The Role of Retention in Employee Performance

Abstract

This study aims to analyze the influence of organizational culture, compensation, and job
satisfaction on employee performance with employee retention as an intervening variable at
PT Adhi Karya (Persero) Tbk. The research problem is based on the importance of improving
employee performance, which is influenced by various organizational and human resource
factors. The variables used in this study include organizational culture, compensation, job
satisfaction, employee retention, and employee performance. This study employed a
quantitative approach using a survey method. The research was conducted at PT Adhi Karya
(Persero) Tbk, located at Jalan MT Haryono Kav. 27 RT 007/01, Cawang, Kramat Jati, East
Jakarta. The study was carried out from May to July 2025. The population consisted of 50
employees. A saturated sampling technique was applied, in which all members of the
population were used as research samples. Data were analyzed using the Structural Equation
Modeling–Partial Least Squares (SEM-PLS) method with the assistance of SmartPLS
software. The results indicate that organizational culture does not have a significant effect on
employee performance but has a positive and significant effect on employee retention. Job
satisfaction has a positive and significant effect on both employee performance and employee
retention. Compensation does not have a significant effect on either employee performance or
employee retention. Employee retention has a positive and significant effect on employee
performance. The indirect effect analysis reveals that employee retention fully mediates the
relationship between organizational culture and employee performance and partially mediates
the relationship between job satisfaction and employee performance. However, employee
retention does not mediate the relationship between compensation and employee
performance. The findings conclude that employee retention plays a crucial role in improving
employee performance. Therefore, PT Adhi Karya (Persero) Tbk is recommended to
strengthen its organizational culture, enhance employee job satisfaction, and implement
effective employee retention strategies in order to optimize employee performance.