Sudarsih

Type of the article: Research Article

Abstract
Understanding factors that drive employee performance in SMEs is crucial, as human resources are central to success. This study was conducted among batik-producing SMEs in East Java Province, Indonesia, a cultural heritage sector of labor-intensive, skills-based businesses that rely on employees to maintain production quality, sales service, and sustainability. Although entrepreneurial leadership and employer branding are recognized as drivers of employee outcomes, prior studies have examined them separately in large organizations, limiting understanding of their combined effects in SMEs. This study aims to examine the effects of entrepreneurial leadership and employer branding on employee performance, with employee engagement as a mediator and organizational trust as a moderator. Data were collected from 357 employees of batik-producing SMEs in East Java Province, Indonesia, between October and December 2025. Respondents were selected through purposive sampling, targeting production, sales, and administrative staff, as these groups contextually represent core operations. Data were analyzed using PLS-SEM. The results show that entrepreneurial leadership (β = 0.222, p < 0.001) and employer branding (β = 0.476, p < 0.001) positively influence employee performance. Both variables exhibit significant indirect effects through employee engagement (β = 0.074, p < 0.01; β = 0.045, p < 0.01). Organizational trust strengthens the entrepreneurial leadership–employee engagement relationship (β = 0.135, p < 0.01) but weakens the employer branding–employee engagement relationship (β = −0.165, p < 0.01). These findings clarify how entrepreneurial leadership and employer branding shape employee performance in batik SMEs under uncertain environments.