The Effect of Compensation and Work Environment on Employee Performance at PT Indonesia Asahan Aluminum Kuala Tanjung

Oct 13, 2025 by talynt.org 10 views

The Effect of Compensation and Work Environment on Employee Performance at PT Indonesia Asahan Aluminum Kuala Tanjung

Introduction

High employee performance is a valuable asset for any company. Employees with optimal performance are able to support the achievement of targets and objectives set by the organization. Good performance leads to satisfying work, and ultimately helps the company achieve its organizational goals. In today's competitive business environment, companies are constantly seeking ways to improve employee performance and stay ahead of the competition. One effort made by companies to improve employee performance is to provide compensation and create a conducive work environment.

The Importance of Compensation and Work Environment

Compensation and work environment are two critical factors that can significantly impact employee performance. Compensation refers to the payment or benefits received by employees in exchange for their work. A fair and competitive compensation system can motivate employees to work better and increase productivity. On the other hand, a good work environment is one that is comfortable, safe, and supportive. It can improve employee morale and motivation, leading to better performance.

Research Methodology

This study uses a descriptive quantitative approach with data analysis using multiple linear regression. This analysis aims to predict changes in the value of the dependent variable due to the influence of independent variables. The data collected from PT Indonesia Asahan Aluminum Kuala Tanjung was analyzed using the multiple linear regression equation.

Results and Discussion

The regression equation obtained is y = 10.243 + 0.153x1 + 0.492x2. Where X1 is compensation, X2 is the work environment, and Y is the performance of employees at PT Indonesia Asahan Aluminum Kuala Tanjung. This equation shows that:

Increased compensation (X1) of one unit will improve employee performance (Y) by 0.153 units. This shows that fair and competitive compensation can motivate employees to work better and increase productivity.
The increase in the work environment (X2) of one unit will improve employee performance (Y) by 0.492 units. This shows that the work environment that is comfortable, safe, and supportive can improve employee morals and morale, so that it has a positive impact on performance.

Conclusion

The results of this study confirm the importance of compensation and good work environment in improving employee performance. Companies need to pay attention to these two factors seriously as an effort to achieve more optimal organizational goals. By paying attention to these factors, PT Indonesia Asahan Aluminum Kuala Tanjung can continue to improve employee performance and achieve better business goals in the future.

Recommendations for Companies

Some important things to consider for companies are:

Fair and competitive compensation systems: Companies need to develop a fair and competitive compensation system by paying attention to the level of education, experience, and employee performance.
Improving the quality of the work environment:* The company needs to pay attention to aspects of occupational safety and health, create a positive and supportive work atmosphere, and provide adequate facilities to improve employee comfort and productivity.
Building open and effective communication:** Good communication between management and employees is very important to understand the needs and aspirations of employees, so as to create a harmonious and supportive work environment.

Limitations of the Study

This study has some limitations. The data collected was from a single company, and the sample size was limited. Future studies can be conducted to generalize the findings to other companies and industries.

Future Research Directions

Future research can be conducted to explore the impact of other factors on employee performance, such as training and development programs, employee engagement, and job satisfaction. Additionally, studies can be conducted to examine the relationship between compensation and work environment with other organizational outcomes, such as employee turnover and organizational commitment.

References

[List of references cited in the study]

Appendix

[Appendix materials, such as tables, figures, and additional data]

Abstract

This study examines the effect of compensation and work environment on employee performance at PT Indonesia Asahan Aluminum Kuala Tanjung. The results show that compensation and work environment have a positive and significant effect on employee performance. The study provides recommendations for companies to improve employee performance by developing fair and competitive compensation systems, improving the quality of the work environment, and building open and effective communication.
Frequently Asked Questions (FAQs) about the Effect of Compensation and Work Environment on Employee Performance

Q: What is the main objective of this study?

A: The main objective of this study is to examine the effect of compensation and work environment on employee performance at PT Indonesia Asahan Aluminum Kuala Tanjung.

Q: What is the significance of this study?

A: This study is significant because it provides insights into the factors that affect employee performance, which is a critical aspect of organizational success. By understanding the impact of compensation and work environment on employee performance, companies can develop strategies to improve employee performance and achieve better business outcomes.

Q: What are the key findings of this study?

A: The key findings of this study are:

Compensation has a positive and significant effect on employee performance.
Work environment has a positive and significant effect on employee performance.
The regression equation obtained shows that increased compensation and work environment can improve employee performance.

Q: What are the implications of this study for companies?

A: The implications of this study for companies are:

Companies need to develop fair and competitive compensation systems to motivate employees to work better and increase productivity.
Companies need to improve the quality of the work environment to create a comfortable, safe, and supportive work atmosphere that can improve employee morale and motivation.
Companies need to build open and effective communication to understand the needs and aspirations of employees and create a harmonious and supportive work environment.

Q: What are the limitations of this study?

A: The limitations of this study are:

The data collected was from a single company, and the sample size was limited.
Future studies can be conducted to generalize the findings to other companies and industries.

Q: What are the future research directions?

A: Future research directions include:

Exploring the impact of other factors on employee performance, such as training and development programs, employee engagement, and job satisfaction.
Examining the relationship between compensation and work environment with other organizational outcomes, such as employee turnover and organizational commitment.

Q: What are the practical implications of this study for HR professionals?

A: The practical implications of this study for HR professionals are:

HR professionals need to develop and implement fair and competitive compensation systems that take into account the level of education, experience, and employee performance.
HR professionals need to improve the quality of the work environment by creating a positive and supportive work atmosphere that can improve employee morale and motivation.
HR professionals need to build open and effective communication with employees to understand their needs and aspirations and create a harmonious and supportive work environment.

Q: What are the implications of this study for organizational leaders?

A: The implications of this study for organizational leaders are:

Organizational leaders need to prioritize the development of fair and competitive compensation systems and improve the quality of the work environment to motivate employees to work better and increase productivity.
Organizational leaders need to build open and effective communication with employees to understand their needs and aspirations and create a harmonious and supportive work environment.
Organizational leaders need to recognize the importance of employee performance in achieving organizational success and develop strategies to improve employee performance.

Q: What are the implications of this study for employee development?

A: The implications of this study for employee development are:

Employee development programs need to focus on improving employee performance by providing training and development opportunities that enhance employee skills and knowledge.
Employee development programs need to focus on improving the quality of the work environment by creating a positive and supportive work atmosphere that can improve employee morale and motivation.
Employee development programs need to focus on building open and effective communication with employees to understand their needs and aspirations and create a harmonious and supportive work environment.