THE EFFECT OF EARNING, WORKING ENVIRONMENT, AND PROMOTION OPPORTUNITIES ON EMPLOYEES’ PERFORMANCE A COMPARISON BETWEEN THE STATE SECTOR AND OTHER SECTORS IN VIETNAM

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --- ĐẶNG XUÂN CHƯƠNG THE EFFECT OF EARNING, WORKING ENVIRONMENT, AND PROMOTION OPPORTUNITIES ON EMPLOYEES’ PE

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

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ĐẶNG XUÂN CHƯƠNG

THE EFFECT OF EARNING, WORKING ENVIRONMENT, AND PROMOTION OPPORTUNITIES ON EMPLOYEES’ PERFORMANCE: A COMPARISON BETWEEN THE STATE SECTOR AND OTHER SECTORS IN VIETNAM

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2012

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

ĐẶNG XUÂN CHƯƠNG

THE EFFECT OF EARNING, WORKING ENVIRONMENT, AND PROMOTION OPPORTUNITIES ON EMPLOYEES’ PERFORMANCE: A COMPARISON BETWEEN THE STATE SECTOR AND OTHER SECTORS IN VIETNAM

ID: MBUS 111006

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr NGUYỄN ĐÔNG PHONG

Ho Chi Minh City – Year 2012

TABLE OF CONTENTS

Chapter 1 – INTRODUCTION 1

1.1 Background of the research 1

1.2.Research problem, research objective, and research questions 3

1.3.Justification for the research 4

1.4.Methodology 4

1.5.Outline of the report 5

1.6.Definitions/concepts 6

1.7.Delimitations of scope and key assumptions 7

1.8.Conclusion 7

Chapter 2 – LITERATURE REVIEW AND HYPOTHESES 8

2.1 Introduction 8

2.2 Classification models of literature review 8

2.2.1 Earning and employees’ performance 8

2.2.2 Working environment and employees’ performance 10

2.2.3 Promotion opportunities and employees’ performance 12

2.3 Conclusion 15

Chapter 3 – METHODOLOGY 16

3.1 Introduction 16

3.2 Research procedure 16

3.3 Conclusion 20

Chapter 4 - ANALYSIS OF DATA 21

4.1 Introduction 21

4.2 Brief description of subjects 21

4.3 Patterns of data for each research question 22

4.4 Conclusion 37

Chapter 5 – IMPLICATION AND CONCLUSIONS 40

5.1 Introduction 40

5.2 Conclusions 40

5.3 Implications 42

5.4 Limitations and recommend for further research 43

REFERENCE 44

ANPPEDIX A 47

ANPPENDIX B 49

ANPPENDIX C 51

ACKNOWLEDGEMENT

After two years study in International School of Business (ISB) with MBus program, and the time of doing this thesis, I acknowledge that I was so lucky to be a member of this program where I had great chances to work with professionals come from both internal and oversea, those professionals had to equip us – students of ISB not only knowledge, skills and experience of economy and management, but also provide us valuable information of many aspects of social life I also have got a very nice friendship with many interesting members of the program who have interacted and helped me so much in studying and in many other fields Therefore, I would like to express my heartfelt gratitude and deepest appreciation to my research Supervisor Dr Nguyen Dong Phong, for his intensive support, valuable guidance and suggestions; all professionals of the program, and all members of ISB for their enthusiastic supporters during my whole course and the time of doing this research; my classmates, who have shared with me both joys and difficulties during the course, encourage me so much in doing this thesis

THE EFFECT OF EARNING, WORKING ENVIRONMENT, AND PROMOTION OPPORTUNITIES ON EMPLOYEES’ PERFORMANCE: A COMPARISON BETWEEN THE STATE SECTOR AND OTHER SECTORS IN VIETNAM

Abstract

Purpose – This study aims to determine the impact of three independent variables which are

earning, working environment, and promotion opportunities on dependent variable, employees’ performance, and compare those variables affect on performance of employees in state sectors and other sectors in order to find out differences between two Design/methodology/approach – A survey was conducted involving 280 employees working

in both government sectors and other sectors in Ho Chi Minh City Multiple regression analyses were performed to separately analyze the effects on employees, employees in state sectors, and employees in other sectors The comparison of those effects also did between two groups

Findings – The results showed that all three determinants which are earning, working

environment and promotion opportunities positively influence employees’ performance A comparison of the relative strengths of the effects reveals that in both state sectors and other sectors Earning has the strongest effect on employees’ performance, and in state sectors it affects stronger than in other sectors The second is Promotion opportunities, and it also shows that in state sectors Promotion opportunities affects stronger on employees’ performance than

in other sectors The third is Working Environment, but in this case the stronger one belongs

to other sectors, and in state sectors it impacts slightly to employees’ performance

Keywords: Employee, performance, compare, earning, working environment, promotion

opportunities, state sectors, other sectors

Chapter 1 INTRODUCTION

1.1 Background of the research

Each sector/organization has its own asset which contains two main components – labor and capital Capital is so important to the success of the sector/organization, while labor is essential to it The labor of the organization does everything daily and the whole existing time of the organization Without labor nothing

is done However, labor with their knowledge and skills does not guarantee to the success of the organization; the vital thing is how this labor demonstrates its knowledge and skills in doing or performing their works Employees’ performance is

an essential part for the success or failure of each sector/organization, which is affected

by number of factors that come from both inside and outside of each sector/organization such as leadership, earning, promotion opportunities, working environment, employee employer relationship, leadership commitment, employee involvement, and etc Each economic system contains a large number of sectors/organizations, and inside each economy there are some differences such as the difference number of state sectors and other sectors, etc Vietnamese is a developing economy which comprises variety kind of sectors such as foreign sectors, join sectors, private sectors, and public/state sectors Each kind of those sectors have contributed fairly to the economy, and they all have been considering be important to the development of the country All of those kind sectors could be divided into two groups which are state sectors and other sectors (foreign sectors, join sectors, private sectors),

in the process of reforming its economic system, the number of Vietnamese state sector seems to be getting smaller by time while the number of other sectors has increased, even the state sector continues to hold an important role in Vietnamese economic system It is clearly that, in both state and other sectors the main contribution to the

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success of each single sector is the performance of its employees However, from the nature of each group, the state sector has some differences with other sectors, therefore each of them is affected by the same determinants but with different influences, different levels which should be analyzed and have a comparison Understanding the main determinants which affect employees’ performance in each group of sectors and from that has an adjustment for improving is vital to the success of each sector, its leadership, and even its employees, especially with Vietnamese economy which is changing so quickly with plenty of opportunities and challenges

Market as battlefield, in battlefield as Vladimir Ilyich Lenin said: the winning

or failing on battlefield depend on the emotion of the soldiers who are fighting on that Therefore, motivating people is so important which is vital for the success of each organization in any field, including business In doing business today, one of the biggest problems for Vietnamese sectors that have been discussed so much on media is productivity of Vietnamese labor is low This problem is agreed by both Vietnamese government officials and people And many foreign managers who have worked with Vietnamese people also reveal that Vietnamese labor is intelligent and has good skills, but the output is quite low compare to labor of other neighbor countries, this problem could relate to the motivation aspect that requires reasonable answer and solutions Moreover, the fact in Vietnam is that not many managers consider carefully about factors that motivate their employees in doing works, some of them may know how to motivate their subordinates but they ignore, some other may not know well about that, therefore those managers do not adopt any policy to encourage their employees to perform better However, since Vietnam joined into World Trade Organization, especially during economic crises times the competition between Vietnamese products and foreign ones is so hard in both the quality and the price of each product that require Vietnamese sectors have to enhance capacity in many aspects that include human resource, and improving performance of employees is one important factor By

Research objective

Objectives of this research are to determine how earning, working environment, and promotion opportunities affect on employees’ performance, compare and discuss what those determinants impact differently on the state sector and other sectors in Vietnamese economic system

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There has had number of studies about determinants affect on employees’ performance worldwide such as Workplace Environment and Its Impact on Employees’ Performance (Nowier Mohammed Al-Anzi, 2009); Earnings, and Performance-Related Pay (Alison L Booth and Jeff Frank, 1999); Effects of Wage and Promotion Incentives on the Motivation Levels of Japanese Employees (Kiyoshi Takahashi, 2006); Workplace Environment and Its Impact on Organizational Performance in Public Sector Organizations (Chandrasekar, 2011); Impact of Workplace Quality on Employee’s Productivity: case study of a bank in turkey (Demet Leblebici, 2012) etc Even those, in Vietnam it seems that has not had any study that compared how those determinants impact the performance of employees between state sectors and other sectors, therefore this research will look at some previous research about earning, working environment, and promotion opportunities affect employees’ performance, analyze the effect of those determinants on performance of employees in Vietnam context and has a comparison and discussion in order to distinguish differences of how those factors affect on state sectors and other sectors Finding out

those differences is considered as the thesis’ contribution to the literature and practice 1.3 Justification for the research

All sectors/organizations are formed by employees, and those people decide the success or failure of the organization which they belong to by their own performance Understanding well main determinants in general and earning, working environment, promotion opportunities in specific affect on employees’ performance and recognize how those determinants affect on state sectors and other sectors differently in Vietnamese economic system could be very helpful for leaders/managers, and even employees in each kind of sector to create attributions which are suitable to each sector to improve performance of their employees, to enhance efficiency and effectiveness of their firms Those are main reasons for doing this research

1.4 Methodology

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This research will use quantitative approach The data will collect by surveying employees from state sectors and other sectors in Ho Chi Minh City use questionnaire printed in papers and email

Sample:

 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

Data analysis

The information from survey was analyzed determinants affect employees’ performance in both state sectors and other sectors, and compared to find out the differences between two groups about how employees’ performance is influenced by three determinants

1.5 Outline of the report

In this research, the introduction is expressed in chapter 1 where an overview

of the study is delivered Available literature relates to earning, working environment, and promotional opportunities affect on employees’ performance are presented in Chapter 2 where hypothesizes and conceptual model are also introduced Chapter 3 provides an in depth discussion of the research methodology used to investigate the research problem The design for the sample selection and size, research instruments used, procedures followed and the statistical techniques used to analyze the data is also highlighted Chapter 4 focuses on data analysis and the findings that became apparent from the research study The discussion of the results that were obtained in chapter 5 where conclusions are drawn based on the obtained results and the possible practical

Employee” (The Legal Dictionary) a person who has agreed by contract to

perform specified services for another, the employer, in exchange for money/benefits

Definition of working environment

Business dictionary defined work environment as Location where a task is completed When pertaining to a place of employment, the work environment involves the physical geographical location as well as the immediate surroundings of the workplace, such as a construction site or office building Typically involves other factors relating to the place of employment, such as the quality of the air, noise level, and additional perks and benefits of employment such as free child care or unlimited coffee, or adequate 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

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Definition of promotion

“Promotion” (Investoperdia dictionary) in terms of a career, a promotion refers

to the advancement of an employee's rank or position in a hierarchical structure Job promotions usually include a new job title, a greater number of responsibilities and a pay increase They might also include an expansion of benefits and managerial authority over other employees Job promotions are usually base on performance or tenure

1.7 Delimitations of scope and key assumptions

This research undertakes in Vietnam which should be considered as a particular economy - developing economy with the speed of changing so fast in component, etc, therefore the result of this research may not appreciate with other economy The sample of surveying is quite small within several provinces and cities,

so the result may not totally relevant to the whole country, etc

1.8 Conclusion

In this chapter the overview of the research was provided Research objective, research questions were introduced The justification for the research was expressed The way of collecting data and the method of analyzing data were emphasized, and key

terms were defined The chapter concludes with delimitations of the research

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Chapter 2 LITERATURE REVIEW, HYPOTHESES

2.1 Introduction

There are number of determinants affect employees’ performance that has demonstrated in many studies worldwide Those determinants include from both internal and external of each sector/organization, and each individual employee, those could be tangible or intangible Each determinant could have positive or negative effect

on performance of employees with different levels depend on each specific situation, each firm, and each kind of organization This study only looks at three determinants which have considering in previous studies to have a general knowledge about their effect on employees’ performance and from that find out hypothesizes to build a model for analyzing Those three determinants are earning, working environment, and promotion opportunities

2.2 Classification models of literature review

Author of this study has been searching many articles to find out determinants affect on employees’ performance, and from the searching there was rarely researches look at more than three determinants affect employees’ performance at one time, most

of them just look at one or two determinants, and there was not any research compare differences of determinants on state sectors and other sectors in Vietnamese economic system Therefore, this section will look at previous studies about earning, working environment, and promotion opportunities affect on employees’ performance to see how each single factor impacts on the performance of employees, and finding hypothesizes for analyzing and comparing

2.2.1 Earning and employees’ performance

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In general, most people work for benefits which contain variety of both intangible and tangible things Among those benefits income is one main one which is considered importance by many employees in both state and other sectors There are many firms have used payment as an incentive to encourage performance of employees that lead to higher productivity of each individual employee and the whole organization

A popular instrument is performance related pay (PRP), which may stimulate labor productivity for two reasons “First, in situations of asymmetric information about worker’s abilities or effort a PRP-scheme can be used to induce workers to exert the right amount of effort Second, when hiring new workers, piece rates can be used as

a screening mechanism to encourage only the most able workers to apply” (Gielen, Kerkhofs, Van Ours, 2009) As a result, payment could encourage employees work harder, and perform better to increase productivity of each employee and the whole organization

Normally, people in society come to work for benefits which combine two main reasons, firstly they work for payments, and secondly they work for joy There are not many people who work without benefits In most cases payments, especially extra payments can affect the effort of employees in doing their jobs which induce higher performance that lead to more productivity of each individual and the whole organization Individuals will exert effort if they expect it will result in an outcome that they value (Van Eerde and Thierry, 1996) In the case of performance-related pay, employees will work harder if they value monetary rewards and believe that those awards will results from their increased efforts Reinforcement theory posits a direct relationship between a desired target behavior and its consequences It suggests that pay can be used to create consequences for desired behaviors such as performance that will reinforce the behaviors (Perry, Mesch, and Paarlberg, 2006) However, payments are not always work well in all situations, it affects differently in different

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organizations, and the amount of payment and the increased level of performance/productivity are not parallel together, therefore using incentive to improve performance in which situations with suitable methods and reasonable amount should

be considered carefully Gielen et al (2009) also stated that despite the potentially positive productivity effects, PRP may not always increase productivity In case of teamwork, individual performance is difficult to measure, hence there is an incentive to free-ride In such a case, group-based incentive schemes may have little effect on individual productivity Additionally, perverse incentives may arise in case of multitasking When employees are required to perform several tasks, they will focus only on those activities being rewarded and neglecting other activities Therefore it is not always clear that the introduction of a PRP scheme will indeed increase productivity

Employees with stable jobs consider the importance of increasing wage differently compare to those with short-term, transitional career goals Wage increase acts as a short-term incentive when employment relationships are unstable and uncertain (Kiyosh Takahashi, 2006) Therefore, the effect of earning/wage on performance of employees in state sectors could be different with employees work in other sectors because people work in other sectors change their jobs more frequent than those in state sectors

Hypotheses H1: There is a positive impact of earning on employees’ performance

2.2.2 Working environment and employees’ performance

People in daily lives and doing business always adhere with both natural and social environments In working place people adhere to the environment surrounding them which definitely affects to their productivity or performance Workplace environment includes both physical and behavioral components which have both

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positive and negative impact to productivity or performance of employees The employee’s workplace environment that most impacts on the level of employee’s motivation and subsequent performance How well they engage with the organization, especially with their immediate environment, influences to a great extent their error rate, level of innovation and collaboration with other employees, absenteeism and, ultimately, how long they stay in the job (Nowier Mohammed Al-Anzi et al, 2009) There are number factors of workplace that affect employee’s performance such as interesting work which employees enjoy their working, opportunity to develop special abilities that give employees to express and maximize their capacity, adequate information, enough authority, sufficient help and equipment, friendly and helpful co-workers, opportunity to see results of work, competent supervision, clearly defined responsibilities are considered to be the job factors that motivates employees performance (Chandrasekar, 2011)

The physical layout of the workspace, furniture, noise, lighting, temperature, overall comfort, physical security, the quality of air, informal and formal meeting areas, quiet areas, privacy, personal storage, work areas, etc, all have effect on performance of employees A good workplace normally enhances employee’s productivity, and vice versa Therefore, improving the working environment can reduce complaints and absenteeism while increasing performance of employees

“Quality of the physical workplace environment may have a strong influence on a company’s ability to recruit and retain talented people The behavioral factors in workplace environment may be considered keys affecting employee’s performance which may include engagement, productivity, morale, comfort level, etc It is accepted that better workplace environment motivates employees and produces better results People working under inconvenient conditions may end up with low performance and face occupational health diseases causing high absenteeism and turnover” (Demet Leblebici, 2012) Working in a harmony environment where employees are friendly,

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employers are supportive and treat everyone equally, and all members are ready to help and interact with each other, enthusiasm for other and sharing knowledge, experience, information to each other that definitely result in improving performance of each individual and the whole organization, and vice verse Haynes (2008, in Demet Leblebici, 2012) explains the behavioral components of the office environment that have the greatest impact on office productivity In all of the work patterns, it was found that interaction was perceived to be the component to have the most positive effect on productivity, and distraction was perceived to have the most negative

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 is one kind of benefits which is considered as a reward for someone when he/she works well and has enough ability to hole a more important position in a hierarchy of an organization, and getting to higher positions could match target of many employees and satisfy their desire It is the recognition of employee efforts and his/her commitment to work Getting higher and higher promotion is the ultimate desire of each person working in any sort of organizations (Bilal Jamil Naintara Sarfaraz Raja, 2011)

Normally, people consider promotions as good opportunities for themselves which could give them more benefits in both intangible and tangible, both financed and unfinanced By getting to higher positions they could have more chances to express and develop their capability which will in turn to give them more motivation to perform better Promotions can be used as one kind of compensations to motive employees The effect of promotions may differ in different organizations and

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employees’ age Moreover, each employee considers differently about promotions, some may consider it as the highest target which they must try their best to achieve and some may not be so curious about that, therefore the effect of promotions to employees’ performance differently depend on each individual, the level of employees, the age of employees and each kind of organizations, and so on

Getting higher position is not only considered as one kind of benefits, but also requires the employee more responsibility to his/her organization If the employee is working hard, addressing all tasks expected and performing beyond expectations, they are deserved to get promotion, and therefore the employer may give the employee a promotion as a sign of excellence The promotion may indicate that the employee is ready for more responsibility in the company and is mature enough to play a larger role

in the business A promotion may not be the result of any positive employee performance review, as the employer may not have that option each time (Mary Jane, n.d) from http://www.ehow.com/info_7864603_employee-promotion-performanceappraisal.html

Promotion incentive could inspire workers, especially who has abilities try their best to develop their knowledge and skills, to contribute more for their organization, and as a result this incentive benefits both employees and the organization More talented workers are usually more productive higher up in organizational hierarchies (Ministry of Business Innovation & Management, n.d) Promotions assign workers to jobs better suiting their abilities and quickly move up talented workers (Gibbons, 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)

Motivating employees by promotion has adopted worldwide and it is considered

as the simplest form of incentive pay - a promotions ladder (Savych, 2005) This

In some cases, promotion opportunities could motivate employees better than wages/income, especially in competitive environment The prestige of higher positions rather than higher wages stimulates employees to work hard to win the competition (Kiyoshi Takahashi, 2006) Promotion should be considered as a long-term incentive that is more effective on employees with stable jobs than those who change jobs frequently In Vietnamese society, especially in government organizations promotion opportunities could be considered so important by many employees, because most jobs

in state sectors could consider as stable ones

Hypotheses H3: There is a positive impact of promotion opportunities on employees’ performance

From three determinants above the model of the research was created as below All of those determinants have positive effect to employees’ performance However, there was no information which shows how strong of each element affect the performance and the relationship among those determinants in affecting employees’ productivity, and the difference of those effects to employees of state sectors and other sectors Therefore, it is necessary to conduct a survey and run regression as follow chapters in order to find out that information to help author of the research and readers understand clearly about those problems and apply to reality

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+H2 +H1

+H3

2.3 Conclusion

In this chapter an overview of the literature from variety of previous researches

about three determinants affect on employees’ performance which are earning, working

environment, and promotion opportunities were introduced and discussed From those

three determinants a model which comprises three hypotheses was built Those

hypotheses are: Hypotheses H1: There is a positive impact of earning on employees’

performance; Hypotheses H2: There is a positive impact of working environment on

employees’ performance; Hypotheses H3: There is a positive impact of promotion

opportunities on employees’ performance

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Chapter 3 METHODOLOGY

3.1 Introduction

This chapter will highlight how the research problem will be solved How the participants will be selected and the procedure followed to gather the data Moreover, the measuring instruments to gather the data will be discussed This chapter will conclude with the statistical techniques utilized for the data analysis

3.2 Research procedure

In this research, quantitative approach is used, the study employs the following research methodology to investigate the impact of earning, working environment, and promotion opportunities on performance of employees in Vietnamese context and compare those impacts between the state and other sectors

20 questions, therefore about 200 is ten times larger than the number of questions, while the minimum requirement is four to five times The participants were divided equally into two groups which included employees in the state sector and other sectors, each group was more than 100 participants that is five times larger than number of questions in the questionnaire, it reaches to minimum requirement

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Measurement

A questionnaire was designed under the advice of my supervisor and modify from previous studies The questionnaire was used in this study employed three scales designed to measure performance of employees namely earning, working environment, and promotion opportunities Questions about these three determinants borrow from Nguyen (2011), there are four questions for earning 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

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Questions for measuring employees’ performance borrow from Rego and Cunhan (2008) with five questions:

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

Totally, there are twenty scales in the questionnaire This questionnaire is produced in English and Vietnamese versions In the questionnaires a 5 points Likert scale was used which range from 1 – strongly disagree to 5- strongly agree See appendix A and B at the end of this thesis

Data Collection

Directly: The instruments used to gather data was hand delivered to the employees

identified for this study Research assistants were responsible for hand delivering and collecting the instruments and return to author for coding and analyzing

Indirectly: Email to the personal email of the participants who accept to take part in

this survey, but they can’t response the questionnaires immediately so that they want to response by email

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

Statistical Methods

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

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Using the SPSS to analyzing the data and make the data analyzing:

1- Testing reliability of scales by using Cronbach’s Alpha and Coefficient:

This was tested the Cronbach’s Alpha of each scale of each factor as well as the beta of the factor loading in the model Cronbach’s Alpha coefficient is a statistical test of correlation of the questions in the scale relative to each other So, with this method of analysis can remove inappropriate variables and limit junk variables in the research process and assess the reliability of the scale through the Cronbach Alpha coefficient Which variables have correlation coefficients of variables (Corrected Item-Total Correlation) less than 0.3 is disqualified and the scale Cronbach Alpha coefficient is 0.7 or more is selected

2- Exploratory Factor Analysis:

This is in order to explore the relationship between independent variables

Factor analysis is used when the KMO (Kaiser-Meyer-Olkin) value is greater than 0.7 and it is inadequate if less than 0.5 (Nancy L, Leech, Karen C Barret, GeorgeA Morgan, 2005), the transmission coefficient variables (factors loading) is less than 0.5 or the difference between the two factors less than 0.3 will be disqualified Stops Eigenvalue (representing the variance explained by each factor) greater than

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

3- Multiple regression analyses:

This is in order to test the relationship between the independent variables and dependent variable Linear Regression was run in order to compare different impact

of independent factors on dependent factor between the state sector and other sectors To test the role of the important factors in assessing the relationship between earning factors, working environment, and promotion opportunities, and employees' performance, we run the regression Analysis is done by the method

Multiple regression analyses was also run separately for two groups – state sectors and other sectors in order to compare the different effects on employees’ performance of three independent variables which are earning, working environment, and promotion opportunities

3.3 Conclusion

In this chapter an extensively outlined the research design, the population of the research, the procedure used to collect the data, addressed issues concerning confidentiality, the description of the measuring instruments adopted and statistical techniques (SPSS) employed to test the research hypotheses with three steps: Factors analyzing and scale reliability; Correlation analysis; Multiple regression analyses

Finally, the comparison about the effects of independent variables on dependent

variable between state sectors and other sectors was done in order to find out

differences

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Chapter 4 ANALYSIS OF DATA

4.1 Introduction

In chapter 3 the method research was introduced, in order to demonstrate that in chapter 4 an overview of the results obtained in the study are presented and discussed All questionnaires as mentioned in chapter 3 after collected from participants were tested and analyzed The descriptive and inferential statistics are presented here The alpha levels of 05 and 01 were selected a priori for test of significance for correlations, while the multiple regression analysis was tested at the 05 significance level For the analysis of variance all values were tested at the 01 significance level

The purpose of this chapter is to analyze the data from survey and find out information about earning, working environment, and promotion opportunities affect

on employees performance in general by running regression, and after that the Linear Regression will be run in order to compare differences of those factors affect on employees of the state sector and other sectors

4.2 Brief description of subjects

As mentioned in chapter 3 a pre-tested on a small sample (n = 30) of randomly selected employees in order to establish a high degree of reliability and that pre-tested had a good result, therefore the author of this research continued to do a survey This survey was conducted only in Ho Chi Minh City from 28 August 2012 until 03 November 2012, participants in the survey included employees in state sectors and other sectors

Total 280 questionnaires were delivered to potential participants in both direct and indirect ways There was 245 participants answered, and 205 questionnaires were used to analyze that reach 83.75 compare to the number of questionnaires collected Participants in this survey are variety in term of ages, educational levels, and genders

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in total 25 companies/sectors that could help to avoid bias which are Committee of Communist Party of HCM City, Agriculture bank, Viettinbank, NewPort corporation, NhaBe ship building company, Tran Dai Nghia high school, Transimex Saigon company, Saigon Beer company, Saigon Leather Joint - Stock company, Saigon Beverages Joint Stock company, Saigon Fishing Net Joint Stock company, Saigon Investment Consulting company, and etc In the next section information of analyzing data for each hypothesis will be presented

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 Variance if Item Deleted

Corrected Total Correlation

Item-Cronbach's Alpha if Item

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

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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

Reliability Statistics

Cronbach's Alpha N of Items

As the result of Cronbach’s Alpha of Working Environment is shown in the

table 4.2 above, it is (0.886) which larger than (0.8), and the Corrected Item-Total Correlation of Env1 = 0.759; Env2 = 0.733; Env3 = 0.748; Env4 = 0.673; Env5 = 0.691; Env6 = 0.625, all of those are larger than 0.3 Therefore, this variable is

accepted for Exploratory Factor Analysis later

Corrected Total Correlation

Item-Cronbach's Alpha if Item

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* Testing the reliability of Promotion Opportunities variable

Table 4.3 - Reliability Statistics of Promotion Opportunities variable

Reliability Statistics

Cronbach's Alpha N of Items

As the result of Cronbach’s Alpha of Promotion Opportunities is shown in the

table 4.3 above, it is (0.835) which larger than (0.8), but the Cronbach Alpha of Pro5 =

0.889 which larger than 0.835, and Corrected Item-Total Correlation of Pro5 = 0.313, therefore Cronbach Alpha of Pro5 is deleted Testing the reliability of Promotion Opportunities variable will as bellow:

Table 4.4 - Reliability Statistics of Promotion Opportunities variable with 4

factors

Item-Total Statistics

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

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

Reliability Statistics

Cronbach's Alpha N of Items

26

Item-Total Statistics

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

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)

There are 14 independent factors of 3 variables that have used to measure dependent variable – employees’ performance All of them had used Cronbach Alpha for testing reliability and have been accepted to be applied 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)