The Impact of Owners' Intrinsic Motivation and Work-Life Balance on SMEs' Performance: The Mediating Effect of Affective Commitment

Small and Medium Enterprises (SMEs) in Indonesia play a significant role by contributing to GDP and standing as a pillar of an economy to achieve welfare equality. Many surveys showed that SMEs have a significant role in increasing employment, production, export, and entrepreneurship. Finding the determinant of SMEs' performance is relevant research issue. The purpose of this research is to investigate the impact of intrinsic motivation and work-life balance on organizational performance with affective commitment as a mediator. We employed Structural Equation Modelling (SEM) to examine a sample of 770 SMEs' owners in Indonesia. Results confirmed intrinsic motivation and work-life balance have a significant and positive impact on affective commitment. Meanwhile, only intrinsic motivation has a significant and positive impact on organizational performance. The role of affective commitment as a mediator is supported for non-financial performance. The implication is that SMEs' owners should maintain intrinsic motivation by increasing appreciation while job completion.