Research And Practice In Human Resource Management

RESEARCH AND PRACTICE IN HUMAN RESOURCE MANAGEMENT

Chew, Y. T. (2005). Achieving Organisational Prosperity through Employee Motivation and Retention: A Comparative Study of Strategic HRM Practices in Malaysian Institutions, Research and Practice in Human Resource Management, 13(2), 87-104.

Achieving Organisational Prosperity through Employee Motivation and Retention: A Comparative Study of Strategic HRM Practices in Malaysian Institutions Yin Teng Chew

ABSTRACT

A growing concern among companies operating in the Malaysian

labour market with high job mobility is how to maintain a workforce

capable of fulfilling corporate exigencies. This study compares and

contrasts how strategic human resource management activities from

different country origins are implemented in Malaysian companies

to motivate and retain talented cadres. The findings reveal there

were significant differences across the study countries. Moreover,

the study results demonstrate that, while an attractive pay package is

effective in manifesting job motivation, complementary strategic

human resources practices are profoundly important in reducing

staff turnover. These findings are discussed in terms of the other

application aspects of well integrated human resource practices.

INTRODUCTION

Human resources (HR) are the backbone of an organisation (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). Clearly, 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). Arguably, 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 behaviours of employees. Yet, despite such costly investments, corporations are

continually searching for techniques to improve and cement the linkage between employees and their

organisations.

Weak employee organisational 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 organisation (i.e., person organisation fit selection approach, performance based

incentives, extension of the attractive executive perks to all employees). With proper implementation, these

techniques often facilitate a more committed workforce. This effect can be achieved through the

enhancement of in role (i.e., organisational commitment) and extra role (i.e., organisational citizenship)

behaviours (Allen & Meyer 1990, Organ 1990). The form of organisational attachment and in role

behaviour, the organisational commitment that psychologically characterises an employee’s relationship

with the organisation for which he or she works, has implications for whether or not an employee will

choose to remain with the organisation. Past research (Porter & Steers 1973, Allen & Meyer 1990) found

that organisations with strong employee attachment, or organisational commitment, tend to have lower

turnover or intention to leave than would those with weak employee attachment. Organisational

citizenship behaviour (OCB), a form of extra role behaviour and reciprocation of fair treatment by

employees (Colye-Shapiro, Kessler & Purcell 2004), is considered as part of work related activities

performed by employees that contribute to organisational 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 organisation 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 organisations in Malaysia.

Annual surveys by Malaysian Employers Federation (MEF 2004, 2005) report that the annual labour

turnover rates for 2003 and 2004 were high, approximately 17 per cent and 16 per cent respectively.

Another survey (Lim 2001) reports that Malaysian respondents are only willing to stay with their current

organisations for less than three years. Considering the need for HRM to address low organisational

linkages