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We strive to ensure that our training creates meaningful and lasting behavior change for participants, and results in measurable business impact and return on investment for the company.
Strategic - training and development must be aligned with and support business objectives and strategy. Management commitment - training and development must be formally "endorsed" by senior management and all training initiatives must have their ongoing and visible support.
Competency driven - training and development must focus on increasing proficiency in the critical competencies required for success now and in the future. Practical - what is taught must be relevant (industry, client and job specific), uncomplicated, and results-oriented, making participants' work easier, not more difficult. Coaching - managers must understand training content ('what to coach'), know how to transfer ('how to coach') to their people, and take ownership for ensuring effective on-the-job implementation by participants. Integrated - training and development should be linked with other organizational support systems (e.g.
SOEs management mechanism, admittedly influenced by the subsidy system, does not encourage business managers to be more responsible and open minded as actually practiced in a market economy. This study, therefore, tries to shed light on the different problems in human resources development (HRD) of SOEs in Ho Chi Minh City, considered as Vietnam’s economic and cultural center, and to suggest guidelines that would help formulate sound HRD practices. In 1986, as a response to the drastic geo-political challenges of the time, the government of Vietnam (GVN) decided to launch an all-out renovation campaign, called doi moi with a view to transforming the centrally-planned economy into a market economy. The privatization process started in 1992 with the announcement of the sale of SOEs to the public. What makes an enterprise effective is not only capital or technology where SOEs in Vietnam can manage to have but also intangible assets such as human resources which is the most critical. One major purpose of T&D is to remove performance deficiency, both current and anticipated. Another purpose of T&D, especially relevant to organizations that are introducing new technologies, is to make the current work force more flexible and adaptable. T&D can also increase the level of commitment of employees to the organization and will also accentuate the perception that the organization is a good place to work.
During the period of centrally-planned economy, all SOEs budgets were subsidized by the government The government also played the role of the sole supplier and the biggest customer of SOEs. The criteria for recruitment and promotion of managers did not reflect concrete requirements for different fields and branches of business and production.
The centrally-planned economy does not provide concrete criteria for appraising the real operation results and contributions of a particular enterprise. The organizational structure of SOEs changes very frequently and in many cases without considering the internal needs of the organization but initiated by the upper level management and the party’s committee.
According to a report issued by the World Bank in October 1995, several reforms were introduced in the late 1980s aiming at restructuring the state sector. Initial reforms were introduced in the mid-1980s, immediately after the demise of COMECON which led to a sharp reduction of trade and financial flows to Vietnam. A range of policy measures, including the provision of substantially increased levels of subsidized credit, were adopted to address these concerns which contributed to the resurgence of inflation in 1990-91. The early reforms resulted in increased autonomy and imposed a hard budget constraint on SOEs. As an experiment in SOEs reform, the government introduced a pilot program of equitization (co phan hoa) — the officially preferred term for privatization. The government views the experience with equitization as slower than anticipated but nonetheless is pleased with the initial results.
While this record is encouraging, so far the overall impact of the equitization program on the SOE reform has nevertheless been very limited. The on-going transition process toward a market economy requires a critical mass of skilled employees and competent business managers. The third group is people who do not have any professional training whatsoever, but who have picked up some managerial abilities on-the-job. Going on the assumption that at least three managers needed to be trained for each enterprise, then the potential for management training in the state-owned sector alone is estimated at approximately 2,550 in Ho Chi Minh City and 19,000 in the country (Ngo Dinh Dung, 1996:47). The research studied the human resources development practices of SOEs with over 500 employees operating in Ho Chi Minh City, Ba Ria-Vung Tau, Dong Nai and Song Be provinces.
The discussion is also based on findings from in-depth interviews conducted with managers and employees of eight SOEs in Ho Chi Mirth City.
Interestingly, 96% of the respondents claim to provide training for incumbent employees, while training for new employees was found less significant (provided by only 62%). When the respondents were asked to indicate the reasons for conducting training and development, the most important reason cited was to improve employee performance, which will therefore improve the performance of the enterprise (96%) (Figure 2). Through training, employees will get a chance to upgrade their technical skills and to eventually apply the newly acquired skills for the benefit of the enterprise. It is also important to note that for 32% of the respondents, training and development are considered a means to provide the employees with some kind of compensation, especially when such training is conducted abroad.
According to the survey, about 36% of the respondents have had some kind of training abroad. On-the-job training is the type of training provided at the work site and is widely used in the SOEs under survey (77%) (Figure 3). Self-study is another method preferred by many interviewees because it permits employees’ flexibility to learn on their own pace. Another method that is implemented by as much as 28% of the enterprises surveyed is job rotation. Vestibule training or simulation is less used (only 2%) because this method is considered expensive. Although every human resource department may coordinate training activities, actual training is usually conducted by the respective line managers, especially for on-the-job training. Some SOEs even allow employees to pursue full time or long-term training to acquire professional and further education qualifications. Recently, seminars and conferences have become a preferred method of training and are used in 57% of the SOEs surveyed (Figure 4). Consultants are the resources used the least for training by SOEs (15%) because this type of business is rather new and very costly.
In all the SOEs interviewed, evaluation of training programs is practically neglected by the human resources department. Training and retraining for existing managers are very important in a fast changing environment like in Vietnam today.
Understandably such business environment does not motivate SOE managers to generate profits for their enterprises. Recognizing the need for T&D, in those industries which have experienced high growth such as oil exploitation, posts and telecommunications, airline and banking, it is believed, although it is difficult to get the exact figures, that a large sum of money have been reserved in their budgets for this purpose. Traditionally, promotion in SOEs had been decided by criteria such as relationship, position, seniority, loyalty or connections other than personal contributions to the enterprise. Interesting enough, performance appraisal is claimed to be practiced in 94% of the enterprises surveyed. Twenty-six percent of the respondents mentioned performance appraisal as one method to identify employees’ training needs and admitted that this is a very important purpose that employees expect from the appraisal process. There were several problems associated with the appraisal system which interviewees regularly complained. Although 70% of the respondents claimed to have career planning and development programs, it is generally considered the employees’ responsibility.
Thus, despite being reputed for low compensation, jobs in SOEs are considered stable and less demanding than those in the private sector. If the above assumption is true, the prospects for SOEs are not encouraging as they consist mainly of people who seek secured tenure and who are not motivated to perform well in their work.
The discussion of the major findings mostly focuses on managerial issues that are generally seen deficient in most SOEs and to propose solutions for their improvement. There is a true need for any SOE of considerable size to set up a separate and full-fledged Human Resource Department with a clear mission and defined policy which are developed along the line of the common goals and objectives of the enterprise.
An integrated human resource strategy should be developed with focus on recruitment, selection, training, career development, incentive system, and so forth to build a competent and motivated workforce. Training programs (in-house or off-house) should aim at improving the efficiency and productivity of the workers in particular, and of the enterprise in general. Enterprises in the same industry or geography should jointly organize (on-the-job) training courses for their employees to reduce the costs.
Allocate special budgets for employee training, voluntary education, and management development program; encourage employees to attend update, short-term or outside working hour courses such as (Executive) MBA or certificate programs organized by local or foreign educational institutions. Establish linkage with educational institutions, especially higher education, to link needs with supply. Develop a replacement plan to develop local potential managers to take over the responsibilities of the expatriates in the joint ventures. While recognizing that policy guidelines are still considered important as SOEs are regarded the State’s instrument to ensure their leading role in the national economy it should be given lesser weight and only next to other relevant criteria for promotion and appointment. Swipe your finger across the screen to slash them!TRAINING AND DEVELOPMENT PROCESSImparting of employees and oftenshe is expected to saharalearn ways . There is practically no perception from the management to develop the work force in order to improve the enterprise’s overall performance, as managers are not strictly evaluated by organizational results. The doi moi’s most important aims were to revive the private sector and to restructure the state-owned enterprises (SOEs).
A recent analysis based on official statistics reveals the detail that the number of SOEs operating at a loss increased from 22% in 1996 to more than 30% in 1997 and perhaps as many as 50% judging by the costs of operation (Kim Diep, 1998:6).

It was an attempt to transform loss-making SOEs into private companies which would be more aggressive, faster moving, and infused with a more entrepreneurial spirit.
It is a planned and continuous effort by management to improve employee competency levels and organizational performance through training and development programs.
Employee training and development is an attempt to improve current or future employee performance by developing their attitudes or enhancing their skills and knowledge. Conducting training to improve performance is particularly important to organizations with stagnant or declining rates of productivity, and changing mode of operation. An organization that is able to increase its adaptability capacity can enhance its chances of survival and sustainable profitability.
Obviously, greater commitment can result in a low turnover rate and less absenteeism, thus increasing productivity. Production targets were assigned by the government and all the products had to be delivered back to the government for distribution. The enterprises were set up by the government’s budget and the managers were appointed by the government agency involved.
Business managers could be transferred to other functions very frequently without evaluating their capabilities and expertise. Therefore, it was very difficult to appraise and identify talented and outstanding managers for possible promotions. Under these conditions, the management of the enterprises has the capacity to change more than required. In effect, they have gradually improved the regulatory and incentive framework and introduced a more flexible management control system that allowed the SOEs to make profits and to achieve their goals. As a direct result of this, several SOEs which formed the backbone of the national economy but heavily dependent on state subsidy were forced to stop their production and other activities.
The unpracticality of these measures was quickly recognized; credit policies were tightened, and SOEs were required to borrow at market rates of interest.
Most of the liquidated enterprises were very small scale; their assets accounted for only 4% of total state enterprise assets and were generally sold to the highest bidders from either the private or the state sector. Several factors have contributed to the disappointing progress in the implementation of the pilot equitization process. A majority of them not only lack the basic knowledge in market economy but also managerial skills to lead enterprises into making profits and expanding growth.
Pointing to the fact that the average age of these managers is 48 years old in 1996, and they will be retired by the year 2,000 the need for a proper management development plan becomes even more acute and urgent (Nguyen The Vien, 1996:34).
They in turn, after the re-training, will facilitate changes in the enterprises and set the course for the employees’ training programs. The interviews provide insight into the human resources development practices in those SOEs and reveal many significant aspects.
In addition, training and development were perceived by the respondents as an opportunity to achieve promotion and follow a chosen career path, thus leading to job satisfaction (55%), and to allow employees to acquire professional and further education qualifications through long-term training (49%). In such cases, the trainees tend to consider training as an opportunity to travel and to generate some savings upon their return.
The type of training was rather frequent in large SOEs operating in key industries such as transportation service, water and electricity, posts and telecommunications, petroleum exploration and production, etc., where substantial resources and close relationships with foreign partners allow for various training opportunities.
However, the disadvantage of this approach is that books and materials are inadequate and not readily available, especially in the case of technical materials in the local language. In general, only young people with good potential and commit to serve the enterprise for a longer term, are considered for such programs.
The system helps SOEs managers and employees further their study in order to attain the minimum level of education required for their positions — a high school education, for example. Enterprises may organize seminars for their own employees, and experts (sometimes foreign visitors) are invited to talk about their experience and competence. At present, the number of foreign consulting firms in Ho Chi Minh City is rapidly increasing. Moreover, to change from a centrally-planned economy to a market-oriented one requires competent managers mastering a wide range of skills that must be upgraded continuously.
Most of the SOEs managers therefore were not properly trained in business administration — a novel field of study in a socialist education curriculum, but a prequisite for a market economy. There is virtually no need for them to upgrade themselves in order to catch up with the changing business environment. For instance, Vietcombank, the healthiest commercial bank with 2,000 employees has spent around VND 4 billion (US$ 364,000) every year for managerial and professional skills training (Ngo Dinh Dung, 1996: 48).
This has resulted in a complacent attitude of the employees and the premature loss of motivation among new entrants. These problems include prejudice, favoritism, insufficient knowledge of the employees’ performance, ignored outcomes, time-consuming, deteriorating relationships among workers (in case benefits are closely related to appraisal outcomes).
In practice, career planning and development are hardly discussed during the performance appraisal process. Fifty-seven percent of respondents even consider their enterprise’s turnover rate almost nil.
As a general practice, working time is flexible in SOEs and there is no threat of being fired due to poor performance.
Jobs in SOEs are merely considered a shelter to maintain their social status that is justified by the discretion and perks attached to the position and not as a means to contribute to the development of the society and to earn their living. This, by no means, suggests that management in SOEs has not experienced any progress over the past few years. Some SOEs have become genuine business organizations able to compete in the new challenging environment and started to exhibit some success stories.
State resources including labor are being used for the benefit of a group of people which are still common. The strategic role of the HR Department should be recognized by the management in providing appropriate resources and responsibility to the department.
At the same time, realize efficient and effective technology transfer from the former research centers in the production of the enterprises. The appointment of key managerial functions should be based on the merit of the candidates’ qualifications instead of political performance. Human Resource Development in State-Owned Enterprises in the Lao People’s Democratic Republic. Human Resources Development in Vietnam: a Case Study of State-Owned Enterprises in Ho Chi Minh City.
Assessment of the Performance of some State Enterprises in the Area of Hanoi; A Survey Report. Assessment of the Performance of the State-Owned Enterprises in Vietnam: The Prospects of Privatization. Management taining Needs Assessment in Vietnam: Pricing and Promotion Strategy for SEAMEO Entry into Vietnam.
Extreme care was taken to enhance all aspects of her comfort and style, while maintaining her pedigree as a true performance yacht. The reasons for these losses are many; however, two in particular stand out, namely poor management and bad utilization of their work force. On their turn, employees are unmotivated to perform their work well and always have ready excuses for their negligence.
For the first time, these business units were allowed to make their own business decisions and at the same time compete in the market place with reduced subsidies. A sizable number of SOEs are facing bankruptcy; many are unable to pay their accumulated domestic and external debts as much as two and a half times their capital assets (Vietnam News, 10-2-1998). However, there have been relatively few success stories considering this new and complex issue. Heavy investment in HRD through education and training have enabled many countries in East and Southeast Asia to achieve significant economic growth.
Development refers to the acquisition of knowledge and skills, and behaviors that improve employees ability to meet changes in job requirement and in client and customer demands. Training is also essential to organizations that are incorporating new technologies which may consequently increase the likelihood of employee obsolescence. T&D is also important because it is generally recognized that society at large will be the indirect beneficiary when individuals become more productive and contributing members of organizations. Under this system, SOEs did not have to pay attention to customer satisfaction and would only have little concern for business development.
On the contrary, based on the experiences of the developed countries, the foundation and development of management in business organizations should be a continuing process. In a rescue attempt, the subsequent adoption of doi moi aimed not only to partially recognize private ownership, but also to implement a number of necessary measures with a view to increase the autonomy and efficiency of the SOEs.
In addition, guidelines were issued to limit subsidies to strategic enterprises and to liquidate non-viable and non-strategic enterprises while protecting the interests of the workers. Some basic objectives of these measures were to restrict the creation of new SOEs, and to consolidate the SOEs through mergers and acquisitions. Most of the funds raised from the liquidation of an enterprise were used to pay their outstanding debts. Originally, a total of 19 SOEs were selected for the pilot equitization program, but a number of them have since withdrawn during the process.
On the average, their operation capitals have been increased by 45%, share values by 4-5 times, profit by 56.9%, and employee incomes by 30-50%. They include a lack of experience by the responsible agencies, incomplete and unclear guidelines on the process of approval and implementation, extremely complex assets valuation problems posed by inadequate accounting and confusing regulations especially with regard to land use rights. The merger of several SOEs in the same industry into consolidated corporations will certainly aggravate the need for training and development as their business scope and complexity will be multiplied. The need of a skilled and dynamic workforce, and a generation of competent managers who can meet the requirements of economic development of the country is becoming an urgent matter.
On the other hand, some employers view training as an expense which will effect their profit levels. Some enterprises also undertook training to provide skilled labour for SOEs in the same field of activity, or retrain their workforce so that they will be redeployed to other functions or can find employment elsewhere. Yet, not many talented and potential employees are able to benefit from these programs since the selection criteria are rather arbitrary and at the sole discretion of some top executives.

In most occasion, training is often done by other organizations, universities or external consultants, because such expertise may not be available within the enterprise (Figure 4). Again, the respondents suggested that the selection and service criteria should be made clearer and transparent and open the opportunities to everybody. Engineers and specialists may be sent abroad to attend international conferences on specific subjects. Foreign consulting firms are more experienced and professional than their local counterparts. Individuals with potential for promotion are nominated by their supervisors to attend courses as part of their preparation for career advancement.
This is a heavy task considering that managers of SOEs are mostly coming from the old generation deep-rooted in the subsidy system.
More often, people were appointed to key functions according to their contributions to the revolution; most of them were proven soldiers rather than competent managers. It is also not necessary for them to acquire, train and develop a new generation of competent staff to improve the enterprise’s management.
Their efforts in T&D has paid back by shown improvement in managerial competence, service quality level and enterprise performance.
However, in recent years, with the influence of advanced human resources practices, promotions are considered to be based mostly on individual performance and merits (89%) (Figure 5).
Only by becoming more skilled, self-confident and having a wide range of job perspectives, employees can gain personal development and assure to contribute to the success of the enterprise.
It was revealed that although many enterprises have appraisal systems, in most cases, it is simply a lip-service exercise in which both managers and employees collude to produce a satisfactory result.
Individual employees must evaluate their personal strengths and weaknesses, preferences, values, interests, and motivation and be responsible for seeking out and taking advantage of opportunities afforded by an organization’s career development programs. This finding seems somewhat controversial given the generally low performance and inferior compensation of SOEs. In some families, the wife chooses to work for SOEs in order to have time to care for the children, while the husband works in the private sector and is responsible for earning real income.
The low compensation of SOEs workers also serves as an excuse for their negligence and slackness, leading to the enterprise’s mediocre performance.
A new breed of SOE managers has emerged, with a dynamic business spirit inspired by a variety of threats and opportunities coming out as a result of the open-door policy. Creating a New Business Climate in Vietnam: Challenges of Privatization and Economic Reform. It is unquestionable that these two factors are key to success or failure of any business operation.
Their inefficiency is largely a result of poor utilization of resources, lack of capital for operation and development, political interference and improper administrative control, poor management, lack of incentives, and so forth.
The process has also been delayed because Vietnam has not found satisfactory solutions for the social consequences caused by the mass privatization with which some Eastern European counterparts have experimented. Indeed, sufficient evidence has shown that the rate of economic development is positively correlated with an investment in HRD (Yanagi, 1993). The correlation between T&D and organizational performance will be proven in the case under study, where the need for better management is most urgent. Management development during this period did not provide the business managers the knowledge and skills required in a competitive environment. Most importantly, the introduction of a profit-based accounting system allowed SOE managers more flexibility in making decisions on production and budgeting which also assured a reduced central financial support. In order to continue operating legally, all SOEs were required to re-register by submitting a detailed application to the State Planning Committee (SPC) through their supervisory institution (the Ministry or People’s Committee). By mid-1995, only three enterprises had completed the process of equitization, namely the Transport Union Company in July 1993, the Refrigeration Engineering Company in December 1993, and the Hiep An Shoe Enterprise in 1994. The decision highlighted the need to ensure that grouped enterprises do not lead to the development of monopolies. Included in the thirty-two-item questionnaire were variables on human resources development such as orientation, training and development, management development, employee performance appraisal, career planning and development, as well as respondents’ general opinions about working motivation. They think they should give more focus on production and sales which are revenue-generating activities that guarantee the enterprise in business. While people with high positions try to get the most out of their authority and privileges, those in the lower ranks have to find their own ways to earn some extra money. Many SOEs encourage their employees to follow short courses relevant to their personal ambition as well as the enterprise’s needs. Since the certification, not the learning, is the main objective, programs are modified and shortened to reduce learning time as much as possible. More often, managers and supervisors travel overseas on business tour to visit foreign enterprises and learn from their operation. Evaluation, if existing, is done rather informally by the manager and does not follow any prescribed procedure or standard. The nomination process may not follow any standard but is done arbitrarily by the supervisor, whose fairness is sometimes questionable. As everything was subsidized, their roles were more to safeguard the state’s assets and ensure jobs and steady income for the workers. In many cases, SOE managers often appoint their family members and relatives to major positions in the enterprise. Seniority still ranks second as a parameter for promotion (47%) and relations is considered the least important (21%).
One explanation for this might be that people are not totally loyal to their work but more concerned about job security, leisure time and a fixed source of income (Nguyen van Phu, 1998: 34). Certainly, for those SOEs, much more effort should be done if they are to justify their existence. International Private Enterprise Development Research Center, Kenan Institute of Private Enterprise.
Human Resource Development in State-Owned Enterprises in Vietnam, Research and Practice in Human Resource Management, 6(1), 85-103.
Although this program was started in 1992, so far there have been only 14 enterprises fully undergone the process out of a list of 150 candidates targeted for 1997-1998 (Minh Nhung, 1998:4). The managers of SOEs apparently discharged their duties by merely complying to what the centrally-planned economy system allowed and requested them to do.
A handful of other enterprises have also completed most of the equitization procedures but are still awaiting final approval to begin issuing shares. Not less important, there seems to be no safety net planned or to be put in place to absorb the social impacts that will bring about as a result of mass equitization yet to come.
It is worth noting that in spite of the concern of the government that competition in the respective sectors should not be suppressed, there is no anti-trust type of legislation in existence. Although it is not officially condoned, people usually do not consider these practices unethical or illegal. Besides, the experience may be discouraging and there exists a high level of time and materials waste.
Those courses are usually organized by the universities or vocational institutions during evenings.
The fact is that after securing a new degree, many employees would choose to leave their enterprises for the private sector where their capabilities are believed to be better utilized and where compensation is commensurate with their contribution.
Teachers are virtually powerless under the authority and influence of the student-managers, and the examination mechanism is arbitrary and not standardized. One respondent agreed that this form of training combines learning with traveling and is widely sought by employees.
They would be a valuable source of assistance to SOEs in providing advanced knowledge in market economy and management practices. Human resources development effort, if any, rarely comes from the internal and urgent needs of SOEs to compete and survive. In addition, many respondents mentioned individual merits as important criterion for promotion. Job security is particularly highly considered in a saturated labour market like the one Vietnam has now where most people working in SOEs are usually not qualified for more demanding jobs elsewhere. The success of those SOEs has contributed to the prosperity of the state as well as the welfare of the individuals working for them. SOE managers were not well equipped and not suitable, or in many cases, not motivated to perform their tasks. The other five enterprises are in the process of approval of valuation, and are expected to be equitized in the near future.
This may be a reason for the fact that only 66% of the respondents have a budget for training. To reverse the trend, the compensation scheme of SOEs should be radically revised to provide employees with a decent living condition. Upon the completion of the course, the employees will have to present the course certificate with satisfactory results so that they can be refunded by the enterprise. In general, while it is agreed that there is nothing wrong with individuals upgrading themselves to optimize their potentials, this should not be done at the expense of SOEs.
The current accounting and audit system also makes it difficult to appreciate the real financial situation of the SOEs (Nguyen Tien Hung, 1993: 25-27).
Technical capabilities evidenced by the diploma(s) that one has acquired also play an important role in the promotion decision. No formal procedure for replacement or career path is made by either the managers or the human resource department.
On-the-job training may also involve learning through the assistance and supervision of an experienced employee who will help the trainee to learn some useful knowledge and skills. As a solution, the respondents proposed that enterprise refunds should only cover up to a half or one-third of the tuition fees, in order to get more involvement from the employees in the study. Coaching, mentoring process are outlined along specific skills,these two processes, training process.

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