Employee performance is a crucial factor influencing the productivity and sustainability of a business, particularly in the traditional crafts sector. This study aims to examine the influence of leadership style, work environment, and employee well-being on employee performance at Pengrajin Reyog Galuh Suryo Honggolono, a Reyog Ponorogo arts and crafts business located in Ponorogo, East Java.
The study employed a quantitative approach, with a total population of 35 employees, all of whom were sampled using a saturated sampling technique. Data were collected through a Likert-scale questionnaire and analyzed using the Partial Least Squares (PLS) method using SmartPLS 4.0 software. Model evaluation was conducted by testing the validity, reliability, and path analysis of the structural model.
The analysis showed that the variables of leadership style, work environment, and employee well-being had a positive and significant effect on employee performance. The t-statistic values obtained were 2.090 (leadership style), 3.063 (work environment), and 3.076 (employee well-being), respectively, with a P-value of less than 0.05. Together, these three variables also significantly influenced employee performance, with an F-value of 10.21 and a significance value of 0.000.
The results of this study confirm previous theories emphasizing the important role of leadership style, a comfortable work environment, and employee well-being in improving performance. The uniqueness of this study lies in its focus on the culture-based small business sector, which has rarely been studied in depth.
Leadership style, work environment, and employee well-being, both individually and collectively, significantly impact employee performance. Therefore, strengthening these three aspects is essential to maintain and sustainably improve performance in traditional craft businesses.