Low intrinsic motivation–problem of esnetworks vietnam co , ltd

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Nguyen Huu Quynh Phuong

LOW INTRINSIC MOTIVATION–
PROBLEM OF
ESNETWORKS VIETNAM CO., LTD.
MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2018

1


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Nguyen Huu Quynh Phuong

LOW INTRINSIC MOTIVATION–
PROBLEM OF
ESNETWORKS VIETNAM CO., LTD.
MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: TRAN HA MINH QUAN .PhD

Ho Chi Minh City – Year 2018

Executive summary
Vietnam has recently been regarded as a prospective destination of foreign
investment presented with its high-speed development. In which Japan is the leading
economic partner of Vietnam, the leader in ODA, the second largest foreign investor, the
third largest tourism destination and the forth major trading partner of Vietnam. As one of
the leading. However, there are potentially existing problems in the company which may
reduce the competition edge of organization and harm to its culture. This research was
commissioned to examine what problem in Esnetworks Vietnam Co., Ltd., the causes
leading to problem are and to suggest the validated solutions to deal with problem, which
are in line with company’s policy and resources.
Method of the analysis is combination between theory-informed and validated data,
collected through interview and survey to identify and confirm existence of the problem as
well as causes and alternative solutions.
From the general diagnosis of potential problem at Esnetworks Vietnam Co., Ltd.,
findings suggest the existence of low intrinsic motivation as the main problem. The study
examines 03 main Departments within the Company especially Business Avisory
Department. Low intrinsic motivation is analyzed in terms of its existence, antecedents,
consequences, and solutions are proposed to tackle such a problem. Finally, this report
indicates organization of actions to deal with problem in the lead time of one year and
limited budget approved by the company.


Recommendations discussed focus on two main causes of low intrinsic motivation
within the Company, which are job characteristic and Compensation and Benefits. The
report also investigated three accordant solutions:
-

Conduct clear job description

-

Provide ideal working environment

-

Complete the system of compensation and benefits

Total estimated cost to implement these 3 solutions is approximately 253 mil VND,
which is in line with company’s approved budget of 255 mil VND while benefit brought is
453 mil VND.
Since there is limitation of time and resources constrain as well as research exist such as
the current company conditions data did not provide enough information and only
sample of interviews are performed. However, the report provides diversified and
validated data in conjunction with theory to propose meaningful suggestion for
Esnetworks Vietnam Co., Ltd. to strengthen its personnel resources and organization
behaviors.


I.
1.

INTRODUCTION
The Company background
Firstly established in Vietnam in 2008 with initial name is Flagship, Es Networks

Vietnam Co., Ltd. (herein after referred as “Es Networks VN” or “The Company”) is 100%
directly invested by Es Networks Japan Co., Ltd. As described in the Figure 1, the
Company focuses on three segments: market entry, accounting/tax/labor, M&A and other
services. With an aim of establishment, Es Networks Vietnam’s main vision is to provide

professional consulting services such as accounting, investment and Human Resource
services for Japanese clients who have investment activities in Vietnam. The Company
provides consulting service for all procedures and problems from establishment to
termination the operation of the clients.


Figure 1. Business lines of Es Network Vietnam
Currently, Es Networks VN has two offices in Ho Chi Minh City and Ha Noi City
with around 56 employees. Given the short history of operation from establishment, Es
Networks VN owns the qualified employees who committed to provide the completed
services, the Company gains clients’ belief, therefore, its clients portfolio is expanded by
days. Even that the market of consulting companies is became more competitive nowadays,
the board of management and all of employees are building Es Networks VN’s position
more and more stable especially in Japanese segment.
Today, due to the investment stipulating policy of Vietnamese government, Vietnam
becomes more and more attractive investment destination for foreign investors, in which
Japanese investors are not exception. In advance of thinking about operation and generating
profit, those investors have to carry out procedures in compliance with the Vietnamese law,
tax regulations and other administrative procedures. For which, many consulting firms are
launched. Particularly, in segment of consulting firms that serving for Japanese investors,
except the leading position of companies from Big 4 group (PWC, Ernst and Young,
Deloitte and KPMG), there are a big competition from second tier companies, in which the
big rivals of Es Networks VN are KT accounting Vietnam, AGS Vietnam and I-Glocal
Co., Ltd. In which, I-Glocal Co., Ltd. is considered as the biggest rival.
2.

The Company structure


Figure 2. Organization chart of Es Network Vietnam

As mentioned above, Es Networks VN currently provides consulting services, the
company consists of three departments: Business Advisory Department (hereinafter
referred to as “BA Dept.”), Accounting Department (hereinafter referred to as “AC
Dept.”) and Administration Department (hereinafter referred to as “AD Dept.”)
accordingly. Each Department has its own function. The AC Dept. specializes in
providing the accounting services such as: tax compliance, tax advisory, booking
accounting books and financing advisory. BA Dept.’s main duties are seeking and directly
accessing the clients, the department with Japanese experts and other Vietnamese
experts that can use Japanese language excellently always play the role of listening,
explaining and providing alternatives directly for Japanese clients. Furthermore, BA
Dept. also providing Human Resource services including applying for visa, work
permit, calculating payroll and declaration of


personal income tax for Japanese clients. Finally, AD Dept. comprises director, manager,
human resource team and internal accounting team that is in charge of maintaining the
relationship with clients, authorities, internal human resources, financing, and further
general management.

Table 1. The Profit and Loss Summary of Es Network Vietnam
In 2015, Es Networks VN generated profit of 4,714 billion VND which is counted
about 57.28% of Sales. From 2015 to 2016 the operating profit increased 1.202 times while
the increase of that from 2016 to 2017 is up to 2.654 times. In general, the Company is
steady growth but it is still not reach its target over the years. However, the different
amount of profit between actual and target is insignificant. Moreover, the target amount
of sale and profit increases rapidly over the years. This means the Company is trying to
expand its market, hence, the number of clients are raised by years. However, the staffs of
the Company just raise a little bit and the current staffs are now facing with the problem of
overload.
II.

PROBLEM SYMPTOMS


In order to have an overview about the backlog issues within the company, we
conducted the initial interviews with 02 staffs of BA Dept. and AC Dept. and 03 managers
of 03 departments. The detail of these initial interview is displayed in Appendix 1. Due to


the nature of work, AC Dept. undertakes the accounting job for clients which is considered
as the specialized job. Therefore, they may have precise idea and judgment. AD Dept. is
the non- profit department which is responsible for the internal operations and support
other departments hence, they can stand on the management point of view to provide
unbiased judgments in the general way. In addition, the BA Dept. is the department that
generates the highest profit for the Company. The jobs in BA Dept. are also much more
distinctive with the others while its job content changes depend on the request of the
clients. As the most important Departments of the Company which has to communicate
with other teams while

working,

the

manager

and

staff

here

can

provide

multidimensional outlook about the Company. The study applies qualitative questions to
investigate the interviewee’s point of view about the problems existing in the Company.
1. The turnover rate status
From the interview with HR managers of the Company, the most prominent
symptoms that mentioned by many interviewers that currently the Company has high
turnover rate. In general, the turnover rates fluctuated over time. In 2017, the turnover rate
was 27% while in year 2016, such amount reached 20%. The table is collected base on
criteria by gender, age and departments of the Company. According to the table, there is no
significant upward or downward trend of gender in turnover rate is apparent. This means
turnover rates in the Company does not depend on the gender, the one rate for women was
essentially the same as that for men. The table below shows the turnover rate from 2015 to
2017:


Gender (%)
Male
Female
Age (%)
Under the age of 32
32 and above the age of 32
Department (%)
Administration Department
Accounting Department
Business Advisory Department
Turnover rates (%)

2015

2016

2017

45
55

47
53

49
51

70
30

75
25

80
20

20
20
60
15

25
20
55
20

25
15
60
27

Table 2. Turnover rate of Es Network Vietnam from 2015 to 2017
As stated in the above table, younger employees had higher turnover. The HR
manager believes that the younger ones are willing to take risk and challenge in their job,
from which they can gain more knowledge and experience for their future career, hence,
they quite easy to move and out the Company. On the other hand, middle-aged employees
who are from 32 year olds and above had lower turnover, probably because the middleaged employees has the tendency to stick with stable job, they conceive the important of
their job. Moreover, they afraid to change the working environment as starting the
interview and make acquaintance of new job, new colleague and new working style at their
age.
Finally, those with different job characteristic suffer higher turnover. For example, in
year 2017, the turnover rate for those with Administration Department was 25%; for those
with Accounting Department was 15%; while such rates of Business Advisory Department
was up to 60%. This pattern may arise because of job characteristic. The specific of
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Business Advisory Department requires that employees must to take the time to research
and update

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new regulations of the laws. The employee may work under high pressure during long time.
While employees from other department may do with stable job during working here.
2.

Over workload
The Company receives many complaints of employees regarding to the over

workload. Some employees experience a heavy workload for many reasons, including tight
deadlines, projects increase in the peak season that have caused staff shortages and
unplanned company growth that has created more work for the same staff. It can be
difficult to manage an overworked staff, and even the most dedicated employees often
reach their breaking points. The staffs face with the difficulties of work-life balance
because it’s an activity that needs to be maintained over time. Moreover, there is bad
meeting due to unsuitable reason for the meeting, poor agenda or none at all, the meeting
"creeps" its way into a several-hour ordeal, staff unprepared, and/or no contribution. The
staffs intend to keep silence during the meeting although they are offered for
contribution requirement from supervisor. Their managers do not receive any active
feedback regarding to work overload status or aspiration. Thus, there is no any
improvement or effective ways to change working style or encourage employee
motivation. This may lead to waste time and deflate energy for the participants.
3.

Low compensation and benefits

According to interview with Mrs. Doan Thi Nhu Truc, a staff of BA Dept. for her
experience during working time at The Company. She is disappointed about benefit policy

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applied for the employee. Especially, in the peak season of project increase that requires
employee must work overtime and get high pressure to meet the deadline, even they must
work for double person’s jobs. Even though, the employees shall receive the overtime
allowance, they still believe the few promotion and poor benefit cause lack of energy
and enthusiasm. In addition, another issue worth paying a special attention to is the
cooperation and support from colleagues. She mentioned about the attitude and expression
of the colleagues when shared the jobs. Accordingly, the employee may just want to keep
with current job instead of taking the time to research and do new tasks.
4.

Passive involvement
As the interview was conducted with Mrs. Tran Thi Thuy Linh stability - minded

employee who prefer a stable work than flexible work. She wants to spend working time in
a stable environment and remain unchanged. She does not want to try a new fields to
discover new chance and get promotion opportunity. She is afraid that she can’t catch up
and may face with risk for new challenges. Thus, she just finished her tasks as assigned
rather than taking the time to learn and do new things. Although there are several major
operations, they are still different in client’s business line and various specific cases that
arises in the reality of operations. Whenever the Company receives orders from the new
clients especially the client in the brand new fields, it has to make many researches about
that fields. The Company also has to bear the higher risk rate because it is the first time it
enters into the new market. That is the reason why unpredicted problems are mainly
occurred in the BA Dept. in various types and difficult to solve.


5.

Low job commitment
The interview with HR manager provides the general point of view through the

survey of the Company in the end of 2017. As Es Networks Japan desires to reform
the HR management within the Company to increase the job efficiency. They ask the
Administration Department to conduct the survey to take the employees’ opinion of the
following aspects: job satisfaction, work environment, job stress, job commitment,
working motivation, working effectiveness . The survey with 22 questions was send to
46 employees in the Company. The survey is considered as the basic understanding of
employees’ concern on current organization behavior. The survey has been done by all
employees in 03 departments and have the following result:
Result

Business Advisory

Accounting

Administration

Criteria

Dept.

Dep.

Dept.

Job satisfaction

61%

68%

71%

Work environment

51%

57%

54%

Job stress

76%

72%

68%

Job Commitment

38%

48%

51%

Working motivation

69%

60%

62%

Working effectiveness

82%

78%

79%

Table 2: Survey result of Es Networks Vietnam Co, Ltd. in 2017
The table result shows that in general the three departments have the same tendency.
The ratio of the job satisfaction, work environment, working motivation, working


effectiveness are higher than 50%, which are the acceptable ratios. The employees satisfy
with their job in acceptable ratios but not really highly satisfying. On the other hand, the
job stress ratios are quite high in all 03 departments. In which, the assessment of job stress
by BA Dept. ranks the highest position with 76%. One significant point from this survey is
that the job commitment in all departments are lower than 51%, especially BA Dept. with
only 38%.
Then, the interview was conducted with Mrs. Truc, a consultant and Mr. Hoa, an
accountant, they reveal that they intend to work for the Company for around 2-3 years for
gaining enough experience, knowledge then they will take the new challenge to get a
promotion opportunity. They tend to complete their tasks as acceptable level rather than

taking time to investigate new tasks from the others. The commitment to the organization is
low so their perception is to search for another job outside the Company.
In conclusion, based on the initial interview and the internal survey of the Company
in 2017, there are several symptoms of current problems that can be realized including:
high turnover rate, over workload, low performance appraisals, passive job
involvement, low job commitment. Even though it has not been defined which one is the
most important backlog of the Company, the Company still need to have the action plan
to solve these problems because they may partly influence the working efficiency of the
employees in particular and the whole Company in general.
III.

PROBLEM IDENTIFICATION


In order to identify the potential problem of the Company, the in-depth interview are
conducted with 05 interviewers including managers of 03 departments and an exemployees.


As mentioned before, the AC Dept. is responsible for specialized jobs, their characteristic
therefore distinctive with the others. The manager of AC Dept. is the one who
communicates and has regularly interactive with the staffs, her judgment will be precise
and show the actual status of employees. The BA Dept. is the most important department
which provides various services in different extensive fields, hence, the manager of this
team shall have the overall view from diversified perspectives. According to the internal
survey, the manager of AD Dept. has a certain understanding of the Company together
with her view of a HR manager, her idea is valuable in justifying the problems raised by
the interviews.
Similar to the initial interview, the qualitative questionnaire is applied to investigate
the most potential problem. Besides, with the aim of exploiting information thoroughly, the
wh-question and yes/no question are used interlace depending on each situation. The

interview will figure out the main problem currently existing in the Company from 05
symptoms above. The Appendix 2 is detailing the content of the in-dept interviews.
In generally, the turnover rate is increasing over the year. In which, the job
characteristic, over workload and job satisfaction may be the main factors which affect to
such rates. According to the statistic of the Company, BA Dept. reached the highest
turnover rate and AD Dept. ranks the second position.
Job satisfaction is one of factors influencing to turnover intentions. According to
survey was conducted among employees at the Company, the rate of job satisfaction is
acceptable. The employees are not satisfied with their job in case of job stress they may


face with. However, this situation only takes place during the peak season when employees
have


to work overload and it is irregular. Besides, as mentioned above, job stress may be caused
due to high turnover rate. It’s quite difficult for the Company to timely recruit new
employee replacing for employees who leave off work. Thus, current employees must
to receive handover and fulfill all tasks from others. Whether the Company has
found the new employees, job stress may be reduced. In sum, job satisfaction is not
completely positive related to turnover intention.
Job characteristic is an important key in organizational outcomes like job
satisfaction, Most of companies care about knowledge and experiences of candidates
when hiring the employees. While the employees may concern to company reputation
when they apply for job, they even don’t mind whether they fit to the employee
personality and value of work which brings to them. Some employees stick to the
Company for a long time because they prefer working in environment which fits to their
personality. So, when employees find the difference between individual and organizational,
their characteristic is opposite with work values, they may intend for turnover. However,
the fit between the individual and organization has been discovered easily for the

probation period. During two months of the probation period, the employees realize that
they may fit or not for job. On the other hand, the job characteristics also can be
approached in 2 aspects: unclear job description, repeated and boring works. Some
interviews shows that as the high work volume, in order to protect themselves the
employees tends to pass the jobs that have unclear job description to the others and
concentrate in their daily jobs. With the huge number of clients they have to serves,
their task area is limited and they cannot expand their knowledge and experience the


new field to find the work inspiration. Gradually, they feel boring about their job and loss
the inspiration to work. Then, as the result, the exit interview showed that the employees in
BA Dept. faced with the difficulties in maintaining their enthusiasm at work after 1-2
working years.
In a general expression, this relationship looks like a circle problem:

High turnover rate

Loss enthusiasm with work

Lack of suitable employees

Pressure to the remaining employees

Over workload

On the perspective of employees in AC Dept. and AD Dept., they are facing with
the problems in developing themselves, or lack of assiduous and creative characteristics to


work effectively. Different with BA Dept., their jobs are stable and remain mainly the same

from time to time. The majority of employees in these departments are satisfied with their
current jobs and behaviors so they have the tendency of maintaining their current
working style


without any significant improvement. As revealed by Ms. Chi, manager of AC Dept. and
her staff, Mr. Hoa, most of employees thinks that they want to maintain their stable life, do
not want to take change which is similar to take risk, so that it is easier for them to balance
their work- life. It can be said that with low intrinsic motivation, the employees cannot
fully express themselves, show their strength and potential abilities as well as they
cannot recognize their weakness to improve it. That is the reason why day by day, they feel
boring at work and become passive, do not want to strive and challenge themselves with
the new things. Low intrinsic motivation prevents employees to reach the high working
effectiveness and reduce the profitability of the Company.
One of the problem that is claimed by many interviewers is that the Company
provides low performance appraisals. It means the Company does not have the assessment
system to evaluate the working of the employees as well as the reward package is
evaluated as low comparing with the other Company. From which it affects the desire
of work of the employees. They do not want to take risk and receive more jobs because
they believe that even though they work harder or more effective, they still receive the
same salary. A staff of BA Dept. commented that as her colleague takes the maternity
leave or quit job, she has to cover multiple tasks in the time of personnel shortage in a
long time, she still received the same benefits as before. She felt it not fair when the
Company does not appreciate and evaluate her effort precisely. She believed that in such
case, no one is willing to take that challenges and share the burden with the Company. In
addition, an ex-employee of AC Dept. mentioned about the undefined career growth for
the employees. Unfair compensation and


benefit package as well as unclear career growth are the main reason that he decided to find

another opportunity outside the Company. He admits the compensation and benefit are the
motivation to push the employees’ performance and the Company satisfied it. It can be said
that the low intrinsic motivation prevents employees to have positive reactivity with their
jobs, and develop themselves while their benefit requirement remains unchanged.
In conclusion, there are several duplications in the result of the interviews, however
they can be summarized into 03 potentials problems occurring in the Company. They are
over workload, low extrinsic motivation and low intrinsic motivation. The table below shall
provide the main interview result from 04 interviewees:
No.

1

Interviewee

Mrs.

Over workload

Nguyen The number of over

Thi Lan Anh- time

increases

manager of BA significantly
Dept.

this

Low extrinsic

Low intrinsic

motivation

motivation
Staffs do not feel
motivated at work.
Staffs

protect

year

themselves

The staffs complaint

rejecting

about the job stress

unclear defined tasks.

and over workload

Staffs do not rearch or

by
other

try new strategy in


order

to

improve

working efficiency
2

Mrs.

Do

Le

Chi-

manager

The Company is Staffs do not feel
not

of AC Dept.

full enthusiasm

recognition and no work, do not want to
chance

for communicate

promotion
3

with

with

teammate, colleagues

Mrs. Dang Thi The Company lacked

Staffs just want to

Bich

maintain their stable

Van-

of human resource to

manager of AD distribute
Dept.

to

each

Dept.

life, do not want to
try new challenge, or
take risk

4

Mr.

Nguyen I’m always in job I feel unfair when Not interest at work

Minh Nhut- an stress, the number of I’m paid the same
ex-employee of clients I have to while I have to do
AC Dept.

serve are too much, more tasks
especially when one
of

my

colleage

quited his job.
Table : Summary the interview result of potential problems

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