Every company definitely has a competitive advantage. To stay competitive in an increasingly dynamic environment, companies can rely on existing resources. One of these resources is staff. Human resources are a means used to mobilize and synergize other people's resources to achieve organizational goals [1,2].

Human resources are one of the resources in the company, namely all people who carry out activities. In general, resources in a company can be divided into two areas, namely human resources and non-human resources. Non-human resources include capital, machines, technology, materials, etc. Human resources are the most important resource and determine the achievement of company goals [3]. Because human resources are an important part of the company, they must be managed efficiently and professionally.

Personnel management is designed so that employees can contribute to achieving competitive advantage. Competitiveness is the company's ability to maintain and increase its market share in its space. Competitiveness refers to company efficiency, namely the company's ability to meet the needs of stakeholders such as shareholders, customers, employees and society [4].

According to Barney [3], for resources to meet the requirements to achieve excellence. To maintain a competitive advantage, resources must add value to the business, be scarce, too expensive to imitate, and have no substitutes. One source that can be utilized to gain a competitive advantage is its employees. Today's organizations view the performance of each employee as a strategic tool to gain competitive advantage [6].

Mathis and Jackson [7] argue that employee performance increases due to ability, motivation and support and the existence of interpersonal relationships in organizations. Several factors that affect performance can be grouped into two parts, namely internal factors such as competence and motivation and external factors such as culture, leadership, and technology. And others [8]. From the outside, transformational leadership is a factor that gets the most attention, even though its relationship with performance is not easy. For example Kearne found that the relationship between transformational leadership and male performance is moderated by the age difference between managers and employees.

A recent study by Li et al. [5]. In general, Li et al. found that the direct, indirect and overall effects of transformational behavior were not significant. These results differed from Nguyen et al. who found a significant effect of transformational leadership on managerial performance in Vietnam. According to Nguyen et al., this research tries to review the relationship between transformational leadership and effectiveness in the context of Indonesian culture. This research also adds a competency factor as a comparison, namely if leadership is considered to have a positive impact and is supported by internal expertise, it will also have a significant impact on performance.

Literature Review

Transactional Leadership Style: Transactional style leadership as a transaction between followers and leaders for desired results by fulfilling the wishes of the leader and an expectation from followers, involving promises or commitments in respect and trust. Transformational leadership styles can change and motivate followers by making followers more aware importance of task outcomes, persuade followers to prioritize organizational interests over personal interests, and activate followers' higher needs.

Yukl formulates four characteristics possessed by a leader so that he has transformational qualities, including:

• Idealized influence, namely behavior that evokes strong emotions and identification from followers to leaders.

• Individualized consideration includes providing support, encouragement, and training for followers.

• Inspirational motivation involves conveying an attractive vision, using symbols to focus the efforts of subordinates.

• Intellectual stimulation, namely behavior that increases followers' awareness of problems and influences followers to view problems from a new perspective.

According to Odumeru and Ifeanyi

Transactional leadership style is a leadership style in which a leader focuses his attention on interpersonal transactions between leaders and employees that involve exchange relationships.

Employee Competency

Competence is a person's ability to recognize skills, insights, and work attitudes that are in accordance with the standards and rules set by the company.

According to Edison, Anwar and Komariyah, Competence is an individual's ability to carry out a job correctly and have advantages based on matters relating to knowledge, skills and attitudes.

According to Moeheriono in detail there are five competency dimensions that must be owned by all individuals, namely as follows:

• Task skills, namely skills to carry out tasks according to workplace standards.

• Task management skills, namely skills to manage a series of different tasks that arise in work.

• Contingency management skills, namely the skills to take quick and appropriate action when a problem arises in work.

• Job role environment skills, namely the skills to work together and maintain a comfor table work environment.

• Transfer skills, namely skills to adapt to a new work environment.

Job satisfaction

Afandi, Job satisfaction is a positive attitude of the workforce including feelings and behavior towards work through the assessment of one's work as a sense of respect in achieving one of the important values ​​of work.

According to Abdurrahmat job satisfaction is a form of emotional attitude that pleases and loves the work he does. Indicators for measuring job satisfaction according to Sudaryo et al., namely, absenteeism or absence, desire to move, employee performance, co-workers and employee comfort. Afandi indicators of job satisfaction include work, wages, promotions, supervisors and co-workers. According to Yuwono includes, among others, jobs, salaries, promotions, supervisors, co-workers, communications, benefits, contingent rewards and implementation procedures.

Employee performance

Mangkunegara, in his opinion, employee performance is the result of a person's work in quality and quantity that has been achieved by employees in carrying out their duties according to the responsibilities given. Robbins performance indicators are a tool to measure the extent to which employee performance is achieved. Following are some indicators to measure employee performance: (1) Quality of Work; (2) Quantity; (3) Timeliness; (4) Effectiveness; (5) Independence. The quality of employee work can be measured from employee perceptions of the quality of work produced and the perfection of tasks on employee skills and abilities. Quality of work can be described from the good or bad level of the work of employees in completing work as well as the abilities and skills of employees in carrying out the tasks assigned to them.

Factors that affect performance according to Siagian states that employee performance is influenced by several factors, namely: compensation, work environment, organizational culture, leadership, and work motivation, work discipline, job satisfaction, communication and other factors.

Relations between Variables

Transformational leadership influences employee performance according to Orabi's research entitled Effects of transformational leadership style on organizational effectiveness: Evidence from Jordan. The results of the study show that there is a significant influence between transformational leadership style and employee performance. Research by Laras and Haryono, Gillet and Vandenberghe found a significant positive effect between transformational leadership and employee performance. Transformational leadership has a significant impact on performance.

• H1: transformational leadership has a significant effect on performance

Actions should not only be output oriented or achieve quantitative goals, but also need to think about how people are going to achieve them.

Robbin and Judge, Stating that competence is a person's ability to be trusted in a particular field. Sedarmayanti Evaluating competence is a fundamental characteristic of a person who directly influences or can predict excellence. Competence is a required skill that can affect the performance of an employee. A study by Osei and Zaim et al. found that employee competence has a positive effect on employee performance, and this relationship was also confirmed, Feisal, Sriekaningsih and Setyadi were also able to show that competency influences employee performance improvement.

• H2: Competence has a significant effect on performance

Employee job satisfaction is a phenomenon that needs to be scrutinized by organizational leaders. Employee job satisfaction is closely related to employee performance. The following is the definition of job satisfaction according to experts: Stone in Kadarisman. According to Steve defines that job satisfaction is the level of a worker's positive affection towards work and work situations, job satisfaction is solely related to the attitude of workers towards their work. This attitude takes place in the cognitive and behavioral aspects. The cognitive aspect of job satisfaction is workers' beliefs about work and work situations. As expressed by Putu states that job satisfaction and performance have a positive and significant influence,

• H3: Job Satisfaction has a significant effect on performance

Yang, argued that transformational leadership has a significant positive effect on the intrinsic and extrinsic job satisfaction of subordinates. Zahari, says there is a positive and significant relationship between transformational leadership styles on employee job satisfaction.

• H4: Transformational leadership has a significant effect on job satisfaction

The higher the competency possessed by employees, the higher the satisfaction they want to get so that they can produce good performance, such as employees who have high abilities then are given rewards by the company which will improve the employee's performance. Eligibility is a person's ability whether it is a mix of personal skills, knowledge, technology, social and spiritual.Narimawat argues that the structure of employee qualifications is not really part of intellectual capital. It can be seen from three competency perspectives, namely the intellectual, emotional, social side for measuring operational skills, level of knowledge, skills and education. This problem According to Lawler's theory states that competence will come as part of the factor input, which affects job satisfaction or dissatisfaction in Munandari. Then do the research by Amador et al. where there is competency inconsistency reducing the level of job satisfaction. So the point is that job satisfaction will be influenced by competence. The better competent listening will be able to make employees satisfied at work and have expertise in their respective fields ( table 1).

• H5: Competence has a significant effect on job satisfaction

 Table 1: Research Variables and Variable Measurement

Figure 1: Outer Model Evaluation (a) (Outer Models), (b) (InnerModel)

Source: Processed primary data, 2022

The data collection method used in this study is as follows:

Observation

Observation, namely: Data collection techniques by making direct observations and recording phenomena that occur in research locations.

Questionnaire

This method is used as the main method in research. This research uses a Likert Scale with a rating range of 1. Up to 5 alternative answers (Sugiyono, 2008) with a rating range of: (5) strongly Agree, (4) Agree, (3) Neutral, (2) Disagree, (1) Strongly Disagree.

Library Studies

That is conducting research by studying and reading the literature that has to do with the problem that is the object of research (Figure 1).

Validity test

Convergent Validity: Convergent validity, illustrates that a set of indicators represents one latent variable and underlies the latent variable. This explains that the indicators of a latent variable must have a high correlation.

Loading Factor

To test the convergent validity, the outer loading value or loading factor is used. An indicator is declared to meet convergent validity in the good category if the outer loading value is > 0.7 or is stated to be significant.

If the loading factor value is > 0.7, it is considered that the indicator that measures the latent variable is significant. The following is the outer loading value of each indicator in the research variable:

In the  table above, it is explained that each indicator in this research variable has an outer loading value above 0.7. Has met the requirements of convergent validity. The data above shows that there are no variable indicators whose outer loading value is below 0.7, so that all indicators for each research variable are declared fit/feasible or valid for use in this study and can be used for further analysis ( table 2).

Table 2: Outer Loading

Source: Processed primary data, 2022

Average Variant Extracted (AVE) Test

Convergent validity can also be known through the AVE (average variant extracted) method for each indicator. Convergent validity is met if the AVE value > 0.5 to be declared a good model ( table 3).

Table 3: Average Variant Extracted (AVE)

Source: Processed primary data, 2022

Based on the  table, it can be seen that the Average Variance Extracted (AVE) indicator value for all the variables studied is> 0.5 so that it can be stated that the research model developed is a good model.

Discriminant Validity

Cross loading: Discriminant validity describes the ability of each latent variable to discriminate against other latent variables. This explains that the indicators of a latent variable must have a high correlation with the underlying latent variable and have a weak correlation with other latent variables. To test the discriminant validity in the parameter measurement model that must be considered is the cross loading value. The cross loading value must be > 0.7 in one variable or the cross loading value of the indicator that measures the latent variable must be higher than the other latent variables.

Based on the data presented in the  table, it can be seen that each indicator on the research variable has the largest cross loading value on the variable it forms compared to the cross loading value on other variables. Based on the results obtained, it can be stated that the indicators used in this study have good discriminant validity in compiling their respective variables ( table 4).

Table 4: Cross Loading

Source: Processed primary data, 2022

FornellLarcker Criterion

Discriminant validity test FornellLarcker criterion, namely testing discriminant validity by comparing the correlation of a variable with the variable itself with the correlation of one variable with another variable. If the result is greater than the correlation of the variable with other variables, it fulfills discriminant validity. The following is the FornellLarcker Criterion ( table 5).

Table 5: FornellLarcker Criterion

Source: Processed primary data, 2022

Based on the data presented in the  table above, it can be seen that the correlation of one variable with the variable itself is greater than the correlation of one variable with other variables, thus fulfilling discriminatory validity.

Reliability Test

The reliability test is carried out to measure the consistency, accuracy and accuracy of an indicator in making measurements. Reliability testing in SEM-PLS is carried out by looking at the Composite Reliability (CR) parameters which can be obtained using the following equation:

Composite Reliability

Composite Reliability is the part that is used to test the value of the reliability of indicators on a variable. A variable can be stated to meet composite reliability and Cronbach Alpha. If the value of composite reliability > 0.6 then it is declared reliable. The following is the composite reliability value of each variable used in this study ( table 6):

Table 6: Composite Reliability

Source: Processed primary data, 2022

Based on the data presented in the  table, it can be seen that the composite reliability value of all research variables is> 0.6. These results indicate that each variable has met the composite reliability so that it can be concluded that all the variables studied have a high level of reliability.

Cronbach's Alpha

The reliability test with the composite reliability above can be strengthened by using the Cronbach's Alpha value. A variable can be declared reliable or meets cronbach's alpha if it has a Cronbach's Alpha value > 0.7. The following is the cronbach alpha value of each variable ( table 7):

Table 7: Cronbach's Alpha

Source: Processed primary data, 2022

Based on the data presented above in the  table, it can be seen that the Cronbach's Alpha value of each research variable is> 0.7. Thus these results can indicate that each research variable has fulfilled the Cronbach's Alpha value requirements, so it can be concluded that all variables have a high level of reliability.

Evaluation of the Inner Model

In this study, the R square (R2) value, the path coefficient test, and the goodness of fit test were explained.

Coefficient of Determination (R2)

Coefficient determination (R-Square) or abbreviated R2 is used to measure how high the variable affects the endogenous variable. In this study there are two models, namely:

• The 1st model: as the endogenous variable is Job Satisfaction

• The 2nd model: as an endogenous variable is Employee Performance

Chin said the results of R2 of 0.60 and above for endogenous variables in the structural model indicate the influence of exogenous variables (which affect) on endogenous variables (which are influenced) included in the strong category. Meanwhile, if the result is 0.4 - 0.6 then it is included in the medium category, and if the result is 0.2 - 0.4 then it is included in the weak category, if it is below 0.2 then there is no effect ( table 8).

Table 8: Coefficient of Determination (R2)

Source: Processed primary data, 2022

Based on the data presented in the  table above, it can be seen that the R-Square value for the Job Satisfaction variable is 0.571. The acquisition of this value explains that the large percentage of Job Satisfaction can be explained by financial literacy and financial inclusion of 57.1%. Then for the R-Square value obtained by the Employee Performance variable of 0.748. This value explains that employee performance can be explained by financial literacy and financial inclusion and financial behavior of 74.8%.

Model Goodness Test (Goodness of Fit)

Q-Square value: The measurement uses the R-square of the dependent latent variable with the same interpretation as the regression. Q-Square predictive relevance for construct models that measure how well the observed values ​​are generated by the model and its parameter estimates. Q-Square value > 0 indicates the model has predictive relevance. Conversely, if the Q-Square value < 0, the predictive-relevance value is obtained by the formula:

Q2 = 1 – ( 1 – R12) ( 1 – R22 )

Q2 = 1 – (1 – 0.326) (1 – 0.559)

Q2 = 1 – (0.674) (0.441)

Q2 = 1 – 0.298

Q2 = 0.702

Q-Square value > 0, this indicates that the model has predictive relevance.

NFI Value

Used to validate the performance of the combined measurement model (outer model) and structural model (inner model) whose value is NFI >0.6 ( table 9).

table 9: Model Goodness Testing

Source: Processed primary data, 2022

Test Path Coefficient

Evaluation of the path coefficient is used to show how strong the effect or influence of the independent variable is on the dependent variable. Based on the inner model schema that has been shown in the PLS analysis inner model image above, it can be explained that the path coefficient value is as shown in the following  table 10.

Table 10: Path Coefficient

Source: Processed primary data, 2022

Based on the  table, it can be seen that the NFI value is 0.680, so it can be stated that the combined performance of the measurement model (outer model) and the structural model (inner model) is valid.

Based on the  table it can be seen that:

Employee job satisfaction is influenced by transactional leadership style, which is shown by 0.458. Employee job satisfaction is also influenced by employee competence, which is shown by 0.381. Employee performance is strongly influenced by leadership style, which is shown by 0.768. Employee performance is affected by job satisfaction, which can be seen with 0.536. Employee performance is also influenced by employee competence, which is seen with 0.263.

Hypothesis testing

Based on the data processing that has been done, the results can be used to answer the hypothesis in this study. Hypothesis testing in this study was carried out by looking at the T-Statistics values ​​and P-Values. The research hypothesis can be declared accepted if the P-Values ​​< 0.05. The following are the results of this research hypothesis test ( table 11):

Table 11: Hypothesis Testing Results

Source: Processed primary data, 2022 

Based on the  table it can be explained the results of testing the hypothesis of the causality relationship between variables as follows.

Effect of Transactional Leadership Style on Job Satisfaction

The T-Statistics (|OSTDEV|) value was 4.037 and the P-Valuess was 0.000. Statistically, the hypothesis which states that there is a significant positive effect of the Transactional Leadership Style on job satisfaction is accepted. This means that the Transactional Leadership Style has a significant positive effect on job satisfaction.

The Effect of Job Satisfaction on Employee Performance

The T-Statistics (|OSTDEV|) value was 5.177 and the P-Values was 0.000. Statistically, the hypothesis which states that there is a significant positive effect of job satisfaction on employee performance is accepted. This means that job satisfaction has a significant positive effect on employee performance.

The Effect of Employee Competence on Job Satisfaction

The T-Statistics (|OSTDEV|) value was 3.463 and the P-Valuesse was 0.001. Statistically, the hypothesis which states that there is a significant positive effect of employee competence on job satisfaction, is accepted. This means that the competence of the employee has a significant positive effect on job satisfaction.

Effect of employee competence on employee performance

The T-Statistics (|OSTDEV|) value was 2.358 and the P-Valuesse was 0.019. Statistically, the hypothesis which states that there is a significant positive effect of employee competence on employee performance is accepted. This means that employee competency has a significant positive effect on employee performance.

Indirect Influence

Total Indirect Effects: Total indirect effects show the influence or effect indirectly of the independent variable on the dependent variable. The results of the statistical calculation of the total indirect effects are presented in the following  table 12.

Table 12: Total inDirect Effects

Source: Processed primary data, 2022

From the  table it can be seen that the total indirect effect of the transactional leadership style variable on employee performance is 0.245 or around 24.5%. The total indirect effect of employee competency variables on employee performance is 0.204 or around 20.4%. While the remaining indirect effects are caused by other variables outside the research model built in this study.

Statistically, the hypothesis which states that there is a significant positive effect of Transactional Leadership Style on Employee Competence is accepted. Statistically, the hypothesis which states that there is a significant positive effect of Employee Competence on Transactional Leadership Style, is accepted. With the research results transactional leadership style has a positive effect on job satisfaction; employee competence has a positive effect on job satisfaction. Job satisfaction has a positive effect on employee performance. Transactional leadership style has a positive effect on employee performance; employee competence has a positive effect on employee performance.

Suggestion

Transformational leadership styles can change and motivate followers by making followers more aware importance of task outcomes, persuade followers to prioritize organizational interests over personal interests, and activate followers' higher needs.

Implications

Research can add to knowledge in the field of human resource management and marketing management, especially on Transactional Leadership Style, Competence, Job Satisfaction, and Employee Performance.

Research limitations

The research object used is still limited to random or random employees in each division, it is hoped that further research will use a larger sample in a larger population.

1. Burhanudin, M.B., and A. Kurniawan. “Transactional and Transformational Leadership Styles on Employee Performance at Bank BRI Purworejo.” Coopetition: Scientific Management Journal, vol. 11, no. 1, 2020, pp. 7–18. https://journal.ikopin.ac.id/index.php/coopetition/article/view/58.

2. Hartanto, I. “Employee Performance with Job Satisfaction as Intervening Variables in CV. East Jaya.” Agora, vol. 2, no. 1, 2014, pp. 979–983. https://www.researchgate.net/publication/314064105_Rancang_Build_Application_System_Selection_Kepala_Desa_Yang_Integrated_With_SMS_Gateway.

3. Tax, P., et al. “Employee Performance through Job Satisfaction at the Agency.” vol. 11, no. 1, 2022, pp. 171–185.

4. Paparang, N.C.P., et al. “The Effect of Job Satisfaction on the Performance of Office Employees of PT. Post Indonesia in Manado.” Productivity, vol. 2, no. 2, August 2021, pp. 119–123.

5. Suparyanto, M.B., and Rosad. “No Title.” vol. 5, no. 3, 2015, pp. 248–253.

6. Uin, K., et al. “Deswarta.” vol. 3, no. 1, 2017, pp. 19–39.

7. Yanti, D.A.W., and M. Mursidi. “The Influence of Transformational Leadership and Competence on Employee Performance.” Journal of Strategic Management and Business Applications, vol. 4, no. 1, August 2021, pp. 23–34. https://doi.org/10.36407/jmsab.v4i1.266