VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL *************** NGUYEN THI THU IMPROVING HUMAN RESOURCE MANAGEMENT PRACTICES IN JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM MASTER THESIS HA NOI - 2021 VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL *************** NGUYEN THI THU IMPROVING HUMAN RESOURCE MANAGEMENT PRACTICES IN JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM CẢI THIỆN QUẢN TRỊ NGUỒN NHÂN LỰC TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM Major: Master in Financial Management Code: 8340202.01QTD MASTER THESIS Supervisor: Dr. Mai Anh HA NOI - 2021 ACKNOWLEDGEMENT I wish to express my sincere appreciation to my supervisor, Doctor Mai Anh, and all my colleagues. Without their persistent help, the goal of this project would not have been realized and could not have reached its goal. The support of my supervisor and my colleagues are truly appreciated during the time of this project.
Thank you! Author Nguyen Thi Thu 1 TABLE OF CONTENTS ACKNOWLEDGEMENT. 1 TABLE OF CONTENTS. 2 LIST OF ABERRATION. 5 LIST OF TABLES AND FIGURES .1 BACKGROUND AND RATIONALE .3 SUBJECTS AND SCOPE OF RESEARCH.
14 CHAPTER 2: LITERATURE REVIEW .1 FRAMEWORK OF HUMAN RESOURCE MANAGEMENT .1 Definition of human resource management .3 Importance of human resource management .2 IMPACT OF HRM ON WORKERS’ PERFORMANCE .3 IMPACT OF HRM ON ORGANIZATION’S PERFORMANCE .4 HUMAN RESOURCE MANAGEMENT IN BANKING INDUSTRY .1 Definition of banking industry .2 Functions of banking industry .3 Relationship between human resource management and banking industry.1 CONCEPT OF QUANTITATIVE RESEARCH METHOD .2 RESEARCH METHODS AND DATA COLLECTION .3 DATA ANALYSIS METHODS. 43 CHAPTER 4: FINDING AND ANALYSIS.1 INTRODUCTION OF BIDV HAI BA TRUNG .1 General introduction of BIDV system .2 Introduction of BIDV Hai Ba Trung .2 HUMAN RESOURCE PRACTICE IN BIDV HAI BA TRUNG .3 RELIABILITY TEST AND EFA .2 Working environment analysis .3 Corporate culture analysis .4 HRM strategy analysis .5 Recruitment and promotion analysis .6 Criteria for promotion analysis.7 Retraining, skill development and personnel placement policy analysis .8 Labor assessment and compensation analysis .9 Bonuses of BIDV analysis .10 Labor assessment and compensation analysis. 68 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS .1 DEVELOPMENT OF BIDV HAI BA TRUNG IN 2015 – 2020 .2 SWOT ANALYSIS OF BIDV HAI BA TRUNG HR PRACTICES .3 Opportunities and Threats .1 Improve the company's competitive advantage (Q1d, Q1e, Q3m) .2 Developing soft skills for employees (Q3e, Q6m, Q7m) .3 Human resource training. 109 4 LIST OF ABERRATION HR Human resource HRM Human resource management EFA Exploratory Factors Analysis SOP Sustainable organizational performance BIDV HO BIDV Head Office 5 LIST OF TABLES AND FIGURES Table 1 HR structure of BIDV Hai Ba Trung.
47 Table 2 Cronbach's alpha test of factor. 51 Table 3 Result of Exploratory Factor Analysis. 52 Table 4 Department of respondents. 53 Table 5 Question 1 mean result.
55 Table 6 Question 2 mean result. 57 Table 7 Question 3 Result. 59 Table 8 Question 7 mean result. 61 Table 9 Question 6 mean result.
64 Table 10 Question 7 mean result. 67 Figure 1 Functions of HRM. 19 Figure 2 Core values of BIDV. 46 Figure 3 Organizational structure of BIDV Hai Ba Trung.
49 Figure 5 Years of experience. 54 6 ABSTRACT Thesis title: Improving human resource management practices at Joint Stock Commercial Bank for Investment and Development of Vietnam Pages: 72 University: Vietnam National University, Hanoi Graduate School: International School Date: April 2020 Degree: Master Graduate Student: Nguyen Thi Thu Supervisor: Dr. Mai Anh Key words: Human Resource Management, HR, management, practices, banking, Vietnam, improvement, Joint Stock Commercial Bank for Investment and Development of Vietnam, BIDV, EFA, quantitative research, survey researchss The objective of human resource management practices is about managing people, relationships between employers and employees. Specifically, it implies the use of labor productivity to achieve strategic business objectives of the organization and meet the needs of individual workers.
For any organization, dealing with people requires a good human resource management efficient working of the organization. Banking has been and will always be a "People Business". For banking, the importance of human resource management has grown manifold because the nature of banking industry, which is mainly service based. The banking sector is a wide financial and economical industry, which depends majorly on the workforce.
Thus managing and maintaining this workforce becomes the priority for the HR department in the banks. This study clarifies how to improve human resource management practices, with findings and solutions based on author‘s observation while working at Vietnam Joint Stock Commercial Bank for Investment and Development. Datas collected within September 2020.1 Background and rationale 1. Background Vietnam was among the first few communist countries to join the free market grouping of the Association of Southeast Asian Nations (ASEAN) on the heels of Đổi Mới reform policies launched in 1986 (Kokko and Sjohlm 2000).
Since then, the country has undergone profound social, economic, and environmental changes that banking industry has successfully adapted to. The banking industry is the backbone for the growth of any economy. It is reckoned as a hub and barometer of the financial system in a country. In fast-growing countries like Vietnam, banking sector plays a vital role in the development in the modern economic world.
In order to this industry to the altitudes of international distinction, it needs to have a combination of latest technologies, better methods of credit, management of treasury, product variation, internal & external controlled regulations and human resources at the most. According to The International Monetary Fund (2018), banking sector in Vietnam contributed 137.43% to GDP in 2017. Therefore, the Vietnamese government has been giving great attention on the development of banking organizations. This effort is aimed to improve the quality of bank services, increase competitive advantages of this sector and encourage investment in the country.
Banking has been and will always be a "People Business". It is a service sector industry, where productivity and commitment of the staff have a significant effect on the overall performance of banks. Banks must try to distinguish themselves by creating their own niches or images, especially in transparent situations with a high level of competitiveness. The very survival of the banks would depend on customer satisfaction; those who do not meet the customer expectations will find survival difficulty.
Moreover, as a service industry, Human Resource Management is important for banks because it involves working with people specifically. Banks 9 must articulate and emphasize the core values to attract and retain certain customer segments and it would be the bank‘s human resource that would deliver this. The industry has identified management of human resources as the key to future success. The way you manage the people and manage the risks determines your success in the banking business.
Within two decades, an enormous growth in academic and practitioner interest in strategic human resource management (SHRM) has risen regarding to the needs of HRM practices in organizations. Strategic HRM advocates the mutual interdependence and congruence of key organizational variables including structure, strategy, people, management style, human resource systems and functions (such as recruitment, selection, and performance appraisal, training and development, induction and reward management), procedures and culture (Boxall and Purcell, 2003). Nowadays, majority of the organizations are seeking the best way to improve their business performance and achievements by developing and adopting new human management practices that enhance sustained level of high performance and job satisfaction. Human Resource Management (HRM) is a widely known management philosophy that has become a key factor for enhancing organizations‘ competitive advantage.
However, the issue of human resource management has been a long-debated topic for business and professional organizations. Modern view and approach see the workers and employee as human capital. Behind production of every product or service, there is a human mind, effort and person- hours (working hours). No product or service can be produced without help of human being.
Human being is fundamental resource for making or construction of anything. Therefore, many researches and studies have established the direct relationship between human capital management practices and employee performance, which finally establishes a positive relationship between human capital management practices and organizational performance. Rationale Human Resource Management is concerned with planning, organizing, directing and controlling personnel functions. Elarabi & Johari (2014) described HRM as a process that specializes in securing and increasing skills of individual employees and enhances communication and cooperation between them to support organizational development.
HRM practices have a positive impact on organizational innovation, implementation of business strategies, job performance, financial returns, managing the organizational conflict and a sustainable competitive advantage (Caliskan, 2010). Among the five Ms of management, i., men, money, machines, materials, and methods, HRM deals about the first M, which is men, and the act of managing the work force of an organization is not easy to manage. Moreover, "Every man is different from other" and they are the source in producing power to manipulate the other Ms, which makes men and human resource management become more important to general management than ever. In an economic environment increasingly characterized by the reliance on intangible assets such as human capital, many managers would agree with the assertion that ―people are our most important asset.‖ Its role in enhancing performance, securing and developing the talents of employees and enhancing cooperation between them to support organizational development is undeniable.
An increasing reliance on intangible assets - such as human capital - as a source of competitive advantage has led many firms to develop measurement systems to help them better manage these resources. HRM is gaining increasing importance because employees are considered as a primary component for attaining competitive advantage (Barney & Wright, 1998). With the changing economic scenario and rising challenges in the business environment, the corporate world is fast realizing the worth of human resource as an inimitable strength for attaining long-lasting competitive advantage. Human resources constitute an important source of competitive advantage for the organization (Wright & McMahan, 1992) 11 and are the potential contributor to the creation and realization of the organization‘s goals.
Consequently, the performance of human resource function has turned out to be more important than ever. Business organizations are striving to maintain their competitive edge by effectively managing their human capital. Mello (2011) argued that managers at different levels have realized that critical source of competitive advantage comes from having systems and processes for managing human talent. These developments in HRM scenario have significantly changed the roles of the HR professionals as well as the way people are managed in the organizations.
In Vietnam, managers often face significant human resource challenges, due to the local culture and work values, the existing organizational practices, and the role of the political and administrative structures. Vietnam also attracted investors by its low standards in Occupational Health and Safety (OH&S) or low labor costs (wages are 30% lower than parts of China) (Fuller 2005). Besides, it is believed that the lack of an effective trade union presence in many organizations had led to the lack of OH&S measures (Rosenblatt, 1998). This study clarifies how to improve human resource management practices, with findings and solutions based on author‘s observation while working at Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).
Moreover, the impact of effectiveness of HRM practices (HR planning, staffing, compensation, training and development, performance appraisal) on organization performance are investigated. Data conducted in 2020 from different reliable sources. Have a titerational overview on HRM. To understand HRM practices on organisation‘s perfromance 12 iii.
To find facts, problems and solutions for HRM at Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).3 Subjects and scope of research Subjects: HRM practices and its effects on banking organization Scope of research:HRM performance Geographical Scope: The organization name is Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Hai Ba Trung branch.