Luận Văn Employee Job Satisfaction In Vietnam Banking Industry.doc

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Pham Ngoc Truong
EMPLOYEE JOB SATISFACTION
IN VIETNAM BANKING INDUSTRY:
THE MODERATING ROLE OF
OWNERSHIP STRUCTURE
MASTER OF BUSINESS ADMINISTRATION
1

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Pham Ngoc Truong
EMPLOYEE JOB SATISFACTION
IN VIETNAM BANKING INDUSTRY:
THE MODERATING ROLE OF OWNERSHIP STRUCTURE
MASTER OF BUSINESS (HONOURS)
SUPERVISOR: DR. DOAN ANH TUAN

Contents
List of figures ....................................................................................................................................... 3
List of tables ......................................................................................................................................... 4
List of abbreviations ............................................................................................................................. 5
ACKNOWLEDGEMENT ................................................................................................................. 6
ABSTRACT ........................................................................................................................................ 7
1. Introduction ...................................................................................................................................... 8
2. Literature review and hypotheses development ............................................................................. 13
2.1 Vietnamese banking system and ownership structure ............................................................. 13
2.2 Definition and determinants of job satisfaction ....................................................................... 14
2.3 Theories and analytical models ............................................................................................... 17
2.3.1 Maslow's Theory of Needs (1943) ........................................................................................ 17
2.3.2 Motivator/Hygiene Theory (Two-Factor Theory) ................................................................ 19
2.3.4 Need theory (McClelland) .................................................................................................... 20
2.4 Hypotheses and research model............................................................................................... 21
2.4.1 Nature of work ...................................................................................................................... 22
2.4.2 Salaries and benefits ............................................................................................................. 23
2.4.3 Recognition and motivation .................................................................................................. 23
2.4.4 Work relationship ................................................................................................................. 24
2.4.5 Development opportunities ................................................................................................... 25
2.4.6 Job satisfaction of bank employees in state-own banks and private banks .......................... 26
3. Research methodology ................................................................................................................... 29
3.1. Research process..................................................................................................................... 29
3.2. Data collection ........................................................................................................................ 34
3.3. Data analysis methods ............................................................................................................ 35
4. Results ............................................................................................................................................ 37
4.1. Sample description ................................................................................................................. 37
4.2. Cronbach’s Alpha and Exploratory factor analysis ................................................................ 38
4.3. Pearson correlation ................................................................................................................. 42
4.4 Multiple regression analysis .................................................................................................... 43
4.5 Multiple group analysis ........................................................................................................... 46
5. Discussion, Implications, Limitations and Conclusions ................................................................. 54
5.1 Discussion................................................................................................................................ 54
5.2 Managerial implications .......................................................................................................... 56
5.3 Limitations ............................................................................................................................... 57
5.4 Conclusion ............................................................................................................................... 58
REFERENCES ................................................................................................................................... 59
APPENDIX ........................................................................................................................................ 67
2

List of figures
Figure 1: Maslow's hierarchy of needs
Figure 2: Conceptual model
Figure 3: Research process
Figure 4: CFA result
Figure 5: SEM result
Figure 6: SEM – multiple group result
3

List of tables
Table 1: State-owned banks in Vietnam
Table 2: Measurement scale of construct
Table 3: Sample description
Table 4: Scale analysis result
Table 5: Rotated Component Matrix
Table 6: Summary of defined factors
Table 7: Pearson correlations result
Table 8: Multiple regression model summary
Table 9: Multiple regression analysis result
Table 10: Regression analysis result (SEM)
Table 11: Multiple group global test
Table 12: Multiple group local test
4

List of abbreviations
CFA: Confirm Factor Analysis
EFA: Exploratory Factor Analysis
JDI: Job Descriptive Index
KMO: Kaiser - Mayer – Olkin statistics
SBV: State bank of Vietnam
SEM: Structural Equation Modeling
5

ACKNOWLEDGEMENT
Employee job satisfaction in Vietnam banking industry – The moderating role of
ownership structure is the topic that I chose to study and do graduation thesis after two
years studying master’s program at International School of Business, University of
Economics Ho Chi Minh City.
To complete the dissertation, firstly, I would like to extend my deepest thanks to Dr.
Doan Anh Tuan who has guided me directly throughout the process. His ideas and
support are valuable contributions to the thesis that are completed on schedule and
demonstrate the perspective of the researcher.
Secondly, I would like to thank to my colleagues at Sacombank, my sister, my friends
of colleagues and my colleagues of friends who helped me speed up the data
collection process.
Thirdly, I would like to thank the proposal defense committee (Dr. Tran Ha Minh
Quan, Dr. Tran Phuong Thao, Dr. Nguyen Phong Nguyen) for evaluating and
contributing ideas to the thesis; Dr Nguyen Thi Mai Trang, Dr. Dinh Thai Hoang who
guided me research design and data analysis courses. This knowledge related directly
to the implementation of the thesis.
Finally, I would like to thank my parents for giving me the best conditions to
complete the dissertation. Thanks to my relatives and friends who have always been
with me, encouraged me to complete this program and this study.
Sincerely thank you!
6

ABSTRACT
Research on employee satisfaction is very necessary in human resource management
and the result is applied in practice to improve personal well-being and organizational
effectiveness. This study aims to identify the factors contributing towards the job
satisfaction of employees in Vietnam banking industry and explore the difference in
level of employee satisfaction between state-owned banks and private-owned banks in
Vietnam. This research has found out four determinants of employee job satisfaction
including salaries and benefits, development opportunities, nature of work. This study
also shows in general that job satisfaction differs among bank employees in state-
owned and private-owned banks. Multiple regression analysis was used to test five
main hypotheses while multiple group analysis was applied to examine the moderating
effects of ownership structure on job satisfaction. Based on the results, the study
suggests some managerial implications for improving the business efficiency.
Comparative results provide theoretical evidence for the banking industry in general
and managers in particular
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1. Introduction
For years, organizations have begun to focus on the concept of talent management
with the goal of finding, identifying, developing, and maintaining high quality human
resources for the business (Bratton & Gold, 2003). However, the detection and
selection of external resources is so difficult that labor market must call it the "war"
for talent selection. For this reason, many businesses have chosen a path, a new theory
aimed at a resource that is ready for future growth as well as for ensuring current
productivity. The understanding of "employees' minds and aspirations" is considered
as an important step in the talent management plan as well as building a working
environment in line with the development strategy of the enterprise (Devi & Nagini,
2013).
Furthermore, it is no difficult to recognize that organizations cannot achieve their
goals without quality personnel. According to Kalleberg and Mastekaasa (2001), most
companies have made great efforts in selecting applicants, however when these
applicant become full time employee, few enterprises have sufficient resources to
understand, sharing problems or aspirations of employees. This leads to the decrease
of performance and increase of turnover rate. Various studies also state that employee
satisfaction plays a vital role in work performance and employee engagement, such as
Spector (1997), Saari and Judge (2004), Luddy (2005) and Judge, Thoresen, Bono,
and Patton (2001). To solve these problems, we need to improve the level of job
satisfaction through increase the quality of some factors which directly impact. This is
the reason why it is essential and important to measure and research the job
satisfaction through factors influencing motivation among employees. This
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contributes positively to the planning of human resource management at working
place and brings more job satisfaction to employees, families and society.
According to Allen and Gale (2000) and Levine (2005), the banking system plays a
huge role in the economic development and macroeconomic stability of any country.
If a weak bank exists, it will lead to potential risk for all system. And human resources
are always a prerequisite in operating and developing the banking system to serve the
economy. Kelley (1990) states employees in banking sector have lower level of
satisfaction and empowerment than other industries. The repetitive job, unreasonable
salary and promotion, non-empowerment, stressful working environment directly
affects productivity. Moreover, banks desire to have excellent warriors to operate
business activities, decrease cost, increase revenue and profit. Bank employee
dissatisfaction have negative in poor job performance (Koh & El'Fred, 2001). Yee,
Yeung, and Cheng (2008) also prove that low level of employee satisfaction has a
negative relationship with customer’s satisfaction. In brief, employee satisfaction
evaluation is really a key element in improving bank performance and customer
satisfaction and the quality of banking system
Sinha and Shukla (2013) argue that private and public sector background is a
significant element in determining the work style and culture of an organization, job
satisfaction is influenced by private – public sector differences. While the foundation
which forms work culture for state-owned banks has been based on a concept towards
social-economy aspect, private sector banks aim mostly for profitability of its business
activities. In other words, the banks, which adopt different organizational structure,
have a tendency to craft different business objectives. According to Hart, Shleifer, and
9

Vishny (1997), bank strategies and performance vary due to the variety of customer
penchants, targeted purchaser, scale, value chain, human resources which could be
driven by bank ownership structure. This leads to the differences in working style
between those banks and the result of George (2015) show that there are differences in
job satisfaction between employees in state-owned banks and private-owned banks.
Various studies have been conducted on employee satisfaction, however there are
fewer studies focusing on the differences of employee satisfaction between private
and public sector (Islam & Islam, 2014). In Vietnam, there is an outstanding research
relate job satisfaction by Tran (2005) who measures employee satisfaction using the
JDI scale and demand theory of Maslow (1943) and there are some researches which
concentrate on banking sector as Phan (2015), Mai and Bui (2013). They investigate
key factors affecting job satisfaction and examine the relationship between job
satisfaction and employee loyalty of commercial banks in Ho Chi Minh city.
Moreover, Nguyen, Mai, and Nguyen (2014) examine the factors influencing
organizational loyalty of banking employee in Ho Chi Minh city and Phan (2011)
studied elements create positive value for employee commercials banks in Hue. There
are few studies emphasized the differences of employee satisfaction between public
and private banks in Vietnam. The research of Phan (2015) has mentioned differences
in the level of employee satisfaction between foreign banks and domestic banks (not
Vietnam state-owned and private-owned banks). Thus, I expect to provide new
insights significant gap with the moderating role of ownership structure on employee
satisfaction in Vietnam banking industry.
10

The purpose of this study is to identify factors contributing towards the job
satisfaction in banking industry and explore the difference in level of job satisfaction
between state-owned banks and private-owned banks in Vietnam. This study will help
candidates who are intending or are making the decision in choosing which banks to
work have an overall picture of working environment and job satisfaction. This
research also provides suggestions for banks' management adjust the personnel policy
to retain talent and increase operational efficiency. The comparative results provide
theoretical evidence for the banking industry in general and managers in particular.
To achieve the research objectives, this study will answer the following questions: (1),
What are factors affecting employee job satisfaction in Vietnam banking industry?
(2), Whether job satisfaction may be different for private-owned banks and state-
owned banks employees in Vietnam?
This thesis contributes to the literature in several ways. First, this research is related in
spirit to the approach of Phan (2015) and Nguyen et al. (2014) which provide an
overall and detail picture of human resources management and job satisfaction of
employees in banking industry and examine the relationship between job satisfaction
and employee engagement. Second, unlike these studies, which concentrate on the
level of job satisfaction of employee in a specific bank or in banking industry in
general, the research contributes to the literature exploring the difference in level of
job satisfaction between two banking groups (state-owned banks and private-owned
banks) in Vietnam. Since some related studies investigate deeply the factors affecting
job satisfaction as Bui (2013) and Phan (2015), this thesis further examine the
moderating effect of ownership to contribute to the board of director of thanks in
11

planning operational strategy, maintaining and developing excellent employees,
making employees more satisfied, attracting talents, and limiting the "brain drain"
from rival banks. Different from the recent studies in which general ownership
concentration is used to test ownership involvement, this paper mainly compares the
smoothing behavior of government-controlled shareholders with that of their non-
government counterparts. This study also supports to applicants in depth view of the
working environment, welfare, job satisfaction of employees in two banking groups to
make the best choice for their workplace.
This research is conducted in five stages and divided in five sections. Section 1 -
Introduction, gives the overall picture the study, introduces the research background,
research problem, research objectives, research questions and the research
contribution. Section 2 - Literature review, presents earlier studies about the topic and
related research. Based on that, the author proposes a research model. Section 3 -
Research methodology covers the development of scales, sample selection, data
collection tools, how the data collection process is conducted, and statistical data
analysis techniques used in the research. Section 4 - Results analyzes and interprets
the results of data analysis in section 3. Section 5 – Discussion, Conclusions,
Implications and Limitations concludes main findings of the research, discuss
limitations of the study and recommend some management strategies.
12

2. Literature review and hypotheses development
2.1 Vietnamese banking system and ownership structure
National Bank of Vietnam was officially established under Decree No. 15 / SL dated 6
May 1951 by President Ho Chi Minh. Over the past six decades, the banking system
of Vietnam has been continuously developing and making important contributions to
the process of protecting, building and developing the country. Currently, National
Bank of Vietnam has changed the name to State bank of Vietnam (SBV) which is the
central bank under the Government of Vietnam. This is the main financial regulatory
agency which is responsible for monetary issues and management, advising on
monetary policies to the Government of Viet Nam such as exchange rate policy,
interest rate policy, foreign currency reserve management, composing laws on
banking business and credit institutions, approving the establishment of banks and
credit institutions, management of state-owned commercial banks.
The State bank of Vietnam oversees the operations of 04 state-owned commercial
banks, 01 public policy bank, 31 joint-stock (private) commercial banks, 04 joint-
venture banks, 96 representative offices and branches of foreign banks, 27 financial
and leasing companies, and 9 wholly-owned foreign banks.
The 4 state-owned banks include Bank for Agriculture and Rural Development
(Agribank), Industrial and commercial Bank of Vietnam (Vietinbank), Bank for
Investment and Development of Vietnam (BIDV), Bank for Foreign Trade of Vietnam
(Vietcombank) are state-owned banks with more than 50%.
13

Table 1: State-owned banks in Vietnam
Bank Type Main share holder
1 Agribank Unlisted SBV (100%)
2 BIDV Listed SBV (95.8%)
3 Vietinbank Listed SBV (64.5%)
4 Vietcombank Listed SBV (91.0%)
(Source: State bank of Vietnam)
There are 31 private-owned banks in the whole system, however in this research we
only focus on 6 biggest private-owned banks in term of total asset and charter capital
which are: Sai Gon Thuong Tin joint stock commercial bank (Sacombank), Asia
Commercial bank (ACB), Millitary Commercial joint stock commercial bank (MB),
Vietnam prosperity joint stock commercial bank (VPB), Vietnam technological and
commercial joint stock bank (TCB), Sai Gon commercial bank (SCB).
2.2 Definition and determinants of job satisfaction
A number of researchers have argued that an employee is considered to be satisfied in
the workplace when he or she is fully happy with material and mental factors at work
such as Graham (1982), Uddin, Luva, and Hossain (2012), Spector (1997) and
Robbins (1993). Further, Vroom (1964) points out that "job satisfaction is a feeling in
which employees are clearly oriented towards work in the organization and truly
enjoying the job." According to Locke and Dunnette (1976) satisfaction is attitude
which is expressed by feeling and trust, and Spector (1997) states that job satisfaction
is the attitude to job preferences in general and to aspects of work in particular. In
14

addition, Kreitner and Kinicki (2007) define job satisfaction as emotional responses to
different aspects of the work. According to Robbins (1993), job satisfaction is a
positive state from a job evaluation or a work experiences. Küskü (2003) argues that
job satisfaction reflects the needs and desires of individuals to be responsive and the
level of employee perception about their work. This meaning is derived from Maslow
(1943) demand scale theory that workers are satisfied when they meet demand from
low to high. Wright and Kim (2004) also point out that job satisfaction is a match
between what employees want from work and what they feel from work. In brief, job
satisfaction can be defined as the positive level of emotion or attitudes that individuals
have toward their job. When one says that he has high level of job satisfaction, it
means he really likes his job, feels good about it and appreciates his work.
According to Smith, Kendall, and Hulin (1969), the level of satisfaction with the
components or aspects of work is recognition of contributions during the work
process. Luddy (2005) emphasizes the elements that affect job satisfaction, including
job position, supervisory level, relationship with colleagues, job content, treatment
and the policies containing promotion, material conditions of the work environment,
organizational structure. Unsatisfactory employees will lead to low labor productivity,
both physically and mentally. Employees with job satisfaction will have less job
change and less job retrenchment. Abadi, Jalilvand, Sharif, Salimi, and Khanzadeh
(2011) find that working place, expectation, intrinsic value impact much on job
satisfaction while Al-Hussami (2008) believes job satisfaction comes from both the
nature of work and other values that make life more comfortable. According to
Mulinge and Mueller (1998), Schaufeli, Bakker, and Van Rhenen (2009), minor
15

convenience costs, reward of spiritual and material value create engagement between
employees and activities. Reward, gratitude, allowances are used to evaluate the level
of employee job satisfaction (Zobal, 1998). James and Mathew (2012) find that
employees are happy with their co-workers, resources and administration. Chen,
Ployhart, Thomas, Anderson, and Bliese (2011) study that there were relationships
between job satisfaction and future work expectations. Herzberg, Mausner, and
Snyderman (1978) suggest that two groups of factors related to job satisfaction were
motivation factors and maintenance factors. Motivation factors include achievement,
recognition, challenging work, progress, maturity in work. Maintenance factors
include company policy and corporate governance, superiors' supervision, salaries,
interpersonal relationships, working conditions, personal life, assurance for work. If
corporates maintain well motivation and maintenance factors, it will give employees
more inspiration and energy. This will lead to increased productivity, increased job
performance and job satisfaction. Job characteristics model of Hackman and Oldham
(1974) has five core characteristics: skill diversity, job insight, meaningful work, work
autonomy, and feedback. This core features have influence on three psychological
states: understanding the meaning of work, having responsibility for work results, and
perception of work result. From those states of psychology, the quality of job result
will perform. Hulin and Smith (1967) also find similar results, he argues that there are
five factors that affect job satisfaction: satisfaction with nature of work, satisfaction
with supervision, satisfaction with job prospects, satisfaction with promotion and
satisfaction with colleagues.
16

Two years later, Descriptive Index Job Descriptive Index (JDI) by Smith et al. (1969)
measured one’s satisfaction in five facets: coworkers, the work itself, salary,
opportunities for promotion and supervision. The value and reliability of JDI are high
valued both in practice and in theory (Mayer & Schoorman, 1992). In Vietnam, Tran
(2005) conducted a study to measure job satisfaction using the JDI scale and demand
theory of Maslow (1943). The main objective of this study was to test the validity of
the JDI scales as well as to determine the factors that affect job satisfaction of
employees in Vietnam. The result had two new factors: welfare and working
conditions.
There are numerous definitions of job satisfaction and the impact factors of job
satisfaction. In general, job satisfaction is an employee's assessment of the issues
involved in the performance of their work.
2.3 Theories and analytical models
There are many different studies on job satisfaction. Research on job satisfaction or
work motivation is a research that study methods to please employees in many
aspects. This can be built from theories of motivation and job satisfaction. The
characteristics of these theories have many determinants that affect employee
satisfaction therefore these are used to refer to the research model.
2.3.1 Maslow's Theory of Needs (1943)
Maslow's hierarchy of needs was introduced in 1943 and the theory is based on his
observation of human instincts. This theory has assisted us to understand more
logically regarding fundamental human needs as in the hierarchy of needs.
Specifically, he has classified various needs and arranged systematically into five 17

distinctive categories, based on the levels of necessity from the lowest to the highest
in a tower. The structure of the tower has five layers (figure 1), in which human needs
are listed in a pyramid-like hierarchical order. The basic needs at the bottom of the
hierarchy must be satisfied before thinking of higher demands. Higher demands will
arise when all basic needs below (bottom of the tower) are met. Five layers in
Maslow's hierarchy of needs are: Physiological, Safety, Love / Belonging, Esteem and
Self – actualization.
From that we can conclude that, the difference in human needs will create the
difference in job satisfaction and employee behaviors. Therefore, to help employees
get satisfaction at work, managers need to understand where employees stand in this
hierarchy and behave in accordance with the specific characteristics of that level of
hierarchy. Some factors affecting job satisfaction nowadays stand at the top three level
of hierarchy: salaries and benefits, the compliance with the nature of work, the work
relationship, the recognition & motivation, the development opportunities. Figure 1:
Self -
actualization
Esteem
Love/Belonging
Safety
Physiological
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2.3.2 Motivator/Hygiene Theory (Two-Factor Theory)
Two-Factor Theory or Herzberg's Boby Motivation-Hygiene Theory was published by
Frederick Herzberg, a psychologist. This theory is based primarily on the results of
investigative and analytical surveys conducted in Pittsburgh, Pennsylvania. Herzberg's
studies provided data for him to propose a two-factor model:
 Demotivate factor: the factor of employee dissatisfaction at work in any

organization, which may be due to: (i) The regime and policies of that
organization, (ii) Inappropriate supervision, (iii) Conditions of employment do
not meet the expectations of the employee, (iv) Wages and remuneration are
unsuitable or contain many unfair elements, (v) Relationship with co-workers
"problematic", (vi) Relations with all levels (superiors, subordinates) do not
achieve satisfaction.
 Motivator factor: the agent of job satisfaction: (i) Achievement, (ii) The
recognition of organizations, leaders, and colleagues, (iii) Responsibility, (iv)
Advancement, (v) Growth.
Most of the factors affecting job satisfaction are support motivate factors and against
demotivate factors such as salaries and benefits, the compliance with the nature of
work, the work relationship, the recognition & motivation, the development
opportunities.
2.3.3 The Equity Theory, John Stacey Adams (1963)
Adams' Equity Theory was originally developed in the 1960s, was named after the
Behavioral psychologist John Stacey Adams. Specifically, one of the most important
19

arguments to be identified in Adams' theory is that, there have been undoubtedly
various subconscious factors exist inside an employee's mind to evaluate and address
the relationship with his current job and employers. As such, this theory was mainly
crafted on the belief that employees might feel slightly agitated when the perceived
"input" workflow and the corresponding "output" result are somewhat imbalanced. As
a result, they would likely to loosen their effort, become discouraged or in other worse
cases, cause disturbance within the workplace.
Equity theory suggests that there should be a somewhat reasonable balance between
such "input" and "output", for instance, an employee who could manage difficult tasks
well, is highly seasoned in the field and express tolerance, enthusiasm should be
rewarded with higher wages, welfare or even a psychologically intangible asset as
recognition from the managers. From then, it would fundamentally foster a strong and
healthy bonding between the company and its employees, and overall, they will feel
significantly contented and motivated towards organizational tasks. Employees who
make a positive contribution to the development of the bank, they deserve to receive
worthy “output” include high salaries and benefits, the compliance with the nature of
work, the warm work relationship, the recognition & motivation, the development
opportunities.
2.3.4 Need theory (McClelland)
David McClelland is an American psychologist. In 1960 he argued that people are
motivated by the three main components: achievement, affiliation and power.
20

 Need for achievement: People who have need for achievement are eager to
accomplish challenging goals with their own efforts. They like to be successful
in the competition and need to get clear feedback about their performance.

 Need for power: people who have need for power often want to influence and
control resources, people if they are beneficial to them.

 Need for affiliation: people in this group often desire to have a close and
friendly relationship with the people around. The need for alliances makes
people strive for friendship, preferring cooperation rather than competition, the
desire to build relationships based on mutual understanding.
The need for achievement, power and affiliation is also expressed through factors
affecting job satisfaction such as salaries and benefits, the compliance with the nature
of work, the work relationship, the recognition & motivation, the development
opportunities.
2.4 Hypotheses and research model
Based on the results of previous studies on job satisfaction and the actual situation
through survey in banking industry, this study selected the factors that affect job
satisfaction as follows: the nature of work, salaries and benefits, recognition and
motivation, work relationship, development opportunities. Job satisfaction is the
dependent variable that is impacted by the five independent variables mentioned
above by employees of state own banks and private banks. The change of these factors
in a positive or negative way will increase or decrease the level of job satisfaction of
employees in banking industry.
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2.4.1 Nature of work
The nature of work is one of the leading factors affecting the employee satisfaction
(Hackman & Lawler, 1971). The characteristic of job such as the creativity, the
repetition, the innovation will suit different group of employees. Compliance with
different job characteristics will help employees feel more comfortable and nurturing
work for a long time. Hackman and Oldham (1976) argue that every job can be broken
down into five characteristics, including the skill variety: (i), Task identity -
Employees will feel a higher level of meaning in their work when they are fully
engaged in a task and understand it. (ii), Task significance - Work is more meaningful
if it not only provides certain value to the person performing the task but also affects
people outside the organization, including their family or friends. (iii), Autonomy -
Employees are able to determine success or failure when doing the job. (iv), Feedback
- When getting the feedback, employees will understand what they need to do to
improve performance in the future. In Vietnam, Phan (2015) also shows that the role
of nature of work to the motivation of banking employees in Ho Chi Minh City. The
nature of work shows diversity, creativity, challenge, opportunity to promote personal
skills. When performing a job that requires a variety of skills, especially those skills
that are relevant to the level and understanding of the worker, they will also find their
work meaningful, making them more satisfied in the workplace. This study testes the
hypothesis H1:
H1: The more suitable nature of work, the higher level of job satisfaction
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2.4.2 Salaries and benefits
The salaries and benefits are shown in the needs of physiology and safety in Maslow's
theory of need (1943). This is the most important factor for staff in the studies of
Simons and Enz (1995) in the United States and Charles and Marshall (1992) in the
Caribbean. Welfare plays a vital role in determining the level of job satisfaction. A
good income and benefits policy must be demonstrated at the salary level which is
consistent to the capacity and level of contribution. Diversified welfare policy
demonstrates the interest of the management for employees that makes employees feel
satisfied, contributing and valued. According to Tran (2005), welfare expresses the
interest of enterprises to the life of workers that stimulates employees to work hard
and stick with the business. From the above arguments, this study tests the hypothesis
H2:
H2: There is a positive relationship between salaries and benefits and job satisfaction
2.4.3 Recognition and motivation
According to Maurer (2001), motivation and recognition through rewards are one of
the fifteen main determinants influencing employee well-being. The lack of factors
will seriously reduce the level of dedication of the staff to organizations. Locke and
Dunnette (1976) found that the recognition is the feedback for employees’
competence and that it is the reward of the employees’ performances. Through these
forms, employees can fix mistakes in the past as well as improve performances and set
higher goals in daily demonstrations. Recognition influences job satisfaction as it
responds to growth expectations in psychology, equity and income. The study of Mai
and Bui (2013) also shows the similar result, the level of employee satisfaction is high
23

when they receive recognition and motivation from colleagues and superiors. Based
on these arguments, this study tests the hypothesis H3:
H3: There is a positive relationship between recognition and motivation and job
satisfaction
2.4.4 Work relationship
Motivation is often spontaneous when employees have a good leader who they respect. A
company may have a good working environment, salary, welfare or remuneration policy
for employees, but a poor leader can mitigate these advantages and lose the motivation of
the subordinates. According to Grant (2007), the motivation of an employee depends a lot
on what the leader does. Each of their actions has a direct or indirect impact on the
motivation of employees on both the positive or negative side and it depends on the
seniority of management and leadership. Willis-Shattuck et al. (2008) state that poor
communication between management and staff reduces motivation. When employees feel
lack of trust or lack of connection from the leader, they will be able to lose motivation
and effort in the workplace.
The relationship with colleagues is also very important in the level of job satisfaction.
A working environment in which colleagues are open, friendly, willing to help, share
experiences affect the motivation of employees and vice versa (Nguyen, 2010).
Similar to relationship with superiors, staff should have the support from co-worker in
daily work or in emergency, feel comfortable when interacting with colleagues.
Dedicated and trustworthy colleagues create value and satisfaction in the workplace.
From the above arguments, this study tests the hypothesis H4:
H4: There is a positive relationship between work relationships and job satisfaction
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2.4.5 Development opportunities
Training is considered a form of human capital investment and this investment is
carried out by individuals or companies (Goldin & Katz, 1999). Employees look
forward to participate in training programs to improve their skills and they are
expected to use the skills and knowledge to apply in their jobs as well as to share with
the co-workers. Employees will be equipped with the knowledge and skills necessary
to help them repair weaknesses, improve performances and develop strengths
(Gomez-Mejia, Balkin, & Cardy, 1995). Nowadays, many companies realize that the
more they train their employees, the more their employees tend to stick with the
company. In addition, the knowledge that follows the training program helps
employees to increase efficiency.
According to Oosthuizen (2001), promotion is very crucial in work place and that has
a very high level of motivation. Storey and Sisson (1993) argue that training and
promotion is a sign of employee engagement. Training and promotion also help
reduce job rotation (Irshad & Afridi, 2007). It also reflects the organization's strategy
of relying on adding value to employees rather than cutting costs. Leading companies
recognize that development opportunities are a vital to motivate and retain key people
in organization (Bassi & Van Buren, 1999). From the above arguments, this study
tests the hypothesis H5:
H5: There is a positive relationship between development opportunities and job
satisfaction
25

2.4.6 Job satisfaction of bank employees in state-own banks and private banks
There are some contradictory studies about employee satisfaction in the public and
private sectors. The study of Hossain (2000) reveals that employee satisfaction level
in public is higher than private banks. Sinha and Shukla (2013) have not only showed
the same result, but also emphasized many important aspects on why they were
dissatisfied to work in private sectors banks. The notable reasons are job security,
ratio between salary and work experience was not aligned, insufficient recognition
from upper managers with completed tasks, and monotonous nature of work
environment. For state-owned banks, welfare policies have been transparently defined
and reasonably enforceable by the laws, including but not limited to retirement plan,
pensions, gratuity as well as other welfare concerns for the employees to be
effectively adopted. The welfare policies as in private sector banks are arguably
considered to be poorly planned and executed, which consequently explains why
employee turnover is rather substantial while the job security is quite the opposite.
Khalid and Irshad (2010) state that most private banks would not provide adequate job
security, and would dismiss its current employees, whose working performance is
deemed not to be optimal or because of unfavorable market conditions.
On the other hand, Islam and Islam (2014) has concluded that private bank employees
have better job satisfaction level than the ones who have been working in state-owned
banks due to the fact that they find better working facilities to be enjoyable, as well as
the notable support from other colleagues. Bureaucracy and low dynamic environment
are also of the reasons why many people feel uncomfortable when working in the
public sector (Wright, 2001). Boardman and Vining (1989) indicate that the
26

performance of private sectors is better than public sector. Islam and Islam (2014)
argue private-owned banks are better for employees who proactively seek for more
opportunity to develop working performance, of which would subsequently reinforce
job satisfaction level at work. It is stated in the study from Selvaraj (2009) that private
banks were more successful than state-owned banks because they have scientifically
implemented initiatives for Total Quality Management, human resources solutions,
customer focus and commitment from higher-level directors. According to D'souza
(2002), most public banks adopt salary model based on employee’s seniority, in other
words, the longer the contributed years, the better salary payment, as well as the
compensation gap between different employees is rather low. Private banks would
basically exercise the opposite practice, specifically the salary is calculated and
assessed based on work performance, hence the larger compensation gap between
different employees and there would be fewer reward payments for long-term tenure.
The study from Shrivastava and Purang (2009) shows both two aspects. Employees in
private banks have higher satisfaction in development opportunities, relationship and
income while job security is the reason why employees in public banks prefer. Based
on the above-mentioned inconclusive arguments, we propose a significant difference
in satisfaction of bank staffs between private and public banks but do not establish any
direction for this comparison. The sixth hypothesis is formulated as follows:
H6: Job satisfaction differs among bank employees in state-owned and private-owned
banks.
Based on the previous studies and the hypotheses constructed from H1 to H6, the
researcher examines the effects of the moderating role of ownership structure on the
27

relationship between each factor and job satisfaction. This is also the contribution of
the study compared to previous researches. The H6a, H6b, H6c, H6d, H6e hypotheses
are built as below:
H6a: The relationship between job satisfaction and nature of work differs
between bank employees in state-owned and private-owned banks.
H6b: The relationship between job satisfaction and salaries and benefits differs
between bank employees in state-owned and private-owned banks
H6c: The relationship between job satisfaction and recognition and motivation
differs between bank employees in state-owned and private-owned banks.
H6d: The relationship between job satisfaction and work relationship differs
between bank employees in state-owned and private-owned banks.
H6e: The relationship between job satisfaction and development opportunities
differs between bank employees in state-owned and private-owned banks.
According to the 6 hypotheses, the research model used in this study is presented
in this figure:
Figure 2: Conceptual model
Nature of work
Salaries & Benefits
Recognition & Motivation
H1
H6a
H2
H6b
H6c
H3
Ownership structure
28

H6d
H4
Work relationship H6e
H5
Development opportunities
3. Research methodology
Job satisfaction
The study was conducted on the basis of a combination of qualitative and quantitative
research. This section presents four main components of the research methodology:
research process, data collection, data analysis method and measurement scale of
construct.
3.1. Research process
There are three steps in the research process. Those are: (1), Generation of items. (2),
Preliminary research and pilot study. (3), Survey and data analysis.
Figure 3: Research process
Generation of items:
Discussion Research
objectives
Preliminary research and pilot study
Draft Revision
questionnaire
Literature
review
Pilot study
Research
model
Final
questionnaire
29

Main survey and data analysis:
A survey of 326 Reliability
respondents analysis/EFA
Conclusions Result
Regression
Analysis
Multiple
group analysis
In the first stage – generation of items, key issues of the study were discussed include
the role of employee satisfaction in the success of organizations, the factors that affect
employee satisfaction, and whether job satisfaction differs among employees in public
and private sector. Derived from the fact that the researcher is working in the banking
industry and the researcher recognized the very important role of employee
satisfaction in bank performance, the differences in feeling of happiness between
colleagues who work in some private-owned banks and state-owned banks, the
researcher decided to choose this topic to investigate and explore.
Research problems were identified based on this practical situation, the overall of
development of Vietnam banking industry and the limitation of previous studies in
Vietnam. From the issues raised, research objectives and research questions were
formulated including: identify factors contributing towards the job satisfaction in
banking industry and explore the difference in level of employee job satisfaction
between state-owned banks and private-owned banks in Vietnam.
30

The scope of this research were 4 state-owned banks and 6 private-owned banks in Ho
Chi Minh City, Binh Duong, Dong Nai and Dong Thap province and the data was
collected from July to September 2018. The respondents are friends, colleagues,
friends of colleagues who work in banking industry. 40% of private-owned bank data
came from my colleagues who work at Sacombank’s head office. 35% of state-owned
bank data came from my sister’s colleagues who are Director of Accountant at BIDV
Dong Thap branch. The literature review following by the 6 hypotheses and research
model also were conducted in this stage.
In the second stage - Preliminary research and pilot study, qualitative research
method was used to conduct preliminary research, interviewing a number of
employees who are the chosen representatives of BIDV and Sacombank ‘staff. BIDV
represents the state-owned bank group while Sacombank represents private bank
group. Individuals interviewed will answer questions in the pre-designed
questionnaire. Sample size was 10 (n = 10). Preliminary research results were used to
complete the research questionnaire and research model.
Next, the pilot test was used to make sure all the questions are understood deeply and
correctly. This helped to ensure that the source data is unmistakable, made the
analysis and running of the model more accurate. Through the pilot test, we knew
what confused questions are, this helped us correct before undertaking large scale
survey. The questionnaire in the pilot test was sent to 20 respondents including: 2
managers, 1 director, 7 employees at Sacombank and BIDV. Besides, the
questionnaire is discussed with two experts in the field of human resources
management. Those are: Ms Ly Tu Nhu – Head of Human Resources department,
31

Shinhan bank Vietnam and Ms Nguyen Thi Anh Tam, Deputy Manager Human
Resources department – FPT Securities.
Experts advised me to clarify the concept of job satisfaction in order to avoid
confusion between the views of the interviewee. Experts also recommended me to
emphasize the objectives of comparing the employee satisfaction in the two banking
groups in the questionnaire. It will help the interviewee understand deeply the
meaning and participate more actively. For the rest, the experts assessed 90% of the
questionnaire comprehensively and fully reflected the purpose of the survey. 10% of
the questionnaire relates to development opportunities and recognition & motivation
are displayed at the Appendix A. The final test of spelling, meaning and grammar
errors also was conducted in this stage.
Quantitative research method will be used to collect the employee's opinion on the
level of satisfaction for the current job. For the selected sample to be representative of
the overall population, the respondents will be randomly selected.
After preliminary research and pilot study, the research chose the measurement scale
of construct as below:
Table 2: Measurement scale of constructs
No. Independent Observable variables Sources
Construct
1 Nature of work (1) creative, not repetitive (Hackman &
(2) suitable to level of Lawler, 1971),
education and specialty
(Hackman &
(3) allows to use skills and
Oldham, 1976),
talents
(4) under high pressure (Smith et al., 1969)
2 Salaries and Benefits (1) suitable to the nature of (Charles &
work
32

(2) fair Marshall, 1992),
(3) affordable for daily life (Smith et al.,
(4) good benefit policy
1969), (Tran,
2005)
3 Recognition and (1) recognized contributions (Maurer, 2001),
(2) receive rewards when (Locke &
Motivation completing tasks and
Dunnette, 1976),
exceed the plan
(Smith et al., 1969)
(3) are motivated at work
4 Work relationship (1) friendly and supportive (Grant, 2007),
(2) work efficiently with your (Willis-Shattuck et
colleagues
al., 2008), (Smith
(3) share your problems with
et al., 1969)
your colleagues
(4) suitable leadership style of
supervisors and managers
5 Development (1) many specialized and (Gomez-Mejia et
skilled courses al., 1995),
opportunities (2) interact with board of
(Oosthuizen,
directors, experts
2001), (Storey &
(3) You are empowered in
planning and decision Sisson, 1993),
making at your department
(Smith et al., 1969)
No. Dependent Construct Observable variables
1 Job satisfaction (1) Suitable with the type of (Smith et al.,
work. 1969), (Spector,
(2) Enjoy job
1997), (Tran,
(3) Learn and have potential
2005)
growth
(4) Feel important about job
In the third stage – survey and data analysis: The official survey was sent to 500 bank
employees in four provinces the city of South Vietnam (Ho Chi Minh city, Dong
Thap, Binh Duong and Dong Nai province) with sample random sampling method.
33

After clarifying and cleaning and encrypting data, the official data analysis was
conducted.
3.2. Data collection
The questionnaire on 5-point Likert scale is used as an instrument for data collection
from “Strongly disagree” to “Strongly agree”. There were 29 questions in the
questionnaire in which 7 questions were asked to gather demographic information and
21 questions were used to measure 18 variables. The 5-point Likert scale with the
choice from 1 to 5 as: (1), Strongly disagree. (2), Disagree. (3), Neutral. (4), Agree.
(5), Strongly agree.
About determining the number of samples for the study, for the explore factor
analysis, Hair, Anderson, Tatham, and Black (1998) showed that the minimum sample
size is 5 times the total number of observed variables. For multiple regression
analysis, according to Tabachnick and Fidell (2007), the minimum number of samples
to be obtained is given by the formula: n = 50 + 8*m (m: independent variables)
where m is the number of independent factors. The research had 22 items to measure
6 constructs therefore the research should have at least 110 observations. Due to the
fact that this study has carried out multi group analysis to explore the difference of job
satisfaction of employee between two banking groups, the researcher collected 273
samples.
The questionnaire was sent to respondents in two ways: online and direct. In the
online method, the researcher conducted surveys through Google forms and sent them
to colleagues (working in the banking industry), friends of colleagues and colleagues
of friends who work in banks in 4 city and provinces. In this method, 120 samples
34

were collected. In the direct collection method, the researcher sent a paper
questionnaire to 50 employees as co-workers at Sacombank and 30 employees at
BIDV Dong Thap branch where my sister is a head of accountant department. The
paper questionnaire also were sent directly to my friends of colleagues and to
colleagues of my friends who work at Agribank, Vietinbank, Vietcombank, ACB,
MB, SCB, TCB, VPB.
The total samples were 326. There are 53 samples (equivalent to 16.2% total samples)
of responses which were eliminated. The main reasons are: (i), the answers were not
enough information. (ii), there are some irresponsible answers. (iii), there are many
repeated answers for all questions. 272 samples were conducted in the official data
analysis.
3.3. Data analysis methods
The SERVQUAL service quality scale was used as a multivariate scale with 5 factors
and 18 observations to assess the job satisfaction of employees in banking industry.
The reliability of the scale is estimated by the Cronbach's alpha coefficient (from 0.6
is acceptable) whereby unsuitable variables are eliminated if the correlation
coefficient (Corrected Item – Total correlation) less than 0.3 (Nunnally & Bernstein,
1994). The reliability test redefined the components in the scale by exploring factor
analysis (Nguyễn & Nguyễn, 2009). The Exploratory Factor Analysis (EFA) method
helps us evaluate two important validity of the scale: convergent validity and
discriminant validity. EFA was used to reduce a set k of observation variables into a
set F (F <k) of more meaningful factors. Meyers, Gamst, and Guarino (2016)
mentioned that in factor analysis, the method of extracting Pricipal Components
35

Analysis and Varimax rotation are the most commonly used method. According to
Hair (2010) factor loading is the indicator to ensure the significance of EFA and when
the factor loading is higher than 0.5, observed variables were statistical significance.
The condition for applying factor analysis is that variables are correlated. To
determine how correlated variables are, we use Barlett's test for hypothesis testing:
H0: The null hypothesis
H1: The alternate hypothesis
We expect to reject the null hypothesis, that is, accept the hypothesis H1, variables are
related. This is achieved when the p value after the test is less than the significance
level α. At the same time, factor analysis is considered appropriate when the KMO
(Kaiser - Mayer - Olkin) value ranges from 0.5 to 1, where correlations are big enough
to enable factorial analysis.
Pearson correlation analysis would be performed determine whether or not there is a
linear relationship between dependent and independent variables. When the
significance level of the regression coefficient is less than 0.05 (Sig. <.05), the
reliability is 95%, which is statistically significant correlation between the
independent and dependent variables.
Multiple regression analysis is used to evaluate the suitability of the model. R-squared
result is used to evaluate the relevance of the research model. F test in the variance
analysis table will indicate whether the dependent variable is related to the total
independent variable (Sig. <.05, the constructed model is consistent and vice versa).
Multiple group analysis was used to test the moderating effect of ownership structure
on job satisfaction between those banking groups. In the process of conducting
36

multiple group analysis, the Structural Equation Modeling (SEM) technique would be
used to test again the relationship between dependent and independent variables.
Some criteria for evaluating the SEM model are: 1 <Chisquare/df <3, GFI, TLI, CFI
values> 0.9 (Hair et al., 1998) and RMSEA <0.05 (Taylor, Sharland, Cronin, &
Bullard, 1993). SPSS and AMOS were the software program for the data analysis.
4. Results
The research finding of testing 6 hypotheses is showed in this section. This includes
the descriptive statistic, reliability test, exploratory factor analysis, Pearson
correlation, multiple regression analysis and multiple group analysis.
4.1. Sample description
273 questionnaires were collected in this study from 10 banks from 4 cities and
provinces in the South of Vietnam. There were 06 private-owned banks, including:
Sacombank, ACB, MB, SCB, TCB, VPB and 04 state-owned banks, including: BIDV,
Vietinbank, Vietcombank, Agribank. 112 questionnaires were collected from state-
owned banks and 161 questionnaires were collected from private-owned banks. The
most common age in the survey samples was about 25 to 35 years old (nearly 76%).
46.52% were male while the prevalence was university graduation. Most of the
respondents have 3-10 years of experience working at banks (62.27%) and the popular
salary ranges from 13 to 20 million VND (43.32%). Few surveyors hold managerial
positions, 83.88 % are employees. The detail of descriptive statistic is presented in
Table 3.
Table 3: Sample description
37

Characteristi Description Frequency Percentage
cs (%)
Age Below 25 23 8.42
From 25 to 35 207 75.82
From 35 to 45 43 24.18
Gender Male 127 46.52
Female 146 53.48
Education degree College 32 11.72
University 205 75.09
Master 36 13.19
Doctorate 0 0
Experiences Below 1 year 18 6.59
From 1 to 3 years 48 17.58
From 3 years to 10 years 170 62.27
Above 10 years 37 13.56
Salary Less than 7,000,000 VND 31 11.36
From 7,000,000 VND to 93 34.07
13,000,000 VND
121 43.32
From 13,000,000 VND to
20,000,000 VND
Above 20,000,000 VND 28 11.25
Current Position Employee 229 83.88
Supervisor/Manager 28 10.26
Director 16 5.86
Type of bank State-owned bank 112 41.03
Private-owned bank 161 58.97
4.2. Cronbach’s Alpha and Exploratory factor analysis
The reliability of the scale was evaluated by the internal consistency method using the
Cronbach's Alpha coefficient. The NW4 and WR4 had Correlated Item Total
Correlation lower than 0.3 which was removed before exploratory factor analysis. The
Cronbach’s alpha coefficient of the rest were higher than 0.6 and 16 out of 18
observable variables were qualified for EFA.
About EFA for in dependent construct, the KMO value was 0.72, within the required
range 0.5 -1.0 and the Sig. result was 0.000 which showed there were correlation of
38

variables and significance of relations. The EFA for these variables was qualified. The
EFA presented that there were 5 factors extracted and total variance extracted was
72.066 % (higher than the standard of 50%). Five factors were explained including:
Factor 1, salaries and benefits explained 24.04% of variance. This includes the
suitability of the nature of work and the income, the fair compensation policy,
sufficient income level and the satisfaction with salaries and benefits policy. Factor 2,
recognition and motivation explained 12.67% of variance. This includes the valuation
in contributions, the recognition through rewards and the motivation at work. Factor 3,
nature of work explained 12.78% of variance. This includes the creative, not repetitive
work, the suitability to level of education and specialty, the skills and talents are
applied in work. Factor 4, work relationship explained 10.79% of variance. This
includes the friendly and supportive colleagues, the coordination with colleagues and
the emotional sharing. Factor 5, development opportunities explained 7.8% of
variance. This includes the participation in specialized and skill courses, the
interaction with experts and board of directors, the empowerment in planning and
decision making. The eigenvalues of 5 factors are 1.248 (higher than 1) while loading
factor coefficients bigger than 0.5. The rotation matrix results show that 16
observation variables were grouped into six factors, all of the observed variables
having factor loading factor greater than 0.5. The detail of factor analysis result and
total variance explained 05 factors are showed in Table 4 and Table 5. Table 4: Scale
analysis result
Correlated Cronbach’s Factor % of
Item Total Alpha loading variance
Correlation
THE NATURE OF WORK NW 0.793 12.78
39

The work is creative, not NW1 0.533 0.755
repetitive
The work is suitable to your NW2 0.672 0.843
level of education and specialty
The work allows you to use your NW3 0.711 0.873
skills and talents
The work is under high pressure NW4 Removed
SALARIES AND BENEFITS SB 0.787 24.04
Your salary is suitable to the SB1 0.625 0.794
nature of work.
Salary policy is just and fair SB2 0.612 0.792
Your salary is affordable for SB3 0.418 0.593
your daily life.
You satisfy with the bank’s SB4 0.741 0.860
benefit policy
RECOGNITION AND RM 0.897 16.67
MOTIVATION
You have been recognized for RM1 0.833 0.926
your contributions
You receive rewards when you RM2 0.828 0.926
complete tasks and exceed the
plan
You are motivated at work RM3 0.734 0.872
WORK RELATIONSHIP WR 0.812 10.787
Your colleagues are friendly and WR1 0.792 0.927
supportive
You can work efficiently with WR2 0.729 0.902
your colleagues
You share your problems with WR3 0.469 0.723
your colleagues
Leadership style of supervisors WR4 Removed
and managers are suitable
DEVELOPMENT DO 0.756 7.80
OPPORTUNITIES
You are often participate in DO1 0.645 0.885
specialized and skilled course
You are often in contact with DO2 0.665 0.838
board of directors, experts
You are empowered in planning DO3 0.462 0.554
and decision making at your
department
JOB SATISFACTION JS 0.876
You are content with the type of JS1 0.776 0.888
work.
You enjoy your job. JS2 0.808 0.900
You can learn and have JS3 0.671 0.805
potential growth
You feel this job is important to JS4 0.710 0.841
you.
Table 5: Rotated Component Matrix
40

Component
1 2 3 4 5
SB4 0.86
SB1 0.794
SB2 0.792
SB3 0.593
RM1 0.926
RM2 0.926
RM3 0.872
NW3 0.873
NW2 0.843
NW1 0.755
WR1 0.927
WR2 0.902
WR3 0.723
DO1 0.885
DO2 0.838
DO3 0.554
About EFA for dependent construct, the KMO value was 0.791, within the required
range 0.5 -1.0 and the Sig. result was 0.000 which showed the EFA was qualified. The
EFA result presented that all variables describing one factor (job satisfaction). The
eigenvalues of factor is 2.954 (higher than 1) while loading factor coefficients bigger
than 0.5 and this factor explained 73.843% of variance.
After defining the factor, we will proceed to create the representative variable
according to the factorization table defined above. Creating representative variables
will help us get factors for the Pearson correlation and later multiple regression. Table
6: Summary of defined factors
Factors Variables Classify
1 NW NW3, NW2, NW1 Independent
2 SB SB4, SB1, SB2, SB3 Independent
3 RM RM1, RM2, RM3 Independent
4 WR WR1, WR2, WR3 Independent
5 DO DO1, DO2, DO3 Independent
6 JS JS1, JS2, JS3, JS4 Dependent
41

Total number of independent observation variables: 16
Total number of dependent variable observations: 4
4.3. Pearson correlation
Pearson correlation analysis will be performed first to determine whether or not there
is a linear relationship between dependent and independent variables. When the
significance level of the regression coefficient is less than 0.05 (Sig. <.05), the
reliability is 95%, which is statistically significant correlation between the
independent and dependent variables.
Significance level of the regression coefficient between independent variables Nature
of work (NW), Salaries & Benefits (SB), Work relationship (WR), Development
opportunities (DO) and dependent variable Job satisfaction (JS) were less than 0.05.
Thus, there were linear relationships between these independent variables and the
dependent variable. Development opportunity (DO) and Job satisfaction (JS) had the
strongest correlation with r coefficient of 0.579. Work relationship (WR) and Job
satisfaction (JS) had the weakest correlation with coefficient r of 0.3. The significance
level of the regression coefficient between Recognition and Motivation (RM) and Job
satisfaction (JS) is greater than 0.05, so there is no linear correlation between these
two variables. The Recognition and Motivation (RM) variable was removed when
performing multiple regression analysis.
Independent variable pairs have a relatively weak correlation each other, therefore
there were high probability of no multi-collinearity. The detail of correlations is
shown in Table 7.
Table 7: Pearson correlations result
42

NW SB RM WR DO JS
Pearson 1 .262**
-0.048 0.047 .312**
.474**
Correlation
NW Sig. (2-
0 0.432 0.438 0 0
tailed)
N 273 273 273 273 273 273
Pearson .262 1 0.008 0.096 .438**
.574
Correlation
SB Sig. (2-
0 0.892 0.114 0 0
tailed)
N 273 273 273 273 273 273
Pearson
-0.048 0.008 1 0.104 -0.047 0.067
Correlation
RM Sig. (2-
0.432 0.892 0.087 0.442 0.271
tailed)
N 273 273 273 273 273 273
Pearson 0.047 0.096 0.104 1 .139*
.300
Correlation
WR Sig. (2-
0.438 0.114 0.087 0.021 0
tailed)
N 273 273 273 273 273 273
Pearson .312 .438**
-0.047 .139*
1 .579
Correlation
DO Sig. (2-
0 0 0.442 0.021 0
tailed)
N 273 273 273 273 273 273
Pearson .474**
.574**
0.067 .300**
.579**
1
Correlation
JS
Sig. (2-
0 0 0.271 0 0
tailed)
N 273 273 273 273 273 273
4.4 Multiple regression analysis
Table 8: Multiple regression model summary
R R Square
Adjusted R Std. Error of the
Square Estimate
.757a
0.573 0.566 0.40163
43

The result of multiple regression analysis in which Job satisfaction (JS) is dependent
variable while Nature of work (NW), Salaries & Benefits (SB), Work relationship
(WR) and Development opportunities (DO) are independent variables are in Table 8.
The R square value of 0.573 showed that the independent variables put into the
regression model affected 57.3% of the variance of the dependent variable, while the
remaining 42.7% was due to variables outside the model and random errors. Sig value
F in ANOVA test was 0.00 <0.05, therefore the linear regression model was
consistent with the data set and this could be used.
Sig value (t) of the regression coefficients of the independent variables was less than
0.05, so these independent variables were meant to explain the dependent variable, no
variables were excluded from the model. The VIF coefficients of the independent
variables were less than 2 so there was no multi-collinearity.
Table 9: Multiple regression analysis result
Unstandardized Standardized Collinearity
Model
Coefficients Coefficients
t Sig.
Statistics
B
Std.
Beta Tolerance VIF
Error
(Constant) 0.45 0.174 2.582 0.01
1
NW 0.181 0.028 0.275 6.481 0 0.883 1.133
SB 0.324 0.042 0.344 7.661 0 0.79 1.267
WR 0.161 0.031 0.21 5.207 0 0.979 1.021
DO 0.259 0.038 0.313 6.828 0 0.758 1.32
44

All regression coefficients are greater than 0. Thus, all the independent variables
included in the regression analysis all affect the dependent variable. Based on the
magnitude of the standardized regression coefficient beta, the order of magnitude of
the strongest and weakest effects of independent variables on the JS dependent
variable were: SB (0.344)> DO (0.313)> NW (0.275) > WR (0.21). This corresponded
to: Salaries and Benefits had the greatest impact on employee satisfaction in the
workplace followed by Development Opportunities, Nature of work, Work
relationship.
In the result of regression standardized residual, mean equals 9.34E-16 which is
near zero, the standard deviation is 0.993 which is close to 1, so it can be said residual
distribution nearly standard. Therefore, assuming the normal distribution of residual is
not violated. The distributive points in the distribution of residual are centered into a
diagonal, thus, assuming the normal distribution of the residual is not violated. The
standardized residuals are centered around the horizontal line 0, thus assuming linear
relations are not violated. (See detail in Appendix C)
Thus, with the five hypotheses H1 to H5 we have originally proposed in the
literature review and hypothesis section, there were 4 accepted hypotheses: H1, H2,
H4, H5. This corresponding to there are positive relationships between salaries &
benefits, development opportunities, nature of work, work relationship and job
satisfaction. The H3 hypothesis was rejected, Recognition and Motivation is not
significant in the regression model, in other words, Recognition and motivation does
not affect employee satisfaction at banks.
Standardized regression equation:
45

JS = 0.344 SB + 0.313 DO + 0.275 NW + 0.210 WR
Job satisfaction = 0.344 Salaries & Benefits + 0.313 Development Opportunities +
0.275 Nature of work + 0.21 Work relationship
4.5 Multiple group analysis
Multiple group analysis was applied to examine the moderating effects of ownership
structure on job satisfaction (H6). This also was used to test hypotheses from H6a,
H6b, H6c, H6d, H6e.
The results of the Confirm Factor Analysis test (CFA) confirmed by the model were
presented in Figure 4. The results show that the conditions are as follows: Chi-
square/df=1.898, p = .000, GFI = .905, TLI = 0.940, and CFI = .951 are satisfactory.
The requirement of discriminant validity and convergent validity are satisfied with the
quality of the scale. Thus, considering the above conditions, the model is consistent
with the data collected.
Figure 4: CFA result
46

Figure 5: SEM result
47

The results of the model estimation show that there are four independent factors in the
model: (1) Salaries and Benefits, (2) Nature of work, (3) Work relationships and (4)
Development opportunities. Job satisfaction is a dependent factor. The model has 155
48

degrees of freedom and the models indicate the fit for the data collected (Chi-square =
294,213, df = 155, Chi-square / df = 1.898, p = .000, GFI =. 905, TLI = 0.940, and
CFI = .951). (Figure 5)
The SEM result (Table 10) illustrated that recognition and motivation is not
significant in the regression model (p>0.05), in other words, recognition and
motivation does not affect employee satisfaction at banks. On the other hand, there are
positive relationships between salaries & benefits, development opportunities, nature
of work, work relationship and job satisfaction (p<0.05). The hypotheses H1, H2, H4
and H5 were accepted while the hypothesis H3 was rejected. Based on the magnitude
of the estimate coefficient, the order of magnitude of the strongest and weakest effects
of independent variables on the Job satisfaction dependent variable were: SB (0.343)>
DO (0.265)> NW (0.172) > WR (0.148). This corresponded to: Salaries and Benefits
had the greatest impact on employee satisfaction in the workplace followed by
Development Opportunities, Nature of work, Work relationship.
The result from structural equation modeling is consistent with the result of multiple
regression which emphasize the outcome of the study, there are positive relationships
between salaries & benefits, development opportunities, nature of work, work
relationship and job satisfaction and recognition and motivation does not affect
employee satisfaction at banks.
Table 10: Regression analysis result (SEM)
Beta P
Salaries & Benefits ->
0.343 ***
Job satisfaction
Recognition &
Motivation -> Job 0.075 0.061
satisfaction
49

Nature ofwork -> Job
0.172 ***
satisfaction
Work relationship -> Job
0.148 ***
satisfaction
Development
opportunitites -> Job 0.265 ***
satisfaction
As for ownership moderating variable, data was divided into two groups: Private
group and Public group. The result for multi-group analysis of variance model in term
of two types of ownership structure, private-owned banks and state-owned banks,
presented that: Chi-square = 462.552; df = 310; Chi-square/df=1.492, p = 0.000; GFI
= 0.860, TLI = 0.936, CFI = 0.947, RMSEA = 0.43. This indicates the model is fit
with collected data
For the global test, the p-value of the chi-square difference test is significant (0.027 <
0.05); the model differs across groups. This showed that job satisfaction differs among
bank employees in state-owned and private-owned banks. This is synonymous with
the sixth hypothesis would be accepted.
Figure 6: SEM – multiple group result
50

Table 11: Multiple group Global Test
X2
DF
Unconstrained 462.55 310
Constrained 475.2 315
P-Value 0.027
51

For the local test, from the Table 12, the the p-value for difference of the relationship
(1), (3) were higher than 0.05 which show that there is no difference between groups
about job satisfaction and salaries and benefits and job satisfaction and work
relationship. The recognition and motivation has eliminated from SEM therefore the
result is no longer meaningful. The p-value for difference of the relationship (2), (4)
were less than or equal to 0.05 which show that there are differences between groups
about job satisfaction and nature of work and job satisfaction and development
opportunities. The different in betas (Private-owned banks beta minus State-owned
banks beta) in the relationship (3) is -0.231 (lower than 0) which show that the
positive relationship between Nature of work and Job satisfaction is stronger for State-
owned banks. The different in betas (Private-owned banks beta minus State-owned
banks beta) in the relationship (5) is 0.375 (higher than 0) which show that the
positive relationship between Nature of work and Job satisfaction is stronger for State-
owned banks.
Table 12: Multiple group Local Test
Private- State-
Path Name
owned owned Difference P-Value for
Interpretation
banks banks in Betas Difference
Beta Beta
Salaries &
1
Benefits →
0.327 0.503 -0.176 0.188
There is no
Job difference.
satisfaction.
The positive
relationship
Nature of
between Nature of
2 work and Job
work → Job 0.210 0.440 -0.231 0.033
satisfaction is
satisfaction. stronger for State-
owned banks.
3
Work
There is no
relationship → 0.184 0.239 -0.054 0.443
difference.
Job
52

satisfaction.
The positive
relationship
Development
between Job
satisfaction and
4 Opportunities
0.461 0.086 0.375 0.005 Development
→ Job
opportunity is
satisfaction. stronger for
Private-owned
banks.
The H6c would be rejected after Pearson correlation and regression analysis. The
result from multiple group analysis state that the H6a and H6e would be accepted
while the H6b and H6d would be rejected.
 The relationship between job satisfaction and salaries and benefits is not
different between bank employees in state-owned and private-owned banks.

 The relationship between job satisfaction and nature of work differs between
bank employees in state-owned and private-owned banks and the positive
relationship between job satisfaction and nature of work is stronger for state-
owned banks.

 The relationship between job satisfaction and work relationship is not different
between bank employees in state-owned and private-owned banks.

 The relationship between job satisfaction and development opportunities
differs between bank employees in state-owned and private-owned banks and
the positive relationship between job satisfaction and development
opportunities is stronger for state-owned banks.
53

5. Discussion, Implications, Limitations and Conclusions
5.1 Discussion
This research has found out four determinants of job satisfaction in Vietnam banking
industry. These determinants are salaries and benefits, development opportunities,
nature of work, work relationship in which salaries and benefits had the greatest
impact on employee satisfaction in the workplace followed by development
opportunities, nature of work, work relationship. This study also shows in general that
job satisfaction differs among bank employees in state-owned and private-owned
banks. In detail, the relationship between job satisfaction and salaries and benefits, job
satisfaction and work relationship are not different between bank employees in these
bank groups. The relationship between job satisfaction and nature of work, job
satisfaction and development opportunities differ between bank employees in state-
owned and private-owned banks. The relationship between job satisfaction and nature
of work is stronger for state-owned banks and the relationship between job
satisfaction and development opportunities is stronger for private-owned banks.
The four determinants demonstrated in this study are consistent with previous studies
mentioned in the literature review such as the research of Phan (2015), Tran (2005),
Mai and Bui (2013). On the other hand, recognition and motivation variable produces
the opposite outcome. This result may come from employees in banks concern more
about realistic and specific policies through salaries and benefits instead of rewards or
verbal encouragement. According to Maurer (2001), the surprising rewards are not
popular for the masses. This is also relevant with the result of the research when
salaries and benefits is the most influential factor in job satisfaction. Simons and Enz
54

(1995) in the United States and Charles and Marshall (1992) in the Caribbean also
state that salaries and benefits is the most vital element in defining job satisfaction at
work, this show the level of capacity and distribution. Diversified welfare policy
demonstrates the interest of the management for employees that makes employees feel
satisfied, contributing and valued.
Development opportunities is also very important, employees look forward to
participate in programs to improve their skills and knowledge. This will lead to the
higher job performance and it is easy for employees achieve higher position,
accomplishment in their career. This is also the key element to reduce job rotation
(Irshad & Afridi, 2007). The nature of work ranked third in the factors affecting
employee satisfaction in this study. When performing a job that requires a variety of
skills, especially those skills that are relevant to the level and understanding of the
worker, employee will also find their work meaningful, making them more satisfied in
the workplace. Last but not least, a good work relationship will help employees feel
more comfortable, open and more satisfied at work. Similar to relationship with
superiors, staff should have the support from co-worker in daily work or in
emergency, feel comfortable when interacting with colleagues (Nguyen, 2010).
Dedicated and trustworthy colleagues create value and satisfaction in the workplace.
The biggest discovery of the study is that the researcher proved job satisfaction differs
among bank employees in state-owned and private-owned banks. The result is
relevant with the result of some outstanding findings in Bangladesh and India of Islam
and Islam (2014), Shrivastava and Purang (2009), Selvaraj (2009). 273 samples were
collected from 10 banks form 4 city and provinces in the South of Vietnam. There
55

were 06 private-owned banks. 112 questionnaires were collected from state-owned
banks and 161 questionnaires were collected from private-owned banks. There is a
difference between the findings of the research with the result of Phan (2015). Phan
(2015) had used One-way analysis of variance to test the difference of job satisfaction
between foreign banks and domestic banks. The finding of Phan (2015) is there was
no difference in job satisfaction between foreign and domestic bank sector.
In detail, the relationship between job satisfaction and salaries and benefits is not
different between bank employees in these bank groups due to salaries and benefits
always the first reason why employees work (Simons & Enz, 1995). The relationship
between job satisfaction and work relationship also has the same result. Meanwhile,
the relationship between job satisfaction and development opportunities is stronger for
private-owned banks. Islam and Islam (2014) also proved that private-owned banks
are better for employees who proactively seek for more opportunity to develop
working performance. The relationship between job satisfaction and nature of work is
stronger for state-owned banks. Likewise, Wright (2001) stated the nature and work
process at public sector is more boring due to bureaucracy and low dynamic
environment.
5.2 Managerial implications
Banks can refer to this result to analyze the human resource picture and answer the
question “What factors need to be adjusted to increase employee satisfaction and the
level of impact of each factor?” In this study, the managerial implication is that banks
should pay the most attention to salaries and benefits, followed by development
opportunities, nature of work, work relationship to increase the job performance and
56

reduce turnover rate. Specifically, firstly, banks should have specific schedules to
increase employee incomes depending on contributions or engagement. Secondly,
training programs need to be strengthened, promotion schedule is reasonable and
achievable. Thirdly, tasks are allocated appropriately and in accordance with the
capacity of each individual. Fourthly, work environment stimulates creativity,
employees are empowered in making decisions. Finally, outdoor and wellness
activities are regularly held to increase the connection between employees at banks.
The higher employee satisfaction, the better business efficiency. Comparative results
provide theoretical evidence for the banking industry in general and managers in
particular. Bank applicants can refer to have in depth view of the working
environment, welfare, job satisfaction of employees in two banking groups to make
the best choice for their workplace.
5.3 Limitations
The limitation of the study is that the respondents are just in the South of Vietnam
(only 4 provinces), collected samples are not enough variable that can lead to results
do not reflect the actual situation. The geographic factor also may affect the reliability
of the results. The number of samples which from private-owned banks are also higher
much than collected samples from state-owned banks (161 compared to 112) and the
scale is just 5-point scale. In the future, the variety and quality of samples need to be
improved and the research examines the 07-point Likert scale to acquire better results
and suggest more valuable recommendations. Resources and time spent on pilot test
should also be increased to make sure all the questions are understood deeply and
57

correctly. This helped to ensure that the source data is unmistakable, save time and the
model is run more accurate.
5.4 Conclusion
This study has answered the two research questions: (1), What are factors affecting
employee job satisfaction in Vietnam banking industry? (2), Whether job satisfaction may
be different for private-owned banks and state-owned banks employees in Vietnam? This
research has found out four determinants of job satisfaction in Vietnam banking industry.
These determinants are salaries and benefits, development opportunities, nature of work,
work relationship in which salaries and benefits had the greatest impact on employee
satisfaction in the workplace followed by development opportunities, nature of work,
work relationship. This study also shows in general that job satisfaction differs among
bank employees in state-owned and private-owned banks. In detail, the relationship
between job satisfaction and salaries and benefits, job satisfaction and work relationship
are not different between bank employees in these bank groups. The relationship between
job satisfaction and nature of work, job satisfaction and development opportunities differ
between bank employees in state-owned and private-owned banks. The relationship
between job satisfaction and nature of work is stronger for state-owned banks and the
relationship between job satisfaction and development opportunities is stronger for
private-owned banks. This study will help candidates who are intending or are making the
decision in choosing which banks to work have an overall picture of working
environment and job satisfaction. This research also provides suggestions for banks'
management adjust the personnel policy
58

to retain talent and increase operational efficiency. The comparative results provide
theoretical evidence for the banking industry in general and managers in particular.
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