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ABSTRACT:

Banks are financial institutions that act as important intermediaries, especially in financial transactions and the national economy. Banks need to optimize their business performance. The company's business performance cannot be separated from the quality of human resources and the role of employee performance. High-quality human resources and effective compensation are important drivers of employee performance, both directly and through increased job satisfaction. This study aims to analyze the effect of human resource quality and compensation on employee performance with employee satisfaction as a mediating variable. This research was conducted at Rural Bank in Bali. Respondents in this study were 57 employees. The analysis technique in this study is Partial Least Square. The findings of this study: 1) human resource quality has a significant positive effect on employee performance 2) compensation has a significant positive effect on employee performance 3) human resource quality has a significant positive effect on employee job satisfaction 4) job satisfaction can positively and significantly mediate the effect of compensation on employee performance 5) job satisfaction can positively and significantly mediate the effect of human resources on employee performance. The practical implications of the research for human resource managers are to increase employee satisfaction through managing the quality of human resources and providing fair compensation as a strategy to encourage optimal performance. This research also makes a theoretical contribution to understanding the mediating mechanism of employee satisfaction in the context of the relationship between human resource quality, compensation, and employee performance.

KEYWORDS:

Employee Satisfaction, Human Resource Quality, Compensation, Employee Performance, Rural Bank

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