Case study of motivating for HRM

Case study of Motivating!
According to a survey of Navigos Group, all employees assess remuneration
(hereinafter referred as Money!) as the leading factor in job satisfaction. Basing on this
fact, you should design a profit sharing program to motivate employees. That program
should reward them and make a "bigger" pie, so the percentage of smaller shares of the
owner will change to the larger profit. Analyze following company and outlined such
program.
Bubba Gump Shrimp Company
Bubba Gump Shrimp is a Vietnam-based American Company. Its business activities are
to buy shrimp, create brands and sell them to the US market. Here are facts of this
company:
•

50 employees, including 25 conducting phone sales to the United States and the

rest supporting office work. 5/50 employees taking charge of buying shrimp for sale.
•

Each sale staff earns U.S. $ 900/month whether they sell more or less. They have

been feeling "bored" because of work and sometimes they just make 10 calls/day, while
you know they have the ability to make 90 calls every day.
•

Office staff of help desk complains that they "have nothing to do" and they use

that time to play games on computers and get access to personal email. They often
spend 2 hours for lunch and they need some time to come far to find a place selling a
lunch costs 20,000 VND. After lunch, they sleep and miss some of the targets. These
staff can earn $ 600/month.
•

Turnover of the company is U.S. $ 30 million/year and profit margin is 15% after

tax, which is high compared to the industry.
•

You want your company to increase revenue by $ 50 million/year, but the

manager seems to fail to motivate the employees to sell more products. He submits for
approval of hiring more 25 people. This manager said that hiring more staff will bring
higher revenues.
•

The company is willing to list shares on the counter market and it has only three

owners of the whole shares.


•

Human resource manager is complaining that the company is losing its

employees at rate of 40%/ year and costs for recruitment, testing, screening and training
each new employee is $ 5,500.

Answer:
Social human resource in general and labour management in particular are the
most important asset of every country, determine the growth of economic, cultural,
social, ethnic positioned in the international arena. In every enterprise human is the
most important input, the decision process of combining resources in an effective

manner to create products and services to meet customer requirements, the existence
and development decisions of the business... Each employee has different reasons at
work because she can achieve what they need from work. What we need to affect the
spirit, motivation and quality of life of each one of us. Whatever the reason, the purpose
of most of the people work for the money, including salaries, wages, bonuses, benefits.
Underestimate the importance of wages and benefits to employees is a mistake. The
key to creating a dynamic work environment that is trying to solve things which are the
employees need and what they want are reasonable. We analyze the situation of the
Bubba Gump Shrimp Company to better understand the importance of this factor
Bubba Gump Shrimp is a Vietnam-based American Company. Its business activities are
to buy shrimp, create brands and sell them to the US market. There are 50 employees in
the company, including 25 conducting phone sales to the United States, employees
taking charge of buying shrimp and 20 employees are supporting office work.Summary
of the overall situation of employees in the company is that they get bored by too little
work, the ability to do their job is not maximized . Annual revenue of $ 30 million /
year, 15% after-tax profit margin. Companies want the revenue increased $ 50 million /
year, and hired an additional of 25 people to bring revenue to be achieved. Besides, the
company is ready to list shares on the counter market and only 3 owners of the whole
shares. And the company is losing employees at 40% / year while the cost of
recruitment and training of each employee is $ 5,500 / person.
Through the summary information of the Bubba company, the problem that the
company needs to solve is to build an evaluation program of compensation to
employees includes: wages, other forms of motivation to employees to work effectively


as well as program to issue shares for employee incentives to retain talent and bring
better benefits to the company.
1.Salary, Bonus and Remuneration:
For employees, the salary is the main income of the system of remuneration that
employees receive. These salaries and wages will help workers to reproduce their

labour capacity; it has a direct impact on the lives of workers as well as the lives of
their families. If salaries and wages worthy it would be the greatest source of
motivation to help employees improve their own work. For enterprises the salaries and
wages are the cost of business. But enterprises need to know how to make the most of
the functions of wages and salaries in order to create the most powerful motivation for
employees in the organization. Salaries and wages of itself is not the driving force.
Wages, the salary was too low for the labour re-production, not enough for them to take
care for their children then wages and salaries cannot become a driving force for
employees, even it works reverse. Wages only become a driving force when it meets
the physical needs for workers, giving them peace of mind about their income, the
payment of wages must also ensure that the principle in wage payment:
- Ensure that the principle of equal pay for equal labour
- Ensure the principle of the growth rate of labour productivity faster than wage growth.
- Ensure a reasonable relationship of wages between different workers in the economic
Thus to build a wage regime applicable to workers then we need to base on the
following steps:
a. Job analysis: is the process of gathering materials and evaluate systematically the
important information related to the specific job within the organization in order to
clarify the nature of each job. Job analysis has great significance and motivates
employees. Thanks to the analysis is that the manager can determine your expectations
for the job. Thanks to the clear job analysis that employees can understand the duties,
obligations and responsibilities of his/her work. Job analysis has a huge impact on the
labour force. Clear job analysis and details will help enterprise hire the right people,
assess the job correctly, it would be basis for evaluating reward and discipline. For
workers, the clear analysis and detailed work will help employees clearly understand


their job; they know what activities to follow. Based on the analysis of the work they
know when they are fined, they are rewarded. As detailed job analysis as accurate
performance appraisal made thus it is creating trust with employees.

In summary, an enterprise needs to have an analysis for each specific job. Analysis
more clearly, more closely, the more powerful motivation for employees to work
a. Performance Evaluation: is understood as the formal and systematic assessment
of the work implementation of the employees in the relation compared to the standards
were developed and discussed about the assessment for workers. To make the
evaluation of performance becoming a motivational tool for employees working in the
enterprise, Enterprises need to build its own a performance appraisal system officially
and publicly; Assessment System need to be clear and in a scientific way. The evaluator
must be qualified expertise and has professional ethics. Work performance appraisal
system should have clear standards, specific and must be disseminated to each
employee. From which employees may know the results of their work, based on which
certain criteria the enterprise evaluates the results of their work so that they take
measures to adjust the process of their work in order to achieve highest performance.
To apply any system of work performance appraisal in your enterprises, you must
also study the nature of the job should be assessed, the job need to be designed and
analyze the job clearly... we cannot get a job evaluation system made of a job to apply
for other jobs or use the rating system make this enterprises work for the application of
machinery in their enterprises be... we cannot get a job evaluation system made of a job
to apply for other jobs or use the rating system made for this enterprises to apply other
enterprises.
Performance appraisal system has been built formally, scientific identified, clearly and
openly to each employee but how does it work? It is the task of the evaluator. Perform
the assessment process often greatly influenced by subjective factors of evaluation. So,
who do the job assessment must first be qualified, honest, professional ethics, work
transference.... thus we can eliminate common errors in the job performance appraisal
process.
Since the performance evaluation results demonstrating enterprise recognition for the
work of the employee, therefore, it has a direct impact on workers in the payment of
remuneration, training and development, promotion, detention... The results of work

performance evaluation as accurately as stimulate employees to work, increase the
confidence of workers increase the labour productivity and work efficiency of
employees, increase employee engagement with enterprises. Motivating through
arrange, rational use of labour and improve working conditions. Current situation of
Bubba Company, each sales staff earns U.S. $ 900 / month regardless of whether they
sell more or less; this is an issue that needs to be considered. This policy is simple and
easy to understand, but poorly. Staff will work without any interest and the rate of staff
turnover is very large. They do work with fully productivity and only do a part of the
work and enough time to enjoy monthly wage. To be able to motivate employees Bubba
can determine the current salary for sales staff and support staff is receiving as a
monthly basic salary. To take full advantage of the labour productivity of employees the
enterprises need to evaluate the work of employees and a bonus can be added to the
salary calculated on the outstanding labour productivity and it is calculated bonuses on
the number of contracts that employees bring to the company business when revenue
exceeded the target. And additional amount to salary and wages is the amount
encouraged that workers salaries and wages do not. The company can implement this
reward at the end of each quarter or the end of the financial year. The company may
also pay an unexpected bonus in recognition of the outstanding achievements of
employees when they complete the important work projects or initiatives of great value.
Thus we can see the basic salary as income to recreate their labour productivity and the
bonus is leveraged to create incentives for employees to improve their own labour
productivity. For enterprises, the compensation is also is cost of the company hence the
enterprises need to build a payroll system, employee bonus calculation correctly and
making good motivational work will ease unnecessary stress, enhance the attractiveness
of salary, bonus ... Workers eager to work, stick with the organization, ready to give
their best for the organization. In addition to creating a fair wage and to establish a
system to suit the company should have the participation and agreement of staff and a
number of their representatives in the design of payment systems. Need to give
employees the opportunity to participate and comment on the wage system.

2. Motivate the employee to make them work dynamically and effectively


• Through training :
The selection of employees for training to increase chances of promotion not
only affects the motivation of the employees, but also a very large impact on the labour
force of the other labourers. If enterprises choose the right people who have the ability,
achievements deserved to send for training to increase their ability for job promotion
not only bring great benefit to the company, but also giving it a great job motivation.
Not only will these other workers also endeavour to imitate them in order to achieve
better labour outcomes. Training and promotion policies as clear, as attractive as
stimulating employees to work effectively and improve labour productivity. Thus to
effectively motivate employees most enterprises have to combine creating motivation
through training and other forms of promotion. Only then can combine stimulating
demand satisfaction in all aspects for employees.
• Motivate through working environment :
In an organization often having conflicts, conflicts between members then
effective work of the organization will not be high. Often employees have to spend
about a quarter of the time during the day for work. Normally employees have won
about a quarter of the time of day to work. Thus, working environment has enormous
influence the psychology of employees and their work efficiency. Motivate employees
through the working environment is an important measure of system measures to
motivate employees through mental stimulation. In the enterprises always maintain a
friendly working environment, people respect each other, help each other frequently,
the relationship between superiors and subordinates are not too stressful, professional
working style.... certainly creating psychologically comfortable working for employees,
each employee is always striving constantly and always maintain a fun atmosphere,
friendly during work, create conditions to improve effective work.
• Create a safe and healthy workplace :

All enterprises have a legal responsibility to ensure the safety and health of
employees and others affected by the operation of your business, such as customers or
suppliers. They are also obliged to comply with the legal requirements to protect the
environment. Using this method will also benefit you. The training to provide safety,
health and good environment will also bring good results. We also help you to improve


your reputation with customers, the local community and your employees. Your
reputation is an important asset, which helps you attract and retain customers.
This also helps to recruit new employees easier as well as can improve the
promotion of staff. It also encourages suppliers to work with you. Some businesses,
with a poor environmental systems, suffered result are customers, local communities
and even their own employees had turned against them. It is important for the
reputation of your business is not just a commitment to the environment, but also for
customers, employees and the local community aware of.
• Recognize contributions of the staff: through the evaluation of job performance on a
regular basis and feedback authenticity, presented the business objectives and recognize
the contributions of employees. Propose a worthy reward.
• Respect staff: request feedbacks, either personal opinion or through the employee
survey about whether they understand how their role, the support that they have and the
improvements for enterprises. Allocation of rights and responsibilities to employees so
they can have autonomy and promote the full potential of the internal forces.
• Regular exchange between leaders and members of the company: often creates the
opportunity to mingle with colleagues at events.
Through the above method to increase staff‘s motivation, Bubba company need:
1.

Create training opportunities for employees to improve performance at work and
evaluate work performance in due time given employees the opportunity to stand for
election themselves to higher positions.

2.

Create a comfortable working atmosphere and friendly as well as safe and healthy
through regular communication and equality between superior and subordinate
employees may find that they work for themselves and not employed. And with a good
working environment will arise many more innovative ideas.

3.

Recognize the achievements of workers through the job performance evaluation
as apply the bonus to employees when signed contracts exceed the proposed target. For
example: a sales staff can make 90 calls per day equivalent to 9 times of the revenue
brought back to company than usual. If the company‘s target is 50 contract per month,


if exceeded they can get bonus due from such contracts. That's business activities to
promote the likelihood of working at actually achieving a profit many times over.
4.

Give employees the opportunity to take advantage of their full potential and their
capacity. While the supporting office have a little job to do but the number of them are
20. They do not feel have enough work to do; they waste their time for nothing. Hence,
refer to their opinion and give the right policy and if they can bring signed contracts
then they can also receive bonus as sales staff. Irrespective of the departments, making
concrete decisions about the bonus so that they feel motivated, while increasing their
income then surely they will have to think more on the transformation of the
workplace. When you take advantage of this human resource is redundant, Bubba will
save the cost of hiring an additional of 25 people, and the cost of training new
employees.

5.

Organize meeting, training opportunities to create the contact between the leaders
and members to improve coherence in the company makes employees feel that they are
an integral part, and they are important to the development and such strong growth of
the companies.
Motivation to work is an important part in the management of staff performance.
Employees are the most valuable asset of the company, if you want a staff of high
productivity, success, companies need to ensure they are motivated and committed to
the company. While some employees may work full capacity without incentives, others
sometimes need a little push. If you do this, productivity will increase significantly and
at the same time the spirit of your employees will also improve.

3.Offer insurance of stock to employee to retain talents :
Any company will want to retain talent and human resource used in their company in
many different ways such as cash bonuses, products, welfare, training and advancement
opportunities. But recent years many companies have been quite successful when
applied to model stock bonus to employees. In integration trend ESOP will be an
effective tool to increase competitive advantage and promote the efforts of the staff for
the development of the companies. Through some research, both applied ESOP and
with the participation of the members of the company in making important decisions
have faster growth rate of 8 - 10% compared to other companies not apply ESOP.
Employee stock ownership (Employee Stock Ownership Plan - ESOP) is a powerful
tool that many foreign companies have applied for a long time to attract talent. Why


should apply ESOP because the company can attract more qualified personnel, because
the ESOP gives employees the opportunity to make more money if the firm succeeds in
creating value shares.

ESOP impacts fairly large on the growth of the company and this has been conducted a
research in 1987 by Michael Qurreay and Corey Rosen on a 45 scale application of
ESOP companies and compare each company with respective companies in the field of
business, scale ... not apply ESOP. The results showed that the companies applied
ESOP faster growth than the company not applies ESOP (about 3.6% / year). In
addition, the companies has applied both ESOP and having active involvement of
employees in management decisions as well as other important decisions, the growth
rate of 8-11%, faster than the companies not apply to ESOP.
Also ESOP make the rate of return on assets (ROA) is higher for the Company. Results
from a survey of 105 companies by researchers - Douglas Kruse, Joseph Blasi, Jim
Sesil and Maya Krumova of Rutgers University in 2000 showed that, in the same
period of 10 years from 1985 to 1995, the Companies applied program options to
purchase shares extend generate higher ROA from 2 - 2.5% compared with the same
companies do not apply this program.
ESOP is increasingly widely applied in the world for business earned 3 above gold
benefits. In Vietnam, the competitive pressure of the integration period, especially the
race talent searched, ESOP is more useful for enterprises .Thus, ESOP is understood
and how it is applied in the enterprise?
Through the analysis above, Bubba Company should offer specific solutions for the
issuance of preferred stock program to retain talent. Only three owners of the entire
number of shares when the company is ready to list shares on the counter market. So
Bubba Company should base on the assessment of the work to be able to consider the
condition to make decision of which employees chosen to purchase ESOP. Bubba
Company can build systems to evaluate the performance of the employees selected
purchase ESOP according to the following criteria:


• For senior management team must complete its tasks and achieve business targets of
revenue, profits of 80% or more. Besides, each member must mention 2 -3 “the DO”
matter to improve and enhance business processes.

• For sales managers are required to reach 80% or more of the criteria for revenue,
contracts, debt collection, in the year they must mention two problems which need to
improve in business operations of the department.
After you have selected the employee that meets the requirements, the company
supports employees to perform ESOP. Suppose the stock price of Bubba is
10USD/company shares on 1/8/2012 and they sold to employees at a price of 12USD /
share (higher than market 2USD) and options to purchase shares takes effect within one
year. Such employees who have been selected to purchase shares can be purchased at a
price of 12USD at any time within one year. If the stock price rises to $ 30, employees
can buy shares at $ 20 / share and sold at the right price (or at a different price on the
market) to make a profit margin of 10 USD / share
The company's profit sharing with employees contributes significant
achievement is a process that requires a great effort from both sides. Bubba should have
three key elements mentioned above in profit sharing. The final destination where
employees want to achieve is the result of the work they have put effort, recorded and
is also a shareholder in the company. So they have a motivation to develop the work,
they can bring 10 times revenue for businesses, directions to their destination further,
not only is rewarded according to the number of contracts but the main shareholders in
company, has the right and voice to make decisions. Thus the percentage of shares of
smaller owners will turn into bigger profits entirely.
From the aspects of a manager - When Bubba makes policy, spending in
unplanned bonus. Just planning a general way we have the followings:
-

Sales Staff call up to 90 customers / day

-

Office support staff calls up to 40 customers / day

Only count on total revenue that the company entirely brought by the sales staff when
having no motivation: 10 conversations / day * 25 people * 256 days / year = 64,000
sales calls that brought about 30 million /year. So just briefly with motivation:


(90 * 25 people) + (40 * 20people) * 256 days = 780,800 calls, approximately 700,000
calls succeed hence the revenue that they bring beyond the expectation is about 328
million / year. So Bubba does not need to hire more employees, Bubba needs to care of
this measure is to motivate employees so that they promote all their abilities. They can
keep talent; bring great revenues without having additional cost to hire and other
expenses.
For employees, plan to develop wages and specific level of bonus:
-

For sales staff, plan the revenue brought in the month, when exceeded a
specific implementation review on each contract to make a reasonable bonus. Annually,
or more than 6 months, review on the staff with excellent performance, depending on
the extent to preferential issue of shares to employees. Company would be willing to
share the profits of the company for employees to own shares. From there they would
be interested in long-term profitability of the company as shareholders.

-

For the remaining support staff, if they are capable of working on sales, let
them try and give a reasonable bonus. They will also receive stock if they bring profit
to the company achieved the maximum level. It will have a significant impact on longterm work in the company.
Not only in working people really need the motivation but even in human daily life
should be motivated to live. An unmotivated living will not exist. Natural selection is
the driving force of life for every human being. Not only humans but also animals and
plants as well, in order to maintain their existence they have to change the shape,

colour.... it’s so easy to adapt to changing living conditions.
In the economic, motivation plays a huge role, the state wants to attract foreign
investors by creating open investment environment, it is also one of the driving forces
to attract foreign investment. In companies the motivation comes from the goals of
creating motivation
Motivation making labourer to work harder and devote fully themselves to the
company, and commit to company. The exist and development of the company depends
on the working efforts of all members, dedication, contribution, wisdom of human
spirit, dedicated to the company. No company can survive and grow with superficial
people working, psychology always depressed, bored at work. Therefore, any company


should also motivate employees to employees. Motivating employees for employee’s
not working psychological stimulation for workers, but also increase labour efficiency,
business efficiency of the company, building professional staff, increase their
competitiveness in the market.....