Cogent Business & Management (Dec 2024)
Analysis of the effect of Islamic Leadership and Job Satisfaction on sharia engagement and employee performance of Islamic Banks in Indonesia
Abstract
This study aimed to analyze the effect of Islamic Leadership and Job Satisfaction on Sharia Engagement and Employee Performance to build a model linkage capable of enhancing the performance of Islamic banks in Indonesia, which can be implemented through managerial or internal policies. This is quantitative research with data collected by distributing questionnaires to 400 employees of Islamic Bank in Indonesia and analyzed using the SEM. The result showed that Islamic Leadership significantly affects Sharia Engagement and Job Satisfaction. Job satisfaction also has a significant effect on Sharia Engagement, and Sharia Engagement has a significant effect on Employee Performance. Meanwhile, Islamic Leadership and Job Satisfaction do not have the ability to significantly impact Employee Performance. The relationship between these variables shows that the Islamic Leadership model alone is not enough to improve Employee Performance. Its implementation tends to affect Job Satisfaction and increase Sharia Engagement, thereby affecting Employee Performance. Meanwhile, the indicator of Belief in Supervision from Allah SWT, has the smallest loading factor value. It indicates that the ukhrawi dimension was not properly implemented. This is a significant task for Islamic banking in Indonesia to be perceived as a product label and an integral dimension of employees. Study limits: Focus on specific variables, excluding factors like internal marketing and employee welfare. Data covers a three-year period for Sharia Banking employees, not fully capturing relationships for those with less experience. Neglects cultural aspects in Islamic banking management, offering an incomplete view of work culture in Indonesian Islamic banks.
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