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Vietnam Human Resource Enterprises and Training


1.1 The importance of the study

1.2 Aim and objectives of the project

1.4 Dissertation structure

Chapter 2 Literature review

2.1 Defining the terms: Human Resource and Human Resource Development, Training, Development

2.1.1 Human resource

2.1.2 Human resource development

2.1.3 Training

2.1.4 Development

2.2 Purpose of training and development

2.3 Training and development progress in an enterprise

2.3.1 Methods of Training and development

2.3.2 Process of training and development

2.4 Factors affect training and development

2.4.1 Internal factors

2.4.2 External factors

Chapter 1 Introduction

The background of the study

Vietnam is one of the countries which have the fastest and the most impressive growing economies in recent years. It is a transitional economy and is developing more and more with an open door government policy. In 1986, “Doi Moi” economic reform was initiated and made a breakthrough for the economy of Vietnam. It transferred Vietnam from socialist-oriented market economy to the free-market economy. On 11 January 2007, Viet Nam became the official 150th member of World Trade Organisation (WTO). The day was considered as ‘a historic day for the country”. Joining the WTO, Vietnam seems to accept increased competition, and competition will make the economy more dynamic. Moreover, it creates a dynamic and challenging environment for local organizations to upgrade their operations both technologically and managerially, in order to unlock the immense potential of the country’s natural and human resources. (Mcneil et al, 1999). However, using the national human resource in effectiveness way seems to be not simple. It could be a challenge for any countries.

In fact, Vietnam has the population which is more than eighty million (Vietnam general statistic office, 2010). It supplies a large labor force which seems to be a competitive advantage for a developing country like Vietnam, especially in attracting FDI (T. Le, 2007). However, this advantage is passing off in current situation. When using and development of technology, machinery in enterprises becomes popular, the competitiveness depends on human resource quality. Sadly, Vietnam is losing its competitive capability. In the Global Competitiveness Report 2009-2010, Vietnam is down five positions from 70th to 75th, in which the quality of education system is one of the worst elements. In reality, the poor quality in education and training prevent the country from developing. Vietnam labor force has weaknesses and limitations. Every year, a high percentage of students graduated from universities have difficulties in finding a job because of lacking knowledge and skills. According to a report by the HCMC Department of Labor, War Invalids, and Social Affairs, only around one third of the enterprises in the countries are satisfied with the qualifications of their new recruits (Saigon Times Weekly, 2002c). It seems that the higher education in Vietnam which is in old equipment and passive method could not satisfy the real market demand of high quality and skilled human resource in the period of development (Kamoche, 2001). Besides, proportion of employees who are trained in working is just 20% (Vietnam Ministry of Labour, Invalid and Social Affair, 2006). Duc Vuong (2008) argued that the staff training is required more caring in developing countries. As low labor cost is considered as an absolute advantage of labor-intensive economy but not high- tech or capital-intensive ones (Vietnam Ministry of Labour, Invalid and Social Affair, 2006). Hence, economies and business need to improve the training and development of employees.

Similar to Malaysia, vision of becoming a developed nation by 2020 put an emphasis on HRD (). The purpose of becoming a developed country in the future absolutely raises the requirement of training and development human resource in Vietnam. In other words, there are more and more concerns about HRD activities in the country. In national level, Vietnam government considers highly qualified human resource as the important forces to encouraging the industrialization process and as the basic ground for the growth of economy (MPI, 2001). Vietnam government applied polices to encourage the HRD in the country especially in education. The government keeps push forward comprehensive reform enhancing the quality of training and education at all levels. Besides, it focuses on developing high quality human resource to meet the economic development demand (Khang, 2010). The government has also supported a program to improve HR skills in organizations through special training courses (from 2004-2008). It helps companies and individuals in increasing their competitiveness. T. Tran and L. Le (1996) gave several experiences of the differences countries in HRD. They concentrated on the benefits of government policies of these countries in encouraging HRD and the lessons that Vietnam learnt from. However, it takes time to see what the real benefits from policies are and changes in HRD are. Moreover, applying policies depends on many elements which specific in each country. In Annual business report of VCCI (Vietnam Chamber of Commerce and Industry) in 2007 provided an analysis of key developments include human resource development in Vietnam business environment and their impacts on Vietnam enterprises. It had showed the general impacts of human resources and labor supply in some specific sectors such as tourism, banking, construction. Since then, the specific solutions in HRD for each sector could be suggested. There is another aspect in HRD discussed in Vietnam at the moment. HRD should be accompanied with national economic strategies. In fact, in Vietnam, in planning national economic strategies, the experts focus on economic issues without concerning human resource role which is the vital and essential elements to implement these strategies (D. Phung and D. Do, 2009). The problem appeared here is when these strategies are set up and the quality of human resource could not afford for them.

In comparison with some neighbor countries in ASEAN, although HRD activities in Vietnam are concerned more, it is still new and weak. For instance, in the last decade, training consultants in Singapore have mushroomed. The emphasis on training is so much so that some companies have even created a standalone department on training along with the HRM department (). Hence, Singapore ranks very high in the world in its emphasis on training and development. Other example is in Malaysia, the HRD Act since 1992 forced the organizations which have more than 50 employees to support 1 percent of their monthly salaries to a fund to promote training ().

Importance of the study

Training and development human resource is not only the government’s responsibility but the organization’s responsibility as well. In recent years, the training and development human resource has been paid more attentions in Vietnam organizations (Kamoche, 2001). There is a strong willingness to learn and to be trained in organization. However, the level of attentions and willingness could be decreased by the reluctance of employees to accept the new things and innovation. Also, there is a distinctive point of views in training and developing human resource within organization. While in foreign invested companies tend to considers training as a vital tool (Saigon Times, 2002), the SOEs sees it as an expense and tend to keep budget as small as possible (Quang and Dung, 1998). The training objectives between

The importance of the study

SMEs in Vietnam are a dynamic force of the Vietnam economy and have been contributing a lot of successes in the development of economy. In the research of Timothy Bartram et al (2009), he argued that Vietnam is currently providing and creating many opportunities for the growth and development of entrepreneurial businesses, which provides significant opportunities as well as challenges for managers of these enterprises. In human resources aspect, SMEs created around 60% of the total job for labor force (Sakai and Takada, 2000) and until now this number has increased significantly. Besides, private sector plays a big role in increasing GDP annual. Understanding the important role of SMEs clearly, Vietnam government has been developing policies and creating conditions generally for the growth of SMEs, and particularly for the human resource development in SMEs.

The private sector grows and competes openly for experienced and skilled staff, HR assume new importance. However, SMEs face particular problems in HR. Certainly, small firms do not have the HRM expertise, infrastructure and general resources commanded by larger organisations (Hill and Stewart, 2000). The requirement of development of human resource is truly necessary because the business environment change day by day and employees need improve their skills and knowledge to maintain their productivity. Enterprises which want to maintain their competitiveness and effectiveness need to consider human resource development as one of the most important parts. Following Adeniyi (1995), he observed that staff training and development is a work activity that can make a very important and remarkable contribution to the overall effectiveness and profitability of an organization. Huang (2001) proved that training program has a close relation to the performance in the enterprises and training programs produce real benefits for small and medium-size enterprises (SMEs)

In Vietnam, human resource especially human resource development is still a quite new area. At the moment, there are a few researches around Human Resource Development. Most of them show the essential requirement, challenges and opportunities of HRD in current situation of rapid economic development, the HRM of the nation in macro level. Some others illustrate more deeply in the situation of the HR and Human resource management in enterprises.

In reality, a big question that what HRD is and how HRD plays its role in the enterprises still has not an answer. So, the research in this paper focuses on one main area of HRD which is training and developing human resource in the context of SMEs in Vietnam. It would give some contributions to the Vietnamese enterprises in referring the basic knowledge in training and developing human resource, analyzing the factors which could affect on their training and developing human resource actions in the context of Vietnam. Furthermore, the examples of experiences in HRD from some others countries and organizations will be shown as the lessons help enterprises in finding solution for their situation. Then, the view of HRD in enterprises would be cared wider and deeper.

Aim and objective of the project

The project focuses on the analyzing the actions of training and developing human resource in enterprises in Vietnam. The company selected in research is Deloitte Vietnam Company. It is the company of which the HRD activities will be analyzed specifically

There are three principal objectives:

Generalizing and developing of the principles in literature of human resources development and human resources in enterprises

Using this literature to analyze and evaluate the activities in HRD in enterprises according to illustrate the advantage factors and disadvantages factors which affect in HRD in the company

Suggesting solution and points of views to improve the HRD in the company selected.


Dissertation structure

Chapter 2 Literature review

Defining the terms: Human Resource and Human Resource Development, Training, Development


It is ‘the growth or realization of a person’s ability, through conscious or unconscious learning’. Development programmes usually include elements of planned study and experience, and are frequently supported by a coaching or counseling facility’ (MSC, 1981:15)

‘Development occurs when a gain in experience is effective combined with the conceptual understanding that can illuminate it, giving increased confidence both to act and to perceive how such action relates to it context’. (Bolton, 1995:15)

From these definitions, the development could show the movement to an improved situation that for the individual means advancing towards the physical and mental potential.

There is one common theme that Nadler (1990) provided when he gathered the term of ‘training’ and ‘development’ is that both of ‘training’ and ‘development’ contain the word ‘learning’. He stated that ‘training = learning related to present jobs’ and ‘development = learning for growth of the individual but not related to a specific present or future job’

Human resource development

About Human Resource Development, it ‘refers to career development, training and development, and organizational development programs offered to employees to develop new or replacement knowledge and skills; improve their performances, potentials, and promotability; enhance to their general growth, and improve group and organizational effectiveness’ (William R. Tracey, )

There are many strands to HRD such as personal development, development for a job, a situation, or for setting a new works. It could be a development leading to a better life for individuals, organizations or even wider communities as well. (J. Matthews et al ). In Coopey et al 1993:24, it is seen as ‘a capacity to incorporate learning into behavour’

Furthermore, HRD is an extension of Training and Development, with a specific orientation towards organizational learning interventions which are created to improve skills, knowledge and understanding.

Follow Leonard Nadler, HRD is defined as ‘a series of organized activities conducted within a specified time and designed to produce behavioral change’ of individuals in organizations. (Nadler, 1970). It includes 3 types of vocational learning activity which help individuals to be more effective at work:

• Training focusing in immediate changes in jobs performance

• Education, geared towards intermediate changes in individual capabilities

• Development concerned with long-term improvement in the individual workers ( Nadler, 1970)

In ‘Principle of HRD’, Jerry W. Gilley et al showed three fundamental component areas of human resource development. They are individual development (personal), career development (professional), and organizational development. Each component has their own importance roles which vary from organization to organization accordant with the operation complexity, the criticality of human resources to efficiency in organization, and the organization’s commitment to improved human resources. However, all of three component areas have one focus which is individual performance improvement. The individual performance improvement is the heart of an HRD program, and HRD can be described as the “area of congruence” among the three components (Gilley, and Eggland 14) (see figure 2.1)

(Figure 2.1)

It is also importance to distinguish the field of human resources in organization which covers a broad spectrum of human activity. In fact, there is still a misunderstanding in HR sectors in enterprises, especially in developing countries such as Vietnam where the HR sector is still new. Based the human resource wheel (McLagan and Suhadonik, 1989) and the wheel of HRM (Harison, 1997), the human resource compass which indicates an overview of the territory and gives direction to to the various elements in the subject and their interrelationship was built. It is divided in 3 main sectors HRD, HRD and HRM, and HRM. (J. Wilson, 2005)

(Figure 2.2)

Human resource

‘Human resources’ are described as the individuals who comprise the workforce of an organization. They are ‘the people that staff and operate an organization- the executives, managers, supervisors, scientists and engineers, technicians and marketing and sales personnel, administrative and clerical personnel, and hourly workers- as contrasted with the financial and material resources of an organization’ (William R. Tracey, )

It is also the name of the function in an organization which has a responsibility for implementing strategies and policies relating to the management of individuals. In other words, it could be understood as ‘the organizational function that deals with the people who manage, produce, market and sell the products and services of an organization’ (William R. Tracey, )

In a nation, the economic value of human resources resides not in numbers or physical characteristics such as height, but in the skills, knowledge and attitudes that are the result of norms and education provision.


Training, according to the Manpower Services Commission’s Glossary of training terms, is ‘a planned process to modify attitudes, knowledge or skill behavior through learning experiences to achieve effective performance in an activity or range of activities. Its purpose, in the work situation, is to develop the abilities of individual and to satisfy the current and future needs of the organization. (MSC, 1981:62).

In CEDEFOP (1996:52), training is defined as ‘activity or program of activities designed to teach the skills and knowledge required for particular kinds of work’. Training takes places, whereas education takes place at educational establishment.

In reality, both of definitions illustrate about the application of training to the improve skills and competences to meet the requirement of the organization. In training, the limitation is also indicated to the specific skills and operations. In comparison with education, training normally has an immediate application and is completed in a shorter time than education. (Van Wart et al, 1993)

Purposes of Training and Development

Training and development (T&D) was beginning to receive more attention in Vietnamese organizations (Kamoche, 2001). Training and development actually refers to a planned effort which the organization build to facilitate the learning of job-related behavior (such as knowledge and skill acquired by an employee through practice) on the part of its employees. (Wexley et al,1991).

The general purpose of traning and developing involves knowledge and skill acquisition. The employee quality and their development through training are consider as the major factor in determining long-term profitability of enterprises. A good investment in the development of skill for employees will help them increase their productivity in working.

In fact, there is a view that training often is considered for the new employees. It is totally incorrect because ongoing training for current employees helps them adjust to rapidly changing job requirements. (Small Business Management)

Training and development creates a benefit that the communication abilities of employees can improve, which enhances their adaptability. Better-educated workers can give the flexibility needed to switch production and better accommodate innovation, retraining and relocation (Godfrey, 1997).

Traning and Development progress in an enterprise

Training and Development has traditionally been a functional division of the personnel or human resource department related to carrying out the identification of training and development needs, planning and designing training and evaluating it. (see figure 2.3)

(Figure 2.3) the classic training cycle

Winter (1995) did not using the term ‘HRD’, he talked about a system approach to developing employees with the starting point ‘the business objectives’. So the classic training cycle can be seen to be based on organizational strategy within a company.

(Figure 2.4) Business objectives within a training cycle

Methods of Training and development

In training, there are a numerous techniques available for presenting information and transmitting skills. Each of the techniques has their own advantages and disadvantages. The application of training method depends on the specific situation. In general, training has been widely used by companies in Vietnam. But, they differed in the use of training options (Quang, 2006).

On-site training methods

The main advantages of on-site training are the problems of transfer of learning and training cost are minimized. The reason is the trainees learn the skills and knowledge in the same physical and social environment. Moreover, with certain of these techniques, the trainees are able to contribute their work while they are learning. This things reduce the training cost. (Wexley et al,1991).

On the other hands, on-site training has some limitations. Most of the co-workers and supervisors do have motivation to provide the trainees with worthwhile learning experiences.

(figure 2.5) on-site methods classified according to goals and strategies

The table shows that a training effort can have one or more of the following goals. These goal boards can be achieved by directing training efforts at the trainees’ cognition, behavior or environment. From the table, on-site methods were classified in categories.

Orientation training and the socialization of new employees

It is important to help new employees to get in a right way in order to reduce their anxiety and to increase their job satisfaction and commitment. (Louis et al, 1983). The procedure of this method should begin carefully and in detail. The poor orientation programs could make damage to organization because they reduce the effectiveness for the first few time on the job and may lead to dissatisfaction and turnover. (Gomersall et al, 1966)

Smith (1984) showed ten tasks accomplished in the program such as introduction the company; review of policy, benefits, services, employer expectations; benefit plan enrolment; completion of employment documents; setting employer expectations; introduction to fellow workers, to the facilities, and the job.

On-the-job training

In this training method, the trainees are expected to learn the job by observing the experiences employees and by working with the actual materials, personnel and machinery that will comprise the job when the formal training is completed. On the experienced employees’ aspect, they is expected to provide not only a favorable role model to whom the trainee can identify but the instruction and the guidance from the job duties as well. (Wexley et al,1991).

Apprenticeship training

Apprenticeship programs are initiated by a committee composed of representatives for management and labor. The joint of committee works together with the department of Labor’s Bureau of Apprenticeship and Training (BAT) in developing a set of standards that specify the features of particular program such as number of class hours, workshop instruction, curriculum…

Job aids

“A job aid is a repository for information, processes, or perspectives that is external to the individual and that supports work and activity by directing, guiding, and enlightening performance”. (Rossett et al, 1991). The goal of Job aids is to teach job skills and to accomplish this by using a behavioral strategy.

Coaching/ Mentoring:

Mentoring and coaching have been provocative practices in both the practical and academic organizational development and human resource development literature for almost ten years. (Bokeno, 2003)

Coaching the employees through the use of periodic reviews of performance is a difference way of on-site training. Coaching serves a several important function in organization. Firstly, it lets subordinates know what their supervisors think about their work. Then, the supervisors and employees work together on the way that helps improve employees’ performance. Thirdly, it improves the interaction between supervisors and employees. Finally, it provides a framework for setting up short term and long term personal career goals.

Related to the teaching of coaching is mentoring. Mentors are the people who have two or three higher level than trainees and they want to help less experience trainees to learn the ropes in a supportive relationship. (Wilson and Danes, 1988)

Computer-based training

It is a technique can be used in conjunction with coaching and mentoring. Computer-based training (CBT) refers to as interactive videos and videodisc, provides guidance and instruction by using computer terminal on an employees’ desks. It is now used as an efficient method to many types of job. (Wexley et al,1991). Guy Sweeten of Information Transfer said that ‘The practical benefits of using computers to deliver training and perform assessment training have been proven. Computer-based training is highly flexible and fits with the demands of everyday work you can work on your own, at your own desk and in your own time’

Job rotation

It relates to giving a series of jobs assignments to trainees in various parts in organization for a specific time. The key of this method is to expose individuals to the changes in working environment in other places. In each department, trainees could put on an observational role, and take responsibility for training specified results. Job rotation is considered as a perfect method for preparing high potential and specialist for future general executive responsibilities. (Farnsworth, 1975)

Off-site training methods

Off-site training methods are often used in organizational settings. An advantages of this method is that it allows the trainees to learn skills and knowledge away from pressures of day-to-day job. The other benefit is the use of competent outside resources people who are trained trainers such as technicians, consultants. The limitation of it is the transfer of learning from classroom to the job.

(figure 2.6) off-site methods classified according to goals and strategies


Lecture method has been frequently criticized as a training and development technique. (Korma, 1977). In fact, it does not bring a high benefit. Firstly, its format emphasizes one way flow communication from trainers to trainees, which make the trainees are passive in learning. Secondly, it fails in transfer job-related skills. The lecturers ignore the differences in trainees’ abilities, backgrounds and interests. In additionally, individualized and reinforcement of trainees are prevented.

Audiovisual techniques

This method can be used widely in many training and development programs. Teaching and learning with audiovisual technique has several advantages. First, it helps trainees to illustrate and see clearly the overview image of what trainers want to delivery lively. Then, it helps distance learning effectively when the trainers and trainees are in difference places.


It is a method for simultaneously training individuals at the multiple sites. A teleconferencing network consists of a central broadcasting facility, a satellite service whose signals is delivered and transmitted to television projectors in meeting rooms, ballrooms, or corporate headquarter.

Corporate classrooms

Corporate classroom aims to tech employees’ skills and to accomplish this by using cognitive strategy. This method is often in big corporations. They intend to build their own universities and colleges to continue the further education for their employees.

Equipment simulators

It is excellent way to bring realism to off-site training situation. In this method, simulators of the equipment are designed and set up away from the actual work situation. Advantages from the method are the time pressures for productivity are minimized, individualized feedback is increased and opportunities for repeated practice are provided.

Computer-assisted instruction

In this method, trainees interact directly with the computers. The training is combined with learners’ exercises manuals, equipment stimulations, job aids… The role of computer here involves administratering and the training programs to the trainees and testing their performance after learning. (Patrick et al, 1977). It could assess the progress of trainees and provide a method to fit the trainees’ needs

Each enterprise will use the differences training methods which are suitable to their situation within organization. In Vietnam situation, Webster and Tausig (1999) did a survey which showed that 93 percent of the surveyed SMEs provided in-house training for freshmen and off-the-job training. Most SMEs rely only on informal training due to budget constraints (Tran and Le, 1999). However, the process to have a good training and development program is not simple

Process of Training and Developing

Analyzing the training and development needs

It is considered as the first step in the process of training and development.

Boydell (1983) showed three levels of training needs within organizations which are organizational level, occupational level, and individual level.

Organisation analysis looks at the organization as a whole. This relates to examining organization interface with the external environment, in which it operates, the acquisition of its state objectives, its human resources, and the inner climate. The purpose of organization analysis is to determine where the training activities should be conducted.

Occupational analysis includes five steps in conducting task analysis. The five steps are (1) Obtaining a company job description; (2) Identifying the tasks for which the training is designed; (3) Identifying the knowledge (K), skills (S), and abilities (A); (4) develop course objectives; (5) design the training program.

In the individual analysis, organization identifies any shortfall in individuals’ knowledge, skill and attitudes required to perform their jobs.

(Figure 2.7) P. Nick Blanchard, James W. Thacker (1999), Effective training: systems, strategies, and practices

In fact, when the results of employees’ performance do not satisfy and meet the requirement of job analyzed in occupational analysis. That means there are problems. In that case, organization needs to find a solution. In table below, it illustrates the way to approach how to examining performance problem of the employees

(Figure 2.8) Robyn Peterson (1998), Training Needs Assessment

Analyzing the training and development in this way has advantages and disadvantages. It helps the organization have an accurate overview of training and development needs within organization. Beside, it guarantees the links between the training and requirement of trainees. However, it takes time to analyze.

During the process of analyzing, the thing could happen is the number of training needs is larger than can be met through current resources. So, it is necessary to prioritize the needs (J. Wilson, 2005)

Training and development plan

The result from the process of analyzing an organization’s training needs is a training plan. ‘This plan is constructed by the training department and is used to strategically plan what kinds of training will be conducted in the near future’. (Wexley et al,1991).

Moreover, during the process of analyzing, the thing could happen is the number of training needs are larger than can be met through current resources. So, it is necessary to prioritize the needs. The content of a training plan should includes objects and objectives of training, theme of the training courses, the time of training courses, trainers, and training methods, the place of training class, and the cost of training… (HRD in SMEs)

When planning a training program, it is essential to establish an evaluating system for the result of program.

The plan should be clear

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