Recently, thanks to the economic development after the renovation period in the 1990s, the annual income of Vietnamese people has increased, especially in private sector. As the result, there is new trend in the cities of Vietnam that many young civil servants resign their job to work for foreign and private companies. According to Vietnam Ministry of Labour, War Invalids and Social Affairs, during the past 5 years, there were over 16000 employees in governmental agencies who have left their job. Professor Vu Cao Dam insisted that the main reasons are lower salaries and less active working environment in comparison with business companies. (BBC Vietnamese, 2008). Many objective and subjective reasons can be counted, and based on the notion of Hertzberg's Motivation-Hygiene Theory (1966) when the motivators and hygiene factors are not satisfying, employees may have to choose a better job. This situation should be examined and investigated in order to find suitable solutions that could help utilizing and encouraging young employees in governmental agencies.
1. Objectives:
The author used to work for a governmental organisation before studying in the United Kingdom. Therefore, as a young civil servant in the governmental agency, the author realized an emerging issue in the Organisation and Human Resources areas: the high labour turnover of young employees in the public sector. By using the learned knowledge from People and Organisations Module, the author would like to look into that issue from the author's current employing organisation, and hopefully, the outcome of the assignment will give a broad view of how to solve the problem.
2- Organisation context:
As a part of Office of the National Assembly of Vietnam, Office of National Assembly Delegation in Haiphong City (the Office) founded in 1985. The main duty of the Office is to assist and provide general advices, services for all activities of National Assembly Delegation and Members of National Assembly in Haiphong City. At present, there are thirty people in the Office including a Chief, two heads of departments, sixteen legal experts and other employees (accountant, cashier, guards, drivers, and cleaner).
II - ORGANISATION ISSUES:
As mentioned above, the main problem at the Office in terms of Organisation Studies and Human Resource Management is the high labour turnover of young civil servants. Because the Office is financed by state budget, its pay system has to conform to state regulations based on time rates and payment 3 Level (Marchington, 2006). Even though in 2005 Vietnamese Government issued a Decree (No. 130/2005/ND-CP) which allow the leader of governmental organisation to decide the pay system within the organisation's budget, however the Chief of the Office did not want to apply this Decree. As the result, employees' salary and other benefits are lower than the living standard, especially in comparison with the salary of employees working for private and foreign companies.
Therefore, the Office has to face with difficulties when the numbers of work increased but the Chief could not recruit new legal experts. Actually, fewer and fewer young people want to be officers in the organization. Therefore, there is an unbalanced number of young employees in the Office. Of 19 officers in the Office, nearly 60% are over 50, there are only 11% under 30 year old. In the last five years, there have been ten young legal experts who were employed under 30, but recently eight of them have left their jobs. At present, only two young officers are still working but with low commitment.
III - PROBLEM ANALYSIS:
Turnover is the behaviour of an employee who leaves the job in an organisation (Bevan, 1987). According to Heery and Noon (2008), labour turnover is "an index of the number of employees who leave the organization during a particular period, expressed as a percentage of the average number of employees during that period". Also according to Bevan (1987), there are two kinds of turnover: involuntary turnover and voluntary turnover; many reasons causing labour turnover like pay, low levels of motivation, job satisfaction, organisational commitment etc. High labour turnover causes problems for business and employment, namely lowers productivity and morale; and tends to get worse if not being dealt with.
In case of the Office, even though well performing and highly valued, eight young legal experts left their jobs voluntarily. According to Beardwell and Claydon (2007), productivity of the employee is affected by their motivation. According to Mullins (2002), motivation as the needs and expectations at work can be classified as follows:
+ Economic rewards: As Mullin (2002) defined, economic rewards are considered to be "instrumental orientation" to work. Economic rewards include pay, benefits, pension right and material goods. Vietnam is a developing country and the living standard is low in comparison with other countries, therefore economic rewards could be considered as the vital factor for employees to work. After the innovation period in 1990s, salary levels in private and foreign sectors are much higher than public sector, as the 4
result, the young civil servants in the Office have the basis to compare and make decisions whether to leave or not. Moreover, the pay system in the Office only based on working time, not performance-related pay, therefore it may not motivate the young employees to try their best for working.
+ Intrinsic satisfaction: It is considered to be "personal orientation" to work. It is believed that working for a governmental agency like the Office is quite boring and undynamic. Young legal experts have a good legal knowledge to assist Members of National Assembly, however, bureaucratic routine can make them inflexible and less updated in comparison with business environment. That is the reason why some young legal experts resign to find new jobs with higher challenge and dynamic.
+ Social relationship: It is considered to be "relational orientation" to work like status, friendship and dependency. Working in governmental organization, young legal experts sometimes feel unconfident and inferior in comparison with their friends who work for business company. Moreover, bureaucratic environment and repeated routine also limit their opportunities to extend the relationship with the society.
As Mullin (2002) mentioned, the comparison of economic rewards, intrinsic satisfaction and social relationship will impact on employee's motivation. With some young legal experts, they have a big family to take care, therefore, finding new jobs with higher salary is understandable for them when the current salary can not meet their needs and expectations. Meanwhile, other young employees want to find more challenging jobs or more dynamic working environment.
Besides individual motivation, job satisfaction also plays a vital role in improving level of performance and reducing the high labour turnover rate. Mullins (2002) insists that there is a close relationship between motivation, satisfaction and performance. Job satisfaction is affected by many attributes like social, cultural, organisational and environmental factors. In the Office, the following factors may have a remarkable influence on job satisfaction of young employees:
+ Leadership and power: According to Mullins (2002), behaviour of leaders can highly influence employees' satisfaction. In the Office, the Chief of the Office wants to put everything under his control, from day by day works to finance resource and recruitment. On the other hand, there is only the Chief who decides rewards in the Office. Also, there are no transparent criteria in work evaluation. So, the reward policy and work evaluation like a sole game which is driven by power of the leader. It seems that the leader uses 5 too much coercive power and reward power (French and Raven, 1960) to influence the subordinates. This causes uncomfortable mentality and high pressure on the young legal experts, especially with the new ones who are lack of working experience.
+ Gap in communication and empowerment: According to Handy (1993), communication in the organisation depends on "personal conversation". However, in the Office, large "power distance" is preferred (Hofstede, 1984). Power distance is encouraged because it presents the hierarchy and power imposed by the leader. There is no frequent communication between the leader and young legal experts. Even though sometimes the personal communication occurs between the leader and young employees, however, it is normal with reserved attitude of the subordinates and coercive attitude of the leader; and that is not enough to build a good communication. As the result, young employees hardly have the chance to decide anything because the leader is the one who makes all the decisions.
+ Employee rating: In Vietnam, it is popular that employees will get higher salary after each three year working if they graduate from a university and after two years if they graduate from a colleague. On the other hand, annually the leader decides employee rating at the end of year. Although the result of employee rating is the foundation for reward, but the leader's rating mainly decided by feeling, not really depend on the result of working. The young legal experts are always evaluated less than the old, even though they work hard to get the best result with the task; in some cases, young officers may work harder, get better results, but the older still gets higher rating at the end of year. This unfairness could influence negatively on job satisfaction of the young employees in the Office.
In short, there are many different reasons for young employees to leave the Office in the recent years. If the situation still remains, more young legal experts may resign to find other jobs.
IV - HUMAN RESOURCE MANAGEMENT SOLUTIONS:
Based on the analysis above, it is vital for the Office to minimise the high labour turnover, retain young employees and recruit new employees. First of all, the Office has to change its pay system. Moreover, besides financial rewards, the Office should offer non-financial rewards to create new motivation for its employees. On the other hand, raising young employees voice, improving the performance appraisal scheme, develop organizational culture etc. should be considered. The following solutions in Human Resources 6 Management can be used to retain the young employees and recruit new employees in the Office:
1- Reward management:
Based on the new financial regulation by the Government as mentioned above, it is recommended that the Chief of the Office should apply a new reward system as follows:
+ Base pay:
First of all, it is necessary to make clear between salary and wages. According to Bratton and Gold (2007), salary is the payment to white-collar workers like the legal experts; and salary should be calculated in annual terms. Meanwhile, wages is the payment to manual workers like drivers, guards and cleaners, which should be based on hourly rate.
Moreover, instead of using minimum salary per month and salary rate to calculate the level of base pay, the Office may apply two new methods: market pricing and job evaluation. Besides relying on market pricing, level of base pay could base on job evaluation; it means that the Chief will decide the level of pay for each employee on the basis of evaluating "the relative value or worth of all the jobs in the organisation" (Bratton and Gold, 2007).
+ Individual performance-related pay:
As Bratton and Gold (2007, p.374) defined, individual performance-related pay (IPRP) is determined by "a system that directly ties pay to the level of performance rather than the fact of employment". It means that the more hard-working and competent employees are, the higher their reward would be. Obviously, if IPRP could be applied, the young employees in the Office will try their best to work as well as to receive higher payment for their living.
+ Indirect pay:
As Bratton and Gold (2007) mentioned, there are three main types of indirect pay. In the case of the Office, the following indirect pays could be used:
- Health insurance: All employees in the Office will be covered by health insurance. The insurance fee will be paid from the Office's budget annually.
- Subsidised meals: Because the Office's building is quite far from city center, it is a good idea to provide subsidised meals for the employees.
- Extra vacation days: Besides working, vacation could be the good chance for all employees to share their free time together, that help to enhance the spirit of mutual understanding.
+ Non-finance rewards: 7 Besides the economic rewards, the Office can also improve non-financial rewards, an important motivator for young employees, as follows:
- Recognition programmes: Praise and recognition from the leader is consistently found to be the most important motivators for some employees. In order to encourage young employee, there are simple ways to satisfy their recognition need by "Thank you" note or "a pat on the back" (Redman and Wilkinson, 2006), or citing them in important meetings. The leader should issue the rules to honour and compliment on the achievements of individuals. Moreover, publicising these results broadly, exhibiting photographs of youth activities as decorators at the Office could be effective methods (Sargeant, 2006).
- Focus on results rather than tasks, so that where appropriate the young legal experts can have some flexibility over how their roles are performed. Of course this practice needs "friendly, accessible and supportive supervision" from the leader (Sargeant, 2006).
2- Performance appraisal scheme
A performance appraisal scheme is the fundamental of reward system. According to Beardwell and Claydon (2007), it is necessary for employees to get involved in designing the appraisal plan, and estimating the process of performance. Performance appraisal scheme needs to be in openness atmosphere with agreement between all employees and leader (Grayson, 1984:177 cited by Beardwell and Claydon, 2007). Stone (2005) insists that ranking could be an effective method to measure outcome of the employees.
Therefore, ranking and rating should be implemented annually. All employees should be taken part in selecting a set of performance criteria. Moreover, each employee's performance is accessed not only by colleagues, line manager, leader, employee themselves but also by customers or Member of National Assembly (Stone, 2005). Based on a list of selected criteria and assessment, at the end of year, the leader ranks all employees accordingly from the best to the worst. This is the foundation for the leader to have appropriate rewards for employees to encourage them to work harder. In addition, young employees will understand the fairness of employee rating, then improve their job satisfaction and motivation in the Office.
3 - Employee voice:
Personal communication between the leader and subordinates is very important. Communication is an important channel of feedback loops, which is always created by effective and powerful leaders (Clegg et al, 8
2005). There should be more communication within the Office, especially between the leader and young employees. As Clegg .S et al (2005, p.330) mention, "these top-down strategies can be supplemented by bottom-up tactics - such as gossip or informal conversation", therefore, the leaders can also have some small talks with the employees about their study, their work, and their plans for future, etc.
Moreover, the leaders should provide more opportunities for the young employees to develop their individual strength. Besides being given new challenges, the employees should be encouraged to get involved in improving the working methods and decision making in the Office. It helps to improve speed of the work, use human resource efficiently, motivate the young employees as well as uplift their job satisfaction.
4 - Employee training and development:
Self-actualisation needs are the highest level needs in Maslow's hierarchy framework (Maslow, 1943), which reflects "the desires for self-fulfillment and realisation of the individual's full potential" (Beardwell and Claydon, 2007, p.493). Therefore, besides providing a good total reward system, the Office also should consider its program of employee training and development. Training and development not only increase employees' knowledge, help them to participate significantly in their work, but also give them opportunities to meet self-actualisation needs. The Chief should create favourable conditions to help legal experts take part in training courses or further study. What is more, the employees should be provided timely and exactly the information about opportunities of promotion or better jobs in the Office, then they will be well-prepared to identify their motivation and job orientation in the future.
5 - Organisational culture:
Organisational culture, as "the deep, basic assumptions and beliefs that are shared by organizational members" (Schein, 1997, cited by Clegg et al, 2005), is necessary to every organisation. Parry and Jackson (2008, citing Schein 2004) mentions that leadership plays a key role to create, manage and even destroy organizational culture.
In the case of the Office, culture can be created when all employees, especially young legal experts, are encouraged to take part in defining objective, plan, and activities of the Office. Moreover, the Chief of the Office should develop and ensure a favourable working condition as well as maintain stable jobs, behave all employees equally and intimately. It will keep 9 the employees' mind on their works instead of worrying about miscellaneous matters.
In addition, friendly, opened relationship between colleagues also contributes in maintaining culture in this organisation. The Office could encourage employees to work in teams as well as exchange working experience between two departments and among other offices. Moreover, the Chief can organise sports or cultural events and parties with other organisations on the occasion of Independent Day or Labour Day, not only in Haiphong city but also in some provinces in Vietnam.
V - CONCLUSION AND RECOMMENDATION:
1- Recommendation:
Based on the analysis of the organisational problems, some solutions of human resource management are recommended by the author with hope to reduce the high labour turnover in the Office as well as encourage young employees to contribute their ability in governmental agencies. The recommendations are:
+ The reward system should be improved to meet employees' needs, not only from base pay but also individual performance-related pay and indirect pay. The sooner the current pay system is improved, the lower labour turnover rate seems to be. Moreover, non-financial rewards also should be a part of reward system to motivate young employees as well as enhance their job satisfaction.
+ The performance appraisal scheme should be implemented because this will be the foundation of an efficient reward management. Ranking and rating should be implemented annually with the involvement of all employees in the Office as well as the assessments from customers. With the fairness of employee rating, job satisfaction and motivation in the Office will be better.
+ Employee voice should be raised. The more communication and employees' empowerment in the organisation, the better employees' motivation and job satisfaction.
+ Employee training and development should be considered. Once employees could be provided training and opportunities of promotion in the Office, they will be well-prepared to identify their motivation and job orientation in the future as well as be likely to commit and contribute to the organisation.
+ Organisational culture should be established and well managed. The leader should concentrate on setting up and sharing the organisation's 10 vision, beliefs and values, and leading the organisation to achieve its goals. It is the role of the leader but also the contribution of all employees in the organisation.
2 - Conclusion:
The report looks into the Organisation and Human Resource Management at the Office of National Assembly Delegation in Haiphong City, Vietnam in order to identify the main problems of high labour turnover of young civil servants. The theories of labour turnover, motivation and job satisfaction are utilised to analyse the problem. Based on that, theories of pay system, non-financial rewards, performance appraisal scheme, employee voice, organization culture are applied to recommend some solutions. Hopefully, the solutions could help to utilize and encourage young civil servants not only in the Office but also in other government agencies of Vietnam.
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