Do Traditional HRM Practices Still Matter? Evidence from Generation Z Employee Performance in the Retail Sector

Abstract

This study investigates the effects of training, motivation, and work environment on employee performance among Generation Z employees, with job satisfaction as a mediating variable, in the retail sector of Pangkalpinang City, Indonesia. A quantitative explanatory approach was employed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) to analyze the relationships among variables. Data were collected through structured questionnaires distributed to Generation Z employees working in modern retail businesses. The results reveal that, although training, motivation, and work environment exhibit positive relationships with employee performance, most of these effects are not statistically significant. Notably, work environment is the only variable that has a significant positive effect on job satisfaction, indicating its dominant role in shaping employee perceptions. However, job satisfaction does not significantly influence employee performance, nor does it mediate the relationships between the independent variables and performance. These findings challenge the assumptions of traditional human resource management models, suggesting that employee performance among Generation Z is not primarily driven by individual-level factors such as motivation and training, but rather influenced by contextual and environmental conditions. The study contributes to the literature by highlighting the limitations of classical HRM theories in contemporary workforce settings and emphasizes the need for more context-sensitive and adaptive HR strategies. From a practical perspective, organizations are encouraged to prioritize the development of supportive work environments rather than relying solely on conventional training and motivation-based approaches to improve performance.