The Effect Of Compensation On Employee Work Performance At PT. Herfinta Farm And Plantation Aek Batu-Torgamba Labuhan Batu Selatan Regency
The Effect of Compensation on Employee Work Performance at PT. Herfinta Farm and Plantation Aek Batu-Torgamba Labuhan Batu Selatan Regency
Introduction
In today's competitive business landscape, employee work performance is a crucial factor in determining the success of an organization. One of the key drivers of employee work performance is compensation, which refers to the payment or benefits received by employees in exchange for their work. The relationship between compensation and employee work performance has been a subject of interest for researchers and practitioners alike. This study aims to investigate the effect of compensation on employee work performance at PT. Herfinta Farm and Plantation Aek Batu-Torgamba, Labuhan Batu Selatan Regency.
Background of the Study
PT. Herfinta Farm and Plantation Aek Batu-Torgamba is a leading agricultural company in Labuhan Batu Selatan Regency, Indonesia. The company has been operating for several years and has a large workforce of permanent employees. Despite its success, the company has been facing challenges in terms of employee work performance. The company's management has been seeking ways to improve employee work performance and has been considering various factors, including compensation.
Research Methodology
This study used a correlational research design and a quantitative approach to analyze the relationship between compensation and employee work performance. The data collected in this study came from primary data, which were obtained directly from the object of research through structured questionnaires and direct interviews with respondents. Secondary data were also collected from other studies, books, and documents from the object of research.
The population of this study consisted of all permanent employees at PT. Herfinta Farm and Plantation Aek Batu-Torgamba, totaling 134 people. The research sample was taken by 10% of the population, 57 people, using sampling techniques based on the Slovin formula.
Data Analysis
The results of this study showed that compensation had a significant effect on employee work performance at PT. Herfinta Farm and Plantation Aek Batu-Torgamba. The compensation variable explained 17.3% of the total variety of work performance, while the other 82.7% were influenced by other variables that were not explained in this study. The positive relationship between compensation and work performance indicates that increasing compensation will improve employee performance.
Discussion
The results of this study are in line with motivational theory, which states that compensation is one of the important factors in motivating employees to improve their performance. When employees feel valued and given appreciation in accordance with their performance, they tend to be more motivated and enthusiastic at work.
The findings of this study have several implications for PT. Herfinta Farm and Plantation Aek Batu-Torgamba. Firstly, the company needs to review its existing compensation system and ensure that the system is fair, transparent, and in accordance with employee performance. Secondly, the company needs to provide training to employees about how to improve their performance so that they can get higher compensation. Finally, the company needs to improve communication with employees about the compensation system and how the system is applied.
Recommendation
Based on the results of this study, PT. Herfinta Farm and Plantation Aek Batu-Torgamba is advised to:
- Improve the compensation system: The company needs to review the existing compensation system and ensure that the system is fair, transparent, and in accordance with employee performance.
- Appropriate awards: Awards given to employees must be relevant to their performance and can motivate them to continue to improve performance.
- Improve communication: The company needs to improve communication with employees about the compensation system and how the system is applied.
- Providing training: The company needs to provide training to employees about how to improve their performance so that they can get higher compensation.
Conclusion
This study shows that compensation has an important role in improving employee performance at PT. Herfinta Farm and Plantation Aek Batu-Torgamba. By implementing a fair and transparent compensation system, companies can motivate employees to continue to improve their performance and achieve company targets. The findings of this study have several implications for PT. Herfinta Farm and Plantation Aek Batu-Torgamba and can be used as a reference for other companies in the agricultural sector.
Limitation of the Study
This study has several limitations. Firstly, the study only focused on the effect of compensation on employee work performance and did not consider other factors that may influence employee work performance. Secondly, the study only used a correlational research design and a quantitative approach, which may not provide a complete picture of the relationship between compensation and employee work performance.
Future Research Directions
Future research can build on the findings of this study by investigating the effect of other factors on employee work performance, such as job satisfaction, organizational commitment, and leadership style. Additionally, future research can use a more comprehensive research design, such as a longitudinal study, to examine the relationship between compensation and employee work performance over time.
References
- [List of references cited in the study]
Appendix
- [Appendix containing additional information, such as questionnaires, interview protocols, and data analysis procedures]
Frequently Asked Questions (FAQs) about the Effect of Compensation on Employee Work Performance
Q: What is the main finding of this study?
A: The main finding of this study is that compensation has a significant effect on employee work performance at PT. Herfinta Farm and Plantation Aek Batu-Torgamba. The study found that the compensation variable explained 17.3% of the total variety of work performance.
Q: What is the relationship between compensation and employee work performance?
A: The study found a positive relationship between compensation and employee work performance. This means that increasing compensation will improve employee performance.
Q: What are the implications of this study for PT. Herfinta Farm and Plantation Aek Batu-Torgamba?
A: The study has several implications for PT. Herfinta Farm and Plantation Aek Batu-Torgamba. Firstly, the company needs to review its existing compensation system and ensure that the system is fair, transparent, and in accordance with employee performance. Secondly, the company needs to provide training to employees about how to improve their performance so that they can get higher compensation. Finally, the company needs to improve communication with employees about the compensation system and how the system is applied.
Q: What are the limitations of this study?
A: This study has several limitations. Firstly, the study only focused on the effect of compensation on employee work performance and did not consider other factors that may influence employee work performance. Secondly, the study only used a correlational research design and a quantitative approach, which may not provide a complete picture of the relationship between compensation and employee work performance.
Q: What are the future research directions based on this study?
A: Future research can build on the findings of this study by investigating the effect of other factors on employee work performance, such as job satisfaction, organizational commitment, and leadership style. Additionally, future research can use a more comprehensive research design, such as a longitudinal study, to examine the relationship between compensation and employee work performance over time.
Q: What are the practical implications of this study for other companies in the agricultural sector?
A: The study has several practical implications for other companies in the agricultural sector. Firstly, companies need to review their existing compensation systems and ensure that the systems are fair, transparent, and in accordance with employee performance. Secondly, companies need to provide training to employees about how to improve their performance so that they can get higher compensation. Finally, companies need to improve communication with employees about the compensation system and how the system is applied.
Q: What are the theoretical implications of this study?
A: The study has several theoretical implications. Firstly, the study supports the motivational theory, which states that compensation is one of the important factors in motivating employees to improve their performance. Secondly, the study highlights the importance of fair and transparent compensation systems in improving employee work performance.
Q: What are the policy implications of this study?
A: The study has several policy implications. Firstly, the study suggests that governments and regulatory bodies need to establish policies and regulations that ensure fair and transparent compensation systems in the agricultural sector. Secondly, the study highlights the need for companies to provide training and development opportunities to employees to improve their performance.
Q: What are the future directions for research on compensation and employee work performance?
A: Future research on compensation and employee work performance can focus on several areas, including:
- Investigating the effect of other factors on employee work performance, such as job satisfaction, organizational commitment, and leadership style.
- Using a more comprehensive research design, such as a longitudinal study, to examine the relationship between compensation and employee work performance over time.
- Investigating the impact of compensation on employee well-being and job satisfaction.
- Examining the relationship between compensation and employee turnover and retention.
Q: What are the limitations of this study in terms of generalizability?
A: This study has several limitations in terms of generalizability. Firstly, the study was conducted in a specific company in the agricultural sector, and the findings may not be generalizable to other companies or industries. Secondly, the study only focused on the effect of compensation on employee work performance and did not consider other factors that may influence employee work performance.