The Role of Leadership Style and Compensation in Enhancing Employee Performance: the Mediating Effect of Work Motivation

I Made Manik Putra Wibawa; Ida Bagus Udayana  Putra; I Wayan Gde  Sarmawa; Ni Luh Putu  Indiani; Ni Wayan  Sitiari; Putu Ngurah Suyatna  Yasa

doi:10.38142/ijesss.v7i1.1860

Authors

I Made Manik Putra Wibawa Warmadewa University, Indonesia
Ida Bagus Udayana Putra Warmadewa University, Indonesia
I Wayan Gde Sarmawa Warmadewa University, Indonesia
Ni Luh Putu Indiani Warmadewa University, Indonesia
Ni Wayan Sitiari Warmadewa University, Indonesia
Putu Ngurah Suyatna Yasa Warmadewa University, Indonesia

DOI:

https://doi.org/10.38142/ijesss.v7i1.1860

Keywords:

Leadership Style, Compensation, Work Motivation, Employee Performance

Abstract

This study aims to examine the effect of leadership style and compensation on the performance of production employees, with work motivation as a mediating variable, at PT Indoprima Gemilang. A quantitative research approach was employed using a survey method. The population of this study consisted of production employees, with a sample of 100 respondents selected through proportionate stratified random sampling. Data were collected using structured questionnaires and analyzed using Structural Equation Modeling based on Partial Least Squares (SEM-PLS) to examine both direct and indirect relationships among variables. The results indicate that leadership style and compensation have a positive and significant effect on work motivation and employee performance. In addition, work motivation has a positive and significant effect on employee performance and partially mediates the relationship between leadership style and employee performance, as well as between compensation and employee performance. These findings highlight the importance of effective leadership practices and appropriate compensation systems in enhancing employee motivation and improving production performance.

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