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The beauty salon industry represents a service sector that heavily relies on the quality of direct employee-customer interactions (high-contact service). This study aims to analyze the effect of work motivation and work recognition on employee performance, with employee engagement acting as a mediating variable among beauty salon employees in the Ambarawa region, Semarang Regency. The theoretical framework integrates the Supportive Workplace Environment Model and Social Exchange Theory (SET).
This study adopted a quantitative descriptive approach and a verificative research design. The population comprised all beauty salon employees in the Ambarawa region, Semarang Regency. A total census sampling (saturated sampling) technique was employed, yielding 55 respondents. Primary data were gathered via structured questionnaires utilizing a 5-point Likert scale administered online. Data analysis was conducted using Partial Least Squares Structural Equation Modeling (SEM-PLS) executed through SmartPLS version 4 software.
The findings revealed that: (1) Work motivation has a positive and significant effect on employee performance (β = 0.280; p = 0.021$); (2) Work recognition has a positive and significant effect on employee performance (β = 0.288$; p = 0.015); (3) Work motivation has a positive and significant effect on employee engagement (β = 0.665; p = 0.000), representing the most dominant direct relationship in the structural model; (4) Work recognition has a positive and significant effect on employee engagement (β = 0.313$; p = 0.026); (5) Employee engagement has a positive and significant effect on employee performance (β = 0.423; p = 0.001); (6) Employee engagement significantly mediates the relationship between work motivation and employee performance ( = 0.281; p = 0.010) displaying partial mediation (VAF = 50.0%); and (7) Employee engagement significantly mediates the relationship between work recognition and employee performance (β = 0.232$; p = 0.044) also demonstrating partial mediation (VAF = 31.4%). The coefficient of determination (R2) indicates that work motivation and work recognition explain 94.0% of the variance in employee engagement, and jointly account for 95.6% of the variance in employee performance.
The managerial implications highlight that salon owners and managers should empower employees by allowing job initiative, implementing consistent employee recognition programs, and fostering a collaborative workplace climate to enhance employee engagement, thereby driving sustained service performance