Low level of motivation in data analysis team at imperial tobacco vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business PHAM THI KIM HUYEN LOW LEVEL OF MOTIVATION IN DATA ANALYSIS TEAM AT IMPERIAL TOBACCO VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2020 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business PHAM THI KIM HUYEN LOW LEVEL OF MOTIVATION IN DATA ANALYSIS TEAM AT IMPERIAL TOBACCO VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2020 TABLE OF CONTENT LIST OF FIGURE LIST OF TABLE 1 Executive Summary Acknowledgements COMPANY INTRODUCTION 1.1 Company overview 1.2 Organizational structure PROBLEM CONTEXT 2.1 Symptoms 2.2 Symptom validation and justification 11 PROBLEM IDENTIFICATION 14 3.1 Problem mess 14 3.2 Potential Problems and validate the main problem 16 3.2.1 Income dissatisfaction - 16 3.2.2 Poor working environment 18 3.2.3 Low level of motivation 21 3.3 Updated preliminary cause and effect map 24 3.4 Problem justification 25 CAUSE VALIDATION 27 4.1 Potential causes 27 4.1.1 Lack of Intrinsic motivation: - 28 4.1.2 Low level of Extrinsic motivation: - 29 4.2 Cause justification 31 ALTERNATIVE SOLUTIONS 33 5.1 Alternative solution 1: Eliminate benefits inequality 33 5.2 Alternative solution 2: Ensure the employees’ job security 36 5.3 Solution justification 38 ORGANIZATION OF ACTIONS 41 6.1 Contents of organization of action 41 6.2 Timeline of implementation 42 CONCLUSION 44 SUPPORTING INFORMATION 45 8.1 Interview Guide 47 8.2 Questionnaire 50 8.3 Summary of transcripts 51 REFERENCES 69 LIST OF FIGURE Figure ITVN Operation diagram Figure ITVN Organization Chart Figure Turnover trend - Talentnet – Mercer post survey report 2018 Figure Top & Bottom Turnover - Talentnet – Mercer post survey report 2018 10 Figure Turnover rate at ITVN 12 Figure Preliminary cause and effect tree 15 Figure Updated preliminary cause and effect map 24 Figure Cause and effect map 31 LIST OF TABLE Table Total employee turnover rate at ITVN Table Breakdown employee turnover rate at ITVN in 2018 and 2019 Table Turnover rate of Data Analysis Team 11 Table Replacement costs of Data Analysis Team 13 Table Costs to implement solution 35 Table Costs to implement solution 38 Table Questionnaire 40 Table Survey results 40 Table Detailed action plan 41 Table 10 Implementation plan 43 Executive Summary Employees is often considered as the most valuable assets in all organizations Recruiting and retaining employees in organizations is not only tasks of Human Resources but also involves all other departments Therefore, managers and leaders in organizations should care about employees, understand their expectations as well as their difficulties, then give ideas to help organizations in establishing appropriate policies to attract and develop employees to retain them By doing so, organizations can enhance employees motivation and reduce employees turnover rate, which helps to increase employees productivity and company performance The purpose of this research is to find out the main problem and the root cause leads to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office recently With the secondary data provided by Human Resources Department and primary data collected during the in-depth interviews with three groups of the company’s leaders and the employees who are currently working in Data Analysis team and who are also left the company, it revealed that income dissatisfaction, poor working environment, and low level of motivation are potential problems lead to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office Further investigating the underlying problems by analyzing the interview results and using the theories from literature, the main problem is identified as the low level of motivation, especially extrinsic motivation, which caused by benefits inequity and job insecurity, that leads to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office After finding the root cause of high turnover rate, alternative solutions are designed and justified The solution to eliminate benefits inequity as well as reduce job insecurity by revising the company benefit policies and enhancing engagement meetings for sharing company strategies to the employees is suggested by the managers, selected by the indirect employees and supported by the company Director for execution Then, the detailed action plan of this solution is presented to the company for implementation to solve the problem Acknowledgements I would like to express my appreciation to all people who supported me during my studies First, I would like to send my thankfulness and special appreciation to my supervisor, Dr Nguyen Thi Mai Trang, who has kindly supported, guided, advised, and motivated me to complete this thesis Then, I would like to thank my managers, my colleagues at Imperial Tobacco Vietnam Representative Office who gave me chances for conducting interviews and spent their valuable times for giving me comments and opinions which helps me to come up the results of this thesis In addition, I would like to send my regards to all of my classmates of MBA for their support, encouragement and giving me strength in all the time writing this thesis COMPANY INTRODUCTION 1.1 Company overview Imperial Tobacco is a group of subsidiaries of Imperial Brands ( ), one of the biggest corporations in tobacco industry in the world Imperial Tobacco subsidiaries manufacture and trade a range of cigarettes, tobacco products, cigars, and tobacco accessories such as papers and tubes Imperial Tobacco International Limited Company in United Kingdom has established its representative office in Ho Chi Minh city, Viet Nam since 1995 and the office is called Imperial Tobacco Vietnam Representative Office (ITVN) ITVN’s scope of activities is a liaison office, conducting market surveys, identifying and accelerating the trade opportunities in Vietnam market on behalf of the Head Office in United Kingdom ITVN is not allowed to conduct any directly profitable activities in Vietnam, but only supports the Head Office (Imperial Tobacco International Limited Company in United Kingdom) to boost sales of the company’s products in Vietnam market Therefore, ITVN is responsible for spending investments to increase the quantity of the company’s products selling in Vietnam market, because the more company’s products are sold in Vietnam market, the more profits the Head Office are earned The key product of ITVN is Bastos cigarettes, which are producing by local manufacturer under the licensing contract with Imperial Tobacco International Limited Company in United Kingdom Bastos cigarettes have been produced and sold in Vietnam market for nearly 25 years, and up to now, Bastos cigarette brand is in the list of top ten selling brands in Vietnam, gaining its market share around 5% (based on data of AC Nielsen 2018) Bastos cigarette brand is strength in mainstream segment, having price ranges from 10.000 dong to 12.000 dong per pack of 20 cigarette sticks The key competitors of Bastos cigarettes in the same price segment is Thang Long cigarettes and Sai Gon cigarettes, which are produced by Vinataba, a state-own corporation The operation diagram of Imperial Tobacco in Vietnam market can be described in the Figure as below: Supply materials based on licensing contract Imperial Tobacco International Limited Company in United Kingdom (Head Office) Earnings profits on material supplied and Royalty fees on products sold Dong Nai Food Industrial Corporation (Manufacturer) Funding for ITVN activities Distribution channel of Bastos products in Vietnam market Investment to distribution Imperial Tobacco Vietnam Representative Office (ITVN) channel to boost sales Distributors in Vietnam Figure ITVN Operation diagram (Source: ITVN Management Department) Besides, Imperial Tobacco Vietnam Representative Office inherits six values from Imperial Brands: we can, I own, I am, we surprise, I engage, we enjoy Those values are focused to employees’ competency, performance, motivation, and retention Furthermore, Imperial Brands has built the Leadership Expectations that give opportunities for not only leaders but also employees to drive performance, to take accountability, to build capability, to lead by example, to improve and learn, and to create great teams 1.2 Organizational structure At the end of the year 2019, ITVN has 20 direct employees who are working in departments in ITVN, which are: Operation Support, Human Resource (HR& Admin), Finance, Marketing, Sales, and Business Intelligence Besides, ITVN also has 12 indirect employees working in Data Analysis Team who are reported to Business Intelligence Manager of ITVN Those indirect employees working in Data Analysis Team are having their labor contracts signed with the labor supply agency of ITVN, Humidor Company Though having salary paid by ITVN through Humidor Company, the recruitment process of Data Analysis Team is done by Human Resource Department of ITVN This means ITVN is responsible for recruitment, training, appraising, and paying salary to the direct and indirect employees However, although working in the same office, there is a difference in benefits between the direct employees and the indirect employees of ITVN, in which the direct employees - who have labor contracts signed with the Representative Office have some additional benefits such as yearly performance bonus, healthcare insurance for their family, while the indirect employees – who have labor contracts signed with the labor agency – not have those types of benefits Furthermore, the direct employees of ITVN are official headcounts of Imperial Brands, so they have employee codes which can be used to log in the intranet websites and access to online resources of Imperial Brands The organization structure of ITVN is described in Figure below Labor contra ct signed with ITVN Lab or contr act Data Analysis Team signed with Agency Figure ITVN Organization Chart (Source: ITVN Human Resource Department) Data Analysis team has been established since 2015, and the purpose of having this team is to collate and analyze market data of tobacco industry and ITVN’s competitors in Vietnam market The daily tasks of Data Analysis team are to input daily data collected from market to the internal system, keep track of Bastos cigarettes sell-in, sell-out volumes and cigarette inventories of distributors and wholesalers, to run and analyze the reports regarding the Bastos cigarettes and its competitors Those type of reports will help the Business Intelligence Manager having a clearer picture of the whole tobacco industry in Vietnam market so that he can support the Director for QUESTIONS and ANSWERS CODING CATEGORY (key answer) time to get used to their work, to get familiar with Spending for their team, and to coordinate smoothly with newcomers FINDINGS company expenses colleagues to have the teamwork tasks done In addition, other people in the team need to spend Hidden costs their time to guide newcomers, therefore, the of high team’s work is slowed down turnover We have to follow our Group policies on Follow Group employee performance evaluation process as all Income policies on salary information is reported to Group I not review salary review want to fail to comply with the Group policies Q6 and increase Magic wand Imaginary that you have a magic wand What would you to improve the turnover rate? Ms Tran Hanh Mr Tran Son In my opinion, I would suggest to offer them Strategy benefits same as other representative office based Equally Long term strategy Offer the same benefits employees as well as have their employment benefits as other teams contracts signed for permanent term for those for Data meet the requirements Analysis team I am working with management team for the next Permanent five years strategies We still need a data analysis labor Long term strategy Have permanent team for at least three years more So I would contracts contracts with propose to have permanent labor contracts for my Data Analysis team team Mr Andrew High turnover rate not only increases replacement costs, but also reduces the quality of works and Fully support to improve Wang affects to working spirit of other people We are turnover rate relying on their reports to make decisions for our to save investments to increase our market share in company Vietnam market, so any delay or mistake in the costs 57 QUESTIONS and ANSWERS CODING CATEGORY (key answer) FINDINGS reports will result in making wrong decisions and increase our spending on investments, thus reduces the company’s profits We need to find the root cause of this problem I fully support to improve the turnover rate within my approval boundary Q7 Can you give your opinion for the priority of your suggestions to improve the turnover rate? If possible, how soon the company can have detailed action plan and implement it? Ms Tran Hanh I think we should focus on improving benefits of Improving the indirect employees to reduce the inequality benefits Solution gap Going on, when we get our Group approval Eliminate benefits inequality for increasing number of employee, then we can Sign labor sign the labor contracts directly with those people contract and will not involve agency directly For the detailed action plan of increasing benefits, Become Timing for direct action plan employees it will take only one to two months for us to One to two review and prepare action plan months plan One to two months Mr Andrew In my opinion, we should treat the employees Review and fairly so that they not have any comparison increase Wang with others Reviewing and increasing benefits benefits Solution Eliminate benefits inequality for the indirect employees will make them feel satisfied and motivated In addition, the costs to Lower cost Better cost implement this solution is lower than other solution option, and it is easier for us to justify the use of these costs, rather than spending time working Easily justify Easy monitor with the agency to change the labor contract 58 QUESTIONS and ANSWERS CODING CATEGORY (key answer) FINDINGS terms, and tracking of employees’ spending on training and results I don’t think it will take more than two months for Maximum Timing for Within two us to implement this solution, as this task will not two months action plan months require much efforts from all departments Q8 In your opinion, you think the company should have clear career development plans to motivate the employees? Ms Tran Hanh We currently have clearly development plans for Have Require almost representative office based employees, but development Group No career development not for agency’s employees Reason that agency’s plan for direct approval employees are reported as indirect employees, employees and our Group currently not focus on investment to indirect employees So, it is very Do not have difficult for us to put this in the career development development plans, unless they are employed by plan for the representative office I think our Group also indirect not want to increase direct headcounts at this employees moment as the Group wants to reduce their responsibility on employment structure Mr Tran Son Understand that in this situation, it is difficult for us to have a clear career path plan for my team Need long term strategy But I think we should have a long term strategy for employee growth so that they feel engaged with the company Mr Andrew I not want to increase the number of direct Do not want employees at this moment, because we need to to increase Have long term strategy Wang have the Group approval for additional number of for business headcounts But I will embed to the Business Plan expansion 59 QUESTIONS and ANSWERS CODING CATEGORY (key answer) for long term strategy for the next years, which employees at we will expand our business and our this time FINDINGS organizational structure Then once we have Group approval for the Business Plan, we will Have plan for definitely cover the development plans for all the business employees Q9 expansion Can you share some information regarding the business plan for the next years? Do you have any plans to expand the business and recruit more people? Mr Andrew Our business is normal as previous years, as the Strengthen tobacco industry is very challenging We need to business, Wang strengthen our current business next year, and expand the Long term strategy Working on new strategies expand the market coverage in the next three market years coverage Our Regional and Group are working on the New year strategies for new generation products, so I generation hope that our expansion and growth Business Plan products will be approved soon THANK AND CLOSE 60 8.3.2 Group 2: Employees who are currently working in Data Analysis team at Imperial Tobacco Vietnam QUESTIONS and ANSWERS CODING (key answer) CATEGORY FINDINGS GREETING AND INTRODUCTION Q Thank you for spending your time to have meeting with me today + How are you? How is your current job? + How long have you been working for the company? Ms Nguyen I am working here for about years years working at Truc ITVN Mr Phan I’ve just joined for months Nhan months Mr Nguyen I am working with the company for year year Tung MAIN BODY QUESTIONS Q1 How is your daily tasks? How you feel about your daily tasks? PROBE: Do you like your job? Are you happy with your tasks? Ms Nguyen It’s good! It’s routine tasks, nothing Routine tasks Working interesting, but it’s also no challenging I feel comfortable environment Truc comfortable doing my tasks Mr Phan I am new in the team and am still learning from Easy tasks Nhan others, but I think my tasks are quite easy It’s Happy with her job Working environment Comfortable Working environment Love his job ok for me to these types of works Mr Nguyen It really enjoyed me I learned a lot working Enjoy tasks here Learn a lot Tung 61 QUESTIONS and ANSWERS Q2 CODING (key answer) CATEGORY FINDINGS Do you have any difficulty in your daily tasks? PROBE: working environment, income, colleagues, line manager? Ms Nguyen Very nice and convenient office workplace Nice workplace Working Our working room and facilities are very good and good environment Truc and convenience My manager and team relationship Good workplace members are very kind and helpful I am doing with colleagues Career routine tasks, nothing interesting, and it is also Easy tasks opportunity No future plan no challenging My tasks are easy that I am Do not know familiar to However, I really don’t know about future what I will be in the next three years And I am not sure if the company wants to maintain this team for long term Mr Phan People here are very helpful Whenever I have Helpful people Working Nhan troubles in my work, they will teach me and environment Friendly environment help me to settle it, especially my manager Mr Nguyen This task is my major subject in university so I Applying can apply my knowledge to my tasks I knowledge Tung really love this job My manager and people in Working environment Friendly environment Working environment Comfortable and my team teach me a lot People here are very friendly and helpful This is a great place to work Q3 How you think about working environment in the company? Ms Nguyen The office workplace is nice It is convenience Nice and for me to travel from home to work Other Convenient Truc people are very kind workplace However, I don’t see any development plan in No career convenient Career growth workplace, but my career, as I am doing the same tasks in the development 62 QUESTIONS and ANSWERS CODING (key answer) past two years Though my line manager No career teaches me a lot in my works, but I don’t see growth any career growth opportunity here CATEGORY FINDINGS no future career growth opportunity Mr Phan My teammates are very kind to me, and also Kindness Nhan other people in the company are very nice people Relationship People here are very supportive Whenever I Friendly and good environment have troubles in my work, they guide me and Nice workplace Working help me to settle it, especially my manager conditions environment The office workplace is very quiet so we can easily concentrate to our tasks Mr Nguyen I really love this job My manager and people Love the job in my team teach me a lot Helpful Motivation Love the job, but insecure Tung However, I don’t know how long the company colleagues job makes him will keep our team here It seems that the But feel job demotivated company strategy will change, and it may not insecurity require our team any more That makes me feel and uncomfortable and demotivated demotivated Q4 What you think about your salary? How is your opinion on HR policies? Ms Nguyen I have yearly salary reviewed and increased, so Have yearly I think my salary is acceptable salary review Income Company Salary is acceptable Truc My labor contract is not signed with the Have less policy Unequally representative office, so I don’t have some benefits than benefits benefits that other representative office based other people Labor contract people have It makes me think that I am Feel apart from is not sign working here as a contractor, apart from the the company with company That demotivates my working spirit representative office 63 QUESTIONS and ANSWERS CODING (key answer) Mr Phan Well, I have just graduated for one years, so I Happy with Nhan am happy with the salary that the company is salary CATEGORY FINDINGS Company policies Salary is ok paying me I still need to work for sometimes to have more experiences for my better career path Regarding the company policy, some policies Do not have Unfair are not applicable to us, such as monthly some benefits benefits telephone fees allowance, taxi usage and travel as others policy Those policies are only applicable for representative office staff That is unfair for us as we are working in the same office and for the same company Mr Nguyen My salary is not very attractive I know that the Salary is not salary will be reviewed and increased every attractive Tung year, but the percentage of increasing is not Income Yearly salary dissatisfaction increase is not much much Besides, our team don’t have some benefits Demotivated that others have, this makes us feel unequally Unequally benefits treated and demotivated Q5 What is the worst point makes you dissatisfied in your job? Ms Nguyen I am not sure whether the company will Not sure if continue to sign the labor contract with me I contract will Truc asked my manager but he was not sure about continue be Motivation Unstable job No future plan the future plan This makes me feel unstable signed working here and dissatisfied me Feel unstable I am worried about my future since I have unsecure job and no career development plan, that makes me demotivated 64 QUESTIONS and ANSWERS CODING (key answer) Mr Phan Unfair benefits are applying for our team Benefits Nhan CATEGORY FINDINGS Company policies Unfair benefits Mr Nguyen There is no career development, no career No career growth opportunity here No career development Development No career plan growth Tung development plans reduces my working No career inspiration and demotivates me growth opportunity Q6 Do you have any suggestions to improve your job satisfaction? Ms Nguyen I want to contribute my knowledge to work for Long term a long time with the company Therefore, I contribution Truc would like to have a long-term labor contract Official employee so that I will not worry about my future Mr Phan Company should change the policies that the Current Company Nhan current policies should be applicable for all policies should policy staff, not distinguish Improve benefits between be changed representative office based staff and agency’s Engagement staff, as all of us we are working for ITVN In More activities addition, we would like to have more worktogether activities so that we feel as one team working here Mr Nguyen I want to know about the company strategies to Want to know Future see if any growth opportunity The company opportunity Tung development plan is applied for the rep office strategy and Career growth based people but not our team, so I am not sure future growth about our future Q7 Do you have intention to find another job? 65 QUESTIONS and ANSWERS Ms Nguyen CODING (key answer) CATEGORY FINDINGS Well, if I feel unsafe with my career, I should think about that option Truc Mr Phan I am quite new in this team and I know that I Nhan need to contribute to the company However, I hope that I will be deserved for my contributions fairly, otherwise I may not think about long term commitment to the company Mr Nguyen It’s a hard question to answer I love this job I like the people here But when I feel unstable Tung and no chance for growth, then I may start looking around for a better opportunity THANK AND CLOSE 8.3.3 Group 3: Employees who had worked in Data Analysis team and already left Imperial Tobacco Vietnam QUESTIONS and ANSWERS CODING (key answer) CATEGORY FINDINGS GREETING AND INTRODUCTION Q Thank you for spending your time to have meeting with me today + How are you? How is your current job? + How many years you have been worked for the company? + When did you leave the company? Mr Nguyen I was working there for about and a half year year and I left there months before month working Thien at ITVN Ms Doan I had been working there for a year Hang I have left ITVN for months year 66 QUESTIONS and ANSWERS CODING (key answer) CATEGORY FINDINGS Income Low salary MAIN BODY QUESTIONS Q1 Can you share the reason why you leave the company? Mr Nguyen I got an offer letter with higher income Have higher income Thien Ms Doan I want to have a challenging job Hang Q2 Have a Career growth challenging job What is the worst point makes you dissatisfied working in ITVN? PROBE: working environment, income, colleagues, line manager? Mr Nguyen The working environment is not very Uncomfortable Working Poor working comfortable for me Although everyone is working environment environment Thien very kind, but sometimes I feel isolated environment because I am unconfident to talk to others Isolated Isolated Benefits because of We not have the same benefits as other Unequal personality departments, our payday is also later than benefits traits them as they usually receive their salary on Unfair benefits th 25 of very month but we usually receive on 30 th of the month Ms Doan No career development No future growth No career Hang We are unequally treated, this makes me feel growth unhappy and disappointed Unequal We know that our team has less benefits than treatment Working Poor working environment environment No career development others although we are working in the same office Q3 What you think about your salary at ITVN? How is your opinion on HR policies? 67 QUESTIONS and ANSWERS Mr Nguyen CODING CATEGORY FINDINGS (key answer) The salary there is lower than my current job Low salary Income Low pay In addition, benefits are not attractive We Uncompetitive dissatisfaction Unfair benefits Thien don’t have annual performance bonus, except benefits for the thirteenth month salary Some benefit policies are applied for only Unequal representative office people and that is unfair benefits for us since we are working for the same organization in the same office place I feel unhappy that the benefits of our team is lower than the others in the same office Ms Doan The salary there is higher than my current Have high Hang salary, but I am happy with my current job I salary Income Unfair benefits dissatisfaction in ITVN am an official staff of my current company, I Happy with receive all benefits as other people here If I current job work well, I will have opportunities for my Career growth career growth Q4 Can you provide your suggestions to help us in improving our employees’ job satisfaction? Mr Nguyen As I said that the benefits of our team is lower than others, this makes people in the Thien team feel unhappy and unfair So the opportunities company should review the policies so that all the employees feel fairly treated Ms Doan I think the company should think about fairly Hang policies for all people, not only by money but also by opportunities for growth THANK AND CLOSE 68 REFERENCES https://www.imperialbrandsplc.com/about-us/our-companies/imperial-tobacco.html Hernández von Wobeser L, Ramírez Escamilla G, Wobeser Iv Case Study Of Employee Turnover At Ice Cream Deli In Mexico Journal of Business Case Studies (Online) 2013;9(3):193-n/a https://tbavietnam.org/wp-content/uploads/2018/12/Highlights-of-2018-TRS-Results.pdf Michael C.G Davidson, Timo N, Wang Y How much does labour turnover cost?: A case study of Australian four- and five-star hotels International Journal of Contemporary Hospitality Management 2010;22(4):451-466 Abbasi SM, Hollman KW Turnover: The real bottom line Public Personnel Management 2000 Fall;29(3):333-342 Van Aken JE, Berends H Intake and Problem Definition In: Problem Solving in Organizations: A Methodological Handbook for Business and Management Students 3rd ed Cambridge: Cambridge University Press; 2018 p 47–73 Mercy AE, Idowu C, PhD., Charles IT, PhD., Chinelo E, Uyi OJ Financial benefits, emoluments and labour turnover: a study of selected banks in Alimosho local government area of lagos state Ife Psychologia 2018 03;26(1):265-278 Schuck AM, Rabe-Hemp C Investing in people: salary and turnover in policing Policing 2018;41(1):113-128 Carraher SM Turnover prediction using attitudes towards benefits, pay, and pay satisfaction among employees and entrepreneurs in Estonia, Latvia, and Lithuania Baltic Journal of Management 2011;6(1):25-52 10 Luna-Arocas R, Tang TL Are You Satisfied With Your Pay When You Compare? 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benefits inequity...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business PHAM THI KIM HUYEN LOW LEVEL OF MOTIVATION IN DATA ANALYSIS TEAM AT IMPERIAL TOBACCO VIETNAM MASTER OF BUSINESS