Would better earning, work environment, and promotion opportunities increase employee performance? An investigation in state and other sectors in Vietnam

Abstract

In today’s competitive and globalized economy, there has been constant emphasis on creating and maintaining a high performance work system (Arthur, 1994; Becker and Gerthart, 1996; Delery and Doty, 1996; Huselid, 1995, Pfeffer, 1998, Dessler, 2012). High employee performance is what managers at all levels aim for. In addition to ability, motivation has certain impact on employee performance (Wright, Kacmar, McMahan, & Deleeuw, 1995; Ivancevich & Matteson, 1987). This study examines the impact of earning, work environment, and promotion opportunities on employee performance. It also compares these impacts between employees who work in the state sector and those who work in other sectors. A survey was conducted involving 205 employees working in both state and other sectors in Ho Chi Minh City using multiple regression analyses. The results showed that earning, work environment and promotion opportunities positively influence employee performance. A comparison of the relative strengths of the effects reveals that in both state and other sectors earning has the strongest effect on employee performance, and that the effect is stronger in state sector than in other sectors. Promotion opportunities have stronger effect on employee performance in state sector than in other sectors. Finally, work environment has a stronger effect on employee performance in other sectors than in state sector. In this paper, managerial implications, limitations and recommendations are discussed.