Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Review Article: 2018 Vol: 17 Issue: 5

Effect of Work Stress, Organization Culture and Job Satisfaction toward Employee Performance in Bank Maluku

Maartje Paais, Universitas Kristen Indonesia Maluku

Keywords

Globalization, Work Stress, Organization Culture and Job Satisfaction, Employees Performance and Development Industry.

Introduction

Human resources are important assets for organizations where the role of human resource management is to maintain and improve employee performance. Employee performance will affect the achievement of company goals that have been set. Very low employee performance will cause the company to experience losses which can then end with the closure of the company. The performance of contributing to the company is important for every company to maintain and improve the performance of its employees in accordance with the desired goals (Hanim, 2016).

In the world of work, work stress problems are often experienced by employees and have an effect on employee performance, while the employee performance is influenced by many things including, work stress, work culture and job satisfaction (Kazmi et al., 2008, and Yusnimar & Mahdani, 2015). Tsai (2018), Huang et al. (2018), Van et al. (2018), Mone & London (2018) and Buchanan & McCalman (2018) suggest that high job satisfaction will improve performance. Besides that, Mwangi et al. (2018), Israel (2018), Chung et al. (2018) and Kossek & Lautsch (2018) revealed that if the level of low satisfaction would reduce performance. When stress is high, job satisfaction decreases and when stress levels are low, performance will be increased (Khuzaeni, 2013).

Bank Maluku is able to maintain its best performance despite the trend of slowing national economic growth. In general, the financial performance of Bank Maluku in the last two years is proud; this is proven by the success of obtaining the “Very Good” predicate based on the info bank rating for the December 2015 and December 2016 performance. For the category “Core capital under IDR 1 trillion (Book I) assets of IDR 5 trillion and above”. The hard work is inseparable from solid management, this is evident where throughout 2016, and Bank Maluku was able to record a Net Profit of IDR 140 billion. This achievement, consistently so as to Semester I of 2017, where the company is able to record Net Profit of IDR 85 billion or grow 47 percent from the position of June 2016 and has met the target set out in the Bank’s Business Plan for in 2017. While the loan portfolio reached IDR 3.67 trillion or grew by 9.5 percent compared to last year. Until December, the company targets a minimum loan distribution of IDR 3.7 trillion, which is a growth of at least 10% from 2016 (Bank Maluku, 2017).

The phenomenon that occurs is that employees at Bank Maluku have an organizational culture that can affect job satisfaction and can improve employee performance. This can be seen from the employee's compliance with the organization, the culture in completing the work is given by the leader or has become a duty and responsibility, as well as the communication patterns that occur between the leadership and employees and employees with employees.

Job stress that is owned by Bank Maluku employees has an impact on increasing job satisfaction and employee performance, where the employee work stress is caused by workload, the pressure in completing quite a lot and complex work, relatively unfavorable interaction between co-workers that can cause work stress and the attitude of employees in procrastinating work. Besides the level of job satisfaction of employees who have not felt satisfied, this may be influenced by work environment factors, work relationships between employees and with the leadership and saturation factors because doing the same job in a relatively long period of time causing boredom and resulting in decreased satisfaction work. This was stated by Paramita et al. (2016) that Job satisfaction can change with appropriate consideration and directed application of Organizational Communication and optimal handling of Job Stress from the management of one agency or company.

Although performance assessment has been implemented but employees were still assumed to be less knowledgeable in finding out how far has they met the requirement, this would affect employee’s attitude or behavior in their work. Employee’s attitude or behavior can be traced back to its job dissatisfaction, and if it goes on without solution it might eventually affect organizational performance. Moreover, assessment was felt subjective and mostly was done by using feeling-based assessment criteria (judgment), by predicting employees’ performance according to the feeling of each assessor. The same goes with result of this performance assessment which haven’t give lots of contribution to employee’s development and the firm’s human resources policies. Human resources in each firm have a very important role, either individually or in groups. Performance reviewed in this study was particularly employee’s performance of Bank Maluku of Maluku Ambon Province.

LITERATURE REVIEW

Employee Performance

Performance is the work quality and quantity achieved by the employee within a certain period of time-based on skills, experience, and excellence in accordance with the responsibilities given to him (Dharma, 2005). According to Rivai (2006) performance is the result or level of success of a person as a whole during a certain period in carrying out tasks compared to the standard of work, targets or targets or criteria that have been determined in advance and mutually agreed upon. The success of an organization is influenced by performance (job performance) employees, for that each company will try to improve the performance of its employees in achieving organizational goals that have been set (Yusnimar & Mahdani, 2015).

From some of the opinions above, it illustrates that performance is work that can be measured through certain measurements (standards) by considering the quality, quantity, and timeliness of work, where quality is related to the quality of work produced, while quantity is the amount of work produced within a certain period of time and timeliness is the suitability of the planned time. The performance concept used in this study refers to the opinion of Dharma (2005), where performance is measured based on three indicators, namely work quality, work quantity, and work standards.

Job Satisfaction

Job satisfaction is a positive emotional state of evaluating one's work experience (Matheis & Jackson, 2001). Job dissatisfaction arises when these expectations are not met. According to Kreitner & Kinicki (2001; 271) job satisfaction is “an effectiveness or emotional response to various aspects of work”. Job satisfaction is an effective or emotional response to various aspects or aspects of one's work so that job satisfaction is not a single concept. According to Prihatsanti & Dewi (2010) job satisfaction is a basic indicator of individual success in the workplace that has been achieved by maintaining the relationship between him and the work environment, which consists of intrinsic and extrinsic satisfaction. The concept of employee satisfaction used in this study refers to Ghiselli & Brown (2003) opinion, namely Rank/class, Position/position, financial guarantee and social security, and Quality of supervision.

Work Stress

Stress can be defined as a condition of tension that affects the emotions, the process of thinking and the condition of a worker. Conditions that tend to cause stress are called stressors (Luthans, 2002). According to Robbins (2008) stress is a dynamic condition in which an individual is confronted with an opportunity, obstacle, or demand that is associated with what is highly desirable and the results are perceived as uncertain and important. Whereas according to Hasibuan (2003) stress is a condition of tension that affects one's emotions, thought processes, and conditions. People who experience stress become nervous and feel chronic anxiety. Meanwhile, according to Effendi (2012) job stress is the tension or emotional pressure experienced by someone who is facing enormous demands, obstacles and the existence of very important opportunities that can affect one's emotions, thoughts, and physical condition. The concept of work stress according to Luthans (2002) is: extra organizational stressors, organizational stressors, group stressors and individual stressors.

Organizational Culture

Riani (2011) organizational culture as a pattern of basic assumptions found, created, or developed by a particular group with the intention that the organization learns to overcome or overcome the problems that arise as a result of external adaptation and internal integration that is already underway with good enough, so it needs to be taught to new members as the right way to understand, think and feel regarding these problems. According to Denison (1990), that organizational culture is the values, beliefs and basic principles that are the basis for management systems and practices and behaviors that enhance and strengthen these principles.

Some of the definitions above, it can be concluded that organizational culture is a way of thinking, working, behaving as organizational members in doing the work of members of the organization. Organizational culture generally emphasizes the importance of shared values and a bond of trust and influence on the behavior of members of the organization. This is what distinguishes one organization from another. The concept of organizational culture according to Denison (1990) is Mission, Consistency, Engagement, and Adaptability.

The following research framework (Figure 1) was used in the research work, developed based on the basis of the above mentioned literature review.

Figure 1: THE RESEARCH FRAMEWORK

Description:

Stressor Extra Organization (X1.1) Mission (X2.1) Title/category (X3.1)
Stressor Organization (X1.2) Consistency (X2.2) Position (X3.2)
Stressor Group (X1.3) Involvement (X2.3) Financial and Social Assurances (X3.3)
Stressor Individual (X1.4) Adaptability (X2.4) Monitoring Quality (X3.4)
Work Quality (Y1.1) Work Quantity (Y1.2) Work Standard (Y1.3)

RESEARCH MODEL

This study was an explanatory research, which explains relationship between variables through hypothesis testing. Samples used in this study were 196 employees of Bank Maluku by using Purposive Random Sampling technique. Data collection was using questionnaire with 1-5 Likert scale, by giving alternative written statements toward employees of the Bank with the objective to collect data concerning the observed variables. Data analysis in this study used Structural Equation Modeling (SEM) with Amos software. The model that will be used in this study is a causality model or relationship or influence and to test the proposed hypothesis, the analysis technique used is SEM (Structural Equation Models). The use of SEM analysis methods because SEM can identify the dimensions of a construct and at the same time is able to measure the influence or degree of relationship between factors that have been identified dimensions (Ferdinand, 2000). Complete SEM modeling basically consists of Measurement Models and Structural Models. The Measurement Model or measurement model is intended to confirm a dimension or factor based on empirical indicators. Structural Model is a model of the relationship structure that forms or explains the quality between factors. Analysis in this study includes: 1) Measurement Model which is testing dimensions of a construct, 2) Structural Model which is testing causality relationship among variables.

RESULTS

Model Validation

Measurement model

The measurement model of soft skills latent variable, organizational culture, compensation and performance based on significance test of Regression weights (loading factors) given in Table 1.

Table 1
MEASUREMENT MODEL LATENT VARIABLES OF WORK STRESS, ORGANIZATION CULTURE, JOB SATISFACTION AND PERFORMANCE
Construct Indicator C.R. P Factor Supported
Loading
Work Stress (X1) Stressor Extra Organization (X1.1) 2.425 0.015* 0.87 Yes
Stressor Organization (X1.2) 2.277 0.023* 1.227 Yes
Stressor Group (X1.3) 2.21 0.027* 0.712 Yes
Stressor Individual (X1.4) 2.521 Fix 1 Yes
Organization Culture (X2) Mission ( X2.1) 2.003 0.045* 0.909 Yes
Consistency (X2.2) 2.141 0.032* 1.094 Yes
Involvement (X2.3) 2.04 0.041* 0.672 Yes
Adaptability (X2.4) 3.881 Fix 1 Yes
Job Satisfaction (X3) Title/category (X3.1) 3.623 Fix 1 Yes
Position (X3.2) 2.092 0.036* 0.482 Yes
Financial and Social Assurances (X3.3) 3.36 0.001** 0.944 Yes
Monitoring Quality (X3.4) 3.337 0.001** 1.045 Yes
Performance (Y) Work Quality (Y1.1) 2.474 0.004** 0.632 Yes
Work Quantity (Y1.2) 2.878 0.013* 1.091 Yes
Work Standard (Y1.3) 3.871 Fix 1 Yes

Test result for C.R statistic in each indicator of work stress variables showed significant result. This result was supported by C.R value more than 2 or p-value<0.05. Based on factor loading value (lambda), all indicators has more than 0.40, thus showing evidence that each indicator has high validity over construct (Sharma, 1996). Substantially, dimensionality test result showed that all four indicators could construct work stress. Highest factor loading value obtained in indicator stressor organization (X1.2). This largest factor loading means that institution with high stressor organization has strong indication to construct high work stress for its employees. This analysis result also explains that work stress in banking organization has large variety. In other three indicator with factor loading more than 0.40 also explains that work stress difference can be measured through stressor extra organization, stressor organization, stressor group and stressor individual.

Test result for C.R statistic in each indicator of organization culture variables showed significant result. This result was supported by C.R value more than 2 or p-value<0.05. Based on factor loading value (lambda), all indicators has more than 0.40, thus showing evidence that each indicator has high validity over construct (Sharma, 1996). Substantially, dimensionality test result showed that all four indicators could construct organization culture. Highest factor loading value obtained in indicator consistency (X2.2). This largest factor loading means in banking organization, organization culture difference can be explained strongly from consistency indicator or in other word banking organization with stronger culture was determined by its consistency in preserving the culture. In other three indicators with factor loading more than 0.40 also explains that organization culture can be measured through mission, consistency, involvement and adaptability.

Test result for C.R statistic in each indicator of job satisfaction variables showed significant result. This result was supported by C.R value more than 2 or p-value <0.05. Based on factor loading value (lambda), all indicators has more than 0.40, thus showing evidence that each indicator has high validity over construct (Sharma, 1996). Substantially, dimensionality test result showed that all four indicators could construct job satisfaction. Highest factor loading value obtained in indicator monitoring quality (X3.4). This largest factor loading means that in banking organization, organization culture difference can be strongly explained from monitoring quality indicator or in other word banking organization with highly satisfied employees would be determined by its monitoring quality run by the organization. In other three indicators with factor loading more than 0.40 also explains that difference in job satisfaction can be measured through title/category, position, financial and social assurance also monitoring quality.

Test result for C.R statistic in each indicator of employee’s performance variables showed significant result. This result was supported by C.R value more than 2 or p-value<0.05. Based on factor loading value (lambda), all indicators has more than 0.40, thus showing evidence that each indicator has high validity over construct (Sharma, 1996). Substantially, dimensionality test result showed that all three indicators could construct employee performance. Highest factor loading value obtained in indicator work quantity (Y1.2). This largest factor loading means that in banking organization, employee performance difference can be strongly explained from work quantity indicator or in other word performance of banking organization in Maluku with higher performance was determined by its work quantity. In other indicators with factor loading more than 0.40 also explains that difference in organization performance can be measured through work quality, work quantity and work standard.

Structural model

SEM model analysis result based on model fitness indices (goodness of fit) shown in Table 2. These index values would be compared with critical value (cut-off value) of each index. A good model was expected to have larger or equal goodness of fit indices to critical value.

Table 2
TEST RESULT OF STRUCTURAL MODEL’S GOODNESS OF FIT
INDICES
Criteria Result Critical Value Model Evaluation
Chi-square (c2) 49.524 £ 52.192 Good
Probability 0.6 ³ 0.05 Good
CMIN/DF 1.183 £ 2.00 Good
GFI 0.915 ³ 0.90 Good
AGFI 0.918 ³ 0.90 Good
CFI 0.994 ³ 0.95 Good
TLI 0.987 ³ 0.95 Good
RMSEA 0.04 £ 0.08 Good

Test result in model goodness of fit in initial structural model showed that all criteria used have good value. Analysis result concludes that evaluation model has acceptable goodness of fit which is based on analysis result in hypothesis testing showed in Table 3.

Table 3
T TEST (CR) EFFECT OF WORK STRESS, ORGANIZATION CULTURE, AND JOB SATISFACTION TOWARD PERFORMANCE
Lambda/ SE C.R. P
Factor Loading
Performance <-- Work Stress -0.167 0.232 -2.328 0.019
Performance <-- Organization Culture 0.189 0.252 2.02 0.048
Performance <-- Job Satisfaction 0.007 0.048 0.146 0.88

This result showed that all variable has significant effect toward job satisfaction. Observing that highest factor loading was work stress, it means that work stress is a dominant variable with effect toward employee’s job satisfaction.

DISCUSSION AND CONCLUSION

Based on statistical test result, it can be concluded that work stress and organization culture has significant effect toward employee’s performance. This means that the smaller work stress among employees and better organization culture according to Bank Maluku employee’s perception, the higher employee’s performance will be. Work stress has negative effect toward employees performance, means that the higher the stress, it would reduce employees performance and vice versa.

Research conducted by Yuyuk (2014), Jerry (2014), Hyun et al. (2018), Karakaş & Şahin (2017), Hackney et al. (2018), Elmadağ & Ellinger (2018), Sullivan & Bhagat (1992 ), Bolino & Turnley (2005), Netemeyer et al. (2005), and Judge & Bono (2001) suggest that work stress affects employee performance. This was stated by De Jonge & Dormann (2003), that Job stress can be described as discomfort felt by individuals whose abilities and resources cannot be overcome by demands, events and situations in their workplace. The negative impact of stress at a high level is the employee's performance has decreased significantly. This condition occurs because employees will use more of their energy to fight stress than to do their work or work. This study result also support result from previous studies such as Mitchell, 1982 (in Sedarmayanti, 2001), Hasibuan (2000), Robbins (2003), Gomes (2000), Sari (in Alwi, 2001), Rivai (2004), Bernadin & Rusel (in Ahmad, 2006), Sikula (in Mangkunegara, 2005), Davis (in Mangkunegara, 2005), Siagian (1999), which study the effect of work stress toward employee performance.

Meanwhile, organization culture has positive effects toward employee’s performance. Theoretically, support theory from Kreitner & Kinlcky (2003), Hofstede (1994), Sharplin (1995), Wilhelm (1992), Noe & Mody (1989), Sobirin (1997), Luthans (2002) which stated that organization culture has affected management success which is marked by increasing individual performance. Moreover, this study's result is for employees performance conducted by Weber et al. (2018), Ferris et al. (2018), Van et al. (2005), Farh et al. ( 2007), Denison & Mishra (1995), Xenikou & Simosi (2006), Yiing & Zaman (2009), Chan et al. (2004) suggest that organization culture effects as an alternative to improve employee performance. Banking performance as a financial institution is a description of the company's financial condition in a certain period concerning aspects of fund raising and channeling of funds, which is usually measured by indicators of capital adequacy, liquidity, and profitability (Jumingan, 2006).

Findings in this study have satisfaction with employee’s performance. This indicates that employee’s performance as perceived by employees of Bank Maluku was not significantly affected by job satisfaction. The results of this study are supported by Anini & Sosilo (2014) that job satisfaction does not affect employee performance. This finding does not support previous theories and studies, such as those of Valentine & Fleischman (2018), Krishnan et al. (2018), Huo & Boxall (2018), Lepojevic et al. (2018), Ostroff (1992), Albrecht et al. (1981), Milkovich & Boudrew (1991) and Lawler & Porter (1967) that job satisfaction has significant effect toward performance. This insignificant effect between job satisfaction variables toward employee’s performance was marked by a low factor loading value between job satisfaction and employees by high probability value.

Based on empirical observation on the field, job satisfaction perceived by employees of Bank Maluku was other thing of employee’s performance. It means that if employee’s job satisfaction increases, it will not necessarily followed by increasing employees’ performance. On the contrary, improving performance was not always caused by higher job satisfaction felt by the employees. Empirically, this fact can be proved by a condition when there was riot in Ambon, in which almost all Bank did not open for business, Bank Maluku was able to improve its performance. This proved that although employees were dissatisfied, performance still goes well. Indicators for job satisfaction variable were title/category, position, financial and social assurance also monitoring quality.

Based on factor loading value, title/category was the main indicator to form job satisfaction, while financial and social assurance was the weak indicator to form job satisfaction. It means that dominant title/category to form job satisfaction has no relation with employee’s performance and not all employees with high level title reflect high performance level. Thus, employees’ job satisfaction in Bank Maluku did not reflect higher performance. Therefore, aspects other than job satisfaction to improve employee’s performance should be reviewed in Bank Maluku, or whether there was other variable which mediated job satisfaction toward performance improvement, particularly among employees in Bank Maluku.

CONCLUSION AND RECOMMENDATION

Work stress and organization culture has significant effect toward employee’s performance. This indicate that smaller work stress experience by an employee and the better organizational culture according to employees perception in Bank Maluku, the higher employees performance will be. Work stress has negative effect toward employee’s performance, which means that higher work stress will reduce employee’s performance, and vice versa. Organization culture has positive effect toward employee’s performance. Job satisfaction has insignificant effect toward employee’s performance. This indicates that employee’s performance perceived by employees of Bank Maluku did not significantly influenced by job satisfaction. This study would recommend that this research has some limitations that present the possibility for future study. The sample is restricted to the Maluku Bank. Therefore, the future could examine all Banks in Maluku whether private banks or state-owned banks; Thus, research on performance is expected to be generalized in General and applies Bank in Indonesia. The sample size is a bit simple. Hence, future research should be carried out using a large sample to give substantial results concerning the determinants of the performance of a lecturer. Despite these limitations, current research has major implications for the performance of Maluku bank employees.

The study also contributes practically to the performance of the banking company and the researcher further development related to the performance of the performance of the employer of the bank, namely: Stress work needs to be improved again with the existence of Human Capital Care or consultation of environmental conditions at each branch in Bank Maluku so that employees can reveal complaints from his job and get the solution with a decrease in stress levels of work and increased employee performance. In addition, the need for motivation of the boss given as input, guidance and work ethic in running the job and reduce stress in the work.

Based on the findings, several recommendations that can be used as consideration in determining future policies, especially those related to work stress, organizational culture, satisfaction and performance, are to improve the performance of employees in the Maluku bank, namely for the Bank Maluku to improve employee performance should the company pay more attention to the application of organizational culture that exist in the environment of the company. This is because in this study found that the application of organizational culture can improve employee performance. In addition, it would be better if the leader can direct and remind employees about the importance of application of organizational culture in the workplace In addition, job satisfaction affects the performance of Maluku bank employees, so that support from the manager in affecting job satisfaction perceived employees is needed in an organization. More support given can make employees feel satisfied in working so as to maximize their performance.

REFERENCES