Mediation Role of Job Satisfaction on the Influence of Non-Financial Compensation and Transactional Leadership on Employee Performance

Abstract

This research developed a path goal theory model and an empirical research model to fill the research gap regarding non-financial compensation and transactional leadership on employee performance. This research is causality research, the population of all food and beverage companies in Surakarta of 1,302people. A sample of 306 employees was taken proportionally, using incidental sampling techniques. The instrument uses a questionnaire with a Likert scale, previously tested with logical connecting indicator tests, validity tests, and reliability. Data analysis using descriptive and quantitative analysis. Analysis tools using SEM AMOS. Non-financial compensation and transactional leadership directly have a significant positive effect on employee performance. Job satisfaction can play a role in mediating the influence of non-financial leadership and transactional leadership on employee performance. There is an influence of non-financial compensation on the performance of employees, although significant but small influence. This research contributes to the path-goal idea as evidence that leaders who are willing to guide and motivate their subordinates to achieve goals and non-financial compensation policies are essential determinants of increasing job satisfaction, improving employee performance.