Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2020 Vol: 26 Issue: 4S

How is the Impact of Employee Performance Influenced by Organizational Commitment Integrity and Leadership.

Charles Bohlen Purba, Mercu Buana University

Heru Prasetyo, Mercu Buana University

Abstract

This study aims to analyze the influence of leadership and integrity on employee performance with organizational commitment as an intervening variable. The data collection method in this study used a questionnaire with 120 permanent employees in the Department of Money Management, Bank Indonesia. Data analysis used descriptive statistics using SPSS and Structural Equation Modeling (SEM). The analytical method used is descriptive analysis, and the test instrument uses SEM AMOS. in this study using four variables, twelve dimensions and twenty-four indicators. The results showed that leadership and integrity have a significant and significant effect on organizational commitment and also on employee performance. And organizational commitment has a significant effect on employee performance. The findings in this study are that it turns out that the factor that has a more dominant influence on organizational commitment is integrity, while leadership is most influenced for employee performance.

Keywords

Leadership, Integrity, Employee Performance and Organizational Commitment.

Introduction

In carrying out its duties and functions, Bank Indonesia requires human resources who are educated, skilled, disciplined, diligent and willing to work hard (Ginting & Purba., 2019). Quality human resources are those who have high integrity and can carry out their duties properly within the organization, including within Bank Indonesia Universities, particularly in the Money Management Department (Parlinda & Wahyudin, 2008). Leadership is an important factor in providing direction to employees, especially nowadays where everything is open, the leadership needed is leadership that can empower employees (Purba, 2019). Leadership understands how to influence others for useful reasons. Leadership also has the meaning of involving a group or organization to achieve its goals. Combining these two key characteristics, we can define leadership as an individual's ability to exert influence and control over other members to help a group or organization achieve its goals (George & Gareth R.J, 2012).

Something that adapts reality to our words - in other words, keeping promises and living up to expectations is called integrity (Covey, 2016). Integrity relates to human behavior where there are many things that underlie that behavior (Suleman, 2018). Integrity is often identified with honesty because what is based on integrity is a conscience that cannot lie. Conscience is always related to goodness and truth that have been universally accepted so that it should not be against conscience (Brockner et al., 2014). In many ways, a person's integrity is important in terms of carrying out a job properly and correctly (Fatokun et al., 2010). People who have good integrity deserve to be nurtured to become the company's mainstay employees (Suleman et al., 2020). A company that has many employees who have integrity is ready to face business competition (Suleman, 2014).

Mentioned by (Kreitner et al., 2014) organizational commitment can also be defined as a set of feelings and beliefs that these people have an organization. Organizational commitment at Bank Indonesia, which is reflected in the basic personal values, code of ethics, code of ethics and organizational culture is important in realizing organizational sustainability and is linked to employee performance. Every employee who is part of the organization is expected to work wholeheartedly (Harmaily, 2016). Because good companies have employees who have a sense of belonging and the intention of working (Leroy et al., 2011). Without the role of wanting to get ahead of employees, the company or organization will experience setbacks and have no competitiveness (Safitri, 2014). This is done either at the beginning of employee recruitment or if not, it becomes a tough step. In addition, these efforts can also be carried out periodically by the company to generate a sense of belonging or commitment, even though it is late but it has a good impact if all employees ultimately have a commitment to the organization (Robbins & Judge, 2017). And vice versa, the company or organization should also have a commitment to employees to be in line in efforts to prosper employees according to company performance (Davis, 2010).

Employee performance is the result of the factors that influence it (Hao & Yazdanifard, 2015). Where there is motivation ignited in employees to grow and think about the future of the company (Chandra, 2012). However, this is again not something automatic because each employee's characteristics are different and this is where the role of the company is to convey the company's vision and mission and what the company aims for in the future so that employees can be more prosperous (Fritz et al., 2013). The ideal company is a company that can have employees who perform well (Logahan & Aesaria, 2015).

In addition to exploring the theory of other efforts made in determining variables, this study is strengthened by the results of a pre-survey conducted by researchers, where the results show that the 3 highest dominant factors affecting employee performance are leadership (36%), organizational commitment (16%) and integrity. (14%). Then the researchers followed up the pre-survey by distributing questionnaires to 50 employees at the Bank Indonesia Money Management Department. Therefore, this study will examine leadership, integrity and organizational commitment in influencing organizational performance. So it is clear that the purpose of this study is expected to provide an overview to the organization whether positive organizational commitment will ultimately make employee performance better because these two factors are related and also see how the direct influence of leadership, integrity on organizational commitment and employee performance. Where this is the basis of the company in order to make efforts to improve employee performance by paying attention to the factors that influence it.

Theoretical Framework and Hypotheses

The purpose of the research conducted by researchers is to be able to explain how the direct relationship between leadership and integrity to organizational commitment and employee performance. And the direct relationship between organizational commitment and employee performance. Below is an explanation for building the hypothesis in this study as follows.

Leadership

Organizational commitment refers to employees' belief in the goals and values of the organization, the desire to remain a member of the organization and loyalty to the organization in the research of (Gea, 2015) he examined the effect of three leadership styles, namely transformational, transactional, and passive or avoidant on the dimensions of employee organizational commitment. In (Ginting & Purba., 2019) research, leadership is a way that a person has in influencing a group of people or subordinates to work together and make efforts with passion and confidence to achieve predetermined goals. The results of research by (Fatokun et al., 2010) prove that there is a positive relationship between leadership and employee performance. On this basis, employees who have integrity in their work will affect their performance. study, he examined the effect of three leadership styles, namely transformational, transactional, and passive or avoidant on the dimensions of employee organizational commitment (Anwar Prabu Mangkunegara, 2017). Therefore, the researcher made the first and second hypotheses in this study as follows:

H1: Leadership has an influence and is significant on organizational Commitment

H2: Leadership has an influence and is significant on Employee Performance

Integrity

In research (Fritz et al., 2013) also examined the integrity of behavior positively and significantly influencing organizational commitment and, the integrity of supervisory behavior that is aligned with organizational behavior standards operates directly on the desire of employees to comply with organizational expectations. Research by (Brockner et al., 2014) also found that experiences of self-integrity have a positive relationship between corporate volunteerism and organizational commitment and hypothesis five in research. In research (Harmaily, 2016) explains that integrity is a concept that points to consistency between actions with values and principles. In ethics, integrity is defined as the honesty and truth of one's actions there is a positive and significant relationship between integrity and employee performance. In ethics, integrity is defined as the honesty and truth of one's actions and then (Purba, 2019) study, there is a positive and significant relationship between integrity and employee performance. Therefore, the researcher made the third and fourth hypotheses in this study as follows:

H3: Integrity has an influence and is significant on organizational Commitment

H4: Integrity has an influence and is significant on Employee Performance

Organizational Commitment

According to (Gea, 2015) organizational commitment has a significant positive effect on employee performance, normative commitment leaves the strongest effect on average performance, compared to affective commitment and ongoing commitment. The most dominant influence of employee performance is the commitment factor of the organization (Ginting & Purba., 2019) .Therefore, the researcher made the fifth hypothesis in this study as follows:

H5: Orgabizational Commitment has an influence and is significant on Employee Performance

From the explanation of the hypothesis above, an image of the framework of thought in this study can be made as follows can be seen in Figure 1 below:

Figure 1 Research Framework

Research Methodos

Population and Sample

The population in this study consisted of 272 permanent employees at the Bank Indonesia Money Management Department. The sampling technique used in this research is quota sampling where the sample will be taken to a specified limit of 120 respondents where this limit, with reference to the sample required is five times the number of variables (Ferdinand, 2018). In this study, using 6 variables, 12 dimensions and 24 indicators. In which each indicator becomes a statement that is asked of the respondent who is asked 24 questions that will be answered and the results will be tabulated. which questions used in this study have previously been tested so that the instrument is valid and reliable. where the results of the respondents' answers are then tabulated and processed using SEM AMOS 23.

Data Analysis and Result Measurement Items

In this study, the researcher used three dimensions with six indicators for leadership variables whose theory was taken from (Suwatno & Priansa, 2011) which has been adjusted. And for the integrity variable using three dimensions with six indicators taken from research (Gea, 2015). Furthermore, organizational commitment variables use three dimensions and six indicators adapted from research (Anwar Prabu Mangkunegara, 2017) and finally for employee performance variables using three dimensions with six indicators obtained from adjusted theory (Santi et al., 2018). All 24 indicators are measured using a scale of 1 "Strongly Disagree to 5" Strongly Agree "

SEM AMOS Analysis

Goodness of Fit (GOF) Analysis

The results of the first AMOS SEM test which aims to determine whether the overall compatibility model will be compared between the data entered and the standards owned by amos. And the output of SEM AMOS results The data output on the overall compatibility test can be seen in Table 1 below:

Table 1 Goodness of FIT (GOF)
Measure
GOF
Measurement Measurement
Result
Good Fit Marginal  Fit
Absolute fit Model
Goodness of fit Index (GFI) ≥ 0.90 0.80 - <0.90 0.84 Marginal Fit
Root Mean Square Error (RMSEA) < 0.08   0.049 Good Fit
Incremental Fit Model
Comparative Fit Index (CFI) ≥ 0.90 0.80 - <0.90 0.96 Good Fit
Normal Fit Index (NFI) ≥ 0.90 0.80 - <0.90 0.85 Marginal Fit
Increamental Fit Index ( IFI) ≥ 0.90 0.80 - <0.90 0.96 Good Fit
Relative fit Index (RFI) ≥ 0.90 0.80 - <0.90 0.84 Marginal Fit
Parsimonious Fit Model
Parsimonious normed fit index (PNFI) ≥ 0.90 0.80 - <0.90 0.76 Marginal Fit

Results of Overall Model Processing (GOF) If seen in Table 1 which is the SEM output from AMOS, the absolute fit size data model is found which aims to determine the level of prediction of all models (structural and measurement models) to data suitability consisting of RMSEA 0.049 <0, 08 (model fit) and a GFI value of 0.84. It can be concluded that all the models tested are close to the absolute fit model testing criteria at a fairly good level of testing criteria. And for other model fit criteria, the Incremental Fit Model consists of several conformity test instruments, namely the value of CFI = 0.96; NFI = 0.85; IFI = 0.96 and RFI = 0.84, the results state that the structural equation model is said to be good because it is at a fairly good level of testing criteria and has met the requirements of the Incremental Fit Model. On the fit size, the stingy fit model can be seen in the PNFI results = 0.76; From these outputs it can be concluded that the model is said to be at the level of testing criteria is quite good and meets the requirements of the parsimonious fit model.

Measurement Model

The second output result in sem amos shows the following data results. According to (Ferdinand, 2018) the composite reliability of a measurement model is said to be good reliability to measure each latent variable if the construct reliability value (CR) is ≥ 0.7 or more than the value of extracted variance (VE) is greater than 0.05, states that in exploration reliability research between 0.5 - 0.6 can be accepted and then at SEM AMOS a one-way test is carried out with a 95% confidence level, the commonly used critical value (CR)> 1.96 which means the assumption of normality is rejected at significance level (P) <0.05 (5%).

From Table 2 data it is found that all 24 indicators are valid and reliable because (CR) is ≥ 0.7 or more than the value of extracted variance (VE) is greater than 0.05

Table 2 Construct Reliability and Variance Extracted
Constructs Item
Code
Factor
Loadings
(Error) CR VE
Leadership LD1 0.83 0.69 0.90 0.50
LD2 0.71 0.56
LD3 0.75 0.57
LD4 0.70 0.49
LD5 0.80 0.65
LD6 0.89 0.48
Integrity IN7 0.73 0.53 0.90 0.50
IN8 0.82 0.68
IN9 0.80 0.64
IN10 0.76 0.58
IN11 0.75 0.54
IN12 0.81 0.66
Organizational
Commitment
OC13 0.82 0.67 0.86 0.50
OC14 0.77 0.60    
OC15 0.75 0.57    
OC16 0.78 0.61    
OC17 0.75 0.56    
OC18 0.74 0.55    
Employee
Performance
EP19 0.80 0.65 0.85 0.60
EP20 0.82 0.67    
EP21 0.74 0.55    
EP22 0.85 0.72    
EP23 0.78 0.61    
EP24 0.81 0.64    

Match analysis of structural models or hypothesis testing

The next step is to look at the structural model or hypothesis test in this case it can be seen about how the conclusions of the hypothesis in this study can be seen in Table 3 below:

Table 3 Hypothesis Test Result
No Hypotheses SLF1) t-value Conclusion
1 H1 Leadership → Commitment 0,507 5.3 Supported
2 H2 Leadership → Performance 0.266 2.3 Supported
3 H3 Integrity → Commitment 0.642 8.1 Supported
4 H4 Integrity  → Performance 0.242 2.0 Supported
5 H5 Commitment → Performance 0.595 3.4 Supported

In the hypothesis test results in Table 3, which is the result of SEM AMOS output data processing which shows that the five are accepted, meaning that (H1-H5) all show an effect and are significant.

The basis for decision making is influential and significant based on the value of the t-value > T-table 1.96 and α <0.05, where the magnitude of the effect can be seen in the resulting SLF value which shows how much influence the independent variable has on the dependent. The test results show that leadership (H1) has a positive and significant effect on organizational commitment with an output value of 5.3 greater than the table 1.96 and a standardized coefficient of 0.507. Then (H2) leadership towards organizational commitment, the t-value is 2.3 which is also greater than the t-table (1.96) with a standard coefficient of 0.266. Whereas for (H3) Integrity towards the organization found the values of 8.9 which are also greater than the table (1.96) with a coefficient of 0.642. And then for (H4) Integrity on employee performance gets a t -value of 2.0 which is also greater than t table (1.96) with a coefficient of 0.242. And finally, for (H5) organizational commitment to employee performance obtained values of 3.4 which are also greater than table 1.96 with a coefficient of 0.595.

Discussion and Conclusion

From the research that has been conducted by researchers, the researchers can draw several conclusions. Which from the research results found that leadership has a significant and significant effect on organizational commitment and also has a significant effect on employee performance. As well as integrity affects organizational commitment and affects employee performance which in the end organizational commitment affects employee performance. Between leadership and integrity, the factor that most influences organizational commitment is integrity. Meanwhile, between leadership and integrity, the biggest and most significant influence on employee performance is leadership.

The results of the first study, it was found that leadership has a significant effect on organizational commitment. This is important for the company to pay attention to because in its activities the company needs commitment from employees, but the results of this study can also be a reference for the size of the commitment determined by how the leadership of a superior to his subordinates. And therefore it is necessary to create good company leaders so that in the future they can foster commitment to the company properly.

The second thing that is no less important is that leadership has a significant and significant effect on employee performance. Therefore, the role of the leader becomes a big or small driver of performance. And it cannot be forgotten that the leadership role was found to produce the greatest influence, therefore future leaders will influence business growth in the future because the performance depends on the leadership in the future. Performance errors can be due to the fault of the leader or the wrong leader as well as the decline of the company.

Third, it was found that integrity has an effect and is significant on organizational commitment. Therefore, the importance of cultivating an attitude of integrity at the beginning of employee recruitment is key. Because employees who have integrity must have commitment and in the results of this study integrity has the most dominant influence on organizational commitment. Business growth and business continuity are founded on employees who have integrity. Choosing employees who have integrity is the key to the company's future victory in today's competitive era, without integrity, employees can move and company trade secrets can be obtained by competitors and in the end competitors can win the market.

The four integrity has a significant effect on employee performance, this is in line with the opinion above which states that without employees who have good integrity to grow the company it is impossible to improve performance and without good performance, don't expect the company to compete well in the current era of 4.0. where the level of competition between companies has occurred from various sides. Integrity is related to how employees are willing to be loyal and sincere to advance the company by doing their part of the job with optimal efforts.

The five organizational commitments have an effect and are significant on employee performance, which of course has been widely researched and the results of the research are always the same. So that it becomes a special guide for leaders who want to improve the performance of their employees, one of which is by striving for organizational commitment and employee commitment to the organization. Supplementing and supporting each other knows the boundaries and is mutually beneficial this is the best thing to be able to advance the company together between leaders and employees. This can happen if we both understand the conditions

Limitation

In this study, of course there are still many shortcomings and limitations, among others, the researchers' suggestion for the next researcher is to try the research model in this study at different companies with a smaller or larger scale. And also the addition of other variables that can help explain more clearly about efforts to improve variable performance, for example compensation for organizational commitment such as in research(Prasada et al., 2020).

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Brockner, J., Senior, D., & Welch, W. (2014). Corporate Volunteerism, the Experience of SelfIntegrity and Organizational Commitment: Evidence from the Field. Social Justice Research, 27(1), 1–23.

Chandra, B.D. (2012). Analisis Pengaruh Budaya Organisasi dan Keterlibatan Kerja terhadap Komitmen Organisasi dalam Meningkatkan Kinerja Pegawai (Studi Kasus: Badan Perencanaan Pembangunan Daerah Provinsi Bengkulu). The Manager Review., 13(2), 108–122.

Covey, S.R. (2016). The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change Interactive Edition. Mango Media Inc.

Davis, K. (2010). Organizational Behavior – Human behavior at Work 13th Edition. Mcgraw Hill Company, Inc.

Fatokun, J., Salaam, M., & Ajegbomogun, F. (2010). The Influence of Leadership on The Performance of Subordinates in Nigerian Libraries. Journal of Library Philosophy and Practice, 1–8.

Ferdinand, A. (2018). Metode penelitian manajemen. Universitas Diponegoro.

Fritz, J.H., O’Neil, N.B., Popp, A.M., Williams, C., & Arnett, R.C. (2013). The influence of supervisory behavioral integrity on intent to comply with organizational ethical standards and organizational commitmen. Journal of Business Ethics, 114(2), 251–263.

Gea, A.A. (2015). Integritas Personal dan Kepemimpinan Etis. Jurnal Humanoira Binus, 5(2), 950-959.

George, J.M., & Gareth, R.J. (2012). Understanding and Managing. Organizational Behavior. Sixth Edition. Prentice Hall.

Ginting, J., & Purba., C.B. (2019). The effect of principal’s leadership, discipline and competence on teacher performance in Saint Yakobus Foundation Jakarta. Journal of Economic and Finance.

Hao, M.J., & Yazdanifard, D. (2015). How effective leadership can facilitate change in organizations through improvement and innovation. Global Journal of Management and Business Research, 15(19).

Harmaily, B. (2016). Analysis of the Effect of Competence, Integrity and Organizational Culture on Employee Performance with Job Satisfaction as an Intermediary Variable. Borneo.Kreitner, Robert, & Kinicki, A. (2014). Perilaku Organisasi. Edisi 9. Buku. Salemba empat.

Leroy, H., Palanski, M.E., & Simons, T. (2011). Authentic Leadership and Behavioral Integrity as Drivers of Follower Commitment and Performance. Journal of Business Ethics, 107, 255–264.

Logahan, J.M., & Aesaria, S.M. (2015). Organizational Culture and Work Involvement on Organizational Commitment Has an Impact on Employee Performance at BTN Ciputat. Binus Business Review, 5(2), 551–563.

Parlinda, V., & Wahyudin, M. (2008). The Influence of Leadership, Motivation, Training and Work Environment on Employee Performance at Regional Drinking Water Company in Surakarta City. Jurnal Daya Saing, 4(2).

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Purba, C.B. (2019). The Effect of Organizational Culture, Career Development, and Worklife Balance on PT XYZ Employee Engangement. Journal of Economic and Finance.

Robbins, P.S., & Judge, T.A. (2017). Organizational Behaviour, Edisi 13, Jilid 1. Salemba empat.

Safitri, D. (2014). Pengaruh Independensi Auditor Dan Gaya Kepemimpinan Terhadap Kinerja Auditor Dengan Komitmen Organisasi Sebagai Variabel Intervening (Studi Empiris : Kantor Akuntan Publik Pekanbaru, Batam, dan Medan. Jurnal Ilmiah Ekonomi Dan Bisnis, 11(2), 339-351.

Santi, W., Mukhtar, M., & Matin’. (2018). Pengaruh Reward dan Kontrak Psikologis Terhadap Organizational Citizenship Behavior (OCB) Dosen Fkip Universitas Halu Oleo (UHO). Jurnal Ilmiah Wahana Pendidikan, 4(3).

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Suleman, D. (2018). Faktor penentu keputusan konsumen indonesia memilihtempat belanja disebuah E-Commerce (Theory of Planned Behavior). Jurnal JDM, 1(02), 1–9. http://journal.mercubuana.ac.id/index.php/jdm/article/view/4120

Suleman, D., Ali, H., Nusraningrum, D., & Ali, M.M. (2020). Strategi memenangkan persaingan bisnis berbasis perilaku konsumen untuk produk fashion. Lembaga pendidikan dan pelatihan balai insan cendekia.

Suwatno, H., & Priansa, D.J. (2011). Manajemen Pegawai. Alfabeta.

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