(Luận văn thạc sĩ) ineffective appraisal system at nike customer service department in damco

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

HOANG THI HOA

INEFFECTIVE APPRAISAL SYSTEM
AT NIKE CUSTOMER SERVICE
DEPARTMENT IN DAMCO
MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2018


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

HOANG THI HOA

INEFFECTIVE APPRAISAL SYSTEM
AT NIKE CUSTOMER SERVICE
DEPARTMENT IN DAMCO

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR. QUOC PHAM

Ho Chi Minh City – Year 2018

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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

Table of Contents
Executive summary .........................................................................................................4
CHAPTER 1.

Background ..........................................................................................5

1.1

Company background ........................................................................................5

1.2

Symptoms of probem in Nike customer service department .............................7

1.2.1

Low employee satisfaction ..........................................................................8

1.2.2

Low performance ......................................................................................13

1.3

Initial causes – effects map ..............................................................................18

1.3.1

Initial causes – effect map identification process .....................................18

1.3.2

Initial causes – effects map analysis .........................................................19

1.4

Updated causes – effects map ..........................................................................22

1.4.1

Boring job ..................................................................................................22

1.4.2

Organizational instability ..........................................................................23

1.4.3

Ineffective appraisal system ......................................................................24

CHAPTER 2.

Problem justification ..........................................................................27

2.1

Problem definition ...........................................................................................27

2.2

Problem existence ............................................................................................28

2.2.1

Quantitative research result .......................................................................28

2.2.2

Second qualitative research result (15-Aug-2018)....................................31

2.2.3

Conclusion .................................................................................................32

2.3

Problem importance .........................................................................................32

CHAPTER 3.
3.1

Causes validation and solutions .........................................................35

List of real causes .............................................................................................35

3.1.1

Theory inform ...........................................................................................35

3.1.2

Third qualitative research result (22-Aug-2018) ......................................36

3.2

The set of solutions ..........................................................................................37

3.3

Change plan design ..........................................................................................39

3.3.1

Plan schedule .............................................................................................39


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

3.3.2

Target setting .............................................................................................39

3.3.3

Steps to build new appraisal system .........................................................40

3.3.4

Conclusion .................................................................................................46

References .....................................................................................................................48
Supporting document .....................................................................................................51
1. First qualitative research (8-Aug-2018) ..............................................................51
2. Quantitative research ...........................................................................................77
Quantitative research methodology .......................................................................77
Questionnaire – Quantitative research: ..................................................................78
Quantitative research result ....................................................................................80
3. Second qualitative research (15-Aug-2018) ........................................................82
Methodology ..........................................................................................................82
Interview guide.......................................................................................................83
4. Third qualitative research (22-Aug-2018)...........................................................94
Methodology ..........................................................................................................94
Interview guide.......................................................................................................95
6. Current KPI of Nike customer service department ...........................................107
7. Proposed KPI for customer service executive of Nike customer service
department................................................................................................................111
8. Employee counseling form................................................................................113


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

Table of figures
Figure 1: Work experience in Nike customer service department ..................................6
Figure 2: Employee satisfaction result of Nike customer service department 2013-2017
.........................................................................................................................................9

Figure 3: Turnover rate 2013-2017 of Nike customer service department in Damco and
APLL .............................................................................................................................11
Figure 4: Recruitment cost of Nike customer service department in 2013 – 2017 .......12
Figure 5: Nike customer operation index from 2013 to 2017 .......................................14
Figure 6: Customer satisfaction ratio of Nike Customer Service Department ..............16
Figure 7: Initial Causes - Effects map ...........................................................................18
Figure 8: Updated causes - effects map .........................................................................22
Figure 9: Average score of question 3-10 in quantitative survey..................................29
Figure 10: Age and work experience of employees in Nike customer service
department .....................................................................................................................31
Figure 11: Plan schedule ...............................................................................................39
Figure 12: Proposed appraisal process ..........................................................................46

List of tables

Table 1: List of people left Nike customer service department in 2017 .......................24
Table 2: List question from 3 to 10 in quantitative survey ...........................................29


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

EXECUTIVE SUMMARY
It can be said that appraisal system plays an important role in company operation. To
be specific, it was stated that appraisal system is one of the key element to increase
employee motivation and productivity (1). Therefore, ineffective appraisal system can
make employees feel dissatisfied with the job and as the result, there would be low
productivity (2). Moreover, it was also mentioned that about low organizational
commitment and intention to leave of employee when the company appraisal was not
effective (2). Furthermore, high employee turnover rate has many hidden costs such as

productivity loss, workplace safety issues, and morale damage (3). That is the current
situation at Nike customer service department in Damco, ineffective appraisal system
is the central problem causing low customer satisfaction and low employee satisfaction
which resulted in high turnover rate as well as high recruitment cost. After conducting
researches by both qualitative and quantitative method, the main causes found are
unclear key performance indicators (KPI) and lack of ongoing performance feedback,
one way of communication appraisal process.
In order to solve the central problem of ineffective appraisal system, the possible
solutions are developing detail, specific KPI for Nike customer service department
employees and building up effective appraisal process including self-appraisal as well
as ongoing performance feedback. This solution can take advantage of available
resource with the coordination between human resource department and manager of
Nike customer service department in estimated six months with no extra cost. The aim
of this low cost and feasible solution is to lower the high turnover rate at Nike
customer service department. Furthermore, it is also the solution to increase employee
satisfaction which also linked to customer satisfaction. In addition, lower turnover rate
can save money for new recruitment and training program for new employees as well
as keep Nike customer service department stable. In short, this cost saving solution can
eliminate almost the current problems of Nike customer service department in Damco.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

CHAPTER 1.

BACKGROUND

1.1 Company background
Damco is one of the world’s leading providers of freight forwarding and supply chain

management services with more than 100 years of history. The company has 11,400
employees in more than 300 offices around the world and a global presence in about
100 countries. Damco is part of A.P Moller - Maersk Group – the biggest shipping line
in the world (4).
To be more specific, Damco is at the forefront of developing innovative supply chain
solutions. Damco fuse their global network and depth of expertise with pioneering
digital innovations to enable their customers to stay ahead. Damco’s vision is to
connect and simplify supply chains across the globe.
Damco Vietnam was established since 28/11/2007 with three offices in Hanoi, Hai
Phong and Ho Chi Minh city. The main office is in Ho Chi Minh. According to Damco
HR report in June 2018, there are five departments in Damco Vietnam with total 816
employees:
•

Finance: 37 employees

•

Human resource: 8 employees

•

Warehouse and distribution: 438 employees

•

Procurement: 21 employees

•

Supply chain management (SCM): 312 employees

Supply chain management (SCM) department in Damco Vietnam is separated into
many sub teams based on the Customer that team handle. Nike customer service
department is one of the key team of SCM because of the highest volume of Nike
cargoes shipped via Damco which accounts for 30% of total volume Damco is
handling.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

Nike Customer Service team are taking responsibility of Nike customer care,
warehouse management, managing all projects related to Nike cargoes, as well as
doing planning to make sure cargoes shipped as Nike requirements and
communicating with all relevant parties to solve troubles and ensure shipments
delivered on time. It can be said that customer service team is the representative of all
departments in Damco to directly contact with Nike customer. If there is any issue,
other parties have to report to customer service team, therefore the KPI of customer
satisfaction is extremely important in this Nike customer service department.
Nike Customer Service department currently has 18 members. The current manager
has taken over Nike Customer Service department since December 2016. She already
had six year experience in freight forwarding part, and just started moving to customer
service part since joining Nike customer service department. Nike customer service
department is a dynamic and active team with mainly young people. Below is the
current work experience status of Nike customer service department:
Work experience
< 1 year
1-2 years
3-5 years

> 5 years

Number of employee
7
4
3
4

Figure 1: Work experience in Nike customer service department
(Source: Damco HR report in June - 2018)
It can be seen from figure 1 that over 60% of work experience in customer service
department is under 2 years. All seven employees with under one year experience are
fresh graduations. The advantage of young people are their pro-activeness, dedication
to contribute to the team, willingness to work over time. Besides, the cost of hiring
fresh graduation is lower compared with hiring experienced one. However, the
disadvantages of short experience time is low productivity because it takes time to
hand over between the old team members to the new comers and high training cost. In


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

addition, lacking of experienced one in the team raises concerns to Damco’s customer
about the quality of service, especially key and professional customer like Nike.
1.2 Symptoms of probem in Nike customer service department
In order to identify if there is any abnormal signs in the current operation of Nike
customer service department, available internal data was analyzed such as HR report
collected from HR department, customer KPI report which was published by
management team in order for employees to know the current level of performance…
The advantages of these internal data are its availability and its ease to approach,

besides the cost saving and cost efficiency; moreover, it can reflect the real time series
data.
According to the internal data, there are four abnormal trends in the performance of
Nike customer service department:
1. Low employee satisfaction: detail will be shown in following part
2. Low performance of the employees: detail will be shown in following part
3. High turnover rate: the abnormal trend of turnover rate will be discussed in
more detail in figure 3. However, high turnover rate may not be the main
symptoms because it can be impacted by many elements such as: the market
trend, personal plan, external better opportunities, lacking of engagement… It
can be seen that some elements such as the market trend, personal plan are
external factors and they cannot be controlled by the organization. So, it can be
said that low employee satisfaction can impact to turnover rate but it will be
bias to say that turnover rate is a symptoms of problem.
4. Low customer satisfaction: it can be said that the performance of Damco will
impact to the customer satisfaction. However, customer satisfaction can also be
impacted by the performance of the rivals, the change in the standards of
customers, market trends. Therefore, it cannot be seen as the main symptom of
the problem.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

It can be stated from above explanation that there are only two main symptoms based
on the available internal data: low employee satisfaction and low performance that will
be analyzed in following parts.
1.2.1 Low employee satisfaction
It can be said that employee satisfaction is one of key elements a firm need to focus
on. Low employee satisfaction can lead to the serious consequences of high turnover

rate and high recruitment cost which definitely impact to overall performance of whole
Nike customer service department.
1.2.1.1 Low employee satisfaction data analysis
Employee satisfaction is of utmost importance for employees to remain happy and also
deliver their level best. Satisfied employees are the ones who are extremely loyal
towards their organization and stick to it even in the worst scenario. Moreover,
employee satisfaction is essential to ensure higher revenues for the organization. Last
but not least, satisfied employees tend to adjust more and handle pressure with ease as
compared to frustrated ones (5).
With all respect to the importance of employee satisfaction, Damco is also conducting
employee satisfaction survey annually in December. To be more specific, and the
score is from 1 (Totally dissatisfied) to 5 (Totally satisfied) and the target on employee
satisfaction is set for manager level. The employee satisfaction survey was including
questions related to four main items: Damco working environment, colleague
collaboration, manager assessment and any comment to make Damco a better work
place.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

Employee satisfaction
5.0

4.3

4.1

4.1

4.2

4.0
3.0

3.7

3.2

2.0
1.0
0.0
2013

2014

2015

Nike employee satisfaction

2016

2017

Damco target

Figure 2: Employee satisfaction result of Nike customer service department 2013-2017
(Source: Yearly employee satisfaction survey of Damco)
According to figure 2, it can be seen a sudden decrease in employee satisfaction in
2017 compared with the four previous years. The score at 3 means that the attitude of

employees was just neutral, not agree / satisfied. In five years from 2013 to 2017, the
target employee satisfaction of whole Damco remained the same at 3.7. This target is
set by the average score of all teams in Damco in previous year. Therefore, figure 2
shows that only in 2017, the employee satisfaction score of Nike department was
under target.
In survey result of 2017, below are areas that have lower score than previous years:
• Workload: It was claimed that the workload in Nike customer service
department was high and employee did not have work-life balance. Working
overtime more than 8 hours per week in long period was making the employees
tired and not looking forward to going to work daily.
• Recognition: Lacking of recognition within the team in specific and within the
company in general.
• Compensation: it was said that the compensation was not fair with the
workload.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

• Training program: the training program was not fit with employees’ level and
expectation. Employees were registered to all the training sessions that the
company conducted while they expected to have specific training that can
complete the skills they are missing.
• Managers did not spend enough time on supporting their employees.
1.2.1.2 Consequences of low employee satisfaction
As mentioned before, there are two main impacts of low employee satisfaction to Nike
customer service department are high turnover rate and high recruitment cost.
1.2.1.2.1 High turnover rate
Turnover rate has been defined as the percentage of employees who leave the
company or business to other companies in a period of time (6). This forces the

company to find their replacement at an additional cost. Besides, turnover could also
be defined as “The ratio of the employees of an organization who left in a particular
period of time with the average number of employees in that organization during the
same period of time”.
High turnover rate in a long run will affect to the productivity, service delivery, growth
and increases the organization’s cost of recruiting new staff; and training and
developing the new staff to occupy such vacancies (6). Therefore, it is important to
maintain turnover rate at an appropriate level.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

Turn over rate
100%
80%
60%
40%
20%
0%

56%
33%

32%

31%

25%

21%

24%

2013

2014

2015

35%
32%
16%
2016

2017

Turnover rate of Nike customer service department in Damco
Turnover rate of Nike customer service department in APLL

Figure 3: Turnover rate 2013-2017 of Nike customer service department in Damco
and APLL
(Source: Person in charge report at Nike teamsite)
Figure 3 shows that turnover rate of Damco was quite stable from 2013 to 2016.
However, that ratio was significant increase in 2017 and double that of 2013, triple
that of 2016. Besides, the turnover rate of Nike customer service department in 2017 is
much higher than average turnover rate of Damco (cover all departments) in general
which is 34% (Annual report of HR team). So, it can be said that the high turnover rate
at Nike customer service department is an abnormal signal. In addition, compared with
turnover rate of Nike customer service department in APL logistic company – main

competitor of Damco, that ratio of Damco was nearly double APL logistic. In
Vietnam, there are only two logistic companies handle sea shipments for Nike: Damco
and APLL. All people handling Nike shipments from these two logistic companies
will be updated in Nike teamsite. In short, in same industry, Damco could maintain
lower turnover rate than APL logistic from 2013 to 2016, however, this rate of Damco
significantly increased in 2017 and reached nearly double that number of APL logistic
in mentioned year.
It is essential to look at the turnover rate because if this rate is high, then it is really a
great loss for the company (6). An organization with higher turnover ratio will face to
greater risks of performance failures in the long run. Besides, it is not only about the
high recruitment cost mentioned in following part, it is also about the impact of high


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

turnover rate to Nike customer service team morale because the current employees
have to share the workload when the new comer has not catch up with full process.
Moreover, because of high turnover rate, there are always a lot of new comers in the
team, therefore, the relationship among team members are disconnected and need time
to rebuild up. Last but not least, also due to high turnover rate, people in Nike
customer service department need to focus more on paper work to share workload with
new comers instead of focus more on customer needs while customer care should be
the key responsibility of one customer team. This fact makes employees are confused
about the company vision which is focusing on customer care.
1.2.1.2.2 High recruitment cost
The second direct consequence of high turnover rate is the increase in recruitment cost.
In other words, it is the expense of finding replacement personnel (7). Therefore, as
the result of high turnover rate in 2017 of Nike customer service department
mentioned in above part, the recruitment cost was increasing significantly in that year.

Recruitment cost of Nike customer service department
3,500

3,100

3,000

Amount ($)

2,500
2,000
1,500

1,350
1,110

1,200
900

1,000
500
0
2013

2014

2015

2016

2017

Figure 4: Recruitment cost of Nike customer service department in 2013 – 2017
(Source: Annual report of HR team)


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

According figure 4, there is a significant increase in Recruitment cost of Nike
customer service department in 2017 compared with that number in 2015 and 2016.
Each employee who resigns costs the company money. All of the money invested into
that employee through training, education and licensing walks out the door with the
quit employee. When a replacement is hired, the company spend money on those same
areas to prepare the new hire for the position. In short, high turnover rate create a high
pressure on human resource management mission and recruitment cost.
The recruitment cost includes internal recruiting costs and external recruiting costs.
Internal recruiting costs are organizational costs and internal expenses, like recruiters’
salaries and money spending on your referral program. External recruiting costs refer
to every expense paid outside of your company, like job board fees, agency fees and
costs associated with a background check service (8) (9).
1.2.2 Low performance
The second symptom of problem is the low performance of Nike customer service
department and its serious impact: low customer satisfaction.
1.2.2.1 Low performance data analysis
It is extremely important to maintain the quality of the service offer to customer
because low performance of the staff can directly impact to customer satisfaction.
Besides, this index also one of the elements for Damco head quarter to evaluate the
performance of each country at the end of the year beside net profit.

The performance of Damco is measured by customer global operation index which is
scored by the client monthly to evaluate the service provided by Damco in general
including KPI maintaining, communication, customer mindset, initiatives, ... The score
is from 1 (Totally dissatisfied) to 5 (Totally satisfied). The client of Nike customer
service department is Nike. Nike team in Vietnam will collect assessments from all
destinations handled by Damco and evaluate the performance of Nike customer


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

department in general once per year. Same practice will be applied for all countries
handling Nike shipments.

Customer operation index
5.0
4.2

4.3

4.2

4.3

4.0

3.4

3.0
2.0

1.0
0.0
2013

2014
Nike operation index

2015

2016

2017

Target for Nike team

Figure 5: Nike customer operation index from 2013 to 2017
(Source: Customer operation index report in Damco)
It can be seen in Figure 5 that there is a significant decrease in customer operation
index of Nike customer service department in 2017 compared with 2015 and 2016. As
current practice, the target for each team will be set higher than the performance of
previous year to encourage improvement in daily work. So, in 2017, there was a big
gap between actual performance compared with the target at the beginning of the year.
Among all KPIs, the main KPIs that had bad performance are:
• Planning with wrong destinations: Nike complained about some cases cargoes
were delivered to wrong destinations, as the results, there were charges
occurred to convert the cargoes back to correct destination. Although these
charges were absorbed by Damco, however, Nike still got bad impact on the
time delivery.
• Low container fill rate: which meant that the volume in each container was not
as high as Nike expected. For example, the maximum fill rate of one container

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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

40 high cube is 70 cubic meters, but Nike customer service team just can stuff
the cargoes at 67.2 cubic meters at average in 2017.
• Slow response from Nike Customer Service team: Same as the feedback from
Nike’s factories, Nike also commented that they got slow response from Nike
customer service department for urgent cases.
1.2.2.2 Consequences of low performance
As the result of low performance, there were many service failures and some KPIs
could not meet. Therefore, it is obvious that the customer satisfaction was impacted.
Regarding to the importance of customer satisfaction, it was emphasized that: firstly,
the more satisfied the customers are, the greater is their retention; secondly, the
satisfaction of customers ensures the positive word of mouth; thirdly, customer
satisfaction ensures the financial benefits to the firms who serve them. To sum up, it is
no surprise, that firms seek to increase customer satisfaction (10). In addition, the
existence of high levels of customer satisfaction, customer perceived value and
customer relationship management enhance the relationship of customer with the firm
which strongly boost up the overall performance of the firm (11).
Therefore, with the respect of the importance of customer satisfaction, Damco is
taking customer satisfaction survey yearly on November, the survey is sent to all
customers of each department. Therefore, the result is counted for each department.
Besides, at the beginning of each year, the management team of Damco also set a
target of customer satisfaction for each department. To be specific, customers of Nike


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

customer service department are the Nike’s factories located in Vietnam, total 44
factories.

Customer satisfaction
100.0%

99.3%

99.2%

99.5% 98.7%

98.6% 99.1%

99.1% 99.0%
87.8%
74.7%

80.0%
60.0%
40.0%
20.0%
0.0%
2013

2014

Nike customer satisfaction

2015

2016

2017

Damco average customer satisfaction

Figure 6: Customer satisfaction ratio of Nike Customer Service Department
2013-2017
(Source: Yearly customer satisfaction survey of Damco)
It can be seen from figure 2 that Customer satisfaction ratio of Nike customer service
department in 2017 suddenly decreased to 74.7%. Meanwhile, from 2013 to 2016, the
customer satisfaction ratio was maintained with a stable level at around 99%. The
target of customer satisfaction in 2017 was set at 99.5%, which means that the actual
ratio is 25% under target. Besides, from 2013 to 2016, the difference in customer
satisfaction ratio between Nike department and average number of whole Damco was
under 1%, but in 2017, the difference was 13,1%.
After looking at carefully on the feedback from customers, they claimed that they are
unsatisfied with the service provided by Nike customer service department on below
criteria:
• Nike customer service team attitude: Some employees in Nike customer service
department showed that they were not willing to support additional request


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

from customer such as providing vessel schedule, advising about booking
revision process. Moreover, delay in vessel departure time notice is sent late to

customer which causing wrong document submission and wasting time for
revision.
• Late email response: Damco have committed to all customers that emails
should be replied within 3 working hours, however, there were many cases that
customers complained Nike customer service staffs replied email after one day
and customer had to call for reminder.
• Being hard to contact Nike customer service staffs before 9:00 AM while
working hour of Damco is from 8:30 AM to 5:30 PM: there is a fact in Damco
that employees usually come to work late, after 8:30 AM because no finger
print is required at the beginning of the day and the working style of Western
countries is based on the performance, not on the working time. Therefore, it is
hard for customer to contact Damco employees via desk phone before 9:00
AM.
• No support in urgent cases: there were cases reported that although customers
called to Nike customer service team seeking for urgent help however, they
received the request from Nike customer service staffs to send an email and
wait for the reply later within 3 hours instead of solving the trouble right away.
This will seriously impact to some urgent decision from customer side which
can lead to charges occur and the most important thing is impacting to customer
loyalty.
In short, Nike customer service department is suffering with two main symptoms of
problem – low employee satisfaction and low performance - which also leading to
more serious impact to low customer satisfaction, high turnover rate and high
recruitment cost. With all these serious issues, it is essential for Nike customer service
department to find central problem in order to solve all these issues.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

1.3 Initial causes – effects map
In order to find out the causes leading to above symptoms, a qualitative research was
conducted. The main mission of research is to identify the central problem of all these
issues. All the potential problems are listed into below initial causes – effects map:

Figure 7: Initial Causes - Effects map
1.3.1 Initial causes – effect map identification process
Firstly, the main purpose of this qualitative research are understanding actual
evaluation of current employees, former employees as well as manger about current
situation of Nike customer service department including: high turnover rate, low
performance, low customer satisfaction and low employee satisfaction.
Secondly, depth interview is used as the method of this qualitative research because
there may be some private information participants do not want to share publicly as in
the focus group. Moreover, in a one-on-one setting, the interviewer can devote
complete attention to each research participant, listen actively and take time to
establish good rapport. Also, researcher can make the surroundings more relaxing for
individual interviews.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

Thirdly, five participants selected are current employees, former employees as well as
current manger based on the database from HR department. There is no requirement
about age, gender in this selection in order to have an accurate view on the problem.
Participants were interviewed in private place for better sharing and avoid being
disturbed by others on 8-Aug-2018.
Furthermore, the interviews were recorded so that all information will be accurately
documented for research purpose under allowance of the participants. Each interview
was appropriately fifteen minutes.

In addition, the interview guide consists of 10 to 12 questions depends on the position
of participants. They are open-ended questions.
The first group question regarding to question 1;2;3 elicited information about basic
employee information, including their name, position title, work experience in Damco
as well as in Nike customer service department in specific. After that, the second
group of questions related to participants’ actual evaluation about current situation /
symptoms of problem in Nike customer service department as well as their proposal to
overcome all the issues.
1.3.2 Initial causes – effects map analysis
According to the depth interview research, there are fifteen causes that led to five
mentioned symptoms in Nike customer service department which all listed in initial
causes – effects map (figure 7).
It can be seen from initial causes-effects map in figure 7 that there are fifteen potential
causes which can be divided into three main groups:
1. Boring job: the job nature of customer service department is one kind of paper
work, many tasks are repeated day by day. Besides, people have to work on the
computer all the time and it is rarely to have a chance to have face to face
meeting with customer, everything will be completed via mail and phone.
Therefore, this can be considered as boring job for young people who would


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

like to learn new knowledge and experience while most of people in Nike
customer service department are young one. As a result, boring job can be seen
as one element that lower the employees’ satisfaction.
2. Organizational instability: on 27-Jun-2017 whole Maersk group, including
Damco was hit by cyber-attack and all the system was down on that day
causing vessel and cargoes delayed and led to congestion at some of the 76

ports run by its APM Terminals unit, including in the United States, India,
Spain and the Netherlands (12). It took Maersk group over one month to cover
back all system. In the meantime, all employees of Damco had to work
manually without system to which causing overtime five time higher than on
normal months. This period had a bad impact on the employees’ point of view
to the company sustainability.
3. Managers lack of management skill can be seen as the causes of the followings:
• Lacking of management skill from managers can cause no recognition in
the team, while this can be considered as the motivation for employees in
the job. As a result, employees feel undervalued in such case.
• Managers that do not manage the team effectively can divide unfair
workload among team members, so some team members can have high
workload than others. This can be seen as rude behavior and employees
feel that they are treated unfair.
• In Damco Vietnam, the manager of each team have the right to decide
compensation of each team member. Lacking of management skill can
make manager have wrong decision about compensation and sometimes,
the compensation is lower than expectation of employees while no
specific reason is advised to convince employees that the compensation
is match with them which make employees’ satisfaction is lower.
• Lacking of training and coaching program can be the result of lacking of
management skill from managers. This also means that employees feel
that they are missing orientation advised from their managers. Also, no


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training, no development plan can make employees feel that no job
opportunity is opened for them or they are not potential enough. All of

these elements can lead to the result that employees do not feel satisfied
with the managers and the company.
The root causes of manager lack of management skill are lacking of experience
and ineffective appraisal system. The manager of Nike customer service
department just took over that position since December 2016, therefore, she
was quite new with supply chain management field although she had six years
of experience in freight forwarding department; however, these two fields are
different. On the other hand, lacking of experience also impact to appraisal
process because at Damco, the manager has the right to build up KPI (key
performance indicator) for subordinates in whole department. It is obvious that
appraisal system is the tool for manager to evaluate the performance of
employees and use as a foundation for salary / human resource / performance
planning decisions. Therefore, ineffective appraisal system can be the central
problem.
In general, all these fifteen variables mentioned in initial causes - effects map need to
be re-evaluated by literature review to make sure no bias in qualitative research and
central problem is well defined. To be specific, it can be said that boring job is a very
general issue so it is hard to solve. Besides, there is no scale to measure how to
evaluate one job is interesting or boring, this is based on the attitude of each employee.
Furthermore, organizational instability is also a macro issue and currently, Damco was
back to normal status so it can be said that this problem does not directly connect to
the symptoms anymore. Last but not least, it is also necessary to check if ineffective
appraisal system is indeed the central problem of all sub causes. Therefore, all these
three groups of causes need to be reviewed by supporting theories in order to come up
with an updated causes – effects map.


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

1.4 Updated causes – effects map

Figure 8: Updated causes - effects map
In order to come up with updated causes-effects map shown in figure 8 and avoid any
bias in initial qualitative research, literature was reviewed to identify the central
problem. Three groups of potential problem would be reviewed respectively to match
with three group in initial causes – effects map as following.
1.4.1 Boring job
It can be said that boring job may not be the central problem because of following
reasons:
Firstly, as mentioned before, the job nature of customer service department is one kind
of paper work, many tasks are repeated day by day. Working on computer all the time
is required and there is limit chance to have face to face meeting with customer.
However, the nature of this job has been existed for a long time, but in previous years,
the turnover rate was not as high as that in 2017 as well as the employee satisfaction
was not that low. More importantly, it is difficult change the nature of the job.
Secondly, when recruiting employees to Nike customer service department, a paper
test and 2 times interviews were applied to find candidates who had characteristics


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INEFFECTIVE APPRAISAL SYSTEM AT NIKE CUSTOMER SERVICE DEPARTMENT IN DAMCO

match with paper work. Therefore, there was already having the action plan of Damco
to prevent the impact of boring job to employee satisfaction and turnover rate.
Thirdly, the literature is not showing the strong linkage among boring job and
employees were treated unfair as well as no work-life balance as well as other
potential problem.
In short, boring job should be eliminated out of updated causes – effects map. It is
better to look at the central problem that is admitted by literature as well as linked the

potential problem in real case together.
1.4.2 Organizational instability
Literature on corporate governance suggests that having a stable leadership structure
should provide the firm with the benefit of a clearer understanding of leadership
control, which should result in improved consistency and performance (13). Besides,
organizational instability is one of reasons people leave one company because
management’s constant reorganization, changing direction and shuffling people
around disconnects employees from the organization’s purpose. Employees do not
know what is going on, what the priorities are or what they should be doing. This
causes frustration leading to confusion and inefficiencies (14). Therefore, it can be said
that organizational instability is indeed one of the elements that can impact to high
turnover rate and employee satisfaction.
Looking back to the fact that Damco was hit by cyber-attack on 27-June-2017,
however, after one month the system of whole Maersk group was up and running and
after two months, all operations were back to normal. In other words, the problem of
organizational instability was eliminated in July 2017. However, when looking at the
HR report about number of employees left Nike customer service department in 2017,
a lot of people did leave the company before June as below table. Therefore, it can be
said that organizational instability is not the central problem at Nike customer service
department.