What type of study is this?

This is a Quantitative Approach study (also classified as: Structural Equation Modeling, Partial Least Squares).

September 10, 2025

The Effect of Compensation and Work Environment on Employee Performance at the Factory of PT XYZ

PHPutri HandayaniUniversitas Dharmas Indonesia RPRatna Komala PutriTelkom University

Key Points

Work environment significantly influences employee performance, with improvement needed in workplace conditions.
Compensation was rated good at 75%, while employee performance was rated good at 80% but showed insignificant effect.
Data collection involved 92 employees using saturated sampling across six divisions of PT XYZ.
Findings suggest that enhancing physical and social work conditions can lead to better employee outcomes.

Abstract

This study investigates the effects of compensation and work environment on employee performance at PT XYZ, a palm oil manufacturing company. Using a quantitative approach with a saturated sampling technique, data were collected from 92 employees across six divisions. The analysis was conducted using Structural Equation Modeling with Partial Least Squares (PLS). Results showed that compensation and work environment were rated as good (75%), while employee performance was also rated good (80%). However, compensation had a positive but insignificant effect, while work environment significantly influenced performance. These findings suggest that improving physical and social work conditions can enhance employee outcomes. The study offers insights for management to improve compensation systems and workplace quality to optimize performance.

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