View of Job Satisfaction as a Mediator of Compensation and Motivation on Employees Performance

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71

JKBM (Jurnal Konsep Bisnis dan Manajemen), 10 (1) November 2023

JKBM

(JURNAL KONSEP BISNIS DAN MANAJEMEN)

ISSN 2407-2648 (Print) 2407-263X (Online), DOI 10.31289/jkbm.v10i1.10556 Available online http://ojs.uma.ac.id/index.php/bisman

Job Satisfaction as a Mediator of Compensation and Motivation on Employees Performance

Diandra Fachiroh^1)*, Andriyastuti Suratman¹⁾

1)Management Study Program, Faculty of Business and Economics, Indonesian Islamic University, Yogyakarta, Indonesia

Submitted : 12-10-2023; Reviewed : 23-11-2023; Accepted : 23-11-2023

*Coresponding Email: [email protected] Abstract

This study is intended to understand how job satisfaction acts as a mediator in influencing the relationship between compensation and motivation to employee performance. Pertamina Hospital Cirebon was chosen as the object of the study. A quantitative approach was used in this study, with data collection through questionnaires using Google Form. The population amounted to 199 and the sample used was 150 people. The sampling method used was purposive random sampling, with the criteria that employees have the status of specific time workers (PWT) and non-specific time workers (PWTT). Data analysis is validity and reliability test, classical assumption test, descriptive statistical analysis, simple and multiple linear regression analysis, and sobel test using SPSS software version 25. The results showed that both compensation and motivation have a positive and significant effect on employee performance and job satisfaction. Job satisfaction has a positive and significant effect on employee performance. In addition, this study indicates that job satisfaction can mediate the relationship between compensation and moti-vation to employee performance.

Keywords: Compensation; Employee Performance; Job Satisfaction; Motivation

How to Cite: Fachiroh, D. & Suratman, A. (2023). Job Satisfaction as a Mediator of Compensation and Motivation on Employees Performance. JKBM (Jurnal Konsep Bisnis dan Manajemen). 10 (1): 71-85

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INTRODUCTION

The achievement of organizational success relies significantly on the pivotal role of human resources. Besides proficiently managing resources, enhancing employee performance is also a highly pertinent factor in boosting company competitiveness (Paramita &

Supartha, 2022). Employee performance includes the implementation of tasks in accordance with the time limit set, employee abilities, and effectiveness and efficiency in comp- leting work (Srimulyani et al., 2023).

Hospitals play a very important role in providing comprehensive health services, supporting educational and research activities, and serving as public health centers in their region. Thus, it is fitting for hospitals to uphold the caliber of their workforce and sustain optimal performance. The performance of hospital employees significantly influences the quality of services rendered by the institution. Consequently, the direct impact of managing and enhancing employee performance in hospitals extends to the services offered and, ultimately, shapes public trust and perceptions of the hospital.

Pertamina Cirebon Hospital, a government-owned type C facility in Cirebon Regency, focuses on health services. Employees of Pertamina Cirebon Hospital are expected to have the knowledge, competence, and skills to enhance hospital services. The hospital empha- sizes the importance of employee performance as a key indicator for achieving its vision and mission. Recognizing the value of job satisfaction in optimizing performance, the company places special emphasis on factors like compensation and motivation to enhance overall job satisfaction.

To enhance performance to the fullest extent, employees need trigger factors to im- prove their performance. One of the triggers is to provide compensation that meets employee expectations (Pangarso et al., 2018). The compensation employees receive is a re- flection of the value of their work, and it can influence the performance of the employees (Widjaja, 2022). Performance and compensation are two things that are interrelated with each other (Puspitaria & Hendarsjah, 2022).

The compensation offered by the company affects the degree of employee performance (Katidjan et al., 2018). Improving employee performance can be attained through providing compensation (Bimantoro & Swasti, 2023). If the compensation provided to employees is appropriate and fair, then this will contribute to improving their performance.

This is corroborated by the findings of multiple prior research studies, which indicate that compensation positively and significantly influences employee performance (Aji & Rey-

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zak, 2021; Bimantoro & Swasti, 2023; Elisa et al., 2022; Maizar et al., 2023). Increased compensation levels for employees have the potential to lead to improved performance. Based on several preceding studies, the first hypothesis is articulated as follows:

H1: Enhancing compensation can significantly impact on employee performance

Besides compensation, motivation potentially impacts employee performance (Arm- strong, 2020). Work motivation in employees is needed, because motivation is part of human psychological needs that can ignite enthusiasm and spur individuals to work dili- gently. Motivation is a force that emanates from internal (intrinsic) and external (extrin- sic) sources, striving to satisfy various needs and wants (Hardiyansyah et al., 2023). Every employee needs strong motivation, so that they are motivated to approach their work with enthusiasm, passion, and dedication (Sukmayuda et al., 2019). Motivation represents an essential factor that inspires individuals to deliver their optimal performance (Jain et al., 2019). The work motivation factor has the highest impact on employee performance because workers are serious in carrying out work activities and have targets that have been set (Febriansyah & Kasmir, 2022). Providing good motivation will encourage employee behavior in achieving superior performance. This is consistent with earlier research carried out by (Anwar & Budi, 2018; Pasulu et al., 2023; Rita et al., 2018; Sukmayuda et al., 2019), that motivation significantly influences employee performance. Based on several preceding studies, the second hypothesis is articulated as follows:

H2: Enhancing motivation can significantly impact on employee performance

Employee satisfaction entails a positive response to various job aspects, encomp- assing working conditions and the feedback supplied by the company. Experienced job satisfaction is crucial as it can impact both employee and company performance. When employees feel happy and satisfied with the place or for whom they work, their performance will be better and meet company standards (Janti et al., 2023). Job satisfaction can help employees to attain their individual and career objectives (Pramudena et al., 2021). Yuen et al., (2018) said that an employee with high job satisfaction will excel comp- ared to coworkers lacking job satisfaction. There is a significant correlation between job satisfaction and employee performance. This aligns with earlier investigations by (Arya Janti et al., 2023; Pramudena et al., 2021; Prissilia et al., 2023; Rinny et al., 2020; Yuen et al., 2018), which illustrates that job satisfaction has a positive and significant impact on performance. In accordance with various prior studies, the H3 is articulated as follows:

H3: Enhancing job satisfaction can significantly impact on employee performance

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Job satisfaction may be defined as a positive response of employees to all aspects of their work including working conditions and feedback provided by the company. Job satisfaction is notably affected by compensation, which serves as a crucial factor (Ramlah et al., 2021). Organizations are required to offer suitable compensation to their workforce in recognition of their dedication, contributions, and accomplishments. This practice not only instills a sense of value among employees but also fosters job contentment and loyalty to the organization (Murtiningsih, 2020). Compensation demonstrates a substantial influence on job satisfaction, as observed by (Baqi & Indradewa, 2021; Ramlah et al., 2021; Sa- man, 2020). Saman (2020) argues that increasing compensation can increase employee job satisfaction. This research was conducted to strengthen pre-existing research, so the fourth hypothesis is articulated as follows:

H4: Enhancing compensation can significantly impact on job satisfaction

Motivation helps employees to stay focused on their personal goals and achieve- ments. Motivation can encourage employees to work optimally and do wholeheartedly to get meaningful job satisfaction. Motivation can increase energy which will lead to higher job satisfaction (Rosalia et al., 2020). Motivation can be one of the most important ways to shape job satisfaction and influence employee performance (Basalamah & As’ad, 2021).

To ensure employee job satisfaction, it is crucial for the company to fulfill employees' needs and expectations, recognize their talents and skills, and provide opportunities for growth and development (Pancasila et al., 2020). The connection between motivation and job satisfaction has been explored in various earlier research studies, that motivation exerts a significantly impact on job satisfaction (Basalamah & As’ad, 2021; Pancasila et al., 2020; Rosalia et al., 2020; Sumantri et al., 2022). This study was undertaken to reinforce existing research; thus, the fifth hypothesis is stated as follows:

H5: Enhancing motivation can significantly impact on job satisfaction.

Compensation encompasses all forms, whether material or non-material, given to employees as recognition for their efforts and contributions to the company. To attain job satisfaction among employees, the company should fulfill employee needs and expectations, recognize their talents and skills, and provide opportunities for advancement and growth (Komang et al., 2018). The size of compensation significantly impacts employee job satisfaction, which in turn affects their productivity and performance. Previous research, including studies by (Hartono & Nurwati, 2021; Juliarti et al., 2018; Komang et al., 2018; Zulher et al., 2020), has confirmed that compensation positively and significantly

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influences performance by way of job satisfaction. This study was undertaken to reinforce existing research, H6 is stated as follows:

H6: Job satisfaction mediates the impact of compensation on employee performance Motivation is the energy that can provide individuals with the drive to innovate and achieve common goals. Proper motivation has the potential to encourage employees to re- ach a level of job satisfaction that can positively impact their performance. Any increase in motivation and job satisfaction will enhance the performance of employees (Iqbal et al., 2021). Robbins in Hartono & Nurwati (2021), explains that employees will be motivated to put in maximum effort when they believe that there will be organizational rewards when they produce good performance appraisals. When employees feel motivated, they tend to be more dedicated and strive to achieve their work goals, which in turn can increase job satisfaction. Several prior studies, conducted by (Dewi et al., 2019; Hartono &

Nurwati, 2021; Iqbal et al., 2021; Raka et al., 2018), have validated the link between motivation, job satisfaction, and performance. Based on several preceding studies, the hypothesis seven is stated as follows:

H7: Job satisfaction mediates the impact of motivation on employee performance

Based on the explanation above, the research objective is to understand the impact of compensation and motivation factors on job satisfaction, and their subsequent effect on employee performance, especially at Pertamina Cirebon Hospital. The research employed the model depicted in Figure 1, which illustrates compensation and motivation is predicted to positively impact on employee performance and job satisfaction; job satisfaction predicted positively impact on employee performance; and there is prediction that job satisfaction serves as a mediator for the impact of compensation and motivation on employee performance.

Figure 1. Research model

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RESEARCH METHODS

A quantitative approach was used in this study, with a questionnaire being the prin- cipal tool for collecting primary data. Data was gathered through a questionnaire distribut- ed via Google Form. A sample of 150 employees was drawn from a total population of 190 employees of Pertamina Cirebon Hospital. The sampling method used is purposive random sampling with the criteria of employees who have the status of indefinite time workers (PWTT) and specific time workers (PWT).

The Likert scale is used for measuring each answer in the questionnaire, where point 1 represented strong disagreement with the lowest score, point 2 indicated disagreement, point 3 signified a neutral response, point 4 denoted agreements, and point 5 represented strong agreement. Employee performance variable’s questionnaire items were measured by indicator: 1) number of jobs, 2) quality of work, 3) punctuality, 4) presence, 5) cooperation ability. Compensation measured by indicator: 1) salary, 2) wages, 3) incentives, 4) allowances, 5) facilities. Motivation measured by indicator: 1) physiological needs, 2) need for security, 3) social needs, 4) self-esteem needs, 5) need for self-actualization. Job satisfaction measured by: 1) payment, 2) the work itself, 3) work colleagues, 4) job promotion, 5) supervision. The data analysis methods used are: 1) validity and reliability test; 2) classical assumption test; 3) descriptive statistical analysis; 4) t test, simple and multiple linear regression analysis, and sobel test. Data analysis methods were executed utilizing the SPSS version 25 program.

RESULTS AND DISCUSSION

Utilizing the Pearson product-moment correlation coefficient as a means to assess data validity, it can be seen that the research instruments show that all statement items have validity coefficients that exceed the critical value (r table) at a significance level of 0.05.

So, all statements were valid. Moreover, in the reliability testing, all variables achieved cronbach alpha values exceeding 0.6, thus confirming the data's reliability (Table 1)

Table 1. Reliability Test Result α

Compensation 0.829

Motivation 0.850

Employee

Performance 0.853

Job Satisfaction 0.909

Source: processed by author (2023)

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Table 2. Normality Test Result

Unstandard. Residual

N 150

Normal

Parameters^a,b Mean .0000000

Std. Deviation 3.867062

Most Extreme

Differences Absolute .070

Positive .070

Negative -.067

Test Statistic .070

Asymp. Sig. (2-tailed) .069

The outcomes of the Kolmogorov-Smirnov normality test yielded a Sig value of 0.069.

Given that the p-value exceeds the alpha level (0.069 > 0.05), it can be inferred that the data in this study exhibit normal distribution (Table 2).

Table 3. Heteroskedasticity Test Result

Type Unstandardized

Coeff. Standardized Coeff. t Sig.

B Std. Error Beta

1 (Constant) 7,527 .437 5.237 .000

Compensation -,156 .089 -.220 -1.747 .085

Motivation -,001 .086 -.001 -.007 .995

Job Satisfaction -,034 .037 -.085 -.911 .364 Source: processed by author (2023)

The application of the Glejser method indicates that each independent variable has a significance value exceeding 0.05. This implies that none of the independent variables in this study exhibit symptoms of heteroscedasticity (Table 3).

Table 4. Multicollinearity Test Result

Tolerance VIF

Compensation 0.400 2.498

Motivation 0.405 2.469

Job Satisfaction 0.735 1.361

Table 4 illustrates that each independent variable possesses a tolerance value exceeding 0.1 and a VIF value below 10, suggesting no signs of multicollinearity among the independent variables in the model. Moreover, a descriptive statistical analysis was conducted to provide an overview of each variable measuring indicator, using a measurement scale range of 0.8. The average response from the participants for each variable indicator below (Table 5):

Table 5. Variable Descriptive Analysis

Variable Indicator Mean Interval

Compensation

Wages 3.97 High

Incentive 4.04 High

Salary 4.51 Very high

Allowance 3.99 High

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Continue Table 5. Variable Descriptive Analysis

Variable Indicator Mean Interval

Facilities 4.03 High

Motivation

Need for security 3.84 High Social needs 3.93 High Physiological needs 4.07 High Self-esteem needs 4.07 High Need for self-actualization 4.31 Very high Employee Performance

Number of jobs 4.20 High Quality of work 4.27 Very high

Punctuality 3.99 High

Presence 4.19 High

Cooperation ability 4.16 High Job Satisfaction

Payment 3,.78 High

The work itself 4.07 High Work colleague 4.25 Very high

Job promotion 4.02 High

Supervision 3.93 High

The salary indicator received the highest rating in compensation assessment, scor- ing 4.51. Likewise, the need for self-actualization indicator had the highest motivation assessment at 4.31. In terms of employee performance, the quality of work indicator scored the highest, with a rating of 4.27. Additionally, the work colleague indicator received the highest job satisfaction assessment, with a rating of 4.25. The results of hypothesis testing are displayed in Table 6.

Table 6. Hypothesis Test Result Type Unstandardized

Coeff. Standardized Coeff. t Sig.

B Std. Error Beta

1 (Constant) 21.914 2.315 9.466 .000

JS → EP .488 057 574 8.529 .000

2 (Constant) 25.508 2.344 10.882 .000

C → EP .433 .167 .287 2.592 .011

M → EP .350 .162 239 2.161 .032

3 (Constant) 20.505 2.718 7.543 .000

C → JS .522 .194 .294 2.695 .009

M → JS .438 .188 .254 2.332 .021

Table 6 affirms the validation of hypotheses H1, H2, H3, H4, and H5. Path analysis was utilized to assess how job satisfaction variables mediate the relationship between compensation and motivation on employee performance (Figure 2&3).

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Figure 2. Path analysis C - JS - EP Source: processed by author (2023)

Figure 3. Path analysis M - JS – EP Source: processed by author (2023)

The mediating effect indicated by the multiplication coefficient (ab) was tested using the Sobel test (t = ab/√sab). The outcomes of the Sobel statistical test (outlined in Table 7) confirm the acceptance of hypothesis H6 and H7.

Table 7. Sobel test result

Path t - test t - table (Sig. 0.05)

C → JS → EP 2.414 1.976

M → JS → EP 2.134 1.976

Discussion

The test results confirm the acceptance of H1, that the employee performance is positively and significantly impacted by compensation. It is indicated high and low performance can be impacted by the amount of the company's provision of compensation. From the aver-age value of descriptive statistical analysis, all compensation indicators get a fair- ly high average value, as well as employee performance. This indicates that Pertamina Ci- rebon Hospital ensures employees feel good compensation so that it has a significant impact on improving employee performance. When employees receive feedback consistent with their efforts, the feelings of belongingness and responsibility towards their work will also grow. Remuneration is a major motivational factor that can boost performance

JS

P(a) = 0.522

C EP

P(b) = 0.370

P(c) = 0.240

JS

P(a) = 0.438

M EP

P(b) = 0.370

P(c) = 0.188

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(Widjaja, 2022). Multiple researchers have reported a significant correlation between compensation and employee performance. This study aligns with earlier study carried out by (Aji & Reyzak, 2021; Bimantoro & Swasti, 2023; Elisa et al., 2022; Katidjan et al., 2018;

Maizar et al., 2023).

The test results confirm the acceptance of H2, that motivation positively and significantly enhances employee performance. This indicates an increase in employee motivation levels that could potentially lead to improved performance. At Pertamina Hospital the company always supports employees in matters of motivation through incentives and psychological appreciation. According to the mean value of descriptive statistical analysis, the highest motivation indicator is self-actualization which shows the statement that workers have the ambition to be the best among their colleagues. This implies that when employees perceive the self-actualization indicator effectively, there will be an enhancement in employee performance. This research further supports prior findings, indicating that motivation has a positive and significant partial impact on employee performance (Anwar &

Budi, 2018; Febriansyah & Kasmir, 2022; Pasulu et al., 2023; Rita et al., 2018; Sukmayuda et al., 2019).

The examination of H3 revealed a positive and significant influence of job satisfaction on employee performance. This implies that if employees feel satisfied, they will automa- tically work optimally to attain objectives. Employee performance is closely connected to the degree of job satisfaction they experience while carrying out their main duties and res- ponsibilities (Hajiali et al., 2022). At RS Pertamina, respondents are satisfied in their work because of the closeness between coworkers and high collaboration among coworkers. Re- lationships between team members can increase the effectiveness of group work and have a beneficial effect on overall performance. This makes the atmosphere more pleasant and productive. The outcomes of the research conducted by (Janti et al., 2023; Pramudena et al., 2021; Prissilia et al., 2023; Rinny et al., 2020; Yuen et al., 2018) are in line with the author's findings, namely there is a notable impact of job satisfaction on employee performance.

The test for H4 indicated that at Pertamina Cirebon Hospital, job satisfaction is positively and significantly impacted by compensation. The in-depth results of this research show that good compensation will result in good job satisfaction as well. Providing compensation to employees can increase a sense of satisfaction so that it motivates employees to continue to grow. The company that the author researched also applies a compensation

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system that is adjusted to each group such as length of service, position, and employee status. The presence of compensation in the form of health insurance, overtime bonus, work leave, out-of-town services, and adequate office facilities can support the smooth running of employees’ work towards accomplishing effective and efficient goals. Compensation that is considered fair and transparent can increase the perception of a sense of justice a- mong employees. The research findings strengthen previous research by (Baqi & Indra- dewa, 2021; Murtiningsih, 2020; Ramlah et al., 2021; Saman, 2020), that compensation has a positive and significant effect on job satisfaction.

The test results confirm the acceptance of H5, that job satisfaction is positively and significantly impacted by motivation. This means that when employees have high motivation about work, job satisfaction can be achieved properly as well. Motivation holds great significance as it serves as the driving force for employees, inspiring them to exert effort and enthusiasm in order to attain elevated levels of work productivity (Basalamah & As’ad, 2021). Providing motivation must be according to portion and right on target. Given that each of these individuals has a different level of priority needs, management also needs to pay attention to the background of the workers. The research findings strengthen previous research by (Basalamah & As’ad, 2021; Pancasila et al., 2020; Rosalia et al., 2020; Sumantri et al., 2022).

The H6 test accepted the involvement of job satisfaction as a mediator in the relationship between compensation and employee performance. Considering the influence of compensation on job satisfaction is crucial for enhancing performance and retaining employees. So as to provide reasonable compensation, companies need to consider the ap- propriateness of feedback to employees to match what has been sacrificed to the company.

The re-search findings strengthen previous research by (Hartono & Nurwati, 2021; Juliarti et al., 2018; Komang et al., 2018; Zulher et al., 2020), that compensation indirectly and signifi-cantly influences employee performance by way of job satisfaction. Employees who see a direct link between their work efforts and the compensation received may be more motivated to achieve better results.

The H7 test accepted the mediating role of job satisfaction in the connection between motivation and employee performance. Motivation is a process that encourages a person to achieve satisfaction, which means that when individual needs are met by certain factors, individuals will try their best to achieve organizational goals through optimal work results. The staff at Pertamina Cirebon Hospital perceive motivation at a high average value

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for each indicator. Similarly, the average values for variables job satisfaction and employee performance are also high. This suggests that substantial compensation can lead to an enhancement in employee performance, thereby influencing overall performance effectiveness. The author's study further bolsters the findings of research indicating that work motivation indirectly affects employee performance by way of job satisfaction (Dewi et al., 2019; Hartono & Nurwati, 2021; Iqbal et al., 2021; Raka et al., 2018).

CONCLUSION

The seven hypotheses tested in this study were all proven, that can be summarized as follows: Enhancing compensation and motivation can increase employee performance and job satisfaction; enhancing job satisfaction can increase employee performance; job satisfaction can mediate the relationship between compensation and motivation to performance. In improving compensation perception, companies can continue to maintain a salary payment cycle that is always on time. In addition, the company needs to fix and create a wage scale system by building a fair and transparent wage scale system. In supporting increased motivation, the company can provide work achievement demands among employees so that they are more eager to achieve targets and be the best among coworkers.

In addition, companies need to increase opportunities for skill development and education. This can be done by: planning employee career routes, providing job rotation opportunities, holding internal promotions, creating personal development plans, and mentor- ing programs. In improving employee performance, companies should focus on ensuring that employees are punctual in their work attendance. In addition, companies need to communicate their goals. In supporting employee job satisfaction, companies must create a comfort-table work climate with adequate facilities and infrastructure. Relationships between co-workers can be further fostered so that they can coordinate with each other in achieving goals. In addition, the company must pay more attention to the existing bonus system, especially when employees work overtime.

The study's sample is confined to a single subject, which limits its capacity to fully represent the research findings within this specific research setting. While this study cons- tructs a framework for employee performance based on the employed theory, there re- mains the potential to incorporate additional performance-influencing factors in future research.

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