Factors affecting employee commitment in banking industry in ho chi minh

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyễn Thị Minh Thuyên FACTORS AFFECTING EMPLOYEE COMMITMENT IN BANKING INDUSTRY IN HO CHI MINH CITY MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyễn Thị Minh Thuyên FACTORS AFFECTING EMPLOYEE COMMITMENT IN BANKING INDUSTRY IN HO CHI MINH CITY ID: 21110023 MASTER OF BUSINESS (Honours) SUPERVISOR: DR NGUYỄN ĐÔNG PHONG Ho Chi Minh City – Year 2014 Acknowledgements The time of studying MBus program in International School of Business (ISB) and the time of doing this master thesis, I had chances to work with many great professors and be supported from ISB staff Finishing this program, I not only learn more knowledge, skills and experience of the economy and management, but also provide many aspects of social life such as very nice friendship with many new interesting members of the program who work in many other fields Therefore, I would like to express my sincere gratitude and deepest appreciation to my supervisor, Dr Nguyen Dong Phong, for his continuous support of my thesis And I would like to thank all professors, leaders and members of ISB for their enthusiastic supporting me during whole program Last at all, I would like to thank my friends and colleagues not only for their enthusiastic supporting, participation and launching to help me finish research survey, but also take the best advantages during all my studying period Ho Chi Minh City, April, 2014 Nguyen Thi Minh Thuyen Abstract Employee retention is one of the most important practices of human resources management It contributes to achieve the target and it’s also an important factor to identify the sustainable development of an organization Especially in recent crisis stage, the banking sector is going down, employee’s turnover is a serious problem of some vietnamese banks Because employee’s turnover is an human resource organizational threat, so it’s worth to research We also have many theories and study for employee retention or commitment in many fields but there is not any closed research for vietnamese banking industry in Ho Chi Minh city, especially in this crisis period Purpose – This study analyzes the impact of the five variables based on reliable previous research are training, leadership, working environment, remuneration and policy to the employee commitment in banking industry in Ho Chi Minh city The result may help bankers have suitable HR practices to motivate, encourage and retain their employees Design/ methodology/ approach – A five-point Likert survey was conducted involving 170 banking employees in Ho Chi Minh city Scale reliability (Cronbach’s Anpha), Factor Analysis and Regression were performed to test and analyze the relationship between independents variables and dependent variable Findings – This study prove the significant impact of Effectiveness of Leadership practices, Employee’s Utility, Elements of Career Development to the Employee Commitment Basing on this research, bankers will have more alternative suitable HR practices depending on their conditions and their strategies Keywords – Human resource practices, employee, commitment, retention, leadership, working environment, remuneration Table of Contents CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research problems 1.3 Research objectives and questions 1.4 Research scope 1.5 Research methodology 1.6 Structure of the Thesis CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS 2.1 Original theories 2.2 Previous researches and conceptualization 11 2.3 The conceptual model and hypotheses of the research 21 CHAPTER 3: RESEARCH METHODOLOGY 23 3.1 Research design 23 3.1.1 Qualitative research 23 3.1.2 Quantitative research 26 3.2 Data analysis method 27 3.3 Research process 31 CHAPTER 4: RESEARCH RESULT 32 4.1 Demographic Sampling 32 4.2 Testing of reliability by Cronbach's alpha coefficient 34 4.3 Exploratory factor analysis (EFA) 36 4.3.1 Scale of employee commitment 36 4.3.2 Scale of research factors 37 4.4 Regression analysis 39 CHAPTER 5: IMPLICATION AND CONCLUSION 46 5.1 Discussion of finding 46 5.2 Practical implication 48 5.3 Limitation and suggestion for further research 54 REFERENCE 56 APPENDIX Group discussion outline 61 APPENDIX Questionaire 64 APPENDIX Descriptive Statistics 68 APPENDIX Testing reliability by Cronbach’s Alpha 72 APPENDIX Exploratory Factor Analysis (EFA) 73 APPENDIX Regression Analysis 76 List of Figures Figure 1.1 Components of operating costs of Vietnamese banks in 2012 Figure 2.1 Maslow’s original hierachy of needs five-stage pyramid Figure 2.2 Research model 22 Figure 3.1 Research design process 31 Figure 4.1.1 Gender structure 32 Figure 4.1.2 Marital status 32 Figure 4.1.3 Age group structure 33 Figure 4.1.4 Education structure 33 Figure 4.1.5 Type of Bank structure 33 Figure 4.4.1 Final research model 45 List of Tables Table 3.1 Adjusted measurement scale and scale encoding 25 Table 4.2.1 Cronbach’s Alpha reliability coefficient of employee commitment 34 Table 4.2.2 Cronbach’s Alpha reliability coefficient of research factors 35 Table 4.3.1 KMO and Bartlett’s Test for employee commitment 36 Table 4.3.2 EFA result of employee commitment 36 Table 4.3.3 KMO and Bartlett’s Test for research factors 38 Table 4.3.4 EFA result of research factors 38 Table 4.4.1 Pearson Correlation model 41 Table 4.4.2 ANOVA Testing result 42 Table 4.4.3 Model Summary 42 Table 4.4.4 Regression Coefficients 43 Table 4.4.5 Testing hypotheses 44 Table 5.2.1 Descriptive statistics of COM 49 Table 5.2.2 Descriptive statistics of EUTI 49 Table 5.2.3 Descriptive statistics of ELEA 51 Table 5.2.4 Descriptive statistics of ECAR 52 B CONTENT OF THE QUESTIONNAIRE Please kindly rate your agreement with the following statements by tick Rating scale:  in the appropriate box: [1] Strongly disagree TRAINING AND CAREER DEVELOPMENT I am properly orientated and trained upon joining this bank This bank has career development activities for employees Leadership practices help me to become a high performing employee Leadership practices enhance my job satisfaction Leadership practices make a positive contribution to the overall effectiveness Employees are well informed on matters important to them This bank has sufficient effort to determine the thought and responses of employees Organisational structure encourages horizontal & vertical communication LEADERSHIP WORKING ENVIRONMENT My working life balances with my family life 10 Overall this bank is a harmonious place to work 11 The physical working conditions are pleasant REMUNERATION AND REWARDS 12 Employees are given positive recognition when they have high performance 13 This bank pays well 14 This bank offers a good benefits package compared to other organizations 15 This bank offers good opportunities for promotion ORGANIZATIONAL CULTURE AND POLICIES 16 Policies and procedures are helpful, well understood and up to date 17 Progress towards meeting planned objectives is periodically reviewed 18 The organizational structure facilitates the way we things 19 This bank has a defined vision/mission to meet its goals ORGANIZATIONAL COMMITMENT 20 I feel a strong sense of belonging to this bank 21 This bank really inspires me best to my job performance 22 My values and this bank's values are very similar 23 I will stick with this bank indefinitely 24 I am proud that I am a member of this bank 65 IN VIETNAMESE Xin chào Anh/Chị, Tôi tên Nguyễn Thị Minh Thuyên, học viên Cao học ngành Quản Trị Kinh Doanh Viện Đào tạo Quốc tế - Trường Đại học Kinh tế TP Hồ Chí Minh – Khóa năm 2011 Hiện thực đề tài nghiên cứu yếu tố ảnh hưởng đến gắn kết nhân viên với tổ chức (phạm vi Ngân hàng thương mại Việt Nam) Rất mong anh/chị dành thời gian thực bảng khảo sát bên Tất ý kiến Anh/Chị có ý nghĩa với thành cơng nghiên cứu A THƠNG TIN CÁ NHÂN Anh/Chị vui lịng cung cấp số thơng tin cá nhân cách đánh dấu Giới tính:  vào tương ứng: Độ tuổi: Loại hình Ngân hàng thƣơng mại Anh/Chị làm việc (phân loại theo hình thức sở hữu):  Nhà nước  Cổ phần  Liên doanh  100% vốn nước ngoài/ Chi nhánh Ngân hàng nước ngồi Cơng việc Anh/Chị Ngân hàng:  Giao dịch viên  Nhân viên kinh doanh          Nhân viên nghiệp vụ hỗ trợ  Cấp quản lý Thời gian công tác Anh/Chị Ngân hàng tại: Dưới năm 2- năm 6- 10 năm Trên 10 năm Mức lƣơng binh quân Anh/Chị: Dưới triệu đồng/ tháng -11 triệu đồng/ tháng 12 – 20 triệu đồng/ tháng Trên 20 triệu đồng/ tháng 66 B NỘI DUNG NGHIÊN CỨU CHÍNH  Anh/Chị vui lịng cho biết mức độ đồng ý phát biểu sau việc đánh dấu vào tương ứng: [1] Hồn tồn khơng đồng ý [4] Đồng ý Tiêu chí đánh giá ĐÀO TẠO VÀ PHÁT TRIỂN Tôi định hướng đào tạo gia nhập vào Ngân hàng Ngân hàng có chương trình phát triển nghề nghiệp cho nhân viên LÃNH ĐẠO Lãnh đạo Ngân hàng giúp tơi thể tốt đạt hiệu suất công việc cao Lãnh đạo Ngân hàng làm tăng hài lịng tơi với cơng việc Lãnh đạo Ngân hàng có đóng góp tích cực đến hiệu chung Ngân hàng ln thông tin đầy đủ với nhân viên vấn đề quan trọng liên quan đến họ Ngân hàng quan tâm, ghi nhận suy nghĩ phản ứng nhân viên Cơ cấu tổ chức Ngân hàng giúp phát huy hệ thống thông tin dọc ngang MƠI TRƢỜNG LÀM VIỆC Cơng việc hài hịa, cân sống tơi 10 Nhìn chung Ngân hàng nơi hài hoà để làm việc 11 Điều kiện, công cụ làm việc trang bị tốt, đầy đủ LƢƠNG THƢỞNG 12 Nhân viên ghi nhận đánh giá tích cực đạt hiệu cao 13 Ngân hàng có chế độ đãi ngộ hợp lý 14 Ngân hàng có chế độ đãi ngộ cạnh tranh 15 Ngân hàng tạo điều kiện tốt để nhân viên thăng tiến CHÍNH SÁCH 16 Chính sách, quy trình Ngân hàng hữu ích, dễ hiểu tân tiến 17 Tiến độ thực mục tiêu xem xét định kỳ 18 Cơ cấu tổ chức Ngân hàng hỗ trợ tốt cho cơng việc 19 Ngân hàng có định hướng rõ ràng để hoàn thành mục tiêu đề SỰ GẮN KẾT VỚI TỔ CHỨC 20 Tơi thấy thuộc tổ chức 21 Ngân hàng tạo động lực tốt để tơi hồn thành cơng việc 22 Các quan điểm, giá trị Ngân hàng phù hợp với tơi 23 Tơi gắn bó lâu dài với Ngân hàng 24 Tơi tự hào thành viên Ngân hàng 67 APPENDIX 3: DESCRIPTIVE STATISTICS Gender Male Valid Female Total Singel Married Valid Other Total Age Valid Under 30 30-40 Over 40 Total Edu College Valid Bachelor Upper bachelor Total 68 Type State - Owned Bank Joint - Stock Commercial Bank Valid Joint – Venture Bank Wholly Foreign - Owned Bank/ Foreign Bank‟s Branch Total Job Valid Teller Credit officer Back officer Manager Total Valid Under years - years - 10 years Over 10 years Total Salary Under millions/ month - 11 millions/ month Valid 12 - 20 millions/ month Over 20 millions/ month Total Descriptive Statistics of COM Com3 Com1 Com4 Com2 Com5 Valid N (listwise) Rem4 Led5 Env2 Led6 Pol1 Rem3 Rem2 Valid N (listwise) Led3 Pol3 Led1 Led2 Pol2 Pol4 Tra2 Led4 Env1 Valid N (listwise) Descriptive Statistics of ECAR Tra1 Env3 Rem1 Valid N (listwise) 71 APPENDIX 4: TESTING RELIABILITY BY CRONBACH’S ALPHA Item-Total Statistics Times 1st 1st 1st 1st 1st 1st 72 APPENDIX 5: EXPLORATORY FACTOR ANALYSIS (EFA) EFA result of commitment scale KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Component Extraction Method: Principal Component Analysis C Com3 Com1 Com4 Com2 Com5 Extraction Method: Principal Component Analysis a components extracted 73 EFA result of research factors KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity df Sig Total Variance Explained Component 10 11 12 13 14 15 16 17 18 19 Extraction Method: Principal Component Analysis Rotated Component Matrix a Led3 Pol3 Led1 Led2 Pol2 Pol4 Tra2 Led4 Env1 Rem4 Led5 Env2 Led6 Pol1 Rem3 Rem2 Tra1 Env3 Rem1 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 75 APPENDIX 6: REGRESSION ANALYSIS Pearson Correlations Pearson Correlation Sig (1-tailed) N Model Summary Mod el R 846 a Model Regression Residual Total a Dependent Variable: COM b Predictors: (Constant), ECAR, EUTI, ELEA 76 Coefficients a Model (Constant) ELEA EUTI ECAR a Dependent Variable: COM 77 ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyễn Thị Minh Thuyên FACTORS AFFECTING EMPLOYEE COMMITMENT IN BANKING INDUSTRY IN HO CHI MINH CITY ID: 21110023... commitment in banking industry in Ho Chi Minh city? - What should bankers to maintain their employees? 1.4 Research scope The object of this study is the employees of banks in Ho Chi Minh city, one... the study was to investigate factors that impact on the employee commitment in banking industry in Ho Chi Minh city so that the banking employee was the unit of observation The employee worked