MINISTRY OF EDUCATION AND TRAINING

UEH UNIVERSITY
UEH COLLEGE OF BUSINESS
---o0o---
SCHOOL OF MANAGEMENT

STUDENT ID

LY PHUONG UYEN 31191026904

FINAL ESSAY
HUMAN RESOURCE
HUMAN RESOURCE MANAGEMENT

HAPPY COFFEE: CASE STUDY ANALYSIS

LECTURER: MR. NGUYEN NGOC QUI

CLASS: ADC01
SCHOOL YEAR: 2021
 Table of Contents
I. Case Analysis..................................................................................................................................2
1. Current situation.............................................................................................................................. 2
2. Key issues........................................................................................................................................... 2
 Poor customer experience.......................................................................................................................................... 2
 Poor employee compensation................................................................................................................................... 2

II. Linking Theory And Practice To The Solution.......................................................................4

1. Customer Experience Management (CEM)................................................................................ 4
 Create and maintain comprehensive customer profiles................................................................................4
 Actively communicate – connect with customers in an effective way and manner............................4
 Listen and respond quickly....................................................................................................................................... 5

2. Compensation Management........................................................................................................... 5
 Performance-Based Pay.............................................................................................................................................. 5
 Benefit package.............................................................................................................................................................. 5
 Recognition...................................................................................................................................................................... 5

III. Recommends specific strategies to accomplish the proposed solution...............................7

1. Customer experience strategy........................................................................................................ 7
2. Compensation strategy.................................................................................................................... 8
REFERENCES....................................................................................................................................10

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I. Case Analysis
(Analyses the case identifying the key issues and/or problems. Identifies problems using
evidence from the case plus theories and concepts.)

1. Current situation
Happy Coffee was launched in 2006 in Hanoi, Vietnam. Nguyen, the company's
founder, began with a single store in Hanoi and has now expanded to 28 locations
throughout the country. Today, Ms. Nguyen's success story took a painful turn; for the
first time in the company's history, one of its Ho Chi Minh City stores had to close
due to operating at a loss for more than a few months. To avoid having to close further
locations around the country, drastic modifications are required, as six other coffee
shops no longer earn a profit and barely cover operating costs.

2. Key issues

 Poor customer experience

In this case, poor customer experience was a significant cause of the Happy
Coffee's sales dropping and losses. Companies have embraced Customer Experience
as a way to obtain sustainable competitive advantages [ CITATION Sha05 \l 1066 ].
Customer experience is a broad term that refers to all aspects of a company's offering [
CITATION Zom09 \l 1033 ]. Since the quality of services and products in the highly

competitive consumer market has been standardized, increasing Customer Experience

has lately become a marketing approach for differentiation. In this sense, creating and
delivering a positive customer experience is critical for improving customer
relationships and increasing customer loyalty, as well as providing economic value to
businesses ([ CITATION Bra09 \l 1066 ]; [ CITATION Fro07 \l 1066 ]; [CITATION Lyw09 \l
1066 ]; [ CITATION Mas06 \l 1066 ]).

 Poor employee compensation

Another major problem of Happy Coffee is poor employee compensation.

Compensation is really important because it is the foundation of the work relationship,

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affecting both employees and employers. According to[ CITATION Kre06 \l 1066 ] need
fulfillment model, financial incentive is one of the aspects that contribute to job
satisfaction. When employees are content with their jobs as well as the organizational
environment, including their coworkers, compensation, and leadership, they are more
dedicated to their company than when they are dissatisfied [ CITATION Sam07 \l 1066 ].
In this case, with a poor compensation system, employees are not motivated to work,
and as a result, they often have a bad attitude, often use sick leave as an excuse, be
late for work, and even leave work for short periods of time.

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II. Linking Theory And Practice To The Solution
(Develops a solution to the issues or problems. Justifies the solution with evidence,
management theory, approaches, concepts and/or models.)

1. Customer Experience Management (CEM)

In recent years, generating and managing customer experiences has emerged as a

critical focus for most businesses, especially those in the service industry, and
marketing researchers and practitioners have paid close attention to this topic.
([CITATION Lyw09 \l 1066 ]; [ CITATION Pal10 \l 1066 ]; [ CITATION Pul99 \l 1066 ];
[ CITATION Ver09 \l 1066 ]). CEM is defined as “the process of strategically managing a

customer’s entire experience with a product or company” [ CITATION Sch03 \l 1066 ].

Consumers, according to [ CITATION Sch99 \l 1066 ], are emotional beings that desire a
pleasurable experience as a result of consumption, driving businesses to become
experience-oriented enterprises.

When customer experience leaves a good impression on the customer, it has an

effect on customer recognition and increases positive engagement (Kim, 2005); this
might encourage the customer to make purchases and strengthen customer loyalty
[ CITATION Bra09 \l 1066 ].

 Create and maintain comprehensive customer profiles

Companies must know their customers better than ever before in order to create an
exceptional customer experience. This necessitates the creation and maintenance of
comprehensive customer profiles that aid in the understanding and measurement of
the customer journey across numerous channels. The more information a company has
about its consumers, the better it can give customised offers to them, building a tighter
relationship between the company and its customers and enhancing metrics like
loyalty and retention.

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  Actively communicate – connect with customers in an effective way
and manner
The way we connect with customers is the first step toward building trust. The
good customer communication is no longer solely through the customer service team.
It encompasses both online and social media communications, as well as advertising
and any writing or voice the customers may use to communicate with businesses.

 Listen and respond quickly

“Silence is death”. Responding quickly to customers' questions and concerns will
create a first impression of a professional company, in addition, it will make them feel
welcome. If no one responds, customers will go to other companies where they are
more welcome. It is important to know what problems exist in the service and solve
them early to meet customer expectations before they leave.

2. Compensation Management
Employee compensation is a component of human resource management (HRM)
and is regarded as crucial to organizational performance [ CITATION Gup14 \l 1066 ].
The idea that rewards motivate people to work more is a cornerstone of employee
compensation theories [ CITATION Laz00 \l 1066 ]. According to [ CITATION Yas13 \l
1033 ], a good compensation system, which includes payment, recognition, promotion

chances, and meaningful employment, might boost physician satisfaction.

According to [ CITATION Arm05 \l 1033 ], compensation management is all about

building a healthy employment engagement and psychological contract that takes a
whole compensation perspective, which recognizes that individuals can be
compensated in a variety of ways.

 Performance-Based Pay
Performance based pay is a way that businesses reward employees financially
when their work performance is at a good level, meeting set targets and bringing
benefits to the business. In this way, employees are motivated to work and the

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company also ensures that it spends money properly and in proportion to what
employees bring to the company.

 Benefit package
According to Glassdoor's 2015 Employment Confidence Survey, benefits and
perks are a big influence in deciding whether or not to accept a job offer for around
60% of workers. Based on the report, 80 percent of employees would prefer greater
perks to a pay boost.

 Recognition
Employees can understand that their organization values them and their
contributions to the success of their team and the firm as a whole when they receive
recognition. This is especially important as organizations expand and evolve. It helps
employees feel secure in their worth to the organization, which motivates them to
keep doing exceptional jobs.

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III. Recommends specific strategies to accomplish the proposed solution

1. Customer experience strategy

● Step 1: Identify what is important to the customers

Obtaining a deep and nuanced understanding of an organization's consumers is the

first step in developing a good customer experience strategy.

● Step 2: Interview to generate insights

When consumer insight research is done correctly, it improves the efficacy of how
a firm communicates with its customers, changing consumer behavior and thereby
increasing revenues. Businesses with good data are more likely to gather relevant
customer insights, which can help them expand over time.

● Step 3: Develop a journey map

A journey map is a visual representation of a customer's experiences with a brand

across all touchpoints. The key is to create the journey map based on the customers'
perspectives. Managers can use journey maps to have a better understanding of the
customer's experience. They'll be able to watch how clients progress through the sales
funnel, which will aid them in identifying ways to improve the experience.

● Step 4: Raise the highs and lower the lows

Companies can construct a much more comprehensive and meaningful experience

that keeps and develops the client base by focusing on the peaks (high points) – which
attract in and please customers. Furthermore, by concentrating on the troughs (low
points), companies can significantly improve customer retention and contribute to
long-term growth.

● Step 5: Re-imagine the journey and experience

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 Routine, like precedent, is the enemy of creative thinking. Imagining a blank slate
can help businesses shift their perspective and consider what the customer experience
might look like in an ideal world.

● Step 6: Integrate the strategy within the organization

Because customer-centric transformation is increasingly concerned, it's easy for

executives to become distracted by shifting objectives and short-term thinking.
However, in order to reap the full benefits of the business case, new ways of working
must be embedded. Leading companies must ensure that transformation is viewed as a
continual improvement process rather than a one-time, linear change.

2. Compensation strategy
● Step 1: Inquire about employee input

Employees, of course, will not be part of the committee that chooses salaries; but,
companies can solicit their feedback on total compensation. Find out which benefits
are most important to the employees. Younger employees may be more interested in
daycare subsidies, whereas older employees may be more concerned with retirement
programs. By soliciting feedback, businesses can create a strategic compensation
strategy that is well-informed in order to align with the talent management strategy
and will please the majority of employees.

● Step 2: Benchmark against Competitors

In order to stay competitive in the industry, try to evaluate what the competitors
offer their staff. We may not be able to match them item for item, but we will be able
to remedy gaps during interviews with this information.

● Step 3: Budget allocation

Examine the human resource and operational budgets of the organization

objectively. Reflect the cost that can be spent on each worker. Taxation, salaries,
preexisting benefits, remuneration, and incentives are all factors to consider. Outline

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strategies for productivity or merits raises that will take place as part of annual
reviews.

● Step 4: Plan for Rewards

Consider using total compensation to engage employees, improve performance,

and convince them to stay. A retirement plan or additional vacation days for staff who
have been with the company for more than a year, or stock options as a bonus after 90
days, are all strategies to preserve the budget if employees do not continue with the
business for a set period of time.

● Step 5: Determine Pay Grades

A corporation can estimate the extent of rewards selected based on the job's
criteria and level with this framework in place. Pay grades take the uncertainty out of
compensation discussions by providing employees with a range of potential earnings
for any particular duty.

● Step 6: Compliance confirmation

The Fair Labor Standards Act establishes the legal criteria for minimum wage,
overtime, equal pay, record-keeping, and child labor. It also has consequences for
payment processes, record-keeping, taxes, wages, and withholding allowances. Legal
assistance should be sought by organizations to verify and assure compliance that any
compensation approach fits the criteria.

● Step 7: Discuss About Total Compensation

To avoid problems, ensure that all individuals have approach the information they
require and that it is correct and up to date. One of the most significant sources of
unhappiness between employers and employees is the discrepancy between dreams
and reality. An employee communication software application is an useful tool for
companies in compensation communications that are timely, engaging, and simplified.

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