Factors affecting employee performance a study on joint venture companies in vietnam

Lunghwa University of Science and Technology Department of Business Administration Thesis for a Master’s Degree Factors affecting employee Performance: a study on joint venture companies in Vietnam Researcher : Nguyen Van Dzung Supervisor : Professor Kenneth Wang Supervisor : Dr Dao Van Tien November 2017 Lunghwa University of Science and Technology Approval Certificate of Master's Degree Examination Board This is to certify that the Master’s Degree Examinations Board has approved the thesis Factors affecting employee performance: a study on joint venture companies in Vietnam published by Mr Nguyen Van Dzung in the Master Program of Graduate School of Department of Business Administration Master’s Degree Examination Board Board Members : Assoc Prof., PhD Nguyen Van Dinh Dr Nguyen Thị Hong Hanh Advisors : Professor Kenneth Wang Dr Dao Van Tien Chair : Kai – Tang Fan Date : 2018/01/20 ABSTRACT Thesis Title: Factors affecting employee performance: a study on joint venture companies in Vietnam Pages: 76 University : Lunghwa University of Science and Technology Graduate School：Department of Business Administration Date：December, 2016 Degree：Master Graduate Student：Nguyen Van Dzung Advisor 1: Professor Kenneth Wang Advisor 2: Dr Dao Van Tien Keywords: Employee performance, factor, joint venture company, Vietnam, leadership, organizational culture, working environment, training, motivation Value of research: This research project aimed at giving a new direction in terms of quality analysis of human resources, evaluating the staff working results with quantitative research methods and modeling of research factors It may help the company's leadership and set up the strategic that focusing on the personnel helpful to stabilize and improve the staff’s results and the quality of human resources for Vietnam joint venture companies in particular and others in general Research scope: The research was conducted at joint venture companies in Hanoi, Vietnam which operate in variety fields (e.g., architectural design, construction industry, engineering, manufacturing, the building trade, etc) Specific objectives of the research include: Identify a number of factors affecting the results of the staff working at the joint venture companies in Vietnam by establishing regression model between the determinants such as leadership, organizational culture, working environment, training and motivation and their work performance i Based on the results of quantitative research, propose solutions to help corporate governance committee making personnel policy in order to improve working results of employees, improve the quality of human resources in Vietnam joint venture companies ii Acknowledgements Firstly, I would like to express my sincere gratitude to my advisor Prof Kenneth Wang for the continuous support of my Master study and related research, for his patience, motivation, and immense knowledge His guidance helped me in all the time of research and writing of this thesis I could not have imagined having a better advisor and mentor for my Master study Besides my advisor, I would like to thank the rest of my thesis committee: Dr Dao Van Tien, for his insightful comments and encouragement, but also for the hard question which incented me to widen my research from various perspectives Last but not the least, I would like to thank my family: my parents and to my brothers and sister for supporting me spiritually throughout writing this thesis and my life in general Hanoi,…………/…………./ 2017 Author Nguyen Van Dzung iii TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 Background of the study 1.1.1 Joint Venture Companies in Vietnam 1.2 Motivation 1.3 Objective of the study 1.4 Value of the study 1.5 Summary CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT 2.1 Theoretical background 2.1.1 Employee Performance 2.1.2 Factors Affecting Employee Performance 2.1.3 Conceptual Framework Development 12 2.1.4 Mcgregor Theory X and Theory Y 12 2.1.5 Herzberg, Mausner and Snyderman's two factor theory 13 2.2 Hypothesis development 14 2.2.1 The effect of leadership on employee performance 14 2.2.2 The effect of organization culture on employee performance 15 2.2.3 The effect of working environment on employee performance 15 2.2.4 The effect of training on employee performance 15 2.2.5 The effect of motivation on employee performance 16 2.3 Summary 17 CHAPTER RESEARCH METHODOLOGY 18 3.1 Research design 18 3.2 Research model 19 3.3 Research hypotheses 19 iv 3.4 Choice of measures 19 3.5 Sample techniques 22 3.6 Data collection methods 23 3.7 Data quality control 23 3.8 Data analysis method 23 3.9 Summary 24 CHAPTER DATA ANALYSIS AND RESULTS 26 4.1 Pilot testing 26 4.2 Descriptive statistics 26 4.3 Assessment and Refinement of measurement scales 29 4.3.1 Refinement of measurement scale 29 4.3.2 Exploratory Factor Analysis (EFA) 32 4.3.3 Exploratory factor analysis, independent variables 32 4.3.4 Exploratory factor analysis, dependent variables 35 4.4 Hypothesis testing 35 4.4.1 Regression analysis 35 4.4.2 Hypothesis testing 36 4.5 Summary 37 CHAPTER CONCLUSION AND DISCUSSION 38 5.1 Summary of findings 38 5.2 Conclusions 39 5.3 Managerial implications and Recommendations 40 5.4 Limitations and Future research 41 REFERENCES 42 v FULL NAMES OF ACRONYMS The following acronyms have been used in this thesis: JV: Joint Venture JVs : Joint Ventures JVC: Joint Venture Company JVCs: Joint Venture Companies HRM: Human Resource Management LIST OF TABLES Table 1: Top 10 countries invest in Vietnam in 2016 Table 2: Form of investment of FDI up to 2016 Table 3: Survey’s Items 18 Table 4: Demographic description 25 Table 5: Mean value 26 Table 6: Reliability test result 28 Table 7: KMO and Bartlett’s Test 30 Table 8: Total Variance Explained 31 Table 9: Rotated Component Matrix 32 Table 10: KMO and Bartlett’s Test for dependent variable 33 Table 11: Component matrix of dependent variable 33 Table 12: Regression analysis results 34 LIST OF FIGURES Figure 1: Characteristics of JVCs in Vietnam Figure 2: Conceptual research model 10 Figure 3: Research model 17 vi CHAPTER 1: INTRODUCTION The purpose of this chapter gives a brief background to the subject of the study, which will give the reader a comprehensive overview of study It is continue by presenting the background of the study This is will followed by providing the statement of research problem, research question and highlight the exactly goals for this research 1.1 Background of the study 1.1.1 Joint Venture Companies in Vietnam “A joint venture company (JVC hereafter) is a separate legal organizational entity representing the partial holdings of two or more parent firms, in which the headquarters of at least one is located outside the country of operation of the joint venture This entity is subject to the joint control of its parent firms, each of which economically and legally independent of the other” (Newburry & Zeira, 1997, p 89) Elango and Sambharya (2004, p 110) additionally define joint ventures (JV hereafter) as” a partnership wherein the venture (business) is jointly owned by two or more firms” Shared ownership such as JVC gives the possibility to share not only risk but also strengths, especially local market knowledge of aimed market partner (AlKaabi et al 2010) Further, Kirby and Kaiser (2001) also share this assertion “joint venture can be seen primarily as a device to gain access to resources embedded in other organizations and, […] and as a mean of acquiring local management expertise and connections to facilitate fast entry into new markets” This entry mode allows more flexibility in the sourcing and deployment of resources This, on the other hand, facilitates the overcoming of industry barriers and minimization of risks of liabilities of foreignness (Elango & Sambharya, 2004) Moreover, JVC can also have a local partner that “can help firms gain legitimacy because partnering with a local firm can help it create structures and activities that conform to local norms, values and expectations” (Brouthers et al 2008, p 193) In Vietnam, joint venture companies (JVCs hereafter) is established in the form of a limited liability company or joint stock company, each party of the joint venture companies shall be responsible depend on the amount of capital committed to contribute to the legal capital of the enterprise A JVC will have the legal representative status in accordance with the law of Vietnam, which establish and operate from the date of investment license Joint Venture Companies in Vietnam Business characteristics Co-own capital Management together Legal characteristics Shared profit Shared risk JVCs operating in the form of a joint venture contract A joint venture company is a legal entity Figure 1: Characteristics of JVCs in Vietnam (Voer, 2016) There are four main types of JVCs in Vietnam: Vietnamese party and a Foreign party; Vietnamese party and Foreign parties; Vietnamese parties and a Foreign party; and Vietnamese parties and Foreign parties Operational status of JVCs in Vietnam: The number of projects granted licenses in the year to December 2016 was 2,556 with $15.1 billion in total register capital Among 95 countries and territories investing in Viet Nam in 2016, the Republic of Korea led in the term of capital with $7 billion (28.8 per cent of the total) Japan came second with $2.58 billion (10.62 per cent), and Singapore was third with $2.41 billion (9.9 per cent) Table 1: Top 10 countries invest in Vietnam in 2016 Order Country Registered capital Korea US$7 billion Japan US$2.58 billion Singapore US$2.41 billion China US$1.88 billion Company TRA3 My company frequently arranges training programs for the employees TRA4 Doing job in this company will benefit to me MOV Motivation MOV1 MOV2 I feel a sense of personal satisfaction when I this job well My opinion of myself goes down when I the job badly MOV3 I take pride in doing my job as well as I can MOV4 EPE EPE1 EPE2 EPE3 I feel unhappy when my work is not up to my usual standard Employee performance My performance is better than that of my colleagues with similar qualifications I am satisfied with my performance because it’s mostly good My performance is better than that of bankers with similar qualifications in other companies 55 Appendix III: Descriptive statistic Frequencies Statistics Employee Working performance N Valid Leadership Organization environment Training 150 150 150 150 150 0 0 0 Frequency tables GENDER Frequen Percen t Valid Cumulative Percent Percent Vali Male 95 63.3 63.3 63.3 d Femal 55 36.7 36.7 100.0 150 100.0 100.0 e Total AGE Frequen Percen cy Vali Less than 25 d years old t Valid Cumulative Percent Percent 46 30.7 30.7 30.7 26-30 years old 53 35.3 35.3 66.0 31-35 years old 38 25.3 25.3 91.3 36-40 years old 4.0 4.0 95.3 More than 40 4.7 4.7 100.0 150 100.0 100.0 years old Total EDUCATION Frequen Percen cy t Valid Cumulative Percent Percent Vali University Graduate 75 50.0 50.0 50.0 d Community 72 48.0 48.0 98.0 2.0 2.0 100.0 150 100.0 100.0 Colleage Graduate High School Graduate Total Motivation 150 Missing cy culture 56 INCOME Frequen Percen cy t Valid Percent Cumulative Percent Vali Less than 10VNDm 48 32.0 32.0 32.0 d 10-15VNDm 28 18.7 18.7 50.7 15-20VNDm 43 28.7 28.7 79.3 More than 20VNDm 31 20.7 20.7 100.0 150 100.0 100.0 Total Descriptive Descriptive Statistics N Minimum Maximum Mean Std Deviation EPE1 150 3.23 480 EPE2 150 3.21 411 EPE3 150 3.23 466 LEA1 150 3.23 1.032 LEA2 150 3.39 1.086 LEA3 150 2.08 886 LEA4 150 2.07 857 WEN1 150 3.35 845 WEN2 150 3.37 856 WEN3 150 3.61 1.028 WEN4 150 3.99 890 TRA1 150 3.31 991 TRA2 150 3.33 1.007 TRA3 150 3.19 1.126 TRA4 150 3.20 1.123 OCU1 150 3.33 887 OCU2 150 3.57 893 OCU3 150 3.49 954 OCU4 150 3.54 816 MOV1 150 3.38 953 MOV2 150 3.39 948 MOV3 150 3.51 1.008 MOV4 150 3.53 1.034 Valid N (listwise) 150 57 Reliability Scale: ALL VARIABLES Case Processing Summary N Cases Valid Excludeda Total % 150 100.0 0 150 100.0 a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbac N of h's Alpha Items 687 Item Statistics Std Deviati Mean on N EP1 3.23 480 150 EP2 3.21 411 150 EP3 3.23 466 150 Item-Total Statistics Corrected Item- Squared Cronbach's Scale Mean if Scale Variance Total Multiple Alpha if Item Item Deleted if Item Deleted Correlation Correlation Deleted EPE1 6.44 570 464 227 647 EPE2 6.45 652 475 248 630 EPE3 6.44 530 575 333 494 Scale Statistics Mean 9.67 Variance 1.136 Std Deviation N of Items 1.066 58 Reliability Scale: ALL VARIABLES Case Processing Summary N Cases Valid % 150 100.0 0 150 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha Based on Cronbach's Standardized Alpha Items 828 N of Items 838 Item Statistics Mean Std Deviation N LEA1 3.23 1.032 150 LEA2 3.39 1.086 150 LEA3 2.08 886 150 LEA4 2.07 857 150 Item-Total Statistics Corrected Item- Squared Cronbach's Scale Mean if Scale Variance Total Multiple Alpha if Item Item Deleted if Item Deleted Correlation Correlation Deleted LEA1 7.54 5.928 585 456 817 LEA2 7.38 5.673 596 416 816 LEA3 8.69 6.013 722 969 757 LEA4 8.71 6.021 757 970 745 Scale Statistics Mean 10.77 Variance 9.935 Std Deviation N of Items 3.152 59 Reliability Scale: ALL VARIABLES Case Processing Summary N Cases Valid % 150 100.0 0 150 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha Based on Cronbach's Standardized Alpha Items 847 N of Items 851 Item Statistics Mean Std Deviation N WEN1 3.35 845 150 WEN2 3.37 856 150 WEN3 3.61 1.028 150 WEN4 3.99 890 150 Item-Total Statistics Corrected Item- Squared Cronbach's Scale Mean if Scale Variance Total Multiple Alpha if Item Item Deleted if Item Deleted Correlation Correlation Deleted WEN1 10.97 5.556 696 550 803 WEN2 10.95 5.817 604 427 839 WEN3 10.71 5.092 623 459 841 WEN4 10.34 4.910 846 722 735 Scale Statistics Mean 14.33 Variance 9.040 Std Deviation N of Items 3.007 60 Reliability Scale: ALL VARIABLES Case Processing Summary N Cases Valid % 150 100.0 0 150 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha Based on Cronbach's Standardized Alpha Items 865 N of Items 863 Item Statistics Mean Std Deviation N TRA1 3.31 991 150 TRA2 3.33 1.007 150 TRA3 3.19 1.126 150 TRA4 3.20 1.123 150 Item-Total Statistics Corrected Item- Squared Cronbach's Scale Mean if Scale Variance Total Multiple Alpha if Item Item Deleted if Item Deleted Correlation Correlation Deleted TRA1 9.71 8.327 623 473 862 TRA2 9.70 8.279 618 470 864 TRA3 9.84 6.820 814 990 784 TRA4 9.83 6.842 811 990 785 Scale Statistics Mean 13.03 Variance 12.872 Std Deviation N of Items 3.588 61 Reliability Scale: ALL VARIABLES Case Processing Summary N Cases Valid % 150 100.0 0 150 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha Based on Cronbach's Standardized Alpha Items 802 N of Items 802 Item Statistics Mean Std Deviation N OCU1 3.33 887 150 OCU2 3.57 893 150 OCU3 3.49 954 150 OCU4 3.54 816 150 Item-Total Statistics Corrected Item- Squared Cronbach's Scale Mean if Scale Variance Total Multiple Alpha if Item Item Deleted if Item Deleted Correlation Correlation Deleted OCU1 10.60 4.671 644 416 738 OCU2 10.37 4.730 618 385 751 OCU3 10.44 4.503 622 389 750 OCU4 10.39 5.113 582 339 768 Scale Statistics Mean 13.93 Variance 7.928 Std Deviation N of Items 2.816 62 Reliability Scale: ALL VARIABLES Case Processing Summary N Cases Valid % 150 100.0 0 150 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Alpha Based on Cronbach's Standardized Alpha Items N of Items 865 866 Item Statistics Mean Std Deviation N MOV1 3.38 953 150 MOV2 3.39 948 150 MOV3 3.51 1.008 150 MOV4 3.53 1.034 150 Item-Total Statistics Corrected Item- Squared Cronbach's Scale Mean if Scale Variance Total Multiple Alpha if Item Item Deleted if Item Deleted Correlation Correlation Deleted MOV1 10.43 6.474 763 592 809 MOV2 10.41 6.660 721 541 826 MOV3 10.30 6.466 702 494 833 MOV4 10.28 6.458 676 460 844 Scale Statistics Mean 13.81 Variance 11.083 Std Deviation N of Items 3.329 63 Factor Analysis: independent factors KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx Chi-Square 2432.466 df 190 Sig .000 Communalities Initial 602 Extraction LEA1 1.000 524 LEA2 1.000 549 LEA3 1.000 845 LEA4 1.000 871 WEN1 1.000 713 WEN2 1.000 601 WEN3 1.000 636 WEN4 1.000 885 TRA1 1.000 659 TRA2 1.000 642 TRA3 1.000 820 TRA4 1.000 811 OCU1 1.000 673 OCU2 1.000 666 OCU3 1.000 653 OCU4 1.000 620 MOV1 1.000 762 MOV2 1.000 746 MOV3 1.000 694 MOV4 1.000 675 Extraction Method: Principal Component Analysis 64 Total Variance Explained Component Initial Eigenvalues Total % of Variance Extraction Sums of Squared Loadings Cumulative % Total % of Variance Cumulative % 3.624 18.120 18.120 3.624 18.120 18.120 3.163 15.817 33.936 3.163 15.817 33.936 2.763 13.816 47.752 2.763 13.816 47.752 2.337 11.685 59.438 2.337 11.685 59.438 2.159 10.795 70.233 2.159 10.795 70.233 977 4.886 75.118 705 3.524 78.643 616 3.078 81.721 599 2.996 84.717 10 520 2.601 87.318 11 475 2.374 89.692 12 412 2.058 91.750 13 370 1.849 93.598 14 324 1.620 95.219 15 299 1.493 96.712 16 296 1.482 98.194 17 208 1.039 99.233 18 137 685 99.918 19 014 072 99.991 20 002 009 100.000 dimensi on0 Extraction Method: Principal Component Analysis 65 Component Matrixa Component LEA1 445 315 -.411 -.050 234 LEA2 477 305 -.395 -.038 267 LEA3 414 295 -.482 -.054 593 LEA4 422 307 -.484 -.059 600 WEN1 370 -.406 414 449 197 WEN2 480 -.330 310 381 140 WEN3 585 -.178 361 336 138 WEN4 478 -.395 446 463 295 TRA1 383 464 011 021 -.545 TRA2 470 434 106 -.056 -.467 TRA3 550 590 217 132 -.325 TRA4 547 585 217 131 -.324 OCU1 012 187 581 -.514 191 OCU2 -.040 235 486 -.570 222 OCU3 -.148 268 584 -.361 296 OCU4 136 251 535 -.323 385 MOV1 -.490 497 158 470 170 MOV2 -.449 481 002 530 179 MOV3 -.505 489 121 390 182 MOV4 -.449 540 171 370 123 Extraction Method: Principal Component Analysis a components extracted Component Transformation Matrix Component 689 014 267 398 296 455 084 772 -.535 315 -.093 -.052 -.073 096 565 538 -.479 -.384 147 588 510 -.607 048 -.041 -.653 210 247 285 588 206 -.254 067 048 -.054 -.572 774 dimensi on0 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization 66 Rotated Component Matrixa Component LEA1 -.072 205 -.040 685 -.072 LEA2 -.077 199 002 708 -.059 LEA3 005 -.049 016 918 014 LEA4 006 -.043 014 932 022 WEN1 -.044 -.066 835 -.098 -.022 WEN2 -.124 049 762 007 -.053 WEN3 -.108 199 759 084 046 WEN4 -.054 -.055 937 -.001 031 TRA1 -.040 799 -.109 009 -.088 TRA2 -.114 790 -.029 040 041 TRA3 097 869 152 148 102 TRA4 095 865 152 145 101 OCU1 -.073 063 -.018 -.094 809 OCU2 -.060 026 -.128 -.029 803 OCU3 168 -.024 -.014 -.089 785 OCU4 055 055 162 117 758 MOV1 868 -.006 -.050 -.067 033 MOV2 854 -.021 -.060 032 -.107 MOV3 822 -.037 -.113 -.044 058 MOV4 804 064 -.106 -.062 093 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Factor Analysis: dependent variable KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of 644 Sampling Adequacy Bartlett's Test of Approx Chi- Sphericity Square df Sig 76.827 000 67 Communalities Initial Extraction EP1 1.000 563 EP2 1.000 587 EP3 1.000 702 Extraction Method: Principal Component Analysis Total Variance Explained Compo Extraction Sums of Squared nent Initial Eigenvalues Total Loadings % of Cumulati Variance ve % Total 1.852 1.852 61.739 61.739 669 22.301 84.040 479 15.960 100.000 % of Cumulati Variance ve % 61.739 Extraction Method: Principal Component Analysis Component Matrixa Component EP3 838 EP2 766 EP1 750 Extraction Method: Principal Component Analysis Regression Variables Entered/Removedb Model Variables Variables Entered Removed Method Motivation, Enter Training, Organization culture, Working environment, Leadership a a All requested variables entered b Dependent Variable: Employee performance 68 61.739 Model Summary Model Adjusted R Std Error of the R R Square Square Estimate 808a 653 641 21318 a Predictors: (Constant), Motivation, Training, Organization culture, Working environment, Leadership ANOVAb Model Sum of Squares Regression Residual Total df Mean Square 12.310 2.462 6.544 144 045 18.855 149 F 54.175 Sig .000a a Predictors: (Constant), Motivation, Training, Organization culture, Working environment, Leadership b Dependent Variable: Employee performance Coefficientsa Model Unstandardized Standardized Coefficients Coefficients B Std Error (Constant) 925 167 Leadership 171 023 Working 081 Training Beta t Sig 5.534 000 378 7.512 000 024 172 3.417 001 170 020 427 8.458 000 Organization culture 224 025 444 8.968 000 Motivation 062 021 144 2.867 005 environment 69 ... at JVCs The second action is the training for the managers at JVCs The training includes regular training and unregular training to the managers While regular training is conducted for new managers... in 1996, Honda Vietnam is a joint venture between Honda Motor Co (Japan) Co., Asian Honda Motor (Thailand) and the Corporation movers and machines Agriculture Vietnam with branches main products:... framework on the factors affecting employee performance in JVCs in Vietnam Specially, this study firstly examines how leadership factor to have an impact on performance of employees in Vietnam JVCs