INTRODUCTION
COMPANY PORTFOLIO
SMI Technology, a US-invested firm focused on product development and software outsourcing, has grown significantly over the past decade in Vietnam From its humble beginnings with just a few team members, SMI now boasts a workforce of over 1,000 skilled employees and has earned recognition as a Top 10 Sao Khue award winner.
SMI has been recognized as one of the top 5 IT companies and ranked 32nd among the best workplaces in Vietnam, based on factors such as salary, bonuses, welfare, development opportunities, leadership, company culture, work-life balance, and overall reputation The company is known for its popular products, including qTest, Kobiton, Katalon, and Witurn, with more innovative offerings on the horizon.
The concept of "value" in SMI extends beyond technical and business aspects; it embodies a commitment to advancing Vietnam's technology sector through innovative products and services SMI prioritizes community initiatives that aim to build and enhance the skills of IT professionals, fostering development within the industry.
Over the past decade with the vision of global company, SMI Technology has launched many
"made in Vietnam" products that have made a mark on the international market, in addition to its global customer base from the outsourcing segment
In 2017, QASymphony secured a $40 million investment and subsequently merged with Tricentis, achieving Unicorn status in 2018 Additionally, the Vietnamese engineering team at SMI developed applications like Kobiton, which attracted a $3 million investment from Kinetic Venture Capital in the USA, while Katalon boasts nearly 35,000 global business customers.
In order to continue to promote the strengths in the outsourcing and development of software products, SMI is expanding the sales team in the Australian market and Asian market
SMI focuses on consulting and delivering solutions for data management and analysis, supply chain management, and software quality management Our services are tailored for mid-range customers and aim to penetrate potential markets throughout Asia.
SMI Technology focuses to actively implements career and training programs, associates with universities to support students with real-life project knowledge and experience from the study time
The company aims to collaborate with non-profit organizations to develop talent among software engineers in underserved remote areas.
SMI is investing in five new offices in Vietnam, designed to meet global workplace standards The company is dedicated to fostering a professional corporate culture through comprehensive training and employee development programs These initiatives include engaging activities aimed at sustaining and enhancing the company’s growth towards achieving billion-dollar revenue status.
With the commitment to develop IT resources, SMI also support to create the best condition for employees for the opportunities to:
Learn: by giving opportunities, challenge for programmers to learn, and explores their skills
Develop new product: All members at SMI are involved in contributing ideas for the product they create
SMI aims to create an open-minded, dynamic, and professional work environment for all employees, while offering high-quality job opportunities for Vietnamese engineers and programmers As a leading technology company in Vietnam, SMI is committed to achieving significant growth and aims to reach billion-dollar revenue within the next decade.
COMPANY STRUCTURE
SMI is a technology company for the company’s structure is quite simple, under Board of Director; it will be divide to 02 Business Units as below:
Corporate Service is back office function with Finance, Admin, HR, Sales& Marketing, IT, Procurement Department
Delivery Service has Our-sourcing service, Production and Solution Department
Outsourcing services represent the company's most profitable department, delivering essential solutions to clients These services include technology outsourcing, software maintenance, system upgrades, risk evaluations, and system repairs, ensuring comprehensive support for customer needs.
The production department consists of young, recent graduates who contribute innovative ideas and initiatives, focusing on the development of unique technology products and software Their creativity aims to attract investment from consultants and customers, driving growth and interest in the company's offerings.
Solution: This is a specialized department in charge of important projects such as integrating system software of companies together in the process of merger and acquisitions among technology companies
Outsourcing and Solutions are the primary revenue drivers for the company, essential for sustaining its business operations Significant investments have been made in the Production department to develop innovative technology products, aimed at attracting clients and investors, as well as successfully marketing these products.
COMPANY VISION
To be a visionary global technology group with a portfolio of innovative service and product business
Provide guidance and support to our staff to help them define and reach their potential
Achieve success by creating value and marking a positive impact on the success on our customer and clients
Provide tangible contribution and improvement to our communities
INFORMATION TECHNOLOGY INDUSTRY
The rapid advancement of information technology has led to a significant increase in the demand for skilled professionals in this field Organizations, companies, and businesses are actively seeking employees with expertise in information technology to meet their growing needs.
Software companies that research, build, develop and provide software, website, applications, games - Companies manufacturing, assembling and repairing hardware equipment
Companies provide network solutions and network security
Administration Department, IT department at companies, including companies operating in the field of Technology and other fields
In the highly competitive landscape of outsourcing services, companies such as SMI face significant challenges from both domestic and international rivals Key competitors in this sector include LogiGear, Harvey Nash, Sunrise, FPT, DEK Technology, Global Cybersoft, TMA Solutions, and IVC.
SMI is committed to enhancing service quality to meet customer demands while consistently innovating advanced technology products that deliver practical benefits This approach maximizes profits and strengthens SMI's competitive advantage in the market.
The labor market in the programming industry will need 350,000 resources by the end of 2021 while currently only about 200,000 resource can meet the needs of the job
The IT industry in Vietnam faces a significant challenge due to a shortage of resources, with experts forecasting a deficit of 70,000 to 90,000 skilled professionals by 2020 Despite rising wages and benefits in the sector, the demand for qualified IT talent continues to outpace supply, highlighting a critical issue for the market.
PROBLEM CONTEXT
RECOGNIZED SYMTOM
This study concentrated on the Production department of a company that invested significant resources—money, time, and effort—to develop advanced technology products The goal was to enhance the company's presence in the technology market and achieve high revenue to ensure business sustainability.
The Production Department, comprising approximately 40 members, has been supported by the SMI Investment Fund over the past few years to develop innovative technology products Their primary goal is to bring these products to market, attract potential investors, and facilitate either investment opportunities or complete sales to interested parties.
In an interview with the Director of SMI, it was revealed that the production team is currently facing a challenge where the developers' actual performance is falling short of the management's targets.
One of the interview from Mr Cao Minh Nhat - The Director of Production team also confirmed that:
In recent years, our production department has not introduced any new products to the market, as technological advancements require continuous innovation and widespread adoption to effectively meet customer needs Unfortunately, the lack of new offerings over the past three years has resulted in lower performance compared to previous products and services, which delivered higher results.
Recently, the team revenue has decreased significantly and this situation may continue to occur, so the company needs to find out the cause to overcome this situation
Due to low revenue over the past three years, the production team members have not received any bonuses, which has contributed to their decreased performance.
Since 2017, SMI has faced challenges in meeting customer expectations for its technology products, leading to a significant number of cancellations of products and services This trend has adversely impacted the company's revenue, as illustrated in Table 01 below.
Table 1: Sale Revenue from 2015 to 2019
(Source: SMI New Production Revenue from 2015 - 2019)
The lifecycle of technology products is often brief; if a product fails to satisfy customers, generate significant market revenue, or attract investor interest, it is deemed a failure In such cases, the product is typically discontinued to conserve the team's time and effort, as well as to reduce costs for small and medium-sized enterprises (SMEs).
The Production team, part of the SMI group, consists of approximately 40 young employees, reflecting the industry's demand for innovative talent According to the Director of SMI, the information technology sector requires distinct skills that prioritize youthful intelligence and groundbreaking ideas over extensive experience Consequently, IT professionals are frequently chosen from recent graduates or those with just one to two years of experience, highlighting the team's youthful age demographic.
The data indicates that 75% of the team members are under 25 years old, aligning with the production team's requirements However, the lack of experience among this younger generation often leads to challenges in managing emotions and professional behavior in a workplace that demands a mature mindset.
Some might feel uncomfortable while working with these ridiculous one
Some are so quiet and only communicate to each other when needed, they are lack of socialize, or deny to join the company activities,
Some staff just work and work then go home
Some staff just want to enjoy and work with emotion
In order to analyze the problem, there were 12 in-depth interview conducted with 4 main groups as below
- The first group: 02 members: Director and Sales and Marketing managers
- The second group: 03 members: HR manager, Development Manager, Leader
- The third group: 04 members of Production Team
- The fourth group: 03 low performance members
POSSIBLE PROBLEM
In addition to interviewing the four groups mentioned earlier, the Production team carried out an internal survey to gather more data and identify the reasons behind their performance not meeting the company's expectations, as illustrated in Table 02 This table highlights four key issues that received significant feedback from the team.
Table 2: Problem that lead to low performance of Production Team
(Source: SMI Internal Survey for Production Team)
By looking at the statistical numbers of the survey above, it showed many problem affecting low performance of Production team: Unattractive salary & bonus, Ineffective performance appraisal,
Failure Product, Lack of leadership This is true data based on the interview information, the confirmation from all team members of production team
This report utilizes both primary and secondary data to examine the production team's current challenges and identify their root causes, ultimately offering solutions and recommendations for the Board of Directors at SMI Company.
PROBLEM IDENTIFICATION
FAILURE PRODUCT
At SMI, a new product is deemed a failure if its testing report indicates a satisfaction ratio below 50% over multiple evaluations To avoid being classified as a failure, the product must be improved to achieve at least a 70% satisfaction rate If these standards are not met, management will opt to discontinue development of the current app and initiate a new project.
Failure ProductUnattractive Salary & Bonus
A sample circle life of a new product will be shown as below:
Spynkal exemplifies a technology product that faced challenges during its development Recently, the production team conceived a new app, similar to Facebook, which underwent a few months of incubation before being presented to all SMI members for testing However, the app did not meet the expected satisfaction levels from testers, prompting the production team to enhance its functionality and modify certain features to achieve improved testing results before launching Spynkal to clients or the broader technology market.
After spending over 6 to 8 months on Spynkal without achieving success, the SMI Board of Directors has deemed the product a failure and plans to discontinue it The Production team director emphasized the significant time and effort invested by the team, which ultimately did not yield the desired results.
Product quality is crucial for ensuring customer satisfaction and driving company success When products maintain consistent quality and align with client needs, the sales team can confidently promote them Conversely, unstable product quality can lead to customer dissatisfaction and hinder our ability to engage clients effectively, ultimately resulting in product failures.
Riaz and Tanveer 45 stated, “Product is something or anything that can be offered to the customers for attention, acquisition, or consumption and satisfies some want or need”
Reed, Lemak and Mero 43 suggested that delivering high product quality to customers is a key strategy for improving performance in a competitive environment
Chauhudri and Holbrook 8 pointed that a customer who trusts in a product is more likely to remain loyal to it and spread positive word-of-mouth
Boulding et al emphasize the direct impact of product quality on customer loyalty, noting that high product quality typically leads to increased customer satisfaction Conversely, a product failure can adversely affect the customer experience for small and medium-sized enterprises (SMEs), ultimately harming their revenue.
Idea Incubation Launch for testing Low results
Consider to close Low results
In 2004, Kotler 28 suggested that “a product should be viewed in three level: core product, actual product and augmented product”
Core product means that the core value that the product could offer like purchasing massage chair is buying relation or comfortable moment
Actual product means that product could bring differential advantage from its competitors
Augmented product means that non-tangible benefit of possessing product like discount or customer service and so forth”
Below is a table 3 - testing report in recent years from 2016 to 2019, to show that the new products produced by the production team mostly get unsatisfactory test results
Satisfaction Neutral Satisfaction Highly Satisfaction
(Source: SMI Testing Report for New Production)
Due to disappointing test results from both internal testers and potential customers, the product has not generated sufficient profits, leading SMI's Management team to reconsider its development Consequently, with its low performance, the product is classified as a failure and will either be placed on hold for future upgrades or discontinued based on the final decision of the management team.
UNTRACTIVE SALARY AND BONUS
Employees often feel that their salaries and bonuses are inadequate, leading to a continuous desire for higher compensation This report aims to explore how this dissatisfaction contributes to the low performance of the production team.
The production team’s compensation consists of a fixed monthly salary and performance-based bonuses tied to KPIs and product success While the monthly salary is guaranteed regardless of product releases, recent market inactivity has resulted in the team receiving only their base pay, leading to concerns about low performance Survey feedback indicates that an unattractive salary and bonus structure is a significant factor contributing to this decline in productivity.
Unequal remuneration is also a factor that reduces the productivity of the team and leads to an increase in the rate of job vacancies at the company
And from the perspective of Mr Nguyen Huu Minh - Developer Manager:
Customer demands are rising, yet our products are plagued by numerous errors and suboptimal usage, hindering investment to sustain their market presence The inadequacy of our Total Quality Management directly impacts company and team performance, ultimately affecting salaries and bonuses.
There are theoretical link have the relationship between performance and competitive advantage as metioned in Curkovic & Pagell 11 ; Feigenbaum 16,17 ; Noori 38 ; Seawright & Young 50
Therefore, the resource of employees in the production team is fluctuating, the turnover and new recruiting is significantly up and down by this cause and shown as table 4 below:
Table 4: Employee status in 2016, 2017, 2018, and 2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination
(Source: Production Employee Status from 2016 - 2019)
According to a survey conducted by HR Consultancy Anphabe, a turnover rate of 10% is optimal for businesses to maintain stability in their workforce while facilitating personnel changes every decade This insight is supported by data from SMI HR regarding Team Production's member status in 2016.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
New Hiring Tranfer to new department Termination
In 2019, the average employee turnover rate within the group ranged from 10% to 20%, indicating a significantly high turnover With approximately 75% of Team Production's employees being under 25 years old, the stability of the workforce is notably low As a result, SMI Company faces challenges in retaining personnel and incurs substantial costs for recruitment and training of new staff.
The Production team members serve as a backup resource for the Outsourcing and Solutions department, ensuring that staffing levels are maintained in the event of employee resignations.
To maintain project stability while awaiting new hires from the HR Department, backup resources are utilized temporarily This ensures that the agreed-upon headcount with clients is met, allowing all processes to be completed efficiently and within the designated timeframe.
So the resource of Production team is not stable It is also lead to high turnover rate that greatly affect to the team's performance
High employee turnover significantly impacts the workflow of remaining team members When a team member resigns, the others must compensate for the workload to maintain project momentum This increased burden can diminish the quality of their work, ultimately affecting the overall product quality.
This is also effect to the recruitment costs, time, and effort of Human Resource Department to recruit new replacement in particular and in company's revenue in general.
INEFFECTIVE PERFORMANCE APPRAISAL
The performance of the production team has historically posed challenges due to the inexperience of many young employees, leading to mistakes that impact product quality However, these individuals bring energy, creativity, and a strong desire to learn, making them valuable assets for the company To harness this potential, the company is committed to ongoing training and development, aiming to elevate their skills and produce high-quality products that can attract investors, similar to successful products from the past.
An in-depth interview with HR manager has been conducted and she said: “
“Team products' target are frequently changed to match the nature of the work and ineffective performance appraisal is demotivated the employee to perform the best performance”
“In production team the performance appraisal is quite difference from other department
In a team setting, when one member (A) possesses less expertise than their colleagues, the more experienced teammates are often willing to assist by taking on some of member A's responsibilities This collaboration allows member A to focus on leveraging their unique strengths to support the team in other areas.
In a new production project, Employee A is initially assigned a task but lacks the necessary qualifications, prompting Employee B to assist in completing the work Similarly, Employee C will support Employee B during challenging phases of the project This transfer of responsibilities may lead to biased KPI assessments, ultimately impacting the year-end performance evaluations for all employees involved Research by Moradi, Mehraban & Moeini and Harrington & Lee indicates that effective performance appraisals enhance employee productivity, while ineffective assessments can result in diminished team performance.
As Cawley, Keeping & Levy 7 ; Roberts 46 ; Singh 53 mentioned, “There are very few studies and literatures on employee participation focus on performance appraisal”
In addition, Daoanis 12,13 with a clear vision, constructive feedback in the appraisal process is expected to provide for employees to participate in performance appraisal
And from Mr Nguyen Minh Thang – team member, said that:
“Well, I think that currently SMI are lacking of KPI to manager the performance of Production team and I am not satisfy with my performance appraisal
And when we are completed the assignment, we evaluate the effect of the teammate’ input is higher than member’s input for both direct and indirect in-charged person
Even the member is support for other task to fulfil the assignment”
And from Ms Nguyen Ngoc Bich – Developer who work for nearly 02 year said that:
Our production team operates uniquely, relying on SMI's invested funds to sustain our operations However, due to the absence of product investment and key performance indicators (KPIs) to measure our performance, we have not received bonuses for several years.
Performance assessment enables companies and employees to define and evaluate individual performance benchmarks, fostering a sense of commitment among workers Additionally, it encourages underperformers to enhance their contributions, ultimately benefiting the organization as a whole.
Over the past three years, the performance appraisal system has proven ineffective, leading to a significant decline in the performance ratios of the development team The percentage of developers achieving outstanding and highly effective performance has dropped to nearly 50%, with many now categorized as effective or underperforming.
(Source: SMI Performance appraisal ratio from 2016 - 2019)
This performance appraisal evaluates the revenue generated by previously developed new technology products, referencing the product testing report detailed in Table 3.
From the information obtained, it can be seen that the ineffective performance appraisal greatly affects the performance of the Production team
From Trong’s opinion: Developer who has low performance result:
In recent years, we have struggled to launch successful products that meet customer demands, resulting in low sales revenue Despite our efforts to develop various products, the rapid increase in competition within the industry has hindered our performance, leading to minimal salary increases and a lack of bonuses for our team.
And Nam Vũ a Leader also said that:
Certain team members possess strong intelligence yet display counterproductive behaviors They often feel demotivated when required to redo tasks that were not completed correctly While some individuals outright refuse to rework these tasks, others feel obligated to assist them This cycle of rework ultimately leads to decreased team performance and overall low motivation.
By stated at Roberts 46 , the ineffective performance will be a consequence of less or non- participation of employee, since they may see it valueless as stated by Wright 57
Conducting performance evaluations without clearly defined goals can lead to worker discontent, ultimately decreasing productivity and organizational engagement To foster a positive appraisal environment, it is essential that the evaluation framework provides clear direction and constructive feedback, encouraging employees to meet performance standards and set achievable targets.
LACK OF LEADERSHIP
A recent survey indicates that 25% of leaders in young generation companies lack essential leadership skills, a concerning statistic that can adversely affect employee performance This deficiency often stems from insufficient training and coaching, compounded by negative personality traits exhibited by leaders Researchers have identified these detrimental characteristics as "toxic" leadership (Frost, 2018; Padilla et al., 2010), "abusive" leadership (Tepper, 2007), or "destructive" leadership (Kellerman, 2004; Schaubroeck et al., 2011; Mumford et al., 2010) Addressing these issues is crucial for fostering a positive work environment and enhancing overall productivity.
From Internship member – Mr Nguyen Duc Tuan, he said that:
During our internship program, opportunities for direct communication with our leader are limited, which hinders our ability to provide feedback and receive coaching effectively.
Young individuals often seek to express their voices, opinions, and thoughts However, they may face challenges in problem-solving and have their suggestions dismissed due to perceptions of inexperience.
Leadership is a crucial element in project management, significantly influencing project outcomes According to Shenhar et al., effective leadership is indispensable, while Kerzner identifies it as a critical success factor that can determine a project's success or failure.
Toxic leadership can lead to detrimental effects on organizations, including high turnover rates, decreased revenue for stakeholders, and instability among team members This negative impact extends to the leaders themselves, as highlighted by various studies (House and Howell, 22; Conger, 10; O’Connor et al., 39; Zaccaro et al., 58; Kellerman, 25).
From Lombardo et all 31 : lack of leadership will lead to the following negative result:
Inability to build a strong team
Not supportive and demanding of subordinates
Having poor relationship with team member
And from Mr Nguyen Ngoc Tuan – Developer who has low performance result:
Several staff members are dissatisfied with their performance appraisals and the absence of bonuses, which contributes to their lack of motivation The SMI production team, being a specialized department, currently faces challenges in performance management due to insufficient leadership support.
Young employees require continuous feedback on their work responsibilities, as annual performance evaluations are insufficient They benefit from regular assessments from their leaders, especially when they make progress in developing new products This ongoing support fosters their growth and enhances their contributions to the team.
Software quality is traditionally influenced by various factors, including leadership, training, experience, and particularly the teamwork dynamics among developers Research by Hoegl & Gemuenden, Liang et al., and Henderson & Lee emphasizes that effective teamwork and interaction processes are crucial for quality outcomes Additionally, inadequate leadership skills can result in misjudging team performance, ultimately leading to ineffective performance appraisals.
Based on primary and secondary data, including interviews and surveys conducted among team members, it has been identified that the production team at SMI is currently experiencing low performance This issue will be further illustrated through a cause-and-effect map.
CAUSE VALIDATION
An analysis utilizing a cause and effect tree, in-depth interviews with 12 respondents across four main groups, and secondary data from the SMI sales and marketing department reveals that ineffective performance appraisal is a key factor contributing to the low performance of the production team It is crucial for SMI to identify the primary causes behind the production team's underperformance in order to implement effective solutions.
Ineffective leadership significantly impacts team performance, particularly when leaders are distant and fail to provide adequate training and clear KPIs Young team members often struggle to train their peers due to their own lack of experience, further contributing to low performance levels Additionally, a leader's tendency to always assert they are right can hinder team dynamics, as noted by Dotlich and Cairo According to Paton, successful leadership encompasses four distinct styles, highlighting the importance of effective guidance in fostering a high-performing team.
First is the category of innovative specialist leaders
Second is the category of qualified leaders
Third is the category of normal leaders
Ineffective leaders are those who, despite being placed in charge of initially successful and viable companies, ultimately undermine their potential, leading them toward bankruptcy and liquidation.
The Director of the Production team confirmed that a lack of leadership was not a significant issue, as team members received training from their Manager, who is responsible for their development Moving forward, the company aims to enhance leadership management skills among leaders, which will positively impact team performance.
A lack of leadership can result in diminished teamwork spirit, which contributes to a high turnover rate in production teams, as evidenced by employee status data from 2016 to 2019 This decline in performance negatively impacts customer satisfaction, ultimately affecting sales revenue Furthermore, it has been noted that when salespeople underperform, sales managers often respond by increasing pressure in a negative manner.
As by Faraj and Sproull 15 “Teamwork is obviously important in software development In traditional development, the study showed a strong relationship between management of expertise and team performance
Furthermore, from in-deep interview with Vu Tien Nhat – a member a production team said that:
Young employees possess significant talent; however, the nature of IT work often results in reduced face-to-face communication Instead, they primarily rely on technology tools and apps for interaction This reliance on digital communication can lead to misunderstandings and poor collaboration, ultimately impacting the quality of the products they create.
As by Faraj and Sproull 15 “Teamwork is obviously important in software development In traditional development, the study showed a strong relationship between management of expertise and team performance”
In the IT industry, team members often rely on digital communication tools such as Skype, Zalo, and WhatsApp to stay connected However, this preference for virtual interaction over face-to-face communication has led to a decline in team spirit As a result, members of the production team have expressed feelings of disconnection, highlighting the need for improved interpersonal engagement within the team.
In the technology industry, low team spirit among employees is not a significant issue, as they often prefer straightforward communication and can effectively collaborate through online meetings to review work results Consequently, this limited interaction does not significantly impact the overall performance of production teams.
At SMI, a new technology product is deemed a failure if it fails to meet market expectations and receives negative feedback from clients This reality reflects the highly competitive nature of the IT industry, resulting in only a handful of SMI's products making a significant market impact When a product shows potential for development, management dedicates substantial time and resources to nurture it; otherwise, it is classified as a failure.
The success of a technology product hinges on various factors, including convenience, availability, and unique advantages Currently, many competitive technology products on the market offer similar features and functionalities, which diminishes their appeal to investors and potential customers.
Therefore, from the perspective of Mr Nguyen Tuan Khai - Sale/Marketing Manager:
“The quality of products is unstable; I received many complaints from customer for that issue I lost many customers for that reason It reduced my sales revenue
And “failure product” has been impacted a negative result on sales performance of Sale team and the reputation of the company”
In SMI, a new technology product may be deemed a failure if it does not meet performance expectations, leading the company to decide whether to continue re-testing, upgrade its features, suspend its development, or discontinue it entirely, based on financial resources and team capabilities A notable example is Spynkal, which required significant time, effort, and budget investments.
SMI for months but the product did not bring any value or profit for the team and the company as well
The failure product is also the consequence of lack of leadership as from Mr Le Huu Minh – Developer who work for the team over 01 year said that:
Our team leader's busy schedule limits their ability to monitor each member's performance effectively This lack of leadership skills has resulted in some team members underperforming, particularly in tracking client requests, which are often slow and behind schedule.
The Production team, supported by investment from SMI company, experiences low performance not primarily due to product failures, as team members continue to receive their monthly salaries even in the absence of successful technology products.
An internal survey revealed that 40% of employees cited unattractive salaries and bonuses as a key issue affecting their motivation Despite the high salary standards in the IT industry, SMI's production team has not seen bonuses since 2017 due to a lack of successful product launches This cycle of no bonuses leading to low motivation and subsequently poor product quality is evident; however, it is not the sole factor impacting team performance SMI's management is committed to investing in talent development to foster the creation of profitable technology products, aiming to replicate the success of previous innovations that attracted significant investment.
The board of directors at SMI has identified ineffective performance appraisal as a critical issue, primarily due to the absence of Key Performance Indicators (KPIs) to evaluate the production team This lack of KPIs contributes significantly to the team's low performance Employee interviews reveal feelings of bias and ambiguity surrounding the performance appraisal process, with some leaders showing favoritism towards certain team members, resulting in inconsistencies Disagreements over final appraisal results often escalate into disputes, further complicating the situation.
And from Ms Nguyen Ngoc Bich – Developer who work for nearly 02 year said that:
RECOMMENDATION/ SOLUTIONS
Set up Effective KPI for Production team
Functional requirements: The benefits should exceed the cost
User requirements: The production team is small so we need to design solution it is must be easy to adapt and operate:
The KPI should fit with the present business policies & culture of the production team
Human resources, HR manager to work and cooperate with consultant organization
Arrange a meeting between the Development Manager, HR Manager, Consultant Company with related member to get idea and create the assessment outline for the team
The new KPI system should be specific and reachable for the team b Design restrictions
The project is expected to be completed within six months due to the fast-paced nature of the IT industry, which requires rapid adaptation to market changes.
SMI will combine with the HR consulting companies and the HR department to build a KPI with reasonable service fee with full package and not exceed VND 100,000,000 VND
Key Performance Indicators (KPIs) will be implemented for every project within each group, allowing teams to develop multiple technology products based on their members' capabilities The product development process will adhere to a new product lifecycle, featuring a condensed incubation period.
When a product achieves outstanding test results, the team will prioritize its development, allowing for multiple technology products to be created by each team rather than limiting them to a single offering.
This also helps to bring many advantages for assessing the capacity of team members through the products they contributed, so that KPI evaluation will be more effective d Benefits:
Build as much as technology product that the developer wish to and creating more opportunities for new products approach to the market
Create more creativity, productivity, the teamwork spirit of the developer
Save time and effort of the team in the progress of creating products
KPIs are clearly divided, easy to assess the ability of the member by their contribution to their individual product
Effective performance appraisal based on the evaluation of the contribution of each member of the team according to specific product that they have built
KPIs offer actionable information, as they are always measurable and quantifiable
The time and resources of different staff members in different functions are streamlined by automated scheduling in order to support team members
Developers have more insights and opportunities from their failures and achievements reported in order to improve their personal activities on their own
Managers and directors are able to see the general picture of the business from the information they have processed and the knowledge of the necessary reports
Training Team Leader
Provide training for potential leader to increase their interpersonal, leadership skill, performance evaluation skill to improve their team performance, teamwork spirit a Design requirements
Functional requirements: The benefits should exceed the cost
User requirements: The production team is small so we need to design solution it is must be easy to adapt and operate:
Apply for current and potential leader
Training manager to work and cooperate with training organization
The new training method should be specific and reachable for the leaders of the production team b Design restrictions
Training in the IT industry should be completed within one month due to the fast-paced nature of the sector Rapid changes in technology and market demands require leaders to quickly adapt, leaving them with limited time for lengthy training programs.
The company is committed to enhancing the skills of potential leaders through comprehensive external and internal training programs With a dedicated annual training budget, the firm collaborates closely with the training department to maximize efforts in developing effective leadership solutions.
The training is indoor training for 08 leaders of the team with full package as below:
No Description Estimating Cost VND
1 Training with full certification ( 4 days) – 04 hours/ day 30,000,000
2 Catering, lunch, tea break and activities 4,000,000
Improve efficiency of the workforce
Improve ability to succeed under pressure
Improve charm and seriousness in business operations
Growth in faith in your team
Improve listening and communication skills
Increase knowledge of the nature of the workforce
Dependable, efficient and knowledgeable workforce
ORGANIZATION OF ACTIONS
To enhance performance management, decision-makers should prioritize the implementation of Key Performance Indicators (KPIs) and training for future leaders, focusing on cost-effective strategies Directors and managers must take immediate action by assessing staff expertise and collaboratively developing a comprehensive plan that outlines key activities, timelines, and associated costs.
Task Department Jun July Aug Sep Oct Nov Dec
Research & Collect the information about current KPI system for Production team
HR Dept, Production Manager, Team member
Build questionnaire/criteria, conduct survey, collect data
Testing and receive feedback from related department, adjustment
Appraisal and make the improvement
BOD, HR, Production Manager Sourcing Training Organization HR,
List out potential leader for training
Organize the training for potential leader
Receive feedback for the Trainer, Leader
Evaluate the effective of the training and make the improvement for the next training
CONCLUSION
To ensure success in the competitive technology market, SMI must prioritize flexibility and consistency across its product offerings Over the past three years, the company has effectively maintained its core objectives and upheld product quality under its current management approach However, it is now essential for SMI to adapt its strategy for the Production team to sustain performance levels and continue driving innovation.
Improving team performance through proposed solutions will lead to significant changes in the production team, including enhanced leadership skills, a stronger spirit of teamwork, and an increased number of new products entering the technology market An effective evaluation system will also reduce job vacancies and recruitment costs, helping to stabilize personnel and allowing the team to concentrate on job development and new innovations.
To maintain a competitive edge and enhance their reputation, companies in the same sector as SMI must prioritize the development of innovative global technology products This focus not only attracts investment but also boosts sales revenue, helping management achieve their objectives over the next decade.
SUPPORTING INFORMATION
Research objectives: To explore and understand the reason why production has low performance results in 03 recent years, and propose solutions to solve it
No Key sessions Objectives Timing
To understand the current situation of business activities in SMI Production Department 2-3 minutes
Explore the cause of low performance results and define the main reason
To explore the main reason that lead to low
3 The solution To find out solution 5-10 minutes
1 Could you please introduce about yourself (your name, age, working experience) x x x x
2 Is SMI has a team to build up the own apps or services, product and deliver to the potential global company and client or not? x x x x
3 Could you share your opinion about sale revenue of
4 Could you share the reason why Sale team could not sell the product recently? x x x x
5 Could you share the reason why the client refuse to buy a product of Production team x x x x
6 In your point of view, what is the most important causes that leads to low performance results? Why do you think so x x x x
7 In your point of view, what is the most important causes low team spirit? Why do you think so
9 What are solutions that the company has taken to improve the performance of employee x x x x
9 What are your opinions about the effectiveness of above solutions? Could you share any alternative you think should be taken to solve this problem? x x x x
10 From above solutions, what is the best solution? Why? x x x x
Time of interview: 9:00, 19 Dec 2019 in HCMC
Duration for each interviewer: 10-20 minutes
Interviewee: Mr Nguyen Tuan Khai
Title: Sales & Marketing Manager in SMI Technology
Working experience period: more than 8 years’ experience in technology industry
Status: currently working for SMI Company
Duong Tran An An Good morning Could you introduce something about yourself and the position you are working in this company
Nguyen Tuan Khai has accumulated five years of experience as a developer at SMI and three years as a Sales and Marketing Manager Since the company's inception in 2016, he has been actively involved as a salesman, contributing to SMI's growth and success.
Duong Tran An An: over 3 years with a lot of experience Do you think that SMI product is potential or not?
Nguyen Tuan Khai expresses confidence in the promising future of SMI products, highlighting significant investments such as over $40 million in QA Symphony The company is actively working on developing new products to attract further investment.
Duong Tran An An: Sound great! Could you please share your opinion about sales results of SMI
Since 2017, Nguyen Tuan Khai has experienced a significant decline in sales performance, prompting an investigation into the root causes of the issue The instability in product quality has led to numerous customer complaints, resulting in the loss of many clients and a subsequent decrease in sales revenue.
And “failure product” has been impacted a negative result on sales performance of Sale team and the reputation of the company
Duong Tran An An: Could you share the reason why SMI production team cannot get high revenue during 2017 until now?
Nguyen Tuan Khai believes that the inability to sell the new product stems from its inconsistent quality and lack of a competitive edge within the same pricing segment as rivals As a result, the sales team struggles to create a strong impression or effectively communicate the unique value of the new product or service to potential customers.
A high-quality product must prioritize a deep understanding of customer needs Having transitioned from a developer to a salesman, I recognize the importance of this insight Initially, I was overconfident, believing that thorough testing alone would provide me with all the necessary knowledge about the new product.
Duong Tran An An: What are solutions that the company has taken to improve the situation Mr
Nguyen Tuan Khai, an expert in investor management at SMI, emphasizes the importance of interpersonal skills training to improve consulting and deal-closing abilities However, I believe our boss's approach may not be entirely effective, as it fails to address the differing needs of our sales team, which consists of both fresh and experienced members While newcomers may benefit from learning opportunities, experienced salespeople like myself may find such training less relevant.
Duong Tran An An: What are your opinions about the effectiveness of the solution? Could you share any alternative you think should be taken to solve this problem?
Nguyen Tuấn Khải believes that the majority of SMI consultants are seasoned sales professionals with backgrounds in the IT industry To ensure they effectively manage product quality, it is essential to establish a disciplined KPI system that encourages daily practice of product functions.
Interviewee: Mr Cao Minh Nhat
Title: Director of SMI Technology
Status: currently working for SMI company
Duong Tran An An: It is my great honor to be here in your office for this interview Please start by talking something about yourself sir!
Cao Minh Nhat: You’re welcome guy! My name is Cao Minh Nhat I am Managing director of
Prodution Team I have been worked for SMI 10 years from manager to now
Duong Tran An An: Could you tell me the current situation of the production team
Cao Minh Nhat: Yes, of course In recently we have no special product to release to the market
In the ever-evolving landscape of technology, innovation and widespread adoption are essential to satisfy customer demands However, over the past three years, the Production department has struggled to deliver new products that achieve the high performance and results of previous offerings, leading to a noticeable decline in effectiveness.
Product quality is crucial for ensuring customer satisfaction and driving company success When products consistently meet client needs and uphold core values, sales and marketing teams can confidently promote them Furthermore, maintaining stable product quality enhances customer satisfaction, while poor quality can lead to product failures and hinder client engagement.
Duong Tran An An expressed concerns about the sales reports, noting that the sales results in Ho Chi Minh did not meet expectations He seeks an explanation for the underperformance in sales.
Cao Minh Nhat attributes the results to several interconnected factors, including poor performance, outdated technology, product failures, high turnover rates among young employees, the absence of key performance indicators (KPIs), and employee dissatisfaction with performance appraisals.
Duong Tran An An inquired about the solutions implemented to address ongoing issues In response, Cao Minh Nhat acknowledged the presence of numerous problems and emphasized their commitment to identifying root causes He highlighted that the primary focus will be on enhancing performance management within the production team to effectively resolve these challenges.
Duong Tran An An: Have you ever think about other alternative solution?
Cao Minh Nhat: We also think about the training and upgrade the performance appraisal and build 360 degree feedback to support to current situation
Interviewee: Ms Le Thi Phuong
Title: HR Manager in Ho Chi Minh
Status: currently working for SMI company
Duong Tran An An: Thank you for participating in this interview with me Could you introduce something about yourself?
Le Thi Phuong: My name is Le Thi Phuong, I currently work for SMI company as a HR Manager
Duong Tran An An: Please tell me your own opinion about the production team?
Le Thi Phuong: Well, I think that currently we are lacking of KPI to manager the performance of Production team and staff are not satisfy with their performance appraisal
Duong Tran An An: Could you share the reason why SMI is facing challenges with this
Le Thi Phuong: Firstly, In my own opinion, SMI production team is a special department
The SMI product team is an ideal resource for filling vacancies in the outsourcing department, especially when employees resign By balancing project resources effectively, SMI ensures that all departments remain adequately staffed and operational.
Secondly, without KPI so their performance appraisal may be bias from the appraiser
Duong Tran An An: In your point of view, what is the most important causes? Why do you think so?
Le Thi Phuong emphasizes that the primary challenge lies in effectively managing the performance of potential developers She has experience in addressing conflicts between leaders and team members regarding performance issues.
Team products' target are frequently changed to match the nature of the work and ineffective performance appraisal is demotivated the employee to perform the best performance”
Duong Tran An An: What are solutions that the company has taken to fix the problem?
Le Thi Phuong: You know, we are in the progress of building KPI for Production team To manage their performance and evaluate their performance better
Duong Tran An An: So, In your point of view, what should be better alternative solutions?
Le Thi Phuong: A new Performance appraisal or 360 degree of feedback tool for us to keep in touch with all member and to connect all employees together
Interviewee: Mr Nguyen Minh Tam
Status: currently working for SMI company
Duong Tran An An: Nice to meet you sir! Could you introduce something about yourself? Nguyen Minh Tam: Hi! I’m Nguyen Minh Tam I manage Production team department I spent
10 years with SMI when I graduated from University until now
Duong Tran An An: Thank you for giving a little time for this interview What is the problem that the team is facing to?
Nguyen Minh Tam acknowledges the challenges faced in product and service testing, highlighting frequent errors and a low success rate that prolong the process However, he remains optimistic that through dedication and hard work, these issues can be resolved promptly.
Duong Tran An An: Could you please share more detail about test results of some tools, apps of SMI team
Nguyen Minh Tam: According to reports that the test results from Customers is decreasing
Most of them are neutral with our new product for testing automation, cleaning data, blockchain or personal healthcare system, etc
Duong Tran An An: Could you share the reason why it does not get the high result?