UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Hong Yen Van LOW JOB SATISFACTION AT B.B COFFEE MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Hong Yen Van LOW JOB SATISFACTION AT B.B COFFEE MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. Nguyen Phong Nguyen Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS Executive Summary. 1 CHAPTER 1 : BACKGROUND INFORMATION .3 Initial cause-effect map .4 Updated cause-effect map. 10 CHAPTER 2: PROBLEM JUSTIFICATION.
19 CHAPTER 3: CAUSES VALIDATION AND SOLUTIONS .1 List of real causes .2 The set of solutions .3 Change plan design. 42 TABLE OF FIGURES Figure 1. Organizational structure of B. Initial cause-effect map (Source: In-depth interview).
Updated cause-effect map (Source: In-depth interview and literature review). Final cause-effect map. 23 TABLE OF TABLES Table 1. Sales from January to June in 2017 and 2018 (million VND).
Profit from January to June in 2016 and 2017 (million VND). Number of negative feedback and complaint. Turnover rate of some coffee shops in Dong Thap and average turnover rate of hospitality in Vietnam (https://business.com/talent-solutions/blog/trends- and-research/2018/the-3-industries-with-the-highest-turnover-rates). Result of survey.
Initial list of potential causes (Source: reference). 20 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Executive Summary Job satisfaction of employee and their attitude have become the important foundation of any business. Especially in the globally dynamic business environment these days, enterprises have begun to realize that their most precious asset is the employees (1-4). According to Robbins (1996), job satisfaction is one of the most vital merits in today’s workforce, “generation X” (5).
Job satisfaction has a close relationship with employee performance and translates into the company success because happy employees bring happy customers. In the studying company B.B Coffee, despite an extreme focus into the daily operation of the coffee shops within the chain with the purpose of enhancing customer satisfaction and the company performance, the company has witnessed a large number of complaints from customers, a decrease in sales, profit as well as a high turnover rate of employee. Starting by investigate these symptoms, we have figure out the central problem is low job satisfaction. The result indicates that the actual causes of this central problem are pay, promotion, supervision, contingent reward, and communication.
Accordingly, basing on the context of the organization, the research proposes some solution in terms of supervision, contingent reward (recognition) and communication so that the job satisfaction of employee can be improved and consequently the business performance can be enhanced. It is estimated that the company could benefit 5 times greater than its cost. 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1 : BACKGROUND INFORMATION 1.B (Best of Best) Coffee, which was established in 2014, was the very first modern coffee chain with 3 stores throughout Dong Thap province and on its way to become one of the reputable brands. The organization has 7 full-time employees and more than 40 part-time employees.
- Full name: Bi O Bi Private Company - Established: 01/12/2014 - Address: 20 Ly Thuong Kiet, Ward 1, Cao Lanh City, Dong Thap Province - Main products and services: food and beverage The organization has six full-time employees (one HR manager, one marketing manager, one accountant, three store managers) and more than forty part-time employees who are mostly students at university and colleges in the province. Corresponding to the growth of Dong Thap province, the consumers become more affluent, they are seeking a comfortable place to drink and relax. Coffee has appeared and played a vital role in daily life of Dong Thap citizens for a long time ago, and coffee shops can be considered as the third place beside home and office. Therefore, there are more and more coffee shops with modern styles which provides air conditions, professional service, western drinks… This means customers have many choices and the market becomes more competitive.
2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Organizational structure of B.B Coffee CEO Marketing HR manager Store manager Accountant manager Part-time employee 1.2 Symptoms Initially, some short interviews with the managers of three departments regarding HR, marketing and accoutanting were conducted. Accordingly, it was reported that marketing departments have some problems relating to efficiency of digital marketing such as low reach of post, low interaction on fanpage. The company has found solution that invest more image, content as well as scheduling a timeline for posting more regularly.
With respect to accounting department, its manager provides the information that there is a problem with out-of-date technology used in accounting but the company has a plan to change into more modern technology to increase efficiency. However, the performance of the company has still not advanced. We continue to approach the problem by observing how effectively the company operate and realize some negative signs such as late coming to work, bad behaviors and complaints about the job of employees as well as many complains, bad rating on Facebook. We continue to look at financial statements and many symptoms were explored.
3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Sales from January to June in 2017 and 2018 (million VND) Sales Jan Feb Mar Apr May Jun Total 2017 363 450 400 360 325 355 2253 2018 371 455 385 337 310 338 2239 Increase 1. Profit from January to June in 2016 and 2017 (million VND) Profit Jan Feb Mar Apr May Jun Total 2017 90 112 98 91 80 87 558 2018 92 113 96 88 79 85 553 Increase 2.9% According to data from the company, although sales and profit in the two first months of 2018 increases compared to this in 2017, the following months of 2018 witnesses a decrease of sales and profit compared to this in 2017. As a result, total sales and total profit of two first quarter in 2018 declines 0.6% and % respectively to this in 2017.
In addition, the number of bad complaint rises 20% in the period with 478 negative feedbacks and complaints from customers which are talked directly to store managers and appear on its social media channels compared to this period last year. Number of negative feedback and complaint Complaint Jan Feb Mar Apr May Jun Total 2017 55 72 57 49 45 52 330 2018 60 78 52 63 51 57 361 Increase 9.4% 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Another important symptom worth mentioning is that the turnover rate of B.B Coffee is high (20%) compared to other coffee shops in the area (Truc Garden and May Coffee) and average turnover rate in hospitality industry in Vietnam in 2017 (17. Truc Garden and May Coffee which are two well-known coffee chains in Dong Thap province have the nearly same scale with B.B Coffee with 39 and 42 employees respectively in total. Based on the short interviews with managers of these two coffee chains, they state that turnover rate of their organization are also high which are 30% and 27% in that order, but these figure are still lower than the rate of B.
Turnover rate of some coffee shops in Dong Thap and average turnover rate of hospitality in Vietnam (https://business.com/talent-solutions/blog/trends- and-research/2018/the-3-industries-with-the-highest-turnover-rates) Turnover Name rate B.B Coffee 32% Truc Garden 30% May Coffee 27% Average 17.2% If these signs are not noticed and solved, it may cause a variety of serious consequences. With respect to the relationship between customer satisfaction and word-of-mouth, various researches has found that the less satisfied customers are, the more they are likely to transmit word-of-mouth. Similarly, as stated by Anderson and Sullivan (1993), with antecedent and consequence variables, customer satisfaction has a positive effect on customer loyalty which also means the repetition of customers’ purchase behavior (6). Furthermore, earlier research has proven that customers who are satisfied do not show price sensitivity and are willing to pay more for high quality products and services (7-9).
It is also reported in a number of studies that customer 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com satisfaction positively affects to the firm value (10, 11). This means low level of customer satisfaction leads to low firm value. In addition, high employee turnover is considered one of the most serious problems currently the hospitality industry has to deal with (12). An increasing rate of employee turnover not culminates in direct financial costs, but results in poorer inferior organizational performance (13).
Bliss (2004) stated that employee turnover cost is 1.5 times higher than that of the employees' annual compensation (14). It is discovered through a research of Martin (1994) that retail stores with low customer service ratings had a 83% sales force turnover compared to 54% in stores with high ones (15). He also found similar results from a study involving a restaurant, and proved a consequence of customer satisfaction is that the stores with the highest employee turnover rates have 55 percent lower profits than the stores with the lowest turnover rates (15).3 Initial cause-effect map 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Poor skill and Unwell trained High turnover knowledge of staff rate staff Poor product quality Low employee morale Complaint Low Poor service from customer quality customer satisfaction increase Low job Low Poor physical satisfaction productivity environment Sales decrease Profit Excessive decrease absence of Insufficiency Potential central of staff staff problem Symptoms Figure 2. Initial cause-effect map (Source: In-depth interview) 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com In order to explore the central problem and its causes as well, the in-depth interviews with a staff (randomly selected) and some key employees including CEO, two store managers and HR manager were conducted at B.B stores in five days and recorded by mobile phone.
Initially, the interviews with two store managers of B.B Coffee reveal that most of customers are unsatisfied because of the poor quality of service and product. Many negative feedbacks are collected directly at the stores through conversations with customers and also from social media channels of B.B Coffee such as Facebook, Instagram, Zalo fanpages. Vy (manager of store A) said, staff are more likely to be absent due to personal reasons but sometimes she realizes that some reasons are fake. When she assigns other employees to fill in for absent co- workers, they seem not really happy and supportive.
She thinks that this is because employees are not doing what they enjoy, even little things like sometime working overtime makes them feel unhappy. This may be a sign of employee dissatisfaction. Especially on holiday or weekend, excessive absence of staff causes a lack of employee and consequently the rest staff meet difficulties to handle so many orders well and feel stressed out. This leads to untasteful drinks, late delivery and scowl faces of staff, which makes customers feel disappointed on the service provided by the coffee shop.
Nhan (manager of store B) said, on the fanpage, there are also some complaints about some staff who show unpleasant attitude and impolite words when serving drinks or they required to clean the table. Bad attitude and behavior of employee is a sign of low employee morale, which adversely affect to working environment and in- store atmosphere. When employees work for a long time, they are not as powerful and enthusiastic as on very first days, which reflects reduction of morale. As a result, they change usually commit themselves to the company for the long term and are going to quit so that they can find a job they actually enjoy doing sooner or later.
This is also one of the main reasons the company has to recruit new staff very often. In the opinion of a staff of store C, employees have to work very hard in seasonal period on which complains from customers increase dramatically.