Beyond Appreciation and Sanctions: Reward, Punishment, and Employee Performance in Banking

Abstract

Reward is a form of appreciation provided by a company to recognize employees' work achievements, while punishment refers to sanctions imposed on employees who violate company regulations. These two variables are considered to play a significant role in improving employee performance, thereby enabling organizations to achieve their objectives more effectively. This study aims to analyze the effect of reward and punishment on employee performance at PT Bank UOB Indonesia, Imperium Office, South Jakarta. This study employed a quantitative approach with a causal research design. The research population consisted of all 85 employees of PT Bank UOB Indonesia, Imperium Office, South Jakarta. A saturated sampling technique was applied, in which all members of the population were selected as research respondents. Data were collected through a questionnaire using a five-point Likert scale. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM), including the evaluation of the measurement model (outer model), structural model (inner model), and hypothesis testing. The findings indicate that reward has a positive and significant effect on employee performance. The more effective the company's reward system, the higher the level of employee performance. In addition, punishment also has a positive and significant effect on employee performance. The implementation of fair, consistent, and proportionate sanctions enhances employee discipline, which ultimately leads to improved employee performance. The findings imply that companies should implement a balanced reward and punishment system as a strategy to improve employee productivity and support the achievement of organizational goals.