THE ROLES OF PERCEIVED ORGANIZATIONAL SUPPORT IN MODERATING EFFECTS OF COMPETENCY, WORK STRESS AND COMPENSATION ON PERFORMANCE

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1 THE ROLES OF PERCEIVED ORGANIZATIONAL SUPPORT IN MODERATING EFFECTS OF COMPETENCY, WORK STRESS AND COMPENSATION ON PERFORMANCE Muhammad Syukri Doctoral Program Sekolah Tinggi Ilmu Ekonomi Indonesia Surabaya. Budiyanto Sekolah Tinggi Ilmu Ekonomi Indonesia Surabaya. Khuzaini Sekolah Tinggi Ilmu Ekonomi Indonesia Surabaya. ABSTRACT T he objective of this study was to analyze the role of perceived organizational support in moderating the effects of competency, work stress and compensation on job performance. Population and sample were health-care personnels at sub-district level and village level whose duty was to develop Desa Siaga Aktif or 'Alert Village' in Barru Regency. The primary data was collected in the form of questionnaires to 77 personnels who participated in this study. As the results, the perceived organizational support was able to strengthen the effect of work stress on the performance of health-care personnels. Furthermore, the perceived organizational support could not moderate the influence of competency and compensation on the performance of health-care workers. Keywords: Perceived Organization Support, Performance. Competency, Work Stress, EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 45

2 1. INTRODUCTION Desa and Kelurahan Siaga Aktif (Alert Village) is a national programme in Indonesia. This is one of indicators in providing as well as assisting basic health services for communities at villages and regions. The main activity of alert village is to empower communities to agree and to enable living healthy. Therefore, this study argues that some steps are required to develop into the program through an educative approach, i.e. assisting or facilitating communities to experience their learning process in solving health problems they have. In relation to the implementation of governmental program, the health service for community has brought consequences on health-care workers. The personnels are expected having adequate abilities and skills, positive attitude and good behavior to produce and maintain their qualified job performance. The scope of job performance review can be figured from roles of each employee and be focused on the employees' work results in relation to the achievement of organizational goals, structural groups and functional groups, and the achieved work within a working unit. Moreover, various treatments that are received by employees will be apprehended as stimulus and interpreted as perceptions of organizational support. In turn, the employees' perceptions can cultivate their trust and confidence on rewards that the organization has given for the employees' contributions. 2. THEORETICAL REVIEW 2.1 Competency Competency may relate to employees' job performance. In particular, Boulter, Dalziel and Hill (1996) define competency as the basic characteristic of a person that enables them to produce superior performance in their job. The level of competence is skill, knowledge, self concept, self image, trait and motive. Besides, Spencer and Spencer (1993) identify that competency is "an underlying characteristic of an individual that is casually related to criterion - referenced effective and/or superior performance in a job or situation". According to Boyatzis (1982), competency is the capacity that exists within a person so he or she is able to meet what is required in the workplace. Then, the employee's capacity will lead his or her company achieving its expected results. Otherwise, Woodruffe (1993) distinguishes between competence and competency. Competence is defined as a work-related concept denoting a work area in which employees are considered competent. While competency is a basic concept in relation to employees' dimensions of behavior underlying their superior performance. In brief, competency refers to an ability that has been professionally trained. 2.2 Work Stress Work-related stress is an influenced factor for employees in the workplace. Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand that is associated with what he really wants and the outcome is perceived as uncertain and important (Robbins 2002: 304). Moreover, Dunham (1992) defines stress as a prolonged process of behavior, emotional, mental and psychic reactions, increased or new pressures greater than an individual's ability. Then, Beehr and Newman (1978) explain that job stress can be grouped into four parts, such as: the roles of demand and expectation, job demand and task characteristics, conditions and characteristics of workplace, and conditions and demands of external workplace. Concisely, work stress may affect employees' job performance. 2.3 Compensation EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 46

3 Compensation is a system of appreciating employees. It is figured as reward, payment and prize (Shadily et al., 2004). Compensation is also described as the variety of stimulus and verbal statement that can produce individuals' satisfaction and increase individuals' probability of an action (Chapilin, 2004). Moreover, compensation is a reward or remuneration that can stimulate the production of satisfaction and strengthen an act by providing job promotion, career development and compensation so that employees can work better (Jayanti, 2014). Shortly, compensation is a company's approach to supply monetary value as well as to provide verbal appreciation so its employees can advance their job performance. 2.4 Perceived Organizational Support Perceived Organizational Support is correlated with values that employees believe in their organization. In particular, Eisenberger et al. (2002: 699) describe it as employees' global beliefs about what organizations care about their prosperity and how the organizations appreciate the employees' contribution. Besides, the experts of social exchange theory argue that resources exchanged between partners are due to socioemotional behaviour, like communicating about appreciation and reputation (Suhermin, 2012). Moreover, Wayne (1997) argue that perceived organizational support is a global belief conveyed by employees to the extent which an organization has commitment to its employees. This assurance is viewed from the organization's appreciation to the employees' contribution and the organization's attention to their lives. Therefore, such perspectives lead for employees' consistency to carry out various assessments that may be provided to them as well as to take every actions that the organization administer for either advantageous or disadvantageous to them. Briefly, the employees have overall confidence to perform their contribution for perceiving particular organizational support in the workplace. 2.5 Performance Performance can be related to employees' work consequences. Performance is the achievement of organizational goals that can be shaped of both quantitative and qualitative outputs, creativity, flexibility, reliability, and other matters desired by the organization (Robbins, 2008: 146). Performance can also be achieved at the individual, group or organizational level. Hence, Gomes (1995) identify the characteristic of employee performance as the expression of output, efficiency and effectiveness that are often associated with productivity. Moreover, Gibson et al (2012) states that performance is a desirable outcome of behavior. Briefly, the emphasis on performance can be measured for both short and long term, depending on the period of goal achievement in the workplace. 2.6 The Effect of competency on performance Competency has extensive and distinctive meanings. Its implementation can be adjusted to the needs of an organization and individuals within the organization. Obviously, competency is a capability that is used as a standard performance of a person who is expected to contribute positively to the organization performance. Accordingly, some researches, for example, Ahern et al. (2005) and Murgianto et al. (2016) found that competency can affect performance. However, inconsistent research result is indicated by Colakoglu (2013) that competency gives no impact on performance. Thus, this study proposes the first hyphothesis as follow: H1: The competency affects the performance of health-care personnels 2.7 The Effect of Work Stress on performance EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 47

4 According to Davis and Newstrom (1989), stress as a form of condition that affects one's emotions, mind, and physical condition. Sarafino (1997) expresses stress is a condition that is caused by the existing situation, not in accordance with the resources of the biological system, psychological and social systems being concerned. In another research about the influence of motivation, work environment and work stress towards the performance of nurses, Sipatu (2013) indicates that work stress has positively significant effect on performance. In contrast, Sandhi (2013) finds that job stress negatively significant to employee performance. Moreover, Manzoor et al. (2012) argues that work stress does not affect employee performance. Therefore, this study proposes the second hyphothesis as follow: H2: The work stress affects the performance of health-care personnels 2.8 The Effect of Compensation on performance Compensation is basically a remuneration given by an organization for services that have been done by its employees. Awarding a compensation within an organization needs to be properly regulated so a fair compensation system can be developed in the workplace well. In addition, the amount of compensation given to an employee depends on his or her degree of contributed energy and thought given to the organization. Accordingly, Sinollah (2011), Yaseen (2013), and Putra et al. (2014) confirm that appropriate compensation will affect employee performance. In other words, compensation is a factor affecting performance (Fitrianasari et al., 2013 and Putra et al., 2014). Increasing compensation will also encourage employees to work better and more productively. Instead, proper compensation is able to keep employees continuing to work in the organization. On the other hand, different research results are found by Rizal et al. (2014) and Juniarti (2014). They indicate that compensation has no effect on performance. Furthermore, this study formulates the third hyphothesis below: H3: The compensation affects the performance of health-care personnels 2.9 The Role of Perceived Organizational Support in Moderating the Effects of Competency, Work Stress, and Compensation on Performance The perceived organizational support is indicated important for employee performance. According to Eisenberger et al. (2002), the perception of organizational support will lead employees' expectation that the organization will provide greater rewards for greater efforts so the organizational goals can be achieved. Moreover, the hopes and commitments will enhance employee efforts to help achieve organizational goals through improved service and performance. Similarly, researches of Malisa (2009) and Miao and Kim (2010) support the positive influence of organizational perceptions support employee performance. Another research of Rahmanto and Kusendi (2011) also indicates that organizational support provides a significant role in reducing employee stress, thereby providing an impact of performance improvement. Furthermore, this study proposes further hyphothesis as follow: H4: The perceived organizational support moderates the effect of competency on the performance of healthcare personnels H5: The perceived organizational support moderates the effect of work stress on the performance of healthcare personnels H6: The perceived organizational support moderates the effect of compensation on the performance of healthcare personnels EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 48

5 In addition, this study draws a conceptual framework as the Figure 1 below Perceived Organizational Support Competency H1 H4 H5 H6 Work Stress H2 Performance Compensation H3 Figure 2.1: Conceptual framework 3. RESEARCH METHODS In this study, the population were the existing health-care workers at the sub-district level and the village level in Barru Regency, Indonesia. They were identified participating the development program of Desa Siaga Aktif or 'Alert Village'. In addition, the samples were 77 personnels who actively engaged in Alert Vilage within Barru Regency. For this, the sample technique applied a census so the entire population was used as samples. Furthermore, the collected data of this study was primary data. Data analysis was based on the results of questionnaires that would be described in figures, tables, statistical analysis, descriptions and conclusions of research results. Then, the analytical tool applied PLS (Partial Least Square) method. 4. RESEARCH RESULT In this study, most participants were in the range of years old (41 people or 53.2%). Most of them were women, 44 people or 57.1% of the participants. About 70.1% of the investigated health-care personnels (54 people) had 6-10 years of working period. Questionnaires were then distributed to the participants. Then, the data was analyzed by using a method of PLS (Partial Least Square). As the analytical technique, the parameter for the existence or absence of effects between variables could be known through t-statistics value, with provision through comparison t-statistics> 1,96. As the result, there was no exogenous variable that influenced endogen variable or endogen variable to endogen variable. Conversely, if t-statistics <1.96 then there is no influence of exogenous variables on endogenous variables or endogenous variables on endogenous variables. EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 49

6 Table 4.1: Hypothesis Testing with Inner Weight Hip. Effects between Variables Coefficient Path T stat. Notes H 1 Competency Performance Affected H 2 Work Stress Performance Affected H 3 Compensation Performance Not affected H 4 Perceived organizational support moderated the effect of competence on performance Not moderated H 5 Perceived organizational support moderated Moderated (strengthening the effect of job stress on performance due to positive coefficient) H 6 Perceived organizational support moderates the effect of compensation on performance Not moderated 5. DISCUSSION This study aimed to analyze the role of perceived organizational support in moderating the effects of competency, work stress and compensation on job performance. In this study, competency was defined as a capability that was used as a standard performance of a health-care personnel who was expected to contribute positively to the performance of health-care provider. The personnels' increasing competency was considered having a great impact on their job performance since they tended to contribute higher degree of competency in achieving their performance. Likewise, the health-care personnels' increasing competency was indicated advancing their organizational support as well as their job performance. Moreover, this study found that work stress affected the job performance of health-care personnels in Barru Regency. Work stress happened due to a worker's responses on a condition or an event as the result of interactions between workers within an organization. Obviously, work stress was considered being able to disturb the health-care personnels' physical and psychological conditions. Besides, the higher degree of work stress was indicated increasing the tendency of work conflicts between employees that, in turn, could degrade their performance level. Therefore, this study was in line with Suhermin's research (2015) confirming work stress that occurs among workers may have different effects. Then, this study indicated that compensation did not have an effect on the performances of health-care personnels who implemented a program of alert village in Barru Regency. To this extent, the participants argued that the remuneration and compensation system in Barru Regency is based on standard that is regulated by the government. In fact, the personnels who perform their work excellently and those who perform deficiently were treated the same. As the result, compensation had no greatly impact on job performance. In this study, competency was also seen having an affect on the performance of health-care personnels, either for those who got excellent organizational support or for those who were lack of organizational support. Therefore, this study argued that the health-care offices in Barru regency had to pay more attention on personnels' competency in order to produce and maintain better job performance of their personnels. In addition, the perceived organizational support could strengthen the effect of work stress on the performance of health-care personnels. This study showed that those who had higher work stress were described having low performance in the workplace. In other words, decreasing the health-care personnels' work stress would EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 50

7 be able to establish their performance. Thus, it could be argued that to generate excellent performance of personnels, the health-care offices in Barru regency had to provide adequate attention on the personnels' work stress and organizational support. In particular, the participants conveyed that their works had been overload and their salary was least appropriate. When a person is provided with a good treatment, then he or she will respond with good behavior as well due to the reciprocal norm. Hence, this study added an argument that the health-care offices in Barru regency needed to pay attention on the compensation as well as the perceived organizational support in order to produce good performance of health-care personnels. This was in relation to the indicators of bonus and salary which were still in lowest amount. 6. CONCLUSION This study investigated the role of perceived organizational support in moderating the effects of competency, work stress and compensation on job performance of health-care personnels in Barru Regency. This study indicated that the organizational support did not moderate the influence of competency towards the job performance of personnels who were active in a program of alert village. Moreover, the organizational support strengthened the effect of work stress on the performance of health-care personnels in the program implementation of alert villages in Barru district. In contrast, the organizational support did not moderate the effect of compensation on performance of health-care personnels program implementation of alert villages in Barru district. EUROPEAN JOURNAL OF BUSINESS AND SOCIAL SCIENCES 51

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