Examining Some Challenges and Policy Recommendations Related to Human Resource Management within the Public Sector in Vietnam ()
1. Introduction
The effective management of human resources within the public sector is essential for fostering sustainable socio-economic development and ensuring the overall growth and stability of a nation. In the context of Vietnam, where rapid economic growth and ongoing reforms have brought about significant changes, the role of human resource management (HRM) within the public sector is particularly critical. This article aims to examine the challenges faced by Vietnam’s public sector in terms of HRM practices and to propose policy recommendations to address these challenges.
With the emergence of a dynamic and competitive labor market, attracting and retaining young talent, especially recent graduates, has become increasingly challenging for the public sector in Vietnam. Additionally, the prevailing practices of performance appraisal often tend to be superficial, lacking in effectiveness and transparency. Despite efforts to reform salary structures, there is a persistent concern that improvements in work performance may not be commensurate with the level of investment.
Drawing insights from the principles of New Public Management advocated by organizations such as the Organization for Economic Cooperation and Development (OECD), this article aims to offer evidence-based policy recommendations tailored to the Vietnamese context. By addressing these challenges and implementing strategic HRM initiatives, Vietnam can strive towards overcoming barriers to growth, enhancing public sector efficiency, and ultimately, achieving sustainable development.
2. Literature Review
Waxin and Bateman (2009) analyzed three typical models in public sector human resource management based on two main pillars: delegation and customization. Delegation refers to the extent of decision-making authority devolved from central HRM agencies to line ministries and lower administrative levels. Customization pertains to the degree to which principles and regulations are tailored to specific departments and individuals in particular situations.
In alignment with the 2004 OECD report, Waxin and Bateman (2009) presented three public sector HRM models along the axes of delegation and customization. The application of these models in practical public sector HRM is debated. The New Public Management (NPM) movement supports the position- based model. Conversely, Thompson (2006) argues that creating separate personnel systems for specific agencies threatens the institution of a unified civil service, which depends on its collective nature.
Kim and Hong (2006) contend that public sector HRM reform must consider local factors such as political institutions and other economic and social institutions. They caution that governments should initiate HRM reforms based on current needs, developing and adjusting them gradually to meet contemporary demands, rather than adopting standardized models from international practices.
Despite a trend toward convergence, public sector HRM also diverges due to different countries having distinct cultures and developmental histories, leading to different values and behaviors (David, 2000; Lavelle, 2006).
Public sector HRM also aligns with fundamental HRM science tasks such as workforce planning, competency assessment, recruitment and selection, skill development and training, career development, performance appraisal, and establishing working conditions and compensation (Brown, 2004). While HRM has flourished in the private sector, it is less appreciated in the public sector. Nonetheless, Brown acknowledges the value of public sector HRM, considering public organizations as model employers that create good working conditions, treat employees well, and focus on career development (Brown, 2004).
Amid significant changes and reforms driven by the NPM movement, the distinction between private and public sector HRM is diminishing. The idea of entrepreneurial government promotes NPM to approach private sector management, focusing more on outcomes than inputs, prioritizing goals over rules, and emphasizing market mechanisms over administrative mechanisms (Viray, 2018).
Along with this trend is the separation of administration and politics in NPM. Schedler and Eicher (2013) argue that administration and politics follow different action logics and success criteria: the success criterion for politics is the majority of votes, while for administration it is task completion. This separation ensures the delivery of quality services, fair decision-making, and the ability to respond quickly to practical issues.
Some governments apply autonomous mechanisms in certain types of public organizations (hospitals, educational institutions), compelling public employers to change and move towards private sector HRM practices such as performance measurement and evaluation as the basis for salaries and benefits. These autonomy mechanisms have helped public organizations attract high-quality human resources, focus on performance, and create a more flexible workforce by utilizing temporary and outsourced labor.
Employer branding is crucial for attracting high-quality human resources. Employer branding is the image of an organization as a great place to work in the perceptions of current employees, potential candidates, and other stakeholders (Minchington, 2011). Schlager et al. (2011) highlight the relationship between perceived employer brand and service branding, noting that the influence of particular drivers for employee attitudes is significant. Employer branding encompasses elements such as salary, benefits, working environment, etc., that attract talent (Berthon, Ewing, & Hah, 2005).
Attracting high-quality human resources enhances the effectiveness and efficiency of the public sector. Building and developing an employer brand, with key factors being linking salary and benefits to performance evaluations, will enhance fairness, transparency, and create a better working environment and organizational culture. This will increase the attractiveness of high-quality human resources to the public sector, which remains an open issue, especially in Vietnam.
3. Materials and Methods
Our primary objective is to assess the perception of young individuals regarding the attractiveness of jobs within the public sector in Vietnam. To achieve this goal, we conducted a survey among young individuals to evaluate the appeal of public sector employment. Additionally, follow-up interviews were conducted with specialists currently employed in the public sector to verify and validate the findings obtained from the survey. These interviews aimed to gain further insights and perspectives from experienced professionals in the field, enhancing the credibility and robustness of the survey findings.
The interviews with specialists focused solely on confirming the results of the survey and did not delve into the specific relationship between performance appraisal and salary policies. This approach ensured that the information gathered complemented the survey data, contributing to a comprehensive understanding of the perceptions surrounding public sector employment among different stakeholders.
Following the survey and interviews, our focus shifted to examining a specific aspect of human resource management: the correlation between performance appraisal and salary within HRM practices in the public sector. Analyzing this relationship is essential for providing insights into the findings of our survey on the appeal of public sector employment to young individuals.
Survey Method:
Drawing from the Employee Value Proposition (EVP) framework, our survey aimed to gauge young individuals’ preferences regarding employment in the public versus private sector, and the underlying factors influencing their choice. The EVP, encompassing elements such as income, benefits, working environment, and more, is widely acknowledged as pivotal in attracting candidates (Berthon., Ewing, & Hah, 2005; Gregorka, Silva, & Silva, 2020).
The survey commenced with a fundamental query: “If presented with equivalent opportunities, would you opt to work in...?” Participants were provided with two options: 1) Public sector, 2) Private sector. Subsequently, the survey delved into a comparative analysis of five key elements: Income, Benefits, Working environment, Organizational culture, and Career opportunities. Participants were asked to assess each element with three response options: (+) More attractive, (−) Less attractive, or (0) As attractive as.
Furthermore, the survey includes additional questions about the participants’ relatives and their employment sectors, whether public or private. The responses to these questions could assist in examining whether the choices made in response to the aforementioned questions are driven by emotional or rational factors.
Participants were recruited from Vietnam National University, a leading educational institution renowned for producing high-quality human resources in Vietnam. The sample comprised 257 respondents (110 face-to-face survey forms and 147 online survey forms on Google Forms); including first to fourth-year undergraduates and postgraduates from all 13 training institutions under Vietnam National University’s umbrella: VNU University of Science, VNU University of Social Sciences and Humanities, VNU University of Languages and International Studies, VNU University of Engineering and Technology, University of Economics and Business, University of Education, Vietnam - Japan University, University of Medicine and Pharmacy, University of Law, School of Business and Management, International School, School of Interdisciplinary Studies, and International Francophone Institute.
Interview Method:
Recently, there has been a noticeable trend of civil servants transitioning to the private sector (Vietnam Television, 2022a), a phenomenon that aligns with the findings of our survey. In light of this, we conducted interviews with specialists to delve deeper into the factors driving this movement. Specifically, we sought to understand why the exodus from the public sector is becoming increasingly pronounced.
The interviews focused on gathering insights related to some of five key elements: Income, Benefits, Working environment, Organizational culture, and Career opportunities. These elements were chosen based on their relevance to individuals’ decisions to leave the public sector.
Conducted in a face-to-face format, each interview involved three participants: one interviewer, one note-taker, and one observer. This structured approach ensured that questions were posed effectively, responses were accurately documented, and non-verbal cues were observed for additional context.
The specialists selected for the interviews are currently employed in the public sector and possess a diverse range of connections across different age groups. This diversity in their networks allows for a comprehensive exploration of the factors influencing individuals’ decisions to transition between sectors, drawing from a wealth of personal and professional experiences.
Documentary Research and Author’s Practical Experience:
The documentary research findings from the analysis of Decree No. 90/2020/ ND-CP (Government of Vietnam, 2020) and its subsequent amendment, Decree No. 48/2023/NĐ-CP (Government of Vietnam, 2023b), provided a comprehensive understanding of the official regulations and policies governing performance appraisal in the public sector of Vietnam. These findings served as the foundation for identifying the unattractiveness of the public sector and the wave of shifting from the public sector to the private sector in Vietnam
In parallel, the practical experiences of the researchers, particularly their involvement in performance appraisal processes within two distinct public sector organizations, added depth and context to the analysis. Through their firsthand experiences, the researchers gained insights into the implementation of performance appraisal systems, the challenges encountered, and the outcomes observed in practice.
The integration of documentary research findings and practical experiences involved triangulating the information obtained from both sources. This triangulation process allowed for a comprehensive analysis that considered not only the regulatory framework provided by the decrees but also the real-world implications and nuances observed in practice. By synthesizing these diverse perspectives, the analysis aimed to provide a holistic understanding of performance appraisal in the public HRM context of Vietnam, identifying areas of alignment and potential discrepancies between policy and practice.
For our analysis, we selected Decree No. 90/2020/ND-CP on the Evaluation and Classification of the Quality of Cadres, Civil Servants, and Public Employees, signed on August 13, 2020, by former Prime Minister Nguyễn Xuân Phúc. This decree, along with its subsequent amendment and supplementation by Decree No. 48/2023/NĐ-CP, signed on July 17, 2023, by Prime Minister Phạm Minh Chính, forms the legal foundation governing performance appraisal in the public sector of Vietnam.
In addition to documentary research, we incorporated the authors’ practical experiences with performance appraisal in two distinct types of public sector organizations in Vietnam: Vietnam National University, Hanoi, an institution operating with funding from the Vietnam State Budget, and Hanoi University of Science and Technology, an organization with financial autonomy. These two case studies provide invaluable insights into the effectiveness of different salary policies within the public sector.
One of the researchers possesses extensive experience in performance appraisal, spanning 28 years at Hanoi University of Science and Technology, where she witnessed the transition from state-financed to financially autonomous operations. Her insights are invaluable for informing policy recommendations in public HRM in Vietnam. The other researchers, with 10 and 37 years of experience, respectively, in teaching and researching HRM at Vietnam National University, contribute additional expertise to the study.
The integration of documentary research findings and practical experiences involved triangulating the information obtained from both sources. Documentary research provided a comprehensive understanding of the regulatory framework governing performance appraisal, while practical experiences added depth and context to the analysis. By synthesizing these diverse perspectives, the analysis aimed to provide a holistic understanding of performance appraisal in the public HRM context of Vietnam, identifying areas of alignment and potential discrepancies between policy and practice.
4. Results
Our survey yielded the following results: the majority of participants expressed a preference for working in the private sector, citing its perceived advantages over the public sector across various factors.
Out of 257 respondents asked, “If given equal opportunities, would you opt to work in...?”, 203 participants chose Option 2: Private sector, while only 54 participants chose Option 1: Public sector (see Figure 1).
Figure 1. Young people’s preference for employment in the private sector.
The primary reason for choosing the private sector is the perceived superiority of five key employer brand elements over those of the public sector (see Figure 2).
Figure 2. Attractiveness of the private sector.
Factors such as income, working environment, organizational culture, and career opportunities were considered more appealing in the private sector compared to the public sector. This accounts for the majority of participants opting for private sector employment.
These findings are corroborated by insights from our interviews. Nearly all specialists emphasized that income, working environment, and organizational culture in the private sector are more appealing than those in the public sector (see Box 1).
Box 1. Private sector outweighs public sector in attractiveness.
In practice, public HRM in Vietnam remains antiquated, with certain aspects, notably performance appraisal, being perfunctory.
The five criteria encompass both attitudinal factors (politics, ideology, ethics, lifestyle, working style, and sense of discipline) and duties/responsibilities (See Decree No. 90/2020/ND-CP, Article 3 (Government of Vietnam, 2020). Cadres, civil servants, and public employees are ranked into four levels: Outstanding, Above Expectation, Satisfactory, and Failed. However, this ranking does not correlate with their salary.
Revenue-generating public service units categorize their labor into four ranks (A, B, C, D) monthly, impacting only their additional incomes—a minor supplement to their salary from the State Budget. Consequently, performance appraisal in these units (the case of Vietnam National University) is perfunctory.
Conversely, for financially autonomous public service units like Hanoi University of Science and Technology, performance appraisal is qualitative and directly affects employee income. Moreover, their incomes are substantially higher than those in revenue-generating public service units with the same position and rank.
5. Discussion
While the sample size of our study was relatively small and limited to students from Vietnam National University, Hanoi, the consistency of our findings with expert assessments lends credibility to our results. The concept of the Employer Brand, defined as the package of functional, economic, and psychological benefits that shape an organization’s image to attract and retain talent, has been extensively discussed in prior literature (Ambler & Barrow, 1996; Schlager et al., 2011; Minchington, 2011). The attractiveness of an employer brand is crucial in influencing the intentions of young individuals, particularly those with specialized skills (Thao & Luan, 2022). Our study reinforces this notion, as the preferences of undergraduates from Vietnam National University align with broader trends indicating the challenges faced by the public sector in attracting young talent.
The five elements examined in our study—income, benefits, working environment, organizational culture, and career opportunities—collectively contribute to the perceived attractiveness of an employer brand. Our findings suggest that these elements are more appealing in the private sector compared to the public sector, corroborating existing literature on the subject. This discrepancy in perceived attractiveness sheds light on the underlying reasons behind the public sector’s struggle to attract young talent in Vietnam. By recognizing the importance of these elements in shaping employment preferences, policymakers and organizational leaders can develop targeted strategies to enhance the appeal of public sector employment and address the challenges identified in our study.
Public sector management has long been recognized as a cornerstone of social governance, offering stable and esteemed career prospects that historically attracted top talent. However, shifting societal norms and evolving economic landscapes have transformed the perception of career trajectories, while inflexible salary structures and incentive policies have posed challenges for the public sector in retaining its competitive edge in talent acquisition. Lavigna and Hays (2004) highlight this dilemma, suggesting that public sector management is showing signs of stagnation and aging.
Rooted in Margaret Thatcher’s concept of the “policy entrepreneur,” popularized by John W. Kingdon in 1984, the New Public Management movement emerged in the United Kingdom before spreading rapidly across OECD nations. This movement sought to enhance the efficiency and effectiveness of public sector operations, including public HRM, in response to evolving demands and expectations.
Despite efforts to implement Decree No. 140/2017/NĐ-CP, signed on December 5, 2017 (Government of Vietnam, 2017), regarding policies to attract and develop staff from excellent graduates and young scientists, the public sector in Vietnam has struggled to attract and retain top talent. This is evidenced by the findings from Vietnam National University, Hanoi, as well as numerous articles and investigative reports highlighting a wave of departures from the public sector to the private sector.
For instance, Vietnam Television (VTV) reported on the exodus of thousands of cadres, civil servants, and public employees moving to the private sector, raising concerns about retaining talent in the public sector. In an interview with Hoàng Minh Hiếu, a member of the Vietnam Congress’s Legal Department, he stated, “We have identified many cadres, civil servants, and public employees leaving their jobs in the public sector, from the grassroots level to the highest level. Even some chiefs and deputy chiefs of departments at the ministerial level have moved to the private sector. This is a significant problem for the public sector if no timely resolutions are implemented” (Vietnam Television, 2022b). VTV also reported that nearly 6200 employees, mainly in the education and medical fields, have resigned (Vietnam Television, 2022a).
In response to this situation, on July 31, 2023, the Prime Minister issued Decision No. 899/QD-TTg (Government of Vietnam, 2023a), approving the National Strategy to Attract and Utilize Talents until 2030, with a vision to 2050. The strategy’s common goal is to plan and implement robust policies and resolutions to recruit and utilize talent until 2030, with a vision to 2050, to strengthen the industrialization and modernization of Vietnam.
Following the New Public Management movement, Vietnam initiated its public sector management reform, termed “Administrative Reform”. The Vietnamese government promulgated The Master Program for State Administrative Reform for the period 2021-2030 under Resolution No. 76/NQ-CP (Government of Vietnam, 2021), signed on July 15, 2021.
Talent recruitment in the public sector has become a hot issue for scholars and managers, yet it remains ineffective. In the five years since implementing Decree No. 140/2017/NĐ-CP, the public sector in Vietnam has only recruited 258 out of 1000 excellent graduates (Phong, 2024).
The most important question is why Vietnam, despite having numerous policies to recruit skilled people, especially excellent graduates, finds these policies ineffective.
In fact, these five elements are interrelated, and the working environment appears to be the most important one, reflecting the others and characterizing the organization’s culture. Therefore, beyond issues of high or low income, benefits, and career opportunities, fairness is crucial. This is why performance appraisal in the Vietnamese public sector is the focus of this research. Formal and unfair performance appraisals in the Vietnamese public sector are key factors that make the remaining four elements less attractive compared to those in the private sector.
Therefore, the Vietnamese government has amended regulations on performance appraisal and labor grading of public employees, as outlined in Decree No. 48/2023/ND-CP (Government of Vietnam, 2023b), dated July 17, 2023. These changes aim to improve the performance appraisal process and the classification of civil servants to meet the requirements of the current administrative reform (Le Cam Ha, 2021).
6. Conclusion
Our study, focusing on the perceptions of undergraduates from Vietnam National University, Hanoi, highlights several critical challenges and areas for improvement in human resource management within the Vietnamese public sector.
The five elements—income, benefits, working environment, organizational culture, and career opportunities—are interrelated and collectively shape the perceived attractiveness of an employer brand. Among these, the working environment is particularly influential, as it reflects and influences the other elements.
These elements are perceived as more attractive in the private sector compared to the public sector. This aligns with existing literature and underscores a significant challenge for the public sector in attracting and retaining young talent.
Fairness, particularly in performance appraisal, is crucial in shaping employee perceptions. Formal and unfair performance appraisals, combined with insufficient integration of performance appraisals into civil servants’ income, contribute to the public sector’s reduced attractiveness relative to the private sector.
Despite numerous policies aimed at recruiting skilled individuals, including excellent graduates, the public sector in Vietnam has struggled to effectively attract and retain talent. This indicates a need for more effective implementation and possibly a reevaluation of these policies.
The ongoing administrative reforms and initiatives, such as the New Public Management movement and various governmental decrees and decisions, highlight the government’s recognition of these issues. However, the effectiveness of these reforms remains limited.
To address the identified challenges and improve the attractiveness of public sector employment, the following policy recommendations are proposed:
Enhancing Fairness in Performance Appraisals:
Revising performance appraisal systems to ensure fairness and transparency.
Incorporating multi-source feedback mechanisms and regular reviews to ensure appraisals reflect actual performance and integrate performance evaluations into civil servants’ income.
Improving Working Environment:
Investing in creating a positive and supportive working environment that fosters collaboration, innovation, and professional growth.
Ensuring the organizational culture to promote fairness, inclusivity, and recognition of employee contributions.
Competitive Compensation and Benefits:
Reviewing and adjusting salary structures and benefits packages to make them more competitive with the private sector.
Introducing performance-based incentives and bonuses to reward high- performing employees.
Career Development Opportunities:
Targeted Recruitment Strategies:
Conducting market studies to understand the preferences and expectations of potential recruits, particularly young graduates and specialized talent.
Developing targeted recruitment campaigns that highlight the unique benefits and career opportunities in the public sector.
Ongoing Monitoring and Evaluation:
Establishing mechanisms for the regular monitoring and evaluation of recruitment and retention policies.
Using feedback from employees and performance data to continuously improve policies and practices.
Promoting Public Sector Reforms:
Continuing to support and promote public sector administrative reforms to enhance efficiency and responsiveness to changing societal and economic needs.
Ensuring that reforms are effectively communicated and implemented across all levels of government.
The research is based on data from a single higher education institution with a small sample size. To draw more detailed and comprehensive conclusions, it is necessary to expand the sample size and include data from multiple institutions. By addressing these areas, the public sectors in Vietnam can enhance its attractiveness as an employer, better compete with the private sector for top talent, and effectively meet the evolving demands of the modern workforce.