IMPACT OF HALAL STANDARDS ON LOGISTIC EMPLOYEE PERFORMANCE

Abstract

Halal market size was predicted to grow to 3.2 Trillion dollars in 2024. Many countries, including Indonesia, have a strategic plan for this huge market opportunity. The Indonesian government asked organisations that produce Halal products to adopt Halal Standards is compulsory. Still, there are many internal factors that organisations need to consider to begin the implementation. One of these factors is related to the diverse workplace and the performance of an employee. This research aims to understand and analyse the effect of Halal Standards and performance management on employee performance with work motivation as an intervening variable and Islamic work ethic as moderator. The data collection was captured by distributing a questionnaire to Third Party Logistic Halal certified floor staff employees in two centres of Halal Supply Chain in Indonesia located in West and East Java. These Halal centres are diverse religious workplaces. The sample determination is done through Random Sampling, and the analysis technique uses Partial Least Square (PLS). The results showed that Halal Standards, work motivation and performance management have a significant impact on Employees Performance. Work motivation mediated Halal Standards and performance management on employee performance, but Islamic work ethic is not a moderator between work motivation and employee performance. The results are also interesting because, even though Halal Standards are Islamic rule, there is no significant issue to adopt it on 3PL with a diverse religious workplace.