Griffith Business School Submitted in fulfilment of the requirements of the degree of Doctor of Philosophy by Thi Minh Phuoc Nguyen June 2017 i HRM Practices of Multinational and Domestic Enterprises in Vietnam Thi Minh Phuoc Nguyen BBA, MIM, MSc Department of Employee Relations and Human Resources Griffith Business School Griffith University Principal Supervisors: Professor Kate Hutchings Associate Professor Ashlea Troth Associate Supervisor: Professor Tom Nguyen Submitted in fulfilment of the requirements of the degree of Doctor of Philosophy June 2017 ii ABSTRACT Human resource management is important for improving enterprises’ competitiveness. Consequently, many enterprises have paid much attention to managing and developing their human resources and a great number of professional and academic studies have been produced in this field. However, the literature on the human resource management (HRM) practices of multinational enterprises (MNEs) and their performance in developing countries like Vietnam is considerably less voluminous. This research is motivated by two main research questions: RQ1.
How do differing ownership types affect the adoption of HRM practices in Vietnam? RQ2. To what extent do differing HRM practices in Vietnam affect employee job satisfaction and employee performance? The research contributes to the existing literature in several ways. First, it adds to the literature on HRM in Vietnam, a topic which remains under-researched, despite the country’s increasing significance in economic and geopolitical terms, and the very large and growing literature on HRM in developed countries. Specifically, the study focuses on comparisons of four main types of enterprise ownership: enterprises considered as state-owned (SOEs where the state is the sole shareholder); equitised state-owned (ESOEs where part of the ownership is sold to other sectors); privately owned (POEs, with 100% domestic private ownership); and multinational (MNEs, with majority or 100% foreign investment).
Second, the current study contributes to the broader international literature with regard to the possible relationship between HRM practices and employee outcomes. Although some previous research (e., Gardner, Moynihan, Park & Wright, 2001) has shown that employee outcomes play a crucial mediating role between HRM practices and enterprise performance, to date such a mediating role has been overlooked by most empirical HRM studies, which tend to focus on the direct relationship between HRM practices and enterprises outcomes (e., Arthur, 1994; Huselid, 1995; Macduffie, 1995, Wright et al. However, the relationship between employee outcomes and enterprise performance is beyond the scope of this research. This current research focuses on employee outcomes rather than organisational level outcomes.
The current research covers HRM practices in four key areas: recruitment & selection (R&S), iii training and development (T&D), performance management (PM), and reward systems (RS). It considers two types of employee outcomes: employee performance and job satisfaction. Third, this research uses a theoretical framework (RBV) to gain a deeper understanding of the various patterns of enterprise practices observed. This helps to address a weakness in the current literature, as most previous studies in this particular area have tended to give little consideration to the theoretical underpinnings of their findings.
This research adopts a qualitative method and involves two studies of in-depth, semi-structured interviews, both of which were carried out in the Northern region of Vietnam. In Study 1, 18 managers were interviewed; in Study 2, interviews were conducted with 49 employees. Qualitative content analysis was utilised first (Flick, 2014), followed by thematic analysis, to compare and synthesise findings from the two groups of interviews. The main findings from the analysis are as follows.
First, the perceptions of managers and employees regarding HRM philosophy and practices at the various types of enterprises are somewhat similar, although there are a number of instances where the employees provide the differences. The similar perspectives between managers and employees could be due to the fact that employees did not want to be seen differ from their managers’. Some employees had different perspectives from their managers because they may see things at their personal view while the managers had a broader view on the interviewed issues. Second, it appears that participating MNEs were more inclined (than the participating domestic enterprises) to see human resource as a critically important resource, to treat HRM as a key part of efforts to achieve strategic goals, and to implement HRM systems and practices that are in line with international standards (and that evidence a RBV approach).
By contrast, the relevant SOEs were least likely to do so, while the large POEs were often quite close to the position of MNEs, and ESOEs tended to take intermediate paths between these two approaches. It should be emphasised that ownership was not the only influence on the adoption of HRM practices. Other factors also play important roles, including national culture (e., collectivism, respect for seniority, and the importance of “face”). iv Third, while differences across the participating enterprises regarding employee outcomes are not as clear-cut as differences in terms of HRM practices, there are indications that employee outcomes at MNEs and large POEs are more favourable than at SOEs, especially for younger employees.
The findings suggest a number of practical implications for HR managers as well as for the government of Vietnam. The government should encourage and assist universities to provide prospective graduates with more up-to-date training, including more hands-on experience. Managers at domestic enterprises need to be familiar with the HRM practices of MNEs and should make an effort to select and adopt those practices that, on balance, are likely to enhance their own enterprise’s overall performance and competitiveness. Managers at MNEs could do more to ensure that their HRM practices do not conflict with the local business culture.
v STATEMENT OF ORIGINALITY This work has not been previously submitted for a degree or diploma in any university. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made within the thesis itself. Thi Minh Phuoc Nguyen June 2017 vi ACKNOWLEDGEMENTS I would like to express my great gratitude and appreciation to my principal supervisors, Professor Kate Hutchings and Associate Professor Ashlea Troth who have continuously helped me at Griffith University and particularly for their guidance, support and encouragement as I completed my PhD studies. I also wish to acknowledge the support given by my associate supervisor Professor Tom Nguyen, who guided me in the early part of my reseach project, and continued to offer advice after he retired.
My sincere thanks are given to the Vietnam International Education Development (VIED) for giving me the financial support to enable me to study in Australia. Acknowledgement is also extended to the financial support provided by Griffith University. My great appreciation is given to the Management Board and my collegues at Hai Phong University for their valuable support and encouragement during my doctoral study. I am also very grateful to local authorities and enterprises in Ha Noi capital and Hai Phong city, Vietnam, for their helpful comments, support and cooperation during my fieldwork.
Appreciation is expressed to my friends for their help and support and assistance with computer skills, as well as to English HELP service for assistance with language support. Finally, I would like to express all of my heart-felt gratitude to my parents and my younger brother, who have always been with me, encouraging me to complete this doctoral study. vii TABLE OF CONTENTS ABSTRACT. iii STATEMENT OF ORIGINALITY.
vii TABLE OF CONTENTS. viii LIST OF TABLES. xiii LIST OF FIGURES. xv LIST OF MAIN ABBREVIATIONS.1 BACKGROUND AND RESEARCH FOCUS .3 BRIEF REVIEW OF PREVIOUS LITERATURE.1 HRM practices and employee outcomes .2 The RBV approach in HRM studies.4 OVERVIEW OF THE RESEARCH AND SCOPE OF STUDY .6 THE VIETNAM CONTEXT .2 Historical and political context.3 Recent economic history .4 Business culture and the influence of other countries’ approaches.7 OVERVIEW OF THE STUDY .2 FROM PERSONNEL MANAGEMENT TO HRM AND IHRM .2 Human resource management .3 International human resource management.1 Definition of international human resource management.
divergence and country of origin effects on IHRM .3 BACKGROUND: TYPES OF ENTERPRISES IN VIETNAM.1 Economic reform and transition to a market system .2 State-owned enterprises.3 Equitised state owned enterprises.4 Privately owned enterprises .4 PREVIOUS STUDIES OF HRM IN VIETNAM .1 Underlying characteristics of the traditional domestic approach .2 Introduction and diffusion of Western-style HRM .3 Differences regarding general usage and sophistication .4 Differences regarding specific areas of HRM .5 Impact of HRM differences on company and employee outcomes.1 The relationship between HRM practices and enterprise performance.2 The relationship of HRM practices, employee outcomes, and enterprise performance in Vietnam.6 THE RESOURCE-BASED VIEW .1 Definition of RBV.2 Review of the evolution of RBV.3 RBV in HRM research .4 Applicability of the RBV of the firm for the current research .2 Study of ownership types .3 Interview-based methodology .1 Manager and employee perspectives.2 Gaining access to participants for studies on managerial and employee perspectives85 3.3 Sample/ interviewee information .1 Qualitative content analysis and thematic analysis .3 Validity and reliability. FINDINGS OF MANAGER PERSPECTIVES .2 THEME 1 ROLE OF HRM AND HR WITHIN THE ORGANISATION.3 THEME 2: HRM PRACTICES ACROSS ENTERPRISE OWNERSHIP TYPES.1: Recruitment and selection .2: Training and development.4 THEME 3: INFLUENCES OF HRM PRACTICES ON EMPLOYEE OUTCOMES ACROSS COMPANY OWNERSHIP TYPES.1 Impact of recruitment and selection on job satisfaction and employee performance.2 Impact of training and development on job satisfaction and employee performance.3 Impact of performance management on job satisfaction and employee performance.4 Impact of reward system on job satisfaction and employee performance .5 SUMMARY OF MAIN FINDINGS AND FURTHER DISCUSSION. FINDINGS OF EMPLOYEE PERSPECTIVES. EMPLOYEE PERCEPTION OF HR FUNCTION.
RECRUITING AND SELECTING STAFF. Attracting job candidates. Sources of recruitment. Recognition level of employee capabilities in selection across ownership types.
Losing valuable employees to other companies. Dilemma of recruiting and retaining good employees. Relationship between recruitment and selection and employee outcomes. TRAINING AND DEVELOPMENT.Training and development approaches.
Relationship between training and promotion. Relationship between T&D and employee outcomes. Frequency and type of feedback across ownership types. Perceived fairness of performance management.
Employee capability: individual performance or teamwork. Impact of cultural factors on employer-employee relationships across ownership types. The relationship between performance management and employee outcomes. REWARDS AND PAY.
Salary and performance-based-pay. Incentives and bonuses. Promotions as rewards. Relationship between rewards and employee outcomes .6 SUMMARY OF MAIN FINDINGS.
DISCUSSION AND CONCLUSIONS .2 OVERVIEW OF THE RESEARCH.3 OWNERSHIP TYPES AND THE ADOPTION OF HRM PRACTICES.1 Stakeholders’ perspectives on the roles and practices of HRM across ownership types .2 Influences of culture on adoption of HRM practices .3 Adoption, and standardisation vs localisation of HRM practices .4 HRM PRACTICES AND EMPLOYEE OUTCOMES .7 LIMITATIONS OF THE RESEARCH AND SUGGESTED FUTURE DIRECTIONS 213 6. STUDY 1: MANAGER PERSPECTIVES. STUDY 2: EMPLOYEE PERSPECTIVES. DEFINITION OF KEY TERMS.
285 xii LIST OF TABLES Table 2. Number of enterprises operating in Vietnam in 2014. Frequency of various HRM practices studied by different scholars in the context of Vietnam. HRM status across sectors in Vietnam.
Effects of recruitment and selection (R&S) in different types of enterprises. The usage of selection methods across ownership types in Vietnam. Training methods across ownership types. Comparison of compensation and benefit across ownership types.
Empirical evidence of the relationship between HRM practices and firm performance in developed economies. Empirical evidence of the relationship between HRM practices and firm performance in newly industrialised, middle-income and transitional economies. Recent empirical studies of the relationship between HRM practices and enterprise performance in Vietnam. The resource-based view and HRM in transitional economies.
Paradigms used in this HRM research. List of enterprises interviewed in Study 1. List of enterprises interviewed in Study 2. Demographic information of participants in Study 2.
Final themes and subthemes for manager perspectives after combination of two rounds of coding. Themes and subthemes for manager perspectives suggested by the second rater. Final themes and subthemes with agreement of the inter-rater and the researcher for the manager perspectives.