Examining The Relationship Of Compensation, Trust, Organizational Learning, Commitment And Performance: An Empirical Study Of Food And Beverage SMEs

Abstract

Small and Medium Enterprises (SMEs) play a critical role in the national economic growth, particularly food and beverage SMEs that contribute significantly to the national economic growth and can absorb a substantial number of workers. The success of an SMEs is dependent on the quality of its human resources. Thus, SMEs must strive to improve the quality of their human resources to improve their performance. This study aims to analyze the relationship between compensation, trust, organizational learning, commitment, and performance in food and beverage SMEs. The sample used in this study consists of 160 SMEs with a minimum of 10 employees. The method used to test the mediation is multivariate analysis, specifically the structural equation model (SEM), followed by the Sobel test. The results suggest that commitment can mediate the relationship between trust and organizational learning on SME performance. However, our commitment does not involve mediating compensation relationships with regards to the performance of SMEs, as these entities do not effectively provide compensation to their employees. Consequently, employees are not committed to the company, despite high levels of trust between them and the organization. These findings have practical implications to improve SME performance and aid in developing Human Resource Management (HRM) theories for food and beverage SME practitioners.