An Examination of How the Job Satisfaction Affects the Linkage between Compensation System and Lecturer Performance - A Case Study at a State University in Bali

A higher education institution needs to improve the performance of its lecturers, in order to be able to improve its performance as a whole and also to increase the satisfaction of its students. The lecturers’ performance could be enhanced by improving their job satisfaction and by developing a good compensation system. The conceptual model in this research is developed based on three previous pieces of research: (a) the work of Comm & Mathaisel (2003) and Chen et al. (2006), regarding the correlation of compensation system with job satisfaction, (b) the research conducted by Comm & Mathaisel (2003) and Carmeli & Freund (2004) on the influence of job satisfaction to job performance, and (c) the work of Jennings & McLauglin (1997) about the influence of compensation system to job performance. This research aims at testing a model about the influence of compensation system on the job satisfaction and the performance of university lecturers. The model is tested in a state university in Bali, Indonesia. Empirical data used in this research is collected through 150 set of questionnaires in the case university. Structural Equation Modeling (SEM) approach is used in the statistical data processing, using LISREL 8.8 application software. Results show that compensation system has a significant positive influence on the job satisfaction of the university lecturers, either directly or indirectly through job satisfaction.