Influence of Employee Loyalty and Compensation on Employee Performance at Taraphone Shop Surabaya

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Influence of Employee Loyalty and Compensation on Employee Performance at Taraphone Shop Surabaya

Branch

Ike Amanda Sari

Departement of Management, Narotama University Surabaya Jl. Arief Rachman Hakim No. 51 Surabaya, Indonesia

Abstract

Resources are everything that is the company's asset to achieve its goals. Human resources are a central and important sector in order to achieve goals in a company, because with the skill skills of workers and the quality of human resources can move the company well and properly. This research aims to determine the influence of Employee Loyalty and Compensation on Employee Performance. The population and sample of this research is all employees of Taraphone Shop Surabaya Branch which numbered 55 people. Research method using Multiple Regression Analysis method with formula KA = -0.953 + 0.856 L + 0.194 K + e. The results show that employee loyalty and compensation variables have a simultaneous effect on employee performance at Taraphone Shop Surabaya branch

Keywords :

Compensation, Employee loyalty, Employee performance.

1. Introduction

1.1. Research Background

A company can survive if in all its activities it is supported by high loyalty from its employees. Loyalty will grow his loyalty and responsibilities to the best of his best, always maintaining the good name of the company in which he works.

Companies with high employee displacement rates show low employee loyalty. Low employee loyalty can be caused by an error in the withdrawal of new employees but can also be caused at the time of the company's process.

In fact all those people work to make ends meet. Sufficient income will provide satisfaction and happiness in work. The high level of compensation according to the type of work will affect and determine whether or not an employee is doing his or her job.

Taraphone Shop is a company engaged in mobile retail and has 6 branches spread across Surabaya, Malang and Bali. In the first year of its pioneering, 2015 only employed 3 employees who were still online and cash on delivery (COD). In 2016 trying to open 1 branch then over time in 2020 now has 6 branches and 55 permanent employees.

Table 1. Number of Employees Data

Years Amount

2015 3

2016 10

2017 12

2018 25

2019 35

2020 55

Source: Taraphone Shop (2020).

Problems arising in the field such as employees arriving late, cheating by raising the price of goods that donot match the price( fraud ), fraud through third parties, then the number of scams on behalf of Taraphone Shop through the Instagram app and Tokopedia make the company more careful in recruiting employees.

One of the problems that occurs in Taraphone Shop Surabaya branch is that employees often arrive late.

Although an employee is very superior in the field he or she is involved in, but if he has a habit of arriving late then the productivity of other employees will be disrupted. In general, every company prefers employees who are less proficient in work but diligent to go to the office every day, rather than employees who are very capable of working but often do not enter work.

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38 1.2. Research Objectives

The objectives that are to be achieved in this study are:

To know the influence of employee loyalty on employee performance at Taraphone Shop Surabaya branch.

1. To know the effect of compensation on employee performance at Taraphone Shop Surabaya branch.

2. To know the influence of employee loyalty and compensation on employee performance at Taraphone Shop Surabaya branch.

1.3. Library Overview 1.3.1. Employee Loyalty

According to Hasibuan (2003) loyalty is reflected by the willingness of employees to look after and defend organizations outside and in the work of unaccountable people. According to Kadarwati (2003) confirmed that the factors that affect employee loyalty are the absence of work facilities, welfare reviews, work atmosphere, and wages. Employee loyalty indicators according to Kadarwati (2003) are as follows:

a. Obedience/compliance b. Responsibilities c. Devotion d. Honesty

1.3.2. Compensation

According to T Hani Handoko (2016) compensation is everything employees receive in return for their work. Compensation programs are also important to companies because they reflect the organization's efforts to maintain human resources. According to T Hani Handoko (2016) compensation is everything employees receive in return for their work. Compensation programs are also important to companies because they reflect the organization's efforts to maintain human resources. The compensation indicators according to Mondy R. Wayne (2008) are as follows:

a. According to Marwansyah (2019) compensation is the entire reward given to employees in return for their services or contributions to the organization. Financial compensation, consisting of direct and indirect compensation

b. Non-financial compensation, consisting of work-related and environmentally related.

1.3.3. Employee Performance

According to Stephen P. Robbins (2003) that employee performance is as a function of the interaction between ability and motivation. The success of the employee performance that the organization has achieved will be influenced by the level of performance of the employees individually or in groups. Yuwalliatin employee performance indicators Anwar Prabu Mangkunegara (2006) are as follows:

a. Quantity of work b. Quality of work c. Cooperation d. Knowledge of work e. Activity planning

1.3.4. Conceptual Framework

Figure 1. Conceptual Framework

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39 1.3.5. Hypothesis

Based on the research frame of thought, the hypothesis to be tested in the study is as follows:

H1 : There is a significant influence of employee loyalty variables on employee performance.

H2 : There is a significant effect of variable compensation on employee performance.

H3 : There is a significant influence of employee loyalty variables and compensation on employee performance.

2. Methodology

2.1. Population and Samples

The population in this study is all employees taraphone shop Surabaya branch, the number of employees in Taraphone Shop Surabaya branch is 55 employees. In this study, because the population observed is relatively small because the number of employees taraphone shop surabaya branch is less than 100 people so in order to produce valid data then the population is used as a sample (Suharsimi Arikunto, 2017). Thus the existing population is taken as the object of the study that is studied and which is treated as a sample as well.

Since the entire population is used as a respondent, there is no need for sampling. In other words, the study used data obtained from the census process on the entire population.

2.2. Research Location and Time

The author conducted the research at Taraphone Shop Surabaya branch located in Gayung Kebonsari street lotus regency shop block D no 27, precisely in front of RsMM East Java, conducted in January 2020 until completion.

2.3. Multiple Linear Regression Analysis

This study uses multiple linear regression analysis, because this study is used to find out how Employee Loyalty (X1), Compensation (X2) affects Employee Performance (Y). According to (Sugiyono, 2008) multiple linear regression analysis is a linear relationship between two or more independent variables (X1, X2) with dependent variables (Y). multiple linear regression equations in this study use the following formulas:

Y=α+b1X1+b2X2+e Where:

Y= Dependent variable i.e. Employee Performance α= Constants

b= Regression coefficient X1= Employee loyalty X2= Compensation e = Standard Error 3. Result and Discussion 3.1. Description of Respondents

Table 2. Respondent Data by Gender

Number of Genders Number of Respondents Percentage

Male 32 60%

Women 22 40%

Total 54 100%

Source: Author, Primary Data Processed (2020)

Table 2 showed that the gender of the respondent was more dominated by 32 men or 60% while women were 22 or 40%.

Table 3. Respondent Data By Age

Age Number of Respondents Percentage

21 – 30 44 81%

31 – 40 9 16%

41 – 50 1 3%

>50 0 0%

Total 54 100%

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In table 3 shows that respondents working at Taraphone Shop Surabaya branch aged 21 - 30 years as many as 44 people by 81%, age 31 - 40 years as many as 9 people by 16%, and age 41 - 50 years as much as 1 person by 3%.

3.2. Validity Test and Reliability Test 3.3.1 Validity Test

This test is done to see if the data obtained in the field is really worth researching or not. In this test use validity test and reliability test.

Table 4. Employee Loyalty Variable Validity Test Results

Variable Indicators R count R table Description

X1.1 0,812 0,268 Valid

X1.2 0,843 0,268 Valid

X1.3 0,814 0,268 Valid

X1.4 0,845 0,268 Valid

X1.5 0,860 0,268 Valid

Employee Loyalty

X1.6 0,880 0,268 Valid

X1.7 0,844 0,268 Valid

X1.8 0,646 0,268 Valid

X1.9 0,528 0,268 Valid

X1.10 0,830 0,268 Valid

Based on the table above the data processing results can show that all statement items about employee loyalty variables (1 – 10) are valid. This can be seen from the table's r value to the significance level of 0.05 is

0.268 Because the rvalue count is greater than the r valueof the table (r count > rtable)thus, any item statement about the employee loyalty variable is valid.

Table 5. Compensation Variable Validity Test Rest ts

X2.1 0,680 0,268 Valid

X2.2 0,711 0,268 Valid

X2.3 0,672 0,268 Valid

Compensation X2.4 0,774 0,268 Valid

X2.5 0,800 0,268 Valid

X2.6 0,776 0,268 Valid

X2.7 0,750 0,268 Valid

X2.8 0,535 0,268 Valid

X2.9 0,349 0,268 Valid

Based on table 5 data processing results can show that all statement items about the Compensation variable (1 – 9) are valid. This can be seen from the rvalue of the table to the significance level of 0.05 is 0.268.

Because the rvalue count is greater than the rtabek value(r count > rtable)thus, any item statement about the compensation variable is valid.

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Table 6. Employee Performance Variable Validity Test Results

Y.1 0,821 0,268 Valid

Y.2 0,781 0,268 Valid

Y.3 0,635 0,268 Valid

Y.4 0,748 0,268 Valid

Y.5 0,821 0,268 Valid

Employee Performance

Y.6 0,847 0,268 Valid

Y.7 0,766 0,268 Valid

Y.8 0,511 0,268 Valid

Y.9 0,431 0,268 Valid

Y.10 0,875 0,268 Valid

Based on table 6 data processing results can show that all statement items about employee performance variables (1 – 10) are valid. This can be seen from the r valueof the table to a significant level of 0.05 is 0.268.

Because the rvalue count is greater than the r value of the table (r count > r table) thus each item statement about the employee performance variable is valid.

3.3.2 Reliability Test

Table 6. Reliability Test Result Reliability Statistics Cronbach's Alpha N of Items

.976 29

Source : SPSS Output Data (2020)

The results of the reliability test against all variables with Cronbach's Alpha as seen in table 6 indicate that the value of Cronbach's Alpha > 0.6. It can therefore be concluded that all statements in this research instrument are reliabel.

4. Classic Assumption Test Results

The regression model in this study can be used for significant and representative estimation if the regression model does not deviate from the classic basic assumptions of regression in the form of normality and multicholinearity.

4.1. Normality Test

Normality testing in this study was conducted with the Kolmogorov-Smirnov tatistic test with a significance rate of 5% or more than 0.05. If P (probability) > 0.05 data is distributed normally. The full normality test results are presented in a nutshell in the table below.

Table 7. Normality Test Results One-Sample Kolmogorov-Smirnov Test

Unstandardized Residual

N 54

Normal Parametersa,b Mean .0000000

Std. Deviation 3.28027348

Most Extreme Differences Absolute .109 Positive .105 Negative -.109

Test Statistic .109

Asymp. Sig. (2-tailed) .157c

a. Test distribution is Normal.

b. Calculated from data.

c. Lilliefors Significance Correction.

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From asymp test results. Sig. (2-tailed) of 0.157 in table 7 indicates that the significance value for the regression model is greater than 0.05. This suggests that the similarities to the regression model in this study are said to be normal.

4.2. Multicholinearity Test

Table 8. Multicholinearity Test Results Coefficients^a

Unstandardized Coefficients Standardized Coefficients Collinearity Statistics

Model B Std. Error Beta Q Sig. Tolerance Vif

1 (Constant) -.953 2.709 -.352 .726

Loyalty .856 .122 .759 7.047 .000 .264 3.788

Compensation .194 .116 .180 1.673 .100 .264 3.788

a. Dependent Variable: performance Source : SPSS Output Data (2020)

Based on table 8 indicates that the VIF value is between 1 and 10. Thus it can also be stated that this regression model does not exist multicholinearity.

4.3. Test Heteroskedastisitas

Table 9. Heteroskedastisity Test Results Coefficients^a

1 (Constant) 6.492 1.793 3.620 .001

Loyalty -.138 .080 -.441 -1.710 .093 .264 3.788

Compensation .045 .077 .150 .582 .563 .264 3.788

a. Dependent Variable: Abs_RES Source : SPSS Output Data (2020)

Based on the results shown in table 9 that all free variables showed a value of significance greater than 0.05, so it can be concluded that all free variables in this study found no heteroskedasticity problems.

4.4. Hypothesis Test

1. Multiple Regression Test Results

To test the hypothesis used multiple regression model equations. The results of data processing with the help of SPSS are obtained regression results in the table below:

Table 10. Hypothetical Test Results Coefficients^a

Unstandardized Coefficients Standardized Coefficients

Model B Std. Error Beta Q Sig.

1 (Constant) -.953 2.709 -.352 .72

6

Loyalty(X1) .856 .122 .759 7.047 .00

0

Compensation(X2) .194 .116 .180 1.673 .10

0 a. Dependent Variable: Performance(Y)

Based on table 10, the regression equation model is obtained as follows: KA = -0.953 + 0.856 L + 0.194 K + e

8) Constants of -0.953 . This indicates if the loyalty and compensation variable is worth 0 then no employee performance occurs at all.

9) Loyalty regression coefficient, obtained by 0.856 with positive coefficient direction. This indicates that the Employee Loyalty variable (X1) increases by one unit, then the employee performance variable increases by 0.856 units.

10) Compensating regression coefficient, obtained by 0.194 with positive coefficient direction. This indicates that the Compensation variable (X2) increases by one unit then the employee performance variable increases by 0.194 units.

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43 2. Test Results F

The F statistical test is used to determine the effect of all independent variables included in the regression model together on dependent variables tested at a significance level of 0.05. If the probability value is smaller than 0.05 (P< 0.05) then H1 is accepted, whereas if the probability value is greater than 0.05 (P> 0.05) then H1 is rejected. Next the F test results are presented in the following table:

Table 11. Test Results F ANOVAa

Model Sum of Squares Df Mean Square F Sig.

1 Regression 3079.043 2 1539.522 137.677 .000 b Residual 570.290 51 11.182

Total 3649.333 53

a. Dependent Variable: Performance(Y)

b. Predictors: (Constant), Compensation(X2), Loyalty(X1) Source : Data Ouput SPSS (2020)

Based on table 11 it can be notedthat the value of F counts at 137,677 with a level of significance = 0.00

< α = 0.05. This means H1 is accepted or indicates a fit regression. Therefore employee loyalty variables and compensation have a simultaneous effect on employee performance

3. T Test Results

This test aims to find out the significant relationship of each individual independent variable to the dependent variable tested at a significance level of 0.05. If the probability value of t is smaller than 0.05 (P<

0.05) then H1 is accepted, whereas if the probability value is greater than 0.05 (P> 0.05) then H1 is rejected. The results of the t test analysis can be shown in the table as follows:

Table 12. T Test Results Coefficients^a

1 (Constant) -.953 2.709 -.352 .726

Loyalty .856 .122 .759 7.047 .000 .264 3.788

Compensation .194 .116 .180 1.673 .100 .264 3.788

a. Dependent Variable: performance Source: SPSS Output Data (2020)

Based on the data generated from the SPSS calculation, it can be known the result of the significance value for the t test on the Loyalty variable (X1) of 0.00 < 0.05. This means that loyalty variables (X1) have a significant effect on employee performance variables (Y). On the Compensation variable (X2) of 0.100 > 0.05.

This means that the Compensation variable (X2) has no significant effect on the Employee Performance variable (Y). Therefore, in both employee loyalty and compensation variables there is only one variable that has a significant effect on the Employee Performance variable (Y) which is the Employee Loyalty variable (X1).

4. R Test Results

This test aims to find out how much the ability of an independent variable explains its dependent variables. The results of the r test analysis can be shown in the table as follows:

Table 13. R Test Results Model Summary Model R R Square Adjusted R

Square

Std. Error of the Estimate 1 .919

a

.844 .838 3.34397

a. Predictors: (Constant), Compensation(X2), Loyalty(X1) Source : SPSS Output Data (2020)

Based on data from table 13 of Adjusted R Square,this shows that 83.8% of Employee Performance variables can be explained by loyalty and compensation variables, while the difference of 16.2% is explained by other variables not studied in this study.

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44 5. Discussion

a. The Effect of Employee Loyalty on Employee Performance

H1 = Data analysis results show that employee loyalty variables have a significant effect on employee performance variables partially, this has been proven by t test results with results of 0.00 (smaller than 0.05).

Thus, H1 is proven that there is a significant influence of employee loyalty variables on employee performance.

The results of this study are in line with Sayunus Adibowo's research (2012) which stated that loyalty has a positive effect on employee performance, it can be concluded that by increasing loyalty then performance will increase in real terms.

b. The Effect of Compensation on Employee Performance

H2 = The data analysis results show that the compensation variable does not significantly affect employee performance variables partially, this has been proven with a t test result of 0.100 (greater than 0.05).

As such, H2 is not proven which is because there is no significant effect of variable compensation on employee performance. The results of this study contradict research conducted by Anoki Herdian Dito (2010) which explained that compensation has a positive and significant effect on employee performance.

c. Effect of Employee Loyalty and Compensation on Employee Performance

H3 = Data analysis results from test f (ANOVA) show that loyalty and compensation variables have a simultaneous effect on employee performance. Thus, H3 is proven that there is a significant influence of loyalty variables and compensation on employee performance.

6. Conclusion

Based on the results of the research that has been done, it can be concluded that:

Employee loyalty has a partial effect on the performance of Taraphone Shop surabaya branch employees.

Compensation has no partial effect on the performance of Taraphone Shop surabaya branch employees.

Employee loyalty and compensation have a simultaneous effect on the performance of Taraphone Shop surabaya branch employees.

6.1 Advice

1. For The Company

Based on the distribution of respondents' answers through questionnaires that have been distributed to taraphone shop employees surabaya branch regarding employee loyalty, compensation and employee performance, it can be known that employees have followed all activities carried out by the company properly and correctly according to the direction given by the company. This can be seen from the average value of items obtained from descriptive analysis results, both employee loyalty, compensation and employee performance.

Therefore, in order for employee loyalty and compensation to have a continuous effect on employee performance, it is good for the company to constantly maintain and improve what has been done so that all can run properly and can provide good returns to the company.

But in particular, there needs to be even better improvement, based on the researchers' findings regarding employee loyalty variables at Taraphone Shop. The lowest trend is about putting the interests of the company first, which is better if adjusted to the amount of salary received by the employee in accordance with the responsibilities of each employee's own work.

2. For The Next Researcher

In this study, the variables used were employee loyalty and compensation. So, for further research, it is good to add less variables in this study, so that the research done will look more interesting. As for some good variables used as variable enhancers in this study are: work discipline variables, motivation, exercise peas well as work environment.

6.2 Limitations

1. Limitations of insight and science in selecting variables to use.

2. Some respondents refused to fill out questionnaires on the grounds of being busy working.

3. It is believed that the respondents who filled out the questionnaire did not match the reality in the field.

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Kadarwati, U. (2003). Hubungan Antara Persepsi Terhadap Upah dan Jaminan Sosial Dengan Loyalitas Kerja.

Universitas Muhammadiyah Surakarta.

Marwansyah. (2019). Manajemen Sumber Daya Manusia (5th ed.). Alfabeta. Mondy R. Wayne. (2008).

Manajemen Sumber Daya Manusia. Erlangga.

Stephen P. Robbins. (2003). Perilaku Organisasi. PT. Indeks Kelompok Gramedia.

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