Advancing Employee Retention through Compensation: Mediating Roles of Blue Ocean Leadership and Work Engagement in Human Capital Value among Gen Z
English
Keywords:
Human Resource Management, Human Capital Management, Blue Ocean Leadership, Employee Retention, Employee Work Engagement
Abstract
This study examines the relationship between compensation and employee retention, with a focus on the mediating roles of Blue Ocean Leadership and Employee Work Engagement among Generation Z employees in West Java. Grounded in Social Exchange Theory, the research highlights how compensation influences retention directly and indirectly. Using Partial Least Squares-Structural Equation Modeling (PLS-SEM), data were collected from 217 respondents representing various industries. The results reveal that compensation has a significant positive impact on employee retention. Furthermore, Blue Ocean Leadership and Employee Work Engagement mediate this relationship, though their effects are relatively limited. The findings underscore the importance of integrating financial incentives with innovative leadership practices and engagement strategies to improve retention rates. Practical implications suggest that organizations should enhance compensation frameworks while fostering inclusive leadership and meaningful engagement initiatives. Future research should explore additional mediators and longitudinal impacts to deepen understanding of these dynamics.References
Ahmad, R., Nawaz, M. R., Ishaq, M. I., Khan, M. M., & Ashraf, H. A. (2023). Social Exchange Theory: Systematic Review and Future Directions. Frontiers in Psychology, 13, 1015921. https://doi.org/10.3389/fpsyg.2022.1015921.
Al Nsour, I. A. (2016). The Impact of Applying the Blue Ocean Strategy on The Competitive Advantage of Commercial Banks in Saudi Arabia. Arab Economic and Business Journal, 11(1), 1–15. https://doi.org/10.1016/j.aebj.2015.08.001.
Ali, H., Li, M., & Qiu, X. (2024). Examination of HRM Practices in Relation to the Retention of Chinese Gen Z Employees. Humanities and Social Sciences Communications, 11(1), 24. https://doi.org/10.1057/s41599-023-02472-6.
Andrade, C. (2021). The Inconvenient Truth About Convenience and Purposive Samples. Indian Journal of Psychological Medicine, 43(1), 86–88. https://doi.org/10.1177/0253717620977000.
Bencsik, A., Juhász, T., & Horváth-Csikós, G. (2016). Y and Z Generations at Workplaces. Journal of Competitiveness, 6(3), 90–106. https://doi.org/10.7441/joc.2016.03.06.
Campbell, S., Greenwood, M., Prior, S., Shearer, T., Walkem, K., Young, S., Bywaters, D., & Walker, K. (2020). Purposive Sampling: Complex or Simple? Research Case Examples. Journal of Research in Nursing, 25(8), 652–661. https://doi.org/10.1177/1744987120927206.
Cho, E., & Kim, S. (2015). Cronbach's Coefficient Alpha: Well-Known but Poorly Understood. Organizational Research Methods, 18(2), 207–230. https://doi.org/10.1177/1094428114555994.
Das, A. K., & Malik, P. (2024). Ascertaining Factors Inducing Engagement and Stay Intention Among Gen Z: A Qualitative Study in The Indian Context. International Journal of Organizational Analysis. https://doi.org/10.1108/IJOA-09-2023-3994.
De Rezende, N. A., & De Medeiros, D. D. (2022). How Rating Scales Influence Responses’ Reliability, Extreme Points, Middle Point, and Respondents’ Preferences. Journal of Business Research, 138, 266–274. https://doi.org/10.1016/j.jbusres.2021.09.031.
Ellinger, A. E., Naidoo, J., Ellinger, A. D., Filips, K., & Herrin, G. D. (2020). Applying Blue Ocean Strategy to Hire and Assimilate Workers with Disabilities into Distribution Centers. Business Horizons, 63(3), 339–350. https://doi.org/10.1016/j.bushor.2020.01.009.
Gayatri, E., & Muttaqiyathun, A. (2020). Pengaruh Job Insecurity, Beban Kerja, Kepuasan Kerja dan Komitmen Organisasi terhadap Turnover Intention Karyawan Milenial. Proceedings of the University Research Colloquium, 77–85. Retrieved from https://www.repository.urecol.org/index.php/proceeding/article/view/1014.
Guest, D. (2014). Employee engagement: A sceptical analysis. Journal of Organizational Effectiveness: People and Performance, 1(2), 141–156. https://doi.org/10.1108/JOEPP-04-2014-0017.
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook. Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to Use and How to Report the Results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203.
Henseler, J., Dijkstra, T. K., Sarstedt, M., Ringle, C. M., Diamantopoulos, A., Straub, D. W., Ketchen, D. J., Hair, J. F., Hult, G. T. M., & Calantone, R. J. (2014). Common Beliefs and Reality About PLS: Comments on Rönkkö and Evermann (2013). Organizational Research Methods, 17(2), 182–209. https://doi.org/10.1177/1094428114526928.
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IDN Research Institute (2024). “Indonesia Gen Z Report”, IDN times (2024). Diakses pada tanggal 27 Mei 2024. https://cdn.idntimes.com/content-documents/indonesia-gen-z-report-2024.pdf.
Jian, O. Z., Yin, K. Y., & Awang, M. (2020). The Extent of Blue Ocean Leadership, Employee Engagement and Team Performance During Covid-19 Pandemic. International Journal of Academic Research in Business and Social Sciences, 10(11), Pages 926-937. https://doi.org/10.6007/IJARBSS/v10-i11/8150.
Kim, W. C., & Mauborgne, R. (2017). The W. Chan Kim and Renee Mauborgne Blue Ocean Strategy Reader. Harvard Business Review Press.
Kusnendi, & Ciptagustia, A. (2023). Analisis Model Pengukuran dan Struktural dalam Penelitian Manajemen Bisnis (Cet. 1). UPI Press.
Kwon, K., Jeong, S., Park, J., & Yoon, S. W. (2024). Employee Development and Employee Engagement: A Review and Integrated Model. Career Development International, 29(2), 169–184. https://doi.org/10.1108/CDI-04-2023-0117.
Lachowicz, M. J., Preacher, K. J., & Kelley, K. (2018). A Novel Measure of Effect Size for Mediation Analysis. Psychological Methods, 23(2), 244–261. https://doi.org/10.1037/met0000165.
Lila Maria Kaban & Umi Kulsum. (2023). Study on Compensation, Organizational Commitment, and Work Motivation for Employee Retention at a Local Hospital. Jurnal Multidisiplin Madani, 3(4), 857–870. https://doi.org/10.55927/mudima.v3i4.3852.
Ly, B. (2024). Inclusion Leadership and Employee Work Engagement: The Role of Organizational Commitment in Cambodian Public Organizations. Asia Pacific Management Review, 29(1), 44–52. https://doi.org/10.1016/j.apmrv.2023.06.003.
Meylianti S, B., & Mulia, F. (2009). Pengaruh Penerapan JIT (Just in Time) dan TQM (Total Quality Management) Terhadap Delivery Performance Pada Industri Otomotif Di Indonesia. Jurnal Manajemen Teori dan Terapan| Journal of Theory and Applied Management, 2(2). https://doi.org/10.20473/jmtt.v2i2.2379.
Shmueli, G., Sarstedt, M., Hair, J. F., Cheah, J.-H., Ting, H., Vaithilingam, S., & Ringle, C. M. (2019). Predictive Model Assessment in PLS-SEM: Guidelines for Using PLS-Predict. European Journal of Marketing, 53(11), 2322–2347. https://doi.org/10.1108/EJM-02-2019-0189.
Shoaib, S. M., Ali, N., & Raza, S. (2023). Impact of Organizational Culture and Compensation on Job Satisfaction and Employee Retention: A Case of Pharmaceutical Industry of Pakistan. GMJACS, 13(1), 78–94. https://doi.org/10.59263/gmjacs.13.01.2023.288.
Al Nsour, I. A. (2016). The Impact of Applying the Blue Ocean Strategy on The Competitive Advantage of Commercial Banks in Saudi Arabia. Arab Economic and Business Journal, 11(1), 1–15. https://doi.org/10.1016/j.aebj.2015.08.001.
Ali, H., Li, M., & Qiu, X. (2024). Examination of HRM Practices in Relation to the Retention of Chinese Gen Z Employees. Humanities and Social Sciences Communications, 11(1), 24. https://doi.org/10.1057/s41599-023-02472-6.
Andrade, C. (2021). The Inconvenient Truth About Convenience and Purposive Samples. Indian Journal of Psychological Medicine, 43(1), 86–88. https://doi.org/10.1177/0253717620977000.
Bencsik, A., Juhász, T., & Horváth-Csikós, G. (2016). Y and Z Generations at Workplaces. Journal of Competitiveness, 6(3), 90–106. https://doi.org/10.7441/joc.2016.03.06.
Campbell, S., Greenwood, M., Prior, S., Shearer, T., Walkem, K., Young, S., Bywaters, D., & Walker, K. (2020). Purposive Sampling: Complex or Simple? Research Case Examples. Journal of Research in Nursing, 25(8), 652–661. https://doi.org/10.1177/1744987120927206.
Cho, E., & Kim, S. (2015). Cronbach's Coefficient Alpha: Well-Known but Poorly Understood. Organizational Research Methods, 18(2), 207–230. https://doi.org/10.1177/1094428114555994.
Das, A. K., & Malik, P. (2024). Ascertaining Factors Inducing Engagement and Stay Intention Among Gen Z: A Qualitative Study in The Indian Context. International Journal of Organizational Analysis. https://doi.org/10.1108/IJOA-09-2023-3994.
De Rezende, N. A., & De Medeiros, D. D. (2022). How Rating Scales Influence Responses’ Reliability, Extreme Points, Middle Point, and Respondents’ Preferences. Journal of Business Research, 138, 266–274. https://doi.org/10.1016/j.jbusres.2021.09.031.
Ellinger, A. E., Naidoo, J., Ellinger, A. D., Filips, K., & Herrin, G. D. (2020). Applying Blue Ocean Strategy to Hire and Assimilate Workers with Disabilities into Distribution Centers. Business Horizons, 63(3), 339–350. https://doi.org/10.1016/j.bushor.2020.01.009.
Gayatri, E., & Muttaqiyathun, A. (2020). Pengaruh Job Insecurity, Beban Kerja, Kepuasan Kerja dan Komitmen Organisasi terhadap Turnover Intention Karyawan Milenial. Proceedings of the University Research Colloquium, 77–85. Retrieved from https://www.repository.urecol.org/index.php/proceeding/article/view/1014.
Guest, D. (2014). Employee engagement: A sceptical analysis. Journal of Organizational Effectiveness: People and Performance, 1(2), 141–156. https://doi.org/10.1108/JOEPP-04-2014-0017.
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook. Springer International Publishing. https://doi.org/10.1007/978-3-030-80519-7.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to Use and How to Report the Results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203.
Henseler, J., Dijkstra, T. K., Sarstedt, M., Ringle, C. M., Diamantopoulos, A., Straub, D. W., Ketchen, D. J., Hair, J. F., Hult, G. T. M., & Calantone, R. J. (2014). Common Beliefs and Reality About PLS: Comments on Rönkkö and Evermann (2013). Organizational Research Methods, 17(2), 182–209. https://doi.org/10.1177/1094428114526928.
Homans, G. C. (1958). Social Behavior as Exchange. American Journal of Sociology, 63(6), 597–606. JSTOR.
IDN Research Institute (2024). “Indonesia Gen Z Report”, IDN times (2024). Diakses pada tanggal 27 Mei 2024. https://cdn.idntimes.com/content-documents/indonesia-gen-z-report-2024.pdf.
Jian, O. Z., Yin, K. Y., & Awang, M. (2020). The Extent of Blue Ocean Leadership, Employee Engagement and Team Performance During Covid-19 Pandemic. International Journal of Academic Research in Business and Social Sciences, 10(11), Pages 926-937. https://doi.org/10.6007/IJARBSS/v10-i11/8150.
Kim, W. C., & Mauborgne, R. (2017). The W. Chan Kim and Renee Mauborgne Blue Ocean Strategy Reader. Harvard Business Review Press.
Kusnendi, & Ciptagustia, A. (2023). Analisis Model Pengukuran dan Struktural dalam Penelitian Manajemen Bisnis (Cet. 1). UPI Press.
Kwon, K., Jeong, S., Park, J., & Yoon, S. W. (2024). Employee Development and Employee Engagement: A Review and Integrated Model. Career Development International, 29(2), 169–184. https://doi.org/10.1108/CDI-04-2023-0117.
Lachowicz, M. J., Preacher, K. J., & Kelley, K. (2018). A Novel Measure of Effect Size for Mediation Analysis. Psychological Methods, 23(2), 244–261. https://doi.org/10.1037/met0000165.
Lila Maria Kaban & Umi Kulsum. (2023). Study on Compensation, Organizational Commitment, and Work Motivation for Employee Retention at a Local Hospital. Jurnal Multidisiplin Madani, 3(4), 857–870. https://doi.org/10.55927/mudima.v3i4.3852.
Ly, B. (2024). Inclusion Leadership and Employee Work Engagement: The Role of Organizational Commitment in Cambodian Public Organizations. Asia Pacific Management Review, 29(1), 44–52. https://doi.org/10.1016/j.apmrv.2023.06.003.
Meylianti S, B., & Mulia, F. (2009). Pengaruh Penerapan JIT (Just in Time) dan TQM (Total Quality Management) Terhadap Delivery Performance Pada Industri Otomotif Di Indonesia. Jurnal Manajemen Teori dan Terapan| Journal of Theory and Applied Management, 2(2). https://doi.org/10.20473/jmtt.v2i2.2379.
Shmueli, G., Sarstedt, M., Hair, J. F., Cheah, J.-H., Ting, H., Vaithilingam, S., & Ringle, C. M. (2019). Predictive Model Assessment in PLS-SEM: Guidelines for Using PLS-Predict. European Journal of Marketing, 53(11), 2322–2347. https://doi.org/10.1108/EJM-02-2019-0189.
Shoaib, S. M., Ali, N., & Raza, S. (2023). Impact of Organizational Culture and Compensation on Job Satisfaction and Employee Retention: A Case of Pharmaceutical Industry of Pakistan. GMJACS, 13(1), 78–94. https://doi.org/10.59263/gmjacs.13.01.2023.288.
Published
2025-06-09
How to Cite
Alfy, R., Janah Sojanah, Siregar, A. S., & Ade Sobandi. (2025). Advancing Employee Retention through Compensation: Mediating Roles of Blue Ocean Leadership and Work Engagement in Human Capital Value among Gen Z. Kontigensi : Jurnal Ilmiah Manajemen, 13(1), 278-293. https://doi.org/10.56457/jimk.v13i1.774
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