ANALYSIS OF FACTORS AFFECTING EMPLOYEE PERFORMANCE IN SMALL PLANTATION BUSINESS (CASE STUDY: SUMBER TANI)

Ria Alisa Manulang¹, Aurik Gustomo²

Master of Business Administration Institut Teknologi Bandung

Email: ria_alisa@sbm-itb.ac.id¹, aurik@sbm-itb.ac.id²

Abstract

The agricultural sector, specifically the palm oil industry, is a significant contributor to Indonesia's GDP. South Sumatera is one of the largest producers of Indonesia's total palm oil production. The purpose of this study was to determine how the influence of Employee Motivation, Compensation, and Organizational Commitment on Employee Performance at Sumber Tani as one of smallholder plantations in South Sumatera, namely Sumber Tani. Sumber Tani experienced challenges related to employee performance which led to the non-achievement of harvesting targets and decline in sales. This research uses a quantitative approach with research methods, namely multiple regression analysis and importance performance analysis. The source of this research uses primary data with data collection using a questionnaire. The sample in this study were 41 workers at Sumber Tani using saturated sampling techniques. The results of hypothesis testing show that there is a positive and significant influence simultaneously and partially between Employee Performance, Compensation, and Organizational Commitment on Employee Performance, where these variables have an influence of 91.5% on Employee Performance. The results of importance performance analysis found that Compensation is the priority variable for improvement. Recommended strategies to improve Compensation at Sumber Tani are to conduct a salary survey, determine the amount of salary based on the salary survey, and provision of incentives.

Keywords: Employee Motivation, Compensation, Organizational Commitment, Employee Performance

Introduction

The agricultural sector plays an important role in economic activities in Indonesia, this can be seen from the Agricultural Sector which has contributed 11.8 percent to the total national Gross Domestic Product (GDP) (Agriculture Census, 2023). Currently, plantations, especially palm oil, is the most strategic agricultural subsector and provide a large contribution to Indonesia's Gross Domestic Income (GDP) because they are the mainstay export commodity of the Agricultural Sector. Based on statistics provided by the Badan Pusat Statistik (BPS), Indonesia's export value of Crude Palm Oil (CPO) has reached US$29.62 billion in 2022. The data shows that South Sumatra is one of the largest palm oil producing provinces in Indonesia in 2021 based on the plantation statistics report issued by the Direktorat Jenderal Perkebunan. From a collection of statistical data issued by the Directorate General of Plantations in several years shows that the total land area in South Sumatra from 2017 to 2023 has fluctuated but tends to stabilize in the range of 0.56 million hectares each year. Furthermore, the total production in each year also fluctuates with an average total produced annually of 1.92 million Kg of oil palm. Based on all the statistic data related to the general condition of palm oil management in Indonesia above, it shows that the palm oil industry has the opportunity to contribute greatly to increasing Indonesia's economic growth. The research by (Bintariningtyas & Juwita, 2021) shows that the plantation business plays an important role in providing employment, especially in rural areas where many plantations are located. This has a positive impact on poverty alleviation and local economic development. By providing millions of jobs, the palm oil industry is the backbone of many communities in Indonesia and helps improve people's lives. In addition, the industry also drives the growth of related sectors, such as transportation and logistics, as well as processing industries that produce various palm oil derivatives. Despite challenges related to sustainability and environmental impacts, the role of the palm oil industry remains a key component in the economies of local communities where oil palm plantations are located in Indonesia.

Sumber Tani is a small plantation business that produces and sells oil palm fruits in one of the districts in South Sumatra. Sumber Tani as one of the business ventures in the field of smallholder plantations has the potential to contribute more to palm oil production and grow bigger in the South Sumatera. Sumber Tani can also be a means of providing employment for local communities around the oil palm plantation area. This is evidenced by the fact that all employees working at Sumber Tani are from the immediate area around its plantations. However, in the implementation of its operational activities in the plantation sector, Sumber Tani faces major challenges in terms of human resources due to various factors. The demanding nature of work in plantations, coupled with the intensive physical tasks of maintaining and harvesting oil palm fruits, places a great burden on the workforce. Thus, understanding and addressing the human resource challenges is critical for Sumber Tani to improve its human resource management to achieve operational efficiency, optimize yields, and maintain its contribution to the rapidly growing palm oil industry in South Sumatra. Based on interview with the business owner and several employees on the declining sales at Sumber Tani identified key issues linked to employee performance. Problems such as tardiness, absenteeism, and sudden resignations were noted, leading to delayed harvests and reduced fruit quality. Focusing on the longest-tenured workers, the research revealed central concerns around motivation, commitment, and inadequate compensation.

According to (Intan & Maulana, 2023), motivation is an aspect of psychology that has a huge influence on employee performance. As stated by (Omollo, 2015), motivation plays a crucial role in ensuring the success and longevity of an organization by fostering a strong work ethic and resilience. (Maduka & Okafor, 2014) contend that motivation involves stimulating behavior, sustaining behavioral advancement, and directing specific action behavior. Various factors can impact employee motivation, as stated by (Wiliandari, 2014). These factors include family and cultural influences, self-perception, gender, recognition and achievement, goals and aspirations, learning capacity, employee circumstances, environmental conditions, dynamic elements in the workplace, and leadership initiatives to motivate employees. Indicators of Employee Motivation according to (Mangkunegara, 2017) are responsibility, work achievement, opportunity for advancement, and work recognition.

Compensation as defined by (Murjanah 2019), encompasses all forms of payments including cash, physical commodities, and intangible benefits, that employees receive in exchange for their services rendered to the organization. The impact of compensation on employee motivation and performance levels is important and can be either direct or indirect (Erwinsyah, 2015); (Handayani, 2018). According to (Mujanah, 2019), several things that must be considered by a company in determining compensation are attractive, competitive, motivative, and reasonable.

Organizational commitment refers to an individual's unwavering devotion and wholehearted dedication to the company. It entails a continuous effort to actively contribute to the prosperity and progress of the organization (Luthans & Doh, 2018). According to (Sakban et al., 2019), organizational commitment is characterized by a deep belief in the organization's mission, active involvement in work responsibilities, and a strong sense of loyalty and affection towards the organization as a source of sustenance and employment. According to (Samsuddin, 2018), organizational commitment can be defined as a pledge or agreement to fulfil certain obligations. According to (Allen & Meyer, 1990), there are three separate dimensions of organizational commitment, namely affective commitment, continuance commitment, and normative comnmitment.

Employee performance refers to the execution of job tasks, including the methods employed and the outcomes achieved, with the aim of attaining organizational objectives (Chao et al., 2013). (Robbins et al., 1919) defines performance as the outcome that individuals achieve in their work based on specific job-related criteria. (Robbins et al., 1919) defines performance indicators as tools used to assess the level of employee performance including quality of work, quantity, timeliness, effectiveness, and independence.

Based on this description, this study aims to determine how the influence of Employee Motivation, Compensation, and Organizational Commitment on Employee Performance at Sumber Tani.

The results of research conducted by (Hasibuan & Silvya, 2019) to examine the effect of work discipline and motivation on employee performance at PT. Mewah Indah Jaya Binjai show that partially and simultaneously it is known that work discipline has a positive and significant effect on employee performance at the company. Other research was also conducted by (Ratnasari et al., 2020) to analyze the effect of individual characteristics, work environment, organizational climate, motivation, and compensation on employee performance on all permanent employees of PT Matahari Department Store Nagoya Hill Batam as many as 198 people showed one of the results, namely motivation has a positive and significant effect on employee performance. Therefore, it is hypothesize that:

H1 = Employee motivation is significantly and positively influence employee performance.

A study conducted by (Sinaga & Hidayat, 2020) aims to determine the effect of motivation and compensation on employee performance. This research was conducted on 65 employees of PT Kereta Api Indonesia Rantau Prapat branch with saturated sampling. The results of this study show one of the results that compensation has a positive and significant effect on employee performance. Meanwhile, similar research was also conducted by (Nugraha & Tjahjawati, 2017) to determine the effect of financial compensation on employee performance in Cargill Tropical Palm (ISK Lake View Estate) of West Kalimantan. The sample in this research is all of Cargill Tropical Palm (ISK Lake View Estate) field employees as many as 110 people used as material of analysis and the result is that there is a significant and positive influence between compensation and employee performance. Therefore, it is hypothesize that:

H2 = Compensation is significantly and positively influence employee performance.

The study by (Purwanti & Sutia Budi, 2021) aims to analyze the effect of organizational commitment and organizational culture on employee performance. The results showed in the f test (simultaneous) that organizational commitment significantly simultaneously affects employee performance with a sig value. F 0,000 < 0,05, while organizational culture has a significant effect on employee performance with a sig value. 0,000>0,05. (Ghorbanpour et al., 2014) also found that organizational commitment has a notable positive impact on employee performance, specifically, normative commitment had the most pronounced influence on average performance, surpassing both affective commitment and continuation commitment. Therefore, it is hypothesize that:

H3 = Organizational commitment is significantly and positively influence employee performance.

Method

The research design plays a vital role in providing an organized and methodical approach to the research process. According to (Sugiyono, 2018), quantitative research is a scientific approach that focuses on carefully analyzing a specific issue inside a phenomen and identifying probable connections or interactions between variables that are relevant to particular concerns. The researcher in this study has analyzed employee performance specifically within the setting of Sumber Tani. This study employs a quantitative methodology, utilizing descriptive and verification analyses as research methodologies. Data analysis is conducted by multiple regression analysis including simultaneous significat test (F-Test) and partial hypothesis test (t-Test) and importance performance analysis (IPA). This research relies on primary data obtained through the questionnaire distribution for data collecting. The participants in this study consisted of 41 employees from Sumber Tani, selected using saturated sampling procedures. All analysis processing using the help of statistical data processing program SPSS 23.

Result and Discussion

Table 1 of Validity and Reliability Test Results

Variable	No	r Count	r Table	Description	Alpha Cronbach	Description
Employee Motivation (X1)	1	0,807	0,3081	Valid	0,930	Reliable
	2	0,703	0,3081	Valid
	3	0,757	0,3081	Valid
	4	0.838	0,3081	Valid
	5	0,842	0,3081	Valid
	6	0,705	0,3081	Valid
	7	0,789	0,3081	Valid
	8	0,688	0,3081	Valid
	9	0,745	0,3081	Valid
	10	0,751	0,3081	Valid
	11	0,811	0,3081	Valid
Compensation (X2)	1	0,805	0,3081	Valid	0,929	Reliable
	2	0,850	0,3081	Valid
	3	0,813	0,3081	Valid
	4	0,846	0,3081	Valid
	5	0,759	0,3081	Valid
	6	0,709	0,3081	Valid
	7	0,855	0,3081	Valid
	8	0,753	0,3081	Valid
	9	0,803	0,3081	Valid
Organizational Commitment (X3)	1	0,841	0,3081	Valid	0,896	Reliable
	2	0,816	0,3081	Valid
	3	0,685	0,3081	Valid
	4	0,729	0,3081	Valid
	5	0,753	0,3081	Valid
	6	0,685	0,3081	Valid
	7	0,850	0,3081	Valid
	8	0,722	0,3081	Valid
Employee Performance (Y)	1	0,744	0,3081	Valid	0,932	Reliable
	2	0,725	0,3081	Valid
	3	0,776	0,3081	Valid
	4	0,800	0,3081	Valid
	5	0,770	0,3081	Valid
	6	0,788	0,3081	Valid
	7	0,779	0,3081	Valid
	8	0,738	0,3081	Valid
	9	0,866	0,3081	Valid
	10	0,713	0,3081	Valid
	11	0,796	0,3081	Valid

According to (Sugiyono, 2017), the validity of research results is established when there are connections between the collected data and the data associated with to the researched object. While according to (Sanusi, 2014) study, reliability is a term used to evaluate the consistency of outcomes when the same individual uses it at different periods, or if it is used by multiple individuals at the same or different times. In table above there is a validity index value on each statement item of the Employee Motivation, Compensation, Organizational Commitment, and Employee Performance variables as measured by the correlation value (r-table) which has above the critical value (0.3081), so each variable question is declared valid. While the reliability value of the statement items on the questionnaire of the four variables above shows the Cronbach alpha value > 0.6 these results indicate that the statement items on the Employee Motivation, Compensation, Organizational Commitment and Employee Performance variables in the research instrument are said to be precise, stable and reliable as variables in a study.

Table 2 of Regression Coefficient Results

Coefficients^a
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
		B	Std. Error	Beta
1	(Constant)	.552	1.612		.342	.734
	X1	.321	.109	.316	2.945	.006
	X2	.476	.170	.394	2.797	.008
	X3	.393	.191	.281	2.059	.047
a. Dependent Variable: Y

According tor (Siregar, 2013), multiple linear regression is developed as simple linear regression, which is a tool equation tor predict future demand based on prospective data and tor determine the effect of one or more independent variables (independent) on dependent variable (dependent). In table above, the beta coefficient is obtained for each variable so that a multiple linear regression equation can be formed as follows:

Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃+e

Y = 0,552 + 0,321 (X₁) + 0,476(X₂) + 0,393 (X₃)

Description :

Y = Emploryee Performance

β₀ = Regressiorn Cornstant

X₁ = Employee Motivation

X₂ = Compensation

X₃ = Organizational Commitment

β₁,… β_i = Corefficient Beta

e = Disruptive Factorrs

Table 3 of Simultaneous Test Results

ANOVA^a
Model		Sum of Squares	Df	Mean Square	F	Sig.
1	Regression	2346.690	3	782.230	132.484	.000^b
	Residual	218.461	37	5.904
	Total	2565.151	40
a. Dependent Variable: Y
b. Predictors: (Constant), X3, X1, X2

According to (Ghozali, 2013), the F statistical test is used to determine if the independent or dependent variables included in the model collectively affect the dependent or independent variable. Based orn the table above, the F_count value orf 132,484 is greater than the Ftable value orf 2,859 besides that it is knorwn tor be sig. (0.00) is less than the significant level (5%) sor H₀ is rejected. Thus the regression model means, so that simultaneously there is a significant influence between Employee Motivation, Compensation, and Organizational Commitment on Employee Performance on Employees at Sumber Tani.

Table 4 of Partial Test Results

Model	Koefisien Regresi	t hitung	t Tabel	Sig.	Keterangan
X1 à Y	0,321	2,945	2,026	0,006	ditolak
X2 à Y	0,476	2,797	2,026	0,008	ditolak
X3 à Y	0,393	2,059	2,026	0,047	ditolak

(Sanusi, 2014) argues that hypothesis testing or significance testing of each regression coefficient is necessary to ascertain the significance of the effect of each independent variable (X1, ....) on the dependent variable (Y). In the first hypothesis (H1), it is obtained that the t_corunt value of 2.945 is greater than the t_table of 2.026 and sig. (0.006) is smaller than the significance level (0.05) so that H₀ is rejected, meaning that there is a positive and significant influence between Employee Motivation on Employee Performance, with a positive regression coefficient which indicates that the better the Employee Motivation in Sumber Tani, the better the Employee Performance will be, and vice versa the worse the Employee Motivation in Sumber Tani, the worse the Employee Performance will be.

In the second hypothesis (H2), it is found that the t_corunt value of 2.797 is greater than the t_table of 2.026 and sig. (0.008) is smaller than the significance level (0.05) so that H₀ is rejected, which means that there is a positive and significant influence between Compensation on Employee Performance, with a positive regression coefficient which indicates that the better the Compensation at Sumber Tani, the better the Employee Performance will be, and vice versa, the worse the Compensation at Sumber Tani, the worse the Employee Performance will be.

In the third hypothesis (H3), it is found that the t_corunt value of 2.059 is greater than the t_table of 2.026 and sig. (0.047) is smaller than the significance level (0.05) so that H₀ is rejected, which means that there is a significant influence between Organizational Commitment on Employee Performance, with a positive regression coefficient which indicates that the better the Organizational Commitment in Sumber Tani, the better Employee Performance will be, and vice versa, the worse the Organizational Commitment in Sumber Tani, the worse Employee Performance will be.

Table 5 of Correlation Test Results

Model Summary^b
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.956^a	.915	.908	2.42989
a. Predictors: (Constant), X3, X1, X2
b. Dependent Variable: Y

Based on the value of R from the table above, the coefficient of determination aims to measure the ability of the model to explain the variation of the dependent variable by the independent variable. According to (Priyatno, 2016) the coefficient of determination is used to determine the percentage of contribution of the influence of the independent variables together on the dependent variable. The coefficient of determination is obtained from the results of the calculation as follows:

The results of the above calculation of the coefficient of determination of 91.5% indicate that Employee Motivation, Compensation, and Organizational Commitment have an influence on Employee Performance by 91.5% while the remaining 8.5% is influenced by other factors not examined.

The Importance-Performance Analysis (IPA) method allows firms to assess the significance and effectiveness of service features as perceived by consumers (Murdy & Pike, 2012). In this research, the Importance Performance Analysis method is used to determine the position of each independent variable that has been explained based on data processing, the level of importance data comes from the results of the beta coefficient of each independent variables on the results of multiple regression analysis and the performance is from the average of the average performance level scores from the total actual score in each independent variables on the questionnaires.

Figure of Importance Performance Matrix

Based on the calculations that have been carried out to create a Figure of Importance Performance Matrix in the importance performance analysis, the variable included in the first quadrant that is a priority for improvement is the Compensation variable obtaining a value of 3.379 at the performance level and 0.476 at the importance level. The Compensation variable is are considered important to employee (above average), but in reality the existing performance of this variable is not in line with expectations (below average).

Recommendation of strategies for compensation improvement:

1. Conducting the Salary or Wage Survey

A salary survey is an important part that needs to be done in determining employee salary standards. This activity is carried out to realize external justice which is an important factor in determining and planning the salary structure. Salary surveys can be carried out in various ways ranging from obtaining salary levels applied by other companies to making formal questionnaires (Mujanah, 2019).

2. Determining the Salary Amount Based on Salary or Wage Survey

According to (Mujanah, 2019), there are several indicators that can be used to determine the amount of salary received by employees, namely in determining the amount of salary received by employees, namely Time-Based Pay, Competency-Based Pay or Skill-Based Pay, Seniority-Based Pay Job-Based Pay, and Work Perfomance-Based Pay.

3. Provision of Incentives

According to (Rivai 2004: 384), incentives are a form of payment that is linked to performance, as a distribution of benefits for employees. Likewise, according to (Mangkunegara, 2017), incentives are a form of motivation expressed in the form of money on the basis of high performance and are also a sense of recognition from the organization of employee performance and contribution to the organization (company).

Conclusion

After analyzing the data and discussing Employee Motivation, Compensation, and Organizational Commitment as factors that affect Employee Performance at Sumber Tani, the following conclusions can be drawn:

1. Employee Motivation, Compensation, and Organizational Commitment partially and simultaneously have a positive and significant influence on Employee Performance at Sumber Tani. Employee Motivation, Compensation, and Organizational Commitment variables influence the Employee Performance by 91.5% while the remaining 8.5% is influenced by other factors not examined.

2. Variable that is prioritized for improvement of Employee Performance at Sumber Tani is Compensation.

3. Recommendation of strategies to improve Compensation at Sumber Tani are to conduct a salary survey, determine the amount of salary based on the salary survey, and provision of incentives.

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