THE EFFECT OF COMPENSATION ON EMPLOYEE LOYALTY WITH JOB SATISFACTION AS A MEDIATOR

ABSTRACT: This study aims to analyze the effect of compensation on employee loyalty mediated by jobsatisfaction at PT. XYZ. The population in this study were all employees of PT. XYZ. The sampling techniqueuses the census method by involving all members of the population with a total sample of 59 people. Dataanalysis techniques were performed using Structural Equation Modeling (SEM) with the Partial Least Square(PLS) approach, and using the VAF test to test the role of mediation.The results showed that compensation andjob satisfaction had a positive and significant effect on employee loyalty. The results also showed that jobsatisfaction has a role as a partial mediation between compensation for employee loyalty, which means thatcompensation can affect employee loyalty directly or indirectly through the mediating role of job satisfaction.

Keywords: compensation, job satisfaction, employee loyalty