Retention of professional bankers at commercial banks in Ho Chi Minh city.pdf

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
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Doan Duc Minh
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ID: 60340102
MASTER OF BUSINESS (Honours)
SUPERVISOR: Dr. LE NGUYEN HAU
Ho Chi Minh City – Year 2012

RETENTION OF PROFESSIONAL BANKERS i
ACKNOWLEDGEMENTS
Beginning of my thesis, I would like to express all my sincere thanks to those
people who made this thesis possible and an unforgettable experience for me.
First of all, I would like to show my deepest sense to my supervisor Dr. Le
Nguyen Hau, who offered his continuous advice and encouragement throughout
the course of this thesis. Dr. Hau has offered me the systematic guidance and
great inspiration in putting into me toward the scientific field.
Then, I am thankful to all my colleagues and Board of Management in Shinhan
Bank Vietnam, United Overseas Bank, Hong Leong Bank, Vietnam Commercial
Bank, Asia Commercial Bank, Saigon Commercial Bank, Dong A Commercial
Bank for the consultation, orientation and support during my research process.
Last but not least, this is a great time for a son of family, husband of wife to take
this opportunity to express the profound gratitude from my deep heart to my
beloved family for their love and continuous support both spiritually and
materially.

RETENTION OF PROFESSIONAL BANKERS ii
ABSTRACT
Employees retaining is an important goal of every corporate organization, which
drives company to hit the target. This thesis explores the factors that can
significantly impact employee retention in an organization, and specializes in
field of commercial banks in Ho Chi Minh City. It attempts to relate some of the
factors discovered to major theories in employee retention. The literature
surveyed by this study mention employee motivation and job satisfaction as the
main factors that influence employee retention rates. This survey implies that still
significant for managing employee retention in today’s rapidly expanding
banking industry.
Human resources is definitely one of the most valuable assets in the
organizations, however, high turnover is currently being mentioned recently.
There are a lot of researches around this topic because retaining employees were
realized to be very costly to the organizations. Therefore, retention of key
personnel is a precedent issue for all banks and it seems not many research
reports conducted in Vietnam banking industry.
In the labor market, competitors are always attracting key personnel who are
valued core and not satisfied with their current job. This research explores the
current situation of job satisfaction of key personnel and figures out the
antecedent factors, which impacts job satisfaction. Finally, managerial
implications are withdrawn for improving the level of satisfactions, retaining key
personnel.
Employing a quantitative approach, in which, the data were collected from 160
professional bankers (“bankers”) in commercial banks in Ho Chi Minh City,
multiple regression analysis has resulted in the determinants of job satisfaction,
and a significant impact of job satisfaction on job satisfaction. Pay and leadership
support are found to be two most important factors, other factors include benefit,
opportunities of training and promotion, work challenges. The analysis results

RETENTION OF PROFESSIONAL BANKERS iii
also show that bankers in selected commercial banks are currently not completely
satisfied with their jobs. Based on the statistical results, managerial implications
have been discussed and recommendations are provided to improve the retention
rate of the banking industry in Ho Chi Minh City.

RETENTION OF PROFESSIONAL BANKERS iv
TABLE OF CONTENTS
ACKNOWLEDGEMENTS......................................................................................i
ABSTRACT.............................................................................................................ii
TABLE OF CONTENTS........................................................................................iv
LIST OF TABLES...................................................................................................vi
LIST OF FIGURES................................................................................................vii
CHAPTER 1: INTRODUCTION…………………………………….…………....1
1.1Background…………………………………………………….….…....…1
1.2 Problem statements………………………………………………..….…..2
1.3 Research objectives……………………………………………….……...3
1.4 Scope of study…………………………………………………….……...3
1.5 Thesis structure…………………………………………….…….….……3
CHAPTER 2: LITERATUE REVIEW………………………………….….……...4
2.1 Maslow’s hierarchy of needs……………………………………..………4
2.2 Retention………………………………………………………….……....5
2.3 Job satisfaction and antecedent factors…………………………....……...7
2.4 Moderating factors………………………………………………...…….12
2.5 Research model ……………………………………………….………..13
2.6 Summary of hypotheses…………………….…………………..…..…..13
CHAPTER 3: RESEARCH METHOD…………………………….……….……15
3.1 Research procedure…………………………………………….….……15
3.2 Measurement scales……………………………………………….……15
3.3 Method of data collection……………………………………………....19
3.4 Method of analysis…………………………………………….…….….19
3.4.1 Assessment of measurement of scale……………………….….…20
3.4.2 Multiple regression………………………………………….…..…21
CHAPTER 4: RESEARCH RESULT………………………………………........22
4.1 Introduction………………………..……………………………………22
4.2 Sample characteristics……………………………..……………………22
4.3 Assessment of measurement of scales…………….……….……….…..23

RETENTION OF PROFESSIONAL BANKERS v
4.3.1 EFA for individual scales of antecedent factors…………….……23
4.3.2 EFA for all scales together of antecedent factors……….………..26
4.3.3 Assessment for job satisfaction……………………………….…..29
4.4 Assessment of theoretical model and hypotheses……………….……..30
4.4.1 Assessment of theoretical model………………………….……....30
4.4.2 Assessment level of overall job satisfaction………………….…..32
4.4.3 Assessment of influences of organization/ employee
characteristics to impact of antecedent factors on job satisfaction……..33
4.4.4 Test of hypotheses……………………………………………..…..35
4.5 Discussion………………………………………………………….…....39
4.6 Managerial implications……………………………………………..….40
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS……….………...46
5.1 Conclusion……………………………………………………….……...46
5.2 Recommendations………………………………………………..……..46
5.3 Limitation and further research directions………………………….….48
REFERENCES…………………………………………………….…….....……viii
QUESTIONAIRRES………………………………………………….….………xii

RETENTION OF PROFESSIONAL BANKERS vi
LIST OF TABLES
Table 2.1: Maslow‘s hierarchy of needs............................................................... ..5
Table 3.1: Summary of scales for 8 constructs in the model ................................ 17
Table 4.1: Sample characteristics ........................................................................ 21
Table 4.2: EFA and reliability test result for scales.............................................. 23
Table 4.3: EFA and reliability test result for three scales refined ......................... 25
Table 4.4: Result of joint factors analysis for 7 scales.......................................... 27
Table 4.5: Characteristics of 7 scales for re-assessment of reliability................... 28
Table 4.6: Assessment for job satisfaction scale .................................................. 28
Table 4.7: Multiple regression result of antecedent factors to job satisfaction...... 29
Table 4.8: R square value .................................................................................... 29
Table 4.9: F and Sig. value ................................................................................. 30
Table 4.10: Regression result between job satisfaction and retention..................... 30
Table 4.11: R square value .................................................................................... 30
Table 4.12: F and Sig. value.................................................................................. 30
Table 4.13: Means values of different factors ........................................................ 31
Table 4.14: Differences of impact of antecedent factors by gender........................ 32
Table 4.15: Differences of impact of antecedent factors by age ............................. 33
Table 4.16: Differences of impact of antecedent factors by ownership .................. 33
Table 4.17: Differences of impact of antecedent factors by size ............................ 34
Table 4.18: Regression coefficients....................................................................... 35

RETENTION OF PROFESSIONAL BANKERS vii
LIST OF FIGURES
Figure 2.1: The research model ...........................................................................13
Figure 3.1: Research procedure ...........................................................................15
Figure 4.1: Regression coefficients model...........................................................38

RETENTION OF PROFESSIONAL BANKERS 1
CHAPTER 1
INTRODUCTION
This chapter is an introduction and intended to provide background information
on the nature of the present study and its objectives and purpose. It is divided into
four sections. The first section presents background of the research, the second
part presents the problem statement, the third part presents the objective, and the
final section presents the scope of study.
1.1 Background
The retention of bankers has been shown to be significant to the development and
the accomplishment of the organization’s goals and objectives. In recent years,
the system of financial institutions and banks in Vietnam has been developed in
increasing quantity of credit institutions and quality in diversity of ownership and
banking services. Currently, the whole banking system has reached at number of
52 local commercial banks, 51 foreign bank branches, 31 of non-bank credit
institutions. As the "blood" of the economy, the banking sector has been grown
remarkable and contributed to the stable development of Vietnam.
The local commercial banks in Ho Chi Minh City (the banks) were established
along with the development process of Vietnam economy. In the first years of
development, the banks have developed gradually, with small and medium scale,
and not really pay attention to human resource management (HRM). Due to the
development of economy, the banks have boomed and developed remarkably.
Especially in 5 years recently, the banks has set up with the wide network
branches and the number of bankers in this industry increased by more than
20,000 bankers, growth of the average number of bankers more than 15% per
year. Along to the stable development, HRM requires improvement and upgrade
to professional level. However, HRM practices in the banks have not been
focused and still applied the old-fashion method. Board of management faced the
serious issue that employee turnover increased about 9.5% per year within recent

three years (Asia Banker Forum, 2011). The banks has been conducting a
campaign to reform human resources management system to improve the
effectiveness of HRM, high labor productivity, raise incomes and policies to
retain bankers.
The banks also do understand that the professional bankers are the key factor in
competition in the banking market and this may cause a threat to the success of
long-term businesses. For this reason, the banks rose up a query how to retain
professional staff and satisfy their work-related needs would help.
1.2 Problem statements
Board of management of the banks are aware of the critical role of talent
workforce and striving to attract and retain their bankers by various measures
such as increasing salary and allowance, conducting intensive training courses,
offering more opportunities for career promotion and incentive abroad trips for
high performance bankers. However, the high turnover rate still exceeds their
expectations in spite of bank efforts. Why is turnover still high after those
efforts? What are bankers’ demands? How much percent are the bankers satisfied
with their current job? Is there relationship between job satisfaction and
employee retention?
Literature on human resource management provides some general hints in coping
with this managerial problem of employee retention (e.g. Maslow, 1943, 1954;
Bame, 1993; Becker & Gerhart, 1996; Hom & Griffieth, 1995). Nevertheless, the
right solution under the current social-economic context, organization leaders
need to understand in more details as higher salary, promotion opportunities, and
related other factors as motivation, recognition, working environment, good
relationships with the manager and colleagues, corporate culture. What are the
affected important factors?
Due to answer these questions, management board not only has an insight into
the issue of HRM in Vietnam, but also provides specific formation for managers
in the fields to solve the problem of retaining their talent bankers.

1.3 Research objectives
In response to the above stated problems, this research is conducted with below
aims:
 Determine quantitatively antecedent factors and their relative contributions to
the overall satisfaction of bankers in the local commercial banks.
 Estimate the impact of job satisfaction on the retention (intent to stay) of
bankers in the field.
1.4 Scope of study
 Given the limited resources and time, the empirical data for the research were
collected from the commercial banks in Ho Chi Minh City.
 Examinees on this study include senior-officers, supervisors and managers and
who achieved bachelor, master degree and higher degree.
 Only work – related factors will be investigated in this study. Other possible
factors (e.g. social or cultural factor) are beyond the scope of this study.
1.5 Thesis structure
This thesis is organized as follows:
 Chapter 1 presents the research background, problem statements, research
objectives, scope of study and thesis structure.
 Chapter 2 introduces research model and its hypotheses as well as its literature
review.
 Chapter 3 illustrates the methodology conducted in this paper.
 Chapter 4 presents research results is based on data collected.
 Chapter 5 summarizes the research results, provide the findings and
recommendations.

CHAPTER 2
LITERATURE REVIEW
The literature clearly indicated that there are seven keys to employee retention.
They are work challenge, training and promotion opportunity, leadership support,
colleague relationship, salary, benefits, working environment. The model of job
satisfaction and retention will be proposed for this specific study, which provides
a basis for the development of hypotheses. Over the years, many studies relating
to personnel in terms of human needs, job satisfaction, organizational
commitments and retention have been conducted. In this literature review,
Maslow hierarchy of needs, retention, job satisfaction and its antecedent factors
will be presented. Then, the model of job satisfaction and retention will be
proposed for this specific study, which provides a basis for the development of
hypotheses.
2.1 Maslow’s hierarchy of needs
One of the earliest and best-known theories of individual motivation, which is
applicable to the current study, is Maslow’s hierarchy of needs (Table 2.1).
Maslow advocates that within every human being lies a hierarchy of needs.
These needs are:
 Physiological needs: related to essential factors to survival, such as food, water,
and shelter. In organization, these needs are mainly presented as monthly salary.
 Safety needs: related to security, safety in workplace and life. At this level, the
individual strives to look for or form the safe environment from external dangers.
In organization, these needs are presented via hygiene factors, long-term
contribution, social and medical insurance policies…
 Social needs: related to relationship with people, being member of teamwork,
being loved. In organization, these needs are identified by colleague relationship,
leader relationship….

 Esteem: the drives for feelings of self-worth and individual importance, need of
respect in workplace and daily life are took place at this level. Organizations
often pay incentives through rewards, bonus, promotions…
 Self-actualization: at the top of the hierarchy, the motivator is a sense of
fulfillment that allows individual to maximize their own growth and contribute.
In organization, these needs are satisfied by opportunities of training,
development and innovation.
Once each of these needs is satisfied, the individual moves up to the higher level
of the hierarchy.
Table 2.1: Maslow’s hierarchy of needs
Source: Mendenhall et al., (1995)
2.2 Retention
Over the past decade, the way in which people were managed and developed at
work has come to be recognized as one of the primary factors in achieving
improvement in organizational performance (BQF, 1998; Marchington and
Wilkinson, 1997; Phillips, 1997). This aspect was reflected by popular idioms
such as ‘people are our most important asset’ (Accenture, 2001). From the review
of extant literature, it was acknowledged that the employees of successful
Implemented
Out Of The Field
Need
Implemented
In The Field
Education, religion,
habit, individual
development
Self-actualization
Opportunities of training,
promotion, creativity,
development
Acceptance of family,
friend, community
Esteem
Recognition, high
position, increasing
responsibility
Family, friend,
community
Being loved, being
member of team
Team working,
colleague, supervisor,
customer
Un-fear about war,
pollution, conflict Safety
Safety of working, long
term job, benefit
Food, water, sexuality Physiology
Basic wage, temperature,
air

organizations were shared a fundamental philosophy of valuing and investing
(Anand, 1997; Maguire, 1995). In fact, several studies have described human
resource management as a means of achieving competitive advantage (Delery,
1998; Walker, 2001). Consistent with this perspective, the retention of their
critical (core) employees is an equally important issue for organizations.
Retention is about developing strategies that reduce the number of people who
leave the organization for avoidable reasons. Organizations need to retain
employees with the required balance of skills and experience to ensure that
business can be maintained (Stucberry, 2003). Solutions to retain employees are
really not simple. There are many factors that affect the employee's reasons for
staying with the organizations, as well as how important those factors are to
employees. In order to retain employees, the organization must understand these
factors, which drives people to perform their jobs and monitor the job satisfaction
of bankers.
Most organizations today continue to struggle with retention hardly because they
are only relying on salary increases and bonuses to prevent turnover (Accenture,
2001; Gumbus and Johnson, 2003). Managing core employees effectively means
identifying their needs. Employees bring their needs, aspirations, and hopes to
their jobs and working environment where their abilities can be utilized and their
basic needs can be satisfied.
At the centre of some turnover models have been variables of job satisfaction and
organizational commitment (Steele, 2002) but tendency were mainly developed
from the vast amount of researches on job satisfaction (Porters and Steers, 1973).
In this research, job satisfaction is considered as antecedents as they have strong
direct influence to retention. Job satisfaction is a subjective emotional evaluation
made consciously or unconsciously by the employee and is defined as a
pleasurable or positive emotional state resulting from the appraisal of one’s job
or job experiences (Locke, 1976). Job satisfaction is multidimensional in nature
with specific facets including satisfaction with work, salary, promotion,
colleague (Rice, Gentile and McFarlin, 1991). Work is such a large part of an
employee’s life and is represented by a belief that organizations who are more
satisfied with their work experiences and environment will stay longer (Spector,

2000), will attend work regularly, and perform at an optimum level (Porters and
Steers, 1973). Job satisfaction is included in this research because many
researchers have shown that the level of job satisfaction is positively related to
retention (Koslowsky, 1991; Hom and Griffeth, 1991). Therefore, employees
who are satisfied with their job are more likely to stay in their organizations.
From the above, we could hypothesize that:
H1: There is a positive impact of job satisfaction on the retention of bankers.
2.3 Job satisfaction and antecedent factors
Job satisfaction is an employee's general positive attitude toward the job (Byars
and Rue, 2000). It is a commonly defined as the extent to which bankers like
their work (Agho et al., 1993). It is also an attitude based on employee's negative
or positive perception of their jobs or work environments (Reilly et al., 1991), the
degree to which there is a good fit between the individual and the organization
(Ivancevich et al., 1997). Simply stated, the more people's work environment
meet their needs including intrinsic and extrinsic needs (Abraham Maslow,1954),
values, or personal characteristics, the greater the degree of job satisfaction
(Ellickson, 2002) will be.
Recent studies have identified that job satisfaction of employees is defined and
measured in two aspects: overall satisfaction of job and satisfaction of job
components. Job satisfaction is one criterion for establishing the health of an
organization and overall satisfaction is a function of a combination of situational
characteristics and situational occurrences and it is also presented emotions
covered all aspects of work. Smith et al. (1996) developed a scale to measure job
satisfaction (JDI-index). It was also used in more than 600 researches among 20
years, however, JDI also had defects. Some of researches, which are even in
Western development countries, criticized that it was complex, imperfect
(Buffum and Konick, 1982). Some researchers had modified the scale to fit
specific contexts (Crossman and Bassem, 2003; Trần Thị Kim Dung, 2005).
Considering the above, seven factors are proposed in this study as antecedents of
job satisfaction. They are: work challenge, training and promotion opportunities,
leadership support, colleague relationship, salary, benefit, work environment.

Additionally, organizational and individual characteristics are included into the
model as moderating factors (age, gender, organization ownership and
organization size).
 Work challenge: related to work nature, chances to use personal skills and
capacities, exciting feeling in work. Employees need to be stimulated with
creative challenges or they will go where the excitement is. It is very important to
provide employees challenging assignments with well-defined performance
measures and feedback on the high performance environment because of that,
they can achieve their personal objectives (Furnham, 2002) and reaching job
satisfaction. The necessity of mastering new skills keeps employees satisfied and
innovative (Ferguson, 1990; Walker, 2001). Employees want a job with broad
duties and a lot of variety tasks. In part, it is because they want to have more job
skills on their resume when they are forced to get another job (Jardine and Amig,
2001). Organizations which did not give employees with challenging and
interesting work, freedom to be creative, opportunities to develop new skills,
were usually received express negativity and lack of loyalty from their
employees. In such organization, employees are more likely to report negative
feelings and attitudes toward the organization, lower levels of commitment, and
greater intentions to leave the organization (Phillips, 1997). Thus, the hypothesis
is:
H2. There is a positive impact of work challenge on job satisfaction.
 Training and promotion opportunity: related to employees’ perception to
opportunities of training, personal capacities development, promotion. Training
is considered a form of human capital investment whether that investment is
made by the individual or by the firm (Goldstein, 1991; Wetland, 2003). Training
programs enhance employee job skills when they are employed. Employees are
expected to acquire new skills and knowledge, apply to the current job, and share
them with other employees (Noe, 1999). Employees who participate in training
course will be provided specific skills or correct deficiencies in their
performances, while development is only an effort to provide employee abilities
which the organization will need in the future (Gomez-Mejia, Balkin and Cardy,

1995). Skill development could include improving basic literacy, technological
know-how, interpersonal communication, or problem solving abilities. According
to Storey and Sisson (1993), training and promotion is a symbol of the
employer’s commitment to staff. Training and promotion can also serve to lower
turnover (Frazis et al., 1998; Wetland, 2003). It is also reflective of an
organizational strategy based on adding value rather then lowering cost. Leading
companies have acknowledged that providing employees with a comprehensive
range of career and skills development opportunities is the key to attract and
retain the kind of flexibility, technologically sophisticated workforce that
companies need to succeed in the digital economy (Accenture, 2001; Bassi and
Van Buren, 1999).Thus, the hypothesis is:
H3: There is a positive impact of the training and promotion opportunities on
job satisfaction.
 Leadership support: related to relationship between employees and leaders,
support of leader, behavior of leader, and leader’s skill on management. There
are many leadership definitions of researchers such as: leadership is
conceptualized in terms of four tasks that need to be accomplished in any
organization: providing orientation, assuring alignment, building commitment
and facing adaptive challenges (Risher and Stopper, 2002). Leaders are central to
the process of creating cultures, systems, and structures that foster knowledge
creation, sharing, and cultivation (Bryant, 2003). The impact of leaders have
been examined by numerous leadership studies in a wide variety of
organizations, and results show that leadership styles in a high-level of follower
motivation and commitment as well as well-above-average organizational
performance (Bryman, 1992; Elby et al., 1999; Podsakoff and Steyrer, 1998).
Several researchers have thought highly of the positive influence of leaders in
organizational outcomes, which resulted in lowered intention to leave and
increased organizational behavior (Alimo-Metcalfe and Alban-Metcalfe, 2001;
Pillai, Shreissheim and Williams, 1999; Yammariono and Bass, 1990), leading to
stronger organizational commitment, higher intention to stay of employees

(Alimo-Metcalfe and Alban-Metcalfe, 2001; Podsakoff et al., 1996). Therefore,
based on the literature review, the hypothesis is:
H4: There is a positive impact of leadership support on job satisfaction.
 Colleague relationship: related to behavior, relation to colleagues at work and
teamwork. It is defined as the behavior of an individual that results in unforced
influence when that person is directing and coordinating the activities of a group
toward the accomplishment of a common goal (Bryman, 1992). Colleague’s
supportiveness refers to the friendliness and the extent to which colleagues pay
attention to comments and concerns (Campion et al., 1993; Hart et al., 2003).
Interactions with colleagues may serve an affective psychological function by
providing emotional support against the stresses of the organization’s
socialization initiatives and uncertainties of the work setting (Jablin, 1987).
Employees stay when they have strong relationships with their work colleagues
(Clarke, 2001). Organizations today encourage team building, project
assignments involving work with colleagues, and opportunities for social
interaction both inside and outside the job (Marchington, 2000). Fundamentally,
employees who work as a team are more likely to feel an increased commitment
to the work unit's efforts and the organization as a whole (Cohen and Bailey,
1997; Meyer and Allen, 1997). Consequently, employees tend to remain in
organizations due to the strong teamwork relationship they have established at
the workplace (Clark, 2001; Marchington, 2000). Therefore, it is posited that:
H5: There is a positive impact of colleague relationship on job satisfaction.
 Salary: related to employee’s perception on fairness of pay. Salary is related to
job satisfaction. Most managers believe that salary is the prior retention factor
and many employees leave the organization by better pay or higher compensation
(Mathis and Jackson, 2003). Salary continues to be important in determining
motivation to perform (McCallum, 1998). Past motivational theories such as
expectancy and equity theories have predicted variations in motivation because
of varying valences of outcomes as pay (Das, 2002). However, in practice, salary
is treated as just one of the outcomes and often measured with little precision

(Mitchell and Mickel, 1999). A fair salary is the cornerstone of the contractual
and implied agreements between employees and employers, the underlying
assumption being that money can influence behavior (Parker and Wright, 2001).
Psychological theory states that the importance of fairness is a basic need for the
well being and satisfaction of employees (Blau, 1989). Therefore, employees
who perceive that they are being treated fairness in pay are more likely to have a
high degree of satisfaction and continue their employment with the organization.
This research tests the hypothesis that:
H6: There is a positive impact of salary on job satisfaction.
 Benefits: employee benefits, sometimes called Fringe benefits (medical
insurance, healthcare policy, accidence insurance…) are those rewards that
employees received for being members of the organization and for their positions
in the organization. Unlike salaries and incentives, benefits usually do not relate
to employee performance (Byars and Rue, 2000). Employee’s benefit packages
increase worker commitment to the organization and reduce the tendency to think
about other job opportunities (Mitchell et al., 2001). A commitment model
developed by Rusbult and Farrell (1983), based partly on job benefits, shows the
absence of adequate benefits is one of the main factors contributing to low job
satisfaction and employee intent to leave. They also found that portable benefits,
such as contribution pensions, reduced anxiety involved in intent to leave and
gaining job satisfaction. Therefore, it is posited that:
H7: There is a positive impact of benefits on job satisfaction.
 Working environment: this factor refers to work equipments and resources
provided by the organization, work strain, work overload. Researchers have
shown that organizational obstacles in relation to inadequate equipment or
insufficient training may be important variables of employee motivation, attitude,
and performance, reducing job satisfaction. Research has also shown that work
overload contributes to employee strain, tension, job dissatisfaction, decreasing
organizational commitment and turnover (Spector and Jex, 1998). High
workloads have been shown to lead to negative outcomes, for example,

absenteeism, and low job satisfaction (Fox et al., 1993). According to Spector
and Jex (1998), a high workload may result in feelings of anxiety and frustration.
So, this research tests the hypothesis that:
H8: There is a positive impact of work environment on job satisfaction.
2.4 Moderating factors
This study examines the moderating affects of organization characteristics and
demographics on the impacts of job satisfaction on retention.
 Age: The older employees have limited opportunity for changing the jobs and
are more costly hired than younger ones. However, they are likely to be more
involved in the organization and develop a better fit between personal needs and
their organization than the younger employees.
 Gender: Studies have shown that job satisfaction is related to gender
differences but the research results are not consistent. The female has to
overcome more barriers than the male, and they are treated unfairly about
personal matters.
 Organization ownership: is able to affect job satisfaction. Researches showed
that employees in state organizations receive much more favors than those in
private organizations such as long-term recruitment, benefits, medical insurance,
low workload, low work strain (Truong Van Ban, 1996; Vo Dai Luoc, 1997) so
they have higher level of job satisfaction. This phenomenon becomes more
distinct in transformed economic countries such as Russia, China, Vietnam (Carl,
Elbert et al., 1995). In Vietnamese context, state-own organizations, in general,
are broader operational scope, larger structure, modern banking technology…
compared to private organizations.
 Organization size: similarly, the big-scale organizations are more attract and
retain employees than that small ones.
Thus, the hypothesis will be:
H9: The impacts of antecedent factors on job satisfaction are moderated by
demographics and organization characteristics such as age, gender,
organization size, organization ownership.

2.5 The research model
The antecedent factors that have been hypothesized to have influences on job
satisfaction and retention are illustrated in the following model:
2.6 Summary of hypotheses
H1: There is a positive impact of job satisfaction on the retention of professional
bankers.
H2: There is a positive impact of work challenges on job satisfaction.
H3: There is a positive impact of opportunities of training and promotion on job
satisfaction.
H4: There is a positive impact of leadership support on job satisfaction.
H5: There is positive impact of colleague relationships on job satisfaction.
Retention
Work Challenge
Training &
Promotion
Opportunity
Leadership Support
Colleague
Relationship
Salary
Benefits
Working Environment
Job Satisfaction
H1
H2
H3
H4
H5
H6
H7
H8
H9
MODERATING
- Demographics (gender/age)
- Organization characteristics (size/ownership)

H6: There is a positive impact of salaries on job satisfaction.
H7: There is a positive impact of benefits on job satisfaction.
H8: There is a positive impact of working environment on job satisfaction.
H9: The impacts of antecedent factors on job satisfaction are moderated by
organization/employee characteristics such as age, gender, organization
size, organization ownership.

CHAPTER 3
RESEARCH METHOD
In order to test the model and hypotheses stated in the previous chapter, this
research adopts the quantitative approach in which the data were collected by
means of a questionnaire survey.
3.1 Research procedure
The research follows the procedure illustrated in Figure 3.1
:
Figure 3.1: Research procedure
3.2 Measurement scales
The research participants were asked to respond to the survey questions by using
five point Likert scale ranging from 1 equals totally disagree, 2 equals disagree, 3
equals either disagree or agree, 4 equals agree, 5 equals totally agree, or 1 equals
Research objective
Literature review
Model
Research method
Collecting data
Data analysis
Conclusion &
Recommendation
Secondary
data from
previous
study
Primary data from
questionnaires/
interviews
Result

leave surely, 2 equals leave, 3 equals unclear intention, 4 equals stay, 5 equals
stay surely. Age was divided into 4 groups and coded such those 1 equals under
30 years old, 2 equals 31to 40 years old, 3 equals 41 to 50 years old, 4 equals
over 50 years old. Gender was coded 1 equals male, 2 equals female. Codes of
ownership were 1 equals state ownership, 2 equals private ownership or other
types of ownership. Number of staff are divided into 4 groups and coded such
those 1 equals 20 to 50 staffs, 2 equals 51 to 100 staffs, 3 equals 101 to 200 staffs
4 equals over 200 staffs.
The scales for eight constructs in the model have been developed on the basis of
previously established studies, in conjunction with the adjustment for contextual
situation (i.e. banking industry in Vietnam). Multiple item scales were used in the
form of five point Likert type.
Accordingly, the items and sources of reference for each scale are presented in
Table 3.1.

Table 3.1: Summary of scales for 8 constructs in the model
CONSTRUCT CODE ITEM SOURCE
Work challenge Wor1
Wor2
Wor3
Wor4
Wor5
Your current work is enjoyable
Your current work has a lot of challenges
Your work allow to use personal skill well
Your work need high responsibility
Your work is diversiform
Kim Dung, 2005
Fegusion, 1990
Walker, 2001
Scale from 1( total disagree) to
5 (total degree)
Pay Pay1
Pay2
Pay3
Pay4
Your salary is fairly high compared with its other company
in the same industry
You can live based on income
Salary is correspondent with working result
Salary, income is pay fairly
Kim Dung, 2005
Mathis and Jackson, 2003
Parker and wright, 2001
Scale from 1(total disagree) to
5 (total degree)
Benefits Ben1
Ben2
Ben3
Company has good policies of benefit
Company has good policies of health and medical
insurance
Company has subsidized policies to personnel’s difficult
situations
Kim Dung, 2005
5 (total degree)
Working
environment
Env1
Env2
Env3
Env4
Env5
Work strain is low
Part time working is very rare
Workplace is clean and comfortable
Long-term employment is stably secured
Working equipments are enough and safe
Kim Dung, 2005
5 (total degree)

Leadership
support
Sup1
Sup2
Sup3
Sup4
Sup5
Sup6
Sup7
Sup8
Superior always discuss you about related work
Superior encourages you to contribute important decision
You are known the extant of working responsibility
You are known the evaluation of superior about your
fulfillment
Superior always support you on the work’s difficulty
You are respected and trusted on work
Superior’s behavior is courteous
You are treated fairly and indiscriminately
Kim Dung, 2005
5 (total degree)
Opportunities of
training and
promotion
Pro1
Pro2
Pro3
Pro4
Pro5
Pro6
You are known promotion conditions
Company gives you a lot of promotion chances
Company has fair promotion policies
You are trained essential knowledge and skill on work
Company give you many chances of personal development
Company help you developing professional
Kim Dung, 2005
5 (total degree)
Job satisfaction Job1
Job2
Job3
Job4
Job5
Job6
Job7
You like to work with company
You become fond of company
You satisfy with current work
Company is a suitable place for you to work
You don’t intent to leave company
You want to build company prestige
You are trying to fulfill company work well
Hilb, 2003
5 (total degree)
Retention Ren1
Ren2
Ren3
Ren4
Ren5
intent to stay in company next time
unclear intention to stay or leave
leave surely company among a year
intent to leave company next time
stay in company long time surely
Hilb, 2003
5 (total degree)

3.3 Method of data collection
 Sample size :
- 250 bankers in commercial banks in Ho Chi Minh City were approached for
surveys. Respondents include male and female; young and old; state-own
banks and private banks (limited banks and foreign bank branches); big-scale
or medium-scale banks in Ho Chi Minh City.
- Respondents are selected with high grade as senior-officers, supervisors and
managers holding bachelor, master degree or higher degree. They are working
in major sections as Loan, Trade, Remittance, Card, Teller, Cashier,
Accounting and Deposit.
 Method for data collection:
- In-depth interview: to get qualitative data from bankers at commercial banks in
Ho Chi Minh City. The results were used as additional inputs into the process
of questionnaire design.
- Questionnaire: using quantitative/structured questions to measure various
constructs in the model in order to empirically test the hypotheses.
 Interview process: the interviews were face-to-face interview, the interview
question around job satisfaction, which factors make them satisfy or dissatisfy
on their work, which ones are their most interested in at work… The collected
information was used to modify for questionnaire design.
 Data collection process: 250 questionnaires were delivered via email,
colleagues, and majority of questionnaires sent to Human Resource
Department in selected commercial banks directly. The response rate is 76% or
190 respondents which were considered fairly encouraging where commercial
banks in Ho Chi Minh City were not familiar with such kind of surveys. After
filtering, a number of questionnaires were eliminated due to many missing
values. The data were based on 160 questionnaires – the sample.
3.4 Method of analysis
Descriptive and inferential statistics (Cronbach Alpha, EFA, Correlation,
Multiple regression analysis) using SPSS software package. The analysis process
is implemented as follow:

3.4.1 Assessment of measurement of scale
The multi-item scales developed above have to be evaluated for their reliability,
unidimensionality, and validity. Cronbach Alpha is the most commonly use
approach to test reliability. Cronbach Alpha will be high if the scale items are
highly correlated. Unidimensionality is defined as the existence of one construct
underlying a set of items (Garver and Mentzer, 1999). Unidimentionality should
be test before doing reliability tests because reliability such as Cronbach Alpha
does not ensure unidimensionality but instead assumes it exists.
In the current research, the main assessment method is exploratory factor
analysis (EAF) using SPSS 11.5. There are two basic methods used for
extracting factors in EFA, common factor analysis and principal components
factor analysis. While principal component factor analysis is used mainly for
item reduction and test unidimensionality, reliability, common factor analysis is
for exploring the latent dimensions represented in the original variables (Conway
and Huffcutt, 2003) and test convergent validity, discriminant validity.
The analysis process was implemented through the two respective steps:
 EFA with principal components, eigenvalue ≥ 1 and VARIMAX rotation was
applied to each of the 7 constructs under investigation (Conway and Huffcutt,
2003). The main purpose of this step is to see whether the scale for each
construct under investigation is unidimensional (i.e. first-order construct) or
multidimensional (i.e. second-order construct). For a scale to be empirically
unidimensional, the factor analysis must result in only one factor extracted.
Moreover, items with low factor loadings <0.40 were eliminated because they do
not converge properly with the latent construct they were designed to measure
(Garver and Mentzer, 1999). Then, reliability analysis (Cronbach Alpha) was
applied to each set of items (i.e. each scale) to assess and refine the measurement
items. Items having low Cronbach Alpha ≤ 0.60, item-to-total correlation
coefficients ≤ 0.35 were eliminated.
 A joint EFA with the same setting (i.e. principal axis factoring, eigenvalue ≥ 1
and VARIMAX rotation) was performed. Given the result of step 1 where each

item loads highly on the factor representing its underlying construct, this joint
EFA allows all items to correlate with every factor without being constrained to
correlate only with its underlying factor (Kline, 1998). Consequently, it allows
the investigation of the general correlation pattern of the measurement items
(Fabrigar et al., 1999).

First, no item load highly on more than one factor to indicate unidimensionality
measurement, i.e. one item measures only one construct (Anderson and Gerbing,
1988). Second, all items comprising a scale must load highly on one factor
representing the underlying construct. High loadings of all items indicate
convergent validity, while loading on only one factor indicates
unidimensionality construct. Third, no factor consists of two sets of items
loading highly on it to indicate discriminant validity (Hair et al., 1998; Garver
and Mentzer, 1999).
3.4.2 Multiple regressions
After completing the refinement, the multiple regressions were implemented to
identify quantitative the relation of antecedent factors and job satisfaction, the
relation of job satisfaction and retention.
After analysis steps above, the empirical results are figured out. Based on these
results, the discussions are implemented in order to draw managerial implication
and suggest a recommendation for further research or managerial problems.
In order to test the model and hypotheses stated in the previous chapter, this
research adopts the quantitative approach in which the data were collected by
means of a questionnaire survey.

CHAPTER 4
RESEARCH RESULT
4.1 Introduction
The previous chapter describes the research design, the constructs and the
measurement scales used in this study. This chapter presents sample
characteristics, the assessment and refinement of these measurement scales
based on the data set of 160 cases, the results from statistical estimation, the
discuss and managerial implications.
4.2 Sample characteristics
As mentioned in the previous chapter, the data were collected from 250
questionnaires delivered through colleagues and email to Human Resource
Department in selected commercial banks. The response rate is 76%, which is
considered fairly encouraging where commercial banks in Ho Chi Minh City are
not familiar with such kind surveys. After filtering, a number of questionnaires
were eliminated due to many missing. The data were then based on 160
questionnaires – the sample. The following sections describe the main
characteristics of the sample.
Table 4.1: Sample characteristics
Categories Frequency Percent Valid percent
Cumulative
percent
Bank ownership
State-own 68 42.5 42.5 42.5
Private 92 57.5 57.5 100.0
Bank size
20-50 49 30.6 30.6 30.6
51-100 34 21.3 21.3 51.9
101-200 17 10.6 10.6 62.5
> 200 60 37.5 37.5 100
Banker age
< 30 57 35.6 35.6 35.6
31- 40 73 45.6 45.6 81.2
41 - 50 18 11.3 11.3 92.5
> 51 12 7.5 7.5 100.0
Banker gender
Male 96 60.0 60.0 60.0
Female 64 40.0 40.0 100.0

The sample consists of 68 (equivalent to 42.5%) state-own banks, 92 (equivalent
to 57.5%) private banks. These percentages reflect the structure of the whole
population which is dominated by private sector.
The sample consists of 49 (equivalent to 30.6%) bankers working for
commercial banks which have 20 to 50 staffs; 34 (equivalent to 21.3%) bankers
working for commercial banks which have 51 to 100 staffs; 17 (equivalent to
10.6%) bankers working for commercial banks which have 101 to 200 staffs, 60
(equivalent to 37.5%) bankers working for commercial banks which have over
200 staffs.
The majority of bankers in the sample are around of 31 to 40 year olds. Among
the 160 cases, 35.6% or 57 bankers which are less than 30 years old, 45.6% or
73 bankers are between 31 to 40 years old, 11.3% or 18 bankers are between 41
to 50 years old , and only 7.5% or 12 people are more than 51 years old.
There are 60% or 96 male respondents and 40% or 64 female respondents. This
suggests that majority of key personnel in banking industry who were
participated in this study are male.
4.3 Assessment of measurement scales
Following the procedure and criteria described in Chapter 3, the process of
assessment and refinement of measurement scales are implemented through two
steps using of SPSS 11.5 software. The first step is EFA and Cronbach Alpha to
assess unidimentionality and reliability. The second step is EFA with all scales
together in order to assess convergent validity and discriminant validity. In this
process, the items which do not meet evaluating criteria are eliminated. After
refinement, reliability of scales is re-assessed by Cronbach Alpha. Criteria of
refinement of items include: factor-loading >0.40, item-total correlation >0.35,
Cronbach Alpha > 0.60, % of variance > 60% (Hair and et al., 1998).
4.3.1 EFA for individual scales of antecedent factors
EFA results (Table 4.5) show that out of seven scales, four were immediately
accepted while three scales needed some refinements. The scales that did not

require any modification are shown in Table 4.5. These include salary-pay (4
items), benefit (3 items), opportunities of training and promotion (6 items),
colleague relationship. Using the latent root or Eigenvalue greater than 1
criterion, the results show that only one factor was extracted for each of these
scales. The variance explained by the extracted factor ranges from 60.97% to
70.87% while the factor loadings are all above the threshold of 0.40. These
results indicate that all of the four scales listed above are unidimensional.
After established, these scales are unidimensional, the reliability was assessed.
As shown in Table 4.5, the Cronbach Alpha of these four scales are all well
above the threshold of 0.60 (range is from .794 to .869). The item-total
correlations, which range from 0.450 to 0.825, are also all above the threshold of
0.40. All items comprising these four scales were therefore retained.
Table 4.2: EFA and reliability test results for four scales
Construct / Items
Factor
loading
%Variance
Extracted
Eigen value
Item-total
correlation
Cronbach
Alpha
Salary 66.393 2.656 .829
Pay1 .858 .642
Pay2 .808 .648
Pay3 .803 .721
Pay4 .788 .624
Benefit 70.871 2.126 .794
Ben1 .861 .668
Ben2 .848 .599
Ben3 .816 .647
Colleague
relationship
68.261 2.73 .826
Cow1 .926 .649
Cow2 .884 .740
Cow3 .833 .825
Cow4 .629 .450
Opportunities of
training & promotion
60.971 3.658 .869
Pro1 .696 .567
Pro2 .855 .778
Pro3 .815 .716
Pro4 .706 .576
Pro5 .837 .739
Pro6 .761 .644
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The scales that needed some refinements are shown in Table 4.6. All these scales
loaded on two factors, the value of variance range from 26.08% to 40.02%,
Cronbach Alpha range from .561 to .929. The scales were then analyzed to
assess unidimentionality and reliability for each factor loaded respectively.
 Work challenges: the original five items of this scale loaded on two factors:
Factor1 were loaded by three items: wor2, wor4, wor5 and Factor2 were loaded
by four items: wor1, wor2, wor3, wor4. EFA and Cronbach Alpha were applied
with result as follow: Factor1 with % of variance equals 62.55%, eigenvalue
equals 1.876, Cronbach Alpha equals .699 is retained: factor2 with % of variance
equals 52.21%, eigenvalue equals 2.088, Cronbach Alpha equals .578 is deleted.
 Working environment: through EFA with principle component extraction,
VARIMAX rotation, the scale is divided into 2 factors. Factor1 consists of three
items: env3, env4, env5; factor2 consists of two items: env1, env2. These factors
continue to test unidimentionality and reliability individually. Result of factor1
as follow: % of variance equals 65.08%, eigenvalue equals 1.952, Cronbach
Alpha equals .724, which is retained because its values above are over threshold
value of % of variance, eigenvalue, Cronbach alpha. Results of factor2 are: % of
variance equals 68.12%, eigenvalue equals 1.363, Cronbach Alpha equals .53 <
threshold value equals .60, which is deleted.
 Leadership support: eight factors of this scale loaded on two factors:
factor1were loaded by seven items: sup1, sup2, sup4, sup5, sup6, sup7, sup8 and
factor2 were loaded by four items: sup1, sup2, sup3, sup4. EFA and Cronbach
Alpha were applied for two factors with result as follow: factor1 with % of
variance equals 61.07%, eigenvalue equals 3.981, Cronbach Alpha equals .870 is
retained; factor2 with % of variance equal 57.18%, eigenvalue equals 2.367,
Cronbach Alpha equals .572 is deleted.
After refinement, there are five items eliminated consist of wor1 (Your current
work is enjoyable), wor2 (Your current work has a lot of challenges) of work
challenge construct, en1 (Work strain is low), en2 (Part time working is very
rare) of working environment construct, sup3 (You are known the extant of
working responsibility) of leadership support. Items of the scales adjusted only
loaded on one factors with result shown on Table 4.6
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Table 4.3: EFA and reliability test results for three scales refined
Original scale Refined scale
Items Factor loading Item-total Factor loading Item-total
1 2 correlation 1 2 correlation
Work challenge
Wor1 .685 .407 Eliminated Eliminated
Wor2 .690 .351 .560 .832 .504
Wor3 .662 .467 Eliminated Eliminated
Wor4 .676 .341 .536 .779 .478
Wor5 .913 .403 .760 .574
Variance extracted 36.52% 32.26% 62.55%
Eigen value 1.826 1.613 1.876
Cronbach Alpha .714 .699
Working
Environment
Env1 .828 Eliminated Eliminated
Env2 .816 Eliminated Eliminated
Env3 .867 .842 .582
Env4 .838 .877 .65
Env5 .701 689 .42
Variance extracted 38.98% 27.56% 65.08%
Eigen value 1.949 1.38 1.952
Leadership support
Sup1 .353 .707 .673 .573
Sup2 .367 .732 .694 .594
Sup3 .646 Eliminated Eliminated
Sup4 .676 .402 .783 .683
Sup5 .780 .759 .716
Sup6 .772 .792 .691
Sup7 .785 .759 .650
Sup8 .816 .755 .640
Variance extracted 40.02% 26.08 61.07%
Eigen value 3.202 2.086 3.981
4.3.2 EFA for all scales of antecedent factors together
After establishing the unidimensionality and reliability of each scale, all 30 items
were jointly subjected to a common factor analysis. This approach allows all
items to correlate with every factor without being constrained to correlate only
with its underlying factor (Kline, 1998). In this procedure, items loaded highly

on more than two factors were eliminated, loading of items smaller threshold
value of .400 are eliminated. These secure unidimensionality and convergent
validity. The results of this procedure are shown in Table 4.7. As shown in the
table, 7 factors consist of 22 items were retained which together explain 61.9%
of the total variance. Factor loading of each of the 22 items vary from 0.419 to
0.879 which are higher than the threshold of 0.40. There is no more than one set
of items loaded highly on one factor. It secures discriminant validity. Regarding
the issue of appropriateness, the result of the Bartlett's Test of Sphericity and
KMO measure (Harris and Halpin, 2002) indicated that the degree of inter-
correlations among the items was suitable for EFA procedures (sig. equals 0.000,
KMO equals 0.828).
6680297

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