STEPHEN S.

CRUZ COAT4E Accounting Thesis and Synthesis August 22, 2016

Evaluation of Performance-Linked Remuneration of Small and Medium-sized Enterprises

(SMEs) in Bacolod City

Background of the Study

To remain competitive in the industry, Performance-linked Remuneration Systems are

now increasingly being implemented by Small and Medium Enterprises (SMEs). One way to

make sure that an SME maintains its competitiveness is to ensure that compensation increase in

reinforced by enhanced performance. Various improvements in the system have occurred,

studies say. In fact, some firms recorded growth in company profits two-fold within two to

three years and that productivity improvements were more than double over a three year period.

Implementation of the performance-linked remuneration systems also affected areas such

as sales expansion, costs reduction through innovative ways, increased motivation, improved

staff morale through sense of commitment and dedication. Pay for performance became an

acceptable normal practice. In addition, multi-tasking to reduce unwarranted recruitment of staff

was initiated.

The positive impact of implementing performance-based remuneration systems revealed

the shared cooperation employers and employees. Through this system feelings of ownership and

responsibility were acquired and rewards were real and reflective of performance. Thus each

individual found ways to support and contribute to improvement, ultimately leading to better

quality for all. (www.apec.org)

This study aims to determine the most efficient practice in terms of Performance-linked

Remuneration systems by evaluating various Small and Medium Enterprises (SMEs) in Bacolod

City.
STEPHEN S. CRUZ COAT4E Accounting Thesis and Synthesis August 22, 2016

Objectives

The main purpose of this study is to determine the most efficient practice in terms of

performance-linked compensation by evaluating small and medium-sized enterprises (SMEs) in

Bacolod City. To help achieve this objective, the specific objectives are the following:

a. To examine theoretical basis of performance-linked compensation system

b. To discuss the main methods of employee payments to their performance or the types of

performance pays

c. To determine advantages and disadvantages of performance-linked compensation system

d. To determine circumstances influencing success or failure of the performance-linked

compensation system

e. To determine the most efficient practice among businesses

f. To discuss the rationale for the most efficient practice

Scope and Limitation

This study aims to determine the most efficient practice among businesses in Bacolod

City in terms of performance-linked remuneration paid to employees. Interviews will be

conducted and surveys through questionnaire will be given to small and medium-sized

enterprises (SMEs) in Bacolod City achieve the objectives of this study. Constraints such as time

and information availability may inhibit the extensive evaluation of SMEs.

STEPHEN S. CRUZ COAT4E Accounting Thesis and Synthesis August 22, 2016

Significance of the Study

The Researcher. This study will enable the researcher to understand the realities of the

workplace. Determining practices through evaluation methods will permit the researcher on

widening his knowledge and skills in analyzing various kinds of information.

Employees. This study will increase awareness of the employees of the technicalities of the

remuneration they receive. This would also enhance employee motivation and dedication to

work if advantages outweigh its disadvantages.

Other Small and Medium Enterprises. Other enterprises may apply the most efficient practice

in facilitating remuneration to its employees so that it is not only the company who will benefit

but also the employees being considered one of the most important resources a business has.

The Public. This study will increase awareness to the public on the types of schemes and pays

are given to enterprises’ employees.

Future Researchers. This study will serve as a foundation for future researchers on generating

innovative topics for prospective studies.