The Effect of Compensation and Workload on Employee Ethical Behavior at PT. XYZ in Jakarta

Lutfi Akbar Fauzi; Didin Kristinawati

doi:10.59261/jbt.v7i3.674

Authors

Lutfi Akbar Fauzi Universitas Telkom
Didin Kristinawati Universitas Telkom

DOI:

https://doi.org/10.59261/jbt.v7i3.674

Keywords:

Compensation, Employees’ Ethical Behavior, Human Resource Management, PT. XYZ, Workload

Abstract

Background: PT. XYZ is a national energy management and distribution company that applies Good Corporate Governance principles to ensure transparent and ethical operations. Despite improved employee compensation, the increasing number of ethical violation complaints over the past three years indicates ongoing challenges in maintaining employees' ethical behavior.

Objective: This study examines the effects of compensation and workload on employees' ethical behavior at PT. XYZ using Equity Theory and the Job Demands–Resources Model to explain how compensation fairness and the balance between job demands and organizational resources influence ethical behavior.

Methods: This study employs a quantitative method with a causal design, collecting data through Likert scale questionnaires distributed to 124 permanent employees of PT. XYZ. The variables analyzed include compensation and workload as independent variables, and employees' ethical behavior as the dependent variable. Data analysis is conducted using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to test the partial and simultaneous effects among the variables studied.

Results: The SEM-PLS analysis revealed that compensation has a positive and significant effect on employee ethical behavior (path coefficient = 0.655; T-statistic = 15.173; p < 0.05), while workload has a negative and significant effect (path coefficient = -0.480; T-statistic = 10.414; p < 0.05). Simultaneously, both variables explain 79% of the variation in employee ethical behavior (R² = 0.790), demonstrating a strong predictive model (SRMR = 0.037).

Conclusion: These findings confirm that fair compensation strengthens employee integrity, while excessive workload undermines ethical conduct. Organizations are advised to optimize compensation schemes and restructure workload distribution to cultivate a professional, ethical, and high-performance work environment.

References

Adams, J. S. (1963). Toward An Understanding of Inequity (pp. 422–436). Journal of Abnormal and Social Psychology.

Armoti, A. Al, Abdullah, H., & Noor, A. S. (2022). Impact of business ethics on employee ’ s productivity and organization growth : Case study at Emaar Properties Corporation , Dubai , UAE. Asian Management and Business Review, 2(2), 139–146. https://doi.org/10.20885/AMBR.vol2.iss2.art3

Armstrong, M., & Taylor, S. (2013). Armstrong’s Handbook of Human Resource Management Practice (13th ed.). In Kogan Page Limited. https://doi.org/10.4135/9780857021496

Baljija, S. K., & Min, K. S. (2023). Evaluating the effectiveness of whistleblower protection: A new index. Data and Policy, 5. https://doi.org/10.1017/dap.2023.20

Bell, C. Y. (2025). Aligning Compensation System Strategies With Ethical Conduct : Aligning Compensation System Strategies With Ethical Conduct : Lessons From Call Centers. Compensation & Benefits Review, 57(July), 276–292. https://doi.org/10.1177/08863687251356525

Chenarboo, F. J., Hekmatshoar, R., & Fallahi, M. (2022). The influence of physical and mental workload on the safe behavior of employees in the automobile industry. Heliyon, 8(10), e11034. https://doi.org/10.1016/j.heliyon.2022.e11034

Clercq, D. De, & Pereira, R. (2024). How overloaded employees can use resilience and forgiveness resources to overcome dissatisfaction and maintain their knowledge-sharing efforts. International Journal of Organizational Analysis, November. https://doi.org/10.1108/IJOA-10-2023-4056

Cropanzano, R. S., & Ambrose, M. L. (2015). Organizational Justice: Where We Have Been and Where We Are Going. Oxford University Press, June, 3–14. https://doi.org/10.1093/oxfordhb/9780199981410.013.1

Demerouti, E., Nachreiner, F., Bakker, A. B., & Schaufeli, W. B. (2001). The Job Demands Resources Model of Burnout. In Journal of Applied Psychology (pp. 499–512).

Farooq, K., Yusliza, M. Y., Wahyuningtyas, R., Haque, A., & Muhammad, Z. (2021). Exploring Challenges and Solutions in Performing Employee Ecological Behaviour for a Sustainable Workplace. 1–19.

Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial Least Squares Structural Equation Modeling ( PLS-SEM ) Using R. Springer.

Jayeoba, F. I., Genty, K. I., & Adeoye, A. O. (2025). Ethical Compensation and Employee Productivity. IGI Global, 171–190. https://doi.org/10.4018/979-8-3693-8819-8.ch009

Kavitha, S. (2025). The Impact of Human Resource Practices on Organizational Performance: The Mediating Role of Work Engagement. International Research Journal of Multidisciplinary Scope (IRJMS), 6(September 2024), 213–225. https://doi.org/10.47857/irjms.2025.v06i01.02661

Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration, 11(4), 1–10. https://doi.org/10.4018/ijec.2015100101

Kristinawati, D., & Galib, G. K. (2025). Strategic workload management in digital business : Lessons from a case study on internet service provider company. 5(1), 1–12.

Lavion, D. (2018). PwC’s global economic crime and fraud survey 2018. PwC. com.

Luthans, F. (2011). Organizational Behavior :an evidence-based approach (12th ed.). In McGraw-Hill Irwin.

Mukti, D. P., & Dudija, N. (2015). Organizational Change Dynamics : A Learning Organization Process toward World Class Organization. Isclo, 69–78.

Norina, S., & Sary, F. P. (2025). Ethical leadership and Gen Z : Enhancing work engagement through trust in Bandung city. 9(5), 444–456. https://doi.org/10.55214/25768484.v9i5.6891

Núñez-Sánchez, J. M., Molina-Gómez, J., Mercadé-Melé, P., & Almadana-Abón, S. (2024). Boosting Competitiveness Through the Alignment of Corporate Social Responsibility, Strategic Management and Compensation Systems in Technology Companies: A Case Study. Sustainability (Switzerland), 16(21). https://doi.org/10.3390/su16219480

Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879

Prasetyo, I., Endarti, E. W., Endarto, B., Aliyyah, N., Rusdiyanto, Tjaraka, H., Kalbuana, N., & Rochman, A. S. (2021). Effect of compensation and discipline on employee performance: a case study Indonesia. Journal of Hunan University（Natural Sciences, 48(6), 277–298. http://elibs.unigres.ac.id/id/eprint/723

Rahadi, D. R. (2023). Pengantar partial least squares structural equation model(pls- sem) (Issue August). Lentera Ilmu Madani.

Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior (15th ed.) Fifteenth Edition. In Pearson.

Saleem, A., Khurrum, M., Bhutta, S., Abrar, M., Waseem, M., & Bashir, M. (2024). Leader’s ethical behavior: A precursor to employees’ well-being through emotions management. Acta Psychologica, 249(June), 104453. https://doi.org/10.1016/j.actpsy.2024.104453

Sekaran, U., & Bougie, R. (2016). Research Methods for Business: A Skill-Building Approach (7th ed.). WILEY.

Sugiyono. (2023). METODE PENELITIAN KUANTITATIF, KUALITATIF, DAN R&D (M. Dr. Ir. Sutopo. S.Pd (ed.); 2nd ed.). Alfabeta.

Teshome, M. M., Meles, T. Y., & Yang, C. L. (2024). Productivity improvement through assembly line balancing by using simulation modeling in case of Abay garment industry Gondar. Heliyon, 10(1), e23585. https://doi.org/10.1016/j.heliyon.2023.e23585

Velasquez, M. G. (2011). Business Ethics Concepts and Cases (7th ed.) Seventh Edition. Pearson.

Zayed, N. M., Rashid, M. M., Darwish, S., Faisal-E-Alam, M., Nitsenko, V., & Islam, K. M. A. (2022). The Power of Compensation System (CS) on Employee Satisfaction ( ES ): The Mediating Role of Employee. Economies.