STRATEGIC HUMAN RESOUCE MANAGEMENT AGRIBANK

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STRATEGIC HUMAN RESOUCE MANAGEMENT
AGRIBANK
STUDENT ID
STUDENT NAME
Word count: 3826

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EXECUTIVE SUMMARY
The purpose of this paper is to clarify how Agribank efficiently superintend human capital
through the assessment of its Strategic Human Resource Management. The assessment will focus
on overall human resource management both internally and externally. Although the general
situation is mentioned, the focus is on two key human resource management practices that are
critical to achieving a consistent level of service quality: access and retention of talent. Both of
these cases relate to Agribank's employee compensation system and insist on a replacement or
promotion decision to retain qualified personnel. Due to the impact of existing workforce
management methods, there are currently lack of adept employees in the financial and banking
sector under the workforce, so Agribank strives to change its policies to ensure a stable and
qualified workforce.

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TABLE OF CONTENT
EXECUTIVE SUMMARY ............................................................................................................ 1
TABLE OF CONTENT.................................................................................................................. 2
1. INTRODUCTION .................................................................................................................. 3
1.1. About Agribank................................................................................................................ 3
1.2. Agribank - Organizational structure................................................................................. 3
1.3. Agribank - Organizational culture.................................................................................... 4
2. HUMAN RESOURCE MANAGEMENT STRATEGY........................................................ 5
2.1. Current Human resource management at Agribank......................................................... 5
2.2. Human resource challenges.............................................................................................. 6
2.2.1. Recruitment and retaining Talented Employees....................................................... 6
2.2.2. Training and development ........................................................................................ 7
2.3. Human resource gaps for an increase of growth.............................................................. 8
2.3.1. Promotion procedure in accordance with organizational structure and State
direction .................................................................................................................................. 8
2.3.2. Lack of training for customer service improvement................................................. 8
2.4. Strategy to increase productivity toward Human resource gap........................................ 9
2.4.1. Training and development ........................................................................................ 9
2.4.2. Career promotion practices - retention and engagement .......................................... 9
2.5. Recommendation on key performance indicator for measuring employees productivity
levels 10
3. CONCLUSION..................................................................................................................... 12
REFERENCE LIST ...................................................................................................................... 13

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1. INTRODUCTION
1.1. About Agribank
Agribank is known as the State-own commercial bank in Vietnam. The bank is a leading role for
the mission of developing agriculture and rural areas (Agribank. Homepage 2019). The 2017
recorded the profit growth of Agribank at 20%, reaching VND 5018 million. The total assets of
Agribank reached VND 1.2 trillion. Since the establishment in 1988, Agribank has been
sustained its steady growth and business efficiency. It has always been an effective actor on
behalf of the Party and State in developing agriculture and rural areas. Furthermore, Agribank is
a Vietnamese leading bank that affirms international economic cooperation as well as foreign
projects. It actively contributed to the community via social activities and charity programs.
With more than 63.4 trillion VND for the capital, 70.1 trillion VND of total assets, almost 40,000
employees working in 2,300 branches and trading offices at the end of 2013, Agribank is
Vietnam's largest financial institution. In order to maintain its competitiveness, the bank is
constantly focusing on developing its human resources by enhancing the existing staff and
actively recruiting talents. However, with the emergence of financial institutions, banks and
international insurance companies, the recruitment of talent is becoming a fierce competition.
1.2. Agribank - Organizational structure
It is stated that the organizational structure reflecting the methods and process of how the work
carried and linked in order to deliver value to customers as well as achieve organizational
expectations (Hammer 2001). The interrelation between organizational structure and human
resource management policies will impact on the employees’ performance via the
encouragement of participation and involvement. The human resource management at Agribank
maintains the traditional feature with functional organizational structure. Particularly, it is
functionalized by various departments acquiring specific skill sets. The leading managing board
is the General Director under committee’s policy, risk management, personnel, asset-liability
committee, investment and internal audit.

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Figure 1Organizational structure of Agribank Vietnam
The functional structure of Agribank helps to ensure the control toward its enormous networks
with an effective communication flows. Furthermore, a descriptive function would help
Agribank in easing the recruiting process with transparent, unique decision criteria and the
ability to train through clearly defined content and needs analysis.
1.3. Agribank - Organizational culture
Organizational culture suggests that informal behavior, such as behavioral norms, rituals, jargon,
stories is only specified by the organization. Culture reflects the cross-functional integration of
employees and beliefs and principles. As a state-owned bank, with the centralization of the
power of the board of directors, the Agribank still maintains its power culture. This culture is
consistent with the top-down communication approach proposed in the banking structure. As a
result, strategic decision-making processes and operational implementation can be rigorous and,
in some cases, may be bureaucratic and not sufficiently flexible (Schuler and Jackson 2007). The

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core cultural values of Agribank are honesty – discipline – creativity – quality – efficiency.
Indeed, in order to achieve core cultural values, the transformation of organizational culture
styles requires greater flexibility and external focus, from hierarchical to clan culture.
2. HUMAN RESOURCE MANAGEMENT STRATEGY
2.1. Current Human resource management at Agribank
The Agribank has a significant human resource asset that can be transparently distributed
according to the role, level and position of the functional department. The bank specializes in
training through a series of in-house training courses to update and improve its expertise. In
addition, Agribank emphasizes the importance of wages growth and treat it as one of three major
goals of the company’s annual business plan. For instance, according to Agribank Annual Report
in 2017, this company has set the core of all goals such as growth in the profit, financial and
income of employees.
For the term of culture, because Agribank is a state-owned company, its way of human resource
management is very specific and Vietnamese culture. However, under the impact of new labor
laws, social situation, and global economic integration. Agribank has restructured the salary and
bonus system to suit the advanced human resource management trend of the world.
Criterion Unit (VND) Year 2017 Plan 2018
Plan Actual
A Of employees
1 Total employees Person 37,697 36,682 38,149
2 Average salary Million/ month 20.36 22.03 22.89
3 Salary fund Million VND 9,210,131 9,695,150 10,480,000
4 Compensation, bonus fund Million VND 800,000 613,800 800,000
5 Average income Million VND 22.1 23.42 24.64
B Of management level
1 Number of managers Person 24 23 25
2 Average base salary Million VND 29.24 29.24 29.24
3 Salary fund Million VND 17,016 18,133 17,544
4 Average salary Million VND 58.47 65.2 58.48
5 Bonus, compensation salary Million VND 2,200 2,260 2,193
6 Bonus, income Million VND 19,216 20,393 19,737
7 Average income Million VND 66.72 73.89 65.79
Figure 2 Salary, bonus and allowance budget of Agribank in 2017/18
In the field of technology and banking technology, Agribank has invested heavily in technology
and infrastructure as well as a strategy to improve the capacity of staff through intensive training
in technology, since then, improve customer service and competitive advantage.

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Agribank has abundant human resources ready to meet the expansion needs of the company.
However, the company faces a challenge from improving the quality of its employees to ensure
service quality. This problem cannot be solved by raising salaries and bonuses, it requires a
perfect combination of financial and non-financial activities, a well-trained strategy for short-
term and long-term goals. In addition, the application of new personnel management strategies
requires the company to restructure strongly from organizational culture to operational systems.
This requires a lot of time and effort.
2.2. Human resource challenges
Employees are a valuable asset of the company. A company that invests heavily in its teams will
grow faster and outrun competitors. Finding the right people at the right time for important
positions in the company is no longer a strange job for HR professionals, but effective talent
management is what makes the difference for the company (Ashton and Morton 2005). The core
content is that common human resources issues must be fully understood so that appropriate
policies and processes can be developed immediately. Talent management requires an integrated
strategy from attracting, training, retaining, developing to transforming an organization's human
resources. (Van Dijk 2008).
Since human resource management is an important function of any organization, there are also
some challenges in human resource management that need to be addressed. These personnel
challenges can be environmental challenges, organizational challenges and personal challenges.
These are not one-dimensional but multidimensional issues that need to be addressed, processed
immediately.
Therefore, understanding the interests of employees, labor law, leadership development and
other complex areas will help the company maintain a competitive advantage and create long-
term success for the organization.
Regarding the nature of the banking industry, the role of human resource department has grown
steadily by various means in accordance with the service base business. Especially, the balanced
control of human capital and financial risks has emerged the level of challenge confronting
banking activators, as such Agribank. The set of skilled workforce would enhance the ability in
managing the financial risks on a regular basis. Hence, the crucial responsibilities of Human
Resource department is to ensure the presence of those talented people in the right position, at
the right time in the bank. Besides, retaining those talented within the bank for a long-term
corporation.
2.2.1. Recruitment and retaining Talented Employees
Attracting and inviting talented people joining a company is the most challenging task for human
resource department. The key issues that Human Resource managers and organization are the
success of attract and retain talents into their workforce (Hiltrop 1999). Those talents play the
vital role in pushing the growth of a company. In the meantime, retain talents after a period of

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cooperation is the other challenge in today's competitive advantages which talents have more
choice for their career path. The achievement of sustainable business effectiveness is the core
responsibility of human resource management in terms of talent acquisition (Narkhede, Parag &
Joshi, 2007). Therefore, strategic planning in human resource management would provide some
solution in term of acquisitioning and keeping talents. There is no doubt that recruiting the
success of a firm in today's business world has been influenced by the talent recruitment and
retain.
Across the banking industry, there is a continuous requirement of workforce transition
restructure in order to improve talent resource and experience. Therefore, it forces the banks into
a challenge of employer branding battle so as to attract the best people. Furthermore, employing
modern human resource management practices is crucial for keep them stay and commit with
organization in a long period of time.
The shift of the banking industry has been significant from the customer centric industry into the
aggressive revenue competition. It forces the banking system need to continuously upgrade their
innovation, such as technological perspective as well as operational practice. It leads to the
misconduct of competencies of long-time service bank employees in order to satisfy the new
expectations toward revenue achievement. However, there is a fact that the diminishing
employees may lead to the revenue decrease. The tied relationship between banking employees
and customers will terminate which means the loss of valuable customer relationships.
Therefore, as other banking competitor, Agribank is in the battle of inviting talents all levels in a
competition with domestic and foreign financial institutions at a higher compensation rate.
2.2.2. Training and development
Currently, the reason for quitting the majority of employees is that there is no prospect of career
development. Training is the key to triggering enthusiasm at work, the desire to reach perfection
and loyalty of employees. Training brings positive results when and only if it has compelling
content that is relevant to their work and accessible. However, the company wants to maintain its
competitiveness continuously so it often organizes continuous training for employees, which
makes the training work overloaded and tedious.
Regular training will make the employee's career path clearer. From there, the talent factors in
the company can reveal the leadership potential and dedication spirit for the development of the
company. In some cases, this issue is the most easily solved of human resource management
challenges. With the help of a distance learning system, employees in the company can access
online courses, they can study at home or at a business trip without having to visit the company,
can study on weekends or while waiting for the bus.
The rapid change of technology and its applications in the banking sector have a significant
impact on the company's staff training. It is not merely a change of facilities but also the
approaches, policies and working methods in the banking sector. Therefore, the management of

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human resources in the company must ensure the similarity in updating new knowledge in the
banking field for both long-term employees and new entrants. Human resources should focus on
training, empowering and then measuring their performance.
The banking industry is currently a highly competitive industry with similar products and the
cost of changing banks is negligible. In order to make a difference and leave a good impression
on customers, banks need to improve the quality of customer service and this can only be done
through qualified staff. A poor customer service may not result in an immediate drop in sales, but
it will be dangerous for future sustainability. Compared to other banks, Agribank's customer
service has been significantly improved, but it is still a considerable distance from other banks.
The current number of customers that Agirbank has comes from the reputation of a state-owned
company, where customers feel secure about their deposits, rather than from the reputation of
customer service. Obviously, the investments in employee training of Agribank are not really
effective to increase service quality and improve competitive advantage.
2.3. Human resource gaps for an increase of growth
2.3.1. Promotion procedure in accordance with organizational structure and State
direction
With a hierarchical management structure and a centralized culture of power, Agribank has a
flexible and inadequate working environment for employees, which makes it difficult to fully
exploit and realize its potential and creation of its staff. Empowering all employees and being
creative at work requires a unity of organizational culture, structure, human resource
management policy, procedures and practices. However, with the current structure, Agribank
could not improve its performance nor attract a young workforce. Whereas the participation of
private and foreign players in financial institutions, the compensation and benefits from those
competitors attract a large number or qualified workforce as well as their willing to pay higher to
grasp the good talents. Therefore, in the context of the increasing number of international banks
joining Vietnam, this issue widens the gap between Agribank's human resource management and
sustainable development.
2.3.2. Lack of training for customer service improvement
The bank's human resources have not yet shown a significant contribution to improving the
quality of customer service, that is, the limited contribution to the value and rarity of the bank's
competitive advantage. In the current organization, human resource management practices are
not adopted by modern strategic management perspectives, but rather a true ancillary activity
without a link to business strategy. This competitive advantage of Agribank in the market is
mainly based on organizational standards rather than human resources.
The restriction on the number of skilled and highly qualified employees in the banking and
finance industry makes competition in the labor market has become hotter than ever. With the

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advantage of a rural economic and social development company, Agribank has taken the right
step when developing a plan to increase salaries and bonuses for its employees and people to
improve the quality of life of the team. Staff, thereby attracting more workers. Currently,
Agribank has a large and powerful workforce. However, the bank is unable to effectively exploit
this potential due to the limitations in its human resource management practices, a traditional
form of state management.
2.4. Strategy to increase productivity toward Human resource gap
The current training work at Agribank focuses on improving professional knowledge rather than
encouraging breakthrough and creative ideas. The hierarchical management mechanism and the
specific culture of state-owned companies make the communication between departments
become incoherent. As a result, it only improves the quantity, not the quality of the labor force.
Besides improving the standard of living for employees, through policies to improve wages and
benefits. Agribank needs to make a significant improvement from the organizational level, a shift
in culture and system structure, to departments including human resource management.
2.4.1. Training and development
Training and development are the two elements that Agribank should pay an investment on their
human resource management in order to achieve management abilities and workforce quality
(Truitt 2011). The requirements of training and development milestone are better to follow the
profound changes in the investment effectiveness. There are few factors that Agribank should
adjust in order to maximize the achievement of training and development. Firstly, Agribank
should take into consideration of customer service training in the technological advance world.
Particularly, continuing updating employees’ knowledge and competencies on various technique
to serve and pull customer would lead to the achievement of creative work performance.
Secondly, the leading managing board should be trained to improve the capability of
management reflecting their recognition of potential of each employees into to promote right
people to the right positions at the right skill set. Lastly, the employees should be trained in order
to improve the flexibility of adaption to changes in the competitive world. These training and
development sections aims to help employees at all levels to acknowledge the required
knowledge and skill set needed in the changing working activities as well as the long-term
development for their career prospects.
2.4.2. Career promotion practices - retention and engagement
Agribank can apply its commitment to learning and developing through practical experience,
working rotation, building relationships with partners and universities, and meeting with
executives and business consultants. On the criteria of reviewing and evaluating the senior staff's
capacity, thereby improving the quality of the leadership team in the company.

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The purpose of the employee retention plan is to maintain qualified employees to stay in the
company, not retain all employees. This brings a prospect for human resource management in
increasing competitiveness of Agribank.
Retaining employees is a challenge for Agribank's human resource management, new employees
have difficulty adjusting to the working environment of a state-owned company. Although there
have been discussions about changing the company's brand name, strategies for developing
career opportunities, focusing on employee satisfaction, improving the welfare and salary
system, Agribank should have a formal employee retention program.
The utilization of qualified employees’ retention are both push and pull factors, particularly the
combination of financial and non-financial rewards. The sign that human resource management
department at Agribank should take into consideration to measure the employees’ retention is
their satisfaction toward work effort in relation with performance appraisal (Joubert, Madau, &
Grobler 2017). Those rewards are motivation elements at all levels. Therefore, a comprehensive
succession plan can help potential leaders inherit the achievements and knowledge of the leaders
approaching retirement age, thereby ensuring the sustainable development of the company.
2.5. Recommendation on key performance indicator for measuring employees
productivity levels
In any organizations, key performance indicators are effective tools to measure their employees’
performance. It is designed in order to motivate employees’ performance improvement but have
no negative impact on their behaviors (Key Performance Indicators, 2010). Different expectation
and nature of the business, the metrics to track employees’ productivity are varied for a better
team management. Key performance indicators provide insights of the evaluation of the results
of employees’ responsibilities, based on the monitor of performance. However, these techniques
are not in use of employee’s value and profitability measurement regarding to its inaccuracy of
true overall performance.
Monitoring and maintaining the workplace productivity are challenges. In evaluating employees’
productivity, the organization expect the commitment for employees toward their performance
and hard working for their goals which are consistent with company’s goals.
As per discussed, banking sectors rely heavily on the loyalty of customers, which depends on the
customer service quality. The employee performance in relationship with customers at all levels
are key factors to produce a bank’s service quality. Therefore, in designing key performance
indicators for Agribank, it is essential to review all aspects that the organization expect the staff
to perform and how it impacts on the overall company goals achievement.
There are five factors that recommended for Agribank to carefully consider in designing key
performance indicators in accordance with the organizational achievable goals. The overall

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objectives of Key performance indication in human resource management is to gain the
competitive advantages toward competitors. Therefore, here are list of suggested key
performance indicators in order to measure Agribanks’s employees productivity
- Customer retention rate: Customer retention rate is a measure of how an enterprise retains
customers over a specific period of time. It reveals whether efforts in improving customer
service and marketing will bring a good result. Retaining customers not only helps the
company assess how well its staff is doing, but it is also a tool to help the company make
important decisions to achieve the desired growth goals. This indicator is highly
correlated with the churn rate: the higher the retention rate, the lower the churn rate
- Customer Satisfaction: The customer satisfaction index is one of the indicators to
evaluate the performance of businesses. This indicator should be at the forefront of the
mind of all personnel in the company from employees to leaders. By continuously
measuring customer satisfaction, the company will identify the missing aspects of its
products and services, thereby offering a more effective recovery plan.
- Turnover rate: Employee turnover index is the index used by HR managers to evaluate
the effectiveness of employee retention. Whether positive or negative, employees will
come and go based on their talents and desires. Employee turnover index helps managers
make necessary predictions for talent replacement. Low employee turnover ratio shows
employee satisfaction with the company, thereby helping the company minimize new
training and recruitment costs.
- Initiative & innovation: Initiatives can appear unexpectedly in the process of solving
problems or contradictions. By paying attention to the small improvements created by
team members, the team leader will find out what the initiative is.
- Number of sales: The number of sales of an employee representing the number of
products sold by that employee over a specified period of time. This indicator most
clearly reflects the sales ability of that employee
- Attendance: Attendance is an essential element in assessing employee competence.
Building a productive staff in the company requires the time and dedication of all
employees. An employee who often comes late and leaves the company early or use sick
leave arbitrarily will certainly not contribute effectively to the development of the
company.
Employee productivity is a key factor in efficiency. In order to take a leap in performance, cut
costs, retain customers and talent, performance measurement metrics must be widely
disseminated throughout the entire company. By understanding these mission unfold toward key
performance indicator measurement, Agribank would have a necessary information about
business process that need to be analyzed. The regular key performance indicator crosschecking
would provide essential information for maintenance and employees’ development. Furthermore,
the tracking of key performance indicator of employees would also guide Agribank human

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resource management on how successful they are in developing their quality of employees. In
the meantime, the practice of key performance indicator is also a metric to the company business
success by which the employees are cleared about their roles, responsibilities and duties on
behalf of their particular departments.
3. CONCLUSION
Generally, although Agribank operates with a large workforce and high manpower, the human
resource management practice at Agribank constraint the traditional personnel management by a
state-owned style. Agribank has a gap in their human resource management for their
improvement of competitive effectiveness. Furthermore, the inflexibility of the organizational
structure shows the limits in improving the quality of the workforce. Overall, as the matter of
fact, the success of Agribank in competitive world relies upon the intellectual development of
their employees. Therefore, an appropriate human resource management strategy is essential for
Agribank to achieving the organizational goals via efficient training, development and rewards
for increasing employees retention and lower employee turnover rate.

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REFERENCE LIST
Agribank. (2018). Annual report 2017. Report. [accessed Mar 19, 2019]. Available at:
http://www.agribank.com.vn/32/1982/gioi-thieu/an-pham-agribank/bao-cao-thuong-
nien/2018/01/7589/annual-report.aspx
Agribank. Homepage. (2019). About us – Agribank Culture. Webpage. [accessed Mar 19, 2019].
Available at: http://www.agribank.com.vn/102/1181/about-us/agribank-culture.aspx
Hammer, M. (2001) Proceeded change. Journal of Business Strategy, 22(6), p. 11-15
Hiltrop, J.M., 1999. The quest for the best: human resource practices to attract and retain talent.
European Management Journal, 17(4), pp.422-430.
Ashton, C. and Morton, L., 2005. Managing talent for competitive advantage: Taking a systemic
approach to talent management. Strategic HR review, 4(5), pp.28-31.
Van Dijk, H.G., 2008. The talent management approach to human resource management:
attracting and retaining the right people. Journal of Public Administration, 43(Special issue 1),
pp.385-395.
Narkhede, Parag & Joshi, S.. (2007). Challenges of Human Resource Management in borderless
world. Global Journal of Management Science. 1. 167-173.
Schuler, R. and Jackson, S. (2007) Strategic human resource management. (2nd Ed.). Malden,
MA: Blackwell
Key Performance Indicators. (2010). Physical Asset Management, pp.319-322. https://doi-
org.dbonline.cesti.gov.vn/10.1007/978-1-84882-751-6_23
Laddha, A., Singh, R., Gabbad, H. & Gidwani, G.D. 2012, "EMPLOYEE RETENTION: AN
ART TO REDUCE TURNOVER", International Journal of Management Research and
Reviews, vol. 2, no. 3, pp. 453-458.
Joubert, P., Madau, D. & Grobler, B. 2017, "Employee retention and talent management at a
sugar mill in South Africa", Problems and Perspectives in Management, vol. 15, no. 3, pp.
306-315.
Truitt, D. L. (2011) ‘The Effect of Training and Development on Employee Attitude as it Relates
to Training and Work Proficiency’, SAGE Open. doi: 10.1177/2158244011433338.

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