Direct and Indirect Effects on Employee Performance in Local MSMEs: A Case in the Covid-19 Pandemic

Neneng Sofiyanti, Pratiwi Dwi Suhartanti


Improving employee performance is one of the efforts that can be used by MSMEs to survive the
economic disasters caused by the Covid-19 pandemic. This study was designed with the aim of
analyzing the direct and indirect relationship between transformational leadership, self-efficacy, job
satisfaction, work culture, and employee performance. A total of 340 respondents from 36 MSMEs
in Karawang, West Java, Indonesia using purposive sampling. The research hypothesis was tested
using structural equation modeling with AMOS 22.0. The results reveal that transformational
leadership has no significant effect on employee performance, self-efficacy has a significant effect
on employee performance. The Sobel test result confirmed the fully mediating role of job
satisfaction on the relationship between transformational leadership and employee performance and
the partial mediating role of job satisfaction on the relationship between self-efficacy and employee
performance. Work culture moderated the relationship between self-efficacy and employee
performance. Contributions, limitations and suggestions for future research will be discussed
Keywords:Transformational leadership, Self-efficacy, Job satisfaction, Work culture, Employee
performance, MSMEs.

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