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The mediating role of job satisfaction on compensation, work environment, and employee performance: Evidence from Indonesia

Author

Listed:
  • Idris Idris

    (State University of Malang, Indonesia)

  • Khofifatu Rohmah Adi

    (State University of Malang, Indonesia)

  • Budi Eko Soetjipto

    (State University of Malang, Indonesia)

  • Achmad Sani Supriyanto

    (Maulana Malik Ibrahim State Islamic University, Indonesia)

Abstract

Job satisfaction has a pivotal role in improving employee performance. It provides enthusiasm and high motivation to employees to increase productivity. On the other hand, to improve employee performance, the organization provides compensation based on established standards and in an environment that is, sometimes, less conducive. This study purposes to examine the mediating role of job satisfaction on compensation, work environment, and employee performance at State Polytechnic colleges in Indonesia. This study used Partial Least Square (PLS) as data analysis. This study found that compensation has no impact on job satisfaction and employee performance. In addition, job satisfaction cannot mediate the compensation and employee performance. However, the work environment positively and significantly affects job satisfaction and employee performance. Job satisfaction has impact on work environment and employee performance. It also influences employee performance positively and significantly. Thus, job satisfaction directly or indirectly can be a mediator for the relationship between work environment and employee performance.

Suggested Citation

  • Idris Idris & Khofifatu Rohmah Adi & Budi Eko Soetjipto & Achmad Sani Supriyanto, 2020. "The mediating role of job satisfaction on compensation, work environment, and employee performance: Evidence from Indonesia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(2), pages 735-750, December.
    • Handle: RePEc:ssi:jouesi:v:8:y:2020:i:2:p:735-750
    DOI: 10.9770/jesi.2020.8.2(44)
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    References listed on IDEAS

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    1. Aakanksha Kataria & Pooja Garg & Renu Rastogi, 2019. "Do high-performance HR practices augment OCBs? The role of psychological climate and work engagement," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 68(6), pages 1057-1077, March.
    2. Rachel Graefe-Anderson & Unyong Pyo & Baoqi Zhu, 2018. "Does CEO compensation suppress employee wages?," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 17(4), pages 426-452, November.
    3. Haiyan Jiang & Honghui Zhang, 2018. "Regulatory restriction on executive compensation, corporate governance and firm performance," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 26(1), pages 131-152, February.
    4. Wonlop Buachoom, 2017. "Simultaneous relationship between performance and executive compensation of Thai non-financial firms," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 25(3), pages 404-423, September.
    5. Thomas Clark Durant & Michael Weintraub & Daniel Houser & Shuwen Li, 2018. "Trust in the executive," Journal of Peace Research, Peace Research Institute Oslo, vol. 55(5), pages 609-624, September.
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    Cited by:

    1. Hung Manh Pham & Tra Thi Huong Le & Linh Hoai Dang & Linh Thuy Nguyen, 2024. "The impact of reward system on talented employees’ performance in Vietnamese commercial banks: mediating role of job satisfaction," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 1099-1114, September.
    2. Jolanta Maj, 2023. "Influence of Inclusive Work Environment and Perceived Diversity on Job Satisfaction: Evidence from Poland," Central European Business Review, Prague University of Economics and Business, vol. 2023(4), pages 105-122.
    3. Nadia Abdelhamid Abdelmegeed Abdelwahed & Mohammed A. Al Doghan, 2023. "Developing Employee Productivity and Performance through Work Engagement and Organizational Factors in an Educational Society," Societies, MDPI, vol. 13(3), pages 1-18, March.

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    More about this item

    Keywords

    job satisfaction; compensation; work environment; employee performance; state polytechnic colleges;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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