Optimizing Employee Performance through Organizational Commitment

Abstract

This study aims to analyze the effect of Reward and Punishment on Employee Performance with Organizational Commitment as an intervening variable at the Representative Office of Bank Indonesia in North Sumatra Province. The research employed a quantitative approach using Structural Equation Modeling (SEM) based on SmartPLS 3.0. The research sample consisted of employees at the Representative Office of Bank Indonesia in North Sumatra Province, with data collected through questionnaires that had been tested for validity and reliability. The results indicate that Organizational Commitment has a positive effect on Employee Performance. In addition, Punishment and Reward have a positive direct effect on both Employee Performance and Organizational Commitment. Indirectly, both Punishment and Reward also positively affect Employee Performance through Organizational Commitment, highlighting the role of Organizational Commitment as a mediator. These findings confirm that fair implementation of rewards and punishments can enhance employee performance both directly and indirectly through increased organizational commitment. The study provides important implications for human resource management at Bank Indonesia, emphasizing the need for appropriate strategies in managing rewards and punishments to improve employee performance while strengthening organizational commitment.