The Role of Compensation and Leadership Style in Enhancing Employee Productivity in Chemical Manufacturing Companies in Tangerang Regency

Abstract

Employee productivity remains a critical challenge in the chemical manufacturing industry, particularly in emerging industrial regions where production demands, safety requirements, and workforce management complexity are increasing. This study examines the role of compensation and leadership style in enhancing employee productivity in the chemical industry in Tangerang Regency, Indonesia, with a specific focus on production employees. A quantitative research design was adopted using a census sampling technique involving 30 production workers. Data were collected through an online questionnaire using a five-point Likert scale.  Data were analyzed using IBM SPSS through validity and reliability testing, normality assessment, correlation analysis, coefficient of determination, multiple linear regression, and hypothesis testing using t-test and F-test. The findings reveal that both compensation and leadership style have significant positive effects on employee productivity, with leadership style emerging as the stronger predictor. The overall regression model is statistically significant, confirming the joint influence of both variables. This study contributes to human resource management literature by integrating compensation and leadership as complementary mechanisms in improving productivity within a high-risk manufacturing context. Managerially, the study suggests that chemical companies should align fair performance-based compensation with transformational leadership practices to enhance workforce performance and operational efficiency.