Enhancing employee sustainable performance through compensation: the moderating role of an innovative safety climate and the mediating role of workplace health

Purpose This study aims to achieve sustainable market share and continuous growth; employee sustainable performance (ESP) is crucial. Hence, the purpose of this study is to serve a deeper understanding of compensation (time-rate compensation, performance-based compensation and fixed-based compensation) and ESP, where innovative safety climate, i.e. innovative safety training (IST), innovative safety gadgets (ISG), innovative safety communications (ISC) moderate workplace health (WH) (mediator) and ESP among leather small- and medium-sized enterprises (SMEs) in Pakistan. Design/methodology/approach The data were collected by cross-sectional administering a cross-sectional survey of the employees working in leather SMEs in Pakistan. Two hundred and forty responses were utilized for data analysis. The proposed model was tested using the partial least squares structural equation modeling. Findings The data supported the claims that fixed-based compensation (FBC) and WH are significantly related to ESP. Fixed-based compensation (FBC) and time-rate compensation (TRC) are significantly related to WH. Further, WH mediates between fixed-based compensation and ESP. ISC, ISG, and IST significantly moderate WH and ESP. The present study is innovative in the new framework of ESP to link these relationships, which adds the concept of two theories, i.e. self-determination theory and Conservation of Resource theory, with three innovative moderators. Practical implications The study's findings suggest that top-level management should effectively implement the best compensation strategies to enhance ESP. Managers should also focus on integration as facilitators to adopt innovative measures and WH improvements to enhance ESP. Originality/value Previous studies have advocated employee firm productivity and employee productivity and/or performance, this study explores sustainable performance, health and safety in leather SMEs.