Subject: Solutions for motivating Vinashin Finance Company’s employees

CHAPTER: INTRODUCTION
1
1.1. Rationales of the thesis
Vinashin Finance Company is a state-owned finance company and member of the
Vietnam Shipbuilding Industrial Group (VINASHIN) that was established from 1998, by the
Ministry of Transportation. VFC’s main roles are arranging funds for investment projects,
setting up projects for local and international bond issuance, receiving trust funds and
providing financial services for VINASHIN and its members.
The results of exit survey and analyzing VFC’s HRM indicators from 2006 to early
2010 revealed the serious problems of VFC. There is an increasing of negative feedbacks and
complaints from the turnovers about treatment policies for professional staffs through the
results of exit survey. And in 2009, the VFC’s unilateral turnover rate of labor contracts stands
approximately at 17% of labor force, 7% increase over last year), higher than the other state

Y
ea
r

owned banks and other financial organizations.

GP Bank

2009

MSB (Maritime Bank)
2008

PVFC
2007

BIDV
2006

VFC
-

5.00

10.00

15.00

20.00

%

Figure 1.1. Turnover rate in some financial organizations
(Source: Survey by author, Oct 2010)
In addition, brain drain which is becoming a "problem" has plagued most of the
enterprises, particularly state enterprises. During recent 10 years, Vietnam's economy has
witnessed the appearance of series of credit organizations, commercial banks, joint venture


2
banks, and branches of foreign banks. This refers to the development of the Vietnam financial
sector in recent years. However, learning about inside of the credit organizations and the banks,
we can see that they are still looking for the answer to the paradox: paying staff high and the
lack of talent. And a fierce competition fighting for high quality human resources has taken
place among these credit organizations.

Recently, crisis of "Vinashin Group’s management” at the end of 2010 and the
Vinashin’s restructuring also cause negative impacts for VFC employees’ motivation. After this
important event is happened, not only VFC staff is concerned with the restructuring process of VFC
but also Vietnam Social Communities is interested in. The employees worry about their work safety
and feel insecure about the future of the organization in which they are attached strongly. They are
expecting an effective solution for the Vinashin problem.
At this point of time, Vinashin has been in difficult situation because of the
overheating development and limited management capacity. Many people think that
Vinashin is a ship going to wreck. However, the leaders of the Group said that: besides the
difficulty has been mentioned, the group has also had much contribution. When Vinashin
had not been established, nobody thought that Vietnam could build ship. And they also
thought that Vietnam could only build small ship about 3,000 tons which would not be
recognized by international register. However, Vietnam has built ship of 53,000 tons,
floating warehouses of 150,000 tons, car carrier... In term of technology, the levels of the
group's workers have developed well. Of course, with Vinashin's financial situation today,
the next challenge will be more serious. In the context of corporate restructuring, VFC will
take much more negative affects than positive ones. Nevertheless, it should recognize that
this is an opportunity for VFC and businesses within the Group to reform the entire
structure and operations more professional, safer and more effective. (Source:
)
The above rationales urged the author to conduct this research with the utmost care.
1.2. Research objectives
This research is conducted to suggest the solutions to help VFC develop more stably;
enhance the competitive advantages with an appropriate distribution expenses. Thus the
research objectives are as below:
-

To identify the relevant theoretical framework for VFC case



3
-

To analyze the current motivation practice of

VFC to find out its strengths,

weaknesses and their root causes
-

To make some recommendations to enhance motivation for staffs at VFC

1.3. Research questions
For the research objectives that mentioned above, the aim of this thesis is to answer
five questions:
-

What theoretical framework can be applied for VFC case?

-

What and how did VFC do to motivate the professional employees? What are the
strengths? What are the weaknesses?

-

Why do people stay or go? What are the root causes of turnover and low satisfaction
in VFC professional employees?

-


How to improve VFC’s motivation policies in a short term and long term?

1.4. Research methodology

1.4.1. Research process
The process of study of this thesis could be summed up in following chart:
Step 6:
Write the
research report

Step 2:
In-depth
interview

Step 3:
Survey by
questionnaires

Step 4:
Collect the
data

Step 5:
Analyze and
interpret the data

Step 1: Problem
Identification &
Select a mixed

method/mixed model
research motivation

Figure 1.2. Research process

1.4.2. Secondary data
The secondary data was collected by qualitative method mainly base on company’s
annually reports, regulations, brochures, and official documents of VFC, Internet and
newspapers, thesis, and specially the results of exit survey for the turnovers (Appendix 3).


4

1.4.3. Primary data
* In-dept interview question guideline: (Appendix 1)
Table 1.1. In-depth interview question guideline

Id

Target group

1

Board of Directors
Manager of Planning
& General Affair Dept
(Personnel Group
belonging to this dept)
Line Managers
Staff from different

departments
Turnover employees
(from 2007 to now

2
3
4
5

TOTAL

Quantit

Purposes

y
2
1





3
5



8
18




To find conclusions concerning the
assessment of job satisfaction
To find out which factors VFC professional
employees motivated by
To identify what main causes of the
turnover/ dissatisfaction in VFC
To find the relationship between the
turnover rate/ the dissatisfaction and other
indexes (such as: average age, sex, seniority,
education level, labor group…)
To understand what VFC has been doing to
motivate the professional employees?

* Questionnaire for professional employees: (Appendix 2)
The research design for this study employed a descriptive survey method and online
survey method. The target population of this study included professional employees at VFC.
The sample size included all 125 employees of the target population. 75 of the employees
participated in the survey for a participation rate of 60 %. Data was collected through use of
a written questionnaire hand-delivered and online-delivered by website
to participants. Questionnaires were filled out by participants and returned to an intradepartmental mailbox. Participants were asked to rank the importance of eleven factors that
motivated them in doing their work: 1=most important . . . 11=least important. As a result of
the pilot test, minor changes in word selection and instructions were made to the
questionnaire. Collected questionnaires were processed by SPSS 16.0 software. This software
allows creating statistical reports quickly and accurately, combining two or more
qualitative/quantitative variables.
Table 1.2.Demographic Statistics of Respondents
Demographic

Gender

N=75

Percent (%)

Female

57

76.0

Male

18

24.0


5
Educational Level (years)

Age group

Labor's seniority at VFC

Number of job changes

Kind of labor


Intermediate

5

6.7

Colleges, universities

62

82.7

Postgraduate

8

10.7

Fewer than 30 years

59

78.7

From 30 years to 40 years

15

20.0


Over 45years

1

1.3

Fewer than 1 year

10

13.3

From 1 to under 3 years

28

37.3

From 3 to under 5 years

31

41.3

Over 5 years

6

8


Never

58

77.3

1 - 3 times

15

20.0

4 - 5 times

2

2.7

Professional employee

64

85.3

Management staff

11

14.7


(Source: Survey by author, Oct 2010)
The data for this study was collected within six months (from March to August 2010)
using both in-depth-interview and survey. VFC’s profiles was analyzed basing on
demographic characteristics of the respondents in terms of length of employment, gender,
level of education, age of employees, age of the departments, size of dept.
All of the respondents were employees working for VFC. The demographic statistics
of respondents is shown in Table 1.2, Findings showed that of all respondents, more than 78
percent (78.7%) were aged fewer than 30 followed by the age groups of 30 - 40 and over 50
which accounted for 20% and 1.3% percent respectively. About 76% percent were female.
Staff at non-managerial position represented more than half (85.3%) of the total respondents
and managers for only 14.7%. Most of the respondents were from function departments like
credit departments, investment department, accounting department, etc. As the initial aim was
to survey mainly professional employees due to this kind of labor is by VFC’s majority. In
terms of education level, 82.7% percent of these employee respondents had completed
colleges and universities, while a total of 17.4% percent educated at intermediate (6.7%) level
or Postgraduate (10.7 percent).
Findings have shown that of the 75 respondents, a majority were aged fewer than 30,
meaning that this age group accounted for a considerable portion of the Vietnam labor market,
or at least in the financial sector. Most of these people were working at an entry-level, with
basic educational background. Additionally, 78.6% of the respondents have been working for


6
VFC over one year, while only 8% percent has worked for the company for over 5 years. This
could be the reason that VFC were short or it could be an indicator of high employee turnover
rate in this industry.
Evaluating of the author’s questionnaire, VFC’s staff said that: "The Personnel group
has made the most practical thing which gives us this questionnaire promptly and
appropriately. The comment questionnaire help us to express our personal opinions freely,
honestly and in the most objectively way. The consultation meeting like that should be

promoted because its work is very well, and is not waste time. Whenever the company wants
to set up any policy, the company should also consult this form. And hope the Personnel
Group to read carefully and consider the each employee’s opinions."
However, interview result and quality of information fluctuate following “telling true, tell
frankly” from the turnover staffs. Staffs who want to quit job usually double-talk or talk what
interviewer want to hear in order to finish quickly the interview or avoid breaking good relationship.
Hence, the author used information from many exit interviews previously years.
Information from those meetings needed to be combined, compared, and checked with not
only information from applying interview of those staffs, but also their responses, comments
during their working time. For excellent staffs who quitted, the author always keeps contact to
them and receives a lot of useful helps in the questionnaire analysis.
* From observation
The author has been working for VFC nearly 5 years. Thus, I have witnessed its
development and change. I have a chance to work with staff and understand how the
motivation affects working’s quality and effectiveness. I also knows joining and leaving of
staff in the organization and is aware of impact of change in HR to the organization’s
operation. All observation helped the author to have a board overview on VFC and its
situation during last years. It is also an advantage to the author. Besides, friendship among
VFC and other credit organizations supported the author a lot in conducting the research in
term of information.
1.5. Research scope
Firstly, the research concentrated on the Head office because of their important roles in
VFC.
Secondly, the research concentrated on enhancing the motivation of professional
employee because in VFC Head office, approximate 73 % employees are professional
employee.


7
Finally, the research collected information about VFC in the 2006-2010 periods. And

recommendations will aim to the non-financial motivation solutions.
1.6. Structure of the thesis
The thesis included five chapters:
Chapter 1: Introduction
Chapter 2: Theoretical background
Chapter 3: An overview of Vinashin Finance Company
Chapter 4: Findings
Chapter 5: Solutions for motivating Vinashin Finance Company’s employees

TABLE OF CONTENTS
CHAPTER 1 : INTRODUCTION..............................................................................................1
1.1. Rationales of the thesis....................................................................................................1
1.2. Research objectives..........................................................................................................2
1.3. Research questions...........................................................................................................3
1.4. Research methodology.....................................................................................................3
1.4.1. Research process.......................................................................................................3
1.4.2. Secondary data..........................................................................................................3
1.4.3. Primary data..............................................................................................................4
1.5. Research scope.................................................................................................................6
1.6. Structure of the thesis.......................................................................................................7
ACKOWLEDGEMENT............................................................................................................8
LIST OF TABLES...................................................................................................................12
CHAPTER 3 LIST OF FIGURES............................................................................................13
CHAPTER 4.............................................................................................................................13
CHAPTER 6 : THEORATICAL BACKGROUND ON MOTIVATION.................................17
2.1. The definition, substance and necessary of motivation.................................................17
2.1.1. What is motivation?................................................................................................17
2.1.2. The substance of work motivation..........................................................................19
2.1.3. The necessary of improving the work motivation for employees...........................20
2.1.4. Relevant motivation surveys/ researches:...............................................................22

2.2. Theoretical motivation theories......................................................................................23
2.2.1. Maslow’s Hierarchy of Needs.................................................................................23
2.2.2. The Two-Factor Theory (Herzberg)........................................................................26
2.2.3. Equity Theory (John Stacey Adams).......................................................................30
2.2.4. Job Characteristics Model.......................................................................................31
2.2.5. Goal Setting Theory................................................................................................33
2.3. Relevant theories and model for the case of VFC..........................................................33
CHAPTER 7 : OVERVIEW ABOUT VINASHIN FINANCE COMPANY............................36
3.1 General introduction about VFC.....................................................................................36


8
3.1.1. The vision, development principle, and target for 2010 of VFC............................36
3.1.2. VFC’s labor force characteristics............................................................................38
3.2. Products and services.....................................................................................................42
3.3. VFC’s HRM strategy and practice.................................................................................42
CHAPTER 8 : FINDINGS........................................................................................................45
4.1. Findings on VFC employee’s general motivation opinion............................................45
4.2. Findings VFC’s motivation problem in relation to Hygiene factors (work environment)
...............................................................................................................................................50
4.2.1. Pay and security......................................................................................................50
4.2.2. Clear goals...............................................................................................................54
4.2.3. Quality of supervision.............................................................................................58
4.2.4. Working conditions.................................................................................................61
4.3. Findings VFC’s motivation problem in relation to Motivational factors (work content)
...............................................................................................................................................65
4.3.1. Recognition.............................................................................................................65
4.3.2. Work itself...............................................................................................................66
4.3.3. Advancement and growth........................................................................................68
4.4. Findings the root cause of turnover and low satisfaction in VFC’s professional

employee...............................................................................................................................70
CHAPTER 9 : SUGGESTIONS FOR VFC TO ENHANCE EMPLOYEE MOTIVATION...73
5.1. Being wary of Financial Incentives and Rewards..........................................................73
5.2. Clarifying expectations (ensure clear goals for each unit).............................................76
5.3. Hiring the Right People & Weed out Poor Managers....................................................79
5.4. Improving working conditions at VFC..........................................................................82
5.5. Redesigning work to enrich jobs....................................................................................83
5.6. Using smart training as a development tool for employees...........................................84
5.7. Other feasible solutions when the firm falls into the disadvantage context...................86
CONCLUSION........................................................................................................................88

Chapter 2
ACKOWLEDGEMENT
First of all, taking this opportunity, I would like to thank my family and friends for
their great support in helping me complete this research.
With sincere gratitude to my thesis supervisors, Dr.Dao Thi Thanh Lam for her
valuable time and precious comments which contributed much to my work.
Special thanks to Mr. Hoang Gia Hiep and Ms. Tran Thi Phuong Anh – the Deputy
General Director and the Manager of the Planning & General Affairs Department of Vinashin
Finance Company as well as the line managers from other function departments, for the
enormous help they provided.
There is too much to say in too few words but without each and every one of you, this
could never have been accomplished. I truly appreciate you all!


9
Bui Kim Lien
Nov 2010



10


11

ABBREVIATION
VFC

- Vinashin Finance Company

VFL

- Vinashin Leasing Company

CVS

- CIMB VINASHIN Securities Limited Company

VFC.HCM

- Branch of Vinashin Finance Company in Hồ Chí Minh City

VFC.HN

- Branch of Vinashin Finance Company in Hà Nội City

VFC.HP

- Branch of Vinashin Finance Company in Hải Phòng City


V.IBC

- Vinashin Investment Consultancy & Financial Services Company

VINASHIN

- Vietnam Shipbuilding Industry Group

HRM

- Human Resource Management

Dept

- Department

JCM

- Job Characteristics Model

JD

- Job description

PA

- Performance Appraisal


12


LIST OF TABLES
TABLE 1.1. IN-DEPTH INTERVIEW QUESTION GUIDELINE...........................................4
TABLE 1.2.DEMOGRAPHIC STATISTICS OF RESPONDENTS..........................................4
TABLE 2.3. APPLYING MASLOW'S NEEDS HIERARCHY - BUSINESS
MANAGEMENT IMPLICATIONS.........................................................................................25
TABLE 3.4. KEY FIGURES OF VFC FROM 2006 TO 2009.................................................37
TABLE 4.5. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “PAY & SECURITY”
...................................................................................................................................................50
TABLE 4.6. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “CLEAR GOALS FOR
YOUR UNIT”...........................................................................................................................54
TABLE 4.7. VFC STAFFS’ OPINION ABOUT THE FACTOR “COMPANY POLICIES
AND ADMINISTRATION”.....................................................................................................56
TABLE 4.8. VFC EMPLOYEES’ OPINION ABOUT THE “ACHIEVEMENT” FACTOR. .57
TABLE 4.9. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “QUALITY OF
SUPERVISION”.......................................................................................................................58
TABLE 4.10. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “ACHIEVEMENT” 60
TABLE 4.11. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “WORKING
CONDITIONS”........................................................................................................................61
TABLE 4.12. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “FEEDBACK &
PERFORMANCE APPRAISAL”.............................................................................................63
TABLE 4.13. VFC EMPLOYEES’ OPINION ABOUT THE FACTOR “INTERPERSONAL
RELATIONS”...........................................................................................................................64
TABLE 4.14. VFC EMPLOYEES’ OPINION ABOUT THE “RECOGNITION” FACTOR..66
TABLE 4.15. VFC EMPLOYEES’ OPINION ABOUT THE “WORK ITSELF” FACTOR...67
TABLE 4.16. VFC EMPLOYEES’ OPINION ABOUT THE “ADVANCEMENT &
GROWTH” FACTOR...............................................................................................................68


13


CHAPTERLIST
3 OF FIGURES
FIGURE 1.1. TURNOVER RATE IN SOME FINANCIAL ORGANIZATIONS.....................1
FIGURE 1.2. RESEARCH PROCESS.......................................................................................3
FIGURE 2.3. PROCESS OF MOTIVATION...........................................................................18
FIGURE 2.4. DIFFERENCE BETWEEN MOTIVATION, SATISFACTION, INSPIRATION
AND MANIPULATION...........................................................................................................18
FIGURE 2.5. INDIVIDUAL AND ORGANIZATION NEEDS..............................................21
FIGURE 2.6. CAUSES DISTRIBUTION OF THE BRAIN DRAIN IN ACB – A VIETNAM
COMMERCIAL BANK...........................................................................................................22
FIGURE 2.7. MASLOW’S HIERARCHY OF NEEDS...........................................................23
FIGURE 2.8. THE TWO-FACTOR THEORY OF MOTIVATION.........................................27
FIGURE 2.9. HACKMAN AND OLDHAM’S JOB CHARACTERISTICS MODEL...........31
FIGURE 2.10. THE EXTENDED MODEL OF HERZBERG’S TWO-FACTOR MODEL...34
FIGURE 3.11. MODEL OF THE EXPECTED VINASHIN FINANCE CORPORATION....37
FIGURE 3.12. DISTRIBUTION OF VFC EMPLOYEES BY WORKING DURATION.......39
FIGURE 3.13. DISTRIBUTION OF THE EMPLOYEES BY GENDER...............................39
FIGURE 3.14. DISTRIBUTION OF THE RESPONDENTS ACCORDING TO LEVEL OF
EDUCATION............................................................................................................................40
FIGURE 3.15. AGE PROFILE OF THE EMPLOYEES..........................................................41
FIGURE 3.16. LABOR WORKFORCE’S STRUCTURE CATEGORIZED BY POSITION 41
FIGURE 3.17. CHART OF CHANGES IN VFC'S PERSONNEL 2006 – 2010.....................44
FIGURE 4.18. THE RANKING OF MOST IMPORTANT MOTIVATION FACTORS OF
EMPLOYEES AT VFC.............................................................................................................45
FIGURE 4.19. RELATION BETWEEN SOME MOTIVATED FACTORS AND THE
LABOR'S SENIORITY GROUP AT VINASHIN FINANCE COMPANY.............................46
FIGURE 4.20 .RELATION BETWEEN SOME MOTIVATED FACTORS AND LABOR
GROUP AT VFC.......................................................................................................................47
FIGURE 4.21. VFC’S AVERAGE INCOME GROWTH COMPARE WITH TURNOVER,

INFLATION RATE GROWTH................................................................................................53
FIGURE 5.22. JOB ENRICHMENT AND JOB PERFORMANCE........................................84

CHAPTER 4


14

EXECUTIVE SUMMARY
VFC is one of state-owned companies that have started its operation since 2000. Its
mission is to become the backbone of the Vinashin Business Group’s financial institutions, to
meet the demand for capital of Group's projects the most. Currently, VFC is standing at a
challenge of high rate of turnover staff effecting the organization’s operation at some certain.
VFC also not yet invested any effort on studying what factors causes this high turnover rate.
Saying in other word, VFC has not yet looked at the actual situation on motivation to find out
what and how VFC had done to motivate the professional employees, its strengths and
weaknesses; and what the root causes of turnover and low satisfaction in VFC professional
employees are. Therefore, how to enhance employee motivation in VFC is essential
requirement. As a senior HR staff at VFC, especially at the HR Department of the
organization, the author is eager to do the research on “Motivating professional employees at
Vinashin Finance Company”.
Such ideal has been matured for a quite a while for many years when the author
chose HRM as a career to pursuit for her career development. Also coming from root causes
as mentioned above, the author has decided to bring her ideal on a research in which the
author would like to explore what VFC’s staff perspectives on working motivation and to find
out what theoretical framework can be applied for VFC case, what and how VFC had done to
motivate the professional employees, what the strengths and the weaknesses are, what the root
causes of turnover and low satisfaction in VFC professional employees are, and how to
improve VFC’s motivation policies in a short term and long term. The author has applied two
factors theory of Frederick Herzberg to analyze the problems as the guiding theory, but only

analyzing some important factors which is fit for VFC survey’s results. Goal setting theory
was applied for analyzing extended motivation factors at VFC (“Clear goal” factor). And Job
Characteristic Model (JCM) also was applied for complementing the “work itself” factor of
Herzberg.
Primary data for this study was collected within six months (from March to August
2010) and used both in-depth-interview and survey (hand-delivered and online-delivered by
website ). 75 of the employees participated (over 125 employees of the
target population) in the survey for a participation rate of 60 %. Collected questionnaires were
processed by SPSS 16.0 software to print out the necessary reports. The top urgent problems
of VFC current motivation practice were analyzed carefully to find out its strengths,


15
weaknesses and their root causes. These VFC problems are related to these below Hygiene
and Motivation factors:
•

Pay and security

•

Clear goal

•

Quality of supervision

•

Working conditions


•

Recognition

•

Nature of the work

•

Advancement and Growth

Hygiene factor

Motivation factor

The research also carried out with an aim to serve VFC and VFC’s leaders in finding
appropriate recommendations to enhancing their employees’ motivation at work as follow:
•

Being wary of Financial Incentives and Rewards

•

Clarifying Expectations

•

Hiring the Right People & Weed out Poor Managers


•

Improving working conditions at VFC

•

Designing work to enrich jobs

•

Using smart training as a development tool for employees

•

Other feasible solutions when the firm falls into the disadvantage context

This is a practical research and it is highly supported by VFC’s leaders. It is a hope
that its results would be applied into practice as long as the research was completed. And the
improvement requires the involvement of changes in policy and procedures in implementation
of each factor. Moreover, the cooperation of the Management and Staff level employees are
also crucial to ensure the success of the motivation enhancement.


16

CHAPTER 5


17


CHAPTER: THEORATICAL
6
BACKGROUND ON MOTIVATION
2.1. The definition, substance and necessary of motivation

2.1.1. What is motivation?
It is a general tendency to believe that motivation is a personal trait. Some people have
it and the others don’t. In practice, some are labeled to be lazy because they do not display an
outward sign of motivation. However, individuals differ in their basic motivational drives. It
also depends upon their areas of interest. The concept of motivation is situational and its level
varies between different individuals and at different times. If you understand what motivates
people, you have at your command the most powerful tool for dealing with them.
Defining employee motivation
Firstly, “Motivation is the process of stimulation an individual to take action that will
accomplish a desired goal” [5, pp236]. The word motivation comes from the Latin word
“movere”, which means to move to urge. Generally, employee motivation is the level of
energy, commitment, and creativity that a company’s workers apply to their jobs. Whilst,
motivation has been defined as: the psychological process that gives behavior purpose and
direction; a predispotion to behave in a purposive manner to achieve specific, unmet needs; an
internal drive to satisfy an unsatisfied need; and the will to achieve. While there is another
simple definition of motivation is the ability to change behavior.
In this research, the author will use a mix definition of employee motivation (This
definition was a combination of the above definitions): “Employee motivation is a process a
stimulate employee by financial and non-financial incentives so that the employee may have a
high commitment to the organization.”
Type of work motivation
We can divide motivation at work into internal and external motivation:
* Internal Motivation is related to the work, where there is a close identity between the task
itself and the human needs.

* External Motivation is independent of the task; it is related to the working environment
This research will cover all above types of motivation.
Process of motivation
In the initiation a person starts feeling deficiently. There is an arousal of need so
urgent, that the bearer has to venture in search to satisfy it. This leads to creation of tension,


18
which urges the person to forget everything else and cater to the aroused need first. This
tension also creates drives and attitudes regarding the type of satisfaction that is desired. This
leads a person to venture into the search of information. This ultimately leads to evaluation of
alternatives where the best alternative is chosen. After choosing the alternative, an action is
taken. Because of the performance of the activity satisfaction is achieved which than relieves
the tension in the individual.

Figure 2.3. Process of motivation
(Source: />Difference between motivation, satisfaction, inspiration and manipulation

Figure 2.4. Difference between motivation, satisfaction, inspiration and manipulation
(Source: />Motivation refers to the drive and efforts to satisfy a want or goal, whereas satisfaction
refers to the contentment experienced when a want is satisfied. In contrast, inspiration is


19
bringing about a change in the thinking pattern. On the other hand Manipulation is getting the
things done from others in a predetermined manner.
Hence, manipulation or external stimulus as well as inspiration or internal stimulus
acts as carriers of either demotivation or motivation which in turn either results into
dissatisfaction or satisfaction depending upon.
Relationships between work motivation and job satisfaction

People hold different attitudes about many aspects of their work and life. From the
management perspective, job satisfaction is one of the most meaningful employee attitudes. Work
motivation deals with the understanding of what inspire and sustain employee’s drives to work.
The close relationship between work motivation and job satisfaction implied that studying the
indicators of job satisfaction will lead to the understanding of employees’ needs and the factors
influencing their behavior. In a firm, Motivated and satisfied employees are a vital prerequisite to
the success of the organization, which is why these concepts should enjoy considerable and
ongoing attention on all levels of the business. Accordingly, job satisfaction is the positive
consequence of work motivation. So, the research will focus on analyzing work motivation.

2.1.2. The substance of work motivation
The conceptions of work motivation above show the substance of it as following:


Work motivation is displayed through specific tasks that every person is responsible for
and in their attitude to the organization. This means there is no general work motivation
for all of work. Every laborer, who is in charge of different tasks, may have different
motivation to work harder. Work motivation is attached to a job, an organization and a
specific work environment.



Work motivation does not entirely depend on the personal character; it can change
frequently following the objective elements at work. At a point of time, a laborer may
have very high motivation to work, but at another point of time, it is unlikely that work
motivation remains in them.



Work motivation is spontaneous, depending on workers themselves; the workers are

often eager to work actively as they don’t feel any pressure or stress at work. When
having chance to work actively, they can achieve the best productivity.



Work motivation plays an important role in increasing labor productivity under
condition other input kept constant. As an inside invisible force, work motivation
promotes man to work more enthusiastically. Nevertheless, work motivation is only the


20
origin of productivity increase, not a condition of increasing productivity, because this
depends on qualifications and skills of workers, the technological scientific level of the
production line.

2.1.3. The necessary of improving the work motivation for employees
For individual staff
People always have both physical and mental needs. When employees feel their needs
are satisfied, they will have good mentality which boosts employees to work more
enthusiastically. With individual workers, who have no work motivation, hardly can working
activity achieves its goals because then employees only work to complete the assigned work
without creativeness or striving hard at work; they just consider their work as an obligation
which has to be complied with labor contracts. Therefore, managers need to create motivation
to impulse creativeness and ability performance of employees.
The employees only work hard when their demands are relatively satisfied. This is
reflected in the benefits they are entitled. When employees feel that the benefits they receive
are not commensurate with what they contributed, the unsatisfied demands will cause them
feeling depressed and being distracted from work. Benefits are means to satisfy demands, so
the benefits which employees can achieve should be commensurate with what they offer, and
then they can provide employees with motivation for work.

Work motivation also helps employees with self-improvement. When there is
motivation in working, workers will have greater efforts to study, sum up the experiences
through their work, improve their knowledge and qualifications for self-improvement.
For the firm
Actually, we are conducting the industrialization and modernization of our country.
The experience of Japan and the other "Asian dragons" shows that we have to draw our own
path in accordance with the political, economic, social and cultural situation of Vietnam. This
is an extremely difficult task because they must catch up with advanced scientific and
technological level of the world in a short period of time providing that our poor
infrastructure, backwardness and lack of investment capital. One of the band-aid solutions is
increasing productivity growth which can result in higher profits on the basis of current
equipments and available funds, therefore achieving faster speed of capital accumulation. For
above reasons, stimulation of labor is an issue currently concerned by many leaders and
managers.


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On the other hand, when the problems of investment capital and equipments have been
resolved, increasing productivity and stimulating working and creativeness are the urgent
matters which need to consider and solve appropriately in order that businesses and research
institutions in particular and the economy in general can grow fast and effectively. Stimulating
labor is to create the impulse inside of humans to labor, that impulse is created by an objective
impact on sense. When stimulating any working activities, people must pay attention to
psychological factors such as purposes of work, demands, and interests, motivation of
individuals and series of individual psychology characteristics as well as group features that can
take form of effective stimulus. Labor can be stimulated by matter, by communication or by
satisfying other needs of human nature affecting their behavior, namely it can orient and adjust
personal behavior. Providing stimulation to work has following effects:
• Making the connection between organization and laborers, help organization keep
good employees, decrease dismissing rates. (Task Commitment)

• Increasing level of satisfaction, trust, engagement and commitment of the staff in the
business. (Initiative and optimism; Achievement Drive)
• Decreasing the period of time and cost of recruiting and training new employees.
(Save costs and time)
• Increasing labor productivity and labor using efficiency. (Above average
performance)
• Being the platform to increase sales and improve profitability. (Creativity)
Why motivations need to be mentioned in a firm?
Motivating workers involves inspiring them to contribute to the goals of the
organization. This can be illustrated by this model:
INDIVIDUAL NEEDS
Physical well-being
Job satisfaction
Personal development
Achievement
Respect from work group

ORGANISATIONAL NEEDS
High productivity
Low absenteeism
Co-operation
Industrial harmony
Constructive disagreements
Low labor turnover

If needs are met

If needs are met

Contented, productive workforce


Contented, efficient workforce

Figure 2.5. Individual and Organization Needs


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2.1.4. Relevant motivation surveys/ researches:
According to surveys conducted by Nguyen Van Thuy authors published in banking
technology newspaper that indicated causes brain drain of the ACB, the authors investigated
over 144 staffs in ACB showed that the causes of the brain drain in Vietnam commercial
banks today are:
♣ Income and wage policy: 76 persons out of 144, accounting for 52.8% who believe
that the wage policy is not commensurate with the level of work.
♣ Career growth: 84 persons out of 144, accounting for 58.3% who believe that no
opportunities for advancement in the old bank.
♣ Not able to appreciate: 46 persons out of 144, accounting for 31.9% who think that
their contributions are not recognized and their abilities are not evaluated correctly will be
easily persuaded by job offered from other banks.
♣ Unprofessional work environment: 44 persons out of 144, accounting for 30.6% who
think that the Vietnam banks are still considered importantly emotional relationship. They have a
sectarian spirit; no trust each other and unclear personnel policy.

Figure 2.6. Causes distribution of the brain drain in ACB – A Vietnam commercial bank
(Source: />All motivation researches show that the current tools to keep people’s business
concentrated to the main issues:
(1) Compensation: salary, bonus, stock...
(2) Welfare regime: medical insurance, Social insurance, personal loans, financial planning,
policy for family, relatives, other health care activities, mental ...



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(3) Occupation: enrichment of work, challenging, foreign business, job rotation, project team,
training...
(4) Other tools: professional development plan, career management system, retaining plan,
staff’s capacity frame management, leadership development...
2.2. Theoretical motivation theories
There were a great variety of theories of human motivation. But, the research applied
three theories of employee motivation: The two factor theory of Herzberg; the Maslow
hierarchy of need and the Equity theory of J.Stacy.
It is difficult to understand what motivates people to do something. We can not find any
simple formula as "please treat them in a way like this and you will make them work hard”.
These caused many researchers headaches for over fifty years. We need to consider
more carefully some most popular theory of human behavior at work:

2.2.1. Maslow’s Hierarchy of Needs

Figure 2.7. Maslow’s Hierarchy of needs
Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs in
his 1943 paper "A Theory of Human Motivation" 1 and his subsequent book, Motivation and
Personality. This hierarchy is often portrayed in the shape of a pyramid and suggests that
people are motivated to fulfill basic needs before moving on to other needs.
Maslow believed that these needs are similar to instincts and play a major role in
motivating behavior. Physiological, security, social, and esteem needs are deficiency needs
(also known as D-needs), meaning that these needs arise due to deprivation. Satisfying these
lower-level needs is important in order to avoid unpleasant feelings or consequences.


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Maslow termed the highest-level of the pyramid as growth needs (also known as
being needs or B-needs). Growth needs do not stem from a lack of something, but rather from
a desire to grow as a person.
There are five different levels in Maslow’s hierarchy of needs:
Self-Actualization
Self-actualization is the summit of Maslow's motivation theory. It is about the quest of
reaching one's full potential as a person. Unlike lower level needs, this need is never fully
satisfied; as one grows psychologically there are always new opportunities to continue to grow.
Self-actualized people tend to have motivators such as:
•

Truth

•

Justice

•

Wisdom

•

Meaning

Self-actualized persons have frequent occurrences of peak experiences, which are
energized moments of profound happiness and harmony. According to Maslow, only a small
percentage of the population reaches the level of self-actualization.
Esteem Needs
After a person feels that they "belong", the urge to attain a degree of importance

emerges. Esteem needs can be categorized as external motivators and internal motivators.
Internally motivating esteem needs are those such as self-esteem, accomplishment,
and self respect. External esteem needs are those such as reputation and recognition.
Some examples of esteem needs are:
•

Recognition (external motivator)

•

Attention (external motivator)

•

Social Status (external motivator)

•

Accomplishment (internal motivator)

•

Self-respect (internal motivator)

Maslow later improved his model to add a layer in between self-actualization
and esteem needs: the need for aesthetics and knowledge.
Social/Belonging Needs


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Once a person has met the lower level physiological and safety needs, higher
level motivators awaken. The first level of higher level needs is social needs. Social needs are
those related to interaction with others and may include:
•

Friendship

•

Belonging to a group

•

Giving and receiving love

Security/Safety Needs
Once physiological needs are met, one's attention turns to safety and security in order
to be free from the threat of physical and emotional harm. Such needs might be fulfilled by:
•

Living in a safe area

•

Medical insurance

•

Job security


•

Financial reserves

According to the Maslow hierarchy, if a person feels threatened, need further up the
pyramid will not receive attention until that need has been resolved.
Physiological Needs
Physiological needs are those required to sustain life, such as: Air, Water, Food, and Sleep
According to this theory, if these fundamental needs are not satisfied then one will
surely be motivated to satisfy them. Higher needs such as social needs and esteem are not
recognized until one satisfies the needs basic to existence.
If Maslow's theory is true, there are some very important leadership implications
to enhance workplace motivation:
Table 2.3. Applying Maslow's Needs Hierarchy - Business Management Implications
Type of demand

Solutions
 Provide opportunities for professional development

Self-improvement

 Provide training and development

(Self actualization)

 Encouraging creativity, success
 Encourage participation in reform programs

Esteem (be respected)


 Praise success
 Disseminate widely good results of the individual