An Examination of How the Job Satisfaction Affects the Linkage Between Compensation System and Lecturer Performance - A Case Study at a State University in Bali.
An Examination of How the Job Satisfaction Affects the Linkage
between Compensation System and Lecturer Performance:
A Case Study at a State University in Bali
Agoes Ganesha Rahyuda
Department of Management, Faculty of Economics
Udayana University, Denpasar, INDONESIA
Email: gana_brave@yahoo.com
ABSTRACT
A higher education institution needs to improve the performance of its lecturers, in order
to be able to improve its performance as a whole and also to increase the satisfaction of
its students. The lecturers’ performance could be enhanced by improving their job
satisfaction and by developing a good compensation system. The conceptual model in this
research is developed based on three previous pieces of research: (a) the work of Comm
& Mathaisel (2003) and Chen et al. (2006), regarding the correlation of compensation
system with job satisfaction, (b) the research conducted by Comm & Mathaisel (2003)
and Carmeli & Freund (2004) on the influence of job satisfaction to job performance,
and (c) the work of Jennings & McLauglin (1997) about the influence of compensation
system to job performance.
This research aims at testing a model about the influence of compensation system on the
job satisfaction and the performance of university lecturers. The model is tested in a state
university in Bali, Indonesia. Empirical data used in this research is collected through
150 set of questionnaires in the case university. Structural Equation Modeling (SEM)
approach is used in the statistical data processing, using LISREL 8.8 application
software. Results show that compensation system has a significant positive influence on
the job satisfaction of the university lecturers, either directly or indirectly through job
satisfaction.
Keywords: compensation system, job satisfaction, lecturer performance, state university
1. INTRODUCTION
Higher education organization is an organization that have important role to enhancing the
academic quality of human resources, especially in Indonesia. This core principal make the higher
education organization, especially a state-university, has unique characteristics and make its
different from another public organizations. A state university in Indonesia has three pillars in
order to reach its objectives which consist of lecturers, administration officers, and students.
Therefore to be able to play the role well, every member of the organization must participate
optimally. For this study we emphasized our concern on lecturers, especially in the performance
of lecturer because lecturers are the prime factor in increasing quality of human resources and
also the leader of a higher education system (Krishnaveni & Anitha, 2007).
By concerning the important role of lecturers in increasing the quality of a higher education
system, lecturers and their performance must be given a thorough attention (Carmeli & Freund,
2004). Besides, good performance of the lecturers is an important component in increasing the
lecturers’ academic quality, the organization’s performance as a whole, and the customers’
(students) satisfaction. The primary tasks of lecturer are in three areas, namely, teaching, research,
and devotion to public. Together this task constitutes the work of academics, although some
people would argue that the devotion to public is of lesser importance to academics compared
with the other two tasks (Oshagbemi, 2000).
There are many factors that could give effect to lecturer performance, but one important factor
which could influence the lecturers’ performance is job satisfaction (Carmeli & Freund, 2004). At
higher education sector, Chen et al. (2006) noted that the job satisfaction of the lecturers is an
important factor that must be considered by the organization, because it could influence the
quality of the lecturers’ performance in teaching, in conducting researches and also in public
devotion activities. Based on that, job satisfaction of the lecturers is considered to be an important
factor which could influence the lecturers’ performance. It plays a role not merely in enhancing
the spirit and enthusiasm in their work activities, but also in helping the organization to operate
effectively and efficiently in reaching its goals.
To date, much of the research on academic quality in higher education focused just on
students, evaluating their satisfaction or dissatisfaction with various programs. Since employee
job satisfaction has been found to be as important as costumer (student) satisfaction (Oshagbemi,
2000), research on the quality of higher education has now also begun to look at the job
satisfaction of lecturers. Lecturer satisfaction can give an effect to lecturer performance, in which
could indirectly increase organizational performance and customer satisfaction. Lecturers are the
internal customer of the business and lecturer satisfaction with the environment could promote
teaching and research quality. Therefore, teacher requirements must be fulfilled to achieve
outstanding research and teaching performance (Chen et al. 2006).
Contemporary research in this area indicates that there are some factors capable to influence
job satisfaction and lecturers’ performance. But from the research done by Chen et al. (2006), it is
known that ideal compensation system is the important factor and will give satisfaction to the
lecturers in their working area and could motivate them to increase their performance; while an
inadequate compensation could harm job satisfaction and could cause decline in the productivity
and performance of the lecturers. Besides, in order to attract and retain an effective and
committed workforce, colleges and universities must offer competitive levels of compensation to
their faculty, and they have to recognize their achievements (Comm & Mathaisel, 2003). These
compensation commitments to the lecturer enhance performance, which in turn, is a key
component to improving academic quality.
Based on the description indicates a framework occurred. This framework showed that there
are several factors that could give an effect to lecturer performance. Although this framework
capture primary lecturer performance influences including compensation system and job
satisfaction, a unifying model of these established factors is absent. Thus for this study, all of
these factors will be merged in a unifying model and tested to the population. Besides, the
descriptions above indicate that a deeper research is required to find out the influence of
compensation system on lecturers’ performance, either directly or indirectly through job
satisfaction. So our purpose of this research is to know the influence of compensation system on
lecturer performance, either directly or indirectly through job satisfaction.
This research uses one State University in Bali as a case study to apply the conceptual model.
This University is selected because at the moment this university is a barometer of a quality
university for Middle Indonesia region.
2. RESEARCH MODEL
The research model explains the influence of exogenous variable on endogenous variable. In
this research, the exogenous variable is consisted of compensation system and the endogenous
variable is consisted of job satisfaction and the performance of lecturer. This research model is
shown in Figure 1 as follows.
Mentally Challenging
Work
Supportive Working
Condition
Job Satisfaction
Equitable Rewards
Intrinsic
Direct Extrinsic
Supportive
Colleagues
Compensation
System
Indirect
Extrinsic
Teaching
Performance
Research
Devotion to Public
Figure 1
Research Model
3. METHODOLOGY
3.1. Research Sample
The respondents of this research are permanent lecturers in the case university, with minimum
year of service of 4 years. It is due to the assumption that with such long years of service, they
will have sufficient understanding about the university. The number of research samples taken is
150 lecturers from 1433 population, measured based on Slovin formula (Sevilla, Ochave,
Punsalan, Regala & Uriarte, 1993). Proportionate stratified random sampling method was applied.
This is a method where population is classified based on a certain characteristic, and samples are
taken from the population proportionally and randomly (Sevilla et al., 1993).
The characteristic selected for this research is the lecturers’ work unit (the faculty or study
program) in the case university. The reason is that a faculty or a study program is the unit that
directly makes decision and policy.
3.2. Measurement Instrument
Measurement instrument used to measure compensation system is developed based on three
dimensions from Robbins (1996). The measurement instrument used to measure job satisfaction
of lecturers is a compilation of the four job satisfaction characteristics (Robbins, 1996). While the
measurement instrument used to measure lecturers’ performance is developed based on the
lecturers’ performance in executing the three higher education mission, named as “Tri Dharma”,
according to Utilization Decree of The State's Minister of Number State Apparatus
38/Kep/MKWASPAN/8/1999 date of 24 Augusts 1999 (Kepmen PAN no. 38 thoriums. 1999).
The scale type applied to measure perception of respondents in this research is a Likert form
scale.
The measurement instruments (questionnaire) were tested on 30 research samples, and
resulted in a reliability coefficient value (Cronbach's Alpha) of 0,910 for compensation system,
0,919 for job satisfaction, and 0,917 for lecturers’ performance. While the validity coefficient
value for every item posed at by total item correlation coefficient of 0,361. Based on the test
mentioned, it is concluded that the questionnaire is valid and reliable to be used as data collecting
instruments in this research.
3.3.
Data Processing Technique
Data processing in this research uses structural equation modeling method, with the help of
LISREL program. Early stage in data processing is making orthogonal transformation of data
from ordinal data to interval data, using the method of successive interval (MSI) technique. After
the data has been transformed into interval, then the interval data is processed using LISREL
program to calculate the level of influence between exogenous variables to endogenous variables.
In this research, the output from the LISREL program used to answer the research questions and
the research hypothesis are: line coefficient value, t-value and R2 value.
4. RESULTS
4.1. The Effect of Compensation System on Job Satisfaction
Result of data processing using the structural equation modeling method for compensation
system and the job satisfaction of lecturer is as follows:
• t-value of compensation system variable on lecturers’ job satisfaction is 3,78; which indicates
that the parameter value is significant.
• The partial influence of compensation system on lecturers’ job satisfaction is 0,69.
4.2. The Effect of Job Satisfaction on Lecturer Performance
Result of data processing using the structural equation modeling method for job satisfaction
and the lecturer performance is as follows:
• t-value of job satisfaction variable on lecturers’ performance is 4,21; which indicates that the
parameter value is significant.
• The partial influence of job satisfaction on lecturers’ performance is 0,44.
4.3. The Effect of Compensation System and Job Satisfaction on Lecturers’ Performance
Result of data processing using the structural equation modeling method for compensation
system, job satisfaction and lecturers’ performance is as follows:
• t-value of compensation system variable on lecturers’ performance is 2,85; which indicates that
the parameter value is significant.
• F value that of compensation system and job satisfaction variable on lecturers’ performance is
14,6; which indicates that the parameter value is significant.
• The value of coefficient of determination (R2) of compensation system and job satisfaction
variable on lecturers’ performance is 0,74; which indicates that 74% variance of lecturers’
performance is explained by compensation system and job satisfaction, while the rest (equal to
26%) might be explained by other variable.
• The directly partial influence of compensation system on lecturers’ performance is 0,31.
• The indirectly partial influence of compensation system on lecturers’ performance (through job
satisfaction) is 0,18.
• The simultaneous influence of compensation system and job satisfaction variable on lecturers’
performance is 0,38.
5. DISCUSSION
5.1. The Effect of Compensation System on Job satisfaction and Lecturers’ Performance
Research finding indicate that compensation system has positive and significant influence to
job satisfaction and lecturers’ performance. The level of contribution, either directly or indirectly,
has already been explained and it is shown that the level of job satisfaction and lecturers’
performance in the case university is also influenced by the compensation system. Therefore to
optimize the job satisfaction and lecturers’ performance, the policy makers in higher education
organization, especially in the case university, have to apply a compensation system concept as
explained by Robbins (1996).
This finding is in line with Dessler’s opinion (1997) which states that an ideal compensation
system could satisfy employees in doing their jobs, and an inadequate compensation system could
harm employees’ job satisfaction, which could result in the decline of their productivity and
performance. An inadequate compensation system could also lead to employees’ dissatisfaction
and cause them to leave the company and move to other companies which could give them higher
earnings. Moreover, Chen et al. (2006) also support the findings of this research. According to
Chen, from the six factors capable to influence job satisfaction of lecturers (organization vision,
respect, motivation, management system, compensation system and work environment), it is
found that the main factor which is very influential, is the compensation system. Chen et al.
(2006) stated that the ideal compensation system could give satisfaction to lecturers, so that they
are motivated to increase their performance. On the contrary, an inadequate compensation system
could harm job satisfaction and could decline the level of productivity and performance of the
lecturers.
From the result of this research it could be inferred that lecturers require a good compensation
system that could support them in executing their main duties. A good compensation system
could increase lecturers’ prosperity. Satisfied lecturers could improve their quality, not only in the
teaching activities but also in their productivity in executing researches and in their public
devotion activities. Robbins compensation system concept (1996) could be considered in
enhancing the lecturers’ job satisfaction and performance.
5.2. The Effect of Job Satisfaction on Lecturers’ Performance
Research finding indicates that the lecturers’ job satisfaction has a positive and significant
influence to the lecturers’ performance. The direct level of influence has already been explained
and it is also shown that the lecturers’ performance in the case university is also influenced by
their job satisfaction. Therefore to optimize the lecturers’ performance, the policy maker or leader
of a higher education organization, especially in the case university must look for appropriate
ways for the organization to increasing the lecturers’ job satisfaction.
This finding is in line with Chen et al.’s opinion (2006). According to Chen, job satisfaction
of lecturers is an important factor that must be considered by higher education organization,
because this factor could influence the quality of the lecturers’ performance in teaching, as well as
in executing researches and also in public devotion. Furthermore, Oshagbemi (2000) adds that
satisfaction of lecturers in doing their work could cause increase their commitment to the
university and could improve their productivity and performance in executing research and also in
their classroom teaching process. When lecturers feel satisfaction in their work, they will execute
and fulfill their duties with full effort, utilizing every ability that they own without minding the
time and energy that they have to spend.
Based on that, it is inferred that lecturers’ job satisfaction is an important factor which could
influence their performance. Job satisfaction is not merely an indication of the existence of spirit
and enthusiasm in executing their jobs, but job satisfaction could also influence the performance
and efficiency of the organization. From this research it could also be concluded that the lecturers
are looking forward to have a co-operative working condition and working environment which
could raise their satisfaction and enhance their performance.
5.3. The Simultaneous Effect of Compensation System and Job Satisfaction on Lecturers’
Performance
Simultaneously the solvent compensation system and job satisfaction could give significant
contribution on lecturer performance equal to 0,38. The rest (equals to 0,62) is the influence
coming from other factors like: organization culture, management system, work load and also
cooperation of team (teamwork). This indicates that improvement of the lecturers’ performance in
executing the higher education mission mostly depends on the adequate compensation system
concept that could enhance the job satisfaction of its lecturers.
Satisfied lecturers in doing their work, added with good relations between the lecturer could
give prosperity to the lecturers through good compensation system, which is believed to be able to
significantly increase the lecturers’ performance. This is not merely to the advantage of the
lecturer but also will give significant advantage to the organization’s performance, especially in
the case university.
6. CONCLUSION
Based on the discussion mentioned above, it could be inferred that:
• Compensation system has positive and significant influence on lecturers’ job satisfaction. This
indicates that lecturers in higher education organization, especially in the case university,
would experience improvement of their job satisfaction if the compensation system concept
from Robbins (1996) is applied.
• Compensation system has positive and significant influence directly as well as indirectly on the
lecturers’ performance. This indicates that the lecturers’ performance in higher education
organization, especially in the case university, would be improved if the compensation system
concept from Robbins (1996) is being applied by the policy maker.
• Job satisfaction has positive and significant influence on lecturers’ performance. This indicates
that job satisfaction plays an important role in higher education organization, especially in the
case university, as it could enhance the lecturers’ performance.
• Simultaneously the compensation system and job satisfaction have positive and significant
influence on the lecturers’ performance. This finding indicates that the lecturers’ performance
in higher education organization, especially in the university researched, would be improved if
they are satisfied, if the organization is applying appropriate compensation system.
REFERENCES
Carmeli, A. & Freund, A. (2004). Work commitment, job satisfaction, and job performance: an
empirical investigation. International Journal of Organization Theory and Behavior, 7 (3),
289-309.
Chen, S.H., Yang, C.C., Shiau, J.Y. & Wang, H.H. (2006). The development of an employee
satisfaction model for higher education. The TQM Magazine, 18 (5), 484-500.
Comm, C.L. & Mathaisel, D.F.X. (2003). A case study of the implications of faculty workload
and compensation for improving academic quality. The International Journal of
Educational Management, 17 (5), 200-210.
Dessler, G. (1997). Human Resource Management. McGraw-Hill, Inc. New York.
Jennings, K. & McLauglin, F. (1997). Measuring and correcting inversion in faculty salaries at
public universities. Public Personnel Management, 12 (1), 263-271.
Krishnaveni, R. & Anitha, J. (2007). Educators’ professional characteristics. Quality Assurance in
Education, 15 (2), 149-161.
Oshagbemi, T. (2000). How satisfied are academics with their primary tasks of teaching, research
and administration and management?. International Journal of Sustainability in Higher
Education, 1 (2), 124-136.
Robbins, S.P. (1996). Organizational Behaviour: Concept, Controversies, Applications. PrenticeHall, Inc. New Jersey.
between Compensation System and Lecturer Performance:
A Case Study at a State University in Bali
Agoes Ganesha Rahyuda
Department of Management, Faculty of Economics
Udayana University, Denpasar, INDONESIA
Email: gana_brave@yahoo.com
ABSTRACT
A higher education institution needs to improve the performance of its lecturers, in order
to be able to improve its performance as a whole and also to increase the satisfaction of
its students. The lecturers’ performance could be enhanced by improving their job
satisfaction and by developing a good compensation system. The conceptual model in this
research is developed based on three previous pieces of research: (a) the work of Comm
& Mathaisel (2003) and Chen et al. (2006), regarding the correlation of compensation
system with job satisfaction, (b) the research conducted by Comm & Mathaisel (2003)
and Carmeli & Freund (2004) on the influence of job satisfaction to job performance,
and (c) the work of Jennings & McLauglin (1997) about the influence of compensation
system to job performance.
This research aims at testing a model about the influence of compensation system on the
job satisfaction and the performance of university lecturers. The model is tested in a state
university in Bali, Indonesia. Empirical data used in this research is collected through
150 set of questionnaires in the case university. Structural Equation Modeling (SEM)
approach is used in the statistical data processing, using LISREL 8.8 application
software. Results show that compensation system has a significant positive influence on
the job satisfaction of the university lecturers, either directly or indirectly through job
satisfaction.
Keywords: compensation system, job satisfaction, lecturer performance, state university
1. INTRODUCTION
Higher education organization is an organization that have important role to enhancing the
academic quality of human resources, especially in Indonesia. This core principal make the higher
education organization, especially a state-university, has unique characteristics and make its
different from another public organizations. A state university in Indonesia has three pillars in
order to reach its objectives which consist of lecturers, administration officers, and students.
Therefore to be able to play the role well, every member of the organization must participate
optimally. For this study we emphasized our concern on lecturers, especially in the performance
of lecturer because lecturers are the prime factor in increasing quality of human resources and
also the leader of a higher education system (Krishnaveni & Anitha, 2007).
By concerning the important role of lecturers in increasing the quality of a higher education
system, lecturers and their performance must be given a thorough attention (Carmeli & Freund,
2004). Besides, good performance of the lecturers is an important component in increasing the
lecturers’ academic quality, the organization’s performance as a whole, and the customers’
(students) satisfaction. The primary tasks of lecturer are in three areas, namely, teaching, research,
and devotion to public. Together this task constitutes the work of academics, although some
people would argue that the devotion to public is of lesser importance to academics compared
with the other two tasks (Oshagbemi, 2000).
There are many factors that could give effect to lecturer performance, but one important factor
which could influence the lecturers’ performance is job satisfaction (Carmeli & Freund, 2004). At
higher education sector, Chen et al. (2006) noted that the job satisfaction of the lecturers is an
important factor that must be considered by the organization, because it could influence the
quality of the lecturers’ performance in teaching, in conducting researches and also in public
devotion activities. Based on that, job satisfaction of the lecturers is considered to be an important
factor which could influence the lecturers’ performance. It plays a role not merely in enhancing
the spirit and enthusiasm in their work activities, but also in helping the organization to operate
effectively and efficiently in reaching its goals.
To date, much of the research on academic quality in higher education focused just on
students, evaluating their satisfaction or dissatisfaction with various programs. Since employee
job satisfaction has been found to be as important as costumer (student) satisfaction (Oshagbemi,
2000), research on the quality of higher education has now also begun to look at the job
satisfaction of lecturers. Lecturer satisfaction can give an effect to lecturer performance, in which
could indirectly increase organizational performance and customer satisfaction. Lecturers are the
internal customer of the business and lecturer satisfaction with the environment could promote
teaching and research quality. Therefore, teacher requirements must be fulfilled to achieve
outstanding research and teaching performance (Chen et al. 2006).
Contemporary research in this area indicates that there are some factors capable to influence
job satisfaction and lecturers’ performance. But from the research done by Chen et al. (2006), it is
known that ideal compensation system is the important factor and will give satisfaction to the
lecturers in their working area and could motivate them to increase their performance; while an
inadequate compensation could harm job satisfaction and could cause decline in the productivity
and performance of the lecturers. Besides, in order to attract and retain an effective and
committed workforce, colleges and universities must offer competitive levels of compensation to
their faculty, and they have to recognize their achievements (Comm & Mathaisel, 2003). These
compensation commitments to the lecturer enhance performance, which in turn, is a key
component to improving academic quality.
Based on the description indicates a framework occurred. This framework showed that there
are several factors that could give an effect to lecturer performance. Although this framework
capture primary lecturer performance influences including compensation system and job
satisfaction, a unifying model of these established factors is absent. Thus for this study, all of
these factors will be merged in a unifying model and tested to the population. Besides, the
descriptions above indicate that a deeper research is required to find out the influence of
compensation system on lecturers’ performance, either directly or indirectly through job
satisfaction. So our purpose of this research is to know the influence of compensation system on
lecturer performance, either directly or indirectly through job satisfaction.
This research uses one State University in Bali as a case study to apply the conceptual model.
This University is selected because at the moment this university is a barometer of a quality
university for Middle Indonesia region.
2. RESEARCH MODEL
The research model explains the influence of exogenous variable on endogenous variable. In
this research, the exogenous variable is consisted of compensation system and the endogenous
variable is consisted of job satisfaction and the performance of lecturer. This research model is
shown in Figure 1 as follows.
Mentally Challenging
Work
Supportive Working
Condition
Job Satisfaction
Equitable Rewards
Intrinsic
Direct Extrinsic
Supportive
Colleagues
Compensation
System
Indirect
Extrinsic
Teaching
Performance
Research
Devotion to Public
Figure 1
Research Model
3. METHODOLOGY
3.1. Research Sample
The respondents of this research are permanent lecturers in the case university, with minimum
year of service of 4 years. It is due to the assumption that with such long years of service, they
will have sufficient understanding about the university. The number of research samples taken is
150 lecturers from 1433 population, measured based on Slovin formula (Sevilla, Ochave,
Punsalan, Regala & Uriarte, 1993). Proportionate stratified random sampling method was applied.
This is a method where population is classified based on a certain characteristic, and samples are
taken from the population proportionally and randomly (Sevilla et al., 1993).
The characteristic selected for this research is the lecturers’ work unit (the faculty or study
program) in the case university. The reason is that a faculty or a study program is the unit that
directly makes decision and policy.
3.2. Measurement Instrument
Measurement instrument used to measure compensation system is developed based on three
dimensions from Robbins (1996). The measurement instrument used to measure job satisfaction
of lecturers is a compilation of the four job satisfaction characteristics (Robbins, 1996). While the
measurement instrument used to measure lecturers’ performance is developed based on the
lecturers’ performance in executing the three higher education mission, named as “Tri Dharma”,
according to Utilization Decree of The State's Minister of Number State Apparatus
38/Kep/MKWASPAN/8/1999 date of 24 Augusts 1999 (Kepmen PAN no. 38 thoriums. 1999).
The scale type applied to measure perception of respondents in this research is a Likert form
scale.
The measurement instruments (questionnaire) were tested on 30 research samples, and
resulted in a reliability coefficient value (Cronbach's Alpha) of 0,910 for compensation system,
0,919 for job satisfaction, and 0,917 for lecturers’ performance. While the validity coefficient
value for every item posed at by total item correlation coefficient of 0,361. Based on the test
mentioned, it is concluded that the questionnaire is valid and reliable to be used as data collecting
instruments in this research.
3.3.
Data Processing Technique
Data processing in this research uses structural equation modeling method, with the help of
LISREL program. Early stage in data processing is making orthogonal transformation of data
from ordinal data to interval data, using the method of successive interval (MSI) technique. After
the data has been transformed into interval, then the interval data is processed using LISREL
program to calculate the level of influence between exogenous variables to endogenous variables.
In this research, the output from the LISREL program used to answer the research questions and
the research hypothesis are: line coefficient value, t-value and R2 value.
4. RESULTS
4.1. The Effect of Compensation System on Job Satisfaction
Result of data processing using the structural equation modeling method for compensation
system and the job satisfaction of lecturer is as follows:
• t-value of compensation system variable on lecturers’ job satisfaction is 3,78; which indicates
that the parameter value is significant.
• The partial influence of compensation system on lecturers’ job satisfaction is 0,69.
4.2. The Effect of Job Satisfaction on Lecturer Performance
Result of data processing using the structural equation modeling method for job satisfaction
and the lecturer performance is as follows:
• t-value of job satisfaction variable on lecturers’ performance is 4,21; which indicates that the
parameter value is significant.
• The partial influence of job satisfaction on lecturers’ performance is 0,44.
4.3. The Effect of Compensation System and Job Satisfaction on Lecturers’ Performance
Result of data processing using the structural equation modeling method for compensation
system, job satisfaction and lecturers’ performance is as follows:
• t-value of compensation system variable on lecturers’ performance is 2,85; which indicates that
the parameter value is significant.
• F value that of compensation system and job satisfaction variable on lecturers’ performance is
14,6; which indicates that the parameter value is significant.
• The value of coefficient of determination (R2) of compensation system and job satisfaction
variable on lecturers’ performance is 0,74; which indicates that 74% variance of lecturers’
performance is explained by compensation system and job satisfaction, while the rest (equal to
26%) might be explained by other variable.
• The directly partial influence of compensation system on lecturers’ performance is 0,31.
• The indirectly partial influence of compensation system on lecturers’ performance (through job
satisfaction) is 0,18.
• The simultaneous influence of compensation system and job satisfaction variable on lecturers’
performance is 0,38.
5. DISCUSSION
5.1. The Effect of Compensation System on Job satisfaction and Lecturers’ Performance
Research finding indicate that compensation system has positive and significant influence to
job satisfaction and lecturers’ performance. The level of contribution, either directly or indirectly,
has already been explained and it is shown that the level of job satisfaction and lecturers’
performance in the case university is also influenced by the compensation system. Therefore to
optimize the job satisfaction and lecturers’ performance, the policy makers in higher education
organization, especially in the case university, have to apply a compensation system concept as
explained by Robbins (1996).
This finding is in line with Dessler’s opinion (1997) which states that an ideal compensation
system could satisfy employees in doing their jobs, and an inadequate compensation system could
harm employees’ job satisfaction, which could result in the decline of their productivity and
performance. An inadequate compensation system could also lead to employees’ dissatisfaction
and cause them to leave the company and move to other companies which could give them higher
earnings. Moreover, Chen et al. (2006) also support the findings of this research. According to
Chen, from the six factors capable to influence job satisfaction of lecturers (organization vision,
respect, motivation, management system, compensation system and work environment), it is
found that the main factor which is very influential, is the compensation system. Chen et al.
(2006) stated that the ideal compensation system could give satisfaction to lecturers, so that they
are motivated to increase their performance. On the contrary, an inadequate compensation system
could harm job satisfaction and could decline the level of productivity and performance of the
lecturers.
From the result of this research it could be inferred that lecturers require a good compensation
system that could support them in executing their main duties. A good compensation system
could increase lecturers’ prosperity. Satisfied lecturers could improve their quality, not only in the
teaching activities but also in their productivity in executing researches and in their public
devotion activities. Robbins compensation system concept (1996) could be considered in
enhancing the lecturers’ job satisfaction and performance.
5.2. The Effect of Job Satisfaction on Lecturers’ Performance
Research finding indicates that the lecturers’ job satisfaction has a positive and significant
influence to the lecturers’ performance. The direct level of influence has already been explained
and it is also shown that the lecturers’ performance in the case university is also influenced by
their job satisfaction. Therefore to optimize the lecturers’ performance, the policy maker or leader
of a higher education organization, especially in the case university must look for appropriate
ways for the organization to increasing the lecturers’ job satisfaction.
This finding is in line with Chen et al.’s opinion (2006). According to Chen, job satisfaction
of lecturers is an important factor that must be considered by higher education organization,
because this factor could influence the quality of the lecturers’ performance in teaching, as well as
in executing researches and also in public devotion. Furthermore, Oshagbemi (2000) adds that
satisfaction of lecturers in doing their work could cause increase their commitment to the
university and could improve their productivity and performance in executing research and also in
their classroom teaching process. When lecturers feel satisfaction in their work, they will execute
and fulfill their duties with full effort, utilizing every ability that they own without minding the
time and energy that they have to spend.
Based on that, it is inferred that lecturers’ job satisfaction is an important factor which could
influence their performance. Job satisfaction is not merely an indication of the existence of spirit
and enthusiasm in executing their jobs, but job satisfaction could also influence the performance
and efficiency of the organization. From this research it could also be concluded that the lecturers
are looking forward to have a co-operative working condition and working environment which
could raise their satisfaction and enhance their performance.
5.3. The Simultaneous Effect of Compensation System and Job Satisfaction on Lecturers’
Performance
Simultaneously the solvent compensation system and job satisfaction could give significant
contribution on lecturer performance equal to 0,38. The rest (equals to 0,62) is the influence
coming from other factors like: organization culture, management system, work load and also
cooperation of team (teamwork). This indicates that improvement of the lecturers’ performance in
executing the higher education mission mostly depends on the adequate compensation system
concept that could enhance the job satisfaction of its lecturers.
Satisfied lecturers in doing their work, added with good relations between the lecturer could
give prosperity to the lecturers through good compensation system, which is believed to be able to
significantly increase the lecturers’ performance. This is not merely to the advantage of the
lecturer but also will give significant advantage to the organization’s performance, especially in
the case university.
6. CONCLUSION
Based on the discussion mentioned above, it could be inferred that:
• Compensation system has positive and significant influence on lecturers’ job satisfaction. This
indicates that lecturers in higher education organization, especially in the case university,
would experience improvement of their job satisfaction if the compensation system concept
from Robbins (1996) is applied.
• Compensation system has positive and significant influence directly as well as indirectly on the
lecturers’ performance. This indicates that the lecturers’ performance in higher education
organization, especially in the case university, would be improved if the compensation system
concept from Robbins (1996) is being applied by the policy maker.
• Job satisfaction has positive and significant influence on lecturers’ performance. This indicates
that job satisfaction plays an important role in higher education organization, especially in the
case university, as it could enhance the lecturers’ performance.
• Simultaneously the compensation system and job satisfaction have positive and significant
influence on the lecturers’ performance. This finding indicates that the lecturers’ performance
in higher education organization, especially in the university researched, would be improved if
they are satisfied, if the organization is applying appropriate compensation system.
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