317 American Journal of Economic and Management Business e-ISSN: 2835-5199 Vol. 4 No. 4 April 2025 The Influence of Leadership Strategy, Talent Management, Employee Satisfaction and Work Stress on Employee Performance: an Empirical Study In South Magelang District Dwi Budiningrum1, Ifah Rofiqoh2 Universitas Teknologi Yogyakarta, Indonesia1,2 Email: dwibudiningrum@gmail.com1, ifah.rofiqah@uty.ac.id2 Abstract This study aims to examine the influence of leadership strategy, talent management, employee satisfaction, and work stress on employee performance in South Magelang District. Using a quantitative approach and survey method, data were collected from 100 employees using questionnaires. The data were analyzed using the Partial Least Squares (PLS). method. The results reveal that talent management positively and significantly affects employee performance, indicating that effective management of employee talent leads to better performance. Conversely, work stress negatively impacts employee performance, suggesting that higher levels of stress result in lower performance. Leadership strategy and employee satisfaction did not show significant direct effects on performance in this model; however, they still play a role in creating a conducive work environment. The model accounted for 26.6% of the variation in employee performance, highlighting that other factors outside the model also influence performance. The findings contribute to the development of human resource management strategies aimed at improving employee performance in the public sector, particularly at the sub-district level. Keywords: Leadership Strategy; Talent Management; Employee Satisfaction; Work Stress; Employee Performance INTRODUCTION In the era of public service transformation that increasingly demands efficiency, effectiveness, and accountability, the quality of employee performance is one of the key factors for the success of government organizations. An organization can be defined as a social unit that is consciously coordinated, has identifiable boundaries, and operates continuously in order to achieve predetermined goals (Agustin et al., 2019; Astria et al., 2015; Hasyim, 2022; Nisyak & Triyonowati, 2016; Reynilda, 2022). The sub-district as one of the technical implementation units at the regional level has a strategic role in implementing various programs and public policies. Therefore, it is important to understand the factors that affect the performance of employees in the sub-district, especially in South Magelang District. One of the important factors that affect employee performance is leadership strategy. Leaders who are able to formulate and implement effective leadership strategies can create a conducive work environment, motivate subordinates, and direct human resources to achieve American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 318 organizational goals. In addition, the implementation of talent management is also an important issue in the context of employee management. Good talent management allows organizations to identify, develop, and retain employees who have high potential and competence. Employee satisfaction with their work also plays an important role in increasing employee productivity and loyalty. A person's morale increases when he obtains satisfaction from his work, considering that job satisfaction is an important element in supporting the success of the company's goals (Lesmana et al., 2023; Maulyan et al., 2021; Nabawi, 2019; Rijasawitri & Suana, 2020; Rulianti & Nurpribadi, 2023). The majority of employees are satisfied with the conditions of the work environment so that this level of satisfaction makes them feel comfortable in carrying out their duties. A work environment that is equipped with good communication is closely related to increasing employee satisfaction (Darmawan et al., 2020; Mardikaningsih, 2021; Sinambela & Mardikaningsih, 2022). Employees who feel satisfied tend to show higher commitment and have a positive work ethic. Conversely, high levels of work stress can negatively impact performance, both individually and organizationally. Work stress is an individual's reaction to perceived stress, both physically and psychologically, that comes from internal and external factors. This stressful condition can lead to dissatisfaction at work and have an impact on decreased performance (Ardanti & Rahardja, 2017; Hadi et al., 2021; Hidayat et al., 2024; Kodri et al., 2018; Marsoit et al., 2017). Unhandled work stress can reduce motivation, cause emotional fatigue, and disrupt the quality of public services. Generally, stress will increase when a person faces problems in a row. This situation shows that high levels of employee stress actually do not need to occur and can be prevented. Managing dysfunctional stress appropriately will help improve the operational effectiveness of the organization (Carlson et al., 2011; Deham et al., 2023; Greenhaus & Parasuraman, 2014; Takahashi & Takahashi, 2010; Tirtayasa & Manihuruk, 2020). This study aims to empirically examine the influence of leadership strategy, talent management, employee satisfaction, and work stress on employee performance in South Magelang District. The results of this study are expected to contribute to the development of more targeted human resource management policies in order to improve the quality of public services at the sub-district level. This study is relevant to several previous studies that explored factors influencing employee performance. Naufal et al. (2023) in their research titled "Talent Management and Its Impact on Organizational and Employee Performance" highlighted the importance of talent management in improving organizational and individual performance, which aligns with the findings of this study regarding the effect of talent management on employee performance. Similarly, Rauf & Syam (2022) in their study "The Influence of Strategic Leadership and Job Satisfaction on Employee Performance" also discuss the relationship between strategic leadership, job satisfaction, and employee performance, supporting the hypothesis in this research about the impact of leadership on performance. Additionally, research by Tirtayasa & Manihuruk (2020) titled "The Influence of Work Stress, Work Motivation, and Work Environment on Employee Work Enthusiasm" is also relevant, as it highlights the negative impact of work stress on employee performance, which was also found in this study. American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 319 The uniqueness of this research lies in its approach of integrating four key factors— leadership strategy, talent management, job satisfaction, and work stress—to analyze employee performance at the local government level, specifically in South Magelang District. While previous studies have often examined these factors separately or in different sectors, this research attempts to combine all four into one framework, providing a novel contribution to the existing literature, particularly in the context of the public sector, which has often been overlooked. The aim of this study is to analyze the influence of leadership strategies on employee performance in South Magelang District, assess the impact of talent management on performance, evaluate the role of job satisfaction in improving employee performance, and investigate the effect of work stress on performance. Additionally, this research seeks to determine the simultaneous impact of all four factors on employee performance in the region. The practical contributions of this research are twofold. Academically, it enriches the literature on human resource management, particularly in the public sector, by offering new insights into the factors influencing employee performance at the local government level. Practically, the findings of this study can serve as a reference for policymakers and managers in developing more effective strategies to enhance employee performance through better management of factors such as leadership, talent management, job satisfaction, and work stress. Moreover, the results can provide policy recommendations useful for improving productivity and the quality of public services in South Magelang District. METHOD This study employs a quantitative approach with a survey method to objectively examine the relationships between variables using numerical data obtained from questionnaires. The primary objective of using a quantitative approach is to analyze the variables systematically and determine the strength of their relationships based on statistical evidence. The population for this study consists of all employees in the South Magelang District. A purposive sampling technique was applied, with the inclusion criterion being that respondents must have worked for at least one year in the district. A total of 100 respondents were successfully selected for the study. Primary data were collected through questionnaires that were carefully constructed based on the indicators for each research variable. The questionnaires utilized a five- point Likert scale to measure the respondents' level of agreement with the statements presented. This allows for a clear understanding of their opinions and perceptions regarding the factors influencing employee performance. The key variables in this research include: 1. Leadership Strategy (LS) : The ability of leaders to guide, motivate, and create a supportive work environment that encourages employees to perform at their best. 2. Talent Management (TM) : The organization's efforts to identify, develop, and retain talented employees to ensure a skilled workforce. American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 320 3. Employee Satisfaction (ES) : The level of individual satisfaction with various aspects of their work, such as compensation, work relationships, and opportunities for personal and professional growth. 4. Work Stress (WS) : The psychological pressure felt by employees when the demands of their jobs exceed their capacity to cope effectively. Employee Performance (EP) : The degree of success employees achieve in fulfilling their job responsibilities and meeting organizational goals. Data analysis was performed using the Partial Least Squares (PLS) method, which was facilitated by the SmartPLS software. To ensure the robustness of the analysis, several tests were conducted, including validity and reliability testing, hypothesis testing, and the examination of structural models. The validity and reliability of the model were assessed using the outer loading values, Average Variance Extracted (AVE), and Composite Reliability (CR). Additionally, the R- square test was used to measure the extent to which the independent variables contribute to explaining the variation in the dependent variable (employee performance). Finally, significance testing was conducted using t-statistics and p-values to validate the relationships between the variables. This approach ensures a comprehensive understanding of the factors affecting employee performance and provides a solid foundation for the interpretation of the research findings. RESULT AND DISCUSSION The results of the hypothesis test showed that the Leadership Strategy (SK) variable had a positive effect on Employee Performance (KR) with a coefficient value of 0.211. However, a p- value of 0.067 indicates that this relationship is not significant at a significance level of 5%, but is acceptable at a significance level of 10%. This means that the better the leadership in the organization, the employee performance tends to increase, even though the power of influence is not very strong. Furthermore, Talent Management (MT) also showed a positive influence on Employee Performance with a coefficient of 0.234. A p-value of 0.100 indicates that the effect is not significant at the 5% level, but significant at the 10% level. This implies that effective talent management has the potential to improve employee performance, although the level of significance is relatively moderate. In contrast to the previous variable, Employee Satisfaction (KP) showed a very small positive influence on Employee Performance, with a coefficient of 0.105 and a p value of 0.426. This value is far above the significance threshold, so it can be concluded that work stress does not have a significant effect on employee performance in the context of this study. Meanwhile, Work Stress (ST) has a negative effect on Employee Performance with a coefficient of -0.198. A p-value of 0.066 indicates that this effect is not significant at the 5% significance level, but is significant at the 10% level. Thus, the higher the stress level felt by employees, the lower their performance tends to decrease, although this effect can only be accepted at a looser level of significance. American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 321 Table 1. Hypothesis Result Hipotesis Relation Result H1 Decree has a positive effect on KR Insignificant at 5%, significant at 10% H2 MT has a positive effect on KR Insignificant at 5%, significant at 10% H3 KP has a positive effect on KR Insignificant H4 ST has a negative effect on KR Insignificant at 5%, significant at 10% Theoretical Implications The results of this study contribute to the development of human resource management theory, especially related to factors that affect employee performance in the public sector. The findings that Leadership Strategy (SK) and Talent Management (MT) have a positive effect on Employee Performance (KR) at a significance level of 10% support the theory of organizational behavior that states that an effective leadership style and good talent management play a role in improving performance. On the other hand, results showing that Employee Satisfaction (KP) has no significant effect on employee performance enriches the literature by emphasizing that the impact of employee satisfaction can vary depending on the organizational and individual context. In addition, the negative influence of Work Stress (ST) on employee performance reinforces previous theories that excessive stress can reduce work effectiveness. Practical Implications Practically, the results of this study provide several recommendations for managers of public organizations. First, it is important for organizational leaders to continue to improve the quality of leadership through leadership training and coaching programs, given their positive influence on employee performance. Second, organizations need to develop a sustainable talent management system, for example through employee potential identification and development programs, to encourage performance improvement. Third, organizational management must pay more attention to work stress factors in the work environment. Efforts such as implementing work- life balance policies, providing counseling facilities, and managing workload can help reduce employee stress levels and maintain optimal performance. Table 2. Tabel Outer loadings Original sample (O) Sample mean (M) Standard deviation (STDEV) T statistics (|O/STDEV|) P values KP1 <- KP 0.750 0.738 0.081 9.225 0.000 KP2 <- KP 0.732 0.739 0.064 11.430 0.000 KP3 <- KP 0.637 0.617 0.130 4.903 0.000 KP4 <- KP 0.708 0.698 0.089 7.988 0.000 American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 322 KP5 <- KP 0.687 0.665 0.114 6.014 0.000 KR1 <- KR 0.706 0.707 0.079 8.904 0.000 KR2 <- KR 0.866 0.862 0.034 25.539 0.000 KR3 <- KR 0.785 0.785 0.078 10.129 0.000 KR4 <- KR 0.778 0.776 0.047 16.677 0.000 KR5 <- KR 0.739 0.740 0.060 12.342 0.000 MT1 <- MT 0.472 0.470 0.101 4.683 0.000 MT2 <- MT 0.751 0.737 0.079 9.497 0.000 MT3 <- MT 0.811 0.810 0.044 18.277 0.000 MT4 <- MT 0.761 0.751 0.064 11.938 0.000 MT5 <- MT 0.887 0.885 0.032 27.836 0.000 SK1 <- SK 0.755 0.746 0.103 7.351 0.000 SK2 <- SK 0.797 0.796 0.070 11.415 0.000 SK3 <- SK 0.769 0.771 0.059 13.038 0.000 SK4 <- SK 0.819 0.813 0.081 10.094 0.000 SK5 <- SK 0.819 0.813 0.081 10.094 0.000 ST1 <- ST 0.825 0.786 0.125 6.607 0.000 ST2 <- ST 0.881 0.849 0.124 7.089 0.000 ST3 <- ST 0.792 0.763 0.124 6.395 0.000 ST4 <- ST 0.667 0.623 0.166 4.014 0.000 ST5 <- ST 0.673 0.630 0.167 4.025 0.000 Indicator Validity Test The validity of the indicators in this study was evaluated through the outer loading value of each indicator against the measured construct. Based on the results of the analysis, all indicators have an outer loading value above 0.6 which means that each indicator has met the criteria for convergent validity. The following is an explanation of the results of outer loading for each variable: 1. Employee Satisfaction (KP): The outer loading value for KP1 to KP5 indicators is in the range of 0.637 to 0.750. All indicators showed significant t-statistical values (p < 0.05), indicating that each indicator was valid in measuring employee satisfaction constructs. 2. Employee Performance (KR): The KR1 to KR5 indicator has an outer loading value between 0.706 to 0.866. All t-statistic values are very high and significant, which strengthens the validity of the indicator in representing the Employee Performance construct. 3. Talent Management (MT): The outer loading value of MT1 to MT5 indicators varies from 0.472 to 0.887. Although the MT1 indicator has the lowest value (0.472), the significant t-statistic value still indicates that this indicator is valid in the model. Most other indicators show excellent measurement power. American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 323 4. Leadership Strategy (SK): Indicators SK1 to SK5 have an outer loading value between 0.755 to 0.819, with a very significant t-statistic. This indicates that all SK indicators are valid in measuring the level of employee satisfaction felt by employees. 5. Work Stress (ST): The outer loading value for the ST1 to ST5 indicator ranges from 0.667 to 0.881. All indicators have significant t-statistic, indicating that all items are valid in representing stress variables. Thus, all indicators in this study are declared valid and can be used for further structural model analysis. Table 3. R-square Variable R-square R-square Adjusted KR (Employee Performance) 0,3009 0,2715 R-Square Test Results: The R-square value (R²) for the Employee Performance (KR) variable of 0.3009 indicates that the variables Leadership Strategy (SK), Talent Management (MT), Employee Satisfaction (KP), and Work Stress (ST) are able to explain 30.09% variation in Employee Performance.Meanwhile, the Adjusted R-square value of 0.2715 takes into account the number of predictors in the model, and still shows a fairly strong contribution. Based on criteria (Chine, 1998), The R² value of 0.26 to 0.50 is categorized as moderate, so this model has a fairly good predictive ability in explaining employee performance in public organizations. Table 4. Reliability and Validity Test Table Konstruk Cronbach’s Alpha Composite Reliability (rho_c) AVE SK(Strategi Kepemimpinan) 0.759 0.830 0.496 KR (Kinerja Pegawai) 0.835 0.883 0.603 MT(Manajemen Talenta) 0.795 0.861 0.562 KP (Kepuasan Pegawai) 0.852 0.894 0.628 ST (Stres Kerja) 0.836 0.880 0.596 American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 324 Reliability and Validity Test Results 1. Construct Reliability Test The reliability of the construct is measured using Cronbach's Alpha and Composite Reliability (CR) values. A construct is declared reliable if Cronbach's Alpha and Composite Reliability values are above each 0,70 (Hair, Black, Babin, & Anderson, 2010, 2014, 2017) (Hair, Hult, Ringle, & Sarstedt, 2017, 2021) Based on the results of the analysis: a. All constructs, namely Leadership Strategy (SK). , Talent Management (MT). , Employee Satisfaction (KP). , Work Stress (ST). , and Employee Performance (KR). , have a Cronbach's Alpha value above 0.70, so all constructs are declared reliable. b. The Composite Reliability (CR). value for all constructs also exceeded 0.70, reinforcing the conclusion that all constructs in this model are reliable. 2. Convergent Validity Test Convergent validity is tested through an Average Variance Extracted (AVE). value, with the standard AVE value being more than 0.50. Based on the test results: a. The KR, MT, KP, and ST variables have AVE values above 0.50, which means they meet the convergent validity criteria. b. The SK variable has an AVE value of 0.496, slightly below the limit of 0.50. However, given the high value of Composite Reliability, the indicator on the SK variable can still be considered valid for further analysis purposes (Henseler, Ringle, & Sarstedt, 2009). Table 5. Reliability and Validity Konstruk Cronbach’s Alpha Composite Reliability AVE Information Leadership Strategy (SK). 0.759 0.830 0.496 Reliabel, valid secara moderat Employee Performance (KR). 0.835 0.883 0.603 Reliabel dan valid Talent Management (MT). 0.795 0.861 0.562 Reliabel dan valid Employee Satisfaction (DG). 0.852 0.894 0.628 Reliabel dan valid Work Stress (SK). 0.836 0.880 0.596 Reliabel dan valid Instrument Test Conclusion Based on the results of the tests that have been carried out, it can be concluded that all of these research instruments have met the required reliability and validity criteria. 1. Reliability Test: The entire construct has Cronbach's Alpha and Composite Reliability values above 0.70. This shows that the instrument used in this study is reliable and able to measure the construct in question consistently. American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 325 2. Convergent Validity Test: The results of the Average Variance Extracted (AVE). test show that most constructs have an AVE value above 0.50, which means it meets the convergent validity criteria. Although the Leadership Strategy (SK). variable has an AVE value slightly below the 0.50 limit, a high Composite Reliability value still indicates that the indicators in the construct are valid and acceptable for further analysis. 3. R-Square Test: The R-square value of 0.3009 for the Employee Performance (KR). variable indicates that the variables of Leadership Strategy, Talent Management, Employee Satisfaction, and Work Stress are able to explain 30.09% variation in Employee Performance. Based on criteria (Chine, 1998), This value is included in the medium category, showing that this research model has sufficient predictive capabilities. 4. Uji Path Coefficient: The results of the pathway analysis showed that Leadership Strategy and Talent Management had a positive effect on Employee Performance, even though the significance of the relationship was at the level of 10%. On the other hand, Employee Satisfaction does not show a significant influence, whereas Work Stress has a negative influence on Employee Performance. Overall, this research instrument has met the requirements for reliability and validity, and the model used is acceptable to test the relationship between variables in the study. The results of this study show that leadership strategies and talent management have a positive effect on employee performance, even at a significance level of 10%. These findings are in line with research conducted by Rauf & Syam (2022), who found that strategic leadership contributes to improving employee performance in the public sector. In addition, the results regarding the influence of talent management are also consistent with research Naufal et al. (2023), which shows that effective talent management can increase employee productivity and loyalty. On the other hand, the results of this study are different from the findings (Sinambela & Mardikaningsih, 2022). which place employee satisfaction as the dominant factor in improving performance, while in this study, employee satisfaction did not have a significant effect. This research has several limitations. First, the scope of the study only covers employees in one sub- district, so the results cannot be generalized to a wider area. Second, the research method uses a quantitative approach so that it has not delved deeper into contextual factors that may affect employee performance. In addition, the use of self-reported survey techniques can cause subjectivity bias in respondents' answers. CONCLUSION This study aims to analyze the influence of leadership strategies, talent management, employee satisfaction, and work stress on employee performance in South Magelang District. Based on the results of the analysis using the Partial Least Squares (PLS). method, several American Journal of Economic and Management Business Vol. 4 No. 4 April 2025 326 important findings were obtained: Talent Management has a positive and significant influence on employee performance, meaning that the better the organization manages employee talent, the higher the performance produced. Work Stress has a significant negative effect on performance, as employees who experience high levels of stress tend to show decreased performance. Leadership strategy and Employee Satisfaction did not show a significant direct influence on performance in this model, yet both variables still contribute to forming a conducive work atmosphere. 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