2.

Which of the OB Theories/Strategies described in the textbook could be

applied successfully in Vietnam, why, how, and by whom, etc., this could be
done?
After careful research about different challenges Vietnamese and Vietnam-based
companies are facing, we have found a potential Organizational Behaviour Theories
that could be applied successfully in Vietnam and brings considerable benefits to the
enterprises in particular and the economy in general: Job satisfaction theory.
2.1. Definition of job satisfaction:
Due to the popularity of job satisfaction within the field of occupational and
organizational psychology, various definitions of job satisfaction have been provided.
The two most common definitions describe job satisfaction as: “the pleasurable
emotional state resulting from the appraisal of one’s job as achieving or facilitating
the achievement of one’s job values” (Locke, 1976) and “the extent to which people
like (satisfaction) or dislike (dissatisfaction) their jobs” (Spector, 1997).
This concept is still relatively new in Vietnam, and it is not usually captured in labor
force surveys, household survey, or enterprise survey.
2.2. An overview about the job satisfaction of Vietnamese employees:
According to the Employee Job Happiness Index conducted by JobStreet and jobsDB
in 6 different Southeast Asian countries on how happy employees are with their job
and how they think this will change in the next 6 months, the Vietnamese rank
number 2 in the region for the happiest employees and their satisfaction level has
increased from the previous year. The number of happy employees has increased from
60% to 76%. The happiest work in the banking, call centre and medical fields and the
unhappiest are in telecommunication, oil & gas and food & beverage (SEEK Asia,
2017)

Despite seemingly scoring high in comparison to some other countries in the region,
Vietnam only posted a score of 5.19 (SEEK Asia, 2017), which is just above the
neutral level (5 = “neutral”, scoring 0 = “extremely unhappy” and 10 = “extremely
happy”). The outlook for the next 6 months was quite pessimistic and employees
strongly desired to be treated better.
Companies need to work towards effective solutions to gain a deeper understanding of
their employees and increase their satisfaction, which can substantially benefit the
companies’ stability and productivity.
2.1. Important determinants of job satisfaction in Vietnam:
Many factors are having a certain impact on workers’ job satisfaction in the context of
Vietnam, including gender, age, ethnicity, union membership, leadership styles,
company reputation, etc. However, our group will concentrate on analyzing the most
important predictors of job satisfaction.
2.1.1. Monetary factors:
2.1.1.1. Income: 
Income can be divided into absolute income (the amount of money that an individual
is compensated for his or her work) and relative income (one's earnings concerning
average income) compared to others in the same sector. Income is highly significant
when it comes to job satisfaction. However, Vietnamese workers’ average monthly
salary is only $242, a seventh of the regional average of $1802 (ManpowerGroup,
2019). The low wage has adversely affected workers’ ability to invest in themselves
through training programs, which is necessary for the wave of massive technological
advancement if employees aim at higher earnings. That’s why 1 in 4 Vietnamese
employees demand an increase in their pay.
2.1.1.2. Efficiency wage policy:
Efficiency wage policy relates to the question of whether the firm has a policy of
paying a premium above the wages of other firms in the industry to secure appropriate
staff. As the survey done by the Center for Analysis and Forecasting (CAF) stated, in
Vietnam, employees in firms that practice efficiency wage policy have higher overall
job satisfaction as well as job satisfaction in terms of different dimensions (the
satisfaction with the remuneration, job security, promotion opportunities, training
system, and fringe benefits) than their counterparts in other firms (Nguyen Thi
Phuong Mai et al., 2015)
2.2.1.1. Rewards:
Rewards can be divided into non-monetary opportunities (flexible work hours,
training opportunities and the ability to work independently) and monetary
incentives (stock options, profit sharing plans, paid time off, bonuses and cash
awards). Rewards is an important motivator for increased job happiness in Vietnam
and Vietnamese workers are having a strong demand for better rewards.
2.2.2. Expenditures on training programs: Training opportunities undoubtedly play
a vital part in creating a better working conditions for employees. Employees
working in firms that spend more in training (as a percentage of their revenue) is
associated with higher job satisfaction. In our country, the lack of proper training
programs is a remarkable source of workers’ unhappiness at workplace.

2.1.1. Education:
Education is found to be statistically significant and negatively related to job
satisfaction. Individuals with higher education levels are found to be more dissatisfied
with their job. More educated people seem to have higher expectations, thus lower
satisfaction (Nguyen Thi Phuong Mai et al.,2015).
2.1.2. Career development:
Besides being one of the top 3 sources of workers’ unhappiness, the lack of career
advancement opportunities in many Vietnamese enterprises also caused 51.3 percent
of Vietnamese workers to resign their jobs last year (Adecco Vietnam). We can infer
from these figures that promotion opportunities can greatly influence job satisfaction,
which in turn affects the turnover rate.
2.3. Reasons for Vietnam’s applications of job satisfaction theory in
Organizational Behavior:
2.3.1. Job satisfaction theory facilitate better understandings of employees:
One theoretical model - the exit–voice–loyalty–neglect framework - is helpful in
understanding the consequences of dissatisfaction. The responses of employees,
which differ along two dimensions: constructive/ destructive and active/passive, are
as follows:
- Exit: the exit response directs behavior toward leaving the organization, including
looking for a new position as well as resigning.
- Voice: the voice response includes actively and constructively attempting to
improve conditions, including suggesting improvements, discussing problems with
superiors, and undertaking some forms of union activity.
- Loyalty: the loyalty response means passively but optimistically waiting for
conditions to improve, including speaking up for the organization in the face of
external criticism and trusting the organization and its management to “do the right
thing.”
- Neglect: the neglect response passively allows conditions to worsen and includes
chronic absenteeism or lateness, reduced effort, and increased error rate.

(Robbins, and Judge)

Understanding different levels of the responses of employees whenever they have a
sense of dissatisfaction enables employers to more easily discover problems and
propose effective solutions.
2.3.2. The relationship between job satisfaction and a productive performance:
Vietnam’s labour productivity index reached VNĐ102.2 million (US$4,400) per
labourer in 2018. According to a report by the Ministry of Planning and Investment,
in the period 2011 - 2018, the country’s labour productivity increased by an average
of 4.88 per cent annually (Vietnam Investment Review). However, Nguyen Duc
Thanh, founder and director of Vietnam Institute for Economic and Policy Research
(VEPR) said the increase in Vietnam’s labor productivity was modest and
inconsistent: "The rate only increased by three times in 25 years." In comparison with
other countries in ASEAN, Vietnam's labour productivity is are significantly low.
This means that Vietnam’s economy is facing a huge challenge to catch up with other
countries. If measured by purchasing power parity (PPP) value in 2018, Vietnam’s
labour productivity reached US$11,142, only 7.3 per cent of Singapore, 19 per cent of
Malaysia, 37 per cent of Thailand, 44.8 per cent of Indonesia, and 55.9 per cent of the
Philippines (Viet Nam News). Minister of Planning and Investment Nguyễn Chí Dũng
said improving Vietnam’s labour productivity is an urgent task, playing an important
role to promote growth, overcome the middle income trap, avoid falling behind and
narrow the development gap with countries around the world.

On August 7th, 2019, the Vietnam Government Office held a Conference on

improving national labor productivity. In the concluding remarks, Prime Minister
Nguyen Xuan Phuc outlined six key tasks to raise the labor productivity in Vietnam
and create a competitive working environment to select and promote talented people
together with promote talented people and paying attention to improve the quality of
education and human resource training system were one of the policies mentioned. In
other words, the Party and the State lays emphasis on increasing job satisfaction with
a view to improving national labor productivity.

2.3.3. Job satisfaction has a profound impact on turnover rate:

The employee turnover rate of Vietnam has been on the rise in the last three years,
reaching a rate of 24% in 2019 while the optimal turnover rate is only 10% (Viet
Nam News). Thanh Nguyễn, CEO of the human resources consultancy Anphabe
commented that “If 10 per cent is the ideal turnover rate, which allows an
organization to remain stable and transformable with new people every 10 years,
then obviously we can't be at ease with the current 24%.”

The problem is how we can deal with the alarming high turnover rate of our
country’s employees. The four main factors associate with the decision to stay or
leave a job of an employee are: income, career path, employers’ reputation, and
work life balance. All these factors are already mentioned above as determinants of
job satisfaction. Therefore, we can come to a conclusion that increase job
satisfaction can reduce turnover rate and result in a more stable performance of the
company.

2.4. How can Vietnam increase job satisfaction by applying job satisfaction
theory?
Before putting forwards any solutions, employers must first understand the needs of
employees and the determinants of their satisfaction in workplace. In this part of our
report, we would like to express our opinions on what we think Vietnamese and
Vietnam-based companies can do to increase job satisfaction of their employees.

2.4.1. Increase minimum wages to meet workers’ living costs:

As Vietnam is a developing country and our people have not reached a level of
comfortable living, pay does correlate with job satisfaction and overall happiness.
Despite experiencing a faster increase in pay than other Asian countries, Vietnam’s
minimum wage still remains low. As Vietnam’s economy continues to grow, rising
wages will be an unavoidable feature of doing business in the country. In
2020,Vietnam will increase minimum wages by approximately 5.7 percent from
January 1 and the government have planned to raise wages for civil servants by 7.3
percent in July 2020 (Samuel). What businesses should do is to plan ahead and
prepare their budgets, operational capacity, and costs for the new year when the
new wage hike goes into effect. 

2.4.2. Provide employees with more training programs to upgrade their skills:

A survey has found that on average, a firm that provides the training for new
workers gains roughly 13.7, 10 and 14.9 percent higher in output value per worker,
value added per worker and gross profit per worker, respectively, than the
counterpart (Dang et al.). Base on that survey, we can conclude that organizing
training programs can bring the companies practical benefits. The steps to create an
effective training program is as followed:

- Step 1: Perform a training needs assessment:

 Identify a clear business goal that the training supports

 Determine the tasks the workers need to perform so the company can reach
that goal
 Determine the training activities that will help the workers learn to perform the
tasks
 Determine the learning characteristics of the workers that will make the
training more effective

- Step 2: Keep adults learning principles in mind. Adult learners are self-directed and
goal-oriented. They come to training with a lifetime of existing knowledge,
experience, and opinions and learn when they see “what’s in it for them”. They also
require relevant and task-oriented training.

- Step 3: Develop learning objectives

- Step 4: Design training materials

- Step 5: Develop training materials

- Step 6: Implement the training

- Step 7: Evaluate the training

- Step 8: Rinse, Lather, and Repeat Any Step When Necessary

2.4.3. Create clear career development plan for employees:

Career development is critical for employee engagement and a career development

plan will be a win for both employers and employees. The plan focuses on the
employees’ needs for growth and development and the assistance the organization
can provide so that the employee has the opportunity to grow his or her career

2.4.4. Offer better rewards and apply reward power

As our group presented above, Vietnamese workers are dissatisfied with their
rewards. Therefore, we suggest companies to offer better rewards and apply
reward power. However, when apply this power, managers should be careful of
the type of reward offered and whether the reward is fair and ethical. Managers
should avoid promising more than they can deliver, refusing to provide rewards or
use rewards in a manipulative way.

2.5. An example of a company with high job satisfaction: HEINEKEN

Vietnam

2.5.1. An overview of HEINEKEN Vietnam:

HEINEKEN Vietnam is a subsidiary of HEINEKEN, the world’s most international

brewer. HEINEKEN Vietnam was established in 1991 and operates six breweries in
Hanoi, Da Nang, Quang Nam, Ho Chi Minh City, Vung Tau, Tien Giang and nine
sales offices across Vietnam.

From humble beginnings with only 20 employees in Vietnam, HEINEKEN Vietnam

is now the second largest brewer in Vietnam with more than 3,500 employees and
contributes to approximately 0.9% of the nation’s total GDP. 

On 10 July 2019, for the second consecutive year, HEINEKEN Vietnam is recognized
as one of the best companies to work for in Asia by HR Asia Magazine, one of Asia’s
leading publications for HR professionals.

 “We believe the better trained our people are, the bigger the impact they will have on
our company and the country,” said Mr. Leo Evers, Managing Director, HEINEKEN
Vietnam. Mr. Leo Evers stated, “HEINEKEN Vietnam’s business success is very
much due to its commitment to its people. Our employees are the people on which our
company and success is built on.”

2.6.1. How can HEINEKEN Vietnam create and maintain job satisfaction?

- HEINEKEN Vietnam understands that a key measure of company performance is

measured by employees’ satisfaction and engagement,therefore they:
+ Provide platforms to listen to employees’ feedback

+ Proactively host periodic Town Hall meetings throughout the year and an annual
Climate Survey which encourage employees to share their feedback, ideas and
suggestions for improvement.

→ HEINEKEN Vietnam can take prompt action to improve the working

environment.

- HEINEKEN Vietnam has heavily invested in developing staff at all levels by

organizing development program

+ Accelerate Your Talents (AYT): focuses on developing staff in different formats.

+ Short-Term Assignments (STA): employees that take part in the program have the
chance to work in a different country with a different working environment and
people from different teams and cultures

+ HEINEKEN Vietnam Graduate Program (HVGP) + Asia Pacific Graduate

Program (APGP): nurtures high-potential individuals to give them the opportunity to
work and learn in HEINEKEN offices around the world.

→In 2018, HEINEKEN Vietnam invested VND 31 billion in developing its’ people.
These investments are a testament to HEINEKEN Vietnam’s commitment to ensure
the development of its people.