The Effect of Authentic Leadership on Turnover

Intention Mediated by Organizational Commitments

in PT. Bio Nusantara Technology Bengkulu

Praningrum and Lulu Legina

Departemen of Management, Universitas Bengkulu, Indonesia

Abstract. The purpose of this research is to examine the influence of authentic

leadership on employee turnover intention mediated by organizational

commitment of employees on PT Bio Nusantara Technology Bengkulu. The

mediated regression analysis was used to investigate the research model based on

a survey of 108 employees from the Palm Oil Factory PT Bio Nusantara

Technology Bengkulu. The results supported the effects of authentic leadership,

i.e. self awarenness, relational transparency, balanced processing, internalized

moral perspective on employees’ turnover intention mediating by organizational

commitment. Findings also indicated that employees’ organizational

commitment have partially mediates on employees’ intention turnover. Since the

survey used cross-sectional data and samples here were limited only one

companies, the results of this study may prove not to be generalizable and should

be confirmed using larger samples and/or longitudinal studies.

Keywords: Authentic Leadership ꞏ Organizational Commitment ꞏ Turnover

Intention

1 Introduction

Human resources have an important role in determining the success of a company.

There are three important reasons namely, human resource management can be a

significant source of competitive advantage, human resource management becomes an

important part of organizational strategy and how organizations treat people is

apparently also greatly affect organizational performance [1] in line with opinions [2]

that the most important element in management is the workforce in a company, because

through human resources so that other resources in the company can be implemented.

The existence of employees needs to be managed properly in order to make a positive

contribution to the progress of the organization. Conversely, if the employee is not

managed properly, then the employee will lack enthusiasm in working and at the end

there will be a desire to resign or leave the company. The desire of employees to

turnover is an initial signal that allows employee turnover in a company.

Turnover intention [3] is the intention to leave the organization as a behavior that

shows dissatisfaction with the job, the idea of leaving, the intention to find another job,

and the possibility of finding another job. Turnover intentions and intention to stop are

used interchangeably in the literature [4]. When employees do seriously consider

quitting their jobs, they are considered to have the intention to leave the organization

Praningrum, . and Legina, L.

The Effect of Authentic Leadership on Tur nover Intention Mediated by Organizational Commitments in PT. Bio Nusantara Technology Bengkulu.

DOI: 10.5220/0010520600002900

In Proceedings of the 20th Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA 2019), pages 553-562

ISBN: 978-989-758-582-1; ISSN: 2655-9064

553

[5]. The term intention describes the desire or intentional employee to leave the

organization [6].

In his book [2] states that turnover intention, is a desire of workers to quit the

company because of moving to another company, creating challenges for the

development of human resources. High turnover intentions can result in high turnover

rates, as a result the organization can lose its best employees, decrease organizational

performance, recruitment costs and training new employees that add to the

organization's costs [7 ]. Employees with high turnover intentions tend to be less

productive and less efficient [4].

Researchers in the field of human resource development have explored turnover and

turnover intentions in relation to job satisfaction, organizational commitment,

personality, talent, intelligence, government policy, and unemployment rates [8]. Turn

over is relate to personnel costs associated with the selection, recruitment, training and

development of new employees to replace employees who voluntarily leave the

organization [9], [10]. Turnover is directly related to higher employee recruitment and

training costs, lower employee morale levels, job satisfaction, and customer perceptions

about lower service quality [11].

There are several factors related to turnover intentions, some of which are employee

job satisfaction and organizational commitment [12]. Ineffective leadership [13], [14],

while authentic leadership is a form of positive leadership needed to develop trust and

a positive work environment, which is used as an encouragement for employees to

remain in the company [15], [16]. Trust among employees becomes an important

variable related to the intention of employees to remain in the company [17].

Authentic leadership is one way to create trust and confidence in employees [18]

and to support positive self-development in employees [19], authentic leadership will

be negatively related to the level of turnover intention in employees [20]. Authentic

leadership is a positive thinking person with an honest self-concept and is known for

promoting openness. They are not afraid to show their emotions, their vulnerability and

to always be in contact with their employees [21]. Authentic leadership is a process that

comes from positive psychological capacities and a growing organizational context,

which results in greater self-awareness and positive behavior that is self-regulated by

leaders and colleagues, encouraging positive self-development [19].

In addition to authentic leadership, another factor considered important in

influencing turnover intention is organizational commitment. Organizational

commitment is defined as a condition in which an employee sided with a particular

organization and its objectives, and intends to maintain membership in the organization

[22]. Committed people tend is not to stop and accept other work. A committed

employee will perceive the value and importance of integration of individual and

organizational goals. Employees will think about their goals and organizational goals

as personal things [23]. The results of statistical analysis show a significant negative

relationship between organizational commitment and turnover intention and a

significant positive relationship between organizational commitment and job

satisfaction [24]. Organizational commitment will result in high performance, low

turnover, and low absenteeism [25].

Some studies have only looked at the direct effect of authentic leadership and

organizational commitment on intention turnover, there is one study that uses

organizational commitment as a mediating variable, but only uses affective

commitment. This study wants to know the effect of authentic leadership on turnover

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intentions through organizational commitment (affective, continuance and normative

commitment) as a mediator who is expected to strengthen authentic leadership to reduce

turnover intentions especially in the plantation industry.

2 Literature Review and Hypotheses Development

2.1 Authentic Leadership

Leadership is an important thing in the managerial process, because with leadership all

management processes can run well and with the leadership of the employees will also

have enthusiasm in carrying out their duties. Leadership [23] is the ability to influence

a group towards achieving a vision or goal that has been set, and [26] leadership has

the meaning of ability or a process of influencing people to achieve certain goals.

Authentic leadership is a promising way to think about ethics and beliefs in

leadership and emphasizes the moral aspects of a leader. Authentic leaders know who

they are, know what they believe and value, act on those values, and believe openly and

frankly. Followers consider them ethical people. The main quality produced by

authentic leadership is trust. Authentic leaders share information, encourage open

communication, and cling to their ideals. The result is that people come to have

confidence in them [23].

The self-concept and self-identity of the authentic leader is strong, clear, stable, and

consistent. This leader has a self-understanding of values, beliefs, emotions, self-

identity, and abilities. In other words they know who they are and what they believe.

They also have a high level of self-acceptance, which is similar to the maturity of their

emotions. Authentic leadership has positive core values, such as honesty, altruism,

kindness, justice, accountability and optimism. The core values of authentic leaders

motivate them to do what is right and fair for followers and create a special type of

relationship with them that includes high mutual trust, transparency (open and honest

communication), guidance on shared goals and an emphasis on the welfare and

development of followers [26].

Define authentic leadership [27] as genuine people who are true to themselves and

what they believe. Authentic leaders don't let others' expectations guide them, however,

they are ready to be themselves and use their own ways. As they develop themselves to

become authentic leaders they care more about serving others than to grow personally.

Authentic leaders develop sincere relationships with others and create trust. Because

people trust them, they are able to motivate people to improve high performance by

empowering them to lead. Authentic leaders look for opportunities to spread their

knowledge and wisdom to many people and organizations, even as they continue their

own active learning process. Authentic leaders are able to place the mission and goals

of the organization above their own interests [27].

There are four dimensions of authentic leadership, namely 1) Self-awareness refers

to the leader's awareness of their weaknesses, strengths and goals as well as others see

their leadership. 2) Relational transparency involves personal expressions such as

sharing information openly, expressing actual thoughts and feelings. 3) Balanced

processing refers to the process of analyzing all the relevant information objectively

before making a decision. 4) Internalized moral perspective refers to the behavior of

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leaders who hold fast to moral standards and internal values rather than external

pressures such as those from colleagues, organizations or social pressure [28].

2.2 Turnover Intention

The definition of turnover intention [3] is the intention to leave the organization as a

behavior that shows dissatisfaction with the job, the idea of leaving, the intention to

find another job, and the possibility of finding another job. Turnover intentions have

been described as employee willingness or efforts to leave the current workplace

voluntarily [29]. Turnover intention, being a useful proxy for actual turnover, is the best

predictor of actual turnover [30]. Employee turnover has been associated with many

negative outcomes for the organization and employees [9].

Turnover, is the desire of workers to quit the company and move to another

company, creating challenges for human resource development [2]. Turnover intention

[31] is an intention on an employee to leave his job on a voluntary basis. According to

[32] turnover intention is a level or intensity of employee's desire to leave the company,

many things are the reasons that cause turnover intention, one of which is the desire to

get another better job. Turnover intention [33] is a prediction that can describe an

employee's intention to stay or leave the company. That information can be used by the

company in predicting employee intentions to remain in a company or not, and with

that information the company can better determine the next plan in setting personnel

strategies.

Some experts have developed aspects that can be used to measure turnover

intention. One of them [34] suggests several aspects that are indicate of turnover

intention, namely: level of commitment, job satisfaction, management support, career

development and work improvement. Researchers [3] mentioned three things that can

be used as indicators of measurement of turnover intention consisting of: 1) thinking of

quitting reflects individuals to think out of work or remain in the organization or work

environment. Starting with employee dissatisfaction, then the employee thinks of

leaving the organization or place of work. 2) Intention to seacrh for alternative, defines

an individual who wishes to find work for another organization. If an employee has

started thinking about quitting his job, the employee will try to find a job outside the

company that feels better. 3) intention to quit, reflecting individuals who intend to

leave. Employees intend to leave if they have found a better job and will end with the

employee's decision whether to decide to leave the company or not.

2.3 Organizational Commitment

Employee commitment [35] is an attitude of closeness between an employee or an

individual towards an organization that is manifested by loyalty, and the desire to

remain in the organization due to its involvement in the organization. Organizational

commitment [25] shows the level at which a worker identifies an organization, its goals

and hopes to remain a member. Organizational commitment [24] is a condition in which

an employee sides with a particular organization and its objectives, and intends to

maintain membership in that organization. Employee commitment [27] is defined as an

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attitude that shows employee loyalty and is an ongoing process of how a member of the

organization expresses their attention to the success and goodness of the organization.

Three dimensions of organizational commitment [35] are, 1) affective commitment is

an emotional feeling for the organization and a belief in its values. 2) continuance

commitment are prioritizes economic values to survive in an organization when

compared to leaving the organization. An employee may commit to an employer

because of high pay and feel that resigning from the company will destroy his family.

3) normative commitment is an obligation to survive in the organization for moral or

ethical reasons.

2.4 Authentic Leadership and Turnover Intention

Several studies have been conducted [22] that authentic leadership has a negative

influence on turnover intention. Authentic leadership has a negative influence on

turnover intention [36]. Research [37] shows that authentic leadership has a negative

effect on turnover intention. In his research [38] also found that authentic leadership

had a negative influence on turnover intention. Thus, alternative hypotheses are

formulated as follows:

Ha1: Authentic leadership has a negative effect on turnover intention.

2.5 Authentic Leadership and Organizational Commitment

Authentic leadership is expected to be a driving force for employees in organizational

commitment for two reasons, firstly through a manager's self-awareness can show an

understanding of the strengths and weaknesses in gaining self-insight through exposure

to others and becoming aware of one's impact on others. Secondly, transparency is an

important aspect of authentic leadership by emphasizing the importance of attending to

common interests, sometimes in a conflict directly related to individual interests [39].

Research on the influence of authentic leadership and organizational commitment [16]

that there is a direct effect of authentic leadership on employee attitudes at work,

including organizational commitment, job satisfaction, work meaning and work

engagement. Then, the alternative hypothesis is formulated as follows:

Ha2: Authentic leadership has a positive effect on organizational commitment.

2.6 Organizational Commitment and Turnover Intention

Researchers in the field of human resources have defined the relationship of turnover

intention with job satisfaction, organizational commitment, personality, intelligence,

government policy, and unemployment rates [9]. The results of statistical analysis was

support a significant negative relationship between organizational commitment and

turnover intention and a significant positive relationship between organizational

commitment and job satisfaction [26]. Organizational commitment is one of the most

important issues in an organization because it has a positive impact on employee

dedication and employee loyalty [40] and has a negative impact on turnover intention

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[22]. Organizational commitment has the potential to reduce turnover rates [41]. Then,

the alternative hypothesis is formulated as follows:

Ha3: Organizational commitment has a negative effect on turnoverintention

2.7 The Effect of Authentic Leadership on Turnover Intention

Mediated by Organizational Commitment

Authentic leadership has a positive influence on organizational commitment and

authentic leadership has a negative influence on turnover intention mediated by

organizational commitment [37]. Research [38] found that the indirect negative effect

of authentic leadership on turnover intention was mediated by affective commitment.

These result is indicate that managers can reduce the level of turnover intention in

employees through improving the quality of leadership. A good leader will certainly

increase the commitment of his employees so as to reduce the level of employee

turnover. Then, the alternative hypothesis is summarized as follows:

Ha4: Organizational commitment mediates authentic leadership in influencing

employee turnover intention.

3 Research Method

In this study the population was all employees of PT Bio Nusantara Teknologi, totaling

183 people. The sampling method uses purposive sampling, with the criteria for

permanent employees who have more than two years of work, the number of selected

samples is 108 employees. The data used are primary data obtained directly through the

results of filling in the questionnaire by respondents who have been used as research

samples. The measurement scale used is a Likert scale using five scales ranging from

strongly disagree to strongly agree. The questionnaire distributed using the drop-off

and pick-up method was the giving of the questionnaire directly to one of the

respondents who was the head of all research respondents. The respondent's head will

be help distribute the questionnaire to other respondents and the researcher waits for

the results of the questionnaire to be returned with a time agreement agreed upon by

the researcher with the respondent's head. All questionnaires received were answered

well. Used testing of the validity and reliability, all instruments were valid and reliable

so that it was feasible to be used as a research instrument. From the questionnaire,

respondents are obtained demographic information with a gender ratio of 96% men and

4% women. Age <25 years (21.3%), 26-35 years (35.2%), 36-45 years (28.7%),> 45

years (14.8%) with junior high school education (34 , 3%), high school (52.8%),

diploma (32.7%), and undergraduate (10.2%). To test the hypothesis in its research used

mediated regression approach.

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4 Discussion

4.1 The Effect of Authentic Leadership on Turnover Intention at PT

Bio Nusantara Teknologi

Hypothesis a1 is accepted, where authentic leadership has a significant negative effect

on turnover intention. This shows that authentic leadership is an important factor in

keeping employees in the company and not wanting to leave the company. The

balanced processing dimension obtained the responses of respondents with the highest

scores. With the highest indicator where the leader are always collects and analyzes all

relevant information objectively before making a decision. This behavior makes

employees feel treated fairly, cared for, listened to complaints and opinions so as to

eliminate the desire to leave the company. The results of this study support the theory

[42 ], [43] employee's intention to remain in work is directly influenced by their

relationship with their leader.

4.2 The Effect of Authentic Leadership on Organizational Commitment

at PT Bio Nusantara Teknologi

The Ha2 hypothesis is supported. The results show that authentic leadership has a

significant positive effect on organizational commitment. Respondents' responses to the

dimensions of authentic leadership internalized moral perspective are high, where

leaders are consistent with their actions. The regression results support the theory of

[15] there is direct effect of authentic leadership on organizational commitment of

employees, where the attitude of leaders is transparent in relationships, balanced

information processing, consistency between principles, words and actions shown by

leaders on their employees can make a positive contribution by increasing

organizational commitment to employees. For employees of this company the

dimension of commitment that gets the highest score is the dimension of continuance

commitment with an indication that employees have little choice in considering leaving

the organization and the serious consequences of leaving the organization. The

existence of leader support for employees who have important positions, making

employee commitment to the organization is higher.

4.3 Effect of Organizational Commitment on Turnover Intention at PT

Bio Nusantara Teknologi

The Ha3 hypothesis is supported. Organizational commitment has a significant

negative effect on the employee intention of PT Bio Nusantara Teknologi Bengkulu.

The results of the regression analysis in this is study support the research results of [20]

which states that organizational commitment has a negative effect on tunover intention.

High of continuance commitment response scores, where employees feel a lot of bad

things will be happen if leaving the organization and must survive in the organization

to meet their needs and desires, resulting in low employee turnover intentions.

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4.4 The Effect of Authentic Leadership on Turnover Intention Mediated

by Organizational Commitment at PT Bio Nusantara Teknologi

The Ha4 hypothesis is supported, where organizational commitment is expressed as a

partial mediating variable, because after entering the organizational commitment

variable, the influence of authentic leadership on turnover intention towards employees

decreases even though it does not become zero (β ≠ 0). The results of the study are

different from the research of [37] which suggests that authentic leadership has a

significant negative effect on the tuning intention which is fully mediated by

organizational commitment (affective commitment). In this study continuance

commitment are partially moderates authentic leadership towards turnover intentions.

This happens because of continuance commitment that emphasize economic

considerations that cause employees are not want to leave the company because

employees feel a lot of bad things will happen if they leave the organization and must

stay in the organization to meet their needs and desires, resulting in moderation of

commitments to the low intention of employee turnover is partial.

5 Conclusion

1 The results of authentic leadership research is positively affect organizational

commitment and negatively affect intention turn over. Leaders are need to increase

awareness of their weaknesses, strengths, goals as well as other people or employees

see their leadership.

2 The results of the organizational commitment research on turnover intention have a

negative and significant effect. In the results of this study the dimension of

continuance commitment has the highest score, so it is expected that the manger can

encourage employees of PT Bio Nusantara be able to increase emotional feelings

for organization and confidence in its values in order to increase employee

organizational commitment.

3 For further researchers, it is hoped to add other variables. This is because there are

still variables that have not been found in this study that still have links with

authentic leadership and organizational commitment to turnover intention.

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