The Role of Organization Citizenship Behavior (OCB) in Mediating

the Organizational Culture on the Performance of LPD Employees in

Badung Regency

I Gusti Ayu Dewi Adnyani, I Gusti Ngurah Jaya Widagda and I Wayan Wina Widyatama

Faculty of Economics and Business, Udayana University, Bali, Indonesia

Keywords: Organizational Culture, OCB, Employee Performance, LPD.

Abstract: This research is conducted based on the increasing competition in various economic sectors triggered by

globalization which makes it necessary for business practitioners to adapt their behavior, method, and

business strategy in order to maintain their existence and continuity of their business. The current

competition without exception was also felt by micro finance institutions, including the Village Credit

Institution (LPD). In the effort to improve employee performance, the company must have a strategy that is

certainly in accordance with the organizational goals. The implementation of OCB by employees in their

work place may result in an increase in employee performance, the unit/section performance in which the

employee works in, and the company performance as a whole. The organizational culture becomes the

guideline in the process of adapting to the organizational environment and the types of organizational

culture can become a predictor of performance or effectivity. Therefore, the purpose of this research is to

explain the role of OCB in mediating the influence of organizational culture on the performance of LPD

employees. This research is conducted in Badung Regency by taking 110 LPD employees as the sample.

The analysis method used is the SEM analysis.

The research result shows that organizational culture has a positive and significant influence on employee

performance of LPDs in Badung Regency. Organizational culture has a positive and significant influence on

the OCB of LPD employees in Badung Regency. Employee’s OCB has a positive and significant influence

on the performance of LPD employees in Badung Regency. OCB is able to significantly mediate the

influence of organizational culture on employee performance. This means that by developing OCB in

employees, the influence of organizational culture on the employee performance of LPDs in Badung

Regency will increase.

Thus, LPDs in Badung Regency must always develop the organizational values and search for methods to

encourage employees to work beyond their responsibility.

1 INTRODUCTION

The increasing competition in various economic

sectors has been triggered by globalization which

makes it necessary for the industry practitioners to

adjust their behavior, method, and business strategy

to be able to sustain the existence and continuity of

their business. Adaptability in responding the

changes in the internal and external environment of

the company is absolutely needed considering that

the environment is one of the dominant factors

which determines the continuity and competitive

advantage of a company (Porter, 1979; Mohant and

Rath, 2012). The competitions that occur nowadays

are also felt by microfinance institutions,

includingthe Village Credit Institutions or Lembaga

Perkreditan Desa (LPD).

The LPD is among the types of microfinance

businesses in Bali. The development of LPDs has

recently shown a fall in performance due to tight

competitions faced by the LPDs. The competitors of

the LPDs are the Bank Perkreditan Rakyat (BPR) or

Rural Banks, Saving and Loan Cooperatives, and the

loan sharks. To maintain the existence of the LPD,

adequate resources are needed. Among the resources

detrimental to the LPD’s performance is the Human

Resource.

The human resource factor influences the success

of the organization or company, especially in facing

Adnyani, I., Widagda, I. and Widyatama, I.

The Role of Organization Citizenship Behavior (OCB) in Mediating the Organizational Culture on the Performance of LPD Employees in Badung Regency.

DOI: 10.5220/0008493103570363

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 357-363

ISBN: 978-989-758-363-6

357

the tight competition today. This is also applicable in

banking businesses, in which one part of the internal

challenges of the banking business in facing

globalization is the human resource quality it has.

Qualified human resource is greatly needed in

businesses which require high level of work ethics,

such as microfinance institutions, because the

microfinance institution business is a business which

is highly dependent on trust. People will entrust their

financial matters, which can be regarding loans or

saving money, to finance institutions that have good

reputations, including the reputation of the

managers. Good reputation is definitely related to

the performance of the finance institution as an

organization or company. In the attempt to increase

the performance of employees, the company must

have strategies that are suitable with the

organizational goals. The indicators that can form

employee performance according to McNeese and

Smith (1996), consists of: the work results quality

level, the level of diligence and work endurance, the

level of discipline and attendance, the cooperation

level among employees, the degree of concern

regarding work safety, the level of responsibility

towards their work results, and the level of

initiative/creativity the employees possess.

From the results of evaluation conducted on the

employees of LPD in Badung Regency, it was found

that a majority of employees are not able to meet the

predetermined target regarding the distribution of

credit (lending) and third party fund raising. This

shows that the work result quality of employees is

low. Related to the underachievement of the

predetermined target by the LPD, employees have

not shown tenacity in their work endurance. For

example, a display of this characteristic would be the

willingness to add work hours to try hard to find

clients and reach the target assigned to each

employee. To date, the task of employees in

searching for clients are only based on the guidance

and instructions from the LPD Head. This occurs

because the LPD Head assesses that the employees’

lack the initiative or creativity in collecting the data

of potential clients to be prospected as the LPD’s

client.

The research regarding employee performance

have been conducted by other researchers such as: 1)

Hameed and Waheed (2011) who stated that

employees are valuable resources (assets) to the

organization. The success or failure of an

organization depends on the employee’s

performance. Therefore, organizations must invest a

large quantity of money on the development of

employees. 2) Shazadi et al. (2014) has underlined

that individuals working in business segments are

motivated by autonomy, freedom and responsibility

given in performing their task in accordance to the

position given by the management, 3) Zameer et al.

(2014) found that if the top management place their

focus on employee motivation, this will entail a

positive increase in employee performance, 4) Iqbal

et al. (2015) stated that companies with trained

employees will have positive impacts on the

performance of their employees.

1.1 Denison and Misra (1995) stated that

organizational culture has an influence on

performance. This statement is supported by theories

and empirical studies by experts that state that

organizational culture becomes a guide in the

adaptation process in an organizational environment

and the types of organizational culture can become

the predictors of performance and effectivity. The

studies conducted by Ojo (2009), Koesmono (2011),

andIndriani and Waluyo (2012) show that

organizational culture has a significant influence on

employee performance. These three studies stated

that corporate culture has an influence and is

positively related with employee performance.

However, there are also studies that have shown an

insignificant relationship between organizational

culture and employee performance. Yuan and Lee

(2011) stated that organizational culture has a weak

correlation with employee performance. The

research by Lim (1995) did not show any

relationship between culture and employee

performance.

In the recent years, there has been an increase in

interest in the strategic management process which

has a purpose to achieve work performances that

enable companies, including banks, to become more

competitive over time. This new concept requires

new alternative strategies for companies with

various types of needs in the dynamic market. Thus,

banks have to use alternative tools that are more

strategic to improve corporate performance through

their employees.

Another factor that can also increase employee

performance is the OCB. This was conveyed by

Chien (2003) by stating that several researches have

shown that OCB is positively related to individual

performance, unit performance, and organizational

performance. Thus, the implementation of OCB on

employees in the workplace can have an impact on

the performance of employees, performance of

unit/department where the employees are placed,

and the corporate performance as a whole. Every

company wants the employees to perform their tasks

exceeding what is stated in the job description, and it

ICEBM Untar 2018 - International Conference on Entrepreneurship and Business Management (ICEBM) Untar

358

has been proven that these companies have an

advantage compared to other companies (Hui et al.,

2000).

The research that showed that there is a

significant relationship between OCB and

performance was conducted by Alhamda and Sanusi

(2006) who stated that behavior as an organization

member and employee performance has a significant

relationship. Sugiyanto and Sutanto (2010) found

that between OCB and employee performance, there

is a positive influence. Azmi (2010) and Bachrach et

al., (2006) in their research found that OCB has a

significant influence on employee performance.

Likewise, Podsakoff et al., (2000) stated that there is

a positive relationship between OCB and employee

performance. From the results, these researches

explain and indicate that OCB influences the

improvement of employee performance.

2 CONCEPTUAL FRAMEWORK

AND RESEARCH HYPOTHESIS

Conceptual Framework of the Research.

The conceptual framework in this research refers to

a number of previous studies (journal) that are

related to employee performance. Previous research

related to the research variables was conducted by

Chien (2003) who examined the influence of

personality, organizational culture, work climate,

and organization resources on OCB. In the research,

Chien concluded that personality and organizational

culture were proven to influence OCB.

The research by Azmi bin Ali (2010) examined

the influence of OCB on employee performance. In

this research, it was found that the influence of the

OCB variable on employee performance is

significant. Along with the research conducted by

Tseng and Lee (2011), which examined the

influence of organizational culture, and leadership

style on the organizational commitment, and the

influence of personality, organizational culture, and

leadership style on employee performance. This

research concluded that the personality and

organizational culture variables have influences on

the employee performance.

Based on the conceptual framework which

explains the correlation among the variables, the

conceptual framework is formulated and displayed

in Figure 1.

2(+)

3(+)



1(+)

Organizational

Culture

Employee

erformance

OCB

Figure 1: Conceptual Framework of the Research.

Research Hypothesis:

Based on the conceptual framework, the research

hypotheses are formulated as follows.

H1:

Organizational culture has a positive and significant

influence on employee performance.

H2:

Organizational Culture has a positive and significant

influence on OCB.

H3:

OCB has a positive and significant influence on

employee performance.

H4:

OCB is able to mediate the influence of organizational

culture on employee performance.

3 RESEARCH METHOD

Viewed from the characteristics of the problem, this

research is categorized as a causality research. This

means that this research has the purpose to examine

the causal relationship between the variable of

organizational culture and OCB, along with

employee performance.

This research is conducted on the LPDs in

Badung Regency. The research subjects are the

LPDs in Badung Regency with research objects

related to employee performance. Based on the

problem statement and the hypothesis developed,

the variables in this research are identified as

follows:

1) The endogenous variable, namely the latent

variable in which the value is determined by

other variables in the model or is faced with an

arrow head (Solihin and Ratmono, 2013). The

endogenous variable in this research is employee

performance (Y).

2) The intervening variable, namely the variable

that influences the relationship between the

dependent variable, becomes an indirect

influence and is positioned between the

dependent variable and the independent variable,

thus the independent variable is indirectly

influenced by the dependent variable

(Indriantoro and Supomo, 2012:66). The

intervening variable in this research is the

organizational citizenship behavior (M).

The Role of Organization Citizenship Behavior (OCB) in Mediating the Organizational Culture on the Performance of LPD Employees in

Badung Regency

359

3) Exogenous variable, namely the latent variable in

which the value is determined by other variables

not included in the model or is not faced with an

arrow head (Solihin and Ratmono, 2013). The

exogenous variable in this research is the

organizational culture (X).

To define the variables related to the research object,

the operational definition of variables are explained

as follows:

Employee Performance (Y

Employee performance in this research is the work

result achievement of employees related to their

tasks and authorities that have been given by the

company in accordance with the ability and

competence of the employees, which is viewed from

the capacity and quality to achieve the goals as well

as vision and missions of the company. Performance

is closely related to the work result which

encompasses the quantity and even quality of an

employee to reach the organizational goals.

The indicators utilized to measure employee

performance in this research are the indicators

utilized by Mathis and Jackson (2009) and are

shown as follows:

1) Work Quantity (Y

2.1

This variable depicts the fulfillment of targets

that have been predetermined which also shows

the ability of the company in managing the

resources they have to achieve their goals. This

indicator is measured through the perception of

respondents, namely employees are able to

perform the job in line with the predetermined

quantity, amount/ volume of work is in line with

the expectation of the organization.

2) Work Quality (Y

2.2

This variable depicts the completion of work in

accordance to the demand of the organization.

This indicator is measured through the

perception of respondents, namely employees

who are able to complete their work with a

quality which meets the organization’s standards.

3) Working Time (Y

2.3

This variable depicts the working time deemed to

be most efficient and effective for all levels of

management. The working time is the basis for

employees to finish the work that they are

responsible for. This indicator is measured from

the perception of respondents on whether they

are able to finish their work punctually and

utilize their time effectively and efficiently.

4) Cooperation with Colleagues (Y

2.4

It is the support towards the success of the

organization in achieving their goals. Good

cooperation will result in trust from various

parties of interest, may it be directly or

indirectly related to the company. This indicator

is measured through the perception of

respondents, namely being able to cooperate

with colleagues and always behave positively in

each group work.

5) In Accordance with the SOP (Y

2.5

This variable depicts the completion of work in

line with the SOP that has been determined by

the organization. This indicator is measured

through the perception of respondents, namely

employees are able to perform their jobs in

accordance with the SOP available in the LPD.

Organizational Citizenship Behavior (Y

OCB in this research is the initiative behavior of

individuals that are not included in their job

descriptions but is performed voluntarily without

demanding rewards in order to fulfil the goals of the

company effectively and efficiently.

The indicators used to measure OCB in this

research are the indicators utilized by Organ et al.

(2006) which are shown as follows:

1) Altruism(Help Others) (Y

1.1

The attitude of helping other employees without

coercion in the jobs related to the operationals of

the organization. This indicator is measured

through respondents’ perception, namely helping

colleagues with excess work load as well as

cover up for the work of absent colleagues.

2) Conscientiousness (Y

1.2

The discretionary attitude performed by

employees in the form of taking action exceeding

the formal demand from the organization and

work exceeding the requirements determined by

the company. This indicator is measured through

respondents’ perception, namely: voluntarily

perform beneficial deeds for the organization and

comply to the regulation even without being

monitored.

3) Courtesy (Y

1.3

This attitude shows the concern towards

involvement in the corporation especially related

with attitudes that alleviate work problems faced

by others. This includes avoiding actions that

could cause others to work harder and decisions

that increase the workload of others. This

indicator is measured through the perception of

respondents regarding not creating problems

ICEBM Untar 2018 - International Conference on Entrepreneurship and Business Management (ICEBM) Untar

360

with colleagues and considering the impact on

colleagues for each action taken.

4) Civic Virtue (Y

1.4

The attitude that shows voluntary participation

and support towards the organizational functions

may it be professionally or social in nature, and

this awareness is the attitude of being responsible

and involved constructively in the organization’s

political process. This indicator is measured by

the respondents’ perception regarding

participation in various activities held by the

organization and provision of innovative

recommendations to increase the quality of the

organization.

5) Sportsmanship (Y

1.5

The discretionary attitude of employees and their

willingness to tolerate a little more than the ideal

condition without complaining and aversion

toward destructive matters, even though they are

irritated. This indicator is measured through the

perception of respondents, namely accepting

every policies upheld in the organization and

tolerating the discomfort felt at the workplace.

Organizational Culture (X).

Organizational culture (X) are the values, beliefs and

basic principles, in which are the basis for the

system and management practices and are also the

behaviors that improve and strengthen these

principles. Denison et al., (2006) conveyed several

statements regarding the dimensions of

organizational culture which are used to formulate

the instrument utilized in this research. The

indicators of the Organizational Culture variable

consist of:

(1) Always given the opportunity to be involved in

the organization’s planning process up to certain

limitations (X

)

(2) The opportunity to be actively involved in the

activities held by the organization (X

)

(3) Receive a warning if they violate the

organization’s regulations (X

)

(4) Able to adapt with the development in the

community (X

)

(5) Policies made for the interest of the community

)

(6) Clear organization targets (X

)

(7) Main tasks and functions of employees are clear

)

4 RESULTS AND DISCUSSIONS

Hypothesis Test Results.

The hypothesis test is conducted by utilizing the t-

test on each direct influence path partially. The

complete analysis result is available in the SEM

analysis results, which is displayed in the appendix.

Table 1 shows the hypothesis test results for the

direct influences.

Budaya

Org.

.53

x4e4

.64

x3e3

.24

x2e2

.68

x1e1

.73

OCB

.82

y1.1

.54

x5e5

GOODNESS OF FIT

Chi-Square=135.034

Probability=.109

CMIN/DF=1.164

GFI=.876

TLI=.983

CFI=.986

RMSEA=.039

AGFI=.836

.86

y1.2

.48

.80

.83

.73

.74

.47

y1.3

e10

.69

y1.4

e11

.86

Kinerja

.72

y2.5

e17

.60

y2.4

e16

.77

.83

.68

y2.3

e15

.82

.47

x6e6

.68

.66

x7e7

.81

y1.5

e12

.85

.62

y2.2

e14

.79

.45

y2.1

e13

.67

.38

.69

.93

.91

.90

.58

.86

Figure 2: SEM Model.

Table 1: Direct Influence Hypothesis Test Results.

Independent

Variable

Dependent

Variable

Path

Coefficient

p-value Description

Organizational

Culture (X)

Employee

Performance

(

)

S 0,003 significant

Organizational

Culture(X)

OCB (Y

) 0,828 0,000 significant

OCB (Y1)

Employee

Performance(

)

0,680 0,000 significant

Source : Appendix

Research Result Discussions.

From the validity and reliability calculation results,

it was found that all the indicators are able to

measure the variables and concepts being examined.

Additionally, between one concept and the other, all

are free. By conducting the confirmatory factor

analysis (the goodness of fit test and the factor

loading analysis), it was proven that the observed

variables can reflect the analyzed factors. By

conducting the overall goodness of fit test (goodness

of fit test and the regression weight causality test), it

has been proven that the model’s overall goodness

of fit and causality relationship developed can be

tested.

The Influence of Organizational Culture on

Employee Performance.

Based on Table 1, the organizational culture variable

is known to have a positive and significant influence

on the performance of LPD employees in Badung

The Role of Organization Citizenship Behavior (OCB) in Mediating the Organizational Culture on the Performance of LPD Employees in

Badung Regency

361

Regency. The proof can be seen from the p-value of

0,003 which is less than 0,05. The relationship

between the organizational culture variable and the

employee performance of LPDs in Badung regency

is positive which is shown by the inner weight value

of 0,436. This result can be interpreted as the higher

the organizational culture, the higher the employee

performance of LPDs in Badung Regency.

In this research, the indicators of the

organizational culture variable consists of the

opportunity to be involved in the organization’s

planning process with certain limits, the opportunity

to be actively involved in every event held by the

organization, receive warnings if they violate the

organization’s regulations, able to adapt with the

development in the community, policies are made

for the community’s interest, clear organizational

targets, and main tasks and functions of employees

are clear on the performance of LPD employees in

Badung Regency. This research result is in line with

the conditions faced by LPDs in Badung Regency.

The Influence of Organizational Culture on OCB.

Based on Table 1, the organizational culture variable

has a significant influence on OCB. This is proven

by the p-value of 0,034, which is lower than 0,05.

The relationship between the organizational culture

variable and the OCB variable shows a positive

influence marked by the inner weight value of 0,828.

This result can be interpreted as the higher the

organizational culture, the higher the OCB becomes.

In this research, the indicators of the

organizational culture variable, which consists of the

opportunity to be involved in the organization

planning process with certain limits, the opportunity

to be actively involved in every event held by the

organization, receive warnings if they violate the

organization’s regulations, able to adapt with the

development in community, policies are made for

the community’s interest, clear organizational

targets, and main tasks and functions of employees

are clear on the OCB of LPD employees in Badung

Regency. This research result is consistent with the

conditions faced by LPDs in Badung Regency.

The Influence of OCB on Employee Performance.

Based on Table 1, the OCB variable is known to

have a significant influence on employee

performance. This is proven by the p-value, which is

0,025, lower than 0,05. The relationship between the

OCB variable and the employee performance of

LPDs shows a positive influence which is marked by

the inner weight value of 0,680. This result can be

interpreted as the higher the industrial competition,

the higher the employee performance of LPDs in

Badung Regency.

In this research the indicators of OCB, which

include: help colleagues with excessive workload,

cover work for absent colleagues, voluntarily take

actions that are beneficial to the organization aside

from the main tasks, comply to the regulations even

without being monitored, to not create problems

with colleagues, consider the influence on

colleagues for each actions taken, participate in

various activities held by the organization, provide

innovative advices to improve the organization’s

quality, accept each policy set by the organization,

and tolerating the discomfort felt at the workplace

have important roles in increasing the employee

performance of LPDs in Badung Regency.

Conclusion.

Based on the research result, discussion and

interpretations that have been explained in previous

sections, by referring to several theories and

previous research results, the conclusions taken are

as follows: 1) Organizational culture has a positive

and significant influence on the Employee

Performance of LPDs in Badung Regency. 2)

Organizational culture has a positive and significant

influence on the OCB of LPD employees in Badung

Regency. 3) The OCB of employees has a positive

and significant influence on the Employee

Performance of LPDs in Badung Regency. 4) OCB

is able to significantly mediate the influence of

organizational culture on employee performance.

This means that by developing the OCB behaviors,

the influence of organizational culture on the

employee performance of LPDs in Badung Regency

will also increase.

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