The Effect of Leadership and Organizational Climate on Turnover

Intention Mediated by Job Satisfaction

Nancy Natawijaya, PM Budi Haryono, Saparso and Hery Winoto

Master of Management Study Program, Faculty of Economics and Business, Krida Wacana Christian University,

Jakarta, Indonesia

Keywords: Leadership, Organizational Climate, Job Satisfaction, Turnover Intention, and 2018.

Abstarct: This research is a quantitative descriptive study that discusses leadership and organizational climonate

whether they affect turnover intention through job satisfaction. The purpose of this study was to analyze the

influence of leadership and organizational climate on turnover intention mediated by job satisfaction. The

research sample is 60 respondents who work for more than 1 year at a Head Office and Warehouse. Data

were collected through questionnaires distributed to selected respondents by purposive random sampling

method. Data analysis technique used is Structural Equation Model (SEM) with SmartPLS program version

3.2.7. Analytical methods use a measurement model (validity and reliability test), structural model (R-

Square), t test, and mediation effect test. Period of research is April 2

- 29

, 2018.

1 BACKGROUND

In the current era of technological development,

every company must have a comparative advantage

in order to compete both in the local and

international business world. It is important for the

organization or company to understand what causes

employees to have the intention to look for another

job as an alternative in a different place and choose

to leave the old workplace (turnover intention).

Turnover is defined as the proportion of the

number of members of the organization who are

voluntarily and non-voluntarily leaving the

organization within a certain period of time. This

is generally stated in one year. Turnover should

not be more than 10% per year (Ridlo, 2012).

Turnover volunteers are those who have a reason to

resign. Conversely, non-turnover volunteers must

resign because of decisions made by the company,

such as termination of employment. In general,

turnover volunteers are a measure used to compare

companies with one another.

High turnover rates in companies are often a

problem. Besides taking a lot of time to recruit new

employees, the costs incurred to attract candidates to

apply are not small. The entry and exit of employees

in a company cannot be avoided because it is a

natural thing; even a profitable company goes

through this because the company can get better

employees. The company will be harmed if

employee turnover occurs too often or large in

number.

The following is a table that shows Turnover

Data (TO) 2012 - 2017.

Table 1: Data of Employee Turnover (TO) 2012 – 2017.

Year

Employees

Early in the

Yea

In Out

Employees

End in the

Yea

(%)

2012 64 31 14 81 19.3

2013 81 18 22 77 27.8

2014 77 18 11 84 13.66

2015 84 7 8 83 9.58

2016 83 2 14 71 18.18

2017 71 6 8 69 11.43

Source: PT Spektrum Krisindo Elektrika (2018)

Based on the above table, the average turnover

rate of PT Spektrum Krisindo Elektrika employees is

over 10% each year, meaning that it is very high.

Turnover intention is influenced by leadership. If

the leadership of a company is good, then the

turnover rate is low. Reduced job satisfaction on

leadership in the company where you work, can

bring up even increase employee turnover intention.

At PT Spektrum Krisindo Elektrika, in 2014 there

Natawijaya, N., Haryono, P., Saparso, . and Winoto, H.

The Effect of Leadership and Organizational Climate on Turnover Intention Mediated by Job Satisfaction.

DOI: 10.5220/0008492002890295

In Proceedings of the 7th International Conference on Entrepreneurship and Business Management (ICEBM Untar 2018), pages 289-295

ISBN: 978-989-758-363-6

289

were additional Directors (Project Directors) who

helped develop Project Division. This affects the

turnover intention of employees of PT Spektrum

Krisindo Elektrika. It can be seen from the high

turnover fluctuations from 2013 to 2014.

Turnover intention is also influenced by the

organizational climate. If the organizational climate

of a company is good, then the turnover rate is low.

At PT Spektrum Krisindo Elektrika, in 2012 there

were new additional divisions (Product Support,

Project, and several adjustments on other divisions),

so the number of recruits that year was the highest

compared to the following years. This is also a new

thing for leaders and employees who have been

there before. In 2013 the number of employees who

came out was more than those who entered, because

adapting to the project work system and many new

products was not easy. These difficulties affect the

work atmosphere that creates the organizational

climate, which in turn affects turnover intention.

The more dissatisfied someone is about his/her

job, the stronger the urge to turnover. Conversely,

the more satisfied someone is towards his/her job,

the weaker the urge to turnover (Ritonga et al.,

2013).

Job satisfaction mediates the influence of leadership

and organizational climate on turnover intention. If

employee job satisfaction is achieved with

leadership and a good organizational climate, then

the turnover intention will certainly be lower. At PT

Spektrum Krisindo Elektrika, macro and micro

economic conditions make the leader need to

implement several policies that certainly affect the

job satisfaction of several employees. But

organizational climate is formed quite well, because

good communication is established between

employees.

2 RESEARCH PROBLEM

1. Does Leadership affect Job Satisfaction?

2. Does the Organizational Climate affect Job

Satisfaction?

3. Does Leadership affect Turnover Intention?

4. Does the Organizational Climate affect Turnover

Intention?

5. Does Job Satisfaction affect Turnover Intention?

6. Does Job Satisfaction mediate the influence of

Leadership on Turnover Intention?

7. Does Job Satisfaction mediate the influence of

the Organizational Climate on Turnover

Intention?

3 LITERATURE REVIEW

3.1 Leadership

According to Northouse (2015),

"Leadership is a process whereby an individual

influences a group of individuals to achieve a

common goal".

Which means leadership is the process by which a

person influences a group of individuals to achieve a

common goal.

Another definition states

Leadership is the ability to influence a group

toward the achievement of vision or set of goals."

(Robbins and Judge, 2011). Leadership is the

ability to influence a group towards achieving a

vision or set of goals.

The definition of leadership is influence, art, or the

process of influencing someone so that they will try to

achieve the group's goals with willingness and

enthusiasm (Saidi, 2008).

Leaders have four paradigms in looking at and

handling organizations, subordinates, and the world.

These four paradigms are analytical, humanist,

political, and visionary. In addition, there are two

dimensions of leader behavior, namely employee

centered and job centered.

3.2 Organizational Climate

Robbins and Judge (2011) argue that

“The psychological climate is strongly related to the

level of job satisfaction, involvement, commitment,

and individual motivation. A positive work climate

will have an impact on higher customer satisfaction

and good financial performance. Organizational

climate refers to the shared perceptions organizational

members have about their organization and work

environment. This aspect of culture is like team spirit

at the organizational level. … One meta-analysis

found that across dozens of different samples,

psychological climate was strongly related to

individuals’ level of job satisfaction, involvement,

commitment, and motivation. A positive overall

workplace climate has been linked to higher customer

satisfaction and financial performance as well.”

According to Swastha (2008),

"Organizational climate is the quality of the

interaction process in an organization to achieve

the stated goals so that employees will make

assessments about the company and form their

own perceptions about the climate of the

organization in which they work. If employees

perceive that the company applies a regulation that

does not conform to their value, then this condition

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can lead to job dissatisfaction. Conversely, if

employees perceive that the company applies

regulations that are in line with their values, then

job satisfaction will be created. "

Organizational climate which is also called

organizational atmosphere is a series of work

environments around the workplace that affect the

behavior of a person in carrying out work that

ultimately makes the goals of organization be

quickly achieved (Cahyono, 2014).

Organizational climate is the quality of the

organization's internal environment that is

relatively continuously experienced by members of

the organization, influencing their behavior (Putra

et al, 2014). Organizational climate is a

characteristic that distinguishes one organization

from another which can influence employees so

that they are willing to work willingly without

being forced (Kusmaningtyas, 2013).

3.3 Job Satisfaction

Ridlo (2012) stated that employees who perform

turnover, generally found a reason because they

feel dissatisfied with the company's management,

the quality and nature of the working conditions,

the amount of wages, the feeling of being treated

unfairly by the company and the quality of

inadequate supervision.

Job satisfaction is influenced by a lot of variables,

such as: organizational structure, employee

characteristics, work motivation, work design,

organizational climate, leader behavior or

leadership (Irsan, 2008).

Based on Ahmad etc. (2013),

“Several factors contribute to job satisfaction,

including wages, benefits, achievements,

independence, recognition, communication,

working conditions, work colleagues,

professionalism, organizational climate,

relationships, support from superiors, job security,

work flexibility, and team environment.”

According to Handoko (2011),

“Job satisfaction is a pleasant or unpleasant

emotional state by which employees view their

work. Job satisfaction reflects a person's feelings

about his work. This appears in the positive

attitude of employees towards work and everything

faced in the work environment. The personnel

department or management must always monitor

job satisfaction, spirit at work, complaints, and

other vital personnel issues.”

Job satisfaction can be indicated through the comfort

of work with the support of colleagues, a good

compensation system based on job suitability,

quality of supervision and promotion opportunities.

3.4 Turnover Intention

Based on Dessler (2013), “turnover is the rate at which

employees leave the firm.”

According to Abdillah (2012),

“Turnover intention is a situation where

employees have intentions that are done

consciously to look for another job as an

alternative in a different organization and turnover

is the movement out of workers from the place of

work”

“Turnover intention is also defined as a factor that

mediates the desire and action of stop from the

organization itself” (Glissmeyer et al., 2008).

From some definitions of turnover, in summary,

the definition of turnover is the cessation of

individuals from membership in an organization

within a certain period of time which is not more

than 10% per year (Ridlo, 2012).

3.5 Research Hypothesis

The hypotheses proposed in this study are:

H1: Leadership affects Job Satisfaction.

H2: Organizational Climate affects Job

Satisfaction.

H3: Leadership affects Turnover Intention

H4: Organizational Climate affects Turnover

Intention.

H5: Job Satisfaction affects Turnover Intention.

H6: Job Satisfaction mediates the effect of

Leadership on Turnover Intention.

H7: Job Satisfaction mediates the effect of

Organizational Climate on Turnover Intention.

Figure 1: Construction of Research Path Diagrams, 2018.

4 RESEARCH METHODS

4.1 Conceptual Framework

Based on the background of the problem, literature

The Effect of Leadership and Organizational Climate on Turnover Intention Mediated by Job Satisfaction

291

review and previous research that has been

described, the conceptual framework in this study

can be seen in the following figure:

Figure 2: Conceptual Framework.

4.2 Data Collection Technique

Collecting data from the total population in this

study uses primary data sources (Interviews and

Questionnaires) and secondary data sources

(Literature Study). Primary data sources are data

sources that directly provide data to data collectors,

and secondary data sources are sources that do not

directly provide data to data collectors, for example:

through other people or documents.

4.3 Data Analysis Technique

Data analysis techniques in quantitative research

use statistics. This study uses descriptive statistics,

namely statistics used to analyze data by

describing or describing data that has been

collected as it is without intending to make

conclusions that apply to the general or

generalization (Sugiyono, 2016).

The quantitative analysis technique used is the SEM

(Structure Equational Modeling) analysis technique.

The data obtained will be processed statistically

using SmartPLS software (v.3.2.7), as a tool for

processing statistical data professionally and

computerized.

5 RESULTS AND CONCLUSION

After doing research on influence of Leadership

variables and Organizational Climate on Turnover

Intention mediated by Job Satisfaction, we have

found the following results and conclusions.

Leadership has a significant positive effect on

job satisfaction. This means that if leadership

improves, then job satisfaction will improve.

Organizational climate has a significant positive

effect on job satisfaction. This means that if the

organizational climate improves, job satisfaction

also improves.

Figure 3: Output of SmartPLS (v.3.2.7), 2018.

Leadership does not significantly affect turnover

intention. This means that there is not enough

evidence that leadership has a negative effect on

turnover intention.

Organizational climate has a significant positive

effect on turnover intention. This means that the

better the existing organizational climate, the

turnover intention will also be better.

Job satisfaction significantly negatively affects

turnover intention. This means the higher the level

of job satisfaction, the smaller the effect on turnover

intention.

Job Satisfaction does not significantly mediate

the negative effect of Leadership on Turnover

Intention. This means that there is not enough

evidence that the variable of job satisfaction

significantly mediates the negative influence of

leadership on turnover intention. The higher the

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292

level of satisfaction on leadership leads to the

smaller the effect on turnover intention.

Job Satisfaction significantly mediates the

negative effect of the Organizational Climate on

Turnover Intention. This means that the higher

satisfaction of the organizational climate in the

company, the smaller the effect on turnover

intention.

6 RECOMMENDATION

Leadership has a significant positive effect on job

satisfaction and does not significantly negatively

affect turnover intention. It is recommended that

leaders continue to learn. The way of

communicating to employees needs to be adjusted to

the conditions and background of each, because it

cannot be generalized.

Organizational climate has a significant positive

effect on job satisfaction and turnover intention. It is

recommended for organizational climate to be

maintained and even developed to be even better.

Job satisfaction significantly affects turnover

intention, does not significantly mediate the negative

effect of Leadership on Turnover Intention, and

significantly mediates the negative effect of the

Organizational Climate on Turnover Intention. The

role of Leadership in mediating influence is not yet

visible. It is recommended to pay more attention to

or improve the above indicators so that job

satisfaction can be created.

Turnover Intention will decrease if Job

Satisfaction is achieved. To make employees more

satisfied, the insight of leaders and all employees

needs to be improved and knowledge added

continuously.

The purpose of this study was to analyze the

influence of leadership and organizational climate

towards turnover intention mediated by job

satisfaction.

6.1 For Company

The implication of this study is to become an

inspiration for companies for implementing

leadership and the right organizational climate. This

is done order to prevent the increase of turnover

intention in number and frequency.

All of this is for job and employee satisfaction so

that the company can survive and progress.

Employees should feel fit to work there and the

result is the reduction of labor turnover /

management turnover, which will also create

conducive organizational climate.

6.2 For Further Research

Likewise, in subsequent studies, it is recommended

to add new and distinct indicators and find other

mediating variables that affect turnover intention,

because the R-square in this study is only 14.3%,

which means that 85.7% consists of factors not

included in this study, such as motivation.

It is expected that testing of the influence of

leadership factors, organizational climate, job

satisfaction, or others on turnover intention will be

more reliable and significant. In addition, it is also

expected to enrich the model or conceptual

framework of subsequent research.

To increase the likelihood of getting more

accurate results, it is recommended to conduct

research on larger companies.

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