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Factor Affecting Job Satisfaction and Employee Performance - Good Research 2
Factor Affecting Job Satisfaction and Employee Performance - Good Research 2
Factor Affecting Job Satisfaction and Employee Performance - Good Research 2
https://www.emerald.com/insight/1741-0401.htm
Abstract
Purpose – This study aimed to discover the factors affecting employee performance by testing the
relationship of change management, job satisfaction, organizational commitment and leadership style on
employee performance in Indonesian sharia property companies.
Design/methodology/approach – The study population was all members of “Sharia Property Developer”
(DPS) across Indonesia with criteria of having subordinates at least one person and is listed as a DPS member.
The samples used were 71 people from the 200 members of DPS across Indonesia. The sampling method used
was based on R2 value and significance level with an 80% statistical strength. Data analysis was carried out
using smartPLS software to test the relationship of change management, job satisfaction, organizational
commitment and leadership style on employee performance.
Findings – The utilization of SEM in Smart PLS for change management with the ADKAR method had a
negative value of 6.2% in affecting employee performance and 4.6% in affecting job satisfaction. Job
satisfaction insignificantly affected employee performance by 7.5%. Leadership style and organizational
commitment positively affected performance by 57.9% and 25.6%, respectively.
Research limitations/implications – This study did not limit respondents’ education levels. Twenty
percent of respondents were middle and high school graduates. Respondent’s position was mostly the highest
leader in the company by 58%. Indicators in the ADKAR model did not implement the construct validity test
since the researchers did not find precedent studies that discuss the indicators of the ADKAR model in detail.
Practical implications – Factors that positively and significantly affected employee performance can be
used to plan employee performance of DPS member companies.
Social implications – The company must create a program to produce meaning in working, shape leaders to
have discipline by putting appropriate employees as leaders.
Originality/value – This study used change management, organizational commitment, job satisfaction and
leadership style as exogenous variables, job satisfaction and leadership style as intervening variables. The study
model modified the previous study regarding employee performance improvement because it utilized the change
management with the ADKAR model. The study objects were sharia property companies, where the researchers
did not find previous studies discussing employee performance in sharia property companies.
Keywords Performance, Job satisfaction, Change management, Leadership,
Property an facilities management, Employees
Paper type Research paper
1. Background
Sharia Property Developer, abbreviated as DPS, is the community of property business
actors using the sharia scheme, located at Bogor, West Java. Muhammad Rosyid established
it in 2015 initiated by conducting training regarding sharia property. Each training International Journal of
participant was equipped with documents and process guidelines to build a sharia property Productivity and Performance
Management
business. Participants who have attended the sharia property training at DPS are commonly © Emerald Publishing Limited
1741-0401
known as DPS members. DPS members consist of two types, i.e. active and inactive members. DOI 10.1108/IJPPM-03-2021-0132
IJPPM Active members are those who still run sharia property projects until 2020. Inactive members
are those who do not have sharia property projects in 2020. The total DPS members until 2019
were 1,300, distributed all across Indonesia. DPS continues to evaluate its members,
particularly the number of active members incorporated from 2015 to 2020. The evaluation
result shows that the number of active members remains the same, observed from the
percentage that falls between 20% and 27% from the total members, i.e. 200 active members.
The active member percentage is one of the considerations to make decisions concerning
strategies to improve DPS projects in the future.
One of the DPS strategies to improve the number of active members is determining the
target to build one million house units by 2030. Furthermore, this target is determined from
observing the opportunity of increasing residential needs based on the prediction of
productive age growth in Indonesia until 2030 (Hackett et al., 2015, p. 74). The success of
achieving the target requires active members. Moore active members lead to a higher
possibility of achieving the DPS target. The success of achieving such a target depends on the
strong will of DPS members. The absence of strong commitment can be caused by DPS
members’ internal conditions that do not maximize employee performance (Mroueh and de
Waal, 2017).
Achieving employee performance of DPS member companies is performed through four
methods, i.e. finance, customers, internal process, and learning and growth. One of the factors
in improving employee performance through learning and growth is increasing the number
of DPS active members. The increased number of DPS active members may boost property
association performance, leading to the achievement of the DPS target (Eringa et al., 2008).
An association that considers the increased number of members continues to grow within
competition (Lam, 2009). However, within five years, the number of DPS active members has
not increased, obstructing the association’s growth (Mroueh and de Waal, 2017). DPS should
manage it by increasing the number of DPS active members by managing the human
resource management of DPS members. It is crucial to improve the association’s financial
feasibility and influences the continuity of association projects (Eringa et al., 2008). Human
resource management is a vital factor that plays a role in DPS growth, with employee
performance as the outcome (Meijerink et al., 2020). Improving employee performance of DPS
members can contribute to improving the company quality and achieving DPS target
(Eliyana et al., 2019).
In discovering the employee performance of DPS members, the researchers collected
employee performance data from active members. The data collection results are presented in
Table 1, showing result differences in target plan and achievement. Member companies that
fail to achieve the target were affected by the low employee performance because employee
performance plays a role in achieving company goals (Koopmans et al., 2014).
Based on the results of interviews (Table 2) in companies with employees in the process of
improving performance, it was found that 24% of employees conveyed the need for a change
in leadership style, 24% wanted a change in salary structure, increased employee competence
by 15%, the need for employee development strategies by 15%, reward importance by 10%
and availability of the SOP system by 5%. The interview results can be categorized into,
2. Literature review
The theoretical foundation of the study followed the expectancy theory (Vroom, 1964). The
expectancy theory is initially used in the working motivation aspect, such as motivation
training, turnover, work productivity loss, goal achieving commitment and determining goal
levels (Van Eerde and Thierry, 1996). Meanwhile, organizational behavior in the Vroom
(1964) theory is used to conduct innovations in developing a theory. According to Vroom
(1964), employee performance is created from the combination of performance, motivation
and ability. Porter and Lawler (1968) in Heneman and Schwab (1972) defined employee
performance as the combination of interactions between effort, motivation, ability and role
perceptions. Heneman and Schwab (1972) combined these two expectancy theories, stating
that employee performance is the combination of force or effort, ability and role perceptions.
Interview results
Category Result (%)
Reward importance 10
Salary increment 24
Leadership change 24
Competency development 15
The company’s system and SOP 5 Table 2.
Employee development strategy 22 Result of employee
Source(s): Author’s own creation interview
IJPPM Heneman and Schwab (1972) explain that valence and instrumentality, valence from a
performance level, force and ability have the same definition and differences from both
explanations concerning performance (Vroom, 1964; Porter and Lawler, 1968), in the role
perceptions as the inclusion to improve performance. Three keys in the expectancy theory are
the force of effort, ability and role perceptions in encouraging performance.
Force of effort is the combination of valence at each performance level and perception of
opportunities in achieving performance. Ability is one’s capability, including strength,
abilities and ability to complete the job, which is long-term individual characteristics. Role
perceptions create individual belief in executing similar efforts or activities by taking
directions from superiors to conduct activities to achieve success at their job. Evaluation of
each behavior from superior directions must be periodically executed since it can affect
individual perception in generating performance. This condition relates to how a superior
understand role perceptions regarding the job.
In this study, the authors employed constructs of change management, job satisfaction,
organization commitment and leadership styles. According to Mayfied and Mayfield (2010),
change management and culture are parts of organizational changes, including in the
foundation of traditional management literature and components of Motivation Language.
Vroom (1964) argued that motivation is an input to affect individual performance. Change
management is categorized as the force of effort because the awareness of performing
changes will support individuals to conduct improvement to achieve the predetermined
goals. Job satisfaction and organizational commitment can be categorized as ability, i.e. the
combination of individual characteristics and potential. Leadership style acts as the role of
perceptions, which can support subordinate behaviors and beliefs in achieving success at
their job.
3. Research methodology
3.1 Sample and data collection
This study required primary data acquired by distributing questionnaires to DPS
administrators and members with a minimum of one subordinate. The study analysis unit
was employees with a minimum of 1 subordinate, using a cross-sectional survey of employees
at a minimum of supervisor-level positions.
The study population was 200 DPS members. The sampling standard of arrow numbers to
construct, significance level values and R2 values of minimum 0.25 generated a minimum
sample number of 65 with statistical strength of 80% (Hair et al., 2019, p. 21). The respondent
requirement is employees in DPS members with a minimum subordinate number of one person.
The study data were analyzed using SmartPLS 3.3 software. Previously, a validity test was
Figure 1.
Framework model
IJPPM performed using the product-moment correlation (Hendri, 2019). The instrument is valid if
r value > 0.23, and all indicators were valid because r calculation values were over 0.23.
Data were collected by gathering DPS administrators and members and calling them
individually to be study samples voluntarily. The questionnaires were distributed through
online media using Google Form. The number of business activities was not limited, and the
joining period with DPS was not limited. The respondents were distributed at 26 DPW from
Sumatra to Sulawesi. The questionnaires were distributed to 196 respondents, and 72
respondents returned the questionnaires. After examination, one data was eliminated
because it did not have subordinates; hence, it did not match the expected respondent criteria.
Based on the original data from 71 respondents, 16 had positions at DPS and 55 had no
positions at DPS. Based on the positions, respondents had various positions from Section
Head (21%), Civil Engineering (1%), Project Assistant (4%), Leader (4%), Manager (11%),
CEO (6%), Director (24%) and Business Owner (28%). The number of respondents with one
subordinate was 5.6% of the total respondent, where 94.37% of respondents had more than
one subordinate.
3.2 Measurement
This study was a quantitative type because it aimed to examine the independent, dependent
and mediating variables and the relationship between variables based on certain theories.
The quantitative study variables describe an individual’s characteristics or attributes or an
organization that can be measured or observed, desired, knowledge, ability and
reinforcement (Hiatt, 2006). Six indicator items were used to measure each dimension,
choosing a factor from each dimension based on the highest mean value (Kiani and Shah,
2014). Organizational commitment is used in three dimensions, i.e. affective commitment,
continuance commitment and normative commitment (Meyer and Allen, 1997).
The leadership style consists of three dimensions, i.e. idealized influence, inspirational
motivation and contingent reward, which are taken from the Multifactor Leadership
Questionnaire (Avolio and Bass, 1999; Antonakis et al., 2003) as well as two dimensions of
position power and task structure (Pawirosumarto et al., 2017). Job satisfaction using items in
the Minnesota Satisfaction Questionnaire (Martins and Proença, 2014) with two dimensions,
namely task energy and leader and empowerment, item selection based on the factor loading
value with a value between 0.73 and 0.90, the other three dimensions are taken from
(Pawirosumarto et al., 2017) based on strong correlation values. Employee performance used
three dimensions (Koopmans et al., 2014), and the four dimensions are taken from
(Pawirosumarto et al., 2017).
The researchers employed 40 indicators noted in appendix, comprising six change
management indicators, five organization commitment indicators, eight job satisfaction
indicators, ten leadership style indicators and 11 performance indicators. The selection of
various indicator sources was based on the study object conditions. The survey was
performed using 5 Likert scales with answer choices of 1 5 strongly disagree, 2 5 disagree,
3 5 somewhat agree, 4 5 agree and 5 5 strongly agree.
The validity test used the convergent and discriminant validity in SEM, convergent
validity using the outer loading value in discriminant validity used the AVE square root
value of the latent variable correlation. AVE’s square root value must be greater than the
construct correlation value that has the largest value. The reliability test used Cronbach’s
alpha value to estimate the observed variable indicators’ reliability of internal correlations.
There is a disadvantage in using Cronbach’s alpha, which is sensitive to the number of items
on the measurement scale and tends to underestimate internal consistency reliability. In
overcoming this disadvantage, the outer loading of variable indicators was used (Hair et al.,
2019, pp. 167–185).
4. Results and discussion Indonesian
Respondent data were then statistically analyzed using PLS-SEM with SmartPLS 3.3 sharia property
software, initiated by drawing the path diagram and evaluating outer and inner models.
Drawing the path diagram was based on the conceptual model. The outer model evaluation
companies
was carried out using reflective indicators based on path coefficient values of 0.7, between 0.4
and 0.7 if the AVE value is over 0.5, and composite reliability is over 0.6. The end results after
eliminating unsuitable indicators show that the outer model fulfills reliability and validity
requirements (Tables 3 and 4). Fornell–Larcker construct value results were higher than
other construct relationships with VIF value > 1. Hypotheses were tested with the
bootstrapping process (Figure 2) with 5,000 samples. A hypothesis with p-value < 0.05 is
accepted, and vice versa.
Based on hypothesis testing in Table 5 using PL-SEM, acquired the following results:
CM CM2b 0.857 0.735 0.724 0.826 0.55 Yes Reliable and Valid
CM3 0.722 0.522
CM4 0.545 0.298
CM5 0.804 0.647
EP EP4 0.642 0.413 0.772 0.847 0.528 Yes
EP5 0.67 0.449
EP9 0.667 0.445
EP10 0.844 0.713
EP11 0.79 0.625
JS JS2 0.619 0.384 0.806 0.86 0.554 Yes Reliable and Valid
JS3 0.675 0.456
JS5 0.826 0.683
JS6 0.767 0.589
JS7 0.814 0.663
LS LS1 0.702 0.493 0.886 0.91 0.558 Yes Reliable and Valid
LS2 0.753 0.568
LS3 0.81 0.657
LS4 0.73 0.533
LS5 0.82 0.673
LS6 0.751 0.565
LS7 0.734 0.539
LS10 0.665 0.443
OC OC1 0.803 0.645 0.694 0.811 0.524 Yes Reliable and Valid
OC2 0.623 0.389
OC3 0.579 0.336
OC5 0.854 0.73
Source(s): Author’s own creation
4.2 The effect of organizational commitment on employee performance Indonesian
Organizational commitment from four indicators generated a positive and significant effect sharia property
on employee performance. The result directly influenced performance by 0.256. Testing with
a 5% significance level obtained a t-statistic value of 2.783 and p 5 0.003 < 0.05. This is in line
companies
with studies of Hendri (2019), Soomro and Shah (2019), Renyut et al. (2017) and Al and Anil
(2016) that organizational commitment positively and significantly affected performance.
The highest loading value was 0.854 in the statement of loyalty is crucial. The lowest value
was 0.579 in the statement of the heavy feeling of leaving the organization. This condition
demonstrates that most employees agreed with organizational commitment statements.
Employees also perceived that organizational commitment should be improved since it
Fornell–Larcker
CM EP JS LS OC
CM 0.742
EP 0.218 0.727
JS 0.198 0.459 0.745
LS 0.248 0.722 0.471 0.747 Table 4.
OC 0.473 0.541 0.481 0.479 0.724 Fornell–Larcker
Source(s): The data result using SmartPLS criterion
Figure 2.
Results of
bootstrapping process
IJPPM Direct effect
Hypothesis Independent Dependent Coefficient SE p-value t statistic
affects performance. DPS member management should consider company strategies that will
improve organizational commitment.
This study supports the theory coined by Williams and Hazer (1986) that employees
conduct activities following the company objective. Strong individual engagement and
performing activities under the company’s name show that employees are committed to the
company. Employees have a moral responsibility to stay in various company conditions
following a theory delivered by Meyer and Allen because the company is meaningful to the
employees. This condition is generated since the company creates spiritual habits, leading
employees to have extensive goals in working and acquiring insights in life. The study result
supports Hendri (2019) statement that people with high commitment are loyal and positively
view the company. The commitment is displayed by the willingness to exert all efforts to
achieve company success. The study result contrasts Renyut et al. since employees working
as civil servants (PNS) have good commitment, although insignificant in achieving
performance.
The variable reflecting organization commitment is affective commitment and normative
commitment. The most affecting indicator is the creation of an emotional bond with the
company in loyalty to push moral responsibility to stay in the company. This condition is
enhanced by the sense of family built by superiors, and thus, employees are comfortable
working. Employees treated like family if they have a high responsibility toward work will
give their best performance. Conversely, if employees do not know responsibility, they will
neglect their duties and become a burden on the company. The company continues to incur
fixed costs, but the employees are not responsible for their work. In anticipating such a
condition, a leader with the courage to terminate/punish employees is necessary.
4.8 Implications
This study contributes to science, particularly in the performance management aspect,
including human resource management, to encourage employees to positively achieve company
success. This study proved the relationship between change management, organizational
commitment, job satisfaction, leadership style and employee performance of DPS members.
Change management must be structured, measured and directed to affect performance
positively. Leadership style has the biggest role in affecting employee performance, and
organizational commitment ranks second to affect employee performance. There are only
limited studies using change management in affecting employee performance. It is suggested to
conduct more studies on employee performance using change management.
The practical implication of this study for the Sharia property business and developing the
employee performance concept must consider positive and significant affecting factors, i.e.
leadership style and organizational commitment. Leadership style and organizational
commitment are implemented in creating a Key Performance Indicator (KPI). Activity plan
and achievement target for indicators in both factors must be made. KPI can be made using the
12-step balanced scorecard method following Roberts and David (2020). The balanced scorecard
method is selected to improve performance by 94% or maintain stable performance (Harvey
and Sotardi, 2018). Companies must consider a leadership style suitable with selected indicators
since leadership style suitability can be a mediator to improve employee performance.
Improving organization commitment can be performed by creating loyalty and emotional bond
of employees to improve performance. The arranged KPI must be regularly evaluated weekly or
monthly to administer appropriate and directed suggestions toward employees.
The social implication is that the company must create a program to produce meaning in
working, shape leaders to have discipline by putting appropriate employees as leaders. Most
essential, leaders should ask employees to give a structured report on their activities, job or
target to evaluate and provide positive feedback. The employee selection can use various job
placement instruments to fulfill the “right man in the right place: principle to achieve the
company target.” It can be carried out by providing regular training to have a suitable
leadership style to foster discipline, delegate tasks, communicate effectively and evaluate
subordinates periodically. Leadership style positively affects employee performance
compared to job satisfaction that does not affect performance. It builds comprehension
regarding the vision and mission of the company, accommodates employee aspiration and
explains the positive aspects provided by the company. Also, it creates positive emotions
from words and feelings by improving meaning that positively affects the company, creating
loyalty. Employees must generate initiatives to improve by building the habit to think about
the risks of the absence of improvements, immediately finishing the job and finding the
solutions to various problems through communication with superiors.
Employees must observe how non-property companies treat their employees since not all
employees make policies concerning the spiritual condition of employees. When leaders have
no firmness in making decisions, employees can support by carrying out all decisions. It can
reduce the concerns of the superiors in handling the decision risks. Comparing the salary/
reward/incentive given to the workload will encourage awareness to be grateful to the
company because the take-home salary is relatively larger than the workload received.
Employees need to build awareness of the importance of attending the office according to
regulations without waiting for a reprimand for violating company regulations; this
IJPPM condition will help the company focus more on achieving targets and forming teamwork.
Employees who are exhausted because they bear the workload of others will have a bad
impact on performance achievement (Roberts and David, 2020). Meanwhile, superiors who do
not dare to build discipline should collaborate or synergize with internal or external parties
who will help make regulations, norms and culture in building discipline in the company.
5. Conclusion
Based on study results and the discussion, leadership style and organizational commitment
positively and significantly affected performance. Leadership style had the biggest influence
on the performance of DPS members and mediated organization commitment and
performance. Leadership style with LS5 code had the biggest influence to shape leadership
style. Organizational commitment with OC3a code had the biggest influence to shape
organizational commitment in DPS members. Improving employee performance can facilitate
the company to achieve the determined goals (Koopmans et al., 2014), maximize productivity
and reduce employee turnover, i.e. the company’s main goals after achieving employee
performance (Mowday and Steers, 1979; Maamari and Saheb, 2018). This study considered
novel factors affecting employee performance so that the company should consider the
associated factors to improve customer satisfaction and company performance (Garcia-
Rodrıguez et al., 2020). The relationship between factors affecting performance positively and
significantly will be the suggestions for the management to plan employee performance.
Negative and significant factors should be the paramount consideration for the management
to improve the strategy in change management implementation of DPS members.
6. Suggestions
The researchers’ suggestion for future studies is to utilize the organizational commitment
variable as a performance mediator. It is also recommended to use other variables such as
building discipline in the workplace, training assignment delegation, loyalty, building an
emotional relationship in the model formulation process, and determining the respondent’s
education level to have a good perception in answering the questionnaire. Furthermore, it is
essential to develop the change management variable indicators with the ADKAR model that
has been subjected to the construct validity test to obtain accurate results. Another
suggestion is to use the same variable as in this study for various other studies and study
objects. It is expected for future studies to contribute to the human resource management
performance aspect that is beneficial for practitioners, academics and the public.
7. Study limitations
The study was conducted following the study design plan and was performed maximally.
However, several limitations remained present in this study, i.e. 58% of total respondents
were the highest leader in their companies, and 20% of the respondents were middle and high
school graduates. Moreover, the change management variable indicators with the ADKAR
model were not subjected to construct validity before usage because the researchers could not
find precedent studies discussing ADKAR model indicators in detail. Precedent studies
regarding the ADKAR model only delivered dimensions without discussing the indicators.
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work Motivation, and work environment on employee performance that in mediation by job
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Change
management Indicator Reference
CM1 The company has been running like this since I join Kiani and Shah (2014), Hiatt
CM2a The leader/superior gives support for change (e.g. (2006)
gives presents, changes the organization culture, or
gives directions)
CM2b I have the desire to change because I am motivated
by the expectations of success achieved in the
company
CM3 The company provides training and educational
programs to support the change process
CM4 I have trauma/fears and psychological barriers that
prevent me from unleashing my potential and
abilities at work (Negative)
CM5 The company has a system to monitor performance
and measure the progress of the change process in
each employee
Organizational Commitment
OC1 I don’t feel emotionally attached to the company Meyer and Allen (1997)
(Negative)
OC2 This company is meaningful in my life
OC3 I feel burdened if I leave the company even though I
have the desire to leave/resign
OC4 I don’t believe that someone should be devoted and
have high loyalty to the company (negative)
OC5 One of the biggest reasons for me to continue
working at this company is because I believe that
loyalty is crucial, so I have a moral responsibility to
stay afloat
Job Satisfaction
JS1 I am satisfied with my current job Martins and Proença (2014),
JS2 I am satisfied with the supervision carried out by Pawirosumarto et al. (2017)
my superiors
JS3 My superior controls work effectively
JS4 I am satisfied with the salary
JS5 I am satisfied with the career path opportunities
JS6 The company provides an opportunity to use my
skills
JS7 My supervisor has competence and expertise in
making the right decisions
JS8 I am satisfied to do things that don’t go against my
Table A1. heart
Measurement
scale item (continued )
Change
Indonesian
management Indicator Reference sharia property
companies
Leadership Style
LS1 My subordinates or team have high confidence in Avolio and Bass (1999),
my leadership Pawirosumarto et al. (2017)
LS2 Subordinates are very proud to be in the same team
with me
LS3 I explain in a simple way to be easily understood in
giving directions about what needs to be done and
how to do it
LS4 I enjoy helping subordinates to find meaning in the
work they do
LS5 I explain what subordinates must do if they want to
get awards/rewards
LS6 I give awards/rewards when employees succeed in
carrying out their duties or achieving targets
LS7 I have the courage to lay off an employee if they
don’t comply with the company
LS8 I have courage and strength in building discipline
in the company
LS9 I am able to delegate tasks to subordinates in
accordance with company targets to be achieved
LS10 I request a structured job report
Performance
EP1 I set a plan in work to finish on time Koopmans et al. (2014),
EP2 I always remember the results of the work I have to Pawirosumarto et al. (2017)
achieve
EP3 I immediately start working on a new task when
the previous work has been completed
EP4 I am willing to accept a job that has more
considerable challenges
EP5 I talk to coworkers at work about the negativity in
my job. (Negative)
EP6 I explain what subordinates must do if they want to
get awards/rewards
EP7 I work as I wish
EP8 I feel satisfied when I finish the job
EP9 I can work to complete tasks without being
supervised by superiors
EP10 I have the ability to maintain a good reputation at
work
EP11 I have the ability to maintain teamwork Table A1.
IJPPM About the authors
Istiqomah Nur Latifah M.eng is postgraduate student Industrial Engineering and working as a
consultant for nine years, who services at various type of company in Indonesia especially in business
management, leadership also training. Istiqomah Nur Latifah can be contacted at: Sakura.peradaban@
gmail.com
Dr. Agus Achmad Suhendra – Working at Telkom University as a Faculty Dean of Industrial
Engineering. He has written research paper from 2014 and has published in the various journal and he is
also a speaker in research scientific seminar.
Dr. Ilma Mufidah – Working at Telkom University as Head of the study program of Postgraduate
Industrial Engineering.
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