Doanh Thi Thanh Binh - Peace

8/8/2019 Doanh Thi Thanh Binh - Peace

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TRAINING AND ITS RELATION TO STAFF TURNOVER

OF VIETINBANK HEAD OFFICE, HANOI CITY

A Research Proposal

Presented to the faculty of Graduate School

Southern Luzon State University, Philippines and Thai Nguyen University, Socialist

Republic of Vietnam

In Partial Fulfillment of the Requirements for the subject

Methods of Research

By


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Training and its relation to Vietinbank Staff turnover

Doan Thi Thanh Binh (Peace)

April-2010

Table content.

Doan Thi Thanh Binh MBA 5A Viettri Phu Tho 2


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CHAPTER 1

PROBLEM AND ITS SETTING

A. Introduction

During the past decades, staff turnover has become a very serious problem

for organizations. Managing retention and keeping the turnover rate below target and

within the industrys norms is one of the most challenging issues facing business. All

indications point toward the issue compounding in the future and, even as economic

times change, turnover will continue to be an important issue for most job groups. Yet

despite these facts staff turnover continues to be the most unappreciated and

undervalued issue facing business leaders.

A variety of reasons for this includes the working environment,

compensation policy and also the transparency of decision making. Dealing with staff

turnover needs the understanding thoroughly the nature of staff turnover thus manage

these factors. On the other hand, controlling turnover cannot only be in short term but

also need a further solution for long term of which training proves to be an effectiveand valuable manner to do so.

Employee turnover occurs when employees voluntarily leave their jobs and

must be replaced. Turnover is expressed as an annual percentage of the total workforce.

For example, 25 percent employee turnover would mean that one-quarter of a

company's workforce at the beginning of the year has left by the end of the year.

Turnover should not to be confused with layoffs, which involve the termination of

employees at the employer's discretion in response to business conditions such asreduced sales or a merger with another company.

The severity of turnover varies widely by type of business and the economic

condition of the region where companies are located. Innovative high-tech companies and

the most successful manufacturers frequently experience low turnover rates while fast-

food restaurant managers expect turnover to be as high as 50 to 75 percent. As another

example, coal mining companies in sparsely populated regions experience lower rates of

turnover because there are few other job opportunities.



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In general, reducing employee turnover saves money. Money saved from not

having to find and train replacement workers can be used elsewhere, including the bottom

line of the company's profit statement. The U.S. Department of Labor estimates that it

costs about 33 percent of a new recruit's salary to replace a lost employee. In other words,it could cost $11,000 in direct training expenses and lost productivity to replace an

experienced employee making $33,000. Private industry estimates for highly skilled jobs

peg turnover losses at a much higher level, up to 150 percent of the position's annual

salary.

Some research studies have found that turnover from transient workers has lasting

effects on loyal employees who stay with a company. One study tested productivity

among workers who were exposed to a management-planted person who quit in the

middle of a task, citing dissatisfaction with the job and the company. A second group of

employees worked with another planted person who had to leave the task because of

illness. The group exposed to the employee who quit had lower productivity levels than

the group exposed to the ill employee. The employees apparently took the complainer's

statements to heart while the ill employee had nothing bad to say about the company.

Staff turnover, in recent years is the most concern of all managers in

Vietinbank. Turnover rate in this bank always is much higher than that of any local bank

including both state owned bank and joint stock bank. Deriving from the situation of

such a high staff turnover in Vietinbank in recent years, T h e r e s e a r c h e r make

informal interviews with some res ig ned employees and finds out that the reasons for

leaving the organization presents a direct relation between staff turnover and training.

Most of the responses were they do not foresee prospect for career growth.

As per above mentioned, reasons the researcher took the opportunity to

formally evaluate the relationship of training and the Staff turnover rate and also to be

able to prepare a training design for the Vietinbank.

When staffs leave, this turnover can have a negative impact on your business.

This is especially the case if those leaving either are key to its success and continuity or do so

because they think you have treated them unfairly, which could result in tribunal claims.

Therefore, retaining staff and treating them fairly has benefits for your business.

Continuity and stability become part of your business' culture, and staff feel they belong



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to the organization and take pride in their work. Skills and competencies are maintained

in key business areas and productivity is often increased.

Staff turnover is a business risk, but you can minimize the ways in which it affects

your business through a structured staff management programmed.

This guide will help you manage staff turnover by providing examples of what

makes staff leave and a checklist of measures to help staff retention. There is also

guidance on how to measure and benchmark turnover and how to improve the

management of leavers.

Level of staff turnover in Vietinbank over years

Staff turnover extracts the stability in personnel of any organization, thus it receive a special

attention of employers. Although Vietinbank has a very standard and precise recruitment and

selection process, it bears a concession of turnover year after year. By the end of year 2007,

staff turnover stayed at 12.94%, and then increased to reach the peak turnover of 15.04% in

2008 and remained slightly to 13.75% in 2009. Turnover level always much higher than 10%

since 2007 up to now, ranking the highest level among finance and banking entities in

Vietnam.

Figure 1: Staff turnover rate in Vietinbank through years

Source: HR department- Vietinbank

Staff turnover over year

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

2007 2008 2009 3 month of this

year

Year

Percentage

Taking into account turnover of banking and finance industry, it is clear that Vietinbank in

recent years is at the highest level of turnover. Vietinbanks turnoverrate in 2007 is 3 (three)

times as much as that of Vietcombank a joint stock bank in Vietnam that has same business



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relationship between Training and staff turnover?

3. What are the problems and limitations on the training programs of

Vietinbank as perceived by:

3.1 Managers3.2 Present employees

Is there a significant difference on the perception of Manager and

Present employees of Vietinbank Head Office as to problems and

limitations of the Banks Training Program?

4. What will be the proposed for Training designe to improve the rate of

staff turnover in Vietinbank Head Office?

C. Hypotheses

There is no significant difference on the perception of Managers and Present

employees of Vietinbank Head office on the factors affecting high rate of staff

turnover.

There is no significant difference on the perception of Managers and present

employees of Vietinbank Head Office as to degree of relationship between

Training and staff turnover.

There is no significant difference on the perception of Managers and presentemployees of Vietinbank Head Office as to problems and limitations of the

Banks Training Program?

D. Significance of the Study

This study will provide an in depth analysis of the factors affecting the high rate

of Staff turnover for Vietinbank. Hence the result will be beneficial to the Management

of the bank, particularly the Human Resource Department for it will provide many

suggestions for them to reduce the staff turnover rate and select the effective training

method to retain their staffs, minimize expense on a result of low staff turnover rate.

Also this will be important to the employees of the bank because a better

training program will be designed for them. Also they are the direct beneficiary of this

study for it concerns their welfare. .

In general the Vietinbank will benefit from this study because this is only the

first research focus on human resource of Vietinbank and find out which will be the

appropriate method of training in Vietinbank, then it can help the bank to reduce the

expenditures.



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The researcher, as a Master in Business Administration candidate will benefit

from this research because, she will be able to apply the theories and concept learned in

the entire study of the course. Likewise she will be able to contribute to the improvement

of the training program and help in minimizing Staff turnover rate. And lastly otherresearchers who will be conducting similar researchers can use this as reference.

E. Scope and Delimitation

The relationship between staff turnover and training will be taken from the

respondents, who are former employees of Vietinbank Head office. Data will be

gathered through the use of a questionnaire. This will be distributed personally or send

through e mail.

From the responses, will determine the common reasons why employees leavetheir jobs in Vietinbank Head Office.

The training design will be based from the perceived needs. Books and other

published references will be used.

This thesis will focus only on the Vietinbank Head office experiences, and the

respondents will be the Managers and present employees of the above states branch.

This thesis is a study of the researchers study program at Thai Nguyen

University and as present an employee of Vietinbanks Main transaction office

centre. She was faced with some difficulties in making an ideal and comprehensive

research. Such a thorough framework needs a huge body of information to be

processed as well as the involvement of various departments in the bank, especially

the Board of Management.

F. Definition of terms

A. Training: Training is the process of acquiring specific skills to perform a job

better (Jucious, 1963).

B. Staff turnover: Staff turnover can be defined as the ratio of the number of

workers that had to be replaced in a given time period to the average number of

workers.

C. Turnover orlabor turnover is the rate at which an employer gains and losses

employees. Simple ways to describe it are "how long employees tend to stay" or "the

rate of traffic through the revolving door." Turnover is measured for individual

companies and for their industry as a whole. If an employer is said to have a high

turnover relative to its competitors, it means that employees of that company have a

http://en.wikipedia.org/wiki/Employmenthttp://en.wikipedia.org/wiki/Employment


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shorter average tenure than those of other companies in the same industry. High turnover

can be harmful to a company'sproductivity if skilled workers are often leaving and the

worker population contains a high percentage of novice workers.

D. Resigned employees- Employees who were separated from the job and thecompany.

CHAPTER 2

REVIEW OF RELATED LITERATURES AND STUDIES

A. Review of foreign Related Literatures

Training literatures

What is training?

According to Training and development.naukrihub.com Training is a learning process

that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or

changing of attitudes and behaviors to enhance the performance of employees. Training

is activity leading to skilled behavior.

ROLE OF TRAINING

Usually an organization facilitates the employees' learning through training so that

their modified behavior contributes to the attainment of the organization's goals and

objectives. Training is also a process of teaching, informing, or educating people so

http://en.wikipedia.org/wiki/Productivityhttp://en.wikipedia.org/wiki/Productivity


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that they may become as well qualified as possible to do their job, and qualified to

perform in positions of greater difficulty and responsibility.

Importance Of Training and Development ( According to Training and

development.naukrihub.com )

Optimum Utilization of Human Resources Training and Development helps in

optimizing the utilization of human resource that further helps the employee to achieve

the organizational goals as well as their individual goals.

Development of Human Resources Training and Development helps to provide an

opportunity and broad structure for the development of human resources technical and

behavioral skills in an organization. It also helps the employees in attaining personal

growth. Development of skills of employees Training and Development helps in increasing

the job knowledge and skills of employees at each level. It helps to expand the horizons

of human intellect and an overall personality of the employees.

Productivity Training and Development helps in increasing the productivity of the

employees that helps the organization further to achieve its long-term goal.

Team spirit Training and Development helps in inculcating the sense of teamwork,

team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within

the employees.

Organization Culture Training and Development helps to develop and improve the

organizational health culture and effectiveness. It helps in creating the learning culture

within the organization.

Organization Climate Training and Development helps building the positive

perception and feeling about the organization. The employees get these feelings from

leaders, subordinates, and peers.

Quality Training and Development helps in improving upon the quality of work and

work-life.

Healthy work-environment Training and Development helps in creating the healthy

working environment. It helps to build good employee, relationship so that individual

goals align with organizational goal.

Health and Safety Training and Development helps in improving the health and safety

of the organization thus preventing obsolescence.

Morale Training and Development helps in improving the morale of the work force.



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Image Training and Development helps in creating a better corporate image.

Profitability Training and Development leads to improved profitability and more

positive attitudes towards profit orientation.

Training and Development aids in organizational development i.e. Organization gets more effective decision-making and problem solving. It helps in

understanding and carrying out organizational policies

Training and Development helps in developing leadership skills, motivation, loyalty,

better attitudes, and other aspects that successful workers and managers usually display.

Types of training

Training in HRM has the following categories and all of these are needed for proper

development of employees;a. Induction or Orientation Training: This training is provided for the newly hired

or reassigned personnel. These programs are designed to give new employees the basic

knowledge, understanding, and skill needed for successful job performance.

b. Foundation Training: Foundation training is also appropriate for newly recruited

personnel. Foundation training is made available to employees to strengthen the

foundation of their service career. This training is usually provided at an early stage of

service life.c. Maintenance or Refresher Training: This training is offered to update and

maintain the specialized subject-matter knowledge of employees.

d. On-the-Job Training: This is ad hoc or regularly scheduled training, such as

fortnightly training under the training and visit system of extension, and is provided by

the superior officer or the subject-matter specialists to the subordinate field staff.

e. Career or Development Training: This type of training is designed to upgrade the

knowledge, skills, and ability of employees to help them assume greater responsibilityin higher positions. The training is organized departmentally for successful extension

workers, at all levels, for their own continuing education and professional

development.

Selecting a Training Method:

According to ASMED 2006, you need not only to know the types of training that

are on offer (both formal and informal), but also to know your employees. Personality

plays an important role in affecting learning abilities. Thus, if you send employee on an



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expensive training course without being sure that they respond to the methods being used,

you could be wasting your resources.

The following are examples of training that could be done in-house relatively cheaply:

1. Shadowing another employee

2. Seminars or workshops facilitated by a specialized, or particularly strong member

of staff

3. Coaching provided by management or other employees

There may be training courses available through other business support organization

such as government agencies, VCCI, bilateral donor projects, or the Womens Union.

You should make enquiries in your area to find out what is available.

With regard to tailoring it appropriately to your staff, this can be done by

consulting with staff and management (during appraisals etc) to identify areas where

training is needed or where employees feel that they could improve. You may be able to

identify some very specific areas, such as how to operate certain machinery or

technology, or more general longer term learning needs such as how to write effective

reports, or how to use initiative. The specific, short term training needs may be easier to

meet than the longer term ones. However, for the longer term goals, you may begin with

a formal course and follow up regularly with in-house, more informal sessions to

reinforce and monitor what was learned. Just comparing the quality of outputs among

different staff members can be a good way to do this.

Remember: learning is an ongoing process that may continue on a daily basis. If

you foster a learning atmosphere in your business, you may be able to establish adynamic business culture where employees continually extend their skills and develop

their capacity.

Creating a personal development plan for each staff member is another way to

select appropriate training methods, since this will help identify what each employee

wants, needs and how s/he learns effectively.

There are many different ways to train. Indeed, entire books have been written on the

ways to deliver training. How can a managercharged with training his or her employees

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significant role in staff turnover.

Factors affecting staff turnover

According to Department for business innovation and skills, 2010 Pay is rarely

the only reason why people leave, although high pay levels are often an incentive to stay.

When one run a business, it is good to be aware of factors that commonly affect staff

turnover rates, so that one can take steps to reduce them. Consider how a business scores

in the following areas.

Recruitment and induction

1. Making the right choice - are you getting the staff selection process right? Do

you encourage staff to recommend friends and acquaintances for job vacancies?

2. Induction - how do you welcome and orientate new staff? How do you let them

know where things are and what they and their colleagues are supposed to do?

3. Flexible working arrangements - do you recognize your employees' changing

needs to achieve work-life balance?

Training and staff development

A. Motivation - how supportive and encouraging is your business?

B. Organizational culture - what are you doing to promote an inclusive culture in

which staff are aware of and committed to the business' aims?

C. Matching jobs to people - are you making the best use of skills, experience and

competencies, and helping staff fulfill their aspirations?

D.Staff training and development - are you investing in your staff by giving

them time and opportunities to learn new skills?

E. Formal appraisals - how often do you give your staff the opportunity to discuss

their performance?

F. Effective grievance procedure - do staff know how to register a grievance and

are they making use of the procedure?



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G. Team working - do you encourage common goals and discourage unhealthy

individual rivalries?

Contracts, pay and working environment

a. Contracts - do the terms and conditions of your contracts encourage staff loyalty?

b. Competitive pay rates and a fair, transparent pay system - are they in line

with your industry?

c. Incentives and other staff benefits - are they relevant for your staff? Can staff

choose the ones they need?

d. The office environment - is the physical office environment pleasant and well

designed? Are noise, light and ventilation levels acceptable?

Measuring and benchmarking turnover

According to Department for business innovation and skills, 2010, you should measure

your current staff turnover in percentage terms, following this simple two step process:

Add together the number of staff working at the beginning of the time period and the

number of staff working at the end of the period and divide by two. This will give you

youraverage number of staffworking within this time period - you will need this

number for the next stage.

Work out the number of leavers over the time period, multiply by 100 and then

divide by the average number of people working in that same period.

This formula will give you a percentage for your business, known as the separation rate,

that you can compare over time. You can also use this indicator to see how your businesscompares with averages in your industry. This is known as benchmarking.

To measure how experienced employees are being retained, you can calculate the

stability index - number of workers with one year's service (or more), divided by number

of workers one year ago, multiplied by 100 = Stability index percentage rate.

Patterns of employee turnover

According to Department for business innovation and skills, 2010 the characteristicpattern of employee turnover is high for new starters, then decreasing. This pattern willDoan Thi Thanh Binh MBA 5A Viettri Phu Tho 15


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vary in any single organisation and can be shown graphically. It is known as the 'survival

curve' and can be extremely helpful in understanding the nature of employee turnover,

but must always be used in conjunction with employee turnover rate.

To create the survival curve, you must plot the number of leavers against the period for

which they were working.

Examining the causes of turnover

According to Department for business innovation and skills, 2010, to make a

meaningful assessment of your current business' position, try to identify the causes of

turnover:

It is often effective to have consultations with individuals or groups of staff to

root out any underlying problems and causes of dissatisfaction.

Exit interviews are carried out by many businesses and can reveal common

reasons for people leaving, and highlight any emerging patterns. See our guide

on when an employee resigns.

Surveys of all staffcan often indicate general satisfaction levels, but remember to

address any issues arising so that they know you take their views seriously.

Analyse your recruitment and selection procedures to see if you can identify

expectations or potential problems earlier. Alternatively you may need to make the

business' expectations clearer at the recruitment stage.

Why control staff turnover?

Staff turnover is one of the leading concerns among employers. Losing experienced staff

can affect the ability to meet program and organizational goals. The cost of turnover risesdepending on the a level of the position with the organization. These costs can range from

30 to 50% of yearly salaries for entry level jobs, up to 150% for mid-level, and as much

as 400% for senior. This includes marriage education programs where up front training

costs can be high, and good staff is needed for program success.

Turnover happens when staffs leave . Unwanted staff turnover can have a negative

impact on your business, especially if those leaving are keys to the success and

continuity of your business, or leave as a result of being treated unfairly.

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073932199&r.s=e&r.l1=1073858787&r.lc=en&r.l3=1074410820&r.l2=1074450319&r.i=1074411581&r.t=RESOURCEShttp://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073932199&r.s=e&r.l1=1073858787&r.lc=en&r.l3=1074410820&r.l2=1074450319&r.i=1074411581&r.t=RESOURCES


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According to a 2003 workplace survey by CIGNA Behavioral Health (based in Eden

Prairie, Minn, USA) called "Worried at Work: Mood and Mindsets in the American

Workplace," workers are stressed to epidemic proportions. Forty-four percent of

employees surveyed said their jobs were more stressful today than a year ago. As aresult, 45% said they've either considered leaving their jobs in the last year, have left a

job, or plan to do so soon. (see Drew Bracken, Uncertain times boosting employee

levels of stress, Business First magazine, May 23, 2003)

Turnover can be extremely costly to an organization. For each employee leave, the

turnover costs range from 120% to 200% of annual salary including both tangible and

intangible ones as follows:

Management time involved in reviewing applications, interviewing candidates andconducting reference checks in recruitment and selection activities

Potential overtime costs for other staff while the position is vacant

Time and resources spent for orientation and training of the new employee

Supervisory disruption in orienting and training the new employee Loss of productivity while the

employee is on the learning curve Errors that occur while the employee is learning

On average, new employee performance takes 13.5 months to reach maximum

efficiency. It also means that excessive staff turnover is a barrier to achieve good quality

service for the missing of productivity and workload. As a result, staff turnover decline

organization morale.

Therefore retaining staff has benefits for organizations. Continuity and stability

become part of your business' culture, and staff feel they belong to and take pride in

the business. Skills and competencies are maintained in key business areas and

productivity is often increased.

Staff turnover is a business risk, but corporate can minimize the ways in which it

affects its business through a structured staff management program.

There is no set level of staff turnover above which effects on the employing

organization becomes damaging. Everything depend s on the type of labor markets.

Where it is relatively easy to find and train new employees quickly and at relatively

little cost (ie where the labor market is loose), it is possible to sustain high quality levels

of service provision despite having a high turnover rate. By contrast, where skills

are relatively scarce, where recruitment is costly or where it takes several weeks to fill

a vacancy, turnover is likely to be problematic from a management point of view.



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This is especially true of situations in which they are losing staffs to direct competitors

or where customers have developed relationships with individual employees as is the

case in many professional services organizations.

According to: Written by J. Beam (Last Modified: 08 January 2010) Employee

turnover is a ratio comparison of the number of employees a company must replace in a

given time period to the average number of total employees. A huge concern to most

companies, employee turnover is a costly expense especially in lower paying job roles,

for which the employee turnover rate is highest. Many factors play a role in the employee

turnover rate of any company, and these can stem from both the employer and the

employees. Wages, company benefits, employee attendance, and job performance are all

factors that play a significant role in employee turnover. Companies take a deep interestin their employee turnover rate because it is a costly part of doing business. When a

company must replace a worker, the company incurs direct and indirect expenses. These

expenses include the cost of advertising, headhunting fees, human resource costs, loss of

productivity, new hire training, and customer retention -- all of which can add up to

anywhere from 30 to 200 percent of a single employee's annual wages or salary,

depending on the industry and the job role being filled.

While lower paying job roles experience an overall higher average of employee

turnover, they tend to cost companies less per replacement employee than do higher

paying job roles. However, they incur the cost more often. For these reasons, most

companies focus on employee retention strategies regardless of pay levels.

Most companies find that employee turnover is reduced when they address issues that

affect overall company morale. By offering employees benefits such as reasonable

flexibility with work and family balance, performance reviews, and performance based

incentives, along with traditional benefits such as paid holidays or sick days, companies

are better able to manage their employee turnover rates. The extent a company will go to

in order to retain employees depends not only on employee replacement costs, but also on

overall company performance. If a company is not getting the performance it is paying

for, replacement cost is a small price to pay in the long run.

B. Review of Related studies

Local StudiesAccording to Ha Nguyen, in her study on The role of training in managing

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the company (2008) in which indicated that: Training will help company to attract more

potential employee, training also help the company to minimize the shortage of

manpower, it also help the company to upgrade the existing manpower:

Training will make the employees more familiar with new skills and knowledge whichhelp them to finish their work effectively. Then they will be more confident when dealing

with their job and will stay longer with the company and reduce the staff turnover.

According to Nguyen Chau Ha (2007) on his study Staff turnover reseach and

solution he conclude that:

The number of employees who quit from company will bring many bad effects to

company image, in case that the employee is a key person for company activities. There

are so many reasons why the employees stop working those are:+ Recruitment and promotion policy

+ Training and updating new skill and technology for employee

+ Employee contract, salary rate, working environment

Foreign Studies:

Workers rank stress as the top reason they would leave their employer, but stress isn't

even among the top 5 reasons employers cite when asked why employees leave,

according to a study by Watson Wyatt and WorldatWork (October 24,2007).Employers were more likely to say that insufficient pay and lack of career development

and promotion opportunities are the top reason employees leave their company.

Rank Employees Employers

1 Stress levels (37 percent) Base pay (52 percent)

2 Base pay (33 percent)

Career development opportunities (47

percent)

3 Promotion opportunity (26 percent) Promotion opportunity (45 percent)

4Career development opportunities

(23 percent)

Relationship with supervisor/manager (35

percent)

5 Work/life balance (22 percent) Work/life balance (24 percent)

The study found that when employees are satisfied with stress levels and work/life

balance, 86 percent are more inclined to stay with their company (versus 64 percent when



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dissatisfied) and 88 percent are more likely to recommend it as a place to work (versus 55

percent when dissatisfied).

The study found that two of three companies worldwide report difficulty attracting top-

performing workers, while a full 70 percent have difficulty attracting critical-skill

employees.

More than half of companies report difficulty retaining top-performing (52 percent) and

critical-skill (56 percent) workers. The United States has the highest median voluntary

turnover rate, at 11 percent, while Latin America has the lowest, at 5 percent.

The study included a survey of 946 companies and a complementary survey of 13,000

employees.

Storey (2001) stated that, it is Human Resource Management that creates "the

ability to attract and hold on to talented employees is the single most reliable predictor of

overall excellence" From this it can be seen that the selection, training and retention of

employees is a vital element for a successful organization.

Costs of staff turnover

Updated 14 August 2006 - This year's annual survey of recruitment, retention andturnover conducted by the Chartered Institute of Personnel and Development (CIPD)

finds that turnover increased from 16 to 18 per cent in 2005.

Paradoxically, organizations in this year's survey were better at employee retention but an

increase in the level of redundancies more than compensated for this. Losing staff,

whatever the cause, is expensive: overall, the average cost of turnover per employee

(including any redundancy cost) is now 8,200. For managers and professionals this rises

to 12000.

Costs can be attributed to:

Redundancy and administrative costs associated with the leaver's

separation from the company

Administrative costs associated with creating a vacancy

Costs of covering the vacancy until it is filled

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Advertising, agency or online costs for the vacancy

Costs involved in the selection process

Induction and training costs

Employee turnover can be split into two categories: voluntary and involuntary. Voluntary

turnover arises from individuals leaving organizations for their own reasons; involuntary

turnover involves redundancy or dismissal. Voluntary turnover ("quitting") is normally

unplanned as far as the organization is concerned. Strategically important individuals can

leave at awkward times, creating further expensive consequences for a business. There is

also a tendency for high proportions of new recruits to leave during the first few months

of employment - the so-called 'induction crisis'.

Normally, according to the CIPD report, voluntary turnover substantially exceeds

involuntary turnover. However, in 2005 there were four areas of the economy where

involuntary turnover was high:

- Manufacturing - accounting for about one half of turnover

- Private services, public sector and voluntary sector - around

one third of turnover

Training: one of the keys to reduce staff turnover

According to the study of Becky Paskin, 2008 Reduce staff turnover through

motivation and training From the employer point of view, the price of replacing

employees can be staggering. Some estimates report that staff turnover now costs an

average of from 0.5 to 2.5 times the employees annual salary. For an employee

earning $40,000 a year, a departure would cost the corporation a whopping $100,000.

That may sound incredible at first, but not after adding the expenses of advertising,

recruiting, orienting and training a replacement together with lost productivity and

efficiency, revenue, morale and, in some cases, customer loyalty.

So what can a company do to avoid seeing valued employees walk out the door? Offer

bigger salaries? More benefits?

In todays still uncertain job market where competition between employer is fierce,

employers can use salaries and benefit tool to attract people but in long term when

labor market become saturated, compensation policy of all companies will be the same



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therefore company which provides better working environment and better training

condition will keep employees stay with.

From employees points of view, they are likely to be more interested in job

satisfaction and growth. May be at recruitment period, people will choose companiesthat provide more preferable compensation rate to work. Making consideration

between two companies that provide same compensation condition, its obviously

clear that people will join the corporation give them better working environment and

better chance for development. People who have experienced their time in many

different companies fully understand the importance role of training in their career.

For them, job satisfaction and potential growth are put on the top priority. For

corporations, that means investing in themproviding employees with tools that willhelp them improve their job skills and manage their career paths.

C. Conceptual Framework

The process of conceptual framework comes from profile of the employee of the

Vietinbank HO (located in Hanoi city). Listed out all the related factors that will affect

the staff turnover: salary, income, working environment, management levelthese

factors will directly effect on the Vietinbank staff turnover in how they give training

Doan Thi Thanh Binh MBA 5A Viettri Phu Tho

INPUT

Respondents Profile:

-Present Employees

-Resigned Employees

Respondents Perception as to:

*Factors Affecting high staffturnover

*Relationships betweentraining and staff turnover

*Problems and Limitations ofthe training program

PROCESS

Evaluate perception by

taking the mean responses,

and the significantrelationship between training

and staff turnover

Analyze the gap between

what Vietinbank training

policy future and what do

they have at present.

OUTPUT

* Find out the effectivetraning method for

Vietinbank employees.

*Proposed staffing training

design for Vietinbank

FEEDBACK

22


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method to effect on their employee and slowdown the staff turnover of the company.

The second part of input is profile of respondents including age, sex, civil status,

education attainment, occupation, income. These factors will impact on the trend of

answer for the questionnaire. These factors will effect on the demand for training and

training method.

And the last of the output is perceived of respondents on training design of the

company with respect: time for training, training method This part will evaluate the

exactly and detailed perceive of respondent on the company training strategy on almost

aspects of the research's contents.

The second phase of the study is processing. In this phase, questionnaire is

evaluated and gives the distribution of questionnaire checklist; the data will be statistic by

a statistics software and interpretation

The third phase the Training methods of Vietinbank HO will be determined and

based on the result from statistic, the training strategy in detail will be given.



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CHAPTER 3

RESEARCH METHODOLOGY

This chapter presents the design and methodology of the study. It includes

research design, description of respondents, samples and sampling technique, researchinstruments, data gathering procedures and statistical treatment.

a. Research design

The research design is created with the purpose of gathering data and information

regarding the worker, analyze the existing issues, assess them and find out the best

solution to reduce the staff turnover and then pushing the training.

The researcher uses the descriptive method, in which includes quantitative andqualitative analysis of data. And the main source of data comes from questionnaire,

interviewer, and document analysis (CV analysis).

The information for those who leave Vietinbank to work in other place will be

collected using email (the email address come from the human resource department)

The descriptive method of research will be used, and basically describe the factors

affecting the High Staff turnover rate and the degree of relationship of Training and the

Staff turnover rate. Also it will describe the problems and limitation of the Banks

Training program and propose improvement.

b. Respondents of the study, sample size and sampling technique

* Respondent of this thesis are:

No Type of respondent Number

1 Managers 15

2 Present employees 55

Total 70

* Sample size: To determine the ideal sample size for a population, applying the

Slovin's formula

n=N/(1+(N*e2))



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This thesis also take the interview with employees of Vietinbank with the total

number of Employees in HO is around 120 employees (except managers)

Where:

n=120/(1+120*0.12)= 55

n = number of samples

N = total population = 120

e = margin of error (= 1% = 0.1)

* Sampling technique: This study will use simple random sampling method to

select the sample, base on the list of respondent with the selection distance is k (k=N/n).

If one sample can not access we will select the next close as replace sample.

From the existing list of personnel from the file of HR department, 55 respondents

will be drawn.

c. Research Instruments

The instruments that will be used in this thesis are questionnaire, therefore three

groups of respondents are:

(i) Managers

(ii) Present employees

For some qualitative factors, respondents will answer the questionnaire according to

given form, from 1 to 5, similar to never, seldom, sometimes, often,

always. It means that the respondents will express their ideas, from strongly

disagree to strongly agree attitude.

Parts of the Questionnaire

Part I- Profile so the most important is whether the respondent is a manager, or present

employee or a resigned employee.

Part II- Perception as to causes of labor turnover, as perceived by

1. Managerss

2. Present employees

Part III- Relationship of training to labor turnover as perceived by

1. Managers



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Part IV Problems and limitations of the training program in Vietinbank as perceived by

the

1. Manager


d. Data gathering procedures

1. Request for permission: Before making an interview with manager the

reseacher have to take the permittion of the interviewee and orgnize a meeting

with them.

2. Review literatures and studies: The reseacher have to look carefully through

internet to find out the most suitable literatures for this scope of thesis

3. Prepare your Research instrument: Prepare the questionaire use for

manager and employee

4. Checking of the instrument: Pretest

5. Validating the instrument

6. Final revision of the instrument

7. Sampling design and Taking the sample:

8. Data gathering: Secondary data: from the human resourse department,

primary data: from interviewing

9. Encoding of data

10. Data analysis and evaluation

e. Statistical Treatment

Data will be recorded in statistics software and processing. Then the tables of

result will be supplied for comments and evaluations in the next chapters.

For the responses on the survey instrument the 5 Likart Scale will be used and

interpreted based on their averages.

Interval Equivalent

4.20 5.00 Always

3.40 4.10 Frequent



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2.60 3.30 Sometimes

1.80 -- 2.50 Seldom

1.00 1.70 Never

Testing for the Hypothesis it will use One- Way Analysis of Variance at .1 level

of significance.



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Appendix A

Letter to respondents

Dear Mrs./ Mr.,

I am Doan Thi Thanh Binh, a Master of Business Administration student from the

International Training Center of Southern Luzon State University in the Republic of the

Philippines and Thai Nguyen University of the Socialist Republic of Vietnam. Currently I

am working on the Masteral Thesis entitled " TRAINING AND ITS RELATION TO

STAFF TURNOVER OF VIETINBANK".

In this regard, I am requesting for your invaluable help by accomplishing the attached

questionnaire. Please do not leave any blank, and be rest assured that all your responses

will be treated with confidentiality and use for academic purposes only.

Thank you very much for your help in attaining the objective of this research study.

Very truly yours,

Signature Over Printed Name



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QUESTIONNAIRE FOR MANAGERS AND EMPLOYEES

Direction: Please answer this checklist by ticking on the item that corresponds to youranswer or write your answer on the available space.

Full name:__________________________

Department: ____________________________________________________

Position in the Company: q Managers q Employees

Part I: PROFILE OF THE RESPONDENTS

1. How long do you working in Vietinbank (Length of service in the bank):

q Less than 2 years q 2 years less than 4 years

q 4 years less than 6 years q 6 years above

2. What is your income?

q Less than 4 millions q 4 millions less than 6 million

q 6 millions less than 10 millions q Above 10 millions

Part II. Factors affecting labor turnover

The following statements are negative situation that maybe present in your

workplace. Rate the following using the indicators below, whether they might cause a

personnel to resign from his/her present job. Place a check (/) mark on the number

corresponding to your perceived answer;

5- Strongly agree 4- Agree 3- slightly agree 2- disagree 1 -Strongly disagree



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Point

Questions

5 4 3 2 1

Training programme in Vietinbank suitable for yourpresent responsibility

Employees whose attend the training programe will be

pay higner salary

Lack of appopriate training

Once hired employees were given training in the job.

There is a regular training program for all employees.

Employees are given fair changes for training and

development.

The following types of training are present in the

company:a. Simulations

b. Case Studies

c. Role Playing

d. Demonstration

e. Seminar

Training opportunities

Please use the options below by indicating a check mark () on the appropriate

option box provided. 1 . Always 2. Frequent 3. Sometimes 4. Seldom 5. Never

In your opinion what will be the major reason for employee leaving the existing work?

Training and development Problems

There is an adequacy of training available for

the employees.

Training is not properly and justly distributed

to all employees.

Very few were sent to training.



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The personnel sent to training did not improve

in their work.

The employee who attend so many training

progamme not paid high

Part III- Relationship of training to labor turnover as perceived by:

The following questions relate to your perception regarding the training method

applied by Vietinbank HO. Put a check mark on the number corresponding to your

choice. Each number has this meaning as state below:

Sales Skills

1

Weak

2 3

avg.

4 5

strong

Ability to qualify customers

quickly

Identifying customer needs

Identifying customer objections

Overcoming customer objections

Closing the sale

People / Communication Skills

1

weak

2 3

avg.

4 5

strong

Listens attentively

Shows enthusiasm on the phone

Shows enthusiasm face-to-face

Friendly / approachable

Polite with customers &

management

Teamwork

Understanding customers POV



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Building a rapport with customers

Ability to assist / train others

General Banking Skills

1

weak

2 3

avg.

4 5

strong

Goal-oriented

Able to execute managerial orders

Skill in using the phone systems

Order entry skills

Interest in personal development

Understands financial goals

Part IV Problems and limitations of the training program in Vietinbank

Questions on Employee Satisfaction with Training, On the following scale, circle the

number to indicate how much you agree or disagree with each statement.

Question Strongly

disagree

1

Diagree

2

Neutral

3

Agree

4

Strongly

agree

5

Employees receive the training

necessary to do their jobs

1 2 3 4 5

Employees receive needed

training about new technologies.Training opportunities are

unfairly allocated across

employees or work unitsSupervisors/team leaders support

employee efforts to learn outside

the job (e.g., conferences, cont.

education, membership in trade

or prof. org.).High priority is given to



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providing appropriate training.Overall, how satisfied are you

with the training you have

received at the agency

References

1. Barron, J. M., Berger, M. C., & Black, D. A. (1999). Do

workers pay for on-the-job training? Journal of HumanResources.

2. Dearden, L., Machin, S., Reed, H., & Wilkinson, D. (1997).

Labour turnover and work-related training. London UK7

Institute for Fiscal Studies.

3. Futrell, C. M., & Parasuraman, A. (1984). The relationship

of satisfaction and performance to sales force turnover.

Journal of Marketing.



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4. Green, F., Felstead, A., Mayhew, K., & Pack, A. (2000).

The impact of training on labour mobility: Individual and

firm-level evidence from Britain. British Journal of

Industrial Relations.5. Recruitment, retention and turnover 2008. London:

Chartered Institute of Personnel and Development, 2008

6. Retaining your best people. Boston, Mass: Harvard

Business School Press, 2006

7. The 7 hidden reasons employees leave: how to recognize

the subtle signs and act before its too late, Leigh

Branham New York, NY: AMACOM, 20058. Improving staff retention IDS HR Studies, Feb 2008, no.

863, whole issue

9. Personnel best, Robin Evans Supply Management, 15 Feb

2007.

10.Benchmarking labour turnover 2006 part 1, Neil Rankin

IRS employment Review

11.Benchmarking labour turnover 2006 part 2, Neil Rankin

IRS Employment Review

The attached sheet of interview

QUESTIONNAIRE FOR MANAGERS AND EMPLOYEES

Direction: Please answer this checklist by ticking on the item that corresponds to your

answer or write your answer on the available space.



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Full name:__________________________

Department: ____________________________________________________

Position in the Company: q Managers q Employees

Part I: PROFILE OF THE RESPONDENTS

1. How long do you working in Vietinbank (Length of service in the bank):

q Less than 2 years q 2 years less than 4 years

q 4 years less than 6 years q 6 years above

2. What is your income?

q Less than 4 millions q 4 millions less than 6 million

q 6 millions less than 10 millions q Above 10 millions

Part II. Factors affecting labor turnover

The following statements are negative situation that maybe present in your

workplace. Rate the following using the indicators below, whether they might cause a

personnel to resign from his/her present job. Place a check (/) mark on the number

corresponding to your perceived answer;

5- Strongly agree 4- Agree 3- slightly agree 2- disagree 1 -Strongly disagree

Point

Questions

5 4 3 2 1

Training programme in Vietinbank suitable for your

present responsibility

25 30 10 5 0

Employees whose attend the training programe will be

pay higner salary

15 18 26 10 1

Lack of appopriate training 37 18 13 1 1

Once hired employees were given training in the job. 12 23 26 5 4



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Point

Questions

5 4 3 2 1

There is a regular training program for all employees. 12 23 26 5 4Employees are given fair changes for training and

development.

12 23 26 5 4

The following types of training are present in the

company:

12 23 26 5 4

a. Simulations 12 23 26 5 4

b. Case Studies 12 23 26 5 4

c.Role Playing 12 23 26 5 4

d.Demonstration 12 23 26 5 4

e.Seminar 12 23 26 5 4

Training opportunities 10 18 22 8 12

Please use the options below by indicating a check mark () on the appropriate

option box provided. 1 . Always 2. Frequent 3. Sometimes 4. Seldom 5. Never

In your opinion what will be the major reason for employee leaving the existing work?

Training and development Problems

There is an adequacy of training available forthe employees.

0 0 5 45 20

Training is not properly and justly distributed

to all employees.

0 0 3 7 60

Very few were sent to training. 34 14 6 6 10

The personnel sent to training did not improve

in their work.

10 25 8 7 20

The employee who attend so many training 8 12 30 11 9



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General Banking Skills

1

weak

2 3

avg.

4 5

strong

Goal-oriented 17 10 13 18 12

Able to execute managerial orders 17 10 13 18 12

Skill in using the phone systems 17 10 13 18 12

Order entry skills 17 10 13 18 12

Interest in personal development 17 10 13 18 12

Understands financial goals 17 10 13 18 12

Part IV Problems and limitations of the training program in Vietinbank

Questions on Employee Satisfaction with Training, On the following scale, circle the

number to indicate how much you agree or disagree with each statement.

Question Strongly

disagree

1

Diagree

2

Neutral

3

Agree

4

Strongly

agree

5

Employees receive the trainingnecessary to do their jobs

14 13 25 18 0

Employees receive needed

training about new technologies.

14 13 25 18 0

Training opportunities are

unfairly allocated across

employees or work units

14 13 25 18 0

Supervisors/team leaders support

employee efforts to learn outsidethe job (e.g., conferences, cont.

education, membership in trade

or prof. org.).

14 13 25 18 0

High priority is given to

providing appropriate training.

14 13 25 18 0

Overall, how satisfied are you

with the training you have

received at the agency

14 13 25 18 0



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