\ANALYSIS OF COMPENSATION AND WORK ENVIRONMENT ON PERFORMANCE WITH MOTIVATION AS INTERVENTION VARIABLES IN THE CHICKEN BUSINESS

Irwan Syah Bana, Sri Rahayu, Muhamad Toyib Daulay

Abstract


This study aims to analyze the influence of compensation and work environment on employee performance with motivation as an intervening variable in the slaughtered chicken business at Sei Sicaming Market, Medan. This study uses a quantitative method with an associative approach. The research sample consisted of 100 employees who worked in the slaughtered chicken business in the area. Data analysis was carried out using Structural Equation Modeling (SEM) based on Partial Least Square (PLS) with the help of SmartPLS software. The results of the study show that compensation and the work environment have a positive and significant influence on employee performance. In addition, these two variables also have a positive and significant effect on work motivation. Other findings show that work motivation has a positive and significant effect on employee performance, as well as acting as an intervening variable in the relationship between compensation and the work environment on performance. The R-Square value of 0.522 shows that the variables of compensation, work environment, and motivation are simultaneously able to explain 52.2% of the variation in employee performance, while the remaining 47.8% is influenced by other factors not included in this study model. Overall, the results of this study confirm that proper compensation and a conducive work environment can improve employee motivation and performance. Motivation plays an important role as a link in strengthening the relationship between compensation and the work environment and employee performance. This study empirically shows that the implementation of a fair compensation system and the creation of a conducive work environment are the main factors in increasing employee productivity and work motivation in the slaughter chicken business in Sei Sicaming Market, Medan.

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DOI: https://doi.org/10.31846/jae.v14i2.1033

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