UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------- Dinh Viet Hien THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City - 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------- Dinh Viet Hien THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. Nguyen Phong Nguyen Ho Chi Minh City - 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis proposal title: THE POOR MOTIVATION OF STORE MANAGER LEVEL AT PIZZA HUT VIETNAM Student Name: Dinh Viet Hien Supervisor: Dr. Nguyen Phong Nguyen 1. General comments: Remarks on the student’s attitude: …………………………………………………………………………… …………………………………………………………………………… Remarks on the assignment’s academic quality: …………………………………………………………………………… …………………………………………………………………………… 2.
Overall assessment: Meet requirement for submitting Not meet requirement for submitting 3. Other remarks: Did the student follow the report schedule? Yes No Other…………………………. The Turnitin plagiarism percentage: Supervisor’s signature LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Table of Content Executive Summary. The Importance of Symptom.
Initial Cause – Effect Map. Updated Cause – Effect Map. Central Problem Validation. Causes Validation and Solutions.
The Real Causes of Central Problem List. Central Cause Validation. The Set of Alternative Solutions. The Frist Solution – Employee Recognition Workshop.
The Second Solution – Recognition Gift Program. 52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Executive Summary Employee’s turnover rate is one of business challenge in organizations. The high turnover rate has negative impacts on business performance such as more expenses to recruiting, increasing people cost, bad company reputation, reducing revenue as well profit and so on. In Pizza Hut Vietnam (PHV), the turnover rate of store manager level has increased significantly from 2014.
This rate is non-stopped increasing with 17.2% at June 2017 that is highest since PHV join to food and beverage market in Vietnam in 2007. This leads to PHV’s low performance in terms of key performance indicators in consecutive three year such as decreased balance score card, unstandardized customer satisfaction and increased people cost for recruiting and training. Through this research, some potential problems of turnover rate were pointed out such as uncompetitive compensation package, unavailable career development opportunity, job stress and poor leadership. One of these potential problems is poor job motivation that has been argued as a central problem of high turnover rate at store manager level at Pizza Hut Vietnam Ltd., Poor job motivation in this researcher is presented in terms of ineffective supporting and coaching as well as weak recognition and poor communication.
The importance of job motivation improvement also demonstrated through exploring its consequences to individual and organizational performance. 1|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Company background Pizza Hut is one of brand franchising from American YUM! Brand. It is the best restaurant chain with numbers of stores as well as sales revenue on over the world.
Pizza Hut is well-known with traditional pizzas following American style along with auxiliary products as pasta, fired chicken wing and so on to serve diversified customer’s needs. Besides, Pizza Hut has been operated by standardized policies and procedures to maintain high quality of products and service. Vietnam’s economy has grown rapidly since the country has implemented the market economy and the opening-up policy. In alignment with globalization and internationalization, social conditions also have some changes.
One of these changes is Vietnamese’s eating habits. With the entrance and dramatic development of Western style fast food in Vietnam, local Vietnamese have more choice for eating out. It’s a fact that Vietnamese, nowadays, have a tendency for gathering and eating out together. With a large and young population (Figure 1), Vietnam is perceived as a potential market for restaurant business developers.
Brands such as KFC, Pizza Hut, Lotteria, and Jollibee have been pioneers in the Vietnamese market. Pizza Hut developed in Vietnam by International Food & Beverage Holdings (Vietnam) and Jardine Restaurant Group – JRG (Hong Kong) in 2007 as one of franchises from Yum! Brands, Inc. (Figure 1: Large Youthful Population, Vietnam Population Organization, 2016) Large Youthful Population 19.8% 00-09 10-19 20-29 30-39 40-49 50-59 60-69 70+ years years years years years years years years 2|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com This is the world’s largest restaurant company in terms of system restaurants with over thirty nine thousand restaurants in more than one hundreds thirty countries and territories. The Company's restaurant brands – KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories.
In January 2011, JRG has taken ownership and fully operated PHV. With its strong brand and powerful financial capability, PHV has been leading the pizza market segment in the domestic fast food market (Figure 2). In December 2014, the chain has had totally fifty stores in Hanoi, Ho Chi Minh City and other provinces. The Company’s vision is to be the leading pizza restaurant chain in Vietnam offering the best pizza at affordable prices and great services in a warm, friendly and comfortable environment.
At the presence, Pizza Hut Vietnam (PHV) located with more than 57 stores and more than 2,200 employees in nationwide. (Figure 2: Pizza Hut Vietnam leads the CDR market in store count, APM PHV 2014) 3|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Symptom Analysis The employee’s turnover rate was defined as how many new employees were hired to replace the resigned staff (1). According to this definition, turnover rate only was counted when the replacement was successful due to hiring of new employees.
Chikwe (2) has another definition when employee’s turnover rate can be briefly described as how fast the employers recruit and lose employees. However, the above definitions have not yet reflected gap of numbers of resigned employees and to be hired new ones in case replacement and resignation employees amount are not approximate. Henry (3) defined the employee’s turnover rate to be the ratio of the numbers of organizational members who left during the period being considered divided by the average numbers of people in that organization during the period. In practical, this rate is calculated basing on different principles to serve business needs of each organization such as voluntary turnover, involuntary, retirement, internal transfers.
In PHV, the employee’s turnover rate has been calculated by the numbers of resigned employees who had the employment length at least seven days from on boarding date divided to total of employees in the same a period and level. A (Numbers of resigned employees) 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒 ′ 𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒 𝑟𝑎𝑡𝑒 = B (Total of employees) Including: A = Leaving date – Service started date +1 (It is only counted when it is great than or equal to seven days) B = Total of employees at times the turnover rate to be calculated From 2014, PHV has faced with the high turnover rate of store managers. The PHV’s headcount report showed that the turnover rate of store managers have increased from 18. 4|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com PHV Turnover Rate 71.2% 2014 2015 2016 Jun-17 Store Manager Team Member PHV Turnover Rate Comparation - Store Manager Level 27.2% Pizza Hut Starbuck The Pizza Company 6.1% 2014 2015 2016 This report also analyzed about this rate and only focuses on store managers who have from four years working experience in PHV.
They have much experience not only technical skills but also management skills to operate stores in order to achieve sales targets. With current career roadmap in PHV, a store manager spends at least 05 years to perform well and to be promoted to store manager (from entry level as team member to store manager). Therefore, PHV expenses many investments to develop store managers who have full capability to handle all tasks in store. On other hand, store managers in PHV were approached by competitors.
Through the exit interviews and surveys to be conducted by the HR Department, these reports 5|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com showed that almost the store managers who left PHV and joined competitors.17% of the resigned store managers have worked for direct competitors (Direct competitors are defined as brands have the same products and service with Pizza Hut as The Pizza Company, Domino, Pizza 4P, Al-Freshco…).06% have worked for indirect competitors (Indirect competitors are defined as brands run business in Food & Beverage industry such as KFC, Lotteria, Jolibee, Mc.Donald, Circle K, Family Mart…). The Importance of Symptom The negative impacts of the high turnover rate are reflected by key performance indicators from 2015 to 2017 such as CER, CMS, GES and BSC. 94% 92% Standard - 100% 89% 89% 80% 85% 75% 72% 68% 65% 62% 62% 2015 2016 2017 CER CMS GES BSC CER – Champs Excellent Review: This is standard about compliance with daily product process in store. CMS – Champs Management System: This is standard to control and maintain entire system in store such as machine, warehouse, and facility.
GES – Guest Experience Survey: This is standard about customer service to be surveyed by unnamed customer to experience service in store and evaluate. BSC – Balance Score Card: This is standard about sales and profit in store basing calculates revenue, cost and other expense. 6|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Recruiting and Training Expense: This is cost to be spent for recruiting as well as training process such as job posting, headhunt service, training coast and other expenses. Additionally, the numbers of employees at each store is not equal to norm to ensure enough staff in a shift.
This leads to each employee must work over time more and increase people cost. 57 55 51 48 43 37 Number of store manager Number of store 2015 2016 2017 7000 $600,000,000 6000 $500,000,000 5000 $400,000,000 4000 Number of overtime $300,000,000 working hour 3000 Overtime working payment $200,000,000 2000 $100,000,000 1000 0 $- Jun-17 2016 2015 Store managers take responsibility to control these key performance indicators in line targets. These indicators reflect the performance of store. Therefore, to achieve these 7|Page LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com targets requires store managers to spend time, capability to operate effectively.
To meet sales targets, store managers have acted as an important role to achieve the best performances through delivering good products and customer services. They take responsibilities of sales increasing, people cost controlling. One of characteristics of job is to serve customers day-by-day even weekend and holidays. Therefore, store managers usually have to face with pressure of working time arrangement in order to either gain objectives or spend time for their personal life.
Over-time working happens frequently during marketing campaigns period when people are under various pressure (e. they must run with maximized capability to attract customers for competition such as local store marketing, trade zone activations and so on). These activities are going on continuously. Additionally, management level also control quality of products which is complied strictly with legal policies as food safety, stock management and discarded process.
These procedures are complicated and required them perform carefully. Only a small mistake, it also makes them face with penalties. Besides, revenue is one of the biggest challenges in daily operation. Target sales are planned with high level to not easy achievement.
They always find all ways to offer potential customers for revenue increasing. Methodology There are two methods in this research to be qualitative and quantitative research. The underlying research philosophy is also a key influence in the choice of research method (4). Therefore, both methods are applied to ensure that this research reflects and measures realistic information with research’s purpose.
Qualitative research is primarily exploratory research.