An Examination of How the Job Satisfaction Affects the Linkage
between Compensation System and Lecturer Performance:
A Case Study at a State University in Bali
Agoes Ganesha Rahyuda
Department of Management, Faculty of Economics Udayana University, Denpasar, INDONESIA
Email: gana_brave@yahoo.com
ABSTRACT
A higher education institution needs to improve the performance of its lecturers, in order to be able to improve its performance as a whole and also to increase the satisfaction of its students. The lecturers’ performance could be enhanced by improving their job satisfaction and by developing a good compensation system. The conceptual model in this research is developed based on three previous pieces of research: (a) the work of Comm & Mathaisel (2003) and Chen et al. (2006), regarding the correlation of compensation system with job satisfaction, (b) the research conducted by Comm & Mathaisel (2003) and Carmeli & Freund (2004) on the influence of job satisfaction to job performance, and (c) the work of Jennings & McLauglin (1997) about the influence of compensation system to job performance.
This research aims at testing a model about the influence of compensation system on the job satisfaction and the performance of university lecturers. The model is tested in a state university in Bali, Indonesia. Empirical data used in this research is collected through 150 set of questionnaires in the case university. Structural Equation Modeling (SEM) approach is used in the statistical data processing, using LISREL 8.8 application software. Results show that compensation system has a significant positive influence on the job satisfaction of the university lecturers, either directly or indirectly through job satisfaction.
Keywords: compensation system, job satisfaction, lecturer performance, state university
1. INTRODUCTION
optimally. For this study we emphasized our concern on lecturers, especially in the performance of lecturer because lecturers are the prime factor in increasing quality of human resources and also the leader of a higher education system (Krishnaveni & Anitha, 2007).
By concerning the important role of lecturers in increasing the quality of a higher education system, lecturers and their performance must be given a thorough attention (Carmeli & Freund, 2004). Besides, good performance of the lecturers is an important component in increasing the lecturers’ academic quality, the organization’s performance as a whole, and the customers’ (students) satisfaction. The primary tasks of lecturer are in three areas, namely, teaching, research, and devotion to public. Together this task constitutes the work of academics, although some people would argue that the devotion to public is of lesser importance to academics compared with the other two tasks (Oshagbemi, 2000).
There are many factors that could give effect to lecturer performance, but one important factor which could influence the lecturers’ performance is job satisfaction (Carmeli & Freund, 2004). At higher education sector, Chen et al. (2006) noted that the job satisfaction of the lecturers is an important factor that must be considered by the organization, because it could influence the quality of the lecturers’ performance in teaching, in conducting researches and also in public devotion activities. Based on that, job satisfaction of the lecturers is considered to be an important factor which could influence the lecturers’ performance. It plays a role not merely in enhancing the spirit and enthusiasm in their work activities, but also in helping the organization to operate effectively and efficiently in reaching its goals.
To date, much of the research on academic quality in higher education focused just on students, evaluating their satisfaction or dissatisfaction with various programs. Since employee job satisfaction has been found to be as important as costumer (student) satisfaction (Oshagbemi, 2000), research on the quality of higher education has now also begun to look at the job satisfaction of lecturers. Lecturer satisfaction can give an effect to lecturer performance, in which could indirectly increase organizational performance and customer satisfaction. Lecturers are the internal customer of the business and lecturer satisfaction with the environment could promote teaching and research quality. Therefore, teacher requirements must be fulfilled to achieve outstanding research and teaching performance (Chen et al. 2006).
known that ideal compensation system is the important factor and will give satisfaction to the lecturers in their working area and could motivate them to increase their performance; while an inadequate compensation could harm job satisfaction and could cause decline in the productivity and performance of the lecturers. Besides, in order to attract and retain an effective and committed workforce, colleges and universities must offer competitive levels of compensation to their faculty, and they have to recognize their achievements (Comm & Mathaisel, 2003). These compensation commitments to the lecturer enhance performance, which in turn, is a key component to improving academic quality.
Based on the description indicates a framework occurred. This framework showed that there are several factors that could give an effect to lecturer performance. Although this framework capture primary lecturer performance influences including compensation system and job satisfaction, a unifying model of these established factors is absent. Thus for this study, all of these factors will be merged in a unifying model and tested to the population. Besides, the descriptions above indicate that a deeper research is required to find out the influence of compensation system on lecturers’ performance, either directly or indirectly through job satisfaction. So our purpose of this research is to know the influence of compensation system on lecturer performance, either directly or indirectly through job satisfaction.
This research uses one State University in Bali as a case study to apply the conceptual model.
This University is selected because at the moment this university is a barometer of a quality university for Middle Indonesia region.
2. RESEARCH MODEL
Direct Extrinsic Intrinsic
Compensation System
Indirect Extrinsic
Mentally Challenging Work
Supportive Working Condition
Equitable Rewards
Supportive Colleagues Job Satisfaction
Performance
Devotion to Public Research
Teaching
Figure 1 Research Model
3. METHODOLOGY
3.1. Research Sample
The respondents of this research are permanent lecturers in the case university, with minimum year of service of 4 years. It is due to the assumption that with such long years of service, they will have sufficient understanding about the university. The number of research samples taken is 150 lecturers from 1433 population, measured based on Slovin formula (Sevilla, Ochave, Punsalan, Regala & Uriarte, 1993). Proportionate stratified random sampling method was applied. This is a method where population is classified based on a certain characteristic, and samples are taken from the population proportionally and randomly (Sevilla et al., 1993).
The characteristic selected for this research is the lecturers’ work unit (the faculty or study program) in the case university. The reason is that a faculty or a study program is the unit that directly makes decision and policy.
3.2. Measurement Instrument
of lecturers is a compilation of the four job satisfaction characteristics (Robbins, 1996). While the measurement instrument used to measure lecturers’ performance is developed based on the lecturers’ performance in executing the three higher education mission, named as “Tri Dharma”, according to Utilization Decree of The State's Minister of Number State Apparatus 38/Kep/MKWASPAN/8/1999 date of 24 Augusts 1999 (Kepmen PAN no. 38 thoriums. 1999). The scale type applied to measure perception of respondents in this research is a Likert form scale.
The measurement instruments (questionnaire) were tested on 30 research samples, and resulted in a reliability coefficient value (Cronbach's Alpha) of 0,910 for compensation system, 0,919 for job satisfaction, and 0,917 for lecturers’ performance. While the validity coefficient value for every item posed at by total item correlation coefficient of 0,361. Based on the test mentioned, it is concluded that the questionnaire is valid and reliable to be used as data collecting instruments in this research.
3.3. Data Processing Technique
Data processing in this research uses structural equation modeling method, with the help of LISREL program. Early stage in data processing is making orthogonal transformation of data from ordinal data to interval data, using the method of successive interval (MSI) technique. After the data has been transformed into interval, then the interval data is processed using LISREL program to calculate the level of influence between exogenous variables to endogenous variables. In this research, the output from the LISREL program used to answer the research questions and the research hypothesis are: line coefficient value, t-value and R2 value.
4. RESULTS
4.1. The Effect of Compensation System on Job Satisfaction
Result of data processing using the structural equation modeling method for compensation system and the job satisfaction of lecturer is as follows:
• t-value of compensation system variable on lecturers’ job satisfaction is 3,78; which indicates that the parameter value is significant.
• The partial influence of compensation system on lecturers’ job satisfaction is 0,69.
Result of data processing using the structural equation modeling method for job satisfaction and the lecturer performance is as follows:
• t-value of job satisfaction variable on lecturers’ performance is 4,21; which indicates that the parameter value is significant.
• The partial influence of job satisfaction on lecturers’ performance is 0,44.
4.3. The Effect of Compensation System and Job Satisfaction on Lecturers’ Performance
Result of data processing using the structural equation modeling method for compensation system, job satisfaction and lecturers’ performance is as follows:
• t-value of compensation system variable on lecturers’ performance is 2,85; which indicates that the parameter value is significant.
• F value that of compensation system and job satisfaction variable on lecturers’ performance is 14,6; which indicates that the parameter value is significant.
• The value of coefficient of determination (R2) of compensation system and job satisfaction variable on lecturers’ performance is 0,74; which indicates that 74% variance of lecturers’ performance is explained by compensation system and job satisfaction, while the rest (equal to 26%) might be explained by other variable.
• The directly partial influence of compensation system on lecturers’ performance is 0,31.
• The indirectly partial influence of compensation system on lecturers’ performance (through job satisfaction) is 0,18.
• The simultaneous influence of compensation system and job satisfaction variable on lecturers’ performance is 0,38.
5. DISCUSSION
5.1. The Effect of Compensation System on Job satisfaction and Lecturers’ Performance
This finding is in line with Dessler’s opinion (1997) which states that an ideal compensation system could satisfy employees in doing their jobs, and an inadequate compensation system could harm employees’ job satisfaction, which could result in the decline of their productivity and performance. An inadequate compensation system could also lead to employees’ dissatisfaction and cause them to leave the company and move to other companies which could give them higher earnings. Moreover, Chen et al. (2006) also support the findings of this research. According to Chen, from the six factors capable to influence job satisfaction of lecturers (organization vision, respect, motivation, management system, compensation system and work environment), it is found that the main factor which is very influential, is the compensation system. Chen et al. (2006) stated that the ideal compensation system could give satisfaction to lecturers, so that they are motivated to increase their performance. On the contrary, an inadequate compensation system could harm job satisfaction and could decline the level of productivity and performance of the lecturers.
From the result of this research it could be inferred that lecturers require a good compensation system that could support them in executing their main duties. A good compensation system could increase lecturers’ prosperity. Satisfied lecturers could improve their quality, not only in the teaching activities but also in their productivity in executing researches and in their public devotion activities. Robbins compensation system concept (1996) could be considered in enhancing the lecturers’ job satisfaction and performance.
5.2. The Effect of Job Satisfaction on Lecturers’ Performance
Research finding indicates that the lecturers’ job satisfaction has a positive and significant influence to the lecturers’ performance. The direct level of influence has already been explained and it is also shown that the lecturers’ performance in the case university is also influenced by their job satisfaction. Therefore to optimize the lecturers’ performance, the policy maker or leader of a higher education organization, especially in the case university must look for appropriate ways for the organization to increasing the lecturers’ job satisfaction.
university and could improve their productivity and performance in executing research and also in their classroom teaching process. When lecturers feel satisfaction in their work, they will execute and fulfill their duties with full effort, utilizing every ability that they own without minding the time and energy that they have to spend.
Based on that, it is inferred that lecturers’ job satisfaction is an important factor which could influence their performance. Job satisfaction is not merely an indication of the existence of spirit and enthusiasm in executing their jobs, but job satisfaction could also influence the performance and efficiency of the organization. From this research it could also be concluded that the lecturers are looking forward to have a co-operative working condition and working environment which could raise their satisfaction and enhance their performance.
5.3. The Simultaneous Effect of Compensation System and Job Satisfaction on Lecturers’
Performance
Simultaneously the solvent compensation system and job satisfaction could give significant contribution on lecturer performance equal to 0,38. The rest (equals to 0,62) is the influence coming from other factors like: organization culture, management system, work load and also cooperation of team (teamwork). This indicates that improvement of the lecturers’ performance in executing the higher education mission mostly depends on the adequate compensation system concept that could enhance the job satisfaction of its lecturers.
Satisfied lecturers in doing their work, added with good relations between the lecturer could give prosperity to the lecturers through good compensation system, which is believed to be able to significantly increase the lecturers’ performance. This is not merely to the advantage of the lecturer but also will give significant advantage to the organization’s performance, especially in the case university.
6. CONCLUSION
Based on the discussion mentioned above, it could be inferred that:
• Compensation system has positive and significant influence directly as well as indirectly on the lecturers’ performance. This indicates that the lecturers’ performance in higher education organization, especially in the case university, would be improved if the compensation system concept from Robbins (1996) is being applied by the policy maker.
• Job satisfaction has positive and significant influence on lecturers’ performance. This indicates that job satisfaction plays an important role in higher education organization, especially in the case university, as it could enhance the lecturers’ performance.
• Simultaneously the compensation system and job satisfaction have positive and significant influence on the lecturers’ performance. This finding indicates that the lecturers’ performance in higher education organization, especially in the university researched, would be improved if they are satisfied, if the organization is applying appropriate compensation system.
REFERENCES
Carmeli, A. & Freund, A. (2004). Work commitment, job satisfaction, and job performance: an empirical investigation. International Journal of Organization Theory and Behavior, 7 (3), 289-309.
Chen, S.H., Yang, C.C., Shiau, J.Y. & Wang, H.H. (2006). The development of an employee satisfaction model for higher education. The TQM Magazine, 18 (5), 484-500.
Comm, C.L. & Mathaisel, D.F.X. (2003). A case study of the implications of faculty workload and compensation for improving academic quality. The International Journal of
Educational Management, 17 (5), 200-210.
Dessler, G. (1997). Human Resource Management. McGraw-Hill, Inc. New York.
Jennings, K. & McLauglin, F. (1997). Measuring and correcting inversion in faculty salaries at public universities. Public Personnel Management, 12 (1), 263-271.
Krishnaveni, R. & Anitha, J. (2007). Educators’ professional characteristics. Quality Assurance in Education, 15 (2), 149-161.
Oshagbemi, T. (2000). How satisfied are academics with their primary tasks of teaching, research and administration and management?. International Journal of Sustainability in Higher Education, 1 (2), 124-136.
