The Influence of Performance-Based Reward Systems and Decision Decentralization on Human Resource Management Innovation in the Local Government of Makassar City, South Sulawesi Province

Abstract

This study aims to analyze the influence of performance-based reward systems and decision decentralization on innovation in human resource management. In an era of increasingly dynamic global competition, organizations are required not only to carry out HRM functions efficiently but also to adopt innovative approaches to address challenges posed by the work environment, technology, and employee expectations. A performance-based reward system, which directly links rewards to individual or team performance, can motivate employees to engage in innovative behavior, while decision decentralization allows for faster decision-making and greater responsiveness to local needs. This study used a quantitative approach with a survey method to collect data from structural and functional officials in six Makassar City government agencies that implement a performance-based reward system and decision decentralization. The results indicate that both variables have a positive effect on HRM innovation, both separately and simultaneously. These findings provide theoretical and practical insights into the importance of integrating a fair and transparent reward system with a more autonomous decision-making structure in encouraging innovation in human resource management. Policies that encourage these two elements can strengthen competitive advantage and organizational performance.