The influence of Applicants’ Perceptions of Fairness to Job Offer Acceptance in the Private-sector in Vietnam.

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY CAO VU HA TRANG THE INFLUENCE OF APPLICANTS’ PERCEPTION OF FAIRNESS TO JOB OFFER ACCEPTANCE IN THE PRIVATE-SECTOR IN VIETNAM MASTER’S THESIS BUSINESS ADMINISTRATION Hanoi, 2019 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY CAO VU HA TRANG THE INFLUENCE OF APPLICANTS’ PERCEPTION OF FAIRNESS TO JOB OFFER ACCEPTANCE IN THE PRIVATE-SECTOR IN VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 60340102 RESEARCH SUPERVISORS: PROF DR DANIEL ARTURO HELLER Dr TRAN HUY PHUONG Hanoi, 2019 ACKNOWLEDGEMENT I would like to express my deep gratitude to all those who have given me the possibility to complete this graduation thesis In preparing this graduation thesis, I have had generous help and advice from my teachers, my colleagues, my family and my friends, I would like to express my great thanks to all of them First of all, I would like to express my deepest gratitude to my supervisor Dr Tran Huy Phuong and my co-supervisor Prof Daniel Heller, who have given immeasurable help, constant guidance with many careful instructions, comments and valuable advices to me Without their support, I am not able to have a complete thesis Secondly, I wish to show my sincere thanks to all my teachers at VietnamJapan University, who have provided me with worthy lessons throughout two years of study Without their helps, it would be impossible for me to finish this work Last but not least, I would like to send my loving thanks to my family and my friends whose great love and care in both terms of spirit and health to encourage me to complete the thesis TABLE OF CONTENTS Chapter Introduction 1.1 Background 1.2 Research rationale 1.3 Research objective and research question 1.4 Research scope 1.5 Research methodology 1.6 Structure of the research Summary of Chapter Chapter 2.1 Literature review Overview of job offer acceptance 2.1.1 Definition of job offer acceptance 2.1.2 The importance role of job offer acceptance 2.1.3 The main factors affecting job offer acceptance 10 2.2 Overview of application perceptions of fairness 12 2.2.1 Interactional Justice 12 2.2.2 Procedural Justice 14 2.2.3 Distributive Justice 16 2.3 Empirical results of applicant perceptions of justice and job acceptance 19 Summary of Chapter 20 Chapter Research model 21 3.1 Analytical framework 21 3.2 Hypothesis development 23 Summary of Chapter 26 Chapter Methodology and Data Analysis 27 4.1 Data collection 27 4.2 Measurement test 28 4.3 Hypothesis testing 30 4.3.1 Descriptive statistics about the candidates participating in the survey 30 4.3.2 Cronbach’s Alpha Test 31 4.3.3 Exploratory Factor Analysis (EFA) 36 4.3.4 Pearson Correlation Test 38 4.3.5 Regression analysis 40 4.4 Analysis result summary 46 Summary of Chapter 47 Chapter Findings, Implications and Discussion 48 5.1 Findings and discussion 48 5.2 Implications 50 5.3 Limitations of research and future research orientation 53 Summary of Chapter 54 References 55 LIST OF CHARTS Chart 3.1 Conceptual framework of Konradt et al (2015) 22 Chart 3.2 Conceptual framework .23 Chart 4.1 Age group of candidates 30 Chart 4.2 Experience of interviewed candidates .31 LIST OF TABLES Table 4.1 Cronbach’s Alpha Test of Procedural Justice Perception scale .32 Table 4.2 Cronbach’s Alpha Test of Distributive Justice Perception scale .34 Table 4.3 Cronbach’s Alpha Test of Interactional Justice Perception scale 35 Table 4.4 KMO and Bartlett's Test 36 Table 4.5 Total Variance Explained 37 Table 4.6 Rotated Component Matrix .38 Table 4.7 Pearson Correlation Test 39 Table 4.8 Model summary .40 Table 4.9 ANOVA Test 41 Table 4.10 Regression result 41 Table 4.11 Tests of Interaction effects between GEN and PJ 43 Table 4.12 Tests of Interaction effects between GEN and DJ 44 Table 4.13 Tests of Interaction effects between EXP and PJ 45 Table 4.14 Tests of Interaction effects between EXP and PJ 46 Chapter Introduction 1.1 Background In Eastern philosophy, the use of people is highly valued and considered one of the prerequisites of success Especially in the field of business, people are considered one of the most important resources to decide the success or failure of the business A company or organization has strong financial resources, modern technical machinery but if the operation of human resource management is ineffective, it is difficult to develop long term Therefore, recruiting to provide quality human resources for the organization is the most important function performed (Rynes & Cable, 2003) However, the fact that people are the most expensive and difficult to manage resources in the business The high recruitment cost that were not associated with accepting the candidate's job offer affected the efficiency of recruitment and reduced the organization's success (Murphy, 1986) In the context of Vietnam’s integration, the wave of investment by foreign enterprises is increasing, leading to a fierce competition in the labour market Domestic enterprises are increasingly struggling to maintain and manage human resource, especially the high-quality human resource To survive and to grow in the marketplace, business owners need to have good human resources to achieve common goals of organizations This shown the great role of human resources and the recruitment of personnel (International Labour Organization and Asian Development Bank, 2014) In a human resource strategy, it is necessary to promote close relationships between employees, employees and administrators, employees and organizations (Legge, 1995) More interestingly, businesses no longer focused on control and submission but instead promote their working capacity and the cohesion of staff with the organization (Farnham & Pimlott, 1990) To achieve cohesion as mentioned above, ensuring fairness in the organization is essential In previous research, authors emphasized the role of organizational justice in order to gain the trust of employees, loyalty, high labour productivity promotes the ability of organizations to fulfill their pg vision Employees tended to show their confidence in the organization or supervisor and also became effective when they realized to be treated fairly by their organization Greenberg (1990) suggested that organizational justice has a strong impact on a number of organizational variables, including faith, commitment, job satisfaction, intention to quit, participation in work, productivity action and civic behaviour of the organization Therefore, justice policy should be applied by organizations (Akanbi & Ofoegbu, 2013) Moreover, the organizational justice aspects (procedural, distributive, interpersonal) should be applied in the organizational, practical and regulatory policies of the enterprise (Colquitt, Conlon, Wesson, Porter, & Nguyen, 2001) Derived from the above-mentioned empirical studies and analyses, a study of the perception of enterprise fairness and the acceptance of job offers of employees is essential This is the motivation for conducting a behavioural study of workers Therefore, the research topic “The influence of applicants’ perception of fairness to job offer acceptance in the private-sector in Vietnam” is selected for implementation 1.2 Research rationale This study was implemented for several reasons as follows: Firstly, in recent years, along with the trend of the world, integration process of Vietnam has become stronger than ever, especially in the private sector This integration process opens up great opportunities for employment for workers Typically, to join in the ASEAN Economic Community (AEC), Vietnam can create more million jobs equivalent to 1/10 of the increase in employment by 2025 of the entire ASEAN regions due to the impact of the formation of the AEC (International Labour Organization and Asian Development Bank, 2014) Thus, with multilateral and bilateral agreements, regional integration creates great opportunities for Vietnamese workers However, more competition with foreign businesses in the wake of strong foreign direct investment is a major challenge for domestic enterprises Therefore, understanding the behaviour of employees is necessary to pg provide operational policies, recruitment policies and personnel policies to attract high quality labour Of these factors, organizational equity is an aspect of policy This is the reason for this study to be conducted The pretension is that outputs of this research can contribute greatly to organizations Secondly, in Vietnam, research on workers’ behaviour is a common topic, but only focus on the analysis of factors affecting recruitment activities based on internal and external indicators In the selection of jobs, Pham (2013) studied the impact of a number of objective factors on the current job choice behaviour of high school students The research results show that the behaviour of career choice is affected by the school’s career orientation and family orientation In the period when workers join the organization, some authors conduct research on employee satisfaction with their work (Nguyen, Nguyen, Nguyen, & Nguyen, 2018; Nguyen P , 2018) Nguyen's research team (2018) studied on the subjects of construction workers and discovered factors including promotion opportunities and working conditions relationships with colleagues and work characteristics having a relationship with job satisfaction The above studies were typical of the recruitment phase that was preceded by posting employment The candidate stage was still confused when deciding whether or not to approve the job offer (Chapman, Uggerslev, Piasentin, & Carroll, 2005) This topic has not been paid much attention by the study authors in Vietnam Therefore, the analysis of candidate behavior in this period is limited In particular, currently, no research has been done on the topic of organizational justice and its relationship with the decision of job offer acceptances This is the motivation for this research to be carried out Thirdly, some previous researchers had conducted researches on the relationship between awareness of fairness and decision to job offer (Chapman, D S.; Webster, J., 2006; Walsh, Tuller, Barnes‐Farrell, & Matthews, 2010; Harold, Holtz, Griepentrog, Brewer, & Marsh, 2015; Konradt, Garbers, Böge, Erdogan, & Bauer, 2015) However, these authors conducted research based on a general organizational equity perspective that does not divide into different aspects of pg Hypothesis H1: Applicant’s perception of interactional justice (IJ) positively effect on job offer acceptance The results of regression analysis show that the IJ variable is not statistically significant in the model Therefore, research hypothesis H1 is rejected Hypothesis H2: Applicant’s perception of procedural justice (PJ) positively effect on job offer acceptance The results of regression analysis show that the PJ variable is statistically significant in the model Beside that the regression coefficient of the PJ variable is positive Thus, research hypothesis H2 is accepted Hypothesis H3: Applicant’s perception of distributive justice (DJ) positively effect on job offer acceptance The results of regression analysis show that the DJ variable is statistically significant in the model In addition, the regression coefficient of the DJ variable is positive Thus, research hypothesis H3 is accepted In addition, there is an interesting finding which is there are no statistically significant differences in the effect of the job seeker’s awareness on procedural justice and distributive justice to decide whether accept job offer or not by gender (male or female group) and the year of working experience (less one year of working experience, having 1-5 years of working experience, having more than years of working experience) In another word, the influence of the job seeker’s perception in procedural justice and distributive justice on job offer acceptance between research subject groups is similar Summary of Chapter The content of Chapter concerns the empirical analysis of the relationship between accepting work offers and the perception of justice in the interview process The results of quantitative analysis are given based on the summary primary data from the questionnaire survey It has reflected that the positive way between contributive and procedural justice with a decision to accept job offers In addition, there has no relationship between the perception of interactional justice pg 47 and job offer acceptance From the results of this study, the thesis concludes and applies in the final chapter Chapter Findings, Implications and Discussion 5.1 Findings and discussion Research on the relationship between interviewers’ awareness and the decision of accepting the candidate’s job offer is made on the secondary data from 138 candidates These candidates are in the private sector in Vietnam and show gender differences, diversity in age, work experience and careers In general, the results of quantitative analysis show that the perception of equity during the recruitment is related to the approval of the job offer This result is consistent with previous studies (Walsh, Tuller, Barnes‐Farrell, & Matthews, 2010; Harold, Holtz, Griepentrog, Brewer, & Marsh, 2015; Konradt, Garbers, Böge, Erdogan, & Bauer, 2015) Specifically, Konradt et al (2015) implied a study based on a sample of 182 candidates for the apprenticeship program of a major German industrial company and confirmed that awareness of fairness also affects job choice decisions Walsh et al (2010) studied at a large multinational company and found out that candidates who accepted job offers more preferred in awareness of job-related fairness and information sharing during the hiring process However, based on each aspect of fairness, research finds relationship in a positive way between contributive and procedural justice with a decision to accept job offers In terms of procedural justice, according to Sessa and Taylor (2000), job applicants prefered non-invasive, easy-to-manage selection methods, often with low predictive effect Besides, when employees felt that their views and concerns were absorbed in the decision-making process, they often supported instead of refusing to make decisions or implementing it in a coping way (Brockner, 2006) Explain the relationship between distributive justice and the decision of accepting work offers, applicant felt fairness in the allocation, it can motivate their appreciation in accepting the job offer (Folger & Cropanzano, 1998) In addition, a previous study pg 48 found that an unfair distribution of work can lead to employee resistance to decisions (Cohen-Charash & Spector, 2001) On the contrary, the thesis found no relationship between the perception of interactional justice and job offer acceptance In previous research by Hausknecht et al (2004), when these authors argue that justice interacts independently with the candidate’s job offer acceptance decision Recruitment is a sequential process in three stages The first stage is pre-employment or pre-inspection, candidates learn about work and organization, prepare documents to apply for This may also be the first time the candidate interacts with the company's representative The second stage is an evaluation to consider the suitability of the candidate and job requirements The tools used are inspections or interviews The final stage is the announcement of the results Two cases are proposed as a job offer or a denial Each candidate's perception of the recruitment process, organizational attitude and recruitment results are different (Gilliland, 1993) This study asserted the perception of justice according to the candidate's interaction after they had participated in the recruitment process To explain their research findings, some authors have used some of the previous theories organizational justice theory of Adam (1965), fairness heuristics theory of Lind (2001) However, one consideration explains why the candidate appreciates fairness as Maslow’s hierarchy of needs Accordingly, human needs are divided into two groups, namely basic needs and meta needs The basic need relates to human physical factors such as the desire to have enough food, water and rest Therefore, distributive justice is seen as a priority in ensuring the living needs of candidates when participating in the recruitment process Salary, income, working time is a top priority issue The perception of distributive fairness has the greatest impact on the decision to accept or reject the job offer because DJ is a main direct influence on their basic needs According to the updated thresholds which is public on World bank’s official web for classification by income based on GNI index, Vietnam that having GNI index in pg 49 2017 is 213,005.79 US$ is in the lower-middle income group Therefore, the major labor force’s need is also similar to the major human-being’s need in general that is the requirement of fulfilling the basic needs which are mostly depended on salary or wage That reason explains for the research result which is the concern about the Procedural justice and Distributive justice plays an important role in the process of making decision about job offer in Vietnam context whereas the Interactional justice factor is not something worth to worrying about when it comes to the consideration of accepting job offer Comparing with the high-income countries such as United State, United Kingdom or Australia where the justice theories were developed or examined, these theories and research result is reasonable as when the basic needs are satisfied, the higher needs such as being respected or self-esteem are concerned However in the context in Vietnam, the result that applicant’s awareness in interaction justice does not effect on the last decision is appropriate 5.2 Implications This study is an important input for businesses to implement a number of solutions to enhance the approval of job applicants The expression of fairness in the recruitment is an important factor for the candidate to decide to accept the job offer Understanding this issue helps businesses treat all applicants fairly to enhance their ability to join their organizations Even so, fair treatment will make sense for all candidates, but the degree of influence of job choice may vary between candidates (Harold, Holtz, Griepentrog, Brewer, & Marsh, 2015) Based on the research results, some recommendations are given below Research results show that the awareness of distributive justice is the strongest impact on approving job offers Therefore, this issue should be paid attention during the interview process or in the process of approaching the information about salary, working time of the company In order to attract candidates, organizations should be clear in making salaries and working hours commensurate with what the applicant is responsible for if he or she approves the job The truth is that most people work for money If the company pays low wages, many employers lose good candidates pg 50 For candidates to clearly identify, an ideal option is when posting recruitment information in the first stage, the company should give the salary, working time, the responsibility of the candidate if successful What will appeal to bright candidates who appreciate the outspokenness of the company in building a resource allocation regime Along with creating beautiful impressions with a professional recruitment process, employers also need to offer good remuneration and welfare policies to attract talented candidates Competitive salaries should be given, in line with industry trends in the market as well as candidates' aspirations and capabilities In addition to the salary of welfare policies is also something that candidates are very interested in Therefore, the company should skillfully utilize the advantages and strengths of its policies to attract good candidates by more competitive methods than rival companies For example, the company's salary may not be the highest, but in return, your company has a high level of responsibility, bonus benefits, a regular salary increase policy, good health care and insurance In general, the company should explain clearly so that the candidates can see the advantages to among the many "offers" they decide to "join" the company Regarding procedural justice, businesses should comply with the application of procedures consistently, especially recruitment procedures Secondly, the procedures are operated fairly Thirdly, the procedures are built based on accurate information Fourthly, procedures in business meet ethical and conscience standards Finally, candidates can express their opinions or opinions, feelings about recruitment procedures Specifically, any recruitment procedures that appear are consistent across all candidates Candidates feel that they have a great opportunity to apply their knowledge, skills and abilities with a suitable recruitment process Therefore, organizations should clearly explain the recruitment process for candidates These recommendations can support the transition from job offer to job acceptance (Harold, Holtz, Griepentrog, Brewer, & Marsh, 2015) pg 51 For recruiting high-level personnel to career opportunities, self-responsibility and benefits have been gathered in a long way of career Experienced personnel can be treated with more protection in the hiring process than less knowledgeable competitors Candidates with high status can make special judgments about themselves in tests because they believe their value has been proven before As a result, senior candidates were often sensitive and susceptible to being unable to meet fairness and standards in employment (Sumanth & Cable, 2011) This issue required that organizations to build a separate process between recruiting regular staff and management personnel These policies needed to meet the standards of justice maintenance according to the process and the allocation of justice as discussed above The analytical result on the interactive aspect shown that one of the factors that reduced the acceptability of job offers is the inappropriate assessment from the organization From this result, it was recommended that organizations should provide a suitable assessment for candidates to feel fairness in the recruitment process It was worth mentioning that organizations should make sure that candidates are treated with respect, not offer inappropriate questions and be provided with many opportunities to ask questions throughout the hiring process (Harold, Holtz, Griepentrog, Brewer, & Marsh, 2015) In addition to the above methods, in order to enhance the decision to accept work offers, some of the following measures are given: Job description is clear, easy to understand: If the employer posts recruitment information with full of confusing and generic tasks Job seekers must try to find out what the role or condition is needed to match the job, they can find another job that is simpler than the other Transparency on wages: The truth is that most people work for money If giving an incorrect salary or refusing to discuss how the salary is paid, many employers will lose good candidates Speaking about wages may be more ideal than when posting pg 52 employment information in the early stages This will attract bright candidates Those are people who appreciate the transparency of the company Transparent working environment: Attracting talented candidates also shows clearly and transparently with the work content This is not only reflected in setting a competitive salary, but also a multi-functional working environment, effective management, professional development and recognition when completing a good job 5.3 Limitations of research and future research orientation It has attempted to conduct a complete survey of the relationship between awareness of fairness and acceptance of private sector job offers in Vietnam Research has solved the research gap by adding aspects of organizational justice, including distributive justice, procedural justice and interactional justice However, because of limited time and resource, the study still has some limitations on collecting more detail information about industry classification, proposed salary, current applicant’s income The problem of the sampling area of the study is worth considering Within the scope of this study, the questionnaire was mainly distributed via online channel as Facebook which is contain diversity of fields and the geographical location of companies Although It could not collect absolutely these kind of above information, it would be reluctant to come to the conclusion that this result represented the private sector in Vietnam Therefore, it should be addressed in future research In addition, interviewing candidates who are aware of organizational justice is a recall interview Therefore, to ensure research ethics, conducting a thorough survey is essential To ensure stability in personnel operations, the recruitment department limits the interviewing of candidates who are participating in the recruitment process pg 53 Notably, this study is behavioral research, so it still has some information limitations when a person cannot remember all aspects of an organization when they first join This is the foundation for conducting other studies in the future Some of these factors will be added to increase the attractiveness of the study A topic that is expected to be implemented in the future is “Study the relationship between organizational fairness awareness and the decision to approve work offers: A case study comparing financial and non-financial enterprises” Summary of Chapter The content of Chapter is the conclusions from the quantitative analysis of the relationship between awareness of justice in the interview process and the decision to accept work offers From that content, it gives the application Besides, its content is the 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