Organizational Culture, Work Environment and Leadership Increase Loyalty: The Mediating Role of Employee Performance

Abstract

This study examines the influence of organisational culture, work environment, and leadership on employee loyalty, with employee performance as a mediating variable, among employees of Archipelago Group hotels in Jakarta and West Java, Indonesia. A quantitative survey approach was employed, with data collected through structured questionnaires from 200 respondents selected using purposive sampling. The data were analysed using partial least squares structural equation modelling (PLS-SEM) in SmartPLS to examine the relationships among the variables and the mediating role of employee performance. The findings indicate that organisational culture positively influences employee loyalty both directly and indirectly through employee performance. Leadership influences employee loyalty indirectly through employee performance, whereas the work environment has a direct effect on employee loyalty but no significant indirect effect through employee performance. The study is limited to Archipelago Group hotels in Jakarta and West Java, which may restrict the generalisability of the findings. Future research should encompass broader geographical areas, other hospitality sectors, and additional variables associated with employee loyalty. From a practical perspective, hotel managers should strengthen organisational culture, improve workplace conditions, and adopt leadership practices that enhance employee performance and loyalty, thereby supporting workforce stability and reducing turnover. This study contributes to the hospitality management literature by clarifying the mediating role of employee performance in the relationships between organisational culture, work environment, leadership, and employee loyalty within the Indonesian hotel context.