THE ROLE OF INTRINSIC AND EXTRINSIC MOTIVATION IN MEDIATING THE EFFECT OF FINANCIAL COMPENSATION ON EMPLOYEE PERFORMANCE (A STUDY AT THE TERNATE CITY EDUCATION OFFICE)
DOI:
https://doi.org/10.33387/jsm.v1i1.12738Keywords:
Financial Compensation, Intrinsic Motivation, Extrinsic Motivation, Employee PerformanceAbstract
This study aims to examine and analyze the role of intrinsic and extrinsic motivation in mediating the effect of financial compensation on employee performance at the Education Office of Ternate City. This research adopts a quantitative approach. The population and sample consisted of all 74 civil servants (PNS) and government employees with employment agreements (PPPK) working within the internal office of the Education Office of Ternate City, excluding school teachers. A saturation sampling (census) technique was applied. Data processing and structural model analysis were executed using Structural Equation Modeling based on Partial Least Squares (SEM-PLS) via SmartPLS 4. The empirical results reveal that financial compensation does not have a direct significant effect on employee performance, indicating a full mediation mechanism. Conversely, financial compensation significantly enhances both intrinsic and extrinsic motivation. Furthermore, both intrinsic and extrinsic motivation exert a positive and significant effect on employee performance, with intrinsic motivation acting as the most dominant driver. Consequently, both intrinsic and extrinsic motivation fully mediate the relationship between financial compensation and employee performance, proving that psychological internalizations are essential to translate financial incentives into operational output.
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Copyright (c) 2026 Marindra Rahmadyta Assagaf, Fadhliah M. Alhadar, Muhammad Asril Arilaha
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