Retaining skilled employee, case study in Mai Diem textile & garment limited company = giữ chân người lao động có năng lực tại Công ty TNHH Dệt may Mai Điểm Tom_tat

0VIETNAM NATIONAL UNIVERSITY, HANOI
SCHOOL OF BUSINESS



PHAM THU HA

RETAINING SKILLED EMPLOYEE, CASE STUDY IN MAI DIEM
TEXTILE & GARMENT LIMITED COMPANY


Major: Business Administration
Code: 603405


MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisors: Dr. Nguyen Danh Nguyen


Hanoi – 2012
TABLE OF CONTENT

ACKNOWLEDGEMENTS
ABSTRACT
TÓM TẮT
TABLE OF CONTENT
LIST OF FIGURE
INTRODUCTION
1. The necessity of the thesis.
2. Objectives of the research

3. Research scope
4. Hypothesis of the research (Research questions)
6. Methodology
7. Thesis‟s limitation
8. Significant
9. Thesis structure
CHAPTER 1: LITERATURE REVIEW
1.1Employee retention.
1.1.1 Definition of employee retention
1.1.2 Reasons of employee retention
1.1.3 Factors make employees leave Company
1.2 Employee retention components.
1.2.1 Work environment and Job Design.
1.2.2 Leadership
1.2.3 Employee Recognition, Rewards and Compensation.
1.3 Employee retention tactics.
1.3.1 Employee Compensation.
1.3.2 Employee Benefits.
1.3.3 Employee Recognition and Reward Program.
1.3.4 Job satisfaction
1.3.5 Creating a comfortable work environment.
1.3.6 Coaching programmes.
1.4 Employee retention in Garment and textile industry
1.4.1 Overview on Vietnam‟s garment and textile industry.
1.4.2 Human resource management and development solution
CHAPTER 2: ANALYSIS OF MAI DIEM‟S EMPLOYEE RETENTION
2.1 Overview of Mai Diem Garment and Textile Company
2.2 The Research methodology
2.2.1 Overall approach
2.2.2 Questionnaire development

2.2.3 Target Population
2.3 Findings and analysis
2.3.1 Benefit programs
2.3.2 Strategies
2.3.3 Organizational culture
2.3.4 Employee Satisfaction
CHAPTER 3: RECOMMENDATION AND CONCLUSION
3.1 Overview of the current human resource system at Mai Diem
3.2 Recommendation for Mai Diem Garment and Textile Company
3.2.1 Clear Objectives about work climate
3.2.2Training and Motivation
3.2.3 Benefits and Compensation
3.2.4 Communication and Assistance
3.2.5 Create belief for the employees in the future development of
Mai Diem
3.3 Action plan
3.3.1 The action plan in long term
3.3.2 The proposed action plan in short term to attract newcomers and
sustain current employees from the researcher:
CONCLUSION
REFERENCE
APPENDIX

1

RETAINING SKILLED EMPLOYEE, CASE STUDY IN MAI DIEM
TEXTILE AND GARMENT LIMITED COMPANY

Pham Thu Ha
MBA candidates, 2007 - 2009

School of Business
Vietnam National University, Hanoi
Supervisor: Dr. Nguyen Danh Nguyen


INTRODUCTION
1. The necessity of the thesis.
Employee is the most important asset of enterprises but many
enterprises have failed to introduce reasonable solutions to retain qualified
employees. This reduces the main competitiveness of enterprises in the
current period. Mai Diem textile and garment limited Company specializes
in domestic and exported products. Building and maintaining a high-skilled
workforce has enabled the company to produce high-quality products.
Attracting and retaining the high-skilled employees is seen as one of the
vital factor for maintaining the competitive advantage of the company. As
one of committed employees in Mai Diem company, I choose the topic
"Retaining skilled employees, case study in Mai Diem textile and garment
limited Company." as the official one for my Business Administration
thesis.
2. Objectives of the research
The thesis aims to achieve the following objectives:
- Identifying and assess actual situations of Mai Diem‟s Human
Resource Management and its current employee retention.
- Develop some suggestions and recommendations to retain skilled
employee in Mai Diem Company.
3. Research scope
Doing research Human resource management is a broad topic. The
thesis only concentrates on employee retention with case study in Mai
Diem garment textile Company. Research period from 2006-2010.
4. Hypothesis of the research (Research questions)

2

From my point of view, the research focuses on main factors in
order to satisfy needs of employees to retain them, as follows:
Hypothesis 1: The higher the income, the more loyal and dedicated
employee are.
Hypothesis 2: Working environment at the Company affects the
level of labor‟s loyalty by proportional.
Hypothesis 3: Career development opportunities of individuals
affect to the level of labor dedicated to Company by proportional
5. Data sources
- Reports of Mai Diem garment & textile Company from 2006 to
2010 (including HR reports, financial reports and other statistical reports
relating HR)
- Data from survey, observation, direct interview and discussion with
CEO & employees of Mai Diem Company.
- Data from other sources such as specialist magazines and books,
internet.
6. Methodology
Method: research survey, the quantitative method. Moreover, the
research aims to apply to descriptive analysis and logical reasoning to
analyze the data collected.
7. Thesis’s limitation
The solutions in this thesis are not completely suitable with all
managers or companies, it depends on financial statement, business field of
each Company.
8. Significant
The thesis is expected to make great contribution to Mai Diem
Company and other companies in their applying measures to retain skilled
employees.

9. Thesis structure
TOPIC “Retaining skilled employees, case study in Mai Diem
garment & textile Company”
Chapter 1: Literature review
Chapter 2: Analysis of Mai Diem‟s employee retention.
Chapter 3: Recommendations and conclusions

3

CHAPTER 1: LITERATURE REVIEW

1.1 Employee retention.
1.1.1 Definition of employee retention
Retention defined as “an obligation to continue to do business or
exchange with a particular Company on an ongoing basis” (Zineldin, 2000,
p. 28). A more detailed and recent definition for the concept of retention is
“customer liking, identification, commitment, trust, readiness to
recommend, and repurchase intentions, with the first four being emotional-
cognitive retention constructs, and the last two being behavioral intentions”
(Stauss et al., 2001).
Employee retention is a process in which the employees are
encouraged to remain with the organization for the maximum period of
time or until the completion of the project. Employee retention is beneficial
for the organization as well as the employee.
(Source:
1.1.2 Reasons of employee retention
- Today‟s tightening labor market and tomorrow‟s predicted talent
crunch. It‟s getting increasingly difficult for companies to keep
current employees and find qualified replacements.
- A growing skills shortage. Many occupations are facing a severe

lack of talent.
- An aging workforce. The workforce is getting older and upcoming
age groups don‟t have the numbers to fill the spaces. Businesses
need to keep people as long as possible.
- Decreased employee loyalty. Gone are the days of the 25
th

anniversary gold watch. Employees don‟t stay with companies as
long as they did in the past.
- The search for new opportunities. In today‟s world, it‟s easy for
people to look for a job. They can open the newspaper or search the
Internet for instant job listings.
1.1.3 Factors make employees leave Company
- Poor relationship between the employee and their
immediate boss.
- Lack of a career advancement plan.
4

- A poor match between the employee and the job or the
employee and the Company.
- Compensation not competitive.
- No direct link between strong performance and increased
rewards.
- A need for stimulating, meaningful work.
- Lack of appreciation, recognition, and rewards.
- Insufficient coaching and feedback.
- Quality of the people the employee works with.
- Insufficient alignment of how the employee‟s work
achieves organization objectives and how the employee can be
greater success.

(Source: www.RetainsEmployees.com)
1.2 Employee retention components.
1.2.1 Work environment and Job Design.
Work environment is an important factor for an employee to be
successful in their carrier. According to (Fields, 2001) work environment
should mutate regularly to keep up with the times and:
- Allow individuals to balance work and personal life activities.
- Have a well-defined culture. People understand how their
performance is measured and what gets rewarded and punished.
- Foster learning opportunities to improve workers' intellectual
capital and sustainable marketability in a world where continuously
learning in order to keep a job is a given.
- Have benefits that are in line with where individuals are in their life
cycle.
Employees need to be given certain level of freedom, authority and
responsibility to make decision on their work to get things done. Company
should listen to the feedback or suggestion provided by employee to
improve the work environment or the job design that they are doing.
1.2.2 Leadership
Leadership is defined as the “process of social influence in which
one person could enlist the aid and support of others in the accomplishment
of a common goal”. It involves using one‟s role and ability to influence
5

others in some way, which delivers business results and contributes to the
organisation‟s overall success.
1.2.3 Employee Recognition, Rewards and Compensation.
Recognition: Can be defined as a form of sincere praise or
appreciation given to an individual by another.
Compensation: Wages and other financial benefits earned from

labor.
Reward: An earned item of value presented to an individual for
successful accomplishment of a particular service, task, or mission.
1.3 Employee retention tactics.
1.3.1 Employee Compensation.
Compensation is payment to an employee in return for their
contribution to the organization, that is, for doing their job. The most
common forms of compensation are wages, salaries, bonus-based
programs, commission-based program.
- A performance-based compensation plan
- Loyalty based Bonus
- Salary policy
1.3.2 Employee Benefits
Employee benefits program includes:
- Vacation and days-off policies:
- Health benefits
- Disability Insurance
- Life Insurance
- Education reimbursement programs:
- Education Assistance:
- Retirement Plans:
- Gifts at some Occasions:
1.3.3 Employee Recognition and Reward Program.
- Communicate the Program Internally
- Meaningful Awards
- Share Reasons for Award
- Choose Appealing Rewards
1.3.4 Job satisfaction
- Clearly define what is expected of employee
6

- Autonomy to make decision
- Rotate Jobs
- Treat employees fairly and respectfully.
- Career Development Program
- Opportunity to learn new things
- Provide alternate work schedules.
1.3.5 Creating a comfortable work environment.
- Working Atmosphere
- Communication
- Balance work and personal life
- Allow employee to share their knowledge with others
- Colleagueship factor
- Allow team members to share their knowledge with others
- The quality of supervision and mentorship
1.3.6 Coaching programmes.
Building confidence and competence through training,
encouragement and education, coaching includes orienting, mentoring, and
leading, which are critical to developing long-term loyalty.

1.4 Employee retention in Garment and textile industry
1.4.1 Overview on Vietnam’s garment and textile industry.
Vietnam‟s garment and textile sector has seen fast and sustainable
growth over the past years, playing an important role in national socio-
economic development.
One of the biggest issues facing Vietnam's textile and garment
industry is a labor shortage _specifically, of skilled workers. The effect of
labor shortages was worse for the garment industry because of the labor
intensive nature of the industry and especially the fact that wages were
generally lower in the garment industry than in other manufacturing

industries. Thus the industry had a hard time competing with other
industries (e.g. electronics) for labor.
In garment industry, the unsettled thinking is always in labor mind.
Especially, due to specific characteristic of garment industry, most labor
are woman and they think that after get married and past their youth, the
7

productivity will decrease. Therefore, garment industry is short of skilled
labor besides unskilled labor.
1.4.2 Human resource management and development solution
To solve the difficulties in lack of skilled labor, Vietnam garment
and textile industry posed the Human resource management and
development solution for whole industry.


8

CHAPTER 2: ANALYSIS OF MAI DIEM’S EMPLOYEE RETENTION
2.1 Overview of Mai Diem Garment and Textile Company
Address: Block 39-40-42 An Xa industrial zone, Nam Dinh city
Mai Diem Garment and Textile Company were officially
established on 28th February 2002. It had formerly operated as clothing
production factory with only 4 workers working on the 30 square-meter
area. It was in the October, 2006 that the Company finally moved to new
workplace and increased its workforce to 200 skilled workers. The period
from 2006 to 2008 was seen as the most productive one in the history of
operation in Mai Diem. In the later 2008, the Company faced the
workforce-related crisis, consequently losing 40 workers as the result. This
issue has struck the Company heavier due to the nature of the industry that
requires a high number of workers working. The crisis has given the

Company difficulties because the production contract was signed already.
There were various issues related human Resources management within
Mai Diem from 2009 until now, leaving the Company in the unstable
condition and therefore affects the business. The solutions for attracting
and retaining skilled workers have become the most important issues that
the Company is facing.
2.2 The Research methodology
2.2.1 Overall approach
2.2.2 Questionnaire development
The questionnaire in the research of this study consists of 42
questions, covering four different topics.
Topic 1: The benefits program
Topic 2: Strategies
Topic 3: Organizational structure
Topic 4: Personal satisfaction
2.2.3 Target Population
Table 2.1: Mai Diem employee’s response rate
Company
Questionnaire
sent
Questionnaire
received
Response
rate
Mai Diem Textile and
Garment Company
100
100
100%
9

2.3 Findings and analysis
2.3.1 Benefit programs
There are nine factors in the benefit program package with rating from
1, representing „not at all important‟ to 5, representing „very important‟. The first
factor salary and compensation is illustrated in the figure below:

Figure 2.2: The perception of Mai Diem participants about the salary and
compensation
The second factor in the benefit program package is the Leave
Benefits, which are ranging from the sick leave, vacation to personal and
public holidays.
The third factor of the benefit program package is the Retirement Plan.
The fourth factor in the Benefit Program package is the Health-
related Benefits, which cover from general health insurance to vision and
dental prescription

10

Figure 2.5: The perception of Mai Diem participants about the health-
related benefits.
The fifth factor to be analyzed in this package is the Long-term
care insurance.
The sixth factor of the Benefit programs package is the Tuition
Reimbursement.
The eighth factor in the package is the Employee Assistance
Program: Employee Assistance Program as help to deal with family
difficulty, job performance problem, stress, workplace violence, alcohol
and drug abuse.

The last factor in the Benefit Programs package is the Work-life
Balance.

It can be seen as natural due to the fact that the employees in this
textile industry have a very unstable work-life balance.
11


2.3.2 Strategies
There are 12 items in the second package Strategies, which
represents for the strategies adopted by Mai Diem in recent years. The first
item Alternative Work Schedule:

The second item in the Strategies package is the Voluntary
Reduction in Work Schedule.
The third item of the Strategies package is the Telecommuting and
Work at home.
The fourth item in the Strategies package is the Wellness program.

The fifth item in the Strategies package is the Mentoring and
Coaching.
The sixth item in the Strategies package is the Job rotation and
new Assignment.
12


The seventh item in the Strategies package is the Help with the
career planning.
The eighth item in the Strategies package is the On-site day care.

The ninth item in the Strategies package is the Rewards and
Recognition

The tenth item in the Strategies package is the Education
Opportunities.
13


The eleventh item in the Strategies package is the Job-related
Training opportunities.
The last item in the Strategies package is the Annual performance
appraisal.

2.3.3 Organizational culture
The Organizational Culture package of the questionnaire consists
of 10 items. Each item represents a type of culture which could be applied
in Mai Diem Company. The first item in Organizational culture is
‘supervisors in Mai Diem sit down with employees and discuss the
development plan at least every 6 months’.
The second item in the package is ‘employees are often given the
opportunity to be part of task group and assignments outside their core
job responsibilities’.
14


Mai Diem has established a policy allowing the employees to be
able to attend the job outside their core responsibilities one day a month,
thus allowing them to obtain experience and understand the whole picture
of production in the Company.
The third item in the Organizational Culture is ‘Mai Diem

Company has a career development program that helps people become
more aware of and responsible for their own career development’.
The fourth item in the package is ‘Working on project or
assignment is an open process with few barriers’.

It can be concluded that this item is part of the organizational
culture within Mai Diem Company. In recent years, Mai Diem Company
has taken necessary steps to simplify the documentation process in order to
15

allow employees to be more flexible in their job, thus enabling employees
to attend more jobs without barriers.
The fifth item in the package is ‘Supervisors communicate
effectively with employees’.

Although the Company has always been friendly and enthusiastic
in communicating with the employees, it can be seen that production team
is not well-attended and even the employees are sometimes nervous when
meeting with the management team. Therefore, the board of management
has to make development on updating the employees with information.
The sixth item in the package is ‘Mai Diem has a culture that
recognizes and values diversity’.
The seventh item in the package is ‘There is an environment with
openness and trust in Mai Diem’.

Mai Diem has always been providing a very convenient condition
for employees to share and improve various situations at work.
16

The eighth item in the package is ‘Employees in Mai Diem are

treated with fairness and respect’.
The ninth item in the package is ‘Supervisors spend a considerate
deal of time listening to employee’s ideas’.
The last item in the package is ‘Supervisors empower people to
take responsibility and authority’.

Although due to the nature of the work in Mai Diem, employees
are limited with the authority provided. However in recent years,
supervisors in Mai Diem has been assigning the employees with flexibility
and certain aspect of authority in order to let employees more active in their
work.
2.3.4 Employee Satisfaction
This package „Employee Satisfaction‟ of the Questionnaire consists
of 11 items. Each item represents the difference aspects of the employee
satisfaction. The analysis of this package is carried out below.
The first item in the package is ‘Opportunities for personal growth
and development’.
17


The second item of the package is ‘the feeling of worthwhile
accomplishment from the job’.


It can be seen that Mai Diem has not established a feeling of
worthwhile accomplishment in the mind of the employees, consequently
leading to the fact that the retention system has not been working
effectively. In the near future, Mai Diem needs to develop some policies in
order to increase the quality and salary for the employees while
maintaining the work-life balance.

The third item in the package is ‘The amount of independent
thought and action exercised from the job’.
The fourth item in the package is „The amount of challenge in the
job’.
18


The fifth item in the package is ‘The amount of job security’.
The sixth item in the package is ‘the amount of pay and fringe
benefits I receive’.

The seventh item in the package is ‘the degree to which I am fairly
paid for what I contribute to my organization’.
19


This strong dissatisfaction is mostly placed on the employees with
low-skilled and experiences while the Company are focusing mostly on
employees who acquire high-skilled on the job. This is one of the shortages
at Mai Diem and the Company should make more development in the
payment system so that it can reflect the fairness in paying employees.
The eighth item in the package is ‘the people I talk to and work
with in my job’.
The ninth item in the package is ‘the amount of support and
guidance received from the superiors’.

The tenth item in the package is ‘the overall quality of supervision
received in the job’. The overall quality of supervision has been improving
in recent years, mainly due to the investment of Mai Diem in recruiting the
high-skilled supervisors.

20


The last item in the package is ‘opportunities to learn new