Correlation of Communication and Compensation and Benefits on Employees Performance Mediated by Motivation Research on Companies Merger and Acquisition in Indonesia in Oil and Natural Gas Industry

Merger and Acquisition (M&A) is a common business practice in the twenty-first century. In M&A, human resource is the key to its success especially to create value-added for the company. Thereby, employees' performance shall be understood by the company towards its objectives. The purpose of this research is to examine what factors have potential effects on employees' performance in the context of companies after acquisition. Factors analyzed are communication and compensation & benefits, using motivation as a mediation factor on the relation between the factors to the employee's performance. Quantitative method is used in this research, whereas the data is collected by online questionnaire to 215 respondents of employees in four oil and gas companies in Indonesia after their acquisition by the state-owned enterprise within the period 2015-2018. Data analysis is processed with the help of SPSS of path analysis and Sobel test to test the hypotheses. Findings show that communication and compensation & benefits have a significant correlation on employees' performance. In addition, Motivation as a mediation variable also intervenes the correlation of communication and compensation & benefits to employees' performance.

by the acquiring company. Compensation practices to create better employees' performance is designed to improve their productivities as a result of higher accountability, whilst observing different performances shown by the employees (Samnani & Singh, 2014). It is without a doubt that employees' performance relies on their motivation in their occupation. Motivation is also having an important role in achieving an organization's objectives. Each employee is a unique individual and has different motives. Even though the company couldn't do much about motives different, the company could still understand their basic motive to maintain their high performance which will empower them to achieve the company's objectives.
Research on employees' perception on communication and compensation & benefits to their performance especially those who work in oil and gas company after the acquisition is few in Indonesia, as well as research which uses Motivation variable as the mediator between communication and compensation & benefits on employees performance. Therefore, the purposes of this research are:

1.
Whether Communication has a direct correlation to Employees Performance in oil and gas company after acquisition in the period 2015-2018? 2.
Whether Compensation & Benefits has a direct correlation to Employees Performance in oil and gas company after acquisition in the period 2015-2018? 3.
Whether Motivation has a mediation effect in the correlation between Communication, Compensation & Benefits on Employees Performance? Mwebi and Kadaga (2015) argued that employees' performance refers to their attitude towards their works. There are several basics or characteristics that can be used to determine employees' attitudes towards their works, which are different from one field to another. Employees with larger control over their schedule have a tendency to show higher involvement, commitment, retention, and satisfaction (Muchiti dan Gachunga, 2015). From Andreani (2016), employees' performance is a result of their performance within a period based on the responsibility authorized by the company. Higher employee's performance describes their capability to make a contribution by their performance, therefore, showing attitude in line with the company's objectives, and has positive impacts on the company's productivity.

Employees Performance
Research by Bhatia & Balani (2015), shows that effective internal communication has a significant role in the higher level of employees performance. Widiani et al., (2019) stated that whether compensation is positively and significantly correlated with employees' performance. The higher compensation received by the employees, the higher their performance.

Communication
Communication is an important point because all processes from planning to the organizing of an organization may be implemented according to plan if it is well communicated. Communication may be defined as a process that conveys an idea, information, and understanding from one to another with the expectation that they could interpret it accordingly (Mangkunegara, 2005). Organizational communication in general discuss function and relationship structure between people in an organization, there is a limitation on information flow in a network that relies on each other, such as horizontal and vertical flow of communication (Sosrowidigdo, 2020

Compensation & Benefit
Compensation can be defined as any kind of appreciation or reward in return for employees' contribution to their organization as given to the company. Compensation has two main components according to Dessler (2006), which are (1) Direct payment such as salary or wages, incentives, and bonuses and commissions; (2) Indirect payment such as health benefits, insurance, financial gain, and paid leaves.
Financial remuneration such as retention incentives had long been considered as an antidote to maintaining potential employees during M&A deals. In many M&A, compensation & benefit is included as a retention plan, and the amount of money is increased to retain the employees often considered as a part of the deal. The company wanted to believe that the retention incentive to stay with the surviving company is sufficient to make them stay. However, retention incentives may be started only to build a bridge that recovers the employee's trust by buying some time. Financial remuneration alone would not build employees' performance in the long term. The company shall gain their employee's trust back. Otherwise, after retention incentives are paid, the employees might consider better alternatives. Furthermore, the amount paid to them as retention incentives, when it ceased or discontinued, would only create temporary stability (Kivuti, 2013).
Sufficient compensation to the roles and responsibilities of a company, and pursuant to the government regulation will affect the employees, thereby improving their performance (Candradewi & Dewi, 2019). Widiani et al., (2019) stated in their research that compensation shows a positive and significant correlation on employees' performance that the bigger compensation received by the employees, the higher their performance. Hameed et al., (2014) in his research stated that compensation shows a positive correlation on employees performance, such compensation as salary, and direct compensations such as health insurance, pension fund, annual leaves, and paid leaves, and maybe a discount given to their employees in the case of food-related companies.
Research by Aktar et al. (2012) shows that there is a positive correlation between rewards and employees performance. There are two factors included in extrinsic rewards such as base salary and performance bonus. Base salary is a highly significant factor that affects employees' performance relative to a performance bonus. Both are positive significant factors that affect employees' performance. There are four factors of intrinsic rewards such as acknowledgment, access to education, challenging works, career advancement. Among the four factors, it is challenging works that affect performance employees highly significant. Previous researches are the basis for the following hypothesis:

Motivation
The term Motivation comes from Latin which is movere means to move. Hanafi and Yohana (2017) define motivation as an effort to determine employees' needs and help to achieve them by the uninterrupted process. Motivation at its base serves the purpose of easier attitude and power which enable an individual to take actions towards certain objectives (Shahzadi et al., 2014).
Employees need to be motivated, the purpose is to maximize their capabilities and skills to achieve the company's demand. An individual will feel that their works are had if their motivation is low. Employees will consciously perform in their field with the right motivation. Good organization is built on motivated employees to serve the company or organization (Hamali, 2018).
M&A is expected to have a differential effect on the employee's motivation level (Kivuti, 2013). The acquiring company acknowledged that M&A created opportunities window in employees selection. M&A is used as a mechanism to dismiss employees no longer productive from lack of motivation, and then increase the employee's skills, and recruit new employees with more skills according to the surviving company's needs which expect higher motivation. Further motivation could be achieved through management programs such as management transition completion, improving inter-entities communication, and facilitating complex integration (Tanriverdi & Venkatraman, 2005). Employees' motivation is the most important element for all organizations to have excellent achievement both in public or private sectors (Chintallo & Mahadeo, 2013).
Experts had identified two different motivations, intrinsic and extrinsic. Both motivations are believed to have a direct implication to performance because it needs higher energy level, concentration, and determination as stated by the previous research such as Maduka dan Okafor (2014). Research by Kiruja E.K. and Mukuru, E. (2018) stated when the motivation is high, the employee's performance is high and thereby motivation is an important predictor of employees' performance in an intermediate-level public technical institution in Kenya. Some employees are poorly motivated because of a lack of acknowledgment for good performance and without any feedback after their works are completed, thereby rewards and feedback really helped to improve employees' motivation in their works. This is supported by Abdulsalam & Mawoli's (2012) research on motivation and performance of academic staff in a state university in Nigeria, which stated that motivation has a significant correlation on the performance of academic staff but without a significant correlation on academic staffs research performance. Implicitly, university lecturers shall be motivated sufficiently to facilitate effective knowledge transfer to their students and to improve educational standards in universities in Nigeria. Research by Shahzadi et. Al (2014) examines the relationship between motivation and employees' performance, it described that the employees are motivated by autonomy and freedom given to them to work, which will affect their spirits and performance.
Candradewi & Dewi (2019) in their research stated that motivation could mediate partially the relationship between compensation and employees performance, therefore the company needs to improve employees' motivation for higher performance. This research and previous researches are conducted in the public sector of several industries, but it did not specify to oil and natural gas industry. In addition to the research by Chandradewi & Dewi (2019), no other research examines motivation as a mediation variable. It is for these reasons, the author proposes the following hypotheses: The framework of this research is shown in Figure 1. According to the previous researches, the author proposed that communication and compensation & benefits could affect employees' performance directly. In addition, we propose that motivation could mediate the relationship between communication and compensation & benefit performance.

Methodology
In this research, the sampling method used non-probability sampling by purposive sampling approach, because the target of research respondents is according to the several criteria determined by the author and according to the research objectives.
Research objects are communication and compensation & benefit, and employees motivation and research subjects are employees who work with foreign oil and natural gas companies that had been acquired by state-owned oil and gas enterprises in 2015-2018, where the unit of analysis is individual. No other specific criteria limit the subject in addition to the stated above, where including subject is comes from various position levels (operators -managerial staffs), sex, department/office, and works location (land or offshore platform). This research involved four companies with a total population of as much as 1,248 full-time employees. The number of samples needed in this research is calculated using the Slovin equation, = 1+ 2 , and with a 95% confidence level (e), as many as 303 samples are collected.
Data collection used the survey method from the end of 2020 to February 2021 (about 60 days). Survey used questionnaire distributed through electronic media such as questionnaire link in electronic mail or messaging application in social media (>350 questionnaires), thereby it reached the respondents who work in the office and in the field (land or offshore platform). The questionnaire asks closed questions and used the Likert Scale 1-5. The total number of respondents is 215 questionnaires or 71% of the total sample requirement. The author is aware of such a lower sample population and understood it as because the people who asked to participate in the research are busy and their priority is changed due to pandemic Covid-19. 215 samples collected by the author are used in the following analysis in this research.

Classic Assumption Test
Data cleansing is conducted to detect any outlier. The questionnaire is administered to the respondents through online media in which respondents shall respond to all questions to avoid any missing value. Data cleansing used univariate outlier test with Zscore and multivariate outlier test with Mahalanobis Distance. Data with Z-score lower than the cutoff point -3.9 (Ghozali, 2013) was found in Respondent 10 with a minimum Z-score -4.2551. Whereas in multivariate outlier test, the data with Mahalanobis Distance probability beyond the cutoff point 0.001, also found in Respondent 10, the value is 0.0000. Thereby, Respondent 10 was excluded from the research thereby the researcher proceed with 214 respondents. Table 1 shows respondents' profiles in this research. By their sex, the majority of respondents are male 78.5%. By their age, as much as 60.7% age 36-45, while the others are age 25-35 and above 45. As many as 53.8% are staff in their company, and this is the majority position of the respondents. According to the author, this percentage represents the population of this research, where the majority of employees are staff level. By education, the majority are Bachelor / Undergraduate, followed by Master / Graduate as much as 27.1%. 64% of respondents had 10 years tenure with the company before it is acquired. 78.5% of respondents had less than 3 years tenure with the acquired company, and 20.1% had 3-5 years tenure after the company is acquired. The results show actual population condition, where the companies in this research are acquired in the period 2015-2018, thereby if the research is conducted at the end of 2020 -beginning of 2021, the respondents will work with the acquired company for 2-5 years.
The last respondent's characteristic is the respondent's department. This is dominated by the Operations department as much as 34.1% and also the Subsurface/ Drilling/ Facility department as much as 33.6%.

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All variables were tested using descriptive analysis to show descriptive data such as frequency, mean, and standard deviation of the responses to the questionnaire. Table 2 below shows the mean value of Performance as much as 3.697 for the respondents who Agree (4) and the standard deviation is 0.619. The mean value of the Communication variable is 3.427 for the respondent who Agrees (4) and the standard deviation is 0.711. The mean value of the Compensation & Benefits variable is 3.507 for the respondents who Agree (4) and the standard deviation is 0.696. The mean value of the Motivation variable is 3.336 for the respondents who Agree (4) and the standard deviation is 0.812. The author then conducted a normality test. The first normality test is by descriptive analysis to shows its statistic skewness and curtosis, where all variables are less than 1.96, followed by a univariate test of Kolmogorov-Smirnov from its results which shows that the value for each variable is larger than 0.05 thereby it is stated that the six variables data followed normality assumption. In a multivariate test, a histogram shows the data distribution of bell-shaped and a P-P plot shows data distribution is in line and dense with a line in the center, thereby the data in this research is normal. A multicollinearity test is conducted to ensure that a regression model is multicollinear or intercorrelated between independent variables. Findings show that the data set is free of multicollinearity with the VIF value of all variables being less than 10 and the tolerance being above 0.1. The next classic assumption test is the linearity test which shows that the linearity between the dependent variable Performance and the other two dependent variables Communications, Compensation & Benefits and Motivation has a significance value less than 0.05 which means that it follows linearity.

Path Analysis for Communication and Compensation & Benefits, and Motivation on Performance Variables
The following is path analysis for Communication and Motivation on Performance variables and path analysis for Compensation & Benefits and Motivation on Performance Variables.

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The conclusion from path analysis to the Compensation & Benefits variables on Performance which is Compensation & Benefits variables together with Motivation is correlated to the Performance.
Motivation variable significantly and directly correlated on the Performance with Sig value is 0 (<0.05) and t-value > t-table (13.765 > 1.98). The author did not conduct the Motivation capability simultaneously, but it will be tested by the Sobel test to see Motivation capability as the intervening variable.
To find the significance of direct and indirect correlation of each variable, it is necessary to calculate Beta Coefficient on the Standardized Coefficients for each variable.

a) Direct Correlation
The calculation of each independent variable for its direct correlation is shown in the following table.  Referring to direct correlation results of mediation model from X to Y (coefficient c'), the conclusion that can be inferred is there is a significant correlation on Communication variable to the Performance and also Compensation & Benefits variable to the Performance and each has Sig value 0 (<0.05).
From the calculation and acceptance criteria that a variable is a mediation variable, it can be concluded that the mediation criteria for the Communication variable are accepted where Sig < 0.05. The correlation of coefficient c' as much as 0.469 with Sig 0 < 0.05 and lower ab coefficient 0.190 but not equal to zero and having mediation element, therefore findings shows partial mediation by the Motivation. This applies to the mediation criteria where the Compensation & Benefits variable is accepted with Sig < 0.05. The correlation of coefficient c' as much as 0.343 with Sig 0 < 0.05 and lower ab coefficient as much as 0.219 but not equal to zero and having mediation element, therefore findings show partial mediation by the Motivation. The research hypotheses from causal step and product of coefficient is that from the findings shown in Table 3 where the significance value of Communication, Compensation & Benefits variables is below 0.05, it can be concluded that H1 is accepted, which means that Communication has a significant correlation on the Employees Performance. This means the communication process could have a significant correlation on the employee's performance, especially during the transition when the surviving company commenced its operation after acquisition. H2 is accepted, which means that Compensation & Benefits has a significant correlation on the Employees Performance. Compensation & Benefits are seen as important for the employees which might affect overall performance. H3 is accepted, which means that Motivation has a significant correlation with Employees Performance.

Analysis Discussion
The purpose of this research is to see whether communication and compensation & benefits are correlated to the employee's performance in the surviving company after the M&A process, also whether the variables are correlated to the motivation as a mediation variable.
Hypothesis 1 and Hypothesis 4 test shows that communication has a significant correlation with the employee's performance and such correlation is mediated partially by motivation. In general, the satisfactory level of communication from the company to the respondents is 53% of the total respondent. From the number, it is proved that communication has a significant role in the development of employees confidence level towards the company. In this research, the relatively low communication satisfaction level towards the company shall be highlighted by the company especially by the top management, where they need to improve further their communication and engagement to the employees, and need to develop a communication package both direction and report which shall be clear, brief and meaningful. It is acknowledged that at the beginning of the transaction almost all administrative procedures are changed according to the surviving company, however, after which, information and communication shall be provided inconsistent manner and empiric as well as in writing, therefore it is accessible and followed by all employees.  (2019) also support that compensation has a significant and positive correlation on motivation, whilst motivation has a significant and positive correlation on employees' performance, and compensation has a significant and positive correlation on employees' performance with mediation. These findings show that motivation mediated the correlation of compensation on employees' performance. Higher compensation could affect employees' motivation and improve employees' performance. However, this did not support findings by Maria (2019) that motivation did not mediate the relationship between compensation & benefits to the employee's performance.
Hypothesis 3 results show that motivation has a significant correlation with employees performance. This research placed motivation as a mediation variable, but motivation itself has no direct positive correlation on employees' performance, where employees' performance is better if they have strong motivation to work. As stated in the foregoing, motivation is an important element for an organization to achieve its objectives or success, and the individual motivation of each employee could also be empowered by the company's management through nurturing environment and conducive for its employee's motivation.
Farhah et al. (2020) research findings support this research, it stated that motivation has a direct significant correlation on employees' performance thereby higher level of employees performance is needed to motivate or empower the employees. These research findings also support research by Purwanto (2020) where the motivation variable as an independent variable has a positive and significant correlation on employees' performance. An employee can have motivation both extrinsic and intrinsic to perform a particular task. Both motivation concepts are empowered each other, but there are times intrinsic motivation is weakened by extrinsic motivators. In addition, any individual will have different motivations, few are motivated extrinsically, and the rest are intrinsically motivated. So et. al. (2018) conduct research in which findings stated that motivation has a significant correlation with employees' performance, that positive motivation will improve their performance.

Conclusion and Recommendation
The research is conducted by the author to examine the correlation of independent variables such as Communication and Compensation & Benefits on the Performance as the dependent variable, in addition, this research examines Motivation mediation effect on such variables to the Performance. This research targeted four oil and gas companies in Indonesia after acquisition within the period 2015-2018. In general, the conclusion of this research stated that employees' performance in particular those who work in the oil and gas industry of the companies after the acquisition is significantly correlated to the company's communication, as well as the compensation and benefits received by the employees. Motivation is a mediator which empowers the relation between communication and compensation & benefits to overall employees' performance.
In its communication, the company shall maintain and develop effective communication, thus its employees will be updated on the latest news/issues with respect to the company. This shall be carried out to maintain the involvement and engagement and the sense of belonging to the company. The more employees are involved in any activity towards the company's objectives, the more confident and responsible they are to show maximum contribution for the company. The company shall maintain or renew and appropriate the compensation & benefits received by the employees according to the market in the industry. This is the company's responsibility to its employees. The employees who perceived that the compensation & benefits as received by them are as expected, they will be hard to be persuaded to work for other companies. Reward also will improve employees' performance no matter how peculiar, this will maintain employees motivation.
The variables in this research are two variables with the potential to affect the employee's performance, and only have one mediation variable which is motivation. Findings shows, the variables could not fully explain all factors with potential effects on performance, especially in the oil and gas industry in Indonesia. With this said, other variables might have potential effects on employees' performance.