Fix Journal Economic Bussines Submitted .Id - en
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Information Article
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History Article:
Submitted:
Revised:
Accepted:
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Keywords:
SEM-PLS; Manufacturing industry; employee performance
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Abstract
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The big manufacturing opportunity in Indonesia is located in Batam City, with 70%
of electronics production. Six large companies, such as PT Epson Batam and PT
Schneider Electric, play a key role. Human resource management (HR) is an important
factor in company success. Employees who are motivated, satisfied, work in a
conducive environment, have good working relationships, and have a good level of
education can improve company performance. Work motivation, job satisfaction, work
environment, work relationships, and employee education level influence
performance, with leadership style as a mediator. SEM-PLS analysis shows that these
variables have a significant influence. Leadership style acts as a powerful
mediator, linking motivation, satisfaction, environment, relationships, and
education with employee performance. These findings provide important insights for
companies in developing HR management strategies to improve performance and
competitiveness in the manufacturing industry. The large manufacturing industry
opportunity in Indonesia is located in Batam City, with 70% of electronics
production. Six large companies, such as PT Epson Batam and PT Schneider Electric,
play a key role. Human resource management (HR) is an important factor in company
success. Employees who are motivated, satisfied, work in a conducive environment,
have good working relationships, and have a good level of education can improve
company performance. Work motivation, job satisfaction, work environment, work
relationships, and employee education level influence performance, with leadership
style as a mediator. SEM-PLS analysis shows that these variables have a significant
influence. Leadership style acts as a powerful mediator, linking motivation,
satisfaction, environment, relationships, and education with employee performance.
These findings provide important insights for companies in developing HR management
strategies to improve performance and competitiveness in the manufacturing
industry.
Abstract
______________________________________
A major manufacturing opportunity in Indonesia lies in Batam City, with 70% of
electronics production. Six major companies, such as PT Epson Batam and PT
Schneider Electric, play a key role. Human resource management (HRM) is a crucial
factor in the company's success. Employees who are motivated, satisfied, work in a
conducive environment, have good working relationships, and a good level of
education can improve company performance. Work motivation, job satisfaction, work
environment, work relationships, and employee education level affect performance,
with leadership style as a mediator. SEM-PLS analysis shows that these variables
have a significant influence. Leadership style acts as a strong mediator, linking
motivation, satisfaction, environment, relationships, and education with employee
performance. The findings provide important insights for companies in developing HR
management strategies to improve performance and competitiveness in the
manufacturing industry. A large manufacturing industry opportunity in Indonesia is
located in Batam City, with 70% of electronics production. Six major companies,
such as PT Epson Batam and PT Schneider Electric, play a key role. Human resource
(HR) management is a crucial factor in the company's success. Employees who are
motivated, satisfied, work in a conducive environment, have good working
relationships, and a good level of education can improve company performance. Work
motivation, job satisfaction, work environment, work relationships, and employee
education level affect performance, with leadership style as a mediator. SEM-PLS
analysis shows that these variables have a significant influence. Leadership style
acts as a strong mediator, linking motivation, satisfaction, environment,
relationships, and education with employee performance. The findings provide
important insights for companies in developing HR management strategies to improve
performance and competitiveness in the manufacturing industry.
How to Cite: Yuswardi, Farid, R., & Astuty, D. (2024). The Influence of Work
Motivation, Job Satisfaction, Work Environment, Work Relations, and Education Level
on Employee Performance with Leadership Style as a Mediating Variable in
Manufacturing Companies in Batam City. REVITALLIZATION: Journal of Management
Science, Vol. (No), xx-xx
correspondence Address
Institutional address:
E-mail:
ISSN
0853-7283 (print) 2528-0503 (online)
DOI: xxxxxxxxxxxxx
The big opportunity for the manufacturing industry sector in Indonesia is located
in the city of Batam. According to the Indonesian Ministry of Industry (2018),
Batam has the largest electronics production reaching 70%. In Batam itself, there
are 6 electronic manufacturing companies that predominantly carry out massive
production, namely PT Epson Batam, PT Schneider Electric, PT Rubycon Indonesia, PT
Infineon Technologies Batam, PT Sumitomo Wiring System Batam Indonesia, PT Sat
Nusapersada Tbk. Of course, these six companies were founded to achieve certain
goals that had been prepared and planned by the owners and managers of these
companies. This plan and management must be implemented as well as possible so that
the company can develop and survive in the long term 1.
The success of a manufacturing company in managing and developing its company is
influenced by factors that are interrelated with each other. The main factor that
has the most influence on the success of company management is human resources,
which are the most important assets in a company. Companies need to manage their
human resources optimally in order to produce employees who also have good
performance. Employees are classified as human resources owned by the company. The
existence of employees in the company is to carry out previously determined plans
in accordance with the tasks given so that the company can achieve its desired
expectations 2
Human resource management needs to be carried out by companies to get employees
with the best competencies. Company employees must have the ability to carry out
their duties responsibly so that the company gets results from the employee's
performance. Performance itself can be interpreted as the maximum effort given by
employees to the company to meet the company's expectations. 3. Apart from that,
performance can also be seen as the result of work carried out by individuals, both
individually and in groups, in carrying out their duties and responsibilities
accompanied by sufficient competence and experience. they have within a certain
time period and conditions set by the company or organization where they work 4. To
realize this goal, there are several determinants that can produce good employee
performance in the company 5. These determinants are the reason a company must
operate optimally. Some of them are employee work motivation, job satisfaction,
work environment, work relationships, and employee education level.
Motivation has an important role in formulating effective employee performance for
the company. Employees usually work influenced by their internal interests and
motives. 6. The greater these motives and interests, the more employees will want
to perform their work to the maximum. Motivation, in this realm, is defined as a
form of persuasion that gives individuals a motive to achieve certain goals,
thereby making individuals change their behavior with additional commitment,
enthusiasm and persistence. Without motivation, employees may lose interest and
enthusiasm in their work, which can affect work quality and productivity. Work
motivation can influence employee performance positively 7. There are many studies
that analyze employee work motivation which has a significant and positive
correlation with employee performance 89. Maximum work motivation will motivate
employees to carry out their responsibilities so that they can improve their work
performance.
Achieved motivation creates job satisfaction in employees. Job satisfaction is an
important element in forming employees' pride and appreciation for themselves. The
greater the sense of satisfaction with the results of their work, the more
potential they will have the opportunity to improve their work. 10. In other words,
the sense of satisfaction in progressing and getting rewards and employee
satisfaction that have been fulfilled or in line with expectations will improve
employee performance and achieve organizational goals. Employees who feel satisfied
with their work tend to be more enthusiastic about work, more productive, more
focused, and tend to have better quality work. They also tend to be more loyal to
the company and more committed to achieving organizational goals. On the other
hand, employees who are dissatisfied with their work tend to be less enthusiastic,
less productive, less focused, and may not have good work quality. They tend to get
bored more easily and are less engaged in their work, which can reduce their
overall performance. Therefore, job satisfaction has a significant and positive
relationship with employee performance 11.
On the other hand, the work environment also has a big role in the quality of
employee performance, both directly and indirectly. One of these roles is to be a
consideration for employees in every action and behavior they carry out. 12.
Employees who have a supportive work environment with a comfortable and enjoyable
atmosphere tend to produce better performance than employees who are not supported
by a comfortable and enjoyable work environment. . Employee performance can be
determined by how comfortable an employee is working at the company.
This can be seen from the results of the employee's work. If the employee's work
environment is less than pleasant, then the results provided by the employee will
also be bad. On the other hand, if the employee's work environment feels
comfortable and enjoyable, then the work results provided by the employee will be
optimal 13. This is in line with statement 14 which divides the work environment
into two types, namely the physical and spiritual work environment. What is meant
by the physical work environment is that it is related to the work location where
the employee works. Meanwhile, the spiritual work environment is related to
emotional matters or feelings that exist between employees and superiors, fellow
employees, and the surrounding environment. These two types of work environment
play a very important role in determining employee results or performance 15.
A pleasant work environment is influenced by the working relationships that exist
between employees who work in the company. Work relationships are relationships
that exist between individuals in an organization or company, relationships between
individuals within the organization and parties outside the organization, as well
as carrying out the duties and obligations assigned to each of them 16.
Work relations within the company play a role in making it easier for employees to
carry out their duties both individually and per unit. Work relationships can
motivate each member of the company to help each other. Closeness between employees
will be established because of the working relationship between them, so that
company management can run more optimally. 17. The working relationship that exists
between employees is about respecting the opinions and existence of other people,
establishing communication with each other, relying on each other, and taking into
account any factors that can influence decisions. Work relationships in a company
cannot be avoided. To establish a working relationship, communication is needed in
all directions to create a reciprocal relationship between superiors and
subordinates and vice versa.
Therefore, education and training is needed for employees to be able to socialize
and adapt to the work environment and tasks given to them. Quality employees are
not measured by how quickly or diligently they carry out their tasks, but by the
level of education and abilities they have. This is because knowledge and abilities
can be carried out in the long term and have a good impact on the company.
Education is required in employee qualifications when applying for desired job
positions. So that employees who want this position will be motivated to carry out
their duties well and correctly. However, it is still common to find some employees
who are less motivated in carrying out their duties, therefore companies need to
increase the knowledge and insight of their employees through various training and
educational programs on a regular basis so that the competence possessed by
employees can increase from before. 18. It is hoped that the increase in competence
and insight will increase. owned by employees, the company can gain greater profits
and can maintain the company's existence from competitors. The level of education
influences the abilities possessed by employees, both in technical and managerial
work skills 19.
Currently, many companies are holding education and training programs amidst
unfavorable economic conditions in order to create improved economic conditions.
This needs to be done continuously because long-term insight will be better
implemented in the long term. Employees need to have education to avoid risks that
may arise in the future. It is hoped that by considering the level of education
possessed by prospective employees who will be accepted into a company, companies
can prevent risks that may be caused by a lack of competence and knowledge
possessed by employees 20
Therefore, researchers want to examine in more depth the performance of employees
in this company which is influenced by work environment factors, work
relationships, and the level of education of employees in the company. Through
various literature reviews in previous research, it was found that employee work
motivation, work environment job satisfaction, work relationships, and employee
education level are moderated by leadership factors that influence employees.
According to research 21, employee motivation cannot be separated from the leaders
involved in them who have the function of providing motivation both verbally and in
writing. The importance of the role of leadership in providing motivation is in
accordance with previous research findings which show that motivation is closely
related to leadership factors. Egenius states that leadership style is a typical
leader's pattern of behavior when he influences his audience, what the leader
chooses to do, the way the leader acts in influencing the group to shape the
leader's leadership22. Samosra's research, accompanied by Egenius's research,
stated that leadership style shapes company culture which is closely related to
work relationships and employment relations 23 24. Therefore, in this research,
leadership style will be used as a variable that mediates the influence of work
motivation, job satisfaction, work environment, employment relations, and level of
education on employee performance.
Judging from the explanation above, the researcher decided to conduct a study of
employee performance with the aim of finding out the influence of work motivation,
job satisfaction, work environment, work relationships and education level on
employee performance with leadership style as a mediating variable in Batam
manufacturing companies.
The hypotheses of this research are as follows:
H1: Work motivation has a significant positive effect on leadership style
H2: Job satisfaction has a significant positive effect on leadership style
H3: The work environment has a significant positive effect on leadership style
H4: Work relationships have a significant positive effect on leadership style
H5: Education level has a significant positive effect on leadership style
H6: Leadership style has a significant positive effect on employee performance
H7: Work motivation has a significant positive effect on employee performance which
is mediated by leadership style
H8: Job satisfaction has a significant positive effect on employee performance
which is mediated by leadership style
H9: The work environment has a significant positive effect on employee performance
which is mediated by leadership style
H10: Work relationships have a significant positive effect on employee performance
which is mediated by leadership style
H11: Education level has a significant positive effect on employee performance
which is mediated by leadership style.
METHOD
This research uses quantitative methods to analyze problems and this research was
designed using a positivistic paradigm. The research object used in this research
is an electronics manufacturing company in Batam City. Based on the research
object, the population in the research was determined by registering electronic
companies in Batam City. According to search results through observation and
snowballing, there are 6 electronic manufacturing companies that predominantly
carry out massive production. This list of companies was chosen because the number
of employees is more than 100 people with company activities that focus on the
electronics industry in Batam City. The six manufacturing companies are PT Tropical
Electronic, PT Siix Electronic Indonesia, PT EX Batam Indonesia, PT Infineon
Technologies Batam, PT Surya Electric Elektrik and PT Rubycon Indonesia.
Based on the results of employee calculations for the six companies that are too
large to be studied thoroughly, this research will use a research sample
formulation. The type of sample calculation is carried out through a non-
probability sampling technique which is adjusted to the characteristics of the
respondents required by the researcher (purposive sampling). The sample criteria
selected were employees who worked in one of the business entities in the research
population; employees who have worked for at least 2 years in the company; and
full-time employees who work at least 37 hours per week in the office.
The research sample is also determined through quantitative measures. In this
research, the number of research samples applied is directly proportional to the
questionnaire questions on the research instrument. The minimum sample size
determined is 1: 10 (one to ten) for each questionnaire question. This means that
one question item in the instrument is represented by 10 employee respondents. The
research questionnaire is able to measure 7 variables with a total of 45 questions.
Therefore, the minimum number of respondents that must be achieved for data
management is 45 x 10 = 450 respondents.
This research uses SEM-PLS (Structural Equation Modeling - Partial Least Square)
data analysis. The statistical analysis used in this research is Outer Model
Analysis, Inner Model Analysis, and Hypothesis Testing using the t test.
.
RESULTS
1. Descriptive Statistical Test
Based on table 1, it is known that the total number of respondents who filled out
the questionnaire completely was 450 people. Where this value corresponds to the
previously determined number of respondents
Table 1 Questionnaire Distribution Data
Information
Number of Questionnaires
Distribution of Questionnaires
450
Incomplete Questionnaire
0
Total
450
Source: Primary data, processed
Table 2 Distribution of Respondent Characteristics
Variable
Category
Amount
Percentage
Gender
Woman
251
55.8%
Man
199
44.2%
Age
18-25 Years
121
26.9%
26-30 Years
134
29.8%
31-35 Years
92
20.4%
> 35 Years
103
22.9%
Field of work
Technician
155
34.4%
Staff Officer
112
24.9%
Operator
183
40.7%
Level of education
SMA/SMK
123
27.3%
Diploma
91
20.2%
Bachelor degree)
155
34.4%
Postgraduate (S2)
81
18%
Income
4,000,000 - 6,000,000
207
46%
6,000,000 - 8,000,000
149
33.1%
8,000,000 - 10,000,000
14
3.1%
> 10,000,000
80
17.8%
Source: Primary data, processed
Based on table 2, it can be seen that the grouping of respondents is based on
gender. Where the majority of respondents were female with a total of 251
respondents or 55.8%. This figure is not much different from the number of male
respondents of 199 people or 44.25%. The age of 31-35 years among respondents is
higher than the age of other respondents. The majority of respondents' jobs are as
operators in companies. The last level of education of respondents, namely Bachelor
(S1), among the respondents, was higher than the last level of education of other
respondents. The salary range for most respondents is in the range of 4,000,000 -
6,000,000.
c. Reliability
The test results at this stage show that all constructs have Cronbach's alpha and
composite reliability values of more than 0.7, which means that all constructs are
reliable. This can be seen in table 4 as follows
Table 4 Reliability Test Results
Cronbach's Alpha
Composite Reliability
Information
Leadership style
0.896
0.924
Reliable
Work relationship
0.893
0.921
Reliable
Job satisfaction
0.893
0.922
Reliable
Employee performance
0.896
0.923
Reliable
Work environment
0.921
0.941
Reliable
Motivation
0.862
0.901
Reliable
Level of education
0.916
0.937
Reliable
Source: Primary data, processed
3. Hypothesis Testing
a. Partial Test
Table 5 Partial Test Results
Original Sample (O)
Sample Mean (M)
Standard Deviation
T Statistics
P Values
* H1: Work motivation has a significant positive effect on leadership style. Based
on the level of significance, in this study the Motivation variable has an
influence on the Leadership Style variable with a p-value of 0.000.
* H2: Job satisfaction has a significant positive effect on leadership style. Based
on the level of significance, in this study the Job Satisfaction variable has an
influence on the Leadership Style variable with a p-value of 0.003.
* H3: The work environment has a significant positive effect on leadership style.
Based on the level of significance, in this study the Work Environment variable has
an influence on the Leadership Style variable with a p-value of 0.000.
* H4: Work relationships have a significant positive effect on leadership style.
Based on the level of significance, in this study the Work Relations variable has
an influence on the Leadership Style variable with a p-value of 0.009.
* H5: Education level has a significant positive effect on leadership style. Based
on the level of significance, in this study the Education Level variable has an
influence on the Leadership Style variable with a p-value of 0.001.
* H6: Leadership style has a significant positive effect on employee performance.
Based on the level of significance, in this study the Leadership Style variable has
an influence on the Employee Performance variable with a p-value of 0.000.
b. Indirect Effects
Table 6 Significance of Indirect Effects
R Square
R Square Adjusted
Leadership Style
0.667
0.662
Performance
0.693
0.687
DISCUSSION
Based on the results of the path analysis data processing presented, we can take
several analyzes as follows:
1) Worker education has a significant effect on worker performance which is proven
to be mediated by leadership style. This shows that the level of education a worker
has directly influences their work performance. However, apart from education,
other factors such as work experience, skills, or motivation may have a greater
influence on worker performance. In addition, these results also show that
leadership style mediates the relationship between education and worker
performance.
2) The work environment has a significant effect on performance without or with the
mediation of leadership style. These results indicate that a conducive work
environment has a significant influence on worker performance. Both with and
without a leadership style as a mediator, a good work environment can directly
improve worker performance. This shows that attention to comfortable and
stimulative working conditions can have a positive impact on employee performance.
3) Worker motivation only has a significant effect on leadership style mediation.
This indicates that employee motivation has a more specific influence on leadership
style than on employee performance directly. Employee motivation can influence the
leadership style demonstrated by the leader.
4) Relations between workers have a significant effect on worker performance
without or with the mediation of leadership style. These results indicate that
relations between workers have a significant influence on worker performance.
Whether with a leadership style as a mediator or without mediation, good and
mutually supportive relationships between workers can improve the performance of
individuals and the entire work team.
5) Job satisfaction has a significant effect without or with leadership style
mediation. This shows that the level of job satisfaction felt by workers has a
significant influence on their performance, both with and without leadership style
as a mediator. This is because the job satisfaction obtained by employees can
improve employee performance. This is also supported by the mediating role of
leadership style. Where the leadership style factor is considered capable of
winning over the different views of each worker. This is also explained in Nina
Octavia that personality has an important factor in the performance of each
employee25.
6) Leadership style as a mediating variable has a significant effect on worker
performance. These results indicate that leadership style plays an important role
as a mediator between other factors (such as motivation, work environment, and
relationships between workers) and worker performance. In line with 26's view that
leadership style has an important role in improving employee performance because
the leadership style preferred by employees encourages employees to improve their
performance. This indicates that an effective leadership style can improve worker
performance by connecting these variables.
Overall, the results of this analysis show that factors such as the work
environment, relationships between workers, and leadership style have a significant
influence on worker performance, either directly or through mediation. Meanwhile,
other factors such as education, motivation and job satisfaction do not have a
significant influence on worker performance. Broadly speaking, what influences
employee performance are external factors, where when external factors have a
positive effect on employees, employees also tend to become workers with good
performance. Meanwhile, for internal factors, because of the assumed diversity of
characteristics of each employee, each employee has their own assessment of the
things that give them job satisfaction. So far, this analysis can provide important
insights for organizations in developing more effective management strategies and
policies to improve worker performance.
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Yuswardi, Ridhayati Farid, Dessy Astuty, The Influence of Work Motivation, Job
Satisfaction, Work Environment, Work Relations, and Education Level on Employee
Performance with Leadership Style as a Mediating Variable in Manufacturing
Companies in Batam City | 3