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17/05/2018 09:51:17 AM

Problems in Human Resources Management (HRM) in Namviet Oil (NVO) organization in Vietnam and recommend some change to improve the effective of HR department

NVO was founded on June 2007 and put into operation on August 2007. Its main business are produced and traded of oil and gasoline, petrochemical, clean energy and investment activities (namvietoil.com). Since established, NVO has built a strong image, gained high reputation and become a trusted partner to local and international investors. Beside of achievement, NVO also has to face many challenges. According to the Vietnamese law (2009),oil and gas industry is placed under the state management. Futhermore, all top companies are state owned enterprise (SOE) (vnr500.com.vn, 2014), leading to these organizations gain many support from government. Therefore, for a privately owned enterprise (POE) such as NVO, it has to face many challenges in its growth and accessing to resources. For example, private firms have more obstacles bidding for contracts or claiming bank loans (Carlier and Tran, 2004). Hence, to increase the competitive advantage, the proper HR activities should be conducted in NVO to better manage and develop employees.

By examining a range of theories, concepts, modeling and framework related to HRM, this project is expected to help explain why HRM is lack sophistication and conduct at only basic level in NVO. Also, it helps senior managers in NVO understand the important of HRM function, change the way of senior manager thinking about HRM, persuade them to invest and change HR department. Moreover, this project may advise for other organizations with the same problems in Vietnam to reconsider the role of HRM in their activities.

NVO has a misunderstanding about HRM. According to Armstrong and Taylor (2014), definition of HRM is a strategic, integrated and coherent approach to the employment, development, well-being of employees in company. HRM can be divided into six functions: recruitment, training and development, benefits and compensation, performance management and ensuring legal compliance. However, in NVO, HRM activities are only at the basic level. First, recruitment, training and development are only conducted when need arise. They do not have a plan or strategy to manage. This leads to the increase of cost and reduce of quality of workers. Second, NVO does not have good remuneration system. Company is keen on keeping talent people with high compensation and good benefits, but other employees, especially manufacturing people, usually has low income and can be easily replace. As a result, this unfair treatment has reduced the motivation and increase turnover. Finally, NVO lacks of good method to manage performance of workers. In this process, head of each department will appraise each of their employees, then send to HR department to reappraise before final decision. Also, there are no cooperation between HR department and others. Consequence, there is only individual opinion in appraisal and may lead to many unfair treatments.

As company develop, HRM has to become more strategic in order to focus more on company’s performance rather than individual performance and to build a sustainable competitive advantage (Becker and Huselid, 2006). In NVO context, HR department does not consider important for the company, as they have low power and influence in NVO. Also, there is no participation of senior managers in HR function. Moreover the quality of staff in HR is not high. Hence, it may be a challenge for strategic HRM in NVO.

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