<![CDATA[In the age of globalisation, companies need competent employees who demonstrate a high level of loyalty. Loyalty is reflected in employees’ willingness to adhere to and apply company regulations and values with full awareness and responsibility. Compliance with regulations demonstrates discipline and commitment to work, which can be enhanced through the appropriate use of rewards and sanctions, as well as the creation of job satisfaction. This study aims to analyze the effect of rewards and punishments on employee loyalty, with job satisfaction as a mediating variable, among employees of PT. Paiho Indonesia. The study employed a quantitative approach using a survey method involving 200 employees of PT. Paiho Indonesia. Data analysis was conducted using Partial Least Squares (PLS)-based Structural Equation Modeling (SEM) with the assistance of SmartPLS 3.2.8. Job satisfaction was found to partially mediate the effects of reward and punishment on employee loyalty. This study concludes that increasing rewards, implementing appropriate punishment, and enhancing job satisfaction can strengthen employee loyalty. Keywords: reward, punishment, job satisfaction, employee loyalty]]>
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