ISABELA STATE UNIVERSITY CAUAYAN CAMPUS

SY: 2019-2020

REMUNERATION: IT’S EFFECT TO EMPLOYEES’ MOTIVATION AND

WORK PERFORMANCE

Mendoza, Ana Marie

Mercado, Arlene
Narag, Daniel
Paguiriguan, Rosevil
Reymundo, Jam
Reyes, Bonifacio
Soriano, Gwyneth
Surbida, Hazel
Tagtagon, Xyra
Villanueva, Lordwin John
Vinoya, Micca

December 10, 2019

ABSTRACT

Remuneration refers to the monetary compensation received by employees for

work rendered. This study aims to collect perceptions of School of Arts and Sciences

faculty members as well as its importance to their well-being; measure their level of

satisfaction and; examine the effects of remuneration to their motivation and work

performance. The researchers used mixed method of qualitative and quantitative

approach in gathering, analyzing and interpreting of data. The results of the studies shows

that
 CHAPTER 1

PROBLEM AND ITS BACKGROUND

Motivated employee plays a vital role in the achievement and realization of an

organization’s mission and vision in pursuit for success. Employees’ motivation is

defined as a “complex forces inspiring a person at work to willingly use his capacities

for the accomplishment of a certain objective” (Murey, 2017). Studies show that one way

of molding a motivated employee is through fair and justifiable reward system

particularly remuneration. Calvin (2017) states that there is a direct relationship between

remuneration and employees’ work motivation for which remuneration serves as a

“source of motivation.” Employees can either be motivated or demotivated depending on

how these rewards compensate to their skills or work efforts (Oke, n.d.).

Basically, remuneration is one of the 14 Principles of Administration proposed by

Henri Fayol. This refers to the payment or compensation of rendered works and services.

As perceived by the Father of Modern Management himself, remuneration process should

both benefit the employer and employees. Remuneration is any monetary or financial

compensation given by a firm or employer to an individual or group of individuals as a

reward to their work efforts as well as a basic motivator to commit them more into their

works. This includes salary, wages, incentives and bonus (Calvin, 2017). However,

remuneration can also come in the form of non-monetary value such as praise,

recognition and even services (i.e. canteen services, medical services etc.). Though

money is not everything, we cannot hide the reality that it indeed contributes in boosting

up the morale of employees to do more.

 The way remuneration alters the behavior of each employees varies from one

person to another. Some employees may find money to be more rewarding whereas

others feel otherwise. It is the unseen sensation that matters. Thus this study will carry

out in order to identify the different ways employees perceived remuneration as well as

provide a comparison analysis between two categories of employees- the permanent and

contractual. Doing so, one can be able to grasp if there is a significant effect of

employees' contract status in the workplace to the manner he/she views remuneration.

Also, this study will be conducted to determine the role of remuneration to the

employees' motivational spirit and work performance at general. Despite the numerous

available studies and researches which had already been conducted, it is still very

important to conduct a timely and contextualize output in order to assess matters

concerning remuneration. Hence, the purpose of this study is to find out and highlight the

existing relationship as well as the impact of remuneration to employees' motivations and

work performances in the context of SAS ISU Cauayan.

RESEARCH OBJECTIVES

• To identify the perception of School of Arts and Sciences Faculty members on

remuneration:

(a) Permanent

(b) Contractual

• To determine the importance of remuneration to the SAS faculty members;

• To measure the level of satisfaction with regards to remuneration among:

(a) Permanent Employees

(b) Contractual Employees

• To examine the effect of remuneration as to their :

a) Motivation

b) Work performance

HYPOTHESIS

There is significant effect of remuneration to motivation and work performance of

SAS Faculty members in ISU Cauayan Campus.

There is no significant effect of remuneration to motivation and work

performance of SAS Faculty members in ISU Cauayan Campus.

STATEMENT OF THE PROBLEM

This study aims to assess the effectiveness of remuneration in motivation and

work performance of SAS faculty members at the Isabela State University Cauayan

Campus for the school year 2019-2020.

Specifically, this aims to answer the following questions:

1. What is the profile of the respondents in terms of :

a) Gender

b) Level of Education

c) Years of Service

d) Amount of Salary

2. What is the perception of SAS faculty members in terms of remuneration:

a) Permanent

b) Contractual

3. What is the importance of remuneration to the SAS faculty members?

4. What is the respondents level of satisfaction with regards to remuneration?

5. Is there a significant relationship between the respondent’s profile and level of

satisfaction with regards to remuneration?

6. What is the impact of remuneration to the work performance of faculty member :

a) Permanent

b) Contractual
SIGNIFICANCE OF THE STUDY

The results of this study will provide knowledge or information on how

remuneration affect the work performance of the employee and how remuneration can

also motivate the SAS Faculty Members at ISU Cauayan Campus. The outcomes of this

study are beneficial to the following;

Employers. The result of this study will provide the employers sufficient information to

know what the effects of remuneration in terms of motivation are and work performance

of their employees.

Government.The result of this study may help the government to know what to improve

and develop to further motivate employees particularly teachers to do their job well.

School Administration. This study may provide guidance for school administrators to

better understand their employees and act accordingly in order to establish loyalty of

teachers to their work and to the institution at large.

Student – This study will help the student realize that it’s not easy to be a teacher and to

fully understand why their teachers are eager to teach them and what motivated them to

do so.

Future Researchers. This research paper will serve as a reference or guide to future

researchers who will also conduct a study which has connection to this paper. It may

trigger them to explore more about this study to arrive with some additions and/or

clarifications of present studies.

SCOPE AND DELIMITATION

This research is confined within the parameters of Isabela State University

Cauayan Campus particularly in the School of Arts and Sciences consisting of 26 faculty

members. This study will focus mainly in on how remuneration motivate the respondent.

CONCEPTUAL FRAMEWORK

In the study, remuneration is limited on monetary compensation employees

receive for their work efforts. It includes salary and wages as well as incentives/bonuses.

Remuneration is very important to motivate employees, and increase job satisfaction.

Which in return improves the work performances of the employees. Moreover, the size of

remuneration affects the work motivations and work performances. As it is shown in the

graph below:

GRAPH 1.1
W
O
R
R K
E M
M O P
U T E
SALARY/ WAGES
N I R
MONETARY
E INCENTIVE/ BONUS
V F
R A O
A T R
T I M
I O A
O N N
N C
E
DEFINITION OF TERMS

Remuneration refers to monetary rewards given to the employees as a compensation for

their works and service.

Monetary Remuneration refers to tangible and financial compensation received by

employees as a payment for their work (ie. wages and salaries).

Non-monetary Remuneration refers to intangible and non -financial compensation

received by employees as a payment for their work.

Employee Motivation refers to the willingness of employees to perform their job or

work well.

Permanent Employees are also called regular employee or directly employed wherein a

employee has a full time work in a specific organization

Contractual Employees in contrast to permanent employees, they are working for a

specific employer with a specific work and had to do what the employer told them to do

in line with their contract.

 CHAPTER II

REVIEW OF RELATED LITERATURE

Remuneration as one of the 14 Principles of Fayol

Remuneration is defined as pay or reward given to individuals for work done,

remuneration includes basic salary, wages, health schemes, pension schemes, and

transport allowances. This can be referred to as monetary or financial benefits in form of

salaries, wages bonuses, incentives, allowances and benefits that is acquired or given to

an employee or group of employees by employer as a result of rendered service,

commitment to the organization or reward for employment (Maicibi (2005) as cited in

Ojeleye and Yinka, 2017).

Uzuegbu & Nnadozie (2015) strongly stated that remuneration should be deserved

and received basing on the nature of work one does, financial state of the business as well

as the cost of living. Fayol pointed out that payment for each work efforts should be “fair,

just, and reasonable.”

Remuneration is traditionally seen as an individual’s total income and may consist

of a set of separate payments determined to different policies (Ojeleye, A. 2017).

According to Shields et.al. (2015) as cited in Alwaki M.( 2018), remuneration can be

alluded to as monetary in form of pay rates, compensation, rewards, impetuses,

recompenses and benefits that is accumulated or given to a worker or a group of workers

by the business because of benefits rendered by the employee(s), commitment to the

organization or compensation for work. Maicibi (2005) cited in Barbara (2011) stated that

wages should be fair and must show some element of equity. Fair wages can attract the

fury of employees in an economy. Without sufficient quantities life becomes highly

unsafe for the workers or employees. Salaries, wages and rewards are concerned and

should be recognized.

According to Białas, Litwin, & Waśniewski (2015), there is a relation between

remuneration and job satisfaction. Remuneration is considered one of the main factors

that motivates people to work. However, its importance for the employee and its impact

on job satisfaction remains unclear.

Remuneration as to Work Performance

Dewhurst et al. (2010) as cited in Aktar and Ali (n.d.) stated that human resource

provides basis for an organization to achieve sustainable competitive advantage. Since

organizations are operating in a dynamic and competitive business environment, they

need to develop strategies to acquire and retain the competent workforce. Nowadays,

human asset considered to be the most important asset of any organization and in order to

get the efficient and effective result from human resource motivation is necessary

Dobre (2014) stated that the performance of an employee is based on their effort,

ability and skills, and other factors, at least from the employees view or perspective. Also,

he stated that the employees private information with regard to the employer, the

employer must rely based on the performance measured to estimate the effort exerted by

the employee.
 According to Baker (2002) as cited in Tetteh (n.d.), remuneration pertains to pay

or rewards given to individuals work and it is an important factor that affects the

organization’s performance. It also includes basic salary, wages and other allowances

given by the organization.

Agburu (2012) cited by Yinka Calvin Ojeleye (2017) argued that employees are

motivated not by money alone but organizations continue rely on financial rewards.

Financial rewards are important to retain talent and assets of an organization and as with

the simply recognition of effort or contribution.

Michael Silverman (2004) stated that human resource performance was the work

of an employee behavior in conformity with its role in the organization. The performance

of an employee helps the organization to achieve its objectives or goals. Appropriate

wages and other reward system ensure the companies’ ability to attract, retain and

motivate employees.

According to Mabaso and Dlamini (n.d.), “reward is an external agent

administered when a desired act or task is performed, that has controlling and

informational properties". He further explains that rewards manage to increase the

probability of workforce will perform well or better on their job and have quality service,

depending on the relative importance in controlling and informational aspects of the

reward.

Zaman (2011) as cited in Edirisooriya (2014) pointed out that immediate rewards

are given to employees repetitively so that they can be aware of their outstanding

performance. This rewards include being praised by an immediate supervisor or it could

be a tangible reward. Rewarding should not only be applied to individual employees

within the organization but also to teams that perform excellently. Incentives given for

good behavior usually improve the relationship between the employees and management

because employees feel that they are being appreciated for their efforts and good work.

This leads to increased employee morale, better customer care as well as increased

productivity. Long-term rewards are awarded to employees who have been performing

well. Such an employee will become loyal to his or her organization and it reduces

employee turnover. Long term rewards include being made partner, or cash benefits that

mature after many years of service or at retirement. These rewards are very strategic for

retaining the best human resource.

According to Yokoyama (2010) as cited in Njanja, Maina, Kibet and Njag (2013),

incentives are effective in increasing performance. Rewards and recognition have a great

impact to employee motivations for it encourages to achieve goals effectively and "think

smarter" to provide quality performance.

Broad (2007) as cited in Danish (2010) Kalimullah (2010) suggested, that a

motivated employee has his/her goals aligned with those of the organization and directs

his/her efforts in that direction. In addition, these organizations are more successful, as

their employees continuously look for ways to improve their work. Getting the

employees to reach their full potential at work under stressful conditions is a tough

challenge, but this can be achieved by motivating them.

Jakobi (2013) stated that the workplace environment impacts employee morale,

productivity and engagement - both positively and negatively. The work place
environment in a majority of industry is unsafe and unhealthy. These includes poorly

designed workstations, unsuitable furniture, lack of ventilation, inappropriate lighting,

excessive noise, insufficient safety measures in fire emergencies and lack of personal

protective equipment. People working in such environment are prone to occupational

disease and it impacts on employee’s performance. Thus productivity is decreased due to

the workplace environment. It is the quality of the employee’s workplace environment

that most impacts on their level of motivation and subsequent performance. How well

they engage with the organization, especially with their immediate environment,

influences to a great extent their error rate, level of innovation and collaboration with

other employees, absenteeism and ultimately, how long they stay in the job.

Chandrasekar (2011) and Shields (2007) views basic pay as an important part of

total pay that is fixed and mainly time-based, rather than performance-based. Basic pay is

the largest fraction of the total pay for non-executive employees. It also acts as a

benchmark for other cash incentives such as profit sharing, which is expressed as a

percentage of basic pay. Basic pay helps to attract and retain employees. Employees use

basic pay to compare their job offers instead of using intrinsic rewards and other rewards

not captured in the formal organizational framework up to including job security. In a

competitive market, organizations pay above the market rates to retain their employees.

According to Elijah, Munene, Muturi, Wilfred (2014), a stimulating remuneration

system and a wide and more diverse range of employee benefits provide organizations

with a competitive advantage over the others in the labour market.

 Held (2016) as cited Urbancová, and Šnýdrová (2017) also agrees with the

preceding statement and indicates that an interesting system of employee benefits

together with a right remuneration system improves the name and competitiveness of the

organization in the labor market. The author also mentions the importance of fringe

benefits in order to recruit and retain employees and increase their involvement.

Remuneration can motivate employees to be more productive but does not have to

necessarily be compensation based. Remuneration can also be praise or recognition.

However, compensated remuneration can be effective in long-term motivation and

productivity, such as a raise or promotion. HR Village cautions not to overuse

compensation as a motivator, "what motivates good employees is the ability to see

projects through to their completion.” as stated by Owen. (n.d.).

The remuneration that one earns plays a fundamental role in motivating an

employee towards improved performance. As such, management in the civil service

needs to be reviewing the remunerations that their employees receive. This is due to the

fact that revised remunerations contribute to some extent in motivating them to perform

better at their places of work. (Maxwell et al., 2008) cited by Jemima Kerubo Ombongi

(2017)

Remuneration as to Motivation

According to Dobre (2013) remuneration is the main drive of one’s behavior in a

job. Motivation is a powerful tool that reinforces behavior and triggers the tendency to

continue. In other word, it is a desire to encourage an employee to perform a particular

activity .Dobre (2013) and Ganta (2014) stated that remuneration is the motivation of
employees will always improve the quality of work and the performance of the institution

According to Yomoto (2013), prior studies have also reported that remuneration is

an important factor for retaining employees, and employee salary level might affect

employees' intentions to move to other organizations. In addition, many employees

indicated that financial compensation such as competitive salaries and financial

incentives have a significant impact on whether they intend to continue working in an

organist.

In the study of Tourangeau et al. (2010) also reported that financial rewards

significantly influenced employees' intentions to move to competitor organizations when

they offered better cash incentives or bonuses. Some organizations adopted short term

employee retention strategies such as benchmarking employee salaries against competitor

organisations salary levels (Hosie et al., 2013).

Moreover, Camilleri, (2010) stated that allocating cash incentives to employees

can motivate them to remain in the organization and to help the organization achieve its

goals and objectives. Some researchers have highlighted that cash payments are one of

the factor in motivating employees to continue working in an organization and to perform

well (Hausknecht et al., 2009).

Remuneration is probably more important in job choice than in decisions to quit,

in part because pay is one of the few characteristics people can know with certainty

before taking a job. In contrast, once a person has been on the job for awhile,other factors

(such as quality of supervision) come into play ( Towers Perrin, 2013).

 Khan & Hoque, (2011) stated that good cash incentives could enable employees

to have better job satisfaction and this may reduce employee turnover. In previous

studies, employee salary and other financial rewards have been classified as important

organization stimuli than can improve employee retention (McKeen et al., 2010). In

addition, when employees are satisfied with their salary and pay system, they are more

likely to be committed to continuing to work in the organisation ( Yamamoto, 2013).

Based on existing findings in the area of human resource management, a

number of HRM practices, including employee benefits and employee remuneration,

have been identified as influencing the employee's intention to stay in their occupation or

industry (Loan-Clarke et al., 2010).

McKeen et al., (2010) stated that many organizations adopt successful human

resource practices and policies by offering non-salary benefits such as health benefits and

additional programs for marriage leave, childcare leave, parental leave and elderly care

leave to promote employee retention (McKeen et al., 2010).

In order to retain their employees, other organizations adopt effective human

resource practices to offer employee benefits such as stock options, sign-on bonuses and

financial retirement saving plans over a period of years (Tourangeau et al., 2010

According to Maicibi (2005) cited by Kayode (2013), they defined remuneration

as a reward for their work accomplishments. He also indicate all the non-monetary and

monetary reward that is given to the employees or group of employees in exchange of

their services.
 Also mentioned by Robbins and Couter (2003) as cited by Mitreva, E., Filiposki,

O., Taskov, N., Krivokapic, Z., and Jovanovic, J., (2017), there are different sources of

motivation, level of motivation of an individual and difference of motivation nature. The

Financial Motivation that is known by Frederick Taylor, he uses incentives to motivate

their employees to accomplish a task (Govindajulu and Daily, 2004). The remuneration

motivation influences the succes of an organization that is indicated according to Robbins

and Couter (2003).

Viswesvaran and Ones (2000) defined work performance as a result or behavior

of a employee that is inclined to the organizational objectives. Every employee receives

their pay-slip at the end of the month for the reward of his labor.

According to Website dictionary business (2015), “remuneration is the exchange

of goods and services that the business' offers.” This is their payment, wages, salary, and

benefits.

Cole (2002), Armstrong (2009), Weihrich, Cannice and Koontz (2008) and

Bateman and Snell (2009) have the same perspective for the performance - related pay.

Without the presence of remuneration, it decreases the employee’s motivation to perform

a higher level as their work performance

Remuneration in Monetary Values

Main and Johnston (1993) reported that remuneration committee seemed to be

associated with higher pay levels and has no positive impact on the pay incentive

structure. Bussin (2012) developed a generation of remuneration experts, helped define

the field of practice, and made a significant contribution to the national level of

excellence in the field.

Shlomo, Eggert, , and Nguyen (2013) stated on their study in the regulation of

remuneration policy in the financial sector of large parts of banking industry that bonus

payments have a short-term focus and risk-adjusted. These remuneration structures

continue as the banking industry is forced by labor market pressures. Unilateral

introduction of a longer-term focus in variable payment could put a bank at a first-mover

disadvantage.

Investopedia (2016) defined bonus as an additional compensation given to an

employee above his/her normal wage. A bonus can be used as a reward for achieving

specific goals set by the company, or for dedication to the company.

Heathfield (2016) bonus pay is compensation over and above the amount of pay

specified as a base salary or hourly rate of pay. The base amount of compensation is

specified in the employee offer letter, in the employee personnel file, or in a contract.

Employers can distribute bonus pay randomly as the company can afford to pay a bonus,

or the amount of the bonus pay can be specified by contract.

Agburu (2012) argued for the importance of salaries and wages in Nigeria, he

stated that wages should not only be adequate but they must also show some element of

equity, this is particularly true from the point of the employees. Anything short of a fair

and equitable wage or reward can quickly at tract the wrath of employees in an economy

such as Nigeria. For many Nigerian employees, wages or salaries are highly critical

issues. They are decisive because without them in sufficient quantities, life becomes
extremely precarious for the worker and members of his/her family. As direct financial

rewards, wages and salaries are the most emphasized by the employees, thus they sort of

take a centre stage in the scheme of things as far as rewards for work is concerned.

Surbhi (2015) also defined salary as a fixed amount paid to the employees at

regular intervals for their performance and productivity whereas wages are the hourly-

based payment given to the labor for the amount of work finished in a day. He further

argued that while Salaried persons are generally said to be doing “white collar office

jobs” which implies that an individual is well educated, skilled and is employed with

some firm and holds a good position in the society, whereas the waged person are said to

be doing “blue collar labor job” which implies that an individual is engaged in the

unskilled or semi-skilled job and is drawing wages on a daily basis.

Maicibi (2005) defined remuneration as pay or reward given to individuals for

work done. He further identified the indicators of remuneration include: basic salary,

wages, health schemes, pension schemes, transport allowances overtime allowances and

responsibility allowances.

Remuneration in Non-monetary Values

Wilson (2010) and Mukherjee, Dey, Mitra (2010) found out that compensation

both financial and non-financial generates innovation that lead to better business

performances. Rewards not just means by financial compensation, it also includes the

simple recognition that the employees are able to acquire or receive from their managers

or those who have higher positions and the opportunity to take responsible in an

important projects that will also help them to improve as an individual.

 Cassar and Meier (2018) acknowledged the role of money in regulating

employees; however, he highlighted the more in depth factor that makes an employee do

his or her works. An employee does not simply work for money rather for something

inatangible particularly one’s meaning and purpose of living. No matter how high or low

paying one’s job is, he or she will not simply leave it if he or she harbors passion for the

work.

Armstrong (2007) as cited in Harunavamwe and Kanengoni (n.d.) further argued

that a closer look on how employees are motivated indicates that it becomes disturbingly

clear that the more you use rewards to motivate, the more employees tend to lose interest

in whatever they had to do to get the rewards. The more reinforcing the reward is, the

more it erodes intrinsic interest. Therefore, various devices can be used to get employees

to do something, but that is a far cry from making people want to do something in this

regard, nonmonetary rewards apply. Theorists therefore point out the value of challenging

jobs, feedback, cohesive work teams and other non-monetary factors as stimulants to

motivation which should never be left out when addressing the subject of motivation in

the workplace.

As eloquently stated by Locke (2001) as cited in Harunavamwe and Kanengoni

(n.d.) four methods of motivating employees indicated that money rated the second

among lower-level employees. Such evidence demonstrates that money may not be the

only motivator, but it’s difficult to argue that it doesn’t motivate. This therefore opens up

the debate that non-financial rewards such as recognition, decision making and job

security have a role to play in the internal motivation of employees that monetary rewards
cannot address. To assume that financial incentives will always motivate people to

perform better is therefore as simplistic as to assume that they never motivate people to

perform better. The only issue that is certain about this is that multiplicities of

interdependent factors are involved in motivating employees ranging from money to non-

monetary

As mentioned by Dewhurst, Guthridge and Mohr (2009) as cited in Sait Dinc,

many researches argue that the use of non-monetary incentives, especially in jobs with

cognitive requirements, have a longer lasting effect on employee motivation. McKinsey

global survey of 1047 executives, managers and employees from different sectors

established that three non-financial incentives are even more effective motivators than the

three top-rated monetary incentives. The top three non-monetary incentives identified by

the report were: praise and commendation, attention by managers and new tasks

opportunity.

Ariely (2008) performance study found that even a task requiring very limited

cognitive efforts, a larger monetary reward led to a poorer performance. This study was

replicated several times and the results were consistent throughout. The people offered

medium monetary bonuses performed equal to those offered low bonuses and

interestingly enough, the people offered the highest bonuses performed worse than other

two groups. In conclusion, it seems that the high monetary rewards may cause additional

costs for institutions but may also have a demotivating or discouraging effect on

employees.
 Silverman (2004) as cited in Driel in his master thesis indicated that non-

monetory recognition schemes into two categories. The first category is called:

‘acknowledging the efforts of the employee’. This category contains for example:

appreciation, recognition and the manager saying ‘thank you’. The second category is

labeled: ‘giving the employee a present’. Among other things, the author lists as

examples: retail or travel vouchers, meals, theatre tickets and day trips. Furthermore, he

states that the most extensively used non-financial recognition schemes are: praise,

vouchers and nominationbased schemes. In this thesis, non-monetary bonus rewards are

defined as all bonus reward types that do not

Mahmood and Zaman (2010), cited by Sittenthaler and Mohnen in their

discussion paper indicated and analyzed the impact of cash and non-cash gifts and the

role of reciprocal behavior in a field experiment, confirm these results. Their study shows

that non-monetary gifts elicit more reciprocal behavior and result in significantly better

performance than cash gifts.

Significance to the Employees and Employers

Employees should be satisfied with the reward and employers should be assured

of the good work performance in return (Mtengenzo (2009) as cited in Ayomide,

Enobony & Godwin,et.al., 2017). Remuneration plays a critical role in attracting,

motivating and retaining high-performing individuals. (Bussin, 2012) Remuneration

strengthens, encourages and promotes good performance.

Mustapha, N. (2013), affirmed that the influence of financial reward on job

satisfaction is great. Remuneration system plays a key role in important role in

determining an employee's level of job satisfaction. The increasing demand for families

with higher living costs is forcing workers to seek higher incomes that can secure their

future and life satisfaction.

Daniels, Nielsen & Ogbonnaya (2017) found out that remuneration has a direct

positive impact to employees’ job satisfaction, organizational commitment as well as trust

to the authorities.

Calvin (2017) supported the idea that indeed remuneration shares a direct

relationship with employees’ motivation and work performance. Salary/wages and

bonus/incentives motivate employees to perform well.

Alwaki (2018) conducted a study among 200 listed employees of Stock Exchange

Company and founds out that an organization’s reward system has a significant influence

on the perception of employees about their work.

Elijah, Muturi, &Wilfred (2014) pointed out the importance of setting a satisfying

compensation in order to “attract, retain, reward, and motivate” its employees in order to

enhance performance and provide quality results. They have found out in their study that

it was poor remuneration that discourages the Kenyan Ministry of Internal Security to do

their duties and responsibilities. Their job payment is stagnat while the cost of living in

the country is increasing. Furthermore, “a good compensation drives growth within the

government and makes it more competitive, a bad compensation may turn an

organization to one of the financial woes.”

Stachowska (2016) stated that remuneration is “an instrument of building

employees’ engagement.” Remuneration fuels employees to do their job. Basically, one

works to earn a living but it is not the only ultimately goal. Rewards system’s role in

motivating employees should always be maximize too effectively and efficiently use

employed resources.

Morell (2011) highlighted the significance of non-monetary remuneration in the

current economic downturn whereas monetary rewards are not enough. A simple

appreciation of one’s work can intrinsically boosts his or her motivation to still work and

stay with the company even through the hard times. Moreover, non-monetary incentives

cannot only increase employees’ motivation and engagement but also lessen company’s

expenditures.

Farooq & Shafique (2016) stated that intrinsic rewards such as accomplishments

and recognition are more important than extrinsic ones (i.e. bonus, promotion). This is

both advantageous for the employers to reduce capital cost and for the employees to

achieve the sense of fulfillment within him or her.

Wagas & Saleem (2014) stated that employees will develop a sense of bond and

connection more with the authorities or employers given that the work environment is

comfortable and conducive. A manager who knows how to appreciate everyone’s work

efforts and rewards them accordingly through monetary or non-monetary means are

likely to yield positive outputs for they function as one. They concluded in their study

that both monetary and non-monetary rewards are much necessary for high employee

engagement. Having highly engaged employees who are willing to work for the

betterment of the organization, leads to effective and efficient productivity.

 Hariandja (2007) cited in Cahyanugroho, Hubeis, and Wijayanto (2016)

compensation plays an important role to increase employee job satisfaction. This

practices have been applied in public and private enterprises as to the rewards that the

employee received. Managements at modern days requires special endeavor in acquiring

and retaining highly skilled employees to have a competitive environment and operate

effectively. Evidently, job satisfactions have significant impact in their work

performances and compensation itself contributes organizational effectiveness.

According to Armstrong as cited by Stachowska (2016), genuinely interested

employees are absorbed in doing the job and even passionate about it whereas they can

even voluntarily do things.

Hubeis, Cahyanugroho, &Wijayanto (2016) added that companies should always

maintain component of remuneration, motivation, and work performance that have

positive effects to the functioning of the organization as a whole. It is to ensure that

employees are continually compensated and satisfied to commit themselves to work.

The Decision-making process for remuneration should take into company

expenditures, payability relative to same or similar positions and minimum pay level.

Qualified, competent and well-trained workforce is essential for any company to thrive

(Spankova and Grencikova, 2014). Remuneration decision based on a combination of

performance against business goals and overall individual role performance (HSBC,

2018).
 CHAPTER III

RESEARCH METHODOLOGY

This chapter presents the Research Methodology to aid in the completion of this

study. Research Design, Participants of the Study, Instrument of Data Collection, Data

Gathering Procedure and Data Analyses were included.

RESEARCH DESIGN

The researchers utilized a mixed method, qualitative for the first part and

quantitative for the second part. A qualitative approach was used to yield a more in-depth

understanding of the respondents’ perception of their remuneration and; its role to their

motivation and work performances. Also, a quantitative approach was employed to

measure the level of satisfaction of the respondents with regard to their remuneration.

PARTICIPANTS OF THE STUDY

The researchers targeted the whole population of College of Arts and Sciences

faculty members consisting of 26 total population both contractual and permanent.

However, due to schedule conflicts and unavailability of the respondents, only 12 was

interviewed and only 10 of the test questionnaires were retrieved.

INSTRUMENTS OF DATA COLLECTION

For the qualitative part, a formal guide questions was used on the face-to-face

interview with the respondents; and a test questionnaire was used on the quantitative part.

The interview guide question was consisted of five lead questions while the test
questionnaires was consisted of 15 items. Furthermore, both the guide questions and test

questionnaires were originally constructed by the researchers

DATA GATHERING PROCEDURE

The following procedure below stated the steps done by the researcher:

1. The researcher created a letter of approval that contains the aims of the study, as

well as its significance to the society.

2. After the letter was approved the researchers floated the test questionnaires and;

conducted an interview in CAS Faculty Members.

3. The test questionnaires were retrieved from the respondents.

4. The researchers started to profile the population.

5. All the retrieved questionnaires were being analyzed carefully.

DATA ANALYSES

Quantitative and Qualitative data approaches are applied in this research. The data

gathered on the interview were classified according to their themes; while the data

gathered using test questionnaires were analyzed using T-test. Moreover, the researchers

employed thematic coding for the qualitative part and; frequency and T-test for the

quantitative part.
 CHAPTER IV

RESULTS AND DISCUSSION

Perceptions of SAS faculty members on Remuneration

a.) Permanent

Based on Respondent A, remuneration is something they get from work,

Respondent B defined remuneration as salary and respondent C defined remuneration as

compensation while on the other hand Respondent D and E both believed that

remuneration is a financial compensation of the service rendered or compensate also to

their professional, license and expertise. According to respondent A, the role of

remuneration is to inspire while the rest of the respondents states that remuneration

motivates and compensates them. Respondent A stated that the ideal scheme in receiving

his/her remuneration is daily, while respondent D preferred “kinsenas katapusan” or 15

days’ pay. The rest preferred monthly. Respondent A stated that his/her ideal basis in

regards to setting remuneration is the complexity of the job. Respondent B supported

this by saying that compensation for every work should be based on the difficulty of

works. The lesser works done the lesser remuneration should be; the greater the work is,

the greater remuneration should be given. On the other hand, Respondents C stated that

the basis of remuneration should be based on the set standards. “It is the standard given

by the national government, approved by the Department of Budget and Management

(DBM) that should serve as basis in setting remuneration. Respondents D and E says that

it should be based on the qualification or position hold by that employee. Furthermore, all
of the respondents states that the basis of remuneration in ISU Cauayan is fair and

justifiable.

b.) Contractual

In particular, most of the contractual employees perceived remuneration as

payment given to employees. As explained by Respondent C “Remuneration is giving to

me what is due for me depending on the services I have rendered” same is true with

Respondent A , which also stated, “remuneration is the battery that makes us live”.

Respondent B further supported this by saying that remuneration “compensate efforts of

the employees...to satisfy employee basic needs”; and Respondent D later added that

“Remuneration makes you healthy not just physical but other aspects too” On the other

hand, Respondent C mentioned that “Remuneration helps me to become a better teacher

thereby helping me in personal and professional growth and development”. In terms of

ideal remuneration system Respondent A, B and E preferred every 15 days’ pay while

Respondent C eloquently answered that “I prefer a weekly schedule of receiving my

salary because it can make budgeting easier for me.” Respondent D also share different

preference from the majority. “...ideal? Monthly”. The monthly schedule of ISU’s

remuneration system is preferable for respondent D.

However, the delay in issuing remuneration particularly to contractual employees,

makes him doubt the system. “ISU’s remuneration system is not ideal for me as a

contractual because of delayed salary...minsan kasi mga months pa ang delay sa sahod
sa aming mga contractual.” (Sometimes the delay on the issuing of salary lasted for

months.)

In this juncture, most of the faculty staffs think that ISU’s remuneration system

particularly in the schedule of issuance of salary is not fair and justifiable. As argued by

Respondent C “It is not helpful because in the middle of the month, I have a lots of

expenditures” and Respondent D further explained that “It is not fair and justifiable

because we need money and it is not on time, this should be fair”

Importance of Remuneration

a) Permanent

Remuneration has a lot of importance to any employees who are working whether

permanent or contractual. Three out of the five respondents answered that remuneration

contributes to their will to do an official payable over time work. As Respondent D said,

“It is part of our sinumpaang tungkulin as a government employee” (pledged

responsibilities), whereas, Respondent A and B both answered that it doesn’t contribute as

respondent A said “because my productivity depends on my sense of responsibility” and

respondent B added that “it’s more on service credit”. All of the respondents agreed that

remuneration influence their commitment and loyalty to stay on their work. As

respondent B said because they are under government (CHED) there are continuous

benefits and also they all agreed that remuneration influence their commitment and

loyalty to stay here in ISU Cauayan.

 All of the respondents agreed that remuneration is an important factor directly

related to work because the manner an employee works is affected by his/her

remuneration. Respondent E firmly stated that “we basically work to earn a living.

Respondent A stated that “Remuneration partially serve as motivator for him to report to

school every day...though hindi lang naman eto yung purely na dahilan.” (...though this

is not the only reason.)

All of the respondents think that remuneration increases their stamina in reporting

to school. In relation to that, Respondent A stated that she have to report to school every

day “because if you don’t report your salary will be affected.” However, according to

Respondent B there is a system called service credit, which an employee can use in cases

of absences.

b.) Contractual

In considering remuneration as an important factor directly related to work, the

contractual employees’ perspectives were assessed. Respondent A and E asserted that,

“higher salary means better performance.” The bigger one’s salary is, the more

productive he/she is. However, Respondent B emphasized that “Oo, pero sa aming linya

nang trabaho konsenya mo na kung magtratrabaho ka nang maayos…kasi para sa future

rin ito ng mga bata.” (Yes, remuneration contributes to our working performance,

however in our line of work, it will be up to your conscience if you do your job well…

because it is for the future of the kids). Respondent C stated that, “Remuneration has

become part of my motivation factors to teach, though intrinsic motivation is given

higher importance.” Finally, Respondent D stressed that remuneration is, “important but

not the most, it’s just for fulfillment”.

In addition to this most of the teacher agreed that remuneration increases their

stamina to report to school as stated by Respondent D, “Yes, the remuneration…but it’s

always delayed.” He admitted that remuneration motivated him to work even though

there are times that it was issued later than expected. On the other hand, Respondent C

believed otherwise. “My passion to teach is not affected by the amount of remuneration I

received”.

In terms of the willingness to do an official payable over time work, Respondent

A and E agreed that it can contribute to their will. However, Respondent B asserted that,

“Yes pero hindi lang naman yun yung rason, nag oovertime kana rin naman kahit walang

bayad kagaya nang sa pag gawa nang lesson plans and checking of papers.” Respondent

D added that, “we have no payment over time…ni hindi ko pa naman nararanasan

magkaroon ng OT na payable.” (I did not even experience having an official payable

overtime). Overtime payment are rare for contractual employees. However, Respondent

C stated that, “I will do my job because I want to, not because I will have my return.”

In terms of remuneration as influence to the loyalty and commitment in work,

Respondent A and E answered “Yes, of course, remuneration contributes to our loyalty

and commitment.” Respondent B cleared out that, “yes remuneration… pero yun nga,

hindi lang iyon yung rason. Mahal mo ang trabaho mo kaya ka papasok.” (But as I said,

it’s not the only reason. You love your job that’s why you report to school). Furthermore,
according to Respondent C, “My commitment is influenced by remuneration. However,

my biding factor to commitment is not remuneration but the eagerness of the students to

learn.” “It is not just about the remuneration it is about your commitment,” Respondent

D asserted.

When it comes in the role of remuneration in influencing the commitment and

loyalty of teachers to stay in ISU Cagayan, Respondent A, B and E are in favor. However,

Respondent B stressed that, “Remuneration motivates me, pero yung klase mo mismo,

yung pangangailangan ng komunidad ng maayos na edukasyon ang talagang

nagmomotivate sa akin personally.” (…but your class alone, the needs of the community

for proper education, are my motivators personally).

The two remaining contractual respondent namely Respondent C and D shares

different beliefs than the three. Respondent C stated that, “I will stay in ISU Cauayan

regardless of my remuneration as long as I still have my passion to teach” and

Respondent D stated that, “Yes at some point I am also learning in my work… that’s why

I am still here. You learn from the students unique and other aspects”.

Effects of Remuneration to Work Motivation

a.) Permanent

All of the respondents answered that remuneration contributes to their work

motivations as Respondent A stated that “Actually I have a lot of needs, but still it

motivates me even though it’s not enough”. According to respondent C, “Remuneration

alone is not enough. You have to have more sources of income and besides, not all needs

are satisfied financially”.

Also, all of them agreed that the value of remuneration makes them happy as

respondent D stated that “so far, yes, okay Lang, I don’t live beyond my means kasi…”

Another is, remuneration contributes to their productivity. As respondent E said “in

addition to personal development and growth, remuneration makes you productive”.

Furthermore, all of the respondent said that remuneration have a direct impact to their

work motivation.

b.) Contractual

In the effect of remuneration as to their motivation, most of them agreed that it

contributes to work motivation. Respondent C agreed, “Yes it is an intrinsic motivation…

it helps me grow and mature financially” while in terms of satisfying their needs,

Respondent C stated that, “My remuneration satisfy my physiological needs. However, it

does not affect other needs such as esteem and self-actualization needs” Respondent B

added that “Yes, pero hindi lang ito ang dahilan. Nagtuturo ako kasi mahal ko ito.” (Yes

it satisfy my need, but it is not the only reason why I teach. I teach because I love to). On

the other hand, Respondent B disagreed, “No, kasi nagaaral ako sa Manila kapag

weekends kaya yung pamasahe ko pabalik balik ay talagang kulang.” (Remuneration do

not satisfy my needs, because I am studying Manila every weekends and my salary is not

enough to cater my round trip fair every week).

 Furthermore remuneration plays a vital role in the well-being of the employees

particularly in making them more satisfied and productive in their work

Effects of Remuneration as to Work Performance

a.) Permanent

All of the five respondents agreed that remuneration contribute to positive work

performance. As respondent C said, “Remuneration provide for your needs, in return you

will do your best in doing your work to maintain that salary.” “Let’s admit… whether the

salary is high or low, you still report to school anyway in order to provide for your living”

Respondent A said.

Contradicting enough, all of them also agreed that remuneration have negative

effect to their work performance. Respondent stated that remuneration have a negative

effect to his/her work performance when they are made to work even during weekends

when it should have been spent with their family, but still their salary would not increase.

As respondent D stated, “If you think your salary is not enough ‘yun nga as a

government employee you should not live beyond your means.”

Finally, four out of five respondents believed that when remuneration is bigger or

higher, they perform their work well. As respondent D said “…bigger remuneration,

bigger responsibility so in the government service, the higher your pay the higher your

tax, the higher demand for you to work more, to perform better”. In the caws of

Respondents E who disagreed, “Not all the time, it depends on how you enjoy doing your

work and it depends on the managerial culture you are in. I ensure it’s not all about the
remuneration. Other things should also be considered when it comes to work

performance”.

b.) Contractual

In comes with positive work performance, they all agreed that it can be a

contributing factor. Respondent C stated that “It helps me to have a good performance

because I am sure that efforts exerted will be given due return.” Respondent A and E

supported the claim by saying that “Work performance is better with motivation” and by

saying motivation the respondents mean monetary motivation. However, Respondent B

insisted, “yes, pero (but) it is not all.” Respondent C furthered that “If I am satisfied with

what I receive, that is a manisfestation that remuneration has a positive effect to my work

performance.”

In terms of negative contribution of remuneration to the respondents, most the

respondents disagreed except for one. Respondent B insisted, “No, nakakahiyang

pumasok nang walang gana.” (It is shameful to report to school without the will to do

so). Respondent C also stated that “Remuneration does not have negative effect to work

performance because remuneration is one of the motivators.” Motivators are meant to be

positive. However, Respondent D emphasized that “there is negative effect of it

especially when it is too little… or there is no remuneration at all, we cannot live”.

Furthermore, most of them also believed that higher remuneration comes with a

better performance. Nevertheless, Respondent C argued that “Remuneration does not

affect my work performance. What affects the latter is my passion to do it”.

Demographical Background of the Respondents

Gender Frequency Percentage

Male 5 50%
Female 5 50%
Total: 10 100%

The table indicates that our respondents consist of 5 Female and 5 Male with the

total of 10 and with the same percentage which is 50% with the total of 100%.

Job Status Frequency Percentage

Permanent 5 50%
Contractual 5 50%
Total: 10 100%

The table indicates that our respondents job status consist of 5 Permanent and

5Contractual with the total of 10 and with the same percentage which is 50% with the

total of 100%.

Permanent

DESCRIPTION SCALE FREQUENCY PERCENTAGE

1. My salaries are given on time. SA 3 60%
A 2 40%
N 0 0%
D 0 0%
 SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

2. My salaries can provide my basic SA 3 60%
needs. A 1 20%
N 1 20%
D 0 0%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

3. My salaries can guarantee me a SA 3 60%
brighter future. A 0 0%
N 1 20%
D 1 20%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

4. Because of my salary, I can enjoy life SA 3 60%
to its fullest. A 0 0%
N 1 20%
D 0 0%
SD 1 20%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

5. My salary would never let me go SA 3 60%
broke. A 0 0%
N 1 20%
D 1 20%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

6. I have extra money in me when SA 3 60%
‘petsa de peligro’ comes. A 0 0%
N 1 20%
D 1 20%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

7. I have spare money which goes in SA 3 60%
my savings. A 0 0%
N 1 20%
D 1 20%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

8. I can spend without worrying too SA 3 60%
much. A 0 0%
N 1 20%
D 1 20%
SD 0 0%
TOTAL: 5 100%
 DESCRIPTION SCALE FREQUENCY PERCENTAGE
9. I feel happy and contented when I SA 3 60%
receive my salary. A 1 20%
N 1 20%
D 0 0%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

10. I am doing my best, and yet my SA 3 60%
salary do not satisfy me. A 1 20%
N 1 20%
D 0 0%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

11. Even if I am receiving my salary on SA 1 20%
time, I am always worrying that it will A 1 20%
not last long enough due to my
expenses. N 3 60%
D 0 0%
SD 0 0%
TOTAL: 5 100%
 DESCRIPTION SCALE FREQUENCY PERCENTAGE
12. My work performance is directly SA 3 60%
affected by my salary. A 1 20%
N 1 20%
D 0 0%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

13. I do not feel the will to teach SA 1 20%
because of my salary. A 0 0%
N 1 20%
D 3 60%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

14. I feel quitting when my salary do SA 0 0%
not satisfy me. A 1 20%
N 3 60%
D 1 20%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

15. I love my job and I am contented SA 3 60%
with my salary. A 1 20%
N 1 20%
D 0 0%
 SD 0 0%
TOTAL: 5 100%

Permanent

DESCRIPTION SCALE FREQUENCY PERCENTAGE

1. My salaries are given on time. SA 1 20%
A 1 20%
N 1 20%
D 0 0%
SD 2 40%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

2. My salaries can provide my basic SA 1 20%
needs. A 4 80%
N 0 0%
D 0 0%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

3. My salaries can guarantee me a SA 1 20%
brighter future. A 1 20%
N 0 0%
D 0 0%
 SD 3 60%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

4. Because of my salaries, I can enjoy SA 1 20%
life to its fullest. A 1 20%
N 0 0%
D 0 0%
SD 3 60%
TOTAL: 5 100%
 DESCRIPTION SCALE FREQUENCY PERCENTAGE
5. My salaries would never let me go SA 1 20%
broke. A 0 0%
N 1 20%
D 0 0%
SD 3 60%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

6. I have extra money left in me when SA 1 20%
‘petsa de peligro’ comes. A 0 0%
N 1 20%
D 0 0%
SD 3 60%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

7. I have spare money which goes in SA 1 20%
my savings. A 0 0%
N 1 20%
D 0 0%
SD 3 60%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

8. I can spend without worrying too SA 1 20%
much. A 0 0%
N 1 20%
 D 0 0%
SD 3 60%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

9. I feel happy and contented when I SA 1 20%
receive my salary. A 0 0%
N 1 20%
D 3 60%
SD 0 0%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

10. I am doing my best and yet my SA 0 0%
salary don’t satisfy me. A 0 0%
N 0 0%
D 1 20%
SD 4 80%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

11. Even if I am receiving my salary on SA 0 0%
time, I am always worrying that it will A 1 20%
not last long enough due to my
expenses. N 0 0%
D 0 0%
SD 4 80%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

12. My work performance is directly SA 0 0%
affected by my salary. A 0 0%
N 3 60%
D 1 20%
SD 1 20%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

13. I don’t feel the will to teach because SA 0 0%
of my salary. A 0 0%
N 4 80%
D 0 0%
SD 1 20%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

14. I feel quitting when my salaries do SA 0 0%
not satisfy me. A 0 0%
N 4 80%
D 0 0%
SD 1 20%
TOTAL: 5 100%

DESCRIPTION SCALE FREQUENCY PERCENTAGE

15. I love my job and I am contented SA 1 20%
with my salary. A 0 0%
N 4 80%
D 0 0%
SD 0 0%
TOTAL: 5 100%

CHAPTER V

Summary, Conclusion, and Recommendation

Summary

Conclusion

Recommendation

Bibliography

APPENDICES

Letters to the respondents

Interview Guide Questions

Test Questionnaires

Curriculum Vitae