The
Influence of Transformational Leadership and Organizational Culture on the
Performance of Employees of the Regional Public Company Service Unit (Perumda)
Tirta Musi Palembang with Work Motivation as an Intervening Variable
Septia
Rizki Mutiara
Master
of Management Study Program, HR Management Concentration, Faculty of Economics,
Sriwijaya University, Indonesia
*e-mail: [email protected]
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Keywords |
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ABSTRACT |
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Transformational leadership, organizational culture, employee
performance, and work motivation |
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This
study aims to determine the direct effect of transformational leadership and
organizational culture on employee performance, the indirect effect of
transformational leadership and organizational culture on employee
performance through the work motivation of the Perumda Tirta Musi Palembang
service unit. Respondents in this study were taken using a census. The total
population for filling out the questionnaire was 305 respondents. The data
analysis technique used is the Structural Equation Model (SEM). The results
of this study indicate that transformational leadership has a direct positive
effect on performance, organizational culture has a direct positive effect on
performance, transformational leadership has a positive effect on work
motivation, organizational culture has a positive effect on work motivation,
work motivation has an effect on performance, transformational leadership has
a positive effect on performance through motivation, organizational culture
influences performance through motivation as an intervening variable. This
proves that work motivation is a good intervening variable or intermediary
variable for transformational leadership on performance, and organizational
culture on performance. This means that transformational leadership affects
the level of employee motivation so that it can affect employee performance
so that it can improve performance. |
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INTRODUCTION
Human
Resource Management can be defined as the management and utilization of
resources available in employees. This management and utilization are developed
to the maximum extent in the workplace to achieve the organization's goals and
employee development (Musbayar & Ginanjar, 2019). Therefore, human resource
management is one of the crucial factors in the success of a company. Managing
human resources plays a significant role in influencing employees because
leadership is the ability to influence a group towards achieving a vision or
goals set by the company or organization (Robbins, 2018).
Perumda
Tirta Musi Palembang is one of the Regional Public Enterprises (BUMD) providing
Drinking Water Supply System (SPAM) services located in the South Sumatra
Province at Jalan Rambutan Ujung No 1 Palembang. The transformation of PDAM
Tirta Musi into Prumda Tirta Musi was agreed upon by the Palembang City DPRD
and Mayor H. Harnojoyo during a plenary session held at the Palembang DPRD
building on October 13, 2022 (Dian, 2023).
The
Service Unit of Perumda Tirta Musi Palembang has the main task of providing
services and managing the benefits of drinking water to the community. Perumda
Tirta Musi Palembang's activities include collecting, processing, clarifying,
and distributing water to the public (Almuqsitu et al., 2019). As a public
company, Perumda Tirta Musi Palembang is expected to provide optimal
performance while maintaining the quality and quantity of water supply to its
customers.
Employee
performance can be influenced by various factors, including how leaders lead
their employees. The success or failure of an organization or company is
determined by leadership. Effective leadership can significantly impact a
company's progress. One of the fundamental issues faced by companies is how to
improve employee performance. Good performance is optimal performance that
meets organizational standards and supports the achievement of organizational
goals (Jufrizen, 2018). Companies with good employee performance can improve
overall company performance. One of the fundamental issues faced by companies
is how to improve employee performance. Good performance is optimal performance
that meets organizational standards and supports the achievement of
organizational goals (Jufrizen, 2018).
A
decrease in the quantity and quality of water from Perumda Tirta Musi Palembang
has led to complaints from the public about the service performance of Perumda
Tirta Musi Palembang. This is reported by intense.new (accessed on March 17,
2021), where the public complained about the suboptimal service provided by
Perumda Tirta Musi Palembang regarding the quality of water, which is
considered unclear and tends to be murky. Other complaints received by the
Ombudsman, a public service supervisory body, include a lack of water supply in
certain areas, making it difficult for residents to access water, and they hope
that Perumda Tirta Musi Palembang will find a solution (Sonora.id, accessed on
June 13, 2021).
The
choice of the research location is based on the problems faced by Perumda Tirta
Musi Palembang regarding transformational leadership, organizational culture,
performance, and motivation at work. Performance issues can be seen from the
operational aspect, where Perumda Tirta Musi Palembang employees have not been
able to maintain water flow to prevent water loss due to pipe leaks. Additionally,
services have not been fully effective, and many customers are dissatisfied
with various aspects, including water quality. The following is the performance
data of employees for the last 3 years, from 2019 to 2021, as seen from the
reports of Perumda Tirta Musi Palembang:
Perumda
Tirta Musi Palembang needs to make efforts to improve employee performance.
Although this is a challenge for management, the company must continue to work
on it. The success or failure of Perumda Tirta Musi Palembang in achieving its
targets and goals depends greatly on the quality of human resources performance
it possesses (Festiningtyas & Gilang, 2020).
Employee
performance improvement is also influenced by employee work motivation.
Employee performance is closely tied to motivation (Hasmalawati et al., 2018),
as factors influencing performance include ability and motivation. Employee
motivation has been a mystery to organizations, and organizational leaders must
continually strive to understand how work motivation affects employee
performance and how to use motivation to enhance performance and productivity.
Work motivation is the willingness to exert high effort towards organizational
goals, conditioned by the effort's ability to satisfy an individual need (Ridho
& Susanti, 2019). Employees with high work motivation towards
organizational goals are crucial for organizational development.
Perumda
Tirta Musi Palembang is perceived to be lacking in rewarding its employees,
such as providing annual bonuses. Some employees feel dissatisfied with the
annual bonuses they receive because they are deemed insufficient. Employees
also feel that they lack positive motivation from their colleagues, such as
when an employee lacks discipline at work, there is no reprimand or reminders from
fellow employees. Insufficient bonuses, lack of leave, and limited attention
from colleagues lead to decreased work motivation among employees, which is
inconsistent with the motivation indicators.
The
Service Unit of Perumda Tirta Musi Palembang should ideally have highly
motivated employees to carry out their tasks effectively and efficiently, to
improve the quality and productivity of the services provided to customers.
Work motivation plays a vital role for both employees and leaders because high work
motivation leads to enthusiastic work, ultimately resulting in high performance
and supporting the efficient achievement of goals (Adha et al., 2019).
Work
motivation is an internal drive that encourages individuals to produce outputs
to achieve their goals. Employee motivation can have a significant impact on
performance because when an employee has a strong desire to achieve
organizational or company goals, they will strive to do their best for the
company or organization. There are several studies supporting the relationship
between work motivation and employee performance (Adha et al., 2019). Rewards
for positive performance are one example of motivation that can be given to
employees.
Rewarding
employees for their performance is a policy issued by company leaders as an
effort to motivate employees to improve their performance. Perumda Tirta Musi
Palembang implements a reward system in the form of incentives for employees
according to the policy rules outlined in Mayor's Regulation Number 7 of 2018. This
regulation states that if Perumda Tirta Musi Palembang obtains profits or net
income, employees will receive incentives called production services. Perumda
Tirta Musi Palembang's profit is seen as the result of optimal employee
performance, and to appreciate this, the government and Perumda Tirta Musi
Palembang's leadership provide incentives to employees when the company obtains
a profit. The percentage of the production service is 20% of the net profit
after taxes. This incentive is then distributed equally among all employees
(Mayor's Regulation, 2018). This can serve as motivation for employees to work
better so that the company can achieve profits again in the following year.
Leaders
use various methods to lead, and one of them is transformational leadership.
According to Robbins (2018), transformational leaders inspire their followers
to put aside their personal interests for the benefit of the organization and
have an extraordinary influence on their followers.
METHODS
The
type of data used in this research is qualitative data. Qualitative data are
data that cannot be measured on a numerical scale. However, in statistics, all
data must be in numerical form, so qualitative data are generally quantified to
be processed further.
In
this research, the data source comes from primary data.
a. Primary
data refers to information obtained firsthand by the researcher related to the
variables of interest for the specific purpose of the study. Primary data
sources include individual respondents, focus groups, and the internet can also
be a source of primary data if questionnaires are distributed online (Sekaran
& Bougie, 2017).
b. b.
Secondary data refers to information collected from existing sources. Secondary
data sources include company records or documentation, websites, the internet,
and so on (Sekaran & Bougie, 2017).
The
data analysis method used in this research is Structural Equation Model (SEM)
in modeling and hypothesis testing. SEM is a set of statistics that can test a
relatively complex set of relationships simultaneously (Ferdinand, 2014). By
using SEM, not only can causal relationships (both direct and indirect) between
observed constructs be detected, but also the components contributing to the
formation of those constructs can be determined.
RESULTS
Table
1
Endogenous
Variables
|
Dimensions |
Indicator |
λ |
Error = 1-λ 2 |
CR=(∑λ) 2 /
((∑λ) 2 +∑Error) |
|
Work
motivation |
MK01 |
0.52 |
0.73 |
0.938 |
|
MK05 |
0.76 |
0.42 |
||
|
MK06 |
0.71 |
0.49 |
||
|
MK07 |
0.71 |
0.50 |
||
|
MK08 |
0.78 |
0.39 |
||
|
MK09 |
0.69 |
0.53 |
||
|
MK11 |
0.76 |
0.44 |
||
|
MK12 |
0.66 |
0.56 |
||
|
MK13 |
0.85 |
0.28 |
||
|
MK14 |
0.88 |
0.23 |
||
|
MK15 |
0.88 |
0.23 |
||
|
MK16 |
0.65 |
0.58 |
||
|
MK18 |
0.64 |
0.59 |
||
|
Performance |
K05 |
0.50 |
0.75 |
0.932 |
|
K06 |
0.66 |
0.56 |
||
|
K07 |
0.76 |
0.42 |
||
|
K08 |
0.76 |
0.42 |
||
|
K09 |
0.67 |
0.55 |
||
|
K10 |
0.77 |
0.41 |
||
|
K11 |
0.87 |
0.24 |
||
|
K12 |
0.91 |
0.18 |
||
|
K13 |
0.64 |
0.59 |
||
|
K14 |
0.75 |
0.44 |
||
|
K15 |
0.75 |
0.44 |
||
|
K17 |
0.67 |
0.55 |
Based on
information from Figure 4.5 and Table 4.12, it can be concluded that Model-3
CFA shows that there are no loading factors on the Endogenous Construct that
have a value below 0.5. This shows that all indicators on the endogenous
variables are valid. Apart from that, the Construct Reliability (CR) value
of all Endogenous Constructs is above 0.7, so it can be concluded that all
research dimensions and variables in the Ful Model have good reliability.
A.
Structural Equation Modeling (SEM) analysis.
The next stage is to carry out Structural Equation
Modeling (SEM) analysis on the full model, where invalid indicators are not
involved. Data analysis at the full model SEM stage involves testing model
feasibility and statistical testing. In research using the SEM analysis method,
there are several indices used to test the feasibility of the model, namely as
follows:
Table 2
Goodness of Fit Index.
|
No |
Goodness Of Fit Index |
Mark |
Cutoff Value |
Criteria |
Information |
|
1. |
Chi-Square |
6008.14 |
< α.df |
Good Fit |
Marginal Fit |
|
Probability |
0,000 |
< 0.05 |
|||
|
0.01 � 0.05 |
Marginal fit |
||||
|
2. |
RMSEA |
0.117 |
> 0.08 |
Good Fit |
Good Fit |
|
0.08 � 0.10 |
Merginal Fit |
||||
|
3. |
NFI |
0.87 |
≥ 0.90 |
Good Fit |
Marginal Fit |
|
0.80 � 0.89 |
Merginal Fit |
||||
|
4. |
NNFI |
0.90 |
≥ 0.90 |
Good Fit |
Good Fit |
|
0.80 � 0.89 |
Merginal Fit |
||||
|
5. |
CFI |
0.90 |
≥ 0.90 |
Good Fit |
Good Fit |
|
0.80 � 0.89 |
Merginal Fit |
||||
|
6. |
IFI |
0.90 |
≥ 0.90 |
Good Fit |
Good Fit |
|
0.80 � 0.89 |
Merginal Fit |
||||
|
7 |
RFI |
0.87 |
≥ 0.90 |
Good Fit |
Merginal Fit |
|
0.80 � 0.89 |
Merginal Fit |
Source: Results of Research Data Processing
(2023).
By referring to the analysis results from Table
4.13, the overall model (Full Model) meets four good goodness of fit
criteria, namely RMSEA, NNFI, CFI, and IFI. Apart from that, three other
goodness of fit criteria were also met well, namely Chi-Square Probability,
NFI, and RFI. Therefore, it can be concluded that the model as a whole (Full
Model) has met the good goodness of fit criteria. Thus, all the
resulting structural models are considered suitable and can be continued in
subsequent analysis.
The estimation results for the full SEM model
analysis based on the t-value are shown in Figure 1 below:
Figure
1. Full Model Estimation Results based on t-value
Based on Figure
4.6, it can be seen that the parameters in the Full Model, the variables
Transformational Leadership (LK) and Organizational Culture on work motivation
(MK) have a significant effect. Organizational Culture (BK) and work motivation
on performance (K) have a significant effect (t-value greater than 1.96),
except for the influence of Transformational Leadership (LK) on the performance (K) of Regional Public
Company Service Unit (Perumda) employees) Tirta Musi Palembang is not
significant at the 0.05% level.
The estimation
results for full model SEM analysis based on loading standards are shown in
Figure 2 below:
Picture 2. Full Model Estimation Results based on Standardized
Solution
Standardized Solution results above, the following structural equation
is obtained.
Sub-Structural
Equations:
MK = 0.37*LK + 0.52*BK
Based on the sub-structural model, it can be
explained that work motivation is
directly influenced by the employees'
Transformational Leadership and Organizational Culture. This shows that Transformational Leadership has a positive effect of
0.37 on work motivation and Organizational Culture has a positive effect
of 0.52 on the work motivation of employees of
the Tirta Musi Palembang Regional Public Company Service Unit (Perumda) . This means that employee organizational
culture has a greater influence on work
motivation for employees of the Regional Public Company Service Unit
(Perumda) Tirta Musi Palembang.
Structural Equation:
SK = 0.34*MK +
0.04*KT + 0.27*BO
From the structural model above, it can be
explained that performance in the Tirta Musi Palembang Regional Public Company
Service Unit (Perumda) is directly influenced by three factors, namely work motivation,
Transformational Leadership, and Organizational Culture. The influence of
Transformational Leadership on the performance of the Tirta Musi Palembang
Regional Public Company Service Unit (Perumda) is 0.04, while the influence of
Organizational Culture is 0.27. In addition, employee work motivation has a
greater influence on the performance of the Tirta Musi Palembang Regional
Public Company (Perumda) Service Unit, namely 0.34, compared to the influence
of Transformational Leadership and Organizational Culture on Tirta Musi
Regional Public Company (Perumda) Service Unit employees. Palembang. Thus,
employee work motivation is the factor that most influences performance at the
Tirta Musi Palembang Regional Public Company Service Unit (Perumda).
A.
Direct and
Indirect Influence Analysis
Influence analysis
aims to measure the strength of the relationship between one variable and other
variables, both directly and indirectly. The results of this analysis have
important meaning in determining strategies to improve performance at the Tirta
Musi Palembang Regional Public Company Service Unit (Perumda). LISREL is used
to calculate direct and indirect effects between variables, the calculation
results are as follows:
a.
Direct Influence
Table 3
Direct Influence
|
|
Transformational leadership |
Organizational culture |
Work motivation |
|
Work motivation |
0.37 |
0.52 |
|
|
Performance |
0.04 |
0.27 |
0.34 |
Source: Results of Research
Data Processing, 2023
����������� Based on Table 3, information is obtained that the direct
influence of Transformational Leadership on work motivation is 0.37, while the
direct influence of Transformational Leadership on Performance in the Tirta
Musi Palembang Regional Public Company Service Unit (Perumda) is 0.04. Apart
from that, there is a direct influence of Organizational Culture on work
motivation of 0.52, and a direct influence of Organizational Culture on
Employee Performance of the Tirta Musi Palembang Regional Public Company
Service Unit (Perumda) of 0.27. Apart from that, there is a direct influence of
employee work motivation on performance in the Tirta Musi Palembang Regional
Public Company Service Unit (Perumda) of 0.34.
b.
Indirect Influence
Table 4
Indirect Influence
|
|
Transformational leadership |
Organizational culture |
|
Work motivation |
|
|
|
Performance |
0.126 |
0.177 |
Source: Results of Research
Data Processing, 2023
Based on Table 4.
Transformational Leadership has a positive effect on
performance through work motivation as an intervening variable
of
0.126. Organizational culture has a positive effect on
performance through work motivation as an intervening variable
of 0.177.
1.
Transformational Leadership on Performance
��������������� Hypothesis testing shows that
the Transformational Leadership variable has a direct positive effect on the
Performance of the Regional Public Company Service Unit (Perumda) Tirta Musi
Palembang by 0.04.
��������������� In research by Kusuma &
Rahardja, (2018); Rivai, (2020); Widayati & Rahardjo, (2017) stated that in
carrying out a leadership role, leaders will be involved in more depth and
influence. This results in changes within the organization which are reflected
in the shared goals between subordinates and leaders. Influence in this context
refers to an active relationship between subordinates and leaders that exists
openly without coercion, and creates a reciprocal relationship. Thus,
leadership builds relationships between leaders and subordinates, which in turn
improves performance through reciprocal relationships between leaders and
subordinates.
2.
Organizational Culture on Performance
��������������� Hypothesis testing shows that
the Organizational Culture variable has a direct positive effect on the
Performance of the Regional Public Company Service Unit (Perumda) Tirta Musi
Palembang by 0.27.
��������������� Research by Kusuma &
Rahardja, (2018), Tirtayasa, (2019), Sari et al., (2012) revealed that
organizational culture has an influence on employee performance. This
organizational culture has the ability to form employee commitment to the
company, as well as bind employees to their duties and functions within the
company. Therefore, organizational culture has an impact on employee
performance. Apart from that, this research also shows that the existence of a
good organizational culture can improve employee performance in a better
direction. Overall, this research concludes that organizational culture has a
positive and significant influence on employee performance.
3.
Transformational Leadership on Work Motivation
��������������� Hypothesis testing shows that
the Transformational Leadership variable has a direct positive effect on the
work motivation of the Tirta Musi Palembang Regional Public Company Service
Unit (Perumda) of 0.37.
��������������� Research conducted by Hadian
(2018) and Saeed et al (2019), stated that the more effective transformational
leadership is towards employees, the more an employee's motivation will
increase. In other words, a work unit leader who has high charisma is able to
strengthen employee motivation through inspirational influence and is able to
stimulate employees' intellectual thinking. Apart from that, the leader also
provides personal attention to employees which encourages and arouses
enthusiasm, desire and internal motivation for employees to work. The higher
the ability of work unit leaders to motivate and stimulate employees, the
employee motivation will also increase.
4.
Organizational Culture on Work Motivation
��������������� Hypothesis testing shows that
the Organizational Culture variable has a direct positive effect on the work
motivation of the Tirta Musi Palembang Regional Public Company Service Unit
(Perumda) of 0.52.
��������������� According to Robbins (2018),
teamwork factors have a dominant influence on employee work motivation. This
can be explained that employees need mutual respect, mutual help and mutual
trust in their work environment when carrying out their duties. A conducive
social environment in the workplace turns out to have a significant impact on
employee morale and motivation in the organization. If employees fit into the
organizational culture of the company, this will increase their work
motivation. Research in line with this was carried out by Giantari & Riana
(2017), Megantara et al. (2019), and Sutoro (2020), who state that
organizational culture has a positive effect on employee work motivation.
5.
Work Motivation on Performance
��������������� Hypothesis testing shows that
the work motivation variable has a direct positive effect on the performance of
the Tirta Musi Palembang Regional Public Company Service Unit (Perumda) of
0.34.
��������������� According to research conducted
by Susanto (2019), employees will be encouraged to do their jobs well if they
have strong encouragement, whether it comes from within themselves or from
outside themselves, such as encouragement provided by the company. Ultimately,
this encouragement or stimulation will have an impact on good performance, and
vice versa. Research conducted by Hendra (2020), Megantara et al. (2019), and
Giantari & Riana (2017) show that there is a very strong positive influence
between employee motivation and performance.
6.
Transformational Leadership on Performance through Work Motivation as
an Intervening Variable
��������������� Hypothesis testing shows that
the Transformational Leadership variable has a positive effect on performance
through work motivation as an intervening variable of 0.126.
��������������� According to Handoko (2018),
motivation is an important element in the leadership process because leading
means motivating. Leadership style includes a leader's ability to direct
individual and organizational goals. Meanwhile, according to Robbins (2018),
motivation is the willingness to make high efforts towards organizational goals
based on individual needs.
��������������� In order to improve performance,
a leadership style that can direct organizational goals with individual needs
or aspects of the goals that individuals expect for their work can increase the
motivation of their subordinates. Several studies show that transformational
leadership can improve performance through work motivation, as found by Prayudi
(2020) who stated that transformational leadership style has an indirect effect
on employee performance through work motivation, Tucunan et al. (2018) who
found that work motivation mediates the influence of transformational
leadership style on employee performance, and Sujana & Ardana (2020) who
found that transformational leadership style has a positive and significant
effect on employee performance through motivation.
��������������� In this case, a leader has the
ability to motivate and supervise his subordinates to achieve better
performance standards in an effort to avoid work failure. Employees hope that a
leader must have the ability to create or arouse the work enthusiasm of his
subordinates, encourage his subordinates to have a strong commitment as an
effort to achieve company goals.
7.
Organizational Culture on Performance Through Work Motivation as an
Intervening Variable
Hypothesis
testing shows that organizational culture variables have a positive effect on
performance through work motivation as an intervening variable of 0.177.
��������������� Organizational culture can be
interpreted as a pattern of behavior and problem solving accepted by an
organization, which shapes employees and makes them able to adapt to the
environment and unite in an organization (Schein, 1992). Meanwhile, according to
Hasibuan (2017), motivation is something that influences human behavior to work
enthusiastically and actively in order to achieve optimal results. From the
description above, it can be concluded that if the organizational culture
accepted by an organization can influence specific things in the goals of
working individuals, then this can increase the individual's motivation at work
so that their performance will increase. Yusniar's research (2017) states that
motivation can mediate the relationship between organizational culture and the
performance of the North Aceh Regency Regional Secretariat apparatus.
CONCLUSION
Based on the research findings
presented in the previous chapter, several conclusions can be drawn. Firstly,
transformational leadership and organizational culture have a direct positive
impact on the work motivation of employees at the Regional Public Company
Service Unit (Perumda) Tirta Musi Palembang. Secondly, work motivation directly
contributes to the improved performance of employees in the Regional Public
Company Service Unit (Perumda) Tirta Musi Palembang. Thirdly, both work
motivation and organizational culture have a direct positive influence on the
performance of the Regional Public Company Service Unit (Perumda) Tirta Musi
Palembang. Furthermore, the transformational leadership variable positively
affects the performance of the Regional Public Company Service Unit (Perumda)
Tirta Musi Palembang through work motivation as an intervening factor. Lastly,
the employee organizational culture variable also positively impacts the
performance of the Regional Public Company Service Unit (Perumda) Tirta Musi
Palembang through work motivation as an intervening factor.
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