Improving the performance management in techcombank

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 ABSTRACT TÓM TẮT LIST OF FIGURES INTRODUCTION Objectives and aims Research questions Scope of work Data source and processing Methods 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 1.2.3 Benefits to employees 1.3 Performance appraisal system: 1.4 Performance measures criteria 1.5 Errors should be avoided in performance evaluat 1.6 Performance appraisal methods 1.6.1 Attribute approaches 1.6.2 The behavioral approach 1.6.3 The results approach CHAPTER 2: FINDINGS 2.1 Macro analysis 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 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 employees to find out solutions then with employees to find out solutions apply the solutions seriously Other then forget and nothing any more situation _ No answer C Working environment No 16 Description Banking atmosphere is very pleasant, friendly 17 Supervisors always willingly listen yo enable you to contribute your ideas 18 Supervisors always encourage your cr and express your creativeness in your 19 Your job is very interesting and challe 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 forStrategies 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 supplement and apply seriously 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 Staff's expense accounting: - Salary - Social insurance, health insurance, expenses for a business trip - Other regulations for employees of organization Internal expense accounting: - Fixed asset expenses tools, other costs - Synthetizing financial divisions in the system - Managing shareholder items related to dividend, stock - Monitoring investment use of funds divisions expense 88 Reports and document archives: - Making reports of the whole regulations of Techcombank State Bank - Synthesizing data to Techcombank's internal management - Printing, binding and reports and tax reports according to accounting data regulations of Ministry of Finance - Managing document archives Payment accounting and tax operations: - Inter-branch payment accounting - VAT accounting, business income tax accounting Participation in check of financial accounts in the whole system: - Remote supervision to branches payment, clearing 89 - Checking branches, departments/divisions on the spot according to schedule and requirement of Department Performing other related works as required by Chief Accountant, Department, Controller Requirements needed for accountant position Criteria Education Knowledge of Economics and Accounting Knowledge of Law Knowledge of Mathematics Some necessary abilities which an accountant should have: Criteria Oral Expression Deputy 90 Working in group Problem Sensitivity Critical Thinking Making Decisions Problems Organizing, Planning, Prioritizing Work Establishing and Interpersonal Relationships Pressure controlling Skills which support well for accounting Mathematics Active Learning Systems Analysis 91 English Informatic Technology Work style: Attention to Detail Dependability Integrity Analytical Thinking Stress Achievement/Effort Flexibility Self Control 92 APPENDIX C: Method of giving mark to employees’ performance appraisal CONTENTS Compliance with Breaking general regulations of the bank Result implementing work system of Attaining < 85% indicators Assessment exterior clients by Complaints Assessment interior clients by Complaints Behindhand Dedicated Egoistic Cooperating spirit 93 No Responsibility spirit awareness Tidy Untidy Shunning Thoroughly Methodical difficult matters Casual Do understand purpose Grasping and using process procedures process/procedur and es Having Professional schedule striving sense Capacity to settle Shunning matters 94 independent matters Casual Standards Afraid responsibility Active conflict Sluggished, passive Self-control 95 ... 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. .. 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?... central to gaining competitive advantage (2) Performance management system has three parts: defining performance, measuring performance, and feeding back performance information A performance management