UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyễn Phạm Hoàng Yến LOW WORKING MORALE AT THE COFFEE HOUSE HO CHI MINH MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR. ĐOÀN ANH TUẤN Ho Chi Minh City – Year 2020 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyễn Phạm Hoàng Yến LOW WORKING MORALE AT THE COFFEE HOUSE HO CHI MINH MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR. ĐOÀN ANH TUẤN Ho Chi Minh City – Year 2020 TIEU LUAN MOI download : skknchat@gmail.com Table of Contents Executive Summary. 1 List of Tables.
2 List of Figures. The Coffee House. Exceptionally high employee turnover rate. Intention to leave.
The importance of symptom. Low working morale. Better offer from other companies. Developing a task assigning system and description to effectively allocate jobs and tasks among employees to give them equal opportunities for development.
28 TIEU LUAN MOI download : skknchat@gmail. Revising the internal policies for the company’s trainings on resolutions of poor working environment or revising the internal policies and procedures in relation to HR management for a healthy working environment. 48 Appendix A: Survey Questionnaire. 48 Appendix B: Interview transcript.
51 TIEU LUAN MOI download : skknchat@gmail.com Executive Summary This thesis paper is dedicated to exploring potential causative drivers determining the exceptional high employee turnover rate at The Coffee House and to defining sound retention strategies to achieve as well as retain employee turnover rate at a healthy, productive and profitable level. Cafes in Vietnam have long since had significantly high levels of employee turnover. The high employee turnover rate has translated into serious negative influences on The Coffee House’s management and operations with creating a challenged reference for replacement resources. It is identified that high employee turnover rate not only increases the company’s expenditure on recruitment and training but also leads to low workplace moral, deteriorating service quality, and reduction in marketing return on investment as well.
This thesis will explore the major causes of high employee turnover rate at The Coffee House from the perspectives of current staff and managers at The Coffee House. This group is targeted because they are regarded as those who potentially provide the most honest and meaningful responses. An ontology approach within the quantitative method will be employed to examine the problems and solutions concerning the exceptional attrition at The Coffee House. By incorporating the previous studies on employee turnover, the author intends to develop the questionnaire to measure the major reasons causing employees’ resignation at The Coffee House.
Depending on identified causes, some sound treatment strategies are proposed to reduce employee turnover rate at a fruitful and profitable level. TIEU LUAN MOI download : skknchat@gmail.com List of Tables Table 1.2: Characteristics of employees .1: Intention to leave at The Coffee House .1: Budgets for two solutions of the first cause.2: Budgets for two solutions of the second cause. 35 2 TIEU LUAN MOI download : skknchat@gmail.com List of Figures Figure 1.1: Employee turnover rate at The Coffee House during 2017-2019 .1: Cause-effect map .2: Absence rate at The Coffee House during 2017-2019 .3: Average actual working hours for part-time and full-time workers .4: Desire to be engaged with a new task by employees .5: Willingness to share knowledges or practical skills within the team .1: Causes of intentions to leave the current jobs by employees. 26 3 TIEU LUAN MOI download : skknchat@gmail.
The Coffee House Vietnam Coffee & Tea Service Trading Corporation, here from The Coffee House, was founded in 2014 as a local coffee shop chain with the first Signature coffee store in Ho Chi Minh City.1 describes some basic information about The Coffee House.1: Company description Company information Descriptions Registered name Vietnam Coffee & Tea Service Trading Corporation (The Coffee House) Founded 2014 Headquarter location Ho Chi Minh City, Vietnam Website http://www.vn Industry Food & Beverage Revenue (2019) VND 669 billion Number of stores 150 outlets Target market Domestic (Vietnam) Specialties Tea & Coffee Company size 2000-3000 employees According to Nikkei Asian Review (1), through attempting to make a difference and delivering the excellence of products and service The Coffee House has become the coffee shop chain experiencing the fastest growth regarding both domestic and international brands. The annual report reveals that as the end of August 2019 the total number of stores has reached 140 4 TIEU LUAN MOI download : skknchat@gmail.com stores; it is expected that this number will amount to more than 700 stores nationwide in the next five years (2). It is estimated that The Coffee House serves more than 40,000 customers per day. In terms of organizational structure, The Coffee House has employed the hierarchical structure based on geography in which employees are managed with reference to their store location.
Store managers are those who directly manage store operations and employees while they report to district managers. The Coffee House’s organizational structure is presented in Figure 1.1: Source: The Coffee House website Figure 1.1: Organizational structure The next section will describe human resources at The Coffee House under the hierarchical model. Human resources It is reported that as the end of August 2019, the total number of employees, including full- time and part-time employees, has amounted to more than 2500 people in both managerial or non- managerial positions. Core values which governs attitudes and behaviors of employees at The Coffee House include service mindset, enrollment of kindness, teamwork and integrity while employees are motivated by inspiration, empowerment, human touch and positive working environment.2 presents employee information at The Coffee House: 5 TIEU LUAN MOI download : skknchat@gmail.2: Characteristics of employees Category Employee information F % Female 1566 61.12% Working position Non-managerial 1925 75.55% Employment status Full-time 798 31.45% Less than one year 1347 53.49% Years of experience 3-5 years 244 9.62% More than 5 years 274 10.2 shows demographic characteristics of The Coffee House’s current workforce as the end of 2019.
Gender The total number of employees at The Coffee House is recorded at 2537. 1566 employees are female, accounting for 61.73% while the rest (38.27%) are male employees. Age It is shown in Table 1.2 that the majority of employees at The Coffee House are Generation X and millennials in the age range of 18-24 years old and 24-34 years old. Firstly, more than two fifths of the total employees at The Coffee House (40.76%) are aged from 18-24 years old while 25-34-year-olds make up for 30.
Those employees aging from 35-44 years old represent 20.20% of employees are above 45 years old. 6 TIEU LUAN MOI download : skknchat@gmail.com Working position Managers at The Coffee House include senior managers, district managers, and store managers who account for nearly one forth (24.12%) of all employees. Non-managerial employees include administrative employees and store employees who make up for 75. Employment status Currently, there are 1739 (68.55%) employees working as part-time staff at The Coffee House while the rest (31.54%) are working full-time.
High proportion of part-time employees in the workforce is one of the most prevalent characteristics of the sector of coffee shop in Vietnam. Years of experience It is problematic at The Coffee House that the number of employees working for more than 3 years is relatively small, 244 employees (9.62%) with 3-5 years of experience and 274 employees (10.80%) who have been working at The Coffee House for more than 5 years.49% of employees have worked at The Coffee House for 1-3 years while more than a half of the workforce (53.09%) have worked at for the Coffee House for less than a year. These figures indicate high attrition rate at The Coffee House. The next section will describe the symptoms of problems concerning exceptional high employee turnover at The Coffee House through the discussions with the Head of HR Department and HR executives.
Symptoms It is stated by Soni and Choudhary (3) that identifying and understanding the differences between a symptom and a cause is critically important to problem solving. A symptom refers to results or consequences which is used as an indicator which signs a problem. After the discussions with the Head of Human Resources and other store managers, some symptoms identified by the researcher include exceptionally high employee turnover rate and intention to leave at The Coffee House in Q4/2019. Exceptionally high employee turnover rate The sector of coffee shop is featured with a high employee turnover rate, in comparison to other industries.
According Viet Nam News (4), the average turnover rate in this sector in Vietnam 7 TIEU LUAN MOI download : skknchat@gmail.com reached the peak at 78%. Although the turnover rate of The Coffee House is relatively lower than that of the whole industry, its turnover rate is high enough that it has disastrous consequences on the company and existing employees. According to the managers at The Coffee House, for years The Coffee House has engaged to implementing long-term retention strategies to keep their employee turnover rate at a healthy rate which benefits the company such as delivering welcoming interview experiences, innovative and supportive onboarding programs, clear definition of professional growth and so on; however, at the end of 2019, the company experienced a sudden increase in employee turnover rate.1 shows turnover rate at The Coffee House quarterly during 2017-2019.1: Employee turnover rate at The Coffee House during 2017-2019 It is shown in Figure 2.1 that in 2017 and 2018 the employee turnover rate at The Coffee House ranged from 39.1% which was relatively low in compared to that of other companies in the same industry. However, in 2019 the employee turnover rate stayed at a relatively high level ang surged to 63.
This rate is alarmingly high and has caused serious 8 TIEU LUAN MOI download : skknchat@gmail.com and negative effects on employee and organizational performance at The Coffee House. Therefore, exceptionally high employee turnover rate is identified as a symptom at The Coffee House. Intention to leave Bertelli (5) states that the intention to leave is perceived as the most accurate indicator of real employee turnover rate. In other words, the intention to leave is the cause of decision to quit job of the employees.
There are many factors explaining the intention to leave by the employees such as job dissatisfaction, workplace conflicts, salaries and benefits and so on. At The Coffee House, it is identified through the survey of employee satisfaction at the end of 2019 that more than a half of employees at The Coffee House who intend to quit their job in the near future.1 shows the results concerning the intention to leave of employees at The Coffee House.1: Intention to leave at The Coffee House Response Number % Yes 536 53.40% Intention to leave Part time 462 86.62% The first question on the survey is “I intend to quit my job at The Coffee House” which shall directly express personal desire to quit his or her position at The Coffee House.1 indicates for the results from collective responses for this question which reveals that among 1000 employees participating in the survey of employee satisfaction, there are 536 employees, accounting for 53.6%, who presented their intention to quit their current jobs at The Coffee House while the rest (46.4%) decided to stay with The Coffee House. The survey also found out that the majority of those who intend to leave are part-time employees (86.19%) and working at non- managerial positions (88. The employees who are working as full time and managerial employees are more engaged to The Coffee House.
9 TIEU LUAN MOI download : skknchat@gmail.com At the same time, the second question of question is centralized and collectively expressing for the observations of current employees on the degree and pace of other employees quitting their jobs at The Coffee House. There are total of 56.