Turnover rate and performance appraisal biases from supervisors in vina one manufacturing corporation

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

Tran Thanh Hoa

TURNOVER RATE AND
PERFORMANCE APPRAISAL BIASES
FROM SUPERVISORS IN VINA ONE
MANUFACTURING CORPORATION
MASTER OF BUSINESS (Honours)

Ho Chi Minh City - 2017


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

Tran Thanh Hoa

TURNOVER RATE AND
PERFORMANCE APPRAISAL BIASES
FROM SUPERVISORS IN VINA ONE
MANUFACTURING CORPORATION
ID: 22140017

MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: NGUYEN THI MAI TRANG

Ho Chi Minh City - 2017

Executive Summary
Intellectual capital of human resource, which is often considered the most important asset in
all organizations, needs to be well identified and studied. Organizations need to ensure they
operate in a way that labor loss due to worker turnover is minimized. In order to do so,
organizations need to understand why people choose to stay or leave their jobs. In many
manufacturing companies, especially in heavy industry, front - line employees (or in short,
they would be called as “workers” in this thesis) are considered less important than those
who are in the offices and their voices are the weakest ones in the companies. The way their
supervisors treat and rate them on the scales of performance and contribution is also a new
factor impacting on the turnover rate of these workers.
The purpose of this thesis is to explore the causes of high turnover rate through the current
problems with workers at Hot-Rolled Steel factory - Vina One Manufacturing Corporation
(in short, it would be called Vina One in this thesis).
The findings of the study revealed that biases from supervisors on performance appraisals
tend to play a significant role in turnover intention of workers. The findings are discussed in
details in the research along with some recommendations for the company and management
board to increase the level of employee satisfaction and reduce the turnover intention in
Vina One Manufacturing Corporation.


Acknowledgements
I would like to acknowledge all who supported me during my studies without whom I
wouldn‟t be where I am today.
I would especially like to thank my supervisor – Professor Nguyen Thi Mai Trang for all her
advice and guidance, without her help this could not have been possible.
I also would like to show my gratitude to my colleagues at work and classmates at ISB for
their continuous support. I also send my sincere thankfulness to my parents and friends for
their support and encouragement.

TABLE OF CONTENTS
Executive Summary .................................................................................................................3
Acknowledgements ..................................................................................................................4
LIST OF FIGURES ..................................................................................................................6
LIST OF TABLES ...................................................................................................................6
1. INTRODUCTION ................................................................................................................1
1.1. The company background ..............................................................................................1
1.2 Company structure and mission ......................................................................................1
2. PROBLEM CONTEXT .......................................................................................................3
2.1 The turnover rate status in the industrial and construction sector ..................................3
2.2. The turnover status of Hot-Rolled Steel factory in Vina One .......................................5
3. PROBLEM IDENTIFICATION ........................................................................................15
3.1 Job safety ......................................................................................................................16
3.2 Performance appraisal ...................................................................................................18
3.3 Errors in recruitment process ........................................................................................22
3.4 Compensation and benefits ...........................................................................................23
3.5 Work-life balance..........................................................................................................24
3.6 Cause –and –effect tree .................................................................................................26
4. CAUSE VALIDATION .....................................................................................................27
5. ALTERNATIVE SOLUTIONS .........................................................................................32
5.1 The first alternative solution: biases from untrained supervisors .................................32
5.2 The second alternative solution: biases caused by inconsistency across supervisors ..35
5.3 The third alternative solution: recency bias and personal bias from supervisors .........38
6. ORGANIZATION OF ACTIONS .....................................................................................43
7. CONCLUSION ..................................................................................................................46
8. SUPPORTING INFORMATION ......................................................................................47
APPENDIX ............................................................................................................................62
REFERENCES .......................................................................................................................63

LIST OF FIGURES
Figure 1: Vina One organizational structure
Figure 2: Employed population above 15 years old categorized by economic activities
Figure 3: Number of workers at Hot-Rolled Steel factory
Figure 4: Employees‟ age at Hot Rolled Steel factory
Figure 5: Employees‟ working experience
Figure 6: The turnover rate of Hot-Rolled Steel workers at Vina One
Figure 7: The turnover rate of Hot-Rolled Steel workers
Figure 8: The average wages of steel workers
Figure 9: The turnover rate of Hot-Rolled Steel workers in detail for each positon
Figure 10: Reasons why people quit their jobs at Vina One in 2015
Figure 11: Recruitment cost
Figure 12: Cause - and - effect tree

LIST OF TABLES
Table 1: Quantity and income/month of Hot Rolled Steel Factory in 2015
Table 2: Action plan


1

1. INTRODUCTION
1.1. The company background
Vina One Manufacturing Corporation (herein called Vina One), which was established in
2007 with charter capital of VND 450 billion, is one of the biggest steel manufacturing
company in Long An province, Viet Nam. In 2015, Vina One achieved stunning operating
results with profits before tax of above VND 3,200 billion, charter capital increased to VND
700 billion (Financial statement 2015). Vina One was honorably awarded the certificate of

ISO 9001:2008 issued by the International Bureau Veritas Organization. It is also listed in
the VNR 500 of biggest private enterprises of Vietnam.
1.2 Company structure and mission
Board of Director

General Director
Board of Assistants

Supervisory Board
Deputy General Director

Domestic
Sales
Division

Import &
Export
Sales
Division

Procurement
Division

Planning
Division

Operation
Division

Administr

-ation and
HR
Division

Financial
Division

Accounting
Division

Hot
Rolled
Steel
Factory

Cold
Rolled
Steel
Factory

Figure 1. Vina One organizational structure
(Source: Vina One Human Resource Department)


2

Vina One includes 5 main functions: Sale (domestic, import & export), Supply chain
(procurement, planning), Finance, Operation, Factory. In Factory function, they are divided
into 2 small divisions: Hot-Rolled Steel factory and Cold-Rolled Steel factory. Hot-Rolled
Steel factory has the responsibility to produce hot-rolled steel from the steel billet furnaces.

This is the first process to produce Hot-Rolled Steel, galvanized, rectangular tubing, square
tubing and Cold-Rolled Steel. This division has the largest employees in the company with
1,218 workers. In this thesis, workers will be the main objects of the study because they are
front-line employees who have the responsibilities for producing Hot-Rolled Steel, being an
extremely important factor in Vina One Steel Factory‟s successful operation.
The main products of Vina One include Hot-Rolled Steel (U Channels, Angles,.. with
volume of 250,000 ton annually) and Cold-Rolled Steel (round tubing, rectangular tubing,
square tubing,.. with volume of 300,000 tons annually) as well as galvanized strips, billets,
steel plates, etc. Vina One goes with the mission of sustainable development to become the
leading steel manufacturer in Vietnam and Southeast Asian region in coming years.
To achieve this mission, Vina One has recently focused on upgrading steel production lines
and increasing factory acreage of more than 100,000m2, extending office buildings to 30
rooms with specialized functions and developing transportation systems with 30 new trucks.
In 2015, they invested in the steel billet furnace system, galvanized Hot-Rolled Steel system
and a barcode system stored in warehouses with modern technology in order to build a
closed process that brought high efficiency.


3

However, paying too much attention to develop physical properties has made the
management board forget that they also have another more important asset which is the
intellectual capital of employees. According to the statistics shown in the company‟s
reports, the number of employees leaving Vina One has dramatically increased in the past 3
years (2013-2015). Especially in Hot-Rolled Steel factory, this number of workers quitted
their jobs are even more surprising. This problem poses a threat to the company‟s mission to
become the leader in its field.
2. PROBLEM CONTEXT
2.1 The turnover rate status in the industrial and construction sector
According to General Statistics Office of Viet Nam, the numbers of employees aged above

15 are about 52.9 million people, increasing 142 thousand people compared to 2014. As
shown in Figure 2, the sector of agriculture, forestry and fishery accounted for 44.3%
(46.3% in 2014); industrial and construction sector was 22.9% (21.5% in 2014) and services
sector was 32.8 % (32.2% in 2014).

32,80%
32,20%

Services
Industrial and construction

22,90%
21,50%

2015
2014

Agriculture, forestry and fishery

44,30%
46,30%

0,0% 10,0% 20,0% 30,0% 40,0% 50,0%

Figure 2. Employed population above 15 years old categorized by economic activities
(Source: General Statistics Office of Viet Nam)


4

In each sector, the problem of high turnover rate has significantly affected to the allocation
of employee. According to Price et al.1 with Causal Model of Turnover (voluntary leaving
from an organization), turnover is defined as the ratio of the number of organizational
members who have left and divided by the average number of people in that organization
during the period. Opportunity, routinization, participation, instrumental communication,
integration, pay, distributive justice, promotional opportunity, professionalism, general
training, kinship responsibility are independent variables in models impacting to job
satisfaction and intent to stay or leave. The model indicates that intent to stay has a direct
negative impact on turnover, when job satisfaction increases, intent to stay with the
organization will be increase as stated by Price et al.1
There are many reasons leading to increasing number of employees leaving their companies.
Mrs. Nguyen Lan Ngoc - Human Resources Manager - Vina One Corporation stated that:
Hot-Rolled Steel production is listed in the group of heavy - harmful – dangerous jobs by Ministry of
Labor, War Invalids, & Social Welfare. Workers have to work very hard in toxic environment which
is full of heat, dust and noise. Therefore, they easily quit jobs if they are not paid as what they
deserve to cover their sufferings.

Workers intend to quit after only one or two years working because of various reasons such
as heavy workload, unfair performance appraisals, job safety, etc. More than 70 % workers
in steel organizations who joined the annual surveys provide that they are unsatisfied with
current jobs and want to leave the jobs. Most workers in group of manufacturing
organizations suggest that biases from supervisors and unfair treatments are important
factors that push them to leave.


5

In addition, Mrs. Bui Thi Hai Hau - Human Resources Manager at Tan Thanh Quyen Steel
Co., Ltd made a speech in The Association of Long An Province Steel Company about the
problem of high turnover rate in current society. She shared that:

The percentage of workers, especially in heavy industry such as Hot-Rolled Steel division, has
increased continuously over the years. Most of them decided to leave early after less than 2 years
working. They need money to cover their living expenses and support their families, but they do not
get the salary level they deserve because of many reasons. Some of the reasons are the failure in
evaluating their performance, management biases, lacking of benefit and compensation.

2.2. The turnover status of Hot-Rolled Steel factory in Vina One

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Officers and other
Cold rolled steel workers
Hot rolled steel workers

2013
70
298
615

2014
85

290
845

2015
117
302
1218

Figure 3. Number of workers at Hot-Rolled Steel factory
(Source: Vina One Human Resource Department)
Based on the report and analysis of Human Resources Division in Vina One (Figure 3), the
number of workers at Hot-Rolled Steel factory (2015) were 1,218 (account for 74.4%/ total


6

employees). The number of workers continued to increase during the period of 2013-2015
(from 615 to 1,218 people), while Cold-Rolled Steel nearly keeps unchanged.
1%

Hot rolled steel factory
5%

8%

Age
23%

18-21
22-25

26-30

63%

31-35

>35

Figure 4. Employees‟ age at Hot-Rolled Steel Factory in 2015
(Source: Vina One Human Resource Department)
Regarding to the average age as shown in Figure 4, about 63% (equivalent 763 workers)
were 22 to 25 years old, 22.82 % workers were 18 to 21 years old and only 1.23% has the
age range more than 35 year of age. It can be seen that most of workers at Hot-Rolled Steel
factory were very young (22 to 25 years old) and therefore almost lack experiences.

48

More than 3 year
2 year to 3 year

88

1 year to 2 year

113
225

6 month to 1 year

744

Less than 6 month
0

100

200

300

400

500

600

700

800

Figure 5. Employees‟ working experience in 2015
(Source: Vina One Human Resource Department)


7

In Figure 5, there were 744 workers less than 6 month of experience (61% in total), 225
workers were 6 month to 1 year experienced and only 249 worker were more than 1 year
experience. Based on the population information of Vina One in general and Hot-Rolled
Steel factory, it is can be concluded that Vina One‟s workforce is young and inexperienced.

In fact, hot-rolling is a milling process which involves rolling steel at high temperature
(above the recrystallization temperature for steels). Steel workers are recruited with simple
requirements to have high school diploma or equivalent, apprenticeships available (not
required to graduate at colleges/university), physical strength, dexterity and stamina.
According to Reich et al2, there are three different kinds of service work including routine
production services, in-person services and symbolic-analytic services. Routine production
services include repetitive tasks, employees are paid by the amount of time they work at
their workplace with routine supervision. In-person services have the same point with
routine production services. This category includes repetitive tasks but require interaction
with suppliers or customer in–person, not only a piece of fabric or metal. Symbolic-analytic
services do not require the manual work such as routine production services, in-person
services but also enhance problem-solving and problem- identifying skills.
The job of steel workers at Hot-Rolled Steel factory belongs to routine production services
that they need to work for long hours stranding, bending or stooping. Their responsibilities
are to set up and operate production machines up to specific standards, grade batches of raw
materials and feed them into the machines; store goods and raw materials in factory storage
areas and warehouses, inspect finished products to ensure that they conform to quality
standards.


8

In addition, Spence et al.3 identified six types of workers including workaholic worker,
positively engaged worker, enthusiast worker, relaxed worker, disenchanted worker and
unengaged worker. A workaholic worker is a person who works very hard and attends to get
everything done at work. Workaholic is an addiction that leads to strife in their
relationships. They can face with stress and work-life imbalance. A positively engaged
worker is a person who spends almost their time for working and they love their job. They
always have positive thinking; however this dedication to work can lead to conflict with
their family and health problems. Enthusiast workers are hard-working and enjoy their job.

They are not too stressful, but the quality of work may not be high. Relaxed workers have
high emotional and lack of strife with their relationships. However, they may not be
motivated to strive to work more efficiently. A disenchanted worker has very low life
satisfaction and lack of positive emotion. This group of workers is a serious problem in
corporations. Unengaged workers have no motivation to work and they can decide to move
to other organizations. They do not have a lot of stress at work and their capacity depends
on the requirements of their managers or supervisors.
As it can be seen, workers are the main labor force at Hot-Rolled factory. From Table 1 as
below, 87.4% of employees (equivalent 1,218 employees) were front-line workers, 10.9%
were team leaders and only 1.7% was supervisors and board of directors. It means that
averagely 8 workers have 1 team leader and 60 workers are put under 1 supervisor. This
ratio can lead to a pressure on supervisors when evaluating each worker‟s performance and
it is hard for them to do this task correctly.


9

Table 1. Quantity and income/month of Hot Rolled Steel Factory in 2015
Position
1

Board of director of factory

2

Supervisor

3

Team leader

4

Worker

Quantity

Income/month (million VND)
3

26

20

16

152

11

1,218

4.1

+Reheating furnace

218

8.5

4.2

+Hot rolled cutting

90

6.5

4.3

+Structural iron

225

7.0

4.4

+Cooling + coilers

205

7.0

4.5

+Making

460

7.0

4.6

+Machine control

20

8.0

Total

1,393

(Source: Vina One Human Resource Department)
Workers who are in charge of reheating furnace have to work in toxic and dangerous
environment affected by heat, dust and noise. These workers were highest-paid employees
but their salary is only 8.5 million VND per month which is not high compared to the living
standard in big cities like Ho Chi Minh City. Other positions in this division also have very
low wages from 6.5 - 8 million VND per month as shown in the table above. Most of
workers (90%) have high school diploma or equivalent, apprenticeships available, only 10%
graduated from colleges or universities.


10

Moreover, as shown in Figure 6, the turnover rate of Hot-Rolled Steel workers was 41% (it
means 499 workers left the company) in 2015, which is the highest number in the last 3
years.

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Hot rolled steel workers
Cold rolled steel workers
Officers and other

2013
15%
11%
8%

2014
26%
13%
10%

2015
41%
15%
9%

Figure 6. The turnover rate of Hot-Rolled Steel workers at Vina One

(Source: Vina One Human Resource Department)
Compared to other competitors in this industry, Vina One has the highest turnover rate with
41% in 2015. These rates in others such as Tan Thanh Quyen Steel Co., Ltd, Nguyen Minh
Steel Manufacturing &Trading Co., Ltd, TVP Steel are only in the range of 23%-32%. Mrs
Bui Thi Hai Hau- Human Resources Manager at Tan Thanh Quyen Steel Co., Ltd shared
that:
In the industry of steel manufacturing, Hot-rolled steel division is the one with highest turnover rate
because workers often face many dangers in their working environment. They also have low salaries;
their benefits and performance appraisal are not concerned as well. This is one of the reasons why
they want to leave.


11

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Vina One
Manufacturing
Corporation

Tan Thanh

Quyen Steel
Co., Ltd

26%
41%

12%
25%

2014
2015

Nguyen Minh
Steel
Manufacturing
& Trading Co.,
Ltd
15%
32%

TVP steel

11%
23%

Figure 7. The turnover rate of Hot-Rolled Steel workers
(Source: Report from Vina One Human Resource Department)
As it can be seen from Figure 8 whose the data are collected from Vina One Human
Resource Department, the salaries of workers in steel industry are stable and only have a
slight rise in the period of 2014-2015. The facts from the below chart show that Vina One is

not the one having lowest salary when compared to other competitors in this industry.
Therefore, it could not conclude that the workers in Vina One quit their job for low salary.
Million/month
7,6
7,4
7,2
7
6,8
6,6
6,4
6,2

2014
2015

Vina One
Manufacturing
Corporation

Tan Thanh
Quyen Steel
Co., Ltd

7,2
7,3

6,75
6,9

Nguyen Minh

Steel
Manufacturing
& Trading Co.,
Ltd
7,5
7,6

TVP steel

7
7,2

Figure 8. The average wages of steel workers
(Source: Report from Vina One Human Resource Department)


12

Increasing turnover rate of Hot-Rolled Steel workers poses a threat to Vina One‟s vision of
being a leading steel manufacturer in Viet Nam and Southeast Asian region. Ellepola MG4
stated that maintaining low turnover rate helps reduce recruitment and training costs
because new-recruited employees do not contribute to the company outcomes during their
training and orientation period. Because the high turnover rate, the department of Human
resources at Vina One has to recruit new workers for Hot-Rolled Steel factory every week,
leading to spend a lot of recruitment costs (about 10 workers left company per week). New
workers need time to be trained; therefore the business results of the company in several
weeks are negatively affected.

Machine control
Making

Cooling + coilers
Structural iron
hot rolled cutting
Reheating furnace
0%

2015
2014
2013

Reheating
furnace
65%
35%
21%

20%
hot rolled
cutting
45%
28%
12%

40%

Structural iron
34%
18%
13%

Cooling +
coilers
36%
27%
14%

60%
Making
39%
26%
18%

80%
Machine
control
27%
19%
9%

Figure 9. The turnover rate of Hot-Rolled Steel workers in detail for each position
(Source: Vina One Human Resource Department)
In the last three years, the percentage of leavers in Hot-Rolled Steel factory of has been
increasing. From Figure 9, workers who work at reheating furnace have the highest turnover
rate with 65% in 2015 (increased 30% compare to 2014).


13

Others
Job duties boring/no change

Overall corporate culture
Lack of opportunities for career development
Workplace relationship problems
Recruitment errors
Performance appraisal bias
Work-life balance
Compensation and benefits
Personal problems
Job safety

3%
6%
7%
5%
8%
13%
19%
11%
12%
5%
11%

Figure 10. Reasons why people quit their jobs at Vina One in 2015
(Source: Report from Vina One Human Resource Department)
From Figure 10, there are some common potential reasons that employees left Vina One.
Performance appraisal bias (account for 19%) is significant factor that most affect to the
intention to quit the job. Biases can influence on employee performance evaluation in
incredibly negative ways. Other reasons such as job duties boring/no change, overall
corporate culture, lack of opportunities for career development, workplace relationship
problem, personal problem are not main factors that leading to high turnover rate. Most of

the people who took part in the in-depth interview did not mention above factors and they
were not the top of mind idea from their ends. Mr. Tran Cao Thang - a worker at Hot-Rolled
Steel factory, Mr. Nguyen Quang Huy – a senior worker and Mrs. Nguyen Lan Ngoc Human Resources Manager agreed that supervisors‟ point of view on performance appraisal
was a main factor that lead to high turnover rate.
The causes of bias can come from a variety of sources such as supervisors, managers and
human resources. Kraiger et al.5 found that supervisors can give higher ratings to their


14

subordinates. Prendergast et al.6 indicated that supervisors can distort their opinion in two
sides of performance appraisal. Firstly, the recruitment process can lead to a waste of time
because the candidates do not meet the requirements of organization. Secondly, it is difficult
to create an appropriate performance assessment system. Poon7 stated that performance
appraisals based on personal biases would lead to low job satisfaction and high turnover
intention. When employees know the results of the evaluation based on personal biases or
punitive purposes, they have no satisfaction at work. Zimmerman et al.8 found that the
supervisor‟s perspective of employee performance impact on employee‟s turnover intention.
Khan9 also showed the same result that employees' satisfaction and commitment are
affected by the bias and feelings of some managers, which then causes to increase employee
turnover rate.
Million VND
120
100
80
60
40
20

0

1-2015 2-2015 3-2015 4-2015 5-2015 6-2015 7-2015 8-2015 9-2015 10-2015 11-2015 12-2015

Figure 11. Recruitment cost
(Source: Vina One Human Resource Department)
Turnover rate affects negatively to an organization‟s operation such as increasing cost of
recruitment and training new comers, reducing performance efficiency, etc. The chart from


15

Figure 11 show the recruitment cost in Vina One in 2015 which increased together with the
turnover rate.
The above figures provide strong evidences that high turnover rate of hot-rolled steel worker
is an outstanding problem for the company‟s operation. The managers are looking for
solutions to reduce turnover rate and achieve financial targets. In order to obtain that target,
it‟s necessary to understand the causes of turnover rate, why Hot-Rolled Steel workers want
to leave the company and if biases from supervisors have any effects on this rate.
3. PROBLEM IDENTIFICATION
It is important to figure out the reasons for high turnover rate of Hot-Rolled Steel workers at
Vina One and its consequences. After examining many relevant literatures on turnover rate,
the potential antecedents that are believed to provide the most understanding are supervisor
relation, co-worker relation, perceived organizational support, training & career
development, reward & recognition and distributive & procedure justice.
In addition, seven in-depth interview sessions are conducted from 3 main groups (first
group: managers/supervisors/workers who are currently working in Vina One, second
group: workers who already left Vina One and third group: Workers who intended to leave
the company, but decided to stay). There are some key reasons leading to the high turnover
rate of workers at Hot - rolled steel factory including job safety, performance appraisals
bias, recruitment process errors, compensation and work-life balance.

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3.1 Job safety
The study of Ameen et al.10 provides that job insecurity is related to leaving intention. When
job insecurity increases, job satisfaction decreases and employees have more intention to
seek other jobs. Ismail H 11 also found same results showing that job insecurity significantly
affects to decisions of quitting the organization.
Mrs. Nguyen Lan Ngoc - Human Resources Manager in Vina One stated that:
One of the reasons why workers left Vina One was the toxic environment and unsafe situations.

Mr. Nguyen Hoai Nam – a supervisor at Hot-Rolled Steel factory also blamed the lack of
workplace safety toolkit, lack of reward and recognition. They are not equipped with
adequate protective equipment; many of them feel insecure when working in the factory.
They often work with harmful objects and suffer dangerous working environment such as
steel fragments, electrical spark which could injure them if they make a mistake.
Mrs Bui Thi Hai Hau-Human resource manager- Tan Thanh Quyen Steel Co., Ltd shared
that:
Some other steel companies with the same scale such as Tan Thanh Quyen Steel Co., Ltd, Nguyen
Minh Steel Manufacturing & Trading Co., Ltd, Vina One etc also have not invested in personal
protective equipment for workers because they all want to save cost for other activities to enhance
competitiveness. With the small scale in such a middle-ranked company like Tan Thanh Quyen,
saving costs is considered as a main factor to compete with other competitors such as Viet Nam Steel
Corporation, Hoa Phat Steel JSC, Pomina Steel Corporation.


17

Mrs. Nguyen Tuong Vi - a factory worker in Reheating furnace department left Vina One 3
month ago after 1 year working, currently working for TVP Steel in Long An province. She

shared that:
Reheating furnace department is the most dangerous workplace but she had no employment
insurance because the employers only had a temporary contract.

She had tried to work but she felt unsafe for her health while she had one breastfed children.
She often exposed to toxic gases which is not conducive to children, so she decided to leave.
In addition, work injuries occurring in manufacturing firms lead to high employee
turnover12. Urbanaviciute et al.13 stated that job insecurity and affective organizational
commitment have a negative relationship. According to statistics from the Human
Resources Department at Vina One, in 2015 there were 14 accidents for workers in hotrolled steel factory. In detail, there were 3 cases involving fainting due to breathe toxic
gases, 5 cases of injured in hands and foots due to sharp objects, 3 cases of nerves affected
by noise, 2 cases related to eye diseases and 1 accident with permanent disability due to no
protective safety toolkits when operating machinery. Workers are worried about level of
safety in their jobs that lead to increase intention to quit. If the company does not fix this
problem, workers may decide to leave the company sooner or later.
Mr Tran Cao Thang- a worker at Hot-Rolled Steel factory left Vina One 2 months ago
shared that:
All workers are well aware of this fact, but they accept to do the job as their job risks because they do
not know any other better job to move.


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3.2 Performance appraisal
Zimmerman et al.8 stated that job performance has a negative relationship with intention to
quit. Employees were less likely to quit if their supervisors regarded them as good
performers.
Mr. Tran Nhat Tan – a worker who has been working for 2 years in the role of Hot-Rolled
Steel- TVP Steel (Vina One„s competitors) and now he has joined Vina One in role of HotRolled Steel factory in 2013. He stated that:
Workers left factory due to lack of support from supervisors, unclear job description

(misunderstanding and unsure) for workers. Worker performance evaluation was based on their
supervisor‟s perspective. In addition, there is inconsistency in the way supervisor evaluate their
team. A few of them had good performances but were not recognized because they didn‟t have good
relationship with their supervisors. Directors and Human Resources manager do not care about the
real job performance of workers, only based on evaluation from supervisor.

Mr. Tran Cao Thang – a worker at Hot-Rolled Steel factory left Vina One 2 months ago
thought that:
Many workers have been suffering poor working conditions with consecutive shifts, unfair working
assessment and unanswered requests. The main problem was that their voices were not listened.

Biron et al.14 found that there was a negative relationship between performance appraisal
and turnover intentions under conditions of low task interdependence.
Mrs. Nguyen Lan Ngoc - Human Resources Manager shared that:
Majority of leavers from Hot-Rolled Steel factory received no support from their supervisors. Many
of them decided to work for other steel companies such as Nguyen Minh Steel Manufacturing &


19

Trading Co., Ltd, Hoa Phat Steel Joint Stock Company, TVP Steel though these ones offered less
attractive benefits.

Selvarajan et al.15 provide evidences showing that employee‟s performance assessment
results are influenced by management‟s bias. Managers can evaluate whether an employee
work successfully or not up to their perspectives without listening to employee‟s opinions.
Most recent behaviors or presented items become the primary focus of the review (recency
effect). Supervisors tend to make assessments based on short-term events, not based on the
entire appraisal period that can lead to false performance appraisals. They assume that the
trend which occurs in short term will continue and repeat. This is a dangerous bias because

of inaccurate performance ratings.
On the other hand, Moers16 found that subjectivity in performance evaluation can lead to
difficulty in making accurate decisions. This paper undertakes some literature reviews that
provide types of biases and errors in performance appraisal process. These biases are as
below:
Halo Effect was first introduced by Edward Thorndike17 that is a type of cognitive bias in
which our overall impression of a person (feature or trait) and how we think about him or
her. For example, when we perceive him or her to be successful, beautiful or attractive, we
also tend to see them as intelligent, kind. The managers may ignore other objective traits of
an employee because his positive qualities. This perspective is often based on personality
conflict or other factors that are not related to job performance. Managers can give high rate
for employees who have good relationship with them. This influences employee
performance appraisals as well.