The Influence of Islamic Leadership, Compensation, and Human Relations on Employee Performance: A Study of Employees of Singkong Keju D-9 in Salatiga City

Abstract

Employee performance is a key factor in organizational success, including in micro, small, and medium enterprises (MSMEs), which face intense competition and complex human resource management. This study analyzes the effects of Islamic leadership, compensation, and human relations on the performance of employees of Singkong Keju D-9, a cassava-snack MSME in Salatiga City, Indonesia. Using a quantitative approach, data were collected through a questionnaire from 92 of the company’s 120 employees, a sample size determined with the Krejcie and Morgan table, and analyzed with partial least squares structural equation modeling (PLS-SEM) in Smart-PLS. Islamic leadership (β = 0.579, p < 0.001) and compensation (β = 0.326, p < 0.001) have positive and significant effects on employee performance, whereas the effect of human relations is positive but not significant (β = 0.099, p = 0.444). The three variables explain 89.7% of the variance in employee performance. Improving employee performance in this MSME therefore depends more on Islamic leadership and fair, sustainable compensation than on human relations.