Ho Chi Minh City – Year 2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Thi Thanh Tuyen Solutions to Enhance the Level of Employee Recognition in Coca-Cola Southeast Asia ID: 22130093 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. Nguyen Thi Nguyet Que Dr. Tran Ha Minh Quan TIEU LUAN MOI download : skknchat@gmail.com Table of contents ACKNOWLEDGMENT. 4 Chapter 1: Problem Identification .1 Introduction of the company .2 Background of the business problem .3 Justification of the problem existence.4 Justification of the problem importance .5 Potential causes of the problem.
18 Chapter 2: The alternative solutions .1 Justification of the potential causes .2 Proposed alternative solutions. 26 Chapter 3: The Selected Solution .1 Explanation for selected solutions. 47 Chapter 5: Supporting Information .1 Supporting information of business problem background justification .2 Supporting information of problem existence justification .3 Supporting information of problem importance justification .4 Supporting information of potential causes .5 Supporting information of potential causes justification .6 Supporting information of proposed solutions. 69 1 TIEU LUAN MOI download : skknchat@gmail.com List of Tables Table 1: Turnover Rate Comparison from 2013-2015.
8 Table 2: Turnover Rate Comparison from 2013-2015 in Coca and Pepsi. 177 Table 3: Employee performance in Q1 and Q2 at Coca-Cola and Pepsi. 188 Table 4: A comparison of alternative solutions. 333 Table 5: Action timeline and objectives.
422 Table 6: Questionnaire items and references for problem existence justification. 511 Table 7: Interviewee’s Answers for problem justification. 533 Table 8: Potential causes and definition. 588 Table 9: Questionnaire items and references for potential cause justification (employees).
600 Table 10: Employee’s answers for potential cause justification. 611 Table 11: List of questions and answers in justifying the potential causes (manager). 655 List of Figures Figure 1: Reasons for employees’ resignation in 2015. 10 Figure 2: A cause-and-effect map of low employee recognition.
21 Figure 3: Final Cause –Effect Map. 26 2 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGMENT I am heartily thankful to my supervisors, Dr. Nguyen Thi Nguyet Que and Dr Tran Ha Minh Quan, whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of problems, solutions and structure. At the beginning of the thesis, I had met misunderstanding about the real problems, their outcome and factors, Ms Que and Mr Quan instructed me to come over the difficulties, helped me understand the thesis structures, and edited flaws.
Therefore, I deeply appreciate their contribution. Lastly, I offer my regards and blessings to all my colleagues, friends and classmates who supported me in any respect during the completion of the thesis. 3 TIEU LUAN MOI download : skknchat@gmail.com Executive Summary On October 2015, the author got the chance to talk to Coca-Cola’s General Manager in their quarterly meeting, in which he raised some problems whom company had to face. The employee’s turnover rate drastically increased, impacting to the business and raising a large amount of recruitment cost in the company.
To find out the real problem of recognition and its causes, and draw the effective solutions for this issue, the author closely works with human resource department and management team, besides, make interviews with employees and heads of departments to deeply understand the company situation and acquire their view points, combining interview data, literature reviews, and company sources to buttress the argument. This thesis includes five chapters, in each chapter; the author analyses collected data, strengthens the argument by literature, and emphasizes the problem’s consequences and real causes, and seeks for the effective solutions that are applicable to company problems. 4 TIEU LUAN MOI download : skknchat@gmail.com Chapter 1: Problem Identification This chapter includes six sections. In the first section, the author makes introduction that inform company’s general information.
The following chapter convincingly shows an interview data that the author makes with employer and human resource manager to understand the basic background of the business problem. The third and fourth sections are the justification of problem existence, and the justification of problem importance, which clearly indicate the problem’s existence and its’ outcome. Then, the author lists down the potential causes of the problem that closely bases the literature in the fifth section. Finally, the cause and effect map exhibits the whole picture of the correlation among potential causes, real problems and their outcome.1 Introduction of the company The representative office of Coca-Cola has been established in 1994 with responsibilities: to act as a liaison office, conduct market surveys, carry out activities to stimulate, and establish co-operation projects of Coca-Cola Southeast Asia, Inc.
in Vietnam, act as a communicative office, execute market research, and promotion activities, and run the marketing campaign and stimulate the implementation of contracts and agreements in the areas of commerce and investment signed between Coca-Cola Southeast Asia, Inc. and Vietnamese Co-operations in compliance with Vietnam Law leader in the beverage industry. As a global the Coca-Cola Company offers hundreds of brands, including soft drinks, fruit juices, sports drink and other 5 TIEU LUAN MOI download : skknchat@gmail.com beverage in Vietnam particularly and in more than two hundreds countries in general. Coca-Cola is meeting the tastes of people around the globe.
In January 2015, the company runs the organizational restructuring to cut cost, downsize the workforce and open new positions matching to each employee’s capabilities. Besides, many unnecessary positions had been cut to ensure the long term development, reaching to company vision. A haft of employees was abruptly terminated in this period; some people were rotated to the new roles or to the new working locations. After restructuring, there are thirty five employees (ten temporary employees and twenty five permanent employees) under seven departments, including: Human resource, Knowledge and Insights, Finance, Commercial and Operations, Technical, PAC, and Marketing 1.2 Background of the business problem In this step, the author applied qualitative method through interviews, and collected data from human resource reports.
Data resembled, analyzed and relied on the answers whose interviewees are general manager and human resource manager (section 5.1 in supporting information chapter) and reports were provided from Human resource department (table 1: turnover Rate comparison from 2013-2015, figure 1: reasons for employees’ resignation in 2015) in this section. In the quarterly meeting, the general manager announced the business performance at Coca- Cola Vietnam in nine months in 2015 particularly and in three years in general. He also raised the difficulties that company has met since January 6 TIEU LUAN MOI download : skknchat@gmail. So, the author made an interview with him and human resource manager, who deeply understand about company situation.
The answers have been briefly described in the section 5.1 of supporting information chapter. Firstly, the general manager was asked about turnover rate, which had been stated as a main concern in his speaking. General Manager confirmed that since 2014, crisis global economy in general and in Vietnam in particular has attacked to business performance in Coca- Cola Vietnam, many compensation packages have been cut to ensure the profit in each division through the interview. For two years, the award and promotion have been limited.
Besides, after organizational restructuring, many positions have been cut, and many employees’ job tasks have doubled, workload has been over. Many employees have worked over time and under the pressure to ensure the project run smoothly and match with project timeline. Many of them required to add more assistant positions, causing the cost would be over budget for 2015. Therefore, General Manager had to reject the request, making employees unhappy with his decision.
According to the Table of Turnover Rate Comparison that is provided from Human Resource Department, the turnover rate increases 8%, comparing to in 2014, increases 13. So, the cost for recruitment process and training courses for new employees strongly increased to 53,690 USD in 2015 (table 1). In the office, the major of staffs in office who decided to quit their jobs are managers, causing to the recruitment process always takes time to select the suitable candidates 7 TIEU LUAN MOI download : skknchat@gmail.com and consequently this process impacts to the current employees who have to cover the tasks whose staffs were already left. Table 1: Turnover Rate Comparison from 2013-2015 Years Turnover Rate (%) Manager Recruitment and Training turnover (%) Cost (USD) 2013 6.5% 82% 53,690 Source: Human Resource Report in 2015 (Coca-Cola Southeast Asia) According to the pie chart of potential reasons (figure 1), all former employees who had been interviewed with human resource department before leaving, Human Resource Manager stated that 45% of them feel devalued and unrecognized from their managers.
Because when the job got done, they did not get any compliments from their manager, even they did not understand the difficulties that employees had been meeting at. Some of employees assert that after so many years, they were not promoted because of the lack of recognition and understanding from their managers. Moreover, the conflicts partly rose from the way that their mangers gave feedback to their concern in hard tasks. As the figure 1 shows in the pie chart of employees’ resignation reasons in 2015, there are more than 30% employees who left Coca-Cola because they got the better job offers from other companies in the same industries, such as: Nestle, Dutch 8 TIEU LUAN MOI download : skknchat@gmail.com lady, and Unilever.
17% interviewees implied that over workload is main reason for resignation. Besides, headcount freeze is established to limit cost, so company cannot offer the permanent positions to temporary employees who work for Coca-Cola more than five years. So, temporary employees feel stress about their career paths when they are not extended their contracts as permanent employees. They do not know whether their contracts can be renewed when it expires, they can sign a new contract or not.
There are four reasons, such as: low employee recognition, over workload, other job offers, and job security which are considered as problems in Coca-Cola. However, there are limitation about timing and budget to plan for the solutions. In the interview with Human resource department, more than 45% of employees confirmed that recognition is the main reason pushing them to quit the job. The author, general manager, and human resource manager discussed and decided low recognition is key problem needs to be immediately solved to improve working spirit in the long term.
9 TIEU LUAN MOI download : skknchat@gmail.com Figure 1: Reasons for employees’ resignation in 2015 Reasons for employees' resignation in 2015 8% Job offers 17% 30% Recognition Over workload Job security 45% Source: Human Resource Report in 2015 (Coca-Cola Southeast Asia) To explain for the skeptical decision making, first of all, Klubnik (1994) said that recognition also has the appeal of being appropriated for everyone in the company- a tool that does not have to be expensive or flow through rigid corporate channels. The low recognition can be solved immediately because it heavily impacts to the employee turnover rate, the relationship and trust among employees and their supervisors. When the relationship and trust have been negatively broken, they raise the conflict in the organization and greatly reduce the employee’s productivity. In addition, there are so many campaigns have been activated every year, requiring the cooperation in each department.
Therefore, the conflict may effect on the project progress and impact to the business. The majority of former employees confirmed that they left the company because of the low recognition from their manager. Secondly, to decrease workload or 10 TIEU LUAN MOI download : skknchat@gmail.com increase job security, the process required the experts who deeply understand the structures and function in each department. This process consumes time and cost, and depends much on Headquarter policy in Atlanta and economic condition, and this change can impact to Human Resource structure and interacted to the Legal department.