The effect of earning, working environment, and promotion opportunities on employees performance a comparison between the stat

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

UNIVERSITY OF ECONOMICS HO CHI MINH

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2012

UNIVERSITY OF ECONOMICS HO CHI MINH

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

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 thisprogram where I had great chances to work with professionals come from both internal andoversea, those professionals had to equip us – students of ISB not only knowledge, skills andexperience of economy and management, but also provide us valuable information of manyaspects of social life I also have got a very nice friendship with many interesting members ofthe 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 myresearch Supervisor Dr Nguyen Dong Phong, for his intensive support, valuable guidance andsuggestions; all professionals of the program, and all members of ISB for their enthusiasticsupporters during my whole course and the time of doing this research; my classmates, whohave shared with me both joys and difficulties during the course, encourage me so much indoing 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 instate 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 regressionanalyses were performed to separately analyze the effects on employees, employees in statesectors, and employees in other sectors The comparison of those effects also did between twogroups

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

environment and promotion opportunities positively influence employees’ performance Acomparison of the relative strengths of the effects reveals that in both state sectors and othersectors Earning has the strongest effect on employees’ performance, and in state sectors itaffects stronger than in other sectors The second is Promotion opportunities, and it also showsthat 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 maincomponents – labor and capital Capital is so important to the success of thesector/organization, while labor is essential to it The labor of the organization doeseverything 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 thesuccess of the organization; the vital thing is how this labor demonstrates itsknowledge 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 eachsector/organization such as leadership, earning, promotion opportunities, workingenvironment, employee employer relationship, leadership commitment, employeeinvolvement, and etc Each economic system contains a large number ofsectors/organizations, and inside each economy there are some differences such as thedifference number of state sectors and other sectors, etc Vietnamese is a developingeconomy which comprises variety kind of sectors such as foreign sectors, join sectors,private sectors, and public/state sectors Each kind of those sectors have contributedfairly to the economy, and they all have been considering be important to thedevelopment of the country All of those kind sectors could be divided into two groupswhich 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 sectorseems 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 economicsystem 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 thenature of each group, the state sector has some differences with other sectors, thereforeeach of them is affected by the same determinants but with different influences,different levels which should be analyzed and have a comparison Understanding themain determinants which affect employees’ performance in each group of sectors andfrom that has an adjustment for improving is vital to the success of each sector, itsleadership, and even its employees, especially with Vietnamese economy which ischanging 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 eachorganization in any field, including business In doing business today, one of thebiggest problems for Vietnamese sectors that have been discussed so much on media isproductivity of Vietnamese labor is low This problem is agreed by both Vietnamesegovernment officials and people And many foreign managers who have worked withVietnamese 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 problemcould relate to the motivation aspect that requires reasonable answer and solutions.Moreover, the fact in Vietnam is that not many managers consider carefully aboutfactors that motivate their employees in doing works, some of them may know how tomotivate 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 toperform better However, since Vietnam joined into World Trade Organization,especially during economic crises times the competition between Vietnamese productsand foreign ones is so hard in both the quality and the price of each product that requireVietnamese sectors have to enhance capacity in many aspects that include humanresource, and improving performance of employees is one important factor By

enhancing the productivity of each employee, as a result the quality of products couldimprove 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 employeesand implement reasonable policies to boost productivity are so important to eachmanagers for his/her sector(s) and for the whole Vietnamese economic system incompeting with foreigners In this study, earning, working environment and promotionopportunities will be investigated to find out their effect on employees’ performanceand compare the differences of those effects on state sectors and other sectors Thestudy also considers the relation of the three determinants in affecting on performance

Research objective

Objectives of this research are to determine how earning, workingenvironment, and promotion opportunities affect on employees’ performance, compareand discuss what those determinants impact differently on the state sector and othersectors in Vietnamese economic system

There has had number of studies about determinants affect on employees’performance worldwide such as Workplace Environment and Its Impact onEmployees’ Performance (Nowier Mohammed Al-Anzi, 2009); Earnings, andPerformance-Related Pay (Alison L Booth and Jeff Frank, 1999); Effects of Wage andPromotion Incentives on the Motivation Levels of Japanese Employees (KiyoshiTakahashi, 2006); Workplace Environment and Its Impact on OrganizationalPerformance in Public Sector Organizations (Chandrasekar, 2011); Impact ofWorkplace Quality on Employee’s Productivity: case study of a bank in turkey (DemetLeblebici, 2012) etc Even those, in Vietnam it seems that has not had any study thatcompared how those determinants impact the performance of employees between statesectors and other sectors, therefore this research will look at some previous researchabout earning, working environment, and promotion opportunities affect employees’performance, analyze the effect of those determinants on performance of employees inVietnam context and has a comparison and discussion in order to distinguishdifferences of how those factors affect on state sectors and other sectors Finding outthose 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 decidethe success or failure of the organization which they belong to by their ownperformance Understanding well main determinants in general and earning, workingenvironment, promotion opportunities in specific affect on employees’ performanceand recognize how those determinants affect on state sectors and other sectorsdifferently 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 toeach sector to improve performance of their employees, to enhance efficiency andeffectiveness of their firms Those are main reasons for doing this research

1.4 Methodology

This research will use quantitative approach The data will collect by surveyingemployees from state sectors and other sectors in Ho Chi Minh City use questionnaireprinted 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 Thequestionnaires 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 thedifferences between two groups about how employees’ performance is influenced bythree 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 inChapter 2 where hypothesizes and conceptual model are also introduced Chapter 3provides an in depth discussion of the research methodology used to investigate theresearch problem The design for the sample selection and size, research instrumentsused, procedures followed and the statistical techniques used to analyze the data is alsohighlighted Chapter 4 focuses on data analysis and the findings that became apparentfrom the research study The discussion of the results that were obtained in chapter 5where conclusions are drawn based on the obtained results and the possible practical

implications of the research findings The conclusion comes with somerecommendations for further researches.

Definition of working environment

Business dictionary defined work environment as Location where a task iscompleted When pertaining to a place of employment, the work environment involvesthe physical geographical location as well as the immediate surroundings of theworkplace, such as a construction site or office building Typically involves otherfactors 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 unlimitedcoffee, or adequate parking

When look at working environment should consider about its culture aspect aswhether it is a creative or conventional environment which is very important toproductivity of its staff

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 Jobpromotions usually include a new job title, a greater number of responsibilities and apay increase They might also include an expansion of benefits and managerialauthority over other employees Job promotions are usually base on performance ortenure

1.7 Delimitations of scope and key assumptions

This research undertakes in Vietnam which should be considered as aparticular economy - developing economy with the speed of changing so fast incomponent, etc, therefore the result of this research may not appreciate with othereconomy 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 keyterms were defined The chapter concludes with delimitations of the research

Chapter 2 LITERATURE REVIEW, HYPOTHESES

2.1 Introduction

There are number of determinants affect employees’ performance that hasdemonstrated in many studies worldwide Those determinants include from bothinternal and external of each sector/organization, and each individual employee, thosecould 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 determinantswhich have considering in previous studies to have a general knowledge about theireffect on employees’ performance and from that find out hypothesizes to build a modelfor analyzing Those three determinants are earning, working environment, andpromotion opportunities

2.2 Classification models of literature review

Author of this study has been searching many articles to find out determinantsaffect on employees’ performance, and from the searching there was rarely researcheslook 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 comparedifferences of determinants on state sectors and other sectors in Vietnamese economicsystem Therefore, this section will look at previous studies about earning, workingenvironment, and promotion opportunities affect on employees’ performance to seehow each single factor impacts on the performance of employees, and findinghypothesizes for analyzing and comparing

2.2.1 Earning and employees’ performance

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

A popular instrument is performance related pay (PRP), which may stimulatelabor productivity for two reasons “First, in situations of asymmetric informationabout worker’s abilities or effort a PRP-scheme can be used to induce workers to exertthe 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 workharder, and perform better to increase productivity of each employee and the wholeorganization

Normally, people in society come to work for benefits which combine two mainreasons, firstly they work for payments, and secondly they work for joy There are notmany people who work without benefits In most cases payments, especially extrapayments can affect the effort of employees in doing their jobs which induce higherperformance that lead to more productivity of each individual and the wholeorganization Individuals will exert effort if they expect it will result in an outcome thatthey 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 thoseawards will results from their increased efforts Reinforcement theory posits a directrelationship between a desired target behavior and its consequences It suggests thatpay can be used to create consequences for desired behaviors such as performance thatwill reinforce the behaviors (Perry, Mesch, and Paarlberg, 2006) However, paymentsare not always work well in all situations, it affects differently in different

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

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

Employees with stable jobs consider the importance of increasing wagedifferently compare to those with short-term, transitional career goals Wage increaseacts as a short-term incentive when employment relationships are unstable anduncertain (Kiyosh Takahashi, 2006) Therefore, the effect of earning/wage onperformance of employees in state sectors could be different with employees work inother sectors because people work in other sectors change their jobs more frequent thanthose 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 andsocial environments In working place people adhere to the environment surroundingthem which definitely affects to their productivity or performance Workplaceenvironment includes both physical and behavioral components which have both

positive and negative impact to productivity or performance of employees Theemployee’s workplace environment that most impacts on the level of employee’smotivation and subsequent performance How well they engage with the organization,especially with their immediate environment, influences to a great extent their errorrate, 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 asinteresting work which employees enjoy their working, opportunity to develop specialabilities that give employees to express and maximize their capacity, adequateinformation, enough authority, sufficient help and equipment, friendly and helpful co-workers, opportunity to see results of work, competent supervision, clearly definedresponsibilities are considered to be the job factors that motivates employeesperformance (Chandrasekar, 2011).

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

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

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

In short, it is widely accepted that both physical and behavioral factors havegreat 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 someonewhen he/she works well and has enough ability to hole a more important position in ahierarchy of an organization, and getting to higher positions could match target ofmany employees and satisfy their desire It is the recognition of employee efforts andhis/her commitment to work Getting higher and higher promotion is the ultimatedesire of each person working in any sort of organizations (Bilal Jamil NaintaraSarfaraz Raja, 2011)

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

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 andsome may not be so curious about that, therefore the effect of promotions toemployees’ 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 alsorequires the employee more responsibility to his/her organization If the employee isworking hard, addressing all tasks expected and performing beyond expectations, theyare deserved to get promotion, and therefore the employer may give the employee apromotion as a sign of excellence The promotion may indicate that the employee isready 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 employeeperformance review, as the employer may not have that option each time (Mary Jane,n.d) from http://www.ehow.com/info_7864603_employee-promotion-performance appraisal.html

Promotion incentive could inspire workers, especially who has abilities try theirbest to develop their knowledge and skills, to contribute more for their organization,and as a result this incentive benefits both employees and the organization Moretalented workers are usually more productive higher up in organizational hierarchies(Ministry of Business Innovation & Management, n.d) Promotions assign workers tojobs better suiting their abilities and quickly move up talented workers (Gibbons,1997) These are other purposes of promotions They can be used to reward pastemployee efforts, promote investments in specific human capital and lower jobturnover (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

requires recruits to accept lower paid port-of-entry jobs This early period ofemployment is a screening process Good performance leads to promotion According

to Savych (2005) when promotion ladders are used as deferred compensation, almostall junior workers who prove themselves are promoted The prospect of promotionencourages the good workers to stay and invest in specific human capital Job seekerswill self-select by limiting their applications to the type of jobs where they expect tosucceed and be promoted out of the less well paid port-of-entry jobs

In some cases, promotion opportunities could motivate employees better thanwages/income, especially in competitive environment The prestige of higher positionsrather than higher wages stimulates employees to work hard to win the competition(Kiyoshi Takahashi, 2006) Promotion should be considered as a long-term incentivethat is more effective on employees with stable jobs than those who change jobsfrequently In Vietnamese society, especially in government organizations promotionopportunities 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 theperformance and the relationship among those determinants in affecting employees’productivity, and the difference of those effects to employees of state sectors and othersectors Therefore, it is necessary to conduct a survey and run regression as followchapters in order to find out that information to help author of the research and readersunderstand clearly about those problems and apply to reality

Chapter 3 METHODOLOGY

3.1 Introduction

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

3.2 Research procedure

In this research, quantitative approach is used, the study employs the followingresearch methodology to investigate the impact of earning, working environment, andpromotion opportunities on performance of employees in Vietnamese context andcompare 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 dividedequally 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 ofquestions in the questionnaire, it reaches to minimum requirement

A questionnaire was designed under the advice of my supervisor and modifyfrom previous studies The questionnaire was used in this study employed three scalesdesigned to measure performance of employees namely earning, working environment,and promotion opportunities Questions about these three determinants borrow fromNguyen (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

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 isproduced in English and Vietnamese versions In the questionnaires a 5 points Likertscale was used which range from 1 – strongly disagree to 5- strongly agree Seeappendix 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 andcollecting 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 toresponse by email

Validation and pilot test of the instrument

To establish the highest degree of reliability, the jury-validated instrument waspre-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 significantdifference between the impact of those determinants on employees’ performance anddifferent 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:

This was tested the Cronbach’s Alpha of each scale of each factor as well as thebeta of the factor loading in the model Cronbach’s Alpha coefficient is a statisticaltest of correlation of the questions in the scale relative to each other So, with thismethod of analysis can remove inappropriate variables and limit junk variables inthe research process and assess the reliability of the scale through the CronbachAlpha coefficient Which variables have correlation coefficients of variables(Corrected Item-Total Correlation) less than 0.3 is disqualified and the scaleCronbach 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 than0.7 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 than0.5 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 Squaredloadings) 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 anddependent variable Linear Regression was run in order to compare different impact

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

Multiple regression analyses was also run separately for two groups – statesectors 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 ofthe research, the procedure used to collect the data, addressed issues concerningconfidentiality, the description of the measuring instruments adopted and statisticaltechniques (SPSS) employed to test the research hypotheses with three steps: Factorsanalyzing and scale reliability; Correlation analysis; Multiple regression analyses.Finally, the comparison about the effects of independent variables on dependentvariable between state sectors and other sectors was done in order to find outdifferences

Chapter 4 ANALYSIS OF DATA

4.1 Introduction

In chapter 3 the method research was introduced, in order to demonstrate that inchapter 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 weretested and analyzed The descriptive and inferential statistics are presented here Thealpha levels of 05 and 01 were selected a priori for test of significance forcorrelations, while the multiple regression analysis was tested at the 05 significancelevel 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 outinformation about earning, working environment, and promotion opportunities affect

on employees performance in general by running regression, and after that the LinearRegression will be run in order to compare differences of those factors affect onemployees 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 randomlyselected employees in order to establish a high degree of reliability and that pre-testedhad a good result, therefore the author of this research continued to do a survey Thissurvey was conducted only in Ho Chi Minh City from 28 August 2012 until 03November 2012, participants in the survey included employees in state sectors andother sectors

Total 280 questionnaires were delivered to potential participants in both directand indirect ways There was 245 participants answered, and 205 questionnaires wereused 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

in total 25 companies/sectors that could help to avoid bias which are Committee ofCommunist Party of HCM City, Agriculture bank, Viettinbank, NewPort corporation,NhaBe ship building company, Tran Dai Nghia high school, Transimex Saigoncompany, Saigon Beer company, Saigon Leather Joint - Stock company, SaigonBeverages Joint Stock company, Saigon Fishing Net Joint Stock company, SaigonInvestment Consulting company, and etc In the next section information of analyzingdata 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

ScaleVariance ifItem Deleted

Corrected TotalCorrelation

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

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 ExploratoryFactor Analysis later However, this Cronbach’s Alpha is larger than 0.9 means that theitems are repetitious (Nancy L, Leechn et al., 2005)

* Testing the reliability of Working Environment variable

Table 4.2 - Reliability Statistics of Working Environment variable

Corrected Item- Total Correlation

Cronbach's Alpha if Item

is accepted for Exploratory Factor Analysis later

* Testing the reliability of Promotion Opportunities variable

Table 4.3 - Reliability Statistics of Promotion Opportunities variable

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 4.3 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 PromotionOpportunities variable will as bellow:

factors

Table 4.4 - Reliability Statistics of Promotion Opportunities variable with 4

ScaleVariance ifItem Deleted

CorrectedItem-TotalCorrelation

Cronbach's Alpha ifItem 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 thoseare larger than 0.3 Therefore, this variable is accepted for Exploratory FactorAnalysis later

4.3.1.2 Testing the reliability of dependent variable Employees’ Performance

Table 4.5 - Reliability Statistics of Performance variable

Reliability Statistics

Item-Total Statistics

Scale Mean ifItem Deleted

ScaleVariance ifItem Deleted

CorrectedItem-TotalCorrelation

Cronbach's Alpha ifItem 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 forExploratory 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 measuredependent variable – employees’ performance All of them had used Cronbach Alphafor testing reliability and have been accepted to be applied for exploratory factoranalysis (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)

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Bartlett's Test of Sphericity

Approx Chi-Square 2122.832

dfSig

91.000

Eigenvalue > 1 The principal axis factor analysis with Varimax rotation wasconducted to assess the underlying structure for the fourteen items of employee’sperformance questionnaire Three factors were requested, based on the fact that theitems were designed to index three constructs: earning, working environment, andpromotion opportunities After rotation the first factors accounted for 26.762 of thevariance, the second factors accounted for 24.013, the third factors accounted for21.805 And 3 factors from 14 factors with Cumulative is 72.579% that is biger than50%, therefore it is acceptable

Total Variance Explained

Cum ula- tive

% Total

% of Va- rianc e

lative