Human Resources Management Strategies of Taiwan-based Enterprises in Vietnam

2.3.3. Incentive and Compensation systems 
Bringing motivation to the workforce is one of the most important roles of 
HRM. One of typical ways to increase the motivation to employees of organization is 
through the incentive and compensation systems to encourage the employees contribute 
the positive performance and outcome. Compensation is understood as the outcome or 
reward that the employees receive in return of their performance. In which includes 
payments such as bonuses, overtime pay, sales commission, job promotion, etc. It is an 
important part of HRM, which helps in motivating the employees and improving 

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organizational effectiveness. Many scholars pointed out the importance as well as the 
influence of compensation system on the quality and effectiveness of employees which 
the organization should not neglect in HRM process (Gupta, & Shaw, 2014). 
Compensation is significant impact to the quality of people who apply the job, someone 
are hired, and the level of motivating and performance of the employees (Dineen, & 
Williamson, 2012). It has powerful incentive and improving the 
employees’
performance (Gerhart, & Rynes, 2003). Furthermore, compensation is one of the 
crucial factors to attract and keep talented employees as well. 
According to (Dong Duong, 2014) mentioned that in recent years, many large 
companies have set high growth targets that have been focused on improving their 
overall competitiveness in which priority attract talents through salary and welfare 
policies. It also indicated that some companies in Asia as well as in the world are 
redesigning the salary and welfare systems to fit the current situation in order to meet 
the expectations of labor, especially the expectations of talents, and helping business 
achieve long-term development goals as well. Therefore, foreign companies in ASEAN 
region need to pay more attention to compensation policies, includes salary, welfare, 
benefits, career development opportunities, flexible time in working system, so on. In 
addition, it is necessary to build other incentive policies such as rewarding outstanding 
employees, providing health insurance programs, creating the healthy company culture, 
etc., to help employees motivate and interested in work.

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Financial and non-financial benefits are no longer a priority concern for workers. 
They tend to work in organizations that willing to provide them with welfare packages 
that meet their individual demands more comprehensively, and always appreciate their 
performance (Dong Duong, 2014). A reality phenomenon does not only exist in 
enterprises in Asia countries, but also in most of countries in the world. Indeed, the 
incentive and compensation systems are indispensable in HRM strategies, it could be a 
key point in HR practices in which attract, motivate and retain talents as well as the 
local labor.

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