How can Organizational Support Increase Employee Motivation and Performance? Studies on Employees of MSMEs in Indonesia

Purpose – This study aims to investigate how the supervisor support (SVS) and co-worker support (CWS) affects employees in micro, small and medium enterprises (MSME) in Yogyakarta, Indonesia. Aims(s) – This study tested and strengthened the results of previous research regarding how SVS and CWS increased the motivation and performance of employees in the MSME sector in Yogyakarta, Indonesia. Design/methodology/approach – This study used 426 employees who were collected using a questionnaire. After the questionnaire was declared valid and reliable using the data collected, it was continued with testing the research hypothesis using structural equation modeling (SEM) with a two-step approach. Findings – The results of this study found that employees do need support from supervisors and co-workers, so that all variables in this study are correlated. In addition, employee motivation was directly influenced by emotional CWS, while employee performance was influenced by instrumental CWS. SVS had no direct effect on motivation and performance but encouraged employees to provide support to their co-workers both emotionally and instrumentally. Limitations of the study – The limitations of this research were using cross-section data to test the mediation model and using self-assessment in filling out the questionnaire which caused common method variance. Future research would be better if longitudinal data and other ratings were used to overcome this problem. Practical implications – Supervisor support has an effect for increasing co-worker support. These two forms of support are very necessary in increasing employee motivation and performance. Originality/value – Unlike the results of previous research, this research found that leader support cannot immediately improve employees’ performance. Supervisor support was mediated by other variables, which in this case was co-worker support which can motivate employees to improve their performance.