Evaluating the benefit program of Lotte legend hotel

EVALUATING THE BENEFIT PROGRAM
OF LOTTE LEGEND HOTEL

CAPSTONE PROJECT REPORT
Ho Chi Minh City, 2013

Group No.: 04
 NGUYEN PHONG
 TRAN BAO ANH
 LE TONG TRUC NGOC



Class: GaBBA.SP0109

ANDREWS UNIVERSITY
GRIGGS UNIVERSITY

GLOBAL ADVANCED BACHELOR OF BUSINESS
ADMINISTRATION PROGRAM




CAPSTONE PROJECT REPORT



EVALUATING THE BENEFIT PROGRAM
OF LOTTE LEGEND HOTEL SAIGON









Group No.: 04
• NGUYEN PHONG
• TRAN BAO ANH
• LE TONG TRUC NGOC

Supervisor: Mr. VU THAI HA. PhD






Ho Chi Minh, 2013

Group 04_GaBBA.SP0109 i

ABSTRACT
It is undeniable that large organizations nowadays are finding innovative ways
to retain employees who work harder and keep their firm more competitive.
Appropriate compensation polices and compensation systems take an important role in
maintain and reinforce employees’ performance.
The Personnel Department of Legend Hotel Saigon has complied and
maintained its policies to reinforce their employees’ efficiency. Not only compensation
but also benefits program would be able to offer either Human Resources Manager or
employees a vast array of advantages to differentiate theirs program to other
organizations. And it is easy to understand why Legend Hotel Saigon offers their
employees many benefits such as rewards, health insurance, leave and medical
checkup, et cetera. Their policies would be evaluation later for a specific perspective
into its internal organization. Besides prominent benefits, there are some disadvantages
as well. Clearly, designing a benefit program is not an easy task. However, Legend
Hotel Saigon has accomplished their benefits program successfully.
This research would offer audience a perspective of interaction between
Personnel Department to other Departments in operation of Legend Hotel Saigon, and
between policies of Personnel Department to Vietnam Labor Code. Specifically,
audiences are enable to understand more about employees’ benefits program and

benefit policies which was issued by Personnel Department.






Group 04_GaBBA.SP0109 ii

ACKNOWLEDGEMENT
Our group express sincere thanks to Philosophy of Doctor Vu Thai Ha at Griggs
University Vietnam for his input and suggestions. We especially thank to Mr. Tran Anh
Phu, Personnel Manager of Legend Hotel Saigon from which much of information was
provided.

Group 04_GaBBA.SP0109 iii

STATEMENT OF AUTHORSHIP
This dissertation is submitted to Griggs University Vietnam
in part fulfillment of our group and
has been conducted and presented by Group 3.
We have not made use of other people’s work
or (published or otherwise) presented it here
without acknowledging the source of all such work.

.



Date: 15
th
May, 2013

Le Tong Truc Ngoc
Tran Bao Anh
Nguyen Phong

Group 04_GaBBA.SP0109 iv

ORGANIZATIONAL CONTACT INFORMATION

Date of Application : January 9
th
, 2013
Organization Name: Lotte Legend Hotel Saigon
Organization Address: 2A-4A Tôn Đức Thắng, Bến Nghé ward, Dist. 1
Organization Website: www.legendsaigon.com/
Project Liaison Name: Nguyen Anh Phu
Project Liaison Title: Personnel Manager
Project Liaison Phone: (84-8) 3823 3333
Project Liaison Fax: (84-8) 3823 2333
Project Liaison Email:

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TABLE OF CONTENTS
ABSTRACT i
ACKNOWLEDGEMENT ii
STATEMENT OF AUTHORSHIP iii
ORGANIZATIONAL CONTACT INFORMATION vi
TABLE OF CONTENTS v
LIST OF APPENDICES vii
I. LITERATURE REVIEW 1
1. Compensation packages 1
2. Compensation and benefit’s role 1
3. Principle for employers and employees 2
4. Basic components 3
II. ORGANIZATION DESCRIPTION 4
1. Introduction to Legend Hotel 4
1. 1 Vision & Mission 4
1.2 Scope of business 4
1.3 Organizational history 4
1.4 Organizational Structure 5
1.5 SWOT analysis 5
2. Human resource department of Legend Hotel 6
2.1 Department functions 6
2.2 Department structure 7
III. EVALUATING THE BENEFIT PROGRAM OF LEGEND HOTEL 7
1. A brief overview of benefit programs in the organization 7
2. Reward 9

2.1 Honest reward 9

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2.2 Employees of the month reward 10
3. Health insurance 11
3.1 Workmen’s compensation plan 11
3.2 Group term insurance plan 12
3.3 Personal accident insurance 13
4. Leave and medical checkup 15
4.1 Annual leave 15
4.2 Compassionate leave 17
4.3 Matrimonial leave 18
4.4 Prolonged illness leave 19
4.5 Maternity leave 20
4.6 Dental leave 22
4.7 Reserve service training 23
4.8 Unpaid leave 25
4.9 Examination leave 27
4.10 Sick leave and hospitalization 28
5. Others 31
5.1 Employee upgrading 31
5.2 Retirement 33
5.3 Transport 34
5.4 Duty meals 35
5.5 Uniform 36
IV. IMPLICATION AND FURTHER STUDY OPPORTUNITY 37
REFERENCES 38
APPENDICES 40

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LIST OF APPENDICES

Appendix 1: Benefit programs 39
Appendix 2: Honesty awards nomination form 40
Appendix 3: “Employee of the month” nomination form 42
Appendix 4: Uniforms of employees in Legend Hotel 44



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I. LITERATURE REVIEW
1. Compensation packages
Compensation is a systematic approach to providing monetary value and other benefits to
individual employees in exchange for work performed in a wide array of forms.
Compensation may achieve several purposes assisting in recruitment, job performance, and
job satisfaction. (From hr-guide.com)
Compensation packages contain direct and indirect elements.

Direct Compensation
Indirect
Compensation
Kinds of benefits

Monetary
Non-monetary
Pay to employees
Directly
Not directly
Table 1: Direct and Indirect of compensation (Massey, Raymond E. and Gary L.
Bredensteiner. “Compensation Packages for Farm Employees.”)

2. Compensation and benefit’s role
Organization use compensation and benefits to achieve their goals and meet its legal
obligations. It is importance to be consistent and flexible. Compensation affects a person
economically, sociologically, and psychologically. Often the organization with the best
compensation strategy is a market leader.
Compensation may be used to:
 Attract and recruit high-quality applicants
 Retain talent employees
 Reduce turnover and encourage company loyalty
 Increase or maintain morale/satisfaction.
 Reward and motivate peak performance.

Group 04_GaBAA.SP0109 2

 Achieve internal and external equity.
 Modify (through negotiations) practices of unions.
The effectiveness compensation can make a significant difference in gaining or losing a
competitive edge. A vast array of benefits can differentiate its firm from competitors that
want to hire people with the same talents.
3. Principles for employers and employees
Fairness or justice in pay is an important issue. Fair pay is one that employees
generally view as equitable. Perception of unfairness could minimize the impact of a

compensation system. For example, it could decrease the morale of workers and de-
motivate them.
Job-based tends to work best in situations where technology is stable, jobs do not
change often, employees do not need to cover for one another frequently, turnover is
relatively low and employees are expected to move up through the ranks over time. In
other, individual-based compensation programs are more suitable when the firm has a
relatively educated workforce with both the ability and the willingness to learn different
jobs, the company’s technology and organizational structure change frequently, employee
participation and teamwork are encouraged throughout the organization and opportunities
for upward mobility are limited.
Open pay increase employees’ satisfaction as they tend to overestimate others’ salaries
and it is perceived to be more fair as it is perceived that no hidden decision occurs.
However, open pay tends to minimize salary differences across employees so it increases
turnover rate and decreases job satisfaction for those who have best performances.



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4. Basic components
 Basic pay: Base compensation is the largest element in most firms, the fixed pay an
employee receives on a regular basic. It can be a weekly or monthly paycheck,
hourly wage or annual salary and any performance-based pay that an employee
receives.
 Incentive pay: Pay incentives is programs designed to reward employees for good
performance such as bonus for specified performance objective are met, profit
sharing, commission or a gift given occasionally to reward exceptional performance.
 Benefits/ Perquisites: kinds of benefit
Kinds of benefit
Legally required

benefits
Law requires employers to give benefits to all employees
such as: Social Security, workers’ compensation,
unemployment insurance, family and medical leave.
Health Insurance
Health insurance covers hospital costs, physician charges,
and the costs of other medical services. Because of its
importance, health insurance is usually considered
separately from other types of insurance.
Retirement
Retirement benefits provide income to employees after
they retire.
Insurance
Insurance plans protect employees or their dependents
from financial difficulties that can arise as a result of
disability or death.
Paid time off
Time-off plans give employees time off with or without
pay, depending on the plan.
Employee service
Employee services are tax-free or tax-preferred services
that enhance the quality of employees’ work or personal.
Table 2: Basic components of benefits

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Benefits are group membership rewards that provide security for employees and
their families. Although the benefits administration is likely to be performed by an HR
benefits specialist, managers need to understand their companies’ benefits package well
enough to help communicate benefits to their employees and keep records.

II. ORGANIZATION DESCRIPTION
1. Introduction to Legend Hotel
1.1 Vision
Legend Hotels International is not simply a business but a calling to serve and touch the
lives of its guests. To be a chain of super value hotels that provides the best of the Filipino
in service that is anchored on God-centered values.
1.2 Scope of business:
At Legend Hotel Saigon we can see that the hotel has all the services business such as 5
star hotel, 5 restaurants, 400 associates, fitness, wellness.
1.3 Organizational History
Hotel was opened Oct 5, 2001 by Mr.Kiyoshi Hosoya. Legend Hotel Saigon is located in
the heart of Ho Chi Minh City, along Ton Duc Thang Street and fronting the scenic Saigon
River stands the Legend Hotel Saigon. Within walking distance to major business
addresses and points of interest, it is ideally located for travelers to explore the charm of
the historic and progressive city.






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1.4 Organizational Structure

1.5 SWOT analysis:

Strengths in the SWOT analysis of Legend Hotel is hotel's reputation. A hotel with a five-
star rating means that it has an excellent reputation. Such a good reputation means more

customers and the ability to charge higher amounts for the rooms, services and other
facilities. The hotel has auxiliary facilities like standard or world-class conference rooms.
A well-trained staff is a strength since customers will always respond positively to good
and courteous service. Legend Hotel has good benefits for the essential demand of
employees work in it.
Weaknesses of Legend Hotel is the culture and the salary of employees. The culture of
Legend Hotel is very professional but some things are not close to Vietnamese style even
though it located in Vietnam. Legend Hotel service focus on to tourist and business class
from Europe. The basic salary of employees is not high so Legend Hotel has a prominent
benefit policies to attract employees.
Opportunities of Legend Hotel is the location and the industry of Vietnam. Legend Hotel is
located in center of Ho Chi Minh city, where most of traveller and business class in other

Group 04_GaBAA.SP0109 6

nation visit and stay. More and more businessman or businesswoman in the world chose
Vietnam to visit so they often stay in prestigious well-known hotel such as Legend Hotel.
Threat of Legend Hotel is too much competition. The Legend Hotel is located in center of
Ho Chi Minh city where there are numerous hotels such as Rex Hotel, Majestic Hotel,
Caravelle Hotel, Sheraton Hotel, InterContinental Hotel, Renaissance Riverside Hotel,
Sofitel Hotel, Park Hyatt Hotel, Grand Hotel…so this will affect the profit margin of the
hotel. Too much competition translates into too many choices for the customers.

2. Human resource department of Legend Hotel
2.1 Department functions
A typical Human Resource Department is carries out the following functions. The
first function is Manpower Planning. It involves the plan for the future and finding out how
many employees will be needed in the future by the business and what types of skills
should they possess. The second function is Job analysis. Human Resource Department is
also involved in designing the Job analysis for the prospective vacancies. It is the process

that used to collect information about the duties, responsibilities, necessary skills,
outcomes, and work environment of a particular job. The third functions are Recruitment
and Selection. One of the most important tasks of HR departments is recruit the best
people for the organization. This is an important process because the success of any
organization depends on the quality of its workforce. The last functions are Training and
Development. Training might include on the job or off the job training. In order to improve
the efficiency level of the employees, the Human Resource department has to offer the
regular trainings and development programs for their employees. Therefore, all training
and development needs are carried out by this department.

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2.2 Department structure
III. EVALUATING THE BENEFIT PROGRAM OF ORGANISATION
1. A brief overview of benefit programs in the organization
Developing successfully, being profitable in doing business in this competitive,
dynamic and fast-pace demanding world required an excellent solution. And it is
undeniable that the greatest assets in an organization are talent people and their collective
knowledge. As the result, benefit programs have taken an important role in employees
mentoring and reinforcement. A felicity organization needs to offer an appropriate benefit
program to their employees. It is not only contribute to employees’attitude but also long-
term commitment of employees to organization.


Group 04_GaBAA.SP0109 8


Legend Hotel Saigon had taken that strategy particularly. And they approached their
own policies effectively. There are four main points in the Hotel’s benefit program
includes Reward, Health Insurance, Leave and Medical Check up and other policies. Each

points had its own specific policies which apply to all permanent employees.
In conclusion, the Hotel’s benefit program has offered appropriate policies and
procedures to their employees. The Hotel also sets an extend standard for each point in
their policies. This will assist employess easy to get along with organization’s regulation.



Benefit progams
Legally required
benefits
Maternity leave, Matrimonal leave, Reserve Service
Training, Employee upgrading. Annual leave
Health Insurance
Workmen’s compensation plan, Personal accident
insurance, Sick leave and hospitalization.
Retirement
Retirement.

Insurance
Group term insurance plan.

Paid time off
Dental leave, Prolong illness leave, Examination leave.

Employee service
Transport, Duty meals, Uniform.

Others
Honest reward, Employees of the month reward,
Compassionate, Unpaid leave

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2. Reward
2.1 Honest reward
This objective of this policy is to accord recognition to employees who have
displayed honesty in their work and to reward them accordingly. All acts of honest shall be
reported to the Personnel Department by the Department Head by using prescribed
“HONEST AWARDS NOMINATION FORM”. Upon receiving the report, the following
letters/memos will be issued by the Personnel Department: Letter of commendation to
employee with copy in Personnel Record File. General memo to all employees advising
them of the honesty act. Letter to Legend Hotel Association (SHA) and Legend Tourist
Promotion Board (LTPA) for consideration of the yearly award for honesty.
Awards shall be made monthly and would be based on monetary value
accumulated during the calendar month. In case of articles, jewelleries, equipment an
valuables, monetary value at the prevailing local prices would be established by the
Management. The awards shall be classified into 3 categories viz:
a. Category 1 Certificate for amounts from $100.00 to $500.00
b. Category 2 Certificate, a small pewter plate with inscriptions for
amounts from $500.00 to $1,000.00
c. Category 3 Certificate, a small pewter plate with inscriptions for
amounts of $1,000.00 and above
The cash reward may be considered by the Management and the amount will also
be decided by the Management.
This policy very good, and classify reward into 3 categories. It makes employees want to
strive for the highest reward.

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2.2 Employees of the month reward
This policy sets out guideline to show the Hotel’s appreciation of the employee’s
contribution. To be a caring Hotel concerned for the welfare of the employees. The Head
of Department shall nominate outstanding employees from their department in the
prescribe form. This form must be submitted to the Personnel department each month. The
General Manager and the Head of Department will by 2nd week of the month elect from
all nominated employee and the employee of that month. At time, there may be two
employee of the month if there is a tie.The employee of the month shall receive a cheque
of $100.00 and a certificate of commendation.
Both of benefits are positively affected employees. but for monthly prizes
sometimes the staff really tried but have not been recorded can affect the of the staff
thought that the bias level for a specific employee.
Legend Hotel have similar policies with Vietnamese Labor Law. But there is one other
than; it is separated grade to easily pay for reward. And it also promote employee more
efforts to achieve the highest award.

Content


The Labor Code of
Vietnam

Legend Hotel’s
Policy

Evaluation and
efficiency

Honest reward
Do not have any
mention on this point

To accord
recognition to
employees who have
displayed honesty in
their work.
It is very good for
applying into the
company but it has a
small problem. It
cannot perform to
the best efforts of
staff.

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Content

The Labor Code
of Vietnam
Legend Hotel’s
Policy
Evaluation and
efficiency
Employees of
the month
reward

Similar with The
Labor Code of
Vietnam

To be a caring Hotel
concerned for the
welfare of the
employees.
It is not quite good
because when the
employees try their best
but the company does
not offer this reward,
they will not try their
best in the next month.

3. Health insurance
3.1 Workmen’s compensation plan
The policy forms part of the statutory requirements. To provide financial assistance
to employees who are disabled through accident or illness during the course of work. To
provide financial assistance to dependents when employees are deceased though accident
or illness during the course of work. procedures of Workmen’s compensation plan have six
main points.
First of all, when a work related accident occurs, the supervisor shall compete the
Notice of Accident Form and route it to Personnel within 3 working days of the accident.
Second, personnel shall notify the Commissioner for labor and the insurance Hotel using
prescribed forms, for all work related accidents within 10 days of the accident. Third,
personnel shall handle the processing of claim. Forth, the quantum of compensation is
governed by the Workmen’s Compensation Act. Fifth, where death occurs and the
beneficiary contends the claim, the disbursement of the compensation is as determined by

the Commissioner. The last, where the deceased workman has no dependents, the
compensation is paid into the Worker’s Fund as prescribed by the law.

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The coverage is effective from the employee’s first day of work and stops on the
day that he ceases employment with the Hotel. It only covers work related death and
disability. The coverage is governed by the Workmen’s Compensation Act.
In this policy Legend Hotel has guaranteed the rights of workers provisions similar
in Vietnamese Labor Law. However, the procedures make employee spent more time so i
think the Legend Hotel should reduce review time.


3.2 Group term insurance plan
This policy forms part of the Company’s total employment package that is aimed at
providing adequate insurance coverage to protect employees and therefore their families, in
the events of employee total permanent incapacity or death resulting in loss of earning and
financial hardships. To provide financial assistance to employees who are disabled through
accident or illness and as a result, cannot continue with work. To provide financial
assistance to dependants when employees are deceased through accident or illness. The
insurer requires our compliance as spelt put below and the result approved by them before
the cover can be effective.
Content
The Labor Code
of Vietnam
Legend Hotel’s
Policy
Evaluation and
efficiency
Workmen’s

compensation
plan
Similar with The
Labor Code of
Vietnam.
To provide financial
assistance to
employees who are
disabled through
accident or illness
during the course of
work.
It is good. Because
Legend hotel takes
care of their
employees.
However it takes
too much time to
inform to the
organization.

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With this policy the Legend Hotel have four points to ensure all employees are
entitled to this policy. All employees are covered. The coverage if effective form the
employee’s first day of work and stops on the day that he/she cease employment with the
Company. The coverage is worldwide and 24 hours per day. It covers full permanent
disability or death as a result of illness or accident except suicide.
In this policy the Legend Hotel did right the Vietnamese Labor Law.

Content

The Labor Code of
Vietnam
Legend Hotel’s
Policy
Evaluation and
efficiency
Group term
insurance plan
Similar with The
Labor Code of
Vietnam.

To protect
employees and
their families.
This policy is good.
Because of this
benefit, the
employees can get
more money to pay
for drug or hospital
fee.

3.3 Personal accident insurance
This policy forms part of the Company’s total employment package that is aimed at
providing adequate insurance coverage to protect employees and therefore their families, in
the events of employee total permanent incapacity or death resulting in loss of earning and
financial hardships. To provide financial assistance to employees who are disabled through

accident or illness and as a result, cannot continue with work. To provide financial
assistance to dependants when employees are deceased through accident or illness.



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In this policy Legend Hotel separated in six grade
GRADE
AMOUNT (S)
A
100,000.00
B
50,000.00
C
15,000.00
C1
5,000.00
CF/OTHS
-
R & F
-
Employees from Grade A to C1 are covered. The coverage is effective for the
employee’s first day of work and stops on the day that he/she cease employment with the
Company. The coverage is worldwide and 24 hours per day. It covers full permanent
disability or death arising from accident only.
Legend Most employees have received the best health insurance. That makes
employees feel health guarantee should try to provide the best for the Legend Hotel.
Legend Hotel have similar policies with Vietnamese Labor Law. But there is one other
than, it is broken out by employee grade to easily pay for insurance when an accident or

death while working.
Content

The Labor Code
of Vietnam
Legend Hotel’s
Policy
Evaluation and efficiency
Personal
accident
insurance
Similar with The
Labor Code of
Vietnam.
To protect
employees and
their families.
Not quite good because for
staff grade C1, when an
accident or death happens
with them while they are
working, this money may not
enough for their treatment

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4. Leave and medical check up
4.1 Annual leave
The purpose of this policy is set out the annual leave entitlement and utilization
procedures applicable to all staff for consistent practice throughout the Hotel. There are

two prominent objectives in this policy. First, it is enable employees to enjoy paid earned
annual leave for vacation or other personal use during their service with Hotel. Second,
providing such earned annual leave as part of employee total compensation package on the
basis of competitiveness within the Hotel industry.
There are thirteen main points in this policy. First of all, annual leave for
employees who works for 1 year, 2 years, 3 years, 4 years, 4 to 9 years, over 10 years
follow the table:




Second, for the use of leave, every confirmed employee is eligible to use his/her
leave as it accrues. Probationary employees are not allowed to take annual leave during
their probation. Third, every confirmed administrative employee may apply for a minimum
of ½ day leave. Half day shall comprise of 4 working hours. All other employees shall
apply leave at minimum of 1 day unit. Forth, leave taken on Saturday by administrative
employee who works half day on Saturday shall be considered as 1 day. Fifth, for leave
accumulation, every confirmed employee may carry over a maximum of one year accrual
YEAR
ENTILEMENT
1
2
3
4
4– 9
10 & above
7 working days
8 working days
9 working days
10 working days

14 working days
18 working days


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into the next year. His/her entitlement in any one year shall therefore not exceed the
current year’s entitlement plus the previous year’s carry over. Sixth, for leave forfeiture,
leave carried over from the previous year has to be exhausted in the current year, otherwise
it will be forfeited. Seventh, every confirmed employee who resigns shall have his/her
annual leave entitlement calculated up to the last day of service. He or she is allowed to
clear any outstanding leave during the notice period only when the Head of Department is
able to grant her/him the leave. Eighth, for leave on dismissal, an employee dismissed by
the Hotel for misconduct shall have his/her outstanding annual leave forfeited. Ninth, for
illness during annual leave, every employee on annual leave who is certified sick is not
allowed to defer or cancel his/her annual leave taken in accordance with Employment Act.
Tenth, for annual ineligibility leave, where an employee is granted leave of absence
without pay exceeding two weeks in calendar year at the request of the employee, the
period of leave shall be disregarded in computing continuous service for purpose of leave
eligibility. Every employee who absents himself/herself without permission or reasonable
excuse for more than 20% of the working days in a calendar year will be forfeit his/her
leave entitlement. Eleventh, application for annual leave shall be made in writing as far as
possible at least one week in advance, forwarded to the Head of Department prior to the
commencement of leave. Last but not least, where an employee whose leave request has
been approved and processed by Personnel Department decides to change his/her leave, the
department concerned must notify the Personnel Department immediately.
Annual leave is paid time off work for employees to be used for whatever the
employee wishes. An employee may use annual leave for vacations, rest and relaxation,
and personal business or emergencies. Number of days of annual leave shall be increased
by seniority in the Legend Hotel.