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All Journal Digital Innovation : International Journal Of Management
Megawati Megawati
Politeknik Pertanian Negeri Pangkajene Kepulauan
Decision Sciences, Operations Research & Management

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The Effect of Compensation on Employee Loyalty in MSMEs Fostered by Bio Hadikesuma Management Training and Consulting (BHMTC) Indonesia, Yogyakarta Nadyta Masagala; Megawati Megawati; Arifah Arifah
Digital Innovation : International Journal of Management Vol. 3 No. 4 (2026): October: Digital Innovation : International Journal of Management
Publisher : Asosiasi Riset Ilmu Manajemen Kewirausahaan dan Bisnis Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.61132/digitalinnovation.v3i4.775

Abstract

Compensation is widely regarded as a major determinant of employees’ loyality to their organization. This research set out to examine how compensation shapes employee loyality in Micro, Small, and Medium Enterprises (MSMEs) guided by Bio Hadikesuma Management Training and Consulting (BHMTC) Indonesia, Yogyakarta. Compensation was broken down into salary (X1) and benefits (X2), with employee loyalty as the dependent variable (Y). A quantitative design with a descriptive orientation was used, and all 30 employees were included as respondents through saturated sampling. Information was gathered via observation, interviews, a literature review, dan a Likert-scale questionnaire. SPSS was used to run validity and reliability checks, classical assumption tests, multiple linear regression, t-tests, an F-test, and the coefficient of determination. The findings show that, taken separately, salary (X1) has a positive and significant effect on employee loyalty (Y), whereas benefits (X2) have no significant effect. Taken together, however, salary (X1) and benefits (X2) significantly effect loyalty (Y). The study concludes that compensation, and in particular an appropriate salary, plays an important role in strengthening employees’ commitment, sense of responsibility, and loyalty toward the enterprise.
Co-Authors Arifah Arifah Nadyta Masagala