Incentives effects on job performance and mediation of motivation in tourism industry of Saudi Arabia

Abstract

The main objective of this study is to examine the direct influence of incentives and their indirect effects through the mediation of motivation and job satisfaction on job performance, as well as to examine the moderating effect of cultural competence. The study was developed based on Herzberg‟s Two-factor theory, which deals with the dual needs of employees; it argues that employee performance increases when the dual needs are fulfilled. The study therefore conceptualised that incentives (monetary and non-monetary) would fulfill the dual needs of employees in the tourism industry in Saudi Arabia, especially at a time when the country is struggling for economic diversification as a means of reducing dependence on oil. The designed incentives system may influence employees‟ motivation and job satisfaction thereby affecting job performance. Thus, it was hypothesised that incentives contribute directly to job performance and indirectly via mediation of employee motivation and job satisfaction. It was further hypothesised that cultural competence moderates the relationship between motivation, job satisfaction and job performance. The study employed a quantitative questionnaire approach and drew a sample of respondents 430 from hotels in the Makkah and Madinah regions and from the Saudi Commission for Tourism and Antiquities (SCTA) using a proportional stratified random sampling technique. The data were analysed using the Structural Equation Modelling Maximum Likelihood Estimation (MLE) technique. The study found significant parameter estimates in the relationship between monetary incentives and motivation as well as job satisfaction and also between non-monetary incentives and motivation as well as job satisfaction. However, mediation effects show that job satisfaction mediates the relationship between both monetary and non-monetary incentives and job performance. Similarly, moderating effects of cultural competence were also found in the relationship between motivation, job satisfaction and job performance. The study demonstrates that job satisfaction and cultural competence are good indicators of job performance and should be given priority attention for improving job performance of employees in the tourism sector.