The Influence of Additional Income on Employee Loyalty at the Department of Agriculture, North Tapanuli Regency
Keywords:
Additional Income, Employee loyalty, Organizational EffectivenessAbstract
This study investigates the influence of additional income on employee loyalty in the Department of Agriculture, North Tapanuli Regency. A total of 357 employees participated, and data were analyzed using descriptive statistics, validity and reliability tests, simple linear regression, and hypothesis testing. The descriptive results indicate that both additional income (M = 4.63; SD = 0.32) and employee loyalty (M = 4.52; SD = 0.52) are perceived at high levels, suggesting a generally favorable organizational environment in which financial incentives may enhance commitment and engagement. Validity and reliability tests confirmed that all research instruments were valid and reliable, with Cronbach’s Alpha values exceeding the threshold. The regression analysis demonstrates that additional income has a significant positive effect on employee loyalty, with a regression coefficient (B = 1.162–1.165), standardized Beta (0.732–0.785), and t-values (9.543–9.731), indicating strong predictive power. This suggests that for every one-unit increase in additional income, employee loyalty is expected to rise by approximately 1.16 units. The coefficient of determination (R² = 0.592; Adjusted R² = 0.643) shows that 59.2% of the variance in employee loyalty is explained by additional income, while the remaining 40.8% is influenced by other factors such as organizational culture, leadership, and non-financial incentives. The findings highlight the critical role of financial incentives in fostering employee loyalty in the public sector. Providing additional income is not only a motivator but also a strategic tool to enhance employee commitment, reduce turnover, and ensure consistent and effective service delivery in governmental institutions. These results offer practical implications for policymakers in designing employee compensation strategies and contribute to the academic literature on public sector human resource management.
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