Improve Human Capital Management

Oct 13, 2025 by thesweetdesigns.com 72 views

The Effect of Human Capital and Compensation on Employee Performance at PT. Bakrie Sumatera Plantation in Kisaran

Introduction

Human capital-based performance is a crucial aspect that must be developed in an organization. At PT. Bakrie Sumatera Plantation, efforts to improve human capital are carried out through planning the Focus Group Discussion (FGD) program and the development of competency-based Human Resources (HR). However, lately, employees of PT. Bakrie Sumatera Plantation held a demonstration in the rubber processing plant area. They demanded their rights, especially related to bonuses that have not been given according to the agreement between the company and the union. This shows the discrepancy between employee expectations and existing reality, which can have an impact on their performance.

The Importance of Human Capital and Compensation

Human capital is defined as an effort to manage human abilities in order to achieve a higher level of performance. Meanwhile, compensation is all forms of rewards, both in the form of money and non-wishes, given to employees based on their work. Performance is measured by the results of work in terms of the quality and quantity achieved by an employee in carrying out the tasks according to the responsibilities given. In this study, the method used was quantitative with a population consisting of Non-Staf SKU PT employees of PT. Bakrie Sumatera Plantation in Radja Estate land, which is a type of rubber plant. Samples were taken as many as 80 respondents with simple random sampling techniques.

The Effect of Human Capital on Employee Performance

The results showed that Human Capital had a positive and significant influence on employee performance of 13.39%. That is, the better human capital management, the more employee performance will increase. This is because human capital management is a crucial aspect that must be developed in an organization. It involves planning, developing, and maintaining the skills and abilities of employees to achieve a higher level of performance. By investing in human capital, organizations can improve employee productivity, job satisfaction, and overall performance.

The Effect of Compensation on Employee Performance

On the other hand, compensation also contributes positively and significantly at 24.9% to employee performance. This shows that the compensation system applied by the company can be said to be good and able to support employee performance. Compensation is a critical aspect of human capital management, as it motivates employees to perform at their best. A good compensation system can increase employee job satisfaction, reduce turnover rates, and improve overall performance.

The Relationship Between Human Capital and Compensation

The results of further analysis by calculating the coefficient of determination showed the R value of 0.619, which illustrates the adequate relationship between human capital and compensation to performance. The R Square value of 0.383 indicates that 38.3% of employee performance variables can be explained by human capital and compensation provided. This suggests that there is a significant relationship between human capital and compensation, and that both factors contribute to employee performance.

Conclusion

From the results of this study, it can be concluded that the management of human capital and a good compensation system is very influential on employee performance. Therefore, PT. Bakrie Sumatera Plantation needs to continue to improve the HR development program and pay attention to the compensation system in order to maintain and improve employee performance. In the long run, this is expected to create a more productive and harmonious work environment, which in turn will contribute to the company's overall success.

Recommendations

Based on the findings of this study, the following recommendations are made:

Improve Human Capital Management: PT. Bakrie Sumatera Plantation should continue to improve its human capital management program to develop the skills and abilities of employees.
Review Compensation System: The company should review its compensation system to ensure that it is fair, competitive, and motivating.
Increase Employee Engagement: The company should increase employee engagement through regular feedback, training, and development programs.
Improve Communication: The company should improve communication between employees and management to ensure that employees are aware of their roles and responsibilities.

Limitations of the Study

This study has several limitations, including:

Sample Size: The sample size of 80 respondents may not be representative of the entire population of PT. Bakrie Sumatera Plantation employees.
Data Collection Method: The data collection method used in this study was quantitative, which may not capture the nuances of human capital and compensation.
Time Frame: The study was conducted over a short period of time, which may not capture the long-term effects of human capital and compensation on employee performance.

Future Research Directions

Future research should focus on:

Longitudinal Study: Conducting a longitudinal study to examine the long-term effects of human capital and compensation on employee performance.
Qualitative Study: Conducting a qualitative study to capture the nuances of human capital and compensation.
Comparative Study: Conducting a comparative study to examine the effects of human capital and compensation on employee performance in different organizations.
Q&A: The Effect of Human Capital and Compensation on Employee Performance at PT. Bakrie Sumatera Plantation in Kisaran

Q: What is human capital and how does it affect employee performance?

A: Human capital refers to the skills, abilities, and knowledge that employees possess, which can be developed and improved through training, education, and experience. Human capital is a crucial aspect of employee performance, as it enables employees to perform their jobs effectively and efficiently.

Q: What is the relationship between human capital and compensation?

A: Human capital and compensation are closely related, as a good compensation system can motivate employees to develop their skills and abilities, leading to improved performance. Conversely, a poor compensation system can lead to demotivation and decreased performance.

Q: What are the benefits of investing in human capital?

A: Investing in human capital can lead to several benefits, including:

Improved employee productivity and performance
Increased job satisfaction and engagement
Reduced turnover rates and improved retention
Improved competitiveness and reputation
Increased innovation and creativity

Q: What are the key factors that affect human capital and compensation?

A: The key factors that affect human capital and compensation include:

Employee skills and abilities
Compensation system and benefits
Training and development programs
Performance management and feedback
Organizational culture and values

Q: How can organizations improve their human capital and compensation systems?

A: Organizations can improve their human capital and compensation systems by:

Conducting regular performance reviews and feedback
Providing training and development programs
Offering competitive compensation and benefits
Encouraging employee engagement and participation
Fostering a positive and supportive organizational culture

Q: What are the challenges of implementing a human capital and compensation system?

A: The challenges of implementing a human capital and compensation system include:

Resistance to change from employees and management
Limited resources and budget constraints
Difficulty in measuring and evaluating the effectiveness of the system
Ensuring fairness and equity in the compensation system
Balancing the needs of different stakeholders, including employees, management, and shareholders

Q: What are the future directions for research on human capital and compensation?

A: Future research directions for human capital and compensation include:

Conducting longitudinal studies to examine the long-term effects of human capital and compensation on employee performance
Conducting qualitative studies to capture the nuances of human capital and compensation
Conducting comparative studies to examine the effects of human capital and compensation on employee performance in different organizations
Examining the impact of technology and digitalization on human capital and compensation
Investigating the role of human capital and compensation in achieving organizational goals and objectives

Q: What are the implications of this study for practice?

A: The implications of this study for practice are:

Organizations should prioritize investing in human capital and compensation to improve employee performance and productivity
Organizations should conduct regular performance reviews and feedback to ensure that employees are developing their skills and abilities
Organizations should offer competitive compensation and benefits to attract and retain top talent
Organizations should foster a positive and supportive organizational culture to encourage employee engagement and participation.