Solution to improve working motivation at fragrance team in luxasia vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyễn Thùy Linh SOLUTION TO IMPROVE WORKING MOTIVATION AT FRAGRANCE TEAM IN LUXASIA VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2020 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyễn Thùy Linh SOLUTION TO IMPROVE WORKING MOTIVATION AT FRAGRANCE TEAM IN LUXASIA VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: LE THI THANH XUAN Ho Chi Minh City – Year 2020 Assignment Cover Sheet Master of Business Student Name NGUYEN THUY LINH Student Number 22180017 Subject Name Thesis Facilitator Dr Le Thi Thanh Xuan Title of Assignment Solution to improve working motivation at Fragrance Team in Luxasia Vietnam Length 64 pages Due Date May 29 , 2020 Date Submitted May 29 , 2020  th th Declaration: I hold a copy of this assignment if the original is lost or damaged  I hereby certify that no part of this assignment or product has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment  No part of the assignment/product has been written for me by any other person except where collaboration has been authorized by the subject lecturer/tutor concerned  I am aware that this work may be reproduced and submitted to plagiarism detection software programs for the purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism checking) Signature: ……………………………………………………………………… Note: An examiner or lecturer/tutor has the right not to mark this assignment if the above declaration has not been signed) SOLUTION TO IMPROVE WORKING MOTIVATION AT FRAGRANCE TEAM IN LUXASIA VIETNAM May 29th, 2020 Professor: Dr Le Thi Thanh Xuan Contents Chapter 0: Executive Summary Chapter 1: Introduction/ Company Overview Luxasia Group 1.1 General Information 1.2 Vision, Mission and Development Goals in 2020 2 Luxasia Vietnam 2.1 Organization of Luxasia Vietnam 2.2 Development Goals in 2020 Chapter 2: Problem Context Structure of Retail & Operations Department Fragrance Team Business Performance In 2019 Chapter 3: Problem Identification Symptoms Analysis Sales Revenue Decrease Potential Problems 2.1 Competition Between Channels 2.2 Ineffective Marketing Strategy/ Brand Development 2.3 High Turnover Rate 11 2.4 Poor Management (Literature) 2.5 Store Traffic (Literature) Diagram Of Symptom And Potential Problems 14 Problem Validation 15 Problem Consequences 17 Chapter 4: Cause Validation 19 Potential Causes .19 1.1 High Sales Target 1.2 Salary & Benefits (Work Motivation) 2 1.3 Family Reason 1.4 Unsatisfactory Work Performance 1.5 End of Contract 1.6 Poor Supervisor (Direct Manager) 1.7 No Process/ Manual (Working Process) 2 Initial Cause & Effect Map 28 Cause Validation 28 Final Causes & Effect Map 31 Chapter 5: Solution 32 Alternative Solutions 32 Add more Insurance for Beauty Advisor – Bao Viet Insurance: Healthcare 33 Develop Training Program 35 Solution Validation 37 Solution Implementation 38 3.1 Training Needs Assessment 38 3.2 Objective of application 39 3.3 Cost 40 3.4 Action Plan 40 Conclusion 41 Chapter 6: Supporting Documents 42 Literature Review 42 Research Methodology 42 2.1 Research Approach 42 2.2 Interview 42 Transcript 43 List of Figures / Graphs / Tables 53 Appendix 54 Resignation Form 54 Exit Interview 55 Reference 59 Chapter 0: Executive Summary Luxasia Vietnam achieved remarkable achievements in 2019 by the contribution of the whole employees There have been outstanding results of departments like Sales & Marketing Department, Channel Department, Cosmetic team,… However, Fragrance team which contributes nearly 40% of the company's revenue caused a disappointment of a loss of sales revenue and a growth sales decrease within the last years Due to the importance of the performance and also the business growth of Fragrance team as well as the organization, the aim of this research is to search out what the central factor and reason caused the present issues; then to propose solution to resolve the difficulties of Fragrance team The research almost focuses on qualitative approach by in-depth interview with specific employees for analysis Besides, the primary and secondary data were also collected to illustrate for the thesis Based on the information and the in-depth interviews with related employees and managers, the analysis is done with the aim to search out the deeper reasons There are several problems resulting in sales growth decrease at Fragrance team It is defined that High turnover rate is the central problem causing the symptom Moreover, the problem is the result of decrease on work motivation of employees at Fragrance team In many the studies, work motivation is indicated as one of the most important factors which impact on the efficiency of employee performance As a result, work motivation features a direct influence in a proportion way on the result of individual performance and organization business as well as the development of business Therefore, based on the theory, literature review, interviews with managers and self-experiences, the advice and proposal are proposed with the aim to resolve the present issue and improve the business results of Fragrance team The proposal is raised to apply on Fragrance team which has significant contribution to the sales revenue of the organization Because of characteristic of Retail & Operations Department, there may well be an additional consideration for applying on Cosmetic team with the aim to possess a connection, synchronization and fairness for whole Beauty Advisors Chapter 1: Introduction/ Company Overview Luxasia Group 1.1 General Information Luxasia Group was founded since 1986 and has been the leading omni-channel corporation of luxury product and brands in Asia Pacific market The object is to provide brands access to the largest retail market and e-commerce network in the beauty industry Group has made an effort to form a difference to consumers by bringing them the best brands from luxury, prestige to masstige categories Luxasia’s head quarter is founded in Singapore and the group has line-regional representatives of 15 offices like Singapore, Malaysia, Taiwan, Hong Kong, China, India, Indonesia, Philippines, Thailand, Vietnam and Myanmar, Australia … and a team of quite 2,500 talented staffs Luxasia Group is holding distribution rights for over 150 brands including Bvlgari, Guerlain, Hermès, La Prairie, Peter Thomas Roth, Prada, Salvatore Ferragamo, SK-II Additionally, Luxasia Group has successful joint ventures with Elizabeth Arden, LVMH Group, PUIG, and Yves Rocher 1.2 Vision, Mission and Development Goals in 2020 During operations years, Luxasia has achieved the success in developing and growing new brands as well as expanding into world markets Entering a new integration period, the group has taken off general vision and mission forward to the success of business   “Vision: Making a difference in every woman's life Mission: Asia Pacific’s beauty omni-leader” Source: https://www.luxasia.com/about/ Luxasia has 15 representatives in all over the world and hold the unique distribution of 150 brands including Perfume and Cosmetic With the fast development of market and also the trend of lifestyle, the vision and mission are targeted to attain the share market and to be beauty omni-leader, leading in Asia Pacific market Furthermore, Luxasia Group well knows that Human Resources are the key to drive the organization to the success So, among the overall development goals in 2020, the target is to focus and invest on talented employees The goal shows the board management’s orientation, foresight and attention to key human resources Luxasia Vietnam 2.1 Organization of Luxasia Vietnam Phuoc My International (called Luxasia Vietnam) was founded in 2009 and has been one of the leading companies in beauty market in Vietnam So far, Luxasia Vietnam has been the unique distributor of more than 20 well-known brands including fragrance and cosmetic All brands come from masstige to luxury, such as Guerlain, Calvin Klein, Mac Jacobs, Kora, Wet n Wild Products are arranged and distributed at counters and boutiques in most of the shopping malls: Diamond Plaza, Vincom, Takashimaya, Waston, Luxasia Vietnam located at Vincom Dong Khoi, 72 Le Thanh Ton, District 1, Ho Chi Minh City The location is at the center which helps for easily visiting stores and boutiques, controlling and solving problems in a fast way Below is an organization chart of Luxasia Vietnam The chart shows the operations and the scale of business Figure 1.1: Organization structure of Luxasia Vietnam (Internal report of Luxasia Vietnam, 2019) Luxasia Vietnam is being operated by coordinating seven functional departments with more than 120 talents All activities and strategies are forward to the development goals of the company and Group There is a transformation between Luxasia Group and Luxasia Vietnam in running the business Head of Departments will directly report to Country Manager and dotted 46 motivation to contribute to company There are other reasons: low income, no career path, no - low career process, family reason… process, income, no path, no family reason The reason why In case an employee does not achieve sales target in - not achieve hig turnover rate 2-3 months, we will consider to individual training target h relates to high sales and follow the results However, in case in next - no changes target? sales months, there are no changes, we must say sorry Does supervisor hig h turnover poor Manager of Team plays an important role in Team cause engagement and connection between staffs - not main problem employee However, It is not main problem to high turnover at rate As my management, there is just a case which Fragrance Team? has conflict between employees in a Team Wh high turnover Experienced staffs leaved company while new y rate leads to sales employees have not trained and run work smoothly - Experienced decrease? - Not productivity as experienced employee Team performance is not staffs leaved productivity as before As collected Yes, that’s right We always follow and evaluate information, there the performance of Team and individual We also are many resigned set KPI for each employee to follow and as cas due to target In case employees have bad performance, e unsatisfactory work show a bad working behavior and also not performance? follow as guidelines, we will have solutions to improve individual If they not improve, we must say sorry 3.3 Interview with Ms Thuong – Talent & Excitement Manager Ms Thuong has worked at Luxasia Vietnam since September in 2018 with the role of Talent & Excitement Manager She manages all activities and problems related to human resources at Luxasia Vietnam She has around 10-year experiences about human resources jobs before being T&E Manager at Luxasia Vietnam 47 Question Answer Coding (Key answer) Ms Van & Ms Thuy confirmed that the In kick-off meeting, problems about high turnover - High turnover rate rate have been focusing In HR data and reports, the … focusing top concern of number of resign employees is increasing and the - Resigned employees Fragrance Team is percentage is higher than the same period last year … Increasing high turnover rate And it is have an uptrend in final months of this - Strategy in 2020 What is your year - Decreasing turnover comment? As strategy in 2020, decreasing turnover rate of rate Retail Team, especially Fragrance Retail Team is top priority of Retail Team and HR Dept Why is it important? Many permanent staffs leaved their jobs while new employees have not experiences or knowledge as - staffs jobs leaved their an experienced employee Training and updating - new employees knowledge for new employees can spend more time - decreasing and costs to train them as an experienced staff performance of Moreover, this can lead to decreasing performance counters of counters; experienced staffs will be cover sales for new employees to achieve the sale target of counter to receive their commission Final, beauty industry has strict characteristics, narrow market, lack of human resources, low educated resource… The number of beauty companies in the beauty industry just more than 10 and lower 15 companies So it is hard to find human resources Why you say that In my opinion, no recognition and no opportunity no recognition and to develop to BA level make working motivation no promotion make motivation decreased decreased This leads to high turnover rate high turnover? Any reasons lead to No process and everything by manual taking - take more time 48 high turnover rate more time of employee These make job running at Fragrance slowly - job slowly … running Team? Any reasons lead to In my opinion, managing skill of Manager is high turnover rate important A manager will lead Team to success or - managing skill Manager at - ….important Fragrance fail By a case happened at Fragrance Plaza Hung Team? of Vuong, Manager had conflict with teammates and could not solve problems or competition in a Team So one of recruitment conditions, we have to recruit candidates who are suitable with the culture of company, also characteristic of industry As the report, termination Retail team has responsible to follow and manage there are Team to show the best performance They will many resigned case due - evaluate individual - employee turnover observe and evaluate by individual and support to to improve In case employees could not show better unsatisfactory work performance, a case of employee turnover happens performance How you think? How d you think In a working year, we have some cases maternity o about the reason leaves so we need to recruit some temporary to - maternity leaves end new launches of contract replace the employees When the employees back impacting on turnover high to work, the contract will end rate Fragrance season and - temporary employees - not main reason team? of human resources requires us to recruit some As report, data shown clearly of Besides, At high season and new launches, the lack - high is temporary employees to support for events and activities of team However, this is not main reason to high turnover rates of Fragrance team Because the cases are required to replace permanent employees in a short term, then, our employees also backed to work How you In my opinion, increasing basic salary could - support a part in 49 evaluate increasing about support a part in their life (employees) The salary solution could push the motivation of employees their (employees) life for Beauty and it helps us create advantage competitive in - the Advisors? recruitment and company branding push motivation of employees - create advantage competitive How evaluate abou t more benefits Beauty you It’s good to add more benefits for employees add However, it should consider carefully because of - good - should consider for the approval and application Advisors? Specific, add healthcare insurance of Bao Viet insurance? How you think Training is one of solutions to improve motivation - improve motivation about applying of employee It could be applied if a plan is detailed apply the solution develop program? 3.4 training and carefully designed In my opinion, it could be increasing salary and applied the solution increasing salary and develop develop training training program at the same time with the aim to program at the same be more efficient time Interview with Ms Van Anh – Business Manager – Fragrance Ms Van Anh has worked at Luxasia Vietnam with the position Business Manager since 2017 She takes responsible for all strategy and all activities of Perfume brands of Luxasia Vietnam Question How evaluate Answer you Luxasia is operating as distributor model, not about principle So marketing strategies and branding Coding (Key answer) - Distributor model - dependent on brand 50 marketing strategies? activities are dependent on brand principal We receive strategies and implement activities principal - regional guidelines following as regional guidelines How is thought conflict your Wholesales market is taken into account to expand about fragrance market However we have strategy and - Portfolio specific and detail wholesale policy for wholesales market Portfolio for this causing sales market is specific and detail to avoid conflict to decrease at brand and retail market Fragrance Team? How is the set sales target? 3.5 Sales target is set at the beginning of year as business of Luxasia Vietnam and regional Set at the beginning of year Interview with Ms Hien – Counter Manager With the 10-year working period at Luxasia Vietnam, Ms Hien has gained many experiences in beauty retail industry She started with the positon Senior Beauty Advisor and promoted to Counter Manager for years ago Now, she manages Counter at Takashimaya - the key Counter that contributing huge sales revenue to sales volume of Fragrance team Question How evaluate Answer you Promotion and brand activities are not appealed to about customer The program is not as interesting as the marketing Coding (Key answer) - not appealed - not interesting one of competitor such as Dior, Dolce & Gabbana, strategies of Hermes perfume brands? Why you think When wholesales channel is developed, customer that wholesales will not interest in shopping mall They can buy - Customers … not interest in shopping cause mall sales products at many sources with lower price decrease Fragrance Team? of - Lower price 51 Why high sales High sales target but lack of resource makes team target leads to sales performance decreased - high sales target - lack of resource decrease? Why sales target of Sales target of team is not achieved for many Team was months because experienced employees leaved decrease? experienced employees leaved company such as Tra My, Ngoc Nu This makes team productivity decrease How evaluate you Salary is lower than other company in industry and about benefits are not good Some employees are - Lower - Incentives ….fine salary and benefits attracted by salary and benefits of competitors so at Luxasia they leaved job Incentives scheme for employ is Vietnam? fine No opportunities for I think that no development opportunity is not main development and problem leading to much resign employees - no development opportunity is not training main problem are problems cause there are many responsibilities go with new title high turnover of the Although we want to be promoted, we know that rate Examples: I take around year to have an Fragrance opportunity to be promoted Deputy Counter Team? Manager and more than year for Counter How you about think Manager Many skills and knowledge need to be opportunities improved and updated at Luxasia Vietnam? How evaluate you Indeed, report sales numbers and bills and update about sales on system by manual is fine Sometimes high - fine process and the way seasons, we need much time to it Although it to work Counters? at takes much time, we are fine because we are not Process, familiar to use new technique manual jobs? How is working Working environment of Luxasia Vietnam is good environment at the The company provides full facilities for our jobs - full facilities 52 counter? What subjects you want to have? I want to have training classes about sales and management I think they’re important for sales management and managers to manage task and staffs 3.6 Interview with Mr Tung – Beauty Advisor at Fragrance Diamond Mr Tung started job since the end of 2017 He is working at Fragrance Counter at Diamond Plaza in Ho Chi Minh City Question Answer Coding (Key answer) How you think At Luxasia Vietnam, there are no programs of about programs of promotion and recognition to Beauty Advisor - no program promotion promotion recognition and Many Beauty Advisors worked for over years at recognition for the same level, then, they leaved and moved to employees? competitors with the higher level of and to Beauty Advisor - move moved competitors to with the higher level How is working We are supported from the company All environment at the stationaries are provided in full - Stationaries provided in full are counter? How you think We were participant in training classes to improve about training knowledge and skills It is helpful to my job programs Luxasia for - helpful to my job at Beauty Advisor? What subjects you want to trained? I want to have training classes about English or be communication skill - English communication skill 53 List of Figures / Graphs / Tables Figure 1.1: Organization structure of Luxasia Vietnam Figure 2.1: Retail & Operations Department structure of Luxasia Vietnam Figure 3.1: Sales contribution by year of Fragrance team Figure 3.2: Total sales of Fragrance team compared to Target by months in 2019 Graph 3.3: Diagram of symptom and potential problems Graph 3.4: Diagram of symptoms and problems (updated) Figure 4.1: Voluntary staff turnover at MNC – Top & Bottom Industries Figure 4.2: Turnover rate of Fragrance Team compared to Retail industry Figure 4.3: Reasons for termination of Fragrance employees Graph 4.4: Initial Causes and Effect Map Graph 4.5: Final Causes & Effect Map Figure 5.1: Herzberg's two-factor model Table 5.2: Estimated cost for Bao Viet insurance Table 5.3: Estimated cost for training courses Figure 5.4: Steps in a Training Needs Assessment Figure 5.5: Action plan for training and development for employees at Fragrance team 54 Appendix Resignation Form CÔNG TY TNHH QUỐC TẾ PHƯỚC MỸ PHUOC MY INTERNATIONAL CO.LTD RESIGNATION LETTER ĐƠN XIN NGHỈ VIỆC Full Name/ Họ Tên Gender/ Giới tính Employee Code/ Mã số NV DOB/ Ngày sinh Joining date/ Ngày gia nhập công ty Position/ Chức vụ Application date/ Ngày nộp đơn Department/ Bộ phận Resignation date/ Ngày bắt đầu nghỉ Reason/ Lý xin nghỉ: I will complete all handover before / Mọi công việc bàn giao hoàn tất trước ngày: Employee Nhân viên Date/ Ngày: ………………………………………………… Name / Họ tên: ………………………………………………… Approval/ Phê duyệt Agree/ Đồng ý o o Applied date of resignation/ Ngày nghỉ theo đơn Other day/ Ngày nghỉ k hác Disagree/ Không đồng ý o Violation on resigning reason/Vi phạm lý nghỉ o Direct Manager Quản lý trực tiếp Violation on time of notice/ Vi phạm thời gian báo trước T&E Manager Country Manager Trưởng phòng Nhân Sự Giám Đốc Quốc Gia Date/ Ngày : Date/ Ngày : Date/ Ngày : Name / Họ tên : Name / Họ tên : Name / Họ tên : Thời hạn báo trước nộp đơn 30 ngày hợp đồng có thời hạn 45 ngày hợp đồng không thời hạn 55 Exit Interview 56 57 58 59 Reference Sakuraki RJAS-ÉA Organizational Inertia and Excessive Product Proliferation 2016;70(1):119-31 Leonidou LC, Katsikeas CS, Samiee SJJoBr Marketing strategy determinants of export performance: a meta-analysis 2002;55(1):51-67 Havlíček K, Břečková PJCEBR SIGNIFICANCE AND DIFFERENCES OF Richardson RJTJoPS, Management S Measuring the impact of turnover on sales 1999:53-66 Wu W-WJEswa Beyond business failure prediction 2010;37(3):2371-6 Milkovich GT, Boudreau JWJI, Boston Human Resource Management, Richard D Irwin 1991 Perdikaki O, Kesavan S, Swaminathan JMJM, Management SO Effect of traffic on sales and conversion rates of retail stores 2012;14(1):145-62 Arnold EJTHCM Managing human resources to improve employee retention 2005;24(2):132-40 Ramlall SJJoAaob A review of employee motivation theories and their implications for employee retention within organizations 2004;5(1/2):52-63 10 Sihag AJIJoPP Factors affecting employee motivation for organizational effectiveness health care employees 2016;7(2):256 11 Hunjet A, Petak D, Kozina GJE, Proceedings SDBo EMPLOYEE MOTIVATION IN PUBLIC ADMINISTRATION 2016:40 12 Deci EL, Ryan RM Conceptualizations of intrinsic motivation and self-determination Intrinsic motivation and self-determination in human behavior: Springer; 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HO CHI MINH CITY International School of Business Nguyễn Thùy Linh SOLUTION TO IMPROVE WORKING MOTIVATION AT FRAGRANCE TEAM IN LUXASIA VIETNAM MASTER OF BUSINESS ADMINISTRATION... rate at Fragrance team According to Ashraf & Joarder(20), work motivation is one of factors influencing employees satisfactory and employee motivation would be increased when employees feel satisfied... types such as extrinsic motivation and intrinsic motivation( 12) Especially, as Vallerand RJ(13) mentioned that extrinsically motivations are factors bringing satisfaction and meeting the desire