CHỦ ĐỀ TOPIC 493 494 IMPACTS OF DIGITAL TRANSFORMATION ON JOB PERFORMANCE AND INTERMEDIARY ROLES OF HUMAN RESOURCE DEVELOPMENT: A CASE STUDY OF VIETNAM’S COMMERCIAL BANKS Assoc. Nguyen Thi Bich Loan, Assoc. Nguyen Thi Minh Nhan Thuongmai University Abstract: Digital transformation has become an inevitable trend of the time and Vietnam’s commercial banks are among Top 10 sectors with digital transformation speed. This research aims to investigate the impacts of digital transformation on job performance via the intermediary roles of human resource development.
The research used SEM model to test hypotheses based on the data collected from 225 banking staff in Vietnam. The research findings confirm the intermediary roles of human resource development in the relations between digital transformation and job performance, also indicate that digital transformation has stronger impacts on job performance than on human resource development. The research also provides some proposals to help commercial banks accelerate the digital transformation process so as to develop human resources and raise job performance in the digital environment. Keywords: Digital transformation, Job performance, Human resource development.
ẢNH HƯỞNG CHUYỂN ĐỔI SỐ ĐẾN HIỆU SUẤT CÔNG VIỆC VÀ VAI TRÒ TRUNG GIAN CỦA PHÁT TRIỂN NGUỒN NHÂN LỰC: NGHIÊN CỨU TRƯỜNG HỢP CÁC NGÂN HÀNG THƯƠNG MẠI VIỆT NAM Tóm tắt: Chuyển đổi số trở thành xu hướng tất yếu của thời đại và ngân hàng thương mại Việt Nam là một trong số những địa chỉ hiện có tốc độ chuyển đổi số nằm trong Top 10. Mục đích của nghiên cứu là khám phá ảnh hưởng của chuyển đổi số đến hiệu suất công việc thông qua vai trò trung gian của phát triển nguồn nhân lực. Bài báo sử dụng mô hình cấu trúc (SEM) để kiểm định giả thuyết nghiên cứu dựa trên dữ liệu thu thập được từ 225 nhân viên ngân hàng thương mại Việt Nam. Kết quả nghiên cứu xác nhận vai trò trung gian của phát triển nguồn nhân lực trong mối quan hệ giữa chuyển đổi số và hiệu suất công việc, đồng thời cũng cho thấy chuyển đổi số tác động đến hiệu suất công việc mạnh hơn so với tác động đến phát triển nguồn nhân lực.
Nghiên cứu còn đưa ra một số khuyến nghị để các ngân hàng thương mại thúc đẩy quá trình chuyển đổi số, qua đó phát triển nguồn nhân lực số và cải thiện hiệu suất công việc trong môi trường số. Từ khóa: Chuyển đổi số; Hiệu suất công việc; Phát triển nguồn nhân lực. Introduction Digital transformation has become a widely-used term in recent time. Digital transformation is a global trend and becomes vital to countries, organizations and enterprises (Knut H.
Rolland and Ole Hanseth, 2021). Thanks to digital transformation, the 495 world is witnessing substantial changes and rapid development in the digital competence of human resources, labor productivity, user experience as well as the advent of many new business models. The wave of digital transformation in the banking system is sweeping across the world, Vietnam included. In 2020, the ICT index (indicating the developments in information and communication technology) of the banking sector was 0.
Although digital transformation has been cared of, there exist considerable disparities in the investments of banks in the digital transformation process. For example, the ICT index of BIDV and Agribank were 0. But regardless of these differences, the impacts of digital transformation on human resource development and job performance in commercial banks are undeniable. Therefore, this research aims to identify the relations between digital transformation and human resource development and job performance.
Literature review In the global scale, numerous studies have presented definitions, elements and foundations of digital transformation and its benefits, notably including James Gleick (2006), The Information: A History, a Theory, a Flood; Tanguy Catlin et al. (2017), A Roadmap for a Digital Transformation, McKinsey; Stanford Technology Ventures Program (2005), Geoffrey Moore - Core and Context; Thomas M. Siebel (2019), Digital Transformation. PACE Institute of Management.
In his research on the benefits of digital transformation, Betchoo Nirmal Kumar (2016) built up and tested a model to evaluate the positive impacts of digital transformation on human resource development and job performance for different positions which constitute the elements of human resource management. In Vietnam, inheriting from the model of Kumar (2016), Nguyễn Hoàng Nam (2022) conducted a study on 200 staff, executives and managers in human resource sector. His findings indicated that digital transformation has positive impacts on human resource management; the specific impact levels of digital transformation on elements of human resource management including job performance, talent management, human resource management via standardized β are 0. Also, human resource development also has considerable impact on people’s jobs (Goad, 2002).
Therefore, a study on the impacts of digital transformation on job performance with human resource development playing the intermediary role is of great scientific significance. Banking is a sector with rapid digital transformation speed in Vietnam. Digital transformation is considered an important solution for banks to improve user experience as well as supply new services. Therefore, banking staff must become fast digital transformation human resources with adequate qualifications to meet the demand (including knowledge, skills and attitudes to make data-based decisions) to enhance job performance.
However, empirical research on the relations between digital transformation and job performance in Vietnam’s commercial banks remains modest. Therefore, it is necessary to have more practical research to help banking leaders understand the importance of digital transformation in human resource development and job performance improvement to gain sustainable competitive advantages. Concepts (i) Digital Transformation The idea of digital transformation was first introduced by Daniel Bell in 1973 in the book titled The Coming of Post-industrial Society, exploring the history of developing the structures of human socio-economic correlations. The changes in these structures have affected the order of the industrial revolution, creating changes which are named “information era”.
After that, the world has witnessed the convergence of a set of new technologies including Cloud Computing, Big Data, Artificial Intelligence, Internet of Things. This convergence has created digital transformation (Nguyễn Thị Minh Nhàn, 2022). So far, there have been different definitions of digital transformation but in general, they can be categorized into two main approaches. The first approach is from technical perspective: Digital transformation refers to changes and transformation created on the basis of digital technology; (Nwankpa and Roumani, 2016); is transformation in organization promoted by new technological solutions and trends (Heilig et al.
More specifically, digital transformation is the expansion of modern information technology such as data analysis, mobile computing, social networking or smart embedded devices and the innovation of traditional technology (Chanias, 2017). Therefore, digital transformation is also described as changes created by information technology as a means to automate tasks (Legner et al., 2017) or a process to develop an entity by remarkably changing its features via the combination of information, computers, communication and connection technology (Vial, 2019). The second approach is benefits/consequences of digital transformation: Westerman, G. (2011); Karagiannaki et al.
(2017) stated that digital transformation can be understood as using technology to improve efficiency or approaches of enterprises. Digital transformation involves using new digital technology to facilitate business innovations such as raising customer experience, arranging production operations appropriately or creating new business models (Fitzgerald, M. Taking this approach, Solis et al. (2014) saw digital transformation as restructuring or investing in new technology or business models to draw customers more effectively and enhance their experience when using products and services.
In the meantime, Morakanyane et al. (2017) proposed that digital transformation is an evolutionary process which makes use of digital technology to enable business models, operational process and customer experience to create higher values. In this study, we adopt the view that digital transformation is an evolutionary process involving changing perceptions, establishing digital culture, applying digital technology to create radical and comprehensive changes in management and operation modes and create new values. This concept is supported by the approach to digital transformation from organizations.
Accordingly, the vitality for an organization and the way to success for an enterprise in the information era are to be based on digital technology in their cultural activities and business models, which stem from the 497 perceptions and commitments to digital transformation of leaders with specific and clear plans (Thomas M. (ii) Human Resource Development Human resource development is a function of human resource management in organizations. Human resource development is a complicated and controversial concept due to its being inter-sectoral and multi-sectoral features (McGuire, 2011). Human resource development has some interactions with other functions of human resource management such as training, organizational development, career development (Bierema and Cseh, 2014; Wang et al.
Besides, human resource development also involves new aspects such as intellectual management, manpower capital, social capital and learning organization (McGoldrick et al., 2002, cited by McGuire, 2011). Upon analyzing 32 definitions of human resource development, Wang et al. (2017) stated that defining this concept according to its functions can hardly provide adequate cover, especially when new functions appear. By generalizing common features from various definitions and emphasizing the nature of human resource development, he provided the following definition: Human resource development is a mechanism of establishing values, beliefs and providing skills for the organization’s members via training activities so as to realize the organization’s goals.
The highlight of this definition is, besides mentioning the nature of human resource development, it can reflect the roles of human resource development in the relations with the parent system - the organization. However, it seems more appropriate to use the term “competence” than “skills” in the definition, because “skills” focus more on the abilities to accomplish an action of humans (Cottrell, 2013) while “competence” has a broader scale. “Competence” is the combination of knowledge, skills, attitudes and qualities of a person related to the tasks that he is doing. Job performance involves laborers fulfilling their set targets (Murphy,1989).
The research of Viswesvaran & Ones (2000) defined job performance as the behavior and outcomes gained by the staff which contribute to the organization’s goals. Job performance is the combination of staff behavior which can be measured, controlled and evaluated. Job performance of each laborer plays an important role and determines the overall performance of the organization. On this basis, we adopt the following definition: Job performance reflects the outcomes of staff accomplishing their tasks in the aspects of attitudes, behavior and achievements that contribute to the organization’s goals.
Research model and hypotheses Stemming from theoretical and practical gaps that have been identified, this research aims to answer the following questions (see Figure 1): 498 - How does digital transformation affect human resource development and job performance in commercial banks? - Does digital transformation human resource development play intermediary roles in the relations between digital transformation and job performance? - What should Vietnam’s commercial banks do when implementing digital transformation to raise job performance of human resources? Human resource development H2 H3 Job Digital H1 performance transformation Figure 1: Proposed research model (1) Digital transformation helps optimize staff performance. Bekkhus (2016) identified that digital transformation is using digital technology to improve staff performance. Applying smart technological solutions in digital transformation helps to raise labor productivity by automating processes, reducing manual work, cutting costs, etc. Besides, digital transformation also involves digitalizing sales and communication channels, providing new modes of interactions with customers as well as digitalizing some services of the enterprises so as to replace or strengthen physical services.
Staff in enterprises have more time to raise their professional skills and qualification and implement tasks which bring higher added values. Digital transformation raises customer experience. Digital transformation helps to provide high-quality experience, meet customer demand and desires with good, fast and accurate services. Technology is reshaping the efficiency of human resources (Oxford Economics, 2012).
Digital transformation optimizes staff performance, service quality and customer experience. According to research conducted in 2017 by Microsoft in Asia-Pacific, digital transformation may raise labor productivity in 2020 by 21%, 85% jobs in the region may change in the following three years.