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

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 Contents List of figures .3 List of tables List of abbreviations .5 ACKNOWLEDGEMENT ABSTRACT Introduction 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 Research methodology 29 3.1 Research process 29 3.2 Data collection 34 3.3 Data analysis methods 35 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 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 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 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 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 ACKNOWLEDGEMENT Employee job satisfaction in Vietnam banking industry – The moderating role of ownership structure is the topic that I chose to study and 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! 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 stateowned 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 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 contributes positively to the planning of human resource management at working place and brings more job satisfaction to employees, families and society According to Allen and Gale (2000) and Levine (2005), the banking system plays a huge role in the economic development and macroeconomic stability of any country If a weak bank exists, it will lead to potential risk for all system And human resources are always a prerequisite in operating and developing the banking system to serve the economy Kelley (1990) states employees in banking sector have lower level of satisfaction and empowerment than other industries The repetitive job, unreasonable salary and promotion, non-empowerment, stressful working environment directly affects productivity Moreover, banks desire to have excellent warriors to operate business activities, decrease cost, increase revenue and profit Bank employee dissatisfaction have negative in poor job performance (Koh & El'Fred, 2001) Yee, Yeung, and Cheng (2008) also prove that low level of employee satisfaction has a negative relationship with customer’s satisfaction In brief, employee satisfaction evaluation is really a key element in improving bank performance and customer satisfaction and the quality of banking system 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 Cronbach's N of Items Alpha 787 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Alpha if Item Correlation Deleted SB1 10.45 3.910 625 719 SB2 10.55 4.013 612 726 SB3 10.45 4.594 418 818 SB4 10.37 3.704 741 658 Recognition and Motivation Reliability Statistics Cronbach's N of Items Alpha 897 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Alpha if Item Correlation Deleted RM1 7.59 2.052 833 824 RM2 7.61 1.966 828 826 RM3 7.69 2.081 734 908 Work relationship The first test: 73 Reliability Statistics Cronbach's N of Items Alpha 708 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Alpha if Item Correlation Deleted WR1 10.21 3.940 729 496 WR2 10.24 4.133 667 539 WR3 10.64 4.401 467 665 WR4 10.28 5.689 190 812 The second test: Reliability Statistics Cronbach's N of Items Alpha 812 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Alpha if Item Correlation Deleted WR1 6.70 2.584 792 608 WR2 6.73 2.733 729 676 WR3 7.13 2.980 496 919 Development Opportunities Reliability Statistics 74 Cronbach's N of Items Alpha 756 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Alpha if Item Correlation Deleted DO1 6.44 2.276 645 604 DO2 6.49 2.163 665 578 DO3 6.56 2.887 462 802 Job satisfaction Reliability Statistics Cronbach's N of Items Alpha 876 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Alpha if Item Correlation Deleted JS1 10.63 3.528 776 826 JS2 10.91 3.228 808 810 JS3 10.77 3.320 671 874 JS4 10.62 3.863 710 854 EFA Factor Analysis EFA for independent variables 75 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity 720 2046.797 df 120 Sig .000 Communalities Initial Extraction NW1 1.000 589 NW2 1.000 748 NW3 1.000 795 SB1 1.000 668 SB2 1.000 663 SB3 1.000 393 SB4 1.000 779 RM1 1.000 864 RM2 1.000 870 RM3 1.000 769 WR1 1.000 871 WR2 1.000 828 WR3 1.000 541 DO1 1.000 816 DO2 1.000 785 DO3 1.000 551 Extraction Method: Principal Component Analysis Total Variance Explained Component Initial Eigenvalues Total % of Cumulative Variance % Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total % of Cumulative Variance % Total % of Cumulative Variance % 3.846 24.039 24.039 3.846 24.039 24.039 2.551 15.942 15.942 2.667 16.666 40.705 2.667 16.666 40.705 2.527 15.795 31.737 76 2.044 12.776 53.481 2.044 12.776 53.481 2.289 14.307 46.044 1.726 10.787 64.268 1.726 10.787 64.268 2.245 14.030 60.074 1.248 7.798 72.066 1.248 7.798 72.066 1.919 11.991 72.066 832 5.198 77.264 651 4.069 81.332 585 3.654 84.986 534 3.340 88.327 10 415 2.597 90.923 11 322 2.015 92.938 12 305 1.907 94.845 13 281 1.755 96.600 14 261 1.634 98.234 15 155 969 99.203 16 128 797 100.000 Extraction Method: Principal Component Analysis a Component Matrix Component SB4 680 SB1 669 DO3 667 DO2 652 SB2 650 SB3 513 555 RM2 858 RM1 851 RM3 797 WR1 761 WR2 729 WR3 619 NW3 577 658 NW2 567 622 NW1 DO1 571 554 642 Extraction Method: Principal Component Analysis 77 a components extracted a Rotated Component Matrix Component SB4 860 SB1 794 SB2 792 SB3 593 RM1 926 RM2 926 RM3 872 NW3 873 NW2 843 NW1 755 WR1 927 WR2 902 WR3 723 DO1 885 DO2 838 DO3 554 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Transformation Matrix Component 666 -.012 508 230 495 007 892 -.107 432 -.080 -.200 -.433 -.169 862 032 -.496 045 834 080 -.224 -.520 121 -.081 -.107 835 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization 78 EFA for dependent variables KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy .791 Approx Chi-Square Bartlett's Test of Sphericity 611.449 df Sig .000 Communalities Initial Extraction JS1 1.000 789 JS2 1.000 810 JS3 1.000 648 JS4 1.000 707 Extraction Method: Principal Component Analysis Total Variance Explained Component Initial Eigenvalues Total % of Variance Extraction Sums of Squared Loadings Cumulative % 2.954 73.843 73.843 489 12.227 86.070 355 8.872 94.942 202 5.058 100.000 Total 2.954 % of Variance 73.843 Cumulative % 73.843 Extraction Method: Principal Component Analysis a Component Matrix Component JS2 900 79 JS1 888 JS4 841 JS3 805 Extraction Method: Principal Component Analysis a components extracted Appendix D: Pearson Correlation COMPUTE NW=MEAN(NW3,NW2,NW1) EXECUTE COMPUTE SB=MEAN(SB4,SB1,SB2,SB3) EXECUTE COMPUTE RM=MEAN(RM1,RM2,RM3) EXECUTE COMPUTE WR=MEAN(WR1,WR2,WR3) EXECUTE COMPUTE DO=MEAN(DO1,DO2,DO3) EXECUTE COMPUTE JS=MEAN(JS1,JS2,JS3,JS4) EXECUTE Correlations NW Pearson Correlation NW Pearson Correlation WR 273 ** 262 RM WR DO JS ** -.048 047 000 432 438 000 000 273 273 273 273 273 008 096 ** 892 114 000 000 262 ** 312 438 ** 474 ** 574 Sig (2-tailed) 000 N 273 273 273 273 273 273 -.048 008 104 -.047 067 Sig (2-tailed) 432 892 087 442 271 N 273 273 273 273 273 * Pearson Correlation RM Sig (2-tailed) N SB SB 273 Pearson Correlation 047 096 104 Sig (2-tailed) 438 114 087 139 021 ** 300 000 80 N Pearson Correlation DO 273 273 273 273 ** ** -.047 * 139 312 438 273 ** 579 Sig (2-tailed) 000 000 442 021 N 273 273 273 273 273 273 ** ** 067 ** ** Pearson Correlation JS 273 474 574 000 300 579 Sig (2-tailed) 000 000 271 000 000 N 273 273 273 273 273 273 ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Appendix E: Multiple regression analysis a Variables Entered/Removed Model Variables Variables Entered Removed DO, WR, NW, Method Enter b SB a Dependent Variable: JS b All requested variables entered b Model Summary Model R R Square a 757 Adjusted R Std Error of the Square Estimate 573 566 Durbin-Watson 40163 1.806 a Predictors: (Constant), DO, WR, NW, SB b Dependent Variable: JS a ANOVA Model Sum of Squares df Mean Square Regression 57.904 14.476 Residual 43.231 268 161 101.135 272 Total F 89.740 Sig b 000 a Dependent Variable: JS 81 b Predictors: (Constant), DO, WR, NW, SB a Coefficients Model Unstandardized Coefficients Standardized t Sig Collinearity Statistics Coefficients B Std Error Beta (Constant) 450 174 NW 181 028 SB 324 WR DO Tolerance VIF 2.582 010 275 6.481 000 883 1.133 042 344 7.661 000 790 1.267 161 031 210 5.207 000 979 1.021 259 038 313 6.828 000 758 1.320 a Dependent Variable: JS a Collinearity Diagnostics Model Dimension Eigenvalue Condition Index Variance Proportions (Constant) NW SB WR DO 4.861 1.000 00 00 00 00 00 059 9.045 01 58 00 36 00 041 10.932 00 39 10 32 31 025 14.036 09 01 40 10 69 014 18.470 90 03 50 22 00 a Dependent Variable: JS a Residuals Statistics Minimum Predicted Value Maximum Mean Std Deviation N 2.0133 4.6719 3.5769 46139 273 -1.58453 87187 00000 39867 273 Std Predicted Value -3.389 2.373 000 1.000 273 Std Residual -3.945 2.171 000 993 273 Residual a Dependent Variable: JS 82 83 84 Appendix F: Multiple group analysis CFA 85 SEM 86 SEM Group 87