(Luận văn thạc sĩ) 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’ 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 – INTRODUCTION .1 1.1 Background of the research 1.2.Research problem, research objective, and research questions 1.3.Justification for the research 1.4.Methodology 1.5.Outline of the report 1.6.Definitions/concepts 1.7.Delimitations of scope and key assumptions 1.8.Conclusion Chapter – LITERATURE REVIEW AND HYPOTHESES 2.1 Introduction 2.2 Classification models of literature review 2.2.1 Earning and employees’ performance 2.2.2 Working environment and employees’ performance .10 2.2.3 Promotion opportunities and employees’ performance 12 2.3 Conclusion 15 Chapter – METHODOLOGY 16 3.1 Introduction 16 3.2 Research procedure 16 3.3 Conclusion 20 Chapter - 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 – 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 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 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 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 enhancing the productivity of each employee, as a result the quality of products could improve and price could be reduced that help Vietnamese products have chances to win in competition Understand how factors and each factor affect on performance of employees and implement reasonable policies to boost productivity are so important to each managers for his/her sector(s) and for the whole Vietnamese economic system in competing with foreigners In this study, earning, working environment and promotion opportunities will be investigated to find out their effect on employees’ performance and compare the differences of those effects on state sectors and other sectors The study also considers the relation of the three determinants in affecting on performance of employees 1.2 Research problem, research objective, and research questions Research problem How earning, working environment, and promotion opportunities affect on employees’ performance? What are the differences of those impacts on the state sector compare to other sectors in Vietnamese economic system? 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 Research questions How earning, working environment, and promotion opportunities affect employees’ performance? How earning, working environment, and promotion opportunities affect employees’ performance differently between the state sector and other sectors in Vietnamese economic system? 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 Lazear, E(1998), Personnel Economics for Managers New York: John Wiley & Sons Mary Jane (n.d) Employee Promotion & Performance Appraisal, eHow Retrieved August 08, 2012 from http://www.ehow.com/info_7864603_employee-promotion-performance appraisal.html Ministry of Business Innovation & Management (n.d.), Seniority pay, promotions and older job seekers Retrieved 17 August 2012 from http://www.dol.govt.nz/services/lmi/workforce2020/ageing/seniority/seniority_06.asp Nancy L, Leech, Karen C Barret, GeorgeA Morgan (2005), “SPSS for Intermediate Statistics: Use and Interpretation Lawrence Erlbaum Associates (2 nd ed.) Mahwah, New Jersey London Nguyen Kieu Nga (2011) Factors affect employees’ loyalty in Esquel company in Vietnam Questionnaire of Master thesis submitted in University of Economics Ho Chi Minh City Nowier Mohammed Al-Anzi, (2009) Workplace environment and its impact on employees’ performance Project Paper Submitted in Partial Fulfillment of the Requirement for the Degree of Master of Business Administration Performance definition In online Business dictionary Retrieved March 29, 2012 from http://www.businessdictionary.com/definition/performance.html Promotion In online Investoperdia dictionary Retrieved Mach 31, 2012 prom http://www.investopedia.com/terms/p/promotion.asp#axzz1qi7SpLdS Perry, Mesch, and Paarlberg (2006), Motivating Employees in a new Governance Era: The performance paradigm Revisited, Public Administration Review 66(4): 505-14 Retrieved 29 July 2012 from http:/www.aspanet.org/scriptcontent/custom/staticcontent/t2pdownloads/ perryarticle.htm Van Eerde and Thierry (1996), Vroom’s Expectancy Model and Work-Related Criteria: A Meta- Analusis, Journal of Applied Psychology 81(5): 575-89 Savych, B (2005), Toward Incentives for Military Transformation A Review of Economic 45 Models of Compensation Santa Monica: Rand Corporation Retrieved 01 November 2012 from http://www.rand.org/pubs/technical_reports/2005/RAND_TR194.pdf Work environment In online Business dictionary Retrieved March 31, 2012 from http://www.businessdictionary.com/definition/work-environment.html 46 ANPPENDIX A Dear participant, I am a member of Master of Business in English of Economic University of Ho Chi Minh City At the present, I have been doing a research about determinants of employees’ performance: a comparison between state sectors and other sectors in Vietnam Please kindly share your own thinking on the issues given in this questionnaire All your ideas will help for the success of my research CONTENT OF THE QUESTIONNAIRE Please express the degree of your agreement with statements given below (Indentify your rating by circling the number) Rating scale: - Strongly disagree to - Strongly agree STT 1.1 1.2 Contend of questions Earning (Salary/income) Presence of salary that encourages better performance Working Environment My company organizes stable working time In my workplace, staff is equipped and provided enough equipment for doing their work 2.3 My workplace is safety and convenience 2.4 I receive support from colleagues so much 2.5 5 compensation system 1.4 2.2 Current income presence of attractive and competitive My company has transparent and equitable policy of salary 2.1 Presence of salary that reflects my performance 1.3 Your Rating Relationships between colleagues at my workplace are friendly and relaxed 47 2.6 My superiors encourage and helpe me in doing my work so much 3.1 3.2 3.3 3.4 3.5 Promotion oppotunities 5 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 Employees’ Performance 4.1 I believe I am an effective employee 4.2 I am happy with the quality of my work output 4.2 My manager believes I am an efficient worker 4.4 My colleagues believe I am a very productive employee My performance is better than that of my colleagues with 4.5 similar qualification Are you working for a state sector or another sector? State sector ; Other sector Thank you for your cooperation and contribution! 48 ANPPENDIX B BẢNG KHẢO SÁT Xin chào anh/chị, sinh viên Chương trình thạc sĩ Trường ĐH Kinh Tế TP HCM Hiện thực nghiên cứu nhân tố gồm thu nhập, môi trường làm việc, hội thăng tiến tác động đến kết công việc nhân viên Rất mong anh/chị dành thời gian thực bảng khảo sát bên Tất kiến anh/chị có ý nghĩa với thành công nghiên cứu PHẦN NỘI DUNG KHẢO SÁT Xin anh/chị vui lòng cho biết mức độ đồng phát biểu với quy ước: Đánh dấu chéo vào ô anh/chị lựa chọn: 1: Rất không đồng ý 2: Không đồng ý 3: Trung lập (khơng có ý kiến gì) 4: Đồng ý 5: Rất đồng ý STT 1.1 1.2 Nội dung câu hỏi Thu nhập (Lương) 5 công ty ngành 1.4 Mức lương khuyến khích tơi làm việc hiệu 2.2 Thu nhập có tính hấp dẫn cạnh tranh so với Cơng ty có sách lương rõ ràng cơng 2.1 Mức lương tương xứng với lực 1.3 Mức độ đồng ý Môi trường làm việc Công ty tổ chức thời gian làm việc ổn định Nhân viên cung cấp đầy đủ trang thiết bị hỗ trợ cho công việc 2.3 Nơi làm việc an tồn tiện nghi 2.4 Tơi nhận hỗ trợ nhiều từ đồng nghiệp 49 Mối quan hệ đồng nghiệp nơi làm việc thân thiện 2.5 2.6 thoải mái Cấp tơi khuyến khích giúp tơi thực công việc nhiều Cơ hội phát triển 3.1 Công ty có nhiều chương trình đào tạo & phát triển nhân viên 3.2 Tôi đào tạo kỹ cần thiết cho công việc 3.3 Công ty tạo nhiều hội cho học tập phát triển 3.4 Tơi có nhiều hội thăng tiến cơng ty 3.5 Hiệu suất làm việc 4.2 Tơi hài lịng với chất lượng/kết làm việc 4.5 5 nghiệp có trình độ, lứa tuổi tính chất cơng việc Tơi cho nhân viên làm việc hiệu 4.4 Tôi nhận đươc công hội thăng tiến so với đồng 4.1 4.2 Cấp đánh giá nhân viên làm việc hiệu Đồng nghiệp cho nhân viên làm việc hiệu Tôi làm việc hiệu so với đồng nghiệp có khả Anh chi vui lịng cho biết anh chị làm việc cho doanh nghiệp/tổ chức Nhà nước hay doanh nghiệp/ tổ chức khác? Nhà nước Khác Chân thành cảm ơn đóng góp anh/chị 50 ANPPENDIX C REGRESSION /MISSING LISTWISE /STATISTICS COEFF OUTS R ANOVA COLLIN TOL /CRITERIA=PIN(.05) POUT(.10) /NOORIGIN /DEPENDENT PER /METHOD=ENTER PRO PAY ENV /SCATTERPLOT=(*ZRESID ,*ZPRED) /RESIDUALS HIST(ZRESID) NORM(ZRESID) Regression [DataSet1] C:\Users\ADMIN\Desktop\data_option2.sav Variables Entered/Removed Model Variables Variables Entered Removed Method ENV, EARN, PRO Enter a a All requested variables entered b Model Summary Model R 765 R Square a Adjusted R Std Error of the Square Estimate 585 579 53715 a Predictors: (Constant), ENV, EARN, PRO b Dependent Variable: PER ANOVAb Model Sum of Squares df Mean Square Regression 81.660 27.220 Residual 57.996 201 289 139.656 204 Total a Predictors: (Constant), ENV, EARN, PRO b Dependent Variable: PER Coefficientsa 51 F 94.339 Sig .000 a Model Unstandardized Standardized Coefficients Coefficients B Std Error Collinearity Statistics Beta (Constant) 145 200 PRO 274 071 EARN 449 ENV 195 t Sig Tolerance VIF 729 467 253 3.886 000 487 2.054 056 466 7.982 000 607 1.648 064 175 3.038 003 625 1.600 a Dependent Variable: PER Collinearity Diagnostics a Variance Proportions Dimensi Model on Eigenvalue Condition Index (Constant) PRO EARN ENV 1 3.926 1.000 00 00 00 00 034 10.745 31 01 65 09 023 12.960 68 13 12 40 016 15.606 01 86 22 50 a Dependent Variable: PER Residuals Statisticsa Minimum Predicted Value Maximum Mean Std Deviation N 1.0634 4.7353 3.2410 63269 205 -1.92026 1.06026 00000 53319 205 Std Predicted Value -3.442 2.362 000 1.000 205 Std Residual -3.575 1.974 000 993 205 Residual a Dependent Variable: PER Charts 52 53 REGRESSION /SELECT=Type EQ /MISSING LISTWISE /STATISTICS COEFF OUTS R ANOVA COLLIN TOL /CRITERIA=PIN(.05) POUT(.10) /NOORIGIN /DEPENDENT PER /METHOD=ENTER PRO EARN ENV /SCATTERPLOT=(*ZRESID ,*ZPRED) /RESIDUALS HIST(ZRESID) NORM(ZRESID) Regression [DataSet1] C:\Users\ADMIN\Desktop\data_option2.sav Variables Entered/Removed Model Variables Variables Entered Removed ENV, EARN, PRO Method Enter a 54 Variables Entered/Removed Model Variables Variables Entered Removed Method ENV, EARN, PRO Enter a a All requested variables entered Model Summaryb,c R Model Type = DN Type ~= DN ngoai NN ngoai NN (Selected) (Unselected) 727 a Adjusted R Std Error of the Square Estimate R Square 797 528 511 58611 a Predictors: (Constant), ENV, EARN, PRO b Unless noted otherwise, statistics are based only on cases for which Type = DN ngoai NN c Dependent Variable: PER ANOVA Model Sum of Squares b,c df Mean Square Regression 32.307 10.769 Residual 28.856 84 344 Total 61.163 87 F Sig 31.349 000 a a Predictors: (Constant), ENV, EARN, PRO b Dependent Variable: PER c Selecting only cases for which Type = DN ngoai NN Coefficientsa,b Model Unstandardized Standardized Coefficients Coefficients B Std Error (Constant) 171 340 PRO 231 104 Beta Collinearity Statistics t 230 55 Sig .504 615 2.229 029 Tolerance 529 VIF 1.889 EARN 408 089 425 4.565 000 649 1.541 ENV 248 108 214 2.299 024 648 1.544 a Dependent Variable: PER b Selecting only cases for which Type = DN ngoai NN Collinearity Diagnostics a,b Variance Proportions Dimensi Model on Eigenvalue Condition Index (Constant) 1 3.921 1.000 00 00 00 00 037 10.259 28 02 64 08 025 12.402 35 59 31 05 017 15.328 37 39 05 87 a Dependent Variable: PER b Selecting only cases for which Type = DN ngoai NN Charts 56 PRO EARN ENV REGRESSION /SELECT=Type EQ /MISSING LISTWISE R ANOVA COLLIN TOL /CRITERIA=PIN(.05) POUT(.10) PER /METHOD=ENTER PRO EARN ENV /STATISTICS COEFF OUTS /NOORIGIN /DEPENDENT Regression [DataSet1] C:\Users\ADMIN\Desktop\data_option2.sav Model Summary R Type = DNNN Model (Selected) 799 a Std Error of the R Square Adjusted R Square 638 628 a Predictors: (Constant), ENV, EARN, PRO 57 Estimate 49903 ANOVAb,c Model Sum of Squares df Mean Square F Regression 49.586 16.529 Residual 28.140 113 249 Total 77.726 116 Sig 66.373 000 a a Predictors: (Constant), ENV, EARN, PRO b Dependent Variable: PER c Selecting only cases for which Type = DNNN Coefficients a,b Model Unstandardized Standardized Coefficients Coefficients B Std Error (Constant) 057 247 PRO 307 099 EARN 464 ENV 187 Collinearity Statistics Beta t Sig Tolerance VIF 233 816 266 3.086 003 431 2.321 073 480 6.353 000 561 1.783 084 169 2.243 027 564 1.774 a Dependent Variable: PER b Selecting only cases for which Type = DNNN Collinearity Diagnostics a,b Variance Proportions Dimensio Model n Eigenvalue Condition Index (Constant) PRO EARN 1 3.933 1.000 00 00 00 00 031 11.279 45 00 60 03 023 13.025 51 02 15 60 013 17.581 04 97 25 37 a Dependent Variable: PER b Selecting only cases for which Type = DNNN GET FILE='C:\Users\ADMIN\Desktop\data_option2.sav' SAVE OUTFILE='C:\Users\ADMIN\Desktop\data_option2.sav' /COMPRESSED 58 ENV 59 ... 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. .. performance This is accurate in both state sectors and other sectors The result showed that in all kinds of sectors (include state sectors and other sectors) earning affects on performance of employees. .. done, and it is as follow: 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