Improving the performance management in Techcombank : Luận văn ThS. Kinh doanh và Quản lý: 60 34 05

vietnam national university, HANOI hanoi school of business Le Xuan Hoang Improving the performance management in techcombank master of business administration thesis Hanoi - 2007 vietnam national university, HANOI hanoi school of business Le Xuan Hoang Improving the performance management in techcombank Major: Business Administration Code: 60 34 05 Master of business administration thesis Supervisors: DR NGUYEN ngoc anh Ha Nguyen, MBA Hanoi – 2007 TABBLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii TÓM TẮT iv LIST OF FIGURES iii INTRODUCTION .1 Objectives and aims .1 Research questions Scope of work Data source and processing Methods .1 Significance Limitations Expected results Outline of thesis CHAPTER 1: THEORETICAL FOUNDATION 1.2 Benefits of performance appraisal 1.2.1 Benefits to the organization: 1.2.2 Benefits to supervisors .7 1.2.3 Benefits to employees 1.3 Performance appraisal system: 1.4 Performance measures criteria .11 1.5 Errors should be avoided in performance evaluation: 13 1.6 Performance appraisal methods 14 1.6.1 Attribute approaches 14 1.6.2 The behavioral approach 18 1.6.3 The results approach 21 CHAPTER 2: FINDINGS 24 2.1 Macro analysis 24 i 2.2 Techcombank introduction .25 Figure 2-1: Some Main Figures of Techcombank .26 2.3 SWOT Analysis 29 2.3.1 Strengths 29 2.3.2 Weaknesses 31 2.3.3 Opportunities 32 2.3.4 Threats .33 2.4 Survey analysis .33 2.4.1 The model of the survey 33 2.4.2 The survey’s content 34 CHAPTER 3: RECOMMENDATIONS .68 3.1 Bank's defined target of work performance appraising 68 Completion of job descriptions .68 3.2.1 Job descriptions: 68 3.2.2 Set up a performance appraisal criteria system: 70 3.3 Selection of appraisal methods 70 3.4 Build-up of multi-way appraisal system 71 3.5 Complete the interview of performance appraisal 72 3.6 Training provided to those who take charge of performance appraisal 73 3.7 Strengthening use of performance appraisal results to operations of human resource work of the Bank 74 3.8 Researching and strengthening deployment of personnel rotation 75 3.9 Build-up of business' atmosphere and culture 76 3.10 Action plans 78 CONCLUSION 81 REFERENCE 82 APPENDIX A: Questionnaire 84 APPENDIX B: Job description of an accountant and requirements 88 APPENDIX C: Method of giving mark to employees’ performance appraisal 93 ii LIST OF FIGURES Figure – 1: Some Main Figures of Techcombank 26 Figure – 2: Number of seniority in Techcombank 34 Figure – 3: Percent of seniority in Techcombank 35 Figure – 4: Number of current title 35 Figure – 7: Percent of education level 37 Figure – 8: Number and percent of Reasonableness of salary in TCB 38 Figure – 9: Number and percent of Fair in compensation policy 39 Figure – 10: Number and percent of reward based on results of performance 39 Figure – 11: Number and percent of timely praised when perform well 39 Figure – 12: Number of participate in short courses 40 Figure – 13: Percentage of participate in short courses 41 Figure – 14: Number of participate in long courses 42 Figure – 15: Percentage of participate in long courses 42 Figure – 16: Number of satisfaction level with compensation policy 43 Figure – 17: Percentage of satisfaction level with compensation policy 43 Figure – 18: Number and percentage of clearness for making plan and announcing to staffs 44 Figure – 19: Number and percentage of work suits with capacity 45 Figure – 20: Number and percentage of employees’ strengths are used and developed 45 Figure – 21: Number and percentage of encouraged and oriented to develop career 45 Figure – 22: Number and percentage of rotation through other positions 46 Figure – 23: Number and percentage of challenging with higher positions 46 Figure – 24: Number and percentage of sufficiently informed about human policies 46 iii Figure – 25: Number of complain with colleagues 47 Figure – 26: Percentage of complain with colleagues 48 Figure – 27: Number of complain with managers 48 Figure – 28: Percentage of complain with managers 49 Figure – 29: Number of administration’s reaction 50 Figure – 30: Percentage of administration’s reactions 50 Figure – 31: Number and percentage of people like working atmosphere 51 Figure – 32: Number and percentage of employees’ ideas are listened 52 Figure – 33: Number and percentage of employees’ creativeness is encouraged 52 Figure – 34: Number and percentage of people feel their job is challenging, interesting 52 Figure – 35: Number of the relationship with Techcombank 53 Figure – 36: Percentage of the relationship with Techcombank 54 Figure – 37: Number of satisfaction with current job 54 Figure – 38: Percentage of satisfaction with current job 55 Figure – 39: Number of motivation to perform assignments 55 Figure – 40: Percentage of motivation to perform assignments 56 Figure – 41: Number of employees’ expectations 57 Figure – 42: Percentage of employees’ expectations 57 Figure – 43: Number of managers’ reactions 58 Figure – 44: Percentage of managers’ reactions 59 Figure – 45: Number of employees’ trend 60 Figure – 46: Percentage of employees’ trend 60 iv INTRODUCTION Objectives and aims There are three objectives of this thesis when mentioning to performance appraisal activities, include gathering theories related to appraising performance (both concepts and models) A case study of Techcombank will be examined in order to gain a Clear understanding about the process of appraising performance in Techcombank then find out the exist issues in the process of appraising performance in Techcombank Finding out all the problems in the process of performance appraisal in Techcombank, the student has some aims include: Suggest some solutions to improve the process of appraising performance, human resource policies If these issues are improved, they will contribute to increase the effects of employees’ working and reinforce the loyalty of employees Research questions Two research questions are applied when examining the Techcombank’s case study are: How does the process of appraising performance in Techcombank deploy? And Is the process of appraising performance in Techcombank effective? Scope of work Scope of work is from 2005 to 2006 and the conducted area is departments in head office of Techcombank Data source and processing The data is collected from two sources: Primary (information is conducted directly from interview and survey to find out the employees’ opinion on the current performance appraisal of Techcombank) and Secondary (study documents related to appraising performance activities of banking sector; evaluation reports) Methods The method will be based on researching real case study of Techcombank and use questionnaire (Questionnaire is built based on theory, From the result of questionnaire the student then turn back to the reality of appraising the employees’ performance to improve the process of Techcombank) Interview or focus group will also be used when necessary Significance The student hopes that, the thesis will contribute significant meanings: (i) Study deeply about the process of appraising performance activities in Techcombank and improve the process; (ii) Assessing the employees’ performance activities at their true worth; (iii) Encourage and strengthen the loyalty and the relationship between the employees and Techcombank Limitations Because the time limitation, the thesis can not avoid mistakes Case study is only conducted in Head Office so it cannot reflect all the opinions of Techcombank’s employees The survey’s results are provided by Human resource department, therefore some sensitive information are biased, so the accuracy of questionnaire is not absolutely accurate Expected results Firstly, the student hope to find out the existing issues in the process of appraising performance in Techcombank then apply the theory of human resource management to contribute useful solutions to improve the practices of performance management in Techcombank Outline of thesis The thesis includes three chapters:  Chapter - Theoretical foundation: This section will summarize the theories of performance appraisal It will give the readers an overview of performance activities from clearly definition to the benefits of using performance management, the criteria used in performance appraisal as well as the performance appraisal models and their advantages, disadvantages of using them  Chapter - Findings: After analyzing the current position of Techcombank (SWOT analysis), the survey’s results and the data collected form secondary source, the thesis will point out the findings about the existing problems in Techcombank from policies to practice of deploying performance appraisal All the problems of Techcombank will be analyzed in the aspect of performance management  Chapter - Recommendations: Continue to the analyzed findings from chapter 2, this section will suggest some solutions and how to apply the performance appraisal methods in Techcombank The student hopes that, all the recommendations will be useful and effective for not only Techcombank but also for other commercial joint stock banks which have the same issues like Techcombank CHAPTER 1: THEORETICAL FOUNDATION Organizations that seek to gain competitive advantage through their workers must be able to manage the behavior and results of all employees One of the most important challenges managers face is managing the performance of those over whom they have authority (1) Performance management is defined as the means through which mangers ensure that employees’ activities and outputs are congruent with the organization’s goals Performance management is central to gaining competitive advantage (2) Performance management system has three parts: defining performance, measuring performance, and feeding back performance information A performance management system specifies which aspects of performance are relevant to the organization, primarily through job analysis It measures those aspects of performance through performance appraisal, which is only one method for managing employee performance It provides feedback to employees through performance feedback sessions so that they can adjust their performance to the organization’s goals Every employee works in an organization has different background, knowledge, attitude, motives, personal characteristics, skills, and so on which affect their performance at work In order to facilitate excellence in the performance of the employees in the organization, organization is required to identify right person for right job and ensure their contribution to the organization’s objectives Giving performance feedback and providing remuneration and reward based on contribution are two methods for facilitating better performance of the employees Employee performance appraisal provides a basis for providing (1), (2) Noe Hollenbeck Gerhart Wright “Human resource management”, Second edition 1996, p.196 CONCLUSION In the changing context, Vietnam is hurrying to integrate into global economy, the demand for high quality human resource is the most interested consideration of every company Human resource management is always an “efficient hand” for the success of a company With a long-term strategy, a company not only can retain and develop talent employees but also increase a number of others In order to detect the talent employees in company, the managers should know how to create motivations to encourage their employees promote their ability Thenceforth, the manager will have the foundation to acknowledge and evaluate Therefore, the company must set up an appraisal system to accurately evaluate employees When comparing all the managerial skills with each other, may be human resource management skill is the most difficult one However, it is very important in managing human resource Having an accurate employees’ performance appraisal is an art Many organizations have mistake when think “human resource management” only means keeping track of work hours, monitoring administrative work, assigning responsibilities, paying salary, so on but don’t establish a performance appraisal mechanism to evaluate employees’ abilities and the whole organization, set up comment and reward system by money and non-money, encouraging and orienting system, and making long term working plans methodically and continuously In general, appraisal activities make the cost of the organization increase, but in return for this, he employees will more and more ardently contribute 100% - 110% labor productivity to the organization and the most important thing is that, it create and strengthen the employees’ loyalty to the company The aim of this thesis is to help Techcombank evaluate and utilize efficiently their human resource to reinforce and develop the strengths, take full advantage of opportunities and eliminate weaknesses in order to lead in the Vietnam banking and finance market The writer hope that, this thesis will be useful for not only Techcombank but also for other banks which have similar conditions 81 REFERENCE Vietnamese: “Nhân lực lĩnh vực tài tiền tệ: Giữ cách nào?” - Diễn đàn doanh nghiệp, ( 2007), article, www.kiemtoan.com.vn “Bí đánh giá nhân viên” - Thời báo kinh tế Sài Gòn, (2007), article, www.danong.com Mai Hạnh, “Đánh giá nhân viên nào?”, (2006), www.dantri.com.vn “Đánh giá nhân viên cuối năm”, (2007), www.vietbao.vn “Nhân viên nghỉ việc, sao?”, (2006), www.bwportal.com.vn “Đánh giá thực thi công việc nhân viên”, (2006), www.business.gov.vn “Để đánh giá nhân viên có hiệu quả”, (2007), www.inpro.vn “Nghệ thuật khích lệ nhân viên”, (2007), www.bwportal.com.vn “Xây dựng hệ thống đánh giá thực thi công việc nào”, (2006), www.business.gov.vn 10 “5 lời khuyên đánh giá kết làm việc nhân viên”, (2007), www.crmvietnam.com 11 “Nhân viên có lực, kho báu chưa khai thác”, (2006), www.unicom.com.vn English: Noe Hollenbeck Gerhart Wright, “Human resource management”, chapter Leslie W Rue and Lloyd L.Byars, “Supervision - Key link to productivity”, chapter 11 Milind Kotwal, “Model and method for process oriented employee performance appraisal” James, “Seven ways to improve performance appraisal”, (1993), HRMagazine 38 “How Do I Evaluate an Employee's Performance” http://content.ffas.usda.gov/managers/how_eval_performance.htm#start#start 82 “Performance appraisal”, http://www.performance-appraisal.com/intro.htm “Employee appraisal”, http://www.bizhelp24.com/employment-and-personaldevelopment/employee-appraisal-2.html “Performance appraisal process”, http://www.businessballs.com/performanceappraisals.htm “Key to an effective performance appraisal program, Design factors” http://web.cba.neu.edu/~ewertheim/hrm/perfapp.htm 10 “What is MBO?” http://www.valuebasedmanagement.net/methods_smart_management_by_obje ctives.html 83 APPENDIX APPENDIX A: Questionnaire This survey is designed in order to find out about the policy, the practical management of human resource, and the employees’ expectations about the bank’s compensation policy Based on the survey’s result, the human resource department will propose strategies and specific actions to improve policies and administrative methods which can help Techcombank reach strategic target in near future General information a) Seniority in Techcombank: 10 years b) Current title:……………………………………………………………………… c) Graduation:  High school  University  Master  Doctor Compensation policy, human management activities and working environment Tick the content you choose in the evaluation survey A Compensation policy: No Description Right Wrong In comparison with the average income of banking industry, your income in Techcombank is reasonable Compensation policy of Techcombank (reward and punish) is fairly applied Regulations concerning rewards and punishments of Techcombank are always relied on the results of performance You are always praised immediately when you perform well your assignment You always take part in short courses followed by annual training plans of the bank (1 – 5: never – rarely – sometimes – usually – always) 84 Are you encouraged, created good condition to participate in long course? (1 – 5: never – rarely – sometimes – usually – always) Are you satisfied with the current compensation policy of the bank? (1 – 5; 1: Very disappointed; 2: Disappointed; 3: Normal; 4:Satisfied; 5: Very satisfied) B Human management activities No Description Goal setting and plan making missions are very clear Right Wrong and announced to all the staffs clearly and sufficiently The job you undertake is suitable with your capacity 10 Your strengths and ability are always used and developed to a high degree 11 You are always encouraged and oriented to develop your career 12 You are rotated through different positions in order to gain experience and develop creativeness 13 You are always encouraged and given a trial of higher position when the bank need to assign people in these positions 14 Are you sufficiently and clearly provided information about banking human policies? 85 15 Have you ever complained (by oral or written) about the bank’s human policies? + with colleagues Yes No + with managers and/ or personnel staffs Yes No If any: Do manager and / or personnel staffs have any reaction with your complaints? They have no reaction Openly and constructively discuss with Openly and constructively discuss with employees to find out solutions then employees to find out solutions then apply the solutions seriously forget and nothing any more Other situation _ No answer C Working environment No 16 Description Right Wrong Banking atmosphere is very pleasant, comfortable, friendly 17 Supervisors always willingly listen your ideas and enable you to contribute your ideas 18 Supervisors always encourage your creativeness and express your creativeness in your job 19 Your job is very interesting and challenging 20 How you evaluate the relationship between you and Techcombank? (1 – 5; 1: very bad; 2: Bad; 3: Normal; 4: Good; 5: Very good) 21 In general, are you satisfied with your current job? (1 – 5; 1: Very disappointed; 2: Disappointed; 3: Normal; 4: Satisfied; 5: Very satisfied) 86 22 Do you have any motivation to perform your assignment? (1 – 5; 1: Never; 2: Rarely; 3: Sometimes; 4: Often; 5: Always) 23 What you expect most from the bank? (Choose one item in the followings)  Annual salary increase  Short training courses  Receive reward by money for  Strategies and business plans are performing well assignments imparted to all the employees clearly  Promote to higher position and specifically  Praise  Other elements _ 24 What is the bank reaction when employees quit their job? Promising to improve the policy but Negotiating with specific case after that doing nothing Promising to improve the policy Recruiting immediately new staff to and apply seriously supplement Other _ Doing nothing 25 What is your intention in future? Loyal to the bank Change to other position in Techcombank if there is a better chance Change to other job (in other bank) if there is a better chance Thank you very much for your time 87 APPENDIX B: Job description of an accountant and requirements Works Regular Measurement Distributed Reference regulations criterion time procedures Staff's expense accounting: - Salary - Social insurance, health insurance, expenses for a business trip - Other regulations for employees of -Twice a month - Once a month -On occurrence - Accurate Financial - Timely 15% - Complete regulations, salary regulations - Proper regulations organization Internal expense accounting: - Fixed asset expenses accounting, labour tools, other costs - Once a month - Synthetizing financial expenses norms of - Weekly divisions in the system - Annual - Managing shareholder funds, dividend and - On occurrence items related to dividend, stock - Monitoring divisions in carrying out investment costs of fixed Asset/labour tools, use of funds - - Accurate regulations, - Correct reflection - TCB Financial of account regulations - Complete - Serious 25% - Close monitoring - According regulations Financial to instructions - Regulations for expenses allocation accounting on departments, 88 divisions Reports and document archives: - Accurate - Making reports of the whole system on the regulations of - Close compliance Techcombank and Vietnam State Bank - Synthesizing - Monthly data to reports for - Daily Techcombank's internal management - Weekly - Printing, binding and archiving accounting - Weekly reports and tax reports according to accounting - Timely - Tidy - Easy reference 30% - According to Regime of accounting record regulations - Complete data regulations of Ministry of Finance - Non-loss - Managing document archives Payment accounting and tax operations: - Inter-branch payment, clearing and other payment accounting - VAT accounting, business income tax - Daily - Monthly - Accurate - Complete 15% - Prompt Payment procedures accounting Participation in check of financial accounts in - Monthly - Timely error the whole system: - According to finding - Remote supervision to branches schedule - Risk prevention 10% 89 - Checking branches, Centers, departments/divisions on the spot according to schedule and requirement of Department Performing other related works as required by Chief Accountant, Deputy Manager of - Daily Department, Controller - Active - Hard working 5% Requirements needed for accountant position Criteria Description Education Graduated from university, have specialty in accounting or auditing Knowledge of Economics and Knowledge of economic and accounting principles and practices, the financial markets, Accounting banking and the analysis and reporting of financial data Knowledge of Law Knowledge of economic and accounting principles and practices, the financial markets, banking and the analysis and reporting of financial data Knowledge of Mathematics Knowledge of arithmetic, algebra, geometry, calculus, statistics, and their applications Some necessary abilities which an accountant should have: Criteria Description Oral Expression The ability to communicate information and ideas in speaking so others will 90 understand, create an opened communication environment Working in group The ability to co operate effectively with others Problem Sensitivity The ability to tell when something is wrong or is likely to go wrong, recognize there is a problem Critical Thinking Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions or approaches to problems Making Decisions and Solving Analyzing information and evaluating results to choose the best solution and solve Problems Organizing, problems Planning, and Developing specific goals and plans to prioritize, organize, and accomplish your work Prioritizing Work Establishing and Maintaining Developing constructive and cooperative working relationships with others, and Interpersonal Relationships maintaining them over time Pressure controlling Maintaining the effectiveness of working under high pressure Skills which support well for accounting Mathematics Using mathematics to solve problems Active Learning Understanding the implications of new information for both current and future problem-solving and decision-making Systems Analysis Determining how a system should work and how changes in conditions, operations, 91 and the environment will affect outcomes English Proficient in specialist English Informatic Technology Proficient in using MS Office and accounting software Work style: Attention to Detail Job requires being careful about detail and thorough in completing work tasks Dependability Job requires being reliable, responsible, and dependable, and fulfilling obligations Integrity Job requires being honest and ethical Analytical Thinking Job requires analyzing information and using logic to address work-related issues and problems Stress Job requires accepting criticism and dealing calmly and effectively with high stress situations Achievement/Effort Job requires establishing and maintaining personally challenging achievement goals and exerting effort toward mastering tasks Flexibility Job requires being open to change and to considerable variety in the workplace Self Control Job requires maintaining composure, keeping emotions in check, controlling anger, and avoiding aggressive behavior, even in very difficult situations 92 APPENDIX C: Method of giving mark to employees’ performance appraisal APPRAISAL MARK CONTENTS Compliance with general regulations of the bank Result Breaking the system Breaking >3 Breaking 85% Attaining Unsatisfied Non-complaint indicators Assessment by exterior clients Assessment by interior clients Complaints Complaints Behindhand Dedicated Egoistic Cooperating spirit Meeting requirements Doing form's sake Working well Hard-working Coordinating on Know requirement to colleagues help Non-breaking Exemplary Exceeding Exceeding targets standard of quality/quantity Good assessment Maintaining of client developing clients Good Creating advantage coordination Wholeheartedly to work Wholeheartedly working for public work Sharing difficulties and and responsibilities For success of organization 93 No self- Responsibility spirit awareness Tidy Thoroughly Untidy Disorder Shunning Acting difficult matters obligation Methodical Do Grasping and using process procedures and purpose Clean and tidy process/procedur simple briefly Processing exemplary requirement of Ignoring simple process/procedur phases es while processing es Effort to attain Absolutely settling final results related matters norms Professional schedule applied norms a Good compliance to settle work Well applied aims of work work Good Attitude of Having Methodical a Complying with Well work as required and Understanding not of Finding solution of Self-aware Self-aware Tidy, methodical implementation simple matters understand on obligation on Doing Casual Working Imperfect not Plan is implemented not Under plan seeking perfection striving sense Capacity to settle Shunning matters Unwilling feasible self studying and and Possibly Settling Well completed target and plans put forward Well implemented 94 independent settle matter implemented matters inefficiently when successful work work in difficult having when having no resources enough resources enough resources Not Casual image of the Compliance with Correct, upright Personal principle + Organization's organization Standards Afraid Active corresponding to of Contenting in the responsibility predetermined conflict framework Knowing promote work to Discovering Finding conditions to implement work and using well chance to implement work Establishing Self-control Sluggished, Working passive assigned as Know to arrange Good preparation source work for work of implementing work 95