UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------------ Vu Thi Thuy WORK OVERLOAD AT VIETINBANK – X BRANCH MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City - Year 2018 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------------ Vu Thi Thuy WORK OVERLOAD AT VIETINBANK – X BRANCH MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR. PHAN THI MINH THU Ho Chi Minh City – Year 2018 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Table of Contents Executive summary .5 CHAPTER 1: COMPANY INTRODUCTION. General Information about Retail Banking.1 The first symptom: High turnover rate of employees .2 The second symptom: Low job satisfaction .3 The third symptom: Low key performance indicators .4 The fourth symptom: Low job performance .14 CHAPTER 2: PROBLEM IDENTIFICATION .1 Over working hours.4 Not enough Coaching & feedback .5 Inconsistent of management style .6 Unfair between compensation and contribution of employees .7 Lack of vacation and family benefit .1 The first tentative problems: Work overload .2 The second tentative problems: Ineffective leadership .3 The third tentative problems: Incompatible compensation policy .4 New findings from literatures .29 The central problem .31 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 3: ALTERNATIVES ANALYSIS AND POSSIBLE SOLUTIONS .1 Potential causes of the problem. Verify causes of the real problem .62 Appendix 1: Interview guide .62 Appendix 2: The result of interview .78 Appendix 4: The example of a set KPI at Vietinbank – X Branch .91 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Executive summary Today, the banking profession is considered a dream job with many people because the high salary and reward up to several tens of millions per month.
However, in order to achieve that high pay, the bankers must suffer a lot of pressure and hardships. At the retail division of VietinBank - X Branch, the average income of non-title staff ranges from 10 to 20 million VND, maybe even higher if the employees achieved good sales. However, the rate of employee quit the job at X Branch is always high at approximately 50%, the number of new recruiting staff is not enough to offset the number of employees resign. The retail division is always has the highest staff turnover rate compared to other departments in VietinBank - X Branch.
The unstable personnel situation caused significant negative impacts on the business results of X Branch, the revenue and profit decrease continuously in recent years. One of the main unsettled problems at VietinBank - X Branch is the staff being work overload, pressure and heavy stress. The main reasons leading to this problem is the quantity and quality of personnel not meeting the demand of work, the staff is not trained leading to low productivity, lack of confidence and disappointed. In addition, the inappropriate workflow with many unnecessary steps is also one of the causes to increase workload for employees.
To improve the work overload situation, this paper proposes two solutions related to the focus on training human resources and reducing the number of customers at the counter by encouraging more and more customers to use the Internet banking channel. The total cost of this solution included the training cost and the alternative system is about 698,882,500 VND. However, the benefits from the above solutions can completely cover the above costs. In detail, with the target of successfully register a minimum of 10,675 Internet banking per year, X Branch will obtain a huge fee from this product estimated about 1,127,280,000 VND per year.
These solutions not only have a positive impact in the short term but also in the long term. The emphasis on human resource training contributes to help the staff increase their knowledge and skills to confidently handle work, improve employee productivity, enhance employee satisfaction and engagement. In addition, the move to Internet banking channel is a 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com suitable solution with the development trend of the banking industry, bringing many benefits for both customers and banks (saving costs, fast and convenient, etc). 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: COMPANY INTRODUCTION 1.
General Information about Retail Banking Retail Banking is defined as the type of bank that deals directly with individual customers by providing them with a multiplicity of services like opening a savings account, taking a loan, applying for a credit card and customers may also inquire about potential banking products that they may need at a future date. A retail bank which acts as a comprehensive financial service provider for retail clients, allowing them to purchase multiple financial instruments, under one roof (1, 2). Related to the trend of Retail Banking in Vietnam, Mr. Rahn Wood (Head of Retail Banking at VIB Bank) said that start in 2014, development of retail banking will be a natural development trend.
With a developing country characterized by low average incomes, the primitive banking system and the demand for finance and payment services increases exponentially, surely the retail banking market in Vietnam will be grow strongly in the next decade (3). Nowadays, most banks have started to focus on promoting retail banking in the Vietnamese market. According to Vietnam Banking Industry report 2015, corporate lending is the main activity of the banks in Vietnam and it accounts for almost half of total loans while only 28% are loans to individuals. According to the State Bank of Vietnam, only 20% of the population in Vietnam holds a bank account.
This illustrates that the banks in Vietnam has a huge opportunity to develop retail banking services (4). Currently, local banks are competing fiercely to increase market share in various ways, such as expanding Branch network across the country, developing online banking and telephone services, Giving priority financial services to VIP customers and etc. However, one of the difficulties for banks in Vietnam when joining the retail market is that the human resources are not professional and lack of concentration and synchronization. Therefore, the banks in Vietnam have to pay attention to the recruitment and training of staff, build a team of professionals not only have the qualifications, knowledge of retail banking but also have skills to communicate with 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
They also create a good working environment for employees to promote the capacity and enhance the cohesion of employees with the bank (5).2 Company background VietinBank - X Branch in Ho Chi Minh city was established in April 30, 1985. It has a wide network with the headquarters in X District and eight transaction offices in 8, 10 and 11 District. VietinBank - X Branch always provides variety of banking products and services to customers like opening a savings account, taking a loan, providing banking guarantee products and etc. After over 30 years of operation, total outstanding loans for retail customers of X Branch reached 1.110 billion VND, accounting for 12,98% of outstanding loans in the area; total mobilized capital reached 3.855 billion, accounting for 18,61% of total deposits in the area.
With these results, VietinBank is the bank with the third largest market share of credit and the largest market share of deposits in the area. To specialize in customer management and design policies tailored to each customer segment, VietinBank classifies customers into two segments in the whole system: Retail customers segment and Wholesale customers segment. Retail division specialized in providing banking products for Retail customers including individuals and micro enterprises with turnover of less than 20 billion Dong. Wholesale division is responsible for developing wholesale customers that are organizations and enterprises with turnover of over VND 20 billion.
The organizational model of VietinBank – X Branch is described as follows: Figure 1: Organizational model of VietinBank - X Branch Director Vice Vice Vice president of president of president of Wholesale Retail other division division divisions Enterprises Retail Eight Personnel Accounting Synthetic customer customer transaction administration department department department department offices department 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com As you can be seen in the organizational model above, X Branch is managed by the Directors of Branch and three Deputy Directors. The branch is divided into 6 departments with different functions. At June 30, 2018, the total number of personnel of X branch is 78 staff. In which, the Retail division accounts 57 employees including Credit officers and Tellers accounted for the largest share of personnel at X Branch with about 73% of total.
In recent years, the business results and the personnel situation of the retail division at X Branch has many significant negative changes. In detail, the level of employee satisfaction is very low and the number of employees resigning has increased rapidly in consecutive years, X Branch is always in shortage of personnel; the business results have been declining continuously for many years. In this analysis, I will analyze to find out the potential problems and provide solutions to improve this situation of VietinBank – X Branch.1 The first symptom: High turnover rate of employees The below chart will show the number of employees of VietinBank - X Branch from 2015 up to now: Figure 2: Compare the actual number of employees and the minimum number 80 72 69 71 68 70 62 61 60 57 60 50 The actual number of 40 employees Minimum number of 30 employees 20 10 0 Y 2015 Y 2016 Y 2017 Y 2018 Source: Human Report 2015, 2016, 2017, 2018 in VietinBank - X Branch Each year, based on the size and business network of each Branch, VietinBank will assign the minimum number of employees for each Branch, it is also called boundary 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com of human resources. The boundary is the minimum number of employees required to run the business normally.
Every year, based on the size, the number of transaction points of each branch and the personnel policy of Vietinbank from time to time, the Head office will assign the minimum number of employees to each Branch in the first quarter of year. It can be seen that, X Branch always in the shortage of personnel from 6-11 employees. In recent years, the recruitment at X branch is very difficult, the number of applications is very low and the quality of personnel does not meet, leading to X branch did not recruit the required needed. In addition, the existing staff at this Branch continuously quit the job lead to the new recruitment does not cover the full number of employees leave.
Figure 3: The number of labors classify based on the work time 60% 53% 51% 50% 46% 40% 32% 30% 28% 23% 23% 23% 21% 20% 10% 0% Y 2016 Y 2017 Y 2018 <= 1 year 1-2 years >2 years Source: Human Report 2016,2017, 2018 in VietinBank - X Branch These chart show the number of labors classify base on the work time. In 2018, the rate of human working in VietinBank - X Branch less than one year is 46%, from one to two year is 23%. It mean that, most of retaile human resources are new recruiting personnel, the time of cohesion with banks is low, mostly from one to two years. Figure 4: The rate of personnel quitting the job 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 50,9% 60,0% 43,6% 46,7% 50,0% 39,5% 23,1% 25,0% 40,0% 30,0% 21,4% 14,3% 20,0% Y 2018 10,0% Y 2017 0,0% Retail Wholesale Other Branch X department department department Y 2017 Y 2018 Source: Human Report 2015, 2016, 2017 in VietinBank - X Branch The rate of employees quit the job in Retail department very high and always higher substantially than the other department and average rate of VietinBank - X Branch.2 The second symptom: Low job satisfaction Table 1: Results of the satisfaction survey of personnel in 2016, 2017 Year X Branch Average of region 2016 56.