Critical factores of employees motivation in manufacturing firms, evidence from vietnam , luận văn thạc sĩ

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

INTERNATIONAL SCHOOL OF BUSINESS
----------------------ooOoo----------------------

VO TRUNG TINH

Critical factors of employee's
motivation in manufacturing firms:
Evidence from Vietnam

ID: MBUS111041
Master of Business and Commerce (Honors)
Supervisor: Dr. TRAN HA MINH QUAN

HO CHI MINH CITY

02.11.2013


Critical factors of employee's motivation in manufacturing firms in Vietnam

ACKNOWLEDGEMENTS
First, Iwould like to express appreciation to some people, who
continuously supported and helped to complete this thesis.
I am extremely grateful to Dr. Minh Quan Tran Ha on the relentless
guide, who has taken the timely guidance and support to help me solve the
problems encountered during the implementation of the thesis.
I would also like to thank my colleagues at Wipro Unza Vietnam, and
the staffs working in VSIP, AMATA, etc. who helped me in providing the
responses to the questionnaire and the helpful comments on the some parts of

the study.
Finally, I want to express the special thanks and sincere to my family,
especially my parents, who were always anxious and continuously encouraged
me in difficult times and uninterrupted support material and love. The support
helped me enough courage and confidence to be able to firmly overcome
difficulties and successful completion of this thesis.

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Critical factors of employee's motivation in manufacturing firms in Vietnam

ABTRACTS
Motivation of employees at workplace was topic mentioned
continuously by management of these companies in Vietnam. This thesis aims
to specify the key factors affecting to motivation of employees, who has been
working in manufacturing firms in Vietnam. By adopting quantitative method,
five factors include advancement, salary, working condition, challenge,
management were extracted. Moreover, this study also investigated on
motivational profiles for some focus viewpoints of employee such as gender,
age and material status. At the end of thesis, some recommendations were
drawn to increase the motivation and satisfaction of employees at workplace.
Key terms: Key motivation factors, manufacturing firms,
motivational profiles.

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Critical factors of employee's motivation in manufacturing firms in Vietnam

Table of Contents
Chapter 1: Introduction..................................................................................................................... 8
I.1

Overview about the Vietnamese economic and labor in Vietnam................................ 8

I.2

Significance of the research........................................................................................... 10

I.3

Thesis structures............................................................................................................. 10

Chapter 2: Literature review and hypothesis................................................................................ 12
II.1

Literature review............................................................................................................. 12

II.1.1

Motivation theories................................................................................................ 12

II.1.2

Motivation profiles................................................................................................. 15

II.2

Demographics for employee's motivation.................................................................... 16

II.2.1

Roles of demographic in organization.................................................................. 16

II.2.2

Age.......................................................................................................................... 17

II.2.3

Gender..................................................................................................................... 18

II.2.4

Marital status.......................................................................................................... 19

II.3

Hypothesis and conceptual model................................................................................. 19

II.3.1

Motivation factors and hypothesis........................................................................ 19

II.3.2

Conceptual model................................................................................................... 23

Chapter 3: Research method.......................................................................................................... 25
III.1

Research procedures....................................................................................................... 25

III.2

Measurement scales........................................................................................................ 26

III.3

Pilot research................................................................................................................... 28

III.4

Main research.................................................................................................................. 28

III.5

Data analysis................................................................................................................... 29

III.5.1

Specify key factors................................................................................................. 29

III.5.2

Ranking motivators................................................................................................ 29

Chapter 4: Data analysis and Results............................................................................................ 30
IV.1

Sample characteristics.................................................................................................... 30

IV.2

Assessment of measurement of scales.......................................................................... 32

IV.2.1 Reliability check for measurement scales.................................................................. 33
IV.2.2 Validity assessment for measurement scales.............................................................. 34
IV.2.3 Assessment for reliability and validity motivation scales........................................ 40
IV.2.4 Assessment for assumptions of regression................................................................ 40
IV.3

Assessment of theoretical model and hypotheses........................................................ 42

IV.3.1 Assessment of theoretical model................................................................................. 42

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Critical factors of employee's motivation in manufacturing firms in Vietnam
IV.3.3Test of hypotheses......................................................................................................... 43
IV.4

Extract and rank for motivators in motivational profiles ............................................ 45

IV.4.1 Gender.......................................................................................................................... 46
IV.4.2Maritalstatus.................................................................................................................. 47
IV.4.3 Age groups................................................................................................................... 48
IV.5

Interpreting the results.................................................................................................... 49

IV.5.1 Regression model........................................................................................................ 49
IV.5.2 Employees' demographics.......................................................................................... 49
Chapter 5: Conclusion and recommendation................................................................................ 53
V.1

Conclusion....................................................................................................................... 53

V.2

Recommendations.......................................................................................................... 53

V.2.1 Advancement................................................................................................................. 53
V.2.2Management................................................................................................................... 54
V.2.3Salary.............................................................................................................................. 55
V.2.4 Work Challenge............................................................................................................. 55
V.2.5Working condition......................................................................................................... 56
V.2.6Motivation profiles based demographics..................................................................... 56
V.3

Limitation and further research directions................................................................... 57

REFERENCES................................................................................................................................ 59
APPENDIX...................................................................................................................................... 63

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Critical factors of employee's motivation in manufacturing firms in Vietnam

List of tables
TABLE 1. SUMMARY OF HYPOTHESIZES.........................................................................................................24
TABLE 2. LIST OF SOURCES FOR ITEM SCALES................................................................................................28
TABLE 3. SAMPLE CHARACTERISTICS...........................................................................................................31
TABLE 4. ASSESSMENT THE RELIABILITY OF MEASUREMENT SCALES...............................................................34
TABLE 5. RELIABILITY FOR NEW FACTORS.....................................................................................................35
TABLE 6. FACTOR LOADING RESULTS............................................................................................................36
TABLE 7. KMO AND BARTLETT'S TEST........................................................................................................36
TABLE 8. COMPARE FOR ORIGINAL AND REFINED SCALES...............................................................................39
TABLE 9. SUMMARY FOR CONSTRUCT AFTER RE-ASSESSMENT SCALES............................................................39
TABLE 10. RELIABILITY ASSESSMENT FOR MOTIVATION SCALE.......................................................................40
TABLE 11. EFA FOR MOTIVATION.................................................................................................................40
TABLE 12. DURBIN-WATSON VALUE.............................................................................................................41
TABLE 13. COLLINEARITY STATISTICS..........................................................................................................41
TABLE 14. MULTIPLE REGRESSION RESULTS..................................................................................................42
TABLE 15. MODEL SUMMARY......................................................................................................................42
TABLE 16. SUMMARY FOR HYPOTHESIS TESTING............................................................................................43
TABLE 17. MOTIVATION PROFILE FOR MALE AND FEMALE.............................................................................46
TABLE 18. MOTIVATION PROFILE FOR MARITAL STATUS WISE........................................................................47
TABLE 19. MOTIVATION PROFILE FOR SUBGROUP OF AGE WISE......................................................................48

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Critical factors of employee's motivation in manufacturing firms in Vietnam

List of figures
FIGURE 1: MASLOW'S HIERARCHY OF NEEDS..................................................................................................... 13
FIGURE 2. TWO FACTORS THEORY.................................................................................................................. 14
FIGURE 3. CONCEPTUAL MODEL................................................................................................................... 24
FIGURE 4. RESEARCH PROCEDURE................................................................................................................ 25
FIGURE 5. REGRESSION COEFFICIENT MODEL........................................................................................... 45

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

Chapter 1: Introduction
I.1

Overview about the Vietnamese economic and labor in Vietnam
Vietnam economic, in recently, been facing to the problem that growth rate
of GDP is slow down. Economic growth fell sharply in the period from 2006 to
2011.GDP in 2006 was 8.23%; a 0.23% increase was recorded in the following year
reached 8.46%.Next two years 2009 and 2010, the GDP growth rate has fallen

sharply and bottomed out in 2010 at 5.32%.The economy recovered and the GDP
growth rate increased to 6.78 percent before falling to 5.89% as the summary of Le
Xuan Nghia (2012).With developing economies such as Vietnam, the GDP growth
rate below 7% is indicated for the slow growth and signs of instability in the
economy. Three factors such as capitals, labor and productivities contribute the
different proposition in the Vietnam economic.
The contribution of labor into the growth rate of GDP has slightly decreased
in recently year. According to the statistics on the proposition of factors on the
growth of GDP of Bui Trinh (2012 ) and cited by Le Xuan Nghia (2012), the
contribution rate of labor factors into growth rate of GDP of Vietnam had decreased
about 5% in 2006 to 2010 in comparison with period 2000 to 2005. Total factor of
productivity had also gone down deeply. On the other hand, capital factor had
become the main factor in the growth of the economy. In developing countries, the
economy relies heavily on the development of investment dynamics are easily hurt
when economic events occur. The government and policy makers need to create a
driving force for development from the labor factor.
Moreover, today, in the era of knowledge-based edge elements and creative
labor has become the main factor of competition between economies. The strength
of the economy is conducted from power of the enterprises in the economy. To get
the strong business and competitive with foreign firms, especially in the context of
our country joined the World Trade Organization; Vietnamese firms need to
improve further capacity competition and firm innovation in the field of
professional activity. In order to keep pace with the requirements of the new
situation, enterprises need to focus on solving the internal problems of the business
such as technology, management, labor productivity and especially the need to
further improve employee motivation and their retaining.
The success of an organization, during the time of history, is developed by
the goods relations with employees by fulfill their needs and expectation, in a
return, to apply the rules and regulations, work under the standard and achieved
goals (Khan, et al., 2010). Management has to address and understand employees'

needs and expectation, in order to maintain the high growth rate in business. Many
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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

scholars had determined many theories and tools to satisfy this aim and help
management to build strong relationship with their staffs.Managers discuss how to
motivate their employees in order to increase productivity as well as the moral at
the workplace. Each individual is different and motivated differently and is depends
on what stage in life as person is at. Motivation has been defined as "the amount of
effort that an employee is willing to put into work to accomplish an
organizationally valued task" (Phatak, Bhagat & Kashlak, 2005, p.418), but it can
be defined as "the processes that count for an individual's intensity, direction,
persistence of effort toward attending a goal" (Robbins, 2005, p.170). Motivation is
not something that is observable in the organization ( Phatak, et la 2005) and most
managers do not understand what motivates their employees because they do not
aware that individuals in the organization has unique motives for working (Hiam,
2003).
Motivation is a key organizational concept, organizations are willing to hire
and continuously seek motivated employees and managers with ability to motivate
others. Most of people think rewards will motivate people better, but due to culture
differences in the world, it is important to recognize that rewards might be valued
differently (Francesco & Gold, 2005). Most studies in the past have been conducted
on job satisfaction intrinsic work motivation and these studies have focused on
specific countries or even specific firms. The outcomes of these studies indicated
that there are differences on motivation of employees based on their characteristics
such as gender, people color, age, etc.(Enskildsen, Kristensen & Westlund, 2002).

Motivating for key people is a foundation leaded to the success in business
of organization. There are lots of paper and researches over the world on employee
motivation. Although the organization has policies to encourage for all employees
of the company, managers of firms needs to customize and adjust the policy to
adapt with different demographic of employees because they own the differences in
characteristics, psychologies and variety of needs. Therefore,a customized HR
practices need to be carried out to reach to gaps inunique HR strategyfor many
group of employees in organization. Each employee should be encouraged and
motivated by different ways and methods. Kim Dung (2005) figured out six factors
to motivate employees who work in small enterprises in Ho Chi Minh City of
Vietnam. However, Kim Dung and other scholars has not investigated in different
weight of motivating factors affecting to motivationadapted with different
demographics of employees in a focused industry,like to manufacturing industry,as
well as in Vietnam.Manufacturing industry is one of leading industries in
Vietnamese economy in some next years. Therefore, the author chose this industry
to conduct further investigation on employee motivation. Moreover, the goal is this

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

study is not only to test motivating factors, but also to investigate the importance of
those motivating factors on manufacturing industry in Vietnam.
In response to the above stated problem, this research is conducted with
below aims:
- To determine key factors for employee in manufacturing firms in Vietnam.
- To draw the importance of motivation profiles between each sub group in

age, gender and marital status.
- To compare and test the difference in motivation profiles within
demographic of employees.
- To suggest recommendations for HR managersin manufacturing industry
to maintain the highest staff’s motivation
Regarding to the limited resources and short time frame, the empirical data
for the research was collected from the manufacturing firms located in Ho Chi
Minh City and provinces around of this city. This area will be selected because
many industrial zones and manufacturing firms located here and they can take a
representative role for population of firms belonged to manufacturing industry in
Vietnam. During the research, we focus on a arrange of employees as mentioned
below
- Respondents on this study include labor staffs, officers, supervisors and
managers and who hold bachelor and higher.
- Only work – related factors will be investigated in this study. Other
possible factors (e.g. social or cultural factor) are out of scopes of this
study.
I.2 Significance of the research
To give out the order of some observed motivators focused on sub groups
under age, gender and material status. The outcomes research will help the
managers in manufacturing firms relocate the HR practices to satisfy with the need
of their staffs in the term of optimizing the labor cost and maintain the highest
motivation of employees. The results from the present study might have high
importance for managers of Vietnamesefirms in terms of choosing best motivation
strategy, towards, maintaining the high staff's retain rate.
I.3 Thesis structures
This research will be structured on some chapters as the following

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

ƒ Chapter 1 contains the overview of this research including the aims,
signification of the research.
ƒ Chapter 2 will review some literatures, develop hypothesis and conceptual
model.
ƒ Chapter 3 points out the research methodology conducted in this thesis.
ƒ Chapter 4 will present the data analysis based data collected.
ƒ Chapter 5 will discuss on the outcome of the research, some implications for
HR practices and findings.

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

Chapter 2: Literature review and hypothesis
II.1 Literature review
II.1.1 Motivation theories
In history, the earliest attempts to determine the motivation started with the
concept of hedonism (Charles Darwin, Sigmund Freud): the idea that our behavior
is either search for pleasure or staying away from pain (Mills, et al., 2006). Applied
at workplace, this means that employees are motivated by receiving pleasure in
form of money or praise or by avoiding pain, in form of reduced pay or
termination. The importance of these early concepts is in the fact ―that even today,

all motivation theories are based, at least somewhat, on the concept of hedonism
(Mills, et al., 2006, p.214). The list of these Early Theories of motivation, that are
mostly referring to the basic human motivation for survival includes the Darwin’s
Instinct Theory, Hull’s Drive Theory and the Behaviorism Theory of Skinner and
his followers.
The contemporary theories of motivation provide more specific guidelines
towards the choice we need to make specific motivators should be researched.
There are many classifications of the contemporary theories, and most commonly
used classification is the one that sorts them into Need Based (or Content) Theories
and Process Theories (Banibaker, 2008; Ramlal, 2004; Romando, 2007). The
classification was based on the influencing factors that determine and explain the
motivation. Need Theories focus on the personal characteristics of the
people/employees and the needs those characteristics create. Process Theories focus
on motivation as a process and explain the context and other processes that have an
impact on themotivation. At the same time, one group of theories does not exclude
the other.
Need Based Theories
These theories rely on human needs as the point of origin for the motivation
process, and most prominent theories that belong to this group are: Maslow’s
Theory of Needs, Herzberg’s Two-factor Theory, Alderfer’s ERG Theory, Edward
Deci and Richard Ryan’s Self Determination Theory, McClelland’s Need Theory
and McGregor’s X and Y Theory. Some of them will be examined further in the
text.
Maslow’s Theory of Needs states that the employees/people are trying to
satisfy their different needs ordered in few levels and every higher level leads to
more pleasure. Maslow's hierarchy of needs theory iscombined of five needs such
as physiological, safety, love, esteem and seft-actualization.
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Critical factors affecti ng employe es’ motivation of manufacturing firms in Vietnam

Fig ure 1: Ma slow's hie rarchy of needs
Source: Adap ted byRob bins, 2003 , p. 156
Maslow 's need theory is order fr om the b ottom to the top of the
hierarchicalpyramid. Two levels of needs at the bottom were considered as the loworde r of need s because they are satisfied externall y. The re maining t hey are satis
fied by internally an d therefore higher-order of needs.Maslo w cited Di Cesare
& Sadri (2003), stated th at the needs must b e met from the bottom to the t op level of
pyramid of needs. A n eed is not motivatin g when satisfied and therefore the next nee
d become dominant. In fact, w hen worker is satisf ied with the lower level of
nee ds he or sh e will beh ave in a manner tha t will mo tivate them
nee ds.

to obtainhigher

Another classic within the pool of need theories of motivation is the
Her zberg Tw o Factor Theory. H is theory also reli es on the needs an d their
satis faction co ncept, bu t according to this theory, the
needs ar e grouped in two
levels/groups: 1) hygien e or dissatisfaction avoidanc e factors (imperative to be
satis fied) and 2) motivating or gro wth factor s (additional motivating force a fter
the basic needs are satisfie d). Intrin sic factors, such as advancem ent, recognition,
responsibilities and achievement are related to job satisfaction. J ob dissati sfaction
is a result of extrinsic factors su ch as sup ervision, pay, comp any policies and
working condi tions. Herzberg also conclude d that a job does not get satisfying by
removing dissatisfaction factors an d therefore dissatisf action is not the opposite of
job satisfaction. The two factors are of equ al import ance when explainin g what
motivates an employee.

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

Figure 2. Two factors theory
Source: Adapted by Robbins, 2003, p.160.
According to Herzberg ( 2003) the following nine factors motivates
personnel; reducing time at work, spiraling wages, fringe benefits, human relation
training, sensitivity training, communications, two-way communication, job
participation, and employee counseling. Bassett-Jones and Lloyd (2005) explain
that Herzberg suggests that motivation is similar to an internal seft-charging battery.
For employee to become motivated the energy has to come from within. Herzberg
augured that motivation is based on growth needs; it is founded upon satisfaction
born of a sense of achievement, recognition for achievement, responsibility and
personal growth. Herzberg suggest that recognition for achievement is translated
into direct feedback, responsibilities to self-regulation, authority to communicate,
exercise of control over resources and accountability, whilst advancement and
growth translated into the central dynamic of new learning leading to new
expertise. Willy (1997) added that most empirical studies done in the past have
used this theory and findings show that the needs for salary, recognition and
responsibility have operated both as motivators and as hygiene factors.
One more theory should be highlighted; The Self-Determination Theory is
somewhat close to the Herzberg Theory since it also postulates autonomous
(intrinsic) and controlled (extrinsic) motivations. The use of extrinsic rewards in the
early experiments was found to induce controlled motivation, while intrinsic
motivation is an example of autonomous motivation (Gagne and Deci, 2005).

Process Theories
There are several theories that belong to this group and the most commonly
used are: Adam’s Equity Theory, Vroom’s Expectancy Theory, Goal-Setting
Theory.
The Adams Equity Theory explains the motivation process as reduction of
inequity theindividuals evaluate their outcome/input ratio and compare against

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

other employees. Then theytend to and are motivated to reduce the inequity (Gagne
and Deci, 2005).
The Goal Setting Theory, as one of the most prominent process theories,
assumes that the human behavior is guided by conscious goals and it suggests that
other concepts, such as needs, values and motives, affect and moderate the actions
through different goals (Gagne and Deci, 2005). It suggests that the employees are
motivated and driven by the goals they set for themselves and the performance is
better when they set specific, rather than vague goals. In Goal setting Theory, Locke
states that specific and difficult goals lead to higher performance with the help of
feedback. In addition to feedback, goal commitment, adequate self-efficacy, task
characteristics and national culture have been found to influence the goalperformance relationship. Mayer, et al. (2004) explain that motivation come from
the goals an individual sets up based on human needs, personal values, personality
traits and self-efficacy perception which are sharp through socialization and
experience. The behaviorindividuals are used to accomplish the goal depends on
whether the goal is difficult or specified. The amount of effort an individual put in
reflect the level of satisfaction experienced which can lead to other actions. In order

to reach the goals some conditions has to be present feedback, goal commitment,
ability and task complexity.
Vroom’s Expectancy Theory is one of the most popular motivation theories.
Robbins (2003) defined the theory as "the strength of a tendency to act in a certain
ways depends on the strength of an expectation that the act will be followed by a
given outcome and on attractiveness of that outcome to the individual" (Robbins,
2003, p. 173). The theory focuses on three motivation elements: inputs,
performance and outcomes (Daniel and Metcalf, 2005). According to Vroom’s
theory, in order to have high motivation, employees need to have high expectation,
i.e. when they believe that high level of effort leads to high performance and high
performance leads to desired outcomes, only then they are highly motivated.
Wiley (1997) clarifies that all of the above theories are part of broad field of
human motivation study and they all have implications for individual's different
workplace behavior. They can be applied to a variety of management practices
aimed at motivating employees.
II.1.2 Motivation profiles
Many researchers have conducted many studies on motivation profiles such
as Cardona, et al. (2003), Havercamp and Reiss (2003) and Ahmad (2010).
According to these scholars, motivation profile is a set of factors that determine
what motivates certain person.

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Motivation profile, according to Cardona, et. al. (2003) is a set of motivation
factors for particular context and they are combined from four possible of different

types of motivators: extrinsic, intrinsic relational and contributive motivators.
Every employee/person has a specific motivational profile, which is a combination
of these four types of motivation.
Havercamp and Reiss (2003) explain the motivational profile using the term
desire profile or personal hierarchy, referring to different level of prioritization of
15 strivings. Moreover, each striving motivates specific person to a different extent
and in a different way, by creating a desire for that specific striving to be satisfied.
The fifteen strivings/motives are Social Contact, Curiosity, Honor, Family,
Independence, Idealism, Eating, Power, Order, Status, Vengeance Romance,
Exercise, Acceptance and Tranquility.
Ahmad (2010) delimited motivational profile by using different personality
characteristics and needs. These components includes: need for achievement, locus
of control, ambiguity tolerance, risk taking propensity and type-A personality
characteristics and based on the combinations of those five components the author
determines different motivational profiles.
To focus on the objectives of this research, the term motivation profile will
be utilized, since the target of this thesis is to carry out pragmatic implications
regarding practices that base on differences in motivation. Also, due to extract
specified guideline and exact motivation that can be applied and handled within
manufacturing firms in Vietnamese context, some selected motivators will be
chosen, relying on the theories of motivation and real conditions in Vietnam.
In conclusion, motivation profile term used in this study is to mention some
motivators in section II.2 for an employee once he or she chooses a new job and
resigns the current one, or while still performing on the current position, we
specified the term motivational profile as one of the research objectives of this
thesis.
II.2 Demographics for employee's motivation
II.2.1 Roles of demographic in organization

Many scholars stated that different demographic groups could be motivated

by different things. In the scopes of this research, I examine the issue of motivation
related to different age, different gender and marital status of employees, and will
indicate how important those demographic groups are for the companies. Within
the literature, there are many authors that indicate the importance of young and old
employees and the values they bring to the companies (Helgesen, 2010; Latupalli,
2011; Pitt-Catsouphes and Smyer, 2005; Wong, et al., 2008;etc.). For instance, PittVo Trung Tinh

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Catsouphes and Smyer, 2005 argue that employing older works may help
businesses address talent shortages, recruitment challenges and unwanted turnover.
The young employees, on the other hand, are as valuable as the old ones, since they
bring fresh ideas and energy, more creativeness, desire to learn and advance – the
forces that drive one organization forward and prevent it from getting old and being
outdated. Any industry is built and driven on two major forces: people and their
ideas, irrespective of their rankings (Latupalli, 2011). Hence, the more young and
fresh brains and the ideas that come with them - the better opportunities are
available to advance the organization.
The beneficial of this study is to review and examine the possible difference
between demographics of employees such as subgroup of age, gender and marital
status as well as specify some tools or motivating factors that can be practicedand
applied.
II.2.2 Age

It cannot be expected to see the same motivators being equally important to
workers at different age. We assume that older employees prefer to secure,
challenging and stable positions, concentrate tohigh compensation.This resulted

from the fact that they have to take responsibilities for their families, they have
learned enough during the career path, they already migrated to many companies
and jobs positions and now, they need stable life, well compensated and positions
that provide challenging and interesting tasks. The young ones should be more
motivated by advancement opportunities and jobs that provide creative and
interesting tasks, learning and upgrading programs, support from supervisors and
co-workers. In this section, we review research studies of authors who examined
the age differences in motivation.
There is significant difference in the level of importance of motivational job
factors, between younger and older workers, as the discovered in Lord’s (2006)
research. Employees aged less than 50 years focus on advancement, security, and
the way that their supervisor relates to them, while the older workers, (more than 50
years) place more importance on independence. The overall results of Stead’s
research (2009) indicate that motivational needs of the employees in Australia vary
with age, and that males and females are driven by different motivational sources.
With respect to the effect of age on motivation, his analysis shows the differences
in motivational needs of young needs and old employees (Stead, 2009, p.130). He
recorded that older workers have a greater need for freedom and scope to organize
their own work than younger workers do. At the same time, they have less need for
training opportunities and tasks that promote the acquisition of new skills than
younger workers, and are less concerned with their career advancement. The results
can be explained with the fact that the careers of the older workers are already
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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

developed and advanced and they have all the knowledge and experience. The

younger workers, since they are at the beginning stage of the career and have plenty
of new knowledge, experience and wisdom to gain.
II.2.3 Gender

The gender influences the behavior of a person in everyday life as well as at
work. According to Helgesen (2010) cited in Turmel (2010), one of the major
differences in behavior at work is that women are highly skilled multitasks, while
men are able to concentrate on one thing for more concentrated periods. According
to many authors (Rynes, et al., 2004; Stead, 2009; Vaskova, 2006; Wagner and
Hollenbeck, 2010), differences between the two genders exist, regarding their
motivation at workplace. For instance, according to the motivation research of
Vaskova (2006), in Czech Republic men place higher value on basic salary and
bonuses (money) as motivational factors, while women place more importance on
inter-personal relationships at workplace, respectful treatment by employer and the
possibility of reconciling work and family life (good work environment and the
location of the work place). Stead (2009) in his age and gender study in Australia,
also recorded gender differences –his results show that males and females may be
driven by different motivational sources. Worthley, et al. (2009) in their research
reveal that in Japan there is significant difference between the genders, only with
respect to extrinsic motivation i.e. the hygiene factors as per Herzberg’s theory.
Women rate, on average, more highly than men the extrinsic motivating factors,
and those are interpersonal relationship, quality of supervision and leadership,
company policy and administration, employee empowerment, job security, salary,
working conditions and fair evaluation. Four of the eight extrinsic motivation items
are characterized by significant differences (at least 90% confidence) in the
distributions, with women tending to provide higher assessments for interpersonal
relationships, company policy and administration, and fair evaluation, and fewer
low assessments than men for company policy and administration do. In addition to
these findings, though the intrinsic motivators were not found to be significantly
differently valued, still one of them-company’s growth prospects are somewhat less

of a motivation to women relative to the men (Worthley, et al., 2009).
The motivation has important role in the effective management within
organizations and it is a source of competitive advantage, which can bring the
companies on the top of the performance and profit scales. The employees at the
age from 25 to 60 years, as well as both genders, have significant participation in
the overall employed workforce in Vietnam and they all bring specific and unique
values and advantages to the work environments that they are part. Hence, it is a
challenge to the managers of the organizations to find appropriate motivational
tools in order to encourage all these demographic profiles, since they contribute to
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the organizations’ success. Based on previous research studies conducted in other
countries, like USA, Australia, UK, Czech Republic, South Africa and Japan, it can
be concluded that there are motivational differences between employees of different
age and gender. Those results indicate that women prefer work-life balance factors
(location, work environment) rather than money, which is opposite to men who give
more value to good financial compensation (Rynes, et al., 2004; Vaskova, 2006;
Wagner and Hollenbeck, 2010; Worthley, et al., 2009). In addition, advancement
(personal growth) and security are more important to women (Stead, 2009 and
Worthley, et al., 2009). Career advancement (personal growth and development) is
more important workplace factor to younger employees than to the older ones
(Kovach, 1995; Lord, 2006; Lunsford, 2009; Stead, 2009; Wong, et al., 2008).
Work-life balance (work environment and location) is more important to mid aged
employees (40-49) in relation to the other age groups (Stead, 2009). Financial
compensation/money is more important to younger than the older employees

(City&Guilds, 2008; Kovach, 1995; Stead, 2009), while challenge (interesting jobs)
is more of a motivator for older employees (Kovach, 1995; Stead, 2009). Still, it
should be noted that not all motivators differ depending on age and gender of
employees-there are some motivating factors that are equally important to both
genders and all age groups (Ross, 2005; Stead, 2009).
II.2.4 Marital status

Getting married marks a very important milestone for every person. A
changing from single status to married status strongly influences the decision to
choose a company to work. Moreover, it also affected the motivation of employees.
There is the different on role of economic support andfamily care, especially
children care, of the husband and wife between the West and East countries. Asia
women often spend more time for their family than women from the West countries
do. This is resulted from strongly influenced by Confucianism ideology.In the
perspectives of a wife in Asia, they need a work-life balance to reserve time to take
care their children and family. For the husband, they intend to be more careful in
changing careers because they are matures in thinking and do not want to take
adventures in careers. Anyways, either a wife or a husband, they alsohave tendency
to stay in works and contribute for jobs because of their family.
II.3 Hypothesis and conceptual model
II.3.1 Motivation factors and hypothesis

From the literatures review, as per many researches done in general and
specific industries such as hotel, steel, woods and pharmacy manufacturing
industries andbased on the context of manufacturing industry in Vietnam, focused
on Ho Chi Minh city, we get into detail some motivating factorsas the following
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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

a. Salary
During the time, many scholars have been argued in heated debate on the
role on salary in motivation profile. Some studies stated that salary is treated as the
outcomes and usually observed with little precision (Mitchell and Mickel, 1999)
cited by Doan Duc Minh (2011). Psychological theory states that the importance of
fairness is a basic need for the well-being and satisfaction of employees (Blau,
1989).Moreover, equity theory determined that individual has tendency to keep
balance between the thing they perceive their inputs and their rewards.In the case of
the unfairness addressed, employee reduces their inputs through directly restricting
to their workoutputs. In consequence, the employee will escapes from unbalanced
circumstance and put themselves into available status for other employers.In the
other hand, employee increases their outputs to seek for increasing in salary or find
more enjoyable tasks. On the other thread, salary is a fundamental factor to
motivate the employee. This argument was located in many canonical studies in
motivation conducted over the years. There are a lot of resignation of work resulted
from higher compensation and better salary (Mathis and Jackson, 2003). Salary is
also crucial part to force the progress of work and perform tasks (McCallum,
1998).Therefore, it is hard for us to deny or accepted salary as the motivating
factors or consequence outcomes and we need to measure again in Vietnam context.
Thus, we come with a hypothesis as the following.
H1: There is positive inpacts of salary on employee motivation.
b. Working condition
This factor refers to work equipment and resources provided by companies
to complete task assigned from management and support for employee to work
better, more effectively. T.V Muedi (2008) proved that working condition is as a
motivator of employees in steel manufacturing industry in South of Africa. Gaebler
Ventures (2006) researched on ten motivators of employees including working

condition factors. According to Osteraker (1999), the motivational factors that are
considered as the cornerstone of motivational theories can be divided into a social,
mental or physical dimension. In the detail, the physical dimension consists of
working condition and pay. In Herzberg's two factors theory, working condition is a
part of extrinsic factors. To extract from all researches, there isunique message to
conclude that working condition play important roles on employees motivation at
jobs. Therefore, we have a hypothesis as the following
H2: There is positive affect of working condition on employee motivation.
c. Management
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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

Barbara J. Kreiman (2002) stated in her paper that she divided employee
motivation into two groups such as individual concepts and jobs context. To deal
with the second group, she clearly specified that are management or leadership,
rewards, firms environment, equipment and atmosphere.In this paper, she focuses
on the roles of managers and their controls in organization. She emphasized that
manager's control definition is "providing recognition and feedback, the
opportunity to learn and grow, fair compensation reflecting an employee’s
contributions and value to the organization, providing a good work environment,
and above all, recognition and respect for the uniqueness of each person’s
competencies, needs, desires and style”. There are a thousand of reasons for an
employee to decide to leave the company and one of reason is poor relationship
managements and staffs as in studies of some scholars such as Buckingham and
Coffman (1999); Kaye and Jordan-Evans (1999); Kreisman (2002); Herman
(1999). Therefore, managers and management styles will play an important factor

on motivation of employees in organization.
Moreover, many theories has pointed that management influences to
employees motivation. They can carry out the encouragement and commitment and
training activities to maintain the highest endeavor and satisfactory in job. The role
of management was emphasized in equity theory by Adam. Recognitionof manager
on employees' outcomes will create spiritual motivation for employees. Locke and
Latham’s goal-setting theory emphasized important role of manager in setting goal
in order to motivate their employee. Borkowski (2009) points that although goal
setting is a simple concept but it requires careful planning and monitoring by
managers. Positive feedback and coaching in approximate time is necessary to
motivate employee working toward a specific goal.
From above literatures, management was supposed to affect to employee’s
motivation. Therefore, we come with a hypothesis as:
H3: Management positively affects to employees’ motivation.
d. Advancement opportunities
(Perkins, et al., 2009, p.2) stated that Advancement is one of the intrinsic
motivators and is related to the employees’ inner drives. Advancement means
different things to different people and holds varying levels of applicability and
appeal for different groups. In fact, for some parts of staffs over the world,
including Vietnam, advancement brings a meaning that him or herequippednew
knowledge or perform task with new skills. Training activities is considered a form
of human capital investment whether that investment is made by the individual and
firms (Goldstein, 1991; Wetland, 2003), cited by Doan Duc Minh
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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

(2012).Employees who are attended into training courses will be trained and
equipped new skills and knowledgeto apply in their jobs and share them with other
employees (Noe, 1999). For other parts of employees, who are at the bottom of
hierarchy of wages, advancement takes the others meaning that is climbing to
higher position in this hierarchy of their organization and being more compensated?
Advancement also takes other meanings for groups of employees who think that
advancement is to create a great career and they are have to be a part of broad
management of organization eventually or effective executives.Anyways, the
advancement opportunities, being a promoted or new training opportunities are
important motivating factors. Therefore, Recruiter (2006) argued that promotion
and moving up the career ladder are most important at workplace. While many
factors could contribute to this gain, surely the career development programs and
opportunities put in place by management had a positive effect (Bopp, et al.,
2009).Therefore, we alsocome with a hypothesis as the following:
H4: There is positive affect of advancement on employee motivation.
e. Location
Work-life-balance condition for employees and managers has been becoming
hot topic for every HR manager in many enterprises over the next decade. It will be
one of the most important problems that specialists and human resource
management have to face and manage effectively (Bird, 2006). A change in human
management practices, especially work location flexibility and work time flexibility
will significantly contribute to strengthen work-life balance of employees
(Abercromby, 2007). Work-life-balance, consequence work location, takes crucial
roles to maintain the focused and freedom, healthy and happy staff (Beck-Taucher,
2009) and hence to maintain good employee outcomes.
There are some practices in reality at many firms to provide the flexibilities
for their employees, still maintain the effectiveness in work. Telecommuting is
known as new approach applied by many companies to eliminate the negativities in
working far from home. Many companies have improved profitability by allowing
their staffs to work from home. By applying this new model, they managed to

eliminate the negative effect of the long hours of traveling i.e. the negativities of
the distant work locations.Getting into detail at Vietnam, manufacturing firms often
centralize into industrial zone where is far from the central of city. However, skilled
and experienced employees live in the city and have to take a shuttles bus arranged
by their company or take motorbike to workplace. As a result, they have to spend
much time on traveling to work. Moreover, traffic jams and accidents are the most
concern of people in Vietnam.To allow working from home is also a way to
advance the employee satisfaction and provide them more flexibility,
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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

consequence to increase their workforces and motivation. From these liturature
review, we come with a hypothesis as following
H5: There is positive affect of location on employee motivation.
f. Challenges
According to Maslow's Motivation theory and intrinsic/ extrinsic motivating
factors and Herzberg's Theory, interesting and challenging work is selfactualization factor.Challenge is a characteristic of job itself and it is outcomes of
employee's inner drives, not because external forces. Nowadays, enterprise usually
divides complicated works into smaller tasks and organizes a team to accomplish
tasks. This can improve the organization's performance by creating competitive
advantage (Wagner and Hollenbeck, 2009 and Sofija Karaskakovska, 2011). Most
employees are motivated by attempting to challenging, different and interesting
tasks constantly. According to many scholars, some managers rely heavily on
challenge as a motivator (Robbins and Judge, 2009; Nguyen, 2010). Not all
employees actually enjoy performing different tasks in period. Some of them like
repetitive and routine work and resistance to changes occur when some news are

being implemented.
Either demotivating for some or motivating for others, companies apply
different management techniques in order to make the jobs more interesting.
Robbins and Judge (2009) propose job enrichment, job enlargement and job
rotation as management tools in order to create more jobs that are interesting for the
employees, relying on the Job Characteristics Model (JCM) of Hackman and
Oldham (1980). Some companies have proved the positive effect of the JCM
concept and the challenge as very motivating factor, and by implementing rotation,
enlargement or enrichment improved their work and performance. From the
literatures above, we have a following hypothesis as below.
H6: There is positive affect of challenges on employee motivation.
II.3.2 Conceptual model

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

Age
Motivating factors
- Advancement
- Salary
- Working environment
- Challenges
- Management
- Location

Employee

motivation

Marital status

Gender

Figure 3. Conceptual model
All hypothesizes were listed out in table below
Hypothesis
H1
H2
H3
H4
H5
H6

Contents

There is a positive impact of salary on employee motivation.
There is positive affect of working condition on employee motivation.
Management positively affects to employees’ motivation.
There is positive affect of advancement on employee motivation.
There is positive affect of location on employee motivation.
There is positive affect of challenges on employee motivation.
Table 1.Summary of hypothesizes

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Critical factors affecting employees’ motivation of manufacturing firms in Vietnam

Chapter 3: Research method
In order to evaluate the model and hypothesis mentioned in the previous
chapter, the research will adopt quantitative research method in which the data was
collected by means of questionnaire survey.
III.1 Research procedures
By adopting from quantitative method, the procedure of this research will be
conducted as the following chart.
Research

Literature review
Model

Research Method

Pilot research

Main research

Collecting data

Data analysis

Results

Conclusion and
recommendations

Figure 4. Research Procedure

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