THE EFFECTS OF COMPENSATION AND WORK COMPETENCE ON EMPLOYEE PERFORMANCE: THE MEDIATING ROLE OF JOB SATISFACTION AMONG EMPLOYEES AT BANK BTN GRESIK BRANCH

Abstract

This study aims to examine the effects of compensation and work competence on employee performance, with motivation serving as an intervening variable among employees of Bank BTN Gresik Branch. The study adopts a quantitative descriptive approach. In this research, compensation and competence are treated as independent variables. The study was conducted at the Bank BTN Gresik Branch office, involving a total of 60 respondents selected using a saturated sampling technique. The data were analyzed using path analysis, preceded by instrument testing and classical assumption tests, followed by hypothesis testing. The results indicate that compensation has a significant effect on employee performance. Likewise, competence has a significant effect on employee performance, and motivation also significantly influences employee performance. Furthermore, compensation and competence are found to significantly affect motivation. In addition, compensation has an indirect effect on employee performance through motivation, and competence also has an indirect effect on employee performance through motivation among employees of Bank BTN Gresik Branch. The path analysis results confirm that both compensation and competence indirectly influence employee performance through motivation. However, the findings reveal that the total effect coefficient of compensation is lower than that of competence. Overall, the results demonstrate that all hypotheses are supported, indicating that compensation and competence have both direct and indirect effects on motivation and employee performance. It is expected that the findings of this study can contribute to improving employee performance at Bank BTN Gresik Branch by emphasizing the importance of compensation, competence, and motivation.