Employee Morale: Employees Want Growth, Recognition, Not Just Pay

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(corrects Tan Huynh's name, originally given as Tan Nguyen)

By Lien Hoang

Nov. 26—Employers need to think beyond salaries and combine both “engagement” and “enablement” to get the most out of staff, according to management consulting firm Hay Group Vietnam, which says it has helped clients grow their bottom lines by as much as 30 percent by making changes to organizational and leadership styles.

“What's surprising is the level of engagement is high [in Vietnam], higher than Singapore,” Hay Group team leader Tan Huynh said, and employees tend to like their workplaces and respect their bosses. “But the level of productivity is lower. That picture tells us that we need to do something with current resources.”

The problem is a failure of “enablement” in Vietnam, Huynh said, which Hay Group defines as investing resources in staff, giving them responsibilities and encouraging collaboration.

Maslow's Hierarchy of Needs

According to Wanchalerm Siriphand, managing consultant of Hay Group Thailand and Vietnam, employers need to motivate staff through awards and other forms of recognition, promotions and benefits such as health care.

“People age 20 to 30, they tend to have different needs than people in their 30s,” Siriphand said. “They're there to build knowledge, build their CVs. They tend to jump to different companies no matter what you pay them. That's the trend we observed in the last year.”

The trend is reflected in a growing belief among human resource professionals that employees are moving up Maslow's hierarchy of needs, according to which people are increasingly concerned with self-actualization or having fulfilling jobs and reaching their full potential professionally and otherwise.

This is consistent with the changes in U.S.-based Hay Group's survey findings over the decades. Starting in the 1920s, companies began to be concerned with office morale and over time broadened this concern to include whether employees were satisfied, had pride in the business and felt committed to the company's success.

Practices in Asia

People tend to believe that salaries and bonuses are enough to retain talent, Siriphand said, but these fall close to the bottom of Maslow's hierarchy of needs because they only address immediate demands. A bonus can be just a temporary fix, whereas long-term fulfillment requires staff to feel a stake in the company. This is especially the case in Asia, Siriphand added, where managers often focus on pay incentives. According to Hay Group Vietnam senior consultant Luan Le, managers need to make more of an effort to understand their employees.

“I think Asians in particular are not keen to talk to you about their problems,” Le said. “For this, managers have to use the ‘affiliative’ leadership style to get to know staff first.”

Hay Group has used this method to help businesses improve performance, Huynh said, by creating client action plans that combine leadership techniques such as “visionary” or “coaching” styles. After three years, Hay Group found that of every 100 companies with which it used this approach 56 saw profits grow by as much as 30 percent.

To contact the reporter on this story: Lien Hoang in Ho Chi Minh City at lhoang@bnaglobal.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For more information on Vietnamese HR law and regulation, see the Vietnam primer.