UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Do Kieu Bich Ngoc 22130046 LOW EMPLOYEE ENGAGEMENT AT RSM DTL AUDITING COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR. NGUYEN PHONG NGUYEN Ho Chi Minh City – March 2016 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTENTS EXECUTIVE SUMMARY .2 CHAPTER 1 - PROBLEM IDENTIFICATION .1 Introduction about the Company and the central problem.2 Justify the existence of the problem.3 Justify the importance of the problem .14 CHAPTER 2 - CAUSE VALIDATION .1 Potential causes of the problem .25 CHAPTER 3 – ALTERNATIVE ANALYSIS and ALTERNATIVE CHOICE .2 Improving physical work environment .51 CHAPTER 4 – ACTION PLAN .52 CHAPTER 5 – SUPPORTING INFORMATION .1 Interview transcript to explore the potential problems and central problem .2 Scale items to justify the existence of the problem .3 Questions for Interview at RSM DTL Company to test the existence of the problem 59 5.4 Interview transcript for testing the existence of the problem .5 Survey Questionnaire to justify the existence of the problem sent to RSM DTL, Grant Thornton and BOD Vietnam .6 Survey to justify the existence of the problem at Grant Thornton and BOD .7 Scale items to justify the importance of the problem .8 Interview transcript to justify the importance of the problem .80 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LOW EMPLOYEE ENGAGEMENT AT RSM DTL AUDITING COMPANY EXECUTIVE SUMMARY This topic is to research the effective solutions to increase the level of employee engagement at RSM DTL Auditing Company. The first step is to find the central problem, to justify the existence of the issue and to justify the importance of the problem by analyzing the organization through interview and survey for employees. The low level of employee engagement led to the higher turnover rate, the low performance, the absenteeism and the low organization commitment.
Secondly, the researcher investigates the potential causes of the problem and validates the root causes of the problem to find the appropriate strategies via literature reviews and in-depth interviews with the managers and the employees. As the result, it was found that the physical working environment, the ineffective training program, the reward and the leadership are the most significant causes leading to the low level of employee engagement at RSM DTL. The paper suggested the combination of solution relating to improving the training program, physical work environment, reward system as possible solutions to enhance the level of employee engagement at RSM DTL Auditing. Finally, the action plan with detailed steps was presented to implement these strategies.
2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1 PROBLEM IDENTIFICATION 1.1 Introduction about the Company and the central problem RSM DTL Auditing Company established in 2001 is one of the top ten accounting and advisory firms in Vietnam with more than 140 employees serving mid to large public- listed, multi-national and private companies in various industries. The operation of DTL is divided into two fields including Auditing and Tax consulting. With the mission “RSM DTL Auditing wants to be your great business partner by way of bringing creative added value solutions to your success in local and global environment” (RSM DTL profile, 2014), DTL endeavor to provide the clients with professional services following international quality standards adapted to Vietnam business environment. In addition, the Company also pays more attention to build up a professional team to get effectiveness in working, to satisfy the increasing demand of customers and to develop the organizational culture instead of focusing on finding more clients.
However, the approach and application process have not been implemented and the employees continue waiting the positive changes. In this paper, we focus on the Tax Consulting Department, currently comprising of forty three (43) employees. In fact, we can get the kindly supports from the Management of Tax Department and the annual revenue often accounts for 70% of total Company‟s revenue. Due to the variety of services provided to customer, this department is structured in eight groups and each group handles one main business line such as tax advisory, tax compliance, accounting, etc.
3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com According to the Human Resource Department data, the number of employee leaving job has increased significantly (i.8% in 2013, 16% in 2014 and 19 % in the first six months of 2015). In comparison with the average turnover rate of industry (i. around 15% for 2014 and the first six months of 2015), the turnover rate of RSM DTL was higher than that. The figures show that the turnover rate rose by 3% in the first six months of 2015 and till not stop here.
From 2013 until now, the staff turnover rate has been on up trend and has the sign of continuous increase next time. Additionally, based on the Data from the Human Resource Department, the number of leaving employees at senior position with over three year working experience account for 70%. Together with the high staff turnover rate, the performance of employee has the sign of decrease as discussed with the Managing Partner in charge of Tax Department. The working result from the staff sending to the managers was not good as expected and there were more mistakes in calculating and reporting.
Moreover, employees did not put in much effort to ensure maximum productivity for the Company; there were increased cases of tardiness and absenteeism, rework and poor quality of output, inappropriate and unnecessary socializing during working hours and a general lack of interest in the job. There are many reasons leading to these consequences. However, based on the intake meeting and interview with DTL members including Mr Le Khanh Lam – Managing Partner of Tax and Consulting Department and employees, the potential problems relating to decreasing work quality and productivity, employee appraisal and employee engagement need to be considered and analyzed at present. Therefore, the problem mess was developed below to reflect the current situation of Company.
4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Lacking of attention to work Increasing Unequal work Salary/ bonus based work sharing between on level of position volume groups Decreasing instead of enthusiasm performance Increasing customers Appraisal form provided general Increasing information Increasing Decreasing work absenteeism work quality and pressure productivity Ineffective Low employee engagement employee appraisal Low employee performance High employee turnover rate Figure 1.1: The initial cause – effect map Firstly, from the last three months of the year 2014 until now, due to considerably increasing number of customers, the work volume as well as the pressure has also risen. However, the workload assigned for each group was unequal and the complexity for each job was different. In addition, the number of employee was constant at that time and the Company could not recruit more staff quickly to be in charged of new jobs. Although the new clients often had the complex issues, the revenue received was not high as expected.
To attract the potential customers, the fee charge for services provided was competitive 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com with other entities on the market. For new clients, employee had to spend more time on working with them. These conditions led to the decrease of work quality and productivity and the Tax Partner was aware of that as a critical issue need to be solved. Nevertheless, this problem need a lot of time and can be related to many aspects such as human resource management, business strategies, cost and revenue estimation, etc.
to be solved thoroughly. From discussion with the Tax Partner, the second problem was the employee appraisal process. In fact, the applied assessment was based on the level of position instead of the performance of employee. Additionally, the assignment for each staff at the same position was different according to the employee capability and the job complexity.
Moreover, the appraisal form was designed to collect the general information of staff and could not reflect sufficiently the working process of employee. At present, DTL is preparing the new appraisal system including the detailed assessment for each job at the mid-year and the comprehensive appraisal at the ending of the year. The last issue was related to the level of employee engagement. As mentioned above, based on the data from the Human Resource Department, the number of employee leaving job has increased significantly (i.8% in 2013, 16% in 2014 and 19% in the first six months of 2015).
Furthermore, the number of laborers coming in late has also risen considerably connected with the weekly employee attendance report of the Administrative manager. The enthusiasm of staff has the sign of depression. 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com In addition, the Tax Partner observed that the employees had the signs of lacking the attention in work. There were a number of staff including the new members under one year position frequently used the working time for individual needs such as surfing the internet, connecting the social network for chatting, reading online newspapers, making online transactions, etc.
When had the free time, they were not in the habit of improving the knowledge by themselves through reading the updated regulations, studying the customers‟ documents to broaden the experience on treating the real situations. The specific characteristic of the tax advisory industry was that the rules, the laws could change and supplement day by day. Therefore, the self-awareness of collecting the new was very important. Currently, there are approximately 30% members spends more than one hour per day within working times for personal issues via internet network as mentioned above as the statistic figure from IT Department.
These activities cause the low intention in main tasks and leading to the inefficiency in work. Moreover, the number of products sent to him for final review in recent times with lower quality than his expectations as well as missed the deadline was higher than the previous time. These aspects can prove that the Company has the trouble with employee engagement. Therefore, in line with the data collection from the Company and the results from other interviews with employees, under the limited time, resources and the acceptance of the BOD, the low level of employee engagement is considered as the most significant issue needed to be analyzed at the present.
7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.2 Justify the existence of the problem Firstly, it is very important to understand sufficiently the meaning of “employee engagement” In terms of engagement, people express themselves cognitively, physically, and emotionally while performing their work roles (Kahn, 1990). Engagement, on the other hand, is indicated by job resources such as job control, the availability of learning opportunities, access to necessary materials, participation in the decision-making process, positive reinforcement, and support from colleagues (Freeney, 2006). The Gallup Organization, defines engaged employees as those who, "work with a passion and feel a profound connection to their company" and "drive innovation and move the organization forward" (Harter et al. Employee engagement –refers to a psychological state where employees feel a vested interest in the company‟s success and perform to a high standard that may exceed the stated requirements of the job according to Schaufeli (2013).
According to Schaufeli and Salanova (2012), the synthesis identified the most prevalent definition used by the research community was that of engagement as “a positive, fulfilling, work related state of mind This statement indicated that the engagement as a positive psychological experience when carrying out work activities and work tasks, and refers to feelings of “vigor” (e. enthusiasm), and “absorption” (e. Vigor refers to high levels of energy while working, the willingness to invest effort in one‟s work, and persistence even in the face of difficulties; dedication refers to being strongly involved in one‟s work, and experiencing a sense of significance, enthusiasm, inspiration, pride, and challenge; and 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.