EFFECT OF EMPLOYEE LOYALTY AND COMMITMENT ON ORGANIZATIONAL PERFORMANCE WITH CONSIDERING ROLE OF WORK STRESS

Abstract

The objective of this study is to examine the effect of employee loyalty, employee commitment and work stress on organizational performance of Indonesian education sector. For this purpose, a questionnaire survey was used, and data were collected from school teachers. Data were analysed by using statistical software, namely; Partial Least Square (PLS). Results of the study demonstrated that loyalty is one of the important ingredients of organizational performance among educational institutions. It is found that employee loyalty is key contributor to organizational performance. Employee loyalty effect positively on employee commitment which lead to the organizational performance. Employee commitment is playing a mediating role between employee loyalty and organizational performance. In addition, work stress shows the negative effect on organizational performance. Thus, the current study has valuable insights for practitioners while making the strategies for educational institutions. Most of the previous investigations focused on various educational institutions in various development and developing countries, however, Indonesian educational sector is neglected. Particularly, the low performance of Indonesian education sector is not address by the literature. Therefore, this study is an attempt to address this literature gap by incorporating employee loyalty and employee commitment.