Keywords: TRANSFORMATIONAL LEADERSHIP, ORGANIZATIONAL CULTURE, REWARDS, AND OCB.

Transcription

1 THE EFECT Of TRANSFORMATIONAL LEADERSHIP, ORGANIZATIONAL CULTURE, REWARD TO ORGANIZATIONAL CITIZENSHIP OF EMPLOYEE BEHAVIOR AT PT BARATA INDONESIA (PERSERO) Benny Hutahayan 1, Endang Siti Astuti 2, Kusdi Raharjo 2, Djamhur Hamid 2 1 Doctoral Student, Administrative Sciences Faculty, Brawijaya University, Indonesia 2 Administrative Sciences Faculty, Brawijaya University, Indonesia ABSTRACT Organizational citizenship behavior (OCB) nowadays continues to encourage the interest of researchers and practitioners. The emergence of willingness to perform OCB related to individual and organizational performance. OCB is the action of employees performed voluntarily and outside of their roles that can make a positive contribution to the organization (company). PT. Barata Indonesia (Persero) is a State-Owned Enterprises (SOEs). PT. Barata Indonesia (Persero) currently requires strong support of OCB from all employees in order to realize the success of the company. OCB is necessary in order that each employee contributes to optimal and not just limited to work in accordance with the description of the task. With the strong OCB within each employee, it will further accelerate the achievement of corporate goals. The results of this research indicate that the factors that directly affect OCB are rewards and Cultural Organization. Transformational leadership affects OCB indirectly through Organizational Culture and Rewards. Keywords: TRANSFORMATIONAL LEADERSHIP, ORGANIZATIONAL CULTURE, REWARDS, AND OCB. 1. Introduction The topic of organizational citizenship behavior (OCB) nowadays continues to encourage the interest of researchers and practitioners. According to Ackfeldt and Coote (2005), it is caused by the results of the research, the emergence of willingness to perform OCB related to individual and organizational performance. It is also relevant to what Angadi and Naik (2011) reveal that the performance of an organization is a complex condition factor among other factors determined by the behavior of individual member. Conceptually, Organ (in Foote & Tang, 2008) describes OCB as behavior based on volunteers who can not be imposed on the boundaries of the work and will not officially receive the award but capable of contributing to the organization. In other words, OCB is the action of employees performed voluntarily and outside of their roles that can make a positive contribution to the organization (company). In day-to-day life of the organization, OCB surfaces in the form of altruism, conscientiousness, sportsmanship, courtesy, and civic virtue (Organ, in Tschannen-Moran, 2003). The purpose of this research is to investigate the relationship between transformational leadership, organizational culture, reward to OCB in PT. Barata Indonesia. From the results of this research, it will be obtained appropriate steps to strengthen OCB employees of PT. Barata Indonesia. PT. Barata Indonesia (Persero) is a State-Owned Enterprises (SOEs). PT. Barata Indonesia (Persero) has a vision to become the formidable Engineering, Procurement & Construction (EPC) and Manufacturing. One of the rolee of leadership in PT. Barata Indonesia is transformational leadership role. PT. Barata Indonesia (Persero) currently requires strong support of OCB from all employees in order to realize the success of the company. OCB is necessary so that each employee contributes to optimal and not just limited to work in accordance with the description of the task. With the strong OCB within each COPY RIGHT 2013 Institute of Interdisciplinary Business Research 466

2 employee, it will further accelerate the achievement of corporate goals. However, it is not easy to encourage each employee to have a strong OCB. Previous research conducted by Asgari et al. (2008) has shown that transformational leadership has a significant effect on OCB. Organizational culture can trigger and stimulate OCB employees. Previous research conducted by Kar and Tewari (1999), Jiang and Fu (2011) proved that organizational culture has significant effect on OCB. Rewards as a collection of elements of remuneration provided to employees in an organized, interact, mutually dependent on one another, regular and integrated as a means to achieve organizational goals, can also trigger OCB among employees. Previous studies such as conducted by Suresh and Venkatammal (2010); Podsakoff, et al (2000) showed that the rewards has significant influence on OCB. The influence of transformational leadership to remuneration can be seen from the dimensions contained in transformational leadership, one of which is the consideration individual. According to Bass & Avolio (in Sunarsih, 2001), transformational leaders are able to treat others as individuals, consider the individual needs and aspirations, listen, educate and train subordinates that the leaders like that give personal attention to subordinates, who see subordinates as individuals and offer special attention to developing subordinates for good performance. It needs to be remembered that the rewards in the organization can be in the form of intrinsic and extrinsic (Martocchio, 2004). The invidual consideration is one of the extrinsic rewards. 2. Theoretical Background Work behavior or known as OCB in the organization that is committed to improving service quality is also very important to be developed or nurtured. Organ (1998), defined OCB as individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system, and the aggregate promotes the effective functioning of the organization. Research conducted by Asgari et al. (2008) titled "The Relationship between Transformational Leadership Behaviors, Leader-Member Exchange and Organizational Citizenship Behaviors". The results of this research showed that transformational leadership has significant influence on OCB. Mohant research, Jagannath and Rath (2012) titled "Organizational Culture Can Be a Predictor of Organizational Citizenship Behaviors?". Results of this research indicate that organizational culture significantly influence OCB. Research conducted by Babaei et al. (2012), entitled "The Impact of Human Resource Practices and Organizational Citizenship Behaviors on Firm Performance". The results of his research showed that remuneration and performance assessment have significant direct effect on OCB; remuneration, performance appraisal and OCB have significant direct effect on the quality of services; reward has indirect effect on OCB through performance assessment, as well as performance appraisal has indirect effect on OCB through rewards. 3. Research Methods The approach used in this research is a quantitative approach. The quantitative approach has many advantages for the research subjects and the sample is known, the data collection instrument is prepared, flexible, saves time, and is more practical. This research uses a research design explanation (explanatory research) by applying the method of the survey. Researcher take samples from a population and use the instrument in the form of a questionnaire as a data collection tool. In this research, it will be empirically tested variables that influence Transformational Leadership, Organizational Culture, Rewards to OCB. Kind of explanatory research in accordance with the terms as described by Singarimbun and Effendi (1995), that is the research which is done with the intention of explanation (confirmatory research) in order to COPY RIGHT 2013 Institute of Interdisciplinary Business Research 467

3 provide an explanation or causal relationships among the variables studied by testing the hypothesis. The population in this research was all employees of PT. Barata Indonesia (Persero) from staff to director level whose branches spread all over Indonesia. Population size of approximately 522 people, with the following details: UPG & Corporations = 303 people, EPC = 22, UUM Tegal = 83 Bandung-Sukabumi = 28, Cilegon UUM = 42 and UUM Medan = 19 person. The samples in this research were some of employees at PT. Barata Indonesia (Persero), elected through a representative sampling procedures. Research using representative samples can give results which are easily to be generalized. This research determined the sample as many as 230 people. The data used in this research are primary data, the respondents answers to the questions on the questionnaire study. Total of 230 questionnaires will be distributed to the employees of PT. Barata Indonesia with proportion in dividing. Inferential Statistics Method used in the data analysis of this research is the Generalized Structural Component Analysis (GSCA). The reason for using GSCA is that the causal relationship formulated in this reserach is using the model of two-way causality (back and forth) as well as one-way causality (recursive) and the measurement of variables that is formative or reflective (Solimun, 2013). This reserach included four variables: Transformational Leadership, Organizational Culture, Rewards and OCB. The measurement of each variable involves a reflective indicator models for those five variables. The design of the structural model on the relationship between latent variables GSCA is based on the formulation of the research problem or hypothesis. Structural model in this research is as follows: Organisational Culture (X2) Transformational Leadership (X1) OCB (Y1) Rewards (X3) Figure 1. Results of Structural model in this research In this research, the hypothesis will be tested: H1: Transformational Leadership has influence on OCB H2: Organizational culture has influence on OCB H3: Rewards has influence on OCB 4. Analysis Result and Discussion 4.1. Validity and Reliability of Instrument The tool of this research using instrument (questionaire). The results of validity in Table 1 demonstrate that the entire value of correlation (r) from the results of validity has value over 0.3, so that all indicators are declared valid. On the other hand, the results of reliability test show that Cronbach alpha value is above 0.6, so that the instrument is declared reliable. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 468

4 4.2. Measurement Model GSCA analysis show the outer model (measurement model) of each variables using loading factor and the descriptive statistics using average score (interval scale of 1 to 5) as follow: Table 1: Validity and Reliability, Average Score and Loading Factor Variable Indicator Valid Reliable Average Loading a. Idealism influence (X1.1) b. Inspirational Motivation (X1.2) c. Intelectual Stimulation (X1.3) d. Personal Consideration (X1.4) Transformational Leadership (X1) Organizational Culture (X2) a. Innovation (X2.1) b. Stability (X2.2) c. Respect for people (X2.3) d. Result Orientation (X2.4) e. Caution Against detailed matters (X2.5) f. Team Orientation (X2.6) g. Competitive aggressiveness (X2.7) Rewards (X3) a. Feeling of capable (X3.1) b. Skills (X3.2) c. Responsibility (X3.3) d. Personal growth (X3.4) Organizational Citizenship behavior (Y1) a. Altruism (Y1.1) b. Conscientiousness (Y1.2) c. Sportsmanship (Y1.3) d. Courtesy (Y1.4) e. Civicvirtue (Y1.5) There are four variables tested in this study and the four variables consisting of several indicators as tools of measurement. Transformational leadership (X1) constitutes ways done by leader of PT. Barata Indonesia (Persero) as the direct supervisor in influencing subordinates to achieve organizational goals (Bass & Avolio, in Sunarsih, 2001). Transformational Leadership variables in this study are four (4) indicators and they are indicators idealism influence, inspirational motivation, intellectual stimulation and individualized consideration. Based on the analysis, the highest factor loading value of is an indicator of an individual consideration with an average value of 3.88, then to increase the transformational leadership in best way is to improve individual consideration and the consideration of individual employees is currently in good condition. Organizational culture (X2) is a value system that was developed in PT. Barata Indonesia (Persero) to act as a reference for a common goal (O'Reilly, Chatman & Caldwell, in McShane & Von Glinow, 2008). Organizational culture variable in this research consicts of 7 (seven) indicators such as indicator of Innovation, Stability, Respect for people, Result orientation, Caution Against Detailed matters, Team orientation, Competitive aggressiveness. Based on the value of loading factor, the maximum value obtained for the variable Organizational Culture is and the indicator is Caution against detailed matters with an average value of 3.96, then the best way to improve the organizational culture is by improving the ability of employees in paying attention to things in details and now their ability is in good condition. Rewards (X3) is the remuneration of PT. Barata Indonesia in the form of non-financial and given to employees in organized, interacted with each other, depended on each other, ordered and integrated as a means to achieve the goals of organization (Vecchio, 2006). Rewards variable in this research consists of four (4) indicators; indicator of feeling of capable, skill, responsibility and personal growth. On variable of remuneration, indicator of feeling of capable has the highest value of loading factor of with average value of 3.96, then the best way to improve rewards is by increasing indicator of feeling of capable and now the employees are in good condition for their feeling of capable. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 469

5 Organizational citizenship behavior (Y1) is the action of employees performed voluntarily and outside of their roles that can make a positive contribution to the organization (Organ, in Trschannenp-Morran, 2003). OCB variables in this research have five (5) indicators such as indicator of altruism, conscientiousness, sportsmanship, courtesy, civic virtue. Based on value of loading factor, it is obtained the highest value of loading factor for OCB variable of and is the highest indicator of Conscientiousness and Civic Virtue to the value average respectively 3.89 and 3.91 so that the best way to improve OCB is to improve Conscientiousness, and Civic Virtue and current employees Conscientiousness and Civic Virtue are in good condition The Results of Hypothesis Testing Table 2 shows the the results of hypothesis testing as follows. The relationship is significant if the Probability Value (P-value) less than 0.05 or 5% level of significance. Table 2: Test Results coefficient and P-Value Relationship Coefficient P-value Transformational Leadership (X1) OCB (Y3) Organizational Culture (Y1) OCB (Y3) Rewards (Y2) OCB (Y3) Organisational Culture (X2) Transformational Leadership (X1) OCB (Y1) Rewards (X3) Figure 2. Results of GSCA Analysis 1. The Effect of Transformational Leadership (X1) on OCB (Y3). Based on the analysis, the coefficient of the relationship between transformational leadership and OCB is equal to with a p-value of The results of analysis p-value > 0.05 indicates that transformational leadership has no significant effect on OCB. 2. The Influence of Organizational Culture (Y1) on OCB (Y3). Based on the analysis, the coefficient of relationship between the OCB Cultural Organization is at 0.23 with a p-value of The results of analysis p-value < 0.05 indicates that organizational culture has significant influence on OCB. Coefficient is positive, indicating one way direction of the relationship. It means that an increase in Organizational Culture (Y1) may significantly affect the increase in OCB (Y3), the higher the value of Cultural Organizations (Y1), it will lead to higher OCB (Y3). Organizational culture has influence on OCB. The better the organizational culture exists that look of increasing innovation, stability, respect, results orientation, the attention to detail, team orientation, and competitive aggressiveness will lead to compete better OCB in PT. Barata Indonesia. The impact of improvements in the OCB will appear on the high altruism, conscientiousness, sportmanship, courtesy and civic virtue employees at PT. Barata Indonesia. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 470

6 3. The Effect of Rewards (Y2) on OCB (Y3). Based on the analysis, the coefficient of relationship between OCB and Rewards is equal to with a p-value of The results of analysis p-value < 0.05 indicates that the rewards has significantly influence on OCB. Coefficient is positive, indicating one way direction of the relationship. It means that an increased rewards (Y2) significantly affect the increase in OCB (Y3), the higher the value of rewards (Y2), it will lead to the higher value of OCB (Y3). Rewards has influence on OCB. The better the rewards that can be seen from the increasing feeling of capable, skill, responsibility and personal growth will also lead to better OCB in PT. Barata Indonesia. The impact of improvements in the OCB will appear on the high altruism, conscientiousness, sportmanship, courtesy and civic virtue employees at PT. Barata Indonesia. The results of factors testing that form OCB are directly influenced by the organizational culture and rewards. The higher the organizational culture and rewards, the more it will strengthen employee OCB.On the other hand, it is found that transformational leadership does not directly affect OCB. Organizational culture has influence on OCB. Organizational culture as a set of values that built and is believed to be shared by all members of the organization so that it becomes a reference in the spoken word, attitude and behavior as well as any further in solving organizational problems and a member of the organization, can also affect employee OCB. Organizations (companies) that have superior values and massively internalized to the employee will be a role model for employees in carrying out their daily duties. Organizational culture that can accommodate as many expectations, interests, and needs of member of the organization will be deemed conducive by members of the organization. Organizational culture that is conducive to encourage member organizations to support the efforts and measures to promote the organization. Positive values that have been internalized within the organization members will also encourage the spirit and the extra effort the members of the organization for the realization of organizational goals. In addition, the values of a positive culture will also encourage the creation of a positive organizational climate, so as to create an atmosphere of mutual help, cooperation and awareness for both fully responsible towards their duties. In other words, organizational culture is conducive to be able to encourage the growth of extra-role behavior or OCB. Rewards influence on OCB. Rewards is a series of elements of remuneration granted to members of the organization for services provided in order to achieve organizational goals. Rewards become an important means for members of the organization to meet the various needs of life. Therefore, if the system is perceived as fair and reasonable return, it will encourage positive behavior, as do those jobs even outside of his role. In other words, employees will try to be a good citizen organizations to try to do activities that are beneficial to the advancement of the organization without considering whether it be a job or a job instead. The main thing is to contribute as much as possible so the achievement of organizational goals. In a study conducted by Podsakoff (2000) argued that the contingent consideration affects the frequency of OCB. When employees are not indifferent to awards made organization, the employees feel that the leader controls rewards, and when the leaders manage payments based on performance, then an increase in OCB. 5. Reccomendation Based on the above results, we can conclude some of the following: The test results form factors that OCB OCB obtained directly influenced by the culture of the organization and reward. The higher the organizational culture and reward, the more it will strengthen employee OCB. On the other hand found that transformational leadership does not directly affect the OCB. Suggestions for future research can extend this study by adding other COPY RIGHT 2013 Institute of Interdisciplinary Business Research 471

7 variables not examined in this study, such as environmental organizations or employee satisfaction. On the other hand, this research has focused on non-financial rewards. Recommended for further research can add the concept of financial reward, so that the analysis would be more complex. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 472

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9 Strengthening Reseach Methodology General Structural Component Analysis GSCA. Presented at the Doctoral Training Program in Business Administration FIA UB Date 27 July 2013, Malang. Sunarsih Transformational Leadership in a Time of Organizational Change. Journal of Management and Business. Vol 5 No.2, Suresh, S. and P. Venkatammal Antecedents of Organizational Citizenship Behaviour, Journal of the Indian Academy of Applied Psychology, Vol. 36, No. 2, Tschannen-Moran, M Fostering Organizational Citizenship in Schools: Transformational Leadership and Trust. Journal of Educational Administration. Chapter 6, COPY RIGHT 2013 Institute of Interdisciplinary Business Research 474