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The Impact of Human Resource Strategies on

the Retention of Engineers in Malaysian Firms

Rabeatul Husna Abdull Rahman

A thesis in fulfilment of the requirements for the degree of

Doctor of Philosophy

School of Social Sciences

Faculty of Arts and Social Sciences

September 2012

PLEASE TYPE

THE UNIVERSITY OF NEW SOUTH WALES

Thesis/Dissertation Sheet

Surname or Family name: ABDULL RAHMAN

First name: RABEATUL HUSNA Other name/s: -

Abbreviation for degree as given in the University calendar: PhD

Title: The impact of human resource strategies on the retention of engineers in Malaysian firms

Abstract: 350 words maximum: (PLEASE TYPE)

Excessive external labour mobility – overseas, to Singapore, and inter-firm – by knowledge workers, particularly engineers, is thought to be hampering Malaysia‘s drive for knowledge economy status. The role of firms‘ human resource practices in addressing this problem is explored by analysing the factors that could contribute to improved professional engineer retention, based on firm-level partnership in knowledge-creation. In Western Human Resource Management (HRM) literature, employee retention is defined as one of the key firm-level strategic (SHRM) goals. The challenge in knowledge worker retention however is the ‗pull‘ of firm-external occupational labour markets, in which careers often called ‗protean‘ (self-directed), or ‗boundaryless‘, are pursued in order to remain valuable by building expertise. ‗Push‘ factors are added when engineers do not perceive firms as providing organisational support for career development, or the mutual exchange that creates a ‗psychological contract‘. Testing these concepts with Malaysian engineers and HR managers, the thesis explores the extent to which firms provide forms of engagement and career support that might counter job hopping by creating a sense of psychological mobility through professional growth. The notions of psychological contract (PC) and perceived organisational support (POS) are used to conceptualise engineers‘ intention to stay (ITS) and are seen as mediating the relationship between HR policies/programs/practices and engineers‘ ITS. Through a mixed-method design based on a survey of engineers as well as interviews with HR practitioners and engineers, the study combines ‗top-down‘ and ‗bottom-up‘ perspectives on the factors shaping engineers‘ turnover intentions and their causes. Interviews with HR staff and engineers reflect a mechanistic/operational rather than a strategic role of HR departments in Malaysian engineering firms, with employee development regarded as costly, and in some cases little sense of partnership or reciprocity. The survey results indicate significant links among the quantity and quality of HR programs available, POS, PC, and engineer‘s ITS. Career development opportunity and skills training emerge as the HR strategies most likely to influence ITS, meeting engineers‘ self-efficacy needs. Despite engineers‘ pragmatism, the sense of a mutually-satisfying relationship emerges as a retention factor. Interviews reveal the influence of HR policies and practices in engineers‘ complex career mobility decisions.

Declaration relating to disposition of project thesis/ dissertation

I hereby grant to the University of New South Wales or its agents the right to archive and to make available my thesis or dissertation in whole or in part in the University libraries in all forms of media, now or here after known, subject to the provisions of the Copyright Act 1968. I retain all property rights, such as patent rights. I also retain the right to use in future works (such as articles or books) all or part of this thesis or dissertation. I also authorise University Microfilms to use the 350 word abstract of my thesis in Dissertation Abstracts International (this is applicable to doctoral theses only).

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21 September 2012

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Requests for restriction for a period of up to 2 years must be made in writing. Requests for a longer period of restriction may

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FOR OFFICE USE ONLY Date of completion of requirements for Award

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COPYRIGHT STATEMENT

‗I hereby grant the University of New South Wales or its agents the right to archive and to make available my thesis or dissertation in whole or part in the University libraries in all forms of media, now or here after known, subject to the provisions of the Copyright Act 1968. I retain all proprietary rights, such as patent rights. I also retain the right to use in future works (such as articles or books) all or part of this thesis or dissertation. I also authorise University Microfilms to use the 350 word abstract of my thesis in Dissertation Abstract International (this is applicable to doctoral theses only). I have either used no substantial portions of copyright material in my thesis or I have obtained permission to use copyright material; where permission has not been granted I have applied/will apply for a partial restriction of the digital copy of my thesis or dissertation.‘

Signed Date 21 September 2012

AUTHENTICITY STATEMENT

‗I certify that the Library deposit digital copy is a direct equivalent of the final officially approved version of my thesis. No emendation of content has occurred and if there are any minor variations in formatting, they are the result of the conversion to digital format.‘

Signed Date 21 September 2012

ORIGINALITY STATEMENT

‗I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgment is made in the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project‘s design and conception or in style, presentation and linguistic expression is acknowledged.‘

Signed Date 21 September 2012

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ABSTRACT

Excessive external labour mobility – overseas, to Singapore, and inter-firm –by

knowledge workers, particularly engineers, is thought to be hampering Malaysia‘s

drive for knowledge economy status. The role of firms‘ human resource practices in

addressing this problem is explored by analysing the factors that could contribute to

improved professional engineer retention, based on firm-level partnership in

knowledge-creation.

In Western Human Resource Management (HRM) literature, employee retention is

defined as one of the key firm-level strategic (SHRM) goals. The challenge in

knowledge worker retention however is the ‗pull‘ of firm-external occupational

labour markets, in which careers often called ‗protean‘ (self-directed), or

‗boundaryless‘, are pursued in order to remain valuable by building expertise. ‗Push‘

factors are added when engineers do not perceive firms as providing organisational

support for career development, or the mutual exchange that creates a ‗psychological

contract‘.

Testing these concepts with Malaysian engineers and HR managers, the thesis

explores the extent to which firms provide forms of engagement and career support

that might counter job hopping by creating a sense of psychological mobility

through professional growth. The notions of psychological contract (PC) and

perceived organisational support (POS) are used to conceptualise engineers‘

intention to stay (ITS) and are seen as mediating the relationship between HR

policies/programs/practicesand engineers‘ ITS.

Through a mixed-method design based on a survey of engineers as well as

interviews with HR practitioners and engineers, the study combines ‗top-down‘ and

‗bottom-up‘ perspectives on the factors shaping engineers‘ turnover intentions and

their causes. Interviews with HR staff and engineers reflect a

mechanistic/operational rather than a strategic role of HR departments in Malaysian

engineering firms, with employee development regarded as costly, and in some

cases little sense of partnership or reciprocity. The survey results indicate

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significant links among the quantity and quality of HR programs available, POS,

PC, and engineer‘s ITS. Career development opportunity and skills training emerge

as the HR strategies most likely to influence ITS, meeting engineers‘ self-efficacy

needs. Despite engineers‘ pragmatism, the sense of a mutually-satisfying

relationship with employers emerges as a retention factor. Interviews reveal the

influence of HR policies and practices in engineers‘ complex career mobility

decisions.

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ACKNOWLEDGEMENTS

The production of this thesis has been immensely enjoyable despite difficult times

because I have received support and encouragement from a great number of

individuals.

I am greatly indebted to Professor Janet Chan and Associate Professor Anne Junor

for their contributions to all aspects of my work in this thesis, as well as my life at

UNSW. They were great teachers, educators, and advisors, who provided a lot of the

ideas and inspiration for the thesis, and taught me the importance of work-life

balance. They were the most generous research supervisors, and without their

contributions and guidance this thesis would not have been completed. They also

were great listeners, who were always there for me during good and difficult times. I

also thank them for their excitement and interest in my research and in my personal

life. Their guidance and support have made this a thoughtful and rewarding journey.

My gratitude also goes to my employer, UTM and my sponsor KPT for financing

this study. The FASS, particularly the School of Social Sciences played an

invaluable role in my study. I am especially grateful for the various funding

available which has supported me financially. I would also like to thank all my

research participants for their valuable time and for the information they provided.

My deepest gratitude and love belong to my husband – Amir Adris, whose support

and superhuman patience were with me all these years. I thank him for sacrificing

his career for my future, for being a great husband, a true friend, and a responsible

father to our beautiful daughters, IzzQistina and IzzQairina. Mostly, I thank him for

believing in me. I would also like to thank my family especially my parents, my in

law‘s family, my colleagues, and my friends for their prayer, love, support,

encouragement, and advice. I hope this achievement makes them proud.

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DEDICATIONS

I dedicate this work to both my daughters. They have been my greatest motivation

and inspiration. I hope this work resembles my dedication towards them and so they

believe:

―...and when you have decided, put your trust (rely) in Allah‖ (Al-Imran, 3:159)

―And whoever puts his trust in Allah, then He will suffice him. Verily, Allah will

accomplish his purpose‖ (At-Talaq, 65:2-3).

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TABLE OF CONTENTS

Abstract ................................................................................................................... iv

Acknowledgements ................................................................................................. vi

Dedications ............................................................................................................ vii

Table of contents .................................................................................................. viii

List of tables ........................................................................................................... xii

List of figures ......................................................................................................... xii

Abbreviations used in thesis ................................................................................ xiii

Chapter 1 .................................................................................................................... 1

Introduction ............................................................................................................... 1

Research background ............................................................................................... 3

Conceptual model .................................................................................................... 7

Research aim .......................................................................................................... 11

The Concept ‗Knowledge worker‘ ........................................................................ 13

Research focus and methods .................................................................................. 14

Research significance and contribution ................................................................. 16

Thesis structure ...................................................................................................... 18

Conclusion ............................................................................................................. 20

Chapter 2 .................................................................................................................. 23

Conceptualising Engineering Careers and their Management ........................... 23

Introduction ............................................................................................................ 25

Engineers as knowledge workers ........................................................................... 26

The labour market for engineers ............................................................................ 32

The career behaviour of engineers ......................................................................... 36

The management of knowledge workers ............................................................... 41

Conclusion ............................................................................................................. 44

Chapter 3 .................................................................................................................. 47

Theorising Firm-Level Approaches to The Retention of Knowledge Workers . 47

Introduction ............................................................................................................ 49

Strategic HRM: High Performance, High Commitment ....................................... 52

The impact of career management on commitment and retention ......................... 62

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Intention to stay ..................................................................................................... 67

Social exchange theory .......................................................................................... 71

The impact of perceived organisational support and psychological contract on commitment and retention ..................................................................................... 74

Conclusion ............................................................................................................. 77

Chapter 4 .................................................................................................................. 81

Research Design andData Analysis ........................................................................ 81

Introduction ............................................................................................................ 83

Research methods .................................................................................................. 84

Recruitment of research participants ..................................................................... 87

Recruitment and profile of survey participant ................................................... 88

Recruitment and profile of interviewees ............................................................ 90

Survey questionnaire .............................................................................................. 93

HR interview schedule ........................................................................................... 99

Engineers‘ interview schedule ............................................................................. 100

Document analysis ............................................................................................... 101

Research process .................................................................................................. 101

Ethical issues ........................................................................................................ 103

Preliminary statistical analysis ............................................................................. 104

Analysis of interviews ......................................................................................... 105

Conclusion ........................................................................................................... 106

Chapter 5 ................................................................................................................ 109

Managing Human Resources in Malaysia: The Labour Market Context and Engineering Firms’ Responses ............................................................................. 109

Introduction .......................................................................................................... 111

Western and Asian models of human resource management: Convergence or divergence? .......................................................................................................... 114

Approaches to turnover/retention behaviour: ‗push‘ and ‗pull‘ factors .............. 118

HRM Approaches in Malaysian firms – Implications for engineering retention 124

Strategic HR and the role of the HR department ............................................. 126

Recruitment and selection ................................................................................ 130

Training and career development ..................................................................... 135

Appraisal and reward ....................................................................................... 140

HRM: Addressing challenges of employee retention .......................................... 145

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The possible role of individual and demographic factors .................................... 154

Conclusion ........................................................................................................... 157

Chapter 6 ................................................................................................................ 160

Factors Affecting Engineers’ Intention to Stay .................................................. 160

Introduction .......................................................................................................... 162

Descriptive statistics and correlation analysis ..................................................... 166

HR strategies that influence ITS .......................................................................... 168

Chi-Square analysis ............................................................................................. 172

Multiple regression analysis ................................................................................ 173

Multiple mediation analysis ................................................................................. 174

Conclusion ........................................................................................................... 177

Chapter 7 ................................................................................................................ 180

A Re-examination of Intention to Stay Factors .................................................. 180

Introduction .......................................................................................................... 182

The career aspirations of knowledge workers ..................................................... 185

The need to upgrade knowledge, skills and experience ................................... 185

The need for career development opportunities ............................................... 189

The need to earn a competitive salary .............................................................. 191

Mutual exchange relationship .............................................................................. 192

Fair and equitable reward ................................................................................. 193

Flexible human resource policy ....................................................................... 198

Symbols of appreciation ................................................................................... 200

The role of organisational agents ......................................................................... 202

Relationship with superior/manager/head of department ................................ 202

Relationship with the HR department .............................................................. 206

Relationship with work colleagues .................................................................. 209

Barriers to leaving ................................................................................................ 211

Personal circumstances .................................................................................... 212

Labour market constraints ................................................................................ 214

Career histories .................................................................................................... 219

Example 1: Mr Yeoh ........................................................................................ 219

Example 2: Ms Nor .......................................................................................... 224

Example 3: Mr Din ........................................................................................... 228

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Example 4: Ms Ila ............................................................................................ 231

Conclusion ........................................................................................................... 236

Chapter 8 ................................................................................................................ 240

Conclusion and implications ................................................................................. 240

Introduction .......................................................................................................... 242

Overview of key findings .................................................................................... 243

Theoretical and practical contributions ................................................................ 248

Limitations and future research ........................................................................... 250

Conclusion ........................................................................................................... 251

Bibliography ........................................................................................................... 253

Appendices ............................................................................................................. 296

Appendix A: Map of peninsular Malaysia-Singapore ......................................... 298

Appendix B: Questionnaire ................................................................................. 300

Appendix C: HR interview questions .................................................................. 306

Appendix D: Engineer interview questions ......................................................... 308

Appendix E: PISC form for HR participants ....................................................... 311

Appendix F: PISC form for engineer participants ............................................... 315

Appendix G: Histograms ..................................................................................... 319

Appendix H: Normal probability plots ................................................................ 323

Appendix I: Boxplot ............................................................................................ 327

Appendix J: The impact of HR policies/programs .............................................. 329

on ITS .................................................................................................................. 329

Appendix K: Bootstrap multiple mediation result ............................................... 331

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LIST OF TABLES

Table 4.1: Profile of survey participants and of Malaysian workforce...................89

Table 4.2: HR participants.......................................................................................91

Table 4.3: Engineer participants..............................................................................92

Table 4.4: Mean and trimmed mean.......................................................................105

Table 5.1: A meta-analysis of Malaysian-context employee retention studies......146

Table 6.1: Descriptive statistics and correlations for variables..............................167

Table 6.2: The impact of HR policies/programson intention to stay (ITS)...........169

Table 6.3: Relationship between gender, ethnicity, marital status, age, length of

employment, proximity of current company‘s location to Singapore, and ITS......172

Table 6.4: Multiple regression with ITS as dependent variable..............................174

Table 6.5: Mediation of the effect of HRQuality on ITS through POS and PC......176

Table 7.1: Summary of Mr Yeoh‘s career movements............................................220

Table 7.2: Summary of Ms Ila‘s career movements................................................231

LIST OF FIGURES

Figure 1.1: Model of study.......................................................................................11

Figure 2.1: Dimensions of the boundaryless career..................................................39

Figure 6.1: Relationships investigated through survey: Links hypothesised..........162

Figure 6.2: Matrix scatter plot for correlations........................................................167

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ABBREVIATIONS USED IN THESIS

DJ Distributive justice

EVLN Exit, voice, loyalty, neglect

HR Human resource

HRD Human resource development

HRM Human resource management

HRMP Human resource management planning

IT Information technology

ITS Intention to stay

OC Organisational commitment

OCB Organisational citizenship behaviour

OMB Organisational membership behaviour

PC Psychological contract

PJ Procedural justice

PCI Psychological contract inventory

POS Perceived organisational support

RBV Resource-based view

RCC Resources/Capabilities/Competencies

SHRM Strategic human resource management

SPOS Survey of perceived organisational support

CHAPTER 1

INTRODUCTION

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RESEARCH BACKGROUND

In a succession of national development policies and plans since the first Wawasan

2020 (Vision 2020) statement of 1991, Malaysian governments have given

prominence to the pursuit of a knowledge economy. The goal of achieving

developed nation status by 2020 has increasingly been linked to the fostering of

knowledgeable human resources (Mahathir, 1991; Najib, 2010). In the Third

Outlook Perspective Plan 2001- 2010, one of the four key goals of the National

Vision Policy was a reorientation of Human Resource Development (HRD) in order

to build a workforce ‗capable of meeting the challenges of a knowledge-based

economy‘. A significant increase in the number of engineers was identified as

playing a vital role (Mahathir, 1991). In the Tenth Malaysia Plan 2010-2015, a

further reorientation towards human resources was announced (Najib, 2010). In the

current Plan, 40 per cent of total funding is being allocated to this purpose (Lee,

2010).

An indication of the importance afforded to knowledge workers in Malaysia is the

creation in 2011 of new statutory body, Talent Corporation Malaysia, chaired by

Prime Minister Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak.In 2012

it outlined a ‗Roadmap‘ for establishing Malaysia as a ‗talent hub‘. In the New

Economic Model, increased investment in education and training and labour law

reform are to contribute to increasing the availability of skilled and knowledgeable

workers, driving growth, and generating high income jobs, careers and quality of

life, reinforcing Malaysia‘s attractiveness as a ‗talent hub‘, and creating a ‗virtuous

circle‘ of innovation and development (TalentCorp, 2012: 13).

Such efforts must contend, however, with a long-recognised officially-designated

‗brain drain‘. Since 2000, there have been a doubling of university places, a trebling

of skilled workers trained and a quadrupling of professionals, but this investment is

seen as having been weakened by a ‗drain‘ on the ‗talent pool‘ through the loss of

skilled workers (TalentCorp, 2012: 10, 12). One issue is that many tertiary-educated

knowledge workers or professionals inhabit an increasingly global labour market.

Whilst the international labour market seem to foster information exchange,

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Malaysia will benefit only if TalentCorp initiatives can attract skilled and

experienced knowledge workers, from both the Malaysian diaspora and from other-

nation expatriates to create a ‗brain gain‘. Moreover, the rate of emigration of

Malaysian highly skilled labour is considered high in comparison to that of other

countries. In 2010, net labour migration of tertiary-educated workers was 11.1 per

cent from Malaysia, compared with 2.7 per cent from Australia, 2.1 per cent from

Indonesia, and only 1.2 per cent from Japan (Kanapathy, 2008; Ratha et al., 2011).

There is a second, specifically Malaysian issue of cross-border mobility: that

between the Malaysian state of Johore and Singapore. Many highly skilled

Malaysian workers either move or commute to Singapore which is geographically

adjacent to Johore state (see Appendix A: Map of Peninsular Malaysia-Singapore).

It was estimated in 2001 that almost 20,000 Malaysians in professional or technical

jobs as well as semi-skilled and unskilled jobs were commuting to and from

Singapore daily (OECD, 2001). This issue suggests a challenge particularly for

employers in Johore in attracting and retaining especially the skilled employees in

the local labour market.

There is a third issue of potential skill wastage or under-utilisation that is also a

characteristically Malaysian one: that known locally as ‗job hopping‘. This is the

phenomenon with which this study is largely concerned: the impact within Malaysia

of the practice of changing jobs frequently, especially amongst knowledge workers.

Within Malaysia, there are again two types of labour mobility and turnover, with

varying levels of economic impact. First, job hopping may involve the internal

migration of knowledge workers to a different geographic location or region, and in

doing so, they may if necessary switch industries. This may have adverse impacts on

a region or an industry. For example, organisations located in industrial areas

especially face a crucial shortage of engineers as a result of high employee turnover

(Muthuveloo and Che Rose, 2005). Alternatively, knowledge workers may change

jobs and move from one company to another in the same geographical area.

It might be thought that job-hopping within a region would not create any particular

problems. In reality, however, it may mean that this is a form of labour mobility

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that does little to help regions experiencing skill shortages. A Migration Survey

report published by the Department of Statistic (DOS) found that there was a higher

tendency for Malaysian workers who were already employed to move and seek

employment within the same state than to move to another state in the country. This

pattern appears to be consistent throughout the four years surveyed 1992, 1997,

2002 and 2007 (DOS, 2010a). For example, Johore state, whilst losing workers to

Singapore, has a high number of vacancies, partly because of low mobility into the

state from elsewhere in Malaysia, and partly because it is an area of high demand for

professional labour in a country where less than 30 per cent of the employed

workforce has obtained tertiary qualifications (DOS, 2010b).

Thus in a context of a net shortage of skilled labour, it cannot be assumed that a high

degree of labour mobility is a sign of an effectively functioning labour market, if the

supply of knowledge workers is not being distributed to areas of demand. The

situation of Malaysia may be contrasted with that of Japan. Nakata and Miyakazi

(2012) have argued that the persistence of very strong firm- internal labour markets

for Japanese engineers, a legacy of the life-time employment model, is a sign of

labour market ‗immaturity‘, undermining innovation. But this study will investigate

whether in Malaysia; the opposite may be the case: high levels of job-hopping may

mean that firms are not able to take advantage of deepening levels of knowledge and

expertise before knowledge workers move on to a competitor. According to

Sempane (2002) voluntary turnover is a major problem for companies in Malaysia in

that job hopping has become a part of the country‘s culture, whilst a survey by Lim

(2001) reports that Malaysians are only willing to stay with their current

organisations for less than three years.

The focus in this study is on the retention of engineers. The recruitment and

retention of engineers has been integral to the national policy approach to

developing human capital. A highly-knowledgeable engineering workforce is seen

as vital to the local development of sophisticated production processes in high-

technology and science-based industries. Moreover, knowledge based economies are

based on an emphasis on research and development, innovation, and the production

of high technology goods, which suggests the invaluable role of engineers in

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Malaysia. The contributions and the importance of engineers in Malaysia are

summed up in the following remarks by the president of the Institution of Engineers

Malaysia (IEM), Datuk Keizrul Abdullah (New Straits Times, 2008). His remark

suggests thatthe role of engineers in Malaysia is undoubtedly very critical for the

growth of Malaysia:

....This building (Datuk Keizrul‟s house) would not be possible if there were

no civil engineers to design and supervise the construction. Engineering

skills were used to discover the strength of the design of the chair you are

sitting on. The air-conditioning system would not be here without a

mechanical engineer to design it. As for power, there are the aspects of

generating the power and bringing it to houses, measuring how much you

are using because you have to pay for that, and designing it so that when you

flick the switch, the light comes on...The same goes to water. We build dam,

treat the water, filter it, clean it, put it in a pipeline, and give it sufficient

pressure so that it reaches your house...Engineers were the nation builders.

They literally made this country what it is today. Malaysia‟s poverty rate

was 57 per cent during independence. Today, it has dropped tenfold to 5.7

per cent. Even back then, engineers were developing plantations and

operating mines and dredges. They built roads, railways, and new townships.

They brought electricity and clean water to towns and the countryside. These

helped to improve the quality of life and reduce the poverty level. During

industrialisation, engineers built factories and operated machinery. They

expanded the national grid to meet the energy demands of industries. They

strengthened highways, ports, and airports. Then, they helped to move the

nation into the information era. Almost every aspect of modern Malaysia is

due to the effort of engineers... (New Straits Times, 2008).

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CONCEPTUAL MODEL

Whilst cross-border and international labour mobility are a national policy issue, it

will be argued that the management practices of Malaysian firms employing

engineers could potentially contribute to the retention of knowledge workers. The

purpose of this study is to examine different approaches to addressing the problem

of knowledge worker retention at the level of the business organisation. This is

done by exploring the relevance, in the Malaysian context, of approaches that have

arisen from the strategic human resource management (SHRM) discourse of the past

25 years.

These are approaches which, rhetorically at least, define employees as ‗assets‘ to be

retained and developed (Beer et al., 1984), particularly when, as with engineers, they

have talents that are seen as relatively scarce and hard to imitate (Barney, 1991).

Although the retention of employees may not be vital for some organisations, it is

reasonable to argue that the benefits of long term retention of knowledge workers

outweigh the cost of losing and replacing them. The cost of replacing leavers and

recruiting substitutes can be high: not only do companies suffer the loss of skills,

knowledge, experience and training investment, but also the turnover and

recruitment process can disrupt other tasks and affect staff motivation (Curtis and

Wright, 2001). Frequent career moves of engineers to a rival company could lead to

unfavourable competitive consequences in the form of information spillovers

(Pennings and Wezel, 2007) and the leakage of knowledge across firms (Swart in

Boxall et al., 2007). Loss of engineers will also result in the loss of specific

organisational technical knowledge which can affect the survival of an organisation

(Lee and Maurer, 1997).

In studies of the employee retention problem, there has been a rather heavy

emphasis on management responses. The central problematic of the SHRM

literature tends to be defined as that of ‗attracting, retaining and developing staff‘

(see for example Schuler and Jackson, 2007). The generalised solutions offered tend

to be couched in terms of approaches to ‗aligning‘ employees with the

organisation‘s ‗culture‘, ‗motivating‘ them and gaining their ‗commitment‘,

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generally through some combination of intrinsic and extrinsic rewards (Guest, 1998,

for a critique see Legge, 2005). Within the HRM literature, the problem of low

retention is normally expressed in terms of increased turnover resulting from

reduced commitment (Steers, 1977; Tett and Meyer, 1993; Meyer and Herscovitch,

2001; Steel et al., 2002; Gellatly et al., 2006; Steel and Lounsbury, 2009). The

solution to the problem is then operationalised in terms of the mobilisation of long-

term commitment, or intention to stay with the organisation, through the provision

of longer-term rewards such as those based on career planning and management

(Baruch, 2004).

There is, however, limited evidence as to which HR practices influence employees‘

long term retention, as empirical studies have focused mainly on antecedents for

quitting rather than on explanations of employees‘ intention to stay with an

organisation. Yet Mitchell et al. (2001) and Steel et al. (2002) have argued that

turnover intention and intention to leave may not explain employees‘ intentions to

stay. Hence, the argument of this study is tied to recent propositions about careers,

particularly the psychological aspects of career management. The notions of

psychological contract (PC) and perceived organisational support (POS) are used to

conceptualise employees‘ staying intention and are seen as mediating variables

between HR strategies and employee retention. Whilst this thesis draws on the POS

and PC literatures, its primary concern is not to contribute to their development, but

rather to build insights from their basis into a mixed-method approach relevant to

the Malaysian cultural context. Within the organisational behaviour and

organisational psychology literature, the mobilisation of employee commitment and

its relationship to retention has been theorised in terms of several applications of a

broader social exchange theory.

A generalised explanation of why individuals stay in relationships or leave them,

social exchange theory can be contrasted with the view that the employment

relationship is a purely economic or market transaction. Bringing together

sociological, psychological and economic perspectives, social exchange theory

suggests that individuals undertake a constant subjective comparison between the

intrinsic and extrinsic costs and benefits of staying in a relationship and moving to

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an alternative (Blau, 1964; Eisenberger et al., 2002). ‗Psychological contract‘ theory

focuses on the less instrumental aspects of the employment relationship, and the

impact on employee commitment of ‗breaching‘ this contract (Rousseau, 1996;

Cullinane and Dundon, 2006). Building on the concept of reciprocity (Gouldner,

1960) within social exchange theory, ‗perceived organisational support‘ theory

suggests that employees are more likely to stay with, and contribute in a committed

way to, organisations that they experience as recognising their efforts by affording

them both intangible benefits such as respect, caring and positive valuation, and

tangible benefits, such as wages and benefits (Shore and Shore, 1995; Rhoades and

Eisenberger, 2002).

There are two difficulties that arise with any attempt to define retention in terms of a

long-term career with an organisation.1 One is based on recent changes to firm

behaviour, the other on changes in employee behaviour. It is becoming increasingly

difficult for organisations to afford long term employment or guarantee job security

for their employees. On the other hand, firms facing mobility and turnover problems

must come to terms with the rise of the ‗boundaryless career‘, in which employees

may pursue multiple careers as their goals and expectations change during the

course of any employment engagement (Arthur, 1994; Arthur et al.,1999). Such

behaviour may have arisen in response to changes infirm behaviour, or it may have

arisen independently as a result of generational change. Individuals who describe

themselves as ‗careerist‘ are likely to move frequently from one company to another

to fast track their career growth (Rousseau, 1995). It is important to note that

individuals may leave the organisation because of dissatisfaction due to unattained

expectations or simply because they had the initial intention of staying for only a

short time (Porter et al., 1975), with the first being manageable whilst the latter is

more complex as employees‘ career motives are implicit. It is also important to

highlight that an employee may leave for both of the reasons: dissatisfaction with an

organisation and the pursuit of career goals.

1 A third possibility, that engineers‘ primary identification is with an external occupational labour market, is not explored at length. This is partly because the focus here is on the role of firms in engineer retention and partly because of the variable extent to which, in different countries, engineers have been able to organise themselves into a professionally ‗closed‘ occupational labour market (Meiksins and Smith, 1993).

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In the case of engineers, organisations must confront the reality that mobility may be

spurred by various factors. For instance, knowledge workers may be inclined to

change jobs as a result of non-pecuniary motivations such as attraction to

opportunities for collaboration and interaction with other talented people or access

to new and more sophisticated equipment (Solimano, 2008). In the case of

Malaysian employees, it has been suggested that retention strategies based on

intrinsic rewards may have limited success. Malaysians are reported to be money

oriented; hence more inclined to job hop and change employers with little hesitation

in pursuit for a higher wages (Chew, 2005). Nevertheless, in studies based on the

Malaysian context, a range of organisational strategies has been found to foster

employee retention (Ahmad and Abu Bakar, 2003; Samad, 2006; Samad and

Hassan, 2007; Chew and Wong, 2008).

These studies found that certain HR practices such as training, career mentoring,

career development opportunity, competitive salaries and promotion opportunities,

may indeed influence employees‘ commitment or turnover intention. Other studies

outside of Malaysia also found that training and development (Lee and Maurer,

1997), career management (Inkson, 2007) and internal promotions (Guest in

Sparrow and Marchington, 1998) are all linked to reducing turnover and enhancing

commitment and retention of employees. These empirical findings suggest that

organisations can improve the retention of their key employees by implementing

certain HR strategies. Paradoxically, the practices that are most likely to induce

staying behaviour are precisely those most likely to provide employees with external

career mobility in the labour market. Thus despite the importance of retaining

engineers in firms across Malaysia, there are possibilities that these retention

strategies may also be contributing to employee turnover. In particular, there are

questions about what other than HR strategies can influence employees‘ intention to

continue working in a company.

Figure 1.1 illustrates the conceptual model of this study. It indicates the three-levels

of analysis in this study: labour market, organisation, and individual engineers. This

model hypothesises the existence of a relationship between specific HRM

approaches and employee retention. The social exchange constructs of perceived

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organisational support (POS) and psychological contract (PC) are hypothesised as

the factors that form the basis of employee commitment which can lead to

employees‘ intention to continue working in a company. The model also

hypothesises that actual retention behaviour may also depend on extra-

organisational factors such as individual circumstances and labour market factors.

Figure 1.1: Model of study

RESEARCH AIM

The primary aim of this thesis is to investigate how organisations, specifically

Malaysian engineering firms, can influence the retention of employees, particularly

skilled worker such as engineers. The research sets out to shed light on eight

research questions in relation to the retention of Malaysian engineers:

1. Are there particular characteristics of engineers that could be considered in the

Malaysian context, in order to address retention issues?

(a) What knowledge/professional worker attributes apply to Malaysian engineers?

(b) Can Malaysian engineers‘ turnover behaviour be modified by management and

regulation of working relationships?

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2. How do the characteristics of the labour market(s) for Malaysian engineers

influence their retention patterns and turnover intentions?

(a) What are the key characteristics of the Malaysian engineering labour market(s)?

(b) How can an understanding of these characteristics contribute to an understanding

and resolution of the ‗job hopping‘ issue?

3. Are the concepts of either the protean or the boundaryless career helpful in

analysing the turnover intentions of Malaysian engineers?

(a) To what extent do Malaysian engineers pursue internally-driven career

trajectories, and to what extent are they responding to external contingencies?

(b) To what extent do they value learning opportunities and psychological mobility,

and to what extent are they experiencing a greater need for learning opportunities

and psychological mobility?

4. What case can be made for Malaysian organisations to adopt human

resource/knowledge management practices designed to foster engineers‘ skill

development and retention?

5. Can evidence of a SHRM approach to the management of Malaysian engineering

talent, be identified, either in the desk research or in the fieldwork undertaken?

6. For the engineers in the study, how are performance, commitment and retention

linked?

7. Can a direct relationship be drawn between the presence or absence of HR

programs and practices, such as career management, and engineers‘ intentions to

stay?

8. Can social exchange theory, particularly theories of the effects of perceptions of

organisational support (POS) and/or of the psychological contract (PC), provide an

insight into the factors that would influence engineers‘ intentions to stay with an

organisation?

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THE CONCEPT ‘KNOWLEDGE WORKER’

The term ‗knowledge worker‘, when applied to workers such as engineers, is

contested by some Western academics because, like the words ‗talent‘ and

‗intellectual capital‘, it carries with it a set of assumptions about the new and

distinctive nature of the work, workers, work organisation and employment

relations. These are terms that emerged in the West in the 1990s, migrating from

management practice and consultancy work into academia (Bontis and Choo, 2002).

It will be argued that the use of the term ‗knowledge worker‘ is justified, in the light

of the mobility of Malaysian engineers within an occupational labour market2. This

mobility is explored in terms of a quest for professional knowledge within the

engineering occupation, rather than administrative advancement within an

organisational hierarchy.

The long-term retention of knowledge workers is a particular concern for

organisations in which the specialised expertise of groups of employees, such as

engineers, is considered to provide a valuable asset in the firm‘s business operation.

Engineers belong to an occupational group whose skills are transferable, and who

are particularly likely to have multiple careers, compared with groups of employees

with more firm-specific skills (De Cieri and Kramar, 2005). A considerable body of

scholarly writing exists on engineers. Like many other knowledge workers,

engineers possess technical knowledge which is valuable to a company and their

2Engineers in Malaysia are classified under the professional occupation category which also includes

other occupations such as the architect, accountant, dentist, doctor, and lawyer (DOS, 2010c).

Official statistics suggest that engineers are a key workforce in the Malaysian labour market. For

example, in 2009, approximately 47 per cent of the registered professionals in Malaysia were

engineers (DOS, 2010c). According to a report by the Malaysian Ministry of Human Resources

(MOHR, 2011), in 2011 there were approximately 11,422 vacancies in professional related

occupations for Malaysian graduates, which accounted for 73 per cent of the total number of

vacancies in the Malaysian labour market. These data suggest that there is a critical shortage of

workers in professional related occupations, including engineers. The report also indicated that the

state of Johore had the highest vacancy rate for professional jobs, almost 57 per cent (approximately

6503 professional vacancies).

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leaving may affect any organisation which relies on their knowledge as well as

specialised experience, skills and expertise. This study recognises engineers as

prototypical knowledge workers; hence they are the occupational group chosen for

this study. Engineers were also chosen for this study because of their numerical and

social significance as a group in which national education effort has been invested.

RESEARCH FOCUS AND METHODS

The focus of this study is at three levels of analysis: the labour market, the

organisation, and the individual. The central issue under investigation is whether the

overall retention of knowledge workers may be enhanced by company human

resource (HR) policies and practices at the local level. The research seeks to

determine the role of HR, both strategic and operational, in the retention of

engineers within a company. It also focuses on the level of the relationship between

the individual knowledge worker and his or her employer, as well as the influence of

the labour market factors on engineer‘s intention to stay working with their

employing organisation.

The study adopted a mixed method approach to addressing its research questions.

The availability and perceived quality of HR policies and programs in the

respondent‘s company were measured using a list of twenty-six conventional HR

initiatives such as training, career development and employee benefits. The standard

scale of the Survey of Perceived Organisational Support (SPOS, Eisenberger et al.

1986) and the Psychological Contract Inventory (PCI, Rousseau, 2008) were

adapted in the questionnaire to provide measures of the psychological processes that

may be involved in relation to engineers‘ intention to continue working in a

company. The dependent variable: intention to stay (ITS) was adapted from the PCI,

specifically from the Employee Obligations section: Employee Short-term and

Employee Stability.

The questionnaire was designed to identify which, if any, of the HR policies and

programs would influence employee retention. It allowed for the identification of

HR strategies such as the provision of long term career or training opportunities that

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might be linked to perceptions of organisational support and perceptions of

fulfilment of employers‘ obligation to employees. It also allowed for an empirical

analysis of the mediating effect of POS and PC on the relationship between HR

strategies and employee retention.

To complement the quantitative data, a separate sample of engineers working in

Johor Bahru was interviewed regarding their career paths, work experiences and

perceptions of and attitudes towards different aspects of organisations such as their

job, their relationships with the manager, and work colleagues. These complex

organisational relationships and interactions were assessed within the frameworks of

POS and PC, particularly in relation to engineers‘ identification of the forms of

organisational support provided and firms ‗deliverance of promises – implicit or

explicit – that would be most likely to induce and influence them to remain with

their employer. The interviews were utilised primarily to answer the research

questions on the link between commitment and retention, as well as to investigate

the influence of knowledge worker, labour market, and career characteristics on

engineers‘ intention to stay. These labour market and individual-levels of analysis

allowed for an identification of the characteristics of Malaysian engineers, and the

extent to which these characteristics can contribute to an understanding and

resolution of the ‗job hopping‘ issue.

An exploration of Malaysian engineering companies‘ HR policies and programs was

also conducted as part of this study. This involved a sample of HR managers or

nominated HR officers of engineering firms being interviewed regarding their

company‘s HR policies and programs as well as turnover problems and retention

strategies that may be available in Malaysian engineering firms. The interviews were

designed to investigate the role of HR department in engineering firms, and to

identify the extent to which SHRM approaches are adopted and designed to foster

engineers‘ retention. This organisational-level analysis was utilised to answer the

research questions on the case evidence of a SHRM approach to the management of

engineers in Malaysian firms, and allowed for an identification of the relevance of

the Western SHRM approaches for the retention of Malaysian engineers.

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The focus of this study is confined to investigating Malaysian engineers‘ intention to

remain in their job with a company and is limited to companies employing engineers

in Malaysia. It does not examine the occupational labour markets for the engineers,

and does not seek to contribute theoretically to the social exchange theory literature.

Rather, social exchange theory is utilised in this study in a mixed-method research

design, testing its relevance to engineers and to Malaysia.

RESEARCH SIGNIFICANCE AND CONTRIBUTION

Most psychological theories of voluntary employee turnover offer limited

understanding of the underlying cause of turnover. According to Lee and Maurer

(1997), theories of turnover tend to disagree on the specific nature of the steps

leading to quitting and mostly explain quitting as induced by certain aspects of

dissatisfaction towards the organisation. As a result, traditional turnover theories fail

to capture the larger context experienced by an employee, hence they may be unable

to explain retention factors. According to Steel and Lounsbury (2009) the literature

on the turnover process model has been discussed without regard to individual,

group, and contextual factors. The present study seeks to contribute theoretically as

well as empirically towards an understanding of how to retain knowledge workers

by examining a range of variables, from personal to organisational and labour

market factors.

Theoretically, it contributes to the modelling of the relationship between HR

strategies and employee retention, by examining the mediating effect of social

exchange – POS and PC – on this relationship. Empirically, it is the first study to

explore systematically the relevance of constructs from social exchange theory to an

understanding of the labour mobility of engineers in general, and engineers in

Malaysia in particular. This study makes a contribution to the literature by

examining intention to stay rather than intention to leave, antecedents for staying

rather than antecedents for quitting; it also acknowledges individual decision process

(social exchange), personal circumstances and career-based contextual factors

(labour market).

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Although there has been an explosion of interest in Malaysia since 2010 in the

factors affecting the sustenance of employees‘ retention, through the mobilisation of

POS and PC, there have been few studies on engineers, even though engineers are

considered the key workforce in Malaysia. Through an examination of the factors

influencing retention of engineers employed in Malaysian engineering organisations,

this study addresses the paucity of previous research in this area. It seeks to

replicate and extend previous studies based on social exchange theory and to apply

them in a new context. Thus this study explores the relevance of the concept of

reciprocity, exchange and mutual benefit in understanding the dynamics of

employer-employee relationship, particularly the extent to which POS and PC

influences engineers‘ intention to stay.

The HR literature on retention tends to espouse the utilisation of certain HR

strategies as tools for motivating employees‘ commitment and retention whilst

neglecting the psychological process that may be involved in forming the

perceptions. This study has the capacity to contribute to an understanding of this

mechanism and how it influences the link between HR strategies and employees‘

intention to continue working with an organisation. It attempts to use both concepts

of POS and PC, not only to find out the extent to which they influence the

perceptions of intention to stay amongst Malaysian engineers, but also to determine

whether either of the constructs has the capacity to mediate the relationship between

HR strategies and intention to stay. Since these concepts are based on different

principles (PC emphasises the fulfilment of employer obligation whilst POS focuses

on the extent to which employer support and care for the employees), this study has

the potential for identifying the more relevant concept to be applied by Malaysian

firms.

The research also has potential implications for HRM practice in Malaysia. Whilst

there has been much theorising by scholars as to how HRM practices affect

employee behaviour and organisational outcomes, very little is known about

employees‘ reaction to HRM practices (Guest, 1999) specifically in terms of

responses to employers‘ demonstration of responsibility and fulfilment of

obligations towards employees. Understanding the social exchange view of

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engineers will enable Malaysian organisations to utilise their HR policies and

programs more effectively, as well as allowing organisations to establish and

develop long term relationships with employees, specifically those imparting

valuable knowledge to the organisation. Understanding of employees‘ responses and

their implications for organisational outcomes will enable organisations to plan and

implement policies and practices that can influence employees‘ present and future

retention behaviours. It is a bottom-up rather than a top-down approach that this

study seeks to suggest to HR practitioners in Malaysia.

THESIS STRUCTURE

This thesis consists of eight chapters including this introductory chapter and is

presented in the manner explained below:

Chapter 2: Conceptualising engineering careers and their management, reviews the

literatures on knowledge workers, the engineering labour market, the concept of the

protean/boundaryless career, and knowledge management. This chapter develops a

theoretically informed conceptualisation of engineering careers; arguing that

knowledge workers such as engineers are concerned for the value of their

knowledge and skills, thus affecting their career aspirations. Based on the

dimensions of the boundaryless career outlined by Sullivan and Arthur (2006), this

chapter highlights the possibility that an organisation may retain its knowledge

workers by satisfying engineers‘ need for psychological mobility, for example by

providing knowledge and skills development, and firm internal career development

opportunities.

Chapter 3: Theorising firm-level approaches to the retention of knowledge workers,

shifts the focus from engineering careers to employing organisations, examining

strategies for retaining engineers within a company, by outlining the approaches,

such as career management and social exchange theory – POS and PC, in which the

employee retention issue has been defined and addressed in terms of the

determinants of commitment. The concept of intention to stay is reviewed in this

chapter in relation to commitment, turnover, retention, and a psychological-physical

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mobility model. This analysis highlights retention as the observable outcome of

intention to stay, and argues that a reciprocal employment relationship is seen as a

possible tool for theorising firm-level approaches to the retention of employees,

specifically knowledge workers.

Chapter 4: Research design and data analysis, outlines the research design and

methods used in this study. The study adopts a mixed methods approach, with a

survey of engineers and interviews with engineers and HR managers or nominated

officers. The chapter provides a detailed account of the research design adopted for

this study, including the profile of participants, research process, ethical issues, and

preliminary statistical analysis results.

Chapter 5: Managing human resources in Malaysia: The labour market context and

engineering firms‟ responses, provides a descriptive narrative of the context of

HRM and HRD in Malaysia gathered from published and unpublished documents.

It interweaves this secondary material with fieldwork data from interviews with HR

practitioners in engineering firms. This chapter examines the convergence and

divergence between Western and Asian model of HRM, focusing on the role of

Malaysian government in the management and development of HR in Malaysia.

This chapter also provides the results and findings from interviews with HR

managers or their nominated HR officers, highlighting the minimal nature of SHRM

approaches within Malaysian engineering firms. The social exchange theory

literature developed within a Malaysian context is also reviewed in this chapter to

determine the extent to which the frameworks of POS and PC have been previously

tested on engineers and in Malaysia.

Chapter 6: Factors Affecting Engineers‟ Intention to Stay, provides the results and

findings from the questionnaire survey of engineers. This chapter outlines the

positive relationships between all the variables under study and engineers‘ intention

to stay, and that career-oriented HR policies or programs emerged as the most likely

to influence engineers‘ intention to stay compared with other HR policies or

programs. Engineers‘ perceptions of the social exchange relationship, significantly

via POS were found to mediate the relationship between the quality of HR policies

or programs in a company and engineers‘ intention to stay.

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Chapter 7: A Re-examination of the Intention to Stay Factors, shifts the focus to the

complex relationship and interactions between individual engineers and their

organisations, for example with managers, in relation to engineers‘ intention to stay

working in a company. This chapter presents the findings from the interviews with

the engineers, examining how engineers‘ career aspirations, a mutual exchange

relationship, the role of organisational agents, individual circumstances, and labour

market constraints can influence engineers‘ intention to stay.

Chapter 8: Conclusion and implications, presents conclusions to the overarching

research problems and implications arising from the study.

CONCLUSION

In sum, this research took place in Malaysia, involving three-levels of analysis:

labour market, organisational, and individual levels. Engineers and HR managers or

the nominated officers from engineering firms were the participants of this study.

This chapter has provided an overview of the research background, the conceptual

model, the aims and research questions. It has justified the usage of the term

‗knowledge workers‘ for engineers in this study, and the scope of this research

which is limited to testing the relevance of social exchange theory, specifically POS

and PC to engineers and to Malaysia. This thesis argues that knowledge workers,

specifically engineers‘ intention to continue working with their employing

organisation may be influenced by specific HRM approaches, such as career

management, assessed in terms of engineers‘ feelings of organisational support and

fulfilment of employers‘ psychological contract obligation.

This thesis adopts a mixed method research approach, both quantitative and

qualitative, to investigate the complex organisational factors that influence

engineers‘ intention to stay. The approach allows for a multi-faceted understanding

of how organisational strategies interact with psychological, individual and market

factors in influencing the retention of engineers in Malaysia. In the following

chapter I outline the case for a more nuanced understanding of engineering careers

Page | 21

and their management. Extending on the developing conceptual field of social

exchange theory in the Malaysian literature, I argue that social exchange

frameworks – POS and PC – can explain engineers‘ perceptions towards their

employing organisation specifically towards specific HRM approaches, thereafter

affecting their long-term retention.

Page | 22

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CHAPTER 2

CONCEPTUALISING ENGINEERING

CAREERS AND THEIR MANAGEMENT

Page | 24

Page | 25

INTRODUCTION

The purpose of this and the following chapter is to provide conceptual tools for

analysing the problem of retaining skilled engineers, before returning in Chapter 5 to

the uses that have recently been made of these conceptual tools in Malaysian

academic, policy and organisational contexts. Whilst addressing the engineering

‗brain drain‘ is a national policy issue in Malaysia, one element of the issue is the

contribution of employing organisations to retaining their technical workers,

including engineers. The focus of this study is on the organisational factors that

might encourage engineers to continue working in a specific organisation within

Malaysia. This chapter covers relevant international literature on engineers and the

determinants of their work and career attitudes, whilst the following Chapter 3

discusses the organisational retention issue as a particular problem in the

management of an organisation‘s human resources and addresses firm-level

approaches to the retention question.

First, however, in this chapter, it is necessary to understand the retention challenges

faced by engineering employers, by reviewing the ways in which the labour market

for engineers has been conceptualised. Specifically, this chapter addresses the

problem of retention by reviewing ways of thinking about the typical labour market

behaviour of engineers as a specific group of professional or technical workers,

examining whether the concept ‗knowledge workers‘ is the most useful way of

defining engineers and their career orientation. This analysis provides a basis for a

critical review, in the following chapter, of the conceptualisations of the types of

human resource (HR) strategies, policies and practices that have been proposed for

retaining knowledge workers by meeting these career orientations.

The chapter is organised into five sections. The first discusses ways of

characterising engineering work, examines the adequacy of the concept of

knowledge work as the closest approximation to its defining characteristics and

identifies the likely consequence of these characteristics for employing organisation.

The second and third sections discuss the career characteristics of knowledge

workers, focusing on the implications of the engineering labour market both for

Page | 26

individual engineers and for firms employing them. The fourth section discusses

organisational responses to the consequences of both the engineering labour market

and the career behaviour of engineers, focusing on knowledge management and

justifying why organisations need to retain knowledge workers. The final section

identifies the key issues pertaining to the retention of knowledge workers - the fact

that they are in an occupational external labour market rather than in a firm internal

labour market, as a result of the demand for highly educated, experienced and

skilled workers.

ENGINEERS AS KNOWLEDGE WORKERS

As noted by Meiksins and Smith (1993) in an overview of engineering work in four

European countries, the USA and Japan, engineers provide a form of technical

labour that is organised in nationally-divergent ways. Although there is a general

sense that engineers are professionals, their work is seen by many Western writers as

lacking some of the defining features of the ‗true‘ or ‗traditional‘ professions such

medicine and law, in that engineers are not members of an autonomous community

with exclusive jurisdiction over an area of knowledge based on mandatory licensing

and self-regulation (Larson, 1977; Abbott, 1988). They tend to be employees, more

akin to the experts described by Brint (1994), whose social role is defined in terms

of service provision to the business community. Particularly in later-industrialising

economies, engineers have been described as technical elites, employed in industrial

organisations and often playing a quasi-managerial role. The Japanese ‗corporate‘

model of engineering work was based on internal labour markets, whereby engineers

were recruited from university and given projects early on, building their careers

within the one organisation (Meiksins and Smith 1993). There is debate over the

extent to which the Japanese lifelong employment model has weakened, particularly

in the case of engineers and scientists (Wolff, 2008; Nakata and Miyakazi, 2012).

Alvesson (2004:31) uses the term ‗professional work‘ as a synonym for knowledge-

intensive work. He defines a profession as an occupation that is based on a

systematic and scientific theory, involves a long and standardised formal education,

is certified and possesses autonomy at work. The term ‗professional‘ is used in

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official publications to classify Malaysian engineers (DOS, 2010a). Based on a

document published by LHDN Malaysia (2009), ‗professional‘ refers to an

individual who belongs in a profession recognised by Malaysian statutory

legislation, and who may belong to a particular professional body representing the

profession or be registered with the relevant professional body. In Malaysia, certain

professionals such as engineers and accountants are required to be members of

particular professional bodies in order to practise and to secure legal professional

status. In contrast to other professions such as doctors and architects, these

professionals are required to register with relevant corporate bodies approved by the

government of Malaysia. This classification suggests that Malaysian engineers are

professionals and possess distinct exclusiveness in comparison to non-professionals,

particularly in the aspect of professional licensing as a result of their specific

expertise and qualifications. This conforms with definitions of professionals in terms

of power, status, income, and prestige (Halmos, 1973).

The concept of ‗knowledge work‘, in contrast, is an alternative theorisation of

expertise, and one that in Western commentaries leads to a rather different and less

bureaucratic conceptualisation of professional careers. It had three different focuses

– on knowledge work, on knowledge workers and on knowledge management. The

notion of knowledge work was developed by writers at the interface of the academic

and the consultancy management literatures. It was initiated in the United States in

the 1950s and was primarily based on the theorisation of a shift from the industrial

age into the information age (Cortada, 1998). Drucker (1969) introduced the idea of

knowledge as a central economic resource in its own right. Knowledge work is seen

as an intangible asset, and knowledge workers are seen as core sources of talent,

human, intellectual or social capital (Barney, 1991; Schuler and Jackson, 1999;

Delahaye in Wiesner and Millet, 2003). Drucker (1969), referred to knowledgeable

people variously as ‗capital‘, ‗engineering talent‘ and ‗knowledge workers‘, and saw

them as the source of new technology, products and processes as well as changes in

the design of organisations in the course of generating new ideas.

The term ‗knowledge management‘ arises as a consequence of the emphasis on

knowledge as a source of value, seen as a critical differentiator among organisations,

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based on approaches to managing intellectual capital (Meso and Smith, 2000).

According to Nonaka, two types of knowledge reside in any organisation – tacit and

explicit knowledge. Tacit knowledge consists of mental models, beliefs and

persuasions of each individual employee which have the capacity to influence their

actions and commitment: it is seen as harder to distinguish than explicit knowledge

(Nonaka, 1991). Explicit knowledge, in contrast, refers to cognitive knowledge,

advanced systems skills, and systems understanding which are all normally

captured, shared and communicated by organisations (Meso and Smith, 2000).

According to Meso and Smith (2000), the creation of new knowledge by individual

employees results in innovation which is critical if an organisation is to achieve a

sustainable competitive advantage.

Knowledge management is thus described as the process of capturing the collective

expertise and intelligence in an organisation and utilising them to encourage

innovation through continued organisational learning by enhancing the exchange

and sharing of tacit and explicit knowledge (Nonaka, 1991; Quinn et al., 1996;

Davenport, Long and Beers, 1998). Furthermore, the changes in the design of

organisations in the course of generating new ideas require a different structure of

relationships among people. This reorganisation of working relationships has also

been termed knowledge management (Drucker, 1969; Myers, 1996; Davenport,

2005; Little and Ray, 2005; DeFillippi et al., 2006). This raises the question, of

whether knowledge management, defined in terms of the mobilisation of

organisation-specific knowledge, is compatible with the degree of ‗job hopping‘ by

Malaysian engineers, discussed in Chapter 1.

Whilst the professionalism literature saw engineers as being drawn more and more

into corporate bureaucracies (Abbott, 1988), Drucker (1969) focused his analysis of

engineers on the emergence of a new form of capital in engineering firms, which he

saw as knowledge-based and knowledge-intensive. He saw the science of

engineering as creating new technologies and new industries which rely on

knowledge and which employ predominantly knowledge workers rather than manual

workers (Drucker, 1969). Knowledge work is believed to be less structured than

administrative or production work (Davenport, 2005). Whilst the terms ‗knowledge

Page | 29

economy‘ and ‗knowledge worker‘ are prevalent in Malaysian public policy

documents, as Chapter 1 showed, the Western literature on knowledge-intensive

firms has had a slightly narrower focus. It has tended to focus on two main types of

firms – firstly those offering professional and consulting services such as law and

accountancy , or computer consultancy and engineering firms, and secondly,

research and development type firms such as biotech companies and high tech

companies based on engineering knowledge (Alvesson, 2004). The type of firm

analysed by Alvesson was similar to Mintzberg‘s (1983) adhocracy. Whilst

Mintzberg (1983) acknowledged that what he termed skilled techno structure

workers can exist in organisations of any structural type, he felt that they are most

comfortable in a structural configuration where they can exercise a degree of

autonomy as well as power derived from expertise. Identification of the nature of

engineering work in Malaysia thus may help to establish the extent to which this

Western version of the autonomous knowledge worker concept applies to Malaysian

engineers, particularly in comparison to non-knowledge workers.

The knowledge worker literature, like the literature on professionalism, identifies as

an essential criterion the possession of a tertiary qualification based on a

standardised education system. It places emphasis on the capacity to work with

ideas, symbols and abstractions, and also the capacity to mobilise information to

solve novel and complex problems (Drucker, 1969; Lee and Maurer, 1997; Swart in

Boxall et al., 2007). According to this definition, engineers are labelled as

knowledge workers by many writers, such as Lee and Maurer (1997), Cortada

(1998) and D‘Costa in Solimano (2008). This characterisation of engineers can be

traced back to Drucker (1969), although his work lacks detailed description of either

the characteristics of a knowledge worker or of engineering talent.

Drucker based his characterisation on a simplistic distinction between knowledge

workers and those less creative, be they ‗labourers‘, ‗employees‘, ‗subordinates‘ or

‗professionals‘ (1969: 259). He argues that whilst knowledge workers are employees

in the sense that they have an employment contract with an employer, they are not

subject to the subordination normally entailed in the employment relationship. They

are paid, not for compliance, but instead for applying knowledge and judgement in

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work. Although knowledge workers in general are employees of an organisation,

individually, they are professionals in a more equal exchange relationship than other

workers. Whilst they depend on the organisation for their salary and for the job, they

believe that the organisation is equally dependent on their knowledge (Drucker,

1969). According to Alvesson (2004), knowledge workers are the main entity of

knowledge intensive companies; their intellectual and analytical work require

extensive theoretical education and experience, equipping them to deal with non-

routine and creative work and are able to adapt to specific circumstances. This raises

questions of the nature of the employment relationship between managers and

engineers. Brief reference was made in Chapter 1 to government proposals for a

review of the labour relations context, and this question will be considered in

Chapter 5.

Crucially, Alvesson‘s inclusion of autonomy amongst the defining characteristics of

knowledge work is a move in the opposite direction from that taken by writers

within the professionalism literature such as Abbott (1988) who have emphasised

the incorporation of the careers of qualified technical workers into bureaucratic

organisations. Alvesson (2004) defines knowledge workers as possessing a high

degree of expertise or experience whereby the primary purpose of their jobs involves

the creation, distribution and application of knowledge. His definition of a

knowledge worker is more specific than Drucker‘s and distinguishes between

knowledge workers and workers using knowledge on the job. Davenport (2005) has

narrowed the concept of knowledge worker to the type of professional worker who

craves autonomy, may be reluctant to share knowledge but is highly sensitive to

procedural fairness as a condition of commitment to any organisation. Questions of

the relationship between perceived organisational justice and commitment are

pursued in general in Chapter 3 and in the Malaysian context in Chapter 5.

An important highlight from the reviews of the knowledge worker literature is that

knowledge workers are aware of their value, specifically the value of their

knowledge and skills to an organisation. As a result they appear to have a different

relationship with their employer from that of manual workers. Knowledge workers

seem to expect their organisations to regard their importance to the company‘s

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overall performance. This expectation refers to a mutual exchange of relationship

between the knowledge workers and their employing organisation which apparently

according to Davenport (2005) has the capacity to influence their organisational

commitment. This suggests that one key to solving the problem of retention is by

acknowledging the value of knowledge workers to their organisation especially in

comparison to manual workers.

Thus conceptualisations of knowledge work and professional work raise a number

of issues to be explored in relation to Malaysian engineers in an effort to identify

factors that might contribute to the capacity of firms, and of the country as a whole,

to retain them. These considerations lead to the formulation of the following

question:

Research Question 1

Are there particular characteristics of engineers that could be considered in the

Malaysian context, in order to address retention issues?

1a. What knowledge/professional worker attributes apply to Malaysian

engineers?

1b. Can Malaysian engineers’ turnover behaviour be modified by the

management and regulation of working relationships?

The review of the literature outlined above would suggest that knowledge workers

may become more committed to their employing organisation if it acknowledges

their knowledge and skills contribution. However, the following two sections show

that there are likely to be strong countervailing tendencies. The first discusses

Western theorising of labour demand factors and the structure of employment for

professionals and knowledge workers, whilst the second discusses the supply

behaviour of professionals and knowledge workers in navigating the types of labour

market available for them. Both literatures seem to suggest that knowledge workers‘

commitment may be tied, not to particular firms, but to a wider occupational labour

market and that their commitment to the pursuit of an occupational career may be

stronger than their intention to continue working within any one employing

organisation beyond the very short term.

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THE LABOUR MARKET FOR ENGINEERS

Discussion of individual labour market mobility as a problem in knowledge work

dates back the emergence of the discourse of knowledge work and knowledge

workers. Drucker (1969) suggested that knowledge workers are easily bored with

their jobs because their attitudes towards jobs and careers are different from those of

manual workers. Citing Drucker, Solimano (2008) sees knowledge workers as

actively pursuing the gaining and enhancement of knowledge and skills, because

their definition of job security is the ability to learn fast. Knowledge workers‘

turnover and mobility are also seen as being spurred by factors such as an

organisation‘s lack of respect for intellectual property rights, resulting from

devaluation of their knowledge contribution (Solimano 2008). The argument is that

the growing pace of technological development and intense competition is creating a

substantial demand for technical experts to work with new machines and equipment

of rapidly growing sophistication. This demand creates alternative employment

opportunities, with incentives for knowledge workers to quit and move to another

company. Highly educated workers with portable knowledge and skills can make

transitions readily (Solimano, 2008).

Cortada and Woods (2000) argue that knowledge workers are able to mobilise their

knowledge and experience and transfer it into multiple workplaces, in contrast with

manual workers whose experience and knowledge are valuable only at their current

company. This portability of qualifications and adaptability in transferring skills is

thought to result in knowledge workers‘ higher mobility levels (De Cieri and

Kramar, 2005) and greater incidence of multiple careers throughout their life

(Cortada and Woods, 2000). Nevertheless, they have the tendency to stay in the

same profession throughout their careers (Meyer and Herscovitch, 2001). This

implies that knowledge workers are probably in occupational labour markets instead

of a firm-internal labour market.

The concept of the internal labour market can be traced to Becker‘s (1962) work on

human capital investment. Becker (1962) suggested that certain types of training can

increase the retention of employees; hence investment in training is thought to

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modify employees‘ turnover behaviour. Piore and Doeringer (1971) contested the

generality of this claim, arguing that the creation of internal labour markets involves

interaction within social groups rather than relying simply on individuals‘

investment in training. Their model of social interaction within an organisation was

one in which workers, as a group, interacted with management whilst management

interacted with trade unions to negotiate labour rules. This mechanism however

isolated individual workers who were not part of a group, as benefits were

distributed on the basis of relativity to group norms, rather than individual

productivity. Consequently, individual members were believed to continually

compare the benefits of being in the internal and external labour market. Individual

workers were seen to be working as part of a group in an internal labour market

whilst concurrently working individually- a characteristic of the external labour

market (Piore and Doeringer, 1971). These different theoretical approaches –

economic assumptions of individual utility maximisation versus sociological

analyses of the effects of group norms – provided different behavioural foundations

for the internal labour market concept (Osterman, 1987). Applied to engineers, this

analysis suggests that strong internal ‗pull‘ factors, based on collaborative project

work, will be needed to counteract the strong ‗pull‘ that the external labour market

exerts on them as individuals.

Writing of the USA, Osterman (1987) identified a range of historical approaches

adopted by firms to creating internal labour markets and in responding to

occupational labour markets. Within firms, employees might be allocated to a labour

market based on seniority rights, or to a salaried labour market in which career

progression was based on merit. In both cases, employees would have secure

expectations of promotion or wage increments within the firm, as characterised by

the career patterns of many professionals in bureaucracies. By contrast, internal

career paths were also needed if it was important to retain workers whose skills were

obtained from external organisations and were not firm specific, otherwise external

mobility and high turnover were expected. As well, Osterman identified two

secondary labour market subsystems for manual workers lacking any form of career

mobility either inside or outside the firm: those who remained inside the firm at least

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had job security whilst those outside the firm were in what was virtually a ‗spot‘

labour market in which they were engaged and let go as and when required.

Internal labour markets are seen as becoming less relevant as a result of the

acceleration of technological progress and organisational change, the reduction of

hierarchical job ladders and an increasing demand for abstract skills and science

based competencies rather than step by step on the job training (Lutz in Köhler et

al., 2006). Nevertheless, there has been recent interest in Europe in revisiting

theories of the interaction between internal and external labour markets (Lutz in

Altmann et al., 1992). Köhler et al. (2006) have adapted Osterman‘s analysis to

create a fourfold grid of primary and secondary internal and external labour markets.

In this model, the primary internal firm employment subsystem provides long-term

employment security and career ladders, on the basis either of seniority (closed

systems) or performance (partly-closed systems). The secondary internal firm

employment subsystem combines continuity with low pay and no career. External

firm employment subsystems are based on ongoing exchange with external labour

markets, but provide an institutional structure within which occupational groups can

circulate with some security and opportunities for skill development (partly-open

systems). As a result, knowledge workers may be able to use free movement in

external occupational labour markets, in order to negotiate mobility within internal

labour markets. Their bargaining power derives from the fact that organisations are

thought to have diminished control over the retention of knowledge workers as a

result of individual and organisational networks (Swart in Boxall et al., 2007).

Marshall‘s labour market segmentation theory, by contrast, suggests that the division

of labour based on occupational, geographical, or industrial categories, has an

implication for individual career mobility, specifically the free movement between

different occupational labour markets (Marshall, 1998). According to Marshall

(1998), workers with specific skills and specialisation are unable to switch between

occupations requiring different skills and extensive investment in training and

qualifications. For example nurses and doctors belong in separate occupational

labour markets, although they may be employed within the same organisation. In

industrially segmented labour markets for example for police officers, retention long

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after training may be combined with geographical and internal career mobility based

on skill specialisations. Geographically segmented labour markets have an

implication for the inequality of wages, for instance between workers in the rural

and urban areas and thus may restrict the movement of labour , whilst substantially

greater earning potential may be a strong ‗pull‘ factor towards larger urban areas. .

This analysis suggests that although workers may be able to move freely in external

occupational labour markets, this capacity may in fact apply only to a specific

segment of an occupational labour market. Firm-internal geographical mobility is in

part a function of organisational size, and is growing with the rise of global firms.

Historically, Japan‘s large engineering firms combined lifelong employment with

geographical mobility. Nakata and Miyakazi (2012) claim that the strength of

internal labour markets and the relative weakness of external labour markets for

engineers in that country has inhibited innovation, although externalisation is now

occurring across all age groups of engineers.

This analysis suggests that strategies and policies relating to the retention of

engineers must balance a range of considerations: internal and external career paths

and development opportunities; firm size and geographical location; and questions

of innovation versus stagnation and depth versus breadth of expertise. The relevance

of these analyses will thus be investigated in the study in order to determine the

existing and optimal type of labour market for Malaysian engineers.

Research Question 2

How do the characteristics of the labour market(s) for Malaysian engineers

influence their retention patterns and turnover intentions?

2a. What are some key characteristics of the Malaysian engineering labour

market(s)

2b. How can an understanding of these characteristics contribute to an

understanding and resolution of the ‘job hopping’ issue?

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THE CAREER BEHAVIOUR OF ENGINEERS

There are two ways to conceptualise the problem of retention amongst knowledge

workers. First is the emergence of new career systems which differ from the rigid

structures of climbing organisational hierarchical ladders. This has important

consequences for employee commitment, especially that of knowledge workers.

The first strand of this literature emphasises the difficulty faced by organisations in

providing stable employment for their employees as a result of inevitable intra-

organisational changes resulting from various contextual factors occurring over time

(Baruch, 2004; Arthur et al., 2005). The second strand emphasises the

transformation of employees‘ perspectives on career planning and management

(Baruch, 2004). Whilst this analysis may well understate growing levels of labour

market insecurity, it is also likely that changes in individual career aspirations have

led to inter-organisational mobility which is an attribute of the ‗boundaryless career‘

(Arthur et al., 2005). The ‗boundaryless career‘ is defined as ‗...a sequence of job

opportunities that go beyond the boundaries of a single employment setting‘

(DeFilippi and Arthur, 1996: 116). This concept is discussed further below, but it is

worth noting in passing that the concept started to be used by Western commentators

in the 1990s, just at the time when labour market flexibility and insecurity grew and

internal labour markets began to decline. Thus the question of engineers‘ career

behaviour must address the complex question of relationship between individual

motivations and labour market circumstances.

Schein (1978) introduced the idea of career anchors, defined as ‗the perceived

abilities, values, attitudes and motives that people have, which determine their career

aspirations and direction‘ (Baruch, 2004:79). These career anchors include technical

competencies, managerial competencies, security and stability,

entrepreneurship/creativity, and autonomy/independence (Schein, 1978), dedication

to a cause, pure challenge, and life style (Schein, 1985), employability, work/family

balance, and spiritual purpose (Baruch, 2004). This differentiated career concept

suggests that people will have prioritised preferences for specific career anchors. For

instance, a person who aspires to security and stability may seek secure and stable

employment over employment that is challenging and riskier. Nevertheless,

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according to Baruch (2004), these career anchors are not definite in nature and new

anchors may be added to an individual‘s framework or to replace certain original

anchors. This suggests that the concept of career anchors underpinning individual

career models emphasises individuals‘ responsibility towards their own career

agenda, but also takes account of individuals‘ specific and often changing needs.

The individual career model of Greenhaus, Callanan and Godshalk (2000) suggests

that individual employees are responsible for their career decisions, and that their

particular career orientations lead to the pursuit of a process for enacting these

decisions. According to this model, the organisation and other extra-organisational

factors such as the family play an external role in the career decision process. This

model however is thought by some critics to underplay the role of the organisation,

especially in the aspect of planning and managing individual employees‘ careers

(Baruch, 2004).

The concept of the protean career is an innovative concept of an individually-

focused career (Baruch, 2004) which continuously adapts to the changes within the

person and the environment (Hall, 1996). It was first introduced in 1976 by Hall and

has gained wide recognition since the 1990s (Baruch, 2004). Hall and Mirvis (1996)

describe the protean career as a new form whereby individuals rather than

organisation take responsibility for career decisions. An important feature of this

theory is that individuals may change their career path at their will, which suggests a

subjective dimension to individual careers. This model however implies a lack of

organisational control over or even input into individuals‘ career decisions. This

very individualistic career model suggests that the problem of employee retention

lies in the individuals‘ career aspirations.

The protean career concept has often been confused with the notion of the

boundaryless career, although the two concepts do not completely overlap. In an

early formulation of the boundaryless career concept, Sullivan (1999) defined it as a

response to growing patterns of job insecurity. Individuals were no longer able to

offer loyalty in exchange for the job security characteristic of traditional career in

internal labour markets. Instead, the boundaryless career model saw employees as

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exchanging performance and flexibility for employability – the development of

portable skills based on learning opportunities provided during their time with a firm

(Sullivan, 1999). At first sight, this model does not seem to offer a solution to the

Malaysian problem of job hopping, in that its focus is more on the emergence of

short-term jobs, rather than on job hopping. Nevertheless, it raises two questions that

are of considerable relevance. First, to what extent is the engineering mobility

problem a result of firm behaviour? Are Malaysian employers offering secure jobs

to engineers? Second, even if the short-term employment patterns are arising from

the employee side, are employers providing employability in the form of ample

learning opportunities during the engagement? If all employers were providing this

sort of learning, would engineer mobility matter so much? The problem is, of

course, that employers are unlikely to invest heavily in providing on-the-job

development opportunities for knowledge workers who will move on for example in

three years.

Following the work of Arthur and Rousseau (1996) on the boundaryless career,

Sullivan and Arthur (2006) provide an alternative analysis that provides the basis for

a more fruitful solution. They present a model that attempts to visually capture the

boundaryless career concept (Figure 2.1). They argue that the boundaryless career

has to be defined in terms of two dimensions: its physical and the psychological

aspects. Physical mobility refers to actual movement between jobs, organisations,

occupations, and countries, or movements which do not fit the expected career

structures, whilst psychological mobility refers to the person‘s perceptions of career

structures and their beliefs about how much they are constrained by these structures

or can transcend them. Both are important in the face of the growing complexity of

factors than can influence career decisions. The Sullivan-Arthur model of the

boundaryless career is categorised into four quadrants which represent varying

levels of physical and psychological mobility and the interdependence between

them. Figure 2.1 presents this model of boundaryless careers.

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Figure 2.1: Dimensions of the boundaryless career

Sullivan and Arthur (2006:22)

One of the propositions of the model put forward by Sullivan and Arthur (2006)

highlights knowledge competencies as a trigger factor for career mobility apart from

gender, culture and individual characteristics. They argue that employees with

greater career competencies, specifically knowledge competencies, will have more

opportunities for both physical and psychological mobility than those with lower

competencies. The proposition appears to build on an earlier model of inter-

organisational mobility developed by Arthur et al. (2005).

According to Arthur et al. (2005), inter-organisational mobility and extra-

organisational support are two attributes of the boundaryless career theory related to

career success. The first attribute concerns a fundamental shift in the career system

which is thought to have resulted from the decline of the lifetime employment

model, whilst the latter, with its focus on extra-organisational support, emphasises

that career support can derive from certain relevant peer groups or work related

communities rather than support from within the same organisation. An important

highlight of the work of Arthur et al. (2005) is that inter-organisational mobility

does not necessarily imply movement between employers. Instead the opportunity

can involve leveraging highly marketable skills to renegotiate one‘s current

employment contract. Furthermore, greater extra-organisational support such as

career mentoring relationships can extend beyond the workplace. Both attributes of

boundaryless career theory are seen as offering a challenge to organisations in their

efforts to influence individual employees‘ careers (Arthur et al., 2005). In contrast,

Page | 40

Sullivan and Arthur (2006) have clarified the concept of the boundaryless career by

assessing mobility along physical and psychological continua as well as anticipating

contextual factors affecting career mobility.

The key distinction to draw from this analysis is that the notion of the protean

career is a concept defining the problem of employee retention as a result of

individuals‘ subjective career aspirations, whilst the notion of the boundaryless

career is a concept which sees the organisation as responding to emerging career

behaviours. Both of these concepts suggest that at least some individual employees

are likely to have multiple careers in their lifetime as a result of their movements

between several different jobs in pursuit of their specific career decisions. However,

an important inclusion in the boundaryless career concept is its focus on the

intention as well as the actual career mobility of individual employees which

indicates an edge especially for skilled employees i.e. knowledge workers over non-

skilled employees i.e. manual workers (Arthur et al., 2005; Sullivan and Arthur,

2006).

Furthermore, Sullivan and Arthur‘s boundaryless career model offers a solution for

organisations in dealing with the problem of employee retention. Their model

suggests that organisation has the capacity to influence individual employees‘

psychological mobility which could in turn influence their physical mobility. This

may be achieved by altering the psychological employment contract (Sullivan,

1999) and providing organisational support particularly in the aspect of career

support and mentoring for employees (Arthur et al., 2005). Whereas the traditional

career success is measured by pay, promotion, or status, the measure of success in a

boundaryless career is psychologically meaningful work.

Briscoe, Hall and DeMuth (2006) take this argument further, positing that while

learning and job hopping are correlated, they are not necessarily both components of

a protean career. Importantly for this thesis, they argue that the protean or self-

directed career may not require either external points of reference or physical

mobility. They see the boundaryless and inter-firm mobility mindsets as distinct. It

is possible for individuals to make independent, inner-directed choices and to

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collaborate within a wider occupational community, without job-hopping: ‗… a

person could embrace a boundaryless mindset, yet rely on one organisation to

develop and foster his or her career‘ (Briscoe et al., 2006: 32).

The extent to which both the psychological contract and organisational support can

influence individual employees‘ psychological mobility, specifically their intention

to continue working with their employing organisation will thus be investigated in

the study, testing the relevance of both concepts for Malaysian engineers. A first

step is to identify the career behaviour of Malaysian engineers and how it

contributes to the problem of employee retention in Malaysia.

Research Question 3

Are the concepts of either the protean or the boundaryless career helpful in

analysing the turnover intentions of Malaysian engineers?

3a. To what extent do Malaysian engineers pursue internally-driven career

trajectories, and to what extent are they responding to external

contingencies?

3b. To what extent do they value learning opportunities and psychological

mobility, and to what extent are they experiencing these?

THE MANAGEMENT OF KNOWLEDGE WORKERS

The earlier discussion has explained several ways to conceptualise the problem of

employee retention, specifically that of knowledge workers, including engineers.

The analysis appears to suggest that skilled employees are harder to retain than non-

skilled employees, since employees who possess greater knowledge and skill

competencies are more likely to have more opportunities to move between jobs than

those with lower competencies. Briefly, engineers, being knowledge workers, who

demonstrating protean or boundaryless career behaviour, and have opportunities to

participate in various labour markets, are more likely to exhibit a lower intention to

stay in their employing organisation than those non-knowledge workers who have a

measure of job security but lack portable skills . Nevertheless, it has already been

suggested that there is a psychological, as well as a physical, dimension to career

Page | 42

mobility. This section explores the possibility that knowledge workers can be

managed in a way that reduces physical turnover rates by enhancing the

psychological dimensions of their careers.

We therefore turn now to the demand-side question: under what circumstances are

firms anxious to retain the services of knowledge workers who operate in an

external labour market, and whose career aspirations are not restricted to the firm?

According to the resource-based view of the firm theory, a firm seeks to utilise its

resources – tangible and intangible – in order to achieve its strategic objectives

(Boxall and Purcell, 2008). The resource-based view of the firm suggests that

employees are valuable assets to the organisation and therefore they need to be

retained especially for organisations to achieve a sustainable competitive advantage

(Barney, 1991). Organisations which attract and retain individual talents have the

possibility of generating ‗human capital advantage‘ (Boxall, 1996, 1998). In

contrast, organisations which experience high employee turnover, especially among

the skilled employees, are more vulnerable and the effect of turnover can be

devastating (Coff, 1997, 1999). This is because, according to Boxall and Purcell

(2008), individual employees‘ tacit knowledge cannot be captured by organisations,

rather it belongs exclusively to the individuals. When skilled employees leave the

organisations, they bring along their job know-how and other knowledge and skills

with them. This loss is likely to be more substantial when it involves high-skill jobs:

as job complexity increases, so does the range of employees‘ performance (Hunter,

Schmidt and Judiesch, 1990). Knowledge is thus increasingly becoming an

important resource for organisation (Delahaye in Wiesner and Millet, 2003).

Moreover, the loss of a particular skilled employee may also affect the cohesiveness

of employee relationships in the organisation as individual human capital is

embedded in a social context – the quality of social capital (for example Goshal and

Nahapiet, 1998; Swart and Kinnie, 2003; Collins and Smith, 2006). Organisational

processes such as team-based learning, high levels of trust and cooperation between

management and employees and amongst employees are processes which are very

difficult to imitate (Schuler and Jackson, 1999; Boxall and Purcell, 2008). As Boxall

and Purcell (2008:102) point out, ‗Both human capital and social capital can

Page | 43

generate exceptional value but are likely to do so much more powerfully when they

reinforce each other‘.

According to Delahaye in Wiesner and Millet (2003), knowledge that is viewed as

an organisational asset predominantly resides in the minds of its employees rather

than in business systems, for instance in computer programs and databases.

Knowledge is a unique source of advantage for organisations for a number of

reasons (Sveiby, 1997; Delahaye, 2000). First, unlike tangible resources, knowledge

is not intrinsically scarce and may be created by the human mind without the use of

costly external resources. Second, although information is a readily available

resource, it has no inherent use until it is accessed and acted on appropriately by an

individual who generates knowledge from this information. Third, knowledge has

the capacity to provide an indefinite valuable resource for organisations due to its

intangible nature. Fourth, knowledge grows from sharing with other individuals and

does not disappear when given away like physical resources. Fifth, the power of

knowledge can be very significant to organisation even if it is created by one

individual employee. Finally, whereas physical output may be subjected to

copyrights or patents, no person or organisation can copyright or patent an idea

generated from knowledge. This analysis suggests the distinct feature of knowledge

which needs to be managed by organisations in order to reap its benefits.

In sum, this section highlights that knowledge workers, either individually or

collectively, have the capacity to be valuable for organisations. The implications for

an individual firm of the loss of engineers‘ tacit knowledge will thus be investigated

in this thesis. It is mainly to examine the relevance of the retention of knowledge

workers, particularly when knowledge workers are seen to be operating in an

external labour market and whose career aspirations involve multiple careers.

Research Question 4

What case can be made for Malaysian organisations to adopt human

resource/knowledge management practices designed to foster engineers’ skill

development and retention?

Page | 44

CONCLUSION

This chapter has reviewed the literature which contains suggestions that Malaysian

engineers may be considered as a type of knowledge workers who possess distinct

characteristics that differentiate them from manual workers, particularly in their

attitudes to the contribution of their own knowledge and skills. It has explored ways

in which organisations may treat these contributions. A review of the labour market

and career literatures suggest that retaining engineers will be no easy task.

Knowledge workers are not easily retained, owing to their distinct career

characteristics compared to those of non-knowledge workers. If countries were

arranged along a spectrum according to degree of reliance on external rather than

internal labour markets, Malaysia would be at the high external labour market end.

Firstly, the review of the labour market literature has highlighted that knowledge

workers are more likely to remain within their occupational labour market than to

change professions in order to continually gain and enhance their profession-related

knowledge and skills. Based on Köhler et al. (2006), knowledge and skill

development needs can be satisfied by knowledge workers‘ participating in either an

external or an internal firm labour market. Secondly, the Western career literature

highlights that employees in general, and knowledge workers in particular, no longer

have job security as a result of the inevitable change within organisation which

affects the traditional career system of a long-term and secure employment. The

extent to which this is an issue in Malaysia requires investigation. Labour market

change, and also a change of employees‘ career aspirations may have contributed to

the problem of employee retention. Whilst the first concerns inter-organisational

mobility, the latter suggests that employees‘ career decisions are the result of

subjective individuals‘ career aspiration.

Based on Sullivan and Arthur (2006), both phenomena however may be more

apparent amongst skilled employees than non-skilled employees. Nevertheless, these

writers, as well as Briscoe, Hall and DeMuth (2006), argue the need to distinguish

between psychological mobility and physical mobility in the form of turnover. They

suggest that organisations may have the capacity to influence individual employees‘

Page | 45

career aspirations by providing opportunities which satisfy their needs for

knowledge and skills development, as well as career advancement. Briefly this

literature highlights a possibility for an organisation to retain its skilled employees

on the basis of a new set of terms of employment; that is by providing knowledge

and skills development, and firm internal career development opportunities for the

employees instead of the old terms of life time employment. If a regulatory or

policy climate could be generated that fostered such firm behaviour, the adverse

impacts of job hopping could possibly be mitigated.

In summary, this chapter has highlighted that the problem of retention, particularly

for engineers is contributed by several factors specific to engineers – their

characteristics as knowledge workers, their type of labour market, and their career

aspirations. However, not much is known about engineers in Malaysia, specifically

their career behaviour in relation to their retention behaviour. All these aspects will

be investigated empirically in this study. Whilst this chapter has mainly focused on

discussing the careers of engineers, Chapter 3 shifts the focus to employing

organisations. It provides a theoretical basis for analysing strategies for retaining

engineers within a company, by outlining the ways in which the employee retention

issue has been defined and addressed in terms of the determinants of commitment.

Page | 46

Page | 47

CHAPTER 3

THEORISING FIRM-LEVEL

APPROACHES TO THE RETENTION OF

KNOWLEDGE WORKERS

Page | 48

Page | 49

INTRODUCTION

Chapter 2 established that engineers provide an important knowledge resource in

Malaysia, and that no small part of the problem of managing this resource lies in

finding a way to address engineers‘ labour market behaviour. The explicit

knowledge and some of the tacit knowledge that they possess can be transferred into

a range of work settings, making it hard for individual firms to retain engineers.

Because knowledge workers regard their knowledge as valuable to themselves and

attempt to maximise their value in the labour market, they seek to maintain their

employability by updating their knowledge and skill competencies.

Nevertheless it was established at the end of Chapter 2 that this is not the end of the

story. Analyses by Sullivan and Arthur (2006) and Briscoe et al. (2006) opened up

the possibility that careers may be ‗boundaryless‘ in two dimensions – the

psychological as well as the physical. As a result it was suggested that knowledge

workers may remain attached to an organisation that allows them the psychological

freedom to pursue their intellectual values and interests, and provides scope for

learning. In particular, tacit knowledge may not be portable, so job hopping may

result in loss of opportunity to deepen expertise. So this chapter provides an

overview of what has been written on ways in which inner-directed career choices

and the opportunity to collaborate within a wider occupational community may be

fostered alongside organisational commitment through Human Resource

Management (HRM) approaches.

The terms ‗knowledge worker‘, ‗intellectual capital‘, and ‗protean‘ or

‗boundaryless‘ career have been coined to define the qualities of individual workers

who are both attractive to employers and yet difficult to retain. There is however

not yet a term to describe the qualities of firms that are most likely to be attractive to

employees and to encourage them to stay and build their careers within their

employing organisation. It is thus the goal of this thesis to find out what these firm

qualities might be in the Malaysian context, and how they could enhance the

retention of employees. Once these qualities are defined, then organisations,

Page | 50

specifically engineering companies may have a clearer understanding of the benefits

of developing them.

The analysis is organised into five sections, designed to draw out the constructs that

are applied and tested in HRM. The defining characteristic of Western HRM is its

focus on the firm as a bundle of human and non-human resources or assets to be

managed (Beer et al., 1984; Barney, 1991). Hence Western HRM focuses on the

strategic management of intra-firm relationships. The first section of the chapter

reviews the distinction drawn between strategic human resource management

(SHRM) and operational personnel management, in a conceptualisation combining

influences from both human capital theory and the resource-based view of the firm.

As a background to a wider discussion in Chapter 5 of whether HRM practices are

converging globally, this section of Chapter 3 also reviews and briefly discusses the

influence of Japanese HRM on Western and Malaysian HRM.

A key focus of this chapter is the ways in which HRM has addressed the turnover

issue through retention strategies based on the mobilisation of employee

commitment. The second section of the chapter covers the concept of commitment

from several perspectives. A high performance/high commitment transformation

model has been suggested as particularly pertinent to the Malaysian context (Todd,

Lansbury and Davis, 2004a, 2004b). The strand of SHRM thinking that links high

performance and high commitment is therefore outlined. The section then provides

a critical overview of theories of employee commitment in the HR literature in

general, outlining conceptualisations of how an organisation‘s HR roles and

functions may shape employee commitment, whilst responding to individual

employees‘ externally-oriented boundaryless career behaviour. This discussion

includes a review of several studies of professional versus organisational

commitment.

The third section considers the application of SHRM through programs and

practices, with a focus on career management. It begins the task of defining

constructs that can be operationalised for testing in the empirical chapters of the

thesis – specifically by defining HR practices that might influence engineers‘

Page | 51

commitment to a firm. Of the trinity of HRM objectives – attracting, retaining and

developing human ‗assets‘ - the second is the focus in this thesis, although the

discussion of the boundaryless career concept suggests that for engineers, there will

be no retention without development opportunities. Career management is reviewed

in terms of the facilitation of career advancement, and learning and development

opportunities for employees. Both of these HR strategies, policies or practices

appear to have the capacity to respond to individual employees‘ career needs for

enhanced knowledge and skills, long-term career stability, and increased

employability, whilst concurrently enabling organisations to retain their skilled

employees, and more importantly providing organisation with a committed and

thriving pool of employees.

The fourth and fifth sections of this chapter continue using theoretical constructs to

derive elements of a testable model. The concept of organisational commitment is

one that HRM theorists have drawn from the closely related disciplinary field of

organisational behaviour, and is based on constructs developed by organisational

psychologists. It is part of a literature that seeks to identify links among

organisational management practices and employee attitudes (such as intention to

stay) and behaviour (such as retention). There are now a number of Malaysian

studies linking commitment and retention (see Chapter 5), and the task of the present

chapter is to provide an orderly overview of their main antecedents.

The fourth section introduces the concept of intention to stay as a way of measuring

employees‘ commitment. The thesis investigates direct links between HR practices

and often quite pragmatic decisions to stay with an employer or move on. The

concept Intention to Stay (ITS) is discussed within the retention and career

literatures which highlight the links among commitment, retention, psychological

mobility and actual turnover. An important analysis from this section is that

intention to stay or leave and psychological mobility are attitudes or perceptions

which are not readily observable but have direct consequences for retention or

turnover.

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The fifth section of this chapter outlines the approach that will be taken to

conceptualising the psychological process that is involved in the decision leading to

intention to stay with a firm. It uses a model drawn from social exchange theory,

which offers a bridge connecting individual employees‘ needs and expectations with

those of the organisation. Two key concepts within social exchange theory are

perceived organisational support (POS) and the psychological contract (PC). These

concepts are applied to the problem of managing human resources in a way that may

induce not only engineers‘ long term retention, but beyond that, high levels of

commitment to the successful achievement of the organisation‘s goals during their

time with the firm (Guest, 1999; Arthur et.al, 1999).

The concepts of POS and the PC are conceptualised in this section as the tools

through which organisations may manage the terms of the new type of employment

contract appropriate to knowledge workers. For instance, rather than expecting

lifelong employment, employees expect the organisation to provide them with

recognition and returns for their added responsibility, tolerance of change, and

willingness to work in a dynamic situation. The rewards that employees are thought

to seek include learning and development opportunities, flexibility of employment

arrangements and the organisation‘s investment in their employability (Baruch,

2004). This exchange relationship which emphasises an implied contract based on

organisational support, appears to have the capacity to influence employees‘

commitment and, to a degree, their retention within the organisation. The final

section summarises the key issues to be investigated in the empirical chapters, as

they pertain to the role of the organisation in the retention of engineering knowledge

workers.

STRATEGIC HRM: HIGH PERFORMANCE, HIGH COMMITMENT

The term ‗Strategic HRM‘ (SHRM) which emerged in the late 1980s signalled a

shift in emphasis from merely focusing on the administrative process of managing

the employment relationship (‗personnel management‘) to a recognition, both that

people are a valuable asset in organisations that can be managed effectively (Beer et

al., 1984) and that HR practices needed to be aligned with the business strategies of

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the organisation (Schuler and Jackson, 2008). Applied to the problem of engineer

retention, this suggests that Malaysian firms will be keen to retain their engineers

only if there is some uniqueness about their knowledge that is different from the

knowledge possessed by engineers working for competitor firms; and that this

specialist knowledge is not readily obtained from outside. Whether HRM can

influence an organisation‘s capacity to gain a competitive advantage from its

engineers will be shaped by the operating environment, but it would be expected that

in knowledge-intensive industries, human resources would be more specialised and

so HRM can be used more readily as a means to gain competitive advantage

(Jackson and Schuler, 1995: 243). Whether and how an engineering company can

build highly committed and capable workforce may depend on the relative emphasis

that it places on what have been dubbed ‗hard‘ and ‗soft‘ HRM approaches (Storey,

1989).

Briefly, the ‗hard‘ approach emphasises integration between HR strategy and

business strategy for achieving organisational effectiveness whilst the ‗soft‘

approach stresses the implications of HR policies and practices for employees‘

commitment and relationships with the organisation (Brewster et al., 2004). Legge

(1995) argues that while both the ‗hard‘ and ‗soft‘ models of HRM emphasise the

importance of integrating HR policies and practices with business strategy, the latter

approach places a greater emphasis on employee involvement as a source of

competitive advantage (Legge, 1995; Legge in Storey, 2001). According to Legge

(1995), integration of external and internal fit is the key concept of the ‗hard‘ model.

External fit aligns organisational goals to the business environment. Internal fit, to

which the ‗soft‘ model devotes more attention, involves an alignment of employee

attitudes with these organisational goals through a mutual-gains approach to HR

practices associated with ‗soft‘ HR values aimed at generating employee

commitment (Storey, 2001). Both approaches had antecedents, an understanding of

which is helpful in this study, not least because it is important to identify those

elements of SHRM that are relevant to the Malaysian context.

Brewster et al. (2004) identify three lines of development that came together in the

emergence of SHRM and that are relevant to this study of engineers. First, in the

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West, industrial psychology was already a strand of the personnel management

practices adopted by the corporations that emerged in the early twentieth century.

The ‗scientific management‘ movement was not limited to time and motion studies,

but also focused on the relationships between social and psychological factors and

productive efficiency (Gilbreth, 1914; Mayo, 1933; Gilson, 1940; Maslow, 1943;

Graham, 2000). Academic studies of employee motivation within organisational

behaviour, organisational psychology and HRM included debates over the relative

power of intrinsic and extrinsic rewards (Maslow, 1954; McClelland, 1985;

Herzberg, 1987), over the role of job design in empowerment and self-efficacy

(Hackman and Oldham, 1976; Locke and Latham, 1990; Vroom, 1995; Bandura,

1997), and over the consequences of culture (McGregor, 1960; Ouchi, 1981;

Hofstede, 2005).

The second antecedent of SHRM identified by Brewster et al. (2004) was the

emergence of the concept of human capital, a term that traced back to Adam Smith,

but that emerged in the US in labour economics following Russia‘s launch of the

first space satellite (Becker, 1964; Mincer, 1958). According to Brewster et al.

(2004), the concept re-emerged in the 1970s to highlight the belief that employees‘

competencies, values, attitudes, capabilities, information and knowledge can be

utilised to generate growth and success for organisations (Becker, 1975). Human

capital theory was taken up and expressed in the fundamental HRM doctrine, that

people are assets not costs (Beer et al., 1984). Human capital is seen as different

from other assets, as while it has market value, this value can be realised only by

retaining and motivating staff – an investment made in anticipation of future returns

(Flamholtz and Lacey 1981; Jackson and Schuler, 1995).

The resource-based view of the firm (RBV), more fully elaborated in the

resources/capabilities/competencies (RCC) approach of the 1990s, is an account of

the ways in which a firm‘s human capital can generate strategic advantage and is

therefore an asset worth retaining and developing. Both the RBV and the RCC

approaches derive from Penrose (1959), who was the first to define the firm as a

bundle of resources. Penrose articulated a behavioural and dynamic model of the

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firm, in which an organisation‘s capacity to grow depends on management‘s ability

to tap under-utilised capabilities:

…the resources with which a particular firm is accustomed to working will

shape the productive services its management is capable of

rendering,…[and]the experience of management will affect the productive

services that all its other resources are capable of rendering.

(Penrose, 1959:5)

This approach makes it the responsibility of managers to facilitate the capacity of

employees such as engineers to utilise their capabilities in innovative ways.

Barney‘s (1991) formulation of the RBV picks up on the concept of human assets

as a unique source of value worth retaining. He argues that socially complex

resources such as organisational reputation, trust, teamwork, and culture are much

more difficult to imitate than physical resources, hence sustained competitive

advantage can be achieved by coupling rare and inimitable human resources to the

firm. This is, however, still a static model. It underpins the concept of the ‗war for

talent‘ (Brown and Hesketh, 2004) that in the West in the 1990s was associated with

debates over ‗buying versus growing‘ talent (Capelli, 2000) and over ‗core‘ and

‗disposable‘ human resources (Legge, 1995). Seoudi et al. (2008) point out that

equally important to Penrose was the concept that firm growth is knowledge-based

and depends on experience acquired in the firm. Rareness and inimitable human

resources are based on the uniqueness of firm-specific contexts.

A firm‘s capacity for expansion resides in whether it can avail itself of the unused

services that the firm‘s resources provide, through new ‗…combinations of services

for the production of new products, new processes for the production of old

products, new organisation of administrative functions…‘ (Penrose, 1959:85-86).

The RCC approach (Prahalad and Hamel, 1990; Spender, 1996; Winter, 2003) sees

such context-based practical knowledge-creation as the firm‘s core source of

competitive value. Flamholtz and Lacey (1981) argued that the more a firm invests

in developing its employees‘ firm-specific skills and knowledge the more loyal its

employees are likely to be. Many authors in the HRM literature (for example

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Schein, 1978; Huselid, 1995; Storey, 2007; Schuler and Jackson, 2008) have

emphasised that HR practices can lead to the development of a committed

workforce, an outcome seen as linked to a firm‘s competitiveness (Wright et al.,

2001).

A third antecedent of HRM identified by Brewster et al. (2004) was a response in

US management circles from the late 1970s to the success of Japan. In the early

1980s, the search for ‗excellence‘ was linked to a rather selective advocacy of

aspects of Japanese management (Ouchi, 1981; Schein, 1981). The Japanese

management practices that were most often imitated in the West included just-in-

time inventory management, total quality management, and continuous

improvement via quality circles (Keys, Denton and Miller, 1994). It was recognised

that some aspects of Japanese management would be hard to imitate – long planning

horizons; a high level of government support for manufacture and trade; keiretsu-

based financial and supply networks; and perhaps also the heavy emphasis on

research and development. Other less imitable aspects included the ‗three pillars‘

(lifetime employment, seniority-based wages and company unionism) (Abegglen,

1958; Dore, 1973). These however applied only in one part of the dual Japanese

labour market, and not to those employed by peripheral suppliers and service

industries, including women and dispatch workers (Chalmers, 1989). Warner (1994)

has argued that the Japanese system was based on an attempt to combine Taylorist

efficiencies with a HRM approach designed to foster group values.

From the 1980s, Western interest in Japanese HRM recognised the latter‘s basis in

the creation of social norms of harmony and community (wa) in the workplace.

Pascale and Athos (1981) contrasted Japanese managers‘ focus on the ‗soft Ss‘ of

staff, style and skills with US managers‘ focus on the ‗hard Ss‘ of structure, strategy

and systems (cited in Keys, Denton and Miller, 1994: 374). These social norms

were seen as requiring specific HRM practices of employee attraction, development

and retention. Recruitment involved careful selection of employees for social fit.

Development policy was based on the recruitment of young people with a generalist

education, whom the firm subsequently provided with specialist training, creating a

bond of loyalty. Retention policy meant that in downturns, lifelong employees were

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transferred lower down the supply chain rather than retrenched (Havatny and Pucik

1981a, 1981b; Pucik, 1984; Gomez-Meija and Welbourne, 1996). Whilst these

strong internal labour market strategies were thought to promote reciprocity and

commitment, they were also thought to demotivate younger workers and to hamper

the capacity of the labour market to reallocate expertise where it was needed (Keys,

Denton and Miller, 1994: 382). It has thus long been asserted that the Japanese

internal labour market ‗pillar‘ is crumbling under the pressure of generational and

structural change (Befu and Cernosia, 1990). Yet Matanle and Matsui (2011) have

documented a statistical increase in average Japanese male and female job tenure

between 1991 and 2008, although lifelong employment remains restricted (as ever)

to the 20 per cent of the workforce who are salarymen. Nakata and Miyakzi (2012)

however, note some increase in external labour market mobility among Japanese

scientists and engineers, and believe that more will be needed.

Malaysian interest in Japanese HRM has a history as long as America‘s. In 1982,

under its fourth Prime Minister, Tun Dr Mahathir bin Mohamad, Malaysia initiated a

Look East policy, designed to adopt best practices from Japan, Korea and Taiwan.

As a key issue in the Malaysian labour market for engineers is the inverse of Japan‘s

– too much, rather than too little, turnover – it might benefit from emulating those

aspects of Japanese HRM that place a heavy emphasis on firm-level investment in

training employees. Hashimoto in Lynch (1994) has argued the importance of firms

providing specialised training in advanced technical skills, building on excellent

basic technical training. He also advocates investment in workplace-level training in

effective communication, information- and responsibility-sharing, coaching and

dealing with conflict. A convergence of Japanese and Western thinking that appears

to have particular relevance to Malaysia is the new focus on structured approaches

to tacit knowledge exchange that is described in the literature on the knowledge-

creating or knowledge-based firm. Nonaka and Von Krogh (2009) summarise

developments in this field since the ground-breaking work of Nonaka and Takeuchi

(1995), who explored the interchange of tacit and explicit knowledge that occurs in

teams of experienced workers. They documented processes of distributed decision-

making in Japanese firms, whereby ideas percolate and gain acceptance; and showed

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how overlapping team membership was to create shared awareness of work

processes:

…a case study of a diesel engine manufacturer … showed that senior

designers often had ‗tacit overview knowledge‘ of complex product designs

with modules and interconnections, as well as the project organisation (with

roles and expertise) that mapped onto these designs. Thus, senior designers

played an important role in supporting teamwork by coordinating activities

and facilitating communication across large project teams. When these

designers moved on and novices and contractors were hired, processes broke

down and costly oversights became more frequent, as did the need for

additional management overhead. (Nonaka and Von Krogh, 2009: 263-264)

This quotation suggests the costs in money and capacity that result from excessive

turnover. Ways to counter these costs by fostering organisational learning are one

focus of this research.

Research Question 5

Can evidence of a SHRM approach to the management of Malaysian engineering

talent, be identified, either in the desk research or in the fieldwork undertaken?

In recommending an employment relations approach appropriate to Malaysia‘s bid

to achieve its Vision 2020 knowledge economy goals, Todd, Lansbury and Davis

(2004a) suggested adoption of the ‗high commitment/high performance‘ model

suggested by Kuruvilla and Arudsothy in Verma et al. (1995). This was a

transformation model, whereby investment and development had allowed a move

beyond competition based on low-wages, to increased human capital investment,

skills upgrading, and educational expansion, accompanied inevitably by greater

employee voice, involvement in workplace decision making and flexible work

organisation. It was based on a virtuous cycle in which businesses would increase

their value-added production and profits, allowing higher wages commensurate with

rising skill levels.

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High performance/high involvement/high commitment work practices have been

described in this way:

Their common thread is that achieving and sustaining high levels of

performance requires a positive workplace environment and practices that

develop and leverage employees‘ knowledge and ability to create value.

While the specific practices need to be tailored to fit different industries and

occupations, they generally include selection, training, mentoring, incentives,

knowledge-sharing, partnership-based labour-management relations and

other shared decision making mechanisms. These practices are most

effective when they are implemented together and in concert with new

capital or technological investments. (Appelbaum, Gittell and Leana, 2011:1)

High-performance work practices are thought to work in three ways: by fostering

development of human capital through increased employee skill development, by

enhancing commitment of employees, creating a climate that supports engagement

in problem solving and performance improvement by building an organisation‘s

social capital through knowledge sharing and coordination (Appelbaum et al., 2011:

1-2).

The high performance model is based on the thesis that a bundle of high

commitment HR practices contributes to organisational performance by facilitating

employee retention, including the retention of those highly talented ‗top performers‘

who are most likely to be poached (Kwon, Bae and Lawler, 2010). The HR practices

in question have been shown in a number of studies to have an impact on

organisational commitment, which is in turn strongly negatively linked to turnover

rates. In the study by Kwon et al. (2010), such results were based on 589 survey

responses by middle-level managerial and professional staff of a multinational

located in South-East Asia in 2002, in which employees reported their experience of

six HR practices, and their responses to a seven-item scale measuring affective

organisational commitment (OC). In this study, Kwon et al. (2010: 60), following

Porter et al. (1974:604), define OC as ‗a strong belief in and acceptance of the

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organisation‘s goals and values; a willingness to exert considerable effort on behalf

of the organisation; and a definite desire to maintain organisational membership‘.

This definition of OC reflects the concept of organisational membership behaviour

(OMB), and has some elements of organisational citizenship behaviour (OCB). The

term ‗organisational membership behaviour‘ (OMB) has a meaning similar to

‗intention to stay‘ (ITS): the latter term is used in this thesis. A closely related

concept is ‗continuance commitment‘, which Shields (2007) differentiates from

‗affective commitment‘ (emotional attachment to the organisation) and ‗normative

commitment‘ (a sense of moral obligation to stay with the organisation, as a result of

benefiting from HRM practices such as training support). The term OCB has been

criticised for vagueness and multiple meanings (Mackenzie et al., 2011). It signifies

working beyond contract, or ‗going the extra mile‘ (Organ, 1988; Podsakoff et al.,

2000). Mackenzie et al. (2011) extended the term to include ‗challenge-oriented

behaviour‘ (employees‘ willingness to use employee voice to suggest alternative

approaches, and management permission for them to do this), and found evidence

that a combination of challenge-oriented and affiliation-oriented OCB may enhance

organisational performance. The concept of employee engagement refers not only to

job attachment but to a level of involvement and identification with the job, with

colleagues and with the organisation (Kahn, 1990). A more unitarist or ‗hard HRM‘

concept of commitment is found in the terms ‗employee alignment‘ or ‗integration‘

(for a critique see Legge, 1995; Legge in Storey, 2001).

Guest (1987) suggests that a set of HRM practices can be used to develop the

feelings of commitment towards the organisation. This conceptualisation is based on

the assumption that committed employees will be more satisfied, productive, and

adaptable and will also remain longer within a company. Guest argues that a

mutually gratifying relationship may be a key intervening variable in explaining the

link between HR practices and employee outcomes (Guest, 1999). In a study

demonstrating the role of worker attitudes in mediating the HRM-performance

relationship, he argues that certain HR practices – job design, direct participation

and information provision were all linked to high performance, whilst equal

opportunities and family-friendly practices were linked to job satisfaction. This

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suggests a mutual gains framework (Guest, 2002). Macky and Boxall (2007) have

also found a link between high performance work system practices and attitudinal

variables including organisational commitment, with job satisfaction as the key

mediating variable.

High commitment HR approaches are defined by Whitener (2001) as those whose

aim is to increase effectiveness and productivity by providing conditions that

encourage employees to identify with the goals of the organisation and work hard to

accomplish them. She lists among these: selective staffing, developmental appraisal,

competitive and equitable compensation, and comprehensive training and

development activities (Whitener, 2001: 517). She found from survey of1689

respondents that the perception that these practices reflect organisational support

mediates OC. A slightly different bundle of HR practices, drawn from the work of

Guest (1997), Appelbaum et al. (2000), Whitener (2001) and a range of other

writers, is used in the study by Kwon et al. (2010: 60): ‗Enriched job design, team-

based approach, participation in decision making, pay for performance, high level of

pay, accurate performance appraisal, extensive training and development, and

selective staffing‘. It is possible, as Guest (1987) suggests that the actual content of

the HR programs matters less than the perception of organisational support that they

generate.

What then is the basis of the high performance systems that have been shown to

draw forth high commitment? Guest (2002) suggests that expectancy theory

(workers‘ confidence both in their own capacity and that the reward will be

forthcoming) (Vroom, 1995) is in play. Kwon et al. (2010: 63, 75) suggest that the

self-efficacy of experienced high performers leads them to welcome autonomy and

participation, in a virtuous circle of learning and improved organisational

performance. Paré andT remblay (2007) have investigated the links between the

retention of highly skilled IT professionals and certain HR practices - namely

empowerment, autonomy, role extension, increased influence and responsibility;

competence development practices (job rotation, mentoring, and training), and

information-sharing. They have found a direct negative link between turnover

intentions and non-monetary recognition and competency development, and a

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weaker negative link between turnover intentions and fair rewards and information-

sharing, with procedural justice, affective and continuance commitment, and

citizenship behaviours partially mediating.

Finally, it is important to identify another strand in the HR literature that derives

from the business ethics tradition, and sees employee commitment as a function of

the perceived ‗moral agency‘ of the HR department (Wilcox, 2009; 2012). This

approach defines HR managers as having the obligation to act almost as the

‗conscience of the organisation‘ (Wiley, 1998:149), embodying values such as

‗…social justice, employee welfare and industrial democracy‘ (Galang and Ferris

1997:1408). In part this is a ‗soft HRM‘ approach emphasising the ‗human‘ in

HRM (Bolton and Houlihan, 2007). However it also sees HR practitioners as

having the obligation to be ‗stewards of social standards‘ in the workplace (Lowry

2006; Winstanley and Woodall, 2000). According to this pluralist view, HR

practitioners are not supposed simply to translate business strategy into HR

programs, as suggested in some of the SHRM literature (Fombrun et al., 1984;

Schuler, 1992). Instead, they are expected to ‗balance the needs of the firm with the

needs, aspirations, and interests of the workforce and the values and standards

society expects to be upheld at work‘ (Kochan 2004:133). This is a view that very

much accords with the Islamic approach to HR that will be set out in Chapter 5.

Research Question 6

For the engineers in the study, how are performance, commitment and retention

linked?

THE IMPACT OF CAREER MANAGEMENT ON COMMITMENT

AND RETENTION

Although the resource-based approach seems to imply substantial empirical

evidence of the link between HR practice and competitive advantage, as already

noted, the evidence base is so far somewhat limited because of these two points: that

firstly, HR practices are difficult to imitate and secondly, evidence that they can

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actually influence employees‘ behaviours (Wright et al., 2001). Hence, Wright et al.

(2001) argue that although the resource-based view sees the firm as relying on

physical, human and organisational resources to achieve competitive advantage,

organisational resources, in particular HR practices may actually be imitable by

competitors. Thus according to Boxall and Purcell (2003), organisational success

depends less on HR practices than on the ability of organisations to obtain and

utilise those resources that are difficult to copy and obtain, specifically people,

culture, and knowledge. From the perspective of knowledge management as a

source of competitive advantage (Delahaye in Wiesner and Millet, 2003; Boxall and

Purcell, 2008), managing knowledge inevitably means managing both the

company‘s technologies and systems, and the people who generate the knowledge.

Achieving competitive advantage from having employees that are highly skilled and

knowledgeable, and also highly committed, thus emerged during the 1990s as a

significant source of sustainable competitive advantage (Wright et al., 1994; Boxall,

1996). The question of the relevance of these ideas in Malaysian engineering firms

is one to be tested.

The analysis of Western HRM highlights a shift from managing the employment

relationship with employees, to managing, developing, and retaining skilled and

knowledgeable employees and also gaining their commitment to the organisation.

Theories of human resources such as human capital theory and the resource-based

view of the firm emphasise that core competencies can be retained and commitment

can be gained from the intervention of HR practices. Both hard and soft HRM

approaches seem to treat commitment as an attitudinal extra, isolating soft practices

from hard strategies, and neglecting the possibility of interconnection or conflict

between individual career and organisational career management. However, the

discussion of high performance/high commitment work systems above suggests that

commitment comes through self-efficacy and/or expectancy based on engagement.

The models developed by Sullivan and Arthur (2006), and Briscoe et al. (2006) on

psychological mobility, all suggest that it may be possible for organisations to

influence individual careers, and thereby secure commitment and retention, through

strategic career management approaches.

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This line of reasoning leads to a specific hypothesis to be tested. Is it possible for

organisations to achieve improved employee retention by developing, improving and

managing employee careers throughout the duration of employment even if this

employment is not for life (Baruch, 2004)?. Is there an approach to career

management that can serve as a tool for organisations to use in influencing the

commitment of valued employees, particularly in responding to the boundaryless

career behaviour of knowledge workers? Is there some way of enhancing

psychological, as opposed to physical mobility? Or alternatively, is there some way

of managing the accumulated knowledge of engineers?

According to Baruch (2004), career management is an operational function of HRM

whose specific goal is to influence the retention of employees. The meaning of a

career has, however changed, along with the decline of internal labour markets. The

traditional notion of climbing up the organisational ladder, just for the sake of being

higher in the hierarchy, may no longer be relevant, posing new retention challenges

to HRM strategists. The flattening of organisations and the elimination of

managerial layers since the 1980s and the 1990s pose a challenge for organisations

seeking to provide a stable and upward career path for the employees (Mitchell,

Jones and Krumboltz, 1979).

Herriot and Pemberton (1996) offer a model linking individual and organisational

career needs. This model argues that career management involves a process of

matching between the individual and organisation in terms of needs, wants and

provision. It views an organisational career as a continuous sequence of career

negotiations (Baruch, 2004). An important key feature of this model is that it

suggests the evolving nature of organisational careers especially when viewed in

terms of individual career perspectives, and indicates a mutual exchange of

relationship between employees and organisation.

Now, the elements of career success involve not only objective but also subjective

interpretations. Job positions and duties are examples of objective measures whilst

values, feelings, expectation and aspirations are examples of the latter (Greenhaus et

al., 2001). According to Hall (2002), a career is a sequential process involving both

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behaviours (objectively observable choices) and attitudes (values, motivations), with

success or failure being a subjective matter. Careers are pursued in organisational

settings that include education, home, and community. This suggests a transition in

the notion of career and a diversification of the meaning of career success. It also

indicates that fulfilling individual employees‘ career needs may not necessarily

involve an actual job promotion, rather any sense of career advancement within the

organisations (Baruch, 2004).

Both subjectively and objectively, a career can be viewed in terms of employee

development, the ‗acquisition of knowledge, skills, and behaviours that improve an

employee‘s ability to meet changes in job requirements and in clients and customer

demands‘ (Kramar et al., 2011). This suggests that employee development is an

organisational strategy for preparing the employees for current and future jobs as a

result of organisational changes which also indirectly responds to employees‘ needs

for increased employability. According to Lee and Maurer (1997) employee

development is important particularly for knowledge workers to maintain their skills

and reduce the likelihood of voluntary turnover. Knowledge workers need to update

their skills continually as the fit between employees‘ career goals, job skills and job

requirements is likely to decline over time without proper continuous development.

The link between training and development and employees‘ retention in a company

is also identified by Huselid (1995), and Ng, Lam, Kumar, Ramendran and

Kadiresan (2012).

The notion of the psychological contract has thus emerged as an important tool for

managing employees‘ careers (Baruch, 2004).According to Chen et al. (2006), an

effective career development program enables employees to match their capabilities

with suitable development opportunities, thereupon enhances personal satisfaction

as their abilities are fully utilised. Empirical studies by Landau andHammer (1986),

Tansky and Cohen (2001), and Thedossiou and Zangelidis (2009) link commitment

and retention to perceptions that the employer is seeking to provide a career path

within the organisation. Furthermore, according to Chang (1999), commitment to

career has an implication on individual behaviours. Employees who are highly

committed to their careers are more likely to focus on developing their skills and

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less likely to have the intention to withdraw from their careers and jobs (Blau, 1989;

Aryee and Tan, 1992). In contrast, employees may consider leaving the organisation

when career development opportunities in the organisation are low (Bedian et al.,

1991). This analysis suggests the importance of career growth opportunities for

employees with high career commitment. Chang (1999) also found that employees

become affectively committed to the organisation when they perceive that the

company is providing internal promotion, proper training, and that supervisors

provide career mentoring.

Nevertheless, as indicated above, the management and the development of

employees‘ careers now involve considerably more than providing vertical mobility.

Career paths need to be more flexible, thus allowing dynamic restructuring with

minimal resistance from employees (Inkson, 2007).The ‗new deal‘ described by

Herriot and Pemberton (1996), and Baruch (2004) is one in which employees offer

long hours, assume added responsibility, provide broader skills, and tolerate change

and ambiguity as long as the company in its turn offers reward for performance and

invest in employees‘ employability inside and beyond the organisation. Managing

individual careers thus involves utilising training and development programs as

strategies for developing, growing and improving the employees (Baruch, 2004).

According to Inkson (2007) training opportunities are particularly essential in

improving the employees‘ knowledge, skill and abilities.

Rather little in the HRM literature has been written specifically on the management

of engineering careers. A study based in New Zealand which investigated the

relationship between HRM and the performance of engineering firms affirms the

point that certain HR practices were implemented to achieve sustainability of firms.

Boxall and Steeneveld (1999) found in their study that engineering firms, for

example, offered challenging and varied work to induce new employees, applied a

competitive appraisal system to retain employees, and allowed work autonomy to

attract experienced employees to joining the companies. Employee development

initiatives were also found to be significant in gaining affective commitment from

the engineers (Singh, 1992).

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This analysis has established the role of organisational career management in

attracting and developing the careers of individual employees in order to induce

their commitment thereafter retention. The two key features of career management

discussed in this section are career advancement opportunities, and training and

development. Both of these aspects of career management signify the efforts by

organisations to meet the needs of the employees, specifically the knowledge

workers‘ boundaryless career aspirations, whilst meeting the organisation‘s strategic

objectives – the retention of highly skilled and knowledgeable employees for its

competitive advantage. Career advancement opportunities provide employees with a

sense of job security and long-term career within an organisation, whereas training

and development, on the other hand, allow employees to upgrade their knowledge

and skill competencies which are needed to increase and maintain their

employability either within their employing organisation or to prospective

employers. This analysis supports the proposition that individual career or protean

career may not require physical mobility; rather it may be influenced by the

employees‘ perceptions of psychological mobility, but within the context of their

employing organisation (Sullivan and Arthur, 2006; Briscoe et al., 2006). The

relevance of career management in influencing the commitment and retention of

Malaysian engineers specifically will thus be investigated in this study in order to

determine the type of HR strategies that can influence the psychological mobility of

Malaysian engineers.

INTENTION TO STAY

The concept of intention to stay has been discussed in association with turnover,

retention, and commitment, as well as within the career management literature.

Intention to stay is related to commitment (Steers, 1977; Tett and Meyer, 1993; and

Meyer and Herscovitch, 2001) whilst retention and turnover should be more

properly viewed as the observable outcomes of this intention in practice. Absence

of turnover may reflect a latent desire to leave, unrealised because of external labour

market circumstances. So retention may involve some combination of this negative

factor of ongoing internal alienation, and a positive factor of commitment. Allen and

Meyer (1990) identify three aspects of the relationship between commitment and

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retention. In the first place, continuance commitment involves simply an avoidance

of the costs and risks associated with leaving. Secondly, employees can be made to

feel a normative commitment, that is, a sense of obligation to stay with the

employing organisation. Finally, at a deeper level, affective commitment means that

employees feel emotionally attached to the organisation.

Several studies relating to commitment and intention to stay support the linkage

between organisational commitment and retention (for example Steers, 1977; Tett

and Meyer, 1993; Meyer and Herscovitch, 2001; and Gellatly et al., 2006).

According to Steers (1977), commitment is positively related to the intent and desire

to stay with an organisation, thus all three components of organisational

commitment are likely to bind employees to the organisation (Gellatly et al., 2006).

Intention to stay relates strongly to, and mediates the effect of commitment on actual

behaviour (Tett and Meyer, 1993). Nevertheless, there is little research on the

interaction effects of the three components of commitment on intention to stay or its

translation into actual retention behaviour (Gellatly et al., 2006).

Intention to stay has also been discussed in turnover process models which generally

encompass antecedents and consequences of employee turnover. According to Steel

and Lounsbury (2009), turnover models can be categorised into three frameworks:

universal, modal and subpopulation turnover. They argue that the three frameworks

analyse turnover differently. The universal turnover framework aims to explain

individual turnover without regard to individual‘s unique circumstances, whereas a

modal turnover framework acknowledges the fundamental diversity among

individual decision processes. The subpopulation turnover framework not only

considers personal factors but also contextual factors affecting turnover decision

process. Apparently, only the subpopulation turnover framework attempts to

integrate individual and labour market factors affecting turnover.

While turnover and retention are related to each other, they may not necessarily be

reciprocal. According to Steel et al. (2002), employees may leave and stay with the

organisation for different or for similar reasons. Steel and Lounsbury (2009) argue

that turnover theory has mainly focused on antecedents for quitting rather than

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explaining reasons for staying (i.e. employee retention) because of the assumption

that retention (decision to stay) is conversely related to turnover (decision to leave).

However this assumption has been challenged empirically by Steel et al. (2002) and

Mitchell et al. (2001) who argue that turnover theory may not explain intentions to

stay (retention).

A concept that appears appropriate to the Malaysian context is the notion of turnover

or exit as an alternative response when employees have limited voice in the

workplace. The concept of ‗exit‘ is a useful way of thinking about turnover. In the

EVLN (Exit, Voice, Loyalty, and Neglect) model dating back to Hirschman (1970),

and recently elaborated by Si, Wei and Li (2008), exit is linked to ‗voice‘, ‗loyalty‘,

and ‗neglect‘. In a recent study, Si and Li (2012) link the model to employees‘

potential responses to Human Resource Management Practices (HRMP) in an

organisation. Voice is defined in terms of one or more of the following constructive

actions designed to improve conditions in the current workplace: discussing

problems with a supervisor or co-workers; taking action; suggesting solutions;

whistle-blowing; or seeking outside agency help (Rusbult et al., 1988). Loyalty is

also constructive, but in its passive form it simply involves waiting for conditions to

improve; whereas active loyalty involves citizenship behaviour. Neglect is passive

negative behaviour ranging from reduced interest or effort, to absenteeism, using

company time for personal business, or increased error rate. Si and Li (2012) use

the active/passive EVLN framework to examine the impact of HRM practices on

employee behaviours. In doing so, they combine resource-based and control-based

approaches with the high performance literature, to create a model of high-

performance HRMP. The Si and Li model of high performance HRMP includes

selective staffing, training, employee mobility, and guaranteed job security,

appraisal and rewards, and employment relations. Without these, and without

workplace voice, employees are likely to exit.

Thereview of literature in this section suggests that whilst retention and turnover or

physical mobility are behaviours which are measurable, intention to stay or leave

and psychological mobilityare attitudes or perceptions which are not readily

observable. The link between employees‘ attitudes (e.g. intention to stay) and

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employees‘ behaviour (e.g. retention) is commitment. However, commitment (Allen

and Meyer 1990) is also a psychological concept, the observable outcome of which

is also retention or turnover. Not much is known about the psychological process

involved in the development of organisational commitment (Mowday et al.,

1982).The challenge for organisations is how to develop organisational commitment

throughout an employee‘s career. The concept of reciprocity has thus emerged from

the field of organisational psychology which emphasises a mutually gratifying

employment relationship between employees and employer: ‗Reciprocities are the

ties that bind career actors and their employers to one another‘ (Arthur et al.,

1999:14).

Employees and the employer are engaged in an exchange relationship— the simplest

form of which involves the employees giving labour to the employer and receiving

wages in return. But as previous analysis has suggested, this exchange has a

psychological dimension which is subjective and flexible according to specific

individual employee‘s and organisation‘s needs. The concept of reciprocity is

believed to have developed under the influence of social exchange theory. The

importance of a reciprocal relationship for achieving organisational commitment is

not only based on a mutually gratifying employment relationship but also an implied

contract between employee and employer. This theory is further elaborated in the

following section, highlighting the two concepts embedded within social exchange

theory—those of the psychological contract and perceived organisational support—

as tools whereby organisations may influence the commitment, and thereafter the

retention of employees.

Research question 7

Can a direct relationship be drawn between the presence or absence of HR

programs and practices, such as career management, and engineers’ intentions to

stay?

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SOCIAL EXCHANGE THEORY

Shore and Coyle-Shapiro (2003) strongly support social exchange as a basis for

understanding employment relations in diverse cultures, for different work

arrangements and levels of analysis. Social exchange is different from economic

exchange theory as it uses the conceptual construct of reciprocity to explain human

relations. The concept of social exchange emerged over 50 years ago when Homans

(1958) introduced social behaviour as an exchange of goods instead of economic

exchange to understand the relations among people in groups. Since then, the

construct of social exchange has become more complex and increasingly been used

to explain relationships between individuals.

Homans (1958) argues that interactions between people involve an exchange of

goods, material and non-material. An exchange occurs when behaviour has been

reinforced and where the determination is mutual. For instance, the more valuable

the rewards that a person gets, the more valuable a person must give in return.

However, the challenge is to determine the extent of equilibrium of exchange. Thus,

it is argued that a stable social structure might be the result of a process of

exchanging behaviour following the sequence of interaction. His review highlights

that social behaviour does not only involve an exchange of tangible materials but

also non-material ones such as prestige.

According to Gouldner (1960) reciprocity is the universal principle of moral codes

required for the maintenance of stable social system. He indicates that reciprocity is

apparent in a relationship whereby one‘s persistence and stability is dependent on

another‘s actions. The norm of reciprocity may lead a person to establish relations

only or primarily with those other person who can reciprocate, thus neglecting

returning to those unable to reciprocate. Nevertheless under certain conditions such

as power coercion, one may provide benefit for the other despite a lack of

reciprocity. This implies that reciprocity may not operate in every case and that a

lack of reciprocity may not disrupt the pattern of a relationship; although reciprocal

behaviour will stabilize a relationship. More importantly, he argues that the norm of

reciprocity is culturally contingent and is not universally accepted as ‗the norm‘.

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The concept of social exchange has also been discussed thoroughly in Blau (1964).

He agrees with Homans (1958) that social exchange is a fundamental principle of

social life; and he also accepts Gouldner‘s (1960) argument that the advancement of

social exchange is culture-bound. He contributes to the evolution of social exchange

theory by providing analysis of social structure that influence the relations between

individuals and groups. He uses social exchange to examine how social life becomes

organised into a complex structure of alliance between individuals. What is novel in

his analysis is that social exchange is distinguished by unspecified obligations and

trust, hence social exchange is more likely to generate feelings of personal

obligation, gratitude and trust than economic exchange when there is a mutual

exchange which creates a social bond between the parties involved. Failure to

reciprocate engenders loss of trust, and it ultimately affects the stability of the

relations. His analysis strengthens social exchange as a valuable approach to

understanding of human relations.

Levinson (1965) contributes to the development of the concept of reciprocity by

suggesting that it provides the basis for understanding of organisational behaviour

and performance such as morale, motivation, and leadership. Organisational

affiliations may be disrupted as a result of social and geographical mobility as well

as rapid technological changes. Thus, reciprocation, termed as ‗psychological

contract‘, is regarded as a continuous process of satisfying mutual expectations and

needs and thereby enhancing the employee-employer relationship.

The concept of social exchange has thus been used in conjunction with that of

reciprocity, whereby equilibrium is achieved when social exchange satisfies the

norm of equivalence between parties in relations. According to Emerson (1976), an

exchange theory is not to be taken as a self-contained theory, instead it is a

framework referring to the transaction of valued resources through a social process

and its scope is defined by an assumption: that one will continue to provide the

resources only if there is a valued return contingent upon it.

Molm et al. (2000) have conducted an experimental test that compares levels of both

trust and commitment in two forms of direct exchange: negotiated and reciprocal.

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They propose that negotiated exchanges with binding agreements provide assurance,

while reciprocal exchanges enable trust. The study assumes that individuals are

motivated to obtain more of the outcomes that they value and others control, that

individuals provide each other with these valued benefits through exchange, and that

exchanges between the same actors are recurring over time. The result strongly

supports the proposition of social exchange theory, that reciprocal exchange

produces stronger trust and affective commitment than negotiated exchange.

However this study may not translate to wider social contexts as the exchange

behaviours were tested in a controlled experiment where there were minimal delays

in reciprocity and the individuals were strangers to each other when in fact social

exchange theory is firmly grounded between people in relations (Homans, 1958;

Gouldner 1960).

Cropanzano and Mitchell (2005) describe social exchange theory as useful to

explain organisational behaviour despite its theoretical ambiguities. For instance,

they argue that social exchange theory constructs have not been fully identified and

that some formulations of the theory are ambiguous. Thus, they suggest that there

are in fact three different types of reciprocity: (a) reciprocity as a transactional

pattern of interdependent exchanges, (b) reciprocity as a folk belief, and (c)

reciprocity as a moral norm. Thus although reciprocity may be a universally

accepted principle (Gouldner, 1960), there is variance in which people and cultures

apply reciprocity principles. Cropanzano and Mitchell (2005) also argue that social

exchange processes focus primarily on reciprocity when in fact other exchange rules

such as individual decision principles are neglected in the analysis.

This section has presented a review of the development of the social exchange

perspective. Homans (1958) presented an exchange concept which is not limited to

material goods but also includes symbolic and intangible value. Related theories and

analysis emerged from his propositions to conceptualise social exchange as a

continuous process whereby the exchange behaviour is contingent on the rewarding

reactions of others, which over time provides for mutually satisfying and stable

relationships. This analysis suggests that the approach of social exchange which

emphasises an exchange of behaviour for a mutually benefiting employment

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relationship is likely to be useful for analysing the implications of HR strategies,

particularly a career-oriented HR strategies on employee‘s intention to stay

(retention) with organisation. Another important highlight from this analysis is also

the suggestion that social exchange theory is culture-bound. It is thus important to

apply this theory onto Malaysian context, assessing the relevance of social exchange

theory, in specific the norm of reciprocity, in the context of Malaysia‘s multi-racial

society. This aspect will be investigated in this study within two distinct constructs:

POS and PC.

THE IMPACT OF PERCEIVED ORGANISATIONAL SUPPORT

AND PSYCHOLOGICAL CONTRACT ON COMMITMENT AND

RETENTION

As early as 1965, Levinson suggested utilising social exchange theory to understand

the process of organisational commitment. The concepts of perceived organisational

support (POS) and psychological contract (PC) both stress social exchange

processes in the establishment and maintenance of the employee-employer

relationship. Aselage and Eisenberger (2003) indicate that despite emphasising

different principles, both concepts involve an exchange relationship contingent on

reward or support by another party in relations.

According to Eisenberger et al. (1986), employees in an organisation construct a

universal belief concerning the extent to which the organisation values their

contributions and cares about their well-being. This belief is labelled as ‗perceived

organisational support‘ and it underlies employees‘ perceptions of their

organisation‘s commitment to them, which in turn contributes to the employee‘s

commitment to their organisations. In other words, POS is likely to create feelings

whereby employees feel obligated to be committed to their organisation and they

feel that they ought to return the organisation‘s commitment by engaging in

behaviours that support organisational goals. The concept of POS emphasises both

employees‘ and organisation‘s commitment to a relationship in which they are

interdependent.

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The term ‗psychological contract‘ emerged in response to the wide range of changes

around the nature and process of the employment relationship in organisation

(Morrison, 1994; Guest, 1998; Rousseau, 1989; 1990; 1995). According to Rousseau

(1989) PC refers to individual beliefs in a reciprocal obligation between the

individual and the organisation. An individual PC develops from having an

interaction with the organisation and that interaction raises reciprocal expectations.

If a consistent pattern of inducement and contributions exists over time, then trust is

developed and PC ensues from it. The concept of PC is based on two assumptions: it

exists at the individual level and thus can only be studied from the perspective of the

employee and it relies on reciprocal obligations.

The two constructs can be distinguished from each other in several aspects. POS is

evident when employees form a global belief about the organisation (Eisenberger et

al., 1986) whereas a PC is developed when employees form beliefs about a

particular type of resource that both parties are obligated to provide for each other

(Rousseau, 1989). The notion of contract in PC indicates that organisation plays a

role in the reciprocal relationships; hence it is two-sided (Guest, 1998), but POS is

seen to be one-sided and mainly concerned with employees‘ perceptions of

theorganisation. POS is based on the norm of reciprocity whereby employees are

likely to repay the organisation for its support whilst PC is formed on the basis of

trust and promises made and delivered by organisation to the employees (Aselage

and Eisenberger, 2003). The need to reciprocate positive inducement is apparent in

both POS and PC although one relies on belief and another on trust (as in Robinson,

1996; Robinson and Morrison, 1995).

The concepts of POS and PC have been used to address problems of organisational

commitment and retention or turnover in relation to HR practices. For example, HR

policies and practices that influence employees‘ POS include fairness, organisational

rewards and work conditions (Rhoades and Eisenberger, 2002); material rewards

such as pay, job rank and job enrichment (Eisenberger et al., 1986); high-discretion

job conditions (Eisenberger et al., 1997) and career advancement (Jawahar and

Hemmasi, 2006). According to Rhoades and Eisenberger (2002), HR policies and

practices can also influence employees‘ perceived supervisor support which

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contributes to POS and ultimately leads to employees‘ retention because employees

believe that supervisor support represents organisational support (Eisenberger et al.

2002).

HR policies and practices that influence employees‘ PC include career opportunities

(De Vos and Meganck, 2007); long-term employment and career opportunities

(Rousseau, 1990); and performance management, compensation, and opportunities

for advancement (Stiles et al., 1997 and Turnley and Feldman, 1999). Rousseau

(1995) argues that PC has an influence on organisational HR practices whereby HR

practices represent the organisation‘s expectations of the employees and can be

viewed as promises made by the organisation whilst at the same time indicate the

exchange benefits from the expectations.

The research literature provides strong support for the influence of both POS and PC

on organisational commitment and employee retention. Eisenberger et al. (2001)

identifies that POS strengthens affective commitment and performance by a mutual

exchange process between the employer and the employee. It is also predicted to

enhance employees‘ affective attachment to the organisation and the expectation for

an exchange of rewards as a result of displayed work effort. Employees with strong

affective commitment are likely to remain with the organisation and to engage as

organisational citizens (Gellatly et al., 2006). Rousseau (1990) has found that

employee‘s commitment to being loyal in the employment relationship is positively

related to expected job tenure, whilst Granrose and Baccili (2005) and Turnley and

Feldman (1999) have found that employees‘ perceptions of violations of PC

obligations in relation to job security result in reduced organisational commitment

and decreased levels of loyalty to the organisation.

Although both concepts of POS and PC are derived from the norm of reciprocity i.e.

the exchange relationship, organisational HR policies are generally expressed in the

terms of an employment contract and rarely involve the negotiation of two parties

i.e. employer and employee (for example Cullinane and Dondon, 2006). Thus, to

overcome the ambiguity of the term ‗contract‘, Guest (1998) suggests identifying

‗agents‘ of the organisation in shaping the PC whereas Cullinane and Dondon(2006)

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suggest recognizing PC as a social exchange interaction rather than a ‗contract‘. All

these issues will be addressed and explored in this research, in order to test the

relevance of the concept of POS and PC to the engineering profession, specifically

in connection with engineers‘ intention to continue working in their employing

organisations. This study will also be exploring which HR strategies influence POS

and PC, and how they do so, as well as identifying the contributions of

organisational agents and the types of social exchange interaction that form

perceptions of organisational support and PC.

Research Question 8

Can social exchange theory, particularly theories of the effects of perceptions of

organisational support (POS) and/or of the psychological contract (PC), provide

an insight into the factors that would influence engineers’ intentions to stay with

an organisation?

CONCLUSION

In summary, this chapter has argued that HRM in organisations plays a key role in

managing, developing, and retaining employees. Achieving a highly committed and

skilled workforce is seen as an important source of sustainable competitive

advantage for organisations, especially those undergoing organisational changes.

The challenge, however, is to bridge the gap between organisational and individual

employees‘ needs, specifically in terms of career perspective. Whilst an organisation

may prefer employees to remain in long-term employment in order to maintain its

pool of skilled employees, individual employees may prefer to pursue multiple

careers. This is especially the case for knowledge workers, whose knowledge and

skills are highly sought after, particularly in a tight labour market.

Nevertheless, based on Briscoe et al. (2006), knowledge workers‘ careers may not

necessarily involves job hopping. Instead, organisations have the capacity to manage

employees‘ protean career attitudes by utilising career management strategies. These

strategies specifically refer to career advancement and learning and development

opportunities. Both of these strategies have emerged in response to organisational

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changes whereby organisations are increasingly seen as no longer having the ability

in providing job security and long term employment for employees. As a result,

rather than expecting life time employment in exchange for loyalty, conformity, and

commitment, employees in the ‗new deal‘ employment relationship may expect

employers to provide learning and development opportunities, as well as investment

in employability in return for employees‘ changing roles and responsibilities

(Baruch, 2004). An important highlight from this analysis is that both of these

career-oriented HR strategies can be utilised by organisations to influence the

commitment, and thereafter the retention of the employees. This suggests that a

mutually gratifying employment relationship can be based on a career which

satisfies individual employees‘ psychological mobility rather than their physical

mobility.

The concept of intention to stay has been reviewed in this chapter together with

concepts of commitment, turnover, retention, and psychological-physical mobility.

This analysis highlights intention to stay as more relevant than intention to leave

particularly for understanding the antecedents of employee retention. Moreover,

turnover and retention appear not to be necessarily reciprocal, although may be

inter-related, suggesting that retention rather than turnover is the observable

outcome of intention to stay. Thus, it is critical for organisations to manage

employee‘s psychological mobility, specifically the psychological process that is

involved in forming an intention to continue working in a company. The challenge is

of aligning individual career trajectories with employee commitment. The theory of

social exchange which emphasises a reciprocal employment relationship is seen as a

possible tool for theorising firm-level approaches to the retention of employees,

specifically the knowledge workers.

This chapter has reviewed two constructs emphasising the norm of reciprocity and

an exchange employment relationship: POS and PC. These constructs are distinct as

sources of perceptions. Specifically, PC relies on trust, whilst POS ensues from

employees‘ universal belief of the extent to which organisations care for their well-

being and concern for their welfare. Nevertheless, the need to reciprocate,

contingent on reward or support by another party in the relationship, is apparent in

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both POS and PC. In the literatures, the implications of POS and PC for employee

and organisational well-being are investigated in connection with HR strategies. The

analysis suggests that certain HR policies/programs/practices may influence POS

and PC, thereafter commitment, and thence retention or turnover.

The discussion in this chapter leads to two main questions which will be explored

empirically in this study. The first is to identify specific HR strategies that may

influence Malaysian engineers‘ intention to continue working with their employing

organisation, and the second is to test the relevance of the culture-dependent social

exchange theory in the Malaysian context by examining the influence of POS and

PC on Malaysian engineers‘ intention to stay, and the extent to which they mediate

the relationship between HR strategies and intention to stay.

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CHAPTER 4

RESEARCH DESIGN ANDDATA

ANALYSIS

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INTRODUCTION

The previous two chapters have discussed several issues in conceptualising the

problem of employee retention in individual firms. The lack of empirical research on

engineers in general, and on Malaysian engineers specifically, provides the

opportunity to incorporate such an investigation into the research design, through the

research question: Are there particular characteristics of engineers that could be

considered in the Malaysian context, in order to address retention issues? These

characteristics were conceptualised in chapter 2 of the thesis and include knowledge

worker characteristics, protean/boundaryless career behaviour, and the engineering

labour market.

The question that is of particular interest for this thesis is that of the defining

characteristics of individual firms‘ retention capacity. The relevance of a career-

oriented human resource (HR) strategy and the concept of asocial exchange

relationship between employees and employer will thus be investigated with these

research questions: Can a direct relationship be drawn between the presence or

absence of HR programs and practices, such as career management, and engineers‘

intentions to stay? Can social exchange theory, such as perceived organisational

support and perceived psychological contract influence engineers‘ intentions to

stay? Individual firm retention capacities were discussed in chapter 3 and include

strategic human resource management (SHRM), career management, and a mutual

exchange employment relationship.

This chapter is organised into six main sections. The first discusses the research

methodology, derived from three levels of analysis: labour market; organisational

and individual. This section also explains and justifies the sampling strategy, as well

as the instruments used for the purpose of this study. The second section describes

the process of recruiting participants for each component of the data collection –

survey participants, and two types of interviewees, as well as presenting the profiles

for each group of participants. The third section describes the four data collection

tools– the survey questionnaire, the HR interview schedule, the engineer‘s interview

schedule, and the approach to document analysis. The purpose of each component is

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explained, with specific reference to how the questions chosen were used to test the

theoretical constructs derived from Chapters 2 and 3.

The fourth section explains the research process, highlighting the problems and

challenges encountered whilst conducting the fieldwork. Next is a section on ethical

issues which describes the approach in protecting the confidentially of participant‘s

and organisation‘s identity as well as the information provided. The sixth section

presents the results of the preliminary statistical analysis, as well as the data analysis

techniques for both survey and interviews. Finally, the last section of the chapter

relates the data collected to each of the study‘s research questions. Briefly it

indicates how the research design used in this study has had the capacity to achieve

the research objectives.

RESEARCH METHODS

This study utilised three techniques of data collection: (1) a web-based survey of

engineers, (2) a series of interviews with selected engineers and HR managers or

nominated executives, and (3) secondary data collection. Based on the model of

analysis shown in figure 1.1, the two main sources of data identified for answering

the thesis research questions were a sample of engineers and the HR managers of

participating Malaysian engineering firms, whilst the third data source was from the

secondary data which included published documents such as census, labour

statistics, organisational annual reports, newspapers, and bulletins.

A mixed-method approach was chosen because while the survey data was useful for

analysing statistical relationships among the variables of interest, it alone could not

provide a sufficiently detailed and contextual understanding of the decisions taken

by Malaysian engineers to leave or continue working in a company. Interviews have

the capacity to explain and enhance the results obtained from a survey (Creswell and

Clark, 2011). This approach allowed statistical insights to be supported by analytical

insights, as the interviews better captured the interactions among organisational,

individual and labour market factors and allowed exploration of how these

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interactions developed into employees‘ commitment to and intention to stay working

in their organisation.

A web-based questionnaire was chosen over conventional ‗paper and pencil‘

(Bowling, 2005:281) data collection method to increase item response rates

(Johnson, Copas and Erens, 2001) and because of its ability to save researcher‘s

time administering the questionnaire and preparing the data for analysis (Dilman,

2000). Johnson et al. (2001) in a methodological experiment within a British survey

on sexual behaviour reported that while there were no differences in response

between electronic questionnaires and pen and paper questionnaires, the latter led to

more missing item responses than electronic questionnaire. Item response rates can

be increased either by making the completion of certain items mandatory (Bowling,

2005) or, in certain web-survey software, by giving a reminder to respondents to

complete missing item responses. A contributing factor is that access to the internet

has expanded dramatically, allowing data to be entered directly on a form accessed

on the web (Cooper et al., 2006). For engineers, electronic tools are particularly

appropriate. Moreover, according to Dilman (2000), a web-based questionnaire may

save time for researchers as it allows the researcher to reach potential participants in

a short time as well as increasing the efficiency of data analysis. This is because

certain web-survey software allows survey data to be easily exported to statistical

software packages as well as facilitating access to tools for the analysis and

interpretation of data (Dilman, 2000).

The survey component of the research was in line with previous research on

retention and turnover intentions in the Malaysian context. Such earlier studies have

mainly been based on quantitative design. They have had the purpose of testing the

hypothesised relationships among individual variables and a range of organisational

variables. The former include intention to stay or leave, the psychological contract,

organisational commitment and organisational citizenship behaviour. The latter

include perceived organisational support, career mentoring, leadership style, and job

characteristics. These earlier studies include Ahmad and Abu Bakar (2003),

Muthuveloo and CheRose (2005); Samad (2006; 2007), Chew and Wong (2008),

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and Coyne and Ong (2010); some of them are amongst those summarised in Chapter

5.

Although these earlier research studies have made significant contributions towards

an understanding of the statistical relationships between organisational variables and

retention, there is a paucity of research that provides insights into contextual and

historical factors that impinge on individual careers. For this reason, the quantitative

research and data analysis was supplemented by the use of a qualitative approach,

enabling a more exploratory approach to reaching a deeper understanding of the

processes of attitude formation and decision making that underlies the quantitative

results. In this research, the qualitative component was aimed at understanding,

interpreting and elucidating how the constructs that make up social exchange theory

actually influenced employees‘ decision to continue working in a company.

By interviewing engineers and HR practitioners in Malaysian engineering firms, the

qualitative analysis was given local specificity, enabling an exploration of the

transferability to the engineering profession and to the Malaysian context of the

constructs that make up social exchange theory. In order to contextualise and make

better sense of the interview responses, the interview data were interwoven with the

results of research based on primary and secondary documents, specific to

Malaysian labour markets and employment relations.

Qualitative research involves a detailed examination of a small number of events or

experiences in order to identify or illustrate one or more ‗general theoretical

principles‘ (Mitchell, 1983:192). The events and experiences examined in this

thesis are descriptions by HR practitioners of their company‘s standard practices,

and engineers‘ views of past and present employing firms and of their careers. The

interviews provided more context than can be gained from survey data, allowing

more explanation. They allowed cross-referencing of data sources (engineers in the

survey and interview samples; HR practitioners) and of data and theory (POS, PC

and ITS). They probed the relationship between intention and behaviour, drawing

links, making explanations and testing inferences drawn from theory and from

analysis of survey responses.

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RECRUITMENT OF RESEARCH PARTICIPANTS

The recruitment of research participants was a major challenge of the project. The

initial research design included a survey of Malaysian manufacturing companies by

interviewing their HR managers (or nominees)and conducting a questionnaire

survey of engineers employed in the chosen companies. A subsample of engineers

was also to be interviewed. The manufacturing industry was chosen because it was

identified as the main employer for engineers3 (DOS, 2010d). Random sampling

based on a directory of Malaysian manufacturers (Federation of Malaysian

Manufacturers, FMM, 2008) was conducted to obtain a list of 50 Malaysian

engineering companies stratified by twelve states within Peninsular Malaysia. The

HR departments of these companies were contacted between June and July 2009 by

telephone and by emails inviting them to participate in this study and to publicise the

survey web-link to the engineers in their company.

However, only two of the 50 HR executives expressed an interest in participating in

the study. Moreover, they were prepared only to guarantee their own participation,

and not the engineers in their company as a matter of company policy. In order to

increase the sample size, 50 more firms were drawn from the directory. The result

was once again disappointing. Among the 100 companies contacted, only eight

indicated willingness to participate in the study. Some of the companies which

refused participation explained their refusal in terms of the confidentiality of their

company‘s HR policy as well as the company‘s restriction against employees‘

participation in any forms of survey. These results were not unexpected as previous

researchers have indicated similar issues (see for example PwC, 2007; Oxfam,

2008). Obviously, the poor participation of HR respondents affected the survey of

engineers. Given the difficulty of obtain participation from Malaysian companies

and in order to enlarge the sample, the interview and the survey samples were

broadened to include any HR managers in Malaysian engineering firms and any

engineers working in Malaysia, both within and outside the manufacturing industry. 3In 2009, the employment by industry in Malaysia was dominated by the wholesale and retail trade industry (16.8 per cent of 10,897 total person employed) followed by the manufacturing industry (16.6 per cent) (DOS, 2010d).

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These required changes in the sampling strategy: from using probabilistic i.e.

stratified random sampling to non-probabilistic sampling technique i.e. snowball

sampling.

RECRUITMENT AND PROFILE OF SURVEY PARTICIPANT

Malaysian engineering associations, including the Board of Engineers Malaysia

(BEM) and the Institution of Engineers Malaysia (IEM), were approached to seek

their permission and assistance to publicise the survey web-link on their respective

websites and also to their members. However, the BEM refused to participate and

the IEM failed to provide any further response except that the survey invitation

would have to be discussed with the relevant committee of the institution. As a

result, Malaysian engineers for the survey component of this study were recruited

within social networking community and virtual engineering groups and

associations. Permissions to publicise the link of the web-based questionnaire were

first obtained from the engineering groups‘ moderators. Upon receiving permission

and acceptance to join the virtual engineering group, a message containing the link

of the web-based questionnaire was posted in the group‘s forum, whereby every

group members would automatically received a notification of the survey invitation.

On the other hand, paid advertising targeting engineers in Malaysia was used for the

recruitment of survey participant via social networking community. Although this

method of recruitment is based on self-selected respondents who are not necessarily

representative of the population of engineers in Malaysia, this was the only viable

method given the lack of cooperation from the companies and the professional

associations.

A total of 226 engineers participated in the survey. This low number is not

surprising since Malaysians are not keen on filling out questionnaires (Westwood

and Everett, 1995). Table 4.1 presents the demographics of the survey respondents.

The majority were male, unmarried, between the ages of 21-30 years old, and

identified their ethnicity as Malay. This demographic profile can be compared with

that provided by the Malaysian statistics of the labour force in 2010, and with the

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profiles of engineers in Malaysia in 2009, although the latter only provides the

distribution of Malaysian professionals by ethnicity.

Table 4.1: Profile of survey participants and of Malaysian workforce Survey

participants

Malaysian workforce 2009,2010

(‘0004) Categories N per cent N per cent Gender Male 172 76 7112 64 Female 54 24 4017 36 Marital status Single 120 53 3988 36 Married 106 47 7141 64 Age (years) 21-30 184 82 32945 31 31-40 30 13 3135 30 41-50 9 4 2565 25 >50 3 1 1486 14 Ethnicity Malay6 189 84 34854 51 Chinese 20 9 29018 43 Indian 14 6 3465 5 Others7 3 1 835 1 Highest qualification Bachelor degree 190 84 26878 24 Diploma 24 11 Master‘s degree 10 4 Others 2 1

The Malaysia Department of Statistic (DOS, 2010d) reports that the employed

population in Malaysia is predominantly male, with men making up 64 per cent and

women 36 per cent of the employed population. This is roughly comparable to the

survey sample which is made up of 76 per cent male respondents. Single workers

(53 per cent) are slightly over-represented in the survey as the DOS report indicates

that more than 60 per cent of the employed workforce is married. This may be the

result of the fact that more than four in five survey respondents were below the age

of 31. DOS reports also indicate that the Malaysian labour market is relatively

4 The number applies for all categories except for ethnicity, and whilst all the categories except ethnicity refers to overall Malaysian workforce, the statistic for ethnicity refers specifically to engineer population in Malaysia 5 The age brackets used in official Malaysian workforce statistics are 20-29, 30-39, 40-49, 50-59 years (DOS, 2010d) 6 Bumiputera includes Malay ethnic, Sabah/Sarawak ethnic and Orang Asli (DOS, 2010d) 7Includes Punjabi, Eurasian and other ethnic in Malaysia(DOS, 2010d) 8 Highest qualification for Malaysian workforce is classed as ‗tertiary‘ educational attainment (DOS, 2010d)

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young with slightly more than 30 per cent being in the 20-29 year age group.

Workers aged 50 and over made up only 14 per cent of the employed workforce.

This suggests that young workers in the 20-29 age group were more than 2.5 times

over-represented in the survey.

DOS (2010c) also reports that in 2009 approximately 47 per cent of the registered

professionals in Malaysia were engineers, among them more than half were of

Malay ethnicity (51 per cent) followed by Chinese (43 per cent) and Indians (5 per

cent). Malay engineers are therefore over-represented in this sample, while Chinese

engineers were under-represented. The over-representation of Malay engineers

indicates a limitation in the capacity of this study to allow generalisation of the

findings to other ethnicities.

RECRUITMENT AND PROFILE OF INTERVIEWEES

A second component of this study involved interviews with HR practitioners and

also with engineers. The original plan was to interview a sample of HR managers

within the manufacturing industry and also to interview a sample of engineers from

each of the companies who responded to the survey. The recruitment strategy was

modified following the poor response from engineering firms. A non-probabilistic

sampling technique was used targeting HR respondents recruited earlier and using

information provided by them in order to locate other HR respondents. As well,

social networking sites and virtual HR groups and associations were used. The

snowball sampling technique accumulates participants as each located subject

suggests other subjects from similar population they happen to know (Rubin and

Babbie, 2009). For this study, the snowball sampling was considered complete when

no new subjects could be located for HR interviews. Table 4.2 shows the profile of

the HR interviewees. A total of 13 HR officers participated in the interviews. The

majority were female, between the ages of 21-30 years old. All identified their

ethnicity as Malay, possessed a bachelor degree and had an educational background

in HR.

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Table 4.2: HR participants Categories N per cent

Gender Female 11 85 Male 2 15 Age (years) 21-30 8 62 31-40 5 38 Ethnicity Malay 8 62 Chinese 5 38 Highest qualification Bachelor degree 12 92 Diploma 1 8 Educational background Human Resource 8 62 Business Admin 4 30 Psychology 1 8

In order to investigate the influence of the labour market characteristics that might

affect engineers‘ job mobility, only Malaysian engineers working in the state of

Johore were selected for interviews9. Interviewees were recruited by asking HR

respondents from Johore to suggest engineers from within their company. Engineers

who were identified were then asked to suggest other engineers they knew. This

purposive sampling technique was also used to obtain an equal number of male and

female respondents. This approach is commonly used to compare opposite groups

and to gain insights into the attributes of each group (Rubin and Babbie, 2009).

The number of cases was initially limited to 20 respondents with equal distribution

between male and female respondents. However due to the researcher‘s health

circumstances, only 18 engineers managed to be interviewed. Nevertheless, the

number of interviews conducted is considered as ‗saturated‘ as in the last batch of

interviews, no new information or themes were observed, compared with the data

already collected (Biernacki and Waldorf, 1981; Guest, Bunce and Johnson, 2006).

Table 4.3 shows that the majority of the18 interviewees were of Malay ethnicity,

married and between the ages of 21-30. Although these recruitment techniques did

not produce a representative sample of Malaysian engineers, the interviews provided

9 Johore is located adjacent to Singapore and there is evidence of cross-border labour movement between Johore and Singapore (see for example Kanapathy, 2008; Ratha et al., 2011). Besides the state of Johore also had the highest number of vacancies of professional related occupations including engineers compared to other states in Malaysia; approximately 57 per cent of 11,422 job vacancies available in April 2011 (Ministry of Human Resources, MOHR, 2011). Moreover the main participant (32 per cent) for the survey component was also engineers working in Johore.

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rare and important data on individual careers and circumstances, demonstrating the

complexity and contingency that characterised retention and turnover decisions

which can be very unique and individualised.

Table 4.3: Engineer participants Categories N per cent

Gender Male 9 50 Female 9 50 Ethnicity Malay 14 78 Chinese 4 22 Marital status Married 11 61 Single 7 39 Age (years) 21-30 11 61 31-40 6 33 41-50 1 6 Highest qualification Bachelor degree 15 83 Diploma 3 17

The profiles of both HR and engineer interview participants indicates that the

interview component of this study received a higher participation rate from the

Malay ethnic, younger age groups of 21-30 years old, and those who possessed a

bachelor degree. The fact that the majority of the participants, whether HR or

engineers, were from the Malay ethnic group may suggest the influence of cultural

similarities in perceptions of trust to the interviewer. Since the snowball sampling

technique was used in the recruitment of both groups of participants, it also indicates

a tendency for a participant to refer other participants from similar background. It

may be possible to suggest that there are culturally embedded issues that may need

to be considered when conducting a research in a multi-racial population, such as

Malaysia, specifically when utilising a referral based recruitment technique.

An interesting finding based on the profile of HR participants relates to their

educational background. Although the results suggest that HR practitioners,

specifically HR managers or HR executives, are more likely to possess a HR

qualification, they also indicate that graduate in management or in psychology may

also be employed as HR personnel within Malaysian engineering firms. This is not

surprising given the inter-relatedness between the fields of organisational

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psychology and human resource management, although it raises the question of HR

competencies particularly for HR practitioners who did not received a formal

tertiary-level education specialising in either human resource management or human

resource development. The lack of a formal HR education suggests a possible

implication regarding the ability of HR departments in Malaysian engineering firms

to function effectively, at least in terms of their views towards employees, and

particularly towards engineers as knowledge workers.

SURVEY QUESTIONNAIRE

The questionnaire, as shown in Appendix B, consisted of seven sections: (1)

respondent‘s demographics, (2) availability and rating of the quality of HR policies

and programs in the respondent‘s company, (3) respondent‘s assessment of the

extent to which HR policies and programs might influence intention to continue

working in a company, (4) respondent‘s perceived organisational support, (5)

respondent‘s perceived psychological contract, (6) respondent‘s intention to stay,

and (7) open-ended questions about the respondent‘s likes and dislikes towards the

company. The web-based survey was piloted on a small number of people in order

to test for ease of understanding and completion time of the questionnaire. The

variables and scales included are explained more fully below:

1) Demographic and personal details

Participants‘ personal data was collected including their gender, ethnicity,

age group, marital status, number of children, highest qualification, type of

industry, company‘s location and size, type of engineering professional

membership, number of companies worked for since graduation, job title,

length of employment in current company, and availability of HR

department within current company. Several of these demographic data were

used in the analysis modelling individual and labour market factors, with

engineers‘ intention to stay: ETHNICITY (ethnic group participant identifies

with), MARITAL (marital status of participants), YRSEMPLOY (length of

employment with current company in years), LOCSING (proximity of

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current company‘s location to Singapore), AGE (age group of participants in

years), and GENDER (gender of participant). Each demographic variable

was dichotomised: YRSEMPLOY (0 for more than 3 years, 1 for 3 years and

less), AGE (0 for above 30 years, 1 for 30 years and below), LOCSING (0

for other than Johore, 1 for Johore), GENDER (0 for female, 1 for male),

ETHNICITY (0 for others, 1 for Malay), MARITAL (0 for married, 1 for

single).

2) Availability and quality of HR policies/programs (HRQuantity and

HRQuality)

This section consisted of twenty-six conventional HR policies and programs

likely to be available in Malaysian engineering firms. This section was

constructed to test the direct influence of these specific HR policies and

programs on Malaysian engineers‘ intention to stay working in a company.

Although the literature review had established the impact of certain HR

policies and programs on employees‘ well-being, such as their commitment

towards the organisations (for example Schein, 1978; Flamholtz and Lacey,

1981; Huselid, 1995; Storey, 2007; Schuler and Jackson, 2008), there was

however little prior research investigating the direct relationship between a

set of HR strategies and employee retention. Thus this gap was addressed in

this study by investigating the relationship between intention to stay and a set

of HR policies and programs such as training and development, career

planning, and performance and rewards. There were two elements being

tested in this section: the quantity and the quality of HR policies and

programs. The first element tested the relationship between the number of

HR policies and programs available in Malaysian engineering firms and

engineers‘ perceptions of intention to stay, whilst the second tested for the

relationship between engineers‘ perceptions of the quality of HR policies and

programs and their intention to stay. This section was aimed at distinguishing

the most relevant aspect of organisations‘ HR policies and programs –

quantity or quality –as an influence on intention to stay. It was hoped that the

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findings might suggest the most important focus for the role of HR

department particularly in inducing employee retention.

Respondents were asked to indicate which policies/programs were available

in their firm (1 for yes, 0 for no) and to rate the quality of the

policies/programs that were available along a 6 point scale from ‗extremely

poor‘ (1) to ‗excellent‘ (6). The HR policies/programs were grouped along

six main functions of a typical HR department, namely recruitment and

selection (e.g. non-discriminatory recruitment practices), training (e.g. job

specific skills training), career planning (e.g. long term career opportunity),

performance appraisal (e.g. performance feedback) , rewards and promotion

(e.g. performance based reward), and fringe benefits (e.g. flexible working

hours, and health insurance).

Two variables were constructed from these questions: (a) HRQuantity

(number of HR programs/policies) was obtained by adding the availability

scores across the 26 items (minimum is 0, and maximum is 26) and (b)

HRQuality (the quality of HR programs and policies) was calculated by

dividing the total rating scores across the 26 items by the total number of

available programs/policies (minimum is 0 and maximum is 26). The

Cronbach‘s alpha values for HRQuantity and HRQuality were 0.91 and 0.95

respectively, indicating a high level of reliability and internal consistency.

3) Influence of HR programs/policies on intention to stay (HRITS)

Using the same list of HR programs/policies, the next set of questions asked

participants to rate the influence of each HR program/policy on their

intention to continue working in the company. This variable was constructed

to measure the most significant HR policy/program that is most likely to

influence Malaysian engineers‘ intention to stay working in a company. This

variable also allowed measurement of the relationships among all three HR

variables: HRQuantity, HRQuality, and HRITS. This was thought likely to

lead to a better understanding of the influence of HRQuantity and HRQuality

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on HRITS. The participants were asked to response to a five-point scale

from ‗not at all‘ (1) to ‗to a great extent‘ (5). A score of HR influence

(HRITS) was constructed by totalling the individual item scores (minimum

1, maximum 5). This scale had a Cronbach‘s alpha of 0.98 indicating a high

internal consistency.

4) Perceived organisational support (POS)

Participants‘ perception of the level of support provided by their employing

organisation was measured using a short version of the SPOS (Survey of

Perceived Organisational Support) (Eisenberger et al. 1986). Specifically,

participants were asked to indicate how much they agreed or disagreed, on a

scale of seven-points from ‗strongly disagree‘ (1) to ‗strongly agree‘ (7),

with eight statements about their company, such as: ‗The organisation values

my contribution to its well-being‘ and ‗The organisation fails to appreciate

any extra effort from me‘. The Cronbach‘s alpha value for this scale was

0.78, suggesting an acceptable level of reliability. It is important to note that

this study used the shortest version of the SPOS10. Eisenberger et al. (1986)

originally developed a scale measuring POS using 36 items. The SPOS is a

single-factor construct that uses the sum of scores of a 36-item instrument

scored on a seven-point Likert-type scale. A high total score indicates a high

level of POS. Amongst the 36-items; 17-items with highest factor loading

were retained as a shorter version of the SPOS, whilst the shortest version of

the SPOS only consists of eight items selected from high loading items from

the original SPOS. According to Rhoades and Eisenberger (2002:699),

‗Because the original scale is unidimensional and has high internal

reliability, the use of shorter versions does not appear problematic. Prudence

nevertheless dictated that both facets of the definition of POS (valuation of

employees‘ contribution and care about employees‘ well-being) be

represented in short versions of the questionnaire‘.

10The SPOS is grounded in social exchange theory, which posits that the level of relationship between the employer and the employee has an effect on the level of the employees‘ commitment to the organisation.

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5) Psychological contract (PC)

In the context of an organisation, PC is an individual‘s belief in mutual

obligations between the employee and the employer (Rousseau, 1989) where

the belief is ‗predicated on the perception that an exchange of promises has

been made to which the parties are bound‘ (Rousseau, 2000:1). The revised

version of the PCI (Psychological Contract Inventory) (Rousseau, 2008)

contains four sections: Employee Obligations (28 items), Employer

Obligations (28 items), PC Transitions (12 items), and PC Fulfilment (4

items), with a total of 72 items. The first two sections contain seven types of

obligations with four items measuring each type of obligations with a total of

56 items (i.e. Short-term, Loyalty, Narrow, Performance Support,

Development, External Marketability, and Stability).

In order to reduce the number of items, only four types of obligations for

each Employer and Employee Obligations and only two items for each type

of obligations were used with slight modification of the wording. The Short-

term, Stability, and External Marketability measures were omitted because

these obligations were considered as insignificant for the PC component for

this study. Based on the PCI Technical Report by Rousseau (2000), the

Short-term scale for instance, measures employee‘s non-obligation to remain

with the firm, and employer‘s non-obligation to offer future employments.

The Stability scale, on the other hand, measures employee‘s obligation to

remain with the firm, and employer‘s obligation to provide long-term

employment, whilst the External Marketability scale measures employee‘s

obligation to develop marketable skills, and employer‘s obligation to

enhance employee‘s long-term employability outside the organisation as well

as within it.

For the purpose of this study, the Short-term and the External Marketability

scale were excluded because the items appeared to be testing for employee

turnover and external labour market behaviour. These variables were not in

line with the focus of this study, which was the organisation‘s role in

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attracting, developing, and retaining employees, and employees‘ response in

reciprocating this treatment by remaining in the organisation. The Stability

scale was also excluded from the PC component of this study because of a

view that it has already been established in the literature that organisations

are increasingly incapable of providing a secure and steady employment and

benefits for the employees, and thus that employees are unlikely to remain

with their organisation indefinitely and make no plans to work elsewhere

The Stability scale was seen as particularly unlikely to be meaningful for

knowledge workers. Based on these justifications, all these three types of

obligations were omitted in the PC variable for this study.

By removing these three obligations, the questionnaire only measure for

employer-employee obligations for Loyalty, Narrow, Performance Support,

and Development. All the items measuring PC Transitions and PC

Fulfilment were retained, leading to a total of 32 items. As well the five-

point Likert scale ‗do not agree at all‘ (1) to ‗agree to a great extent‘ (5) was

retained. This adapted shorter version of the PCI had a good internal

consistency, with a Cronbach‘s alpha value of 0.84.

6) Intention to stay (ITS)

Participants‘ intention to continue working in the company was measured

using seven items adapted from the revised version of the PCI (Rousseau,

2008), specifically from the Employee Obligations section – Employee

Short-term and Employee Stability. Participants were asked to indicate how

much they agree or disagree with the seven statements, including ‗I will

remain with this organisation indefinitely‘ and ‗I plan to stay here a long

time‘ by choosing the response that best represented their intention to

continue working in the company. Their response was measured on a five-

point scale from ‗do not agree at all‘ (1) to ‗agree to a great extent‘ (5). This

scale has an acceptable internal consistency value of 0.72 Cronbach‘s alpha.

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7) Open-ended questions

The final section of the questionnaire asked the participants to response to

two open-ended questions about their company: ‗What do you like most

about working with your company?‘ and ‗What do you like least about

working with your company?‘. This section was constructed to enhance the

questionnaire data and identify the issues in Malaysian engineering firms

from the perspective of the engineers. Specifically it allowed for an

identification of the factors that might be contributing to Malaysian

engineers‘ retention and turnover behaviour.

HR INTERVIEW SCHEDULE

The interviews were designed to investigate the following aspects of the

participant‘s company, specifically regarding its HR policies and programs: HR

department role and function, HR department‘s decision making authority/influence

towards HR policies and programs, HR policies and programs (such as recruitment

and selection, training and development, rewards and appraisal, and career

development), turnover problem and HR retention strategies in the company (see

Appendix C for the list of questions).

These questions were constructed based on the suggestions in the literature

regarding the influence of an organisation‘s HR policies/programs/practices on

employee retention behaviour. This allowed testing for the relevance of the Western-

context HR literatures on Malaysian context. More importantly, the HR interview

schedule was also utilised to explore the role and function of HR department within

Malaysian firms, specifically engineering firms, since not much is known regarding

Malaysia‘s HRM practices (Mellahi and Wood in Budhwar, 2004).

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ENGINEERS’ INTERVIEW SCHEDULE

The interviews were designed to explore the following aspects of the participant‘s

career goals and perceptions of current employment: employment history since

graduation, current job description, opportunity for career development, personal

career goals, intention to stay or leave a company, support from company,

relationship with supervisor/co-workers/senior management, loyalty or commitment

to company, perception of mutual obligation/responsibility between employer and

participant, HR department in the company, intention to work in Singapore, and

conception of an ideal company or employer (see Appendix D for the list of

questions).

The choice of questions was designed to investigate Malaysian engineers‘

perspectives within two main aspects which have been argued in the literature to be

contributing to knowledge workers‘ retention attitudes and behaviours: their career

and their organisation. The career domain was investigated to identify the job-

hopping behaviours of participants, as well as the influence of the labour market and

of individual circumstances on each of the participants‘ career decisions. The

organisational domain, in contrast, was examined to understand the role of

organisations, specifically the role of HR department in terms of the organisation‘s

HR policies/programs/practices and the extent to which these HR aspects

demonstrated organisational support and fulfilment of PC, and hence influenced

participants‘ career decisions. The organisational domain also included the role of

the manager and of work colleagues in the analysis. The interview schedules were

also designed to investigate the relevance of the influence of individual employees‘

careers and organisation‘s HR policies/programs/practices, specifically in terms of

PC and POS, in the case of Malaysian engineers.

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DOCUMENT ANALYSIS

A range of primary and secondary documents was obtained and reviewed for the

purpose of this study. The primary documents include the company HR policies of

HR participants, and these companies‘ annual reports. The secondary documents

included official government statistical publications, newspaper articles and

publications from government and private institutions. Secondary documents such as

newspaper articles helped to clarify the context of this study, particularly debates

over skilled labour retention in Malaysia and the ‗brain drain‘ discourse. Official

statistics provided a basis of comparison for the primary data, suggesting the gaps

and deficiencies in this study which might be addressed by future research.

RESEARCH PROCESS

As indicated, the recruitment of research participants particularly in getting full

cooperation from HR managers appeared to be a major challenge for this study.

Apparently documentation relating to company HR policy was regarded as

confidential and thus not to be disclosed to outsiders. In fact, this appears to be the

practise of Asian companies in general and Malaysian companies specifically. There

is a lack of disclosures of HRM policies in Asia (PwC, 2007; Oxfam, 2008) because

HR issues are regarded as threats and challenges rather than as assets and a source of

competitive advantage (Chan and Burgess, 2010). Moreover, although disclosure of

HR policy and procedure is mandatory in Malaysian companies‘ annual reports11,

this requirement is not normally complied with by Malaysian companies.

A brief investigation of Malaysian HR personnel job descriptions and job

requirements from online job vacancy advertisements revealed that HR managers

and HR executives are indeed required to have a ‗strong sense of confidentiality due

to handling confidential documents‘ (for example Jobcity, 2012). This finding may

explain why despite the fact that HR participants were guaranteed anonymity in this

11 Based on Bursa Malaysia Listing Requirement in the Statement of Internal Control (Bursa Malaysia, 2012)

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study, they appeared to be strongly reluctant to disclose their companies‘ HR

policies, beyond very general information. It may be possible to suggest that their

career would have been in jeopardy as a result of such disclosure.

Not only were HR participants reluctant to disclose HR policy information for this

study but also several could not guarantee the participation of engineers in the web-

based survey due to engineers‘ work commitments. Nevertheless, HR participants

were encouraged to still publicise the survey web-link to the engineers highlighting

that the survey could be completed elsewhere than within the company. It appeared

that employees were not allowed to participate in non-work related activities during

working hours which consequently affected the survey participation. The main

reason given for the high rate of refusal from companies invited to participate in this

study was simply that they were ‗not interested‘ either because of the small size of

the company or because there were few engineers in the company.

Interviews with HR participants commenced in July 2009 which coincided with the

influenza H1N1 virus outbreak in Malaysia. As a result, one HR participant

cancelled the interview appointment due to company‘s policy towards overseas

visitors in order to contain the outbreak of the virus. Other options of interviews

were suggested to the participant including virtual chat and telephone interviews,

however the participant mentioned work commitments as the reason she could no

longer participate in the interview. A similar strategy was also used to increase

participation of HR respondents whereby respondents were given various options to

participate in the interviews: face-to-face, telephone, virtual chat, and written

responses. Although it would have been possible to establish telephone interviews

between Sydney and Malaysia, this technique appeared to be less feasible.

Specifically, telephone interviews with two HR participants had to be changed to

other techniques as a result of work interruptions experienced by the participants.

Overall, amongst 13 interviewees, three were conducted face-to-face, two were

conducted via virtual chat, and the rest eight respondents participated by providing

written responses.

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The use of a snowball sampling technique for the recruitment of interview

participants meant that the sampling did not produce a random sample because of

the potential biases present in the process. Therefore a variety of indirect sources

was used as a strategy to locate subjects (Faugier and Sargeant, 1997). For instance,

new participants for HR interviews were not only located using the contacts

suggested by HR respondents but also by contacting HR virtual groups.

Nevertheless, the latter did not provide any respondents possibly, as highlighted, due

to the perceived high confidentiality of HR information.

This section has revealed several difficulties encountered in conducting this study

which mainly involved the lack of participation and cooperation from HR

respondents, although more generally these difficulties were likely to have been the

result of company policies. Several strategies that were used to overcome these

difficulties include providing various interview options such as face-to-face and

virtual chat interviews, and recruiting HR respondents via multiple sources.

ETHICAL ISSUES

This study was designed according to Australian national research ethical standards.

For the survey of engineers, the participant‘s consent was confirmed by the

completion and return of the web-based survey. For the interview participants, each

was given an approved customised version of the University of New South Wales

Participation Information Statement and Consent Form (PISC, see Appendix E and

F). This briefly described the study, covered issues relating to confidentiality and

disclosure of information, procedure for complaints, and provided space for

participants to indicate consent to participate in the study and to revoke consent. The

interviewees were informed that any information provided during the interviews

would remain confidential and will be disclosed only with their permission, except

as required by law, and that the results from the interviews would be included in this

thesis, as well as in subsequent academic discussions and publications. All survey

and interview participants were promised anonymity (for interviewees, pseudonyms

are used in the thesis) so as to create an atmosphere where participants were able to

speak freely. The interviewees were also informed in the PISC form on the

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procedure to report any misconduct during the interviews and assured that that they

had freedom to withdraw their consent and to discontinue their participation at any

time without prejudice.

PRELIMINARY STATISTICAL ANALYSIS

Survey data was coded and prepared for multivariate analysis. The model being

tested consisted of a single dependent variable ITS (intention to stay) and a range of

independent variables including HRQuantity, HRQuality, POS, PC, demographic

and other variables. Tests of normality, linearity, outliers, residuals and

homoscedasticity were conducted to ensure that the assumptions of parametric

analysis were satisfied. To test the normality of the data, a procedure by Pallant

(2007) was adopted. Except for HRQuantity, visual inspection of the histograms and

the normal probability plot for POS, PC, HRQuality, HRITS, and ITS suggested that

the distribution for each variable was reasonably normally distributed, the

relationships between the variables were linear, and the variability of scores was

almost similar between the variables. As for HRQuantity, the normality test

suggested a skewed negative distribution indicating that many of the HR policies

and programs were available in the participant‘s company (See Appendix G and H

for details).

Osborne and Overbay (2004) have highlighted the benefits of recognising outliers

particularly for increasing the accuracy of a statistical analysis. An assessment of the

Boxplot revealed several points as outliers (see Appendix I for details). Descriptive

statistics provided an indication of how much of a problem these outlying cases had

created. Table 4.4 shows very little difference between the original mean and the 5

per cent trimmed mean12 in each of the five variables being examined. This suggests

that the extreme scores had little influence on the mean, and hence, according to

Pallant (2007), all cases can be retained for analysis.

12The 5 per cent trimmed mean was obtained by removing the top and bottom 5 per cent of the cases and then recalculating a new mean value.

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Table 4.4: Mean and trimmed Mean Variables Descriptive Statistic

PC Mean 103.32 5 per cent Trimmed Mean 103.24

POS Mean 32.80 5 per cent Trimmed Mean 32.66

HRQuality Mean 3.7206 5 per cent Trimmed Mean 3.7256

HRQuantity Mean 20.16 5 per cent Trimmed Mean 20.71

ITS Mean 18.97 5 per cent Trimmed Mean 18.97

The data collected from the survey of engineers was then analysed using

multivariate statistical analysis, including correlation, regression, multiple

mediation, and chi-square, as well as descriptive statistics. Assumptions for several

of these analyses were also tested prior to conducting the relevant analysis, which

enhanced the validity of the survey findings. Briefly, correlation analysis was

performed to test for significant relationships between all the variables under study.

Regression analysis, on the other hand, was used to examine the variables that were

most likely to influence the engineers‘ intention to stay working in a company,

whilst mediation analysis was conducted to measure the influence of the social

exchange constructs – POS and PC – towards the relationship between the HR

variables and engineers‘ intention to stay. Finally, chi-square analysis was utilised to

test the relationship between the engineers‘ demographic characteristics and their

intention to stay.

ANALYSIS OF INTERVIEWS

The interviews with the HR participants and with the engineers ranged in length

from about one hour to two hours and were conducted in both Malay and English

languages. Interviews were recorded with the permission of the participant and then

transcribed. Interview transcripts obtained from the HR participants were coded

along three main themes: participant‘s HR department‘s role and function, HR

policies and programs in the company (such as recruitment and selection, training

and development, reward and appraisal), and turnover and retention problem and

strategies in participant‘s company. These themes were coded to facilitate

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understanding of the HR department, HR policies/programs/practices, and the

problem of turnover/retention strategies within Malaysian engineering firms. In

particular, the findings from the HR interviews provided examples for exploring the

complexity of retention strategies. More importantly, this analysis enabled

exploration of the perceived extent of the problem of retention in Malaysian

engineering firms, and how this problem was being addressed. It also offered a basis

of comparison between organisations‘ strategies for addressing the problem of

retention and engineer‘s perceptions regarding the factors that might influence their

retention in a company.

Transcripts obtained from interviews with the engineers were coded for three main

themes: participant‘s career history, intention to stay or leave factors for each

engagement, and turnover factors (specifically for participants who had employment

histories with several firms).Sub-topic areas focused on factors that had influenced

each decision. They also provided examples for exploring the complexity and

contingency of turnover decisions. These themes were coded in such a way to allow

deeper understanding of the factors that contributed to each career decision, either

intention to stay, intention to leave, or turnover. Elements of PC and POS were also

explored for each of these aspects to identify the relevance and the significance of

both concepts for the retention of Malaysian engineers. The data allowed an

investigation of the connections between organisations‘ HR policies and programs,

evidence of individual engineers‘ perceptions of an exchange relationship, and their

intention to continue working with a company or to leave it.

CONCLUSION

This chapter has elaborated the four approaches to data collection undertaken in this

study. Whilst the questionnaire was designed to test the statistical relationships

between the three main variables under study – HR policies/programs, POS, and PC

– and engineer‘s intention to stay working in a company, the interview component

was constructed to examine Malaysian engineers‘ job-hopping attitudes, and the

possible individual, labour market, and organisational factors that influenced

engineers‘ intention to stay with or leave a company. The HR interviews as well as

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the primary and secondary documents were utilised to provide a contextual

understanding of the problem of retention in Malaysia and specifically amongst

engineers and the knowledge workers, and the HRM practices in Malaysian

engineering organisations. Analysis of data obtained from these four sources is set

out in the next three chapters.

Based on the analysis of all data components, it has been possible to arrive at

matching the two perspectives – the organisations‘ and the individual engineers‘,

regarding the possible solutions for inducing the commitment and retention of

Malaysian engineers. In particular, these data offer the possibility for identifying the

HR factors that may influence the retention of Malaysian engineers, as well as the

influence of the social exchange construct on this relationship. The following

chapters explore the challenges of employee retention for Malaysian organisations

specifically engineering firms, the complexities of engineers‘ career decision, the

mismatch between Malaysian organisations HRM practices and retention strategies

and engineers‘ needs, wants, and expectations, and the relationship between this

mismatch and their commitment and retention. The research design enabled

explorations from both the organisation‘s and individual engineer‘s perspectives,

and also allowed for testing of the relevance of Western-HRM concepts within the

context of Malaysia.

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CHAPTER 5

MANAGING HUMAN RESOURCES IN

MALAYSIA: THE LABOUR MARKET

CONTEXT AND ENGINEERING FIRMS’

RESPONSES

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INTRODUCTION

This chapter assesses the role being played by firm-level HRM in Malaysia, in

managing the retention and deployment of the nation‘s engineering workforce, in the

context of the government‘s objective of achieving developed nation status by 2020.

It discusses the specific characteristics of HR practice in Malaysia that are of relevance

to the engineering retention problem, drawing on a mixed range of sources. A review of

existing literature on Malaysian government and firm-level HRD and HRM

practices will show how they diverge from western approaches. This general

analysis illustrates that in Malaysia, HR tends to be seen in operational, not strategic

terms. It is thus not well geared to addressing the specific needs of individual

engineering knowledge workers in a way that would encourage their retention. This

analysis leads to an exploration of whether the management practices of Malaysian

engineering firms might be operating to discourage retention. If this is the case, then

it can be argued that there are ‗push‘ factors operating in the exit of engineers from

one firm to another, and that ‗job-hopping‘ is not simply a matter of the ‗pull‘ of

other firms inside our outside Malaysia.

The problem is – can a bridge be built between the hierarchical managerial

approaches of Malaysian firms and knowledge workers who know their own value

and are prepared to vote with their feet? Could HR practitioners act as mediators

between knowledge work employees and ‗bureaucratic‘ or authoritarian managers?

Can a specifically Malaysian high performance approach be identified that will

solve this problem and thereby contribute to engineer retention? Securing the

commitment of engineers to organisations has clearly been recognised as a problem

in Malaysia, given the raft of recent studies based on models, drawn from western

organisational psychology texts, linking employee commitment and retention to

perceptions of organizational support.

This chapter includes a meta-analysis of these recent studies. The recent literature

on Malaysian HR practice is not specific to engineering firms, and rather few of the

recent Malaysian organisational psychology studies focus on knowledge workers.

In assembling the available secondary data on Malaysian employment relations, I

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therefore intersperse and illustrate it by drawing on my own fieldwork interviews

with the small number of HR practitioners who were willing to grant interviews.

The chapter assembles evidence designed to help answer two research questions

from the labour demand side:

RQ4:What case can be made for Malaysian organisations to adopt human

resource/knowledge management practices designed to foster engineers‘ skill

development and retention?

RQ5: Can evidence of a SHRM approach to the management of engineering

talent, be identified, either in the desk research or in the fieldwork

undertaken?

Such demand-side approaches need to address significant supply-side issues.

Additionally, therefore, the chapter assembles available evidence allowing an

assessment of the characteristics of Malaysian engineers that might pose more or

less intractable barriers to firms‘ efforts at retention. The chapter provides a meta-

analysis of recent academic efforts to assess the specific relevance to Malaysia, of

elements of the social exchange theories outlined in Chapter 3. It also provides an

overview of what is known about Malaysian engineers and their labour market. Thus

it also helps to answer a third research question:

RQ2: How do the characteristics of the labour market(s) for Malaysian

engineers influence their retention patterns and turnover intentions?

2a. What are the key characteristics of the Malaysian engineering

labour market(s)?

2b. How can an understanding of these characteristics contribute to

an understanding and resolution of the ‗job hopping‘ issue?

This chapter draws on the literature on convergence and divergence in approaches to

HRM, in order to locate Malaysian HR strategies. It uses secondary sources,

including recent Malaysian research reports testing various retention models drawn

from western organisational psychology literature. It uses published statistics to

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build up a picture of the Malaysian engineering workforce, identifying possible

sources of the stereotyped view of this workforce as inherently footloose. It also

begins the process of utilising fieldwork data, by illustrating or contrasting ‗desk

research‘ evidence with findings from the interviews with HR practitioners.

Comparison of evidence from the interviews with HR managers or nominated HR

officers, and data from secondary documents is utilised to identify any evidence of a

strategic human resource management (SHRM) approach to the management of

engineers in Malaysian firms. This allows for an evaluation of the relevance to

Malaysia of western SHRM approaches in enhancing engineer retention.

Following this introductory overview, the second section of the chapter surveys

theoretical debates over the convergence and divergence of western and Asian

models of HRM, with reference to Malaysia. The third section uses secondary data

to review ways in which government and commentators in Malaysia have

conceptualised and addressed ‗push‘ and ‗pull‘ components of the turnover issue

and provide a general overview of the direction of HRM and HRD at national level.

The fourth section shifts to firm-level and provides an overview from secondary

sources of SHRM approaches and specific HRM practices in Malaysia, interweaving

this analysis with examples drawn from field work interviews with HR practitioners

in firms employing engineers. This analysis provides an understanding of the sorts

of HR practices whose impact on intention to stay will be investigated empirically.

As a key focus of the research is the relevance of social exchange theory concepts to

engineers‘ turnover intentions, the fifth section provides a meta-analysis of a range

of recent studies, applying this theory to different parts of the Malaysian labour

markets. This section also draws on both published data and fieldwork interviews to

provide key findings and various factors pertaining to the HR challenges of

employee retention in Malaysia. The sixth section discusses the challenges to

employee retention that arise as a result of individual and demographic factors. One

such challenge is the unique composition of the Malaysian workforce, which needs

to be considered, especially in designing rewards and benefits policy as a retention

strategy. The final section outlines the chapter‘s key findings.

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WESTERN AND ASIAN MODELS OF HUMAN RESOURCE

MANAGEMENT: CONVERGENCE OR DIVERGENCE?

The management of ‗human resources‘ is conceptualised in Malaysia as national

matter, with labour laws in the hands of the Ministry of Human Resources (MOHR).

Chapter 1 has indicated that the Ministry is seen in the 2010-2015 Tenth Malaysia

Plan as playing an important role, through labour law reform, in steering the nation

through the virtuous circle to achieving knowledge economy status. Such reform

was acknowledged in earlier development plans as necessary, because high levels of

state control were seen as having previously shored up the authoritarian exercise of

workplace-level managerial power in a way that was inimical to the context of

autonomy in which knowledge work flourishes (Kuruvilla, 1996; Todd, Lansbury

and Davis, 2004a). It has been argued that both as regulator and as significant

employer, the Government has the power to institute comprehensive changes in the

Malaysian system leading to a ‗high commitment/high performance‘ model of

industrial relations appropriate to a knowledge economy (Todd, Lansbury and

Davis, 2004b:2).

By contrast with this national level conceptualisation of Human Resource

Management (HRM) strategy, Anglophone Western approaches to HRM are more

decentralised and firm-based. They have been seen in the US and the UK as a way

of weakening both collective bargaining and pluralist decision-making, by shifting

industrial relations to workplace level and by aiding a consolidation of ‗unitarist‘

managerial authority. In fact there are competing strands within western HRM,

evident in its consolidation as an academic discipline in the early 1980s. The

publication of the ‗Harvard‘ model (Beer et al., 1984) and the more unitarist

‗Michigan‘ model (Fombrun et al., 1984) illustrated these two strands. The Harvard

model acknowledged multiple stakeholders, emphasising commitment to long-term

development, while the Michigan model was based on a top-down approach to

matching environment, business strategy and HR approaches. UK commentators, in

critical analysis and empirical testing of these and other ‗strategic HRM‘ models,

found that firms were engaging in a spectrum of practice along the continuum from

unitarism to consultative forms of pluralism as well as a spectrum from collective

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bargaining to union exclusion. They used terms such as ‗black hole‘ (Guest, 2001)

and ‗bleak house‘ (Sisson, 1993) to describe workplaces in which HRM excluded

both collective bargaining and direct consultation with employees. Such workplaces

were seen as being characterised by an instrumental, cost-minimising approach to

staffing, an authoritarian absence of communication and grievance resolution

mechanisms, and high turnover. This description appears to have analogies with the

types of management practices that are seen by Malaysian academics and policy-

makers alike as lacking congruence with knowledge economy objectives

(Aminuddini, 2009; Jomo and Todd, 1994; Suhanah, 2002; Todd and Peetz, 2001).

In order to identify the extent to which Malaysian firms are likely to adopt and adapt

HRM concepts originating elsewhere, it is necessary to have some cognisance of the

debate over whether different countries‘ HRM policies and practices are converging

or diverging. Galang (2008) argues that two countries may travel in a similar

direction without ever reaching the same endpoint; alternatively over time they may

follow different paths to the same end, or travel divergent paths to divergent ends.

Mc Gaughey and De Cieri (1999) similarly argue that convergence and divergence

are dynamic processes: the former may result either in integration of two formerly

discrete sets of practices or the assimilation of one into the other, whilst the latter

can involve either separation or the emergence of something new. Convergence

may be piecemeal: countries may be selective in the practices they borrow. As the

Look East example indicates, Malaysia has sought convergence with aspects of

Japanese, Korean and Taiwanese business practice, whilst simultaneously seeking to

move away from western HRM practice.

Becker and Gerhardt (1996) have argued that at the deep structural level, HR

strategies are converging because firms in different countries are experiencing a

universality of global business imperatives, whereas at the level of policy and

practice, there may be more scope for culturally divergent practice. Frenkel and

Kuruvilla (2002) have argued that whilst globalisation creates an underlying logic of

convergence, this is filtered through divergent state policies, industrialisation

strategies, and national cultural factors. Drawing on neo-institutional theory, Yeung,

Warner and Rowley (2008) reached a similar conclusion. They argued that cross-

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national reproduction of HR practices may occur for coercive, ethical, or mimetic

reasons (DiMaggio and Powell, 1983). Examples of coercive pressures might

include the impacts of global markets, financial crises, technological drivers, or

supranational regulatory pressures; mimetic pressures may come from sources such

as the internationalisation of academic management curricula. Yueng, Warner and

Rowley (2008) noted the importance of time-lags as a source of divergence. They

identified three clusters of national HRM systems in East and Southeast Asia: those

in the developed economies of Japan, Korea and Taiwan, which reached their

current position with the support of a developmental state; those in the developing

economies such as Malaysia and Thailand, where market pressures are quite strong,

and transitional economies like China and Vietnam where again the state is

supporting development. They identified a mix of convergent responses to

globalisation and nationally divergent cultural practices, hypothesising that the

pressures for some HR practices such as performance pay and training may be

global, whilst other practices such as styles of people management, performance

management and of coaching and mentoring may be more culturally-specific. They

concluded that critical talent shortages will ultimately create a universal pressure for

strategic approaches that over-ride local cultural considerations. Similar conclusions

were reached by Butler and Lee (2003).

In the light of the Malaysian brain drain, particularly to Singapore, it is worth

comparing the development approaches of the two countries. Leggett (2007)

applied the term ‗transformation‘ to the changes in Singapore‘s employment

relations system since 1997, defining the term to mean an inter-related set of

structural changes that preserved, in new form, elements of what went before. For

Leggett, the transformation occurred when ‗… the Ministry of Labour was renamed

the Ministry of Manpower and equipped with a mission to reform industrial relations

into manpower planning‘ (Leggett, 2007: 643). Like US high performance models,

the changes required strategic choices of combinations of flexibility and stability,

but unlike the US model, the Singaporean one was a tripartite and multi-level effort

to harness all aspects of social life to the goal of development. Along with the goal

of integrated labour force planning, went lifelong learning and lifelong and

employability and augmentation of the talent pool. Further goals were

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transformation of the work environment, including best practice HRM, development

of a vibrant manpower industry; and a redefinition of partnerships. A pluralist model

of collaboration with unions was expressed in an agenda that included social

development and the fostering of participation and HRD at the levels of society,

work, community and workplace (Leggett, 2007: 653-4). Regardless of debates

about rhetoric and reality, this development approach created a space for engaging

knowledge workers.

In the case of the Malaysian transformation model, in addressing the need to

reconcile convergence and distinctiveness, Todd, Lansbury and Davis (2004b)

proposed an approach that was both ‗high road‘ and consistent with Malaysian

traditions. As with approaches elsewhere to creating high performance/high

commitment workplaces, the model included job security, an internal labour market,

flexible work organisation based on multi-skilling, and a particular approach to

training. This high performance approach focused on developing the high-level

general cognitive and communication skills that would allow jobholders to operate

autonomously as knowledge workers, continuing to learn and develop into the

middle and later stages of their working lives (Whitfield and Poole, 1997). Where

high performance approaches have diverged, is in the area of employee

involvement. Todd, Lansbury and Davis (2004b) argued strongly Malaysia should

adopt a union-collectivist approach to participation. The alternative is not

necessarily a ‗bleak house‘: the high performance literature does provide for a range

of models of involvement (Kochan, Katz and McKersie, 1986; Appelbaum and Batt,

1994; Whitfield and Poole, 1997). The next section explores the extent to which

Malaysian employers have moved towards any form of employee involvement

approach, the extent to which Government policy has fostered it, and possible

implications for engineering employee retention.

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APPROACHES TO TURNOVER/RETENTION BEHAVIOUR:

‘PUSH’ AND ‘PULL’ FACTORS

Chapter 1 of the thesis has indicated that the problem of turnover in Malaysia can be

categorised into three dimensions: emigration to other developed economies, cross-

border mobility, specifically between the Malaysian state of Johore and Singapore,

and internal job-hopping behaviour. According to Khatri, Chong and Budhwar

(2001), Asian countries such as Singapore and Malaysia face labour shortages due to

high employee turnover, whereby ‗employees are believed to job hop for no reason,

or even for fun‘ (Khatri et al., 2001: 54). Malaysian employees appear to pursue

their careers by moving from one company to another, either locally or globally. The

‗fun‘ explanation locates the source of the retention problem within the turnover

behaviour of individual Malaysian workers, acting en masse. It suggests something

volatile, unpredictable, even frivolous, and hence inexplicable.

This tendency to locate the source of turnover in individuals can be seen in a report

on HR trends in Malaysia published by JobStreet (2011). It described Malaysian

labour as having undergone a generational transformation in terms of their views

towards careers. Younger Malaysian workers were described as becoming more

adventurous in their choice of job location – they ‗want to see the world‘, and the

new global economies such as China and Vietnam were seen as attracting regional

labour to pursue careers. The Jobstreet report (2011) claimed that amongst the top

five market job trends for 2010 and beyond were that ‗jobseekers will be active and

mobile and choosy‘, and ‗job hopping will be pertinent, retention is key‘. Whilst

there are many popular destinations countries for Malaysian emigrating overseas,

including Australia and the United Kingdom, the Malaysia-Singapore migration

corridor is the most significant in terms of the brain drain (World Bank, 2011).

Malaysians who seek jobs in Singapore are generally aware of the possibility of

earning higher incomes due to exchange rates, and thus this monetary factor is likely

to be an attractive factor for Malaysian jobseekers who are willing to explore

overseas opportunities (JobStreet, 2011). According to two reports published by the

Malaysian Department of Statistic (DOS) - the ‗Migration Survey‘ (DOS, 2009) and

the ‗Why do people migrate?‘ (DOS, 2010a) reports, labour mobility is apparent in

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Malaysia especially among workers aged 25 and above. In Malaysia, fresh graduates

normally first enter the labour market for employment at the age of 24 years, which

suggests that fresh graduates are more likely to job hop than those who have long

graduated from a tertiary institution.

The term ‗brain drain‘ suggests an adverse effect on the sustainability of a country.

There is a lack of consensus about the actual economic impact of the brain drain:

international mobility is less of a problem if it reflects an individual life-cycle

pattern, with knowledge workers sooner or later returning home, bringing global

learning with them. An alternative (at best a back-up) is to see the Malaysian

knowledge worker diaspora as participating in a global labour market, and as

replaceable by skilled immigrants. The Malaysian government has continued to

place a heavy emphasis on ‗talent‘ initiatives with the aim of training and retaining

local talent, while simultaneously attracting highly-skilled foreign migrants to

Malaysia and encouraging Malaysians residing and working overseas to return to

Malaysia (Tyson, Jeram, Sivapragasam and Azlan, 2011). According to a report on

the brain drain in Malaysia by the WorldBank (2011), Singapore was attracting

57per cent of the entire Malaysian diaspora, with most of the remainder residing in

Australia, Brunei, United Kingdom and United States. In terms of ethnicity, almost

90 per cent of the Malaysian diaspora in Singapore was Chinese. The report also

indicated that Malaysia‘s rate of brain drain had elevated to three times larger than

to two decades ago and mainly involved skilled labour.

Lee (1993) investigated the ‗pull‘ factors influencing the migration flow of Asian-

born scientists and engineers to the United States. He described three elements that

influenced this flow: supply, demand, and institutional factors. Foreign students who

later adjusted to immigrant status and immigrations who came directly from Asian

countries were the major source of supply, whilst the scarcity of local workers in

scientific and engineering fields was the most important factor affecting demand for

immigration, as well as institutional factors such as immigration policies which drew

Asian-born scientist and engineers. It was estimated in 2010 that as much as 50 per

cent of Malaysians emigrating overseas were highly skilled, tertiary educated, and

thus represented a net loss for the country in terms of economic growth and national

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development (NEAC 2010:42). This skilled labour emigrated from Malaysia to

other countries both for employment and as permanent migration (Kanapathy,

2008).

In addition to these ‗pull‘ factors, it is important to take account of factors that may

either function as ‗push‘ factors, or at the very least, fail to exert a counter-balancing

‗pull‘ towards retention in, or return to, Malaysia. The EVLN model outlined in

Chapter 3 (Si and Li, 2012) linked retention to employees‘ potential responses to

Human Resource Management Practices (HRMP) in an organisation. Some

commentators have suggested that there is a sort of ‗bleak house‘ model of HRMP

in evidence in some Malaysian firms employing knowledge workers that may

contribute to the rate of exit. Writing about IT professionals, Othman and Teh

(2003) argued that (at that time at any rate) government intervention was shielding

their employing organisations from the competitive pressures that would result in

the creation of the high performance work systems in which they would be happiest

working:

While the activist role of the Malaysian government reflected a

determination to give more emphasis to human resource development, it

appears that the limited professional ability of HR managers may impose

some limitation on this ambition. Such a shortcoming may limit the ability

of the HR function to make a contribution in developing HPWS. (Othman

and Teh, 2003: 400)

These authors cited assessments, from the late 1990s (Juhary and Saiyadain, 1996;

Hazman, 1998), of the low status of the HR function in Malaysian organisations, and

the lack of strategic influence of Malaysian HR managers. Othman and Teh (2003)

also noted that even heavy training investment could miss the mark if it did not

foster organisational learning. They quoted opinions (Lawler et al., 2000; Thomas

and Au, 1999) that hierarchical organisational cultures in Asian countries, including

Malaysia, might foster a ‗non-participative‘ form of harmony-seeking conformity

and a vertical, power distance based model of collectivism that tended to undermine

high performance team based information sharing. Individuals would be expected to

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exhibit less voice in such settings, with high exit rates the result. Nevertheless,

Othman and Teh (2003) noted a new dynamism, especially in the export-oriented

sector. One question explored in this chapter is whether HRM strategy and practice

have changed in Malaysia in the past decade.

In the rest of this section, the focus is on national level HRM and HRD strategies,

whilst in the section that follows, the focus shifts to firm-level HRM strategy and

practice. As indicated in Chapter 1, Malaysia is categorised as a developing country

and according to Abdullah et al. (2007) is moving towards a knowledge-based

economy. Malaysia has been characterised as an ‗emerging tiger‘ (Burton, Butler

and Mowday, 2003).The development of a knowledge-based economy is believed to

be important for the country to sustain its economic growth and competitive

advantage, and furthermore crucial to achieving the country‘s Vision 2020 –

Malaysia‘s aspiration to become a fully developed country in its own mould by the

year 2020. The strategies to achieve this objective have been elaborated in the

National Vision Policy where emphasis has been given to the need to build a

resilient and competitive nation, specifically to develop a knowledge-based

economy. In this context, HRD has become a key component of the new economic

development. It was argued by Kuruvilla (1996) and Todd, Lansbury and Davis

(2004a, 2004b), that national industrial relations/HRM policy, however, remained

tied to a system of regulation designed to reassure foreign investors of workplace

‗harmony‘, and that a more participative model would better foster knowledge

worker engagement.

The national HRD policy in Malaysia has been to equip its human resources with the

skills, knowledge and expertise to enhance the innovativeness and creativity of its

workforce (Abdullah et al, 2007). The HRD Act, 1992 was established to provide

unskilled or low skilled workers to be trained and developed with higher skills, and

also to provide potential workers with the opportunity to acquire more knowledge

and skills. It required organisations employing more than 50 employees to contribute

one percent of their monthly payroll to the training fund and acts as an incentive

scheme whereby grants from the fund can be provided to employers to undertake

and accelerate systematic training programs for employees (Mellahi and Wood in

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Budhwar, 2004). Under the legislation also, numerous support, initiatives, and

incentives were provided by the government to assist organisations in developing its

human resources. These initiatives included the various training schemes (either

partially or fully funded) such as the Workers‘ ICT Training Scheme to increase

workers expertise on information and communication technology.

Substantial amount of resources have been invested in human resources education

and training. For example, in August 2004, the government approved 1.72 billion

ringgit for the purpose of retraining and upgrading the skills of workers (MOHR,

2004). In addition, in supporting the demand for skilled and knowledgeable human

resources, the government rapidly increased its accreditation of training providers

and institutions, from only nine in 1993 to 1,809 in 2002 (MOHR, 2003). The HRD

fund which was initially open only to the manufacturing sector was expanded to the

service sector (Mellahi and Wood in Budhwar, 2004). These HRD initiatives

showed the government‘s strong support for HRD in Malaysian firms, especially in

knowledge-intensive industries with a strong science and technology base. The

MOHR has been not only a key player in the HRD of Malaysian labours but also in

the HRM function, specifically in shaping HRM policies and practices in Malaysia.

According to Mellahi and Wood in Budhwar (2004), the Malaysian government

played a key role in developing the labour administration policy, promotion of

workers‘ welfare (especially Bumiputera) and in promoting industrial relations

harmony by controlling labour union activities. This analysis suggests the prominent

role of the Malaysian government, specifically the MOHR, in the management and

development of its human resources. One of the key reasons has been that the

Malaysian government has been the single largest employer in the country (Mellahi

and Wood in Budhwar, 2004).

The Malaysian government has historically offered protection to Malaysian labour

and employers through a range of legislative provisions – in particular through the

three major labour laws, the Employment Act 1955, the Industrial Relations Act

1967, and the Trade Unions Act 1959. Briefly, the Employment Act has provided

minimum terms and conditions to a particular group of workers; the Industrial

Relations Act, on the other hand, has provided ways of settling disputes between

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employees and the employer; whereas the Trade Union Act has regulated trade

union registration and the uses of trade union funds. For the purpose of analysis,

only the Employment Act13 is reviewed since it directly affects the welfare of

Malaysian labour.

The Employment Act was first legislated in 1955 and has been amended three times

– in 1981, 1998, and recently in February 2012. It is the main legislation which

applies to employees in Peninsular Malaysia and the Federal Territory of Labuan

earning a salary not exceeding 1,500 ringgit per month. Those whose salary ranges

between 1,500 ringgit and 5,000 ringgit can consult the Labour Court, if they are

seeking justice, or making inquiries. The Employment Act specifies minimum

standards for workers covered by it. These include hours of work, overtime rates,

employment contracts, leave, maternity benefits, retrenchment, dismissals, and

deductions from wages, rest days and complaint and compensation procedures. This

description suggests that Malaysian engineers may not be protected under the

Employment Act as fresh graduate engineers generally earn a starting salary

between 2,000 and 2,700 ringgit per month14.

Moreover, home-based workers and casual workers are also unprotected by the

Employment Act since they are not regarded as ‗workers‘ according to the Act. As a

result, home-based workers who mainly involved within a subcontracting

employment such as traditional handicraft are not eligible for any of the provisions

in the Act such as weekly rest day, annual leave, sick leave, and maternity benefits,

thus they are likely to be exploited by their employing contractor (Xavier, 2008).

Based on the recent amendment made to the Employment Act, the definition of

employee covered by the Act has included ‗foreign domestic servant‘ to refer to

domestic servants who are not a citizen or a permanent resident in Malaysia. The

definition of ‗part time employee‘ has also been revised, along with several other

amendments to the Act15. Although there are propositions for the government to

fully protect employees earning more than 1,500 ringgit per month especially should

13 The Employment Act 1955 is available online from the MOHR website http://jtksm.mohr.gov.my/images/pdf/akta/akta_kerja_1955_bi.pdf 14 Figure obtained from the salary report for engineers by JobStreet Malaysia (2012) 15 Full amendments to the Employment Act 1955 is accessible from http://www.mkma.org/Notice%20Board/2012/EmploymentAmendedAct2012.pdf

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the government gazetted the bill for a later retirement age for labours (Ng, 2012),

there is no indication that this revision will be taking place anytime soon. Whilst this

labour law context does not directly affect engineers, it does help shape the general

climate of conformity within which HR managers operate.

In sum, this section has discussed the key characteristics of HRM and HRD in

Malaysia. This analysis indicates a high level of Malaysian government intervention

in the policies, programs and practices of HRM and HRD in Malaysian firms.

Nevertheless whilst labour law appears not to protect the minimum labour rights of

white-collar workers in Malaysia, including engineers, HRD strategies on the other

hand seem to provide equal training and development opportunities for all

employees. The salary report produced by JobStreet Malaysia(2011) indicated that

the minimum salary for fresh graduates in Malaysia was1,500 ringgit per month,

suggesting that the 24 per cent of the Malaysian employed population who were

tertiary-educated were not protected by the labour law (DOS, 2010c). This analysis

highlights the segregation of labour in Malaysia which for instance distinguishes

between the engineers who possess tertiary qualifications and technicians who

possess secondary qualifications. This may have an impact on the HR

policies/programs/practices in Malaysian organisations, specifically towards

knowledge workers, including engineers.

HRM APPROACHES IN MALAYSIAN FIRMS – IMPLICATIONS

FOR ENGINEERING RETENTION

We now turn to an examination of whether Malaysian firms, specifically their HR

practices, could play a larger role in mitigating job-hopping behaviour, and fostering

the development and more intensive contribution of knowledge workers. This

section summarises the available published information about HR in Malaysia in an

effort to answer this question. It then draws specifically on interview data collected

from HR practitioners in engineering firms, to illustrate how the Malaysian HR

practices identified might impact on engineering knowledge workers. We begin by

examining the extent to which HR departments and practitioners are seen as

strategic partners, able to influence firm policies towards engineers, and to play a

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mediating role on their behalf. After that, we examine in turn, each of the main

operational functions of HR, in order to see whether their implementation might

play a strategic role in fostering retention.

HRM in Malaysia has been described as based on a combination of the British-HRM

model and an ‗ethics model‘, derived from economic, legal, political, and social

institution backgrounds in Malaysia (Chew, 2005; Warner, 2000).Malaysian

organisations began to regard people as ‗assets‘ instead of ‗costs‘ only since the

1990s. The HRM field is growing rapidly in Malaysia with a view that HRM is a

specialised and discrete business function (Mellahi and Wood in Budhawar, 2004;

Abdul-Rahman and Rowley, 2008). Overall, Malaysian companies pick and mix

Japanese and Western HR practices to suit their needs (Mansor and Ali, 1998).

Government-supported training programs for entrepreneurs have reached many

small and medium enterprises: Kadir and Rosli (2011) found a high level of self-

confidence in their own managerial skills by small indigenous operators in Kelantan

and Klang Valley (2011). Nevertheless, Chew (2005) indicated that in Malaysian

firms, HR departments played merely an administrative role and had limited

authority in managing human resources.

Moreover, since the field of HRM is in a state of evolution in Malaysia, fears have

been expressed that the HR practices being implemented by firms have become

barriers to retention. The key issue pertaining to retention is turnover trends, which

Malaysian firms have to address. According to Chew (2005), because Malaysian

employees are inclined to job hop and turnover rates have been increasing, firms

have been reluctant to employ career development strategies for their employees.

Instead, Malaysian firms have tended to abandon internal training programs (Chew,

2005), recruit employees from the external labour market (Mansor and Ali, 1998),

delimit reward offers to basic salary, allowances and bonuses, provide minimal

support for career planning and expect employee to take initiatives and be

responsible for personal career development (Abdul-Rahman and Rowley, 2008).

Employee development programs has been described as being taken seriously only

in big-sized corporations and multinational corporations – these large companies

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have set up their own development centres to provide in-house training program for

their employees (Abdul-Rahman and Rowley, 2008). As for employees working in

smaller firms, they have to independently seek internal and external development

opportunities. The scenario among organisations in Malaysia presents a system

which is based on profit maximization rather than an orientation to people. Even

though studies have shown that HRM practices can influence employees‘ behaviour

and affect organisational well-being, Malaysian firms are thought generally not to

have embraced these practices. The reluctance of HR staff to participate in

interviews that was encountered during fieldwork for this study is consistent with

what has already been written concerning the relative lack of authority of HR

practitioners, and the power distance that led many managers, when approached, to

refuse interviews in the grounds that they were an intrusion on managerial

prerogative. Nevertheless, relevant extracts from interviews with 13 HR

practitioners of Malaysian engineering firms conducted in 2009 are provided, to

signal the complexity underpinning generalisations.

STRATEGIC HR AND THE ROLE OF THE HR DEPARTMENT

At the policy level, HRM has certainly been recognised as a strategic issue. Chew

(2005) for example noted how skilled labour shortage and turnover have been

discussed as issues of concern in a succession of annual reports by the Malaysian

Employers‘ Federation. Nevertheless, in studying firm-level strategies to address

the issue, Chew‘s focus was on multinational companies from six home countries,

and he produced evidence of a trend to serious succession planning, based on a

strategy of replacing expatriates with local talent wherever possible, using intensive

training. Nevertheless it was difficult to find published studies of firm-level SHRM

and even more difficult to find studies of SHRM in engineering firms. The evidence

collected in the field interviews was somewhat contradictory. On the one hand, there

was certainly recognition of SHRM issues and of the potentially mediating role of

HR staff. Based on the interviews with the HR participants, it was found that the

HR department in Malaysian engineering companies is considered as playing an

important role for both the company and also the employees:

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HR department is important to the company. It supports the company‟s

production by supplying the company with workers and paying the employees

with salary. HR acts as the middle person, who conveys certain information to

the company from the workers. (Ms Thian, Penang)

Extremely important because HR department plays an important role in

various functions especially that HR covers the full spectrums ranging from

general office administration to employee relations. (Ms Yeoh, Selangor)

The HR function includes a variety of activities, and the main activity is

deciding on the company‟s staffing needs, whether to use independent

contractors or hire employees to fill these needs, to recruit and train the best

employees, ensuring they are high performers, dealing with performance

issues, and ensuring your personnel and management practices conform to

various regulations. HR activities also include managing the approach to

employee benefits and compensation, employee records and personnel

policies. (Mrs Nor, Penang)

On the other hand, a number of informants focused on the operational role of HRM:

Support the company in order to run the production smoothly such as by

supplying manpower, salary payment, employee relation, conducting training,

general administration and other welfare service to employees. (Mrs Shah,

Penang)

Overall, in terms of the functions of HR department in Malaysian engineering firms,

the descriptions by all participants included key characteristics such as; (1)

recruitment and selection, (2) training, learning and development, (3) employee

services and employee relations, (4) rewards, compensation and benefits, and (5)

performance appraisal. These responses suggest that HR departments of these

Malaysian engineering companies are responsible for various aspects of HRM and

HRD within the organisations, although the role of HR departments for many

companies under study appear to be rather administrative rather than strategic. The

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exception was one participant who indicated ‗talent retention‟ as one of the key

processes for the HR department (Mrs Nurul, Johore).

On the whole, the interviews indicated that decisions relating to HR policy and

programs on HRM and HRD are still in the hands of the company‘s top management

whereby the HR managers and the executives appear to not have much influence in

the these decisions:

Decisions made by the top management only. I have very little influence even

the HR manager has little authority on policy decisions. (Mrs Shah, Penang)

Sometimes [the HR department makes decisions relating to policy and

programs for HRM and HRD]. Depends on top management. Executives don‟t

have much influence. (Ms Ila, Johore)

Besides, according to one HR interviewee, the HR department is only allowed to

make ad hoc decisions on matters that involve minimal cost and for urgent needs,

whereas in terms of recruitment, payroll and employee benefits policy decisions, the

HR department is required to obtain the approval from the top management (Mrs

Nor, Penang).

The HR practitioners interviewed saw their role as important to the company

because they were responsible for sourcing labour as well as for managing staff. For

some participants however, their role in some cases extended to developing and

retaining the employees. This indicates that not all companies in Malaysia have

embraced the strategic HRM approach, despite acknowledging the mediating role of

HR department in the employee-employer relationship.

Overall, HR is the bridge connecting the management and employees (Mr

Soon, Selangor).

The findings suggest that HR departments in Malaysian engineering firms have

rather little authority in making or influencing decisions relating to HR policy and

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programs for employees. HR policy and program in Malaysian engineering

companies are based on the approval of the top management of the company, who in

turn are complying with government policy. This is consistent with the view,

presented earlier, that the HRM and HRD system in Malaysia is largely influenced

by the government of Malaysia.

Nevertheless, in a recent cross-industry survey of Malaysian employers, Osman, Ho

and Galang (2011) found a high incidence of HR practices. Respondents, who were

either senior executives or HR managers, were asked to rate the impact of these

practices on organisational performance. Those rated highest were employee

relations and communication (avenues for voice); career planning and job/work

design. The first and third of these are consistent with the discussion above of high

performance work systems, and the second is particularly relevant to the retention

issue.

Gould-Williams and Mahomed (2010) have argued that it is not isolated HR

practices, but ‗bundles‘ of practices that impact on employee outcomes, signalling

an integrated strategic approach. It therefore may be of some concern that Osman,

Ho and Galang (2011) cited evidence of a high rate of take-up of contingent or

performance-related pay, regardless of other practices. Gould-Williams and

Mahomed (2010) ‗bundled‘ discretionary pay with selection, training, performance

management, team-working and communication, and compare the relationship of

this bundle to measures of motivation, satisfaction, organisational citizenship

behaviour (OCB) and intention to quit. In their comparative study of UK and

Malaysian local government workers, among their findings were a negative

relationship between appraisal and OCB in both countries and a positive response to

team-working, particularly in Malaysia. Nasurdin, Hemdi and Lye (2008) went so

far as to argue that it was less the specific HR practices than their existence per se

that established the ‗tone‘ and conditions of the employee-employer relationship,

creating a positive perception of organisational support. Thus it is important to

explore the extent to which the approaches embedded in daily HR practice in

Malaysian engineering firms, have a strategic intent, and the mechanism of a link to

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retention. Again, in the sections that follow, interview evidence concerning each

HR function is combined with evidence drawn from other authors.

RECRUITMENT AND SELECTION

In a small-scale survey of 117 manufacturing firms, in which knowledge

management was the focus, Tan and Nasurdin (2011) were surprised to find it

difficult to establish a direct link between three HRM practices – recruitment,

reward systems and career management – and organisational innovation , whether in

products, processes or administration. They suggested that in the case of recruitment

this might be a result of low levels of attention paid to strategic recruitment in

locally-owned firms.

It is possible that a stronger effect might have emerged had the focus been on

retention and perceptions of organisational justice as an intervening variable. Earlier

in this chapter, reference was made to an ethical tradition in Malaysian HRM

practice. In 2003 the Government introduced the ‗back to basics‘ approach of Islam

Hadhari in public sector management, an approach that had antecedents stretching

back to the Penerapan Nilai-nilai Islam (Nurturing of Islamic Values) policy

guidelines of the 1980s. In relation to recruitment and selection, Hashim (2010)

suggested that observance of these principles would require fair process, with just

treatment provided to all applicants. Employers would inform applicants truthfully

about the job on offer – a requirement that suggested practices such as accurate

position descriptions, explicit selection criteria and accurate disclosure of the

compensation to be paid. Realistic job previews would also be consistent with this

principle. The principle of justice in the selection process would prohibit favouritism

and discrimination, including on racial or political grounds, and require the objective

weighing of competence. There was also an obligation of honesty on the part of job

applicants – the principle that ‗no soul shall have a burden laid on it greater than it

can bear‘ (Qur‘an 2:233) had implications both for job design and for careful job-

matching in order to ensure assignment of work within the individual‘s capacity

(Hashim 2010:788).

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Interviews with HR practitioners in engineering firms revealed thorough, standard

HR practices:

Recruitment process is divided by three. First is an evaluation of recruitment

needs. Second is selection, and third is appointment. To select new employees,

R and S (recruitment and selection) section will source for the candidates from

internal or external recruitment. After that, we must short list or screen the

candidates based on the information provided in their application forms. The

candidates will then be interviewed before decisions are made. Lastly the R

and S section will appoint the best candidate. (Mrs Sal, Johore)

However, in another company, the recruitment process was based on the purpose of

recruitment, and involved stronger alignment with planning guidelines:

The recruitment process can be divided into two categories. For replacement

of employees, we will advertise the job vacancy in the JobStreet (online

recruitment) and the newspapers, and then shortlist them [the candidate] and

arrange for interviews. HR will conduct the first round of the interview

sessions. If we found the candidate is suitable, we will arrange a second

interview with HR and also with the head of department, and then finalise the

candidate. For the second category, which is for a new position, normally we

will need to get the approval from the top management or based on the

outcome of the manpower planning conducted early of the year. After getting

the approval, we will then proceed with the steps similar to the first category.

(Mr Soon, Selangor)

Both of these responses indicate that the candidates were selected from the interview

sessions. However, according to several HR interviewees, the selection of new

employees was not only based on interviews but also on tests results and some

background checking:

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To short list the candidate, we normally assess the candidate‟s CV

(curriculum vitae). Once we have interviewed, and if we decided to hire, we

normally will do some reference checking. (Mrs Yong, Kuala Lumpur)

….background checking, interviews and IQ test for certain positions.

(Mr Kash, Johore)

For certain positions, especially engineers and above [level], the personality

test will be conducted. (Mrs Sal, Johore)

…DISC (dominance, inducement, submission, compliance) profiling test for

every job applicant. (Ms Yeoh, Selangor)

The engineers will be tested on their mathematics and technical skills.

(Mrs Shah, Penang)

These processes suggested careful job matching, and seemed to imply a commitment

to retention on the part of management. The use of psychometric testing suggests

the adoption of Western management practices.

The HR participants were asked about the content of the interview session,

specifically whether the candidates are briefed about their job and their career

development opportunity within the company. Whilst a few HR participants said

‗No‘, there were mixed responses from the interviewees:

Yes…roughly. (Mr Soon, Selangor)

Not much. Just information about company‟s history, the sector, and the

[employees‟] uniforms. (Ms Ila, Johore)

Yes. I will explain thoroughly about the job scope, the career prospect, and the

challenge in the job. To me, it is a must to provide realistic job previews in

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order to avoid misconceptions before and after the candidate has joined us.

(Ms Yeoh, Selangor)

Yes. An interviewer will explain or brief candidates their career paths in the

company during the interview session. (Mrs Sal, Johore)

Yes. We will explain to the candidates during the interview….we just show

them the job description and explain to the how the process is. (Mr Kash,

Johore)

Yes. We will explain to the candidates about their positions and the career

ladder for each position. (Mrs Yong, Kuala Lumpur)

The interviews revealed that whilst for some companies, the candidates were

informed about their job and the company during the job interview, for one

company, this information was provided when the employees had already been hired

into the company, specifically during the induction program:

Usually the company will conduct two days of orientation for all new staff

explaining the company, the organisation chart, rewards and benefits, as well

as training activities. (Mrs Shah, Penang)

Induction programs are also conducted to brief about other matters relating to the

company‘s policy, as well as matters concerning the employees:

Induction program is very important because we have to inform the new

candidates about safety, environment, and quality aspect. (Mr Kash, Johore)

The first day of induction usually lasted for half a day, and we normally will

arrange other programs for the one-week induction, such as health and safety

briefing, information system briefing, legal briefing, and lastly we hand them

over to their manager. (Mrs Yong, Kuala Lumpur)

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This section has described a mix of approaches to recruitment and selection of

employees in Malaysian engineering companies. A number of the interview

participants described a reactive rather than a strategic process, beginning when a

need to recruit had arisen, either to replace an employee or for a new position in the

company. This was followed by sourcing of the potential employee through internal

sources such as company‘s database or external source such as advertisement in the

newspaper. Once job applications were received, the applicants would be short listed

for an interview, based on an assessment of information provided in the job

application. The candidates were then interviewed by several people in the

company, for instance by the HR manager or by the head of the department. At

certain levels, candidates might also be required to undertake a test as part of the

selection criteria, and background checking occurred. These are all standard

processes. A routine approach to induction was also described, based on a short

initial orientation. Several interviews suggested that the recent Western turn to

psychometric testing was also occurring in Malaysia – a costly exercise if often

repeated because of high turnover, and one which Brown and Hesketh (2004) have

seen as more likely to be linked to a ‗talent-buying‘ rather than a ‗talent-growing‘

staffing strategy – that is, a reliance on the external rather than the internal labour

market.

The main instances suggesting that the recruitment process might be part of a

concerted strategic retention strategy occurred in the cases where interview

participants described the initial recruitment step as being based on an attempt to fill

the position internally, and where career path opportunities and other aspects of the

job were explained during a job interview. Nevertheless, few of the responses by

the interviewees indicated that attention was paid to providing realistic job previews.

These are important to speed up the socialisation process which is the first step

towards retention and crucial to maintaining cohesiveness among the employees

from the outset. Nor was there much evidence that career development

opportunities in the company were discussed with recruits. This is important and

valuable information for knowledge workers, such as engineers who are likely to

have a strong career orientation.

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TRAINING AND CAREER DEVELOPMENT

Writing in the midst of the third Outline Perspective Plan, Chew (2005: 90-91)

commented that the retention issue meant that ‗Malaysian firms often feel that it is

too costly to train employees beyond the required basic skills‘, and that their training

responsibility should not extend beyond ‗the contractual scope of work‘: indeed

developmental training was seen not only as a threat to staff retention, facilitating

job mobility, but also as a potential threat to the salary bill. A training levy similar

to Singapore‘s, introduced in 1993 did not seem to have changed this attitude, which

was at odds with the knowledge management requirements outlined in Chapters 2

and 3.

A study by Ahmad and Bakar (2003) suggested that indeed, employees‘ continuance

commitment was not strengthened by the availability of training, firm support for

training or their own motivation. On the other hand, a positive training environment

and the perceived benefits of training were significantly correlated with continuance

commitment, suggesting the importance of linking training to internal career

pathing. Moreover all five training variables (availability, firm support, personal

motivation, positive training environment and perceived benefits) were positively

linked to affective, normative and overall commitment. This reinforces the

unfolding argument that it is the bundling of HRM practices as part of a knowledge

management strategy that is likely to be more effective than the more mechanistic

adoption of HR practices, including training, in isolation.

The interviews revealed that training and career development programs were

available in almost all the engineering companies being investigated for this study.

However, it appeared that not all employees had the opportunity to get involved in

the training programs. Their eligibility depended on the type of employment, and the

type of job:

Only employees who are indirect to the production work can attend training.

This is to maintain the production work. (Mrs Shah, Penang)

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Only for permanent staff. For contract staff, they only have the opportunity to

get involved in the safety training. (Mrs Sal, Johore)

90 per cent of them exclude contract workers have the opportunity to involve

in the training. (Mr Kash, Johore)

Training and development programs were normally conducted based on training

needs analysis conducted by the HR department or based on a request from the

employees:

Depends on our yearly training needs analysis. (Mr Kash, Johore)

Normally, we will do some sort of training needs analysis, and then the head

of department will decide what type of training is needed, but this also

depends on the company‟s budget. (Mr Soon, Selangor)

..based on Training Calendar produced by the head of department. This

calendar is prepared by the training unit. Usually we will meet up with the

production manager to identify training needs, and then the production

manager will nominate the employees for the one year training programs.

(Mrs Shah, Penang)

..training needs will be identified through training need analysis and

eventually transformed into training plan. Executives will also propose

training programs on ad hoc basis. If the cost of training is low and there is an

urgent or special request, we will just proceed with the ad hoc request. And if

the training programs are graded satisfactorily [by the trainees] and demand

for it is high, we will conduct the training in several sessions. (Mrs Nor,

Penang)

Depends on the employee‟s initiative to request for any training courses and

also depends on company‟s budget. (Ms Yeoh, Selangor)

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These responses indicated a structured process for training and development

practices in Malaysian engineering firms. In terms of the type of training provided

by Malaysian engineering companies, the interviews revealed that employees had

the opportunity to participate in both technical and non-technical training. Such

training might be conducted internally by the training unit of the HR department or

by external training providers.

While training in both technical and ‗non-technical‘ skills is offered, the latter also

occurs mainly through structured courses:

We have internal development and a learning website which employees can

register and participate. Actually there are too many training programs

available for them and all depends on their specialities. We used to conduct

non-technical training before but with the current economic, we can only

afford to provide job specific skills training. (Mrs Yong, Kuala Lumpur)

The company offers technical, functional, safety and health, and team building

training programs for indirect staff [all employees except the operators]. The

internal training is usually conducted by the company‟s staff, the external

training for example public training are conducted by the training centres,

such as information technology training. (Mrs Shah, Penang)

Soft skills such as management skill, and technical skill training. (Mrs Sal,

Johore)

Safety, quality, productivity, soft skills, technical training programs. If there

are high numbers of participants, we will conduct in house. If only two or

three participants, we will send them to public courses. (Mr Kash, Johore)

Any external training program that suits the employee‟s current responsibility

and to enhance their skill set and knowledge. (Ms Yeoh, Selangor)

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This analysis indicates that Malaysian engineering companies were providing a

variety of training programs for their employees. However it still appeared that cost

was a factor which was considered when making a decision regarding type of

trainings as well as the provider of training. If staff development was seen as an

employee benefit rather than as a key investment in productivity, it was likely to be

an early candidate for budget-cutting in an economic downturn:

The interviews showed that apart from job specific skills training, some engineering

companies offered training for future skills – for employees‘ career development:

When we have identified that certain employees are ready to be upgraded, we

will send them for training for career development. (Mr Kash, Johore)

Trainings for career development is provided based on their [the employees]

performance rating and training needs analysis. (Mrs Sal, Johore)

Yes. Sometimes depends on the requirement, the engineers and the technical

staff are sent to Japan for six months of training to learn about a new product.

(Mrs Shah, Penang)

One of the key findings from this analysis is that training and career development

programs were not readily available for all employees, for instance contract and

production staff did not have the opportunity to participate in training programs.

Although some companies conducted their training programs based on a training

needs analysis, the training schedule was still flexible to cater for ad hoc training

needs such as those requested by employees. These engineering companies also

provided both technical and non-technical training, as well as training for future

skills.

If staff development is seen as benefiting employees rather than the firm, it is a

‗luxury‘ that can be afforded only in boom times and a cost to be minimised. The

government HRD fund to assist companies in conducting training programs for

employees did not overcome this perception. Where companies see training as a

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benefit offered to highly mobile employees, rather than as an investment, they will

be resistant on cost grounds to providing the training that employees have requested.

This may have an implication for employees‘ capacity to perform their job, as well

as possibly affecting their employability, thereafter their commitment to their

employing organisation. For instance, Ng, Lam, Kumar, Ramendran and Kadiresan

(2012) have identified a significant relationship between training and development

programs and retention of Malaysian university lecturers. However, many

organisations in Malaysia do not provide continual training programs for their

employees (Kennedy and Daim, 2009). Moreover, Debrah, McGovern and Budhwar

(2000) have argued that firms might be discouraged from providing training for

employees especially when they were able to ‗poach‘ for skilled labours from the

external labour market and avoid training costs, although this situation was also

influenced by the transferability of employee‘s skills, as well as the high rate of

employee turnover.

In the practices analysed above, the approach to training was a ‗siloed‘, operational

one, designed around employee attendance at pre-determined courses. This was a

very different model from the more strategic and integrated approach based on the

notion of a learning organisation or community of practice (Mabey and Salaman,

1995: 313-363; Nonaka and Takeuchi, 1995, 1998; Pedler, Burgoyne and Boydell,

1991; Wenger, 1998). Advocates of the latter approach have seen employees as

learners moving progressively from the periphery of work processes to greater and

greater participation, based on knowledge-sharing, problem-solving and innovation.

It was the role of the organisation to facilitate this form of learning. This was the

sort of model that, in Chapter 3, was identified as an important means of engaging

engineers in collaborative knowledge work, through a process whereby the firm and

its employees grew together.

A number of recent Malaysian studies have seen one of the main purposes of

training to be the provision of career development opportunities, which in turn have

been seen as a critical factor in the retention of skilled employees. For example Tan

(2008) used a survey of Malaysian academics to model the links between career

development opportunities and employees‘ need to grow by extending their potential

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and capabilities. As will be argued in the next section of this chapter, Tan‘s model

was one of a growing range in which perceived organisational support is the

mediating fact. As Tan explained it, when organisations provide career

development opportunities such as recognition, training and promotion, this is taken

by employees to indicate a concern for employees and recognition of their

contributions. To the extent that such a HR practice is seen as a discretionary

measure, exceeding company policy statutory compliance with labour law, it is seen

as a manifestation of organisational care and support and reciprocated with

increased affective commitment, support for organisational goals and lower

intention to leave. In a very similar study, of 202 Malaysian private university

employees, Lew (2011) found that career development opportunities were an

important HR signal to employees of their individual value to the organisation. Lew

also found that this perception triggered affective commitment in the form of

increased effort, involvement and identification, and that career development

affected retention only if viewed by employees as a sign of organisational

commitment.

APPRAISAL AND REWARD

Performance related pay is reportedly now very widespread in Malaysia. Chew

(2005: 90) cited 2004 survey by the Malaysian Employers‘ Federation in which 90.5

per cent of the 304 responding companies had implemented performance based

reward systems. While the coverage of the survey and self-selection amongst those

responding is hard to estimate, the practice however, seems likely to have been

adopted at an operational level, rather being embedded within a more strategic

approach such as those described in the high performance work systems literature.

Some high performance or high involvement models rely on team-based incentives

linked to participative decision-making (Appelbaum and Berg, 2000; Bryson,

Pendleton and Whitfield, n.d.). Such models appear more likely to evince both

contribution and commitment from engineers seeking new challenges. Butler et al.

(2004) however have stressed that the jury is still out: high involvement without

high control can be a recipe for increased stress.

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Whether or not performance management systems were linked to pay, the interviews

suggested several approaches to performance appraisal practice in Malaysian

engineering companies, with the process varying from firm to firm:

We conduct performance appraisal once a year usually between November to

December. Rewards such as increment are normally given in the following

year. We have an internal system for performance appraisal and involve one

to one session between the staff and the immediate supervisor, such as the

manager. Appraisal forms are submitted online and processed online.

Employees are given ratings of 1 to 5 based on the percentage of their

performance. Normally we access their performance for the current year only

from January to December. (Mrs Yong, Kuala Lumpur)

When appraisal was linked to rewards, these might take the form either of promotion

(possibly incremental progression) or a financial bonus – a form of performance pay

that, unlike merit increments, was not folded into ongoing base salary (Milkovich

and Newman, 2002; Shields, 2007):

Once the appraisal form is submitted, we will have a discussion with the

managing director, the head of department, and the HR. Then we will decide

based on the company‟s overall performance and individual performance. If

everything is OK, we will proceed with job promotion. The decision for a

promotion is normally based on employees‟ past and current year

performance. (Mr Soon, Selangor)

The company usually conducts appraisal twice a year. First is for bonus

decision, and second for promotion consideration. (Mrs Shah, Penang)

Based on key performance indicator system, management team will discuss the

performance of each of the employee and select the top 20 performers.

(Ms Choon, Penang)

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Reward is based on the performance rating. After the appraisal form is

submitted online, HR will update the employees with their rating which then is

submitted to Energy and Utilities division for further action. (Mrs Sal, Johore)

In other cases, the appraisal was not linked to pay, but was used for developmental

purposes:

Once the appraisal form is submitted, HR will review the form and we will

focus on the potential worker. The workers who needed improvement, we will

identify how to improve their performance whether to send them for training

or provide on-the-job training. (Mr Kash, Johore)

It may have been a question of the degree of power distance in Malaysian firms, but

each of these examples suggested a rather impersonal practice of assessing

performance - one that offered limited scope for the input or voice of the individual

engineer.

Rewards not only include monetary but also non-pecuniary and non-monetary

rewards such as recognition rewards:

We offer salary, allowance, and bonus for the employees. There are two types

of bonuses, contractual and performance bonus. We also provide allowances

such as car and relocation allowance. We also offer phantom stock and

service year award for the employees but only for permanent staff and based

on job grade. (Mrs Yong, Kuala Lumpur)

Yearly bonus, salary increment, anniversary gift and annual souvenir. (Mrs

Shah, Penang)

Insurance, site allowance, mileage claim, company telephone line, yearly

increment, bonus, medical treatment, safety uniforms, Family Day, Eid

celebration, Ramadhan dinner, Sports Day, premium saving certificate as

birthday present. (Ms Ila, Johore)

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Salary, bonus, insurance, birthday gift, Hall of Fame Award, Performance

Award. (Ms Choon, Penang)

Salary, bonus, insurance, allowance, birthday gift and card, service award,

performance award, and compassionate leave. (Mrs Sal, Johore)

A common thread running through these responses was that Malaysian engineering

firms referred to employees‘ performance ratings in making decisions about

financial rewards, remediation and development opportunities, although rewards

such as bonus and increment decisions might also depend on the company‘s

financial situation:

Bonus and increment for the employees but depends on company‟s

performance and individual performance. (Mr Soon, Selangor)

The rewards offered were rather different from the collective rewards and employee

share schemes favoured by advocates of ‗team‘ (as opposed to ‗lean‘) high

performance work systems (Appelbaum et al., 2000). The incentives in such

systems have been theorised to be linked to high skills and opportunities to

participate in substantive decisions.

Benefits relating to work/life balance can be conceptualised as time-related non-

monetary rewards. Alternatively they can be seen as part of an employer‘s ethical

obligation not to put unsustainable levels of strain on workers. In a study of the

retention impacts of the ways in which Malaysian organisations accommodated the

care responsibilities of 240 single mothers, Mustapha et al. (2010) drew on an

important concept articulated by Greenhaus and Powell (2006) – that of work/family

enrichment or facilitation. This was a view that the benefits of working in one

sphere could have a positive spill over effect in the other. For example,

interpersonal communication skills learned at work might facilitate constructive

family interactions, resulting in a sense of self-efficacy that enhanced job

satisfaction, effort and confidence in solving problems at work, with beneficial

outcomes for individual productivity and organisational performance. Modelling the

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relationships between work/family facilitation and family satisfaction (as well as

work satisfaction), Mustapha et al. (2010) found that this could be used to promote

longer retention.

Several small-scale Malaysian studies of appraisal systems have indicated that non-

participatory and non-transparent appraisals might undermine trust in organisational

justice, diminishing commitment and attachment. Poon (2004), in a survey of 227

MBA students, found that perceptions of appraisal politics could be very

detrimental. Where appraisers were believed to exhibit personal bias or to be

activated by a punishment motive, there was a measurable impact on turnover. This

was both a direct response to a perceived violation of procedural justice and an

indirect response, mediated by diminished job satisfaction. Poon found that other

political ‗shaping‘ of appraisal outcomes such as efforts to motivate staff through

rewards, or attempts to avert team conflict – were well understood and had no

measurable impact on turnover intention. By contrast, in a small study of 60

construction industry employees in Sarawak, Rusli and Ismail (2010), found that the

motivational use of appraisal did contribute to a reduction in turnover intention

through job satisfaction and employees‘ sense of support from the organisation.

They found however that when appraisal was used punitively, its direct negative

impact on turnover intention was strong. These findings on the importance of not

violating employees‘ sense of organisational justice resonate with the findings of

Hashim (2010) discussed above, extending to the appraisal system the concepts of

objective and unbiased honesty in providing and rewarding work that does not place

an unsustainable on the individual‘s capacity, whether for reasons of skill, work

organisation or work/life balance.

Overall, this section has presented the main findings from the interviews with

Malaysian HR practitioners. Such information proved quite hard to collect: in the

high numbers of firms refusing interviews, the reason given was that such

information was commercial-in-confidence. There was also little to no information

on work/family facilitation in Malaysian engineering firms. This highlights a need to

consider work/life balance as a strategy to promote longer retention. Nevertheless, a

small window has been opened onto the HR approaches that underlie the variables

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used in what has become the near-ubiquitous research approach of the past five

years: the use of small-scale survey data to test a model linking a variable

representing one of more HR practices with psychological processes thought to

influence supply-side retention factors. Malaysian studies modelling the links

between these psychological responses and intention to stay are overviewed in the

next section. At this point, it can be concluded that the use of interview data has

shed some light on the necessarily abstract HR variables used in surveys, and has

highlighted several challenges for Malaysian organisations which may have an

implication for the retention of engineering employees: specifically the use of a

range of HR techniques that are within the scope of practice of HR staff to adopt,

but apparently without the underlying policy approach that is possible only in

organisations that focus centrally on facilitating the strategic contribution of their

knowledge workers.

HRM: ADDRESSING CHALLENGES OF EMPLOYEE RETENTION

It has now been established that knowledge worker retention has become a key

Malaysian policy concern. In Malaysian academic circles over the past five years,

this concern has been addressed primarily through a spate of studies emerging from

social exchange theory. This section provides a meta-analysis of a selection of such

studies, which have applied different models to different parts of the Malaysian

labour market (Table 5.1). The selection is representative rather than complete: its

purpose is to analyse a range of models for their key variables, inter-relationships

and conclusions about retention factors, in order to identify what is already known,

what is still to be learned, and its relevance to engineers.

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Table 5.1: A meta-analysis of Malaysian-context employee retention studies

Author, date and title

Sector Variables Model and findings

Zin (1996)

384 Public Works Department - non-management professional staff

Participation in decision making Organisational commitment to: Effort Process Development Rules Staying

Participation in decision making is essential to commitment to effort, rules, and professional development. But not sufficient for commitment to staying in the organisation – pay comparisons key factor.

Nasurdin, Ramayah, Hemdi and Seow (2003)

Academics Job satisfaction Turnover intention

Extrinsic and intrinsic job satisfaction both important.

Muthuveloo and Che Rose (2005)

381 Engineers

Perceptions - o Job characteristics o Job satisfaction o Organisational

characteristics o Role perception

Organisational commitment

o Affective o Continuance o Effort

Organisational outcomes

o Loyalty o Stress o Intention to leave o Self-performance

Personal organisational commitment and personal characteristics have a significant influence on organisational outcomes via higher loyalty, reduced work stress and a lower intention to leave, but have little influence on self-performance. Engineers‘ personal characteristics and perceptions do not significantly influence continuance commitment, which is based on the costs of leaving.

Islam and Ismail (2008)

505 workers in a wide range of industries

Ten motivating factors linked to intention to stay - comparison with US. Factors are based on the first survey by the Labour Relations Institute of New York (Hersey and Blanchard, 1969)

Malaysian top six (in order): High wages Good working conditions Promotion Job security Interesting work Full appreciation of work

done Lowest: Management help to solve personal problems.

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Table 5.1: A meta-analysis of Malaysian-context employee retention studies

(continued)

Author, date and title

Sector Variables Model and findings

Yusof and Shamsuri (2006)

153 Higher education lecturers and assistant registrars

Organisational justice (distributive justice)

Job satisfaction Commitment

Distributive justice (perception of equity and justice) mediates employee‘ satisfaction and organisational commitment. Demographic factors are moderators.

Samad (2006) 300 government doctors

Job satisfaction Organisational

commitment Turnover intentions

Job satisfaction and commitment negatively affect turnover intention; affective commitment the main mediator.

Coyne and Ong (2007)

162 production workers in a MNC with branches in England, Germany, Malaysia

OCB altruism, courtesy, conscientiousness, sportsmanship and civic virtue Turnover intention

Malaysians rated higher on OCB but not higher on turnover intention Gender a moderator OCB (particularly sportsmanship) predictors of low turnover intention across cultures.

Nasurdin, Hemdi and Lye (2008)

214 Manufactur-ing workers, Penang

Perceived fairness of 3 HR practices (performance appraisal, training, career development)

Organisational support

Affective commitment

Perceived fairness of 2 HR practices (not training) directly enhances organisational commitment; seen as motivation-enhancing inducements, triggering enhanced emotional attachment by employees.

Tan (2008) 357 Knowledge workers in 4 sectors (Finance, IT, engineering, education)

Career development opportunity

Organisational rewards

Supervisory support Internal promotion

POS is the mediator between these four forms of support and turnover intention Calls for further studies of link between organisational actions and turnover intention in Malaysia.

Mustapha, Ahmad, Uli and Idris (2010)

240 single mothers

Job demand Job autonomy Work/family

facilitation Family satisfaction Intention to stay

Work-family facilitation and family satisfaction mediated single mothers‘ sense of job demand and their autonomy in deciding to remain working with organisation, resulting in loyalty and organisational attachment. Job characteristics can be used to increase facilitation and satisfaction between work and family.

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Table 5.1: A meta-analysis of Malaysian-context employee retention studies

(continued)

Author, date and title

Sector Variables Model and findings

Hong and Kaur (2008)

183 ‗working adults‘ (un-specified)

Organisational climate: Structure Responsibility Rewards Support. Personality: Dominance Sociability Intention to leave

Climate (especially structure) inversely related to intention to leave, with personality factors slightly increasing explanatory power of climate from 57 per cent to 60%. Autonomy the most important structural factor.

Lew (2009) 134 academics

POS Felt Obligation Affective Organisational Commitment Turnover intention

a) Direct link from POS to commitment

b) Felt obligation plays mediating role

c) Affective commitment fully mediates turnover intention

Professional commitment positively influences organisational commitment.

Krishnan, Omar, Ismail, Alias, Hamid, Abd Ghani and Kanchymalay (2010)

125 administrative support staff in a public higher learning institution

Direct and indirect relationships between motivational job characteristics and OCB. Mediating variable: job satisfaction

Pilot study found 3 job characteristics (autonomy, variety and significance) positively affected OCB, partly through job satisfaction, and partly directly.

Khalid, Jusoff, Ali, Ismail, Kassim and Abdul Rahman (2009)

557 non-managerial employees

OCB Helping behaviour,

conscientiousness, Sportsmanship and

civic virtue Patience (new) Gender Turnover

OCB dimensions explained 25 per cent of the turnover intention measure. Gender moderated the relationship between helping behaviour and turnover intention and this relationship was stronger for females.

Fatt, Khin and Heng (2010)

300 SME employees, Klang Valley (managerial and non-managerial)

Distributive justice (DJ) and procedural justice (PJ), Job satisfaction. Commitment, turnover intention

DJ and PJ led to increased job satisfaction and commitment, and decreased turnover intention. Importance of training managers to practise organisational justice.

Chan, Yeoh, Lim and Osman (2010)

120 private sector employees in Petaling District, Selangor Darul Ehsan

Organisational commitment

Perceived stress Intrinsic and

extrinsic job satisfaction

Turnover intention

Turnover intent reduces due with age, service length and employment history. Job satisfaction and performance increase with experience and result in higher commitment and lower turnover. Salary the main influence.

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Table 5.1: A meta-analysis of Malaysian-context employee retention studies

(continued)

Author, date and title

Sector Variables Model and findings

Ponnu and Chuah (2010)

172 from organisations across Malaysia (mainly banking, education, construction)

Organisational justice

o Procedural (PJ) o Distributive (DJ) Organisational

commitment Turnover intention

DJ measured in terms of perceived fairness of distribution of rewards, including promotions, performance ratings, and general reward distribution. Significant relationships as expected; DJ having stronger effect on retention than PJ.

Kuean, Kaur and Wong (2010)

189 ‗working adults‘ (unspecified)

Organisational commitment

o Affective o Normative o Continuance Participation in

decision-making Work effort Intention to quit

Participation in decision making and work effort moderate the relationship between commitment and intention to quit, with affective commitment having the strongest retention effect.

The studies summarised in Table 5.1 indicate an escalating interest, particularly

during the past four years, in the use of models designed to explain retention in

terms of constructs drawn from social exchange theory and represented by items

selected from established organisational psychology scales. A wide range of models

of the relationships among these variables has been constructed, often based on the

availability of items from relevant scales. Many of these models have been path-

dependent and have exhibited assumptions about the direction of causation. The

relationships within the preferred model have then been tested for significance

through regression analysis and some form of path analysis such as (in recent years)

structural equation modelling.

The university samples have the benefit, for the present study, of focusing on a type

of knowledge worker, as do the studies of public works department professional

staff and finance and education workers. The only study focusing entirely on

engineers is Muthuveloo and Che Rose (2005), whilst Tan (2008) also managed to

survey some engineers. Thus this thesis, as a further study of engineering retention

factors, is timely.

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From the size of the usable samples and the spread – including the incidence of

convenience samples from universities and the sampling of ‗working adults‘ - it can

be inferred that the researchers encountered similar issues to those experienced in

this study - a lack of participation by firms or their HR departments in really in-

depth, partnered research. It appears that none of the studies was able to be

supplemented by interviews, making the situational application of questionnaire

items and the interpretation of responses somewhat dependent on inference.

Nevertheless, whilst it may be unwise to base too strong a conclusion from any one

study, in aggregate the studies paint an interesting national picture out of which

several themes can be drawn.

The first overall conclusion that can be drawn from these studies is that there is

indeed a retention issue, and that it is an issue for employers of professionals and

knowledge workers, including engineers. The second conclusion is that strong

economic factors have been in play: Zin (1996) and Muthuveloo and Che Rose

(2005) drew attention to the importance of external salary comparisons, whereas

Ponnu and Chuah (2010) emphasised the importance of distributive justice and pay

equity internally. Chan et al. (2010) and Islam and Ismail (2008) found pay to be the

top motivator among Malaysian survey respondents and material working conditions

to rank higher in Malaysia than in the US. Nevertheless, perceptions of procedural

justice and fairness also featured strongly as contributing to commitment and

influencing turnover intentions via affective commitment (Lew, 2008; Nasurdin et

al., 2008; Yusof and Shamsuri, 2006). There was considerable unanimity that

organisational commitment (including continuance commitment) can be enhanced

by job characteristics, particularly autonomy and the opportunity for participation in

decision making (Zin, 1996; Krishnan et al., 2010; Hong and Kaur, 2008; Kuean,

Kaur and Wong, 2010). Perceived organisational support, in the form of

opportunities to grow and develop, was very important (Krishnan et al., 2010;

Kuean, Kaur and Wong, 2009).

In relation to knowledge workers, the key messages in Table 5.1 can be summarised

in the call by Tan (2008) for further studies of the link between organisational

actions and turnover intention in Malaysia. Professional commitment was seen as

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positively influencing organisational commitment, rather than working against it

(Lew, 2009). Tan noted the importance of supervisory support, career development

opportunities and internal promotion structures. The cumulative message of the

studies is that organisational factors did make a difference, and outweighed personal

characteristics. Fatt, Khin and Heng (2010) drew attention to the importance of

ensuring that managers receive training in the principles and practice of

organisational justice.

Overall, this chapter has so far presented and discussed the problem of employee

retention in Malaysia, the HRM and HRD in Malaysia, and lastly the HR

policies/programs/practices in Malaysian engineering firms. The analysis in the first

section highlights various push and pull factors that have contributed to the problem

of employee retention in Malaysia. Whilst the emigration and the cross-border

mobility of Malaysian labour may be largely contributed by financial factors and by

ethnicity-oriented institutional policies in Malaysia, job hopping behaviour, is also

caused by a lack of career development opportunities in Malaysian companies.

Further investigation of HRM and HRD practices in Malaysia, and in Malaysian

engineering firms, have indicated that there are several underlying issues within

individual firm which may have as well contributed to the problem of employee

retention in Malaysia.

Firstly, HR department in Malaysian engineering firms appear to have had minimal

authority over HR policy in the company. The department has to first obtain

approval from the top management of the company to revise any HR policy,

especially policies pertaining to employees‘ salary and benefit. Although many of

the HR interviewees acknowledged their role as the middle agent between the

employees and the employer, their capacity to act in this role was subject to top

management‘s approval. This implied that a lack of top management‘s support could

affect employee well-being, although it was more likely for the employees to view

the HR department negatively than the top management, as the HR department was

regarded as the organisational agent (Eisenberger et al., 1986). The following

response appears to support this suggestion:

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Strong management support towards HR department could create a deeper

impact rather than simply relying on HR policies and programs to cope with

employee turnover…..Top management seldom evaluates HRM policies and

in fact, they prefer to remain status quo rather than making any changes…In

my experience, if none of the top management possess HR knowledge, they

will not make any difference [towards HRM]. (Ms Yeoh, Selangor)

This response indicates a disconnection between organisational strategy and HR

policies/programs/practices in Malaysian engineering firms. According to Othman

and Teh (2003), the HR department needs to be positioned closer to the apex of the

organisation to ensure that it is able to play an effective role in managing and

developing the employees. Although it appears that national HRD policy has had the

impact of increasing investment in HRD, this effort has not been not fully embraced

by Malaysian engineering firms. Othman and Teh (2003) thus argued that this

mismatch may be contributed by the limited professional ability of HR managers.

This finding was a continuation of those in earlier studies: Juhary and Saiyadain

(1996) found that the HR function had a low priority in Malaysian companies, and

Hazman (1998) found that Malaysian HR managers tended to have little influence

on the strategic management process.

The second challenge concerns the practice of recruitment and selection, whereby

my interviews with HR practitioner suggested that potential employees were usually

not briefed about their career path or even given realistic job previews. It may be

possible to suggest that it is unlikely for an organisation to be able to induce the

retention of its employees, especially knowledge workers such as engineers, if they

are not promoting the career advancement opportunities that are available in the

company for the employees, particularly at the recruitment stage. Since knowledge

workers are more likely to pursue continuous advancement in their career, it may be

beneficial for organisations to provide the information regarding their career

opportunities within the company as a way of attracting them to continue working in

the company.

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Thirdly, the cost of training appears to be one of the main considerations in the

conduct of development programs for employees. Although as indicated in the

earlier section, the Malaysian government, in its effort to develop a pool of skilled

employees, has provided several incentives to assist Malaysian companies to fund

training programs, it appeared that the cost of training was still a major challenge for

Malaysian companies. As a result, Malaysian engineering companies have had to

abandon certain training programs, and were unable to fulfil employees‘ requests for

training. This is likely to have had implications for organisational well-being since a

lack of training may affect the employee‘s performance, thereafter company‘s

productivity. This may also affect the employees‘ well-being and may influence

their intention to continue working in a company, especially the engineers, since

engineers are seen to be actively pursuing the gaining and enhancement of

knowledge and skills (Solimano, 2008).

Fourthly, although the HR interviews revealed various types of monetary and non-

monetary rewards and benefits for employees in Malaysian engineering firms, it is

unknown the extent to which these rewards and benefits influenced employees‘

intention to stay working in the company, especially in the case of engineers. It may

be possible to suggest this as one of the challenges for Malaysian firms to address in

order to retain their employees, particularly because of the unique composition of

the Malaysian workforce.

This section has revealed several challenges for employee retention in Malaysia.

Firstly, Malaysian engineering firms, and in particular their HR departments,

appeared to have limited capacity to influence employee retention of, mainly

because of the lack of support from top management, particularly in terms of

financial support. This suggests a mismatch between the rhetoric and the reality of

HRM in Malaysian engineering firms. The lack of focus by companies‘ top

management on aspects of HRM and HRD may have contributed to the poor

delivery of HR programs. A key finding from this analysis is that HR function in

Malaysian engineering firms have generally not take on strategic roles, rather HR

departments are still pursuing administrative roles instead of addressing critical HR

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issues such as attracting and retaining skilled employees (Yeung, Warner and

Rowley, 2008).

THE POSSIBLE ROLE OF INDIVIDUAL AND DEMOGRAPHIC

FACTORS

A lack of understanding of the different needs and expectations of employees from

different ethnicities may hamper Malaysian engineering firms‘ retention of skilled

employees. As Cheng (2011) has argued, Malaysia is a unique multi-cultural and

multi ethnic society with three major ethnic groups – Malay, Chinese and Indian.

Other minority ethnic groups are mostly indigenous populations such as Orang Asli,

Kadazan, Dusun, Iban, and Melanau. The population of Malaysia can be categorised

into two main groups; Bumiputera and non-Bumiputera. In 2007, of a total

employed labour force of 9.4 million, the percentage distribution of employed

person by ethnic group was 51.1 per cent Malay Bumiputera, 12 per cent other

Bumiputera, 27.8 per cent Chinese, 7.9 per cent Indians, and 1.2 per cent others

(DOS, 2007). According to Cheng (2011), all ethnic groups have unique cultures,

religions, beliefs, lifestyles and languages. In general, the ethnically diverse

population in Malaysia is one of the defining features of this country and may have

implications for management responses to problem of employee retention.

In an exploratory study) of the work-related values of Malay and Chinese

Malaysians, Lim (2001) found that Malays and Chinese shared similar work-related

values in terms of Hofstede‘s dimensions – power distance, uncertainty avoidance,

individualism, and masculinity. Lim‘s findings of high power distance and

uncertainty avoidance, and moderate individualism masculinity suggested to him

that Malaysians are advancing towards a more ‗egalitarian, stressful, and

individualistic society‘ (Lim, 2001:222). From this perspective, the shift towards

Western management practices may be seen a direct threat to indigenous Malaysian

practices (Mellahi and Wood, 2004). Lim‘s study however used a small data sample

of 54 responses and relied on a Western-developed instrument on an Eastern sample

which may have failed to uncover some emic value differences such as facets of

religion.

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Nevertheless his characterisation of Malays‘ respect for authority and hierarchy

(Lim, 2001) was consistent with the account by Dahlan (1991) of the budi complex

which is to be aware of one‘s locus within society and to behave according to that

locus and the characterisation by Wolfe and Arnold (1994) of Malays socialised to

be non-assertive and compliant, with strongly held values of humility, courtesy, and

tactfulness. Consequently, Lim (2001) suggested that leadership style and decision

making practices in Malaysian organisations were likely to be autocratic and top

down. Similarly Thong and Jain (1987) noted that consultative decision making was

not widely practiced in Malaysian companies, with decision making remaining a

prerogative of managers (Thong and Jain, 1987).

Lim‘s (2001) finding of high uncertainty avoidance indicated that Malaysian

employees were looking for ways to ensure higher stability in a more structured and

predictable situations. On the surface, job hopping appears inconsistent with a quest

for stability, and this is something to investigate. In regards to individualism, Lim‘s

study found that Malaysians had a moderate level of both individualism and

collectivism, whilst Noordin et al. (2002) have characterised Malaysia as a

collectivist society and Taib and Ismail (1982) have described Malay culture as

essentially a cooperative society with a strong focus on mutual exchange

relationships. Malays, in particular have been described as less likely to prioritise

their obligations to the company over their family or their Islamic religion (Rashid,

Anantharaman and Raveendran, 1997). Lim has thus linked higher levels of

uncertainty avoidance and moderate individualism to a possible change of

organisational practices (Lim, 2001).

Whilst Lim (2001) found almost identical levels of masculinity for Malays and

Chinese, earlier literature tended to characterise Malays as feminine (in terms of

relationship orientation) and the Chinese as masculine (in terms of achievement

orientation). Westwood and Everett (1995) found the Chinese to have higher

achievement motivation than Malays who appeared to be lacking of ambition

(Harris and Moran, 1996). Abdullah (1992), described Malays as prone to be non-

assertive, modest and polite, and Sendut (1991) identified their highest priority as

being to get along with others. Furthermore, Malays have been characterised as not

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pursuing wealth for wealth‘s sake, but rather as being motivated by a sense of

sharing with others, with family and friends taking precedence over self-centred

interest such as wealth accumulation. Similarly, Chinese have been seen as also very

committed to maintaining good social relationships (Sendut, 1991). These values

imply that organisational policies based on concern for all parties on the

maintenance of workplace harmony are appropriate for Malaysia. However Jain

(1990) found that Malaysian employees, irrespective of ethnic groups, expected

extrinsic or monetary rewards for their efforts, rather than just job recognition.

Apart from the culture and ethnicity-bound work values and personal characteristics

of Malaysian workers, the influence of religious teachings and values must be

considered. The main religion in Malaysia is Islam, and similarly to other Muslim

societies, management practices are influenced by key Islamic values and principles

(Mellahi and Wood, 2004). Malaysian management practices should also be

understood in the context of several different religions – Confucian as well as

Islamic (Mansor and Ali, 1998).

Beekun and Badawi (1999) have indicated while Islamic teachings and values put

strong emphasis on obedience to leaders, they do not condone blind obedience. The

authority of the manager or leader is thus regarded as acceptable where subordinates

are expected to show respect and obedience to superiors (Mellahi and Wood, 2004).

Attiyah (1999) has noted that Islamic teachings put heavy emphasis on forgiveness,

kind-heartedness, and compassion. The manager is thus expected to show

responsibility for the employees‘ quality of work life and concern for their families

and surrounding society (Mellahi and Wood, 2004).

These ethnicity embedded cultural issues may explain the attitudes and behaviours

of Malaysian employees, specifically in regards to their intention to continue

working with the employing organisations. This analysis suggests that Malaysian

employees‘ attitudes to their employing organisations may be influenced by their

perceptions of organisational support ,such as training and career development, as

well as organisational responses to specific cultural values and religious teachings.

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In general, the analysis suggests that Malaysian organisations should consider the

different values and accommodate certain cultural and religious needs of their multi

ethnic employees, not only as a symbol of respect and tolerance but also in fostering

a harmonious and conducive working environment amongst employees from diverse

cultural and religious backgrounds. Although Lim‘s (2001) study speculates that HR

practices in Malaysia may be becoming more individualistic in approach, Noordin et

al. (2002) have noted that harmony, social behaviour, relationships, self-sacrifice,

and family integrity still appear to be important in the Malaysian culture.

CONCLUSION

This chapter has presented the findings obtained from interviews with 13 HR

practitioners of Malaysian engineering firms, as well as from document analysis,

which can be summarised as follows:

1) The problem of employee retention in Malaysia – emigration, cross-border

mobility, and job-hopping, is contributed to by various push and pull factors,

such as economic, political, organisational, labour market and individual

factors.

2) HRM in Malaysia is heavily influenced by the Malaysian government which

is the largest employer in Malaysia. Although Malaysian labour is protected

under a range of legislation, the Employment Act does not apply to engineers

and other white-collar workers. The national HRD policy is also not fully

embraced by Malaysian engineering firms, with cost of training still a major

constraint.

3) The role of the HR department in Malaysian engineering firms is less

strategic with HR personnel having little authority in HRM policy making.

4) Malaysian engineering firms do not provide potential employees with career

paths and realistic job previews at the recruitment stage.

5) Not all employees have the opportunities to get involved in training and

development programs within Malaysian engineering firms, and the cost of

training is a major impediment to training programs.

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6) Malaysian engineering firms offer both monetary and non-monetary rewards

and benefits for employees although this was not true for all firms

investigated.

7) Employee retention in Malaysia is a challenge because there is a lack of

strategic support from top management especially in terms of financial

support for training programs and employees‘ remuneration, and also

because of the different needs and expectations among different labour

ethnicities and religions.

In Chapters 6 and 7, the focus shifts to the viewpoint of the Malaysian engineers

surveyed, in order to identify their perceptions of HR practices, their sense of

affective and pragmatic commitment to their employing organisations, and the

impact of these perceptions and attitudes on their intention to stay – a measure of

firms‘ capacity to retain key talent.

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CHAPTER 6

FACTORS AFFECTING ENGINEERS’

INTENTION TO STAY

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INTRODUCTION

This chapter and Chapter 7 turn the focus of attention to the views and experiences

of a sample of Malaysian engineers, using survey and interview results to identify

factors that might significantly influence their intention to stay working with their

current employers. The present chapter outlines the results of the survey of 226

engineers, conducted in 2009.

Through multivariate analysis of the survey responses, the chapter sets out answers

to the following research questions:

RQ7: Can a direct relationship be drawn between the presence or absence of

human resource (HR) programs and practices, and engineers‘ intentions to

stay?

RQ8: Can social exchange theory, particularly theories of the effects of

perceptions of organisational support (POS) and/or of the psychological

contract (PC), provide an insight into the factors that would influence

engineers‘ intentions to stay with an organisation?

As set out in Chapters 1 and 4, the hypothesised relationships are set out in Figure

6.1, reproduced for convenience from Chapter 1.

Figure 6.1: Relationships investigated through survey: Links hypothesised

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The focus in this chapter is on organisation-level and individual-level variables

influencing intention to stay. As explained in Chapters 3 and 4, intention to stay

(ITS) is the most viable and most frequently used indicator of turnover, and is the

point of contact between constructs derived from the disciplines of organisational

psychology and human resource management (HRM), allowing a theorisation of the

relationship between organisational factors and individual behaviour. The

previously-published studies overviewed in Chapter 5 were almost evenly divided

between those that looked in general terms at commitment factors such as job

satisfaction and those that took HR factors into account. Of those that considered

HR factors, some traced a direct, pragmatic link between intention to stay and the

availability of extrinsic rewards, such as pay, conditions and career paths. Although

the terminology of perceived organisational support (POS) was used in only a

minority of cases (for example in the study of academics by Lew, 2009), other

studies saw the existence of favourable HR factors as an indicator of organisational

support, drawing out feelings of reciprocity. Running through the studies there was

also a strong theme of organisational justice, which if violated, would reduce

commitment (a relationship that some studies defined in terms of a psychological

contract (PC).

It is therefore important to draw together these three potential influences on

intention to stay – HR practices, POS, and PC – and identify their relative strengths

and inter-relationships. Of particular interest is the strength of the impact of HR

practices on engineers‘ intention to stay with a firm, and the extent to which it is

mediated by POS or the PC. As indicated in Chapter 4, it was hypothesised (RQ7)

that the very existence of particular HR practices, and the overall configuration of

such practises in firms‘ HR policies and strategies, would have a direct impact on

engineers‘ intention to stay with a firm or leave it. A strong direct link between HR

practices and ITS might be a key factor in job hopping, indicating a tendency

towards the pragmatic pursuit of employment conditions. On the other hand, such a

link might suggest that firms have it within their power to attract and retain staff

through HR strategy. As noted in Chapter 5, some authors use the term

‗continuance‘ commitment to designate the attitudes generated by such extrinsic

factors.

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Alternatively, the sources of intention to stay might be closer to what various of the

authors summarised in Table 5.1 call ‗affective commitment‘, linked either to more

intrinsic sources of satisfaction or to process issues of fairness (e.g. Nasurdin et al.,

2003, 2008). In the knowledge worker study by Tan (2008), for example, the impact

of the existence and quality of key HR approaches (career development opportunity,

organisational rewards and internal promotion, as well as supervisory support), was

mediated almost entirely through POS. Other studies have shown the importance of

factors such as organisational climate (Hong and Kaur, 2008), suggesting a strong

PC component based on intrinsic aspects of the job and working relationship.

In order to test both the extrinsic and intrinsic aspects of HR policies and practices,

the present study explored both quantitative and qualitative HR impacts, using a

range of variables grouped under six headings - recruitment and selection (e.g. non-

discriminatory recruitment practice), training (e.g. job specific skills training), career

planning (e.g. long term career opportunity), performance appraisal (e.g.

performance feedback) , rewards and promotion (e.g. performance based reward),

and fringe benefits (e.g. work/life facilitation approaches such as flexible working

hours, and health insurance). Appendix B contains the full list of 26 items.

The analysis also separated out the unmediated and mediated impacts of HR policies

and practices. It was hypothesised that both perception of organisational support and

the existence of a psychological contract would be factors that developed the basis

of employee commitment, leading to retention. Beyond continuance commitment,

however, they might involve affective and effort commitment. As defined in

Chapter 3, POS relates to the overall climate of the organisation, and emphasises

mutual commitment to a relationship in which employer and employee are

interdependent. Based on the norm of reciprocity, employees feel some obligation

to repay the organisation for its support through a degree of commitment and

through behaviours that support organisational goals. As set out in Appendix B, this

mutual obligation was represented by seven variables, measuring two key factors.

The first was the strength of engineer respondents‘ feeling that their employing

organisation values and takes pride their contribution, appreciating good

performance and extra effort. The second was the degree to which engineers felt

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that the organisation cared about their wellbeing, would take notice of complaints,

and was concerned to ensure their satisfaction in the job. Thus POS was a measure

of perceived recognition and care.

If POS variables measured engineers‘ perceptions of support, the notion of PC

focused on individuals‘ sense of a reciprocal obligation to the organisation. As

argued in Chapter 3, such a sense of implicit contract has its antecedent a pattern of

inducements from the organisation, and a pattern of employee contributions in

response, both of which have been built up over time. The result is a sense of trust.

Hence a perceived breach of organisational justice is likely to disrupt the PC. The

variables measuring the strength of the PC were classed into groups:

Employee obligation: loyalty to the organisation; preparedness to work

beyond contract; positive response to performance challenges; seeking out of

development opportunities of value to the employer;

Perceived employer obligation: employer concern and responsiveness to

personal wellbeing; narrowness or breadth of role and training; performance

support and development opportunities;

Transitional factors tending towards PC breach: lack of trust, for example

lack of information-sharing; uncertainty about future; erosion of prospects

relating to pay and conditions;

Fulfilment of contract: employees‘ sense of having met commitments and of

employing organisation living up to its promises.

Clearly there is some overlap between POS and PC, but whereas POS could involve

an instrumental view of the employment relationship, PC might be expected to

predict both a deeper level of attachment, and a more decisive impact on ITS of a

perceived employer violation of implicit contract – for example through a perception

of procedural injustice.

Individual factors such as an engineer‘s age, gender, ethnicity and marital status, as

well as labour market factors such as an engineer‘s length of employment in the

current company and the proximity of the company‘s location to Singapore were

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also hypothesised as extra-organisational factors contributing to employees‘

intention to stay.

The survey was based on these organisational and individual level variables and

analysis of the responses was designed to establish the strength and pattern of

relationships among them. The dependent variable is ITS (intention to stay) and the

independent variables were:

POS (perceived organisational support)

PC (psychological contract)

HRQuantity (the number of available HR policies/programs)

HRQuality (perceived quality of HR policies/programs)

ETHNICITY (ethnic group participant identifies with)

MARITAL (marital status of participant)

YRSEMPLOY (length of employment with current company in years)

LOCSING (proximity of current company‘s location to Singapore)

AGE (age group of participant in years)

GENDER (gender of participant)

The following sections provide details of the findings, including descriptive

statistics, correlation, multiple regression, multiple mediation and chi-square

analyses.

DESCRIPTIVE STATISTICS AND CORRELATION ANALYSIS

Scatter plots were produced before calculating correlations, an approach suggested

by Pallant (2007) as only linear relationships are suitable for correlation analysis.

Figure 6.2 shows that there are positive linear relationships between ITS and the

other four variables: HRQuantity, HRQuality, POS and PC. This suggests that it

would be appropriate to perform a Pearson product-moment correlation between all

these variables. Table 6.1 shows descriptive statistic and correlations between

variables.

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Figure 6.2: Matrix scatter plot for correlation

Table 6.1: Descriptive statistics and correlations for variables Descriptive Statistics

N SD Mean Min Max

HRQuantity 219 6 20 0 26

HRQuality 217 1 4 1 6

POS 209 8 33 9 56

PC 215 18 103 38 154

ITS 213 6 19 1 35

Correlations

HRQuantity HRQuality POS PC ITS

HRQuantity 1

HRQuality .22** 1

POS .13 .50** 1

PC .12 .42** .69** 1

ITS .20** .36** .41** .35** 1

Note. ** p < 0.01

Table 6.1 shows that the strength of the relationship between all the variables range

from small to large. There is a positive and statistically significant correlation

relationship between each of the independent variables and the dependent variable

ITS. Three of the correlations were moderate in strength: HRQuality (r = .36, n =

211, p < .01), POS (r = .41, n = 207, p < .01) and PC (r = .35, n = 212, p < .01),

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whilst one was weaker: HRQuantity (r = .20, n = 212, p < .01). Note that the

correlation coefficient between POS and PC is quite high (r = .69, n = 209, p < .01),

suggesting a strong relationship between the two social exchange variables.

A coefficient determination analysis indicates that POS helps to explain nearly 48

per cent of the variance in participants‘ PC scores and vice versa. The strong

relationship between POS and PC is expected, as both emphasise similar principles

of reciprocity or mutual exchange of benefits in any relationship. However, a

coefficient of determination analysis shows that POS explains 17 per cent of the

variance in ITS whereas PC explains only 12 per cent of the variance. This finding

suggests that POS, which is based on a belief that the organisation values

employees‘ contribution and care about their well-being, explains a higher

proportion of the variation in ITS compared with PC, which refers to employees‘

beliefs in a reciprocal obligation between them and the organisation. It is consistent

with the picture of the Malaysian labour market presented in this thesis, and with the

speculation above that engineers‘ attachment is therefore more likely to have a

pragmatic and instrumental, than a deeply affective dimension.

HR STRATEGIES THAT INFLUENCE ITS

Whilst HRQuantity and HRQuality were found to be significantly and positively

correlated with employees‘ ITS, it is important to investigate which of the HR

policies/programs were likely to influence employees‘ intention to continue working

in a company. In the survey, participants were asked to indicate the extent to which

each of the listed HR policies/programs were likely to affect their ITS. Table 6.2

provides a summary of the responses to the question: ‗Please indicate the extent to

which the following policies or programs affect your intention to stay working for

your company‘ (full results are in Appendix J).

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Table 6.2: The impact of HR policies/programs on intention to stay (ITS) Human resource policies/programs Not at all Slightly

to

somewhat

Moderately

to a great

extent

per cent per cent per cent

Recruitment

and selection

Recruitment on the basis of merit (n=210) 22 36 42

Non-discriminatory recruitment practice

(n=209)

20 29 51

Recruitment from within the company

(n=209)

20 36 44

Training

Assessment of training needs (n=205) 14 30 56

Job specific skills training (n=209) 11 27 62

Leadership training (n=209) 16 24 60

Career

planning

Long term career opportunity (n=210) 13 26 61

Mentoring for career advancement

(n=209)

14 30 56

Training for career development (n=211) 14 23 63

Training for external marketability

(n=208)

21 25 54

Performance

appraisal

Developmental performance appraisal

(n=210)

16 27 57

Performance feedback (n=209) 15 31 54

Appraisal based on continuous

improvement (n=207)

13 28 59

Rewards

and

promotion

Promotion based on performance (n=209) 12 31 57

Performance based reward (n=208) 15 27 58

Challenging job assignment (n=206) 15 26 59

Professional networking opportunity

(n=209)

12 26 62

Fringe

benefits

Educational leave (n=207) 28 23 49

Flexible working hours (n=204) 21 21 58

Working from home (n=206) 39 20 41

Retirement scheme (n=205) 33 19 48

Health insurance (n=204) 20 20 60

Flexible employment contract (n=204) 26 29 45

Personal loans (n=204) 38 22 40

Overseas holiday trips (n=206) 42 19 39

Childcare provision (n=204) 40 18 42

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Overall, more than one-third of the participants indicated all the HR

policies/programs as ‗moderately to a great extent‘ affecting their ITS. The HR

policies/programs most frequently nominated by survey participants as affecting

their ITS moderately or significantly were career development (63 per cent), job

specific skills training (62 per cent), professional networking opportunity (62 per

cent), and long term career opportunity (61 per cent). Long term career opportunity

and training for career development both belonged in the career planning category.

On the contrary, only 13 per cent and 14 per cent of the participants nominated long

term career opportunity and training for career development as ‗not at all‘ affecting

their ITS. This result suggests the importance of career planning in order to

influence employees‘ intention to continue working in a company.

On the other hand, the HR policies/programs less frequently nominated as having

moderate to a great extent effect on their ITS were educational leave (49 per cent),

retirement scheme (48 per cent), flexible employment contract (45 per cent),

recruitment from within the company (44 per cent), recruitment on the basis of merit

(42 per cent), childcare provision (42 per cent), working from home (41 per cent),

personal loans (40 per cent), and overseas holiday trips (39 per cent). It appears that

many of the HR policies/programs less likely to affect the ITS of the participants

were amongst the fringe benefits category, except for health insurance (60 per cent)

and flexible working hours (58 per cent). Nevertheless flexible working hour and

health insurance policies were nominated by more than half of the survey

participants as affecting their ITS moderately to a great extent. This result is rather

surprising since it implies that intention to continue working in a company could be

influenced by a more lenient and less rigid practice. This may imply that the

participants were in favour of a less stringent policy, allowing them to enter or leave

work at their freedom. It may be possible that an engineer‘s job characteristics have

an implication for the need for flexible working hours – work/family facilitation

issues may also come into play.

However a more revealing finding from this study is the effect of health insurance

on participants‘ intention to continue working in a company. The fact that health

insurance emerged as the most influential fringe benefit factor shaping the

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participants‘ ITS suggests the possibilities that health insurance is not provided by

some companies; and secondly, even when it is provided, the implementation of the

policy may be poor. From the questions about HR policies/programs, it was found

that 77 per cent of 216 participants indicated that health insurance was provided by

their company, however approximately 26 per cent of those who had health

insurance rated the policy as ‗quite poor‘ to ‗extremely poor‘ whilst merely 9 per

cent rated it as ‗excellent‘. Most of the participants (65 per cent) rated the health

insurance policy in their company as ‗fairly good‘ to ‗very good‘. This analysis has

shown that health insurance is not available in more than 20 per cent of the

participants‘ companies, and that at least a quarter of the participants felt that the

policy was implemented rather poorly by their company. This finding may suggest

that the participants expect more from the health insurance policy provided by their

company, possibly because of the risks which may be associated with the job or

because of other factors, such as recent debate in Malaysia over reform to the

national taxation-funded health insurance system (e.g. Yu, Whynes and Sachs,

2011).The absence of such employer commitment to long-term benefits of this

nature may be a further indication that job hopping is in part a response to the

structure of the labour market and its interaction with the welfare system, rather than

an employee characteristic.

These results appear to suggest that firstly, organisational HR policies/programs

have the capacity to influence employees‘ intention to continue working in a

company, and secondly, a career-oriented HR strategy could have the greatest effect

on employees‘ intention to continue to working compared to other HR strategies.

This finding is consistent with the views of Schein (1978) who has argued that

career oriented HR programs have the capacity to influence organisational

commitment whilst responding to individualised career trajectories, mainly because

they focus on the interaction between the individual and the organisation over time

and represents a mutual exchange of benefits between the employer and employees.

Moreover Baruch (2004), Lapalme et al. (2009), Thedossiou and Zangelidis (2009)

have argued that organisations could induce employee retention and commitment by

continuously developing, improving and managing the employees‘ career

throughout their employment within the company. The customary means of doing

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this would involve programs such as training and mentoring for career development.

The benefits of this approach could be further explored by investigating possible

links to and among the participants‘ characteristics, particularly the knowledge

worker or professional worker status of engineers.

CHI-SQUARE ANALYSIS

A chi-square analysis was performed to determine the relationship among several

categorical variables, specifically participants‘ GENDER, AGE, MARITAL,

ETHNICITY, YRSEMPLOY, and LOCSING towards their intention to continue

working in a company. These variables were compared with two levels of ITS (low

ITS = ≤ 17.5 and high ITS = > 17.5) which were identified based on the maximum

score for ITS (35). Table 6.3 presents the chi-square results.

Table 6.3: Relationship between gender, ethnicity, marital status, age, length of

employment, proximity of current company’s location to Singapore, and ITS Sample subgroup N Low ITS High ITS Chi-

square df=1

p-value

n ( per cent)

n ( per cent)

GENDER

Female 53 20 38 33 62 0.20 0.66

Male 160 55 34 105 66

ETHNICITY

Malay 180 69 38 111 62 4.96 0.03

Other 33 6 18 27 82

MARITAL

Married 100 38 38 62 62 0.64 0.42

Single 113 37 33 76 67

AGE

≤ 30 years 176 62 35 114 65 0.00 0.99

> 30 years 37 13 35 24 65

YRSEMPLOY ≥ 3 years 53 19 36 34 64 0.00 0.99

< 3 years 154 55 36 99 64

LOCSING Johore 142 54 38 88 62 1.48 0.22

Others 71 21 30 50 70

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Although there appear to be differences in the observed count within each

combination of the variables, the chi-square analysis revealed that the relationships

among these variables and ITS were not statistically significant, except for ethnicity.

For example, there was very little gender difference in the level of ITS: 62 per cent

of female engineers reported a high ITS score, compared with 66 per cent of male

engineers. In contrast, the table indicates that there was a 97 per cent chance of a

difference in the level of ITS between the Malay, and other ethnic groups, with the

latter significantly more likely to demonstrate higher ITS compared to Malays.

A surprising result from the chi-square analysis was that for the relationship between

age group and ITS level. The result shows that there was no difference in intention

to stay based on age groups. An expected result from this analysis was positive

relationship between participants‘ length of employment with their current employer

and their ITS score level. Although this study hypothesised that Malaysian engineers

who were employed within the state of Johor would be more likely to indicate lower

ITS because of the possible attraction to work in Singapore, the result however

shows that the relationship between a company‘s location and the employee‘s ITS

was not statistically significant, with 62 per cent of those working in Johore and 70

per cent of those working elsewhere both showing high ITS. This suggests that

participants in this study, who worked in Johore, in spite of their proximity to

Singapore, were generally not interested in moving to another job.

MULTIPLE REGRESSION ANALYSIS

To assess the relative contributions of the independent variables to ITS, a multiple

regression analysis was performed, using the independent variables POS, PC,

HRQuality, HRQuantity and six other variables: GENDER, AGE, MARITAL,

ETHNICITY, YRSEMPLOY, and LOCSING, and ITS as the dependent variable.

Preliminary data analysis, specifically multicollinearity16 was checked as it could

pose problem for multiple regression, specifically since correlation analysis has

revealed a moderately high correlation between POS and PC (r = .69). The presence

16Multicollinearity is a statistical phenomenon in which two or more independent variables in a multiple regression model are highly correlated.

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of the multicollinearity problem in the model used in this study was assessed using a

formal detection-tolerance of the variance inflation factor (VIF) (Pallant, 2007). It

was found that the tolerance value for POS and PC was.53, which is more than .10,

and the VIF value was 1.91, which is well below the cut-off of 10, suggesting no

violation of the multicollinearity assumption for regression. Table 6.4 shows that the

model is statistically significant (p < .01) and explains 24 per cent of the variance in

ITS.

Table 6.4: Multiple regression with ITS as dependent variable Predictor Beta t

POS 0.22 2.37*

HRQuality 0.18 2.39*

HRQuantity 0.13 1.97

ETHNICITY -0.11 -1.62

PC 0.10 1.13

MARITAL -0.06 -0.81

YRSEMPLOY -0.06 -0.92

LOCSING 0.06 0.92

AGE -0.02 -0.25

GENDER 0.01 0.18

* p < .05. R2 = 0.24. F = 6.12, p < .01 df 10, 203.

The result also shows that POS and HRQuality both made a statistically significant

unique contribution to explaining ITS. Based on the beta values shown on the table,

POS was more dominant (β = .22, p < .05) than HRQuality (β = .18, p < .05). All the

other variables made no significant contribution to ITS. The dominance of POS over

PC was expected as the bivariate correlation analysis revealed a higher correlation

between ITS and POS than between ITS and PC.

MULTIPLE MEDIATION ANALYSIS

While correlation analysis is important for determining statistical relationships

among the variables under study, it is not sufficient for establishing cause-effect

relations (Preacher and Hayes 2008). In this study, it was established from the

correlation analysis that only one HR variable, specifically HRQuality rather than

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HRQuantity had a positive significant relationship with POS and PC. Thus, the

mediation analysis was aimed at examining the cause-effect relations between

HRQuality, POS, PC, and ITS. This study hypothesised that the quality of HR

policies/programs ‗caused‘ some differences in employees‘ perceptions of

organisational support or a reciprocal employment relationship which, in turn,

‗caused‘ employees to continue working in the company. The proposed mediation

model includes three main variables: HRQuality, social exchange relationship (POS

and PC), and ITS.

Unlike simple mediation analysis (which involves testing the hypothesis that the

effect that some causal variable X has on some proposed outcome Y is mediated by

a single variable M), multiple mediation analysis involves more than one variable M

in a model. There are several advantages of testing a multiple mediation model

rather than testing separate simple mediation models for every mediating variable.

For example, it is possible to determine the extent to which a specific M variable

mediates the predictor-outcome effect, conditional on the presence of other

mediators in the model (Preacher and Hayes, 2008:881). Including several mediators

in one model also reduces the likelihood of parameter bias due to omitted variables

(Judd and Kenny, 1981).

According to Preacher and Hayes (2008:882), multiple mediation analysis should

involve two parts: (1) investigating the total indirect effect, or determining whether

the mediators transmits the effect of X to Y, and (2) testing hypotheses regarding

individual mediators in the context of a multiple mediator model. Amongst the four

approaches for assessing total and specific indirect effects in multiple mediator

models; causal step approach, product-of-coefficients approach, distribution of

product strategy and bootstrapping; Preacher and Hayes (2008) suggest

bootstrapping as the preferred method because it does not requires symmetry of

normality of the sampling distribution of the indirect effect. Although preliminary

analyses on the survey data revealed no violation of the data pattern and of other

statistical assumptions prerequisite for certain analyses, the bootstrapping approach

was used in this study because it provides the most powerful and reasonable method

of obtaining confidence limits for specific indirect effects (see Briggs, 2006) and

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Williams and MacKinnon,2008). The results from the multiple mediation analysis,

using the independent variables POS and PC as mediators between HRQuality and

ITS are summarised in Table 6.5.

Table 6.5: Mediation of the effect of HRQuality on ITS through POS and PC

Point

Estimates

Products of

Coefficients

Bootstrapping

Percentile

95 per cent CI

BC

95 per cent CI

BCa

95 per cent CI

SE Z Lower Upper Lower Upper Lower Upper

POS 0.61* 0.27 2.22 0.07 1.21 0.08 1.24 0.07 1.22

PC 0.51 0.26 1.96 0.01 1.12 0.03 1.14 0.02 1.13

TOTAL 1.12** 0.27 4.17 0.53 1.81 0.53 1.81 0.50 1.78

** p< .01; *p < .05; BC, bias corrected; BCa, bias corrected and accelerated; 5000bootstrap sample.

The results show that the total indirect effect of HRQuality on ITS was 1.12 and was

significant, p < .01. This indicates that as a set, POS and PC did mediate the effect

of HRQuality on ITS. The specific indirect effects of HRQuality on ITS through

POS and PC were 0.61 (p < .05) and 0.51 (p > .05) respectively. This result suggests

that POS was likely to be a more important mediator than PC and in fact was the

only significant mediator between HRQuality and ITS relationship. As can be seen

in Appendix K, the total and indirect effects of HRQuality on ITS were 2.18, p <

.01, and 1.06, p < .05, respectively. The difference between the total and direct

effects is the total indirect effect through the mediators i.e. POS and PC, with a point

estimate of 1.12 and a 95 per cent BCa bootstrap CI of 0.50 to 1.78. It can be

suggested from the output in Appendix K that perceived quality of HR strategies led

to higher POS and PC, which in turn led to higher ITS, although only POS was a

significant mediator.

It is a satisfying result that aspects of HRQuality and POS have been found to be the

key variables influencing ITS. This finding supports the speculation in the

Introduction to this chapter, that the more instrumental aspects of POS, rather than

the deeper, affective aspects of the psychological contract, were driving engineers‘

labour market decisions at the time of the study. The finding that Singapore was not

exerting an irresistible pull on the Johore engineers in the study was also reassuring.

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Altogether, these findings suggest that it is within the power of HR practitioners to

design and advocate for HR policies and practices that will enhance POS and ITS.

The deeper levels of commitment indicated by the PC variables may emerge over

time, if job hopping diminishes, and eventually reinforce an increased ITS.

CONCLUSION

This chapter has presented the statistical analysis of data obtained from a survey of

Malaysian engineers which can be summarised as follows:

1) There was a statistically significant and positive relationship between the quantity

and the quality of HR policies/programs, the social exchange variables (POS and

PC) and ITS.

2) Career-oriented HR policies/programs were found to be more likely to influence

employees‘ ITS than other HR strategies.

3) Employees‘ ITS was only related to their ethnicity and not to their gender, age

group, marital status, length of employment, or the proximity of their company‘s

location to Singapore.

4) Employees‘ ITS was best predicted by POS, and quality of HR policies/programs.

5) Employees‘ perception of the social exchange relationship (via POS) mediated

the relationship between the quality of HR strategies in a company and their

intention to continue working in a company.

The survey data answered the two research questions posed in chapter 1 of this

thesis, specifically in relation to what HR strategies can influence employees‘

intention to continue working in a company, and how these strategies achieve this

effect. Whilst the survey data provided a valuable understanding of the antecedents

of ITS for Malaysian engineers, they do not tell the full story. In the next chapter,

results of the interviews with 18 engineers will complement these quantitative

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findings by describing the complexity of employees‘ decisions to continue working

with or to leave a company when these decisions are considered in the context of

individual employment history and labour market conditions.

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CHAPTER 7

A RE-EXAMINATION OF THE

INTENTION TO STAY FACTORS

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Page | 182

INTRODUCTION

The previous chapter has presented the findings obtained from an analysis of survey

data. Briefly, the survey findings suggest that Malaysian engineers‘ intention to

continue working in a company can be influenced by their perceptions of aspects of

the company‘s approach to its knowledge workers, specifically the perceived degree

of organisational support (POS) and the quality of certain human resource

policies/programs (HRQuality) available within an organisation. In this chapter

these survey results are re-examined in the light of an analysis of interviews

conducted in 2010 with a further 18 engineers who worked in Johore. This analysis

is discussed in the context of the relevant literature.

It is this mixed-method approach that differentiates the thesis from the purely

survey-based retention studies overviewed in Chapter 5. The contribution of the

interviews is three-fold. Firstly, the interviews provide the voice of the employees

and hence a ‗bottom up‘ rather than a ‗top down‘ approach to understanding the

issues of turnover and retention. Secondly, the interviews provide general

corroboration for the survey findings as the factors influencing intention to stay are

similar. Thirdly, by providing real-life examples of the complexity of turnover

intentions/intention to stay decisions from the employees‘ perspectives, the

interviews enhance our understanding of why HR policies/programs may have

limited impact on intention to stay. As explained in Chapter 4, it is not possible to

generalise from this small sample to the intentions and behaviour of Malaysian

engineers in general. But it is possible to generalise to theory (Yin 1994) – to draw

out explanations that would explain patterns and relationships identified in the

survey - and also to identify instances that shed light on the relevance of POS and

PC theories.

The full significance of the survey and interview data is explained with reference to

the literature on the retention of knowledge workers. As discussed in Chapters 2 and

3, engineers can be portrayed as knowledge workers who share certain personal

characteristics, attitudes to work and commitments towards their occupation and

their employers (Drucker, 1969; Alvesson, 2004; Davenport, 2005). Their career

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mobility is within the occupational-external rather than firm-internal labour market

(Meyer and Herscovitch, 2001). Thus if they are to stay with an organisation, they

will need professional challenges and career development opportunities. This

discussion of the retention of engineers is presented along five themes: the career

aspirations of knowledge workers, the notion of a mutual exchange relationship, and

the roles of organisational agents, personal circumstances, and the labour market.

The chapter assembles evidence designed to help answer the four research

questions:

RQ1: Are there particular characteristics of engineers that could be

considered in the Malaysian context, in order to address retention issues?

1a. What knowledge/professional worker attributes apply to Malaysian

engineers?

1b. Can Malaysian engineers‘ turnover behaviour be modified by

management and regulation of the working relationship?

RQ2: How do the characteristics of the labour market(s) for Malaysian

engineers influence their retention patterns and turnover intentions?

2a. What are the key characteristics of the Malaysian engineering labour

market(s)?

2b. How can an understanding of these characteristics contribute to an

understanding and resolution of the ‗job hopping‘ issue?

RQ3: Are the concepts of either the protean or the boundaryless career

helpful in analysing the turnover intentions of Malaysian engineers?

3a. To what extent do Malaysian engineers pursue internally-driven career

trajectories and to what extent are they responding to external contingencies?

3b. To what extent do they value learning opportunities and psychological

mobility, and to what extent are they experiencing a need for learning

opportunities and psychological mobility?

RQ6: For the engineers in the study, how are performance, commitment, and

retention linked?

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This chapter consists of seven sections, designed to draw out the factors that shape

intention to stay or leave, thereafter influencing the retention or turnover of

Malaysian engineers. Following this introductory overview, the second section

presents the evidence from the interviews with the engineers regarding their career

aspirations. It highlights specific knowledge/professional worker attributes that

apply to these Malaysian engineers: the need to upgrade knowledge, skills, and

experience; the need for career development opportunities; and the need to earn a

competitive salary. This provides a line of inquiry for further exploring the extent to

which Malaysian engineers pursue internally-driven career trajectories, and

experience psychological mobility. The third section seeks to determine the extent to

which the employment relationship can influence the engineers‘ retention and

turnover intentions. With reference to the concepts of POS and PC discussed in

Chapter 3 of the thesis, this section uncovers three approaches to the employment

relationships that appear to have the capacity to influence the engineers‘ intention to

stay: fair and equitable rewards, flexible human resource policy, and symbols of

appreciation.

The fourth section extends the findings and discussions of the third section by

analysing the role of various organisational agents in the retention of engineers.

Elements of POS and PC are found to be evident in the analysis, suggesting that

Malaysian engineers‘ retention or turnover behaviour may be modified by the

management and regulation of different levels of the working relationship – with

superiors such as with the manager, with HR officers, and with work colleagues.

The fifth section shifts focus to the barriers to turnover and provides an analysis of

the influence of external contingencies on the engineers‘ intention to leave. As a key

focus of the research is the link between performance, commitment, and retention,

the sixth section provides examples of the work histories of four engineers,

highlighting the complexities of the factors that shaped their intentions to leave or

stay. The final section concludes by summarising the key findings from the

interviews with the engineers.

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THE CAREER ASPIRATIONS OF KNOWLEDGE WORKERS

The survey data suggested that several HR policies/programs, such as training for

career development, and long term career opportunity, are most likely to influence

engineers‘ intention to continue working in a company. These results may be

explained by the underlying career aspirations of knowledge workers. They were

echoed by a common thread running through the interviews – the frequently

expressed need to constantly upgrade knowledge and skills, as well as to gain

diverse working experience. These needs were often mentioned as one of the

primary reasons for deciding to leave a company. Although fulfilling these needs

alone does not guarantee the retention of employees (Mitchell et al., 2001; Steel et

al., 2002), interviewees believed that a lack of up-to-date knowledge and skills could

reduce their employability in the labour market and deter them from searching for

alternative jobs. Thus, continuing to work in a company tended to be seen as a

marker of failure in the external labour market. The opportunity for career

development within the company also emerged as one of the key factors for

interviewees: engineers were more likely to continue working in a company that

could provide job security and career progression. This helps explain the paradox

that high uncertainty avoidance might go hand in hand with job hopping: engineers‘

low ITS might be driven by their quest for a secure job. Thirdly, many interviewees

perceived job hopping as the only way to gain a significant increase in their salary.

These three issues are discussed below.

THE NEED TO UPGRADE KNOWLEDGE, SKILLS AND EXPERIENCE

As knowledge workers, engineers valued new knowledge and were eager to keep

abreast of developments in their field. For engineers, this might refer to new

engineering related technologies. For example, according to one of the interviewees,

the main reason he had stayed working in his first company for more than three

years was because of his interest in the technology used by his company:

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Semi-conductor technology is not available anywhere else (in Malaysia). My

company has the ownership for the techniques and all. I am excited because it

is the second company in the world to use that technology. (Mr Nik)

The interviews identified two ways in which employees gained new knowledge,

skills and experience: by participating in training programs, and by getting involved

in challenging tasks.

As knowledge workers, engineers were also creative workers (Drucker, 1969). The

interviews confirmed that in their work, engineers were required not only to apply

their knowledge but also to create new knowledge through invention, for instance in

model production, solving a defect problem, improving the quality of a product,

increasing the capacity of a machine to boost productivity, or upgrading the

manufacturing process flow. The following response from a senior project engineer

in a manufacturing company described the creative aspects of his job:

...for the company to release a new product, we [his team in the Engineering

Department] will be given a rough design for the product with its

requirements, specifications, information about target customer, and

company‟s expectation, or sometimes the company wants us to upgrade an

existing product which have been released before, in terms of cost, design,

technology. From there we will conduct DFM [Design for Manufacturing]. We

will decide and design the process, improve current process; for instance, if

before one piece was manufactured for one minute, now we try to reduce to

half a minute. In terms of upgrading the technology, we will do R&D (Research

and Development); for example, maybe use robotic arm or ultrasonic or any

new technology. In terms of costing, we have to present our proposal to the

management to convince them to invest, inform them about the ROI [Return on

Investment], how long until the company can collects its profit from the

investment. Each project requires similar procedure, but to decide the process

we have to be creative, use our experience, sometimes by luck. The hardest

part of the job is the designing the process, has to be creative to create the

processes. (Mr Azlan)

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Engineers as knowledge workers enjoyed such creative challenges. As indicated by

Ms Ila, one of the reasons she disliked working in her current company was because

her job lacked ‗adventure‘:

We are going to work on a new project soon for about one year and I like that

because it‟s something new for me. If there are no new things, I will feel

bored. I also dislike my job because it‟s not challenging enough...I want to

learn new things, explore new things. (Ms Ila)

The interviews suggested that employees who felt bored with the job, either due to

the lack of challenge or the lack of opportunity to gain new knowledge and skill,

might be inclined to search for alternative jobs. For instance, Mr Nik already had the

intention to leave his second company despite only having worked there for six

months:

I feel bored with my job because I keep doing the same thing. Previously (in

the first company) I dealt with a lot of tasks, I didn‟t feel bored and it gave me

a lot of opportunity to explore. (Mr Nik)

Although his current job involved a range of different products, the flow of work for

each product was the same, hence he felt he could not apply or enhance his

knowledge and skills in the company.

According to another engineer, although she liked her current job, she wanted to

leave the company to gain more knowledge and other work experiences:

I do project costing and contract services. The first two to three years (in the

job) seems to be challenging but after a while I feel bored from doing the same

job because the work process is similar to all clients. As a result I am only

expert in the work flow. (Ms Ina)

In contrast, a position that provided opportunities for upgrading knowledge and

skills was regarded as important for job satisfaction:

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In my previous company, I was only involved in one aspect of the model

development process, whereas in this company I have to do from A to Z so I

get to know about everything. I think the knowledge is important to me

because it satisfies me. I want to know how (to develop a model), the process

that‟s involved and I have a lot of opportunity to acquire that here. In a way I

get to upgrade my knowledge and be multi-skilled. (Mr Aliff)

Interview participants saw training opportunities as important not only for

progressing in their career but also for enabling them to perform their jobs. In fact,

providing training opportunities for employees was considered an initiative that

could benefit both employees and the employer:

I want my company to provide trainings for new skills. I already know about

electrical engineering but I need trainings such as on „design‟ which I did not

learn before (at university) to help me do my work. At the moment I‟m

learning it by myself. I can get certificate for attending training programs

which is important to get another job, but training is actually also important

for a company because it enhances employees‟ knowledge. (Mr Aliff)

Both technical and non-technical training were regarded as important for engineers:

although technical training was essential for helping engineers work effectively in

their job, non-technical training (e.g. management or leadership training) could

indirectly improve their work performance:

I feel that non-technical training such as leadership training is also important

because it teaches the ways to lead other people in order to get them to do the

work. (Mr Loh)

This is consistent with the survey findings, where 60 per cent of the participants

rated leadership training as ‗moderately‘ or ‗to a great extent‘ affecting their

intention to stay working in a company.

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Paradoxically, engineers who had not received training to update their knowledge or

skills were more likely to stay working in the same company. According to one

interviewee, one of the reasons she was reluctant to search for alternative

employment was because her current job, which mainly involved documentation

work instead of model production, had led to a loss of technical expertise. As a

result, she had decided to continue working in her current company:

As an electrical engineer, [I] must study, but I am not able to. My work now

involves doing documentation. I have no opportunity to study. I can‟t

remember a lot of [technical] things, many have changed. When I think of

leaving this company, what experience can I market to other company? If they

asked me whether I can repair or troubleshoot, I can‟t possibly reply to them

saying that I can do but need to refer to books first. That‟s why I don‟t want to

look for other jobs. (Ms Nor)

Clearly, retention on such a negative basis is not in the interests building a

knowledge economy. Before retention can be seen in a more positive light, a shift to

a new production paradigm seems to be required, in which firm-level innovation is

accompanied by skill and career development.

THE NEED FOR CAREER DEVELOPMENT OPPORTUNITIES

The interviews revealed that engineers were more likely to continue working in a

company that could provide them with a long term career. Conversely, they were

more likely to leave a company that could guarantee their job security or provide a

satisfying career path. One interviewee indicated that the reason he had left two of

his previous companies was because of his feeling of job insecurity. In fact, this was

also the main reason he was considering leaving his current company.

According to Mr Loh, after three years working in his third company, he decided to

look for alternative jobs as he felt the company was progressing badly: ‗….the

company is not so good anymore…very few orders‘. He faced a similar situation

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when working in his fourth company: ‗I felt like something‘s bad was going to

happen, so might as well leave the company‘. When asked about his intention to

continue working in his current company, his sixth, he said he intended to leave in

about six months‘ time for a similar reason:

This company is getting fewer orders…we can predict that it will soon affect

the company and that effect is not good. I fear that one day we may only need

to come to work for four days instead of five because of no work. If that

happens, automatically, the company will cut 20 per cent off employees‟

salary. (Mr Loh)

An interview participant, Mr Zul, indicated that companies in Johore are prone to be

affected by the country‘s economic position, thus he said, ‗It is better to look for

companies that are really strong‘.

Whilst job security was an important inducement for some engineers to stay with a

company, the opportunity to progress their career in a company was often a more

important consideration. According to interview participant, Mr Din, the main reason

he continued working in his company for nine years was because he had the

opportunity to develop his career. He said he first joined the company as an assistant

engineer and then was promoted to Engineer 2 position, followed by Engineer 1 and

currently a senior engineer. Obviously with every job promotion, his salary was

increased as well. Similarly, another interviewee said that the main reason she had

stayed working in the company for eleven years was because of the career

development opportunity available in the company. Ms Ayu first joined the company

as an engineer and was later promoted to senior engineer, then assistant manager and

currently manager. She regarded the promotions as rewards by the company for her

work contribution and this explained her intention to stay with the company:

This company is a stable company and I have a lot of opportunities for career

development. If I didn‟t have the opportunity for promotion, I probably

[would] have looked for other jobs. I feel like the company appreciates me.

(Ms Ayu)

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As knowledge workers, the careers of engineers are more mobile than those of other

workers. The following response from one interview participant suggested a range

of reasons why Malaysian engineers tend to ‗job hop‘:

It is so common to see employees job hop after two to three years of working

in a company. When they have gained some working experience, they will job

hop to another company. It is not always because of the salary but maybe

because there is no opportunity to develop the career within the company, job

pressure or sometimes simply because the engineer felt bored with the job

which becoming routine and they are looking for something else. Job hopping

is one way to develop one‟s career. (Mr Zabid)

THE NEED TO EARN A COMPETITIVE SALARY

A striking finding from the interviews was that many participants indicated

somewhat positive perceptions of job hopping, for example the view that job

hopping is likely to lead to more financial gains in terms of a higher salary. This

perception appeared to shape engineers‘ intentions, whether or not to continue

working in a company:

Even if I continue working in this company, and even with a promotion, I will

never earn five digits salary. I have to job hop to earn that much. (Ms Ina)

I think turnover is very high in my company because I saw that fresh graduate

engineers joined the company mainly to get some working experience and

after that they moved to other companies because with work experience they

could demand higher salary. (Ms Chan)

I have already decided to leave this company after five years because I could

get double salary if I go to other companies. I can never get that much if I stay

in this company…..This is my first job so I decided to stay for five years to

increase my knowledge, get work experience in manufacturing company, and

also to demand better offer [from future employer]. (Mr Jie)

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I think I will stay a maximum of ten years in this company. Actually if you only

work in one company, you will not progress, if you always job hop, you could

demand your salary. (Ms Nani)

Overall, this section has highlighted the specific needs of engineers as knowledge

workers. It appears that the need to upgrade knowledge, skills and experience, the

need for career development opportunities, and the need to earn a higher salary

could all influence engineers‘ intention to stay with or leave a company.

Organisations which fulfil these needs are more likely to retain their employees

whilst the lack of these opportunities may triggers employees to leave a company.

MUTUAL EXCHANGE RELATIONSHIP

The survey data revealed that both social exchange constructs which signify the

requirements for a mutually gratifying relationship – perceived organisational

support (POS) and the psychological contract (PC) can influence engineers‘

intention to continue working in a company. In fact, the quality of HR

policies/programs (HRQuality) also had a positive significant relationship with both

of the constructs. Furthermore, the mediation analysis reported that POS can

influence the relationship between HRQuality and engineers‘ intention to continue

working in a company. These results were explained by the underlying mutual

exchange relationship or social exchange interactions between the engineers and

their employing organisations, and specifically with organisational agents. The

interview results were congruent with, and shed light on, the survey finding that the

practice of certain HR policies and programs can influence engineers‘ perceptions of

organisational support, thereafter influencing their intention to continue working in a

company.

In chapter 3, the concept of organisational agent was introduced within the theory of

social exchange. According to Aselage and Eisenberger (2003), POS and PC are

influenced by the exchange between parties in relationships. In an employment

relationship, this may involve the employees and the employer, although both Guest

(1998) and Eisenberger et al. (1986) have acknowledged that both PC and POS may

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in fact rely on specific ‗agents‘ of the organisation, for instance, the HR department

or the employee‘s supervisor and manager (Rhoades and Eisenberger, 2002;

Eisenberger et al., 2002). The interviews however revealed that engineers‘ POS and

PC were not only influenced by their relationship with their manager or with the HR

department, but also by their interactions with work colleagues. The first part of this

section presents evidence which suggest the role of organisational agent in

connection with the practise of HR policies/programs in organisations, whilst the

following section reports the influence of the personal interactions among engineers

and organisational agents on their intention to continue working in a company.

This section also indicates a need to be rewarded fairly and equitably for the

contribution of knowledge and skills to the company, as well as the need to be

treated as a ‗human‘ rather than a ‗machine‘ (a distinction described in terms of a

human resource management versus personnel management approach). More

specifically, the interviewees highlighted the need for flexible, as opposed to

bureaucratic HR policies/programs, as well as engineers‘ appreciation of the

company‘s show of gratitude towards them. These needs were also mentioned as

deciding factors in considerations of whether to stay or leave a company. These

issues are discussed in turn.

FAIR AND EQUITABLE REWARD

Given the importance of career development for engineers, it is not surprising that

the presence of racial or gender discrimination in a company would result in

dissatisfaction among those affected, being experienced as a breach of psychological

contract and a lack of organisational support towards an employees‘ career

development, and was likely to flow on to an intention to leave if alternative

employment was available. The interview data provide some striking examples of

how unfair treatment could affect turnover intentions.

One interview participant reported that she had experienced both racial and gender

discrimination. Ms Nor said it took seven years for her to be promoted from an E2 to

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an E1 position. She blamed the delay in her promotion on the racist and sexist

practices of her managers:

When the managers are either Chinese or Indian, the chances for Malay

employees to be selected [for promotion] are very low. I was supposed to be

promoted to E1 position in 2004-2005 but instead I got promoted in 2008.

Once, I had an Indian manager. I asked him to justify his reason for not

promoting me and he claimed it was because of the company‟s quota (the

company‟s policy only allows every department to promote 20 per cent of its

employees annually). But what made me angry was when he said that the

second reason was because I fell pregnant every year (in 2002, 2004 and

2005). (Ms Nor)

Another example related to racial discrimination in promotion. According to Mr

Aliff, he left his first company after two years because of ‗extreme‘ racial

discrimination on the part of his manager. The manager seemed to favour employees

from his own ethnic group over others in making decisions about promotion. In this

case, Mr Aliff, who was Malay, claimed he was not promoted because his Indian

manager had chosen an Indian candidate instead of him:

Within two years of working in this company, I managed to develop five

models, whereas the Indian has only developed one model and even that was

not totally his own product, he was only supporting the model development.

Somehow among the three candidates for the promotion my name was

removed. So I confronted my boss and he said the reason was because the

Indian has worked longer than me, but actually only by two months difference.

(Mr Aliff)

Mr Aliff felt that he had been unfairly treated by his company: his opportunity for

career advancement was, he felt, based on racial discrimination expressed through

an unfair appraisal decision and a lack of professionalism on the part of his manager.

It is thus not surprising that Mr Aliff left the company, probably because he no

longer trusted that his work contribution would be fairly assessed by his manager in

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future. Because of the ethnic concentration of interview participants, no evidence is

provided here as to whether similar complaints would arise in managerial-engineer

relationships based on different dimensions of ethnicity. At the very least, these

reports suggest a gap in HR practice and in legislative support for it.

An experience of felt-unfairness mentioned by another interviewee; related to the

‗irrelevant questions‘ that informed the performance indicators used by the HR

department of her company:

Recently, the HR department has started using KPI (Key Performance

Indicator) for appraising the employees. I prefer the past system because I

didn‟t have to fill in many irrelevant forms as I‟m required now. Now everyone

is angry with the HR department because they like to introduce many strange

forms that need to be filled up. We need to answer many irrelevant questions in

order to be promoted and these questions aren‟t technical question instead are

very general and totally unacceptable such as asking us about the company‟s

profit. As a result I feel like our opportunity to be promoted is hindered by this

illogic question. (Ms Nor)

In another instance, an alleged ‗lack of integrity‘ on the part of the HR department in

the performance appraisal process led those affected to start looking for other jobs,

possibly owing to a lack of trust towards the HR department:

Employees‟ performance appraisal is based on the KPI. Employees have to fill

up the appraisal form and then submit the form to the manager. Both parties

have to agree on the information provided on the form before deciding on the

performance rating. The form will then be submitted to the HR department

who will produce a letter indicating the outcome of the process. What

happened was some of the employees did not satisfy for a salary increment,

which we suspected as due to a lack of integrity of the HR department. It

appeared that the rating on the appraisal form was modified. Those affected

immediately updated their resume and started looking for other job… I was

not affected by this but might have left if I was affected. (Ms Ina)

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Engineers who took part in interviews were not only concerned about the fairness of

the performance appraisal process; they were also concerned about felt-unfairness in

rewards. The employee did not have to be directly affected for trust and moral to be

undermined. For example, Ms Hoon expressed her sympathy towards her work

colleagues who she felt were not being fairly rewarded by the company:

Some of my friends had to work overtime until 10.00 p.m. but they received

very little bonus from the company. They feel very sad and I also feel sad for

them. If my boss treats me like that, I‟d straightaway resign. If your staff put a

lot of effort to the company, then the company must appreciate. It is important

for the company to return the favour for my work. It must be balance. (Ms

Hoon)

In one interview, one of the reasons the engineer left the company was because he

felt the HR department had unfairly treated the employees in terms of the

employer‘s contribution to the employees‘ provident fund:

Bonus is given based on the employees‟ KPI. Once the company gave out two

months‟ salary bonus, so rightly the company also has to contribute extra for

the employees‟ provident fund [national retirement policy] but they [HR

department] were smart. They recorded in the pay advice slip as one month

bonus and the remaining as pay allowance, so that they [the company] don‟t

have to contribute extra to our fund. They manipulated us only for their

benefit. (Mr Aliff)

What is of interest here is the strong undercurrent of frustration at managerial

practices perceived as bureaucratic and inflexible. There was an implication that

procedures experienced as meaningless or unfair were being imposed without

consultation, discussion or participation. This made sense of the otherwise

surprising finding that irrelevant questions on an appraisal form could trigger such a

strong and irrevocable response as resignation.

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This section suggests the importance of both procedural and distributive justice: fair

treatment and equitable reward, in employees‘ perceptions of organisational support,

and are preconditions for the development of a psychological contract which might

contribute to engineers‘ intention to continue working in a company. As indicated,

the opportunity to build a career was regarded as important for knowledge workers

and the lack of it was likely to cause employee dissatisfaction and influence their

intention to leave a company. Employers who did not respond to this need were

perceived as not supporting the engineers‘ career growth.

The interviews revealed that engineers who felt they were discriminated against in

their job promotion either because of their ethnicity or gender, or who felt that the

HR performance appraisal process in their company was limiting their opportunity

for promotion, were less inclined to view their company as providing support. They

saw the firm as not caring for employees‘ well-being, and more fundamentally, as

breaching the psychological contract, specifically in regards to trust. The

organisation simply could not be trusted to provide a consistent pattern of rewards or

career inducements, and so it was better to move on.

This of course signals a ‗seller‘s‘ labour market in which engineers could easily gain

alternative employment. It also appears to illustrate the EVLN hypothesis discussed

in Chapter 3, whereby employees lacking any voice in an organisation vote with

their feet by exiting (Hirschman, 1970; Si, Wei and Li, 2008; Si and Li, 2012). For

individuals, this is not constructive behaviour, if repeated too often because firms in

general have poor HR practices. Nor is it conducive to organisational development.

If professionals are taking such steps, it is a sign that ‗push‘ factors, as well as ‗pull

factors‘ are at play in ‗job hopping‘, and that there are serious labour-management

issues to be addressed if firms are to contribute to achieving the innovation and

development goals of Vision2020.

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FLEXIBLE HUMAN RESOURCE POLICY

In chapter 3, human resource management (HRM) was defined, in contrast to

personnel management, as being based on the notion of employees as a valuable

asset in the organisation. One important aspect of a mutually gratifying relationship,

in which employees are something more than cogs in the wheels of a machine, is a

degree of flexibility in relation to working hours. This could have a major impact on

employees‘ views of their company and their intention to stay. The engineers

interviewed wanted to be treated as if the company could trust them, and as if it

cared for their overall well-being, rather than treating them within rigid bureaucratic

HR guidelines. As stated by one engineer,

The company must respect us, we are called „human resources‟ so should

treat us like a „human‟ not like a machine‟ (Mr Azlan).

Since Malaysian labour laws do not require that engineers be paid for working

overtime, several interviewees indicated that they appreciated companies which

showed flexibility in relation to working hours:

There is no punch card policy for the executive level, and so I felt like I have

more freedom and flexibility than a friend of mine working in a different

company. He has to scan out to go to lunch and let‟s say he left for lunch at

12.01 p.m. which means he can actually return at 1.01 p.m. because the lunch

time is for an hour. Instead, he will be considered as late and his pay will be

deducted for the one minute late. What if we came in late because of traffic?

Unlike in my company, the manager could compromise because we don‟t have

overtime payment and sometimes we had to work until 8 p.m. So I felt okay

despite not getting paid for overtime work, at least the manager can give and

take in this matter. (Mr Zul)

By contrast, employers who were not willing to be flexible were likely to be

perceived as actually being unfair to employees:

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One day I was called by the HR department because I came in late. It was

nothing really, we just talked. But maybe because so many [employees] had

complained about it [being called to the HR department], they [the HR

department] had then issued us with a memo reminding that employees will be

called if they turned up late for work for three consecutive days. So I was in

fact clueless of the warning yet was called in. What made me unhappy was

because my manager was notified of the meeting, and so he knew about my

minor misconduct. It‟s not right that the company treats us this way because

as executives we do not receive overtime payment. (Ms Nani)

In interviews engineers indicated that they not only expected their employers to be

flexible about their work hours, they also expected companies to provide other

forms of compensation for overtime work such as allowing employees to take time

off in lieu. Mr Nik, for example, stated:

They should allow us to come in late because we worked late the day before,

instead they still expect us to come in on time. (Mr Nik)

In contrast, Ms Wati was happy with the flexibility offered by her company:

I feel comfortable working here although sometimes I had to work overtime.

It‟s flexible, for example yesterday I came in an hour late so I stayed an hour

more to compensate for the late coming. Besides, as engineers we don‟t receive

overtime payment. But I feel fine because the time is flexible. For example I

had to come to work last Saturday (off day) for three hours, so I get to take

three hours time off in future. (Ms Wati)

Another element of flexibility appreciated by engineers relates to their ability to

fulfil domestic responsibilities during working hours:

I have freedom working here. I can do anything during working hours. For

example, I could go to the bank for two hours or even go to my kids‟ school for

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their school registration, as long as the Managing Director signed my

application. So I feel happy. (Ms Ila)

These statements are in line with the concept introduced in Chapter 5 of work/family

facilitation, which extends beyond work/life ‗juggling‘ or ‗balance‘ to the mutually-

reinforcing spiral of competence and self-efficacy that comes from allowing staff to

manage the demands of work and family. Greenhaus and Powell (2006) have argued

that communication, problem-solving and organisational skills are thereby

developed, and that the resulting satisfaction has effects on effort and productivity.

Mustapha et al. (2010) have provided evidence, in the Malaysian context, of the

links between satisfaction with work/family facilitation and intention to stay.

SYMBOLS OF APPRECIATION

The interviews revealed that simple ‗acts of kindness‘ by a company, such as

rewarding employees with some tokens of appreciation which showed that the

company valued their work contribution, could have a major impact on employees‘

views of their company and their intention to stay. Not only did these actions

motivate employees and influence their commitment by making them feel valued,

but they could also sometimes compensate for minor instances of unfair treatment

by the company.

Several of the interview participants said that they valued small gifts from their

company because the gift, or perhaps the idea of the gift, reflected the company‘s

appreciation towards them. These gifts were given to employees in recognition of

specific work contributions such as achieving the company‘s monthly target and

also for personal reasons such as birthdays. Mr Zairul, for example, said that his

company would provide employees with free lunch or give them souvenirs such as a

company jacket when they met or exceeded the company‘s target; this was enough

to make him happy to continue working in his company. Similarly, other engineers

spoke favourably of receiving small gifts or incentives:

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I will be happy to receive gifts (from the company) on my birthday. We used to

get umbrellas and towels but not anymore. Although these gifts are small gifts,

they are useful to us and made us feel appreciated after our hard labour for

the company. (Ms Nor)

They (the company) could give us an incentive such as a gift if we succeed in a

project. It does not have to be a pay increase; instead the company maybe

could reward us by giving us the product that we‟ve been working on for free

as a gift. (Mr Din)

According to Drucker (1969), knowledge workers are aware of their value, thus

expect their employers to regard their importance towards organisation. This may be

because knowledge workers perceive that they are assets to their organisation and

that the organisation is dependent on them for its performance. Therefore they are

inclined to raise issues relating to fairness in treatment not only because the decision

may affect their career, but also because, as Drucker (1969) suggests, they believe

that this is a recognition of the company‘s reliance on their knowledge and

competencies. The benefit of this reward is mutual. Ms Ina, for example, recognised

that she had an obligation and responsibility to her company:

My job is to make money for this company. (Ms Ina)

Similarly, Mr Jie indicated that he was committed to his job:

It has a cycle and I have to complete the whole work cycle. If the cycle is not

completed, it means I am not doing my job properly. (Mr Jie)

This section has presented evidence from the interviews that a reciprocal

employment relationship had the capacity to influence employees‘ commitment to a

company, reflected in their feelings of POS and PC. Firstly, employees expected

their employer to recognise their work contribution fairly and equitably, such as by

providing them with opportunities to develop their career. Secondly, employees‘

commitment to a company could be enhanced when the employer showed gratitude

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and appreciation for their work contributions by rewards that were either monetary

(e.g. overtime work allowance) or non-monetary (e.g. time off and gifts). The need

for a mutual exchange employment relationship was evident from the interviews,

supporting this study‘s survey findings.

THE ROLE OF ORGANISATIONAL AGENTS

Whilst the previous section has presented the implications of both social exchange

constructs—POS and PC — for employees‘ commitment and their intention to

continue working in a company, this section is primarily focused on the different

types of relationship that exist in an organisation, and that can influence the

retention of employees. Employees‘ feelings of POS and PC were shaped by their

relationship with their manager or with the HR department, and their intention to

continue working in a company could also be influenced by their relationship with

work colleagues. A number of engineers indicated that work pressure was one of the

factors affecting their decision to stay or leave. This pressure could be reduced with

the support of their managers, HR department and work colleagues.

RELATIONSHIP WITH SUPERIOR/MANAGER/HEAD OF DEPARTMENT

The interviews suggested that engineers‘ relationship with their manager was

particularly important in influencing their decision to stay working in a company.

The interviews revealed four types of support from a manager that had an impact on

the level of work pressure experienced by the employee:(1) the manager‘s trust in

his or her employees, (2) work guidance, assistance, or mentoring, (3) knowledge

sharing, and (4) friendship. These types of support reflected variations of

organisational support and evidence of a psychological contract which could

influence employees‘ intention to continue working in a company.

One example of how the manager‘s trust might influence the retention of

employees can be found from the interview with Ms Nor who had been working in

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her current company for almost eleven years. Her first response when asked the

reason for her long employment in the company was,

Because my manager is kind …not fierce…I like that sometimes he asks for

my opinion about work related matters. (Ms Nor)

According to Ms Nor, although her work was challenging, she managed to cope

with the work pressure because she received good support from her manager. This

support was based on her manager‘s trust in her and was related to the timeline for

work completion:

My manager seems to trust me and even treats me like a friend…gives me

freedom, for instance, allowing me to chit chat with other colleagues as long

as my work has completed. So I don‟t feel pressured. (Ms Nor)

This suggests that Ms Nor was aware of her job responsibility and preferred to

work at her own pace rather than being constantly monitored by her manager.

Similarly, Ms Ida mentioned support from her manager as what had influenced her

to continue working in the company for three years:

I am given the opportunity to learn new things and at my own pace. The head

of department don‟t really push me; instead he lets me learn slowly. So I

don‟t feel the pressure as I get to learn how to do my job comfortably. (Ms

Ida)

These results are consistent with the idea that knowledge workers favour work

autonomy (Davenport, 2005). In fact, work autonomy was the main reason given

by Ms Chan for continuing to work in her current company, as it gave her a sense

of satisfaction:

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I am happy with my job. My job is to make new model and I begin with zero.

The whole process from zero to getting a new model and then to mass

production makes me happy. (Ms Chan)

She also indicated that her manager was very supportive towards her:

In order for me to develop a new product model, I need to study a lot, but

normally my boss will support me. He gets everyone [in the department]

together and we brainstorm ideas for developing the model. (Ms Chan)

This example shows how support from the manager could have an impact on

employees‘ feelings towards the job. In contrast, employees who were not getting

any guidance or support from their manager experienced more work pressure which

consequently affected their feelings of organisational support thereafter influencing

their intention to continue working. As Mr Jie said,

I don‟t like my manager because he expects that we know everything.

(Mr Jie)

In another example, Mr Aliff said the main reason he had stayed working in his

first company for two years was because he liked his group leader. Work-related

guidance and mentoring was very important for Mr Aliff because it was his first job

and as a fresh graduate he lacked practical knowledge, skill and experience:

[My group leader] is very knowledgeable, taught me a lot, and if we have any

problems with work, he would help us to solve the problems together. Unlike

certain managers, they expect you to solve the problems by yourself and leave

you alone. I really appreciate him for teaching me a lot. Every time I meet

him, I get to learn something new. He was very helpful and seemed to

concern about me and my work. (Mr Aliff)

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Similarly, Ms Wati said she stayed working in her second company for four years

mainly because of her relationship with the director of the company who was also

her manager:

I stayed because of my boss (the director). Sometimes people quit because of

work pressure when actually all jobs can give you similar pressure. But for

me, I do not job hop because of my boss. He was a former academic from a

university in Melbourne, so he treated us like his students. He guided us just

like a thesis supervisor, so we didn‟t feel the work pressure. He gave work

instructions and also guided me at the same time. (Ms Wati)

A manager‘s support might be in the form of work guidance, trust and knowledge

sharing but it could also be in the form of financial assistance for a particular work

project. In fact it was this lack of support that triggered Mr Azlan to leave his

company:

They [the company‟s managers] expect us to upgrade the product through

research and development but they don‟t support in terms of budget. We were

not able to do our work because there was so many interference from them, we

can‟t do this, can‟t do that, there were so many protocols and constraints. They

disagreed with our proposal and delayed our work but in the end they reverted

to our initial proposal. So we had to do twice the work. (Mr Azlan)

‗Friendship‘ with the manager could also influence employees‘ intention to continue

working in a company. This is evident from the interview with Mr Zairul whose

main reason for staying in a company for eight years was because of his close

relationship with his head of department:

He [the head of department] has two characters. He acts as a manager at

work, but after work he is a friend to me. He is honest with me and will

confront me directly when I‟ve done something wrong in my work. We are

very open to each other, there is nothing to hide. I talk to him like I talk to my

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own friends, not just about work but also about anything else: football, life,

anything, there‟s no gap [between us]. (Mr Zairul)

Thus engineers‘ relationship with their manager contributed to their feelings of a

mutually gratifying relationship which could in turn influence their intention to

continue working in a company. This was related to engineers‘ needs to improve

their knowledge and skills. Not only could a manager‘s guidance and mentoring

assist engineers in their job and reduce their work related pressure, but this

guidance and mentoring could also help engineers gain new knowledge and skills

which fulfil their needs. This relationship implies organisational support in the form

of a manager‘s duty of care towards employees‘ well-being.

Employees‘ intention to continue working in a company was also influenced by the

extent of the employee-manager relationship beyond the workplace. A ‗friend-like‘

relationship between employees and their manager provided a comfortable and

conducive working environment for employees which contributed to their

commitment to the company. This finding is consistent with the survey results:

POS is the best predictor for engineers‘ intention to stay. Nevertheless, it may be

possible to suggest that a consistent pattern of supervisor/manager‘s support could

also develop trust in the quality of future treatment which could lead to feelings of

a psychological contract, thereafter contributing to employees‘ commitment to

continue working in a company.

RELATIONSHIP WITH THE HR DEPARTMENT

The perception of a company‘s HR department might also influence employees‘

perceptions of organisational support and psychological contract which could

consequently influence their intention to stay working in a company. The interviews

revealed that engineers who perceived that the HR department cared for their well-

being were more likely to continue working in a company. For example, Mr Aliff

indicated that he had a good impression of his company‘s HR department as a result

of an incident which occurred on his way to Singapore for work-related purposes:

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I had to go to Singapore one day and I have used the company‟s car for the

trip. I didn‟t know that someone (an employee of the company) had used the

car before but didn‟t pay the road toll so I had problems with the Singapore‟s

custom authority and was not allowed to enter the country. I was lucky I had

asked for an advance allowance for the trip and so I used the money to pay the

fine. I felt like the HR department was very supportive as they assisted me at

the time and even arranged to send somebody to help me deal with the

authority. Even after I returned to the company, they followed up asking for

details about the incident. I think that was good. (Mr Aliff)

In contrast, employees who perceived a lack of support from the HR department

might feel dissatisfied and leave a company. For example, one of the reasons Mr

Aliff left after working in a company for two years was because he felt the HR

department was not protecting the welfare of its employees. He said,

We can only raise and negotiate issues such as about paid leave but never

about money. (Mr Aliff)

This suggests not only a lack of organisational support but also a breach of

psychological contract, whereby the employee no longer believed that his welfare

would be looked after by the HR department in future.

In another example, an engineer said she was reluctant to raise complaints in a

suggestion box or an online survey for fear of being identified. A lack of trust

towards the HR department is apparent in this example:

There is a medium (in the company) to place our complaints or suggestions.

The HR department has informed us about the suggestion box but I don‟t even

know where it is. Although I don‟t have to reveal my name, I feel like they

would still know especially if the suggestion box is placed at an open area. In

fact recently we received a survey to our e-mails from the HR department. It

was difficult for me to be honest in the survey because obviously they could still

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identify me from the e-mail address. I may offer suggestion but definitely dare

not raise any complaints. (Ms Nani)

One engineer saw his HR department as an ineffective mediator between employees

and top management:

I am dissatisfied with the HR department. They are supposed to be the

mediator between employees and the top management but instead they are

scared to give feedback to the top management. They would rather argue with

us than to raise our needs to the company. (Mr Azlan)

These findings suggest that employees expected their welfare to be looked after by

the HR department of their company. Too often, however, they saw the HR

department, not as a mediator between themselves and senior management, but as

simply reflecting the intentions of the organisation. In other words, they expected

the HR department to exercise a duty of care for employees‘ overall well-being and

to consistently demonstrate a treatment of staff that was congruent with this duty,

whether fulfilling explicit needs such as a salary negotiation or meeting implicit

needs such as demonstrating a concern for employees‘ emotional needs. Such

behaviour on the part of HR staff was more likely to motivate employees‘

commitment to continue working in a company.

Engineers‘ expectations of HR were thus in line with the ‗moral agency‘ view of

HR, set out in Chapter 3 (Wilcox, 2012). Engineers appeared to have had an

expectation that HR managers would play an advocacy role for employee welfare

(Galang and Ferris, 1997; Lowry, 2006), and balance the firm‘s needs with workers‘

interests and aspirations, and standards of social justice (Kochan, 2004). These

expectations were in line with the Islamic values outlined in Chapter 5. If obedience

is not blind (Beekun and Badawi 1999) then HR should resist implementing unfair

requirements. Kindness and compassion (Attiyah, 1999) might be expected in

performance management systems and, job security, and HR might be expected to

accept responsibility for employees‘ quality of work life and family wellbeing

(Mellahi and Wood, 2004). These were, however, strong expectations to place on

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HR practitioners, who, as argued in Chapter 5, tend to have limited power in

Malaysian organisations. Nevertheless, inability to deliver on such expectations

seems to have been a factor in low trust and limited continuance commitment.

RELATIONSHIP WITH WORK COLLEAGUES

The interviews showed that support from work colleagues also had the capacity to

influence employees‘ intention to continue working in a company. This support

could be related to work or personal needs.

An example of a work-related relationship is apparent from the response of Mr Din,

who had been working in the company for nine years. He said amongst the reasons

he continued working in the company was because he received good support from

his work colleagues:

My friends are all friendly. I don‟t feel pressure [at work]. We normally work

together to solve any work problem. It‟s not like “I do my work, you do

yours”. When I ask for help, they‟d always help and it‟s like we are working

as a team, motivating each other. (Mr Din)

In another example, the warm support from colleagues made Mr Aliff feel happy

working in his current company. He felt that everyone in the company cared for him

when he had an accident on his way to work:

I had an accident two months ago and I really felt like the whole company took

care of me although I was only in the company for one month. Many of my

work colleagues from my department came to help (picked up the bike, took

him to the hospital for treatment); even the factory guard has helped in finding

a mechanic to repair my bike. Everyone was supportive; they came to ask

about my condition. I felt grateful, like I was appreciated by everyone. (Mr

Aliff)

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‗Friendship‘ has also emerged from the interviews as an important factor which can

contribute to employees‘ perceptions of organisational support. For example,

according to Mr Azlan, many of his work colleagues continued to work in the

company despite low salary because of their relationship with each other:

Based on the feedback I received from my colleagues, they feel comfortable

working in this company because they can work well with other employees,

make friends with others, so they stay even the pay is low. Some of my

colleagues said that although the pay is low, they don‟t feel like quitting from

the company because they have never been in this kind of working

environment, making friends and all. (Mr Azlan)

Similarly, Mr Jie said he ‗made many friends‘ from working in his company and

this friendship had made his working environment enjoyable to him:

I am not alone in this company so I feel happy. I have my friends with me when

I have to work overtime, we work together and we also get together after

working hours. (Mr Jie)

Ms Hoon also said she continued working in her current company mainly because of

her relationship with other work colleagues:

This company is okay because other people (work colleagues) are okay with

me. Sometimes they help me, teach me; even if they are from different

departments. Friends are important to me, I‟m happy and I stay because of my

friends. (Ms Hoon)

In sum, this section has presented evidence from the interviews which highlights

that employees‘ relationships with the manager, the HR department, and work

colleagues all contributed to their sense of organisational support and to the PC, both

of which could influence their intention to continue working in a company.

Nevertheless, it appears that all these relationships seemed to have more influence

on the engineers‘ feelings of organisational support rather than their perceptions of

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PC, which is in line with the survey findings. POS relates to employees‘ generalised

belief that the organisation cares for their well-being, whilst PC ensues from

fulfilment of reciprocal obligations. The responses from the engineers tended to

suggest that, for instance, the engineers‘ ‗friend-like‘ relationship either with their

managers or with work colleagues was not a ‗contractual‘ obligation that either party

had to fulfil; rather it was an informal friendly gesture.

The analysis so far suggests that engineers are likely to stay working in a company

when any or a combination of the following conditions is satisfied:

1) When a company provides means for the engineers to upgrade their

knowledge, skills and working experience such as through training

programs, or by assigning challenging tasks;

2) When the company provides opportunities for engineers to develop their

career internally such as through job promotion, increasing their salary, and

by maintaining a sense of job security;

3) When the company recognises engineers‘ work contribution fairly and

equitably such as through fair rewards and performance appraisal;

4) When the company goes beyond its mandatory obligation and satisfies the

implicit contract of an employment relationship through non-monetary

rewards such as flexible work hours and other tokens of appreciation;

5) When the company provides a conducive working environment whereby

employees receive work and social support from manager, work colleagues

and the HR department.

BARRIERS TO LEAVING

Earlier sections have provided evidence of the factors that may influence engineers‘

intention to continue working in a company. The findings presented appear to

suggest that providing for engineers‘ needs and fulfilling their expectations may

influence their commitment, thus motivating their intention to stay. However the

interviews also showed that the engineers may have had the intention to continue

working in a company not because their needs and expectations were satisfied,

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rather because they had limited capacity to leave the company, owing either to

personal circumstances or to labour market factors.

PERSONAL CIRCUMSTANCES

The interviews showed that although several of the engineers were feeling

dissatisfied with certain aspects of their organisation and had the intention to leave

their company, they had limited capacity to job hop because of personal factors such

as family circumstances, or other factors surrounding a person‘s life.

According to Ms Ina, it was very typical for engineers in her company to leave after

two to three years of employment:

In 2004, there was around 30-40 management trainees [in engineering]. Most

of them left the company because they got married and had to follow their

partners. (Ms Ina)

Marital constraints could work in one of two ways: either one of the couple had to

put off his/her intention to move to another company or he/she had to leave a

company because of the partner. However it appears that female engineers were less

likely to job hop than male engineers, especially when they had children. According

to Ms Nor amongst the main reasons she continued to work in her current company

was because of her family responsibility:

I stay in this company (for eleven years) because I am already married, have

kids, and I guess it is normal for women when you became a mother [to

prioritise family over personal career goals]. Besides, I have purchased a

house in this area, my husband is also working in this company, and

furthermore my hometown is also close by. So I already feel comfortable.

(Ms Nor)

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Another female engineer also gave a similar response:

To move to another company means that I need to start again, find a new

place to live in, and will I like the new environment? I am already feeling

comfortable working here as I get to go home early. Somehow at this age I

feel that that is important for me, probably because I have kids and my

priority is my family. (Ms Ila)

Convenience was one of the factors that could influence an engineer to stay working

in a company. It was also possible that engineers were reluctant to move because

they were not motivated:

I don‟t feel like job hopping. Lazy to attend job interviews...(Ms Nor)

I guess I am not the type of person who likes to job hop. I feel lazy to attend

job interviews‟ (Ms Ayu).

Although the Malaysian state of Johore is located close to Singapore and there is

evidence of cross-border mobility of labour between the two locations primarily

based on financial motivation, most female interviewees were however not

interested in working in Singapore because of personal constraints:

I have children now. I used to apply for jobs in Singapore before I got married

but not anymore. (Ms Ina)

I don‟t want to work in Singapore because the companies don‟t allocate time

and place for prayer. (Ms Nor)

I don‟t think I want to work in Singapore because I will be tired from the

travelling. I never look for job in Singapore but I have many friends who are

working in Singapore. (Ms Chan)

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I don‟t want to work in Singapore although the salary is much more [than in

Malaysia]. Need to find a balance between a high salary and a comfortable

life, high cost of living [if living in Singapore], have to commute daily and

leave early in the morning [if living in Johore]. (Ms Ayu)

I used to want to work in Singapore but I am not really interested anymore

because I am already married, have to leave for work early in the morning

and reach home late in the evening, with traffic jam, have to cook when I get

home, so feels like not suitable for me. (Ms Ida)

LABOUR MARKET CONSTRAINTS

The interviews suggested that engineers‘ intention to change jobs varied with the

tightness of the labour market. This intention may be explained in terms of

psychological and physical mobility. The first is concerned with employees‘

leveraging their contract of employment by comparing benefits between firm

internal and external labour market. The second refers to the observable outcome of

the intention. It may be possible to suggest that physical mobility i.e. turnover could

ensue as a result of receiving better opportunity from the external labour market.

Nevertheless, as indicated in chapter 2, engineers especially are more likely to be

employed within an occupational labour market, although they also have the

capacity to mobilise their career in the external and global labour market. The

interviews confirmed that employees are less likely to job hop when there is a lack

of alternative employment in the labour market and vice versa.

The condition of the labour market in Malaysia which has high vacancies for

professional related occupations permits Malaysian engineers to ‗test‘ their

employability and ‗market value‘ in the labour market. As one of the engineers

pointed out:

I want to test the market, find out how much other companies are willing to

pay me. I will probably leave this company if I received a good offer that is a

minimum double salary than my current salary. (Ms Ina)

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This response, if generalisable, suggests that engineers would probably continue

working in their current company until they received a better offer such as a

considerably higher salary.

An important finding from the interviews was that engineers were not likely to leave

a company before securing a new job. Engineers may have been ‗forced‘ to continue

working in a company because there were no job offers.

I intent to continue working in this company for the time being, I am loyal to

this company only because the economy is still not good so I don‟t want to

take risk. (Mr Zul)

Another engineer indicated that he had been working in his current company for

almost nine years:

I had the intention to find a new job after three years working in this company.

But there was no opportunity for me to job hop. I applied so many jobs but I

was not even called for any job interviews. (Mr Din)

Further probing, however, suggested that he had limited job opportunities because

he only applied for jobs within close proximity to his residence, implying that he

had no intention of moving inter-state or even moving further away from his usual

residence. Location also appeared to be an important mobility factor for another

interviewee;

I am intensively looking for a new job, as long as within Johore, I will leave

this company anytime. (Ms Ina)

Employees appeared less likely to move residence when considering job hopping;

instead they were likely to seek job close by to their residence or one which did not

requires them to move to another location. This reluctance to relocate their

accommodation also appears to be a factor which has contributed to the high number

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of daily commuters between the Malaysian state of Johore and Singapore, even

though, for some, as we have seen, the travel time may make for a long day:

The attractions to work in Singapore are money and also for experience. I

have many friends who are working in Singapore. In fact some of them have

been job hopping between Malaysian and Singaporean companies. Salary is

the attraction, especially is you commute daily from Johore to Singapore.

(Ms Ina)

I want to work in Singapore because of salary. Better to stay in Johore [than

in Singapore if working in Singapore]. (Mr Jie)

I used to apply for jobs in Singapore mainly because of salary. If you commute

daily then of course the salary seems a lot (due to a lower cost of living in

Johore than Singapore), if I work there I will live in Johore. (Ms Nani)

This response suggests that Malaysians who commute daily enjoy a high differential

between their income from working in Singapore and the low cost of living in

Johore. This may have exacerbated the loss of Malaysian labour to Singapore.

Chapter 2 highlighted that knowledge workers such as engineers are more likely to

be employed within an occupational labour market. This suggests that engineers are

less likely to change their professions and this may be a factor to continue working

in a company since their alternative job opportunities were constrained by a specific

occupation and also possibly by a specific industry:

I think if I want to find other jobs, I will look for jobs in the manufacturing line

and still be working as an engineer. (Ms Chan)

I worked as an assistant engineer in my first company – a mechanical and

electrical engineering consultancy firm. But I resigned after one year because

I didn‟t like the routine job. My second company is a manufacturing company

and I held the project engineer position. (Mr Azlan)

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However the interviews also reported that engineers could change profession as well

as sector, specifically from the private sector to the government, primarily because

in Malaysia, the government sector is seen as more stable in terms of employment

security and long-term employment:

Some of the engineers in this company have resigned because they got a job in

the government [sector]. Not as engineer but as diplomatic administrative

officer. They change job maybe because they feel that government job is more

secure than working in a factory. (Mr Aliff)

Other engineers in this company have resigned because they received

government jobs, not necessarily as engineer. One engineer became a

lecturer; another mechanical engineer got a job in the Public Works

Department. (Mr Din)

I don‟t want to find job in semi-conductor firm anymore because this type of

company is very unstable and is highly affected during global economic

downturn. I am getting older so I want to find maybe government jobs or

education jobs, maybe to further my study and become a lecturer. I hope I

could still be working in the engineering field within the government sector. I

see that in Malaysia, government sector is more secure [than private sector].

(Mr Zul)

Actually I want to work in the government sector but despite applying since

last year, I haven‟t got any job offers. I have applied for information

technology job, and also custom jobs. My first choice is information

technology engineering job but if not available I am willing to accept any

government jobs because I feel more secured working in the government

sector [than in a factory]. (Ms Ila)

I will leave [this company] if I get a government job. I don‟t mind doing any

job as long as it is a government job, even if I have to change my current field.

Actually I really wanted a government job because of its benefit such as

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unpaid leave (she said private sector is unlikely to allow employees taking

long unpaid leave), government loans (lower interest rates for government

loans), and pension (only government sector offers monthly pension payment

for government retirees). (Ms Ida)

These responses suggest that engineers were less likely to change jobs within the

private sector – they would probably only apply for engineering jobs and within a

specific industry when considering whether to job hop, and this reduced their

capacity to mobilise. However, it appears that many of the interviewees were willing

to change professions in order to secure a job within the government sector,

primarily because government jobs are perceived as less likely to be affected by

economics outcomes.

In sum, this section has presented evidence which suggests that although employees

may have been dissatisfied with certain aspects of their organisations, whether

because their organisations failed to satisfy their career aspirations or because of the

lack of mutual exchange relationships, they might still continue to work in a

company simply because they had limited capacity to move to other jobs. This was

in some cases because of personal circumstances, such as family commitments,

especially for female employees, and in other cases because of labour market

conditions. In ‗loose‘ labour market conditions jobs were limited, while in ‗tight‘

labour market conditions employees might be reluctant to relocate for reasons of

convenience. An important highlight from the labour market findings is that

employees may be more active in looking for other jobs in a tight labour market, not

necessarily to leave the company (physical mobility), rather to test their

marketability and ‗value‘, and using this information to leverage their employment

benefits within the company (psychological mobility). Ultimately the actual reason

to leave or to stay working in a company may derive from any of the factors

reported so far. The following section presents several case examples to highlight

the complexities of engineers‘ decision to stay or leave their company.

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CAREER HISTORIES

Earlier sections have sought to explain intention to stay factors from different

perspectives: the influence of engineers‘ career aspirations, the mutual exchange

relationship between engineers and their organisations, the personal and labour

market barriers to leave the company. These findings were however presented

separately, and thus it was difficult to distinguish the main factor in engineers‘

intention to stay working in a company. This section presents four work history

examples with distinct profiles, in order to highlight the interactions between all the

intention to stay and leave factors leading to the factor which ultimately triggered

staying or leaving behaviour. These longitudinal work histories shed a new and

different light on retention and mobility as factors in career development. They

show how the pursuit of a career cannot be understood in isolation from other push

and pull factors, related not only to work but also to labour market conditions and

family circumstances.

The first case example, Mr Yeoh was the oldest interview participant. Secondly, Ms

Nor was a female interview participant with the longest employment in a company.

Thirdly, Mr Din was a male interview participant with the longest employment and

had only worked in one company since graduation. Lastly Ms Ila was the oldest,

female and married participant. These examples were chosen over others, not only to

highlight gender differences, but also to compare the factors underlying long and

short employment, as well as to understand the link between employees‘

performance, commitment, and retention behaviours.

EXAMPLE 1: MR YEOH

Mr Yeoh was a senior quality assurance engineer working in a manufacturing

company. He was the oldest interviewees amongst other – 48 years old, married

with children and held a degree in computer science engineering. Overall, since

graduation, he had worked in six companies including the current one. Table 7.1

shows a summary of his work employment and his turnover reasons for the previous

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five companies. At the time of the interview, he had been working in the current

company, his sixth, for approximately two years.

Table 7.1: Summary of Mr Yeoh’s career movements

Company Years of employment

Job Title Main Turnover Factors

1 5 Quality control engineer

Want to earn more salary

2 1 Quality assurance manager

Health hazard

3 3 Production manager

Job insecurity

4 2 Assistant quality assurance manager

Job insecurity

5 1 Assistant quality assurance manager

New company is closer to home

6 Currently 2 years

Senior quality assurance manager

- Not applicable -

Mr Yeoh‘s career had been moving upward, starting as an engineer and currently at

his sixth company as a senior manager. It also appears that his average year of

employment for the five companies was 2.4 years. He had the longest employment

in the first company and said the main reason he stayed in the company was because

there was so much he could learn and he felt like he needed the working experience

considering it was his first company upon graduating. But after five years working

in the state of Penang, he got married and thereafter began searching for alternative

jobs in Johore following his wife‘s request. Although he sought work in Johore

initially at his wife‘s request, he said that he might not have left the first company if

he had not been offered a much higher salary from the second company.

..huge difference of salary when I moved from Penang to Johor, that‟s why I

decided to move...an increase of more or less 50 per cent more than my last

salary...salary is important for the decision (to leave previous company)

However despite the high salary, Mr Yeoh only worked in the company for one

year. He left only because he disliked the strong smell of the melted plastic

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manufactured within the company. It was obvious that he was extremely concerned

about his health as he left the company and accepted a job from the third company

without any pay increase. Nevertheless after three years working there, Mr Yeoh

started looking for alternative jobs as he predicted that the company was progressing

badly. He faced a similar situation when working in the fourth company, thus moved

to another company, his fifth. But apart from his concern for his job security, he

further added the following reason for leaving:

I felt ashamed because there was no work to be done. Every day I went to

work, I had nothing to do. I felt unhappy too. The company has sent back many

immigrants and there were fewer employees left in the company. But I was still

getting my salary as usual, only that there was no work at all, so no point of

going to work.

He then left to work with the fifth company but left the company shortly after one

year of employment. He did not apply for the job: rather he received an offer from

his friend who was the manager in his current company. In fact the main reason he

accepted the job offer was because the current company is located much closer to his

home and thus it saved his travelling time.

Overall, Mr Yeoh indicated that the reason he had stayed working in all the previous

companies was because of employee benefits such as annual salary increment,

bonus, training opportunity, weekend work allowance and medical benefit. The

main turnover factor for every engagement presented in the table not only suggests

that employees might leave in pursuit of a higher salary but also that they actually

had to leave because of health and safety risks, or because of job insecurity. These

factors were intertwined with professional and career development factors, and

could over-ride the latter.

When asked about his intention to leave or stay with the current employer, Mr Yeoh

said that although he was not looking for other jobs, he had the intention to leave the

company in the New Year (this interview was conducted in July 2010). It appears

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that his reason for the intention was similar to previous turnover factors - due to

reduced job security.

Mr Yeoh felt that a company should brief its employees at least once a month about

the state of the company, about the number of orders the company was receiving,

whether orders were reducing or increasing. He said that employees were often left

in the dark, uncertain about the future of the company which led to feeling anxious

about their job security, whereas these feelings were merely based on employees‘

observation thus might be unrealistic:

I feel like I need to know, I need some hints from the company, about whether I

should look for other jobs, or I should continue working. I think it‟s better to

know about the falling of a company than not to know. If the company seems to

be falling, we must try to help, but if we could not, we may need to find other

employments.

When asked about his priority between a company‘s situation and own job security,

Mr Yeoh said:

Must think of the company first. It would be good if we could continue working

in the company as it means that we don‟t have to start afresh elsewhere. But if

we do not know about the problems the company is facing, we would

straightaway find another job. But maybe had we known we would stay and

help the company first.

This statement provides interesting light on the concept of commitment. Mr Yeoh

would have been more, not less, inclined to stay with the company, had he known of

the difficulties it was in: feelings of obligation and commitment would have over-

ridden his own feelings of insecurity. This indicates the importance of employee

participation and involvement (Appelbaum and Batt, 1994; Kochan, Katz and

McKersie, 1986; Kuean, Kaur and Wong, 2010; Todd, Lansbury and Davis, 2004a;

Leggett, 2007; Whitfield and Poole, 1997; Zin, 1996). Any form of employee

involvement is something that appears to be missing in accounts of management

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practice in many of the organisations described in the interviews reported in this

chapter.

When asked about his future career plans, Mr Yeoh indicated his intention to retire

from the labour market and to be self-employed, possibly having own business, in

two to three years time, approximately when he reached 50 years old. Speculating

based on this response, it seems like Mr Yeoh may only be working in his next

company, the seventh and also the last for merely two to three years, which means

that since graduation Mr Yeoh would have worked in seven companies with an

average years of employment of 2.3 years.

Comparing all six engagements, Mr Yeoh indicated that he liked his current

company the best mainly because his job was easy, with less work pressure. It was

result oriented, he had no interference in his autonomy to work, and he did not need

to work overtime to complete his job. An interesting finding from the interview was

that Mr Yeoh defined his loyalty to his company not based on his years of

employment: instead he referred to his care and concern towards the company‘s

well-being:

I feel that I am a loyal employee, although I may have short employment. I feel

like we have to be nice to the company if we like the company, we have to look

after the company. For instance we take care of the equipment in the company,

don‟t damage them, make sure the company is clean, recycle the papers, use

both sides of the papers, all to reduce the cost of the company.

It can be suggested based on the above response that Mr Yeoh particularly felt

obligated to reciprocate his company‘s employing him and giving him wages and

other financial benefits not only by ‗settling company‘s problems‘ from doing his

job, but also by helping the company to reduce its operational cost.

His felt that his work contribution and his care towards the company must also be

renumerated accordingly by the company:

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…the returns must be satisfactory, hence will continue working. The returns

should be equal to our contribution or better if even more than we expected.

Overall, this interview revealed that job insecurity may have been the main factor

which contributed to Mr Yeoh‘s frequent job hopping. It may be that a stable

organisation and one which could provide long term career opportunity is more

likely to encourage employees‘ intention to stay working. More importantly, this

interview appears to suggest that employees to a certain extent do feel obligated to

reciprocate their employer‘s treatment of them. In exchange for the salary or other

benefits provided by their company, employees may reciprocate, not only by doing

their job but also by caring for the overall organisational well-being. Vice versa,

employees also expect their employers to reciprocate their work contributions as

well as their sense of responsibility towards the company. This analysis provides

evidence of the link between employees‘ performance, commitment, and retention.

As revealed from the interview, Mr Yeoh seemed to care about his company‘s

struggle even though this may have impacted adversely on his job security. An

important key issue from this interview is that employees appeared to expect their

company to disclose financial information about the company in order for

employees to better prepare themselves for any later consequences. Leaving

employees in uncertainty about their career future in a company appeared to link to

turnover rather than to retention.

EXAMPLE 2: MS NOR

Ms Nor was an electrical engineer working in a manufacturing company. She was

32 years old, was married with three children and held a diploma in electrical

engineering. Since graduation she had worked in two companies, the first merely for

two months, whilst she had been with the current employer, for eleven years. Only

findings pertaining to the second employment will be reported since Ms Nor

regarded her first job merely as temporary due to the poor economic conditions i.e.

the financial crisis in 1999 and the fact that she had been employed as a factory

labourer (commonly called production operator). According to Ms Nor, she had

accepted the job simply because she was bored with staying at home. In fact she was

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actively looking for other jobs that were equivalent to her qualifications whilst in

that employment.

Ms Nor started working in her second company in 1999 as an assistant engineer and

after two years she was promoted to engineer 2 (E2), and after seven years she was

promoted to engineer 1 (E1). Her first response to justify her long employment with

the company was, ‗Because my boss is nice‘.

Not only did Ms Nor appear to appreciate her relationship with her boss, she also

felt that the supportive relationship with her boss and with work colleagues had led

her to experience less pressure despite dealing with challenging jobs:

There is pressure in the job but I have friends and my boss supports me by not

pressuring me, the environment is nice. For instance, when I have finished my

work, I could chit chat with my friends and the boss is fine with it. I could even

attend this interview because my boss won‟t be looking for me. I don‟t think

that that is because of my long employment but actually because my boss trusts

me and treats me as a friend. I feel happy that my boss can trust me.

Ms Nor also said that everyone in her department had a very close relationship with

each other, just like a family unit and this made her feeling happy working in the

company.

According to Ms Nor, although she was discriminated against in terms of being

denied promotion because of her ethnicity and also because she was seen as falling

pregnant ‗almost every year‘, she had to continue working in the company because

of her personal circumstances. She said she was already married and had children

thus her priority was her family rather than her personal career goals. She also

mentioned that she was reluctant to move to another place as she had already bought

a house nearby, and besides her husband was working in the same company, and

moreover she lived close to her hometown. Overall, she felt comfortable staying in

the company despite feeling dissatisfied with the treatments she received from her

biased manager.

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However Ms Nor also said that although she generally liked her job, she disliked the

constant change in the company‘s HR system. She indicated that a new appraisal

system had made all the employees in the company feeling angry towards the HR

department. She felt like her own and other employees‘ career development

opportunities were somewhat constrained by the new evaluation system.

Other than dissatisfaction towards the performance appraisal system, Ms Nor also

mentioned that she was unhappy with the benefits and rewards practices:

We are angry because we are yet to receive our annual increment which was

due last month. They [the company] expect us [the employees] to run the

model production on time but they don‟t look after our welfare. In fact we used

to receive birthday gifts from the company but now no longer. The new deputy

director of the company has cut a lot of cost.

This response suggests that Ms Nor was feeling dissatisfied because she was

experiencing a breach of mutual exchange of benefits – timely annual increments

(by employer) in return for timely model production (by employee). A breach of

psychological contract could be inferred from the above response. Employees

appeared to expect their company to remunerate their work contribution either by

giving them monetary or non-monetary reward, such as birthday gifts. Both of these

rewards implied the company‘s appreciation towards the employees and suggested

that it cared for employees‘ well-being.

Ms Nor also mentioned that she disliked her job because there were interferences

from other departments which not only added on to her work responsibility but also

reduced her time for acquiring new knowledge and skills. Consequently she felt as if

she had not been able to upgrade herself and increase her employability. This was

also one of the factors that she said hindered her from job hopping to other

companies.

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When asked whether she had any intention to leave the company, she said she had

the intention to leave the job market permanently, to become a housewife or to be

self employed but had no specific target date.

Overall, the interview with Ms Nor revealed that a supportive relationship with the

superiors and work colleagues could be the main attraction to continue working in a

company. However further probing found that the interviewees‘ capacity to move to

another job was actually constrained by several personal reasons and also because

the interviewee felt that her current knowledge, skills and experience might not help

her to leverage a better offer or even to secure her a new employment. The

interviewee appeared to be generally happy with the family-like treatment from her

boss and from her work colleagues but she was obviously unhappy with the HR

policy, programs and practices of the company, and this was expressed as

resentment towards the HR department. She was particularly upset by the poor

performance appraisal system, interference in her job autonomy, and lack of

opportunity to learn and also for career development.

An important finding from the interview with Ms Nor was that certain HR policies,

programs and practices had the capacity to influence employees‘ overall feelings

towards an organisation, specifically the extent to which organisation was seen to

care for the employees‘ well-being and welfare, as well as demonstrating a mutually

gratifying relationship between employees and employer. Supports from

organisational agents such as from managers and work colleagues may also

influence employees‘ intention to continue working in a company. However, in this

case it was apparent that although the interviewee was feeling upset and

disappointed at being discriminated against, she made the choice to remain in the

company, possibly because of her personal circumstances and reduced employability

value. Whilst the first reason refers to her commitment towards her family, the latter

was based on her statement regarding her lack of updated skills and knowledge.

This analysis suggests that employees may be less likely to job hop when they have

weak performance capabilities.

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Again, this points to a conclusion that the best path to a knowledge economy may

not be through a labour market in which retention is based on skill deficits, whereas

job hopping is linked to dynamism of skill and career development. The role of HR

practices in the ‗mismanagement of talent‘ (Brown and Hesketh, 2004) means that it

is within the realm of possibility that changed HR practices could also contribute to

economic development.

EXAMPLE 3: MR DIN

Mr Din was a male senior engineer working in a manufacturing company. He was

30 years old, was married with one child and held a diploma in electronic and

electrical engineering. Since graduation, he had only worked in one company and at

the time of the interview, he had been working with the company for approximately

nine years.

According to Mr Din, he liked working at the company because there was

opportunity for career development. Within nine years of work employment, he had

been promoted three times. He first joined the company as an assistant engineer and

then was promoted to Engineer 2 position, followed by Engineer 1 and currently

was a senior engineer. Obviously with every job promotion, his pay increased as

well.

Mr Din also mentioned that the company provided training programs for employees,

and that these included both technical and non-technical training. In fact Mr Din had

attended teambuilding as well leadership training programs. He viewed these

training programs as beneficial for him as he got to learn the skills to manage his

subordinates as well as to form better working relationships with his work

colleagues:

I learnt how to communicate with other work colleagues and with my

subordinates. I learnt that I have to give proper instruction to my subordinates

in order for them to do their work appropriately. I also should ask for their

feedback and encourage two way communications between me and them.

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However between technical and non-technical training programs, it appeared that

Mr Din valued technical training more. According to Mr Din, the company had sent

him to Singapore and Japan for work attachment in order to train him about a new

model that the company was developing at the time. He was chosen because he was

in charge of developing the new model. Indirectly from attending these work

attachments combined with training, Mr Din said, „I got to upgrade my knowledge

and skills and also learn about the new model and the process that‟s involved in the

development of the model‟.

Another reason Mr Din stayed working in the company was that he received good

support from his manager and work colleagues. He described his manager and work

colleagues as friendly to him thus he felt less pressure at work. According to Mr

Din, everyone in his department worked together as a team and they always helped

each other‘s work. It appears that good relationships with every level of employees

could influence employees‘ intention to continue working in a company. Mr Din

said, „Some of my friends work in a company where their boss scolds them using

foul language. I think even if the pay is high you won‟t feel happy in that working

environment‟.

Mr Din indicated that he also liked working in the company because there were so

many activities for employees. These activities were organised by a committee or

employees in the company using funds allocated by the company. For instance, the

‗Mosque Committee‘ organised activities such as religious talks for the Muslim

employees, celebrated special events in the Muslim‘s Hijri calendar, and collected

and donated money to the poor during the month of Ramadhan. The company also

provided sports facilities for the employees, which according to Mr Din were

‗excellent‘ facilities. These facilities included a badminton hall and a football field.

Mr Din also mentioned that the company organised a dinner event annually. He

said, „The annual dinner is normally held in March every year and the company

does that to appreciate the employees‟. He also mentioned about bonus payments

for employees which he regarded as very important, „It‟s to motivate us. If they

don‟t give us something, we begin to feel bored with the job‟.

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Thus despite the spiritual and ethical aspects of the working relationship (Mellahi

and Wood, 2004), the extrinsic and intrinsic aspects of reward may not be as easy to

differentiate as theorists suggest (Herzberg, 1987). This is possibly because of the

symbolic element in rewards. Overall, Mr Din mentioned several kinds of

employee benefits which appeared to influence his feelings towards the company,

possibly in terms of organisational support and a mutually gratifying relationship,

which consequently influenced his intention to continue working in the company.

Mr Din said all the benefits he indicated were important to him, ‗I think it is

important for the company to reward us‟.

This suggests that employees not only valued monetary but also non-monetary

rewards and benefits from the employer. When asked about his intention to leave

the company, Mr Din indicated that he had no intention to leave and would probably

work until retirement. However he also mentioned that he might leave the company

if he received a better offer specifically a higher salary. He also said that he used to

look for alternative jobs after three years working in the company, but he did not

received any job offers, thus he stopped applying for other jobs. It appears that

although Mr Din was no longer an active job seeker, he was actually passively

looking for other jobs by contacting his friends in other companies.

Overall, this interview revealed that an opportunity for career development was

possibly the main factor that influenced Mr Din‘s employment duration of nine

years with the company. This finding appears to support the link between

employees‘ performance, commitment and retention, whereby commitment ensues

from a mutually gratifying employment relationship – that is the organisation giving

promotion in return for high performance. He also mentioned other aspects of HR

policies/programs for instance training programs, and various employee benefits

which included both monetary and non-monetary rewards. Although an exchange

relationship is not explicitly written in the employment contract, this interview

revealed that employees form certain expectations of their employer. The employing

company is not only responsible for taking care of employees‘ welfare and well-

being but also must reciprocate employees‘ contribution as both a symbolic and a

material way to express appreciation of employees.

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It can also be suggested that high pay could only influence an employee‘s

employment in a company to a certain extent. It needs to be complemented with a

conducive working environment, in order to motivate an employee‘s intention to

continue working with a company. Mr Din said, „First is pay, second is working

environment‟. Whilst the first may concern an equitable reward for work

contribution either through career development or bonus payment, the latter may

refers to having good relationships with other employees.

EXAMPLE 4: MS ILA

Ms Ila was an assistant manager cum secretary working in a manufacturing

company. She was 37 years old, was married with children and held a degree in

information technology engineering. Since graduation she had worked in three

companies, for four years in the first company, five years in the second company

and currently had been working in the third company for approximately four years.

The following table 7.2 shows a summary of her career movements.

Table 7.2: Summary of Ms Ila’s career movements

Company Job Tenure Job Title Main Turnover Factors 1 4 years Assistant

engineer Company closed down

2 5 years System analysis engineer

Personal factors

3 4 years Assistant manager cum secretary

- Not applicable -

According to Ms Ila she had to leave the first company because it had to close down

for financial reasons. She said she would probably still be working with the

company if it was still operating. She had particularly liked the employee benefits

provided by the company such as transport, housing and accommodation

allowances, subsidy for housing and car loan, and salary increment every six

months. She mentioned that she had continued working in the company despite not

liking her job scope because of these benefits.

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She had then moved on to the second company and worked as a systems analysis

engineer. She said although the company had downgraded her salary, she had had

to accept the job because that was the only job offer she received. Apart from a

lower salary, she also had to purchase another car because the company was located

far from her home. Nevertheless she had continued to work in the company because

she liked her job, the boss, and the working environment. She said she could

possibly still be working in the company if it had been closer to her home.

I did programming, templates and other tasks which I liked. I also liked my

boss. As a programmer, my job normally depends on the company‟s request.

So I liked this boss because he had so many ideas and I felt happy because I

got to explore and learn new things. Because I felt happy with my work, I put

aside the poor salary.

According Ms Ila the only reason she accepted the job offer from her current

company was because of its close proximity to her home. In fact she disliked the

position that was offered to her i.e. as a translator for her Japanese manager. But her

husband convinced her that she might use the opportunity of working in a small

company to create a system which could benefited the company and hopefully this

effort would be appreciated by the company by offering her the right position. This

turned out to be true as after one year working in the company, she was offered the

job as an information technology (IT) executive but she was still doing the

translation job as well. She mentioned that she liked the company because there was

an opportunity for career development; in fact since the company was small in size,

she was promoted almost every year. Within four years, she has had different

positions: translator, assistant executive, executive, senior executive and currently as

assistant manager. She anticipated that she might be promoted to manager in the

following year.

It‟s good to work in a small company as the manager could see our

contributions directly. If in a bigger company, only the supervisors would

notice our effort but not the top management of the company. They may only

realise our impact to the company when we‟ve left the company. But this

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company because it‟s a small company, it‟s totally up to the top management

to offer promotions.

However she said employee benefits were not as good as those offered by her first

employer as she only received a transport and position allowance as well as yearly

bonus. Although there was obvious pay discrimination, whereby certain people of

an ethnicity earned a higher basic salary than others, she was not personally

affected, and felt that that issue was less important to her. Ms Ila also mentioned

that she liked working in the company because the manager was lenient towards her

specifically in accommodating her personal commitments. She was allowed to go to

the bank or to go to her child‘s school during working hours, thus she felt happy. In

fact she was also allowed to work from home when she was pregnant the previous

year, and she also never had to bring her work home since working in the company,

hence she felt less pressured.

When asked about her intention to leave, she mentioned that she had no intention to

leave the current company and will probably work until retirement. If there was

anything that she disliked about the company was because there were fewer new

projects assigned to her and because her jobs seemed to lack ‗adventure‘.

Overall, the interview with Ms Ila revealed that employee benefits, the aspects of

job, and a supportive and reciprocal relationship may influence an employees‘

intention to continue working. In fact as this interview revealed, an employee may

continue to work in a company despite receiving a poor salary simply because the

job is challenging and offers congenial relationships with everyone in the company:

It‟s not easy to find a good working environment which I consider as

important. Between salary and environment, environment is more important, if

you move to another company, you will have to adapt with new people, if the

person is okay, then that will be good. As for me, I only report to one manager

in this company so it is important for me to have a good relationship with this

person and to not make enemy even if we don‟t like the person or else we won‟t

feel comfortable working in the company.

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This interview also revealed that an employee may appreciate flexible treatment

such as leniency in working hours to accommodate family commitments, as it

reflects the company‘s care for employees‘ well-being by treating them with

consideration. This suggests that employees‘ intention to continue working in a

company could be influenced by basic exchange human relations i.e. simply by

displaying more trust towards employees and giving them more freedom in

managing their work-life commitment.

In summary, this section has argued that employees may stay with or leave a

company for a combination of varied reasons. Employees may actually want to

continue working in a company, but, like Mr Yeoh, be forced to leave owing to

circumstances such as health or the company‘s inability to provide a long term

career opportunity for them. They may accept a job primarily because the new

company is located close to their residence or because the salary being offered is

substantially more than their current salary.

By contrast, as in Mrs Nor‘s case, employees may continue working in a company

despite considerable dissatisfaction with many aspects of its policies and operation.

This may be a result of personal circumstances such as family commitments, or

because they have no confidence that with limited current knowledge and skills,

they would be hired by another employer. .

While career development is an important factor influencing employees‘ intention to

continue working in a company, the case of Mr Din also suggests that employees

may ultimately have to continue working in a company simply because there are no

other job offers and alternative sources of satisfaction that may compensate for lack

of a career opportunity or higher salary.

Ms Ila‘s case example revealed interesting complexities. She gained little intrinsic

satisfaction from her first job but stayed because of the employee benefits, being

‗forced‘ to leave when the company was closed down. She liked the intrinsic aspects

of her second job but not employee benefits, and it was the distance from home that

triggered her resignation. At first she disliked her third job but stayed working

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mainly because the company was close by to her home: but it was only when she

was assigned a satisfying and family-friendly job that she decided to continue

working for the long term. Not only did she like her job, but also there was an

opportunity for career development, and also she could balance her family and work

commitments. This finding also indicates the mutually-reinforcing links among

performance, commitment, and retention. Job promotions is a return for high

performance behaviour; consistent reward i.e. career development opportunity leads

to feelings of organisational support and psychological contract; and this thereafter

influences the intention to continue working in the company.

In summary, all these case examples suggest that career development opportunities

may influence employees‘ intention to continue working in a company as job

promotions imply an increase in salary, and as are seen as an exchange for

employees‘ high performance behaviour. Access to staff development also suggests

long term career opportunity, consistent with the needs of knowledge workers.

However, especially for female employees, their intention either to continue

working with or to leave a company may ultimately be influenced by their family

commitments. One consensus across all the four case examples is a need for a

favourable working environment which may influence employees‘ intention to

continue working in a company. This need refers to employees‘ overall feelings

towards the company – whether it is fulfilling their current and future needs,

including both physical and psychological needs. The following are the response

from several of the interview participants when asked about their perceptions of an

ideal company:

Of course firstly is a company that could offer a good salary, equitable to

work effort, secondly company has to look after its employees‟ welfare,

provide good environment, not racist, provide medical benefits, annual leave,

freedom to practise religious obligation. (Mr Zairul)

I want a company that offers a lot of benefits, not too much work pressure by

the company being organised, more freedom in work, I can do my work, high

salary, benefits such as providing a medical card, a working environment

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which makes us feel comfortable working with every employees in the

company, the boss should act like a boss, if the boss cannot treat us as a

friend, at least make us respect the boss, be professional at work, even better if

the boss can look after the employees, care for the employees, not necessarily

by giving employees salary but through leadership, such as the boss can visit

the employees when they are sick etc. (Ms Ida)

I expect a company that is flexible in terms of time and support employees‟

work such as send employees to training, give us guidance, and reward us if

we work well by giving us bonus or salary increment to show that company

appreciates the employees. (Ms Wati)

Maybe a company that can provide a life time employment, stable, importantly

our work can become a part of our life, it‟s like the job is the source of our

survival, for instance like one company I‟ve been to, I felt like they are a

family, they organised sports day which employees‟ family could get involved,

a place where we feel happy, if we are sick, we could take leave, it‟s like we

feel like we could do the job for our entire life, just like moving into a house,

you want to feel comfortable living there, feel happy. (Mr Nik)

CONCLUSION

This chapter has presented the findings obtained from the interview with 18

engineers working in the Malaysian state of Johore, which can be summarised as

follows:

1) Engineers‘ career aspirations, specifically their need to upgrade knowledge,

skills, and experience (through training programs and challenging jobs), their need

for career development (through job promotions) and long term career opportunities

(i.e. job security), and their need to earn a competitive salary (i.e. equitable

salary)will all shape their intention to stay working in a company

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2) Engineers‘ perceptions of a mutual exchange relationship, reflected in a fair and

equitable reward system, a flexible HR policy/program, and symbols of company‘s

appreciation towards employees, are likely to influence engineers‘ feelings of

organisational support and psychological contract, and hence their intention to stay

3) Engineers‘ relationship with organisational agents – with managers and work

colleagues, and their perceptions of the HR department of the company, may

influence their perceptions of organisational support and intention to stay

4) Engineers‘ intention to continue working in a company may be influenced by two

main barriers to leaving the company: personal circumstances such as family

commitment (especially for female engineers), and labour market factor such as a

lack of job offers

5) Engineers‘ turnover and intention to stay decisions may not necessarily be polar

opposites: which prevails may depend on the factor which the engineers consider the

most important to them

6) Engineers‘ perceptions of an ideal company is one that could satisfy both physical

needs (such as a fair and equitable salary, job security, career development, medical

benefit) and psychological needs (such as a family-friendly working environment

based on trust, mutual respect, and providing work-family balance)

Overall, the qualitative data presented in this chapter provide insights into the ways

in which HR practices can either undermine or contribute to the attraction, retention

and development of knowledge workers. There was evidence of the mechanical

application of one-size-fits-all HR policy/program, and particularly of forms of

appraisal in which inappropriate performance measurements were impersonally

applied. If HR is to contribute to staff retention, this process needs to be made more

strategic and more adapted to individuals.

There is a clear importance of HR practices in the psychological aspects of retention

– whether reciprocity in perceptions of organisational support or a stronger tie based

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on a psychological contract. Nevertheless, the frequent references to ‗boredom‘

indicate that the materially and socially rewarding aspects of the job must be

supplemented by the opportunity to develop professionally. Without this, Malaysian

engineering firms will be caught between a situation in which retention becomes

synonymous with stagnation but too frequent job hopping prevents the depth of

development of employee and organisational expertise within firms that is a basis of

innovation.

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CHAPTER 8 CONCLUSIONAND IMPLICATIONS

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INTRODUCTION

This final chapter draws together the key findings from the surveys and interviews

involving engineers and HR practitioners of Malaysian engineering firms. From this,

tentative general conclusions are drawn about how human resource management

(HRM) practice in Malaysian engineering firms might make a stronger contribution

to the development of a knowledge economy. This thesis started out as an effort to

understand factors that may contribute to improved retention of engineers in

Malaysia. This was a question in two parts - the nature of engineers‘ intention to

stay with a company or to pursue mobility in an external labour market, and how

this intention might be influenced by organisations‘ HR policies/programs/practices.

These objectives were investigated through eight research questions:

Research Questions 1, 2, and 3 focused on the characteristics of knowledge workers,

engineering labour market, and protean/boundaryless career to analyse the intention

to stay factors of Malaysian engineers. Research Questions 4 and 5 drew attention to

the strategic human resource management (SHRM) approach to the management of

employee retention in Malaysian engineering firms. Research Questions 6, 7, and 8

focused on the relationship between career-oriented HR policies/programs/practices,

perceived organisational support (POS), psychological contract (PC), and engineers‘

intention to stay.

In summary, Chapter 1 introduced the problem of retention, particularly among

skilled workforce in Malaysia. Chapter 2 presented literatures related to the

engineering careers and their management and explained how engineers‘ knowledge

workers characteristics, engineering labour market, and engineers‘ career aspiration

can influence engineers‘ retention behaviour. Chapter 3 shifts the focus from

engineering careers to employing organisations, and examined the firm-level

strategies for employee retention, including career management and social exchange

relationship. Chapter 4 then explained the research design and methods used in this

study, along with the profiles of both survey and interview participants. Chapter 5

presented the findings from the interviews with HR practitioners, complemented

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with a meta-analysis of Malaysian-context employee retention studies. The results of

the quantitative analysis of the survey were presented in Chapter 6 to determine the

relationships between the ten variables under study and engineers‘ intention to stay:

POS, PC, HRQuality, HRQuantity, ETHNICITY, MARITAL, YRSEMPLOY,

LOCSING,AGE, and GENDER. Finally Chapter 7 presented the findings from the

interviews with 18 engineers in Johore, and found that engineers‘ intention to stay

was also influenced by individual and labour market circumstances, indicating a

complex model of intention to stay factors.

This concluding chapter consists of five sections including this introductory section.

The next section presents an overview of the key findings from the survey and

interviews with engineers, and interviews with HR practitioners, and draws out their

significance. The third section presents the theoretical and practical contributions of

the overall findings, followed by a discussion of the limitations and future research

opportunities arising from this study in the fourth section. The final section draws

the thesis together, identifying why the study matters.

OVERVIEW OF KEY FINDINGS

The study began with the widely-discussed problem of knowledge worker retention

in Malaysia, identifying the reasons why it is indeed an issue, not only at national

and regional level, but at firm level. Engineers were shown to be a significant

occupational group with a key role to play in Malaysia‘s quest for knowledge

economy status by 2020. It was established that, whilst a heavy tendency to life-

long employment models might indicate a degree of stagnation and hamper

innovation, the inverse situation is also problematic. An excessive tendency to what

in Malaysia is commonly called job hopping by professional workers—a switch of

employer every few years—may be a symptom of a lack of collaboration between

knowledge-creating companies and their knowledge workers, in which innovation is

generated as skills and understanding deepen. Indeed high performance work

system models depend on such active participation and commitment, and the

research tested the view that high turnover might be a symptom of lack of

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engagement, resulting from either of lack of voice, or of lack of a sense of

reciprocity.

The research investigated the factors that may contribute to improved retention of

engineers in Malaysia from three levels of analysis: organisational, labour market

and individual. At the organisational level, the conceptual model of this study

hypothesised what a strategic HRM approach to employee retention in Malaysian

engineering firms would be like, if it existed, and its relationship to specific HRM

approaches such as career management, and employee retention. At the individual

level, the social exchange constructs of POS and PC were hypothesised as the

factors that form the basis of employee commitment, leading to an intention to

continue working within an organisation. At both the individual and labour market

level, extra-organisational factors, specifically individual and labour market

circumstances were hypothesised in the conceptual model as factors contributing to

improved retention of engineers.

The results and findings from both survey and interviews are presented and

discussed within three empirical chapters: Chapter 5, 6, and 7. Firstly, the analysis

suggests strong Malaysian government interventions in firm HRM policies and

practices, explained by the Malaysian government being the single largest employer

in Malaysia. In moving towards a developed nation status by 2020, the Malaysian

government has outlined specific strategies to build a resilient and competitive

workforce in the pursuit of a knowledge-based economy. In this context, HRD

specifically employee training and development has become a key component of

this national policy. However, despite numerous supports and incentives provided

by the Malaysian government, Malaysian engineering firms appeared to view

employee training and development as costly not only in terms of the operational

costs involve in conducting or sending employees for external training programs, but

also because of the paradox that employee training and development programs

provide employees with external career mobility as a result of improved knowledge

and skills.

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The interviews with the engineers however revealed that job hopping or turnover

may not be a direct consequence from training and development programs. Rather,

engineers viewed training and development programs as satisfying their self-

efficacy needs and intention to leave seemed to occur as a result of a lack of career

development opportunities within the firm internal labour market. This suggests that

a possible firm retention strategy is to provide career advancement opportunities for

employees. This suggestion is congruent with the findings from the survey of

engineers, specifically that a majority of survey participants perceived career

development opportunities and skills training as moderately or significantly

affecting their intention to stay decisions. What is evident from this analysis is the

awareness of the Malaysian government of the importance of employee training and

development, which appeared not to be fully supported by Malaysian firms.

Clearly this study has an implication for Malaysian HR practitioners, as well as the

top management of a company. It is important to realise the non-reciprocal

association between training and turnover. Malaysian organisations need to view

employee training and development as a critical retention strategy, particularly for

knowledge workers such as engineers. Organisations that seek to achieve retention,

or to reduce turnover through employee training and development must be prepared

to offer firm internal career advancement opportunities for trainees, and this

‗reward‘ should be timely to avoid employees‘ feelings of a lack of organisational

support or a breach of trust—that is, of psychological contract. Since engineers also

appeared to be particularly responsible for their own self development, it may

benefit organisations to involve them in the implementation of training and

development policy, programs, and practice. This approach would signify

organisations‘ recognition of employees‘ voice and could thereby have the capacity

to enhance employees‘ commitment, leading to increased retention behaviour.

A second key finding from this study pertains to the role of HR practitioners, as

strategic partners in organisations as well as acting as employees‘ representative.

The findings of this study revealed an absence of a strategic HRM approach on the

part of HR departments, and this appeared to be exacerbated by a lack of support

from companies‘ top management. If Malaysian organisations are to retain their

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skilled employees, they have to recognise the HR department as a crucial

organisational agent rather than as existing merely for operational functions. The

interviews with HR participants showed that they have limited authority in the

management and development of human resources, although they seemed to be

aware of their important mediating roles. On the other hand, the interviews with

engineers revealed that their intention to stay was in fact influenced by their

perceptions of organisational support and by the existence of a psychological

contract, reflected through the actions and decisions of HR practitioners. Poor HR

practices, such as unfairness of the performance appraisal process or reward, were

sufficient to trigger intentions to leave. Whether or not these were put into practice,

they signalled a degree of psychological disengagement. This analysis suggests an

urgent need to promote a mutually gratifying relationship between top management,

HR practitioners, and employees. This thesis is inclined to recommend to

organisations, especially Malaysian companies, the importance of realising the

positive outcomes from such relationship, in the context of this thesis – improved

retention of employees.

The dynamics of engineers‘ career aspiration is the third key finding of this thesis. It

must be understood as having influences from various aspects including work, the

employing organisation, the labour market, and individual circumstances. These

factors are found to be strongly inter-related in influencing engineers‘ intention to

stay working in a company. Of particular importance, there was evidence that the

factors that can influence ITS vary for differing employees and will relate to their

personal characteristics such as age, gender, and family status. A one-size-fits-all

HR policy/program is thus inappropriate to contribute to employee retention, rather

there is a need for HR to develop customised bundles of benefits as a way of

influencing ITS. Regular developmental discussions with staff need to be set up,

whereby career aspirations are documented and matched to learning and developing

employees‘ needs. The HR measures that are most conducive to each individual‘s

retention need also be discussed, and can include flexible work-time arrangement in

one case, opportunity for secondment in another.

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The survey results established the cause-effect relationship between HR policies and

programs, especially in terms of their quality of implementation, POS and

engineers‘ intention to stay. In fact, POS and HRQuality were found to be the two

most significant contributors to engineers‘ intention to stay, over-riding other

variables. The mediation analysis revealed POS as having the capacity to influence

the relationship between HRQuality and engineers‘ intention to stay. This analysis

indicates the significance of organisational support in influencing employees‘

retention behaviour. This support can involve providing opportunities for enhancing

knowledge and skills, career advancement within the firm, fair and equitable

rewards, and adopting flexible HR approaches. A striking revelation in regards to

POS is the fact that engineers‘ attachment and commitment towards organisation

may simply be enhanced by organisations treating them as family members—

respect, friendship, kindness, fairness and compromise are among the most frequent

expressions mentioned by engineer participants. In a way, this result signifies a

traditional personnel management approach rather than a strategic HRM in

Malaysian engineering firms.

The empirical findings of this study clearly indicate the need to challenge the

conventional view that Malaysian workplaces are hierarchical to the point where

Malay workers in particular are somewhat subservient. This study has found that

Malaysian professional; in particular engineers are aware of their value to the

company. This suggests a potential key role of HR in mediating between the

interests of senior management and professional knowledge workers, leading to a

mutually gratifying employment relationship. Moreover this study has established

the distinct characteristics of knowledge workers compared to manual workers,

specifically that knowledge workers are aware of their value to the organisation and

thus regard themselves and their organisations as equally dependent on each other.

Such perceptions if considered by organisations may enhance employees‘

attachment and commitment, leading to increased retention behaviour.

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THEORETICAL AND PRACTICAL CONTRIBUTIONS

The focus of this research differs from existing discussions on turnover or retention,

in that extant research has simply presumed the implications of HR strategies for

employee retention, while neglecting the psychological process that may be

involved in forming perceptions of commitment. Specifically, whilst the HR

literature on retention has established the relationship between HR strategies and

employees‘ commitment and retention, very little is known about employees‘

reaction to HRM practices (Guest, 1999) particularly the link between commitment,

intention to stay, and retention. It is the ‗how‘ rather than the ‗what‘ of influences on

employees‘ intention to stay working that seemed to have been under-researched in

previous studies. According to Steel et al. (2002), it is important for an organisation

to assess what retention factors are important to its workforce before developing

retention strategies. The consequences of POS and PC have been widely observed in

the Western context (Eisenberger et al. 1986; Eisenberger et al., 1997; Eisenberger

et al., 2001; Eisenberger et al., 2002), whilst findings for Asian collective culture

such as Malaysian employees are still in the preliminary stages (Tan, 2008),

especially its relevance to the engineers.

An important theoretical contribution of this thesis is the linking of HR practices to

social exchange theory, specifically the constructs of POS and PC in exploring the

commitment issue. The study is novel in applying these constructs specifically to

knowledge workers inhabiting an external labour market. It has utilised POS and PC

in the modelling of the relationship between HR strategies and engineers‘ intention

to stay, by examining the mediating effect of social exchange —POS and PC— on

this relationship. Methodologically, this study has constructed two HR variables:

HRQuantity and HRQuality to examine the relationship between components of HR

strategies and engineers‘ intention to stay. HR strategies were also tested against the

level of influence towards engineers‘ intention to stay: HRITS. These analyses

provide a deeper understanding of how exactly HR strategies can influence retention

behaviour. The survey has revealed a significant relationship particularly between

HRQuality rather than HRQuantity and engineers‘ intention to stay, suggesting the

importance of the implementation of HRpolicies/programs rather than the number of

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HR policies/programs available in a company, which engineers appeared to view

through the lens of POS and PC.

Moreover, most psychological theories of voluntary employee turnover offer limited

understanding of the underlying cause of turnover, disregarding extra-organisational

factors, specifically individual, group and labour market factors; hence they may be

unable to explain retention factors. This study has contributed to this theoretical gap

by examining a range of variables contributing to employee retention, from

individual to organisational to labour market factors. The interviews with the

engineers particularly provided an insightful understanding of the factors affecting

both leaving and staying in the organisation, which may be either very distinct or

highly inter-related. For example, based on the interview analyses, it was found that

turnover may be induced by a certain aspect of dissatisfaction toward the

organisation such as a discriminatory appraisal practices, but in a difference case,

turnover may also be influenced by a specific personal reasons such as the long

distance between workplace and home which has an implication on work-family

balance. Longitudinal career histories were particularly illuminating in identifying

the link between intention to stay or leave and actual turnover behaviour.

In summary, this thesis has gathered data mainly from the perspectives of individual

employees, specifically the engineers. This provided a bottom-up rather than a top-

down approach. Such an approach can help organisations, particularly engineering

firms in Malaysia, to develop and implement effective HR policies/programs

designed to improve the commitment as well as the retention of their knowledge

workers. More recent interest in Malaysia in factors affecting the sustenance of

employees‘ retention has recognised the need to utilise POS and PC in the

relationship. This thesis contributes to this growing body of research, and provides

one example of how adopting career-oriented HR policies/programs/practices, and

the benefits of mixed-method research design of interviews and survey, provides a

more nuanced understanding of the psychological process involves in forming the

perceptions of commitment leading to increased retention.

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LIMITATIONS AND FUTURE RESEARCH

Whilst the survey revealed a significant relationship between career-oriented HR

strategies, POS, PC, and intention to stay, the interviews, although seemed to

suggest the importance of a mutually gratifying employment relationship such as on

the role of organisational agents, were based only on interviews with 18 engineers

working in Johore. A majority of the interviewees were between the ages of 21-30.

A quantitative analysis specifically on perceived supervisor support may

complement this finding. The importance of the interview data in revealing the

complexity of turnover decisions suggests that future research should benefit from a

larger sample of interviewees from a range of age groups and geographical areas.

Further testing of this model with an older workforce, and in other states than

Johore, would also be beneficial to generalise the interview results. Moreover, this

study has only examined engineers as hypothetical knowledge workers, thus future

research will need to confirm to what degree the link between HR strategies,

commitment and retention does also exist for other types of knowledge workers such

as doctors.

This research also has not managed to objectively capture the level of importance of

the various factors that appeared to influence turnover, intention to leave, retention,

and intention to stay decisions. The analysis of engineers‘ career histories, presented

in Chapter 7 of the thesis, although it did provide an understanding of the

complexities underlying intention to stay or leave decisions, was not based on direct

observations in real time. Thus a longitudinal study may be utilised in future

research to increase the understanding of the factors that actually triggered the

decisions of staying or leaving the organisations. It is of utmost important to

distinguish between the factors that lead to employee dissatisfaction and the factors

that actually influence intention to leave. As this study has established, these factors

may be inter-related, but a longitudinal study may obtain a more accurate factors of

intention to stay. A longitudinal study may also be used to identify the changes in

employees‘ perceptions in regards to their career aspirations and perceptions

towards their company during the observations, as well as has the capacity to

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identify the causal relationship between intention to stay and actual retention

behaviour.

This thesis has also highlighted several types of workplace discrimination

experienced by the engineer participants. It may be valuable to further research this

issue, specifically exploring regulatory approaches to good employment relations

and prevention of discrimination, which were not explored in this thesis. Such a

research focus is especially needed to better understand the challenges in the

management of multi-ethnic human resources in Malaysia. As indicated earlier in

this chapter, career management, particularly career development, emerged as one of

the key findings of this thesis. However this study was not able to obtain in-depth

data on career management policy, programs, and practices from the interviews with

HR practitioners. This limitation provides an avenue for future research to

investigate on, specifically on firm approaches to career planning and its association

with commitment and retention or turnover behaviour.

CONCLUSION

The initial focus of this thesis was the empirical research problem: What shapes

Malaysian engineers‟ turnover behaviour in an occupational-external labour

market, and how, at the level of the firm can organisations influence the retention of

engineers? This question was broken down into eight theoretically-informed

research questions, which were investigated through a mixed-method approach. The

study has provided answers to all eight operational research questions, in order to

develop an overall thesis – that it is within the power of firms to improve their

utilisation of the knowledge of engineers, by taking account of the various

characteristics of Malaysian engineers in relation to their retention behaviours. This

can be done through HR practices that are based on a recognition of the link

between commitment and retention. Emphasising a mutually gratifying employment

relationship based on social exchange theory, resulting in engineers‘ perceptions of

organisational support can contribute to the formation of a psychological contract.

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This thesis has tested the concepts of POS and PC with Malaysian engineers and

found that the extent to which firms provide forms of engagement and career

support might counter job hopping specifically by creating a sense of psychological

mobility through professional growth. It has also provided evidence which suggests

the critical role of HR practitioners in an organisations‘ retention effort, and has

explored the dimensions of HR policies, programs and practices that can influence

engineers‘ intention to stay working in a company. It provides both ‗top-down‘ and

‗bottom-up‘ perspectives on the factors shaping engineers‘ turnover intentions and

their causes.

Interviews with HR practitioners revealed an operational rather than a strategic role

of HR departments in Malaysian engineering firms, whereby employee training and

development were regarded as costly. In contrast, the survey results indicate career

development opportunity and skills training as the HR strategies most likely to

influence engineers‘ intention to stay working, primarily for fulfilling engineers‘

self-efficacy needs. Finally, despite engineers‘ career aspirations, the sense of a

mutually gratifying employment relationship emerged as important retention factor,

whilst HR policies and practices have the capacity to influence engineers‘ complex

career mobility decisions.

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APPENDICES

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APPENDIX A: MAP OF PENINSULAR MALAYSIA-SINGAPORE

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APPENDIX B: QUESTIONNAIRE

Independent Variable 1 and 2: HRQuality and HRQuantity Listed below are policies and programs that may be available at your company. If available, please rate the policy or program. If not available, please click on the ‗Not available‘ button.

Not available

Extremely poor

Very poor Quite poor

Fairly good

Very good

Excellent

0 1 2 3 4 5 6

Recruitment and selection 1.Recruitment on the basis of merit 2.Non-discriminatory recruitment practice 3.Recruitment from within the company

Training 4.Assessment of training needs 5.Job specific skills training 6.Leadership training

Career planning 7.Long term career opportunity 8.Mentoring for career advancement 9.Training for career development 10.Training for external marketability

Performance appraisal 11.Developmental performance appraisal 12.Performance feedback 13.Appraisal based on continuous improvement

Rewards and promotion 14.Promotion based on performance 15.Performance based reward 16.Challenging job assignment 17.Professional networking opportunity

Fringe benefits 18.Educational leave 19.Flexible working hours 20.Working from home 21.Retirement scheme 22.Health insurance 23.Flexible employment contract 24.Personal loans 25.Overseas holiday trips 26.Childcare provision

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Independent Variable 3: HRITS Please indicate the extent to which the following policies or programs affect your intention to stay working for your company.

Not at all Slightly Somewhat Moderately To a great extent

1 2 3 4 5

Recruitment and selection 1.Recruitment on the basis of merit 2.Non-discriminatory recruitment practice 3.Recruitment from within the company

Training 4.Assessment of training needs 5.Job specific skills training 6.Leadership training

Career planning 7.Long term career opportunity 8.Mentoring for career advancement 9.Training for career development 10.Training for external marketability

Performance appraisal 11.Developmental performance appraisal 12.Performance feedback 13.Appraisal based on continuous improvement

Rewards and promotion 14.Promotion based on performance 15.Performance based reward 16.Challenging job assignment 17.Professional networking opportunity

Fringe benefits 18.Educational leave 19.Flexible working hours 20.Working from home 21.Retirement scheme 22.Health insurance 23.Flexible employment contract 24.Personal loans 25.Overseas holiday trips 26.Childcare provision

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Independent Variable 4: POS Listed below are statements that represent possible opinions that you may have about working in your company. Please indicate how much you agree or disagree with the following statements by choosing the response that best represents your point of view about this aspect of the company. Strongly disagree

Moderately disagree

Slightly disagree

Neither disagree nor agree

Slightly agree

Moderately agree

Strongly agree

1 2 3 4 5 6 7

1. The organisation values my contributions to its well-being 2. The organisation appreciate any extra effort from me 3. The organisation would ignore any complaint from me 4. The organisation really cares about my well-being 5. Even if I did the best job possible, the organisation would fail to notice 6. The organisation cares about my general satisfaction at work 7. The organisation shows very little concern for me 8. The organisation takes pride in my accomplishments at work

Independent Variable 5: PC Please indicate how much you agree or disagree with the following statements by choosing the response that best represents your point of view about your level of commitment towards your company.

I. Employee Obligation

EE loyalty 1. I protect the image of my organisation 2. I commit myself personally to this organisation

EE narrow 1. I will only perform the required tasks 2. I will only do what I am paid to do

EE performance support 1. I accept challenging performance standards 2. I respond positively to dynamic performance requirements EE development 1. I seek out developmental opportunities that enhance my value to the

organisation 2. I make myself increasingly valuable to my employer

Do not agree at all

Slightly agree

Somewhat agree

Moderately agree Agree to a great extent

1 2 3 4 5

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II. Employer Obligation ER loyalty 1. My employer is concerned for my personal welfare 2. My employer is responsive to my personal concerns and well-being

ER narrow 1. My employer provides training only for my current job 2. My employer requires me to perform only a limited set of duties ER performance support 1. My employer enables me to adjust to new, challenging performance

requirements 2. My employer supports me to attain the highest possible levels of performance

ER development 1. My employer provides opportunities for career development within this firm 2. My employer provides opportunities for promotion

III. PC Transaction

No trust 1. My employer withholds information from its employees 2. My employing organisation acts as if it doesn‘t trust it 3. My employer introduces changes without involving employees 4. My employer doesn‘t share important information with its employees

Uncertainty 1. It is difficult to predict future direction of my employer‘s relations with me 2. There is an uncertain future regarding my employer‘s relations with me 3. There is uncertainty regarding my employer‘s commitments to its employees 4. There is uncertainty regarding my employer‘s commitment to me

Erosion 1. My employer demands more from me while giving me less in return 2. My employer is likely to offer decreased benefits in the next few years 3. No matter how long I work here, there is no certainty that my salary will

increase 4. My employer wants more and more work for less pay

IV. PC Fulfilment Employee Fulfilment 1. I have fulfilled my commitment to my employer 2. I live up to my promises to my employer

Employer Fulfilment 1. My employing organisation has fulfilled its commitment to me 2. My employing organisation lives up to its promises

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Dependent Variable 1: ITS Please indicate how much you agree or disagree with the following statements by choosing the response that best represents your point of view about your intentions to stay within your company.

1. I will quit whenever I want 2. I plan to stay here a long time 3. I have no future obligations to this organisation 4. I will continue to work here 5. I will remain with this organisation indefinitely 6. I will leave at any time I choose 7. I make no plans to work anywhere else

Open-ended questions

1. What do you like most about working with your company? 2. What do you like least about working with your company?

Do not agree at all

Slightly agree

Somewhat agree

Moderately agree Agree to a great extent

1 2 3 4 5

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APPENDIX C: HR INTERVIEW QUESTIONS

1. Would you be prepared to provide me with summary data on the composition of your workforce (e.g. gender, age, race, years of service, job classification)?

2. Please describe your company‘s history and size of business. 3. Please describe your educational background and work experience in

human resource management and development. 4. How would you describe the human resource department‘s role and

function in the company? 5. Does your department make decisions relating to policy and programs for

human resource management and development? How much influence do the executives have in determining these decisions?

6. What is the turnover rate in your company in general and for engineers? 7. Does your company employ specific strategies for survival during the

current financial crisis? 8. Is retention of engineers a problem in your company? (in the sector?)

a. If so, what contributes to the problem of retaining engineers? b. What are the possible solutions to overcome the retention

problem? 9. What would be the barriers (if any) to adopting these solutions? 10. Please describe the human resource management policies and practices in

your company (recruitment and selection process, staffing system, training and development program, rewards and performance system, career development program, flexible arrangement for women engineers with family responsibilities i.e. child care, elderly care and etc.) Which of these policies or programs are designed to retain staff? [Ask for relevant documents]

11. Does your company evaluate its human resource management policies and practices? How are they evaluated? In your view, which of your policies or programs are most effective for retaining staff?

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APPENDIX D: ENGINEER INTERVIEW QUESTIONS

1. Is this your first job? How long have you worked here? Is it typical for other engineers?

2. How many companies have you worked for since completing your degree? How long was the tenure for (each) company? Why did you leave each company? What made you happy and stay/unhappy working in each of the previous companies (compare between companies)?

3. What is your typical day at work? Is it the same from day to day? 4. What has happened to your job since you started working with this company

(i.e. demoted/promoted/new department/new leader/new duties etc)? Why do you think it happened to you? How do you feel about it? What would you feel if it didn‘t happen to you?

5. Is this career something you want to do for a long term? 6. Why you stay working with this company? What are you happy with

working with this company? What do you like about the job? Can you give examples of the company treating you right?

7. Have you ever thought of leaving this company? 8. Why don‘t you want to stay with this company? What are you not happy

with this company? What don‘t you like about the job? Can you give examples of the company not treating you right? If the company gives you what you want and made you happy, will you stay working with the company?

9. What support have you received from your company? Can you give examples of the support?

10. How do you get al.ong with your supervisor/co-workers/senior management? Can you explain why this relationship is so good/bad/ etc.?

11. What is the most exciting thing that has happened to you since working with this company?

12. What is the most frustrating thing that has happened to you since working with this company?

13. How do you think your company can support you in the future? Who do you think is the most responsible to support you in this company?

14. How do you compare your company‘s support with other companies? Can you give examples of the support? How would you like to be supported that way? Why?

15. Do you feel a sense of loyalty or commitment to your company? Can you explain what this feeling is and why you feel that way?

16. Do you think you have obligation/responsibility to your employer? Can you explain what this feeling is and why you feel that way?

17. Do you feel that your company has a sense of loyalty or commitment towards you? Can you explain what this loyalty/commitment is and what makes you think there is such a loyalty/commitment?

18. Do you think you employer has obligation/responsibility towards you? Can you explain what obligation/responsibility is and what makes you think there is such an obligation/responsibility?

19. Do you think your company‘s loyalty/commitment towards you have an effect on your stay with the company?

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20. Do you think the employer‘s obligation/responsibility towards you have an effect on your stay with the company?

21. Do you feel that your stay with the company was influenced by employer‘s commitment and fulfilment of its obligation towards you?

22. Do you have a human resources department in your company? How many people are in it? What do they do?

23. Do you want to work in Singapore as an engineer? Why you want/don‘t want to be working in Singapore? How do you compare supports by companies in Singapore with companies in Malaysia? Do you have friends who are working in Singapore? Are they permanent settler or commuting daily? Why are they working in Singapore?

24. What is an ideal company to work for? How your present company compares with your idea? Do you think there is an ideal company?

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APPENDIX E: PISC FORM FOR HR PARTICIPANTS

Approval No (09 2 040)

THE UNIVERSITY OF NEW SOUTH WALES PARTICIPANT INFORMATION STATEMENT AND CONSENT FORM

The Retention of Knowledge Workers: The Impact of Human Resource Practices on Employees’ Intentions to Stay

You are invited to participate in a study of the impact of human resource practices on employee retention. Ihope to learn about the extent to which engineers‘ (‗knowledge workers‘) intentions to stay working in a company are influenced by their company‘s human resource management practices. You were selected as a possible participant in this study because you are a HR manager working for a company that is a significant employer of engineers.

Description of study and risks If you decide to participate, I will submit a brief description of my research for your understanding, accompanied by details for accessing an online survey. It is expected that you will publicise the online survey to the engineers employed in your company. In addition, you will be invited to participate in a personal interview with me, using one of the following methods: phone interview/face-to-face interview/online interview. The interview will take about an hour and with your permission, the interview will be recorded on audio tapes. I expect that this study will benefit the industry by providing information that can help companies design human resource practices that promote retention; although we cannot and do not guarantee or promise that your company will receive any benefits from this study.

Confidentiality and disclosure of information Any information that is obtained in connection with this study and that can be identified with you or your organisation will remain confidential and will be disclosed only with your permission, except as required by law. I plan to include the consolidated results from this survey in a doctoral dissertation at the School of Social Sciences & International Studies, University of New South Wales, and in academic discussions and publications. In any publication, information will be provided in such a way that no companies or individuals can be identified. Complaints Complaints may be directed to the Ethics Secretariat, The University of New South Wales, SYDNEY 2052 AUSTRALIA (phone +6129385 4234, fax +6129385 6648, email ethics.sec@unsw.edu.au). Any complaint you make will be investigated promptly and you will be informed out the outcome. Feedback to participants An electronic summary of research findings will be offered to your organisation at the completion of the study; a minimum of 3 years from the survey period. Your consent Your decision whether or not to participate will not prejudice your future relations with the University of New South Wales. If you decide to participate, you are free to withdraw your consent and to discontinue participation at any time without prejudice. If you have any questions, please feel free to contact me at fusherna@yahoo.com. My supervisors Prof. Janet Chan (j.chan@unsw.edu.au) and Dr Anne Junor (a.junor@unsw.edu.au) will be happy to answer any further questions about the research. You will be given a copy of this form to keep.

Page | 312

Approval No (09 2 040)

THE UNIVERSITY OF NEW SOUTH WALES

PARTICIPANT INFORMATION STATEMENT AND CONSENT FORM (continued)

The Retention of Knowledge Workers: The Impact of Human Resource Practices on Employees’ Intentions to Stay

You are making a decision whether or not to participate. Your signature indicates that, having

read the information provided above, you have decided to participate.

…………………………………………………… .…………………………………………………….

Signature of Research Participant Signature of Witness

…………………………………………………… .…………………………………………………….

(Please PRINT name) (Please PRINT name)

…………………………………………………… .…………………………………………………….

Date Nature of Witness

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Approval No (09 2 040)

REVOCATION OF CONSENT

The Retention of Knowledge Workers: The Impact of Human Resource Practices on Employees’ Intentions to Stay

I hereby wish to WITHDRAW my consent to participate in the research proposal described above

and understand that such withdrawal WILL NOT jeopardise any treatment or my relationship with

The University of New South Wales.

…………………………………………………… .…………………………………………………….

Signature Date

……………………………………………………

Please PRINT Name

The section for Revocation of Consent should be forwarded to Rabeatul Husna Abdull Rahman, 2/2

Barber Ave, Eastlakes 2018, New South Wales Australia.

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APPENDIX F: PISC FORM FOR ENGINEER PARTICIPANTS

Approval No (09 2 040)

THE UNIVERSITY OF NEW SOUTH WALES PARTICIPANT INFORMATION STATEMENT AND CONSENT FORM

The Retention of Knowledge Workers: The Impact of Human Resource Practices on

Employees’ Intentions to Stay

You are invited to participate in a study of the impact of human resource practices on employee retention. Ihope to learn about the extent to which engineers‘ (‗knowledge workers‘) intentions to stay working in a company are influenced by their company‘s human resource management practices. You were selected as a possible participant in this study because you are an engineer working for a company that is a significant employer of engineers.

Description of study and risks If you decide to participate, I will submit a brief description of my research for your understanding. In addition, you will be invited to participate in a personal face-to-face interview with me. The interview will take about an hour and with your permission, the interview will be recorded on audio tapes. I expect that this study will benefit the industry by providing information that can help companies design human resource practices that promote retention; although we cannot and do not guarantee or promise that your company will receive any benefits from this study.

Confidentiality and disclosure of information Any information that is obtained in connection with this study and that can be identified with you or your organisation will remain confidential and will be disclosed only with your permission, except as required by law. I plan to include the consolidated results from this survey in a doctoral dissertation at the School of Social Sciences & International Studies, University of New South Wales, and in academic discussions and publications. In any publication, information will be provided in such a way that no companies or individuals can be identified.

Complaints Complaints may be directed to the Ethics Secretariat, The University of New South Wales, SYDNEY 2052 AUSTRALIA (phone +6129385 4234, fax +6129385 6648, email ethics.sec@unsw.edu.au). Any complaint you make will be investigated promptly and you will be informed out the outcome. Feedback to participants An electronic summary of research findings will be offered to your organisation at the completion of the study; a minimum of 3 years from the survey period. Your consent Your decision whether or not to participate will not prejudice your future relations with the University of New South Wales. If you decide to participate, you are free to withdraw your consent and to discontinue participation at any time without prejudice. If you have any questions, please feel free to contact me at fusherna@yahoo.com. My supervisors Prof. Janet Chan (j.chan@unsw.edu.au) and Dr Anne Junor (a.junor@unsw.edu.au) will be happy to answer any further questions about the research. You will be given a copy of this form to keep.

Page | 316

Approval No (09 2 040)

THE UNIVERSITY OF NEW SOUTH WALES

PARTICIPANT INFORMATION STATEMENT AND CONSENT FORM (continued)

The Retention of Knowledge Workers: The Impact of Human Resource Practices on Employees’ Intentions to Stay

You are making a decision whether or not to participate. Your signature indicates that, having

read the information provided above, you have decided to participate.

…………………………………………………… .…………………………………………………….

Signature of Research Participant Signature of Witness

…………………………………………………… .…………………………………………………….

(Please PRINT name) (Please PRINT name)

…………………………………………………… .…………………………………………………….

Date Nature of Witness

Page | 317

Approval No (09 2 040)

REVOCATION OF CONSENT

The Retention of Knowledge Workers: The Impact of Human Resource Practices on Employees’ Intentions to Stay

I hereby wish to WITHDRAW my consent to participate in the research proposal described above

and understand that such withdrawal WILL NOT jeopardise any treatment or my relationship with

The University of New South Wales.

…………………………………………………… .…………………………………………………….

Signature Date

……………………………………………………

Please PRINT Name

The section for Revocation of Consent should be forwarded to Rabeatul Husna Abdull Rahman, 2/2

Barber Ave, Eastlakes 2018, New South Wales Australia.

Page | 318

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APPENDIX G: HISTOGRAMS

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APPENDIX H: NORMAL PROBABILITY PLOTS

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APPENDIX I: BOXPLOT

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APPENDIX J: THE IMPACT OF HR POLICIES/PROGRAMS ON ITS

Human resource strategies Not at all

Slightly Somewhat Moderately To a great extent

per cent per cent per cent per cent per cent Recruitment and selection Recruitment on the basis of merit (n=210)

22

16

20

29

13

Non-discriminatory recruitment practice (n=209)

20

13

16

30

21

Recruitment from within the company (n=209)

20 17 19 34 10

Training Assessment of training needs (n=205)

14

15

15

39

17

Job specific skills training (n=209)

11 13 14 36 26

Leadership training (n=209) 16 12 12 36 24 Career planning Long term career opportunity (n=210)

13

11

15

28

33

Mentoring for career advancement (n=209)

14 11 19 34 22

Training for career development (n=211)

14 11 12 34 29

Training for external marketability (n=208)

21 10 15 30 24

Performance appraisal Developmental performance appraisal (n=210)

16

13

14

38

19

Performance feedback (n=209) 15 13 18 36 18 Appraisal based on continuous improvement (n=207)

13 13 15 34 25

Rewards and promotion Promotion based on performance (n=209)

12

16

15

29

28

Performance based reward (n=208)

15 13 14 32 26

Challenging job assignment (n=206)

15 7 19 37 22

Professional networking opportunity (n=209)

12 12 14 37 25

Fringe benefits Educational leave (n=207)

28

10

13

29

20

Flexible working hours (n=204) 21 6 15 29 29 Working from home (n=206) 39 9 11 25 16 Retirement scheme (n=205) 33 9 10 26 22 Health insurance (n=204) 20 9 11 26 34 Flexible employment contract (n=204)

26 13 16 29 16

Personal loans (n=204) 38 7 15 23 17 Overseas holiday trips (n=206) 42 9 10 21 18 Childcare provision (n=204) 40 10 8 23 19

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APPENDIX K: BOOTSTRAP MULTIPLE MEDIATION RESULT

Dependent, Independent, and Proposed Mediator Variables: DV = ITS IV = HRQuality MEDS = POS and PC Sample size = 206 IV to Mediators (a path)

Coeff se t p POS 4.4365 .5273 8.4135 .0000 PC 8.5559 1.0737 7.9684 .0000 Direct Effects of Mediators on DV (b paths)

Coeff se t p POS .1375 .0601 2.2877 .0232 PC .0591 .0295 2.0016 .0467 Total Effect of IV on DV (c path) Coeff se t p HRQuality 2.1770 .3889 5.5984 .0000 Direct Effect of IV on DV (c' path)

Coeff se t p HRQuality 1.0615 .4427 2.3979 .0174 Model Summary for DV Model R-sq Adj R-sq F df1 df2 p .2165 .2049 18.6065 3.0000 202.0000 .0000 ****************************************************************** NORMAL THEORY TESTS FOR INDIRECT EFFECTS Indirect Effects of IV on DV through Proposed Mediators (ab paths) Effect se Z p TOTAL 1.1155 .2675 4.1702 .0000 POS .6100 .2744 2.2231 .0262 PC .5055 .2586 1.9550 .0506 C1 .1045 .4625 .2260 .8212 *****************************************************************

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BOOTSTRAP RESULTS FOR INDIRECT EFFECTS Indirect Effects of IV on DV through Proposed Mediators (ab paths) Data Boot Bias SE TOTAL 1.1155 1.1318 .0163 .3252 POS .6100 .6141 .0041 .2958 PC .5055 .5177 .0122 .2776 C1 .1045 .0964 -.0081 .4727 Bias Corrected and Accelerated Confidence Intervals Lower Upper TOTAL .5032 1.7781 POS .0715 1.2189 PC .0217 1.1312 C1 -.8452 1.0370 Bias Corrected Confidence Intervals Lower Upper TOTAL .5253 1.8090 POS .0821 1.2436 PC .0293 1.1368 C1 -.8380 1.0406 Percentile Confidence Intervals Lower Upper TOTAL .5295 1.8123 POS .0663 1.2077 PC .0127 1.1245 C1 -.8656 1.0230 ***************************************************************** Level of Confidence for Confidence Intervals: 95 Number of Bootstrap Resamples: 5000 ***************************************************************** INDIRECT EFFECT CONTRAST DEFINITIONS: Ind_Eff1 MINUS Ind_Eff2 Contrast IndEff_1 IndEff_2 C1 POS PC ********************************* NOTES ********************************** ------ END MATRIX -----