An Analysis of the Relationship between Compensation and Employees’ Working Motivation Controlling for Proactive Behavior in Indonesian Hotel Industry

Abstract

In companies engaged in hospitality services, where contact between employees and guests is relatively intensive, employee motivation will be a determining factor for the success of the company. Unsatisfied employees cause the quality of work to decrease and things can be felt directly by guests. Compensation is one of important variables that can affect employees’ working motivation. Good compensation for employees will encourage them to work well and more productive. Working motivation is closely related to employees’ perceptions of compensation and their proactive behavior. This study aims to determine the relationship between employee perceptions of compensation and working motivation controlling for proactive behavior in hotel companies with a research hypothesis: "There a significant relationship between perceptions of compensation and employees’ working motivation controlling for proactive behavior.” A total of 700 employees working in 37 stars and non-star hotels throughout Indonesia were sampled in this study. Statistical calculations showed that the partial correlation of compensation variables and working motivation controlling proactive behavior is significantly correlated r(698) = .617, p<.01, significant 2-tailed. The coefficient is reduced or slightly weakened whilst taking away the effects of proactive variable comparing to .814 with the proactive influence. However, the correlation of compensation and working motivation remains strong even without proactive attitude variable.