Transformational Leadership and Work Engagement Drive Gen Z Innovation in Yogyakarta Workplaces

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FORMOSA NEWS - Yogyakarta - A 2025 study by Saverius Antoni Mawar and Awan Santosa of the Management Study Program, Faculty of Economics, Universitas Mercu Buana Yogyakarta, Indonesia, finds that transformational leadership and employee work engagement significantly encourage innovative work behavior among Generation Z employees in the Special Region of Yogyakarta. Published in 2026 in the Formosa Journal of Multidisciplinary Research, the research highlights how leadership style and emotional connection to work influence innovation among young professionals in a rapidly evolving labor market. The findings matter because organizations increasingly rely on innovation from younger workers to stay competitive in the digital economy. 

Why the Research Matters

Innovation has become a defining factor for organizational survival. Businesses today face intense competition, technological change, and shifting consumer expectations. For regions like Yogyakarta—known as an education and creative industry hub—employee creativity plays a crucial role in economic growth and organizational performance.

Generation Z workers dominate the emerging workforce. They tend to value flexible work environments, meaningful tasks, and open communication. Understanding how to motivate this generation to innovate is therefore important not only for companies but also for policymakers and educators preparing future talent.

How the Study Was Conducted

The researchers used a quantitative survey approach to examine how three factors influence innovative work behavior:

• Transformational leadership
• Knowledge sharing
• Work engagement

Data were collected from 96 Generation Z employees working across various industries in Yogyakarta. Participants were selected based on age category, employment status, and minimum one year of work experience to ensure familiarity with workplace dynamics.

Responses were analyzed using multiple regression analysis, allowing the researchers to identify which factors significantly shape innovative work behavior such as generating ideas, promoting solutions, and implementing improvements.

Most respondents were young professionals aged 25–28, held undergraduate degrees, and had between two and three years of work experience—indicating a workforce segment already transitioning into stable career roles.

Key Findings

The study reveals three main conclusions:

1. Transformational leadership significantly boosts innovation

Employees working under leaders who inspire, communicate a clear vision, and provide personal support are more likely to propose new ideas and implement creative solutions. Leadership that encourages autonomy and intellectual stimulation helps employees feel confident to innovate.

2. Work engagement strongly influences innovative behavior

Employees who feel emotionally connected to their work show higher initiative, persistence, and willingness to experiment with new approaches. Engagement acts as a psychological driver of creativity.

3. Knowledge sharing shows no significant direct impact

Although employees reported frequent information exchange, this did not translate into measurable innovation outcomes. The researchers suggest that knowledge sharing in many workplaces may remain procedural or routine rather than strategically oriented toward idea generation.

Overall, the three variables explain nearly 60 percent of the variation in innovative work behavior, indicating that leadership style and engagement are among the strongest predictors of innovation among young employees.

Implications for Organizations and Society

The findings provide practical insights for business leaders, HR professionals, and policymakers.

For organizations:

Developing transformational leadership skills should be a priority. Leaders who communicate vision, provide recognition, and support employee growth help create a culture of innovation.

For human resource management:

Programs that strengthen work engagement—such as recognition systems, career development opportunities, and participatory decision-making—can significantly enhance employee creativity and performance.

For education and workforce policy:

Training programs should emphasize soft skills like leadership communication, teamwork, and emotional engagement, not only technical competencies. These skills prepare young professionals to contribute creatively in modern workplaces.

The research also suggests that organizations need to redesign knowledge-sharing systems. Informal discussions, digital collaboration platforms, and structured innovation forums may help transform information exchange into real innovation outcomes.

Academic Insight from the Authors

Saverius Antoni Mawar of Universitas Mercu Buana Yogyakarta explains that leadership plays a central role in shaping employee behavior. He notes that employees are more likely to innovate when they feel trusted and supported by leaders who encourage creativity.

Co-author Awan Santosa adds that work engagement functions as a psychological energy source. Employees who feel connected to their roles tend to show greater initiative, persistence, and openness to new ideas. Together, these factors create a workplace environment conducive to continuous innovation.

Author Profiles

Saverius Antoni Mawar

Lecturer and researcher at the Management Study Program, Faculty of Economics, Universitas Mercu Buana Yogyakarta. His research focuses on human resource management, organizational behavior, and leadership effectiveness.

Awan Santosa

Academic and researcher at Universitas Mercu Buana Yogyakarta specializing in leadership studies, organizational innovation, and employee performance management.

Source

The Influence of Transformational Leadership, Knowledge Sharing, and Work Engagement on Innovative Work Behavior Among Generation Z Employees in the Special Region of Yogyakarta.

Formosa Journal of Multidisciplinary Research, 2026.

DOI: https://doi.org/10.55927/fjmr.v5i2.7