT Firstly, let me tell you something All the questions which I will give you there are no right or wrong answer the aspects that I focus will be your opinions Toan Got it MT Okay Firstly, what is your company product/service and which department are you working for? Toan I have worked at Sales Department in Region of FPT Telecom for years MT How old are you and have you married yet? What is your routine working day? When does it start and finish? Toan I’m 28 years old I got married and have a two years old daughter As a supervisor, I go to work early to check the schedule of my salesman as well as support them to sale and deal with customers I worked form Monday to Saturday and have a day off in Sunday MT As a supervisor, what you usually focus on when you evaluate your salesmen? Toan I would like to evaluate my salesmen based on the number of products that they sale and the schedule of them to complete the assigned work on time MT Great I think that there are many salesmen would like to work with a boss like you Do you have any difficult thing to say as a leader although you just worked in years? Toan I am always afraid that I not have enough experience to lead them reach the business targets Although I have been supervisor for years but I only attended one training class about how a supervisor should to manage salesmen and maximize the number of sales I feel that is not enough for me as well as the other supervisors can take more knowledge and experience about how to become a good supervisor MT Well thanks for your answer and have a good day Toan Toan No problem, Tuan 50 Appendix INTERVIEW TRANSCRIPT Interviewer: Nguyen Manh Tuan Interviewee: Nguyen Thi Xuan Lan (HR Manager in Region 5) MT Good afternoon, Ms Lan How are you today? Lan Hi Tuan I’m fine What will we today? MT Today I request for this meeting to have a short interview with you It may take about 15 minutes in order to gain some opinions from you Lan Let’s begin, Tuan MT Firstly, let me tell you something All the questions which I will give you there are no right or wrong answer the aspects that I focus will be your opinions Lan Okay! MT Okay Firstly, what is your company product/service and which department are you working for? Lan My company products/services are internet, IPTV and FPT Playbox I am working for HR Department at Region of FPT Telecom MT As a position of manager of HR Department What you think about the turnover rate in Region of FPT Telecom? Lan I think that is an urgent issue and needs to be solved in order to guarantee the completing of business plan MT Based on my research and analysis, the bias in performance appraisal from supervisors is the main cause, leading to the higher turnover rate in your company Do you have any ideas for this? Lan I think the bias in performance appraisal from supervisors is because most of supervisors in FPT Telecom are recruited because of having acquaintances with some executives in FPT group Besides, They are only trained only day before becoming a real supervisor The remaining supervisors have worked for FPT Telecom over years and had a good relationship with internal employees or are a current team leader 51 MT Do you have any suggestions to solve this issue? Lan I think that we should re-train all the current supervisors in Region about internal communication process as well as develop their soft skills If they are trained well, they would know how to assess their salesmen more fairly The salesmen will be happier; leading to the turnover rate will decrease MT Well thanks for your contribution to my work Have a good day Ms Lan Lan You are welcomed, Tuan 52