Rewards, Performance Appraisal, and Innovative Work Behaviour: A Multi-Mediation Model

Abstract

This study examines the relationship between performance-based rewards and developmental performance appraisals on innovative work behaviour (IWB) through the mediation of organizational trust, supervisor support, perceived organizational support, and affective commitment. Through the lenses of signalling theory and social exchange theory, we hypothesize that employees perceive that rewards and developmental performance appraisals as favourable signals sent by their organization in support of, and appreciation to, them. Hence, employees respond with greater (i) moral obligation to repay organizations and supervisors for their support; (ii) emotional motivation to commit affectively to the organization; and (iii) intention to trust their organization. Using structural equation modelling to analyse 323 survey responses from employees across various industries in Jordan, results indicated a significant positive relationship between performance-based rewards and IWB and developmental performance appraisal and IWB. Interestingly, this relationship is explained only through the mediation of affective commitment. This paper contributes to the wider conversation around the relationship between performance-based rewards, developmental performance appraisal and IWB through the mediating effect of a bundle of factors. Moreover, the findings showed that performance-based rewards and developmental performance appraisal are significant for organizational trust, supervisor support, perceived organizational support, and affective commitment.