Abstract
The aspect of human resource is often neglected by the management of small scale businesses. Most of them emphasize more on market and capitals issues. This problem can be anticipated by improving human resource work performance. For this reason, a study on the implementation of Islamic leadership and commitment and the influence on work satisfaction and performance of Baitul Mal Wa Tamwil (BMT) employees in Central Java Province was conducted. Theoretically, there are strong relationships among leadership, commitment, work satisfaction, and performance. As a Baitul Tamwil, a BMT mainly functions as a sharia financial institution which collects and distributes funds based on sharia principles. One of the basic sharia principles which is used in this institution is fair profit sharing both in the collection and the distribution of the fund. So far, many BMTs attempt to implement the sharia-based financial functions professionally and conform to the principles of syaria. Using quantitative method with Partial Least Square (PLS) approach, this study analyzes the correlation of these variables namely Islamic leadership, commitment, and their implication on employees' satisfaction and performance. Partial Least Square is adopted since this study used reflective and formative indicators and the number of samples is relatively small; it requires at least only 10 times of correlation lines. Another consideration is that PLS model is more appropriate to make prediction, as an implication of the result of the analysis through hypothesis. Based on the result of both qualitative and quantitative analyses, it is concluded that Islamic leadership has a positive and significant influence on employees' commitment; Islamic leadership has a positive and significant influence on employees' work satisfaction; Islamic leadership has a positive and significant influence on employees' performance; Islamic commitment has a positive and significant influence on employees' satisfaction and finally Islamic work satisfaction has a positive and significant influence on employees' work performance. Based on the qualitative and intuitive analysis, it is concluded that leadership, commitment, Islamic work satisfaction and Islamic work performance have positive impact on the overall performance of the organization. A leader should always act fairly and be a good model for his men. In other words, leadership capacity is the ability to put all Allah's will as prescribed on Al Qur'an Surah Al-Maidah verse 42 and An-Visa verse 59 into practice.