INTRODUCTION
Background of the research
Every organization relies on two key assets: labor and capital While capital is crucial for success, labor is the driving force behind daily operations The effectiveness of employees' knowledge and skills significantly influences organizational success, as their performance is shaped by various internal and external factors, including leadership, promotion opportunities, and workplace environment In Vietnam's developing economy, diverse sectors—such as foreign, joint, private, and public—each contribute to national development, with a noticeable shift towards a growing number of non-state sectors Despite this shift, the performance of employees remains central to the success of all sectors Understanding the distinct determinants affecting employee performance in both state and non-state sectors is essential for enhancing organizational effectiveness, particularly in Vietnam's rapidly evolving economic landscape filled with opportunities and challenges.
In the competitive landscape of business, motivating employees is crucial for organizational success, especially in Vietnam, where labor productivity remains a significant concern Both government officials and foreign managers recognize that while Vietnamese workers possess intelligence and skills, their output lags behind that of neighboring countries This productivity issue is often linked to a lack of effective motivational strategies among managers, many of whom either overlook or are unaware of the factors that drive employee performance Since Vietnam's accession to the World Trade Organization, the pressure to enhance product quality and competitiveness has intensified, making it essential for sectors to focus on improving human resources and employee performance By boosting individual productivity, Vietnamese businesses can enhance product quality and reduce costs, thereby increasing their chances of competing successfully in the global market.
Understanding the impact of various factors on employee performance is crucial for managers in enhancing productivity within their sectors and improving Vietnam's competitiveness in the global market This study will examine the influences of earnings, working environment, and promotion opportunities on employee performance, while also comparing their effects across state and other sectors Additionally, it will explore the interrelationship among these three determinants and their collective impact on employee performance.
Research problem, research objective, and research questions
Earnings, working environment, and promotion opportunities significantly influence employee performance, with distinct effects observed in the state sector compared to other sectors within the Vietnamese economic system In the state sector, job security and benefits often take precedence, leading to a different motivation level among employees compared to the private sector, where competitive salaries and career advancement are more critical Understanding these differences is essential for enhancing productivity and employee satisfaction across various sectors in Vietnam.
This research aims to analyze the impact of earnings, working environment, and promotion opportunities on employee performance, while also comparing how these factors differently influence the public sector and other sectors within the Vietnamese economy.
How do earning, working environment, and promotion opportunities affect employees’ performance?
How do earning, working environment, and promotion opportunities affect employees’ performance differently between the state sector and other sectors in Vietnamese economic system?
Numerous studies globally have explored the determinants affecting employee performance, including factors such as workplace environment (Nowier Mohammed Al-Anzi, 2009), earnings and performance-related pay (Alison L Booth and Jeff Frank, 1999), and the influence of wage and promotion incentives on employee motivation (Kiyoshi Takahashi, 2006) Additionally, research has examined the impact of workplace quality on productivity in specific sectors, such as public organizations (Chandrasekar, 2011) and banking in Turkey (Demet Leblebici, 2012) However, there is a notable gap in research within Vietnam that compares the effects of these determinants on employee performance across state and non-state sectors This study aims to analyze previous findings on earnings, work environment, and promotion opportunities, focusing on their impact on employee performance in the Vietnamese context while highlighting the differences between state and other sectors The insights gained from this research will contribute significantly to both the academic literature and practical applications in the field.
Justification for the research
Employees are the backbone of any organization, significantly influencing its success or failure through their performance A deep understanding of key factors such as earnings, work environment, and promotion opportunities is crucial, as these elements impact employee performance differently across various sectors within the Vietnamese economic system This insight can be invaluable for leaders, managers, and employees alike, enabling them to develop tailored strategies that enhance employee performance and improve the overall efficiency and effectiveness of their organizations These motivations underscore the importance of this research.
Methodology
This research will employ a quantitative approach, gathering data through surveys conducted among employees in both state and other sectors in Ho Chi Minh City The data collection will utilize a questionnaire distributed in printed form and via email.
The sample for surveying was 280 employees
Questionnaires: The participants completed a questionnaire with 20 questions; the questions were designed to survey about three determinants that are earning, working environment, and promotion opportunities affect employees’ performance
Procedure: the participants were informed about the questionnaires The questionnaires were provided to participants by printed papers or emails
A survey analysis was conducted to identify the key determinants affecting employee performance in both state and other sectors The study compared these two groups to uncover differences in how three specific determinants influence employee performance across the sectors.
Outline of the report
This research article is structured into five chapters, beginning with Chapter 1, which provides an overview of the study Chapter 2 reviews existing literature on how earnings, working environment, and promotional opportunities impact employee performance, alongside the introduction of hypotheses and a conceptual model Chapter 3 details the research methodology, including sample selection, research instruments, procedures, and statistical techniques for data analysis In Chapter 4, data analysis is presented, highlighting key findings from the study Chapter 5 discusses the results, draws conclusions based on the findings, and explores practical implications, concluding with recommendations for future research.
Definitions/concepts
Employee” (The Legal Dictionary) a person who has agreed by contract to perform specified services for another, the employer, in exchange for money/benefits
“Performance” (Business Dictionary) the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed
In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract
Earnings refer to the income received by employees for their work, encompassing salaries, wages, and additional benefits provided by employers or organizations According to the Oxford Dictionary, earnings are defined as the money earned through employment Understanding the various components of earnings is essential for employees to grasp their overall compensation package.
The work environment, as defined by the business dictionary, refers to the location where tasks are performed, encompassing both the physical geographical setting and the immediate surroundings of a workplace, like an office or construction site Key factors influencing the work environment include air quality, noise levels, and employee benefits such as free childcare, unlimited coffee, and sufficient parking.
When look at working environment should consider about its culture aspect as whether it is a creative or conventional environment which is very important to productivity of its staff
A promotion in a career context signifies the advancement of an employee's rank or position within an organization Typically, job promotions come with a new title, increased responsibilities, and higher pay, along with enhanced benefits and managerial authority These advancements are generally determined by an employee's performance or length of service.
Delimitations of scope and key assumptions
This research focuses on Vietnam, a rapidly changing developing economy, and its findings may not be applicable to other economies The study's limited sample size, drawn from several provinces and cities, may not fully represent the entire country.
Conclusion
This chapter presents a comprehensive overview of the research, outlining the research objectives and questions while justifying the study's significance It highlights the data collection methods and analysis techniques employed, along with definitions of key terms The chapter concludes by discussing the research's delimitations.
Numerous studies globally highlight various determinants that influence employee performance, encompassing both internal and external factors unique to each organization and individual These determinants can be either tangible or intangible, yielding positive or negative effects on performance that vary based on specific contexts and organizational types This study focuses on three key determinants—earnings, working environment, and promotion opportunities—previously identified in literature, aiming to develop hypotheses for a model to analyze their impact on employee performance.
2.2 Classification models of literature review
This study explores the determinants that influence employee performance, highlighting a gap in existing research that typically examines only one or two factors Notably, there is a lack of comparative studies between state and other sectors within the Vietnamese economic system This section will review previous studies focusing on earnings, working environment, and promotion opportunities, assessing the impact of each factor on employee performance and formulating hypotheses for further analysis and comparison.
Most individuals seek employment for a range of benefits, both tangible and intangible, with income being a primary factor for many employees across various sectors Companies often utilize financial compensation as an incentive to boost employee performance, resulting in increased productivity for both individual workers and the organization as a whole.
Performance-related pay (PRP) is an effective tool for enhancing labor productivity for two main reasons Firstly, it helps address asymmetric information regarding workers' abilities and effort, motivating them to exert the appropriate level of effort Secondly, PRP can serve as a screening mechanism during the hiring process, attracting only the most capable candidates Consequently, this payment structure encourages employees to work harder and improve their performance, ultimately boosting productivity across the organization.
In the workplace, individuals are typically motivated by two key benefits: financial compensation and personal satisfaction Most employees do not work without some form of reward, as monetary incentives, particularly performance-related pay (PRP), can significantly enhance effort and productivity According to Van Eerde and Thierry (1996), employees are more likely to exert themselves when they believe their efforts will lead to valued outcomes Reinforcement theory supports this by highlighting the link between desired behaviors and their rewards, suggesting that pay can effectively encourage high performance (Perry, Mesch, and Paarlberg, 2006) However, the effectiveness of financial incentives varies across organizations, and the relationship between pay and productivity is not always straightforward Gielen et al (2009) noted that PRP does not consistently lead to increased productivity, especially in teamwork scenarios where individual contributions are hard to measure, potentially leading to free-riding Furthermore, multitasking can create perverse incentives, causing employees to prioritize rewarded tasks at the expense of others Thus, the implementation of PRP schemes requires careful consideration to ensure they truly enhance productivity.
Employees with stable jobs view the significance of wage increases differently than those pursuing short-term career goals In unstable employment situations, wage increases serve primarily as short-term incentives (Kiyosh Takahashi, 2006) Consequently, the impact of earnings on employee performance may vary between state sector workers and those in other sectors, as individuals in non-state sectors tend to change jobs more frequently than their counterparts in state employment.
Hypotheses H1: There is a positive impact of earning on employees’ performance
2.2.2 Working environment and employees’ performance
The workplace environment significantly influences employee productivity and performance, encompassing both physical and behavioral elements that can have positive or negative effects Key factors that enhance employee motivation and effectiveness include engaging work, opportunities for skill development, access to adequate information and resources, supportive colleagues, visibility of work results, competent supervision, and clearly defined responsibilities These elements not only affect individual performance but also impact error rates, innovation, collaboration, absenteeism, and employee retention (Nowier Mohammed Al-Anzi et al., 2009; Chandrasekar, 2011).
The physical layout of a workspace—including furniture arrangement, noise levels, lighting, temperature, and overall comfort—significantly impacts employee performance A well-designed workplace fosters productivity, while a poor environment can lead to increased complaints and absenteeism Enhancing factors such as air quality, meeting areas, quiet spaces, privacy, and personal storage can create a more favorable working environment, ultimately boosting employee performance.
The quality of the physical workplace significantly impacts a company's ability to attract and retain talent, as factors like employee engagement, productivity, and morale are closely linked to the work environment A well-designed workplace fosters motivation and enhances performance, while poor conditions can lead to decreased productivity and increased absenteeism due to health issues Creating a harmonious environment where employees are supportive, treat each other equally, and actively share knowledge can greatly improve both individual and organizational performance Research indicates that interaction among employees positively influences productivity, while distractions have a detrimental effect.
In short, it is widely accepted that both physical and behavioral factors have great impact on employees’ performance or productivity
Hypotheses H2: There is a positive impact of working environment on employees’ performance
2.2.3 Promotion opportunities and employees’ performance
Promotion serves as a reward for employees who demonstrate strong performance and possess the necessary skills for higher positions within an organization Achieving promotions aligns with the goals of many employees, fulfilling their aspirations and recognizing their dedication and hard work Ultimately, the pursuit of advancement is a fundamental desire for individuals across all types of organizations.
Promotions are often viewed as valuable opportunities that provide both tangible and intangible benefits, enhancing employees' motivation and performance Advancing to higher positions allows individuals to showcase and develop their skills, which can lead to increased job satisfaction However, the impact of promotions varies across organizations and is influenced by factors such as employees' age and personal aspirations While some employees see promotions as a primary goal to strive for, others may not prioritize them as highly Consequently, the effectiveness of promotions in motivating employees depends on individual perspectives, organizational culture, and employee demographics.
Achieving a higher position within an organization signifies not only a reward for hard work and exceeding expectations but also an increase in responsibility Employees who consistently perform well and fulfill their duties are often deserving of promotions, which serve as recognition of their excellence Such promotions indicate that the employee is prepared to take on greater responsibilities and contribute more significantly to the company However, it's important to note that promotions may not always correlate directly with positive performance reviews, as employers may have varying circumstances to consider.
Promotion incentives motivate employees to enhance their skills and knowledge, leading to greater contributions to their organizations This mutual benefit enhances productivity, particularly among talented workers who excel in higher positions within organizational hierarchies By aligning job roles with individual abilities, promotions facilitate the rapid advancement of skilled employees.
1997) These are other purposes of promotions They can be used to reward past employee efforts, promote investments in specific human capital and lower job turnover (Lazear, E, 1998)
Promoting employees as a form of incentive pay is a widely adopted practice that encourages recruitment into lower-paid entry-level positions, serving as a screening process for potential talent (Savych, 2005) High performers are rewarded with promotions, fostering a culture where junior workers are motivated to excel, as nearly all capable individuals are advanced within the promotion ladder This system not only retains skilled employees but also encourages them to invest in their specific skill sets Consequently, job seekers tend to apply selectively for roles where they believe they can succeed and advance beyond entry-level positions.
LITERATURE REVIEW AND HYPOTHESES
Introduction
Numerous studies worldwide have identified various determinants that influence employee performance, encompassing both internal and external factors specific to each organization and individual These determinants can be tangible or intangible and may exert positive or negative effects on employee performance, varying in impact based on the specific context of each firm This study focuses on three key determinants—earnings, working environment, and promotion opportunities—that have been highlighted in previous research, aiming to develop hypotheses for a model to analyze their effects on employee performance.
Classification models of literature review
This study investigates the various determinants that influence employee performance, highlighting a gap in existing research, which typically focuses on one or two factors Notably, there has been a lack of comparative studies examining the differences in these determinants across state and other sectors within the Vietnamese economic system This section will review previous studies on earnings, working environment, and promotion opportunities to assess the impact of each factor on employee performance and to formulate hypotheses for further analysis and comparison.
Most employees seek a range of tangible and intangible benefits, with income being a key factor for many in both public and private sectors Companies often leverage financial incentives to boost employee performance, resulting in increased productivity for both individuals and the organization as a whole.
Performance-related pay (PRP) is an effective tool for enhancing labor productivity for two key reasons Firstly, in scenarios where there is asymmetric information regarding a worker's abilities or effort, PRP schemes can motivate employees to exert the appropriate level of effort Secondly, during the recruitment of new employees, piece rates serve as a screening mechanism, attracting only the most capable candidates Consequently, this payment structure can incentivize employees to work harder and improve their performance, ultimately boosting the productivity of both individual workers and the organization as a whole.
In the workplace, individuals are primarily motivated by two key benefits: financial compensation and job satisfaction While monetary rewards, particularly performance-related pay, can enhance employee effort and overall productivity, their effectiveness varies across different organizations and situations Employees tend to exert more effort when they value the rewards and believe that their hard work will lead to these outcomes However, reinforcement theory indicates that the relationship between desired behaviors and their consequences is not always straightforward, as financial incentives may not consistently drive performance improvements In team settings, measuring individual contributions can be challenging, leading to potential free-riding among members and diminishing the impact of group-based incentives Moreover, multitasking can create perverse incentives, where employees prioritize rewarded tasks at the expense of others Consequently, the implementation of performance-related pay schemes requires careful consideration to ensure they genuinely enhance productivity.
Employees in stable jobs view wage increases differently than those with short-term career goals, as wage hikes serve as short-term incentives in unstable employment situations (Kiyosh Takahashi, 2006) Consequently, the impact of earnings on employee performance may vary between state sector workers and those in other sectors, primarily due to the higher job turnover rates in non-state sectors.
Hypotheses H1: There is a positive impact of earning on employees’ performance
2.2.2 Working environment and employees’ performance
The workplace environment significantly influences employee productivity and performance, encompassing both physical and behavioral components that can have positive or negative effects Factors such as engaging work, opportunities for skill development, access to adequate information and resources, supportive colleagues, visible results of work, effective supervision, and clearly defined responsibilities play a crucial role in motivating employees These elements not only enhance motivation but also impact engagement, error rates, innovation, collaboration, absenteeism, and employee retention (Nowier Mohammed Al-Anzi et al, 2009; Chandrasekar, 2011).
The physical layout and design of a workspace, including factors such as furniture, noise levels, lighting, temperature, and overall comfort, significantly influence employee performance A well-structured workplace can boost productivity, while a poor environment may lead to increased complaints and absenteeism Enhancing the working environment—by improving air quality, providing adequate meeting spaces, ensuring privacy, and offering personal storage—can lead to higher employee performance and satisfaction.
The quality of the physical workplace significantly impacts a company's ability to attract and retain talent, as various behavioral factors such as engagement, productivity, and morale play crucial roles in employee performance A positive work environment enhances motivation and leads to better outcomes, while inconvenient conditions can result in low performance and increased absenteeism due to occupational health issues A harmonious workplace, characterized by supportive employers and collaborative employees, fosters enthusiasm and knowledge sharing, ultimately boosting individual and organizational performance Research indicates that interaction among employees positively influences productivity, while distractions have detrimental effects.
In short, it is widely accepted that both physical and behavioral factors have great impact on employees’ performance or productivity
Hypotheses H2: There is a positive impact of working environment on employees’ performance
2.2.3 Promotion opportunities and employees’ performance
Promotion serves as a valuable reward for employees who demonstrate strong performance and possess the necessary skills to advance within an organization's hierarchy Achieving higher positions aligns with the goals of many employees and fulfills their ambitions It signifies recognition of their hard work and dedication, making career advancement a primary aspiration for individuals in any organization.
Promotions are often viewed as valuable opportunities that offer both tangible and intangible benefits, enhancing employees' motivation and performance By advancing to higher positions, individuals can better express and develop their skills, leading to increased job satisfaction However, the impact of promotions varies across organizations and among employees of different ages While some employees see promotions as a primary goal worth striving for, others may not prioritize them as highly Consequently, the effectiveness of promotions as a motivational tool depends on individual perspectives, employee levels, and organizational contexts.
Achieving a higher position in an organization comes with increased responsibilities and signifies an employee's dedication and hard work Employees who consistently meet and exceed expectations deserve promotions, which serve as recognition of their excellence A promotion indicates that the employee is prepared for greater responsibilities and is capable of taking on a larger role within the company However, it’s important to note that promotions may not always correlate directly with positive performance reviews, as employers may face limitations in their ability to promote at all times.
Promotion incentives can motivate employees, particularly those with strong abilities, to enhance their knowledge and skills, ultimately benefiting both the individual and the organization More talented workers tend to be more productive in higher organizational roles, as promotions align employees with positions that better match their capabilities, allowing skilled individuals to advance quickly within the company.
1997) These are other purposes of promotions They can be used to reward past employee efforts, promote investments in specific human capital and lower job turnover (Lazear, E, 1998)
Promotions serve as a widely adopted method of motivating employees and are considered a straightforward form of incentive pay, known as the promotions ladder (Savych, 2005) This system often requires new recruits to start in lower-paying entry-level positions, which act as a screening phase where good performance is rewarded with advancement Savych (2005) notes that when promotions are viewed as deferred compensation, nearly all junior workers who demonstrate their capabilities are promoted The possibility of advancement encourages high-performing employees to remain with the company and invest in their specific skills Consequently, job seekers tend to limit their applications to positions where they believe they can excel and eventually move up from these lower-paid entry roles.
In competitive environments, promotion opportunities can often motivate employees more effectively than higher wages, as the prestige associated with advanced positions encourages hard work and competition (Kiyoshi Takahashi, 2006) Promotions serve as a long-term incentive, particularly benefiting employees in stable jobs rather than those who frequently change positions In Vietnamese society, especially within government organizations, the significance of promotion opportunities is heightened, as many employees view their roles in the state sector as stable and secure.
Hypotheses H3: There is a positive impact of promotion opportunities on employees’ performance
The research model was developed based on three key determinants, all of which positively influence employee performance However, the strength of each determinant's impact on productivity and the relationships among them remain unclear, particularly regarding differences between state sector employees and those in other sectors To address this gap, a survey and regression analysis will be conducted in the following chapters, providing valuable insights for both the researcher and readers to better understand these issues and their real-world applications.
Conclusion
This chapter provides an overview of various studies examining three key determinants that influence employee performance: earnings, working environment, and promotion opportunities Based on these determinants, a model was developed that includes three hypotheses: H1 posits a positive impact of earnings on employee performance, H2 suggests a positive impact of the working environment on performance, and H3 indicates that promotion opportunities positively affect employee performance.
This chapter outlines the approach to resolving the research problem, detailing the selection process for participants and the data collection procedures It will also cover the measuring instruments used for data gathering Finally, the chapter concludes with an overview of the statistical techniques employed for data analysis.
This research utilizes a quantitative approach to examine how earnings, working environment, and promotion opportunities affect employee performance in Vietnam, while also comparing these impacts between state and non-state sectors.
Before doing an official survey, a pilot test was conducted with 30 employees in both state sectors and other sectors
A survey conducted from May to November 2012 targeted employees in various sectors, including state organizations, within Ho Chi Minh City A total of 280 questionnaires were distributed to selected respondents, providing a sufficient sample size for the study.
The study involved 20 questions, with a total of 200 participants, which is ten times the number of questions, exceeding the minimum requirement of four to five times Participants were equally divided into two groups: state sector employees and those from other sectors, with each group comprising over 100 participants, thereby meeting the minimum requirement for the questionnaire.
Under the guidance of my supervisor, a questionnaire was developed and adapted from previous research to assess employee performance This study utilized three key scales: earnings, working environment, and promotion opportunities The questions regarding these determinants were inspired by Nguyen (2011), specifically incorporating four questions related to the earnings factor.
Presence of salary that reflects my performance
Current income presence of attractive and competitive compensation system
My company has transparent and equitable policy of salary
Presence of salary that encourages better performance
There are six questions for working environment determinant:
My company organizes stable working time
In my workplace, staff is equipped and provided enough equipment for doing their work
My superiors encourage and help me in doing my work so much
I receive support from colleagues so much
Relationships between colleagues at my workplace are friendly and relaxed
My workplace is safety and convenience
There are five questions for promotion opportunities determinant:
My company has variety training programs to improve ability of employees
I have been trained all skills that need for doing my work
The company has created many opportunities for me to learn and improve
I have many opportunities for promotion
I have equal opportunities of getting promotion with other colleagues with similar qualification
Questions for measuring employees’ performance borrow from Rego and Cunhan
I believe I am an effective employee
I am happy with the quality of my work output
My manager believes I am an efficient worker
My colleagues believe I am a very productive employee
My performance is better than that of my colleagues with similar qualification
The questionnaire consists of twenty scales available in both English and Vietnamese versions It employs a 5-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree) For detailed information, please refer to Appendix A and B at the end of this thesis.
Data collection instruments were personally delivered to the selected employees for this study Research assistants facilitated the hand delivery and collection of these instruments, returning them to the author for subsequent coding and analysis.
Participants who agree to take part in this survey will receive an email at their personal addresses If they are unable to complete the questionnaires immediately, they can respond via email at their convenience.
Validation and pilot test of the instrument
To establish the highest degree of reliability, the jury-validated instrument was pre-tested on a small sample (n = 30) of randomly selected employees who are working in Ho Chi Minh City
Mean comparisons was used to determine whether there was a significant difference between the impact of those determinants on employees’ performance and different impact on state employees and other employees
Using the SPSS to analyzing the data and make the data analyzing:
1- Testing reliability of scales by using Cronbach’s Alpha and Coefficient:
The study assessed the reliability of each scale factor by calculating Cronbach’s Alpha and the beta of the factor loading Cronbach’s Alpha serves as a statistical measure of the correlation among questions within the scale, allowing for the elimination of inappropriate and irrelevant variables in the research process Variables with a Corrected Item-Total Correlation below 0.3 were disqualified, while scales with a Cronbach’s Alpha coefficient of 0.7 or higher were deemed reliable and selected for further analysis.
Factor analysis is utilized to investigate the relationships between independent variables, with the KMO (Kaiser-Meyer-Olkin) value serving as a key indicator; a KMO value above 0.7 is acceptable, while a value below 0.5 is deemed inadequate (Nancy L, Leech, Karen C Barret, George A Morgan, 2005) Additionally, factor loading values must exceed 0.5, and the difference between two factors should be greater than 0.3 to qualify for analysis Eigenvalues, which indicate the variance explained by each factor, should also be taken into account.
1 and the total variance extracted (Cumulative% Extraction Sum of Squared loadings) greater than 50% Extract method "Principal Axis Factoring" rotation
"Varimax" is used in the factor analysis scale independent variables
To examine the relationship between independent and dependent variables, we conducted a linear regression analysis to compare the impact of various independent factors on the dependent variable across the state sector and other sectors This analysis aimed to evaluate the significance of key factors, such as earning potential, working environment, and promotion opportunities, on employee performance The regression was performed using the enter method, including variables that met the selection criteria with a significance level of less than 0.05.
The coefficients in the regression model indicate the significance of each independent variable on the dependent variable By examining the Beta coefficients derived from the regression analysis, we can assess the impact of various factors on employee performance.
Separate multiple regression analyses were conducted for state sectors and other sectors to compare the impact of three independent variables—earnings, working environment, and promotion opportunities—on employee performance.
This chapter provides a comprehensive overview of the research design, detailing the population studied and the data collection procedures It addresses confidentiality concerns and describes the measuring instruments used, along with the statistical techniques employed, specifically SPSS, to test the research hypotheses The analysis was conducted in three steps: factor analysis and scale reliability, correlation analysis, and multiple regression analysis Finally, a comparison was made between the effects of independent variables on the dependent variable across state sectors and other sectors to identify any differences.
METHODOLOGY
Introduction
This chapter outlines the approach to addressing the research problem, detailing the selection process for participants and the methodology for data collection It will also examine the measuring instruments employed to gather data, concluding with an overview of the statistical techniques used for data analysis.
Research procedure
This research utilizes a quantitative approach to examine how earnings, working environment, and promotion opportunities affect employee performance in Vietnam Additionally, it compares the impacts of these factors between the state sector and other industries.
Before doing an official survey, a pilot test was conducted with 30 employees in both state sectors and other sectors
From May to November 2012, a survey was conducted among employees in various sectors in Ho Chi Minh City, including state organizations A total of 280 questionnaires were distributed to selected respondents, which, while not a large sample size, was deemed sufficient for the study's objectives.
The study involved 20 questions, with a total of 200 participants, making the sample size ten times larger than the number of questions Participants were evenly divided into two groups: state sector employees and those from other sectors, each comprising over 100 individuals This sample size exceeds the minimum requirement of four to five times the number of questions in the questionnaire, ensuring robust results.
A questionnaire was developed with guidance from my supervisor and adapted from earlier research This study utilized three scales to assess employee performance, focusing on earnings, working environment, and promotion opportunities The questions related to these three factors were derived from Nguyen (2011), including four specific questions regarding the earnings determinant.
Presence of salary that reflects my performance
Current income presence of attractive and competitive compensation system
My company has transparent and equitable policy of salary
Presence of salary that encourages better performance
There are six questions for working environment determinant:
My company organizes stable working time
In my workplace, staff is equipped and provided enough equipment for doing their work
My superiors encourage and help me in doing my work so much
I receive support from colleagues so much
Relationships between colleagues at my workplace are friendly and relaxed
My workplace is safety and convenience
There are five questions for promotion opportunities determinant:
My company has variety training programs to improve ability of employees
I have been trained all skills that need for doing my work
The company has created many opportunities for me to learn and improve
I have many opportunities for promotion
I have equal opportunities of getting promotion with other colleagues with similar qualification
Questions for measuring employees’ performance borrow from Rego and Cunhan
I believe I am an effective employee
I am happy with the quality of my work output
My manager believes I am an efficient worker
My colleagues believe I am a very productive employee
My performance is better than that of my colleagues with similar qualification
The questionnaire consists of twenty scales and is available in both English and Vietnamese versions It employs a 5-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree) For further details, please refer to Appendices A and B at the end of this thesis.
The data collection instruments were personally delivered to the selected employees for this study Research assistants facilitated the hand delivery and collection of these instruments, ensuring they were returned to the author for coding and analysis.
Participants who agree to take part in the survey will receive an email at their personal addresses Although they may not be able to respond to the questionnaires immediately, they have the option to reply via email at their convenience.
Validation and pilot test of the instrument
To establish the highest degree of reliability, the jury-validated instrument was pre-tested on a small sample (n = 30) of randomly selected employees who are working in Ho Chi Minh City
Mean comparisons was used to determine whether there was a significant difference between the impact of those determinants on employees’ performance and different impact on state employees and other employees
Using the SPSS to analyzing the data and make the data analyzing:
1- Testing reliability of scales by using Cronbach’s Alpha and Coefficient:
The study evaluated the reliability of each scale factor using Cronbach's Alpha, a statistical measure that assesses the correlation between questions within the scale This analysis helps identify and eliminate inappropriate or irrelevant variables, ensuring a more accurate research process Variables with a Corrected Item-Total Correlation below 0.3 were deemed disqualified, while scales achieving a Cronbach's Alpha coefficient of 0.7 or higher were selected for further analysis.
Factor analysis is employed to investigate the relationships among independent variables, with a KMO (Kaiser-Meyer-Olkin) value above 0.7 indicating adequacy, while a value below 0.5 suggests inadequacy (Nancy L, Leech, Karen C Barret, George A Morgan, 2005) Additionally, factor loading coefficients below 0.5 or a difference of less than 0.3 between factors disqualify the analysis The Eigenvalue, which indicates the variance explained by each factor, must also be considered in the evaluation process.
1 and the total variance extracted (Cumulative% Extraction Sum of Squared loadings) greater than 50% Extract method "Principal Axis Factoring" rotation
"Varimax" is used in the factor analysis scale independent variables
To evaluate the relationship between independent and dependent variables, a Linear Regression analysis was conducted to compare the impact of various factors on employee performance across the state sector and other sectors This analysis focused on key elements such as earning factors, working environment, and promotion opportunities The regression was executed using the enter method, incorporating variables that met the selection criteria of a significance level of less than 0.05.
The coefficients in the regression model indicate the significance of each independent variable's impact on the dependent variable The Beta coefficients derived from the analysis reveal the importance of various factors influencing employee performance.
Multiple regression analyses were conducted separately for state sectors and other sectors to compare the impact of three independent variables—earning, working environment, and promotion opportunities—on employee performance.
Conclusion
This chapter provides a detailed overview of the research design, including the target population and data collection procedures, while addressing confidentiality concerns It describes the measuring instruments used and the statistical techniques applied, specifically SPSS, to test the research hypotheses through three key steps: factor analysis and scale reliability, correlation analysis, and multiple regression analysis Additionally, it compares the effects of independent variables on the dependent variable across state sectors and other sectors to identify any differences.
Chapter 3 introduces the research methodology, setting the stage for the results discussed in Chapter 4 After collecting the questionnaires from participants, the data underwent thorough testing and analysis, utilizing both descriptive and inferential statistics Significance levels of 05 and 01 were established a priori for correlation tests, while multiple regression analysis was assessed at the 05 significance level Additionally, all values for the analysis of variance were evaluated at the 01 significance level.
This chapter aims to analyze survey data to explore how earnings, working environment, and promotion opportunities influence employee performance A regression analysis will be conducted to assess these factors, followed by a linear regression to compare their effects on employees in the state sector versus those in other sectors.
In Chapter 3, a pre-test was conducted on a randomly selected sample of 30 employees to ensure high reliability, yielding positive results Consequently, the author proceeded with a survey conducted in Ho Chi Minh City from August 28 to November 3, 2012, which included participants from both state and other sectors.
A total of 280 questionnaires were distributed to potential participants through various methods, resulting in 245 responses, with 205 questionnaires deemed suitable for analysis, achieving an 83.75% response rate The survey participants represented a diverse range of ages, educational backgrounds, and genders across 25 different companies and sectors, including notable organizations such as the Committee of the Communist Party of HCM City, Agriculture Bank, Viettinbank, and Saigon Beer Company, among others, which helped mitigate bias The following section will present the analysis of data corresponding to each hypothesis.
4.3 Patterns of data for each research question
4.3.1 Preliminary evaluation scale with Cronbach’s Alpha
4.3.1.1 Testing the reliability of independent variables
* Testing the reliability of Earning variable Table 4.1 – Reliability Statistics of Earning variable
Scale Mean if Item Deleted
Scale Variance if Item Deleted
As the result of Cronbach’s Alpha of Earning is shown in the Table 4.1 above, it is (0.909) which is larger than 0.7, and the Corrected Item-Total Correlation of
Earning 1 = 0.758; Earning 2 = 0.851; Earning 3 = 0.821; Earning 4 = 0.749, all of those are larger than 0.3 Therefore, this variable is accepted for Exploratory Factor Analysis later However, this Cronbach’s Alpha is larger than 0.9 means that the items are repetitious (Nancy L, Leechn et al., 2005)
* Testing the reliability of Working Environment variable
Table 4.2 - Reliability Statistics of Working Environment variable
The Cronbach’s Alpha for the Working Environment, as indicated in Table 4.2, is 0.886, exceeding the acceptable threshold of 0.8 Additionally, the Corrected Item-Total Correlation values for Env1 (0.759), Env2 (0.733), Env3 (0.748), Env4 (0.673), Env5 (0.691), and Env6 (0.625) are all above the minimum requirement of 0.3 Consequently, this variable is deemed suitable for subsequent Exploratory Factor Analysis.
Scale Mean if Item Deleted
Scale Variance if Item Deleted
* Testing the reliability of Promotion Opportunities variable
Table 4.3 - Reliability Statistics of Promotion Opportunities variable
The Cronbach’s Alpha for Promotion Opportunities is 0.835, indicating good reliability since it exceeds the threshold of 0.8 However, Pro5 has a higher Cronbach’s Alpha of 0.889 and a Corrected Item-Total Correlation of 0.313, leading to the decision to delete Pro5 from the analysis The subsequent assessment will focus on the reliability of the Promotion Opportunities variable.
Table 4.4 - Reliability Statistics of Promotion Opportunities variable with 4 factors
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Cronbach's Alpha if Item Deleted
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Cronbach's Alpha if Item Deleted
As the result of Cronbach’s Alpha of Promotion Opportunities is shown in the table 4.4 above, it is (0.889) which larger than (0.8), and the Corrected Item-Total
Correlation of Pro1 = 0.735; Pro2 = 0.855; Pro3 = 0.678; Pro4 = 0.780, all of those are larger than 0.3 Therefore, this variable is accepted for Exploratory Factor Analysis later
4.3.1.2 Testing the reliability of dependent variable Employees’ Performance
Table 4.5 - Reliability Statistics of Performance variable
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Cronbach's Alpha if Item Deleted
As the result of Cronbach’s Alpha of Employees’ Performance is shown in the table 4.5 above, it is (0.907) which larger than (0.8), and the Corrected Item-Total
Correlation of Per1 = 0.777; Per2 = 0.792; Per3 = 0.749; Per4 = 0.764; Per5 = 0.752, all of those are larger than 0.3 Therefore, this variable is accepted for Exploratory Factor Analysis later
Results of testing reliability of three independent variables and dependent variable showed that they reach requirement with all Cronbach Alphas larger 0.7
4.3.2 Scale testing by using Exploratory Factor Analysis (EFA)
The study identifies 14 independent factors across three variables that assess the dependent variable of employee performance Each factor underwent reliability testing using Cronbach's Alpha, confirming their suitability for exploratory factor analysis (EFA).
The result of EFA in Table 4.6 below shows that KMO = 0.870 that is larger than 0.7, Sig = 0.000 that is less than 0.05, and there are 3 of 14 factors that have
Table 4.6 - Exploratory Factor Analysis (EFA)
Kaiser-Meyer-Olkin Measure of Sampling
A principal axis factor analysis with Varimax rotation was performed on a fourteen-item employee performance questionnaire to uncover its underlying structure Three factors were identified, corresponding to the constructs of earnings, working environment, and promotion opportunities The analysis revealed that the first factor explained 26.762% of the variance, the second factor accounted for 24.013%, and the third factor contributed 21.805% Collectively, these three factors explained a cumulative variance of 72.579%, exceeding the 50% threshold, thus confirming the model's acceptability.
Com- ponent Initial Eigenvalues Extraction Sums of
Rotation Sums of Squared Loadings
Extraction Method: Principal Component Analysis
Extraction Method: Principal Component Analysis
Rotation Method: Varimax with Kaiser Normalization a Rotation converged in 5 iterations
The analysis results, as indicated in the Rotated Component Matrix, reveal that 14 factors have loading values exceeding 0.4, which meets the necessary criteria Notably, three variables are strongly represented across these 14 factors, yielding a positive outcome.
As the result of testing reliability and Exploratory Factor Analysis (EFA) above
3 independent variable that include Earning, Working Environment, and Promotion Opportunities are acceptable and have practical value
This study explores three key factors—Earnings, Working Environment, and Promotion Opportunities—that influence employee performance Utilizing Linear Regression analysis, the research aims to assess the relationship between the dependent variable, employee performance, and the independent variables of earnings, working environment, and promotion opportunities.
The Enter method will be used All variables will be put in together at same time to select based on the selection criteria variables with a significance level of
