Luận Văn Neffective Performance Appraisal Method At Xyz Vietnam.doc

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Nguyen Thi Diem Thu
INEFFECTIVE
PERFORMANCE APPRAISAL
METHOD AT XYZ VIETNAM
MASTER OF BUSINESS ADMINISTRATION

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Nguyen Thi Diem Thu
INEFFECTIVE
PERFORMANCE APPRAISAL
METHOD AT XYZ VIETNAM
MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: Dr. THU PHAN

CONTENTS
ACKNOWLEDGEMENTS ............................................................................................ 1
EXECUTIVE SUMMARY ............................................................................................. 2
CHAPTER 1: INTRODUCTION.................................................................................... 3
1.1. Overview of auditing and tax service field ........................................................ 3
1.2. Company’s background ..................................................................................... 5
CHAPTER 2: PROBLEM IDENTIFICATION.............................................................. 8
2.1. Company’s context and general symptoms: ...................................................... 8
2.2. Initial identification of problems: .................................................................... 10
2.3. Tentative problems ........................................................................................... 15
2.3.1. Ineffective task assigning method ............................................................. 15
2.3.2. Lack of training ......................................................................................... 16
2.3.3. Raising of competitor ................................................................................ 17
2.3.4. Ineffective performance appraisal method: ............................................... 17
2.4. Problem justification ........................................................................................ 21
2.4.1. Definition of ineffective performance appraisal ....................................... 21
2.4.2. Justify the existence of the problem .......................................................... 22
2.4.3. Justify the importance of the problem ....................................................... 23
CHAPTER 3: ALTERNATIVE SOLUTIONS............................................................. 24
3.1. Causes validation: ............................................................................................ 24
3.1.1. Unclear performance criteria and structure: .............................................. 24
3.1.2. Lack of rating skills in conducting performance appraisal: ...................... 24

3.1.3. Unfair rating from rater:................................................................................................. 25
3.1.4. Ineffective feedback to employees:........................................................................... 25
3.2. Alternative Solutions................................................................................................................ 26
3.2.1. Alternative solutions for unclear performance criteria and structures....... 27
3.2.2. Alternative solutions for lack of rating skills in conducting performance 30
3.3. Action Plan................................................................................................................................... 33
CONCLUSION............................................................................................................................................ 38
REFERENCES ............................................................................................................................................ 39
APPENDIX 1: Transcript of interviews.......................................................................................... 47
APPENDIX 2 ............................................................................................................................................... 67

Figure 1: Top 10 Auditing firms with the highest total revenue in 2017 .................. 4
Figure 2: Operation structure of XYZ Vietnam........................................................................ 6
Figure 3: Top 10 Auditing firms with the highest total revenue from tax services
................................................................................................................................................................................ 7
Figure 4: Initial Cause-effect Map................................................................................................. 14
Figure 5: Updated causes-effect map........................................................................................ 20
Figure 6: Final cause - effect map................................................................................................ 23
Figure 7: Solution Map......................................................................................................................... 27
Table 1: Performance of teams in 2018....................................................................................... 8
Table 2: Stress condition of employees 2018....................................................................... 10
Table 3: Rate of achieved revenue in 2016, 2017 and 2018 ...................................... 10
Table 4: Number of customers terminating and signing service contract........... 13

ACKNOWLEDGEMENTS
I would like to express my very appreciation for two years study in ISB Ho
Chi Minh City. Besides, I would like to offer my special thanks to my research
supervisor, Dr Thu Phan for her patient guidance, valuable and constructive
suggestions and her assistance in keeping my progress on schedule.
I would also like to extend my thanks to my family and my classmate in MBUS
7 class for their support and encouragement throughout my study.
1

EXECUTIVE SUMMARY
This thesis is conducted to analyze the problem of XYZ Vietnam. The symptom of
the Company is large different of achieve ratio between teams. The thesis is consisted of
three chapters which are company introduction, problem identification, and alternative
solutions. The thesis also contains supporting information.
In Chapter 1, there is an overview of auditing situation in Vietnam and the
background of XYZ Vietnam as well as pay attention to the tax team of the Company
The chapter also has figures as supporting information
In Chapter 2, the thesis discuss about the identification of problem of the Company.
Through data of the company as well as interview information, the central problem of the
Company which is ineffective performance appraisal has been addressed.
The Chapter 3 is about causes and alternative solutions. In this scope of thesis, the
causes which are lack of rating skills in conducting and unclear performance criteria and
structures will be selected as major causes for the central problem. Rating scale will be
chosen for unclear performance criteria and structures and Coverdale training will be
chosen for lack of rating skills. An action plan to implement the solutions is made for the
Company. In order to conduct this plan, it will cost the Company about VND 31,000,000.
The result will be observed and analyzed in order to improve the performance appraisal
of the Company so that team performance will be accurately evaluated
A Conclusion will summarize all of our thesis and our purpose in doing this thesis.
The last part will contain information to support the thesis such as interview
questions and answers.
2

CHAPTER 1: INTRODUCTION
1.1. Overview of auditing and tax service field
History of Auditing firms in Vietnam
The audit history of Vietnam dates back to the 1991 when the first two local
firms, namely VACO (Deloitte) and AASC were established in response to the
changes in Vietnam economy from a centrally planned to an open market economy.
According to statistics of the Vietnam Association of Certified Public Accountants
(VACPA) from 1991 to 2005, the market for independent auditing services has nearly
150 qualified auditing firms, with nearly 11,000 employees working at audit firms
across the country.
In 2016, the process of "purification" takes place so that the independent audit
market develops. Auditing firms which are small, weak performance, and cannot
meet the strict requirements for service provision will be M&A or dissolve. The
number of audit firms will lower but more quality.
The latest statistic of the audit professional organization also shows that in 2014, the
total revenue of the independent auditing industry reached 4,583 billion VND, in
which the main services of auditing firms which are auditing and financial reporting
services have reached 2,329.76 billion VND, accounting for 50% of the total revenue
of the whole sector, the rest are belonged to other services. In 2015, revenue of the
independent auditing sector reached more than 5,000 billion VND (1)
According to Vietnam Association of Certified Public Accountants (“VACPA”),
top 10 auditing firms that have the highest revenue in 2017
3

Figure 1: Top 10 Auditing firms with the highest total revenue in 2017
In 2018 and following years, there are increasing positive forecasts for growth in
foreign investment, healthy financial market, increasing in number of listed and public
companies. Furthermore, there will be more M&A and equitization activities as well as
major changes in auditing and accounting regulations. At the same time, the
Government will make a decision regarding the application of International Financial
Reporting Standards in Vietnam. This will be a foundation for the strong development
of auditing and accounting sector in Vietnam for the following years. (2)
Therefore, in the coming time, in order for the domestic audit firms in particular
and the market of independent audit services in general to be able to develop quickly
and sustainably, meet the requirements of innovation, integration, competitiveness, the
following solutions should be addressed
Tax services field in Vietnam
Since July 2007, along with the unified and integrated implementation the self-
declaration and self-apply, the establishment of Law on Tax Administration has set up
the regulations for tax services. Tax payer can sign contract with tax agents to receive
tax services.
However, the tax service market in Vietnam has not really developed. The
number of enterprises providing tax services to date is too small compared to actual
4

requirements, only equal to 0.021% of enterprises that conducting declaration
activities managed by Tax Authorities. In which, the majority of small-scale
enterprises, both in terms of business capital and the number of employees who have
practice certificates as tax procedure services, have affected the ability to conduct high
value consultancy contracts and the chance to provide services to big firms (3).
Vietnam’s General Department of Taxation had issued Official Letter 5339/TCT-
TT in November 2017 directing local tax offices to create a tax audit plan for 2018.
Taxation is a major component of the state budget revenues and as the country’s
budget deficit increases, taxpayers and enterprises will continue to face increased
scrutiny from tax authorities trying to meet their revenue targets.
1.2. Company’s background
XYZ Vietnam is one of the leading mid-tier accounting and advisory firms in
Vietnam, which was established in July 2001. XYZ Vietnam has become a member of
XYZ network since August 2012. Under its core purpose of being the firm of choice
for growing businesses looking for high quality and personalized services, XYZ
Vietnam assists clients in achieving their goals through audit, tax, advisory and
outsourcing services. XYZ Vietnam has more than 200 professionals and staff serving
mid to large public-listed, multi-national and private companies in various industries.
XYZ Vietnam serves clients worldwide as an independent and highly integrated
member of the XYZ network which is ranked among the top 6 global accounting
networks with more than 41,400 people in 120 countries around the world.
XYZ Vietnam was founded by the group of the certified public auditors (CPAs)
and accredited consultants, who had worked in the field of the auditing and consulting
since the very first days of this industry in Vietnam. With these advantages, XYZ
Vietnam has possessed the valuable manpower resources to confidently provide
professional services requiring full understanding of Vietnam business climate and
with international quality standards.
History Timeline
2001 XYZ Vietnam was established
5

2010 Total employees close to 150 people
2012 Established Hanoi Branch
2015 Established Da Nang Branch
2016 The Company reached USD 1 million in profit
2017 – Now Provided services to many big international firms
Structure
General Director
Deputy Director Admin and HR Deputy Director
Department
Audit Team 1 Audit Team 2 Advisory Team 1 Advisory Team 2
SM Vietnam Figure 2: Operation structure of XYZ Company Limited
Tax department
XYZ Vietnam understands that the tax issues are the focal point of all public
concerns, the Company provides tax advice as top priority to meet clients' need for
their desired effectiveness. With our personnel's expertise experience and knowledge
of tax issues in Vietnam, the Company maintains good relationships with the central,
city and provincial tax authorities in the interest of clients
XYZ Vietnam helps its clients with effectively planning and dealing with taxes
imposed on individual entities and assist clients in attaining their goals and reducing
unfavorable tax effects on business transactions.
XYZ Vietnam offers high quality and effective tax services. Some of them are:
 Tax health check
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 Tax risk management

 Tax retainer

 Tax audit assistance

 Tax review and tax filing assistance

 Application for tax incentives

 Tax structuring

 Reviewing client tax returns

 Preparing tax returns for individuals who should file returns directly

 Working with tax authorities on behalf of clients

 Assisting clients in tax planning
According to Vietnam Association of Certified Public Accountants (“VACPA”),
XYZ Vietnam is ranked at 6th
place out of the top 10 firms that have highest total
revenue from tax services:
Figure 3: Top 10 Auditing firms with the highest total revenue from tax services
Tax department is the important department in the Company. Tax Department
provides many professional services to big firms, brings in so much profit and clients
to the Company. The profit which is earned from this Department is about 50% of the
total profit of the Company.
7

CHAPTER 2: PROBLEM IDENTIFICATION
2.1. Company’s context and general symptoms:
The tax department of XYZ Vietnam usually brings higher profit than the audit
department. Although it shows that the tax department is in a good condition, however
the tax department also has a difficult matter to solve. There is a big difference in
achieving target profit between tax teams. Some teams will achieve their target profit
quickly, but it is also a different story for other teams. Beside, in 2018, based on the
estimated reached revenue, it seems that the possibility to achieve the estimated target
profit in 2018 is not feasible compare with previous years because the rate of
achieving target profit of teams is about 50% for this year. The above ratio in 2016,
2017 is 71% and 85% respectively.
The target profit will be set up at the beginning of fiscal year and based on the
growth rate every year of the Company and teams. In accordance with the needs of
development of the market, the increasing of investment from multinational enterprises
into Vietnam, and the demand to develop services of current clients, the board of
directors believes that the growth rate will be stable in 2018. The growth rate is
calculated based on average growth rate of nearest 5 year of Department. Furthermore,
based on the nature of the company, the target profit of a team is expressed by per
member of that team. The target profits of each team in fiscal year of 2017-2018 are as
follows:
Table 1: Performance of teams in 2018
No. of
Quarter
% Achieved Revenue/
Target Total
employees 1 2 3 4 employee
Team 2
337,434 11 77,002 151,323 99,948 81,795 410,068 122% 34,172
Team 3
508,005 16 102,540 127,800 97,513 134,976 462,829 91% 28,927
Team 4
302,207 10 56,501 111,384 61,544 76,133 305,562 101% 27,778
Team 1
263,015 8 21,677 67,659 71,727 40,356 201,419 77% 28,774
Team 5
226,192 7 30,192 23,093 30,164 28,407 111,856 49% 18,643
Team 6
330,018 10 24,963 29,367 65,260 35,788 155,378 47% 19,422
Team 7 305,915 10 34,614 57,608 40,753 62,513 195,488 64% 17,772
8

The progress of achieving target profit above is recorded up to quarter 3 of fiscal
year because the fiscal year of the Company starts from October and ends at 30
September. The data of quarter 4 will be estimated basing on the profit of last year
quarter 4 times the growth rate of the Company (i.e the growth rate used to calculate
estimated revenue of 2018). The total number of employees of each team used to
calculating target revenue is recorded at the beginning of the fiscal year. However,
because of staff turnover, number of member of each team will be calculated based on
the average number of employee of every quarter. The number of employees is quite
constant. Hence, we believed that above adjustment does not significant effect to the
final analysis.
From the data above, there are a few teams that have good progress and others
are struggling to achieve their target profit. There are two teams that perform very
effective and go over their target profit. The difference in achieving target profit will
greatly affect the Company’s operation and work ethic of employee.
Pressure caused by not achieving target profit will lead to stress. Because
employees will have to go under stress condition when they want to achieve the target
profit of their teams. However, even after trying their best, teams that have low
achieve ratio may be deemed as weak team by teams which have high achieve profit
ratio. Stress will cause employees to not be able to perform at their best ability, which
will leads to low productivity and performance (4). Furthermore, stress will affect the
motivation of employees. More stress will result in low motivation (5). It is also affect
the performance of team and lower motivation. Low motivation will lead to poor
performance because employees who lack motivation will not care about the quality of
their works (6). Employees who have low motivation will create negative effect on
company income, productivity, financial competitiveness and organizational objectives
(7).
To further explore the causes of stress in tax department, we have conducted an
small survey for all employees. The table below showing data of the stress condition of
employees from difference teams:
9

Table 2: Stress condition of employees 2018
Team
Stress caused by Stress caused by Stress caused by
workload target profit colleague
1 58% 28% 14%
2 67% 19% 14%
3 62% 24% 14%
4 67% 19% 14%
5 55% 37% 8%
6 48% 42% 10%
7 55% 30% 14%
Besides, the ratio of achieved revenue of teams in 2016,2017 and 2018 is show
as below:
Table 3: Rate of achieved revenue in 2016, 2017 and 2018
Team 2016 2017 2018
1 80% 80% 77%
2 101% 110% 122%
3 89% 92% 91%
4 97% 95% 101%
5 70% 66% 49%
6 55% 60% 47%
7 77% 76% 64%
From above information, it is shown that the low achieved ratio of revenue in
some teams will lead to large difference of achieved ration between teams. Then,
lead to low performance of employees as well as the productivity of Company.
2.2. Initial identification of problems:
From above results of each team, we divided employees into 2 group based on
the percentage of achieving target revenue. One group included teams who have
10

reached above 90% of target (i.e. team 2, team 3, team 4). One group included teams
who have reached less than 90% of target (i.e. team 1, team 5, team 6, team 7).
Based on above divide, we further explore the problem by depth interviewing the
employees from above teams and the general leader of tax department. Hence, have 3
groups of interviewing as below:
The 1st
group is employees from group A: Ms Bui Thi Tuyet – supervisor, Ms
Le Thi Giang Huong – supervisor, Ms Pham Thi Tuyet Nga – staff
The 2nd
group is employees from group C: Ms Dau Minh Phuong – supervisor,
Ms Nguyen Thi Bich Thuy – staff, Mr Vu Le Minh – supervisor
The 3rd
group is Mr Lam Le, General Manager of Department
By grouping employees we want to record the opinions of employees who have
different performance and find out the reason of these differences. From the initial we
have identified these following problems:
Conducting interview of above groups we have a common opinion that the work
nature is not the same between teams. Besides the target revenue is based on a same
measurement, it is the reason leads to differences performance between teams as Mr
Minh and Ms Phuong said. Ms Tuyet said that based on the service of each team, the
number of employees as well as revenue getting from them will be different. For
example, in these years, the demand of customer for Transfer pricing report is quickly
increase. It leads to the number of customer in this service higher and bring more
revenue for team 2. However, it still leads to heavy workload in her team. This is the
same as Ms Nga’s opinion. She also said that she had work a lot and her team is lack
of employee. Although her team can catch the target, however, heavy workload leads
to dissatisfaction and she is intending to quit the job if there aren’t any changes. Mr
Lam is also paying a lot of attention for the heavy workload of each team. Sometimes,
he needs to arrange employee from different team to join with team which is lack of
man power in order to help that team to provide service to clients. Mr Minh and Ms
Phuong have both agree that the Company needs to recruit more members to their
teams because they are now in short of manpower. Ms Phuong and Ms Thuy said that
the more members her team has, the more clients that her team can handle. It will help
their team to earn more profit to achieve target that has been assigned to her team. Mr
11

Minh said that his team will need to have more members in order to effectively
conduct service to clients. The lack of manpower will slow down the service progress
because one employee will not have enough time to finish if there are many services
placed on him/her. However, the lacking of employees is not occurred in Group 6 and
Group 1. Ms Nga said that it may be caused by ineffective human assigning between
teams.
In order to earn more profit to achieve target, it is very difficult with team that
has only one type of services. Mr Minh said that his team’s service is to provide tax
guidance or answer for any tax queries from clients. Although it is a monthly service,
the fee is not high to help the team achieve target. Mr Minh wants the team to provide
more services in order to generate more profit, however the team does not have
experienced employees for other services since the quality of serving the client using
these service is not high. Mr Lam states that although the team of Mr Minh has only
one service, its role is to support other team in providing effective tax guidance. The
problem here is that it is very difficult to effectively distribute the profit of the
provided service to Mr Minh’s team. Ms Thuy and Ms Phuong agreed with Mr Minh’s
points on unable to achieve target profit due to having only one type of service. Her
team is specializing in accounting service. The service cost her team a lot of time to
conduct while service fee is not quite high due to its nature as a monthly service.
Furthermore, although Mr Phuong’s team has stable clients, the fact that they are all
long-time clients result in unable to increasing the service fee.
Performance appraisal will be conducted at the end of fiscal year, which is the
end of September. Mr Lam said that he usually finds appropriate method to effectively
appraise the performance of every teams. However, it seems to be a difficult task
because interviewees all agree that the performance appraisal method does not
measure correctly the teams’ actual performance. Mr Minh and Ms Tuyet said that the
performance appraisal method is lacking of some elements to measure their works
such as there are no element to the time used to meet client to provide guidance/advice
before they approving services. Ms Huong and Mr Minh stated that their aim is to have
a good performance appraisal for their teams. Besides, the managers will base on the
performance appraisal to decide the bonus and promotion at the fiscal year. For Ms
12

Phuong, she said that the performance appraisal is the big problem for her. If the
managers based on the achieve target profit ratio to appraise employees effort, she is
afraid that her bonus and promotion will be affected. Ms Phuong and Mr Minh have
put in a lot of effort to effectively services to clients however, due to the nature of their
teams, their effort are somehow not benefit them so much against the appraisal from
managers. Mr Minh, Ms Phuong. And Ms Thuy stated that their motivation is lower
because the performance appraisal does not correctly measure their performances. She
also said that it is caused by ineffective bonus/promotion policy as same as Mr Lam’s
idea.
Ms Thuy and Ms Phuong said that one of reason leads to low revenue of their
team is losing customers. This information is also confirmed by data recording number
of clients accepting and terminating service contract in 2018. The detailed data is as
below:
Table 4: Number of customers terminating and signing service contract
Year 2016 2017
Number of customers terminating contract 20 Customers 50 Customers
Number of new customers signing contract 78 Customers 57 Customers
As Mr Lam said, the major of clients who terminate the contract belong to team 6
with 16 clients. Team 5 and team 7 have 8 and 7 clients terminating contract
respectively. Other teams have number of clients terminating contract is less than 5.
When asking about the reasons for decreasing number of clients, Mr Lam said
that the reduction of customers is mainly due to the cease of operation of customers,
not because of changing service providers. The rate of clients use XYZ services again
remains above 70% per year.
Base on the aforesaid review, the initial cause - effect map are as follow:
13

Different nature of
services between
teams
Performance appraisal
is not reflecting the
actual performance
Ineffective
wage/promotion
Ceasing of operation
of customers
Different
workload
between teams
Shortage of staff
in some teams
Decreasing
client in some
teams
Organization
Symptoms
Large
difference
of achieved
ratio
between
teams
Low
achieved
ratio of
revenue in
some teams
(most of
teams has
ratio below
100%)
Figure 4: Initial Cause-effect Map
14

2.3. Tentative problems
2.3.1. Ineffective task assigning method
It is sated that a reason of lack of efficiency in business is ineffective task
assignment to employees (8). The company will fall into a difficult stage if assigning
inaccurate work to individual or team that cannot perform them effectively. Each team
in a company will be difference in number of members as well as the operation, hence
in order to ensure that a company can have effective function, the suitable work
assignment is the key element (9). Furthermore, by forming a team with people from
different groups, it will allow team members to receive experiences and knowledge of
one another as well as effectively approach issues to provide quality services to clients
(10).
It is very important for the Company to assign right work to right person. Mr
Lam said that every tax team had its own specialized services. Each group developed
one key service beside other service. Mr Lam believes that it will help a team to make
use of its knowledge about specific service to ensure that the clients will receive high
quality services. However, it does not have very clear assignment for each team based
on their professional. The work assignment is still based on Clients. One group will
take care one client with many services, the service cross-sell to another group has
better knowledge is still occurred. It helps the Company to provide quality result to
client.
Ms Tuyet and Mr Minh also said that the distribution of works in accordance
with the characteristics of each team bring more efficiency for the working result. At
the same time, the cross-selling between each team is effectively and ensure to provide
any types of service when there are requests from clients.
In addition, Ms Huong also confirmed that the shortage of manpower is only
temporary, not regular problems. And to solve that problem, teams have also carried
out the exchange of team members to assist team that is under work overload.
However, the time spent by a member to help another group is not included in the
revenue of allocated team.
Mr. Lam also stated that when a group appears to be overloaded with regular
work and lack of manpower, the company will recruit new staff to solve the problem.
15

Hence, the lack of manpower is not a regular occurrence and not a serious problem the
company is experiencing.
Regarding the specialization of each team which lead to the difference in nature
of services of each team resulting into different workload of each group, when
assessing on the overall performance of the Company, specialization helps ensure the
quality of results as well as ensure professionalism in serving customers of the
company. According to the current statistics on the level of satisfaction of customers,
the result of service provided of the company is highly appreciated. Therefore, the
specialization is not the problem the company is.
Lack of ineffective task assigning method is not quite the issue which greatly
affects the company at the moment. Besides, the current task assigning method is
created base on the nature of the company through many years. Hence, if it is selected
as central problem, it will require a huge amount of time and effort to deal with.
Furthermore, Mr Lam has already taken actions to increase the effectiveness of task
assigning.
2.3.2. Lack of training
The satisfaction of customer is effected by quality of services and its final effect
on customers’ repeated purchases. And in fact, those loyal customers who purchase
repeatedly are considered as the base of any business (11).
In addition, Crotts believes that the customers satisfice based on both products
with good quality and good service. Hence, the company should improve service
quality to gain more customer satisfaction. Then will improve the whole performance
of enterprises (12).
If there is not much training in a company, there will be a lot negative effect. It is
said that employees who do not receive much training will provide low quality service
which will increase the cost of compensation to clients as well as cause clients to
choose another service firms. On the other hand, frequently training will help
employees to develop varieties of skill which will make them work more efficient
(13).
Training is very important as XYZ Vietnam. Mr Lam said that if a firm is lack of
training, employees cannot provide effective services to clients. Sooner or later, clients
16

will see no value in that firm and left it to find another competent firm. Ms Tuyet said
that clients will find another service firm if we can meet their requirements on quality
Hence, interviewees are all worry that without training, they cannot be able to provide
quality services to clients and let them keep using the Company’s services. As Mr
Minh said the training content is tailored for every class of employee. Trainer is
usually a manager who has many experiences related to the training topic. Besides
training for knowledge in specific services, employees of tax department usually
receive training for soft skills. Ms Phuong said that she is able to provide quality
assistance to clients because of the knowledge from training.
Training is no doubt a major element of XYZ Vietnam. The Company has
operated many training programs for employees. Although it cost employees quite an
amount of time to participate, the result from training programs is satisfying. Hence,
training is not a major problem of XYZ Vietnam. In fact, by having many training,
employees have been able to satisfy requirements from clients.
2.3.3. Raising of competitor
It is started a large survey of six industries and verified the direct linear effect of
SQ perceptions, customer satisfaction, and value, on behavioral intentions. A major
result in their study was that service quality perceptions generate greater impact than
price in determining value. Customers value the quality of service rather than the cost
of that service (14).
A company should identify and capitalize on their strengths to compete their
competitor, then improve their competitive strategies to increase their market share
(15). Beside, it is believed that the amount of competition and the conduct of
competitors impact the customer satisfaction, and that rivals’ customer satisfaction
impacts a firm’s sales performance (16).
However, as statictis of VACPA, XYZ usually stay at the top 10 best audit firms
in Vietnam and this position is gradually increased by years. Hence, Mr Minh said that
the reason of competition for clients is not appropriate.
2.3.4. Ineffective performance appraisal method:
If the company is having an ineffective performance appraisal method, it will
suffer with confusion and ineffective work performance from top management to
17

bottom of employee level. Performance appraisal can decrease the motivation of
employee (17). Performance appraisal is a procedure where the manager rates
employee base on his/her performance (18). Employee will feel unhappy when they
are reducing to a “number” in the performance appraisal result as stated by (19).
When asking interviewees about what is the current problem of the Company, all
interviewee agree that the answer is about the performance appraisal. Ms Nga and Ms
Phuong said that they are worry because the performance appraisal will not be able to
evaluate their actual works. All of the evaluation criteria in the performance appraisal
are not enough for them to show the higher up their performances throughout the fiscal
year. Mr Minh and Ms Huong also do not like the performance appraisal method
because it is related to wage raise but it cannot reflect their actual effort.
When asked about the issue of performance assessment, Mr Lam commented that
the current assessment process is primarily based on the revenue of each team to assess
whether team’s performance in the year is effective or not. The current appraisal form
does not reflect the works such as finding clients, promotion, advisory for client
conducted by some teams, typically group 5 and 6.
According to Ms Thuy, for services which bring in little profit such as
accounting, the workload is quite heavy. However, it is unreasonable to assess that her
team performance is low. Furthermore, for audit firms, accounting services is not only
important but also for maintaining clients and bring in clients for other services.
In addition, low assessment and heavy workload cause Ms Phuong and Ms
Thuy uncomfortable. They think that their works bring in revenue and clients to other
team however after the performance appraisal, other teams get higher evaluation which
cause them to feel unmotivated. Especially, the assessment also affects the promotion
and salaries, so Ms Phuong and Ms Thuy found that the assessment is a big problem.
To sum up, after analyzing all of the information provided from the interviewees
as well as theories, the central problem of the company is detected. Ineffective task
assigning is not quite a major problem to the company because there are adequate
solutions for it. Lack of training is not a central problem. The company has developed
many types of training to mitigate the worries of its employees of not having enough
knowledge to provide quality service. Furthermore, as mentioned above, the price is
18

not factor affecting to competitive strength of company. Mr Lam also stated that XYZ
Vietnam will spent more on marketing in order to reach many clients to reduce the
losing clients situation caused by the harsh competition from many firms Employee is
a valuable asset of a company. When having high motivation, employees can improve
the quality of their performances. An issue that can significantly affect employees in
negative ways is performance appraisal. Through the aforesaid information, ineffective
performance appraisal is a central problem of XYZ Vietnam.
Based on above information, the updated cause-effect map is as below:
19

Potential Central
Problems
Ineffective task
assigning
method
Ineffective
performance
appraisal
method
Lack of training
Different nature of
services/member
between teams
Poor performance in
some teams
Ineffective
wage/promotion
Low motivation of
employees in some
teams
Performance appraisal
is not reflecting the
actual performance
Low satisfaction of
customer
Low quality of
services
Raising of competitor
Ceasing of operation
of customers
Different
workload
between teams
Shortage of staff
in some teams
Decreasing
client in some
teams
Organization
Symptoms
Large
difference of
achieved
ratio between
teams
Low
achieved
ratio of
revenue in
some teams
Figure 5: Updated causes-effect map 20

2.4. Problem justification
2.4.1. Definition of ineffective performance appraisal
Performance appraisal is a method that compares the employee’s actual
performance to standards and comment on the result of the evaluation (20). It is stated
that performance appraisal is the method where the manager will annually assess the
performance of employee (21). The effectiveness of performance is effective in
offering a comprehensive analysis of the employees’ performance and reflective of the
employee‘s actual performance (22). Hence, an ineffective performance appraisal is
method which cannot meet the above qualification. Organization will have good
business activities if it has effective performance appraisal system, however ineffective
performance appraisal system can put an organization in confusion and chaos (17). It
is stated that ineffective performance appraisal will negatively affect the morale and
relationship of an organization (23).
According to (41), the effectiveness of performance appraisal can be evaluated
through two broad perspectives:
 Are we doing things right?
 Are we doing the right things?
From the first question, the management of a Company can determine whether
the performance appraisal is in accordance with system, regulatory, and program
requirements. If the performance appraisal is not operated according to the initial
requirements, the chance of accomplishing the reasons for its implementation will be
little.
In order to determine the effect of the performance appraisal’s result,
management can depend on the second question. Possible criteria for assessing the
results of a performance appraisal can be determined through these following
questions:
Questions Effect
Are the planned objectives of the
Management can receive information
related to the goals and report results in
appraisal program being accomplish
accordance with goal achievement by
Are employees and managers satisfied The effectiveness and success of the
with the performance appraisal performance appraisal can be determined
21

by the opinion of the raters, managers,
and employees
Do the benefits of the performance
Costs of the performance appraisal could
be cost of developing and cost of
appraisal outweigh the costs
implementing
Are there any improvement in the
The effectiveness of the performance
appraisal have a connection with the
performance of employee
performance of employee
Has the behavior or the attitude of The performance appraisal will be
employees or managers changed as determined as success if there is a change
desired in the attitude and behavior as desired
If there are any different treatment,
managers should determine if appraisal
Are there signs of different treatment in contents are causing the lack of balance in
the results of performance appraisal the ratings or if there is a larger problem
in the organization that is surfacing
through the appraisal process
Has there been an improvement in the
Managers can determined the success of
the performance appraisal by looking at
efficiency or the effectiveness of related
the connection between the performance
human resources programs
appraisal and human resources
2.4.2. Justify the existence of the problem
In order to justify that the existence of ineffective performance appraisal, this
part will go through academic theory and interview results.
It is stated that employees will tend to leave the company if they think that the
performance appraisal is ineffective or bias (24). A Company that has ineffective
performance appraisal will show these following problems: low motivation on
employees, low productivity, weak relationship between managers and employees,
negative attitude (25).
In order for the performance appraisal to be effective, both the rater and rate will
have to be willing in doing it, however, managers usually do not like to conduct
performance appraisal (26).
Mr Minh is dissatisfied with the bias evaluation from the managers. He thinks
that managers usually favor employee who have worked for them many times and
neglect the performance of other employees. Ms Phuong agreed with Mr Minh’s
opinion. She is afraid that the performance appraisal will be ineffective because
managers will be bias in their evaluation. Mr Minh and Ms Phuong feel that their

22

morale will be effected in negative way. Ms Nga said that her leader was unfair when
conduct performance appraisal for her last year. Although she worked over time a lot
as well as willing to go oversea to provide services to client, her team leader did not
put a good comment on her performance appraisal. As the result, Ms Nga did not
receive the double promotion like she expected. Ms Nga stated that she will not
volunteer for taking any difficult job or go oversea until she receives what she
deserves.
Through the aforementioned information, it is justified that ineffective
performance appraisal is currently an issue in the Company.
2.4.3. Justify the importance of the problem
Performance appraisal is used to evaluate and assess the work performance as
well as commitment of employee (27). The purposes of performance appraisal are to
motivate employees as well as assist manager in evaluating their performances (28). It
is stated the same idea where the fundamental objective of performance appraisal is to
provide information for manager’s decision relating to increase wages or promotion.
Performance appraisal can decrease the motivation of employee. Performance
appraisal is a procedure where the manager rates employee base on his/her
performance (18). Employee will feel unhappy when they are reducing to a “number”
in the performance appraisal result (19).
Hence, the final cause - effect map is as follow:
Organization Symptoms
Central Problems Ineffective wage/promotion
policy
Large difference
Ineffective performance
of achieved ratio
Low motivation of
between teams
appraisal method employees in some teams
Performance appraisal is
not reflecting the actual
performance Low achieved
ratio of revenue
in some teams
Figure 6: Final cause - effect map
23

CHAPTER 3: ALTERNATIVE
SOLUTIONS 3.1. Causes validation:
Performance Appraisal is the procedure to evaluate the effectiveness of
employees. However, performance appraisal often lacks its usefulness because of
indirect or direct issues. Some of them are as follow:
3.1.1. Unclear performance criteria and structure:
It is stated that in order for the performance appraisal to be effective, objectives
and criteria which company wants to have must be determined first (29). The
performance appraisal will be ineffective if there are no clear criteria established to
judge performance of teams (26). It also help to more focused management action as
well as providing a clearly defined basis for rater.
As previous interviewed with Ms Phuong and Ms Tuyet, the current appraisal
system is not effective because it only focuses on the revenue of each team but does
not have a clear assessment on the performance as well as revenue earned by
supporting other team to perform services or to find clients. Mr Lam also realized that
focusing solely on revenue to assess the performance of each team is inadequate and
can lead to some teams being underestimation. Therefore, it is necessary to restructure
and re-evaluate the appraisal form.
3.1.2. Lack of rating skills in conducting performance appraisal:
It is stated that the end of the performance appraisal will not be appropriate if
raters do not hold rating skill and knowledge. In order to evaluate employee, rater will
need to have special knowledge, ability, and observation skill to judge the performance
of employee. The rating skills in conducting performance appraisal can be
distinguished on various elements: use of a rating scale, development, amount and
kind of information which is yielded, purpose of the rating (30).Training for
performance appraisal should be conducted frequently for managers in order to
provide them with fresh ideas or any changes to the process of evaluating.
When asking about how well manager level received training on performance
appraisal, Mr Lam said that the Company hardly ever hold any meeting regarding this
subject. Mr Lam thinks that the performance appraisal based on revenue of each team
which has been used for many years is enough to evaluate performance of each team.
24

Regarding this issue, Mr Minh said that there are a few things that should have been
updated or included in the performance appraisal to reflect their actual work more.
3.1.3. Unfair rating from rater:
Bias in performance appraisal is quite a problem since it affected decision
making such as promotion (31). It is stated that the process of evaluating employees is
one of the most emotionally charged processes in management (32). There is a chance
that manager will bring in their personal feelings into the performance appraisal which
lead to ineffective appraisal.
Managers will be bias when conducting performance appraisal of a certain
employee if the managers like or dislike that employee (33). It is stated that employees
will get good evaluations when managers have positive view of them and bad
evaluations when manager do not think highly of them. Bias in evaluating performance
appraisal is quite an issue.
When asking interviewees about the bias from managers, they agree that the
company has this issue. Managers are quite favor with teams that have good achieving
target profit ratio and neglect the rest. Although the workload of teams are not much
difference, managers usually judge teams that have high achieving target profit ratio
are hardworking in order to bear the heavy workload. Beside, as Mr Minh said this
cause also comes from unclear performance appraisal format.
3.1.4. Ineffective feedback to employees:
Lack of feedback for the performance evaluation will create negative impact to
the motivation of employees and teams. It is stated that a meeting with employees and
teams to provide feedback for their performance appraisal is considered as learning
events which can help employees and teams to think about how they want to improve
their performance or in what methods they want to develop. Feedback is absolutely
necessary for organizational effectiveness and that many negative issues such as
anxiety as well as inaccurate self-evaluations will appeared because of lacking of
performance appraisal feedback (34). Adequate performance appraisal feedback will
provide many positive results such as enhance employee engagement, job satisfaction,
push teams forward, and motivation (35).
25

Ms Nga and Ms Thuy said that during the process of performance appraisal, their
teams will get a chance to meet directly with Mr Lam to discuss about their
performances. Mr Lam stated that by doing so, it will ensure that leaders of each team
will understand more about each team as well as generate effective improving methods
for them. However, an effective performance appraisal format has not been created.
In summary, all aforesaid factors are essential for the central problem of
ineffective performance appraisal method. However, in the scope of this thesis, the
causes which are unclear performance criteria and objectives in the performance
appraisal and unfair rating from rater will be selected as major causes for the central
problems.
3.2. Alternative Solutions
In order to effectively mitigate or solve the causes which are lack of rating
skills in conducting and unclear performance criteria and structures in the
performance appraisal, Mr Lam and HR department is looking for an appropriate
method. It is a need to find an adequate method to evaluate the performance of team
besides rely on revenue for assessment. In the scope of this research, rating scale
method and cost accounting method will be explored as well as an appropriate plan
to implement the most adequate method will be introduced.
The solution map is as below:
26

Potential Solutions Potential Causes
Rating scale Unclear Central Problems
method performance criteria
and structures
Cost accounting Ineffective
method
Unfair rating from performance
appraisal method
rater
Lack of rating skills in
Coverdale Training
conducting
performance
appraisal
Laboratory Ineffective feedback
to employees
Training
Figure 7: Solution Map
3.2.1. Alternative solutions for unclear performance criteria and structures
3.2.1.1. Rating scale method
Although rating scales method has been appeared for so long, it is still the most
popular method in performance appraisal. Rating scales method is a performance
appraisal method that assess team according to specific criteria. The rater can design
appropriate criteria to appraise ratee (36). It means that for issue such as revenue
which comes from supporting action of a team to other teams can have criteria to
evaluate. The structure of the rating scale method is quite easy to format and design
which can help rater to make a clear structure for appraisal the performance of rate.
Furthermore, raters can record their assessment on a scale. Each scale will range from
poor to excellent. The raters will review the performance level of each criteria and
compute the total score of ratee. The total score will be used to judge whether the
performance of ratee meet expectation of the rater or not.
Benefit of this method
Easy to use and need simple guidance or training
Low cost or no cost at all

27

Rater can freely design the criteria to use. The Company can create criteria
such as: taking part in providing service with other teams, clients introduce
to other teams, etc to effectively measure the performance of teams Can be
used in rating every aspect
Provide quantitative comparison
Provide simple method to communicate weaknesses and strengths
Restriction of this method
Rater may be bias when conducting the performance appraisal, however it
can be reduce with simple methods
Data variation
When being introduce to this method, interviewees have a lot of opinions for it.
Mr Minh and Ms Tuyet said that the criteria to evaluate revenue of this method can be
easy put in the appraisal form so that team performance can be effectively assess. Mr
Phuong said that by using this method, revenue comes from actions such as providing
clients, providing members to participate in services of others will be evaluated.
Furthermore, Ms Thuy and Ms Nga realized that the method is easy to conduct, need
little training and guidance, simple structure, and less time consuming as well as cost
effective. Mr Lam agreed with the aforesaid opinions of his employees. He shared that
raters may cause bias when conducting performance appraisal of team.
After hearing from the interviewers, a table for measure the effect of this method
is as follows (the scale will be from 0 to 10):
Easy to
Can be
Method Structure conducted in Cheap Bias Total
conduct
short time
Rating scale method 9 9 8 8 9 43
3.2.1.2. Cost accounting method
Performance will be traced and evaluated from the monetary returns yields to the
team or employee (36). It is also stated the same idea where the performance of team
or employee will be assess from the revenue return to the team or the company (37).
28

this performance appraisal, team performance will be the money value of its services.
The performance of team will be positive if the revenue they earn is more than the cost
and vice-versa. Furthermore, this method can help to evaluate the assistance of a
department to other department in an organization. For example the marketing
department will earn revenue for their efforts in finding clients for other department.
Being able to evaluate that area will help the Company to ensure that it does not
neglect or underestimate the performance of teams that have a few services but need to
work under heavy workload like other team and still have to provide members or time
to assist or participate in providing services of other teams.
Improve the efficiency in management within a company
Help to see clearly the revenue that a team will earn even when it support
other team
Help to evaluate the support of a team to other
Provide simple method to communicate weaknesses and
strengths Clear structure
Depend heavily on memory of rater however it can be mitigated if
company or rater keeps a record
Depend heavily upon cost and benefit analysis
Take time to conduct because it needs to track down the revenue and
cost Lack of rating skills
When being introduce to this method, interviewees have a lot of opinions for it.
Ms Thuy said that this method has a detailed structure. Ms Tuyet agreed with Ms Thuy
where she though that with its well organized structure, this method will help rater to
track down and evaluate the assistance of a department to other department in an
organization and to not neglect or underestimate the performance of teams that have a
few services but need to work under heavy workload like other team and still have to
provide members or time to assist or participate in providing services of other teams.
Ms Phuong said that this method seems to be easy to execute without less training
needed as well as less expense incurred. For Mr Lam, he thought that this method will
29

take quite a long time to prepare. The rater will need to go through many data to track
down revenue of teams and sometimes it will depends on the memory of the rater for
important event of some teams which may be affected the appraisal result. Mr Lam
also noticed that this method will be fair because information is in figure and they all
have recorded by the Company.
Easy to
Can be
Method Structure conducted in Cheap Bias Total
conduct
short time
Cost accounting method 9 9 6 8 6 38
Through comparison, the Rating scale method seems to be suitable for the
Company. The criteria to evaluate revenue can be easy put in the appraisal form so that
team performance can be effectively assess. Furthermore, the method is easy to
conduct, need little training and guidance, simple structure, and less time consuming as
well as cost effective.
As the scoring tables have shown, although the criteria Bias is quite high for
rating scale method, the method has better score in the other criteria. The total score of
rating scale method is 43 which is higher than cost accounting method. Hence, rating
scale method will be chosen as the most suitable method for solve the unclear
performance criteria and structures.
3.2.2. Alternative solutions for lack of rating skills in conducting performance
3.2.2.1. Coverdale Training
Coverdale training is a method developed upon group training (38). The method
is built upon positive thinking and reason. In this method, rather than analyzing the
causes of failure, the reason or method for success will be reviewed and improve.
People will form a group and try to gain experience from reviewing their performance.
By not learning directly from trainer, studying from actual performance will help
trainees to gain skills in putting their knowledge to use. This method is simple to
30

conduct and by sharing effective practices, raters of the Company can effectively
improve their rating skills and reduce errors.
Easy for trainee to receive knowledge
Provide an effective environment where people can share their actual
experiences and learning from them
Improving rating skills and reducing error by studying from actual
experiences
Cost effective
Take time to prepare
If participants are not eager to open up and share their actual performances,
it will not be effective
Mr Minh has a lot of experience in training. When talked about this method, he
said that it is a great opportunity for raters to share their good practices. Ms Phuong
thought that this method will not require much expense to conduct and is easy to
conduct. Mr Lam shared that he has experienced this training, it is good for rater to
improving rating skills because not only they can improve their own skills but also
receiving skills of others.
Easy to
Can be Learning
Easy to improve
Method conducted in Cheap from Total
conduct rating
short time other
skills
Coverdale training 9 9 8 9 9 44
3.2.2.2. Laboratory Training
This method is based on laboratory approach for skills training (38). The method
is executed by a group of trainees that gather up with skilled trainer for a number of
sessions. The nature of this method is that it does not have definite structure, agenda,
31

or agreed procedures. Participants will be able to decide what problem they want to
talk, their problems, and their solutions. By doing so, trainees can receive feedback on
others, realize the adequate solution, improve skills. Before conducting performance
appraisal, the Company can conduct this training for trainers. The trainers will have a
chance to improve their rating skills by talk about their problems, their concerns, errors
which they can think of, and their solutions. No one will make fun of the shared
information, only feedback for improving will be delivered. This method will help to
ensure raters will hold adequate skills before conducting performance appraisal.
Provide free sharing environment
Improve rating skills of raters by let them hear feedback and receive
adequate information and experience from others Easy to execute
Improve the behavior of raters when conducting performance appraisal.
Cost will be high if renting professional trainer is needed
No specific time and content so it will be inconvenient for trainees to
participate
Mr Lam said that this method is an opportunity for raters to talk about their
problems when conducting appraisal method. Ms Nga is quite fond of this method
because is not strict and quite easy to conduct. However, Mr Minh, Ms Thuy, and Ms
Phuong expressed the opinion that it will be quite inconvenient for raters to organize
time to participate. Ms Tuyet said that the cost to conduct this method will increase a
lot if the Company rent a professional trainer. Furthermore, she stated that the training
may be conducted in a long time because there are no time frame for this method
Easy to
Easy to Can be Learning
Method improve conducted in Cheap from Total
conduct
rating short time other
32

skills
Laboratory Training 9 9 6 8 9 41
From the aforesaid information, coverdale training seems to be more suitable for
the Company than the laboratory training. The method will create a convenient
environment for raters to look at what are good practices as well as learning new
method or skills for rating. The training will not require a supervisor or professional
trainee so there will be no expense incurred. Furthermore, this training does not need
to last many sessions, has timetable for raters to effectively organize their plans and
participate.
At the scoring table have shown, the total scores of coverdale training and
laboratory training are 44 and 41 respectively. Overall, coverdale training is better
than laboratory training in every sections.
3.3. Action Plan
In order to effectively implement the methods, the steps to conduct are:
 Step 1: The management of the Company will conduct a meeting with
HR department in order to make plan for the performance appraisal
 Step 2: After receiving the requirements and guidance from managers,
HR department will make a list of criteria and announce them to
teams for voting
 Step 3: HR department will collect the voting result and make a report to
the management of the Company
 Step 4: Before conducting the performance appraisal, HR department
will conduct a training section (Coverdale training) for raters to ensure
that they will know how to conduct the performance appraisal
effectively.
 Step 5: After the performance appraisal, raters will have a meeting with
the management of the Company to discuss about the result of each team
The detailed action plan is as follows:
33

Date Actions
Main
Supervisor
Estimated
curator cost (VND)
 Organize a meeting with
HR department to
announce that the
Company will conduct
performance appraisal
for teams
 Discuss about the The
03/12/2018
requirements and management
1,000,000
objectives of the of the
performance appraisal Company
 Discuss about the
criteria in the
 Discuss about how to
plan an effective
 HR department will
research about latest
04/12–
criteria for evaluate the
HR
performance of teams HR manager 20,000,000
06/12/2018 department
discuss together and
make a list of criteria
10/12 –
send an email which
HR
contains a list of criteria HR manager 0
12/12/2018 department
for team evaluation to
employees
34

 Employees will consider
and vote for the criteria
which they think will be
suitable to evaluate
team performance
collect the result of
13/12/2018
voting HR
HR manager 0
department
generate a report base
on the voting result
 A meeting will be hold
between HR department
and the management of
the Company to discuss
about the voting result The
14/12/2018
 The management of the management
1,000,000
Company will approve of the
the criteria for Company
evaluating team
 The management of the
Company will decide on
the raters
between HR department
and the raters in order to
HR
17/12/2018 discuss on how to HR manager 2,000,000
department
conduct the
 Raters will be freely to
35

share their good
practices and skills in
conducting performance
appraisal
 There will be
brainstorming as will as
feedback contribute to
improve the good
practice and actual
experience of raters
 Teams will fill in the
18/12-
form
HR
Raters 5,000,000
21/12/2018
 Raters will collect the
department
form
 Raters will conduct the
appraisal base on the
forms received from
teams.
 After that, raters will
24/12/2018
send the result to HR
Raters
HR
0
department for department
mitigating the bias in
assessment
review the result and
provide comment if
36

needed
 Raters will receive back
the result from HR
department
HR
26/12/2018 Raters 1,000,000
 Raters will hold a
department
meeting with each team
to discuss about the
performance
between raters, the HR
The
department, and the
HR management
27/12/2018 1,000,000
management of the
department of the
Company to discuss
Company
about the performance
of each team
37

CONCLUSION
Tax Department of the Company provides many professional services to big
firms, brings in so much profit and clients to the Company. Although it shows that the
tax department is in a good condition, however the tax department also has a difficult
matter to solve. There is a big difference in achieving target profit between tax teams.
It is shown that the low achieved ratio of revenue in some teams will lead to large
difference of achieved ration between teams. Then, lead to low performance of
employees as well as the productivity of Company. Through initial interview, we have
identified the central problem of the Company which is ineffective performance
appraisal. As we analyzed deeper, the main causes of the central problem which are
lack of rating skills in conducting and unclear performance criteria and structures have
appeared.
In order to effectively mitigate or delete the causes of central problem, we have
introduced to the Company different methods. Through analyzed each method, we
have finally come up with two methods which are rating scale and coverdale training.
We have cooperated with the Company to develop an action plan to implicate the
two methods. The project will be implemented shortly after. The result will be
observed and analyzed in order to improve the performance appraisal of the
Company so that team performance will be accurately evaluated. We understand that
in this scope of thesis, some little issues are not determined however the most
important thing is that the key problem is defined and the solutions are developed.
We will keep cooperating with the Company to find opportunities in not only
improve the detected problem but also other areas of XYZ Vietnam.
38

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20. Dessler G. Human Resource Management: Upper Saddle River:Pearson Education
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London: Kogan Page; 2006.
22. Idowu AO. Effectiveness of Performance Appraisal System and its Effect on
Employee Motivation. Nile Journal of Business and Economics. 2017; 3(5).
23. Kondrasuk JN. So what would an ideal performance appraisal look like? Journal of
Applied Business and Economics. 2011; 12(1).
24. Poon JML. Effects of performance appraisal politics on job satisfaction
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25. Bloom, N. & Van Reenen J. Human Resource Management and Productivity.
NBER Working Paper 16019. 2010.
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https://www.opm.gov/policy-data-oversight/performance-management/reference-
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In American Agricultural Economics Association Annual Meeting; 2005; Rhode
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17. Khan A. Performance appraisal’s relation with productivity and job satisfaction.
Journal Managerial Sciences. 2006; 1(2): p. 100-113.
18. Bretz, R. D., Milkovich, G. T., & Read, W.. The current state of performance
appraisal research and practice: Concerns, directions, and implications.. Journal of
Management. 1992; 18: p. 321–352.
19. Adler, S., Campion, M., Colquitt, A., Grubb, A., Murphy, K., Krane, R.O., &
Pulakos, E.D. Getting Rid of Performance Ratings: Genius or Folly?—A debate. In
Conference of the Society for Industrial and Organizational Psychology; 2015.
20. Dessler G. Human Resource Management: Upper Saddle River:Pearson Education
Inc.; 2008.
21. Armstrong M. Performance Management: Key Strategies and Guidelines
London: Kogan Page; 2006.
22. Idowu AO. Effectiveness of Performance Appraisal System and its Effect on
Employee Motivation. Nile Journal of Business and Economics. 2017; 3(5).
23. Kondrasuk JN. So what would an ideal performance appraisal look like? Journal of
Applied Business and Economics. 2011; 12(1).
24. Poon JML. Effects of performance appraisal politics on job satisfaction
and turnover intention. Personnel Review. 2004; 33(3): p. 322-334.
25. Bloom, N. & Van Reenen J. Human Resource Management and Productivity.
NBER Working Paper 16019. 2010.
26. Sims, J. P., Gioia, D. A., & Longenecker, C. O. Behind the Mask: The Politics of
44

Employee Appraisal. Academy Of Management Executive. 1987; 1(3): p. 183-193.
27. Bacal R. Performance management: McGraw-Hill Companies; 1999.
28. Fletcher C. Appraisal and feedback: making performance review work London:
Chartered Institute of Personnel and Development; 2004.
29. Boice, D., Kleiner, B. Designing effective performance appraisal systems. Work
Study. 1997; 46(6): p. 197-201.
30. Berry. LM. Employee selection Belmont, CA : Thomson/Wadsworth; 2003.
31. Moers F. Discretion and bias in performance evaluation: The impact of diversity
and subjectivity. Accounting, Organizations, & Society. 2005; 30(1): p. 67–80.
32. Swan W. How to do a superior performance appraisal New York: Wiley; 1991.
33. Cardy, R. L., & Dobbins, G. H. “. Affect and appraisal accuracy: Liking as an
integral dimension in evaluating performance. Journal of Applied Psychology.
1986; 71(4): p. 672–678.
34. Taylor,M. S., Fisher, C. D., & Ilgen, D. R.. “Individuals reactions to performance
feedback in organizations: A control theory perspective. Research in personnel
and human resources management. 1984;: p. 81−124.
35. Aguinis, H., Joo, H., & Gottfredson, R. K.. Why we hate performance
management–—and why we should love it.. Business Horizons. 2011; 54(6): p.
503—507.
36. Singh P. Performance Appraisal and it’s Effectiveness in Modern Business
Scenarios”, Aswathappa K. Human resource and personnel management. New
Delhi: Tata McGraw-Hill Education; 2015.
37. K. A. Human resource and personnel management New Delhi: Tata McGraw-Hill
Education; 2005.
38. Erik Frank, Charles Margerison. "Training Methods and Organisation
Development. Journal of European Industrial Training. 1978; 2(4): p. 2 - 32.
39. Dao H. [Online].
40. Spence, J. R., & Keeping, L. Conscious rating distortion in performance appraisal:
45

A review, commentary, and proposed framework for research. Human Resource
Management Review. 2011; 21(2): p. 85-95.
41. “Evaluating performance appraisal programs: An overview”. Available from:
https://www.opm.gov/policy-data-oversight/performance-management/reference-
materials/more-topics/eval.pdf
46

APPENDIX 1: Transcript of interviews
The part below is the records of all interviews which have been conducted for the
sake of this paper. All of the interviewees are employees of XYZ Vietnam. The
interviewees are all belong to the tax department and ranging from Staff to General
Manager.
Interviewees will be divided to three groups as follow:
The 1st
group is employees from group A: Ms Bui Thi Tuyet – staff, Ms Le Thi
Giang Huong – supervisor, Ms Pham Thi Tuyet Nga – staff
The 2nd
group is employees from group C: Ms Dau Minh Phuong – staff, Ms
Nguyen Thi Bich Thuy – staff, Mr Vu Le Minh – supervisor
The 3rd
group is Mr Lam Le, General Manager of Department
The interview will be divided into two parts. The first part is to identify general
problems and situation of the company. The second part’s purpose is to locate the
central problem, determine the importance of it, justify causes, and discuss the
solution to effectively mitigate the central problem.
1st
Interview with Ms Bui Thi Tuyet – Staff
Q1: Hello, How are you doing Tuyet? As you have known, I’m working on my
graduation thesis for Master of Business at the moment. Hence, I will need to ask you
some questions in order to use it for my thesis. Can we have a small interview?
A1: Yes. I’m ready to help you, Thu.
Q2: Nice. So let’s warm up with some quick questions. Can you tell me a little about
yourself?
A2: Well, My full name is Bui Thi Tuyet. I’m currently working at the tax department
of XYZ Vietnam.
Q3: How long have you been working in the Company?
A3: I have stayed in this company for 4 years. At the moment, I’m familiar with the
company’s operation.
Q4: Can you tell me about your team?
A4: I belong to team 2. My team has two types of service which are Personal Income
Tax and Transfer Pricing. I usually provide Transfer Pricing service to clients.
Q5: How do you feel when working at XYZ Vietnam?
47

A5: For me, I think that it is nice to work in the Company. Everyone is friendly and
has a lot of knowledge.
Q6: Do you satisfy with your workload now? If not, please clarify the reason
A6: No, I don’t. I think that my workload is quite high. Although it is a good thing to
have many clients, I feel tired and stress for spending a lot of time to deal with them.
Q7: Can you tell me the current situation of your service, the Transfer Pricing?
A7: Currently, many big firms are worry about the Transfer Pricing documentation
and related party transaction disclosure returns. Hence, we receive many clients. For
every client, the maximum time for us to finish providing service will be about 3 – 4
weeks.
Q8: Do you have any difficulties when working?
A8: Our service require us to collect related documents and interview client. However,
clients usually do not like to be disturbed. Hence, it is difficult to ask them to provide
information. Furthermore, it will take us a lot of time to check tax regulations because
they are inconsistent. Besides, our team leader as well as Mr Lam never praise us for
our effort which make us feel unmotivated. We have to work overtime without
receiving any compliment or sympathy.
Q9: Do you want any improvement when working?
A9: I think that the service will be conducted faster if we change the method to collect
information and interview clients. Furthermore, I think that the managements need to
include some major criteria into the performance appraisal so that it will be able to
effectively measure employee’s actual performance.
Q10: Do you think that every team has the same work volume with each other?
A10: No, I don’t.
Q11: What are the reasons for the difference of target revenue between each team?
A11: From my point of view, I think that the reasons for the difference of target
revenue are service of each team, the number of team member, and revenue.
Q12: As I can see, your team has the highest rate in achieving target revenue. How do
you feel about it?
48

A12: Well, I’m pleased with our team performance. However, in order to get to this
stage, we have to clear our huge workload. Sometimes I feel lack of interest in
working if I have to constantly deal with huge workload.
1st
Interview with Ms Pham Thi Tuyet Nga – Staff
Q1: Hello, Nga. I’m working on my graduation thesis for Master of Business at the
moment. Can we have a small interview so that I can use it in my thesis?
A1: Yes. You can ask me anything, Thu.
Q2: Let’s start with a simple question. Can you tell me about yourself?
A2: My full name is Pham Thi Tuyet Nga. I’m working at the tax department of the
company at the moment. I’m specialize is in accounting.
A3: I have worked in XYZ Vietnam for 4 years.
A4: I belong to team 4. There are more than ten members in my team. My team
provides tax review and accounting services to clients.
A5: I like the atmosphere here. Everyone is friendly. We often assist each other during
working hours.
A6: No, I don’t. Our workload is quite heavy and cost us a lot of time to conduct. I
think the reason is because we having so many monthly clients and we don’t have
enough manpower to lower down the workload of a member.
Q7: Can you tell me the current situation of your accounting service?
A7: The accounting service requires us to be very careful and concentrated when
record transaction to the accounting book. Besides, most of our clients are foreign
investors that have a company here so we usually explain to them any issues related to
the difference between Vietnamese Accounting System and International Financial
Reporting Standards.
49

A8: I have to work overtime a lot because of heavy workload. Furthermore, in order to
reach the target profit, we also have to spend time look for promising clients as well as
conduct a lot of team meetings to find effective solution to stay in the high rate of
achieving target profit zone.
A9: I think that the Company should purchase some effective accounting software to
improve the work rate of employees.
A10: No, I don’t.
A11: Well, I think that the reasons are the number of employee, services, and
workload of each team. I think that the company should assign the workload and
clients effectively. By doing so, every team will be able to earn more fee and achieve
target profit.
Q12: In fiscal year 2017 – 2018, your team has a good rate of achieving target
revenue. How do you feel about it?
A12: I think that our team has done a good job. We try very hard to achieve target
profit. However, we are suffer from stress because of heavy workload and continuous
working overtime. My motivation is down and I think it will be good to receive
compliments from the higher up but they hardly ever praise our effort. There are times
that I’m looking at other opportunities in order to find a suitable working environment.
1st
Interview with Ms Dau Minh Phuong – Staff
Q1: Hello, Phuong. Can we have a small interview so that I can use it in my
graduation thesis for Master of Business?
A1: Yes. Thu. I’m ready so feel free to ask me
Q2: Let’s start with a simple question. Can you tell me about yourself?
A2: I like to communicate and socialize with people. I’m working at the tax
department. I usually provide Accounting services to clients.
A3: I have stayed in XYZ Vietnam for almost 4 years.
50

A4: I belong to team 6. We have more than 10 members. My team provides
accounting services to clients.
A5: I think that XYZ Vietnam is quite a good place to work. I have improved a lot
when working here.
A6: Yes, I think I can still handle my workload at the moment.
Q7: Can you tell me the current situation of your accounting service?
A7: We have adequate monthly clients for accounting service. They are all long – time
clients. It is hard to find new clients for this type of service.
A8: Well, I have face some difficulties in working with foreign clients. They usually
require us to provide detailed solutions which will take us a lot of time to prepare.
A9: I think that the company should recruit employees for my team so that we will
have more manpower to be able to provide services to more clients.
A10: No, I don’t.
A11: The reason for the difference of target revenue between each team is because the
company use the same measurement to evaluate the actual performance of each team.
Q12: In fiscal year 2017 – 2018, the rate of achieving target revenue of your team is
quite low. How do you feel about it?
A12: Frist of all, I think that the reason for our not so good performance is because our
team do not have any other services besides accounting. Secondly, the fee of
accounting services is not high and it is difficult for us to increase service fee. We have
lost many clients because we cannot provide any services besides accounting.
1st
Interview with Ms Nguyen Thi Bich Thuy – Staff
Q1: Hello, Thuy. I need your help for my graduation thesis for Master of Business?
51

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