The Effect of Compensation and Organization Culture on Employee Performance: Mediating Role of Work Motivation

Elok Damayanti; Retno Nur Widiyani; Amrun Rosyid

doi:10.56225/finbe.v3i1.338

Authors

Elok Damayanti Faculty of Economic and Business, Narotama University, Sukolilo, 60117 Surabaya, Jawa Timur, Indonesia
Retno Nur Widiyani Faculty of Economic and Business, Narotama University, Sukolilo, 60117 Surabaya, Jawa Timur, Indonesia
Amrun Rosyid Faculty of Economic and Business, Narotama University, Sukolilo, 60117 Surabaya, Jawa Timur, Indonesia

DOI:

https://doi.org/10.56225/finbe.v3i1.338

Keywords:

Compensation, Organization culture, Employee performance, Motivation

Abstract

In today's corporate environment, fostering high employee performance is crucial for organisational growth. Companies must enhance performance within their operations by utilizing various resources, including natural, financial, human, scientific, and technological assets. These resources provide the energy, strength, and power needed to generate momentum and activity. Exceptional employee performance is essential for achieving desired outcomes. This study explores the impact of compensation and organisational culture on employee performance, with work motivation as an intervening variable at PT. Panen Lestari Indonesia (East Java Surabaya). A quantitative approach was adopted, collecting data through observation, interviews, and questionnaires from 73 employees. The analysis employed the Partial Least Square (PLS) methodology. Results show that compensation and organisational culture significantly affect employee performance via work motivation, which mediates these effects. The study underscores the importance of integrating compensation and supportive organisational culture to enhance employee performance, highlighting work motivation as a key mediating factor. These findings provide practical implications for managers and HR professionals, suggesting that improving employee performance requires considering the interplay between compensation, organisational culture, and work motivation.

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