The effectiveness of financial reward on improving the job performance of public sector employees through organisational commitment: the case of Maldives civil service employees

Abstract

PurposeThough public sector organisations have continuously borrowed human resource management practices from the private sector, there seems to be sparse evidence on the effectiveness of financial rewards for public sector employees, especially in developing countries where pay remains low. Therefore, the objective of this research is to test the effectiveness of financial rewards on the job performance of those working in the Maldives civil service from the perspective of a developing country where public sector pay, especially civil pay, remains comparatively low. Additionally, this study tested the mediating effect of organisational commitment on the relationship between financial rewards and job performance.Design/methodology/approachA cross-sectional study was conducted using quantitative design methodology, whereby data were collected from 341 employees working in the Maldives civil service and analysed using structural equation modelling.FindingsThe findings indicate that financial rewards negatively affect civil service employees’ job performance. However, financial rewards improve organisational commitment, which reduces the negative effects, although the effect sizes of the mediator are not very significant.Originality/valueThe results of this study present critical theoretical and practical contributions to public administration researchers on using financial incentives as a mechanism to boost job performance, particularly in developing countries, where salaries and other benefits remain low. Furthermore, it presents practical recommendations for managing employees in the Maldives and other countries, where the public sector is less developed and budget constraints remain a challenge.