International Review of Social Sciences and Humanities Vol. 10, No. 2 (2016), pp. 90-97 www.irssh.com ISSN 2248-9010 (Online), ISSN 2250-0715 (Print) Correlation of Incentive and Reward to Improve Employee Performance and Job Satisfaction at Operating Paper Mill in East Java Indonesia Mamik (Corresponding Author) Department of Midwifery, Ministry of Health Health Polytechnic of Surabaya, Jawa Timur, Indonesia, 60282 E-mail: dr.mamik@gmail.com Nursama Heru Apriantoro Department of Radiodiagnostic and Radiotherapy Ministry of Health, Health Polytechnic of Jakarta 2, Jakarta, Indonesia, 12120 E-mail: nursama_91@yahoo.co.id Sari Luthfiyah Department of Electromedical Engineering Ministry of Health, Health Polytechnic of Surabaya, Jawa Timur, Indonesia, 60282 E-mail: sariluthfiyah@yahoo.co.id (Received: 8-10-15 / Accepted: 27-12-15) Abstract The purpose of study to know the correlation between incentives and rewards on performance and job satisfaction of employees, in particular of employees at its existing operations at the paper mill in East Java. This is explanatory research, using 100 samples. Data was collected by disseminating a questionnaire. Data analysis tool using path analysis with the statistical software. This indicates that the employee's performance as the intervening variables play a role in strengthening the relationship/influence of incentive and reward of employee job satisfaction. Reward has a greater influence on employee performance than incentive. The results of this research are: (a) a variable incentive and reward directly influence significantly to the performance of employees, (b) a variable incentive and reward directly not significant with respect to job satisfaction of employees, (c) variable incentive and reward indirectly through employee performance influence significantly to job satisfaction of employees. Keywords: Incentive, Reward, Performance, Job Satisfaction.