The Effect of Wage and Incentive on Employee Productivity Viewed in Islamic Perspective

Abstract

Wage and incentive in Islam are recognized as Ujr. It is a reward obtained by someone who has given services in Ijarah contract (Aqad). Islam views that wage and incentive should be given to employee properly based on instruction in Al Quran and Hadist. Wage and incentive are the important factors for the company because the amount of wage or compensation given by a company to its employee will influence on the running of the operational of company. Salaries and incentives are needed by each organization or company to maintain and improve employee morale in order to improve employee productivity. Therefore, this research discusses the effect of wage and incentive on employee productivity viewed in Islamic Perspective at PT. Awal Bros Bumi Pusaka Pekanbaru. In this regard, the study employed the quantitative method and analysed using multiple linear regression. The data used are primary data obtained from the questionnaire designed for employees of PT. Awal Bros Bumi Pusaka Pekanbaru. Samplings of this research are 40 respondents selected using purposive random sampling technique. The data obtained was processed by SPSS software. The result of this research found that wage has positive influence or significance on the employee productivity with t-test value of 0.003 or < 0.05 (significance value) and coefficient regression of wage (X1) of 0.433. Besides, incentive also has positive influence or significance on the employee productivity with t-test value of 0.033 or < 0.05 (significance value) and coefficient regression of incentive (X2) of 0.433. It means that increasing in wage and incentive will increase employee productivity. It is suggested that the company should give proper wage based on employee productivity in their performance. The company also has to increase the incentive for the employee in order to motivate them in works and raise the sense of trust employee.