Moderating of Religiosity on Reward and Engagement: Empirical Study in Indonesia Public Service

Abstract

The study investigates the relationship and influence between religiosity, reward, and engagement in the public administration sector, both directly and causally via moderation. This study involved one hundred and twenty-three respondents in three local government organizations in Malang City, East Java Province, Indonesia, namely, the Malang City General Hospital, the Population and Civil Registry Office, and the Investment Office. The sampling method uses stratified random sampling from the total population of civil servants in Malang in the three institutions. The data analysis model of this study uses a quantitative approach with a unit of data analysis using the path analysis method. The analytical tools used are smart-PLS and SPSS. The results reveal that the direct combined effect of reward and religiosity has a positive and significant influence on the engagement. However, moderation between reward and commitment, which is bridged by religiosity, does not show positive and significant results. The non-positive relationship shown by testing moderation concludes that there is a separation of purpose between the portion of religiosity in the world of work, where religiosity in this study is only described as part of the concept of worship, and the relationship between the person and his God.

1.Introduction

Referring to Indonesian Law No. 5 of 2014 concerning State Civil Apparatus (ASN) stated that ASN is a profession for civil servants and government employees with employment agreements working for government agencies. Civil servants as state administrators must, of course, submit to and obey the laws and regulations that apply following the bureaucratic theory that was declared by Max Weber in 1905 (Serpa & Ferreira, 2019; Kocka, 2015). Obeying the legal principlesforASN is a necessity that is not negotiable. That is as part ofthe value to integrateASN in itsservice to the nation and state, including increasing performance to provide the best service to Indonesian citizens. Improved performance and the performance of civil servants are based on a better assessment process. Using an independent assessment instrument is expected to enhance the performance of public servants. A reward and punishment system also applies, so that it can improve the quality of work, capacity, capability, and integrity.

It is in contrast to internal organizations in the private sector where flexibility in terms of performance appraisal and payroll exists. In the last few years, the effort to improve the performance and involvement of civil servants has become one of the government’s hard work to maximize, given that the administrative role carried out by the civilservantsis often watched by the public. Expectations regarding taxes from the public to finance state facilities and pay civil servants, on the one hand, cannot be underestimated. Accountability and transparency of civil servant work must have a positive impact on society, such as speed, accuracy, and friendliness as part of the public service sector.

To improve the performance of civil servants means adopting several elements of performance appraisal applied to the private sector, including reward. By definition, bonuses mean rewards for one’s performance or additional financial or non-financial differences between one employee and another. From the perspective of management theory, the reward is a motivational aspect to provide additional enthusiasm for individuals or groups to get more leverage in carrying out their primary tasks in the organization and giving prizes not only to retain employees, but also to motivate employees to work better (Haerani et al., 2020; Khalid & Oaib, 2019; Indahingwati et al., 2019; Susanti et al., 2019). Giving rewards to employees can encourage employees to have more positive behaviors and attitudes at work, which can increase productivity and involvement in the organization (Akob, Arianty, & Putra, 2020; Nguyen et al., 2019; Suong, Thanh, & Dao, 2019; Arfah & Aditya, 2019).

In modern life, the motivation that is intrinsic or extrinsic is only an attempt to maximize one’s job evaluation. Further in-depth personal measurements that include the personality and cleanliness of a person’s heart that is intertwined within the scope ofthe level of one’s own religiosity is a fundamental reason which also determines if the organization can develop in the future. Religiosity is a condition, understanding, and obedience of a person in believing in a religion that is manifested in the practice of values, rules, and obligations to encourage him to behave and act under the teachings of religion in daily life, including at work (Khalid et al., 2020; Nguyen et al., 2019; Ilter, Bayraktaroglu, & Ipek, 2017). Religiosity is also believed to be able to fortify someone to refrain from behaving in a deviant fashion (Mutiara Panggabean, 2002; Sihotang 2007; Hariandja, 2005; Hasibuan, 2007).

Salaries cannot be equated with rewards (Azasu, 2009; Hulkko-Nyman, Sarti, Hakonen, & Sweins, 2012). Payroll is simply the reason why someone wants to work, while the reward is an aspect of why individuals are increasingly eager to work, so that these two different views lead researchers to test the truth.

Objectively, this study aims to examine the components of research results by (e.g., Pangabean, 2002; Sihotang, 2007; Hariandja, 2005; Hasibuan, 2007). By including the salary component, promotions, and incentives in the reward variable, we can then measure the level of validity and reliability of these components in shaping the reward factor through direct and moderating relationships to employee work involvement. Other than that, the novelty in this study is to include religiosity as a moderating variable, which aims to test the causality of whether the level of personal religiosity can bridge the work involved in the public sector with the support of reward.

2. Literature Review and Hypothesis Development

A reward is a form of appreciation given from a supervisor/leader to a subordinate or to an individual or group within an organization that has achieved or exceeded a defined target. (Hulkko-Nyman et al., 2012; Arfah & Putra, 2019; Firman et al, 2020). Generally, rewards can be in the form of financial additions (Risher, 2014) or non-financial (Taufek, Zulkifle, & Sharif, 2016). Pangabean (2002, Sihotang (2007), Hariandja (2005), and Hasibuan (2007) include salary, promotion, and incentive components as part of the reward element. The causality between reward and work-management has been widely studied (Azasu, 2009; Brown, 2014; Chawla, Dokadia, & Rai, 2017). Those authors argue that there is a strong relationship between the role of reward on engagement. Non-financial rewards can be measured, including flexible working-hours (Brown, 2014), annual performance appraisal and a large number of training provided by the organization to its employees (Azasu, 2009; Chawla et al., 2017).

From the perspective of human resource theory, efforts to improve performance are inseparable from the role of rewards, so it can be assumed that rewards fall into the category of extrinsic motivation (Bakar, Lee, & Hazarina Hashim, 2013). In connection with increasing employee engagement, Brown, (2014) confirms that, where the indicator of employee involvement means a significant increase in work, a decrease in the level of discipline, decreased employee intention to leave or move elsewhere, reflect rather the high level of involvement in the feeling of altruism between the employees of the organization, as well as the increasing attitude of consistency among the employee’s employees towards the organization where they work (Brown, 2014). Of course, contextual rewards can have an impact on increasing additional levels of employee welfare and feelings of mutual trust between employees and forms rather than professionalism at work (Brown, 2014).

Employee job satisfaction is a collage that builds a bridge between the role of reward for work involvement (Brown, 2014) so that a statement can be made that engagement antecedents come from feeling satisfied at work. In career matters, an employee’s preference for his career is if the job is considered to inspire him (Chawla et al., 2017), work is not always a tangible activity to find money to meet all the desires and needs of life, but further than that the role of the profession and one’s career must also provide valuable inspiration in life (Hulkko-Nyman et al., 2012). However, opinions about causality are strictly demonstrated by several studies of reward and engagement that are reaching opposite conclusions, entitled Multigenerational Differences in Career Preferences, Reward Preferences, and Work Engagement, which analyzes in-depth career preferences, rewards, and participation in India. The results are found not to be significant (Chawla et al., 2017). Chawla, Dokadia, and Rai (2017) emphasized that reward is only a means of determining someone’s motivation to work, but not the main reason why an employee wants to stay in the organization.

From the perspective of Career theory, Chawla, Dokadia, and Rai (2017) delve about the role of career preferences for employee work involvement, where the leaders have a broad scope in determining the satisfaction of an employee, including whether a leader can inspire or appreciate subordinates for their performance. The study by Chawla, Dokadia, & Rai, (2017) deals with non-financial reward aspects. The study provides a guide to measure employee involvement: 1) feeling proud of the company is an aspect that cannot be considered trivial, because a positive image will have a broader impact on the environment outside the organization to give a feeling of pride for employees who work there; 2) career suitability between employee interest and job description; and 3) fairness between input and output, i.e., the amount of salary and the level of work, which includes the level of difficulty and career path that must be fair and appropriate. The rational building described above led us to develop a hypothesis, namely:

H1: Reward have a positive and significant relationship to engagement

The second path in this study also involves causality between religiosity and engagement. Religiosity means the state, understanding, and measurement of one’s obedience in believing in a religion that is manifested in the experience of values, rules, obligations to encourage someone to behave and act following the teachings of the religion they hold in everyday life. In an Islamic perspective, the measure of religiosity or obedience comes from how high the level of trust in the presence of God in the Muslim faith. (Allah SWT), how confident individuals are in the presence of God, and how it relates to fellow human beings (Dilmaghani & Dean, 2016). Added by Bakar et al., (2013) The indication of religiosity comes from two indicators, namely, outward (i.e., believing in the religion of Islam, observing the central worship at the mosque, zakat, fasting, and pilgrimage) and intrinsic (i.e., a high curiosity in learning the Koran and practicing the essence of al-Islam Quran in everyday life), generally, research on religiosity can be found from studies of Islamic studies.

Some researchers like Dilmaghani and Dean (2016, Farouk, et al. (2018, Huda et al. (2019), Karami, Olfati, and Dubinsky (2014), Kashif, Zarkada, and Thurasamy (2017) and Khraim (2010) state that there is a significant positive relationship between the level of religiosity and employee involvement in work. Dilmaghani and Dean (2016) and (Farouk et al. (2018) emphasize, from the standpoint of the theory of consumer behavior, that the benchmarks of religiosity go hand in hand with how much the individual understands the teachings of religion (Islam). But, from the same point of view, namely, consumer behaviortheory,Bakar, Lee, and Hazarina Hashim (2013) and (Ilter, Bayraktaroglu, and Ipek (2017) argue that the relationship between the level of religiosity and one’s behavior is negatively related. This negative relationship is bridged by how healthy a person’s level of maturity is. Bakar, et al. (2013) concludes that the bridge that connects the level of religiosity can have whole meaning and is inseparable from the influence of one’s materialism. Not only from the standpoint of behavior theory for Muslims themselves, one study that examines the level of religiosity in Protestants by Dilmaghani and Dean (2016) found that the level of religiosity of protestant women workers on the supply of female labor in Canada is believed to have a strong influence on both the industrial and social environment.

Literally, in the Islamic spiritual concept, the term religiosity means the level of obedience/belief (tawakkul and monotheism) to God (Allah SWT), also the level of ma’rifat which means to believe in the heart, practice goodness by the teachings of Islam and stay away from all that is prohibited by God (Allah SWT) (Huda et al., 2019; Nguyen et al., 2019; Meiyani & Putra, 2019). It is believed that the elaboration between one’s Islamic commitment will have a positive impact on one’s daily life, on the environment (Bhuian, Sharma, Butt, & Ahmed, 2018), society (Kamalul et al., 2016; Holland, 2014) and social life (Onyemah, Rouziès, & Iacobucci, 2018) which is reflected through honest behavior (Kashif et al., 2017), responsibility (Mensah & Azila-Gbettor, 2018), respect for the rights of others (Papyrakis & Selvaretnam, 2011), fair (Abdollahi et al., 2018) and transparent (Karami, Olfati, & Dubinsky, 2014). The level of individual religiosity moderates the relationship between honesty to achieve a rewarding attitude and employee involvement (Bhuian et al., 2018; Abdollahi et al., 2018; Khalid et al., 2020). The level of religiosity will reflect the level of satisfaction and happiness in working and employee involvement (Onyemah et al., 2018). Therefore, the level of religiosity is believed to be an attitude that can hold the ego, so that it can achieve a rational and wise state of behavior (Lavrǐ & Flere, 2010; Lavrič & Flere, 2011; Razzaq et al., 2018; Wang et al., 2019). Therefore, some definitions, statements, and urgency rather than religiosity towards engagement both directly and moderation lead us in developing a hypothesis, namely:

H2: There is a positive relationship between religiosity and engagement

H3: There is a positive relationship between reward and engagement by making religiosity a moderating variable.

3. Research Methods and Measurement

3.1. Samples Criteria

Conceptually, this study was designed with a quantitative approach, involving both direct and moderated relationships by analyzing the relationship between reward, religiosity, and engagement (Figure 1). Furthermore, empirical relationship analysis in this study was tested on 198 respondents using a proportional stratified random sampling method. However, after going through the results of normality testing, it was found that only 123 eligible questionnaire results were declared normal and deserved further testing.

All respondents in this study are civil servants working in GovernmentAgenciessuch asthe Population and CivilRegistry Office, the Investment Office, and the Regional Government Hospital, all from Malang City, East Java Province, Indonesia. 16% or 19 respondents were from the Office of Occupation and Civil Registration, Malang City Hospital; 56% or 69 respondents were from the Investment Office and 28% or 35 respondents were from the Office of Investment (Table 1).

Table 1: Respondent Data

3.2. Measurement and Research Design

Data collection in this study used a questionnaire that was distributed to all respondents. Overall, the survey consisted of forty-one questions divided into three main variables, namely, reward (independent variable), religiosity (moderating variable), and engagement (dependent variable). Specifically, the reward variable has four leading measurementindicators(incentives,salary,remuneration, and promotion); the four indicators consist of thirteen questions. The engagement variable has five leading measurement indicators (passion, dedication, appreciation, initiative, and commitment); the four indicators are summarized in fifteen questions. The variable of religiosity has five leading indicators (ideological, intellect, ritualization, experience, and consequences). The five indicators are summarized in sixteen questions. The comprehensive measurement of variables is illustrated in Appendix 1.

The measurement of the answers to each question was put into five alternative explanations ranging from “strongly disagree” to “strongly agree” with an answer scale ranging from 1 to 5 (Likert scale). The data analysis is carried out in two stages. The first stage is the analysis of descriptive quantitative data sourced from a census conducted on people who were made respondents. In this quantitative study, data processing is carried out through the stages of inspection (editing), the process of categorizing or classifying data (coding), and the process of disclosure (tabulating) and then analyzed using the linear regression approach. Some stages of testing the study include testing the validity and reliability (see Figure 1).

Figure 1. Conceptual Framework

This study approach uses quantitative analysis methods, namely, PLS-SEM. We use the PLS approach considering the concept of this study is to test the results of the modification of several research models, so that the results of the development of the model can provide value descriptions and interpretations. Another reason for the use of PLS is that the normality test is not expected. The Kolmogorov-Smirnov approach. ( η>0.5) while the test normality test this study is 0.01 < 0.5. The scale of measurement of variables using the Likert scale (1= Strongly Disagree – 5 = Strongly agree). Analysis of software use Smart-PLS 3.0. Criteria for measuring variables and constructs are based on conditions such as AVE value> 0.50 (Fornell & Larcker, 1981; Hair, Henseler, Dijkstra, & Sarstedt, 2014; Razak et al., 2020; Mansur, et al, 2019). Value of Composite Reliability (CR > 0.6) (Chin, 1998). Measurement of Cronbach’s alpha value > 0.5, R-square, F-Square, and measurement of loading-factors as the main formers of the variable (Chin, 1998).

4. Results and Discussion

4.1. Statistical Results

Appendix 2 presents the results of the complete statistical analysis, where the descriptive statistics of the three variables indicate the average value of the distribution of questionnairesin the range of 3.9 (neutral tendsto agree) - 4.3 (concur in the direction of the most agree) to all statements on questionnaire sheet (See appendix 1). Apart from that, the data due diligence test showed that, out of thirteen items making up the reward variable, six items were removed from the analysis. That is because the deleted items were declared invalid in compiling the reward variable. Likewise, in the religiosity variable, which consists entirely of sixteen constituent items, five items are removed to compile the religiosity variable.

Then, the Cronbach’s alpha value is (reward = 0.907; religiosity = 0.940; engagement = 0.958); it states that the value is in a very high level of relationship following the findings of Chin (1998), Fornell and Larcker (1981), and Hair, et al. (2014) who stated that the close relationship with a very high category is if the Cronbach’s alpha value is in the range 0.80 - 1.00. Likewise, with the value of composite reliability or reliability values also indicate high reliability (0.80 - 1.00). The Average Variance Extracted (AVE) value is in the minimum range of > 0.60. Can be seen in table 2 AVE values (Reward = 0.642; Religiosity = 0.627; Engagement = 0.634).

Still related to statistical analysis, the normality test using the Kolmogorov-Smirnov (asymptotic) method shows a KS value of 2,739> 0.05, which states that this study is normal/ parametric and assumed that 123 respondents can represent the actual population. Furthermore, the R-Square value of 0.553 states that the variable reward, religiosity, affects engagement by 55.3%. However, the value of partial testing (F-test) is very minimal in the partial relationship between reward and engagement (0.093 or 0.93%) while the partial correlation between religiosity and engagement is (0.298 or 29.8%). So, it can be assumed that rewards cannot stand alone to be tested against engagement. The results of this analysis also provide information that the religiosity variable is a useful control variable to test the causality relationship between reward, religiosity, and engagement. Furthermore, the discriminant validity test between each variable shows the value of validity in the range of 0.70 - 0.80, which is included in the high category.

The final step in the statistical analysis in this study is the interpretation of hypotheses, as illustrated in Table 2 and Figure 2. In this final stage of testing, through direct relationships such as religiosity with engagement, it shows thatthere is a positive and significant effect on the significance level <0.01. Likewise, with the link that explains the reward of engagement, which is also significant with a significance level <0.05. It is concluded that H1 and H2 hypotheses are accepted, but not H3 hypothesis. Because, through statistical testing, the religiosity variable cannot moderate between the reward and engagement variables (sig. 0.997 > 0.05).

Figure 2: PLS Moderating and Direct Effect

Table 2: Hypothesis Result

4.2. Discussion

The application of rewards for civil servants versus private employees in the company is an interesting topic to discuss. The number of reward items removed from testing (Table 2) indicates that rewards cannot be compared to the salary component. The payroll system for the public administration sector, in this case, has been regulated by the government and outlined in the law. In contrast, in the private sector, companies are flexible with regards to salary. The salary component can be a reward or an additional salary for the private sector based on how good an employee is in terms of quality performance. In contrast, for the civil servants in the public administration sector, performance does not immediately determine the level of salary. Incentive items in the reward variable component are included. The only thing that differentiates reward results from the performance of a public servant in the public administration sector is the remuneration. The middle range indicator on rewards that includes incentives and salary components as reward unit components have been raised by Mutiara Panggabean (2002), Sihotang (2007), Hariandja (2005), and Hasibuan (2007). It cannot be universalized to all aspects of the organization (public administration sector and private sector professional).

The promotional item component of the reward variable, for the private company sector, is a reflection and necessity as a form of positive appreciation of the organization’s professional actions to all internal members of the organization that have performed well. Whereas in the public administration sector, especially for civil servants, the promotion is included in the reward variable items and components. This can be seen in how valid the promotional items in this study are, informing the reward variable (see Table 2). In an ideal level in the public administration sector, performance flexibility has been regulated by the government, so that it is absolute and binding for all civil servants, different from the role of the private sector where the rules regarding rewards are flexible because they are regulated by internal organizations. It can be concluded that the perception of like or dislike on the application of the reward system in the public administration sector for civil servants is challenging; finding an ideal measurement model is difficult.

Nevertheless, the role of reward is one of support to increase the involvement of internal members of the organization. The perspective of bureaucratic theory and management theory provides facts that are in line with some of the results of previous studies that state the relevant, positive and significant relationship between the role of reward and engagement. Reward certainly gives a comfortable and safe feeling for someone not to worry about fulfilling their needs and desires; more than that, the role of reward is also an incentive to work.

In line with the results of the analysis of this study, religiosity also shows a positive correlation with the level of employee involvement, especially for civil servants in the public administration sector. However, through a moderating relationship that involves reward and engagement that is bridged by religiosity, it shows the inversely proportional results or the absence of a positive and significant correlation. There is a different tendency in the direction of state civil servants who separate religious affairs (religiosity) with the relationships with their work. Religiosity is a reflection of matters of worship aimed directly at God, while things about work are personal matters with the organization where he works. The existence of religiosity values does not have a positive tendency when faced with aspects of their work through moderation. This means that the reward factor in evaluating the work involvement of a civil servant in the public administration sector is not related to his religious values. The belief that religion teaches goodness and truth in life is genuine and absolute, but making religion/religiosity as a fundamental reason to strengthen employee involvement that is driven by reward has no impact.

In many previous studies collected to compile intelligent buildings, this study states that religiosity bridges job satisfaction and gratitude for the size of a salary, and bridges a person’s behavior (Dilmaghani & Dean, 2016; Farouk, Md Idris, & Saad, 2018; Huda et al., 2019) Findings show a conflicting statement in this study. However, some of the results of previous studies rejoin our research findings, which stated that moderation between religiosity factors that bridge the reward, behavior and work involvement and performance is not a positive and significant effect (Ilter, Bayraktaroglu, & Ipek, 2017; Bakar et al., 2013).

5. Conclusions

Salary and promotion elements as stated by Hasibuan (2007), Sihotang (2007), and Mutiara Panggabean (2002) are separate elements of the reward component. So, it cannot be assumed that salaries and promotions are appreciation rather than reward. Then, separately, from the perspective of the bureaucratic theory developed by Max Weber in 1905, which defines bureaucracy as an efficient work procedure that treats every internal organ of the organization equally to realize organizational goals (Serpa & Ferreira, 2019). Also, the management theory is interrelated, wherein one of the concepts of management puts forward the element of reward as part of the motivation to trigger a performance more effectively following those targeted by the organization. However, in the following facts, no correlation creates a bridge between the role of religiosity towards rewards and the element of employee involvement giving new facts about the results of conflicting research. So, in the development of work practices, the separation between the interests of religiosity is a separate part of the job in a professional manner. Of course, in the sense that religiosity should incarnate and reflect a positive context in every aspect and condition of each person that has an impact on behavior and attitudes both daily and at work.