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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
LE ĐOAN NHAN
TURNOVER RATE AND UNFAIR
PAYING SALARY AND BENEFIT AT TIN
NGHIA PETROL JOINT STOCK
COMPANY
MASTER OF BUSINESS ADMINISTRATION

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
LE ĐOAN NHAN
TURNOVER RATE AND UNFAIR
PAYING SALARY AND BENEFIT AT TIN
NGHIA PETROL JOINT STOCK
COMPANY
ID: 22140032
MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: PHAN THI MINH THU

Executive summary
There are potentially existing problems in Tin Nghia Petrol Company which
may reduce the competition edge of organization and harm to its culture. This research
was commissioned to examine what problem in the company, the causes leading to
problem are and to suggest the validated solutions to deal with problem, which are in
line with company’s policy and resources.
The main purpose of this thesis is to explore the causes of high turnover rate
through the current problems with staffs at Tin Nghia Petrol Company.
Method of analysis is combined between validated data and theory-informed
which collected through in-depth interview and company survey to explore the causes
of problem.
The findings of the study revealed that unfair paying salary and benefit tend to
play a significant role in turnover intention of staffs. The findings are discussed in
details in the research along with some recommendations for the company and
management board to increase the level of employee satisfaction and reduce the
turnover intention in Tin Nghia Petrol Company. The solutions focus on main cause of
unfair paying salary and benefit:
- Setting up paying salary and benefit based on performance
- Build the performance appraisal logic and fairly combine setting up KPIs
system with clear job description.
Total cost to implement above solutions is approximately 250milion VND. In
currently, this cost is really high but it will be strategic objective to 2030, the company
aim for investing in human resource.

Acknowledgements
I would like to acknowledge all who supported me during my studies without I
wouldn’t be where I am today.
I would especially like to thank my supervisor – Professor Phan Thi Minh Thu
for all her advice and guidance, without her help this could not finish my thesis.
I also would like to show my gratitude to my colleagues at work and
classmates at ISB for their continuous support.

Table of content
1. INTRODUCTION .................................................................................................................1
1.1. The company background...........................................................................................1
1.2. Company structure and mission...............................................................................3
2. PROBLEM CONTEXT..........................................................................................................4
2.1. The turnover rate status in the Tin Nghia Company.......................................4
2.2. Background of the symptom......................................................................................7
3. PROBLEM INDENTIFICATION........................................................................... 11
3.1.1. Unfair assigned workload to staff of supervisor ........................................ 11
3.1.2. Unfair paying and benefit..................................................................................... 12
3.1.3. Promotion appraisal bias. ..................................................................................... 13
3.1.4. Repeated and boring working............................................................................. 14
3.2 . Justify problem in term of importance.............................................................. 15
3.3 . Final Causes and effect map.................................................................................. 16
3.4 . Cause validation.......................................................................................................... 17
4. ALTERNATIVE SOLUTIONS................................................................................. 20
4.1. The first alternative solution: Setting up salary and benefit policy based on
performance
4.2. The second alternative solution: build the performance appraisal logic and
fairly combine setting up KPIs system with clear job description
4.3. The third alternative solution: Proving some training programs to low
performance staffs
5. EVALUATION OF SOLUTIONS AND ORGANIZATION OF ACTION
5.1. Evaluation of solutions.............................................................................................. 22
5.2 .Organization of actions ............................................................................................. 23
6. SUPPORTING INFORMATION....................................................................................25
Appendices .................................................................................................................................... 25
References

LIST OF FIGURES
Figure 1. Staff of age at Company in 2016.
Figure 2. Quantity of staffs leaving in each age period from 2013-2016.
Figure 3. Result of evaluated performance of staff position in detail each
group of age.
Figure 4. Ratio of staff with high performance in detail each group of
age period from 2013 to 2016.
LIST OF TABLE
Table 1. The number of employees left period from 2013-2016.
Table 2. Table salary scale period 2015 to 2017.

1. INTRODUCTION
1.1 THE COMPANY BACKGROUND
General information: Tin Nghia Petrol Joint Stock Company officially operated
as a Joint Stock Company on January 1st
, 2009 based on the conversion from Tin Nghia
Petrol One Member Company Limited (established in 1999 – a subsidiary company of
Tin Nghia Corparation)
With two petrol stations from the beginning stage, the output was only some of
million liters per year; up to now, the company has a wide distribution network in Dong
Nai Province with sale volume of hundreds million liters per year turnover reached
trillions of VND per year and many consecutive years have been name in Top 500
largest enterprises in Vietnam. Apart from company’s retail system, also distribute many
agencies and industrial customers in and out of Dong Nai province.
Petroleum trading is the main business with turnover more than 90% of total
revenue and continuous development over many years.
Foundation and development process: Through nearly 20 years of foundation
and development, with over 350 employees, Tin Nghia’s brand name gradually affirms
in Dong Nai market as well as Southeast region, and attracts more and more customers.
1

Distribution system includes 44 locations in Bien Hoa and some towns as Vinh
Cuu, Cam My, Xuan Loc, Long Thanh, and so on. In addition, the company has 30
petroleum agencies, nearly 200 industrial customers (including factories, companies
using petroleum oil as fuel) and more than 1,000 other customers (such as garages,
transportation units…). Annual output increased from 7% to 10% sale reached over
3,000 billion VND.
2

With 16 tankers and 2 trucks, we provide transportation service for all trading
activities such as gasoline, lubricant and gas tanks to internal petrol station and
company’s suppliers Annual transportation volume increase from 10% to 15% and
reaches 200 million liters of gasoline and over 2,000 tons of gas tanks.
1.2 Company structure and mission
General Director
Vice General Director
Sale Administration Finance and Technology
Department and HR Accounting Investment
Department
Department Department
The first
petrol
stations area
The second
petrol
stations area
The third
petrol
stations area
The fourth
petrol
stations area
The fifth
petrol
stations area
………..
The eleventh
petrol
stations area
Tin Nghia Petrol Organization Structure
3

2. PROBLEM CONTEXT
2.1 The turnover rate status in the Tin Nghia Company
According to the statistics shown in the company’s reports, the number of
employees leave at Tin Nghia Petrol has been increasing in the past 4 years (2013-
2016). Especially in staff position, this number of staffs quitted their jobs are even more
surprising. This problem poses a threat to the company’s mission to grow in next time.
Year 2013 2014 2015 2016
Position Quality Rate Quality Rate Quality Rate Quality Rate
Board of Director 0 0% 0 0% 0 0% 0 0%
Supervisor 1 2% 0 0% 0 0% 0 0%
Team leader 1 2% 0 0% 1 2% 0 0%
Staff 10 24% 20 42% 28 46% 35 53%
Worker 30 71% 28 58% 32 52% 31 47%
Total 42 100% 48 100% 61 100% 66 100%
Table1.The number of employees left period from 2013-2016 (Source:
Human Resource Department)
Based on the number of employees at Company period 2013-2016, the number of
staffs leaving continued to increase during this period (form 10 to 35 people) while
other position nearly keep unchanged.
It can be seen that the number of workers left is also very high but they are
nearly the same in period from 2013 to 2015 while staff leaving have being increased.
Worker position is easy to recruit with simple requirements to have high school diploma
or equivalent (not required to graduate at colleges or university), physical strength and
dexterity. Addition, the time is short for them to train so that the number of quitted
workers is not problem in the company.
According to Price et al.1
with Causal Model of Turnover (voluntary leaving
from an organization), turnover is defined as the ratio of the number of organizational
members who have left and divided by the average number of people in that
organization during the period. The model shows that intent to stay has a direct negative
impact on turnover, when job satisfaction increases, intent to stay with the organization
will be increased.
Micheal et al.2
indicated that employee turnover is one of the persisting
problems in organizations. Arie et al.3
showed that high employee turnover is related to
lower organization performance.
The manager is caring the number of staff leaving because of its excessive
growth in the period from 2013 to 2015 (from 10 to 35 people, from 24% to 53%). Staff
position has various function in the company, including commercial finance, accounting,
marketing, project appraisal, recruitment, compensation & benefit in Head
4

office, located at all branches of the company. They are accountants, sale man, project
staff, recruitment staff and C&B staff. They play an important role in business operation
and have direct communication with each other functions. Staff position is required
graduate at colleges or university, good at English and computer skill for recruitment.
Figure 1.Staff of age at Company in 2016
Based on the report of Human Resources Department shown the number of
staffs in 2016 were 66 people (account for 20.06%/ total employees). Regarding to the
average age as shown in Figure 1, about 29% (equivalent 19 staffs) were 22 to 28 years
old, 35 % staffs (equivalent 23 staffs) were 29 to 35 years old and 36% (equivalent 24
staffs) has the age range more than 35 year of age. It can be seen that number of staffs in
group upper 35 years old is the most
Figure 2.Quantity of staffs leaving in each age period from 2013-2016 (Source:
Human Resource Department)
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Regarding to the age of staffs left as shown in Figure 2, the most of these staffs
were 23 to 28 years old, the next one were 29 to 35 years old while upper 35 years old is
nearly zero.
Year 2013 Year 2014
Year 2015 Year 2016
Figure 3.Result of evaluated performance of staff position in detail each group of age
period from 2013 to 2016
(Source: Human Resource Department)
According to the result of evaluated performance of staff position in period
from 2013 to 2016 with three groups different age, it can be seen that the number of
staffs are appraised with the highest performance were group 29-35 of age, next group
23-28 of age, last group upper 35 of age with the lowest performance.
The staffs in group from 23 to 28 years old were young therefore almost lack
experiences. Despite lack experiences in major field of working, they are very vivacious
and full of energy in their mission. Addition, it is easy for them to keep up the trend of
high technology because of their dynamic and youth. Sometimes, they give creative
ideas like using technical software in their work so that they solve their work quickly
and effective. The manager often has a good evaluation about staffs in this group.
6

The staffs in group from 29 to 35 years old who be evaluated as having the
highest performance in staffs position by their experience in major subject and flexibility
in solving complex work. Moreover, they are not too old to catch the trend developing
economic. They have both experience and dynamic.
Next, the staffs in group upper 35 years old have worked at the company for a
long time and they are accustomed to their job. They also have experience in major
subject. Some of them are evaluated with high performance but these are not more. The
most of them are lack of dynamic and spirit in their work. They may not be motivated to
strive to work more efficiently and their capacity depends on requirement of managers
or supervisors.
The staffs with high performance
>35 age
29-35 age
23-28 age
0% 10% 20% 30% 40% 50%
Figure 4. Ratio of staff with high performance in detail each group of
age period from 2013 to 2016
“According to this statistical number is posing a threat to company, the staffs
leaving focus on the high performance staffs. It’s necessary to understand the causes of
turnover rate of the staff position, why the staffs want to leave the company”, Mrs Phan
Thi Loi – Human Resource Supervisor shared.
According to Bluedorn 4
turnover is defined as process did not only mean an
individual left the company. It meant the individual stopped playing a role in the
company and left the relevant areas of the company.
2.2 .Background of the symptom
An interview was performed with different groups of respondent, such as:
staffs, leaders who are currently working for the company, staffs who already left, who
intend to leave company but then decided to stay. Last but not least, HR manager will be
the one standing at company’s overview to provide the information in the general. The
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qualitative questions have been used to investigate the interviewees’ point of view about
what the concerns exist in the organization are.
Mr Nguyen The Anh-IT staff, 28years old, who had left company 1 year ago,
shared that:
“The unclear job description, I always was assigned a lot of work by supervisor
and he explanted to that because I did work very well and finished quickly. I felt unfair
about this. Addition, I spent 2 years in the company, I did not have more opportunities
to improve my skill. I need a working environment more dynamic, creative and fairer”
Mr Nguyen Hoai Nam, an electrical engineer, 26 years old said that:
“I worked at the company for 2 years. I did not have more opportunities to improve my
skill. I am still young and I want to take more challenge to improve myself. Therefore, I need a
working environment more dynamic and creative”
Another interview was promotion with Mr Duy- a sale man, 32 years old, who
had left company for 3 year.
He had worked at company for 7 years. He always tried his best in work and
take new challenges, taking time to improve his marketing skill for finding a promotion
opportunity. He was a staff in the top best staffs of company with high performance.
However, he has no any opportunities to get a high position during the time he had
worked at the company. Therefore, he quitted his job at company to find another
company where he can get supervisor position easier.
According to Mrs Tran Thi Ngoc Ngan, a general accountant, 35 years old,
shared that:
“Despite having all necessary requirement for getting vice manager position in
Finance and Accounting Department, I still was not appointed. This position was given
by another person, Mrs Linh, who has good relationship with General Director. Even,
she was not enough necessary factors for this position. I think that it is a very difficult
for me to get high position because promotion appraisal bias and I unsatisfied about
this”
As a general expression, if staffs know that their opportunity for a promotion
does not easily come by bias factor, they will not satisfy in their work. That is also the
reason why they intended to search for another job outside of company.
Another cause for turnover rate of staff position is compensation and benefit.
Salary paying bases position, educational level and seniority (employee has spent time
at the company more or less). Therefore, the staffs have short seniority is paid lower
although they are evaluated higher performance. It is seen that why the high
performance staffs often compare their salary with other staffs who get salary higher
but low performance because of their long seniority. They feel unfair for this.
8

Mr Nguyen The Anh-IT staff, 28 years old, who had left company 1 year ago,
shared that:
I had worked at company for 2 years, my salary is lower than 3 other staffs in
my functional Department, these staffs spent more 6 years at the company although my
work is more than theirs and my performance is also higher very much.
Mrs Luong Thi My Chi, accountant, 50 years old, has worked at company for
25 years said that:
She wants to keep a stable work rather than take a new challenge to get a
promotion opportunity. She knows certainly that she has no opportunity for her
promotion because of company’s policy. She is too old to find another job better easily.
Moreover, she has worked at the company for 25 years, so she can get high salary
because company’s salary paying base on the time working for the company more or
less. She is satisfied with her current job. Therefore, she just completed her task as
acceptable level rather than taking time to investigate the new things.”
Addition, another cause about benefit, the staffs nearly have no any an
opportunity for their promotion because of promotion appraisal bias while salary and
benefit policy have very large interval between staff position and supervisor position.
According to Mrs Tran Thi Ngoc Ngan, a general accountant, 35 years old,
shared that:
“Salary paying bases position is necessary because of supervisor’s
responsibility but interval is so large between staffs and supervisors, 5 times higher
that should be care. Addition, benefit is also, supervisor position with company`s
welfare state is annual traveling abroad (Japan, Korea, Australia) while staff position
is traveling domestic (Dalat, Mui Ne, Vung Tau)”
Mr. Trung – quit the job, said “Beside the paper work at company, I must go out
to with the customer until the night, go for a drink with them. I drank every day, felt
very tired and had no time to care for my family. I realized that I need to change my
job to protect my health and care for my family.”
Mrs Tran Quynh Tam, chief accountant said that:
“Company was facing resource the high performance staffs decide to leave
with high turnover rate while current staffs are not high performance and passive
attitude work, they just want to maintain the current working way rather than actively
improve and perform the new and better one. They are satisfied with their current jobs
and behaviors, or in another way, they tends to maintain their current working style
without any significant improvement. This problem poses a threat to the company’s
mission to grow in next time”
Mr Tran Thanh Tung Planning and Development Department, Manager shared
concerns exist in his functional team:
Recently his team faced the biggest problem is three staffs of his team had left
while the current staffs cannot catch the working pace and response requirement
9

perfectly. They feel embarrassed when they are assigned more tasks, these behaviors
may be known as a passive involvement in group work as they tended to reject new
task and protect their benefit. Addition, it is hard to find out the suitable candidate to
replace for the staffs left. As a result, working quality of P&D functional team was
decreased during a period of time.
In conclusion, from statistical number above of company and result of
interview, there are some general symptoms that are happening in currently Company.
10

3. PROBLEM INDENTIFICATION
Since the symptoms indicated that in recent several years, increasing number of
staff left the company. It is very necessary and urgent to figure out reason for this. The
in-depth interview session are conducted from 3 main groups, first group:
managers/supervisors; second group: staffs who had left the company and third group
current staffs. There are some key reasons leading to the high turnover rate of staffs at
including: unfair assigned workload by supervisors, unfair paying salary and benefit,
promotion appraisal bias and repeated and boring work.
3.1.1 Unfair assigned workload to staff of supervisor
The high performance staffs often claimed is that they are assigned workload so
much by supervisor. They had covered multiple tasks but the benefit received is
unchanged. It means that other staffs of functional teams cannot meet the required work
effectiveness ability, from that, the existing the high performance staffs have to cover
for the workload of the team. This is one of the main key reason lead to the team spirit
issue and the staffs are dissatisfaction about this. They also complain that supervisor is
unfair assigned task for them. Addition, they also think that supervisor seem like them as
a tool to help him complete his work than as a staff.
Addition, giving the staff high workload, the manager just assigned to those whom
they think that they can solve the job quickly and show their talent. However, even
talents would complete the huge workload with their efforts, but if the situation lasted
long, their spirit would be down and they would feel the unfairness, then they would
decide to leave the company.
Mr Nguyen The Anh, IT staffs, 30 years old, he left the company one year ago
share that
He had worked at the company for 3 years, during this period of time, he always
had covered multiple tasks than others staffs of team because he could had finished
supervisor’s requirement quickly an exactly. He had to surf his work’s challenges
himself without any help of supervisor or other staffs of team. The more he did well, the
more tasks he got but the benefit received was unchanged. He also expected his effort
was recognized and salary is paid worthily with his performance but he did not get
anything.
Mr Tran Duc Tuan-supervisor of Technology Department share that
Technology Department has five staffs, only two of all are evaluated high
performance. These two staffs are young and very active, they are easy to approach
tasks with high requirement and often have good ideas to improve their job while other
staffs of team is do their work follow to supervisor’s instruction. Therefore, I have to
assign tasks to the high performance staffs more than the other staffs. I always evaluate
them very good but I cannot decide their salary.
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According to Min et al.5
, lack of close personal interaction leads to lack of
emotional attachment and loyalty to the organizations, thereby increasing employee
turnover. Supervisors need to have more objective assessment on assign task process
and interact with their staffs more frequently.
According to Hackman & Oldham’s Job Characteristics Model6
, the reasons
that they leave the jobs are they lack of internal work motivation, job satisfaction and
low work effectiveness. Internal work motivation may come from coworkers, managers,
global team, and regional team. If employees can feel the motivation throughout their
works every day, it should be the big motivation for them to continue contributing to the
company. When they lose the motivation, they would not satisfy with their current tasks
and jobs, leading to the low work effectiveness. At the stage of performing not well,
they actively ask to leave the company or they will be fired passively.
3.1.2 Unfair paying salary and benefit
Jackson et al.7
stated that the role of pay in attracting and retaining people at
work has been recognized for many decades and is increasingly important in today’s
competitive, economic environment where strategic compensation planning is needed.
 The first cause related to unfair paying salary and benefit is lack of
recognition to talent staffs and paying not based on performance is reason why talent
staffs decided to leave.

Mr Nguyen Van Thanh- technology staff, 30 years old, who had left company 1
year ago, shared that:

“I had worked at company for 2 years, my salary is lower than 3 other staffs,
we at the same functional team, the same position, the same educational level but they
have spent more 10 years at the company while I spent for 2 year. Despite of my work
is more than theirs and my performance is also higher very much. I think that I did not
recognize and unfair paying”

 The second cause related to unfair paying salary and benefit is salary &
benefits issue was led by comparing paying between talent staffs with each other.
Specially, the staffs in group from 23-28 ages, they thought that their performance is
higher than the other staffs while their salary is lower because currently salary paying
policy not based on performance otherwise seniority related pay.

Interview with 4 current staffs who have worked for more than 15 years, all of
them are more 40 years old. They are confessions that they did not feel interested in
work and decreased their enthusiasm with current work. They think that they are old to
get new challenge and they have also lost motivation. Although they just complete
their task as acceptable level, they still keep stable salary paying. Addition, every after
3 years they will be increased salary level. This is a key reason create comparison
between staffs who have short seniority and long seniority.

Mrs Luong Thi My Chi, accountant, 48 years old, has worked at company for
20 years said that “She is too old to find another job better easily. Moreover, she has
12

worked at the company for 20 years, so she can get high salary because company’s
salary paying base on the time working for the company more or less. She satisfied
with her current job. Therefore, she just completed her task as acceptable level rather
than taking time to investigate the new things.
On the other hand, the talent staffs also tend to compare with other companies
paying, especial is the staffs in group from lower 35 age because they think that with
their ability, they can earn more than the current one. Therefore, when they received the
offer with better compensation and benefits from other companies, they already left the
company.
If employees feel that they are not valued for their contributions or rewarded, their
commitment may be threatened. Carraher8
provided that there is a relationship between
pay satisfaction and turnover.
3.1.3 Promotion appraisal bias
There are some common reasons that the talent staffs left the company. Promotion
appraisal favoritism is one of factors that affect to the intention to quit the job of staff
position, especial to the high performance staffs. They always strive for excellent in
their work to looking for a promotion opportunity because they think that a high
performance evaluation is a potential factor for promotion opportunity. However, in
some cases, promotion appraisal ignore high performance factor, only taking care one
factor is who are appointed to high position how they have good relationship with
General Director or who has position in the company.
Getting promotion in job is the most important of every over-achieved employee.
Job promotion shows the achievement of success in career life of employee. When an
over-achieved staff is promoted, they feel proud of themself and feel that the company
acknowledge and thank you for their contribution and performance.
Mr Duy- a sale man, 32 years old, who has work at the company for 7 years. He
intends to leave company, share that:
He had worked at company for 7 years. He always tried his best in work and
take new challenges, taking time to improve his marketing skill for finding a
promotion opportunity. He was a staff at the top best staffs of company with very high
performance. However, his promotion opportunity will never come to him because
this supervisor position is donated for another one. HR manager explained to that
this supervisor position is more suitable for who have good relationship with general
Director and he should wait for another opportunity. Therefore, he quitted his job at
company to find another company where he can get supervisor position easier.
Khan9
also showed the same result that employees' satisfaction and
commitment are affected by the bias and feelings of some managers, which then
causes to increase employee turnover rate.
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Another interview with Mrs Tran Thi Sinh- accountant, 32 years, has worked
for 8 years.
She claimed is that she has lost motivation in her job science some staffs were
appointed to high position that was did not base on any evaluated criteria. It is not
fair for staffs who tried their best to find out a promotion opportunity. Therefore, she
will not get involved in job actively and accept with her current jobs, only finish her
task at average without considering which is good for her career development or not.
As a general expression, if staffs know that their promotion opportunity does
not easily come by bias, they will not satisfy in their work. All of staffs are aware of
this fact, the best staffs decided to find another opportunity outside of the company
while other staffs still accept to do their job at the company because they cannot find
any other better job to move. However, they will have passive attitude in their work
because they think that their effort are not recognized in the growth of organization and
opportunity for a promotion does not easily come.
Ryan et al10
, there are two kinds of motivation, which are intrinsic motivation,
in which the personal effort to do something since it is really interesting, and extrinsic
motivation, which refers to do something because of other benefit.
3.1.4 Repeated and boring working
The high performance staffs and the young staffs tend to develop themselves
while they have to do the same work day by day. The fact is that they feel bored when
performing a repeated list of actions in their daily work. They think that with their skill,
they can do better. Therefore, they need a more challenge working environment to show
their power or strength and improve their weakness. Less chance to have promotion or
to expand working experience is one reason of low engagement of the best staffs.
Mr Nguyen Hoai Nam, an electrical engineer, 26 years old said that: “I worked at the
company for 2 years. I did not have more opportunities to improve my skill. I am still young and
I want to take more challenge to improve myself. Therefore, I need a working environment more
dynamic and creative”
On the other hand, the staffs in group upper 35 years old admit that they did not feel
interested in work as they do similar job day by day. It decreased their enthusiasm with
current work and created barrier to accept new thing. They think that with their skill and
their old age, they hard to find out a chance to get promoted or another job better. They
accept their current work and they are not willing to take the challenge to improve
themselves.
Mrs Nguyen Thi Phuong, an accountant, 45 years old shared that:
She feel confused when was asked about her personal goal development and
whether it is in line with company goal or not. In her opinion, she always thinks that she
is old to catch up with modern working style as using technological software for her
work. That means she just want to maintain the current working way rather than
actively improve and perform the new and better one. Although she feel bored when
14

repeated list of actions in her daily work, she is not willing to take the challenge to
improve herself. She also explained that she has to balance her work-life such as family
care so she doesn’t have more time for her working improvement”
This is the reason why the staffs left who focus on lower 35 ages.
Regarding to repeat and boring work, it is not a key factor leading to high turnover
of staffs in company. The similar job day by day can create boring work attitude for
staffs. However, this belongs to human psychology and is problem for many companies,
not just one Tin Nghia company so this issue cannot be solved immediately. Moreover,
they can accept this fact as a normal situation because they have to earn money and
support their family. They also want a suitable job more than change their job regularly.
In fact, not many best staffs leave jobs because of repeated list of actions in their daily
work itself only.
3.2 Justify problem in term of importance
High turnover rate of staffs focus on 2 main groups including: group 23-28 age and
group 29-35 age. These groups have many staffs are evaluated high performance (Figure
4). They play an important role in business operation because they satisfy all working
supervisor’s requirement perfectly, they are good at major subject and their solution in
work quickly and exactly while the other staffs cannot catch the working pace. Company
was facing talent staffs decide to leave while the current staffs cannot satisfy
supervisor’s working requirement. This problem could have serious impact on company
activities because of reducing performance efficiency. In addition, it is hard to find out
the suitable candidate for the vacancy. Therefore, functional teams have to fulfill
business core requirement and prioritize some of the requests while refusing tasks which
they cannot take over all. This mean is the current workload due to lack of people in the
functional team. As a result, it affects to production line of the company and leads to late
the deadline for working progress.
Mr Tran Thanh Tung Planning and Development Department, Manager shared
concerns exist in his functional team:
Recently his team faced the biggest problem is three staffs of his team had left
while the current staffs cannot catch the working pace and response requirement
perfectly. They feel embarrassed when they are assigned more tasks, these behaviors
may be known as a passive involvement in group work as they tended to reject new
task and protect their benefit. Addition, it is hard to find out the suitable candidate to
replace for the left staffs. As a result, working quality of P&D functional team was
decreased during a period of time.
Simons et al.11
also found that turnover drives out profits, many of the specified
costs derive from productivity losses that are difficult to estimate.
Addition, turnover rate could increase cost of recruitment and training new
employees. Lashley C12
mentioned 03 types of direct costs when replacing staff
including: the cost of discontinuing of an existing employee, the cost of finding a
15

replacement, the cost of bringing the new comers into company and training them to full
effectiveness. Laurie 13
indicated that when a staff quit, the replacement cost arise.
3.3 Final Causes and effect map
16

3.4 Cause validation
The causes of high turnover rate in Tin Nghia Company were investigated and
confirmed through interviews with employees from 2 groups: first group:
managers/supervisors; second group: staffs who had left the company. There is
duplication in their comments and they are validated by available research to confirm
the existence of potential causes leading to high turnover rate of talent staffs problem in
Tin Nghia Company. Data were collected from interview results:
No Question The first group: Second group: staffs who had
managers/ supervisors left the company
 Paying salary not based on  Lack of recognition and
What is the performance paying salary not based on
main cause that  Comparing between talent performance
leads to high staffs with seniority staffs about
 Promotion opportunity will
turnover rate? salary, benefit and workload
never come to me by bias
allocation
 Paying salary not based on
 Not opportunity to job
promote performance. We were assigned a
large of workload and were
evaluated high performance but our
salary and benefit is lower than
other staffs because of lower
seniority.
Based on data were collected from interview results and secondary data from
Human Resources department, it can be seen that the main causes leading to high
turnover rate of the talent staffs and passive attitude in work of current staffs are:
promotion appraisal bias and paying salary not based on performance.
Based on the impact of problem, most of interviewees revealed that they care of
dealing with performance related pay and interview results also showed that paying
salary and benefit policy not based on performance is potential cause leading to high
turnover rate at the company in several years, problem is majorly resolved.
On the other hand, paying salary not based on performance but based on position,
addition, position related paying takes more of total income while promotion
opportunity for the talent staff will never come. Therefore, the talent staffs tend to leave
the company and current staffs is passive attitude to their work.
 Regarding to promotion appraisal bias, in this factor has effect on the
high turnover rate of talent staffs, who took part in the in-depth interview stated that the
key reason leading to quit their job is related on promotion appraisal bias. They said that
they were very good at in their work and be valuated high performance but they will not
have any opportunities for their promotion because they know well that some staffs get
high position with one reason is these people have good relationship with Director or
any person who have high position in the company.
17

According to Mrs Tran Thi Ngoc Ngan, a general accountant, 35 years old, had left
company 5 years ago. She worked at Tin Nghia Company for 10 years shared that:
Promotion opportunity will never come to me by bias. Supervisor always assigned
a large of workload to talent staffs. I also, I have to cover nearly all of workload of
financial team which belong to supervisor’s responsibility but my salary is at 1/3
supervisor’s. Addition, benefit every year, supervisor will traveling to abroad Korea,
Japan, China, Australia while staffs travel to Vung Tau, DaLat, Mui Ne.
Interview with 3 staffs of Sale Department, a functional team about their
promotion opportunity to get higher position and as a result for this interview is an
answer at the same: “We will never have any opportunities to promote higher position
because this position will be put for nephew of marketing Manager. They are share
more: “if we want to get higher position we have to find another company”
The staffs always try their best in their work to looking for an opportunity for
their promotion because they expect to improve your income and get higher benefit.
However, promotion opportunity will never come to them by bias factor.
Nezire et al.14
stated that favoritism is a natural phenomenon which exists in
every company. Therefore, job promotion favoritism is very difficult to solve
immediately.
 Regarding to paying salary not based on performance is considered
potential cause that affect high turnover of talent staffs.

The talent staffs often complained that they were assigned a large of task by
supervisor, but their salary and benefit unchanged. They also compare with high seniority
staffs about salary, benefit and workload allocation.
Currently, paying salary policy for indirect employee (director/manager/
supervisor/ staff of functional department) is paid including 3 elements: position,
education level and seniority (how long has employee been the company). Position takes
more of total income, next educational qualification, finally experience working time, not
based on performance. Therefore, the high performance staffs who are low seniority
always feel unfair about their salary. The trust is, they compare with other staffs are paid
higher salary level but lower performance.
Unit: 1000 vnđ
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
Position level level level level level level level level level level
Director 80 100 120
Vice direct 50 60 70
Supervisor 30 35 40 45 50
Team leader 20 25 30 35 40 45 50
Staff 8 9 10 11 12 13 14 15 16 17
Note: Grow up one level for after 2 years.
18

Table 2.Table salary scale period 2015 to 2017
Mr Nguyen Van Thanh- technology staff, 30 years old, had left company 1 year
ago, shared that:
“I had worked at company for 2 years, my salary is lower than 3 other staffs,
we at the same functional team, the same position, the same educational level but
they have spent more 10 years at the company while I spent for 2 year. Despite of my
work is more than theirs and my performance is also higher very much. I think that I
did not recognize and unfair paying”
They feel like they are paid unfair. They have worked so hard and contributed their
time and efforts into the current works, and even cover for low performance staffs. They
perform much excess than the pay that they get and they feel unfair at that time.
Mr Tran Duc Tuan-supervisor of Technology Department share that
I have to assign tasks to the best staffs more than the other staffs because they
themselves satisfy my requirement but I cannot decide their salary.”
Mowday et al15
stated that Employee Turnover occurs when individuals perceive
that their contributions to an organization exceed the inducements they received from
that organization. According to this theory, staffs are looking from the organization to
provide incentive that balance their contribution. When a staff cannot get satisfaction,
he/she quit his/her job from organization.
Data was collected from the staffs are working at Tin Nghia Company. These
current staffs focus on who are up 35 years old and seniority more than 10 years (the
third group) showed that it like strong proof about paying salary and benefit which not
based on performance leading to compare and decide to leave the Tin Nghia company
of talent staff.
No Question 1. Mrs Luong Thi 2. Mrs Nguyen Thi 3. Mr Le Van Nga,
My Chi, accountant, Phuong, sale man, 50 years old,
48 years old, has administration staff, 45 has worked at
worked at company years old, has worked company for 20 years.
for 25 years. for 20 years.
01 1. I know that I satisfied my current Not exactly. Daily Not exactly. I cannot
you have spent job. I am so old to repeated working find another job better
more time at Tin find another job. make me boring but I and suitable with my
Nghia Company. Addition, I worked at cannot find out another age.
the company for
Do you satisfy job better. Moreover, I
20years, my salary is
your current job? have worked at the
higher which I can
Can you share company for 20 years,
look for another
me detail about company so I can get high salary
this? level. After every 2
years, I will get higher
salary level
19

O'Halloran16
revealed that benefits tend to reduce turnover. According to this
theory, if the staffs receive some more benefits based on their good performance, their
intention to leave is lower than others.
4. ALTERNATIVE SOLUTIONS
As above analysis, it can be seen that the main cause of high turnover rate is
paying salary and benefit not based on performance. Therefore, this part would focus
on giving solutions to solve this cause.
4.1 The first alternative solution: Setting up salary and benefit policy based on
performance
The first action should come from the Human Resources Department, they
need to set up paying salary process fairly and try many ways to evaluate the staff
equity and effectively.
Based on the real experience from Director and the specific context of Tin
Nghia Company, He shared that:
Periods from 1999 to 2010: It supposed that paying salary and benefit not
based on performance is suitable and effective because of organization subsidy.
Periods from 2011 to 2012: It began have a sign of inconsequence because Tin Nghia
Company operated as a Joint Stock Company in 2009.
Periods from 2013 to 2016: It is not suitable and effective with technology and modern
economic. In this period, it is potential cause lead to high turnover rate of talent staffs in Tin Nghia
Company. It can be seen that the salary and benefit system should be based on element
performance.
According to Mark Huselid17
found that a correlation between high
performance work practices and organizational performance
Mr Nguyen The Anh-IT staff, 28years old, who left company 1 year ago. He
worked at Tin Nghia Company for 3 years, share that:
He has a great sense of personal satisfaction with his new job after you have
left Tin Nghia Company. Because he is recognized and when he tries his better, he will
get higher salary. This is reason why he satisfies his current job which he will never
get in Tin Nghia Company
Paul Suff et al.18
found that now performance‐related pay is a firm fixture of many companies reward strategies and it can form an effective motivational tool.
Mr.Tran Duc Tuan - Technology and Development Manager, share that: In his
opinion, which factors for staffs to do job well and improve engaged with company is
paying salary should not base on seniority should base on performance.
Clark et al.19
pointed to the diminishing magnitude of seniority pay practices as
a possible cause of the flattening of the earnings profile.
20

As Lazear 20
has shown, seniority-based pay is a mechanism to bind employees
and to set incentives against shirking where the effort of employees is difficult to
observe.

Benefit:


Avoid comparing about paying salary and benefit between high performance
staffs and low performance staffs



Creating measured methods that will encourage and recognize achievements
and staffs contributions.



The staffs with high seniority understand that they have to improve their task
skill to get high performance if they want to increase their income

4.2 The second alternative solution: build the performance appraisal logic and
fairly combine setting up KPIs system with clear job description
When income of staffs based on their performance is the most important
requirement of evaluation staff performance is just and exactly. Therefore, at that time
the Human Resources Department also needs build the performance appraisal logic
and clearly. The performance appraisal system must be clear and use objective criteria
to measure people’ performance. This system must contain both feedback the
employees’ manager, HR department and the most important the employees’
feedbacks on their manager to avoid the supervisor favoritism.
Assigning the appropriate workload to staffs in each Department is the problem
that the supervisor needs to clearly consider. It needs to ensure the fairness among
staffs and to avoid giving the talent staff high workload, the supervisor just assigned to
those whom they think that they can solve the job quickly and satisfy working
requirement. However, even the staffs would try to complete the huge workload with
their efforts to increase your income, but if the situation lasted long, they would feel
the unfairness because they must cover the workload of other staffs. For long term,
their spirit would be down and affect to their performance and the company business.
Therefore, KPIs system is set to the staff know well the task belong to their
responsibility. Supervisors assign the task to staff in order to ensure the fairness among
members of each Department.
Orrell21
stated manager should be very realistic in assigning tasks to members
in the team in order to ensure the fairness among employees. This will bring the
fairness among staffs in Department and the best staffs will not be pressured since they
need to burden the workload of the team. They also will be more motivated to
complete their job with the all their efforts to deliver the best results.

Benefit:


Avoid the performance appraisal biases from supervisors have been examined
by considering their salary and benefit



Ensure the fairness among staffs and to avoid giving the talent staff high
workload.

21

4.3 The third alternative solution: Proving some training programs to low
performance staffs
The current staffs have high seniority is focus on group upper 35 age and
performance is evaluated low than other groups. They tend to wait their high seniority
to get high salary level, they satisfy themselves and lack of motivation. From that, time
by time, the skills of tasks are limited. When setting a new paying salary and benefit
policy, based on performance, ignore seniority factor, they cannot confirm the
necessary of their position in the growth of organization, opportunity for increasing
income does not easily come. Therefore, It is required that the company should provide
some of training programs about skill of task or other soft skill such as: improved
learning group dynamics, gaining self - confidence, making individual decisions and a
to make sure that all them have chance to equip themselves with the required skills.
These skills can have direct and positive effects to their behaviors in both work and
their personal life confirmed.
Myers et al.22
stated that education and work experience are the two forms
of human capital individuals are most likely to acquire during their careers 11.5%
in annual earning
Mincer 23
found that an additional year of schooling yielded a net increase
of 11.5% in annual earnings.
Benson et al.24
stated that the most companies use education as an indicator of
a person’s skill levels or productivity and as a requirement in hiring decisions

Benefit:


They can have an opportunity to change themselves, in a better way



They can confirm the necessary of their position in the growth of
organization, opportunity for increasing income come easier.


5. Evaluation of solutions and Organization of actions

Luận Văn TURNOVER RATE AND UNFAIR PAYING SALARY AND BENEFIT.doc

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