Luận Văn Low Engagement Of Production Team In Kimberly Clark Vietnam.doc

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
PHAN THUY LOAN
LOW ENGAGEMENT OF
PRODUCTION TEAM IN
KIMBERLY CLARK VIETNAM
MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: DR. TRAN PHUONG THAO

Table of Contents
List of acronyms ..........................................................................................................................................2
List of Figures..............................................................................................................................................3
List of Tables ...............................................................................................................................................3
CHAPTER 1: PROBLEM IDENTIFICATION.......................................................................................5
1.1 Industrial overview and Company overview.............................................................................5
Industrial overview .................................................................................................................................5
Company overview..................................................................................................................................6
1.2 Problem mess ...............................................................................................................................7
1.2.1 Symptoms .................................................................................................................................7
1.2.2 Situation analysis ................................................................................................................... 10
1.2.3 Initial Cause-effect map ........................................................................................................ 14
1.3 Problem identification............................................................................................................... 18
1.3.1 Heavy workload ...................................................................................................................... 18
1.3.2 Ineffective recruitment process .............................................................................................. 19
1.3.3 Low employee engagement..................................................................................................... 20
1.3.4 Consequence........................................................................................................................... 21
CHAPTER 2: SUGGESTED SOLUTION.............................................................................................. 26
2.1 Cause validation .............................................................................................................................. 26
Reward & Recognition........................................................................................................................... 27
Development Opportunities.................................................................................................................... 28
Team Leader Relations .......................................................................................................................... 29
Pay........................................................................................................................................................... 29
2.2 Alternative solution............................................................................................................................. 32
2.2.1 Apply evaluation process for the payment structure ......................................................... 33
2.2.2 Apply Market-based compensation system for the payment structure................................... 39
2.3 Action plan in an organization........................................................................................................... 44
CHAPTER 3: SUPPORTING INFORMATION ................................................................................... 48
3.1 Methodology ........................................................................................................................................ 48
3.2 Interview transcript ............................................................................................................................ 48
References.................................................................................................................................................. 60
1

List of acronyms
KC: Kimberly Clark
KCV: Kimberly Clark Viet Nam
FMCG: Fast moving consumer goods
EHS: Environment, Health and Safety
IT: Information Technology
HR: Human Resource
OT: Ovetime
Fav: Favorite
Unfav: Unfavorite
KPIs: Key performance indicators
BD: Binh Duong
OP: production operator
Lead OP: Lead production operator
IDP: Individual development plan
ISO: International Organization for Standardization
JD: Job description
ETQ: Excellence through quality
JEC: Job Evaluation Committee
PR: Purchase requisition
PO: Purchase Order
JERF: Job Evaluation Review Form
C&B: Compensation and benefit
SAP: Systems, Applications and Products in Data Processing
2

List of Figures
Figure 1: FMCG growth nationwide in quarter 1/2018 (Source: Market Pulse Report Q1/2018-
Nielsen)..................................................................................................................................... 5
Figure 2: Structure of Kimberly Clark Viet Nam............................................................................ 7
Figure 3: Number of leaving staff in person (Source: Human Resource Department) .................. 8
Figure 4: Number of leaving staff in percentage (Source: Human Resource Department)............ 9
Figure 5: Average Voluntary Attrition Rate 2016-2017 ............................................................... 10
Figure 6: Initial cause and effect map........................................................................................... 18
Figure 7: Number of leaving staff by experience (Source: Human Resource Department) ......... 20
Figure 8: Overtime reasons Jan-Jun 2018 (Source: Human resource department)..................... 22
Figure 9: Performance of machines (first 6 months in 2018)....................................................... 24
Figure 10: Waste of machines (first 6 months in 2018) ................................................................ 24
Figure 11: Updated cause and effect map..................................................................................... 25
Figure 12: The result of an employee engagement survey in 2017............................................... 26
Figure 13: Fish bone map ............................................................................................................. 31
Figure 14: Final map .................................................................................................................... 32
Figure 15: Market-based compensation process .......................................................................... 43
Figure 16: Summary of manager's perspective............................................................................. 58
Figure 17: Summary of the leader's perspective........................................................................... 58
Figure 18: Summary of employees’ perspective............................................................................ 58
List of Tables
Table 1: Voluntary/ Involuntary turnover ratio in 2016-2018 (first 6 months) ............................ 10
Table 2: Turnover ratio by department 2017-2018 (first 6 months)............................................. 11
Table 3: Turnover ratio by position 2016-2018 (first 6 months) .................................................. 12
Table 4: Working experience at KC of leaving staff in 2016-2018 (first 6 months) ..................... 13
Table 5: Performance at KC of leaving staff 2017-2018 (first 6 months)..................................... 14
Table 6: Average Overtime per person Jan-Jun 2018 in percentage............................................ 22
Table 7: Hiring cost in 2018 (Source: Human resource department) .......................................... 23
Table 8: List of promotion of production (Source: Human Resource Department) ..................... 28
Table 9: summary of two solutions................................................................................................ 44
3

EXECUTIVE SUMMARY
Human is an important asset in the organization in general and production operators are the
heart of manufacturing. Production operators are direct labor who participate in the process
to make product and account for more than 50 percentage headcount of the mill. In 2018,
the turn-over rate is increasing sharply and 85% falls into production team. The high
turnover rate in this group has a negative effect such as low skill workers, high demand for
training, high overtime payment and high hiring-cost which is around more than 10 million
VND each new comer. Attracting people is hard but retaining talent is harder things. The
turnover ratio or attrition rate is one of the most essential ratios to show how the efficiency
of manage people of the company. The higher turnover rate the higher risk in the
organization. The main purpose of the thesis is to explore the causes of the high turnover
rate of production operator in Kimberly Clark Viet Nam. The thesis using theory-informed
to group possible problem based on interviews and theory-confirmed combined with depth-
interview to figure out the main problem. The finding of the thesis revealed that salary
package is not attractive and it is one of factor of employee engagement. The solution for
this is “Apply Market-based compensation system for the payment structure” to see that as
if the salary for production team is competitive or not.
4

CHAPTER 1: PROBLEM
IDENTIFICATION 1.1 Industrial overview and Company
overview Industrial overview
According to Market Pulse Report Survey quarter 1/2018 released by Nielsen Viet Nam-
a global measurement and data company, fast moving consumer goods in traditional
trade drop down significantly to -1% and modern trade drop to 2.7%. (1).
According to the Recruitment market overview 2017 released by Faro- an international
staffing solutions company, manufacturing takes lead in recruitment with 82%. Retail &
FMCG (79%) and Tech & Telecom (73%) follow the lead (2). In addition, we should
understand the “vicious circle” of labor turnover. When turnover increase, it start circle
process include decreasing average length of service, entry standards are relaxed cause
deadline of recruitment, spending a lot of time to search candidates, losing a caring
current employee and they start to leave due to isolation from leader or manager and
turnover keep increasing (3).
Overall, the market is slowing down and FMCG companies jump to a fierce battle to gain
market share and high demand in recruitment will be one of the hard things for enterprises
in general for Kimberly Clark Viet Nam in specific.
Figure 1: FMCG growth nationwide in quarter 1/2018 (Source: Market Pulse Report Q1/2018-Nielsen)
5

Company overview
Kimberly Clark Corporation (KC) was established in 1872, the United State. Nowadays,
KC’s headquartered is in Texas, USA and are proud that nearly one-quarter of the
World’s population use our products every day. We have a number 1 or number 2
position in more than 80 countries and there are 175 countries where our leading brands
are sold. With the mission that is to create new value for our customers through
products and services of superior quality, and to contribute towards a better and more
sustainable world.
Kimberly Clark Viet Nam has established in 2000 with three distributions in South,
Middle of Viet Nam and North. From this, KC product can reach out to every family
through Viet Nam.
Consumer brands:
• Feminine Care: Kotex. Kotex is one of the leading Vietnam brands within the
feminine hygiene category.
• Baby child care: Huggies. Huggies nappies and related products are developed and
manufactured with the best quality.
Industry: Fast moving consumer goods industry
Competitors: The main competitor is Unicharm Company with Diana and Bobby branch.
Kimberly Clark Viet Nam structure
Kimberly Clark Viet Nam has two sites which are head office and mill. There are six
departments with more than 200 employees in head office such as Sales Department,
Finance Department, Marketing Department, Customer Supply Chain Department,
Procurement Department, and Human Resource + IT Department. There are five
departments with more than 400 employees in a mill such as the Production Department,
Engineering Department, Quality Department, Logistics Department and Environment,
Health and Safety (EHS) Department. Head office and Binh Duong mill have separately
key performance indicator. In this research, we only focus on the Binh Duong mill.
6

Sales Department
Finance Department
Marketing Department
Head office
Customer Supply Chain
Department
Procurement Department
Kimberly Clark Viet Nam
HR + IT Production
Department
Engineering Department
Binh Duong
Quality Department
Mill
Logistics Department
EHS Department
Figure 2: Structure of Kimberly Clark Viet Nam
(Source: Human Resource Department)
1.2 Problem mess
1.2.1 Symptoms
In the year-end party which organized at Adora convention center (198 Hoang Van Thu
Street, Ward 9, Phu Nhuan District) in 1st
December 2017, Mr. Praneeth Yendamuri,
Managing Director of KCV said in the opening of the party:
“In Vietnam, as one of the leaders in the categories we play in – over the years, Kimberly
Clark Viet Nam has ensured millions of babies are kept comfortable and thrive through
our Huggies brand and similarly millions of women are ensured of superior comfortable
protection for their feminine intimate care needs through our Kotex brand. Moreover,
Viet Nam has many competitive advantages and one of that is the workforce with high
skill. So that there is no reason to stop us to be the pride of Asia. Together, we will make
it comes true.”
To achieve that vision, KCV needs to focus on people, operation, and working
environment. And the most important thing is about human. Based on turnover data
provided by Tran Xuan Binh- Human Resource Manager in the weekly meeting which
organized with attendance of function head such as Production Department, Engineering
7

Department, Logistics Department, Quality Department at Binh Duong Mill every
Monday of March, he raised concern related to turnover rate keep going up and need
support from other head of department to talk with their team member to figure out
problem. Yet all managers did not set priority on that because they still have other key
performance indicators need to deliver. In the other hands, they might think that the trend
is always high after Tet is a normal thing. And the number is increasing next two month
raise big concern from Mill manager- Mr. Duong Minh Hoai. This is a big issue related to
the workforce. He stated in that meeting:
“The turnover rate is increasing sharply over months, especially in production. It impacts
strongly on the mill performance and we are losing talent. HR and all function heads need
to figure out reasons and take action as soon as possible to avoid impact to the business.”
According to data provided by the HR department at the end of June 2018, turn-over rate
has been increasing sharply in the quarter I of 2018 (Figure 3). It was nearly double the
number of last year from 16 to 30 persons resigned. The rate has a continuous increase in
the next quarter with 36 persons resigned and still higher than the same period last year.
The total leaving employees in 6 first month of 2018 is nearly equal to the amount of
total turnover number of 2017 (66/72). The number is unusual and need to be focused on
by the management team.
Leaving staff in number
40 36
35
30
30
24
25 21
20 16
15 11
10
5
0
quarter I quarter II quarter III quarter IV
2017 leaving staff (person) 2018 leaving staff (person)
(first 6 months)
Figure 3: Number of leaving staff in person (Source: Human Resource Department)
8

The chart below (Figure 4) is about leaving staff in percentage. It makes data easier to
understand. The number of turnovers will be used to divide the total number of
employees which are 426 to get the percentage. The target of turnover rate in 2018 is 13%
but the number hits to 7% in the only quarter I 2018 and 8% in quarter II 2018. It means
the turnover target fails with 15% in June 2018. High turn-over will be a big problem of
human resources in efficiency. In the quarterly meeting, the management team requires to
find reasons and action plans to reduce the ratio of turn-over.
Leaving staf in percentage
10%
8%
8% 7%
5%
6%
6%
4%
4%
3%
2%
0%
quarter I quarter II quarter III quarter IV
2017 leaving staff (%) 2018 leaving staff (%)
(first 6 months)
Figure 4: Number of leaving staff in percentage (Source: Human Resource Department)
To ensure that it is the issue happened in the company not the problem of the industry, it
necessary to compare data with numbers of consumer goods industry. Based on data
from 2017 Asia Pacific Market Pulse Survey (Figure 5), the voluntary attrition rate of
consumer goods decreases from 17.1% (2016) to 12.8% (September 2017) while
Kimberly Clark Viet Nam 2017 attrition rate is 18% and 2018 attrition rate is 15% at the
end of June. It is too high compared with the number of the industry. Therefore, it is
possible to believe that a high turnover rate is an issue need to be solved.
9

Figure 5: Average Voluntary Attrition Rate 2016-2017
Source: 2017Asia Pacific Market Pulse Survey –Published in January 2018 (155 companies)
1.2.2 Situation analysis
To understand deeply about the turnover rate, it’s necessary to classify resignation to two
groups including “voluntary” and “involuntary”. Voluntary resignation is about
employees decide to leave the company by themselves to pursuit new opportunity or
because they do not want to stay with the organization for some reasons. This group
needs to be focused to figure out why turnover is high (4). In the other hands, In-
voluntary resignation is about company want to manage out someone who deliver low
performance or cannot meet the organization’s expectation. This group no need to retain.
Voluntary/ Involuntary turnover ratio in 2016-2018 (first 6 months) table shows that the
percentage of In-voluntary group is negligible (Table 1). So that, the study will focus on
the Voluntary group to find factor impact on the high turnover rate.
Description 2017 2018
Involuntary 10 14% 4 6%
Voluntary 62 86% 62 94%
Total 72 66
Table 1: Voluntary/ Involuntary turnover ratio in 2016-2018 (first 6 months)
With all the data above, we can see that the turnover increase dramatically but do not
know exactly which department. Therefore, the Turnover ratio by department 2017-2018
10

(first 6 months) data will show that where we should start to study (Table 2). The findings
are about the Production department with the highest percentage increase over the years.
Specifically, the number of turnover 2017 of production department is 57/72 persons who
resigned in total and account for 79% of total 2017; the number of turnover 2018 of
production department is 56/66 persons who resigned in total and account for 85% of
total 2018. The turnover percentage of others is negligible.
Engineering 1 1%
HR 1 1%
maintenance 3 4% 1 2%
Mill general 1 1%
Planning 2 3%
Procurement 1 1%
Production 57 79% 56 85%
Quality 5 7% 1 2%
Regional team 2 3%
Warehouse 3 4% 4 6%
Total 72 66
Table 2: Turnover ratio by department 2017-2018 (first 6 months)
The study continues to deepen the data into positions in the production department. Based
on Turnover ratio by position 2017-2018 table (Table 3), we can see which position
contribute turnover rate of the department. Production department has many positions
which including direct labor and indirect labor. Direct labor includes Production Operator
and Lead Operator position. Indirect labor includes the rest of the positions on the list
(Table 3). There are 57 operators resigned in 2017 and 56 in the first 6 months of 2018.
Therein, the highest turnover group is a group of operators.
11

Production Number of leaving (%) Number of leaving (%)
the employee the employee
Asset Leader I 1 0.4%
Electrical Engineer 2 0.7%
Electrical Engineer II 1 0.4%
Electrical Technician
Lead OP 2 0.7%
Lead OP I 2 0.7%
Machine Checker
operation manager 1 0.4%
Packing Technician 1 0.4%
Process Engineer 2 0.7%
Process Engineer I 1 0%
Process Engineer II 1 0%
Production Assistant 2 1%
Production Operator 53 19% 44 15.9%
Total 57 56
Table 3: Turnover ratio by position 2016-2018 (first 6 months)
Next, the study analysis turnover rate by service year and performance. The data shows
group by service year and performance to help clarify experience and capability of
resigned employees and management team will design schemes which is suitable for each
participant to attract and retain staff.
Performance rating includes four level as below:
o The exceptional group includes employees who have good behaviors and
deliver excellent performance. Moreover, they might be the successor to
their leaders. If the number of this group is high it will be a problem. From
the data below, there is 1 the case year 2017.
o The strong group includes employees who have good behaviors and deliver
good performance. The number of this group increased significantly in 2017
and keep increasing in 2018. This is a big issue with workforce planning.
12

o The inconsistent group includes employees who sometimes could not reach
any expectation of the target or behaviors, or both. The data of this group
increase over 2 years.
o Too new to rate group include newcomer who joined the company under
1 year. This group increased in 2017 and a decrease in 2018.
Based on Working experience at KC of leaving staff in 2016-2018 (first 6 months), the
number shows high turnover rate fall into strong performance group (Table 4). Employees
who have 1-3 experience years increase significantly in 2017 and continuously increase in
2018. An employee who has more than 3 experience year increase steadily over the year.
It means there is something change in mindset or expectation of strong performance
group lead to leave the company. The exceptional performance just has one case in 2017
so we can focus on it later (Table 5). For the inconsistent group, we no need to have
action because they cannot deliver target as company expectation so replacement is
needed. Therefore, the study will focus on strong performance group with more than 1-
year experience of working.
Service year 2017 2018
< 1 year 26 36% 11 17%
> 3 years 24 33% 28 42%
1-3 years 22 31% 27 41%
Total 72 66
Table 4: Working experience at KC of leaving staff in 2016-2018 (first 6 months)
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Performance 2017 2018
Exceptional 1 1%
Inconsistent 10 14% 16 24%
Strong 38 53% 43 65%
Too new to rate 23 32% 7 11%
Total 72 66
Table 5: Performance at KC of leaving staff 2017-2018 (first 6 months)
Based on the date above, the study will focus on turnover of production operator
group who has strong performance and experience “1-3 years” more than 3 years.
1.2.3 Initial Cause-effect map
To ensure the information without bias, qualitative research is conducted by depth-
interviews method not only for operation group but also for leader and manager level.
Therefore, whole matters will be set on the table to find the main problem. The
participants attend the interview include:
Manager role: Mr. Vu Minh- Production Manager
Leader role: Mr. Ha Van Dien- Asset Leader
Team member role- who leaved company: Mr. Bui Nhut Qui- Production Operator who
has worked 8 years, Mr. Pham Ngoc Tu- Production Operator who has worked 6 years,
Mr. Vo Huynh Quang Hung- Production Operator who has worked 1 year, Mr. Phan
Quoc Viet- Production Operator who has worked 3 years.
The unstructured interview guide (Appendix) is conducted to get more data to build Initial
cause and effect map.
From a manager’s perspective
Based on the interview with Mr. Vu Minh- Production manager (Appendix), the cause
of high turnover involve wrong project evaluation lead to low production performance
as well as market lead to low employee bonus. It effected on employee motivation.
Then, employee engagement is going down.
“Last year, Binh Duong mill received Dream project which is overwhelming to the team
and it fails to lead to low performance at the mill. Moreover, KC faced challenging from
14

a competitor so that our 2017 bonus result is not good. It may reason make turnover rate
too high this year”
Besides that, regional workforce strategy wants to minimize organization in the next few
years. This information makes employee worry and wants to look for new opportunities.
“This year still have many projects to run. Yet, regional workforce strategy is to keep
headcount and may reduce in the next several years. It affected the workload and
stability of work. It makes the employee feel worried and look for a new job.”
He explained more about employee naturally look for a new job when they have a
low bonus. He said:
“Operator thinks simple. Their nature behaviors will look for another job when they got
a lower bonus.”
The summary of the manager’s perspective is mentioned in figure 10 in chapter 3.
From a leader’s perspective
Based on an interview with Mr. Ha Van Dien- Asset Leader (Appendix) who is in charge
of managing the workforce and performance of the machine. Asset leader will manage 3
machines. Indeed, there is 20 employee who directly making product multiply with 3
machines equal to 60 employees under an Asset leader. He supposed high demand for
worker and quality of recruitment is one of the main problems. Therefore, their
adaptability is low and they easily quit a job to find a simpler job. Production operator in
Kimberly Clark is not only working as an operator but also maintenance staff to minimize
minor stop of the machine and maximize productivity. For the high demand worker from
the market, it is from an external element so that we just only review our compensation
program to ensure it interesting. On the other hand, the quality of recruitment is important
thing need to focus. Newcomer with low adaptability will give up daily obstacles and
leave very soon. It waste of time and money.
“I think because they have a good offer from another company. It is good for the
employee. But we have to look back as if our policy is reasonable. On the other hand, the
quality and adaptability of candidate recently are low. They easily quit the job. HR
should review source to get a higher quality candidate. KC employee worked under high
15

pressure of target such as time, waste, productivities, minor stop, time of change-over...
Therefore, newcomers will be hard to follow at the beginning.”
The summary of the leader’s perspective is mentioned in figure 11 in chapter 3.
From the employees’ perspective
Based on the interview with staff that leaving (Appendix), Mr. Vo Huynh Quang
Hung-Operator, he said that he wants to get higher education and he gets a new job as
an engineer with daytime working. It will support his study schedule at the university.
Although his leader said that he will support him during Hung’s study time but he still
chooses to leave the company.
“My leader and colleagues told me that they ready to support me to study. They also told
me that there is some colleague still do that but after many days of thinking I still keep my
decision. I want to get a higher education and get a better job as an engineer.”
He also mentions the fluctuation demand of production lead to feeling stressful in a short
time. It will be great if the production plan spread out.
“Workload that I have is not too much but it is not allocated for a whole month. Some
weeks are over workload make me feel tired and some weeks are not busy like that.”
Based on the interview with staff that leaving (Appendix), Mr. Pham Ngoc Tu-
Operator level I, he mentioned about increasing allowance.
“…it should be more allowance. In other companies, basic wages general is not higher
than KC but there is more allowance. The benefit of KC is good for example insurance,
annual health check. Yet employee wants to receive a salary in money monthly more
than that.”
Additionally, he shared a good point about choosing a person to guide newcomer will
affect directly to engage them to stay with KC.
“The target is increasing year-by-year will make newcomers fell stressful. The current
employee with more experience at KC may be used to it. In my opinion, it takes time for them
to get acquainted with it. Besides that, Asset Leader and leader OP should have met and
chosen enthusiast Lead OP to take care of newcomer. In fact, there are some Lead
16

Ops do not have the enthusiasm to have, sometimes they scream newcomers and
make them hurt.”
Based on the interview with staff that leaving (Appendix), Mr. Bui Nhut Qui-
Operator level I, he talked about a new point which related to unclear promotion
process. It is redundancy.
“I have worked for 8 years at KC and got 1 promotion recently to operator level 1. I
think it is too long for the promotion. Recently, there is a lot of promthe otion for the
operator from level 0 to level 1 but they do not know the reason. I think it may come from
the high turnover rate.”
The summary of employees’ perspective is mentioned in figure 12 in chapter 3.
Based on all interview data from manager, leader and production employees, the study
consolidates information and merge all data to make Initial cause and effect map as
below. There are 6 causes-effect was found after depth interviews. Firstly, the low
performance of work leads to a low salary or allowance. Decreasing incomes make the
employee feel de-motivated and do not want to engage with the company anymore.
Secondly, employees do not understand clearly about performance evaluation. It makes
them feel unclear assessment process and this leads to low motivation and low
engagement. Thirdly, employees feel high pressure on their job because of two factors.
One is reducing headcount to the compact organization. The other one is a lot of change
over which is changing parts of the machine to run a new product line. The higher change
over the higher project. It means that the workload is heavy year by year. Fourthly,
newcomers had poor adaptability with the job. Leaders think that low quality of
candidates is a problem and a shortage of resource of candidates make ineffective
recruitment process. Fifthly, the employees who work in night shift hard to study if they
want to get higher education as their aspiration. Last but not least, Viet Nam workforce
has an advantage about low cost, a young population so that competition between local
and multinational companies is so intense. The employee may receive new opportunities
with higher salary from competitors or other companies. This external factor impacted
also high turnover rate.
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Low engagement Low motivation
Low allowance/
Salary
Reduce headcount
Over workload on job
Heavy workload A lot of project A lot of changeover
High turnover rate
Ineffective recruitement Shortage resource of Low quality of
process candidates candidates
Personal factor Get higher education Unsuitable for study Nightshift work
External factor
Fierce compensation in New opportunities
recruitment with higher salary
Figure 6: Initial cause and effect map
1.3 Problem identification
Based on data collected from depth interviews, Initial cause and effect map was
developed. The thesis is focused on company problem not personal and external
problem. Therefore, the factors which include external and internal factors will be
removed from the study. Besides, it necessary to find theories or literature reviews to
choose the main problem.
1.3.1 Heavy workload
Firstly, the study will find theories to clarify heavy workload definition. As Brown
mentioned in his study, the workload can be understood that work is overload. It makes
people feel tired and cause of low productivity (5). According to Taylor, Repetti, and
Seeman (1997), workers who work overload for a long time will impact on their health.
There are some studies point out that work overload is the main factor of chronic stress(6).
Besides, there is a cause and effect relationship between heavy workload with a job
commitment. It is a negative impact on the engagement of actions (7). With the study of
Mueller, Boyer, Price, & Iverson in 1994, they show that heavy workload leads to
18

increase turnover rate (8). So heavy workload not only impact on productivity,
employee’s health, job commitment but also turnover rate. The theories show the
importance of heavy workload then we use collected data from the depth interview to find
out whether it is the main cause of high turnover rate or not. From the theories, the
varibale of “heavy workload” may be a main factor of the problem. Yet, we will compare
with data collected from exit interview to define as if it is a critical issue or not.
Based on data from interview Vo Huynh Quang Hung-1 experience year worker who left
the company, he does not feel overload in work. Yet he said that it is not spread out.
“Workload that I have is not too much but it is not allocated for a whole month. Some
weeks are over workload make me feel tired and some weeks are not busy like that.”
From data from interview an experienced worker- Pham Ngoc Tu, he said that he was
used to it. There is nothing make him frustrated at work.
“I had worked at KC for 6 years so that I felt ok with the workload. It is not too
much with me but it might be difficult for newcomer”
Based on data form theories, heavy workload is factor let employee down and feel tired.
Therefore lead them to quit the job. With all information which collected form exit
interview, the resigned employees think that there is heavy workload sometime but it not
the key factor push them to looking for new job. It also means that heavy workload is
not the main cause lead to high turn over rate.
1.3.2 Ineffective recruitment process
Secondly, we continue to find the definition of the ineffective recruitment process from other
literature reviews. The recruitment process is an important part of human resource
management which is mentioned in the Human Resource Management book. Human
resource management includes talent acquisition, training development, assessment, and
reward (10). Having a good recruitment process, it will an important part to find a good
person for the right job. As Taylor mentioned in “Organizational recruitment activities and
applicants' reactions at different stages of the recruitment process” study, the recruitment
process includes many activities in it to attract talent for the organization (11). According to
Heneman, Schwab, Fossum, & Dyer study, this process includes seeking
19

talent from many resources and show them good compensation and benefits package to
attract them to join the company (12). The recruitment process can call in the other name
which is “talent acquisition”. When doing good talent acquisition the productivity will
increase also (13).
With all data above, the thing that not doing good recruitment process will have a negative
impact on workforce and talent pool. Then, this study will compare with data from the
company to define whether it is the main cause or not. Based on “Leaving staff by
experience” data (Figure 6) provided by Human Resource in 2017 and first six months in
2018. The number of leaving staff who has under 1 pear experience at Kimberly Clark is
going down. The number for this is 6 newcomers in the first 6 months in 2018. It shows that
the quality of the recruitment process is not the main problem of turn over. Moreover, the
highest turnover rate falls into the group who has strong performance it strongly supports that
the recruitment process is not the main cause which should focus on.
leaving staff by experience
25
20
15
10
5
0
20
22
20
18
16
8 2017
6 6 6
1 2 4 4 3
1 1
2018
1-3 years < 1 year > 3 years 1-3 years < 1 year > 3 years 1-3 years < 1 year 1-3 years
Exceptional Inconsistent Strong Too new to rate
Figure 7: Number of leaving staff by experience (Source: Human Resource Department)
1.3.3 Low employee engagement
Lastly, this study will find the definition of low employee engagement from other studies to
compare with actual data to figure out whether it is the main problem. Based on Bakker
study, employee engagement is the thing that employees uses their energy including a
physical, emotional and mental focus on their role to deliver the highest result. It is the way
to express the one also (14). The other definition of employee engagement by Andrew OC,
Sofian S shows that employee engagement is an essential part of the
20

organization. It helps to build a strong foundation of the organization. An employee who
works with passion will contribute their full potential to get a higher level of performance
(15). In Bakker study (2008), he an agreed that employee with higher energy will deliver
the better result (16). With all definition above, the employee engagement is a crucial part
in the development journey of the company.
In addition, The Initial cause and effect map which merge data from the interview
employees, leader and manager also shows low employee engagement is a problem of
organization.
From a manager’s perspective, Mr. Vu Minh- Production Manager think that low
bonus will lead to low motivation and loyalty of employee.
From a leader’s perspective, Mr. Ha Van Dien- Asset Leader think that uncompetitive
compensation package makes employee demotivate lead to low engagement.
From the employees’ perspective, they think that uncompetitive allowance and salary
make them leave the company.
With all the information above, employee engagement is very important in the company.
The higher engagement scores the higher loyalty and they will deliver high performance.
1.3.4 Consequence
To strengthen the important of the main problem, the study will show the possible result
when the company has low engagement score. High turn-over will increase costs which
include overtime payment and hiring cost. It takes time for newcomers to learn and adopt
new environment and might a reason for low performance. A newcomer needs at least
three months to do smoothly their daily work. Newcomers need to be trained by current
employees and they have to work overtime to teach new hires. This lead to increase high
overtime payment. Besides that, when lacking resource the rest of the team have to work
overtime to cover the workload of the vacancy. Therefore, it is necessary to find the
main problem of high turnover to minimize waste of money.
According to Figure 7 below, the highest overtime payment paid for replacing equivalent
to 8 hours per person per month. The percentage of overtime payment for replacing is
20% (Table 6) which is equal to 5,881,886 VND (Table 7) per new hire monthly. On the
21

other hand, the related cost for newcomers will be waste if they just join the company for a
few months and quit. The total amount maybe estimates around 10,687,108 VND. Then, the
amount the company had paid for 66 resignation cases is around 705,349,128 VND for the
first 6 months. In case there is no one leave company at least one year, it will be investment
costly. Yet if there is any newcomer quit the job, it will be waste of time and money. Then,
the whole recruitment process needs to be restarted with a double cost.
Overtime reasons Jan-Jun 2018
meeting 3
kaizen/problem solving 4
training 6
supporting 7
project 7
others 7
replace people 8
0 1 2 3 4 5 6 7 8 9
OT hours/month
Figure 8: Overtime reasons Jan-Jun 2018 (Source: Human resource department)
Ave OT/person (Jan-Jun/2018) Hours/month %
Replace people 8 20%
Others 7 17%
Project 7 17%
Supporting 7 16%
Training 6 14%
Kaizen/Problem solving 4 9%
Meeting 3 8%
Total 42hrs 100%
OT/month/person
Table 6: Average Overtime per person Jan-Jun 2018 in percentage
(Source: Human resource Department)
22

Description Cost
Personal protection equipment 2,803,000
recruiting fee 2,002,222
OT payment 5,881,886
Total cost/new hires 10,687,108
Table 7: Hiring cost in 2018 (Source: Human resource department)
It’s not only cost of time to recruit but also cost of building talent and retain staff.
Especially, operators who are directly involved in the production process, New operator
need three to six months to understand and operate smoothly. It means that there is the
amount of money need to be paid for training and overtime of current experience
employee to take care of the new one during that time. If newcomers pass probation time
and keep delivering good performance, it is still a good investment with long term.
Lacking operator resource will decrease productivity and increasing waste. When
turnover is high means that lacking human resource with experience. The new comers
need a lot of time to adapt and understand the process and how to do problem solving.
The current employees not only try to cover the workload of the vacancies but also train
new comers as fast as possible. Then, they can do their job smoothly. Figure 8 and 9
show that the performance of machines are not meet the target for the first 6 months in
2018 and the waste is higher than the target of 2018. The year to date for OEE is 88.4%
versus target is 90.3%. Moreover, the Waste year to date is 1.2% versus target 0.71%.
Thus, the Binh Duong mill will not meet performance at the end of the year and directly
impact to profit and bonus in the end of the year of whole company.
23

Performance of machines
92.00%
91.00%
89.77% 90.30%
90.00% 89.3% 89.2%
89.00% 88.4%
88.0% 88.0%
88.4%
88.00% 87.3%
87.00%
86.00%
2017 2018 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 2018
YTD Target YTD
Figure 9: Performance of machines (first 6 months in 2018)
(Source: Kimberly Clark mid-year business review 2018)
Waste of machines
2.00%
1.50%
1.43% 1.41%
1.35%
1.39%
1.2%
1.26%
1.00% 0.73% 0.71% 0.64%
0.50%
0.00%
2017 2018 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 2018
YTD Target YTD
Figure 10: Waste of machines (first 6 months in 2018)
(Source: Kimberly Clark mid-year business review 2018)
In the weekly meeting at Binh Duong mill, Mill manager said among the board of
management: “engagement activities are going down recently and it is not interesting
anymore. We have to face huge competition in the market so there is a lot of projects
developed to win market shares. It is necessary to make the engagement program more
interesting.” Human Resource Manager agreed with Mr. Hoai in the same meeting:
engagement is one of the important things need to focus to retain talent.
With all data given above, both un-control factors which are external and personal factor
will be eliminated because the company cannot control them. It should be focused on what
the company can changes which are the process of recruitment, reviewing workload
24

of each job, re-assessment of employee engagement ratio to investigate which is big
factor impact to hug turnover. Furthermore, the theories prove that low engagement,
works stress or ineffective talent acquisition will be main cause make employees leave
the company. By collecting data from exit interview, focus group and employee
engagement survey’s result, the main cause is defined. The main cause is about
uncompetitive salary and this is one of key factor of low engagement dimensions.
Low engagement Low motivation
Low allowance/
Salary
Reduce headcount
Heavy workload A lot of changeover Over workload on job High turnover rate
A lot of project
Ineffective recruitement Shortage resource of Low quality of
process candidates candidates
Figure 11: Updated cause and effect map
25

CHAPTER 2: SUGGESTED SOLUTION
2.1 Cause validation
There is an employee engagement survey which conducted once per two years at
Kimberly Clark in September. All employees required to do the survey. The number
of employees who attend an engagement survey in 2017 is 426 staff. The result of
2017 survey founded top 4 big dimensions to improve:
✓
Pay
✓
Reward & Recognition
✓
Development Opportunities
✓
Team Leader Relations (or Poor leader performance)
Figure 12: The result of an employee engagement survey in 2017
The column on the left side shows dimensions which are affected by employee engagement.
The percentage of Fav means Favorite group who agree with the company about the
dimension. The percentage of Neutral means Neutral group who do not have an idea about
dimensions. Most of the employee in this group come from a new employee.
26

The percentage of Unfav means Unfavorite group who do not agree about dimensions.
If the board of management wants to increase employee engagement score, they should
focus on an action plan for this group. Mr. Hoai- Mill Manager totally agreed with the
result. He required all function head making an action plan. Mr. Binh-HR Manager
organizes 4 sessions for the operator group to get their opinion on each factor in 1 and 3
November 2017. The data collected from the focus group are below.
Reward & Recognition
In Performance management book of Herman Aguinis, assessment if one of step in
performance management process which including identifying, measuring and developing
for staff in organization strategy (17). Data below is summary of Reward and Recognition
dimension.
- Employees feel that they did not receive enough appreciation from management on
efforts. They just expect employee work hard to achieve KPIs results.
- Employees missed information about the recognition program. The recognition
should be posted in the communication forum, visualize and Reward.
- Employees need more caring from mill management, direct team leader. This is
more important than any other recognition or reward programs.
To deepen data, there is a couple of interviews was conducted with the operator. Tran
Duc Loc- operator in BD24 machine said that “my leader is caring about us. He often
stays at the company after work when we run the hard to project. For example, the
speed up project which was run in March is successful. He sent a recognition card to us.
Besides that, he sent an email to Mill manager and Production Manager for recognizing
us.”
The interview with Kieu Ngoc Han- Lead Operator in BD04 machine mentioned “my
leader is not sending recognition card for me often, but I don’t care. I think the most
important thing he knows what I have done and rating right in the year-end assessment.”
In the other interview, Pham Hung Cuong- Lead Operator in the BD07 machine “it is
good when the leader recognizes us but we like salary or bonus more than that.”
27

Therefore, the Reward and Recognition is not the main cause of low engagement. The
result of in 2017 may not reflect the current situation in 2018 anymore.
Development Opportunities
New position
Machine Lead Production Operator Production Operator I Total
BD03 2 2
BD04 4 4
BD05 1 3 4
BD06 5 5
BD07 3 3
BD08 7 7
BD09 2 2
BD10 6 6
BD21 1 5 6
BD22 5 5
BD23 5 5
BD24 5 5
Total 2 52 54
Table 8: List of promotion of production (Source: Human Resource Department)
Table 8 is a summary of development Opportunities dimension.
- The team leader has not provided or focused on career discussion with team members.
- No frequent job opportunities/ promotions
- Unclear about the career ladder.
- The team does not have real IDP and closely monitor tracking on progress.
Besides that, from data of HR team (Table 8), there is 2 Operator I was promoted to Lead
Operator and 52 Operator was promoted to Operator level I. total number account for ¼
of a total of operator group. So that, the data can prove that Development Opportunities is
not a main cause of the study.
28

Team Leader Relations
Based on the Pulakos study, he mentioned the result when performance management
doing good or bad. When doing performance management well it helps achieve the target
and contribute to developing the strategy of the organization. When doing this process
not well it will make team members feel demotivation and distrust. Thus, the team will be
weak and hard to achieve goals (18). According to Chandler study, he mentioned the
relationship between supervisory support and reward system will help to create a culture
with innovation (19). A good team leader should know team member characteristic to
manage them effectively. The management including setting clearly objective, coaching,
feedback, and assessment. The data collected from the focus group session is below
- The employee has not seen the effectiveness of coaching and feedback from
managers, team leaders. The coaching & feedback is not regularly and
specifically to improve skills and performance. The leader just focuses on daily
operational issues.
- Employees do not feel that they receive sincere care and concern as a person. The
managers, team leaders are not really available when employee need, not really
accommodating when an employee has a family, personal matters to attend to.
Based on data from the interview of Tran Duc Loc- operator in BD24, he thinks his leader
has good leadership style and care about team member “my leader is caring about us. He
often stays at the company after work when we run the hard to project.”
From the interview with Vo Huynh Quang Hung- Operator who leave the company, he
said that his leader already to support him if he wants to get a higher education. Yet he
refused just because he wants to keep his decision.
Therefore, Team Leader Relations is also not the main cause we need to focus.
Pay
Pay had the lowest score of engagement survey. After having the result, there are
4 sessions “focus group meeting” organized to collect more data. They said that even HR
is playing a key role to provide support, coaching for team leaders, team members on
PAY but the employee still doesn’t understand clearly about pay philosophy, methods,
29

and structure. Besides that, employees have a big concerned on current pay for
performance as well as market pricing. Data below is a summary of their queries:
• Which companies are being compared with KCV about pay package?
• What is KC pay philosophy?
• What next if their salary reaches 100% of their pay grade?
• Heavy workload compares with the same position of other companies
• Base salary and allowance are low
To clarify employees’ concerns, there are two “Market based compensation” training
sessions which held to provide employees a deeper understanding of K-C’s compensation
philosophy, practices. During the training, almost employees’ concerns are explained
clearly but there are two things are not satisfied. They are:
✓
The job description of some positions is out of date so that they cannot reflect
their workload
✓
Base salary and allowance are low
Besides, based on data provided from resigned employees during exit interviews, most
of them mentioned uncompetitive compensation package which is including salary and
allowance. The percentage of increasing salary yearly. As Mr. Pham Ngoc Tu- Operator
said that:
“I think my salary is it ok for now. Yet, for an employee who is working for 2-3 years feel
the percentage increase in wages is the low cause of inflation.”
He thinks for newcomers the percentage of increasing salary is low.
As Mr. Bui Nhut Qui- Operator mentioned in the interview, he got a higher-level job with
a higher salary and working in daytime.
“Actually, I got a new job as an electrical technician. I will work daytime and a higher
salary. This is an opportunity for my career.”
Based on data provided by Mr. Phan Quoc Viet- Operator, he also wants to find a new job
with higher wages.
30

“In the other hands, I want to look for a new job with a higher salary. Because KC has
system clearly, we just have a one-time increasing salary in a year. If the starting point is
low, it will be low for the future.”
Uncompetitive salary structure Not enough Reward and Recognition
- Job descriptions are out of date lead to
not reflect their workload and salary
- Base salary and allowance is low
- Not receive enough appreciation from management on efforts.
- Missed information about the recognition program.
- Need more caring from mill management, direct team leader.
- In-effectiveness of coaching and feedback
from managers, team leaders.
- Not feel that they receive sincere care
and concern as a person. Team leaders
are not available when employee need
Low employee engagement
of production team
- Team leaders haven’t provided or focused on career discussion
- No frequent job opportunities/ promotions
- Unclear about the career ladder.
- The team does not have real IDP and closely monitor tracking on progress.
Poor leader performance Development opportunities
Figure 13: Fish bone map
Based on data from the exit interview, the main cause of low employee engagement is
pay. For long service employees their salary still meets their expectation but for new
employees, the package is not attractive so that if they have a better chance they will
easily jump to other company. K-C is a pay-for-performance company. Role Levels
reflect internal organizational logic and career path and are intended to be consistent
across sectors and countries. Grades are based on external market data and vary across
sectors and countries. K-C’s philosophy is a market-based compensation. Consumer
goods pay market can be represented by a normal distribution curve. Vertical axis is the
number of the organizations and horizontal axis is the level of pay (lower to the left and
higher to the right). Around 70% of consumer businesses target 50th percentile
(Median) for their pay structures and overall pay costs. The market positioning strategy
largely depends on the business size and model as well as company’s Total Employment
Proposition, which includes a whole portfolio of elements such as business purpose and
brands, career and development, rewards, work environment, etc.
31

Next step the research will provide alternative solutions.
Poor reward and
recognition
Uncompetitive salary
structure
Lack of development
opportunities
Poor leader performance
2.2 Alternative solution
High turnover rate
Low employee engagement in
productionFinalteammap
Figure 14: Final map
High overtime payment
High hiring cost
The right compensation and benefits schemes ensure that hard-working employees are
rewarded fairly and in the most cost-effective way for the company. The fairness
judgement motivates employees to sustain their performance. In a sample of 240
manufacturing employees (20) showed that employees had adverse reactions when they
received unfair treatment. The right compensation is not only important for retaining
and motivating employees, but also for attracting new people to the company. The more
attractive compensation and benefits schemes tend to generate more interest in new
positions.
The compensation will be effected by three elements which are a job, personnel
performance and market. Firstly, Job which is about the nature of the job such as
responsibilities, accountabilities, contribution, challenges; skill set need to have to deliver
daily work; experience and training certification requirement. Job description used for a
candidate to understand all about job scope or using as a data for benchmarking tool of
salary in the market. Each job will have different pay grade which is number represent for
each position in the labor market. Secondly, it is about a person which is related to
personnel performance, how people achieve the target through their competencies and
32

behaviors. When a worker know about their valuable job which makes a contribution to
the organization they will want to deliver more (21). Lastly, it is about the market such as
how many competitors, workforce supply and demand, cost of living… Therefore, each
company will define pay strategy and compare with the labor market through pay
surveys and define pay ranges for each position at the company. Pay strategy will help to
improve the effectiveness of the organization (22).
Based on primary data from the interview the employees and managers, there is nothing
make employees concern about performance appraisal but the other elements are not
clear. It means that there are two main causes make employees think that the
compensation package is not competitive and look for a new job. Therefore, the research
will focus on finding two solutions for these causes:
- Solution 1: Apply evaluation process for payment structure to ensure their
compensation is fair with their responsibilities.
- Solution 2: Apply Market-based compensation system for the payment structure
2.2.1 Apply evaluation process for the payment structure
Overview on job analysis
Consider an economy with identical, perfectly competitive firms, each firm having a
production function of the form Q = F(e(w)N), where N is the number of employees, e is
effort per worker, and w is the real wage. The wage w' is known as the efficiency wage and
this wage choice minimizes labor cost per efficiency unit. The worker who has more
33

potential with their skill in their role will be paid more wage. The worker who is new
comer will be paid a wage less than marginal productivity and after they achieve
their target of the year the salary will be reviewed and increased (23).
The graph below shows that the higher wage the higher level of the worker. The
wage rate w2 of higher level worker will fall much more than w1 of lower level
worker (24).
Pay scales are determined by "job evaluation systems”. There are surveys which
conducted within and across organizations with same size and industry to assess the
"value of a job" according to a set of criteria such as a set of requirements, the scope
of work.
Job analysis is a tool to collect information to describe job nature and requirement
(25). There are two outcomes of job analysis. One is job description which is about
the nature and type of job such as the title, the nature of duties, responsibilities, the
relationship of this job with others jobs in the organization, measurement, etc. The
others are job specification which is about minimum acceptable human qualities such
as education qualification, related attributes, physical and mental health, maturity and
dependability.
Following the instruction from “Job and work analysis” book (26), the research
will focus on four categories to build a job analysis process:
• Kinds of job data collected
34

o Organizational philosophy and structure. This type of data shows us how
the job fit in the organization’s mission. To collect this data, there is a
person who spends the time to watch production operator work daily.
o Licensing and other government mandated requirement. This
means some specific jobs need a license to do.
o Responsibilities mention about authority and accountability
of jobholder.
• Methods of gathering data include
o Review literature such as a book, guideline, a report from inside of
company or outside.
o Studying equipment design specifications for any job which depend
on equipment or machine.
o Doing the work in some case is the best way to understand the job.
o Interview the jobholder, leader or manager of jobholder to have many
perspectives from many role levels about the job.
o Observe the job holder doing the job
• Sources of job information include company policies, procedure, guideline…
o The job analysis
o The job holder supervisor
o The higher manager of the job holder
o The expert of the job
o The training specialist in the company
o Client or customer
o Written document such as procedure, record, equipment specifications
• Unit of analysis
o Duties
o Task
o Authority
o Working relationship
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o Scope and job nature
o Qualification and experience
o Organization relationship
Job analysis in the Kimberly Clark’s context
The job description of all positions at Kimberly Clark Viet Nam is revised every 2 years
as an ISO requirement. ISO means International Organization for Standardization which
is the system to help build a strong partnership within the company and develop a
competitive advantage for enterprise (27). Yet, the way to do that is just one way from
team leader and because they are so busy with their work so that they do not put attention
to this task. The way they often do is just keep the same or just change a little bit and re-
upload to the system as a timeline. Thus, the job description is not reflected exactly what
the production operator has done. It will lead to lost uncompetitive advantage in the labor
market when they work more than what they had paid for. Once all jobs have been
evaluated through a job evaluation system, and the relative hierarchy or rank-order of all
jobs has been established, it is then highly desirable and sensible to cluster jobs of broadly
similar job size into grades to make administering a reward policy much easier.
The current process of the revised job description (JD) at Kimberly Clark Viet Nam as
below:
Step 1: the ETQ system will send the alert message to the owner of the
document-HR Executive. This step will owner do not miss timeline for revised JD
Step 2: HR Executive work with the head department to get revised JD. The person
in charge from HR has to make sure head department finish as a timeline to upload
into the system.
Step 3: Head department submit revised JD to HR. This step is the most important
step needed to have time to review current task of each job and then add or remove
some new or out-of-date task, responsibilities of the job to make sure it reflects
real workload of employees.
Step 4: HR upload revised JD into the ETQ system. The person in charge from
the HR department will upload the document as a timeline.
36

Because of the heavy workload, the current process of revising JD is not effective and
not reflect actual work. Then, the research proposes a new process to evaluate current job
of production operator.
Step 1: establish a Job Evaluation Committee (JEC) (1 week)
This includes HR staff, managers, Union representatives. A job evaluation
committee consisting of two HR staff has been established and trained in the Mercer
Methodology system. The committee is accountable for identifying the need for the
project, obtain cooperation, write the scope of work for the agency.
The committee collects job information through role profiles, organization charts, and
interviews with the relevant manager(s).
Step 2: Complete purchasing process as required by the company (2 weeks)
HR staff creates Purchase requisition (PR)
→
get a quotation from the agency and
send back to HR team
→
HR staff gets approval from a manager to choose which one
is the best option
→
purchasing team create Purchase Order (PO)
→
JEC work with
the agency to evaluate the job to achieve outcomes of the project. Step 3: Collect Job
data by document (1 week)
JEC: Identify, collect, and make available the relevant documents to be used in the
evaluation process. In addition to job descriptions, documents could include
organization charts. Then, sending to the agency to provide them about knowledge
of organization and structure.
Step 4: Collect Job data by observation (4 weeks)
There is a team from the agency who spend the time to observe the job holder
doing the job to find out how the job fit in the organization’s mission. Step 5:
Collect Job data by interview (2 weeks)
Interview the jobholder, leader or manager of jobholder to have many
perspectives from many role levels about the job.
Step 6: Collect Job data provided by jobholder (1 week)
The employee list down daily task, objective and their input related to the job to identify
the changes to the role profile, duties, and responsibilities and then completed
37

Job Evaluation Review Form (JERF) summarizing the changes to the role,
position outcomes, and the required competencies.
Step 7: Collect Job data provided by line manager of job holder (1 week)
The manager list down all task and objective which they give to job holder to identify
the changes to the role profile, duties, and responsibilities and then complete Job
Evaluation Review Form (JERF) summarizing the changes to the role, position
outcomes, and the required competencies.
Step 8: consolidate the data to draft job evaluation report (1 week)
Job evaluation needs to be based on current up to date job descriptions through all
data collected by the above processes.
Step 9: get alignment from job holder and managers (1 week)
The employee and manager sign off on the JERF to reflect they have both agreed to
the changes to the role profile. The manager then forwards the completed JERF to the
next level of supervision (direct manager/ head department). The review of the JERF
will not proceed past this point unless the Head department is in agreement with the
changes and outcomes identified.
Step 10: summary report and recommendation (1 week)
The agency provides the updated Job Description, benchmark or comparison
job descriptions, recommendation for classification for the job. Step 11: a
decision from the board of management (1 week)
The report will send to Mill manager and HR Manager for review. Any comments on
the merits of the request by the Mill manager should accompany the JERF. If there is
any position changes the position grade as a result of the review, the manager will
work with Human Resources to determine the appropriate salary adjustment in
accordance with the KC compensation guidelines.
Step 11: Communicate about the changes to employees (1 week)
If the position and grade increase as a result of the review, notification will be sent to
the employee and manager with a copy to Payroll, effective to the date received in
Human Resources.
38

If the position and grade decrease as a result of the review, notification will be sent
to the employee and manager, however, the employee’s salary will remain red
circled while the incumbent occupies the position. If the job holder leaves the
company, the changes will be applied for the replacement.
Budget planning
The estimated budget of the job analysis project as following data:
• Training costs: 1 session x 2200 USD = 2,000 + 200= 2,200 USD (included VAT)
• Job evaluation service from agency: 180 USD/ position x 50 = 9,000 + 900= 9,900
USD (included VAT)
• Human resource from company: 5,800 USD/month x 4 months= 23,200 USD
In total, the budget for this project will be 35,300 USD. The budget is planed
based on the quotation of Talentnet agency and employees’ salary who contribute
to the project within 17 weeks.
2.2.2 Apply Market-based compensation system for the payment structure
Overview of Market-based compensation
The recruitment and retention will be effected when there are some pay rates in the
organization are below the market (28). It means the salary of employees is not
competitive compare with others competitors so that employees are looking for a new job
with a higher wage. On the other hand, uncompetitive compensation will not attract talent
for organization. The candidates have the right to choose which company satisfy their
aspect of compensation and benefit. It incorporates this element:
• Broad-banding which is aligned the salary band of the company with
market level.
• Competency-based pay which focuses on individual competency. The
staff will be assigned to the band based on their position level.
• The new emphasis on a market alignment which is each pay grade has to
align with some grade on market.
39

The company needs to review and change their compensation package to meet labor
market demand. For example, in the late 1990s, the requirement of software engineering
skill increasing and U.S labor market does not have enough supply so that the number of
candidates from other countries was attracted accordingly (29). Based on Jaworski and
Kohli research (30), a market-based compensation system is the organizational factors
with great impact on the market orientation. A company with market-oriented will lead
to outstanding performance (31).
The process of Market-based compensation can be understood as the following steps:
Step 1: salary surveys
The salary surveys provide a large data averages and percentiles of salary in the
market. In compensation comparisons, the median survey rate is most commonly used
because it is less influenced by high or low pay extremes. Other data elements such as
the 25th percentile, the 75th percentile can be helpful when companies consider pay
ranges.
Step 2: using market rate to adjust the current salary of the organization
The company will use the median rate to set midpoint of the pay range. The range
spread is defined by the level of the position in the company hierarchy. Higher level
positions may have a range upwards to 65%. Entry-level positions may have a range
approximating 35%. Once the market rate midpoint establishes the range minimum
and maximum, the next task is to review the pay rate for employees. For the pay rate
that is too low, there is an increasing adjustment. For the pay rate that is too high
there is a decreasing adjustment.
Market-based compensation process in Kimberly Clark’s context
K-C’s Compensation Philosophy is based on the other fundamental elements which are
Market-Based Compensation (MBC which means the industry standard for
determining pay.). The employee performance and annual salary increase not only are
based on Key Performance Indicators but also based on Market-based.
Roles & Levels provide a common language to talk about jobs, career paths, and
development. There are three groups of roles based on the type of work performed:
40

• Management (manages people)
• Professional (provides expertise)
• Support (provides support)
In this research, we just focus on support group which is employees work at the
production team. All jobs are also market priced in the local market and slotted into a
grade structure. Role levels in K-C are used as a framework for career and development
management and outline the specific leadership behaviors, scope, knowledge, and
experience relevant to a role in the organization.
Pay Grades, make up country salary structures, which are frameworks designed to
efficiently manage market-based compensation for large numbers of jobs within a
country. Unlike the role levels, Pay Grades are based on the external market and reflect
local pay practices, which are driven by supply and demand trends. Grades should be
thought of as mere pointers at the appropriate market salary for the corresponding job.
Although there are some correlations between Role Levels and Pay Grades, they are
technically not linked and are therefore independent. Role levels help define levels of
jobs when matching jobs in the market to the correct level of K-C job.
In the marketplace, if there is a shortage of talent, the pay for these jobs go up as the
companies compete to hire them. Likewise, pay for specific jobs will go down if demand
for the talent decreases. Market-based compensation method means the company will be
compared salary with peer group which includes similar size companies in the same
industry. Then, choosing the pay target which is pay midpoints to apply pay structure. K-
C is using market pricing methodology to place the jobs into grades.
Step 1: Pay surveys
The company sends the payroll to Mercer agency which provides services such as
designing affordable health plans, assuring income for retirement, aligning workers
with workforce needs and market data.
Step 2: Review the pay range
41

The existing grade salary ranges will be reviewed with market data. For the pay rate
that is too low, there is an increasing adjustment. For the pay rate too high there is no
decreasing adjustment but if the job holder leaves, the effectiveness will be applied.
Step 3: Merit increase
The adjustment will be approved based on the guideline of the company.
Individual salaries reviewed based on performance and position in range. Step 4:
Applied changes
The adjustment will be applied as a timeline.
From data collected from the interview focus group after having engagement survey
results, the production operator thinks that the market comparison may not accuracy.
Therefore, the solution proposed in this research is about matching again production
team salary with the market. So the company needs to hire an agency to re-evaluate
the data.
Implementation
Step 1: determine the scope of work (1 week)
HR staff is accountable for identifying the need for the project, write a scope of
work and prepare a related document for the agency
→
get approval from the
management team.
Step 2: Complete purchasing process as required by the company (2 weeks)
HR staff create Purchase requisition (PR)→ get quotation from agency and send back
to HR team→ HR staff get approval from manager to choose which one is the best
option→ purchasing team create Purchase Order (PO)→ HR staff work with agency
to evaluate the pay range to achieve outcomes of the project. Step 3: Pay surveys (2
weeks)
HR staff clarifies about the position to make sure the benchmark is right. The
agency will do research and send the result to HR. Step 4: Review pay range (3
weeks)
HR staff review the existing grade salary ranges with market data and make a proposal
for adjustment if there is a gap
→
Senior HR Executive review
→
HR manager review
42

and approval
→
Regional C&B review and approval
→
Mill manager review
and approval
Step 5: Applied changes (1 week)
The adjustment will be applied as a timeline and communicate to employees follow
the company process.
Figure 15: Market-based compensation process
(Source: Data from Human Resource Department)
Budget planning
The estimated budget of the project as the following data:
• Pay survey service from agency: 5,000/ service + 500= 5,500 USD (included
VAT)
• Human resource from company: 1,000 USD/month x 2 months= 2,000 USD
In total, the budget for this project will be 7,500 USD. The budget is planed based
on the quotation of Talentnet agency and employees’ salary who contribute to the
project within 9 weeks.
Solution selection
Based on the theories and Kimberly Clark’s context, there are two solutions
which proposed to the board of management team for reviewing:
- Solution 1: Apply evaluation process for payment structure to ensure their
compensation is fair with their responsibilities.
43

- Solution 2: Apply Market-based compensation system for the payment structure
The summary of two solutions described as below table and it is clearly to see that
solution 2 is much better than the solution 1 based on the advantage of time, budget and
resources. The interview of Mill manager- Mr. Duong Minh Hoai be (chapter 3) defines
that solution 2 is suitable for this time with a low budget and fewer resources to do that.
Criteria Solution 1 Solution 2
Budget 35,300 USD 7,000 USD
Timing 17 weeks 6 weeks
Scope The scope is large with long time and many resources. The scope is small with short time
Table 9: summary of two solutions
2.3 Action plan in an organization
In summary, the solution 1 include the thing that collecting data from internal and
external; then benchmarking data to have a recommendation for classification for the job.
It takes time, money and needs much more resources to do the project. This requires to
cooperate very well among functions and keep track whole the processes. On the other
hand, the solution has more advantages than solution 1 because it needs a short time and a
short resource with low budget to do the project. Therefore, the management team decides
to go with solution 2. A detail action plan needs to be prepared for solution 2 to see how
to apply in the organization.
Objective
✓
Reduce turnover rate
✓
Reduce recruitment/admin cost
✓
Reduce overtime hours
✓
Retain good experience technical manpower to run BD Mill and support Asian
country.
✓
Encourage employees to work a long time with KCV

44

Human resources
Stakeholders
Mill Manager Duong Minh Hoai
Production Manager-AFC group Bui Van Tam
Production Manager-BCC group Vu Minh
HR Manager Tran Xuan Binh
Core Team
Position PIC Responsibilities
- In charge of overall project management,
Project Lead Phan Thuy Loan implementation, and communication in/out
side team
Senior HR Nguyen Thi Thanh -Support review adjustment plan to make sure
its accuracy and follow KC guideline
Executive Mai
- release PR/PO and collect internal data
HR staff
Nguyen Long Thanh
- Support the project
Toan
HR service Talentnet coporation - Do research and benchmarking the pay grade
Support Team
Position PIC Responsibilities
Procurement
Dang Vu Minh Chau
-Lead procurement processes and sourcing
Specialist vendors
Regional C&B
Jirapongtanavech, -Review the adjustment proposal
Nipa
Task list
The name of this project is “Reviewing pay grade for production operator”. It is
scheduled to start on 1st November 2018 at 8:00 am. The overall project runs 5 days per
week, Monday to Friday 8 am to 5 pm, with one-hour break for lunch from 12:00 am to
1:00 pm. The working day is 8 hours. The working week is 40 hours.
45

Task Name
Duration
Resources
(day)
Develop scope of Describe the scope of work,
work requirement, and objectives 1 Project leader
Mill manager
HR Manager
Production Manager-AFC
group
Verify the purpose of the project Production Manager- BCC
about budget, timing, resources 4 group
Create Purchase requisition in
Purchasing process SAP system 1 HR staff
Get quotation from agencies 5 Procurement Specialist
Review from project leader 1 Project leader
HR manager approval 1 HR Manager
Mill manager approval 1 Mill Manager
create Purchase Order 1 Procurement Specialist
Pay surveys collect data send to the vendor 1 HR staff
benchmarking data with market 9 Talentnet
Review the existing grade salary
Review pay range ranges with market data 2 Project leader
Make a proposal for adjustment 5 Project leader
Review the proposal for
alignment with pay guideline 1 Senior C&B
Review and approval from HRM 2 HR Manager
Review and approval from
Regional team 2 Regional C&B
Review and approval from Mill
Manager 3 Mill Manager
Apply changes Update changes into the system 3 HR staff
Prepare related documents 1 HR staff
Communicate with employees 1 Production Manager
46

Gantt chart
47

CHAPTER 3: SUPPORTING INFORMATION
3.1 Methodology
The research was carried out for using the quantitative method and use the interview to
gather data. For manager level, there is an interview with production manager- Mr. Vu
Minh who work at the company for 25 years. For leader level, there is an interview with
Asset leader- Mr. Ha Van Dien who is work for the company for 10 years. For employee
level, there are 4 interviews with production operators who submitted resignation letter-
Mr. Vo Huynh Quang Hung (3 months), Pham Ngoc Tu (6 years), Bui Nhut Qui (8
years) and Phan Quoc Viet (3 years). Besides, the data was also collected from the
management team’s meeting, engagement survey’s result of more than 400 employees in
2017 and HR’s statistics.
3.2 Interview transcript
Interview 1
Introduction
I would like to thank you for taking your valuable time to join meeting today. I would like to listen to
your thought about the reason effected on the turnover situation. The interview should take a half hour.
Your responses are confidential and anonymous. There is no such thing as a correct answer, so please feel
free to respond.
Background Information
Interview Start Time: 15:00
Interview End Time: 15:25
Meeting place for interview: HR meeting room I = Interviewer
R= Respondent
Date/month/year: 09/07/2018
Questions
Q: How do you feel about your experience working at KC?
A: I attended an operator trainee program for 3 months and passed the program to be a permanent
employee for 1 year. I think KC environment is very good and I learn many things from here.
Q: What is the thing you like most at KC?
A: I had learned many things from the company. Firstly, I join KC as a trainee and then I am an
employee. I attend Presentation course, a technical course such as a belt, bearing… It is very useful.
Question 3: What is the thing you dislike or think that KC should change?
A: I do not have any idea about this. I think everything is ok.
Q: What did your leader said when you told that you leave KC?
48

A: My leader and colleagues told me that they ready to support me to study. They also told me that there
is some colleague still do that but after many days of thinking I still keep my decision. I want to get a
higher education and get a better job as an engineer.
Q: How about income when you leave KC? How could you pay the tuition fee and living?
A: Actually, I also get a new job as an electrical engineer with a higher income and working time
is suitable for my study.
Q: wow it is a good job. Yet don’t they require university certification? At KC if you want to be an
engineer you have to graduate from university, not college and have English certification.
A: No, they do not need it. I think this is a good chance for me. The only thing I don’t like that I have to
work at construction far from home.
Q: ok, I had read your Exit interview paper, and now I want to verify some point to make sure I
understand something to make you not comfortable when working at KC. How do you think about
the commuting distance between your place and company?
A: there is a company bus near my place but I cannot use that car because it is full of people so that I
have to go to the company by myself.
Q: why don’t you tell me or any person in the HR team?
A: I think it is not big deal. I can go to work by myself.
Q: How do you think about career opportunities for your position- Production Operator?
A: There is an opportunity for OP position. I will rotate through 4 positions on the machine (OP1,2,3,4)
and after that, I can promote to OP level I
→
Lead OP
→
Lead OP level 1. My leader also shares with
me about that and I think it is good.
A: Q: How do you think about your wage?
A: I am a freshman and my salary is very good at this time. The workload that I have is not too much but
it is not allocated for a whole month. Some weeks are over workload make me feel tired and some
weeks are not busy like that.
Personal information
Name: Vo Huynh Quang Hung
Position: Operator
Department: Production
We would like to express our respectfulness to your sharing today. Wish you have a nice day. Thank
you very much
49

Interview 2
Introduction
free to respond.
R= Respondent
Questions
Q: How do you feel about your experience working at KC? For example type of work, workload,
environment…
A: I had worked at KC for 6 years so that I felt ok with the workload. It is not too much with me but it
might be difficult for a newcomer. Moreover, phase B had been set-up refrigerator so I think it is better
than previous years.
I think KC has good benefit such as health check, health insurance, sport-activities, team building trip,
a baby gift for newborn baby and wedding gift, especially safety environment. When an employee
raises ideas leader to listen and consider, I think it is good.
Q: What is the thing you dislike or think that KC should change?
A: for me, there is nothing. Yet co-workers told me that they felt hard when following the
reimbursement process of an insurance agency.
Q: could you tell me more detail? Are they newcomers?
A: they are working at KC 2-3 years. They said that the time of approval is longer than previous years.
But I think it is ok for me because I didn’t have a problem when claim medical expense.
Q: How about your salary? Do you feel it enough for your work?
A: I think my salary is it ok for now. Yet, for an employee who is working for 2-3 years feel the
percentage increase in wages is the low cause of inflation.
Q: How do they compare to think it is low?
A: They told me that workload is the same but work in nightshift will be affected their living life so that it
should be more allowance. In other companies, basic wages general is not higher than KC but there is
50

more allowance. The benefit at KC is good for example insurance, annual health check. Yet employee
wants to receive a salary in money monthly more than that. Q: How about a co-worker?
A: my team is teamwork. I think it is ok. We organized a farewell party together, it is fun.
Q: How about your team leader? Does he has a meeting with the team and deliver a
performance assessment?
A: the current leader is new so there is nothing to say. The previous leader is very good. I like the thing
that leader meet each team member to do performance assessment. They easily feedback for each
person. But Asset leader manages 3 machines so that they manage triple the number of employees
compared to the previous years-1 machine and they do not have time to meet each person.
Q: Could you share with me your opinion about what KC can do to make it better?
A: the target is increasing year-by-year will make newcomers fell stressful. The current employee with
more experience at KC may be used to it. In my opinion, it takes time for them to get acquainted with it.
Besides that, Asset Leader and leader OP should have met and chosen enthusiast Lead OP to take care
of newcomer. In fact, there are some Lead Ops do not have the enthusiasm to have, sometimes they
scream newcomers and make them hurt.
In addition, when there is a new vacancy, everyone is happy to apply but actually, the manager has their
decision. So, the interview is just documented validation. It is not necessary.
Q: I will note that. There is anything you want to share?
A: I think it is enough. I like KC environment but I have my own business so that I want to focus
to develop it.
Name: Pham Ngoc Tu
Position: Operator
We would like to express our respectfulness to your sharing today. Wish you have a nice day. Thank you
very much
Interview 3
Introduction
free to respond.
51

R= Respondent
Questions
A: KC environment is good, teamwork, safety. But the target is going to increase make people stressful.
With the same position, I can work comfortably more than at KC. The operator at KC desired more skill
but equal salary.
Q: which company do you compare with?
A: My friend work at A company as an operator. This job is the same as me but he doesn’t work as much
as me. When the problem happens, the operator has to solve right away if not waste ratio will be
affected by the performance of the shift. Besides, there are many newcomers so that they do not have the
experience to solve the problem. Some even do not dare to fix the issue.
Q: Why don’t you raise to team leader to get support?
A: How can he support? Asset leader manages 3 machines now and there are many newcomers to
each machine. Therefore, he cannot move a person from this machine to support that machine.
Q: if you were leader what will you do?
A: I think that we have to minimum projects to have time to train newcomers or increase salary for
an operator position.
Q: How do you think about your career opportunity?
A: I have worked for 8 years at KC and got 1 promotion recently to operator level 1. I think it is too long
for the promotion. Recently, there is a lot of promotion for the operator from level 0 to level 1 but they do
not know the reason. I think it may come from the high turnover rate.
Q: I think your leader does not communicate clearly to his team member and make you all misunderstand
about the process. I will note and inform the manager level to make clear this for everyone. So, what are
the factors affecting your decision to leave?
A: Actually, I got a new job as an electrical technician. I will work daytime and a higher salary. This is
an opportunity for my career.
Name: Bui Nhut Qui
Position: Production Operator level I
52

We would like to express our respectfulness to your sharing today. Wish you have a nice day. Thank
you very much
Interview 4
Introduction
free to respond.
R= Respondent
Questions
A: KC is the first company I work after graduated from college. I have to think so much to make the
decision to leave.
A: people are friendly, teamwork. Safety is the most important thing and there is a safety person walk
around to check. Sometimes, I felt not comfortable but I think it is a good thing to keep everything safe.
Besides that, I learn many things from KC. When I graduate I did not have any concept about real work.
Joining KC is a chance for me at first step.
Q: How about co-workers?
A: They support me in the beginning and now I can do any position on my machine. But each person
has their own personality, some people are friendly but some are aggressive. Overall, it is ok.
Q: What is the thing you dislike or think that KC should change?
A: I do not have any ideas. Yet I heard my experience co-workers said that the target is higher much
more than the previous year. They work comfortably in past time.
Q: What are the factors affecting your decision to leave?
A: Actually, KC has a career ladder but it is not clear about the promotion process. There is a rumor
related to the interview process for internal transfer is just document validation. Managers choose persons
already. In the other hands, I want to look for a new job with a higher salary. Because KC has system
53

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