A STUDY TO ASSESS THE RELATIONSHIP OF PERFORMANCE-RELATED

PAY ON EMPLOYEES TOWARDS THE PERFORMANCE

OF THE ORGANIZATION, S.Y. 2014-2015

An Undergraduate ThesisPresented to the Faculty of College of Business Administration

Polytechnic University of the PhilippinesSta. Mesa, Manila

In Partial Fulfillment of the Requirements for the DegreeBachelor of Science in Business Administration Major in Human Resource

Development Management Minor in Service Management Program for Business Process Outsourcing

byGroup 3

FUENTES, Anne Rochel D.GADIL, Maria Danesa M.

GARCIA, Darwin M.

GRAJO, Norrycel B.

GUEVARRA, John Michael R.

HAMMOND, Micaela Marie D.

JAVELONA, Mark Jacobs T.

LABAY, Daphnee Gwynne I.

LANDICHO, Aira Jane R.

2015

Republic of the PhilippinesPolytechnic University of the Philippines

College of BusinessSta. Mesa, Manila

Group 3

Total Quality Management

Leader: Fuentes, Anne Rochel D.

Members: Gadil, Maria Danesa M. Hammond, Micaela Marie D.

Garcia, Darwin M. Javelona, Mark Jacobs T.

Grajo, Norrycel B. Labay, Daphnee Gwynne I.

Guevarra, John Michael R. Landicho, Aira Jane R.

RESEARCH TITLE:

A Study to Assess the Relationship of Performance-Related Pay on Employees

Towards the Performance of the Organization

STATEMENT OF THE PROBLEM:

This research study seeks to analyze the relationship of performance-related pay

on employees towards the performance of the organization.

SUB-PROBLEMS:

1. Are employees satisfied after they have been evaluated and are categorized into

performance groups?

2. What improvements have been made by the organization since the

implementation of performance-related pay?

3. Is there a significant relationship between the performance-related pay on

employees and performance of the organization?

RESEARCH OBJECTIVES:

1. To analyze the effects of performance-related pay to employees and

organization.

2. To identify if performance-related pay motivates employees on doing their job.

3. To investigate if implementing performance-related pay is a good or bad thing for

the organization.

RESEARCH HYPOTHESIS:

There is a high significant relationship between the performance-related pay on

employees and the performance of the organization.

CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Many different compensation practices are lumped under the name pay-

for-performance. We used to think of pay as primarily an entitlement. If

employees went to work and did well enough to avoid being fired, you were

entitled to the same size check as everyone else doing the same job as you.

Pay-for-performance plans signal a movement away from entitlement, sometimes

a very slow movement toward pay that varies with some measure of individual or

organizational performance.

Despite the omission, merit pay is still pay-for-performance used for more

than three quarters of all employees. Companies uses performance-related pay

scheme to encourage employees to work harder. The better employees or

teams, carry out works, the more the company or employer pays you. It is

believed that it is a way of rewarding employees for higher performance.

Employers introduce this type of scheme to keep current staff and sometimes

because of wanting to compete to a new talent, and lastly they may be seeking a

fairer way of distributing wages. In order for performance related schemes to

work they should be based on clear, measurable targets that are agreed by both

the employer and employees.

Performance-related pay is a method of remuneration that links pay

progression to an assessment of individual performance, usually measured

against pre-agreed objectives. Pay increases awarded through performance-

related pay as defined here are normally consolidated into basic pay although

sometimes they involve the payment of non-consolidated cash lump sums.

It has grown in prominence since the 1980’s as employers have

increasingly sought effective ways of driving high performance levels by linking

employee reward to business objectives. However, it has proved in some

circumstances a rather crude instrument and the 1990s and beyond witnessed a

number of challenges to the theory. As some of the earlier schemes failed to

deliver the promised results, some employers brought in new or revised

performance-related pay schemes or moved to new approaches altogether while

others have developed hybrid schemes.

In the current debate on the issue of merit pay for teachers and

government employees, one frequently hears the lament: “If only we could

measure results e ay business does. Then we could pay for performance instead

of mere seniority!” This statement assumes that business actually has a rational

system of paying according to performance. The truth is business merely acts

and talks as if it does.

Formal merit-pay programs are a relatively recent phenomenon. In the

past it was common for a firm to pay a fixed wage or salary based primarily on

market supply-and-demand factors. Top management made all the major

decisions and took the risks. White-collar employees were few in number and,

although better educated than their blue-collar counterparts, had scarcely any

decision-making authority and were readily replaceable. Salary increases were in

frequent and highly discretionary; however, they were not arbitrary. Most

businesses were small, and top managers knew who was doing a god job and

who wasn’t. If the firm was making money, there might be a bonus or a pay raise,

but for every employee the boss made an informed judgement. As businesses

grew and became more complicated, it became impossible for top management

to make sound decisions about the worth of subordinates several rungs lower.

Yet, realizing that such decisions had to be made, various objective systems

designed to decide performance and pay questions evolved.

With the increase in professional management over the past 30 years and

its emphasis on good employee relations, merit-pay programs have spread to the

point where most firms would be embarrassed if their policy manuals, business

plans, and annual reports did not include statements stressing the link between

determined by a merit-pay system, according to a study of the Bureau of National

Affairs (BNA). Unfortunately, broad-scale merit-pay programs simply do not work.

Money becomes important insofar as it can satisfy recognized needs. If

different needs are, in fact, prepotent across individuals, this information could be

used to design a pay-for-performance system.

Given that money can satisfy at least a subset of basic needs, the

question now becomes should salary increases be based on level of

performance? Substantial evidence exist that management and workers alike

believe that pay should be tied to performance. Numerous studies indicate that

tying pay to performance has a positive impact on employee performance. A

common type of study is to introduce an incentive system and observe whether

workers, whose pay is now directly dependent on level of output, increase their

level of performance. Several studies indicate that introduction of an incentive

system results in higher performance than occurs for workers receiving hourly

pay.

Background of the Study

The researchers are students of Polytechnic University of the Philippines

under Bachelor of Science in Business Administration Major in Human Resource

Development Management Minor in Service Management Program for Business

Process Outsourcing. Since they are future human resources managers, the

researchers decided to come up with this study in order to identify or know the

best way to motivate the employees and what would make them perform

excellent that would satisfy them in return.

It has been said in several theories from psychology that the linking of pay

to performance should lead to increased performance. In such order, payment

and performance when linked with motivation will increased the performance of

employees. The performance of the organization as a whole.

Today’s competency in the business industry is crucial to survive. One’s

organization must know how to value every great performance given by the

employees. However, some of the employees don’t give equal or higher

performance than other employees in the organization. That is the reason why

we came up with pay-related performance which will show that there is a clear

difference between ordinary and extra ordinary performance. It will also show if it

motivates employees in performing better. In such way, we will know what the

performance of the organization and if it is ready and will survive the

competency.

In this study, we choose Teleperformance to be the respondent of our

study. Teleperformance is a global company, worldwide leader in multichannel

customer experience. The company is specialized in customer service, technical

support, call center, debt collection and social media.

Teleperformance is the only one capable among the companies we’ve

gone through in providing us the demand of the study being conducted. They

agreed on letting us take our survey in their company. Another reason is that,

Teleperformance has a multiple number of employees which we are looking for

to achieve the accuracy of the result of the research to be conducted. Providing

the stated reason, we come up to the decision of having Teleperformance as the

respondents of our study.

Theoretical Framework

In order for an employee to perform his job well, one must be motivated to

do so. This section tends to explain how motivation theories will be a guide for

the researchers in the development in their study.

One of the first theories of motivation which can be used in relation to our

study is expectancy theory. This theory was developed by Victor Vroom (1964)

and has been refined by any authors, including Porter and Lawler (1968), since

1964. According to expectancy theory, motivation, or the force to act, results from

conscious, decision-making process undertaken by individual. And also,

individual motivation to put forth more or less effort is determined by a rational

calculation. It is said in this theory that there are three questions that individuals

must ask themselves.

Figure 1

Vroom’s Expectancy Theory

The first question is whether the person believes that high levels of effort

will lead to desired outcomes. This perception is labeled as expectancy which

refers to the individual’s perception that a certain level of effort is required to

achieve a certain level of performance. For example, do you believe that the

effort you put forth in a class is related to learning worthwhile material and

receiving a good grade? If you do, you are more likely to put forth effort.

The second question is the degree to which the person believes that

performance is related to secondary outcomes such as rewards. This is labeled

ass instrumentality which is a perception that the strength of the belief that a

certain level of performance will be associated with various outcomes. For

example, do you believe that passing the class is related to rewards such as

getting a better job or gaining approval from your instructor, from your friends or

parents? If you do, you are more likely to put forth effort.

Finally, individuals are also concerned about the value of the rewards

awaiting them as a result of performance. The anticipated satisfaction that will

result from an outcome is labeled as valence. For example, do you value getting

a better job or gaining approval from your instructor, from your friends or

parents? If these outcomes are desirable to you, you are more likely to put forth

effort.

Conceptual Framework

This section will describe the concept that will be used for conducting the

research. It is conceptualized and developed by the researchers using their own

knowledge and ideas. This concept illustrates how performance-related pay

impacts employee performance for the organization and motivation to work well

to boost productivity and loyalty in every employee to the company.

Statement of the Problem

The study aims to determine the relationship between the performance-

related pay on employees and the performance of the organization

Specifically, this study seeks to answer the following research questions:

4. Are employees satisfied after they have been evaluated and are categorized into

performance groups?

5. What improvements have been made by the organization since the

implementation of performance-related pay?

Employee Effort

ExpectationRewardsRecognition

Benefits Satisfaction

Dissatisfaction

High

Performance

Low

Performance

6. Is there a significant relationship between the performance-related pay on

employees and performance of the organization?

Statement of the Postulate Hypothesis

There is a high significant relationship between the performance-related

pay on employees and the performance of the organization.

Significance of the Study

The study is focused on how performance-related pay scheme creates an

impact on employees toward their performance in the organization and how the

company retains their employees and maintains a high productive performance

of each and everyone. Each one of the employee can make the career of the

company down, that is why they always have their own ways of how to maintain

and retain their employees, how to make them happy and satisfied. The result of

this study will tell if performance-related pay scheme is a better strategy for te

employees and also for the organization.

Hence, this study will be of great help to the following:

To the students. This study will serve as additional information especially

to management students in identifying or determining whether it is much better to

use performance-related pay as a strategy to improve and motivate performance

of individual as they enter real world.

To the researchers. This study will determine the relationship between

the performance-related pay on employees towards their performance and how it

affects the organization’s productivity and will serve as a further material on

determining satisfaction of employees in a certain way.

To the future researchers. This study will be an effective instrument and

reference for the researchers who will intend to make any further significance

study particularly in the performance-related pay on employee strategy towards

the performance of organization

To the other distributor companies in the industry. This study may

serve as a foundation or knowledge in identifying if performance-related pay

would satisfy their employees, if that would motivate them and would make them

loyal, and make them to retain or stay with your company and unleash a

productive job well done in every employee. This will serve as an idea on how

motivated employee becomes a big help or factor on boosting company’s career

success and competitiveness through their performances. This study will let the

organization know what things or components are missing in their company that

makes their employees unhappy so they can change it.

To the HR Practitioners/Managers. This study will help those HR

Practitioners choose the best method that would meet the employee’s

preferences/needs and wants in order to retain, make them happy and

contented. It would help the employee’s work motivated and have a high quality

performance. This will also help HR’s to better observe what satisfies employees

and what are not. This will help them know and be knowledgeable enough to

make certain of what is needed, what they really want and what is important.

With this study, HR will know that a motivated employee that receives preferred

or satisfactory benefits shows good performance that results to a high quality of

service to the company that can help company’s productivity and that will help

them sell their products and would make and attract their customers trust and

appreciate their efforts.

Scope and Limitation of the Study

This study will help to determine the relationship between performance-

related pay on employees and their performance. The study will be confined to

the employees of the said company.

The company consists of 195 employees as the total population of this

study. 131 employees or 67.18% from the total population are randomly selected

using slovin’s formula to become the respondents which will be covered by this

study.

Definition of Terms

To have a better understanding for this study, the following terms were

defined conceptually.

Expectation. Something that someone assumes to have, give, or aim.

Job Performance. The overall expected value from employees’

behaviors carried out over the course of a set of period of time.

Labor. The services performed by workers for wages as distinguished

from those rendered by entrepreneurs for profit.

Merit Pay. A compensation system that directly ties an individual’s salary

or wage increase to measures of performance accomplishments during a

specified time period.

Motivation. A force or influence that causes someone to do something.

Payment. Something that is given to someone in exchange for something

else like in exchange for the work or service a person does.

Productivity. A measure of the efficiency of a person, machine, factory

system, etc., in converting inputs into useful outputs.

Profit. A financial benefit that is realized when the amount of revenue

gained from a business activity exceeds the expenses, costs and taxes needed

to sustain the activity. Any profit that is gained goes to the business’ owners who

may or may not decide to spend it on the business.

Reward. To give money or another kind of payment to someone or

something for something good that has been done.

CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

Presented in this chapter is a discussion of the different variables from

different sources both from local and foreign literature and studies. This review

enabled the researchers to enrich and broaden their knowledge of the topic

under the study. These materials also helped significantly in validating basic

assumptions. These are integrated to show their relationship to the problem.

Foreign Literature

Pay often can be used to motivate employee performance. But a pay plan

also must (1) create the belief that good performance leads to high levels of pay,

(2) minimizes the negative consequences of good performance (in which you do,

the more they give you to do), and (3) create conditions in which rewards after

that pay are seem to be related to good performance. These three conditions

follow from expectancy theory of motivation, which states that individuals will be

continued to seek goals they value and can attain.

Managers use numerous methods to their attempts to relate pay to

performance. One survey of personnel practices reported high dissatisfaction

with pay plans. Many pay plans are disliked because they are implemented

poorly or because they are not well suited for a particular job.

Incentive pay plans can be rated on three separate criteria. First, each

plan can be rated in terms of its effectiveness in creating the perception that pay

is tied to performance. Second, pay plans can be evaluated in terms of their

success in minimizing negative side effects, such as disruptive competition,

conflict, and grievances. Third, each plan can be rated in terms of whether it

contributes to the perception that important rewards other than pay (e.g., feelings

of esteem and increased responsibility) result from high performance.

The six basic plans are straight salary on (1) individual, (2) group, and (3)

organization-wide bases. Moreover, salary and salary-plus-bonus plans can be

based on different performance measures. For example, an individual’s salary or

salary-plus-bonus plan can be based upon his or her productivity, cost-

effectiveness, or superior’s rating. Similar performance measures are applicable

to group-based salary and salary-plus-bonus plans. Organization-wide salary and

salary-plus-bonus plans can be based on productivity and cost-effectiveness, but

also upon profits. Thus, when these three performance measures are linked to

the six basic pay plans, 18 different variations are possible. Each of these 18

variations can range from very effective (+3) to very ineffective (-3) in relation to

each of the three criteria.

The most effective plan for producing the perception that pay is in fact

related to performance is the individual salary plus bonus based upon

productivity. However, this same plan is least effective in minimizing negative

side effects. Highly productive employees often are ostracized by their fellow

employees for being rate-busters. Thus, as is the case of many other managerial

practices, the alternative that is most effective for one purpose is least effective

for other purposes. Clearly, the choice of pay plan involves compromise, and the

direction of the decision will be affected by factors specific to a situation,

including the relative case of developing valid performance measures.

In many situations, it is difficult to develop valid, equitable, and acceptable

measures of performance. Therefore, it is hard to relative pay to performance.

For example, measures of college teaching effectiveness are quite controversial.

No widely accepted, objective performance measurement technique exists,

although subjective peer or student evaluations are often used.

In other situations, too much emphasis may be placed on objective measures of

performance. If objective measures only are used in determining pay increases,

the employee may emphasize only these and disregard others that are also

important. Management must balance its objective and subjective performance

evaluations. Another important issue involved in tying pay to performance is that

of amounts. Motivating high performers may cost a lot of money. A company that

cannot afford large increases may not want to use pay motivate exceptional

performance. Moreover, some individuals are not motivated by even large

increases in pay. Management should determine what value employees place on

pay before tying pay increases to improved performance (Ivancevich, Donnelly,

and Gibson, 1986).

The motivation theories and job design approaches discussed in the last

two chapters all deal, in one way or another, with the rewards people get from

their work and how these rewards impact performance. Now it is time to discuss

how these multiple ideas and perspectives can be linked together in a context of

performance management.

Whether or not a work setting proves motivational for a given individual

depends on the availability of rewards and their perceived value. Note the

importance of performance contingency and immediacy in determining how

rewards affect future performance. Note also that content theories are useful in

the model as guides to understanding individual attributes and identifying the

needs that give motivational value to the possible rewards. When the individuals

experiences valued rewards for works performance, motivation should be directly

and positively affected. Motivation should also occur when job satisfactions

results from rewards that are perceived to be equitable. When felt negative

inequity results, satisfaction will be low, and motivation will be reduced.

The typical reward systems of organizations emphasize a mix of intrinsic

and extrinsic rewards. Intrinsic rewards are positively valued work outcomes that

the individual receives directly as a result of task performance; they do not

require the participation of another person or source. It was intrinsic rewards that

were largely at issue in the concept of job enrichment discussed in the last

chapter. The expectation is that high “content” jobs, in terms of two-factor theory,

or jobs high in “core characteristics” will create many intrinsic rewards. A feeling

of achievement after completing a particularly challenging task in a job designed

with a good person-job fit is an example.

Extrinsic rewards are positively valued work outcomes that are given to an

individual or group by some other person or source in the work setting. They

might include things like sincere praise for a job well done or symbolic tokens of

accomplishment such as “employee-of-the-month” awards. Importantly too,

anything dealing with compensation, or the pay and benefits have to be well

managed in all aspects of the integrated model for their motivation value to prove

positive in terms of performance impact.

Pay is not only important as an extrinsic rewards; it is an especially

complex one. When pay functions well as a reward in the integrated model, it can

help an organization attract and retain highly capable workers. It can also help

satisfy and motivate these workers to work hard to achieve high performance.

But similarly, any dissatisfaction with pay can also generate negative effects on

motivation and performance. Pay problems sometimes are associated with bad

attitudes, grievances, absenteeism, turnover, poor organizational citizenship, and

even adverse impacts on employees’ physical and mental health.

The research of scholar and consultant Edward Lawler generally

concludes that for pay to serve as motivator, high levels of job performance must

be viewed as the path through which high pay can be achieved. A survey by the

Hudson Institute, however, shows that this is more easily said than done. When

asked if employees who do better get paid more, a sample of managers

responded with 48 percents agreement; only 31 percents of non-managers

indicated agreement. And when asked if their last pay raise had been based on

performance, 46 percent of managers and 29 percent of non-managers said yes.

It is most common to talk about pay for performance in respect to merit

pay, a compensation system that directly ties an individual’s salary or wage

increase to measures of performance accomplishments during a specified time

period. Although research supports the logic and theoretical benefits of merit pay,

it also indicates that the implementation of merit pay plans is not as universal or

as easy as might be expected. In fact, surveys over the past 30 or so years have

found that as many as 80 percent of respondents felt that they were not

rewarded for a job well done.

To work well, a merit pay plan should create a belief among employees

that the way to achieve high pay is to perform at high levels. This means that the

merit system should be based on realistic and accurate measures of individual

work performance. It also means that the merit system is able to clearly

discriminate between high and low performers in the amount of pay increases

awarded. Finally, it is also important that any “merit” aspects of a pay increase

are not confused with across-the-board “cost-of-living” adjustments.

Merit pay plans are just one attempt to enhance the positive value of pay

as a work reward. But they are subject to criticisms. For example, merit pay plans

may cause problems when they emphasize individual achievements and fail to

recognize the high degree of task interdependence that is common in many

organizations today. Also, merit pay systems must be consistent with overall

organization strategies and environmental challenges if they are to be effective.

For example, a firm facing a tight labor market with a limited supply of highly

skilled individuals might benefit more from a pay system that emphasizes

employee retention rather than strict performance results. With these points in

mind, it is appropriate to examine a variety of additional and creative pay

practices. Another way to link pay with performance accomplishments is through

gain sharing. Such a plan gives workers the opportunity to earn more by

receiving shares of any productivity gains that they help to create (Schermerhorn

Jr., Hunt, and Osborn, 2008).

Do you believe that money is motivator for the people who report to you?

Can wages be effective as motivational tools? Would you still work if you did not

need the monetary rewards? In the United States, historically, most individuals

would answer yes to that question. So, if money is not the main reason you go to

work, what does motivate you? Each of you undoubtedly came up with a

somewhat different answer to that question, which is why a discussion on theory

of pay as a motivational tool can become so complex. Once the basic individual

needs in each of us met, there is no single source of satisfaction that will

motivate all of us.

Historically, wage rates were structured to reward the employees with the

highest skill levels with the higher wages. Oftentimes, the level of skill required by

the job was determined to be more important. To motivate and retain our

valuable employees, hospitality organizations are trying to develop methods of

determining who should be and should be not rewarded. Many of these programs

are founded upon the idea of basing rewards on the level of performance each

person obtains along with the value of that performance level to the overall

success of the hospitality enterprise. Those that contribute the most to the

achievement of the organizational goals and operational objectives are

compensated with the largest reward. Those who do not make a significant

contribution to the organization’s success receive a proportionately lesser

reward. It is in pay-for-performance compensation that pay has its greatest

influence as a motivator. People usually like to know what they can expect in

return for their level of performance. In such a system, the staff knows what to

expect regarding the level of effort that they must achieve in order to receive a

desired outcome or reward. Rewards serve to motivate performance by satisfying

the needs of our employees that relate to work.

Some of the long-standing customs regarding pay structures in the

hospitality industry will be changing as employees continue to become

increasingly scarce. Historically, wage rates were structured to rewards the

employees with the highest skill levels with the higher wages. Oftentimes, the

level of skill required by the job was determined to be more important (i.e., higher

wage) than the contribution of the particular job to the achievement of the

operation’s objectives. In “the next chapter” there will be less disparity in

compensation among unskilled, semiskilled and skilled employees. More

important than level of skill will be the level of the performance.

To motivate and retain our valuable employees, hospitality organizations

are trying to develop methods of determining who should be and who should not

be rewarded. Many of these programs are founded upon the idea of basing

rewards on the level of performance each person obtains along with the value of

that performance level to the overall success of the hospitality enterprise. Those

that contribute the most to the achievement of the organizational goals and

operational objectives are compensated with the largest reward. Those who do

not make a significant contribution to the organization’s success receive a

proportionately lesser reward.

It is in pay-for-performance compensation plans that pay has its greatest

influence as a motivator. People usually like to know what they can expect in

return for their level of performance. In such a system, the staffs know what to

expect regarding the level of effort that they must achieve in order to receive a

desired outcome or reward. Rewards serve to motivate performance by satisfying

the needs of our employee’s that relate to work.

For compensation to be effective as a motivator, your employees must

believe that good performance will lead to greater pay, and at the same time, that

minimal performance levels will not be rewarded. Too often in traditional

compensation plans, the employees perceive that no one recognizes extra effort

and that even marginal performance levels will receive the same percentage pay

increases each year. This will depend upon your merit budget and whether or not

management can distinguish between good and bad performance and reward as

such.

A pay-for-performance system is based upon established performance

goals that are designed to be challenging, but obtainable. Here, risk taking is

encouraged through a non-punitive appraisal process that is based upon both

quantitative and qualitative performance measures. This approach tends to foster

both creativity and team spirit among your people. In addition, programs have

been found to increase productivity levels. Although it is appealing to most

people to believe that their pay is tied directly to their performance, there can be

problems in implementing pay-for-performance plans. The major obstacle for

most hospitality organizations, especially those with several decentralized levels

of management, is the difficulty in accurately and objectively linking pay levels to

performance. In addition, pay-for-performance plans must be clearly

communicated to your employees, or those plans lose their effectiveness (Tanke,

2001).

Ideally, management’s strategy for the organization should be a critical

determinant of the features and operations of the pay system. For example,

managers may have the goal of maintaining or improving profitability or market

share by stimulating employee performance. Thus, they should design and use a

merit pay system rather than a system based on other criteria such as seniority.

As another example, managers may have the goal of attracting and retaining

desirable employees. Here they can use a pay survey to determine competitive

wages in comparable companies and adjust pay rates to meet or exceed the

going rates.

Skill-based pay systems are becoming increasingly popular in both large

and small companies, including Nortel, au Bon Pain, and Quaker Oats.

Employees with higher skill levels receive higher pay than those with lower skill

levels. At Quaker Oats pet food plant in Topeka, Kansas, for example,

employees start at $8.75 per hour but can reach a top hourly rate of $14.50 when

they master a series of skills. Also called competency-based pay, skill-based pay

systems encourage employees to develop their skills and competencies, thus

making them more valuable to the organization as well as more employable if

they leave their present job. Thus, these systems work well within the context of

the changing nature of careers and working relationships discussed earlier in this

chapter. In addition, skill-based pay helps the organization be more flexible and

adaptable to changing needs from the environment.

Another approach to establishing wage or salary rates, which has been

widely used in the past, is job-based pay. With job-based pay, compensation is

linked to the specific tasks that an employee performs. Although job-based pay

systems still are used by some companies, they do present some problems. For

one thing, job-based pay may fail to reward the type of learning behaviour

needed for the organization to adapt and survive in today’s rapidly changing

environment. In addition, these systems reinforce an emphasis on organizational

hierarchy and centralized decision making and control, which are inconsistent

with the growing emphasis on employee participation and increased

responsibility (Daft, 2000).

The idea behind skill-based pay (also called pay for knowledge) is to

motivate employees to learn a wide variety of work tasks, irrespective of the job

that they might be doing at any given time. The more skills that are acquired, the

higher the person’s pay. Companies use skill-based pay to encourage employee

flexibility in task assignments and to give them a broader picture of the work

process. It is especially useful on self- managed teams, in which employees

divide up the work as they see fit. It is also useful in flexible manufacturing, in

which rapid changes in job demands can occur. Training costs can be high with a

skill-based system. Also, when the system is in place, it has to be used.

Sometimes, managers want to keep employees on a task they are good at rather

than letting them acquire new skills. However, skill-based programs can have

positive consequences. If the use of money as a motivator is primarily an attempt

to capitalize on extrinsic motivation, current approaches to using job design as a

motivator represent an attempt to capitalize on intrinsic motivation. In essence,

the goal of job design is to identify the characteristics that make some tasks more

motivating than others and to capture these characteristic in the design of job.

Alternative working schedules as motivators for a diverse Workforce. The

purpose of these modifications is not to motivate people to work harder and thus

produce direct performance benefits. Rather, the purpose is to meet diverse

workforce needs and promote job satisfaction. In turn, this should facilitate

recruiting the best personnel and reduce costly absenteeism and turnover (Johns

and Sacks, 2008).

PRP aims to provide a flexible and cost-effective means of distributing

rewards fairly between the good and poorer performers while also contributing

towards improved organization performance. Moreover it is based on principles

to which most people, employees as well as managers, seem to adhere. Most of

us are very happy to see individuals rewarded for superior performance and/or

effort and would like payment decisions to be based on such criteria. The

problems arise when attempts are made to put the principles into practice. A

system which is fair and objective in theory can easily fail to achieve these

objectives when implemented (Brown and Armstrong, 2000).

Level of pay and pay system characteristics influence a job candidate’s

decision to join a firm, but this shouldn’t be too surprising. Pay is one of the more

visible rewards in the whole recruitment process. Job offers spell out the level of

compensation and may even include discussions about the kind of pay such as

bonuses and profit-sharing participation. Less common are statement such as

“You’ll get plenty of work variety,” or “Don’t worry about empowerment,” or “The

workload isn’t too heavy.” These other rewards are subjective and tend to require

actual time on the job before we can decide if they are positive or negative

features of the job. Not so for pay. Being perceived as more objective, it’s more

easily communicated in the employment offer (Milkovich, Newman and Gerhart,

2011).

Local Literature

The maintenance function that is most sensitive to conceptualize and

operationalize is compensation administration. The pay and benefits a worker

receives are a yardstick of how adequately his needs, even including some non-

material ones, are met either directly or indirectly. To a great extent, his

purchasing power sourced from his job emoluments determines the type, level

and extent of physical amenities, safety, security, affiliation, status he can

procure and enjoy for himself, his family and those he is responsible for.

Compensation is a denominator of productivity and job worth. The question that

strikes many a worker when asked to engage himself in any work activity and

para-work assignments, “What’s in it for me?” usually baffles, if not piques, a

management that can not understand the ultimate meaning that the actual take

home pay carries for the worker. The life’s accoutrements that he needs in the

midst of high cost of living make the reward system a matter for serious

consideration. Its implications also to the organization and to the nation should

moreover be recognized by a rational management.

Based on content of the package, rewards are either intrinsic or extrinsic.

Intrinsic rewards are those related to the job itself like the motivators of Herzberg

while extrinsic rewards refer to the components outside the job like pay. Robbins

classifies extrinsic rewards as direct, indirect and non-financial compensation.

Intrinsic rewards include worker’s involvement in decision-making, greater

job freedom and discretion, more responsibility, interesting and challenging work,

opportunities for personal growth and diversity of activities. These emanate from

the job itself and Herzberg calls them the motivators.

Under extrinsic rewards, “the most obvious form . . . and the one that is

probably responsible for more gossip and disgruntlement than any other, is direct

compensation.” This classification includes basic salary or wage, overtime and

holiday pay, performance bonuses, profit sharing and stock options. Robbins

defines stock options as “rights to purchase stock at a specified price at some

later time.” Pensions, retirements pay and business partnership can be added to

this rubric. Indirect compensation covers protection program, pay for time not

worked, services and perquisites. Protection programs may come in the form of

safety and security plans like insurance, tenure, security guards, burglar alarms

and the like. When a worker goes off earlier than prescribed time for some very

pressing matter, and during floods, typhoons and snack time he enjoys “no salary

deductions” and thus is paid for time not worked. This is usually an internal

matter between him and his supervisor. Examples oof services and perquisites

are scholarship, non-formal training programs, tution refunds for educational

courses, bus service, car and gasoline allowances, gear, health and safety plans,

day care centers for worker’s children, credit unions, discounts for goods and

services provided by the organization and its “sisters”, social, cultural and

recreational events and club membership, counseling services and legal service.

Benefits, programs and services have been considered maintenance factors

since they are given to everybody and are not contingent on performance.

Fringe benefits which employers provide run the gamut of pay of various

kinds for rest periods, holidays, vacations, sick leaves, leaves of absence,

paternity and maternity leaves, bereavement leave, insurance for life, health,

accident, workmen’s compensation coverage. These fall under the rubric of

indirect compensation.

Non-financial compensation also takes various forms like those appearing

in the structure of rewards. Unlike indirect compensation, this consists of material

and physical accoutrements. Office furnishings attuned to one’s artistic sense but

within the means of the organization; lunch hours that give ease in driving

through and in fulfilling after lunch hour engagements; parking space that is

physically convenient; work assignments that are in consonance with one’s

abilities, interests and work hours; a secretary not shared with other executives

helping accomplish programs and project more speedily. Other incentives in this

category enjoyed by Filipino executives include personalized stationery, name

signs on office door and table, etc. (Concepcion, 2008).

Rewards that are used to compensate employees for their efforts may be

classified into three types. They are pay, incentive, and benefits.

Pay, also known as base salary, refers to standard salary that an

employee receives for doing a job. Every regular employee in an organization is

assured of this form of compensation.

Incentives are rewards given to employees for performing beyond the

standard requirements. This is normally given apart from the base salary. It is

expected that only a portion of the total number of employees will be entitled to

this form of compensation. Benefits are rewards given to an employee or group

of employees for maintaining membership in the organization.

The rate of employee compensation is influenced directly or indirectly by a

combination of internal and external factors. The external factors that may affect

the determination of rewards consist of labor market conditions, area wage rates,

cost of living, and collective bargaining. Labor Market Conditions. The price of

any commodity, including labor, depends much on supply and demand. When

there is an oversupply of labor, wage rates tend to be lower. Supply, however,

cannot be referred to labor in general because not all segments of the labor force

are in the same supply situation. Some professions like nursing and teaching

may be in short supply but this may not be true with others.

The oversupply of unskilled and semi-skilled labor in the Philippines push

wage rates of these segments to the lowest possible levels. The only forces that

prevent wage rates from going even lower are the government with the

enforcement of the Minimun Wage Law and unions that demand wages at

acceptable levels. Area Wage Rates. Organizations within a given area compete

with one another in attracting qualified manpower. This forces employers to

adapt wage rates that are competitive. When employers’ pay too high compared

with others within the area, their labor costs will be excessive and they may lose

to competitors in keeping the prices of their products or services competitive. If

they pay too low, they will fail to attract qualified applicants and they may even

fail to motivate current employees to stay.

There are also internal factors that affect compensation rates. They refer

to: employer’s compensation policy, worth of a job, employee’s relative worth,

and employer’s ability to pay.

Employer’s Compensation Policy. Organizations differ I terms of

compensation policy. Some want to maintain leadership position in terms of

compensation. Companies that are concerned with maintaining low prices of their

products or services will have to adapt to lower wage rates. This is not the case

when the selling rice of the company’s products or services is not the primary tool

of competition.

Since performance makes organizations effective, it may be used as a

basis for rewarding employees this means better performers must be rewarded

properly. If this is adopted, it can be made effective if an effective performance

evaluation system is installed.

Even if employers want to provide higher levels of compensation to employees,

some of them cannot afford it. The affordability factor, however, is dependent on

the funds allotted by the employer for operational expenses, which include those

concerning compensation. The pool of operational funds can be increased by

additional investment from the employer and the retention of earnings. On the

other hand, it can be depleted by capital investments and the reduction of

income. Oftentimes, reduced incomes are results of poor productivity of

employees (Medina, 2006).

People work for pay while the private company and government pay for

work. The contemplation of work is both what the individual can do and what he

has actually done. The middle idea is that paid work is what the worker should

have done. In this sense, both work and pay are approximations which in all

cases should be that actual work should equal or exceed the pay received. This

may sometimes, however, be belied by actuality.

The concept of compensation goes beyond payment for work done. It

includes benefits that the worker receives for being with the organization, for

being employed over a period of time and for the rank or position held in the

enterprise or government. The cost of compensating workers in terms of basic

pay and benefits and the importance of compensation to the workers’ quality of

life makes compensation management a vital aspect of human resources

management. Thus the compensation and benefits package must be clearly

communicated to the employees. In some companies, all employees belonging

to a common job category receive common benefits package. However, there

are those that practice the cafeteria approach where employees, subject to a

value limit, are free to choose the benefits they wish to avail. For example,

unmarried employees with dependents prefer health insurance. The cafeteria

approach is obviously ore complicated and expensive to administer (Azanza,

2000).

One of the most difficult functions of personnel management is that which

concerns compensating the employees fairly and equitably. There are four kinds

of employee compensation: salary or wage, incentive pay, allowances, and

benefits. Salary or wage is the basic compensation while incentive pay is

designed to encourage the employee to render extra effort over normal

production. Allowances are given to meet employee needs during temporary

situations. Benefits are rewards for belonging to an organization. In a period of

inflationary pressures and economic uncertainties, compensation assumes an

overriding importance not only to management but also to the community.

The pay that an employee receives from his employer is the primary

reason for his being on his job. He works to earn a living. His pay provides him

with a strong incentive to do his job well. The employee’s rate of pay often

indicates his status in the company. His wages determine not only his standard

of living and the comforts that he and his family can have but also his standing in

the community. It also determines what he can contribute to community

development and social welfare. His pay determines his purchasing power. With

higher wages he can acquire more goods and services for his family. High

purchasing power for the workers stimulates the production of more goods and

increases the need for more services. Hence higher pay may lead to greater

production.

An employee’s pay must be commensurate with his efforts. It must be

equitable in relation to what the other employees get for what they do, otherwise,

he or the other employees will feel that they are being cheated. Most industrial

disputes concern wages because wages affect the very lives of the workers and

their families. If the employee’s salary is either lower than what he expects for his

services or less than what other employees receive for similar jobs, he either

quits the company or stays on but dissatisfied with his employment and the firm

itself.

One way to retain competent employees and their morale high is to plan

salary levels so as to establish uniformity of pay in relation to the jobs in the

company and to those in the other business establishments in the community.

Workers have a practice of comparing jobs and their wages with those of other

workers, and judge the equity or inequity of their pay. They consider their pay

either commensurate or not with the work they do in comparison with the wages

paid to the other workers within the firm. And they can make an assessment of

the fairness of the firm that pays higher salaries for jobs involving greater

responsibility or are more difficult to do and therefore require higher degrees of

ability and skill.

The size of the payroll is one of the major factors in production. In most

industrial firms, wages and salaries constitute the largest single cost of operation.

The control of costs is therefore a primary concern of management, as it affects

the prices of the products or services of the enterprise. While management may

want to give high wages to its workers, it is also concerned with the control of

costs in order to make its goods and services available at prices within the reach

of consumers and competitive with the goods and services of other firms.

Salary costs rise as a result of many causes, including competition among

employers in securing the services of certain type of employees, the effect of

wage increases, and the expanding scope of fringe benefits. Unless employees

earn their pay through effective production effort, outlays for salaries and wages

will produce a low return and the firm, the source of the employee’s pay, will

suffer.

Employers constantly strive to reduce production costs to keep the

company in the competitive market and earn enough profits. Wage raises are

generally passed on to the consumer in the form of higher prices, unless the

increased costs are offset by greater efficiency in production or are absorbed by

the company (Sison, 1991).

There are some situations where the link between performance and pay is

very clear and very direct. Many years ago I spent a few months working as a

commission only financial adviser. My pay was linked directly to my performance

and I knew as I was selling a particular product what my pay would be. The

pressure was to sell as much as I could and to work as hard as I could to make a

good living. I enjoyed the income I generated, but the pressure was so intense

that I returned to working as a financial director. The pay was not as good, but in

comparison the job was easy and almost pressure free.

The skilled carpenter who works alone has to obtain work and produce

good quality results in order to be pad and to continue to obtain work on the

basis of reputation for quality and reliability. For the vast majority of people

working as employees for organizations pay has only a rather tenuous link to

their performance. It is in this particular context where so many problems arise.

Profit sharing is NOT performance-related pay. It is too remote from the

individual to have a clear and calculated link with what the person actually does.

Profit sharing, whether in payment of money or issuing shares, does give

employees a sense of ‘having a stake’ in the business and is valuable from this

point of view, but it has nothing to do with individual performance. Bonuses paid

for ‘doing well’ are only vaguely related to performance. Most bonus systems are

at the subjective whim of management and also fail to have a direct link, unless

they are calculated in accordance to some measured standard of performance

which is directly related to an individual’s output.

Schemes that link some additional payment to the subjective appraisal

ratings that are assessed once a year, also do not work. In fact such schemes

are widely mistrusted because they are usually manipulated by management

according to some predefined standard distribution of ratings, which is partly to

control the level of payouts and partly to ‘keep people in their places’.

Systems that provide a lump sum out of profits, which is distributed locally by

business units in relation to the contribution they made to profits, are again too

remote and too easily manipulated for staff to have confidence in receiving a

payout that directly reflects their hard work. The focus becomes ‘keeping the

boss sweet’ rather than performance (Bentley, 2000).

Foreign Studies

According to Nadia Klos (2006) entitled “Incentive Performance Related

Pay and Productivity” a clear evidence of positive effect of imposition of

performance related monetary incentive schemes, as well as increasing a flexible

performance related part of wage on labor productivity was detected. Moreover,

enterprises which do not use performance related remuneration schemes are

less productive, which coincides with classical principal-agent theory.

.According to the study of Jin Xu (2013), CEO compensation policy as a

monetary incentive is assumed to solve the agency problems. From the view of

corporate governance, different compensation component generates different

degrees of risk-takings and different orientations in executive decision makings.

Cash compensation including basic salaries and bonus plans is mostly used as

an entitlement program rather than a motivation program for stimulating

performance. Incentive compensation including stock options granted, restricted

stock grants, long-term incentive payouts and other forms of pay, is more

virtually drives the total pay-for-performance relationship and is acclaimed in

firms with cash constrains. Besides, executives obtain substantial other types of

payouts such perks, pensions and separation pay which are largely decoupled

from firm performance and further boost the pay-without-performance.

Shilongo (2013) concluded that the equity dimensions specify that there is

a broad consensus that is essential to relate pay to performance. Bonus is

alleged to be an irrelevant motivator if the package is unattractive and feedback

is ineffective. The main purpose of the PIBS is to nurture organizational

achievement culture and its main drawback is attributable to encourage

employees to exercise a narrow focus on short-term quantifiable goals.

However, the results of the study of Nick Snoeker (2010), show that

employee reward satisfaction and motivation are not strongly related to the

manner of payment. Also, character traits mostly do not seem to influence the

preference regarding either performance based pay or fixed pay, tangible

rewards or non tangible rewards, skill based pay or job based pay and rigid

benefits or flexible benefits.

Jingjing Weng (2012) concluded that although the principle of linking

employees’ pay to their performance was found to be well accepted by all

employees across the PSUs investigated, it needs to be acknowledged that there

are some occupations in the PSU sector where PRP may be less appropriate,

such as teaching, which involves a wide range of tasks and where measuring

output is costly.

Local Studies

According to Danao, Del Rosario, Gonzaga, Grabiles, Ombid, Valor, and

Venta, company’s compensation strategy must be commensurate with the efforts

performed by their employees. It must be equitable in relation to what the

employee gets for what they do or otherwise if they are not compensated well,

they will think that they were being cheated. The company should always

recognize who has the best performance and the one who contributes a lot to

your business because a very motivated employee can have good effects to your

firm. Management should adhere to the rules of compensation policy so that the

employees will feel that their pay is fair in relation to the work that they do and in

comparison with the pay that others get because a firm cannot give a higher pay

to other employees as long as they deserve to have it.

According to Rafi, staffs and personnel work to achieve not only personal

objectives but also monetary objectives. It is noted that industries are trying their

very best to find innovative payment system approach which may directly

connect with the enhancement of the performance of both staffs and personnel

and the entire organization. Accordingly, most staffs and personnel expects and

needs to be compensated in line with the work they have done for the company

and most staffs and personnel expects that their potential and skills will enhance

if the employee receive payment system which are fair and commensurate the

skills and expectation. In line with the management of any industry, it is said that

having an efficient payment system program can boost job satisfaction and

enhance commitment as well as performance of staffs and personnel. The

management of any industry can do this by considering an employee payment

system program which provides the staffs and personnel that they deserve

payment to the quality of the work that they have rendered in the company.

According to Sanchez, another good intention is paying for performance

(also popularly abbreviated in the US as P4P). It serves as management?s

expression of gratitude to competent and loyal employees. It makes sense

because workers should be rewarded for good performance. It has been applied

in corporate practice under the popular name of merit increase in basic salary

based on performance evaluation. But the problem with P4P is that it is a

permanent reward for variable performance. It gives permanent salary increases

even when the performance of employees may decline in the future. The

increase cannot be taken away because labor laws do not allow any decrease in

basic salaries.

Useless increases. The president of one of my client companies once told

me he gave a big raise to his secretary because of her excellent performance.

But he regretted it because the secretary became unreliable after she got

married. Lesson: Performance can decline despite a salary increase. As a

consultant, I learned that the company had been giving merit increases

averaging 10 percent of basic salaries every year based on performance

evaluation ratings. I discovered that performance appraisal ratings of at least 90

percent of employees was always high even as the productivity indices of the

company was declining annually. Here was a case of paying for high

performance ratings despite declining productivity.

Make it a bonus. Paying for performance has great value because it gives

management the opportunity to express its gratitude to employees who meet and

exceed work expectations. But if given as salary increase, there is no guarantee

that the employees will repeat the desired work behavior. The better option is to

grant the pay for performance as a bonus, a one-time reward for those who

produce the expected output or outcome. In this way, the company does not risk

continuously paying employees whose performance may worsen. Moreover,

when employees know that they can get the bonus only when they meet certain

targets, their initiative is sustained. The concept is also often called the

productivity incentive program, which serves two purposes. First, it makes people

conscious of the productivity goals that they have to accomplish. Second, the

expense for the bonus can be directly associated with the accomplishment of

corporate goals. There are, however, certain issues that have to be considered in

designing the bonus for performance program. First, the targets must be

objectively measurable in terms of output and/or outcome. Second, it will be best

to reward groups instead of individual employees.

CHAPTER 3

METHODOLOGY

This chapter contains the methods and procedures to be used in this

study. Specifically, this chapter includes the discussion of the research method

used, the description of the respondents, instruments used, validation of

instrument, other data gathering techniques, the procedure and the statistical

treatment of data.

Research Method Used

This study made an assessment of the "Relationship of Performance-

Related Pay on Employees toward the Performance of the Organization for the

Second Semester, S.Y. 2014-2015". This descriptive-survey method of research

was used in the study. The descriptive-survey method is used to obtain

information concerning the current status of phenomena. The purpose of this

method is to describe "what exist" with respect to situational variables (Leedy,

187).

It aims to record, describe, interpret, analyze and compare the gathered

facts or information about the chosen field of study. With this, the use of

descriptive method enables the researcher to gather primary information and

review of literature which are used in order to design the data gathering

instrument used. This is also helpful in order to come up with the information that

are needed to provide the guidelines regarding the findings and results of the

research. On the other hand, data gathered in this method will also be helpful in

order to support the different data or values which will be gathered from the

sampling population.

Sampling Procedures

The researchers used the simple random sampling method where the

respondents came from Teleperformance. Each individual is chosen randomly

and entirely by chance, such that each individual has the same probability of

being chosen at any stage during the sampling process, and each subset of

individuals has the same probability of being chosen for the sample as any other

subset of individuals.

To select the number of respondents, we rely on the Slovin’s formula.

n = N / (1 + Ne2)

Where,

n= sampling size

N= total population

e= level of confidence (error of tolerance)

Computation of Sample Size (n)

195 195

n= = = 130.87248

1 + 195 (0.05) 2 1.49

We come up with a sum total of 131 respondents which we’ll include in the

study using the simple random sampling method.

Respondents of the Study

The respondents of this study are the employees of selected BPO

Company which is Teleperformance. These respondents were described using

certain selected demographic variable as age, gender, civil status, and

educational attainment.

Research Instrument

The following three (3) questionnaires were used by the researcher in gathering

the data:

Respondent’s Profile Questionnaire. This questionnaire, a 9-item

instrument, was developed to gather information regarding work life variables

which might affect the job satisfaction and work commitment. All responses to the

questions on sex and marital status were coded and entered as categorical data.

However, the questions on position, years of service, educational qualifications,

employment status, age, and distance of residence were coded and treated as

ordinal data due to their inherent order.

Level of Sufficiency on Benefits, Budget Allocation and Career

Advancement Questionnaire. This questionnaire is divided into 4 portions: a)

Remuneration and Other Monetary Benefits; b) Non-monetary Benefits; c)

Budget Allocation; and d) Career Advancement. For each question of each

portion, the respondents answered on a 4-point Likert scale: 1 means ‘Very

insufficient’ , 2 means ‘Insufficient’, 3 means ‘Sufficient’, and 4means ‘Very

sufficient’. Item scores were summed for a total score.

Job Satisfaction Questionnaire. The Short-Form Minnesota Satisfaction

Questionnaire (MSQ) as modified by Anderson, etal. (1984) was used in this

study. The response options were assigned ordinal weights with ‘Very

dissatisfied as number 1, ‘Dissatisfied’ as number 2, ‘Satisfied’ as number 3, and

‘Very satisfied’ as number 4. Item scores were summed for a total score.

Work Commitment Questionnaire. This questionnaire is divided into 3 sub-

questionnaires:

a. Job Involvement Questionnaire. The questionnaire used in this study

was developed by Kanungo (1982). It is a10-item instrument measured on a 6-

point Likert scale: 1means ‘Strongly disagree’, 2 means ‘Disagree’, 3 means‘

Mildly disagree’, 4 means ‘Mildly agree’, 5 means ‘Agree’, and 6 means ‘Strongly

agree’. Item scores were summed for a total score.

b. Career Commitment Questionnaire. The questionnaire used in this

study was developed by Blau (1985). It is an8-item instrument measured on a 5-

point Likert scale: 1means ‘Strongly disagree’, 2 means ‘Disagree’, 3 means

‘Unsure’, 4 means ‘Agree’, and 5 means ‘Strongly agree’. Item scores were

summed for a total score. And,

c. Organizational Commitment Questionnaire. The questionnaire used in

this study was developed by Mow day et al (1970). It is a 9-item instrument

measured on a 7-point Likert scale: 1 means ‘Strongly disagree’, 2means

‘Moderately disagree’, 3 means ‘Slightly disagree’,4 means ‘neither disagree nor

agree’, 5 means ‘Slightly agree’, 6 means ‘Moderately agree’, and 7 means

‘Strongly agree’. Item scores were summed for a total score.

Data Collection Procedure

The researchers contacted the Company’s supervisor or Human Resource

Chairperson to ask for permission to conduct a study, and to obtain the names

and other pertinent data of the respondents from the Administrative Section of

the division.

The questionnaires were the main instruments for data gathering which

were personally distributed by the researchers themselves. They contained a

covering letter describing the study and indicating the confidentiality of the

information that may be given out by the respondents.

Statistical Treatment of Data

The data were subjected to analysis using the Statistical Packages for

Social Sciences (SPSS). The following statistical tools were used:

Frequencies and Percentages. This was used to determine the

demographic profile of # .

Formula: P= freqN×100

Where N = total number of respondents

Mean. This was used to determine the level of sufficiency given to company

employees in terms of remuneration and other monetary benefits, non-monetary

benefits, budget allocation, and career advancement; the level of job satisfaction;

and the level of work commitment.

Formula: m= ΣxN

WhereΣ x = the Sum of responses

N = the Sum of respondents

Kendall tau Correlation. This was employed to determine the significant

relationship between job satisfactions and work commitment among company

employees.

Formula: T= S1/2N (N−1)

WhereS = actual responses

N = total number of respondents

BIBLIOGRAPHY

BOOKS

Azanza, P. (2000). “Human Resources Management”. JMC Press, Inc.

Bentley, T. (1996). “Bridging the Performance Gap”. Gower Publishing Ltd.

Daft, Richard (2000) Management (Fifth Edition). Thomson Learning, Inc.

Dyck, R. and M. Neubert. (2010) “Management”. Thomson Learning, Inc.

Heneman, R. (1992). “Merit Pay: Linking Pay Increases to Performance Ratings”. Addison-Wesley Publishing Company, Inc.

Ivancevich, J.; Donnelly Jr., J.; and J Gibson. (1986). “Managing for Performance (Third Edition)”. Plano, Texas: Business Publications, Inc.

Johns, G. and A. M. Saks. (2008). “Organizational Behaviour: Understanding and Managing Life at Work”. Page 152-155, 185-209.

Martires, C. (2008). “Human Resources Management: Principles and Practices (Third Edition)”. Mandaluyong City, Philippines: National Book Store.

Medina, R. (2006). “Personnel and Human Resources Management”. Rex Book Store, Inc.

Milkovich, G. and J Newman. (2005). “Compensation (2nd Edition)”. New York, New York: McGraw-Hill Companies, Inc.

Milkovich, G. and J Newman. (2005). “Compensation (Eighth Edition)”. New York, New York: McGraw-Hill Companies, Inc.

Milkovich, G.; Newman, J. and B. Gerhart. (2011). “Compensation (Tenth Edition)”. New York, New York: McGraw-Hill Companies, Inc.

Miranda, G. and C. Miranda-Gow. (2005). “Wage and Salary Administration” Manila Philippines: National Book Store.

Schermerhorn Jr., J.; Hunt, J. and R. Osborn. (2008). “Organizational Behavior (Tenth Edition)”. Hoboken, New Jersey: John Wiley & Sons, Inc.

Sison, P. (1991). “Personnel and Human Resources Management”. Manila, Philippines: Rex Book Store, Inc.

Tanke, M. (2001). “Human Resources Management for the Hospitality Industry”. Albany, New York: Thomson Learning, Inc.

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THESES AND DISSERTATIONS

Danao, J.; Del Rosario, E.; Gonzaga, J.; Grabiles, F.; Ombid, R.; Valor, B. and J. Venta. (2010). “Employees’ Satisfaction Regarding the Compensation Strategies of Toby’s Sports, SM Novaliches Branch and SSS Main”. pp. 23-24.

Klos, N. (2006). “Incentive Performance Related Pay And Productivity”. Unpublished Thesis. National University “Kyiv-Mohyla Academy”

Shilongo, H. N. (2013). “The Impact Of Performance Related Pay On Employees – A Case Study Of The Performance Incentive Bonus Scheme At The Motor Vehicle Accident Fund”. Unpublished Thesis. Polytechnic of Namibia.

Snoeker, N. (2010). “Pay Factors, Employee Satisfaction And Motivation: A Survey On The Influence Of Pay Factors And Character Traits On Perceived Reward Satisfaction And Motivation”. Unpublished Master Thesis. Erasmus University.

Weng, J (2012). “Pay System Reforms in Public Units In Contemporary China: The Implementation and Impact of Performance Related-Pay”. Unpublished Dissertation. London School of Economics.

Xu, J. (2013). “CEO Pay-for-performance during the Period from 2008 to 2012”. Unpublished Master Thesis. University of Oulu.

JOURNAL/ARTICLES

Rafi, M. S. (2013). “Research Korner: Strengths and Weaknesses Individual Performance Related Pay – Financial Reward Scheme”.

Sanchez, A. G. (2012). “Management Solutions: A Better Way to Pay for

Performance”.

ELECTRONIC SOURCES

https://www.scribd.com/doc/16682662/21/Research-Instrument

http://researchkorner.blogspot.com/2013/11/strengths-and-weaknesses-individual.html