Determinants of Employee Performance: The Role of Emotional Intelligence, Compensation, and Job Satisfaction

Abstrak

Employee performance remains a crucial issue for organizations, particularly in labor-intensive industries that rely on consistency, emotional stability, and fair reward systems to achieve operational targets. This study investigates the influence of emotional intelligence and compensation on employee performance, with job satisfaction positioned as a mediating variable at CV Decorus Temanggung. The research was motivated by the need to understand why employee performance may not always improve directly through individual emotional capability, but rather through employees’ psychological evaluation of their work experience. A quantitative approach was employed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). Data were collected from 112 employees through questionnaires and analyzed using SmartPLS. The findings reveal that emotional intelligence does not directly influence employee performance, but it has a positive and significant effect on job satisfaction. Compensation has a positive and significant effect on both job satisfaction and employee performance. Furthermore, job satisfaction significantly improves employee performance and plays an important mediating role in the proposed model. Specifically, job satisfaction fully mediates the relationship between emotional intelligence and employee performance, while partially mediating the relationship between compensation and employee performance. These results indicate that emotional intelligence contributes to performance when it is translated into a higher level of job satisfaction, whereas compensation influences performance both directly and indirectly. The study highlights the importance of developing fair compensation policies, strengthening emotional management, and creating a satisfying work environment as integrated strategies to enhance employee performance.