The Effect of Job Characteristics and Compensation to Work Satisfaction and Organization Commitment on All Lpd Kerambitan Tabanan

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1 Research Available Online at International Journal of Contemporary Research and Review ISSN CrossRef DOI: March, 2018 Volume 09 Issue 03 Section: Section: Management and Economics The Effect of Job Characteristics and Compensation to Work Satisfaction and Organization Commitment on All Lpd Kerambitan Tabanan Bagus Nyoman Kusuma Putra, I Nengah Sudja, Luh Kadek Budi Martini Student of Magister Management Program, Post Graduated Universitas Mahasaraswati Denpasar Received ; Accepted Abstract: Job characteristics are the nature of the task that includes the responsibilities, tasks and levels of satisfaction derived from the work itself. Compensation is something that employees receive in exchange for the contribution of their services to the organization. Job satisfaction is a set of employee feelings about the fun or the absence of their work. Organizational commitment is a desire or encouragement from within an individual to take an active role in making endeavors to realize organizational goals. The purpose of this study is to examine the effect of job characteristics and compensation on job satisfaction and organizational commitment on LPD staffs of the Kerambitan, Tabanan. The sampling technique used is proportional random sampling. The sample in this research is 86 employees in all LPD Kerambitan Tabanan. Data analyst method used is SEM analysis (Structural Equation Modeling) based on component or variance that is PLS (Partial Least Square). The result of research indicate that job characteristic and compensation variable have positive effect to job satisfaction. Job characteristics do not affect organizational commitment, while compensation has a positive effect on organizational commitment either partially or through job satisfaction. Job satisfaction has a positive effect on organizational commitment. Keywords: Job Characteristics, Compensation, Job Satisfaction and Organizational Commitment Introduction: Village Credit Institution (LPD) can be interpreted as one type of non-bank institution that helps provide services to customers related to their activities, ie investment from the community in the form of time deposits, savings, credit, or other similar forms. Village Credit Institution (LPD) has very important role because it has been serving small and micro enterprises (MSEs) and communities in Desa Pakraman in Bali through financial services that are done in accordance with the needs of the community, namely simple procedures, short process, personal approach, and proximity of LPD locations or offices with customers. Organizational commitment becomes the focus of the company, because the commitment of members of the organization becomes important for an organization in creating the survival of an organization regardless of its organizational form (Kingkin, et.al 2010: 18). According to Hasibuan doi: Page 20572

2 (2001: 202), job satisfaction is a pleasant emotional attitude and loves his job. Job satisfaction (job statisfaction) employees should be created as well as possible so that work morale, dedication, love and discipline of employees increases. This attitude is reflected by work morale, discipline and work performance. Job satisfaction can be affected by two variables, namely job characteristics and compensation. Job characteristics are related to how employees judge the tasks in their work (Isrorina and Setyowati, 2009: 2). Good organization should consider the job characteristics for the achievement of organizational goals effectively and efficiently (Djastuti, 2011: 2). Furthermore, according to Simamora (2004: 445) defines compensation as broad terminology relating to financial and non financial reward received by people through employment relationships with an organization. With the compensation given, employees will be able to meet physical needs, social status, and egoistiknya so get job satisfaction from office. Formulation of The Problem: From the background described above, the author formulates the problem as follows: 1) How is the effect of job characteristics to job satisfaction on all LPD staffs of Kerambitan Tabanan? 2) How is the effect of compensation on job satisfaction on all LPD employees of the Kerambitan Tabanan? 3) How is the effect of job characteristics on organizational commitment on all LPD staff of the Kerambitan Tabanan? 4) How is the effect of compensation on organizational commitment on all LPD staff of the Kerambitan Tabanan? 5) How is the effect of job satisfaction on organizational commitment on all LPD employees of Kerambitan Tabanan? Research Purposes: Based on the formulation of the issues raised, the purpose of this study is: 1) To examine the effect of job characteristics on job satisfaction on all LPD staffs of Kerambitan Tabanan. 2) To examine the effect of compensation on job satisfaction on all LPD staffs of Kerambitan Tabanan. 3) To examine the effect of job characteristics on organizational commitment on all LPD staffs of the Kerambitan Tabanan. 4) To examine the effect of compensation on organizational commitment on all LPD staffs Kerambitan Tabanan. 5) To examine the effect of job satisfaction on organizational commitment on all LPD employees of Kerambitan Tabanan. Benefits of Research: The results of this study are expected to contribute in the development of management science in the field of marketing, especially the theory of service quality. This research can provide input and suggestions to the related management to increase job satisfaction and employee commitment to all LPD Kerambitan Tabanan which is based on giving job characteristic and compensation. Literature Review: Job Characteristics: Job characteristics is a different nature between the types of work that one with other work that is special and is the core work that contains the properties that exist in all jobs and felt by the workers thus affecting the work behavior of the work. The indicators used to measure job characteristics in this study use indicators used by Hackman and Oldham (1975: 160), that is variation of skills, task identity, task significance, autonomy and job feedback. Compensation: Compensation is something that employees receive in exchange for the contribution of their services to the organization. If managed properly, compensation helps the organization achieve its goals and obtain, maintain, and keep employees well. Conversely, without adequate compensation, current employees are likely to leave the organization, and organizations will find it difficult to recruit employees as needed. The indicators used to measure compensation in this study use indicators used by Mondy and Noe (1996: 374), that is: Financial Compensation: Financial compensation may include salary or wages, benefits, bonuses, doi: Page 20573

3 commissions, employment insurance, health insurance, social assistance, payment of medical expenses etc. Non Financial Compensation: Non financial compensation may include opportunities for growth, training, authority and responsibility, praise or rewards for performance, a comfortable workplace, adequate office facilities and a good co-worker. Job Satisfaction: Job satisfaction is a general attitude toward a person's job that shows the difference between the amount of rewards people receive and the amount they believe they should receive. Job satisfaction is an affective or emotional response to various aspects or aspects of a person's job so job satisfaction is not a single concept. One can be relatively satisfied with one aspect of the job and dissatisfied with one or more other aspects. The indicators used to measure job satisfaction in this study use the indicators used in the book entitled Organizational Behavior Colquitt, Lepine, Wesson (2013), that is: salary, promotion, supervision, coworkers, the work itself, altruism, status and social environment. Organizational Commitment: Organizational commitment is a desire or encouragement from within an individual who understands his existence in a company where he works who are always willing to take an active role in making endeavors to realize company goals and contribute positively to the organization. The indicators used to measure organizational commitment in this study use indicators used by Allen and Meyer (1990: 2), that is: 1) Affective commitment: Affective commitment is defined as the degree to which an individual ispsychologically bound to an organization that employs it through feelings such as loyalty, affection, as it agrees with organizational goals. Based on that definition, the affective commitment of an individual relates to the emotional bond or identification with the organization, assumes that the problem faced by the employee is an employee's own problem, and the employee feels part of the organization. 2) Continuous commitment: Continuous commitment is a commitment built on loss if the organization, which is often interpreted as a calculative commitment. In other words, an employee has a strong ongoing commitment because they feel they need it and there is consideration of the cost of losing an organization (such as retirement, status, seniority) or finding alternative employment elsewhere. 3) Normative commitment: Normative commitment is the belief of the employee that he or she feels to be living or staying in the organization because of a personal loyalty, so that employees with high normative commitment will persist in the organization because they feel they have to do, by obeying the rules set by the organization and not make an effort to leave the organization. Effects between Job Characteristics to Job Satisfaction: Job characteristics according to Handaru, et al (2013: 242) is a different nature between the types of work that one with other work that is special and is the core work that contains the characteristics that exist in all jobs and felt by the workers so that affect the work behavior against his job. Imelda (2014) and Ida (2015) states that job characteristics have a positive effect on job satisfaction. H 1: Job characteristics have a positive effect on job satisfaction Effects between Compensation to Job Satisfaction: Compensation that is able to motivate employees to remain in the organization and unwittingly will grow a sense of satisfaction and have towards the organization where work. The results of the study by Hestin (2013) states that there is no positive and significant to employee job satisfaction, whereas according to research by Mary (2015) states that with basic salary, salary allowances and working conditions have a positive effect on job satisfaction. H 2 : Compensation has a positive effect on job satisfaction Effects between Job Characteristics to Organizational Commitment: The higher level of job characteristics is to provide a variety of jobs, clear job identity, giving freedom in the implementation of work and adequate feedback, the higher the level of organizational commitment. Conversely, when the level of job characteristics doi: Page 20574

4 decreases, it can also decrease the level of organizational commitment. The results of Noviana's (2013) study indicating job characteristics as measured by skill variation, task significance, autonomy and feedback have a positive effect on organizational commitment, while task identity negatively affects organizational commitment. Research by Sadegh (2015) states that job characteristics are measured by nature of task, job autonomy, diversity of skill, feedback and importance of duty have positive and significant effect on organizational commitment. H 3 : Job characteristics have a positive effect on organizational commitment. Effects between Compensation to Organizational Commitment: Compensation is simply defined as a form of compensation in the form of money, goods or enjoyment given by the company to employees for the performance contributed to the company. Employees who feel that the company has fulfilled its obligations fairly and satisfied will provide Feedback, one of which is a commitment to the organization according to Exchange theory. The results of Noermijati (2015) and Mohammed (2014) states that compensation has a positive and significant impact on organizational commitment. H 4 : Compensation has a positive effect on organizational commitment Effects between Job Satisfaction to Organizational Commitment: High employee job satisfaction will show a positive attitude towards his job or likes his job, otherwise employees with low job satisfaction level (not satisfied) will show a negative attitude towards his job or do not like his work. Employees who are satisfied with their work tend to love their organizations more than dissatisfied employees because they feel they have been noticed by the company when employees receive satisfaction from their workplace, they will show a pleasant attitude toward the work and ultimately increase their commitment to the organization. The results of research by Jadongan (2011) and Elisabeth (2014) stated that job satisfaction has a significant positive effect on organizational commitment. H 5 : Job satisfaction positively affects organizational commitment Research Methods: This study is a research that is test and analyze the determinants of job satisfaction and organizational commitment based on job characteristics and compensation involving all employees of LPD Se Kerambitan Tabanan with the number 113 people who have 2 years terms of service. Validity and reliable test conducted pre-research testing on 30 employees. The number of respondents consists of 86 people obtained from the slovin formula. Sampling technique with proportional random sampling. Data were collected by distributing questionnaires and processed by means of analysis. The study used four variables: job characteristics, compensation, job satisfaction and organizational commitment. To test and analyze the data processed by using data analysis technique is PLS with SmartPLS Version 3.0. Analysis and Discussion: Hypothesis testing can be sorted into direct effects of effects and testing of indirect effects or testing of mediation variables. Based on if the data found that the results of hypothesis testing is presented in Table 1 as follows: Table 1 Hypothesis Testing Results Job Characterisic Job Satisfaction Compensation Job Satisfaction Job Characterisic Organizational Commitment Compensation Organizational Commitment Job Satisfaction Organizational Commitment Path Coefficient (Bootsrapping) T- Statistics 0,321 2,891 0,566 5,619 0,151 1,610 0,514 6,118 0,268 2,126 Descript H1 Accepted H2 Accepted H3 Is Rejected H4 Accepted H5 Accepted doi: Page 20575

5 1. Hypothesis test results show that job characteristics have a positive and significant effect on job satisfaction on all LPD Kerambitan Tabanan. This result can be seen on the coefficient value of with the value of t- statistics of The value of t-statistics is above the value of Based on this hypothesis 1 is accepted. 2. Hypothesis test results show that compensation has a positive and significant effect on job satisfaction on all LPD Kerambitan Tabanan. This result can be seen on the coefficient value of with the value of t-statistics of The value of t-statistics is above the value of Based on this hypothesis 2 is accepted. 3. Hypothesis test results showed that job characteristics have a positive and significant effect on organizational commitment on all LPD Kerambitan Tabanan. This result can be seen on the coefficient value of with the value of t- statistics of The value of t-statistics is below the critical value of Based on this hypothesis 3 is declared rejected. 4. Hypothesis test results show that the compensation does not affect the organizational commitment on all LPD Kerambitan Tabanan. This result can be seen on coefficient value of 0,514 with t-statistics value equal to 6,118. The value of t-statistics is above the value of Based on this hypothesis 4 is accepted. 5. Hypothesis test results show that job satisfaction has a positive and significant impact on organizational commitment on all LPD Kerambitan Tabanan. This result can be seen on the coefficient value of with the value of t- statistics of The value of t-statistics is above the value of Based on this hypothesis 5 is accepted. Indirect Effects Testing Through Mediation Variables The hypothesis testing of indirect effects in this study can be presented the results of its analysis in Table 2 as follows: Table 2 Recapitulation of Test Result of Satisfaction Mediation Variable No Mediation Variable Job Satisfaction (Y1) on: Effect (A) (B) (C) (D) Descript 1 Job Characterisic (X 1 ) Organizational Commitment (Y 2 ) 0,321 (Sig) 0,268 (Sig) 0,151 (No Sig) 0,088 (No Sig) No Mediation 2 Compensation (X 2 ) Organizational Commitment (Y 2 ) 0,566 (Sig) 0,268 (Sig) 0,514 (Sig) 0,362 (Sig) Partial Mediation 1. Job satisfaction (Y1) is not as mediation because C and D values are insignificant and A's value is significant on indirect effect of job characteristics (X1) on organizational commitment (Y2). These findings provide clues that, job satisfaction variables (Y1) are not as mediating variables in the effects of job characteristics (X1) on organizational commitment (Y2). 2. Job satisfaction (Y1) is able to mediate positively and significantly on the indirect effect of compensation (X2) on organizational commitment (Y2). These results are shown from the mediation tests conducted, it appears the effects of A, C and D have significant value. This finding suggests that, the job satisfaction mediation variable (Y1) is not a key determinant of the effect on compensation (X2) on organizational commitment (Y2). doi: Page 20576

6 Table 3 Direct Effect, Indirect Effect and Total Effect No Relationship Variable Direct Effects Indirect Effects Total Effects 1 Job Characterisic (X 1 ) Job Satisfaction (Y 1 ) 0,321-0,321 2 Compensation (X 2 ) Job Satisfaction (Y 1 ) 0,566-0,566 3 Job Characterisic (X 1 ) Organizational Commitment (Y 2 ) 0,151-0,151 Job Characterisic (X 1 ) Job Satisfaction(Y 1 ) Organizational Commitment (Y 2 ) 0,151 0,321*0,268 (0,086) 0,237 4 Compensation (X 2 ) Organizational Commitment (Y 2 ) 0,514-0,514 Compensation (X 2 ) Job Satisfaction (Y 1 ) Organizational Commitment (Y 2 ) 0,514 0,566*0,268 (0,152) 0,666 5 Job Satisfaction (Y 1 ) Organizational Commitment (Y 2 ) 0,268-0,268 Overall, the compensation path (X2) job satisfaction (Y1) organizational commitment (Y2) is greater with the total effect gained by 0.666, compared to job characteristics (X1) job satisfaction (Y1) organizational commitment (Y2) with total effect of These findings provide clues that job characteristics and increasingly qualified compensation make employees increasing job satisfaction in work on all LPD Kerambitan Tabanan, so that later can increase organizational commitment that impact on the progress of a sustainable company. Discussion: Based on the results of PLS analysis, then in this section will discuss the results of calculations that have been done. Testing is shown through the existing hypothesis so it can know how the effects of each variable against other variables. The effect of job characteristics on job satisfaction to all LPD Kerambitan Tabanan The result of statistical data analysis shows that job characteristics have positive and significant effect to job satisfaction on all LPD Kerambitan Tabanan (path coefficient 0,321 with t-statistics value 2,891). The results of this study are supported by research conducted by Imelda (2014) and Ida (2015) which states that job characteristics have a direct, positive and significant impact on job satisfaction. The effect of compensation on job satisfaction to all LPD Kerambitan Tabanan The result of statistical analysis showed that compensation had positive and significant effect on job satisfaction on all LPD Kerambitan Tabanan (path coefficient of 0,566 with t-statistics value 5,619). The results are supported by research conducted by Mary (2015) which states that compensation as measured by basic pay, salary allowances and working conditions have a significant positive effect on job satisfaction. The effects of job characteristics on organizational commitment to all LPD Kerambitan Tabanan The result of statistical data analysis shows that job characteristics do not have an effect on organizational commitment on all LPD Kerambitan Tabanan (path coefficient 0,151 with t-statistics value 1,610). The effect of compensation on organizational commitment to all LPD Kerambitan Tabanan The result of statistical data analysis shows that compensation has no effect on organizational commitment on all LPD Kerambitan Tabanan (path doi: Page 20577

7 coefficient of 0,514 with t-statistics value 6,118). The results of this study are supported by research conducted by Muhamad (2014) and Noermijati (2015) which states that compensation has a positive and significant impact on organizational commitment. The effect of job satisfaction on organizational commitment to all LPD Kerambitan Tabanan The result of statistical data analysis shows that job characteristics have positive and significant effect to organizational commitment on all LPD Kerambitan Tabanan (path coefficient 0,268 and t-statistics 2,126). The results are supported by research conducted by Jadongan (2011) and Elisabeth (2014) stated that job satisfaction has a significant positive effect on organizational commitment. Conclusion: The conclusions of this study are as follows: 1. Job characteristics positively affect the job satisfaction on all LPD Kerambitan Tabanan, this indicates that the higher level of job characteristics will be the higher the employee's job satisfaction. 2. Compensation has a positive effect on job satisfaction on all LPD Se Kerambitan Tabanan, this indicates that the higher the level of compensation, the higher the employee's job satisfaction. 3. Job characteristics does not affect the organization's commitment on all LPD Kerambitan Tabanan, this indicates that the higher or lower level of job characteristics will not affect the organization's commitment owned by the employee. 4. Compensation has a positive effect on organizational commitment, either partially or through job satisfaction on all LPD Kerambitan Tabanan, this indicates that the higher the compensation rate will be the higher the commitment of the employee organization. 5. Job satisfaction has a positive effect on organizational commitment on all LPD Se Kerambitan Tabanan, this indicates that the higher level of employee job satisfaction will be higher also the commitment of the employee organization. Limitations of Research: is relatively short (cross-sectional). This limitation certainly has a low impact of generalization of research, given the problems faced by employees is relatively complex and dynamic from time to time. In addition to the development of more relevant indicators used in each variable, there are also many factors as determinants of job satisfaction and organizational commitment. This is because efforts to improve employee job satisfaction and employee commitment are crucial in an increasingly dynamic and erratic era. Suggestion: Suggestions from this research are as follows: 1. In optimizing the achievement of job satisfaction and organizational commitment on all LPD Kerambitan Tabanan should pay more attention and improve employee satisfaction and better commitment. Therefore, efforts should be put forward and develop better job characteristics and adequate compensation. 2. For future researchers it can replicate this research model through a longitudinal approach (over time) and allow it to be used in other companies. In addition, future researchers can modify the research model by adding and developing indicators and other variables. This is based on the job characteristics, compensation, job satisfaction and organizational commitment quite a lot and different from the conditions of each other company. References: [1] As ad, M Psikologi Industri : Seri Sumber Daya Manusia, Yogyakarta : Liberty. [2] Allen dan Meyer The Measurement and Antecedents of Affective Commitment, Continuance and Normative to the Organization. Journal of Occupational Psychology, 63: [3] Colquitt dan Wesson Organizational Behavior. Improving Performance and Commitment in the Workplace. New York : McGraw-Hill/Irwin doi: Page 20578

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