Relationship of Organizational Culture and Compensation on Employee Loyalty: The Mediating Role of Job Satisfaction at PT. Warnatama Cemerlang
https://doi.org/10.56225/ijassh.v4i4.495
Keywords:
Organizational culture, Compensation, Job satisfaction, Employee loyaltyAbstract
Employee loyalty is an important factor in maintaining organizational stability and improving long-term organizational performance. However, many organizations face challenges retaining loyal employees due to internal and external factors. This study aims to examine the influence of organizational culture and compensation on employee loyalty with job satisfaction as an intervening variable at PT. Warnatama Cemerlang. A quantitative research approach was employed using a survey method with a structured questionnaire distributed to 133 employees. The collected data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4. The results show that organizational culture and compensation have significant positive effects on job satisfaction. Furthermore, job satisfaction significantly influences employee loyalty. Compensation also has a significant direct effect on employee loyalty, whereas organizational culture does not. However, organizational culture significantly influences employee loyalty indirectly through job satisfaction. The mediation analysis confirms that job satisfaction plays a significant role in mediating the relationship between organizational culture and compensation with employee loyalty. These findings highlight the importance of fostering a supportive organizational culture and implementing fair compensation systems to enhance job satisfaction and strengthen employee loyalty. The results provide practical insights for organizations seeking to develop effective human resource management strategies to improve employee retention and organizational performance.
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