工资影响工作效率吗越南国有企业与非国有企业工资差异分析 101页

？翔為卸俗诚硕±学位论文工资影响工作效率吗？越南国有企业与非国有企业工资差异分析学科专业企业管理学位类型囚科学学位□专业学位研究生姓卷ＮＧＵＹＥＮＴＨＩＬＡＣＴＨＵ导师姓葦、职称肖翔讲师论文编号湖南师范大学学位评定委员会办公室二零一六年五月 分类号密级学校代码10542学号L20130203012工资影响工作效率吗？越南国有企业与非国有企业工资差异分析DoesWageImpactWorkingEffectiveness?AnalysistheDifferenceofWageBetweenStateandNon-StateEnterpriseinVietnam研究生姓名NGUYENTHILACTHU指导教师姓名、职称肖翔讲师学科专业企业管理研究方向人力资源管理湖南师范大学学位评定委员会办公室二零一六年五月 ＨＵＮＡＮＮＯＲＭＡＬＵＮＩＶＥＲＳＩＴＹＤＩＳＳＥＲＴＡＴＩＯＮＣＯＰＹＲＩＧＨＴＡＵＴＨＯＲＩＺＡＴＩＯＮＴｈｅｄｉｓｓｅｒｔａｔｉｏ打扣Ｉｌｕｎｄｅｒｓｔａｎｄ化ｅｓｃｈｏｏｌｏｆｔｈｅｒｅｓｅｒｖａｔｉｏｎｕｓｅ化ｅｒｏｖｉｓｉｏｎｓｙ，ｐｏｆｄｉｓｓｅｒｔａｔｉｏｎｓ，ｇｒａｄｕａｔｅｓｔｕｄ也ｅｓｉｓｗｏｒｋａｔ也ｅｓｃｈｏｏｌｄｕｒｉｎｇｔｈｅｄｅｇｒｅｅｏｆｙ■ｉｎｔｅｌｌｅｃｔｕａｌｒｏｅｒｔｙｒｉｔｓｂｅｌｏｎ化ＨｕｎａｎＮｏｒｍａｌＵｎｉｖｅｒｓｉｔｕｎｉｔｓ．Ａｒｅｅｄ化］ｅｔ：ａｉｎｐｐｇｈｇｙｇｔｔ化ｅｓｃｈｏｏｌｏｒｉｎｓｉ化ｔｉｏｎｏ化ｅｎａｔｉｏｎａｌａｕｔｈｏｒｉｔｉｅｓａｎｄｓｅｎｔａｃｏｐｙｏｆ化ｅｅｌｅｃｔｒｏｎｉｃｖｅｒｓｉｏｎｏｆｔｈｅａｅｒａｌｌｏｗｉ打ｔｈｅａｅｒ化ｂｅａｃｃｅｓｓａｎｄｂｏｒｒｏｗ．ＩａｕｔｈｏｒｉｚｅＨｉｍａ打ｐｐ，ｇｐｐＮｏｒｍａｌＵｎｉｖｅｒｓｉｔｙｃａｎｂｅａｌｌｏｒｐａｒｔｏｆｔｈｅｃｏｎｔｅｎｔｓｏｆｔｈｉｓｔｈｅｓｉｓａｒｅｉｎｃｏｒｐｏｒａｔｅｄｉｎｔｏｔｈｅｒｅｌｅｖａｎｔｄａｔａｂａｓｅｓ化巧ａｒｃｈ，ｏｕｃａｎｕｓｅａｈｏｔｏｉｃｏｃｏｏｒｓｃａｎｍｉｃｒｏｐｒｉｎｔｉｎｇｙｐｐｙ，ｐｙａｎｄｏｔｈｅｒｍｅａｎｓ化ｓａｖｅａｎｄｃｏｍｉｌｅｔｈｉｓｄｋｓｅｒｔａｔｉｏｎ．ｐＴｈｉｓｄｉｓｓｅｒｔａｔｉｏｎｂｅｌｏｎｇｓ１，Ｃｏｎｆｉｄｅｎｔｉａｌ□，也ｅａｐｌｉｃａｔｉｏｎｏｆｔｈｉｓａｕｔｈｏｒｉｚａｔｉｏｎｉｎｅａｒｓａｆｔｅｒｐｙ、ｄｅｃｒｙｐｔｉｏｎ。２，Ｎｏ化ｏｎｆｉｄｅｎｔｉａｌ日。＂＂（ＰｌｅａｓｅｃｈｅｃｋｔｈｅａｐｐｒｏｐｒｉａｔｅｂｏｘｗｉｔｈｉｎｔｈｅａｂｏｖｅｐｌａｙＶ）ＡｕｔｈｏｒＳｉｇｎａｔｕｒｅ：Ｄａｔｅ；２７ｄａｔｅｍｏｎｔｈ进ＩＡｙｅａｒ＾硕ＩｎｓｔｒｕｃｔｏｒＳｉｇｎａｔｕｒｅ：挺禾Ｄａｔｅ：ｄａｔｅ成ｍｏｎｔｈｙｅａｒ 摘要越南不佳的经济正在逐渐改善，在这个过程中，国有企业在经济，劳动就业方面，对社会做出了不少的贡献。除了国有企业对经济的贡献外，另外这些企业也对非国有企业的发展中起到了领导作用。然而按照目前状况来说，这些国有企业表现仍然差强人意。最近，一系列的企业破产，国有企业的损失对经济产生显著的影响。与此同时，公共财政部门的工资政策存在严重的形式主义。国有企业的工资比非国企低。它被认为是越南的一项社会矛盾。低工资是不是一个影响国有企业工作效率的原因？这就是选题的理由。本文的主旨意在探讨薪金对员工工作效率的影响。为了实现这一目标，本文搜寻了国有企业部门的薪金和非国有企业部门的薪金，试图分析比较两者的差额。为了达到这个目标，这篇论文搜集了117家企业的数据，分析过程如下：首先，论文分析员工的工资影响到员工工作效率。通过收集了29家服装企业每个月的平均工资和每个月的平均产品。通过找到工资和输出产品的相关，建立回归模型。结果表明，大约总样本中69%的平均产出和平均工资之间有相关性。这证实了每个员工的平均工资影响平均产出或者可以说工资影响工作效率。下一步，比较国有企业工资与非国有企业的工资之间的差别，研究分析了国有企业和非国有企业的工资制度的差别，同时也比较两种类企业的最低工资和平均工资。研究表明：国有企业的工资制度比非国有企业的工资制度更复杂，国有企业和非国有企业相比，工资水平偏低。因为收集88家企业的平均产品产出很困难，所以本文使用ROE&ROA代表工作效率。之后，本文还比较国有企业和非国有企业的I ROE和ROA，找到ROE，ROA和工资之间的相关系数。本文采用了大量国有和非国有公司的数据。根据每个不同业务线对商业促进效益的比较，这些被选用的企业被划分成几类。笔者特别的留意了以下三类：出版业，食品业和建设企业。为了确保客观性，在每个业务部门各收集了超过三十家企业样本。由于访问数据的困难性，本文只根据这四项业务的结果提出见解。此见解并不能涵盖整个经济的整体可视效果。在今后，笔者将以更全面的数据对此问题进行更深入的研究。本文的研究表明，非国有企业部门的工资政策比国有企业部门的工资政策要更好（良好的政策，与员工保持一致，完整的制度对更多优秀人才的吸引等）。并且，非国有企业的最低工资和平均工资也都比国有企业高。不仅如此，非国有企业的工作效率也较国有企业更上一层楼。由此，本文可见薪金与工作效率之间的关系。分析结果表明，薪金对工作效率的确有影响，本文的论点也因此得到了证明。这个论文还清晰地解析了越南国有企业在薪金上的一些情况。在这些地方薪金都较低，侧面也反应了工作效率不高。这也和Maslow（1943），Herzberg（1968）的激动理论如出一辙。根据刺激理论，薪金是推动员工工作效率的刺激因素之一。因此，国有企业中的低薪政策是使其效率低下的原因之一。总而言之，越南国有企业需要改革薪金政策，而这会是政府改革策略中的突破口。关键词：工资；国有企业的工资；非国有企业的工资；工作效率II ABSTRACTVietnamwithpoorlyeconomicaregraduallydevelops.Significantcontributioninthatprocess,therearetherolesofStateenterpriseintheexecutivemanagementofemployment,economic，social.Besidestheeconomiccontributionofthestateenterprises,theseenterprisesalsohavealeadingroletoleadthenon-stateenterprisesdevelopment。Howeverthealarmingrealityisthatthecurrentperformanceofthesestateenterprisesisstillpoorly.Mostrecently,aseriesofbankruptcies,lossesofStatecompaniesaresignificantimpactontheeconomy.Meanwhile,thewagespolicyofpublicfinancialsectoralsoheavilyformalism.ThewagesintheStatesectorislowerthantheNon-Statesector.ItisconsideredasasocialparadoxinVietnam.DoesthelowwagesoneofthecausesofpoorqualityefficientoperationofStatesector?Thatisthereasonthissubjectwaschosen.Theaimofthethesisistoshowthatwageshaveanimpactonworkefficiencyofemployees.Inordertoachievethisgoal,Thisthesiscollectsdatafrom117businessesandtheprocessofanalysiswasconductedasfollows:Thefirst:analyzetheimpactofwageonworkingefficiencyofemployees.Throughthecollectionofaveragemonthlywagesperemployeeandaveragemonthlyoutputproductsperemployeeofabout29garmententerprises.Thoughtwefindtherelevantwagesandoutputproducts,establishtheregressionequation。Theresultshowthat:about69%ofthetotalsamplehasthelinearrelationshipbetweenpercapitaloutputandpercapitalwage,whichconfirmthattheaveragemonthlywageofeachworkerhasanimpactonoutputproduce,orwecansaythatthewagesaffecttoworkingeffectiveness.Thenext:comparethedifferencesofwagebetweenstateenterpriseandnon-stateenterpriseinthesameIII industry:Theresearchannalysisthedifferentaboutwagesysteminstateenterpriseandwagesysteminnonenterprise,besidethatitalsocomparedminimumwage,averagewageoftwokindsenterprise.Theresearchshowthat:wagesysteminenterpriseismorecomplexthanwagesysteminenterprise,andthestatepaylowerwagesofprivateenterprises.Becauseit"sdifficulttogatheraverageoutputof88enterprises,soiuseROE,ROArepresentforworkingeffectiveness.Afterthat,thethesisalsocomparedROE,ROAinstateenterpriseandnonstateenterpriseandfindthecorrelationcoefficientbetweenROE/ROAandwage.Thethesisusesdataofmanystateenterprisesandnon-stateenterprises,theseenterprisesaredividedaccordingtoeachdifferentlinesofbusinesstofacilitatethecomparisonofbusinessresults,specificallytheauthorconsideronlythreelines:publishingbusiness,foodbusinessandconstructionbusiness.Toensureobjectivity,ineachbusinesssectorwillcollectaboutover30enterprisesamples.However,becauseofthedifficultyofaccesstodatashouldthethesisjusttheinsightsfromtheresultsofthethreelinesofbusiness,anditcan’tencompasstheoverallvisuallookofthewholeeconomy.Inthefuture,Iwillcontinuetostudythisissuemoredeeplywithamorefullydataset.Andinfactthethesisresearchshowedthatwagespolicyinthenon-stateenterprisesectorarebetterthaninstateenterprise(goodpolicy,consistentwiththeemployee,goodregime,goodincentivetoattractmoretalent...),theminimumwageandtheaveragewageofnon-stateenterprisesalsohigherthanstateenterprises.Simultaneously,theworkingefficiencyofthenon-stateenterprisesalsohigherworkingefficiencyofstateenterprises.Byavisuallook,wecanseethatwageshaverelationshipswitheffectivework.However,tomoreclear,authorconsidersthecorrelationrelationshipbetweenwagesandworkingefficiency(usingbusinessresultsinsteadofcorrelationrelationshipIV betweenwagesandworkingefficiency,specificallyusedtwofinancialratio:ROAandROE).Theanalysisresultsshowthatwageshaveanimpactonworkefficiency,sotheaimofthethesiswasproved.ThisthesisalsoshowsclearlythattheactualsituationonwagesinthestateenterprisesectorinVietnam.Thefactthatwagesareverylowinthissector,thispartlyexplainsthebusinesssituationlesseffectiveasevidencedbytheseriesofnegotiations,dissolution,numerousmistakesinbusinessVietnamwaspublishedinthejournalism.AndthatisentirelyconsistentwiththemotivationtheoryofMaslow（1943）,Herzberg（19688）…Accordingto“Motivationtheories”,wagewasconsideredoneofthemotivationstobeemployeesworkefficiency.So,thelowwageinstateenterpriseisoneofcauseofoperationalinefficiencyinstateenterprise.Therefore,VietNamneedsanewwagereformforofficialsinStatesectorandthisshouldbeconsideredasabreakthroughinthereformagendaofthenationaladministrative.Keywords：wage,stateenterpriseswage,nostateenterpriseswage,workingeffectivenessV TableofContents摘要.................................................................................................................................IABSTRACT.................................................................................................................III1.INTRODUCTION.....................................................................................................11.1Overviewofliterature..........................................................................................11.1.1Introduceproblem........................................................................................11.1.2Background...................................................................................................41.2StructureofThesis...............................................................................................61.3Limitationofthisstudy........................................................................................62.THETHEORYOFWAGES.....................................................................................82.1Thetheoryofwages.............................................................................................82.1.1Thesubsistencetheoryofwages...................................................................82.1.2Thewage-fundtheory.................................................................................102.2Motivationtheory...............................................................................................122.2.1Classicaltheoriesofmotivation..................................................................132.2.2Moderntheoriesofmotivation....................................................................182.2.3Theeffectsofmotivationonemployeeperformance..................................202.3Impactofwageonworkingeffectiveness.........................................................242.3.1Efficiencywagetheory................................................................................242.3.2Impactofwageonworkingeffectiveness...................................................283.CONTEXTOFVIETNAMESE’SWAGE..............................................................323.1OverviewofVietnameconomic........................................................................323.1.1GDP.............................................................................................................333.1.2GNI..............................................................................................................353.2ContextofVietnamese’swage..........................................................................383.2.1Developmentprocessofwageinrecentyears............................................383.2.2Overviewofwagedividedbytheactivitiesofthenationaleconomy........414.PRACTICALANALYSIS.......................................................................................444.1Basicresearchdesign.........................................................................................444.2Gatheringdata....................................................................................................454.3Modal.................................................................................................................50 4.3.1Constructionofmodel.................................................................................504.3.2Statisticalanalysis.......................................................................................514.4ThedifferentofStateEnterprise’swageandNon–StateEnterprise’swage...534.4.1Comparewage.............................................................................................534.4.2CompareROE&ROA................................................................................644.5Result:Wageimpactonworkingeffectiveness.................................................735.CONCLUSION.......................................................................................................755.1Mainthesisandfindingofthestudy..................................................................755.2Discussion..........................................................................................................755.2.1Therealityofthewagedifferencebetweenstateenterprisesandnon-stateenterprises.............................................................................................................755.2.2LowwageisoneofthecauseinefficientworkinginStateEnterprise.......775.3Solution..............................................................................................................785.3.1ExperienceofChina....................................................................................785.3.2SolutionforVietNam.................................................................................80REFERENCES............................................................................................................82APPENDIX..................................................................................................................87ACKNOWLEDGEMENT...........................................................................................88 1.INTRODUCTION1.1Overviewofliterature1.1.1IntroduceproblemTheaimofthisthesisisstudyoftheefficiency-wageimpactatstateenterpriseinVietnamtoexplaintherealitieseconomic.WecomparethewageofStateenterpriseandNon-stateenterpriseinthesameindustrytofindoutthepointsofdifference.Howdothosedifferenceseffectstoworkingefficiency,qualityoflifeofemployeeswhilewageandbenefitsisoneoftheobjectivesduringprocessofstrivingtowork.Throughdataanalysis,weconcludedthatthestateenterprisewagelowerthannonstateenterprisewage,andthestateenterprisewagesystemstillformalism,gradeandbasedprimarilyonseniority.Whereastheprivatesectorwagesystemcloselyheldandbasedprimarilyontheefficiencyoflaborandinthesamequalification,wageofemployeesintheprivatesectorwillbehigherthanthepublicsector.Andthesedifferencesareoneofthecauseleadtoaseriesofbankruptcies,lossesofStatecompanies,significantimpactontheeconomyinrecentyears.ThisthesisisanempiricalinvestigationofthewageimpactatstateenterpriseandnonstateenterpriseinVietnam.Themarketreformsthatbeganinthelate1980sspreadunevenlyandgraduallytobothstateenterpriseandnonstateenterpriseinordertoopenthedoortoprofit-seekingbehaviorinproductandinputmarkets.State-owned,collective,andprivatelyownedfirmshavecomeunderincreasingcompetitivepressuretoreducecosts,ofwhichlaborcostsareamongthemostimportant.Intheabsenceofcostinformationandinthepresenceofcostlymonitoring,indirectmeansofcontrollinglaborcostsandreducingshirkingarerequired.Efficiency-wagepaymentsarerecognizedasanimportantmeansofachievingthesegoals.Wageisdefinedasanamountpaymentunderthecontractofrecruitersforemployees.Thepaymentbasicallyseenaspayingforaparticularcommoditynamed“laborservices”whichlaborusershavepurchased.Theviewsonwagesalsovarydependingonconditions,levelsofsocio-economicdevelopmentandhuman1 perception.ThetheoryofwageisformedveryearlyHicks,J.R.(1932)TheTheoryofWages,andgraduallychangeovereachperiodofdevelopment.Inthisthesis,weonlyconsiderwagesconceptisanagreementbetweenemployerandemployeebyanemploymentcontract,abideinlawofthelaborunion.Besides,wageisanamountofmoneyasthemonthlypaythatemployeesreceivefortheirworkinfirm.Thesystemofwagepolicyisalsocalledremunerationmechanismsfromdifferentfirmsisdifference.Theemployercanbepayforemployeebaseonworkproperty,position,abilities,seniorityorstipulateinanemploymentcontract.Hence,theemployeescannegotiatewagebeforesigningemploymentcontractsinordertoachieveahighrightsalongwithemployeeresponsibilities.Intermsofeconomics,theriseofwageisoneofamethodtoevaluatetheleveloflaborsupply.Therearetwowaystovisionaboutwagegainsitisfromemployeeandemployer.Theemployeeofviewwagegainsasincomeorworthyrewardforworkingefficiency.Contrary,theemployerthinksthatwagegainisacostforusinglaborandmustbedistinctionbetweenphysicalandintellectuallabor.However,thelawsstipulateforthebasicofwagesystemandalsominimumlevelofwagethatfirmsmustbepayfortheemployees.Everyanorganizationsorfirmsallhaveadifferencerewardpolicy.Generally,therearetwoways:directandindirect.Theempiricalresultsshowthatdirectrewardtakeseffectfasterandhelpsobtainingindividuality.Onthecontrary,indirectrewardtakeseffectslower,butagentstendtoformagroupandobtainanothereffectivepositioning.Theargumentisthatpayingworkersahigherwagemayleadtoincreasedproductivityfromtheworker.Ifaworkergetsarelativelyhigherwage,hemayfeelmoreloyalanddevotedtothecompany.Withahigherwage,hemayalsofearbeingmadeunemployedandsowillworkhardertomakesurehekeepshisjob.Therefore,althoughthefirmpaysmore,theygetmoreproductivityfromtheirworkers.Ingeneral,wagepolicyisoneofthemethodencourageworkingperformanceofemployee,sincebootsdevelopmentthefirm.Wagesarealwaysamatterofsocialconcernsbysocio-economicsignificantimplicationsofits.Foremployees,thewagesalwaysarethemostimportantsourceofincometohelpthemensuretheirlivesandfamilies.Forenterprises,thewagesareonepartofproductioncosts.Forthecountry’seconomy,thewagesareconcreteprocessofwealthdistributionandindirecteffectstoconsumption,promoteeconomicdevelopment.2 WagesintheStatesectorhavemoreimportantimplicationsbecauseofitssignificanteffecttosocio-economic.Ifcivilservantsarenotenoughlivingbywageswouldbeamajordisaster,destroytheStatecivilservice.CivilservicewagesshouldbeamajormotivationforcivilservantssticktoStateagencies,devotiontodutywithoutcorruption.Singaporeisatypicalexamplehighwagepaidtocivilservantsandcanbecompetitivenesswiththeprivatesector.ThisisastrategicchoiceoftheSingaporeleaderoverpastdecades(since1988untilnow).Hence,Singaporeattractsandretainstalentedpeopleworkingforthegovernment.SingaporeemergedasastrongeconomywithattractiveinvestmentenvironmentandcleanadministrationandGDPpercapitaranks3ndovertheworld.Thegovernmentalwaystopofthelistintermstransparencyandanti-corruption.Thisisaconsequenceoftreatmentpublicpolicywiseandlucidwhenselectwageofcivilservantsisakeyroletoreform.ButthefactinVietnamisreverse,economicdevelopslowly,andthewageinstateenterpriseislowerthannon-stateenterprise.Vietnamwithpoorlyeconomicaregraduallydevelops.Significantcontributioninthatprocess,therearetherolesofStateorganizationsintheexecutivemanagementoftheeconomy,employment,cultural,social.However,thealarmingrealityisthatthecurrentperformanceoftheorganizationisstillpoorly.Mostrecently,aseriesofbankruptcies,lossesofStatecompaniesaresignificantimpactontheeconomy.Meanwhile,thewagespolicyofpublicfinancialsectoralsoheavilyformalism.ThewagesintheStatesectorislowerthantheNon-Statesector.ItisconsideredasasocialparadoxinVietnam.DoesthelowwagesoneofthecausesofpoorqualityefficientoperationofStatesector?ThatisthereasonIchosethissubject.Throughsubject,authoranalysisclearlythedifferenceofwagebetweenStateandNon-Statesector.Throughit,explainsthecurrentsituationofVietnam"seconomy,simultaneously,givesproposalstoreformthecurrentsalary.Accordingto“Motivationtheories”,wagewasconsideredoneofthemotivationstobeemployeesworkefficiency.So,thelowwageinstateenterpriseisoneofcauseofoperationalinefficiencyinstateenterprise.Therefore,VietNamneedsanewwagereformforofficialsinStatesectorandthisshouldbeconsideredasabreakthroughinthereformagendaofthenationaladministrative.Consequently,onthestatusoftheinefficientoperationofthebusinessinVietnam,wecanusewagetoexplainforthissituation,simultaneously,giverecommendationsandsolutions.3 1.1.2BackgroundThispaperisanempiricalinvestigationoftheefficiency-wageeffectatstateenterpriseandnonstateenterpriseinVietnam.Themarketreformsthatbeganinthelate1980sspreadunevenlyandgraduallytobothstateenterpriseandnonstateenterpriseinordertoopenthedoortoprofit-seekingbehaviorinproductandinputmarkets.State-owned,collective,andprivatelyownedfirmshavecomeunderincreasingcompetitivepressuretoreducecosts,ofwhichlaborcostsareamongthemostimportant.Intheabsenceofcostinformationandinthepresenceofcostlymonitoring,indirectmeansofcontrollinglaborcostsandreducingshirkingarerequired.Efficiency-wagepaymentsarerecognizedasanimportantmeansofachievingthesegoals.WestudytheincentiveeffectsofwagesinVietNamenterprisesinbothstateenterpriseandnonstateenterpriseundervariousownershiparrangements.TheuneventransitiontowardfreemarketsinVietNaminvolveddifferentpoliciesandenforcementin,stateownedversuscollective-andprivately-ownedenterprises.Hence,weexpecttoobservedifferentmanifestationsofwageinstateenterpriseandwageinnonstateenterprise,includingtheapplicationandeffectsofefficiency-wagepolicies,acrossfirms.Thisisnottosaythatmonetaryrewardisnotimportant.Forinstance,variousauthors(Lawler,1971;BakerandJimerson,1992;FurnhamandArgyle,1998)reportedmoneytobeanimportantmotivationaltool.Theefficiencywageanalysis(ChapterTwo)putforwardtheargumentthattheemployerhastoofferwageratesabovethemarketlevelandthiswillencourageemployeestoimproveproductivityandreduceemployeeturnover,enhancethequalityofjobapplicants,increaseemployeemoraleandreducecertainformsofnegativebehaviorsuchasshirkingonthejob(Yellen,1984;EhrenbergandSmith,1988).Incontrast,ifemployerspaywageswhicharelowerthanthemarketclearinglevel,employeesmayhavelowmoraleandbeinvolvedinnegativeactivitiessuchasshirkingandmayfinallyleavethefirmforabetter-payingorganization.AccordingtoShapiroandStiglitz(1984),employeescandecideastowhethertheywanttoworkortoshirkduringtheirdutiesonthejob.Employeeswhoarecaughtshirkingcouldbepunishedbybeingfired.Ifthereisfullemploymentequilibriumandthefirmpaysthesamewageratesasothercompanies,thereisnoopportunitycostofshirkingbecausetheemployeeswhohavebeenfiredcanfindnew4 jobswiththesamewagerateimmediately.Theyarguethatinthesecircumstances,thefirmshouldincreasethewagerateabovethemarketclearingleveltocreateanincentivefornon-shirkingandapenaltyforshirkinginordertoencouragetheemployeestoincreasetheireffortsandnotshirktheirduties.Inthegiftexchangemodel,Akerlof’s(1984)arguedthatwhenthefirmpayshigherwages,itispresentingagifttoencourageemployeestoexhibitpositivebehaviorthatwillbenefitthefirm.MilkovichandNewman(2009)explainedthatiftheemployeefeelsthattheyarebeingrewardedfairlybytheiremployer,andthentheywilljudgethattheyarebeingtreatedfairlyandthiswouldleadtopositivebehaviortowardstheirtaskandcompany.TheideathathigherrealwagescanleadtogreaterproductivityandeventohigherprofitsisfoundinthewritingsofeconomistsasfarbackasAdamSmith.Theemergenceofefficiency-wagetheoryinthe1970swasaresponsetothepersistenceofseveralphenomenathatareinconsistentwithneoclassicaleconomictheory,includinginvoluntaryunemployment,wagedifferencesnotexplainedbythetheoryofcompetitivelabormarketsormodelsofhumancapital,andwagerigidityinthepresenceofcyclicalunemployment.PresentationsoftherelevantmodelsandcitationstotheliteraturearefoundinStiglitz(1986)andKatz(1986).AkerlofandYellen(1986)containsreprintsofanumberofclassicarticlesonefficiency-wagemodelsandpresentsasuccinctintroductionsummarizingalternativeunderlyingrationalesforefficiency-wageschemes.Inarecentpaper,ZhuangandXu(1996)showthatthepositiverelationshipbetweenbonuspaymentsandtotal-factor-productivity(TFP)growthinstate-ownedenterprises(SOEs)reportedbyGroves,Hong,McMillan,andNaughton(1994)canbereplicatedindatathatextendsintotheearly1990s.Moreover,theyshowthatbonusincentivesincreaseprofitsaswellasproductivity.CoadyandWang(2000a)establishevidenceofapositiverelationshipbetweenwagebonusesandprofitsinurbanLiaoningprovince;however,theydonotfinddirectevidencethatbonus-sharingcreatesstrongerworkincentives.DongandPutterman(2000)reportasimilarresultforasampleof1000SOEsoverthedecade1980to1990.Bothpapersconcludethatbonuspaymentsareunderusedbecause,iftheirresultswereproducedbyprocessesinwhichincreasedbonusescausehigherproductivity,increasesinbonuspaymentswouldincreaseprofitsintheirsamplesofenterprises.Yuen(2000)findsthatenterprisesperformbetterfinanciallyifemployees’wagepaymentsarecloselyrelatedtotheiroutput.5 TherelationshipsbetweenwageandworkingeffectivenesswillbeanalyzedandcomparedontheVietNamusingthewagedataofstateenterpriseandnonstateenterprise.Untilnow,thebulkofthestudiesconductedontherelationshipsbetweenefficiencywagesfocusedexclusivelyondevelopedandadvancedcountries.Verylittlehasbeenwrittenabouttheserelationshipsondevelopingcountries.Findingadditionalknowledgeontheexperiencesofdevelopingcountrieswouldnotonlybehelpfulinimprovingtheefficiencyoftheirpublicemployees,butwouldalsoenrichandmakeasignificantcontributiontothecurrentefficiencywage.1.2StructureofThesisThisthesisconsistsoffivechaptersandelevenappendices.Theinformationintheappendicespertainedtotheformulationoftheresearchmethodologiesadoptedinthisthesis.ChapterOneprovidesabriefaccountofthenatureandaimsofthethesisandthemethodologicalframeworkstoconductthestudy.Chaptertwopresentsthetheoreticalbasisfor:wage,motivation,examiningtherelationshipsbetweenwageandworkingeffectiveness.ChapterThreeintroduceabackgroundofVietnameconomicconsist:GDP,DNI…,andintroducethewage’ssituationinVietnam.ThisistheunderlainfortheanalysistobeconductedinChapterFour.Thechapterbeginswithanoverviewofthewageinstateenterpriseandnonstateenterpriseanditsbureaucracy.Itdiscussesthedifferentofwagepolicy,minimumwage,averagewagebetweenstateenterpriseandnonstateenterprise,followedbyacriticalevaluationoftheworkingefficiencyintheStateenterprisebycomparingtheReturnonAssetratiooftwokindenterprisesinthesameindustry.ChapterFouroutlinestherelationshipsbetweenwageandworkingeffectiveness,inframeworksofthisthesisIprovedwageimpactworkingeffectivenessintheStateenterpriseinVietNam.Finally,ChapterFiveoffersasummaryofthefindingswiththeanalysisresultinchapterfourandshowthediscussionandsolutionbywriter"sperspective.1.3LimitationofthisstudyAlthoughthepresentstudyhasyieldedsomepreliminaryfindings,itsdesignisnotwithoutflaws.TheresearchfocusesonStateenterpriseandNonStateenterpriseworkplaces,focusingonasmallsamplenumberofcompaniesandnomorethanthreeindustriesinVietNam.Accesstotheseorganizationswasgainedviatheresearcher’s6 personalnetworks;thefindingsofthestudymaythereforehavesomelimitations.Thestudyislimitedtoexploringthefactorsthataffectorganizationretentionwithinthecontextoftheorganizationalculture,anddoesnotlookatexpatriateemployeesingovernmentorganizationsineitherVietnam.Thisstudyhasanumberoflimitations:Allfindingsarebasedontheinformationprovidedbythecollectiondata,sotheconclusiondependontheexactlyofdatabase.UsingdatabaseofStateandnonstateenterprisetodemonstratewageimpactworkingeffectiveness,sothegeneralizationofthismethodhasnothigh.Theextenttowhichtheobjectivesofthestudycouldbereachedwasaffectedbytimelimitations.Findingsreflectthelabormarketwithinaperiodofglobalcrisis.Onecommonpracticeinqualitativeresearchistoassessinterraterreliabilityforemergingthemes,subthemesandcategoriesofcomment.7 2.THETHEORYOFWAGES2.1Thetheoryofwages2.1.1ThesubsistencetheoryofwagesThesubsistenceTheoryofWages,alsoknownasthe“IronLawofwages”,wasanalledgedlawofeconomicsthatassertedthatrealwagesinthelongrunwouldtendtovalueneededtokeeptheworker’spopulationconstant.Accordingtothistheory,wagestendtomaintaintheeviljustsignificanttomaintaintheemployeesattheminimumsubsistence.Ifthelevelofwagesriseabovethesubsistencelevel,thesupplyoflaborbecomehighinnumberorlarge.Thesupplyoflaborbringswagesdownwardtomaintainthesubsistencelevel.Ifthewagesfallsbelowthesubsistencelevel,thesupplyoflabordecreaseuntilwagesrisestomaintainthesubsistencelevel.Itissupposedthatthesupplyoflaborisinfinitelyelastic.AdamSmithappearstohaveacceptedthesubsistencetheoryofwages,buthisdiscussionwasmoresuggestiveofalternatetheoriesandpossiblemodificationsofthe"ironlaw"(asLassallelatercalledit)thanitwasadefinitestatementofit.Thelowstandardofliving,hedeclared,wasnotacausebutaneffectoflowwages.Fundamentallythesubsistenceoftheworkmanandhisfamilysetthebottomlimitstowages.Ariseinwages,therefore,didnotsomuchimprovethelotofthewageearnerasallowhimtobringmorechildrentoadulthood.Hencehighwagesincreasedthenumberofworkers,andlowwagesreducedthesupply.Wageswereneverabsoluteinamountatagiventime;therewasroomforbargainingtotakeplace.Thediscrepanciesinthebargainingpowerofthewageearnersandtheemployerswereclearlydescribed.Ontheonehand,employerswerefew,norestrictionsweresetupontheirorganization,andtacitagreementsexistedamongthemastowagepolicies.Ontheotherhand,theoppositeconditionsappliedtothewageearners.Variationsinthestatementofthesubsistencetheoryofwagescontinuedtoarise,evenfromthosewhohavebeenregardedasitsstaunchestadvocates.Malthus,basinghistheoryofwagesonhistheoryofpopulation,followedasupplyanddemandthesis,advocatingtherestraintofmarriagesasameansofdecreasingthesupplyofwageearnersandthusraisingthestandardofwages.Thesubsistenceleveldoessetthelevel8 ofwages,butitisasubsistencelevelgovernedbycustom.Malthusdenieditas"thatamountofthosenecessariesandconveniences,withoutwhichtheywouldnotconsenttokeepuptheirnumbers."Thereforewagescouldnotfallbelowthislevelforthevariousclassesofpeoplewithoutafallinthelaborsupplyandaconsequentincreaseintherateofwages.Ricardo"scontributiontothisdoctrinewasthetheoryofthenaturalwageandthemarketwage,thenaturalwagebeingthewagewhichenabledthelaborerstosubsistandperpetuatetheirracewithoutchange.But,headded,thesubsistencelevelwasdeterminedbycustomforthevariousstrataofsociety.Ricardo,ofcourse,merelytransferredhisgeneraltheoryofvaluetoatheoryofwages.Sincevalueisthelaborcostofproduction,wagesarethecostofreproducingthesamequantityoflabor.Variationsinthesupplyoflaborersorchangesinthedemandfortheproductmaychangemarketwages,butinthelongruntheywilltendtoconformtothenaturalwage.Thereisalsotheadmissionthatmarketwagesmightcontinueforanindefiniteperiodabovenaturalwages.Onemustdrawthelogicalinferencethatanincreaseinmarketwagesraisesthecustomarystandardofliving.Doesthenewwagebecomethenaturalwage?Ricardo,withoutbeingawareofit,anticipatedaspectsofthewageproblemwhicharestillplaguingeconomists.Inanexpandingeconomy,Ricardowaswellaware,thingsmayactquitedifferentlythantheydoinastaticperiodofhistory.Stillinlinewiththeclassicaltradition,thistheoryhashadsomethingofarevivalinrecentyearsafterlosinggroundinthelasthalfofthe19thcentury.AlfredMarshalladvancedtheopinionthatwages(Ricardo"snaturalwage)inthelongrunwouldtendtoequalmaintenanceandreproductioncosts.TheSocialistshavefasteneduponRicardiantheoriesandusedthemasajustificationfortheoverthrowofthecapitalistsystem.AccordingtoRicardo,laboristheonlysourceofvalue.Healsosaidthatwagestendedtobejustsufficienttoprovideforsubsistenceandreproductiononagivencustomarystandardoflife.Ittakesnoimaginationtoforeseethesocialistlineofreasoningfromthispointon.Laborhascreatedamplevalueforadecentexistence;inreturnlaborhasreceivedasubsistencewage.Obviously,valuehasbeentakenfromlaborbysomeonewhohadnorighttoitsinceitwasthecreationoflabor.InthehandsofMarxtheseideaswereworkedoutasthetheoryofsurplusvalueandthedoctrineofincreasingmiseryoftheworkingclass.ThelastisanembellishmentofaprocessofchangefirstexplainedbyJ.K.Rodbertus(1805-1875)9 butgivencurrencybyMarxintheCommunistManifesto.Briefly,Marxsaidthatastheproductivityoflaborincreasedthroughdivisionoflaborandtheuseofmachines,thevariationinwagelevelstendedtodisappearsinceskilledworkerswerereducedtounskilled,allwagesfallingtowardthebarestminimumofsubsistence.Consequentlyanincreasingdisproportionappearedbetweenwagespaidtothelaborerandthevaluehecreated.2.1.2Thewage-fundtheoryThewagefundtheoryhasbeenexplainedindetailin"PrinciplesofPoliticalEconomy"authoredbyJSMill.Accordingtothetheory,"Wagesdependuponthedemandandsupplyoflabor,asitisoftenexpressed,ontheproportiontopopulationandcapital.Bypopulationmeans,thenumberofthelaboringclassorratherofthosewhoworkforhireandbycapital,circulatingcapitalandnoteventhewholeofthat,butthepartwhichisexpendedonthedirectpurchaseofthelabor".Thecreditforformulatinganothertheoryofwages,complementaryto,ratherthanasubstitutefor,thesubsistencetheory,goestoJohnStuartMill.Thetheoryknownasthewages-fundorwage-fundtheorywasfirstsuggestedbyAdamSmithwhenheintimatedthatastoreoffundswasavailableoutofwhichwagescouldbepaid.J.R.McCulloch,JamesMill,NassauSenior,Malthus,andRicardoallfoundtheconceptofawages-fundacceptableasanexplanationforthelevelofwages.Wages;accordingtothistheorydescribedbyJohnStuartMill,dependedupontherelationshipwhichexistedbetweenthesupplyofpopulationandthecapitalavailabletoemployworkers.Millwasforcedtoaddqualificationstotheconceptsofpopulationandcapital.Accordingtothistheory,atanygiventime,acertainwagefundisavailable;i.e.adeterminateamountofcapitaldestinedforthepaymentoflabor.Thereissimilarlyadeterminatenumberoflaborerswhomustwork,whateverbethewages.Ifthelaborerswanttogetmore,thereisnoalternativeexcepttoreducetheirnumbersothateachmightgetalargershareofthewagefundwhichisfixed.Outoftheirannualproduce,theproducerssetapartawagefundafterappropriatingtheamountsdueonrent,interestandprofit.Thisfundbecomestheworkingcapitalinthenextperiodandwagesarepaidoutofthisfund.Hence,ithascometobecalledasthewagefund.Thewagesoflaboraredeterminedstrictlyonthebasisoftheformula:10 Thewagesrate=wagefund/numberoflaborersThewagefundthusisconstitutedbythedemandforlaborandtheworkingpopulationandthesupplyoflabor.Accordingtotheruleofcompetition,thefundisdistributedamongtheworkers.Theincreaseinwagesdependonthefollowingfactorsnamely;eitherthenumberofworkersshouldbereducedorthereshouldbeanincreaseinthefundallocatedfordistributionofwages.Increaseinthewagefundisnotunderthecontroloflabor.Itisalsoadvocatedbythewagefundtheory,thatgrowthinpopulationcounteractstheriseinwages.Accordingtotheeconomists,oncethetradeunionsdemandincreaseinwagesandthewagesgetincreasedinonecountry,itisboundtofallinanothercountrysincethewagefundisalwaysfixed.Bytheformerhemeantthosemembersofthelaboringpopulationwhoofferedtheirservicesforhire;andbythelatter,theamountofcapitaltobeusedforthepaymentofwagesandanyamountsincidentaltothehireoflaborers.Thusthefundsavailableforwageswerefixedatanygiventime,andtheonlywaytoincreasewageswastoreducethenumberofwagestobepaidorincreasethecapitalfundsavailable.Thetheoryhadimportantbearingupontherelationoftradeunionsandlegislationtowages.Atbesttheeffectofeitherofthesewouldbemerelytheshiftingofashareofwagesfromonegroupofwageearnerstoanother,sincenoabsoluteincreaseinthetotalwagespaidwaspossible.Thattherewasnofundamentalcontradictionbetweenthesubsistenceandthewages-fundtheoriesisclearlydemonstratedbythefactthatthestrongestadvocatesofthesubsistencetheoryalsoacceptedthewages-fundtheorywithoutcriticism.MillhadinfluentialsupportersforhistheoryinHenryFawcettandJohnElliotCairnes.Totheircredititmustbeadmittedthatamodicumoftruthappearsinthegeneralideathatwagesarepaidinpartoutofcapital.Thisdoesnotvalidatethegeneraltheory,asaglanceatsomeofthefundamentalcriticismswillshow;butitdoesrelieveitofsomeofthestigmaofbeingadistinctcapitalistclassdoctrine.Criticismofthewages-fundtheorycamefromavarietyofsources.Severaldecadesbeforethefinalstatementofthewages-fundtheory,F.B.vonHermanninGermanyhadraisedobjectionstoit.LaterFrancisWalker,FrancisLonge,andW.T.Thorntonpointedoutsucherrorsandimpracticalitiesthatthetheoryfailedtosurvive.Thesewriterspointedoutthatitwastheconsumerswhosetthedemandforlabor,andworkersmightbeprovidedforoutofcurrentincomeaswellasfromcapital.Alsotherewasnospecificfundforwageswhichwasseparablefromotherfundstobeused11 inproduction.The"fund"thenwasreallyamatteroftheemployer"sdiscretionastohowmuchhewouldprovideforwages.Millwasawareofthetellingeffectofthesecriticismsuponhistheory,buthewasnotpreparedtosubmitanother;sohisoriginalstatementscontinuedtostandthoughthegeneralacceptanceofthetheorylostground.2.2MotivationtheoryMotiveisastrongneedwhichhasacertaindegreeofstrengththatpropelsapersontoactforitsfulfillment.Iftheneedormotiveisnotfulfilledapersonremainsrestlessandwhenfulfilledapersonenjoysacertaindegreeofsatisfaction.Certainamountoftensionisharboredbyapersonwhenneedexists.Ifincentivesforaccomplishingaregiven,thepersonismoreenthusiasticforitsimplementation.Greaterthemotive,greateristhetensionandhigherthedesiretofulfill.Ahighdegreeofsatisfactionisexperiencedbyanindividualoncethedesireisfulfilled.Forexampleaclerkwhoknowsmanualtypingontypewritingmachine.Heisawarethatifhelearnscomputershewouldbemoreskilledandhewouldbeabletoachievehigherperformanceinhisjobandwouldprobablygethigherrewardsforthework.Therefore,thereexistsamotivetolearncomputer,duetoitshigherbenefits,theneedgetstransformedintomotivebecauseofitsgreaterstrength.Tillthetimeindividualdoesnotlearncomputerthetensionwon’tbereleased.Oncethisisdone(duetohighermotivation)theindividualandorganizationalobjective(growth)isachieved.Figure2–1:ProcessofmotivationProcessofmotivationManagersmustcreatesituationswhereinaperson/employeeisstimulatedtoundertakeactivitiesthatmaymotivatehimtoachievehighergoals.Creatingasituationbyalleviaterestlessnessofaworker.Toachievehighergoalsapersonshouldworksothattherestlessnessisreducedandlaterremoved.Thisispossiblewhenworkerfeelstoachievesomethinganddivertallhisenergiestowards12 achievement.Thisprocesscouldbecalledmotivatingsubordinates.Forexample,acombatantcanbeselectedascommissionedofficerinthedefenseservicesprovidedheacquirescompetencyasaspecialistinanyfieldmaybeaccounts,equipmentmanagement,weaponryandthelike.Ifaleaderhasbeenabletoigniteasparkandcreatecertainamountofrestlessnessamongdeservingcombatantstoworktowardsoneoftheabovespecializationsothatincourseoftimeheiscommissionedasanofficerinaparticularbranch.Theentireprocesscouldbecalledmotivating.Leadercancontinuouslyidentifysuchsituationsintheworkenvironmentandmotivatehissubordinatesforself-developmentandorganizationalgrowth.2.2.1ClassicaltheoriesofmotivationThemotivationconceptsweremainlydevelopedaround1950’s.Threemaintheoriesweremadeduringthisperiod.Thesethreeclassicaltheoriesare:Maslow’shierarchyofneedstheory,Herzberg’stwofactortheory,TheoryXandTheoryY.Thesetheoriesarebuildingblocksofthecontemporarytheoriesdevelopedlater.Theworkingmangersandlearnedprofessionalstilldateusetheseclassicaltheoriestoexplaintheconceptofemployeemotivation.(a)Maslow’shierarcshyofneedstheory:AbrahamMaslowiswellrenownedforproposingtheHierarchyofNeedsTheoryin1943.Thistheoryisaclassicaldepictionofhumanmotivation.Thistheoryisbasedontheassumptionthatthereisahierarchyoffiveneedswithineachindividual.Theurgencyoftheseneedsvaries.Thesefiveneedsareasfollows:Figure2–2:HierarchyofneedsHierarchyofneedsPhysiologicalneeds:Thesearethebasicneedsofair,water,food,clothingandshelter.Inotherwords,physiologicalneedsaretheneedsforbasicamenitiesoflife.13 Safetyneeds:Safetyneedsincludephysical,environmentalandemotionalsafetyandprotection.Forinstance-Jobsecurity,financialsecurity,protectionfromanimals,familysecurity,healthsecurity,etc.Socialneeds:Socialneedsincludetheneedforlove,affection,care,belongingness,andfriendship.Esteemneeds:Esteemneedsareoftwotypes:internalesteemneeds(self-respect,confidence,competence,achievementandfreedom)andexternalesteemneeds(recognition,power,status,attentionandadmiration).Self-actualizationneed:Thisincludetheurgetobecomewhatyouarecapableofbecoming/whatyouhavethepotentialtobecome.Itincludestheneedforgrowthandself-contentment.Italsoincludesdesireforgainingmoreknowledge,social-service,creativityandbeingaesthetic.Theself-actualizationneedsareneverfullysatiable.Asanindividualgrowspsychologically,opportunitieskeepcroppinguptocontinuegrowing.AccordingtoMaslow,individualsaremotivatedbyunsatisfiedneeds.Aseachoftheseneedsissignificantlysatisfied,itdrivesandforcesthenextneedtoemerge.Maslowgroupedthefiveneedsintotwocategories:Higher-orderneedsandLower-orderneeds.Thephysiologicalandthesafetyneedsconstitutedthelower-orderneeds.Theselower-orderneedsaremainlysatisfiedexternally.Thesocial,esteem,andself-actualizationneedsconstitutedthehigher-orderneeds.Thesehigher-orderneedsaregenerallysatisfiedinternally,i.e.,withinanindividual.Thus,wecanconcludethatduringboomperiod,theemployeeslower-orderneedsaresignificantlymet.(b)Herzberg’sTwofactortheory:In1959,FrederickHerzberg,abehavioralscientistproposedatwo-factortheoryorthemotivator-hygienetheory.AccordingtoHerzberg,therearesomejobfactorsthatresultinsatisfactionwhilethereareotherjobfactorsthatpreventdissatisfaction.AccordingtoHerzberg,theoppositeof“Satisfaction”is“Nosatisfaction”andtheoppositeof“Dissatisfaction”is“NoDissatisfaction”.14 Figure2–3:Herzberg’sviewofsatisfactionanddissatisfactionHerzberg’sviewofsatisfactionanddissatisfactionHerzbergclassifiedthesejobfactorsintotwocategories:Hygienefactors:Hygienefactorsarethosejobfactorswhichareessentialforexistenceofmotivationatworkplace.Thesedonotleadtopositivesatisfactionforlong-term.Butifthesefactorsareabsent/ifthesefactorsarenon-existentatworkplace,thentheyleadtodissatisfaction.Inotherwords,hygienefactorsarethosefactorswhichwhenadequate/reasonableinajob,pacifytheemployeesanddonotmakethemdissatisfied.Thesefactorsareextrinsictowork.Hygienefactorsarealsocalledasdissatisfiesormaintenancefactorsastheyarerequiredtoavoiddissatisfaction.Thesefactorsdescribethejobenvironment/scenario.Thehygienefactorssymbolizedthephysiologicalneedswhichtheindividualswantedandexpectedtobefulfilled.Hygienefactorsinclude:Pay:Thepayorsalarystructureshouldbeappropriateandreasonable.Itmustbeequalandcompetitivetothoseinthesameindustryinthesamedomain.CompanyPoliciesandadministrativepolicies:Thecompanypoliciesshouldnotbetoorigid.Theyshouldbefairandclear.Itshouldincludeflexibleworkinghours,dresscode,breaks,vacation,etc.Fringebenefits:Theemployeesshouldbeofferedhealthcareplans(medicaim),benefitsforthefamilymembers,employeehelpprogrammers,etc.PhysicalWorkingconditions:Theworkingconditionsshouldbesafe,cleanandhygienic.Theworkequipmentsshouldbeupdatedandwell-maintained.Status:Theemployees’statuswithintheorganizationshouldbefamiliarandretained.Interpersonalrelations:Therelationshipoftheemployeeswithhispeers,superiorsandsubordinatesshouldbeappropriateandacceptable.Thereshouldbenoconflictorhumiliationelementpresent.15 JobSecurity:Theorganizationmustprovidejobsecuritytotheemployees.Motivationalfactors:AccordingtoHerzberg,thehygienefactorscannotberegardedasmotivators.Themotivationalfactorsyieldpositivesatisfaction.Thesefactorsareinherenttowork.Thesefactorsmotivatetheemployeesforasuperiorperformance.Thesefactorsarecalledsatisfiers.Thesearefactorsinvolvedinperformingthejob.Employeesfindthesefactorsintrinsicallyrewarding.Themotivatorssymbolizedthepsychologicalneedsthatwereperceivedasanadditionalbenefit.Motivationalfactorsinclude:Recognition:Theemployeesshouldbepraisedandrecognizedfortheiraccomplishmentsbythemanagers.Senseofachievement:Theemployeesmusthaveasenseofachievement.Thisdependsonthejob.Theremustbeafruitofsomesortinthejob.Growthandpromotionalopportunities:Theremustbegrowthandadvancementopportunitiesinanorganizationtomotivatetheemployeestoperformwell.Responsibility:Theemployeesmustholdthemselvesresponsibleforthework.Themanagersshouldgivethemownershipofthework.Theyshouldminimizecontrolbutretainaccountability.Meaningfulnessofthework:Theworkitselfshouldbemeaningful,interestingandchallengingfortheemployeetoperformandtogetmotivated.Thetwo-Factortheoryimpliesthatthemanagersmuststressuponguaranteeingtheadequacyofthehygienefactorstoavoidemployeedissatisfaction.Also,themanagersmustmakesurethattheworkisstimulatingandrewardingsothattheemployeesaremotivatedtoworkandperformharderandbetter.Thistheoryemphasizeuponjob-enrichmentsoastomotivatetheemployees.Thejobmustutilizetheemployee’sskillsandcompetenciestothemaximum.Focusingonthemotivationalfactorscanimprovework-quality.(c)TheoryXandTheoryY:In1960,DouglasMcGregorformulatedTheoryXandTheoryYsuggestingtwoaspectsofhumanbehavioratwork,orinotherwords,twodifferentviewsofindividuals(employees):oneofwhichisnegative,calledasTheoryXandtheotherispositive,socalledasTheoryY.AccordingtoMcGregor,theperceptionofmanagersonthenatureofindividualsisbasedonvariousassumptions.16 TheoryXisatraditionaltheoryofhumanbeingMcGregorassumedthatwithrespecttomanagerialaction.Managementisresponsiblefororganizingvariouselementofanenterpriselikemoney,materialequipmentandpeople.Withrespecttopeople,itisaprocessofdirectingpeople,theirefforts,motivatingthem,controllingtheiractions,modifyingtheirbehaviorssothattheyfitintheorganizations.InTheoryXMcGregorassumedthatpeoplewouldbepassivethereforemanagementmustpersuade,rewardandpunishtheworkertoachievethedesiredbehaviorofworkers.McGregorfurtherstatedthatHumanbeinghaveindolentnature,heworksminimum.McGregorsummariesworkersaslacksambition,dislikeresponsibility,preferstobeled.Anindividualisselfcenteredandindifferenttoorganizationalneeds,bynatureheresistanttochange.Lastly,heisgullibleandnotverybright.IntheoryX,McGregorstatesthatthosewhosubscribetotheviewsexpressedabove,themanagerwillhavetostructure,controlandcloselysuperviseemployees.Externalcontrolhastobeexercisedtowardsimmatureandirresponsiblebehavioroftheemployees,sothattheseenergiescanberegulatedtowardsproductivework.TheoryXisapplicabletotraditionalorganizationalandcharacterizedbycentralizeddecisionmakinghierarchicalpyramidandexternalcontrol.AfterTheoryXwasproposed,McGregorobservedthatsomechangesinhumannaturehavetakenplace.Itwasnotduetothechangesinhumanbehaviorandreactionstovarioussituationsbutduetochangeinindustrialorganizations,managementpoliciesandpracticesthathavetremendouseffectonhumannature.Atthispointheproposed.TheoryYasunder:Expenditureofphysicalandmentaleffortsontheworkofemployeesisasnaturalasplayorrest.Theaveragehumanbeingdoesnotinherentlydislikework.Workersseekdirectionandexercisesselfcontrol.Hedislikespunishment.Commitmenttoorganizationalobjectiveisassociatedwithrewardslikepaypromotionetc,egosatisfactionandsatisfactionofself-actualizationneeds.Averagehumanbeinglearnsunderproperconditions.Heacceptsseeksresponsibilities.Attimes,itwillbeseenthatcertainindividualsdisplayphenomenonlikeavoidanceofresponsibility,lackofambitionandlayunduestressonsecurity.McGregorsuggestedthattheseareduetoinherenthumancharacteristics.17 Capacitytoexercisehighdegreeofimagination,ingenuityandcreativityiswidelydistributedamongworkersthatmustbeidentifiedandfullyutilized.Intellectualpotentialofworkersispartiallyutilized.IntheabovesituationMcGregorrecommendsthattheorganizationshouldreorientbasedonthehumanbehavioralchange.Morecooperation,maximumoutputwithminimumcontrolandself-directionispredominantamongworkers.Itisalsoseenthatthereisnoconflictbetweenindividualandorganizationalgoals.Theemphasisisonverysmoothrunningoforganizationwithgreaterparticipationofindividuals.Thus,wecansaythatTheoryXpresentsapessimisticviewofemployees’natureandbehavioratwork,whileTheoryYpresentsanoptimisticviewoftheemployees’natureandbehavioratwork.IfcorrelateitwithMaslow’stheory,wecansaythatTheoryXisbasedontheassumptionthattheemployeesemphasizeonthephysiologicalneedsandthesafetyneeds;whileTheoryXisbasedontheassumptionthatthesocialneeds,esteemneedsandtheself-actualizationneedsdominatetheemployees.McGregorviewsTheoryYtobemorevalidandreasonablethanTheoryX.Thus,heencouragedcordialteamrelations,responsibleandstimulatingjobs,andparticipationofallindecision-makingprocess.2.2.2ModerntheoriesofmotivationBesidetheclassicaltheoriesofmotivation,buttheyallarenotempiricallysupported.Asfarascontemporarytheoriesofmotivationareconcerned,allarewellsupportedwithevidences.Havesomeofthemoderntheoriesofmotivationare:ERGTheory,McClelland’sTheoryofNeeds.(a)ERGTheory:TobringMaslow’sneedhierarchytheoryofmotivationinsynchronizationwithempiricalresearch,ClaytonAlderferredefineditinhisownterms.HisreworkiscalledasERGtheoryofmotivation.HerecategorizedMaslow’shierarchyofneedsintothreesimplerandbroaderclassesofneeds:Existenceneeds:Theseincludeneedforbasicmaterialnecessities.Inshort,itincludesanindividual’sphysiologicalandphysicalsafetyneeds.Relatednessneeds:Theseincludetheaspirationindividual’shaveformaintainingsignificantinterpersonalrelationships(beitwithfamily,peersor18 superiors),gettingpublicfameandrecognition.Maslow’ssocialneedsandexternalcomponentofesteemneedsfallunderthisclassofneed.Growthneeds:Theseincludeneedforself-developmentandpersonalgrowthandadvancement.Maslow’sself-actualizationneedsandintrinsiccomponentofesteemneedsfallunderthiscategoryofneed.Managersmustunderstandthatanemployeehasvariousneedsthatmustbesatisfiedatthesametime.AccordingtotheERGtheory,ifthemanagerconcentratessolelyononeneedatatime,thiswillnoteffectivelymotivatetheemployee.Also,thefrustration-regressionaspectofERGTheoryhasanaddedeffectonworkplacemotivation.Forinstance-ifanemployeeisnotprovidedwithgrowthandadvancementopportunitiesinanorganization,hemightreverttotherelatednessneedsuchassocializingneedsandtomeetthosesocializingneeds,iftheenvironmentorcircumstancesdonotpermit,hemightreverttotheneedformoneytofulfillthosesocializingneeds.Thesoonerthemanagerrealizesanddiscoversthis,themoreimmediatestepstheywilltaketofulfillthoseneedswhicharefrustrateduntilsuchtimethattheemployeecanagainpursuegrowth.(b)McClelland’sTheoryofNeeds:DavidMcClellandandhisassociatesproposedMcClelland’stheoryofNeeds/AchievementMotivationTheory.Thistheorystatesthathumanbehaviorisaffectedbythreeneeds-NeedforPower,AchievementandAffiliation.Needforachievementistheurgetoexcel,toaccomplishinrelationtoasetofstandards,tostruggletoachievesuccess.Needforpoweristhedesiretoinfluenceotherindividual’sbehaviorasperyourwish.Inotherwords,itisthedesiretohavecontroloverothersandtobeinfluential.Needforaffiliationisaneedforopenandsociableinterpersonalrelationships.Inotherwords,itisadesireforrelationshipbasedonco-operationandmutualunderstanding.Theindividualswithhighachievementneedsarehighlymotivatedbycompetingandchallengingwork.Theylookforpromotionalopportunitiesinjob.Theyhaveastrongurgeforfeedbackontheirachievement.Suchindividualstrytogetsatisfactioninperformingthingsbetter.Highachievementisdirectlyrelatedtohighperformance.Individualswhoarebetterandaboveaverageperformersarehighlymotivated.Theyassumeresponsibilityforsolvingtheproblemsatwork.McClellandcalledsuchindividualsasgamblersastheysetchallengingtargetsforthemselvesandtheytakedeliberaterisktoachievethosesettargets.Suchindividualslookforinnovativeways19 ofperformingjob.Theyperceiveachievementofgoalsasareward,andvalueitmorethanafinancialreward.Theindividualswhoaremotivatedbypowerhaveastrongurgetobeinfluentialandcontrolling.Theywantthattheirviewsandideasshoulddominateandthus,theywanttolead.Suchindividualsaremotivatedbytheneedforreputationandself-esteem.Individualswithgreaterpowerandauthoritywillperformbetterthanthosepossessinglesspower.Generally,managerswithhighneedforpowerturnouttobemoreefficientandsuccessfulmanagers.Theyaremoredeterminedandloyaltotheorganizationtheyworkfor.Needforpowershouldnotalwaysbetakennegatively.Itcanbeviewedastheneedtohaveapositiveeffectontheorganizationandtosupporttheorganizationinachievingitsgoals.Theindividualswhoaremotivatedbyaffiliationhaveanurgeforafriendlyandsupportiveenvironment.Suchindividualsareeffectiveperformersinateam.Thesepeoplewanttobelikedbyothers.Themanager’sabilitytomakedecisionsishamperediftheyhaveahighaffiliationneedastheyprefertobeacceptedandlikedbyothers,andthisweakenstheirobjectivity.Individualshavinghighaffiliationneedspreferworkinginanenvironmentprovidinggreaterpersonalinteraction.Suchpeoplehaveaneedtobeonthegoodbooksofall.Theygenerallycannotbegoodleaders.PsychologicaltheoristDavidMcClellandbelievedthathumanbehaviorismotivatedbythreeneeds:theneedforpower,achievementandaffiliation.Accordingtothistheory,thepowerneedisbasedonaperson"sdesiretoinfluenceotherstohiswishes.Anindividual"sneedforachievementismanifestedthroughhisneedtoexcelandachieveacertainlevelofsuccess.Theneedforaffiliationconcernsitselfwiththeneedtohavepositiveinterpersonalrelationships.2.2.3TheeffectsofmotivationonemployeeperformanceTheauthorsoftheoriespresentedinpreviouspartsofthispapertriedtoexplainwhatmotivatepeopletowork.Theanswertothisquestionisimportantbecauseitisobviouslygoodtounderstandwhatinfluencepeoplebehavior.However,itisnottheonlyreasonforagreatinterestinthetopicofmotivation.Managersmightlookforwaystomotivateemployeesbecausetheyassumethatmotivationcanleadtosomepositiveoutcomesforacompany.Thequestionthatcanbestatedisifmotivationreallyhasinfluenceonpeoples’performanceatwork.20 Researchesshowthatindeedthereisarelationbetweenmotivationandperformance(Deci&Gagne,2005).However,motivationandperformancecannotbetreatedasequivalentphenomena.ThedistinctionbetweenthemwasnotedbyVroom(1964).Hesuggestedthateffectiveaccomplishmentofataskisnotonlyrelatedtomotivationbutalsotootherfactor.Thepicturethatemergedfromhisstudiessuggestedthatevenifpeoplearemotivatedtheycannotperformwelliftheydonotpossesabilitiestofulfillthetask.InVroom’spointofviewmotivationandabilitiesareequallyimportant.Inhisopinionmoreistobegainedbyincreasingabilityfrompeoplewhoarehighlymotivatedtoaccomplishthetaskthanfromthosewhoarenotmotivated.VroomusedindicationfromexistingdataanddescribedrelationshipbetweenmotivationandperformanceasaninvertedUfunction.Hypotheticalrelationshipsbetweenamountofmotivationandalevelofperformance.Figure2–4:Amountofmotivationforperformance.Inotherwordsperformanceisnotconstantlyincreasingwhenlevelmotivationisrising.Vroom(1964)citedanearlystudywhichshowedthatthathighestlevelofmotivationdoesnotleadtothehighestperformance,especiallywhenthetaskisdifficult.Infact,extremelyhighlevelsofmotivationleadtolowerperformancethanmoderatelevels.Thisrelationisexplainedintwoways.Firstassumesthathighlevelsofmotivationnarrowthecognitivefield.Secondsuggeststhathighlymotivatedpeopleareafraidoffailureandthatresultsinalowerperformance.Otherauthorsmentionedseveralfactorsthatmightlimitemployees’performancesuchasrestrictedpracticesoftheirsuperiors,limitsofcompanypoliciesandphysicalwork21 environment–lightening,temperature,noiseoravailabilityofmaterials(Pinder,1998).Limitationsofpeoples’performanceareanimportantsubject.However,itseemsthattherearemorestudiesthatsearchfortheanswertothequestionwhatcanpositivelyinfluenceperformanceofemployees.Companiesoftenuseincentivestomotivatetheiremployees.Meta-analysisontheeffectsofincentivesonworkplaceperformanceconductedbyCondly,ClarkandStolovitch(2008),showssomeinterestingfindings.Theauthorsfoundthataverageeffectofallincentiveprogramsinallworksettingsleadto22%gaininperformance.Itmeansthatincentivescansignificantlyincreaseperformancebut,asauthorsclaim,theyhavetobecarefullyimplemented.Resultsofthisstudyindicatedthatsomesettingsarebetterthanotherstoincreaseperformance.Forexample,ifwetakeintoconsiderationincentiveprogramsitcomesupthattheyleadtobetterperformanceofemployeesifamechanismoftheprogramincludescompetitionbetweenemployeestoearnabonus.Anotherimportantfeatureofincentivesprogramsistheirlength.Longprogramsincreaseperformancemoresignificantlythatshortprograms.Oneofthegreatestdifferencesbetweenlevelsofperformanceinauthors’analysiswasbetweenincentivesofferedtoteamsandindividuals.Teamdirectedincentiveshavemuchstrongereffectonperformancethanindividualdirectedincentives.Finally,incentiveshavelesssignificantimpactiftheyareusedtogetpeopledosomethingthantogetpeopledothejobinasmarterwayortobemorepersistentatjobthatpeoplealreadystarted.Thelastimportantfindingofthestudywasarelationbetweenatypeofincentivesandperformance.Studiesindicatedthatmonetaryincentivesresultedinahigherperformancethannonmonetaryincentives(Condly,Clark,&Stolovitch,2008).FreyandOsterloch(2002)intheirbookaboutsuccessfulmanagementbymotivationstressedanimportantfactthatcanexplainrelationbetweenperformanceandmotivation.Theysuggestedthatdifferentpeoplehavedifferentgoalsintheirlife.Therefore,particularmotivatorsinfluenceperformanceofindividualsdifferently.Thereareemployeeswhoaremotivatedextrinsically.Authorsdividedthemintotwotypes:IncomemaximizesandStatusseekers.Incomemaximizesareonlyinterestedinearningmoneyforconsumptiongoodsandtheyfindworkanunpleasantduty.Statusseekerssearchforsocialcomparisons.Workforthemisatooltogain“positionalgoods”thatshowstheirhighstatus.Employeescanbealsomotivatedintrinsically.Therearethreegroupsofthemcharacterizedbyspecificfeatures.Loyalistsidentify22 personallywiththegoalsofcompanytheyworkfor.Formalistsarefocusedonproceduresandrulesexistinginacompany,whileAutonomistspursuitforownideology.Definingthosetypesofemployeeshelpstopredictwhichkindofmotivatorsareeffectiveinincreasingindividuals’performance.Asanexample,performance-relatedpayincreasesperformanceofIncomemaximizes,especiallywhenitispaidoutasmoneyratherthanfringebenefits.Theconditionthathastobemetisthatemployeesseeclearrelationshipbetweencompensationandperformance.Statusseekerscanalsobemotivatedbywagesaslongastheyletthemdistinguishthemselvesfromotherpeople.Intheircasecompensationdoesnothavetobeinaformofmoney.Theywouldratherpreferotherbenefitsthatdirectlyshowtheirstatus.Performance-relatedpaycanalsoreduceperformance.Loyalistmayunderstandthiskindofrewardingasasignalthattheirworkisconsideredbycompanyasinadequate.Formalistsalsomayfeelthatcompanytriestochangethewaytheywork.Finally,Autonomistswouldlosetheirintrinsicmotivationbecausetheirselffulfillingworkconceptisputondoubt.Not-financialrewardsalsoneedtobematchedwithemployees’types.ForexamplepraisewouldbedesiredbyStatusseekersbutwouldbenotmotivatingatallforIncomemaximizeswhocannotbuyanythingforit.AutonomistmayfeelthatmanagementtrytoabsorbthemintotheorganizationandFormalistsmaynotappreciatepraiseasthey“justdotheirjob”.Anotherwaytoincreaseperformanceisimplementingcommandsandsanctions.ThiswaywouldbeeffectiveforFormalistswhounderstandthemasaguide.Ontheotherhand,itcandramaticallyreduceperformanceofothertypesofemployees.Incomemaximizes,Statusseekers,LoyalistandAutonomistseecommandsasrestrictions,whatresultincrowding-outtheirintrinsicmotivationtowork.ParticipationcanbehelpfultoolthatpositivelyaffectperformanceofAutonomistbutitwouldbetreatedaswasteoftimebyIncomemaximizesandStatusSeekersastheyarenotinterestedintheworkitself.Finally,autonomyunderstoodaspossibilitytomakeowndecisioniscrucialforLoyalistandwoulddefinitelyincreasetheirperformance.Forothertypesofemployeesautonomywouldnotbeaneffectivewayofincreasingtheirefforts.Thecharacteristicsofemployees’typespresentedheresuggestthatpeoplehavedifferentexpectationsanddesiresatwork.Somerewardscanbereallyrewardingforthembutothersareratherseenasfactorsthatnegativelyinfluencetheirperformance(Frey&Osterloch,2002).23 Thequestionthatoccursinthispointisifmonetarywaysofmotivatingpeoplearebetterthatnon-monetaryways.Iftheyarenot,whatthebestwaystomotivateemployeesnot-financiallyare.Thoseproblemsarebroadlydiscussedbymanyresearchersandprofessionalsandseemtobringmanyoppositeopinions.Thatiswhytheywillbepresentedseparatelyinthenextpartofthispaper.2.3Impactofwageonworkingeffectiveness.2.3.1EfficiencywagetheoryTheideaoftheefficiencywagetheoryisthatitmaybenefitfirmstopayworkersawagehigherthantheirmarginalrevenueproduct.Theargumentisthatpayingworkersahigherwagemayleadtoincreasedproductivityfromtheworker.Ifaworkergetsarelativelyhigherwage,hemayfeelmoreloyalanddevotedtothecompany.Withahigherwage,hemayalsofearbeingmadeunemployedandsowillworkhardertomakesurehekeepshisjob.Therefore,althoughthefirmpaysmore,theygetmoreproductivityfromtheirworkers.Theterm"efficiency-wages"(orrather"efficiency-earnings")hasbeenintroducedbyAlfredMarshalltodenotethewageperefficiencyunitoflabor.Marshallianefficiencywageswouldmakeemployerspaydifferentwagestoworkerswhoareofdifferentefficiency,suchthattheemployerwouldbeindifferentbetweenmoreefficientworkersandlessefficientworkers.Themodernuseofthetermisquitedifferentandreferstotheideathathigherwagesmayincreasetheefficiencyoftheworkersthroughvariouschannelsandmakeitworthwhilefortheemployerstoofferwagesthatexceedamarket-clearinglevel.Thereareseveraltheories(or"microfoundations")ofwhymanagerspayefficiencywages(wagesabovethemarketclearingrate):Avoidingshirking:Ifitisdifficulttomeasurethequantityorqualityofaworker"seffort—andsystemsofpieceratesorcommissionsareimpossible—theremaybeanincentiveforhimorherto"shirk"(dolessworkthanagreed).Themanagerthusmaypayanefficiencywageinordertocreateorincreasethecostofjobloss,whichgivesastingtothethreatoffiring.Thisthreatcanbeusedtopreventshirking(or"moralhazard").IntheShapiroandStiglitzmodel,workerseitherworkorshirk,andiftheyshirktheyhaveacertainprobabilityofbeingcaught,withthepenaltyofbeingfired.Equilibriumthen24 entailsunemployment,becauseinordertocreateanopportunitycosttoshirking,firmstrytheirwagesraisesabovethemarketaverage(sothatsackedworkersfaceaprobabilisticloss).Butsinceallfirmsdothisthemarketwageitselfispushedup,andtheresultisthatwagesareraisedabovemarket-clearing,creatinginvoluntaryunemployment.Thiscreatesalow,ornoincomealternativewhichmakesjoblosscostly,andservesasaworkerdisciplinedevice.Unemployedworkerscannotbidforjobsbyofferingtoworkatlowerwages,sinceifhired,itwouldbeintheworker’sinteresttoshirkonthejob,andhehasnocrediblewayofpromisingnottodoso.ShapiroandStiglitzpointoutthattheirassumptionthatworkersareidentical(e.g.thereisnostigmatohavingbeenfired)isastrongone–inpracticereputationcanworkasanadditionaldiscipliningdevice.Minimizingturnover:Bypayingabove-marketwages,theworker"smotivationtoleavethejobandlookforajobelsewherewillbereduced.Thisstrategymakessensebecauseitisoftenexpensivetotrainreplacementworkers.Onthelaborturnoverflavoroftheefficiencywagehypothesis,firmsalsoofferwagesinexcessofmarket-clearing(e.g.Salop1979,Schlicht1978,Stiglitz1974),duetothehighcostofreplacingworkers(search,recruitment,trainingcosts).Ifallfirmsareidentical,possibleequilibriuminvolvesallfirmspayingacommonwagerateabovethemarket-clearinglevel,withinvoluntaryunemploymentservingtodiminishturnover.Thesemodelscaneasilybeadaptedtoexplainduallabormarkets:iflow-skill,labor-intensivefirmshavelowerturnovercosts(asseemslikely),theremaybeasplitbetweenalow-wage,low-effort,high-turnoversectorandahigh-wage,higheffort,low-turnoversector.Again,moresophisticatedemploymentcontractsmaysolvetheproblem.Selection:Ifjobperformancedependsonworkers"abilityandworkersdifferfromeachotherinthoseterms,firmswithhigherwageswillattractmoreablejob-seekers,andthismaymakeitprofitabletoofferwagesthatexceedthemarketclearinglevel.Inselectionwagetheoriesitispresupposedthatperformanceonthejobdependson“ability”,andthatworkersareheterogeneouswithrespecttoability.Theselectioneffectofhigherwagesmaycomeaboutthroughself-selectionorbecausefirmsfacedwithalarger25 poolofapplicantscanincreasetheirhiringstandardsandtherebyobtainamoreproductiveworkforce.Self-selection(oftenreferredtoasadverseselection)comesaboutiftheworkers’abilityandreservationwagesarepositivelycorrelated.Therearetwocrucialassumptions,thatfirmscannotscreenapplicantseitherbeforeorafterapplying,andthatthereiscostlessself-employmentavailablewhichrealizesaworker’smarginalproduct(thatishigherforthemoreproductiveworkers).Iftherearetwokindsoffirm(lowandhighwage),thenweeffectivelyhavetwosetsoflotteries(sincefirmscannotscreen),thedifferencebeingthathigh-abilityworkersdonotenterthelow-wagelotteriesastheirreservationwageistoohigh.Thuslow-wagefirmsattractonlylow-abilitylotteryentrants,whilehigh-wagefirmsattractworkersofallabilities(i.e.onaveragetheywillselectaverageworkers).Thushigh-wagefirmsarepayinganefficiencywage–theypaymore,and,onaverage,getmore(seee.g.Malcolmson1981;Stiglitz1976;Weiss1980).However,theassumptionthatfirmsareunabletomeasureeffortandpaypieceratesafterworkersarehiredortofireworkerswhoseoutputistoolowisquitestrong.Firmsmayalsobeabletodesignself-selectionorscreeningdevicesthatinduceworkerstorevealtheirtruecharacteristics.Iffirmscanassesstheproductivityofapplicants,theywilltrytoselectthebestamongtheapplicants.Ahigherwageofferwillattractmoreapplicants,andinparticularmorehighlyqualifiedapplicants.Thispermitsafirmtoraiseitshiringstandardandtherebyenhancethefirm"sproductivity.Wagecompressionmakesitprofitableforfirmstoscreenapplicantsundersuchcircumstances,andselectionwagesmaybeimportant.Sociologicaltheories:Efficiencywagesmayresultfromtraditions.Akerlof"stheory(inverysimpleterms)involveshigherwagesencouraginghighmorale,whichraisesproductivity.Akerlof(1982)providedthefirstexplicitlysociologicalmodelleadingtotheefficiencywagehypothesis.Usingavarietyofevidencefromsociologicalstudies,Akerlofarguesthatworkereffortdependsontheworknormsoftherelevantreferencegroup.InAkerlof’spartialgiftexchangemodel,thefirmcanraisegroupworknormsandaverageeffortbypayingworkersagiftofwagesinexcessoftheminimumrequired,inreturnforeffortabovetheminimumrequired.Thesociologicalmodelcanexplainphenomenainexplicableonneoclassicalterms,suchaswhyfirmsdo26 notfireworkerswhoturnouttobelessproductive;whypieceratesaresolittleusedevenwherequitefeasible;andwhyfirmssetworkstandardsexceededbymostworkers.Apossiblecriticismisthatworkersdonotnecessarilyviewhighwagesasgifts,butasmerelyfair(particularlysincetypically80%ormoreofworkersconsiderthemselvestobeinthetopquarterofproductivity),inwhichcasetheywillnotreciprocatewithhigheffort.Nutritionaltheories:Indevelopingcountries,efficiencywagesmayallowworkerstoeatwellenoughtoavoidillnessandtobeabletoworkharderandevenmoreproductively.ThenutritionbasedefficiencywagetheorywasfirstproposedbyLeibenstein(1957),andfurtherbyMazumdar(1959)andBlissandStern(1978).Thetheoryprovidesalinkbetweenwages,nutritionandproductivity.Itaimsprimarilyatexplainingthelinkbetweenwagesandproductivityinagricultureindevelopingcountries.Thetheoryisextendedtoexplainwagerigidityinthefaceofunemployment.Theextensionissupposedtoprovideanswerstothequestion:“whatpreventsunemployedworkersfromobtainingemploymentbybiddingdownthewage?”bySwamy(1997).Accordingtothetheory,employersdonotlowerwagesbecauseiftheydotheworkerswouldthenconsumeless,therebyloweringtheirproductivity.Thus,thetheoryprovidesendogenouslyinducedwagerigidity.Thisvariantoftheefficiencywagetheoryisparticularlyrelevanttodevelopingcountries.Themodelofefficiencywages,largelybasedonshirking,developedbyCarlShapiroandJosephE.Stiglitzhasbeenparticularlyinfluential.Particularly,aninverserelationshipbetweenwagesandsupervisionintensityisapre-dictionofboththe`shirking"(ShapiroandStiglitz1984)andthe`gift-exchange"(Akerloff1982)modelofefficiencywages,althoughthisoccursviadifferentmechanism.Intheshirkingmodel""anincreaseinthewage,providedthateverythingelseisconstant,increasesthepenaltytotheshirkerwheniscaughtandbeingdismissedandthusdiscouragesshirking.Ontheotherhand,effortisincreasinginmonitoringintensity,againceteris-paribus,becausethisincreasestheprobabilityofdetectionofashirkingworkerwhichinturndecreasestheexpectedpayoffofshirkingandthusinducesmoremotivation.Giventhateffortisincreasinginboththewageandmonitoringintensity,weexpectthatthesemotivationdevicesaresubstitutesinelicitingeffort,whichimpliesthat,inequilibrium,anincreaseintheone,forgiveneffort,willresultinadecreaseintheother.27 Inotherwords,inequilibrium,ifthewageisincreasedthiswilldecreasethepropensityofaworkertoshirk,andforgiveneffort,monitoringintensitymustberelaxedandviceversa.Therefore,forgivenemployee"seffortthereisatrade-offbetweenwagesandmonitoringintensity.Inthe`gift-exchange"model,supervisionisnotcentraltotheproblemofmotivation.Ratherfirmsdevoteresourcestosupervisioninordertocoordinatetheactivitiesofthedirectproducersandensureproductqualityexpost(Rebitzer1995).Under,thismodelhigherpayisconsideredasa`gift"thatappealstonormsofreciprocity,andthusinducesmoreeffortandsubstitutionofself-monitoringforexternalmonitoring.Thus,therearcstwodifferentmechanismsviawhichthewage-supervisiontrade-offmayresult,inefficiencywagetheory.2.3.2Impactofwageonworkingeffectiveness.Theoverviewofcontentandprocesstheoriesbringssomeimportantfindings.Definitelyamotivationinfluenceonemployees’performanceexists.Motivationisthusafactoringeneratingperformance,whetherindividualoarsagroup.AccordingtotheideasdevelopedbyFrederickTaylor,thewaystoincreaseefficiencyinhumanresourcesworkliesinprovidingsalaryrewardsandonstandardizationofwork.Heintroducestheconceptof"premiumforefficiency",asarewardforthosewhodomorethanthedailynormestablished.I.S.Adams,ontheotherhand,assumesthatrewardsmustbecalculatedinaccordancewitheachindividual"scontributiontothetasksandthusregardingtothewaysforcarryingouttheactivities.Themotivationprocessisconducteddirectlyrelatedtothetypeofmotivation(intrinsicorextrinsic).Thefirstoneisdevelopedbythetypeofworkperformed,whilethesecondtakesplacewhenanexternalelement,notdirectlyconnectedwiththeirwork,generatessatisfaction,allthesealongwithotherreasoningmechanismsorinstrumentsincludingspecializedtraining,counselingandtheopportunitytoadvancewithintheorganization.Motivationcanbedescribedasintrinsicandextrinsic.Somefactorsaremoremotivatingthenothers.Researchersputmuchefforttofindoutwhichofthemarethebestmotivators.Themostcommonfactorsthataretakenintoconsiderationcomefromtwocategories:monetaryandnon-monetaryincentives.AsArmstrong(2007)wrote,moneyisamotivatorbecauseitsatisfiesalotofneeds.Itisafactorwhichisindispensableforlifeandwhichisneededtosatisfybasicneedsofsurvival28 andsecurity.Higherneedssuchasself-esteemcanalsobesatisfiedbyit.Moneyletpeoplebuythingsthatshowtheirstatusandcreateavisiblesignofappreciation.Inotherwords,moneyisasymbolofmanyintangiblegoalswhatmakesitapowerfulmotivatingfactor.Somecrediblestudiesconfirmthatinfactmoneyisagoodmotivator.Wagepolicy,consideredasawhole,representsapartofthegeneralpolicyoftheorganization,aswellasbeingatoolforstimulatingefficiencyandincreasingindividualandorganizationalperformance.Wagedefinitionsdifferfromoneauthortoanother,fromoneapproachtoanother,fromtheviewaccordingtowhichitrepresentsanamountofmoneyreceivedfortherenderingofactivitiesunderthetermsofanemploymentcontract,andtothecriteriasetoutinlaw,approvedbyministerialorder,detailingtheelementscontainedinindividualsalaryandliststhemasfollows:grosssalary,bonuses,allowancesetc.Accordingtothebasicconceptsofeconomy,salarymaybeoftwotypes:ononehandwetalkaboutnominalwages,resultedintheamountofmoneyreceivedbytheemployee,ontheotherhandthereisarealsalary,bywhichwemeantheactuallyamountofgoodsorservicesthatcanbepurchasedwiththatsumofmoney.Andwagescanbemadeaccordingtojobresponsibilities,accordingtoexpertise,skillsandabilities,oraccordingtoapre-determinedscalestrict.Senioritymaybeacriterionfordeterminingwages,especiallyinthepublicsystem.Economistshavehistoricallyfocusedontherelationshipbetweenincentivesandbehaviorinordertoexplainhumanaction.Wageshavebeenconsideredtheincentiveidentifiedtomotivateworkandcompensateforthedisutilityofthetask.Wagesappropriatelyplayalargeroleinmosteconomictheoryrelatedtotheproductionprocess.Inthemodernera,asignificantamountofresearchanalyzingmotivation(includingwageasafactor)hasbeendonebysociologistandorganizationalbehaviorspecialists.Thesestrainsofsocialscience,separatefromeconomics,haveproducedalargebodyofwork,boththeoreticalandempirical.Themotivationalresearchbothsupportsanddiscreditscertainelementsoftheeconomictheories.Wageasamotivatorhasbeenawellstudiedtopicbyalargenumberofresearchers.Thefactorisoftenseenasasymbolofsuccess(TangandKim,2002),andalsoassociatedwithcomfortandsecurity(EngelbergandSjöberg,2006).Wageiscommonlyknownthatmanagersusewageasastrategytoattractandretain29 employees,sinceitisevidentthatmoneycanhaveagreatimpactonemployees´workingeffectiveness.Employees’attitudestowardsmoneycanbeaffectedbyone’sincomeandemploymentstatus.TheHayGroupconductedastudywithhalfamillionemployeesfromhundredsofcompanies,whichreportedthatpaymentwastheleastimportantmotivationalfactoramongfiftyfactorsatwork(KayeandEvans,2003).Furthermore,anotherstudybyTang,Tillery,LazarevskiandArocas(2004)examinestheloveofmoneyamongsmallbusinessownersintheRepublicofMacedonia.Inrecentyearsthecountryhasexperiencedrapidchangesinagricultureandtourism.Theresultsshowedthatthebusinessownersvaluedmoneyhighlyandthatmoneywasasignofsuccess(Tangetal.,2004).Mostcompaniesoffersomekindofperformancebonus,alsoknownas:incentivecompensation(Liu,Combs,KetchenandIreland,2007).Thistypeofperformancerelatedcompensationisawellstudiedpracticewithinhumanresourcemanagementwhereover30studieshaverevealedapositivemotivationalconnectionbetweenperformanceandcompensation(Liuetal.,2007).Tosummarizethediscussionaboutmoneyasamotivator;thereissubstantialevidencethatpayisimportantandcanbeapowerfultoolformanagerswhenmotivatingemployees.Despitetheself-evidentresult,theimportanceofmoneyseemstobeunderreportedbyemployees.Onereasonforthis,asexplainedinthearticlebyRynesetal.(2004),mightbeduetosocialnormswherethereisanunwrittenruleorbeliefthatotherthingsaremoreimportantthanhavingahighsalary.Especiallyintheservicesector,factorssuchascontributionandacknowledgementseemtobemoreimportant,asthestudybyChengandRobertson(2006)reveal.AtheoreticalexplanationwhysalaryisimportantcanbeillustratedbyMaslow’shierarchyofneeds.Moneycansatisfyalotofneedsinthepyramid,frombasicneedssuchasfoodandwater,toevenimproveone’ssocialstatus,provideforgoodeducationandthepossibilitytoretireearly(Rynesetal.,2004).Inaddition,thereareotherimportantfactorsaswell,butitisofvaluetorecognizethatpaydoqualifyamongthetopfactors.Theargumentisthatpayingworkersahigherwagemayleadtoincreasedproductivityfromtheworker.Ifaworkergetsarelativelyhigherwage,hemayfeelmoreloyalanddevotedtothecompany.Withahigherwage,hemayalsofearbeingmadeunemployedandsowillworkhardertomakesurehekeepshisjob.30 Therefore,althoughthefirmpaysmore,theygetmoreproductivityfromtheirworkers.Ingeneral,wagepolicyisoneofthemethodencourageworkingperformanceofemployee,sincebootsdevelopmentthefirm.Intermsofeconomics,theriseofwageisoneofamethodtoevaluatetheleveloflaborsupply.Therearetwowaystovisionaboutwagegainsitisfromemployeeandemployer.Theemployeeofviewwagegainsasincomeorworthyrewardforworkingefficiency.Contrary,theemployerthinksthatwagegainisacostforusinglaborandmustbedistinctionbetweenphysicalandintellectuallabor.However,thelawsstipulateforthebasicofwagesystemandalsominimumlevelofwagethatfirmsmustbepayfortheemployees.31 3.CONTEXTOFVIETNAMESE’SWAGE.3.1OverviewofVietnameconomicVietnaminitiatedeconomicrenovationin1986,shiftingfromthecentrally-plannedeconomywithstatesubsidiestoasocialist-orientedmarketeconomyinimplementationofindustrialization,modernizationofthecountry,diversificationandmultilateraldevelopmentofeconomicexternalrelationsforanopen–door,worldintegrationpolicy.Vietnamisadensely-populateddevelopingcountrythathasbeentransitioningfromtherigiditiesofacentrally-plannedeconomysince1986.Vietnameseauthoritieshavereaffirmedtheircommitmenttoeconomicmodernizationinrecentyears.VietnamjoinedtheWorldTradeOrganizationinJanuary2007,whichhaspromotedmorecompetitive,export-drivenindustries.VietnambecameanofficialnegotiatingpartnerintheTrans-PacificPartnershiptradeagreementin2010.Agriculture"sshareofeconomicoutputhascontinuedtoshrinkfromabout25%in2000tolessthan22%in2012,whileindustry"sshareincreasedfrom36%tonearly41%inthesameperiod.State-ownedenterprisesaccountforroughly40%ofGDP.Povertyhasdeclinedsignificantly,andVietnamisworkingtocreatejobstomeetthechallengeofalaborforcethatisgrowingbymorethanonemillionpeopleeveryyear.TheglobalrecessionhurtVietnam"sexport-orientedeconomy,withGDPin2012growingat5%,theslowestrateofgrowthsince1999.In2012,however,exportsincreasedbymorethan18%,year-on-year;severaladministrativeactionsbroughtthetradedeficitbackintobalance.Between2008and2011,Vietnam"smanagedcurrency,thedong,wasdevaluedinexcessof20%,butitsvalueremainedstablein2012.Foreigndirectinvestmentinflowsfell4.5%to$10.5billionin2012.Foreigndonorshavepledged$6.5billioninnewdevelopmentassistancefor2013.Hanoi(VietNamcapital)hasoscillatedbetweenpromotinggrowthandemphasizingmacroeconomicstabilityinrecentyears.InFebruary2011,thegovernmentshiftedfrompoliciesaimedatachievingahighrateofeconomicgrowth,whichhadstokedinflation,tothoseaimedatstabilizingtheeconomy,throughtightermonetaryandfiscalcontrol.AlthoughVietnamunveiledabroad,"threepillar"economicreformprograminearly2012,proposingtherestructuringofpublicinvestment,state-ownedenterprises,32 andthebankingsector,littleperceptibleprogresshadbeenmadebyearly2013.Vietnam"seconomycontinuestofacechallengesfromanundercapitalizedbankingsector.Non-performingloansweighheavilyonbanksandbusinesses.InSeptember2012,theofficialbaddebtratioclimbedto8.8%,thoughsomeindependentanalystsbelieveitcouldbehigherthan15%.3.1.1GDPFollowingeconomicstagnationafterreunificationfrom1975to1985,the1986SixthPartyCongressapprovedbroadeconomicreforms(knownas"DoiMoi,"or"renovation")thatintroducedmarketreforms,openedupthecountryforforeigninvestment,anddramaticallyimprovedVietnam"sbusinessclimate.Vietnambecameoneofthefastest-growingeconomiesintheworld,averagingaround8%annualgrossdomesticproduct(GDP)growthfrom1990to1997and6.5%from1998-2003.GDPgrewmorethan8%annuallyfrom2004to2007,slowedto5.3%growthin2009,recoveredto6.8%in2010,andreached5.8%overthefirst9monthsof2011.Figure3-1:GrossDomesticProductofVIETNAMin2004–2013.VIETNAMGDPBillionsofU.S.dollars2001501005002004200520062007200820092010201120122013Source:www.tradingeconomics.com/worldbankTheGrossDomesticProduct(GDP)inVietnamwasworth171.39billionUSdollarsin2013.TheGDPvalueofVietnamrepresents0.28percentoftheworldeconomy.GDPinVietnamaveraged47.87USDBillionfrom1985until2013,reachinganalltimehighof171.39USDBillionin2013andarecordlowof6.30USDBillionin1989.(GDPinVietnamisreportedbytheWorldBank.)33 Figure3-2:GrossDomesticProductPerCapitaofVIETNAMin2004–2013.VIETNAMGDPPERCAPITAGDPPerCapitainUSDollarsatConstantPrices12001028.631000895.9931.03854.32808.49775.76800735.52687.43642.25599.2160040020002004200520062007200820092010201120122013Source:WorldBankindicatorsbycountryabouttradingeconomic.TheGrossDomesticProductpercapitainVietnamwaslastrecordedat1028.63USdollarsin2013.TheGDPperCapitainVietnamisequivalentto8percentoftheworld"saverage.GDPpercapitainVietnamaveraged502.09USDfrom1984until2013,reachinganalltimehighof1028.63USDin2013andarecordlowof234.66USDin1984.GDPpercapitainVietnamisreportedbytheWorldBank.Figure3-3:GrossDomesticProductPerCapitaGrowthRateofVIETNAMin2004–2013.VIETNAMGDPGROWTHRATEYEARLYPercentChangeinGrossDomesticProduct108.48.28.57.786.86.25.965.35.055.64202004200520062007200820092010201120122013Source:WorldBankindicatorsbycountryabouttradingeconomic.Formorethanadecade,GDPhasgrownnotablyyeaar-on-year:6.9%growthin2001,7.0%in2002,7.3%in2003,7.7%in2004,8.4%in2005,8.2%in2006,8.5%in2007and6.18%in2008.In2009,VietNamachievedeconomicgrowthof5.3%,34 exceededgoals,andrankedhighestintheworldforeconomicgrowth.Sectorgrowthratesfor2009of1.8%foragriculture,forestryandfisheries;5.5%forindustryandconstruction;and6.6%fortheservicesector.AndVietnam"sGDPgrowthratebeginstoslowintheyearsfollowing,untiltheendof2013was5.6%.GDPgrowthforecastonly5.5%in2014.ButtheGrossDomesticProduct(GDP)inVietnamexpanded5.25percentinthesecondquarterof2014overthepreviousquarter.3.1.2GNIDuring1981-2013GNIofVietNamincreasedby147.1billionUSdollars(in78.4times)to162.8billionUSdollars;changeoccurredby1.1billionUSdollarsbyincreasingpopulationofVietNamby33.9million,aswellasby146billionUSdollarsbyincreasingofGNIpercapitainVietNamby1607.1USdollars.TheaverageannualgrowthofGNIofVietNamwas4.7billionUSdollarsor249.7%.ShareintheWorldroseby0.2%.ShareinAsiaroseby0.53%.ShareinSouth-EasternAsiaincreasedby5.6%.During1981-2013GNIpercapitainVietNamroseby1607.1USdollars(in49.1times)to1730USdollars.TheaverageannualgrowthofGNIpercapitainVietNamwas51.8USdollarsor155.2%.Figure3-4:GrossNationalIncomeofVIETNAMin2004–2013.VIETNAMGNIBillionsofU.S.dollars180162.8160149140129.7111.5120101.496.210075.28064.956.66044.6402002004200520062007200820092010201120122013Source:WorldBankindicatorsbycountryabouttradingeconomic.GNIofVietNamwasequalto162.8billionU.S.dollarsin20013andGNIofVietNamintheworldwas0.21%.TheGrossNationalIncome(GNI)inVietnamwas35 worth162.8billionUSdollarsin2013.TheGNIvalueofVietnamrepresents0.28percentoftheworldeconomy.GNIinVietnamaveraged47.87USDBillionfrom1985until2013,reachinganalltimehighof162.8USDBillionin2013andarecordlowof6.30USDBillionin1989.(GDPinVietnamisreportedbytheWorldBank.).Fiigure3–5:GrossnationalincomePerCapitaGrowthRateofVIETNAMin2004–2013.VIETNAMGNIPERCAPITAGNIPerCapitainUSDollarsatConstantPrices2000173018001640.516001442.114001252.41150.212001101.21000868.9757.4800665.6529.960040020002004200520062007200820092010201120122013Source:WorldBankindicatorsbycountryabouttradingeconomic.GNIpercapita(formerlyGNPpercapita)isthegrossnationalincome,convertedtoU.S.dollarsusingtheWorldBankAtlasmethod,dividedbythemidyearpopulation.GNIisthesumofvalueaddedbyallresidentproducersplusanyproducttaxes(lesssubsidies)notincludedinthevaluationofoutputplusnetreceiptsofprimaryincome(compensationofemployeesandpropertyincome)fromabroad.GNI,calculatedinnationalcurrency,isusuallyconvertedtoU.S.dollarsatofficialexchangeratesforcomparisonsacrosseconomies,althoughanalternativerateisusedwhentheofficialexchangerateisjudgedtodivergebyanexceptionallylargemarginfromtherateactuallyappliedininternationaltransactions.Tosmoothfluctuationsinpricesandexchangerates,aspecialAtlasmethodofconversionisusedbytheWorldBank.GNIpercapitainVietNamin2013wasequalto1730USdollars,ranked157thintheworldandwasonparwithGNIpercapitainNicaragua(1705.436 USdollars).GNIpercapitainVietNamwasless,thanGNIpercapitaintheWorld(10255USdollars)by8614.5USdollars.Figure3–6:GrossnationalincomePerCapitaofVietNamandtheothercountriesinAsiaGNIPerCapitalofVietNamandtheothercountriesinAsia35,000.0030,000.00Korea,Rep25,000.00Malaysia20,000.00Thailand15,000.00China10,000.00Indonesia5,000.00Philippines0.00vietnam19992000200120022003200420052006200720082009201020112012Source:WorldBank,WorldDevelopmentIndicators.GNIpercapitalinVietNamgrowsteadilyovertheyears(1999-2012).However,comparetomostofitsAsianeighbors,GNIpercapitalinVietNamstillverylow.In2012GNIpercapitalis$3620lessthan40%inThailand($9280)andlowestinthearea.37 Figure3–7:GrossnationalincomeGrowthRateofVietNamin2004-2013VIETNAMGNIGROWTHRATEYEARLYPercentChangeinGrossDomesticProduct1412.312107.586.76.96.35.55.765.15.244202004200520062007200820092010201120122013Source:WorldBankindicatorsbycountryabouttradingeconomic.Formorethanadecade,GNIhasgrownnotablyyear-on-year:7.5%in2004,12.3%in2005,6.7%in2006,6.3%in2007and5.5%in2008.In2009,Vietnamachievedeconomicgrowthof4%,exceededgoals,andrankedlowestinadecadefrom2004to2013.AndVietnam"sGNIgrowthratebeginstoslowintheyearsfollowing,5.7%in2011,5.1%in2012,untiltheendof2013was5.2%.3.2ContextofVietnamese’swage3.2.1Developmentprocessofwageinrecentyears.ThesystemofwagepolicyinVietnamhasgonethroughmanydevelopmentperiods.From1/2003to5/2012,theGovernmentcarriedoutminimumwageincreaseappliestocivilservantsandothersemployedbythegovernmentfrom210.000VNĐto1.050.000VNĐ,400%higherthantheconsumerpriceindexbytheGeeneralStatisticsOfficeannouncedthat154%.However,MinistryofInteriorsaidthattheminimumwageofsalariedobjectfrombudgetistoolow.Forexample,thecurrentminimumwage1.050.000VNĐ/monthonly75%oftheIVregion(thelowestregionofthebusinesssector),simultaneouslyonly37.5%oftheminimumneeds(ifincluding25%publicserviceallowanceswillreach46.9%minimumneed).Thelowminimumwageleadstolowwagesinranks(including25%publicserviceallowancesfrom2012/05,collegegraduateapproximately3million/month,Ministerofapproximately13million/month).Theminimumwageismuchlowerthanthemarketsector,hence,itdifficulttoattractandkeepgoodemployeesintheStateenterprise.38 CurrentwagepolicyshowsthattheinadequacyincarriedouttwodifferenttypesofminimumwagesintheStatesectorandtheNonStatesector.ItcreateddifferentsubsistenceneedsofemployeeswithOfficialsandCivilServants.Thisisnotconsistentwiththeprinciplesofconstructionofminimumwage.AccordingtotheMinistryofLabor-InvalidsandSocialAffairs,basicallyformedaninitiallyminimumwagesystemandtheidentifymechanismsoperatingunderthemarketmechanism;themethodofdeterminingtheminimumwagehaveascientificbasis.TheGovernmenthasannouncedaroadmapandimplementeduniformlybetweenthedifferenttypesofbusinessesWTO,adjustedprogressivelytowardsthebasicneedsofemployees.Buttheabilitylaboragreementbetweenemployeesandtheunionarelow,Jobpressure,manybusinessesstillclingtotheminimumwagetopaidorusedtopaytheminimumwageforworkerswithprofessionalqualifications.Itsaffecttherightsofworkers.However,forStateenterprises,wagescalehasnotyetbecomeasameasuretopaythatismainlyusedtopaysocialinsurance.Thestretchingofwage,salarysplitsintoallowances,subsidiestoreducesocialinsurancecontributions.Inaddition,wagemechanismforstateenterprisesarenotreallytiedtolaborproductivity,businessefficiency.Someenterpriseshavelowerperformancebuthigherwages,someenterpriseshavehighwagesnotduetobusinesshighefficiencythat"smainlyduetobusinessadvantages.Figure3–8:Averagemonthlyearningofwageworkersaged15abovein2007–2013.Unit:thousandVNĐAveragemonthlyearningofwageworkersaged15above50004000300040723757200031052519100021061489150202007200820092010201120122013Source:NationalInstituteofStatistics,VietnamStatisticalYearbook,2007…2013AveragewageofVietnamesepeopleinrecentyearshasincreasedovereachyear.In2007theaveragesalaryis1489thousandVNĐ,aslightincreaseover150239 thousandVNĐin2008.Averageincomeincreasesfortheperiodfrom2008to2009is604thousandUSD,andcontinuedtoincreasesteadilyinthefollowingyears.In2010theaveragewageis2519thousandUSD,2011is3105thousandUSD,greatenjoyablevacation2012and2013respectively:3757thousandUSD,4072thousandUSD.TheaveragesalaryincreaseisagoodsignforemployeesVietnam,howeverthevalueofsalaryincreasenotworth.Atthesametime,theaveragewageofemployeesVietnamismuchlowercomparedtoothercountriesintheregion.AccordingtosurveyresultsTheJapanExternalTradeOrganization(JETRO),2013,surveyed149businessesinthemanufacturingsectorshowedgrowthratesofminimumwagesinthesefirmscomparedto2011is21%.Thesurveyed71businessesinthenon-manufacturingsector,theratioare16.9%.VietnamranksfirstwhencomparedtoothercountriessuchasIndonesia,Myanmar,India,Laos,China,Thailand,Philippines,Cambodia,MalaysiaandSingapore.In2013,thesurveyof212companiesinthemanufacturingindustry,JETROsaidthegrowthrateoftheminimumwageatthisbusinessescomparedto2012is14%,Vietnamhashaddroppedtothethirdposition.Surveyed123businessesinthenon-thmanufacturingsector,theratewas8.9%,Vietnamranks5comparedwithabovecountries.40 Figure3–9:Averageyearlyearningofwageinmanufacturingenterprise.Unit:USDAverageyearlyearningofwageinmanufacturingenterprises60000500004000030000worker20000engineer100000Source:TheJapanExternalTradeOrganizationin20013Attheenterprisesofmanufacturingindustry,theaveragewageofaworkeris3000USD/year,equivalentto250USD/month(approximately5.2millionVND),withthis,Vietnam"swagesjustaboveLaos,CambodiaandMyanmar.SalariesofVietnamengineersis5,749peryearequivalentto480USDpermonth(about10millionUSdollars),alsoremainhigheronlyCambodiaandMyanmar.3.2.2Overviewofwagedividedbytheactivitiesofthenationaleconomy.Vietnam"swealthgapisonlywideningandposesthemostworryingthreattothesurvivalofthepoliticalregime,althoughtheeconomicchasmhasbeenoft-discussed,itremainsunaddressed.Vietnamhasexperiencedeconomicgrowthinthelasttwodecades.However,intermsofcapacity,thepossibilityforVietnam’ssustainabledevelopmentisabigquestion,giventheperspectiveofrapideconomicgrowthbasingonreducingtheincomegapbetweenindividualsandregionsacrossthecountry.ThecontradictpictureoftherichandthepoorinVietnamshowsanotherperspectiveofeconomicgrowthprocess,andthattheincomegapinVietnamiswidening.ThisfactisconsistentwiththeassessmentoftheWorldBankthattherichandpoorgapinVietnamismovingawayfromrelativelyequalin2002torather41 differencebecausetheincomegapkeepsgrowingamongcurrentresidentgroups.ThisremarkisnosurpriseasaccordingtotheMinistryofLabor-InvalidsandSocialAffairs,thegapbetweenincomelevelsofdifferentlaborgroups,theactivitiesofthenationaleconomyarewidening,especiallyinlargecities.Table3–1:Averagewage,theactivitiesofthenationaleconomyin2012.unit:thousandVND。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。2010201120122013。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。。Agriculture,silvicultureandfishing1826225125432731Mineores3308457256432742Industrialprocessingandmanufacturing2325305136363783Manufactureanddistributionofelectricity,gas,steam3200401652535311Watersupply,sewerage,wastemanagement2465326937693860Constructions2441283333693578Wholesaleandretailtrade,repairofautomobiles,motorcycles2681325537743794Transportationandstorage3409403746604780Hotelsandrestaurants2091260032483569Informationandcommunication3736471058805989Insuranceandfinancialintermediation4800565968556870Realestate4791497169737011Professional,scientificandtechnicalactivities3621470558145961Administrativeserviceactivities2885345947654875Publicadministrationanddefense,socialinsuranceinpublicsystem2490295738724014Education2814342142604357Healthandsocialassistance2825363544224589Culturalactivities2604323138524016Otheractivitiesregardingservices1953238927953076Employedfamilycaregivers2027236722982452Internationalagencies(*)8055976781318210Total2519310537573886Note(*):Thissector’semployeesaresmallsamples,sothereliabilityislow.Source:VietnamStatisticalYearbook,2013Theworkperformedduringtheyear2013wasrewardedaccordingtothetableabove.Herearelistedtheactivitiesofthenationaleconomyandaveragegrosswagesforeach.BasedonthesedataweconcludethatthehighestsalaryisreflectedinInternationalagencies,wherewefindamaximumof8210thousandVNDper42 employee.Realestatearehighlightedwithanaveragegross7011thousandVND,andInsuranceandfinancialintermediationarehighlightedwithanaveragegross6870thousandVND,whilethefollowingplaceshavesimilaramounts,5989thousandVNDperemployeeinthecaseofInformationandcommunication,respectively5643thousandVNDregardingactivitiesMineores.Otheractivitiesvaryaswagecompensation,thelowestvaluebeingfoundinthecaseofAgriculture,silvicultureandfishing2543thousandVNDperemployee.Observationdatainconsecutiveyears2010-2013,wesawthegapinaveragewagebetweeneconomicsectors.TheemployeesworkinEmployedFamilyCaregiversalwayshasthehighestaveragewage(ordinarywageofthisworkisthreetimeshigherthantheoverallaveragewageofcountry),meanwhiletheaveragewageofemployeesworkinthefieldofAgriculture,silvicultureandfishing,Constructions,HotelsandRestaurantsisverylow,evenlowerthanthecountryaveragewage.Thetrendsoftheeconomicsectorswithhighwageare:Internationalagencies,Realestate,Insuranceandfinancialintermediation.ItisconsideredoneoftheindustriestendtothriveinVietNaminthepastyearsbecausethewagereallyattractivetotheemployees.Thewagegapbetweentheeconomicsectorsisrelativelyhigh,anditisalsooneofthecausesofthedividebetweenrichandpoorinsociety.Ingeneral,Vietnamisstillapoorcountryandunderdevelopedeconomy.Althoughtheaveragewageofemployeesincreasesovereachyear,butitstilllow.Theincomeleveldirectlyaffectsthequalityofpeoples"lives.Therefore,theanalysisofeffectofwageemployeesnotonlyaffectscompensation–profitsininternalenterprisebutalsoaffectsoverviewofVietnam"seconomy.43 4.PRACTICALANALYSIS.4.1BasicresearchdesignChapter4ofthethesissolvestwoproblems:First:analyzetheimpactofwageonworkingefficiencyofemployees.Wecollectedaveragemonthlywagesperemployeeandaveragemonthlyoutputproductsperemployeeofabout30garmententerprises.Thoughtwefindtherelevantwagesandoutputproducts,establishtheregressionequationandconcludewagesimpactonworkingeffectiveness.Thenext:comparethedifferencesofwagebetweenstateenterpriseandnon-stateenterpriseinthesameindustry.Therebyweconfirmedthatstateenterprise"swageislowerthannon-stateenterprise"swage.IntherealVietNamsocialwecanconcludethat:lowwagesisoneofthecausesofworkinginefficiencyinstateenterprises.LowwagesaffecttheworkingefficiencyofworkersinthestatesectorwhichisconsideredtobeoneofthesadrealitiesishappeninginVietnam.Theprocessofanalysiswasconductedasfollows:Thefirst,comparisonofwages(minimumwages,averagewages)ofthesameindustryenterprisesbetweenstateenterprisesandprivatesectorbusinessestoseethatthestatepaylowerwagesofprivateenterprises.Thenext,comparetheresultsoftwotypesofenterpriseandseethatstateenterprisesoperatingactivitieslessefficientthannon-stateenterprise.Throughbusinessresultscanconcludedthattheworkefficiencyofemployeesinstateenterpriseswilllowerworkefficiencyofemployeesinnon-stateenterprise.Here,wecanseetherelationshipbetweenwagesandworkingefficiency.Lowwagesleadtoeffectiveworkinstate-ownedenterprisesislow.Inordertoreinforcetheconclusionwageaffecttheworkingefficiency,weexaminedthecorrelationbetweenwagesandfinancialindicesROAandROE.Thesearetwoindicatorsofbusinessperformanceofenterprises.Theresultsshowthatwageshavealinearrelationshipwithbusinessresults,howeverthisrelationshiptomedium-low.44 Fromtheaboveanalysis:wecanaffirmthatwagesaffectworkefficiency.Lowwagesleadtoeffectiveworkinstate-ownedenterprisesislow(expressedthroughpoorbusinessresults),weconcludedthat:lowwagesisoneofthereasonsaffectthepoorperformanceofstateenterprises.Andhence,twoissueshavebeenresolvedthroughthischapter.4.2GatheringdataFirst,weusethedatain2013ofabout30enterprisesinthegarmentindustryincludeofaveragemonthlywageandaveragenumberofproductspermonth.Thisdataisusedtoanalysisandfindtheinfluenceofwagetoworkeffectively.Table4–1:Thelistofsamplegarmententerprise.NoName’scompanyStateNonstateenterpriseenterprise1Saigongarmentmanufacturingtradingjointstockcompany2UyVumanufacturingtradingjointstockcompany3SaigonMotfashiondesign&manufacturingtradingCo.Ltd4SonghoamanufacturingCo.Ltd5Binhthuan-Nhabejointstockcompany6Phuthuan-Nhabejointstockcompany7PhuongDonggarmentjointstockcompany8ThangLoiinternationalgarmentjointstockcompany9Youngtexvinajointstockcompany10YasudafashionCo.Ltd11Vietnamtextileandappareltradingjointstockcompany12Hanoitextileandgarmentjointstockcorporation13Thanglonggarmentjointstockcompany14Phuongdongjointstockcompany15Vietnamnationaltextileandgarmentgroup16AnthangtextileCo.Ltd17VietTiengarmentjointstockcorporation18ThaiTuangroupcorporation19NguyenLongfashionCo.Ltd20PhamTuong2000garmentCo.Ltd21Quadrilla&Verainternationaljointstockcompany22HCMtextilefashionCo.Ltd23AnThinhPhatgarmentCo.Ltd24ThienAinternationalgarmentjointstockcompany45 25Mosudatextile&garmentjointstockcompany26NguyetDungmanufacturingtradingandserviceCo.Ltd27ABCfashionmanufacturingCo.Ltd28Katocogroupcorporation29ChautextileandgarmentgroupThenext,inordertoanalysisthedifferencesofwagebetweenstateenterpriseandnon-stateenterprise,wecollectdatafrommorethan100businesses,includingstateenterpriseandnonstateenterpriseactivitiesinthreefields:publishingindustry,foodindustryandconstructionindustry.ThisdataiscollectedfromdatasetsoftheVietnamGeneralStatisticsOfficein2013andtheinternaldatafromtheVietnam"sstockexchangein2013.Becauseofsomedifficultiesinthesearch,accesstodata,thusIcanonlycollectdataof100enterprises.Hence,thegeneralityoftheanalyticalresultsisnothigh.Foritem“averagewage”and“returnonassetratio”,datacollectedfromover100sampleenterprisesoperatingintheconstructionsector,publishingsectorandfoodsectorwithbothtypesofStateenterpriseandnonstateenterprises.46 Table4–2:Thelistofsampleconstructionenterprise.StateNonstateNoName’scompanyenterpriseenterprise1HaciscoJointStockCompany2ConstructionJointStockCompanyNo.53VNECO9investment&constructionjointstockcompany4UrbanandHouseDevelopmentInvestmentJSC5InvestmentconstructionandinfrastructuredevelopmentJSC6LuongTaiInvesment&ConstructionJointStockCorporation7MCOVietnamJointStockCompany8SongDa505JointStockCompany9SongDa9.01JointStockCompany10SongDa9.06JointStockCompany11SongDa10JointStockCompany12SongDaInvestment&DevelopmentJointStockCompany13SongDa10.1JointStockCompany14VietNamConstructionJointStockCompanyNo215Vinaconex6JointStockCompany16Vneco1ElectricityConstructionJointStockCompany17QuangNamTransportionConstructionJointStockCompany18SongHongConstructionJointStockCompany19SongDaTransportationConstructionJointStockCompany20ConstructionJointStockCompanyNo121PowerEngineeringConsuntingJointStockCompany322TanKyConstructionRealEstateTradingCorporation23DIC-DongTienJointStockCompany24No15VietnamConstructionJointStockCompany25HaNoiInvestmentGeneralCorporation26CotecConstructionJointStockCompany27LamDongInvestment&HydraulicConstructionJSC28ConstreximNo8Investment&ConstructionJSC29BinhDuongConStruction&CivilEngineeringJSC30DevelopmentInvestmentConstructionNumber2JSC31HaNoiSouthHousing&UrbanDevelopmentCorporation32Vneco2ElectricityConstructionJointStockCompany33VinamJointStockCompany34SongDa27JointStockCompany35SongDa11-ThangLongJointStockCompany36ConstructionInvestmentCorporation3-247 37QuangNamPost-TelecomsConstruction&ServicesCorp38ThienTruongElectricCompany39Lilama18JointStockCompany40Erection-ElectromechanicsTestingJointStock41IDICOInfrastructureDevelopmentInvestmentJSC42BachDangTMCConstructionInvestmentJointStockCompany43PetroleumSaigonConstrutionAndInvestmentJSC44DevelopmentInvestmentConstructionHoiAnJSC45HongPhatConstructionInvestmentJointStockCompany46IDICOInvestmentConsultancyJointStockCompany47COMA18JointStockCompany48Licogi14JointStockCompany49SolavinaJointStockCompany50Vneco8ElectricityConstructionJointStockCompany48 Table4–3:Thelistofsamplepublishingenterprise.NoName’scompanyStateNonstateenterpriseenterprise1DienHongPrintingJointStockCompany2NamDinhEducationalBookAndEquipmentJSC3HigherEducationAndVocationalBookJSC4HoaphatTextbookPrintingJSC5LongAnSchoolBook&EquipmentJSC6HoChiMinhCityTextbookPrintingJSC7EducationalBookJSCInHoChiMinhCity8BinhThuanBookAndEquiptmentJSC9QuangNinhBook&EducationalEquipmentJSC10EducationCartographyAndIllustrationJSC11HanoiEducationDevelopment&InvestmentJSC12PhuongNamEducationInvestment&DevelopmentJSC13DaNangEducationDevelopmet&InvestmentJSC14HungYenBooks&SchoolEquipmentJSC15BinhDinhBook&EquipmentJointStockCompany16ArtDesignAndCommunicationJSCTable4–4:Thelistofsamplefoodenterprise.NoName’scompanyStateNonstateenterpriseenterprise1ChuongDuongBeveragesJointStockCompany2BentreAquaproductImportAndExportJSC3CuuLongFishJointStockCompany4SaoTaFoodsJointStockCompany5SeafoodJointStockCompanyNo16SeafoodJointStockCompanyNo47NgoQuyenExportSeafoodProcessingJSC8MekongFisheriesJointStockCompany9NtacoCorporation10VietThangFeedJointStockCompany11VietAnJointStockCompany12InternationalDevelopment&InvestmentCorporation13ThanhHoaBeerJointStockCompany14HaNoi-HaiDuongBeerJSC15HaNoiBeerTradingJointStockCompany49 16LongAnFoodProcessingExportJointStockCompany17SafocoFoodstuffJointStockCompany18ThanhThanhCongTayNinhJSC19SaGiangImportExportCorporation20TuongAnVegetableOilJointStockCompany21HaihaConfectioneryJSC22GiaLaiSugar-ThermalPowerJointStockCompany23KonTumSugarJointStockCompany24VinacaféBienhoaJointStockCompany25MechanicsContruction&FoodstuffJSC26AnGiangImport-ExportCompany27ThangLongJointStockCompany4.3Modal.4.3.1ConstructionofmodelLate20"softhe20thcentury,AmericaneconomistaccordingtostatisticsoftheUnitedStates1899)in1922manufacturing,analyzestheinfluenceduringthelaborandcapitaltwokindsofproductionfactorsontheyield,putforwardthefamousCobb-Douglas,Initsmoststandardformforproductionofasinglegoodwithtwofactors,thefunctionis:Y.Where:Y=totalproduction(therealvalueofallgoodsproducedinayear)L=laborinput(thetotalnumberofperson-hoursworkedinayear)K=capitalinput(therealvalueofallmachinery,equipment,andbuildings)A=totalfactorproductivityαandβaretheoutputelasticitiesofcapitalandlabor,respectively.TheDouglasfunctionissimpleandeasytouse,usingeasilyaslinear,etc.,sohaslongbeenwidelyusedbyeconomists,isthemostsimpleandeffectiveformofproductionfunction.Inthisthesis,wechoosetheC-Dfunctionasthebasicmodeloftheoutputproduct,andcaneasilybechangedtothelogarithmofthelogarithmofC-Dfunction:lnY=lnA+αlnK+βlnL.AlsoIconsiderthelaboroftheenterpriseandtechnologysystemaretheconstantsystemofremuneration,soitcanfurtherassume:α+β=1.Onthebasisofthederivation,thereare:ln(Y/L)=lnA+αln(K/L)Make(Y/L)=y,(K/L)=k,youcanget:lny=lnA+αlnk50 Basedonthis,thebasicregressionequationoftheoutputproductisestablished:lnyi=lnAi+αlnki+uiWith:yi,kiarethepercapitaoutput(unitproduct)andthepercapitainput(wage,unitVND)oftheenterprisei.Ai,αiaretheparameterestimate,uiistherandomerror.Usingthetimeseriesdata,eachenterprisewillgetthecorrespondingagroupofparameters(Ai,αi),Theseparameterscanberegardedasthecharacterizationofthelong-termstablebenefitoftheinvestmentofthecompany,soastolinktheinput-outputbenefitofeachyeartoarelativelystablepattern.Aisaconstantoftheregression,acomprehensivereflectionoftheotherfactorswhicharenotconsideredseparately(includingworkingenvironment,facilities,machineandtechnology).αrepresentstheelasticityoffundsintheenterprise.Itisneededtoexplainthattheconceptof"elasticity"mainlyemphasizesthesensitivityofthechange,theelasticityofαvaluemeansthatthechangeofpercapitaoutputofeveryunitisbroughtaboutbythechangeoftheinputoffunds.Hereagain,Iassumethattheaveragelaborwithineachcompanyhasthesameabilitytousetechnology(ortheabilitytoproducescientificandtechnologicaloutput),sothevalueoftheregressioncanbeusedtodescribetheinput-outputelasticityofwageinthecompanies.General,wediscussthebenefitsoftheenterprise"swagesfromtheperspectiveoftheinput-output.4.3.2Statisticalanalysis.Thestudymainlyexaminesthewagesandoutputsofthevariousenterprises.Theauthorselectedthedataof29garmententerprises,usedtheequation:lnyi=lnAi+αlnki+uitoanalysethetimeseriesdataoftheenterprise.So,theusedregressionequationis:lnyit=lnAit+αitlnkit+uitwhereyitandkitwerethepercapitaoutputandthepercapitawagesofenterpriseiinthetimet,Aitandαitweretheparameterestimates,anduitistherandomerrorterm.Withinthelimitsofthisthesis,Iignoredelementsoftechnicalequipmentandskilledworkers,Ionlyinterestedintwovariables:y-outputandk-wage.I’mlookingfortheinteractionbetweenmonthlypercapitaoutputandmonthlypercapitawage.Datawascollectedmonthlyfor3years(fromJanuary2011toDecember2013)in29garmententerprisesatHoChiMinhCityinVietnam.Throughalinearregressionofthetimeseriesdataof29enterprises,wefound20enterpriseofthem(about68%ofthetotalsample),theirpercapitaloutputhasastronglinearrelationshipwithper2capitalwage.AllofcoefficientofdeterminationR(Rsquareisusedtomeasurethe51 suitabilityoftheregression)isover0.5,andthestatisticaltestsreached0.05significantlevels.Itcanbedemonstratedthattheresultsofregressionanalysisarereliable.Besidethatthereare9enterprises(about31%ofthetotalsample)don’thavethelinearrelationshipbetweenpercapitaloutputandpercapitalwage.Table4–5:Thelistenterpriseswithregressionresultsmeetstandard.lnAα2No.RFProb(F)coefficientt-Statisticcoefficientt-Statistic13.501317.760.16176.570.560143.290.000022.376312.130.277811.500.7955132.270.000031.96465.480.28496.340.541640.180.000042.235413.040.355216.800.8923282.320.00005-8.17050.671.477317.910.904320.760.00006-2.2354-5.160.867216.380.8874268.180.00007-1.7436-3.180.829912.130.8122147.060.003183.798613.340.13143.720.289213.840.000093.070212.740.20777.030.592449.410.0000101.57463.110.38376.200.530738.450.0038112.723210.370.24967.740.638259.960.0000121.28872.980.40287.480.622356.020.005313-12.7949-7.651.97999.810.738896.210.0000141.85892.810.37604.660.590221.760.0081153.10112.470.19146.170.536338.160.0000162.33895.350.25544.750.439222.590.0000174.48015.460.06430.640.64050.410.0000182.11152.440.29682.790.685827.750.002119-1.3647-1.520.67746.160.527637.970.000020-3.06853.740.90699.160.711683.910.000752 Table4–6:Thelistenterpriseswithregressionresultsnotmeetstandard.lnAα2No.RFProb(F)coefficientt-Statisticcoefficientt-Statistic1-1.0776-0.830.61993.860.305214.940.41402-0.3562-0.710.60799.780.737895.680.479832.74121.870.21971.220.22431.490.070341.0682.4070.43037.780.640760.630.021750.84970.85490.40883.360.249111.280.398660.17792.5010.39666.880.582047.50.01737-1.3647-1.520.67746.160.527637.970.13838-1.0611-0.742.05476.530.556142.590.463590.14880.330.554910.090.7497101.90.7437Aboveresultshownthat69%ofenterprisesaresurveyedwithgoodregressionresults,whichconfirmthattheaveragemonthlywageofeachworkerhasanimpactonoutputproduce,orwecansaythatthewagesaffecttoworkingeffectiveness.4.4ThedifferentofStateEnterprise’swageandNon–StateEnterprise’swage.4.4.1Comparewage.a.Thedifferentaboutwage’ssystemWagesysteminStateenterprise:InVietnam,thenumberofpeoplebeingpaidsalariesfromtheStatebudgetaccountsforonly10percentofthecountry"stotallaborforce.However,theyholdpositionsinthecivilauthorityapparatusorintheState-ownedeconomicsector-thecountry"sdecisiveeconomicsector.Therefore,settlingtheirsalaryissueseffectivelyplayanimportantrole.Despiteanumberofamendments,thecountry"ssalarypoliciesstillleavemuchtobedesired,namely,theminimumsalarypolicyandallowanceshaveyettobeimprovedtheroleoftheGovernmentinmanagingincomeandsalaryhasbeenpaidattentionto,buthasnotbeensoeffective...ThestateofVietNampromulgatethepayscalesystemtopaymentforemployeewhoworkfortheadministrativesector,thecommission,thepeople"sarmedforces…ingeneralisStateemployee.Simultaneous,inthenon-stateenterprisealsoreferencethepayscalesystemtoestablishawage53 systemforbusiness.Thestateenterprisesusethepayscalesystemtoextractinsurance,employeebenefits.ThemajorityofwagesystemVietNambaseon“theregimeofwagegrade”.Theregimeofwagegradeestablishedtopayforemployeebaseonlaborqualityandlaborcondition.Thelaborqualityisshownbythelevelofskilled,understandingprofessionalexpertise,andaccumulatedexperienceduringthelaborprocessofemployee.Thenewsalaryreform,degreeNo:182/2013/ND-CPdatedDecember14th,2013onsalaryregimeforcadres,publicservants,officials,andarmedforcepersonnelisbasicallyaamendmentandpartialreformationofthe1993system,withcoefficientmodificationsinmanycasesincludingaslightdecreaseinthenumberseniorscalesandanenlargedspreadbetweenlowestandhighest,thenumberofsalarystepsandsomerationalizationoftheallowancesystems.Thewageofemployeeiscalculatedaccordingtotheformula:Mi=M1xKiWhereMiiswagegradeati,M1isminimumwagegrade(theStateregulateforeachyear),KiiswagecoefficientgradeatI(theStateregulateofallstateenterprises).Thus,thesalarylevelofaworkerdependsonthetwoelements(theminimalsalarylevelandthesalaryratio).Reformingthesalaryforcivilservantsandpublicemployeesinconsonancewiththecountry’snewsocio-economicsituation,theGovernmenthastakenintoaccountthreeimportantthings:(1)raiseminimalsalary;(2)developsalaryschemes,allowancesandenlargesalaryratios;and(3)combinethetwomeasures.Theminimalsalaryisdefinedasbeing“fixedinaccordancewithlivingprices,ensuringthatthelaborerofthemostsimplejobinnormalworkingconditionmaysupplementhis/hersimplelaborforceandpartlyaccumulatereproductionofextendedlaborforce,andusedasabasistocalculatethesalarylevelforotherlaborers”.Inthelightoftheidentification,theGovernmentshalladjusttheminimalsalarylevelwhenthelivingpriceindexincreasestomakerealsalaryofemployeescorrespondingtoinflation.AsidentifiedintheOrdinanceonCadresandCivilServantsin1998(revisedin2000,2003,2008and2011),therearedifferentgroupsofpublicofficialsworkinginthestateapparatusofVietnamwhoenjoysalaryschemesandgrades.Salaryschemeforelectedposition:Thesalarylevelratiosofcadresandcivilservantareclassified:(1)ratiosofworkcomplexityfrom3.7to11,ratiosofworkconditionsfrom1.162.Therearetensalarylevelratios,from4.3to13;(2)ratiosofworkcomplexityforprofessionalandoperationalcivilservantsandpublicemployees54 (leadersandmanagerswillgetprofessionalsalarypluspositionallowance)from1.48to7.5,ratiosofworkconditionsfrom1.0to1.244.Thereare56salarylevelratios,from1.48to9.33.Salaryschemeforappointedleadersandmanagers:Appointedmanagersandleadersareprofessionalcivilservantsandpublicemployeeswhohavecompetencyandoccupiedstablejobsinthepublicorganizations.Thesalaryschemeforthemincludes:salaryforprofessionalsplusleadingpositionallowance.Therefore,theleadingpositionallowanceispartofthesalarypaidtotheemployeeduringtheperiodwhenhe/sheisintheposition.Thehighestratioofleadingpositionallowanceis1.50andthelowestis0.15.Salaryschemeforadministrativeprofessionalandoperationalcadresandcivilservants:Thesalaryschemesforadministrativeprofessionalandoperationalcadresandcivilservantsaredesignedandappliedfor21differentsectors.Ineachsectoritisdividedintocorpsofworkersfromthelowesttothehighest.Totally,theseare196corpsofcivilservants.Thesalaryschemewasdesignedbasedonsector’sworkconditions,complexityandprioritywasgiventoeachsector.Eachsectorhasaseparatestandardsalarylevel;eachcorpshasadifferentcodethatisconnectedtoqualificationalignedwiththespecializedcriteriarequiredCorpsofcivilservantsconnectedtopositionsisgroupedintofourcategories:A,B,Cincorrelationtoeducationalqualification(ex:thereis11corpsinthesalaryschemeforadministrativecivilservants).Therearesenioritysalarystepsineachcorps;eachstepcorrelatestoasalaryratio.Theprinciplesfordesigningthesalaryschemeforpublicemployeesworkinginpublicservicedeliveryagenciesaresimilartothoseofadministrativecivilservants.Thenewpolicyreformhasintroducedasalary-relatedallowancesystemwhichestimatestheminimumsalarylevelaswellasthegrade,orpostsalaryofcivilservants;anditisbasedontheworkingsituationofemployeeswhoworkinextremeworkingconditionssuchastoxic,hazardous,andbadconditions.Ithasalsoestablishedandimplementedrulesonbonusesgrantedtopublicservantsfortheirexcellentperformanceandotherbenefitsaddedtosalaries.Forsimpleinstance,2013minimumwagelevelStateregulateintheDistrict1,HCMcityis1650thousandVND.ThewagecoefficientofemployeegraduateatUniversitywhoworkforStateagencyis2.34.Sothewagelevelthatemployeereceives:1650x2.34=3861thousandVND.55 Table4–7:TheStateminimumwageregulationsofStateemployeesanddividebyregion.unit:thousandVNDRegion2007200820092010201120122013Region1###620800980135020002350Region2###580740880120017002100Region3###580690810105015501800Region4###54065073083014001650Average450580720850110716621975Source:SocialistrepublicofVietNamGovernmentPortalWecanobservethattheStateminimumwageregulationsincreasegraduallyforeachyear.In2007therewasnodisparityoftheminimumwagebetweentheregionsanditwasappliedinwholecountry.From2008untilnow,theminimumwageofStateemployeeshasbeendividedbetweentheregions.Onthewhole,thegapofdisparityminimumwagebetweentheregionsisnotlargeandabsolutelydonotexceed30%.ThisshowthattheVietNamgovernmenthasstudiedcarefullyandevenlydistributedthewagefloorbetweentheregionssothatnotcreateasignificantgapinwagesbetweenregionsinthecountry.However,thatispreliminaryoverviewoftheminimumwageofStateemployees.InordertounderstandtheimpactofminimumwageontheemployeelivesofStateemployees,theauthorconsidertherelationshipbetweenStatewagewithwageofnon-StateenterpriseinHCMcityandtheaveragewageofVietnamese.Thisisdiscussedinthefollowingsection.WagesysteminNon-Stateenterprise:Wagesystemofnon-Stateenterprisewasestablisheddependingontheperspectiveonwageofenterprise.Theenterprisecanchooseremunerationaccordingtojobortotheindividual.Inthenon-StateenterprisesVietNam,thewagesystemaccordingtotheindividualwasappliedleastbecauseiteasilyleadtobureaucracy,formalismwhencertifyofskill,qualificationsofemployees.Onthecontrary,thewagesystemaccordingtojobismoreappliedandtraditionallyalthoughtherearedefectivebutitmorereasonable,moreobjective,systematic,easytobuildandmanage.Intheperspectiveonremunerationaccordingtojob,theconstructionofareasonablewagesystemrequiresthreebasicdecisions.Eachdecisiontoansweranimportantquestionabouttheremunerationprogramsofanenterprise.56 Thefirstdecision–decideonthelevelofremuneration:Relatedtotheoveralllevelofremunerationofanenterprise.Thisdecisiontoanswerthequestion:thelaborforceinanenterprisereceiveshowmuchwageincomparisonwithemployeesofotherenterpriseswhenperformingsimilarjob.Theseconddecision–decideonthewagestructure:Relatedtothepaymentsfordifferencejobsinanenterprise.Thisdecisiontoanswerthequestion:howmuchmoneypaysforajobincomparisonwithothersjobinanenterprise.Thethirddecision–decideonemployeewage:Relatedtotheencouragingandsatisfactorypaymentforemployees.Thisdecisiontoanswerthequestion:eachemployeereceiveshowmuchmoneyincomparisonwithamountofmoneythattheircolleaguesreceiveinthesimilarjob.Threedecisionsareimportantcreatefairnessandmotivatecontributionofemployees,especialindecisiononwagestructure.Thetargetofdecisiononwagestructureisprovidesamountofequivalentremunerationforemployeesinthejobswereevaluatedequalityandestablishanacceptableaboutdifferenceofwagesforjobsarenotequivalent.Theconstructionofthewagestructurerequiresacomparisonofthejobsinanenterprise.Thedecisiononthewagestructure,thehumanresourcemanagershouldbebasedon:unilateraldecisionsofseniormanagement,collectiveagreementbetweenmanagementandHRdepartmentorthejobevaluationpanel.Besidesthat,theconstructionofthewagestructureinanenterpriseneedtocomparewithotherenterprisesinthesamefield,thesameregion.b.Ttest57 Ttestbetwenaveragewageofstateandnonstateenterprises.Theresultofttest:-3.358721(df74)>t(df80)99%:-2.64:2.64ThusthedifferencebetweenthetwopopulationsofstateAverageWageinEnterprisesandAverageWageinnonstateenterprisehasstatisticalsignificance.Ttestbetwenminimumwageofstateandnonstateenterprises.Theresultofttest:-4.771997(df74)>t(df80)99%:-2.64:2.64ThusthedifferencebetweenthetwopopulationsofstateMinimumWageinEnterprisesandMinimumWageinnonstateenterprisehasstatisticalsignificance.c.Compareminimumwage.Inthisthesis,Minimumwageisconsideredthelowestmonthlyamountanemployercanpayanemployee,withsomeexceptionsbasedonthetypeofworkerineachenterprise.Minimumwageisimportantbecauseitensuresthatallworking58 personshaveaminimumstandardofliving.Manyarguethattheminimumwageistoolowtoliveoninmanyplacesandshouldberaisedtoaso-called"livingwage"andindexedtoinflation.FordecadesVietnamhasfailedtosetaminimumwagethatprovidesenoughforpeopletoliveon,officialssaidatameetingFriday.Vietnam"sminimumwageonlymeetsbetween50and70percentofthecostofpeople"sbasicneeds,officialssaidattheconferenceheldbytheNationalAssembly"sSocialIssuesCommitteetodiscusswaystocalculatealivableminimumwage.ThefigurescamefromasurveyconductedbytheVietnamLaborUnionlastyear,whichestimatedthatpeopleneedbetween750thousandVNDand900thousandVND(US$36-43)permonthtoensuretheycanprovidethemselvessufficientnutritionabout2,300caloriesaday.Addinginotherexpensesincludingtheraisingofchildren,oneneedsaround2.4-3.7millionVNDamonthjusttosurvive,whileVietnam"sminimumwagerangesbetween1.05and2.35millionVND($50.23-112.85)permonth.Ittendstobehigherinurbanareasandwithinthebusinesssector.Minimumwageandminimumlivingstandardshavenevermet,andthewagemightnotbeabletocatchupforatleastacoupleyears.Manycountriesintheworldusesetcriteriatoestablishauniformminimumwageonethatenablesemployeestoaffordnecessaryfoodplusclothing,accommodation,healthcare,educationandtransportation,aswellasallowsthemtosupporttoagingparents,maintainnormalsociallivesandsomeleftovertocontributetomodestsavings.ButinVietnam,theminimumwagecannotmeetbasicneedsofworkers.Vietnam’sminimumwageisfrom1900thousandVNDto2700thousandVNDin2013,buttherearedifferencesbetweentheregions,suchasregion1toregion4,theminimumwageisdifferent.Nearby,businessesbasedontheprescribedminimumwagebythestatetosetasalaryappropriateforthemselvestojustmeetprofittargetsbalanceandensuringcompetitiveness.Therefore,theminimumwageisapplicableineverybusinessisdifferent,andtherewillbecertaindifferencesinminimumwageamongthedifferenttypesofbusinesses.Inthescopeofthisthesis,wewillexaminethedifferencebetweentheminimumwageofthestate-ownedenterprisesandnon-stateenterprisesin4typesofbusiness:publishing,food,miningandconstructionbusiness.Specificdataarerepresentedbythefollowingdiagram:59 Figure4–1:Minimumwageinpublishingbusiness.5,0004,8004,6004,4004,2004,0003,8003,6003,400246810121416MINIMUMNMINIMUMSFigure4–2:Minimumwageinfoodbusiness.5,0004,8004,6004,4004,2004,0003,8003,6002468101214161820MINIMUMNMINIMUMS60 Figure4–3:Minimumwageinconstructionbusiness6,0005,6005,2004,8004,4004,0003,6005101520253035404550MINIMUMNMINIMUMSMinimumwagefactorsinnon-stateenterprisesinfoodindustrybusinessandconstructionishigherthantheminimumwageinstateenterprises.Particularlyforthesector:publishingbusiness,thewagegapalsodifferent,butthedistanceisnotclearlyseparated.Observegeneralgraphfrom4-1to4-3arefoundintheStateminimumwageenterprisetendtolowertheminimumwageinNonstateenterprise.d.Compareaveragewage.Thesalaryistheamountthatbusinessespaytoemployeesbytheirwork,isamajorcontributortomotivatethemtoworkbetter.Wagesarethemainincomeforemployeeshiredhelpmaintainandimprovethestandardoflivingforthemandtheirfamiliesandtheycangetalongwiththelevelofcivilizedsociety.Moreover,wageisanevidencetoshowthevalue,prestigestatusofaworkerforfamilies,businessesandsociety.Wagesalsoshowpreferentialpoliciesforenterprises"employees.Ifemployeesfeelsatisfiedwiththeirsalaryandtheywillenthusiasticallypositivework;whenemployeesfeelunworthytopayfortheirwork,theywillnotbeenthusiastic,positivework.Wagesystemroleisparticularlyimportantinencouragingpolicymatterandspiritforemployee.WagesatthistimeismeanttobeownersofemployerstopayforworkersthatcorrespondtothequantityandqualityofLaborduringtheprocessofwork.Thissectioncomparesaveragewagesbetweenstate-ownedenterprisesandnon-stateenterprisesinthesetypesofbusinesses:publishing,foodandconstructionbusiness.61 Figure4–4:Averagewageinpublishingbusiness6,4006,0005,6005,2004,8004,4004,000246810121416AVERAGENAVERAGESFigure4–5:Averagewageinfoodbusiness.6,8006,4006,0005,6005,2004,8002468101214161820AVERAGENAVERAGES62 Figure4–6:AveragewageinconstructionBusiness.6,8006,4006,0005,6005,2004,8005101520253035404550AVERAGENAVERAGESObservationdatafrom4thechartsabove,wecansee:theaveragewageofnon-stateenterprisesinthebusinesspublishingindustryishigherthanstate-ownedenterprises.Particularlyinthetwotypesofenterprisesremaining,averagewagesinstate-ownedenterprisesandnon-stateapproximationisrelative(inwhichnon-stateenterprisesmarginallybetter).Ingeneral,forall3typesofbusiness,theaveragewageinthestateisnowlowerthanthenon-stateenterprises.e.TheconsequencesofwagedisparityThesalaryofthestateenterprisesectorlowerthantheprivateenterprisesectorinVietnamisonedisturbingfact.Alotemployeesleavingthestateenterprisesectorandtransferredtoworkforprivateenterprisesbecauseoftheattractivenessofhighsalaries.Accordingtothestatisticsoftheyear2012(tuoitrenewspaper),approximately1200employeesperyearsleaveinthestateenterprisesectorBesides,thesalaryistoolowdoesn"tmaketheStateEnterpriseattractiveyounghumanresourcejustgraduated.AccordingtotheinterviewswereconductedbyYouthEducationOrganizationinVietnam,theygivethestatisticsin2014:78.5%ofgraduatingstudentsweresurveyedandanswered“donotwanttoworkforstateenterprises”.Everyyear,thenumberofunprofitableStateenterprisesandbankruptcyareincrease.Forinstance,2011was12%,2012was15%and2013was28%.63 Wemustalsomentiontheworkefficiencyatstateenterprisesisnothigh,aseriesofcorruptioncaseswereuncoveredinrecentyearsbythestatecorporationssuchasVinashin,Vinacontrol...Itisalsothepolicyimplicationsofsalariesinstateenterprisessector.Lowsalaries,accompaniedbylowworkingefficiencyandthenegativesoccur.4.4.2CompareROE&ROA.a.CompareROE.Oneofthemostimportantprofitabilitymetricsisreturnonequity(orROEforshort).Returnonequityrevealshowmuchprofitacompanyearnedincomparisontothetotalamountofshareholderequityfoundonthebalancesheet.It"swhattheshareholders"own".Shareholderequityisacreationofaccountingthatrepresentstheassetscreatedbytheretainedearningsofthebusinessandthepaid-incapitaloftheowners.Theamountofnetincomereturnedasapercentageofshareholdersequity.Returnonequitymeasuresacorporation"sprofitabilitybyrevealinghowmuchprofitacompanygenerateswiththemoneyshareholdershaveinvested.ROEisexpressedasapercentageandcalculatedas:ReturnonEquity=NetIncome/Shareholder"sEquityNetincomeisforthefullfiscalyear(beforedividendspaidtocommonstockholdersbutafterdividendstopreferredstock.)Shareholder"sequitydoesnotincludepreferredshares.Wearealsoknownas"returnonnetworth"(RONW).ROEismorethanameasureofprofit;it"sameasureofefficiency.ArisingROEsuggeststhatacompanyisincreasingitsabilitytogenerateprofitwithoutneedingasmuchcapital.Italsoindicateshowwellacompany"smanagementisdeployingtheshareholders"capital,inotherwords,thehighertheROEthebetter.FallingROEisusuallyaproblem.TheROEisusefulforcomparingtheprofitabilityofacompanytothatofotherfirmsinthesameindustry.Thereareseveralvariationsontheformulathatinvestorsmayuse:Investorswishingtoseethereturnoncommonequitymaymodifytheformulaabovebysubtractingpreferreddividendsfromnetincomeandsubtractingpreferredequityfromshareholders"equity,givingthefollowing:returnoncommonequity(ROCE)=netincome-preferreddividends/commonequity.64 Returnonequitymayalsobecalculatedbydividingnetincomebyaverageshareholders"equity.Averageshareholders"equityiscalculatedbyaddingtheshareholders"equityatthebeginningofaperiodtotheshareholders"equityatperiod"sendanddividingtheresultbytwo.InvestorsmayalsocalculatethechangeinROEforaperiodbyfirstusingtheshareholders"equityfigurefromthebeginningofaperiodasadenominatortodeterminethebeginningROE.Then,theend-of-periodshareholders"equitycanbeusedasthedenominatortodeterminetheendingROE.CalculatingbothbeginningandendingROEsallowsaninvestortodeterminethechangeinprofitabilityovertheperiod.TheDuPontformula,alsoknownasthestrategicprofitmodel,isacommonwaytobreakdownROEintothreeimportantcomponents.Essentially,ROEwillequalthenetmarginmultipliedbyassetturnovermultipliedbyfinancialleverage.SplittingreturnonequityintothreepartsmakesiteasiertounderstandchangesinROEovertime.Forexample,ifthenetmarginincreases,everysalebringsinmoremoney,resultinginahigheroverallROE.Similarly,iftheassetturnoverincreases,thefirmwillgeneratesmoresalesforeveryunitofassetsowned,againresultinginahigheroverallROE.Finally,increasingfinancialleveragemeansthatthefirmusesmoredebtfinancingrelativetoequityfinancing.Interestpaymentstocreditorsaretaxdeductible,butdividendpaymentstoshareholdersarenot.Thus,ahigherproportionofdebtinthefirm"scapitalstructureleadstohigherROE.Financialleveragebenefitsdiminishastheriskofdefaultingoninterestpaymentsincreases.Soifthefirmtakesontoomuchdebt,thecostofdebtrisesascreditorsdemandahigherriskpremium,andROEdecreases.Increaseddebtwillmakeapositivecontributiontoafirm"sROEonlyifthematchingReturnonassets(ROA)ofthatdebtexceedstheinterestrateonthedebt.However,itisimportanttonotethatifthevalueoftheshareholders"equitygoesdown,ROEgoesup.Thus,write-downsandsharebuybackscanartificiallyboostROE.Likewise,ahighlevelofdebtcanartificiallyboostROE,afterallthemoredebtacompanyhas,thelessshareholders"equityithas(asapercentageoftotalassets),andthehigheritsROEis.Someindustriestendtohavehigherreturnsonequitythanothers.Asaresult,comparisonsofreturnsonequityaregenerallymost65 meaningfulamongcompanieswithinthesameindustry,andthedefinitionofa"high"or"low"ratioshouldbemadewithinthiscontext.Formoreonreturnonequity(ROE)readarecompanieswithanegativereturnonequity(ROE)alwaysabadinvestment?ROAandROEgiveclearpictureofenterprisehealth.66 Figure4–7:ROEinpublishingbusiness.403020100-10-20246810121416ROENROESFigure4–8:ROEinfoodbusiness.40200-20-40-60-80-1002468101214161820ROENROES67 Figure4–9:ROEinconstructionBusiness.6040200-20-40-60-80-1005101520253035404550ROENROESb.CompareROA.Thereturnonassetsformula,sometimesabbreviatedasROA,isacompany"snetincomedividedbyitsaverageoftotalassets.Thereturnonassetsformulalooksattheabilityofacompanytoutilizeitsassetstogainanetprofit.Netincomeinthenumeratorofthereturnonassetsformulacanbefoundonacompany"sincomestatement.Netincomeistheamountearnedbyacompanyaftersubtractingouttheexpensesincurred,includingdepreciationandtaxes.Averagetotalassetsinthedenominatorofthereturnonassetsformulaisfoundonacompany"sbalancesheet.Theaverageoftotalassetsshouldbeusedbasedontheperiodbeingevaluated.Forexample,ifaninvestoriscalculatingacompany"s2015returnonassets,thebeginningandendingtotalassetsforthatyearshouldbeaveraged.Returnonassetsindicatesthenumberofcentsearnedoneachdollarofassets.Thushighervaluesofreturnonassetsshowthatbusinessismoreprofitable.Thisratioshouldbeonlyusedtocomparecompaniesinthesameindustry.Thereasonforthisisthatcompaniesinsomeindustriesaremostasset-insensitivei.e.theyneedexpensiveplantandequipmenttogenerateincomecomparedtoothers.TheirROAwillnaturallybelowerthantheROAofcompanieswhicharelowasset-insensitive.AnincreasingtrendofROAindicatesthattheprofitabilityofthecompanyisimproving.Conversely,adecreasingtrendmeansthatprofitabilityisdeterioration.Thisnumbertellsyouwhat68 thecompanycandowithwhatithas,i.e.howmanydollarsofearningstheyderivefromeachdollarofassetstheycontrol.It"sausefulnumberforcomparingcompetingcompaniesinthesameindustry.Thenumberwillvarywidelyacrossdifferentindustries.Returnonassetsgivesanindicationofthecapitalintensityofthecompany,whichwilldependontheindustry;companiesthatrequirelargeinitialinvestmentswillgenerallyhavelowerreturnonassets.ROAsover5%aregenerallyconsideredgood.ROAtellsyouwhatearningsweregeneratedfrominvestedcapital(assets).ROAforpubliccompaniescanvarysubstantiallyandwillbehighlydependentontheindustry.ThisiswhywhenusingROAasacomparativemeasure,itisbesttocompareitagainstacompany"spreviousROAnumbersortheROAofasimilarcompany.Theassetsofthecompanyarecomprisedofbothdebtandequity.Bothofthesetypesoffinancingareusedtofundtheoperationsofthecompany.TheROAfiguregivesinvestorsanideaofhoweffectivelythecompanyisconvertingthemoneyithastoinvestintonetincome.ThehighertheROAnumber,thebetter,becausethecompanyisearningmoremoneyonlessinvestment.Forexample,ifonecompanyhasanetincomeof$1millionandtotalassetsof$5million,itsROAis20%;however,ifanothercompanyearnsthesameamountbuthastotalassetsof$10million,ithasanROAof10%.Basedonthisexample,thefirstcompanyisbetteratconvertingitsinvestmentintoprofit.Whenyoureallythinkaboutit,management"smostimportantjobistomakewisechoicesinallocatingitsresources.Anybodycanmakeaprofitbythrowingatonofmoneyataproblem,butveryfewmanagersexcelatmakinglargeprofitswithlittleinvestment.69 Figure4–10:ROAinpublishingbusiness.20151050-5-10246810121416ROANROASFigure4–11:ROAinfoodbusiness.403020100-10-20-30-402468101214161820ROANROAS70 Figure4–12:ROAinconstructionBusiness.20100-10-20-305101520253035404550ROANROASObservethegraphfrom4-9to4-12wesee,ROAofSatetheenterprisetendstolowerNonStateenterprise.WecanconcludethatNonStateenterpriseoperationsmoreefficient.c.Analysiscoefficientofcorrelation.Thestrengthofthelinearassociationbetweentwovariablesisquantifiedbythecorrelationcoefficient.Sincetheformulaforcalculatingthecorrelationcoefficientstandardizesthevariables,changesinscaleorunitsofmeasurementwillnotaffectitsvalue.Forthisreason,thecorrelationcoefficientisoftenmoreusefulthanagraphicaldepictionindeterminingthestrengthoftheassociationbetweentwovariables.Correlationanalysisisoneofthemostwidelyusedandreportedstatisticalmethodsinsummarizingeconomic,medicalandscientificresearchdata.Inthisarticlethebasicaspectsofcorrelationanalysiswillbereviewedwithemphasisplacedupontheinterpretationsandlimitationsofthecorrelationcoefficient.Nofocuswillbegiventotheactualcalculationofthisstatisticalvalue.Itisoftenusefultodetermineifarelationshipexistsbetweentwodifferentvariables.Givenasetofobservations(x1,y1),(x2,y2),...(xn,yn),theformulaforcomputingthecorrelationcoefficientisgivenbyPearsonCorrelationCoefficientFormula:Where:xi:theithnumberofxyi:theithnumberofyn:totalnumbersofxoryr:Thecorrelationcoefficient,-1<=r<=1,1representsstronglypositivelycorrelated,-1representsstronglynegativelycorrelated,0representsnocorrelation.71 Instatistics,thecorrelationcoefficientrmeasuresthestrengthanddirectionofalinearrelationshipbetweentwovariablesonascatterplot.Thevalueofrisalwaysbetween+1and–1.Tointerpretitsvalue,seewhichofthefollowingvaluesyourcorrelationrisclosestto:Exactly–1.Aperfectdownhill(negative)linearrelationship–0.70.Astrongdownhill(negative)linearrelationship–0.50.Amoderatedownhill(negative)relationship–0.30.Aweakdownhill(negative)linearrelationship0.Nolinearrelationship+0.30.Aweakuphill(positive)linearrelationship+0.50.Amoderateuphill(positive)relationship+0.70.Astronguphill(positive)linearrelationshipExactly+1.Aperfectuphill(positive)linearrelationshipAnalysiscoefficientofcorrelationbetweenROEandWage.ROEMINIMUMROE1.0000000.295747MINIMUM0.2957471.000000ROEAVERAGEROE1.0000000.366593AVERAGE0.3665931.000000ThecorrelationcoefficientbetweenROEandthe0296minimumwage,itcanbeconcludedthatbetweenROEandminimumwagecorrelatedwitheachother,however,thiscorrelationislow.ThecorrelationcoefficientbetweenROEandthe0.366minimumwageitcanbeconcludedthatbetweenROEandminimumwagecorrelatedwitheachother,however,thisisaveragecorrelation.However,toensuremorecoherenceandmoreaccurate,weshouldalsocheckouttherelationshipbetweenwagesandtheROAratio.AnalysiscoefficientofcorrelationbetweenROAandWage.ROAAVERAGEROA1.0000000.473455AVERAGE0.4734551.000000ROAMINIMUMROA1.0000000.376288MINIMUM0.3762881.00000072 ThecorrelationcoefficientbetweenROAandthe0.473minimumwageitcanbeconcludedthatbetweenROEandminimumwagecorrelatedwitheachother,however,thisisaveragecorrelation.ThecorrelationcoefficientbetweenROEandthe0.376minimumwageitcanbeconcludedthatbetweenROEandminimumwagecorrelatedwitheachother,however,thisisaveragecorrelation.4.5Result:Wageimpactonworkingeffectiveness.Basedondatacollectedfromnearly100enterprisesinfourdifferenttypesofbusinesstobeconsideredintwogroupsofstateandnon-stateenterprise,theauthorcandrawconclusions:ObservationsectionIV.4foranoverviewoftherelationshipbetweenwagesandresultsofbusinessoperationsoftheenterprise.Iteasilyfoundbetweensalaryandperformancebusinessrelationshipintimately.Astheresultofcomparisonwaspresentedonecanseethat:1.Theminimumwageandaveragewageinnon-stateenterprisesishigherthanstateenterprises.2.Moreever,financialratiosROE,ROAofnon-stateenterprisesishigherthanstateenterprises,whichreflectthefactthat:non-stateenterprisesbusinessactivitiesmoreefficientthanstateenterpriseswhichoperatingresultsofthebusinessisthecombinationoftheindustrialworkingprocessofapersonnelsystem,itslivingresources,thelivingresourcesoftheenterprises.Ifgoodhumanresourceactivities,personnelsystemsworkeffectively,organizationsandenterprisestoachieveefficiencyinbusiness,thisisonlypossiblethroughfinancialindex.Thus,throughfinancialindicatorsROA,ROEcanseetheoverallpictureoftheeffectivenessofemployeesworkingintheorganization.SoROE,ROAofnon-stateenterprisesishigherthanstateenterprises,onecansaythattheworkefficiencyofemployeesinnon-stateenterprisesmoreefficientworkingofemployeesinstateenterprises.Visualobservations1and2,weseetherelationshipbetweenwagesandworkingefficiencyofemployees.However,formoreprecise,weobservedcorrelationbetweenwagesandROE(despitedifferencesinthenatureofthefinancialindices,herethewriterdoesnotgointodetails,butingeneralthetwoindicesreflectthebusinesssituationofenterprises):Minimumwages,andaveragewageshavelowcorrelationwithROE,besidesthattheminimumwage,theaveragewageiscorrelatedwiththeaveragelevelofROA.Althoughthecorrelationisataveragelevel-andlow,butstill73 reflecttheproportionalrelationshipbetweenwagesandoperatingresultsofthebusiness.Inotherwords,itreflectstheproportionalrelationshipbetweentheamountwageandperformanceofstaff(becausetheresultsofthebusinessistheconvergence,amassedanemployee"sworkingprocessortheresultsofthebusinessalsoreflectstheworkefficiencyofemployees).Insummary,throughthedataanalysiswecanconcludethat:wagesaffectingworkefficiencyofemployees.74 5.CONCLUSION5.1Mainthesisandfindingofthestudy.Thisthesisprovidesaninsightintothedifferencebetweenwagesofstateenterprisesandnon-stateenterprisesinVietnam.Thisincludedthedifferencebetweenthetwowagesystemandthedisparityintheamountofwages.Thisthesismentionedintheactualwagesofstateenterprisesislowerthannon-stateenterprises,thisexplainsthecausesofcorruption,bribery,negativeinthesystemofstateenterprises.Andmostimportantly,italsoexplainsthecauseofoperationalinefficiency,losses,massbankruptcyofstateenterprisesinVietnaminrecenttimeinterval.Thethesisprovesthatwagesaffecttheworkefficiencyofemployees.Thisisthecoreissueofthesisandthisreallygoodagreementwiththetheoryoflabormotivationofpreviousresearchers.5.2Discussion.5.2.1Therealityofthewagedifferencebetweenstateenterprisesandnon-stateenterprises.Wagepolicyintheprivatesectorisrelativelyconsistentwiththeemployeesmeettheneedsofstrongcompetitionamongenterprisestoattracthumanresources.However,thewagepoliciesinnon-stateenterprisesstillrelyonthestatepayrollsystemshouldexistsomeshortcomingsmainlyfollowing:Thewagepolicystipulateswithmanygradesthatareirrelevantanddonotrepresentrelationshipbetweenrespectivelaborerclasses.Thewagegradesdonotrepresentlevelofeducationoflaborers:laborersatmasterordoctordegreearealsocategorizedasthoseatbachelordegreesalthoughcostofeducationandefficiencyofthesedifferentlaborerclassesarenotthesame.Itisanirrelevanceofthewagepolicyandagainstitsinitialobjectiveofmotivation.Thatiswhythepolicycoulddiscouragelaborerstostudyathigherlevel.Accordingtothecurrentwagepolicywagegradeisbasedoncorrespondingjobdescription.However,infactthereisnotlikethis.For75 example,anofficialthatworkasaseniorofficialcouldnotearnaswagepaidforaseniorofficial.Inbrief,itisnotguaranteedthatyouwillbepaidforwhatyoudoAsthereisthedifferentwagepolicybetweenthatstateenterprisesectorandthatinnonstateenterprisesectors.Itdiscouragesoperationalindependence,financeself-sufficientandcausesincreaseinlaborforceandwagecostinthestateenterprisesector.Officialsinthissectorcouldnotbequalifiedforandmeetthejobrequirement.Numbersofofficialsinthissectorarenotequivalenttothatapprovedforthewagefund.Insomecasesthereareviolationsinplacingandupgradingwagegrade.Externalincomeratherthanwagepaidbythenationalbudgetisoutofcontrol.Itisafactthatthewageislowbuttheexternalincomeseemstoincrease.Alotoflabourersearntheirlifenotbywagebutexternalincomesothewageseemsnottobeitsinitialrole.Incaseoflowwagelaborersstrivetoearntheirlifefromcorupption.ItmaybeoneofreasonsforexistanceofcorruptioninVietnam.Wageofofficers,civilservantsandemployeesofstateenterprisesisboundanddominatedbythestatebudgetsowagesarelow,andlowerthanthemanufacturingsector,business.Stateenterprisesarenotguaranteesofficialsandcivilservantslivingbywages.Inadditiontolargenonwageincomeisoneofthecausesofnegativityandcorruption;wagerelationshipisirrational,thecoefficientofwagestiedtoocloselytotheminimumwage;wageshavenotmountedtightlytotheposition,titleandworkefficiency,thequalityofpublicservice.Reasonsoftheaboveissues:Firstly,Vietnameconomyisgrowingbutnowatthelowlevelwithalimitedbudget.Thelimitedbudgetcouldnotfullysatisfyneedsofwageandallowancepolicy.Secondly,Vietnamhastransformeditseconomyfromcentralplanningtomarketmodelbuttheamendmentofwagepolicyisnotcorrespondingtoadapttothetransformation.Furthermore,thereisnostrictsupervisionofwagepolicyapplicationthatcreatesmoreirrelavenceLastly,administrativestructureisnotefficient.Renovationinwagepolicyisnotcorrespondingwiththoseinadministrativesystem,Stateownedcompaniesandsocialinsurancepolicies.76 5.2.2LowwageisoneofthecauseinefficientworkinginStateEnterprise.Wagesinstateenterprisesisstilllowcomparedtothesamesectorofnonstateenterprise,Thislowwagesaffectthepsychologyofemployeesworking,employeesarenotcomfortableworking,notwholeheartedlyforthejob.Stateenterprises,thewagesdependingonthenationalbudgetsostaffwagesshouldremainlow,stateenterprisesdifficulttocompeteinrecruitingandretainingtalent.Highlyqualifiedlaborwilleasilyleavethestate-ownedenterprisesandtheirsearchforabettertreatmentenvironment.Therefore,considerthegeneralleveloftheindustry,thequalityoflaborinstateenterpriseslowerthequalityofthelaborofnonstateenterprises.Thisisafundamentalexplanationforthepoorperformanceofstateenterprises:Lowwagescanonlyleadtotherecruitmentofpoorquality,leadstolessefficiencywork.Lowwagesinstate-ownedenterprises,thequalityoflifeofemployeescannotbeguaranteed,wagesarenotenoughtosatisfytheneedsoflife,doesnotmeetthematerialneedstoreproducelaborpower.Thisdirectlyaffectsthehealthofemployeesandpartlyaffectsthequalityofwork.Thelivingwageisnotenough,employeesforcedtoworkovertimelookingforextraincometooffsetthesalaryshortfallinsteadofworkinginstate-ownedenterprisesonly1day8hours(asprescribedbyVietnam"slaborlawscurrent)employeesmustworkafewhoursadayintheothercompany,anotherjobtoearnextraincome.Hence,employeesinStateenterprisescanworkaverageover10hoursaday.Thisdirectlyaffectsthehealthoftheemployeeswhenhealthconditionsareaffectedwillleadtoeffectiveworkinthepoor,workingpoorconcentration,distractedortheworkoutsideofemployeescandirectlyaffectrelationshipsandworkintheinterestsofthestateenterprises.Theemployeesoftensacrificetheinterestsofstateenterprisesforthepurposesofworkoutsideofthemselves.Thatisalsooneofthecausesoftheinefficiencyofstateenterprises.Becausewagesinstateenterprisesislow,officialseasilypersonalinterestsforthemselves,resultingincorruption,negative.Thisiasadrealityandverycommoninstateenterprises.Oncetherecorruption,negativethentheworkingefficiencycannotbehigherandthebusinessresultsofenterpriseswhichwillbeaffected.77 Wagesareconsideredoneofthebasicmotivationboostemployeeefficiencyandisoneofthefactorsthatcontributedtothebusinessperformanceoftheenterprises.However,inthecurrentsituationofstateenterprisesinVietnam,wageshavenotreallymotivatedtopromoteactiveemployee,notreallyafactortoholdtalent.Oncethebasicconditionsarenotsatisfied,thenthequalityofworkofemployeeswillnotbehighandlowwagesisconsideredasoneofthereasonsforworkingininefficientstateenterprisesinVietnam.5.3Solution5.3.1ExperienceofChina.The1993wagereformthusproducedaveryregularwageprogression.Staffandworkersinstateorgansandadministrativefacilitiesmoveupthewagescaleastheyadvanceintheirjobsandatthesametimebenefitfrombi-annualadjustmentsofthecompletewagescale.Whileentryandexitintotheworkforceofstateorgansandadministrativefacilitiesmaybalanceeachotherandanindividual’sjobprogressionthusmayhavenoinfluenceontheoverallwagebill(ortheaveragewage),thebi-annualadjustmentislikelytohavecreatedamomentumforregularwageincreases.Thesewageincreasesarenottiedviaanyformulato,forexample,priceincreases.Rather,thereferencetothreevaguelyphrasedunderlyingfactors−livingcostsforstateorgansandinflationforadministrativefacilities,economicdevelopment,andwagelevelincomparablepositionsinenterprises−suggestsscopeforalargepoliticalorotherwisenon-economicelementinwagedetermination.Wagesystem:Forstateorgans,salariesareunifiedacrossoccupationsandcomprisefourcomponents:(i):position-basedwage(positions)withawagerangeforeachposition(ii):15wageranks(level)(iii):basicwage(identicalforeveryone),and(iv):age-basedwage.Inlate2001,forexample,themonthlyposition-basedsalaryofaministerrangedfrom560to1190YuanRMB,therank-basedsalaryfrom115to1166YuanRMB,78 thebasicsalarywas230YuanRMB,andtheage-basedsalaryamountedtooneYuanRMBperworkyear(SC,23September2001).Thebasicwageistobeadjustedinaccordancewithurbanlivingcosts,whiletheotherthreecomponentsofthesalaryaretobeadjustedinaccordancewiththelevelofeconomicdevelopmentandthewagelevelincomparablepositionsinenterprises.Thewagestandardsofadministrativefacilitiesfollowsimilarprinciples,althoughmuchdependsoninwhichoffivecategoriesthefacilityfalls(rangingfromeducationalunitstofinancialinstitutions),andemployeestypicallyenjoyjustonewagecomponent(thepositionalcomponent)plusallowances,whichseemtoplayamoreimportantroleforadministrativefacilitiesthanforstateorgans.Bonusesarepossible.Adistinctionismadebetweenprofessionalandtechnicalpersonnel(professionaltechnicalemployee),administrativepersonnel(humanmanager),andworkers(employee,oftechnicaland“ordinary”type).The“age-basedwage”representsverysmallamounts,asitisequaltothenumberofyearsofserviceinCNY:CNY7permonthforacivilservantwhohasbeenworkingsevenyears.Itisameanstocounttheyearsofservice,whichinfluencestheattributionofotherbenefitstothecivilservants.Regionalallowances:Becauseaveragewagesintherichestpartsofthecountryareatleastdoubletheaveragewagesinthepoorestareas(NationalBureauofStatistics,2003),civilservants,stateemployeesreceivecashallowancestohelpdefraycost-of-livingdifferentials.Thegovernmenthasalsolaiddownseparatesalaryscalesformajoroccupationgroupsemployedbypublicserviceunitswhicharealsotoppeduptoreflectlocalconditions.Incentiveofstateemployees:Inadditiontoabasicsalary,thegovernmenthasprovidedstateemployeeswithgoods(suchashousing),servicescashsubsidiesandallowances(Burns,2003b).Until2003virtuallyallcivilservantswereprovidedwithhousingatgreatlysubsidisedprices.Fromthemid-1990s,thestockofcivilservicehousinghasbeensoldoffgraduallytocivilservantsatmuchbelowmarketprices.Since2003,aspartofthereforms,governmentdepartmentshavereplacedtheprovisionofdepartmental79 quarterswithcashpayments.NewlyhiredcivilservantsinBeijingcomplain,however,thatthepaymentshavenotkeptupwithrisingpropertyprices.Chinahasgotsomecertainachievementsduringofwagereform.Thewagereformnotonlycreatingafairsystemofwageandrewardforstaffofficersbutalsocontributingincreatingafairandstablesociety.Chinaisabigeconomyanddeveloped,thesuccessofthereformofChina"swagesarealsoagreatlessontotheweakeconomyofVietnam.5.3.2SolutionforVietNam.Asadevelopingcountryandeconomiccharacteristics-socialsimilaritieswithChina,Vietnamalsoundertookreformswagespolicyforpublicservantsbasedontheexperienceofmanycountries,includingChina.Setthesalarysysteminthestateenterprisessectorhasensuredthatcompetitionwiththenonstateenterprisessectorandattractedtalentedemployeestowork.Becausethestateenterprisessectorplaysaveryimportantroleandkeynationaleconomy,hence,itisnecessarytoattractqualityworkforcetocreateeffectiveworkhighinthisstateenterprises.Needtocuttothemaximumnumberofemployeesinstateenterprises,retainingonlythenumberofemployeesneeded,avoidingexcessmanpowerinthissector.Employeesinthissectorarepaidfromthestatebudget,sotheexcessemployeerestrictionwillhelptosupportthewagefundexhaustionandeasytoconsiderwageincreaseforthecoreworkforce.Wagesandincometopayfortheemployeestoensureadequateliving,reproducingthelaborpoweroftheemployees.Theleveloftheminimumwagetomeettheneedsofminimumlivingstandardsofworkers,inaccordancewiththewageflooronthemarket,theabilityandlevelofeconomicdevelopmentoftheenterpriseasabasisforagreement,negotiatedbetweenthepartieswithintheenterpriseaboutwage.(Observingsampleenterprisesintypesofstateenterprises,thereisstillexistsomeenterprisesthattheminimumwageisverylowanddoesnotmeettheminimumlivingneedsofworkers).Theminimumwageinthestateenterprisessectorshouldbecalculatedbytheaverageoftheminimumwageofthenonstateenterprisesectors.Simultaneously,80 increasewagecoefficientforofficialsandemployeesintheregionsthatlabormarketisdevelopmenttotheminimumwageofthemhigherthantheminimumwageofnonstateenterprisesector,ensurethecompetitivenessofstateenterprisesectoronwageandattracttalentedemployeesworkforthestateenterprise.Minimumwageregulationsapplicabletoofficialsandpublicservantsmustbecalculatedbasedonthepercapitaspendingofthecountrytoensurethattheminimumwagewouldstillmeetthebasicneedsofworkers.Forstateenterprises,toimplementtherestructuringimmediatelyorconsidereddissolveloss-makingenterprisesformanyyearstoreducetheburdenonthebudget.Thisnotonlyhasimplicationsforthenationalbudget,butalsoofgreatsignificanceforthecountry"seconomy,makingtheeconomymoreefficientoperationensuringsustainabledevelopmentgoals.Inaddition,thestateenterprisesdobusinesseffectivelyalsoneedtoregularlyre-evaluate,carriedoutreformstowardsimprovingcompetitiveness,reducingthenumberofexcessemployee,choosethemanagementthroughexamination...toachievethehighestefficiencyinproductionandbusinessThepolicyofgradewages,senioritywagesstillformalisticofthestateenterprisesectorshouldchangebyadynamicwagepolicyandmoresuitable.Forexample:wagespolicytiedtoproductivityorassociatedwithjobperformanceorwithprofessionalqualifications.Implementingtheprincipleoffairnessindistributeofwagesandincomeintheenterprise.Wagesandincomepaidtoemployeesmustbecommensuratewiththecontributionofemployees,dependingontheproductivityofemployee,efficientproductionandbusinessofenterprises.81 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ACKNOWLEDGEMENTThisprojectwouldnothavebeenmadepossiblewithouttheassistance,supportandencouragementofmanypeople.Iwishtotakethisopportunitytothankallthepeoplewhohavehelpedmeduringthetimeofcompletingthisstudy.IwouldliketoexpressmydeepgratitudetomysupervisorDr.XiaoXianginHunanNormalUniversity,ChangShaHunan,China.Hehaskindlyhelpedmeandsupportedmeallthewaythrough.IalsowouldliketoexpressmythankstoHunanNormalUniversity,Businesscollege,whoinitiatedtheprojectandgivesomuchinstructionandsupport.Additionally,Ialsowouldliketoextendmyspecialthankstomanagers,accountants,myfriends,andotherpeoplewhohavehelpmetocollectdatabase.Iwanttothankthemforalltheirsupport,interestandvaluablehints.88