THE EFFECT OF COMPENSATION, JOB SECURITY, AND EMPLOYEE ENGAGEMENT ON EMPLOYEE LOYALTY

Ummi Afifatul Rohmah, Robby Sandhi Dessyarti

Abstract


This study examines the influence of compensation, job security, and employee engagement on employee loyalty at PT BPR Ekadharma Bhinaraharja, driven by the phenomenon of voluntary turnover indicating suboptimal loyalty. Using a quantitative approach with 141 respondents, the analysis included validity and reliability tests, descriptive analysis, classical assumption testing, multiple linear regression, t-tests, and determination coefficient calculations. The findings reveal that compensation has a positive and significant effect on loyalty (Sig. 0.006), job security emerges as the dominant factor with the highest regression coefficient of 0.658 (Sig. 0.000), and employee engagement also shows a positive and significant effect (Sig. 0.030; B 0.168). Collectively, these three variables explain 43.8% of the variation in employee loyalty (Adjusted R² 0.438), while the remainder is influenced by other factors outside the model. The study concludes that enhancing fair performance-based compensation, ensuring transparent job security, and strengthening employee participation in activities and decision-making processes are crucial strategies for fostering long-term loyalty.

Keywords: Compensation, Job Security, Employee Engagement, Employee Loyalty, PT BPR Ekadharma Bhinaraharja.


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