The effect of incentive principles based on the mato system toward firm performance through employee work productivity

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Abstract

This study aims to examine the role of employee work productivity as a mediating variable in the relationship of the incentive principles based on the mato system toward firm performance. The principle based on the mato system is a principle in remuneration policy applied by a company to employees based on the concept of profit sharing. Data was collected by means of a survey method through a questionnaire filled out by 77 respondents and analysed using the partial least squares (PLS) approach. The result of the study indicates that there is a positive effect of the incentive principles based on the mato system toward firm performance and the finding shows that employee work productivity has a positive role to mediate the effect of incentive principles based on the mato system toward firm performance. Incentive principles based on the mato system are a new variable in the realm of management accounting. The variable reflects unique business management in a restaurant firm and is evidently able to improve employee work productivity to create value added for the restaurant firm.

Keywords: Incentive Principles, Mato System, Employee Work Productivity, Firm Performance, Value Added, Profit Sharing

Authors’ individual contribution: Conceptualization — H.; Methodology — H., S.S., M.B.W.I., D.S., and K.P.; Validation — H., S.S., M.B.W.I., D.S., and K.P.; Formal Analysis — H., S.S., M.B.W.I., D.S., and K.P.; Investigation — H., S.S., M.B.W.I., and D.S.; Data Curation — H., S.S., M.B.W.I., D.S., and K.P.; Writing — Original Draft — H., S.S., M.B.W.I., and D.S.; Writing — Review & Editing — H., S.S., M.B.W.I., D.S., and K.P.; Supervision — H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, M12, M14, M540

Received: 15.03.2022
Accepted: 23.09.2022
Published online: 27.09.2022

How to cite this paper: Hanif, Suhartono, S., Iryanto, M. B. W., Siagian, D., & Pirzada, K. (2022). The effect of incentive principles based on the mato system toward firm performance through employee work productivity. Journal of Governance & Regulation, 11(4), 112–122. https://doi.org/10.22495/jgrv11i4art11