Exploring factors affecting employee job satisfaction at bank for investment and development of viet nam

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RESEARCH PROJECT (BMBR5103) EXPLORING FACTORS AFFECTING EMPLOYEE JOB SATISFACTION AT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM STUDENT’S FULL NAME : NGUYEN PHUONG NAM STUDENT ID : 14967 INTAKE : MARCH 2013 ADVISOR’S NAME & TITLE : NGUYEN THE KHAI, DBA SEPTEMBER 2014 ADVISOR’S COMMENTS .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... .......................................................................................................................................................... Advisor’s signature: ......................................................................................................................... Page iii of 53 DECLARATION I declare that the work on which this dissertation is based, hereby submitted to Open University Malaysia for the degree of Master of Business Administration. This wok has not previously been submitted by me for a degree at this or any other university. It is my work in design and execution, and that all material contained herein has been duly acknowledged. Nguyen Phuong Nam (Mr.) Page iv of 53 ACKNOWLEDGEMENTS Firstly, I came to my great pleasure to have a chance to attend the official course of Strategic Management of OUM and HUTECH conducted by Nguyen The Khai, DBA two months ago. Through this class, a lot of knowledge on Business Research Method with different angles, art and skills needed have been absorbed carefully and this will help me a lot in the long run to work in business environment. Secondly, understanding of Business Research Method will help me and other members of the class build teamwork’s environment, leading team and motivate others through Business Research Method. Thirdly, I would like to express my great thankfulness to my lecturer – Nguyen The Khai, DBA, who inspired me with interesting lessons, ways of systematic learning that will be very useful for me. With kind regards, Nguyen Phuong Nam Page v of 53 Contents ADVISOR’S COMMENTS .......................................................................................................... iii DECLARATION ........................................................................................................................... iv ACKNOWLEDGEMENTS ............................................................................................................ v LIST OF TABLES ......................................................................................................................... ix LIST OF FIGURES ....................................................................................................................... ix ABSTRACT .................................................................................................................................. 10 CHAPTER 1: OVERVIEW .......................................................................................................... 11 1.1 BIDV introduction ............................................................................................................... 11 1.2 Context of the study: BIDV’s inside problems .................................................................... 12 1.3 Research problem statement ................................................................................................ 13 1.4 Research objectives .............................................................................................................. 13 CHAPTER 2: LITERATURE REVIEW ...................................................................................... 15 2.1 Definitions of Constructs ..................................................................................................... 15 2.1.1 Job satisfaction ............................................................................................................... 15 2.1.2 Benefits........................................................................................................................... 16 2.1.3 Work-related expectancies ............................................................................................. 18 2.1.4 Performance appraisal system knowledge ..................................................................... 18 2.1.5 Supervison ...................................................................................................................... 20 2.2 Theories of Job Satisfaction ................................................................................................. 21 2.2.1 Maslow Hierarchy Theory ............................................................................................. 21 2.2.2 Herzberg’ Two-Factor Theory ....................................................................................... 22 2.2.3 Vroom’s Expectancy Theory of Motivation .................................................................. 23 2.2.4 Adams’s Equity Theory (1963) ...................................................................................... 24 2.2.5 Locke’s Range of Affect theory ..................................................................................... 25 2.3 Proposed research model and hypotheses ............................................................................ 26 2.3.1 Proposed research model ................................................................................................ 26 2.3.2 Proposed research hypotheses ........................................................................................ 27 CHAPTER 3: RESEARCH METHODOLOGY .......................................................................... 28 Page vi of 53 3.1 Sample .................................................................................................................................. 28 3.2 Measurement of variables .................................................................................................... 28 3.2.1 Benefits........................................................................................................................... 28 3.2.2 Job satisfaction ............................................................................................................... 28 3.2.3 Work-related expectancies ............................................................................................. 29 3.2.4 Performance appraisal system knowledge ..................................................................... 30 3.2.5 Supervision ..................................................................................................................... 32 3.3 Data collection ..................................................................................................................... 33 3.4 Data Analysis ....................................................................................................................... 33 CHAPTER 4: RESEARCH FINDINGS ....................................................................................... 34 4.1 Construct Reliability ............................................................................................................ 34 4.1.2 Main construct: Job satisfaction ..................................................................................... 35 4.1.2. Construct: Performance Appraisal System Knowledge ................................................ 35 4.1.3. Construct: Work-related expectancies .......................................................................... 35 4.1.4. Construct: Benefits ........................................................................................................ 36 4.1.5. Construct: Supervision .................................................................................................. 36 4.2 Descriptive statistics ............................................................................................................ 37 4.3 Correlations among variables............................................................................................... 38 4.4 Hypothesis testing results..................................................................................................... 39 4.4.1 Proposed hypothesis H1 ................................................................................................. 40 4.4.2 Proposed hypothesis H2 ................................................................................................. 41 4.4.3 Proposed hypothesis H3 ................................................................................................. 42 4.4.4 Proposed hypothesis H4 ................................................................................................. 43 CHAPTER 5: DISCUSSION AND RECOMMENDATION....................................................... 44 5.1 Discussion ............................................................................................................................ 44 5.2 Managerial implications ....................................................................................................... 45 REFERENCES ............................................................................................................................. 46 APPENDIX 1 ................................................................................................................................ 50 Page vii of 53 Page viii of 53 LIST OF TABLES Table 1: Measurement of benerfits Table 2: Measurement of Job satisfaction Table 3: Measurement of Work-related expectancies Table 4: Measurement of Performance appraisal system knowledge Table 5: Measurement of supervision Table 6: Cronbach's alpha- Internal consistency Table 7: Cronbach's alpha of Construct Job Satisfaction Table 8: Cronbach's alpha of Construct Performance appraisal system knowledge Table 9: Cronbach's alpha of Construct Work-related expectancies Table 10: Cronbach's alpha of benefits Table 11: Cronbach's alpha of supervision Table 12: Descriptive statistics Table 13: Correlations among variables Table 14: H1 model summary Table 15: H1 Coefficients (a) Table 16: H2 Model summary Table 17: H2 Coefficients (a) Table 18: H3 Model summary Table 19: H3 Coefficients (a) Table 20: H4 model summary Table 21: H4 Coefficients (a) 28 29 30 31 32 34 35 35 35 36 36 37 38 40 40 41 41 42 42 43 43 LIST OF FIGURES Figure 1: Maslow's Hierarchy Needs Theory 22 Figure 2: Vroom's Expectancy Theory of Motivation 23 Figure 3: Proposed Research Model 26 Page ix of 53 ABSTRACT Employees are internal customers of the organization, to meet the current requirements and is willing to work with organizations to implement business objectives. However, most organizations focus on customer satisfaction about the product, but very little attention to employee's satisfaction with his work or not. The satisfaction of employees towards work will boost the quality of banking operations. Therefore conducted a study on employee satisfaction towards work is a necessity for the development of the bank. Because of that, I decided to delve into the topic "Exploring factors affecting employee job satisfaction at Bank for Investment and Development of Vietnam" (BIDV) threads clarify this issue.This study discusses the factors that influence job satisfaction. Data were collected through questionnaire from 270 employees (n=270) of four departments in BIDV. The hypotheses were tested using SPSS software, version 15.0. All variables were tested the reliability Cronbach’s Alpha, the correlations, descriptive statistics, and the like. The study result reveals that procedural justice, work-related expectancy, perceived organizational support, and performance appraisal system knowledge have positive relationship with job satisfaction. This result helps the managers of BIDV have a more holistic view of enterprise systems and more specific policies strategies. The company should appropriate to improve employee satisfaction contributing to impact customer satisfaction, empowerment and competitiveness of their enterprise on the market. The implications to human resource development for organizations that want to increase employee job satisfaction is to focus on enhancing the support for the employees, improving the procedural fairness, and caring the employee’s expectancies and the like. Key words: job satisfaction, benefits, work-related expectancies, performance appraisal systems, supervision, BIDV Page 10 of 53 CHAPTER 1: OVERVIEW 1.1 BIDV introduction As a long-established bank, BIDV has funded many investment projects and key economic areas of the country. Joint Stock CommercialBank for Investment and Development of Vietnam (BIDV) has also built the largest enterprise customers, while confirming the implementation of prestigous items, objectives, economic programs and social security of the country. - Full name: Ngân hàng TMCP Đầu tư và Phát triển Việt Nam. - International Transaction Name: Joint Stock Commercial Bank for Investment and Development of Vietnam. - Abbreviated name: BIDV - Address: BIDV Tower, 35 Hang Voi Street, Hoan Kiem District, Hanoi City. - Tel: 04.2220.5544 - Fax: 04. 2220.0399 - Website: www.bidv.com.vn. - Email: Info@bidv.com.vn Founded on 04/26/1957, BIDV is the oldest Commercial Bank in Vietnam. * Fields of operation - Bank: BIDV functions as a leading experienced bank of finance services, brokerage, loan syndication and advisory,modern, convenient banking products. - Insurance: BIDV provides products for non-life insurance designed to match the overall package to customers of BIDV. - Stock: BIDV provides a wide range of brokerage services, investment and investment consultant with the ability of quickly developing a system of agents to receive orders nationwide. - Financial investments: BIDV includes financial leasing, security trading and capital contribution with the aim at establishing investment companies to the project; Especially, it plays a leading role in Page 11 of 53 coordinating key projects of the country such as company Aviation stock leasing (VALC) development company highway (BEDC), Investment, Long Thanh International Airport … 1.2 Context of the study: BIDV’s inside problems With more than 16,000 officers, employees and financial consultants who are well-qualified and welltrained with full experience and have been accumulated and transferred for over half of a century, BIDV always brings its customers the benefits and reliability. - Banking Network: BIDV has 118 branches and 500 transaction offices, thousands of ATMs and POS transactions in 63 provinces and cities nationwide - Non-banking Networks: consists of Investment Securities Company (BSC), Insurance and Investment Company (BIC) and Leasing Company with more than 20 branches nationwide. - Overseas representatives: It trades on all three sectors: Banking, Insurance and Financial Investment in Laos, Russia and especially in the Cambodian market (Investment and Development Company of Cambodia – IDCC, Investment Banking and Development of Cambodia – Cambodian BIDC, Insurance Company – CVI. - Joint venture Bank: Co-operates more effectively with international partners such as Bank VIDPublic Venture (partner Malaysia), Bank of the Lao-Vietnamese joint venture (with partner Laos), Vietnam Russia Joint Venture Bank – VRB (with partners Russian), BIDV Tower Joint Venture Company (Singapore partner), venture investment management BIDV – Vietnam Partners (U.S. partner), etc. However, BIDV is now facing a large amount of troubles which are as follows: + The number of employees resigning is increasing. The company has difficulty in HR when the working environment is not much supported for their employees. + A numberous old employees resigned because they cannot find the promotion opportunities. + The number of new employees is on the increase, but they are not skillful and qualified. Page 12 of 53 + The justice is considered as a problem for bank. 1.3 Research problem statement Today, in the stiff conditions of the market, competition for human resources has always been a hot issue in the company. Many companies have recognized the importance of human resources while the employees are considered the property, and the company's lifeblood. A company can have modern technology, better service quality, and infrastructure but without the workforce working effectively, the company is unlikely to survive and build competitive advantage. That how to exploit the resources to serve the development of the company as well as to take advantage of resources for social development is an urgent question necessary for the general management and human resource managers in particular. To effectively manage critical resources, the first thing is to know and to understand the people who are the central element of the development. At the same time, that is to create conditions to unleash the potential in every human being. There will not be such a waste of resources and motivation to promote personal fulfillment and organizational development. As a service company, BIDV with more than 16,000 employees always serve the best services and products for the customers. In case that their employees satisfied with their job, the effectiveness and efficiency will be improved which leads to better care for their customers. Recognizing the important of the employee job satisfaction, I confidently choose “Exploring factors affecting employee job satisfaction at BIDV” as my research topic. 1.4 Research objectives This research is made in order to fulfill the following objectives: + Identify the factors that influence employee satisfaction with the job. + Survey and assessment of employee satisfaction for thejob at BIDV. Page 13 of 53 + Propose a solution to improve employee satisfaction on the job at the BIDV Page 14 of 53 CHAPTER 2: LITERATURE REVIEW 2.1 Definitions of Constructs 2.1.1 Job satisfaction In Organizational Behavior Research, Job satisfaction or Employee Satisfaction is one of the most used variables. It is an employee's attitudinal response to his or her organization. There are numerous definitions of job satisfaction. Following are the most used definitions. According to Hoppock (1935), job satisfaction is defined as any combination of psychological, physiological and environmental circumstances that cause a person truthfully to say I am satisfied with my job. Vroom in his definition on job satisfaction focuses on the role of the employee in the workplace. Thus he defines job satisfaction as affective orientations on the part of individuals toward work roles which they are presently occupying (Vroom, 1964). In 1969, Locke defined “overall job satisfaction” as “a function of the perceived relationship between what one wants from one’s job and what one perceives it as offering.” Furthermore, more satisfied employees have more innovative activities in continuous quality improvement and more participation in decision-making in organizations (Kivimaki and Kalimo, 1994). Also, Schein (1996) said that employees’ motivation was essential to an organization’s success; thus, by understanding employees in their jobs and by clearly knowing the factors motivating them, organization could gain organizational commitment. In accordance with Misener et al. (1996), job satisfaction is generally recognized as a multifaceted construct including employee feelings about a variety of both intrinsic and extrinsic job Page 15 of 53 elements. It encompasses specific aspects of satisfaction related to pay, benefits, promotion, work conditions, supervision organizational practices and relationships with co-workers. According to Armstrong (2006), job satisfaction refers to the attitude and feelings workers have about their work. Positive and favorable attitudes towards the job indicate job satisfaction. Vice versa, negative and unfavorable attitudes towards the job indicate job dissatisfaction. According to Greenberg and Baron (2008), job satisfaction can be understood as the employee’s positive or negative attitude in relation to the work. According to George et al. (2008), job satisfaction can be defined as the collection of feeling and beliefs that people have about their current job. Besides having attitudes about their jobs as a whole, people can have attitudes about different aspects of their jobs such as the kind of work they do, their coworkers, supervisors or subordinates and their pay. In general, job satisfaction is critical to retaining and attracting well-qualified personnel. Job satisfaction is an attitude that people have about their jobs and the organizations in which they perform these jobs. 2.1.2 Benefits 2.1.2.1 Definition Employee benefits and benefits in kind (also called fringe benefits, perquisites, or perks) include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. In instances where an employee exchanges (cash) wages for some other form of benefit is generally referred to as a 'salary packaging' or 'salary exchange' arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree. Source : http://en.wikipedia.org/wiki/Employee_benefit Page 16 of 53 2.1.2.2 The relationship between job satisfaction and employee benefits Research findings indicate that all factors have significant effect on employees’ job satisfaction (Morse, 1953; Mohanty, 1973; Sinha, 1973). Watson (1969), Watson and Seidman (1941), Mohanty (1981) have implied that salary is not an important cause of job satisfaction. It is in fact not the employees, but the employer and the management who consider the pay to be the important cause of job satisfaction. This is definitely due to the gap in communication between the workers and the management. Of course the role of pay in job satisfaction can not be denied, because besides helping one to live and exist money gives social status, prestige and a sense of security. In Herzberg, Mauser, Perterson and Chapwell’s (1957) investigation, wages get the sixth ranking in a twelve point scale. According to the reports of Mornhauser’s study (1940) the higher income group indicated greater personal satisfaction. Sinha (1965) found higher and lower income groups tended to be satisfied and middle group was least satisfied. The lower income group had the highest job satisfaction score. By analyzing various research findings it can be said that job satisfaction is positively related to wages (Miller, 1941; Centers and Cantrill, 1946; Barnett et al.; 1952; Marriott and Denerley, 1955; Lawler and Porter, 1963). Khaleque and Rahman, 1983; Khaleque and Chowdhury, 1983 state that for increasing the employees’ job satisfaction, wage is less important factor but it has important effect on job dissatisfaction. Lumpkin & Tudor (1990) and Stedham & Yamamura (2000) showed that female managers are paid less and are less satisfied with their salary; thus, it follows that they are not satisfied with their salary. Clark (2001) finds that both satisfaction with pay and job security are the most important job satisfaction categories for determining future quits. Therefore, the following hypotheses can be proposed: H1: There is a positive relationship between job satisfaction and benefits. Page 17 of 53 2.1.3 Work-related expectancies 2.1.3.1 Definition Eisenberger, Fasolo, and Davis-LaMastro (1990) developed the measure describing the extent to which employees believe that higher levels of job performance will be rewarded. The measure assesses employee expectancies about the relationship of better performance with increased pay, promotion, and job security. It also assesses employee expectancies that better performance will lead to increased influence, supervisory approval, and recognition. 2.1.3.2 The relationship between work-related expectancies According to Eisenberger, Fasolo, and Davis-LaMastro (1990), factor analysis of the nine items found two factors for work-related expectancies. One dimension captures expectancies about pay and promotion rewards. The other dimension describes expectancies about approval and recognition. The two factors were consistent across samples of hourly workers and managers. Expectancies for pay/promotion rewards and approval/recognition/ influence both correlated positively with perceived organizational support, job satisfaction, participation in decisions, and job involvement. Expectancies for rewards and influence both correlated negatively with role conflict and ambiguity (Eisenberger et al., 1990; Smith & Brannick, 1990). The hypothesis can be suggested as follows: H2: There is a positive relationship between work-related expectancies and job satisfaction. 2.1.4 Performance appraisal system knowledge 2.1.4.1 Definition Performance appraisals help managing and developing human resources by the connection of all sub functions such as training, compensation, internal mobility decisions and the like. According to Dorfman, Stephan, and Loveland (1986), performance appraisals have been cited to be of Page 18 of 53 developmental and administrative (decision-making & evaluative) uses. In 1992, Williams and Levy developed the research to describe the extent to which employees perceive they understand important aspects of the performance appraisal system related to their job. Performance appraisal system knowledge has been found to explain the extent of agreement between employee and supervisor ratings of work performance. Baruch (1996) justifies the uses of performance appraisal systems for two main purposes: Firstly, they serve a variety of management functions such as decision-making about promotions, training needs, salaries, etc. and then to enhance developmental processes of employees or as an evaluation instrument Grubb (2007) feels that performance appraisals are important: (1) to promote organizational efficiency and effectiveness; (2) to enhance individual employee performance and satisfaction; (3) to simplify administrative processing; and (4) to ensure management retains control of employee behaviors and attitudes. From the research of Towne (2006), performance evaluation is used to appraise the quality of working being done, as outlined in the job description, and provides feedback to the employee either verbally, in writing, or both. 2.1.4.2 The relationship between job satisfaction and performance appraisal system knowledge In 1981, Dipboye and Pontbriand found that in case that employee development and performance improvement were enhanced in the performance appraisal, employees felt more satisfied and had greater acceptance of the performance appraisal. According to Prince and Lawler (1986), the constructs "work planning and goal setting" and "discuss performance attributes" had a positive influence on employees' satisfaction with and perceived utility of the performance appraisal. In contrast, the construct "career development" showed little influence on performance appraisal satisfaction. Investigating employees’ attitudes towards various aspects of the performance appraisal system, according to Mount (1984) and Pooyan & Eberhardt (1990) found that open, two -way Page 19 of 53 communication, mutual trust, opportunities for appraisees to joint goal setting, the supervisor’s knowledge of the employees’ performance and being evaluated on job-related factors, are significantly related to ratees’ satisfaction with performance appraisals. In accordance with Cascio (1996), satisfaction with appraisals has been defined as how content employees are with the level of involvement they have in the performance appraisal process, quality of feedback given to them and the linkage to reward allocations. In 2007, Jawahar conducted a research and reported that satisfaction with appraisal feedback was positively related to job satisfaction and organizational commitment and negatively related to turnover intentions. Thus, the proposed hypothesis could be as follows: H3: There is a positive relationship between performance appraisal system knowledge and job satisfaction 2.1.5 Supervison 2.1.5.1 Definition The definition of supervision was first proposed by Mann (1965). He suggested that supervision is an organizational role whose effective enactment entail ability to reconcile and cordinate the needs ad goals of the work group’s members whit organizational requirements. 2.1.5.2 The relationship between job satisfaction and supervision Haward and Frink (1996) states that supervisors’ behaviour, relationship with co-workers are positively related to job satisfaction. A large number of research findings indicate that employees’ high morale and job satisfaction depend on supervisors’ employee centered attitude and their considered behaviour ( Halpin, 1957; Seeman, 1957; Fleishman et al.; 1955; Likert,1961). Begum and Anwar (1978) found that the rate of production of high structure and high consideration Page 20 of 53
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