Running head: OPENING A NEW BRANCH OF VIETINBANK IN MY

DINH 1

Opening a New Branch of Vietinbank in My Dinh

Student Name

Unit 1 – BBE; Unit 3 - HRM

November 6, 2018

Roberto Ercole; Michael D. Ballantine

OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 2

The Banking Academy

INTERNATIONAL SCHOOL OF BUSINESS

Unit Code, Number and L/508/0485 – Unit 1: Business and the Business
Title Environment
Semester and Academic Semester 1, Academic year 2018 – 2019
Y/508/0487 – Unit 3: Human Resource Management
Year Unit Assessor(s) Dr. Roberto Ercole & Mr. Michael David Ballantine
Assignment Number and BBE1: Business and the Business Environment (1 of 2)
Title
HRM1: Establishing an HRM Program (1 of 2)
Issue Date 9th October 2018

Submission Date To be announced by office (TBC)

IV Name Ms. Doti Chee (IV)
IV Date 24th September 2018

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OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 3

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Table of Contents

Overview of Vietinbank 4

1.0 Business Type and Purposes of Vietinbank 4

4.0 Purpose of Human Resource Function

4.1 Key Roles and Responsibilities of Human Resource Function

Opening a New Branch of Vietinbank in My Dinh

Overview of Vietinbank
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 4

Vietinbank is headquartered in Hanoi, Vietnam with 155 branches and offices in Laos
and Cambodia (Vietinbank, 2018). Founded in 1988, Vietinbank’s majority stakeholder is
the State Bank of Vietnam with 64.5% followed by Mitsubishi Bank with 20% and IFC
with 8% (Koh & Nguyen, 2018; Vietinbank, 2018). According to the Vietinbank annual
report (2017) the bank has 1,095,061 billion VND in assets and its ROA is .9% and it
employs about 23,000 people. An analysis of the organizational chart (see appendix A)
one can determine that Vietinbank has a highly centralized operations function with a
decentralized branch system typical in Vietnam (Vietinbank, 2018a). This analysis will
consider the business implications for Vietinbank such as the Business Type and Purpose,
the Size and Scope, and the Interrelationship of Functions. Additionally, this analysis will
consider the Human Resource requirements, including the Purpose of Human Resource
Management (HRM), Critical Issues Related to Workforce Planning, and an Assessment
of the HRM Process to open a branch in My Dinh.

1.0 Business Type and Purposes of Vietinbank (750 words)

2.0 Size and Scope of Different Types of Organisations (1,000 words)

3.0 Interrelationship Between Different Functions within Vietinbank and How They

Link to Organisational Objectives and Structure (1,000 words)

4.0 Purpose of Human Resource Function

Human resource management is all about increasing employee performance to their

highest level corresponding to their role in the organization.

VietinBank also like other organizations are made up of people, HRM is all about
acquiring services of people, developing their skills, motivating them to the foremost level
and making sure that they continue to maintain their commitment towards the organization.
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 5

In short, HRM is concerned with the management of employees from recruitment to

retirement. Although there are many functions of human resource management (Bhaswati
Bhattacharyya, 2017).

4.1 Key Roles and Responsibilities of Human Resource Function

HRM at Vietinbank includes functions:

 Recruitment and Selection

Recruitment is the process of captivating, screening, and selecting potential and

qualified candidates based on objective criteria for a particular job. The goal of this process
is to attract the qualified applicants and to encourage the unqualified applicants to opt
themselves out.

Before starting the process of recruitment, the companies must execute proper
staffing plans and should grade the number of employees they are going to need.
Forecasting of the employees should depend upon the annual budget of the organization
and short-term and long-term goals of the organization.

Recruitment and selection process is very important to every organization because it

reduces the costs of mistakes such as engaging incompetent, unmotivated, and
underqualified employees. Firing the unqualified candidate and hiring the new employee
is again an expensive process (Bhaswati Bhattacharyya, 2017).

 Orientation

Many organizations do not provide a thorough orientation to the new employees. This
is the fundamental step to help a new employee to adjust himself with the employer and
with his new job. Employee orientation program should include the objectives and goals
of the organization and how the employee can help to achieve the long-term and short-term
goals of the organization.
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 6

Giving intensive orientation to the employee is one of the major functions of human
resource management. The program should help the employee to know his assigned duties
and his exact job description, job role, and the relationship of position to other positions in
the organization. It gives clarification to the employee to take an active role in the
organization (Bhaswati Bhattacharyya, 2017).

 Maintaining Good Working Conditions

It is the responsibility of the human resource management to provide good working

conditions to the employee so that they may like the workplace and the work environment.
It is the fundamental duty of the HR department to motivate the employees. The study has
been found that employees don’t contribute to the goals of the organization as much as they
can. This is because of the lack of motivation.

Human resource management should come up with a system to provide financial and
non-financial benefits to the employee from the various departments. Employee welfare is
another concept which should be managed by HR team. Employee welfare promotes job
satisfaction (Bhaswati Bhattacharyya, 2017).

 Managing Employee Relations

Employees are the pillars of any organization. Employee relationship is a very broad
concept and it is one of the crucial functions of human resource management. It also helps
to foster good employee relations. They have the ability to influence behaviors and work
outputs.

Management should Organize activities which will help to know an employee at the
personal and professional level. Well-planned employee relations will promote a healthy
and balanced relation between the employee and the employer. It is the key for the
organization to be successful (Bhaswati Bhattacharyya, 2017).

 Training and Development

 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 7

Training and development are the indispensable functions of human resource

management. It is the attempt to improve the current or future performance of an employee
by increasing the ability of an employee through educating and increasing one’s skills or
knowledge in the particular subject (Bhaswati Bhattacharyya, 2017).

4.2 ‘Best Fit’ approach or ‘Best Practice’

The relationship between human resource management and performance can be

connected to best practice or best fit. Best fit argues that human resource policies should
align with business strategy. “Designing and implementing an appropriate reward system
that complement human resource strategies and fits business competitive strategies is
currently an important issue” (Hsieh, 2011). Best practice or high-performance work
practices are described as human resource methods and systems that have an addictive or
positive effect on organizational performance. I think both strategies work well at different
times, depending on company culture, and both should be used to create a sensible strategy;
we must align the human resource strategy with the business strategy.

Characteristics of best practice are employee development, career progression, a well-

structured recruitment process and teamwork. Employee training and development creates
a path for employee improvement; investing in human capital is a gain for the company.
“HR occupies a key role in helping organizations in tapping human capital, align it with
business strategy and turn it into a competitive advantage” (Kumar, 2016). Performance
appraisals can be used as motivational tools an excellent way to increase communication
across the organization; being evaluated does not necessarily constitute a pay increase.
However, I agree with the best-fit approach that firm’s pay levels must be competitive. “A
market reward alternative that pays these individuals at or above the market rate can prove
to be a wise investment, especially if their replacement would be particularly expensive or
disruptive. This approach ensures that the firm’s pay levels are at least competitive with
the labor market” (Hsieh, 2011).
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 8

Best practice leads to high motivation and better employee commitment; the best fit
strategy results in achieving competitive advantage. “To effectively manage human
resources, firms should nurture the type of employee behavior that is essential to the
success of their competitive strategy” (Hsieh, 2011). Best fit advocates the firm’s reward
system should be aligned to organization strategy; best practice is a group of human
resource policies which include a reward system. “Modern organizations must align their
reward systems practices with their organizational strategy to achieve higher levels of
performance at both the individual and organizational level” (Hsieh, 2011).

4.3 Hard and Soft models of HRM

 Hard HRM

Treats employees simply as a resource of the business (like machinery & buildings)

Strong link with corporate business planning – what resources do we need, how do
we get them and how much will they cost

Focus of HRM: identify workforce needs of the business and recruit & manage
accordingly (hiring, moving and firing) (Jim Riley 2017)

Key features

 Short-term changes in employee numbers (recruitment, redundancy)

 Minimal communication, from the top down
 Pay – enough to recruit and retain enough staff (e.g. minimum wage)
 Little empowerment or delegation
 Appraisal systems focused on making judgements (good and bad) about staff
 Taller organisational structures
 Suits autocratic leadership style
 Soft HRM
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 9

Treats employees as the most important resource in the business and a source of
competitive advantage

Employees are treated as individuals and their needs are planned accordingly

Focus of HRM: concentrate on the needs of employees – their roles, rewards,

motivation etc (Jim Riley 2017)

Key features

 Strategic focus on longer-term workforce planning

 Strong and regular two-way communication
 Competitive pay structure, with suitable performance-related rewards (e.g.
profit share, share options)
 Employees are empowered and encouraged to seek delegation and take
responsibility
 Appraisal systems focused on identifying and addressing training and other
employee development needs
 Flatter organisational structures
 Suits democratic leadership style
 Which is best? Soft or Hard HRM?
 Which of the two approaches is better? The answer is – it depends!

The "hard" approach to HR might be expected to result in a more cost-effective

workforce where decision-making is quicker and focused on senior managers. However,
such an approach pays relatively little attention to the needs of employees and a business
adopting a genuinely "hard" approach might expect to suffer from higher absenteeism and
staff turnover and less successful recruitment.

The "soft" approach will certainly appeal to the "touchy-feely" amongst us who like
to see people being treated nicely! And you can also make a good business case for an
approach that rewards employee performance and motivates staff more effectively.
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 10

However, the danger of taking too "soft" an approach is that when all the employee benefits
are added up, the cost of the workforce leaves a business at a competitive disadvantage
(Jim Riley 2017).

4.4 Work Force Plan

At the "My Dinh" branch, in addition to the product service for traditional customers.
We will focus on serving business customers. Especially the group of small and medium
enterprises. Therefore, we will need the following staff for the new branch: Branch
Manager, Deputy Director of Administration and Corporate Customer, Deputy Director of
Accounting and Treasury, Deputy Director of Credit, and Personnel force for departments:

- Individual room

- Room business customers

- Organization and Administration

- Internal inspection room

- Treasury treasury room

- Feng financial accounting & transactions

- Customer rooms 1 and 2

In addition, positions related to security and security services will be outsourced

4.5 Branch Organization Chart

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Branch Manager

Deputy director of administration Deputy Director of Deputy Director of

and business customers Accounting and Treasury Credit

Individual Business Organizati Internal

room customers on and inspection
room Administra room
tion

Customer rooms Financial accounting Treasury

1 and 2 department & treasury
transactions room

 Functions and tasks of business customers room

1. The function of the enterprise customer room

As a professional department dealing directly with customers who are small and
medium enterprises and some customers who are other organizations and individuals
according to the specific assignment of the Branch Director

2. Specific tasks of the enterprise customer department

 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 12

- Make every transaction with customers, coordinate with related professional

departments to advise the board of directors to organize the exploitation of capital in
Vietnam dong and foreign currencies from customers having credit relations by the
management department

- Implement marketing, support, customer care, advise customers on products and

services of the Branch

- Collect information, analysis and evaluation of enterprises that serve the room to
determine potential customers.

- Evaluate, calculate and determine credit limits for customers in need.

- Perform credit operations and deal with transactions

- Monitor and manage credits granted to customers

- Perform debt classification for each customer.

5.0 Critical Issues Related to Workforce Planning

According to the 2017 annual report of the bank (2017), Vietinbank used about
23,000 people. Therefore, workforce planning at the new branch will have to look at the
labor market trend and the availability of skilled employees.

Over the past time, implementing the direction of the Chairman of VietinBank's
Board of Directors on promoting comprehensive modernization of personnel organization
and information technology strategy projects (since 2010), Human Resources Division has
actively coordinating with professional departments, Information Technology Center and
partners to successfully implement many modernization programs in human resource
management, salary management and training. employees. In a short time (3 years), the
growth rate and efficiency of information technology application into work
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 13

VietinBank's personnel management has been at the forefront of Vietnam's banking

system. (Annual report, 2017)

Operating system programs are basically completed, applied immediately, bring high
value, promote business, self automation in the conditions of VietinBank. Projects have
many initiatives to shorten time and cost savings wide area of programs to each staff.

The programs are all at the whole level, deployed to all units, branches, subsidiaries
and to each employee in the whole system, thereby helping personnel reduce processing
time, reduce costs and contribute to effective communication of human resources policies
of VietinBank to all employees of the system (Ho Sy Tuan, 2017).

5.1 Types of Labour Market, Labour Market Trends

The labor market in Vietnam has some bright spots, such as the number of employed people

increased; labor restructuring in a positive direction, increasing the proportion of wage

workers. At the same time, the unemployment rate decreased compared to the previous

quarter and the same period last year.

The labor market has some bright spots such as the number of employed people
increased; labor restructuring in a positive direction, increasing the proportion of wage
workers. At the same time, the unemployment rate decreased compared to the previous
quarter and the same period last year. However, the income of workers decreased slightly
compared to the first quarter of 2018, the youth unemployment rate increased slightly.

The good news is that the number and unemployment rate of the unemployed people
decreased slightly compared to the first quarter of 2018 and the same period last year.
Specifically, there were 1,061,500 unemployed people nationwide, down 5,600 people
compared to quarter I / 2017. The number of unemployed people with "university or
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 14

higher" qualifications reduced to 126,900, the "college" group had over 70,000
unemployed people.

New free trade agreements were signed and expected to bring about business
investment breakthroughs, export market expansion, and the trend of applying science and
technology in enterprises would be factors affecting the structure of the labor market.

The average monthly income from the main jobs of wage earners was VND 5.62
million in the second quarter of 2018, down VND 166,000 from the first quarter of 2018
and VND 223,000 over the same period in 2017 (Phi Khanh 2018).

5.2 The Internal Labour Market.

VietinBank always attaches special importance to training and promoting the

attraction of talents, discovering, building and having a reputation roadmap for each
prospective individual in different positions or management levels. currently consistent
personnel policies.

+ In 2017, VietinBank has organized 1,009 courses in the form of gathered class to
enhance the capabilities and skills of employees within VietinBank. In which, enhancing
capabilities is on priority; and at the same time, skill developing was also focused in terms
of sales, leadership, work efficiency, advanced excel, building slides for presentations, etc
(Annual Report, 2017).

Hence, the recommendation is to engage in internal job posting with a preference for
staff with 5-10 years’ experience to ensure smooth operations, quick effectiveness, and
high growth.

Analysing Turnover, Stability and Retention.

Total number of employees as of 31/12/2017 was 23,784 (including employees of all

subsidiaries, business units, representative offices and employees working on temporary
basis).
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 15

Labor policies ensuring health, safety and welfare of employees:

VietinBank employees are entitled to the following remuneration mechanisms:

+ Monthly salary is paid based on role and responsibilities of each position, individual
capacity and job performance (KPIs);

+ Salary and bonuses are linked with the achievement and performance of agreed
upon tasks as well as employees’ contribution to final business results of their respective
unit. The position and performance-related salary scheme continues to be an important
motivation to our employees and helps to improve labor efficiency. 2017 statistics showed
an average salary of VND 24.56 million/ employee/month;

+ Social Security Retirement Benefits are provided to former employees with 2

month’s salary before their retirement date. They are also entitled to annual medical
regimes and are funded for retirement activities by the Bank (Annual Report,2017).

Table 1.1. Annual average training hours by number of employees and position.

Advances in Technology

In 2017, approximately 1,255 classes were organized in many forms such as E-

learning, focused class, live-meeting/video conference with a total of 12,032 training hours.
The main purpose of these trainings is to raise the capabilities of the employees within
VietinBank to meet VietinBank’s standards. The courses have been designed to be more
practical so that learners can apply the lessons into their work. VietinBank Training School
also strives for better educational quality, with the focus on training demands based on
career path, self-development track and aftertraining caring program (Annual Report,
2017).

6. Assessment of the Approach to Recruitment and Selection, Development and

Training, Performance Management and Reward Systems

 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 16

The recruitment process is an important step for human resources managers of

Vietinbank My Dinh branch to make the best recruitment decisions. The recruitment
decision is very important to the business strategy and to Vietinbank My Dinh, because the
good recruitment process will help the organizers get people with skills suitable to the
development Future of Vietinbank My Dinh in the future. Good recruitment will help
organizations reduce costs due to recruiting, retraining, as well as avoiding the risk of
damage in the process of performing jobs.

Sources of Recruitment

 Traditional Recruitment

Recruiting from sources such as universities: Banking Academy, Commercial

University, National Economics University, ... However, this source of recruitment costs a
lot of time, cost, but has not really brought High efficiency.

 Online Recruitment

This is a source of recruiting new trends. This recruitment source has many
advantages such as saving time for employers and candidates, convenience, cost savings,
etc. However, this source of recruitment is not high quality.

Job Analysis, Job Descriptions, Personal Specifications and Competency

Frameworks Selection

Knowledge

- Knowledge of banking - finance

- Understanding of operations, mobilizing products of commercial banks

- Knowledge of policies and laws of the state on business activities

Skills
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 17

- Good English skills, proficient use of office computers

- Ability to communicate and create good relationships with customers

- Personality gentle, careful, honest

- Conscious to create a professional style image

- Skills of customer care and handling of customer complaints (situation handling,

problem solving, decision making)

Education

- Graduated from a college or equivalent, majoring in Economics, Business

Administration, ...

- have TOIEC English certificate or above.

Other requirements

-good healthy

- age 22-28

- Good looks.

- neatly polite costumes

- Good communication skills, good pronunciation, no repeat talking

- honest, honest, gentle with colleagues with customers.

Recommendations

To: Head of Retail Banking

From: HONG TU

Date: January 25, 2019

 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 18

Ref: Opening New Branch

Should use personnel in the system of vietinbank with experience from 5-10 years of
experience. Because this is a high quality human resource, at the same time, the ability to
adapt to work is also high
 OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 19

References

Hoang Ha (2016) VietinBank: Điểm nhấn từ quản trị nhân sự [Online]

Accessed from: http://thoibaonganhang.vn/vietinbank-diem-nhan-tu-quan-tri-nhan-

su-48768.html [Accessed on January 25, 2019]

Annual Report (2017) [Online] Accessed from:

https://www.vietinbank.vn/teptailieu/1479004071544/16/08/18/eng_bctn_2017_160818p
df_1534409045839.pdf

[Accessed on January 25, 2019]

Hsieh, Y. H., & Chen, H. M. (2011, June). Strategic fit among business competitive
strategy, human resource strategy, and reward system. Academy of Strategic Management
10(2),11-32.[online]Accessed from :
https://www.researchgate.net/publication/279560843_Strategic_fit_among_business_com
petitive_strategy_human_resource_strategy_and_reward_system

Kumar, M. (2016). HR Analytics: Not Merely Intuitive?. Human Capital, 19(11), 44-
50..

Jim Riley (2017) Soft and Hard HRM. [Online]

Accessed from: https://www.tutor2u.net/business/reference/soft-and-hard-hrm

[Accessed on January 25, 2019]

Hồ Sỹ Tuấn (2017) Hiện đại hóa công tác quản trị nguồn nhân lực VietinBank
[Online]

Accessed from: https://www.vietinbank.vn/web/home/vn/news/15/07/hien-dai-hoa-

cong-tac-quan-tri-nguon-nhan-luc-vietinbank.html&p=1 [Accessed on January 25, 2019]

Phi Khanh (2018) Thị trường lao động quý II/2018. [Online]
OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 20

Accessed from: http://baoquocte.vn/thi-truong-lao-dong-quy-ii2018-that-nghiep-

trinh-do-dai-hoc-giam-78087.html [Accessed on January 25, 2019]

Trading Economics. (2018) Vietnam GDP growth rate 2000-2018. [Online]. Accessed

from https://tradingeconomics.com/vietnam/gdp-growth [Accessed on October 19,

2018]

Vietinbank. (2018) Annual report. [Online]. Accessed from

https://www.vietinbank.vn/sites/mediafile/VTB132119 [Accessed on October 15,

2018]

Vietinbank. (2018a) Home: Organization Chart [Online]. Accessed from

https://www.vietinbank.vn/web/home/en/about/organizational-chart.html

[Accessed on October 15, 2018]

Vietnam.net. (2016) Vietnam among easiest countries for English speakers to visit.

[Online] Accessed from https://english.vietnamnet.vn/fms/travel/166894/vietnam-

among-easiest-countries-for-english-speakers-to-visit.html [Accessed on October

19, 2018]

Vietnamworks. (2018) Accounting/Finance/Investment [Online]. Accessed from

https://www.vietnamworks.com/finance-investment-jobs-in-ha-noi-i59v24-en

[Accessed on October 19, 2018]

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Appendix A

Vietinbank Organizational Chart

OPENING A NEW BRANCH OF VIETINBANK IN MY DINH 22

(Vietinbank, 2018a)