The Influence of Employee Engagement and Job Satisfaction on Employee Performance in the Digital Transformation Era: A Study of Service Companies in Indonesia

Abstract

Digitalization is reshaping service organizations by altering routines, technology requirements, and expectations for employee output. This study investigates whether employee engagement and job satisfaction are associated with employee performance in Indonesian service companies. A quantitative explanatory cross-sectional survey was conducted with 200 purposively selected employees using a five-point Likert questionnaire. Employee engagement was assessed through vigor, dedication, and absorption; job satisfaction through work characteristics, compensation and recognition, supervision, coworkers, and communication; and employee performance through task and contextual performance. The data were examined using descriptive statistics, correlation analysis, reliability assessment, and multiple linear regression. Employee engagement showed a positive but non-significant coefficient (B = 0.113; p = 0.157), whereas job satisfaction had a very small negative and non-significant coefficient (B = −0.034; p = 0.698). The joint regression model was also non-significant (F = 1.092; p = 0.338; R² = 0.011). The results indicate that these two employee-related factors explain only a small part of performance differences, suggesting that organizational and digital-work conditions should also be considered.