Low employee engagement at RSM DTL auditing company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Do Kieu Bich Ngoc 22130046 LOW EMPLOYEE ENGAGEMENT AT RSM DTL AUDITING COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR NGUYEN PHONG NGUYEN Ho Chi Minh City – March 2016 CONTENTS EXECUTIVE SUMMARY CHAPTER - PROBLEM IDENTIFICATION 1.1 Introduction about the Company and the central problem 1.2 Justify the existence of the problem 1.3 Justify the importance of the problem 14 CHAPTER - CAUSE VALIDATION 18 2.1 Potential causes of the problem 18 2.2 Cause justification 25 CHAPTER – ALTERNATIVE ANALYSIS and ALTERNATIVE CHOICE 31 3.1 Training program 31 3.2 Improving physical work environment 37 3.3 Rewards 41 3.4 Leadership 44 3.5 Strategy evaluation 49 3.6 Recommendation 51 CHAPTER – ACTION PLAN 52 CHAPTER – SUPPORTING INFORMATION 54 5.1 Interview transcript to explore the potential problems and central problem 54 5.2 Scale items to justify the existence of the problem 57 5.3 Questions for Interview at RSM DTL Company to test the existence of the problem 59 5.4 Interview transcript for testing the existence of the problem 60 5.5 Survey Questionnaire to justify the existence of the problem sent to RSM DTL, Grant Thornton and BOD Vietnam 63 5.6 Survey to justify the existence of the problem at Grant Thornton and BOD 65 5.7 Scale items to justify the importance of the problem 65 5.8 Interview transcript to justify the importance of the problem 67 5.9 Cause justification 69 REFERENCES 80 LOW EMPLOYEE ENGAGEMENT AT RSM DTL AUDITING COMPANY EXECUTIVE SUMMARY This topic is to research the effective solutions to increase the level of employee engagement at RSM DTL Auditing Company The first step is to find the central problem, to justify the existence of the issue and to justify the importance of the problem by analyzing the organization through interview and survey for employees The low level of employee engagement led to the higher turnover rate, the low performance, the absenteeism and the low organization commitment Secondly, the researcher investigates the potential causes of the problem and validates the root causes of the problem to find the appropriate strategies via literature reviews and in-depth interviews with the managers and the employees As the result, it was found that the physical working environment, the ineffective training program, the reward and the leadership are the most significant causes leading to the low level of employee engagement at RSM DTL The paper suggested the combination of solution relating to improving the training program, physical work environment, reward system as possible solutions to enhance the level of employee engagement at RSM DTL Auditing Finally, the action plan with detailed steps was presented to implement these strategies CHAPTER PROBLEM IDENTIFICATION 1.1 Introduction about the Company and the central problem RSM DTL Auditing Company established in 2001 is one of the top ten accounting and advisory firms in Vietnam with more than 140 employees serving mid to large publiclisted, multi-national and private companies in various industries The operation of DTL is divided into two fields including Auditing and Tax consulting With the mission “RSM DTL Auditing wants to be your great business partner by way of bringing creative added value solutions to your success in local and global environment” (RSM DTL profile, 2014), DTL endeavor to provide the clients with professional services following international quality standards adapted to Vietnam business environment In addition, the Company also pays more attention to build up a professional team to get effectiveness in working, to satisfy the increasing demand of customers and to develop the organizational culture instead of focusing on finding more clients However, the approach and application process have not been implemented and the employees continue waiting the positive changes In this paper, we focus on the Tax Consulting Department, currently comprising of forty three (43) employees In fact, we can get the kindly supports from the Management of Tax Department and the annual revenue often accounts for 70% of total Company‟s revenue Due to the variety of services provided to customer, this department is structured in eight groups and each group handles one main business line such as tax advisory, tax compliance, accounting, etc According to the Human Resource Department data, the number of employee leaving job has increased significantly (i.e 14.8% in 2013, 16% in 2014 and 19 % in the first six months of 2015) In comparison with the average turnover rate of industry (i.e around 15% for 2014 and the first six months of 2015), the turnover rate of RSM DTL was higher than that The figures show that the turnover rate rose by 3% in the first six months of 2015 and till not stop here From 2013 until now, the staff turnover rate has been on up trend and has the sign of continuous increase next time Additionally, based on the Data from the Human Resource Department, the number of leaving employees at senior position with over three year working experience account for 70% Together with the high staff turnover rate, the performance of employee has the sign of decrease as discussed with the Managing Partner in charge of Tax Department The working result from the staff sending to the managers was not good as expected and there were more mistakes in calculating and reporting Moreover, employees did not put in much effort to ensure maximum productivity for the Company; there were increased cases of tardiness and absenteeism, rework and poor quality of output, inappropriate and unnecessary socializing during working hours and a general lack of interest in the job There are many reasons leading to these consequences However, based on the intake meeting and interview with DTL members including Mr Le Khanh Lam – Managing Partner of Tax and Consulting Department and employees, the potential problems relating to decreasing work quality and productivity, employee appraisal and employee engagement need to be considered and analyzed at present Therefore, the problem mess was developed below to reflect the current situation of Company Increasing work volume Increasing customers Increasing work pressure Low employee performance High employee turnover rate Figure 1.1: The initial cause – effect map Firstly, from the last three months of the year 2014 until now, due to considerably increasing number of customers, the work volume as well as the pressure has also risen However, the workload assigned for each group was unequal and the complexity for each job was different In addition, the number of employee was constant at that time and the Company could not recruit more staff quickly to be in charged of new jobs Although the new clients often had the complex issues, the revenue received was not high as expected To attract the potential customers, the fee charge for services provided was competitive with other entities on the market For new clients, employee had to spend more time on working with them These conditions led to the decrease of work quality and productivity and the Tax Partner was aware of that as a critical issue need to be solved Nevertheless, this problem need a lot of time and can be related to many aspects such as human resource management, business strategies, cost and revenue estimation, etc to be solved thoroughly From discussion with the Tax Partner, the second problem was the employee appraisal process In fact, the applied assessment was based on the level of position instead of the performance of employee Additionally, the assignment for each staff at the same position was different according to the employee capability and the job complexity Moreover, the appraisal form was designed to collect the general information of staff and could not reflect sufficiently the working process of employee At present, DTL is preparing the new appraisal system including the detailed assessment for each job at the mid-year and the comprehensive appraisal at the ending of the year The last issue was related to the level of employee engagement As mentioned above, based on the data from the Human Resource Department, the number of employee leaving job has increased significantly (i.e 14.8% in 2013, 16% in 2014 and 19% in the first six months of 2015) Furthermore, the number of laborers coming in late has also risen considerably connected with the weekly employee attendance report of the Administrative manager The enthusiasm of staff has the sign of depression In addition, the Tax Partner observed that the employees had the signs of lacking the attention in work There were a number of staff including the new members under one year position frequently used the working time for individual needs such as surfing the internet, connecting the social network for chatting, reading online newspapers, making online transactions, etc When had the free time, they were not in the habit of improving the knowledge by themselves through reading the updated regulations, studying the customers‟ documents to broaden the experience on treating the real situations The specific characteristic of the tax advisory industry was that the rules, the laws could change and supplement day by day Therefore, the self-awareness of collecting the new was very important Currently, there are approximately 30% members spends more than one hour per day within working times for personal issues via internet network as mentioned above as the statistic figure from IT Department These activities cause the low intention in main tasks and leading to the inefficiency in work Moreover, the number of products sent to him for final review in recent times with lower quality than his expectations as well as missed the deadline was higher than the previous time These aspects can prove that the Company has the trouble with employee engagement Therefore, in line with the data collection from the Company and the results from other interviews with employees, under the limited time, resources and the acceptance of the BOD, the low level of employee engagement is considered as the most significant issue needed to be analyzed at the present 1.2 Justify the existence of the problem Firstly, it is very important to understand sufficiently the meaning of “employee engagement” In terms of engagement, people express themselves cognitively, physically, and emotionally while performing their work roles (Kahn, 1990) Engagement, on the other hand, is indicated by job resources such as job control, the availability of learning opportunities, access to necessary materials, participation in the decision-making process, positive reinforcement, and support from colleagues (Freeney, 2006) The Gallup Organization, defines engaged employees as those who, "work with a passion and feel a profound connection to their company" and "drive innovation and move the organization forward" (Harter et al., 2009) Employee engagement –refers to a psychological state where employees feel a vested interest in the company‟s success and perform to a high standard that may exceed the stated requirements of the job according to Schaufeli (2013) According to Schaufeli and Salanova (2012), the synthesis identified the most prevalent definition used by the research community was that of engagement as “a positive, fulfilling, work related state of mind This statement indicated that the engagement as a positive psychological experience when carrying out work activities and work tasks, and refers to feelings of “vigor” (e.g energy), “dedication” (e.g enthusiasm), and “absorption” (e.g feeling immersed) Vigor refers to high levels of energy while working, the willingness to invest effort in one‟s work, and persistence even in the face of difficulties; dedication refers to being strongly involved in one‟s work, and experiencing a sense of significance, enthusiasm, inspiration, pride, and challenge; and 5.8.3 Senior with more than three years of experience (Ms Hoa) As discussed with Ms Hoa – tax-consulting senior with more than three years of experience, she mentioned that she felt unhappy and she had never thought that she would continue working there for long time in future In fact, she could not received kindly support form the direct manager as well as other member in her team Therefore, she was always in being seperated emotion and could not be attached to the enperprise 5.9 Cause justification (support for Point 1, Chapter at Page 18) Table 5.9.1 – List of Potential causes with scale items based on theories Antecedence Work environmen t Wor typi need prov feed enco voic dev to s prob 69 Leadership Effe a hi dim com awa proc info tran inte stan (*) Leadership scale items  Takes a genuine interest in the personal development of his/her team members  Helps his/her team members identify and develop their skills and potential  Celebrates his/her team‟s successes  Encourages commitment to organization objectives  Ensures his/her team members are sufficiently trained to their jobs  Promotes a sense of loyalty and pride within his/her team  Encourages other to deliver superior levels of customer service  Approaches tasks with enthusiasm and energy  Personally strives to excel in all activities 70                   Supports team decisions, even if they differ from his/ her own view Seeks opportunities to improve the quality of service to customers Builds positive, long-term internal working relationships Willingly shares own knowledge and ideas with others Demonstrates good presentation skills Makes timely decisions, without unnecessary delay or haste Provides timely responses to requests, phone calls, or problem situations Deals effectively with multiple demands and conflicting priorities Takes action without prompting Anticipates workload and plans accordingly Handles multiple demands effectively Proactively deals with problems Keeps promises made Keeps others well informed Is readily accessible to discuss progress or assist with delegated tasks Communicates clear performance expectations Demonstrates high ethical standards Can be trusted with confidential information Team and co-worker relationship It betw the leve form one It c indi one supe subo The that are the the a sele met that Training 71 prep sche and train The prov orga an pros chal assi coun kep Attr com com com bon rew fina extr vou Career development Reward and recognition 72 Organization al policies The prov emp as to act a line wish Table 5.9.2 Interview transcript for Cause justification (support for Point 3.2, Chapter 3, Page 25) Respondent Question Is there any relationship between the training program and the level of employee engagement 73 ? Why/ Why not? Is there any relationship between the work 74 environment and the level of employee engagement? Why/ Why not? Is there any relationship between the reward, recognition and the level of employee engagement? Why/ Why 75 not? Is there any relationship between the leadership and the level of employee engagement? Why/ Why not? 76 77 Is there any relationship between the team and coworker relationship and the level of employee engagement? Why/ Why not? Is there any relationship 78 between the career development and the level of employee engagement? Why/ Why not? Is there any relationship between the company policies and the level of employee engagement? 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Thornton and BOD, the level of employee engagement at RSM DTL (i.e 2.3) was lower that those Therefore, it was found that the low employee engagement was a real issue at RSM DTL and needs to be analyzed... each question In short, the mean rate was approximately 2.3 and it demonstrated that the level of employee engagement at RSM DTL is lower than the average rate (2.5) 12 In addition, the above... to level of employee engagement 2.2.2 Training The interview found that training program is the most important cause contributing to the low level of engagement at RSM DTL Auditing Company Referring