ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------
NGUYỄN THỊ DIỆU LINH
MOTIVATING THE WORKFORCE AT PVC COMPANY
TẠO ĐỘNG LỰC CHO NGƯỜI LAO ĐỘNG
TẠI TỔNG CÔNG TY XÂY LẮP DẦU KHÍ (PVC)
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
HÀ NỘI - 2020
ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------
NGUYỄN THỊ DIỆU LINH
MOTIVATING THE WORKFORCE AT PVC COMPANY
TẠO ĐỘNG LỰC CHO NGƯỜI LAO ĐỘNG
TẠI TỔNG CÔNG TY XÂY LẮP DẦU KHÍ (PVC)
Chuyên ngành: Quản trị kinh doanh
Mã số: 60 34 01 02
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. TRẦN HUY PHƯƠNG
HÀ NỘI - 2020
DECLARATION
The author confirms that the research outcome in the thesis is the result of
author’s independent work during study and research period and it is not yet
published in other’s research and article.
The other’s research result and documentation (extraction, table, figure,
formula,
and other document) used in the thesis are cited properly and the
permission (if required) is given.
The author is responsible in front of the Thesis Assessment Committee,
Hanoi School of Business and Management, and the laws for above-mentioned
declaration.
Date…………………………..
i
TABLE OF CONTENTS
DECLARATION ....................................................................................................... i
TABLE OF CONTENTS ......................................................................................... ii
LIST OF TABLE.......................................................................................................v
LIST OF FIGURES ................................................................................................ vi
INTRODUCTION.......................................................................................................1
CHAPTER 1: OVERVIEW OF WORK MOTIVATION FOR EMPLOYEES .........3
1.1 Concept ..............................................................................................................3
1.1.1 Human resource management and encouragement .....................................3
1.1.2 Goals of human resource management .......................................................4
1.2. Theories on work encouragement and motivation through needs ....................4
1.2.1. Maslow’s hierarchy of needs (1908-1970).................................................4
1.2.2. Frederick Herzberg’s Two-Factor Theory: ................................................5
1.2.3. D.McClelland’s theory of satisfied needs: .................................................5
1.2.4. Douglas McGregor’s X-Y theory: ..............................................................6
1.3 Encouragement through expectation .................................................................7
1.4. Encouragement through equity .........................................................................9
1.5 Other applications in encouragement and motivation .....................................10
1.5.1. Employee evaluation ................................................................................10
1.5.2. Employee rewards ....................................................................................11
1.5.3. Rewards based on a model that determines the level of income
satisfaction ..........................................................................................................17
1.6. Experience in motivating employees at the business .....................................18
1.6.1. Enhancement of the role of work motivation ...........................................18
1.6.2. Common shortcomings of work motivation at the businesses .................19
Summary of Chapter 1 ..............................................................................................20
CHAPTER 2: EVALUATION OF THE CURRENT STATUS OF WORK
MOTIVATION AT PVC ..........................................................................................21
2.1. History and important development milestones of PVC ................................21
ii
2.2 Overview of work motivation at PVC .............................................................23
2.2.1 Work performance evaluation ...................................................................23
2.2.2 Employee reward .......................................................................................24
2.3. Evaluation of current status ............................................................................26
2.3.1 Survey of Board of Directors: ..................................................................26
2.3.2 Employee survey .......................................................................................27
2.4. Factors affecting employee rewards at PVC: .................................................37
2.4.1 External environment: ...............................................................................37
2.4.2 Internal environment: ................................................................................37
2.5 Conclusion on issues to be improved by urgency and feasibility ...................38
Summary of Chapter 2: .............................................................................................40
CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO IMPROVE
WORK MOTIVATION AT PVC .............................................................................41
3.1. Improvement of performance evaluation........................................................41
3.1.1 Improvement of performance evaluation process and method .................41
3.1.2. Establishment of a performance evaluation quality monitoring process: 42
3.1.3. Development of evaluation skills of managers ........................................43
3.2 Supplementation of reward policies: ...............................................................43
3.2.1. Development of achievement-based bonus policies: ...............................43
3.2.2 Supplementation and amendments of reward policies to encourage
employees to work at the Corporation for a long time:......................................43
3.3. Specific actions to positively impact the employee performance and reward
evaluation results ...................................................................................................44
3.3.1 Collection and analysis of employees’ opinions on human resource
management........................................................................................................44
3.3.2 Supplementation of Key Performance Indicators (KPI) ...........................45
3.3.3 Employee encouragement forms ...............................................................45
3.4. Implementation of human resource management support activities ..............46
3.4.1 Communication culture development in the Corporation .........................46
3.4.2. Company tradition and emulation movement development: ...................47
iii
3.4.3. Using human resource management software:.........................................47
3.5. Action plan ......................................................................................................49
CONCLUSION .........................................................................................................59
REFERENCES ..........................................................................................................61
iv
LIST OF TABLE
Table 1.1: Theory X, Theory Y and Theory Z ........... Error! Bookmark not
defined.
Table 1.2: 3 application steps of V. Vroom’s theory of expectation .... Error!
Bookmark not defined.
Table 1.3: 8 Main purposes of employee rewards ...... Error! Bookmark not
defined.
Table 1-4: Rewards: principles, bases, requirements . Error! Bookmark not
defined.
Table 2.2: Respondent structure ................... Error! Bookmark not defined.
Table 2.3: Assessment results on performance evaluation Error! Bookmark
not defined.
Table 2.4: Spiritual reward evaluation results ............ Error! Bookmark not
defined.
Table 2.5: Compensation evaluation results . Error! Bookmark not defined.
v
LIST OF FIGURES
Figure 1.1: 5 Levels of Maslow’s Hierarchy of Needs ........... Error! Bookmark not
defined.
Figure 1.2: V. Vroom’s theory of expectation (1964) ............ Error! Bookmark not
defined.
Figure 1.3: Classification of compensation forms .... Error! Bookmark not defined.
Figure 1.4: E. Lawler’s model of income satisfaction level ... Error! Bookmark not
defined.
Figure 2.1: Organizational chart of PVC as of March 31, 2018 .... Error! Bookmark
not defined.
Figure 2.2: Summary of employee survey results..... Error! Bookmark not defined.
Figure 2.3: Summary of employee survey results by rank ..... Error! Bookmark not
defined.
Figure 2.4: Summary of employee survey results by Department . Error! Bookmark
not defined.
Figure 2.5: Evaluation on issues to be improved ..... Error! Bookmark not defined.
vi
vii
INTRODUCTION
1. Rationale
PetroVietnam Construction Joint Stock Corporation (PVC) is an enterprise
with 35- year operational history as of 2018. PVC is also a public enterprise, listed
on the stock exchange with PVX code and once warmed the hope of investors.
Under the parent company - Vietnam Oil and Gas Group (PetroVietnam)’s resolute
decisions on divesting capital from subsidiaries outside the main business lines,
PVC has been facing difficulties and making losses since 2012. A number of units
had to be dissolved while PVC was a leading enterprise in the field of petroleum
construction, affecting the psychology and confidence of employees.
Human resources in general and motivating employees in particular are
always a hot issue with many creative solutions in each unit.
Human resources in general and work motivation and employee satisfaction
in particular are always a hot issue with many creative solutions in each unit.
2. Research objectives
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Present scientific and practical basis to propose some solutions to create
work motivation at PetroVietnam Construction Joint Stock Corporation
(PVC)
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Analyze and assess the current status of work motivation at PetroVietnam
Construction Joint Stock Corporation (PVC). Clarify the shortcomings in
this work and the need to change it.
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Propose work motivation solutions to contribute to implementing the
business development orientation of PetroVietnam Construction Joint
Stock Corporation (PVC)
3. Research questions
To meet the above research objectives, the following research questions need
to be answered in the thesis:
1. What models and systems have been mentioned in dealing with the work
motivation and dedication of employees?
2. What are the peculiarities of work motivation for employees in the
construction industry (or petroleum)?
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3. What are the achievements of PVC and what are the limitations of PVC
in work encouragement and motivation?
4. What improvements does the Corporation need?
4. Research Subject and Scope
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The research subject of this thesis is: Work motivation at PetroVietnam
Construction Joint Stock Corporation (PVC)
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Research scope: PetroVietnam Construction Joint Stock Company (PVC)
Data source
Data for the study are taken from two main sources. Secondary data are
collected from industry reports, company reports, annual reports, publications and
other related websites. Primary data are collected directly from surveys and
selected interviews with a number of internal and external employees.
5. Research methods
On-site research is conducted as a basis for learning about and selecting
appropriate analytical models and tools before the questionnaire is designed to
collect information through social survey methods. About 100 questionnaires are
randomly distributed to different groups of employees in the Corporation.
The collected data is processed by excel spreadsheets to obtain meaningful
analysis results and exact answers to the above mentioned research questions.
6. Thesis design
The Thesis consists of five parts:
Part 1: Introduction: Rationale, scope, subject, objectives and expected
research findings;
Part 2: Summary of theoretical models that can be used to analyze the
current status of work motivation for employees in the Corporation.
Part 3: Actual survey and analysis results to find out solutions to further
improve the work encouragement and motivation activities at PVC.
Part 4: Some suggestions to improve work motivation at PVC
Part 5: Conclusion
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CHAPTER 1
OVERVIEW OF WORK MOTIVATION FOR EMPLOYEES
1.1 Concept
1.1.1 Human resource management and encouragement
There are many different concepts of human resource management:
According to American Professor Dimock, “Human resource management
includes all measures and procedures applied to employees of an organization and
resolves all arising cases related to a certain type of work”.
Professor Felix Migro said that “Human resource management is an art of
selecting new employees and using existing employees so that each person may
reach the maximum labor productivity and quality”
Human resource management philosophy:
Despite the changes in the labor market and the state’s approach to the economy,
an approach that is considered to be the most practical and constructive based on the
original ideas of Enid Mumford (1972) and McCarthy and Ellis (1973) were first
introduced in 1979, then slightly revised in 2002. The approach states that:
In practice, human resource management is considered a series of activities
aimed at enabling employees and employer to reach a common agreement on the
nature and purpose of the work relation and finally comply with the signed
agreement (Torrington and Chapman 1979, page 4).
The definition in the 5th revision (2002) is as follows:
“Human resource management is a series of activities that firstly enable
employees and employer to reach a common agreement on the purpose and nature
of the labor relation, secondly ensure that the agreement is fully implemented.”
(Torrington, Hall and Taylor 2002, page 13).
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Human resource reward is the process of “taking care of the material and
spiritual life of employees so that they can complete their assigned tasks, thereby
fulfilling the goals of the enterprise”.1
Encouragement and motivation
1.1.2 Goals of human resource management
The basic goal of any organization is to effectively use human resources for
its overall goals. Therefore, human resource management in enterprises is often
oriented with the following basic goals:
Social goals: Enterprises operate not only for profit but also for the benefits of
society.
Human resource management is aimed at attracting talented people, at the same
time, consolidate and maintain the quantity and quality of personnel needed to
achieve the set goals of the company.
Human resource management is aimed at finding out and developing the best
methods to effectively use human resources to improve labor productivity, at the
same time, facilitate the employees’ continuous development.
Human resource management is aimed at motivating employees, creating
favorable conditions for them to express, develop and devote their talents to the
company, at the same time, help them to attach, devote and loyal to the
company.
1.2. Theories on work encouragement and motivation through needs
The study and application of need theories in human resource management
will help managers identify the needs of employees as a basis for developing
appropriate reward policies as well as appropriate measures to motivate employees.
1.2.1. Maslow’s hierarchy of needs (1908-1970)
According to Maslow:
-
Human behavior is driven by a chain of needs.
1
Vu Thuy Duong & Hoang Van Hai, “Human Resource Management” Textbook, Statistical Publishing
House 2008
4
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People have special talents that enable them to make independent choices,
thus giving them control of their destiny.
-
Human needs including five (05) categories are arranged in different
hierarchies and modeled as follows:
Self-actualization
Esteem
Love/belonging
Safety
Physiological
Figure 1.1: 5 Levels of Maslow’s Hierarchy of Needs
Maslow believes that effective leadership and management must be paid attention to
meeting the needs of people.
1.2.2. Frederick Herzberg’s Two-Factor Theory:
In 1966, Frederick Herzberg wrote the famous book titled “Work and nature of
man” about human motivation, he proposed two factors:
Motivator factor: achievement, recognition, work itself, responsibility,
advancement, growth. All of these things create job satisfaction.
Demotivate factor: leads to dissatisfaction if it is not met, does not motivate
people to work. For examples, demotivate factor includes organizational policy,
work supervision, working conditions, salary, relationships with colleagues,
relationships with subordinates.
1.2.3. D.McClelland’s theory of satisfied needs:
Specific needs achieved or known and shaped by life experiences include:
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Achievement: A group of people who like challenges and have achievable
goals, and some feedback.
Affinity: A group of people with a high degree of harmony who always desire
harmonious relationships and need to be accepted by others. Therefore,
managers should try to create a collaborative work environment for them.
Power: A group of people with a need for power including individual power
(not good), collective power (good for the organization), who are seeking
collective power management opportunities.
1.2.4. Douglas McGregor’s X-Y theory:
Douglas McGregor propagated human relationships close to management in the 1960s.
Table 1.1: Theory X, Theory Y and Theory Z
Theory
Brief contents
Theory X
States that employees don’t like and avoid work, so managers
need to take mandatory measures, threats and control methods to
make employees meet their goals.
Theory Y
States that individuals consider work as playing or resting and
enjoying the satisfaction of being respected and their real needs.
Theory Z
Introduced by William Ouchi in 1981 and based on a Japanese
approach to motivating employees, emphasizing trust, quality,
collective determination and cultural values.
Theory X – Economic human theory (Taylor, Grant, Ghinbert, Fayol):
This theory states that human nature is lazy, mechanical and disorganized. Human
only works in moderation to make a living and always avoid work, just like material
benefits without group and friend relations. Therefore, the most logical solution is
to divide the work into repetitive tasks to make it easier to learn. Moreover,
managers must regularly supervise, urge and inspect the performance of the
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authorized staffs. A system with clear hierarchy and a strict reward and punishment
regime is also established.
This management style will make employees be worried and scared. They accept hard
work because of both high wages and harsh employer. In such conditions, the employee
will be tired, lack of creativity in the process of completing the assigned job.
Theory Y – Social human theory (Gregor, Maslow, Likest):
This theory assesses the underlying potentialities in humans as the great possibilities
that need to be evoked and exploited. People in any position have a high sense of
responsibility and work hard to complete their assigned work. Everyone finds himself
useful and respected, shared responsibility and asserted. From this point of view and
evaluation, the management method is applied through self-awareness, creating
favorable conditions for employees to actively work and inspect their work. Managers
must trust and actively engage employees in the work, having a mutual understanding
between superiors and subordinates.
Under this management style, employees find themselves important and have a role in
the collective, so they are more responsible for the assigned work, voluntarily work and
take full advantage of their potentialities to get the job done in the best way.
Theory Z – Theory of Japanese enterprises:
This theory states that satisfying employees is the key to high labor productivity.
The absolute belief in employees, the delicacy in behavior and close coordination
among the collective are the decisive factors for the success of human resource
management in the business. According to this theory, managers care about their
employees and create favorable conditions for them to study and share their rights
appropriately.
This method makes employees feel confident and loyal to the business, considering
the business as their home. However, this style of management sometimes makes
employees dependent and passive at work.
1.3 Encouragement through expectation
The theory of expectation by Prof. Dr Victor Vroom (Yale School of Business)
suggests that an individual will act in a certain way based on expectations of an
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outcome or the attractiveness of such outcome. This model was introduced by V.
Vroom in 1964, then revised and supplemented by some other researchers,
including scholars Porter and Lawler (1968).
V. Vroom’s theory of expectation is based on the following formula:
Attractiveness x Expectation x Means = Motivation
Figure 1.2: V. Vroom’s theory of expectation (1964)
Where:
• Attractiveness (Rewards) = Attractiveness for a goal (What is my reward?)
• Expectation (Work performance) = trust of employees that if working hard, the task
will be completed (How hard do I have to achieve the goal?)
• Means (Belief) = employees’ belief that they will receive a reward when
completing the task (Will people know and appreciate my efforts?)
The achievement of these three factors is the motivation for someone to do
something. It is the power that leaders can use to lead the collective to accomplish
the set goals. When an employee wants to promote in his job, promotion is highly
attractive to himself/herself. If an employee believes that when he/she works well,
meet schedule requirements, etc., he/she will be appreciated by people, which
means that he/she has a high level of expectation. However, if he/she knows that the
company will recruit people from outside to fill in vacancies or apply for
managerial positions rather than promote staff at lower levels in the company,
he/she will has a low level of means and it will be difficult to motivate him/her to
work better.
The applications of this theory are summarized as follows:
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Step 1
Step 2
Step 3
Increase expectations from
Increase expectations
Increase satisfaction level
effort to work completion
from work completion to
efficiency
Choose the right
employee for the job.
Train good employees.
“Role-play” clearly at
work.
Sufficiently supply
necessary resources.
Instruct, monitor and
Measure work
Ensure
valuable
processes correctly.
rewards (material &
Describe good and bad
spiritual rewards)
results.
Particularize rewards.
Explain and apply the
Minimize differences
remuneration
in
mechanism based on
satisfaction of results
the
degree
of
the work result
actively collect feedback
Figure 1-3: 3 application steps of V. Vroom’s theory of expectation
1.4. Encouragement through equity
Equity Theory is a theory of employee encouragement launched by John Stacey
Adams, a behavioral and management psychologist, in 1963. Like many other
famous encouragement theories (Maslow’s hierarchy of needs or Frederick
Herzberg’s Two-Factor Theory), Adams’s Equity Theory presents implicit and
transformative factors that impact employees’ perceptions and assessments of their
company and their work.
Common applications of this theory in the management and leadership practice are:
Equity in combination with job performance management tools can collect
feedback to evaluate and compare employees’ work performance, helping
the organization identify which behaviors contribute to increased job
performance and set standards for the best.
Motivate employees to work because timely work recognition from
managers or supervisors is a top motivating factor for them. If an individual
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finds himself underpaid, he will reduce his efforts to maintain “balance”. If
he thinks that he is being paid well, he will try to work harder.
Manage employees through consideration of the correlation between the
contribution rate and the outcome received by employees, thereby making
appropriate adjustments.
1.5 Other applications in encouragement and motivation
1.5.1. Employee evaluation
Employee evaluation is one of the top issues of human resource
management. It is the basis for businesses to recruit, train, develop and treat
personnel. Employee evaluation is aimed at determining the employee’s level of job
performance, career development ability and collecting information about
employees’ personal aspirations, thereby making the right decisions on personnel
dispatch, assignment, promotions and remuneration for each employee.
Employee assessment requires accuracy and fairness. If this job is done well,
it will create a healthy and positive working environment as well as a healthy
competition among employees. Each person tries to work better to receive good
assessment and adequate remuneration. On the contrary, employee evaluation in a
subjective, rational and unfair manner will create a stressful and inhibiting working
atmosphere. Employees who are overestimated will not perform a newly assigned
task well or become subjective and non-progressive meanwhile those who are
underestimated will be discontented and depressed and lose their work motivation.
As a result, businesses suffer from reduced labor productivity and quality and an
open and friendly working environment is disrupted, adversely affecting the
corporate culture and possibly losing potential employees.
Employee evaluation process and contents:
The employee evaluation process will be conducted through the following stages:
Determine the contents to be assessed: The contents to be assessed depends on
the nature and position of the job.
Develop assessment criteria: The assessment criteria should be elaborated in a
detailed, easy- to- understand, easy-to- identify and maximized manner.
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Set benchmarks as the assessment goal: These benchmarks represent the
wishes/requirements of the business for each position.
Conduct employee evaluation: Compare the collected information on the
employee’s work performance with the corporate benchmarks.
Talk the evaluation results to employees.
Several employee evaluation methods:
Some main methods used to evaluate employees are:
Alternating ranking: Give some main criteria, list the people to be assessed and rank
them from the best to the worst according to the given criteria. This method is simple
but quite subjective and emotional.
Pair comparison: The employees are compared to each other in pairs based on the
ranking criteria. This method is time-consuming and still subjective.
Grading method: Employees are assessed according to different criteria. Each
criterion is divided into assessment levels (weak, average, fairly good, good,
excellent) corresponding to the score (1, 2, 3, 4, 5). This method is very popular
because it is easier to perform and more objective.
1.5.2. Employee rewards
Organizational rewards:
“Organizational rewards are the remuneration derived from the work
performance at an organization, including intrinsic rewards and extrinsic rewards.”2
Intrinsic rewards can be understood as mental compensation that employees
themselves have through work such as recognition, job satisfaction, personal
development, etc.
Extrinsic rewards are controlled and distributed directly by the organization
and are tangible.
2
Lloyd L. Byars and Leslie W.Rue, “Human Resource Management” (IRWIN 1997), pp 314.
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