Factors affecting human resource management in solar power generation companies in Vietnam



This report studies the factors that affect the management of human resources (HRM) at some solar power generation companies in Vietnam. The authors have surveyed, analysed and built a research model of more than 500 employees from different solar power generation companies. Research results show that there are six factors affecting the management of human resources, which are: income, working conditions, colleague relationship; the relevance of the job to the career goals; the level of empowerment; and training and development.

Basing on the results, the authors have made some suggestions to help those companies improve the effectiveness of theirs human resource management.

1. Introduction

Nowadays, people tend to use a lot of clean energy equipment in their daily life. It can be said that using clean energy has brought great benefits to individuals and communities, preserved and protected the environment for future generations, and saved the cost of electric consumption. Using clean energy including wind and solar power helps companies save cost and increase production effectiveness. Moreover, this industry also creates job opportunities for many people; greatly contribute to the state’s tax revenue.

With the economic regulations of the Government via Decision No. 11/2017/QD-TTg on encouragement mechanisms of solar energy projects and Decision No. 39/2018/QD-TTg on supporting mechanisms of wind energy projects in Vietnam, solar and wind power generation companies have been increased in both quantity and quality. According to the 2020 statistics, there have been thousands solar energy generation companies since 2018. The profit after taxes of those companies is in billion USD, the average number of employees fluctuates around one thousand. Besides, there are numerous challenges such as: increasing electricity demand; exhausting primary energy sources; stricter requirements of environment protection in electricity activities and so on. Since human resource management is the key factor to the business effectiveness, the leaders of the companies must pay significant attention to it. Although this issue is well noticed by many business managers, it has not been done successfully because each company has different conditions for human resource management. The effectiveness of human resource management practices depends on not only the leaders’ awareness and efforts but also other factors.

There have been numerous works of foreign and domestic authors on human resource management in enterprises such as: Dr. Jayeshkumar Pitroda, Ashish H. Makwana, Nareshkumar M. Prajapati, (2016),”Analysis of factors affecting human resource management in construction companies, using RII, IMP.I and RIR methods. The study shows that human resources are greatly important to an organisation to conduct various business activities. Without them, the organisation cannot survive or function effectively. The success of any organisation considerably depends on the effectiveness of human resource usage.

According to Wasantha Rajapakshe, (2017) in ”Factors affecting the implementation of human resource management policy in small and medium-sized enterprises (SME) in Sri Lanka”, the implementation of human resource management policy in SME related to human resource management is often ignored. The main purpose of the study is to examine the theories and models relating to the implementation; then developing a conceptual framework of factors affecting human resource management in Sri Lanka SME.

In Vietnam, the study “The influence of human resource management practices on employee satisfaction and business results” by Bui Thi Thanh et al (2014) is a basic scientific research. It is based on the human resource management practices of Dong Nai Telecommunications including 7 components: Job identification; Recruitment; Training — Promotion; Performance Evaluation; Compensation; Empowerment and colleague relations. The study of Nguyen Phuc Nguyen et al (2020) focuses on employment engagement at 3 — star hotels in Da Nang. Its results show that there are 7 factors positively affecting employment engagement, which are: immediate supervisor; organizational support; career promotion opportunities; training and development; empowerment; salary and benefits; and job characteristics. The study also provides some policies for the 3-star hotel managers to improve human resource management and employment engagement.

This article uses a quantitative method which is based on the data collected from survey questionnaires and processed by SPSS software. It examines and analyses the suitability of the models, then evaluates the influence of factors on human resource management in solar power generation companies.

2. Theoretical foundations and research hypotheses

Human resources are the key factor to business profits: Since only humans can create goods, service and control the production process, human resources ensure the creativity in organizations and business. Although equipment, assets, financial resources are extremely essential, human resources are even more important. An organization will never achieve its goals and long-term sustainable development without effective human resources.

Human resources are strategic resources: When the society is shifting to knowledge based economy, the roles of technological factors, capital and raw materials are getting decreased. On the other hand, human knowledge factor is getting more and more important. Human resources with dynamic, creative and intellectual human activities will create great values in an enterprise’s development and workers’ typical characters.

Human resources are unlimited resources: The society is changing daily; businesses are rapidly growing and human resources are unlimited. If this resource is properly developed, more and more material wealth will be created for the society, thereby the increasing needs of humans are easily satisfied.

2.1. Salary factor

Salary is what businesses pay employees for work; hence, the employees’ priority concerns are how much they will get and whether that amount is enough for their life or not. This is the basic factor that strongly determines employment engagement.

If the salary is too low, it cannot meet the basic living needs of the employees; their dedication is not well rewarded, which makes them distracted from work. This point is clearly mentioned by Daniel H. Pink (2013) that humans need money to live. If one’s income is inadequate or unreasonable, he will mainly focus on the injustice he is suffering or the anxiety about his life. On the other hand, the income will not be the same at different companies. If one company offers a lower salary than its competitors, the employees can be easily attracted by higher salaries. It is inevitable that they will change jobs.

2.2. Working condition factor

Different working places will have different factors affecting employees. The combination of those factors creates working conditions.

Working condition is the combination of natural, social and economic factors which are expressed via means and subjects of labor, technological process, working environment and its space — time arrangement. Their mutual impacts along with employee relations create a certain condition. The employees’ psycho-physiological condition at work is also considered as a factor of working conditions. Therefore, working conditions are all elements that affect employees’ physical health and comfort at work, including suitable working hours, safety and enjoyment provided with necessary equipment at work (Bellmgham, 2004).

2.3. Colleague relationship factor

The awareness level and goals of employees and managers differ from businesses to businesses. As a result, there is often a huge gap between the employees and managers. Building a manager — employee relationship is often difficult and so is the one between employees. Therefore, the leaders must not only create a close relationship to their employees, but also encourage and grow up the community spirit between all employees. According to Dan Ariely (2015), in a social environment in general and in the business environment in particular, relationships are controlled by two basic standards: social and market regulations. Social regulations include human mutual friendliness and affection, help and support in life or work without asking repayment. Market regulations include monetary exchanges such as salary, rents, costs and benefits. If two above regulations are separate, every problem will become clearer and better. If they are partly mixed which means emotional and work problems are also mixed, the conflict will appear. If we combine those two, the social regulation will change to market one, which breaks the social standards. The relationships will be destroyed and not repairable.

2.4. Factor of job — career goals relevance

Pursuant to Ken Blanchard, the coherence between an individual and an organisation is his willing — to — corporate spirit and commitment to that organisation. Hence, the recruitment must consider the relevance of the interviewee’s values to the company culture. In other words, it is the coherence between the interviewee’s standards, qualifications, knowledge, skills, ability and the company’s goals. When employees perceive their goals and values as aligned, they will commit to the goals and values of that company (Hart, 2000). The goal coherence is also the suitability between an individual’s values and belief and a company’s regulatory and values. This is the most important factor studied. The goal coherence is also associated with behavior effects and results. The research of sales planning indicates that goal coherence is the priority condition for employee’s positive working attitudes and behaviors. Commitment to an organization’s goals and values plays a significant part in retails and service. The implementation of a service — related organization’s policy and activities requires employees’ commitment to its targets and values (Hartline, 2000).

2.5. Empowerment factor

Leaderboard must supervise a large number of employees, strategic plans, the company’s regulations and operating procedures. Therefore, they do not have enough time to carry out everything but to share with their managerial staffs. As stated by Hoa Nhan (2014), the leaders’ functions now is no longer working but taking care of things. Empowerment is their ‘clone technique’ to take care of things. Management means hiring other people to finish the tasks and ensuring them finish the job in the best and cheapest way. Therefore, empowerment is the process of transferring supervising authority for the managerial staffs so that they can actively apply their skills and knowledge to achieve the company’s targets. Empowerment is the biggest goal that authentic leaders tend to. They consider empowerment naturally inevitable for business’s sustainable development. In the opinion of Bill George (2014), authentic leaders desire to serve others by their leadership. They prefer empowering others for making differences to keeping power and money themselves.

2.6. Training and development factor

Human resource training and development is understood as a system of methods focusing on human’s learning process, which helps them to acquire new knowledge and skills, change the attitudes and behaviors, and improve one’s performance at work. It is set of organized activities carried out in a certain time which aims to better employees’ performance at work. However, there is also a difference between training and development. On the report of Tran Kim Dung (2013), present-oriented training for employees provides them essential skills to finish their current job. Meanwhile, development helps them with skills for future job. When employees get promoted, new knowledge and skilled are required. Development helps them to well prepare those necessary things.

In conclusion, there are many factors affecting human resource management at the enterprises with different levels. Based on the scientists’ research, the authors summarise, analyse and propose a hypothesis model of those factors as follows:

Hypothesized model:

H1a: Income and benefit have a positive impact on human resource management effectiveness (+)

H1b: Working conditions have a positive impact on human resource management effectiveness (+)

H1c: Working relationship has a positive impact on human resource management effectiveness (+)

H1d: The relevance of job — career goals has a positive impact on human resource management effectiveness (+)

H1e: Empowerment has a positive impact on human resource management effectiveness (+)

H1f: Training and development have a positive impact on human resource management effectiveness (+)

3. Research methods

Scale development: 5-point Likert scale is used with: 1 is totally disagree; 2 is disagree; 3 is neutral; 4 is agree and 5 is totally agree. This is a type of scale in which a series of attitude-related questionnaires are given and the respondent can choose one of them.

The research is carried out through a quantitative collection process based on a pre-built questionnaire. This process was made by directly examining all staffs and managers at solar energy generation companies. The information collected will be analysed by SPSS 20 software.

Table 1

Scale of components and Coding

Order	Components	Coding
H1a	Income and benefit	TN
1	The salary is proportional to working competence	TN1
2	The salary can ensure the life standards	TN2
3	The fairness in salary paid is guaranteed	TN3
H1b	Working conditions	ĐK
4	Working time and over time are arranged properly	ĐK1
5	Items and machinery for the job are well equipped	ĐK2
6	Safe working place	ĐK3
7	Employees can actively in charge of the work and are not under supervised or controlled.	ĐK4
8	Safety and labor protection are guaranteed.	ĐK5
H1c	Colleague relationship	QH
9	Colleagues are always friendly	QH1
10	The relationship between the management board and staffs is close	QH2
11	Colleagues are always willing to help each other at work	QH3
12	The company ensures all safety condition and labor protection.	QH4
H1d	The relevance levels of job — career goals	PH
13	Knowledge and skills relevant to the job	PH1
14	The career goals relevant to the assigned job	PH2
15	Commitment to the company’s business goals	PH3
16	The relevance of employees and the company’s development	PH4
H1e	Empowerment	TQ
17	Be encouraged to make decisions related to the job	TQ1
18	Be encouraged to make decisions related to the company operations	TQ2
19	Be encouraged to make proposals for the company improvements	TQ3
H1f	Training and development	ĐT
20	Employees are fully trained to finish their jobs	ĐT1
21	Employees are always encouraged to learn advanced knowledge and improve qualifications	ĐT2
22	Training courses’ contents are suitable to employees’ ability	ĐT3
23	Promotion opportunities are always available to capable employees	ĐT4
24	Employees are well noticed in advance about the promotion condition and criteria	ĐT5
H1g	Human resource management effectiveness	HQ
25	Be satisfied with the current working environment	HQ1
26	To stick with the company	HQ2
27	Always improve skills and capacity to continuously contribute to the company	HQ3

Sample and data collection methods

According to Hoang Trong and Chu Hoang Mong Ngoc (2008), in factor analysis techniques, the number of samples must be at least 4 to 5 times higher than the variables. If the variable number in the research is 27, the minimum samples collected must be 108. In the opinion of Tabachnick and Fidell (2007), in multiple regression analysis (MRL), the number of samples is calculated as n ≥ 50 + 8p, in which n is sample quantity; p is the number of independent variables. If the research has 6 independent variables, the minimum number of samples must be 98. The survey subjects are solar energy generation companies, the research is carried out in 3 phases. The first one is qualitative research which helps to redefine the proposed factors affecting human resource management and set up the evaluation scale. The second phase is a preliminary survey with 10 subjects. The last one is an official research with 500 staffs at some solar energy generation companies. After getting and cleaning data, the final number of suitable samples is 406. The result indicates that there are 6 factors affecting those companies’ human resource management, which are: (1) Income and benefit; (2) Working conditions; (3) Colleague relationship; (4) The relevance of job — career goals; (5) Empowerment; (6) Training and development.

Data analysis method:

The authors use multivariable analysis to study the data. First of all, Cronbach’s Alpha and Corrected Item — Total Correlation are used as: the Cronbach’s Alpha is greater than 0.7 and Corrected Item — Total Correlation is greater than 0.3. Next, exploratory factor analysis (EFA) is applied to evaluate the factors’ suitability, unidirectionality and convergence with KMO ≥ 0.5; total variance explained ≥ 50 % and factor loading ≥ 0.5 (Hair et al., 2006). It also helps to evaluate the relationship among the factors. Lastly, ordinary least squares regression (OLS) is used in order to test the research hypotheses; the statistic sig. taken is 5 % as usual.

4. Research results

Scale result testing:

The testing results show that all factors are consistent, the Cronbach’s Alpha is greater than 0.7, the Corrected Item-Total Correlation of all items is greater than 0.3 (Table 3). The component analysis indicates that the item groups in each factor are unidirectional scales and factor analysis is relevant to the research data. KMO is all greater than 0.5; Total variance extracted (TVE) is greater than 50 % and factor loading is all greater than 0.5 (Table 2).

Table 2

Factor Reliability Assessment

Component	Cronbach Alpha if Item Deleted	Corrected Item-Total Correlation	KMO	TVE (%)	Smallest Factor loading
Income and Benefit (TN)	.731(3)	.411 -.541			.745
Working Conditions (ĐK)	.613 (5)	.512 -.802			.604
Colleague Relationship (QH)	.714(4)	.422 -.656			.612
The relevance of job — career goals (PH)	.708(5)	.417 -.828			.742
Empowerment (TQ)	.816(3)	.525-.719			.623
Training and Development ( ĐT)	.805(5)	.512-.703			.735
Human resource management Effectiveness (HQ)	.732 (4)	.456 -.689	0.721	55.132	.683

Correlation Analysis

The results show that the average score (mean) on the influence of those factors on human resource management effectiveness and the model factors varies between 2 and 3 in Likert Scale, the factors’ standard deviation (SD) is quite small (Table 3). The table also shows Training and Development factor greatly affects the human resource management in those companies (Mean = 3.789, SD = 0.726). The factor which the least affects is the relevance of job — career goals (Mean = 2.198, SD = 0.506). The correlation analysis results indicate all model components are interrelated (r ≠ 0).

Table 3

Correlation Matrix and Each Component Assessment

Item	Mean	SD	HQ	TN	ĐK	QH	PH	TQ	ĐT
TN	3.591	.602	1
ĐK	3.612	.691	.602 **	1
QH	3.735	.704	.494 *	.326 **	1
PH	2.198	.506	.603 **	.568 **	.261 **	1
TQ	3.607	.625	.577 **	.434 **	.335 **	.516 **	1
ĐT	3.789	.726	.285 **	.323 **	.274 **	.515 **	296	1
HQ	2.950	.682	.291 **	.148 **	.167 **	.278 **	159	.187	1

Hypothesis testing results:

The results of the regression model indicate that human resource management is significantly influenced by 6 factors: Income and benefit; working conditions; colleague relationship; the relevance of job — career goals; empowerment and training and development. Therefore, the hypotheses H1a, H1b, H1c, H1d, H1e; H1f are all accepted. Training and development factor is considered the strongest-affecting (Beta = 0.289); the second one is colleague relationship (Beta = 0.206); the third is working conditions (Beta = 0.189); the fourth is empowerment (Beta = 0.171); the fifth is income and benefit (Beta = 0.12); the last is the relevance of job — career goals (Beta = 0.051).

5. Conclusions and proposals

Determining the factors affecting human resource management in solar energy generation companies in Vietnam is extremely useful for stakeholders understand more clearly how those factors influence the human resource management.

Based on the previous research and the related theoretical basis, the authors defined 6 factors affecting human resource management which are measured by 27 items. They are: Income and benefit; working conditions; colleague relationship; the relevance of job — career goals; empowerment and training and development.

After applying Exploratory Factor Analysis (EFA), the study has removed 2 variables QH4 and DT2. As a result, the factor scale reached reliability. The factor loadings of the items are all greater than 0.5 and the factor loading difference of each item is greater than 0.3. The calibrated scale is used for Correlation analysis, multiple-linear-regression analysis, Analysis of Variance (ANOVA) and so on.

The results of multiple-linear-regression analysis indicate the suitability of the model. All 6 factors have a positive impact on human resource management in solar energy generation companies.

Therefore, from the research results, the leaders in solar energy generation companies should pay more attention to training and development since this is the strongest factor affecting their human resource management.

The results also show that the success of those companies considerably depends on the effectiveness of human resource management. The fluctuating human resources bring difficulties to leaders in controlling and managing. Based on the theoretical basis and the results of regression model analysis on factors affecting human resource management, the authors have made some proposals to improve the effectiveness of human resource management at those companies as follows:

*Income and benefit: Pursuant to the results, this factor does not have great influence on human resource management (Beta = 0.12). However, it may change in the future. Hence, the company leaders should pay significant attention to build a fair income — welfare mechanism, which ensures employees’ benefits. Apparently, in a competitive environment, many new businesses in the same industry will find all ways to attract talents to their sides with high salary. If the income is not good enough, employees will leave for other companies.

*Working condition: The result shows that this factor’s level of influence is pretty high (Beta = 0.189). In order to boost the employees’ working efficiency and engagement, the leaders should continuously create and improve a positive working environment. According to the theoretical basis, a comfortable and united working environment with full equipment helps employees more concentrate on their jobs.

*Colleague relationship: It is necessary to create a friendly — united — trusted relationship between the leaders — employees and among the employees. Once trusting each other, both individuals and organisations tend to share all information and work together for the best benefits of both sides. The organizational trust could be transferred to customers via employees (who directly work with them), bringing a long-term customer relationship. The research result of Beta = 0.206 specifies that this factor have a significant impact. Leaders should focus on developing and heightening the companies’ social standards such as: replacing money rewards by gifts; providing personal facilities for key staffs (for examples laptops, cell phones) so that they can do their jobs anywhere; taking care of the benefits of not only the employees but also their families.

*The relevance of job — career goals: This factor affects the human resource management the least (Beta = 0.051), however, the leaders still had better notice from the recruitment so that they can employ the most suitable candidates. The recruitment should include the very details of the job description and essential qualifications. During the interview, it is necessary to provide as much as possible the job position information to the applicants. The companies should assign the tasks which are suitable for employees’ ability and strengths, and help them to understand their jobs. If the employees want to change to different departments, the leaders also can consider their expectations and swift them to another suitable position.

*Empowerment: Companies need to divide management authority to managerial staffs to further supervise their employees. Managerial staffs include heads of departments, team leaders, senior staffs who understand clearly their employees’ thoughts, feelings and expectations. Given the suitable empowerment, the managerial staffs can be more responsible and proactive in handling the companies’ issues. Moreover, this is also the key workforce of the companies; empowerment to the managerial staffs not only shows the Board of Directors’ trust in them but also bring them opportunities of developing their leadership ability.

*Training and development: According to the theory and the research result (indicating that this is the factor most affecting the human resource management with Beta = 0.289), training and development factor plays a crucial part in human resource maintenance in particular and in human resource management in general. Being well aware of that, solar energy generation companies have been recently greatly focused on training and development. This can be demonstrated by the satisfaction of the employees toward their training and development. In order to keep improving employees’ capacity, the companies need continuously focus on training advanced knowledge such as professional skills, Communicative English, Specialized English (for foreigner partner negotiation), customer service, teamwork (a company’s department is also a customer since the product of this department is the raw material of the others). Besides, leaders should also have policies to support (both time and money) their staffs to enhance their qualifications.

References:

1. Bill George, Translators Nguyen Duong Hieu and Nguyen Thi Thu Huong (2014), Authentic Leadership, Time Publisher Hanoi.
2. Dan Ariely, Translators Hong Le and Phuong Lan (2014), Predictably Irrational, 2 ^nd edition, Labour And Social Publisher Hanoi.
3. Dan Ariely, Translators Tran Quang Hong and Dao Thi Huong Lan (2015), The Upside of Irrationality, Hong Duc Publisher Hanoi.
4. Daniel H. Pink, Translators Kim Ngoc and Thuy Nguyet (2013), Drive: The Surprising Truth About What Motivates Us, Labour And Social Publisher Hanoi.
5. David J. Lieberman, Translator Xuan Chi (2014), Executive Power, 2 ^nd edition, Labour And Social Publisher Hanoi.
6. Nguyen Phuc Nguyen et al. (2020), A study on employee’s engagement with the organization: The case of three star hotels in Da Nang city.
7. Hoa Nhan, Tran Thu Hien et al. (2014), Four Letters of Leadership/ Management Art, Labour And Social Publisher Hanoi.
8. Hoang Trong, Chu Nguyen Mong Ngoc (2008), Analysing Research Data with SPSS, Hong Duc Publisher, University of Economics, Ho Chi Minh City.
9. Ken Blanchard, Ph. D, Translators Lien Nhu, Hanh Nguyen and Nguyen Van Phuoc (2007), Whale Done, Ho Chi Minh City General Publishing House.
10. Nguyen Dinh Tho and Nguyen Thi Mai Trang (2007), Market Research, Vietnam National University Press, Ho Chi Minh City.
11. Tran Kim Dung (2013), Human Resource Management, 8 ^th edition, Ho Chi Minh City General Publishing House.
12. Bellingham R. (2004), Job Satisfaction Survey, Wellness Council of America.
13. Hart, P.M., VVearing, A.J., Conn, M-, Carter, N.L. & Dingle, R.K. (2000), «Development of the School Organisational Health Questionnaire: A Measure for Assessing Teacher Morale and School Organisational Climate”, Brítish Journal of Educational Psychology, Vol,70 (24), 211–228.
14. Hartline, M.D. & Ferrell, o.c. (1996), The Management of Customer-Contact Service Employees’1, Journal of Marketing, Vol.60 (Octobèr), 52–70.
15. Nataliia Hunko, (2013), Factors influencing the formation of human resources.
16. Government’s Decision No. 11/2017/QD-TTg on encouragement mechanisms of solar energy projects in Vietnam.