“The Influence of Descipline, Compensation and Competencies towards Employee Performance (Study at PT Petrokimia Gresik)”

Dwikidyatama Iswara

Supervisor: Risna Wijayanti, SE., MM., Ph.D

The competition of agriculture industry especially fertilizer is very tight considering the existence of AEC policy since 2016. This makes local fertilizer company in Indonesia is demanded to improve the quality of its human resources. A good quality of human resources can be measured by good employee performance. This research aimed to investigate factors affecting employee’s performance especially in fertilizer industry. This study was conducted to determine the effect of discipline, compensation, and competence on employee’s performance. In this study, PT Petrokimia Gresik serve as an object representing all state- owned fertilizer companies in Indonesia. Population in this research are all permanent employees in PT Petrokimia Gresik whic are 3,173 employees. For sampling technique, this study used Slovin formula calculation with 10% error rate. The samples obtained in this study were 112 employees of PT Petrokimia Gresik. This study was conducted by regression analysis. The results of research show that discipline, compensation, and competence have a significant effect partially on employee’s performance, and competence has a dominant effect on employee’s performance. Keywords: Discipline, Compensation, Competencies, Employee Performance.

INTRODUCTION requires special training in order to meet the expectations of company. Therefore, Human resources are the most employee’s performance must be valuable assets in a company, including in considered by manager and company. agricultural companies. Without human Employee performance is one factor that is resources the companies will not be able to important because the progress of the get profit or increase its own value. Human organization or company depends on the Resource Management is based on a human resources owned. If performance concept that every employee is human, not increases then the success of reaching the machine, and not just a business resource. company's goals is more wide open. On the Therefore, several companies must have a other hands, if performance declines then it good human resources management. The could lead to setbacks for companies and company will get a great performance and companies cannot maintain its business progress if the employees have a great (Mangkunegara in Mangkunegara and attittude and behavior inside or outside the Waris, 2015:1242) company. Previous studies found that one of the Quality of human resources can be factors that can affect employee shown based on how well the employees’ performance is discipline. Discipline has a performance in organization. Based on the positive effect on employee performance. performance of employees, a company can Good discipline management can make assess whether the employees can meet the employees gain more knowledge in terms expectations of the company with a good of work. This is supported by research quality performance or the worker actually conducted by (Anthony, 2017) who said that the discipline can increase employee researchers show different results performance. Anthony also added that good concerning the compensation. One of discipline management can broaden the which is a research conducted by (Rizal, et perspective of employees, even easier to al., 2014). make the employees to be promoted. The researcher stated that Anthony's research concludes that, current compensation has less contribution to disciplinary action has ensured that employee performance. The study found institutional growth through effective that high compensation is incompatible procedures and good communication. From with employee salary conditions, incentives these statements, it can be seen that the and benefits is not always able to improve discipline set by the company can affect the employee performance. Hence, the performance of employees in the company. researcher is interested in taking However, there are studies that suggest that compensation variable to be researched in discipline does not have a significant effect different companies. on employee performance, such as research that has been done by (Suwuh, 2015). Compensation is a system that all Based on the results of the questionnaire company has made to retain the qualified obtained by Suwuh, 70% of respondents employee, to give the motivation to the live far away from the workplace. Thus, it employee so the employees might increase affects their work punctuality. Due to the their performance, and also to attract the unequal results of the discipline variable on prospective talented employees. In PT employee performance, the researcher was Petrokimia Gresik, the company has also interested in doing research involving different three cores depending on the discipline variable. function of each department which are normal core, supporting core and non-core. In addition, compensation also Each cores have different compensation for includes one of the factors that can affect the employee depending on the employees employee performance. Good competencies. compensation can improve employee performance in the organization, and can Competence is also one factor that also attract human resources that have good can affect the performance of employees in quality. Some researchers pointed out that a company. Competence also have compensation has a positive impact on important role towards employee employee performance. (Ramzan, et al., performance because competence related 2014) found different results stating that with knowledge, skills, behavior that must Compensation has a positive impact on be possessed by employee in carrying out employee performance. It is evident from their professional duties for the their correlation analysis that all organization they are covering. Some independent variables have weak or researchers found that competence had a moderate positive relationships. Ramzan et positive effect on employee performance, al also conducted a regression analysis but there were also researchers who found showing that all the independent variables that the competence had no effect on had an insignificant and positive influence employee performance, as found by on employee performance. Descriptive (Kolibáčová, 2014). The results of his analysis also reveals that all independent research, said that there is no relationship variables have a positive impact on between competence and employee employee performance. That means, what performance. However, there is research is found by Ramzan et al is the positive from (Ismail & Abidin, 2010) from compensation but it does not give Malaysia which shows that the competence significant impact on employee of workers has a significant effect on performance. However, different employee performance. According to the several statements above, the discipline of Function of Human Resource work is related to the timing of work and Management task completion for employee, In carrying out the work, the compensation related to what makes organization should pay attention to the employees motivated to improve their functions of management and operational performance, and competence relates to the functions . According to Flippo (1996: 5-7), tasks assigned to employees. That means, there are two human resource management discipline, compensation, and competence functions, namely: have an important role to influence employee performance. 1. Management Functions Human Resource function for its Based on the previous description management function consists of stated in the research background, the organizing, planning, leading and problems of the research are elaborated as controlling human who is an important follow: asset for the company. Here are some explanations of the HR functions in 1. Does discipline affect the management. employees’s performance of PT (1) Planning Petrokimia Gresik? Planning the workforce effectively 2. Does compensation affect the and efficiently to fit the need of the employee’s performance of PT company in helping the realization of Petrokimia Gresik? the goal is very necessary. 3. Does competencies affect (2) Organizing employee’s performance of PT Activities to organize all employees Petrokimia Gresik? by establishing the division of 4. Does competencies has dominant employee, work relations delegation factor affecting employee’s authority, integration, and performance of PT Petrokimia coordination in the organizational Gresik ? chart. The organizations is just a tools LITERATURE REVIEW to reach a goals. Human Resource Management (3) Directing According to Robbins and Coulter Activities directed all employees to (2012:312), Human Resource Managemen cooperate and work effectively and is important because it can be a significant efficiently in helping the achievement source of competitive advantage as various of corporate goals, employees and studies have concluded for organizations society around the world. HRM also an important (4) Controlling part of organizational strategies. Achieving Controll all employees to comply competitive success through people means with company regulations and work managers must change how they think according to plan is important in about their employees and how they view organizations. the work relationship. They must work with 2. Operational Functions people and treat them as partners, not just Human Resource function for its as costs to be minimized or avoided. The operational function consists of way organizations treat their people has procurement, development, been found to significantly impact compensation, and integration. these are organizational performance. some explanations of the HR functions in operational.

(1) Procurement generally used as dependent variables. The process of withdrawal, selection, Understanding performance by experts placement, orientation, and induction found in many management books, or on to get employees that fit the needs of the internet. According Sulistiyani and the company. Good procurement will Rosidah (2009), a person's performance is a help achieving goals. combination of ability, effort, and (2) Development opportunities that can be assessed from the Development is the process of results of his or her work. Meanwhile, improving the technical abilities, according to Bernardin and Russel (in theoretical, conceptual, and moral Sulistiyani and Rosidah, 2009: 223-224) skills of employees through states that the performance is an outcome education and training. record generated from the function of (3) Compensation certain employees or parts performed over Direct and indirect payments, money a period of time. or goods to employees in return for Factors Affecting Employee’s services rendered to the company. Performance

(4) Integration Performance in carrying out its Activities to unite the interests of the function does not stand alone, but it is company and the needs of employees, always associated with employee’s job in order to create a harmonious and satisfaction and the level of reward given, mutually beneficial cooperation and it is also influenced by the skills, So the HR function according to the abilities and individual traits. Regarding description above consists of management employee’s performance, partner-lawyer functions and functions of operations according to Rivai (2005: 16) stated that consists of organizing, planning, Individual performance can basically be organizing, leading and controlling human influenced by several factors, namely who is an important asset for the company. expectations on rewards (compensation), Meanwhile, an operational function of encouragement (motivation), ability / skill employees includes procurement, (competencies), work time pressure development, compensation, and (discipline), performance appraisal, and integration. certainty of work (career development). In accordance with the statement pertner- Managers should link the lawyer, it can be concluded that the factors implementation of HRM with that affect employee’s performance are organizational strategies to improve discipline, competencies, compensation, performance, develop a corporate culture motivation, performance appraisals, and that supports innovation and flexibility. career development With the implementation of human resource management function, the quality Work Discipline of the company's employee’s performance Some previous researchers such as will increase. Employee’s performance is Thaief et al (2015), Dewi (2013), and necessary to develop the quality of the Mangkunegara and Waris (2015) have company in any way. By having good proved that discipline does have a employee’s performance quality, the significant effect on employee’s company can achieve its vision and mission performance. Discipline is included in easily. environmental task because according to Weinberg (1992), the employee who do not Employee’s Performance follow the rules will suffer from a loss such Performance variables are generally as their competencies will be ignored, and widely used in thesis titles, and are their production in their company will have lower quality, such as new problem, then Usually, this level of discipline will there will be increasing number of occur when the employees are complaints from customer and then it will directly faced with their boss to get create an urgency disturbance, then causes the superior’s positive attention on some huge time preasure, and ultimately it him/her. If there are no superiors in will result in a more ignored procedure than front of them, the employee’s before (Weinberg, 1992: 278-282). It discipline won’t occur. means discipline is related to time pressure (b) Identfication for some task. Disciplineis related to one of This level of discipline is based on the examples of the important value that admiration to superior. For example, might be judged as one of a good charismatic superior is exactly performance for example great attittude and respected and becomes the main behavior. Discipline is a tool used by the identification. Then, the employee manajer to communicate with employees so will make their charismatic leader as that they are willing to change a behavior as the example for the discipline to well as an effort to raise awareness and the occur. If this “main identification” willingness of a person to obey all company leaves the company or organization, regulations and prevailing social norms. work discipline will decrease and the According to Appelo (2011:186), infraction will increase. Discipline is one of the important elements (c) Internalization for the competencies. The function of the This level of discipline will always discipline from all perspective is similar. occur if the employees have their own value of discipline in their Work descipline is the personality. They depend on nobody. professionalism attittude that any kinds of This level of discipline has already company must add as its culture. If the been planted in their own mind as company can make a new behavior such as their principle. discipline for its employee, not just for (2) Environmental Factors itself, the company might be able to Discipline is also formed from the increase its performance. Moreover, work someone’s interaction with discipline might be one of the reasons environment, especially social underlying why an employee has a good environment. A high work discipline work performnce. is not directly develop, but it is According to Kurt Lewin formula (in formed by continued learning Helmi, 1996:37-38) there are two factors process. Disciplinary will strighten that might influence the work dicipline: up some group life together, then it will make the relationship of the (1) Personality Factors group is binder up peacefully Personality factors that influence the between individual to other discipline is like the employee’s individual. principle. Employees must have the High work discipline does not just value of their own principle to appear, but it is a process whereby develop their discipline from individuals are required to learn themself. According to Kelman (in continuously. In order to be effective, Helmi, 1996:37), there are three leaders need to play a role in observing the levels of mentality change in learning process and also need to pay someone’s attittude, namely: attention to consistent, fair, positive, and (a) Obedience open principles. This level of discipline is based on the principle of “afraid” of superiority. Compensation of what other employers are paying) to Acording to Dessler (2014:275), monitor and maintain external equity. They Employee’s compensation includes all use job analysis and comparisons of each forms of pay going to employees and job (“job evaluation”) to maintain internal arising from their employment. It has two equity. They use performance appraisal and main components, direct financial incentive payment to maintain individual payments (wages, salaries, incentives, equity. And they use communications, commissions, and bonuses) and indirect grievance mechanisms, and employee’s financial payments (financial benefits like participation to help ensure that employees employer-paid insurance and vacations). view the payment process as procedurally The compensation plan should first advance fair. Some firms administer surveys to the firm’s strategic aims that is why monitor employees’ payment satisfaction. management should produce an aligned reward strategy. This means creating a total Job Evaluation Method is a formal pay package that produces the employee’s and systematic comparison of jobs to behaviors to the firm needs in supporting determine the worth of one job compared and achieving its competitive strategy. We to another. Job evaluation aims to will see that many employers formulate a determine a job’s relative worth. Job total rewards strategy. Total rewards evaluation eventually results in a wage or encompass the traditional pay, incentives, salary structure or hierarchy (this shows and benefits, but also things such as more the payment rate for various jobs or challenging jobs (job design), career groups of jobs). The basic principle of job development, and recognition. evaluation is jobs that require greater qualifications, more responsibilities, and With respect to compensation, more complex job duties should receive managers should address four forms of more payment than jobs with lesser equity: external, internal, individual, and requirements. The basic job evaluation procedural procedure is to compare jobs in relation to one another. There are six method in job (1) External equity refers to how a job’s evaluation, namely: pay rate in one company compares to the job’s pay rate in other companies. (1) Compensable Factors (2) Internal equity refers to how fair a Compensation management particular job’s pay rate is when specialists call these compensable compared to other jobs in the same factors. company. (2) Preparing for the Job Evaluation (3) Individual equity refers to the fairness The main steps include identifying of an individual’s pay as compared the need for the program, getting with what his or her coworkers are cooperation, and then choosing an earning for the same or very similar evaluation committee. jobs in the company, based on (3) Job Evaluation Methods: Ranking performance. There are several steps in the job (4) Procedural equity refers to the ranking method: “perceived fairness of the processes (a) Obtain job information. Job analysis and procedures used to make is the first step. Here job descriptions decisions regarding the allocation of for each job are prepared, and the payment. information they contain about the job’s duties is usually the basis for Managers use various means to ranking jobs. address these four equity issues. For example, they use salary surveys (surveys (b) Select and group jobs. It is usually not which enable the employee to work in a practical to make a single ranking for given context. Organizations have sought to all jobs in an organization build competence models to identify key (c) Select compensable factors. In the competencies that organizations need to be ranking method, it is common to use more competitive and successful in the just one factor (such as job difficulty) future. Organizations benefit from the use and to rank jobs based on the whole of competence because it gives them a job. better and more sophisticated way to (d) Rank jobs. Give each rater a set of manage, measure, and improve employee index cards, each of which contains a quality. brief description of a job. Then they rank these cards from lowest to According to Suswardji, et al., highest. Some managers use an (2012:958), competencies as an ability to “alternation ranking method” for create a satisfying level in a work place, making the procedure more accurate such as the ability to transfer and (e) Combine ratings. Several raters rank implement the skill and knowledge in a the jobs independently. different situation. Sutrisno (2010: 202) (4) Job Evaluation Methods: Job stated that etymologically, competence is Classification defined as the dimension of skill behavior Job classification is widely used job or the superiority of a leader or staff has evaluation method in which raters good skills, knowledge, and behavior. The categorize jobs into groups; all the definition of competence by Mc.Clelland jobs in each group are of roughly the (in Sedarmayanti, 2007: 126) is same value for payment purposes. competency is a fundamental characteristic (5) Job Evaluation Methods: Point of a person who directly affects, or can Method predict, excellent performance. In other The point method is to determine the words, competence is what outstanding degree to which the jobs you’re performers do more often, in more evaluating contain selected situations, with better results than what the compensable factors. policy assessor does. (6) Computerized Job Evaluations According to Spencer and Spencer in The evaluation committees must Prihadi (2004: 38-39) there are 5 (five) debate the level of each compensable characteristics of competence, namely: factor in each job. They then write down their consensus judgments and (1) Motives are things that people think compute each job’s point values or or want consistently that cause action. rankings. (2) Traits are physical characteristics and responses consistent with the Competencies situation or information. Every single company has a (3) Self-concept is the attitudes and competency standard to keep managing the values that a person has. employee into a zero mistake. According to (4) Knowledge, is information that a Katawneh (2014:380), competencies person has for a particular field. management is the most important and Knowledge is a complex competence known in raising the efficiency and (5) Skill is the ability to perform a effectiveness of the perforance of certain task both physically and employee. Competencies is also meant to mentally. know the positive thing reflected on the overall performance of the organization. Hence, competencies can be linked to Competencies represent the aquired skills performance in a causal flow model that indicates that goals, behaviors, self- concepts, and knowledge competencies that Abraham Maslow did a research then predict competency performance about the work motivation and found some including intentions, actions and outcomes. indicators for weak motivation. According to Sofyandi and Garniwa (in Sanjaya, Employee’s competence is needed by 2015:27), there are some indicators every organization especially to improve showing weak motivation namely: performance. According to Prihadi (2004: 57) the benefits of competence are: (1) Physiological Need This need is similar to the primary (1) Predictor of work success. An need of a human being such as food, accurate competency model will be drink, place to live, oxygen, sleep, able to determine exactly what etc. knowledge and skills are needed to (2) Safety Need succeed in a job. If a person holds a After physiological needs are position is capable of having the fulfilled, a person needs safety such competencies required in his position as protection from work accident, then he can be predicted to be work assurance, and old day successful. assurance after they are retired. (2) Recruit reliable employees. Once (3) Social/Love/Belonging Need successfully determined what Social need is in the form of competencies are required for a friendship, alliance, and interaction particular position, it can easily be with other people. In some used as the basic criterion in the organization, social need is like recruitment of new employees unified work groups, good (3) Basic assessment and employee’s supervision, vacation together, etc. development.Accurate identification (4) Esteem/Achievement Need on job competence can also be used This need is needed if one want to be as a measurement of one's ability. resepected as a person for the Thus, based on this competency achievement, skills, abilities, and system it can be known whether work effectiveness which are not someone has certain competence, owned by other people . how to develop it using training and (5) Self-actualization Need coaching or he needs to be mutated This necessity means daily to other parts. necessities, such as daily necessities, Motivation food and drink, clothing to meet the Work motivation is linked with a needs of his family. work disciplinary. Work disciplinary will Maslow himself had considered this create motivation to do a good performance need to have the highest hierarchy. Self- when doing some assignment. According to actualization is realized in the development Sanjaya (2015:26), motivation is to teach process of real potential from someone. how to push work enthusiasm so we can Self-actualization need can increase one’s mobilize our skill and ability that we have potential because other person gives his/her to reach our goals. Some individuals have ratio of the attitude. Some individuals have strong urge to success. They usually do a strong need and wants to reach their goals. more struggle to reach the individual goals Some individuals also have many different rather than getting the achievement. kinds of motivation to push themself into it. Motivation is also the activity of causing, Work motivation is something or anything distributing, caring, and pushing the human that could push the employee so they can do behavior (Reza 2010:18). what their best for the company. It might also be concluded as reciprocal for the Discipline, Competencies, and employee. Compensation The researcher decided to choose Performance Appraisal discipline, competencies, and In every organization, Human compensation as independent variables Resources is a vital thing that could affect towards the employee’s performance the company performance. If employees in because the independent variable is more the organization are happy, they will do specific, as mentioned above in their best for the organization. That is why, "performance appraisal". Researchers it is very important to manage human found that performance appraisals were resources. The organization strives to assessed on a range of issues, such as work satisfy and support its employees to get the ability, discipline, employment relations, best results.Performance appraisal is one of initiative, leadership and specific matters the main functions of HR management. corresponding to occupied occupations. Employees with the whole organization That means, discipline is included in the will work better when their performance is assessment of employee’s performance to assessed.If there is no assessment of develop employee’s performance. employee’s performance for their good performance, then they will not do it again Compensation is also one way to in various jobs increase employee’s motivation. So, the compensation is going to be the one of the Performance appraisal is an things that could improve the employee’s assessment of the real work with the quality performance through their motivation. standards and quantity produced by each Therefore, the researcher wonders whether employee. Performance appraisal of the compensation that has been applied at employees absolutely must be done to the company is enough to increase the know the achievements that can be motivation and give effect to the achieved by each employee. Performance performance of employee’s in the appraisal is important for every employee company. Compensation is also included in and that is useful for the organization to carer development to improve the make decisions and establish further policy employee’s performance. actions. Not just compensation, the Career Development competencies is also one of the career Oduma and Were (2014) stated that a developments that becomes an important leader who expects maximum performance thing to develop the performance of the in his organization should pay attention to employees. According to the previously factors affecting the employee's own mentioned theory, Career Development is performance. One of the factors is career one of important factors in achieving an development. Career Development is one employee’s job satisfaction. With career of important factors in achieving an development, someone can foster an employee’s job satisfaction. With career employee's ability to work better. That development one can foster an employee's means, before the career development ability to work better. occurs, the manager must motivate the Career development is needed for employees to improve their ablity or skill in every employees in the course of their the workfield. Then, the manager can take working life. With the career development, the performance evaluation for some the employees will get material satisfaction periode of time to approve the employee’s such as facilities, salary increases, work performance. Ultimately, manager allowances and non-material satisfaction can decide if he will improve the employees such as feelings of pleasure, pride and etc. career or not. This is also supported by previous Therefore, the independent variables research that has been done by some namely discipline, compensation, and researchers such as Thaief, et al., (2015), competencies are considered as the specific Dewi (2013), Mangkunegara and Waris important factors that can develop the (2015), and Ramzan et al (2014). These employee’s performance, and the present researchers have stated that discipline, researcher wants to apply that theory to a compensation, and competence have a big company such as PT Petrokimia Gresik significant influence on employee to prove whether discipline, competencies, performance. Therefore, that is why the and compensation affect employee’s independent variables namely discipline, performance or not. compensation, and competencies are considered as the specific important factors Hypothesis that can develop the employee’s According to Sugiyono (2008:63), performance, and the researcher wants to hypothesis is a temporary answer to the apply the theory to a big company such as formulation of problems. Before analyzing PT Petrokimia Gresik to prove whether the aquired data, the theory from several discipline, competencies, and books and previous research combined as compensation affect employee’s hypothesis will help to analyze data further. performance or not. Based on the problems, there are some hypotheses model of this research: AMO Theory In addition, there is a conceptual theory called Ability, Motivation, and Discipline (X1) Opportunity (AMO) theory that is related to H1 discipline, compensation, and competencies that is oftenly used in Employee employee performance research. According Compensation (X2) H2 Performance to Gerhart (2005: 175), HRM practices will (Y) affect the people’s ability (appropriate H3 selection, hiring, training instruments), Competencies (X3) motivation (pay for performance such as H4 compensation), and opportunity (opinion or suggestion, teamwork systems) to Source: Researcher, 2017 contribute to firm performance. Figure 2.2. Hypothesis Model According to a research conducted by Bos-Nehles, et al., (2013), the use of AMO Discipline is needed in every theory is based on the formula companies to increase the quality of P=A+(AxM)+(AxO) as an hypothesis. In employee’s performance in every important this case, only ability will have an sector such as production department that independent and direct positive effect on might produce a good quality product. The performance. The result showed that maintenance of disicipline culture might motivation and opportunity had no direct impact the company’s condition at the significant effect on HRM implementation future. According to the several previous effectiveness. Motivation would become a research, it can be seen that discipline has a substitute of ability. If a line manager is positive effect on employee’s performance. able to perform well, motivation will add nothing except the expense of making him Some researchers such as Dewi (2013), motivated. Mangkunegara and Waris (2015), and Thaief et al (2015) have proven that discipline and compensation provide a positive impact on employee’s related to descipline, competence, performance. The previous researches compensation, and their relationship to suggest that timeliness is important to employee performance in the company. improve the dicipline of employees, Therefore, the researcher used some of the because if the employees finish their job question as a pronouncement form that is according to the time that has already been related with four variables. set (timeliness) the company’s quality Object might improve in all sector. Therefore, the Object of research is the underlying first hypothesis is: of a study based on the study and the same conditions of the purpose of this study. The H1: Discipline has positive effect on research object in this study is discipline, employee’s performance compensation, and competence in H2: Compensation has positive effect employees of PT Petrokimia Gresik. The researcher chose PT Petrokimia Gresik on employee’s performance because PT Petrokimia Gresik has the H3: Competencies have positive effect largest number of permanent employees on employee’s performance compared to all subsidiaries of PT Pupuk H4: Competence has a dominant effect Indonesia. By having many employees, the on employee’s performance company can represent a key problem in this research. The company can also RESEARCH METHOD represent other state-owned fertilizer Type of Research companies because it has the largest This study is an Explanatory number of employees. This is based on PT Research with quantitative approach or Pupuk Indonesia annual report which can survey method. According to Creswell be seen on Table 3.1. (2009:145), quantitative method or usually called survey method is a data that provides Table 3.1. The Total of Permanent numeric of trends, attitudes, or opinion that Employees of Each Subsidiary of PT Pupuk is studied from the population. In Indonesia. quantitative approach, the researcher tests Company’s Name The Total of Permanent Employee some theory by specifying the hypotheses and collecting data that are similar to the PT Petrokimia 3,173 topics to support the hypotheses. the design Gresik of a survey method uses standard format. PT Pupuk Kujang 1,154 there are so many examples that the Cikampek researcher can find on things related to the PT Pupuk 2,150 design of survey method in scholarly Kalimantan Timur journals, and from those journals there are so many useful type of research. PT Pupuk Iskandar 656 Muda Explanatory research is a research that often appeals to researches with many PT Pupuk Sriwijadja 2,364 quantitative approach. This is typically Palembang using explanation to explain quantitaive Source: PT Pupuk Indonesia Annual Report, 2016. results by collecting and analyzing qualitative data (Creswell, 2009:211). Population According to Sekaran and Bougie This research uses questionaire for (2013:240), population is the entire group, the main data collection tools. The event, or things that have related with the researcher used questionaire to study the topics for the researcher that the researcher population and to get the information want to find out. Population is a whole 3,173 푛 = object or subject such as people, animal, 1 + 3,173 (0.1)2 events, or anything that could have relation with the researcher topics. In this study, n = 96.9 or 97 researchers want to know the discipline, Then, to determine the size of the compensation, and competence of all sample in each position is done by employees, except employees who have a proportional allocation so that the samples manager position, because the taken are more proportional in the questionnaire items from this study is following way: related to the opinions of respondents to the 푛 푠 = × 푆 manager. Therefore, the population in this 푁 study are all employees of PT Petrokimia Which: s = Total sample for each position, Gresik who have the position of executants, n = Total population for each position, N = Grade V (Junior staff), Grade IV Total population, S = Total sample. (Intermediate staff) and Grade III (Division staff). The total population for this study The level of organization in PT was 3,173 employee. Petrokimia Gresik consists of six grades, namely Grade I (General Manager/Primary Sample Staff ), Grade II (Manager/Secondary Staff Sample comprises several groups ), Grade III (Division Head/Senior Staff ), selected from population. Sugiyono (2008: Grade IV (Secti tion Head/ Intermediate 81) argued that the sample is part of the Staff ), Grade V (Head Team/Junior Staff number and characteristics possessed by the ), and the Executants. However, since the population. This research uses probability sample targets of this study were staff under sampling technique which is proportionate the manager, the sample was selected from stratified random sampling. Propotionate grade III, grade IV, grade V, and stratified random sampling is done by executants. Thus, the total sample for each dividing the population into subpopulations position to be proportional can be / stratum proportionally and done randomly calculated as shown on Table 3.2 (Sekaran and Bougie 2013: 248). Sampling technique with proportionate stratified Table 3.2. Calculation of the Sample random sampling is done by collecting data Number of each Level of Position on the number of employees from each No Level of Populatio Calculatio Samples . Position ns n (employee section which then determined the number (employee s) of samples required for each section. The s) sample size of this study is determined by 217 1. Grade III 217 푥 97 = 7 3,173 the slovin formula. 6.6 푁 2. Grade IV 781 781 푥 97 = 24 푛 = 2 3,173 1 + 푁푒 23.8

3. Grade V 910 910 푥 97 = 28 3,173 Which: n = Total Sample, N = Total 27.8 Population, e = Error level (usually 1% or 0.01, 5% or 0.05, and 10% or 0.1) (notes: it 4. Executant 1,265 1,265 푥 97 = 39 s 3,173 can be selected by the researcher) 38.6

The population in this study is 3,173 Total 98 Source: PT Petrokimia Gresik, 2017 employees and the precision of the errors set is 10% or 0.1. then the sample size in this research are: Research Timeline variable more measurable in a tangible way. This research was conducted on May, The independent variables used in this 2nd 2017 until May, 31st 2017 at PT research are Work Discipline (X1), Petrokimia Gresik. This research used compensation (X2), Competencies (X3), cross-section timeline. According to Olsen and Employee Performance (Y) as a and St. George (2004:7), cross-sectional dependent variable. study aims to select the whole population, and from each individuals the data are Independent Variable collected to support the data questions of The independent variables are interest. Cross-sectional study has the variables that could affect the dependent information about X and Y that is collected variable represents what happens at only one poin in 1. Work Discipline (X1) time. It might be done to determine the According to Thaief, et al., (2015:27), relationship between dependent and it refers to a behavior and attittude of independent variables. the employee to comply with This module will use the term cross- applicable regulation and to set the sectional study to determine that there are organization to make it based on the some cause and consequences between self-awarness. Work discipline has descipline (X1), compensation (X2), and four indicators, namely: competencies (X3) towards the employee (1) Frequency of attendance at the office performance (Y) and using the questionaire on weekdays as well as the accuracy to collect the data that is used to ask of the clock in and go home question of the research participant. (2) Compliance with applicable regulation Data Collection Method (3) Attendance to prescribed standards of The data collected are mostly from work questionaire. Questionaire is data collection (4) The work ethic of employees in the method that is conducted by distributing company. some questions that are related to the topic These four indicators will be the to the respondent or population knowing elements for the questionare to do this about the topic. Questionaire is research. preformulated written list of question that 2. Compensation (X2) respondents can write their answer. The Based on the Thaief, et al., (2015:26), questionnaire was chosen because it is an compensation is a form of reward or efficient data collection mechanism to payment provided by the company know exactly what is needed and how to to give the encouragement to the measure research variables. Therefore, employee directly or indirectly. There using questionaire is cheaper and it is not are five indicators that can become time consuming.The questionaire uses the element for the questionaire. They Likert scale which has 5 answer are: preferences, namely: 1 = Strongly disagree, (1) Salary is the remuneration received 2 = Disagree, 3 = Neutral, 4 = Agree, 5 = by employees periodically in the form Strongly Agree of money based on the standard that is already determined by the company Operational Definition and Variable (2) Additional remuneration is granted Measurement to the employees as a form of salary According to Sekaran and Bougie related to the performance that is (2013:200), operational definition or more than the standards and it is a usually called operationalizing is a tool to motivate the employee. reduction of a raw concepts to make the (3) Protection is a system of 3. Quality of work: It aims to know compensation in the form of the standard quality of the achievement. It can be done by assignment whether it has already providing a sense of security, such as fitted with the employees’ skill and terms of financial, health, physical ablity or not. safety (insurance, retirement, etc). (4) Facility awarded to the company in Based on the definition of the above the form of material thing such as variables, we know that there are many transportation and house provided by factors or indicators in each variables. Each company. variables have several indicators that 3. Competencies (X3) representing each variable as the factor that According to Katawneh and Osman influenced the dependent variable. (2014), to measure compensation, Therefore, the indicators can be the researcher must consider the summarized as in table 3.3 below. following things:

(1) The level of the employees assignment. The assignment given by Table 3.3. Summary of Variables and the employee might influence their Indicators of the Research skill improvement or not. Variables Indicators Source Frequency of (2) The difficulties of the employees attendance assignment. Employees might feel (X1.1) that they have controlled their Work Compliance with Discipline applicable assignment by themself or still (X1) regulation depends of the group for one (X1.2) assignment. Attendance to Ilham, et prescribed al,2015 (3) Manager control. The employee must standards of work give the report about their assignment (X1.3) progress to the manager or not. The work ethic of employees in the (4) Job Evaluation. The managers or the company superiors give the evaluation for their (X1.4) subordinate’s work in each of certain Salary period. (X2.1) Compensation Additional Ilham, et (X2) remuneration al,2015 Dependent Variable (Y) (X2.2) The dependent variable of this Protection (X2.3) research is Employee Performance. Facilities According to Thaief, et al., (2015:27), (X2.4) measurement tools that the researcher used The level of the for this dependent variable are: employees assignment Competencies (X3.1) Katawneh 1. Timeliness: to measure the things (X3) and Osman, related to time working to finish Job Evaluation 2014 employees assignment. For (X3.2) example, the employees need to add sometime to finish their assignment. The difficulties of the employees 2. Quantity of work: It aims to know assignment whether employees total assignment (X3.3) are already appropriate with their ability and the facilities that are Manager control given by the company. (X3.4) Variables Indicators Source The calculation of the validity uses the Timeliness (Y1) product moment formula: Employee Quality of Work Ilham, et al, Performance (Y2) 2015 풏(∑ 풙풚)− (∑ 풙 ∑ 풚) (Y) 풓 = Quantity of Work √{풏 ∑ 풙ퟐ− (∑ 풙ퟐ)}{풏 ∑ 풚ퟐ − ∑ 풚ퟐ} (Y3) Source: Researcher, 2017. Which: r = The correlation coefficients of Data Analysis Method independent and dependent variables, n = According to Reza (2010:33), before Total of sample, X = Item score, Y =Total performing data analysis, it is necessary to score. do engineering stages data processing such The validity or invalidity of an item as editing, coding, scoring, and tabulating. can be determined by comparing the Editing is a process of checking and correlation index of products with a adjusting what is obtained in a research data significant level of 5%. The instrument is to facilitate the process of coding and data declared as an invalid if the probability of a processing with statistical techniques.After correlation result is above 0.05 (5%), but editing, giving marks in the form of the instrument is valid if the coefficient numbers on the answers of the value between items with item number has questionnaire is done. After that, it is a significant level below or equal to 0.05 continued by grouping the data into the (5%). The instrument validity test is same category if it is necessary. The coding performed by calculating the correlation goal is to simplify the answer. Then, it is between the instrument response score and continued by changing the data that is the total score of the instrument. In this qualitative in the form of quantitative. In research, testing the validity of items of this case, researcher used Likert scale in the each variable was conducted by using research questionaire which means score of SPSS. 5 is awarded for a strongly agreed answer, score of 4 is awarded for the agreed answer, Reliability Test score 3 is awarded for a neutral answer, A research can be declared as reliable score 2 is awarded for the disagree answer, if there are similarities of data in different and score of 1 is entitled to a strongly time periods. Reliability is the term used to disagree answer. show a measurement result that is relatively After the data from the questionaire consistent when the measuring instrument are processed, there are several test done by is used repeatedly.A reliable measuring tool the researcher to make this research more is a measuring tool that can measure a reliable. In other words, these test are called symptom at different times while still as research instruments which include: showing consistency of results. According validity test, reliability test, classical to Arikunto (in Aftika, (2012:45) too test assumption test, multilinear regression test, the reliability, Cronbach Alpha Formula can be used: and hypothesis test. 2 푘 ∑ 푠푖 푟 = 푥 {1 − } Validity Test 11 푘 − 1 푠2 Validity test is used to measure the 푡 validity of a questionnaire. According to

Ghozali (in Reza, 2010), a questionnaire is Which: r11 = Reliability of the Instrument, said to be valid if the question on the k = Questions, Si = Number of grain questionnaire is able to reveal something variance, St = Variance total. that will be measured by the questionnaire. If the research variable has Cronbach In this case some questions are used to Alpha which is greater than 60% (0.06) accurately reveal the measured variable. then the variable is said to be reliable. On To detect the presence or absence of the other hands, if Cronbach Alpha is less heteroscedasticity, then the following basic than 60% (0.06) then the variable is said to analysis is used: be unreliable. SPSS is used to determine the value of reliability of this research. (1) If there is a certain pattern, such as Classical Assumption Test certain points that exist and form a Prior to testing multiple linear regular pattern such as waves, widen regression analysis of the research then narrowed, it means hypothesis, it is necessary first to perform a heteroscedasticity occurs. test of classical assumptions. The classical (2) If the pattern is not clear, as well as assumption test is a way of knowing dots spread irregularly above and whether the regression model obtained can below the number 0 on the Y axis, produce a good linear estimator. In this then it occurs homocesdasticity study, the classical assumption test use Multicolinearity test normality test, heteroscedasticity test, and According to Ghozali (2006: 91), the multicolinearity test. function of multicollinearity test in the regression model is to find out the Normality Test Normal distribution is a continuous correlation between independent variables. distribution which requires that the If there is a correlation, then there is a measured variable be continuous. problem called multicolinearity. In this Normality test aims to test whether in a case, a good regression model should not regression model, the dependent variable, have multicolinearity on its independent independent or even both variables have a variable.To know the existence of normal distribution or not. Normality multicollinearity in this research, the testing is performed to find out a normal method used is Tolerante and Variante distributed data or not. In this study, the Inflation Factor (VIF). Multicolinearity is researcher used Kolmogorov-Smirnov test detected in independent variables when with the following guidelines: VIF> 10, but there will be no (1) H0 is accepted if the p-value is in multicolinearity when VIF <10. the Asimp.Sig (2- tailed)> level of Multiple Linear Regression significant (α = 0,05) column; therefore, Hα is rejected. Regression Equation (2) H0 is accepted if the p-value value This model is used to know the in the Asimp.Sig (2-tailed) column influence of independent variable to

푟√푛−2 푡 = √1−푟2 UREA, ZA, SP-36, NPK-Phonska, DAP, Which: t = Tcalculation which is then NPK Kebomas, ZK and organic fertilizer compared with ttable, r = Partial correlations produced by Petroganik. The company that already found, n = Total Sample. also produces non-fertilizer like Sulphate Acid, Phosphate Acid, Ammonia, Dry Ice, Testing is done by comparing tcount Alummunium Floride, Cemment Retarder. and ttable with significance level t, 0.05 (5%) and at degrees of free degrees df = n-k-1. If Safety, health, and environmental conservation in every operational activity is tcount> ttable, then the independent variables significantly influence partially to the the priority concern of PT Petrokimia Gresik. This is because this company is a dependent variable. But, if tcount

Table 4.1. The Characteristics of Tabel 4.2. The Characteristics of Respondents Based on Gender Respondents based on Education Gender Frequency Percentage Total Perce No. Education Respondent ntage Male 92 82.14 ( Respondents ) ( % ) Female 20 17.85 1 Junior High Scool 8 7.14 2 Senior High School 78 69.64 Total 112 100 3 Diploma 3 2.67 Source: Primary data processed, 2017. 4 Undergraduate 20 17.85 Based on the table 4.1 above, it can be 5 Post Graduate 3 2.67 seen that the number of male respondents is Total 112 100 92 respondents or 82.14%, while the Source: Primary data processed, 2017. number of women respondents is 20 respondents or 17.45%. The percentage Based on the table 4.2 above, it can be indicates that the dominant respondents seen that the respondents with high school obtained by the researcher is male graduates are the most dominant respondent respondents. This is reinforced by the fact in this study with 78 respondents or that the availability of production 69.64%. Most employees with high school directorate is larger so it requires more male graduates are placed in the production employees. directorate. High school graduates are considered sufficiently qualified in the production directorate and ready to be placed in the operations of each production have already work for 1-5 years is as many in the company. Directorate of production as 48 respondents or 42.85%. Meanwhile, is also filled by employees with Diploma the employees who have worked for 6-10 graduates. The diploma chosen by this years is 45 respondents or 16.96%, and company is mostly graduated from there are 19 respondents or 16.96% have Chemical Engineering, because it is known worked for 10-15 years. The data above that most of PT Petrokimia Gresik's show that the researchers get respondents production is always related to chemistry. who mostly work from 1-10 years. By There are 3 or 2.6% respondents from looking at the percentage above, it indicates diplomas. that the selected respondent is enough to represent the new employee and the old Undergraduate respondents are 20 employee. respondents or 17.85%. The company gives the undergraduate position into at least The Characteristic of Respondent Based junior staff, as graduates are considered on Level of Working Position mature in theory and practice. Post According to researcher, there are Graduate respondents are 3 or 2.67% six working position of the company that respondents. For post-graduates, the become the research consideration. The company puts them into a position of at table 4.4 shows The Characteristic of least a youth staff. Post-graduates are Respondent Based on Level of working considered capable of generating many new position ideas based on theory and able to make strategies to compete with other companies. Table 4.4. Characteristics of Respondents Therefore, it can be said that this company based on Level of Working Position Level Respondent Perccentage has a good recruitment qualification. (%) The Characteristics of Respondents Grade III 8 7.14 Based on Tenure Grade IV 29 25.89 The length of work is categorized as Grade V 32 28.57 the respondent's characteristic to know how Executants 43 38.39 long he/she works in the company, and Total 112 100 from that duration the researcher can Source: processed Primary data, 2017. determine the experience gained by each Based on the above characteristics, individual employee. The data on the level of workers at PT Petrokimia characteristic of respondents based on Gresik which is selected as the sample is working length can be seen on table 4.3 grade grade III, IV, V, and executants. below: Grade III was chosen because the level was just below the manager level, while the Table 4.3. The Characteristics of researcher did not target the sample for the Respondents Based on Tenure manager. These levels are levels that Duration Total Percent No. Respondent age perform tasks under the manager, comply (Respondents) ( % ) with the rules set by the company, and get 1 1 – 5 Year 48 42.85 compensation from the manager. 2 6 – 10 Year 45 40.17 Level executants do have a large 3 11 – 15 Year 19 16.96 number of employees because these Total 112 100 fertilizer and chemical companies require many types of field workers. The field Source: Primary data processed, 2017. worker means that those workers are Based on the table 4.3 above, it can be mentally and physically ready to work seen that the number of respondents that directly in a factory, such as the production department, because the production instrument. An instrument is said to be department of employees is required to valid if it is able to measure what it wants spend more energy than other departments to measure or can disclose data from the and the risks that will be faced is very variable being studied appropriately. The dangerous considering this company is a low validity of the instrument indicates the company in the field of fertilizer and extent to which the data collected does not chemistry so that workers must have a high deviate from the description of the variable accuracy and must be extra careful. Thus, in question. the percentage indicates that the respondents obtained are sufficient to Validity testing can be done by represent each position in the company. correlating each factor or variable with the This is reinforced by the sample in this total factor or variable by using correlation study which states that 97 samples are (r) product moment. The test criteria for sufficiently representative with a 10% error accepting or rejecting the hypothesis of a rate. (it can be seen on Table 3.2 Chapter 3) valid statement or not can be done by: H0: r = 0, there is no valid data at Error level Research Intrument test (α) 5%. The questionaire must be examined by two methods. The condition whether or H1: r ≠ 0, there is valid data at Error level not the response is reliable depends on data (α) 5%. collection. Good data collection The null hypothesis (H0) is accepted when instruments must meet two important r < r , and vice versa alternative requirements that are valid and reliable. count table hypothesis (H1) is accepted when rcount> Validity Test rtable. Validity test is used to measure the Validity testing conducted by SPSS validity of a questionnaire. If the ver program. 20.0 by using the product questionnaire is able to help investigate and moment correlation yields the score of each reveal something in detail, then the item statement with the item question score questionnaire is valid. Neuman (2014:212), as a whole and for more details it is stated the meanings of validity as follows: presented in the following table “Validity is to show the true state and refers Table 4.9. Validity Test of Variable to the conformity between constructs, or the r way a researcher conceptualizes ideas in Item r Test Sig. Table Explanation conceptual definitions and a measure. This X1.1.1 0.697 0.000 0.3 Valid refers to how well the idea of reality "matches" with the actual reality. In simple X1.1.2 0.562 0.000 0.3 Valid terms, validity addresses the question of X1.2.1 0.790 0.000 0.3 Valid how well the social reality is measured X1.2.2 0.797 0.000 0.3 Valid through research in accordance with the constructs that researchers use to X1.3.1 0.714 0.000 0.3 Valid understand it.” X1.4.1 0.778 0.000 0.3 Valid

Testing of validity is needed in a X2.1 0.787 0.000 0.3 Valid study, especially those using questionnaires X2.2 0.740 0.000 0.3 Valid in obtaining data. Testing validity is meant X2.3 0.738 0.000 0.3 Valid to know the validity of understanding the validity of the concept and empirical X2.4 0.793 0.000 0.3 Valid reality. Validity test is a measure that shows X3.1.1 0.679 0.000 0.3 Valid the validity and validity levels of an r is repeated or recurs under the identical or Item r Test Sig. Table Explanation very similar conditions. " X3.1.2 0.688 0.000 0.3 Valid X3.1.3 0.671 0.000 0.3 Valid Reliability testing technique is to use coefficient score of alpha reliability. X3.2.1 0.611 0.000 0.3 Valid Criteria of decision-making is if the score X3.3.1 0.551 0.000 0.3 Valid of the coefficient of alpha reliability is greater than 0.6 then the variable is reliable. X3.3.2 0.637 0.000 0.3 Valid

X3.3.3 0.775 0.000 0.3 Valid Table 4.10. Reliability Test of Variabels No Variabl Reliability Explanati X3.4.1 0.603 0.000 0.3 Valid . e Coefficient on X3.4.2 0.720 0.000 0.3 Valid 1 X1 0.787 Reliable X2 0.763 Reliable X3.4.3 0.645 0.000 0.3 Valid 2 3 X3 0.875 Reliable X3.4.4 0.706 0.000 0.3 Valid 4 Y 0.834 Reliable X3.4.5 0.590 0.000 0.3 Valid Source: Primary data processed, 2017. Y1.1 0.502 0.000 0.3 Valid From Table 4.10 it is known that the Y1.2 0.635 0.000 0.3 Valid score of cronbach alpha for all variables is Y2.1 0.745 0.000 0.3 Valid greater than 0.6. Based on the previously Y2.2 0.734 0.000 0.3 Valid mentioned provisions, all the variables used for research are reliable. Y2.3 0.736 0.000 0.3 Valid

Y3.1 0.775 0.000 0.3 Valid Classical Assumption of Regression These classical assumptions must be Y3.2 0.757 0.000 0.3 Valid tested to fulfill the use of multiple linear Y3.3 0.755 0.000 0.3 Valid regression. After multiple regression Source: Primary data processed, 2017. calculations are performed through the SPSS tool for Windows, tests of classical From Table 4.9 above it can be seen regression assumptions are performed. Test that the score of sig. r question item is results are presented as follows: smaller than 0.05 (α = 0.05) which means that each variable item is valid, so it can be Normality Test concluded that the items can be used to Normality test is performed to measure the research variables. determine whether the residual value is normal or not distributed. The test Reliability Test procedure is performed by Kolmogorov- Reliability test shows the level of Smirnov test, with the following stability and accuracy of a measuring conditions: instrument or test used to determine the extent to which the measurement is Hypothesis used: relatively consistent when re-measured. H0: residuals are spread normally This test is used to determine the extent to which a person's answers are consistent or H1: residuals are not normally distributed stable over time. Neuman (2014:212) If the sig. value (p-value) > 0.05 then explained about the reliability as follows: H0 is accepted which means normality is "Reliability means dependability or fulfilled. Normality test results can be seen consistency. It suggests that the same thing in Table 4.11. From the calculation results obtained sig. value of 0.850 (can be seen on Table 4.11) or it is greater than 0.05; Then the provision H0 is accepted that the From the test results, it shows that the assumption of normality is met. scatterplot display diagram spreads and does not form a certain pattern hence there Table 4.11. Normality Test Results is no heteroscedasticity. Therefore, it can Unstandardized Residual be concluded that the residual has a N 112 homogeneous variety (constant) or in other Normal Parameters a,b Mean .0000000 words there is no symptoms of Std. Deviation 2.26498298 Most Extreme Absolute .058 heteroscedasticity. Differences Positive .048 Negative -.058 The test is also performed with Park Kologrov-Smirnov Z .610 Test. Heteroscedasticity test results with Asymp. Sig. (2-tailed) .850 Park procedures can be seen on the Table a. Test distribution is Normal 4.12 b. Calculated from data Source: Primary data processed, 2017. Table 4.12. Heteroscedasticity Test using Park Test Heteroscedasticity Test Unstand. Stand. Heteroscedasticity test is used to find Coef. Coef. out whether there is inequality of residual B Std. Beta deviation value due to the small value of Model Error t Sig. (Const.) 6.042 3.957 1.527 .130 one of the independent variables. Or the LnX1 -.297 1.309 -.028 -.227 .821 difference in the value of variety with the LnX2 1.520 1.272 .148 1.195 .235 increasing value of independent variables. LnX3 -2.389 1.260 -.235 -1.896 .061 a. Dependent Variable: LnUR The test procedure is performed by scatter plot test. Testing homogeneity of the Source: Primary data processed, 2017. remaining variety is based on the By looking at Table 4.12, the hypothesis: following is the result of heteroscedasticity H0: homogeneous residual variety test for each variable: H1: the remaining variety is not 1. Sig value. for Discipline is 0.821 homogeneous 2. The value of Sig.for Compensation is 0.236 The results of heterocedastisity test using 3. The value of Sig.for Competencies is scatterplot can be seen on Figure 4.3 0.061 From the test results, the value of sig. all variables are > α (α = 0,05), so it can be concluded that the residual has homogeneous variety (constant) or in other words there is no symptoms of heteroscedasticity. Multicolinearity Test Multicollinearity test is done to know that there is no relationship that is very strong or no perfect linear relationship or it can be said that between independent Source: Primary data processed, 2017 variables are not related. The way of testing Figure 4.3. Heteroscedasticity Test using is to compare the Tolerance values obtained Scatterplot from multiple regression calculations, if the tolerance value <0.1 then the multicollinearity occurs. Multicollinearity Competency (X3) to the dependent variable test results can be seen on Table 4.13. that is Employee’s Performance (Y). Tabel 4.13. Multicollinearity Test Results Regression Equation Independent Collinearity Statistics Regression equation is used to know Variable Tolerance VIF the form of relationship between independent variable with dependent X1 0.610 1.639 variable. By using SPSS for Windows ver X2 0.597 1.676 21.00 obtained, regression model as in X3 0.566 1.768 Table 4.14

Source: Primary data processed, 2017. Table 4.14. Regression Equation Stand. Unstand.Coef. Coef. Based on the Table 4.13, the following is Independen t Sig. t Variable the test results from each independent Std. variable: B Error Beta 1. Tolerance for Discipline is 0.610 (Constant) 4.190 2.417 1.733 0.086 2. Tolerance for Compensation is 0.597 X1 0.226 0.102 0.178 2.213 0.029 3. Tolerance for Competencies is 0.566 X2 0.310 0.152 0.167 2.049 0.043

X3 0.339 0.054 0.524 6.274 0.000 In the test results, the overall tolerance value obtained is > 0.1 so it can be Source: Primary data processed, 2017. concluded that there is no multicolinearity Regression model used is between independent variables. standardized regression, because the data Multicollinearity test can also be used in this study is interval data done by comparing the VIF (Variance measurement using Likert scale. Likert Inflation Factor) value with number 10. If scale is used to measure attitudes, opinions the value of VIF> 10 then there is and perceptions of a person or group. In multicollinearity. The following test results standardized regression, the size of the of each independent variable: variables or the size of the answer has been 1. VIF for Discipline is 1.639 equated. The regression equation obtained 2. VIF for Compensation is 1.676 based on the Table 4.14 is as follows: 3. VIF for Comptencies is 1.768 푌 = 0.178 푋 + 0.167 푋 + 0.524푋 From the test results it can be 1 2 3 concluded that there is no multicollinearity From the above equation it can be between independent variables. Thus the interpreted as follows: assumption test of the absence of 1. B1 = 0.178, which means that multicolinearity can be fulfilled. Employee Performance will increase With all the classical assumptions of by 0.178 for each additional value of the above regression, it can be said that the X1 (Discipline). So if Discipline multiple linear regression model used in value increases 1, the Employee this research is feasible or appropriate. Performance will increase by 0.178 Thus, the interpretation of the results of with the assumption that other multiple regression analysis has been done. variables are considered as constant. 2. B2 = 0.167, which means that Multiple Linear Regression Analysis Employee Performance value will Regression analysis is used to increase by 0.167 for each additional calculate the magnitude of influence value of X2 (Compensation). So if the between independent variables, namely Compensation value increases 1, the Discipline (X1), Compensation (X2), Employee Performance value will increase by 0.167 with the that the relationship between independent assumption that the other variable is variables ie Discipline (X1) Competencies considered as constant. (X2), and Compensation (X3) with 3. B3 = 0.524, which means that Employee Performance included in the Employee Performance will increase strong category because it is in the interval by 0.524 for each additional value of 0.6 - 0.8. X3 (Competency). So if the Competencies value increases 1, the F test (Model) Employee Performance value will Testing F or model testing is used to increase by 0.524 with the determine whether the results of regression assumption that the other variable is analysis is significant or not. In other considered as constant. words, the model is suspected to be appropriate or not. If the result is Fcount > Coefficient of Determination Ftable, significant, it means that the To know the contribution of free regression analysis model is significant. variable (Discipline (X1), Compensation (X2), and Competencies (X3)) to the Table 4.16. F Test / Model dependent variable (Employee Sum of Mean Model Df F Sig. Performance) use R2 value, R2 value as in Squares Square Table 4.15 below: Regres sion 767.661 3 255.887 48.531 0.000 Table 4.15. Coefficient of Correlation and Residu Determination al 569.446 108 5.273 R Square Adjusted R R Determination Square Total 1337.107 111

0.758 0.574 0.562 Source: Primary data processed, 2017. Source: Primary data processed, 2017. Based on the Table 4.16 the value of Fcount is 48.531. While Ftable (α = 0.05; db Coefficient of determination is used regression = 3: db residual = 108) is equal to calculate the magnitude of influence or to 2,689. Because Fcount> Ftable is contribution of independent variables to the 48,531>2,689 or sig t value (0,000) <α = dependent variable. From the analysis in 0.05 then the regression analysis model is Table 4:15 obtained the results adjusted R significant. This means Fcount> Ftable, so it (coefficient of determination) of 0.562. can be concluded that the regression This means that 56.2% of Employee analysis model of the variables in this Performance variables will be influenced research are significant. by independent variables, namely Discipline (X1), Compensation (X2), and Hypothesis Testing Competencies (X3). While the remaining Hypothesis testing is an important 43.8% variable Employee Performance will part of the research, after data has been be influenced by other variables that are not collected and processed. Its main purpose is discussed in this study. to answer the hypothesis made by the In addition to the coefficient of researcher. determination also obtained correlation t Test / Partial coefficient which shows the amount of t test is used to find out whether each correlation between independent variables of the independent variables partially has a ie Discipline, Compensation, and significant influence on the dependent Competencies with Employee Performance variable. It can also be said if tcount> ttable or variables, R value (correlation coefficient) -tcount< -ttable then the results are significant of 0.758, this correlation value indicates and mean H0 is rejected and H1 is accepted. Whereas if tcount< ttable or –tcount> -ttable then Performance will experience a high the result is not significant and means H0 is increase. accepted and H1 is rejected. The result of t Hypothesis III test can be seen in Table 4.17. Hypothesis III states that competency has a positive effect on employee performance. t Table 4.17. t / Partial Test Results test between X3 (Competencies) with Y Independent Explanation t Sig. variable count (Employee Performance) shows tcount = 6,274. While ttable (α = 0.05; db residual = (Constant) 1.733 0.086 108) is equal to 1,982. Because tcount> ttable X1 2.213 0.029 Significant is 6,274 > 1,982 or sig t value (0,029) < α = 0.05 then influence of X3 (Competency) to X2 2.049 0.043 Significant Employee Performance is significant at X3 6.274 0.000 Significant alpha 5%. This means that H0 is rejected and H1 is accepted so that it can be Source: Primary data processed, 2017. concluded that Employee’s Performance Based on the Table 4.17, it obtained the can be influenced significantly by following results: Competency or by increasing Competency hence Employee Performance will increase Hypothesis I significantly. Hypothesis I states that discipline has a positive effect on employee’s performance. Hypothesis IV (Dominant Variable test) t test between X1 (Discipline) with Y The dominant test is used to find out which (Employee Performance) shows tcount = independent variables dominantly 2.213. While ttable (α = 0.05; db residual = influence the dependent variable. To 108) is equal to 1,982. Because tcount > ttable determine the independent variable that is 2.213 > 1.982 or sig t value (0.029) < α = most influence on the variable Y, can be 0.05 then the influence of X1 (Discipline) done by comparing the regression on Employee Performance is significant. coefficient (β) between variables with each This means that H0 is rejected and H1 is other. The independent variable that gives accepted so that it can be concluded that the most dominant influence on the variable Employee Performance can be significantly Y is the variable that has the largest influenced by Discipline or by improving regression coefficient. The dominant test Discipline then Employee Performance will test can only be seen from the result of increase significantly. regression equation. According to table Hypothesis II 4.14, the standardized value of beta Hypothesis II states that compensation has coefficient can be summarized on table 4.18 a positive effect on employee’s below: performance. t test between X2 (Compensation) with Y (Employee Table 4.18. Dominant Test Result Performance) shows tcount = 2.049. While Rank Variable Βeta Influence Coefficient ttable (α = 0.05; db residual = 108) is equal to 2 X1 0.178 Significant 1,982. Because tcount> ttable is 2.049 > 1.982 3 X2 0.167 Significant or sig t value (0.043) <α = 0.05 then the 1 X3 0.524 Significant effect of X2 (Compensation) on Source: Primary data processed, 2017. Employee’s Performance is significant at Based on the Table 4.18, the Competency alpha 5%. This means that H0 is rejected so that it can be concluded that Employee’s variable is the variable that has the largest Performance can be influenced regression coefficient. That is, the significantly by Compensation or by dependent variable is more influenced by increasing Compensation then Employee’s the Competence variable. The coefficient owned by the Competence variable is marked positive. It shows a direct high then it is expected that employees will relationship so that it can be concluded that work better, which the company's the better the Competence variable then the productivity is expected to increases. In more it is able to increase Employee’s addition, a good work discipline will Performance (Y). Plus, competence has a increase the efficiency time of work as coefficient value of 0.524. According to much as possible, not spending a lot of time Pearson Correlation, the correlation value for the company to just improve the aspect between 0.41-0.70 has a strong correlation. of the discipline and time can be used to That means, the competence variable has a achieve company goals. strong corellation to employee performance in this research. This result is also supported by Mangkunegara and Waris (2015) research. Research Result Discussion They noted the same thing that discipline This study aims to determine the has an effect on employee’s performance. effect of discipline, compensation, and They found that well-implemented competence on employee’s performance. discipline will positively affect employee’s Based on the results of this study, it was performance in PT Asuransi Bangun found that most employees' performance is Askrida. These things prove that work influenced by discipline, compensation, discipline is one of important factors to and competence as much as 56%, while the improve employee’s performance. rest is influenced by other factors such as Thaief, et al., (2015:27), work motivation, performance appraisal, and discipline has four indicators, which are career development. related with work on time, regulations, Influence of Discipline Towards attendances, and work ethics. Based on Employee Performance result of this study, it can be said that PT The result showed that work Pterokimia Gresik already have a good discipline variable positively affects the regulation and rules for employee based on performance of employees. This result is respondents. Hence, with good work relevant to research conducted by Thaief, et discipline of employees such as coming on al., (2015) who conducted research on the time, carrying out work appropriately, and influence of training, compensation, and obeying the company's rules, the company work disipline to employee’s performance will be able to improve the performance of of PLN Malang. According to employees to compete with the other local and foreign fertilizer company so that the Work descipline is the company can survive in higher competition. professionalism attittude that any kinds of company must add as its culture. Discpline Influence of Compensation Toward is included in environmental task because Employee Performance according to Weinberg (1992: 278-282), The result show that employee the effects of the employees who do not performance can be influenced follow the rules are ignored competencies, significantly by Compensation or by lower quality of produced product, new increasing Compensation then Employee’s problem trigger, customer complaints, Performance will experience a high urgency disturbance, huge time preasure, increase. and ultimately it will result on more ignored Compensation is one factor that can procedure than before. affect employee performance. According to Working Discipline aspect greatly Dessler (2014: 275), employee affects the company's performance. When compensation covers all forms of payment the level of a company's work discipline is given to employees as a result of their work. That means, the compensation should be well planned and balanced with what the increasing Competencies hence Employee employees want and the needs of the Performance will increase significantly. company. The compensation plan should first advance the management of the This is supported by the research that company in which the firm should produce has been done by Dewi (2013) stating that a balanced reward strategy among the competence has a significant influence employees. That way, employees can on employee performance that has been improve their performance with a fair investigated. According to her, the compensation policy and also not harm the company must provide training in company. This means creating a accordance with the work that is done now compensation policy that results in so that if the employee is more competent employee behavior requires companies to in the work then the performance will support and achieve their competitive increase. strategy. According to Katawneh and Osman Thaief, et al., (2015) conducted a (2014:380), management competencies is relevant research with entitled “the effect of the most important and known in improving training, compensation and work discipline the efficiency and effectiveness of the towards employee job performance in PT performance of employee. Competency is PLN Service Area and Network in Malang. also important to know the positive thing This research showed that companys need reflected on the overall performance of the to pay attention to the appropriate salary, company. Competency represents the the suitability of work given, the expertise, aquired skills which enable the employee to the right to provide employee benefits, and work in a given context. Organizations have the employer-employee relationships, as all sought to build competence models to of these will encourage the creation of work identify key competencies that discipline and work motivation to improve organizations need to be more competitive the performance of employees. and successful in the future. Organizations will get benefit from the use of competence A compensation indicators includes because it gives them a better and more salaries, additional remuneration, sophisticated way to manage, measure, and protection, and facilities (Thaief, et al., improve employee quality. 2015). Based on result of this research, PT Petrokimia Gresik have a good four Based on four indicators namely the indicators of compensation according to the assignment’s level and difficulties, respondent. Therefore, the company needs manager control, and job evaluation to monitor and evaluate the compensation (Katawneh and Osman, 2015). According policy that has been applied in the to this study, PT Petrokimia Gresik has a company, because according to employees good arrangement of the competencies to the compensation affects their performance. their employee according to respondents. With the consistency of a good Thus, the company is just need to improve compensation given by a company, the the competence of employees by applying company is able to survive in market certain treatment done by managers to competition and is able to compete with employees, and consider the level of foreign companies. difficulty in the work given to the employee manager employees so that the performance Influence of Competencies Towards of employees of a company can increase Employee Performance and the company is able to compete with The result shows that Employee foreign companies considering the Performance can be influenced activation of the AEC policy. significantly by Competency or by The Competency has Dominantly Based on the results of this study, affected the Employee’s Performance companies need to maintain a culture of Based on the research result above, discipline that has been applied to this day. descipline, compensation, and competency Discipline can be started from the accuracy have significant effect for the employee’s of coming to work, frequency of attendance performance. According to dominant test, at the office on weekdays as well as the competencies has the highest tcount, which work on time and go home, compliance means that competencies has the most with applicable regulation, attendance to dominant effect on employee performance. prescribed standards of work, and the work This condition indicates that the ability of ethic of employees in the company. In employees is very decisive for the accordance to Mangkunegara and Waris achievement or the work that has been (2015) study, it is suggested that companies determined. should increase the sense of responsibility to their employees in their work so that This is also supported by research employee’s performance can increase. from Fadillah, et al., (2017) and Vertasari and Zunaidah (2014). Fadillah, etall., The compensation given to the (2017) states that competence is much more employees is quite good to date such as dominant than discipline. Then, Vertasari bonuses given, facilities from the company, and Zunaidah (2014) states that competence security guaranteed by the company, and has a far more dominant influence than employee salary standards in Gresik. compensation. Based on the statements of Companies are required to maintain what both researchers, it can be said that the has been given to their employees, because influence of compensation is very large on it affects the performance of company the performance of employees rather than employees significantly. Thaief, et al., discipline, and compensation. (2015) suggests that compensation is expected to increase in several ways, such A company should consider that as fair and equitable remuneration competence is the main factor affecting compliance, benefiting from salary employee’s performance. The more increases, additional incentives for employees with high competence, the performance, better supplementary performance of employees in the company programs, more objective based on will be better. With the good performance employee benefits, the achievement that of employees in the company, the company awarded by the company in accordance will be more steady to face competition with the performance of employees, with foreign fertilizer companies in the creating a conducive working environment, present and future. and the provision of facilities (offices, places of worship, parks) have been able to Managerial Implication automatically improve employee’s This research is needed to know the performance. effect of employee's discipline level, employee's compensation, and employee's Competence given by the company is competence to their performance for the also good enough to provide tasks that can company in the current fertilizer business improve the skill and ability of employees. competition, especially for PT Petrokimia The trust given to each employee manager, Gresik company. From the results of this until the evaluation is always given by the study, it can be concluded that discipline, manager to the employees of each task that compensation, and competence have a has been done. Given the competence of positive and significant effect on the having dominant results, the company must performance of PT Petrokimia Gresik always give trust to employees, and also employees. improve the competence of employees so that it can affect the performance of CONCLUSION AND SUGGESTION company’s employees. Conclusion PT Petrokimia Gresik is a state- Limitations and Further Research owned fertilizer company which has the This study is only focused to the largest number of employees. After the region of East Java (Gresik). This study activation of AEC in all continents of Asia, uses PT Petrokimia Gresik as an object of all companies especially in Indonesia are the study, because the company has the required to improve employee's largest number of permanent employees performance in order to compete with compared to other state-owned fertilizer foreign companies entering in Indonesia. companies in Indonesia, so the researcher There are many factors that can affect thinks that PT Petrokimia Gresik is employee performance, especially work representative enough to be used as the discipline factor, compensation policy object of the study. given by the company to employees, and also the level of competence that exist in In general, PT Petrokimia Gresik and employees in each company. other state-owned fertilizer companies produce the same main product namely This research aimed to investigate fertilizer. However, each state-owned factors affecting employee’s performance fertilizer company has own advantage in especially in fertilizer industry. This study product innovation such as PT Petrokimia was conducted to determine the effect of Gresik with its superior product named discipline, compensation, and competence Pupuk Phonska, PT Pupuk Kalimantan on employee’s performance. For sampling Timur with its superior product named technique, this study used Slovin formula Pupuk NPK Pelangi, PT Pupuk Sriwidjaja calculation. The samples obtained in this Palembang with its superior product named study were 112 employees of PT Pupuk Urea Pusri, PT Pupuk Kujang Petrokimia Gresik. Cikampek with the best urea fertilizer named Urea Kujang Nitrea fertilizer, and This study was conducted by PT Pupuk Iskandar Muda with its superior regression analysis. The results found in fertilizer called Pupuk Urea PIM. this study are as follows: This research analyzes PT Petrokimia 1. Discipline has a positive and Gresik which has certain advantages among significant influence on employee other subsidiaries. One of the advantages of performance. With good work PT Petrokimia Gresik is the largest number discipline of employees such as of human resources because this research is coming on time, carrying out work focused on human resources. appropriately, obeying the company's rules will be able to improve the Based on the advantages of each performance of employees to compete subsidiary, further research would be better with the other local and foreign if the research was conducted to analyze the fertilizer company so that the company employee performance of all subsidiaries in will be able to survive in tighter Pupuk Indonesia Holding Company. competition. Further research is expected to provide 2. Compensation has a positive and knowledge in a broader scope of the State- significant effect on employee owned fertilizer industry in Indonesia. performance. With the consistency of a good compensation given by a

company, the company is able to survive in market competition and is

able to compete with foreign 1. The company is expected to maintain companies. or improve the existing discipline 3. Competence has a positive and rules, compensation policies and significant influence on employee competencies that have been made by performance. The company is required the company, because the rules and to improve the competence of policies of the company have a employees by applying certain positive result. This is in accordance treatment done by managers to to the results of this study. employees, and consider the level of 2. It is expected that the company can difficulty in the work given to the maintain and improve the quality of employee manager employees so that its competency because the the performance of employees of a Competeny variable has a dominant company can increase. Then, the influence in affecting Employee’s company will be able to compete with Performance, one of which is to foreign companies considering the improve the work environment activation of the AEC policy. facilities to be better so that 4. Competence has a dominant influence Employee’s Performance of the on employee performance. The more company will increase. employees with high competence, the 3. Discipline, Compensation, and performance of employees in the Competencie have an important role company will be better. With the good to affecting Employee’s performance of employees in the Performance. Therefore, the result of company, the company will be ready to this study is expected to be used as a face competition any kind of reference for further researchers to competition. develop this study by considering other variables beyond the variables Suggestions that have been included in this study, Based on the above conclusions, there such as career development, are some suggestions proposed by the motivation, and performance researcher which are expected to benefit appraisal in PT Petrokimia Gresik. the PT Petrokimia Gresik company and other parties. The suggestions are as follow

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