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Southern Luzon State University Republic of Philippines IMPACT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON ORGANIZATIONAL PERFORMANCE IN SMALL AND MEDIUM ENTERPRISES IN THAI NGUYEN CITY A Dissertation Presented to The Faculty Graduate School Southern Luzon State University Lucban, Quezon In Partial Fulfillment of the Requirements for the Degree Doctor of Business Administration by LE KIM ANH (MAY) 2013 APPROVAL SHEET In partial fulfillment of the requirements for the degree Doctor of Business Administration, this research study entitled “Impact of Human Resource Management Practices on the Organizational Performance of the Small and Medium Enterprises in Thai Nguyen Province” has been prepared and submitted by Le Kim Anh and is hereby recommended for oral examination , 2013 Alice T Valerio, Ph.D Adviser Approved by the Oral Examination Committee, in partial fulfillment of the requirements for the degree Doctor of Business Administration offered by Southern Luzon State University, Republic of the Philippines in collaboration with Thai Nguyen University, Socialist Republic of Vietnam (NAME OF PROFESSOR) (NAME OF PROFESSOR) Member Member (NAME OF PROFESSOR) Chairman Accepted in partial fulfillment of the requirements for the degree Doctor of Business Administration offered by Southern Luzon State University, Republic of the Philippines in collaboration with Thai Nguyen University, Socialist Republic of Vietnam Date APOLONIA A ESPINOSA, Ed.D Dean, Graduate School ACKNOWLEDGMENT Writing a doctoral dissertation is a gratifying but difficult and sometimes nerve wrecking endeavor that only few engaged in because it requires a lot of sacrifices and hard work from the researcher However, at the end of the task, one experiences a wonderful feeling of joy, happiness, relief and fulfillment The researcher would like to extend her sincerest gratitude and thanks to the following people who were very instrumental in the fulfillment of this research study DR CECILIA N GASCON, President of the Southern Luzon State University in the Republic of the Philippines, for her untiring effort and belief that this collaboration is possible thus enabling us to pursue the DBA degree; DR DANG KIM VUI President of Thai Nguyen University in the Socialist Republic of Vietnam, for his untiring effort and belief that this collaboration is possible thus enabling us to pursue the DBA degree DR NGUYEN TUAN ANH, Ph.D., former Director of the International Training Center, Thai Nguyen University of the Socialist Republic of Vietnam, for his enormous pursuit to provide the Vietnamese people an opportunity to grow through education; DR ALICE T VALERIO her adviser, for the guidance and endless support for the improvement of this study PROFESSORS ………… , ………………., and ……………, who composed the Oral Defense Committee, for their suggestions, comments and corrections to improve this study; ITC STAFF, for providing the necessary research materials; HER FAMILY and FRIENDS, for the love and support in one way or the other; And TO ALL who have contributed to make this study a success iii DEDICATION This research is wholeheartedly dedicated with all sincerity and love to my FAMILY… To my Mum and Sun who provided me with love and care To ALL OF THEM…I humbly dedicated my work and success in life iv Table of Contents Page Title Page Approval Sheet ii Acknowledgment iii Dedication iv Table of Contents v List of Tables vii List of Figures viii Abstract ix Chapter I: Introduction Background of the Study Objectives of the Study Hypothesis Significance of the Study Scope and Limitation of the Study Definition of Terms Chapter II Review of Literature and Related Studies Conceptual Framework 10 57 58 Chapter III Methodology Locale of the Study 58 Research design 58 Population and sampling 58 Instrumentation 59 Data gathering procedure 60 Statistical treatment 60 Chapter IV Presentation, Analysis and Interpretation of Data v 62 Chapter V Summary, Findings, Conclusions and Recommendations 77 Summary 77 Findings 77 Conclusions 79 Recommendations 80 Bibliography 81 Appendices 90 vi LIST OF TABLES No Name of tables Table 4.1.1 Percentage Distribution of Respondents’ Profile in Terms of Type of Industry and Ownership Table 4.1.2 Percentage Distribution of Respondents’ Profile in Terms of Business Characteristic Table 4.3.1 The Assessment of Respondents on HRM in Terms of Recruitment and Selection Table 4.32 The Assessment of Respondents on HRM in Terms of Training and Development Table 4.3.3 The Assessment of Respondents on HRM in Terms of Career Planning System Table 4.3.4 The Assessment of Respondents on HRM in Terms of Participation and Involvement Table 4.3.5 The Assessment of Respondents on HRM in Terms of Compensation and Benefits Table 4.3.6 The Asessment of Respondent on HRM Performance Appraisal Table 4.3.7 Perceived Organizational Performance 10 Table 4.4.1 Variables Included in Analyses 11 Table 4.4.2 Descriptive Statistics 12 Table 4.4.3 Correlations Amongst Variables vii Page in Terms of LIST OF FIGURES No Name of tables Figure Percentage Distribution of Respondents’ Profile in Terms of Type of Industry Figure Percentage Distribution of Respondents’ Profile in Terms of Type of Ownership viii Page Title: IMPACT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON THE ORGANIZATIONAL PERFORMANCE OF THE SMALL AND MEDIUM ENTERPRISES IN THAI NGUYEN PROVINCE Researcher: LE KIM ANH Degree Doctor of Business Administration Name/ Address of the Southern Luzon State University Institution Graduate School Lucban, Quezon Date Completed October, 2013 Adviser DR ALICE T VALERIO ABSTRACT The study was conducted to assess impact of human resource management practices on the organizational performance of the small and medium enterprises in Thai Nguyen Province A total of 290 managers of the small and medium-sized enterprises in Thai Nguyen City were selected to be the respondents of the study It specifically explored on the profile of the respondents in terms of Types of enterprise; Form of owner ship; Time of operated; Number of employees The study was limited to determine the perception of the respondents on the human resource practices of the small and medium enterprises in Thai Nguyen City which are classified in aspects namely: Recruitment and Selection; Training and development; Career planning System; Participation and Involvement; Compensation and Benefit; and Performance appraisal ix The 290 selected respondents were given a questionnaire designed by the researcher and complete the questionnaires after being explained and instructed by the researcher The researcher floated the questionnaire to the respondents after it had been validated by her advisor in June 2013 Recruitment and selection, based on well-defined merit and unprejudiced system developed through managerial expert opinions, using standardized test to scrutinize the exact required attitude, skills and knowledge in potential candidates showed notable significant correlation with employee performance and Perceived Organizational Performance that identification of the right candidate with required skills to perform the job for achieving organizational performance is the output of sophisticated selection system Training and development programs in organizations based on training need assessment, performance appraisal, customization and practically applicable with skills imparting capability are indicating positive correlation with employee performance and Perceived Organizational Performance A perception that the Career Planning System (CPS) is significantly correlated with employee performance and Perceived Organizational Performance is true if, the Career Planning System is based on clear career ladder, aligned goals with organizational vision, used for succession planning, transparent internal hiring, and equal unambiguous employment opportunity Employee participation related to decision-making process based on opportunities to make company and self-related decisions, suggestion collection for the betterment of organization and employee wellbeing as also on appreciation strategy has significant positive correlation with perceived organizational performance x management strategies, Personal Review 30 (1/2), 132-151 [40] Huselid, M.A (1995) The Impact of Human Resource Management Practices on Turnover, Productivity and Corporate Financial Performance Academy of Management Journal 38(3), 635-672 [41] Ichniowski, C., Kochan, T.A., Levine, D., Olson, C and Strauss, G (1996) What works at work: overview and assessment? 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Respondents Dear Respondents, I am currently conducting a study about “Impact of Human Resource Management Practices on Organizational Performance in Small and Medium Enterprises in Thai Nguyen City”: An input to an action plan is a requirement for the degree of Doctor of Business Administration The objective of this research survey is to identify and explain the extent of HRM Practices in the organizations of SMEs in Thai Nguyen and their impact on organizational performance The results of this study will facilitate the organizations to address their growth and performance and will help to design effective HRM strategies for future goals achievement You are requested to take 25 minutes out of your busy schedule to fill this questionnaire that comprises two parts Please fill both parts completely Your cooperation is highly appreciated If you need findings of this research please send a request to minhkhanganh@gmail.com Respectfully yours, Le Kim Anh Researcher 91 APPENDIX B Questionnaire Checklist Directions: Please answer the questionnaire checklist by putting a checkmark on the item that corresponds to your choice or by filling in the answer on the space provided Rest assured that any information will be treated with trust and confidentiality Part I PROFILE OF THE RESPONDENTS What type of enterprise Manufacturing Trading Service Others……………… The form of ownership Private enterprise Limited company Joint stock company State company Other…………………… Length of service Below years - years - 10 years More than 10 years 4 Amount of employees -10 employees 11 - 30 employees 31 - 50 employees 51 - 100 employees 101 - 250 employees More than 250 employees 92 Part II THE LEVEL OF HRM PRATICES Please use the scale below to indicate the extent to which you agree with the following question regarding your company’s current performance Scale Verbal interpretation Strongly agree (SA) agree (A) Neutral (N) Disagree (DA) Strongly disagree (SdA) RECRUITMENT AND SELECTION 1 Recruitment & selection system followed in our organization is well defined In our organization, line managers and HR managers participate in recruitment & selection Valid and standardized tests are used in the selection process of employees Selection system in our organization selects those having the desired knowledge, skills and attitudes Our organization uses comprehensive selection process before rendering a decision The organization uses assessment centers for selection Our organization uses unbiased test and interviewing techniques for employee selection Our organization selects employees without any bias We have strong merit criteria for employee selection 10 We use attitude and desire to work in a team and individual as a criterion in employee selection 93 TRAINING & DEVELOPMENT 5 Our organization conducts extensive (T&D) programs for Employees Employees at each job normally go through T&D programs every year Training needs are identified through a formal performance appraisal mechanism There are formal training programs to teach new employees the skills they needed Trainings need identified are realistic, useful and based on the organizational strategy There are formal training evaluation methods to assess the effectiveness of the training The organization has a system for calculating the cost and benefit of training T&D has helped reduce employee turnover in our organization T&D has resulted in higher performance in our organization employee 10 T&D has resulted in higher productivity and financial returns for the organization CAREER PLANNING SYSTEM Employees at each level in our organization have clear career ladder Employees at each level in our organization are aware about their career ladder Organizational and individual growth needs are aligned in this organization Our organization takes career planning and succession planning very seriously In our organization internal hiring is preferred over external 94 New employees always get inspired by our career planning and development system Minorities and women have comparable opportunities of growth and development Organization is helping employees develop skills needed for their career Our organization provides opportunities to develop skills needed to attain career goal 10 Employees get career guidance from their supervisor without any hesitation PARTICIPATION AND INVOLVEMENT 1 Employees at each level in org take part in decision-making process up to an extent Employees are asked by superiors to participate in related decisions Employees are provided opportunity to suggest improvements in the way things are done here Employees are trusted to make decisions for themselves and the organization Our organization gives rewards for making appropriate suggestions We have culture that promotes employee involvement in our organization We meet voluntarily to identify, operational problems relevant to the organization Our organization consults strategic decision-making employees in Employees decision freedom improves their satisfaction in our organization 10 Employees having liberty to organize their job tasks as per their convenience produce more output 95 5 COMPENSATION AND BENEFITS 5 Compensation offered by our organization matches the expectancy of employees In our organization, salary and other benefits are comparable to the market In our organization, compensation is decided on the basis of competence of the employee The compensation for all employees is directly linked to their performance In our organization, profit sharing is used as a mechanism to reward higher performance Our organization offers both financial and nonfinancial rewards without discrimination The compensation plan is revised accordingly with the economic situation We allow employees to work flexible hours We provide opportunities for employees to continue to learn and grow 10 Employee bonuses are based mainly on how the organization as a whole is performing PERFORMANCE APPRAISAL Performance of the employees is measured on the basis of objectives and quantifiable results Appraisal system in our organization is growth and development oriented Employees are provided performance based feedback and counseling Appraisal system is unbiased and transparent Appraisal information is used for bonuses, promotions and selected training Everybody working in the organization knows clear objectives of performance appraisal 96 Appraisal system is modern and uses the latest techniques and technology Appraisal system has a strong influence on individual and team behavior Our organization conducts appraisal on a regular bases performance 10 In our company, performance appraisal is not used for penalization PART III ORGANZATION’S PERFORMANCE Please use the scale below to indicate the extent to which you agree with the following question regarding your company’s current performance Scale Verbal interpretation Strongly agree (SA) agree (A) Neutral (N) Disagree (DA) Strongly disagree (SdA) How would you compare your organization’s performance over the past three years in comparison with other organizations in the same industry, in relation to the following; ORGANIZATION’S PERFORMANCE Quality of our products/services has been improved Development of new products or services is a major activity in our organization Organizational ability to attract employees has improved Ability to retain employees is a major strength of our organization 97 5 Satisfaction of customers/clients is preferred concern of our organization Management and employees are having trustful relationship with each other Market Share of organization has been increased Our company has better standing in the market now, as compared to last years Organizations’ shares are improving in the stock exchange 10 My organization sets SMART targets for the employees 98 APPENDIX C I PERSONAL INFORMATION Full name: Le Kim Anh Sex: Female Date of birth: September 1978 Birthplace: Thai Nguyen city, Thai Nguyen province, Viet Nam Civil status: Marriage Children: Nguyen Le Minh Khang, male, years old Address: Current residence: No.397 Minh Cau street - Thai Nguyen - Vietnam Phone: 09-83-171-387 Email address: minhkhanganh@gmail.com.vn II EDUCATIONAL QUALIFICATION Institution Date from - Date to Degree(s) or Diploma(s) obtained The Hanoi Orient University, Vietnam 1996-2000 Bachelor of Business Administration Hanoi University of Science and Technology, Vietnam 2000-2003 Master of Economic Management Southern Luzon State University 2009-present Doctorate Program III CIVIL SERVICE, ELIGIBILITY AND GOVERNMENT Working history Date from to 2000- 2010 2010- 2013 Company/Project Position Lecturer Thai Nguyen College of Economics and Finance ( TCEF) TCEF Description - Teach in Accounting, and Business Administration Head of Business 99 - Teach and manage Administration Faculty 2013- present TCEF the Faculty Head of Scientific Management Department - Manage the Dep Professional membership: - Member of Association technical and economic colleges I, the undersigned, certify that to the best of my knowledge and belief, this data correctly describes me, my qualifications and my experience Le Kim Anh 100

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