UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS ----------------------ooOoo---------------------- VO TRUNG TINH Critical factors of employee's motivation in manufacturing firms: Evidence from Vietnam ID: MBUS111041 Master of Business and Commerce (Honors) Supervisor: Dr. TRAN HA MINH QUAN HO CHI MINH CITY 02.2013 Critical factors of employee's motivation in manufacturing firms in Vietnam ACKNOWLEDGEMENTS First, Iwould like to express appreciation to some people, who continuously supported and helped to complete this thesis. I am extremely grateful to Dr. Minh Quan Tran Ha on the relentless guide, who has taken the timely guidance and support to help me solve the problems encountered during the implementation of the thesis.
I would also like to thank my colleagues at Wipro Unza Vietnam, and the staffs working in VSIP, AMATA, etc. who helped me in providing the responses to the questionnaire and the helpful comments on the some parts of the study. Finally, I want to express the special thanks and sincere to my family, especially my parents, who were always anxious and continuously encouraged me in difficult times and uninterrupted support material and love. The support helped me enough courage and confidence to be able to firmly overcome difficulties and successful completion of this thesis.
Vo Trung 2 Critical factors of employee's motivation in manufacturing firms in Vietnam ABTRACTS Motivation of employees at workplace was topic mentioned continuously by management of these companies in Vietnam. This thesis aims to specify the key factors affecting to motivation of employees, who has been working in manufacturing firms in Vietnam. By adopting quantitative method, five factors include advancement, salary, working condition, challenge, management were extracted. Moreover, this study also investigated on motivational profiles for some focus viewpoints of employee such as gender, age and material status.
At the end of thesis, some recommendations were drawn to increase the motivation and satisfaction of employees at workplace. Key terms: Key motivation factors, manufacturing firms, motivational profiles. Vo Trung 3 Critical factors of employee's motivation in manufacturing firms in Table of Contents Chapter 1: Introduction.1 Overview about the Vietnamese economic and labor in Vietnam.2 Significance of the research.10 Chapter 2: Literature review and hypothesis.2 Demographics for employee's motivation.1 Roles of demographic in organization.3 Hypothesis and conceptual model.1 Motivation factors and hypothesis.23 Chapter 3: Research method.1 Specify key factors.29 Chapter 4: Data analysis and Results.2 Assessment of measurement of scales.1 Reliability check for measurement scales.2 Validity assessment for measurement scales.3 Assessment for reliability and validity motivation scales.4 Assessment for assumptions of regression.3 Assessment of theoretical model and hypotheses.42 Vo Trung 4 Critical factors of employee's motivation in manufacturing firms in IV.1 Assessment of theoretical model.3Test of hypotheses.4 Extract and rank for motivators in motivational profiles.5 Interpreting the results.49 Chapter 5: Conclusion and recommendation.6Motivation profiles based demographics.3 Limitation and further research directions.63 Vo Trung 5 Critical factors of employee's motivation in manufacturing firms in List of tables TABLE 1. SUMMARY OF HYPOTHESIZES.
LIST OF SOURCES FOR ITEM SCALES. ASSESSMENT THE RELIABILITY OF MEASUREMENT SCALES. RELIABILITY FOR NEW FACTORS. FACTOR LOADING RESULTS.
KMO AND BARTLETT'S TEST. COMPARE FOR ORIGINAL AND REFINED SCALES. SUMMARY FOR CONSTRUCT AFTER RE-ASSESSMENT SCALES. RELIABILITY ASSESSMENT FOR MOTIVATION SCALE.
EFA FOR MOTIVATION. DURBIN-WATSON VALUE. MULTIPLE REGRESSION RESULTS. SUMMARY FOR HYPOTHESIS TESTING.
MOTIVATION PROFILE FOR MALE AND FEMALE. MOTIVATION PROFILE FOR MARITAL STATUS WISE. MOTIVATION PROFILE FOR SUBGROUP OF AGE WISE.48 Vo Trung 6 Critical factors of employee's motivation in manufacturing firms in List of figures FIGURE 1: MASLOW'S HIERARCHY OF NEEDS. TWO FACTORS THEORY.
REGRESSION COEFFICIENT MODEL.45 Vo Trung 7 Critical factors affecting employees’ motivation of manufacturing firms in Chapter 1: Introduction I.1 Overview about the Vietnamese economic and labor in Vietnam Vietnam economic, in recently, been facing to the problem that growth rate of GDP is slow down. Economic growth fell sharply in the period from 2006 to 2011.GDP in 2006 was 8.23% increase was recorded in the following year reached 8.Next two years 2009 and 2010, the GDP growth rate has fallen sharply and bottomed out in 2010 at 5.The economy recovered and the GDP growth rate increased to 6.78 percent before falling to 5.89% as the summary of Le Xuan Nghia (2012).With developing economies such as Vietnam, the GDP growth rate below 7% is indicated for the slow growth and signs of instability in the economy. Three factors such as capitals, labor and productivities contribute the different proposition in the Vietnam economic. The contribution of labor into the growth rate of GDP has slightly decreased in recently year.
According to the statistics on the proposition of factors on the growth of GDP of Bui Trinh (2012 ) and cited by Le Xuan Nghia (2012), the contribution rate of labor factors into growth rate of GDP of Vietnam had decreased about 5% in 2006 to 2010 in comparison with period 2000 to 2005. Total factor of productivity had also gone down deeply. On the other hand, capital factor had become the main factor in the growth of the economy. In developing countries, the economy relies heavily on the development of investment dynamics are easily hurt when economic events occur.
The government and policy makers need to create a driving force for development from the labor factor. Moreover, today, in the era of knowledge-based edge elements and creative labor has become the main factor of competition between economies. The strength of the economy is conducted from power of the enterprises in the economy. To get the strong business and competitive with foreign firms, especially in the context of our country joined the World Trade Organization; Vietnamese firms need to improve further capacity competition and firm innovation in the field of professional activity.
In order to keep pace with the requirements of the new situation, enterprises need to focus on solving the internal problems of the business such as technology, management, labor productivity and especially the need to further improve employee motivation and their retaining. The success of an organization, during the time of history, is developed by the goods relations with employees by fulfill their needs and expectation, in a return, to apply the rules and regulations, work under the standard and achieved goals (Khan, et al. Management has to address and understand employees' needs and expectation, in order to maintain the high growth rate in business. Many Vo Trung 8 Critical factors affecting employees’ motivation of manufacturing firms in scholars had determined many theories and tools to satisfy this aim and help management to build strong relationship with their staffs.Managers discuss how to motivate their employees in order to increase productivity as well as the moral at the workplace.
Each individual is different and motivated differently and is depends on what stage in life as person is at. Motivation has been defined as "the amount of effort that an employee is willing to put into work to accomplish an organizationally valued task" (Phatak, Bhagat & Kashlak, 2005, p.418), but it can be defined as "the processes that count for an individual's intensity, direction, persistence of effort toward attending a goal" (Robbins, 2005, p. Motivation is not something that is observable in the organization ( Phatak, et la 2005) and most managers do not understand what motivates their employees because they do not aware that individuals in the organization has unique motives for working (Hiam, 2003). Motivation is a key organizational concept, organizations are willing to hire and continuously seek motivated employees and managers with ability to motivate others.
Most of people think rewards will motivate people better, but due to culture differences in the world, it is important to recognize that rewards might be valued differently (Francesco & Gold, 2005). Most studies in the past have been conducted on job satisfaction intrinsic work motivation and these studies have focused on specific countries or even specific firms. The outcomes of these studies indicated that there are differences on motivation of employees based on their characteristics such as gender, people color, age, etc. Motivating for key people is a foundation leaded to the success in business of organization.
There are lots of paper and researches over the world on employee motivation. Although the organization has policies to encourage for all employees of the company, managers of firms needs to customize and adjust the policy to adapt with different demographic of employees because they own the differences in characteristics, psychologies and variety of needs. Therefore,a customized HR practices need to be carried out to reach to gaps inunique HR strategyfor many group of employees in organization. Each employee should be encouraged and motivated by different ways and methods.
Kim Dung (2005) figured out six factors to motivate employees who work in small enterprises in Ho Chi Minh City of Vietnam. However, Kim Dung and other scholars has not investigated in different weight of motivating factors affecting to motivationadapted with different demographics of employees in a focused industry,like to manufacturing industry,as well as in Vietnam.Manufacturing industry is one of leading industries in Vietnamese economy in some next years. Therefore, the author chose this industry to conduct further investigation on employee motivation. Moreover, the goal is this Vo Trung 9 Critical factors affecting employees’ motivation of manufacturing firms in study is not only to test motivating factors, but also to investigate the importance of those motivating factors on manufacturing industry in Vietnam.
In response to the above stated problem, this research is conducted with below aims: - To determine key factors for employee in manufacturing firms in Vietnam. - To draw the importance of motivation profiles between each sub group in age, gender and marital status. - To compare and test the difference in motivation profiles within demographic of employees. - To suggest recommendations for HR managersin manufacturing industry to maintain the highest staff’s motivation Regarding to the limited resources and short time frame, the empirical data for the research was collected from the manufacturing firms located in Ho Chi Minh City and provinces around of this city.
This area will be selected because many industrial zones and manufacturing firms located here and they can take a representative role for population of firms belonged to manufacturing industry in Vietnam. During the research, we focus on a arrange of employees as mentioned below - Respondents on this study include labor staffs, officers, supervisors and managers and who hold bachelor and higher. - Only work – related factors will be investigated in this study. Other possible factors (e.
social or cultural factor) are out of scopes of this study.2 Significance of the research To give out the order of some observed motivators focused on sub groups under age, gender and material status. The outcomes research will help the managers in manufacturing firms relocate the HR practices to satisfy with the need of their staffs in the term of optimizing the labor cost and maintain the highest motivation of employees. The results from the present study might have high importance for managers of Vietnamesefirms in terms of choosing best motivation strategy, towards, maintaining the high staff's retain rate.3 Thesis structures This research will be structured on some chapters as the following Vo Trung 1 Critical factors affecting employees’ motivation of manufacturing firms in Chapter 1 contains the overview of this research including the aims, signification of the research. Chapter 2 will review some literatures, develop hypothesis and conceptual model.
Chapter 3 points out the research methodology conducted in this thesis. Chapter 4 will present the data analysis based data collected. Chapter 5 will discuss on the outcome of the research, some implications for HR practices and findings. Vo Trung 1 Critical factors affecting employees’ motivation of manufacturing firms in Chapter 2: Literature review and hypothesis II.1 Literature review II.1 Motivation theories In history, the earliest attempts to determine the motivation started with the concept of hedonism (Charles Darwin, Sigmund Freud): the idea that our behavior is either search for pleasure or staying away from pain (Mills, et al.