Employee motivation in state owned economic corporations in Vietnam

other side, has shown in his research the contemporary characteristics of the SOCs with clear development strategy recommendations. On governmental management of the economic corporations Tran Kim Hao and his counterparts (2015) have resulted in some significant suggestions in their research, including: (i) change people’s mindset on the economic corporations; (ii) eradicate the policy discrimination between the economic corporations and the other kinds of companies; (iii) enforce the adoption of market rules in the establishment and development of the economic corporations of all fields; (iv) readjust the economic corporations’ positions and roles according to the new context; (v) apply the modern, world-class organisational structure and management expertise in the economic corporations; (vi) maintain the consistency of administrative control over the economic corporations, regardless of ownership sources. On the roles of the government on the employee motivation of the economic corporations Le Thi My Linh (2009) has proposed the diverse set of 6 solutions to the small and medium enterprises of Vietnam on human resources management, such as employee motivation-related contents of issuing policies, strategies for human resource development, employee training, career development, talent management, performance appraisal, and corporate culture building. Afterwards, Luu Duc Hai (2015) also came with valuable recommendations, including: (i) redefine the high-quality human resources and high-quality human resources development; (ii) assure that the high-quality human resource is the breakthrough factor in Central Party and Government’s perspectives; (iii) set a common list of criteria in assessing high-quality human resources. 1.1.3 Unsolved issues in the realm of the thesis topic in the published researches The published researches have neither mentioned the profound aspects of employee motivation, especially in the SOCs nor stated the roles of motivation in developing the high-quality human resources nor figured out the new and renovative employee motivation model to bring about the valuable research conclusions for the circumstances of Vietnam. 1.1.4 Focus of the thesis in solving issues through research Theoretical model regarding the research approach to the SOCs of Vietnam; Viewpoints on employee motivation through policy making; Viewpoints of the labour towards the motivation policies; Directions in overcoming the existed shortcomings of the policy-making process and the SOCs' human resource management. 1.2 Directions in solving the research problems of the thesis 1.2.1 Research objectives and research questions of the thesis topic 7 Research objectives: Researching and making clear the theoretical issues and the typical situations in global employee motivation to form the knowledge background as well as the empirical lessons to the Vietnam legislators and the SOCs’ leaders; Researching and making clear the practical situations of employee motivation process in the SOCs of Vietnam to get a correct view of the current issues for better analyses and suggestions for overcoming the shortcomings and weaknesses in the upcoming time; Incorporating the surveying and document-based methods to analyse the data for policy recommendations to the governmental management and corporations’ control over the human resources in SOCs, heading for renovations in employee motivation process therein. Research questions: (1) What are the theoretical issues regarding motives and motivation?; (2) How is the practical situation of the governmental management of employee motivation in Vietnam SOCs?; (3) What are the context, directions and solutions to the renovation of SOCs' employee motivation process in Vietnam? 1.2.2 Research objects and scope of the thesis topic The core objects of the research are in the following aspects: Vietnam SOCs’ human resources management and employee motivation process; SOCs’ employees, especially the office staffs and the direct employees in producing and providing the corporations’ services; the legislation authorities’ labour-policy points of view; globally known employee motivation-centric human resource management models and some chosen countries’ institutions and policies regarding the labour market. 8 Scopes of research Contents: The thesis concentrates on motives and employee motivation (definitions, roles, methods, implementation models) in all related domestic and international researches. Especially, the research approaches the employee motivation issues through the basis of governmental policies. Nevertheless, the practical situations of employee motivation in Vietnam SOCs are also of high priority in the thesis. Timing: The thesis is conducted in the years 2014-2017. However, the practical situations shall be studied in the period of 2009 – 2017 because of the big milestone in pilot establishment, organisation, operation and management of the Vietnam SOCs since the promulgation of the Decree No.101/2009/ND-CP of the Government. Spatial constraints: The SOCs, including parent companies and member companies in the nation within the related circumstances of Vietnam; governments and economic corporations in the continents (Asia, Europe, Africa) for the empirical lessons to Vietnam state governance. 1.2.3 Research approaches and methods Research approach The author has realised the significance of exactly determining the subjects and objects of the employee motivation process. The subjects can be the governments, corporations, and even the professional associations. The objects, on the other side, are the employees of Vietnam SOCs (almost are office staffs and direct employees in providing services and products in the research). Specific research methods Secondary data collection: The thesis uses popular 9 researching methods for working on the secondary sources of documents that have been published (especially, the legal documents), such as description, inductive and seductive analyses. Primary data collection: The questionnaire is for the SOCs’ employees in the cities and provinces (mostly Hanoi and the northern provinces of Vietnam). The sample size is 896. Duration of the survey is 2 years, from 2016 to 2017. All collected data from the survey sample are arranged and analysed manually or by the survey instruments like Google Doc and the SPSS version 22. The detailed results are presented in the Appendices of the thesis. CHAPTER 2. THEORETICAL FOUNDATION OF EMPLOYEE MOTIVATION AND GOVERNMENTAL MANAGEMENT OF EMPLOYEE MOTIVATION IN THE STATE-OWNED ECONOMIC CORPORATIONS 2.1 Briefs on the theoretical foundation of employee motivation 2.1.1 Working motives and motivating employees Motive is a notion that conveys the reasons for people to think and behave in some certain ways. Motive plays the role of explaining the human beings’ actions. The components of employees’ motivation The employees’ motivation consists of 2 major parts: intrinsic and extrinsic ones. The former fosters the employees to work to satisfy the inner self rather than to meet the outside demands of some definite results of the latter. Methods of motivating the employees Researches have shown that the effectiveness can be decided 10 by 3 main factors: working capability; working environment and working motives. Thus, the methods of motivating the employees are also based on the requirements that these factors have set forth. Assessing criteria of the employee motivation outcome The hierarchy of needs of A.Maslow (1943) can be considered one of the most widely accepted theories in explaining the human beings’ motives in the academic world while having few proving evidences. The popularity of this theory is unquestionable with the clear and easy-to-use 5 steps of the proposed hierarchy of A.Maslow. These are also the groups of criteria that help us evaluate the employee motivation outcome in the SOCs of Vietnam. They are classified into these below contents: Physiological factors (PH): monthly/annual income, annual bonus package; working environment; working infrastructure; Safety factors (SA): working safety; long-term working position; Trade Union’s activities; Social factors (SO): colleague relationship; employer relationship; community connection; Self-esteem factors (ES): satisfaction with the current working position; organisational appraisal and recognition; colleagues’ respect; Self-actualisation factors (AC): studying chances; promotion chances; profession suitability. 2.1.2 Typical theories on working motives and employee motivation The hierarchy of needs of Abraham Maslow (1943): considers human beings a crucial socio-economic object always with the yearn for a happy life. The normal life does not only need and stop at the physical needs but it also asks for futher mental needs to be met, including freedom, love and being loved, creation, and knowledge gathering. While the standards of living become higher, 11 the ability to meet the first-tier demands at the bottom of the hierarchy turns out to be much obvious, and as a consequence the other higher demands shall definitely require to be satisfied as well. Two-factor theory of Frederick Herzberg (1959): states that the hygiene factors should be best tackled by establishing a suitable mechanism for alleviating the negative feelings inside the employees’ mind because only they can do that. The possible solutions are arranged in a descending order of: company policies, supervision, industrial relations, working conditions and colleague relationship respectively. Expectancy value motivation theory of David McClelland (1961): each person, regardless of gender, culture or age, shall have demands on achievement, affiliation and power due to their own motives. Those incentives mostly depend on our culture and real-life experiences. Expectancy motivation theory of Victor Vroom (1964): revolves around the 3 key factors: expectancy (Expectation), instrumentality (Outcome) and valance (Reward). Job characteristics theory of Hackman and Oldham (1980): figures out 5 basic contents of job descriptions that lead to 3 positive mental states, motivating the employees to work and contribute better. 2.2 State-owned economic corporations’ employees and stakeholders in motivating the employees in the state-owned economic corporations 2.2.1 State-owned economic corporations and the classification of employees in the state-owned economic corporations 12 Decree No.101/2009/ND-CP of the Government, dated November 2009, has set forth the direction for the establishment of Vietnam SOCs on the basis of previously formed state-owned companies and incorporations. Till January 2018, there are 10 SOCs which are still in operation, including EVN, PVN, Vincomin, VNPT, Vinatex, Viettel, Vinachem, VRG, Bao Viet and Petrolimex. The employees in those SOCs can be categorised into different working positions as below: Managing employees: include both strategic managers and functional managers of the departments of the corporations; Direct employees: include those who have high, medium and low level of professional skills and knowledge due to their own ability and accumulated certificates and/or degrees; Indirect employees: include those who work in the offices and functional departments without managing roles. 2.2.2 Roles of the entities in motivating the employees of the state- owned economic corporations The government with the role of the manger in motivating SOCs’ employees; The government with the role of owner and invester in motivating SOCs’ employees; Strategic managers with the role of motivating SOCs’ employees; Functional managers with the role of motivating SOCs’ employees; Socio-political organisations and unions in the corporations with the role of motivating SOCs’ employees. 2.3 Governmental management of state-owned economic corporations’ employees motivation process Governmental management of SOCs’ employees motivation process should be understood as the act of the government in using 13 instruments like legal documents, under-law documents, or the use of human beings in the managing process to create a motivating working environment for the employees’ creation, activeness and contributions, heading towards better business performance results in the corporations. 2.4 International experiences of some governments on the economic corporations’ employee motivation and lessons learnt for Vietnam German case - Rule-abiding and procedure-following characteristics have been shown in the German policy on the labour market. - At a certain economic development phase, the countries normally face with the aging population. At that time, a possible solution that can be adopted is to complement the domestic human resources with experienced, skilled and healthy labour from the outside of the countries. South African case - Inequality in recruiting employees that bases on skin color, gender, religious faith or health conditions shall not be acceptable in a modern and civilised labour market. - The legislators should frequently supervise and revise the impacts of the policies regarding the labour market to find out the unbeneficial groups of employees for better compensation. Chinese case - Reducing the scope of the businesses of the state-owned enterprises is an inevitable tendency of development in the world. - Centralised policy-making and planning system regarding 14 labour issues hinders the development of the market greatly. - The reforms in the labour-related policies can only be implemented if the system of the length of service is replaced by the objective system of performance-based and competency-based appraisal. CHAPTER 3. STATUS QUO OF EMPLOYEE MOTIVATION AND GOVERNMENTAL MANAGEMENT OF EMPLOYEE MOTIVATION IN THE STATE-OWNED ECONOMIC CORPORATIONS 3.1 Overview of the practical situation of labour and employee motivation in the state-owned economic corporations in Vietnam 3.1.1 Overview of Vietnam state-owned economic corporations Production: Heavy industry: EVN, Petrolimex, PVN, Vinachem, Vinacomin and VRG; Service – Information – Finance: Bao Viet, Viettel and VNPT; Light industry: Vinatex. Market share: In Vietnam market, we can have a certain statement on the leading roles of the SOCs in almost all of the main businesses that they are working in. PVN, Viettel or VNPT are the ones with vast locations of business with internationalised orientations. On the contrary, some other corporations have not developed the international market up to their potential. Finance: Viettel and PVN have emerged as the SOCs with the most positive financial status among the Vietnam SOCs at the moment. They have earned high revenue rates and high ratios of profit/revenue throughout some recent years. Petrolimex, EVN and Vinacomin, on the other side, are the ones with remarkably high revenues but with low profit/revenue ratios, which are not up to their 15 potential. 3.1.2 Practical situation of labour and employee deployment in the Vietnam state-owned economic corporations PVN, Viettel are the two SOCs in Vietnam with the highest average income for the employees. On the contrary, VRG, Vinatex, Petrolimex, Vinachem and Vinacomin are in the other end of the list with the lowest levels of financial compensation to their staff. The middle group, including EVN, VNPT and Bao Viet, are with the employees’ average income of 12 – 20 million VND per month. 3.1.3 Practical situation of methods and models in employee motivation of the Vietnam state-owned economic corporations The methods of employee motivating in the SOCs have been merely the right and adequate applications of labour-related laws and the randomly self-generated ideas of the business leaders (senior and middle), whereas the community of the employees is let to develop naturally without any clear directions of the companies. 3.1.4 Practical situation of the roles of the entities in motivating the employees in Vietnam state-owned economic corporations The Government: mainly concentrates on the labour-market- related policy-making role; The strategic leaders: mainly conduct their orientation process through the subordinate departments/divisions; The functional managers: mainly take the instructions from the higher level of management into practice; The socio-political organisations: mainly carry out their regulated supervising roles ineffectively over the employee motivation process. 3.1.5 Assessment of employee motivation results of Vietnam state- owned economic corporations 16 On physiological needs; on safety needs; on social needs; on self-esteem needs; on self-actualisation needs 3.2 Analysis of the pratical situation of governmental management of employee motivation process in the Vietnam state-owned economic corporations 3.2.1 Analysis of governmental policies on labour motivation in Vietnam Governmental policy on wage system and infrastructure: Labour Code 2012; Law on cadres and civil servants, No. 22/2008/QH12; Law on officials, No.58/2010/QH12; Decision, No.1055/QD-TTg; Decree, No.49/2013/ND-CP; Decree, No.51/2016/ND-CP; Decision, No.58/2015/QD-TTg; Law on Enterprises 2014; Decree, No.69/2014/ND-CP; Decree, No.149/2013/ND-CP; Decree, No.101/2014/ND-CP; Law on thrift practice and waste combat, No.44/2013/QH13; Law, No.84/2015/QH13. Governmental policy on job security, labour safety and insurance: Labour Code 2012; Law on social insurance, No.58/2014/QH13; Decision, No.2281/QD-TTg; Decision, No.05/QD-TTg; Law on occupational safety and health, No.84/2015/QH13; Circular, No.07/2016/TT-BLDTBXH; Decree, No.39/2016/ND-CP; Decree, No.44/2016/ND-CP; Law, No.46/2014/QH13; Decree, No.105/2014/ND-CP; Law on employment, No.38/2013/QH13. Governmental policy on relationship with colleagues, employers and community: Law on Trade Union, No.12/2012/QH13; Labour Code 2012; Decree, No.60/2013/ND-CP; Decree, 17 No.91/2015/ND-CP; Law, No.69/2014/QH13. Governmental policy on commendation and career path: Law on emulation and commendation, No.15/2003/QH11; Decree, No.91/2017/ND-CP; Decree, No.91/2015/ND-CP; Decree, No.87/2015/ND-CP; Labour Code 2012. Governmental policy on study chances for knowledge improving and suitable deployment of human resources in terms of profession and degree: Decision, No.707/QD-TTg; Decree, No.69/2014/ND-CP; Labour Code 2012; Law on vocational education, No.74/2014/QH13. 3.2.2 Analysis of employees’ assessment of motivation process of the Vietnam state-owned economic corporations Sample description: The research on practical situation of employee motivation in Vietnam SOCs involves the online survey with 896 staff who are working for 1 of the 10 SOCs. Multivariate regression analysis of SOCs’ employee motivation: The aim of this part is to conduct an anlysis of the collected data from the SOCs’ employees, using the techniques of multivariate regression to figure out the connection between dependent variable, Employee Motivation Status (EMS) and other independent variables. The EMS variable has been brought about objectively by counting the average of the data that the employee respondents have put into the form to describe the levels of motivation that they are having. This way of calculation has helped avoid the subjectivity in asking the repondents about their own ideas on their levels of being motivated after what have been done by the SOCs to them. 18 At first, the credibility of the questions is measured through the Cronbach’s Alpha (α) testing method, in which 21 credible tested variables are kept. Then, the exploratory factor analysis (EFA) has been deployed by using the Principal Component Analysis in combination with Varimax rotation at the Eigenvalues 1. The following multivariate regression model is used to analyse the Vietnam SOCs’ employee motivation: EMS = β0+ β1PS31+ β2SE12+ β3PS23+ β4SO21+ β5PS33+ β6ES32+ β7SE32+ β8SE33+ β9ES31+ εi In which, β0, β1, β2, β3, β4, β5, β6, β7, β8, β9 are the constant regression coefficients; and εi is residual (a random independent variable, conformed to a standard distribution with an average of 0 and a constant variance of σ2). After the SPSS analyses, we have R2 = 0,932; Sig. = 0,000 < 0,05 and all of the VIF <10. Therefore, we come up with a final formula below: EMS = 0.239PH31 + 0.056SA12 + 0.230PH23 ─ 0.025SO21 + 0.18PH33 + 0.208ES32 + 0.14SA32 + 0.185SA33 + 0.177ES31 3.3 General assessment of employee motivation and governmental management of employee motivation in the Vietnam state-owned economic corporations 3.3.1 Achievements Working environment with secured occupational safety; Job security has been maintained; Trade Unions’ activities are highly acknowledged; Privacy and private opinions of colleagues are respected 3.3.2 Shortcomings, weaknesses and causes Employees’ worries about their total income;; Lack of 19 creative working environment and recreational venues; Lack of determination in setting up the business strategies; Employees’ little concern about the highest levels of needs 3.3.3 Unsolved issues for the upcoming time The income of the SOCs’ employees needs to be improved; there is an urging need of a professional model in motivating the employees of the enterprises; there should be an exclusive mechanism with long-term vision for the employee motivation issues in the SOCs; there needs a clear career path to foster the personal development of the employees. . CHAPTER 4. DIRECTIONS AND SOLUTIONS TO EMPLOYEE MOTIVATION AND GOVERNMENTAL MANAGEMENT OF EMPLOYEE MOTIVATION RENOVATION IN THE STATE-OWNED ECONOMIC CORPORATIONS IN THE UPCOMING TIME 4.1 The context of employee motivation in Vietnam state-owned economic corporations and opportunities and challenges to the process towards 2030 4.1.1 The context of Vietnam state-owned economic corporations and potential development towards 2030 In about more than 10 years, we cannot ignore the possible impacts of the Industry 4.0 on this core type of state-owned businesses. With a vision toward 2030, the SOCs need to consider all of the inside and outside challenges to their production and businesses to overcome if they do not want to stay backward. 4.1.2 Forecasting the labour demands of Vietnam state-owned economic corporations towards 2030 20 As per calculated in the Table 4.1, if we assume that the annual reduction in the number of employees is of 1.6% (between 2016 and 2015), we have the figures for 2020, 2025 and 2030 correspondingly. However, the quality of these employees will increasingly go up for the governmental directions in educating the high-quality human resources, so the motivating and compensating tasks then will become much more difficult and complex rather than becoming easier while the number has gone down. Table 4.1 SOCs’ employee number forecast toward 2030 Unit: Person No. Corp. 2015 2016 2020 2025 2030 1 PVN 59,122 60,000 56,251 51,893 47.872 2 Petrolimex 26,638 26,366 24,719 22,803 21.037 3 Vinacomin 117,000 110,631 103,719 95,683 88.269 4 Viettel 25,000 25,835 24,221 22,344 20.613 5 VNPT 39,578 39,198 36,749 33,902 31.275 6 VRG 92,552 90,000 84,377 77,839 71.808 7 Vinatex 85,588 85,979 80,607 74,362 68.600 8 EVN 104,616 106,000 99,377 91,677 84.574 9 Bao Viet 5,467 5,618 5,267 4,859 4.482 10 Vinachem 27,000 23,909 22,415 20,678 19.076 Total 582.561 573,536 537,701 496,040 457,606 N.B. Data have been counted due to the current ratio between 2015 and 2016 (on the assumption of an equal annual reduction of 1.6%). Source: Author’s compilation (2018) 4.1.3 Opportunities and challenges to the employee motivation process in Vietnam state-owned economic corporations in the 21 upcoming time Opportunities/Challenges On meeting physiological needs; on meeting safety needs; on meeting social needs; on meeting self-esteem needs; on meeting self- actualisation needs 4.1.4 Opportunities and challenges to the renovation of governmental management of employee motivation in Vietnam state-owned economic corporations in the upcoming time Opportunities: A clear legal framework on labour and labour market has been formed with motivation-related conte