Comparing the Determinants of Employee Performance Between Satisfaction and Loyalty in an Indonesian Muslim Fashion Company
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Abstract
This study examines the effect of employee satisfaction and employee loyalty on employee performance at PT XYZ, a Muslim fashion company operating in Jakarta, Indonesia. Although both constructs are well established as antecedents of performance, empirical findings on their relative strength remain inconsistent, and studies that compare the two within the Indonesian creative and fashion retail sector are still limited. A quantitative approach with a descriptive-causal design was applied. Data were collected through a structured questionnaire distributed via Google Form to 109 active employees, selected using proportionate stratified random sampling with a minimum tenure of one year. The data were analysed using Structural Equation Modelling based on Partial Least Squares (SEM-PLS) with SmartPLS 4. Descriptive results place all three variables in the good category, namely employee satisfaction at 81.04%, employee loyalty at 78.84%, and employee performance at 80.11% of the ideal score. Hypothesis testing shows that employee satisfaction has a positive and significant effect on employee performance (β = 0.386; t = 4.273; p < 0.001), and that employee loyalty also has a positive and significant effect (β = 0.537; t = 6.173; p < 0.001). Loyalty is the more dominant predictor, as indicated by both a larger path coefficient and a large effect size (f² = 0.533) compared with the medium effect size of satisfaction (f² = 0.276). Jointly, the two variables explain 73.2% of the variance in employee performance. The findings suggest that in an organisation whose workforce is relatively young and mobile, affective attachment functions as a stronger driver of work outcomes than job contentment alone. The study is nevertheless limited by its cross-sectional, single-source design, and its findings should be read as associational rather than strictly causal.
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