Vision

Abstract

This study aims to examine the effect of Islamic visionary leadership on organisational commitment and its impact on employee performance. This study uses explanatory quantitative research on 20 state-owned enterprises (BUMN) in the food and technology cluster in Indonesia, with 85 respondents who were processed using the structural equation modelling (SEM) with partial least square (PLS) (SEM-PLS) approach. The results of the study indicate that Islamic visionary leadership directly influences organisational commitment to the organisation in the food and technology cluster state-owned enterprises in Indonesia; Islamic visionary leadership directly influences employee performance in the food and technology cluster BUMN companies in Indonesia; Islamic visionary leadership indirectly influences employee performance through organisational commitment in the technology and food cluster BUMN companies in Indonesia; and organisational commitment affects employee performance in the technology and food cluster BUMN in Indonesia, Jakarta.

Contribution: The results of this study show that the application of Islamic teachings in the leadership of organisations can improve organisational commitment and the performance of employees in the organisation in an Islamic context.

Keywords: Islamic visionary leadership; organisational commitment; employee performance; Islamic context; food and technology.

Source: Yopi Yulius, https://hts.org.za/index.php/hts/article/view/7722/23178
This work is licensed under a Creative Commons Attribution 4.0 License.

Introduction

Employee performance shows the ability of employees to carry out all the tasks that are their responsibility. The success of an organization is dependent on the good and bad performance of the organization. Organizational performance depends on employee performance, where each employee plays a significant role in the running of a company or institution. Good performance of employees will have a direct impact on the success and failure of a company or agency.

Organizations that are successful in achieving their goals and being able to fulfill their responsibilities are highly dependent on leaders. If the leader is able to carry out his or her responsibilities well, it is very likely that an organization will achieve its goals. An organization needs an effective leader who has the ability to influence the behavior of its employees. In addition, employees must also have motivation and a high level of discipline in achieving success and the desire to achieve optimal results. In accordance with the theory mentioned by Kasmir, there are several factors that influence employee performance, namely abilities and expertise, knowledge, work design, personality, work motivation, leadership, leadership style, organizational culture, job satisfaction, work environment, loyalty, commitment and work discipline.

Ethics and moral principles are among the topics that are emphasized in the application of Islam in society, so that the Prophet of Islam has introduced the purpose of his mission to perfect moral virtues. Therefore, ethics as a set of values, do's and don'ts can play an important role in the effective management of organizations. Discipline, kindness, justice, constructive association, counseling, humility, covenant fulfillment, service and tolerance are among the desirable ethical methods emphasized by Islam in the management of organizations. To achieve these goals, it is necessary to develop a code of ethics and implement it in organizations. In this sense, by creating executive assurances and instituting ethical behavior in organizations, ethics and ethical principles can be strengthened in the organization, which if realized will reduce discrimination, injustice and dissatisfaction while increasing organizational morale and employee commitment. Meanwhile, growth and excellence of human beings will lead to the growth of organizations and the development of society.

If we consider the religion of Islam as a set of practical beliefs and instructions which, according to the claimant and the followers of those beliefs and instructions (the Prophet of Islam and Muslims), are from the creator of the world, and morality as a set of teachings that lead the way of living properly. Interestingly, revealing what can and should not be done from the values that govern human behavior, we will understand the close relationship between religion and morality, and we will consider morality as an inseparable part of religion. Therefore, talking about the ethics attributed to Islam is proper, discussing the moral system of Islam is justified and talking about the general structure governing this system is something worth pondering and thinking about.

Performance appraisal is basically a key factor in developing an organization effectively and efficiently because of better policies or programmes for human resources in the organization. Individual performance appraisal is very useful for the growth of the organization as a whole; through this, the employee's performance can be assessed. Employee performance improvement is based on successful implementation of Islamic visionary leadership, personality, work environment and organizational commitment.

One of the factors that influence performance is leadership style, such as the Islamic visionary leadership style. It is needed to advance an organizational institution, both in government agencies and private companies. An Islamic visionary leader has a clear vision and mission in the organization; Islamic visionary leaders are very smart in observing future events and can describe their vision and mission clearly. Leaders can raise the spirits of their employees by using their motivation and imagination to make an organization more alive and to move all the components in the organization so that the organization can continue to grow.

If Islamic visionary leadership style is applied in organizational institutions, both government agencies and private companies will succeed because Islamic visionary leadership has high integrity and is an example of good leadership for the future. Islamic visionary leaders can also protect their subordinates well if there are difficulties. The failure of an organization is caused by a leader because he or she cannot formulate his or her vision into the mission of his or her organization, and most organizations are not responsible for the vision and mission made by the leader of the organization. This is supported by the results of previous research, namely Kurniadi, Lian and Wahidu, suggesting that Islamic visionary leadership has a positive and significant effect on employee performance. Furthermore, research by Miharja and Hayati stated that Islamic visionary leadership has a positive and significant effect on employee performance. In addition, Saba, Ali and Dan Ahmer explained that Islamic visionary leadership has a positive and significant effect on employee performance. Research by Shahab and Nisa suggested that Islamic visionary leadership has a positive and significant effect on employee performance. Research by Shanti, Imam and Dan Ahmad supported that Islamic visionary leadership has a positive and significant effect on employee performance. Likewise, research by Wang, Shieh and Dan Tang stated that Islamic visionary leadership has a positive and significant effect on employee performance. By accepting the position, it is considered that one accepts the public's trust and it is haram to accept the obligatory trust and betray it: God commands a leader to trust in the people (Surah An-Nisa, verse 58). Whether material or spiritual, for a real person or legal entity, every person is responsible for doing certain work that is permissible for a certain obligation, and if they deliberately refuse to do so, the rights they receive are haram. Also, it is haram if he or she wants to take money from the client to violate the rights of others or to realise the falsehood and invalidation of rights or if he or she has done something that is prohibited. One should not spend one's wealth in vain, which is outside the axis of religion and divine law, and one should not deliberately give them to judges and rulers in order to seize some property and the rights of others through this forbidden act.

The Holy Quran, the Sunnah of the Prophets and the behavior of the Imams are the main sources of moral codes and moral models, so conducting research on the Islamic work ethic, reviving the use of the Islamic work ethic and creating Islamic ethical models in international business is very important. Currently, research on the Islamic work ethic in Islamic countries is underway which seeks to revive the Islamic work ethic in accordance with the golden age of Islam in the 4th and 5th centuries AH. Consequently, research on the Islamic work ethic and its impact on job performance is a topic that needs further explanation; therefore, the purpose of this study is to investigate this issue. Explaining the importance of this research, it should be said that because the employees of various organizations are an important part of the active force of society and as a result of the nature of their job, which is related to ethical issues, the need for research is felt in government organizations. Therefore, explaining the effect of Islamic work ethic on employees' job performance can be a great guide for managers to improve the effectiveness of their employees' work activities by institutionalizing a work ethic. As the effects of the Islamic work ethic on individual and organizational variables and especially individual job performance in the organization have not been studied so far, the role of job satisfaction mediation and organizational commitment in the relationship between Islamic work ethic and job performance were considered in this research.

Literature review

Islamic visionary leadership

Ansar argued that Islamic visionary leadership is the act of a leader to influence or encourage others to create and articulate a realistic, credible and attractive vision of the future that can improve current circumstances. Goleman) supported the view that Islamic visionary leadership is a leadership pattern that seeks to move people towards a shared dream with the most positive emotional climate, and it is most appropriate to use when change requires a new vision or when it requires clear direction. According to Bennis, 'the first basic ingredient of leadership is a guiding vision'. Every leader should have a clear view of what he or she wants to do. Likewise, Syarif and Lina expressed that Islamic visionary leadership is an effort to influence others in achieving organizational goals based on the vision that has been set effectively with the dimensions of setting superior standards and reflecting high ideas, clarifying goals and directions, generating enthusiasm and maintaining commitment, effective communication, reflecting the uniqueness of the organization and using different competencies and ambition. Similarly, Kippenberg and Stam described Islamic visionary leadership as the leader's communication about the future vision for teams and organizations to persuade others to contribute to the realisation of that future. Furthermore, Kurniadi et al. suggested that Islamic visionary leadership can be defined as the ability of a leader to create, transform and implement his or her ideal thoughts.

Based on the given explanation, it can be concluded that Islamic visionary leadership is the style of a leader who places more emphasis on organizational members to contribute and focus on achieving the vision and picture of the company's future so that organizational members are clearly directed. With Islam's emphasis on justice, honesty and generosity, as well as the views of the Qur'an and the Prophet and the Imams on earning a lawful living and obliging Muslims to engage in economic work, the importance of work ethic in Islam is worth considering. But unfortunately, in our society, despite the many emphases, less attention has been paid to work ethic. While in some countries it has been considered an important issue in management, by reviewing previous articles and researches, this study shows that Islamic work ethic has positive effects on both job satisfaction and organizational commitment. Explaining its effects can be a good guide for managers to improve the effectiveness of their employees' work activities by institutionalising an Islamic work ethic.

Organizational commitment

Syarif and Lina stated that organizational commitment reflects the strength of employees in identifying self-involvement into organizational parts, characterised by acceptance of the values and goals of the organization, readiness and willingness to fight earnestly on behalf of the organization and the desire to maintain membership in the organization. In addition, Dharmawan explained that organizational commitment is the desire of employees to maintain membership in the organization and willingness to do business for the achievement of organizational goals. McDonald stated that organizational commitment is a psychological agreement signed between people and organizations. In conclusion, organizational commitment is related to the strong desire of employees in the form of active involvement and participation in the organization, cognitive and affective. Likewise, Kreitner and Kinicki revealed that organizational commitment is the extent to which a person knows the company and its goals. As shown in Newstorm, the organizational commitment is the level or degree of self-identification of employees with the organization and their desire to continue their active participation in the organization. Luthans explained that organizational commitment is a strong desire to remain a member of the organization, the desire to demonstrate a high level of business on behalf of the organization and a strong belief in accepting the values and goals of the organization.

Based on the given explanation, it can be concluded that organizational commitment is the extent to which employees believe in the organization by involving themselves emotionally and psychologically with a view to assisting the organization in achieving its goals.

Employee performance

Colquitt, Lepine and Wessone stated that employee performance is a set of values from employee behaviour that contribute both positively and negatively to the achievement of organizational goals. Furthermore, Gibson, Ivancevich and Donelly argued that employee performance is a set of work outputs related to organizational goals such as quality, efficiency and effectiveness. In addition, Deddy and Veithzal explained that performance is oriented to each person or employee with respect to their achievements in the company.

Based on this discussion, it can be concluded that employee performance is a set of assessments of employee behavior and actions in providing good contributions and outputs for the progress of the organization.

Theoretical framework

Yates et al. explained in their research that Islamic visionary leadership has a positive and significant impact on employee commitment to the organization. Basri, Dewi and Purba stated in their research that Islamic visionary leadership has a positive and significant impact on employee commitment to the organization. Isma et al. stated in their research that Islamic visionary leadership has a positive and significant impact on employee commitment to the organization. Kesumayani et al. revealed in their research that Islamic visionary leadership has a positive and significant impact on employee commitment to the organization, supported by Pulungan et al. in their research that Islamic visionary leadership has a positive and significant impact on employee commitment to the organization. Likewise, Syarif and Lina stated in their research that Islamic visionary leadership has a positive and significant impact on employee commitment to the organization.

Kurniadi et al. suggested that Islamic visionary leadership has a positive and significant effect on employee performance. Research by Miharja and Hayati stated that Islamic visionary leadership has a positive and significant effect on employee performance. Furthermore, Saba et al. explained that Islamic visionary leadership has a positive and significant effect on employee performance. Research by Shahab and Nisa suggested that Islamic visionary leadership has a positive and significant effect on employee performance, supported by research by Shanti et al. that Islamic visionary leadership has a positive and significant effect on employee performance. Likewise, research by Wang et al. stated that Islamic visionary leadership has a positive and significant effect on employee performance.

Hendri in his research stated that organizational commitment has a positive and significant effect on employee performance. Marie, Zhen and Xiong showed that organizational commitment had a positive and significant effect on employee performance. Then, research by Eliyana, Syamsul and Muzakki stated that there is an influence between transformational leadership, job satisfaction on organizational commitment and its implications on employee performance. Furthermore, research by Chen, Anne and Farh explained that employee organizational commitment has more influence on employee performance than loyalty to supervisors. The same thing was revealed by the research of Chen and Francesco, that there is an influence between organizational commitment and employee performance. Cesario and Chambel's research explained that the higher the employee's commitment to the organization, the easier it is to achieve an increase in employee performance. Then research by Astuty and Udin stated that employee commitment to the organization can practically improve employee performance. Also, research by Arifina et al. showed that employees need to have high organizational commitment to achieve significant performance improvements.

Methodology

This study used a quantitative method with an explanatory approach. The population in this study were employees of the technology and food cluster BUMN companies in Indonesia. The number of samples was 20 BUMN companies in the technology and food cluster in Indonesia with 85 respondents, where the sample was obtained based on the rule of thumb from the statistical analysis used. The data collection technique in this study was a questionnaire using a Likert scale. Data were analyzed using structural equation modelling (SEM) with a partial least square (PLS) approach. The hypotheses in this study are shown in Table 1.

TABLE 1: Research hypotheses.

Some of the barriers are related to managers and human resources of organizations. A number of them returned to the organizational structure and although some obstacles are outside the organization, they affect the organization. Barriers to human resource managers include lack of a strategic approach to professional ethics, being delivery-oriented, being stingy versus fiduciary, projected and paradoxical to one's condition, rivalry and misrepresentation of competitors, instrumental customer orientation, lack of motivation or job dissatisfaction, communication behavior patterns, lack of decision-making skills and moral uncertainty. organizational barriers are a lack of participatory management, a lack of a comprehensive ethical system of employment, a lack of comprehensive and ethical systems of payment, physical and psychological barriers of the workplace, barriers to organizational training, regulatory gaps, a lack of multidimensional ethical charters, a lack of comprehensive and ethical systems of supervision and evaluation, organizational culture (threat or opportunity), informal organizations (slide or ladder), a lack of conflict management and a lack of information systems. Obstacles to the external environment include industrial governance, socio-cultural barriers, laws against morality, economic barriers, political barriers, technological barriers and global barriers.

Results

The aim of this study was to investigate the effect of Islamic work ethic on individual job performance by considering the mediating role of organizational commitment and job satisfaction among employees. In the first part, the validation of the results is investigated by model evaluation.

Validity and reliability

From Table 2 it can be seen that the data that have been processed using the Wrap-PLS application shows convergent validity in the study, showing that each variable has a loading factor value above 0.5, which means that the questionnaire instrument used in this study is valid and represents the condition of the Islamic visionary leadership variables of organizational commitment and employee performance. Table 2 shows that the average variance extracted (AVE) value is greater than 0.5, which means that this research questionnaire has met discriminant validity. In addition, the variables from Table 2 have met the composite reliability, where the value is more than 0.70, which means that the research is feasible to continue in the hypothesis testing process.

TABLE 2: Evaluation of the model to determine the validity and reliability of constructs.

Hypothesis testing

Table 3 shows that the t-test value in hypothesis 1 is greater than t-table 1.96, which means that there is a significant influence between Islamic visionary leadership and organizational commitment. Then the results of the t-test on hypothesis 2 are also greater than t-table 1.96, which means that there is a significant influence between Islamic visionary leadership and employee performance. The results of the t-test on hypothesis 3 are also greater than t-table 1.96, which means that there is a significant relation between organizational commitment and employee performance.

TABLE 3: Hypothesis testing for direct effect.

Islamic visionary leadership has an indirect influence on employee performance through organizational commitment. It can be seen from Table 4 that there is a path coefficient of 0.403052 for the indirect effect of Islamic visionary leadership on employee performance through organizational commitment.

TABLE 4: Hypothesis testing for indirect effect.

Discussion

H1: The effect of Islamic visionary leadership on organizational commitment

Islamic visionary leadership has a direct influence on organizational commitment, which means that if a leader has a Islamic visionary leadership style, there will be an increase in employee commitment to the organization. This study supports the results of Yates et al., Basri et al., Isma et al., Kesumayani et al., Pulungan et al. and Syarif and Lina that there is a significant relation between Islamic visionary leadership and organizational commitment.

H2: The effect of Islamic visionary leadership on employee performance

From the given calculation results and hypothesis testing, it can be seen that Islamic visionary leadership has a direct effect on employee performance in this study, which means that leaders who have a Islamic visionary leadership style can improve their performance. This study supported the research results of Kurniadi et al., Miharja and Hayati, Saba et al., Shahab and Nisa, Shanti et al. and Wang et al., who explained that Islamic visionary leadership can improve employee performance.

H3: The effect of Islamic visionary leadership on employee performance through organizational commitment

Islamic visionary leadership has an indirect influence on employee performance through organizational commitment, which means that leaders with a Islamic visionary leadership style can foster a sense of commitment and performance in employees. This study supports the results of Yates et al., Basri et al., Isma et al., Kesumayani et al., Pulungan et al., Syarif and Lina, Kurniadi et al., Miharja and Hayati, Saba et al., Shahab and Nisa, Shanti et al. and Wang et al. that there is a significant relation between Islamic visionary leadership and employee performance through organizational commitment.

H4: The effect of organizational commitment on employee performance

organizational commitment has a direct influence on employee performance, which means that employees who have a high level of commitment to the organization will do a good job, so that their performance increases. This research supports the results of Hendri's research, agreeing with Marie et al., Eliyana et al., Chen et al., Chen and Francesco, Cesario and Chambel, Astuty and Udin and Arifina et al. that there is a significant relation between organizational commitment and employee performance.

Conclusions

In this study, it was found that the Islamic work ethic has a positive effect on job performance. Therefore, considering the positive relationship between work ethic and job performance of employees, it is suggested that while selecting and hiring people for high performance, Islamic work ethic indicators should be used as one of the selection filters to help the organization to attract ideal people who achieve high performances. Managers of the organization under study are advised to identify individual feelings and behaviors, lead employees to ethical values and cultivate belief in and commitment to ethical and organizational values among employees of the organization, so that they can improve ethical and work performance. The results showed that the ups and downs of organizational commitment and employee performance in the organization were influenced by Islamic visionary leadership. Based on the result of the study, it can be seen that Islamic visionary leadership has a partial effect on organizational commitment, which means that leaders who have Islamic visionary style can support the commitment of employee to organization. Islamic visionary leadership also has an effect on employee performance, which means that leaders who have an Islamic visionary style motivate the employees for high performance. Furthermore, Islamic visionary leadership affects on employee performance through organizational commitment, which means that higher the Islamic visionary style of the leader, the higher the organizational commitment and employee performance. In addition, organizational commitment affects employee performance, which means that the higher the commitment of employees, the higher the performance they have.