Luận văn thạc sĩ UEH enhancing the level of employee engagement of credit officer staffs in asia

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

------------------------------

Tran Thi Minh Thuy

ENHANCING THE LEVEL OF EMPLOYEE ENGAGEMENT OF

CREDIT OFFICER STAFFS

IN ASIA COMMERCIAL BANK (ACB) –

PHU LAM BRANCH

ID: 22130078

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR. NGUYEN THI NGUYET QUE

Ho Chi Minh City – April 20th, 2016

LUAN VAN CHAT LUONG download : add [email protected]

ENHANCE THE LEVEL OF EMPLOYEE ENGAGEMENT OF CREDIT OFFICER

TABLE OF CONTENTS

ABSTRACT...........................................................................................................1

CHAPTER 1: PROBLEM IDENTIFICATION ................................................2

1.1. Company background ................................................................................2

1.2. Problem symptom ......................................................................................3

1.3. Justifying the existence of the central problem..........................................7

1.4. Justifying the importance of the central problem.....................................10

1.5. List the potential causes of the problem...................................................13

Conclusion .............................................................................................................14

CHAPTER 2: ALTERNATED SOLUTIONS .................................................15

Introduction ...........................................................................................................15

2.1. Justify causes............................................................................................15

2.2. Alternative Solution .................................................................................21

Solution 1: Developing a supportive work environment that typically displays

concern for employees’ needs and feelings within credit department of Phu Lam

branch 21

Solution 2: Improving reward and recognition programs for employee ...............23

Solution 3: Develop employee’s knowledge base and skills through training

programs ................................................................................................................25

Conclusion .............................................................................................................26

CHAPTER 3: SELECTED SOLUTION AND CHANGE PLAN DESIGN ........28

Introduction ...........................................................................................................28

3.1. Selected the suitable solution ...................................................................28

3.2. Implementation plan.................................................................................33

Conclusion .............................................................................................................37

CHAPTER 4: SUPPORTING INFORMATION ..................................................38

4.1. Interview Transcript to get information about the symptom of problem:38

LUAN VAN CHAT LUONG download : add [email protected]

ENHANCE THE LEVEL OF EMPLOYEE ENGAGEMENT OF CREDIT OFFICER

4.2. The Employee Engagement Questionnaires (Ibrahim, M., & Al Falasi, S.

(2014) 40

4.3. Interview Transcript to identify the existence of the problem.................40

4.4. Literatures review - The potential causes influencing the central problem47

4.5. The result of question in the focus group to justify the main causes:......50

REFERENCES....................................................................................................59

APPENDIX..........................................................................................................65

Balance Score Card of Credit Department in 2014 .........................................65

Balance Score Card of Credit Department in first half of 2015.....................66

TABLE.................................................................................................................68

Table 1: The overall turnover rate in 2014 and the first half year in 2015............68

Table 2: Evaluation Criteria of Balance Score Card .............................................68

Table 3: Percentage of credit officers in accordance with the evaluation criteria

BSC 68

Table 4: The Comparison among these solutions based on four criteria ..............68

LUAN VAN CHAT LUONG download : add [email protected]

ENHANCE THE LEVEL OF EMPLOYEE ENGAGEMENT OF CREDIT OFFICER 1

ABSTRACT

Phu Lam branch has emerged as key contributor to the profit and the

development in ACB. However, the low employee engagement in credit department

is creating the significant effects on all employees’ spirit and company. Far, this

problem also gives the potential consequences to the future developing status of the

bank when the low employee engagement problem cannot find the good way to

solve. The low employee engagement are step by step making the employees feel

weary, stress and the certainly results of this problem are low commitment and high

turnover rate.

The main purpose of this thesis is identifying the solutions to enhance the level of

employee engagement of credit department in ACB - Phu Lam Branch. It includes

collecting the symptoms, analyzing the important of the problem; identify the root

causes of low employee engagement at Phu Lam Branch which are Reward and

Recognition, Training and career development, Work Environment. In addition,

based on the root causes of the problem, the potential strategies to enhance the level

of employee engagement at the workplace also are found out. From the potential

solutions, the efficient solutions will be built and proposed to ACB - Phu Lam

Branch so that the corrective action can be followed. The thesis use the qualitative

method that is face to face interviewing the Credit Department Manager and staffs,

and reference the literature from the theories and previous academic papers to

determine the symptoms, problem as well as proper solutions.

LUAN VAN CHAT LUONG download : add [email protected]

ENHANCE THE LEVEL OF EMPLOYEE ENGAGEMENT OF CREDIT OFFICER 2

CHAPTER 1: PROBLEM IDENTIFICATION

1.1. Company background

Asia Commercial Bank (ACB) was established in May 1993. Today, ACB is

one of the leading joint stock commercial banks in Vietnam. It is developing with

the branch network system nationally with nearly staff of 10,000 employees and

many different products and services. The major activities of Asia Commercial

Bank and subsidiaries is to mobilize short, medium and long-term funds in the form

of term deposits, demand deposits; to receive entrusted investment and development

funds from domestic credit institutions; to borrow from other financial institutions;

to grant short, medium and long-term loans; to discount commercial papers, bonds

and other valuable papers; to contribute capital and to invest in joint-ventures in

accordance with the law; to provide settlement services to customers; to trade

foreign currencies, gold; to provide trade finance services; and to provide other

banking services. In the next 5 years, the position of ACB is the position of a

leading bank established in 5 fields; and in 2015, ACB is the bank operating with

main targets: stable growth, professional management, suitable income, and

reasonable profit. As of December 31, 2014, ACB develops network system

nationally with nearly of 346 branches and sub-branches in 47 provinces and cities

nationwide

Phu Lam branch has emerged as key contributor to the profit and the

development in ACB, which may not be possible without extraordinary

performance of the satisfied employees. Phu Lam Branch was established in June

1995 with approximately 12 employees, and now it has growth with about 120

employees. For this reason, it is in top of contributor to the profit in ACB.

LUAN VAN CHAT LUONG download : add [email protected]

ENHANCE THE LEVEL OF EMPLOYEE ENGAGEMENT OF CREDIT OFFICER 3

Company Structure

Credit officers examine, evaluate and process applications for credit or loans

and, in commercial enterprises, control and process accounts. Credit officers is

known as Sale Staff in ACB – Phu Lam branch which divide into two major,

include credit officer for corporation and credit officer for individual customer.

Credit officer is one of the most important staff in ACB business process because

this staff makes a main profit for bank in general.

1.2. Problem symptom

To have the initial subjective and general information about currently

company personnel status of Phu Lam Branch, the writer collect secondary data

from HR Division report and conduct to preliminary short interviews with credit

department manager. Based on the interview results (Refer to Chapter 4 - part 4.1),

initially, the writer can get some basic information on currently status of the

company. Although, Phu Lam branch is one of the largest branches in ACB system

and has emerged as key contributor to the profit and the development in ACB,

however, Phu Lam Branch also encountered many personnel problem with the sale

staff such as low commitment, low employee productivity and high turnover rate.

LUAN VAN CHAT LUONG download : add [email protected]

ENHANCE THE LEVEL OF EMPLOYEE ENGAGEMENT OF CREDIT OFFICER 4

Firstly, these employees worked at different position in the sale department

such as relationship assistant (RA), relationship officer (RO), relationship manager

(RM), Personal Financial Consultant 1(PFC-1), Personal Financial Consultant 2

(PFC 2). According to the Human resource report, the turnover rate has been

increased significantly, 28% only for 6 first months 2015, compare with the rate of

16% for the whole 2014. There were 4 out of 24 people in 2014 and 10 out of 32

people in the first half year in 2015 left the company that account about 16 to 28

percent out of total employees. In fact, this number is considered as a high turnover

ratio for a one of big branch which contribute large profit for ACB. Since the

average turnover ratio in the first half year in 2015 is approximately 10% in ACB.

Phu Lam branch is one of the top in ACB, this figure will be a source for instability

alarm of the branch, must resolve this matter quickly. The result of statistical in

Table 1 showed that the comparison of employee leaving ratio in nearly two year.

According to Huselid (1995), he researched that a high turnover rate extremely have

negative effects in organization such as low productivity, higher cost in recruiting

and training new employee (Rousseau, 1984) and low future performance as well

(Baron, Hannan and Burton, 2001). Therefore; this is a bad symptom for any

organization if the high turnover ratio become more enlarges and develops

consistently

Table 1: The overall turnover rate in 2014 and the first half year in 2015 (Data

is provided from Phu Lam Branch - HR Division)

YEAR The first half

year in 2015

2014

Compulsory turnover 0 1

Voluntary turnover 10 3

Total of Employees who Left 10 4

Total of Employee 32 24

Employee Turnover rate 28% 16%

LUAN VAN CHAT LUONG download : add [email protected]