Low promotion opportunities in the testing product department at bsc vietnam

UNIVERSITY OF ECONOMIC HO CHI MINH CITY
INTERNATIONAL SCHOOL OF BUSINESS

NGUYEN VAN THO

LOW PROMOTION OPPORTUNITIES IN
THE TESTING & PRODUCT DEPARTMENT
AT BSC VIETNAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City - Year 2021
1


UNIVERSITY OF ECONOMIC HO CHI MINH CITY
INTERNATIONAL SCHOOL OF BUSINESS

NGUYEN VAN THO

LOW PROMOTION OPPORTUNITIES IN
THE TESTING & PRODUCT DEPARTMENT
AT BSC VIETNAM

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR. TRAN PHUONG THAO

Ho Chi Minh City - Year 2021
2

TABLE OF CONTENT
ABBREVIATION ...................................................................................................................................... iii
LIST OF FIGURES ................................................................................................................................... iv
LIST OF TABLES ..................................................................................................................................... iv
EXECUTIVE SUMMARY ........................................................................................................................ v
ACKNOWLEDGMENT ........................................................................................................................... vi
CHAPTER 1: PROBLEM CONTEXT..................................................................................................... 1
1.1 Company introduction ...............................................................................................................1
1.2

Business symptoms ................................................................................................................4

1.2.1 High turnover rate in Testing and Product Department ....................................................4
1.2.2 Decrease on time delivery ..................................................................................................7
1.3 The important symptoms. .........................................................................................................7
CHAPTER 2: PROBLEM IDENTIFICATION ...................................................................................... 9
2.1. Preliminary analysis ..................................................................................................................9
2.2. Possible problems ...................................................................................................................11
2.2.1. Low promotion opportunities ..........................................................................................11
2.2.2. Poor compensation and benefits .....................................................................................15
2.2.3. Lack of knowledge sharing ...............................................................................................16
2.3. Main problem validation.........................................................................................................17
2.4 Main problem definition and consequences ...........................................................................19
2.4.1 Main problem definition ...................................................................................................19
2.4.2 Consequences of the main problem .................................................................................20
CHAPTER 3: CAUSE VALIDATION ................................................................................................... 22
3.1

Potential causes ...................................................................................................................22

Unclear job leveling matrix: .......................................................................................................22
3.2.2.
3.2

Ineffective performance appraisal: ..............................................................................24

Real cause validation ............................................................................................................25

Unclear job leveling matrix ........................................................................................................25
Ineffective performance appraisal .............................................................................................28
3.3

Main cause justification .......................................................................................................30

CHAPTER 4: SOLUTIONS SUGGESTION ......................................................................................... 32
4.1.

Alternative solutions. .......................................................................................................32

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4.1.1.

Alternative solution 1: Build Job leveling and competencies matrix database ...............32

4.1.2. Alternative solution 2: Build Job leveling and competencies matrix apply Willis Towers
Watson approach and HR Software. ........................................................................................................36
4.2.

Solution chosen ................................................................................................................42

4.3.

Action plan .......................................................................................................................43

CHAPTER 5: SUPPORTING INFORMATION ................................................................................... 47
5.1.

Research methodology summary ....................................................................................47

5.2.

Interview transcripts ........................................................................................................49

References.................................................................................................................................................. 56

ii


ABBREVIATION
-

OTD:
MT:
TE:
OP:
BSC:
JD:

On-time delivery KPI
Maintenance team
Testing and product
Operation team
new name of company.
Job Description

iii


LIST OF FIGURES
Figure 1:Manufacturing process ........................................................................................... 2
Figure 2: Organization chart of BSC .................................................................................... 3
Figure 3: Organization in Testing & Product Department ................................................... 4
Figure 4: Turnover rate monthly .......................................................................................... 5
Figure 5: Turnover rate monthly YTD Source: Internal report of HR Department- BSC
2020. ..................................................................................................................................... 5
Figure 6: Turnover rate Department. Source: BSC 2020 ..................................................... 6
Figure 7: Turnover rate Department. Source internal report BSC-2020 .............................. 6
Figure 8: OTD chart. Source: Department report-2020 ....................................................... 7
Figure 9: Initial cause effect map. ...................................................................................... 11
Figure 10: Updated map ..................................................................................................... 19
Figure 11: Example of job leveling matrix: Source: (63) .................................................. 23
Figure 12: Final cause and effect tree................................................................................. 30
Figure 13: Willis Towers Watson HR Software. Source: (68)........................................... 37
Figure 14: Dashboard of HR software................................................................................ 39
Figure 15: HR software ...................................................................................................... 40
Figure 16: Alternative solutions ......................................................................................... 42

LIST OF TABLES
Table 1: List of employees who left BSC

10

Table 2: Job leveling comparison in BSC. Synthesized by author

26

Table 3: Cost planning for solution 2

38

Table 4: List of employees left the BSC

48
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EXECUTIVE SUMMARY
This study analyzes the case in BSC Vietnam located in Long Thanh, Dong Nai, Viet
Nam and focuses on the problem in the Testing and Production Department. The symptoms
are high turnover rate. The symptoms analysis was conducted by intake meeting with the
analysis of quality and qualitative research based on primary data from the company. Some
potential cause was found out based on the analyzing result, then the main problem was
discovered. Next steps are to list out some potential causes and find the main cause. This
study also proposes some alternative solutions for BSC and choose one solution that is
suitable for the Department at present. Based on the current issue at Testing and product
Department of BSC Vietnam, this research is useful and critical for Human resources and
Department can improve the situation.

Due to the confidential information, the real name of company could not be disclosed.

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ACKNOWLEDGMENT
I would like to appreciate for the two years period studying in ISB Ho Chi Minh City.
I also would like to express my thankfulness to Dr. Tran Phuong Thao for her valuable
guidance.
Besides, I would like to thank my family; friends who always support me to finish
this thesis well. Especially, thanks for my colleagues who gave me valuable information
and advices so that my thesis can be finished well.

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CHAPTER 1: PROBLEM CONTEXT
1.1 Company introduction
In 1886, BSC was founded in Germany. It was the birth of today’s globally
operating company. From the beginning, it was characterized by innovative strength
and social commitment.
BSC started running a subsidiary company in Paris in 1899. Start some first
steps for globalization. In 1921, BSC launched its garage services outside Germany,
increasing very fast by 1930 there were already 2,750 workshops in 70 countries,
bringing the name BSC in over the world. IT started developing electronic
components in the mid-1950s.
From the 1980s, BSC ventured into telecommunications and started
constructing technology for space satellites and cell phones and implementing public
and private telecommunications networks. Then they started investing in the
automation industry.

BSC Vietnam was started as the first brand office in Ho Chi Minh City in 1998,
until now, it developed in 6 locations, the business including Automation and
software, Sale services and manufacturing. The manufacturing plant was established
in 2000 located in Long Thanh, Dong Nai, Vietnam. The main product is the belt for
the global automotive market. This is one of the leaders in providing the component
for the global car market.
Number of employees is around 3000 in 2020. Most of them are working in
manufacturing.
Company products
The main product of the manufacturing plan in Vietnam is auto belt for car.
Products manufacturing process flow:

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Figure 1:Manufacturing process

The manufacturing processes started from raw material, which is the very first
material of the product.
Pre-assembly parts process will use the raw material to produce the
components. At the assembly process, these components are assembled together to
become the main product. However, this product needs to be tested randomly for the
quality and durability before shipping to the customers.
Vision and mission
We make the future: Lead. inspire. succeed. Lead: coach and empower
associates to live continuous improvement. Inspire: In a dynamic and open
environment, all associates actively shape the future. Succeed: achieve business
targets and demonstrate social responsibility for a sustainable future. Leading the
future: this is the mission vision of BSC

2


Organization chart of BSC Vietnam

Figure 2: Organization chart of BSC

Testing and product Department
With approximately 59 people in the Department, Test and product have 3
functions for Operation the machine and perform the test requirement from
stakeholders, machine maintenance team which are responsible for machine
maintenance, troubleshooting when machines have issues and Product Engineering
will responsible for Engineering change, product problem solving.

3


General function for the Department is product quality, liability and durability
testing. The final assembly products will be tested randomly according to defined
sample frequency of individual product type.

Figure 3: Organization in Testing & Product Department

1.2 Business symptoms
1.2.1 High turnover rate in Testing and Product Department
The general overview for Turnover rate of the whole company in 2020 is good,
under limit target 0.81%. However, the turnover rate is not similar between Departments.
The turnover rate in the Testing and product Department is over limited. Let's analyze the
primary data from the HR Department to find out the current symptoms of BSC.
According to the data from the HR Department, the Turnover rate of the whole

company in 2020 is still good, under the target limit figure.

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Figure 4: Turnover rate monthly
Source: Internal report of HR Department- BSC 2020.
Also, from the internal report of the Human resources Department, the turnover
rate year to date of the whole company is still under target line.

Figure 5: Turnover rate monthly YTD Source: Internal report of HR
Department- BSC 2020.
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However, when analyzing the ratio of resignations by Department from 20192020, we can see that several departments have turnover rates exceeding the upper
limit. They are Testing & Product, Budget controlling and Information Technology
Department.

Figure 6: Turnover rate Department. Source: BSC 2020

Figure 7: Turnover rate Department. Source internal report BSC-2020

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The Controlling Department is related to Factory budget and controlling so that much
of information is highly confidential. The IT Department has only 1 person in total 8
headcount, so that Testing & Product department is chosen for solving the problem.
1.2.2 Decrease on time delivery

Measure the commitment of the Department to delivery on time services according to
defined lead time of each test request. This figure was calculated by (Total of test per month
– total of test delay over lead time)/Total of test per month. Target for the Department in
2020 is 95%.

Figure 8: OTD chart. Source: Department report-2020

The OTD in 2020 under the target. It means the number of test delays increase.
1.3 The important symptoms.
There are two main symptoms were discovered during the interview. However, this
research will focus on 1 main symptoms of the company to find out the solution. Based on
the interview with related people in the company. Mr. Huy, current team leader of
maintenance group said that “This department now have some symptoms, but the main
symptom that cause much effect to the department is high turnover rate. Because high
turnover rate causes a lot of effort from the management, related department for
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recruitment, training”. Other similar idea from Mr. Bao, Department manager “The main
symptom is high turnover rate, and need to focus now”.
There is relation between OTD and turnover rate. Mr. Bao also revealed that “New
employees join the team with less experience causes low productivities, increase fail rate
and customer complain”. Low productivity because there are many new processes in the
Department that quite different with processes from other company as well as the system
and technology here are state of the art technology in the world. So that, new employees
need time to study and get familiar with these new knowledges. Increasing the fail rate
because of mistake when operate the system or not completely familiar with all procedures.
The customer complain is also increase. The customer of this Department are stakeholders
that have demand for product testing such as Manufacturing, Quality Department, Project
Department and other departments. Customer satisfaction survey was conducted quarterly

to get the feedback from stakeholders. From the survey result, the score of customers
complain was decrease. It means the level of customer complain increase. In conclusion.
the symptom high turnover rate was chosen for solving because of it critical to the
department at the present and the limited time and effort of student.

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CHAPTER 2: PROBLEM IDENTIFICATION
2.1. Preliminary analysis
To identify the potential problem, the intake meeting with the Employee in BSC
to find out the symptoms and understand deeper the current problem of the
organization.
Intake meeting with employee in the Testing & Product Department
Mr. Nguyen Huu Huy- Team Leader of Testing machine and equipment
Maintenance team.
Mr. Truong Hoai Bao – Department Manager.
Mr. Do Minh Tai – Senior Engineer in Testing Department
Intake meeting with Human resources staff.
Ms. Tran Nguyen Bich Thao – Team Leader in Human resources Department
Ms. Ly- HR Department, job leveling expert
Intake meeting with people from other Departments.
Ms. Nguyen Kim Loan – Production quality Department
Nguyen Huy Dao: Process Engineer. Manufacturing Department.
Intake meeting with employee who left this Department or BSC.
Interviews were also conducted with employees who have left the company. This is
important data to understand the reason they left. Based on recorded data from the HR
Department for 14 people already leaving Department, we can classify into different
characteristics: name, team, degree, when they left BSC, their experience and level at the
time they leave Department. (Noted that MT is Maintenance team, TE is Testing and

product and OP is Operation team).

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Table 1: List of employees who left BSC

No

Name of ExEmployee

Group

Degree

Year left
BSC

Experience

Level

1

Vu Van Hien

MT

Bachelor

2020

7

Senior

2

Bui Thanh Nam

TE

Bachelor

2020

7

Senior

3

Do Minh Tai

MT

Bachelor

2020

5

Senior

4

Le Van Tien

MT

Bachelor

2020

10

Senior

5

Nguyen Van Dung

TE

Master

2020

2

Junior

6

Nguyen

Hoang TE

Master

2020

3.5

Junior

Phuong
7

Le Trong Duc

MT

Master

2020

3

Junior

8

Nguyen Doan Phong

MT

Bachelor

2019

3

Junior

9

Tran Van Tu

TE

Bachelor

2019

15

Expert

10

Bui Xuan Thanh

OP

College

2020

7

Senior

11

Nguyen Van Tho

TE

Master

2020

8

Senior

12

Phan Van Thanh

OP

Bachelor

2019

5

Senior

13

Nguyen Van Quy

TE

Bachelor

2019

10

Senior

14

Bui Xuan Thanh

OP

Bachelor

2019

6

Senior

In summary, it could be seen that most of the people are Senior and expert with
working experience from above 5 years. Some are junior engineers but they have Master
degrees from international Universities.
After analyzing above data, the company symptom is a high turnover rate and
increases the test delay in the Testing & Product department. This finding is based on the
analyzing of company data and interviews with related people.
Interview some people who used to work for BSC to know more why they leave the
company. There are various perceptions and perspectives recorded. From the interview
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information, some characteristics, which cause the company symptoms are shown in Figure
below.

Figure 9: Initial cause effect map.

2.2. Possible problems
2.2.1. Low promotion opportunities
General introduction about the definition of employee grade in BSC company.
Each employee has a defined level or called grade. The grade will increase with
experience and position in the company. The lowest grade is 44, 45 applied for operators

and technicians who have a high school or college degree. The maximum they can increase
is 55 if they don’t update their degree to Bachelor or higher to become an Engineer. The
higher grade is 66 applied for University fresh graduates with Bachelor degree and working
as an Engineer. These Engineers can work for 3 to 4 years to be promoted to next grade 77
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or called senior Engineer. The next development is grade 88 when a senior Engineer is
promoted to a team leader or an Expert position in a certain field.
The above is the general level in BSC, this career path was defined by collaboration
between the Human Resources Department and Head of functional Department and final
agreement by plant Manager. They are responsible for the general career path, but for detail
how to define requirements in each level depending on each functional Department.
Because each functional department is responsible for different functions, knowledge,
competencies, so that they will have different requirements for each level. In the Test &
Product Department, there are not clearly defined criteria and definitions or requirements
an employee needs to have if they want to be promoted to a higher grade.
Testing and Product Department responsible for testing product, machine problem
solving, product problem solving, machine operation and maintenance. The highest grade
an Engineer can achieve is grade 77 and don’t have opportunity to grow higher grades. The
only position of Team leader is 88 and Department Manager is 99. Doesn’t have an Expert
position there. So, it is a limited promotion to higher grades. Other Departments have expert
positions for employees, so that employees can develop and specialize as a problem-solving
expert, project manager or technical expert.
Interview some people who already left the company to know the deeper reason.
Nam and Hien, who already left BSC for other companies, have the same year
working experience and similar reasons. They mentioned that “I left BSC because other
companies offer me higher positions and a clear career goal where I’ll be able to grow up”.
According to Mr. Tai, who has 3.5 years working in BSC and totally 8 years working
experience. He has already moved to the Project Department. He said that “I want to find a

better position in another Department, because in my current position, I’m not able to grow
to a higher level”. In this department, he is responsible for many tasks and over workload,
while in new role, he specializes in Project Management. Mr. Tien with 10 years working

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experience said “I do not see the clear career goal here, I don’t know where I am now and
what I should do next, I must leave soon”.
Promotion opportunities
Promotions are retaining, motivating and increasing productivity from employees.
Organizations are applying different methods to increase value through their employees
and increase their productivity beyond the minimum acceptable standard (1). Promotion is
an activity of identifying and moving an employee to a higher position with increased
responsibilities that requires a higher level of knowledge, skills and abilities and for which
the employee may receive additional compensation (2). It has an effect on the satisfaction
of the promoted person's needs for esteem, belonging and security (3). Promotion is not
only to support and motivate experienced employees but also to send a message to other
employees to improve or to go. Good promotion policies increase employment satisfaction
and morale, productivity and decrease turnover by rewarding employees who gain the
desired commitment and qualifications in the organization (4). In contrast, poor promotion
policy is one of the factors that can limit the promotion opportunities. Promotion procedures
offer staff the chances to move up their careers within the organization, together with the
available opportunities and abilities of employees (5).
Promotion and opportunity for Growth is one of the factors responsible for retaining
employees in the organization Employee Promotion is the advancement of an employee
from one job position to another job position that has a higher salary range, a higher level
job title, and, often, more and higher level job responsibilities (6). Employee Promotion is
the advancement of an employee from one job position to another job position that has a
higher salary range, a higher level job title, and, often, more and higher level job

responsibilities (7).

Some research found a close and positive correlation between

promotions and job satisfaction which help retaining employees (8). High performance
employees needed to maintain a competitive advantage. They want career growth
opportunities to develop and grow in their career ladder (9). Job satisfaction has a direct
13


effect on level of productivity, commitment and performance. Moreover, job satisfaction
not only improves the retention of employees but also reduces the cost of hiring new
employees (9). Studies show that some factors affect high turnover are low compensation,
low job motivation, unsafe workspace and lack of career opportunities and challenges.
Promotion is the upward movement of a person in an organization’s hierarchy,
together with increased responsibilities and usually with increased Income. After
promotion, the duties and responsibilities increase with more important job titles, a bigger
desk, more expensive office decor, less supervision, and greater freedom of movement (10).
The promotion of employees for a job of higher significance and higher
compensation. Also the movement of an employee upward in the hierarchy of the
organization, typically that leads to enhancement of responsibility and rank and an
improved compensation package is a promotion (11). The definitions of promotion are
different between studies. In some situations employees will ask for promotion when they
rotate the position (10). In others cases a promotion is reported by the employee(7). In
general, promotion is identified by the employee. Sometimes promotions are identified
from the changes in position or grade within the organization structure (12).
Promotion can help employee’s salary increase much as well as their responsibilities
will be extended. They feel more satisfy with their job an effective member in the team.
The probability of promotion provides employees with higher position, respect, higher
prestige, higher responsibility and higher earnings. Organization can also recruit expertise

from outside but to motivate and keep current employee spend their effort for the job (13).
From a psychological point of view, it ensures the career development of an employee;
promotes employees to feel better wellbeing and greater esteem. Career promotion
satisfaction is one of the causes of employee turnover. Lack of promotion and appraisal
could lead to employees intention to go away from an organization (14).

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2.2.2. Poor compensation and benefits
During the interview, Mr. Hien said that “My salary here is low, the new company
offered me double the current pay. The remuneration growth is also very slow. I have
worked here 10 years but my salary is similar to a new fresh Engineer”. Dung complained
that “poor compensation and benefits compared with other companies in the similar
industry. There are only 13th salaries and around 1 to two months' benefit yearly”. Mr.
Thao from the Human resources Department said that “most employees from Test and
Product leave because they aren't satisfied with salary and benefits”.
Mr. Phong said that “salary revision one per year is very less. In a new company we have
a chance for salary revision two times each year”. Mr. Hien said that “new company offer
me double than current pay”
Employee turnover intention is usually affected by salary, compensation packages, and
remuneration growth. When discussing the reason why they leave a job, employees often
mention salary, and benefits, because they are not happy with their pay (15). Employee
compensation and benefits includes all forms of pay, rewards, bonuses, commissions,
leaves, recognition programs, flexi work hours and medical insurance (16). Some study
revealed that compensation components are important factors to retain and motivate
employees (17).
Compensation refers to any monetary return or nonmonetary service received as a
consequence of employment. Two kinds of compensation: direct compensation, this is cash
payment for working, and indirect compensation, this includes insurance and other noncash payments. Benefits are a form of indirect compensation. Total compensation is defined

as a combination of direct and indi-rect compensation (18), So that, total compensation is
only a part of a reward system, including pay and benefit as well as important personal
satisfaction motivators designed to encourage organizational, individual, or group
performance (19).

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2.2.3. Lack of knowledge sharing
After a deep interview some Engineers and Technicians are currently working in this
Department, they are not satisfied with the current job. There is a lack of knowledge sharing
between team members. Especially, lack of technical training and machine problem solving
experience sharing. So that they don’t have enough experience for operation and machine
troubleshooting.
Knowledge sharing is a very important factor in the organization. In the Testing and
Product Department, there is a lot of information and knowledge about machine
troubleshooting, testing and release. This knowledge needs to be transferred properly
between team members. So that new people join the team will have enough information to
save time for their activities.
Mr. Huy, Team leader of Maintenance and Mr. Bao Department Manager said that
“The performance of staff in the Department decreases because of low motivation in the
team. They are not satisfied with their current job”. The ratio of delivery testing on time
decreases, increases the number of testing delays, increases machine downtime and
increases internal customer complaints. Duc and Thanh said that “When I first joined the
company. As a new member, I didn’t understand much of the system. Other engineers
didn’t share knowledge. I don’t like that”. Mr. Tu said” I lack experience in troubleshooting,
so it took me time to solve a problem. There is a lack of an experience sharing system within
the team. I was not satisfied with that”.
Doing more face-to-face interviews with internal customer, Ms. Loan revealed that
“Production spends more effort to push up the testing progress to catch up to the deadline”.

There some product types can be tested in Vietnam and some product types need to be sent
to the Netherlands for support testing. When tests in Vietnam have potential delay, they
will ask support from the Netherland factory also, with low performance in the Testing
Department in Vietnam, increase the test support to Netherland then increase the production
cost.
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Turn over intension are attitude of individual toward the decision to stay or leave the
organization (20). Knowledge is considered as a form of information, know-how or knowwhy to give contend about knowledge of a process, product, technical instruction,… (21).
Knowledge sharing also influences job satisfaction and turn over intension (22). In recent
years, the concept of knowledge in organizations has become increasingly popular in the
literature (23), with knowledge being recognized as the most important resource of
organizations

(24). Although knowledge has always been an important factor in

organizations, only in the last decade has it been considered the primary source of
competitive advantage (25) and critical to the long-term sustainability and success of
organizations (26).

2.3. Main problem validation
The main problem could be concluded from above potential problem analysis and during
the interview. Investigating the potential problem of poor compensation and benefits, Mr.
Bao said that “pay and benefits are included in company policy and decided by the Board
of Directors”. It is hard to change this because it also affects company budget planning and
benefits. This cannot be changed by lower levels. Furthermore, this topic was already
discussed many times during the interview, the candidate also considers carefully before
they accept the position. Therefore, poor compensation and benefits is not the current
problem to focus on”. Final round of the interview is usually for salary and benefits

discussion between potential employee and employer. Candidates have enough time to
carefully consider the offer before accepting it. Salary and payment are defined top down
by management, so it is very hard to change it.
Analyzing the potential problem of lack of knowledge sharing, which included lacking
of technical knowledge sharing, machine operation knowhow, and troubleshooting
experience and lesson learnt. Mr. Huy mentioned that the team is building up the knowhow
sharing program to share knowledge between team members. Through this program, the
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