The Impact of Organizational Communication and Compensation on Employee Performance, with Employee Engagement as a Mediating Variable (Evidence from an Indonesian Stated-Owned Company)

Abstract

This study aims to analyze the effect of compensation and organizational communication on employee engagement and then to analyze the effect of employee engagement on employee performance. A total of 128 PT Pegadaian employees were involved as research respondents. This quantitative research uses a survey method, and data collection uses a questionnaire and a Likert scale. Data were analyzed using structural equation modeling (SEM) and the AMOS program. The advantage of the SEM approach with AMOS is that the analysis can be carried out simultaneously. The results showed that of the 5 research hypotheses, research data supported three: 1) Compensation had a positive and significant effect on employee engagement, 2) Compensation had a positive and significant effect on employee performance, and 3) Employee engagement had a positive and significant effect on employee performance. This means that research data support the role of employee engagement as a mediating variable.