Model altruism in improving organizational performance in social welfare institutions ministry of social affairs of the republic of Indonesia

Abstract

This paper aims to evaluate the impact and analyze the effect of transformational Leadership on organizational performance mediated by organizational Commitment, Transformational Leadership, and organizational Commitment moderated by Altruism. This research was conducted using a descriptive method at the A-certified Child Welfare Institution (LKSA) in Indonesia with a sample of 185 respondents. The approach used in this research is Structural Equation Model (SEM) with Partial Least Square (PLS) 3.0 analysis tool. This finding shows that altruism towards organizational Commitment is not able to improve organizational performance even though altruism has been included as a counterweight, meaning that it increases the welfare of others without realizing it for one’s benefit. It should be expected that the altruistic individual cares and wants to help even when no benefits are offered or there is no hope of getting them back. Other findings suggest that the benefits are more than just altruistic when transformational Leadership exhibits high levels of altruism. Altruistic behavior is judged relative to the norm and has the potential for much better organizational performance.

Keywords:

• transformational leadership
• organizational performance
• altruism
• organizational Commitment

PUBLIC INTEREST STATEMENT

Transformational leaders result in greater involvement in caregiver work at the Orphanage. This engagement results in higher efficiency and satisfaction, leading to organizational performance, new opportunities, creating a shared vision, motivation, and mentoring of caregivers. Encourage greater responsibility on subordinates and greater exploitation of strategic knowledge within the organization. Leaders in Child Welfare Institution (orphanage) have an attitude that follows Transformational Leadership, as a charismatic individual will enable the leader to provide high encouragement and optimism to subordinates. This research was conducted at A-certified Child Welfare Institutions throughout Indonesia with a sample of 185 respondents. This finding shows that altruism towards organizational Commitment cannot improve organizational performance even though altruism has been included as a counterweight, meaning that it increases the welfare of others without realizing it for one’s benefit. It should be expected that the altruistic individual cares and wants to help even when no benefits are offered, or there is no hope of getting them back.

1. Introduction

The surprising condition is that only 185 units out of a total of 2,735 Children Welfare Institution units received accreditation scores from the data of LKSAs that received Accreditation A. In addition to the results of accreditation, it was concluded that there were still many well-accredited institutions. Research on the Quality of Child Care in Child Care Social Institutions conducted by “Save the Children” and the Ministry of Social Affairs Indonesia Republic in 2006 and 2007 also identified that Child Welfare Institution (next, we will shorten it to LKSA) managers are those who do not have sufficient knowledge about children’s situations. That need to be cared for in the LKSA and excellent care must be accepted by the child (Ministry of Social Affairs RI 2011 on National Standards for LKSA Child Care).

Regarding organizational performance with how the process can be carried out, the organization cannot be separated from factors that can affect performance, including technology, input quality, physical environment quality, organizational culture, and human resource management, which includes aspects of compensation, imbalance, promotion, and others. Psychological Ability Factor or Ability, and Motivation Factor (Mangkunegara, 2017; Nugrahati et al., 2019). Several trigger factors for the inadequate performance of non-profit organizations, one of which is the function of the LKSA (Soelton et al., 2020).

Transformational practices that can contribute to organizational performance (Khan et al., 2017; Wollah et al., 2020; Arif & Akram, 2018; Aragón-Correa et al., 2007), and leadership transformation from a non-profit organization perspective (Harris & Ogbonna, 2011; Birasnav, 2014; Timothy et al., 2011) will pay attention to the importance of Leadership in every organization, so the researcher provides another model to build the relationship between transformational Leadership and organizational performance. Thus, this research will provide sufficient new opportunities to benefit organizational Leadership to improve relationships by maximizing organizational profitability so that they adapt leadership styles that polish their abilities and help them reach their full potential.

Based on the description of the background above, it is necessary to have a problem in this research. According to (Soelton et al., 2020; Soelton & Nugrahati, 2018; Darmawan et al., 2019; Lieberson & Connor, 1972) Identification of the problem in this study is that the Leadership of each child welfare institution in Indonesia has been regulated by various policies and programs, including from the 1945 Constitution, where neglected and poor children are cared for by the state. Several factors trigger inadequate human resources, one of which is the stagnation of the LKSA function (Nugrahati et al., 2020; Mochamad Soelton et al., 2020). Concerning organizational performance relative to how the performance process can be carried out, the performance of an organization cannot be separated from factors that can affect performance, including Leadership as an effort to control every member of the organization so that they can work following organizational standards and goals.

Based on several factors affecting the organization’s performance, improving performance in an organization or government agency is a goal or target to be achieved by government organizations and agencies in maximizing an activity previously set. However, an organization cannot survive without efforts to improve and learn new knowledge to cope with dynamic conditions.

2. Literature review

2.1. Organizational performance

According to Pasolong (2010), employee performance and organizational performance are closely related. Organizational goals cannot be separated from the resources owned by the organization which are managed by employees who play an active role as actors in achieving organizational goals. Organizational performance is the responsibility of every individual who works in the organization. If every individual works well, achieves, and gives the best contribution to the organization, the overall organizational performance will be good too. Thus, organizational performance is a reflection of individual performance. According to Sinambela (2012), organizational performance is the cumulative performance of employees; the higher the employee’s performance, the higher the organizational performance. Meanwhile, according to Nasucha , an organization is also defined as a comprehensive organization to meet the needs set by each group concerned through systemic efforts and continues to improve the organization’s ability to achieve its needs effectively.

2.2. Transformational leadership

Transformational Leadership is a leadership that is intrinsic, charismatic, and transforms the organization to achieve common goals., Bass (1999) and Avolio; Bass (1999) stated that transformational leadership’s characteristics consist of idealized influences, motivational inspiration, intellectual stimulation, and individual considerations. According to Howel and Avolio (1993), transactional and transformational Leadership affect subordinates differently. Transactional Leadership motivates followers by capturing their self-interest and the benefits their work brings. Transactional (contingent reward) is based on the level of performance achieved by subordinates; in this condition, superiors and subordinates agree to pay attention to compensation for the results achieved and do not encourage employees to perform better. Management by exception is the level of attention of the leader to guide the problem-solving of new and better methods. This results in a lack of leaders attention to their subordinates, resulting in low satisfaction and Commitment of subordinates to the leader.

2.3. Organizational Commitment

According to Becker, Commitment is achieved because individuals make a bet (side bets). Organizational members are committed because they have a side-batch of investments that they have deposited in a particular organization, to measure the accumulated investment that an individual would lose if he or she leaves the organization. Becker claims that a person invests something in his organization or work (placing a side bet) by risking something of value. The bigger the side bet at stake, the greater the Commitment to the organization or work. Becker explains that people have no other choice but to be willing to share some of the benefits they have reaped. This person does not necessarily have the same opportunity in other places. Commitment develops due to organizational member satisfaction with the rewards that must be sacrificed if he leaves the organization.

2.4. Altruism

Altruism is a relocation to help others selflessly, or just wanting to do good deeds (Schroeder et al., 1995). Based on this definition, whether an action can be said to be altruistic will give the helper the intention. For example, the stranger who risked his life to pull the victim out of the danger of fire and then walked away without saying goodbye is an actual altruistic act (Taylor et al., 2009). According to Comte altruism comes from the French, altruistic which means other people. Comte believes that individuals have a moral obligation to serve the benefit of others or the greater human. According to Baron et al. (2008), altruism is a unique form of behavior that is aimed at the benefit of others, it is usually self-defeating and is usually motivated primarily by a desire to improve the welfare of others so that it is better without expecting appreciation. Meanwhile, according to Myers (2012); Mochamad Soelton et al. (2020) altruism can be defined as a desire to help others without self-interest.

3. Hypotheses

3.1. Relationship between transformational leadership and organizational performance

Transformational leadership theory is very helpful to Bums (1978), who compared transformational Leadership with transactional Leadership. Transformational Leadership draws on the moral value of followers to raise their awareness of ethical issues and mobilize their energy and resources for reform. Therefore, the following hypothesis is established in this study:

H1: Transformational Leadership generates positive impact on Organizational Performance

3.2. Relationship between transformational leadership and organizational Commitment

The quality of Transformational Leadership is a factor of the organization, where Transformational Leadership is a combination of competencies and insights to invite members to step together to achieve goals (Hatta et al., 2018). If a leader can clearly explain the vision and mission of the organization, then subordinates will give higher positive reactions to various problems, such as job satisfaction, Commitment, loyalty, motivation, and organizational productivity (Hussein et al., 2014). Thus, the following hypothesis is established in this study:

H2: Transformational Leadership generates positive impact on Organizational Commitment

3.3. Relationship between organizational Commitment and organizational performance

According to research by Cameron and Quinn (1999), organizational Commitment has a significant effect, but there is a positive and insignificant influence. Organizational Commitment carries out commitment to Organization Organizational performance by implementing budgeting. Organizational culture factors and organizational Commitment are conditional factors that must be considered to increase the organizational level of budgetary participation. These factors are essential in the globalization era, which is full of environmental uncertainty. Therefore, the level of conformity of factors influencing Organizational Performance is rejected. Thus, the following hypothesis is established in this study:

H3: Organizational Commitment generates positive impact on Organizational Performance

3.4. The role of organizational Commitment in mediating the influence of transformational leadership in organizational performance

Wirnipin research Nugrahati et al. (2019), results showed that the test results with descriptive statistics resulted in the presentation of the SPSS output. That the influence of Organizational Commitment has a positive and significant effect on organizational performance is accepted. This shows that the organization that each employee owns makes a high contribution to organizational performance. The better organizational Commitment, the resulting organization will also increase. Thus, the following hypothesis is established in this study:

H4: Organizational Commitment can mediate the Influence of Transformational Leadership on Organizational Performance

3.5. The role of altruism in moderating the influence of transformational leadership on organizational performance

Self-sacrifice can be a decent starting point in this series of events (Krishnan & Singh, 2010): Moreover, the role of altruism is occur when employees experiencing public organizations practice as transformational leadership style (TLS), as well as they tend to have a good perspective of their organizational performance. However, the effect is indirect and mediated by OCB. At the same time, if employees have a strong desire to serve and improve the welfare of others, they tend to overwork their job requirements and, thus, tend to express a positive view of organizational performance. Thus, the following hypothesis is established in this study:

H5: Altruism can moderate the Influence of Transformational Leadership on Organizational Performance:

3.6. The role of altruism in moderating the effect of organizational Commitment on organizational performance

According to Manstead (1996); Baron et al. (2008), true altruism is a selfless concern, but to understand others. Another opinion was expressed by Taylor et al. (2009) who stated that altruism is the act of acting to help others without strings attached or just wanting to do good deeds. According to Myers (2012), altruism is a motive to improve the welfare of others without realizing it for one’s interests. Altruistic people care and are willing to help even if there is no profit to be offered or there is no hope of getting it back. Thus, the following hypothesis is established in this study:

H6: Altruism can moderate the influence of Organizational Commitment on Organizational Performance

4. Research methodology

4.1. Measurement scales

The indicators are used to measure variables that are adjusted to the characteristics of the sample from previous studies. For example, the variable “transformational leadership” uses a scale according to Bass (1999); Yukl and Van Fleet (1982) included 4 observations. “Organizational Performance” using Mahsun, 2006 John Miner (in Sudamanto, 2009) consists of 6 observations. Organizational Commitment using Allen and Meyer (1990) consists of 3 observations, and Altruism using the Cohen Sampson and Watkins scale consists of 3 observations.

4.2. Data collection and method of analysis

The researcher collected data from Child Welfare Institutions throughout Indonesia which have been accredited by the Ministry of Social Affairs of the Republic of Indonesia and have obtained a state certificate, namely A with a total sample of 185 respondents. The design used in this study is a causal design. The causal research design is useful for analyzing the relationship between one variable and another. Causal design examines “causal” relationships (Sugiyono, 2013). Analysis of the data used in this research was inferential statistical analysis, namely Structural Equation Model, referred to as SEM. This SEM was operated through the “Partial Least Square” (PLS) software, namely version 3.2.9 of Smart-PLS as shown in Figure 1.

Figure 1. Conceptual framework.

4.3. Validity and reliability tests

4.3.1. Test of validity

Testing using the convergent validity of the measurement model with a reflective indicator is assessed based on the correlation between the item score/component score with the construct score calculated by SEM-PLS. (Ghozali, 2014) argues that an indicator can be said to have good validity if the loading factor value is greater than 0.70, while the loading factor of 0.50 to 0.60 can be considered sufficient. The validity test calculations that researchers had done can be seen in the following Table 1

Table 1. Summary of validity test result

Item	Loading Factor	AVE
“Organizational Commitment”
OC1. Affective Commitment	0.796	0.641
OC2. Continuance Commitment	0.715
OC3. Normative Commitment	0.882
“Organizational Performance”
OP1. Policy	0.801	0.605
OP2. Planning and Budgeting	0.848
OP3. Quality	0.632
OP4. Economy	0.836
OP5. Equity	0.796
OP6. Accountability	0.733
“Transformational Leadership”
TL1. Idealized influences	0.759	0.602
TL2. Inspirational motivation	0.813
TL3. Individual considerations	0.703
TL4. Intellectual stimulation	0.821
“Altruism”
ALT1.Empathy	0.823	0.633
ALT2.Desire to give	0.810
ALT3.Volunteer	0.753

Based on Table 1, all variables have a commonality value of > 0.5 and AVE > 0.5. The result has met the criteria of convergent validity so that all indicators are valid and can be used to further analysis. To ensure validity, the researcher conducted the next test to evaluate the discriminant validity of the research variables. The outcome of the reliability review is in Table 2.

Table 2. Summary of discriminant validity test result

	Organizational Commitment	Organizational Learning	Organizational Performance	Transformational Leadership
Altruism	0.801
Organizational Commitment	0.489	0.768
Organizational Performance	0.519	0.719	0.777
Transformational Leadership	0.633	0.442	0.568	0.775

This research calculations results identifies that the square root of the mean extract of variance (√AVE) for entire construct is more significant than in between one construct and another in the model, which means that all research variables are identified having differentiation.

4.3.2. Test of reliability

In PLS, reliability testing can use two approaches: Cronbach alpha and Composite reliability. The Cronbach alpha or Composite Reliability rule of thumb must be greater than 0.7, even though 0.6 is appropriate (Hair et al., 2010). Table 3 can be used as the outcome of the reliability review.

Table 3. Summary table of reliability test results

	Cronbach’s Alpha	Composite Reliability
Altruism	0.711	0.838
Organizational Commitment	0.732	0.842
Organizational Performance	0.867	0.901
Transformational Leadership	0.780	0.857

Table 3 shows that Cronbach Alpha and the Composite reliability values component’s more significant than 0.7. So, it can be concluded that the instruments used are reliable.

4.4. Data analysis results: direct effect testing and indirect effects testing

Data from the validity and reliability test was then processed to determine the hypothesis testing results through the Structural Equation Model, which was operated through the “Partial Least Square” (PLS) software, namely version 3.2.8 of Smart-PLS. The results of calculated Smart-PLS can be seen in Figure 2 and Table 4.

Figure 2. Structural model output.

Table 4. The Result of Effect Testing

	Original Sample	T Statistics	P Values	Remarks
Transformational Leadership -> Organizational Performance	0,183	2,858	0,004	positive significant
Transformational Leadership -> Organizational Commitment	0,632	18,286	0,000	positive significant
Organizational Commitment -> Organizational Performance	0,045	0,723	0,470	negative significant
Transformational Leadership → Organizational Commitment → Organizational Performance	Indirect effect	0.076	1.854	Not Significant
Moderating effect_ Organizational Commitment * Altruisme -> Organizational Performance	0.027	0.366	0.714	negative significant
Moderating effect_ Transformational Leadership * Altruisme -> Organizational Performance	0.16	2.291	0.022	positive significant

5. Discussion

The impact of transformational Leadership on organizational performance. Based on the hypothesis test, it was found that a beta coefficient value of 0.274 and t-value of 4,740. The t-value of > 1.98 (two-sided hypothesis) indicates that “transformational leadership is positively influenced by organizational performance”. This means that the transformative leadership style in LKSA will strongly promote Organizational performance. The leader explains the vision and provides an understanding of the general goals of the organization so that the LKSA can provide good service.

The Impact of transformational Leadership on organizational Commitment. A beta coefficient value of 0.633 and a t-value of 18,890 were obtained in the results. The t-value of > 1.98 (two-sided hypothesis) indicates that “transformational leadership is positively influenced by organizational commitment”. The leader explains the vision of what must be done in providing an understanding of the general goals of the organization because the leader has a responsibility to make LKSA better.

3. The impact of organizational Commitment on organizational performance. The beta coefficient value is 0.120 and the t value is 1.873 which is obtained in the results. The value of t < 1.98 (two-sided hypothesis) indicates that “organizational commitment is not influenced by organizational performance”. Although LKSA employees have a sense of responsibility to make this institution better, the organization has ways to empower human resources.

The impact of transformational Leadership on organizational performance through organizational Commitment. According to the hypothesis in this research, it was found that mediating organizational learning on the relationship between transformational Leadership and organizational performance has no mediating variable. According to (Baron & Kenny, 1986), the role was found to be only partial mediation.

The result of testing the variable role of Altruism in moderating the effect of Transformational Leadership on Organizational Performance is pure moderation. The results of the hypothesis show that it is significant, the variable so the role of Altruism (moderation) is purely only a moderating variable and does not act as an explanatory variable. So it can be said that the Altruism variable is said to be a pure moderating variable. Altruistic behavior is judged relative to norms and the potential for much better organizational performance.

The result of testing the variable role of Altruism in moderating the effect of Organizational Commitment on Organizational Performance is the potential for moderation (Homological Moderation). The results showed that it was not a significant, variable so the role of Altruism (moderation) did not function as a moderating variable nor did it act as an explanatory variable. The altruism variable is only due to theoretical reasons or research results, as moderation. So it can be said that the Altruism variable is said to be a potential moderating variable. Strong support from Organizational Commitment can improve Organizational Performance indirectly when the implementation of Organizational Commitment is carried out higher in LKSAs in Indonesia .

6. Conclusion, implications, and limitations

Conclusion

Based on the data analysis and the discussion that has been stated, several research conclusions can be stated as follows:

The uniqueness of non-profit institutions, especially the Child Welfare Institutions of the Ministry of Social Affairs of the Republic of Indonesia, is that they place the leadership role in being able to improve organizational performance effectively and efficiently for the sustainability of the institutions they are responsible for, but organizational Commitment can be applied consistently by the leaders in the institution even though the organizational structure has not been able to instill a sense of belonging to its members.

Organizational Commitment has not been able to mediate Transformational Leadership in Indonesia’s Organizational Performance of Child Welfare Institutions (LKSA). This means that low Commitment makes it difficult for the organization to achieve maximum performance, even though the Leadership is trying to improve it.

On the other hand, Altruism cannot moderate the relationship between Organizational Commitment and Organizational Performance. These findings indicate that altruism towards organizational Commitment is not able to improve organizational performance even though altruism has been included as a counterweight, meaning that it increases the welfare of others without realizing it for one’s benefit. It should be expected that altruistic individuals care and want to help even though there are no benefits offered or there is no hope of getting them back. In addition, Altruism can moderate the influence of Transformational Leadership on Organizational Performance in LKSAs in Indonesia. These findings suggest that benefit more from being altruistic when transformational Leadership exhibits high levels of altruism. Altruistic behavior is assessed relative to the norms and potential for much better organizational performance.

Implication

This research study has produced several theoretical and practical implications, such as LKSAs with an A rating have the facilities and infrastructure that enable them to get this rating. Therefore, each organizer must be able to carry out their leadership skills and manage their activities following the National Child Care Standards (SNPA). As a result, LKSAs in Indonesia have the potential to achieve an A rating as required by the National Child Care Standards (SNPA) formulated by the Ministry of Social Affairs. Therefore, organizations shouldn’t just rely on ancient coaching patterns. Instead, they should look into the latest methods of organizational Commitment systems, even though the leadership aspect is quite challenging in the organizational sustainability process.

Some of the limitations faced in the implementation of the research include the following, The object of research is still limited to child welfare institutions with A accreditation, namely by limiting the generalization of research results to 1 type of institution nationally. However, in the future, research can be carried out on other types of institutions under the auspices of the Ministry of Social Affairs of the Republic of Indonesia.

Author details

Fatchur Rohman, Associate Professor and Lecturer Management Department Faculty of Economics and Business, at Brawijaya University Malang – Indonesia. [email protected], https://scholar.google.co.id/citations?user=tPTvA8MAAAAJ&hl=id

https://www.scopus.com/authid/detail.uri?authorId=57196393883

Noermijati Noermijati, Professor and Lecturer Management Department at Brawijaya University Malang – Indonesia. [email protected],

https://orcid.org/0000-0003-3265-612X

https://scholar.google.co.id/citations?user=LttlM0gAAAAJ&hl=id

https://www.scopus.com/authid/detail.uri?authorId=56205172900

Mochamad Soelton, Assistant Professor, Lecturer Management Department at Universitas Mercu Buana Jakarta– Indonesia. [email protected];

https://orcid.org/0000-0003-1055-4085

https://scholar.google.co.id/citations?user=1EMZP6QAAAAJ&hl=id

https://www.scopus.com/authid/detail.uri?authorId=57202056787

Mugiono Mugiono, Associate Professor and Lecturer Management Department Faculty of Economics and Business, at Brawijaya University Malang – Indonesia. [email protected]

https://scholar.google.co.id/citations?user=xDsXA6MAAAAJ&hl=id

Disclosure statement

No potential conflicts of interest were reported by the authors.

Additional information

Funding

The authors did not receive direct funding for this study.

Notes on contributors

Fatchur Rohman

Fatchur Rohman Associate Professor, and Lecturer in the Department of Management, Faculty of Economics and Business, Brawijaya University Malang - Indonesia. His research is mainly under Strategic Management of Organizational Behavior, Leadership implementation, and Marketing Management. Currently actively teaching the same topic at the Postgraduate Level. In addition, he has extensive research collaborations with colleagues at various universities in Indonesia, Malaysia, Brunei, and the Philippines, including as Editor in Chief of several Nationally Accredited Journals, and most recently served as Chair of the on-campus Doctoral Program in Management Science.