Factors affecting employees's loyalty at Tien phong joint stock commercial bank - Thao dien branch

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UNIVERSITY OF BOLTON OFF CAMPUS DIVISION

ĐÀO NGUYỄN QUỲNH GIAO

FACTORS AFFECTING EMPLOYEES’S LOYALTY AT TIEN PHONG JOINT STOCK COMMERCIAL BANK – THAO DIEN BRANCH.

BSc (Hons) Business Management

Module name: BAM6001 Dissertation Module’s leader: Dr. David Racliffe

Student ID: 2124765 Submission date: 1 May 2023

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DECLARATION

I hereby declare that the research paper ―Factors affecting employees’ loyalty at Tien Phong Joint Stock Commercial bank – Thao Dien branch.‖ is the result of my own research. Except for the reference content from other works as stated in the thesis, the survey data, research results given in the thesis are honest, I would like to take full responsibility for the content of this research topic.

Ho Chi Minh city, 27/12/2022

Author

Đào Nguyễn Quỳnh Giao

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ACKNOWLEDGEMENT

I sincerely thank the teachers at the Institute of International Training - Banking University of Ho Chi Minh City for their enthusiastic guidance, encouragement and guidance during my study at Banking University. I would like to thank my instructor Dr. David Radcliffe and my supervisor Dr. Begum Asma for their enthusiastic guidance and useful comments so that I can complete the report smoothly.

I would also like to thank the staff and leaders of TPBank Branch for their help, support and enthusiastic advice, especially in helping me gather information for my dissertation.

Although there has been careful guidance from the Instructor along with the leadership of TPBank Branch, however, as a student with limited

knowledge, lack of practical experience, in-depth knowledge and limited resource. Also due to the limited time of research, the content of this report may have many unnecessary errors. Therefore, I look forward to receiving comments from teachers to improve the topic.

Thank you sincerely!

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1.3. The subject and scope of the study ...10

1.3.1. The research subject ... 10

1.3.2. The research scope ... 10

1.4. Research methodology ...10

1.5. Research findings ...11

1.6. Research structure ...11

Chapter 2: LITERATURE REVIEW ... 13

2.1. Basic theories of loyalty ...13

2.2 Factors affecting loyalty ...16

2.2.1. Salary ... 17

2.2.2. Welfare and policies ... 18

2.2.3. Work environment ... 19

2.2.4. Relationship with colleagues ... 20

2.2.5. Relationships with Leaders/Supervisor ... 20

2.2. Theoritical basis ...21

2.2.1. Maslow’s hierarchy of needs (1943) ... 21

2.2.2. Herzberg Two-Factor theory ... 23

2.2.3. Vroom’s expectancy theory of motivation ... 24

2.3. An overview of previous research ... 25

CHAPTER III: METHODOLOGY ... 34

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4.1. General introduction about Tien Phong Bank ...46

4.1.1. Overview of Tien Phong Commercial Joint Stock Bank ... 46

4.1.2. Functions, tasks and operating principles ... 46

4.1.3. Organizational structure ... 47

Figure 4.1: Organizational structure of human resources and labor situation of City Bank - Thao Dien Branch ... 47

4.2. Research results ...48

4.3. Survey sample characteristics ...48

4.4. Preliminary assessment of the scale ...53

4.4.1. Scale of independent variables ... 54

4.4.2. Scale of dependent variable (Loyalty) ... 54

4.5. EFA (Exploratory Fator Analysis) ...55

4.6. Correlation and regression analysis ...56

CHAPTER V: CONCLUSION AND RECOMMENDATIONS ... 59

5.1. Solutions and recommendations ...59

5.1.1. Salary recommendations ... 59

5.1.2. Recommendations on welfare policy ... 59

5.1.3. Recommendations on working environment ... 60

5.1.4. Recommendations on the relationship between leaders and employees: ... 61

5.2. Conclusions ...61

5.2.1. Limitations of the study and suggestions for further research ... 62

APPENDIX 1: OFFICIAL STUDY ... 63

APPENDIX 2: OFFICIAL RESEARCH RESULTS ... 68

2.1. Google forms result ...68

2.2. Check the reliability of the scale by Cronbach's Alpha analysis ...82

APPENDIX 3: RESEARCH ETHICS ... 91

Reference list ... 93

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LIST OF TABLES AND FIGURES

Figure 1.1. Factors affecting employees’ loyalty at manufacturing company in

Malaysia (Omar, Jusoff, and Hussin, 2010). ... 25

Figure 1.2. Factors affecting employee loyalty in a large international hotel chain (Martensen and Gronholdt, 2006) ... 27

Figure 1.3. Factors affecting employee loyalty in an Austrian company in the utility sector (Matzler and Renzl, 2006) ... 28

Figure 1.4 Conceptual framework ... Error! Bookmark not defined.Table 2.1. Preliminary scale table Salary ... 30

Table 2.2 Preliminary scale table Working environment ... 30

Table 2.3 Preliminary scale table Welfare ... 30

Table 2.4 Preliminary scale table Relationship with colleagues ... 31

Table 2.5 Preliminary scale table Relationship with leader ... 31

Table 2.5 Preliminary scale table Loyalty of employee ... 31

Table 2.6. Preliminary survey of differences of personal characteristics on employee loyalty ... 32

Figure 3.1 The Research Onion Framework (Saunders et al., 2009) ... 35

Figure 3.4 Deductive research (Saylor Academy, 2011) ... 38

Figure 3.5 Inductive research (Saylor Academy, 2011) ... 39

Figure 4.1: Organizational structure of human resources and labor situation of City Bank - Thao Dien Branch ... 47

Table 4.1. Preliminary scale table Salary affecting the loyalty of employee (S1) ... 50

Table 4.2. Preliminary scale table Welfare affecting the loyalty of employee (WF2) .. 50

Table 4.3. Preliminary scale table Working environment affecting the loyalty of employee (W2) ... 50

Table 4.4. Preliminary scale table Relationship with colleagues affecting the loyalty of employee (RC4 ... 51

Table 4.5. Preliminary scale table Relationship with leaders affecting the loyalty of employee (RL5) ... 52

Table 4.6. Preliminary scale table Loyalty of employee (L6) ... 52

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ACRONYMS

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Chapter I: INTRODUCTION

1.1. Context and background

Today, with the market's escalatingly intense competitive pressure and the rapid advancement of the fourth industrial revolution. Businesses of today must constantly take steps to ensure their continued existence while also coming up with new ideas and innovations on a regular basis to satisfy the market's rising demands.

Therefore, every business is aware that having adequate human resources is one of the most important things it can do to increase the effectiveness of its operations, grow sustainably, gain a competitive advantage, and

perform better overall. The stability and sustainability of human resources, particularly good human resources, is one of the key elements that must be implemented and maintained.

The previous theories state that one of the key elements in human resource management is the preservation of human resources. At the moment, companies outside the industry are competing fiercely for

employees, as well as within companies in the industry. Therefore, one of the factors impeding business growth is the fluctuation of human resources, a real issue that every company in the market must deal with. But when specific measures are taken, having a group of devoted, loyal employees will have a positive effect on assisting businesses in moving forward with their development.

As is well known, Vietnam is now taking further steps toward economic integration with the rest of the world, which has altered the thinking of business managers and helped them to clearly perceive more about the

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environment, salary and bonus policies, benefits, etc. to retain employees. All businesses, especially service businesses, depend on the involvement of people to operate. The human factor is a major factor in determining a company's success. Employee retention is thus a challenging issue that human resource managers constantly encounter. In fact, it can be

challenging to find the right candidates for the job, and it can be even

harder to keep them on board. Whether an employee chooses to leave the company after completing the training process or after gaining experience after a period of employment is one of the hardest problems for employers to solve. Particularly when they look to competitive businesses, the

company's direct rivals, and bring in significant clients with them.

This is why, despite ranking among the professions with the highest attraction for young people today, the banking industry is facing many significant challenges that cause employees to want to leave their jobs. These challenges include uncompetitive salary and remuneration,

excessive work pressure, and concern over legal risks (Tap chi tai chinh, 2021). Additionally, statistics show that bank staff turnover is on the rise, and that when key employees leave in succession, underground waves will follow due to the domino effect, this is will caused a great problem within the bank.

1.2. Research objective 1.2.1. Overall objective

The research objective is to analyze the current status of employee loyalty at the Tien Phong Commercial Joint Stock Bank's - Thao Dien Branch (TP Bank) in order to develop solutions to raise employee loyalty at TP Bank over the next two years.

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1.2.2. Detailed objective

Specifically, the study aims to achieve the following objectives:

- Conducting a critical literature review about the concept of loyalty - Analyzing the current status of employee loyalty at Tien Phong

Commercial Joint Stock Bank

- To propose some solutions to help improve employee loyalty at TP Bank - Thao Dien Branch.

1.3. The subject and scope of the study 1.3.1. The research subject

The object of the study: Focus on the employees' loyalty to Tien Phong Commercial Joint Stock Bank.

Subject of the study: The subjects of this study are bank employees who work at the TP Bank branch in Thao Dien.

1.3.2. The research scope

In order to evaluate the standing and loyalty of bank employees at TP Bank, the author uses statistical methods, synthesizes, compares, and analyses operational reports and statistical reports of Tien Phong

Commercial Joint Stock Bank.

Primary data

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Through the review of theoretical background material, focus group discussions, and interviews with managers and staff members at the TP Bank - Thao Dien branch, the study employed qualitative research

methods. We also conducted interviews with a number of former workers who had left within the previous six months. From there, asses the extent and factorrs affecting the loyalty of bankers. The adjusted statements will be included in the Survey Questionaire – the data collection tool in the official research.

Quantitative research

The primary research methodology for this study will also be quantitative. The author will assess the level of loyalty and the factors influencing the loyalty of bank employees after completing the complete scale from the preliminary research process combined with secondary data at the bank.

1.5. Research findings

The study will provide practical information to help the board of directors of Tien Phong Commercial Joint Stock Bank – Thao Dien branch have a deeper understanding and a more realistic view of the status of employee loyalty, they can be aware of the reasons why employees leave the

organization. From there, propose solutions and cary out appropriate policy adjustments and reforms to attract and retain significant good human

resources who have worked for the bank for a long time.

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Chapter 3: Reality of loyalty and factors affecting the loyalty of bankers at Tien Phong Commercial Joint Stock Bank.

Chapter 4: Solutions to improve the loyalty of bankers at Tien Phong Commercial Joint Stock Bank.

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In general, the term ―loyalty‖ refers to a person’s devotion or sentiment of attachment to a specific object, which could be another person or group of people, an ideal, a duty, or a cause. It manifests in both thought and action and aims to align the loyal person’s interest with the object of allegiance (Encyclopedia Britannica, 1998).

According to (Grosman, 1989) The last few decades have seen an

occasional but significant presence of loyalty in the literature on business ethics. Recent discussion about the changing nature of the employment relationship have sparked a lot of interest in loyalty. He also believed that it’s difficult to define loyalty. It very much depends on who you ask. An employee thinks that the corporate employer’s loyalty guarantees that she will be taken care of. It denotes an extended commitment on the part of the employer. It implies that he will be paid well if he performs his duties and will work for a long period of time at the company.

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(Antoncic and Antoncic, 2011) also makes this point that loyalty is the perception that employees have of the company’s future direction and development, which has an effect on day-to-day operations. It is thought that the psychological ties that bind people to the organizations they have worked for- whether they take the form of internalization, identification, or consent, are what bind them.

(Omar, Jusoff and Hussin, 2010) stated in his journal that employee commitment can be viewed as an example of employee loyalty. An affective commitment among employees is what is meant by ―employee loyalty‖. Affective commitment is defined as the desire of a worker wanting to maintain a relationship with a particular employer because the worker enjoys the relationship for its own sake, apart from its practical value, and because they feel a sense of loyalty and belonging.

On the other hand, (Elegido, 2013) assumed that loyalty is viewed as a form of employee outcomes commitment to the organization, and it calls for the employee’s action to have a greater interest in the manager or the

business. While loyalty can play a significant role in a company’s commitment, it can also be a stand-alone concept.

Similarly, (Guillon and Cezanne, 2014) points to the fact that employee loyalty can be defined as an attitudinal tendency toward identification, attachment, commitment, or trust toward the organization that manifests itself in a variety of behaviors, ―forms,‖ or ―indicators.‖

Additionally, in the attitudinal approach, commitment to the organization or identification with attachment are examples of what are referred to as "feelings" that are associated with loyalty. (Guillon and Cezanne, 2014) The shortage of outstanding human resources in Vietnam during this time

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market more competitive than ever. Some young people view work as a chance to learn and grow as individuals, which contrasts with the changing mindset of today's youth who prioritize financial security when choosing a job. Even today, some managers still prefer to work with competent

employees for a short period of time rather than wanting to stick with with long-term workers who have remained with the company for their entire careers but are less competent.

Thus, it is clear that loyalty refers to a person's commitment to an

organization who wants to stay for a long time and is willing to put in the effort to make the organization or business profitable.

The role and importance of employee loyalty

It will take a lot of work and time to rebuild the welfare and salary policies for the positions when there are frequent personnel changes in a short period of time, and this will also lead to many deficiencies. managing data and personnel records. Additionally, the abrupt departure of key personnel will have a negative impact on the company's business performance.

What's even riskier is that when those employees quit, they will bring all the customers along with them and the company will lose clients ,they can also divulge details about the company’s products to rival companies, and

damage the company reputation in the marketplace.

Currently, a lot of businesses are reluctant to make personnel changes, particularly in the service industries like banking. Specifically, during

periods of high demand when the business needs to distribute, launch, and expand its market. The lack of staff will make certain workplace challenges, which will have an impact on business performance, service quality, client satisfaction, and the company's profits.

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Moreover, the spirit and working attitude of the employees working at the company will be unintentionally affected when employees leave the

organization one after another, especially the key personnel. This will inadvertently cause a domino effect when employees repeatedly leave the company because of the departure of previous people. In the current

market, especially in the service sector, this is very typical.

To conclude, it is clear that employee loyalty is a crucial tool for the

company to use to enhance the caliber of business operations while saving money on hiring and training expenses. Long-term employees have the advantage of developing a thorough understanding of the organization's system, products, organizational culture, working style, etc., which will positively affect the business's revenue and profits.

2.2 Factors affecting loyalty

Nowadays, employees are obtaining higher levels of education and

bringing more abilities and skills to the workplace. Higher expectations and a greater understanding of the significant social, ethical, and environmental issues that local and global societies are facing have come along with this improvement in education. This demonstrates that employees today are more conscious of their own values and demand fundamental and

consistent standards from the company, which will encourage them to stay with the business for an extended period of time. According to (Nguyen et al., 2020) have found that there are a total of 6 factors affecting employee loyalty: colleagues, leaders, job characteristics, policies, organizational culture, and working environment.

Again, it is possible to see how (Omar, Jusoff and Hussin, 2010) also share the similar idea, according to them, factors like salary and recognition,

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and leaders all have a strong impact on how loyal an employee is to the company. Omar and his colleagues based their research on conducting a survey at a manufacturing company.

However, (Matzler and Renzl, 2006) argues that employee satisfaction is one of the strongest determinant of organizational commitment and loyalty. Whereas trust in management and trust in peers is positively related to employee satisfaction.

We can identify some of the variables that have been examined in the majority of studies on employee loyalty by referencing the definitions of loyalty and the studies mentioned above, including: salary, welfare, work environment, work colleagues and work leaders.

Besides, (Parker, 2000) pointed out that the basis of the contract and

understanding between the employer and the employee is fair pay, and the salary also has an impact on how employees behave and approach their jobs. Additionally, (Chew, 2004) contends that salary policies are important in motivating and keeping employees, but communicating salary and bonus policies is just as crucial.

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2.2.2. Welfare and policies

The term "employee welfare" refers to the perks and benefits that an organization offers its staff members in addition to their regular pay or compensation. The primary goal of providing employee benefits services is to enhance or improve the wellbeing of the staff members (Anjali, 2020). According to (Wei, Nan and Wei, 2020) incentive theory, by giving

employees better welfare can encourage them to put in extra effort and, as a result, increase the corporate value. Additionally, the promotion of

employee engagement, which ultimately results in higher performance and increased shareholder value, depends in particular on welfare.

(Levine,1992) and (Wadhwani and Wall, 1991) find evidence supporting this claim that higher wages increase productivity.

Mandatory and voluntary corporate welfare are both included. The minimum benefits that are required of all businesses include social

insurance, health insurance, and unemployment insurance. The majority of welfare are optional policies provided by businesses, depending on their financial capacity and owner’s interest, which includes some optional benefits like retirement, holidays and allowances for employees with difficult circumstances, etc.

(Tran Thi, 2011) believes that having a good welfare system will make employees more engaged at work as well as more attached to and loyal to the company. The indirect payment made by the company to its workers, known as welfare, demonstrates its concern for them. No matter the

position, degree of completion of the work, skills, or qualifications, benefits must be distributed consistently.

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2.2.3. Work environment

In addition to the factors already mentioned, the working environment is a factor that employees constantly worry about because it relates to their personal convenience while also having an influence on how well they complete their tasks.

(Krishna, 2014) believe that an employee is more likely to stick with a company, organization, association, or business if they can do what they love, believe in the mission and vision of their employers, and suround themselves with co-workers they enjoy being around.

According to (Omar, Jusoff, and Hussin, 2010) almost every employee wants to work in a good working environment. That is true because the workplace gives a glimpse into the daily lives of those who report to work, perform their duties, and comply to company policies. Addittionally, content and satisfy employees foster an environment that is conductive to

productivity and fun. Furthermore, according to a business researcher, people tend to enjoy and flourish in environments that fostẻ a positive work culture.

A good working environment will positively impact employees in improving work performance. This is one way to be taken so that employees can carry out their duties without experience interference because the work environment dramatically affects employee (Noviantoro, 2022).

Similarly, (Kamarulzaman et al., 2011) also makes the same point that employees spend the majority of their time at work, and it has a significant impact on them, a satisfied work environment can contribute to more

favorable work outcomes. This is because employees’ work environment plays a significant role in their work lives.

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2.2.4. Relationship with colleagues

Employee loyalty among coworkers is affected by a number of factors, such as behavioral issues and karmic relationships at work. (Tran Thi, 2005)

According to (Priti, n.d.) an employee may likely to find a different job if they feels emotionally or socially detached at work and cannot seem to fit into the organization’s culture or blend with other colleagues.

One form of social support provided by organization is known as ―colleague support‖, and it is defined as an interpersonal interaction in which one

person helps another person within the organization. This shows that workplace support has an impact on job satisfaction. It demonstrates that the more one receives from coworkers, the more satisfied they are with their jobs. (Adriyanto, 2020). One of the key determinants of whether employees choose to remain with the company and contribute or not is in the quality of the relationship between coworkers. This partly determines whether they speak highly of the business, recommend it to others as a great place to work, and whether employee make an effort to add value to the company.

2.2.5. Relationships with Leaders/Supervisor

Leaders have a strong source of influence on employees’ work behavior, according to (Omar, Jusoff and Hussin, 2010) a good relationship with top management can foster organizational commitment. Enhancing the

relationship and communication between leaders and subordinates may be a key concern in organizational management.

Similarly, (Humphrey, 2002) believe that leaders’ emotions and related competencies can have an impact on subordinates either directly or

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emotion-through which a leader affects subordinates’ feelings, perceptions, and behavior.

The author (Logan, 1984) also stressed the importance of leaders conveying the organization's common goals, the positive things the business is aiming for, and instilling those values in all members. Even if they don't receive as many benefits as they would like, this encourages employees to keep working hard, stay with the business, and support its objectives. As a result, a leader must first be able to define the proper vision and goals for the organization. Then, they must be able to effectively communicate these goals to employees so that they can see the future and the significance of their contributions in the present and join forces with the leader to make the vision a reality.

Employees frequently observe the actions and words of their managers and gather important information from them. Then they act according to what is most appropriate given the circumstances. Employees may feel emotionally safe at work if their managers support them in being true to themeselves, accept them without conditions, and assit them in addressing their inner feelings (Lu, Zhang and Jia, 2018).

The studies mentioned above show that in order to inspire, uplift, and support staff in the most effective manner, leaders must be able to comprehend from the perspective of others.

2.2. Theoritical basis

2.2.1. Maslow’s hierarchy of needs (1943)

Maslow’s hierarchy of needs is a psychological theory of motivation that includes a five-tier model of human needs that is frequently represented as levels within a pyramid.

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Picture 1. Maslow’s Hierarchy of needs (1943)

According to the picture above, in order for individuals to attend higher level up, the needs lower down in the hierarchy must be satisfied. The needs include physiological, safety, love and belonging, esteem and self-

actualization, going up the hierarchy in order of importance (Mcleod, 2023). In his research (Maslow, 1943) stated that some needs take priority over others and that people are driven to fulfill their demands. Maslow

categorized human requirements into basic, intermediate, and advanced need using a hierarchical structure; Physiological needs (basic needs include a pay and benefits to support a minimal standard of living, which includes eating, sleeping,…); Safety needs (life and health safety must be a top priority at work); Belongingness and love needs (a welcoming

workplace where employees can talk with and learn from leaders and other employees);Esteem needs (social status, labor values, materials and

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leadership);Self-actualization (to be given the opportunity to develop

abilities and apply creativity to work, to be encouraged to participate in the improvement process of enterprises and organizations). According to

Maslow, if a person’s basic requirements are met, they will naturally start to have higher-order needs. Their needs also vary on a variety of other

aspects, including career stage, organization size, geographic region, culture, etc.

Enterprise leaders and managers must comprehend the level of need that each of their employees is experiencing to apply Maslow’s pyramid to human resource management. If leaders can comprehend the psychology of employees, we can simply change their psychology, motivating them to work hard and stay with the company for an extended period of time. Good and senior personnel are a very significant asset for every company in the current environment of intense rivalry, and no management wants to lose exceptional talent to rivals competition. In order to keep talent in the organization, the human resource strategy that incorporates Maslow’s hierarchy of needs is helpful.

2.2.2. Herzberg Two-Factor theory

Herzberg, Mausner, and Snyderman were influenced by Maslow's hierarchy of requirements when they developed the motivation-hygiene theory and published the two-factor model of work motivation in 1959 (Jones, 2011)

According to certain research, when employees are unhappy at work, don't feel motivated to work, or no longer feel at home working there, they are more likely to leave the company. Finding motivational variables, or so-called intrinsic factors, such as achieving desired results, organizational recognition, leadership and colleagues, responsibility, development, career

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advancement, and desired growth, is one of the key objectives of this approach. Employees will work more and harder when motivational

elements are successfully addressed. The maintenance factor, also known as the external component, includes the primary framework of the

company. When the working environment is unsuitable or filled with

injustice, relationships between coworkers and those at all levels (superior and subordinate) are strained. There won't be any instances of employees becoming unsatisfied with their employment when the maintenance-related issues are satisfactorily resolved.

It follows from this that managers must balance the two human resource management variables of motivators and hygiene factors in order to ensure that workers are content with the tasks they are given, depending on their personality and skills. They will be more devoted to the company once they have the chance to study, advance in their careers, and get promoted.

2.2.3. Vroom’s expectancy theory of motivation

Vroom’s expectancy theory of motivation assumed that employees will strive to work more when they receive a commendable incentive that is significant, in line with their personal and organizational goals.

So, in order to become a strong leader and be able to inspire and keep his or her team members, the manager must be aware of how each person thinks in order to explain to them the connection between effort and outcomes. Following that, they will put in a lot of effort and stick with the company for a while.

Conclusion: Considering the aforementioned theoretical basis, it is clear

that in order to determine an employees’s loyalty, both business-related and personal aspects must be taken into account. It can increase employee

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loyalty by balancing the needs of the company with those of the employees and understanding and addressing those needs.

2.3. An overview of previous research

Research by Maznah Wan Omar, Kamaruzaman Jusoff and Harniyati

Hussin (2010). Employee Motivation and its Impact on Employee Loyalty.

(Omar, Jusoff, and Hussin, 2010) had investigated Malaysian

manufacturing company employee loyalty. They believe that employee loyalty is influenced by the following factors based on a survey they

conducted with 185 random employees at a large manufacturing company in Malaysia, using the distribution of surveys included a measurment using five intervals on the Likert scale, from ―strongly agree‖ to ―strongly

disagree‖: salary, recognition, and bonuses; working conditions; position and job title; relationships with leaders and peers.

The results show that employee loyalty is affected by the factors shown in Figure 1.1

Figure 1.1. Factors affecting employees’ loyalty at manufacturing company in Malaysia (Omar, Jusoff, and Hussin, 2010).

Salary, regconition and bonuses

Relationship with leaders and peers

Position and job title Working conditions

Employee loyalty

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Research by Anne Martensen and Lars Gronholdt (2006). Internal

marketing: A study of employee loyalty, its determinants and consequences.

To create and implement an employee loyalty model, (Martensen and Gronholdt, 2006) conducted research at an international hotel chain. The author's research revealed a link between consumer loyalty, employee loyalty, and business success.

The two authors also make reference to internal marketing since

employees act as internal customers and view their work as a product that the organization sells to meet their requirements as well as their wants and organizational objectives. The study highlights the following elements that have an impact on employee loyalty: Leadership; Human relation and values; Personal development and competecies; Job contents; Creativity and innovation; Customer orientation.

The results show that employee loyalty is affected by the factors shown in Figure 1.2

Employee loyalty

Leadership

Human relation and values

Personal development and competecies

Job contents

Creativity and innovations

Customer orientation

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Figure 1.2. Factors affecting employee loyalty in a large international hotel chain (Martensen and Gronholdt, 2006)

Research by Kurt Matzler and Birgit Renzl (2006). The relationship

between Interpersonal Trust, Employee Satisfaction, and Employee Loyalty.

According to (Matzler and Renzl, 2006) one of the most significant

influences on productivity, quality, and consnumer happiness is thought to be employee satisfaction. The author strongly believed that employee happiness and loyalty are significantly influenced by interpersonal trust (confidence in peers and in management). The author examined employee satisfaction, loyalty, and trust in management and peers for an Austrian company in the energy industry to examine the links between these variables.

The results show that employee loyalty is affected by the factors shown in Figure 1.3

Trust in management

Employee satisfaction

Trust in peers

Employee loyalty

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Figure 1.3. Factors affecting employee loyalty in an Austrian company in the utility sector (Matzler and Renzl, 2006)

The findings of earlier studies indicate that a variety of factors influence employee loyalty, but the author will only focus on a few factors why an employee might desire to quit that are extensively discussed in the sections that follow. These variables were also chosen based on the outcomes of preliminary interviews with employees of the TP Bank Thao Dien Branch. The author also finds that the research model of (Omar, Jusoff, and Hussin, 2010) combined with the research model of (Martensen and Gronholdt, 2006) are related. Therefore, the author has distilled the elements of the two studies and used that as a premise for this research model, including 5 variables: Salary (H1); Welfare and policies (H2), Working environment (H3), Relationship with colleagues (H4); Relationship with Leaders and Supervisors (5).

H1 (+)

H2 (+)

H3 (+) H4 (+)

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Figure 1.4 Conceptual framework

H1: If employees are paid fairly with the effort they put in, employees will

stick with the Bank for a long time.

H2: The quality of life for employees will increase if the Bank has a good

welfare program.

H3: If employees work in a clean and professional environment, their work

productivity will be higher.

H4: Employees will be more invested in their jobs if they have strong

relationships with their coworkers.

H5: Employees will feel better and at ease working at the Bank if

management treat them fairly.

The scale of independent factors, observed variables, and the loyalty scale from the study by (Omar, Jusoff, and Hussin, 2010) are also used as a foundation by the author. For the purposes of conducting preliminary research, this scale is used to evaluate the degree of loyalty and the variables influencing loyalty among TPBank workers.

Preliminary scale Salary

Salary

You believe that your income can ensure your life

You feel that your current salary is fair considering your ability to work and your contribution to the bank

You feel that your bank is fair in paying employees' salaries, bonuses, and benefits

You are happy with the bank's benefits to employee such as meal support, presents on birthday

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Table 2.1. Preliminary scale table Salary

Preliminary scale Working environment

Table 2.2 Preliminary scale table Working environment

Preliminary scale Welfare

The company has a good social insurance and health insurance regime

Table 2.3 Preliminary scale table Welfare

Preliminary scale of Relationship with colleagues

Relationship with colleagues

Your coworkers are cordial and have a positive attitude toward working

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You coworkers are willing to give their insights and counsel when you need them

Your colleagues have team spirit, act for the common good of the group

There is a healthy competition among individuals in the promotion process of the Bank

Table 2.4 Preliminary scale table Relationship with colleagues

Preliminary scale Relationship with leaders

Relationship with leaders

You are treated fairly and without discrimination by your superiors You always feel professionally assisted, instructed, and guided in the workplace at the appropriate moment to finish the work

You feel that the superiors value the talents and contributions of employees

Table 2.5 Preliminary scale table Relationship with leaders

Preliminary scale Loyalty of employee

Loyalty of employee

You would like to introduce the Bank as a good place to work? You will stay at the bank even if other places offer a more attractive income

You intend to work with the company for a long time.

Table 2.5 Preliminary scale table Loyalty of employee

Observed variables

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Table 2.6. Preliminary survey of differences of personal characteristics on employee loyalty

- Female - Other

- 26-35 - 35-50 - Above 50

- Staff

- From 3 million – 5 million - From 5 million – 10 million - Above 10 million

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Chapter 2 Summary

This chapter’s analysis of theories, studies, and definitions of loyalty

focuses on aspects that have been and are currently being investigated in domestic and international context in relation to employee loyalty working at Tien Phong Commercial Joint Stock Bank by conducting surveys on staff members to provide a foundation for choosing research models and

preliminary scales. The research assumption was chose based on the findings of the research model developed by (Omar, Jusoff, and Hussin, 2010).

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CHAPTER III: METHODOLOGY 3.1. Introduction

According to (Melnikovas and Žemaitis, 2019) A methodology is a

comprehensive research approach that outlines how research should be conducted. The selection of the research methodology is influenced by a set of assumptions and philosophical presumptions that define how the research questions are understood. A dissertation or thesis must include a research approach that helps to maintain consistency among the

techniques, tools, and underlying philosophical assumptions. Additionally, to make sure that the research findings are more reliable, this study will make use of the research framework created by (Saunders, Lewis, and Thornhill, 2019).

The theoretical idea of the ―research onion‖ serves as the foundation for one technique of research methodology building (Figure 3.1). The research onion gives a very extensive explanation of the layers and the steps that are essential to finish building an eficient methodology.

The study design, which contains the main methods and procedures for obtaining and analyzing data, is produced by the research methodology by starting with the central idea, choosing approaches, methods, and tactics, as well as creating time horizons. (Figure 3.1)

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Figure 3.1 The Research Onion Framework (Saunders et al., 2009)

3.2. Research philosophy

Research is said to be a set of assumptions and convictions towards the growth of knowledge. A credible research philosophy will consist of a collection of assumptions that are well-considered and consistent (Saunders et al, 2019). The author will only emphasize three research methodologies in this study, including: positivism, and interpretivism.

3.2.1. Positivism

A positivist research takes the premise that knowledge only happens

outside of what’s being investigated. To put it in another way, the study can only be conducted objectively and cannot take into account the

researcher’s personal belief or viewpoints. Instead, the researcher must

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simply observe (Jansen, 2021). Furthermore, it mostly represents the philosophical outlook of natural scientists. Ontology is predicated on the objectivism that entities are observable, atomistic events, and... As a result, only empirical and observational evidence can be deemed "credible"

(Melnikovas and Zemaitis, 2019). To conduct a positivist study, the researchers must therefore disregard their point of view and attitudes toward the issue they are investigating. However, there is one issue from which they are unable to turn away.

(Alamgeer, 2022) possessing the same mentality that, in contrast to positivism, interpretivism is employed in qualitative research to gain a deeper knowledge of a process or phenomenon and that it is influenced by the assumptions of human actions and behavior. In other words, it is well known that interpretivist research is a critique of positivism.

Every approach has advantages and disadvantages based on the sort of

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provided questions, so it is crucial that the researcher is clear about which method they want to utilize. Because this study uses both a quantitative and a qualitative technique to clarify its objectives, both positivism and interpretivism are used as philosophical frameworks.

3.3. Research approach

According to (Saunders et al., 2009) research onion there are three main types of research approaches. Research approach is also known to be very important because it decides if the researcher is choosing the right

approach. As deductive reasoning leads to specific conclusions based on logical requirements and created theory is either tested or verified by data collection, the deductive theory creation approach may be related with forecasting (Melnikovas and Zemaitis, 2019).

3.3.1. Deductive approach

As (Saunders et al, 2016) stated in his research that deductive research is a term used to describe the process of reasoning that goes from broad rule to basically a law-like interference, typically being used for theory testing. Therefore, when researchers want to conduct deductive research, they have to based it on theory and testing their reasoning on these theories. According to (Saylor Academy, 2011) Deductive reasoning is the type of study methodology that most people associate with science. The

researcher examines prior study on the subject, looks into what others have found, and then tests the theories' resulting hypotheses. And also, in order to acquire quantitative data, deductive reasoning must be used (Saunders et al., 2007).

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Figure 3.4 Deductive research (Saylor Academy, 2011)

3.3.2. Inductive approach

In order for an inductive approach for his or her topic to be interesting and accurate the researcher first needs to start by using qualitative method. This mean that the first thing the researcher need to do is collecting data that is completely relevant to his or her topic of interest. Therefore, after gathering a sizable amount of data, the research will stop gathering data and step back to gain a bird’s eye view of his or her findings. Once, the data is collected and analyze the research will look for the pattern in the data, while attempting to create a hypothesis that may account for those patterns (Saylor Academy, 2011). In conclusion, it is very important to note that in the inductive approach finding the context of the problem is the main key issue, unlike the deductive approach where the researchers have to use large samples.

However, this is also not entirely correct because each approach has its own benefits and limitations, so when applying both of the above

approaches in the same study will help the researcher leverage the benefits of both strategies’ mutual assistance.

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Figure 3.5 Inductive research (Saylor Academy, 2011)

3.4. Research strategy

There are two primary categories of research methodologies that are frequently employed: qualitative and quantitative. According to (Saunders et al., 2016) the strategy for gathering and evaluating data in accordance with the type of data, whether it is numerical (quantitative) or non-numerical (qualitative), is what define as a method. Before the researcher set out to do research strategy, the researchers have to gather his or her information such as the purpose, the type of purpose they are going to apply and

information required to make an informed strategic choice. Theoretially, the researcher will utilizes an interview to gather data in the qualitative method and a questionaire to gather data in the quantitative method (Saunders et al., 2007).

Normally, when researcher wants to use quantitative measure his or her project has to reach a ―finished product‖ stage and has some degree of stability and maturity. Quantitative techniques examine the effects of specific conditions (an independent variable) on a desired result (a

dependent result) with the aid of numerical language. In these situations, informal conclusions are drawn either directly from the data, as in trials, or from associations identified through statistical analysis (Lakshman et al., 2000). The quantitative method relied on responses from a large survey sample that was performed either directly or indirectly through the

telephone or the internet. However, when the tools required to quantify particular knowledge, attitudes, and behaviors are lacking, quantitative methods might occasionally fall short. It takes time and money to conduct scientific research to create scales or questionnaire items that are valid and reliable (Steckler et al., 1992).

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Non-numerical data are dealt with through qualitative methods (Mardina, 2020). Open ended questions are frequently used to elicit information through interviews, direct observations, or focus group discussions, and they are frequently used when working with a small and highly

concentrated project. In-depth interviews, which are methods of gathering information through conversation and face-to-face interviews where the research subjects (interviewees) can freely share their information with each other and their own opinions and personal views, are frequently used in qualitative studies. These interviews allow the researcher (interviewer) to exploit information in detail and cover a wide range of topics. Using pre-written questions or not is one of two methods interviewers might use to conduct their interviews. However, in this instance, "open" questions are typically used to conduct in-depth interviews and to flexibly gather

information from respondents. (Lakshman et al., 2000) Also share the

same point that qualitative research techniques can produce the necessary understanding by giving access to potentially important information that would otherwise have to be inferred by the researcher. As a result, they play crucial and complementary role in the investigator’s toolkit.

Although each approach has its own pros and cons, the necessity of both cannot be overstated in a research paper, therefore the researcher must select several methods—or one particular method—to best suit their objectives.

In order to investigate the loyalty of employee in TPBank – Thao Dien branch collecting data related to employees feedback and their opinions on factors affecting their loyalty is important to provide truthful and impartial analysis. The major of methodology for this study will be quantitative

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Factors affecting employees's loyalty at Tien phong joint stock commercial bank - Thao dien branch

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