Murkhana1, Sofyan Idris2, M. Shabri Abd. Majid3, Maulidar Agustina4 Abstract. This study explores the role of spiritual leadership in enhancing the spiritual and economic motivation and the performance of employees of Sharia- compliant hotels in Banda Aceh, Indonesia. There are 330 employees of the selected Sharia-compliant hotels selected as the study's sample using a purposive sampling technique. The study found the important role of spiritual leadership in enhancing spiritual and economic motivation and employee performance. Additionally, spiritual leadership affects employees' performance indirectly through motivation. Thus, hotel management could improve employee performance by enhancing spiritual and economic motivation and spiritual leadership. Keywords: Islamic Tourism; Spiritual Leadership; Spiritual Motivation; Economic Motivation Abstrak. Penelitian ini bertujuan untuk mengeksplorasi peran kepemimpinan spiritual dalam meningkatkan motivasi spiritual dan motivasi ekonomi serta kinerja karyawan hotel syariah di Banda Aceh, Indonesia. Sebanyak 330 karyawan hotel syariah telah dipilih sebagai sampel penelitian ini dengan menggunakan teknik purposive sampling. Penelitan ini menemukan peran penting kepemimpinan spiritual dalam meningkatkan motivasi spiritual dan motivasi ekonomi serta kinerja karyawan. Selain itu, kepemimpinan spiritual mempengaruhi kinerja karyawan secara tidak langsung melalui motivasi. Dengan demikian, manajemen hotel dapat meningkatkan kinerja karyawan dengan meningkatkan motivasi spiritual dan motivasi ekonomi serta kepemimpinan spiritual. Kata kunci: Wisata Islami; Kepemimpinan Spiritual; Motivasi Spiritual; Motivasi Ekonomi Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant Hotel Employees in Aceh, Indonesia? Spiritual and Economical Motivation as Mediators Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Volume 15 (1), Jan-Jun 2023 P-ISSN: 2087-135X; E-ISSN: 2407-8654 Page 109 - 134 1,2,3,4Universitas Syiah Kuala (USK), Indonesia E-mail: 1murkhana@usk.ac.id, 2sofyan.idris@usk.ac.id, 3mshabri@usk.ac.id, Maulidar_a@mhs.unsyiah.ac.id Author: Murkhana Received: 02 February 2023 Accepted: 20 June 2023 Published: 31 June 2023 110 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Vol. 15 (1), Jan-Jun 2023 Introduction Since the emergence of Islamic economics as an academic discipline in the 1970s, many contemporary Islamic economic scholars have studied economic and financial theories and practices from an Islamic perspective. Islam prohibits activities involving interest (ribā), uncertainty (gharār), and gambling (maisîr) due to their exploitative features that cause unjust to all practices involved and, consequently, create economic imbalance at large. Although Islamic financial institutions have dominated the practices of business entities in the early ages of Islamic economic, however, in recent years, there has been a growing interest in Islamic tourism (Battour et al., 2010), particularly the formation of Islamic hotels (sharia-compliant hotels) that provides services in line with sharia principles. The hotel should serve permissible (halal) food and drink and ensure all operations are conducted harmoniously with the Sharia principles. The Sharia-compliant hotel has become a trend and necessary for Muslim travelers around the Organization of Islamic Cooperation (OIC) countries, including Indonesia. As the world's largest Muslim populous country and ranked fourth in the "Top 10 Halal Travel" (Adinugraha et al., 2021), Indonesia is very potential to tap revenues from domestic and foreign Muslim tourists to support its national economic growth. Thus, sharia-compliant hotels in Indonesia would expedite the realization of the country's aspiration to become one of the international Islamic economic and financial hubs, as stated in Indonesia's Islamic Economic and Financial Master Plan (2019-2024). Sharia-compliant hotel is necessary for supporting the Islamic tourism sector to become one of the vital economic sectors contributing to the national economic development. Among the 34 provinces in Indonesia, only Aceh has been granted for implementing the Sharia law in all aspects of daily life. Hence, Aceh has emerged as the leading province in the country for conducting economic and financial activities in compliance with Islamic law (Hafasnuddin et al., 2022). In Indonesia's Islamic Economic and Financial Master Plan (2019-2024), Aceh province has been prioritized by the central government of Indonesia to develop three sectors, namely Islamic finance, Islamic culinary (foods and beverages), and Islamic tourism to support the aspiration of Indonesia become the global Islamic and financial hub. Aceh province has implemented Regulation (Qanun) No. 11 (2018) that obliges all provincial financial institutions to be entirely operated based on Islamic principles since January 4, 2022. In the last few years, Islamic tourism has also been promoted by the presence of Sharia-compliant hotels. The practices of economic and business activities based on Islamic tenets in http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 Murkhana. Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant 111 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 the province would easily be supported by a 97.92% Muslim population (Aceh Province Government, 2020). Aceh has been one of the leading provinces in Indonesia to promote Islamic tourism through the presence of Sharia-compliant hotels. According to the Directorate of Sharia Ecosystem Infrastructure (2021), seven of the 16-star hotels in Aceh province were operated in accordance with Islamic principles and have been classified as Sharia-compliant hotels. A Sharia-compliant hotel's success in promoting Islamic tourism depends on its management to motivate employees to serve guests with the best performance and service quality. Thus, it is crucial to study the factors determining the performance of employees of Sharia-compliant hotels, which is the main focus of the present study. Many previous studies on determinants of employee performance have mainly focused on private and public organizations (Atatsi et al., 2019), while similar studies on Sharia-compliant hotels have been limited. Previous studies on sharia-compliant hotels find that spiritual leadership (Mariyanti et al., 2020; Mariyanti and Husin, 2020; Elias et al., 2017; Shofwa, 2013), Islamic leadership (Soemaryani, 2018), organizational culture (Mariyanti et al., 2020), organizational commitment (Mariyanti and Husin, 2020) marketing communication (Soniansih and Kusmiati, 2021; Wilantari and Afriani, 2022), internalization of Islamic work ethic (Soemaryani, 2018), spiritual motivation (Wahyudi et al., 2022; Aflah et al., 2021; Muafi, 2003; Shofwa, 2013), and economic motivation (Wojtaszek, 2016; Gaponenko et al., 2020) as the crucial factors determining employees performance. The above-reviewed studies only measured the direct effect of employee performance' determinants, and few investigated the effect of leadership on employee performance through motivation. Previous studies show the important role of leadership in motivating employees (Fisher, 2009; Usman et al., 2021), as supported by the expectancy theory (Isaac et al., 2001) and employee performance (Iqbal et al., 2015; Insan and Andriani, 2021). These indicate the potential mediating effect of motivation on the relationship between leadership and employee performance, which has been ignored in previous studies. This is affirmed by Zhang and Bartol (2010), who document the effect of leadership on employee performance indirectly through motivation. Thus, the previous studies failed to detect the potential mediating effect of motivation on the relationship between leadership and the performance of the employees working at Sharia- compliant hotels. The present study intends to measure and analyze the direct effect of spiritual leadership on employee performance and its indirect effect through spiritual and http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 112 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Vol. 15 (1), Jan-Jun 2023 economic motivation, taking the case of the Sharia-compliant hotels in Aceh, Indonesia. Aceh is the only province in Indonesia that has been granted authority to implement Sharia law in all aspects of daily life, including the economy. It has been the leading province in Indonesia for Islamic economic and financial activities. Another novelty of the study is the segregation of motivation variables into spiritual and economic motivation. Exploring the effect of spiritual leadership on spiritual and economic motivation and, consequently, their effects on employee performance are very relevant considering the main object of analysis is the Sharia-compliant hotels operated based on Islamic ethics and norms. The findings enrich the existing literature on determinants of performance of Sharia-compliant hotels' employees. The study's findings are hoped to shed some light on hotel management and relevant government authorities in designing appropriate policies to promote Islamic tourism as the leading contributor to the national economy by strengthening the employee performance of Sharia-compliant hotels. The rest of the study is structured in the following sequences. Section 2 reviews previous studies as the basis for the hypothesis development. Section 3 discusses research methods, followed by findings and discussion in Section 4. Finally, Section 5 concludes the paper. Literature Review This section discusses the relevant concepts and theories on Islamic tourism and Sharia-compliant hotel. The determinants of employee performance, comprising spiritual and economic motivation, and spiritual leadership, are also discussed. Finally, the study constructs the proposed, tested hypotheses based on the related existing theories and literature. Islamic Tourism In Islam, tourism has an important place and long historical value. Travel was commonly practiced during the Islamic historical era. Prophet Muhammad (PBUH) himself was known as a trading traveler. A Muslim must obey Sharia laws in all activities, including traveling. These laws regulate dress codes, food, entertainment, personal and social relations, and accommodations (Hashim et al., 2007; Aziz, 2001). Islamic tourism is called interchangeably with Ḥalāl tourism. Ḥalāl means permissible or allowed. Thus, Islamic tourism is considered a form of religious tourism activity permissible under Islamic law (Euromonitor, 2008). Islamic http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 Murkhana. Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant 113 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 tourism has no formal definitions, but it is widely agreed that it is related to Muslims' activity primarily for leisure (Al-Hamarneh, 2008). Islamic tourism does not only emphasize inter-Muslim movement, but it also relates to non-Muslim travelers who are interested in Islam. Muslim tourism is closely related to economic, socio-cultural, and religious aims. The resurgence of Islamic tourism is viewed as the revival of Islamic cultures and the spread of Islamic values to provide economic benefit for Muslims by strengthening Islamic self-confidence, identity, and beliefs in the face of negative stereotyping compared to Western cultures and lifestyles. In its development, Islamic tourism should be supported by the development of more Islamic hotels owned by Muslims and funded by Islamic financial institutions, alcohol-free accommodation, hotels with free indoor disco/nightlife, gender-segregated fitness, and sports facilities, conservative indoor dress codes, availability of prayer rooms on-site, women floors, and Islamic entertainment programs (Din, 1989; Al-Hamarneh, 2004). Therefore, the tourism industry strives to satisfy Muslim traveling activities based on Islamic ethics and norms, including the availability of Sharia-compliant hotels (Yagmur and Aksu, 2021). Sharia-Compliant Hotel Due to a growing interest in Islamic tourism, many sharia compliant hotels have emerged in the Muslim world. Since it is a newly established concept, the literature discusses shariah-compliant hotels have been meager (Razalli et al., 2012), and no formal criteria for it are agreed upon by previous studies (Samori and Rahman, 2013). However, previous scholars and industry practitioners only explain the essential characteristics and attributes of the shariah compliant hotel. The hotel should serve ḥalāl foods, no alcoholic drinks or gambling activity, have the Holy Book Quran, prayer mat and qibla direction, toilets position do not face the qibla, availability of a prayer room on hotel premises, no inappropriate entertainment, separation of a salon, recreational facilities, and swimming pool for women and men, separate room/ floor for an unmarried couple between male and female, tourists dressing code, funded using Islamic financial principles, staff preserves Islamic dress code and carries job following Islamic work of ethics (Henderson, 2010; Karim et al., 2017). Employee Performance All organizations, including Sharia-compliant hotels, could easily achieve their set goals successfully through the hard work of all employees. Thus, enhancing http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 114 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Vol. 15 (1), Jan-Jun 2023 employee performance should be the organization's concern as it reflects its performance. This shows the crucial role of employees as organization assets because without having employees with better performance, it is difficult for an organization to accomplish its goals (Mwita, 2000). Thus, a Sharia-compliant hotel needs to ensure its employee has better performance. Commonly, employee performance is viewed as the working quality and quantity based on organizational set standards. It shows a measured individual employee's achievement and contribution to the organization (McConnell, 2003). Employees perform their work to accomplish a specific assigned job, leading to positive outcomes and behaviors (Yuan and Woodman, 2010). In their study, Alsheikh et al. (2017) view employee performance as the level and quality of effort, cooperation, commitment, lateness and absenteeism, and employees' compliance with the organization's standards. Many factors influence employee performance. Walumbwa et al. (2011) classify the factors determining employee performance into three categories: First, the individual characteristics, comprising capabilities and expertise, background, and demographics. Second, is the psychological factors of perceptions, attitudes, personality, learning, and motivation. Finally, the organizational factors include resources, leadership, rewards, structure, and job design. Spiritual and Economic Motivation Motivation is the presence of power in a person to provide strength in doing a particular activity (Herzberg, 2011). It is a process of encouraging employees to do something without feeling forced. Motivation is a change in energy in a person which is marked by the emergence of feelings and is preceded by a response to the existence of a goal. A motivated employee is willing to expend a high effort toward achieving organizational goals while simultaneously meeting individual needs. With high motivation and self-confidence, employees always try to give their best for the work they are responsible for with mutual respect, need, and understanding (Shahzadi et al., 2014). Previous studies have categorized motivation into two categories, including spiritual motivation and economic motivation (Nicolescu and Verboncu (2007), non-financial and financial motivation (Grynko et al., 2017), or material and non- material motivation (Gaponenko et al., 2020). Spiritual motivation is the power in a person to act based on spiritual beliefs and needs. It concerns a person's awareness about his relationship with God as the Creator of humankind and the universe http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 Murkhana. Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant 115 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 (Emmons, 2000). Spiritual needs are natural needs whose fulfillment depends on human perfection and individual maturity. Thus, spiritual motivation aims at meeting the aspirations and expectations of spiritual nature using instruments of honorific titles, medals, trust, praises, and gratification. Spiritual motivation primarily relates to employees' values, attitudes, and behaviors (Demyen, 2014). In their study, Bhatti et al. (2016) represent spiritual motivation using five indicators: working as part of God's obligation, working as part of worship, meeting inner needs, establishing interpersonal relationships, and expecting God's pleasure. On the other hand, the nature of economic motivation relates to applying classical techniques using economic instruments to fulfill the needs of employees through salaries, allowances, the share of profit, and bonuses (Demyen, 2014). Economic motivation is viewed as financial compensation for employee achievement in providing services to the organization (Robbins and Judge, 2011). It is commonly expressed in an additional bonus to the salaries of winners in the competition in the profession (Gaponenko et al., 2020). Finally, Wojtaszek (2016) views economic motivation as remuneration, training, employment stability, punishment, and rewards. Spiritual Leadership Leadership is a person's ability to influence others to think and behave to perform well in formulating and achieving organizational goals in certain situations. Spiritual leadership is a person's attitudes and behaviors to use values required to intrinsically influence oneself and others to have a sense of spiritual survival through calling and membership and produce high performance (Fry et al., 2005). The fundamental blocks of spiritual leadership include vision, hope/faith, and altruistic love (Egel and Fry, 2017). A Spiritual leader is future-oriented (Egel and Fry, 2017) and applies ambiguous work procedures and guidelines to ascertain employees align with his vision (Yang and Fry, 2018). A clearly expressed vision makes sense for employees' work, invigorates them, and improves organizational commitment (Schuckert et al., 2018). It also shapes employees' strategic orientation, most notably aligning their work role and the organizational strategic priorities resulting in the employee proactive (Presbitero and Teng-Calleja, 2017). Furthermore, spiritual leadership establishes a transcendent vision, instills a sense of faith/hope into employees, builds an overall culture of love that enhances subordinates' intrinsic motivation, and gratifies their spiritual needs. Therefore, a spiritual leader actively contours a sense of calling and membership of employees, http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 116 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Vol. 15 (1), Jan-Jun 2023 thereby motivating them to show genuine care, compassion, and empathy to customers (Bayighomog and Araslı, 2019). As a result, spiritual leadership improves employees' abilities to comprehend and resolve complicated issues through discussion and intellectual dialogue (Fry et al., 2017; Usman et al., 2021). In measuring the dimensions of spiritual leadership, five indicators (i.e., broad appeal to key stakeholders, defines the destination and journey, reflects high ideals, encourages hope/faith, and establishes a standard of excellence) are used to measure vision dimension; five indicators (i.e., trust/loyalty, forgiveness/ acceptance/gratitude, integrity, courage, kindness, compassion, and patience/ meekness) are used to reflect the altruistic love dimension. Five indicators (i.e., endurance, perseverance, stretch goals, the expectation of victory, and excellence) are used to measure the hope/faith dimension (Fry et al., 2005). Previous Related Studies: Hypotheses Development Spiritual Leadership, Spiritual and Economic Motivation, and Employee Performance The previous studies on factors influencing motivation and employee performance have focused mainly on conventional hotels (Atatsi et al., 2019) rather than Sharia-compliant hotels. Previous studies show the important role of leadership in motivating employees (Fisher, 2009; Usman et al., 2021), as supported by the expectancy theory (Isaac et al., 2001). Spiritual leadership has the potential to improve both spiritual and economic motivation (Nicolescu and Verboncu (2007), non-financial and financial motivation (Grynko et al., 2017), or material and non- material motivation (Gaponenko et al., 2020). Spiritual motivation primarily relates to employees' values, attitudes, and behaviors. In contrast, economic motivation relates to applying classical techniques using economic instruments to motivate employees to work productively and efficiently (Demyen, 2014). In a similar vein, studies on Sharia-compliant hotels find a positive role of spiritual leadership in improving employee performance (Iqbal et al., 2015; Elias et al., 2017; Shofwa, 2013; Mariyanti et al., 2020; Mariyanti and Husin, 2020; Insan Andriani, 2021). Finally, Soemaryani (2018) finds the importance of the internationalization of Islamic leadership and Islamic work ethic to enhance employee performance in Islamic hotels. On this basis, the study proposes the following Hypotheses 1, 2, and 3: H1: Spiritual leadership influences the spiritual motivation of employees of sharia compliant hotels. http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 Murkhana. Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant 117 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 H2: Spiritual leadership influences the economic motivation of employees of sharia compliant hotels. H3: Spiritual leadership influences the performance of employees of sharia compliant hotels. Spiritual and Economic Motivation and Employee Performance Motivation is crucial for employees as energy and incentives to carry out assigned official tasks in the best possible ways. Generally, motivation is seen as an inner state determining an employee to behave in such a way as to accomplish a certain organizational goal. Thus, motivation is an essential and integral part of the general management process of the performance management component. The motivation-based reward system spiritually and financially motivates employees to work productively and efficiently to grasp benefits from positive effects within the organization (Zlate and Cucui, 2015). Previous studies show motivation's important role in enhancing employee performance (Iqbal et al., 2015; Insan and Andriani (2021). Both spiritual motivation (Muafi, 2003; Shofwa, 2013; Aflah et al., 2021; Wahyudi et al., 2022) and economic motivation (Wojtaszek, 2016) matter for employee performance. On this ground, the study proposes Hypotheses 4 and 5, as follows: H4: Spiritual motivation influences the performance of employees of sharia compliant hotels. H5: Economic motivation influences the performance of employees of sharia compliant hotels. Spiritual Leadership and Employee Performance: Mediating Role of Spiritual and Economic Motivation Previous studies show the important role of spiritual leadership in motivating an employee to work productively and efficiently (Usman et al., 2021), as supported by the expectancy theory (Isaac et al., 2001; Fisher, 2009). Spiritual leadership enhances employee performance (Iqbal et al., 2015; Insan and Andriani, 2021). These indicate the existence of a direct effect of spiritual leadership both on motivation and employee performance. Other studies also find the significant impact of both spiritual motivation (Muafi, 2003; Shofwa, 2013; Aflah et al., 2021; Wahyudi et al., 2022) and economic motivation (Wojtaszek, 2016) on employee performance. http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 118 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Vol. 15 (1), Jan-Jun 2023 These reviewed studies show the mediating effect of motivation on the relationship between spiritual leadership and employee performance. In their study, Zhang and Bartol (2010) affirmed the existence of an indirect impact of leadership on employee performance through motivation. On this basis, the study proposes the following last two hypotheses: H6: Spiritual motivation mediates the influence of spiritual leadership on the performance of employees of sharia compliant hotels. H7: Economic motivation mediates the influence of spiritual leadership on the performance of employees of sharia compliant hotels. The above-proposed tested hypotheses are illustrated in our proposed research model, as portrayed in Figure 1. Figure 1: A Proposed Research Model Spiritual Motivation Economic Motivation Spiritual Leadership Employees Performance Source: Processed, 2022 Note: Solid arrows line show a direct effect, while dashed arrow lines show a mediating effect Methods The present study measures and analyzes the direct effects of spiritual leadership on spiritual and economic motivation and employee performance and the direct effects of spiritual and economic motivation on employee performance. It also measures and analyses spiritual leadership's indirect effects on employee performance through spiritual and economic motivation. This study focuses on the case of Sharia- compliant hotels in Banda Aceh, Indonesia. As the only province in Indonesia that the national constitution has granted to implement of Sharia law in all aspects of daily life, including economic activities, Aceh has been the leading province in the country to promote Islamic tourism. In this study, four variables are analyzed, namely spiritual leadership (exogenous variable), spiritual and economic motivation (mediating variables), and employee performance (endogenous variables). Spiritual Leadership http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 Murkhana. Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant 119 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 In 2021, 83 units of hotels and other accommodation services were available in the city of Banda Aceh (BPS – Indonesia Statistics, 2021). These include 16- star hotels, 54 Jasmine hotels, one youth inn, five tourist lodges, and seven other accommodation services. Of 16-star hotels, 6 were sharia compliant hotels with halal kitchen and food preparation processes certification. These include the Rasamala Hotel, Kyriad Hotel, Hermes Hotel, Grand Permata Hati Hotel, Grand Nanggroe Hotel, The Pade Hotel, and Oasis Hotel. Grand Permata Hati Hotel is the only hotel with a certificate of full sharia compliance. Three hundred and thirty (330) employees working at sixSharia-compliantt hotels in Banda Aceh, Indonesia, were selected as our sample using a purposive sampling technique. The selected sample size is determined using the Slovin formula. It is also determined based on the need for Structural Equation Modelling (SEM) analysis, which is 5 to 10 times the number of indicators (Hair et al., 2019). Since the four variables investigated in our study consist of 32 indicators (i.e., 17-indicator for spiritual leadership, 5-indicator for spiritual motivation, 5-indicator for economic motivation, and 5-indicator for employees' performance), thus the minimum required sample size is 160 to 320. Our 330-selected sample size is more than enough to portray the entire population. The questionnaires were distributed to the selected respondents. Only employees with at least two years of experience working at star-sharia-compliant hotels in Banda Aceh, Indonesia, were asked to complete the distributed questionnaires to obtain better insight and information about the employees' working practices. They are requested to choose the best answer reflecting their perception using a five- point Likert scale, comprising 1 (strongly disagree), 2 (disagree), 3 (quite agree), 4 (agree), and 5 (strongly disagree). The gathered primary data are then analyzed using the Structural Equation Model (SEM). Some interviews were also conducted with the selected hotel management personnel and respondents to enrich the data analysis. In measuring spiritual leadership, our study uses three dimensions (i.e., vision, altruistic love, and hope/faith) following Fry et al. (2005). Five indicators, such as measure the first dimension of vision: broad appeal to key stakeholders, defining the destination and journey, reflecting high ideals, encouraging hope/ faith, and establishing the standard of excellence, while the second dimension of altruistic love dimension is measured by seven indicators, namely: trust/loyalty, forgiveness/acceptance/gratitude, integrity, courage, kindness, compassion, and patience/meekness. The last dimension of hope/faith is measured by five indicators: endurance, perseverance, stretch goals, the expectation of victory, and excellence. http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 120 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics) Vol. 15 (1), Jan-Jun 2023 Spiritual motivation is measured using five indicators: working as part of God's obligation, working as part of worship, meeting inner needs, establishing interpersonal relationships, and expecting God's pleasure (Bhatti et al., 2016). Meanwhile, economic motivation is measured using five indicators, namely: remuneration, training, stability of employment, punishment, and rewards (Wojtaszek, 2016). Finally, our study measures employee performance using five indicators: the level and quality of effort, cooperation, commitment, lateness and absenteeism, and compliance with the organization's standards (Alsheikh et al., 2017). Referring to previous studies (Isaac et al., 2001; Fisher, 2009; Zhang and Bartol, 2010; Iqbal et al., 2015; Insan and Andriani, 2021), the effects of spiritual leadership on spiritual and economic motivation and employee performance working in the sharia-compliant hotel in the city of Banda Aceh, Indonesia, as illustrated in Figure 1, are estimated using the following SEM equations: SMOT = γ11SLED + ε1 (1) EMOT = γ21SLED + ε2 (2) EMPR = γ31SLED + ε3 (3) Meanwhile, the effects of spiritual and economic motivation on employee performance and their mediating effects on the relationships between spiritual leadership and employee performance are measured using the following equation: EMPR = γ41SLED + γ42SMOT + γ43EMOT + ε4 (4) Where SMOT is the spiritual motivation, EMOT is the economic motivation, SLED is the spiritual leadership, EMPR is the employee performance, γ ii is the estimated regressors, and ε i is the structural error term. To ensure the robustness of our findings, before estimating Equations (1) - (4), the study conducts serial tests of model measurement of Confirmatory Factor Analysis (CFA) and goodness of fit indices. The direct effects (Hypotheses 1-5) between variables are tested using t-statistics, while the mediating effects (Hypotheses 6-7) are tested using the Sobel t-statistics with the framework of Baron and Kenny (1986). Results and Discussion Characteristics of Respondents Table 1 illustrates the characteristics of 330 selected employees working at six Sharia hotels included in the star hotel category in Banda Aceh, Indonesia. http://journal.uinjkt.ac.id/index.php/iqtishad https://doi.org/10.15408/aiq.v15i1.30910 Murkhana. Does Spiritual Leadership Matter for Enhancing Performance of Sharia-Compliant 121 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: https://doi.org/10.15408/aiq.v15i1.30910 These include the Rasamala Hotel, Kyriad Hotel, Hermes Hotel, Grand Permata Hati Hotel, Grand Nanggroe Hotel, The Pade Hotel, and Oasis Hotel. As portrayed in Table 1, the majority of the sharia-compliant hotels' employees were male (69.39%) with the age of 30-40-year-olds (46.67%), graduated Bachelor's degree (50.00%), Muslim (99.01), had a monthly income of IDR1.5 – IDR4.5 million, and 4-6 years of working experience. Overall, the employees of sharia-compliant hotels in Banda Aceh, Indonesia, are those of productive age and have great potential to contribute optimally to the advance of the hotel by having a high level of spiritual and economic motivation with the encouragement of spiritual leadership. Table 1: Characteristics of Respondents Gender Frequency % Religion Frequency % Male 229 69.39 Muslim 327 99.01 Female 101 30.61 Non-Muslim 3 0.91 Total 330 100 Total 330 100 Age Frequency % Monthly income# Frequency % <20 years 13 3.94