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Subsequent the increased globalization and market integration large organizations have been able to penetrate the Philippines market. Due to their large size and economies of scale, these corporations have a higher competitive advantage as compared to the low Pilipino-owned small and medium size businesses. As such, the current market wave has forced the SMEs to redraft their production and investment policies to ensure their survival in future. Among the major adjustments include the workers recruitment and remuneration policies that seek to develop a pool of skilled and well-motivated workers to ensure sufficient and effectual development as a necessity for a workable marketing mix. The study, Performance management and compensation as drivers of Organization competitiveness, sought to examine how the current market entry has affected the remuneration for the employees and wage compensation in the SMEs across the Philippines. The research, through descriptive survey and Likert scale data analysis, identified that most of the SMEs have adjusted their human resource structures to meet the necessary human resource functions. The research concluded that Most SMEs in Filipino apply extensive performance management and compensation techniques to increase their market competitiveness.
The initial literature review for the article sought to examine the relationship between the underlying concepts to be analyzed in the study. The central term examined is ‘competitiveness’, which is the central concern of the SMEs in the Philippines. The author examined the research by Noe, Hollenbeck, Gerhart and Wright (2010), which gave the contextual definition of competitiveness and how the entry of international organizations in the Philippines has affected the initial competition structures in the market. According to the study, competitiveness is the internal ability of an organization to acquire and retain a substantial market in the external industry. The core aspects of market competitiveness are the inherent advantage and the prevailing external environments. Inherent competitive advantage denotes the ability of an organization to maintain the markets due to their initial advantages such as size, capital, brand success, and location. In most cases, the inherent advantage is close factors of the external environments, which can be either economies or diseconomies depending on the market structure. On the other hand, external environment, in reflection to competitiveness is the environmental factors, which eventually affect the efficiency of an organization in manufacturing and promoting their brands. Schermerhorn (2010) defines competitive advantage as a combination of...