The determinants contributed to bank service: a case of HCMC
Abstract
Vietnam joins in the context of international economic integration and the booming industrial revolution 4.0. Technology is an essential factor in all fields. However, human resource management (HRM) of banking activities is a critical factor. Therefore, the main objective of this study is to explore the HRM factors impacting on bank service quality of commercial banks in Vietnam. The researchers surveyed 850 managers working in commercial banks in Ho Chi Minh City and Dong Nai province. Data was collected from December 2018 to November 2019. The researchers applied a simple random technique, tested Cronbach's Alpha, and had the exploratory factor analysis (EFA), which used for Structural Equation Modelling (SEM) technique. The findings of the paper have the HRM factor affecting the bank service quality of commercial banks in Vietnam with a significance level of 0.01.
Keywords: Management, human resource, commercial bank, and service quality.
1 Introduction
The issue of human resource management is of particular importance to an organization. Organization activity effected without human resource management. Human resource management is the cause of success or failure in business operations. The primary goal of any organization is to effectively use human resources to achieve its goals (Al-Daibat, B.F. & Irtaimeh, H, 2012). The question is how to promote the role of the human element for development goals? That set for all organizations and enterprises that including commercial banks. Especially Vietnam has joined in the context of competition and international integration. The vital role of human resources in commercial banks is the following: First of all, human resources are factors that directly participate in the process of strategic planning, setting up plans, building business processes, codes of conduct, which are the foundation. It is an orientation for all activities in commercial banks. Secondly, human resources are the entity that operates the system, controls the technology infrastructure, and execute the plans according to the prescribed process. Human resources are working with government agencies, partners, and customers, interacting with colleagues, controlling the cash flow, and other resources under the management of commercial banks. Thirdly, human resources are the source of new ideas and initiatives to improve the business process, thereby improving system performance, cost savings, and minimizing risks for commercial banks. Fourthly, human resources are the energy to gradually crystallize corporate cultural values, build and preserve the brand and identity of commercial banks. Finally, human resources with the ability to mobilize themselves in combination with the organization's social resource development policy, continually changing to adapt to new environments, new technologies. In particular, through that fostering of excellent individuals, leading experts in the field of finance. Human resources are the successor to the sustainable development of commercial banks. Based on the mentioned above things, the researchers explore human resource management affecting the bank service quality of commercial banks in Vietnam. This study helps banks’ managers who apply the research results for improving the service quality better in the future.
2 Literature review
2.1 Human resource management (HRM)
Human resource management is an integral part of business administration and is one of the main reasons for the success or failure of business operations (Aldlaigan, A. H. and Francis A. Buttle, 2020). Managers need to understand and implement human resource management to prevent the following issues:
- Hiring the wrong staff.
- Engaging employees to do the wrong job.
- The number of employees is so many.
- The team does not do their best.
- Employees think they did not pay, treated fairly.
If the bank manages well, there will be well-trained, skilled, knowledgeable, and enthusiastic employees who will do their best. Such human resources give commercial banks a more competitive advantage (Aneesh A., Dileeplal J., & Abraham M, 2014). On the other hand, the management style affects the atmosphere and psychology of the organization. This factor affects the psychology of every member and the labor productivity of other members of the organization. Human resource management, therefore, plays a central role in establishing organizations, helping organizations survive and thrive in the marketplace.
2.2 Attracting of human resources (AHR)
Attracting human resources uses specific policies and measures to attract human resources. Mainly it introduces the analysis of positions, plans the supply and demand of human resources for businesses, recruits people, surveys, recruits noticed, selects, hires, and arranges jobs (Bahia, K., Jacques Nantel, 2000). This group focuses on ensuring that there is a sufficient number of employees with the qualifications appropriate for the work of the business and includes activities such as employee planning, job analysis, and recruitment. It is to recruit the right people for the right job; the banks must firstly base on its productions/services, business plans and the current situation of employing employees in the banks to determine which tasks and positions need to recruit more people (Tsoukatos, E. and Evmorfia Mastrojianni, 2010).
A job analysis will tell banks how many more employees banks need to hire and what the requirements are for the candidates. Banks are applying hiring skills such as quizzes and interviews will help businesses choose the best candidate for the job (Cheserek, L. K., Kimwolo, A. K., & Cherop, F, 2015). Therefore, commercial banks have the recruiting function group of activities: forecasting and planning human resources, analyzing jobs, interviewing, quizzing, collecting, storing, and processing information about the human resources of banks.
- Hypothesis H1: Attracting of human resources has a positive impact on the human resource management of commercial banks in Vietnam.
- Hypothesis H2: Attracting of human resources has a positive impact on the bank service quality of commercial banks in Vietnam.
2.3 Training and development of human resources (TAD)
It aims to improve skills, knowledge, and new perceptions for employees. Training and development towards are enhancing the value of human resources for commercial banks to increase competitiveness as well as increase adaptability to a changing environment (Cui, Charles Chi, Barbara R. Lewis, and Won Park, 2003). This group focuses on improving the capacity of employees, ensuring that employees for the banks who have the skills and qualifications necessary to complete the assigned work and create favorable conditions for employees to develop and maximum personal capacity (Lau, M.M., Cheung, R., Lam, A.Y. C., & Chu, Y.T, 2013). Training and development of human resources often carry out activities such as vocational guidance, training, practical skills training for workers, fostering and improving skills, updating knowledge and new management methods, new technology, and techniques for managers and professional staff (Hilda Ghaleb Madanat, 2018).
- Hypothesis H3: Training and development of human resources have a positive impact on the human resource management of commercial banks in Vietnam.
- Hypothesis H4: Training and development of human resources have a positive impact on the bank service quality of commercial banks in Vietnam.
2.4 Maintaining of human resources (MHR)
It aimed at the effective use of human resources. Maintaining Human resources seeks to maximize the ability of employees to work and, at the same time, create a loyal attachment to the organization. The policies are related to the right encouragement that will contribute to raising morale and enthusiasm for employees (Igaz, A. T., & Ali, A, 2013). It focuses on the maintenance and effective use of human resources in commercial banks. This factor consists of two smaller functions: stimulating, motivating, and maintaining employees, developing good labor relationships in the banks. It is exciting and motivating purposes related to policies and activities to encourage and motivate employees in banks to work enthusiastically, wholeheartedly, and responsibly to complete jobs with quality high (Islam, N., and Md. Borak Ali, 2011).
Therefore, the commercial banks need to build and to manage the payroll system, establishing and applying salary policies, promotions, discipline, bonuses, benefits, allowances, assessing the performance of employees (Talib, F., & Rahman, Z, 2012). Maintaining Human resources is the essential activity of the stimulating function. Labor is relations functions related to businesses to improve the working environment and working relationships such as signing labor contracts, settling complaints, labor disputes, staffing relations. Improve the working environment, health care, insurance, and labor safety.
- Hypothesis H5: Maintaining of human resources has a positive impact on the human resource management of commercial banks in Vietnam.
- Hypothesis H6: Maintaining of human resources has a positive impact on the bank service quality of commercial banks in Vietnam.
2.5 Bank service quality (BSQ)
Bank service quality is the satisfaction of customers' needs while ensuring the safety and efficiency in commercial operations of commercial banks. Bank service quality is an essential factor affecting the existence and development of any commercial bank. Bank service quality has followed: The degree of difference between consumers' expectations for services and their perceptions of service results. Bank service quality is a measure of the level of service delivered to guests how well the product matches customers' expectations The creation of a service. Class means consistently meeting customer expectations (Zureikat, K.K, 2017). Bank service quality must necessarily satisfy customer needs and take requests. Customers' needs are the basis for improving the service quality. If the customer feels that the service does not meet their needs, they will not be satisfied with the quality of service they receive (Rakesh, R, 2012). In a modern business environment, service providers must always address customer needs and try their best to meet those needs.
- Hypothesis H7: Human resource management has a positive impact on the bank service quality of commercial banks in Vietnam.
Figure 1 Research model for human resource management impacting on the bank service quality of commercial banks in Vietnam
3 Methods of research
The research process for human resource management impacting the bank service quality of commercial banks in Vietnam.
In this study, the research process is using a combination of two research methods: qualitative research and quantitative research following:
- Qualitative research methods used in the preliminary research phase: studying secondary documents and group discussions to build an initial scale.
- Quantitative analysis used in the official research phase: testing scales and information collection techniques to measure human resource management impacting on the bank service quality of commercial banks in Vietnam.
- On the other hand, the researchers also had used SPSS 20.0 software to check, analyze, and evaluate data related to the research problem.
Quantitative research: the researchers are using the complete questionnaire to conduct managers’ survey at the commercial banks in Ho Chi Minh City and Dong Nai province. Data collected from December 2018 to November 2019. The researchers applied a simple random technique, tested Cronbach's Alpha, and had the exploratory factor analysis (EFA), which used for Structural Equation Modelling (SEM) technique. Then conduct data analysis through SPSS 20.0 software with descriptive statistical tools, evaluate the reliability of the scale with Cronbach's Alpha, explore factor analysis (EFA), and verify the security. Safety of the level, correlation analysis, multiple linear regression to test research hypotheses, and research models. We can see the details bellowed three 3 phases.
- Phase 1: The paper used the quality methodology by surveying 40 experts who understand about human resource management to improve the questionnaire. The results interviewed 40 experts who showed that human resource management is impacting on the bank service quality of commercial banks in Vietnam.
- Phase 2: 850 managers are working the commercial banks in Vietnam. There are 19 items and 814 samples processed and Data collected from December 2018 to November 2019 in Dong Nai province and Ho Chi Minh City. It took 25 minutes to finish the survey. The researchers surveyed by hard copy distributed among more than 70.000 managers of the commercial banks in Vietnam.
- Phase 3: The CFA and model tested, and Structural Equation Modelling analyzed. A research model is considered relevant to market data if Chi-square testing is P-value > 5%; CMIN/df ≤ 2, some cases CMIN/df maybe ≤ 3.0 or < 5.0 and GFI accepted when it is 0.8; RMSEA ≤ 0.08 (Hair, Anderson, Tatham, & Black, 1998).
4 Research results
The scale reliability tests for human resource management impacting on the bank service quality of commercial banks in Vietnam
Table 1 The scale reliability tests for human resource management impacting on the bank service quality of commercial banks in Vietnam
Items
Contents
Cronbach's Alpha if Item Deleted
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AHR1
- Commercial banks have the task of planning human resources, reasonable annual recruitment plans, announcing broad recruitment information on the mass media 0.929
AHR2
- Commercial banks have clear, strict and transparent regulations on labor recruitment 0.957
AHR3
- Recruitment do sincerely, publicly, transparently and clearly 0.954
AHR4
- Employees are recruited to ensure the right positions and perform a job analysis 0.931
- Cronbach's Alpha for attracting human resources (AHR) 0.957
TAD1
- Commercial banks have a plan to train and foster workers 0.790
TAD2
- Commercial banks organize annual training courses for professional knowledge 0.803
TAD3
- Commercial banks always create favorable conditions for employees to improve their qualifications in the short and long term 0.839
TAD4
- Commercial banks always attach great importance to evaluating post-training results and policies to reward employees for achieving excellent results in their work 0.790
- Cronbach's Alpha for training and development of human resources (TAD) 0.857
MHR1
- Commercial banks arrange labor following the qualifications of employees 0.933
MHR2
- Commercial banks have a set of standards and a grading scale for labor quality 0.945
MHR3
- Commercial banks adopt policies to respect the talents and skilled workers 0.942
MHR4
- Commercial banks shall promote and appoint based on their professional capacity and work results 0.924
- Cronbach's Alpha for maintaining human resources (MHR) 0.951
HRM1
- Attracting of human resources has a positive impact on the human resource management of commercial banks in Vietnam 0.930
HRM2
- Training and development of human resources have a positive effect on the human resource management of commercial banks in Vietnam 0.882
HRM3
- Maintaining human resources has a positive impact on the human resource management of commercial banks in Vietnam 0.921
- Cronbach's Alpha for human resource management (HRM) 0.939
BSQ1
- Attracting of human resources has a positive impact on the bank service quality 0.859
BSQ2
- Training and development of human resources have a positive impact on the bank service quality 0.831
BSQ3
- Maintaining of human resources has a positive effect on the bank service quality 0.881
BSQ4
- human resource management has a positive impact on the bank service quality 0.841
- Cronbach's Alpha for bank service quality (BSQ) 0.886
(Source: Data processed by SPSS 20.0)
- Table 1 showed that all of 19 variables surveyed Corrected item-total Correlation greater than 0.3 and Cronbach's Alpha if Item deleted greater than 0.8, and Cronbach's Alpha is very reliable. Such observations make it eligible for the survey variables after the testing scale. This result showed that data was suitable and safe for researching.
- Table 2 KMO and Bartlett's test for human resource management impacting on the bank service quality of commercial banks in Vietnam
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