Tài liệu Solving the problem of job dissatisfaction at global vietnam aluminium co., ltd

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ DƯƠNG THỊ HỒNG NHUNG SOLVING THE PROBLEM OF JOB DISSATISFACTION AT GLOBAL VIETNAM ALUMINIUM CO., LTD MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2020 Page | 1 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ DƯƠNG THỊ HỒNG NHUNG SOLVING THE PROBLEM OF JOB DISSATISFACTION AT GLOBAL VIETNAM ALUMINIUM CO., LTD MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR NGUYEN PHONG NGUYEN Ho Chi Minh City – Year 2020 Page | 2 List of Contents Executive summary .............................................................................................................. 1 1. Company background .................................................................................................... 2 1.1 Overview of Global Vietnam Aluminum Co., Ltd ................................................. 3 1.2 The development of Global Vietnam Aluminum Co., Ltd ..................................... 3 1.3 The main product of Global Vietnam Aluminum Co., Ltd .................................... 4 1.4 Organizational structure of Global Vietnam Aluminum Co., Ltd .......................... 4 1.5 The strategy of Global Vietnam Aluminum Co., Ltd ............................................. 6 2. Symptoms ...................................................................................................................... 6 2.1 The high turnover rate................................................................................................. 7 2.2 Turnover rate of engineer........................................................................................ 9 2.3 Turnover rate by reasons ....................................................................................... 10 2.4 Initial cause-effect map ......................................................................................... 12 2.5 Updated Cause-effect map .................................................................................... 18 3. Problem justification .................................................................................................... 19 3.1 Problem definition ................................................................................................ 19 3.2 Problem existence ................................................................................................. 19 3.3 Problem importance .............................................................................................. 21 4. Causes validation and solutions ................................................................................... 22 4.1 Potential causes ..................................................................................................... 22 4.1.1 Lack of career development ........................................................................... 23 4.1.2 Lack of leadership .......................................................................................... 24 4.1.3 Unprofessional working environment ............................................................ 24 4.2 Causes existence ................................................................................................... 25 4.3 Alternative Solutions ............................................................................................ 28 4.4 Solution justifications ........................................................................................... 33 Page | 3 5. Action plan ................................................................................................................... 33 6. Conclusion ................................................................................................................... 38 7. Supporting information ................................................................................................ 39 7.1 Methodology ......................................................................................................... 39 7.2 Research tool ......................................................................................................... 39 7.3 Interviewees demographic .................................................................................... 40 7.4 Interview Transcription ......................................................................................... 40 References .......................................................................................................................... 59 Page | 4 LIST OF TABLES Table 1: Total employee Turnover Rate in Global Vietnam Aluminium Company. ........... 8 Table 2: Employee Turnover Rate of the engineers in Global Vietnam Aluminium Company ............................................................................................................... 9 Table 3: Resignation reasons for the engineer in GVA (2019) .......................................... 11 Table 4: Training estimated costs ....................................................................................... 30 Table 5: Motivating estimated costs ................................................................................... 32 Table 6: Planning schedule ................................................................................................. 35 LIST OF FIGURES Figure 1: Company structure ................................................................................................ 5 Figure 2: Human Resources structure .................................................................................. 5 Figure 3: Employee Turnover Rate in Global Vietnam Aluminium Company ................... 8 Figure 4: Engineer turnover rate at Global Vietnam Aluminium Company ...................... 10 Figure 5: Engineer resignation reasons in GVA ................................................................ 11 Figure 6: Initial cause-effect map ....................................................................................... 12 Figure 7: Updated cause-effect map ................................................................................... 18 Figure 8: Final cause-effect map ........................................................................................ 23 Page | 1 Executive summary Nowadays, facing with high turnover rate and low recruitment are more concentrated by many corporations over the world, especially in a highly competitive market. Key positions such as expertise, managers, and directors will bring too many benefits and values to the company. Employees are major assets of any organization and the effective competitive advantage of many enterprises. The importance of employees to an organization has been acknowledged for a long time because they have a role in creating, maintaining a competitive advantage and help the organization more development. Lots of companies in Vietnam do not pay more attention to human resources, and it is also often left to deal with employee turnover and the difficulties it brings. In the market, the competition within the job market is getting fiercer and increased the number of employee turnover rates have become a concern for enterprises as well as the government. Employees can leave a company for lots of reasons, when employees willingly leave a company, usually because they have other choices and they willingly go to work in another company. This research study was conducted to explore the issue of employee turnover rate and retention talent employees in the manufacturing company, using Global Vietnam Aluminum Co. Ltd as the context. This research was conducted to assess the impact of employee turnover on organizational performance in a manufacturing company, investigate the causes of staff turnover and finally recommend solutions that can be used to reduce the number of employee turnover in Global Vietnam Aluminium Co. Ltd. Page | 1 1. Company background Nowadays, the global economy is developing day by day. Vietnam's aluminum industry has continuously developed. Policies to encourage foreign countries' investment in Vietnam as well as to encourage Vietnamese enterprises to export to foreign countries have made Vietnam's economy develop in a positive way. At this time, in the aluminum market as well as aluminum products in the world is increasingly active while Vietnam is one of the countries attracting high foreign investment from big countries like the USA, Australia, China, Canada. In a fast-moving environment, everything needs to change and enhance itself to integrate and develop. There is always a chance for us to take part in this challenging business world if we are well-organized and dedicated to devoting to society. Grasp that situation, the biggest factory in Vietnam and one of the biggest in Southeast Asia is Global Vietnam Aluminum Co., Ltd (GVA) is 100% Australian capital investment invested in 2011. The factory is located in My Xuan B1 Conac, industry zone, Ba Ria – Vung Tau province, which has a strategic advantage of transportation logistics and economic efficiency. One of the emerging newcomers to confront this challenge and undertake this responsibility. An advanced infrastructure at GVA provides customers with reliable and sustainable production and distribution. New factory with all of the latest technology in the aluminum industry that can satisfy every requirement of customers. With modern equipment and machinery, the company is gradually asserting its position in the aluminum industry, especially aluminum billet. Along with understanding the aluminum market and business environment of Asia in particular and of the world in general, Global Vietnam Aluminium brings suitable solutions to the business characteristics and environment of each enterprise. Global Vietnam Aluminium team comprises experienced professionals and dedicated workers with all modern production techniques that enable the company to provide the best quality products in less time. The company prioritizes the employment of domestic labor, ensuring the rights and interests of workers, strictly complying with the regimes prescribed by the Labor Law, respecting the right to organize trade unions under the Trade Union Law. Create jobs for officials and employees, improve the average income is Page | 2 increasing. Additionally, Global Vietnam Aluminum Co., Ltd often gives training sessions to all workers for the enhancement of productivity. 1.1 Overview of Global Vietnam Aluminum Co., Ltd - Full name : Global Vietnam Aluminum Co. Ltd - Trading name : GVA - Address : My Xuan B1 Conac Industrial Zone, My Xuan, Ba Ria – Vung Tau province - General Director : Jacky Cheung - Start date : 08/8/2011 - Charter capital : 5.000 billion USD - Company size : 63 hectares - Total staff : 963 1.2 The development of Global Vietnam Aluminum Co., Ltd Global Vietnam Aluminum Co., Ltd was founded by two major shareholders, namely Jacky Cheung and Wang Tong, with five thousand billion dollars in capital investment and was established in 2011. In the beginning, company size was 40 hectares with around four hundred employees and expanded to 63 hectares three years later, with numerous hard working employees reaching up to approximately one thousand. Since its establishment, Global Vietnam Aluminum continues to develop and remain as an outstanding organization in the manufacturing of aluminum extrusions in Southeast Asia within the last few years. Producing and supplying high-quality aluminum billets with currently the production capacity has crossed a record of up to 200,000 metric tons annually and export to countries around the world, for example, Philippines, Malaysia, Indonesia, Thailand, Canada, USA, Hong Kong, China, etc. to name just a few to serve and support customers' needs through the best services and products. At the very first beginning of our operation, Global Vietnam Aluminium only focuses on manufacturing and selling aluminum billet 6xxx series, among them, the core product is the primary aluminum billet 6063 which receives a great deal of recognition among customers across the domestic and international market. Realizing that billet is just a Page | 3 semi-final product and does not bring us the opportunity to make this world a more beautiful and better place, at the end of 2014, Global Vietnam Aluminium decided to adjust our business strategy and headed to become the top aluminum extruders within the region. With the extruded capacity of up to 80,000 MT per year sponsored by the 03 most advanced couple presses in the plant, Global Vietnam Aluminium entirely confident to supply the best aluminum profiles to serve the needs and demands of the market. 1.3 The main product of Global Vietnam Aluminum Co., Ltd GVA uses primary aluminum ingots as raw materials with five main products selected from different countries to ensure the best quality as below: - 05 couples of smelting/furnaces (500 – 600 MT/day) - 05 homogenization furnaces - 03 couples of aluminum extrusion presses (2000; 2750; 3600 MT) - Anodized facilities - Powder coating facilities 1.4 The organizational structure of Global Vietnam Aluminum Co., Ltd GVA has a main factory in Tan Thanh town, Ba Ria - Vung Tau province, and has around 1.000 employees from around the country come to work and 23 ex-pats who are working in 8 departments: Human Resource, Quality Control, IT, Extrusion, Mold, Warehouse, and Painting. The Board of Director who is responsible for all activities in the company and drive GVA going on the right track and strategy. Each department played an essential role in supporting the company to expand and develop business in Vietnam. Page | 4 Figure 1: Company structure The organizational chart shows the internal structure of the Global Vietnam Aluminium organization. Board of directors in the highest-ranking position atop the chart and followed by the following in descending vertical order: - Chairman of the board of directors - General director - Head of departments Figure 2: Human Resources structure Page | 5 The organization chart in the Human resources department at Global Vietnam Aluminium has five sections with some functions as below: - Assistants who report directly to Human resources manager - Recruitment and training have the responsibility to find talent candidates suitable for each position and training regulation, skills, or other development functions. - C&B – Labor relation creates happier workplaces, make reward and recognition programs to inspire peak performance, adapt the practice of transparent payment policies, determined based on experience, work skills, knowledge, performance ratings, and employee performance and market value and the relationship between employer and employee in the company - Visa – Expat has responsibility for everything related to the foreigner. - The administration is another job required. 1.5 The strategy of Global Vietnam Aluminum Co., Ltd Global Vietnam Aluminium's strategy is cost management and endeavors to pursue appropriate products to enhance value for its customers. It has crystallized an important project for the full modernization, automation, and up-gradation of the existing three presses of its plant for having a higher level of performance to make prestige is being widely speeded throughout Asia and the rest of the world. Customers must set at the top of the priority list, which always pushes the company to strive to take better care of them every single day. To meet the company's goals and strategies, the company's human resource strategy focuses on developing young, dynamic, and talented staff, recruitment of multicultural staff. 2. Symptoms Identify symptoms are the first thing to do in order to find the root causes of the problem. The problem would be wrong if we cannot distinguish problems and symptoms. No symptom means no problem. According to Marlon (1) stated that it is significantly essential to distinguish the problem and symptom. The author has carefully interviewed some members of the board of director, heads of the department and based on data from Page | 6 2017 to 2019, the author found symptom that happening at GVA is high turnover rate, but at this research, the turnover rate of engineers in 2019, which affects to the manufacturing in the organization, was examined. These symptoms will be analyzed in detail as follows: 2.1 The high turnover rate Human resource is vital to each organization, which creating value and bring benefit to the organization. According to Backer et al. (2), besides traditional tools such as money and technology, human resource is the unique tool which can make the organization growth and creating a competitive advantage to cope with rivals. We can imitate everything, but we cannot copy human resources. It plays a vital role in the organization, that is the reason why there are many surveys and research about human resources conducting every year in order to get insight into human resources, and it will be more advantageous if the organization has sustainable human resources. A high turnover rate means that the company lost its advantage and one critical tool to compete in the market. Abassi and Hollman (3) defined that turnover rate in the company is the replacement of employees in an organization often on a year-on-year basis, which also reflects the rotation of workers between their occupation, companies, labor market as well as their employment status and the states of employment and unemployment, expressed as a percentage of total workforce numbers. The turnover rate is the number of workers quitting their job and leaving their company to the total members of the company during a specific period. In the report from the human resource consultancy, Anphabe (4) shows that the employee turnover rate in Vietnam was on the rise in 2019 with 24 percent compared to 20.5% in 2018 and 19.1% in 2017. Moreover, below is the turnover rate of GVA; it is an initial symptom that GVA is facing in recent years is the increase in the resignation of employees in the organization. Based on the data of the GVA's Human resource department from 2017 to 2019, the company's turnover rate varies from year to year. Especially, the resignation rate recorded times in 3 years is shown in Table 1 and also in Figure 1as well: Page | 7 Global Vietnam Aluminium Company Year The turnover Total Leave Recruitment Turnover staff staff staff rate 2019 862 370 256 43% 24% 2018 976 386 400 40% 20.5% 2017 962 617 649 64% 19.1% rate in the industry Table 1: Total employee Turnover Rate in Global Vietnam Aluminium Company. Adapted from Global Vietnam Aluminium Company Human Resources Annual Reports (2017 – 2019) (Internal Source) Turnover rate from 2017 to 2019 70% 60% 64% 50% 40% 43% 40% 30% 20% 10% 0% Y 2019 Y 2018 Y 2017 Figure 3: Employee Turnover Rate in Global Vietnam Aluminium Company Adapted from Global Vietnam Aluminium Company Human Resources Annual Reports (2017 – 2019) (Internal Source) Page | 8 According to the above table and the chart showed that the turnover rate in GVA is very high. Over 40% of employees leave GVA each year; the total employees also decreased from 962 in 2017 compared to 862 in 2019. In 2017 it had 370 employees turnover; it equals 64% of the number of staff. Turnover rate demonstrates a 24% decrease over 2018 and increases in 2019 the number of employees' turnover rate quitting their job at GVA in 2019 growth 3% compared to the data in the previous year. Employee turnover rates in 2018 and 2019 are 40% and 43%, respectively. 2.2 The turnover rate of engineer According to Taylor and Finley (5), the high rate of employee turnover in the company has been linked to the low skill of requirements in each level of positions in the company. In the statistical data, the author has already conducted a deep-dive analysis by the management, engineer, technician worker. From now on, employees considered engineers. In this research, I would like to focus more on the turnover percentage of engineers, because this is the key persons who are directly executing the company technology. These engineers play important roles, but the turnover rate is also high. It is shown in Table 2 and Figure 2 as below: Employee turnover rate from 2017 to 2019 Year 2017 2018 2019 Total engineer 54 54 66 Total resigned 30 36 54 The turnover rate of engineer 56% 67% 82% Table 2: Employee Turnover Rate of the engineers in Global Vietnam Aluminium Company Adapted from Global Vietnam Aluminium Company Human Resources Annual Reports (2017 – 2019) (Internal Source) Page | 9 Turnover rate of engineer 90% 80% 82% 70% 67% 60% 56% 50% 40% 30% 20% 10% 0% Y 2017 Y 2018 Y 2019 Figure 4: Engineer turnover rate at Global Vietnam Aluminium Company Adapted from Global Vietnam Aluminium Company Human Resources Annual Reports (2017 – 2019) (Internal Source) As we can see, the number above shown that the percentage of engineer turnover level increases year by year. Comparison between 2017 to 2018, it increased by 11% and 2018 to 2019; it increased by 15%. In just three years, this number has risen to 26% from 56% to 82%. Furthermore, when compared these numbers to the report of Mercer – Talentnet in 2017 is 17,8%, and 2018 is 10,5%. These numbers have shown that the Human capital at GVA is a big concern for the engineer. Why are many engineers leaving their work? The management must find out and solve this issue thoroughly if they want to grow the organization in the future. Based on the information shown above, it demonstrated that the wave of resignation is happening at GVA. With the exceptionally high turnover rate of the engineers, it is a severe symptom that must be considered if GVA wants its business to grow as its expectation. 2.3 Turnover rate by reasons Page | 10 To clarify the factors that may impact on engineer turnover rate in GVA, the recruitment and development team invited engineers who leave the organization into the exit interview, identified as the target group, and they will receive a questionnaire to answer. Bases on the data from exit interviews, they did a survey. This survey is a tool for the Human Resources Department to approach the employee's reasons for quitting the job and find out real solutions for the problems (if available). In this case, the organization will clearly understand the reason why engineers want to quit their job and leave the company. Reasons for resignation Percentage in 2019 Lack of training and development 27% Poor management 21% Lack of interest 36% Poor workplace relationships 16% Table 3: Resignation reasons for the engineer in GVA (2019) Adapted from GVA's Human Resources report engineer level (2019) (Internal Source) Engineer reasons for resignation in 2019 16% 27% Lack of training and development Poor management Lack of interest 36% Poor workplace relationships 21% Figure 5: Engineer resignation reasons in GVA Adapted from GVA's Human Resources report engineer level (2019) (Internal Source) Page | 11 According to the chart above, I recognize that the main reasons influencing the employee to leave an organization is lack of interest. It takes the highest percentage, with 36% on the reasons list for quitting the job in 2019. The leaving reason that has the second-highest proportion is that training and development. There are 27% of respondents sharing that they leave the company due to this reason. In the third place is the reason for poor management with 21%. For this reason, they are having some types such as unfair work or employees unhappy with their bosses, and they are considered a significant reason for their decision. Moreover, 16% of employees to answer the reason for their leaving by answering due to poor workplace relationships directly. Therefore, based on this data, it is possible to conclude that the key factors which influence on employees' job quitting decision is job dissatisfaction and these factors refer to unhappy or negative about work or work environment. 2.4 Initial cause-effect map Based on the face-to-face interviews with relevant people, including managers and engineers, the initial cause-effect map is presented as below graphic: Figure 6: Initial cause-effect map Potential central problem Potential problem Symptom Lack of interest Job dissatisfaction Lack of Training and development High turnover rate of engineer Poor management Source: In-depth interview Poor workplace relationships Page | 12 Potential problems Lack of interest We can see all the information above that illustrated that the percentage of employee turnover rate at GVA is very high and it is increased every year. Through an in-depth interview with employees and managers in the company, I would like to show some results as follows: Through the interview with Mr. Lin – Deputy general director stated that The reason for quitting their job and leaving their company is dissatisfaction due to low motivation, lack of interest and commitment to work. Besides, they do not have a chance to improve and develop themselves. And Mr.Kuo – Head of Operation also comments that I am such a headache with the number of the resignation of my subordinate because they do not have much chance for development due to the working environment, the opportunity to update their skills and job does not motivate them to work. This will make them feel anxious and loss of interest in work. And most of the employees who had in the interview admitted that they do not engage with the company because they do not see their future and do not know where is their position after five years more. A lack of interest in work is the reason why employees are unhappy at work and dissatisfaction with their job. Most employees want to do job duties that are more engaging to challenge themselves. Bored work easily makes an employee to experience boredom and little incentive to concern themselves with workplace productivity. And this will affect directly to job dissatisfaction in the organization. As Vindia (6) indicated that job satisfaction has a profound impact on performance in the workplace, it is not only created more comfortable and fun in the workplace but also has a connection to be more efficient, more developed, and more productive. Job satisfaction brings better communication, connection, more interaction, and positive collaboration between staff and managers. Furthermore, it is improving the company's performance. The higher rate of employee satisfaction can lead to higher job satisfaction, which motivates staff to perform at their best at all times and anywhere Page | 13 Moreover, when the organization can improve job dissatisfaction, this will lead the employee satisfaction with the company, it can bring so many benefits such as loyalty rate increase, the cost of retention and recruitment decrease, the employee performance can be improved. Ellis (7) admitted that job satisfaction is critical, which is essential to the overall development and success of the business. The high rate of job dissatisfaction can transform the company from inside, reduce productivity, decrease employee’s performance, innovation, extension, customer dissatisfaction, and collaboration. Moreover, it is also a factor to retention employees, creating a dynamic and industrious working environment in the company. Lack of training and development According to Savickas (8), training and development are vital to the employee. With the promotion of good policies, the employee will perceive to be fair suitable to their expectations. In addition to this, training and development provide employees with opportunities for personal growth and more responsibilities. Training and development create an opportunity for promotion in an organization by providing an opportunity for training and skills development that allows the employee to improve their abilities. Training and development will make the employees' performance better when they perceive the opportunities for career development in the organization. Mr. Than – Engineer equipment also stated that We do not have an opportunity to upgrade our skills and this will make us lack of motivation to work here. We do not see any support from colleagues, staff, and the working environment could be bored; we will leave if we found a better chance to develop ourselves. After conducting in-depth interviews with some employees in the company – most of them are managers; I found that they are not happy with the company due to of chance for learning and growing themselves, do not have any support from colleagues and board of directors. Most of them intend to work in enterprise for a short time, they do not have Page | 14 any commitment to the company, and they are just working here to wait for a better opportunity and will quit their job without consideration. Additionally, training and development can include a reduction in voluntary resignation by employees as they are likely to perceive career development opportunities in the organization. Training and development are considered one of the factors that bring success for the company, and the turnover rate of the employees, especially core employees who voluntarily quit their job and leave the company, may make high impacts on the firm's performance and company's management. In the exit interview of GVA, 27% of engineers shared the reason was lacking in training and development. Employees do not have the opportunity to climb the ladder and grow for the career, that can foster dissatisfaction with a position. This could mean that the employee will potential leave for another organization that can bring a better career growth opportunities for them. Lacking career development in the company will also increase the company costs, such as hiring costs, training costs, and other costs. The manager needs to focus on training and development for the staff to keep talented employees. Poor management Sarah (9) indicated that leadership is that leaders motivate, inspire, and encourage their employees in order to promote, innovate, and create changes that shape the success of the enterprise. Managements play a strategic role in each organization. They are not only a leader in the company but also a brother in the family to lead their relative in the right direction. They are coached employees to be a great one who can bring many differences, many creative to them, to the company, and they are the active listener and always fair with their colleagues. They are driving employees going in the right direction – that is, a great leader. In opposite, poor leaders can destroy talents because they do not know how to maximize and develop talents. They always want employees to show the best results but do not care anything besides that. This is easy to make stressful for their staff. They are not a listener but a dictator who always wants employee serving them, do anything they want and Page | 15