Determinants factors toward the performance of the employee in the crude palm oil industry in West Sumatera, Indonesia

Abstract

Human resources are the most important part in achieving organisational goals and improving organisational performance, in completing its work human resources require an adequate working environment and compensation as a reward for providing maximum work results. The purpose of this study is to examine and analyse the effect of compensation (X1) and work environment (X2) on employee performance (Y), especially in the crude palm oil industry in West Sumatra. Observations were made on three companies, research conducted in March to June 2019 showed that between compensation and work environment has a positive and significant effect on employee performance. With the structural equation modelling approach and Lisrel 8.8 application assistance, the coefficient of estimated of compensation toward performance is 0.37 while the estimated coefficient of work environment toward performance is 0.42. Compensation and work environment simultaneously have a positive influence on employee performance of 0.65.