HR Management
Content
HR MANAGEMENT
ASSIGNMENT TASK: Reading the Paper “Say on Pay at the Walt Disney
Company” as a reference, and then applying suitable HRM theories and
your experience to:
1. Identify a problem in the compensation system of your current company or a
company you know well.
2. Analyze the reasons of the problem and its negative consequences.
3. Propose some solutions to solve the problem.
Professor: Dr. PHAM HUNG
Class: MBAOUM 0514 K14C
Student: Hoang Chi Sy
Hồ Chí Minh City, March 2015
Brief about Company
Page 1
HR MANAGEMENT
The first of all, I would like to introduce briefly about the company that I
knew, it is Thermtrol VSIP, a US company located in Vietnam Singapore Industrial
Part. Thermtrol proves wire, cable harnesses, thermal protector, and subassemblies. So, its factories need low labor cost more than high technologies
machines and equipments. Keeping stable labor work force is always importance
task with them. They always have over 5000 direct labors and over 200 indiecr
staffs.
Identify a Problem from Salary Hierachy Policy
As most of the other companies, they wanted to have a good working
environment through compensation system and policies to satisfy employees, but
in 2012, they faced a problem regarding to the compensation policies that we built.
Specially, it was salary hierarchy for factory labors.
To attract a large number of employees for company at the first years (2007
& 2008), thier policy alowed Board Managemnet to pay for new comers higher
than other companies in their region, while annual increasing salary rate for old
employees were lower than them. They succeeded in the first years with that
policy, they quickly had the desired number of employees and annual employee
turnover rate just about 10%, which the other companies in the around could not
been done.
Their salary hierarchy in 2007 as hereunder
1. perators
Page 2
HR MANAGEMENT
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency
Total
1
2,550,00
0
80,000
50,000
120,000 2,800,000
2
2,610,00
0
80,000
50,000
120,000 2,860,000
3
2,660,00
0
80,000
50,000
120,000 2,910,000
4
2,700,00
0
80,000
50,000
120,000 2,950,000
5
2,730,00
0
80,000
50,000
120,000 2,980,000
1. Tech./ Leader/
QC
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency
Total
1
2,670,00
0
80,000
50,000
130,000 2,930,000
2
2,730,00
0
80,000
50,000
130,000 2,990,000
3
2,780,00
0
80,000
50,000
130,000 3,040,000
4
2,820,00
0
80,000
50,000
130,000 3,080,000
5
2,850,00
0
80,000
50,000
130,000 3,110,000
Page 3
HR MANAGEMENT
However, the employee turnover rate was increased continuously in the
years after that, the peak is in 2012 with the employee turnover rate is 200%.
That is a big problem for them. The high rate of employee turnover is factor
of many issues such as
1.
2.
3.
4.
5.
6.
7.
8.
9.
Customer claimed over million per year.
External PPM: 2000.
Processes PPM: 7000.
QC members increased 5 times.
Productivity decreased 3 times.
Raw material losed 3 times compared with BOM.
Shipping cost was increased 3 times compared with budget..
Only met 50% on time shipment compared with customer requirement.
And of cause, company was lossed.
Analyze the root causes of the problem and its negative consequences.
To find out the root causes, they established a checklist for questionnaire and
interviwed carefully each quitted employee, they used stactistical techniques,…
They analyzed and discovered that 80% quitted employees didn’t satisfy the salary
hierarchy even if their income is still higher than around comapies. The comparing
with new comers thay thought that company was unfare to them becuase:
1.
2.
3.
4.
5.
Their output is higher than new comers.
Their quality performance is better than new comers.
They can do multi-jobs.
They can train for new comers...
But their income is not difference compared with new comers, not fair to
them.
Page 4
HR MANAGEMENT
With the above analyzations, I thought that the root causes should be: BOM of the
Thermtrol didn’t review to modify and update their policies at the appropriate
stages because there are nothing right forever. In the other hand, didn’t measure
and have any proper action until they got a big problem for the issue.
I would like to propose some solutions to above problem.
1. In general for documentation system and particular for the salary
policies, company should have appropriate methods to measure ending
results of implementation and have proper actions base on the results.
2. For above case, they should modify the hieracgy with the gap between 2
years should be over 200.000VND.
Proposed Hierchacky
1. Operators
Page 5
HR MANAGEMENT
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency Total
1
3,539,00
0
180,000
120,000
300,000
4,139,000
2
3,764,00
0
180,000
120,000
300,000
4,364,000
3
3,989,00
0
180,000
120,000
300,000
4,589,000
4
4,214,00
0
180,000
120,000
300,000
4,814,000
5
4,439,00
0
180,000
120,000
300,000
5,039,000
1. Tech./ Leader/ QC
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency Total
1
4,766,000
180,000
120,000
330,000
5,396,000
2
5,066,000
180,000
120,000
330,000
5,696,000
3
5,366,000
180,000
120,000
330,000
5,996,000
4
5,666,000
180,000
120,000
330,000
6,296,000
5
5,966,000
180,000
120,000
330,000
6,596,000
3. Beside that, to keep experienced workers, company also should establish
other supported policies, the most importance thing is to promote the best
employees, particularly as the below policies:
a. Quarterly bonus: The quarterly bonus should be based on the
criteria.
Page 6
HR MANAGEMENT
i. Encourage employees catch the productivity and quality
performance and the quarterly budget can equal 25% of
basic salary.
ii. The bonus should not equal for each employee but should
base on their performance.
iii. It does not mean that every employee can received the
bonus. The staff should be divided into 4 groups, O (0-2%),
A (12%-15%), B (70%-75%) and the remaining is C range.
iv. All employees will not have the bonus if company is not
b. Beside the quarterly bonus, company should have other policis
such as:
i. Gifts for fot the female employees in the International
Women Day.
ii. Present for children on International Children
iii. It should be celebrate for the Company day.
Page 7
ASSIGNMENT TASK: Reading the Paper “Say on Pay at the Walt Disney
Company” as a reference, and then applying suitable HRM theories and
your experience to:
1. Identify a problem in the compensation system of your current company or a
company you know well.
2. Analyze the reasons of the problem and its negative consequences.
3. Propose some solutions to solve the problem.
Professor: Dr. PHAM HUNG
Class: MBAOUM 0514 K14C
Student: Hoang Chi Sy
Hồ Chí Minh City, March 2015
Brief about Company
Page 1
HR MANAGEMENT
The first of all, I would like to introduce briefly about the company that I
knew, it is Thermtrol VSIP, a US company located in Vietnam Singapore Industrial
Part. Thermtrol proves wire, cable harnesses, thermal protector, and subassemblies. So, its factories need low labor cost more than high technologies
machines and equipments. Keeping stable labor work force is always importance
task with them. They always have over 5000 direct labors and over 200 indiecr
staffs.
Identify a Problem from Salary Hierachy Policy
As most of the other companies, they wanted to have a good working
environment through compensation system and policies to satisfy employees, but
in 2012, they faced a problem regarding to the compensation policies that we built.
Specially, it was salary hierarchy for factory labors.
To attract a large number of employees for company at the first years (2007
& 2008), thier policy alowed Board Managemnet to pay for new comers higher
than other companies in their region, while annual increasing salary rate for old
employees were lower than them. They succeeded in the first years with that
policy, they quickly had the desired number of employees and annual employee
turnover rate just about 10%, which the other companies in the around could not
been done.
Their salary hierarchy in 2007 as hereunder
1. perators
Page 2
HR MANAGEMENT
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency
Total
1
2,550,00
0
80,000
50,000
120,000 2,800,000
2
2,610,00
0
80,000
50,000
120,000 2,860,000
3
2,660,00
0
80,000
50,000
120,000 2,910,000
4
2,700,00
0
80,000
50,000
120,000 2,950,000
5
2,730,00
0
80,000
50,000
120,000 2,980,000
1. Tech./ Leader/
QC
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency
Total
1
2,670,00
0
80,000
50,000
130,000 2,930,000
2
2,730,00
0
80,000
50,000
130,000 2,990,000
3
2,780,00
0
80,000
50,000
130,000 3,040,000
4
2,820,00
0
80,000
50,000
130,000 3,080,000
5
2,850,00
0
80,000
50,000
130,000 3,110,000
Page 3
HR MANAGEMENT
However, the employee turnover rate was increased continuously in the
years after that, the peak is in 2012 with the employee turnover rate is 200%.
That is a big problem for them. The high rate of employee turnover is factor
of many issues such as
1.
2.
3.
4.
5.
6.
7.
8.
9.
Customer claimed over million per year.
External PPM: 2000.
Processes PPM: 7000.
QC members increased 5 times.
Productivity decreased 3 times.
Raw material losed 3 times compared with BOM.
Shipping cost was increased 3 times compared with budget..
Only met 50% on time shipment compared with customer requirement.
And of cause, company was lossed.
Analyze the root causes of the problem and its negative consequences.
To find out the root causes, they established a checklist for questionnaire and
interviwed carefully each quitted employee, they used stactistical techniques,…
They analyzed and discovered that 80% quitted employees didn’t satisfy the salary
hierarchy even if their income is still higher than around comapies. The comparing
with new comers thay thought that company was unfare to them becuase:
1.
2.
3.
4.
5.
Their output is higher than new comers.
Their quality performance is better than new comers.
They can do multi-jobs.
They can train for new comers...
But their income is not difference compared with new comers, not fair to
them.
Page 4
HR MANAGEMENT
With the above analyzations, I thought that the root causes should be: BOM of the
Thermtrol didn’t review to modify and update their policies at the appropriate
stages because there are nothing right forever. In the other hand, didn’t measure
and have any proper action until they got a big problem for the issue.
I would like to propose some solutions to above problem.
1. In general for documentation system and particular for the salary
policies, company should have appropriate methods to measure ending
results of implementation and have proper actions base on the results.
2. For above case, they should modify the hieracgy with the gap between 2
years should be over 200.000VND.
Proposed Hierchacky
1. Operators
Page 5
HR MANAGEMENT
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency Total
1
3,539,00
0
180,000
120,000
300,000
4,139,000
2
3,764,00
0
180,000
120,000
300,000
4,364,000
3
3,989,00
0
180,000
120,000
300,000
4,589,000
4
4,214,00
0
180,000
120,000
300,000
4,814,000
5
4,439,00
0
180,000
120,000
300,000
5,039,000
1. Tech./ Leader/ QC
Service
Year
Basic
Salary
Housing
supporting
Transportation
support
Frequency Total
1
4,766,000
180,000
120,000
330,000
5,396,000
2
5,066,000
180,000
120,000
330,000
5,696,000
3
5,366,000
180,000
120,000
330,000
5,996,000
4
5,666,000
180,000
120,000
330,000
6,296,000
5
5,966,000
180,000
120,000
330,000
6,596,000
3. Beside that, to keep experienced workers, company also should establish
other supported policies, the most importance thing is to promote the best
employees, particularly as the below policies:
a. Quarterly bonus: The quarterly bonus should be based on the
criteria.
Page 6
HR MANAGEMENT
i. Encourage employees catch the productivity and quality
performance and the quarterly budget can equal 25% of
basic salary.
ii. The bonus should not equal for each employee but should
base on their performance.
iii. It does not mean that every employee can received the
bonus. The staff should be divided into 4 groups, O (0-2%),
A (12%-15%), B (70%-75%) and the remaining is C range.
iv. All employees will not have the bonus if company is not
b. Beside the quarterly bonus, company should have other policis
such as:
i. Gifts for fot the female employees in the International
Women Day.
ii. Present for children on International Children
iii. It should be celebrate for the Company day.
Page 7
