DEVELOPMENT OF HUMAN CAPITAL THROUGH THE SERVICE -

PROFIT CHAIN APPROACH IN MAXIMIZING FINANCIAL

PERFORMANCE OF PT BANK PEMBANGUNAN DAERAH KALIMANTAN
TIMUR DAN KALIMANTAN UTARA (PT. BPD KALTIM KALTARA)

Hairuzzaman, hairuzz.bankaltim@gmail.com
Djoko Setyadi, djoko.setyadi@gmail.com
Sri Mintarti, sri.mintarti@feb.unmul.ac.id
AriestaHeksariniariesta.heksarini@feb.unmul.ac.id

Abstract
The purpose of this study is to prove and analyze the influence between leadership, organizational culture,
motivation, work satisfaction, service quality, customer satisfaction, on financial performance at PT. BPD
KaltimKaltara.
This study uses a quantitative approach starting with deductive thinking to reduce the hypothesis, then
conduct testing in the field by distributing questionnaires to 165 employees as respondents who sampled a
total population of 1,262 employees of PT. BPD Kaltim Kaltara. The data obtained are then processed by
statistical methods using WarpPLS software to be analyzed descriptively and inferential statistics.
The results of this study indicate that Leadership, organization culture and motivation affect the latent
work satisfaction variables, then Work satisfaction is able to influence customer satisfaction higher than
the effect on service quality at PT. Bank Kaltim Kaltara
Service quality is able to influence customer satisfaction higher than its effect on financial performance at
PT. Bank Kaltim Kaltara, but positively and significantly influences indirectly on the financial
performance through the Meditor Customer Satisfaction.
Customer satisfaction slightly influences financial performance at PT. Bank Kaltim Kaltara. It can be
stated that efforts to improve financial performance at PT. Bank Kaltim Kaltara can be done in addition to
improving customer satisfaction and service quality.
Scarcity of research in the context of developing human capital involving marketing elements to measure
financial performance, and the absence of research that examines the company's own internal
organizational culture. Based on the gap, the research looks for a new model by creating a 6C value in
developing organizational culture.
Keywords : development of human capital, leadership, organizational culture, motivation, service –
profit chain, work satisfaction, customer satisfaction, service quality, financial
performance.

INTRODUCTION
PT Bank Pembangunan Daerah Kalimantan Timur dan Kalimantan Utara or abbreviated as PT.
BPD KaltimKaltara and as Bankaltimtara, where in implementing the concept of Service – Profit Chain
can be applied through the planting of certain values to employees who focus on corporate development.
Core Value, Vision, Mission, and Meaning Statement as one of the tangible manifestations of corporate
internal service to employees. PT. BPD KaltimKaltara (Bankaltimtara) has a corporate culture known as
6C, namely Championship, Creativity, Caring, Character, Citizenship, and Customer Focus, company
culture which in de facto has a direct impact on the performance of both individuals and corporations or
brands that are familiar to the customer.
Preliminary observations made on employees of PT. Bank KaltimKaltara shows that there is a
phenomenon that the more the number of employees, the more it affects job satisfaction which tends to
decrease. This condition can have an impact on the form of service provided to customers, so that
ultimately it will also affect customer satisfaction. At the initial observation of the company's financial
performance, it shows that Bankaltimtara's financial performance in the last 5 (five) years, measured
through net income, experienced significant fluctuations with a downward trend
Based on the identification of problems that have been described in the previous section, the
research is formulated into several sub-problems and aims as follows:
1. To prove and analyze the influence of leadership on work satisfaction at PT. BPD Kaltim Kaltara.
2. To prove and analyze the influence of organizational culture on work satisfaction at PT. BPD Kaltim
Kaltara.
3. To prove and analyze the influence of motivation on work satisfaction at PT. BPD KaltimKaltara.
4. To prove and analyze the effect of work satisfaction on service quality at PT. BPD Kaltim Kaltara.
5. To prove and analyze the influence of work satisfaction on customer satisfaction at PT. BPD Kaltim
Kaltara.
6. To prove and analyze the influence of service quality on customer satisfaction at PT. BPD Kaltim
Kaltara.
7. To prove and analyze the influence of service quality on financial performance at PT. BPD Kaltim
Kaltara.
8. To prove and analyze the effect of customer satisfaction on financial performance at PT. BPD Kaltim
Kaltara.

Hesket et al., (1994: 164-174) with service profit chain theory made an important contribution to
the discussion of the effects of good service on customers, in their work on the service profit chain. This
is in accordance with the opinion of Zeithaml & Bitner (2002: 287) which says that employee contact
represents the organization and can directly influence customer satisfaction.
Human capital is a resource that has the most role in increasing competitiveness and contributing
to improving company performance. Human capital is also a unique resource that is able to create a
competitive advantage of the company, so that it can improve company performance to be better and
create added value for the company.
In this company's performance perspective, Luthans (2011: 103) states the following: "The
world 'style' is roughly equivalent to the way leaders influences followers. The accompanying,
International Application Example indicates that this style may be influenced by culture."
Meanwhile Hofstede (2011: 282) says that without exception, culture has a very close
relationship and is a major factor in the success of an organization. Furthermore Hersey and Kenneth
gives an understanding of organizational culture as "the system such as publicly accepted meanings
operating for given groups at given time.
PT BPD KaltimKaltara uses the Integrated Organization Model (IOM) approach to
Organizational Development. This model combines the views of the organization as an open system and
the McKinsey 7S approach. As an open system, the organization has input, process, output, and feedback
in carrying out its mission. The nature of its openness, the organization can be influenced by its
environmental and stakeholder factors. Environmental factors consist of economic, technological,
political, socio-cultural societies. Stakeholders are influential actors in the bank.
In accordance with the 7S McKinsey approach, organizational processes have components of structure,
strategy, systems, staff, skills (competency) and shared values (culture) that influence each other. Figure 1
presents an Integrated Organization Model approach in a diagram :

Figure1
INTEGRATED ORGANIZATION MODEL APPROACH
References : Corporate Manual (BPP) -Bankaltimtara Organization Field (2019)

To support the achievement of the vision and implementation of the stated mission, corporate
values become cultural guidelines that will be fulfilled. Therefore, 6 (six) main values are set known as
6C as a corporate values that are considered in accordance with the conditions and objectives of PT BPD
Kaltim Kaltara. The six values consist of:
1) Championship, have the fighting spirit to always be champions.
2) Creativity, creative in developing banking products and services
3) Caring, has a high sense of concern for fellow Bankaltimtara people.
4) Character, puts character as the basis for developing reputation, both institutions and individuals.
5) Citizenship, has a high sense of responsibility as a good corporate citizen.
6) Customer Focus, making customer interests the basis of every business activity.

Job Satisfaction is a general attitude of an employee to his job (Robbins, 2006: 201). Mathis &
Jackson (2000) suggested "one's job experience emotional job satisfaction is a positive state," so that it
becomes more clear, employees will feel satisfied in working when aspects of their work and aspects
support and vice versa if these aspects not supportive, employees will feel dissatisfied.
The concept of service quality and customer satisfaction is related to one another. Lovelock &
Wright (2005: 96) further states that customers assess their level of satisfaction or dissatisfaction after
using services.
The increasingly fierce competition among institutions providing products and services today is
not only due to the pressing current of globalization, but can also be caused by customers getting smarter,
aware of prices, demanding, less forgiving, and faced with various alternative products and services.
These conditions make customers have many choices to spend their money. Kotler & Keller (2009: 163)
states that creating strong and close relationships with customers is the dream of all marketers and this is
often the key to long-term marketing success.
Performance becomes one important thing for company management. Performance is also
interpreted as a record of outcomes resulting from the function of a particular job or activity during a
certain period. Performance can be divided into financial and non-financial performance (Hansen &
Mowen, 2005: 513). Financial performance is more focused on variables that are directly related to
financial statements, while non-financial performance is ignored because it is considered difficult to
measure and has a quite disturbing weakness, namely its inability to measure the intangible assets and
intellectual assets of human resources.
The Service-Profit Chain forms the relationship between profitability, customer loyalty, and
satisfaction, loyalty and employee productivity. Relationships in chains that must be considered as
propositions are profit and growth enhanced through customer loyalty. Loyalty is a direct result of
customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers.
Values are made by satisfied, loyal and productive employees. Employee satisfaction, in turn, mainly
comes from services and policy support allowing employees to deliver results to customers. This is what
underlies the development of this research conceptual framework as follows:
Leadership
(X1)
Service
Quality (Y2)
Organizational Work Financial
Culture Satisfaction Performance
(X2) (Y1) (Y4)
Customer
Satisfaction
(Y3)
Motivation
(X3)

Figure4
CONCEPTUAL FRAMEWORK

METHODOLOGY
This study uses a quantitative approach. Thus, the logic used is verification of the hypothesis.
This approach starts with deductive reasoning to derive hypotheses, then test in the field. Conclusions
taken or hypotheses based on empirical data. Thus, more emphasis is placed on the index of quantitative
research and empirical measurements. Quantitative researchers feel "know what is unknown" so the
design developed always plans a priori and definitive activities.
The population in this study were all employees of Islamic Banking in East Kalimantan as many
as 1262 people.
The sample determination technique using the Proportionate Stratified Random Sampling based
on the calculation of the Slovin method which produces 165 samples
 The data analysis technique in this study usingWarpPLS. This method is chosen because it is the
most powerful method and the availability of trial software is quite good. in addition, descriptive
statistical analysis was also carried out to complement inferential analysis. Partial Least Square (PLS)
approach, which is a more predictive model. PLS can also be used to explain the relationship between
latent variables. PLS simultaneously can analyze constructs formed with reflective and formative
indicators.
Table 2 Loading Indicator

Construct Indicator Loading P – value

Leadership VSNR 0,797 <0,001
MNTR 0,820 <0,001
BAGI 0,843 <0,001
DMKR 0,811 <0,001
Organization Culture PRSL 0,748 <0,001
KPTS 0,710 <0,001
EKNM 0,721 <0,001
FOKS 0,779 <0,001
KRYW 0,798 <0,001
KMSL 0,726 <0,001
VLUE 0,738 <0,001
Motivation TGJW 0,755 <0,001
PGKN 0,719 <0,001
TGKT 0,833 <0,001
PRTS 0,758 <0,001
Work Satisfaction MAPU 0,744 <0,001
PRMS 0,732 <0,001
PUAS 0,750 <0,001
DMPG 0,736 <0,001
HUBK 0,787 <0,001
Service Quality FSLT 0,758 <0,001
ANDL 0,812 <0,001
TGGP 0,817 <0,001
AMAN 0,729 <0,001
PDLI 0,716 <0,001
Customer LYAN 0,816 <0,001
Satisfaction JKAU 0,819 <0,001
RKMN 0,790 <0,001
Financial ROA 0,818 <0,001
Performance ROI 0,878 <0,001
ROE 0,759 <0,001

The above analysis shows that the measurement of variable outer loading ranges from 0.710 to
0.878 so that all indicators as construct sizes have been shown to have convergent validity
Based on the results of follow-up analysis through WarpPLS 5.0, outputs from the analytical
model can be produced with mediators in the form of path diagrams as follows:

Figure 5
MODEL ANALYSIS RESULTS
Finally, the summary results for decomposed and composite models are shown in below

Table 3
RESULTS OF RESEARCH HYPOTHESIS TESTING - SUMMARY
Direct Indirect
Variabel Variabel Variabel Variabel Effect Effect P Remark
VariabelEksogen
Endogen Intervening Intervening Endogen Path Path values
Coeff. Coeff.
Work S
Leadership 0,551 <0,001
Satisfaction
Organization Work S
0,153 0,022
Culture Satisfaction
Work S
Motivation 0,135 0,038
Satisfaction
Work Service S
0,418 <0,001
Satisfaction Quality
Work Customer S
0,146 0,028
Satisfaction Satisfaction
Service Customer S
0,647 <0,001
Quality Satisfaction
Service Financial S
0,219 0,002
Quality Performance
Customer Financial S
0,217 0,002
Satisfaction Performance
Work Service Customer S
0,270 <0,001
Satisfaction Quality Satisfaction
Customer Financial S
Service Quality 0,140 0,005
Satisfaction Performance
Remarks :
P values< 0.05 (SignificantS)
P values> 0.05 (Not Significant/NS)
P values < 0,001 (if smaller than 1% is significant /S)

Based on the analysis carried out, the following theoretical and empirical findings were found:
1) There is a positive and significant influence between leadership on work satisfaction. Leadership is
projected by leaders to share with subordinates, leaders become good mentors, leadership gives birth
to democratic communication, and visionary leaders, while work satisfaction is projected by good
working relationships between employees, satisfying income, being able to work alone, boss
accompanying good, and get a job promotion. These findings are in line with the opinion of Fiedler
(1967) where leadership must be able to adjust and focus on the followers they lead, thus the
employees or subordinates will be motivated to be able to do their work responsibly.
2) There is a positive and significant influence between the organization culture on work satisfaction.
Organization culture can be projected supported by employees who are professional in their fields,
focus on customers, professional management, ability to implement 6C, create commercially
oriented value added, play a role in national economic development, and are able to compete on a
regional scale. These findings are in line with the opinion of Schein (1992,1991), Hofstede (2011)
and Robbins & Coulter (2007) where strong organizational culture will influence organizational
policy and employees know what should be done in various situations and conditions according to
the instructions and guidelines that are reflected through prevailing values.
3) There is a positive and significant influence between motivation towards work satisfaction.
Motivation in this case is projected by employees who need improvement in the field of work, work
performance is the main goal of employees in working, employees have responsibility in work, and
employees need recognition in the work. The results of this study are in line with the opinions
expressed by Robbins (1996), Robbins & Coulter (2005), Hodggets (1991) and Luthans (2011)
 where motivation is a drive or mobilization in the form of willingness to do something and it is
conditioned by the ability of effort done to satisfy some needs individually.
4) There is a positive and significant influence between work satisfaction on service quality. Work
satisfaction is projected by a good working relationship with fellow employees, satisfying income
received, being able to work alone, boss accompanying subordinates well, and getting a promotion
for work. The results of this study are in line with the opinions expressed by Robbins (2006), Mathis
& Jackson (2000) where if a job satisfaction is achieved properly, employees will perform or carry
out their duties and responsibilities more optimally so that the quality of service produced will be
more optimal .
5) There is a positive and significant influence between service quality on customer satisfaction.
Service quality in this case is projected by responsiveness to customer needs, proven product
reliability, the availability of complete facilities, being able to guarantee customer safety, and caring
for customers. The results of this study are in line with the opinions expressed by Lovelock &
Wright (2005), Parasuraman et al. (1985), where it was stated that the concept of service quality and
customer satisfaction relates to one another.
6) There is a positive and significant influence between work satisfaction on customer satisfaction.
Work satisfaction is projected by a good working relationship with fellow employees, satisfying
income received, being able to work alone, boss accompanying subordinates well, and getting a
promotion for work. The results of this study are in line with the opinions expressed by Robbins
(2006), Mathis & Jackson (2000) and Ciarniene et al. (2010) who suggested that work satisfaction is
a general attitude for an employee to work.
7) There is a positive and significant influence between service quality on financial performance.
Servcie quality can be projected by responsiveness to customer needs, proven product reliability, the
availability of complete facilities, being able to guarantee customer safety, and caring for customers.
The results of this study are in line with the opinion expressed by Kotler and Keller (2009) where
quality is customer-centered and states that quality is the totality of features and characteristics of
products or services that depend on their ability to satisfy implied needs
8) There is a positive and significant influence between customer satisfaction on financial performance.
Customer satisfaction can be projected with the ease of reaching customers anywhere, services that
meet customer expectations, and customers wishing to recommend banks to the general public. The
results of this study are in line with the opinion expressed by Kotler and Keller (2009) that creating
strong and close relationships with customers is a dream for all marketers and often becomes one of
the keys to long-term marketing success.

CONCLUSION

1) The influence of leadership directly on work satisfaction is positive and significant. This shows that
the leadership of PT. BPD Kaltim Kaltara is able to share with its subordinates, able to be a good
mentor, able to give birth to democratic communication, and visionaries can improve work
satisfaction.
2) The influence of organization culture directly on work satisfaction is positive and significant. This
shows that PT. BPD Kaltim Kaltara is supported by employees who are professional in their fields,
focused on their customers, managed professionally, have the ability to implement 6C, create
commercially oriented value added, play a role in national economic development and are able to
compete on a regional scale, thus increasing work satisfaction.
3) The effect of motivation directly on work satisfaction is positive and significant. This shows that the
field of work at PT. BPD Kaltim Kaltara is improved, aims to pursue work performance, has
responsibility for work and acknowledges work, if all can be done well then it can improve work
satisfaction.
4) The effect of direct work satisfaction on service quality is positive and significant. This shows that
PT. BPD Kaltim Kaltara has a good working relationship, has an impact on the results received in
accordance with expectations, the ability of employees to work alone, employers who are able to
assist well, and the realization of job promotion, it can improve service quality.
5) The effect of direct work satisfaction on customer satisfaction is positive and significant. This shows
that PT. BPD Kaltim Kaltara is easily accessible to customers everywhere, bank services are in
accordance with customer expectations, and customers have the desire to recommend banks to other
relatives, so that it can improve customer satisfaction.
6) The effect of service quality directly on customer satisfaction is positive and significant. This shows
that PT. BPD Kaltim Kaltara has responsiveness to customer needs, proven product reliability,
complete facilities provided, guarantees the safety of customer funds and a good sense of care for
customers, so as to improve customer satisfaction.
7) The effect of service quality directly on financial performance is positive and significant. This shows
that PT. BPD Kaltim Kaltara has responsiveness to customer needs, proven product reliability,
complete facilities provided, guarantees the safety of customer funds and a good sense of care for
customers, thereby increasing financial performance.
8) The effect of customer satisfaction directly on financial performance is positive and significant. This
shows that the location of PT. BPD Kaltim Kaltara is easily accessible to customers everywhere,
bank services are in accordance with customer expectations, and customers have the desire to
recommend banks to other relatives, thus increasing financial performance.

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