Assessing the impact of wage policy on employee motivation at Vietnamese railway transport enterprises

Abstract

There have been many studies worldwide on wage policies, but none have examined their impact on employee motivation at railway transport enterprises in Vietnam. Currently, Vietnam has seven main railway lines, including the national railway line and branch lines, connecting 23 of 34 provinces, and the high-speed railway industry is receiving significant attention from the Government. Currently, there are more than 22,000 workers, of whom about 10,000 have university and post-graduate degrees. Overall, the railway industry needs more human resources to operate new projects, possibly reaching about 26,000-32,000 workers. Therefore, attracting human resources to work for railway transport enterprises requires appropriate policies, in which wage policy is a factor that affects both enterprises and employees. This study investigates the impact of salary and welfare policies on the intrinsic work motivation of employees at Vietnamese railway enterprises (VNR- Vietnam Railways). It proposes improvements to the performance appraisal system (KPI) at railway transport enterprises, specifically using partial least squares structural equation modeling (PLS-SEM) through R programming with bootstrapping (1,000 resamples). The study evaluates the direct effects and tests the correlation models between key motivation factors. The results show that, among the various work motivation factors, there is a lack of satisfactory compensation policies; employee autonomy and working environment are not given sufficient attention; a rigid administrative salary coefficient is in place; limited performance-based differentiation exists; and the current salary system cannot fully reward productivity, efficiency, and individual overall contributions. The paper concludes by proposing a comprehensive KPI-based evaluation framework to enhance fairness, transparency, and motivational effectiveness in salary and benefit policies.