ISSN 2303-1174 C.F.Tambajong.,D.P.E.Saerang.,M.H.Ch.Pandowo.

,Determinants of…
DETERMINANTS OF EMPLOYEE RETENTION AT SINTESA PENINSULA HOTEL
MANADO
FAKTOR-FAKTOR PENENTU DARI RETENSI KARYAWAN DI HOTEL SINTESA PENINSULA
MANADO

by
Clinton Franklin Tambajong1
David P. E. Saerang2
Merinda H. Ch. Pandowo3
123
Faculty of Economics and Business,International Business Administration,Management Program
Sam Ratulangi University Manado

E-mail :
1
[email protected]
2
[email protected]
3
[email protected]

Abstract : In every company there will always be employees who run the company, therefore companies are trying to
retain employees to stay in a longer period of time. The aim of this research is to identify the determinants of employee
retention at Sintesa Peninsula Hotel Manado. This research is quantitative type of research which uses primary data
obtained through questionnaire and uses Confirmatory Factor Analysis (CFA) as the analytical tool. The population of this
research are 145 employees where the sample size is taken from 100 employees. There are 20 variables that defined as
factors that influence employee retention at Sintesa Peninsula Hotel Manado. The analysis and discussion from this
research there are 16 variables that correlated with the factor that already conducted. The findings from the factor analysis
process there are 4 factors that influence employee retention at Sintesa Peninsula Hotel Manado. First factor is Employee
Performance with seven independent variables. Second factor is Employee Engagement with three independent variables.
Third Factor is Employee Productivity with four independent variables. And fourth factor is Motivation with two
independent variables. The result shows that Sintesa Peninsula Hotel Manado needs to maintain and improve those four
important factors to reach employee retention.

Keywords : employee retention, confirmatory factor analysis.

Abstrak : Di setiap perusahaan akan selalu ada karyawan yang menjalankan perusahaan tersebut, oleh karena itu
perusahaan berusaha untuk mempertahankan karyawan agar tinggal dalam waktu yang lebih lama. Tujuan dari penelitian
ini adalah untuk mengidentifikasi faktor-faktor penentu retensi karyawan di Hotel Sintesa Peninsula Manado. Penelitian
ini merupakan tipe penelitian kuantitatif dengan menggunakan data primer yang dikumpulkan melalui kuesioner dan
menggunakan Konfirmatori Faktor Analisis (KFA) sebagai alat analisis. Populasi dari penelitian ini merupakan 145
karyawan dimana jumlah sampel yang diambil dari 100 karyawan. Di dalam penlitian ini, terdapat 20 variabel yang
didefinisikan sebagai faktor-faktor penentu retensi karyawan di Hotel Sintesa Peninsula Hotel Manado. Analisis dan
diskusi dari penelitian ini menunjukan terdapat 16 variabel yang berkorelasi dengan faktor yang dilakukan. Temuan
penelitian dari proses faktorisasi , ada 4 faktor yang mempengaruhi retensi karyawan di Hotel Sintesa Peninsula
Manado. Faktor pertama adalah Performa Karyawan dengan 7 varibel independen. Faktor kedua adalah Ketertarikan
Karyawan dengan 3 variabel independen. Faktor ketiga adalah Produktivitas Karyawan dengan 4 variabel independen.
Faktor keempat adalah Motivasi dengan 2 variable independen. Hasil ini menunjukkan bahwa Hotel Sintesa Peninsula
Hotel Manado perlu mempertahankan dan meningkatkan keempat faktor penting tersebut untuk mencapai retensi
karyawan

Kata Kunci : retensi pegawai, konfirmatori faktor analisis

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INTRODUCTION

Research Background
Human resources (HR) is a part of company, although the role of human resources department is not
only limited to manage who is going to fill particular role or position in the organization chart, this role is
imperative for the company if the company is willing to put the right person in the right place for the sake of
human capital efficiency and operational successfulness. However, the hard part is not only when company
would like to hire employees but how the company keeps their employees. Sintesa Peninsula Hotel Manado has
a lot number of employees and has several programs for employee in order to retain them to stay. But, sadly the
turnover rate in Sintesa Peninsula Hotel is quite high in 14% in 2016. Because of its high employee turnover in
Sintesa Peninsula Hotel Manado it is interesting to see how Sintesa Peninsula Hotel Manado treat their
employees and the determinants to make employees work longer with the company.

Research Objective
The objective that be achieved by this research: To identify the determinants of employee retention at Sintesa
Peninsula Hotel Manado.
THEORETICAL REVIEW
Human Resources Management
Human resource management is a series of integrated decisions that for employee relationship; their
quality directly contributes to the ability of organization and the employees to achieve their objectives
(Milkovich and Boudreau, 1998). Armstrong (2006:251-269), defined Human Resource Management as the
strategic and comprehensive process for the organizations to value assets like people discharging responsibilities
individually or collectively for achieving the objectives of the organization.

Employee Retention
Employee retention refers to the ability of an organization to retain its employees. It relates to the
efforts by which employers attempt to retain employees in their workforce. In this sense, retention becomes the
strategies rather than the outcome. The success of the most competitive companies throughout the world,
including education institutions, lies in their highly skilled employees on which these institutions spend millions
to retain (Branham, 2005).
The literature meaning of word “reward” as it is something that offered by the organization to the
workers in response of their performance and contributions which are expected by the workers (Agarwal, 1998:
60-70). Work life balance is the concept when employee can balance their work and lifestyle. According to
Scholarios and Marks (2004) work-life balance is important role in shaping the employee’s attitude for their
organization and also their life. In short, training help to lower turnover rate and considered as important factor
in employee retention (Wetland, 2003). Storey and Sisson (1993), recommend that training is sign of
organization commitment to employees. According to Gomez, Balkin and Cardy, (1995), development provides
the skills and abilities to employee which will be needed by the organization in future. Truelove (1992) further
defines development as a path whereby an individual learns from occurrence will be more valuable.
Compensation is total cash and non-cash payments given by organization to an employee in exchange for the
work they do. According to Walker (2001), compensation offer recognition, but non-monetary forms of
recognition are also not ignored and important.
Opperman (2002), defined work environment as composition of three major sub-environments which
include the technical environment, the human environment and the organizational environment. Job satisfaction
has occupied not only the social science, but also gained important for companies. Locke (1976) stated job
satisfaction is actually an enjoyable and exciting emotional condition which someone got in their work.
Employee satisfaction derives employee retention in service profit chain (Heskett and Schlesinger, 1994). Job
embeddedness is the collection of forces that influence employee retention. It can be distinguished from
turnover in that is emphasize is on all of the factors that keep an employee on the job. Job embeddedness is a
comparatively new variable to identify retention which includes three factors links, fit and sacrifice (Zhang,
Fried and Griffeth, 2012). The values guide the perspective of the organization as well as its action.
Organizational values and beliefs is one of the non-monetary developing elements in influencing employee
retention (Singh, 2013). According to Eisenberger, Fasolo and Davis, (1990), the sense of ownership in the

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organization that the company is giving importance their views and giving them importance is collectively
called as organizational support and the existence of that also increase the employee performance.

Organizational commitment was defined as the relative strength of an individual’s identification with
and involvement in a particular organization (Mowday, Steers and Porters, 1979). Heery and Noon (2001)
define promotion getting high status in workplace by doing effective work; generally increase the status,
position and remuneration of employee in the organization. The importance of employment flexibility such as
scheduling variations that better accommodate individual work times, workloads, responsibilities, and locations
around family responsibilities (Cunningham, 2002; Pleffer, 2007). Performance appraisal is a systematic general
and periodic process that assesses an individual employee’s job performance and productivity in relation to
certain pre-established criteria and organization objectives. Performance appraisal is a formal system used by
the organization to periodically evaluate an employee’s performance (Mondy and Noe, 2005). Job security was
defined by Davy, Kinicki and Scheck, (1997) as employee’s assumptions about continuity in a specific job.
Organizational justice refers to employee perceptions of fairness in the workplace. Organizational
justice means the just and ethical employee treatment within the organization (Cropanzano, 1993). Providing
skill recognition of personal job accomplishments is an effective retention strategy for employees at any age
(Yazinski, 2009). Individual skill recognition is restricted by age, and motivates positive behavior, ethics,
teamwork, confidence, and growth in all employees (Redington, 2007). Learning and development opportunities
appear crucial for the retention of talented employees (Arnold, 2005; Hytter, 2007; Walker, 2001), an
organization must establish a supportive learning and working climate. The concept “learning and working
climate” is derived from previous research. In general, it refers to the environment wherein employees both
learn and work. More specifically, the concept could be described by referring to: guidance and appreciation at
work; pressure of work; the amount of empowerment and the responsibility that employees experience; choice
in job tasks and development; provision of challenging and meaningful work; and advancement and
development opportunities (Abrams, 2008). According to Ontario (2004), leaders interact as a bond to perform
application between expectations and stated goals. By harmonizing the rivalling demands supervisor support
and manage the inside/outside work environment. If the relationship among workers and supervisor is
exceeding/strong the worker will never seek to any other new employment opportunity but stay in the
organization and vice versa. Employees leave the leaders not jobs so leader support is also essential in this
regard. Kanungo (1982) describe job involvement as a cognitive state of uni-dimensional psychological
identification from a motivational approach.

Previous Research
Nausheen Shakeel (2015) discuss about Factors Influencing Employee Retention: An Integrated
Perspective. This research uses qualitative method. The result of this research is Financial factors are positively
related to employee retention, all extrinsic work-related factors, intrinsic work-related factors are positively
related to employee retention. Chandranshu Sinha (2012) focused on Factors Affecting Employee Retention: A
Comparative Analysis of two Organizations from Heavy Engineering Industry. The result of this research is, for
EEPL, the first factor was called “competence and relationship oriented”, the second one was “scholastic and
futuristic oriented” and the third one was “developmental and reward oriented”. While for MBPL, the first
factor was called “relationship oriented”, the second one was “competence and scholastic oriented” and the third
one was “reward oriented”. The confirmatory factor analysis for both the organization, too, indicated that the
structural model of these factors was proper. The findings of this research proved that the components identified
and the structural relations presented as regards the component, “retention management strategies at EEPL and
MBPL” were suitable. Bidyut Bijoya Neog and Dr. Mukulesh Barua (2015) discuss about Factors Affecting
Employee’s Retention in Automobile Service Workshops of Assam: An Empirical Study. The result revealed
that Job Security is the most important factor for employee’s retention in their present job. The result of this
study shows that the retention level of employees is above average and it is the high time for the management
attention towards enhancing the employee’s retention level. Mutiria et al., (2015) focused on Factors
Influencing Employee Retention at Meru University of Science and Technology. The result of this research
Performance ratings were not done fairly and that staff did not undertake professional training however they
attended mentorship program which was a major contributor to their retention. Gharib et al., (2017) focused on
Factors Affecting Staff Retention Strategies Used in Private Syrian Companies during the Crisis. The results

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show that training and professional development have no significant impact on staff retention, while other
variables (rewards system, job security and job satisfaction) have statistically significant effect on staff
retention, analysis showed that job satisfaction has more effect than rewards system and job security on staff
retention.

Conceptual Framework
From this Conceptual Framework, this study aims to find out the factors that influence employee
engagement. There are 20 variables in this research.

Figure 1. Conceptual Framework

Source: Empirical Review (2017)

RESEARCH METHOD
Type of research
This research uses quantitative method to collect the data. According to Kerlinger and Lee (2000)
quantitative research is deductive in nature, and that researchers make inferences based on direct observations
with the primary goal to describe cause and effect. This research in field of human resources will analyze the
Determinant of Employee Retention at Sintesa Peninsula Hotel Manado.

Place and Time of Research.

This research will be conducted in Sintesa Peninsula Hotel Manado with the period for about two months
started from November to December 2017.

Population and Sample

The population of this research is 145 employees at Sintesa Peninsula Hotel Manado. Sekaran (2005)
defined sample as a subset of the population that comprises some members selected from it. The sample of this
research is 100 employees at Sintesa Peninsula Hotel Manado.

Data Analysis Method

Validity and Reliability Test

Validity test is used to measure the legitimacy of a questionnaire. Reliability test is a tool that can be
used to measure a questionnaire which is the indicators of the variables.

Confirmatory factor analysis

Confirmatory factor analysis (CFA), is where the researchers can specify the number of factors required
in the data and which measured variable is related to which latent variable. Confirmatory factor analysis (CFA)
is a tool that is used to confirm or reject the measurement theory.

RESULT AND DISCUSSION

Factor Analysis

Validity and reliability

If the value of Person Correlation > 0.5 it means the statement is valid. If the value of Person
Correlation <0.5 it means the statement is not valid. And if significant value <0.05 then the statement is

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correlated but if significant value > 0.05 then the statement is not correlated. All statements of the variable are
Valid, based on Pearson Correlation Value > 0.5 and the significant is < 0.05. We can conclude that all the
statement are Valid and can be used for further test and analysis
The interpretation of Cronbach’s Alpha is: <0.6 indicates unsatisfactory internal consistency or consider
that the data is unreliable. 0.7 indicates that the data is acceptable. 0.8 indicates good internal consistency or
consider that the data resulted is reliable
Reliability Test result X1 – X20
Cronbach's Alpha : .946
Cronbach's Alpha Based on Standardized Items : .946
N of Items : 60
It shows that the 20 variables in this research have Cronbach's Alpha value 0.946, and the N of Items 60
that explain how many question in this test. It is reliable because the value above the acceptance limit of 0,6. So
it clearly states that the 20 variables are reliable and can be accepted for further test and analysis.

Factor Analysis
There are 4 steps for doing factors analysis, (1) data collection method and generate of the correlation
matrix, (2) extraction or initial factor solution, (3) rotation and interpretation, and(4) construction of scales or
factor scores to use in further analysis. There are 20 variables with 60 indicators, for the factor analysis in this
research.
Table 1. KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.826
Bartlett's Test of Approx. Chi-Square 1206.083
Sphericity
Df 190
Sig. 0
Source: SPSS Output (2017)

The value of KMO is 0.826, show that the value is greater than 0.5 which indicates that the sample is
adequate. The result of calculation with SPSS resulted Barlett Test of Spehricity value of 1206.083 with
significance of 0.000. Thus Bartlett Test of Spehricity meets the requirements because of significance below
0.05 (5%). With the results above, it can be said that the variables and samples are allow for further analysis.
Table 2. Measures of Sampling Adequancy
Variable Initial
Rewards (X1) .743a
Work-Life Balance (X2) .760a
Training (X3) .758a
Development (X4) .865a
Compensation (X5) .802a
Working Environment (X6) .820a
Job Satisfaction (X7) .755a
Job Embeddedness (X8) .846a
Organizational Values (X9) .817a
Organizational Support (X10) .892a
Organizational Commitment (X11) .839a
Promotion (X12) .897a
Job Flexibility (X13) .729a
Performance Appraisal (X14) .872a
Job Security (X15) .821a
Organizational Justice (X16) .854a
Skill Recognition (X17) .891a
Learning and Working Climate (X18) .837a
Supervisor Support (X19) .673a

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Job Involvement (X20) .881a
Source: SPSS Output (2017)

Table 2 showed that all the data that has been processed, the output from IBM SPSS Statistic are all the
variables value is more than 0.5. Therefore all 20 variables are correlated to process for the further test and
analysis.
Table 3. Communalities (Principal Component Analysis)
Variable Initial Extraction
Rewards (X1) 1.000 .710
Work-Life Balance (X2) 1.000 .480
Training (X3) 1.000 .736
Development (X4) 1.000 .532
Compensation (X5) 1.000 .579
Working Environment (X6) 1.000 .643
Job Satisfaction (X7) 1.000 .789
Job Embeddedness (X8) 1.000 .611
Organizational Values (X9) 1.000 .787
Organizational Support (X10) 1.000 .569
Organizational Commitment (X11) 1.000 .607
Promotion (X12) 1.000 .678
Job Flexibility (X13) 1.000 .626
Performance Appraisal (X14) 1.000 .370
Job Security (X15) 1.000 .743
Organizational Justice (X16) 1.000 .659
Skill Recognition (X17) 1.000 .666
Learning and Working Climate (X18) 1.000 .753
Supervisor Support (X19) 1.000 .713
Job Involvement (X20) 1.000 .636
Source: SPSS Output (2017)

Table 3 explain about how much of the variance in each original variable can be explained by factors
that are extracted. The variance at variable 1 is 0.710, it means that 71% variance from variable 1 can explained
by factors to be formed. Variable 2 is 0.480 it means 48% variance of variable 2 can be explained by factors that
be formed. And so on until variable 20. Based on table 5.6, there are 18 variables of 20 has extraction value
greater than 0.5. There are three variables have extraction value below 0.5 which are: Work Life Balance
(0.480) and Performance Appraisal (0.370). So, both variables that mention before are eliminated for futher tests
and analysis.
In this total variant explained the eigenvalue have more than 1, used to determine the amount of factors
for analysis or further. If the eigenvalue is less than 1, the data is not significant. There are 18 variables that
formed into 4 components. The first factor which formed will explain 45.197% variation of data, the second
factor is 9.133% variation of data, the third factor 7.106%, and the fourth factor or as the last factor 6.607%
variation of data.

Table 4. Component Matrixa

Component 1 Component 2 Component 3 Component 4

Reward (X1) .414 .555 .500 .089

Training (X3) .590 .273 .559 .073
Development (X4) .710 .008 .164 .091
Compensation (X5) .647 .168 -.370 -.028
Working Environment (X6) .665 .377 -.287 -.086
Job Satisfaction (X7) .681 -.289 -.070 .484
Job Embeddedness (X8) .700 -.167 .046 .344
Organizational Values (X9) .690 .537 -.174 .007

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Organizational Support (X10) .735 -.108 -.047 .054
Organizational Commitment (X11) .769 .146 -.034 .062
Promotion (X12) .793 .013 -.230 -.180
Job Flexibility (X13) .483 -.444 .296 -.417
Job Security (X15) .721 .126 .241 -.368
Organizational Justice (X16) .714 .007 -.305 .260
Skill Recognition (X17) .750 -.166 -.201 -.191
Learning and Working Climate (X18) .647 -.442 -.068 -.352
Supervisor Support (X19) .545 -.459 .265 .420
Source: SPSS Output (2017) Extraction Method: Principal Component Analysis.

Based on table 4 of component matrix table, it can determined how big the correlation of each variable
with the factor that has been formed. From this data result all the variables have a value of loading more than
0.5, which means there are no variables that eliminated yet. Therefore it is necessary to rotate factors to clarify
the position of these variables.
Table 5. Rotated Component Matrix a
Component 1 Component 2 Component 3 Component 4

Reward (X1) .183 .050 -.036 .837

Training (X3) .135 .262 .216 .779
Development (X4) .343 .426 .313 .377
Compensation (X5) .720 .190 .169 .046
Working Environment (X6) .775 .065 .127 .230
Job Satisfaction (X7) .313 .818 .133 .044
Job Embeddedness (X8) .316 .678 .200 .199
Organizational Values (X9) .783 .079 .019 .419
Organizational Support (X10) .444 .449 .364 .161
Organizational Commitment (X11) .568 .353 .248 .329
Promotion (X12) .667 .235 .450 .104
Job Flexibility (X13) -.044 .167 .806 .111
Job Security (X15) .387 .048 .587 .482
Organizational Justice (X16) .629 .513 .101 .039
Skill Recognition (X17) .544 .292 .535 .007
Learning and Working Climate (X18) .285 .265 .763 -.097
Supervisor Support (X19) -.055 .812 .268 .143
Source: SPSS Output (2017)

Table 5 showed that for variable X4, X10 the loading value is < 0.5 it means that the variable is
eliminated for the next research and analysis. Based on the Rotated Component Matrix, variable 5, 6, 9, 11, 12,
16 17 is included in factor 1, because the highest loading values of the variables in factor 1. For the variable 7,
8, 19, are included in factor 2 because the highest loading value of the variables in factor 2. Variables 13, 15, 18,
20 are included in factor 3 because the highest loading value of the variables in factor 3, and for variable 1 and 3
are included in factor 4 because the highest loading value of the variables in factor 4.

Result of Regression Analysis

This research attempted to answer research question what are the factors that influence employee retention.
Table 6. New Variables / Factors
New Variables Independent Variable
Compensation, Working Environment, Organizational Values,
First Factor Employee Performance Organizational Commitment, Promotion, Organizational
Justice, and Skill Recognition
Second Factor Employee Engagement Job Satisfaction, Job Embeddedness, and Supervisor Support
Job Flexibility, Job Security, Learning and Working Climate,
Third Factor Employee Productivity
and Job Involvement
Fourth Factor Motivation Rewards and Training
Source: Data Processed (2017)

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Discussion
This research conducted in Manado and distributed to 100 employees at Sintesa Peninsula Hotel
Manado. The sampling technique that was used for this research was simple random sampling. Rotation
Component Matrix results there are 2 variables, which are Development (X4) and Organizational Support (X10)
that eliminated from the test and 16 variables that have value above 0.5 which mean they correlated to a factor
that finally conducted. Based on the result of the output from the 16 variables there are 4 factors that finally
conducted. It caused by the eigen values above 1 have 4 components in Principal Component Analysis.

CONCLUSION AND RECOMMENDATION

Conclusion
After the examination process of findings and discussion of results, there are 4 factors that influence
employee retention at Sintesa Peninsula Hotel Manado.
1. Employee Performance, the dependent variable employee performance is the first factor that influence
employee retention at Sintesa Peninsula Hotel Manado, and for the independent variable are: compensation,
working environment, organizational values, organizational commitment, promotion, organizational justice,
and skill recognition.
2. Employee Engagement, the second factor that influences employee retention at Sintesa Peninsula Hotel
Manado is employee engagement as the dependent variable and for the independent variables are job
satisfaction, job embeddedness, and supervisor support.
3. Employee Productivity,the third factor that influence employee retention at Sintesa Peninsula Hotel Manado
is employee productivity as dependent variable and job flexibility, job security, learning and working
climate, and job involvement as independent variables.
4. Motivation, motivation is dependent variable that influenced employee retention at Sintesa Peninsula Hotel
Manado while Reward and Training are the independent variables.

Recommendation
The researcher provided recommendations that can be concluded from the overall result of this research
in hope that these inputs will be beneficial to the company. The recommendations are listed as follow. Reward,
the hotel should start monthly performance review and start to reward them in an activity like Employee of the
Month and give them reward like to experience competitor’s service so they can apply what is best to the
operational of company. Training, provide modern training style to the employees to boost up their willingness
to participate and start to make training review for both trainees and trainer to finally achieve organizational
goals. Compensation, company should once again review the compensation rate of the hotel and started to
adjust and apply annual salary increment not only based on legal obligation but also performance of the
employees. Working environment, create a clean and comfortable locker room, put healthy food in employees’
dining room, and encourage them to build up creativity inside the hotel where they are working. Job
Satisfaction, credit the employees for any achievement and let them have broader job responsibility after they
have satisfied with their previous task. Job Embeddedness, Job embeddedness’ dimensions are fit, links, and
sacrifice. In this case company should make employee fit to their job, employee should be able to have link to
others and their surroundings, and hopefully employee could feel so hard in leaving company. Organizational
Value, make some lists of value that should be the guidance for employees in doing their job and make it a
culture every day in order to increase the sense of belonging to the organizational value in company.
Organizational Commitment, company should develop programs to make sure to the employees that the
company wants them to be their best self and do better in the future. Promotion, development should be
executed within the company so that encourage other employees to also give their best because they knew that
the effort they are putting to the hotel would not be in vain. Job Flexibility, eliminate several old-fashioned rules
that practically make employees think that they have no more space for activity outside of their workplace. Job
Security, assured employees that they will be staying at their job while they are doing their job in line with the
hotel’s policies. Organizational Justice, prove that the hotel is equal employer where there will be no
discrimination against gender, race, religion and especially period of work. Especially when ensuring the
fairness within the hotel is well kept. Skill Recognition, recognizing the skill of employees so that the hotel
could place the right person to the right place in a right time. Learning and Working Climate, Build a good
atmosphere inside company like having good communication and relationship between employees. So, though

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employees are not with their family, they feel like belonged when they are working. Supervisor Support,
personal interaction between supervisors to their rank and file employees as an approach to find out whether or
not present any issues in the work and provide solution and support while solving the issues. Job Involvement,
make a rotation in event committee so everyone can be involved not only when working but also in event.

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