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INDONESIA
Impak Amalan Modal Insan, Gaya Kepemimpinan, dan Tingkahlaku Warga Organisasi Terhadap Prestasi Pekerja Di Syarikat-Syarikat Pembinaan Pemilikan Sendiri Di Indonesia
Syafriyadi Miftahul Munir
Ph.D student, Universiti Sains Islam Malaysia, Email: [email protected]
Abstract
This study aimed to examine the factors that influence employee performance such as human capital practices, transformational leadership and organizational citizenship behaviour (OCB). This study uses a census approach, where all members of the population are made as respondents with a total of 233 employees in human capital department of state’s owned construction companies. Analysis approach in this research is descriptive statistical analysis and analysis of structural equation modelling (SEM). The results of this study found that there was a positive and significant impact of human capital practices on employee performance, transformational leadership on employee performance, and organizational citizenship behaviour (OCB) on employee performance. These results indicated that the better human capital practices, transformational leadership and organizational citizenship behaviour (OCB) of the company will increase and improve employee performance better. We do suggest for the future research to use the mediator such as work motivation between the factors that impact employee performance such as human capital practices, transformational leadership and organizational citizenship behaviour (OCB) and employee performance.
Keywords: Human Capital Practices, Transformational Leadership, Organizational Citizenship Behaviour, Employee Performance
INTRODUCTION
In 2014, Mr. Joko Widodo was elected as the 7th President of Indonesia for the second period, the government announced The Indonesian Mid-term Development Plan / RPJMN 2015-2019 named as NAWACITA (The Nine Goals) (Source: Ministry of National Development Planning/BAPPENAS RI, 2015). One of the most important strategic plan in Jokowi’s NAWACITA was infrastructure development projects such as bridges, highway, toll, dams, airports, jetties, sea ports, semi apartment buildings for middle low level, rural development and another revitalization projects with estimated IDR 4,700 trillion or USD 333,483,800,000. Those kinds of projects was handled by Indonesian State Owned Construction Companies which in Indonesian terminology those companies are called as BUMN Karya. Therefore, BUMN Karya have an important role in Indonesian Infrastructure Development under Jokowi’s Government (2014 until 2019) and all construction companies in BUMN Karya should have an excellent employee performance in term of delivering infrastructure construction services.
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Having an excellent employee performance is very important for BUMN Karya, especially in realizing Infrastructure Development in Indonesia. According to Aloysius (2017) Indonesian state owned companies/ (BUMN Karya) have a several strength points such as financial performance, operational and technical construction experiences compare to another private construction companies in Indonesia.
Employee job performance plays a critical role in managing employees in organizations.
Organizations periodically conduct job performance evaluations to make administrative decisions, such as pay raises, discharges, or promotions in a fair and legally defensible manner and to improve employees’ job performance through developmental feedback (Miao, Kim, Oh; 2018, Gerhart, &
Parks, 2005; Schmidt & Kaplan, 1971; Stumpf & London, 1981). Through performance feedback, employees are likely to gain a better understanding of themselves and of developmental activities that are of value to them,which in turn lead to employees’ for further performance (Aguinis, 2012).
One of the most important factors in Job performance is to achieve goals. Successful employees meet deadlines, make sales and build the brand via positive customer interactions. When employees do not perform effectively, consumers feel that the company is apathetic to their needs and will seek help elsewhere. Employees who perform effectively get things done properly the first time.
There are several factors that could improve employee job performance such as human resources practices, transformational leadership and organizational citizenship behavior (OCB).
Human Resource Practices has a positive relationship with employee job performance (Chukwuka, Nwakoby, 2018), (Tabouli, Habtoor, Nashief, 2016). Human Resource practices (Compensation, Career Planning, Performance Appraisal, Training, and Employee Involvement) has a positive role in increasing the employee’s performance, so the organizations should implement these practices to achieve the desired goals. Human Resource practices plays a crucial role in increasing employee performance so the organizations should revise their HR policies by keeping in view the above factors in order to attain the targeted goals (Hassan, 2016). Another study found that there is an indirect positive effect to the human resource management policies through the organizational commitment with a percentage higher than the direct impact (Tabouli, Habtoor and Nashief ; 2016), whereas the value of the indirect impact 0.50. This result confirmed with Yazam and Ahmid (2012).
Al-Amin (2017) argued that transformational leadership positively affects organizational employee performance through indirect relationship or employee engagement practices. Another researcher found that transformational leadership had significant impact on employee job performance in PT Anugerah Baru Denpasar Indonesia (Andreani, Petrik, 2016). Base on previous studies, there are several limitations that would provide excellent opportunities for future contributions to this important stream of research. First, since the study focus was SME’s in Bangladesh, the generalization of the results to other countries is limited. Future studies may test the relationship between transformational leadership and employee job performance in BUMN Karya Indonesia. Second, Additional research using a longitudinal methodology addresses the relationship between Transformational Leadership and employee performance through another mediator variable.
Dinka (2018) found that altruism, conscientious and civic virtue dimensions of Organizational Citizenship Behavior (OCB) are positively and significantly correlated with employee job performance. the research is case study, which is only limited to one particular university, Dire Dawa University. Thus, a further research should be carried to make the result more general by encompassing more dimensions of OCB. Another study revealed that OCB have impacts on
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employee job performance. This means that the perception of employees toward OCB has positive and significant influence on Employees performance (Al-Mahasneh; 2015), the study was limited to Jordanian organizations; therefore, generalizing results of Jordanian setting to other countries may be questionable. Extending the analyses to other settings represent future research opportunities, which can be done by the following ways: Further testing with larger samples within same industry is important and including other industries will help mitigate the issue of generalizing conclusions on other organizations and industries.
Scope of the Study
This research is conducted to examine the factors that influence employee performance such as human resource practices, transformational leadership and organizational citizenship behavior. As discussed above, one of the most important strategic plan in Jokowi’s NAWACITA was infrastructure development projects such as bridges, highway, toll, dams, airports, jetties, sea ports, semi apartment buildings for middle low level, rural development and another revitalization projects. All construction projects are handled by State’s owned construction companies called BUMN Karya.
Their roles includes contributor for national economy growth, providing goods or services which are not covered by private company, employment provider, providing support guidance to small and medium businesses, and source of government revenue. The government takes control of BUMN Karya under one single ministry, the Ministry of State Owned Enterprises (BUMN), which acts like the CEO of a holding company. There are nine companies of BUMN Karya as summarized in Table 1.1.
Table 1. List of State’s Owned Construction Companies No. Company’s Name Number of
Employee
1 PT. Adhi Karya (Persero) 1,536
2 PT. Amarta Karya (Persero) 194
3 PT. Brantas Abipraya (Persero) 1,250
4 PT. Hutama Karya (Persero) 1,816
5 PT Istaka Karya ((Persero) 150
6 PT Nindya Karya (Persero) 370
7 PT. Pembangunan Perumahan (Persero)
2,225
8 PT Waskita Karya 2,018
9 PT. Wijaya Karya (Persero) 2,044
Total 11.603
LITERATURE REVIEW
The Concept of Employee Performance
Nowadays, most companies are seeking to improve their performance in any way possible. Base on previous research the performance can be defined as the efforts or the behavior of an individual that can be measured and that contributes in achieving both individual’s performance goals and
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organizational goals (Al Fagira, 2018), the definition of performance should be achieved through items such as piloting, evaluation, efficiency, effectiveness, and quality (Bartoli and Blatrix, 2015), Hasan et al. (2011) defines performance as the level of target achievement for both the institution and the individual (employee). While, Colase (2009) considers the word performance as a bag-word because it covers various and different notions such as growth, profitability, return, productivity, efficiency, and competitiveness. Verboncu and Zalman (2005) appreciated that performance is a particular result obtained in management, economics, and marketing that gives characteristics of competitiveness, efficiency, and effectiveness to the organization and its structural and procedural components.
According to Pradhan and Jena (2016) there are three distinct dimensions of employee performance; task performance (e.g., “I use to maintain high standard of work”), adaptive performance (e.g., “I use to keep myself updated with new skills and knowledge that help me to quickly adapt to changes in my core jobs”), and contextual performance (e.g., “I use to guide my new colleagues beyond my job purview”).
Employee performance is a multicomponent concept and on the fundamental level one can distinguish the process aspect of performance, that is, behavioral engagements from an expected outcome (Borman, & Motowidlo, 1993; Campbell et al., 1993; Roe, 1999). The behavior over here denotes the action people exhibit to accomplish a work, whereas the outcome aspect states about the consequence of individual’s job behavior (Campbell, 1990). Apparently, in a workplace, the behavioral engagement and expected outcome are related to each other (Borman, & Motowidlo, 1993), but the comprehensive overlap between both the constructs are not evident yet, as the expected outcome is influenced by factors such as motivation and cognitive abilities than the behavioral aspect.
Performance in the form of task performance comprises of job explicit behaviors which includes fundamental job responsibilities assigned as a part of job description. Task performance requires more cognitive ability and is primarily facilitated through task knowledge (requisite technical knowledge or principles to ensure job performance and having an ability to handle multiple assignments), task skill (application of technical knowledge to accomplish task successfully without much supervision), and task habits (an innate ability to respond to assigned jobs that either facilitate or impede the performance) (Conway, 1999). Therefore, the primary antecedents of task performance
The triarchy model of employee performance
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are the ability to do the job and prior experience. In an organizational context, task performance is a contractual understanding between a manager and a subordinate to accomplish an assigned task.
Entrusted task performance is broken into two segments: technical–administrative task performance and leadership task performance. The expected job performance comprising of planning, organizing, and administering the day-to-day work through one’s technical ability, business judgment and so on are called as technical–administrative task performance. Leadership task performance is labeled through setting strategic goals, upholding the necessary performance standards, motivating and directing subordinates to accomplish the job through encouragement, recognition, and constructive criticisms (Borman, & Brush, 1993; Tripathy, 2014). Borman, and Motowidlo (1997) defined job performance in the context of task performance as “effectiveness with which job occupants execute their assigned tasks, that realizes the fulfillment of organization’s vision while rewarding organization and individual proportionately.” Werner (1994) has synthesized the earlier propositions of task performance through relating it to organizational formal reward stating as “the demonstrated skill and behavior that influences the direct production of goods or service, or any kind of activities that provides indirect supports to organization’s core technical processes”.
The Factors that Influence Employee Performance
The following section explains the factors that influence the employee performance in organization:
human resource management practices, transformational leadership and organizational citizenship behavior.
Human Capital Practices
Previous research found that human resource management practices has a positive relationship with employee performance such as training and development (Chukwuka, Nwakoby, 2018), (Tabouli, Habtoor, Nashief, 2016), (thang, 2010) (Verboncu, Zalman, 2005), (DeNisi, Griffin, 2001).
H1: Human capital practices is positively influenced to employee performance
Transformational Leadership
Previous studies have identified the influence of transformational leadership on employee performance (Al-Amin, 2017), (Mwongeli, 2016), (Andreani, Petrik, 2016), (Özer, Tınaztepe, Cihan, 2014), (Choudhary, Akhtar, Zaheer, Arshad, 2013).
H2: Transformational leadership is positively influenced to employee performance
Organizational Citizenship Behavior (OCB)
It has been found that organizational citizenship behavior has a positive relationship on employee performance. Dinka (2018) found that altruism, conscientious and civic virtue dimensions of Organizational Citizenship Behavior are positively and significantly correlated with employee’s performance. the research is case study which is only limited to one particular university, Dire Dawa University. Thus, a further research should be carried to make the result more general by encompassing more dimensions of OCB. Another study revealed that OCB have impacts on job performance. This means that the perception of employees toward OCB has positive and significant influence on employees performance (Al-Mahasneh; 2015), the study was limited to Jordanian
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organizations; therefore, generalizing results of Jordanian setting to other countries may be questionable. Extending the analyses to other settings represent future research opportunities, which can be done by the following ways: Further testing with larger samples within same industry is important, and including other industries will help mitigate the issue of generalizing conclusions on other organizations and industries.
Based on the previous discussion, the following hypothesis is proposed:
H3: Organizational citizenship behavior is positively influenced to employee performance
The Research Framework
The research framework involves the factors that could impact on employee performance such as human capital practices, transformational leadership and organizational citizenship behaviour (OCB).
METHODOLOGY
Employee used as population are all human capital staff of state-owned construction companies in Indonesia, with the total 233 people.
Table. 2 The Operational Variable
Variable The Concept of Variable Dimension Human Capital
(X1) Independent
variable
Human resource practices have six functions and every single company have to choose best strategy to be implemented such as: Job Analysis, Recruitment and
1. Recruitment 2. Training 3. Compensation
EMPLOYEE PERFORMANCE HUMAN RESOURCE
PRACTICES
TRANSFORMATIONAL LEADERSHIP
ORGANIZATIONAL CITIZENSHIP BEHAVIOUR (OCB)
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selection, training and development, performance management, compensation and benefit (salary grading), employee relation (Noe, John R., Berry & Wright, 2010).
Transformational Leadersip (X2) Independent Variable
Transformational leaders motivate followers to achieve performance beyond expectations by transforming followers’
attitudes, beliefs, and values as opposed to simply
gaining compliance (Bass, 1985; Yukl, 1999a, 1999b).
Bass identified a number of subdimensions of
transformational leadership including charisma (which was later renamed idealized influence), inspirational motivation, intellectual stimulation, and
individualized consideration (Rafferty & Griffin; 2004).
1. Idealized influence 2. Inspirational
motivation 3. Intellectual
stimulation
Organizational Citizenship Behavior (X3) Independent Variable
OCB refers to anything that employees choose to do, spontaneously and of their own accord, which often lies outside of their specified contractual obligations. In other words, it is discretionary. OCB may not always be directly and formally recognized or rewarded by the company, through salary increments or promotions for example, though of course OCB may be reflected in favorable supervisor and co-worker ratings, or better
performance appraisals. In this way it can facilitate future reward gain indirectly. Finally, and critically, OCB must
1. Altruism, 2. Conscientious 3. Civic virtue
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‘promote the effective functioning of the
organization (Organ, 1988, p. 4).
Employee
Performance (Y) Dependent
Variable
research the performance can be defined as the efforts or the behavior of an
individual that can be measured and that contributes in achieving both individual’s performance goals and organizational goals (ALfagira, 2018), the definition of performance should be achieved through items such as piloting, evaluation, efficiency, effectiveness, and quality (Bartoli and Blatrix, 2015), Hasan et al. (2011) defines performance as the level of target achievement for both the institution and the individual (employee).
1. Work Motivation 2. Capability
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Herewith Full Structural Equation Modelling (SEM):
Below the equation model base on above picture : EP = β1 HCP + β2 TL+ β3 OCB+e1+ e2 + e3 Note:
EP = Employee Performance β = Regression Coefficient HCP = Human Capital Practices TL = Transformational Leadership
OCB = Organizational Citizenship Behavior (OCB) e1 = Error
e2 = Error e3 = Error
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DISCUSSION/FINDINGS
Descriptive Analysis
In this section, we will analyze research variables base on below questionnaire:
Table 3 Point Category
5 Very good
4 Good
3 Sufficient
2 Poor
1 Very poor
Table 4: Research Variable Descriptive
F % F % F % F % F %
Human Capital Practices (X1) 3.24 Sufficient
Recruitment (X1.1) 3.26 Sufficient
X1.1.1 2 3.8 7 13.5 32 61.5 11 21.2 0 0 3.25 Sufficient
X1.1.2 1 1.9 9 17.3 20 38.5 19 36.5 3 5.8 3.47 Sufficient
X1.1.3 3 5.8 6 11.5 27 51.9 16 30.5 0 0 3.06 Sufficient
Training (X1.2) 3.23 Sufficient
X1.2.1 3 3.8 6 13.5 30 61.5 11 21.2 2 0 3.25 Sufficient
X1.2.2 2 1.9 4 17.3 21 38.5 20 36.5 3 5.8 3.33 Sufficient
X1.2.3 2 5.8 6 11.5 25 51.9 17 30.5 3 0 3.12 Sufficient
Compensation (X1.3) 3.23 Sufficient
X1.3.1 3 3.8 6 13.5 30 61.5 11 21.2 2 0 3.25 Sufficient
X1.3.2 2 1.9 4 17.3 21 38.5 20 36.5 3 5.8 3.33 Sufficient
X1.3.3 2 5.8 6 11.5 25 51.9 17 30.5 3 0 3.12 Sufficient
Transformational Leadership (X2) 3.57 Good
Idealized Influence (X2.1) 3.63 Good
X2.1.1 2 3.8 7 13.5 32 61.5 11 21.2 0 0 3.71 Good
X2.1.2 1 1.9 9 17.3 20 38.5 19 36.5 3 5.8 3.71 Good
X2.1.3 3 5.8 6 11.5 27 51.9 16 30.5 0 0 3.47 Good
Inspirational (X2.2) 3.72 Good
X2.2.1 3 3.8 6 13.5 30 61.5 11 21.2 2 0 3.47 Good
X2.2.2 2 1.9 4 17.3 21 38.5 20 36.5 3 5.8 4.17 Good
X2.2.3 2 5.8 6 11.5 25 51.9 17 30.5 3 0 3.53 Good
Intellectual Stimulation (X2.3) 3.35 Sufficient
X2.3.1 3 3.8 6 13.5 30 61.5 11 21.2 2 0 3.25 Sufficient
X2.3.2 2 1.9 4 17.3 21 38.5 20 36.5 3 5.8 3.85 Sufficient
X2.3.3 2 5.8 6 11.5 25 51.9 17 30.5 3 0 2.94 Sufficient
Organizational Citizenship Behavior (X 3.49 Good
Alturism (X3.1) 3.65 Good
X3.1.1 2 3.8 7 13.5 32 61.5 11 21.2 0 0 4.00 Good
X3.1.2 1 1.9 9 17.3 20 38.5 19 36.5 3 5.8 3.71 Good
X3.1.3 3 5.8 6 11.5 27 51.9 16 30.5 0 0 3.25 Sufficient
Conscientious (X3.2) 3.36 Sufficient
X3.2.1 3 3.8 6 13.5 30 61.5 11 21.2 2 0 4.00 Good
X3.2.2 2 1.9 4 17.3 21 38.5 20 36.5 3 5.8 3.13 Sufficient
X3.2.3 2 5.8 6 11.5 25 51.9 17 30.5 3 0 2.94 Sufficient
Civic Virtue (X3.3) 3.45 Sufficient
X3.3.1 3 3.8 6 13.5 30 61.5 11 21.2 2 0 3.47 Sufficient
X3.3.2 2 1.9 4 17.3 21 38.5 20 36.5 3 5.8 3.57 Good
X3.3.3 2 5.8 6 11.5 25 51.9 17 30.5 3 0 3.31 Sufficient
Employee Performance (Y) 3.68 Good
Work Motivation (Y1.1) 3.77 Good
Y1.1.1 2 1.9 4 17.3 21 38.5 22 36.5 4 5.8 3.79 Good
Y1.1.2 2 3.8 7 13.5 32 61.5 12 21.2 1 0 3.60 Good
Y1.1.3 2 1.9 9 17.3 20 38.5 20 36.5 4 5.8 3.93 Good
Y1.1.4 3 5.8 9 11.5 27 51.9 17 30.5 3 0 4.54 Good
Y1.1.5 2 1.9 5 17.3 21 38.5 21 36.5 3 5.8 3.71 Good
Capability (Y1.2) 3.59 Good
Y1.2.1 2 1.9 3 17.3 21 38.5 20 36.5 5 5.8 3.92 Good
Y1.2.2 2 5.8 7 11.5 25 51.9 17 30.5 3 0 3.18 Sufficient
Y1.2.3 1 3.8 7 13.5 32 61.5 11 21.2 1 0 3.47 Good
Y1.2.4 1 1.9 9 17.3 20 38.5 19 36.5 4 5.8 3.79 Good
4 3 2 1
No. Variable 1 2 3 4 5 Result
Mean
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Validity Test
Below the result of output factor loading from all variables: Employee Performance, Human Capital Practices, Transformational Leadership, Organizational Citizenship Behavior (OCB) on PLS:
Base on above result, we found several loading factor below <0,5. With the low convergent validity result, Thus we have to drop several factor below <0.5
Reliability Test
Below the reliability test of Employee Performance, Human Capital Practices, Transformational Leadership, Organizational Citizenship Behavior (OCB), it could be reliable if the result bigger than
>0.6.
Table 5 : Reliability Test
Hypothesis Test
The researcher uste T-Statistic to examine the hypotheses, and we use the output Smart PLS to examine the correlation among the variables. Below the path coefficients table.
Human Capital Practices 0.465 0.89 0.872
Recruitment 0.742 0.891 0.825
Training 0.541 0.911 0.836
Compensation 0.544 0.832 0.722
Transformational Leadership 0.312 0.823 0.726
Idealized Influence 0.553 0.832 0.621
Inspirational 0.542 0.702 0.789
Intellectual Stimulation 0.56 0.821 0.768
Organizational Citizenship Behavior 0.332 0.82 0.711
Alturism 0.553 0.832 0.621
Conscientius 0.542 0.702 0.789
Civic Virtue 0.541 0.911 0.836
Employee Performance 0.489 0.832 0.778
Work Motivation 0.951 0.972 0.939
Capability 0.822 0.912 0.876
Cronbcahs Alpha
1
2
3
4
ave Composite Reliability
No. Variable
296
Table 6: The Path Coefficients (Mean, STDEV, P-Values)
Note: Proceed by Smart PLS
The Impact of Human Capital Practices on Employee Performance
Base on above result we found that human capital practices is positively influenced to employee performance with coefficient result 0.939, T-statistic 2.982 > 1.660 with 𝛼 = 0.05 (5%).
The Impact of Transformational Leadership on Employee Performance
Base on above result we found that transformational leadership is positively influenced to employee performance with coefficient result 0.792, T-statistic 3.012 > 1.660 with 𝛼 = 0.05 (5%).
The Impact of Organizational Citizenship Behavior (OCB) on Employee Performance
Base on above result we found that organizational citizenship behavior is positively influenced to employee performance with coefficient result 0.788, T-statistic 2.980 > 1.660 with 𝛼 = 0.05 (5%).
CONCLUSION
Base on descriptive and verification analysis result, we found that human capital, transformational leadership and organizational citizenship behavior (OCB) have a significant impact on employee performance at state’s owned construction companies in Indonesia. These results indicated that the better human capital practices, transformational leadership and organizational citizenship behaviour (OCB) of the company will increase and improve employee performance better. The employer should have to create several training & development for all employee in order to improve their competencies both of technical and management skill. Because of the limitation of the research, we do suggest for the future research to use the mediator such as work motivation between the factors that impact employee performance such as human capital practices, transformational leadership and organizational citizenship behaviour (OCB) and employee performance.
Employee Performance ->Human Capital Practices 0.939 2.982 0.000 Significant**
Employee Performance ->Recruitment 0.922 38.892 0.000 Significant**
Employee Performance ->Training 0.856 22.682 0.000 Significant**
Employee Performance ->Compensation 0.845 23.982 0.000 Significant**
Employee Performance ->Transformational Leadership 0.792 3.012 0.000 Significant**
Employee Performance ->Idealized Influence 0.921 19.200 0.000 Significant**
Employee Performance ->Inspirational 0.892 18.920 0.000 Significant**
Employee Performance ->Intellectual Stimulation 0.872 20.020 0.000 Significant**
Employee Performance ->Organizational Citizenship Behavior 0.788 2.980 0.000 Significant**
Employee Performance ->Alturism 0.687 29.350 0.000 Significant**
Employee Performance ->Conscientius 0.799 24.560 0.000 Significant**
Employee Performance ->Civic Virtue 0.765 23.070 0.000 Significant**
2
3
Note
No. The relationship of variable Coefficient T Statistic P Value
1
297
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