Professional Documents
Culture Documents
Contents
1. INTRODUCTION OF COMPANY ..................................................................................... 3
1.1. VISION OF COMPANY ................................................................................................. 3
1.2. MISSION OF COMPANY .............................................................................................. 3
1.3. TODAY THE ORGANIZATION .................................................................................... 4
2. COMPANY HUMAN RESOUCRE MANAGEMENT POLICIES AND
PHILOSOPHIES .......................................................................................................................... 5
2.1. Reward & Motivation: ..................................................................................................... 5
2.2. Equal Employment Opportunity policies ......................................................................... 6
2.3. Staff Training & Development:........................................................................................ 6
2.4. Overtime compensation: .................................................................................................. 6
2.5. Meal periods and break periods: ...................................................................................... 6
2.6. Performance Management Policies: ................................................................................. 7
2.7. Developing employee line:............................................................................................... 7
2.8. Staffing: ............................................................................................................................ 7
2.9. Payroll deductions: ........................................................................................................... 7
3. BUSINESS MOVING TO INTERNATIONAL DESTINATION IN VIETNAM ........... 8
3.1. THE VIETNAM ECONOMY AND ENVIRONMENT ................................................. 9
3.2. THE MAJOR ISSUES AND CHALLENGES OF IHRM AT STO FACES: ................. 9
3.2.1. The issues of managing people in different culture and environment: ..................... 9
3.2.2. Global work-life management challenges in Multinational Corporation: .............. 10
3.2.3. The issues of compliance with international laws and regulation: ......................... 10
3.2.4. The issues of communication: ................................................................................ 11
3.2.5. The issues of training and compensation: ............................................................... 11
4. NEW INTERNATION HRM PALN FOR VIETNAM BRANCH ................................. 12
4.1. Recruitment and selection: ............................................................................................. 12
4.2. Training and development: ............................................................................................ 13
4.3. Rearward and Compensation: ........................................................................................ 13
4.3.1. Foreign Service increment: ..................................................................................... 14
4.3.2. Allowance: .............................................................................................................. 14
4.4. Performance Management: ............................................................................................ 14
4.5. Employment career development: .................................................................................. 14
1. INTRODUCTION OF COMPANY
1.1.VISION OF COMPANY
“Be a leading business creating enduring value for all stakeholders, whilst being a catalyst of
economic growth & supporting sustainable development” (stomaldives.com, Annual report 2013,
2013).
1.2.MISSION OF COMPANY
Lead through expansion of existing businesses, diversification, exploring new possibilities
and entering into new ventures.
Explore beyond our borders; expand our markets and establish ourselves as an international
player, respected by the international business community.
Ensure accessibility with our presence nationwide; offer peace of mind and assurance to
the public of uninterrupted provision and affordability of essential goods and services and
those that contribute to a fulfilling modern lifestyle.
Build a skilled workforce by investing in human development; build our competencies, to
achieve sustainable and unhindered growth and fulfill our vision.
The entire operation of STO is now built on the SAP ERP platform. As a result, the Company has
identified the need or SAP trained professionals in the organization and also organization can plan
training program both local and foreign employees. The below shows the current status in genders
of employees work in STO.
HRM is a term used to refer the philosophy, policies, procedures and practices related to the
management of people begin an organization. Today every organization has to face highly
competition. Therefore organizations try to do right thing at the right time. In that situation HRM
plays major roll to achieve organizational goals. Satisfaction is the one of major concept in Human
Resource Management.
Human resource policies are the formal rules and guidelines that businesses put in place to hire,
train, assess, and reward the members of their workforce (Armstrong, 2000). These policies, when
organized and disseminated in an easily used form, can serve to preempt many misunderstandings
between employees and employers about their rights and obligations in the business place.
The Human Resources Department of STO remains dedicated to provide the necessary services
and assist STO employees in order to take the company forward. In this regard, HRD is committed
to introduce and implement policies to further enhance and facilitate its services to the employees.
The year 2014 and 2015 had been a challenging year given that the substantive implementation of
the SAP, including its alignment with the HR work, required significant effort. In this regard, the
lack of an adequate staff appraisal system to integrate with the SAP presented a major hurdle. The
role of human resource management is to plan, develop, and administer policies and programmers
designed to make expeditious use of an organization’s human resources. It is that part of
management which is concerned with the people at work and with their relationship within an
enterprise. The main HR policies and functions which included in State Trading Organization as
follows:
2.1. Reward & Motivation: STO motivates the staff by providing challenging tasks, a smart
corporate culture and long-term progressive perspectives. The top priority of the
management is to develop employees so that their services in turn propel the Company’s
performance. In this regard, the Company encourages staff initiatives and participation in
the decision making process.
As a reward for their performance, staff were compensated with an annual bonus according
to the annual bonus plan. This is a reflection of the fact that the Company’s management
has appreciated the employee’s hard and dedicated work. In addition to this, the
management gives special importance to promote workplace safety and provide a
conducive work environment.
2.2. Equal Employment Opportunity policies: STO provide equal benefited to their staff as it
can be more motivational factors. The main purpose of implementing this policies can be
all federal contractors to take affirmative action to prevent discrimination in employment
practices and to report on their progress. Specifically, affirmative action requires
contractors to implement affirmative action plans to assure equal employment opportunity
for underutilized minorities and women, people with disabilities.
2.3. Staff Training & Development: During the year a total of 382 staff participated in various
short-term training programs, while 72 staff continued in Company sponsored long-term
trainings of local and overseas programs. In 2013 STO has given strong emphasis on staff
training and development. As such, career and capacity development remains a top priority
of the Company’s HR strategy.
It is important to note that the HRD is working continuously to ensure that staff training
needs are met in order to develop capacity and staff ability to make informed decisions and
deliver the best service to the customers. The Company has taken steps to ensure staff
retention by maintaining policies that reward and motivate staff.
2.4. Overtime compensation: The philosophy behind State Trading Organization (STO)
compensation program is to create a compensation program that support the company’s
mission and values and objectives. As an interview with Mariyam, HR manger: says “we
believe that employee consistently performing above expectations and proficient in the role
should be rewarded with a higher base pay. Employee who are new and prohibition period,
should be paid the half of target compensations amounts”. In addition to base salary, the
company will utilize incentive or variable pay as a way to meet the strategic goals of the
company (Mariyam, 2015).
2.5. Meal periods and break periods: To promote a productive and safe work environment, the
STO provides rest and meal periods. As STO 50% sharing government, normally company
provide work period. Furthermore, excluding prayer time each employees get break period
for one hour.
2.7. Developing employee line: In order to raise productivity and ensure the company’s success
in the future, the HRD policies are geared towards developing employees in line with the
company’s business strategies this also has the dual advantage of ensuring long term staff
retention and allowing the staff to develop and further advance within the company.
Continuous learning and knowledge transfer has been the cornerstones of high performance
within the company. In addition to this, strategic competence development has been
utilized to identify the skill sets and expertise needed for the future and highlights
structured career development for the employees.
2.8. Staffing: staffing emphasizes the recruitment and selection of the human resources for an
organization. Human resources planning and recruiting precede the actual selection of
people for positions in an organization. In STO, staffing can be done by interviews and
selecting the suitable employees in the organization.
2.9. Payroll deductions: Human resource departments may do the calculations for payroll
deductions or may have the accounting or payroll departments handle them, depending
upon the number of employees and company structure. As in STO there is no any fixed
salary and deduction. The salary can be deducted in pension schemes and employee late
fin.
2.10. Termination policies: employers have a basic right to terminate an employee, but along
with that right, come responsibilities. Employers must comply with the
Employment/Labor Standards and human rights legislation for their jurisdiction and
beyond that, employers must treat employees fairly and in good faith as defined by
common law or civil law (Québec, 2002).
IHRM can be defined as set of activities aimed managing organizational human resources at
international level to achieve organizational objectives and achieve competitive advantage over
competitors at national and international level. IHRM is an important component of firms' global
strategy and is often recognized as an influencing factor of success or failure of international
business (Deresky, 2003). IHRM involves developing human resource capabilities to meet the
diverse needs of multinational and global corporations. Ensuring high-quality management is
critical due to the complexity of managing international operations
More and more STO company plan to conducting their business in other countries as on Vietnam.
Like huge global companies such as Toyota, Walmart’s Molson’s have long had extensive
overseas operations. In company strategic committee plan to open a new department in Vietnam.
For implementing this plan, STO human resources department and human resource manager
workout on behalf of employees and evaluating the country culture, market, government roles and
regulation for international assignment. Furthermore, STO decide to send five employees to
Vietnam and two of them are managerial employees which can be controller of the department.
The remaining three employees are administrative level of employees which is working on
administrative works on Vietnam branch.
Vietnam has boosted its international economic integration as it enters into more free trade
agreements with the Eurasian Economic Union, the European Union, South Korea and the Trans
Pacific Partnership.
cultural environment of Vietnam. Culture issues can be important factors which must
solve for growth and development of international business environment.
Tolerance towards other culture, race, creed, color, habits, and values
Stress resistance
Goal-oriented behavior
extended vacation time and telecommuting are ways to motivate existing employees and
to attract and retain new skilled employees. Below showing some of rewards and benefits
which STO planning to provide for international staff which working on abroad.
4.3.1. Foreign Service increment: apart from salary, company plan to provide the service
premium and mobility premium. Service premium can be given only expatriates in
order to encourage them to accept assignment in other countries. On mobility premium
are bonuses which given to employees for their ability to willingness to move between
two foreign posts. Those increments are based on company objectives as well as
employees are motivated.
4.3.2. Allowance: discretionary allowance are also giving to foreign staff in order to attract
and retain those most qualified. In STO plan to give cost of living allowance and goods
and services allowance for accommodating those staff in the country.
The all the managerial level of employees and other administrative employees which are
working on aboard can get many rewards, as a result those employees are happily
motivated with their company. Balancing compensation and benefits for the organization's
workforce is an important HR function because it requires a sensitivity to the wants and
needs of a diverse group of people.
4.4.Performance Management:
There are various standard formed for the employees in order to maintain their performance
throughout the financial year and the feedback is also provided after an employee goes
through whole set of standards. The feedback is provided continuously in STP, for example
there is performance measurement on the quarterly basis which provides a base for the
employees to check on their performance.
opportunities for relevant field. With those opportunities organization can get educated and
skilled employees as well as it can be easy to sustain the business in Vietnam.
4.6.Performance Appraisal:
The goal of global performance management strategy is to enable peak performance in the
enterprise. This means creating an environment where employees can excel, develop skills
for improvement, and move toward their career goals. All the employees of STO in
Vietnam branch are made a part of the peak performance process, which includes
performance, development, and career planning elements that are recorded in the
company‘s online tool. The Compensation and bonuses are linked to this process every
year. The process is a cycle that includes several key phases throughout the year. Such as
setting objectives and establishing core competencies, creating a development and career
plan. Reviewing both of the above regularly, through mid-year and year-end formal
reviews, Calibrating output across departments throughout STO. This is managed through
face-to-face meetings. While implementing this kind of performance appraisal system,
organization well know the accurate work level of employee and it can be easy to rate them.
In terms of culture, too, had a significant influence on Vietnam and this continues up to the present,
if only as a residual factor, both with respect to institutions and norms. Such cultural influences
may have had a significant impact on the evolution of HRM in their respective countries western
model to which they have adapted their own versions. The degree to which this strand of culture
continues to play a significant role on HRM in Vietnam is an important one to stress. Its role in
influencing societal values has been measured by many social scientists. According to Hofstede,
2000, research studies says that out scores for both China and Vietnam which are somewhat similar
and approximate to what one would expect for East Asian countries. Both are high on ‘hierarchy’
and ‘collectivist’ values, similar on ‘uncertainty avoidance’. With this STO HR manager must
identify the influence on Vietnam culture and must study the social and economic condition of
Vietnam for success and development of business.
Training is the process of altering employee’s behavior, attitudes and knowledge in a way that
increases the probability of individual and organizational goal attainment (Gomes, 2012). Training
aims to improve employee’s current work skills and behavior. For International assignment, once
a STO must selected a person (whether, Manager, structured reproducer, trouble shooter or
administrator) expatriate training is considered to be the next crucial step to ensure the expatriate’s
effectiveness and success on abroad. In cross cultural training can be conducted, based on
management philosophy but highly concentrate on staffing approach. Effective training
programmers can also improve overall management style. In terms of leadership, the locals would
like their expatriate managers to be friendly, more. While company focusing on training can be
benefited to organization as well as it will easily wide the business in global market.
The impact of the growth of international economy has become a major force in business in general
and in human resource management in particular. These practices are important realities faced by
STO doing business overseas. Before entering into global market STO HR department must
coordinate policies and procedures that effectively balance the needs and desires of host country
nationals (HCNs), parent country nationals (PCNs). Compensation is one of the most complex
areas of international human resource management. Pay systems must conform to local laws and
customs for employee compensation while also fitting into global company policies. It is also
important for company to consider carefully the motivational use of incentives and rewards among
the employees drawn from three national or country categories (Haile, 2002). The challenge for
the STO’s HR manager must work with top management in fostering the desired “international
mind-set.” MNCs’ HR managers are facing the complex components of international benefits and
compensation every day as they attempt to manage human resources across national boundaries.
HRM is delivered through the HR architecture of systems and structures, the HR function and,
importantly, line management. The practice of referring to people as resources as if they were any
other factor of production is often criticized.
Working on developing the business in Vietnam, there will be different model/approaches which
can be wide the business and by applying can be increase the productivity as well as increase the
brand name of business in market. Human resource management professionals working for global
organizations often have unique staffing choices.
Similarly, techniques and expertise of IHRM can be scrutinized into a critical examination that
reveals the hidden intentions and interests behind the seemingly neutral facade of HRM,
international management and IHRM. The academic have respondent positively to the challenges
of internationalization pro-positing different HRM approach. The majority of HRM scholars are
concerned with the design of HRM process in global organization/MNCs, interaction between
institution, societal norms and government regulation and comparative analysis of HRM
approaches across economies (Melcalfe and Rees, 2005).
6.1.Contextual model
The international process with the HRM system can be complex and is heavily influence by a
variety of contextual and historical factors. According to Hendry and Pettigrew (1990) argue that
the existence of a number of linkages between the outer environmental context (socio economic,
technological, political-legal and competitive) and inner organizational context of HRM. The
contextual model of HRM emphasizes the importance of environmental factors by including
variables such as the influence of those above factors. The latter, at best, consider the context as a
contingency variable. The contextual approach is broader, integrating the human resource
management system in the environment in which it is developed
According to Vietnam Development Report says that in year of 2011 was important for the
economy of Viet Nam because this is the first year in the latest Socio-Economic Development
Strategy (2011-2020), with the goal of becoming an industrialized and modern economy by 2020.
This strategy goes on to identify the country’s key priorities to meet this ambitious target: stabilize
the economy, build world-class infrastructure, create a skilled labor force, and strengthen market-
based institutions. Finally, the degree on the issuance of certain additional tax measures to remove
difficulties for enterprises and individuals, contributing to economic development in 2011. With
all those factors STO HR management must learn and guided to sustain the market. With the
contextual model business can work on achieving strategic objectives by involving skilled
employees in organization. HR manager must concentrated on every part of environment
especially HR context. By implementing contextual model can get employee benefits and it is the
one factor which employees satisfied their job.
6.2.Matching model
When working within this model, a company concentrated on performance management system
that exercise tight control over individual activities, with the ultimate goal of securing a
competitive advantages (Guest, 1995.) The matching model can generate high-corporation on
organization staff and culture of the country. Every factor of this model can be interrelated with
each other. The main three target of this model can be achieving strategic mission, full filling the
IHRM policies and formalize organization structure. With this three targets STO Vietnam branch
can sustain business in the country of Vietnam. Thus, implementing the business, this model can
shows some influence factors such as culture of country, political forces, and economical forces.
In order to make business affective HR manager can consider those three influences and working
on removing those issues in the market.
7. RECOMMONDATION
Firstly, rapid international growth brought with it the problems of controlling and coordinating
increasingly complex global organizations. Here we should point out that, while many authors use
these terms interchangeably, we make an explicit distinction between control and coordination. To
remove the issues of IHRM, the company go with best plan and company must choose suitable
candidates for working on international branch. Those selected employees should have ability to
work with competitive market and different culture in country.
Secondly, the IHRM manager must integrate compensation planning with human resource
planning as a vital component of the firm’s corporate strategy. By developing global compensation
plan, it can developed to attract in the procurement process, to retain in the allocation process, and
motivate in the utilization process the kind and quality of IHRM to achieve global objectives of
company.
Finally, while moving the International, one of important factors which STO focus can be
marketing the business. Marketing can be main factors which increase the sales and wide the
business in Vietnam. STO must select best marketing manager in order to introduce the market.
Marking is the only tools which increase the portfolio of the business in International.
8. CONCLUSION
In conclusion, business organizations have been increasingly expanding to global markets because
of the virtue of globalization. Company operating in the international business environment are
faced with a great variety of cultural and institutional variations which make managing in a
multinational context particularly complex (Doz & Prahalad, 1986). Managers of STO Vietnam
branch must realize the importance of IHRM practices in ensuring the profitability and viability of
their business operations, and global staffing is increasingly seen as a primary HR practice used
by company to control and coordinate their spatially dispersed global operations.
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