Mediating effect of work performance and organizational commitment in the relationship between reward system and employees’ work satisfaction

Abstract

Purpose

The purpose of this paper is to investigate the mediation effect of work performance and organizational commitment in the relationship between reward system and employees’ work satisfaction.

Design/methodology/approach

The study population constituted all employees/permanent employees (civil servants and non-civil servants) at Bank of BNI, Bank of BRI, Bank of Mandiri, and Bank of South Sulawesi. The analytical method used to test the hypothesis of the research was structural equation modeling.

Findings

Based on the analysis results, it can be concluded that the extrinsic reward system and the intrinsic reward system have a direct, significant effect on work performance and organizational commitment, and work performance and also organizational commitment have a direct, significant effect on work satisfaction. On the other hand, the extrinsic reward system and the intrinsic reward system have no direct effect on work performance, but work performance and organizational commitment as mediation variables bridge the relationship between the extrinsic reward system and the intrinsic reward system to work satisfaction.

Originality/value

Mediation effect (using the Sobel test) of work performance, and organizational commitment in the relationship between Reward Systems on work satisfaction, location of the study (no previous research for this relationship): Bank of South Sulawesi, Indonesia.

Citation

Taba, M.I. (2018), "Mediating effect of work performance and organizational commitment in the relationship between reward system and employees’ work satisfaction", Journal of Management Development, Vol. 37 No. 1, pp. 65-75. https://doi.org/10.1108/JMD-11-2016-0256