Navigating the Loyalty of Temporary Employees in the Public Sector: The Matter of Compensation Satisfaction

The population of temporary employees has experienced exponential growth in numerous world regions and across a range of sectors, including the public sector in Indonesia. Temporary employees in the public sector were subjected to more significant pressure than their permanent counterparts, particularly concerning job insecurity and job stress. This study examines the sequential relationship between job insecurity, job stress, compensation satisfaction, and employee loyalty. A cross-sectional design with an online survey method collected data from 631 temporary civil servants in Indonesia. Structural Equation Modeling with Partial Least Square (SEM-PLS) was employed to test the hypotheses using the smart-PLS Program. The results show that job insecurity and job stress experienced by temporary civil servants, directly and indirectly, affect their compensation satisfaction and loyalty. Compensation satisfaction served as a coping mechanism to reduce the adverse direct impact of job insecurity on employee loyalty.