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Improving employee motivation in Katolec Vietnam Corporation”

ACKNOWLEDGEMENT

I would like to express my sincere thanks to my supervisor, PhD Dao Thi
Thanh Lam, who guided me much during the thesis’s implementation.
I also send the special appreciation to Vietnam-Belgium program
professionals at National Economic University who provided me with the
practical lecture and knowledge to complete this thesis.
My special thanks are sent to Katolec Vietnam Corporation Board of
Managers, all managers and staffs for the willingness to works with me during
the progress of the research which is the most important factor in determining my
success.
Last but not least, I want to express my deeply thanks to my classmates and
my family who have given me enthusiastic to complete this final project.


EXECUTIVE SUMMARY
Katolec Vietnam Corporation (KAV)-100% Japanese capitalized production
company was established in 2005, specializing in producing the printed circuit board
for Canon Vietnam. KAV is always assessed to be the good company with the high
quality products, well-trained employees by its customers. However, in recent two
years, KAV has faced with some difficulties in human resources management: high

turn-over rate and low commitments. The KAV’s turn-over rate is approximate 35%
while other peer company, this rate is only on and about 10%. This results in low
productivity, unstable workforces. Thus, finding out the main causes and solutions is
a priority task for BOM in KAV.
The objectives of this thesis are:
- Analyze the current motivating employees performance in KAV
- Find out the main reasons of de-motivation and motivation in KAV
- Make suggestions to improve employee motivation in order to attract,
maintain and motivate employees.
In order to answer three above questions, the author use three theories as
background foundations: (1) Herzberg’s two-factor theory of motivation; (2)
Maslow’s Theory on hierarchy of need; (3) J’Stacey’s Equity Theory and indepth interview with current and former employees to design survey on current
employee motivation:. The survey is conducted to 87 people in KAV (takes
78.38% of population). In general, employee motivation in KAV is not good.
Some reasons are:
* Working environment and company factors (Hygience Factors):
- The salary is not competitive and effective in the current amount of salary,
salary increasing policy, in comparison in employee’s contribution.
- Welfare and other benefit in KAV is not much good. Although the average
of employee satisfied level about welfare and other benefit is normal, in the
interview, many employees complain that there is no difference with other peer
companies.
- The working condition is not very good. Due to far location, company bus
is one inconvenience to employees. The average satisfied score for working
condition is under than normal level (average satisfied score for company bus is
2.67, for office equipments is 2.69, for stationary is 2.80)

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- Ineffective company policies like performance appraisal, wrong
recruitment, inadequate training policy…leads to wrong assignment, bias in
performance assessment. They demotive employees much.
* Motivation factors:
- One of de-motivative factor is recognition and reward. Reward is
considered as one way of motivating employees. Employees feel happier,
enthusiastic, interested in their jobs when they are recognized by superiors and
other colleagues. However, there is hardly reward policy. KAV managers have
not realized the importance role of reward to encourage employees.
- The work is not really interesting and challenging because of doing similar


daily job. Almost employees feel bored with their job and they desire to have
more challenging job with higher responsibility.
Besides of some de-motivation factors, there are some good motivation
factors in KAV:
- Management policy is primarily quite good. Mission of transferring
management authority from Japanese managers to Vietnamese manager is a
priority policy in KAV. This is an incentive for employees to try continuously for
further development in their career.
- Good internal relationships among employees create a good environment
to make employees feel convenient in working; give them more energy to
overcome difficulties.
This final project suggests some solutions for KAV to improve employee
motivation:
- Firstly, improving performance appraisal process is an important
solution. Good performance appraisal not only makes employee feel satisfied
with their contribution to company but also supports the organization to review
its capacity, helps it to direct human resource management such as hiring,
promoting, training, helps employee improve their working performance.
- Secondly, improving the salary and other benefit system is the priority
solution. Any unclearness in salary policy and payment policy leads to demotivating employees. Currently, KAV employees do not take care their works or
take responsible because they realize that even they try their best, they are not
recognized well. Therefore, KAV employee performance will become worse and
worse. Consequently, the organization can not reach its previously-agreed goals.
For the above reasons, building an effective salary system contributes on
encouraging employees and makes them engagement with company.
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- Thirdly, establishing effective recruitment policy ensures quality of
human resources, increases the effectiveness in task assignment, raises
employee responsibility.
- Fourthly, improving working condition, especially about daily
transportation means and office equipments helps employee feel more convenient
in working.
- Fifthly, continual creating interesting and challenging job by job
rotation, job enlargement and job enrichment limits de-motivations, eager
employees to improve themselves to adapt new job requirements, to bring them
joys in works. Moreover, this is chance for all employees to accumulate their
experience.
- Finally, recognition and reward policy is necessary to all of company.
Appropriate recognition and reward policy have invisible value to employees. It
can be financial or non-financial reward. Both of them make employee find that
they are important to company and in any time, they also try their best for
organization.

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TABLE OF CONTENTS

ACKNOWLEDGEMENT..................................................................................1
EXECUTIVE SUMMARY.................................................................................1
TABLE OF CONTENTS....................................................................................4
ABBREVIATION................................................................................................7
LIST OF TABLE.................................................................................................8
LIST OF FIGURE...............................................................................................8
INTRODUCTION...............................................................................................9
1. Rationale of the thesis...................................................................................10
2. Research objectives.......................................................................................10
3. Research questions........................................................................................11
4. Scope of research...........................................................................................11
5. Research methodology..................................................................................11
5.1. Research process.....................................................................................11
5.2. Data collection.........................................................................................13
5.2.1. Secondary data...................................................................................13
5.2.2. Primary data.......................................................................................13
6. Struture of the thesis.....................................................................................14
CHAPTER I: THEORITICAL FRAMEWORK ON MOTIVATION..........15
I.1. Definition of motivation and employee’s motivation................................15
I.1.1. Motivation..............................................................................................15
I.1.2. Motivation and Satisfaction....................................................................15
I.1.3. Employee Motivation.............................................................................15
I.1.4. The role and the importance of employee motivation.............................15
I.1.4.1. Motivation is the key of employee retention....................................15
I.1.4.2. Motivation is the key of performance improvement........................16
I.2. Employee Motivation Theory....................................................................16
I.2.1. Herzberg’s two-factor theory of motivation............................................17
I.2.1.1. Hygience Factors.............................................................................17
I.2.1.2 Motivation Factors............................................................................19
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I.2.1.3 The combination of Hygience factors and motivation factors...........20
I.2.2. Maslow’s Theory on hierarchy of need...................................................20
I.2.3. J’Stacey’s Equity Theory........................................................................22
I.3. Relationship between HRM and employee motivation............................23
CHAPTER II: OVERVIEW ABOUT KATOLEC VIETNAM
CORPORATION (KAV)...................................................................................24
II.1. General information about KAV..............................................................24
II.1.1. Company information............................................................................24
II.1.2. Scope of Business..................................................................................24
II.1.3. Company vision, misssion and development strategy...........................24
II.1.3.1. Vision.............................................................................................24
II.1.3.2. Mission...........................................................................................24
II.1.3.3. Development strategy.....................................................................24
II.2. KAV’s organization and Human resources structure.............................25
II.2.1. KAV’s organization structure................................................................25
II.2.2. KAV’s human resources structure.........................................................27
II.2.2.1. KAV’s human resources structure by Sex.......................................27
II.2.2.2. KAV’s human resources structure by qualification.........................28
II.2.2.3. KAV’s human resources structure by Age......................................29
CHAPTER III: CURRENT EMPLOYEE MOTIVATION SITUATION
AND DEMOTIVATION FACTOR AT KAV...................................................31
III.1. Current employee satisfaction in KAV...................................................31
III.2.Current Two-Factor Theory in KAV.......................................................32
III.2.1. Current Hygiene factors.......................................................................34
III.2.1.1. Compensation and other benefit....................................................34
III.2.1.2. Supervision Technical...................................................................41
III.2.1.3. Working condition.........................................................................42
III.2.1.4. Interpersonal relation....................................................................44
III.2.1.5. Company policy and administration..............................................46
III.2.2. Current Motivation factors...................................................................51
III.2.2.1. Recognition and Achievement.......................................................51

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III.2.2.2. Promotion policy...........................................................................53
III.2.2.3. Growth opportunity.......................................................................54
III.2.2.4. Workitself......................................................................................55
III.2.2.5. Responsibility...............................................................................57
III.2.3. Conclusion on research result..............................................................59
III.2.3.1. The de-motivative factors in KAV.................................................59
III.2.3.2. The motivative factors in KAV......................................................60
CHAPTER IV: RECOMMENDATION FOR KAV TO IMPROVE
EMPLOYEE MOTIVATION...........................................................................61
IV.1. KAV’s orientation for human resources management...........................61
IV.2. Recommendations for KAV.....................................................................61
IV.2.1. Improve performance appraisal system................................................61
IV.2.2. Improve salary and other benefit system..............................................64
IV.2.3. Establish an effective recruitment........................................................65
IV.2.4. Improve working condition..................................................................66
IV.2.5. Create more interesting and challenging job........................................67
IV.2.6. Make a more effective reward and recognition policy..........................69
CONCLUSION..................................................................................................70
REFERENCE....................................................................................................71

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ABBREVIATION

KAV

Katolec Vietnam Corporation

BOM

Board of Managers

EPE

Export processing enterprises

HRM

Human Resources Management

HR

Human Resources

HO

Head Office

IT

Information Technology

GD

General Director

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LIST OF TABLE
Table 1.1:

The research methodology..............................................................13

Table 2.1:

KAV’s human resources structure by Sex.......................................27

Table 2.2:

KAV’s human resources structure by qualification.........................28

Table 2.3:

KAV’s human resources structure by Age.......................................29

Table 3.1:

The current employee satisfaction in job.........................................31

Table 3.2:

The importance level of hygience and motivation factors...............32

Table 3.3:

The average importance level of hygience and motivation factors..33

Table 3.4:

The employee satisfied level of current salary................................34

Table 3.5:

The current average salary compared with other peer company.....35

Table 3.6:

Long service award.........................................................................36

Table 3.7:

The employee satisfied level of welfare and other benefit..............37

Table 3.8:

The employee satisfied level of current salary increasing policy....38

Table 3.9:

The survey result of supervision techinical.....................................41

Table 3.10: The employee satisfied level of working condition.........................42
Table 3.11: The employee satisfied level of company policy and administration....46
Table 3.12: The employee satisfied level of recruitment policy.........................48
Table 3.13: The employee satisfied level of performance appraisal...................50
Table 3.14: The employee satisfied level of recorgnition and achievement.......52
Table 3.15: The employee satisfied level of promotion policy..........................53
Table 3.16: The employee satisfied level of growth opportunity.......................54
Table 3.17: The employee satisfied level of work itself.....................................55
Table 3.18: The current level of job tention/ pressure........................................56
Table 3.19: The employee satisfied level of responsibility................................57

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LIST OF FIGURE

Figure 1.1:

Research process.................................................................................12

Figure 1.2:

The combination of hygience and motivation factors.........................20

Figure 2.1:

KAV’s human resources structure by Sex...........................................27

Figure 2.2:

KAV’s human resources structure by qualification.............................28

Figure 2.3:

KAV’s human resources structure by Age...........................................29

Figure 3.1:

The current average employee satisfied level of welfare and other
benefit.................................................................................................37

Figure 3.2:

The current average employee satisfied level of salary increasing
policy..................................................................................................39

Figure 3.3:

The current average employee satisfied level of reward policy..........40

Figure 3.4:

The assignment taks............................................................................42

Figure 3.5:

The current average employee satisfied level of working
condition.............................................................................................44

Figure 3.6:

The current internal relation...............................................................45

Figure 3.7:

The average score of employee satisfied level of company policy
and administration..............................................................................47

Figure 3.8:

The average score of employee satisfied level of recruitment
policy..................................................................................................49

Figure 3.9:

The percent of assessment of effectiveness of training programme
............................................................................................................50

Figure 3.10: The average score of employee satisfied level of performance
appraisal..............................................................................................50
Figure 3.11: The average score of employee satisfied level of promotion and
growth opportunity.............................................................................55
Figure 3.12: The average score of employee satisfied level for work itself and
Job pressure........................................................................................57
Figure 3.13: The percent for suitability of section responsibility............................58

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INTRODUCTION
1. Rationale of the thesis
Human resources is in any era always regarded as company’s valuable
property creating value of company. Employee performance affects the survival,
competition ability and productivity of each organization. Therefore, motivating
employee is necessary for any organization. When being motivated, employee can
improve their performance and as the results, the organization can reach its goals.
Katolec Vietnam Corporation company (hereafter referred as “KAV”)-100%
invested Japanese capitalized company, was established in 2005 with the mission
to provide best quality electronic parts for electronic applications. In spite of
highly respecting role of employees to success or failure of company, human
resources management (HRM), especially motivating employees has been
received a little attention from managers. Recently, KAV faces some difficulties
in human resources: high turn-over rate; low commitment. This affects much its
production activity.
Since 2008, the turn-over rate in KAV has increased rapidly. The rate is
approximate 35% while other company is just 10%.
By the in-depth interview with some former employees, the main reasons
for leaving KAV are: Their contributions are not recognized by managers, the
treatment is unfair. Employees with good performance, high responsibility are
under-evaluated by managers, even their salary is lower than others who have
good relationship with managers.
On the other hand, KAV do not have good benefits to employees.
Employees feel uncomfortable when working. Unclear performance appraisal
makes them more dissatisfied. Thus, they only care about their own
responsibilities, not concern much about the company’s objectives or company’s
problems.
The author wish to research and analyse the main reasons leading to demotivation of KAV employees and suggest some solutions to improve the
employee motivation. From this view, the topic “Improving employee motivation
in Katolec Vietnam Corporation” was chosen.
2. Research objectives
The objectives of research are:
-

Analyzing the current employees motivation situation and practice in
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KAV
-

Finding out the main reasons of de-motivations and motivations in KAV

-

Making suggestions to improve employee motivation in order to attract,
maintain, and motivate employees.

3. Research questions
-

How is the current motivation policy in KAV?

-

What are the main roots of de-motivative and what are the important
levels of motivative factors in KAV?

-

What are effective solutions for KAV to improve employee motivation?

4. Scope of research
- Firstly, the thesis applied three theories of employee motivation: The two
factors theory of Heizberg; The Maslow hierarchy of need and the Equity theory
of J.Stacy.
- Secondly, the survey was conducted to employees which are staff upward
(administration and management staffs: 111 people) although number of
workforce in KAV is more than 800 people including workers. The final project’s
objective is to make recommendations for improving motivation of employees at
administration and management staffs.
- Thirdly, the research information about KAV is collected in 2008 to 2010
period.
5. Research methodology
5.1. Research process
- Step 1: Collect secondary data to analyze the theory of two factors
- Step 2: Collect the secondary data about KAV
- Step 3: Make in-depth interview with the current employees and manager,
and interview some of former employees.
- Step 4: Find out the de-motivation factors
- Step 5: Design questionnaires based on collected interview information
- Step 6: Implement the survey with chosen employees
- Step 7: Analyze and assess the results
- Finally, suggest some solutions to improve employee motivation

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Step 1: Collect secondary data to

General background on

analyze the theory of two factors

employee motivation

Step 2: Collect secondary data
about KAV

Overview KAV
requirements on
employee motivation

Step 3: Perform the in-depth
interview

Step 4: Find out the de-motivative
factors

Step 5: Design questionnaires

Current status of
employee motivation in
KAV
(Chapter III)

Step 6: Implement the survey

Step 7: Analyze and assess the
result

Recommendation

Step 8: Suggest the solutions

(Chapter IV)

Figure 1.1: Research process
Source: Author’s analysis
5.2. Data collection
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The final project is used both of secondary data and primary data.
5.2.1. Secondary data
The secondary data is taken from both of internal data and external data.
- Internal data: human resource organization, human resource structure,
turn-over rate …
- External data: benefit structure, salary increasing policy from other
company…
5.2.2. Primary data
- The primary data was collected from September to December, 2010.
Quantitative and qualitative methods were used with primary data collection to
analyze the current employee motivation and determine the de-motivation.
- Primary data was collected by two ways: in-depth interview and survey.
+ In-depth interview: to have a general look about the current employee
motivation, and point out the main reasons of high turn-over in KAV. This is
done by interview to 7 people including current and former employees.
+ Survey (Quantitative methods): to have more detailed data to analyse
main causes by questionnaire survey. The survey was conducted to 111 people,
but the valid survey result was 87 people. The survey questionnaire was designed
based on the theories/ models that the author selected for this final project. They
include multi-choice, yes/ no and open question.
Table 1.1: The research methodology
Respondent/
Interviewee
Former and
current
employees
Employees in
every
department

Data collecting
methods

Number of
respondents

Instrument

Type of information

Interview
guideline

The policy of VDC for
employee motivation;
The main root of
leaving KAV

7
In-depth
Interview

(includes: 2 managers;
2 supervisors and 3
staffs)

Quantitative
methods
(survey)

87
(includes: managers;
supervisors and staffs)

Employee's assessment
Questionnaire about KAV employee
motivation in practice
Source: Author’s analysis

6. Structure of the thesis

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This final project includes four chapters:
- Chapter I: Theoretical framework on motivation: This chapter
provides the basic definition of motivation, the difference between motivation
and satisfaction, the definition of employee motivation and its role in employee
retention, three theories on employee motivation: (1) Herzberg’s two-factor
theory of motivation, (2) Maslow’s theory on hierarchy of need, (3) J’Stacey’s
equity theory.
- Chapter II: Overview about Katolec Vietnam Corporation: general
introduction about KAV, KAV’s organization and human resources structure.
- Chapter III: Current employee motivation and de-motivation factors.
This chapter forces on analyzing the current employee motivations based on the
survey results and the factors of Herzberg two factor theory. According to
analysis results, the de-motivative factors will be drawn to find suitable solutions
in the next chapter.
- Chapter IV: Recommendations for KAV to improve employee
motivations: Based on the de-motivative factors in chapter III, some solutions
are suggested to BOM in KAV.

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CHAPTER I: THEORITICAL FRAMEWORK ON MOTIVATION
I.1.Definition of motivation and employee’s motivation
I.1.1. Motivation
Motivation can be defined as that which energizes, directs and sustains
human behaviour. In HRM, the term refers to a person’s desire to do the
best possible job or to exert the maximum effort to perform assigned tasks.
An important factor of motivation is that it is behaviour directed toward a
goal (Luis R.Gómer-Mejía et al; 2007; Managing Human Resources (5 th);
Pearson International Edition)
Therefore, it is essential for managers to have a basic understanding of work
motivation because highly motivated employees are more likely to produce a
superior-quality products or services than employees who lack motivation.
I.1.2. Motivation and Satisfaction
Someone thinks that employee motivation is employee satisfaction. In fact,
there is difference between two terminologies. Motivation is considered as
intrinsic power for someone to work with high effort to achieve the target
while employee satisfaction is used to describe how employee is happy,
contented and fulfilling their desires and needs at work. Therefore, it might
be stated that motivation is a root of employee satisfaction.
I.1.3. Employee Motivation
There are some different definitions of employee motivation. However, the
author chooses the definition in "Contemporary Management" by Gareth R.
Jones and Jennifer M. George. Employee motivation is defined as the
psychological forces that determine the direction of a person's behavior in an
organization, a person's level of effort, and a person's level of persistence. Effort
is how hard people work. Persistence refers to whether, when faced with
roadblocks and obstacles, people keep trying or give up. When employees follow
an efficient and effective direction, contribute high levels of effort and are
persistent, then high motivation occurs. (Ehow)
I.1.4. The role and the importance of employee motivation
I.1.4.1. Motivation is the key of employee retention
Motivation is regarded as the readiness, determination of employee to work
with high effort to achieve the organization’s target and it depends on goal
achievement possibility to satisfy individual needs. An employee is willing to

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stay to work for one company only when he feels happy with his job and satisfied
with his achievements. If not, the dissatisfaction will be easily happened and the
leaving company is unavoidable. Actually, creating motivation is preventing the
dissatisfaction, preventing employee to leave the company.
I.1.4.2. Motivation is the key of performance improvement
There is an old saying that you can give a horse to water but you cannot force
it to drink only it’s thirsty-so with people. They will do what they want to do or
otherwise motivated to do. Whether it is to excel on the workshop floor or in the
‘ivory tower’ they must be motivated or driven to it, either by themselves or
through external stimulus.
Are they born with the self-motivation or drive? Yes or no. If no, they can
be motivated, for motivation is a skill which can and must be learnt. This is
necessary for any business to survive and succeed.
Performance is considered to be a function of ability and motivation, thus:
Job performance = f (ability) (motivation)
(Accel team; Frederick Herzberg-Two factors Hygience and Motivation theory (online).
Available from: http://www.accel-team.com/human_relations/hrels_05_herzberg.html)
This statement shows the relation between motivation and job
performance. If employees have motivation, they will work more effectively,
improve the quality of work or might contribute more of their creativity and
initiative to the job.
Ability in turn depends on education, experience and training and its
improvement is slow and long process. On the other hand, motivation can be
improved quickly. (Employee motivation, accel-team.com/motivation)
Realizing the importance of employee motivation, many researches have
been conducted and given out valuable motivation theories.
I.2. Employee Motivation Theory
There are several theories about employee motivation. In this thesis, the
author chosen three the theories to analyse employee motivation factors:
Herzberg’s two-factor theory of motivation; Maslow’s hierachy of need and
J.Stacy’s equity theory. Herzberg’s two-factor theory covers board factors of
organization such as working environment, company policy … and motivation
factors which company can improve while Maslow’s hierachy of need focus on
individual needs which company should understand employee’s needs to
encourage them for greater effort. The author also choose J.Stacy’s equity theory
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indicate the equity between input and output because the author as insider find
that inequity between input and output exists in KAV. As the title of this thesis,
the objective of this thesis is to suggest some solutions to improve the employee
motivation in KAV so the author consider Herzberg’s two-factor theory of
motivation as the core theory to analyse employee motivation in KAV
I.2.1. Herzberg’s two-factor theory of motivation
Frederick Iving Herzberg (1923-2000), an American psychogish, is famous
for introducing “job enrichment” and “two factor theory”. Two factor theory was
based on around interview with about 200 American accountants and engineers
in Pittsburgh, Pennesylvania who were asked about what made them feel bad
their job (dissatisfier) and what made them feel good their job (satisfier). Based
on the interview’s result, he divided into two main factors which affect to
employee feelings: Hygience factor and Motivation factor.
The first factor is hygience factor. Hygience factors are a set of factors make
people unsatisfied at work. It is something that preserves and promotes the
physical, mental and emotional health of an individual. The lack of it creates a
dissatisfing situation. Hygience factors includes: salary, supervision-technical,
working conditions, inter-personal relations, company policy and administration.
The second factor is motivation factor. Motivation factor is a set of factors
make people satisfied. Motivation instrincally promotes satisfaction and
according to Herzberg without motivation, employees perform their job as
required but with them they will probably perform to the best of their ability,
have creativity and commitment in employees.
Two factors always exist in any individual and their effect to each
individual is also different level. Some people are hygience seeker, some people
are motivation seeker. In the managing position, managers should understand and
find out what motivate their employees.
I.2.1.1. Hygience Factors
Hygience factors include salary, supervision-technical, working conditions,
Inter-personal relations, company policy and administration.
- Salary:
This category is attributed as current wage, received unexpected wage or
not received expected increased, received wage increase less or later than
expected, wage compared favourable or unfavourable with other doing the same
or similar job (Frederick Herzberg, 2008, p.114)

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- Supervision-technical
This category mentioned competence or incompetence; fairness or
unfairness of supervisors; supervisor’s willingness or unwillingness to teach
subordinates; supervisor’s ability to keep things humming smoothly and
effectively.
- Working conditions
Working condition is one of important factors to create employee
motivation. This includes the physical conditions of work, the amount of work,
the facilities available for doing the work. Adequacy or inadequacy of
ventilation, lighting, tools, space, and other environmental characteristics would
be mentioned here.
- Inter-personal relations
Inter-personal relations consist of three main categories: interpersonal
relation with superiors; interpersonal relation with subordinates and interpersonal
relation with peers. Interpersonal relation with superiors is friendly or unfriendly
relations with superiors; sympathetic or unsympathetic thinking of superior;
superior’s support or not support in job; attitude to listen suggestion from
subordinate. Interpersonal relation with subordinates is good or poor relation
with subordinates; respects from subordinates to you. Interpersonal relation with
peers includes relations with your colleagues in your department with others in
other departments. Good co-operation with superiors, subordinates and peers is
the key to reach your expected target and fulfill your task.
When Herzberg studied about the inter-personal relations, he just mentioned
three main above categories. But, nowadays, the relations with client and
partners are also discussed in hygience factor.
- Company policy and administration
This mentioned two kinds of over-all company policy and administration
characteristics. One involved the acdequacy or inacdequacy of company
organization and management, the communication methods of employees in their
job, sucessfully unimplementation of company policy because of inadequacy
organization of work.
The second kind of over-all characteristic of the company involved not
inadequacy but harmfulness or beneficial effects of the company’s policies.
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I.2.1.2 Motivation Factors
Motivation factors include recognition; promotion; opportunity to growth
in knowledge and capacity; responsibility; achievement; work itself.
- Recognition
Recognition includes positive and negative recognition. This could be from
supervisor, some other individuals in management, management as a impersonal
forces, a client, a peer, a professional colleagues or the general public. The
expression of recognition is notice, praise, blame or even criticism.
Besides, the recognition is also defined interaction between respondents
and supervisors, peers, subordinates. This interaction is involved interpersonal relation factor.
- Promotion
This is chance to have higher position with better working conditions. This
is recognition for which achievements you gained. This also shows professional
characteristics in your work and supervisor’s belief in your ability.
- Opportunity to growth in knowledge and capacity
This is to answer the question that with your current job, whether you can
improve your knowledge, working experience, ability of solving the problems.
- Responsibility
Employees feel more satisfied when they are given responsibility for their
own work or for the work of others or for new responsibility. The lack of
responsibility of it might lead to the loss of satisfaction or negative attitude
towards the job.
- Achievement
The definition of achievement also included its opposite, failure, and the
absence of achievement. Success was put into this category and these included
the following: successful completion of a job, solutions to problem, vindication,
and seeing the results of one’s work.
- Work itself (Job-itself interesting and fulfilling work)
Work itself mentions the characteristics of work, whether the work is
interesting or uninteresting; challenging or unchallenging. Therefore, work itself is
also a source of good or bad feelings which affects more or less employee’s attitude.

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I.2.1.3 The combination of Hygience factors and motivation factors
Figure 1.2: The combination of hygience and motivation factors
Motivation factor

Employees are motivated
but have a lot of complaints.
The worst situation. Here we
This is a situation where the
have
unmotivated
job
is
exciting
and
employees with lots of
challenging but salaries and
complaints.
work conditions are not up
to par.
Employees
have
few
complaints but are not
highly motivated. "The job
is a pay check" situation.

Hygience factor

Low

High

High

Low

The ideal situation where
employees
are
highly
motivated and have few
complaints.

Source: Frederick Herzberg, 2008, The motivation of Work
There are four kinds of combination of two factors: low hygience/low
motivation; low hygience/high motivation; high hygience/low motivation; high
hygience/high motivation. The above chart shows result of each combination.
Easily realized that a firm try to get the forth combination which both hygience
and motivation is high, where employees are highly motivated and have a few
complaints to company. Clearly, in the fast-changing environment, being highly
motivated, employees will become more and more enthusiastic; committed; and
finally can contribute high level of effort to company.
In summary, depending on each firm’s situations, managers can apply an
appropriate combination of two factors positively by changing the motivation
factors such as having more effective recognition system, giving employees
more opportunity for advancement… or changing the hygience factors such as
improving working conditions; payment system better…
I.2.2. Maslow’s Theory on hierarchy of need
Humans being have tended to get the upper level of needs when the lower
level of needs was satisfied. Realizing that Abraham Maslow developed the

20


Hierachy of Needs. He believed that there are at least five levels of needs:
biological and physiological needs; Safety needs; Belongingness and love needs;
esteem needs and self-actualisation.

Source: www.businessballs.com
- Biological and physiological needs: These needs are basic life needs such
as air for breath, food, drink, shelter, sleep....Without these needs, people cannot
survive.
- Safety needs: They are needs for stability and consistency: security of
body, of employees, of family, of property, of morality.
- Belongingness and love needs: When safety needs and biological and
physiological needs are satisfied, people will seek the Belongingness and love needs
which including both giving and receiving loveness, affection and the sense of
belongingness.
- Esteem needs: When three above-said needs are satisfied, human beings
have tended to esteem needs. Esteem needs are needs to be respected by others
and self-esteem. When both of needs are gained, people feel self-confident and
valuable as a person in the world. This is a background for them to get
achievement. Without esteem needs, the person feels inferior, weak, helpless and
worthless.

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- Self-actualisation: Maslow describes self-actualization as a person's need
to be and do that which the person was "born to do". This is the determination of
“Be where you want to be” when the first four needs are satisfied. If a person
doesn’t have all five needs, he will become restless about it.
In theory, people have at least five need levels, however, not all people are
derived by the same needs. Different people are affected by different factors. The
essential thing for managers in organization is to identify the need levels of each
employee and use those needs as levers of motivation.
I.2.3. J’Stacey’s Equity Theory
Like many of more prevalent theories of motivation, equity theory was
developed by John Stacey Adams, behavioral psychologist who acknowledged
the balance between an employee’s inputs and outcomes. Inputs are logically
what employee puts into the work while in return outcomes are everything
employee takes out. Therefore, two conceptions may be understood as follows:
Inputs to a job includes: education, experience, effort, ability, loyalty,
determination and enthusiasm.
Outcomes from a job includes: salary, benefit, promotion, job security and
recognition.
According to the equity theory, the equity will be reached when one person
can receive compensation as same as other person if they have similar
contribution to a company. The comparison is based on the ratio between outputs
and inputs.
Equity theory
Perceived Ratio Comparison
Outcomes A
Outcomes B
<
Inputs A
Inputs B

Employee's assessment
In-equity (Underpay)

Outcomes vA
Inputs A

=

Outcomes B
Inputs B

Equity

Outcomes A
Inputs A

>

Outcomes B
Inputs B

In-equity (Overpay)

Person A is employee, and person B is a relevant other or referent
Source: J.Stacey (1965)
If this ratio is out of balance, in-equity will occurs. It means that when a

22


person with high education, good working experience, ceaseless efforts receives
salary as same as the newly-participated employee without any contribution, he
will think that he is underpaid.
In-equity in organization is a bad indication. It might lead to unwillingness
to take responsibility, discontentment, less effort, absenteeism and leaving work.
Therefore, reducing in-equity status is one of methods to motivate employees.
I.3. Relationship between HRM and employee motivation
Basically, employee motivation is a core function of HRM. Human resource
management (HRM) is the strategic and coherent approach to the management of
an organization's most valued assets - the people working there who individually
and collectively contribute to the achievement of the objectives of the business.
A firm without employee motivation will find it unable to respond to
increasingly continuous changing needs of employees. Unavoidably, the firm has
a tendency to face difficulties in human resources management, instability in
organizational structure, ineffectiveness in its operation.
There are some relations between employee motivation and HRM (such as
recruitment, performance appraisal, training…):
* Recruitment, compensation and benefit and motivation: Effective
recruitments help organization to have suitable employees. Employees with
knowledge, skills and experience will work in their educated field. They find
their job interested and willing to make effort to get more experience.
Compensation and benefits will be paid properly by employee’s ability, avoid inequity between input and output.
* Performance Appraisal, training/ career path development and motivation:
Effective performance appraisal supports much promotion. When employees are
promoted, it is indicated that his contribution is recognized by supervisors and
colleagues, he find enthusiastic in their job and have energy to try the best. As for
the organization, effective performance appraisal gives out general view on
employee’s ability. The organization will have detailed plan for training or career
development which encourage employees to stay with company, reduce the demotivation of employees…
For that reason, HRM and employee motivation has a close correlation.
If an organization has good policies on employee motivation, it will gain
success in HRM, especially in maintaining the labor forces, in making certain
of smooth operation and in obtaining important goals of organization.
Conversely, when HRM which deems to be a bridge connecting employers with
employees is implemented well, the methods to enhance employee motivation
are also undoubtedly interested by all managers.

23


CHAPTER II: OVERVIEW ABOUT KATOLEC VIETNAM
CORPORATION (KAV)

II.1. General information about KAV
II.1.1. Company information
Having been established in 26th Octorber, 2005 under business license
No.92/GP issued by Vinh Phuc People Committee, Katolec Vietnam Corporation
is 100% Japanese capitalized production company.
II.1.2. Scope of Business
The name of Katolec is combined “Kato” and “lec”, “Kato” comes from the
surname of Japanese president and “lec”is abbreviation of three words: LLogistics; E-Electronics; C: Culture.
In Vietnam, Katolec focus on the following fields:
- Assemble printed circuit board for printer.
- Manufacture and produce electronic applications.
The products of KAV are supplied to domestic EPE and exported to
overseas companies.
II.1.3. Company vision, mission and development strategy
II.1.3.1. Vision
-

To be the leading company in assembling and producing electronic
applications in Asia.

-

Make the great effort for development of community.

II.1.3.2. Mission
-

To meet totally the customer’s diversified demand; provide the best
quality products to customers.

-

To build a good working environment to encourage creativeness,
innovation.

-

To enhance the efficiency in each production process to have the best
productivity.

II.1.3.3. Development strategy
- To invest continuously in infrastructure, machinery, equipments to
improve productivity.
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