Achieving Organizational Prosperity through
Employee Motivation and Retention by Using Strategic HRM Practices in
The distinctive features of HRM across companies with different country origins and cultural values influence on the HR activities of the companies. This influence has translated into the HR activities that show some commonalities and many differences in enhancing employee organizational linkage to achieve organizational prosperity. While focus on competitive pay packages to attract and retain talented cadres is clearly effective in manifesting job motivation, complimentary strategic HR practices are profoundly important in reducing staff turnover. The deployment of the sophisticated techniques of complementary HR practices that well integrate individual and organizational needs may, therefore, prove to be an effective approach to the enhancement of employee organizational linkage, and hence, staff retention and job motivation. Organizational prosperity can be achieved through the combination of assessment and a close match of work values in staff selection, competitive performance based pay packages, customized fringe benefits, developmental and cross functional training, fair and transparent PA, and performance based promotion. If the local companies intend to create a competitive edge through a more committed workforce, they may be encouraged to consider refocusing on training.
Human resources (HR) are the most important elements of an organization (Gerhart & Milkovich 1990, Pfeffer 1998). Moreover, the continuing prosperity of a firm is likely to be enhanced by employees who hold attitudes, value and expectations that are closely aligned with the corporate vision (Borman & Motwidlo 1993, Spector 1997, Cable & Parsons 2001, Feldman 2003). Hiring capable people is an attractive point of departure in the process, but building and sustaining a committed workforce is more likely to be facilitated by the employment of sophisticated human resource management (HRM) infrastructures (Schuler & Jackson 1987, Beechler, Bird & Raghuram 1993). HRM policies and practices can be strategically designed and installed to promote desirable employee outcomes, which include the enhancement of the in role and extra role behaviors of employees. Despite such costly investments, corporations are continually searching for techniques to improve and cement the linkage between employees and their organizations.
Weak employee organizational linkages are often displayed as the phenomenon of turnover. Indeed, people are likely to job hop to obtain better monetary rewards and career development opportunities. However, traditional approaches that rely heavily on competitive monetary rewards often have limited success in staff retention and job motivation in the long run. This limitation has brought practitioners to consider, along with the facilitation of sophisticated HRM infrastructures, other techniques to enhance employee attachment towards their organization. With proper implementation, these techniques often facilitate a more committed workforce. This effect can be achieved through the enhancement of in role. The form of organizational attachment and in role behaviors, the organizational commitment that psychologically characterizes an employee’s relationship with the organization for which he or she works, has implications for whether or not an employee will choose to remain with the organization. Past research found that organizations with strong employee attachment tend to have lower turnover or intention to leave than would those with weak employee attachment. Organizational citizenship behavior (OCB), a form of extra role behavior and reciprocation of fair treatment by employees, is considered as part of work related activities performed by employees that contributes to organizational prosperity, and yet, are beyond the regular scope of job descriptions and contractual sanctions or incentives (Organ 1990). Past work found fair management of the reward distribution and procedures in an organization would foster employees’ intention to display OCB (Organ & Konovsky 1989), and further enhance the employees’ intention to stay with the current firm (Carsten & Spector 1987).
The issues of staff retention and job motivation have continued to plague organizations in Malaysia. Annual surveys by Malaysian Employers Federation (MEF 2004, 2005) report that the annual labor turnover rates for 2003 and 2004 were high, approximately 17 per cent and 16 per cent respectively. Considering the need for HRM to address low organizational linkages to motivate staff and retain them, and that multinational corporations (MNCs ) tend to introduce different home country practices to efficiently manage and control local operations, this study compares and contrasts how the strategic HRM activities from different country origins are implemented in Malaysian companies to motivate and retain talented cadres. This study also discusses the application aspects of well integrated HRM practices. Also, these MNCs create huge employment and skill enhancement opportunities in Malaysia. In addition, senior management of various industries reveals that the personal care industry is ideal for given its competitive nature in which the labor turnover rate is high and the employees are highly mobilized.
This article will focus on the recruitment and selection, salary and compensation, fringe benefits, training and development, and performance appraisal (PA) system, and promotion and succession planning. Its also illustrate other aspects of the well integrated HRM practices of these organizations in enhancing the in role and extra role behaviors of the employees. The findings will be discussed to highlight the distinctive challenges and HRM implications important to achieving organizational prosperity in Malaysia.
BACKGROUNDS OF HRM IN MALAYSIA
Malaysian HR practices, systems, and regulations are largely influenced by the British colonization experience of the nineteenth century. It is commonly viewed that HR practices of Malaysia are the artifacts derived from an integration of Western and indigenous HR practices. Hirano (1991) categorized Malaysian HR practices into two mainstreams, namely British oriented values and ethnic oriented values. It is found that companies were managed either in more of the British or the indigenous way. Other research describes Malaysians as being money oriented and inclined to job hop, with little hesitation for better financial offers (Kawabe 1991). This tendency is traced back to the previous proactive introduction of Western management and education systems. In addition, the increased convergence of work related values and the expectations of Malaysian overseas graduates quicken the absorption of new Western ideas and reshape the value systems of Malaysians (Sheppard 2001). Evidence shows that a seniority emphasis in the reward system is weakening. Similarly, promotion based on seniority as a reward for loyalty is replaced with a performance and merit system. It is common that training expenses is the first company facility to be curtailed in times of budget restraint. This reduction in staff service is particular in those HR departments that are administrative in nature.
Malaysian firms often feel that it is too costly to train employees beyond the required basic skills. This feeing is partly attributable to the general notion among Malaysian firms that employees should shoulder training beyond the contractual scope of work. These firms also tend to look at developmental training as a threat to staff retention (Yong 1996). Such reluctance may also be largely due to the need to offer better pay packages given that training enhances job mobility. The reluctance of Malaysian firms in human development led the Malaysian government to intervene to promote skills training. Hence, a levy grant system was introduced in 1993 with the purpose of providing financial assistance to defray part of the training costs undertaken by employers. Manufacturing firms are now required to contribute one per cent of payroll to this training fund. Although the role of the HR department and its importance are gradually expanding to broader perspective in many of Malaysian firms, the general notion is that the HR department still plays merely an administrative role. However, some progressive Malaysian firms, which undertook a genuine effort to adopt Western HRM practices, have recognized the strategic importance of the HR department, evolving from a focus on employee welfare to one that emphasizes both human development and optimal productivity.
Compared with MNCs from other countries, Japanese MNCs have a strong tendency to transfer their parent country’s HRM practices, which are called the ‘Japanese-style HRM’, and to control their local subsidiaries through the overseas assignment of parent country expatriates (Peterson, Napier & Shim 1996). It is generally known that Japanese MNCs are largely group oriented, and emphasise harmonious work relationships and teamwork. They also tend to adopt culturally distinctive HRM practices to elicit the employee’s sense of loyalty and commitment to their organisations. Under the paternalistic management pay and promotion systems decisions have traditionally been based principally on age and seniority, rather than on job classification or performance. Although this approach helped strengthen the intention to stay (Befu & Cernosia 1990), evidence suggests that the importance of seniority has declined in pay and promotion (Clark & Ogawa 1992, Morishima,1992). Efforts such as replacing seniority with merit were made to decrease the emphasis on seniority as being the main criteria for salary increase. This change is partly due to the economic slump and the elevated labor costs of seniority practices (Mroczkowski & Hanaoka 1989).
In addition, the younger Japanese employees may be changing towards a more individualistic orientation. Japanese firms invest heavily in training employees (Hashimoto 1990, Mueller 1992). Apart from equipping employees with skills, training also integrates employees in the firms through socialisation and the immersion of organisational culture (Pucik 1984). In contrast, Western MNCs reward performance, not seniority (Mroczkowski, Linowes & Hanaoka 1992). Pay is contingent on performance and the performance reward tie is strong and mainly individual based. This nature of the reward system reflects HRM practices that are close to their individualistic national values in motivating employees for superior performance (Hofstede 1980).
Monetary rewards are generally integrated with the benefits, job contents, and prestige rewards to form attractive compensation packages. Benefits are extensive in the United States (U.S.), but are often less salient to employees than pay. This is because U.S. employees generally consider most benefits as entitlements. Promotion decisions are also based on capability and merit (Mroczkowski, et al.1992). High performers are identified and given extra attention and training for succession planning. However, training can also be a punishment for poor performance (Von Glinow & Chung 1989). Western MNCs tend not to hesitate in terminating poor performing employees given the economic nature of the employment contract. In short, the Western, and particularly U.S. management systems are characterised by high individualism, impersonality in relationships, emphasis on pay as a main motivator (money oriented), and high inter firm mobility (Chang 1989, Zhuang 1992).
MAJOR PRACTICES HRM IN MALAYSIA
In Malaysia the major practice of HRM activities are recruitment and selection, salary and compensation, fringe benefits, training and development; and performance appraisal (PA) systems, as well as promotion and career advancement.
Recruitment and Selection
In Malaysia there is strong evidence reveals there are striking differences in the implementation style of a hiring exercise, in particular, between the foreign and the local MNCs . The Western MNCs in this study employ newspaper advertisements and university qualifications as the medium to recruit talented cadres. These companies facilitate the hiring exercise by placing a great emphasis on the person and organization (PO) fit. Local firm highly considers how the personality and the characteristics of a potential recruit may fit in well with its organizational policy and climate. For instance, this company screens job candidates to gauge their work enthusiasm and compensation expectations. In addition, some of the local firms facilitate the staffing exercise with a set of clear selection criteria. Indeed, the HR personnel work closely with their functional managers in setting selection criteria (i.e., trainability, required skills and competency). While these Western MNCs have ‘deep pockets’ that enable aggressive staffing and poaching, they are particularly careful in selecting job candidates who seek employment at Malaysian local firms due to a mismatch of work values that may lead to high hiring failure.
The Japanese MNC , firms, mainly employs newspaper advertisements, university qualification, and word of mouth as the medium of recruitment. This company previously practiced the traditional hiring policies of the headquarters in Japan. Under the traditional practice, the firm previously employed only novice and unspecialized graduates, and offered an unattractive base salary. With the adoption of Western management systems, the firm started to ease its hiring strategy by considering the deployment of experienced middle aged cadres. This Japanese MNC also started to emphasize the PO fit in the selection process. In addition, the HR department began to work closely with the departmental head to set the selection criteria. The new hiring strategy is a departure from the seniority systems in which work experience is valued before entry, and the base salary is competitive with the market rate.
Compared to the aforementioned foreign MNCs in Malaysia, the two local MNCs , local firms place somewhat less attention on hiring practices to attract and retain talented cadres. This is because the talented cadres in Malaysia seem to gravitate to foreign owned firms, including Japanese, European, and U.S. MNCs, in consideration of their attractive employment packages. Local firms mainly recruit people through newspaper advertisements. These local MNCs are also different from foreign MNCs in that they emphasize person and job (PJ) fit, a congruence between the demands of the job and the needed skills, knowledge and abilities of a job candidates (Edwards 1991). Based on the various interview findings and evaluation, it is understood that these local companies have little notion of selection criteria. This may be a strong factor in the sole emphasis of the PJ fit that further allows the functional manager to assume full responsibility in the selection decision. In summary, the influence of the parent company values and practices are very noticeable when observing their distinctive recruitment and selection strategies.
Salary and Compensation
Salary dang compensation making meaningful distinctions in pay increase to reward high and low performers. In addition, Malaysian firm do not furnish blanket pay increase, nor do they reward non performers. The foreign MNCs generously reward average and above employees, ranging from a medium to high degree of difference. Most of the companies offer median quartile range rewards. Japan MNCs endeavors to motivate and retain talented cadres by strongly differentiating the salary increase for average and excellent performance. Besides rewarding past performance, this strategy helps to motivate future performance. However, the Anglo Dutch company structures less incentive differentiation between non and poor performers. Apparently, it is the corporate intent to instill some form of pressure on poor performing employees. Similar to Japan MNCs and Europe MNCs also substantially differentiates reward distribution according to performance rankings. Local MNCs previously implemented seniority based reward systems. Exacerbated by a change of socio economic values, consequently, this traditional system resulted in a below market salary, perceived unfairness, and demoralized employees.
Local MNCs adopted PFPS given that the intended motivation and retention strategies were complicated by more traditional practice. This new scheme introduced a large differentiation from average to excellent performance levels. Practices PFPS, narrowly fixes the percentage of pay increase for poor and excellent performers. In other words, Japan MNCs focuses more on the motivation and the retention effort for average and good performers, given the medium and high degrees of variance in pay increase. A further contrast is the pay increase structure of the highly family managed and cost sensitive. This company has a structural design of pay increase that depicts narrow and even an incremental spread of pay increase across all degrees of performance, indicating that the policy is to give equal attention, or priority, on each performance level.
HRM practice in Malaysia revealed that benefit practices are extensive in the foreign companies, offering equally attractive perks that appeal to different groups of employees (i.e., senior, younger and newer staff across different hierarchical levels). A more interesting finding was that these foreign MNCs responded to changing social values by redesigning the fringe benefits. Redesign was also undertaken on the other traditional fringe benefits (i.e., housing subsidy, retirement scheme and insurance coverage) that were becoming less attractive amongst the highly mobilized younger workforce, and who prefer real time monetary rewards.
These social changes have prompted the Western MNCs to practise flexible benefit schemes to better meet the specific needs of the employees. For instance, these foreign MNCs extend the medical benefit to the immediate family of the employees. Western MNCs compensated new entrants in 2001 by replacing the housing subsidy with higher pay. As for the Malaysian companies, the firms mainly provide the basic fringe benefits as per statutory requirement and its fringe benefits are less generous than those of foreign firms. Besides retaining the cadres through selective hiring and competitive compensation, foreign firms offer very generous fringe benefits. These fringe benefits are exhibited as higher medical coverage, a generous housing subsidy and longer seniority based annual leave, health maintenance for senior staff, and an attractive retirement gratuity.
Some of the local firms, rank related benefits (i.e., car loan, MBA programmed, extensive medical benefits) are offered to senior and middle management personnel. A distinctively unique benefit is that local firms allow full reimbursement of education without any contractual binding, which is rare and very appealing to Malaysian society (Rioux, Bernthal & Wellins 2002). The firms also redesigned certain traditional benefits to better meet the needs of talented cadres (i.e., transferring the retirement allowance into an additional three per cent of payroll onto the employee provident fund). The fringe benefits of Foreign firms seemed too simplistic and less attractive than those of the foreign MNCs . However, further investigation reveals that Malaysian firms generally embrace less elaborative written rules. The extension of benefits can be decided case by case, and hence, the absence of fixed and clearly articulated policies. For instance, local firms are less stringent than the foreign MNCs in extending car and housing subsidies to lower ranked employees. Foreign firm manages its organization in rather an indigenous way and offers most of its fringe benefits by adhering to the minimal legislative requirement.
Training and Development
Training and development is one of the main strategies for the foreign MNCs examined in this study to express the worth of their people, as well as their eagerness to invest and develop exceptional employees. Besides replacement and retraining, these foreign MNCs invest heavily in training for promotion and succession planning. For instance, job specific training is provided for replacement so as to equip new recruits with basic on the job skills, and comprehensive development programmed are extended to high performing staff as apart of the succession planning, as well as to prepare employees for the larger responsibilities that accompany promotion. Moreover, the foreign MNCs seriously view training analysis for the proper identification of the necessary training or rescaling required to better aligned with future plans and other critical systems. Unlike the foreign counterparts, the local MNCs in this study mainly provide training for a replacement purpose and lack the interest in deploying training analysis.
Apart from on the job training (OJT), the high performing staff of the foreign MNCs can enhance their skills beyond current job scope by undertaking developmental training conducted by a professional consultant. In addition, the Western companies designed a six month, or one year overseas posting to broaden the international exposure of company members. The training strategy is more cost effective than the training system of the other four study companies. A further unique feature of the self directed cross sectional training is reflected by the voluntary participation of ambitious employees who wish to display their new talents to the management. Local firms with less interest in a skill enhancement approach to training on a needs basis, limit learning to job specific training (Yong 2003). Local firms occasionally send employees to a public training institution in which the training contents are generalized to cater for all types of companies. While the training effort is improving in these two companies, the lack of a proactive mindset in HR development apparently made these companies less attractive to job seekers.
Foreign MNCs integrate and utilise PA for PMS, administration (salary and promotion decisions), and development (training and reskilling). The foreign MNCs also embrace the PA that applies objective criteria, detailed formula and quantitative measures in a pay decision. In contrast, the local companies tend to handle their PA systems in simpler and less formal ways. Hence, the local companies implement mainly qualitative oriented PA measures that are less clearly articulated than that of the foreign MNCs . Although the measurement criteria of all study companies are performance oriented, the criteria of foreign MNCs are relatively more detailed, standardized and job specific than that of the local companies.
As part of the attempt to uphold the validity, reliability, and credibility of PA systems, the foreign MNCs seem to put serious efforts on monitoring and control (i.e., trained assessors, revision of goals and bi annual readjustment of key performance index in response to external and internal forces). Moreover, PA at local firms are performed under the close supervision of the HR department for managing irregularity and favoritism.
Promotion and Career Advancement
Excellent performance and consistent proven track records are the necessary recipes for promotion considerations in the foreign MNCs. The promotion consideration is facilitated by PA, succession planning and performance management system (PMS) to enable sound promotion decisions. The firms offer various types of career plans, such as, upward promotion, overseas posting, or top designation previously undertaken by expatriates. Some of the firms strongly support internal talent mobility and makes extensive use of internal candidates when filling vacancies at the leadership level (i.e., overseas posting, upward and lateral promotion). This U.S. MNC makes serious efforts in embarking on succession planning, an ongoing activity to identify and develop future cadres from the current pool of talents. Under this programmed, the firms intensively assess the current skill levels of talented cadres to determine the extra training that could best maximize their potentials.
Local MNCs previously practiced a guaranteed seniority promotion system that promotes cadres in a lock step, seniority based and time consuming fashion. However, given the better access available to tertiary education that enables faster promotion in Malaysia, the seniority promotion practice became a threat to organizational prosperity. High performers left for firms that reward rapid advancement, whereas less competitive cadres had continued to stay. With the adoption of PFPS and PMS, local MNCs take an active role in identifying talented cadres for promotion decisions. In contrast, foreign MNCs adopt a traditional concept of career management with the relatively stronger element of seniority influencing promotion decisions. Managers are promoted through some form of vertical progression of positions, but one that primarily involves similar responsibilities. Although foreign MNCs rewards high performing staff with upward
Promotion, the firm tends to reserve senior management responsibilities for family members. Those individuals not in the family hierarchy have little hope of being promoted into corporate management. In general, MNCs may utilize similar strategic planning to manage organizational prosperity.
The degree of effectiveness may, however, differ given the parent company influence and how well integrated HRM activities are in enhancing the employee organizational linkage. The common reasons for staff turnover include unfavorable work environments, unsatisfactory compensation, better offers elsewhere and personal reasons. Distinctive reasons for staff turnover in each study company are identified. Japanese MNC , tends to lose employees due largely to its less attractive pay packages and practices (seniority based pay practices) relative to its competitors. Foreign MNCs tend to lose talented cadres in groups when employees resign to follow their superior to new firm. In addition, the poor competency of employees, as well as a failure of the initial hiring practices that poorly links to organizational needs, further aggravates the problem. Malaysian domestic companies often lose talented cadres due largely to their less attractive pay packages and the lack of matured training facilities.
The growing concern to maintain a committed workforce capable of fulfilling corporate exigencies has led corporations to continually search for techniques to improve and cement the employee organizational link. Their continuing effort and the concurrent deployment of well integrated and sophisticated HRM infrastructures corroborate the notion that compensation packages, although important, have limited success in staff motivation and retention. Employee organizational linkage could be enhanced through meeting the intrinsic and extrinsic needs of the individual as well as the organizational needs. One of the many approaches is selective hiring. There is very strong association between individual and the organization affects the selection and retention of personnel (Schneider 1987).
In the hiring exercise of the foreign MNCs it was discussed and emphasized that a PO fit was paramount. Indeed, the Western MNCs would identify the degree of correspondence between needs of applicants (i.e., qualities, work attitude, reward expectation) and organizational reward systems and values. By carefully matching the values and expectation, Company B could effectively reduce staff turnover. Firms that adopt self directed cross sectional training to fulfill an employees’ achievement need that may further strengthen their sense of affiliation with the company, given a high degree of empowerment and the solicitation of ideas. In addition, performance orientation in the pay and promotion system also plays crucial roles in reinforcing commitment and loyalty.
By having pay and promotion decisions contingent upon performance, organizations are signaling to employees that high performing staff are duly recognized and distinctively rewarded through attractive pay incentives and career advancement. For instance, the pay strategies of the foreign MNCs that distinctively differentiate pay increase, particularly, from average to excellent performers, has the potential to make employees see merit pay as a truly rewarding performance and fulfillment of the extrinsic need for financial rewards.
Performance based promotions play a crucial role in staff retention and job motivation in that they may satisfy the achievement, affiliation and recognition needs of individuals. For instance, the diverse promotion opportunities (i.e., overseas posting, upward and lateral promotion, promotion to top designation previously undertaken by expatriates) in Western MNCs helps these companies to retain talented cadres. The deployment of performance based pay and promotion practices has also brought the firms with a positive work environment. The new recruits and existing employees appreciated this welcoming change and began to have a positive perception of their employer, which, in turn, elevated job motivation.
Every firms need to perceive fairness of the reward distribution (distributive justice) and performance appraisal procedure and process (procedural justice) encourage displays of OCB, particularly the respondents from Western MNCs. Western MNCs are highly concerned for OCB, and strategically integrate this practice into their reward and appraisal systems and practices (Chew & Takeuchi 2005). Consistent with the empirical findings above, the evidence of this study confirms that serious organizational efforts were undertaken by the foreign MNCs to ensure that organizational fairness was reflected in their HR activities. For instance, PA procedure and process were perceived fairly by their employees given the organizational support to ensure employee involvement in goal setting and appraisal criteria, transparency of PA, deployment of trained appraisers, and monitoring for irregular appraisal.
Local MNCs has substantially benefited since the adoption of performance oriented practices. It started to involve employees in operational and performance related decisions to elicit input. Most of the firms also redesigned PA to reflect fairness, objectivity, and measurability. These concerted efforts have resulted in improved employee morale, organizational and work commitment, a healthier workplace, and thereby, lower staff turnover. In fact, employees were eager to introduce their acquaintances to seek employment at local MNCs, enabling them to rely less on the mass media for recruitment. In addition, the practice of performance based reward and promotion systems among the foreign MNCs , which are well facilitated by fair and objective PA, support a fairer distribution of rewards, and thereby, further promote OCB.
A third crucial, yet fundamental enabler of organizational prosperity is organizational concern for employee welfare. The serious effort exerted by the Western companies (i.e., succession planning, sophisticated developmental training, fairness management, redesign and customization of benefit scheme, comprehensive medical benefits for family) provide employees with a sense of comfort in that their career advancement and family welfare are considered. Western MNCs extended financial support (i.e., car loan facility) and financial benefits to lower level staff. Local MNCs emphasizes orientation for new recruits to foster a ‘family like’ atmosphere and helping spirit. Most of the employees who left for better offers later requested for reemployment.
The strategic integration of complementary HR practices is the most important element for achieving optimum results. The way the foreign companies creatively designed and integrated HR activities to improve and cement the link between the organization and the employee. Moreover, these companies demonstrated concerted efforts in their HR practices (i.e., performance based pay and promotion systems, emphasis of PO fit in hiring exercise and management of organizational fairness). In contrast, local companies adopted a mix of non complementary strategies that may offset intended positive outcomes. For instance, while the local companies deploy PFPS with a distinctive pay increase structures, these HR tools were not well facilitated with an appraisal criteria or measurable means within the PA exercise, which is crucial for making a fair reward distribution. Seniority continues to be the primary criterion in promotion, which contradicts the practice of PFPS. Training is limited to job specific training that hinders meaningful upward and lateral promotion through which job enrichment or diversification can be intrinsically fulfilling.
In sum, while Western HRM practices are widely adopted in Malaysia in varying degrees, the country origin of the specific MNC is still an important factor that shaped the platforms to determine how a firm can strategically foster staff retention and enhance employee organizational linkage. Foreign companies have highly elaborated and sophisticated HR systems and practices that are well integrated. In contrast, the Malaysian companies in this study implement Western HRM practices under strong indigenous influences that may be appropriate to their organizational setting. However, some of their strategies are somewhat lagging due to a lack of concrete action plans, as well as the critical integration between the HR activities, crucial for organizational prosperity.
This influence has translated into the HR activities that show some commonalities and many differences in enhancing employee organizational linkage to achieve organizational prosperity. The deployment of the sophisticated techniques of complementary HR practices that well integrate individual and organizational needs may, therefore, prove to be an effective approach to the enhancement of employee organizational linkage, and hence, staff retention and job motivation. Organizational prosperity can be achieved through the combination of assessment and a close match of work values in staff selection, competitive performance based pay packages, customized fringe benefits, developmental and cross functional training, fair and transparent PA, and performance based promotion. If the local companies intend to create a competitive edge through a more committed workforce, they may be encouraged to consider refocusing on training.
Furthermore, these firms may come to recognize that well directed investment in training is likely to yield far better long term results than short term job specific training. It is also recommended that these companies be responsive to the pace of change, by redesigning their HR activities to meet the current needs of employees. In consideration of the growing staff dissatisfaction. These recommendations may prove highly advantageous to local companies, particularly, if it leads to an overall increased motivational force and concerted effort to achieve organizational prosperity.
The challenges of staff retention and job motivation that have plagued corporations in Malaysia are likely to be aggravated. Consequently, corporations will be facing aggressive competition to attract and retain talented cadres. Until the pool of company cadre sufficiently meets the corporate search for talented workforces, the key implication for practitioners is to proactively cement and strengthen the employee organizational link through the implementation and improvement of HR practices, in order to attract new talented cadres while retaining high performing employees.