The Mediating Role of Motivation and Job Satisfaction in the Relationship between Compensation and Organizational Commitment in Micro Finance Institutions

Abstract

This study aims to determine the effect of compensation, motivation, and job satisfaction on organizational commitment in Islamic microfinance services. This research has four variables: compensation as an independent variable, motivation, job satisfaction as intervening variables, and commitment as a dependent variable. The subjects in this study were active employees in one of the Islamic microfinance services. It is Baitul mal wa tamwil (BMT). This research uses quantitative methods. Data collection was carried out by distributing questionnaires using a 5-point Likert scale with 240 total valid responses. The data were analyzed using Structural equation modeling (SEM) using AMOS version 24. The results showed that compensation had a positive and significant effect on motivation, compensation had a positive and significant effect on job satisfaction, motivation had a positive and significant effect on organizational commitment, compensation had a positive and significant effect on organizational commitment, job satisfaction had a positive and significant effect on organizational commitment, compensation had a positive and significant effect on organizational commitment through motivation and job satisfaction as intervening variables. This study finds providing several important implications for research and implementing microfinance services.