The Role of Job Satisfaction as a Mediator in the Impact of Work Environment and Flexibility on Employee Performance

Abstract

This study investigates the impact of work environment and work flexibility on employee performance, with job satisfaction as a mediating variable, in the Currency Management Department at Bank Indonesia. Using Structural Equation Modeling based on Partial Least Squares (SEM-PLS), the research analyzes how both the work environment and work flexibility contribute to employee performance, mediated by job satisfaction. The findings reveal that both the work environment and work flexibility significantly and positively influence employee performance. Additionally, the work environment and work flexibility are shown to significantly affect job satisfaction, which in turn enhances employee performance. Job satisfaction was found to mediate the relationship between the work environment and employee performance, as well as between work flexibility and employee performance. The study highlights the importance of a conducive work environment and flexible work policies in improving employee satisfaction and performance. The results contribute to human resource management literature by demonstrating that work conditions and flexibility are essential factors influencing employees' attitudes and behaviors. Practical implications for Bank Indonesia include the need to continuously improve work environments and implement structured work flexibility policies to enhance employee satisfaction and performance. Limitations of the study include its focus on a single department and the cross-sectional nature of the data, suggesting that future research could expand the scope and adopt a longitudinal approach.