The effect of organizational culture on employee performance mediated by job satisfaction and work motivation: Evident from SMEs in Indonesia

Abstract

This study aims to examine the influence of organizational culture on employee performance mediated by job satisfaction and work motivation. This research is a quantitative research with a case study at the SME PT PMS Company in Surabaya, Indonesia by distributing questionnaires to 50 employees. The data were processed using Structural Equation Modeling with the Smart PLS 3 programs. The results showed that in fact the respondents thought that organizational culture and work motivation had no direct significant effect on employee performance, and work motivation could not mediate organizational culture on employee performance. Organizational culture has a significant direct effect on job satisfaction and work motivation and job satisfaction has a significant direct effect on employee performance. Likewise, job satisfaction can mediate organizational culture on employee performance where all relationships lead in a positive direction. There has been no research that examines the relationship model of those 4 variables which is intended to determine the wider relationship between these variables and this study provides an overview of employee behavior in SME companies and is useful as input in determining strategies, especially for companies to improve their performance.