Beruflich Dokumente
Kultur Dokumente
STRUCTURAL EQUATION MODELING : DETERMINANTS OF
ORGANIZATIONAL COMMITMENTS AND ITS IMPLICATION ON
EMPLOYEE WORK PRODUCTIVITY OF MANAGERIAL LEVEL
ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
Abstract: The aim of this study is to analyze the effect of organizational culture,
employee compensation, and work competence on organizational commitment and
its implication to employee work productivity of managerial level in some
manufacturing companies at production division in Special Capital Region of
Jakarta, whether partially or simultaneousness.
This study use descriptive and verification methods at the research object to
managerial level employees in manufacturing companies production division in
Jakarta Provinces, with population 1,183 employees, samples 300 respondents,
and to test the validity and reliability use 30 respondents. The types of data used
is qualitative data which is measured quantitatively with analytical techniques
using SPSS, and SEM.
Proven that research result showed as follows; 1). Structural Equations.-1; Explain
that organizational culture, employee compensation and work competence have a
positive effect and significant on organizational commitment, whether partially or
simultaneousness, with contribution R² : 51%. And partially the most dominant
variable is work competence which is influence on organizational commitment. 2).
Structural Equations -2; Explain that organizational culture, employee
compensation, work competence, and organizational commitment have a positive
effect and significant on work productivity, whether partially or simultaneousness,
with contribution R² : 82%. And partially the most dominant variable is
organizational culture which is influence on work productivity of employee. 3).
Other finding of this research that organizational commitment only mediates work
competence in order to influence employee work productivity (partial mediating).
This study recommend to Top Management, that to built strong organizational
commitment, its necessary to pay attention on work competence as dominant
variable, especially on dimension of behavior competence, and to increase work
productivity attention is needed to organizational culture as a dominant variable,
especially on dimension of outcome orientation.
Introduction
Indonesia face productivity challenges, in order to be able to compete with other
countries incorporated in the ASEAN Economic Community (MEA) that have
been starting by the end of 2015.
According to Haryani Estiarty (2014: 3) Director of Productivity and
Entrepreneurship of the Ministry of Manpower and Transmigration of RI, said that
there are four strategies to improve labor productivity, consist of :
Key words : Organizational Culture, Employee Compensation, Work Competence, Organizational
Commitment, Employee Work Productivity.
62 ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
a) Structuring management bureaucracy, to improve business climate.
b) Technological innovation, improving the productivity of capital by keep
following the newest technological developments and efficient.
c) Increasing the quality of human resources, in order to increase human
resource productivity, by improving the quality of institutions, which are
implement tools, techniques, approaches, and methodologies, increasing
productivity, and improving the quality of instructors, practitioners and
productivity consultants.
d) Development of productive culture, among others, work discipline, teamwork,
performance improvement, improvement of competence, and others.
Every manufacturing company in DKI Jakarta has problems in employee
productivity, there is decrease, some can not reach the target, and there is a
fluctuation in the achievement of employee productivity. From the empirical data
obtained during the research, can be identified problems and phenomena about
work productivity, such as;
There is an indication of the decline in managerial productivity of employees in
manufacturing companies, which are caused by an unfavorable organizational culture,
as can be seen from the weak teamwork phenomena.
There is an indication of low employee productivity, due to the low level of
managerial-level employee compensation in manufacturing companies, this can be
seen from the high turnover rates at the managerial level.
There is an indication of a decrease in managerial productivity of employee
level in company, caused by not managed yet good system of work competence,
this can be seen from work not reaching target, and quality of result not fulfill
standard.
There is an indi cati on of the low le ve l of managerial empl oyee
productivity in some manufacturing companies, caused by the lack of a strong
Organization Commitment, this can be seen from employee loyalty to company is
low.
There is an indication of the low level of employee productivity at managerial
level, caused by Employee Compensation system that has not run effectively, this
can be seen from not clearly yet difference between employee who achieve the
target or not, especially in the case of reward and punishment.
There is an indication of the weakness of organizational culture in manufacturing
companies, caused by the lack of understanding of Vision and Mission, unclear
goals and targets to be achieved.
Syverson (2011: 336) explained that there were several factors that directly
affect to productivity: Managers or talented leaders, qualified employees, Information
technology and research development, Learning by doing, Innovation, Decision-
making. Kumar (2016: 4) explained that there were factors that could increase
productivity, such as; proactive employees, accountability, follow-up, motivation,
rewards and recognition, cooperation, training and improvement options, positive
attitude, and involvement of management, etc.
STRUCTURAL EQUATION MODELING 63
Theoretical Review
A. Employee Work Productivity
Employee work productivity has a big role in determining the success of a company.
Philosophically productivity is a mental attitude that has the opinion that today is
better than yesterday, and tomorrow is better than today.
Wibowo (2014: 95) stated that work productivity was the ratio of output to
input; meant a measure of manager efficiency in using limited organizational resources
to produce goods and services. While Heizer in Suwendra (2016: 4) explained that
productivity was an increasing ratio between the amount of resources used (input)
and the amount of goods and services produced, if productivity rises this was only
possible by the increased of efficiency (time, material, and energy), work system,
production technique, and skill enhancement from its workforce.
Spring Singapore (2011: 6) explained that employee productivity was the added
value of every employee, which was generally measurable, its shown at the
effectiveness and efficiency of employees in production or sales activities.
White more in Sedarmayanti (2009: 59) said that productivity has 2 (two)
dimensions, namely Effectiveness and Efficiency.
Dimensions of effectiveness, related to the achievement of maximum
performance, in the sense of achieving targets, related to quality, quantity and
time.
While Dimension efficiency; related to comparing inputs with the realization
of their use or how the work is carried out.
Meanwhile, according Siagian (2009: 10) the determining of Successful and
efforts factors to increase productivity are as follows:
a. Continuous improvement; such as; the improvement and change of
organizational strategy, products, technology, and changes in HR practices
b. Improved quality of work results, such as; related to product quality
improvement, strategy formulation, policy determination, and decision
making process.
c. Empowerment of human resources, such as; respecting the dignity of human
beings, respecting the rights of employees, the application of participative
management, enriching the quality of work, which includes sympathetic
supervisors, challenging work, effective rewards systems, pleasant workplace
physical conditions, and feedback systems.
d. Organizational philosophy; among other things related to Total Quality
Management, such as focus on customer satisfaction, fertilizing loyalty,
attention to organizational culture, and the importance of formal provisions
and procedures.
Based on theoretical studies as mentioned above, that Employee work
Productivity meant a continuous improvement with an effective and efficient.
The synthesis of dimensions and indicators that will be used in this study were
as follows:
64 ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
1. Continuous improvement, with indicators: Challenge, Diligence, Training.
2. Effectiveness, with indicators: Quality, Speed, Work load.
3. Efficient, with indicators: Results of Work, Equipment and technology,
Cost.
B. Organizational Commitment
Organizations such as corporations basically consist of employees or individuals
who join a group that has a shared perception of common unity, achieving common
goals and interdependence / interdependence with each other within the organization.
In reality many corporate organizations in its development experience problems
caused by a small group of employees feel unsatisfied and the contra with the
company; this may be due to differences in expectations, interests, interdependence
and perceptions, then resulting in conflicts within the company. These are all forms
of employee dissatisfaction with the company, and low organizational commitment
from employees.
According to Triatna (2015: 120) commitment in the organization as a level of
loyalty of members / employees / employees to the organization / company which
characterized by his desire to stay as a part of the organization, do the best for the
organization, and always maintain the good name of the organization.
Sari and Witjaksono (2013: 831) explained that the organizations commitment
was the desire of employees to stay and work and devote themselves to the company.
Mintarti (2014: 66) explained that organizational commitment was a sense of
identity (trust in the value of a company), involvement (willingness to do best in
the organization), loyalty (desire to remain part of company), shown by employees.
Schermerhorn, Hunt, Osborn and Uhl-Bien, in Wibowo (2014: 429) explained
that there were two types of organizational commitment:
a. Rational Commitment, reflects the feeling that the job fulfills its financial,
developmental, and professional interests.
b. Emotional Commitment, reflecting the feeling that what is done is important,
valuable and beneficial to others.
While Kreitner and Kinicki in Wibowo (2015: 431) there were three factors
that influence elements or components of organizational commitment, and the
consequences were:
a. Affective commitment, caused by; personal character, work experience,
personal fitness suitability or value.
b. Continuance commitment, caused by; investment / sacrifice, and lack of
alternatives.
c. Normative commitment, caused by; socialization, and psychological
contracts.
d. As a consequence of the strong pressure on organizational commitment, it
will be affected to employee resignation, and work behavior.
While Mowday, in Zurnali (2010: 3) provided a view of the dimensions of
organizational commitment, consisting of:
STRUCTURAL EQUATION MODELING 65
a. The desired to maintain membership in the organization.
b. Confidence and acceptance of the values and goals of the organization.
c. Willingness to work hard as part of the organization.
Based on theoretical studies as mentioned above that Organizational
Commitment meant affective commitment, continuous commitment and normative
commitment.
The synthesis of dimensions and indicators that will be used in this study were
as follows:
1. Affective commitment, with indicators: Comfort, Proud, Conformity.
2. Continuous commitment, with indicators: Desire continued to work, Not
many choices, Forced.
3. Normative commitment, with indicators: Gratefulness, Career, Attention.
C. Organizational Culture
Organizational culture was very important in the company, this will be the
characteristics of special features that distinguish one company to another.
Sutrisno (2013: 2) defined the organizational culture as a system of values,
beliefs, assumptions, or norms that have long been applied, agreed and followed by
members of an organization as a code of conduct and solving its organizational
problems.
Tanuwibowo (2014: 137) explained that organizational culture was one tool
that can unify the relationship between employees with the organization, because
with the existence of organizational culture, employees feel themselves as a part of
the organization.
While Raykundaliya (2011: 492) explained that organizational culture helps in
building a strong value system and work ethics among employees, which directly
affects the productivity of the company.
Organizational culture is influenced by internal and external organizational
elements.
Uha (2013: 26) explains that organizational culture was influenced by internal
and external cultures.
Internal cultural elements included:
a. Organizational environment; such as hard work, products, competitors,
customers, technology, government.
b. Value system; value systems can be understood when associated with
attitudes and behavior, values focus on a belief to achieve success. Examples
of systems adopted in the organization include; honesty, loyalty, fairness,
and maximum effort.
c. Heroism; strong culture can occur in organizations that have many people
who can be a role model for all existing human resources.
d. Ceremony (Ritual); organizational culture is influenced by rituals that
dramatize the value of the companys basic cultural values, and this ritual
becomes the medium of expression of the value of cultural values. These
66 ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
activities include, yearly award, company anniversary, zero accident awards,
weekly and monthly meetings, etc.
e. Cultural Network; The effectiveness of this communication network is just
a way of getting information about what is going on inside the company.
External / external cultural elements, was reengineering (Design Requisite
Organization) approach in order to win the competition. There were three elements
in reengineering, consist of; Structure, Human resources, and Working System.
According to Robbins in Hanggraeni (2011: 149) there were 7 (seven) main
characteristics of organizational culture, consist of :
a. Innovation and risk taking; the extent to which employees are encouraged
to innovate and brave to take risks.
b. Attention to detail; the extent to which employees are expected to show a
position of precision, analysis, and attention to details.
c. Outcome orientation; the extent to which management focuses on results,
not on the technicalities and processes in achieving that outcome.
d. People orientation; the extent to which management decisions take into
account the effect of outcomes on insiders.
e. Team orientation; the extent to which work activities are organized on
teams rather than individually.
f. Aggressiveness; the extent to which people are aggressive and competitive,
not lazy and relaxed.
g. Stability; the extent to which the organizational desires emphasize the
application of the status quo as a contrast to growth.
Based on theoretical studies as mentioned above, that Organizational Culture
meant innovation
and brave to take risks, attention to detail, outcome orientation, people
orientation, team orientation, aggressive and stability.
The synthesis of dimensions and indicators that will be used in this study were
as follows:
1. Innovation and dare to take risks, with indicators: Ideas, Creativity, Action
/ action.
2. Attention to detail, with indicators: Careful, Analyze, Precision.
3. Results-oriented, with indicators: Vision and Mission, Goals, Measures of
success.
4. Oriented to human beings, with indicators: Communication, Support, Reward.
5. Team-oriented, with indicators: Coordination, Cooperation, Mutual trust.
6. Aggressiveness, with indicators: Initiative, Fast, Responsibility.
7. Stability, with indicators: Calm, Open, Togetherness.
D. Employee Compensation
In Indonesian society in general, compensation is very important, because it will
determine the standard of living, lifestyle and social status in the family and
STRUCTURAL EQUATION MODELING 67
community. Everyone expects that the compensation he receives is high and sufficient
for his life, therefore employees will strive to work hard, high performers in companies
that provide great and good compensation.
According to Rivai in Kadarisman (2014: 12) said that compensation is
something that employees receive as exchange of their service contribution to the
company / organization.
Hartono (2015: 65) explains that compensation is essentially everything that a
person will receive in return for the work he has done, and the salary, incentives,
bonuses and commissions are examples of direct compensation, while indirect
compensation consists of various benefits, medical allowances, work environment,
and BPJS social insurances of employment.
Sudiarditha (2013: 323) divides the compensation into two, namely financial
compensation and non-financial compensation.
Financial compensation consists of direct and indirect financial, while non-
financial compensation is the satisfaction that the employee derives from;
the work itself, the physical / psychological environment in which the employee
works.
According to Kadarisman (2014: 98) the purpose of compensation is as follows:
a. Fulfillment of economic needs.
b. Increase work productivity.
c. Developing company.
d. Creating balance and expertise.
The experts provide varieties classification of compensation, but basically
according to Wibowo (2014: 298) the compensation classification consists of; wages
and salaries, incentives, rewards and benefits.
While Hasibuan (2007: 127) states that the factors that affect the amount of
compensation are as follows:
a. Supply and demand of labor.
b. Companys ability and willingness.
c. Labor Union organization.
d. Employee work productivity.
e. Government with its Law and its Presidential Decree.
f. Cost of living (KHL)
g. Employee position level.
h. Education and employee experience.
i. National economy condition.
j. The type of jobs.
Based on theoretical studies as mentioned above, that Employee Compensation
meant direct payments, indirect payments, and non-material payments.
The synthesis of dimensions and indicators that will be used in this study were
as follows:
68 ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
1. Direct payments, with indicators: Salaries and bonuses, Internal equality,
External equality.
2. Indirect payments, with indicators: Health insurance, Old age compensation
and pension, Meal and transportation facilities.
3. Non-material payment, with indicators: Award, Promotion, Safety.
E. Competence of work
Judging from the vision and mission of the company each company has its own
strategy in facing business challenges to improve productivity and performance, so
that the competencies required for a similar field of expertise will be different in
each company.
Bachrun (2011: 18) stated that competence is defined as basic characteristics
such as knowledge, skills / know-how, and attitudes that must be possessed by
employee and team to complete the job task in order to obtain the best results.
Rabiei (2012: 812) explains that competence is knowledge, skill, and ability
related to characteristic and high performance at work.
Then, Bachrun (2011: 18) classified competencies into 3 (three) categories,
consist of :
a. Universal competence; is a competence that must be owned by all employees
of the company. This competence becomes the form of the culture and
values which is adopted by the company.
b. Leadership competence; is a competence that must be mastered by the
staff who hold the position with the subordinates. Those positions such as
Staff, Supervisor, Superintendent, Manager, Director. This is also called
Soft-skill.
c. Technical competence; is a competence that must be mastered by those
who holder as specialized/expertise. For example human resources, finance,
marketing, logistics, purchasing, technical, engineering, safety and
environment. This is usually called Hard-skill.
Palan (2007: 20) classified the competence into four, consist of :
a. Core competence; core competence is something belong to company as a
set of expertise and technology, which collectively gives a company a
competitive advantage, core competencies, include among others, value for
customers, differences with competitors, and expendability.
b. Functional Competencies; Functional competencies are competencies that
describe work activities and outcomes, such as the knowledge, and skills
required to perform a job. This competence is related to position level.
c. Behavioral competence; Behavioral competence is the basic characteristic
needed to perform a job. This competence is at the individual level.
d. Role competence; competence of roles related to position level, and refers
to the role that a person must play in a team. Role competence is often
seen in areas, among others, managing people, managing resources, managing
information, managing activities.
STRUCTURAL EQUATION MODELING 69
Marsall in Sudiarditha (2013: 325) explains that competence is built by 6
elements, which include:
a. Skills, something that makes employees can do a better job.
b. Knowledge, recognize and understand the job specifically.
c. The social role, the figure shown in the community.
d. Personal image, a view of values related to personal characteristics.
e. Talent characteristic, characteristics that have long been owned by
employees.
f. Motives, subconscious thoughts and preferences that drive individual behavior.
Based on theoretical studies as mentioned above, that Work Competence meant
core competencies, functional competence, behavioral competence, and role
competence.
The synthesis of dimensions and indicators that will be used in this study were
as follows:
1. Core competence, with indicators: Self-development, Values, Differences
with competitors.
2. Functional Competencies, with indicators: Duties and obligations, Target,
Achievement.
3. Behavioral competence, with indicators: Attitude, Motivation, Emotion.
4. Competence role, with indicators: Authority, Support supervisor,
Responsibility.
Figure 1: Conceptual Framework
Hypothesis
1. There will be positive and significant effects of Organizational Culture on
Organizational Commitment in manufacturing company production division
in DKI Jakarta.
70 ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
2. There will be positive and significant effects of Employee Compensation on
Organizational Commitment in manufacturing company production division
in DKI Jakarta.
3. There will be positive and significant effects of Work Competence on
Organizational Commitment in manufacturing company production division
in DKI Jakarta.
4. There will be simultaneous positive and significant effect of Organizational
Culture, Employee Compensation and Work Competence on Organizational
Commitment in manufacturing company production division in DKI Jakarta.
5. There will be positive and significant effects of Organizational Culture on
Employee Work Productivity in manufacturing company production division
in DKI Jakarta.
6. There will be positive and significant effects of Employee Compensation on
Employee Work Productivity in manufacturing company production division
in DKI Jakarta.
7. There will be positive and significant effects of Work Competence on Employee
Work Productivity in manufacturing company production division in DKI
Jakarta.
8. There will be positive and significant effects of Organizational Commitment on
Employee Work Productivity in manufacturing company production division
in DKI Jakarta.
9. There will be simultaneous positive and significant effect of Organizational
Culture, Employee Compensation, Work Competence, and Organizational
Commitment on Organizational Commitment in manufacturing company
production division in DKI Jakarta.
Research Methodology
This research used descriptive and verification method to the managerial level
employee as object of research in manufacturing company production division in
DKI Jakarta, with population number 1,183 employees, sample was taken proportion
as with total research sample 300 participants, and separately took 30 samples for
test validity and reliability. The primary data collection was through questionnaire
research instrument that obtains from respondent.
The type of data used is qualitative data which is measured quantitatively
with analytical techniques using SPSS version.22.dan SEM with Lisrel 8.70 program.
Research Result and Discussion
Hypothesis testing of Structural Equation -1 :
Analysis of the first hypothesis testing using SEM method with Lisrel program
is done to test the effects of organizational culture, employee compensation and
work competence partially or simultaneously to organizational commitment. This
test is performed to test hypotheses 1, 2, 3, and 4, the results of data analysis for
the structure equation -1, are:
STRUCTURAL EQUATION MODELING 71
KO = 0.65 * BO + 0.52 * KM + 0.73 * KT Error-var. = 0.49, R2 = 0.51
Based on analysis data of organizational culture, employee compensation and
work competence on organizational commitment is presented in Figure 5.18 below:
Figure 2: Line Diagram of Structural Equation Model -1
Hypothesis Testing Structural Equation -2, Result analysis of second hypothesis
testing using SEM method with Lisrel program is done to test the effect of
organizational culture, employee compensation, work competence and organizational
commitment partially or simultaneously to work productivity. This test is performed
to test hypotheses 5,6,7,8 and 9, result of data analysis for equation of structure-2,
are:
PK = 0.76 * BO + 0.68 * KM + 0.54 * KT + 0.72 * KO, Error-var. = 0.18,
R2 = 0.82
Based on the results of data analysis of the influence of organizational
culture, employee compensation and work competence and organizational
commitment partially and simultaneously to productivity is presented in Figure
5.19 below:
Conclusion, Managerial Implication and Suggestions
Conclusion
1. It is proven that organizational culture has a positive and significant effect on
organizational commitment was 0.65 and t-value (7.87) is bigger than t-table
(1.96). The most dominant dimension in constructing organizational culture
constructs is results-oriented (X3 = 0.78).
72 ASEP SUTARMAN, ANOESYIRWAN MOEINS AND RAHMAD EVAN PURNAWAN
Figure 3: Line Diagram of Structural Equation Model -2
2. Proven that the compensation of employees has a positive and significant effect
on organizational commitment was 0.52 and t-value (8.98) is bigger than t-
table (1.96). The most dominant dimension in building employee compensation
constructs is non-material payments (X10 = 0.73).
3. Proven that the competence of work has a positive and significant effect on
organizational commitment was 0.73, and t-value (7.56) is bigger than the t-
table (1.96). The most dominant dimension in constructing work competence
constructs is behavioral competence (X13 = 0.77).
4. It is proven that organizational culture, employee compensation and work
competence simultaneously have a positive and significant effect on
organizational commitment, with R2 contribution of 0,51 or equal to 51%, and
f-value (8.32) bigger than f-table (2.40) This indicates that organizational culture,
employee compensation and work competence play a role in supporting
organizational commitment at managerial level employees in manufacturing
companies production division in Jakarta.
5. It is proven that organizational culture has a positive and significant effect on
employee work productivity was 0.76 and t-value (8.59) bigger than t-table
(1.96). The most dominant dimension in constructing organizational culture
constructs is results-oriented (X3 = 0.78).
6. It is proven that employee compensation has a positive and significant effect
on employee work productivity was 0.68 and t-value (8.65) bigger than t-table
(1.96). The most dominant dimension in building employee compensation
constructs is non-material payments (X10 = 0.73).
STRUCTURAL EQUATION MODELING 73
7. It is proven that work competence has a positive and significant effect on
employee work productivity was 0,54, and t-value (9,97) is bigger than t-table
(196). The most dominant dimension in constructing work competence constructs
is behavioral competence (X13 = 0.77).
8. It is proven that organizational commitment has a positive and significant
effect on employee work productivity was 0.72, and t-value (7.78) is bigger
than t-table (1.96). The most dominant dimension in constructing organizational
commitment is affective commitment (Y1 = 0.80).
9. It is proven that organizational culture, employee compensation, work
competence and organizational commitment simultaneously have a positive
and significant effect on employee work productivity, with R2 contribution
equal to 0.82 or 82%, and f-value (7,97) bigger than f-table (2, 98).
10. This shown that organizational culture, employee compensation, work
competence, and organizational commitment play a role in supporting work
productivity of managerial level employees in some manufacturing companies
production division in Jakarta.
Managerial Implications
From the results of this study, the Top Management like CEO in manufacturing
companies in DKI Jakarta, can take policies as follows:
1. To build a strong organizational commitment, attention is needed to the
work competence as a dominant variable, especially in the dimensions of
behavioral competence. To improve the behavioral competence CEO should
conduct training on attitude, motivation and emotion, for managerial level
employees.
2. To increase work productivity, attention needs to be paid to organizational
culture as the dominant variable, especially in the outcome-oriented
dimension. To build outcome-oriented as a organizational culture must
clearly define the companys vision and mission, the companys objectives
to be achieved, and measures of success, such as targets and incentives.
Suggestions
Based on the results of the research which has been concluded above and in an
effort to improve employee work productivity of managerial level manufacturing
company production division in DKI Jakarta, there are some suggestions as follows:
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ANOESYIRWAN MOEINS : PROFESSOR OF UPI-YAI DOCTORAL
MANAGEMENT SCIENCE PROGRAM. JAKARTA INDONESIA
RAHMAD EVAN PURNAWAN : DOCTORAL STUDENT OF UPI-YAI
MANAGEMENT SCIENCE PROGRAM. JAKARTA INDONESIA