International Journal of Business, Law, and Education
Vol. 7 No. 1 (2026): International Journal of Business, Law, and Education

The Role of Financial and Non-Financial Compensation in Improving Employee Work Productivity at CV Galih Langgeng Jaya

Restina Restina (Department of Management, Faculty of Economics and Management, Universitas Malahayati, Indonesia)
Sasa Dwi Andriani Saputri (Department of Management, Faculty of Economics and Management, Universitas Malahayati, Indonesia)
Taufik Edwar (Department of Management, Faculty of Economics and Management, Universitas Malahayati, Indonesia)
Febrianty Febrianty (Department of Management, Faculty of Economics and Management, Universitas Malahayati, Indonesia)
Reza Hardian Pratama (Department of Management, Faculty of Economics and Management, Universitas Malahayati, Indonesia)



Article Info

Publish Date
05 Jun 2026

Abstract

Employee productivity remains a central concern for small and medium-sized enterprises because productivity determines operational continuity, cost efficiency, and the ability to achieve business targets. This study examines the effects of financial compensation and non-financial compensation on employee work productivity at CV Galih Langgeng Jaya. Using a quantitative explanatory design, data were collected through a cross-sectional questionnaire survey involving the entire population of 88 employees, selected through census sampling. The data were analyzed using partial least squares structural equation modeling (PLS-SEM) with SmartPLS. The results show that financial compensation has a positive and significant effect on work productivity (β = 0.324, t = 2.070, p = 0.038), while non-financial compensation also has a positive and significant effect (β = 0.493, t = 2.863, p = 0.004). The model explains 61.2% of the variance in employee work productivity, indicating moderate-to-substantial explanatory power. Non-financial compensation has the stronger effect, suggesting that recognition, a supportive work environment, harmonious work relationships, and career development opportunities are critical productivity drivers. However, the heterotrait-monotrait ratio indicates discriminant validity concerns between several constructs, particularly financial and non-financial compensation; therefore, the results should be interpreted with caution and future studies should refine the measurement items. The study contributes to human resource management literature by demonstrating the combined role of material and psychological rewards in enhancing employee productivity in a medium-sized enterprise context.

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Economics, Econometrics & Finance Education Languange, Linguistic, Communication & Media Law, Crime, Criminology & Criminal Justice Neuroscience Social Sciences Other

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International Journal of Business, Law, and Education disseminates knowledge about Business, Law, and Education that useful to academics, educators, scholars, managers, practitioners, policy makers, consumers, and other stakeholders all around the ...