BUALNEWS.COM — In the current era of Industrial Revolution 4.0, the business world is required to improve employee performance further to develop the company. Many factors influence the success of a company; one important factor is human resources (Šebestová & Popescu, 2022). Achieving company goals depends on modern equipment, complete facilities and infrastructure, and the people who carry out the work. To achieve company goals, company leaders must develop human resources and coordinate and direct them to achieve better employee performance.
Competition in various sectors makes the management process and maintenance of company management increasingly receive serious attention from all elements within the company. Companies must create a solid managerial system that can keep up with current developments and is supported by employees who perform well. However, if one looks at the phenomenon at the research site in recent years, employees leave significantly yearly because of resigning or being fired. Resignations occur due to dissatisfaction with compensation and working time, while dismissals occur because employee performance decreases, which is also caused by compensation and working time.
Agency theory is a relationship based on a contract where one or more people (principals) employ other people (agents) to perform a service on behalf of the principal, thereby giving the agent some of the principal’s power in making decisions. An agent is the executor of a contract to carry out specific tasks for the principal. Meanwhile, the principal is the contract maker and compensates the agents. One way to align the goals of the principal and agent is a reporting mechanism through information. Information can reduce uncertainty and risks to principals and agents By its nature, agency relationships become problematic if the personal interests of the principal and agent differ Agency theory is based on two behavioral assumptions; the first assumes that individuals try to maximize their utility, and the second assumes that individuals tend to benefit from contract incompleteness.
Attribution theory was introduced by Heider (1958)who stated that attribution is part of a person’s factors (ability, experimentation) or the environment which have broad implications for behavior. The attribution process is similar to scientific procedures in that covariance is examined across situations, people, time, and modalities. Additionally, without complete covariation information, people use causal rules or schemas to account for events. Attribution theory emphasizes causal cognition with a reasonable direction for formulating a general theory in which thoughts are systematically related to actions. Cognitive behavior theories aim to specify the relationship between actions and thoughts. So it can be formulated that attribution theory is a field of social psychology which aims to explain how individuals determine the cause of an event or behavior and the consequences of this attribution for their subsequent behavior.
Performance theory, in this case, is a psychological theory about the process of a person’s work behavior so that it produces something that is the goal of their work (Tosi et al., 1991). Performance can also be said to be the result of a process that is referred to and measured over a certain period based on conditions or agreements that have been previously established.
Research findings show that compensation can influence employee performance positively and significantly. When the compensation provided by the company follows the contract, employee performance will increase, but on the contrary, employee performance willdecrease. Working time can also influence employee performance positively and significantly. When the working time provided by the company follows the existing contract, employee performance will increase, but on the contrary, employee performance will decrease. Compensation is the dominant variable that influences employee performance compared to working time.
Simultaneously, compensation and working time can influence employee performance. The better the compensation and working time the company provides to employees, the better the company’s performance. The results of this research can complement existing theories and be used as a reference for future research. The results of this research can be used as a reference for companies in improving the performance of their employees, especially in terms of compensation and working time. The results of this research can be used as a reference for the government to exercise control over companies so that they can improve the welfare of their employees through compensation and balanced working hours.
Penulis: Decky Hendarsyah, Dosen Manajemen Keuangan Syariah (MKS) Institut Syariah Negeri Junjungan Bengkalis
