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Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference

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  • Myeongju Lee

    (Department of Business Administration, Gyeongsang National University, Jinju-si 52725, Gyeongsangnam-do, Republic of Korea)

  • Kyetaik Oh

    (Departments Social Policy Research Division, Korea Labor Institute, Sejong-si 30147, Chungcheong, Republic of Korea)

  • Hyunok Kim

    (Department of Business Administration, Kumoh National Institute of Technology, Gumi-si 39177, Gyeongbuk, Republic of Korea)

Abstract

Research on generational differences in the workplace is important as it leads to more effective recruitment, retention, and employee wellbeing in terms of human resource management. This study investigates whether there are differences in perceptions of turnover intention, pay level, and organizational culture between different generational groups. First, this study identifies the relationship between pay level and turnover intention. Second, it confirms the moderating effect of organizational culture on the relationship between pay level and turnover intention. Finally, a three-way interaction analysis was conducted to determine whether these relationships differed between Baby Boomers, Gen Xers, and Millennials. As a result of the empirical analysis, the millennial generation showed higher turnover intention than other generations. It was confirmed that the effect of hierarchical culture was greater than that of pay level on the decrease in turnover intention in the millennial generation than in other generations. In other words, it was found that as the hierarchical culture weakened, the turnover intention of Millennials decreased more significantly than that of other generations. Based on these findings, we propose recommendations for understanding Millennials in the workplace and managing generational diversity.

Suggested Citation

  • Myeongju Lee & Kyetaik Oh & Hyunok Kim, 2025. "Effects of Organizational Culture and Pay Levels on Employee Retention: Focused on Generational Difference," Administrative Sciences, MDPI, vol. 15(4), pages 1-19, March.
    • Handle: RePEc:gam:jadmsc:v:15:y:2025:i:4:p:125-:d:1622421
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    References listed on IDEAS

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    1. Li, Yong & Huang, Hui & Chen, Yi-Yi, 2020. "Organizational climate, job satisfaction, and turnover in voluntary child welfare workers," Children and Youth Services Review, Elsevier, vol. 119(C).
    2. Hedva Vinarski-Peretz & Michal Mashiach-Eizenberg & Dafna Halperin, 2024. "Workforce Sustainability in Our Aging Society: Exploring How the Burden–Burnout Mechanism Exacerbates the Turnover Intentions of Employees Who Combine Work and Informal Eldercare," Sustainability, MDPI, vol. 16(17), pages 1-21, August.
    3. Juan Gabriel Martínez-Navalón & Vera Gelashvili & José Ramón Saura, 2020. "The Impact of Environmental Social Media Publications on User Satisfaction with and Trust in Tourism Businesses," IJERPH, MDPI, vol. 17(15), pages 1-17, July.
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