UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Ngoc Truong EMPLOYEE JOB SATISFACTION IN VIETNAM BANKING INDUSTRY: THE MODERATING ROLE OF OWNERSHIP STRUCTURE 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 ------------------------------ Pham Ngoc Truong EMPLOYEE JOB SATISFACTION IN VIETNAM BANKING INDUSTRY: THE MODERATING ROLE OF OWNERSHIP STRUCTURE MASTER OF BUSINESS (HONOURS) SUPERVISOR: DR. DOAN ANH TUAN Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Contents List of figures .3 List of tables .4 List of abbreviations. Literature review and hypotheses development .1 Vietnamese banking system and ownership structure .2 Definition and determinants of job satisfaction .3 Theories and analytical models .1 Maslow's Theory of Needs (1943).2 Motivator/Hygiene Theory (Two-Factor Theory) .4 Hypotheses and research model.1 Nature of work .2 Salaries and benefits .3 Recognition and motivation.6 Job satisfaction of bank employees in state-own banks and private banks. Data analysis methods.
Cronbach’s Alpha and Exploratory factor analysis .4 Multiple regression analysis .5 Multiple group analysis. Discussion, Implications, Limitations and Conclusions .67 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of figures Figure 1: Maslow's hierarchy of needs Figure 2: Conceptual model Figure 3: Research process Figure 4: CFA result Figure 5: SEM result Figure 6: SEM – multiple group result 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of tables Table 1: State-owned banks in Vietnam Table 2: Measurement scale of construct Table 3: Sample description Table 4: Scale analysis result Table 5: Rotated Component Matrix Table 6: Summary of defined factors Table 7: Pearson correlations result Table 8: Multiple regression model summary Table 9: Multiple regression analysis result Table 10: Regression analysis result (SEM) Table 11: Multiple group global test Table 12: Multiple group local test 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of abbreviations CFA: Confirm Factor Analysis EFA: Exploratory Factor Analysis JDI: Job Descriptive Index KMO: Kaiser - Mayer – Olkin statistics SBV: State bank of Vietnam SEM: Structural Equation Modeling 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT Employee job satisfaction in Vietnam banking industry – The moderating role of ownership structure is the topic that I chose to study and do graduation thesis after two years studying master’s program at International School of Business, University of Economics Ho Chi Minh City. To complete the dissertation, firstly, I would like to extend my deepest thanks to Dr. Doan Anh Tuan who has guided me directly throughout the process.
His ideas and support are valuable contributions to the thesis that are completed on schedule and demonstrate the perspective of the researcher. Secondly, I would like to thank to my colleagues at Sacombank, my sister, my friends of colleagues and my colleagues of friends who helped me speed up the data collection process. Thirdly, I would like to thank the proposal defense committee (Dr. Tran Ha Minh Quan, Dr.
Tran Phuong Thao, Dr. Nguyen Phong Nguyen) for evaluating and contributing ideas to the thesis; Dr Nguyen Thi Mai Trang, Dr. Dinh Thai Hoang who guided me research design and data analysis courses. This knowledge related directly to the implementation of the thesis.
Finally, I would like to thank my parents for giving me the best conditions to complete the dissertation. Thanks to my relatives and friends who have always been with me, encouraged me to complete this program and this study. Sincerely thank you! 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT Research on employee satisfaction is very necessary in human resource management and the result is applied in practice to improve personal well-being and organizational effectiveness. This study aims to identify the factors contributing towards the job satisfaction of employees in Vietnam banking industry and explore the difference in level of employee satisfaction between state-owned banks and private-owned banks in Vietnam.
This research has found out four determinants of employee job satisfaction including salaries and benefits, development opportunities, nature of work. This study also shows in general that job satisfaction differs among bank employees in state- owned and private-owned banks. Multiple regression analysis was used to test five main hypotheses while multiple group analysis was applied to examine the moderating effects of ownership structure on job satisfaction. Based on the results, the study suggests some managerial implications for improving the business efficiency.
Comparative results provide theoretical evidence for the banking industry in general and managers in particular 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Introduction For years, organizations have begun to focus on the concept of talent management with the goal of finding, identifying, developing, and maintaining high quality human resources for the business (Bratton & Gold, 2003). However, the detection and selection of external resources is so difficult that labor market must call it the "war" for talent selection. For this reason, many businesses have chosen a path, a new theory aimed at a resource that is ready for future growth as well as for ensuring current productivity.
The understanding of "employees' minds and aspirations" is considered as an important step in the talent management plan as well as building a working environment in line with the development strategy of the enterprise (Devi & Nagini, 2013). Furthermore, it is no difficult to recognize that organizations cannot achieve their goals without quality personnel. According to Kalleberg and Mastekaasa (2001), most companies have made great efforts in selecting applicants, however when these applicant become full time employee, few enterprises have sufficient resources to understand, sharing problems or aspirations of employees. This leads to the decrease of performance and increase of turnover rate.
Various studies also state that employee satisfaction plays a vital role in work performance and employee engagement, such as Spector (1997), Saari and Judge (2004), Luddy (2005) and Judge, Thoresen, Bono, and Patton (2001). To solve these problems, we need to improve the level of job satisfaction through increase the quality of some factors which directly impact. This is the reason why it is essential and important to measure and research the job satisfaction through factors influencing motivation among employees. This 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com contributes positively to the planning of human resource management at working place and brings more job satisfaction to employees, families and society.
According to Allen and Gale (2000) and Levine (2005), the banking system plays a huge role in the economic development and macroeconomic stability of any country. If a weak bank exists, it will lead to potential risk for all system. And human resources are always a prerequisite in operating and developing the banking system to serve the economy. Kelley (1990) states employees in banking sector have lower level of satisfaction and empowerment than other industries.
The repetitive job, unreasonable salary and promotion, non-empowerment, stressful working environment directly affects productivity. Moreover, banks desire to have excellent warriors to operate business activities, decrease cost, increase revenue and profit. Bank employee dissatisfaction have negative in poor job performance (Koh & El'Fred, 2001). Yee, Yeung, and Cheng (2008) also prove that low level of employee satisfaction has a negative relationship with customer’s satisfaction.
In brief, employee satisfaction evaluation is really a key element in improving bank performance and customer satisfaction and the quality of banking system Sinha and Shukla (2013) argue that private and public sector background is a significant element in determining the work style and culture of an organization, job satisfaction is influenced by private – public sector differences. While the foundation which forms work culture for state-owned banks has been based on a concept towards social-economy aspect, private sector banks aim mostly for profitability of its business activities. In other words, the banks, which adopt different organizational structure, have a tendency to craft different business objectives. According to Hart, Shleifer, and 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Vishny (1997), bank strategies and performance vary due to the variety of customer penchants, targeted purchaser, scale, value chain, human resources which could be driven by bank ownership structure.
This leads to the differences in working style between those banks and the result of George (2015) show that there are differences in job satisfaction between employees in state-owned banks and private-owned banks. Various studies have been conducted on employee satisfaction, however there are fewer studies focusing on the differences of employee satisfaction between private and public sector (Islam & Islam, 2014). In Vietnam, there is an outstanding research relate job satisfaction by Tran (2005) who measures employee satisfaction using the JDI scale and demand theory of Maslow (1943) and there are some researches which concentrate on banking sector as Phan (2015), Mai and Bui (2013). They investigate key factors affecting job satisfaction and examine the relationship between job satisfaction and employee loyalty of commercial banks in Ho Chi Minh city.
Moreover, Nguyen, Mai, and Nguyen (2014) examine the factors influencing organizational loyalty of banking employee in Ho Chi Minh city and Phan (2011) studied elements create positive value for employee commercials banks in Hue. There are few studies emphasized the differences of employee satisfaction between public and private banks in Vietnam. The research of Phan (2015) has mentioned differences in the level of employee satisfaction between foreign banks and domestic banks (not Vietnam state-owned and private-owned banks). Thus, I expect to provide new insights significant gap with the moderating role of ownership structure on employee satisfaction in Vietnam banking industry.
10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The purpose of this study is to identify factors contributing towards the job satisfaction in banking industry and explore the difference in level of job satisfaction between state-owned banks and private-owned banks in Vietnam. This study will help candidates who are intending or are making the decision in choosing which banks to work have an overall picture of working environment and job satisfaction. This research also provides suggestions for banks' management adjust the personnel policy to retain talent and increase operational efficiency. The comparative results provide theoretical evidence for the banking industry in general and managers in particular.
To achieve the research objectives, this study will answer the following questions: (1), What are factors affecting employee job satisfaction in Vietnam banking industry? (2), Whether job satisfaction may be different for private-owned banks and state-owned banks employees in Vietnam? This thesis contributes to the literature in several ways. First, this research is related in spirit to the approach of Phan (2015) and Nguyen et al. (2014) which provide an overall and detail picture of human resources management and job satisfaction of employees in banking industry and examine the relationship between job satisfaction and employee engagement. Second, unlike these studies, which concentrate on the level of job satisfaction of employee in a specific bank or in banking industry in general, the research contributes to the literature exploring the difference in level of job satisfaction between two banking groups (state-owned banks and private-owned banks) in Vietnam.
Since some related studies investigate deeply the factors affecting job satisfaction as Bui (2013) and Phan (2015), this thesis further examine the moderating effect of ownership to contribute to the board of director of thanks in 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com planning operational strategy, maintaining and developing excellent employees, making employees more satisfied, attracting talents, and limiting the "brain drain" from rival banks. Different from the recent studies in which general ownership concentration is used to test ownership involvement, this paper mainly compares the smoothing behavior of government-controlled shareholders with that of their non- government counterparts. This study also supports to applicants in depth view of the working environment, welfare, job satisfaction of employees in two banking groups to make the best choice for their workplace. This research is conducted in five stages and divided in five sections.