Theoritical Framework

Incentives are defined as concrete incentives or any kind of compensation that is given to an
employee in the form of cash. Incentives can also be defined as the objective criteria where an
individual simply wants to establish quantifiable standards for performance. ((Wei & Yaoping,
2022

A compensation package is when an incentive is used as a strategic tool to compensate an

employee for their performance and retain them by achieving employee satisfaction and
improving their health for achieving the best job performance at the same time. (Wei &
Yaoping, 2022)

The incentive theory of motivation is a behavioral theory that suggests people are motivated by
a drive for incentives and reinforcement. The incentive theory also proposes that people
behave in a way they believe will result in a reward and avoid actions that may entail
punishment (Indeed Editorial Team 2022). Different factors drive each employee to put in hard
work and show their commitment to a firm. Receiving rewards for having a strong work ethic is
one factor that drives many employees. Developing your understanding of the incentive theory
of motivation can help you become a better manager, make your team members feel more
appreciated, and help you focus on your own professional development objectives.

Expectancy theory suggests that individuals are motivated to perform if they know that their
extra performance is recognized and rewarded (Vroom, 1964). As a result, businesses that use
performance-based pay might anticipate improvements. Performance-based compensation can
tie benefits to the quantity of work that employees produce. As a result, morale, involvement,
quality, productivity, and attraction may all increase.

Most businesses aim to employ the most capable workers while also maintaining their loyalty
and productivity. Companies offer a "package" that consists of pay (money), incentives (special
benefits or awards for excellent work), and benefits (priceless options like health insurance and
paid time off) in order to entice and retain the best employees. Employees feel more satisfied
with their work thanks to high salary and incentives, which also motivates them to work harder.
On the other hand, research has also shown that poor pay hinders employees from performing
well and being motivated. Employee motivation to perform successfully is greatly influenced by
remuneration and incentives. This is due to the fact that it might enhance the employee's life
and ensure their future. The worker will perform better in order to receive a bonus or a
promotion as pay and benefits. Additionally, a robust wage and benefit plan will boost an
employee's engagement and retention. Reduced employee turnover will reduce the cost of
hiring new employees for the company. The company will have to spend money on sending the
new hire for training in order to hire them.
Individual and/or group performance is encouraged through salary and incentives, and this
performance is recognized and rewarded.Employees are more inclined to show up for work
when they are paid fairly. Their levels of job satisfaction rise, and their morale stays strong.
Employees with high morale are more likely to be driven to show up for work each day and do
their best work.

Programs that reward employees for their success and productivity involve cash bonuses and
other financial incentives. Non-monetary rewards (such as casual dress days, snack options, and
flexible scheduling) are frequently less expensive to adopt yet still have a significant effect on
employee morale.

Conceptual Framework

The Conceptual Framework of the study is shown in the research paradigm. Formed on the
proposition of surveys, research, and studies. This research proposes ideas of the impacts of
compensation and incentives towards employees job performance in Biñan City. The research
paradigm illustrates all concepts and aspects in detail for easier comprehension of the study.

In this research, the study is all about the Impacts of Compensation and Incentives Towards
Employee's Job Performance. The given independent variable is
INDEPENDENT VARIABLE the Compensation and Incentive. ThisVARIABLE
DEPENDENT variable is to determine
the effects on the job performance of the employee and how
 Compensation  Attitude
does this compensation and incentives motivate them to do their
 Incentives  Behavior
jobs. While the dependent variable is the Job Performance of the
 Productivity
Employees in Biñan City, Laguna which will be based on the
Attitude, Behavior, and Productivity, how they carry out their
company strategy to draw in more customers and ensure that
employees are happy with the work they do is important because the goal of this study is to
identify the Impacts ofCompensation and Incentives Towards Employee's Job Performance of
Grocery Stores Located in Biñan City, Laguna.

Figure 1. Research Paradigm of the Study Independent Variables and Dependent Variables