The Role of Compensation, Job Rotation, Employee Engagement and Employees Performance of SMEs

Abstract

Purpose: The purpose of this study is to analyze the relationship between compensation and employee performance, analyze the relationship between job rotation and employee performance, and analyze employee engagement on employee performance in SMEs.   Design/Methodology/Approach: The method used in this study is quantitative to test the hypothesis taken from the research variables in numbers and then the data is analyzed using statistical procedures. This study explains the causal relationship between variables through hypothesis testing. The population in this study were 670 SMEs owners. Data collection techniques in research were carried out by distributing questionnaires containing statements related to the variables studied. The measurement scale used for this research is a 7-point Likert scale. Data analysis uses the Partial Least Square (PLS) method.   Findings: The results of this study are compensation has a significant effect on employee performance, job rotation has a significant effect on employee performance, employee engagement has a significant effect on employee performance   Practical implications: SMEs managers should implement compensation, job rotation to encourage employee performance improvement and also to encourage employee engagement  to improve SME employee performance.   Authenticity/Value: The novelty of this research is the discovery of a relationship model of compensation, job rotation, Employee Engagement and performance of SMEs employees.