JRSSEM 2022, Vol. 02, No. 2, 134 – 148
E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494
DOI : 10.36418/jrssem.v2i2.249 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
EFFECT OF WORK ENVIRONMENT AND COMPENSATION
ON EMPLOYEE PERFORMANCE WITH JOB SATISFACTION
AS A MEDIATION VARIABLE
Gabriel Indripriarko
1*
M. Havidz Aima
2
1,2
Mercu Buana University, Jakarta, Indonesia
e-mail: indripriarko@gmail.com
1
, havidz.aima@mercubuana.ac.id
2
*Correspondence: indripriarko@gmail.com
Submitted: 27 August 2022, Revised: 02 September 2022 Accepted: 23 September 2022
Abstract. This study aims to examine and analyze whether the work environment has an influence
on job satisfaction, compensation has an influence on job satisfaction, the work environment has
an influence on employee performance, compensation has an influence on employee performance,
job satisfaction has an influence on employee performance, work environment and compensation
simultaneously has an influence on employee performance, work environment, compensation, and
job satisfaction simultaneously has an influence on employee performance, job satisfaction has an
influence on mediating the work environment on employee performance, and job satisfaction has
an influence on mediating compensation on employee performance. The population of this study
was employees of an electronic component manufacturing company in Cikarang, with a total
sample of 222 people. The data analysis method used SEM-PLS. The results of this study are the
work environment has a significant positive effect on job satisfaction, compensation has a positive
and significant effect on job satisfaction, the work environment has a positive and significant effect
on employee performance, compensation has a positive and significant effect on employee
performance, job satisfaction has a positive and significant effect on employee performance.
Employee Performance, Work Environment, and Compensation have a positive effect on Job
Satisfaction, Work Environment, Compensation, and Job Satisfaction simultaneously have a
significant positive effect on Employee Performance, Job Satisfaction mediates Work Environment
on Employee Performance, Job Satisfaction mediates Compensation on Employee Performance.
Keywords: work environment; compensation; job satisfaction; employee performance.
Gabriel Indripriarko, M. Havidz Aima | 135
DOI : 10.36418/jrssem.v2i2.249 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
INTRODUCTION
The object of this research is a company
engaged in manufacturing by producing
electronic components that have marketed
their products both domestically and
abroad which of course require competent
human resources in their fields. The author
collects company performance data for the
period 2019, 2020, and 2021 which is
presented in graphical form in Figure 1.
Figure 1. Graph of Average Employee Performance Assessment
Figure 1. shows a decrease in the
average results of employee performance
appraisals in the research object companies
from 2019 to 2021. Therefore, it is
necessary to increase employee
performance in the company in order to
achieve production targets. Companies are
required to always improve employee
performance, so that the company can
continue to grow. Because with the
performance of employees in each
employee, then they are able to Optimizing
their ability to do their jobs.
In a previous study conducted by
(Rumambi, Masengi, and Bogar 2022);
(Pratama, Sulaiman, and Soegiyanto 2021)
regarding the analysis of factors that affect
employee performance at the health office
of East Kutai Regency, it is stated that the
variables that affect employee performance
include compensation, competence, work
motivation, work discipline, environment.
work, and work discipline. The following are
the questionnaire results regarding the
factors that affect the decline in employee
performance, which can be seen in Table 1.
Table 1. Factors Affecting Employee Performance
Variable
Value
Frequenc
y (F)
Respondent
s (n)
Score
(%)
Compensation
8
30
27%
Competence
2
30
7%
Work Motivation
3
30
10%
Work Environment
9
30
30%
136 | Effect of Work Environment and Compensation on Employee Performance with Job
Satisfaction as a Mediation Variable
Work Discipline
2
30
7%
Job Satisfaction
6
30
20%
Total
30
30
100%
Table 1 shows that the biggest factor
influencing the decline in employee
performance is the Work Environment
variable as many as 9 out of 30 respondents
or 30% compensation variable as many as
8 out of 30 respondents or 27%, and the
variable Job Satisfaction as many as 6 of 30
respondents or 20%. So in this study Work
Environment, Compensation, and Job
Satisfaction are variables that affect the
decline in performance.
Based on research by (Hidayat 2018);
(Eliyana and Ma’arif 2019); (Birken et al.
2017), it is stated that the work
performance is the Work Environment
variable as many as 9 out of 30
environment has a positive influence on
employee performance. A comfortable
work environment causes the level of
concentration of employees at work to
increase, and this condition causes the level
of employee productivity to increase. The
results of the pre-survey on the work
environment of 30 employees show the
results as shown in Table 2.
Table 2. Results of the Pre-Survey on the Work Environment of Employees
No
Statement
Factors
Yes
No
1.
Adequate equipment
Work
environment
14
16
2.
Good facilities for worship
and transportation for
employees
Work
Environment
13
17
3.
The conditions in my work
environment are well
organized.
Work
Environment
8
22
4.
Good family in the work
environment
Work
environment
12
18
5.
A good relationship
between superiors and
subordinates
Work
environment
16
14
Total Percentage
42%
58%
Based on the pre-survey table 2 above
shows 58% of respondents answered that
the company has a tendency to not
implement a good work environment.
Compensation is one of the functions
of Human Resource Management related
to all types of individual awards in
exchange.
Gabriel Indripriarko, M. Havidz Aima | 137
For carrying out organizational tasks. If
managed properly, compensation will help
the company to achieve the goal of
acquiring, retaining, and keeping good
employees. The results of the pre-survey on
compensation for 30 employees show the
results as shown in table 3.
Table 3. Results of the Pre-Compensation Survey
No
Statement
Factors
Yes
No
1.
Wages that are appropriate
Compensation
17
13
2.
Health benefits that are
appropriate
Compensation
12
18
3.
Professional allowances
Appropriate
compensation
13
17
4.
Appropriate vacation
Compensation
9
21
5.
Good non-permanent
allowance
Compensation
14
16
Total Percentage
43%
57%
Based on the pre-survey table 3. above,
it shows that 57% of respondents answered
that the company has a tendency to not
implement compensation properly.
Employees are an important element in
an organization in order to achieve
organizational goals (Turkalj and Fosić
2009). This is an important reason why
companies must pay attention to the job
satisfaction of their employees, therefore
job satisfaction can play a role in improving
employee performance in a to not
implement compensation properly.
Employees are an important element in
an organization in order to achieve
company. Based on the research of
(Cahyaningrum and Budiatmo 2019); (Idris
et al. 2020), it was found that job
satisfaction can mediate the effect of
compensation and performance on
performance. The results of the pre-survey
on job satisfaction of 30 employees show
the results as shown in Table 4.
Table 4. Results of the Pre-Survey of Job Satisfaction
No
Statement
Factors
Yes
No
1.
The work is in accordance
with the desired
Job Satisfaction
9
21
2.
The salary given is relevant
to the job
Job Satisfaction
14
16
3.
interactions among co-
workers
Job Satisfaction
12
18
4.
Opportunities for
Job satisfaction
8
22
138 | Effect of Work Environment and Compensation on Employee Performance with Job
Satisfaction as a Mediation Variable
promotions
5.
Good supervisor response
Job Satisfaction
16
14
Total Percentage
39%
61%
Source: Pre-Survey Results ( 2021)
Based on the pre-survey table 4 above,
it shows that 61% of respondents answered
that the company has a tendency to have a
low level of employee job satisfaction.
Compensation and the work
environment greatly affect employee
performance, seen from previous research
there are differences in the results of
research on the work environment on
employee performance and employee
compensation and performance. and work
environment on employee performance.
The previous research related to the
variables above and the gap from the
results of previous studies are attached in
table 5.
Table 5. Results of Pre-Survey of Job Satisfaction
No
Statement
Factors
Yes
No
1.
Job as desired
Job Satisfaction
9
21
2.
Salary given is relevant to
job
Job Satisfaction
14
16
3.
Interaction between
cooperative co-workers
Job Satisfaction
12
18
4.
Opening opportunities for
promotion
Job satisfaction
8
22
5.
Good supervisor response
Job satisfaction
16
14
Total Percentage
39%
61%
Table 5. above shows that the results of
previous studies have a significant positive
effect on employee performance and there
are research results that the environment
work has no significant negative effect. This
has created a Research Gap. Therefore, this
effect can be explained by adding a job
satisfaction variable as an intervening
variable, and this is a gap for clarity of
research results. Job satisfaction was
chosen as the mediating variable (Y)
because when employees feel valued and
comfortable, employees can feel satisfied
with their work, so that it can improve
employee performance. Employee
performance was chosen as the dependent
variable (Z) because employee
performance can increase when employees
feel valued, comfortable, and satisfied with
their work.
Based on the description above, this
problem becomes the main attraction for
the author to be researched and analyzed.
The final result of this research will be
compiled in the form of a thesis with the
title: "The Effect of Work Environment and
Compensation on Employee Performance
With Job Satisfaction as a Mediation
Gabriel Indripriarko, M. Havidz Aima | 139
Variable.”
RESULTS AND DISCUSSION
The results of data analysis are
presented descriptively of each variable
obtained. Respondents in This study
amounted to 222 (two hundred and
twenty-two) respondents. Descriptive
analysis of the data presented includes the
mean or mean (M), the mean or median
(Me), mode (Mo), standard deviation (SD).
also presents a frequency distribution table,
and histogram for each research variable.
Characteristics of respondents will be
explained based on gender, education and
years of service to determine the profile of
employees in the analyzed organization.
Based on the PLS method, the validity
of reflexive indicators testing is carried out
in 2 stages. Stages The first is convergent
validity testing, namely validity testing
based on n the loading factor value of each
construct, and the next stage is
discriminant validity testing, namely validity
testing based on comparisons.
According to (Ghozali and Latan 2015),
an indicator is considered to have a high
level of validity if it has a loading factor
value > 0.7. The loading factor value in this
study can be seen in Table 6.
Table 6. Value Loading Factor Overall
Variables
Indicato
r
Outer
Loading
s
Cond
ition
Descriptio
n
Environme
nt
Work
(X1)
LK.1
0.859
>
0.70
Valid
LK.2
0.839
>
0.70
Valid
LK.3
0.885
>
0.70
Valid
LK.4
0.850
>
0.70
Valid
LK.5
0.823
>
0.70
Valid
LK.6
0.898
>
0.70
Valid
LK.7
0.896
>
0.70
Valid
LK.8
0.901
>
0.70
Valid
Compensa
tion
(X2)
KO1
0.759
>
0.70
Valid
KO2
0.866
>
0.70
Valid
140 | Effect of Work Environment and Compensation on Employee Performance with Job
Satisfaction as a Mediation Variable
KO3
0.873
>
0.70
Valid
KO4
0.814
>
0.70
Valid
KO5
0.855
>
0.70
Valid
KO6
0.867
>
0.70
Valid
Satisfactio
n
Job
(Y)
KK1
0.734
>
0.70
Valid
KK2
0.841
>
0.70
Valid
KK3
0.819
>
Valid
KK4
0.855
>
Valid
0.902
0.70
>
0.70
Valid
KK6
0.882
>
0.70
Valid
KK7
0.895
>
0.70
Valid
KK8
0.875
>
0.70
Valid
KK9
0.882
>
0.70
Valid
KK10
0.892
>
0.70
Valid
KK11
0.811
>
0.70
Valid
Performan
ce
Employee
Z)
KI1
0.751
0.70
Valid
KI2
0.869
>
0.70
>
(
>
0.70
Valid
KI4
0.862
>
0.70
Valid
KI5
0.836
>
0.70
Valid
KI6
0.878
>
0.70
Valid
KI7
0.866
>
0.70
Valid
Gabriel Indripriarko, M. Havidz Aima | 141
Source: Data Processing Results Using SmartPLS
Discriminant validity results from the
cross loadings values between the
indicators and their respective constructs
can be seen in table 7.
Table 7. Values Cross Loading Variables
Indicato
r
Environme
nt
Job
Compensa
tion
Satisfacti
on
Employe
e
Perform
ance
0.859
Informati
on
LK1
0.648
0.644
0.640
Valid
All
LK2
0.839
0.657
0.664
0.680
Valid
LK3
0.885
0.656
0.665
0.671
Valid
LK4
0.850
0.609
0.628
0.662
Valid
LK5
0.823
0.610
0.626
0.678
Valid
LK6
0.898
0.632
0.669
0.711
Valid
LK7
0.896
0.644
0.68419
_
Valid
0.62
0.68
_
_
_
_
_
_
_
_
_
_
_
0.641
0.866
0.650
0.657
Valid
KO3
0.675
0.873
0.659
0.655
Valid
KO4
0.578
0.814
0.580
0.587
Valid
KO5
0.637
0.855
KO6
0.627
Valid
0.606
0.660
0.867
0.657
0.695
Valid
KK1
0.559
0.573
0.734
0.626
Valid
KK2
0.626
_
_
_
Valid
0.655
0.701
0.664
0.695
_
Valid
0.664
_
_
0.702
0.744
Valid
KK5
0.667
0.642
0.895
0.748
Valid
KK6
0.682
0.634
0.875
0.734
Valid
KK7
0.652
0.636
0 .882
0.753
Valid
KK8
0.676
0.708
0.892
0.781
Valid
KK9
0.638
0.592
0.811
0.697
Valid
KK10
0.587
0.598
0.841
0.704
Valid
KK11
0.579
0.605
0.819
0.694
Valid
KI1
0.555
0.614
0.631
0.751
Valid
KI2
0.661
0.67922
0.67922
0.822
_
_
_
_
_
0.7
_
142 | Effect of Work Environment and Compensation on Employee Performance with Job
Satisfaction as a Mediation Variable
0.7
0.664
_
0.664
0.862
Valid
KI5
0.625
0.623
0.705
0.836
Valid
KI6
0.659
0.643
0.773
0.878
Valid
KI7
0.749
0.679
0.754
0.866
Valid
Source: Data Processing Results Using SmartPLS
The construct is greater than the Cross
Loadings value of the other constructs so
that it is declared Valid. The AVE value of all
variables can be seen in Table 8.
Table 8. Average Variance Extracted (AVE)Each Source Variable
Variable
AVE
Value
Conditi
on
Descriptio
n
Work Environment
0.756
> 0.50
Valid
Compensation
0.706
> 0.50
Valid
Job Satisfaction
0.730
> 0.50
Valid
Employee
Performance
0.720
> 0.50
Valid
Source: Results of Data Processing Using SmartPLS
In table 8. above, it can be seen that the
AVE value for all variables has an AVE value
> 0.5, namely 0.756 for the Work
Environment variable, 0.706 for the
Compensation variable, 0.730 for the Job
Satisfaction variable, and 0.720 for the
Employee Performance variable. The AVE
value for discriminant validity testing has
met for further testing. Based on the
explanation above regarding the value of
the discriminant validity test and the
convergent validity test, it can be
concluded that the research model is valid.
The questionnaire is said to be reliable
or reliable if a person's answer to the
statement is consistent or stable over time.
Based on data processing using the PLS
method.
Table 9. Partial Effect of Independent Variables on Dependent
Variables
Origin
al
Sample
(O)
Sampl
e
Mean
(M)
Standar
d
Deviatio
n
(STDEV)
T
Statistics
(O/STDEV
)
T
Tabl
e
P
Values
Work Environment
→ Job Satisfaction
0.442
0.448
0.076
5.820
1.96
0.000
Environment Work
→ Employee
Performance
0.240
0.245
0.068
3.524
1.96
0.000
Gabriel Indripriarko, M. Havidz Aima | 143
Compensation
→ Job Satisfaction
0.414
0.407
0.069
6.040
1.96
0.000
Compensation
→ Employee
Performance
0.186
0.180
0.068
2.718
1.96
0.007
Job Satisfaction
→Employee
Performance
0.534
0.534
0.073
7.359
1.96
0.000
Source: Results of Data Processing Using SmartPLS
Table 10. Variables Simultaneous Effect of Independent Variables on Dependent
R²
F
Statistic
s
F Table
Alph
a
Conclusion
(X1,X2) → Y
0.63
5
126.42
2.65
0.05
Fcount > Ftable (H6
accepted)
(X1,X2,Y) → Z
0.78
1
259.14
2.65
0.05
Fcount > Ftable (H7
accepted)
Source: Results of Data Processing Using SmartPLS
Table. 11. Direct Effect Between Variables
Kepuasan
Kerja
Kinerja
Karyawan
Kompensasi
Lingkungan
Kerja
Kinerja
Karyawan
Kompensasi
0. 414
0. 186
Lingkungan
kerja
0. 442
0. 240
Kepuasan
Kerja
0. 534
Source: Results of Data Processing Using SmartPLS
Table. 12. Indirect Effect Between Variables
Kepuasan
Kerja
Kinerja
Karyawan
Kompensasi
Lingkungan
Kerja
Lingkungan
Kerja
0. 236
Kompensasi
1. 221
144 | Effect of Work Environment and Compensation on Employee Performance with Job
Satisfaction as a Mediation Variable
Kinerja
Karyawan
Kepuasan
Kerja
Source: Results of Data Processing Using SmartPLS
Table. 13. Total Effect (Total Effect) Between Variables
Kepuasan
Kerja
Kinerja
Karyawan
Kompensasi
Lingkungan
Kerja
Lingkungan
Kerja
0.442
0. 406
Kompensasi
0.414
0. 407
Kinerja
Karyawan
Kepuasan
Kerja
0.534
Source: Results of Data Processing Using SmartPLS
Table 14. Result of Calculation of VAF Value
Variable
Indirect
Effect
Total
Effect
of VAF
Value
Work Environment → Employee
Performance
0.236
0.476
49.58%
Compensation → Employee
Performance
0.221
0.407
54.30%
Source: Results of Data Processing Using SmartPLS
Table 15. Results of Inter-Dimensional Correlation Matrix
Variable
Dimen
sions
of Job Satisfaction (Z)
Z
1
Z
2
Z
3
Z
4
Z
5
Work Environment
(X
1
)
X1.1
0.496
0.513
0.443
0.423
0.360
X1.2
-
0.066
-
0.103
0.035
0.018
-
0.025
Compensation (X
2
)
X2.1
0.277
0.179
0.215
0.283
0.345
X2.2
0.128
0.218
0.082
0.129
0.072
Variable
Dimen
sion
Employee Performance
Y
1
Y
2
Y
3
Y
4
Y
5
Work Environment
(X
1
)
X
1.1
0.283
0.153
0.160
0.211
0.503
X
1.2
-
0.203
0.107
-
0.000
-
0.079
-
0.115
Gabriel Indripriarko, M. Havidz Aima | 145
Compensation (X
2
)
X
2.1
0.263
0.085
-
0.050
-
0.034
0.065
X
2.2
0.033
0.088
0.212
0.135
0.052
Job Satisfaction (Z)
Z
1
0.151
0.127
0.171
0.175
-
0.009
Z
2
0.014
0.120
-
0.026
-
0.022
0.095
Z
3
-
0.141
-
0.002
0.044
0.106
-
0.035
Z
4
0.313
0.146
0.138
0.299
0.275
Z
5
0.017
0.146
0.186
0.086
0.067
Source: Results of Data Processing Using SmartPLS
Proof of the hypothesis in this study
can follows:
1) Hypothesis 1
Effect of Work Environment on
Satisfaction Work. The path coefficient
is 0.442 and t count (5.820) > t table
(1.96) with a P value of 0.000, thus H1 is
accepted (P < 0.10) and H0 is rejected,
the work environment has a significant
positive effect on job satisfaction.
2) Hypothesis 2
Effect of Compensation on Job
Satisfaction. The path coefficient is
0.414 and t count (6.040) > t table (1.96)
with a P value of 0.000, thus H1 is
accepted (P < 0.10) and H0 is rejected,
the work environment has a significant
positive effect on job satisfaction.
3) Hypothesis 3
The Effect of Work Environment on
Employee Performance. The path
coefficient is 0.240 and t count
(3.524)>t table (1.96) with a P value of
0.000, thus H1 is accepted (P < 0.10)
and H0 is rejected, the work
environment has a significant positive
effect on employee performance.
4) Hypothesis 4
The Effect of Compensation on
Employee Performance. The path
coefficient is 0.186 and t arithmetic
(2.718) > t table (1.96) with a P value of
0.000, thus H1 is accepted (P < 0.10)
and H0 is rejected. Compensation has a
significant positive effect on employee
performance.
5) Hypothesis 5
The Effect of Job Satisfaction on
Employee Performance. The path
coefficient is 0.534 and t arithmetic
(7.359) > t table (1.96) with a P value of
0.000, thus H1 is accepted (P<0.10) and
H0 is rejected. Compensation has a
significant positive effect on employee
performance.
6) Hypothesis 6
The Effect of Simultaneous Work
Environment and Compensation on
Employee Performance. Variables of
Work Environment and Compensation
have (R²) 0.635 with an f statistic of
126.42 and an f table value of 0.05
alpha which is 2.65. This means that f
count (126.42) > f table (2.65), then H6
is accepted and H0 is rejected. Thus, it
146 | Effect of Work Environment and Compensation on Employee Performance with Job
Satisfaction as a Mediation Variable
can be concluded that hypothesis 6 is
proven, which states that the work
environment and compensation
variables together have a positive and
significant effect on job satisfaction.
7) Hypothesis 7
Simultaneous Influence of Work
Environment, Compensation, and Job
Satisfaction on Employee Performance.
Variables of Work Environment,
Compensation, and Job Satisfaction
have (R²) 0.781 with an f statistic value
of 259.14 and an f table value at alpha
of 0.05 which is 2.65 . This means that f
count (259.14) > f table (2.65), then H7
is accepted and H0 is rejected. Thus, it
can be concluded that hypothesis 7 is
proven, which states that the variables
of Work Environment, Compensation,
and Job Satisfaction together have a
positive and significant influence on
employee performance.
8) Hypothesis 8
The Effect of Job Satisfaction
Mediating the Work Environment on
Employee Performance. The results of
the calculation of the Varience
Accounted For (VAF) value to test the
mediation of variable relationships
based on the Indirect Effect value =
0.236 and Total Effect = 0.476, the VAF
value = 49.58%.
The value of 49.58% shows the
indirect effect of the Work Environment
variable on Employee Performance can
be mediated by the Job Satisfaction
variable, this shows that an increase in
the Work Environment can improve
Employee Performance through the Job
Satisfaction variable.
9) Hypothesis 9
The Effect of Job Satisfaction
Mediating Compensation on Employee
Performance. The results of the
calculation of the Varience Accounted
For (VAF) value to test the mediation of
variable relationships based on the
Indirect Effect value = 0.221 and Total
Effect = 0.407, the VAF value = 54.30%.
The value of 54.30% shows the indirect
effect of the Work Environment variable
on Employee Performance can be
mediated by the Job Satisfaction
variable, this shows that an increase in
the Work Environment can improve
Employee Performance through the Job
Satisfaction variable.
CONCLUSIONS
Based on the results of research and
discussion in previous chapters, several
conclusions can be drawn as follows: 1).
Work environment has a positive and
significant effect on job satisfaction, with
the dimensions of the physical work
environment having the strongest
influence. 2). Compensation has a positive
and significant effect on Job Satisfaction,
with the Normative Compensation
dimension having the strongest influence.
3). Work Environment has a positive and
significant effect on Employee
Performance, with the Physical Work
Environment dimension having the
strongest influence. 4). Compensation has a
positive and significant effect on Employee
Performance, with the Normative
Compensation dimension having the
strongest influence. 5). Job Satisfaction as a
mediator in this study has a positive and
Gabriel Indripriarko, M. Havidz Aima | 147
significant effect on employee
performance, with the relationship with
superiors dimension having the strongest
influence. 6). Work Environment and
Compensation together have a positive
effect on Job Satisfaction. 7). Work
Environment, Compensation, and Job
Satisfaction simultaneously have a
significant positive effect on employee
performance. 8). Job Satisfaction mediates
the Work Environment on Employee
Performance. 9). Job Satisfaction mediates
Compensation on Employee Performance.
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