NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL RESEARCH STUDYING FACTORS INFLUENCING EMPLOYEE TURNOVER AT SETECH SUPERVISOR: ASSOC. VU THANH HUNG STUDENT: VŨ THU TRANG CLASS: EMBA 14A HANOI – 2017 2 ACKNOWLEDGEMENT First of all, I would like to send my faithful thanks to the Business School, National Economics University (BSNEU) with all the members, lecturers and assistants for the whole knowledge, experience that has been taught and transferred through comprehensive lectures, discussions and exams in the passing time of EMBA course. Secondly, I would also want to express my sincere appreciation to my supervisor, Assoc. Vu Thanh Hung.
His wide knowledge and logical thought of business management in general has brought great values to me. Based on his experience, he had instructed and encouraged me so much to help me complete this MBA thesis. I could never complete this work without his priceless suggestions and guidance. Thirdly, one of the most important factors which supported me to finish this thesis is the willing help of many people working at Setech, especially the leaders, who was very busy at business but still helped me in developing the questions in my questionnaire.
Absolutely, without their opinions and information, I could never be able to complete this thesis in a practical and proper manner. Finally, I would like to save my special thanks to my parents, my boyfriend, whose support, encouragement and sacrifices have helped me through many difficult times during the creation of this dissertation. Hanoi, August 2017 Vu Thu Trang EMBA 14A 3 TABLE AND CONTENT ACKNOWLEDGEMENT.2 TABLE AND CONTENT.3 LIST OF TABLE.6 LIST OF FIGURE.2 Data collection methods.16 CHAPTER 2: THEORETICAL BACKGROUND ON EMPLOYEE TURNOVER INTENTION AND FACTORS INFLUENCING EMPLOYEE TURNOVER INTENTION. Overview of employee turnover and turnover intention.
Employee turnover and turnover intention. The necessity to study employees turnover and turnover intention:. Factors influencing employee turnover intention. Overview of researches on employee turnover intention.
Research of Mobley, Griffeth, Hand, & Meglino (1979). Factors influencing employee turnover intention at Setech.3 Job training and Career Advancement (X3). The necessary of applying employee turnover intention model to Setech:.28 CHAPTER 3 ANALYSIS OF FACTORS INFLUENCING EMPLOYEE TURNOVER INTENTION AT SETECH. Overview of Setech.History of Setech’s development.
Mission and vision. Employee turnover at Setech:. Factors influencing employee turnover at Setech:. Demography Background of Respondents.
Factors influencing employees turnover at Setech. Work environment factors:.2 Compensation policy factors:. Job training and career development factor:.54 CHAPTER 4 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS. Development orientation from 2016 to 2020:.
Summary of finding. Organizing more team building activities aims to strengthen the bond among employees as well as between employees and managers:. Developing a clear reward system to increase transparency of the company’s compensation policy:. Creating a job training system to increase skills and knowledge about company:.
Examining company’s core competency aims to develop a clear direction of growth for the company:. Creating exit interviews and focused-group meeting aims to reduce employee turnover’s intention:.64 Appendix A: Questionnaire for Current Employees.66 Appendix B: Questionnaire for Ex-Employees.70 Appendix D: Questionnaire for Current Employees in Vietnamese.73 Appendix E: Questionnaire for Ex-Employees in Vietnamese.76 Appendix F: Successful partnership and projects.78 Appendix G: Demographic Background of Respondents from current and former employees. 84 6 LIST OF TABLE Table 1: Demographic Background of Respondents from current and former employees. 35 Table 2: Academic Qualification of Respondents from current and former employees.
37 Table 3: Employee Information of Respondents from current and former employees.38 Table 4: Job Position of Respondents from current and former employees. Working environment analysis of current and former employees. Response of current employees and former employees regarding relationships among staffs and management. Response of current and former employees regarding base salary at Setech.
Response of current and former employees regarding additional benefits and reward system at Setech. Response of current and former employees regarding job training and career development plan at Setech. Response of current and former employees regarding promotion mechanism at Setech. Response of current and former employees regarding unfair treatment at Setech.
Response of current employees regarding workload at Setech. Response of current and former employees regarding other mismanagement problems at Setech. Response of current employees regarding other alternative jobs.54 7 LIST OF FIGURE Figure 2.1 Mobley et al (1979)’s simplified model.5: Employee turnover Model. Organizational structure of Setech.
Employee turnover rate at Setech from 2011 – 2016.34 8 EXECUTIVE SUMMARY The exploration of the study was derived from the author’s experience and involvement in Setech, which dated back to 2014 when the author was recruited to join the financial team in Setech. While working in Setech, the author recognized that the employee turnover rate was relatively high, most employees in Setech had not been working for the company long enough to feel committed and loyal. The author of this thesis is an example. As an ex – employee, the author yearned to find out for what reasons number of employees resigning from Setech remains high throughout the years and how employee turnover at Setech might have had influence the quality of service and job performance.
Moreover, employee turnover, as an academic concept, has aroused wide attentions from the fields of management, social psychology, and practical operations in recent years. For these reasons, the author choose to demeanor a study called “Studying factors influencing employee turnover at Setech”. The main purposes of this study is to point out significant objectives are to systemize researches on employee turnover and factors influencing employee turnover, and based on previous researches, the author develop her own model applicable to Setech’s situation. Based on the analysis of data collection, the author will explore the main factors leading to the decision to leave of employees and propose suitable recommendations that can be applied to Setech.
The study will utilize quantitative method and present the results through graph and statistical data with the conditions that information and permission will be obtained beforehand. Based on the interviews with the head of the company and department heads and the data collected from participants, the author articulated the following as the factors that are influencing Setech’s high employee turnover: 9 - Work environment; - Compensation policy; - Job training and career development; - Management problems; - Alternative job opportunities. Based on the information collected from respondents, the author notices that each of mentioned factor influences employee turnover differently. For instances, Setech has done amazing jobs on creating a good working environment for employees, providing salary in accordance to employees’ experiences and workload as well as making employees feel that they would rather at Setech even though there are better opportunities on the market.
However, other factors such as unclear reward system, lack of job training and career development system, low employee morale and lack of employee empowerment affect Setech negatively. Based on the results of the survey, the author proposes the following recommendations: - Organizing more team building activities aims to strengthening the bond among employees as well as between employees and managers: The team-building activities can be a camp-fire overnight trip incorporating team-building challenges, a company holiday trip or even just a company dinner. All of these activities encourage team work and collaboration among members of the company as well as to relieve employees’ stress. - Creating a clear reward system aims to increase transparency of the company’s compensation policy: The company needs to create employee performance expectations, including the goals employees need to achieve and other necessary requirements.
After developing employee performance expectations, the company needs to determine which type of rewards applying to different goals. The reward system and requirements need to be known by all of employees in Setech for them to understand that the company is fair and everyone can be rewarded if they achieve the requirements needed. 10 - Developing a job training system aims to increase skills and knowledge about company: Setech needs to develop two types of job training systems: general training and skill-set training. General trainings are needed when new employees join the company, which is a one – on – one conversation with the head of the company about what kind of company Setech is and what Setech expects of employees.
Skill-set training will be an on – job training. The skill the company requires of employees varies depending on which departments the employees work for as well as the positions the employees hold. After the training period of 6 months, each new employee will be evaluated by supervisor and manager. - Developing suitable core competency aims to develop a clear direction of growth for the company: The company needs to have a good core competency in order to make employees believes in its capability as well as its future.
The good core competency needs to be valuable, rare, no substitute, costly to imitate. Based on those criteria, the core competency of Setech will be “Innovation: developing Vietnam as the country of smart and secured city”. With the core competency, employees will understand what Setech is good at and the ability of Setech to grow, in turn, employees will feel more powered and have high morale when knowing what working for Setech. - Creating exit interviews and focused-group meeting aims to reduce employee turnover’s intention: Exit interview is important in knowing and understanding reasons former employees leave company.
Based on information gathered from former employees, the company will develop a suitable solution for improvement. Each month, the company will organize focused-group meeting in order to employees to talk about their dissatisfaction and what the company needs to work on. Rationale Studies on human resources in general are necessary, a research focusing on employee turnover is also important since understanding the reasons behind each employee’s decision to resign can be a decisive factor for keeping talented employees in the company as well as improving the quality of job performance. While study on employee turnover rate differs across countries, across organizations and departments, analysis of the cost of high turnover rate emphasizes the importance of retaining superb employees in the companies, thus, helping the companies achieve a successful position in the market.
From a managerial point of view, the attraction and retention of high-quality employees are more important than ever. Applying the knowledge about employee turnover rate and the effect of high turnover rate on a company’s performance, this research is to evaluate the current employee turnover rate and find out the reasons why most employees have not stayed for more than two years with Setech, a start – up company which supply security systems to government entities, factories, companies and households that the researcher used to work for. According to yearly reports of Setech, the employees turnover rate at Setech is at the alarming rate since the establishment of the company. In 2011, with the support of many government entities, the head of the company established Setech with only 7 employees.
However, after some times working for Setech, 4 out of 7 employees resigned, looking for another opportunity in the market. In 2012, the company had chances to partner up with government entities to host events and projects. With the increasing in amount of work, Setech decided to hire more employees and established departments within the company. With the end of each project, employees decided to resign and the number of employee turnover at Setech is up to 7 out of 32.
The number of 12 employees turnover in 2013, 2014, 2015 is 2 out of 37, 5 out of 46 and 8 out of 63, respectively. In 2016, with the expansion of Setech venturing into Buon Me Thuat, head of the company decided to hire more employees, especially the collaborators in order to expand the current market. However, the number of employees resigning remained high, 6 out of 98 in 2016. According to Ms.
Do Nhat Nga, the company’s founder and CEO, “the high staff turnover originates from the current state of the company. Even though the company is always profitable and the working environment is relatively good compared to other companies, the staff often resigns.