Impact of Wages on Employee Productivity among Adventist Medical Center College Faculty

Members

Chapter 1

Background of the Study

1.1 Introduction

A worker’s wage is the monetary compensation an employer pays for the work he or she

has done. The employer works out the pay rate on an hourly, daily, weekly or monthly basis.

Sometimes, we use a piece rate system to determine wages, i.e. the person’s pay depends on how

much they produce (Market Business News, N.D). Wages differ between countries because

according to Konstantin Gizdarski (2017), different countries have different levels of labor

productivity. Higher productivity pushes real wages in the economy higher. That translates to

increased real wages for almost every type of worker. This states that the more persevering and

dedicated the worker is to its work, the higher the price of the worker’s hardship will receive. One

of the purposes of someone being the employee or a labor of a company is to earn an income in

the form of wages or compensation. Wages are earned can fulfill basic necessities such as food,

clothing and housing. Every company in setting the amount of the wage paid to an employee must

be viable, so that the lowest wage given to meet the needs of their life (Kanzunnudin, 2007). Those

who look for a job not just settle to the kind of job or a work that suits its degree but also

contemplate the pay rate or wage to determine if its worthy to exert time and effort and to weigh

if it can provide you enough salary for you and your family’s needs and desire. Hence, owners or

those who supply the salary will also observe employee’s performance to vary its deserved salary.
 Lignugaris (2018) claimed that labor productivity is much higher when labor is

supplemented by capital. Wages for workers will be much higher in these cases, assuming of

course that labor actually demands higher wages. If labor is satisfied with existing wages, the

added profit from higher labor productivity will simply be absorbed by the firm (Quora, 2018).

This explains that the given wage is based on how heavy the work is but workers will also be

motivated to work hard when they are given sufficient income, in that way it will give impact to

their productivity that can link your company’s success. Here are some reasons why you should

pay your employees high so will boost your business output and actually decrease your costs: It

creates high level of output, employees won’t want to leave, employees can focus more attention

on the work, you will be fairly rewarding people and you’ll need fewer employees to accomplish

necessary tasks. Increasing employee salaries can feel painful at first. It may mean less profit for

the business in the short term. Over time, though, it may not only improve company culture and

happiness, but it can save money (Boitnott, 2018).

There is also a disadvantage on having or raising the minimum wage, according to

Halvorson (2014), if business must pay their minimum wage employees more, they cannot afford

to hire as many employees. Unemployment rate will increase in some cases when minimum wage

will increase. By increasing the cost of labor without an increase in productivity, market forces will

cause a business to look for alternatives either through reduction in work force or by relocating jobs

(offshoring). While those who are still employed will see an increase in pay, those lost their job will

have no income and the government will lose the taxes associated with those jobs. Businesses will

not just reduce the number of employees they will also seek to maximize their profit by reducing

benefits (cited from Bartleby writing).

1.2 Conceptual Framework

Input
°Determine the advantages
regarding the wage
To know their limits according to
the salary they get.

Process
°Survey

°Data Analysis

°Internet Research

Output
°Would develop the faculty to be
motivated

Figure 1. Schematic Diagram

It showed the development and effects about how would the salary affects the work of the

faculties of Adventist Medical Center College.

1.3 Statement of the Problem

This research attempts to determine the impact of wages on employee productivity among

AMCC faculty members. It seeks to provide evidence and find answers to the following question:

1. The faculty members in Adventist Medical Center College perform their work depending

on the wage they are receiving.

2. Faculty members are not productive in their work.

3. Faculty members are productive even though they are not given higher minimum wage.

1.4 Objectives of the study

Given the above consideration, the study will be conducted to identify the:

1. To assess the impact of wages and salaries of the faculty as a tool for motivating, training,

promoting and development of faculty and staff.

2. To determine the efficiency of the faculty’s wage and salary; and

3. To determine the efficacy of wages and salaries faculties.

1.5 Hypothesis of the study

Ho: The increase in wages do not contribute in the increased of labor productivity among

AMCC faculty

Ha: The increase in wages could lead to the increased of labor productivity among AMCC

faculty.
1.6 Significance of the study

If this study would be successful, it would be able to help the people to know if how

employees do their job depends on their salary.

To the employees, the wages should be given on time so that they would focus on their

job and do it accordingly, inspiring them also helps them maintain their doings and become even

more hardworking.

To the parents, there are some advantages you can get from the childrens who are working

hard, and you will become proud of them.

To the students, If the faculties would do their job well, we also have benifits because

they teach us well and can learn more according to their strategy.

1.7 Scope and Limitation

The scope of the study will cover all the faculties of Adventist Medical Center College, the

study shall be limited to the issues in objectives of the study then to examine the wages and salaries

being paid to employees in their institution or establishment and the limitation will might subject

to those respondents that will not be honest on answering the questions posed to them and this will

limit the research by getting appropriate data from the area.

1.8 Definition of Terms

Wage is a monetary compensation paid by an employer to an employee in exchange for work

done. Payment may be calculated as a fixed amount for each task completed, or at an hourly or

daily rate, or based on an easily measured quantity of work done.

Employee is an individual who works part-time or full-time under a contract of employment,

whether oral or written, express or implied, and has recognized rights and duties. Also called

worker.

Employee Productivity is sometimes referred to as workforce productivity or an assessment of

the efficiency of a worker or group of workers.

Productivity describes various measures of the efficiency of production.

Faculty are the academic staff of a university or school: professors of various ranks, lecturers,

and/or researchers.
 CHAPTER 2

REVIEW OF RELATED LITERATURE

This chapter presents the related literature and studies to further have better comprehension

about the study and the researchers also to help understand regarding the impact of wages on

employee productivity.

Wages

In the economy, wage flexibility is the main topic and are mostly found in the literature

related to the provision of incentives provided by the company. Some theories developed an

explanation of how companies should use compensation as an encouragement for employees to

work for the benefit of the company. The conclusion is put some effort into their work to maximize

corporate profits (Prendergast, 1999). To have an effective and outstanding performance of

workers, wages become the basis and serve as an important aspect of this (Umar, 2012). Granting

wages renumeration is the most complicated responsibility for the industry, but also the most

important aspect for workers, because the size of the value of their work rely on the amount of

wages given. Wages are very important for the industry because it reflects the industry’s efforts to

defend human resources in order to have a high loyalty and commitment to the industry. Effective

wages strategy is expected to achieve work objectives and even in maintaining the growth and

essence of work force (Umar, 2012). Increasing minimum wage could help employees be more

effective and persevered at work for it will bring benefit to each of them. It will help in many

aspects of employee’s life specially in supplying the needs and wants of their family. It will also

serve as an encouragement for workers. Hence, in increasing wages it would mostly affect

industries because they might be forced to lay off workers, decreasing jobs, or increase their
product’s prices. On the other side, proponents for a higher minimum wage advance that the

increased wages will give consumers more buying power and put more money in the economy,

compensating for the loss of profits from increased labor costs.

Fringe Benefits

The characteristics of fringe benefits include; promotion, advancement and job stability,

leadership allowance, responsibility allowance and recognition allowance. In institutions,

university administrators and managers usually use fringe benefits for employees to strive hard

towards achieving set of goals and means of improving work performance (Dessler, 2003).

Offering incentives in some point have pros and cons. Among the pros are the motivation of

individuals to perform better and teamwork for groups that will get a team reward. It might not

seem like there are any negatives to using money as an incentive, but there are. It can create

animosity and frustration with those who don't qualify for the reward. This is especially true if

rewards are "top performer" rewards but can also lead to poor morale with someone who tries hard

but just never gets to that level. Giving incentives to employees might be a reason for them to do

their best. Some employees don't need an extra push to be outstanding. Others may have the talent

but no drive to use it. If they know applying themselves generates serious rewards, underachievers

can turn into star performers. Incentives can persuade and motivate workers to give their best shot

and get inspired because they feel that their work are being appreciated and recognized. In work it

is important to give encouragement. But it cannot be denied also that it can lead to demoralizing

for people. Employees who do their best and still don’t qualify for incentives may become resentful

of the star performers. When they see that they can’t compete, they may give up and lose hope that

can bring them to losing interest in their jobs. Worst is it is also possible that it can create chaos or

loathing of co-workers and may lose unity.

Performance

Performance refers to the action or result of an activity (Boddy, 2008). In an organization

nor business, performance of an individual should be effective and efficient that it accomplishes

business’ objectives and goals regarding of work performance to maintain stability and success

not just for the business but also to attain stakeholders needs (Nkata, 2004). Grassing (2002) adds

that performance is effective if it provides or produce what the market requires at a particular time.

Financial incentives improve the performance and its effectiveness. This supports the view that

providing fringe benefits can attract employees to perform better and be motivated in doing their

jobs (Perry et al, 2006). Those employees who are not satisfied with their jobs are most likely to

had many absenteeism and doesn’t exert more effort on their work.
 CHAPTER 3

RESEARCH METHODOLOGY

3.1 Research Design

The researchers utilize a qualitative research which is a cross-sectional study. This type of

study uses different kinds of people who differ in the variable of interest but who share other

characteristics such as socioeconomic status, educational background, and ethnicity. It is also for the

readers to comprehend more knowledge and to be able to analyze the topic.

To further understand the study, the researchers will make a survey regarding the impact of

wages on employee productivity to the faculty member of Adventist Medical Center College.

3.2 Population and Sampling Techniques

This study shall capture data from Adventist Medical Center College academic staffs

inclusive of Deans of faculties.

The researchers will use the random sampling procedure to select the respondents of the data,

this is intended to get reliable data from our respondents.

3.3 Inclusion and Exclusion Criteria

3.4 Instrumentation
 Will be using a survey paper to the faculty of AMCC to know how will they work. Creating

at least 12-15 papers for the respondents that could be answered with (1) Strongly Agree, (2)

Agree, (3) Disagree. And there will be some questions that can be answered by statements that

depends with their opinion.

The survey questionnaires will be answered by the AMCC faculties to determine their

working skills and what they likely do during their work time.

3.5 Methods

The study will attach to qualitative type of research concerning to the Adventist Medical Center

College faculty members.

3.6 Data collection and Statistical Treatment

3.7 Ethical Consideration

This research was conducted after the teacher in Adventist Medical Center College validated

the researchers to pursue this study. The participants were informed about confidentiality. The data

that are gathered were treated trustworthy.

While conducting the interview it was explained comprehensively in every content that must

be clarified. Before conducting the study, the researchers received official consent from the school

administrators.

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