Some measures to improve the quality of human resources at Chon Thanh Electric during the period 2015-2020

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Department of Business Administration

I-Shou University

Master thesis

Some measures to improve the quality of human

resources at Chon Thanh Electric during the period

2015-2020

Advisor: Guey, Ching - Chung, Ph.D

Co-advisor: Bui Thi Mong Trang, Ph.D

Graduate Student: NGUYEN DUY HUNG

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ACKNOWLEDGEMENT

I would like to thank my professors who have been teaching for the last two years in the MBA courses. I have learnt a lot from them. Especially, I would like to thank Dr.Ching Chung Guey and Dr. Bui Thi Mong Trang for their guidance in my thesis. Their knowledge and advices are essential for me to finish my thesis. I also want to thank my classmates for the wonderful experience in class and in life they have shared with me. I believe that the time with them in this master class is just a beginning of a sustaining relationship in the future.

Last but not least, I would like to thank my family for their support and motivation so that I can finish this course. Thank you!

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ABSTRACT

Human resources is the most important property toward an enterprise, the importance of human factor is obvious and undeniable reality. Among administrative missions, human management is the center and the most important factor because other matters depend on the success of human management. Therefore, the issue of human resources is being more considered and seen as the core management function as well as the crucial factor of management process. As Vietnam is in rapid development in every aspect, human resources has become prominent for every industry including the electricity industry. Thus, the author implements this study in order to depict basic theory about building strategy on business and management of human resources with the aims to orient the strategy. The author also measures improving the quality of human resources at Chon Thanh Electric and analyze the actual management of human resources at Chon Thanh Electric, pointing out strengths, weaknesses and reasons leading to this situation. Finally, the study is expected to recommend strategies to improve the quality of human resources at Chon Thanh Electric.

Keywords: human resources, electricity company, strategy

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LIST OF FIGURES

Figure 2.1 Threat factors for micro environment towards enterprises’ business ... 9

Figure 2.2 Parts of micro and macro environments ... 11

Figure 2.3 Strategic choices for an enterprise ... 17

Figure 2.4 The process to identify human resource needs of an enterprise ... 23

Figure 4.1 The model of development for the Production team ... 49

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LIST OF ABBREVIATIONS

CBNV Staff VC-NLĐ Officer – Employee GĐ Director KD Business TP Department Head vii

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CHAPTER 1 INTRODUCTION

1.1 THE URGENCY OF THE THESIS

Vietnam is in the period of renovation, national industrialization and modernization, leading to the open economy to access the world economic map.

This change of economic structure exposed several weaknesses and irrationality in management activity. Moreover, from development trends of the era, persons who have knowledge and skills will hold more important role, they are the motivation for development and internal power for the economy as well. Therefore, huge and difficult challenges toward Vietnam enterprises are not the arrangement of modern equipments but equipping persons in an enterprise with necessary factors to meet requirements of the era and the renovation period; in other words, the matter is to manage human resources of a corporation to the most effective way. Thus, deep researches to find out helpful measures, which help to increase effectiveness in management, majoring in human resources, become a required step.

In addition, in the transformation of the national economic structure, we realized the importance of enterprises, especially in social development. Together with agriculture and agricultural economy, enterprise is one of the factors assuring the stability and sustainability of the economy and economic development. It helps to create jobs and income for employees, to exploit and utilize potential capital, skills and hidden resources in residential zones, to partly contribute to the distribution of industries in different areas, to play the role supporting large industries, to balance social – economic matters and environment and to preserve and develop traditional crafts village which represent national cultural identity as well.

We are also aware that human resource is the most important property toward an enterprise, the importance of human factor is obvious and undeniable reality. Among administrative missions, human management is the center and the most important factor because other matters depend on the success of human management. Therefore, the issue of human resources is being more considered and

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seen as the core management function as well as the crucial factor of management process.

Understanding the importance of this matter, I choose the topic for my Master’s thesis as “Some measures to improve the quality of human resources

at Chon Thanh Electric during the period 2015-2020”.

1.2 THE THESIS HAS SOME FOLLOWING OBJECTIVES:

- To depict basic theory about building strategy on business and management of human resources with the aims to orient the strategy – measures improving the quality of human resources at Chon Thanh Electric

- To analyze the actual management of human resources at Chon Thanh Electric, pointing out strengths, weaknesses and reasons leading to this situation

- To recommend strategies to improve the quality of human resources at Chon Thanh Electric

1.3 RESEARCH SUBJECT AND SCOPE OF RESEARCH

- Research subject: The thesis researches on theory and practice toward human

resource management at Chon Thanh Electric

- Scope of research: The thesis researches on human resource management at Chon

Thanh Electric during the period from 2010 to present. Analyzing received results, limitations and recommendations aims at enhancing the quality of human resources at Chon Thanh Electric.

1.4 RESEARCH METHODS

1.4.1. THE SELECTION OF QUALITATIVE RESEARCH

- The thesis is based on the uses of traditional research methods, which analyze and summarize secondary data by approaching system. Secondary data includes statistical documents, published reports and documents of human resource management at Administration – Human Resource Department, Finance – Accountant Department and research materials as well as references; specialized magazines, which help to find out orientation, policies of the government and to

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figure out deep learning regarding to human resource strategy. In addition, it looks for more information about other fields to understand strengths, weakness as well as orientation, thereby bringing out more measure that is appropriate to Chon Thanh Electric.

- Group discussion method is also used to collect secondary data, to test research results, identifications and evaluation of the author as well. The subjects invited to join group discussion are managers and employees working at departments of Chon Thanh Electric.

1.4.2 THE RESULTS NEEDED TO ACHIEVE

The aims are to analyze the actual situation then find out strengths, limitations about organizational structure; the situation of current uses and development of human resources at Chon Thanh Electric in the recent years, simultaneously build strategy to improve the quality of human resources until 2020 that help to accomplish political and business missions of Chon Thanh Electric.

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CHAPTER 2 THEORETICAL FOUNDATION

Strategy is the measure that companies, enterprises use to orient the future to achieve success. It means they are oriented ways and methods to reach the aimed targets.

Among strategies, the strategy of human resource is the important part of any companies and enterprises. It has the causality with the general strategy and other parts. Exploiting and using human resources effectively is now the top priority of each sector and enterprises.

2.1 DEFINITIONS

2.1.1. DEFINITION OF STRATEGY

At present, there are several different definitions of strategy. The basic reason leading to this circumstance is that systems have different conceptions about organization in general and different access methods toward organizational strategy in particular.

In terms of ontology, depending on the conceptions of positivism or constructivism, the strategic essence is identified by natural law or meaningful impact of subject respectively. In reality, strategy is often defined by practical way to facilitate the process in organizations.

According to Johnson and Scholes, strategy is defined as below:

Strategy is to define orientation and scope of work of one organization in a long time, where organization has to acquire advantages by combining resources in a challenge environment to satisfy the best of market needs and meet the demands of factors related to the organization.

In accordance to Wikipedia:

Strategy is an action program, action plan that is designed to reach specific target, a combination of long-term targets and measures, methods as well as ways to reach these targets.

Therefore, one strategy has to handle the combination of following matters: to identify needed targets exactly; to identify ways or methods to achieve them; to orient and distribute resources to get selected targets.

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Among these three factors, noticeably resources are limited and strategic mission is to find the way to use resources to acquire the targets in the most effective way.

(Source: Assoc. Prof. Dr. Le The Gioi – Dr. Nguyen Thanh Liem – M.S. Tran Huu Hai, Strategic management, Statistical Publishing House and Phan Thi Ngoc Thuan (2005), Business Strategy and internal corporation planning, Science and Technics Publishing House, Hanoi; Open Wikipedia)

Therefore, we can see that no matters what conceptions about strategy are, they all have general purpose which is to assure the success of enterprise; strategy of an enterprise is the product combining what environment has, what enterprise can and what enterprise need.

2.1.2. ROLE AND MEANING OF STRATEGY

Strategy has an important role and great meaning towards the existence and development of enterprises. It helps enterprises to realize their targets clearly, it is the base of every specific actions that helps to create better business strategy by using the method of system access and to increase the bond and connection of administrative officers in processing enterprise’s targets. Enterprises without strategy is like fisherman without compass. (Source: Assoc. Prof. Dr. Le The Gioi – Dr. Nguyen Thanh Liem – M.S. Tran Huu Hai, Strategic management, Statistical Publishing House and Phan Thi Ngoc Thuan (2005), Business strategy and internal

corporation planning, Science and Technics Publishing House, Hanoi)

2.1.3. KINDS OF STRATEGY

In accordance to their bases, strategies are classified as below:

- General strategy: often mentions to the most important matters and decisive factors with long-term meanings, which decides the existence of enterprises.

- Strategy at business unit: Is mainly competitive strategy (competitions by price, by product differentiation, services or a specific strategic segment)

- Sector strategy: normally, in enterprises, this kind of strategy includes production strategy, finance strategy, human resource development strategy, marketing strategy, and research and development strategy.

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(Source: PHD. Chiachi Tsan, Study materials of Strategic management, Assoc. Prof. Dr. Le The Gioi – Dr. Nguyen Thanh Liem – M.S. Tran Huu Hai, Strategic

management, Statistical Publishing House and Phan Thi Ngoc Thuan (2005), Business strategy and internal corporation planning, Science and Technics

Publishing House, Hanoi)

2.2. BUILDING STRATEGY

2.2.1. STEPS TO FORMULATE STRATEGY

In accordance to the process of building strategy, an enterprise often follows the seven steps as below:

Step 1: Being created by experts after researches and inspections

Step 2: SWOT analysis (S: Strengths; W: Weaknesses; O: Opportunities; T:

Threats)

Step 3: Reviewing sectors

Step 4: Building competitive strategy for each business unit

Step 5: Building financial measures, human resource, and technology Step 6: Evaluating the effectiveness and possibility

Step 7: Formulating the strategy based on strategic documents. This is the final product.

2.2.2. IDENTIFYING STRATEGIC MISSIONS AND THE SYSTEM OF STRATEGIC TARGETS

Functions are the main reason for the existence of enterprises and help to distinguish one enterprise from another enterprise. Contents of functions must be

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informed to serve the leading orientation, therefore, they have to be deployed and sketched into specific targets.

- The system of targets is detailed results that enterprises strive to get, which means this is the destination of all enterprise strategies and decisions. In other words, they are results which enterprises hopefully achieve when implementing strategies. In accordance to each enterprise, each period, the objectives are changed respectively to formulate the system of strategic objectives (increase rate in revenue, profit, productivity, shares, position...). However, they can also be divided into two main objectives:

- Long-term objectives: are desired results that enterprises propose and implement in the long time (more than 01 business cycle). At present, enterprises often have different targets but they can be summarized into 03 basic objectives. They are profit earnings, market position and safety level in business.

- Short-term objectives are desired results that enterprises propose and implement in the short time (01 business cycle). For this kind, objectives must be specific and have obvious results (for example, aims of productivity, shares, technological products…)

- No matters what the targets are, they have to assure the following criteria: specification, flexibility, orientation, possibility and consistency.

(Source: Prof. Dr. Le The Gioi – Dr. Nguyen Thanh Liem – Mr. Tran Huu Hai,

Strategic management, Statistical Publishing House and Phan Thi Ngoc Thuan

(2005), Business strategy and internal corporation planning, Science and Technics Publishing House, Hanoi)

2.2.3. FORECASTING STRATEGY (BUSINESS ENVIRONMENT ANALYSIS) INTERNALLY AND EXTERNALLY

Analyzing business environment is to identify chances and threats from environment.

Macro environment affects all business sectors but the effect levels are different. Microenvironment is defined towards specific sectors.

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Internal environment includes internal factors of one enterprise and this is the environment that an enterprise can control.

Economic environment of an enterprise is defined through the potency of

national economy. Therefore, the important factors to evaluate this potency include growth rate of the economy, interests and trending, currency exchange rates, inflation rate, consumption level, unemployment rate and tax system.

Technological environment: is the active factor covering several chances

and threats towards an enterprise; it has huge and direct impact on strategic business of sectors.

Socio-cultural environment is the largest changing factor and the change of

lifestyle followed by integration trend. It always brings chances to manufacturers. Enterprises have to take consumption behavior, marriage and birth rates, position and roles of woman in the society and family into account.

Residential environment: the change of residences leads to serious and

important changes of economic – social process in the large scale (even all over the world). This process affects and changes strategy of an enterprise.

Legal environment: the stability or instability on politics, the change of laws

and management policies can either increase the pressure (threats) or create chances for an enterprise to have better business.

Natural environment: this is the important factor not only towards human

lives but also towards input factor of the economy, including location, weather, land, natural resources, minerals and ecosystem…

Global environment: regionalization and globalization have been and will

be the inevitable trend that every enterprise and nation has to take into account.

Analysis of microenvironment: this is the environment deciding

characteristics and competition level in the sector. They are factors in the sector; therefore, missions of strategists are to analyze impacts on the environment to identify chances and threats that an enterprise must face with, they are:

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- New competitors entering the market: are enterprises which do not compete in the same sector at present but they have competitive capacity if they choose to join the sector and bring new technology, new persons or new finance capacity as well. - Pressure from suppliers: the operation of enterprises need input factors bought from suppliers. To whom, advantages of buying of selling belong depend on the number of persons trading in the market.

- Pressure from customers: this is the target that enterprises care and exploit and it is the decisive factor towards the existence of an enterprise. Therefore, buyers can be seen as competitive threat when they force enterprises to decrease the price or when they require high-qualified needs and better services; on the other hand, when buyers are on weak side, this brings enterprises the chance to increase price and profit.

- Alternative products and services: they are other products that satisfy the same needs of customers.

We can summarize threat factors in microenvironment as Figure 2.1

Figure 2.1 – Threat factors for micro environment towards enterprises’ business

Internal analysis: Internal analysis will contribute to formulating a base

system to plan complete strategy. When analyzing this environment, therefore, we have to analyze factors deeply to identify strengths and weaknesses. Then, we realize that the existence of an enterprise depends on capacity whether this

Customer pressure Current enterprises and

competitors New participants (Potential competitors) Supplier pressure Alternate products and services 9

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enterprise can receive sources from external environment (such as capital, human resource and materials) or not.

Human resources: include managers at various levels and executive

employees at all sectors. For managers, qualifications about professional ethics, specialized skills, human relations skills, thinking skills must be evaluated deeply in each period to have appropriate management planning, especially for advanced managers. For executive agents, standards of ethics and qualifications must be checked and analyzed through placement tests to plan training process aiming at increasing quality.

Working capital of an enterprise includes capital by cash and properties.

Capital structure includes equity and loan capital, structure, mobilization level of kinds of capital.

Organizational structure: depending on each period, organizational

structure is set up in line with missions and strategic planning. When missions and planning are changed, and then organizational structure needs to be evaluated and reconsidered to maintain current structure because it belongs to organizational management system.

The situation of production: factors to be considered and evaluated are

price and supplier level of materials, relations with suppliers, inventory system, turnover level, arrangement of means of production with planning and the ways to exploit such means, expenses and technological ability compared to the whole sector and competitors.

We can also summarize parts of micro and macro environments as below:

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Figure 2.2 – Parts of micro and macro environments

(Source: PHD. Chiachi Tsan, Study materials of Strategic management, Assoc. Prof. Dr. Le The Gioi – Dr. Nguyen Thanh Liem – Mr. Tran Huu Hai, Strategic

2.2.4. FORMULATING POSSIBLE STRATEGIES AND CHOOSING APPROPRIATE STRATEGY

2.2.4.1. MISSION:

To build possible strategies and choose them properly, at first, we have to identify missions based on information from environment. Mission is seen as general

Macro environment 1. Economic factors

2. Political and legal factors 3. Social factors

4. Natural factors

5. Technical and technological factors Microenvironment 1. Current competitors 2. Suppliers 3. Customers 4. Potential competitors 5. Alternative products Internal environment 1. Human resources 2. Working capital 3. Environment information 4. Organizational structure 11

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orientation, the way to take to get desired results through strategic measures, policies and action programs. When identifying missions, it should be noted of aspects that have close relations in strategic management, such as:

• Current situation and potency of one sector or one specific organization • Fields of action

• Service targets

• Main working means (human, research and application of advanced science – technology, mobilization and capital uses)…

• Attitude towards (internal and external) relations

• Desires and other concerns of organization during working process

2.2.4.2. OBJECTIVES:

After detecting missions, we have to set up objectives; they are results that enterprises want to achieve in short time or long time. The works of setting up targets are:

• Rechecking strategic targets to evaluate environmental factor from drafts to deployment in reality to see whether it is appropriate or not, if not then we have to make amendments

• Setting up annual targets: they are milestones we have to take to reach long-term targets

• Besides, we have to understand that policies are leading principles, methods of procedure, rules and administrative tasks… All help to establish guidance to carry out strategies.

In brief, requirements of this definition are specific, measurable, possible, flexible, unified and reasonable (because targets are taken by time).

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2.2.4.3. LIST OF PREMISES

- When we identify missions and establish targets, one important thing to do is to list premises; they are specific forecasts about external environment, basic policies to be applied, processing plans…

- Listed premises are factors and required conditions that can combine in action programs and forecasts play an important role in this period (for example, forecasts about target market, rates at which kinds and number of goods sold, how much technology and money needed to make this product, taxes and suppliers…)

The requirement of listing premises is the consistency thoroughly and therefore it should be informed clearly, so that everyone understands and deploys exactly.

2.2.4.4. ADAPTION STRATEGY:

When missions are determined, targets are set up and premises are listed, enterprises should focus on building and selecting adaption strategies to achieve targets. Strategy consists of long-term action programs so they must be broad and fundamental, from there an enterprise can deploy and process targets. Kinds of strategies can be selected such as:

- Concentrated growth strategy: this is the main strategy group focusing on renovation of current products to be sold in current or new markets.

There are 03 methods of concentrated growth:

• Market penetration strategy: is the measure to increase revenue and profit for an enterprise by selling goods being produced in current market through marketing efforts (price adaption, expansion of selling network, increase of advertisements, promotions, media)

• Market development strategy: is the measure to increase revenue and profit for an enterprise by selling goods being produced in new markets (maybe new geographical locations, new target customers or new uses of products…)

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• Product development strategy: is the measure to increase revenue and profit for an enterprise by developing new products to be sold in current market, new products can be improved from current products or simulated from other sources…

- Integrative growth strategy (links): This strategy group is appropriate to

enterprises operating in strong economic sectors and they still have chances to develop more if they connect or integrate to sectors that have appropriate targets and long-term strategies. Basic integration strategies are:

• Backward integration strategy: is a growth solution by participating in supplier sectors with input factors for enterprises (providing materials for enterprises) through the kinds of new investment or buying shares and all suppliers, joint-stock companies…

• Horizontal integration strategy: is a growth solution by cooperating with enterprises in the same sector, combining their strengths to develop together • Forward integration strategy: is a growth solution by joining current distribution

sector of an enterprise. This strategy is applied when distribution sector has strong growth rate and gains much profit or goods of an enterprise having difficulties in consumption (high value inventory, regularly stop producing…) with new kinds of investment, buy out (part or whole) other enterprises or joint-stock companies…

- Diversification growth strategy: is a growth solution by attending to related

sectors with being processed sector or other sectors. This strategy is appropriate to an enterprise that cannot achieve growth targets in current sector with products being sold (maturation or crisis periods) or to an enterprise, which has abundant capital and want to increase the ability to penetrate international markets and quickly grasp new technology. There are three plans for diversification growth: • Concentric diversification strategy: is a growth solution by developing new

products to be sold on new markets that such products are related to current production technology and to marketing activities of an enterprise. This strategy

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is effective only when its brand name being produced are well-known and when existing target customers have needs to buy other goods in life, thereby saving fixed costs for an enterprise with kinds of strategy as investment, buy out whole or part of other enterprises, joint-stock companies…

• Horizontal diversification growth strategy: is a growth solution by developing new products, which are not related to current production technology but support existing needs of target customers and such new products are sold in the same distribution channel; they meet current needs, this strategy is applied by buying out, newly investing, joint-stock and it is only effective when economic, cultural and social environments fluctuate in the positive ways, needs of people are satisfied by other different products and well-known companies.

• Mixed diversification growth strategy: is a growth solution by developing new products in new markets, which are not related to current production technology and markets. This strategy is deployed to limit risks in existing business such as seasonality in goods production and distribution, business environment which has several threats, an enterprise which has many weaknesses or has abundant capital…

- Retrenchment strategy: an enterprise actively decreases its growth rate compared to competitors in the sector in accordance to adaption level of each period (applied to each product separately), aiming at consolidating organizational structure of business sectors after one quick growth period or current sector does not have any chances to develop in the long time or business environment has more attractive chances… There are four retrenchment strategies such as fees reduction, payback, harvesting strategy and dissolution strategy.

- Externally-oriented strategy: this is the strategy supporting growth strategies selected by enterprises. There are some externally oriented strategies such as unification strategy, strategy to buy out other enterprises…

- Joint-ventures strategy: it is applied when one separate enterprise cannot manage their business well and they need unified power from two or more enterprises. In this strategy, the ownership of partners does not change with three

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kinds of joint ventures: international joint ventures, joint ventures to implement mutually beneficial strategies, joint ventures to combine strong sources of separate enterprises to reach common goals.

Besides, there are some other strategies such as modification strategy to increase economic efficiency, strategy to attract good labors…

2.2.4.5. STAGES OF STRATEGY FORMATION

The two missions, formulating strategies and deploying strategies, are expressed through three periods, which create a close cycle:

- Foundation stage and analysis of business strategy: is the process to analyze current situation, forecast the future, select and build strategies in line with enterprises conditions.

- Strategy deployment period: is the deployment process to bring strategic targets into corporation works; moreover, this is a complicated and hard period, so it requires high level of management arts.

- Strategic inspection and adaption period: is the process to evaluate and control results, find out measures to adapt strategy in accordance to enterprises environment.

For sectors which are in saturation period (maturity stage), the strategy implementation to increase strength is not reasonable, especially when market has small scale; so common measures in this situation are to transfer sources out of the sector by diversification or retrenchment strategies.

The strategic choices of an enterprise can be summarized as Figure 2.3

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Choice of strategies that strengthen and change business ways To penetrate market To develop market To develop products Horizontal integration Merger Return on investment Dissolution

Choice of strategies that retain an enterprise to stay with the sector

To penetrate market To develop market To develop products Vertical integration

Concentric diversification Buyout (external strategy)

Choice of strategies which restrict the participation of corporations in the sector

Concentric diversification Reduce fees Horizontal diversification Unrelated diversification Return on investment Dissolution

Choice of strategies that change an enterprise to other sector

Concentric diversification Horizontal diversification Unrelated diversification Joint-venture

Figure 2.3: Strategic choices for an enterprise

management, Statistical Publishing House, Mark saunders-Philip Lewis-Adrian

Thornhilll, author. MBA-Nguyen Van Dung, translator. Research methods for business. Printed in 2010. Finance Publishing House and Phan Thi Ngoc Thuan

High market growth rate

Low market growth rate Weak competitive iti Strong competitive iti 17

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(2005), Business strategy and internal corporation planning, Science and Technics Publishing House, Hanoi)

2.3. STRATEGIES – MEASURES FOR HUMAN RESOURCE DEVELOPMENT 2.3.1. HUMAN ROLE AND HUMAN FACTOR IN BUSINESS AND ENTERPRISE DEVELOPMENT

An enterprise’s workforce is all labor capacities that an enterprise needs and can mobilize to implement and accomplish its immediate as well as long-term missions. Workforce is also the power of labor force, in other words, power of employees. In market economy without personnel, workforce is the power to create kinds of labor capacity of contracted persons through working contract of an enterprise. Workforce is an independent input factor, which determines quality, fees and duration of intermediate products, part of products and output products.

Labor capacity is the competence to implement and fulfill works to accomplish labor aims. Labor capacity is also called as power. Power = strength + mental power + intellect. The process of human resource management is to organize, manage and arrange human resources to exploit labor capacity fully.

In market economy, needs of human resources and its effective usage are the important requirements towards all enterprises. It is because that using human resources effectively requires a long-term strategy towards an enterprise, it not only makes an enterprise system to work better but also becomes a method to save production cost and increase competitiveness of an enterprise. Using human resources exactly, sufficiently and reasonably will help to bring high effectiveness in business.

Quality of human resources is the level to meet the requirements of human resources in total and comprehensive facet (structure) of each kind in particular. Needs of human resources for enterprises’ operation are everything as well as structures of required labor capacity to implement and accomplish missions of an enterprise in the best way immediately or in a specific future.

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Quality of human resources is expressed by the composed strength of labor capacities. However, in an enterprise, labor quality is evaluated through the relationship between labor cost (time) and labor effectiveness.

In reality, it always shows that quality of employees (the composed power of all labor capacities) is directly proportional to an enterprise’ business, deciding high or low levels of quality, input cost, quality of intermediate products and their competitiveness… Thus, high or low quality of an employee mainly depends on management level of human resources in an enterprise.

Needs of human resources for different situations are also different. Actual human resources are often not the same as the needs. When the difference is considerable, an enterprise’ business often gets low efficiency. It is needed to find and point out the difference level with reasons to have detailed foundation serving the design, implementation of measures and methods to increase quality of human resources, partly contributing to improving business efficiency.

Improving quality of human resources is necessary and is a regular mission within an organization or a nation as well:

Modern economics theories represent that human resource is the most important resource of a nation, especially in an organization. Human resource is the most important property in an organization as well. It can be seen in some following fields: expenses for human resource in an organization are unpredictable, profit caused by this resource is not identified specifically but it can reach a great value. Human resource is not only an objective but also motivation for the operation of an organization. Human resource is the basic factor formulating an organization, the condition for an enterprise to exist and develop. Therefore, an organization, which is evaluated strong or weak, developed or lagged mainly, depends on quality of its human resource.

In a context of current developed social conditions, needs of people are getting higher with criteria that price will continuously decrease and product quality will continue to increase. Therefore, if an enterprise wants to exist, it must focus on renovation of production technology and increase grey matter in one

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product to improve labor productivity and decrease cost price and assure quality as well. To do this, it requires active employees who always follow customer needs with passion and satisfy their demands immediately.

On the other hand, science technology has changed quickly; technology life cycle and products are likely to be shortened. Thus, an enterprise must make sure that its employees will respond to this change in time.

For above reasons, it can be affirmed that enhancing quality of human resource is very important and necessary to any organizations. A team of qualified employees is always a solid competitive advantage for an enterprise. In other aspect, investment in people is seen as an effective investment, determining the quick and stable growth rate of an enterprise.

(Source: PHD. Chiachi Tsan, Study materials of Strategic management, Jack Stack & Bo Burlingham .2010. Bet on employees, money comes to your hand – Phuong Lan – translator, Publishing House of the National Economics University, Le Anh Cuong, Nguyen Thi Le Huyen, Nguyen Thi Mai (2005), Measures and skills in

human resource management, Labor and Social Publishing House, Hanoi, Do Van

Phuc (2004), Human resource management of corporations, Science and Technics Publishing House, Hanoi and Nguyen Huu Than (2008), Human resource

management, Reprint the ninth time, Labor and Social Publishing House)

2.3.2. DEFINITION ABOUT HUMAN RESOURCES

- Definition about human resources

• Human resources are mixture of strength, mental power and intellect. Strength is muscle power of people; it depends on age, gender, lifestyle, nutrition…

• Mental power is the factor reflecting awareness ability, mentality and characteristics belonging to brain power that help people to acquire knowledge, work easily and effectively in different situations, that is intellectual power. • Intellect is sense of responsibility, dedication towards work assigned. - Definition about human resources in an enterprise

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Human resource of one enterprise consists of all persons attending to the process of company production and business or in other words, human resource is all labor capacities that an enterprise needs and can mobilize to implement missions immediately and in the long time.

(Source: PHD. Chiachi Tsan, Study materials of Strategic management, Jack Stack & Bo Burlingham, 2010. Bet on employees, money comes to your hand – Phuong Lan – translator, Publishing House of the National Economics University, Le Anh Cuong, Nguyen Thi Le Huyen, Nguyen Thi Mai (2005), Measures and skills in

Phuc (2004), Human resource management of corporations, Science and Technics Publishing House, Hanoi and Nguyen Huu Than (2008), Human resource

2.3.3. THE PROCESS OF HUMAN RESOURCE PLANNING

Human resource planning includes four following main steps: • Step 1: To propose and forecast needs

• Step 2: To propose policy and plan • Step 3: To implement plan and programs • Step 4: To check and evaluate programs

(Source: Nguyen Huu Than (2008), Human resource management, Reprint the ninth time, Labor and Social Publishing House)

From four main steps above, the author deeply researched to understand theories for the process of human resource planning as follows:

Step 1-Forecast of needs: Starting from work requirements to prediction about needs of human resource, it is needed to identify the quantity, quality, what an enterprise had, what to add, and supplement source… In this step, we should consider factors such as general academic qualification of society, common viewpoint (about labor) in society, which regulations affect to employees, supply and demand matters about human resource…

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Step 2- From above forecasts, we propose recruitment policy, salary, bonuses, regulations, working mechanism together with enterprise’s aims, qualifications of technology. This is the group of internal factors playing the main role in attracting outside human resource.

Step 3- Plan implementation: recruitment, arrangement, assignment, recommendation…

Step 4- Check and evaluation: this is the must-do work to have adaption about human resource plan and make sure that it is suitable to current situation and actual needs.

2.3.4. IDENTIFYING ORGANIZATION STRUCTURE

- In administration, there is no best and perfect organization structure so far. The best organization must be active. It means that organization structure is modified on the ground of business situation of an enterprise. (Source: Prof. Nguyen Huu Than (2008), Human resource management, Reprint the ninth time, Labor and Social Publishing House)

- Enterprises design different organization structures in accordance to the importance and complexity of business. Organization structure, based on work level, can be classified as follows: 1. Leader, 2. Senior managers, 3. Junior managers, 4. Employees…

2.3.5. IDENTIFYING NEEDED HUMAN RESOURCE FOR AN ENTERPRISE

- Needs of human resource in an enterprise are all necessary labor capacities to implement and accomplish immediate plans (business plan) and future missions (strategic business).

- For an enterprise, identifying needs of human resource starts from business strategy, which will build detailed business plan, then on the ground of labor quota (decided by machines, technology and labor qualifications), on replacement needs for retired persons, persons on missions or study…, we will calculate human resource needs. From needs and required labor structure, an enterprise will identify the number of additional recruitment and persons who need to be retrained.

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- Human resource needs must be expressed by quantity and proportion of kinds of labor capacities (human resource structure). Compared to needed human resource for implementing and accomplishing immediate and long-term missions of an enterprise, the level of meeting requirement of current human resource is called as quality of human resources.

The process to identify needs of human resource of an enterprise is shown as Figure 2.4

Figure 2.4 – The process to identify human resource needs of an enterprise

Phuc (2004), Human resource management of corporations, Science and Technics

Business strategy of an enterprise

Detailed business plan

Labor quota

Level of machines, devices equipped to labor

Human resource needs (Needed human resource structure)

Replacement needs for retired persons, movers or persons sent to be trained

Additional recruitment needs Current persons suitable to new positions, including transfer and quick retraining

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Publishing House, Hanoi and Nguyen Huu Than (2008), Human resource

2.3.6. THE ROLE OF HUMAN RESOURCE TRAINING AND EFFECTS OF TRAINING ACTIVITY TOWARDS BUSINESS PERFORMANCE OF AN ENTERPRISE

- To train human resources in an enterprise means to create chances for employees of such enterprise to study. Certainly with continuous study, it will help to change stable behaviors in line with results of bringing knowledge, qualifications and better personal qualifications to employees to meet demands in reality. In other words, when being trained, employees will quickly acquire knowledge; professional qualification and experience then apply them to business activities of an enterprise. It makes high efficiency and compensates training fees but still assures high profit as before and creates next generation serving the general development of an enterprise when we train human resources to be suitable to defined training targets.

- To make the process of training human resources to meet the requirements of an objective, an enterprise concurrently focuses overall contents including training plan, contents, methods and other resources supporting training process. In any organization structures, human resource training must satisfy the demands to contribute to the business activities of an enterprise effectively. To achieve this target, an enterprise requires building training program in line with its human resource. (Source: PHD. Chiachi Tsan, Study materials of Strategic management, Jack Stack & Bo Burlingham .2010. Bet on employees, money comes to your hand – Phuong Lan – translator, Publishing House of the National Economics University, Le Anh Cuong, Nguyen Thi Le Huyen, Nguyen Thi Mai (2005),

Measures and skills in human resource management, Labor and Social Publishing

House, Hanoi, Do Van Phuc (2004), Human resource management of corporations, Science and Techniques Publishing House, Hanoi and Nguyen Huu Than (2008),

Human resource management, Reprint the ninth time, Labor and Social Publishing

House)

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2.3.7. BUILDING STRATEGY OF HUMAN RESOURCE DEVELOPMENT OF AN ENTERPRISE

- To develop human resources is to implement functions and management tools well to have a team of staff and employees of an enterprise suitable to quantity and high quality, their works will continuously improve business activities of an organization and become the foundation as well as basic motivation for sustainable development of such organization.

- To develop human resources is to create sustainable development for performance of each member and general efficiency of an enterprise as well, which is closely attached to the increase in quality, quantity and quality of life of human resource. It helps to bring high efficiency to an enterprise such as profit increase, quick capital turnover, market dominance…

- Development principles

Each person has their own value and ability to raise their opinions in technical development. However, in order to make everyone to exploit their creativity fully, then we need the harmonious combination between enterprise targets and employees profit. Therefore, principles of human resource development in an enterprise can include:

• Economic – social development is for humans and by humans, so every policy and plan of an enterprise must treat humans as highest target. In addition, human resource development is central matter. It means that human resource must be admitted as capital and the most important property of each kinds and each scales of enterprises. It is needed to expand and create chances for everyone, so we need fair regulations to encourage creativity of employees. • Human development is the development to become the subject of all

developments, so firstly we have to invest to develop humans, and then create favorable conditions for them to work.

• Developing human resource must follow sustainable principles; this is the target of development, meaning we cannot follow current needs and interests and

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create the shortage or loss of resources as well as development chances of next generations. This must be a regular and long-term development about physics, spirit, intellect and human personality that aim at developing the most basic power under potency to enrich and improve quality life of each person much more.

- Objectives and contents of human resource development in an enterprise

Fully utilizing human resource is the aim of human resource development. Human resource development is the initial step to implement functions, missions voluntarily and acquire more understandings about works, creating close willingness to cooperate between individuals, and sectors in an enterprise. The development includes below missions:

• To develop a career plan and development plan suitable to each period and potency of enterprise, which are arranged by priority

• To research on human resource, analyses and evaluate needs of human resource, structure, qualifications for each job and sector

• To formulate and deploy human resource development plan for an enterprise • To inform internally between management sectors and employees

Contents of human resource development in an enterprise include:

- Training, re-training and cultivation

Training is the study process with the aims to make employees to work more effectively. This is the process to equip them with certain knowledge about professional qualifications. Training is divided as:

• New training: is for persons who do not have vocational degrees or new employees

• Retraining: is for persons who do not have proper vocational job anymore • Advanced training: helps employees to take complicated works

- Promotion and advancement

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Objectives of promotion:

• To award ability, ethnics of employees and increase their responsibility towards works as well

• To retain employees who have good qualifications, talents and encourage them to serve to the best

• To strengthen loyalty of employees towards enterprises

• To appreciate labor qualifications and reduce the fluctuation of labors

• To foster and develop employee source to assign employees to higher positions The basic of promotion: At present, the promotion depends on achievement and potency more than working years. Achievements and potency are factors, which are principal to determine the promotion. Achievements related to personal labor efficiency are at current employee position. Potency includes active potency (the capacity related to the performance when that person is assigned at current position accompanied with responsibility and rights), passive potency (qualifications, political attitude, personal prestige, relationships).

- Transfer

• Transfer is often applied to officers who hold one position and they are assigned to new place with the same position, aiming at exploiting their creativity fully. Sometimes, the transfer is processed when a person who is working in an organization for a long time has signs of job stagnation or faction.

• For enterprises, the development of human resources is to prepare and balance lacked positions or vacancy. This work requires implementing regularly with the purposes to make an enterprise work effectively and employees have preparation to undertake new responsibilities due to the changes of laws, target, structure, techniques, and technology. More importantly, human resources development also helps to create new capacity for employees.

(Source: PHD. Chiachi Tsan, Study materials of Strategic management, Jack Stack & Bo Burlingham .2010. Bet on employees, money comes to your hand – Phuong

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Lan – translator, Publishing House of the National Economics University, Le Anh Cuong, Nguyen Thi Le Huyen, Nguyen Thi Mai (2005), Measures and skills in

Phuc (2004), Human resource management of corporations, Science and Techniques Publishing House, Hanoi and Nguyen Huu Than (2008), Human

resource management, Reprint the ninth time, Labor and Social Publishing House)

- Employee evaluation

• Evaluating work completion is defined by an official system to check and evaluate the process completion of an individual periodically.

• Evaluating work completion is an important and necessary thing because it is the foundation to reward, encourage or discipline one employee in an enterprise. Simultaneously, the evaluation of work completion helps management officers to pay salary fairly.

• The process to evaluate work completion:

(1) Identifying work plan during the evaluation period (2) Considering work done in the evaluation period (3) Evaluating work completion in the period (4) Discussing evaluation results to employees

(Source: Prof. Nguyen Huu Than (2008), Human resource management, Reprint the ninth time, Labor and Social Publishing House)

• Salary policy

In order to boost employees to work more effectively, an enterprise must build salary policy closely attached to business activities.

• Reward policy

In order to boost employees to work more effectively, an enterprise must build reward policy, which is closely attached to the evaluation process of human resources periodically.

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Phuc (2004), Human resource management of corporations, Science and Techniques Publishing House, Hanoi and Nguyen Huu Than (2008), Human

resource management, Reprint the ninth time, Labor and Social Publishing House)

In brief, developing human resource in each enterprise is an inevitable and objective trend in the process of economic development. Therefore, if an enterprise wants to expand its business, then it must develop its own human resources.

2.4 INTRODUCTION TO CHON THANH POWER COMPANY

- Chon Thanh District is the southern district of Binh Phuoc Province, 70 km from Ho Chi Minh City to the north and 35 km away from Binh Phuoc Power Company.

- The district includes eight wards and one town managing three industrial zones at the locality.

1. Chon Thanh Industrial Zone;

2. Minh Hung – Han Quoc Industrial Zone; 3. Minh Hung 3 Industrial Zone

- Chon Thanh Power is the unit directly under Binh Phuoc Power, working by the decentralization and authorization of Southern Power Corporation (SPC) and Binh Phuoc Power Company (PCBP);

- Number of employees at Chon Thanh Power Company: 51 - Number of customers: 16,564 people who use electricity

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Strengths of current structure at the power company

1. It is easy to identify and create favorable conditions for partners and workers to contact.s

2. Sectors are independent about qualifications, so they can exploit their creativity.

3. Director easily evaluates work efficiency of each employee.

4. Director easily evaluates business efficiency at the power company.

Weaknesses of current structure at the power company

1. Departments do not have connections, so management efficiency and productivity evaluation do not follow reality closely.

2. Due to independence about qualifications, there is no two-way information about it.

3. Director does not have close relations with employees at departments, thus, he/she only catches information through Vice Directors or Heads of Department.

- Chon Thanh Power is the unit working in electricity business in the Binh Phuoc Province.

- Chon Thanh is the province, which has complicated topographic land and highest birth rate. Residences are not allocated evenly.

- Lack of centralization; each part is an ethnic minority with low intellectual level. - Electrical grid must go through industrial crops that have high economic value (rubber), therefore, it is difficult to clear to build new projects as well as protect the safety of the grid.

- The decrease of using electricity that serves electric distribution is one of important targets to increase business efficiency of power sector in general and Chon Thanh power in particular.

- To carry out this target, we have to deploy proposed plans in the best way. 30

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- On the other hand, we have to exploit annual capital focusing on the process of renovation, upgrade and maintenance of electric grid regularly.

- It is needful to regularly organize sessions to educate and train skills, professional qualifications for the team to check, supervise electricity and detect on time violated electric uses that are more sophisticated.

- It partly contributes to minimizing the loss percentage of electricity.

- Besides, the process to implement reward and recognition policies must be in time to enhance work spirit of employees.

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CHAPTER 3 RESEARCH METHODS

3.1. THE SELECTION OF QUALITATIVE RESEARCH METHOD

The author does not select quantitative research method due to small size of research sample. Simultaneously, qualitative method can help to interview deeply during conferences to evaluate research matter and human behaviors more exactly.

3.1.1. SUMMARIZING AND ANALYZING SECONDARY DATA

The thesis is carried out in accordance with the use of traditional research methods, analysis and summary of secondary data by the way of system access. Secondary data includes statistical documents, published reports of Chon Thanh Power Company and documents of human resource management at Administration – Human Resource Department, Finance – Accountant Department and research materials as well as references; specialized magazines. These help to discover orientation, policies of the government and to figure out deep learning regarding to human resource strategy. Moreover, looking for more information about other organizations will help us to understand their strengths, weaknesses as well as orientations, thereby bringing out more appropriate measures towards Chon Thanh Electric Power Company.

3.1.2. PROCESS GROUP DISCUSSION

Group discussion method is also used to collect secondary data and inspects research results, identification and evaluation of the author.

This kind of discussion includes centralized and unofficial discussions.

3.2 INFORMATION COLLECTION 3.2.1. SECONDARY DATA

The author researched specialized magazines and newspapers through library, internet, reports, meeting decisions, internal regulations, internal process… then classified them. After that, the author also identified related concerns that are needed to read. When examining documents, the author marked all necessary information for the research later. Some information was quoted directly; some was

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summarized or simplified to get main ideas to bring them to the thesis.

3.2.2. PRIMARY DATA

3.2.2.1. REALITY OBSERVATION

The author is working at Chon Thanh Power Company, so it is the chance to work and observe business activities, besides research actual works and human resource management at Chon Thanh Power Company. From there, it can bring out evaluations, comments or ideas.

3.2.2.2. DISCUSSION IMPLEMENTATION

- Sending conference invitation letter together with contents and considered questions to the chosen sample targets

- In order to arrange group discussion, the author represents matters in documents about actual human resource management at Chon Thanh Power Company. Thus, everyone can discuss and evaluate strengths and weaknesses. Then, the author can propose recommendations about human resource management in the next years and everyone continues to discuss and raise their ideas.

- Conference targets are Director, Head, Vice Head and employees at Chon Thanh Power Company to receive information from many different sources on the ground of their positions, qualifications and experience.

- Contents of conference are built with the aims to collect information related to research subject. The main content is current human resource management at Chon Thanh Power Company such as business plan, human resource plan, recruitment, training, employee evaluation, salary mode, reward mode.

3.3. RESULT ANALYSIS

- Results of conference are summarized in two tables. The first one includes all information noted from the conference, detailed opinions together with final general evaluation of each target. The second one is the summary of general evaluation on the ground of three levels such as good, fair, average and also other evaluations as well; in this table, the author will calculate the percentage for each level of each target group.

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- From summary table, we will analyze the results respectively. At first, general evaluation of each level reveals the trend of evaluation of one or many targets. To research deeply, the author will quote detailed opinion of phrase man in each discussion to clarify matters. At last, the author will recheck analyzed results by discussing information about them with subjects who attended the conference and opinions from experts of human resource management field as well.

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CHAPTER 4 ANALYSIS OF RESULTS

4.1 SITUATION IN HUMAN RESOURCE TRAINING AND DEVELOPMENT IN CHON THANH POWER COMPANY

4.1.1 Human resource training in the company

a. About defining training objectives of the company

Over the past few years, the company has identified training objectives. However, it has not replied on development plans, and only focused on offsetting the shortage of employees in the current conditions. It implements in the short-term plans instead of long-term training to serve the human resource development.

Moreover, it has not built standards of job titles to identify training targets for those who are already planned. Furthermore, it has not made analytical steps to determine the knowledge/skills to be trained for those who meet the organization's goals.

b. About the training content

The training content in the company has generally been plentiful and consistent with the characteristics of learners. For example, managers will be focused on the content related to management activities (project management, finance, bidding, materials etc.); staffs and technical workers will be trained related to technical safety, labor protection, line management and TBA, galvanometer, electrical experiments, electrical equipment repairing etc. The contents seem realistic in general to improve additional knowledge for employees to complete their mission, and the number of people who receive training is increasing over the years.

According to the survey, 90% of votes show that the content is suitable for the purpose of the course; 67.3% of votes indicate that it matches for the qualifications of practitioners and 32.7% agrees that it does not. Through research, this limitation is caused by the curriculum that is not compiled well for each level of workers as well as no assignment from low to high level, leading to difficulty for them. In the near future, the Company should adjust training contents compatible with the capabilities of each level. On the other hand, the lecturers have not joined any courses of education, so it can affect the quality of imparting knowledge to the learners.

c. The methods of training

- On the job training: Over the past few years, the Company has assigned senior specialists to the tasks of guiding work to new staffs. Particularly, for workers, the