INTERNATIONAL SCHOOL OF BUSINESS - UNIVERSITY OF ECONOMICS HCMC UNIVERSITY OF TEMPERE PROGRAMME FOR M.A IN PUBLIC ADMINISTRATION THESIS PSYCHOLOGICAL CAPITAL AND QUALITY OF WORK LIFE AMONG EMPLOYEES IN PUBLIC SECTOR: EVIDENCE FROM HO CHI MINH CITY DEPARTMENT OF CULTURE AND SPORTS. Name of Student: Thái Hồ Thiên Hương Supervisor: Professor Jan – Erik Johanson Date of submission: May 4th , 2016 UNIVERSITY OF TAMPERE School of Management PSYCHOLOGICAL CAPITAL AND QUALITY OF WORK LIFE AMONG EMPLOYEES IN PUBLIC SECTOR: EVIDENCE FROM HO CHI MINH CITY DEPARTMENT OF CULTURE AND SPORTS. Supervisor: Professor Jan – Erik Johanson Student: Thai Ho Thien Huong May, 2016 i ACKNOWLEDGEMENT Firstly, I would like to express my gratefulness to my supervisor Professor Jan – Erik Johanson for his intensive support, valuable suggestions, instructions and encouragement during my research time period. Besides my supervisor, I would like to express my deepest gratitude to Professor Lasse Ourlasvirta, Professor Harri Lohanen, Professor Jari Stenvall, Professor Tran Ha Minh Quan and Professor Le Nhat Hanh and other lecturers for their valuable time as the members of the ISB research committee.
Their comments and meaningful suggestions have significantly contributed to this research. I would like to sincerely thank all of my teachers at International School of Business – University of Economics Ho Chi Minh City for their teaching and guidance during my Master’s course. Additionally, I would like to give my special thanks to my family for their supports either in financially or mentally. They are the ones who supported me throughout the way I managed to complete my thesis.
Ho Chi Minh City, April, 2016 Thai Ho Thien Huong ii University of Tampere School of Management Author: THAI HO THIEN HUONG Title of the thesis: Psychological Capital and Quality of Work Life among employees in public sector: evidence from Ho Chi Minh City Department of Culture and Sports. Master’s thesis: 60 pages, 05 appendices Date: April, 2016 Keywords: Psychological capital, Quality of Work life and Job performance ABSTRACT In the modern world, employee’s organizational performance is seen as one of the most important factor in developing an organization for both public and private sectors. The literature review also showed a lack of empirical research on the topic in the context of Vietnam, especially in the public sector about PsyCap in relation with Performance. Therefore, this study aims to examine the impact of PsyCap and Quality of work life on employee performance in public agencies such as Department of Culture and Sport in Ho Chi Minh City.
28 questions with the seven-point Likert scale were used to the research. Respondents in this study were 157 employees working full-time in this Department in Ho Chi Minh City. SPSS 20 and AMOS 20 were used to analyze the collected data. The research findings proved the significant effect of PsyCap Performance as well as QWL and performance in the public organizations in Ho Chi Minh City.
This study provides not only better understanding of the subject but also the practical implications for personnel management of the organization. iii TABLE OF CONTENT ACKNOWLEDGEMENT .ii TABLE OF CONTENT .iii LIST OF TABLES. v LIST OF FIGURES. vi LIST OF APPENDICES .vii LIST OF ABBREVIATION .viii CHAPTER 1 – INTRODUCTION .2 The research target .3 Central terms and concepts .4 Research methodology and Research scope .6 Organization of the study.
8 CHAPTER 2 – LITERATURE REVIEW .2 Overview of Ho Chi Minh City .3 Ho Chi Minh City Department of Culture and Sports .1 Formation history of Ho Chi Minh City Department of Culture and Sports .2 Operating regulations of Ho Chi Minh City Department of Culture and Sports .3 Organizational regulations of Ho Chi Minh City Department of Culture and Sports .4 A brief description of Performance in Ho Chi Minh City Department of Culture and Sports (DCS) 15 2.4 Theoretical background and hypothesis development .1 The meaning of Psychological of Organizational Behavior .3 Quality of Work Life (QWL) .5 The proposal model and hypotheses of the research.3 Qualitative and quantitative data .7 The quantitative study .2 Data collection and procedure .3 Data analysis method .8 Advantages and disadvantages in conducting the research. 33 CHAPTER 4 – DATA ANALYSIS.2 Quality of work life .3 Reliability and Validity testing .4 Confirmatory Factor Analysis (CFA) .5 Structural equation modeling (SEM) .6 Discussion of research findings. 52 CHAPTER 5 – CONCLUSION, IMPLICATION AND LIMITATION .1 Summary of study .3 Limitations and further recommendations. 58 v LIST OF TABLES Table 1 Employment and wages in Vietnam and other countries in the early 1990s.
4 Table 2 Minimum Wage Increases and Inflation Rates (1994-2003). 5 Table 3 Operational definitions of variables used. 22 Table 4 Sources of measurement scale. 26 Table 5 Source of data collection.
30 Table 6 Descriptive statistic for Self-efficacy. 38 Table 7 Descriptive statistic for Hope. 39 Table 8 Descriptive statistic for Optimism. 40 Table 9 Descriptive statistic for Resiliency.
41 Table 10 Descriptive statistic for Survival needs. 42 Table 11 Descriptive statistic for Belonging need. 43 Table 12 Descriptive statistic for Knowledge needs. 44 Table 13 Descriptive statistic for Job Performance.
45 Table 14 Correlation between constructs (r). 47 Table 15 Correlation among construct scores. 47 Table 16 Unstandardized structural paths. 49 vi LIST OF FIGURES Figure 1 Gender status of civil servants in DCS.
13 Figure 2 Age group of civil servant in DCS. 14 Figure 3 Education levels of civil servants in DCS. 14 Figure 4 Income of civil servants in DCS. 14 Figure 5 Theoretical framework.
21 Figure 6 Research process. 25 Figure 7 Gender of respondents. 34 Figure 8 Age of respondents. 35 Figure 9 Education level of respondents.
35 Figure 10 Income of respondents. 36 Figure 11 Tenure of respondents. 36 Figure 12 Position of respondents. 37 Figure 13 Final measurement model.
48 Figure 14 Structural results (standardized estimates). 50 vii LIST OF APPENDICES Appendix A: Questionnaire in English version. 62 Appendix B: Questionnaire in Vietnamese version. 65 Appendix C: List of in-depth interview participants.
68 Appendix D: In-depth Interview’ refinement measurement scale. 68 Appendix E: Convergent and discriminant validity of the model constructs. 70 viii LIST OF ABBREVIATION AVE : Average variance extracted CFA : Confirmatory factor analysis CR : Composite reliability DCS : Department of Culture and Sports FDI : Foreign direct investment GDP : Average gross domestic product HCMC : Ho Chi Minh City POB : Positive organizational behavior PsyCap : Psychological Capital QWL : Quality of work life SEM : Structural equation modeling 1 CHAPTER 1 – INTRODUCTION 1.1 Research background According to Friedman (2007), in the present era – “flat world”, people has more prospects to collaborate and compete with each other than ever in the modern world. In new competition between organizations, in order to become the leader, firms have been forced to non-stop develop their business and market.
Besides, cutting price and cost or even downsizing the number of employee to survive is also the strategy chosen by many enterprises in such new business environment (Luthan, Norman, Avolio and Avey, 2008). Mentioned as intangible resource, employee has increasingly vital role in organization as well as in economic productivity (Garvin and Mason, 2004). They are able to afford to contribute to organizations’ operation, success or even survival. Moreover, in order to access how effective an individual does, organization usually depends on their job performance.
Therefore, job performance is used to measure the work result, responsibility of employee, ability to complete tasks from the perspective of the judging party. In other words, employee performance has a positive impact on organizational effectiveness in terms of productivity, profitability, customer loyalty or staff turnover (Harter, Schmidt, Killham and Asplund, 2006). It is noted that firms having more engaged staff have double rate of success compared with lower engaged firms (Baldoni, 2013). For more evidence, Jensen, Luthans, Lebsack and Lebsack (2007) mentioned rising one standard deviation of high performance work practice will enhance sale per employee up to $27,000 per year, increase profitability approximately $4,000 per employee and boost market value of organization up to $18,000 per employee.
This in turn has required organizations to approach their human resource as competitive advantage due to its difficulties in imitation in order for sustainable growth by new resource-based perspective (Barney, 1991). It illustrated the relevance of organizations’ outcome and employee performance. On the one hand, firms can reach their goals from production process, delivery goods and services to take care their customers by highly performing employees. On the other hand, recognized as highly performing individuals, employees feel not only proud of their effort but also increase their satisfaction in workplace.
Without satisfaction, they can fail to implement tasks, make full use of skills and knowledge to achieve their own objectives as well as organization’s mission (Sonnentag and Frese, 2002). It shows employee, especially higher performing individuals are strategic asset and play critical role in to the overall success of organizations. Based on this view, firms have tried to find out amongst their employees who are well performed as well as improving staff performance is also emphasized. However, it is noted that performance level varies in different tasks, positions and 2 context-specific of organizations (Rothmann and Welsh, 2013).
It means such positive outcomes of performance can be gained by understanding in depth its antecedents which should be focused by organization and policy makers. When it comes to Vietnam, since implementing the economic reform Doi moi which was initiated in 1986 to date, many economic success have achieved by the Government and Vietnamese citizen. For specific, according to General Statistics Office (2008) (GSO), average gross domestic product (GDP) increased eight per cent in 1997 – 2007 period; foreign direct investment (FDI) rose ten times, from US$2.45 billion in 2001 to $20. With changes and rapid economic growth over the last two decades, more and more private enterprises and stat-owned enterprises have been established, promoting control and management ability of the Government in such increasingly complex market economy.
As representative organizations of the Government, public organizations have more responsibilities in management, formulating to implementing policies and planning project than ever in Doi moi process in order to meet the demand of society, citizens as well as dynamic market economy. Increasingly recognizing the pivotal role of public sector, the Government has reorganized and modernized public sector, aiming to enhance the quality of operation of private sector and the whole of economy, step by step moving to a socialist-oriented market economy. It is noted that in a Socialist country like Vietnam, the state agency has constituted of large proportion of organizations and created huge amount of employment – represented by civil servants who play key role in managing and directing policies issued by the Government. Civil servants are defined as “a Vietnamese citizen who is recruited, appointed to have a permanent job in a state agency and get the salary from the state budget” in Decree in May 1991.
Based on such definition about civil servant, it is estimated that there are currently 1.2 million employees working for state agencies. They are those who involved in executing the political decisions of the Government and State Administration, managing public activities and providing socioeconomic activities. According to Ho Chi Minh delegator in the 13th National Assembly of Vietnam, State Administration is currently too cumbersome and need to be restructured in order to meet the demand of global integration. The purpose of reorganization is to make the bureaucracy more flexible, adaptive and efficiency in the modern world.
And from this starting point, the Government is able to pay the ways for fostering sustainable economic growth. Moreover, in such new paradigm business environment, it is essential to purge the “input-based” and “process-oriented” system and move toward to “outcome-based” and “service-oriented” system.