West Science Business and Management
Vol. 4 No. 02 (2026): West Science Business and Management

The Influence of Organizational Culture and Compensation on Employee Engagement: The Mediating Role of the Work Environment in the Manufacturing Industry Sector of Lampung Province

Mega Widiyaningrum (Faculty of Economics and Business, Lampung University)
Nova Mardiana (Faculty of Economics and Business, Lampung University)
Zainnur M. Rusdi (Faculty of Economics and Business, Lampung University)



Article Info

Publish Date
30 Jun 2026

Abstract

Employee engagement is a crucial factor in enhancing employee productivity, loyalty, and performance in the manufacturing industry. However, low levels of employee engagement remain a significant challenge, influenced by various internal organizational factors, including organizational culture, compensation, and the work environment. This condition highlights the need for research to identify the factors affecting employee engagement in the manufacturing sector in Lampung Province. This study aims to analyze the influence of organizational culture and compensation on employee engagement and to examine the mediating role of the work environment. A quantitative research approach was employed using primary data collected through questionnaires distributed to 260 employees in the manufacturing sector in Lampung Province, selected through probability sampling. The data were analyzed using Structural Equation Modeling (SEM). The findings indicate that Hypothesis 1 was not supported, as organizational culture did not have a significant positive effect on employee engagement. Hypothesis 2 was supported, showing that compensation had a significant positive effect on employee engagement. Hypotheses 3 and 4 were not supported, indicating that the work environment did not mediate the relationship between organizational culture and employee engagement or between compensation and employee engagement. Based on these findings, companies are encouraged to strengthen fair, competency-based, and performance-oriented compensation systems while maintaining organizational culture stability and improving the work environment to enhance employee engagement. Future research is recommended to investigate other factors that may influence employee engagement.

Copyrights © 2026






Journal Info

Abbrev

wsbm

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

The Editors invite writers and experts to publish and share their ideas through scientific and empirical research in the field of Management and Business. The main objective of this publication is to improve theory, concept, and practice in the field of management and business. Dissemination of ...