Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference
Abstract
:1. Introduction
2. Theoretical Background and Hypotheses
2.1. Pay Level and Turnover Intention
2.2. The Interaction Effect of Hierarchical Culture on the Relationship Between Pay Level and Turnover Intention
2.3. Generations in the Workplace
2.3.1. Millennials
2.3.2. Generation X
2.3.3. Baby Boomer Generation
3. Materials and Methods
3.1. Sample and Procedures
3.2. Measures
3.2.1. Turnover Intentions
3.2.2. Pay Level and Hierarchical Culture
3.2.3. Generations
3.2.4. Controls
3.3. Analytic Strategy
Three-Way Interaction Analysis
4. Results
4.1. Descriptive Statistics and Correlations
4.2. Confirmatory Factor Analysis
4.3. Hypothesis Testing
5. Discussion
5.1. Research Contributions
5.2. Practical Implications
5.3. Limitations and Future Research
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
1 | South Korea received an IMF loan in 1997 due to a foreign exchange liquidity crisis, which led to the rapid globalization of Korean society. During this time, Gen Xers in South Korea saw their parents, the Baby Boomers, who were loyal to the organization, get laid off from their jobs, which made Gen Xers realize that loyalty to an organization is not worth it. This is an important event to understand that Gen Xers in Korea are highly individualistic (S. Park & Park, 2018). |
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N = 9053 | Frequency | Percent (%) | N = 9053 | Frequency | Percent (%) | ||
---|---|---|---|---|---|---|---|
Industry | Manufacturing | 7256 | 80.20 | Job level | Staff | 2355 | 26.00 |
Finance | 501 | 5.50 | Administrative manager | 1166 | 12.90 | ||
Non-financial sector | 1296 | 14.30 | Assistant manager | 1971 | 21.80 | ||
Firm size * | Fewer than 300 | 5215 | 57.60 | Manager | 1551 | 17.10 | |
300–999 | 2910 | 32.10 | Deputy general manager | 1083 | 12.00 | ||
More than 1000 | 928 | 10.30 | Department manager | 655 | 7.20 | ||
Gender | Female | 2531 | 28.00 | Executive manager | 91 | 1.00 | |
Male | 6521 | 72.00 | |||||
Marital status | Not married | 3954 | 43.70 | Production manager | 181 | 2.00 | |
Married | 5097 | 56.30 | |||||
Employment | Temporary employment | 121 | 1.30 | Education | Graduate from junior high school | 41 | 0.50 |
Permanent employment | 8932 | 98.70 | Graduate from high school | 430 | 4.70 | ||
Unionization | Nonunion | 8059 | 89.00 | Graduate from vocational high school | 1061 | 11.70 | |
Joined a union | 994 | 11.00 | Graduate from junior college | 1622 | 17.90 | ||
Generations | Baby boomers | 117 | 1.30 | Bachelor’s degree | 5404 | 59.70 | |
Generation X | 3112 | 34.40 | Master’s degrees | 452 | 5.00 | ||
Millennials | 5818 | 64.30 | Doctorate degrees | 42 | 0.50 |
N = 9047 | Baby Boomers | Generation X | Millennials | ||||
---|---|---|---|---|---|---|---|
Frequency | Percent (%) | Frequency | Percent (%) | Frequency | Percent (%) | ||
Firm size | Fewer than 300 | 96 | 82.10% | 1837 | 59.00% | 3279 | 56.40% |
300–999 | 15 | 12.80% | 991 | 31.80% | 1901 | 32.70% | |
More than 1000 | 6 | 5.10% | 284 | 9.10% | 638 | 11.00% | |
Industry | Manufacturing | 111 | 94.90% | 2512 | 80.70% | 4630 | 79.60% |
Finance | 0 | 0.00% | 142 | 4.60% | 356 | 6.10% | |
Non-financial sector | 6 | 5.10% | 458 | 14.70% | 832 | 14.30% | |
Length of service | Mean | 5.064 | - | 5.071 | - | 4.104 | - |
Gender | Female | 21 | 17.90% | 513 | 16.50% | 1995 | 34.30% |
Male | 96 | 82.10% | 2599 | 83.50% | 3823 | 65.70% | |
Marital status | Not married | 3 | 2.60% | 382 | 12.30% | 3569 | 61.40% |
Married | 114 | 97.40% | 2730 | 87.70% | 2248 | 38.60% | |
Employment | Temporary employment | 5 | 4.30% | 7 | 0.20% | 109 | 1.90% |
Permanent employment | 112 | 95.70% | 3105 | 99.80% | 5709 | 98.10% | |
Unionization | Nonunion | 98 | 83.80% | 2734 | 87.90% | 5223 | 89.80% |
Joined a union | 19 | 16.20% | 378 | 12.10% | 595 | 10.20% | |
Job level | Staff | 46 | 39.30% | 339 | 10.90% | 1969 | 33.80% |
Administrative manager | 5 | 4.30% | 163 | 5.20% | 997 | 17.10% | |
Assistant manager | 4 | 3.40% | 233 | 7.50% | 1732 | 29.80% | |
Manager | 7 | 6.00% | 645 | 20.70% | 898 | 15.40% | |
Deputy general manager | 8 | 6.80% | 895 | 28.80% | 179 | 3.10% | |
Department manager | 13 | 11.10% | 628 | 20.20% | 14 | 0.20% | |
Executive manager | 17 | 14.50% | 73 | 2.30% | 1 | 0.00% | |
Production manager | 17 | 14.50% | 136 | 4.40% | 28 | 0.50% | |
Pay level | Mean | 8.288 | - | 8.489 | - | 8.169 | - |
Turnover intention | Mean | 2.71 | - | 2.87 | - | 3.26 | - |
Sum | - | 117 | 1.30% | 3112 | 34.40% | 5818 | 64.30% |
M | SD | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | Manufacturing | 0.80 | 0.40 | ||||||||||||||
2 | Firm size 1 | 1.53 | 0.67 | −0.19 ** | |||||||||||||
3 | Length of service 2 | 4.45 | 0.85 | 0.02 | 0.12 ** | ||||||||||||
4 | Gender 3 | 0.72 | 0.45 | 0.11 ** | 0.01 | 0.14 ** | |||||||||||
5 | Marital status 4 | 0.56 | 0.50 | 0.04 ** | 0.01 | 0.50 ** | 0.18 ** | ||||||||||
6 | Graduate from high school | 0.16 | 0.37 | 0.11 ** | −0.12 ** | 0.09 ** | −0.08 ** | 0.04 ** | |||||||||
7 | Bachelor’s degree | 0.60 | 0.49 | −0.058 ** | 0.13 ** | −0.11 ** | 0.14 ** | −0.06 ** | −0.54 ** | ||||||||
8 | Employment 5 | 0.99 | 0.11 | 0.06 ** | −0.03 ** | 0.13 ** | 0.10 ** | 0.06 ** | 0.00 | 0.04 ** | |||||||
9 | Unionization 6 | 0.11 | 0.31 | −0.14 ** | 0.16 ** | 0.12 ** | 0.02 * | 0.04 ** | 0.11 ** | −0.08 ** | 0.04 ** | ||||||
10 | Turnover intention | 3.12 | 0.85 | 0.00 | −0.06 ** | −0.23 ** | −0.14 ** | −0.18 ** | −0.03 ** | 0.04 ** | −0.03 ** | −0.06 ** | |||||
11 | Baby boomers | 0.01 | 0.11 | 0.04 ** | −0.05 ** | 0.08 ** | 0.03 * | 0.10 ** | 0.12 ** | −0.11 ** | −0.03 ** | 0.02 | −0.06 ** | ||||
12 | Generation X | 0.34 | 0.48 | 0.01 | −0.03 ** | 0.53 ** | 0.19 ** | 0.46 ** | 0.16 ** | −0.17 ** | 0.07 ** | 0.03 ** | −0.21 ** | −0.08 ** | |||
13 | Millennials | 0.64 | 0.48 | −0.02 | 0.04 ** | −0.54 ** | −0.19 ** | −0.48 ** | −0.19 ** | 0.19 ** | −0.06 ** | −0.03 ** | 0.22 ** | −0.15 ** | −0.97 ** | ||
14 | Pay level | 8.30 | 0.34 | −0.06 ** | 0.09 ** | 0.47 ** | 0.20 ** | 0.36 ** | −0.18 ** | 0.13 ** | 0.06 ** | −0.10 ** | −0.26 ** | 0 | 0.46 ** | −0.46 ** | |
15 | Hierarchical culture | 3.49 | 0.66 | −0.04 ** | 0.13 ** | 0.04 ** | 0.03 * | 0.04 ** | −0.10 ** | 0.08 ** | −0.02 | 0.03 * | −0.09 ** | 0 | 0 | 0 | 0.07 ** |
Turnover Intention | Model 1 | Model 2 | Model 3 | Model 4 | Model 5 |
---|---|---|---|---|---|
β | β | β | β | β | |
Constant | 3.727 *** | 7.209 *** | 5.061 *** | 7.037 *** | −8.982 |
Manufacturing | 0.147 *** | 0.031 | 0.030 | 0.035 | 0.033 |
Non-financial sector | 0.216 *** | 0.097 * | 0.094 * | 0.104 * | 0.101 * |
Firm size: fewer than 300 | 0.116 *** | 0.034 | 0.033 | 0.040 | 0.040 |
Firm size: 300–999 | 0.089 ** | 0.020 | 0.019 | 0.022 | 0.022 |
Log (length of service) | −0.263 *** | −0.236 *** | −0.236 *** | −0.214 *** | −0.216 *** |
Staff | 0.427 *** | 0.065 | 0.064 | 0.010 | −0.009 |
Administrative manager | 0.360 *** | 0.033 | 0.029 | −0.029 | −0.056 |
Assistant manager | 0.386 *** | 0.108 | 0.103 | 0.037 | 0.004 |
Manager | 0.340 *** | 0.093 | 0.088 | 0.038 | 0.001 |
Deputy general manager | 0.159 + | 0.045 | 0.042 | 0.023 | 0.000 |
Production manager | 0.024 | −0.159 | −0.165 + | −0.193 + | −0.217 * |
Gender 1 | −0.125 *** | −0.093 *** | −0.092 *** | −0.085 *** | −0.083 *** |
Marital status 2 | −0.048 * | −0.064 ** | −0.063 ** | −0.049 * | −0.054 ** |
Graduate from high school | 0.170 | 0.184 | 0.188 | 0.118 | 0.174 |
Graduate from junior college | 0.200 | 0.225 + | 0.229 + | 0.143 | 0.203 |
Bachelor’s degree | 0.225 | 0.242 + | 0.244 + | 0.152 | 0.210 |
Master’s degree | 0.071 | 0.167 | 0.172 | 0.082 | 0.141 |
Employment 3 | −0.026 | −0.062 | −0.062 | −0.071 | −0.065 |
Unionization 4 | −0.058 + | −0.108 *** | −0.108 *** | −0.107 *** | −0.113 *** |
Innovative culture | −0.267 *** | −0.267 *** | −0.267 *** | −0.266 *** | |
Clan culture | −0.246 *** | −0.247 *** | −0.248 *** | −0.249 *** | |
Market culture | −0.041 * | −0.042 * | −0.040 * | −0.039 * | |
Pay level (X) | −0.216 *** | 0.045 | −0.213 *** | 1.70 + | |
) | 0.114 | 15.752 + | |||
) | 0.205 ** | 15.333 + | |||
Hierarchical culture (Z) | 0.123 *** | 0.729 * | 0.123 *** | 5.031 + | |
−1.853 + | |||||
−1.817 + | |||||
−0.073 + | −0.586 * | ||||
−4.746 * | |||||
−4.830 * | |||||
0.562 * | |||||
0.580 * | |||||
F | 47.97 *** | 132.14 *** | 127.13 *** | 122.85 *** | 97.350 *** |
0.113 | 0.305 | 0.308 | 0.309 | 0.310 |
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Lee, M.; Oh, K.; Kim, H. Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference. Adm. Sci. 2025, 15, 125. https://doi.org/10.3390/admsci15040125
Lee M, Oh K, Kim H. Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference. Administrative Sciences. 2025; 15(4):125. https://doi.org/10.3390/admsci15040125
Chicago/Turabian StyleLee, Myeongju, Kyetaik Oh, and Hyunok Kim. 2025. "Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference" Administrative Sciences 15, no. 4: 125. https://doi.org/10.3390/admsci15040125
APA StyleLee, M., Oh, K., & Kim, H. (2025). Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference. Administrative Sciences, 15(4), 125. https://doi.org/10.3390/admsci15040125