Employee competencies and compensation strategies as company's strategic effort to escalate employee performance

Abstract

The purpose of this study is to reveal employee competencies and compensation received by employees, as well as their implications for employee performance. This study was analyzed descriptively and verificatively through a survey method of 329 marketing managers in retail companies in Indonesia. The technique of data collection is done by indirect communication, through instruments in the form of questionnaires. Data were analyzed by weighted means score (WMS) and Structural Equation Modeling (SEM). The results showed that employee competency was good, but not optimal, indicated by the indicator of the employee's need for the company and the employee's priority scale in the work was still weak. Furthermore, the compensation strategy is relatively good, indicated by indicators of salary/wages, incentives and cooperative facilities that are still weak. On the other hand, competencies and compensation strategies partially and simultaneously have positive and significant impact for employee performance which requires serious handling.