Abstract
To be able to survive the current Covid-19 pandemic, every business organization is forced to continue to innovate and small and medium industry (SMEs) are deemed capable of winning the competition in the industry. SMEs have the freedom to move and innovate because they are still small in scope, so flexibility and innovation are needed in order to have a competitive advantage. This research examines the immediate and indirect impacts of strategic innovation on employee performance through job satisfaction. The sample of this research is 120employees of the small and medium industry of shoes in East Java by utilizing cluster random sampling technique. The data analysis model uses the analysis technique PLS (Partial Least Squares regression) with the Smart PLS version 3.0 program. The results of hypothesis testing find that Strategic innovation has no critical direct effect on employee performance. Job satisfaction has a direct effect on employee performance. But indirectly the strategic innovation affects employee performance through job satisfaction. This implies that job satisfaction can connect the influence of strategic innovation on employee performance.
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