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

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,

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
2


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 do 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


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
4


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,



implications of the

research

findings. The

conclusion comes

with some

recommendations for further researches.
1.6.

Definitions/concepts

Definition of employee
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 performance
“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.
Definition of earning
Earning is mentioned here should understand as earning of each employee. The
definition of earning as defined in Oxford dictionary is the money that you earn for the
work that you do. Earning can be the salary or wage, or benefits that you get from your
employer/company/organization.

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.


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
9


organizations,

and

the

amount

of


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 coworkers, 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

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


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.

14


WORKING
ENVIRONMENT

+H2
EMPLOYEES’
PERFORMANCE

PROMOTION

+H1

EARNING

+H3



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.
Sample
Before doing an official survey, a pilot test was conducted with 30 employees in
both state sectors and other sectors
The survey was conducted from May to November 2015. The population for
this study comprised employees in both state sectors/organizations and other
sectors/organizations in Ho Chi Minh City. A total 280 questionnaires were
administered to potential respondents chosen from this place. The number of
questionnaires was 280 that is not big, but enough, because in each questionnaire have
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

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

criteria variables with a significance level of

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
Reliability Statistics
Cronbach's Alpha

N of Items

.909

4

Item-Total Statistics


.898

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
22