Logo 3 NewVolume 2, No. 3 March 2023 - (205-218)

p-ISSN 2980-4868 | e-ISSN 2980-4841

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HOW TO IMPROVE EMPLOYEE PERFORMANCE THROUGH THE ROLE OF WORK ENGAGEMENT MEDIATION EMPIRICAL STUDIES ON PUBLIC SECTOR ORGANIZATIONS

 

Titik Sri Sabekti*, Achmad Ichwan Setiawan

Universitas Sebelas Maret , Surakarta, Central Java, Indonesia

Emails: : titikbolo@gmail.com

 


 

ABSTRACT:    


The demand for responsive, effective, and efficient employee services to the public is a challenge for public sector organizations. This study aimed to examine the mediating role of work engagement in the relationship between training and rewards for employee performance. Work engagement creates good interaction between employees and workers so that employees feel obliged to respond through increased performance. The data were obtained from 213 BPS employees who were processed using SmartPLS3. The results showed that work engagement was a mediator of the relationship between training and rewards for employee performance. This research is expected to add information about the management of performance management in public sector organizations.      


                                                                                               


Keywords: training, rewards, work engagement, employee performance.

 

 

Article History                       

Received: February 10 2023

Revised: March 10 2023

Accepted: March 26 2023

DOI: xxx


 

INTRODUCTION

Employee performance in achieving service quality is a serious problem in various countries, especially in the public sector. The results of a survey conducted by the Global Competitiveness Report (2018) show that the quality of the Indonesian bureaucracy is in the wrong category, where corruption and government bureaucratic inefficiency are problems facing the  Indonesian state. Indonesia has the lowest level of good governance among neighbouring countries, with Indonesia's good governance index at 2.8. This figure is very low compared to other countries such as Singapore 8.9; Malaysia 7.7 (Indonesia.go.id). One of the factors causing Indonesia's low good governance index comes from human resources. According to (Mahsyar, 2011), these weaknesses are related to professionalism, competence, and ethics. In addition, it is also caused by a low and inappropriate compensation system. The ASN work pattern still adheres to the classic bureaucracy, which applies a structured/hierarchical, formal, legalistic, and closed work system. The Ministry of State Apparatus Empowerment stated that ASN performance was still relatively low, especially regarding public services. This problem is a serious concern for the government, so strategic steps are needed to manage public sector organizations' human resources (www.menpan.go.id).

Effective human resource management is required in facing increasingly complex organizational challenges (Karatepe, 2013). Performance management has developed into a tool that can be used to overcome problems related to employee performance through the effective and efficient use of human resources (Hanaysha, 2016). According to (Sarvaiya et al., 2018), employees are considered strategic partners who are involved in the organization's success in achieving its goals. Training and awards are expected to motivate employees to improve their performance. Positive work engagement and performance are ways for employees to provide feedback on the benefits provided by the organization. Employees give their thoughts and energy to carry out tasks with a high energy level so that they will be more enthusiastic about their work.

Training is the practice of skills and knowledge given to employees through learning experiences to achieve better performance (Hanaysha, 2016). Training is needed to improve the knowledge and attitudes of employees so that they are more committed, have a competitive advantage, and can adapt to changes related to the organization (Meyer & Allen, 1991). The organization seeks to develop employee capabilities to improve competency through effective training programs to achieve organizational goals (Younas et al., 2018). Likewise, rewards are considered a strategy to motivate employees to improve performance. Organizations need to design reward systems that can have a positive impact on the performance contributions that have been made by employees (Hamer et al., 2006). This award can be in the form of promotions, bonuses, or positive behaviour given by the organization to employees. This is a way to motivate them to show positive performance for the organization.

Previous research proved that human resource management practices such as training and awards positively influence employee performance (Truss et al., 2013). However, mechanisms where human resource management practice still need much attention (Muduli et al., 2016). Therefore several recent types of research emphasize the role of training and awards in improving employee performance (Memon et al., 2016).

According to (Schaufeli et al., 2006), work attachment is a state of mind related to full-time working hours and a positive mind marked with eagerness, dedication and absorbent. High attachment to work tends to show a high performance in one employee (Shuck & Reio Jr, 2014), an employee who has an attachment to his work will perform a positive attitude that benefits the company.

This research aims to fill the void in previous literature (Muduli et al., 2016) by examining mediation effects between work attachment, training & prizes and employee performance. Social exchange theory is a guideline to explains that an employee who receives financial and socio-emotional resources from one organization tends to pay back in the form of commitment and better performance (Cropanzano & Mitchell, 2005).

With social exchange theory as a theoretical framework, this research will examine whether work attachment could mediate the relationship between training & prizes and employee performance.

Social Exchange Theory

Social Exchange Theory is a conceptual perspective that influences how we perceive certain attitudes in the working area (Settlon, Bennett, Liden 1996). It also involves a series of interactions that lead to attachment (Cropanzano & Mitchell, 2005). The relation of social exchange appears when a good relationship between the organization and the employee exists, followed by beneficial consequences that result in effective and positive employee performance (Blau, 1968).

Work attachment and positive performance are good organizational feedback (Saks 2006). An employee who gives his ability, emotion and effort to work enthusiastically and contribute to the company. When given proper training and award, they will participate through the level of work attachment. Training and award are hoped to improve social exchange quality (Jensen et al., 2013). The appearance of proper management for the employee will create a working environment where the employee and the company will have a high-quality relationship.

Training and Working Attachment

Training is an important aspect in public sector organizations where it will give opportunity and support to the employee and influence the work attitude to reach the objective. Employees are joining technical and administrational training according to the operational procedure.

Training to improve knowledge, skill and motivation aims to improve their performance. If done in an organized way, it will strengthen the company (Hanaysha, 2016). The impact of holding the training will create a working attachment, as mentioned in the social exchange theory, that organizations who invest in human resources will always get good feedback from that. Therefore following hypotheses below are proposed:

Training and Employee Performance

Training is a series of processes focusing on obtaining knowledge, improving skills and employee performance (Sabir et al., 2014); therefore, the organization should provide an effective training program. Training is an important element in performance management that will result in imaginative, productive and competitive employees to improve performance (Falola et al., 2014).

Previous research has revealed a positive and significant relationship between training and employee performance (Aiello et al., 2011). The employee who receives adequate training will be able to grow positive work productivity, which positively impacts the organization. It is in line with social exchange theory which reveals that reciprocity is an interdependent exchange, where organizations that have provided training to employees expect improved performance. Then the hypothesis is proposed as follows:

H2: Training has a positive effect on employee performance.

Employment rewards and attachments

A reward is the benefits an organization offers employees for job performance (Karatepe, 2013). Rewards can be intrinsic or extrinsic, direct or indirect, and financial or non-financial (Armstrong & Brown, 2006), so organizations must implement effective and efficient rewards as needed. Social exchange theory reveals that the social relations between the employee and the organization he works for give rise to mutual dependence. When the organization provides appropriate rewards to the employee will give rise to his attachment to the organization. Then the hypothesis is proposed as follows:

H3: Rewards have a positive effect on work attachment.

Employee Rewards and Performance

Rewards are benefits offered to employees in exchange for employment, such as career advancement or promotion. It is necessary to understand that the reward system will affect individuals' performance and level of attachment in the workplace. An organization's reward system should motivate employees regarding higher performance, productivity, and engagement. Research (Hoole & Hotz, 2016) revealed that valued employees tend to improve their performance. Organizations can use rewards to improve employee performance by considering the existence of assessments or promotions for employees with high-performance records. Then the hypothesis is proposed as follows:

H4: Rewards have a positive effect on Employee Performance.

Work Attachment and Employee Performance

Work attachment creates an assumption that the workers involved dedicate resources both physically and mentally to job tasks so that the employees involved show positive attitudes and behaviours in the workplace. Work attachment is how employees can absorb and pay attention to their job performance and tend to prioritize job tasks. It is consistent with social exchange theory, where employees with a work attachment to the organization will show positive behaviour (Saks, 2006). It showed that employee attachment strongly influences their performance, such as how they handle their work. Therefore, the following hypothesis is proposed:

H5: Work attachment has a positive effect on Employee Performance.

The Role of Work Attachment Mediation

Social exchange theory describes work attachment as a mediator of the effects of training and reward on employee performance. Employees who receive appropriate training and rewards will show higher work attachment (Karatepe, 2013), so there is a more qualified relationship between employees and the organization. The research revealed that work attachment mediates the relationship between training and reward and employee performance. Employee work attachment is high when the organization provides a fair compensation system (Karatepe, 2013), so employees feel that their careers align with the organizational culture and job requirements. Employees will improve their performance in exchange for the awards given by the organization (Karatepe, 2013). Thus, the hypothesis is proposed as follows:

H6a: Work attachment mediates the relationship between training and Employee Performance

H6b: Work attachment mediates the relationship between Reward and Employee Performance

 

RESEARCH METHODS

Research samples and procedures

BPS is a non-ministerial government agency tasked with carrying out activities in the statistical field according to the law (www.bps.go.id). The bureaucratic reform program carried out by BPS has areas of change, one of which is human resource management. The data in this study were obtained from the BPS State Civil Apparatus, totalling 213 employees. Data was collected by distributing online questionnaires using the Google Form tool via WhatsApp and Email. The questionnaire contains profiles of respondents at the beginning, then question items from training, rewards, work engagement and employee performance variables. Initially, the questionnaire was tested on 43 BPS employees. Input from respondents in this pre-test is expected to help develop respondents' understanding of the question items in the questionnaire.

The number of respondents in this study was 213 BPS employees. The characteristics of the respondents can be seen in the table below.

 

Table . 1 demographic statistics (N=213)

category

Items

frequency

percentage (%)

gender

male

109

50,90

female

104

49,10

education

undergraduate

35

16,30

graduate

143

67,30

postgraduate

35

16,40

age

< 26 years

16

7,50

26-35 years

63

29,90

36-45 years

82

38,30

> 45 years

52

24,30

 

Measurement Instruments

Variables are measured using several indicators. Training is measured by five items adapted from (Schmidt, 2007), and 11 items to measure reward was adapted from (Siegrist et al., 2004). Job engagement question items were 17 items from (Schaufeli et al., 2006) and employee performance with nine items from (Griffin et al., 2007). Responses to the training question items, rewards, work engagement and employee performance were assessed on a 5-point scale ranging from 5 (strongly agree) to 1 (strongly disagree). The question items in the questionnaire were taken from the English language and then translated into Indonesian using the back translation method (Parameswaran & Yaprak, 1987).

Results by Analysis

This research uses PLS-SEM with SmartPLS3 software. The software is designed to examine the relationship between variables in a model, whether the relationship between indicators and constructs or between constructs (Hair et al., 2011). This analysis uses the measurement model (outer model) and the structural model (inner model).

The measurement model is determined based on the relationship between variables with each indicator using validity and reliability. Convergent validity measures the validity of the indicator as a measure of the variable that can be seen from the outer loading value. An indicator is considered valid if the outer loading value for each indicator is > 0.70, so an indicator with a loading value below 0.70 is excluded from the model. Average Variance Extracted (AVE) measures the fulfilment of the discriminant validity requirements. The minimum value requiring that reliability has been achieved is 0,50. Several indicators were excluded from the model because they did not meet the validity requirements. Three items from training, three from awards, three from work engagement, and two items from employee performance were excluded from the model for the next analysis stage.

 

Table 2. Confirmatory Factor Analysis

 

indicator

loading factor

AVE

CR

Cronbach's α

 

 

 

training

0.713

0.882

0.799

train3

0.809

train4

0.883

train5

0.841

rewards

0.585

0.918

0.898

rewards1

0.756

rewards 2

0.734

rewards 4

0.815

rewards 6

0.843

rewards 7

0.721

rewards 8

0.724

rewards 9

0.737

rewards 11

0.779

Work engagement

0.609

0.956

0.950

WE1

0.845

WE2

0,778

WE3

0,821

WE4

0,708

WE5

0,753

WE7

0.717

WE8

0.792

WE9

0.800

WE11

0.782

WE13

0.763

WE14

0.859

WE15

0.801

WE16

0.774

WE17

0.718

Employee performance

0.617

0.919

0.896

EP1

0.753

EP4

0.720

EP5

0.830

EP6

0.801

EP7

0.781

EP8

0.829

EP9

0.781

 

 

 

 

Discriminant validity was measured using the criteria presented by Fornell-Larcker, where the root of the AVE variable is greater than the correlation between variables.

 

Table 3. Fornell-Larcker Criterion

variable

training

WE

EP

rewards

training

0,845

WE

0,560

0,781

EP

0,517

0,778

0,786

rewards

0,515

0,757

0,758

0,765

 

(Hair et al., 2019) recommend Heterotrait-Monotrait (HTMT) because this measure is considered more accurate in detecting discriminant validity with a value below 0,9. The test results in Table 4 show that the HTMT value is below 0,9, so discriminant validity is achieved.

 

Table 4. Heterotrait-Monotrait Ratio (HTMT)

 

training

WE

EP

rewards

training

WE

0,642

EP

0,609

0,848

rewards

0,605

0,837

0,844

 

Discriminant validity can also be known through cross-loading if the loading value of each item on the construct is greater than the cross-loading value.

 

Table 5. Cross-loading

 

WE

EP

training

rewards

WE1

0,845

0,625

0,556

0,657

WE11

0,782

0,623

0,458

0,586

WE13

0,763

0,654

0,389

0,679

WE14

0,859

0,659

0,403

0,645

WE15

0,801

0,593

0,419

0,528

WE16

0,774

0,661

0,425

0,655

WE17

0,718

0,567

0,387

0,551

WE2

0,778

0,528

0,481

0,579

WE3

0,821

0,621

0,454

0,659

WE4

0,708

0,625

0,347

0,610

WE5

0,753

0,653

0,432

0,627

WE7

0,717

0,540

0,444

0,489

WE8

0,792

0,594

0,468

0,588

WE9

0,800

0,608

0,450

0,593

EP1

0,649

0,753

0,494

0,612

EP4

0,564

0,720

0,375

0,548

EP5

0,614

0,830

0,434

0,610

EP6

0,612

0,801

0,337

0,549

EP7

0,591

0,781

0,376

0,563

EP8

0,655

0,829

0,404

0,641

EP9

0,625

0,781

0,414

0,636

train3

0,427

0,411

0,809

0,343

train4

0,498

0,452

0,883

0,491

train5

0,490

0,446

0,841

0,463

rewards1

0,614

0,559

0,508

0,756

rewards11

0,536

0,611

0,223

0,779

rewards2

0,557

0,584

0,475

0,734

rewards4

0,578

0,586

0,408

0,815

rewards6

0,607

0,606

0,246

0,843

rewards7

0,631

0,531

0,474

0,721

rewards8

0,631

0,581

0,404

0,724

rewards9

0,589

0,578

0,415

0,737

 

For reliability, Cronbach's Alpha can be used. This value reflects the reliability of all indicators in the model. In Table 2, the Cronbach's Alpha and composite reliability values follow the requirements, with Cronbach's Alpha and composite reliability each being more than 0.7, so it is concluded that reliability is fulfilled.

Based on the theory, the structural model tests the causal relationship between variables. To explain the multicollinearity of VIF, each predictor is lower than 5 (Hair et al., 2019). In this study, a VIF value below 5 means no collinearity problems are found. R-square is used to test the structural model. Criteria for R-square value < 0,3 (weak), 0,3 <R-square <0,6 (moderate), R-square > 0,6 (high) (Sanchez, 2013). The R-square value indicates that the training, reward and work engagement variables can explain the construct variability of employee performance by 67,7%. Other constructs explain the remaining 32,3% outside this research model.

Hypothesis Test

Hypothesis testing is carried out based on the results of testing the Inner model (structural model) to see whether the hypothesis can be accepted or rejected by considering the significant values between constructs, t-statistics and p-values. Testing the research hypothesis using smart please 3.0 software with the bootstrapping method with 1000 subsamples. The criteria used in this study were t-statistics > 1.96 with a significance level of p-values < 0.05.

 


Table 6. Path coefficient


Hipotesis

t-Statistik

Interval Confidence 95%

P Values

remarks

2,50%

97,50%

H1 : training -> WE

2,566

0,035

0,348

0,011

significant

H2 : training -> EP

1,153

-0,050

0,187

0,249

no

H3 : reward -> WE

11,706

0,568

0,787

0,000

significant

H4 : rewards -> EP

3,143

0,135

0,550

0,002

significant

H5 : WE -> EP

3,432

0,242

0,714

0,001

significant


 

Table 6 provides information that, based on this study, the H1 hypothesis is supported (p-value <0.05), meaning that training directly affects employee performance. The H2 hypothesis is not supported (p-value <0.05), where training does not directly affect work engagement. The H3 hypothesis is supported (p-value <0.05), meaning that rewards significantly affect work engagement. The H4 hypothesis is supported (p-value <0.05), meaning that rewards significantly affect work engagement. The H5 hypothesis is supported (p-value <0.05), meaning that work engagement significantly affects employee performance.

 

Table 7. indirect effect

Hipotesis

t-Statistik

P-Values

remarks

H6a : Training -> WE -> EP

2,098

0,036

significant

H6b : rewards -> WE -> EP

2,923

0,004

significant

 

The indirect effect of training and rewards on employee performance was also observed. The output of smartPLS has provided an analysis of the expected results when researchers use the indirect effect as part of the hypothesis. As seen in the table above, the results of smartPLS bootstrapping on the specific indirect effect show that training indirectly affects employee performance. In contrast, the H6a hypothesis is supported (p-value <0.05), which means that work engagement mediates the relationship between training and employee performance. The H6b hypothesis is supported (p-value <0.05), which means that work engagement mediates the relationship between rewards and employee performance.

In addition, to determine the indirect effect of the relationship between rewards and employee performance through the Sobel test. The Sobel test tests the strength of the indirect effect between rewards on employee performance. In this study, the Sobel test was calculated using the Sobel calculator (Preacher & Leonardelli, 2001), and the Sobel test values were obtained as in the following table.

 

Table 8. Test Statistic

 

test statistik

std. error

p-values

Sobel test

2.412

0.069

0.015

 

The p-value is 0.015 <0.05, and the t-statistic is 2.412 > 1.96, which means that work engagement mediates the relationship between rewards and employee performance.

 

RESULTS AND DISCUSSION

This study proposes and tests a model that investigates work engagement as a mediating variable in the relationship between training and rewards and employee performance. The social exchange theory states that employees will be more committed to showing committed behaviour in carrying out tasks when the organization provides benefits for them. This research also provides literature that organizations must improve employee performance by providing job training because this can help increase employee knowledge and skills. When employees have sufficient skills, they can improve their performance. The results of this study are from the perspective of strategic human resources, where the combination of performance management practices used by organizations has a major role in encouraging employees to perform tasks with better performance (Cooke & Kim, 2018).

Therefore, employees must be attached to work to remain competitive. Training programs focus on increasing knowledge and skills related to employee duties and can create interactions in the workplace so that employees feel obliged to respond through work engagement.

This study provides information that direct training does not significantly affect employee performance. This is because some employees do not receive training following their duties and responsibilities. When the organization increases the volume of employee training according to their needs, it will improve performance, which will benefit the organization.

This study provides information that the training program provided by the BPS organization has not been running effectively. Technical field training at BPS is conducted to harmonize the concepts and definitions of implementing census or survey activities. The large number of officers required in the survey meant that the training participants had to involve cross-sectional employees to meet the required quota of officers. So, not all employees participating in the training were competent or according to their main duties and job functions. Training materials tend to be in the form of refreshments because most of the surveys conducted by BPS are routine surveys, whether annual, semiannual, quarterly, or monthly.

The study proved a positive relationship between appreciation with work engagement, in line with the study conducted by (Wall & Wood, 2005). The workplace reward mechanism strongly showed employees that the organization valued and recognized their efforts. From the management of human resources point of view, appreciation motivated the employees to show their positive work behaviour (Milne et al., 1995). The organization needed to know what the employees expected from their work. Applying a proper appreciation system to employees made them more motivated in their performance, which increased their work engagement. It emphasized that motivation had increased the employee's contribution to the organization. Therefore, the organization needs to find a strategy to have a competitive advantage.

To achieve the bureaucratic reform goals at the Central Bureau of Statistics, the organization should implement mutually synergized awards to gain honest organizational policy feedback in making decisions on improving employee performance. The awards were given in the form of appreciation to employees for the best performance, such as giving performance allowances according to employee performance and promoting the employees who perform well.

It was hoped that the awards would motivate employees to carry out the Central Bureau of Statistics' core values (professional, integrity and trustworthiness), which were necessary to improve employee performance, providing better governance changes that led to the best public service delivery. This study provided information that work engagement was a mediator between training and rewards due to employee performance. This is in line with the research (Karatepe, 2013). The reward system played an important role in encouraging employee engagement. It supported the research conducted by (Bakker & Demerouti, 2018), which stated that a positive relationship between work resources and work engagement was the rewards provided by the organization to motivate the employees. The results of this study were in line with (Yalabik et al., 2013), which revealed that the relationship between training and rewards due to employee performance depended on the driving forces that applied in the workplace (e.g. the training and reward systems implemented by the organization).

The managerial implications

This study provided an overview of performance management in public sector organizations. Work engagement is a long-term and sustainable process. Therefore, organizations must understand the important role of work engagement and employee performance (Saks 2006). Organizations should provide training and rewards to make the employees feel obligated to respond to the organization by increasing their engagement and performance. Organizations should ensure that they have an ongoing training program in place to improve employee skills. An appropriate reward system also needs to be concern by the organization to increase work engagement. It is recommended that the organization should conduct regular training to improve the employee's skills and competency to achieve higher performance.

Research Limitations

Employee performance was used as a performance result in the research. On the other hand, another important performance behaviour, such as innovative work behaviours, refers to the employees' new ideas in performing work and related tasks. Future research could incorporate innovative work behaviour into research models. Thus, it could give a better draft of the job mediation role in relationships between training and appreciation of employee performance. The researchers faced data collection challenges because of the respondent's lack of response. In dealing with the problem,  the institution leaders' support was needed in collecting the data, such as a research recommendation letter to gain a better response from the respondents.

 

CONCLUSION

The study proposed and tested research models of job attachment as a mediator between training and reward due to employee performance. Training and appreciation created a closer work engagement between employees and organizations, eventually improving employee performance. The relationship entirely mediated job engagement between training and reward due to employee performance. In this case, organizations should invest in training and reward systems to get employees involved in the organization and thus perform high-quality performance. Researchers suggested that organizations should create a better program of incentives where organizations can manage each employee to become more responsible for their duties. This study will provide input for other researchers to focus on the role of mediation in the relationship between training and reward due to employee performance and broader research subjects.

 

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Copyright holder:

Titik Sri Sabekti*, Achmad Ichwan Setiawan (2023)

 

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Asian Journal of Engineering, Social and Health (AJESH)

 

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