BUS603: Managing People

Employee Performance

Performance has diverse insights from various experts, but still has common ground. Armstrong's performance definition, performance is as behavior and the behavioral result that comes from the actors who change the performance from the abstract into the form of action. Not only is the instrument for achieving results, the behavior is something that stands alone, the product of a mental and physical effort that is applied in the execution of the task and can be judged separately from the results. Performance according to Daft is the organization's ability to maintain its objectives by using resources effectively and efficiently. Furthermore, the scope of performance of performance definition according to TR Mitchell, that performance includes several aspects, namely: (1) Quality of work; (2) Promptness; (3) Initiative; (4) Capability; (5) Communication.

Performance is one measure of actual behavior in the workplace that is multidimensional in nature, where performance indicators include: quality of work, the quantity of work, working time and cooperation with co-workers. Explanations of these performance indicators are: (1) Quality of work, the provision of quality products is a demand for the organization to survive in various forms of competition. Increased purchasing power and the existence of consumer support to the existence of the quality of work offered will further enhance the sustainability of the organization in achieving the goals set; (2) The quantity of work, the quantity of production will determine the ability of the organization to dominate the market, so with the quantity of work that can be produced the company is expected to give a positive impression to the position of products in the market; (3) Working time, determining the most efficient and effective working time at all levels of management, is the basis for an employee in completing a product or service he or she is responsible for; (4) Cooperation is a demand for the success of the company in achieving the goals set, good cooperation will provide confidence in various parties concerned, either directly or indirectly with the company. Companies must be able to build constructive internal conditions with high commitment and consistency to all levels of management.

Based on the definition of concepts that have been expressed by experts, it can be synthesized that performance is the work achieved by a person both quantity and quality in carrying out tasks in accordance with the responsibilities imposed to him and how much they can contribute to the organization. Performance is a real work achieved by a person in carrying out the tasks assigned to him based on his skills, experience, sincerity and time. Performance is also influenced by several factors, especially motivation, ability, skills, social security, compensation and achievement opportunities. With dimensions and indicators: (1) Work quality; (a) Quality generated, (b) The ability of employees. (2) The quantity of Work; (a) The work, (b) Activities completed. (3) Punctuality; (a) Work completion, (b) Time optimization. (4) Effectiveness; (a) Use of resources, (b) Maximize results. (5) Cooperation; (a) Constructive communication, (b) A harmonious working relationship.

Job Satisfaction

Human resource management experts and organizational behavior give definition or concept about job satisfaction with the expression of language and review from different perspectives but the meaning contained from the definition which they express at the same meaning that is job satisfaction is attitude and the general feeling from a worker to his work. Various definitions of job satisfaction are, among others, Gibson et al. (1996), job satisfaction is the attitude that individuals have about their work. These results from their perception of their work, based on work environment factors, such as the style of supervision, policies and procedures, affiliate working groups, working conditions and additional benefits. Job satisfaction made by Schermerhorn, Job satisfaction is the extent to which individuals feel positive or negative about their work.

Job satisfaction is also an emotional response to one's duties, as well as the physical and social conditions of the workplace. In concept, job satisfaction also shows the extent to which expectations in a person's psychological contract are met. This is in accordance with the explanation Marihot Tua Hariadja suggests that "Job satisfaction is the extent to which individuals feel positively or negatively various factors or dimensions of the tasks in their work". Some theories of job satisfaction are as follows:

Discrepancy theory by Porter

This theory explains that "An employee will be satisfied if there is no difference between what is desired and his perception of reality, by measuring one's job satisfaction by calculating the difference between what should be and the perceived reality". Next Locke said that "Employee job satisfaction depends on the difference between something earned and expected by the employee". If the employee gets bigger than expected then the employee will be satisfied and vice versa.

Equity theory (Adam's theory of justice)

The principle of this theory is that "People will feel satisfied or dissatisfied, depending on whether they feel the existence of equity or not in a situation". According to the theory of justice (equity theory) developed by Adam, it is said that "There are four main components in this theory, namely input, outcome, comparison person and equity-inequity". According to this theory, satisfied or unsatisfied employees are the result of comparing their input-output with the comparison of other employee input-outputs. If the comparison is felt fair then the employee will feel satisfied. However, inequity can result in two possibilities, the injustices that benefit him and the opposite of injustice that benefits other comparable employees.

Need fulfillment theory by Schaffer

The theory of need fulfillment was developed by Schaffer who said that "Job satisfaction will vary directly with the extent to which the needs of an individual which can be satisfied are actually satisfied". This statement was also confirmed by Anwar Prabu Mangkunegara who said that "Employee job satisfaction depends on the fulfillment or absence of the needs of employees, employees will feel satisfied when he gets the things he needs, the greater the needs of employees are fulfilled the more satisfied the employee and vice versa". This theory also considers that to measuring total job satisfaction can be done by combining several facet-satisfaction measures of some of the already weighted work factors. Furthermore, according to As'ad (2004) the factors that affect job satisfaction are: (1) Psychological factors, is a factor associated with the psychiatric employees that include interest, work comfortability, attitudes toward work, talents and skills; (2) Social factors are factors related to social interaction both among employees, with employers, or employees of different types of work; (3) Physical factors are factors related to the physical condition of the work environment and the physical condition of the employee, including the type of work, the working time and the rest period, work equipment, the condition of the room, temperature, lighting, air exchange, employee health conditions, etc.; (4) Financial Factor, is a factor related to employee guarantee and welfare covering system and amount of salary, social security, allowances, facilities provided, promotion and so on.

Of the several definitions, theories and factors that affect job satisfaction described above, it can be synthesized that job satisfaction is a part of life satisfaction related to the feelings and attitudes of a worker to his work, which directly affects the economy and behavior in work in the form of performance, discipline and work morale, with dimensions and indicators of measurement of job satisfaction are: (1) Work mentally challenged; (a) The nature of the work to be performed; (b) Workload and workload; (c) Promotion and training opportunities continue. (2) Supporting working conditions; (a) Company Policies and Procedures (b) Work tools and equipment; (c) Security. (3) Coworkers support; (a) Direct Supervisor; (b) Recognition and Appreciation.

Work Motivation

Motivation can be defined as a process that explains one's intensity, direction and perseverance in trying to achieve its goals. Motives are necessities, desires, drives or impulses. Positive motivational philosophy and practice can improve productivity and quality of work. Some motivational theories work as follows:

The hierarchy of needs theory by Abraham Maslow

Motivation is the set of forces that initiate, direct and keep people in their efforts to achieve goals. Hierarchical Motivation Theory according to Maslow, "Motivation is a process that starts from the needs of physiology and psychology that drive behavior or encouragement that leads to goals or incentives". Motivation includes 3 (three) interacting elements, namely: (1) Needs, needs to be created when there is physiological and psychological imbalance; (2) Encouragement, created to meet the needs; (3) Incentives, everything that can meet the needs and decrease encouragement. Maslow divides an important need for humanity into 5 (five) levels: (1) Physiological needs, the basic set of needs that are critical to human survival. These needs must be fulfilled before one wants to meet the above needs; (2) The need for safety (security), once the physiological needs are met then the need to protect oneself becomes the motivation of the next behavior. These needs include stability, freedom from fear and job security; (3) social needs (love and social needs) and once the needs of the body and security are met, new needs arise: ownership and belonging and the need to be accepted in social groups. Humans need others to relate and interact; (4) Needs of appreciation, after the three previous needs are met, there arises the need for rewards or the desire to excel; (5) Self-actualization, arises after all needs are met. It is a necessity to continue to grow and realize its full capacity and potential.

Theory X and theory Y by Dauglas McGregor

Theory X and Theory Y according to McGregor in his book The Human Side of Enterprise states that people in an organization can be managed through 2 (two) ways, namely: (1) More negatives, which fall within category X and (2) More positive, which falls within category Y. Presents 2 (two) views of man, to the assumption held by the manager, namely: Theory X, there are 4 (four): (a) Employees are inherently embedded in their dislike of work; (b) Employees disliking their work to be monitored or threatened with punishment for achieving goals; (c) Employees will avoid responsibility; (d) Most employees put security above all work-related factors, while the Theory Y is 4 (four): (a) Employees may view cooperation as reasonably as rest and play; (b) People will exercise self-direction and self-supervision if they commit to the target; (c) The average person will accept responsibility; (d) The ability to make innovative decisions.

Theory of two factors by Fredrick Herzberg

According to Widodo, this theory concerns the things that directly and indirectly affect the motivation of work, that there are 2 (two) important factors that must be considered in encouraging the motivation of members, namely: (1) maintenance factor or hygienic; and (2) motivator factors. Maintenance or hygienic factors are factors that cause dissatisfaction in the work and are extrinsic.

Achievement theory by David McClelland

Motivation by Ivancevich et al. in McClelland's theory of Achievement Theory, that motivation is a relationship with the concept of learning. He believes that many needs are derived from culture. Thus the key to understanding the process of motivation is interdependence on understanding and the relationship between needs, drives and incentives.

Expectancy theory by Victor Vroom

In the opinion of Kreitner & Kinicki, by arguing that the Expectancy theory of Victor H. Vroom, namely: Motivation boils down to the decision of how much effort to exert in a specific task situation. Motivation shortens the decision on how much effort is being made in a specific assignment situation. This Vroom Theory has the assumption that behavior derives from conscious choices among alternatives aimed at enlarging pleasure and minimizing suffering, at least 3 (three) different components, namely: (1) Direction, relates to what an individual chooses when he is confronted with a number of possible alternatives; (2) Intensity, refers to the strength of the response when the direction of motivation has been chosen; (3) Perseverance, referring to the length of time a person will continue to give their efforts. This theory argues that the high motivation of a person is determined by 3 (three) components, namely: (1) Expectancy, success in a task; (2) Instrumentality, namely the assessment of what will happen if successful in doing a task; (3) Valence (valance), i.e. response to outcomes such as positive feelings, neutral, or negative. High motivation if effort produces something that exceeds expectations, on the contrary motivation is low if the effort produces less than expected.

ERG motivation theory by Clayton Alderfer

This theory is an improvement of Maslow's hierarchy of needs. According to this theory, humans have 3 (three) levels of need, namely: E (Existence: existence), refers to the need for the existence of basic materials, such as shelter, healthy physical and psychological safety. In Maslow's hierarchy this need is a physical and security requirement; R (Relatedness: relevance), refers to the desire to have interpersonal relationships and social interactions similar to social needs and external components of the need for appreciation in Maslow's hierarchy; G (Growth: growth); refers to the desire to grow and develop its full potential. Usually this desire is met with the involvement of individuals within the organization. In Maslow's hierarchy, this need is similar to the intrinsic component of reward needs and self-actualization.

Goal setting theory by Locke

Furthermore, the theory of goal setting of motivation by Williams is: Motivation is the set of forces that initiates, directs and makes people persist in their effort to accomplish a goal. Motivation is an effort in the form of initiative, directing and making people commitment in trying to achieve goals.

From several definitions of concepts that have been expressed by experts, it can be synthesized that the motivation of work is a process of behavior in moving oneself starting from the fulfillment of physiology and psychology needs and the drive to meet certain needs or to achieve goals, with dimensions and indicators: (1) Needs; (a) Achievement, (b) Authority, (c) Affiliation; (2) Encouragement; (a) Achieving success, (b) Opportunities to grow, (3) Incentives; (a) Individually, (b) Together.

Compensation

One way of management to improve job performance, motivate and improve employee performance is through compensation. Compensation is important to employees as individuals because the amount of compensation reflects the size of their work among the employees themselves, their families and society. Compensation is often also called an award and can be defined as any form of reward given to employees as a reward for the contribution they give to the organization.

Compensation according to Dessler, employee compensation has 2 (two) main components: (1) Direct payments; (wages, salaries, incentives, commissions and bonuses), (2) Indirect payments; (financial benefits, such as: insurance and vacation paid by employers). According to Ivancevich, the purpose of compensation is to create an appropriate reward system for workers and employers, the desired outcome is a worker who is tied to his job and motivated to do a good job for the worker. The compensation given should reflect the value of a job. Compensation or compensation aimed generally for the benefit of the company and employees. The interest of the company with the compensation is to obtain a greater job performance. While the interests of employees for the compensation received that is able to meet the needs and desires and become household economic security.

Compensation according to Rivai, where the outline of the compensation program can be divided into 2 (two) major groups, namely: (1) Based on the form, divided into; (a) financial compensation; (b) compensation non-financial (non-financial compensation); (2) Based on the method of giving, divided into; (a) direct compensation, namely, (b) indirect compensation. Direct Compensation is the compensation that is directly felt by the recipient, i.e. in the form of salary, wages, incentives is the right of employees and the obligation of the company to pay for it. Indirect compensation is the compensation that employees can not directly perceive, i.e. benefits and services.

Of the several definitions of concepts that have been expressed by experts, it can be synthesized that the compensation is a reward received by someone in return for his efforts either in the form of money or in the form of other rewards that make the person feel satisfied with the work that has been achieved and is a compensation which is given to employees as a means to achieve organizational goals that include: extrinsic aspects in the form; salary and wages, benefits, incentives and additional income, as well as intrinsic aspects of the form; responsibilities, challenges and the nature of the work, abilities, skills and growth of personal qualities, with dimensions: (1) Direct financial compensation; employee payment in form; (a) salary; (b) wages; and (c) incentives; (2) Indirect financial compensation or benefit; all payments not covered by direct financial compensation, including; (a) insurance; (b) benefits; (c) retirement.

Based on literature review and frame of thought, hence hypothesis in this research can be formulated as follows:

1. Compensation has a significant effect on work motivation.

2. Compensation has a significant effect on job satisfaction.

3. Work Motivation has a significant effect on job satisfaction.

4. Compensation has a significant effect on employee performance.

5. Work Motivation has a significant effect on employee performance.

6. Job Satisfaction has a significant effect on employee performance.