2.1 Self-determination theory

Developed by Deci and Ryan (1985) , Self-Determination Theory (SDT) is a prominent macro theory of human motivation, development, and well-being. According to Sheldon et al. (2023), SDT enhances the study of organizational processes such as human resource practices and provides valuable insights into employee attitudes.

Deci and Ryan (1985) categorize motivation into two types: autonomous and controlled. Autonomous motivation refers to engaging in tasks out of genuine interest, personal value, or identification with the task, fostering volition and self-endorsement. In contrast, controlled motivation arises from external pressures, such as rewards, deadlines, or avoidance of negative consequences, leading to behavior driven by external contingencies or internal pressures like guilt or ego (Deci & Ryan, 2008).

SDT offers a comprehensive framework for understanding how employees experience rewards in the workplace. Autonomous motivation is typically associated with higher job satisfaction because individuals perceive their work as meaningful and aligned with personal values, promoting well-being and persistence. Conversely, controlled motivation may undermine job satisfaction, as behaviors driven by external or internal pressures diminish intrinsic enjoyment and increase the risk of burnout (Deci & Ryan, 2008; Landry & Whillans, 2019).

Recent research has further refined SDT, reinforcing its relevance and theoretical robustness. It complements dominant motivation theories by offering a distinct perspective on human nature (Sheldon et al., 2023). Qaisar and Muhamad (2021) argue that future studies on internal marketing should utilize SDT, as it provides a promising foundation for addressing marketing-related issues (Gilal et al., 2019).

2.2 Internal Marketing (IM)

Internal marketing has evolved through two primary perspectives. The first emphasizes the importance of high-quality internal exchanges between an organization and its employees as a prerequisite for strong external customer relations. This behavioral view focuses on employees’ needs, well-being, and performance. Piercy and Morgan (1991) describe internal marketing as a strategy targeting internal audiences, paralleling external marketing efforts. The second perspective views internal marketing primarily as a tool for employee motivation, positing that satisfying employees is a minimum requirement for organizational success (Qiu et al., 2021).

Internal marketing involves addressing employees’ needs, treating work as an internal product, and fostering a conducive environment for motivation. It positively influences employee attitudes and behaviors, enhances service delivery, and ultimately boosts customer satisfaction (Marques et al., 2017).

Wagner et al. (2019) conceptualize internal marketing as strategies that embed organizational values and goals into the workforce. This human resource-focused perspective emphasizes the relationship between employees and the organization. Moreover, internal marketing functions reduce employee turnover and enhance commitment to service excellence (Kim, 2021). Employees’ direct interactions with customers significantly impact organizational performance (Tawfig & Kamarudin, 2021).

2.3 Internal Market Orientation (IMO)

Internal Market Orientation (IMO) is a subset of internal marketing that treats employees as internal customers. It highlights that employee satisfaction and motivation are critical to organizational success and, consequently, to customer satisfaction (Qiu et al. 2021).

IMO is foundational to external marketing success, as motivated employees deliver superior service. Thus, IMO and internal marketing are interconnected, jointly enhancing service quality and organizational outcomes (Lings, 2004).

IMO impacts both internal organizational factors (e.g., job satisfaction, productivity, retention, and engagement) and external outcomes (e.g., service quality and customer satisfaction) (Lings, 2004;Wieseke et al., 2009). Considering rewards as central to the employee-employer exchange, understanding their types is vital for assessing variations in job satisfaction. Kalleberg (1977) asserts that rewards have a substantial positive influence on job satisfaction.

2.4 Internal Marketing (IM) and Job Satisfaction (JS)

Multiple studies, including those by Bailey et al. (2016) , reveal a strong association between internal marketing and job satisfaction. Employees who perceive high levels of trust, motivation, and support from their organizations tend to exhibit greater professional development and recognize improvements in work-related aspects-both directly and indirectly-which in turn enhances productivity and competitiveness. Conversely, employee dissatisfaction contributes to negative organizational outcomes, including increased turnover and absenteeism. Thus, job satisfaction and attention to employee well-being are crucial in both manufacturing and service industries, as they underpin the relationship between employees and the organization (Bailey et al., 2016).

Maintaining satisfied, high-performing employees is essential for long-term organizational success. Job satisfaction reflects an employee’s attitude toward their daily tasks and is closely linked to job performance and work quality. Various factors contribute to satisfaction, including the work environment, compensation, opportunities for personal development, and interpersonal relationships (Marques et al., 2017; Uludag et al., 2023). Hung (2018) emphasizes that job satisfaction is a subjective perception, underscoring the role of internal marketing in shaping the factors that influence it. It is an evaluative process through which individuals assess their work and its outcomes, influencing their attitudes and behaviors (Yuctor & Salazar, 2019).

Several studies suggest that internal marketing practices can effectively enhance employee satisfaction. Internal marketing, as a deliberate organizational strategy, seeks to engage employees by treating them as internal customers. When employees feel valued, empowered, and appreciated, they are more likely to report higher levels of satisfaction with their organization (Frye et al., 2020).

Therefore, we propose the following hypotheses:

H1: Internal marketing positively influences employee job satisfaction in the banking sector.

2.5 Financial Rewards, Psychological Rewards, and Job Satisfaction

Rewards are fundamental components of the employee-employer relationship. Jara et al. (2018) differentiate between direct financial rewards-such as base salary, bonuses, and commissions-and indirect ones, including paid leave, vacation days, and additional benefits. Tinoco (2019) supports the view that financial incentives play a significant motivational role in helping employees achieve both personal and organizational goals. Khalid and Shoaib (2019) found that financial rewards exert a stronger influence on job satisfaction, as employees often prioritize monetary incentives (Deb et al., 2023).

Both financial and psychological rewards have a notable effect on job satisfaction. Hofmans et al. (2013) and Wagner et al. (2019) found that financial incentives can guide and reinforce desirable employee behaviors. Hofmans et al. (2013) also assert that psychological rewards-such as recognition and appreciation-are primary antecedents of job satisfaction.

Non-material rewards, including praise from supervisors and acknowledgment from peers, significantly boost self-esteem and a sense of accomplishment, thereby contributing to overall satisfaction (Khalid & Shoaib, 2019).

While Armstrong (2010) acknowledges the importance of offering appropriate financial rewards, he emphasizes the need for complementing them with other types of recognition. Tarigan et al. (2022) reinforce this view, stating that a comprehensive reward system-integrating both financial and non-financial elements-leads to improved job satisfaction.

H2: Financial rewards positively influence job satisfaction among banking-sector employees.

H3: Psychological rewards positively influence job satisfaction among banking-sector employees.

2.6 Job Satisfaction and Employee Self-Perceived Productivity

Job satisfaction has long been recognized as a critical factor in organizational studies due to its positive impact on employee self-perceived productivity and the achievement of organizational objectives. Employees are more productive when they are satisfied with their work environment and conditions, which fosters a sense of commitment, belonging, and loyalty. This, in turn, reduces turnover intentions and absenteeism (Villamares et al., 2021).

Employee productivity refers to the efficiency and effectiveness with which employees complete their tasks. In this study, productivity is understood as employee self-perceived productivity, representing employees’ self-assessment of their performance-a key metric reflecting the impact of human resource management practices (Yunus & Ernawati, 2018; Adeinat & Kassim, 2019; Wagner et al., 2019).

Numerous studies underscore the centrality of productivity as a driver of business development. Productivity is influenced by a range of factors, from individual characteristics to organizational systems and leadership practices (Sudarmo et al., 2022). Alkandi et al. (2023) suggest that a combination of financial and psychological incentives enhances job satisfaction, which ultimately improves productivity.

Cho and Perry (2012) argue that job satisfaction has a positive impact on employee performance (Condly et al., 2003). Essentially, satisfied employees are more committed and more effective in their roles, contributing to the overall success of the organization (Tarigan et al., 2022; Böckerman and Ilmakunnas, 2012). Based on the above, hypothesis four is as follows:

H4: Job satisfaction positively influences Employee self-perceived productivity

In summary, this literature review highlights the interconnectedness of internal marketing, financial and psychological rewards, job satisfaction, and employee self-perceived productivity in the banking sector, as can be seen in the Figure 1. Self-Determination Theory (SDT) provides the theoretical foundation, suggesting that meeting employees’ basic psychological needs through internal marketing and a balanced reward system fosters job satisfaction. In turn, satisfied employees are more likely to perform efficiently and contribute positively to organizational outcomes.

Figure 1 Research Model and Hypotheses.

The model was evaluated using the Partial Least Squares (PLS) technique with SmartPLS 3.3.3. The analysis was conducted in two stages: assessment of the measurement model followed by evaluation of the structural model (Chi,1998; Ringle & Wende, 2015).

4.1 Measurement Model

The measurement model was assessed by examining Cronbach's alpha (CA), composite reliability (CR), average variance extracted (AVE), and discriminant validity. These metrics evaluate the reliability and validity of the constructs and their respective indicators. The outcomes of this evaluation are illustrated in Figure 2.

Figure 2 Measurement Model Results

Table 3 presents Cronbach’s alpha values for the indicators, where all exceed the 0.70 threshold-except for JS3 and JS4-indicating acceptable reliability in accordance with Carmines and Zeller (1979) . Items SL3 and SL4 should be reviewed, removed, or reformulated, as their low factor loadings suggest potential validity concerns.

Although Cronbach’s alpha values above 0.95, such as those for RF2, RF3, RF4, and P2, suggest high reliability, they may also indicate redundancy among items. In such cases, simplifying the instrument is advisable to enhance clarity and avoid repetitive measures. However, SmartPLS includes additional analyses-such as discriminant validity and explained variance-that help ensure construct integrity and detect unnecessary redundancy, supporting the model’s overall reliability and validity (Wong, 2013).

The reliability of the constructs was further verified using composite reliability (CR) and Cronbach’s alpha (CA), with values above 0.70 considered acceptable. As shown in Table 3, all constructs meet or exceed this benchmark, demonstrating strong internal consistency. Convergent validity was evaluated through the average variance extracted (AVE), where values above 0.50 are deemed acceptable (Fornell & Larcker, 1981). The AVE values for each construct reported in Table 3 all exceed this threshold, confirming adequate convergent validity.

Table 3 Structural Model Measurement Instrument: Reliability and Convergent Validity

Variable	Indicator	Factor Loading Cronbach's Alpha of the Indicators	CA	CR	AVE
Financial Rewards	FR1	0.943	0.968	0.977	0.913
	FR2	0.954
	FR3	0.966
	FR4	0.958
Internal Marketing	IM1	0.781	0.950	0.957	0.668
	IM2	0.840
	IM3	0.816
	IM4	0.793
	IM5	0.854
	IM6	0.868
	IM7	0.829
	IM8	0.823
	IM9	0.858
	IM10	0.795
	IM11	0.724
Psychological Rewards	PR1	0.931	0.947	0.962	0.862
	PR2	0.944
	PR3	0.935
	PR4	0.904
Job Satisfaction	JS1	0.888	0.881	0.912	0.642
	JS2	0.898
	JS3	0.651
	JS4	0.509
	JS5	0.877
	JS6	0.898
Employee self-perceived Productivity	ESP1	0.944	0.885	0.946	0.897
	ESP2	0.950

Note: CA = Cronbach's Alpha, CR = Composite Reliability, AVE = Average Variance Extracted

Discriminant validity was assessed using the Fornell-Larcker criterion (Fornell & Larcker, 1981), which requires that the square root of each construct’s AVE exceed its correlations with other constructs. This condition was satisfied in all cases, indicating that the model meets the criterion for discriminant validity. Therefore, the latent variables are clearly distinct from one another (see Table 4).

Table 4 Discriminant Validity. Fornell-Larcker Criterion test.

	Internal Marketing	Employee Productivity	Financial Rewards	Psychological Rewards	Job Satisfaction
Internal Marketing	0.817
Employee Productivity	0.643	0.947
Financial Rewards	0.708	0.591	0.955
Psychological Rewards	0.737	0.637	0.785	0.929
Job Satisfaction	0.810	0.593	0.702	0.724	0.801

Following this analysis, the measurement model was validated. The evaluation of its parameters confirmed that the instrument is both statistically reliable and valid, thereby supporting the underlying theoretical framework (Henseler, 2014).

4.2 Hypothesis testing

The structural model is evaluated based on the strength and magnitude of relationships between variables using the R² index, effect size (f²), standardized path coefficients (β), and bootstrapping analysis (Hair et al., 2014). The R² value indicates the predictive power of the model, with thresholds of 0.67, 0.33, and 0.19 representing substantial, moderate, and weak explanatory power, respectively (Chin, 1998). The R² results show a value of 0.700, indicating that the model explains 70% of the variance in job satisfaction (substantial), and 0.351, indicating that the model explains 35.1% of the variance in employee self-perceived productivity (moderate).

Effect size (f²) measures the impact of an independent variable on a dependent construct, where f² > 0.35 indicates a large effect, 0.15 < f² ≤ 0.35 a medium effect, and 0.02 < f² ≤ 0.15 a small effect (Cohen et al., 1990). The results indicate that the construct “internal marketing” has a large effect on job satisfaction (f² = 0.431), job satisfaction has a large effect on employee self-perceived productivity (f² = 0.541), and economic and psychological rewards have small effects on job satisfaction (f² = 0.029 and 0.036, respectively).

Bootstrapping analysis is a resampling technique that treats the observed sample as representative of the population. Figure 3 displays the bootstrap values of the model. This analysis enables hypothesis testing by calculating the standard errors of parameters and Student’s t values. In this context, indicators with a student’s t value greater than 1.96 (Geisser, 1974; Efron,1993) were considered statistically significant. Table 5 presents the relationships between the model’s constructs, including standardized beta coefficients, standard errors, Student’s t values, significance levels, and the acceptance or rejection of hypotheses.

Figure 3 Bootstraping Results

Table 5: Summary of Structural Model Result

	Β	Standard Error	t - student	P Values	Results
H2: Financial Rewards -> Job Satisfaction	0.160**	0.055	2.877	0.004	Accepted
H1: Internal Marketing -> Job Satisfaction	0.560***	0.056	10.013	0.000	Accepted
H3: Psychological Rewards -> Job Satisfaction	0.185**	0.063	2.957	0.003	Accepted
H4: Job Satisfaction -> Employee Productivity	0.593***	0.050	11.923	0.000	Accepted

*** p<0.001; ** p< 0.01; * p< 0.05

The results of the model demonstrate a positive and significant relationship between the construct of financial rewards and job satisfaction, with a standardized beta coefficient of 0.160, thus supporting Hypothesis 2. A positive and significant relationship was also found between internal marketing and job satisfaction, with a standardized beta of 0.560, supporting Hypothesis 1. Additionally, a positive and significant relationship was observed between psychological rewards and job satisfaction, with a standardized beta of 0.185, confirming Hypothesis 3. Furthermore, the relationship between job satisfaction and employee self-perceived productivity was positive and significant, with a standardized beta of 0.593, supporting Hypothesis 4.

These results indicate that all four proposed hypotheses were accepted. Specifically, the financial rewards variable has a positive and significant relationship with employee job satisfaction (Khalid & Shoaib, 2019). Therefore, it is essential for companies to implement financial reward policies to enhance job satisfaction.

The implementation of financial rewards in organizations fosters job satisfaction, which is, in turn, positively and significantly influenced by internal marketing. This factor should be considered crucial, as Wagner et al. (2019) associate the ability to satisfy external customers with the satisfaction of internal customers. In this regard, Marques et al. (2017) assert that internal marketing practices positively and significantly affect employee satisfaction levels.

Similarly, psychological rewards have a positive influence on job satisfaction. This aligns with the findings of Wagner et al. (2019) , who affirmed that psychological rewards promote positive workplace behaviors and are identified by Hofmans et al. (2013) as predictors of job satisfaction. Hofmans et al. (2013) further emphasized that the employer-employee relationship is one of the primary antecedents of job satisfaction (Wagner et al., 2019).

The results indicate that job satisfaction has a significant positive impact on employee self-perceived productivity. This relationship is supported by Villamares et al. (2021) , who argue that satisfied employees are more profitable for companies. Adeinat and Kassim (2018) also stated that when employees feel satisfied with their work environment and their role within the organization, their productivity increases (Chuchuca et al., 2022).

Finally, the analysis of indirect effects investigated the mediation of Job Satisfaction in the relationships between: Financial Rewards, Psychological Rewards, and Internal Marketing with Employee Self-Perceived Productivity. Table 6 shows the results of the path coefficients for these indirect effects.

Table 6 Indirect effects

	B	P Values
Financial Rewards -> Job Satisfaction-> Employee self-perceived productivity	0.037	0.075
Internal Marketing -> Job Satisfaction-> Employee self-perceived productivity	0.130**	0.012
Psychological Rewards -> Job Satisfaction-> Employee self-perceived productivity	0.043	0.059

*** p<0.001; ** p< 0.01; * p< 0.05

As shown in Table 6, only the indirect effect of the relationship between Internal Marketing and Employee self-perceived productivity mediated by Job Satisfaction proved to be statistically significant (β=0.130; p=0.012). The statistical significance (p=0.012) implies that, for Internal Marketing initiatives to effectively translate into higher Employee self-perceived productivity, it is crucial that they first increase Job Satisfaction. The lack of statistical significance of mediation in relationships involving Financial Rewards (β=0.037) and Psychological Rewards (β=0.043) suggests that Job Satisfaction does not act as a necessary mediator between these types of rewards and Employee self-perceived productivity.

Based on the findings, it was determined that implementing labor reward policies-both psychological and financial-alongside maintaining a strong focus on internal marketing within organizations, enhances job satisfaction, which in turn drives increased employee self-perceived productivity. The results are largely consistent with global empirical evidence, which finds significant relationships between the constructs analyzed across different methodologies and sectors (Wieseke et al., 2009; Hofmans et al., 2013; Wagner et al., 2019; Qaisar & Muhamad 2021).

Among these factors, internal marketing emerges as the most influential driver of job satisfaction. These results suggest that employee satisfaction transcends mere well-being and functions as a strategic lever for improving organizational performance (Iqbal et al., 2019; Villamares et al., 2021). Organizations should therefore simultaneously emphasize internal marketing practices and those that promote job satisfaction in order to fully reap their benefits. Conversely, while financial rewards provide direct motivation, they may not sustain job satisfaction in the long term, particularly in volatile economies.

The added value of these results lies in the comparative magnitude of the effect. Although both financial and psychological rewards exhibit a positive relationship with job satisfaction, their impact is relatively modest compared to the overall influence of internal marketing efforts. This implies that a comprehensive internal marketing strategy centered on effective communication may be more effective than approaches relying solely on salary or individual recognition. While competitive compensation remains essential for attracting and retaining talent, internal marketing practices yield greater returns in terms of job satisfaction and productivity. These practices therefore complement, rather than replace, financial rewards (Yunu & Ernawati, 2018; Adeinat & Kassim, 2019; Wagner et al., 2019).

These findings reinforce existing theory by demonstrating the critical interconnection between human resource management and marketing strategies, while emphasizing that an organization’s internal well-being is a fundamental precursor to external success.

In the context of Latin American banking, management quality and organizational capacity are pivotal in enhancing employee self-perceived productivity. The focus on operational efficiency and managerial effectiveness highlights the necessity of human talent development, motivation, and improved operational practices, especially given the region’s complex economic and regulatory environment. In this climate, where financial rewards may be perceived as variable or insufficient due to inflation or economic fluctuations, the psychological and management factor provided by Internal Marketing becomes an anchor of stability and belonging.

The substantial influence of internal marketing underscores the need for banking institutions the region to prioritize management quality and human talent development as precursors to employee self-perceived productivity. This suggests that, for banking in Latin America, investing in the internal climate would be a risk mitigation strategy and a sustainability imperative that goes beyond mere compensation. Consequently, human talent development is vital for the continuous improvement of productivity and the long-term sustainability in the bank sector (Chae & Lee, 2024).

This study evaluated the impact of financial rewards, internal marketing, and psychological rewards on job satisfaction and employee self-perceived productivity in the banking sector across five Latin American countries. All four hypothesized relationships were confirmed. The results indicate that while financial and psychological rewards positively influence job satisfaction, internal marketing has the most substantial effect. Furthermore, job satisfaction significantly enhances employee self-perceived productivity.

From a strategic standpoint, the findings suggest that organizations seeking to improve performance should place greater emphasis on internal marketing practices rather than relying solely on financial incentives. Promoting a supportive work environment, fostering internal communication, and recognizing employee contributions are key levers for enhancing satisfaction and, consequently, productivity.