Do Economic Attitudes Drive to Employee Productivity? Lesson from Indonesia

Abstract

Productive human resources are important assets for companies in facing the global economic competition. The purpose of this study is to examine the effect of economic attitudes toward employees' job satisfaction as well as understanding the impact of economic attitudes toward employee productive behavior at "Sentra Tenun Ikat" in East Java. The research method applied in this study is quantitative research with an explanatory design, which is intended to gain a better understanding of the relationship between variables. The population in this study amounted to 394 participants from SMEs and joint business groups. Meanwhile, the sample was 197 people and collected using a proportional random sampling technique. The variable measurement was carried out by a questionnaire distributed to respondents, which consisted of thirty-five closed questions. Each question item provides five alternative answers. Furthermore, it is calculated using Structural Equation Modeling (SEM) undergoing the LISREL 8.80 program. The findings indicated that there was a positive influence of economic attitudes on employees' job satisfaction. Indeed, the positive value coefficient indicates that there is an effect that is directly proportional to economic attitudes toward employees' productive behavior through employee performance satisfaction, namely, the better the economic attitude taken, the higher the productive behavior of employees.

1. Introduction

Human resources play a crucial role in affecting success and failure in an organization. Human resources are linked with the people who are ready, willing, and able to contribute to the achievement of organizational goals (Macke & Genari, 2019). Since the critical role of human resources, every company always strives to have a quality of human resources. This is due to the fact that the high quality of human resources will lead to more exceptional company performances. Human resources within a company are required to work effectively, efficiently, and quality, which makes the company’s competitiveness more significant (Cherkesova, Breusova, Savchishkina, & Demidova, 2016).

The high quality of human resources allows for the achievement of the goals set by the organization company. In fact, the company cannot possibly reach its objective without the employee’s active role (Mishra, Boynton, & Mishra, 2014). Having excellent skills is the need for human resources to handle every given job and its problems. The presence of reliable skills can directly improve employee performance (Ibrahim, Boerhannoeddin, & Bakare, 2017). Increasing effectiveness, efficiency, and creativity in an organization is dependent on the willingness of people in its organization and their positive contribution to responding to changes. The demand for the preparation of high quality and competent human resources will be urgent and crucial (Shuzhen, 2019).

There are primary factors that influence productive behavior, namely, environmental factors and individual factors. Environmental factors are work conditions that affect employees every day in achieving the company’s goals, which will indirectly lead to productive behavior (e.g., organizational structure, salaries, bonuses, and work climate). At the same time, individual factors appear in the form of mental attitudes and contain the meaning of individual desires and efforts that always attempt to bring up and improve productive behavior.

The economic attitude also determines a person’s productive behavior. Economic attitude is a response that influences the choice of actions according to the mind by considering the advantages and disadvantages of meeting various kinds of needs faced utilizing moving limited needs. Cesarini, Johannesson, Lichtenstein, Sandewall, and Wallace (2010) showed that genetic characteristics and environmental factors contribute about 20 percent of individual variations in determining economic attitudes. Additionally, economic attitudes are also influenced by peers (Card & Guilano, 2013; Leider, Möbius, Rosenblat, & Do, 2009). Economic attitude refers to how a person makes decisions in determining economic choices that are considered appropriate to their abilities.

Despite the growing number of studies on employee productivity, the relationship between economic attitudes and employee productivity is overlooked by scholars. Numerous studies focus on employee performance linked with leadership (Buil, Martínez, & Matute, 2019; Eliyana & Ma’arif, 2019), work engagement (Cesário & Chambel, 2017; Nguyen, Nguyen, Ngo, & Nguyen, 2019), and talent management (Sopiah, Kurniawan, Nora, & Narmaditya, 2020). This study provides three contributions. First, it contributes to the existing literature on employee productivity by involving economic attitudes. Second, this study focuses on SMEs in Indonesia, while other studies concern productivity in its context. Third, Indonesia’s focus study is unique because the high population cannot provide greater high-quality productivity.

In connection with the description and insufficient productive work behavior of employees, this requires maximum handling with a comprehensive approach through the assessment and problem solving related to the influence of economic attitudes towards productive behavior interpreted by employees’ job satisfaction in SME “Tenun Ikat in East Java”, which is a home industry engaged in weaving using non-machine looms.

2. Literature Review

2.1. Economics Attitudes

Economic attitude refers to how a person feels about good or bad economic behavior that can be provided in several terms, including rationality, morality, lifestyle, efficiency, and effectiveness (Goodwin, Harris, Nelson, Roach, & Torras, 2015). An economic attitude is a response that influences the choice of action according to the mind by considering the pros and cons of meeting various types of needs and wants to face with limited resources (Beckman, Chen, DeAngelo, Smith, & Zhang, 2011). Basri (2015) further states that economic attitude is defined as a complex mental condition to place and carry oneself that involves beliefs and feelings and dispositions to act concerning economic activities in specific ways. An individual has confronted economic problems every day that requires them to behave and be economically wise. A person’s economic behavior will significantly determine the welfare of life (Diener et al., 2013). The pattern of attitudes, behavior, and local cultural values instilled by parents in children is the basis for developing the next behavior.

2.2. Productive Behavior

Productive behavior is associated with the success and failure of the organization’s goal (Sopiah et al., 2020). Some studies believed that productive behavior can be proxied by job performance, organizational citizenship behavior (OCB), and innovation and creativity (Demerouti, Bakker, & Halbesleben, 2015; Lavy & Littman-Ovadia, 2017). In more detail, job performance is all employee behavior in the workplace and is determined by declarative matter, procedural knowledge, and motivation (Gunasekara, 2018). Productive behavior reflects behavioral models, namely, being effective and efficient behavior (Park, 2020). An effective behavior means that employee behavior is oriented toward achieving organizational goals. The dimension seen to reflect effective behavior is an activity that leads to achieving goals. Meanwhile, the dimension to recognize the efficient behavior is provided minimum possible every resource in an effort to achieve goals (Yuan, Yi, Miao, & Zhang, 2018).

The importance of human resources is very influential in the production goal of a company. Therefore, the welfare of human resources in the company must be maximally supported. When the welfare of human resources is fulfilled, performance will also increase and increase production yields (Muafi, Siswanti, Diharto, & Salsabil, 2020). Welfare is needed by employees in a company that fulfilled employee welfare and will motivate employees to work, ultimately affecting the employee’s job satisfaction. Employee job satisfaction can be seen from the level of employee welfare; the higher the level of employee welfare, the higher the employee job satisfaction (Bryson, Forth, & Stokes, 2017). Here also explains that employee welfare will influence or influence productive behavior. The higher the employee’s welfare will positively affect the employee’s behavior in the company.

Additionally, an individual’s productive behavior is also determined by economic attitude (Hariyono, 2015). Economic attitude refers to how a person makes decisions in determining economic choices that are considered appropriate in accordance with their abilities, while economic behavior is the actions and economic behavior of a human being (Kirchmaier, Prüfer, & Trautmann, 2018; Dimmock, Kouwenberg, Mitchell, & Peijnenburg, 2013). Acting economically can be depicted in several activities, including fulfilling needs, living frugally, time management, effective working methods, making needs priority scale, taking economic action, making choices, taking advantage of opportunities, and being rational (Goodwin et al., 2015). Some of the factors that influence or construct productive work behavior in an organization are economic attitudes, work motivation, and job satisfaction (Alam, Hassan, Bowyer, & Reaz, 2020; Jalagat, 2016). Understanding the factors that drive the emergence of productive work behavior, company managers’ ability to create the factors mentioned have powerful implications for employees’ productive work behavior. Changing and increasing the role of the human resource function is essential to support organizational success.

3. Research Methods and Materials

The research method applied quantitative research with an explanatory design. Research variables are economic attitudes (exogenous latent) and employee’s productive behavior (latent endogenous). The population in this study amounted to 394 employees of the “Tenun ikat” industry in East Java, in the Kediri city, Gresik Regency, and Lamongan Regency. The sample was 197 people scattered from the joint business group (KUB) tenun ikat “Bandar Kidul”, the owner of SME tenun ikat is “Paradila” in Lamongan Regency and the owner of SME tenun ikat “Al-Arif” in Gresik Regency. Data collection used the questionnaire method, measured using a 5-point Likert scale (value 1 = strongly disagree, value 2 = disagree, value 3 = doubtful, value 4 = agree, and value 5 = strongly agree). The analysis technique used is Structural Equation Modeling (SEM) with the LISREL 8.80 program, then the Confirmatory Factor analysis test, and the Structural Equation Model (SEM) test. Economic attitude variables are indicated by (1) saving life (X1.1), (2) rational (X1.2), (3) carrying out economic actions (X1.3), (4) altruism (X1.4), (5) efficiency in consumptive activities (X1.5), and (6) effectiveness in productive activities (X1.6). Research and measurement of the variable in question carried out by a questionnaire and instrument in the form of a questionnaire distributed to respondents consisted of 35 closed questions. Each question item provides five alternative answers. The scoring range for each item is 1 to 5.

4. Results and Discussion

4.1. Economics Attitudes

Table 1 summarizes the descriptive analysis results of the majority of respondents in this study, providing perceptions in the high category of economic attitudes indicated by the average value of indicators between 3.8756 to 3.9310 on six indicators of economic attitude. The results of the confirmatory factor analysis for the construct of economic attitudes (EA) are done in one round and a unitary construct has been produced that meets the requirements of validity and reliability. The economic attitude variables are constructed with six indicators or manifests. The validity of each manifest that constructs the economic attitude latent variable is seen from the value of lambda (λ), coefficient of determination (R²) and t-value (see Table 2).

Table 1: Description of Economic Attitudes

Table 2: The Validity of the Construct of Economic Attitudes

The validity conclusion is obtained by comparing the t-value with the t-table with an alpha error rate of 5% or 0.05 equal to 1.960. Based on this, all factor loadings of each manifest are valid. From the reliability test the construct reliability obtained amounted to 0.99. It is in accordance with Solimun (2002) who stated that the reliability coefficient above 0.60 is seen as adequate as a basis for further analysis. Based on this, the construct reliability of latent variables of the attitude of the economy under study can be stated as fulfilling the requirements. In addition, strengthening the proof of construct unidimensionality test economic attitude can also be proven by using the level of harmony based on the results of the Lisrel analysis with a single construct test model, which provide measurements Chi-Square (χ²) with a coefficient of 2.58 and a p-value of 0.98. The results are shown in Table 3.

Table 3: Alignment of a Single Model Economic Attitude

From level harmony as shown in Table 3, it is evident that the constructs of economic attitudes meet the requirements as constructs that are converge.

4.2. Productive Behavior

The variable of productive behavior is indicated by innovation (Y.1), work morale (Y.2), constructive action (Y.3), contribute positively (Y.4), and positive work orientation (Y.5). Research and measurement of the variable in question, carried out by a questionnaire method and an instrument in the form of a questionnaire distributed to respondents, consisted of 19 closed questions. Each question item provides five alternative answers.

Table 4: Description of Productive Behavior

The results of a descriptive analysis of the majority of respondents provide perceptions in the high category of earning behavior indicated by the average value of indicators between 3.8934 to 3.9264 on the five indicators of earning behavior. The confirmatory factor analysis results for the construct of productive behavior are done in one round, and a unitary construct has been produced that meets the requirements of validity and reliability. Based on this, all lambda coefficients or factor loading of each manifest are valid.

From the reliability test, the construct reliability obtained amounted to 0.97, while the reliability coefficient above 0.60 is seen as adequate as a basis for further analysis [10]. Based on this, the construct reliability of latent variables productive behavior can be stated as fulfilling the requirements. In addition, to strengthen the proof of construct unidimensionality test, productive behavior can also be proven by using the level of harmony based on the results of the Lisrel analysis with a single construct test model in which results provide measurements Chi-Square (χ2) with a coefficient of 7.07 and a p-value of 0.22. The intended results are shown in Table 5.

Table 4: The validity of the construct of Productive Behavior

Table 5: Alignment of the Single Model of Earning Behavior​​​​​​​

4.3. The Effect of Economic Attitudes on Employees’ Job Satisfaction

The influence of economic attitudes on employees’ job satisfaction at “Sentra Tenun Ikat” in East Java provides 0.36 with a t-value of 5.09. This means that there is a significant favorable influence of economic attitudes on employees’ job satisfaction at Sentra Tenun Ikat in East Java at a five-percent error level, so that the hypothesis is supported. The positive value coefficient indicates a directly proportional effect of economic attitudes on employees’ job satisfaction, namely, the better the economic attitude taken, the higher the job satisfaction of employees at the “Sentra Tenun Ikat” in East Java.

This study shows employee perspectives on economic attitudes with indicators that are individual’s life-saving, the use of ratios, carrying out economic actions, making priorities, altruism, efficiency in consumptive activities, and effectiveness in productive activities as reflective of economic attitudes, can influence increased job satisfaction reflected in salary and bonus receipts, the work itself, coworkers, promotions and work environment.

Job satisfaction is a pleasant or positive emotional condition based on the work results (Shahab & Nisa, 2014). Factors related to job satisfaction include economic attitudes and work environment, where an excellent economic attitude and a conducive work environment will bring a positive attitude to work so that the work done will feel pleasant and ultimately impact job satisfaction. The finding of this study reinforces the results of previous studies that examine the effect on job satisfaction by internal and external factors of employees (Susanty & Miradipta, 2013; Dikmen, Yıldırım, Yıldırım, & Ozbash, 2017; Park & Kang, 2017).

4.4. The Effect of Economic Attitudes on Employee Productive Behavior

The hypothesis testing obtained an influence coefficient of 0.16 with a T-value of 2.54. This means that there is a significant positive influence of economic attitudes on the productive behavior of employees at the “Sentra Tenun Ikat” in East Java at a five-percent error level, so that the hypothesis is supported. The positive value coefficient indicates the influence of a directly proportional effect of economic attitudes on the productive behavior of employees, meaning, the better the economic attitude taken, the higher the productive behavior of employees at the “Sentra Tenun Ikat” in East Java.

This study shows that employee perspectives on economic attitudes with indicators of a person’s life-saving, the use of ratios, carrying out economic actions, making priorities, altruism, efficiency in consumptive activities, and effectiveness in productive activities as reflective of economic attitudes, can affect the improvement of productive behavior, which is reflected in work, rewards work, loves work, work performance, and relationships at work. The results of this study support some studies explaining that, to improve employee performance, changes are needed in employee economic attitudes (Zulkifli et al., 2014).

4.5. The Influence of Economic Attitudes on Productive Behavior of Employees through Employee Performance Satisfaction

The next tests assess the influence of economic attitudes on employee productive behavior through employee performance satisfaction at the “Sentra Tenun Ikat in East Java”. Hypothesis testing results obtained an influence coefficient of 0.19 with a T-value of 4.05. This means that there is a significant positive influence of economic attitude on employee productive behavior through employee performance satisfaction at the “Sentra Tenun Ikat” in East Java at a five-percent error level, so that the hypothesis is supported. The coefficient of the positive value indicates the influence of a directly proportional effect of economic attitudes on employee productive behavior through employee performance satisfaction, meaning, the better the economic attitude taken, the higher the productive behavior of employees, which is in line with the higher employee job satisfaction at the “Sentra Tenun Ikat” in East Java.

A person’s productivity can be supported by the person’s economic attitude. Economic attitude is the response from the selection of actions to obtain the most out of various expected needs with limited resources (Hariyono, 2015). The responses include the use of resources, the use of time and energy, prioritizing interests, taking opportunities, and thinking rationally. The mindset that is formed will have an impact on the work done, so that it will cause satisfaction in working; then, indirectly, it will have an impact on good work productivity (Setiani & Marunung, 2020).

5. Conclusions

Economic attitudes are in the high category, which means that respondents consider that the indicators used must be implemented well to achieve an adequate level of economic attitude. The indicator of saving a life is the highest indicator in the formation of economic attitude variables; saving life is the most appropriate action in explaining economic attitudes. Meanwhile, productive behavior is also in the high category, which means that respondents assess that the indicators used must be implemented well to achieve a good level of productive behavior. The moral work indicator is the highest indicator in the formation of productive employee behavior; work morale is the most appropriate action in explaining productive employee behavior. Hypothesis testing showed that there is a positive influence of economic attitudes on employee job satisfaction. The positive value coefficient indicates that there is an effect that is directly proportional to economic attitudes on employee job satisfaction. The better the economic attitude taken, the higher the job satisfaction of employees. This study shows that employee perspectives on economic attitudes with indicators that are someone’s life-saving, the use of ratios, carrying out economic actions, making priorities, altruism, efficiency in consumptive activities, and effectiveness in productive activities as reflective of economic attitudes, can influence increased job satisfaction, which is reflected in the salary and bonus receipts, the work itself.

Testing the next hypothesis shows there is a positive influence of economic attitudes on employees’ productive behavior. The positive value coefficient indicates that there is an effect that is directly proportional of the economic attitudes on the productive behavior of the employees, meaning, the better the economic attitude taken, the higher the productive behavior of the employees. This study shows that employee perspectives on economic attitudes with indicators that are someone’s life-saving, the use of ratios, carrying out economic actions, making priorities, altruism, efficiency in consumptive activities, and effectiveness in productive activities as reflective of economic attitudes, can influence the improvement of productive behavior reflected in work. Additionally, there is a positive influence of economic attitudes on the productive behavior of employees through performance satisfaction. The positive value coefficient indicates that there is an effect that is directly proportional of economic attitudes on productive behavior of employees through employee performance satisfaction, namely, the better the economic attitude taken, the higher the productive behavior of employees, which is in line with the higher employee job satisfaction.