The Effect of Competence and Organizational Commitment on Work Productivity of Indonesian Manufacturing Industries

Abstract

The aim of this study is to see how competence and organizational commitment affect employee productivity. We used the inferential verification technique, which is a strategy employed by researchers to assess the validity of presented hypotheses by gathering actual data from the field of Indonesia's industries. A total of 300 personnel from Indonesia's cable and electrical industries were purposefully chosen as responders. We used Structural Equation Modelling (SEM) analysis, aided by the LISREL 8.80 software, to test the hypotheses. The study's findings are as follows: (1) there is a positive and significant influence of competence (β = 0.30) on the work productivity of employees; (2) there is a positive and insignificant influence of organizational commitment (β = 0.09) on the work productivity of employees; and (3) there is a positive and significant influence of organizational commitment (β = 0.50) on the work productivity of employees Indonesia's industries, (4) Organizational commitment has a mediating function in the effect of competence (t = 4.15) on job productivity of employees in Indonesia's industries. A limitation of this study is that the survey only focused on Indonesia's cable and electricity industry plants and the tactical level management of an organization. The study's findings contribute to boosting organizational commitment and job competence that can boost employee productivity in Indonesia's industries. Due to its relatively rapid economic development, Indonesia is extremely appealing to international investors, particularly in the industrial sector. However, Indonesia must boost its manufacturing sector in order to attract more foreign investors. Also, this study is an empirical investigation, and its results can be generalized to similar industrial establishments.