The Transport Subsidy as a Mediator between Employee Income and Work Effectiveness a Financial Perspective
Keywords:
Employee Income, Transport Subsidy, Work Effectiveness, Financial Perspective.
Abstract
This research investigates how transport subsidies function as a mediating factor between employee income and work effectiveness among civil servants in Timor-Leste. The findings indicate that income positively influences effectiveness, while transport subsidies not only reinforce this effect but also independently foster greater discipline, concentration, and productivity by easing financial pressures and commuting challenges. Conceptually, the study emphasizes the relevance of non-wage benefits within the frameworks of Equity Theory and Expectancy Theory. Practically, it demonstrates that incorporating transport subsidies into compensation structures can serve as a strategic approach to enhancing employee performance and strengthening the overall quality of public service delivery.
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References
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Adams, J.S., 1965. Inequity in social exchange. In L. Berkowitz (ed.), Advances in Experimental Social Psychology. New York: Academic Press, pp.267–299.
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Akib, H., Hatimah, I. & Sakawati, T., 2023. Additional employee income policies and motivation: An empirical review. International Journal of Human Resource Studies, 13(1), pp.45–58.
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Avner, P. & Pereira, R., 2021. Public finance implications of transport subsidies in developing countries. Transport Policy, 106, pp.48–57.
Bakker, A.B. & Demerouti, E., 2021. Job demands–resources theory: A review of ten years of research. Annual Review of Organizational Psychology and Organizational Behavior, 8, pp.273–300.
Basso, L.J. & Silva, H.E., 2022. Transport subsidies and urban sustainability. Transport Policy, 115, pp.123–135.
Becker, G.S., 1964. Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago: University of Chicago Press.
Bucăţa, G. & Rizescu, A.M., 2021. Financial incentives and employee performance: A managerial perspective. Economic Research-Ekonomska Istraživanja, 34(1), pp.202–218.
Choudhury, C.F., Li, Y. & Tang, L., 2024. Commuting conditions and employee productivity: A moderation analysis. Transportation Research Part A: Policy and Practice, 180, pp.102–115.
Fornell, C. & Larcker, D.F., 1981. Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), pp.39–50.
Fulmer, I.S., Gerhart, B. & Kim, T., 2023. Employee compensation and income in HRM research. Academy of Management Annals, 17(1), pp.211–245.
Gómez-Lobo, A., 2019. Efficiency and equity in public transport subsidies. Journal of Transport Economics and Policy, 53(2), pp.103–123.
Hadi, S., Prasetyo, T. & Purwanto, A., 2022. Measuring work effectiveness: A review and conceptual framework. Journal of Management Development, 41(7), pp.560–575.
Hair, J.F., Hult, G.T.M., Ringle, C.M. & Sarstedt, M., 2014. A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Thousand Oaks: Sage.
Hair, J.F., Hult, G.T.M., Ringle, C.M. & Sarstedt, M., 2021. A Primer on PLS-SEM using Smart PLS 4. London: Sage.
Henseler, J., Ringle, C.M. & Sarstedt, M., 2015. A new criterion for assessing discriminant validity in variance-based SEM. Journal of the Academy of Marketing Science, 43(1), pp.115–135.
Herzberg, F., 1959. The Motivation to Work. New York: John Wiley & Sons.
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International Labour Organization (ILO), 2021. World Employment and Social Outlook: The role of income and fairness. Geneva: ILO.
Ilmi Nafi’ah, A., Arifianto, S. & Qomariah, N., 2023. Additional income and supportive climate: A synergy for employee engagement. Management Dynamics Journal, 12(2), pp.64–80.
Kerres, M. & Bedenlier, S., 2020. Compensation perceptions in changing work environments. International Journal of Human Resource Management, 31(12), pp.1523–1540.
Khan, A., 2023. Labor market inequality in developing economies. Development Economics Review, 39(1), pp.87–102.
Kim, J. & Lee, H., 2020. Income, motivation and job engagement among IT employees in South Korea. Journal of Asian Business and Economic Studies, 27(2), pp.213–229.
Kumar, V. & Sharma, R., 2021. Compensation fairness and motivation in organizations. International Journal of Organizational Analysis, 29(5), pp.132–149.
Kurniawati, T. & Mulyanto, B., 2024. Perceptions of compensation fairness and satisfaction. Indonesian Journal of Business and Management, 14(1), pp.54–70.
Li, J. & Chen, Z., 2023. Transport subsidies, engagement and fairness: Evidence from China. Transport Policy, 121, pp.40–52.
Li, T. & Verma, R., 2023. Women’s workforce inclusion through transport interventions. Journal of Transport Geography, 105, pp.103–112.
Litman, T., 2023. Evaluating Transportation Benefits and Costs. Victoria: Victoria Transport Policy Institute.
Lucas, K., 2021. Transport subsidies, accessibility and social equity. Journal of Transport and Social Policy, 15(2), pp.210–227.
Maharani, D., 2025. Transport subsidies and urban workforce inclusion. Urban Policy and Research, 43(1), pp.34–48.
Masbiran, A., et al., 2022. Demand-side subsidies and public transport usage. Journal of Public Transport Studies, 25(3), pp.67–81.
Maslow, A.H., 1943. A theory of human motivation. Psychological Review, 50(4), pp.370–396.
Meijerink, J., Boons, M. & Keegan, A., 2021. Allowances and sustainable HR practices. Human Resource Management Journal, 31(4), pp.713–729.
Meianto, R., Bahiramsyah, H. & Endri, E., 2021. Compensation and work effectiveness in Indonesian firms. International Journal of Economics and Business Administration, 9(3), pp.123–137.
Memon, M.A., Cheah, J., Ramayah, T., Ting, H. & Chuah, F., 2018. Mediation analysis in PLS-SEM. Industrial Management & Data Systems, 118(5), pp.170–188.
Miller, E., de Barros, A., Kattan, L. & Wirasinghe, S., 2016. Income differences and transport benefits. Journal of Public Transportation, 19(2), pp.45–59.
Munyua, M. & Mutury, J., 2018. Equity, organizational justice and performance. African Journal of Business Management, 12(6), pp.178–189.
Nguyen, T. & Nguyen, H., 2022. Subsidized transport and employee productivity in Vietnam. Asia-Pacific Journal of Business Administration, 14(2), pp.165–180.
Nitzl, C., Roldan, J.L. & Cepeda, G., 2020. Mediation analysis in partial least squares path modeling. Industrial Management & Data Systems, 120(1), pp.33–52.
Nyaga, D. & Otieno, P., 2021. Salaries and work effectiveness among Kenyan government employees. African Journal of Public Administration, 14(1), pp.98–112.
Okwu, O., 2022. Subsidies and productivity: Evidence from developing countries. Journal of Development Studies, 58(6), pp.843–860.
Pereira, R., et al., 2022. Mobility, workforce inclusion and public transport subsidies. Transport Reviews, 42(2), pp.156–174.
Pojani, D. & Stead, D., 2021. Sustainable transport and equity in policy. Transport Policy, 100, pp.1–12.
Prabowo, H. & Purwanto, A., 2023. Managerial effectiveness and innovation. International Journal of Productivity and Performance Management, 72(5), pp.1241–1260.
Putra, A., Nugroho, B. & Nugraha, A., 2023. Employee income and work effectiveness in Indonesia. Jurnal Manajemen Indonesia, 23(1), pp.45–58.
Saleh, S., Bau, Y. & Darwis, D., 2024. Career growth, recognition and work effectiveness. International Journal of Human Capital and Business Strategy, 16(2), pp.134–148.
Santos, G., et al., 2022. Transport subsidies and environmental sustainability. Environmental Science and Policy, 136, pp.23–33.
Sarstedt, M., Ringle, C.M. & Hair, J.F., 2022. Partial least squares structural equation modeling. Nature Reviews Methods Primers, 2(1), pp.1–16.
Sclar, E., et al., 2023. Transport governance and subsidy challenges in developing economies. Journal of Transport Geography, 106, pp.103–120.
Serebrisky, T., et al., 2021. Public transport subsidies in practice: An overview. World Bank Policy Research Working Paper. Washington, DC: World Bank.
Vroom, V.H., 1964. Work and Motivation. New York: Wiley.
Wang, Y. & Xu, Z., 2022. Work effectiveness: Objective and subjective measures. Human Resource Development International, 25(1), pp.34–50.
Wang, Z., Liu, J. & Zhang, H., 2024. Transport subsidies, retention and performance. Transport Policy, 121, pp.23–39.
Wekesa, P. & Musiega, D., 2020. Transport subsidies and organizational commitment in Kenya. African Journal of Management, 6(3), pp.209–226.
Wijayanti, R., Johannes, A. & Hendayana, R., 2022. Fairness in income and employee motivation. Indonesian Journal of Human Resource Management, 10(2), pp.77–88.
World Bank, 2023. Timor-Leste Economic Report. Washington, DC: World Bank.
Yi, H. & Lu, X., 2023. Transport subsidies in developing contexts: A comparative study. Journal of Transport and Development Policy, 7(2), pp.101–115.
Yulianti, R., Denessen, E. & Droop, W., 2019. Transport subsidies and punctuality in education. International Journal of Educational Development, 70, pp.102–114.
Yunisvita, V., et al., 2022. Education and income premiums: Evidence from Indonesia. Journal of Development Economics, 58(2), pp.201–219.
Yusoff, W., et al., 2021. Income fairness, transport subsidies and employee retention. Journal of Human Resource and Sustainability Studies, 9(3), pp.456–472.
Zhao, Y., Liu, H. & Wang, M., 2023. Hybrid work, flexibility and employee effectiveness. Journal of Business Research, 152, pp.1–12.
Adams, J.S., 1965. Inequity in social exchange. In L. Berkowitz (ed.), Advances in Experimental Social Psychology. New York: Academic Press, pp.267–299.
Adeyemi, S. & Ajayi, O., 2023. Income security and employee productivity: Evidence from Nigerian financial institutions. Journal of African Business, 24(2), pp.145–162.
Akib, H., Hatimah, I. & Sakawati, T., 2023. Additional employee income policies and motivation: An empirical review. International Journal of Human Resource Studies, 13(1), pp.45–58.
Al Mamun, C.A. & Hasan, M., 2020. Employee income and performance in the Bangladeshi manufacturing sector. South Asian Journal of Business and Management Cases, 9(2), pp.230–242.
Armstrong, M. & Taylor, S., 2020. Armstrong’s Handbook of Human Resource Management Practice. 15th ed. London: Kogan Page.
Asian Development Bank (ADB), 2020. Key indicators for Asia and the Pacific 2020. Manila: ADB.
Avner, P. & Pereira, R., 2021. Public finance implications of transport subsidies in developing countries. Transport Policy, 106, pp.48–57.
Bakker, A.B. & Demerouti, E., 2021. Job demands–resources theory: A review of ten years of research. Annual Review of Organizational Psychology and Organizational Behavior, 8, pp.273–300.
Basso, L.J. & Silva, H.E., 2022. Transport subsidies and urban sustainability. Transport Policy, 115, pp.123–135.
Becker, G.S., 1964. Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago: University of Chicago Press.
Bucăţa, G. & Rizescu, A.M., 2021. Financial incentives and employee performance: A managerial perspective. Economic Research-Ekonomska Istraživanja, 34(1), pp.202–218.
Choudhury, C.F., Li, Y. & Tang, L., 2024. Commuting conditions and employee productivity: A moderation analysis. Transportation Research Part A: Policy and Practice, 180, pp.102–115.
Fornell, C. & Larcker, D.F., 1981. Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), pp.39–50.
Fulmer, I.S., Gerhart, B. & Kim, T., 2023. Employee compensation and income in HRM research. Academy of Management Annals, 17(1), pp.211–245.
Gómez-Lobo, A., 2019. Efficiency and equity in public transport subsidies. Journal of Transport Economics and Policy, 53(2), pp.103–123.
Hadi, S., Prasetyo, T. & Purwanto, A., 2022. Measuring work effectiveness: A review and conceptual framework. Journal of Management Development, 41(7), pp.560–575.
Hair, J.F., Hult, G.T.M., Ringle, C.M. & Sarstedt, M., 2014. A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Thousand Oaks: Sage.
Hair, J.F., Hult, G.T.M., Ringle, C.M. & Sarstedt, M., 2021. A Primer on PLS-SEM using Smart PLS 4. London: Sage.
Henseler, J., Ringle, C.M. & Sarstedt, M., 2015. A new criterion for assessing discriminant validity in variance-based SEM. Journal of the Academy of Marketing Science, 43(1), pp.115–135.
Herzberg, F., 1959. The Motivation to Work. New York: John Wiley & Sons.
Hu, L.T. & Bentler, P.M., 1999. Cutoff criteria for fit indexes in covariance structure analysis. Structural Equation Modeling, 6(1), pp.1–55.
International Labour Organization (ILO), 2021. World Employment and Social Outlook: The role of income and fairness. Geneva: ILO.
Ilmi Nafi’ah, A., Arifianto, S. & Qomariah, N., 2023. Additional income and supportive climate: A synergy for employee engagement. Management Dynamics Journal, 12(2), pp.64–80.
Kerres, M. & Bedenlier, S., 2020. Compensation perceptions in changing work environments. International Journal of Human Resource Management, 31(12), pp.1523–1540.
Khan, A., 2023. Labor market inequality in developing economies. Development Economics Review, 39(1), pp.87–102.
Kim, J. & Lee, H., 2020. Income, motivation and job engagement among IT employees in South Korea. Journal of Asian Business and Economic Studies, 27(2), pp.213–229.
Kumar, V. & Sharma, R., 2021. Compensation fairness and motivation in organizations. International Journal of Organizational Analysis, 29(5), pp.132–149.
Kurniawati, T. & Mulyanto, B., 2024. Perceptions of compensation fairness and satisfaction. Indonesian Journal of Business and Management, 14(1), pp.54–70.
Li, J. & Chen, Z., 2023. Transport subsidies, engagement and fairness: Evidence from China. Transport Policy, 121, pp.40–52.
Li, T. & Verma, R., 2023. Women’s workforce inclusion through transport interventions. Journal of Transport Geography, 105, pp.103–112.
Litman, T., 2023. Evaluating Transportation Benefits and Costs. Victoria: Victoria Transport Policy Institute.
Lucas, K., 2021. Transport subsidies, accessibility and social equity. Journal of Transport and Social Policy, 15(2), pp.210–227.
Maharani, D., 2025. Transport subsidies and urban workforce inclusion. Urban Policy and Research, 43(1), pp.34–48.
Masbiran, A., et al., 2022. Demand-side subsidies and public transport usage. Journal of Public Transport Studies, 25(3), pp.67–81.
Maslow, A.H., 1943. A theory of human motivation. Psychological Review, 50(4), pp.370–396.
Meijerink, J., Boons, M. & Keegan, A., 2021. Allowances and sustainable HR practices. Human Resource Management Journal, 31(4), pp.713–729.
Meianto, R., Bahiramsyah, H. & Endri, E., 2021. Compensation and work effectiveness in Indonesian firms. International Journal of Economics and Business Administration, 9(3), pp.123–137.
Memon, M.A., Cheah, J., Ramayah, T., Ting, H. & Chuah, F., 2018. Mediation analysis in PLS-SEM. Industrial Management & Data Systems, 118(5), pp.170–188.
Miller, E., de Barros, A., Kattan, L. & Wirasinghe, S., 2016. Income differences and transport benefits. Journal of Public Transportation, 19(2), pp.45–59.
Munyua, M. & Mutury, J., 2018. Equity, organizational justice and performance. African Journal of Business Management, 12(6), pp.178–189.
Nguyen, T. & Nguyen, H., 2022. Subsidized transport and employee productivity in Vietnam. Asia-Pacific Journal of Business Administration, 14(2), pp.165–180.
Nitzl, C., Roldan, J.L. & Cepeda, G., 2020. Mediation analysis in partial least squares path modeling. Industrial Management & Data Systems, 120(1), pp.33–52.
Nyaga, D. & Otieno, P., 2021. Salaries and work effectiveness among Kenyan government employees. African Journal of Public Administration, 14(1), pp.98–112.
Okwu, O., 2022. Subsidies and productivity: Evidence from developing countries. Journal of Development Studies, 58(6), pp.843–860.
Pereira, R., et al., 2022. Mobility, workforce inclusion and public transport subsidies. Transport Reviews, 42(2), pp.156–174.
Pojani, D. & Stead, D., 2021. Sustainable transport and equity in policy. Transport Policy, 100, pp.1–12.
Prabowo, H. & Purwanto, A., 2023. Managerial effectiveness and innovation. International Journal of Productivity and Performance Management, 72(5), pp.1241–1260.
Putra, A., Nugroho, B. & Nugraha, A., 2023. Employee income and work effectiveness in Indonesia. Jurnal Manajemen Indonesia, 23(1), pp.45–58.
Saleh, S., Bau, Y. & Darwis, D., 2024. Career growth, recognition and work effectiveness. International Journal of Human Capital and Business Strategy, 16(2), pp.134–148.
Santos, G., et al., 2022. Transport subsidies and environmental sustainability. Environmental Science and Policy, 136, pp.23–33.
Sarstedt, M., Ringle, C.M. & Hair, J.F., 2022. Partial least squares structural equation modeling. Nature Reviews Methods Primers, 2(1), pp.1–16.
Sclar, E., et al., 2023. Transport governance and subsidy challenges in developing economies. Journal of Transport Geography, 106, pp.103–120.
Serebrisky, T., et al., 2021. Public transport subsidies in practice: An overview. World Bank Policy Research Working Paper. Washington, DC: World Bank.
Vroom, V.H., 1964. Work and Motivation. New York: Wiley.
Wang, Y. & Xu, Z., 2022. Work effectiveness: Objective and subjective measures. Human Resource Development International, 25(1), pp.34–50.
Wang, Z., Liu, J. & Zhang, H., 2024. Transport subsidies, retention and performance. Transport Policy, 121, pp.23–39.
Wekesa, P. & Musiega, D., 2020. Transport subsidies and organizational commitment in Kenya. African Journal of Management, 6(3), pp.209–226.
Wijayanti, R., Johannes, A. & Hendayana, R., 2022. Fairness in income and employee motivation. Indonesian Journal of Human Resource Management, 10(2), pp.77–88.
World Bank, 2023. Timor-Leste Economic Report. Washington, DC: World Bank.
Yi, H. & Lu, X., 2023. Transport subsidies in developing contexts: A comparative study. Journal of Transport and Development Policy, 7(2), pp.101–115.
Yulianti, R., Denessen, E. & Droop, W., 2019. Transport subsidies and punctuality in education. International Journal of Educational Development, 70, pp.102–114.
Yunisvita, V., et al., 2022. Education and income premiums: Evidence from Indonesia. Journal of Development Economics, 58(2), pp.201–219.
Yusoff, W., et al., 2021. Income fairness, transport subsidies and employee retention. Journal of Human Resource and Sustainability Studies, 9(3), pp.456–472.
Zhao, Y., Liu, H. & Wang, M., 2023. Hybrid work, flexibility and employee effectiveness. Journal of Business Research, 152, pp.1–12.
Published
2026-03-23
How to Cite
Bere, D., Belo, T. and Saldanha, E. (2026) “The Transport Subsidy as a Mediator between Employee Income and Work Effectiveness a Financial Perspective”, Timor Leste Journal of Business and Management, 7, pp. 16-27. doi: 10.51703/bm.v7i0.252.
Section
Articles
Copyright (c) 2026 Timor Leste Journal of Business and Management
This work is licensed under a Creative Commons Attribution 4.0 International License.
