Rewards Effects Through Entrepreneurial Orientation to the Performance of the Indi 4.0 Manufacturing Industry

Abstract

Purpose: The main intention of this study is to better comprehend the potential of rewards, entrepreneurial orientation (EO), and their impact on the performance of Indonesian manufacturing firms transforming into Industry 4.0.

Design/methodology/approach: This study achieved its objectives by conceptual analysis of the rewards relationship with the performance of an organization, expectancy theory, resource-based view (RBV) theory, and extant literature.

Findings: This study indicates that a comprehensive rewards policy alone is insufficient to improve the performance of the Indonesian manufacturing industry. The fully mediating models hypothesised with the application of expectancy theory and RBV models suggested that the dimensions of EO have significant impacts on improving the performance of the manufacturing firm.

Practical Implications: This study measures the adoption of EO as a mediator in examining the mechanism of rewards management to improve the performance of the manufacturing industry underpinned by the expectancy and RBV theories.

Originality/Value: The originality of this study is to demonstrate that the implementation of rewards management in the Indonesian manufacturing firm can be enhanced using a proper mechanism, to improve better firm’s performance.