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Impact of Wage on Human Resource Management in Period of Crisis:

The Case of Viet Nam Firm

Background
Human resource also known as an employee is the most important factor in the
development of the organization (Nguyen Thi, et al, 2013). The employees are a vital part of a
firms assets. In order to realize the firms goals and objectives, employees must be driven to
work towards achieving those goals. In a constantly changing business environment, developing
human resource could make a firm efficient and effective in facing the challenges brought about
by engaging into business. In the process of organizational adaptation to environmental demands,
primarily through the anticipated outputs, human resources play a key role (Camilovic, S., PhD.,
2010).
Wage is a huge factor in enhancing employee performance and motivation. It can also be
destructive to the firm if the employees believe that they are not rewarded enough for their
efforts. Hence, it is important that firms develop strategies to provide employees with adequate
wage without sacrificing company profitability.
The study evaluates the relationship of human resource management and working
efficiency based on the wage of the employees in a period of crisis in Viet Nam, using data from
Huong Giang travel company (HG Co.).

Reaction/Insight
The years under review included the years 2008-2012 wherein Viet Nam suffered an
economic crisis. Despite this fact, nominal wage grew continuously. It is advantageous for a firm
to increase its nominal wage for the employees to cope up with rising prices of goods and
services. One of the result of an economic crisis is inflation. According to Wurstbauer (2015),
inflation has it short-term and long-term effects. Hence, employees should be protected from its
effects.
Also, the number of employees is increasing from 2006 to 2011, and decreased by only 5
persons in 2012. 2011 registered the highest number of employees that HG Co. has, which is 45.
Employee turnover is low, and it is significantly affected by fringe benefits, including wage
(Buzeti, et. al., 2016). Also, there is relatively few employees, 33%, have seniority of 7 years.
The study provided a classification of the activities of the national economy and the
average gross wages for each activity. The highest registered average gross wage is in
international agency but the reliability is low due to its small sample size.

One of the factors in determining the wage for HG Co is seniority. Also, there is a large
difference in the wage of the employees occupying different positions. It was found out by the
study that only 30% of the employees are very satisfied with the wage they receive. The
remaining employees are either satisfied, partially satisfied, and the 5% are not satisfied.

Recommendations
The data used in the study are gathered mainly on interviews and data from a specific
firm, which is HG Co. For further studies, it is beneficial to include other firms engaging in
different businesses operating in Viet Nam in order to better gauge the impact of wage on human
resource management during a period of crisis.
In addition, the researchers classified their respondents mainly by age, seniority and sex
(male and female). It is recommended that other factors may be considered in classifying the
respondents such as marital status, status as head of the family, number of persons in the
household, and educational attainment. By further classifying the respondents and understanding
their background, we can better understand the effect of the economic crisis in their spending
habits. Throughout the study, it is noted that men have a higher nominal income than women. It
left me wondering why this is the situation in the company. An additional classification for the
educational attainment and job description of the employees would better address my question,
since I believe that wage discrepancy due to gender alone is contrary to morals or public policy,
if not contrary to law.
Finally, evaluating the monetary policies implemented by the State in order to counter the
effects of the economic crisis may be incorporated in the study. This is to provide more useful
information for the readers and other future researchers.

References
Nguyen Thi, L. T., & Xiang, X. (2013). Impact of wage on human resource management in
period of crisis: The case of viet nam firm. Australian Journal of Business and Management
Research, 3(9), 16-n/a. Retrieved from http://search.proquest.com/docview/1519570303?
accountid=31259
Camilovic, S., PhD. (2010). BASICS FOR APPLYING A CONTEMPORARY CONCEPT FOR
HUMAN RESOURCE MANAGEMENT. Faculty of Tourism and Hospitality Management in
Opatija.Biennial International Congress.Tourism & Hospitality Industry, , 820-830. Retrieved
from http://search.proquest.com/docview/763422487?accountid=31259

Wurstbauer, D., & Schfers, W. (2015). Inflation hedging and protection characteristics of
infrastructure and real estate assets. Journal of Property Investment & Finance, 33(1), 19.
Retrieved from http://search.proquest.com/docview/1648112739?accountid=31259
Buzeti, J., Klun, M., & Stare, J. (2016). EVALUATION OF MEASURES TO REDUCE
EMPLOYEE TURNOVER IN SLOVENIAN ORGANISATIONS. E+M Ekonomie a
Management, (1), 121-131. doi:http://dx.doi.org/10.15240/tul/001/2016-1-009