The findings are particularly relevant as Generation Z becomes an increasingly dominant segment of the global workforce. Unlike previous generations, these young professionals evaluate employment based on more than salary. Recognition, career development opportunities, workplace flexibility, organizational support, and meaningful work experiences all influence whether they choose to stay with an employer.
Why Retaining Generation Z Has Become a Business Challenge
Employee retention has emerged as one of the most pressing human resource issues worldwide. High turnover among younger employees forces organizations to spend more on recruitment, onboarding, and training while disrupting productivity and organizational continuity.
According to the study, Generation Z employees tend to compare the value they contribute with the rewards they receive. They also pay close attention to fairness, opportunities for personal growth, organizational culture, and work-life balance. When these expectations are not met, they are more willing than previous generations to seek alternative employment.
The authors also reference a national survey conducted by the Career Center of Andalas University in collaboration with the Tanoto Foundation, which found that most Indonesian Generation Z students have high confidence in their professional abilities. This confidence encourages them to be more selective when evaluating employers and deciding whether to remain in a company.
Research Based on 150 Generation Z Employees
The research involved 150 Generation Z employees who had already entered the workforce. Participants were alumni of the Faculty of Administrative Sciences at Universitas Brawijaya and represented individuals born between 1997 and 2012.
Researchers collected data through online questionnaires and analyzed the responses using a statistical modeling approach designed to examine relationships between workplace factors. The study focused on three key variables:
- Reward systems provided by employers
- Employee job satisfaction
- Intention to stay, or employees' willingness to continue working for their current organization
Rather than measuring why employees want to leave, the study examined the positive factors that encourage them to remain, offering a more constructive perspective on employee retention.
Fair Rewards Increase Satisfaction and Loyalty
The results demonstrated that all proposed relationships were statistically significant.
The study found that:
- Rewards had a strong positive effect on job satisfaction (path coefficient: 0.693).
- Job satisfaction had a positive effect on employees' intention to stay (path coefficient: 0.548).
- Rewards also had a direct positive effect on intention to stay (path coefficient: 0.340).
These findings indicate that organizations can strengthen employee retention by implementing reward systems that employees perceive as fair, meaningful, and aligned with their expectations.
Importantly, the research defines rewards much more broadly than financial compensation alone. Besides salary and bonuses, rewards include recognition for achievements, opportunities for career advancement, professional development, workplace flexibility, supportive leadership, and positive organizational experiences.
Job Satisfaction Bridges Rewards and Retention
The study is grounded in Social Exchange Theory, which explains workplace relationships as reciprocal exchanges between employees and organizations.
When employees believe that an organization values their contributions through fair rewards and supportive treatment, they develop higher job satisfaction. That positive experience encourages them to reciprocate by remaining committed to the organization.
As Arik Prasetya and Anggito Abimanyu of Universitas Brawijaya explain through their findings, Generation Z employees do not evaluate rewards solely in financial terms. They also seek appreciation, opportunities for learning, career progression, work-life balance, and meaningful organizational support. These broader forms of recognition shape their willingness to stay with an employer over time.
The researchers argue that job satisfaction functions as the psychological mechanism connecting organizational rewards with long-term employee retention, extending previous applications of Social Exchange Theory to the unique expectations of Generation Z workers.
Practical Implications for Employers
The study offers several practical recommendations for organizations competing to attract and retain young professionals.
Companies should move beyond compensation-focused retention strategies and build comprehensive reward systems that recognize employees in multiple ways. Effective approaches include:
- Providing transparent and equitable reward policies.
- Recognizing employee achievements regularly.
- Offering clear career development opportunities.
- Supporting flexible working arrangements where appropriate.
- Creating an organizational culture that values employee contributions.
- Investing in meaningful professional growth and supportive leadership.
Organizations that understand these broader expectations are likely to improve employee satisfaction while reducing costly turnover among Generation Z workers.
Contribution to Human Resource Research
The research also contributes to academic understanding of employee retention. While many previous studies focused on turnover intention—employees' desire to leave—the present study emphasizes intention to stay, highlighting the positive organizational factors that encourage employees to remain.
The findings demonstrate that rewards influence retention both directly and indirectly through job satisfaction. This provides new evidence that retention among Generation Z depends not only on compensation but also on employees' perceptions of fairness, recognition, organizational support, and meaningful work experiences.
The authors acknowledge several limitations. The sample consisted of alumni from a single faculty at Universitas Brawijaya, which may limit the generalizability of the findings. Future research is encouraged to include larger and more diverse populations across industries while examining additional variables such as leadership style, organizational culture, employee engagement, career development, and work-life balance.
Author Profile
Arik Prasetya is a researcher from the Faculty of Administrative Sciences, Universitas Brawijaya, Malang, Indonesia, specializing in Human Resource Management, Organizational Behavior, and Business Administration.
Anggito Abimanyu is affiliated with the Department of Business Administration, Faculty of Administrative Sciences, Universitas Brawijaya, Malang, Indonesia. His academic interests include human resource management, employee satisfaction, organizational behavior, and employee retention strategies.
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