Effect of Compensation on Employee Job Satisfaction at PT. Indohealth Pekanbaru

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Effect of Compensation on Employee Job Satisfaction at PT.

Indohealth Pekanbaru

Rudi Pranata ¹, Syukri Iska ², Refika Mastanora ³

1 Sekolah Tinggi Ilmu Ekonomi Riau, Indonesia

2 Universitas Islam Negeri Mahmud Yunus Batusangkar, Indonesia

3 Universitas Islam Negeri Mahmud Yunus Batusangkar, Indonesia

Corresponding Author: Refika Mastanora, E-mail; [email protected]

Article Information:

Received January 24, 2023 Revised January 30, 2023 Accepted January 30, 2023

ABSTRACT

PT. Indohealth is a company engaged in the sports equipment distribution sector, especially selling fitness equipment such as treadmills, elliptical bikes, home gyms and therapy equipment. The background of this research is that giving compensation sometimes creates social jealousy between one employee and another. This is very detrimental to the company because the work result will be ineffective, and the company's turnover will decrease. This research generally aims in general from the research is to determine the effect of Compensation on Employee Job Satisfaction at PT. Indohealth Pekanbaru. Many factors affect employee job satisfaction, including; compensation and incentive factors. This study uses a quantitative approach to data collection methods of interviews, observations, and questionnaires. The sample collection technique is to use the census method. Based on the results of the t test using the SPSS program, a tcount of 5.623 is obtained, when compared to a ttable value of 2.039, so that tcount >

ttable (5.623> 2.039) so that it can be concluded that the compensation affects the variable employee job satisfaction at PT. Indohealth Pekanbaru.

Koywords: Compensation, Job Satisfaction, Employees

Journal Homepage https://ojs.iainbatusangkar.ac.id/ojs/index.php/elhekam/index This is an open access article under the CC BY SA license

https://creativecommons.org/licenses/by-sa/4.0/

How to cite: Pranata, R., Iska, S., & Mastanora, R. (2023). Effect of Compensation on Employee Job Satisfaction at PT. Indohealth Pekanbaru. El-Hekam : Jurnal Studi Keislaman, 8(1), 1- 12. http://dx.doi.org/10.31958/jeh.v8i2.8600

Published by: Universitas Islam Negeri Mahmud Yunus Batusangkar Press

INTRODUCTION

An organization or company to achieve a goal depends on the performance of employees (Adnan, 2020). Therefore the provision of compensation is very, very important to support employee performance satisfaction so that employee productivity

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the performance of employees will provide a reciprocal contribution to the survival of the organization or company.

In Ahwandi it is stated, According to Suwanto it is stated that the principles of compensation are: The Principle of Justice (Afif dkk., 2022; Gultom dkk., 2022; Mufid dkk., 2022). Compensation affects the behavior of employees in the organization so that compensation that is not based on the principle of justice will affect the working conditions of employees. Principle of Eligibility and Fairness. Compensation received by employees must be able to meet the needs of themselves and their families, at an appropriate and reasonable level, so that the amount of compensation that will be given will reflect the status, recognition, and level of fulfillment of needs that will be enjoyed by employees and their families (Ahwandi, Lussianda, 2018)

In addition to compensation, other factors that act as triggers for increasing or not employee satisfaction are work environment factors. The work environment in a company is very important to note. A work environment that focuses on employees can improve performance on the contrary an inadequate employee work environment can reduce employee performance and ultimately employee job satisfaction is not fulfilled (Israwati, 2021)

PT. Indosehat is a company engaged in the field of sports equipment distributors, especially selling fitness equipment such as treadmills, elliptical bikes, home gyms and therapy equipment. The company has permanent employees and contract employees.

Permanent and contract employees at this company are compensated in the form of salaries, benefits, performance bonuses at the end of each year, based on position, education, years of service, and abilities of each employee.

In giving compensation, it sometimes creates social jealousy between one employee and another, if the compensation is not fair and good, it will result in a decrease in the level of performance of employees who feel that they are not being treated fairly in giving compensation. These conditions will result in employees not being productive at work and work will often not be completed on time. This is very detrimental to the company because it is felt to be ineffective, efficient and optimal.

This will result in customer dissatisfaction due to unprofessionalism in the work provided by the company.

In Mulyadi, the compensation system assists in strengthening the organization's key values and facilitating the achievement of organizational goals. There are some who think that by carrying out minimum compensation they feel they have complied with the applicable compensation provisions, so they hope that there will be fairness in enforcing the compensation system that applies in every company and also that supervision must be carried out in accordance with procedures and there will be no more problems related to workers compensation (Mulyadi (STIE Pertiwi), 2013)

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inside and outside the work relationship, which can directly or indirectly increase work productivity in a safe and healthy work environment.

In Kasim, according to Samsumdin, the provision of compensation is very important for employees, because the size of compensation is a measure of employee performance, in his quote it is stated that: Provision of compensation can improve work performance and employee motivation. Therefore, the attention of organizations or companies towards rational and fair arrangements is needed (Kasim, 2014)

In Erdiansyah there are many opinions from experts on the meaning of compensation including: According to Thomas H. Stone in his book Understending Personal Management, compensation is any form of payment given to employees in exchange for the work they provide to the employer. Meanwhile, according to Edwin B.

Flippo in his book Principles of Personal Management, compensation is the provision of proper and fair service rewards to employees because they have contributed to organizational achievements. According to Sedarmayanti (2013). Compensation is everything received by workers as remuneration for their work. Compensation is the provision of remuneration, either directly in the form of money (financial) or indirectly in the form of awards (non-financial). According to Yusuf, Compensation is the overall remuneration received by employees as a result of carrying out work in the organization in the form of money or otherwise which can be in the form of salaries, wages, bonuses, incentives and other benefits such as health benefits, holiday allowances, meal allowances, leave allowances and etc. There are compensation payments that are directly related to performance such as wages or salaries, bonuses, commissions (Erdiansyah, 2019).

In Wahyu's quote, according to Mangkunegara, (2017) states employee performance is the result of work in quality and quantity achieved by an employee in carrying out tasks in accordance with the responsibilities given by the company to employees (Tude Wahyu Wira, Anak Agung Dwi, 2022)

Table 1. Data on the Number of Employees of PT. Indohealth Pekanbaru 2018 - 2022

Year

Number of employees at the beginning of the

year

Number of employees

entered

Number of employees

leaving

Number of employees at the end of the

year

2018 43 - 2 41

2019 41 3 1 43

2020 43 1 5 39

2021 39 1 3 37

2022 37 - 3 34

Source: HRD Data & Adm PT. Indohealth 2022

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From the table above it can be seen that the rate of turnover of employees from year to year over the past five years is very high. In general, employee growth is quite good, but stability is still lacking.

Table 2. Data on PT. Indohealth Pekanbaru

Month Target (IDR) Achievements (IDR) Percentage (%)

March 1,000,000,000 825,000,000 82.5

April 1,000,000,000 824,571,000 82.47

Mai 1,000,000,000 823,425,000 82.34

June 1,000,000,000 819,500,000 81.95

July 1,000,000,000 820,325,000 82.03

Source: PT. Indosehat HRD & Adm Data, 2022

From the table above it can be seen that the targets made by the company have never been achieved. This problem can be caused by the level of the community's economy from year to year has increased but the needs have also increased. The next cause can be due to decreased employee enthusiasm to sell company products due to compensation that is not as expected. So based on these initial data researchers are interested in doing this research.

In Andardinata, to produce employees who have high job satisfaction, companies must create conditions that can encourage employees to develop and improve their abilities and skills optimally. One of the efforts that must be taken is to provide satisfactory compensation. The amount of this compensation reflects the status, recognition, and level of fulfillment enjoyed by employees. If the compensation received by employees is getting better, and fulfilling the needs they enjoy more and more (Andardinata & Sulaeman, 2019)

RESEARCH METHODOLOGY

The method used in this research is quantitative (Bernabé-Moreno, 2018; Bernard dkk., 2021; Borrego, 2009; Bryman, 2007). In this study, researchers distributed questionnaires prepared using 5 alternative answers or responses to these questions (Carlson, 2020; Hurbain dkk., 2022). Selected respondents were asked to provide answers or responses by selecting one of the alternative answers provided.

The object of this research was carried out at PT. Indohealth Pekanbaru Riau Branch Office Jl. Prof. Mohd. Yamin, SH, No. 25A Pekanbaru City, Riau. The research population totaled 25 people, so the sample in this study were all employees of branch offices making it easier to conduct research and collect data to be used as research material in accordance with the research title.

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RESULT AND DISCUSSION

The results of the validity test can be seen in table 3 as follows:

From table 3 it can be seen that all items are positive and rcount > rtable, so it can be concluded that all statement items are valid, thus all statements in this study are feasible to use and accept.

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Reliability Test

The reliability test was carried out on question items that were declared valid. A variable is said to be reliable or reliable if the answers to questions are always consistent. the reliability of the instrument is intended to see the consistency of the answers to the statement items given by the respondents, the reliability is calculated using the formula “Cronbach's Alpha'. Calculations were carried out with the help of the SPSS program computer. A factor is declared reliable if the Alpha coefficient is greater than 0.60 (Ghozali, 2005). The reliability for each variable results are presented in the following table.

Table 4: Reliability Test Results

Variable Cronbach's Alpha Reliability limits Information

Compensation (X) 0.754 0.60 Reliable

Job Satisfaction (Y) 0.754 0.60 Reliable

Source: Results of SPSS 2022 data processing

The reliability test results in table 4 show that the cronbach'salpha value for the incentive variable (X) = 0.754 > 0.60 and the performance variable (Y) has a cronbach's alpha value = 0.745 > 0.60 so it can be concluded that all instruments in this study are reliable and can be trusted because the cronbach'salpha value is greater than the alpha coefficient value.

Classic assumption test

The classical assumption test is a way to find out whether the regression model obtained can produce a good linear estimator. Namely by carrying out normality and heterodasity tests. If it meets the classical assumptions, it means that the regression model is ideal (unbiased) (Best Linear Unbias Estimator/BLUE).

Normality test

Testing the normality of the data is carried out on the regression model which will be tested by looking at the normal probability-plot of regression graph of standardized residuals. If the data spreads away from the diagonal line, it can be ascertained that the data distribution is not normal. Conversely, if the data distribution lies around the diagonal line and follows the direction of the diagonal line, then the data meets the assumption of normality. The results of the data normality test in this study are shown in the following figure:

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Figure 1 Data Normality Test

Based on the graphic image above, the normal plot at the output of the data normality test can be concluded that the normal plot graph shows that the dots spread around the diagonal line, and the distribution follows the diagonal line. So this graph shows that the regression model is feasible to use because it meets the assumption of normality.

Heteroscedasticity Test

Heteroscedasticity is the occurrence of variance differences from one residual observation to another. One way to determine the existence of heteroscedasticity can be done by looking at whether there is a certain pattern on the scatterplot graph between the dependent (bound) variable and its residuals. If the graph indicated by the dots forms a certain pattern, then heteroscedasticity has occurred and if the pattern is random and spread out, then heteroscedasticity does not occur. The test results can be seen in the following figure:

Figure 2. Scatter Plot of Heteroscedasticity Test Results

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Figure 2 above shows that the data points do not form a certain pattern (random pattern). Thus it can be concluded that the regression model in this study is heteroscedasticity free.

Simple Linear Regression Analysis

Simple linear regression analysis is a linear relationship between one independent variable (X) and the dependent variable (Y). This study uses SPSS assistance, where the acquisition values a and b are as shown in the table below:

Table 5. Results of Simple Linear Regression Analysis

Model

Unstandardized Coefficients

Standardized

Coefficients t Sig.

B std. Error Betas

1 (Constant) 27,777 7,735 3,591 001

Compensation 0.587 0.104 0.711 5,623 .000

Dependent variable: Job Satisfaction

From table 5 above, a simple linear regression equation can be formulated in this study:

Y = 27.777 + 0.587X

So that from the regression equation model above it can be explained as follows:

A constant value of 27.777 means that if the incentive variable (X) is worth 0 then employee job satisfaction at PT. Indohealth Pekanbaru is 27.777 when the independent variable (X) is considered constant.

The regression coefficient of the incentive variable is 0.587 indicating the magnitude of the influence of the compensation variable on job satisfaction. The positive sign indicates a positive direction of the relationship, which means that for every 1 unit increase in compensation, job satisfaction will increase by 0.587 assuming other variables are held constant. This confirms that if PT. Indohealth Pekanbaru increases compensation so that employee job satisfaction will increase by 0.587.

The coefficient of determination

The coefficient of determination (R2) is used to measure how far the model's ability to explain the dependent variable. If R2 is close to 1, then the independent variable has a fairly strong positive relationship to the dependent variable. Following are the results of data processing using SPSS which can measure the ability of the independent variables in explaining the dependent variable, namely as follows:

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Table 6. Results of the coefficient of determination (R2) Summary model b

Model R R Square Adjusted R Square std. Error of the Estimate

1 .711a 0.505 0.489 8.07438

a. Predictors: (Constant), Compensation b. Dependent Variable: Job Satisfaction Source: Results of SPSS 2022 data processing

Based on table 6 above, it can be explained that the ability of the independent variable in explaining the dependent variable is 0.505 or 50.5%, which means that the effect of the compensation variable on employee job satisfaction is 50.5% while the remaining 49.5% is influenced by other variables not examined in this study. This.

T test

The t test is used to determine whether each independent variable partially has a significant effect on the dependent variable, namely the independent variable (compensation) partially on the dependent variable (job satisfaction).

The test criteria are:

H0 = 0 means that partially there is no positive and significant effect of the independent variable on the dependent variable.

H0 ≠ 0 means that partially there is a positive and significant influence of the independent variable on the dependent variable

Decision making criteria:

Ha is accepted if tcount>ttable at α 0.05 H0 is accepted if tcount <ttable at α 0.05 The test results are:

The error rate (α) = 5% and degrees of freedom (df) = n-2, n= the number of samples is 33 and k= the number of variables used is 2, then (df) = 33-2=31. The t test is a two-way test, so the ttable used is ttable (0.05: 31) = 2.039

Table 7 . T-test results

Model

Unstandardized Coefficients

Standardized

Coefficients t Sig.

B std. Error Betas

1 (Constant) 27,777 7,735 3,591 001

Compensation .587 .104 .711 5,623 .000

a. Dependent Variable: Job Satisfaction Source: Results of SPSS 2022 data processing

Table 7 shows that the tcount of the compensation variable is 5,623 while the ttable value is 2,039, so that tcount > ttable (5,623> 2,039) so it can be concluded that

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the compensation variable affects employee job satisfaction at PT. Indohealth Pekanbaru.

CONCLUSION

The average response of respondents to the compensation variable (X) is 3.63 which is in class intervals from 3.41 to 4.20, this shows that the recapitulation of responses to the compensation variable (X) is in agreement. The average response of respondents to the variable job satisfaction (Y) is 3.44 which is in class intervals from 3.41 to 4.20, this shows that the recapitulation of responses to the variable job satisfaction (Y) is in agreement. Based on the results of a simple linear regression analysis using SPSS assistance, the equation is Y = 27.777 + 0.587X, meaning that if X

= 0/ without compensation, then the performance (Y) that occurs is 27.777 and if there is an increase of 1 unit of compensation, then job satisfaction will increased by 0.587 assuming other variables are held constant.

The value of the coefficient of determination (R2) in this study is 50.5%, which means that the compensation variable affects the job satisfaction variable at PT.

Indohealth Pekanbaru, with an effect of 50.5%, while the remaining 49.5% is influenced by other variables not examined in this study. Based on the results of the t test using the SPSS program, a tcount of 5.623 will be obtained, when compared with a ttable value of 2.039, so that tcount>ttable (5.623>2.039) so that it can be concluded that the compensation variable affects employee job satisfaction at PT. Indohealth Pekanbaru.

Researcher's Suggestion PT. Indohealth Pekanbaru is more careful in giving salary promises, and calculates them more carefully, so that employees who work are satisfied with the work they are doing and are more enthusiastic, so that in the end it will be more profitable for PT. Indohealth Pekanbaru, but if employees continue to be disappointed with promises, it will have a negative impact on the progress of the company.

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