Electronic Resource
Article - The Impact of Incentive and Reward Systems on Employee Performance in the Saudi Primary, Secondary, and Tertiary Industrial Sectors: A Mediating Influence of Employee Job Satisfaction Volume 15, Isu 4 Artikel: 3415 (Halaman 1–22)
The three levels of the industrial sector in Saudi Arabia (primary, secondary, and tertiary
sectors) are collectively regarded as a pillar of the economy, with great potential that offers attractive
job prospects. Therefore, the success of Saudi private sector companies and foreign companies
operating in the Kingdom is pivotal. The purpose of this research is to investigate the effect of
incentives and rewards on the performance of employees in the Saudi industrial sectors, and the role
of job satisfaction in this relationship. The research population consisted of employees working with
the industrial sectors in Eastern Region in Saudi Arabia, and the sample comprised 216 full-time
employees. Structural equation modeling (SEM) was used as a statistical method for testing the
hypotheses. The results demonstrated that there is an insignificant direct effect between incentives
and rewards, and employees’ performance. However, evidence shows a significant direct effect
between incentives and rewards, and job satisfaction, as well as a significant direct effect between
the mediating variable, job satisfaction, and performance. Furthermore, when job satisfaction acts
as a mediator, the influence of incentives and rewards on employees’ performance is significant.
The research findings have notable theoretical and practical implications for incentive and rewards
systems. The present study seeks to further our understanding of the incentive and reward effect on
employees’ performance by examining job satisfaction as a mediating variable to the relationship.
Additionally, the study attempts to explain how the relationship between proposed variables works in
Saudi cultural context, which differs than Western contexts where most of the previous studies have
been conducted. Analyzing employee job satisfaction as a mediator facilitates a better understanding
of how and why different forms of incentives and rewards enhance employees’ behavior at work.
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