Performance-based rewards and innovative work behavior: Psychological safety, meaningful work, and transformational leadership in a mediated and moderated model

Purpose Building on Job-Demand Resource (JD-R) theory and Social Exchange Theory (SET), this paper aims to empirically examine the relationship between performance-based rewards (PBR) and employees’ innovative work behaviour (IWB). Specifically, the study investigates the mediating role of meaningful work (MFW) in the relationship between PBR and IWB. Additionally, the role of psychological safety (PS) is examined as a mediator between PBR and MFW. The subsequent effect of MFW on IWB is analysed to explore the underlying mechanism explaining the PBR–IWB link. Transformational leadership (TFL) is proposed as a moderator of the relationship between MFW and IWB. Design/methodology/approach Data were collected using a survey questionnaire distributed to 286 full-time employees working in the technological, mining and financial sectors in Jordan. Structural equation modeling (SEM) using AMOS v29 and SPSS PROCESS v4.2 was used to test the research model. Findings PBR significantly and positively affects IWB through MFW. The relationship between PBR and PS is also significant, with PS further mediating the PBR–MFW link. Additionally, TFL positively moderates the MFW–IWB relationship. Originality/value This paper is among the very few research studies that examine the link PBR and IWB. Uniquely, it considers employees’ perceptions of the psychological dimensions of the employment relationship in promoting the PBR–IWB link. The mediating roles of MFW and PS, along with the moderating role of TFL, are rarely explored in the context of the PBR–IWB relationship. This study provides valuable insights into the mechanisms that drive and enhance IWB.