High turnover rate and performance appraisals bias by supervisor in FPT telecom JSC region 5

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

NGUYEN MANH TUAN

(HIGH TURNOVER RATE AND
PERFORMANCE APPRAISALS BIAS
BY SUPERVISOR IN FPT TELECOM
JSC REGION 5)

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2019

1


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

NGUYEN MANH TUAN

(HIGH TURNOVER RATE AND
PERFORMANCE APPRAISALS BIAS
BY SUPERVISOR IN FPT TELECOM
JSC REGION 5)
MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: PROF. TRAN HA MINH QUAN

Ho Chi Minh City – Year 2019

2


EXCUTIVE SUMMARY
With the development of all aspects of life from society, culture, education to technology,
the quality of people’s lives is increasingly enhanced. However, along with these
developments as well as the rise of the people’s demands, they will have to work so hard
that they can satisfy all their needs as well as take care of their family perfectly.
According to Deborah Jian Lee (2014), most of people nowadays pay so much attention
to work that the time for their own family or their own personal life is increasingly
shortened. They cannot get rid of the whirl of work so they also cannot balance their own
lives, balance between the time for working and the time for living. This problem lasts
for a while will easily make them feel stressful and tired. And the result is that they will
give up easily all the things they are been doing and consider it as a release for them from
pressure.
This report will use both primary research and secondary research to analyze as well as
conduct the results about how the work – life balance effects on the turnover rate in FPT
Telecom Joint Stock Company – Region 5. After that, this report will use those
information and data to give some recommendations what the board of director of FPT
Telecom Joint Stock Company – Region 5 should do to decrease the turnover rate as well
as improve the cohesion of employee with the company so that the FPT Telecom Joint
Stock Company – Region 5 can complete the assigned business plan.

1


ACKNOWLEDGEMENTS

I would like to acknowledge all my family, my wife, my friends, my colleagues, my
classmates at ISB and FPT Telecom for their supporting, helping and encouragement
during my studies. Without them, I would not be where I am today.
Especially, I would like to thank my supervisor - Professor Tran Ha Minh Quan for
supporting me, give me the best advices, as well as guidance me all the time of making
this report. I will not complete this report without his wholeheartedly help.

2


TABLE OF CONTENTS
EXECUTIVE SUMARY

1

ACKNOWLEDGEMENT

2

I. INTRODUCTION

5

1. COMPANY BACKGROUND
2. THE STRUCTURE

II. PROBLEM CONTEXT

7

1. NUMBER OF SALE VOLUME IN FPT TELECOM & THE DECREASING IN FPT TELECOM –
REGION
2. THE TURNOVER RATE IN FPT TELECOM COMPARED TO TELECOM INDUSTRY’S TURNOVER
RATE

3. TURNOVER RATE IN REGION 5 – HO CHI MINH CITY IN FPT TELECOM

III. PROBLEM IDENTIFICATION
1.
2.
3.
4.
5.

14

WORK-LIFE BALANCE
SALARY AND BENEFITS
ERRORS IN RECRUITMENT
PERFORMANCE APPRAISALS BIAS
CAUSE-EFFECT MAP

IV. CAUSE VALIDATION

25

1. WORK-LIFE BALANCE
2. SALARY AND BENEFITS
3. ERRORS IN RECRUITMENT & PERFORMANCE APPRAISALS BIAS
V. RECOMMENDATION/SOLUTIONS

30

1. The first possible solution: biases from inexperience and untrained supervisors
2. The second possible solution: biases caused by inconsistency across supervisors
3. The third possible solution: recency bias and personal bias from supervisors’
performance appraisal
VI. ORGANIZATION OF ACTIONS

38
3


CONCLUSTION

40

REFENRENCES

42

APPENDIX

44

4


I.

INTRODUCTION
1. The company background
FPT Telecom Joint Stock Company (FPT Telecom) is a member of FPT Group – a
Vietnam’s leading technology group. Established in 1997, FPT Telecom has three
main products. Those are FPT Television, FPT Internet and FPT Play box. After
20 years of operation and development, FPT Telecom now has more than 200
transaction offices of more than 80 branches in 54 provinces and cities in the
country with more than 7,000 official employees and become the leading company
in technology industry in Vietnam. Moreover, FPT Telecom also has launched 8
branches in Cambodia as well as having the licensed in order to provide services
in Myanmar. They become one of the telecommunication and Internet service
providers who are trusted and loved by customers all over Vietnam and the region.
From the beginning of establishing, FPT Telecom
and their board of director set up their pioneering
mission are bringing internet products and services to
the Vietnamese people. They expect that every
Vietnamese family will use at least one service of
FPT Telecom with the motto "Customer is the most important". Along with their
development and reputation, FPT Telecom is always trying to invest more in
infrastructure, constantly upgrade the quality of products and services as well as

5


enhance the application of new technologies so that they can provide their
customers with superior service experience.
2. The structure
Annual General
Meeting
Board of

Supervisors
Board of Directors

Board of Directors

FPT International Telecom Limited Company

Functional Departments

HR Department

Customer Services
Center

FPT Software Solution for Business Limited
Company

External Relation
Department

International Sales
Department

Tan Thuan Telecom Limited Company

Quality
Department

Management &
Development Center of

Head Cable

FPT Telecom Tan ThuanJoint Stock
Company

Training
Department

Research Center

FPT Online Joint Stock Company

Financial
Department

Network Center

Branches of 7 Regions

Media &
Communication
Department

Infrastructure
Center
Third-Party
Supporting
Department

Firuge 1. FPT Telecom’s structure

(Source: FPT Telecom Human Resources)

6


II.

PROBLEM CONTEXT

1.

Number of sale volume in FPT Telecom & the decreasing in FPT Telecom –
Region 5
.

NUMBER OF SALES VOLUME

35.000

30.000

25.000

20.000

15.000

10.000

5.000

2015

2016

2017

2018

Gross
Region 1

Region 2

Region 3

Region 4

Region 5

Region 6

Region 7

Firuge 2. Number of sales in FPT Telecom
(Source: FPT Telecom Business Department)
FPT Telecom is separated into 7 regions for management and administration
easily. Those regions are Region 1 – Ha Noi Capital, Region 2 – Northwest,
Region 3 – Northeast, Region 4 – Central, Region 5 – Ho Chi Minh City, Region 6
– Southeast and Region 7 – Southwest. Region 5 – Ho Chi Minh City is the

biggest region because it contributes about 30 percent of FPT Telecom’s profit.

7


Besides, Region 5 is also rated as the most effective area with the highest sales
volume compared to the remaining six regions in the country from 2015 to 2018
However, in 2018, the turnover rate of Region 5 is 11%, highest compared to the
rest regions in the country and the sale volume in Region 5 in 2018 decreased
strongly, about 13% compared to the increasing of others regions.

GROWTH
20%
15%
10%
5%
0%
Region 1

Region 2

Region 3

Region 4

Region 5

Region 6

Region 7

-5%
-10%
-15%
Growth 2016/2015

Growth 2017/2016

Growth 2018/2017

Firuge 3. Growth rate of sales volume in FPT Telecom
(Source: FPT Telecom Business Department)
The lack of human resources in FPT Telecom Region 5 may be the reason
leading to reduce number of sales. In fact, if Region 5 is not enough sales
employees to sale the products of FPT Telecom, the sales volume in Region 5
will decrease and the business results will decline. The consequence is the
results of whole FPT Telecom will be going down too

8


2.

The turnover rate in FPT Telecom compared to the telecom industry’s
turnover rate
According to Michael Booz (2018), the turnover rate in telecommunication is
more than 10%. These sectors are two of sectors that have the highest turnover
rate compared to the other sectors like oil & energy, aero/auto/transport,
healthcare & pharmaceutical…

Firuge 4. The turnover rate in some sectors
(Source: Linked in)
Like we talked above, FPT Telecom has seven regions. Based on the scale of the
market of each region, the board of director of FPT Telecom will allow them to
9


recruit a certain number of employees in order to implement the business plan of
their own region. The number of sales employees that Region 5 is allowed to
recruit is 60 people while the other regions are from 25 people to 50 people.
However, the actual number of sales employees or salesmen is always less than
the number of employees is allowed to recruit in order to implement the business
plan effectively.

Region 7

Region 6

Region 5
2018
2017
Region 4

2016
2015

Region 3

Quota

Region 2

Region 1
0

10

20

30

40

50

60

70

Firuge 5. The number of salesmen in FPT Telecom compared to
the quota of salesmen that they are approved
(Source: FPT Telecom Human Resources)
This lack of human resources makes the implementing of assigned business
plan seem quite hard in most of the time of year.
10


Besides, one of the reasons for this situation also comes from the fact that the
actual number of sales employees or salesmen is always less than the number
of employees is allowed to recruit is the number of leaving employees or the

turnover rates in FPT Telecom are quite high compared to the
telecommunications’ turnover rate.
Year 2018

Total employees Sales employees OUT

Turnover Rate

Region 1

356

35

10%

Region 2

259

21

8%

Region 3

242

19

8%

Region 4

329

24

7%

Region 5

360

42

12%

Region 6

201

17

8%

Region 7

269

26

10%

Table 1. The turnover rate in FPT Telecom
(Source: FPT Telecom Human Resources)
Based on the total current employees and the number of leaving employees, we
can have the turnover rate in seven regions in FPT Telecom through in 2018. The
turnover rate in Region 5 is the highest one, approximately 12% compared to the
other regions, just from 8% to 10%. This Region 5’s turnover rate is even higher
than the turnover rate of telecommunication sectors – approximately 10%. This
means the lack of human resources in FPT Telecom – Region 5 seems more
serious in this time compared to the other regions and the board of director of FPT
Telecom need to be cared and solve so that Region 5 could complete the business
plan in the best way and contribute more for the profits of FPT Telecom.
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Turnover Rate
14%
12%
10%
8%
Turnover Rate

6%
4%
2%
0%
Region 1

Region 2

Region 3

Region 4

Region 5

Region 6

Region 7

Firuge 6. The turnover rate in FPT Telecom
(Source: FPT Telecom Human Resources)

3. The turnover rate in Region 5 – Ho Chi Minh City in FPT Telecom
Returning to the past, FPT Telecom just focused on two regions that are Hanoi and
Ho Chi Minh City. They just begin focusing on the other provinces and cities like
Cao Bang, Lang Son, Tuyen Quang, Ninh Binh, Dong Nai, Ninh Thuan, Lam
Dong, Ca Mau, Hai Phong, Da Nang… in five recent years. In the opposite, the
competitors of FPT Telecom like Viettel Telecom and VNPT Telecom had their
own position in 64 provinces and cities in Vietnam for a long time. Therefore, this
expansion of FPT Telecom is supposedly late and in order to dominate the rest
region as fast as possible, FPT Telecom needs to have enough employees to
expand their products as well as maintain the current market segment.
12


In fact, FPT Telecom does not have enough people to expand the products into 64

provinces and cities in the country like they wished, especially in Region 5.
Region 5 is the biggest region in FPT Telecom so it will be allowed to have60
salesmen in maximum. However, the actual number of salesmen in FPT Telecom
– Region 5 is just about 40 – 45 people through 2018.And it just takes under 75%
of the demand of Region 5’s human resources.

Type

Jan18

Feb18

Mar18

Apr18

May18

Jun18

Jul18

Aug18

Total
Employees

44

39

40

43

40

39

45

45

Sep- Oct18
18
47

Nov18

Dec18

39

38

43

Table 2. The number of salesmen in FPT Telecom – Region 5 in 2018
(Source: FPT Telecom Human Resources)
Besides, the lack of human resources, the number of salesmen in Region 5 is also

going down because there are a number of salesmen leaving the jobs. There are
many reasons for their leaving such as the salary and benefits is low, the job is
very stressful and pressure, the time for family and themselves is too little…
Jan18

Feb18

Mar18

Apr18

In (Join
work)

0

0

3

4

1

Out (leave
work)

4

5

2

7

2

Region 5

May- Jun18
18

Jul18

Aug18

Sep18

Oct18

Nov18

Dec18

2

2

3

1

1

0

1

4

3

3

1

5

4

2

Table 3. The In / Out Ratio in FPT Telecom – Region 5 in 2018
(Source: FPT Telecom Human Resources)

13


In fact, in 2018, the number of leaving employees was 42 people while the number
of newly recruited employees was only 18 people in FPT Telecom – Region 5.

The turnover rate of Region 5 is 12%, higher than the turnover rate of
telecommunication sectors (10.3%) and seems too serious to ignore.
III.

PROBLEM IDENTIFICATION
It is very important to find out reason why the turnover rate in FPT Telecom –
Region 5 is quite high compared to the other regions and the turnover rate of
telecommunication sector because Region 5 – Ho Chi Minh City is the biggest
region which contributes about 30 percent of FPT Telecom’s profits. The high
turnover rate of Region 5 will lead to the lack of human resources to implement
the region 5’s business plan.

GROWTH
20%
15%
10%
5%
0%
Region 1

Region 2

Region 3

Region 4

Region 5

Region 6

Region 7

-5%
-10%
-15%
Growth 2016/2015

Growth 2017/2016

Growth 2018/2017

Firuge 7. Growth rate of sales volume in FPT Telecom
14


(Source: FPT Telecom Business Department)
Moreover, like we talked above, FPT Telecom – Region 5 is rated as the most
effective area with the highest sales volume in the country for many years from
2015 to 2018. If Region 5 is not enough sales employees to sale the products of
FPT Telecom, the sales volume in Region 5 will decrease and the business results
will decline. In fact, in 2018, the sale volume in Region 5 in 2018 decreased
strongly, about 13% compared to the increasing of others regions.
After conducting five in - depth interviews from 4 groups (the first group is the
salesmen who are still working in Region 5, the second group is salesmen who
already left the sale jobs in Region 5, the third group is the salesmen who intended
to leave but decided to stay, and the final group manager/supervisor who are
working in sales department in Region5), there are some main reasons that they
mentioned for the high turnover rate in Region 5, including work – life balance,
errors in recruitment, salary and benefits and performance appraisals bias.
1. Work – life balance

In FPT Telecom, there are 3 main departments. Those are FPT Internet responsible for sale volume of internet and related internet service; FPT Television
- responsible for increasing subscriber installation and use of FPT IPTV (Internet
Protocol Television) and FPT Play box Department, established last year, is
responsible for selling FPT play box – a new product of FPT Telecom that help
customers to watch movies, music, TV without FPT Internet. The employees of

15


FPT Telecom will be responsible for sale volume of FPT internet FPT television
cable and FPT play box.
In order to get the assigned sales volume in month, the salesmen have to work so
hard from Monday to Sunday, there is no day offs for them. They even work
overtime in evening until 9pm or 10 pm because that is the time that their
customers feel free to listen to the introducing of FPT Telecom products. In some
situations, when their customers have some technical problems while using FPT
Telecom products, they have to come to their house and handle the problem for
customers. Based on the actual situation, there is not any balance between the time
for work and the time for the own lives and families of these salesmen.
One of our interviewees – Mr. Nguyen Ngoc Phuoc – the manager of sales
department in Region 5, said that the sales employees have to manage their own
time in an effective way so that they can balance between the time for working
and the time for family as well as for themselves. The people who already left the
sales department because of feeling stressful when they do not have time for their
family or their own is the people who cannot create a reasonable timetable and
make it become routine. And when this situation lasts in a long time, the sales
employees will feel very stressful and tired because their family will begin being
unsatisfied and complain about why they always work and do not care about the
other meaning things in life. The consequence in this time is that they maybe give
up the current jobs and looking for the new one that they can have more time for

family and themselves. Besides, too much workload will make them feel tired
16


after a long working day. Instead of having a good meal after working time, they
will just want to sleep after coming home and this is also not good for their health
in a long time.
2. Salary and benefits
According to Jonathan Ehimen (2014), the financial incentive has more important
role than the non – financial incentives because salary and benefits are rated first,
then is promotion, rewards and recognition at year end party.
According to salary policy of FPT Telecom, salesmen's salaries are paid based on
2 elements: base pay and job performance/KPIs. Base pay, which takes about 50%
of total salesmen’s income, is quite low from 3 to 4 million per month based on
the number of days worked during the month. Salaries paid based on job
performance/KPIs accounting for the rest 50% of income is evaluated by the
supervisor based on productivity (the number of FPT Telecom’s products that they
can sale in month), teamwork, compliance with regulations at work and attitude in
working. In fact, for salesmen with working time under one year, the average
salary is just about 7 - 8million Vietnam Dong per month. This is not a reasonable
salary compared to the time that salesmen spent and the pressure that salesmen
had to handle from working. Moreover, we can see that 50% of salesmen’s income
is based on the evaluation from their supervisors. This is quite emotional and nontransparent.
Mr Nguyen Lam Dong – salesman, who left FPT Telecom 5 months ago, said that
he left the jobs for taking a new position at the other company because he is paid
17


higher and he is willing to work hard in order to gain better salary so that he can
take care for his family well. According to Mohamed, Ahmed A.; Mohamad,

Mohamad Saad; Awad, Ahmed E (2017), there is a relationship between the pay
satisfaction and the turnover rate in company. The pay satisfaction is the amount
of negative or positive feelings that the employees have toward their pay while
working for a company. If the salary and benefits are good, they will feel satisfied
and commit with their company for a long time. If the salary is so low that they
cannot take care of life by themselves, they will tend to give up their current job
and find a better job with higher salary.
Besides, the lack of promotion, reward as well as recognition is also the reason for
sales employees decided to leave FPT Telecom. In fact, when the employees
receive more benefits based on their good performance at work, their intention to
quit the job is lower than other employees (Mohamed, Ahmed A.; Mohamad,
Mohamad Saad; Awad, Ahmed E, 2017).
3. Errors in Recruitment

Chart Title
8
6
4
2
0
Thg1-18 Thg2-18 Thg3-18 Thg4-18 Thg5-18 Thg6-18 Thg7-18 Thg8-18 Thg9-18 Thg10-18Thg11-18Thg12-18
In (Join for work)

Out (leave work)

18


Firuge 8. In / Out Ratio in FPT Telecom – Region 5 in 2018 (Source: FPT
Telecom Human Resources)

The recruitment process in a company always has an important role in the
development strategy because a good recruitment program will provide a good
impact on increasing commitment of employees as well as increasing the
productivity and working quality of employees. In 2018, the recruitment process
of FPT Telecom – Region 5 did not seem good because the turnover rate is high
while the number of new recruitment staff is quite low.
Mr. Nguyen Hoang Vu – salesman who intended to leave but decided to stay,
claimed that from the beginning, he was interviewed by a manager who just
worked for 3 years in sales department in Region 5. In addition, the interview only
took 15 minutes, ended quite quickly and then he was admitted to work while he
feels unsure about what actual work he has to do. This shows that the recruitment
process of salesmen is not methodical and professional, lead to the failures in
recruitment. The new recruited salesmen will feel hard to understand the work as
well as unsure about what job really is because the job description is not clearly.
In addition, the employees have the rights to know more about their jobs, their
career paths in the future as well as take part in the development of the company
by working and making business decisions. This will increase the commitment of
employees to the company. Besides, the information in recruitment process as well
as working process should be known from many multiple information channels,
not just from the information of supervisors in order to avoid the situation that the

19


managers or supervisors give false about the information of company or purposely
make the misleading information or hide the information deliberately so that they
can get the individual benefits.
According to Hong Y. Park, Raymond L. Christie and Gail E. Sype (2014), when
the employees are allowed to access to many sources of information, allowed to
take part in decision making at work more, the results of work are often better than

just based on the understanding of their supervisors. Moreover, this will help not
only reducing the supervisors’ bias in making decision but also decreasing the
intention to quit jobs of the employees, reducing the turnover rate.
To sum up, the recruitment process is one of the most important processes in an
organization. If the recruitment process is good, the understanding about the job of
employees will be increase, the commitment of them to the organization will be
also enhanced and the turnover rate of employees will reduce. Therefore, the board
of director as well as the managers of a company has to focus more on developing
their recruitment strategies in order to maintain the employees’ loyalty with the
company.
4. Performance Appraisals Bias
Like we talked above, 50% of salesmen’s income is based on the evaluation of
their supervisors in the number of FPT Telecom’s products that they can sale in
month, the teamwork, compliance with regulations at work and attitude in
working. This may not be unfair for the salesmen because every supervisor will
have the different evaluation criteria. For instance, in Region 5, Mr. Nguyen Minh
20


Toan, supervisor of a ten – salesmen team, worked in FPT Telecom for 3 years,
would like to evaluate his salesmen based on the number of products which are
sold in months as well as complete the assigned work on time. In the opposite,
according to Mr. Nguyen Hoang Vu, salesman who intended to leave but decided
to stay, said that his supervisor like to evaluate the salesmen’s performance based
on the process of working and the efforts of the employees while working. This
seems unfair to salesmen because there is no consistency across the supervisors in
evaluating the results of salesmen every month.
According to Mahmoud Javidmehr and Mehrdad Ebrahimpour (2015), the less the
errors as well as bias in performance appraisal for employee from managers and
supervisors, the better employee performance as well as the commitment of

employee will be higher to the company. In fact, employees who were regarded by
supervisors or managers as having a good performance will be less likely to quit
their jobs. For example, Mr. Nguyen Hoang Vu said that the reason makes him
decided to stay at FPT Telecom – Region 5 is the recognition from his supervisors.
He also stated that the employee will leave the company when they feel do not
have any supports from their supervisors or managers or they and their
supervisors/managers cannot communicate with each other’s, feel that the
information about assigned work by supervisors is not clear, easily in making
misunderstanding and the results of salesmen's work do not evaluate properly.
Moreover, if there is any misunderstanding or incompatibility between the
salesmen and the supervisor, the performance evaluation of salesmen based on
21


supervisors in this situation is no longer objective. For instance, some salesmen
who had good performance but did not have good relationship with supervisors
may not be recognized and rewarded truly while the board of director and human
resources manager in FPT Telecom do not care about how good the salesmen
perform, only just care about the evaluation from salesmen’s direct supervisors
and pay salary for salesmen based on it. This is the recency bias or personal bias
error in evaluation system of salesmen’s work that FPT Telecom in generally and
FPT Telecom – Region 5 in particularly need to be concerned about in order to
reduce the number of leaving employees compared to the number of leaving
salesmen in Region 5 in 2018.In addition, the error in performance appraisal also
comes from the evaluation in short term about salesmen’s work from supervisor
instead of evaluation in long term of what salesmen worked. This is a dangerous
error because this makes inaccurate in performance appraisal of salesmen
compared to what they try to perform.
Finally, the performance appraisal bias from supervisors maybe comes from the
lack of experience of supervisors or the fact that they are not be trained well for

the supervisor position. It also comes from the family background, the core values
as well as the ways of thinking or believing of every supervisor. According to Mr.
Nguyen Ngoc Phuoc – the manager of sales department in Region 5, most of the
supervisors in FPT Telecom are people who just work at FPT Telecomfrom 2
years to 3 years. Hence, the experience in work as well as the experience in
solving problems between them and their salesmen is not well. Besides, too much
22


workload makes these supervisors cannot take the time for learning as well as
taking part in the leadership training class. For instance, Mr. Nguyen Minh Toan a
supervisor in Region 5, said that he took a supervisory position for 3 years but
only attended one training class about how a supervisor should do to manage
salesmen and maximize the number of sales so that his team can complete the
assigned business plan.

23