The Influence of Organizational Culture and Compensation on Employee Engagement: The Mediating Role of the Work Environment in the Manufacturing Industry Sector of Lampung Province
DOI:
https://doi.org/10.58812/wsbm.v4i02.2961Keywords:
Compensation, Employee Engagement, Organizational Culture, Manufacturing Industry, Work EnvironmentAbstract
Employee engagement is a crucial factor in enhancing employee productivity, loyalty, and performance in the manufacturing industry. However, low levels of employee engagement remain a significant challenge, influenced by various internal organizational factors, including organizational culture, compensation, and the work environment. This condition highlights the need for research to identify the factors affecting employee engagement in the manufacturing sector in Lampung Province. This study aims to analyze the influence of organizational culture and compensation on employee engagement and to examine the mediating role of the work environment. A quantitative research approach was employed using primary data collected through questionnaires distributed to 260 employees in the manufacturing sector in Lampung Province, selected through probability sampling. The data were analyzed using Structural Equation Modeling (SEM). The findings indicate that Hypothesis 1 was not supported, as organizational culture did not have a significant positive effect on employee engagement. Hypothesis 2 was supported, showing that compensation had a significant positive effect on employee engagement. Hypotheses 3 and 4 were not supported, indicating that the work environment did not mediate the relationship between organizational culture and employee engagement or between compensation and employee engagement. Based on these findings, companies are encouraged to strengthen fair, competency-based, and performance-oriented compensation systems while maintaining organizational culture stability and improving the work environment to enhance employee engagement. Future research is recommended to investigate other factors that may influence employee engagement.
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