Confidence and Fair Pay Drive Employee Performance at Indonesia’s State Microfinance Firm
Employee confidence and fair compensation play a decisive role in shaping workplace performance at Indonesia’s state-owned microfinance institution, according to new research published in 2026 by Nanang Komarudin of Perbanas Institute. The study, released in the International Journal of Integrative Sciences (IJIS), examined employees at PT Permodalan Nasional Madani (PNM), Serang Branch, and shows that self-belief and compensation systems directly influence how well employees perform in high-pressure, fast-changing environments.
The research is significant as PT PNM manages the Mekaar program, one of Indonesia’s largest initiatives supporting ultra-micro entrepreneurs, especially women from low-income households. Strong employee performance is critical to sustaining this national economic empowerment program amid digital transformation and shifting operational targets.
Why Employee Performance Matters Now
Indonesia’s financial services sector is facing growing pressure from digitalization, tighter regulations, and expanding service coverage to remote communities. PT Permodalan Nasional Madani plays a central role in distributing microfinance across the country, and its frontline managers—known as Mekaar Unit Heads—carry demanding responsibilities.
They must meet strict performance targets, supervise teams, adapt to policy changes, and work closely with grassroots communities. Understanding what drives their performance is increasingly important for organizational sustainability, service quality, and public trust.
Komarudin’s research addresses this challenge by focusing on three critical human resource factors:
1. Self-efficacy, or an employee’s belief in their own abilities
2. Compensation, including salary, incentives, and benefits
3. Adaptability, the capacity to adjust to change and uncertainty
How the Research Was Conducted
The study involved 95 Mekaar Unit Heads at PT PNM’s Serang Branch in Banten Province. Data were collected through structured questionnaires using a four-point scale to capture employee perceptions of confidence, compensation, adaptability, and performance.
To analyze the relationships between these factors, the research applied Structural Equation Modeling using Partial Least Squares (SEM-PLS). This analytical approach allowed the author to assess both direct and indirect effects among variables, ensuring reliable and statistically robust findings.
Key Findings at a Glance
The results reveal a clear pattern linking confidence, compensation, and performance:
1. Employees with stronger self-efficacy show better adaptability
2. Fair and competitive compensation improves adaptability
3. Self-efficacy has a direct and strong impact on performance
4. Compensation directly increases performance levels
5. Adaptability strengthens the impact of compensation on performance
6. Adaptability does not mediate the effect of self-efficacy on performance
In practical terms, employees who believe in their own abilities consistently perform better, regardless of adaptability levels. Meanwhile, compensation improves performance both directly and by helping employees cope with change.
What the Data Reveal
The study’s statistical model explains a substantial portion of employee behavior:
a. 86.6% of adaptability is explained by self-efficacy and compensation
b. 79.1% of performance is explained by self-efficacy, compensation, and adaptability
These high explanatory values indicate that psychological confidence and financial rewards are not peripheral concerns—they are central drivers of performance in operationally complex organizations like PT PNM.
Expert Insight from the Author
According to Nanang Komarudin, M.M., employees who believe in their capabilities are better equipped to handle uncertainty and responsibility.
“Unit heads with strong self-efficacy remain calm under pressure, adapt faster to policy changes, and focus on results even in unpredictable field conditions,” Komarudin explained, drawing on findings from the Serang Branch.
He also emphasized that compensation is more than a financial issue.
“When compensation is perceived as fair, employees feel secure and valued. This emotional stability encourages flexibility, innovation, and readiness to accept organizational change,” said Komarudin of Perbanas Institute.
Real-World Implications
The findings carry important lessons for organizations beyond PT PNM, especially in sectors that rely on frontline leadership and community engagement.
For policymakers and state-owned enterprises:
1. Investing in employee confidence through training and leadership development can significantly boost performance.
2. Compensation systems should align with workload realities and performance expectations to support adaptability.
For businesses and HR professionals:
1. Performance management strategies should combine psychological empowerment with transparent reward systems.
2. Adaptability can be strengthened through incentives tied to change management and innovation.
For development-focused institutions:
a. Strong internal human resources improve service delivery to vulnerable populations, amplifying social and economic impact.
A Broader Message for Indonesia’s Workforce
As Indonesia continues to expand financial inclusion and digital services, human resource strategies must evolve. This study highlights that confidence and fairness—not just skills or technology—are essential foundations for organizational success.
By reinforcing self-belief and ensuring equitable compensation, institutions can build resilient employees capable of delivering consistent performance, even under pressure.
Author Profile
Nanang Komarudin, M.M. Perbanas Institute,
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