UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ PHAM THI KIM HUYEN LOW LEVEL OF MOTIVATION IN DATA ANALYSIS TEAM AT IMPERIAL TOBACCO VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2020 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ PHAM THI KIM HUYEN LOW LEVEL OF MOTIVATION IN DATA ANALYSIS TEAM AT IMPERIAL TOBACCO VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR. NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2020 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT LIST OF FIGURE. 1 LIST OF TABLE .2 Symptom validation and justification .2 Potential Problems and validate the main problem. Poor working environment------------------------------------------------------------------ 18 3.
Low level of motivation ---------------------------------------------------------------------- 21 3.3 Updated preliminary cause and effect map. Lack of Intrinsic motivation: --------------------------------------------------------------- 28 4. Low level of Extrinsic motivation: --------------------------------------------------------- 29 4.1 Alternative solution 1: Eliminate benefits inequality.2 Alternative solution 2: Ensure the employees’ job security. ORGANIZATION OF ACTIONS .1 Contents of organization of action .2 Timeline of implementation.
44 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 8 SUPPORTING INFORMATION .3 Summary of transcripts. 69 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURE Figure 1. ITVN Operation diagram. ITVN Organization Chart.
Turnover trend - Talentnet – Mercer post survey report 2018. Top 3 & Bottom 3 Turnover - Talentnet – Mercer post survey report 2018. Turnover rate at ITVN. Preliminary cause and effect tree.
Updated preliminary cause and effect map. Cause and effect map. 31 LIST OF TABLE Table 1. Total employee turnover rate at ITVN.
Breakdown employee turnover rate at ITVN in 2018 and 2019. Turnover rate of Data Analysis Team. Replacement costs of Data Analysis Team. Costs to implement solution 1.
Costs to implement solution 2. Detailed action plan. 43 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Executive Summary Employees is often considered as the most valuable assets in all organizations. Recruiting and retaining employees in organizations is not only tasks of Human Resources but also involves all other departments.
Therefore, managers and leaders in organizations should care about employees, understand their expectations as well as their difficulties, then give ideas to help organizations in establishing appropriate policies to attract and develop employees to retain them. By doing so, organizations can enhance employees motivation and reduce employees turnover rate, which helps to increase employees productivity and company performance. The purpose of this research is to find out the main problem and the root cause leads to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office recently. With the secondary data provided by Human Resources Department and primary data collected during the in-depth interviews with three groups of the company’s leaders and the employees who are currently working in Data Analysis team and who are also left the company, it revealed that income dissatisfaction, poor working environment, and low level of motivation are potential problems lead to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office.
Further investigating the underlying problems by analyzing the interview results and using the theories from literature, the main problem is identified as the low level of motivation, especially extrinsic motivation, which caused by benefits inequity and job insecurity, that leads to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office. After finding the root cause of high turnover rate, alternative solutions are designed and justified. The solution to eliminate benefits inequity as well as reduce job insecurity by revising the company benefit policies and enhancing engagement meetings for sharing company strategies to the employees is suggested by the managers, selected by the indirect employees and supported by the company Director for execution. Then, the detailed action plan of this solution is presented to the company for implementation to solve the problem.
2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Acknowledgements I would like to express my appreciation to all people who supported me during my studies. First, I would like to send my thankfulness and special appreciation to my supervisor, Dr. Nguyen Thi Mai Trang, who has kindly supported, guided, advised, and motivated me to complete this thesis. Then, I would like to thank my managers, my colleagues at Imperial Tobacco Vietnam Representative Office who gave me chances for conducting interviews and spent their valuable times for giving me comments and opinions which helps me to come up the results of this thesis.
In addition, I would like to send my regards to all of my classmates of MBA 9 for their support, encouragement and giving me strength in all the time writing this thesis. 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Company overview Imperial Tobacco is a group of subsidiaries of Imperial Brands ( 1), one of the biggest corporations in tobacco industry in the world. Imperial Tobacco subsidiaries manufacture and trade a range of cigarettes, tobacco products, cigars, and tobacco accessories such as papers and tubes. Imperial Tobacco International Limited Company in United Kingdom has established its representative office in Ho Chi Minh city, Viet Nam since 1995 and the office is called Imperial Tobacco Vietnam Representative Office (ITVN).
ITVN’s scope of activities is a liaison office, conducting market surveys, identifying and accelerating the trade opportunities in Vietnam market on behalf of the Head Office in United Kingdom. ITVN is not allowed to conduct any directly profitable activities in Vietnam, but only supports the Head Office (Imperial Tobacco International Limited Company in United Kingdom) to boost sales of the company’s products in Vietnam market. Therefore, ITVN is responsible for spending investments to increase the quantity of the company’s products selling in Vietnam market, because the more company’s products are sold in Vietnam market, the more profits the Head Office are earned. The key product of ITVN is Bastos cigarettes, which are producing by local manufacturer under the licensing contract with Imperial Tobacco International Limited Company in United Kingdom.
Bastos cigarettes have been produced and sold in Vietnam market for nearly 25 years, and up to now, Bastos cigarette brand is in the list of top ten selling brands in Vietnam, gaining its market share around 5% (based on data of AC Nielsen 2018). Bastos cigarette brand is strength in mainstream segment, having price ranges from 10.000 dong per pack of 20 cigarette sticks. The key competitors of Bastos cigarettes in the same price segment is Thang Long cigarettes and Sai Gon cigarettes, which are produced by Vinataba, a state-own corporation. The operation diagram of Imperial Tobacco in Vietnam market can be described in the Figure 1 as below: 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Supply materials based Imperial Tobacco on licensing contract Dong Nai Food International Limited Industrial Corporation Company in United Earnings profits on material (Manufacturer) Kingdom (Head Office) supplied and Royalty fees on products sold Funding Distribution for ITVN channel of Bastos activities products in Vietnam market Investment to distribution Imperial Tobacco Vietnam channel to boost sales Representative Office Distributors in (ITVN) Vietnam Figure 1.
ITVN Operation diagram (Source: ITVN Management Department) Besides, Imperial Tobacco Vietnam Representative Office inherits six values from Imperial Brands: we can, I own, I am, we surprise, I engage, we enjoy. Those values are focused to employees’ competency, performance, motivation, and retention. Furthermore, Imperial Brands has built the Leadership Expectations that give opportunities for not only leaders but also employees to drive performance, to take accountability, to build capability, to lead by example, to improve and learn, and to create great teams.2 Organizational structure At the end of the year 2019, ITVN has 20 direct employees who are working in 6 departments in ITVN, which are: Operation Support, Human Resource (HR& Admin), Finance, Marketing, Sales, and Business Intelligence. Besides, ITVN also has 12 indirect employees working in Data Analysis Team who are reported to Business Intelligence Manager of ITVN.
Those indirect employees working in Data Analysis Team are having their labor contracts signed with the labor supply agency of ITVN, Humidor Company. Though having salary paid by ITVN through Humidor 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Company, the recruitment process of Data Analysis Team is done by Human Resource Department of ITVN. This means ITVN is responsible for recruitment, training, appraising, and paying salary to the direct and indirect employees. However, although working in the same office, there is a difference in benefits between the direct employees and the indirect employees of ITVN, in which the direct employees - who have labor contracts signed with the Representative Office - have some additional benefits such as yearly performance bonus, healthcare insurance for their family, while the indirect employees – who have labor contracts signed with the labor agency – do not have those types of benefits.
Furthermore, the direct employees of ITVN are official headcounts of Imperial Brands, so they have employee codes which can be used to log in the intranet websites and access to online resources of Imperial Brands. The organization structure of ITVN is described in Figure 2 below. Labor contract signed with ITVN Labor contract Data signed Analysis with Team Agency Figure 2. ITVN Organization Chart (Source: ITVN Human Resource Department) Data Analysis team has been established since 2015, and the purpose of having this team is to collate and analyze market data of tobacco industry and ITVN’s competitors in Vietnam market.
The daily tasks of Data Analysis team are to input daily data collected from market to the internal system, keep track of Bastos cigarettes sell-in, sell-out volumes and cigarette inventories of distributors and wholesalers, to run and analyze the reports regarding the Bastos cigarettes and its competitors. Those type of reports will help the Business Intelligence Manager having a clearer picture of the whole tobacco industry in Vietnam market so that he can support the Director for 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com decision making. The Director is responsible for all operations and activities of ITVN, as well as provides strategies to the head quarter for future growth of ITVN. Before 2015, without Data Analysis team, ITVN had to buy the market data of tobacco industry and ITVN’s competitors in Vietnam market from AC Nielsen, which costs about 5 billion dongs per year.
Therefore, from 2015, the Director of ITVN made the decision to form up a Data Analysis Team to do collating and analyzing tasks regarding the market data. The total employment costs for Data Analysis team is about 2 billion dongs per year, and the total cost for collecting raw data from market is around 1 billion dongs per annum. Having Data Analysis team, ITVN can save about 2 billion dongs per year while ITVN still has the same results of having reports regarding the market data of tobacco industry and competitors in Vietnam market.1 Symptoms Though Imperial Tobacco Vietnam Representative Office and its Group has a strong and clear strategy to attract, motivate, and retain people, the voluntary turnover rate of the employee at ITVN was high in the past two years, and increased significantly in 2019. This is a symptom that needs to be validated, identify the problems, analyze and diagnose the problems to find out the root cause, then provide the solutions and implementation plans to improve the company situation.
Based on the data collected from Human Resource Department of ITVN, the voluntary turnover rate of total direct and indirect employees at ITVN is showed in Table 1 as below: Table 1.