The mediating role of employees' productivity on the relationship between internal marketing and business performance in Telekom Malaysia Berhad

The Malaysian telecommunications sector has been a very competitive and challenging business environment. Telecommunications companies (Telcos) must be aggressive, innovative, and viable to achieve Malaysia’s goal of becoming a developed country. However, Telekom Malaysia lagged behind other competitors due to a high number of customer complaints and low employee productivity, which impacted business performance. This study aims to examine the effect of internal marketing on employees’ productivity and business performance and to explore the mediating role of employees’ productivity on the relationship between internal marketing and business performance in Telekom Malaysia. Data were collected using self-administered questionnaires from 1150 respondents who are technical employees at Telekom Malaysia and analyzed using correlation analysis and multiple regression analysis. In this study, internal marketing factors, namely training and development, strategic rewards, employee empowerment, and internal communication are considered the independent variables, while business performance serves as the dependent variable, and employees’ productivity as the mediator. The results show that three internal marketing factors, namely training and development, strategic rewards, and internal communication, significantly affect employee productivity and business performance of telco. Moreover, employees’ productivity significantly mediates the relationship between internal marketing and business performance. The results show that this aspect is critical for increasing employees’ productivity and business performance. This study employs Internal Marketing Mix and Social Exchange Theory as underlying theories in developing the proposed research framework. This study contributes to the body of knowledge on the importance of employees’ productivity as a mediator between internal marketing and business performance. Telcos should emphasize the importance of providing adequate support to employees, such as training and development, effective communication between employees and management, and attractive rewards to encourage employees’ productivity and improve business performance.