Objectives and aims
This thesis aims to achieve three key objectives regarding performance appraisal activities: first, to compile relevant theories and models related to performance appraisal; second, to conduct a case study of Techcombank to gain a clear understanding of its performance appraisal process; and third, to identify existing issues within Techcombank's performance appraisal system.
The student aims to identify the challenges within Techcombank's performance appraisal process and propose solutions to enhance both the appraisal system and human resource policies By addressing these issues, the improvements are expected to boost employee productivity and strengthen their loyalty to the organization.
Research questions
This article investigates two key research questions regarding Techcombank: the deployment process of performance appraisal and its effectiveness By examining these aspects, we aim to understand how Techcombank evaluates employee performance and the impact of this process on organizational success.
Scope of work
Scope of work is from 2005 to 2006 and the conducted area is departments in head office of Techcombank.
Data source and processing
Data for this study was gathered from two primary sources: firsthand information obtained through interviews and surveys to assess employee opinions on Techcombank's current performance appraisal system, and secondary sources, which include relevant documents and evaluation reports pertaining to performance appraisal activities within the banking sector.
Methods
This study will utilize a real case analysis of Techcombank, incorporating a questionnaire developed from theoretical frameworks The findings from the questionnaire will inform a practical assessment of employee performance, aimed at enhancing processes within Techcombank Additionally, interviews or focus groups may be conducted as needed to gather further insights.
Significance
The student aims for the thesis to offer valuable insights by thoroughly analyzing the performance appraisal process at Techcombank and suggesting improvements Additionally, it seeks to accurately assess employee performance and foster stronger loyalty and relationships between employees and the bank.
Limitations
Due to time constraints, the thesis is susceptible to errors, and the case study conducted solely at the Head Office may not capture the diverse perspectives of all Techcombank employees Additionally, since the survey results are sourced from the Human Resources department, there may be biases in sensitive information, impacting the overall accuracy of the questionnaire.
Expected results
The student aims to identify the current challenges in performance appraisal at Techcombank and leverage human resource management theories to propose effective solutions that enhance the performance management practices within the organization.
Outline of thesis
The thesis includes three chapters:
Chapter 1 - Theoretical Foundation: This section provides a comprehensive overview of performance appraisal theories, outlining key definitions and the benefits of performance management It discusses the criteria utilized in performance appraisals and explores various models, highlighting their advantages and disadvantages to enhance understanding of effective performance evaluation practices.
Chapter 2 - Findings: After analyzing the current position of Techcombank
This thesis conducts a SWOT analysis and examines survey results alongside data from secondary sources to identify key issues in Techcombank's performance appraisal practices It will analyze the existing problems within the bank, focusing on performance management policies and their implementation.
Chapter 3 - Recommendations: Building on the findings from Chapter 2, this section offers actionable solutions for implementing performance appraisal methods at Techcombank The student aims for these recommendations to be beneficial and effective not only for Techcombank but also for other commercial joint-stock banks facing similar challenges.
THEORETICAL FOUNDATION
Benefits of performance appraisal
A sound performance appraisal systems does not only bring benefits for the organization, but also for the managers and employees
An organization's performance appraisal system allows managers to assess the performance of both employees and supervisors, providing valuable insights into the capabilities of its human resources By analyzing the results of these evaluations, managers can effectively gauge the strengths and areas for improvement within their workforce.
Performance appraisals provide organizations with a foundation for making informed human resources decisions, enabling managers to effectively address training, promotions, development, and compensation Additionally, these appraisals serve as a reflection of the human resources department's success in various functions, including recruitment, selection, orientation, and promotion Consequently, managers can utilize these insights to develop and adjust future plans for organizational growth and employee development.
Enhancing the capabilities of an organization's current workforce is essential for addressing both present and future needs Performance appraisals provide valuable insights into employee and supervisor capacities, enabling the human resource department to make informed decisions This includes implementing rotation policies, conducting training programs to boost employee skills, promoting individuals to higher positions, and executing targeted recruitment strategies to attract qualified candidates, all aimed at supporting the organization's growth and development.
Utilizing appraisal tools and feedback mechanisms significantly enhances employee morale by fostering a positive work environment and improving attitudes When employees perceive that their performance is evaluated fairly and accurately, they are motivated to work more effectively and make greater contributions to the organization.
Performance appraisals provide supervisors with valuable insights into employees' understanding of their job expectations Each organization exists to meet societal needs, and employees play a crucial role in fulfilling these responsibilities By offering clear guidance on job requirements, supervisors can assess how well employees align their performance with these expectations Comparing appraisal results with job requirements enables managers to evaluate employees' comprehension of their roles Additionally, it is essential for managers to connect employee activities with the overall goals of the organization to ensure effective service delivery.
Performance appraisals are often viewed primarily as tools for determining salary increases and promotions, but they also play a crucial role in employee development By assessing performance, supervisors can identify areas where employees may be underperforming and provide targeted feedback to address these weaknesses A well-structured performance management system not only highlights deficiencies but also uncovers their underlying causes, enabling supervisors to collaborate with employees on effective development plans that enhance job performance.
Improves the productivity of morale of the supervisor’s employees:
Fair and transparent performance appraisals lead to employee satisfaction, as individuals recognize that their moral work will be accurately evaluated by supervisors This accuracy not only highlights areas for improvement but also boosts employee morale and productivity.
Performance appraisals enable supervisors to identify potential candidates for higher-level positions within their work unit By evaluating both employees and fellow supervisors, they can effectively assess capabilities and readiness for advancement, ensuring a seamless transition for future leadership roles.
A performance appraisal conducted in a fair and transparent manner fosters bilateral communication between supervisors and employees, allowing for the presentation of ideas for improvement This process not only highlights employee weaknesses but also evaluates the reasonability of supervisor feedback, promoting closer relationships within the organization By facilitating clear communication, performance appraisals encourage employees to actively seek ways to enhance both the organizational system and their personal development.
Performance appraisals offer employees a valuable opportunity to assess their behavior and performance within the organization This process enables them to recognize their significance, identify areas for improvement, and understand the requirements necessary for advancement, including knowledge, skills, and work attitude A fair and transparent appraisal, complemented by constructive feedback from supervisors, motivates employees to strive for excellence and seize future opportunities for growth and promotion.
During the performance appraisal, employees gain valuable insights into their supervisors' perceptions of their work, fostering open communication about performance This process culminates in personalized feedback, where supervisors provide comments and advice tailored to each employee Such recognition of contributions not only affirms employees' efforts but also promotes a sense of fairness in evaluations across the organization As a result, employees are motivated to enhance their performance, knowing their unique strengths and areas for improvement are acknowledged.
Performance appraisal system
In order to do appraising work, the organization need to set up a performance appraisal system includes three fundamental elements:
Performance appraisal criteria involve various evaluation methods to assess employee performance by comparing actual results with expected outcomes A robust criteria system includes both qualitative and quantitative requirements that are essential for job performance These requirements should be established based on objectivity and reasonableness, ensuring they accurately reflect the behaviors necessary for effective job execution.
To effectively measure employee performance, managers must utilize standardized criteria and conduct administrative evaluations to determine performance levels The appraisal process starts with clearly communicating the appraisal framework and program to employees Establishing specific operating goals for each employee is essential, as performance evaluations are based on these predetermined objectives The performance appraisal process consists of four key steps that guide this evaluation.
To effectively prepare for the appraisal interview, the appraiser must gather comprehensive information regarding the appraisee's performance during the appraisal period This includes details about assigned job responsibilities, specific assignments, programs participated in, projects managed, and events attended Additionally, the appraiser should assess the nature of relationships and interactions with seniors, colleagues, juniors, partners, and customers Key achievements, recognitions, failures, and any disciplinary actions should also be documented, along with issues encountered or resolved and any complaints received.
At the start of the appraisal interview, the appraiser should clearly outline the objectives and process to establish trust with the appraisee To gain insight into the appraisee's working conditions, the appraiser can ask targeted questions, such as identifying the most challenging operating problems faced, difficult clients or partners, and areas for organizational improvement The responses to these questions provide valuable information about the employee's work environment, which is essential for evaluating the gathered evidence effectively.
Once the appraiser understands the appraisee's operating environment, they will initiate the formal appraisal process by collecting the necessary evidence to assess the employee's performance effectively.
Evidence grading involves assessing an employee's performance by comparing actual results against expected outcomes based on established requirements and standards This evaluation allows the appraiser to determine the effectiveness of the employee's work performance.
Measure the performance is the centre of performance appraisal
Appraisers provide personal feedback by discussing appraisal ratings and their rationale with each employee, while also documenting the employees' perspectives on the evaluation Additionally, appraisers outline actionable steps for employees to enhance their performance The organization then compiles comprehensive reports on the appraisal outcomes to facilitate future analysis and improvements in the evaluation system.
Performance measures criteria
Strategic congruence refers to how effectively a performance management system aligns employee performance with an organization's strategy, goals, and culture It highlights the importance of providing guidance to employees, enabling them to contribute to the organization's success While many companies maintain static appraisal systems over time, a shift in strategy necessitates corresponding changes in employee behavior to ensure alignment with new organizational objectives.
(1), Noe Hollenbeck Gerhart Wright “Human resource management”, Second edition 1996, p.200
Validity refers to the degree to which a performance measure accurately assesses all relevant aspects of job performance, commonly known as content validity For a measure to be valid, it should avoid deficiencies, where not all performance aspects are evaluated, and contamination, where irrelevant or non-job-related factors are included The goal is to maximize the overlap between actual job performance and the performance measure, while minimizing contamination, although complete elimination is often challenging.
Reliability in performance measurement refers to the consistency of evaluations, particularly highlighted by interrater reliability, which assesses the agreement between different evaluators regarding an employee's job performance Research suggests that many subjective supervisory assessments tend to show low reliability Additionally, internal consistency reliability is crucial, ensuring that all items within a measure are cohesive Furthermore, test-retest reliability is essential, as it indicates that a performance measure should yield similar ratings over time; significant variations in ratings based on timing suggest a lack of reliability.
Acceptability is crucial for the effectiveness of performance measures, as it determines whether users are willing to adopt them Even highly valid and reliable measures can be disregarded by managers if they are too time-consuming, making a non-accepted system nearly as ineffective as having no measure at all Therefore, it is essential to engage stakeholders in the development process to ensure the performance measures are practical and embraced.
(1), (2), (3) Noe Hollenbeck Gerhart Wright “Human resource management”, Second edition 1996, p.201 managers and employees in the development of performance measures Research has found that this increases the acceptability of the system
Specificity in performance measures is crucial as it provides clear guidance to employees on expectations and how to meet them This clarity is essential for both strategic and developmental aspects of performance management When a measure lacks specificity regarding an employee's role in achieving the company's strategic goals, it hinders the organization's ability to fulfill those objectives Furthermore, if performance measures do not identify areas for improvement, employees are left with little opportunity to enhance their performance.
Errors should be avoided in performance evaluation
Error of favoritism: This happens when the supervisor favor some body than others It will make the result of the performance evaluation incorrect
Error of average tendency: The rater does not want to take offence or displease others then he has tendency to evaluate employees a little higher than average level
Extreme rating errors occur when supervisors are excessively strict, giving low ratings to all employees, or overly lenient, assigning high ratings across the board This inconsistency complicates the differentiation of employee performance among those evaluated by the same rater and creates challenges when comparing individuals rated by different supervisors.
Error of preconception caused by culture customs: The supervisor’s opinion may be erroneous because of the supervisor’s culture habits
(1) Noe Hollenbeck Gerhart Wright “Human resource management”, Second edition 1996, p.201
Error of prejudice: The supervisor may dislike a group or a working class then the evaluation about their performance can be subjective and incorrect
The latest event's influence on supervisor evaluations can be significantly swayed by employee behaviors and attitudes When an employee demonstrates a positive performance aspect, it can lead the supervisor to rate all other performance areas favorably Conversely, a single negative behavior may cause the supervisor to assign low ratings across the board, highlighting the impact of recent actions on overall performance assessments.
Performance appraisal methods
The attribute approach to performance management assesses how well individuals possess specific traits deemed essential for a company's success This method primarily measures employee characteristics that are critical for performance evaluation Techniques within this approach typically identify key traits such as initiative, leadership, and competitiveness, and then evaluate individuals based on these criteria.
Graphic rating scales are a prevalent method in performance management, where evaluators mark their assessments on a continuum or specific points This method involves two key steps: selecting relevant traits and measuring them effectively The traits assessed are typically categorized into two types: those directly related to the job and those indirectly related Supervisors evaluate employees based on factors such as quantity, quality, initiative, dependability, cooperativeness, and overall work quality Performance judgments are then recorded on a categorized scale, allowing for a structured assessment of employee performance.
Using graphic rating scales have some advantages such as:
(ii) Comparatively simple to establish
(iv) Relatively inexpensive to develop
(v) Give the same information on all employees
(vi) Quantify the number of employee’ performance
However, this method contains some disadvantages like:
(i) The specific characteristics of each job may be ignored
(ii) This method is easily impacted by subjective errors They can lead to incorrect performance evaluation (bias opinion, prejudice, preconception, average tendency, leniency, so on)
(iii) Graphic rating scale method can generate problems if choosen criteria are not suitable
(iv) Standards are may be unclear
(v) One of the biggest problems with graphic rating scale is that many supervisors have a tendency to evaluate everyone a little above average (1)
The essay method of performance evaluation involves supervisors crafting detailed statements regarding an employee's performance, highlighting strengths and weaknesses, assessing promotion potential, and providing recommendations for improvement This method allows for a comprehensive analysis of various aspects, including the employee's work behavior, training needs, and opportunities for professional development.
The advantages of this method include:
(ii) Help to provide opportunity to point out the characteristics of employee
(1) Leslie W Rue and Lloyd L.Byars, “Supervision: key link to productivity”, Fifth edition 1996, p.210
(iii) This method provide detail and useful feedback for employee (point out strengths, weaknesses)
(iv) The employees can gain the right working orientation from the suggestion and recommendation of their supervisor
The disadvantages of this method include:
(i) It is difficult to use narrative information in human resource decision
(ii) The accuracy of narrative information much depends on the rater’s writing ability
(iii) The length and the content of the of the written statement can vary considerably from supervisor to supervisor (1)
(iv) It is difficult to compare essay appraisals made by different supervisors
(v) Comparing essay evaluations might be difficult because no common criteria exist
The checklist method involves supervisors creating a list of statements that reflect employee behavior and attitudes in the workplace Rather than providing an evaluation, supervisors use this method to record performance by marking yes or no responses to various questions about the employee's conduct This approach offers several advantages, including structured feedback and the ability to track performance consistently.
(i) It is easy to use
(ii) The scoring key for the check list is usually kept by the human resources department, which computes the relative rating of the employee
(iii) Individuals with high scores are rated as better employees than those with low scores
(iv) This method avoid average tendency or leniency
(1) Leslie W Rue and Lloyd L.Byars, “Supervision: key link to productivity”, Fifth edition 1996, p.210
The disadvantages exist in this method are:
(i) Supervisor are generally not aware of the values associated with each question
(ii) The questions can be figured out the positive and negative aspects, so bias can be introduced into the answers (iii) Assembling the question is a difficult job
(iv) A different set of questions must be assembled for most job categories
(v) General narrative statement can not reflect specific characteristics of each job
Here is an example illustrated for check list method:
Full name of rater Department
………… Keeping the working place clean and tidy
………… Finishing the work on time
………… Having a tendency to get into unnecessary conflicts with other people
………… Ability to acquire knowledge and to use it in concrete situations
Managers should recognize that attribute-based performance methods are widely favored in organizations due to their simplicity and adaptability across different roles and strategies By focusing on identifying and clearly defining job performance attributes in the evaluation tools, these methods can achieve reliability and validity comparable to more complex measurement techniques.
Many performance management techniques fail to meet key effectiveness criteria, often lacking alignment with the company's strategic goals Additionally, these methods tend to establish ambiguous performance standards that can be interpreted in various ways by different evaluators.
Many performance evaluation techniques lack clear guidance for employees on how to align with company goals or address performance issues Furthermore, the feedback provided by raters often triggers defensiveness among employees, hindering constructive dialogue.
The behavioral approach to performance management focuses on identifying the specific behaviors necessary for employees to succeed in their roles This method involves defining these behaviors and requiring managers to evaluate how well employees demonstrate them Additionally, behavioral approaches provide valuable insights for employee development, utilizing various common techniques to enhance performance.
The critical incident method involves managers documenting specific instances of both effective and ineffective employee performance By tracking these significant actions that impact departmental effectiveness, whether positively or negatively, managers can provide evaluations based on actual behavior.
The principal advantages of this method are:
(i) Provides the employee with an opportunity to establish an understanding of the behavior that the superior is seeking
(1) Noe Hollenbeck Gerhart Wright “Human resource management”, Second edition 1996, p.207
(2) Noe Hollenbeck Gerhart Wright “Human resource management”, Second edition 1996, p.209
The incidents provide targeted feedback to employees, highlighting their strengths and areas for improvement, while aligning with the company's strategic goals by emphasizing those incidents that best reinforce the overall strategy.
(iii) Forces supervisor to evaluate subordinates on an ongoing basis The disadvantages which this method used to meet are:
(i) The supervisor must record pertinent incidents as they occur This can be time consuming and burdensome
(ii) The strong tendency to record or stress primary negative incidents (iii) Many managers resist having to keep a daily or weekly log of their employees’ behavior
(iv) It is also often difficult to make comparisons among employees, since each incident is specific to that individual
(v) The employees may feel unsatisfactory when knowing the supervisor record their bad behavior
Behaviorally Anchored Rating Scales (BARS) combine traditional rating scales with the critical incident method to evaluate job performance This approach involves collecting numerous critical incidents that illustrate both effective and ineffective performance These incidents are then categorized into specific performance dimensions, with expert consensus determining which examples best represent varying levels of performance, ultimately guiding raters in their evaluations.
(i) More accurate than other traditional rating scale
(ii) The traits are chosen more carefully
(iii) Create the unity and consistency between supervisors because this method evaluates observable behavior rather than raters’ subjective perception
(iv) Increase interrater reliability by more specifically defining the performance dimension
This method can lead to biased information recall, as behaviors that closely resemble the anchor are more readily remembered than others Additionally, developing Behaviorally Anchored Rating Scales (BARS) is more time-consuming and expensive compared to other evaluation methods.
Here is an example of rating employees’ performance by applying this method
On the date of appraisal, the employee consistently demonstrates excellence by arriving early to work, fully prepared with all necessary equipment They effectively utilize the time before roll call to review the activities from the previous shift and stay informed on any new bulletins, taking diligent notes during roll call to ensure a smooth transition of responsibilities.
Good 6 Always early for work, gathers all necessary equipment to go to work, fully dressed, checks activity from previous shifts before going to roll call
When evaluating work readiness, a score of 5 indicates that an individual arrives early, fully dressed, and equipped with all necessary tools for the job A score of 4 reflects punctuality and complete preparation for work A score of 3 suggests that the individual is not fully dressed and lacks some essential equipment A score of 2 signifies tardiness, failure to inspect equipment or vehicle for damage, and an inability to commence work without returning to retrieve necessary items.
Terrible 1 Late for roll call majority of period does not check equipment or vehicle, does not have necessary equipment to go to work
Evaluation of the behavioral approach:
The behavioral approach is an effective method for aligning a company's strategy with the specific behaviors needed for successful implementation, offering employees clear guidance and feedback on performance expectations However, its effectiveness can be hindered by the organizational context, as it requires ongoing monitoring and adjustment of behaviors and measures to maintain alignment with the strategic focus.
FINDINGS
Macro analysis
Since transitioning from a planned economy to a market-oriented approach in the late 1980s, Vietnam has experienced significant economic growth, with an average growth rate of around 8 percent from the 1990s to the present This robust growth has led to a notable increase in GDP and per capita income, which rose sharply from USD 390 in 2000 to USD 730 in 2006 All economic sectors, including industry, services, and finance, have shown accelerated growth, enhancing capital efficiency Although inflation has posed challenges to the economy and living standards, it has recently been brought under control, contributing to stable foreign exchange rates and interest rates.
Since the implementation of the Doi Moi open-door policy, Vietnam has embraced globalization, joining international organizations such as ASEAN, AFTA, and the WTO in 2006, marking a pivotal moment in its negotiation history This milestone has significantly boosted foreign direct investment (FDI), which exceeded USD 10.2 billion in 2006 Investors are attracted to Vietnam due to its robust GDP growth, strong consumer demand, and stable macroeconomic and socio-political environment, making it one of the safest countries globally Additionally, Vietnam boasts a young, skilled, and cost-effective labor force, coupled with a high literacy rate exceeding 92%, facilitating rapid access to international high technology and knowledge.
In 2006, the Vietnamese banking system experienced significant prosperity, marked by robust growth rates and ongoing financial market reforms Key developments, such as the Draft Ordinance on Foreign Exchange and the Decree on Anti-money Laundering, highlight Vietnam's commitment to enhancing free capital flow and advancing its financial and banking sectors.
The Vietnamese banking system is evolving due to supportive government policies and the State Bank of Vietnam's initiatives, gradually aligning with international standards Currently, banks provide 30% of the economy's total capital and fulfill 40% of business financing needs In 2006, outstanding loans in the banking sector accounted for 60% of GDP, with an impressive average return on equity of 30% Domestic banks, particularly joint-stock institutions, are investing in advanced banking technologies, skilled personnel, and innovative financial products while seeking foreign partnerships to boost competitiveness and prepare for economic integration.
Vietnam's dynamic economic and social landscape positions it as a rapidly growing nation, driven by a youthful population These essential elements are key to ensuring sustained growth in the country's financial sector for the long term.
Techcombank introduction
Since the "Doi Moi" period, the Vietnamese government has relaxed regulations governing the establishment and operation of non-state credit institutions, leading to the robust growth of commercial joint stock banks These banks are now enhancing various business aspects, including capital, human resources, technology, distribution networks, and international collaboration Many are forming strategic partnerships with foreign entities to achieve mutual benefits.
Techcombank, officially known as Viet Nam Technological and Commercial Joint Stock Bank, was established following the government's easing of banking regulations With 14 years of successful operation, Techcombank has achieved significant milestones in registered capital, profit, risk management, banking technology, and product development Currently, it boasts a registered capital exceeding VND 1,500 billion and total assets of VND 18,000 billion, positioning itself among the top five largest joint stock banks in Vietnam and solidifying its status as one of the most successful institutions in the sector.
In 2006, the bank achieved a profit before tax of VND 356 billion, ranking as the third highest among commercial joint stock banks, with a return on equity (ROE) of 16% This strong performance allowed for a significant increase in the dividend ratio, greatly encouraging shareholders, staff, and partners, while enhancing the bank's prestige and contributing to the success of its recent share issue The bank also opened a record number of new branches, expanding its network to nearly twenty provinces and cities, in alignment with Techcombank’s retail banking development strategy, effectively meeting customer demand By the end of 2006, Techcombank employed 1,584 staff members, reflecting an increase in both quantity and quality of personnel.
Figure 2-1: Some Main Figures of Techcombank
Techcombank is dedicated to preserving its leadership in banking technology by upgrading its core banking system to the latest T24 R5 version from Temenos Holding (Switzerland), which supports 24/7 transactions Additionally, the bank has successfully implemented the Switching and Card Management system software from Compass Plus, allowing for efficient issuance of credit and debit cards and streamlined management of payment operations.
Techcombank leverages cutting-edge banking technology to offer a wide array of modern and convenient financial products tailored for both businesses and consumers With a commitment to quality, the bank delivers a comprehensive suite of high-quality services designed to meet the diverse needs of individual customers and enterprises alike.
In recent years, Techcombank has focused on market segmentation of individual customers as part of its strategic approach The bank's expansion of its network, innovation in banking operations, and training of customer relationship officers have significantly enhanced its retail banking services As a result, customers now enjoy a range of advanced, technology-based, and value-added financial products that are both diverse and user-friendly.
Techcombank excels in business banking by offering a comprehensive range of services tailored for small and medium enterprises as well as larger corporations The bank not only provides traditional banking products but also continuously innovates with new offerings This commitment to diversifying its business banking solutions and enhancing service quality has led to a significant expansion in the variety of products and services available to business clients As a result, Techcombank has established a competitive edge in the industry, providing customers with numerous choices and conveniences that cater to their specific needs.
In the Treasury market, Techcombank provides a comprehensive a range of products consisting of foreign exchange, money market and security trading, hedging and derivative products for many domestic and international customers
Techcombank is committed to offering a diverse array of financial products and services tailored to meet the varied needs of domestic customers In addition, the bank is actively pursuing partnerships with international and regional financial institutions to enhance customer satisfaction and support the ongoing economic integration process.
Improvement of service quality and corporate governance by re- engineering business processes and management information systems, as well as risk monitoring and management systems
The launch of numerous innovative products with advanced features has significantly enhanced productivity and bolstered the bank's public image, all attributed to the implementation of modern and up-to-date IT systems and applications.
The mobilization of funds, outstanding loans, and international settlements has significantly increased compared to the previous year Successful implementation of crucial marketing and business support programs in areas like corporate identity, quality management, market research, and staff recruitment and training has contributed to this growth.
Priority business directions for the period of 2005 to 2010: Techcombank has been implementing strategies for the 2005 – 2010 period, focusing on:
The retail banking sector in Vietnam aims to broaden its customer base by offering a diverse range of high-quality and competitive financial products and services, specifically targeting urban residents, particularly young and affluent individuals with medium to high incomes.
Fast implementation of card switching and management systems, and development of card services as the core for developing large scale retail banking services
To enhance our customer base among individual and small to medium enterprises, we are rapidly expanding our network in key high-potential economic areas This strategic growth aligns with Techcombank’s development strategies for 2005 to 2010, establishing strong foundations for future success.
We enhance our service quality through continuous improvement by leveraging management information systems (MIS) and identifying customer needs Utilizing tools like customer relationship management (CRM), we measure customer satisfaction and standardize our business and customer service processes.
Fast development of risk management services for businesses and investment services for individuals and high net worth customers
In 2005 and beyond, the bank prioritizes the development of robust human resources to drive its growth, emphasizing the training of management and marketing skills for its managers, alongside enhancing customer service skills for its staff.
Continuation of upgrading the bank’s IT system and applications, to enable the system to operate 24/7 throughout the network
Implementing successfully business targets and directions planned will strengthen the bank’s position and create strong foundations for it to fulfill the goal of becoming a leading joint stock bank.
SWOT Analysis
One of the longest time established commercial joint stock banks Techcombank has a longer time in operations than others (established from
1993) so Techcombank is the pioneer in the joint stock banking
The board of directors and board of management are talent and have many experience
After several increases in registered capital, Techcombank has become one of the five largest joint stock bank in terms of registered capital and total assets
The bank also demonstrated its leading position in terms of growth, profitability, technology and network development
Credit quality has been maintained and closely monitored, loan loss provision has been regularly controlled to ensure the safety of the bank’s operations
In 2005, the bank enhanced its labor productivity through technological support, leading to the implementation and improvement of processes for new products This advancement allowed for more effective management of key balance sheet items, including deposits, loans, and the term structures of loans.
The bank has significantly enhanced its human resources in both quantity and quality through selective recruitment and ongoing training By streamlining transaction procedures and innovating its quality management system to align with ISO 9001:2000 standards, the bank has effectively utilized its IT systems These strategic measures have greatly contributed to improved productivity.
Techcombank stands out as a frontrunner in Vietnam's banking sector, emphasizing advanced technological applications to enhance its services With well-defined objectives and strategic plans, the bank prioritizes the integration of innovative technologies to deliver modern, precise, automated, and real-time banking solutions.
Communication and public relations activities actively supported the popularizing Techcombank’s image and trademark Communications and marketing campaigns also contributed to a public impression of a young and dynamic bank
Techcombank has cultivated a cohesive brand image across nearly 80 branches and sub-branches nationwide, ensuring consistency in elements such as logos, furniture, transaction counters, and stationery By effectively implementing a uniform trademark policy, Techcombank has become a recognizable and familiar presence among the public.
Techcombank leads the way in Vietnam by implementing the ISO 9001:2000 quality management system, establishing a robust framework for stable and sustainable growth This initiative not only enhances the bank's operational efficiency but also sets it apart as a key player in the competitive local banking sector.
It develops only vigorously in the Northern area, it does not yet develop in the Central and Southern region while Southern market has about threefold economic scale over Hanoi
Expanding the current operational network has led to a shortage of human resources, causing several managers to be promoted despite their incompetence due to the lack of available staff.
The rapid urbanization during current reforms contrasts sharply with the underdeveloped infrastructure in many rural areas, where banking technologies have not evolved in tandem Techcombank lacks robust strategies for growth in these regions, as its high-tech products often do not align with the specific needs and conditions of rural communities.
Techcombank focuses on serving medium and small enterprises while also prioritizing the growth of individual clients and business households This strategic approach aims to enhance its market presence, especially during global financial integration, while managing the challenges of international financial supply.
Most Techcombank's staffs are young, therefore their experiences are still lacked and professional skills are not high
Many new products incorporate advanced technology, yet the existing infrastructure is insufficient, leading to challenges in their effective utilization and creating an imbalance in development.
With Vietnam's accession to the WTO, numerous foreign banks are expected to explore investment opportunities in the country This presents a valuable opportunity for TCB to collaborate with these banks, leveraging their advanced management styles, modern technology, and expertise from international specialists to enhance its own operations and services.
The demand for banking services among Vietnamese people is steadily rising, leading to the emergence of a diverse range of products and services offered by local banks These innovations aim to meet the growing needs of consumers effectively.
The urban middle class, equipped with advanced educational knowledge, has greater access to banking financial products and services This demographic, primarily focused on three key sectors of the economy, finds it relatively easy to engage with these financial offerings.
Recent government initiatives, including the Prime Minister's directive to expedite salary payments to civil servants through bank accounts, are designed to foster banking sector growth This policy positively impacts the banking industry, especially Techcombank, which has successfully established a strong brand presence among users and was awarded Vietnam's Gold Star.
Banking services forecasted shall be a fierce competitive field as protection for domestic commercial banks are no longer in the condition of Vietnam entering WTO
Opening financial market for foreign banks entering domestic financial market increases competitors who have the advantages in financial resources, technology, leadership, business administration etc over Vietnamese banks
As competition intensifies, state-owned commercial banks are increasingly focusing on medium and small enterprises, which is Techcombank's target market These banks benefit from state support and subsidies, further complicating the competitive landscape Additionally, direct competition from commercial joint-stock banks like ACB, Sacombank, East Asia Bank, and Eximbank is narrowing Techcombank's client market share.
Banking products tend to be quite similar and easily replicated, leading to rapid imitation by competing banks once a new feature is introduced As a result, creating a unique product that cannot be easily copied poses a significant challenge for financial institutions.
Besides, non-banking financial products such as life insurance, post saving, which are being developed very quickly are replaceable ones for bank's ones This is very a potential threat.
Survey analysis
2.4.1 The model of the survey
This survey aims to assess the bank's human resource policies, performance appraisal systems, and employee expectations regarding compensation The findings will enable the human resource department to propose targeted strategies for enhancing policies and administrative practices, ultimately helping TCB achieve its strategic goals A total of 391 staff members participated, providing insights through two sections: general information and factors affecting performance appraisal, including compensation policy, human management activities, and the working environment.
2.4.2.1 General information a) Seniority in Techcombank: 10 years b) Current title:……… c) Graduation: High school University Master Doctor Statistical results: Seniority in Techcombank
350 below 3 years from 3 to 10 years more than 10 year
Figure 2 – 2: Number of seniority in Techcombank
- Seniority below 3 years has 289 respondents account for 79.18%
- Seniority from 3 to 10 years has 67 respondents accoint for 18.35%
- Seniority over 10 years has 9 respondents account for 2,47%
90% below 3 years from 3 to 10 years more than 10 year
Figure 2-3: Percent of seniority in Techcombank
The density of seniority below 3 years is the largest, it reflects the staff of
Techcombank is a relatively young institution, with a limited number of respondents having over ten years of experience, indicating a low retention rate among long-term employees Notably, those who do have extensive tenure hold significant roles within the organization, including director, vice director, and heads of functional departments.
Administrative level Intermediate level Staff level
Figure 2 – 4: Number of current title
- Administrative level: 45 respondents account for 12.64%
- Intermediate level: 31 respondents account for 8.7%
- Staff level: 280 respondents account for 78,65%
Administrative level Intermediate level Staff level
Figure 2 – 5: Percent of current title
The survey implementation process received the efficient support from
The participation of a significant number of managerial-level individuals in the survey ensures a diverse range of opinions and perspectives, reflecting various aspects of the human resources department while maintaining impartiality.
Figure 2 – 6: Number of education level
- Under university: 47 respondents account for 12.08%
Figure 2 – 7: Percent of education level
Techcombank boasts a highly educated workforce, with most employees holding university degrees, while a smaller percentage have graduated from high school or college, primarily filling roles such as guarding and driving This strong educational background enhances the quality of Techcombank's staff, giving the bank a competitive edge in the banking market As Techcombank continues to grow rapidly, the demand for highly educated employees is expected to increase even further.
2.4.2.2 Compensation policy, human management activities and working environment
A Compensation policy: From question 1 to 4
1 In comparison with the average income of banking industry, your income in Techcombank is reasonable
2 Compensation policy of Techcombank (reward and punish) is fairly applied
3 Regulations concerning rewards and punishments of Techcombank are always relied on the results of performance
4 You are always praised immediately when you perform well your assignment
Figure 2 – 8: Number and percent of Reasonableness of salary in TCB
Figure 2 – 9: Number and percent of Fair in compensation policy
Reward based on results of performance
Reward based on results of performance
Figure 2 – 10: Number and percent of reward based on results of performance
Figure 2 – 11: Number and percent of timely praised when perform well
The feedback from questions 1 to 4 indicates a significant level of employee dissatisfaction regarding their compensation Employees perceive the bank's compensation policy as unfair and not reflective of their work effectiveness The lack of timely rewards leads to feelings of unacknowledged effort, fostering discouragement and reluctance in task execution If this issue persists, it may ultimately stifle employee creativity and enthusiasm, resulting in a detrimental impact on overall productivity.
Question 5: You always take part in short courses followed by annual training plans of the bank (1 – 5: never – rarely – sometimes – usually – always)
Statistical results: Participate in short courses
Figure 2 – 12: Number of participate in short courses
Figure 2 – 13: Percentage of participate in short courses
Training and equipping employees with essential skills is crucial for effective job performance A recent survey indicates that Techcombank recognizes this need and has prioritized sending employees to short courses However, the distribution of training opportunities is uneven, as many employees either seldom participate or have never attended any training sessions.
Question 6: Are you encouraged, created good condition to participate in long course? (1 – 5: never – rarely – sometimes – usually – always)
Statistical results: Condition to participate in long courses
Figure 2 – 14: Number of participate in long courses
Figure 2 – 15: Percentage of participate in long courses
Techcombank actively promotes employee participation in long-term educational programs, offering support for those pursuing foreign master's degrees However, this policy is not widely communicated, leaving many employees unaware of the procedures to access the bank's educational support.
Question 7: Are you satisfied with the current compensation policy of the bank?
(1 – 5; 1: Very disappointed; 2: Disappointed; 3: Normal; 4:Satisfied; 5: Very satisfied)
Statistical results: Satisfaction level with compensation policy
Never Rarely Sometimes Usually Always
Figure 2 – 16: Number of satisfaction level with compensation policy
Figure 2 – 17: Percentage of satisfaction level with compensation policy
There is only 17% doesn’t satisfy with the banking human policy The percentage of 50% employee really satity prove banking policies are relatively advance
8 Goal setting and plan making missions are very clear and announced to all the staffs clearly and sufficiently
9 The job you undertake is suitable with your capacity
10 Your strengths and ability are always used and developed to a high degree
11 You are always encouraged and oriented to develop your career
12 You are rotated through different positions in order to gain experience and develop creativeness
13 You are always encouraged and given a trial of higher position when the bank need to assign people in these positions
14 Are you sufficiently and clearly provided information about banking human policies?
Statistical results: Human management activities
Figure 2 – 18: Number and percentage of clearness for making plan and announcing to staffs
Figure 2 – 19: Number and percentage of work suits with capacity
Figure 2 – 20: Number and percentage of employees’ strengths are used and developed
Figure 2 – 21: Number and percentage of encouraged and oriented to develop career
Figure 2 – 22: Number and percentage of rotation through other positions
Figure 2 – 23: Number and percentage of challenging with higher positions
Figure 2 – 24: Number and percentage of sufficiently informed about human policies
Assigning employees to roles that align with their capabilities is crucial for organizational success, as it enhances their strengths and improves task performance When employees engage in well-defined jobs with opportunities for growth, their loyalty is fostered Techcombank has recognized this need, with most staff feeling well-matched to their responsibilities Additionally, the bank offers policies that allow for job rotation, although these initiatives remain limited and underdeveloped Consequently, employees' desire for diverse experiences to build their skills has not been fully satisfied.
Question 15: Have you ever complained (by oral or written) about the bank’s human policies?
- Complain with colleagues: 234 respondents account for 63.76%
- Have no complaint with colleagues: 133 respondents account for 36.24%
- Complain with managerial human department: 115 respondents account for 34.74%
- Have no complaint with managerial human department: 216 respondents account for 65.26%
Statistical results: level of complain about human policies
Figure 2 – 25: Number of complain with colleagues
Figure 2 – 26: Percentage of complain with colleagues
Figure 2 – 27: Number of complain with managers
Figure 2 – 28: Percentage of complain with managers
Despite the widespread announcement of human policies, employee satisfaction remains limited, indicating a lack of interaction between employees and management Many employees feel dissatisfied with these policies but hesitate to voice their concerns directly to their managers This reluctance highlights a significant barrier that must be addressed to enhance satisfaction and improve performance evaluations between employees and managers.
Question 15 (cont): If any: Do manager and / or personnel staffs have any reaction with your complaints?
Statistical results: Reaction of administration
Open exchange, has no action
Figure 2 – 29: Number of administration’s reaction
Have no reaction Open exchange, has no action Open exchange, earnestly implement
Figure 2 – 30: Percentage of administration’s reactions
- Have no reaction: 22 respondents account for 15.94%
- Openly exchange but has no action: 42 respondents account for 30.43%
- Openly exchange and earnestly implement: 62 respondents account for
- Other situations: 12 respondents account for 8.70% (mainly complain)
Effective communication between managers and employees regarding urgent matters is often challenging When feedback is overlooked or inadequately addressed, employees may experience increased pressure, leading to strained relationships and limited information exchange Consequently, the two-way communication becomes less honest and transparent.
16 Banking atmosphere is very pleasant, comfortable, friendly
17 Supervisors always willingly listen your ideas and enable you to contribute your ideas
18 Supervisors always encourage your creativeness and express your creativeness in your job
19 Your job is very interesting and challenging
Figure 2 – 31: Number and percentage of people like working atmosphere
Figure 2 – 32: Number and percentage of employees’ ideas are listened
Figure 2 – 33: Number and percentage of employees’ creativeness is encouraged
Percentage of people feel their job is challenging, interesting
Figure 2 – 34: Number and percentage of people feel their job is challenging, interesting
When selecting a job, employees typically prioritize key factors such as salary, working environment, job fit, and promotion opportunities A recent survey indicates that Techcombank offers an ideal working environment that fosters innovation and development However, if an employee's role does not align with their skills and lacks challenge and engagement, they may become disengaged and perform their duties half-heartedly.
Question 20: How do you evaluate the relationship between you and
Techcombank? (1 – 5; 1: very bad; 2: Bad; 3: Normal; 4: Good; 5: Very good)
Bad Normal Good Very good
Figure 2 – 35: Number of the relationship with Techcombank
Bad Normal Good Very good
Figure 2 – 36: Percentage of the relationship with Techcombank
The result demonstrates that the level of employees’ satisfaction to the bank is pretty high
Question 21: In general, are you satisfied with your current? (1 – 5; 1: Very disappointed; 2: Disappointed; 3: Normal; 4: Satisfied; 5: Very satisfied)
Statistical results: Employees’ satisfaction with current job
Disappointed Normal Satisfied Very satisfied
Figure 2 – 37: Number of satisfaction with current job
Disappointed Normal Satisfied Very satisfied
Figure 2 – 38: Percentage of satisfaction with current job
The level of satisfaction is highly admitted, there is only 13% doesn’t satisfy with the current job
Question 22: Do you have any motivation to perform your assignment? (1 – 5; 1: Never; 2: Rarely; 3: Sometimes; 4: Often; 5: Always)
Statistical results: Employees’ motivation to perform assignments
Figure 2 – 39: Number of motivation to perform assignments
Figure 2 – 40: Percentage of motivation to perform assignments
Research indicates that approximately 30% of employees lack sufficient encouragement and adequate compensation, hindering their ability to fully contribute to the bank This issue stems from several factors, including job attractiveness, the openness of communication between managers and employees, and overall employee satisfaction with the bank's policies.
Question 23: What do you expect most from the bank after finishing performance appraisal? (choose one item in the followings)
Annual salary increase Receive reward for performing well
Praise Short training courses Inform strategies and business plans
Figure 2 – 41: Number of employees’ expectations
Annual salary increase Receive reward for performing well
Praise Short training courses Inform strategies and business plans
Figure 2 – 42: Percentage of employees’ expectations
- Annual salary increase: 303 respondents account for 80.37%
- Receive reward by money for performing well assignments: 31 respondents account for 8.22%
- Promote to higher position: 20 respondents account for 5.3%
- Short training courses: 3 respondents account for 0.79%
- Strategies and business plans are imparted to all the employees clearly and specifically: 7 respondents account for 1.85%
- Other elements: 4 respondents account for 1.06%
Employees expect their salaries to meet their contributions, with many feeling inadequately compensated based on performance appraisals To effectively evaluate employee performance, it is essential to establish specific, clear, and measurable criteria This approach ensures accurate assessment of employees' efforts and contributions, making performance evaluations a vital tool for enhancing employee satisfaction and organizational effectiveness.
Question 24: What is the bank reaction when employees quit their job?
Statistical results: Reaction of the bank
Promise but doing nothing Recruit new staffs immediately
Doing nothing Promise and improve stricly Negotiate with specific case
Figure 2 – 43: Number of managers’ reactions
Promise but doing nothing Recruit new staffs immediately
Doing nothing Promise and improve stricly Negotiate with specific case
Figure 2 – 44: Percentage of managers’ reactions
- Promising to improve the policy but after that doing nothing: 15 respondents account for 4.6%
- Recruiting immediately new staff to supplement: 121 respondents account for 37.11%
- Doing nothing: 16 respondents account for 4.91%
- Negotiating with specific case: 118 respondents account for 36.19%
- Promising to improve the policy and apply seriously: 43 respondents account for 13.19%
Effective communication between employees and managers is crucial when employees consider leaving their jobs Understanding the reasons behind an employee's decision to quit can help managers identify areas for improvement It is essential for managers to avoid making empty promises about enhancing opportunities for employees, as failing to follow through can lead to dissatisfaction and increased turnover.
Question 25: What is your intention in future?
Loyal to the bank Change to other position in TCB
Figure 2 – 45: Number of employees’ trend
Loyal to the bank Change to other position in TCB
Figure 2 – 46: Percentage of employees’ trend
- Loyal to the bank: 77 respondents account for 21.10%
- Change to other position in Techcombank if there is a better chance: 219 respondents account for 60%
- Change to other job (in other bank) if there is a better chance: 69 respondents account for 18.90%
This result indicates the demand for rotating to other position and getting challenging opportunities is very high
2.4.3.1 Basis of assessing work performance
Classification of work title: Classifying work title in Techcombank is carried out as follows:
High-ranking leadership of the Bank: General Director, Deputy General Directors
Middle-ranking leadership of the Bank: Chiefs and Deputies
Primary leadership: Heads, Deputy Chiefs, group leaders
Specialist and professional employees such as accounting, business, marketing, controlling, general, IT etc are also drawn up in ranks: Senior specialists; Specialists
Other employees: security, office staff, drivers
Job description documents at Techcombank serve to clarify and outline the tasks, responsibilities, working conditions, and relevant aspects of specific positions Key components include a summary of duties, a detailed description of main responsibilities, the relationships between roles, the authority granted for task execution, performance assessment criteria, and the necessary qualifications such as degrees, certifications, experience, skills, health standards, and personnel evaluation procedures.
2.4.3.2 Analyzing performance appraisal of Techcombank