The Impact of Compensation, Work Environment, and Job Characteristics on Employee Loyalty at PT. XYZ

Abstract

This study investigates the impact of compensation, work environment, and job characteristics on employee loyalty with job satisfaction as an intervening variable at PT. XYZ. The research was driven by a significant increase in employee turnover, from 2.6% in 2022 to 7.2% in 2024, reflecting a decline in employee loyalty. A total of 131 employees were selected using the Taro Yamane formula from a population of 195. The study used a quantitative explanatory approach, with data collected through structured questionnaires. The findings reveal that compensation, work environment, and job characteristics have a positive and significant effect on job satisfaction. Furthermore, these variables also influence employee loyalty directly and indirectly through job satisfaction. Job satisfaction was found to mediate the relationship between the independent variables and employee loyalty, strengthening the overall effect. This indicates that improving compensation, work environment, and job characteristics can effectively enhance job satisfaction, which in turn boosts employee loyalty. The study highlights the importance of focusing on job satisfaction to foster long-term commitment and reduce turnover rates.