Table of Contents

I. 1. 2. 3. 4. II. A. 1. 2. B. III. IV. DESCRIPTION OF THE COMPANY ........................................................................... 2 History of TECCO2 ....................................................................................................... 2 Function of the company ................................................................................................ 2 Financial situation ........................................................................................................... 3 Organization structure ..................................................................................................... 3 ANALYSIS OF PROBLEM IN THE COMPANY ........................................................ 5 The reality and the cause .................................................................................................. 5 Salary .............................................................................................................................. 5 Treatment excluded salary .............................................................................................. 8 Suggestions..................................................................................................................... 10 LEARNING POINTS FROM TEAM PROJECT ........................................................ 12 BIBLIOGRAPHY ......................................................................................................... 14

I.

DESCRIPTION OF THE COMPANY

1.

History of TECCO2

Transport Engineering Consultant Joint Stock Company No2 (TECCO2) is a company working in transportation design, which is located in 278 Ton Duc Thang Street, Hanoi. Founded in 1969, initially the firm was thoroughly state-owned. At that time, Vietnam was lack of companies which specialized in designing roads, bridges The company was founded in order to fulfill the space with only around 30 people. Through the time, the firm has become bigger and bigger, reaching nearly 230 officers up to 2010 and the function has been widened. In , the company became one member of TEDI, TRANSPORT ENGINEERING DESIGN INC, the biggest state-owned coporation in transport engineering consultant in Vietnam. In 2004, on behalf of the government, TEDI had sold 49% of share of TECCO2 to its owned officer and the outside investors, officially transforming the firm to a joint stock company, where TEDI hold 51% of share. However, since the companys capital does not meet the standard of HNX or uPCOM, the firms stock still cannot be traded through the stock market. 2. Function of the company Preparation of investment reports, investment projects on topographic

construction survey, geological works surveys and environmental impact assessment. Design of bridges, roads, lighting, and estimate the total cost of works. Supervise traffic construction, accept technical and construction volume, and

test specifications for road construction materials. Control quality of concrete, pavement and road structure.

Evaluate and verify design, identify the current situation, assess cause of the

incident of bridges and roads. During more than 40 years working in this field, TECCO2 had taken part in designing many transport constructions, such as Ho Chi Minh Highway; Asian Highway; Highway 1A, 1B, 2 ,3 3. Financial situation

In 2003, when the company was equitized, the charter capital is around 4 billion VND, including 3.5 billion of land, long term assets and non-cash capital and 1.5 billion of current assets. Up to 2010, the value of the firm has doubled, nearly 8 billion VND with the income before tax and after tax equal to 1.1 billion and 675 million VND respectively, increasing 14% in comparison with the last year. At the AGM of 2011 which was held on 12th April, 2011, the board of director had decided to pay dividend in cash at 12% of the original value of each share. 4. Organization structure

BOARD OF DIRECTOR

HUMAN RESOUCES DEPARTMENT BOARD OF MANAGER 1 President 3 Vice Presidents

ACCOUNTING DEPARTMENT

TECHNICAL DEPARTMENT

PLANNING DEPARTMENT

ROAD DESIGNING BUREAU No1

ROAD DESIGNING BUREAU No2

BRIDGE DESIGNING BUREAU

GEOLOGICAL EXAMINATION DEPARTMENT

LABOR UNION

II.

ANALYSIS OF PROBLEM IN THE COMPANY

After 6 years of equitation, the value of the firm has grown up from 4 billion to 8 billion VND, an impressive increase with a technical company. However, the company still has some problems in management, especially in the salary and promotion policies. Every year, there are a number of officers leaving the firm with many different reasons but most of them due to the treatment policies of the company. After interviewing Mr. Pham Van Thong, Chairman of the BOD, Vice President of the company, we had come up to a specific analysis about the above problem and suggested some solutions for the company. Our analysis mainly dues with the problem in treatment policies of the firm, including two main parts: problem about salary policy and problem about treatment excluded salary policy.

A.
1. a.

The reality and the cause

Salary Reality

Because TECCO2 used to be a state-owned company and now the government still holds 51% of share, the salary policy of the company has to follow strictly to the governments basic wage system. So that salary is a problem of all state-owned companies in general and TECCO2 in particular. It is not only reflecting the effort and ability of employees but also relating to their lives directly. Thus, the insufficient salary can lead to many bad consequences not in the short-run only but in the long-run as well. This problem has been cared by board of directors of TECCO2 for many years but it still cant be solved completely. The following section will analysis this problem in more detail.

Firstly, the salary hasnt exactly reflected the working performance. The main reason is the lacking of explicitness in the salary policies of the company. Moreover, this company are using the state regulations about salary to pay for their employees so it doesnt reflect reality and working performance. Besides that, employees are also discontented with measuring level of salary base on experience. Many old employees who are poor in ability but work for a company for many years have higher salary than young employees who contribute much effort for the company. For example: all new employees in the company are paid at most 3 million VND per month regardless to whatever they can contribute to the company. Meanwhile an old officer, who has nearly 30 years working for the firm continuously, still gets 10 million VND per month although his contribution is very low. In sum, company does not establish Pay-for-performance program that pay employees on the basis of performance measure and the salary hasnt exactly reflected the working performance. Secondly, some employees have a level of salary which is not enough for their lives, especially workers. Nowadays, the inflation is very high and the market price increase day by day. But, a thing opposite with this situation is the stickiness and inflexibleness of the salary. Price increase incessantly when salary is stable; this situation leads to the serious difficulties in daily life of many employees. That is the physiological needs in Maslows hierarchy of need theory. Moreover, the company now uses ATM as a main way to pay salary for employees so the tardiness in money transferring sometimes occurs. b. Cause

This difficulty has been caused by both objective reasons and subjective reasons: TECCO2 used to be a state-owned company. Although the company was

equitized in 2003, 51% of their value is owned by the government. For this reason, TECCO2

still use the salary measure, which is used in all government agencies and companies [1]. This measure, in fact, has many disadvantages and its the reason for the inadequate salary policy of TECCO2. For instance, this company measures salary-level of each employee based on their number of working years rather than their working performance. Company does not have Performance management system- a system that

establishes performance standard that are used to evaluate employee performance. Each employee has different ability so obtaining perfect justice is impossible. If you want to treat your employees fairly by paying impartial salary, you must evaluate their ability accurately by performance management system. The wage fund of TECCO2 is not enough for high salary (based on the

director). In the past, employees salary is paid completely by the government. But, from 2003, when the equitation started, TECCO2 must be independent in wage fund. It means the salary will be adjusted base on companys profit. c. Consequences This actuality has brought out many unexpected consequences for the company: In the short-run: when the salary is unfair and doesnt reflect the actual

working performance, the employees will have no motivation to work, they do not see the Performance-reward linkage of expectancy theory. Moreover, inadequate salary will lead to the relying on others of many people. They just do their job but dont care about the effectiveness. Its a common problem in a lot of stated-owned companies. In the long-run: when the salary is low and not enough for the employees

lives, they will find another way to have more income. Some people will find another job and

this trend will lead to the lack of concentration in company and the decrease in the working efficiency. Worse, low salary will intensify the embezzlement in company. 2. a. Treatment excluded salary Reality Benefit on special occasions

Every year, on the special occasions, officials and workers have day off and receive specified gifts or money, for example: - New Year's holiday (1 / 1): one day off and gifts - Lunar New Year holiday: four days off and 500,000 VND. - Victory Day holiday (30 / 4): one day off and gifts. - International Labor Day (1 / 5): one day off and 300,000 VND - National Day (2 / 9): 1 day off and gift The company has always organize summer vacation tour and early spring travel for staff members each year. It also organize sports programs, for example football, table tennis, badminton ... to give employees recreation, improve employees health and enhance intimacy, friendship, harmony between the officers and employees in the company. However, bonuses for company officers and employees on the special occasion are not high, welfare funds spent for the organization of summer vacation and early spring travel is so small that it has not really make sense for officers and employees to rest comfortably, relax after work stress. Health-check

Company does not organize the periodic health checks for employees. Some employees get the long term health problem. Travel allowance

Travel allowances are now only spent for travel of managers. There is no travel allowance for the employees, especially those with poor health, pregnant women ... while there are many employees who live far from workplace. Lunch-allowance

The company lunch allowance for staff and workers was 8,000 VND / person / day. Although company has taken interest in workers' lunch, but lunch allowance of the company is low compared with the general prices. Currently, an average lunch price in Hanoi is priced from 15,000 to 20,000 VND, so the 8,000 VND subsidy per meal per person is not enough to ensure the health of workers. Housing allowance

The company has no policy on housing allowance while workers in companies come from different provinces. Because the cost of living in Hanoi is expensive, and the salary is just enough to pay for daily living expenses, housing problems are the top concern of employee. In sum, the company has no funds to help their employees to overcome hardship in their daily lives, it doesnt satisfy employees physiological need. This is a reason reducing the hard-working motivation of the employees. Promotion problem

Some employees complain about getting promotion although they work very hard for a long time. Some acquaintances of top manager get to higher position although they dont have competent ability. This creates an unequal treatment in company, making employee dissatisfied with managers and reduce the willingness to stick with company, especially for the talented employees.

b.

Causes: Company lacks source of fund to subsidize its employees. Although the

manager try to accommodate employee with allowance and vacation but the accommodation is not enough to satisfy the physiological need. Managers still work in old way. They dont appreciate the exertion of

employee by offering the chance to get to the higher position. They put the priority of choosing the new person for the post in the acquaintances of them rather than the really competent employees.

B.

Suggestions
Pay salary based on the outcome by using variable pay system, in which

individuals compensation is contingent on performance. All employees want to have salarylevel as high as possible, but it isnt the only purpose. Beside high and stable salary, they want to be paid as a result of their performance, efforts and position. Paying salary based on the outcome will enhance justice and increase employees performance.

Pay salary based on the position. The position which is required a high level,

high responsibility and contributions to organization must be better paid than the one which is required a low level, liability and contribution to the organization. Pay salary based on the market. This policy has existed for many years in

Vietnam and now being exploited by private companies. If the salary doesnt base on the market, it wont be adjusted timely and also cant reflect working-value exactly. This method will help employees deal with the change of price and inflation, thus, help them concentrate on their job and raise working performance. Create a welfare fund to subsidize employee by extracting a part of profit each

year .The fund will be used by the following way: Spend 70-80% of welfare fund for all employees without discrimination. It will be used to compensate for travel allowance, lunch allowance to support employee in daily life. 20-30% of welfare fund will be used to help employee in difficult situations especially for those who suffer mental distress of parents death or get accident or have health problem unexpectedly. Company should support employee in finding housing near workplace or

building tenement house for its employees. Increase the money and gift for the employee in the special occasions. Increase the fund to organize summer vacation travel and early spring travel

for employee because it help employee relax after stressful working time and create chance to bring manager and employee closer with each other, helping manager understand employee more. It also help young and new employee to integrate into the collective. Company must hold periodic health check for its employee, for example after

the period of 6 months, company invites doctors to examine employee health, especially

those who work in toxic environment. It is a way to show the care of manager to employees, it make them feel secured in working environment. Company should have clearly defined criteria for getting promotion and apply

it strictly when giving a person a promotion. For example it must specify the number of year employee working for company, the achievement of employee, the education requirement for the post, all the criteria must be stated and publicize to everyone in company so that it make the selection process being objective, only can the best competent and experienced employees will be appointed to the post.

III.

LEARNING POINTS FROM TEAM PROJECT

From problem in human resource managing of TECCO 2, we can get some lessons, which are really useful for our future job and specially worthy for someone doing in HR field. First of all, when doing business, especially in start-up period, we need a human resource plan to define an accurate number of capable people required in any department. Doing so, we can avoid people shortage and surplus in order to have reasonable treatment. In the case of TECCO 2, because of big amount of workers surplus, fund of company is not enough to have adequate treatment. In short, the most sufficient quantity of workers is, the best treatment we have. Secondly, a plan for supports, compensations, wages and bonus is very necessary to make the treating regime suitable and effective. Also, with this treatment plan, we can ensure the fairness or equality in company, which makes employees trust company more, be more excited in working and try to perform their missions well. As the result, nice treatment plan means trustworthy management and good motivation.

Another important lesson we get from team project is that workers opinions really matter. When making treating regimes for workers, wed better ask them for their demand. Only employees know what they really need. Basing on their idea, we can make the most suitable and effective treatment plan. Especially, when recruiting new employees, we need to understand clearly their requirements and expectations to make sure that our companys condition can meet their demand. In addition, when being ask about desire and expectation from company, employees would have feeling of being appreciated. This thing may motivate them so much and its also effective way to keep them. In TECCO 2, employees just work and dont care so much about their colleagues, so working atmosphere is quite stressful. Therefore, another lesson we get is that we can make use of our treatment in improving relationship between people in a company. For example, releasing stress after working is necessary for most of people. Consequently, it is a good idea to afford sport center in company grounds. It not only improves workers health, meet their demand but also help them be closer. Another example, we can hold some trips at the weekend so that employees understand more about other situations and help each other more. In short, not only does treating regime make people satisfied with company, it also builds a special love between employees and company or among people in a company. Providing training course to employees is important treatment we specially need to focus. The reason is that not only does it raise productivity of workers, it also motivate them so much. With this policy, workers can feel being respected and also see their future promotion. In case of TECCO 2, motivation is low when treatment as well as bonus and advancement are prevailed for acquaintances of managers. The last but most significant lesson we get is importance of treating policy, which affects so much on success of company. Good and fair treatment can help company attract and retain competent and talented individuals, who play important role in accomplishing

companys missions and goals. It also motivates employees so that they perform their works as well as possible. Significantly, it can create truth and love of employees to company. In contrast, an unfair and improper preferential policies can lead to serious consequences: people lack of inspiration and feel bored, working environment is stressful, productivity is very low, capable people move to other company, finally company may have to shut down. In conclusion, human resource is the biggest asset of a company and treatment policies decide effectiveness or success of HR department.

IV.

BIBLIOGRAPHY
About some primary information of company TECCO2, such as: history,

organization, function and responsibility, we have found from the website: tecco2.net. About more detailed and particular information, thanks to Mr. Pham Van

Thong , Chairman of the BOD, Vice President of the company for providing us with data and status of company. We also take some information about treating tips from the internet, such as

http://nghenhansu.forumvi.net/t151-topic and knowledge about human resource from our course book Management of Stephen P. Robbins and Mary Coulter.