Improve the existing compensation program

Oct 13, 2025 by vinooalluri.com 11 views

The Effect of Giving Direct Financial Compensation on Employee Performance at PT Ultra Adi Lestari Stella Perkasa Medan

Introduction

In today's competitive business landscape, employee performance is a crucial factor that determines the success of a company. One of the key drivers of employee performance is financial compensation, which not only serves as a reward for their work but also as a motivator to increase productivity and performance. At PT Ultra Adi Lestari Stella Perkasa Medan, a leading company in the industry, this study aims to explore the impact of direct financial compensation on employee performance. By understanding the effect of financial compensation on employee performance, companies can develop better strategies to increase team productivity and overall performance.

Research Background

Financial compensation is a critical aspect of employee motivation and performance. It not only provides a sense of security and stability but also serves as a motivator to increase productivity and performance. In the context of PT Ultra Adi Lestari Stella Perkasa Medan, the analysis was carried out on 74 employees through the distribution of questionnaires, with the aim of obtaining relevant primary data. The analysis method used is descriptive analysis and simple regression, as well as hypothesis testing using SPSS Statistics 17.0.

The Importance of Financial Compensation

Financial compensation is a critical factor that influences employee performance. It serves as a reward for their work and motivates them to increase productivity and performance. In the context of PT Ultra Adi Lestari Stella Perkasa Medan, the study found that financial compensation has a positive and significant influence on employee performance. With a coefficient of determination (R²) of 0.462, meaning 46.2% of employee performance can be explained by the provision of direct financial compensation, while the remaining 53.8% is influenced by other factors that are not examined, such as benefits, facilities, overtime working hours, insurance, and others.

The Role of Other Factors

While financial compensation is a critical factor that influences employee performance, it is not the only factor. Other factors such as benefits, facilities, overtime working hours, insurance, and others also play a significant role in determining employee performance. In the context of PT Ultra Adi Lestari Stella Perkasa Medan, the study found that these factors have a significant influence on employee performance, although the magnitude of their influence is smaller compared to financial compensation.

The Impact of Financial Compensation on Employee Performance

The study found that financial compensation has a positive and significant influence on employee performance. This is consistent with previous studies that have found a positive relationship between financial compensation and employee performance. The study also found that the provision of appropriate and fair compensation is very important to encourage employee performance. Giving a decent salary, attractive incentives, and adequate bonuses can increase work motivation.

The Importance of Employee Performance

Good employee performance is not only important for the company's productivity but also for employee job satisfaction and loyalty. When employees are satisfied with their job and feel valued, they are more likely to be motivated and perform well. In the context of PT Ultra Adi Lestari Stella Perkasa Medan, the study found that employee performance has a positive impact on company productivity and employee job satisfaction.

Conclusion

In conclusion, the study found that financial compensation has a positive and significant influence on employee performance. The provision of appropriate and fair compensation is very important to encourage employee performance. Companies need to consider various other factors that can also affect performance, such as a comfortable work environment, career development opportunities, as well as recognition of employee achievements. By understanding the effect of financial compensation on employee performance, companies can develop better strategies to increase team productivity and overall performance.

Recommendations

Based on the findings of this study, the following recommendations are made:

Improve the existing compensation program: The management of PT Ultra Adi Lestari Stella Perkasa Medan is advised to continue to improve the existing compensation program to ensure that it is fair and attractive to employees.
Consider other factors that affect performance: Companies need to consider various other factors that can also affect performance, such as a comfortable work environment, career development opportunities, as well as recognition of employee achievements.
Regularly evaluate and adapt compensation policies: Management needs to regularly evaluate and adapt compensation policies to achieve company goals and employee welfare simultaneously.

Limitations of the Study

This study has several limitations. Firstly, the study only examined the impact of financial compensation on employee performance in the context of PT Ultra Adi Lestari Stella Perkasa Medan. Secondly, the study only used a sample of 74 employees, which may not be representative of the entire company. Finally, the study only examined the impact of financial compensation on employee performance and did not examine other factors that may also affect performance.

Future Research Directions

Future research should aim to examine the impact of financial compensation on employee performance in other companies and industries. Additionally, future research should aim to examine the impact of other factors that may also affect performance, such as benefits, facilities, overtime working hours, insurance, and others.
Frequently Asked Questions (FAQs) about the Effect of Giving Direct Financial Compensation on Employee Performance at PT Ultra Adi Lestari Stella Perkasa Medan

Q: What is the main objective of this study?

A: The main objective of this study is to explore the impact of direct financial compensation on employee performance at PT Ultra Adi Lestari Stella Perkasa Medan.

Q: What is the significance of financial compensation in employee performance?

A: Financial compensation is a critical factor that influences employee performance. It serves as a reward for their work and motivates them to increase productivity and performance.

Q: What is the coefficient of determination (R²) in this study?

A: The coefficient of determination (R²) in this study is 0.462, meaning 46.2% of employee performance can be explained by the provision of direct financial compensation.

Q: What are the other factors that affect employee performance?

A: Other factors that affect employee performance include benefits, facilities, overtime working hours, insurance, and others.

Q: How does financial compensation affect employee motivation?

A: Financial compensation can increase work motivation by providing a decent salary, attractive incentives, and adequate bonuses.

Q: What is the impact of employee performance on company productivity?

A: Good employee performance has a positive impact on company productivity and employee job satisfaction.

Q: What are the recommendations for companies based on this study?

A: The recommendations for companies based on this study are to improve the existing compensation program, consider other factors that affect performance, and regularly evaluate and adapt compensation policies.

Q: What are the limitations of this study?

A: The limitations of this study are that it only examined the impact of financial compensation on employee performance in the context of PT Ultra Adi Lestari Stella Perkasa Medan, only used a sample of 74 employees, and only examined the impact of financial compensation on employee performance and did not examine other factors that may also affect performance.

Q: What are the future research directions based on this study?

A: The future research directions based on this study are to examine the impact of financial compensation on employee performance in other companies and industries, and to examine the impact of other factors that may also affect performance.

Q: What is the implication of this study for human resource management?

A: The implication of this study for human resource management is that financial compensation is a critical factor that influences employee performance, and companies need to consider various other factors that can also affect performance.

Q: What is the implication of this study for organizational performance?

A: The implication of this study for organizational performance is that good employee performance has a positive impact on company productivity and employee job satisfaction, and companies need to develop strategies to increase team productivity and overall performance.

Q: What is the implication of this study for employee welfare?

A: The implication of this study for employee welfare is that companies need to consider various other factors that can also affect performance, such as a comfortable work environment, career development opportunities, as well as recognition of employee achievements.