E-ISSN: 2963-3699
P-ISSN: 2964-0121
Homepage: Homepage: https://return.publikasikupublisher.com
This work is licensed under CC BY-SA 4.0
MILLENNIAL EMPLOYEES PERCEPTION OF THE INFLUENCE OF
TRANSFORMATIONAL LEADERSHIP ON ORGANIZATIONAL
PERFORMANCE THROUGH THE IMPLEMENTATION OF TOTAL
QUALITY MANAGEMENT (TQM) EMPIRICAL STUDY AT PT ASABRI
(PERSERO) BRANCH OFFICES
Novia Maharani Yuliana Dewi Putri Sari
1*
, Andriyani
2
Faculty of Economics and Business, Diponegoro University, Semarang, Indonesia
1,2
1
2
ABSTRACT
This study aims to analyze the influence of transformational leadership on organizational performance
through the implementation of TQM according to the perception of millennial employees at PT ASABRI
(Persero) Branch Offices. Organizational performance is a characteristic that describes the quality of the
organization that can be achieved with invaluable results. In achieving optimal organizational
performance, the role of a leader is needed. Transformational leadership is considered capable of
motivating team members to perform above average. In addition, a system such as total quality
management (TQM) is also needed that is well implemented so that organizational performance is
consistent with the goals that have been set. Organizational performance is measured by a balanced
scorecard (BSC) approach, TQM implementation is measured by criteria contained in The Malcolm
Baldrige National Quality Improvement Act and transformational leadership is measured by The
Multifactor Leadership Questionnaire (MLQ). The population in this study is millennial employees in
33 Branch Offices of PT ASABRI (Persero) spread throughout Indonesia. Samples were taken using
purposive sampling techniques so that as many as 134 millennial employees were selected as
respondents to represent work units. The analysis technique used in the research is Structural Equation
Modeling (SEM) with SmartPLS.3.0 software. The results showed that transformational leadership did
not have a significant positive effect on organizational performance, transformational leadership had a
significant positive effect on TQM implementation, and TQM implementation had a significant positive
effect on organizational performance. In this study, it was also found that the implementation of TQM
mediates the indirect influence between transformational leadership on organizational performance at
PT ASABRI (Persero) Branch Offices. The results of this study contribute on the literary and practical
side by providing a new understanding of the influence of transformational leadership on Organizational
Performance through TQM Implementation in service companies.
Keywords: Transformational Leadership, Total Quality Management (TQM), Organizational
Performance, Millennial Generation, State-Owned Enterprises
INTRODUCTION
PT ASABRI (Persero) is a state-owned enterprise in the insurance and pension fund cluster
in charge of managing social insurance for Indonesian Soldiers (TNI), Police Members and
government employees (ASN) within the Ministry of Defense and Polri. In order to ensure
excellent service is achieved in each branch office of PT ASABRI (Persero), management sets
Key Performance Indicator (KPI) as an indicator to assess organizational performance which is a
form of balanced scorecard (BSC) approach. In terms of human resource management, PT
ASABRI (Persero) has a policy to rotate the position of head of branch office with a duration of
every 3 years. This policy affects the performance achievement of branch offices with an
assessment period once a year through key performance indicators (KPIs) which are possible due
to differences in leadership styles (Anderson et al., 2017).
PT ASABRI (Persero) compiles key performance indicators (KPI) of branch offices by
prioritizing service quality. So that quality policy becomes an important thing in carrying out the
company's operational activities. Based on KPI assessment report data, it is known that there are
fluctuations in the organizational performance of each branch office in the period 2018 to 2020
caused by the increase in the number of millennial employees in 2019, employee rotation and
mutation policies, and the implementation of a good quality management system.
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
696 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
One of quality management systems that can be applied in branch offices as a quality
control system is total quality management (TQM) (Al-Qahtani et al., 2015). Based on the
interviews results with branch office representatives of type A, type B and type C, it is known
that the implementation of TQM as a quality management system has not been fully understood
by the management in the branch office. This can be seen from the TQM dimension that has not
been implemented thoroughly in branch offices which is possible due to the differences in
leadership styles (Al-Dhaafri & Alosani, 2021). Organizational performance is a characteristic
that describes the essential qualities of an organization that can be achieved with valuable results
(Alsughayir, 2014; Androwis et al., 2018). In carrying out performance evaluations, non-financial
measurements also have tremendous importance, particularly for the long-term operations of the
organization, including product quality and employee performance (Nazarian et al., 2017).
According to Wang, et.al. (2010), performance measurement should cover a wider spectrum of
performance measurements such as customer satisfaction and service quality as non-financial
indicators, as no single performance indicator fully represents all aspects. Kaplan and Norton
(Kaplan, 1992; Kaplan & Norton, 1996) suggests using a balanced scorecard (BSC) approach so
that managers can track financial and operational metrics to measure organizational performance
that are not measurable by financial indicators.
In achieving optimal organizational performance, the role of a leader is needed (Nazarian
et al., 2017). Differences in leadership styles that can be positively or negatively correlated with
organizational performance (Agle et al., 2006). Using the right leadership style such as
transformational leadership style can bring organizations to achieve above average standard
performance by maximizing individual capabilities. Transformational leaders are able to motivate
subordinates to achieve personal goals and organizational goals, by aligning individual needs and
organizational needs through clear shared vision. In addition, transformational leaders also
encourage critical thinking, innovation and creativity in problem-solving and group decision-
making situations (Khalfallah et al., 2021). Bass and Avolio (1994) absorbed the concept of
transformational leadership into quantitative measures by developing The Multifactor Leadership
Questionnaire (MLQ). Based on several studies, idealized influence, inspirational motivation,
intellectual stimulation and individual consideration were identified as four key characteristics of
transformational leaders (B. M. Bass, 1999).
The latest generation to enter the workforce is the millennial generation. Millennials are
emerging as a unique workforce group that requires leadership that understands and motivates
them to realize organizational goals and personal aspirations (Davids et al., 2021). The choice of
leadership style must also consider the generation led at this time. To understand leadership
expectations in millennials, managerial and intuitive skills must be leveraged to explore how
leadership expectations can be applied in line with this generation's ambitions.
RESEARCH METHOD
This study used primary data obtained from millennial employees at PT ASABRI (Persero)
Branch Offices through interviews and questionnaires. The questionnaire uses questions that are
translated by the back translation method, which is a method of translating a foreign language
(English) into Indonesian which is then translated back into the foreign language. This method
has been considered the best verification and validation technique to ensure the accuracy of
translations based on the original source. Likert scales with intervals of 1 to 5 were used in the
study questionnaire. The number 1 is a representation of strongly disagree and the number 5 is a
representation of strongly agree. This scale is used because it is considered more reliable and can
provide a larger volume of data compared to other scales (Cooper & Schindler, 2006). In addition,
this study also used secondary data obtained from the company.
The population in this study is employees working in 1 main branch office and 32 branch
offices of PT ASABRI (Persero) with a total of 508 employees. Samples are taken using non-
probability sampling techniques (purposive sampling) which is a sampling technique limited to
certain types of people who meet the criteria set by researchers (Sekaran & Bougie, 2016). The
sample criteria in this study are millennial employees (born in 1982 to 2000) who work in 1 main
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
697
branch office and 32 branch offices of PT ASABRI (Persero) in staff and managerial positions
totaling 134 employees. These sample criteria were selected in order to represent the level of
position in the branch office.
Structural Equation Modelling (SEM) was used as an analytical technique in this study.
This technique was measured using the SmartPLS.3.0 program. Research using SEM makes it
easier for researchers to obtain answers to questions that have regression or dimensional
properties (Ferdinand, 2014). Partial Least Square (PLS)-based Structural Equation Modeling
(SEM) analysis was used in this study because it did not demand a large number of samples. The
minimum recommended sample is 30 to 100 respondents (Ghozali, 2014).
This study uses three variables in the form of one dependent variable, one independent
variable and one mediation variable which can be described as follows:
Table 1 Variable Operational Definition
Variable
Operational Definition
Indicator
Transformational
leadership
Transformational leadership is a style of leadership by
emphasizing the importance of a leader creating positive
changes in the attitudes of his employees. This leadership
focuses on generating innovative change within the
institution through its followers who are willing to
commit to the organization's vision and long-term goals
(Qarrilow, 2012; Sullivan & Decker, 2009)
• Idealized influence;
• Inspirational motivation;
• Intellectual stimulation; and
• Individual consideration.
(Bass dan Avolio, 1995 ; B. Bass &
Avolio, 2004; Bouranta, 2020; Putra et
al., 2020)
Total quality
management
practices (TQM)
Total quality management (TQM) is a method used to
increase competitiveness, efficiency and flexibility
throughout the organization (Oackland, 1989)
• Strategic planning;
• Customer focus;
• Process management;
• Human resource focus; and
• Information and analysis.
(Bouranta, 2020; Sik Cho & Y. Jung,
2014)
Organizational
performance
Organizational performance is the achievement of the
organization at the end of the period whose measurement
is based on the goals and objectives that have been set
(Nancy, 2013).
• Learning and growth
perspectives;
• Internal business process
perspective;
• Customer perspective; and
• Financial perspective.
(Kaplan & Norton, 2005; Putra et al.,
2020)
RESULT AND DISCUSSION
The data analysis method used in this study is Structural Equation Modeling (SEM)
analysis using SmartPLS.3.0 software. Before being tested with SEM, aggregation data was tested
to determine the level of reliability between groups.
Aggregation Data Testing
The variables of transformational leadership, TQM implementation and organizational
performance in this study used an assessment of 1 to 17 employees from the work unit. Therefore
the aggregation process is carried out to obtain justification from the consensus of the employee's
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
698 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
assessment on the variables of transformational leadership, TQM implementation and
organizational performance (Ejere & Abasilim, 2013).
Table 2 IRRVariabel Testing
Variable
Number of
items
ICC(1)
ICC(2)
Sig.
Transformational
Leadership
16
0,607
0,961
0,000
TQM
implementation
22
0,636
0,975
0,000
Organizational
Performance
13
0,554
0,942
0,000
Source: Results of data processing through SPSS 26
IRR testing on transformational leadership variables indexed ICC(1) of 0.607 or in the
range of 0.51 to 0.75, which is moderate indexed (Portney & Watkins, 2009). The ICC(1) Index
explains that there is within-group variance in scores in assessing transformational leadership
variables. The variance of scores between work unit members on transformational leadership
variables is in fair to good territory, so it is feasible to proceed to the next test. The ICC(2) index
of transformational leadership variables shows an index of 0.961 or is at a vulnerability of 0.91
to 1, which is an excellent index, which explains that there is between-group variance in assessing
transformational leadership. Thus, the data used for this study is feasible to use at a later stage.
IRR testing on the TQM implementation variable indexed ICC(1) of 0.636 or in the range
of 0.51 to 0.75, which is moderate indexed (Portney & Watkins, 2009). The ICC(1) Index explains
that there is within-group variance in scores in assessing TQM implementation variables. The
variance of scores between members of the work unit on the TQM implementation variable is
in the fair to good area, so it is feasible to proceed to the next test. The ICC(2) index of the TQM
implementation variable shows an index of 0.975 or is at a vulnerability of 0.91 to 1, which is an
excellent index, which explains that there is between-group variance in assessing TQM
implementation. Thus, the data used for this study is feasible to use at a later stage.
IRR testing on organizational performance variables indexed ICC(1) of 0.554 or in the
range of 0.51 to 0.75, which is moderate indexed (Portney & Watkins, 2009). The ICC(1) Index
explains that there is a within-group variance in scores in assessing organizational performance
variables. The variance of scores between members of the work unit on organizational
performance variables is in the moderate area, so it continues to the next test. The ICC Index (2)
of organizational performance variables shows an index of 0.942 or is at a vulnerability of 0.91
to 1, which is an excellent index, which explains that there is between-group variance in assessing
organizational performance. Thus, the data used for this study is worth using at a later stage.
Structural Equation Analysis (SEM) Analysis
1. Measurement Model Evaluation (Outer Model)
a. Convergent Validity Testing
Convergent validity testing aims to test whether the indicator variables used are really
significant in terms of reflecting constructive or latent variables. The convergent validity
test is carried out by looking at the outer loading or loading factor value of each indicator
against its construct where the indicator is declared valid if the loading factor value >
0.7. Testing the convergent validity of this study was carried out twice. The first validity
test resulted in 1 invalid indicator as shown below:
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
699
Figure 1 Path Diagram Loading Factor Measurement Model
Source: SmartPLS.3.0 Data Processing Results
Furthermore, the indicator is removed and tested again with the results of all indicators declared
valid according to the following figure:
Figure 2 Path Diagram Loading Factor Measurement Model
Without KTIM1 Indicator
Source: SmartPLS.3.0 Data Processing Results
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
700 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
In addition, when viewed from the value of the average variance inflation factor (AVE) in
Table 3 below, it shows that each variable and dimension has an AVE value greater than 0.5.
Thus, all indicators used (without the KTIM1 indicator) have met convergent validity.
Table 3 Average Variance Inflation Factor Value (AVE)
Variable
Dimension
Average Variance
Extracted (AVE)
Traformational Leadership
0,668
Idealized Influence
0,788
Inspirational Motivation
0,835
Intellectual Stimulation
0,832
Individual Consideration
0,891
TQM implementation
0,682
Perencanaan Strategis
0,854
Fokus Pelanggan
0,727
Manajemen Proses
0,801
Fokus Sumber Daya Manusia
0,794
Informasi dan Analisa
0,839
Organizational Performance
0,660
Learning and Growth Perspectives
0,859
Internal Business Process Perspectives
0,767
Customer Perspective
0,771
Financial Perspectives
0,877
Source: SmartPLS.3.0 Data Processing Results
b. Discriminant Validity Testing
The discriminant validity test can be seen through the Fornell-Lacker Criterian test, where
the model has good discriminant validity if the square value of the Average Variance
Extracted of each exogenous construct (value on the diagonal) exceeds the correlation
between the construct and other constructs (values below the diagonal), (Henseler et al.,
2015). The results of the fornell larcker criterion test were obtained as follows:
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational Performance Through The Implementation Of Total Quality
Management (TQM) Empirical Study at PT Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
701
Table 4 Dicriminant Validity Test Results Through Fornell Larcker Test
Customer
Focus
Human
Resource
s Focus
Idealized
Influence
Individu
al
Consider
ation
Informat
ion and
analysis
Inspirational
Motivation
Intellect
ual
Stimulati
on
Process
Manage
ment
Strategic
Planning
Financial
Perspectiv
es
Customer
Perspectiv
e
Learning
and
Growth
Perspectiv
es
Internal
Business
Process
Perspectiv
es
Customer Focus
0,853
Human
Resources
Focus
0,868
0,891
Idealized
Influence
0,675
0,767
0,888
Individual
Consideration
0,52
0,595
0,711
0,944
Information and
analysis
0,893
0,861
0,7
0,671
0,916
Inspirational
Motivation
0,65
0,603
0,828
0,662
0,569
0,914
Intellectual
Stimulation
0,658
0,624
0,816
0,734
0,668
0,906
0,912
Process
Management
0,893
0,832
0,669
0,485
0,83
0,597
0,562
0,895
Strategic
Planning
0,741
0,747
0,719
0,675
0,796
0,527
0,527
0,606
0,924
Financial
Perspectives
0,753
0,838
0,677
0,444
0,792
0,524
0,552
0,783
0,663
0,936
Customer
Perspective
0,731
0,69
0,552
0,352
0,703
0,488
0,488
0,713
0,513
0,739
0,878
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational Performance Through The Implementation Of Total Quality
Management (TQM) Empirical Study at PT Asabri (Persero) Branch Offices
702 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
Learning and
Growth
Perspectives
0,787
0,787
0,687
0,618
0,854
0,512
0,525
0,753
0,874
0,768
0,654
0,927
Internal
Business
Process
Perspectives
0,84
0,871
0,727
0,481
0,83
0,599
0,644
0,834
0,643
0,775
0,798
0,729
0,876
Source : SmartPLS 3.0 Data Management results
Based on the results of the fornell larcker criterion test Table 4 shows that the square root of the Average Variance Extracted of each construct
(except the customer focus dimension) is greater than the correlation value between constructs and other constructs in the model. Although
the square root of the Average Variance Extracted customer focus dimension is smaller between other constructs, the analysis continues
because the Customer Focus dimension has met convergent validity.
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
703
c. Reliability Testing
Reliability tests are carried out to determine the level of internal consistency of indicators
in measuring certain latent constructs or variables. Good reliability or questionnaires are
used as reliable and consistent research tools if Cronbach's alpha value is more than 0.7
and composite reliability value is more than 0.70. The statistical results of reliability tests
can be seen in the following table:
Variable
Dimension
Composite Reliability
Transformational Leadership
0,969
Idealized Influence
0,937
Inspirational Motivation
0,953
Intellectual Stimulation
0,961
Individual Consideration
0,942
TQM implementation
0,979
Strategic Planning
0,972
Customer Focus
0,888
Process Management
0,923
Human Resources Focus
0,938
Information and Analysis
0,969
Organizational Performance
0,962
Learning and Growth Perspectives
0,948
Internal Business Process Perspectives
0,929
Customer Perspective
0,910
Financial Perspectives
0,955
2. Structural Model Evaluation (Inner Model)
Structural model testing (inner model) used to test research hypotheses is bootstrapping
technique. Bootstrapping aims to find out the direction of the relationship and the significance of
the relationship of each latent variable. Decision making in PLS-SEM analysis is an accepted
hypothesis if |t-statistic| The resulting bootstrapping test is greater than the one tail t-table which
is 1.645 for a standard error of 5% or the resulting p value is small from 0.05. The following
results of structural model testing or hypothesis testing of this research are contained in the table
as follows:
Table 5 R-squared value (R²)
Endogenous Variables
R-squared (R²)
Criterion
TQM implementation
0,547
Moderate
Organizational Performance
0,851
Tall
Source: SmartPLS.3.0 Data Processing Results
Based on Table 6, the R-squared value of the TQM Implementation variable is 0.547 or in
other words, the magnitude of the variability of the TQM implementation variable which can
be explained by the transformational leadership variable is 54.7%, while the remaining 46.3%
is by other factors outside the model. The R-squared value of the organizational performance
variable is 0.851 or in other words the magnitude of the variability of the organizational
performance variable that can be explained by transformational leadership variables and TQM
implementation is 85.1% while the rest is explained by other factors that are not in the model.
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
704 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
3. Test Hypothesis and Discussion
Structural model testing (inner model) used to test research hypotheses is bootstrapping
technique. Bootstrapping aims to find out the direction of the relationship and the significance of
the relationship of each latent variable. Decision making in PLS-SEM analysis is an accepted
hypothesis if |t-statistic| The resulting bootstrapping test is greater than the one tail t-table which
is 1.645 for a standard error of 5% or the resulting p value is small from 0.05. The following are
the results of structural model testing or hypothesis testing of this study:
Figure 3 Path Diagram t-Statistics Structural Model
Table 6 Hypothesis Testing Results
Hypothesis
Original
Sample
(O)
Sample
Mean
(M)
Standard
Deviation
(STDEV)
T Statistics
(|O/STDEV|)
P Values
Conclusion
H1
Transformational Leadership à
Organizational Performance
0,005
0,044
0,095
0,057
0,477
Rejected
H2
Transformational Leadership à
Total Quality Management
(TQM)
0,740
0,692
0,114
6,503
0,000
Accepted
H3
Total Quality Management
(TQM) à Kinerja Organisasi
0,919
0,889
0,069
13,341
0,000
Accepted
H4
Transformational Leadership à
Total Quality Management
(TQM) à Organizational
Performance
0,680
0,618
0,118
5,741
0,000
Accepted
Source: SmartPLS.3.0 Data Processing Results
The first hypothesis is that transformational leadership has a significant positive effect on
organizational performance, Rejected. This is because based on Table 7 the value of the path
coefficient or original sample is positive 0.005, the t-statistics value is 0.057 ≤ 1.645 and the p-
value is 0.477 ≥ 0.05. The results of this study in accordance with the research of Ogbonna, et.al
(2000) and Putra I.A., et.al (2020) which state that transformational leadership style is not a strong
direct predictor of organizational performance. The application of transformational leadership at
the PT ASABRI (Persero) Branch Office has no effect on organizational performance, especially
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
705
those produced by the millennial generation. This is because the PT ASABRI (Persero) Branch
Office has contextual factors from the nature of the SOEs organizational structure, namely the
existence of bureaucratic administration. Therefore, the rigidity of the bureaucratic routine
restrains the influence of effective SOEs leaders through a performance perspective. Some of the
transformational leadership characters have been found in PT ASABRI (Persero). However, the
character that is not implemented by the leaders thoroughly at the PT ASABRI (Persero) Branch
Office resulting a fluctuations in the performance of millennial employees which affect
organizational performance. Based on their unique criteria, this generation needs leaders who are
able to understand and motivate them to realize organizational goals and personal aspirations
simultaneously.
The second hypothesis, namely transformational leadership, has a significant positive
effect on the implementation of total quality management (TQM), accepted. This is because based
on Table 7 the value of the path coefficient or original sample is positive 0.740, the t-statistics
value is 6.503 > 1.645 and the p-value is 0.000 < 0.05. The results of this study are in accordance
with the research Cho, et.al. (2014), (Bouranta, 2020; Wagimin et al., 2019) which states that the
effectiveness of the leadership style used can affect the implementation of TQM. The application
of transformational leadership at the PT ASABRI (Persero) Branch Office can motivate millennial
employees by realizing the importance of work results, encouraging to prioritize the organization
over personal interests and positioning their needs over the organization at a higher level. On an
ongoing basis, this can support the overall implementation of TQM for employees of its main
branch offices in the millennial generation. Transformational leaders at the PT ASABRI (Persero)
Branch Office who are able to provide recognition and support to employees can optimize the
implementation of TQM within the organization. Transformational leadership characters in the
form of inspirational motivation and idealized influence are the main factors that influence the
millennial generation in implementing TQM optimally. So that the millennial generation's
perception of the importance of implementing TQM make them work according to quality
standards.
The third hypothesis is that the implementation of total quality management (TQM) has a
significant positive effect on organizational performance, Accepted. This is because based on
Table 7 the value of the path coefficient or original sample is positive 0.919, the t-statistics value
is 13.341 > 1.645 and the p-value is 0.000 < 0.05. The results of this study are in accordance
with the research (Abbas & Kumari, 2021; Bhaskar, 2020; Demirbag et al., 2006; Dwiantoro, 2017;
Murdianto et al., 2016; Singh et al., 2018; Terziovski & Samson, 1999; Valmohammadi, 2011) which
states that effective TQM implementation can significantly improve both financial and
operational performance. The implementation of TQM at PT ASABRI (Persero) Branch Offices
plays a role in improving organizational performance. The influence is not only in improving
service quality, but also the use of information obtained from customers to increase customer
satisfaction. In addition, the results of this study also support the statement of Bhaskar, H. L.
(2020) that companies that adopt TQM can perform better than their competitors. The millennial
generation's perception of the importance of implementing TQM encourages them to work to
achieve organizational performance according to the KPIs set by management for each branch
office. The positive influence of TQM implementation on organizational performance can also
motivate the company's top management to engage in better organizational goal planning in
managing its resources to achieve improvements in overall quality, employees, and company
performance.
The fourth hypothesis, namely the implementation of total quality management (TQM)
mediates the indirect influence of transformational leadership on organizational performance, is
accepted. This is because based on Table 7, the path coefficient or original sample value is
positive 0.680, the t-statistics value is 5.741 > 1.645 and the p-value is 0.000 < 0.05. The results
of this study are in accordance with Dwiantoro's (2017) research which states that the application
of TQM practices supported by the right leadership style will be able to improve organizational
performance. The application of good transformational leadership has great potential in
encouraging employees to make more efforts to achieve organizational performance. It is proven
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
706 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
by the indirect effect of transformational leadership on organizational performance through the
implementation of TQM. The perception of millennial employees in implementing TQM will
influence their performance improvement to achieve organizational goals with quality according
to company standards. Although there is no direct influence of transformational leadership on
organizational performance, with the implementation of TQM, the role of transformational
leaders is able to improve organizational performance.
CONCLUSION
The variables used in this study are transformational leadership variables as independent
variables, organizational performance as dependent variables and total quality management
(TQM) as intervening variables. This study uses secondary data obtained from the Human
Resources Strategy Division and primary data obtained through interview and the distribution of
online questionnaires with google form media to millennial employees at PT ASABRI (Persero)
Branch Offices throughout Indonesia. The first hypothesis is that transformational leadership has
a significant positive effect on organizational performance, Rejected. The second hypothesis,
namely transformational leadership, has a significant positive effect on the implementation of
total quality management (TQM), accepted. The third hypothesis is that the implementation of
total quality management (TQM) has a significant positive effect on organizational performance,
Accepted. The implementation of TQM at PT ASABRI (Persero) Branch Offices plays a role in
improving organizational performance. The influence is not only in improving service quality,
but also the use of information obtained from customers to increase customer satisfaction. The
fourth hypothesis, namely the implementation of total quality management (TQM) mediates the
indirect influence of transformational leadership on organizational performance, is accepted.
Based on the research that has been done, it is expected to provide benefits for PT ASABRI
(Persero) in the form of policy implications. This study confirms that transformational leadership
is not a leadership model that reflects leaders at PT ASABRI (Persero) Branch Offices. This can
be seen from the existence of elements of transformational leadership character which are still not
fully implemented by Branch Office Leaders so that employees, especially millennial employees,
are able to achieve the expected organizational performance even without support from leaders.
Although transformational leadership is not a leadership model that reflects leaders ASABRI
(Persero) Branch Offices, the optimization transformational leadership application is still needed
to encourage innovation, especially those originating from millennial employees in order to
achieve continuous improvement through improving service quality by optimizing available
resources.
The implementation of total quality management (TQM) is proven to mediate the effect of
transformational leadership on organizational performance. This means that TQM has become a
quality management control tool at the PT ASABRI (Persero) Branch Office and needs to be
applied consistently. The millennial generation is aware of the importance of implementing TQM
to ensure the service quality of each branch office is in accordance with quality standards. To
achieve continuous improvement, companies need to facilitate employees with
leadershipcharacteristics who are able to become role models in order to encourage innovation at
the branch office level.
REFERENCES
Abbas, J., & Kumari, K. (2021). Examining the relationship between total quality management
and knowledge management and their impact on organizational performance: a dimensional
analysis. Journal of Economic and Administrative Sciences, 39(2), 426–451. Google
Scholar
Agle, B. R., Nagarajan, N. J., Sonnenfeld, J. A., & Srinivasan, D. (2006). Does Ceo Charisma
Matter? An Empirical Analysis Of The Relationships Among Organizational Performance,
Environmental Uncertainty, And Top Management Team Perceptions Of Ceo Charisma.
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
707
Academy of Management Journal, 49(1), 161–174.
https://doi.org/10.5465/amj.2006.20785800 Google Scholar
Al-Dhaafri, H., & Alosani, M. (2021). Integration of TQM and ERP to enhance organizational
performance and excellence: empirical evidence from public sector using SEM. World
Journal of Entrepreneurship, Management and Sustainable Development, ahead-of-
print(ahead-of-print). https://doi.org/10.1108/WJEMSD-12-2020-0170 Google Scholar
Al-Qahtani, N. D., Alshehri, S. S., & Aziz, A. A. (2015). The impact of Total Quality
Management on organizational performance. European Journal of Business and
Management, 7(36), 119–127. Google Scholar
Alsughayir, A. (2014). Human resource strategies as a mediator between leadership and
organizational performance. International Business Research, 7(3), 91. Google Scholar
Anderson, H. J., Baur, J. E., Griffith, J. A., & Buckley, M. R. (2017). What works for you may
not work for (Gen)Me: Limitations of present leadership theories for the new generation.
The Leadership Quarterly, 28(1), 245–260. https://doi.org/10.1016/j.leaqua.2016.08.001
Google Scholar
Androwis, N., Sweis, R. J., Tarhini, A., Moarefi, A., & Hosseini Amiri, M. (2018). Total quality
management practices and organizational performance in the construction chemicals
companies in Jordan. Benchmarking: An International Journal, 25(8), 3180–3205. Google
Scholar
Bass, B., & Avolio, B. (2004). Multifactor Leadership Questionnaire. Manual and Sampler Set.
MindGarden. Inc. Retrieved from Www. Mindgarden. Com. Google Scholar
Bass, B. M. (1999). Two decades of research and development in transformational leadership.
European Journal of Work and Organizational Psychology, 8(1), 9–32. Google Scholar
Bhaskar, H. L. (2020). Establishing a link among total quality management, market orientation
and organizational performance: an empirical investigation. The TQM Journal, 32(6), 1507–
1524. Google Scholar
Bouranta, N. (2020). Does transformational leadership influence TQM practices? A comparison
analysis between manufacturing and service firms. The TQM Journal, 33(3), 706–728.
Google Scholar
Cooper, D. R., & Schindler, P. S. (2006). Metode Riset Bisnis,(terjemahan). Volume I Dan II,
Edisi Sembilan, Penerbit PT Media Global Edukasi, Jakarta. Google Scholar
Davids, I., Appiah, K., Davids, G., & Ofori, F. N. K. (2021). The effectiveness of transformational
leadership: a qualitative-based study on millennial perceptions in South Africa. Archives of
Business Research. Google Scholar
Demirbag, M., Lenny Koh, S. C., Tatoglu, E., & Zaim, S. (2006). TQM and market orientation’s
impact on SMEs’ performance. Industrial Management & Data Systems, 106(8), 1206–
1228. Google Scholar
Dwiantoro, F. I. (2017). Pengaruh Gaya Kepemimpinan Transformasional dan Transaksional
terhadap Kinerja Organisasi melalui Praktik TQM pada PT Pelayaran Nasional Indonesia
Cabang Surabaya. Jurnal Ilmu Manajemen Universitas , 5(2), 1–14. Google Scholar
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
708 Return: Study of Economic And Business Management, Vol 2 (7), July 2023
Ejere, E. I., & Abasilim, U. D. (2013). Impact of transactional and transformational leadership
styles on organisational performance: Empirical evidence from Nigeria. The Journal of
Commerce, 5(1), 30–41. Google Scholar
Ferdinand, A. (2014). Metode penelitian manajemen: Pedoman penelitian untuk penulisan skripsi
tesis dan disertasi ilmu manajemen. Google Scholar
Ghozali, I. (2014). Structural Equation Modelling (SEM): Metode Alternatif dengan Partial Least
Square (PLS). Universitas Diponegoro. Google Scholar
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant
validity in variance-based structural equation modeling. Journal of the Academy of
Marketing Science, 43, 115–135. Google Scholar
Kaplan, R. S. (1992). The balanced scorecard measures that drive performance. Harvard business
review. Google Scholar
Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard–Translating Strategy into Action.
Harvard Business School Press, Boston, Massachusetts. President and Fellows of Harvard
College. Google Scholar
Kaplan, R. S., & Norton, D. P. (2005). The balanced scorecard: measures that drive performance
(Vol. 70). Harvard Business Review US. Google Scholar
Khalfallah, M., Ben Salem, A., Zorgati, H., & Lakhal, L. (2021). Innovation mediating
relationship between TQM and performance: cases of industrial certified companies. The
TQM Journal. https://doi.org/10.1108/TQM-01-2021-0019 Google Scholar
Murdianto, R., Oemar, Y., & Indarti, S. (2016). Pengaruh Kepemimpinan Dan Budaya Organisasi
Terhadap Kinerja Organisasi Dengan Total Quality Management Sebagai Variabel
Intervening Pada PT. Gandaerah Hendana S & G Biofuel Kabupaten Pelalawan. Jurnal
Tepak Manajemen Bisnis, 8(1), 149–163. Google Scholar
Nazarian, A., Soares, A., & Lottermoser, B. (2017). Inherited organizational performance? The
perceptions of generation Y on the influence of leadership styles. Leadership &
Organization Development Journal, 38(8), 1078–1094. Google Scholar
Portney, L. G., & Watkins, M. P. (2009). Foundations of clinical research: applications to
practice (Vol. 892). Pearson/Prentice Hall Upper Saddle River, NJ. Google Scholar
Putra, I. A., Rofiaty, R., & Djumahir, D. (2020). Investigating the influence of entrepreneurial
orientation and transformational leadership on organisational performance with the
mediation of innovation: evidences from a state-owned electricity company in Indonesia.
International Journal of Innovation Management, 24(07), 2050085. Google Scholar
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. john
wiley & sons. Google Scholar
Sik Cho, Y., & Y. Jung, J. (2014). The verification of effective leadership style for TQM: A
comparative study between USA-based firms and China-based firms. International Journal
of Quality & Reliability Management, 31(7), 822–840. Google Scholar
Millennial Employees Perception of The Influence of Transformational Leadership on Organizational
Performance Through The Implementation Of Total Quality Management (TQM) Empirical Study at PT
Asabri (Persero) Branch Offices
Return: Study of Management, Economic and Bussines, Vol. 2 (7), July 2023
709
Singh, V., Kumar, A., & Singh, T. (2018). Impact of TQM on organisational performance: The
case of Indian manufacturing and service industry. Operations Research Perspectives, 5,
199–217. Google Scholar
Terziovski, M., & Samson, D. (1999). The link between total quality management practice and
organisational performance. International Journal of Quality & Reliability Management,
16(3), 226–237. Google Scholar
Valmohammadi, C. (2011). The impact of TQM implementation on the organizational
performance of Iranian manufacturing SMEs. The TQM Journal, 23(5), 496–509. Google
Scholar
Wagimin, M., Elisa, K., Juhary, A., & Vembri, N. H. (2019). The effect of leadership on employee
performance with Total Quality Management (TQM) as a mediating variable in Indonesian
petroleum companies: A case study. International Journal of Integrated Engineering, 11(5),
180–188. Google Scholar
