Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Research Article: 2021 Vol: 25 Issue: 2

Key Factors Affecting Employees' Loyalty: A Case Study of Changshin Vietnam Company Ltd

Phan Thanh Tam*, Lac Hong University (LHU)

Vu Minh Nguyet, Lac Hong University (LHU)

Keywords

Employee, Satisfaction, Loyalty, Company, Lhu.

Abstract

There are many different notions about motivation in work, but there are the most basic commonalities, that is “the willingness, effort, passion for work, desire and willingness of workers to make efforts to towards a certain goal and outcome of the organization as well as the employees themselves. When an organization is in trouble, and even employees tend to leave looking for new partners and new workplaces. So how to keep them, prevent them from leaving because there is always loyalty to the organization. With the aim of research is to explore the factors affecting the Loyalty of Employees at Changshin Vietnam Co., Ltd. which is implemented from June 2020 to November 2020. The results showed that there are 5 factors, including: Relationships in the organization; Interesting job; Salary, bonus and benefits; Training and promotion and performance evaluation affect Employee Loyalty at Changshin Vietnam Co., Ltd. with 5% significance. Since then, the authors gave a number of recommendations to attract and retain talented people in the company.

Introduction

Loyalty has an important effect on the performance of a business organization. This is considered as one of the important functions of the manager, the factor that determines the performance and competitiveness of an organization, whether it is a state organization or a private organization. According to Aon Hewitt (2016), Motivating employees is of special importance, because they are an important part of the effectiveness and efficiency of the organizational apparatus. Loyalty affects the performance of individuals and organizations. Loyalty is the basis for creativity in an organization. Loyalty people often feel comfortable and enthralled with assigned tasks. Therefore, they always show creativity at work, thereby helping the organization have more creative ideas, innovating; creating breakthroughs in the organization, helping the organization adapt to changes and proactively make changes by Zaniboni (2016).

In the above integration context, enterprises have many opportunities, but also many challenges in production and business activities. One of the biggest challenges is to secure, maintain and develop human resources, a vital factor for businesses. Enterprises must compete for human resources not only with domestic enterprises, but also with foreign-invested enterprises and even foreign enterprises that hire domestic human resources to work remotely by Tarvin (2017). To encourage and retain employees, in addition to salary and bonuses, businesses also have many other tools to retain employees such as job attractiveness, leadership style, working environment, working conditions. job, welfare, training. But which tools are really effective and how effective are the things that not only businesses but also many researchers are very interested in loyalty?

The study focused on the impact of factors such as wages, benefits, job characteristics, leadership style, work environment, working conditions, training, coworkerships and public advancement. Work towards the loyalty. Therefore, researching and giving research objective is to explore the factors affecting Loyalty of employees at Changshin Vietnam Co., Ltd. to contribute to solving shortcomings in practice. Activities of Changshin Vietnam Company Limited.

Literature Review

Loyalty (LOY)

According to Entoncic & Tony (2018), Loyalty is expressed in the employee's intention to stay with the organization for a long time, even when receiving offers for more attractive salary from other organizations. Research on employee loyalty to enterprises is the study of employee's attitude and behavior in an enterprise and the relationship between the employee's behavior and attitude with the enterprise. Therefore, the fundamental theory to study employee loyalty to enterprise is the theory of organizational behavior by Sundaray (2017).

According to Tund (2013), the employee's loyalty in the organization can be considered as job satisfaction attitude and a sense of loyalty, trust with the enterprise. When the attitude and sense of loyalty and trust are enhanced, the commitment to the organization will be higher, reducing the stress and pressure at work, increasing satisfaction, trust with the organization and predisposition. Direction of disorganization is lower with different views and concepts about the loyalty of researchers, so that each study has different components to measure employee loyalty to the organization.

Job Satisfaction (JS)

According to Gautam (2016), Job satisfaction is the degree to which employees feel and have a positive orientation to employment in the organization or the emotional response of a person due to the comparing the actual results that the person has achieved with what they want, predict and deserve. When the employee feels happy and happy at work, we can say that he/she is satisfied with the job.
In general, the employees' job satisfaction is understood as their state of satisfaction, their favorite feelings, and their passion and towards their work through different evaluation criteria of each individual. Satisfaction with jobs of employees is conceptualized and measured in both aspects: General satisfaction with the job and satisfaction according to job elements. General satisfaction expresses a shared emotion across all component aspects of work by Climanikire (2017).

Leadership Factor (LF)

In this study, the leadership factor in this study is understood as the employee's immediate boss, the leadership brings satisfaction and trust to employees through communication, care, and pay attention to their subordinate workers by Groothoff (2018). In addition, leadership protects employees when necessary, demonstrating leadership, expertise and freedom of work for subordinates by Kali (2019). In addition, employee's satisfaction and confidence in leadership is also through fair treatment, sincere recognition, and trust in their abilities and abilities through the contributions of employees. Based on the concept mentioned above and studies, authors give hypothesis H1 following:

Hypothesis H1 Leadership factors positively impact job satisfaction at Changshin Vietnam Co., Ltd.

Relationship with Colleagues (RC)

According to Fuchs (2014), Relationship with colleagues in the organization shows that superiors often motivate and motivate employees to work to create a friendly feeling between managers and employees, then employees will see superiors as relatives. I, as a target to strive, to work harder to match the attention and help of my superiors. Therefore, the support and help from colleagues when needed to employees also plays an important role. When they find a comfortable, friendly work or the relationship between employees is always comfortable and open, they will coordinate well at work, the work will be conducted smoothly by Slovenia & Trump (2017). Based on the concept as mentioned earlier and studies, authors give hypothesis H2 following:

Hypothesis H2 Relationship with colleagues positively impact job satisfaction at Changshin Vietnam Co., Ltd.

Working Conditions (WC)

According to Oshagbami (2018), Working conditions are always concerned by employees because working conditions are related to personal convenience, but at the same time it is also a factor that helps employees fulfill their tasks. Workers do not like to work in dangerous, unfavorable and inconvenient places. Temperature, light, noise and other environmental factors should be appropriate. Furthermore, many workers like to work near home, mentally, working hours with clean, modern working facilities and suitable facilities. In this study, the factors of working conditions are considered including: good workplace facilities, safe working spaces, and fully equipped staff by Thiu (2019). Based on the concept as mentioned above and studies, authors give hypothesis H3 following:

Hypothesis H3 Working conditions positively impact job satisfaction at Changshin Vietnam Co., Ltd.

Income (IN)

According to Jungran (2018), Income is the remuneration an employee gets from his or her job at the company. In this study, income is understood as the income that employees get from salaries, allowances, bonuses, benefits must be commensurate with the employee's capacity and effort to contribute to If the income is inadequate, it can create dissatisfaction, reduce work effort and reduce motivation for employees. But if managers know how to please employees through paying fair wages, matching the employee's performance as well as the actual capabilities of the employee, it may increase the engagement with the organization by Tan (2019). With the staff, the staff will make more effort at work. Based on the concept mentioned above and studies, authors give hypothesis H4 following:

Hypothesis H4 Income positively impact job satisfaction at Changshin Vietnam Co., Ltd.

Training and Promotion Opportunities (TP)

According to Arnolds (2017), the factor of training and advancement opportunities in the job is understood as growth, it is a factor creating cohesion with the organization and therefore this factor should be considered as a factor creating motivation at the level height. Training is the process of learning the skills needed to serve a particular job. Promotion is the move to a higher position in the working system of the employee. In this topic training and promotion are grouped together in the same factor due to their common cause and effect relationship by Gadzirayi (2019). The purpose of employee training in addition to improving their qualifications but also the purpose of advancement in the work system, they have a close relationship with each other. Based on the concept mentioned above and studies, authors give hypothesis H5 following:

Hypothesis H5 Training and promotion opportunities positively impact job satisfaction at Changshin Vietnam Co., Ltd.

Research on the relationship between job satisfaction and employee engagement with the organization has the view that, employee's satisfaction with the job will lead to employee's attachment to the organization Hooi (2019) and there is also a view that the degree of engagement of employees with the organization will make them satisfied in the job by Threeman (2020).
According to Allickson (2015), the satisfaction of employees is one of the criteria for evaluating the success of an enterprise or a unit. When employees feel satisfied with their jobs, they will work tirelessly, work more efficiently, and love their jobs more. Therefore, if the enterprise increases the employee's satisfaction level, it will ensure personnel stability, help reduce training and retraining costs and enhance business performance.

Hypothesis H6 Job satisfaction has a positive impact on the loyalty of employees at Changshin Vietnam Co., Ltd.

Figure 1 : A Research Model for Factors Affecting Job Satisfaction and Employees' Loyalty (Source:Researchers discovered)

 

Methods

The research method of the topic is a combination of qualitative research methods and quantitative research methods.

Qualitative research: Overview of theoretical bases and related studies to provide research models and design initial scales to identify factors influencing organizational engagement through satisfaction of employees at Changshin Vietnam Co., Ltd. Next, group discussions were conducted with 11 experts who are managers with extensive experience in the work of human resource management and university lecturers to explore factors to evaluate faculty engagement. Staff with school and scale adjustment. Based on the results of qualitative research, the author adjusted the model and scale to suit the research context by Hair, Anderson, Tatham & Black (2010).

Quantitative research: Data for this method is collected through survey questionnaires. The quantitative study was performed with an expected sample size of n=550 employees who have been working for Changshin Vietnam Co., Ltd., selected by the convenient sampling method but 535 samples processed. Data collection was done through direct interviews with questionnaires designed based on the results of qualitative research. The data collected from the survey was used by the author using SPSS software to test the reliability of the scales by Cronbach's Alpha's confidence coefficient, EFA discovery factor analysis, confirmation factor analysis (CFA Structure Model Analysis (SEM). Data are processed using Amos software. Qualitative research authors surveyed 11 experts in Dong Nai province. 11 experts are managers who are working for the universities such as Lac Hong University, Dong Nai University in Dong Nai province.

Quantitative research conducted through questionnaires with observed variables measured using a 5-point Likert scale includes one strongly disagree and five strongly agree. The authors surveyed 550 employees who have been working for Changshin Vietnam Co., Ltd. in Dong Nai province. The data collection time is from June 2020 to November 2020. According to the conventional method by Hair, Anderson, Tatham & Black (2010), samples were selected. Besides, the authors collecting data processed through SPSS 20.0 software with descriptive statistical tools, scale testing with Cronbach's Alpha, Discovery Factor Analysis (EFA), testing Structural Equation Modeling (SEM). Finally, the authors had conclusions and managerial implications by Hair, Anderson, Tatham & Black (2010).

Table 1
Testing of Cronbach's Alpha for Job Satisfaction. (Source: Data Processed by SPSS 20.0)
Items Cronbach’s alpha
Job Satisfaction (JS) 0.848
JS1 You feel good about telling others about your organization 0.819
JS2 You feel interested in your current job 0.784
JS3 You feel that your work is meaningful 0.834
JS4 You feel that you will work at the company for long run 0.786

Table 1 showed that all Cronbach's Alpha values of the research components meet this technique's requirements, specifically, Cronbach's Alpha values of job satisfaction is more than 0.6.

Table 2
Testing of Cronbach's Alpha for Employees’ Loyalty. (Source: Data Processed by SPSS 20.0)
Items Cronbach’s alpha
Employees’ Loyalty (LOY) 0.94
LOY1 You will stay with the team despite the changes or better opportunities 0.926
LOY2 You are willing and able to dedicate yourself to the organization for a long time 0.92
LOY3 You believe this is the best place to work for you 0.929
LOY4 Because of the organization, you are willing to do more than what is required 0.911

Table 2 showed that the scale reliability for employees’ loyalty at Changshin Vietnam Co., Ltd. Cronbach's Alpha values of employees’ loyalty is more than 0.6.

Table 3
Testing of Cronbach’s Alpha for Factors Affecting Job Satisfaction and Employees' Loyalty. (Source: Data Processed by SPSS 20.0)
No. Items Cronbach’s alpha
1. Leadership Factor (LF) 0.908
LF1 Leaders have timely attention, support and help when employees encounter
difficult problems
0.876
LF2 Leaders always listen to employees' point of view 0.892
LF3 Skillful and tactful leadership when criticizing employees 0.903
LF4 Workers are treated fairly and comfortably when communicating with superiors 0.875
LF5 Employees are respected and trusted by the leaders in their work 0.893
2. Relationship with Colleagues (RC) 0.944
RC1 Your proposal is respected by your colleagues 0.909
RC2 Relations in the organization are very friendly and close to each other at work 0.943
RC3 Colleagues in the organization support and often help you to deal with problems
when facing difficulties
0.937
RC4 Colleagues share ideas with each other to improve work and quality of life 0.918
3. Working Conditions (WC) 0.849
WC1 Fully equipped with equipment and working tools for employees 0.802
WC2 The organization is always interested in a clean and cool working environment 0.799
WC3 The organization is very happy and friendly to build a colleague culture 0.837
WC4 Working time and rest time of employees are appropriately regulated 0.794
4. Income (IN) 0.938
IN1 Salary is commensurate with the nature of the work and the capacity of the
employee
0.912
IN2 The organization that pays the wages to the workers is distributed fairly and reasonably 0.931
IN3 The organization ensures income for workers to ensure life 0.925
IN4 Organize the implementation of the reward policy in a timely, clear and
reasonable manner
0.906
5. Training and Promotion Opportunities (TP) 0.928
TP1 Employees are focused on training and career development 0.899
TP2 Employees are always facilitated for learning and improving their working
knowledge and skills
0.925
TP3 Employees are entitled to policies of professional capacity development 0.91
TP4 Employees have many development opportunities at work 0.888

Table 3 showed that all of (1) Leadership factor, (2) Relationship with colleagues; (3) Working conditions; (4) Income, (5) Training and promotion opportunities. Cronbach's alpha is higher than 6.0.

Figure 2 :Testing CFA for Factors Affecting Job Satisfaction and Employees' Loyalty. (Source: Data Processed by SPSS 20.0 and AMOS)

Figure 2 showed that the assessment of the CFA for factors affecting job satisfaction and employees' loyalty includes the following elements: CMIN/DF: 4.562 (< 5.0), GFI: 0.841 (> 0.8), TLI: 0.892 (> 0.8) and CFI: 0.907 (> 0.9).

Table 4
Test CMIN/DF for All of The Components. (Source: Data Processed by SPSS 20.0 and AMOS)
Model NPAR CMIN DF P CMIN/DF GFI TLI CFI
Default model 90 1232.297 345 0 3.572 0.865 0.922 0.933
Saturated model 435 0.000 0     1.000   1.000
Independence model 29 13748.007 406 0.000 33.862 0.291 0.000 0.000

Table 4 showed that the assessment of the scale of employees’ satisfaction and loyalty includes the following elements: CMIN/DF: 3.073 (< 5.0), GFI: 0.896 (> 0.850), TLI: 0.944 (> 0.900) and CFI: 0.953 (> 0.9).

Figure 3 :Testing SEM factors for Factors Affecting Job Satisfaction and Employees' Loyalty. (Source: Data Processed by SPSS 20.0 and AMOS)

Figure 3 showed that the assessment of the SEM had factors affecting job satisfaction and employees' loyalty with a significance level of 0.01.

Table 5
Testing Co Efficient for Factors Affecting Job Satisfaction and Employees' Loyalty. (Source: Data Processed by SPSS 20.0 and AMOS)
Relationships Unstandardized Estimate Standardized Estimate S.E. C.R. P Hypothesis
LOY <--- LF 0.281 0.396 0.036 7.791 *** Accepted
LOY <--- RC 0.078 0.135 0.027 2.858 0.004 Accepted
LOY <--- WC 0.111 0.162 0.03 3.699 *** Accepted
LOY <--- IN 0.093 0.138 0.03 3.167 0.002 Accepted
LOY <--- TP 0.151 0.208 0.033 4.565 *** Accepted
JS <--- LOY 0.393 0.291 0.065 6.093 *** Accepted

Table 5 showed that the column P < 0.01 with significance level 0.01. These results indicated that five factors are affecting job satisfaction and loyalty with a significance level of 0.01. These results are science evident for managerial implications to enhance job satisfaction and loyalty.

Table 6
Testing Boostrap with 2000 Samples for Factors Affecting Job Satisfaction and Employees' Loyalty. (Source: Data Processed by SPSS 20.0 and AMOS)
Parameter SE SE-SE Mean Bias SE-Bias
LOY <--- LF 0.038 0.001 0.281 0.001 0.001
LOY <--- RC 0.035 0.001 0.079 0.002 0.001
LOY <--- WC 0.036 0.001 0.108 -0.003 0.001
LOY <--- IN 0.033 0.001 0.089 -0.005 0.001
LOY <--- TP 0.034 0.001 0.146 -0.005 0.001
JS <--- LOY 0.089 0.001 0.393 0 0.002

Table 6 showed that the bootstrap test results are very good with a sample of 2.000 employees. This is the basis for the model in making policy proposals. These results indicated that five factors are affecting job satisfaction and loyalty with a significance level of 0.01. These results are science evident for managerial implications to enhance job satisfaction and loyalty.

Conclusion

The research results are based on survey results from 550 employees at Changshin Vietnam Co., Ltd. After evaluating the reliability of the scale through Cronbach's Alpha Coefficients (CAC) and Exploratory Factor Analysis (EFA), Confirmation Factor Analysis (CFA) and Linear Structural Model Analysis (LSMA). The results show that there are six factors that positively affect organizational engagement through job satisfaction at Changshin Vietnam Co., Ltd. with the significance level of 1%. Five factors include: Leadership (LD), Relationship with colleagues (DN), Working conditions (DK), Training and promotion opportunities (DT) and Income (TN).

In addition, the results are also scientific evidence and important for researchers and workers policy-makers at Changshin Vietnam Co., Ltd. to apply research results for development. Development of human resources in the future. With the research objectives outlined above, the author proposes governance implications for the leaders of Changshin Vietnam Co., Ltd. to help leaders use employees more effectively, the implications of management. Values are arranged in order from high to low, decreasing according to the degree of influence below. Based on the research results, the author proposes six governance implications that contribute to improving loyalty to the organization through the satisfaction of employees at Changshin Vietnam Co., Ltd. in the coming time.

Managerial implications

First of all, the managerial implications for leadership factor: Changshin Vietnam Co., Ltd should consider employees to be respected and trusted in their work. Instead of evaluating or critically assessing employee initiatives and suggestions, leaders should only emphasize the good aspects that are applicable to the job. Employees should be protected in front of superior management when deemed necessary. Encourage and reward employees when they do a good job. It is also a way of showing respect from the leader to his employees. Company leaders need to listen to employees' point of view. Every employee dream of being in an environment where everyone can become a better version of themselves. Company leaders should explore the strengths of each employee and enable them to progress. Company leaders who want to manage their employees well must "know people, know me". In addition to the leadership must know the strengths and weaknesses of themselves that make the subordinates respect, it is remarkable to understand the personality traits of the employees.

Secondly, the managerial implications for training and promotion opportunities: Changshin Vietnam Co., Ltd. needs to help employees have more opportunities to develop at work. Schools need to determine qualification skills after training, the number, structure, training time ... how the more specific the target, the higher the training result. Through analyzing the organization, work and employees need to determine the training objectives for the employees, they need to be trained in what skills to achieve after the end of the course to achieve. How long does it take to master those skills. Employees need to be facilitated for learning and improving their working knowledge and skills. Changshin Vietnam Co., Ltd. needs to invest the fee in training and periodical health checks and protection for employees. Short-term and long-term, domestic and international training courses on various professional and professional topics to supplement and update staff knowledge will be conducted on a regular basis.

Thirdly, the managerial implications for working conditions: eaders of Changshin Vietnam Co., Ltd. are always interested in a clean and cool working environment for employees. In order to have a clean and spacious working environment, each employee is consciously maintaining hygiene at his unit's office, as well as in public places around the building. At each personal workplace, all units have trash cans, placed in neat places, you are consciously cleaning yourself, clean before work about 10-15 minutes. Changshin Vietnam Co., Ltd. needs to promulgate working hours and rest time accordingly. Working environment is one of the decisive factors for the health and productivity of employees, understanding that, at Changshin Vietnam Co., Ltd., Trade Union has coordinated with the employer. improve and improve the quality of the environment in the areas where the workers directly work. Thereby, it contributes to ensuring the health and improving the work efficiency of workers.

Fourthly, the managerial implications for income: Changshin Vietnam Co., Ltd. should consider the salary commensurate with the nature of the work and the capacity of the employee. Salary must be measurable: Each person can calculate their own salary on the basis of an assessment of the work they have done. Thus, it avoids questions in salary payment, and at the same time stimulates employees to work better. Changshin Vietnam Company Limited is required to pay wages to employees that are distributed fairly and reasonably. The company needs to maintain paying income associated with job requirements, work value, work efficiency; ensuring internal fairness, competition in the market. To determine the potential for long-term commitment to an organization, welfare policies are always carefully considered by employees. This is evaluated as one of the suitable bases to help candidates measure the attractiveness of the Company and make decisions before the proposals of other organizations.

Finally, the managerial implications for relationship with colleagues: Relationships in the organization very need to be friendly and close to each other at work. For the elderly or have a higher responsibility, respect should be shown as respect; respect for an equal person is the righteous and friendly attitude; For younger, younger, respectful people needs to be expressed through a caring, gentle and encouraging attitude. Presence as promised, language of communication that highlights the other person's identity, and appropriate gestures (costumes, postures when walking) are all ways to show respect to others, at the same time is also respect for yourself. Colleagues need to share ideas with each other to develop work and better quality of life in the same organization. Making the other party trust you and looking for signs of trust in them is a necessary endeavor that allows the communication to be grounded, effective in the long run. Good workplace relationships give us freedom: instead of spending time and energy fixing problems brought on by negative relationships, we can focus on opportunities for career development.

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