Exploring the Role of Employee Engagement in the Link Between Compensation, Work Environment, and Performance: A Systematic Literature Review

Abstract

Employee performance is a critical factor in organizational success, influenced by various internal and external elements. Compensation and work environment are key determinants shaping employee motivation and productivity. However, the extent to which these factors impact performance may depend on employee engagement as a mediating variable. This study conducts a Systematic Literature Review (SLR) to explore the role of employee engagement in the relationship between compensation, work environment, and employee performance. This review synthesizes existing findings, identifies research gaps, and highlights theoretical and practical implications by analyzing peer-reviewed journal articles published in the last five years. The results indicate that competitive compensation and a conducive work environment significantly enhance employee engagement and performance. Moreover, employee engagement acts as a bridge that strengthens the impact of compensation and work environment on employee performance. This review contributes to the literature on human resource management by comprehensively understanding how organizations can leverage comp...