Management Principles

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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.

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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 researcher using his 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.

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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:

- Are employees satisfied after they have been evaluated and are categorized into performance groups?

- What improvements have been made by the organization since the implementation of performance-related pay?

- Is there a significant relationship between the performance-related pay on employees and performance of the organization?

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 of MBA. This study will serve as additional information especially to the managers 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 researcher. 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 Managers. This study will help those Managers 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 managers’ to better observe what satisfies employees and what are not. This will help

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