Assignment Cover Sheet: Student Details

SCHOOL OF BUSINESS
ASSIGNMENT COVER SHEET
STUDENT DETAILS
Student ID
Student name: TRAN HA ANH PHUONG number: 19680545
UNIT AND TUTORIAL DETAILS
Unit name: BUSINESS PROJECT Unit number: 200829

Tutorial group: Tutorial day and time: January 2021
Lecturer or Tutor name: Dr. Quan Tran and Dr. Thu Phan
ASSIGNMENT DETAILS
Title: REPORT – Declining productivity of full-time direct labor in after factory relocation
Length: 4,000 Words Due date: 24/01/2021 Date submitted: 24/01/2021
Home campus (where you are enrolled): ISB CAMPUS
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not been signed.
1
TABLE OF CONTENTS
List of tables .................................................................................................................................................. 4

List of figures ................................................................................................................................................. 5
Executive summary ....................................................................................................................................... 6
Acknowledgements....................................................................................................................................... 8
1. Business context .............................................................................................................................. 9
1.1 Company overview .................................................................................................................... 9
1.2 Organization structure .............................................................................................................. 9
1.3 Business situation .................................................................................................................... 11
2. Problem context............................................................................................................................. 12
2.1 Symptoms ................................................................................................................................ 12
2.2 Symptoms validation ............................................................................................................... 13
3. Problem identification ................................................................................................................... 15
3.1 Problem mess .......................................................................................................................... 15
3.2 Potential problem and main problems validation .................................................................. 17
3.2.1 Workers’ difficulties in adapting to new living place ................................................. 18
3.2.2 Insufficient supply of other inputs ............................................................................. 20
3.2.3 Inadequate labor capability to assign in production lines ......................................... 21
3.3 Problem justification ............................................................................................................... 23
4. Cause validation ............................................................................................................................. 25
4.1 Potential causes....................................................................................................................... 26
4.2 Cause validation ...................................................................................................................... 29
4.2.1 Ineffective training design .......................................................................................... 29
4.2.2 Unsuitable work environment ................................................................................... 31
4.2.3 Unproper trainees’ characteristics ............................................................................. 32
4.2.4 Trainees’ unwillingness to upgrade their capability................................................... 32
5. Solutions proposal ......................................................................................................................... 34
5.1 Alternative solutions ............................................................................................................... 35
5.1.1 Piece-rate scheme combing the level of products’ complexity ................................. 35
5.1.2 Incentives for workers’ capability .............................................................................. 37
5.2 Solution evaluation.................................................................................................................. 40
5.3 Action plan............................................................................................................................... 43
2
6. Conclusion ...................................................................................................................................... 47
7. Appendix ........................................................................................................................................ 48
7.1 Summary of transcripts for intake meeting in problem identification .................................... 48
7.2 Survey of employees’ satisfaction of benefit package after site relocation ............................ 55
7.3 Feedback of employees for training after site relocation........................................................ 56
7.4 Transcript of focus group interview for satisfaction of training environment ........................ 57
7.5 Survey of selection for alternative solutions ........................................................................... 58
8. Reference ....................................................................................................................................... 59
3
LIST OF TABLES
Table 1.1: Average headcount of BI production workers ........................................................................... 12
Table 3.1: List of compensation for full-time BI workers relocating to Long An factory ............................ 18
Table 3.2: Record of production interruptions due to insufficient supply of inputs excluding labor in
F18/19 and F19/20...................................................................................................................................... 20
Table 3.3: Skill assessment of workers capability after training in F18/19 and F19/20 ............................. 23
Table 3.4: Production headcount per batch for each product category .................................................... 24
Table 5.1: Piece-rate wage scheme proposal for ’s full-time worker ............................................... 36
Table 5.2: Vertical measure method of skill level for workers ........................................................ 37
Table 5.3: Incentive scheme of capability for workers (both horizontal and vertical measure) ..... 38
Table 5.4: Cost-benefit analysis of incentives for workers’ capability........................................................ 42
Table 5.5: Action plan for ................................................................................................................. 44
4
LIST OF FIGURES
Figure 1.1: ’s Organization structure ................................................................................................ 10
Figure 1.2: Organization chart of BI Production Team ............................................................................... 11
Figure 2.1: Productivity of BI production workers in F18/19 and F19/20 .................................................. 12
Figure 2.2: Productivity of overall factory, full-time and outsourcing workers in F18/19 and F19/20 ...... 13
Figure 2.3: Volume of defects products by full-time workers in F18/19 and F19/20................................. 14
Figure 2.4: KPI performance review of direct labor in F18/19 and F19/20 ................................................ 14
Figure 3.1: Initial cause-and-effect map of ...................................................................................... 17
Figure 3.2: Survey result of employees’ satisfaction of relocation............................................................. 19
Figure 3.3: Full-time workers leaving due to site relocation ........................................................... 22
Figure 3.4: Updated cause-and-effect tree of ................................................................................. 25
Figure 4.1: Fishbone map of cause validation ............................................................................................ 26
Figure 4.2: Stage model of motivation in training and learning activities .................................................. 27
Figure 4.3: Statistics for ’s feedback of training design after relocation ................................... 30
Figure 4.4: Proportion of critical process with procedural document in ......................................... 31
Figure 4.5: Willing vs. unwilling behaviors of full-time workers to upgrade their skills ............................. 32
Figure 4.6: Current salary components of ’s full-time workers ........................................................ 33
Figure 4.7: Updated fishbone map of cause validation .............................................................................. 34
Figure 5.1: Process of evaluate workers’ capability and offer incentives .................................................. 39
Figure 5.2: Solution selection by team leaders and managers ................................................................... 40
Figure 5.3: Solution preference by full-time workers ................................................................................. 41
5
Executive summary
This business project studies the obstacles that is confronting to improve the declining
productivity of full-time workers after the factory has to temporarily relocate to another province. Chapter
1 gives the business context and chapter 2 provides the symptoms of declining workers’ productivity. After
cascading groups (full-time and outsourcing workers), the author notifies the full-time workers’
productivity should be paid more attention because the company has to accept the learning curve of new
outsourcing workers. The additional symptoms of rising product defects by 61.5% since June 2019 and
tripling below-target rated workers in performance review of fiscal year 2019-2020 also proves the
noticeable decrease in full-time workers productivity after the factory relocates to Long An province.
To begin the chapter 3 with problem validation, the intake meeting is conducted with relevant
stakeholders (Operations Director, Production Manager, HR Manager, QC Manager, Planning
Manager, Production Team leaders and Workers) to identify the problems. The problem mess is then
developed with three issues proposed by participants in the meeting: 1) Difficulties for labor to live
in new place; 2) Inadequate production inputs; 3) Lack of labor for complicated production lines. The
author continues to validate these problems with infirmed-theory and empirical data from the
company. Regarding the adaptation of workers to live in new place, the new benefits package
information is proved to be competitive in both new and old provinces, and two-thirds of workers in
the employees’ survey satisfy with their living conditions taken care by the company with all meals,
accommodation and travelling. In accordance with Maslow’s hierarchy of needs, these components
meet the bottom layers of physiological and safety needs and contented by the workers, so there is
no problem with workers’ adaptation to new living place. In regard to the inadequate production
inputs, the statistics of the lack of packaging, materials, beam cause the delays in production batch,
consequently, lower the productivity. Because the Planning and Engineering Teams are working on
the project to minimize the input shortage and proven the improvements, this problem is not focused
in the project. As for the lack of labor for complicated production lines, there are several problems
are mentioned: the resignation of some experienced workers due to relocation, lack in experience of
new outsourcing workers, and ineffective training for current workers to upgrade their skills. The
company has to accept two facts of the quit of old workers owing to relocation and the unskillfulness
of new-hired and wait for the outsourcing workers as the learning curve. The result of successful
training to upgrade only 01 advanced and 01 intermediate workers in one year shows inefficient
training and there is always the shortage in skills for complex and high-profit production lines.
6
Therefore, this business project concentrates on the main problem of ineffective training to upgrade
current full-time workers.
After validating the problem, chapter 4 will apply multiple theories in human resources
management and compare with the reality in to point out the root causes. Behavioral research
by Chimote (1994), Sookhai & Budworth (2010), Gist et al. (1991), Mathieu et al. (1992), Towler &
Dipboye (2001) prove that the training effectiveness, especially in skill training transfer, is influenced
by four factors: trainee’s characteristics, trainee´s willingness to upgrade capability, training design
and work environment. The survey and focus interview of employees’ satisfaction of training after
relocation reveals they all satisfy with training design and work environment, except the lack of clear
detailed work instructions with quantifiable metrics causing it difficult and untransferable for the
trainees in skill training. At this moment, the R&D and Production Departments are re-creating the
documentation system with quantifiable measurements for all production process, so it is not paid
much attention in this project. Regarding the trainees’ characteristics, the assessment of their
performance and their ability to learn new knowledge show no issues of their conscientiousness and
self-efficacy. As for the trainees’ willingness, the author observes more than two-thirds workers are
unwilling to upgrade their skills and obtain passive attitudes in training. The theory-infirmed analysis
and empirical data reflection show the main cause of this problem may be the lack of extrinsic
motivation for the workers. The salary data of the company also reveals more than 50% longer-
working-year workers but limited ability in a few complex categories obtain higher salary than the young
flexible workers mastering more complicate production lines do. The salary policy without skill measure
factors makes the workers prefer stable and simple production lines. Therefore, the root cause is that the
lack of extrinsic motivation for the workers to join the training and upgrade their capability.
In chapter 5, there are two alternative solutions developed from the recommendations in
academic research and practical application evaluation: piece-rate scheme combing the level of
products’ complexity and incentives for workers’ capability. After survey by both relevant management
teams and workers as direct beneficiaries, incentives offer for workers’ capability is preferred. Due to
limited time and resource of this business project, it is unable to pilot the two solutions in the reality to
evaluate which options are better. Nevertheless, the survey results of both groups selecting the solution
of incentives for workers’ capability partly prove its effectiveness and practical in comparison to the piece-
rate scheme. The business project then develop an action plan and timing to support the execution.
7
Acknowledgements
I would like to express my special thanks of gratitude to my professors Dr. Quan Tran, Dr. Thu
Phan and other lecturers for their dedicated guidance and support in completing my project.
Moreover, it is my gratitude to Mr. Thuan Nguyen – Organizations Development Manager – of
for backing me to obtain primary data from statistics data.
Last but not least, I would like to extend my gratitude to Western University Committee for
providing me the scholarship to pursue this MBA program.
8
1. Business context
1.1 Company overview
was founded in 1995 based on a joint venture between Vinasugar II under the Ministry of
Agriculture and Rural Development of Vietnam and ABF (Associated British Foods) Group. Using the Global
AB Mauri Group's advanced technologies, which have been used in 50 countries around the world,
provides yeast and baking ingredients for making bread and other baked goods for both domestic and
export markets such as Malaysia, Thailand, Myanmar, India, etc.
From 1995 to 2016, concentrated their production on yeast as the major player in yeast
supply industry. In June 2016, got the business license to expand their product family to bakery
ingredients (BI) with diversified products classified in the categories: bean paste, cake gel, kularome,
mauritec, dry BI. Their target customers are baking product distribution, bread bakehouse, bakery super
markets, premium hotels as the B2C customers and confectionary production companies as the B2B ones.
Besides office branches in Ho Chi Minh, Ha Noi and Da Nang, ’s factory is located in Dong
Nai in which both yeast and BI product families were produced there. Since July 2019, BI production has
been relocated to Long An while yeast is continued to manufacture in Dong Nai site.
1.2 Organization structure
The organization structure is stipulated as below:
9
Figure 1.1: ’s Organization structure
South & Southeast

Asia Managing
Director
Operations Director
(Vietnam)
Customer Research &

Manufacturing Business Support
Management Development
Quality Wastewater Engineering Human

B2C Sales Production Yeast R&D Supply Chain Finance & IT
Management treatment Services Resources
Finance
Yeast Quality
B2B Sales BI R&D Engineering Procurement Total reward planning &
Production Assurance
analysis
Finance
Quality Health & Organization
Marketing BI Production Planning Busines
Control Safety Development
Partner
Logistics &
Facility Admin Accounting
Warehouse
Legal IT
10
For the topic of direct labor productivity of bakery ingredients, the focused department is BI
production in manufacturing function. The proposed topic is also involved in the partnership departments
of BI production such as Quality Management, R&D, Engineering, Supply Chain, HR and Finance.
1.3 Business situation
The current structure of BI Production Team is below:
Figure 1.2: Organization chart of BI Production Team
Operations
Director
BI Production
Manager
Production
Team Leaders
Full-time Outsourcing Maintenance

Cleaner
workers workers worker
Before June 2019, BI Production Team did not have outsourcing workers, and all direct workers
were full-time. In June 2019, would like to temporarily reduce the factory capacity to stabilize the
wastewater treatment to follow the new standards of local authority. The company, therefore, has rented
the new production site in Long An and transferred BI production to this factory until the Dong Nai factory
is back to normal capability.
To ensure the BI production continuity, offers full-time BI workers to move to Long An for
production work and return their home on weekends. Their accommodation, meals and travelling in Long
An are settled by the company. Moreover, more outsourcing workers are recruited to fulfill the production
line. The two sources of labor, full-time and outsourcing, are maintained during the time of renting Long
An site.
11
Table 1.1: Average headcount of BI production workers
(The fiscal year of follows the ABF’s corporate rule. A fiscal year is from the September to
the August in the following year.)
Average headcount Fiscal year 2018-2019 (F18/19) Fiscal year 2019-2020 (F19/20)
(Sep’18-Aug’19) (Sep’19-Aug’20)
Sep’18-May’19 Jun’19-Aug’19
Full-time workers 59 46 28
Outsourcing workers 0 11 32
Especially in the peak season of Mid-autumn from annual June to September, hires a
number of temporary outsourcing workers to meet the seasonal orders.
Different from yeast production with automation system concentration, BI production is labor-
intensive and involving the direct workers in all stages of process. The production operation is 24 hours
per day with the mechanism of 3 shifts – 4 groups to rotate their schedule. The above-mentioned structure
of BI Production Manager to be responsible for all performance of BI production team by managing the
Production Team Leaders who supervises and controls the workers as their subordinates.
2. Problem context
2.1 Symptoms
The key indicator in the performance of BI Production Team is the productivity of direct workers. The
labor productivity of direct workers has experienced the decline. It is calculated by total production
volume divided by total working hours.
Figure 2.1: Productivity of BI production workers in F18/19 and F19/20

29.52
35.00
26.14
26.01
25.25
25.21
24.87
24.24
Production volume per
22.83
30.00
22.33
working hour (tons)
18.06
25.00
17.60
16.20
16.14
15.55
13.84
20.00
11.86
11.76
11.49
11.44
11.43
10.72
10.15
15.00
7.32
5.78
10.00
3.65
5.00
0.00
May'19
May'20
Sep'18
Dec'18
Jan'19
Apr'19
Feb'19
Mar'19
Dec'19
Jan'20
Feb'20
Mar'20
Apr'20
Aug'19
Sep'19
Aug'20
Sep'20
Oct'18
Jul'19
Oct'19
Jul'20
Nov'18
Jun'19
Nov'19
Jun'20
12
The quantifiable productivity was stable at around 22 to 29 tons of finished goods per working
hour from September 2018 to May 2019. Then, there was a sharp drop in June and July 2019 which were
also the time of factory relocation to Long An site. The period from August 2019 to present witnessed
lower productivity of direct workers in comparison to the labor productivity before relocation.
2.2 Symptoms validation
After analysis of overall productivity of all BI workers, the quantifiable productivity is cascaded
into different worker sources.
Figure 2.2: Productivity of overall factory, full-time and outsourcing workers in F18/19 and F19/20 29.52
35.00 Factory
Production volume per working hour (tons)
26.14
relocation
26.01
25.25
25.21
24.87
30.00
24.24
22.92
22.83
22.33
21.76
21.31
20.71
25.00
18.15
17.44
17.37
17.15
16.05
15.75
20.00
12.31
12.08
10.11
15.00
5.78
10.00
3.65
5.00
0.00
Productivity of overall factory Productivity of full-time worker

Productivity of outsourcing worker
The productivity of outsourcing workers was always lower than the one of full-time workers
because they needed time to learn new process. The more serious symptom is the effectiveness of full-
time workers after factory relocation. The project focuses on the decline in performance of full-time direct
workers in BI production.
Except the low production for factory movement in Jun’19 and May’19 as well as in April’19 due
to Covid-19 pandemic, the productivity of full-time workers was around 22 to 29 tons per month before
the site relocation, then dropped by 22% to about only 17 tons monthly in the period of August to
September 2020.
13
The lower effectiveness of full-time workers is not only reflected in quantity measurement as productivity,
but the quality problem of defective products is also taken into consideration.
Figure 2.3: Volume of defects products by full-time workers in F18/19 and F19/20
Defective product volume (kg)

9000 8442
Factory relocation
8000
7000
6000
5000
4000
2592
3000 2486 2467
1805
2000 1485
980 1032 792 944 1030
1000 200 72
0
0
The volume of defective products rejected by quality control surged after factory relocation. There were
almost production errors occurring 8/13 the months after factory relocation, accounting for 61.5%. It
could be seen the significant increase up to nearly 8.5 tons of production volume rejected by quality
control in peak season for Mid-autumn, from May 2020 to September 2020, in comparison to the same
timeframe of 2019.
As the result of decreasing quantitative and qualitative index in production, the KPI performance of bakery
ingredients production team reflects the negative growth of direct labor effectiveness.
Figure 2.4: KPI performance review of direct labor in F18/19 and F19/20
F18/19 F19/20
Substantially
6.67% 6.67% 6.25% above target
21.88%
Above target
On target
Below target
86.67% 71.88%
Substantially
below target
14
The KPIs of direct labor are measured in their productivity, defective products and behaviors in
discipline, cooperation and innovation. At the time of performance review (annual September), the
number of full-time workers dropped by nearly 15% from F18/19 to F19/20, which were 49 and 42
employees respectively, but the proportion of “below target” staffs tripled in F19/20. Though the KPI
results were adjusted with the impact of Covid-19 pandemic, over one in ten employees performed less
effectively due to unsatisfactory productivity and non-defect commitment.
All of the above-mentioned evidence shows out the symptoms of the decline in the effectiveness
of full-time BI workers after factory relocation. Such a decline causes the unit labor cost dramatically
rising, which may result in lower profit margin or increasing unit price to cover the cost of labor as inputs.
Moreover, the upsurge of QC rejected products due to defects is also the warning signal to the production
labor for their impacts on ’s branding.
3. Problem identification
After the stage of symptom analysis, the intake meetings and interviews are conducted with
relevant stakeholders to get their insights of possible problems for the decline in the effectiveness of full-
time BI workers after factory relocation. The interviewees are involving leaders like Operations Director,
Bakery ingredients (BI) Production Manager, HR Manager, Assistant Planning Manager, QA/QC Manager
and direct production people such as Production Team Leader, Full-time Worker, Outsourcing Worker.
From the information of relevant stakeholders, the problem mess is developed as the initial cause-
and-effect tree. Then, the theory-informed approach is applied to categorize the causal factors to display
the updated cause-and-effect tree.
3.1 Problem mess
The problem mess is developed from the information provided by the interviewees joining the
intake meetings. In the questions of the possible reasons leading to the decline in effectiveness of full-
time direct labor since factory relocation, the stakeholders have different answers based on their
perspectives.
One of the first changes which are visible in worker movement along with factory relocation is the
well-being of full-time workers from Dong Nai to Long An. Some interviewees in Production Department
mention the possible reasons of the adaption of workers to new place. “Living far from home, workers
have to live in hostels and take care of their own without their family’s care” said by a full-time workers.
15
Moreover, it takes time and physical effort to travel back and forth. The BI Production Manager claimed:
“With these challenges, the direct workers are concern whether new benefit package is sufficient to
compensate for their trade-offs in movement.”
Several managers expressed their concerns about the lack of labor to fulfill the complex
production lines. “Because of the factory movement, many key workers who are skillful in complex
production lines resigned, which causes lack of key operators in the process of complicated products like
bean paste, cake gel, etc.” said by Production Team Leaders. In regard to the remaining retainable
workers, the Operations Director pointed out: “Ineffective skill training during last year led to the lack of
advanced-skill workers to perform complex category process.” And full-time direct workers blamed that
hectic production plans did not allow them to have time for training new products. Regarding the new-
recruited outsourcing workers, the full-time workers told the examples of the inexperienced outsourcing
workers were brand new, so they needed time to learn and performed basic tasks only. Furthermore, the
Organizations Development Manager mentioned: “The difficulty in training both remaining full-time
workers and new-hire outsourcing workers is the lack of clear and detailed work instructions in some
complex process.” The Quality Manager adds in further reason is that several stage metrics are not
quantifiable, just based on the senses and experience of the workers, so it is challenging to instruct new
learners.
The elements of other inputs rather than labor in production are also mentioned as the reasons
of low productivity as the lack of inputs lead to interruption in production line, and the result is decline in
productivity. The outsourcing workers talk about the electricity interruption, and the direct workers tell
the examples of unstable beam by the boilers. The Assistant Planning Manager explained: “The beam
instability is due to ’s dependence on the beam source of renting factory in Long An.” The BI
Production Manager stated: “The time of delivering the materials from Dong Nai warehouse to Long An
warehouse cause inadequate inputs for production in flexible changes of production plan; as the result, it
requires time to wait for the materials for production.”
16
Figure 3.1: Initial cause-and-effect map of
3.2 Potential problems and main problem validation
After identifying potential problems of the declining effectiveness of full-time workers, the author
continues to collect theory-informed information and the company’s data to validate each problem.
With the information provided by above-mentioned stakeholders, the determinants of

production labor productivity are referred and categorized by theory-informed approach. Specializing in
manufacture industry in Asia, the journal of Dr. Lawrence Lau and his co-authors 1 implements the TFP
measurement framework to research the relationships of total output with the production factors in
relocation situations: labor, factory space, materials inputs, utility and capital. In addition, Fallahi, Sojoodi
and Aslaninia 2 also developed the model of determinants on productivity in manufacture with not only
several similar elements claimed by Dr. Lawrence Lau like firm size, physical capital of firm, but also more
17
specific labor-related factors such as workers’ capability and well-being. Because the ’s factory size
is not mentioned in the interview as well as the data of renting contract shows similar size of production
zone, the firm size as determinants of labor productivity is eliminated. Also, the physical capital of firm
and firm ownership is unchanged since all machinery, equipment was shifted from Dong Nai site to Long
An site, and the there is no amendments of firm ownership or management board. As per the reference
of labor productivity theories in factory relocation by Lau et al (2000) and Fallahi et al (2010), the other
reasons mentioned by the stakeholders are grouped into: workers’ well-being, worker’s capability and
production materials inputs.
3.2.1 Changes of workers’ well-being for adaption to new site
Workers’ well-being is highlighted as one of factors influencing the workforce productivity in the
international “Towards Better Work and Well-being” conference with more than 190 scientists from 30
countries. “Well-being is a summative concept that characterizes the quality of working lives, and it can
be seen as a major determinant of productivity at the individual, enterprise and societal levels” concluded
by Schulte and Vainio 3. Reflecting in the case of , the workers’ well-being factors like housing,
travelling after relocation is also mentioned as the affecting elements to workers’ productivity.
In the transition period of June and July 2019, HR Department came up with the proposal for new
compensation and conducted several site checks to settle the hostels, meal supply, security
accommodation, travelling backwards and towards from La Nga and Long An. The new compensation
package for each full-time worker are listed as below table:
Table 3.1: List of compensation for full-time BI workers relocating to Long An factory
Compensation for full-time workers Compensation for full-time workers

before factory relocation (Dong Nai after factory relocation (Long An
factory) factory)
Monthly wage 44.9% higher than the minimum wage 44.9% higher than the minimum wage of
of Dong Nai province Long An province
Meals 1 meal per shift All daily meals (breakfast, lunch, dinner)
Accommodation Not available Settled hostel (5 workers/ family room)
Clothing 3 uniform sets per year 3 uniform sets per year
Specific personal protective equipment Specific personal protective equipment
18
Travelling Self-travelled to factory Car transfer to and back from factory to
hostel
Weekly shuttle bus from Long An to Dong
Nai at weekends
Health Clinic care at the factory Clinic care at the factory
Entertainment Company events TV equipped at the hostel
Mini-gathering in occasions
Company events
Although the monthly wage remains unchanged after factory relocation, the salary offered by
is 44.9% higher than the minimum wage in both Dong Nai and Long An province which have the
same regulated minimum wage level. The compensation package is upgraded with full cover of meals and
accommodation for full-time workers living in Long An. According the Maslow’s hierarchy needs 4, the two
basic bottom level of physiological needs and safety needs are satisfied by the compensation and benefits
package. At the higher level of love and belonging needs, the company attempts to arrange production
workload and shuttle bus for the workers for and back to Dong Nai to visit their family at weekends.
In the last May, conducted the employee satisfaction survey and received quite positive
results of people adaptation to new life. Some challenges of living far away from home are undeniable,
but the company benefits and workers’ long-term commitment to are important factors to retain
current full-time workers despite factory relocation.
Figure 3.2: Survey result of employees’ satisfaction of relocation
Very unsatisfied Unsatisfied Satisfied Very satisfied
20% 19% 13%

35%
64%
77% 84%
62%
16%
3% 4% 1% 3%
Salary Accomodation Meals Common well-being
19
More than two-thirds of workers satisfy with all updated elements in the benefit package after
factory relocation, namely salary, accommodation, meals and common well-being. There was 84% of full-
time workers doing the survey, so the population sample reflected most opinions of ’s workers.
Although the company still needs to continue improving well-being of full-time workers to
compensate for their temporary relocation, especially satisfy the two upper layers in Maslow’s hierarchy
needs, both theory and survey result reveal that the changes of workers’ well-being for adaption to new
site are not the main problem causing declining productivity of ’s workers.
3.2.2 Insufficient supply of materials inputs and utilities
In the research of the impact of relocation on total productivity, Kwong, Lau and Lin 1 proved the
relationship of materials inputs and utilities with the productivity in the model. The lower the usage of
workers in materials inputs, the more decreasing the individual productivity is. Besides, the shortage of
utilities, including the operating, repair and maintenance of fuel, electricity and water, can cause
interruption in the production lines, or sometimes defects in quality also.
In , one of the problems mentioned by Production and Planning is the insufficient supply of
other inputs, which causes waiting time for enough materials of each production batch or lengthens work-
in-progress status.
Table 3.2: Record of production interruptions due to insufficient supply of inputs excluding labor in
F18/19 and F19/20
Average frequency Insufficient volume or Number of production

(times) per quarter interruption time per batch delays per
quarter quarter
Raw materials 6 3,600 tons 16
Chemical 3 270 litres 6
Packaging 8 60,000 pieces 8
Beam 3 250,000 m3 2
Electricity 0.5 2.3 hours 4
The insufficient supply of any inputs leads to delays of production batches, which drops the daily
production volume on the date of issues.
20
Because the main warehouse is still located in Dong Nai for all product families, the BI materials
including raw materials, chemical and packaging take more time to deliver and prepare in Long An with
limited warehouse depot space. A weighting team with 4 workers is formed in Dong Nai warehouse and
assigned to be well-prepared for all materials in accordance with weekly production plan by Planning
Team.
In addition, the issues of beam and electricity is owing to the reliance of the supply on the renting
site; so it requests back-up solutions for the supply. Since the last peak season of July 2020, unstable beam
and electrical interruptions are solved by Engineering Services Department with solutions of equipping
electrical generator machine and hiring one more boiler worker to ensure the beam supply.
Planning and Engineering Services departments are aware of the production interruptions by
inputs excluding labor and working on the projects to handle these issues. The above-mentioned actions
are in progress and recorded with some improvements, so the problem of insufficient other inputs supply
is not selected to solve in this business project.
3.2.3 Limited labor capabilities in complex production lines
Labor capability is conceptualized as not only a measurement of labor’s knowledge and skills, but
also abilities and other characteristics that different from average performance 5, so the labor capability
is found to reflect workers’ perceptions of productivity and potential growth 6. The literature like Bontis
& Serenko (2007) 6, Schmitt, Borzillo & Probst (2012) 7
highlighted the loss of critical employees’
capabilities ay lead to deteriorating quality, productivity and effectiveness of the firm.
According to BI Production Manager and Production Team Leaders, all three groups of workers,
namely old, current and new, affected the production output. Firstly, owing to the relocation, many
workers, some of whom were highly experienced, refused relocation and chose to quit their jobs.
Secondly, the remaining retainable workers are the core group of workers, but their capability is limited
in complicated production lines due to ineffective training. Thirdly, the group of new hired outsourcing
workers needed time to learn.
3.2.3.1 Resignation of old workers due to relocation
The undeniable objective problem is that the site relocation caused several full-time workers
leave the company because they do not want to work far from home. Some of them are highly
experienced in the process of complex product categories which there are not many workers can perform.
21
Figure 3.3: Full-time workers leaving due to site relocation
Intermediate
skill
15% Beginner
Leavers
Retainable skill
35% Advanced
workers 9%
skill
65%
11%
Among the 35% leavers, there were 15% of intermediate skills and 11% advanced skills. Although
the facts of already-resigning workers due to site relocation cannot be changed at this moment, it should
be a noticeable signal of the decreasing capability for whole production team because of the shortage in
advance and intermediate-skilled workers.
3.2.3.2 New-hired outsourcing workers taking time to learn
In accordance with the learning curve theory initiated by Hermann Ebbinghaus in 1885 8, direct
labor hours of each unit of production drop during the time of repetitive tasks. In steep learning curve,
the learning of the startup of production is difficult, but then the productivity sharply increases. The new-
hired outsourcing workers, therefore, need time to learn. Especially for complex production lines, the
outsourcing workers find it challenging at the start, as the beginning of steep learning curve, but then the
productivity will significantly improve. The on-boarding training for outsourcing workers is on-progress of
pilot in production team, so this problem is not focused in herein business project.
3.2.3.2 Low-skilled current workers due to ineffective training
Besides the objective reason of relocation, most of the remaining full-time workers cannot
enhance their capability with more complex or various processes. Lee, Phan and Tan (2003) 9 revealed
that the individual labor capabilities are a subset of human capital typically attained through training.
According to the framework of the causal relationship between training and firm outcomes by Tharenou
et al. 10, effective training leads to HR outcomes in attitudes and motivation, behaviors, human capital,
then impacts on organizational performance and productivity, and finally consequence in profit and
financial indicators. In context, the reason of dropping productivity and performance claimed by
22
production team leaders is that ineffective training for full-time workers unable to lift their knowledge
and skills up.
Table 3.3: Skill assessment of workers capability after training in F18/19 and F19/20
Before site relocation After site relocation Successful

trainees
Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 from
Q3’19 to
Total full-time workers 73 72 75 49 49 47 46 42 Q3’20
Advanced
Skillful >= 06/10 categories 11 12 12 9 9 9 9 10 1
Intermediate
Skillful 03-05/10 categories 13 14 11 6 6 7 7 7 1
Beginner
Skillful <3 categories 49 46 52 34 34 31 30 25 -
Total outsourcing workers - - - 36 40 53 72 110
Advanced
Skillful >= 06/10 categories - - - - - - - - -
Intermediate
Skillful 03-05/10 categories - - - - - 1 - 2 2
Beginner
Skillful <3 categories - - - 36 40 52 72 108 -
After one year, production capability cannot fulfill as same as the capability before site location
although the total headcount rises. Only one more advanced and intermediate full-time workers are
successfully trained and upgraded skills in one year. As all new outsourcing workers have to start as
beginner to learn new process and need time to upgrade their skills, the advanced and intermediate
skillful workers are inadequate to fulfill as the key operators in each category process. The skill training is
weak to upgrade the full-time workers’ capability. The later part of papers shows more details of causes
of this problem and alternative solutions to solve it.
3.3 Problem justification
International Labor Organization stated that “Skill development is central to improve

11 12
productivity” . And Amabile concluded that a well-trained and skilled workforce strengthen the
capability for both individual and organization. Ineffective training in leads to insufficient skills of
workers, as the result, low production capability finally.
The BI production in consists of 10 categories in which several are complex product

categories requesting intermediate or advanced workers in key phases.
23
Table 3.4: Production headcount per batch for each product category
Product category Current headcount Needed headcount Surplus/ Shortage

Bean paste 7 12 -5
Kularome 12 14 -2
Cake gel 8 12 -4
Custard 9 10 -1
Sugar syrup 10 12 -2
Fruit topping 14 18 -4
Tin grease 17 15 +2
Baking powder 16 15 +1
Sponge mix 17 12 +5
Dry BI 17 16 +1
In the current production operations, the total capability of workers is lower than the required
headcount to optimize workers in all categories. For simple product category like Tin grease, Baking
powder, Sponge mix, Dry BI, the workers’ skills meet the demand of production process, even have extra
workers for backup. However, the complex product categories like Bean paste, Kularome, Cake Gel, Fruit
Topping lack of skillful workers to optimize human resources in BI production. Such complex categories
have higher profit margin, so the training to lift up workers’ skill in these categories is essential.
From above justification, it is necessary to find solutions in improving training to upgrade full-time
workers capability for business demand in 2021.
24
Figure 3.4: Updated cause-and-effect tree of
4. Cause validation
After identifying the problem of ineffective skill training for full-time workers, the author research
theory-informed and validate the potential causes of fruitless training for workers in .
In the article of organizational behaviors, Chimote 13 concludes that training is conducted not only
to enhance and boost employees’ performance, but also to develop the human resources to meet the
organizations’ current as well as future needs. With these improvements, organizations can increase
productivity, have a greater workforce flexibility, have a motivated workforce and also improve the quality
of the final product or service. In this era of continuous learning and development, effective training,
therefore, is able to bring along the competitive advantage to company 14.
25
In accordance with the research by Sookhai and Budworth 15, the training effectiveness, especially
in skill training transfer, is influenced by four factors: trainee’s characteristics, trainee´s willingness to
upgrade capability, training design and work environment. The details of each factor are described in
below fishbone map.
Figure 4.1: Fishbone map of cause validation
4.1 Potential causes

4.1.1 Unproper trainees’ characteristics
Trainees’ characteristics is considered as their ability or skill, motivation and personality factors
16
. Multiple researches by Gist et al. (1991) 17, Mathieu et al. (1992) 18, Towler & Dipboye (2001) 19 single
out these factors to observe their influence on training outcomes.
Low conscientiousness: Conscientiousness is personality trait of wishing to do their job or duty

diligently and thoroughly. Trainees with high conscientiousness “are more dependable, well-organized,
persevering, and motivated to excel their job” 20. The lower the conscientiousness the trainees have, the
26
lower the training outcomes tend to be in comparison with the trainees with such higher personality trait
21,22
.
Low self-efficacy: Gist et al. 17 defines self-efficacy as the individual’s belief or confidence that he/
23
she can successfully meet training requirements and master training-program contents. Saks proves
self-efficacy plays important roles in enhancing training effectiveness and transfer process. Self-efficiency
can be considered as one of pre-training motivations 24. Individuals perceiving themselves as being highly
efficacious will put adequate effort to produce satisfactory outcomes, while those who perceive
themselves as having low self-efficacy are more likely to not put enough endeavor and consequently fail
on the task 25.
4.1.2 Trainees’ unwillingness to upgrade their capability
When trainees’ characteristics are satisfied for training, the reason of their unwillingness to join
training is motivation. Noe and Schmitt described motivation to learn as the trainees’ desire to learn new
knowledge/ skills/ abilities and then apply into the jobs 26. Motivation includes intrinsic (I) and extrinsic
(E) motivation in all stages of training.
Figure 4.2: Stage model of motivation in training and learning activities 27
Motivation during
Motivation to training Motivation for
participate in transfer
Goal striving (I/E)
training Goal choice (I/E)
Goal type and Goal
Goal choice (I/E) orientation (I/E) Person
Person charateristics (I)
Self-regulation (I)
charateristics (I) Organizational
Self-monitoring (I)
Organizational climate (E)
climate (E) Self-evaluation (I)
Self-reaction (I)
Lack of intrinsic motivation: Intrinsic motivations originate from within the individuals, for the
28, 20
internal feeling of satisfaction for learning , and as the result in enjoyment of increasing one’s
competency 31. Lack of extrinsic motivation: Extrinsic motivation encourage trainees for attainment of
external reward (i.e monetary incentives, awards) 30. The extrinsic motivation is also from organizational
climate which relates to trainees’ perceptions regarding company’s rules and policies about training as
well as work environment 31 discussed in the later part.
27
Depleted goal orientation: Goal orientation consists of leaning goal orientation and performance
goal orientation. According to Seijts and Latham 32, trainees not driven by learning goal orientation are
unwilling for training, especially skill training, with more challenging opportunities to enhance new skills
and expand their capabilities. And individuals with low performance goal orientation do not desire to
demonstrate their competencies and impress others or would like to be rewarded by external recognition
for their attainment of goals 20. Therefore, trainees with depleted goal orientation do not pay enough
attention and dedication to training; as the result, it effects training effectiveness.
4.1.3 Ineffective training design
In previous research, several training design variables were found to influence the training
effectiveness such as level of suitability of training contents relevant to the needs, stimulus variability in
instruction, teaching of general principles, conditions for practice 16.
Unsuitable contents: The content of the training programs means that it must be understandable
and applicable to the learners and the materials are consistent with the proposed course, learning
objectives, and outcomes 33. McNamara 34 pointed out that training content is important to select training
activities that will definitely improve the teaching and learning process. By selecting the most suitable
materials, trainees may be able to maximize their skills, knowledge, and attitude toward the training
program. Unsuitable contents are waste of time and cost of both trainers and trainees.
Inadequate facilities: Training facilities in production are not limited to equipped rooms,
35
laboratories, demos for training . Inadequate facilities negatively influence on content delivery or
physical distract to trainees, consequently, on training effectiveness.
Poor training/ coaching styles: According to Silverman, another factor that may affect training
effectiveness is the presentation styles of trainers. Beside delivering the contents, the main goal of the
trainer is to motivate the trainees and increase their desire to learn new ideas and skills. This result cannot
be achieved if the training or coaching styles are not lively and interesting enough with multi-
methodology.
Insufficient conditions of practice: Baldwin and Ford 16 listed the conditions of practice including
massed vs. distributed training (questions the fact of whether or not training should be divided in
segments), whole vs. part training (questions the efficiency of practice of a training with all the material
as opposed to practice on one part at a time), and over learning (refers to the process of exposing trainees
to continuous practice).
28
4.1.4 Unsuitable work environment
Work environment does not only directly affect training effectiveness, but also on trainees’
motivation and then their performance as discussed in part 4.1.1.
Weak organization support: Organization support means how supportive an organization is and
how trainees’ perceived training utility might change because of their perceptions of organizational
support. According to the existing theory, when employees do not perceive that their contributions are
valued by their organizations, it is likely that they may not put enough effort that would benefit the
organization and therefore may also not put enough effort in perceiving the usefulness of adopting a
trained method 36.
Unproductive supervisor support: Supervisor support is a work environment variable that affects
training 16 and is positively related to trainees ´motivation to learn and transfer training 37. A supervisor
can encourage trainees to get the most out of training by doing modeling behaviors, encouragement to
attend, spare specific schedule, rearrange workload 12. Unproductive supervisor support demotivates
trainees and unable to create the conditions for maximizing training effectiveness.
Lack of performance feedback: Baldwin and Ford 16 defined feedbacks as all information given
to trainees concerning their performance. Lack of post-training interventions like goal setting and
feedback can negatively influence (decrease) trainees´ motivation to transfer the knowledge acquired
in training back to the job 37.
4.2 Cause validation
Thanks to the theory-informed approach, the author validates the causes of ineffective
training for ’s full-time workers by multiple methods: observations, the survey of full-time
workers, training feedback results, focus group interview of stakeholders.
4.2.1 Ineffective training design
As per the training process in , each post-training action is to request trainees to do the
survey for their satisfaction of training. The author collects the feedback results of training after
relocation relevant to upgrade their capability like production process training, food safety
refreshment, product category update, on-the-job training sessions.
29
Figure 4.3: Statistics for ’s feedback of training design after relocation
5 - Very satisfied 4 - Satisfied 3 - Acceptable 2 - Unsatisfied 1 - Very unsatisfied
9% 8% 8% 7%
28% 27%
32% 34%
27%
49%
63% 54%
33%
17%
4%
Facility Training contents and Training/ coaching styles Conditions of practice
materials
The training design factors of facility, training/ coacher styles and conditions of practice is
quite satisfied by trainees with only less than 10% of unsatisfied. However, the training contents and
materials with up to 40%, most of whom are in upgraded process guiding courses or on-the-job
training sessions. In the intake interview of managers, QC manager mentioned the on-job-training
materials or process training in practice for complicated production lines was sometimes difficult to
deliver because “is lack of detailed work instructions for complex product category processes.
Many measurements are not quantifiable to instruct the new workers.” Therefore, the training
materials are not efficient enough for knowledge transfer demand.
Lehtimaki 38 claims that knowledge capital can be considered a raw material of production and is
one of determinants of the firm’s performance. Among different types of knowledge capital, the
functioning of processes can be measured by “share of documented processes of all processes or
proportion of the critical processes with the procedural document”. According to McKinsey and Company
39
(2005) , organizational knowledge capital transfer impact on the firm’s performance in short-term
events like relocation. In relocation situation, specifically, knowledge capital transfer is crucial to
maintain production productivity, especially in the process of complex product categories.
30
Figure 4.4: Proportion of critical process with procedural document in
Undocumented
process
6%
Lack of
Documented but Lack of work quantifiable
Fully
intransferable instructions metrics
documented
process 19% 51%
process
70%
24%
Although there is the minority of undocumented process, 70% of critical processes are
documented but untransferable because it is lack of work instructions or quantifiable metrics. The
shortage of 51% quantifiable measurements for each production step causes difficulties to build clear
detailed training materials to upgrade the skills of full-time workers. Therefore, though the total
headcount is similar, there is still a shortage of skillful workers who can well performed in the production
process for complex categories since the knowledge sharing or guiding is not easy.
In fiscal year F20/21, launches the project of documentation for all critical process with
quantifiable metrics by R&D Department and Production Process experts. The problem of unclear training
materials is in progress of handling, so it is not focused to seek for solutions in this business project.
4.2.2 Unsuitable work environment

In the focus group interview of 7 workers with multiple skill levels, groups and category
production lines, the author has a quick survey about their opinion of work environment as an
element in training. 7/7 full-time workers claimed that they were satisfied with the organizational
support and performance feedback. “Our company has public training policy and process for
employees and fully supports training activities in the production” or “We appreciate the company’s
commitment of full-paid wage for any training dates of the workers.” – said by workers. They also get
performance review and feedback by their team leaders and production manager informally at least
once a quarter and formally every six months.
31
Regarding supervisor support, some workers mentioned the supervisors organized the
effective in-the-room training as HR request, but there is still the lack in time for on-job-training to
upgrade skills because the production plan are hectic. Nevertheless, in the statistics of planning team
in fiscal year 19/20, only 14 work weeks from the 25th to 39th week in high season requested 7 full
working days, while the remaining weeks are slotted at least half spare day in six days per week for
urgent order production or any materials delays. Only more than half of the number of spare days
per year are spent for production when the workers can take annual leave or off-day. Those no-
production or slow-production dates (not full production capacity) should have used for on-the-job
training. Therefore, the facts and figures prove that the hectic production plan with no time for on-
the-job training is not the cause of ineffective training.
4.2.3 Unproper trainees’ characteristics
All current workers have more than one year of experience. When they firstly joined
, they were able to learn BI production process to fulfill their roles and conduct in practice until
now, which proves their self-conscientiousness and self-efficacy in learning. 100% of current full-time
workers are accessed to be able to operate at least one production lines and support simple tasks
like packing, labelling, etc. in the other lines. Full-time workers are accessed to have average desire
to fulfill their duty and confidence to participate in training as well as apply knowledge in real job, but
there is not strong motivation to enhance these characteristics, which is continued to mention in the
part 4.2.4.
4.2.4 Trainees’ unwillingness to upgrade their capability
In the observation of skill-upgrade training, the author notices the full-time workers, especially
long-term labor with more than 05 years of experience, are not willing to learn more complex production
lines.
Figure 4.5: Willing vs. unwilling behaviors of full-time workers to upgrade their skills
Join all training but poor

attitude in practice
46%
Unwilling to
upgrade skills
66%
Willing to upgrade
34% Reject to join
4% Just pick low-risk
categories…
32
Only 34% workers are willing to upgrade their skills with positive attitudes in training. Among 66%
of unwilling labor, only 4% frankly told their supervisors that “I am not young enough to learn and
successfully acquire new knowledge, but I will try to master my current production lines for higher
productivity.” The observation also reveals the poor attitudes of full-time workers in training practices or
unavailability to get transfer for complex production lines.
Discussing with production team leaders, these behaviors can come from the lack of extrinsic
motivation for workers to upgrade their skills because their wage is based on the number of working hours
and their seniority at .
Figure 4.6: Current salary components of ’s full-time workers
Wage
Number of
Seniority in components
working
of full-time
hours
workers
The model shows no salary impacts by the number of production lines the workers can master.
The salary data of HR team also reveals that nearly 50% of longer-working-year workers but limited ability
in a few complex categories obtain higher salary than the young flexible workers mastering more
complicate production lines do.
Although there is the worker ranking, it is only used to assign them into suitable production lines
for planning purpose only. The labor ranking, in another word, is based on the number of production lines
the worker can master. Beginner is the workers operating less than 03 production lines, intermediate
labor must be able to perform 03-05 production lines, and the advanced one has to master more than 06
production lines. Currently, the labor ranking is not public and recognized to all full-time workers or
considered key factors in salary scheme.
Such irrational facts show the lack of extrinsic motivation to upgrade workers’ capability. From
the perspective of work behavior research, extrinsic motivation (rewards) has been shown to significantly
affect worker’s willingness and participation in training 40. The ineffective extrinsic motivation can lead to
depleted goal orientation 20.
Hence, the lack of extrinsic motivations – particularly, the incentive scheme for mastering as many
as complex production lines- is the root cause of ineffective training to upgrade workers’ capability, as the
result, decline in productivity after site relocation. The latter part of this business project will focus on
alternative solutions for the issues of low extrinsic motivation in workers’ training.
33
Figure 4.7: Updated fishbone map of cause validation
5. Solutions proposal
Following the root cause identification of inadequate extrinsic motivation for workers to join skill-
upgrading training, the alternative solutions concentrate on the options of extrinsic motivation methods
for full-time workers. In theory-informed, an extrinsically motivated employees are motivated when they
get positive rewards like appraisals, bonus, raise, promotion 41, or they may perform their work in order
to avoid punishment 42. In the case of , relocation causes workers to suffer from living far from
home, and the company always want to appreciate their commitment to the company for more than one
year without knowing the exact time the factory is back to Dong Nai again. Therefore, the solutions should
focus on the positive rewards as extrinsic motivation to retain full-time workers instead of punishments.
According to Ittner and Larcker (2002) 43, there are two types of extrinsic motivation rewards and
incentives: monetary incentives (such as bonus, allowance, company car, etc.) and non-monetary
incentives (such as recognition, praise for achievement, hanging picture on best employee wall, etc.).
34
Human Resources and Production Departments in is working in the recognition project for best
worker of the month with their skill and productivity as non-monetary incentives. However, in the
behavior research, non-monetary scheme “is sufficient enough only to supplement the financial
incentives as non-financial incentives are not motivation enough as standalone incentives” (National
Productivity Council, 2015) 44. Therefore, among the incentive systems for skills recommended by Koike
(1994) 45, the solutions focus on monetary incentives with below options based on incentive types apart
from current hourly wage scheme applied in :
Option 1: Offer piece-rate scheme combining the level of products’ complexity
Option 2: Apply incentives scheme for workers’ capability
5.1 Alternative solutions
5.1.1 Piece-rate scheme combing the level of products’ complexity
46
According to Raith (2008) , an employee obtaining higher level of specific knowledge and
47
productivity ought to be compensated more by output and less by input. Hwang et al. (2009) also
extends the Raith’s model and shows the value of knowledge sharing leading to greater emphasis on
output measures. The base ray mechanism for workers, blue-collar employees, can be the piece-rate
which is based on the quantity of production output 48. In the case of , the company should change
from fixed hour wage to piece-rate combining the level of products’ complexity to motivate full-time
workers to be willing to participate in skill upgrading training.
The piece-rate scheme offers the full-time workers’ wage based on the output quantity they can
produce. To encourage them to learn and perform in complicated production lines, the company should
define specific coefficient for each product with their complexity instead of equally counting the same
output for all products. The more complex products the workers can produce, the higher wage they can
earn. Therefore, if their capability is inadequate to perform in complicate production lines, they are willing
to join the training and attempt to upgrade their skills to be able to manufacture high-value products.
48
Kauhanen and Napari (2012) instructs the method to facilitate piece-rate scheme: “The
minimum hourly wage rates for given job-complexity levels are defined in the collective agreement, and
these agreements also provide guidelines for setting the piece-rates or stipulate the rates.” Hence, the
coefficient of the simplest products is 1 with the minimum hourly wage regulated for each region in
Vietnam divided by the average output quantity per worker.
35
The product complexity is defined with the level of skill complexity rated by the production team
as well as the profit margin of each product category. The product coefficient is based on the product
complexity. And the piece-rate scheme is developed with product coefficient as below:
Table 5.1: Piece-rate wage scheme proposal for ’s full-time worker
Category Product category Product complexity Product coefficient

number (1: lowest to 5: highest)
1 Bean paste 5 1.5
2 Cake gel 4 1.4
3 Kularome 3 1.3
4 Sugar syrup 3 1.3
5 Custard 2 1.1
6 Fruit topping 2 1.1
7 Tin grease 1 1
8 Baking powder 1 1
9 Sponge mix 1 1
10 Dry BI 1 1
The formula for daily wage of full-time workers is calculated as below:
Daily wage = 𝑩𝒂𝒔𝒆 𝒘𝒂𝒈𝒆 𝒑𝒆𝒓 𝒕𝒐𝒏 ∗ ∑𝟏𝟎

𝒌 𝟏(𝐎𝐮𝐭𝐩𝐮𝐭 𝐨𝐟 𝐩𝐫𝐨𝐝𝐮𝐜𝐭 k 𝐱 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐜𝐨𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 k)
(Output of product is calculated by tons)
In which base wage per ton = and 27 tons is the expected

∗
productivity per hour. Currently, the regulate minimum hourly wage per month by the Vietnamese
government for ’s region is 3,920,000 VND 49, the average number of monthly working days is 26
days. Thus, the current base wage per ton is approximately 5,700 VND. The advanced workers can earn
up to 20-30% higher than their recent wage while the basic workers who only perform simple production
lines are able to earn regulated minimum monthly wage.
To ensure the quality of products, the output is counted only if the products are passed by quality
control. If the worker is assigned as one of the key operators in the production lines, 100% output in this
batch is calculated to the workers. However, if the worker only performs simple tasks like material
36
preparing, labelling, packaging or machine supporting, the percentage of output is counted based on the
percentage of process that he or she is in charge of.
This solution motivates the workers to effectively join training and upgrade their skills to produce
as many complex products as they can; as the result, they are able to get higher wage based on pieces.
The total labor cost of new piece-rate scheme and current fixed hourly wage for recent average
capability is similar. When the workers’ capability is upgraded to reach the productivity before factory
relocation, the total cost of new piece-rate scheme is 8-10% higher than one of the fixed hourly wage
policies. However, the higher productivity of workers leads to higher volume for sales and assurance of
quality as well as on-time-in-full delivery for orders are more beneficial for the business in long-term
profitability.
5.1.2 Incentives for workers’ capability
In the Koike’s research of incentive systems for workers, the remuneration must reflect the
differences of workers’ capability. Payment-for-skills is needed to motivate skill development in workers
45
. Hence, ought to match the workers’ capability with the job grading, and then offer each grading
with particular incentive schemes.
The workers are required both horizontal (wide variety of products) and vertical (advanced skills
to perform as key operators in the production lines) knowledge and skills 45. To access workers’ capability,
the skillful levels, therefore, have to be measured both horizontally and vertically.
Table 5.2: Vertical measure method of skill level for workers
Skill level Definition

Entry Para - An Entry Para-Professional (S1) is an entry -level position typically requiring little or
Professional no prior knowledge or experience.
(S1) - Work is closely supervised.
- Work is routine or follows standard procedures.
- Communicates information that requires little explanation or interpretation.
Experienced An experienced Para-Professional (S2) requires basic knowledge of job procedures
Para - and tools obtained through work experience and may require the following
Professional proficiency:
(S2) - Work under moderate supervision.
37
- Problems typically are typically of a routine nature, but may at times require
interpretation or deviation from standard procedures.
- Requires some explanation for interpretation when receiving requests from team
leaders.
Senior A Senior Para-professional (S3) requires broad knowledge of operational procedures
Para- and tools obtained through extensive work experience and may require the following
Professional proficiency:
(S3) - Work under limited supervision for routine situations.
- Problems typically are not routine and require analysis to understand.
- No need explanation for interpretation when receiving requests from team leaders.
Specialist A Specialist Para-Professional requires advanced knowledge of operational
Para- procedures and tools obtained through extensive work experience and may require
Professional abilities to perform:
(S4) - Working under limited supervision for non-routine situations and may be
responsible for leading daily operations.
- Provides assistance and training to lower-level employees.
- Delegating and reviewing the work of lower-level employees.
- Problems are typically difficult and non-routine but not complex.
The skill levels are referred and benchmark with multi-national companies in manufacture. Not
only are the skill levels based on the experience and ownership of the workers in the production lines, but
the Specialist (S4) level also requires the workers ability to train, coach lower-level employees to enhance
effectiveness of on-job-training in and ensure knowledge transfer 50.
After acknowledging how to define the workers as the key operators in production lines, the
horizontal measure is calculated by the number of product categories the workers can perform.
Table 5.3: Incentive scheme of capability for workers (both horizontal and vertical measure)
Job Incentive scheme

Description
grading (% Base wage)
G0 New hire 0%
G1 From S2 level of at least 01 product category 0%
38
G2 From S3 level of at least 02 product categories 4%
The incentive is calculated by the formula: Incentive = Base wage * Incentive scheme (%)
In order to evaluate workers’ job grading and motivate them to continually upgrade their
capability, has to organize quarterly assessment by HR and Production Teams and get the
information of job grading transparent to the workers. Regular competition for capability evaluation is
one of the methods of gamification 51. Fair assessment and fair compensation are the orthodox measures
for skill development in employees 45.
Figure 5.1: Process of evaluate workers’ capability and offer incentives
Define the job grading

HR to recruit new Capability assessment
for each new-hired
workers and organize results to be informed
workers based on the
initial capability to relevant functions to
skill assessment by
assessment with allocate in suitable
Production with
Production production lines
supervision by QC
Quarterly assessment Workers to register their

Production to plan and
for trained employees desire to join trainings
schedule formal training
(On 1st to 8th date in in new production lines
and on-the-job training
the beginning of to upgrade their
for registered workers
quarter) capability
Re-evaluate skills every

Skill assessment results New job grading to be
six months and ensure
informed and matched issued and applied with
willingness to perform
with job grading, then new incentive scheme in
in complex production
informed to employees the following months
lines
39
The incentives based on workers’ capability motivate them to continuously enhance their skills
and be willing to perform in more complex production lines to prove their competency.
Although the total labor cost of this solution is estimated to be 6-8% higher than the current labor
cost, but it set the maximum of increase is not over than 12% recent base wage. The incentive scheme
keeps the workers endeavor to join training and perform new skills, then the total productivity increases
by fulfilling all workers in production lines as planned. Consequently, the production conformance rate,
the commitment of production as per the planning, will increase to meet the order from customers and
boost the company’s profit.
5.2 Solution evaluation
In order to evaluate the solutions, the author conducts two short surveys for choosing one of two
options presented in above details. The first survey is conducted with the team leaders and managers
with insights of workers’ productivity. The 16 respondents are Production Team leaders, Production
Managers, QA/QC Managers, QA/QC Team leaders, Planning Managers, HR Managers, Operations
Director.
Figure 5.2: Solution selection by team leaders and managers
Piece-rate scheme
combing the level
of products’
complexity
31%
Incentive for
workers' capability
69%
69% Team leaders and managers vote for the solution of incentive for workers’ capability. In the
open feedback session of the survey, BI Production Manager said: “The option of incentive for workers’
capability will motivate more teamwork by on-the-job trainings or knowledge transfer in comparison to
40
the solution of piece-rate scheme which encourages workers to focus more on their individual
performance rather than the team achievements.” 2/4 Team leaders also shared their opinions: “The
piece-rate scheme requests administration system and operations procedures to record the output of
specific products for each employee, whereas the incentive scheme just costs time and effort to quarterly
assess the workers’ capability. The piece-rate option takes more additional resources to implement then
the incentive scheme does.”
The second survey consists the same question for rating the two solutions but with different
population. The author takes the sample of 12 full-time workers from all skill levels and production lines
and asks for their preference.
Figure 5.3: Solution preference by full-time workers
Piece-rate
scheme combing
the level of
products’
complexity
17%
Incentive for
workers'
capability
83%
Although the total labor cost of two options is similar in the perspective of overall business, the
full-time workers prefer incentives for workers’ capability. There are three workers commenting: “Piece-
rate scheme seems to be put more pressure on their work”. In the informal talks at lunch, most workers
see incentives as the recognition for their skills, while piece-rate scheme is the method to control their
performance.
Due to limited time and resource of this business project, it is unable to pilot the two solutions in
the reality to evaluate which options are better. Nevertheless, the survey results of both workers and
management team selecting the solution of incentives for workers’ capability partly prove its
41
effectiveness and practical in comparison to the piece-rate scheme. The below cost-benefit analysis also
confirms the positive impacts of the incentive scheme:
Table 5.4: Cost-benefit analysis of incentives for workers’ capability
Benefits Costs
Total labor 8-10% higher total labor wage
wage (unchanged headcount)
Total 25-30% higher total production volume
production (there is forecasted potential market
volume share by Sales Department)
Quality At least 5% drop of defective products
management which cost brand’s reputation and arising
costs of rework thanks to workers’ skills
frequently reassessed
Supply chain Reduce the supply time of complex
products from 10 days to 7 days after
ordering due to rising productivity
Ensure on-time-in-full, decrease the
delays of delivery due to slow production
of complex products, especially bean
paste in peak season
Operations Increase teamwork among workers by Request time and resources to
on-the-job trainings organize quarterly capability
Ensure knowledge transfers and back-up evaluation (Able to implement with
workforce current available internal audit team
involved HR, QA/QC, Production)
Planning Easily daily, weekly and quarterly
planning with clear capability of workers
Increase forecast accuracy with clear
capability of human resources
42
People Workers not rejecting to operate in hard
management and complex production lines without
any motivations because wage is based
on working hours only
Increase knowledge transfer of workers
and from full-time workers to
outsourcing workers => Lift up
productivity of both full-time and
outsourcing workers
Capability Boost learning spirit to upgrade people
development capability
Clear career path with job grading to
motivate workers in enhancing their skills
In the overall business perspective, there is beneficial to apply incentive scheme to motivate
workers to be willing for training and upgrade their production capabilities. Though it raises the total labor
cost by 8-10%, the benefits are much more than cost with potentially increasing production volume and
sustainable skill capability in operations.
5.3 Action plan
There are 6 main stages to initiate, apply and review the incentive scheme:
Stage 1: Prepare toolkit for capability assessment

Stage 2: Design training plan to perform each production category
Stage 3: Communicate incentive scheme
Stage 4: Organize initial assessment for current workers
Stage 5: Repeat quarterly assessment and new-hire assessment
Stage 6: Review the procedures and assessment toolkit every six months
To implement the incentive scheme for workers’ capability, the detailed action plan is developed
as below:
43
Table 5.5: Action plan for
Stage Action Responsibility Jan’ Feb’ Mar’ Apr’ May Jun’ Jul’
21 21 21 21 ’21 21 21
1. Prepare Form the assessment team HR Manager: R, Operations Director: A
toolkit for BI Production Manager: I, C
capability Define the skills and core Production team leaders: R
assessment competency for each production BI Production Manager: A
category QC Manager: I, HR Manager: C
Develop the procedures for HR Manager: R, Operations Director: A
capability assessment BI Production Manager: I, C
2. Design Design on-the-job training to Production team leaders: R
training plan to master production category BI Production Manager: A
perform each HR Manager: I, C
production Define expert in each production Production team leaders: R
category category to play as key mentors/ BI Production Manager: A, C
trainers HR Manager: I
Schedule the training plan for Production team leaders: R
each production lines BI Production Manager: A, C
HR Manager: I
Communicate incentive schemes HR Manager: R
for managers Operations Director: I, C
44
21 21 21 21 ’21 21 21
3. Communicate Communicate incentive schemes HR Manager, BI Production Manager: R
incentive for workers Operations Director: I, C
scheme
4. Organize Inform capability assessment for Production team leaders: R
initial current workers BI Production Manager: A
assessment for HR Manager: I, C
current workers Receive registration from Production team leaders: R
workers for production BI Production Manager: A
categories they can perform HR Manager: I, C
Communicate clear expectancy Production team leaders: R
and score frame for each BI Production Manager: A
production category HR Manager: I, C
Hold the initial assessment HR Manager: R
Operations Director: I, C
Announcement result of job HR Manager: R
grade for each worker Operations Director: A
BI Production Manager: I, C
Review the score if there is any HR Manager: R
feedback from the workers Operations Director: A
BI Production Manager: I, C
45
21 21 21 21 ’21 21 21
Issue the job grading with HR Manager: R
applicable incentive scheme for Operations Director: A
each worker BI Production Manager: I, C
5. Repeat Conduct the capability HR Manager, BI Production Manager: R
quarterly assessment for new hire and Production Team leader: I, C
assessment and inform their initial job grading
new-hire Quarterly conduct capability HR Manager, BI Production Manager: R
assessment assessment Production Team leader: I, C
6. Review the Review the assessment toolkit Production Team leader: R
procedure every six months BI Production Manager: A
HR Manager: I, C
Review and adjust the HR Manager, BI Production Manager: R
procedures with best practices Operations Director: A, C
Production Team leader: I
Note: RACI matrix: R=Responsible; A=Accountable; C=Consulted; I=Informed
46
6. Conclusion
The topic is very important to the business to improve the productivity of production, then the
profitability after the site factory relocation. Additionally, it is critical to the business to enhance workers’
capability and turn human resources to be the competitive advantage of . The methodology applied
in this project is the integration of the theoretical researches in people management and empirical
analysis of both primary and secondary data from relevant departments like Production, HR, QA/QC,
Planning, etc. Theories informed the potential problems, root causes as well as suggested alternative
solutions. Although it is better to pilot the alternative solutions in the reality to evaluate its effectiveness,
the resources and time of this project are limited for this stage. However, the surveys of relevant
stakeholders for their feedbacks as well as cost-and-benefit analysis in the solutions still let the author
select the more possible ones to handle the business problem in the project. Business improvement is a
continuous process, so the company ought to take their responsibilities as the action plan and frequently
review the procedure to adjust it to match the behaviors of workers as well as boost their capability.
47
7. Appendix
7.1 Summary of transcripts for intake meeting in problem identification
Introduction: Introduce the purpose of intake meeting
Warm-up question: Could you please introduce a little bit about your position and your
responsibilities in the company?
Main question: As I show you the figures of declining productivity of BI workers when they worked
in Dong Nai factory and now in Long An factory. Why are the reasons of this issue?
48
Questions and answers Key contents Findings
Introduction
Thank you for joining the interview. The purpose of this
interview is to understand your opinions and proposal to
improve the effectiveness of our full-time workers in bakery
ingredients product family. Please feel free to share your ideas.
At first, could you please introduce a little bit about your current
responsibility in ?
Operations I worked for since 2013, the time we start launching BI 7 years of experience
Director Production. With nearly 20 years of experience in production
industry, I am now in charge of overall operations for both yeast
and BI for the two factories.
Bakery I joined the last 3 years as Production Assistant Manager, 3 years of experience
ingredient and got promoted to be Bakery ingredient production Manager
(BI) since the factory relocation. I am the person who leads the
production performance of BI production team now.
Manager
HR Manager I had 4 years of experience as HR Manager in . I manage 4 years of experience
organizations development, total reward and legal teams. My
role is to be the partner of all departments to help them come
up with optimal people solutions.
49
Assistant My position is Production Planning Manager, and I work in 2 years of experience
Planning planning department of for over 2 years. I am responsible
Manager for demand, supply and production planning here.
QA/QC I joined as a QC Officer after my graduation, and this year 12 years of experience
Manager is my 12th year in quality control and quality assurance of .
I got the promotion as QC Team Leader to QA/QC Manager last
year.
Production Starting as the production worker, I was assigned to be the 6 years of experience
Team Leader production team leader for 6 years. I am the most senior one in
the three team leaders in BI. I am now managing both full-time
and outsourcing workers in BI production.
Full-time I work as BI worker since 2014. In the past, I worked for the 6 years of experience
worker factory in Dong Nai, and I moved with the factory relocation to
Long An.
Outsourcing I am the worker managed by HGP company and outsourced to 1 year of experience
worker work in factory. I joined in August 2019.
Main question: As I show you the figures of declining
productivity of BI workers after factory relocation. Why are the
reasons of this issue?
Operations We see the lower productivity of our workers since the We try to bring the same Ineffective training of
Director relocation. We attempted to bring the same machinery, machinery, technology, etc. but full-time workers =>
technology, layout,… to ensure not much changes in production still decreasing productivity.
50
process. But the relocation impacts are undeniable. In the daily Ineffective training of full-time Lack of labor for
volume report, there has been less finished products volume worker leads to lack of labor for complicated products
recorded. complicated products. Difficult for full-time
Although we must accept the fact that outsourcing workers are Difficult for full-time workers to workers to live in the
new and they need time to learn our process, we still observe live in the Long An as they have new place
ineffective training for current full-time workers, which leads to to adapt in relocation period.
lack of labor for complicated production lines.
Another objective reason may be that new relocation requires
adaption from full-time workers. It is difficulties for them to live
in the new place.
Full-time Living far from home, workers have to live in hostels and take Workers have to live in hostel Adaptive challenge
worker care of their own without their family’s care. New housing is so and no family taking care of to new housing for
challenging. Moreover, it takes time for us to travel towards and them. workers
backwards between two provinces every week. It is more than 4 It is time-consuming to travel Time-consuming to
hours every tiring trip. between two countries weekly. travel from Dong Nai
every week
BI Production Production Team listens to the opinions of the full-time workers New benefit package is not Inadequate income
Manager regarding their difficulties in relocation. With these challenges sufficient for the workers to to compensate for
Mr. A – workers mention above, some direct workers are compensate their trade-offs in workers for
concern whether new benefit package is sufficient to relocation. movement
compensate for their trade-offs in movement.
It may not motivate them to maintain their productivity.
51
Production To tell the truth, we have to tolerate that we have more total Some key experienced workers Old workers
Team leader headcount (full-time + outsourcing) in Long An to produce the in Dong Nai did not move to Long resigning due to
same volume as Dong Nai province, which prove the labor An factory – so they resigned relocation
productivity decline. Because of the factory movement, many More time to produce one Lack of key
key workers who are skillful in complex production lines batch of some categories experienced
resigned, which causes lack of key operators in the process of More headcount but lack of workers for
complicated products like bean paste, cake gel, etc. Now, it took experience complex
more time to produce one batch of products. New outsourcing production lines
workers is junior and lack of experience, so more headcount is
still unable to compensate with their experience of the key
staffs.
Production It is very difficult to arrange workers for category process New workers need
Team Leader because there are many people, but lack of key workers time to learn and
operating some complex process which requests experience. perform basic task
New-recruited outsourcing workers need time to learn and only => Lack of
perform basic tasks only. workers for complex
production lines
Operations We can accept the facts of resigning workers and newbies cause The resigning workers and junior Ineffective training
Director the lack of capability. However, the ineffective skill training for newbies cause lack of key labor for current workers
current workers during last year led to the lack of advanced-skill in complex production lines.
workers to perform complex category process. Ineffective skills training for
current workers also the cause.
52
Assistant The market is now demanding more complex products. Market demands more complex Lack of incentive for
Planning Especially, our bean paste is the key products in Mid-autumn products. knowing new category
Manager season, but the there is just 1 staff mastering the whole process. process
It is a true problem if we do not have back-up key operations When knowing more categories,
staffs. People do not want to learn new categories maybe workers have more
because they do not have benefits if knowing one more. The responsibility but no more
more categories they know, the more responsibilities they have benefits.
but without any more compensation.
Organizations The difficulty in training both remaining full-time workers and Lack of clear and
Development new-hire outsourcing workers is the lack of clear and detailed detailed work
Manager work instructions in some complex process. It is very difficult for instructions
the trainers in on-the-job training with this lack of clear Ineffective training
materials. for full-time
workers
QA/QC The reason for the lack of these work instructions is due to the Several stage metrics
Manager fact that many stages of our current process (like when the bean not quantifiable, just
is cooked ripe enough for not to have burning color) does not based on experience of
have quantity metrics, so it is difficult to train these skills to new workers => Difficult for
workers. It mostly depends on the experienced workers. training
Full-time In reality, we do not have time for training. The production plan No time for training
workers is quite pressure. We do not have enough time to learn new due to planning
process when the production orders are full most of the time.
53
Learning time will cause slow production, and then the failure of
on-time-in-full KPI.
Outsourcing We even produce slowly due to the interruptions in production Interruptions in
workers lines like electricity interrupting. production line
Electricity
interrupting
BI Production Certainly, the time of delivering the materials from Dong Nai Time of delivering the materials Materials taking time to
Manager warehouse to Long An warehouse cause inadequate inputs for from Dong Nai warehouse to deliver from Dong Nai
production in flexible changes of production plan; as the result, Long An warehouse cause warehouse
it requires time to wait for the materials for production. For inadequate inputs for Inadequate
example, when there are any issues in the production lines, we production production inputs
need to add in more materials but not available in the Long An
warehouse. So we have to delay to batch to another day.
Assistant Another unsustainable production input is the beam supply. The Unstable beam from
Planning beam instability is due to ’s dependence on the beam boilers
Manager source of renting factory in Long An
54
7.2 Survey of employees’ satisfaction of benefit package after site relocation
Question 1: Rate your satisfaction of below conditions in Long An site
Very satisfied Satisfied Unsatisfied Very

unsatisfied
Salary
Accommodation
Meals
Common well-being
Question 2: Please share your feedback to improve your living in Long An
55
7.3 Feedback survey of employees for training after site relocation
Question 1: Rate your satisfaction of training conditions in Long An site
Very Satisfied Unacceptable Unsatisfied Very

satisfied unsatisfied
Facility
Training contents
and materials
Training/ coaching
styles
Conditions of
practice
Question 2: Please share your feedback of training conditions in Long An
56
7.4 Transcript of focus group interview for satisfaction of training environment
Question 1: Do you have organization’s support when participating in training? How?

Question 2: Do you have your supervisor’s support to join training? How?
Question 3: Do you have frequently performance feedback? How?
Questions and answers

Question 1: Do you have organization’s support when participating in
training? How?
Worker M Our company has public training policy and process for employees
and fully supports training activities in the production. In the training
time, we are paid full wage as the working hours. We are happy to
join.
Worker S In , we have annual trainings organized by the company, and the
managers are requested arrange time for us to join the training.
Worker A We appreciate the company’s commitment of full-paid wage for any
training dates of the workers.
Worker K I agree the good support of organization in training environment.
Question 2: Do you have your supervisor’s support to join training?
How?
Worker T I am fully supported by my team leaders to join trainings. They inform
in the chat and remind us before the training date. After the training,
they sometimes listen to my feedback and proposal of application to
the reality
Worker D The supervisors organized the effective in-the-room training as HR
request, but there is still the lack in time for on-job-training to
upgrade skills because the production plan is hectic.
Worker C The supervisor can schedule the time for me to join external training or
training organized by HR or QC. But the on-the-job trainings are not
many and invested much time in it since the production plan is quite
pressure, and we have totally focus on working in the whole shifts, no
have time to upgrade skills in other production lines.
57
Question 3: Do you have frequently performance feedback? How?
Worker A We have performance review every six months and the team leaders
have feedback on our skills.
Worker T The managers and supervisors keep feedback our performance,
especially after training new skills and let us have opportunities to
apply theories into practical immediately.
Worker K In the beginning of the year, we have KPI for workers. And the
performance, including skills, is assessed every year. The strengths and
weaknesses are also pointed out.
58
7.5 Survey of selection for alternative solutions
Question 1: Which solutions do you think to be more effective and practical to motivate workers to
upgrade their capability?
Piece-rate scheme combing the level of products’ complexity
Incentives for workers’ capability
Question 2: Why do you choose that solution?
Question 3: Please feel free to share your ideas about the two alternative solutions.
59
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63

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SCHOOL OF BUSINESS

ASSIGNMENT COVER SHEET

UNIT AND TUTORIAL DETAILS

Unit name: BUSINESS PROJECT Unit number: 200829

☒I hold a copy of this assignment if the original is lost or damaged.

List of tables .................................................................................................................................................. 4

1.2 Organization structure

The organization structure is stipulated as below:

South & Southeast

Customer Research &

Quality Wastewater Engineering Human

1.3 Business situation

The current structure of BI Production Team is below:

Figure 1.2: Organization chart of BI Production Team

Full-time Outsourcing Maintenance

Figure 2.1: Productivity of BI production workers in F18/19 and F19/20

2.2 Symptoms validation

Productivity of overall factory Productivity of full-time worker

Defective product volume (kg)

3.1 Problem mess

3.2 Potential problems and main problem validation

With the information provided by above-mentioned stakeholders, the determinants of

3.2.1 Changes of workers’ well-being for adaption to new site

Compensation for full-time workers Compensation for full-time workers

Figure 3.2: Survey result of employees’ satisfaction of relocation

Very unsatisfied Unsatisfied Satisfied Very satisfied

20% 19% 13%

3.2.2 Insufficient supply of materials inputs and utilities

Average frequency Insufficient volume or Number of production

3.2.3 Limited labor capabilities in complex production lines

3.2.3.1 Resignation of old workers due to relocation

3.2.3.2 New-hired outsourcing workers taking time to learn

3.2.3.2 Low-skilled current workers due to ineffective training

Before site relocation After site relocation Successful

3.3 Problem justification

International Labor Organization stated that “Skill development is central to improve

The BI production in consists of 10 categories in which several are complex product

Product category Current headcount Needed headcount Surplus/ Shortage

Figure 4.1: Fishbone map of cause validation

4.1 Potential causes

Low conscientiousness: Conscientiousness is personality trait of wishing to do their job or duty

4.1.2 Trainees’ unwillingness to upgrade their capability

Figure 4.2: Stage model of motivation in training and learning activities 27

4.1.3 Ineffective training design

5 - Very satisfied 4 - Satisfied 3 - Acceptable 2 - Unsatisfied 1 - Very unsatisfied

4.2.2 Unsuitable work environment

Join all training but poor

Table 5.1: Piece-rate wage scheme proposal for ’s full-time worker

Category Product category Product complexity Product coefficient

Daily wage = 𝑩𝒂𝒔𝒆 𝒘𝒂𝒈𝒆 𝒑𝒆𝒓 𝒕𝒐𝒏 ∗ ∑𝟏𝟎

(Output of product is calculated by tons)

In which base wage per ton = and 27 tons is the expected

5.1.2 Incentives for workers’ capability

Table 5.2: Vertical measure method of skill level for workers

Skill level Definition

Job Incentive scheme

G1 From S2 level of at least 01 product category 0%

G3 From S3 level of at least 03 product categories 5%

G4 From S3 level of at least 04 product categories 7%

G5 From S3 level of at least 05 product categories 8%

G6 From S4 level of at least 06 product categories 12%

Figure 5.1: Process of evaluate workers’ capability and offer incentives

Define the job grading