THE EFFECT OF DIRECT AND INDIRECT COMPENSATION TO EMPLOYEE’S LOYALTY: CASE STUDY AT DIRECTORATE OF HUMAN RESOURCES IN PT POS INDONESIA

Abstract

As a company's main resource, the employee's welfare need to be assured, such as through compensation. A proper compensation will make the employee loyal to the company and increase their contribution and productivity. The phenomenon that occurs is the high turnover rate of state-owned company or government-owned company caused by the low level of compensation. This research was conducted in Directorate of Human Resources PT. Pos Indonesia (Persero), Jalan Cilaki No. 73 Bandung to assess the influence of the direct and indirect compensation to the employee's loyalty. PT. Pos Indonesia (Persero) is a state-owned company engaged in couriers, logistics, and financial transactions in Indonesia. The multiple linear regression analysis indicates that the direct compensation has 38.8% significant and positive relation to the employee's loyalty, while indirect compensation has 48.2% significant and positive relation to the employee's loyalty.