International Review of Management and Marketing ISSN: 2146-4405 available at http: www.econjournals.com International Review of Management and Marketing, 2019, 9(5), 173-178. International Review of Management and Marketing | Vol 9 • Issue 5 • 2019 173 Effect of Compensation and Organizational Culture on Spirit of Work and Its Impact on Employee Performance at PT Mopoli Raya Medan Hendri Sembiring* Lecturer in Sekolah Tinggi Ilmu Ekonomi Surya Nusantara Pematangsiantar. *Email:sembiringhendri745@yahoo.com Received: 01 March 2019 Accepted: 10 August 2019 DOI: https://doi.org/10.32479/irmm.7769 ABSTRACT The purpose of this study was to determine the effect of compensation and organizational culture on morale and its impact on employee performance at PT Mopoli Raya Medan. This study used a quantitative descriptive method. The population and sample in this study are permanent employees in all parts of PT Mopoli Raya Medan, amounting to 50 respondents. The sampling technique used is nonprobability sampling. This study uses path analysis which consists of two equations. The results of the study showed two path structural sub-structural equations, namely Y1 = 3.817 + 0.510X1 + 0.300X2 + 0.658 and Y2 = 2.934 + 0.299X1 + 0.352X2 + 0.292Y1 + 0.616. The frst sub-structural equation explains that compensation variables and organizational culture have a positive and signifcant effect on work morale both partially and simultaneously, which partially or directly compensation variables have a more dominant infuence on work morale than organizational culture variables with their respective contributions amounting to 0.510 and 0.300. Furthermore, the second sub-structural equation explains that compensation variables, organizational culture, and work morale have a positive and signifcant effect on employee performance both partially and simultaneously, which partially or directly compensation variables have a more dominant infuence on employee performance compared to organizational culture variables and work morale with contributions of 0.510, 0.300 and 0.292 respectively. As well as simultaneous compensation variables, organizational culture and morale infuence on employee performance by 62% and the remaining 38% is infuenced by other variables. Keywords: Compensation, Organizational Culture, Spirit of Work, and Employee Performance JEL Classifcations: C30, O15, O25 1. INTRODUCTION Organizations or agencies in implementing programs that have been given by the company always aim to achieve organizational goals. One way is to improve employee performance. In an organization a system is needed that can support the performance of the employee. One of them is high morale. The spirit of work is a condition that must exist when acting the work process/process wants to run smoothly. With the high morale, the organizational goals can be achieved according to plan. A high work spirit will have a positive impact on the company, namely the attitude of wanting to fully work, concentration on his work and utilizing the skills he has. Conversely, low work morale will harm the company such as high absenteeism, employee movement, and low performance. In company employees is one of the most important resources. Employees function as executors in achieving company goals, even facilities in the form of awkward machines or equipment also require labor as the operator. By using a variety of work facilities, employees can do every job better to increase morale. In improving the performance of its employees the company must do ways that can encourage employees to work optimally. One of these methods is by providing compensation. Satisfaction with compensation can infuence employee behavior to work more passionately and spur high performance. This is expected to form a pattern of good This Journal is licensed under a Creative Commons Attribution 4.0 International License