UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Le Thi Hoang Lan KEY FACTORS CONTRIBUTING TO EMPLOYEE ENGAGEMENT: A study in Ho Chi Minh City Export Processing Zones and Industrial Parks MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Le Thi Hoang Lan KEY FACTORS CONTRIBUTING TO EMPLOYEE ENGAGEMENT: A study in Ho Chi Minh City Export Processing Zones and Industrial Parks ID: 21110012 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr CAO HAO THI Ho Chi Minh City – Year 2014 i ACKNOWLEDGEMENT Firstly, I would like to express my sincere gratefulness to my supervisor Dr Cao Hao Thi for his professional guidance, valuable support, intensive advice, continuous encouragement that he gave me during the time doing this research Secondly, I would like to express my deepest gratitude to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho, and Dr Tran Ha Minh Quan for their valuable time as the members of ISB Research Committee (IRC) All of their critical comments and suggestions have contributed significantly for me to complete this research My truly thanks are also given to my ISB classmates as well as all people I know who participated in filling the questionnaires and provided the valuable information for this study Last but not least, I would like to express my sincere thanks to all professors at ISB for their teaching and guidance during my last two-year master course Le Thi Hoang Lan February 2014 ii ABSTRACT This study attempts to examine key factors contributing to the engagement of employees, who are working in export processing zones and industrial parks in Ho Chi Minh City In details, it examines the impact of the five factors (Supervisor support, Training, Rewards and Recognition, Working environment, and Job characteristics) on employee engagement Based on this objective, a survey was delivered to target respondents and among five independent factors, the study explored positive effect of the four independent variables on employee engagement They were Supervisor support, Training, Working environment, and Job characteristics Besides, the Multiple Linear Regression and ANOVA analysis identified the research model of this study could explain 51% of the total variance in employee engagement and ANOVA testing result also showed that there was significant difference in terms of gender (between male and female) on the engagement of employees The findings also figured out supervisor support factor seemingly play a crucial role on the engagement of employees As a result, in order to achieve high employee engagement, companies in export processing zones and industrial parks in Ho Chi Minh City might need of paying more attention on nurturing the relationship between employees and their supervisors, providing better training programs, working environment, and job design Practical and managerial implications are also further discussed in this study iii TABLE OF CONTENTS ACKNOWLEDGEMENT i ABSTRACT .ii TABLE OF CONTENTS iii LIST OF FIGURES v LIST OF TABLES vi LIST OF ABBREVIATIONS vii CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research problem 1.3 Research objectives 1.4 Research scope and research methodology 1.5 Research contribution 1.6 Research structure CHAPTER 2: LITERATURE REVIEW 2.1 Employee engagement 2.2 Key factors contributing to employee engagement 2.2.1 Supervisor support 2.2.2 Training 2.2.3 Rewards and recognition 2.2.4 Working environment 10 2.2.5 Job characteristics 10 2.3 The research model 12 CHAPTER 3: RESEARCH METHODOLOGY 13 3.1 Research process 13 3.2 Measurement scale 14 3.3 Data collection methods 16 3.3.1 Preliminarily qualitative research (In-dept interview) 16 3.3.2 Quantitative research 16 3.3.3 Main survey 17 3.4 Sampling design 17 3.4.1 Population 17 3.4.2 Sample size 18 3.4.3 Sampling technique 18 iv 3.5 Data analysis methods 19 3.5.1 Statistical Method 19 3.5.2 Descriptive Statistic 19 3.5.3 Reliability analysis 19 3.5.4 Exploratory factor analysis 19 3.5.5 Multiple regression analysis 20 CHAPTER 4: RESULTS AND DISCUSSIONS 21 4.1 Sample descriptive statistics 21 4.2 Assessing the reliability of measurement scale 23 4.3 Assessing the validity of measurement scale 25 4.4 Multiple Linear Regression 28 4.4.1 Test of assumptions 28 4.4.2 Correlation analysis 29 4.4.3 Regression analysis 30 4.4.4 Hypotheses testing 31 4.6 Discussing the research results 34 CHAPTER 5: CONCLUSIONS AND IMPLICATIONS 37 5.1 Summary of findings 37 5.2 Managerial implications 38 5.2.1 Supervisor support 38 5.2.2 Job characteristics 38 5.2.3 Working environment and Training 38 5.3 Limitations and future research direction 39 References 41 APPENDICES 45 Appendix A: A back-tranlated version of questionnaire 45 Appendix B: Vietnamese-version questionnaire 47 Appendix C: English-version questionnaire 50 Appendix D: Comments from in-dept interview 53 Appendix E: Rejected item(s) in Pilot test 58 Appendix F: Determinant, KMO and Bartett’s Test, Sree Plot, Total Variance Explained 59 Appendix G: Testing assumptions of mutilple linear regression 61 Appendix H: Testing of moderating effects – Demographics (Gender/Age) 66 v LIST OF FIGURES Figure 2.1 The proposed research model 12 Figure 3.1 Research process 14 Figure 4.1 The final research model 34 vi LIST OF TABLES Table 3.1 Measurement scale of employee engagement and factors contributing to employee engagement 15 Table 4.1 Summary population of data collection 21 Table 4.2 Data collection methods 22 Table 4.3 Gender, Age, Position and Working experience of respondents 22 Table 4.4 Result of reliability analysis 24 Table 4.5 Rotated Component Matrix 27 Table 4.6 Correlations statistics 30 Table 4.7 Model summary of multiple linear regression analysis 30 Table 4.8 ANOVA of multiple linear regression analysis 31 Table 4.9 Coefficients of multiple linear regression 32 Table 4.10 Summary results of testing hypotheses 34 vii LIST OF ABBREVIATIONS EPZs and IPs: Export Processing Zones and Industrial Parks HCMC: Ho Chi Minh City HEPZA: Ho Chi Minh City Export Processing and Industrial Zones Authority EFA: Exploratory Factor Analysis KMO: Kaiser-Meyer-Olkin ENGAGE: Employee engagement LEAD: Supervisor support TRAIN: Training REWARD: Rewards and Recognition ENVIR: Working environment JOB: Job characteristics CHAPTER 1: INTRODUCTION 1.1 Research background There are perceptions in which organization must invest its time and effort Employees who are engaged in their work, involved in their job and committed to their organizations give companies crucial competitive advantages—including higher productivity and lower employee turnover Thus, it is not surprising that organizations of all sizes and types have invested substantially in policies and practices that foster these perceptions However, they are different as engagement drives commitment and involvement, whereas the reverse is not possible, commitment cannot be achieved without engagement and involvement is not exist among employees Many researches have shown that employees who are engaged tend to explore their performance better than who are not engaged Stated differently, an engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organization (Sundaray, 2011) In addition, when employees are engaged, when they care more about their jobs, they are willing to exert discretionary effort (Kruse, 2012) to get the required results It means engaged employees spend the voluntary effort that lies above the minimum level of effort required to keep the job and is directed towards organizational goals (Lloyd, as cited in Parrey & Bhasin, 2013) Further, work effectiveness is simultaneously higher where more engaged employees work together It tends to higher 94% in which departments have more engaged employees as shown in the report of Dale Carnegie Training (2012) That means engaged employees are more productive, give better service to customers, and stay in their jobs longer 52 Part 2: OTHER INFORMATION 1.Sex: ☐Male ☐Female 2.Age: ☐18-25 years old ☐26-35 years old Work experience ☐less than years ☐2-5 year ☐5-10 years (years): Job position: ☐Staff ☐Workers Other:……………………… 5.Name of your …………………………………… company: Thanks you for your help ☐more than 10 years 53 Appendix D: Comments from in-dept interview A English version: Interviewee’s comment Question All interviewees stated they full Supervisor support understantood the meaning of the scale My supervisor respects my opinions My supervisor really cares about my well-being My supervisor strongly considers my goals All interviewees stated they full Training understantood the meaning of the scale Managers ask employees for their opinion on However, to make the question fluently, training activities they suggested change objective “employees” to “me”, so, the question become “Managers ask me for my opinion on training activities” Learning helps me to overcome work obstacles Training is practical All interviewees stated they full Rewards and recognition understantood the meaning of the scale The organization has career development activities This organization has public recognition (e.g Interviewees suggest to rewrire this employee of the month) question: “This organization has recognized the employee’s achievements” I receive a pay raise Interviewees confused “When will employees receive a pay raise?” Thus, they argued this question need more details and suggested changing it to “ I receive a pay raise when I get good achievements in work” 10 This organization offers promotion for employees All interviewees mentioned this question need more information, such as “This organization offers good opportunities for employee promotion” 54 All interviewees stated they full Working environment understantood the meaning of the scale 11 Employees and managers get along in this organization 12 My working life balances with my family life 13 My organization is willing to help me if I need a special favor Suggest change to “I receive admiration 14 I receive respect from the people I work with (respect) from the people I work with when I have good achievement at work” All interviewees stated they full Job characteristics understantood the meaning of the scale 15 My job permits me to decide on my own on how to go about doing the work 16 My job is a complete piece of work that has an obvious beginning and end 17 My job requires me to many different things at work, using a variety of your skills and talents 18 Besides feedback from my co-workers, this job actually provides clues on how well I am doing my work All interviewees stated they full Employee engagement understantood the meaning of the scale 19 I really “throw” myself into my job 20 Sometimes I am so into my job that I lose track of time 21 Being a member of this organization is exhilarating for me 22 I am highly engaged in this organization In summary, all interviewees stated that they understand clearly the meaning of the questions and expressed that these questions were proper to ask employees about their perception of what factors related to their engagement in EPZs and IPs context 55 Information of 10 people took participation in the in-dept interview is recorded and summarized in following table No Name of participant Age Phone contact EPZs or IPs that take account Pham Thi Thao Quyen 25 0907.318.982 Tan Tao IP Le Thanh Hiep 29 0902.403.688 Vinh Loc IP Nguyen Thi Bich Hang 29 0909.390.885 Tan Binh IP Vu Van Tien 29 0908.420.121 Linh Trung EPZ Nguyen Trong Nhan 30 0933.078.575 Hiep Phuoc IP Nguyen Tri Thanh 30 0912.549.464 Le Minh Xuan IP Nguyen Thanh Phuc 23 0122.736.3521 Saigon Hi-Tech Park Phan Huy Tu 23 0978.498.599 Tay Bac Cu Chi IP Ngo Thi Hong 26 0982.449.706 Linh Trung I EPZ 10 Nguyen Thi Dang 22 0902.602.661 Tan Thuan EPZ B Vietnamese version: Câu hỏi Ý kiến người vấn Câu hỏi mở: Anh/Chị hiểu khái niệm “sụ gắn bó/gắn kết người lao động vối tổ chức” nào? (Tổng hợp ý kiến 10 người): trung thành người lao động với tổ chức họ làm việc, muốn làm việc lâu dài với tổ chức Theo Anh/Chị, người lao động có gắn kết cao với Tất đồng ý suất làm việc tổ chức suất làm việc họ so người lao động có gắn kết cao với người gắn kết? so với người không gắn kết Câu hỏi khảo sát: Anh/Chị có hiểu hết câu hỏi khảo sát sau không? Có câu hỏi khiến Anh/Chị khó hiểu không rõ nghĩa vui lòng cho biết ý kiến Cấp tôn trọng ý kiến công việc Cấp quan tâm tới chất lượng sống (như sức khỏe, niềm vui) Cấp lưu tâm tới mục tiêu nghề nghiệp giá trị 56 Nhà quản lý hỏi ý kiến hoạt động đào tạo Ý kiến: Đổi thành “Tôi bày tỏ ý kiến với nhà quản lý hoạt động đào tạo” Đào tạo giúp vượt qua khó khăn gặp phải công việc Nội dung đào tạo doanh nghiệp thực tế Doanh nghiệp có hoạt động phát triển nghề nghiệp cho nhân viên Ý kiến: Rút gọn cho dễ hiểu thành” Doanh nghiệp có hoạt động phát triển nghề nghiệp cho nhân viên” Doanh nghiệp có biểu dương thành tích nhân viên Tôi tăng lương Ý kiến: Được tăng lương nào? Nêu rõ “Tôi tăng lương đạt thành tích tốt công việc” 10 Doanh nghiệp tạo hội tốt cho việc thăng tiến nhân viên 11 Trong tổ chức doanh nghiệp này, nhân viên lãnh đạo thân thiện với 12 Công việc tổ chức hài hòa với sống gia đình 13 Doanh nghiệp sẵn sàng hỗ trợ gặp khó khăn sống 14 Tôi nhận tôn trọng từ người khác Ý kiến: thêm “sự ngưỡng mộ” viết đạt thành tích tốt công việc thành “Tôi nhận ngưỡng mộ (tôn trọng) từ đồng nghiệp đạt thành tích tốt công việc” 15 Công việc làm cho phép tự định cách thức tiến hành, nói khác đi, quyền tự chủ công việc 16 Tôi chịu trách nhiệm thực công việc hoàn chỉnh từ đầu đến cuối 17 Công việc đòi hỏi sử dụng phối hợp nhiều kĩ 18 Bản thân công việc làm giúp tự đánh giá mức độ hoàn thành góp ý đồng nghiệp 57 19 Tôi yêu công việc làm tổ chức 20 Thỉnh thoảng mải mê làm việc quên thời gian 21 Tôi cảm thấy phấn khởi thành viên tổ chức 22 Tôi sẵn sàng gắn bó với tổ chức Kết luận: Tất 10 người tham gia vấn nói họ hiểu câu hỏi đề cập khảo sát Các câu ý kiến rõ nghĩa Tất cho biết câu hỏi phù hợp để khảo sát yếu tố tác động đến gắn bó người lao động bối cảnh Khu công nghiệp (KCN) Khu chế xuất (KCX) TP.HCM Thông tin 10 người tham gia vấn ghi nhận lại sau STT Họ tên Tuổi Số điện thoại KCN/KCX phụ trách Phạm Thị Thảo Quyên 25 0907.318.982 KCN Tân Tạo Lê Thanh Hiệp 29 0902.403.688 KCN Vĩnh Lộc Nguyễn Thị Bích Hằng 29 0909.390.885 KCN Tân Bình Vũ Văn Tiến 29 0908.420.121 KCX Linh Trung Nguyễn Trọng Nhân 30 0933.078.575 KCN Hiệp Phước Nguyễn Trí Thanh 30 0912.549.464 KCN Lê Minh Xuân Nguyễn Thanh Phúc 23 0122.736.3521 Khu Công Nghệ Cao Phan Huy Tú 23 0978.498.599 KCN Tây Bắc Củ Chi Ngô Thị Hồng 26 0982.449.706 KCX Linh Trung I 10 Nguyễn Thị Đáng 22 0902.602.661 KCX Tân Thuận 58 Appendix E: Rejected item(s) in Pilot test Factor Scale Mean if Scale Variance Corrected Cronbach’s Item Deleted if Item Deleted Item-total Alpha if Item Correlation deleted 5.Job characteristics: items; Alpha = 645 V5.1 11.2250 2.025 550 477 V5.2 10.9875 2.620 534 508 V5.3 10.8375 2.442 633 439 V5.4 11.3875 3.557 076 780 REALIABILITY ANALYSIS – SCALE (ALPHA) N of cases = 80 59 Appendix F: Determinant, KMO and Bartett’s Test, Sree Plot, Total Variance Explained Correlation Matrixa a Determinant = 001 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Sree Plot 824 Approx Chi-Square 1721.772 df 210 Sig .000 60 Total Variance Explained Component Initial Eigenvalues Total % of Cumulative Variance % Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total % of Cumulative Variance % Total % of Cumulative Variance % 5.631 26.816 26.816 5.631 26.816 26.816 2.472 11.770 11.770 2.026 9.649 36.465 2.026 9.649 36.465 2.362 11.247 23.018 1.787 8.508 44.972 1.787 8.508 44.972 2.204 10.494 33.512 1.657 7.891 52.863 1.657 7.891 52.863 2.171 10.339 43.851 1.331 6.338 59.201 1.331 6.338 59.201 2.166 10.312 54.163 1.031 4.911 64.112 1.031 4.911 64.112 2.089 9.948 64.112 857 4.079 68.191 807 3.844 72.035 661 3.146 75.181 10 624 2.973 78.154 11 580 2.761 80.915 12 538 2.562 83.477 13 507 2.413 85.890 14 496 2.360 88.250 15 459 2.185 90.435 16 397 1.890 92.325 17 373 1.776 94.101 18 341 1.625 95.726 19 327 1.557 97.283 20 308 1.466 98.750 21 263 1.250 100.000 Extraction Method: Principal Component Analysis 61 Appendix G: Testing assumptions of mutilple linear regression Assumption of a linear relationship between the predictor variables (and composite) and the dependent variable: 62 63 Assumption of independence if residuals (errors): Model Summaryb Model R R Adjusted Square R Square 721a 520 510 Std Error Change Statistics of the R Square F Estimate Change Change 1.57349 520 51.638 Durbindf1 df2 Sig F Watson Change 238 000 a Predictors: (Constant), JOB, TRAIN, ENVIR, REWARD, LEAD b Dependent Variable: ENGAGE Assumption of Homoscedasticity of residuals (equal error variances) 1.694 64 Assumption of no multicollinearity: Coefficientsa Model Unstandardized Standardized Coefficients Coefficients B (Constant) Std Error 2.004 966 LEAD 574 067 TRAIN 180 t Sig Beta Collinearity Statistics Tolerance VIF 2.074 039 477 8.586 000 653 1.532 073 127 2.475 014 770 1.299 -.049 048 -.051 -1.025 306 800 1.250 ENVIR 150 053 153 2.827 005 691 1.448 JOB 286 065 222 4.424 000 801 1.248 REWARD a Dependent Variable: ENGAGE Assumption of No significant outliers or influential points No outliers Assumption of Residuals (errors) are normally distributed 65 66 Appendix H: Testing of moderating effects – Demographics (Gender/Age) Testing of moderating effect: Gender Group Statistics ENGAGE Gender N Mean Std Deviation Std Error Mean female 141 14.6241 2.37107 19968 male 103 15.4078 1.99232 19631 Independent Samples Test Levene's Test for Equality of Variances F Sig t-test for Equality of Means Equal variances 3.160 077 assumed Equal variances not assumed t df -2.724 Sig (2tailed) Mean Diff Std Err Diff 95% Confidence Interval of the Difference Lower Upper 242 007 -.78365 28767 -1.35030 -.21700 -2.799 237,233 006 -.78365 28002 -1.33529 -.23202 Testing of moderating effect: Age Group Statistics ENGAGE Age N Mean Std Deviation Std Error Mean younger (18-25) 170 15.0882 2.24488 0.17217 older (26-35) 74 14.6486 2.24177 0.26060 Independent Samples Test Levene's Test for Equality of Variances F Sig Equal variances assumed Equal variances not assumed 054 816 t-test for Equality of Means t df Sig (2tailed) Mean Diff Std Err Diff 95% Confidence Interval of the Difference Lower Upper 1.407 242 161 43959 31251 -.17600 1.05518 1.407 139.183 162 43959 31234 -.17796 1.05713 ... OF ABBREVIATIONS EPZs and IPs: Export Processing Zones and Industrial Parks HCMC: Ho Chi Minh City HEPZA: Ho Chi Minh City Export Processing and Industrial Zones Authority EFA: Exploratory Factor... is increasing dramatically, especially in export processing zones (EPZs) and industrial parks (IPs) According to Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA), up to. .. ECONOMICS HO CHI MINH CITY International School of Business Le Thi Hoang Lan KEY FACTORS CONTRIBUTING TO EMPLOYEE ENGAGEMENT: A study in Ho Chi Minh City Export Processing Zones and Industrial