Article Review - Achieving Organisational Prosperity Through Employee Motivation and Retention: a Comparative Study of Strategic Hrm Practices in Malaysian Institutions

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EPEE 2302:

Question 2 – Article Review

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

Author: Yin Teng Chew

This article provides an insight on strategic human resource management (HRM) practices regarding employee motivation of different multinational corporations (MNCs) in Malaysia. Employee retention is one of the hardest aspects of HRM that requires sophisticated framework. In the case of Malaysia, employee retention is a major issue as the labour turnover rate in the past years were quite high. Therefore, the author had done a research to find HRM practices that lead to organizational prosperity in a few MNCs in Malaysia as well as the common HRM practices.

There are six parts in this paper. The first part tells about the general idea of HRM practices in both international and local MNCs. Methodology of the research is explained in the second part. The author used five MNCs as subjects. Each MNC represents different parts of the world – Japan, Europe, United States (U.S), and two locals. Third stage is on the findings of the research. The author then illustrates the other aspects of the well-integrated HRM practices in enhancing the role behaviours of employees. The fifth part touches on discussion of the research findings before the conclusion in the final part.

All subjects were compared on six core HR practices, namely recruitment and selection, salary and compensation, fringe benefits, training and development, performance appraisal and promotion and career advancement. Both the American and European MNCs were very careful in recruiting new employee. Their HR managers work closely with line department managers in setting selection criteria. The Japanese MNC employed only novice employees and offered unattractive salary scheme before adopting Western HRM practices whilst both local MNCs are unable to attract talented cadres due to stiff competition from larger foreign MNCs.

Malaysians generally perceive foreign MNCs offer higher salary than local corporations. Although this is refutable, the article has proven that foreign MNCs offer more interesting salary scheme. In addition, foreign MNCs generously reward average and outstanding employees. Local MNCs, on the other hand, though practice pay-for-performance system (PFPS), do not really offer distinguishable payment scheme between high performers and average performers. However, in general, all MNCs in this research do not furnish blanket pay increase nor do they reward non-performers. It is also not surprising to note that foreign MNCs offer more attractive perks than local ones. Among the benefits are full reimbursements of education fees without any contractual binding; longer seniority based annual leave, extensive medical aid for employees and immediate family members besides the traditional fringe benefits.

According to Yong (2003), quoted in this article, local MNCs with less interest in skill enhancement training, limit learning to job specific training. This article has further echoes Yong’s statement by proving that local MNCs in this research mainly focus on on-the-job training (OTJ) whereas foreign MNCs provide developmental training to hone employees’ skills, apart from OTJ training. All study companies in this research adopt performance-oriented measurement criteria. However, the study shows that foreign MNCs embrace the performance appraisal (PA) that applies objective criteria, detailed formula and quantitative measures. Local firms, in contrast, prefer simpler and less formal PA. On career advancement, all MNCs practise performance based career promotion at different levels. Western MNCs offer overseas posting and use intensively their internal cadres to fill vacancies at leadership level. Local MNCs also practise the upward career promotion system, although it is seniority-influenced....
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